Prima Corporate Presentation


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Prima Fluorspar Corp. Investor Presentation.
A detailed look at the fluorspar sector and the Delgerkhan mine in Mongolia.

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Prima Corporate Presentation

  1. 1. October 29, 2013
  2. 2. Disclaimer This presentation has been prepared by Prima Fluorspar Corp. (“Prima”) using its best efforts to realistically and factually present the information contained. Subjective opinion, dependence on factors outside Prima’s control and outside information sources unavoidably dictate that Prima cannot warrant the information contained to be exhaustive, complete or sufficient. In addition, many factors can significantly alter the results intended by Prima, rendering the results or outcomes described unattainable or substantially altered. Therefore, interested users should conduct their own assessment and consult with their own professional advisors prior to making any investment decisions. This presentation does not constitute a prospectus or public offering for financing, and no guarantees are made or implied with regard to the success of Prima’s proposed ventures. Interested investors are advised to seek advice from their investment advisors. The presentation is being disclosed to the user for user’s discussion, review, and/or evaluation only. Historical Data Regarding the Delgerkhan Fluorspar Mine A technical report prepared by Micromine Proprietary Limited (“Micromine”) was completed in August 2012. No additional work has been done on the Berkh Uul properties since the completion of the report. We therefore consider that the report to be very reliable and very relevant. However, as the report was not prepared for Prima, it is required under NI 43-101 to be updated and until then, we are not treating the historical estimate as current mineral resources or mineral reserves. Historical Data Regarding the Liard Fluorspar Property Prima Fluorspar Corp (Prima) has not undertaken an independent verification to classify the historic resource estimate quoted from a Mineral Potential Compilation Report for the BC Department of Economic Development, by Wright Engineers Limited and H.N. Halvorson Consultants Ltd., in January 17, 1975 as a current mineral resource. Neither has Prima independently verified the results of the previous exploration work. Therefore, the historical mineral resource should not be relied upon. However, Prima believes the information to be relevant and reasonably reliable. An unknown quantity of the 3.2 million tonnes are on mineral claims outside of the current Liard Fluorspar Property. However, based on the information available, the majority of the estimate is based on the deposits located on Prima’s Liard Fluorspar Property. The key assumptions, parameters and methods of the resource estimate are unknown at this time. New deposit definition drilling and surface trenching are needed to develop a current resource estimate on the property. Prima believes that these historical mineral resources provide a conceptual indication of the potential of the property and are relevant to ongoing exploration. 2
  3. 3. About Prima Prima is positioned to be a major global fluorspar producer and supplier through development and acquisition of leading fluorspar assets 3
  4. 4. Presentation Overview  What is fluorspar?  Pending transaction between Prima Fluorspar Corp. and Firebird Management LLC  Mongolia: rich in fluorspar  Delgerkhan Mine: A strategic acquisition  Liard Project: A fluorspar opportunity in British Columbia, Canada  Southern Illinois, USA: the potential of domestic U.S. fluorspar production 4
  5. 5. Fluorspar Indispensable for Modern Life  Critical Industrial Mineral   Designated “Strategic Commodity” by:  US Department of Defence  European Union Uses of Fluorspar      Aluminum production (Aluminum fluoride) Refrigeration (Fluorocarbons) Consumer products: e.g. Teflon®, Gore-Tex® (Fluoropolymers) Petroleum-based fuels and Uranium Fuel (HF/ UF6) Steel smelting (Metallurgical flux) Source: BDSec Sales and Research 5
  6. 6. Fluorspar Market Fluorspar (Acidspar) Price  Fluorspar Market  2012: $2.4 billion  Fluorspar Pricing 2012: 6.2 million tonnes sold at an average selling price of $400/tonne  Price has increased as much as 5x since 2000  Current prices quoted, $350-400/tonne  Source: Industrial Minerals, Roskill 2013 Fluorspar Consumption Fluorspar Production Japan, 0% Japan, 5% Mexico, 7% Mexico, 15% China Other, 8% Western Europe USA Other USA, 11% Mexico China, 54% Other, 27% USA, 0% Western Europe, 2% Source: BDSec Sales and Research Japan Western Europe, 16% China, 51% 6
  7. 7. Pending Transaction Between Prima and Firebird to Acquire Delgerkhan Mine AGREEMENTS  Prima news release (September 3, 2013) announced that on August 30, 2013 Prima Fluorspar Corp. (“Prima”) entered into a non-binding LOI with Firebird Management LLC (“Firebird”) to purchase Firebird’s 99.8% ownership stake in Berkh Uul JSC (“Berkh Uul”), which owns the Delgerkhan high grade, large resource fluorspar deposit (“Delgerkhan”) in the Khentii Province of Mongolia. The arms-length transaction will be structured as a RTO.  A share exchange agreement between Prima and Firebird is in the final stages of negotiation. CLOSING OF TRANSACTION Closing of the transaction is conditional upon, amongst other things, Prima’s receipt of shareholder approval and TSX Stock Exchange approval.  It is expected that the transaction will close in early 2014.  7
  8. 8. Why Mongolia?
  9. 9. Firebird in Mongolia Firebird Management LLC  Among top performing funds globally  Firebird Fund launched 1994 Net cumulative return: 4,543%  Firebird New Russia Fund launched 1996 Net cumulative return: 2,357%  Extensive knowledge and experience in Mongolia  7 years working in country  40-person business development office in Ulaan Baatar  Owns and operates Sharyn Gol coal mine Berkh Uul JSC  Mongolian fluorspar resource company  Owned by Firebird Management LLC (99.8%)  Primary asset: Delgerkhaan fluorspar mine 9
  10. 10. Mongolia’s Commitment to Resource Sector New Investment Law       Approved October 3, 2013 by 83% of the Parliament of Mongolia Effective November 1, 2013 Eliminates restrictions of the existing law Reopens the country to foreign investment Tax stabilization for corporate income tax, customs duty, VAT, and mining royalties for 5-15 years Requires 67% majority to change New Securities Law     Approved during the 2013 Spring session Effective January 1, 2014 Creates stable and attractive environment for investment Develops Mongolia’s capital markets 10
  11. 11. Fluorspar Rich Mongolia Mongolian Fluorite Regions* 22Mt of contained CaF2 139 known fluorite deposits Over 700 identified fluorite prospects *Source: Roskill Report 2013 Mongolia’s mining sector* 80% of the country’s exports 50% of government revenue *Source: National Statistical Office of Mongolia 11
  12. 12. Delgerkhan Fluorspar Mine Restarting an Important Fluorspar Mine in Mongolia 12
  13. 13. Delgerkhan Fluorspar Mine Historical Resource*  Technical report: August, 2012*  Indicated: 6,620,000t @ 33.7% CaF2  Inferred: 3,020,000t @ 33.0% CaF2  Room to expand license  Regional Setting: many additional mineralized veins High Quality Fluorspar Product  Acceptable to all users  Extremely low sulphide content – less than 0.01%  Low phosphorus – approximately 50 ppm *Please refer to Disclaimer on page 2 13
  14. 14. Delgerkhan Fluorspar Mine Delgerkhan Fluorspar Mine History and Infrastructure Mine History  Exploration  439 core holes done by Soviet Union (6 by Firebird)  88,000m diamond drilling  Trenching and surface pits  Mining  Peak Production of 170,000 t/annum (late 80’s)  1988-1999: 540,000 tonnes CaF2 produced.  Identified veins adjacent to license boundary with historic resources  Many excellent exploration targets offer near term potential Location and Infrastructure  Access by good gravel road  80km from Undurkhaan city, 13 km from Berkh City  Rail spur at Baganuur 270km away  Berkh City - 110 kilowatt electrical power connected to the central grid 14
  15. 15. Delgerkhan Mine Satellite View Historical Resource*  Technical report: August, 2012*  Indicated: 6,620,000t @ 33.7% CaF2  Inferred: 3,020,000t @ 33.0% CaF2  Room to expand license  Regional setting: many additional mineralized veins *Please refer to Disclaimer on page 2 15
  16. 16. View of Underground Mineralization 4 levels • 2 fully developed, 2 partial • Over 10km of drifts and tunnels 2 Shafts • Shaft 1: 200m • Shaft 2: 150m 2013 Infrastructure Replacement Costs: $50-100 million • Shafts and underground development • 439 core holes, 88,000m drilled 16
  17. 17. Longitudinal View of Vein 3/7 * Existing Historic Russian Data  Extremely detailed and comprehensive  SRK Consulting completing a 43-101 technical report to document the Russian work *Please refer to Disclaimer on page 2 17
  18. 18. Re-commissioning the Delgerhkan Mine Estimated 18 month construction period:  De-watering  Estimated 60 days to de-water the existing workings to level 2 (100m depth)  Remediation of the existing shafts  New equipment, piping and wiring  Full replacement of hoists, cables and dumping/receiving systems  Reconditioning of underground workings   Ground support, scaling, piping and tracks will be 100% replaced Ventilation and heating systems installed  Mining Method: Shrinkage stoping   Mechanized multi-car tramming Air operated chutes installed directly into drifts  Construction of flotation facility to produce an acid grade product 18
  19. 19. Delgerkhan Moving Forward Mine Fluorspar Near Term Potential  Identified veins adjacent to current mining license  Excellent exploration targets  Toll processing  Potential acquisition of existing fluorspar mines Management in Place  CEO, Mendsaikhan Bold Extensive experience in fluorspar and Mongolia. Previously with MONROS.  COO, Jimmie Wilde Over 35 years experience in open pit and underground mining. Seasoned mining executive. Previously with Rio Tinto.  CFO, James Flores Over 30 years experience in financial services. MBA, Finance from Wharton School, University of Pennsylvania. Previously CFO Columbia Energy Resources – metallurgical coal mining firm 19
  20. 20. Liard Fluorspar Property Development Asset in British Columbia, Canada 20
  21. 21. Liard Fluorspar Project British Columbia, Canada Large 100%-owned Property 22,588 ha (55,000 acres)  On Alaska Highway  100% Prima-owned claims  Size and Grade* 3.2 million tonnes  Average Grade: 32% fluorspar  Historic Metallurgical Testing* 97% CaF2  Acid Grade = Highest Price  Kaska Dene First Nations  *Please refer to Disclaimer on page 2 Agreements pending 21
  22. 22. Historic Fluorspar Resource* Near Term Mining Potential Historic Deposit  Many showings visible at surface 30 km Strike Length  Contact of limestone and shale Quarry Mining Potential  Mineralization at surface *Please refer to Disclaimer on page 2 22
  23. 23. Liard Fluorspar Property Proposed Work Program Ground Work  Ground geophysics  Mapping and evaluation  Rehabilitation of existing road network Resource Delineation  Trenching to define and expand known mineralization  Drilling to define depth, thickness, continuity and consistency based on trenching and geophysics Analysis and Metallurgy  Preliminary processing flow sheet 23
  24. 24. Significant US Exploration Opportunity: Southern Illinois Fluorspar District 24
  25. 25. Acquiring US Fluorspar Properties in Southern Illinois Fluorspar District Historic Fluorspar District  Proximity to 90% of total historic US fluorspar production  Continuous production for over 100 years  Mining is a culturally important aspect of local communities Strategically Located  Proximity to Ohio River = easy transport  Saleable markets nearby  High US demand with no commercial domestic supply  Railhead 45km away by barge or highway Nearby End-Users  Potential to remediate and restart local fluorspar facilities  Aluminum fluoride production facilities close via barge (Alcoa, Alcan)  Fluorochemical and potential HF facility 40km away in Calvert City  Honeywell U308 conversion facility in Metropolis 45 km away  Honeywell HF facility accessible by rail in Amhersberg, Ontario  Barge access to larger scale Louisiana based chemical facilities (DuPont, Dow, Honeywell) 25
  26. 26. Management Team Structured for Success Name Biography Robert Bick President/CEO • Former CEO/Executive Chair, Evolving Gold Corp. • Increased Evolving market cap from $3 million to $100 million. Raised $50 million. John Gorham, P.Geo. • 35 years in mineral exploration. Chief Geologist • Extensive exploration experience in rare metals and industrial minerals. • Strong community and First Nations orientation. Andrew Davidson CFO • Wide experience in Canadian and international publicly listed enterprises. • Currently serves as CFO at 49 North Resources Inc. Sean Charland Director • Wide experience raising capital and marketing resource exploration companies. • Currently serves as Director at Zimtu Capital corp. Dean Nawata Director • 18 years of public market experience. • 9 years as licensed stockbroker focusing on financing junior mining and oil/gas projects. • Currently serves as President/CEO, Olympic Resources Ltd. Jenna Hardy, P.Geo. • 30 years as mining industry geoscientist. Director • Director, Commerce Resources Corp. 26
  27. 27. Strong Industry Partners Company Building  Western Potash Corp: 137 million tonne reserve; Enterprise NPV - $2.44 billion  Commerce Resources Corp: Two rare metal Preliminary Economic Assessments  Deep Experience in Fluorspar Success Stories  Athabasca Potash Inc: Acquired by BHP Billiton for $340 million  Copper Canyon Resources: Acquired by Novagold for $70 million Ongoing Marketing Programs  Phone, Social media, Email, Conferences  European and Toronto Presence Flow-Through Funds  >$50 million raised 2012 LIFE CYCLE OF TYPICAL EXPLORATION STOCK Renegade Petroleum Buys PH 2011 2010 BHP Buys API Novagold buys CYP EV $70 mm EV $27 mm SHARE PRICE $341mm Cash Copper Canyon Resources 2009 2008 Athabasca Potash IPO (TSXV: API) Prairie Hunter (TSXV: CYP) EV < $15mm Private co. EV< $1 mm IPO 2007 TIME VALUE Athabasca Potash Private Co. EV< $1 mm IDEA 2006 27
  28. 28. For More Information Sean Charland Director T 416-364-0303 C 647-926-7326 Robert Bick President/CEO T 604-681-1568 C 778-847-1089 Dean Nawata Director T 604-561-2821 C 604-561-2821 Tyler Lowes Corporate Communications T 604-681-1568 C 604-329-5097 TSX-V: PF