May 2010 Investor Presentation


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May 2010 Investor Presentation

  1. 1. New Intermediate Gold Producer Investor Presentation, May 2010
  2. 2. Forward-Looking Statements and Cautionary Notes Forward-Looking Statements All statements made in this presentation, other than statements of historical fact, constitute forward-looking statements. The actual results of Aura Minerals may differ significantly from those anticipated in the forward-looking statements and readers are cautioned not to place undue reliance on these forward-looking statements. Except as required by securities regulations, the Company undertakes no obligation to publicly release the results of any revisions to forward-looking statements that may be made to reflect events or circumstances after the above-stated date or to reflect the occurrence of unanticipated events. Forward-looking statements include, but are not limited to, statements with respect to the future price of copper, gold, nickel and iron ore, the estimation of mineral reserves and resources, the realization of mineral reserve estimates, the timing and amount of estimated future production, costs of production, capital expenditures, costs and timing of the development of new deposits, success of exploration activities, permitting time lines, currency fluctuations, requirements for additional capital, government regulation of mining operations, environmental risks, unanticipated reclamation expenses, title disputes or claims, limitations on insurance coverage and the timing and possible outcome of litigation. In certain cases, forward-looking statements can be identified by the use of words such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases, or state that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved”. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such factors include, among others, risks related to the integration of acquisitions; risks related to international operations; risks related to joint venture operations; actual results of current exploration activities; conclusions of economic evaluations; changes in project parameters as plans continue to be refined; future prices of copper, gold, nickel and iron ore; possible variations in ore reserves, grade or recovery rates; failure of plant, equipment or processes to operate as anticipated; accidents, labour disputes and other risks of the mining industry; delays in obtaining governmental approvals or financing or in the completion of development or construction activities. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. Disclaimer Aura Minerals Inc. ("Aura Minerals") ("Aura Minerals" or the "Company") is a Canadian company and a reporting issuer in the Province of British Columbia and the Province of Ontario, Canada. The Company has taken all reasonable care in producing and publishing information contained in this presentation, and will endeavor to do so regularly. Material in this report may still contain technical or other inaccuracies, omissions, or typographical errors, for which Aura Minerals assumes no responsibility. Aura Minerals does not warrant or make any representations regarding the use, validity, accuracy, timeliness, completeness or reliability of any claims, statements or information in this presentation. Under no circumstances, including, but not limited to, negligence, shall Aura Minerals be liable for any direct, indirect, special, incidental, consequential, or other damages, including but not limited to loss of profits, whether or not advised of the possibility of damage, arising from use, or inability to use, the material in this presentation. The information herein is not a substitute for independent professional advice before making any investment decisions. The information in this presentation may be superseded by subsequent disclosures. This presentation presents a review of Aura Minerals' proposed acquisition of projects in Brazil and Honduras, and of its existing projects in Brazil and Mexico. Readers are cautioned that Aura Minerals’ existing projects in Brazil and Mexico are at an early stage of exploration and production, respectively, and that estimates and projections contained herein are based on limited or incomplete data. More work is required before the mineralization on the projects and their economic aspects can be confidentially modeled. Therefore, the work results and estimates herein may be considered to be generally indicative only of the nature and quality of the projects. Estimates and projections relating to the projects Aura Minerals proposes to acquire are based on data published by Yamana Gold Inc. No representation or prediction is intended as to the results of future work, nor can there be any promises that the estimates herein will be confirmed by future exploration or analysis, or that the projects will otherwise prove to be economic. The Toronto Stock Exchange has not reviewed the information in this presentation and does not accept responsibility for the adequacy or accuracy of it. TSX : ORA 2
  3. 3. Corporate Update Acquired the San Andres Gold Mine (Honduras) and the Sao Francisco and Sao Vicente gold mines (Brazil) • Average annual production of 220,000 oz. gold (Au) anticipated for the next five years from these three mines • Ongoing work at all three operations to increase production and reduce cash costs • Large resource base with excellent potential to add to current reserves Updated resource estimate for Aranzazu Project (Mexico); planned restart of mine in 2010, which will add to production base • Excellent expansion upside over longer term at the Aranzazu Project – drilling underway to test depth potential Work to date at the Inaja Project by joint venture partner, Vale, indicates potential for a significant iron ore resource Advancing development of Serrote Deposit (Arapiraca Project) to feasibility study level TSX : ORA 3
  4. 4. Capital Structure* Exchange/Symbol TSX/ORA Share Structure Issued and outstanding shares 206 mm Fully diluted 222 mm Ownership Management and insiders 28% Institutional 45% Yamana Gold 10% Financial Cash (approximately) US$110 mm Long-term debt US$65 mm *Share data information as at April 30, 2010 TSX : ORA 4
  5. 5. Gold Production Growth in 2010 Aranzazu Copper-Gold-Silver San Andres Gold Mine Project, Mexico Targeting greater than 90,000 oz of Au in 2010 Sao Francisco Gold Mine San Andres Gold Mine, Honduras Targeting 60,000 to 65,000 oz of Au in 2010* Inaja Project, Brazil (Under option Sao Vicente Gold Mine agreement to Vale) Targeting 35,000 to 40,000 oz of Au in 2010* Aranzazu Copper-Gold-Silver Project Targeting restart in 2010 with annualized Sao Vicente production of 20 mm lbs Cu and 15,000 gold Gold Mine, Brazil equivalent ounces Sao Francisco Gold Mine, Arapiraca Copper-Gold- Iron Ore Project Brazil Advancing to feasibility and reviewing strategic Arapiraca Copper- alternatives Gold-Iron Ore Project, Brazil Inaja Iron Ore Project Ongoing JV with Vale on large iron ore target *Gold production attributable to Aura Minerals for the eight-month period following the close of the acquisition on April 30, 2010. Operations Advanced development Exploration TSX : ORA 5
  6. 6. 2010 Strategic Focus Timeline 2010 Objectives Increase production at San Andres Gold Mine through commissioning of new Q1/2010, crusher/conveyor system and operational improvements, with corresponding ongoing 1 reduction of cash costs Integrate Sao Francisco and Sao Vicente gold mines and implement key cost 2010 2 reduction and gold recovery improvement opportunities 3 2010 Re-start the Aranzazu Project and implement staged production increases Q1/2010, 4 Test depth potential at the Aranzazu Project as part of a major expansion program ongoing Advance development of Serrote Deposit (Arapiraca Project) to feasibility Q4/2010 5 study level Continue to evaluate strategic opportunities focused on private or undervalued Ongoing 6 production or advance stage development gold projects TSX : ORA 6
  7. 7. Operations
  8. 8. San Andres Gold Mine Forecast • 2009 gold production of 68,371 ounces Production • 2010 estimated production of 90,000 ounces at an average cash cost between $480 and $520 per ounce • Expected run rate of 100,000 ounces per annum by Q4/2010 Capital • New crusher/conveyor line to increase throughput and to reduce haulage and Projects operating costs • Continuous gold mineralization between current mining operations at East Ledge and the proposed mining operations at the Twin Hills zones are expected to increase gold production Category Tonnage (tonnes) Grade (g/t Au) Contained Metal (oz Au) Total P&P Reserve 32,508,000 0.61 640,000 Total M&I Resource* 116,675,000 0.59 2,229,000 Inferred Resource 4,703,000 0.79 120,000 * Mineral Resources are inclusive of Mineral Reserves TSX : ORA 8
  9. 9. San Andres - Operational Improvements Focus on solution management and heap operating practices Has led to record fourth quarter 2009 gold production of 18,357 ounces Commissioning underway of the new primary crusher/conveyor/stacking system Will significantly reduce haulage distances and increase throughput Metallurgical testwork on site ongoing Will optimize gold leach cycle and reagent dosage to increase recovery Implementation of a new stacking and leaching plan Will optimize gold recovery and reduce cash costs TSX : ORA 9
  10. 10. San Andres – Operational Improvements • New crusher-conveyor system completed, with new stacking system expected Q3/2010 • Leach pad Phase IV expansion and Retention Pond 6 projects approved for 2010 TSX : ORA 10
  11. 11. San Andres – New Crusher Location Increase Throughput and Reduce Cash Costs Current New TSX : ORA 11
  12. 12. Sao Francisco Gold Mine Status • Acquired April 30, 2010 Forecasted • 65,000 ounces of gold production in 2010 attributable to Aura Minerals Production • Planned production of 90,000 ounces of gold per annum Capital • Evaluating optimization potential Projects • Approximately $15 million budgeted in 2010 for upgrades to increase crusher throughput and gravity recovery Category Tonnage (tonnes) Grade (g/t Au) Contained Metal (oz Au) Total P&P Reserve 26,218,000 0.75 630,000 Total M&I Resource* 39,486,000 0.72 909,000 Inferred Resource 720,000 0.80 18,000 * Mineral Resources are inclusive of Mineral Reserves TSX : ORA 12
  13. 13. Sao Francisco – Key Focus in 2010 • Update mine plan to improve grade control and improve mine contractor productivity • Upgrade current crushing plant to increase feed to gravity circuit • Reconfigure and improve recovery of gravity circuit • Investigate potential to crush low grade dump leach ore to significantly improve recoveries • Operational changes to the heap leach to segregate ROM and crushed ore to improve heap recovery and reduce overall reagent consumption • Complete exploration program to increase reserve and resource base, and to test identified targets TSX : ORA 13
  14. 14. Sao Francisco – Typical Ore Section QUARTZ VEINS 1ST MINERALIZATION TSX : ORA 14
  15. 15. Sao Francisco – Gold Mineralization Above (left): Nuggets associated with quartz veins or microscopic crystals associated with sericitic bands Above (right): In quartz veins – massive and irregular and sulphides. grains, 1mm to 5mm in size. Occurs in lamelar grains. TSX : ORA 15
  16. 16. Sao Francisco – Current Circuit Crushing Plant Gravity Plant Crushing Plant, Secondary and Tertiary TSX : ORA 16
  17. 17. Tabling of Gravity Gold
  18. 18. Recovered Gold
  19. 19. Sao Vicente Gold Mine Status • Acquired April 30, 2010 Forecasted • 40,000 ounces of gold production in 2010 attributable to Aura Minerals Production • 50,000 to 55,000 oz. of gold production per annum over a five-year mine life • Potential for further upside through continued mine exploration Capital • 2010 focus – process plant, heap and metallurgy improvements, mine Projects exploration to convert additional resources to reserves, approximately $5 million budgeted Category Tonnage (tonnes) Grade (g/t Au) Contained Metal (oz Au) Total P&P Reserve 10,167,000 0.86 281,000 Total M&I Resource* 26,215,000 0.69 580,000 Inferred Resource 3,553,000 0.88 101,000 * Mineral Resources are inclusive of Mineral Reserves TSX : ORA 19
  20. 20. Sao Vicente – Key Focus in 2010 • Review current process plant to upgrade plant availability and increase recovery • Modify heap leach stacking system to improve recoveries • Conduct program of definition and expansion drilling to increase resource base • Evaluate potential for reprocessing of historic dredge tailings TSX : ORA 20
  21. 21. Development Projects
  22. 22. Aranzazu Copper-Gold-Silver Project History • Limited operating history under previous owner • Basically no exploration on property from early ‘80s to 2007 • Located in centre of a major copper-gold-silver district Forecast • Planned re-start in 2010 at 2,600 tpd Production • Planned run rate production of +20 mm lbs copper, +12,000 oz gold and +140,000 oz silver – excellent upside on gold and silver production • Stage 2 – next increase to 3,000 tpd • By-product gold and silver contributes to low projected cash costs below US$1.00 per lb copper Capital • Mine development and mill upgrades commenced October 2009 Projects • Estimated capex of approximately US$25 mm in 2010 Category Tonnage Grade Grade Grade Cu Au (tonnes) (Cu %) (g/t Au) (g/t Ag) (mm lbs) (000 oz.) Total M&I Resource 12,848,000 1.34 0.50 11.87 379 207 Inferred Resource 3,217,000 1.17 0.28 6.44 83 29 Note: Resources at a 0.08% Cu only cut-off. TSX : ORA 22
  23. 23. Aranzazu Project Significant Upside Potential to Increase Resources Near Term Open Pit TSX : ORA 23
  24. 24. Aranzazu Project – Overall Layout
  25. 25. Aranzazu Project – Mill Float Plant
  26. 26. Aranzazu Project – On-going Plant Modifications
  27. 27. Aranzazu Project – On-going Plant Modifications
  28. 28. Aranzazu Exploration Upside • Only 50% of drill holes in database were assayed for gold • Precious metals grades continue to improve with additional drilling • Large resource base, open at depth • 2010/11 drill program planned to target +70 million tonnes at lower Cu cut-off (0.5% Cu) – if successful, will be the basis of a feasibility study on a large low bulk mining underground operation Category Tonnage Grade Grade Grade Cu Au (tonnes) (Cu %) (g/t Au) (g/t Ag) (mm lbs) (000 oz.) Measured Resource 2,960,000 1.04 0.47 9.99 68 45 Indicated Resource 21,121,000 1.01 0.39 8.96 468 264 Total M&I Resource* 24,082,000 1.01 0.40 9.09 536 309 Inferred Resource 8,674,000 0.82 0.18 4.39 157 52 Note: Resources at a 0.5% Cu only cut-off. *Numbers may not add due to rounding. TSX : ORA 28
  29. 29. Aranzazu Project Continues to Demonstrate High-Grade Copper-Gold-Silver Potential Along Strike Hole # Dip From To Interval Cu1 Au Ag (o) (m) (m) (m) (%) (g/t) (g/t) AZC-079 -52 159.0 168.0 9.0 1.42 2.63 18.1 AZC-080 -46 13.5 27.0 13.5 1.03 1.59 12.4 AZC-081 -47 12.0 64.5 52.5 1.27 0.78 15.4 AZC-085 -48 169.5 210.0 40.5 1.38 1.69 13.8 AZC-085 -48 216.0 235.5 19.5 1.13 1.16 11.8 AZC-088 -51 339.0 355.5 16.5 2.16 1.96 26.1 AZR-052 -41 6.1 30.5 24.4 1.17 0.19 12.3 AZR-054 -47 288.0 315.5 27.4 1.64 1.37 22.2 AZR-055 -48 172.2 201.2 29.0 1.35 1.60 23.6 AZR-055 -48 320.0 356.6 36.6 2.81 3.66 26.1 AZR-058 -51 25.9 35.1 9.1 1.33 1.77 9.8 AZR-059 -54 193.6 204.2 10.7 1.37 1.28 15.1 AZR-062 -43 59.4 77.7 18.3 1.61 1.69 20.1 AZR-063 -71 36.6 54.9 18.3 1.80 2.54 26.5 AZR-066 -45 45.7 57.9 12.2 3.51 3.55 49.8 1. Using a copper cutoff grade of 0.5% TSX : ORA 29
  30. 30. Aranzazu Project Large Resource with Exploration Upside Deep High Grade Intercepts Red – 0.5% Cu grade shell Black – mined out stopes and underground workings Grey - untested TSX : ORA 30
  31. 31. Aranzazu Project – Limited Deep Drill Results Hole # Dip From To Interval Cu Au Ag (o) (m) (m) (m) (%) (g/t) (g/t) 54200-4 -90 330.00 368.00 38.00 1.21 0.71 13.27 54300-3 -90 338.00 379.48 41.48 2.48 1.15 25.09 54350-2 -80 373.20 428.00 54.80 1.96 1.15 23.28 54375-1 -85 474.00 526.00 52.00 2.24 0.95 16.64 54475-2 -80 400.00 438.00 38.00 1.08 0.40 12.82 54475-2 -80 462.00 468.00 6.00 1.34 0.56 21.90 54475-5 -80 364.34 141.00 49.66 2.06 0.58 19.00 TSX : ORA 31
  32. 32. Aranzazu Project Underground Drill Program Planned for 2010/11 TSX : ORA 32
  33. 33. Aranzazu Targets El Cobre Target La Apuesta Sedimentary Target Aranzazu Strike Extensions TSX : ORA 33
  34. 34. Arapiraca Project Feasibility Stage Copper-Gold-Iron Ore Deposit Forecasted • Preliminary Economic Assessment completed September 2009, considers Production commissioning Q4/2012 • Average annual production of 137 mm lbs copper, 27,000 oz. gold and 1.3 mm tonnes of magnetite concentrate grading 67% Fe • Low projected cash costs of US$0.65 – US$0.82 per lb of copper (net of by-products) Capital Projects • Capex US$490 million • Construction permit received August 2009 – now fully permitted • Potential to enhance project economics with addition of oxide plant to produce an additional 20 mm lbs copper cathode per annum • Excellent infrastructure – access to roads, railway, ports, towns Resources • Preliminary Economic Assessment does not consider additional resources at Caboclo Deposit (drilling underway) – resource estimate update for Caboclo Deposit Q3/2010 Mineral Resources Tonnes Grade Grade Grade Cu Au (Cu %) (g/t Au) (Fe %) (mm lbs) (000 oz.) Serrote Total M&I Resource 195,889,000 0.49 0.09 15.48 2,139 0.57 Serrote Inferred 31,267,000 0.49 0.09 14.01 337 0.09 Caboclo Total M&I Resource 7,587,000 0.57 0.16 19.34 95 0.04 Caboclo Inferred 4,616,000 0.57 0.11 14.24 58 0.02 Based on a 0.3% Cu equivalent cut-off grade. TSX : ORA 34
  35. 35. Preliminary Economic Assessment Highlights Arapiraca Project Years 1 to 3 Life of Mine Mill Feed (Note 1) 40.2 million tonnes 169.6 million tonnes Strip Ratio (Note 2) 3.7 to 1 3.12 to 1 Copper Grade 0.60% 0.51% Gold Grade 0.103g/t 0.09g/t Iron Grade 17.6% 14.8% Copper Recovery 85% 85% Gold Recovery 65% 65% Magnetite Recovery (Note 3) 92% 92% Copper Production 155M lbs per annum 137M lbs per annum Gold Production 29,750 oz per annum 26,850 oz per annum Iron in Magnetite 874,000 tonnes per annum 767,000 tonnes per annum Total Cash Cost per Pound Copper (Note 4) $0.65 $0.82 Project Total Capital Costs $US 490M Sustaining Capital Costs $US 76M Mine Life 12 years Arapiraca Project: Economics – Post Tax (Note 5) Demonstrates Potential NPV@8% $US 417M for Strategic Partnerships NPV@10% $US 325M NPV@12% $US 250M IRR 25.4% Payback 2.8 Years Note 1 Mined and processed resource is 92% classified as Measured and Indicated. In-pit Inferred resources amount to 8% of the total in-pit resources, and are mined at the end of the mine life. Note 2 Strip ratio includes oxide material which may be processed by heap leach not considered in the Preliminary Economic Assessment TSX : ORA 35 Note 3 Average magnetite concentrate production is estimated at 1.3 million tonnes per annum grading 67% relative to an 11% mass pull for Fe Note 4 Total cash cost per pound of copper includes treatment and transportation costs and royalties, as well as by-product credits for sales of gold and iron ore Note 5 Commodity prices assumed for financial analysis are US$2.00/lb Cu, US$800/oz Au, and US¢85/dmtu Fe fines
  36. 36. Looking Ahead
  37. 37. Compelling Valuation P/NAV1,2 AMC/P&P Recoverable Reserves1,3 1.60x 1.42x $2,500 $2,173 1.40x $2,008 $2,000 1.20x 1.07x 1.01x P / NAV AMC / P&P Recoverable Reserves 0.97x 0.91x 1.00x 0.84x $1,500 0.75x 0.80x 0.67x 0.59x (US$/oz Au) 0.60x $1,000 $701 $696 0.40x $470 $403 $500 $241 $170 0.20x 0.00x $0 2010E Production Price to Cash Flow 2010E1,2 500 14.0x 13.3x 430 450 11.3x 377 12.0x 400 340 9.1x Production 2010E (Au 000oz) 350 10.0x P/CF 2010E 296 300 276 8.0x 7.2x 250 205 5.9x 200 163 6.0x 4.8x 3.8x 3.5x 150 105 101 4.0x 2.6x 100 50 2.0x 0 0.0x 1. Share Price Information as at March 31, 2010 2. NAV based on a 5% discount rate and the following Canaccord Adams Research forecasts for gold prices: US$1,250/oz in 2010, US$1,100/oz in 2011, US$1,000/oz in 2012, TSX : ORA 37 US$900/oz in 2013 and US$850/oz in 2014+ 3. AMC = Basic market cap + net debt + working capital + estimated capex Source: Canaccord Adams Research
  38. 38. Thank You Aura Minerals Inc. (TSX: ORA) P.O. Box 10434 - Pacific Centre 777 Dunsmuir Street, Suite 1950 Vancouver, BC V7Y 1K4 Tel: 604-669-4777 Fax: 604-696-0212 Email: Web: TSX : ORA 38