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November 2012 Corporate Presentation


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November 2012 Corporate Presentation

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November 2012 Corporate Presentation

  2. 2. DisclaimersFORWARD-LOOKING INFORMATION:This presentation contains certain “forward-looking information” under applicable securities laws concerning the business, operations and financial performance and condition of QMX Gold Corporation.Forward-looking information includes, but is not limited to, statements with respect to estimated production and mine life of the various mineral projects of QMX Gold Corporation; the benefits and thedevelopment potential of the properties of QMX Gold Corporation; the future price of gold; the estimation of mineral reserves and resources; the realization of mineral reserve estimates; the timing andamount of estimated future production; costs of production; success of exploration activities; and currency exchange rate fluctuations. Forward-looking information may be characterized by words such as“plan,” “expect,” “project,” “intend,” “believe,” “anticipate”, “estimate” and other similar words, or statements that certain events or conditions “may” or “will” occur. Forward-looking information is basedon the opinions and estimates of management at the date the statements are made, and are based on a number of assumptions and subject to a variety of risks and uncertainties and other factors thatcould cause actual events or results to differ materially from those projected in the forward-looking information. Assumptions upon which such forward-looking information is based on the successfulcompletion of new development projects, planned expansions or other projects within the timelines anticipated and at anticipated production levels; the accuracy of mineral reserve and resourceestimates, grades, mine life and cash cost estimates; whether mineral resources can be developed; title to mineral properties; financing requirements; and general economic conditions. Many of theseassumptions are based on factors and events that are not within the control of QMX Gold and there is no assurance they will prove to be correct. Factors that could cause actual results to vary materiallyfrom results anticipated by such forward-looking information includes changes in market conditions, variations in ore grade or recovery rates, fluctuating metal prices and currency exchange rates, changesin project parameters, the possibility of project cost overruns or unanticipated costs and expenses, labour disputes and other risks of the mining industry, failure of plant, equipment or processes to operateas anticipated, the business of the companies not being integrated successfully or such integration proving more difficult, time consuming or costly than expected as well as those risk factors discussed orreferred to in the annual Management’s Discussion and Analysis and Annual Information Form for QMX Gold Corporation filed with the securities regulatory authorities in Canada and available at under thecorporations profile on SEDAR at Although QMX Gold has attempted to identify important factors that could cause actual actions, events or results to differ materially from those describedin forward-looking information, there may be other factors that cause actions, events or results not to be anticipated, estimated or intended. There can be no assurance that forward-looking informationwill prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. QMX Gold undertakes no obligation to update forward-looking information ifcircumstances or management’s estimates or opinions should change except as required by applicable securities laws. The reader is cautioned not to place undue reliance on forward-looking information.Statements concerning mineral reserve and resource estimates may also be deemed to constitute forward-looking information to the extent they involve estimates of the mineralization that will beencountered if the property is developed. Comparative market information is as of a date prior to the date of this presentation.IMPORTANT NOTICE:This presentation does not constitute an offer to buy or an invitation to sell, any of the securities of QMX Gold Corporation. Such an offer may only be made pursuant to a registration statement andprospectus filed with the U.S. Securities and Exchange Commission and an offer to purchase and circular filed with Canadian securities regulatory authorities.CAUTIONARY NOTE TO U.S. INVESTORS CONCERNING ESTIMATES OF MEASURED, INDICATED AND INFERRED RESOURCES:This presentation uses the terms “Measured, “Indicated” and “Inferred” Resources. U.S. investors are advised that while such terms are recognized and required by Canadian regulations, the Securities andExchange Commission does not recognize them. “Inferred Resources” have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot beassumed that all or any part of an inferred resource will ever be upgraded to a higher category. Under Canadian rules, estimates of Inferred Resources may not form the basis of feasibility or other economicstudies. U.S. investors are also cautioned not to assume that all or any part of an Inferred Mineral Resource exists, or is economically or legally mineable.NATIONAL INSTRUMENT 43-101:David Rigg, the Chairman of the Company and a Qualified Person under NI 43-101, has supervised the preparation of and approved the scientific and technical information in this presentation. Thispresentation contains information relating to a feasibility study that includes Inferred mineral resources which are considered too speculative geologically to have economic considerations applied to themthat would enable them to be categorized as mineral reserves. There is no certainty that the preliminary assessment will be realized.NOVEMBER 2012 TSX: QMX OTCQX: QMXGF 2
  3. 3. MANITOBA Snow Lake Mine Exploration: Snow Lake Camp - Gold Snow Lake Mining Camp Rouyn-Noranda & QUEBEC Val-d’Or Mining Camps Lac Herbin Mine Lac Pelletier Project Winnipeg Exploration: Toronto Val d’Or Camp Corporate Office - Gold & VMS Rouyn-Noranda Camp - Gold & VMSNOVEMBER 2012 TSX: QMX OTCQX: QMXGF 3
  4. 4. Snow Lake Mine – Growth Recently operated by Kinross/High River Gold from 1995-2005, producing 822,550 ounces gold Total historic production of 1.44 M ounces gold from Main Mine, No. 3 Zone, and Birch deposits — Mined: 12.1 M tons @ 4.67 g/t Au All surface installations in place — Mine rebuilt in 1995 under TVX-High River JV — Crushing, milling and mine infrastructure in excellent condition Permitting and environmental licenses maintained Existing access to ore zone in Main Mine plus ramp access to ore zone in #3 ZoneNOVEMBER 2012 TSX: QMX OTCQX: QMXGF 4
  5. 5. Snow Lake Mine – Feasibility Feasibility Study of Main Mine & #3 Zone – October 2010 Pre-Production Capital Expenditures $40.8 million Sustaining Capital Cost $36.1 million Payback Period 1.7 years Recoveries 93.3 % Average Annual Production 83,000 oz.Au Mine Life 5 years Cash Cost (LOM) US$ 640/oz.Au Cash Cost (LOM) CDN$ 81.41/ tonne Accumulated Cash Flow (Pre Tax) $140.7 million ¹ Reserves / Resources: Proven and Probable Reserve (4.04 g/t) 451,900 oz.Au Measured and Indicated Resources (4.14 g/t) ² 728,000 oz.Au Inferred Resources (4.43 g/t) ² 336,700 oz.Au ¹ Bloomberg average consensus modelled gold price deck of 2011 – $1,277, 2012 – $1,303, 2013 – $1,276, 2014 onwards – $1,051; ¹ Canadian/US foreign exchange at 2011 – 1.04, 2012 at 1.04, 2013 at 1.04 and 1.06 onwards. ² Cut off grade of 1.95 g/tNOVEMBER 2012 TSX: QMX OTCQX: QMXGF 5
  6. 6. Snow Lake Mine – Feasibility  Recent internal review identified potential alternatives to the original estimates set forth in the Snow Lake Mine Feasibility Study  Key potential changes include:  Enlarging the man-camp from a 50-person camp to a 100-person camp to reflect the potential need to recruit additional workers from outside the local area  Operating leases for equipment throughout life of mine vs. purchase after reaching commercial production Impact expected to increase cash costs to US$825/oz (additional US$185/oz of cash costs or US$75mm over life of mine)NOVEMBER 2012 TSX: QMX OTCQX: QMXGF 6
  7. 7. Snow Lake MineNOVEMBER 2012 TSX: QMX OTCQX: QMXGF 7
  8. 8. Snow Lake Mine – ScheduleMain Mine Boundary Zone Kim Zone No.3 Zone 1 1 2 2 3 1780L Snow Lake Production Begins 4 Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 243 Zone Dewatering + Reconditioning3 Zone Pre-Production from ramp 1 Commercial Production3 Zone Production from ramp 2 2,000 TPD in Q7Shaft & Mine ReconditioningMain Mine Pre-ProductionMain Mine Production 1 2 3 4NOVEMBER 2012 TSX: QMX OTCQX: QMXGF 8
  9. 9. Snow Lake Mine - Exploration Birch Zone No. 3 Zone Location and Snow Lake Mine Geology Mining Camp with 16 known #3 Zone mineral deposits Kim Zone Boundary Zone East Zone Caper Zone Snow Lake Snow Lake Mine Lalor Bounter ZoneNOVEMBER 2012 TSX: QMX OTCQX: QMXGF 9
  10. 10. Snow Lake Mine - ExplorationUpper Main Mine Area 2011 exploration identified additional extensions to mining areas on the upper mine levels Exploration effort increased our confidence in the mineralized structures within the zone and around the mine area Additional areas of potential will be delineated when they can be accessed from the undergroundNOVEMBER 2012 TSX: QMX OTCQX: QMXGF 10
  11. 11. Lac Herbin – Production Lac Herbin Average Cash CostLAC HERBIN—Turnaround and Beyond $3,000.00 Turnaround $2,500.00 Commences 2011 $2,000.00  Review of Mineral Resources $1,500.00 $1,500  Review of life of mine plan (and reserve) $1,300 $1,000.00  Increasing mine exploration to bolster current 2012 Cash Cost $500.00 Guidance outlook $-  Launched turnaround plan in June, intensive Q1 Q2 Q3 Q4 Q1 Q2 Q3 development to give production flexibility 2011 2012  Recruitment Phase—hiring skilled miners over the third quarter  Production of 10,197 oz in 2011, with 3,724 in Q4 Lac Herbin Production 10,000.00 9,000.00 8,000.00 2012 Quarterly Ounces Recovered 2012 7,000.00 Production Goal  Mineral Resource update part of year end exercises 6,000.00 5,000.00  Production guidance 18,500 oz to 20,500 oz 4,000.00 3,000.00  Cost guidance of $1,300 - $1,500 per oz 2,000.00 1,000.00  Continue to replace and grow resources 0.00 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2009 2010 2011 2012NOVEMBER 2012 TSX: QMX OTCQX: QMXGF 11
  12. 12. Mineral Reserves and ResourcesMineral Reserves LAC HERBIN(1) SNOW LAKE(2) (Cut-off 5.0 g/t ) (Cut-off 1.95 g/t ) Tonnes g /t Oz Au Tonnes g /t Oz Au Proven 43,000 7.45 (3) 10,300 7,000 3.81 900 Probable 96,000 6.45 19,900 3,470,000 4.04 451,000 TOTAL 138,000 6.81 30,200 3,477,000 3.9 451,900 *Mineral reserves are also included in Mineral resource values (1) 43-101 Technical Report on Mineral Reserve Estimate at the Lac Herbin Mine, April 18, 2011 prepared by Austin Hitchins, B.Sc., P. Geo., Audrey Lapointe, B.Sc., P. Geo. and Patrick Sévigny, Ing., (2) Snow Lake Mine Re-activation Project Technical Report NI 43-101 , December 10. 2010 prepared by Mr. Andre Roy Eng.NOVEMBER 2012 TSX: QMX OTCQX: QMXGF 12
  13. 13. Mineral Reserves and ResourcesMineral Resources LAC HERBIN(1) SNOW LAKE(2) Tonnes g /t Oz Au Tonnes g/t Oz Au MEASURED 67,000 9.2 19,900 7,000 4.76 1,000 INDICATED 117,600 7.6 28,800 5,464,000 4.14 727,000 INFERRED 283,500 7.4 67,300 2,367,000 4.43 336,700 *Mineral Reserves are also included in Resource values (1) 43-101 Technical Report on Mineral Reserve Estimate at the Lac Herbin Mine, April 18, 2011 prepared by Austin Hitchins, B.Sc., P. Geo., Audrey Lapointe, B.Sc., P. Geo. and Patrick Sévigny, Ing., (2) Snow Lake Mine Re-activation Project Technical Report NI 43-101 , December 10. 2010 prepared by Mr. Andre Roy Eng.NOVEMBER 2012 TSX: QMX OTCQX: QMXGF 13
  14. 14. Production Profile 100,000 Snow Lake 80-90,000 (est.) ProductionProduction OUTLOOK (oz) 2009 2010 20,000 33,000 23,000 2011 18-20,000 Lac Herbin 7-12,000 (est.) (est.) ProductionNOVEMBER 2012 TSX: QMX OTCQX: QMXGF 14
  15. 15. Val D’Or Property Aurbel Gold Mill Val-d’Or, Quebec Lac Herbin Mine  212 100%- IAMGOLD owned by QMX Gold Agnico Eagle Val-d’Or-Malartic Mining Camp (Historic Production) 0.7 Mt Cu, 0.7 Mt Zn, 27.2Moz Au, 50.0 Moz Ag  100%-owned Lac Herbin Mine – in QMX Gold QMX VMS production Osisko Agnico EagleNOVEMBER 2012 TSX: QMX OTCQX: QMXGF 15
  16. 16. Current Financing Plans $17,500,000 Bridge Financing – Closed November 28, 2012  Fully secured bridge financing provided by Third Eye Capital  Loan Terms:  1 year with interest payments starting 7 months from closing at $250,000 per month  In consideration of the Bridge Financing, Third Eye will receive 2.9 million warrants at $0.2525, the 10 day VWAP on closing  First tranche was used to pay out previous bridge of $10.3 million  Second tranche will be used for general company administration and expensesNOVEMBER 2012 TSX: QMX OTCQX: QMXGF 16
  17. 17. Upcoming Financing Plans Snow Lake Project Financing – Announced on May 29, 2012  US $45 million debt facility  Term of 4.5 years  Interest rate of LIBOR + 5.5 % before commercial production and LIBOR + 4.5% after commercial production  Hedging requirement from 40 to 50% of the 4.5 year production profile  Technical due diligence complete  Other conditions will be negotiated in the course of settling a definitive agreementNOVEMBER 2012 TSX: QMX OTCQX: QMXGF 17
  18. 18. Restructuring Exploration Assets Sale of Rouyn-Noranda Exploration Properties to Falco Pacific Resources (previously Druk Capital) Closed September 24, 2012  Aggregate gross proceeds of $5 million in cash and approximately 18% ownership of Falco post-financing  Exploration on properties to continue without dilution at the QMX level  Exploration team to be transferred to Falco  Exposure to exploration success will be experienced through equity participationNOVEMBER 2012 TSX: QMX OTCQX: QMXGF 18
  19. 19. Capital Structure Outstanding: Issued 30.8 Million Warrants 03.7 Million Average Price $6.67 Options 00.8 Million Average Price $4.42 Fully Diluted 35.3 Million Share Price (as of Oct. 30, 2012) C$ 0.30 Market Cap: Basic C$ 9.0 Million Avg. trading volume (30 day average) 83,000 shares/day Debt Outstanding Convertible Debt C$4.21 Million Conversion price $8.00 Bridge Loan C$17.5 MillionNOVEMBER 2012 TSX: QMX OTCQX: QMXGF 19
  20. 20. *Source: NBF and company listings.NOVEMBER 2012 TSX: QMX OTCQX: QMXGF 20
  21. 21. 2012 Objectives  Lac Herbin  production 18,500 to 20,500  Resource update as part of 2012 year end exercises  Snow Lake Project to Production decisions  Resource update as part of 2012 year end exercises  Financing decisions  Exploration (Ongoing)  Regional compilation for next round of targetsNOVEMBER 2012 TSX: QMX OTCQX: QMXGF 21
  22. 22. Management Team Directors and Officers David Rigg, Chairman Maurice Colson, Director Robert Bryce, Director Mark Eaton, Director Chantal Lavoie, Director Senior Management Franҫois Perron, President and CEO Deb Battiston, CFO Gerald Thornton, VP Manitoba Operations Patrick Sévigny, VP Quebec Operations Jean Girard, Exploration Manager, QuebecNOVEMBER 2012 TSX: QMX OTCQX: QMXGF 22
  23. 23. Contact Information QMX Gold Corporation TSX: QMX OTCQX: QMXGF Investor Relations Rob Hopkins (Toronto) Louis Baribeau(Montreal) +1 416 861 5899 +1 514 667-2304 Find us onNOVEMBER 2012 TSX: QMX OTCQX: QMXGF 23