20130422 gwmg tms2013 presentation final1 1035


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20130422 gwmg tms2013 presentation final1 1035

  1. 1. GWMG © 2013info@gwmg.cawww.gwmg.caTechnology MetalsSummitApril 22, 2013TSX.V: GWGOTCQX: GWMGFMarc LeVierPresident and CEO
  2. 2. GWMG © 2013Certain information set out in this presentation constitutes forward-looking information. Forward-looking statements (often, but not always, identified by the use of wordssuch as “expect”, “may”, “could”, “anticipate” or “will” and similar expressions) may describe expectations, opinions or guidance that are not statements of fact and whichmay be based upon information provided by third parties. Forward-looking statements are based upon the opinions, expectations and estimates of management ofGWMG as at the date the statements are made and are subject to a variety of known and unknown risks and uncertainties and other factors that could cause actualevents or outcomes to differ materially from those anticipated or implied by such forward-looking statements. Those factors include, but are not limited to, the assumptionsand estimates in the preliminary economic assessment of the Steenkampskraal project proving to be accurate over time; the construction, commissioning and operation ofthe proposed monazite processing facility and separation facility within estimated parameters; mine refurbishment activities; reliance on third parties to meet projectedtimelines and commencement of production at Steenkampskraal; risks related to the receipt of all required approvals including those relating to the commencement ofproduction at the Steenkampskraal mine, delays in obtaining permits, licenses and operating authorities in South Africa and China, environmental matters, water and landuse risks; risks associated with the industry in general, commodity prices and exchange rate changes, operational risks associated with exploration, development andproduction operations, delays or changes in plans, including those estimated in the preliminary economic assessment of the Steenkampskraal project; risks associatedwith the uncertainty of resource estimates; health and safety risks; uncertainty of estimates and projections of production, costs and expenses; risks that futureSteenkampskraal and region exploration results may not meet exploration or corporate objectives; the adequacy of the Company’s financial resources and the availabilityof additional cash from operations or from financing on reasonable terms or at all; political risks inherent in South Africa and China; risks associated with the relationshipbetween GWMG and/or its subsidiaries and communities and governments in South Africa, radioactivity and related issues, dependence on one mineral project; loss of,and the inability to attract, key personnel; the factors discussed in the Company’s public disclosure record; and other factors that could cause actions, events or results notto be as anticipated. In light of the risks and uncertainties associated with forward-looking statements, readers are cautioned not to place undue reliance upon forward-looking information. Although GWMG believes that the expectations reflected in the forward-looking statements set out in this presentation or incorporated herein byreference are reasonable, it can give no assurance that such expectations will prove to have been correct. Except as required by law, GWMG does not assume anyobligation to update forward looking statements as set out in this presentation. The forward-looking statements of GWMG contained in this Presentation, or incorporatedherein by reference, are expressly qualified, in their entirety, by this cautionary statement and the risk factors contained in GWMG’s Annual Information Form available atwww.sedar.com.Cautionary Note For US Investors Concerning Estimates of Indicated and Inferred ResourcesThis presentation uses the terms “Indicated” and “Inferred” resources. United States investors are advised that while such terms are recognized and required by Canadianregulations, the United States Securities and Exchange Commission does not recognize them. “Inferred” mineral resources have a great amount of uncertainty as to theirexistence, and as to their economic and legal feasibility. It cannot be assumed that all or any part of an Inferred mineral resource will ever be upgraded to a higher category.Under Canadian rules, estimates of Inferred mineral resources may not form the basis of feasibility or other economic studies except in limited circumstances and with specificnotification to the reader. United States investors are cautioned not to assume that all or any part of any mineral resources will ever be converted into mineral Reserves (asdefined under NI 43-101). United States investors are also cautioned not to assume that all or any part of an Inferred mineral resource exists, or is economically or legallymineable.Cautionary Statement on Forward Looking Statements(3)2COVER PHOTO: Rare earth alloy manufacturing at Less Common Metals in U.K.See Supplemental Section for footnotes and references
  3. 3. GWMG © 2013Great Western Minerals GroupGWMG’s mission is to become abest-in-class developer and sustainableproducer of critical rare earths through itsfully-integrated business model Fully-integrated From planned rare earth production to alloy manufacturing Ownership of the value chain Steenkampskraal (“SKK”) Project Positive Preliminary Economic Assessment (“PEA”) released in March 20133
  4. 4. GWMG © 20134Fully Integrated ModelExplorationSKK MiningSKK Mixed Chloride ProductionLCM Alloy ProductionSolvent Extraction SeparationIndustry Product ManufacturingLCM Metal Making• Run of mine• Monazite concentrate and mixed rare earth chloride• Individual rare earth oxides• Industrial, Consumer & Military End Products• High purity rare earth metals• Magnet alloys, super-alloys &other end-user metal alloys• Drilling resultsCreates a sustainable competitive advantage
  5. 5. GWMG © 20135 Former operating thorium mine Excellent infrastructure Access to rail, road and seaport 474 hectare property permitted to currentoperational requirements Average grade of 18.2% TREO based on indicatedresource estimate Substantially extended zone of mineralization through severalsuccessive exploration programs Regional exploration approved, prospecting and samplinginitiated Drill program at SKK site intended to increase resourceand confidence levels Nuclear License provides GWMG ability to apply for specificapprovals for processing and storage of materialsSteenkampskraal Project
  6. 6. GWMG © 2013PEA Highlights (2)(5)(6)6All amounts are in $Cdn (16)See Supplemental Section for footnotes and references $555 Million after-tax net present value applying a 10% discount rate and a28% tax rate (1) 66% after-tax internal rate of return (“IRR”) (1) 2.5 year estimated project payback period, on an after-tax basis, from start ofunderground mining production (1) 11 year potential life of mine (1)RESOURCE CALCULATION (4)ResourceEstimate(4) TonnesAverageGradeTREO%ContainedTREO tonnesLREO(7)tonnesHREO(7)tonnesIndicated 176,000 18.2 32,100 29,600 2,500Inferred 278,000 15.2 42,100 38,700 3,400
  7. 7. GWMG © 20137See Supplemental Section for footnotes and references PEA Timeline (2) Additional resource estimate and block model planned for late Q3 or early Q4 2013 Production of mixed RECl (concentration and hydrometallurgical stages) is projectedto commence within 24 months of the completion of required Project financing, at adesign capacity of 5,000 tonnes per year of contained REOs Production of separated REOs is projected to begin within 12 months after thecommencement of RECl productionSKK Milestones and Timeline (2) Near Term Milestones Updates on engineering of SKK project and REE separation plant SKK mine and process plant project Potential off-take arrangements and tolling agreements
  8. 8. GWMG © 201366%43%54%20%18.20%0.65%2.28%7.98%1.57%8Strong ComparativesAverage Grade(%TREO)GWMG (1,11)(Indicated)Ucore (8)(Inferred)Frontier (9)(Indicated)Avalon (10)(Measured+Indicated)GWMG (1) Ucore (8) Frontier (9) Avalon (14)Internal Rate of Return$171 $221$1,079$1,420$1,530Capital Expenditure (16)($ in US millions)GWMG (1) Ucore (8)Pre-Tax (12)Frontier (9) Avalon(14)See Supplemental Section for footnotes and referencesMolycorp(15)Molycorp(13)(Proven+Probable)
  9. 9. GWMG © 2013Less Common Metals Limited Provides unique access to global permanent magnet industry Has provided 21 years of high quality rare earth alloy production Operates co-reduction and specialized casting techniques European and Japanese customers strongly in support ofLCM expansion Now in commercial production with strip casting furnace servingexisting customers; second strip casting furnace delivered in Q1 2013,as scheduled, and will be on line in late Q2 to early Q3 2013 Metal-making will take place at LCM9Great Western Technologies Inc. Versatile production capacity including:• Permanent magnet alloys• NiMH alloy for rechargeable batteries• “Super Alloy” production for aerospace materials• Hydriding capability for solid-state hydrogen-storage alloys, bothrare earth and transition metal typesAlloy Production
  10. 10. GWMG © 201310 Becoming a fully-integrated rare earth company SKK resource has more than doubled in past year;Company advancing mine to production LCM is a leader in manufacture and supply of rareearth-based alloys and high purity metals; recentlymoved to new facility with state-of-the-art equipment Management team with strong industry knowledge inmine development, metal processing andproduction, and extensive technical and metallurgicalexpertise;realigned to focus on SKK projectHighlights
  11. 11. GWMG © 2013info@gwmg.cawww.gwmg.caTechnology MetalsSummitApril 22, 2013TSX.V: GWGOTCQX: GWMGF
  13. 13. GWMG © 2013GWMG OverviewShares Outstanding / Fully Diluted 418.7 mm / 467.2 mmShare Price $0.1552 week High / Low $0.48 / $0.14Market Cap $62.8 millionCash on hand $51.2 millionInsider Holdings / Fully Diluted (est.) 8.4% / 12.0%Institutional Holdings (est.) 40%13Market Data as of April 18, 2013; Shares Outstanding as of January 26, 2013Cash as of December 31, 2012, net of $7.2 Million held in escrow for bond interest payments
  14. 14. GWMG © 2013GWMG Board of DirectorsDavid Kennedy P.Eng., MIMMM• Founded Less Common Metals in 1992• 33 years experience in rare earth materialssector• Previously Technical Manager at JohnsonMatthey Rare Earth Products14Marc LeVierB.Sc., M.Sc., Metallurgical Engineering• Former CEO of Texas Rare EarthResources Corp.• 20 years with Newmont MiningCorporation in senior metallurgical andmanagement positionsIan McNaughton FICBIndependent Director• 35 years experience with TD Bank,Vice President and ManagerCommercial Banking until 2004• Board level advisor to private companiesGeorge IrelandB.Sc., Resource Economics and GeologyIndependent Director• C.I.O. and Managing Member of GeologicResource Partners LLC• 30 years in the resource sector in fieldgeology, banking and corporate financeLenard BoggioB.A., B.Comm., FCA, CPA (Illinois), ICD.DIndependent Director• Partner at PricewaterhouseCoopers for 24 years• Advisor to publicly listed Canadian, U.S. and U.K.mineral resource and energy clients in theAmericas, Africa, Europe and AsiaRobert Quinn BSBA, JDNon-Executive Board Chair• 25 years of legal and management experiencein the mining sector• Extensive experience in M&A, corporategovernance, public disclosure, governmentaffairs, environmental and land managementRupert Allan P. Geol.Independent Director• 43 years of global technical andmanagement experience with mining andexploration companies• President and CEO of Skeena ResourcesLimitedRon HochsteinM.B.A, B.Sc., Mineral Process EngineeringLead Director, Independent Director• President, CEO and Director ofDenison Mines Corp.• President of UraniumParticipation Corporation
  15. 15. GWMG © 2013GWMG Management TeamGWMG Head OfficeDr. IanHigginsPh. D., MIMMMMANAGING DIRECTOR,METALS & ALLOYSMarc LeVierB.Sc., M.Sc., Metallurgical EngineeringPRESIDENT & CEOVic FitzmauriceP. Eng.B.Sc., Engineering, Graduate Diploma EngineeringSTEENKAMPSKRAALPROJECT DIRECTORRareco15Michael DerB.Comm., LL.B.GENERAL COUNSEL,V.P. CORPORATE &LEGAL AFFAIRSVernon J. KissB.A., LL.B.SENIOR V.P. BUSINESS& CORPORATEDEVELOPMENTBrent JellicoeB.Sc., P. Geo.DIRECTOR,INTERNATIONALEXPLORATIONLCMDave MurphyB.Sc., Chemistry, Dipl.,Management StudiesV.P. INTERNATIONALMARKETING & SALESJim DavidsonB. Comm., C.A.V.P. FINANCE,CHIEF FINANCIALOFFICERChris NeserB.Sc. Eng., MBLSENIOR PROJECTMANAGERPieter de JagerMBA, C.T.A., AccountingFINANCE MANAGER
  16. 16. GWMG © 2013Footnotes and References16(1) See GWMG Media Release March 18, 2013(2) All references to PEA Highlights: See GWMG news release March 18, 2013(3) Brent C. Jellicoe, B.Sc. (Hon.), P.Geo., Director of International Exploration for GWMG, is the Qualified Person(as defined in NI 43-101) responsible for supervising the preparation of the technical content of thispresentation.(4) For a complete description of the mineral resource estimate and technical report (the “ResourceEstimate”), please refer to the Resource Estimate, as filed on SEDAR on March 7, 2013, at www.sedar.com(5) The PEA is preliminary in nature and includes Inferred mineral resources (as defined in NI 43-101) that areconsidered too speculative geologically to have the economic considerations applied to them that would enable themto be categorized as mineral reserves (as defined in NI 43-101), and there is no certainty that the preliminaryeconomic assessment will be realized.(6) For the Resource Estimate, “tonnes” and “grades” were rounded to 3 significant figures. Apparent errors in the totalsmay occur due to rounding.(7) “LREO” means lanthanum (La2O3), cerium (CeO2), praseodymium (Pr6O11), neodymium (Nd2O3) and samarium(Sm2O3). “HREO” means europium (Eu2O3), gadolinium (Gd2O3), terbium (Tb4O7), dysprosium (Dy2O3), holmium(Ho2O3), thulium (Tm2O3), ytterbium (Yb2O3) lutetium (Lu2O3) and yttrium (Y2O3). “TREO” includes yttrium.(8) Preliminary Economic Assessment on the Bokan Mountain Rare Earth Element Project, Near Ketchikan, Alaska. 10Jan 2013 (Tetra Tech).
  17. 17. GWMG © 2013Footnotes and References17(9) Amended Independent Technical Report on the Results of a Preliminary Economic Assessment of Frontier RareEarths Limiteds Zandkopsdrift Rare Earths Project, Located in the Northern Cape Province of South Africa. 30 Mar2012 (Venmyn).(10) See Avalon Rare Metals Inc. News Release Nov 26 2012: Avalon Reports Increased Measured Resources forthe Nechalacho Rare Earth Elements Deposit, Thor Lake, NWT, Canada.(11) GWMG: Average indicated TREO% weighted by tonnage.(12) Pre-tax IRR reported in Ucores PEA. All other company IRRs are reported Post-tax.(13) NI 43-101 Technical Report, Mountain Pass Rare Earth Project, San Bernardino County, California. 07 May 2012(SRK Consulting (U.S.), Inc.).(14) See Avalon Rare Metals, Inc. News Release 17 April 2013: Avalon Announces Results of Positive FeasibilityStudy for the Nechalacho Rare Earth Elements Project.(15) See Molycorp Form 8-K 23 January 2013 (US Securities and Exchange Commission).(16) 1.00 $CAN = 0.9712 $US