F&M Corporate Presentation May 2013


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F&M Corporate Presentation May 2013

  1. 1. Miners, Operators, Builders…unlocking value in resource assetsMay 2013
  2. 2. 2A Unique and Proven ModelCapital TalentStrategyStrengthenCompanies &Increase ValueEach companyhas access to: Global network ofpolitical leaders Industry experts Technical teams Developmental teams Financial experts…in over 30countries aroundthe world.
  3. 3. 3SullidenBrazil PotashBelo SunAguiaAguiaIratiAlder ResourcesCastillianAlderonForbes CoalBlack IronCastillianPitchblackAllanaAllanaSilver BearRodiniaCastillianRodiniaCap-ExCap-ExLegacy PlatinumDachaScandinavianMetalsFerro IronWindamereTAG ResourcesMason GraphiteEmeritaEast Asia MineralsEast Asia MineralsForbesOfficesProjects /OperationsGlobal Mining FootprintCrocodile GoldCrocodile Gold
  4. 4. What We BringIntegrated Team Built on Technical and Operational Expertiseand Accomplished Financial Markets ProfessionalsStan BhartiFounder andExecutive Chairman• Over 50 engineers• Over 50 geologists• Expertise in allmining, energy andagriculture products• 11 (globally)full-timesecuritieslawyers andsupport staff• Over 30 peoplewith expertise in– M&A– Investment banking– Corporate Finance– Corporate Development– Investor relations• Over 20accounting andadministrationstaffAdvisoryBoardTechnicalTeamLegalTeamFinancialTeamAdmin /Accounting4
  5. 5. Agriculture David ArgyleCorporate Finance Fred LeighInvestments David SteinGeology David GowerForbes West Mark MorabitoLegal Pat GleesonGold Group Mark EatonIron Ore Group Matt SimpsonMine Engineering Mike HoffmanOil & Gas Ahmed Said5Executive CommitteeStan Bharti, P.Eng, Founder, Executive Chairman and CEOInternationally educated as a professional mining engineer, Mr. Bharti has over 30 yearsof experience in operations, public markets and finance. He has been instrumental inacquiring, restructuring and financing numerous mining assets worldwide generatingbillions in market capitalization. Mr. Bharti is bottom line driven with an enormouscapacity to manage multiple complex transactions.Who We AreChief Operating Officer – Scott MooreChief Financial Officer – Deb Battiston
  6. 6. International Advisory BoardGeneral John Abizaid, U.S. Army (Ret.)Served for 34 years in U.S. military; Commander of US Central Command 2003-2007Peter Boot, South America25 years in finance; experience in Brazil, Curacao, Venezuela, Paraguay & BoliviaGeneral Jay Garner, U.S. Army (Ret.)35 years in the U.S. military; Command of Air Missile Defense Units during the Gulf WarGeneral Ron Hite, U.S. Army (Ret.)Served 33 years in the U.S. military; Senior Military Advisor to the Army Chief of StaffLarry King, U.S.A.American icon; Former Host of CNN’s Larry King LiveGeneral Lewis MacKenzie, Canadian Army (Ret.)Canadian Forces for 35 years; led the UN peacekeeping mission in SarajevoHon. Pierre Pettigrew, PC, CanadaServed as Canadian Federal Minister of Foreign Affairs and International TradeJim RogersAuthor, financial commentator and successful international investor.General Sir Michael Rose, British Army (Ret.)Highly decorated former SAS Commander for the British ArmyBernard WilsonCorporate Finance and Investment Banking advisor with substantial experience in restructurings6
  7. 7. F&M at a GlanceOver the last 10 years, we have… Discovered more than 20M oz of gold to 43-101 compliant standards worthmore than $34 billion in situ value today Produced almost 1 million oz from mines that were built or re-started by ourteams. Another million ounces have been produced from gold mines boughtfrom F&M companies. Discovered + 900 million tonnes of iron metal to 43-101 compliant standards(and + 3 billion tonnes of iron ore) Produced 3.3 million tonnes of saleable iron ore concentrate before beingacquired and another 12 million tonnes since. Operated, expanded and produced successfully from coal and nickel mines. Discovered under 43-101 or JORC compliant standards resources in silver,zinc, nickel, potash, phosphate, vanadium, tungsten, lithium, and othercommodities.7
  8. 8. Building Companies & Creating Value8Cumulative Value AddedSource: Bloomberg, F&M
  9. 9. Our FeesIn 2012: F&M charges on average $28,000 per month per company Depending on size, stage of development, use of F&M internal resources This includes ALL bonuses paid to F&M and Stan Bharti These charges are fully disclosed in each company’squarterly reports under General & Administrative expenses These fees provide the funding for F&M to operate a global network of morethan 200 senior mining/resource professionals who are instrumental in takingprojects from concept to commercial production Technical, operations management, capital markets, legal, accounting,investor relations and risk management9
  10. 10. Case Study : Avion GoldAn analysis of overhead costs of each of the F&M companiesreveals that they are run significantly cheaper than their peers10G&A per oz of gold production (2011)Source: RBC Capital Markets Data, Forbes & Manhattan ResearchG&A cost of $51/oz
  11. 11. Case Study : Avion Gold11Source: RBC Capital Markets Data, Forbes & ManhattanG&A per oz of gold production (2011) – Avion Gold versus Peers
  12. 12. Belo Sun - Avion - Castillian - Sulliden12Source: RBC Capital Markets Data, Forbes & Manhattan ResearchRelationship between G&A and Market Cap (2011) – Gold Companies
  13. 13. Iron Ore Companies13Source: RBC Capital Markets Data, Forbes & Manhattan ResearchRelationship between G&A and Market Cap (Dec 2012) – Iron OreCompanies
  14. 14. Case Study: Consolidated Thompson• World Class Iron Ore Project in Quebec• Built from exploration stage in 2005 through to production in 2010• Completed scoping study, 3 feasibility studies, secured off-take andfinancing agreements with China.• Market cap when F&M got involved was $1 million; sale price marketcapitalization of $4.9 billion• Raised approximately $1 billion, including a strategic US$240 millioninvestment from Wuhan Iron & Steel Co. (WISCO)Founded Consolidated Thompson Iron Mines14
  15. 15. Case Study: Consolidated ThompsonValue Realized:Acquired by Cleveland Cliffs Natural Resources Inc. for $4.9billion• ~7,700% return over 4 years15
  16. 16. Case Study: Alderon Iron Ore• World class iron ore project in the heart of the Labrador Trough,Canada’s Premier Iron ore District• Kami Property consisted of three map-staked licences at the time ofacquisition (March 2010)• Completed 2 NI 43-101 mineral resource estimates, a PEA, secureda strategic partner and a major off-take agreement within two yearsof acquiring the assetFounded Alderon Iron Ore in March 201016
  17. 17. Case Study: Avion Gold• Acquired Tabakoto / Segala mine in Mali, West Africa mid-2008 fromNevsun Resources for US$ 20 million• Over US$150 million in infrastructure was invested by Nevsun:brand new mill, accommodations, roads and power facilities• Avion’s expert team turned around the operation and put theproperty back into production. We build value in struggling assetswhere others cannot – our technical team is one of the best in theworld• 4.8 million ounce resource with significant exploration upsideFounded Avion Gold CorpMALI17BURKINAFASO
  18. 18. Case Study: Avion GoldProduction Ramping UpGold Production (000’s oz)2009 2011 FuturePotential to doubleproduction~100,000 oz~50,000 oz18• 300% return• Market cap $390M>$0.88$0.22Cost(Oct ‘07)EDVDeal Value
  19. 19. Technical Team StrengthJohn Begeman, Mining EngineerMr. Begeman, is a professional mining engineer with over 30 years of miningexperience and currently President, Chief Executive Officer and Director ofAvion Gold Corporation, a growing gold mining company in Mali, West Africaand the largest company currently in the F&M Group. John was previouslyPresident and CEO of Valencia Ventures Inc., Chief Operating Officer of ZinifexCanada Inc., and Vice President, Western Operations of Goldcorp Inc.. Mr.Begeman is also a director of Yamana Gold Inc. and Premier Gold MinesLimited. He holds a B.Sc. in Mining Engineering, an M.Sc. in EngineeringManagement and an MBA.Mike Hoffman, Mining EngineerMr. Hoffman is a professional mining engineer with over 28 years of experiencein open pit and underground mine operations, projects, engineering andcorporate development. He served in senior executive positions at CrocodileGold, Crowflight Minerals Inc., Goldcorp Inc., Desert Sun Mining Corp., andYamana Gold Inc. He has been responsible for leading a team in the designand construction of large mining projects such as the #3 Shaft Project at RedLake and the construction of Crowflight’s Bucko Mine. Currently, Mr. Hoffman isa director of several F&M Group Companies including Aberdeen Internationaland Crocodile Gold. Mr. Hoffman holds a Bachelor of Applied Science degree inmining engineering from Queen’s University.19
  20. 20. Technical Team StrengthBruce Humphrey, Mining EngineerMr. Humphrey is a mining engineer with over 30 years experience with suchmajor companies as Goldcorp, Inco, Cominco and Noranda. He recently servedas Chairman of Consolidated Thompson Iron Mines Ltd. During his time as thePresident and Chief Executive Officer of Desert Sun he contributed to thesuccessful development of the Jacobina Mine in Brazil. Prior to Desert Sun, Mr.Humphrey served as Senior Vice President and Chief Operating Officer atGoldcorp Inc. during the re-development of its high-grade Red Lake mine. He isa member of the Professional Engineers of Ontario. Currently Mr. Humphreyserves on several F&M boards including Chairman of Black Iron Mining (IronOre, Ukraine).Richard Bishop, Mining EngineerMr. Bishop is a mining engineer that joined F&M from RBC Capital Markets,where he was a gold mining equities analyst covering exploration anddevelopment stage mining companies. He has industry experience in gold,molybdenum, titanium, tungsten, and phosphate, having worked for Mosaic,Iluka Resources, Freeport McMoRan, and Barrick Gold. Mr. Bishop holds aBachelor of Science degree in Mining Engineering from Virginia Tech, and agraduate certificate in Mining Engineering from the European Mining Course inFinland, England, Germany, and the Netherlands.20
  21. 21. Technical Team StrengthDave Anthony, Mining EngineerMr. Anthony has more than 30 years of engineering and environmentalexperience in the mining industry. Recently, he worked with Barrick Gold Corp.as Chief Operating Officer, responsible for African Barrick Gold (ABG) Mines &Capital Projects. He also has held general management positions with Barricksgold and copper operations in Tanzania, directing the design, commissioningand operation of greenfield projects. Mr. Anthony also completed designs formining companies across the globe while a senior metallurgist for SNC-LavalinEngineers & Constructors Ltd., a leading Toronto-based engineering andconstruction group. He is a graduate of Queens University and holds aBachelor of Science in Mining Engineering.Chantal Lavoie, Mining EngineerMr. Lavoie is a professional mining engineer with more than 25 years ofexperience in mining operations and projects. Mr. Lavoie has previously spenteight years at De Beers Canada Inc. where he was responsible for theCanadian operations including Snap Lake and Victor mines, the Gahcho Kueproject and was acting CEO of De Beers Canada. He has also worked forBarrick Gold Corporation at Goldstrike in Nevada and Aur Resources Inc. at theformer Louvicourt mine.21
  22. 22. Technical Team StrengthNeil Ringdahl, Mining EngineerMr. Ringdahl is a mining engineer with 17 years experience held in seniormanagement positions with a number of companies including Anglo Platinum,Golden Star Resources, and an executive position with Peruvian base metalsproducer Volcan Companía Minera. Most recently, he was country manager forAncash Mining (now a Korea Zinc subsidiary). On behalf of the defaultingcreditors, he was responsible for taking the company through the administrationprocess. He also financed and managed the construction and commissioning ofits silver/base metals concentrator and mine. Neil has led a number of miningand project teams on mines across South America and Africa. He spent fiveyears as a consultant specializing in strategic and tactical mine planning onvarious diamond, precious and base metals mines around the world.Peter Tagliamonte, Mining EngineerMr. Tagliamonte is a professional mining engineer and also holds an MBA fromthe Richard Ivey School of Business, at the University of Western Ontario. Heis the former President and CEO of Central Sun Mining Inc. and ChiefOperating Officer of Desert Sun Mining Corp. where he was responsible for thedevelopment of the Jacobina Mine in Brazil into a 4,200-tonne-per-day miningoperation. Mr. Tagliamonte has over 25 years of progressive managerialexperience building and operating mines worldwide, notably in Central andSouth America. In 2005, he received the Mining Journals "Mine Manager of theYear" award in recognition for his work in the mining sector.22
  23. 23. Technical Team StrengthAllan Polk, Mining EngineerMr. Polk is a mining engineer with over 20 years of experience in mineoperations and consulting for both underground and open pit mines in a varietyof commodities at mines and projects around the world. He is an expert inresource to reserve conversion as a qualified person for technical reports andas a corporate representative at operating mines. Allan recently worked at PanAmerican Silver Corporation as the Director of Mining Engineering and was aPrincipal Engineer at Snowden Mining Industry Consultants in Vancouver.Mark Trevisiol, EngineerMr. Trevisiol is a professional mechanical engineer with over 24 years ofmanagement experience in the base metals industry, the majority of whichhave been spent specifically in the nickel sector. Between August 2009 andDecember 2010, Mr. Trevisiol acted as CEO of Crowflight Minerals. Mr.Trevisiol was the Chief Operating Officer of Liberty Mines, where he wasresponsible for their mining and milling operations in Timmins, Ontario.Formerly General Manager of Business Development & Strategy of XstrataNickel Sudbury Operations, Mr. Trevisiol spent 18 years with Falconbridge Ltdin various roles, including General Manager of the Sudbury Smelter businessunit, Production Manager of the Sudbury smelter and Superintendent of theKidd Creek zinc operations. He holds a mechanical engineering degree fromthe University of Waterloo.23
  24. 24. Technical Team StrengthDavid Gower, GeologistMr. Gower has over 20 years of experience in exploration with Falconbridge,Noranda (now X-strata) most recently as Director of Global Nickel and PGMexploration. He was a member of the Senior Operating Team responsible formining projects with Falconbridge. He has led exploration teams which wereresponsible for brownfields discoveries at Raglan and Sudbury, Matagami,Falcondo – DR, and greenfield discoveries at Araguaia in Brazil, Kabanga inTanzania and significant increases in known resources at Kabanga in Tanzaniaand El Pilar in Mexico. He has a Bachelor of Science In Geology from SaintFrancis Xavier University and a Masters degree in Geology from MemorialUniversity.David Stein, GeologistMr. Stein is an investment manager specializing in natural resource assets andcompanies. He is the CEO of Aberdeen International, our in-house fundmanagement company. He served as director for three public companies andthree private companies with direct experience in and exposure to LatinAmerica, Asia, and Africa. Mr. Stein is a former top-ranked mining equityanalyst with Cormark Securities/Sprott Securities in Canada. He earned aBachelors’ degree in Geological Engineering and Masters’ degree in Geologyfrom Queen’s University, Canada.24
  25. 25. Technical Team StrengthBill Pearson, GeologistDr. Pearson is a professional geologist with 38 years of experience in thenational and international mining industry in all phases from grassrootsexploration through to advanced projects and mine development. Has carriedout exploration programs in 15 countries in North and South America, Europe,East Asia and Australia. He was the former Vice President, Exploration forDesert Sun Mining Corp. prior to the April 2006 takeover by Yamana Gold Inc.and the former Executive Vice President, Exploration for Central Sun prior tothe April 2009 takeover by B2Gold Inc. He holds a B.Sc. In Geology from theUniversity of British Columbia and a M.Sc. and Ph.D. from Queens University inOntario.Joseph Arengi, GeologistMr. Arengi is a professional geologist with 38 years of exploration andoperational experience throughout Canada, Central America, South Americaand Africa. Prior to joining Alder Resources, Mr. Arengi was V. P. Exploration forHana Mining Ltd. where he managed the team that discovered 4.0Bn pounds ofcopper and 60MMoz of silver in the Kalahari Copper Belt of northwestBotswana. Prior to that he was Regional Exploration Manager of CentralAmerica and the Caribbean Basin for Aur Resources Inc., a mid-tier copperproducer acquired by Teck Resources Ltd. in 2007. He holds a M.Sc. inGeology from the University of Toronto and a B.Sc. in Geology from the StateUniversity of New York.25
  26. 26. Technical Team StrengthBill Nielsen, GeologistMr. Nielsen is a professional geologist with over 35 years of worldwide mineralexploration and development experience. Most recently, he has been workingas a senior industry consultant to mining exploration companies working with avariety of commodities in various countries and geological environments. From2003 to 2008, Mr. Nielsen was the V.P. Exploration of Nevsun Resources Ltd.,where he played a significant role in the discovery of the Bisha gold-VMSdeposit in Eritrea. He has worked with the F&M group since early 2010.Sarah Palmer, GeologistDr. Palmer is a professional geologist that previously spent fourteen years asan exploration geologist and consultant to the Canadian oil and miningindustries. She has managed projects and conducted exploration programs forboth junior and major international mining companies over a broad range of oiland mineral commodities, including uranium, gold, base metals, and platinumgroup metal deposits. She holds a B.Sc. (Cum Laude) from Saint Mary’sUniversity, M.Sc. in structural geology from Dalhousie University, and a Ph.D. ingeochemistry from Queen’s University.26
  27. 27. Technical Team StrengthHelio Diniz, GeologistMr. Diniz has over 30 years of experience, most recently as Director ofExploration, Brazil for Xstrata (formerly Noranda – Falconbridge). In this role,he was a primary discoverer of the world class Araguaia Nickel Deposits (+100million tonnes, 1.5% Ni) which are currently undergoing scoping studies byXstrata Nickel. He also assembled one of the most impressive propertyportfolios in the prolific Carajas Mineral District and the land position atMangabal. Prior to that, he worked with GENCOR South Africa, and wasinvolved in the evaluation and development of the Sao Bento gold mine inBrazil which operated for 25 years.William Randall, GeologistMr. Randall is a professional geologist with extensive experience in mineralexploration and production, including lithium projects in South America. Mr.Randall has run and supervised numerous discoveries and has taken depositsfrom the resource stage through to feasibility and production.Raymond Spanjers, GeologistMr. Spanjers has twenty-nine years experience in industrial exploration, plantand mine management. Mr. Spanjers joined Rodinia from FMC Lithium division,where he explored for lithium brine deposits in Nevada and the Andean Puna ofArgentina.27
  28. 28. www.forbesmanhattan.com