corporate presentation...2014/09/14 · haile milestones and status report! milestone / activity...
TRANSCRIPT
Denver Gold Forum September 14-17, 2014
CORPORATE PRESENTATION
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The informa-on in this document has been prepared as of August 20, 2014. 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 Haile 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. In 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 Wi]wer, 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 www.sedar.com. 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
Cautionary Statement
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Proven gold mine development, finance, permitting and operations experience
Romarco has the team in place to bring Haile into production
Experienced Board of Directors Strong Management & Technical Team
Leendert Krol, Chairman § Former Newmont
Diane R. Garrett § Former Dayton Mining, US Global Investors
James R. Arnold § Former Freeport, Gold Fields – Richards Award Winner
Don MacDonald § CFO KGHM International (formerly QuadraFNX), former
NovaGold, DeBeers, Dayton Mining
John Marsden § Consultant, former Freeport – Richards Award Winner
Patrick Michaels § Portfolio Manager – Zuri-invest, Switzerland
Gary A. Sugar § Former RBC Capital Markets
Robert van Doorn § Former Mundoro, Rio Narcea, Morgan Stanley
Diane R. Garrett, Ph.D., President & CEO § Former Dayton Mining, US Global Investors
James R. Arnold, Sr. VP & COO § Former Freeport, Gold Fields – Richards Award Winner
Stan Rideout, Sr. VP & CFO § Former Phelps Dodge
David Thomas, VP & General Manager
James Berry, Chief Geologist & Regional Exploration Manager § Former Barrick Brent Anderson, Mine Manager § Former Quadra, Freeport Mike Gleason, Director of Project Development § Former Freeport Jim Wickens, Process Manager § Former Barrick
Johnny Pappas, Director of Environmental Affairs § Former Freeport
Ramona Schneider, Environmental Manager § Former Kinross Dan Symons, Vice President, Investor Relations § Former Renmark Financial
Joe Romagnolo, Vice President, Controller § Former Centenario Copper, The Molson Companies Limited
STRONG BOARD, MANAGEMENT & TECHNICAL TEAM
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Van Eck
Blackrock
Sun Valley Gold
Franklin Investments
Tocqueville
Oppenheimer
Colonial First State
Norges
JP Morgan
Fidelity
TD
Baker Steel
Mackenzie
CPP
Gabelli
70% Institutional Ownership
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TOP
15 S
HA
REH
OLD
ERS
OF OUR SHARES ARE INSTITUTIONALLY
OWNED
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Haile Gold Mine Checks all the Right Boxes ü Location
ü Infrastructure
ü Private Land
ü No royalty
ü Low operating cost
ü Low capital cost
ü High grade
ü World class orebody
ü Operating team in place
ü 80% detailed engineering complete
ü Solid cash position
ü Strong institutional shareholder base
Permits (4 State Permits Received)
Project Financing
Construction
Production
CAROLINA SLATE BELT
Tennessee
Kentucky Virginia
North Carolina
Georgia
South Carolina
Buzzard
Elm
Hickory
Bayberry
Locust
Russell Mine
Reed Mine Howie Mine
Brewer Mine
Ridgeway Mine Dorn Mine
Bante Mine Tathom Mine
Columbia Mine
Magruder Mine
Haile Mine
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2010 Reserves § Calculated at $950 gold
§ 2 million ounces @ 2.06 g/t gold
$320 million (1) § One of lowest capital cost gold projects in industry
$379/oz (2)
($347/oz first 5 years)
§ One of lowest operating cost gold projects in industry
2.06 g/t § One of highest grade open-pit gold projects in industry
* NOTE: As per March 19, 2012 Technical Report (1) As reported in Q1 MD&A April 30, 2014
(2) Approximately within Feasibility Study sensitivities of +/- 20% as reported in Q1 MD&A April 30, 2014
INTRODUCTION TO THE
HAILE GOLD MINE PROJECT
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2011 Resources
§ Calculated at $1,200 gold § 4 mm ounces (M&I) @ 1.77 g/t gold § 0.8 mm ounces (Inferred) @ 1.24 g/t gold
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AERIAL OF HAILE
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HAILE GOLD MINE – Mining History
§ First Gold rush before California § Carolinas led US Gold produc7on un7l 1848
§ Second US Mint in Charlo<e, NC § Original 49’ers came from East Coast § Significant gold produc7on in 80s-‐90s § Mining part of local history/community
§ 500 ac7ve mines in South Carolina today
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Local Community – Town of Kershaw
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10 Located in Mining Friendly Jurisdiction u Romarco continues to build strong local
relationships and support
u High local unemployment u Romarco buys and hires locally
u 94 employees u 80% local workforce
Ongoing Community Involvement
Strong Community Support
§ Strong State and local support for Haile ê Drill permits received in <2 weeks (650 holes)
ê No Federal, State or local opposi-on to date ê State offered tax incen-ves
• $3M in annual savings • Tax reduc-on from 10% to 4%
§ PermiOng ê Federal (404) -‐ SUBMITTED
• Wetlands ê State (South Carolina)
• Mining / opera-ng permit – SUBMITTED - Water treatment permit - Storm water permit - Air permit
• Water (401) – SUBMITTED
Awards
From le( to right:
• 2010 OUTSTANDING BUSINESS AWARD presented to HAILE GOLD MINE by Kershaw Chamber of Commerce
• 2011 CITIZEN OF THE YEAR presented to DIANE GARRETT by Kershaw Chamber of Commerce
• 2011 COMMUNITY CITIZENSHIP AWARD presented to DAVID THOMAS by Mining Associa:on of South Carolina
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COMMUNITY SUPPORT
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STATE PRISON Our Closest Neighbor
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HAILE GOLD MINE PERMITTING
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ALL
BA
SELI
NE
STU
DIE
S R
EVEA
L No threatened or endangered species
No historical sites
No protected fish or wildlife
No impact on local water supplies
No impact on recreation areas
No impact on traffic patterns
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• 404 Wetlands Permit only • USACE is sole deciding
regulatory body • All other agencies are
cooperating or commenting agencies only – EPA, US Fish and Wildlife, Catawba Nation, DHEC, SCDNR etc.
ü Air Quality Permit ü NPDES Permit ü Dam Permit ü Stormwater Construction
Permit • 401 Water Quality
Certification • Mine Operating Permit • Others
Federal – USACE* State – DHEC**
* US Army Corps of Engineers���** South Carolina Department of Health and Environmental Control
HGM PERMITTING
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Typical Palustrine Emergent Wetland
WETLANDS AT HAILE PROPERTY
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Typical Palustrine Forested Wetland (inundated)
Non-Relatively Permanent Waters
(intermittent stream channel)
Duckwood (location of Tailings Facility)
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• Strong balance sheet with approximately $30.5M in cash and no debt(1)
• Well defined project schedules and clear development milestones
Haile Milestones and Status Report
Milestone / Activity Status
4 State Permits P
Draft EIS P
Comment Period P
Final EIS P
Equipment P
Engineering P
Operating Team P
Power LOI P
Financing
(1) As at July 30, 2014
Project Schedule for EIS
2014 2015 2016
Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Final EIS (July 24, 2014)
Remaining State Permits
Record of Decision (EIS) Nov. 2014
Financing Arranged
Mobilize Equipment Dec. 2014
Construction
Production
Exploration
CLEAR PLAN TO BRING HAILE INTO PRODUCTION
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2 0 0 8 RESOURCE GROWTH
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PLAN VIEW
CHAMPION SMALL SOUTH PIT LEDBETTER SNAKE
HAILE LONG SECTION
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PLAN VIEW
2 0 0 9
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RESOURCE GROWTH
CHAMPION SMALL SOUTH PIT LEDBETTER SNAKE
HAILE LONG SECTION
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PLAN VIEW
2 0 1 0
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HORSESHOE
CHAMPION SMALL SOUTH PIT LEDBETTER SNAKE
HAILE LONG SECTION
RESOURCE GROWTH
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RESOURCE GROWTH At year end 2011 2 0 1 1
2010 GOLD MINERALIZATION
2011 GOLD MINERALIZATION GROWTH
HAILE LONG SECTION
PLAN VIEW
HORSESHOE
PALOMINO
MUSTANG
CHAMPION SMALL SOUTH PIT LEDBETTER SNAKE
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HORSESHOE
PALOMINO
MUSTANG
CHAMPION SMALL SOUTH PIT LEDBETTER SNAKE
3.5 km
274 m
610 m
DEP
TH
(m
)
HAILE GOLD MINE FEASIBILITY STUDY HIGHLIGHTS
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u Feasibility Study does not include deep mineralization: Ø Horseshoe, Mustang, Palomino and Snake Deep deposits
117 m of 5.5 g/t *
70.1 m of 5.5 g/t *
62.5 m of 9.6 g/t *
* Discovery hole at zone
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RESOURCES & RESERVES
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OPEN PIT & UNDERGROUND MEASURED + INDICATED RESOURCES AT US$1200 GOLD (1)
METRIC TONNES (000’S)
g/t CONTAINED oz Au (000’s)
MEASURED 36,894 1.79 2,125
INDICATED 34,277 1.74 1,914
MEASURED + INDICATED 71,171 1.77 4,039
INFERRED 20,125 1.24 801
RESERVES AT US$950 GOLD (1)
METRIC TONNES (000’S)
g/t CONTAINED oz Au (000’s)
PROVEN RESERVE 19,592 2.19 1,382
PROBABLE RESERVE 10,917 1.82 636
PROVEN & PROBABLE RESERVE
30,509 2.06 2,018
(1) From March 13, 2012 Technical Report
2011
2010
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PLANT SITE – DESIGNED FOR EXPANSION
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CRUSHER
SAG BALL MILL
FLOT FINE GRIND
CARBON STRIP
REFINERY
CIL
CN DESTRUCT
MINE SHOP
MILL SHOP
REAGENT
WATER TREATMENT
ADMIN
HAILE GOLD MINE
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Clear Plan to Bring Haile Into Production
Design Overflow & Process Descrip7on
§ Conven7onal opera7on § Simple flowsheet § Off-‐the-‐shelf
technology § Ability to expand
project scale to include addi7onal resource discoveries
Design Overflow Process Descrip7on
§ Robust “Simple” Flowsheet Crush Æ Grind Æ Flota7on
§ Proven Technologies Regrind Flot Con Æ Leach Con
§ Flexible, Expandable Leach Flot Tail Æ Recover both
§ Non-‐Refractory CN Detox Æ Tail Storage Facility
§ Off-‐The-‐Shelf Technology Standard Carbon Elu7ons, EW
§ No Long Lead Time Units Remaining
§ Approx. 80% detailed engineering complete § Opera7ng team in place
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Near Term, Low Cost Gold Producer • Strong project economics with robust IRR and NPV at conserva-ve gold prices ($950 Au) • High grade, low cash cost opera-on • Manageable, low cost capital requirements
• Posi-ve feasibility study does not include • Horseshoe zone • Snake Deep • West Ledbe]er • West South Pit • 601 • Inferred resources within US$950 Pit • Palomino zone
• 7000 tpd plant designed for 14,000 tpd expansion
Summary of Haile Feasibility Study (US$950 Gold)
2 P Gold Reserves (‘000 oz) 2,018 Recovery Rate (%) 83.7 Net Recoverable Gold (‘000 oz) 1,681
Annual Mill Throughput (‘000 t) 2,555
Daily Mill Throughput (tpd) 7,000 Mine Life (years) 13.25 Overall Strip Ra-o (waste:ore) 7.2:1 Average Feed Grade to Mill (LOM) (g/t) 2.06 Average Produc-on (year 1) (‘000 oz) 172
Average Produc-on (years 1 -‐ 5) (‘000 oz) 150
Cash Costs (year 1-‐5) (US$/oz) 347 Cash Costs (LOM) (US$/oz) 379 Ini-al Capital Expenditures (US$M) 275.5 Sustaining Capital Expenditures (US$M) 119.2 Net Present Value (5% discount)
Pre-‐Tax (US$M) 279 Internal Rate of Return
Pre-‐Tax (%) 19.6
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NPV & IRR Sensitivity to Gold Price
(1) As per February 2011 Feasibility Study included in March 13, 2012 Technical Report filed on March 19, 2012 on sedar.com – based on capital costs of $275 million not updated capital cost of $320 million from December 31, 2011 MD&A
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EQUIPMENT ~ 1/3
CONSTRUCTION ~ 1/3
OTHER ~ 1/3
TOTAL PROJECT $320M
• +75% of equipment is priced /locked in
• Mills, haul trucks, shovels, loaders delivered in SC
• Updated commodity pricing • $30 million in contingency • $17 million for inflation
Component of CAPEX $320 million Capital Costs
CAPITAL COSTS BREAKDOWN
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EQUIPMENT IN SOUTH CAROLINA
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FINANCING ALTERNATIVES
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u Funding Strategy u Total Project Financing Required = $360-400 million
Ø $320 (project)+bonding + mitigation + working capital u Targeting 40-60% debt
Ø Independent Engineer technical audit completed (recently refreshed)
Ø Targeting debt commitment Q3 2014 u Balance in equity
Ø Upon receipt of permits or when markets present themselves u Other Options: (lower on the list)
Ø High yield debt Ø Convertible debt Ø Strategic Investor Ø Royalty Ø Forward Sale
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FINANCING
u Project Financing Mandate announced July 15, 2014
Ø Lenders: Caterpillar Financial
Macquarie Bank
Société Générale
Ø US$200M senior secured project finance
Ø No hedging requirement
Ø Targeting commitment letter in Q3 2014
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TARGET PRICE BMO $1.30
Clarus $1.25
Cormark $1.25
Euro Pacific Canada $1.25
RBC $1.25
Paradigm $1.20
NBF $1.15
Desjardins $1.10
ANALYST COVERAGE
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(1) As at close on August 29, 2014 (2) Includes 28.5m “in-the-money” options at an average strike price of C$0.65 as of June 30, 2014
Capitalization Summary
CAPITAL STRUCTURE
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Exchange/ Symbol TSX:R
Share Price(1) C$0.84
Shares Outstanding (Basic) 660.4M
FD Shares Outstanding (TSM)(2) 699.7M
Market Capitalization(1) C$554.74
52 Week High / Low(1) C$0.99 / C$0.35
Cash Balance (July 30, 2014) ~US$30.5M
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REGIONAL EXPLORATION
u Current Regional Targets
u 1 in North Carolina
u 3 in South Carolina
u High Priority list of 11 target areas
pending acquisition
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CAROLINA SLATE BELT
Tennessee
Kentucky Virginia
North Carolina
Georgia
South Carolina
Buzzard
Hickory
Bayberry
Locust Haile Mine
REGIONAL EXPLORATION - NORTH CAROLINA
• Hickory – • Historical produc-on during
1800s • Romarco has conducted Phase
1 & 2 drilling (40 holes) – May, 2012
• HKDH-‐11-‐2 3.4m of 3.3 g/t • HKDH-‐11-‐3 10.7m of 4.5 g/t • HKDH-‐12-‐2 13m of 3.0 g/t • Currently evalua-ng
surrounding proper-es • Currently evalua-ng proper-es
and surface sampling throughout the Carolina Terrane in North and South Carolina
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CAROLINA SLATE BELT
Tennessee
Kentucky Virginia
North Carolina
Georgia
South Carolina
Buzzard
Hickory
Bayberry
Locust Haile Mine
REGIONAL EXPLORATION – SOUTH CAROLINA
• Bayberry – Completed Phase 2 Drill Program (March, 2013)
• Historical Production during the 1800’s and 1900’s • Similar host rocks, alteration and mineralization as observed
at Haile • Romarco has drilled 38 holes (2011, 2012, 2013) • Approximately 15,800 meters drilled • RC-2033 13.7m of 2.3 g/t
• Loblolly – Completed Phase 1 Drill Program (April, 2013)
• Historic Production during the 1800’s • Similar host rocks, alteration and mineralization as observed
at Haile • Romarco has drilled 16 holes ( Nov. 2012 – April, 2013) • Approximately 8,300 meters drilled
• Locust – drill ready • Small historical oxide resource (pre 43-101) • 34 RC and 27 core holes have historically been drilled on
the property • Historical Reported, highlighted intercepts include:
• 18.3 meters of 3.3 g/t • 65.5 meters of 3.1 g/t • 14.6 meters of 3.2 g/t • 43.9 meters of 2.0 g/t
• No Drilling by Romarco to date
W W W . R O M A R C O . C O M
70 University Avenue Suite 1410 Toronto, Ontario M5J 2M4 Tel: 416.367.5500 Fax: 416.367.5505 Email: [email protected]
Dan Symons Vice President, Investor Relations [email protected]
CONTACT INFORMATION