Download - Themac and Copper Flat
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• Value Proposition
• Conclusion
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THEMAC Resources Group Limited
Founder of The MAC Services
Group, Australia’s largest listed
provider of remote area mining
accommodation and services.
Former Managing Director of
Elders Resources Finance
Geologist, former President
and COO of US Gold. More
than 30yrs of mineral
development experience
worldwide. President of
Remote Energy Solutions
Geologist, Managing Director
of ECR Minerals. In excess of
30yrs of mining industry
experience in Asia, Australia,
Africa and North America
Mining engineer with diverse
experience in most minerals
including open pit &
underground mine production
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Corporate lawyer with over
30yrs of experience. Former
General Counsel and Company
Secretary of The MAC Services
Group
THEMAC Resources Group Limited
Equity consultant, more than
40yrs of experience as an
institutional and high net
worth adviser, specializing in
raising capital for mining
companies
TSXV code: MAC.H
Share price (current): C$0.75
Shares on issue: 73,858,372
Fully diluted: 130,293,928
Market capitalization: C$55 million
Cash: C$10 million
Debt: nil
Major Shareholders
Marley Holdings/Tulla Resources1 - 73% (72% fully diluted)
ECR Minerals2 - 20% (22% fully diluted)
THEMAC Resources Group Limited
Warrants
20,082,556 warrants at C$0.28
(14,500,000 held by ECR Minerals2)
40,000,000 warrants at C$0.34
(all held by Tulla Resources1)
1 Controlled by Kevin Maloney (director) 2 Vendor of Copper Flat option
As on completion of Copper Flat option acquisition, anticipated February 2011
5 THEMAC Resources Group Limited
Copper Flat Project, New Mexico, USA
Status: Preliminary economic assessment
(PEA) complete, prefeasibility study (PFS) and
permitting underway
Planned production: 36 million lb copper per annum
Mine life: 17 years
Cash costs: US$1.41/lb copper equivalent
First production: 2014
Resources: 107Mst Indicated
0.303% Cu, 0.01% Mo
46Mst Inferred
0.24% Cu, 0.006% Mo
Civil infrastructure in place: Tailings dam, largely pre-stripped
open pit, power lines, water well field
and pipeline, access roads, diversion
channels and building foundations
• Approximately 150 miles
south of Albuquerque and
27 miles southwest of
Truth or Consequences
• Land position in excess
of 3,000 acres
6 THEMAC Resources Group Limited
7 THEMAC Resources Group Limited – Copper Flat Project, New Mexico, USA
Copper Flat mine brought into production in 1982 but shut down after three
months of operations due to fall in copper prices to below US$0.70/lb
NI43-101 preliminary economic assessment (PEA) completed by SRK
Consulting and filed on SEDAR in June, 2010
Exploration and resource development upside
8 THEMAC Resources Group Limited
9 THEMAC Resources Group Limited
10 THEMAC Resources Group Limited
C$45M
US$144M
THEMAC
Resources
enterprise value
Copper Flat
NPV (6%)
Notes:
1. Enterprise value based on C$10M cash, share price C$0.75 (see slide 4)
2. Copper Flat NPV (6%) as per PEA (see appendices)
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o Conversion of NI43-101 Inferred
Mineral Resources to Indicated
o Expansion of resource inventory
through step-out and depth
extension drilling, including
potential to define additional
high grade breccia resources
near-surface and at depth
o Providing in-fill geotechnical
data
THEMAC Resources Group Limited
A A’
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Producing Development Exploration
Phu Kham Roseby Copper Flat Hillside Los Calatos
Ownership (%)(1) 90% 100% 100% 100% 100%
Resource size (Mt)(2) 227.0 132.5 153.0 170.0 527.6
Cu grade (%) 0.59 0.68 0.28 0.70 0.47
Cu production (kt) (3)
66.0 40.0 16.0 60.0 n/a
Other metal grades
0.22g/t Au 1.9g/t Ag
0.06g/t Au 0.008% Mo 0.2g/t Au 0.034% Mo
Location Laos Queensland,
Australia New Mexico,
USA South Australia,
Australia Southern Peru
Sources: Company filings (1) Data on a 100% basis (2) Reported at 0.12% cut-off for Copper Flat, 0.30% for Roseby and Los Calatos, 0.25% for Phu Kam and 0.20% for Hillside (3) Last twelve months’ production for Phu Kham, target first year production for Roseby (2012), Hillside (2012) and Copper Flat (2014)
Historic Mineral Reserve (50.2 million st)
Cu Au Ag Mo
Grade 0.45% 0.124 g/st 2.05 g/st 0.015%
Contained 447.9 million lbs 223,900oz 3,300,000oz 14.8 million lbs
Reported at a cut-off grade of 0.23% Cu. This historic reserve estimate does not comply with Canadian Institute of Mining,
Metallurgy and Petroleum (CIM) terminology under NI43-101 guidelines. A qualified person has not done sufficient work to
classify this estimate as a current Mineral Resource. This estimate is not being treated as a current Mineral Resource and
should not be relied upon.
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SRK Consulting (US), Inc. NI43-101 Mineral Resource Estimate,
May 6, 2010
Classification Million st Cu (%) Cu (million lbs) Mo (%) Mo (million lbs)
Indicated 107 0.303 645 0.010 21.4
Inferred 46 0.240 222
0.006 5.6
Reported at a cut-off grade of 0.12% Cu contained within a potentially economic open pit. Mineral Resources are not
Mineral Reserves and do not have demonstrated economic viability. The cut-off grades are based on US$3.50/lb of copper
and a metallurgical recovery of 90.9% for copper. Economic assumptions used for reporting molybdenum were a price of
US$10.00/lb and a metallurgical recovery of 54.3%. Gold and silver were not used in the pit limits optimization for reporting
resources.
THEMAC Resources Group Limited
Incorporation of gold and silver into resource/reserve models following precious
metals re-assay program using historic drill sample pulps
- Capital costs
- By-product recoveries
- Mine scheduling
Expansion of resources through step-out and depth extension drilling
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16 THEMAC Resources Group Limited
2010 2011 2012 2013 2014 2015
PEA
Permitting
PFS
DFS
Financing
Construction
Production
Resource &
Exploration
Drilling
17 THEMAC Resources Group Limited
• Big players include Freeport
McMoRan and BHP Billiton
• Mining skills and services
available
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- Mine life 17yrs and payback 1.75yrs from start of production;
optimization of mine scheduling may shorten payback period
- Average production of 36 million lbs copper and 628,000 lbs molybdenum
per annum over first 14yrs of operations
- Life-of-mine costs for mining and milling around US$40 million per annum
- Gold and silver to be incorporated into financial model as soon as possible
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Estimated Contained Metal Value (US$) Adjusted For PEA (Cu 90.9%, Mo 54.3%) and Historic (Au 50%, Ag 90%) Recoveries
$77,436,000 $125,513,942 $390,842,427
$651,425,760
$1,674,685,919
$2,232,914,559
$0
$500,000,000
$1,000,000,000
$1,500,000,000
$2,000,000,000
$2,500,000,000
$3,000,000,000
A - Historic Reserves andMetal Prices At Time of
Original Mine Financing;$1.60 Cu, $2.50/lb Mo,
$300/oz Au and $8/oz Ag
B - PEA Mine Production(Cu+Mo only); Cu $3/lb
and Mo $12/lb
C - PEA Mine ProductionWith $4/lb Cu and $15/lb
Mo Plus Historic Au+AgReserves (Conversion to
NI43-101 Resources
Assumed); Au $1400/ozand Ag $26/oz
Copper Value
By-Product Value
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Note:
Prepared by THEMAC Resources under the supervision of Barrett Sleeman, P. Eng, a qualified person under NI43-101 and Chief Executive Officer of the
THEMAC Resources. Figures are for illustration purposes only, are not a complete economic analysis and should not be relied upon. Conversion of historic
Au+Ag reserves to NI43-101 Mineral Resources is dependent on the results of further work as detailed elsewhere in this presentation and in the PEA. Readers
are cautioned that there is no assurance that any of the historic reserve will be converted to an NI43-101 compliant Mineral Resource
THEMAC Resources Group Limited
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NPV 6%
-25% -20% -15% -10% -5% Base 5% 10% 15% 20% 25%
Revenues -19,000 14,000 47,000 80,000 112,000 144,000 177,000 209,000 242,000 274,000 306,000
Capital
Costs 186,000 178,000 169,000 161,000 153,000 144,000 136,000 128,000 120,000 111,000 103,000
Operating
Costs 216,000 202,000 187,000 173,000 159,000 144,000 130,000 116,000 102,000 87,000 73,000
NPV 8%
-25% -20% -15% -10% -5% Base 5% 10% 15% 20% 25%
Revenues -30,000 -3,000 24,000 51,000 78,000 105,000 131,000 158,000 185,000 211,000 238,000
Capital
Costs 143,000 135,000 128,000 120,000 112,000 105,000 97,000 89,000 82,000 74,000 66,000
Operating
Costs 163,000 151,000 140,000 128,000 116,000 105,000 93,000 81,000 70,000 58,000 46,000
Note:
Prepared by THEMAC Resources under the supervision of Barrett Sleeman, P. Eng, a qualified person under NI43-101 and Chief Executive Officer of the
THEMAC Resources, based on PEA economic model. Figures in US$
THEMAC Resources Group Limited
• State and federal regulators are supportive
of mine restart
• Five major permits/approvals needed are:
-
23 THEMAC Resources Group Limited
• Porphyry mineralization is
contained within Copper Flat
stock and core breccia pipe
• Higher grade material is
contained within breccia
pipe (1,300ft x 600ft and
over 1,000ft in depth), which
is open to the south and
west
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A A’
THEMAC Resources Group Limited
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• A water well field with 4 wells capped when
the mine was shut down in 1982 is located 8
miles distant (water rights to be acquired)
• A state and federally approved diversion
channel exists around the mine site
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• Conventional mining fleet scenario proposed,
although in-pit crushing is under consideration
• Proven processing route and readily marketable
concentrate; 1982 production of 7.4 million lbs Cu,
2,306oz Au and 55,966oz Ag from 1.48 million st of
ore demonstrated +90% Cu recovery
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THEMAC Resources Group Limited
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• Gold (223,900oz) and silver (3.3 million oz) is included in
historic reserve estimates
• Potential to expand future gold and silver resource
beyond level of historic reserve estimates on basis of
lower copper cut-off grade and results of proposed step-
out drilling
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THEMAC Resources Group Limited
• This presentation may contain “forward-looking” statements within the meaning of Canadian securities legislation and the United States Private Securities Litigation Reform
Act of 1995. Forward-looking statements relate to future events or the anticipated performance of the THEMAC Resources Group Limited (“the Company” or “THEMAC
Resources”) and reflect management’s expectations or beliefs regarding such future events and anticipated performance. In certain cases, forward-looking statements can
be identified by the use of words such as “plans”, “expects”, “is expected”, “budget”, “scheduled”, ”estimates”, ”forecasts”, ”intends”, ”anticipates” or “believes”, or
variations of such words and phrases or statements that certain actions, events or results “may”, ”could”, “would”, ”might”, or “will be taken”, “occur” or “be achieved”, or
the negative of these words or comparable terminology. By their very nature forward-looking statements involve known and unknown risks, uncertainties and other factors
which may cause the actual performance of the Company to be materially different from any anticipated performance expressed or implied by the forward-looking
statements. Such factors include various risks related to the Company’s operations, including, without limitation, fluctuations in spot and forward markets for copper and
other metals, fluctuations in currency markets, changes in national and local governments in the United States and the speculative nature of mineral exploration and
development (including risks related to the results of the proposed re-assay of historic drill sample pulps), risks associated with obtaining necessary operating and
environmental permits, the presence of laws and changes in regulations that may impose restrictions on mining, limitations in respect of management time and resources,
lack of personnel and equipment necessary to carry out the Company’s proposed business plan, and other delays (including in obtaining financing) which could result in
the Company missing expected timelines. A complete list of risk factors will be described in the Company’s Filing Statement to be prepared and filed with the TSX Venture
Exchange in connection with the acquisition of the Copper Flat project and will be detailed from time to time in the Company’s interim and annual financial statements and
management’s discussion and analysis of those statements, all of which are, or will be available, for review on SEDAR at www.sedar.com. Although the Company has
attempted to identify important factors that could cause actual performance to differ materially from that described in forward-looking statements, there may be other factors
that cause its performance not to be as anticipated. The company neither intends nor assumes any obligation to update these forward-looking statements or information to
reflect changes in assumptions or circumstances other than as required by applicable law. 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 currently anticipated. Accordingly, readers should not place undue reliance on forward-
looking statements.
• This presentation refers to Indicated Mineral Resources and Inferred Mineral Resources. The Company advises readers that although these terms are recognized and
required by Canadian regulations (under National Instrument 43-101 Standards of Disclosure for Mineral Projects (“NI43-101”)), the United States Securities and Exchange
Commission does not recognize them. Readers are cautioned not to assume that any part or all of the Mineral Resources in these categories will ever be converted into
Mineral Reserves. In addition, Inferred Mineral Resources have a great amount of uncertainty as to their existence and 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, or that historic reserves will ever be converted to NI43-101 Mineral Resources
through re-assaying and additional work programs. Under Canadian rules, estimates of Inferred Mineral Resources may not form the basis of feasibility or pre-feasibility
studies, or economic studies, except for a preliminary assessment as defined under NI43-101. Investors are cautioned not to assume that part or all of an Inferred Mineral
Resource exists, or is economically or legally mineable.
• The technical information in this presentation has been based in part on the results of the preliminary economic assessment of the Copper Flat project described in a
technical report entitled "NI43-101 Preliminary Assessment THEMAC Resources Group Limited Copper Flat Project Sierra County, New Mexico” dated June 30, 2010,
prepared for THEMAC by SRK Consulting (the “PEA”), which is available on SEDAR at www.sedar.com. Technical information herein which is not included in the technical
report has been prepared under the supervision of Barrett Sleeman, P. Eng, a qualified person under National Instrument 43-101, who is also the Chief Executive Officer of
the THEMAC Resources.
• The individuals who have provided their input to the PEA have extensive experience in the mining industry and are members in good standing of appropriate professional
institutions. Mark Pfau, Exploration Consultant for New Mexico Copper Corporation (now renamed Copper Flat Corporation), is the qualified person (“QP”) for the geological
data; Jeff Volk, Principal Resource Geologist (SRK), is the QP for the resource estimation; Bret Swanson, Senior Mining Engineer (SRK), is the QP for the open pit mining;
Deepak Malhotra, Process Engineering Consultant (RDi), is the QP for the mineral processing; and Peter Clarke, Principal Mining Engineer (SRK), is the QP for all other
areas and the overall preparation of the report.
• The Mineral Resources in the PEA are reported in accordance with Canadian Securities Administrators (CSA) National Instrument 43-101 and have been estimated in
conformity with generally accepted Canadian Institute of Mining, Metallurgy and Petroleum (CIM) “Estimation of Mineral Resource and Mineral Reserves Best Practices”
guidelines. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. There is no certainty that all or any part of the Mineral Resources
will be converted into Mineral Reserves. The resource estimate was completed by Jeffrey Volk, CPG, FAusIMM, an independent Qualified Person, as this term is defined in
NI43-101. The effective date of the resource estimate is May 6, 2010 and it is based on data received by SRK in March 2010.
• Unless otherwise indicated, all dollar values herein are in Canadian dollars.
31 THEMAC Resources Group Limited