The Carmen Copper Mine
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Transcript of The Carmen Copper Mine
Carmen Copper Corporation
The Carmen Copper Mine An Emerging Concentrate Producer
1 September 2010
2
No representation or warranty, express or implied, is made in relation to the accuracy or completeness of the information and opinions expressed in the course of this presentation. No responsibility is accepted by Atlas Consolidated Mining and Development Corporation or any of its subsidiaries (“Atlas Mining”) or any of their representatives, officers, employees, agents or advisors for any of the information or for any action taken by you on the basis of the information or opinions expressed in the course of this presentation. In particular, this document contains certain financial information and results of operation, and may also contain certain projections, plans, strategies, and objectives of Atlas Mining, that are not statements of historical fact which would be treated as forward looking statements within the meaning of applicable law. Forward looking statements are subject to risks and uncertainties that may cause actual events and Atlas Mining’s future results to be materially different than expected or indicated by such statements. No assurance can be given that the results anticipated by Atlas Mining, or indicated by any such forward looking statements, will be achieved.
Geological Resource estimates relate to the original the Feasibility Study estimate which is both JORC & PMRC compliant and which was defined at a grade of 0.3% copper. This database of information was used to estimate the geological resource at a lower copper grade of 0.2% copper. Mining reserves need to be treated with caution as all the mine planes are currently being reviewed with respect to the best method of extracting the ore, waste tailings placement and waste rock placement.
This document does not constitute an offer or invitation to acquire shares in any jurisdiction. These materials are not for distribution, directly or indirectly, in or into the United States. They are not an offer of securities for sales into the United States. The shares may not be offered or sold in the United States or to, or for the account or benefit of, US persons (as such term is defined in Regulation S under the US Securities Act of 1933) unless they are registered or exempt from registration. There will be no public offer of shares in the United States.
Important Notice and Disclaimer
3
Atlas Consolidated Mining & Development Corp.
Carmen Copper Corporation is majority owned by
Atlas Consolidated Mining & Development Corp…
CASOP = Crescent Asian Special Opportunities Portfolio
Copper
Nickel
Water
Carmen Copper Atlas – 55.5% Casop – 45.5%
Berong Nickel Atlas - 25.2% Ulugan Nickel Atlas - 42.0%
AQUAtlas Atlas - 100%
0
50
100
150
200
250
300
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Top 20 Asian Copper Producers
Carmen is the largest copper producer in
the Philippines, and in the top 10 in Asia…
Average annual Cu Production
50kt pa
553
4
Copper Supply & Demand Dynamics
5
Current copper growth is centered on
China…
Source: Bhpbilliton preentation, Sept 2009
China +9%
China
USA
Germany Korea
6
China’s urban population is expected to
reach 1 billion people by 2025…
Source: Bhpbilliton, May 2010 7
Demand for copper and other metals is
likely to double over the next 15 to 20 Yrs
Source: Rio Tinto presentations
Today
Copper
8
62 5444
3641
47
2000 2010 2020
Low Risk
Medium Risk
High Risk
60
15
30
10
85
1980s 1990s 2000s
Exposed
Covered
Blind 1.3
1.4
1.1
1980s 1990s 2000s
% Cu
95
133
Open Pit Underground
US c/lb Cu
Copper supply constraints are growing…
Greater Depth Lower Grades Higher Costs Higher Sov. Risk
C1 Industry Costs Indicative depth of discoveries
Average grade of ore mined
Location of copper supply
Source: Rio Tinto presentations 9
The global shortage of copper concentrate
is expected to continue…
Balanced
Shortfall = lower TCs/RCs
Source: Bhpbilliton, 2009 10
Demand
Supply
Operations Update
11
Carmen Copper Mine is located on the
Island of Cebu, central Philippines…
12
The Carmen mine site is located approx.
16kms from the coastal city of Toledo…
CCC Leases
13
Toledo City
Open pit mining is by conventional
truck & shovel operation…
14
Ore Mined = 15.87Mt @ 0.31% Cu Waste Moved = 20.84Mt
14
Copper concentrate is produced by
traditional froth flotation methods…
Ball Mills@7
Drum Filters
Flotation Cells 15
Coarse Ore Stockpile
The Geological Resource is JORC compliant,
but based on a 0.3% Copper cut-off grade…
Tonnage Grade Metal
Reserves Mt % Cu Cu kt
Openpit: ``
South Lutopan OP 14.5 0.33 47.9
Noth Lutopan OP 21.4 0.32 68.5
South Carmen OP 9.1 0.31 28.2
Total Open Pit 45.0 0.32 144.5
Underground:
Carmen Lift 1 UG 132.0 0.40 528.0
Total Reserves 177.0 0.38 672.5
Feasibility Study ReservesMt Grade Contained
Resource % Cu Cu kt
Openpit: ``
Carmen OP 29.9 0.37 110.6
Lutopan OP 31.9 0.36 114.8
Biga OP 162.5 0.39 633.8
Total Open Pit 224.3 0.37 859.2
Underground:
Carmen UG 246.1 0.42 1,033.6
Lutopan UG 313.0 0.42 1,314.6
Biga UG 90.2 0.41 369.8
Total Underground 649.3 0.42 2,718.0
Total Reserves 873.6 0.41 3,577.3
Remaining Resource Base
Note 1: Excludes low grade dumps – 1.2 billion tonnes
Note 2: Geological boundary (envelope) @ 0.2% Cu & a Cut-off grade for resource @ 0.3% Cu
JORC Compliant Resource/Reserves Reserves are sufficient for a mine life of approx. 10-12 years Only ~25% of the total resource is being mined 16
253
484
345
726
276 289
0
200
400
600
800
1,000
1,200
1,400
1,600
0.3% Cu 0.2% Cu
Mil
lio
n T
on
ne
s
1,499
874
With higher Cu prices, all ore above 0.2% Cu grade is
economic, resulting in an increased resource tonnage
Cut-off-grade is dependent on forecast copper prices Opens up the potential for substantially more mineable ore & longer mine life
New JORC/PMRC compliant resource estimate is being currently prepared
kt Cu Metal Ore % Cu
3,577 0.41
4,837 0.32
0.3% Cu COG
0.2% Cu COG
Carmen
Lutopan
Biga
[COG = Cut-off-grade] 17 Note: Please refer to “Disclaimer” on Page 2 regarding Resource Estimates
The Carmen ore body can be readily mined
by either OP or UG mining methods…
UG Block Cave
18
Open Pit Mining
Stage 3 : 241 Mt Ore @ 0.33% Cu UG: 234 Mt Ore @ 0.36% Cu
Stage 3 : 217 Mt Ore @ 0.29% Cu
Incremental Summary: Stage 1: 57Mt @ 0.33 Cu 37Mt Waste [0.64:1] 150kt Cu Metal Stage 2: 49Mt @ 0.31% Cu 59Mt Waste [1.20:1] 101kt Cu Metal Stage 3: 111Mt @ 0.29% Cu 131Mt Waste [1.18:1] 226kt Cu Total 217 Mt Ore 227Mt Waste 477kt Cu Metal
Lutopan Pit will be mined until a decision is
made on the Carmen ore body…
19
Near Mine Site Upside
20
Approx. 1.2 Bt of low grade dumps provide
the opportunity for Cu leaching…
21
Next Steps: 1. Further modeling 2. IP survey over anomalies 3. Define drill targets 4. Drill most prospective targets
22
Aeromagnetic surveys have identified high
potential targets for drill testing…
Actual Production Performance &
Forecasts
23
Mill throughput has steadily increased to
reach over 35,000 tpd ore processed…
24
0.00
0.05
0.10
0.15
0.20
0.25
0.30
0.35
0.40
0.45
0.50
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
1-J
an-0
9
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eb
-09
1-M
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10
Gra
de
-%
Cu
Ton
nag
e p
er D
ay
Mill Throughput - Jan'09 to Jul'10
Daily Ore Milled [LHS] Mth Ore Milled t [LHS] Daily Head Grade %Cu [RHS]
0
1
2
3
4
5
6
0'0
8 ND
'08
J'0
9 FM A M
J J A S O ND
'09
J'1
0 FM A M
J J
Pa
ya
ble
Cu
-M
illi
on
s lb
s
Payable metal production has increased
in line with mill throughput…
Payable Copper, M lbs Gold in Concentrate, oz
Payable copper varies with- copper head grades mill throughput mill recovery 25
0
200
400
600
800
1,000
1,200
0'0
8 ND
'08
J'0
9 FM A M
J J A S O ND
'09
J'1
0 FM A M
J J
Go
ld in
Co
nce
ntra
te
-o
z
Over 35,000t copper in concentrate
has been shipped to Asian customers…
Arsenic <0.003%
Lead <0.03%
Zinc <0.14%
Mercury <0.04ppm
Selenium <0.016%
Cadmium <0.2%
Antimony <0.02%
Clean Concentrate:
26
Tonnes: 122,794 DMT
Copper 28.54 % [35,043 t Cu]
Gold 2.83 g/t [11,155 oz Au]
Silver 26.02 g/t [102,750 oz Ag]
Total Shipments to Date = 25
Copper sales are forecast to exceed 60,000
tonnes in concentrate in 2014…
010203040506070
20
08
a2
00
9a
20
10
e
20
11
e2
01
2e
20
13
e2
01
4e
20
15
e
Go
ld i
n C
on
c. k
oz
050
100150200250300350
20
08
a2
00
9a
20
10
e
20
11
e2
01
2e
20
13
e2
01
4e
20
15
e
Mag
ne
tite
-D
MT
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
20
08
a
20
09
a
20
10
e
20
11
e
20
12
e
20
13
e
20
14
e
20
15
e
Pay
able
Co
pp
er
-To
nn
es
27 Note 2: “a” = actual; “e” = estimate
23,843
Note 1: 2010 Jan-July Actual Payable Cu Produced = 13,794t
Gross sales revenue is forecast to exceed
US$400m in 2013…
Assumptions: Cu = US$7,050/t Au = US$1,100/oz Ag = US$18/oz Mag.= US$ 50/t
Note 1: All figures exclude Mark-to-Market adjustments Note 2: “a” = actual; “e” = estimate
0
100
200
300
400
500
600
20
08
a
20
09
a
20
10
e
20
11
e
20
12
e
20
13
e
20
14
e
20
15
e
Gro
ss S
ale
s -U
S$M
28
EBITDA is forecast to exceed US$250m in
2014…
Note 1: EBITDA = Earnings before Interest, Tax, Depreciation & Amortization Note 2: “a” = actual; “e” = estimate
-50
0
50
100
150
200
250
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350
20
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a
20
09
a
20
10
e
20
11
e
20
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e
20
13
e
20
14
e
20
15
e
EBIT
DA
-U
S$M
29
73
Operating Costs are declining, and C1
industry costs fall to below US$0.50/lb Cu…
30
0.00
0.40
0.80
1.20
1.60
2.00
2.40
2.80
3.20
3.60
4.00
Jan
'10
Feb
'10
Mar
'10
Ap
r'1
0
May
'10
Jun
'10
Jul'1
0
20
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20
15
20
16
20
17
Op
era
tin
g C
ost
s -
US$
/lb
Cu
Operating Costs - US$/lb Cu - 2010Corp O'Head
Depreciation
Roy/Tax
Realization
Admin
Mine Serv
Processing
HE Maint
OP Mining
Power
C1 Costs
Cu Price
CCC is forecast to fall to around the 50th
percentile on the Industry Cost curve [C1]…
CCC
2010
12.7Mt Cu
CCC expected operating range
2010 2011
2012
31
Sustainable Development
32
Sustainable development is integral to our
operations & our license to operate…
Safety, health & environment is core to our business: Policies and standards are being developed Aim to achieve equivalent of international standards ISO 14001 and ISO 18001
Stakeholder engagement is continuous and on-going
Corporate social responsibility taken seriously through proper implementation of the following:
33
Social Development and Management Program Environmental Protection and Enhancement Program Safety and Health Program
Reforestation…
34
Nursery facilities…
35 Few of the forest tree species raised in the nursery and used primarily for mine revegetation
purposes (counter clockwise: auri, agoho, and acid ipil-ipil).
SILT MANAGEMENT
• To ensure that silts are not discharged to the river
systems, settling ponds and gabion dams are built in Sigpit River and Ilag River.
Sigpit Settling Pond Sigpit Gabion Dam
With its strong CSR program, CCC sees no obstacle in the road ahead. Siltation management…
Education…
37
Established in 1965 by Atlas Mining, the school is now a college with over a thousand students coming from the mine’s host communities. CCC employee dependents get 60% tuition fee subsidy.
Employment…
38
PERIOD DATE DIRECTLY EMPLOYED
Suspension Period 1994-2006 250
Rehabilitation Period 2007-2008 6,500
Operation July 2010 3,680
Livelihood projects…
39
SHOE-MAKING FURNITURE -MAKING
MANGO FRUIT-GROWING EMPLOYEES’ COOPERATIVE
Providing financial support to De La
Salle-Andres Soriano Memorial
College for trainers' honoraria last
May 23, 2009.
COMPUTER
LITERACY
AUTOMOTIVE
SKILLS
SEWING
SKILLS
WELDING
SKILLS
Technical skills training…
40
CONCRETE CULVERT AT SPILLWAY (TINAHAS AT CARMEN 3-TINAHAS-MAGDUGO ROAD )
Construction of Water Tanks & Wells
Rehabilitation of the Masaba Channel
SILT MANAGEMENT With its strong CSR program, CCC sees no obstacle in the road ahead. Community infrastructure…
With its strong CSR program, CCC sees no obstacle in the road ahead. Keeping the community stakeholders
informed …
Mayor Arlene Zambo Gov. Gwen Garcia
A booming economy at Brgy. Don Andres Soriano
Community acceptance of the mine project
is strong…