ROMARCO Corporate Presentation - March 2013


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ROMARCO Corporate Presentation - March 2013

  2. 2. Cautionary Statement  The  informa-on  in  this  document  has  been  prepared  as  of  March  13,  2012.  Certain  statements  contained  in  this  document  cons-tute  “forward-­‐looking  statements”  within  the  meaning  of  the  United  States  Private  Securi-es  Li-ga-on  Reform  Act  of  1995  and  forward  looking  informa-on  under  the  provisions  of  Canadian  provincial  securi-es  laws.  When  used  in  this  document,  the  words  “an-cipate”,  “expect”,  “es-mate”,  “forecast”,  “will”,  “planned”,  and  similar  expressions  are  intended  to  iden-fy  forward-­‐looking  statements  or  informa-on.    Specifically,  this  presenta-on  contains  forward  looking  statements  regarding  the  results  and  projec-ons  contained  in  the  March  13,  2012  technical  report  of  the     TSX : RHaile  Gold  project,  including  the  expected  mine  life,  recovery,  capital  costs,  cash  opera-ng  costs  and  other  costs  and  an-cipated  produc-on  of  the  described  open  pit  mine,  the  projected  internal  rate  of  return,  the  projected  payback  period,  the  availability  of  capital  for  development,  sensi-vity  to  metal  prices,  ore  grade,  the  reserve  and  resource  es-mates  on  the  project,  the  financial  analysis,  the  -ming  for  comple-on  of  the  revised  feasibility  study  on  the    Haile  Gold    project,    the  -ming  and  amount  of  future  produc-on,  the  -ming  of  construc-on  of  the  proposed  mine  and  process  facili-es,  capital  and  opera-ng  expenditures,  the  -ming  of  the  receipt    of  permits,  rights  and  authoriza-ons,  communica-ons  with  local  stakeholders  and  community  rela-ons,  availability  of  financing  and  any  and  all  other  -ming,  development,  opera-onal,  financial,  economic,  legal,  regulatory  and  poli-cal  factors  that  may  influence  future  events  or  condi-ons  and  expected  drilling  ac-vi-es.     WWW .R O MA R C O .C O MIn  addi-on,  this  presenta-on  also  contains  updated  resource  es-mates  contained  in  the  March  13,  2012  technical  reports.    Scien-fic  and  technical  informa-on  referred  herein  has  been  extracted  from  and  are  hereby  qualified  in  their  en-rety  by  reference  to  the  aforemen-oned  technical  reports  (“Technical  Reports”).    Joshua  Snider,  P.E.,  Thomas  L.  Drielick,  P.E.,  Lee  “Pat”  Gochnour,  M.M.S.A.,  John  Marek,  P.E.  and  Derek  Wiwer,  P.E.  are  responsible  for  preparing  the  Technical  Reports.    Each  of  the  above  referenced  persons  is  a  “qualified  person”  as  defined  in  Na-onal  Instrument  43-­‐101  —  Standards  of  Disclosure  for  Mineral  Projects.    Such  forward-­‐looking  statements  are  based  on  a  number  of  material  factors  and  assump-ons,  including,  but  not  limited  in  any  manner,  those  disclosed  in  any  another  of  Romarco’s  public  filings,  and  include  the  ul-mate  determina-on  of  mineral  reserves  and  resources,  availability  and  final  receipt  of  required  approvals,  licenses  and  permits,  sufficient  working  capital  to  develop  and  operate  the  proposed  mine,  access  to  adequate  services  and  supplies,  economic  condi-ons,  commodity  prices,  foreign  currency  exchange  rates,  interest  rates,  access  to  capital  and  debt  markets  and  associated  cost  of  funds,  availability  of  a  qualified  work  force,  lack  of  social  opposi-on  and  legal  challenges,  and  the  ul-mate  ability  to  mine,  process  and  sell  mineral  products  on  economically  favorable  terms.  While  Romarco  considers  these  assump-ons  to  be  reasonable  based  on  informa-on  currently  available  to  it,  they  may  prove  to  be  incorrect.  Actual  results  may  vary  from  such  forward-­‐looking  informa-on  for  a  variety  of  reasons,  including  but  not  limited  to  risks  and  uncertain-es  disclosed  in  other  Romarco  filings  at  Forward-­‐looking  statements  are  based  upon  management’s  beliefs,  es-mate  and  opinions  on  the  date  the  statements  are  made  and,  other  than  as  required  by  law,  Romarco  does  not  intend,  and  undertakes  no  obliga-on  to  update  any  forward-­‐looking  informa-on  to  reflect,  among  other  things,  new  informa-on  or  future  events      Cau-onary  Note  to  United  States  Investors  Concerning  Es-mates  of  Measured,  Indicated  and  Inferred  Resources:  Certain  tables  may  use  the  terms  “Measured”,  “Indicated”  and  “Inferred”  Resources.  United  States  investors  are  advised  that  while  such  terms  are  recognized  and  required  by  Canadian  regula-ons,  however,  the  United  States  Securi-es  and  Exchange  Commission  does  not  recognize  them.  “Inferred  Mineral  Resources”  have  a  great  amount  of  uncertainty  as  to  their  existence,  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,  es-mates  of  Inferred  Mineral  Resources  may  not  form  the  basis  of  feasibility  or  other  economic  studies.  United  States  investors  are  cau-oned  not  to  assume  that  all  or  any  part  of  Measured  or  Indicated  Mineral  Resources  will  ever  be  converted  into  Mineral  Reserves.  United  States  investors  are  also  cau-oned  not  to  assume  that  all  or  any  part  of  a  Mineral  Resource  is  economically  or  legally  mineable.    All  figures  are  US$  unless  otherwise  indicated    2   
  3. 3. Introduction Haile Gold Mineu  Currently in EIS Permitting processu  2012 detailed engineering goal met TSX : R •  Over 75% completeu  Continuous review of mine plan, alternatives, expansion studies, WWW .R O MA R C O .C O M underground reviewu  Exploration reduced in current economic environment •  3 rigs operating at Haile and regional targetsu  $53M in cash (at February 25, 2013)u  Strong institutional supportu  Permitted, built and accredited assay lab on schedule and under budget 3  
  4. 4. What makes Haile a unique asset?u  Location – Location – Locationu  Low capex ($320mm) CAROLINA SLATE BELT TSX : Ru  Low operating costs ($379 / oz LOM)(1) Kentucky West Virginiau  High grade (2.06 g/t)u  District potential WWW .R O MA R C O .C O M Tennesseeu  Experienced development team in Russell Mine place Hickory Reed Mine Ironwoodu  Key long-lead equipment ordered and Howie Mine Locust North Carolina secured Haile Mine Brewer Mine Bayberry Buzzard •  Mobile mine fleet Dorn Mine Ridgeway Mine Elm •  SAG / Ball mills Magruder Mine Bante Mine Tathom Mine Columbia Mine South Carolina •  Hitachi Shovelu  Rated #6 out of 76 new mines starting Georgia in 2012 to 2020 by BMO (May 7, 2012) 4  (1) As per February 2011 Feasibility Study results included in March 13, 2012Technical Report filed on March 19, 2012 on
  5. 5. Capital Costs to Market Capitalization (%)Source: 200% 400% 600% 800% 1000% 1200% 1400% 1600% 0% Pretium Torex Golden Queen Romarco ROMARCO SullidenNational Bank Financial, Feb. 10, 2013 Aureus Sabina Esperanza Lydian Dalradian Rainy River CAPITAL COSTS TO Goldgroup Cerro Oromin Midas Guyana MARKET CAPITALIZATION Orezone Victoria Astur Brazilian Gold Volta Seabridge Eco Oro Sandspring Moneta Spanish Mtn Aphrodite 5   WWW .R O MA R C O .C O M TSX : R
  6. 6. Reserve Grade (g/t Au) 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 Seabridge Golden QueenSource: National Bank Financial, Feb. 10, 2013 Cerro Lydian RESERVE GRADE Victoria Sulliden Volta Romarco ROMARCO Oromin Torex Guyana Aureus 6   WWW .R O MA R C O .C O M TSX : R
  7. 7. LOW CASH COST TSX : R $700! $617! LOWEST QUARTILE AVERAGE CASH $600! COST IN Q4 2011 (1) WWW .R O MA R C O .C O M $500! $379! $428! $400! $300! $200! $100! $0! Industry Average (1) ROMARCO Lowest Quartile (1) LOM Average (2) 7  (1)  Source: Brook Hunt estimates(2)  As per February 2011 Feasibility Study results included in March 13, 2012 Technical Report filed on March 19, 2012 on
  8. 8. NPV & IRR SENSITIVITYTO GOLD PRICE Pre-tax NPV and IRR Sensitivity to Gold Price (1) TSX : R ($ Millions, except gold price) Gold PAYBACK Price NPV @0% NPV @ 5% NPV @ 10% IRR % YEARS Per oz. WWW .R O MA R C O .C O M $1500 $1,426 $930 $621 47.0% 2.0 $1400 $1,259 $811 $534 42.3% 2.2 $1300 $1,092 $693 $447 37.6% 2.4 $1200 $925 $575 $359 32.7% 2.7 $1100 $758 $457 $272 27.6% 3.1 $1000 $591 $339 $185 22.3% 3.8 BASE CASE $950 $507 $279 $141 19.6% 4.2 $800 $257 $102 $10 10.7% 7.6 $700 $90 ($16) ($77) 4.0% 9.4 8  (1) As per February 2011 Feasibility Study included in March 13, 2012 Technical Report filed on March 19, 2012 on - based on capital costs of $275 million not updated capital cost of $320million from December 31, 2011 MD&A
  9. 9. HGM PERMITTING TSX : R Federal – USACE* State – DHEC** •  404 Wetlands Permit only •  401 Water Quality Certification USACE is sole deciding •  Mine Operating Permit WWW .R O MA R C O .C O M •  regulatory body •  Air Quality Permit •  All other agencies are •  NPDES Permit cooperating or commenting agencies only – EPA, US Fish •  Others and Wildlife, Catawba Nation, DHEC, SCDNR etc.* US Army Corps of Engineers** South Carolina Department of Health and Environmental Control 9  
  10. 10. ENVIRONMENTAL IMPACTSTATEMENT PROCESS þ Contractor  (3rd  Party)  SelecCon  –  Sept.  2,  2011  (announced  Sept.  26,  2011) þ NoCce  of  Intent  Federal  Register  –  Sept.  23,  2011   TSX : R þ 30  day  noCce  period   þ Public  Scoping  MeeCng  –  Oct.  27,  2011   WWW .R O MA R C O .C O M þ Scoping  Comment  Period  Closed  –  Nov.  28,  2011  CURRENT STAGE PreparaCon  of  Dra=  EIS   Dra=  EIS  filed  and  comment  period  opens   45 DAY NOTICE PERIOD Dra=  EIS  Public  Hearing   30 DAY COMMENT PERIOD Dra=  EIS  comment  period  closes   Final  EIS  filed   Record  of  Decision  (ROD)  on  404  Wetlands  permit   10  *Note: On May 23, 2012, the Company announced a schedule pertaining to the EIS for its Haile Gold Mine project as provided by the US Army Corps of Engineers (Corps). Adjustments to this schedule, as appropriate, will be posted on the Corps EIS website:
  11. 11. AERIAL OF HAILE 11   WWW .R O MA R C O .C O M TSX : R
  12. 12. HAILE GOLD MINEFEASIBILITY STUDY HIGHLIGHTSu  Feasibility Study does not include deep mineralization: Ø  Horseshoe, Mustang, Palomino and Snake Deep deposits TSX : R 3.5 km WWW .R O MA R C O .C O M CHAMPION SMALL SOUTH PIT LEDBETTER SNAKE 274 m DEPTH (m) HORSESHOE MUSTANG PALOMINO 610 m 12  
  13. 13. RESOURCES RESERVES OPEN PIT UNDERGROUND 2011 MEASURED + INDICATED RESOURCES AT US$1,200 GOLD (1) METRIC TONNES g/t CONTAINED oz TSX : R (000s) Au (000s) MEASURED 36,894 1.79 2,125 INDICATED 34,277 1.74 1,914 WWW .R O MA R C O .C O M MEASURED + INDICATED 71,171 1.77 4,039 INFERRED 20,125 1.24 801 2010 RESERVES AT US$950 GOLD (1) METRIC TONNES g/t CONTAINED oz (000s) Au (000s) PROVEN RESERVE 19,592 2.19 1,382 PROBABLE RESERVE 10,917 1.82 636 PROVEN PROBABLE 30,509 2.06 2,018 RESERVE (1)  From March 13, 2012 Technical Report filed on on March 19, 2012 13  
  15. 15. CAPITAL COSTS BREAKDOWN TSX : R Component of CAPEX $320 million Capital Costs EQUIPMENT ~ 1/3 •  +75% of equipment is locked in •  Mills, haul trucks, shovels, loaders WWW .R O MA R C O .C O M CONSTRUCTION ~ 1/3 delivered in SC OTHER ~ 1/3 •  Updated commodity pricing TOTAL PROJECT $320M •  $30 million in contingency •  $17 million for inflation 15  
  16. 16. EQUIPMENT 16   WWW .R O MA R C O .C O M TSX : R
  17. 17. LOW CAPITAL COSTSu  Excellent existing infrastructure at Haile u  Not building local/regional TSX : R Ø  Power plant Ø  Dams for water supplies WWW .R O MA R C O .C O M Ø  Many kilometers of roads Ø  Employee campu  Constructing plant, buildings, tailings dam onlyu  Engaged Barclays Bank as advisor – in advanced discussions with several banks on project financing 17  
  18. 18. FINANCING ALTERNATIVESu  Funding sources u  Engagement with Barclays u  Debt – targeting ~40-60% Bank PLC TSX : R Ø  Project Financing u  Barclays engaged as Ø  Leasing financial advisor for Ø  Convertible potential debt financing WWW .R O MA R C O .C O M Ø  High yield u  Independent review u  Equipment lease complete (Pincock, Allen u  Other : Holt) Ø  Equity Ø  Royalty stream Ø  Forward sale Ø  Strategic Investor 18  
  19. 19. 70% Institutional Ownership BlackRock Sun Valley Gold TSX : R Van Eck TOP 15 SHAREHOLDERS Franklin Templeton Investments Oppenheimer Funds WWW .R O MA R C O .C O M Norges Bank Tocqueville Colonial First State Fidelity Investments J.P. Morgan OF OUR SHARES ARE TD INSTITUTIONALLY Baker Steel Capital Managers / Ruffer OWNED URAM Quantex CPP Investment Board 19  
  20. 20. NBF Preferred Development Names TSX : R Filter #1 Filter #2 Filter #3 Filter #4 Filter #5 Filter #6 Summary Low Capex Low All-In Cash Short Timeline to Favourable P/NAV Scale In Order Intensity Costs Prod’n Jurisdiction DGC-T R-T DGC-T DGC-T VTR-T NG-T DGC-T R-T EPZ-V SUE-T R-T VIT-V DGC-T R-T WWW .R O MA R C O .C O M SUE-T LYD-T LYD-T NG-T ORE-T VGZ-T LYD-T ORE-T BSX-T VIT-V SBB-T LYD-T BSX-T SUE-T EPZ-V SUE-T VGZ-T VIT-V MNM-V ORE-T BSX-T MNM-V SBB-T EPZ-V SUE-T R-T VTR-T EPZ-V LYD-T NG-T ORE-T BSX-T NG-T R-T VIT-V BSX-T MNM-V VTR-T EPZ-V VGZ-T SBB-T ORE-T VTR-T DGC-T BSX-T MNM-V SUE-T LYD-T VTR-T VIT-V VIT-V R-T VGZ-T BSX-T VIT-V VGZ-T VGZ-T ORE-T MNM-V ORE-T DGC-T SUE-T NG-T SBB-T VGZ-T SBB-T VTR-T EPZ-V EPZ-V SBB-T NG-T VTR-T NG-T LYD-T SBB-T MNM-V MNM-VSource: NBF Estimates, Feb. 10, 2013 20  
  21. 21. P/NAVPS 1.6 1.4 1.36x TSX : R 1.2 1.0 WWW .R O MA R C O .C O M 0.8 0.74x 0.59x 0.6 0.57x 0.58x 0.52x 0.52x 0.49x 0.50x 0.45x 0.48x 0.44x 0.45x 0.4 0.30x 0.23x 0.19x 0.2 0.0 VIT-V ORE-T R-T LYD-T DGC-T SUE-T EPZ-V NG-T VTR-T AVERAGE PLG-T MNM-V IAU-T SBB-T BSX-T VGZ-TSource: NBF Estimates,Thomson, Feb. 10, 2013 21  
  22. 22. ANALYST COVERAGE TSX : R TARGET PRICE NBF $2.50 WWW .R O MA R C O .C O M Paradigm $2.00 Cormark $1.60 RBC $1.50 Euro Pacific $1.50 BMO $1.10 22  
  23. 23. CAPITAL STRUCTURE Capitalization Summary TSX : R Exchange/ Symbol TSX:R Share Price(1) C$0.86 WWW .R O MA R C O .C O M Shares Outstanding (Basic) 585.0M FD Shares Outstanding (TSM)(2) 596.1M Market Capitalization(1) C$503M 52 Week High / Low(1) C$1.40 / C$0.49 Cash Balance (Feb. 25, 2013) US$53M(1) As at close on March 8, 2013 23  (2) Includes 11.1M “in-the-money” options at an average strike price of C$0.70 as of March 8, 2013
  24. 24. STRONG BOARD, MANAGEMENT TECHNICAL TEAM Proven gold mine development, finance, permitting and operations experience Romarco has the team in place to bring Haile into production TSX : R Experienced Board of Directors Strong Management Technical TeamLeendert Krol, Chairman Diane R. Garrett, Ph.D., President CEO§  Former Newmont §  Former Dayton Mining, US Global Investors James R. Arnold, Sr. VP, COODiane R. Garrett §  Former Freeport, Gold Fields – Richards Award Winner WWW .R O MA R C O .C O M§  Former Dayton Mining, US Global Investors Stan Rideout, Sr. VP, CFOJames R. Arnold §  Former Phelps Dodge§  Former Freeport, Gold Fields – Richards Award Winner David Thomas, VP, General ManagerDon MacDonald James Berry, Chief Geologist Regional Exploration Manager§  CFO KGHM International (formerly QuadraFNX), former §  Former Barrick NovaGold, DeBeers, Dayton Mining Brent Anderson, Mine ManagerJohn Marsden §  Former Quadra, Freeport§  Consultant, former Freeport – Richards Award Winner Mike Gleason, Construction ManagerPatrick Michaels §  Former Freeport§  Portfolio Manager – Zuri-invest, Switzerland Jim Wickens, Process Manager §  Former BarrickGary A. Sugar§  Former RBC Capital Markets Johnny Pappas, Director of Environmental Affairs §  Former FreeportRobert van Doorn§  Former Mundoro, Rio Narcea, Morgan Stanley Ramona Schneider, Environmental Manager §  Former Kinross Dan Symons, Vice President, Investor Relations §  Former Renmark Financial 24  
  25. 25. FUTURE CATALYSTS / EVENTSu  Revised permit schedule posted by Army Corpsu  Draft EIS document filed TSX : R u  State then proceeds to issue all permits relating to mining operations – air, construction, mining, water, etc. WWW .R O MA R C O .C O Mu  Final EIS document filedu  Drill resultsu  Resource updateu  Reserve updateu  Expansion studies, underground studies 25  
  26. 26. CONTACT INFORMATIONDan SymonsVice President, Investor Relationsdsymons@romarco.com70 University AvenueSuite 1410Toronto, Ontario M5J 2M4Tel: 416.367.5500Fax: 416.367.5505Email: WWW .R O MA R C O .C O M