Eagle mountainjan13presentation

33
1 GOLD IN GUYANA Working to become a mid-tier gold producer in 2014 January 2013

Transcript of Eagle mountainjan13presentation

Page 1: Eagle mountainjan13presentation

1

GOLD IN GUYANA

Working to become a mid-tier gold producer in 2014

January 2013

Page 2: Eagle mountainjan13presentation

Disclaimer Some statements in this presentation contain forward-looking information. We have identified such statements with as asterisk for your ease of identification of forward looking-information. These statements include, but are not limited to, statements with respect to the expected benefits from having a management team seeking to aggressively grow the Company into a mid tier gold producer through the exploration and development of existing assets, the completion of the acquisition of a significant interest in the Eagle Mountain Project and the development potential of the Company's properties. Specifically, any statements regarding the potential increase of the Company’s inferred resource at the Eagle Mountain Project and the goals and objectives of the Company are by their nature forward looking information. These statements address future events and conditions and, as such, involve known and unknown risks, uncertainties and other

factors which may cause the Company’s actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the statements. General risk factors and assumptions include, among others, the effects of general economic conditions, the price of gold and other metals, changing foreign exchange rates and actions by government authorities, uncertainties associated with legal proceedings and negotiations, competition for resources, and misjudgements in the course of preparing forward-looking information. Specific risk factors include risks associated with the ability obtain any necessary approvals, waivers, consents and other requirements necessary or desirable to permit or facilitate the development of the Company’s properties, the risk that any applicable conditions of the acquisition of an interest in the Eagle Mountain Project may not be satisfied, risks associated with project development; the need for additional financing; operational risks associated with exploration activities and results, mining and mineral processing; environmental liability claims and insurance; reliance on key personnel; the potential for conflicts of interest among certain officers, directors or promoters of the Company with certain other projects; the volatility of the Company’s common share price and volume; tax consequences; and other risks and uncertainties. Eagle Mountain is in the exploration stage only and is without a known body of commercial ore. An increase in the current inferred resource will only occur if favourable exploration results are obtained. The business of exploring for minerals involves a high degree of risk. Any forward-looking information contained in this presentation is based on the geological interpretation of results obtained from exploration activities conducted on the Company’s properties to date, including geological and geophysical surveys, sampling and mapping programs and drilling results. Results are interpreted by the Company’s management and staff and future programs and plans are formulated based on such interpretations. In making statements that contain forward-looking information, management assumes that the results are accurate and will be verified by independent examination, that in country conditions and

in the state of the financial markets remain somewhat constant and that management has the technical and financial capability and expertise to achieve the Company’s growth plans. Forward-looking statements are made based on management's beliefs, estimates and opinions on the date that statements are made and the Company undertakes no obligation to update forward-looking statements if these beliefs, estimates and opinions or other circumstances should change, except as required by law. In accordance with good corporate governance procedures, management constantly monitors and re-assesses the Company’s activities, results achieved and future plans. In the event management forsees or experiences material changes to the Company’s business and future plans, it will update forward looking statements accordingly Each recipient of this document accepts that no representation or warranty is made concerning the information herein nor is any liability accepted in respect thereof by Stronghold Metals, or any other shareholder (present or future), or Director, Officer, advisor, or by any of their respective affiliates; Company Copyright clauses are valid in this case. Content and slides from this presentation are not allowed to be copied or distributed otherwise, without the written consent of the Company. *Denotes forward-looking information.

2

Page 3: Eagle mountainjan13presentation

Mission

To leverage our significant gold deposit and

commence production, generating cash flow to

accelerate to mid-tier producer

3

Page 4: Eagle mountainjan13presentation

Investment Highlights

Advanced Eagle Mountain gold project in Guyana

Over 980,000 ounces of gold in updated NI 43-101-compliant resource

Near-term, low-cost production potential: Gold starts at surface

Long-term operations: Huge potential for large, economic gold resource

Existing nearby infrastructure

Proven, experienced leadership and operating team

Entry opportunity: Low market cap to peers, over $16M spent to date

Support of strong corporate and institutional shareholders (IAMGOLD, Sprott, etc.)

4

Page 5: Eagle mountainjan13presentation

Project Overview

5

Advanced Eagle Mountain gold project in Guyana

Mining friendly

English-speaking jurisdiction

With a stable democracy based on British law

Project contains an existing shallow NI 43-101-compliant resource:

188,000 ounces (indicated), average grade of 1.49 g/t gold (0.5 g/t

gold cut-off) and

792,000 ounces (inferred), average grade of 1.19 g/t gold (0.5 g/t

gold cut-off)

Existing resource covers just 250 hectares inside 5,050-hectare property

Deposit is open in three lateral directions and at depth

Page 6: Eagle mountainjan13presentation

Guyana

Consistently stable economy and political climate

Elected government has followed a policy of economic liberalization, promotes foreign

investment

Long history of successful foreign investment in country’s mining sector

British-based law and robust mining law protects foreign investment

One of the friendliest mining regimes in the world

6

Page 7: Eagle mountainjan13presentation

Guyana: Track Record of Successful Production and Operations

Omai gold mine: Produced over 3.7 million ounces grading

~1.4 g/t gold from 1993 to 2005

Guyana Goldfields Aurora project: 6.54 million measured and

indicated ounces (open pit and underground)

Sandspring Resources: Advancing multi-million ounce Toroparu gold-

copper deposit toward potential large-scale production in 2015

Azimuth Resources West Omai project: 1.22 million inferred ounces

20 to 25 Canadian juniors exploring for various commodities in

Guyana

Major mines in bauxite industry

7

Page 8: Eagle mountainjan13presentation

Eagle Mountain: Work Completed to Date

Advanced 5,050-hectare gold project with near-term production

potential

281 holes drilled totaling 35,993 metres

78 drill holes (10,850 metres) completed by Eagle Mountain

Remaining holes completed by predecessors including IAMGOLD

Known resource covers only 250 hectares inside the 5,050-hectare

property

Deposit remains open in three lateral directions and at depth

Excellent historical database (geophysics, adits, extensive sampling,

auger drilling, LIDAR, etc.)

Over $16 million spent on exploration work at Eagle Mountain to date

8

Page 9: Eagle mountainjan13presentation

Eagle Mountain: 2011 Drilling Highlights

78 holes completed for a total of 10,850 metres

Program included both infill and step-out diamond drilling holes

The program was designed to:

Move part of the geological resource from inferred to indicated

Expand the total number of ounces

Test and improve the geological model over specific deposit areas

More than 90% of holes drilled intersected shallow gold mineralization of economic grade

Results include:

24.19 metres at 9.1 g/t gold from surface to 24.19 m depth (EMD11-76 – Zion)

19.05 metres at 3.13 g/t gold from surface to 19.05 m depth (EMD11-83 - Bottle Bank)

7.80 metres at 30 g/t gold from 36 to 43.8 m depth (EMD11-85 - Bucket Shaft)

42.20 metres at 0.97 g/t gold from surface to 42.2 m depth (EMD11-77 –Zion)

9

Page 10: Eagle mountainjan13presentation

Eagle Mountain: Geology and Geochemistry

Page 11: Eagle mountainjan13presentation

11

Eagle Mountain: NI 43-101 2012 Block Model vs 2010 Block Model Historical & Current Drilling Shown

Page 12: Eagle mountainjan13presentation

12

Eagle Mountain: New NI 43-101 Typical cross-section across the NE part of the deposit

Page 13: Eagle mountainjan13presentation

Eagle Mountain: Strong Recovery Potential

IAMGOLD took bulk samples of both oxide (saprolite) and underlying

hard rock mineralization testing all three known deposit horizons at

Eagle Mountain in 2009

Samples used for mineralogical and metallurgical testing completed

at SGS Laboratories (Toronto)

92% recovery for cyanidation (saprolite, hard rock)

70+% recovery using only gravity (saprolite)

Recoveries are in line with historical recoveries/mines in the region

13

Page 14: Eagle mountainjan13presentation

Strategic Timeline

Q4 2012

Successfully expanded gold resource - updated NI 43-101-compliant

resource represents 34% increase from November 2010 resource outline

Q1 2013

Commence Environmental Impact Assessment (EIA) report in support of

2013 mining permit application - ensure compliance with all Guyanese

environmental regulations and global best practices

Commence Scoping Study/Preliminary Economic Assessment (PEA)

14

A CATALYST FOR GROWTH

Page 15: Eagle mountainjan13presentation

Strategic Timeline – continued

Q1 2013 (continued)

Commence engineering, mineralogical and metallurgical studies

Discussions and legal on entry into other small-scale gold production

opportunities in Guyana

Q2 2013

Complete independent Scoping Study and Economic Assessment Report,

costing model to support initial production of 35,000 to 45,000 ounces

gold annually

Commence 2013 dense resource-outline drilling at Eagle Mountain

Commence full Feasibility Study based on Scoping Study results

Pursue further technical engineering tests as part of Feasibility Study work

15

Page 16: Eagle mountainjan13presentation

Strategic Timeline – continued

Q3 2013

Commence discussions regarding mining permit and minerals agreement

with Guyana’s Ministry of Natural Resources and the Environment

Q4 2013

Submit application for mining permit and minerals agreement

Complete Feasibility Study

Expected approval for mining permit and minerals agreement

2014 Commence development and production

16

Page 17: Eagle mountainjan13presentation

Eagle Mountain: Proposed Production Tiers

17

• Production of 35,000 to 45,000 ounces – significant cash-flow will bolster treasury with no dilution

Phase 1a

• Increase to 60,000 to 75,000 ounces – expansion with low capital investment

Phase 1b

• 120,000+ ounces – additional capital investment required Phase 2

Page 18: Eagle mountainjan13presentation

Further Expansion Potential

Significant targets with Au mineralization within

Eagle Mountain PL (e.g. Bishop Growler) and at

Mowasi

Option agreement in place to earn up to 95% of

adjacent Mowasi Gold property

Mowasi covers 17,000 hectares + additional rights

of first refusal

History of artisanal gold mining at Mowasi from

alluvial workings and saprolite

18

Eagle

Mountain

PL

EM Au

Deposit

Area

Enclosing

Mowasi

Gold’s

Properties

10 km

Current size of Eagle

Mountain Au

Deposit

Significant Targets for

Expansion

Page 19: Eagle mountainjan13presentation

19 19

Management and Directors - 277+ Years of Experience

Yannis Tsitos, President, CEO & Director

Physicist/geophysicist with 25 years experience in the mining industry. 19 years with BHP Billiton,

the last nine as senior business development manager global minerals exploration. Worked on

exploration and business deals in 32 countries. Important role in two major discoveries. Major

global mining network. Strong experience in Guyana.

Geoff Hampson, Chairman & Director

A private equity investor and businessman with 35 years experience in startups, turnaround

situations and M&A. Has been involved in building and selling private and public companies in

the mining, oil and gas, manufacturing, Internet and medical fields. Done business in Brazil,

Eastern Europe, China and North America.

Anne Casselman, Exploration & Country Manager, Guyana

Senior Geologist with 20+ years experience in precious metal exploration (Newmont, Golden

Star, Cambior, IAMGOLD). Strong experience in Guyana. Has worked on Eagle Mountain project

for the last six years, playing a major role in its expansion and exploration success.

Art Freeze, P.Geo., Director

Impressive 45 years of experience as an exploration and production geologist (e.g., Cominco,

Pasminco, Echo Bay, Pan American Silver, Stillwater). A principal consultant to Goldcorp Inc till

2007. Current Director of Orex Minerals, Mr. Freeze acts as a Consulting Geologist & Advisory

Board Member for Orko Silver Corp.

Page 20: Eagle mountainjan13presentation

20

Luiz Bizzi, Director

Brazilian geologist and Certified Investment Analyst with over 27 years experience . PhD, MBA, and past exploration

manager for South America for BHP Billiton. Dr. Bizzi was also the Director of Geology and Mineral Resources at CPRM –

the Brazilian Geological Survey and a Senior Consultant at the Brazilian Development Bank.

Jim Heras, Chairman Emeritus, Director & Founder

40 years experience as a businessman and investor in numerous private and public ventures, including several successful

mining companies (President of St. Phillips Resources - Kemess Gold/ Copper Mine). Director of various companies in

Canada.

Tim Crowhurst, Director

20+ years experience as a senior-level business manager and public policy communicator, specializing in international

trade, political affairs, corporate restructuring and turnaround, and business development. He has also served as CEO for

several mining exploration companies.

Geoff Watson, Director

30+ years of experience in the securities industry, with majority spent in the brokerage community (retail and institutional

client management) and the financing of numerous public ventures. He has also overseen the financial affairs of several

North American public companies.

Albert Wu, CFO

Certified Management Accountant, B.Com., MBA, with over 35 years experience as CFO of several public medium size

exploration and mining companies.

Management and Directors - 277+ Years of Experience

Page 21: Eagle mountainjan13presentation

Eagle Mountain: Nearby Infrastructure

Eagle Mountain is accessible by an existing road

Major road to capital Georgetown just 5 km from property

Small airport at Mahdia Township within 4 km of Eagle Mountain

Waterways located 30 km from property

Historical Omai gold mine ~40 km from Eagle Mountain

21

Page 22: Eagle mountainjan13presentation

Share Information

Listed TSX.V: Z

OTCQX: SDMTD

Frankfurt: E9X

Share Structure (as at December 27, 2012)

Issued 33,847,280

Warrants 19,638,250

Options 1,220,000

Fully Diluted 54,705,530

Major Shareholders

Management and insiders: ~15%

Sprott Gold & Precious Metals Fund: 3.8%

IAMGOLD: 7.6%

European holdings: estimated at approx. 10-12%

Market Capitalization (as at January 22, 2013) ~$11.1 million

52-Week Range (as at January 22, 2013) $0.14 to $1.45

22

Page 23: Eagle mountainjan13presentation

2013 Budget - Use of Proceeds

23

All figures in US$ Q1 2013

(Jan-Mar)

Q2 2013

(Apr-Jun)

Q3 2013

(Jul-Sep)

Q4 2013

(Oct-Dec)

Total for Year

2013 Remarks

Engineering, Metallurgical, Environ. &

FS Studies (Eagle Mountain) 330,000 340,000 360,000 290,000 1,320,000

Drilling & Analysis (Eagle Mountain) 125,000 750,000 750,000 400,000 2,025,000

Mowasi Project 25,000 0 150,000 75,000 250,000

Camp Costs & Support (sal.) 130,000 145,000 145,000 140,000 560,000

Georgetown Office & Taxes/License 17,000 12,000 12,000 67,000 108,000

Total Guyana 627,000 1,247,000 1,417,000 972,000 4,263,000

Vancouver Head Office, including IR,

Regulatory, Accounting, Expat. Salaries,

Overheads, etc.

350,000 270,000 270,000 300,000 1,190,000

Total Canada 350,000 270,000 270,000 300,000 1,190,000 TOTAL: $5,453,000

Option for immediate “Small Scale Au

Production”. Capture & deliver in

Q2/Q3.*

75,000 250,000 250,000 100,000 100,000

Opportunity Based. Subject to

machinery costs and cash flow,

incremental expansions feasible.

TOTAL CASH OUTFLOW 1,052,000 1,767,000 1,937,000 1,372,000 6,128,000

Cash from Equity Financings (net of

fees) 1,375,000 2,775,000

Total Equity Financings:

$1.5m (Q1) & $3m (Q2)

Net Cash from “Small Scale Operation”

Assuming $900/oz margin*

225,000 900,000 1,800,000 2,925,000 Expected ounces sold: Q2: 250oz, Q3:

1,000oz, Q4: 2,000oz

TOTAL CASH INFLOW 1,375,000 3,000,000 900,000 1,800,000 7,075,000

NET CASH AT PERIOD’s END 423,000 1,656,000 619,000 1,047,000

DELIVERABLES/MILESTONES

A. Two new Resource Outlines (NI43-

101) in January and November.

B. A Preliminary Economic

Assessment Report in April.

C. Additional in-fill & expansion drilling

to prove more ounces and move

more to M+I categ.

D. Deliver Environmental Base Study

& EIA (end of 2013).

E. Metallurgical, Engineering Studies

- commence Feasibility Study in Q2

and deliver it in either Q4 or Q1

2014.

F. Commence Project Permitting

Phase & Mining License (Q4).

Page 24: Eagle mountainjan13presentation

Juniors in Guyana

24

Company Name Symbol Capitalization* US$ million

Au Resource (M+I+I)* Main Project/s

Guyana Goldfields GUY: TSX 349 8 million + Aurora, Aranka

Sandspring Resources SSP: TSX-V 60 10 million Toroparu (Au & Cu)

Azimuth Resources AZH: ASX (also TSX-V) 127 1.22 million West Omai, East Omai

Sacre Coeur Minerals SCM: TSX-V 9 450,000 Million Mountain

Guyana Frontier Mining GYG: TSX-V 3 420,000 (non-compliant) Marudi Mountain, Sardine Hill,

Five Star, Guiana Shield

Madhia Gold MGD: SNSX 27 non-compliant Omai pit, Tiger River

Canamex Resources CSQ: TSX-V 28 exploration Aranka North – Also exploration

properties in Nevada

Tajiri Resources TAJ: TSX-V 1.5 exploration Kaburi – Also exploratiopn

properties in Canada

Takara Resources TKK: TSX-V 1 500,000 Tassawini, Arakaka

GPM Gold GPM: TSX-V 13 55,000 Peters Mine, Aremu

EAGLE MOUNTAIN GOLD CORP Z: TSX-V 11 1 million Eagle Mountain

* January 24, 2013

Page 25: Eagle mountainjan13presentation

Summary

Eagle Mountain, a high-quality gold resource approaching 1 million ounces with

near-term production and cash flow potential

Project has excellent potential for expansion, both land and resource

Guyana is an established, mining-friendly regime

Property has excellent access and is in close proximity to existing infrastructure

Proven, experienced management and operating team

25

Page 26: Eagle mountainjan13presentation

Thank You

For more information, please contact:

Eagle Mountain Gold Corp., Investor Relations

1-866-437-9552

+1-416-489-0092

[email protected]

www.eaglemountaingoldcorp.com

26

Page 27: Eagle mountainjan13presentation

27

Page 28: Eagle mountainjan13presentation

28

Eagle Mountain Au Deposit

35k – 45k oz/y Initial Production

Aggressive

M & A Activities

Small Scale Au Production

5k-10k oz/y

Medium-Term Growth Strategy

Eagle Mountain 35k – 45k oz/y

Initial Production

Expansion to

100,000+ oz/y Production

Eagle Mountain Au Deposit

Scoping Study

Feasibility Studies Mine

Development

Main Task: Eagle Mountain Gold Deposit

Development to mid-tier Production

Supporting Strategy One: Achieve entry in small-scale production (positive cash flow situation)

Supporting Strategy Two: Aggressive and opportunistic M&A activities

Page 29: Eagle mountainjan13presentation

Small Scale Gold Production Initiative “To Achieve a Stream of Income” within Q2 or Q3 2013

29

Mission

To leverage in 2013 the strong gold environment, the fact that Guyana is full of alluvial/eluvial/hard rock gold

occurrences and our excellent local network in order to commence or participate in a small-scale Au

production, generating cash flow to limit equity dilution and ultimately accelerate the development of our

flag ship project Eagle Mountain to a mid-tier producer, while expanding its resource.

Strategic Targets for 2013

Negotiate and enter into one or two small-scale Au operations over alluvial and eluvial ore areas

in Guyana. mobilize cheap, modular plant/s and capture positive cash flow in Q3 2013

This could be achieved via different scenarios, either an own, EMGC-controlled subsidiary or

engage EMGC in a JV, as long as EMGC earns and controls a majority interest

Target areas are prioritized and currently assessed for technical, metallurgical and legal options

Processing plant and senior operating team with significant experience identified

Page 30: Eagle mountainjan13presentation

Strategic Timeline for Small-Scale Production Activities

2013 Q1 – Complete prioritization of targets, negotiations

and legal, permitting issues

Q1 – Analyze mobile plants and processing

requirements

Q1,Q2 – Import appropriate plant in Guyana

Q2 – Mobilization of plant to site, HR issues

Q2 – Set-up, testing, dry runs and bulk samples

Q3 – Commence production, confront initial

problems and fine tuning

Q3 – Support the operation with additional local

exploration – quick and dirty !!

Q4 – Potentially increase capacity with second plant

in a different area, scaling of business operations

30

Page 31: Eagle mountainjan13presentation

Identified Areas of Interest for Rapid Au Production

Madhia Area (Local roads & Infrastructure indicated)

31

Road to Omai & Georgetown (capital of Guyana) Madhia Town & Airstrip

Essequibo River

Eagle Mountain

PL

Bishop Growler

EM deposit

A

C

C

B

Page 32: Eagle mountainjan13presentation

Mobile Au processing Plant Identified

32

Page 33: Eagle mountainjan13presentation

Competition in Guyana – Comprehensive Technical

33

Analysis

Aranka North – Imotai Bishop Growler

Aremu deposits Kaburi Tajiri

Arrowhead’s Gobin and Puruni Makapa project (Guyana Shield Resources)

Guyana Goldfields’ Aurora Noseno

East Omai and West Omai (Azimuth) Omai (Madhia Gold)

GMV’s general exploration properties Peters Mine

Sacre Coeur’s Million Mountain Tassawini and Arakaka (Takara - Alicanto)

Toroparu deposit (Sandspring) Tiger River

Guyana Frontier (Sardine Hill and Marudi Mountain) Tamberlin (Gold Port)

Black Wolf Resources – Macedonian Creek and

Konawuruk operations

Company has completed an analysis of most junior company projects and corporations operating in Guyana in the gold sector – discussions in progress on selected opportunities, including: