Guinea-Bissau: phosphate for food

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Objective Capital's Africa Resources Investment Congress 2011
Ironmongers' Hall, City of London
14-15 June 2011
Day 1: Africa Resources
Speaker: Glenn Laing, Plains Creek Phosphate

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Guinea-Bissau: phosphate for food

  1. 1. AFRICA RESOURCESINVESTMENT CONGRESS Guinea-Bissau: phosphate for food Glenn Laing – Plains Creek PhosphateIRONMONGERS’ HALL, CITY OF LONDON ● TUESDAY-WEDNESDAY, 14-15 JUN 2011www.ObjectiveCapitalConferences.com
  2. 2. TSX-V : PCP A DEVELOPMENT & PRODUCTION PROJECTPHOSPHATE IN GUINEA BISSAU WEST AFRICA BISSAU,CORPORATE PRESENTATION JUNE 2011
  3. 3. TSX-V : PCPForward Looking InformationThis presentation includes statements that are forward‐looking. All statements in the Furthermore, because this financial outlook is based upon estimates and hypotheticalpresentation (other than statements of historical fact) that address future operations or plans of assumptions about circumstances and events that have not yet taken place and are subject toPlains Creek Mining Limited (“Plains Creek) or Resource Hunter Capital Corp. (“RHC”) or their variation, there are no representations or warranties associated therewith, and there can be noaffiliates, proposed acquisitions, d l ffili d iii development and commissioning of mines, l d i i i f i long term assurance that the outlook will be attained. Readers are cautioned that no forward lookingcorporate goals, estimated development costs or operating costs, marketing plans or statement or financial outlook is a guarantee of future performance. Plains Creek and RHCanticipated customers, mine reserves or resources, expansion of production, demand for assumed no obligation to update these forward‐looking statements or financial outlook exceptproduct, and the future of the mining industry in general and the mining industry in Guinea‐ as may be required by law.Bissau in particular are forward‐looking statements. Such forward‐looking information involvesknown and unknown risks, uncertainties and other factors which may cause actual results, Not an Offering of Securitiesperformance or achievements to be materially different from the results, performance or This presentation is for information purposes only and does not constitute an offer to sell or aachievements implied by the forward‐looking statements. Factors that could cause actual solicitation to buy the securities of Plains Creek or any other securities. y yresults t diff materially i l d b t are not li it d t market prices f phosphate, general lt to differ t i ll include, but t limited to, k t i for h h t leconomic, market and business conditions, risks and uncertainties related to Plains Creek’s andRHC’s abilities to complete their acquisition of phosphate properties in Guinea‐Bissau, to Cautionary Note to U.S. Investors Concerning Estimates ofsuccessfully develop and commission mines at the property, to obtain all necessary permits for Measured and Indicated Resourcesdevelopment and production as and when required, to obtain listings for securities of RHC on aCanadian stock exchange upon completion of the acquisition of Plains Creek by RHC, estimation This presentation uses the terms “Measured” and “Indicated” Resources. U.S. investors areor resources and reserves, estimation of demand for the product, development and production advised that while such terms are recognized and required by Canadian regulations, the U.S.costs, transportation delays and costs, ability to convert expressions of interest from potential Securities and Exchange Commission does not recognize them. U.S. investors are cautioned notcustomers i t d fi iti sales agreements, d l t into definitive l t delays i construction of th mining operation, in t ti f the i i ti to assume that any part or all of mineral deposits in these categories will ever be converted intoaccidents, equipment breakdowns, title matters, labour disputes or other unanticipated reserves.difficulties with or interruptions in development or production, phosphate price fluctuations,failure to obtain adequate financing when needed, exchange rate fluctuations, and risks anduncertainties associated with doing business in Guinea‐Bissau. EBITDA References in this presentation to “EBITDA” are to inferences from the Technical Report (theAlthough Plains Creek has attempted to identify important factors that could cause actual “Technical Report”) on the Preliminary Economic Assessment of the Farim Phosphate Project inresults to differ materially, there may be other factors that cause results not to be as Guinea‐Bissau, prepared for RHC by IMC Group Consulting Ltd. and GBM Minerals Engineeringanticipated, estimated or i t d d Th ti i t d ti t d intended. There can b no assurance th t statements containing be that t t t t i i Consultants Limited. Such EBITDA consists of the gross sales of production less operating costs imited. IT Aforward looking information will prove to be accurate as actual results and future events could before interest, income taxes, depreciation and amortization. Management of Plains Creek anddiffer materially from those anticipated in such statements. Accordingly, readers should not RHC believe that, in addition to net earnings, EBITDA is a useful complimentary measure of cashplace undue reliance on statements containing forward looking information. available prior to debt service, capital expenditures and income taxes. However, EBITDA is not a recognized measure under Canadian GAAP and does not have a standardized meaningThere may be information in this presentation that is information about prospective results of prescribed by Canadian GAAP. Readers are cautioned that EBITDA should not be construed asoperations, financial position or cash flows (a “financial outlook”). This financial outlook is an alternative to net earnings determined in accordance with Canadian GAAP as an indicator ofprovided only to assist in an evaluation of the prospective business outlined in this presentation, performance, or to cash flows from operating, investing and financing activities as a measure ofbut are not to be relied upon as accurate representations of future results and may not be liquidity and cash flows. Plains Creek’s method of calculating EBITDA may differ from the q y g yappropriate for any other purpose. methods used by other entities and, accordingly, its EBITDA may not be comparable to similarly titled measures used by other entities.. www.plainscreek.com 3
  4. 4. TSX-V : PCPACQUISITION &OWNERSHIP STRUCTURE • Share Purchase Agreement to acquire 100%  Share Purchase Agreement to acquire 100% Plains Creek Phosphate Corp GB Minerals AG Previously known as RESOURCE HUNTER CAPITAL CORP 50.1% • A Swiss Corporation holds  Production Agreement  S i C i h ld d i (on very attractive terms) Issued in 2009 – mining  GB MINERALS AG, Risch (CH) license with  exclusive rights to explore, mine and  commercialize Farim Phosphate Deposit 100% Ownership (sole asset) • Undertaking Bankable Feasibility Study (complete Q4 2011) (complete Q4 2011) GB MINERALS SARL Guinea Bissau •Operating Company  Share Purchase Agreement 2010                                  2011                 2012                   2013 PURCHASE 50.1% PURCHASE 24.9% PURCHASE 25% GB MINERALS AG GB MINERALS AG GB MINERALS AG $ 19 Million EUR $13.5 Million EUR  $13.5 Million EUR  4 www.plainscreek.com
  5. 5. TSX-V : PCPPROJECT LOCATION •Approximately 25  km south of Senegal  km south of Senegal S E N E G A L Border •Sea Port location  80km south and  connected by paved  FARIM road. d •Project area is  bisected by Cacheu  River that flows to  Atlantic (155km).  GUIN A ISSAU GUINEA‐BISSAU •Production License  issuedNorthern partof Central  fC t lGUINEA‐BISSAU, Pointe ChugueWEST AFRICA SEA BISSAU PORT (location) 5 www.plainscreek.com
  6. 6. TSX-V : PCPMINERAL LICENSES& LEASES AREA 1741.61 sq kms 306.25 sq kms www.plainscreek.com 6
  7. 7. TSX-V : PCP PROJECT HISTORY GB Minerals AG BRGM Positive Champion Resources Discovered during 30 drill holes Core drilling Core drilling PreFeasibility 34 drill holes 34 drill holes oil exploration  Progressive validation  P i lid i +100 drill holes Study Confirmed BRGM results. Studies. ID M & I resources 113 million tonnes 166 million tonnes 105 million tonnes Grading 29.8% P2O5 Grading 29.1% P2O5 32.75 %P2O51950 1960 1970 1980 1990 2000 2010• Discovered during oil exploration in the early 1950’s Production Agreement• During 1980’s French mining agency (BRGM) carried core drilling program (+100 drill holes) and identified resource of 113 1980 s ( 100 million tonnes grading 29.8% P2O5. Metallurgical test work produced phosphate rock concentrate grading 36.5% P2O5. In 1986 Sofremines produced positive feasibility study. Did not go ahead because of prevailing phosphate market conditions.• From 1996 to 2003 Champion Resources conducted successive stages of feasibility work including drilling 34 drill holes. Confirmed BRGM results and extended resource. Identified a resource of 166 million tonnes grading 29.1% P2O5. Mining plan of 37 million tonnes grading 32.5% P2O5 for 15 year mine life was developed. Phosphate market conditions and the political situation in Guinea Bissau prevented project going ahead ahead.• 2004 to Present. GB Minerals AG, a Swiss company acquired exploration license and mining lease. Carried out successive validation studies, excavated a box cut, drilled 30+ drill holes. Completed Measured & Indicated resources of 105 million tonnes grading 32.75% P2O5. Twenty Five year mining plan of 68 million tonnes grading 31.5% P2O5 .• In May 2009 GB Minerals AG signed a comprehensive production agreement with Guinea Bissau Government. y g p p g• In 2010, Plains Creek completed a 43‐101 compliant resource estimate of 84 million tonnes Measured and Indicated Resources at a grade of 29.9% P2O5 and Inferred Resources of 44 million tonnes at a grade of 29.6% P2O5. 7 www.plainscreek.com
  8. 8. TSX-V : PCPDRILLING HISTORY 146 HOLES www.plainscreek.com 8
  9. 9. TSX-V : PCP DEPOSITSATELLITE VIEW OF THE MAIN DEPOSIT AREA OVERVIEW OF P2O5 CONTENT IN DEPOSIT AREA  FARIMNote: The Production License for the exploitation of phosphate ore covers an area of 30,625 ha. The initial focus area (above) of  p p p , ( )the 25 year mining plan of 68 million tonnes @ 29.9% P2O5 is contained within the measured and indicated resource of 84 million tonnes of the upper FPA upper layer. www.plainscreek.com 9
  10. 10. TSX-V : PCP PHOSPHATE HORIZONS FPA & FPB Two Main Phosphate Horizons Simplified Cross Section FPA / FPB Not to Scale Ground Level MINING Overburden Av. 39 metres FOCUS (clayey sand) 68 MILLION TONNES (based on 3.3m av. seam thickness)Cut-off1 metre FPA 29.9% P2O5 3.3m Cut-off 1 metre 128 MILLION TONNES (based on 1.5m cut-off) 84 million tonnes Measured & Indicated 44 million tonnes Inferred A few metres below FPB 10-15% P2O5 Average 20-60 metres 450 MILLION TONNES 50% underlies PFA www.plainscreek.com 10
  11. 11. TSX-V : PCPDEPOSIT AREA www.plainscreek.com 11
  12. 12. TSX-V : PCP DEPOSIT AREAOPEN IN 3 DIRECTIONS AREA OF HIGH QUALITY PHOSPHATE RESOURCE 2 @ 29.9% P2O5 11 POTENTIAL DIRECTIONS2 TO EXPAND THE SIZE3 OF THE RESOURCE EXISTING RESOURCES128 MILLION TONNES @ 29.8% P205 comprising 84 MILLION TONNES @ 29.9% P2O5 3 Measured & Indicated 44 MILLION TONNES @ 29.6% P2O5 Inferred PLUS450 MILLION TONNES @ 10-15% P2O5 Geological Resource www.plainscreek.com 12
  13. 13. TSX-V : PCP MINING & TREATMENT OPERATIONSMining (no drilling or blasting)Mining (no drilling or blasting) • Overburden average 39 meters, Stripping ratio 11.8:1. Soft clayey sand (no drilling and  blasting) • Use conventional truck and shovel overburden stripping for upper 7‐10 meters • Using stripping dredges to strip overburden to hanging wall of FPA phosphate layer • UiUsing production dredges for 3.3 meter thick FPA phosphate layer (produce slurry of very  d ti d d f 33 t thi k FPA h h t l ( d l f fine, liberated phosphate particles , 1 mm) • Production rate per annum : 2,760,000 tonnes ROM phosphate ore grading 29.9% P2O5Beneficiation (no crushing) • Screening of +1 mm particles Screening of +1 mm particles • Sizing : remove minus 10 micron particles • Magnetic separation to remove iron particles • Slurry pipeline to port (80kms) • Dry product at port to 8 ‐10 % moisture for shipping • Production rate per annum – 2,160,000 tonnes at 8% moistureRecovery (based on BRGM and Champion test work) • P2O5 recovery :79.6% • Weight recovery : 72 5% Weight recovery : 72.5% • Product : P2O5 phosphate rock concentrate grading 32.5% P2O5 and 3.5% Fe+Al content  ‐ Medium grade concentrate 70 BPL • Production rate per annum: 2,000,000 dry tons. 13 www.plainscreek.com
  14. 14. TSX-V : PCPPRODUCTION AGREEMENT Production Agreement  • Includes production license, mining lease and incentive agreement Phosphate Rock Ownership • 100% GB Mi l AG ( 100% GB Minerals AG (no government participation) i i i ) Duration • 25 years, renewable for successive period of 25 years Infrastructure • Port, roads, pipelines etc at sole discretion of company.  • No Government taxes, license fees or other costs Rights and Obligations Rights and Obligations • Regulates rights regarding access and use, building of infrastructure,  expats, imports, exporting products etc Taxes and Royalties • 1010 year tax holiday from start of commercial operations h lid f f i l i • 2% tax deductible royalty on production www.plainscreek.com 14
  15. 15. TSX-V : PCP INFRASTRUCTURE POWER FARIM ROAD / PIPELINE • Install diesel or heavy oil • World Bank financing generators at mine site ‐ +/‐ 10‐ 15 MW construction /upgrading of existing paved road from Farim to Mansoa (56 Kms)• Recently announced 130 MW oil fired power station to be built at Bissau. Planning power line in • Existing road (14 kms) from future to mine site. Financed by Mansoa to Dugal (turnoff to port) World Bank and operated by US company. GUINEA BISSAU • Pipeline from Farim to Pointe Chugue (port) ‐80 80 kms to be constructed by company MANSOA GENERAL• Port, roads, Port roads pipelines etc at sole PORT (SOLE USE) ( ) discretion of company. DUGAL • Located 80 kms from mine site and 18 km east of• No Government taxes, license capital city of Bissau fees or other costs • Depth at low tide is 12 meters SEA PORT • Access for 35,000 to 40,000 tonnes vessels directly from Atlantic BISSAU • Storage facilities for 40,000 tonnes. 24 hour loading turnaround NOTE: Phosphate rock exists close to the surface allowing open pit mining with direct connection to transport. 15 www.plainscreek.com
  16. 16. TSX-V : PCPPRODUCTION & MARKET PLAINS CREEK - PRODUCTION 2 MILLION TONNES PER ANNUM Source: Stonegate www.plainscreek.com 16
  17. 17. TSX-V : PCPWORLD MARKETS WESTERN EUROPE USA CHINA INDIA BRAZIL HIGH DEMAND FOR PHOSPHATE ROCK CONCENTRATE www.plainscreek.com 17
  18. 18. TSX-V : PCPFEASIBILITY STUDY• a s C ee as a a ded G e a s g ee g a co t act to co p ete a a ab e eas b ty Study Plains Creek has awarded GBM Minerals Engineering a contract to complete a Bankable Feasibility Study  on the Farim Phosphate Deposit, Guinea Bissau. “EXPERTS IN DESIGN, ENGINEERING, PROJECT MANAGEMENT, PROCUREMENT AND CONSTRUCTIONAbout GBM Mineral Engineering Consultants OF PROCESS PLANTS …”• GBM Minerals Engineering Consultants Limited (GBM) is an independent firm of engineering consultants  specialising in  the development, design and construction of new mining projects and the refurbishment of  existing gold, base‐metal and industrial minerals ore processing plants. They are experts in the design,  engineering, project management, procurement and construction of such plants and are currently  providing technical services to the mining industry in Africa, Central Asia, Russia, Europe, Australia, the  Americas and MiddleEast• GBM was formed in March of 1994 by the employees of a large North American engineering consultant  following the closure of that consultant’s Gold and Base Metal Mining Projects Centre in London. The  Centre had operated as a stable unit with the employees and other consultants working together on  international projects for several years. The GBM  employees have all worked for significant periods in the  i t ti l j t f l Th GBM l h ll k d f i ifi t i d i th mining industry, worldwide, and are familiar with the latest work practices and technologies• GBM has been certified by the British Standards Institution and deemed by them to operate a Quality  Management System which complies with the requirements of BS EN ISO 9001:2000. • GBM’s Head Office is located in Twickenham, 15 kilometres south‐west of London City centre. www.plainscreek.com 18
  19. 19. TSX-V : PCPCAPITAL & BASED ON 43-101OPERATING COSTS TECHNICAL REPORT CAPITAL EXPENDITURE US$Feasibility Study 5,000,000 OPERATING COSTEngineering and design 23,155,000 per tonne  US$Overburden removal 21,220,000 Mining 25Infill drilling + exploration 5,228,000 General Expenses 5Geology /Hydrology 500,000 Processing 15Mining /dredging 25,000,000Processing plant 77,600,000 Power + water 10Power Plant 12,000,000 Pipeline 3Water 1,850,000 1 850 000 Port P 2Mine site + Infrastructure 16,045,000 TOTAL COSTRoads & Pipeline 58,750,000 per tonne $60Port 35,700,000 35 700 000General Overhead 6,084,000TOTAL EXPENDITURE $288,132,000 www.plainscreek.com 19
  20. 20. TSX-V : PCPFINANCIAL MODEL FINANCIAL MODEL 2011 2012 2013 2014 2015 2016 2017 - 38 Production ROM (000 Tonnes) 1,380 2,760 2,760 2,760 2,760 Recovery by Wt (%) 72.50 72 50 72.50 72 50 72.50 72 50 72.50 72 50 72.50 72 50 Phosphate Rock (000 tonnes) 1,001 2,001 2,001 2,001 2,001 Price phosphate rock US$/t 100 100 100 100 100 Sales (US$ 000s) 100,050 200,100 200,100 200,100 200,100 Operating Cost /tonne (US$) 60 60 60 60 60 Total Operating Costs (US$ 000s) 60,030 120,060 120,060 120,060 120,060 EBITDA 40,020 80,040 80,040 80,040 80,040 CAPEX (US$ 000s) $ 6,084 106,917 169,181 10,100 10,100 10,100 10,100 Discount Rate Pretax NPV 5% $ $636 Million 10% $254 Million 15% $104 Million 20 www.plainscreek.com
  21. 21. TSX-V : PCP CORPORATE & DEVELOPMENT TIMELINE 2010 2011 2012 2013 FEB Nov Mar Dec Dec Sept Dec 2010 2010 2011 2011 2012 2013 2013 Detailed 43-101 Engineering START Technical & Design PRODUCTION TSX.V Report LISTING O a e Offtake & Plains Financing Start Creek RTO Feasibility CONSTRUCTION Feasibility Study Study Complete Q4 2011EARN-IN PURCHASE PURCHASE PURCHASE ADDITIONAL ADDITIONAL 50.1 50 1 % 24.9% 24 9% 25% GB MINERALS AG GB MINERALS AG GB MINERALS AG (50.1%) (75%) (100%) 21 www.plainscreek.com
  22. 22. TSX-V : PCP DIRECTORS &MANAGEMENT Glenn Laing B.Sc Eng (Mining Geology) and M.Sc (Mining Engineering) – CEO &President & Director John Reynolds – Chairman & Director Paul C. Jones B.Sc Mining Engineering. P. Eng – Independent Director Guocai Liu – Independent Director James Xiang – Independent Director Carson  Phillips ‐ Corporate Development & Director. 22
  23. 23. TSX-V : PCP CAPITAL STRUCTURE Common Warrants SharesFounders & Management 38,100,000 280,000WAD Consult – Owners of 49.9% GB Minerals 101,000,000Common Shares 205,533,053Options Outstanding 2,000,000Warrants Outstanding 1,590,000Brokers Warrants ( M Partners – RTO Financing 14,786,209Capital Structure upon TSX Listing 344,634,053 18,656,209 www.plainscreek.com 23
  24. 24. TSX-V : PCP OVERALL SUMMARY• Farim Phosphate P j t – a d F i Ph h t Project development project th t h l t j t that has many positive attributes – W ld Cl iti tt ib t World Class potential, high quality mining reserves / resources 128 million tonnes @29.8% P2O5), close to existing infrastructure, strong economics (US$80 million per annum EBITDA @ US$100 per Tonne phosphate rock prices) with production license and incentive agreements in place.• Attractive Long Term Phosphate Industry Fundamentals (prices have doubled in the last few years to sustainable levels) + current stock markets are upbeat on fertilizers, potash and phosphate companies. Current prices US$150 -170 per per tonne for 32.5% P2O5 phosphate rock))• Company strategy to advance Farim Phosphate Project to production at 2 million tonnes phosphate rock concentrate per annum. Straight forward mining and simple beneficiation process.• Significant Exploration & Resource Expansion Potential – open in 3 directions and large lower grade phosphate zone underlying main deposit. Additional 1741.61 sq km exploration license.• To date two positive feasibility studies completed. A 43-101 Technical Report – Preliminary Economic Assessment completed A Bankable Feasibility Study underway – complete by Q4 2011 completed. 2011.• TSX Venture Listed – TSXV – PCP .• Plains Creek is one of few opportunities on world stock markets to participate directly in a pure phosphate development stage play - and has most favorable fundamentals in peer group of pure phosphate production companies. www.plainscreek.com 24
  25. 25. TSX-V : PCP A DEVELOPMENT & PRODUCTION PROJECTPHOSPHATE IN GUINEA BISSAU WEST AFRICA BISSAU,

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