Magellan Minerals January 2012
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Transcript of Magellan Minerals January 2012
TSX-V: MNM, OTCQX: MAGNF | www.magellanminerals.com
Building Gold Resources in Brazil Through Grass Roots Exploration
January 2012
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Safe Harbor Statement
The material presented herein is private and confidential. The contents are not to bereproduced or distributed to any third party, including the public or press.
Certain statements contained in this presentation constitute forward-lookingstatements. These statements relate to future events or the Corporation's futureperformance, business prospects or opportunities. All statements other than statementsof historical fact may be forward-looking statements. Forward-looking statements areoften, but not always, identified by the use of words such as "seek", "anticipate", "plan","continue", "estimate", "expect, "may", "will", "project", "predict", "potential", "targeting","intend", "could", "might", "should", "believe" and similar expressions. These statementsinvolve known and unknown risks, uncertainties and other factors that may cause actualresults or events to differ materially from those anticipated in such forward-lookingstatements. The Corporation believes that the expectations reflected in those forward-looking statements are reasonable, but no assurance can be given that theseexpectations will prove to be correct and such forward-looking statements should not beunduly relied upon. These statements speak only as of the date specified. TheCorporation does not intend, and does not assume any obligation, to update theseforward-looking statements.
These forward-looking statements involve risks and uncertainties relating to, among otherthings, results of exploration activities, the Corporation's limited experience withdevelopment-stage mining operations, uninsured risks, regulatory changes, defects intitle, availability of materials and equipment, timeliness of government approvals, changesin commodity and, particularly, gold prices, actual performance of facilities, equipmentand processes relative to specifications and expectations and unanticipatedenvironmental impacts on operations. Actual results may differ materially from thoseexpressed or implied by such forward-looking statements.
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Investment Highlights
• Region with Excellent Potential: the Tapajos is the World’s third largest placer gold province, estimated to have produced 20-30 Moz from streams between 1978 and 1995 from artisanal, garimpeiro-type miners
• Experienced Management: 150+ years of mining experience, track record for discovery. Tocantinzinho deposit (2.5Moz), now owned by Eldorado Gold. 3 grass roots gold discoveries totaling 4.2Moz in 7 years.
• Projects: Advanced projects with significant upside:
• Cuiu Cuiu – 1.3Moz gold resource (100,000oz indic. + 1.2Moz inf.)
• Coringa – 370,000oz gold resource (270,000oz indic. + 100,000oz inf.)
• Key Stakeholders: Newmont Mining owns 2.5%; Kinross owns 1%
• Strong Cash Position: $7M in treasury
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Proven Management TeamJim StypulaChairman
• Previously CEO of Chapleau Resources, financier with 20years experience in mineral exploration
• Founding director of Far West Mining
Alan CarterPresident & CEO, Director
• 20 years of experience. Former Exploration Manager for RioTinto and Business Dev. Manager at BHP Billiton.
• Director and co-founder of Peregrine Diamonds and Peregrine Metals
Dennis MooreVP Business Development, Director
• Exploration geologist with 27 years experience, half of it in Latin America
• Responsible for discovery of the Tocantinzinho deposit, now owned by Eldorado Gold
Paul HansedChief Financial Officer
• 20+ years of accounting and finance experience including19 years with KPMG in Canada and Europe
Guillermo HughesChief Geologist
• 26 years experience in the mineral exploration industryincluding experience in Argentina, Peru and Brazil
Gordon AllenHead, Regional Exploration
• 35 years experience in the mineral exploration industry,predominantly in Latin America
• Responsible for discovery of the Santo Domingo IOCGdeposit of Far West Mining
Derek WhiteDirector
• Currently Executive VP Bus. Dev. of Quadra Mining andwith 20+ years financial experience in the mining andmetals industry
• Ex-Impala Platinum Ltd, Gencor and Billiton
Mario SzotlenderDirector
• Former CEO of Rusoro Mining, Director of Endeavour Silver and Radius Gold.
• 20 years experience financing and managing companies in Latin America
Richard ZimmerDirector
• Former senior mine engineer for Teck, general manager of Mount Edon Gold Mines, and project manager of POGO project.
• Most recent role was President & CEO of Far West Mining Ltd.
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Significant Gold Deposits in Brazil
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Key Land Position in Competitive Belt
Tapajos
Site of world’s largest ever gold rush from 1970’s to 1990’s
Largest placer gold province in Brazil, 3rd largest placer gold province in world – previous placer production est. 20-30 Moz
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Cuiu Cuiu and Tocantinzinho
• Tocantinzinho (2.5Moz) produced an est. 200,000oz of placer gold from artisanal surface workings. Cuiu Cuiu produced 1.5 – 2Moz of placer gold **
• Eldorado’s announced PFS in May 2011 on 160,000oz/yr OP mine, Capital costs of $383M, Cash costs of $559/oz and 11.8% IRR (14.4% with tax breaks)
• Road construction to site in progress
• FS study on Toca currently in progress and expected to be completed during Q2 2012
* Source : DNPM
** Source: Melho, R. 2007. A preliminary assesment of the Tocantinzinhop gold project, Tapajos gold province, Para Brazil. NCL Brazil 43-101 report
Cuiu Cuiu2Moz from streams+1.3Moz resource
to date
Tocantinzinho0.2Moz from streams
2.5Moz resource
Rio Crepori
road
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Cuiú Cuiú – 2011 Developments
• Maiden resource estimate released in April of 1.3Moz (mineable), 1.5Moz (geological)
• Q3 - discovery of third mineralized zone at Jerimum Baixo, still open to east
• Three new targets :-
Central North; 39.6m @ 1.25g/t Central SE; 7.8m @ 8.44g/t
27m @ 6.94g/tBabi; results pending
• Exploration drilling and step-out drill program. 21,000m completed to date from 25,000m program
• Metallurgical work in progress – results expected Q1 2012
Aerial view of village of Cuiu Cuiu
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Cuiú Cuiú – a District Rather Than a Project
Placer gold workings
Placer gold workings
Central deposit 0.6Moz
Moreira Gomes deposit 0.7Moz
Placer workings and soil anomalies
Au in soils (ppb)
??
?
?
Gold in soil anomaly 17km in length
Jerimum Baixo
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Cuiú Cuiú
Babi
Pau de Merenda30m @ 1.1g/t, 47m @ 1.8g/t
Jerimum Cima39m @ 5.1g/t
Ivo
Miraboa
Miraboa West
Central SE27m @ 6.9g/t, 8m @ 8.4g/t
Central North40m@ 1.3g/t
Central
Jerimum Baixo
Moreira Gomes
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Central – 1 of 3 Deposits so far at Cuiú Cuiú
• Bulk tonnage, open pittable deposit
• Inferred resources to date at Central total 17Mt @ 0.9 g/t gold (0.5Moz) + Indicated resources of 3.4Mt @ 1.0 g/t (0.1Moz)
• Central deposit currently extends over approx. 1,000m strike and 450m depth
• Deposit remains open at depthAerial view of Central deposit looking north
Stockwork mineralization on surface at Central
Outline of mineralized
zone at Central
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CentralSE-NW section through Central
Typical mineralized interval Central zone – hole CC-55-10, 2.15g/t Au
Central Total Resources
TonnageAu g/t
Contained Au
Tonne x 1000 gpt oz.
Indicated Resources
3,400 1.0 100,000
Inferred Resources
17,000 0.9 500,000
* Mineral resources are not mineral reserves and do not have demonstrated economic viability. Please note that all figures have been rounded to reflect theirappropriate level of accuracy.
* These resources are constrained by mineable shapes and cut-off grades to meet the requirement that resources must have reasonable prospects for economicextraction. The mineable shapes are either Lerch-Grossman pits or conceptual underground stopes. Resources falling within the pits are reported at cut-off gradesof 0.3 gpt Au for fresh rock or 0.4 gpt Au for saprolite. Stope shapes only include blocks above a cut-off grade of 1.3 gpt Au. The cut-off grades consider a goldprice of $1,250 per ounce and metallurgical recoveries of 91% for fresh rock and 66% for saprolite.
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Central Area - Potential
Drilling in progress
Drilling in progress
Central 600,000oz
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Moreira Gomes – Recent Developments
• Bulk tonnage open pittable deposit
• Inferred resources to date at MG total 14Mt @ 1.5 g/t gold (0.7Moz)
• MG deposit extended additional 300m along strike to 1.8km
• Recent drill results include 24m @ 4.06g/t gold from 40m E of hole 79, and 18m @ 0.46 g/t gold from hole 122 drilled 400m E of hole 79
Aerial view of Moreira Gomes deposit looking north
Moreira Gomes
Total Resources
Tonnes Au Contained Au
Tonne x 1000 gpt oz
Inf. Resource
14,000 1.5 700,000* Mineral resources are not mineral reserves and do not have demonstrated economic
viability. Please note that all figures have been rounded to reflect their appropriate levelof accuracy.
* These resources are constrained by mineable shapes and cut-off grades to meet therequirement that resources must have reasonable prospects for economic extraction.The mineable shapes are either Lerch-Grossman pits or conceptual underground stopes.Resources falling within the pits are reported at cut-off grades of 0.3 gpt Au for fresh rockor 0.4 gpt Au for saprolite. Stope shapes only include blocks above a cut-off grade of 1.3gpt Au. The cut-off grades consider a gold price of $1,250 per ounce and metallurgicalrecoveries of 91% for fresh rock and 66% for saprolite.
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Moreira Gomes Area
Moreira Gomes area - aeromagenetic data, gold-in-soil geochemistry and structural interpretation
Jerimum Baixo
Moreira GomesGuarim target
Ivo target
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Jerimum Baixo
• Third discovery at Cuiu Cuiu
• Open in several directions
• Open to East
• Will add to resource base
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Cuiu Cuiu Catalysts
• 2011 drill program of 25,000m is currently 77% complete
• Third mineralized zone at Jerimum Baixo identified
• Strong indications of a fourth mineralized zone at Central North, Central SE and Babi. Additional results pending
• Metallurgical work in progress
• Drilling at Pau de Merenda, Central SE, Miraboa, Miraboa West and Ivo planned for early 2012
• Revised resource estimate planned for late Q2 / early Q3 2012
Jerimum Baixo discovery outcrop – sheeted / stockwork
vein system
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Coringa – a Reminder
• Good infrastructure: 20km east of main road and mains power
• Existing high grade resource of 270,000 oz Ind. (1Mt @ 8.5g/t) + 100,000 oz Inf. (0.3Mt @ 9.3g/t)
• Last resource estimate was completed in September 2009 and requires updating.
• Scoping study of April 2010 gave a project IRR of 34% + NPV @ 5% of $41.3M @ $950 per oz
• Scoping study based on 400t/d u/g mine prod. 36,000oz / yr. Capex of US$26.4M + op. cost of US$418/oz
• NPV of US$82.5M and IRR is 59% @ US$1200 per oz
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Coringa
• Currently drilling with 3 rigs on deep extensions to Serra and Meio and at Come Quieto
• Initial resource estimate based on 81 holes (8,750m). 73 holes and 14,091m completed since resource estimate
370,000oz resource confined to:
Galena
Serra
Meio
Total Resources
TonnageAu g/t
Contained Au
Tonne x 1000
gpt oz.
Measured and Indicated
Resources982.3 8.53 269,450
Inferred Resources
327.1 9.34 98,224
Assumes 2g/t Au cut-off, SG of 2.7t/m3 and minimum mining width of 1.5m
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Coringa – Expanding Serra at Depth
Map View
Longitudinal section
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Coringa – Upside
• Recent soil sampling has identified additional new and untested gold in soil anomalies
• Updated resource estimate planned for Q1 2012.
• Feasibility study planned to commence mid-late 2012
New zones
Grab sample running 6g/t gold from surface 2.5km SE of Come Quieto
Au in streams
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Bom Jardim
• Located 25km NW of Cuiu Cuiu along main Tocantinzinho trend, 15,385 ha
• Historic placer gold production of 0.5 – 1Moz. No previous drilling. 500 soil samples and 200 rock samples collected by Magellan
• Major structural intersection. Gold-in-soil anomaly 7km in length. Stockwork-style mineralization observed on surface
• Air mag survey completed.
Placer gold workings at Bom
Jardim
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Mato Grosso JV
• Magellan has a 35% - 50% interest in 320,000ha of the Baixada Cuiaba gold belt in southern Mato Grosso
• Excellent access with power and water. Flat terrain - cattle farming
• The belt is characterised by an E-W Proterozoic fold and thrust schist belt extending 100km in length
• Approx. 40 small open pit mines are currently in production. +100 abandoned open pits. Rocks have very low work index
• Belt has potential to host several large low grade (0.5 – 1.0g/t) Au deposits
• RC drilling program expected to start early 2012
Oregon pit, Pocone; approx 1km in diameter
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Mato Grosso JV
Cangas area showing distribution of open pit gold mines along trend 6km SW of Cangas
Pocone area showing distribution of open pit gold mines along trend 4.8km SW of Pocone
Pocone
Ouro Fino
Cangas
Oregon
Beto Rondon
Jonas
Dei
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Corporate Information
Shares Issued and Outstanding 109.4 M
Fully Diluted 117 M
Cash (Dec 31/11) $7M
Mackie Research
National Bank
Share Price (Dec 31/11) $0.55
Market Cap (Dec 31/11) 60 M
Avg. Daily Volume (3 months) 182,000
Management 11%
Institutions 45 %
Newmont 2.5%
Kinross 1%
Capital Structure Investor Summary
Analyst Coverage Shareholders
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Further Information
Alan Carter
President & CEO
Suite 1650 – 409 Granville St., Vancouver, BC, V6C 1T2
Tel. + 1 604 676 5663
Fax + 1 604 676 5664
Auditors
PricewaterhouseCoopers
700-250 Howe StreetVancouver, BCCanada V6C 3S7
Lawyers
Morton & Company
1200-750 West Pender StreetVancouver, BCCanada V6C 2T8
Jennifer Duthie
Corporate Communications
Suite 1650 – 409 Granville St., Vancouver, BC, V6C 1T2
Tel. + 1 778 838 3990
Fax + 1 604 676 5664