focused on growing production - copper mountain mining ... · pdf filecompleted feasibility...
TRANSCRIPT
Focused on Growing
August 2013 Presentation
Production
“This presentation includes and is based on our completed Feasibility Study, 2012 Forecasts and other information that may contain forward-looking information and statements that are subject to risks and uncertainties. Therefore, all statements, other than statements of historical fact, are to be considered forward looking. Such forward-looking information and statements are based on current expectations, forecasts, estimates and projections about global and regional economic conditions as well as industries that are major markets for Copper Mountain Mining Corporation. There can be no assurances that such statements will prove accurate and, therefore, readers are cautioned that such statements may differ materially from actual future events. Readers are referred to the documents, filed by the Company on Sedar at www.Sedar.com, and more specifically such recent reports that identify important risk factors that could cause actual results to differ from those contained in the forward-looking statements.”
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“Canada’s Newest Major Copper Producer”
Exploration Feasibility/Financing Construction Operation
Ongoing evaluations of acquisition and merger opportunities that can add shareholder value
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2007-2008 2008-2009
2010-2011 2012-2013
Ramp up
2011-2012
9.69%
34.81% 52.5%
Share Distribution Fully Diluted
Insiders
Retail
Institutional
Analyst Coverage
BMO Capital Markets BOA- Merrill Lynch Canaccord Genuity CIBC World Markets Desjardins Dundee Securities GMP Securities Haywood Securities Jennings Capital Laurentian Bank National Bank Financial Paradigm Capital PI Financial Raymond James Scotia Capital UBS Securities
Shares Outstanding 98.4M
Options Outstanding 4.8M
Fully Diluted Shares Outstanding 103.3M
Market Capitalization (June 1st, 2013) $170 M
Year Hi - Lo Trading Range $1.43 – $4.57
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New Concentrator
New Primary Crusher
Existing Warehouse/Office Facility
Existing Tailing Facility
Existing Water Facility
Existing Power Supply
“ New Super Pit”
New Mine Truck Shop
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• 20 km south of Princeton, BC • 300 km east of Vancouver Port • Well developed infrastructure • Connected to BC Hydro power grid • Make up fresh water rights in place • Reclaim process water • Skilled labour force from local community • Strong social & environmental strategy in
place to support the long term objectives of local community
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Expected mine Life 17 years
Mining method Open Pit (truck & shovel )
Target operating throughput 35,000TPD
Mining rate (average) 175,000TPD
Strip ratio 2:1 (LOM)
Copper head grade – 2013 guidance 0.35%
Production – 2013 guidance (Lbs Cu) 65-70 million
By-products Au, Ag
Power costs Low ($0.037/ kwhr)
Off-take agreement 100% to Mitsubishi with metal sales based on LME pricing
2012 Achievements • Improved mining rates by over 25% with addition of
newly purchased mining equipment in early 2012
• Improved mill throughput (TPOD) rates by over 34%.
Upcoming Catalysts • Mill improvements in 2013 expected to
drive production higher in 2014 • Attractive growth profile with excellent
exploration potential
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• 2 x PC 8000 Hydraulic shovels •1 x EX 5500 Hydraulic shovel • 13 x 830E 240 Ton Haul Trucks •6 x 260 Ton Haul trucks • 1 x WA 1200 Loader • 4 x D375 Dozers •3 x 16M Graders •2 x AC271 Drills •2 x AC351 Drills
OVER $100 Mil MOBILE EQUIPMENT
Mechanical availability in the 85% range is favorable for international mining standards
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5 bay truck shop for planned maintenance of mobile mine equipment
60” x 89” Primary Gyratory Crusher to reduce ore to 5.5 inch range
35,000 TPD concentrator with 61 MW power station connected to B.C. Hydro power grid
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34 ft diameter x 20 ft SAG Mill 1,700hp
Two 24 ft diameter by 40 ft Ball Mills 1,700hp each
10- 160 CM rougher flotation & 5 cleaner scavenger cells
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Guidance Actual Variance Resolutions
Mining Rate (TPD) 140,000* 175,000 +25% Increase in mining fleet size has provided more flexibility and capacity
Cu Head Grade 0.347% 0.343% -1% Good correlation with mine plan
Mill Availability 92% 82% -12% SAG liners design resolved & other design issues identified and resolved
Milling Rate (TPOD) 38,000 31,000 -18.4% SAG mill feed size identified as being critical to throughput
Cu Production (mil lbs) 60** 57 -5% Mechanical availability and throughput were the limiting factors
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** The Company revised Copper production guidance during the year
* The Company did not specifically issue guidance on mining rates in 2012, however mining activities were proceeding at a rate of 140,000 TPD at the start of 2012
Scheduled SAG Mill (Liner/ Grate), 24%
Unscheduled SAG Mill (Liner/ Grate) ,
23%
Reclaim water, 17%
Ball Mill, 12%
Tailings line , 10%
Conveyor, 5% Other, 7%
SAG screen & transfer pump, 2%
Scheduled SAGMill (Liner/ Grate)
UnscheduledSAG Mill (Liner/Grate)Reclaim water
Ball Mill
Tailings line
49% of down time related to SAG mill repairs
Resolved
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Resolved
Resolved
Resolved
Drop tanks
Ball mill motors
Reclaim barge & water
Modified grate design
Resolved
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Copper Mountain Mine (100% Basis) 4Q 2012 1Q 2013 2Q 2013
Total tonnes mined (000’s) 16,180 14,591 14,731
Ore tonnes mined (000's) 4,148 4,337 4,406
Waste tonnes (000's) 12,032 10,254 10,326
Stripping ratio 2.90 2.36 2.34
Tonnes milled (000's) 2,583 2,241 2,464
Feed grade (Cu %) 0.30 0.35 0.33
Recovery (%) 81.3 82.7 87.2
Operating time (%) 83.1 85.9 86.6
Operating throughput (TPOD)* 34,000 29,000 31,700
Copper production (000's lbs) 13,800 14,200 15,700
Gold production (oz) 5,800 5,400 5,600
Silver production (oz) 66,700 64,000 71,000
* Tonnes per operating day
76.6%
81.3% 82.7%
87.2%
70.0%
75.0%
80.0%
85.0%
90.0%
Q3 2012 Q4 2012 Q1 2013 Q2 2013
Cu Recovery
83.5% 83.1%
85.9% 86.6%
81.0%
82.0%
83.0%
84.0%
85.0%
86.0%
87.0%
Q3 2012 Q4 2012 Q1 2013 Q2 2013
Operating Time
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HPF
New portable crusher
Contract Pre-crushing
In the short & immediate term, the following has been implemented to increase throughput:
a) High Powder Factor blasting of ore in Pit 3 & Pit 2 has been included as normal operating process
b) A contractor continues to supply up to 5,000 TPD of crushed ore to blend with mill feed
c) An Additional portable crusher has been acquired and installed at coarse ore stockpile to provide increased -2’’ SAG mill feed at a rate of 7,500 TPD (more direct effect)
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Current Considerations SAG Pre-crush Production Improvement
Tightened up the gyratory crusher
to 5 ½ “
Increase powder factor in pit blasting to
improve fragmentation
New policy – ore blending is
restricted to ~40% pit 3 max
Newly installed camera monitors ore size on SAG feed conveyor
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1 2 3
New feeder policy used for blending: • +1,500 TPH, use feeders #1 & #3 • -1,500 TPH , use feeder #2
Coarse Fine Coarse
SAG Pre-crush To ~50% minus 1”
Company is evaluating the installation of secondary crushing to improve mill throughput
5,000tpd contractor pre-crush
Long term
7,500tpd new portable crusher
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Bearing Pressure Max 7,100 kpa
SAG Tonnage 1,600 TPOH
38,400 TPOH
Power Max 13,000Kw
SAG Tonnage 900 TPOH
SAG Feed Plus 4 inch
Range 5% to 30%
SAG Density % Solids
~ 28% minus One Inch
~ 50% minus One Inch
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• Ball mills have proven to have extra capacity available to process tonnage in the 40,000tpd range.
• Mill throughput has been limited by the SAG mill capacity with the crushed ore from the primary crusher but operates well at the 40,000tpd range with finer SAG mill feed.
• Improvements in operating time since implementation of high energy blasting and contract pre crushing with the finer feed to the SAG mill.
• Osisko’s Malartic mine & Newmont’s Pheonix mine experienced a 25% - 30% increase in tonnage after they installed a secondary crushing.
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Install a Secondary Crusher to pre-crush 100% of SAG mill feed to minus 1”
Capital cost projected at $35 - $40 million over 12 month construction period with minimal disruption to operation
Simple payback period of less than 1 year
Tonnage capacity increase to 40,000tpd range
Based on tests & engineering studies to date, installation of SAG pre-crusher is necessary to ensure consistency of SAG mill feed size over the long term to maximize copper production
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20
40
60
80
100
22.1 Mlbs
56.6 Mlbs
30 Mlbs
90-100 Mlbs
35-40 Mlbs**
Q1&Q2
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Production Target
2011*** 2012 2013
Adjusted EPS
Q1 Q2 Q3 Q4
$0.08 $0.02 Revenue (millions) $55.1 $45.7
2015
*Based on 100%, Copper Mountain is 75% owner **As per December 2012 production guidance *** Partial year of production
$0.03 $0.28
$66.5 $229.5
Production Forecasts
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2013Q2 2013Q1 YTD
Cu sold (million lbs.) 14.7 15.0 29.8
Sales revenue ($ million) $45.7 $55.1 $100.8
Gross Profit ($ million) ($1.6) $8.1 $6.4
Adjusted earnings ($ million)* Adjusted EPS
$1.5 $0.02
$7.8 $0.08
$9.3 $0.10
Site cash cost / pound of Cu produced ** $1.81 $1.62 $1.72
Total cash cost / pound of Cu sold ** $2.32 $2.18 $2.25
Average realized Cu Price $3.18 $3.56 $3.37
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* Excludes non cash charges for FX changes and interest rate swap ** Net of precious metal credits
Exploration: Unfinished Business
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•Increase resource/reserve - longer mine life and/or expansion •Required to determine ultimate pit limits
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Copper Mountain Trend
Alabama Trend
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18,400m of core drilling and 3,300m of percussion drilling The program was successful in four ways: 1. Drilling extended Pit 2 mineralization to the north beyond
the Superpit limits and mineralization remains open. 2. Drilling under Pit 2 extended the zone of high grade
mineralization that occurs below the Superpit to the west. 3. High grade mineralization was intersected immediately
below the Superpit limits in the Pit 3 area. 4. Drilling in the Alabama zone resulted in long, continuous
intersections of low to moderate grade mineralization starting at the bedrock surface.
“Exploration was successful in extending known mineralization both laterally and to depth, beyond the limits of the existing resource” ~ Peter Holbek, VP of Exploration
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IP Chargeability - Plan view slice at 200m elevation below surface
C
Large resource of +5 billion lbs Cu provides strong base for further project optionality and longevity
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Historical Production Pit 1&3 – 97 MT @ 0.66% Cu
Historical Production Pit 2– 30 MT @ 0.38% Cu
*292m @ 0.55% Cu, 2.23 gpt Ag, 0.14 gpt Au
94 m @ 0.72% Cu, 2.77 gpt Ag, 0.11
gpt Au
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“The health & well being of our employees, our communities and the environment are directly correlated to our ability to successfully build and achieve long term growth”
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• Employment & training opportunities • Support for local community by hiring
from the region • Participation in municipal
development • Corporate philanthropy • Family integration • Education sponsorships • Proactive environmental remediation
of ecological footprint
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2013 CRU International
• Positive supply outlook given mine shutdowns, postponements & junior companies lack of access to capital
• Supply needs to grow sufficiently quickly to offset impact of declining ore grades
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Cash flow positive
Safe Mining jurisdiction
Production increasing
Significant exploration
upside
Attractive valuation
Cu production • 2012 = 57 million lbs • 2013e = 63-65 million lbs + Au, Ag credits
• High powder factor blasting for better fragmentation & contract crushing
• Secondary crusher evaluation completed
• 2012 exploration program confirmed mineralization extends below current pit limits
• 5 billion lbs resource
• High leverage to Cu • Minimal shares issued
& outstanding
• Princeton, BC • Mining friendly
jurisdiction
Additional highlights : • Strategic partnership with Mitsubishi Materials Corporation (25% partner) • Attractive debt package / no hedging in place • Goal orientated management team to maximize production
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Focused on :
• Growing production • Execution • Continuous Improvement
Contact Information: Suite 1700– 700 West Pender Street Vancouver, BC V6C 1G8 Ph (604) 682-2992
Fax (604) 682-2993 Email [email protected]
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Jim O’Rourke, P.Eng - President, CEO & Director 40+ years of mine development and operating experience. Formerly, President of Huckleberry
Mines Ltd. and Princeton Mining Corporation
Rodney Shier CA - CFO & Director
20+ years of corporate finance experience. Formerly with Pricewaterhouse-coopers.
Carl Renzoni, HonBsc. - Director 30+ years of corporate finance experience, specializing in the mining industry. Formerly with BMO Nesbitt Burns Inc.
Marin Katusa, B.Sc. - Director
10+ years strategic focus and corporate finance in the resource sector.
John Tapics, P.Eng. - Director 30+ years of mine planning and operation experience. Formerly with Alberta Electric System Operator and Balancing Pool of Alberta.
Al Cloke - Director
30+ years of experience in the mining service and supply industry.
30+ years of business experience in finance & tax
Bruce Aunger, CA. - Director
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President & CEO Jim O’Rourke
VP Exploration Peter Holbek
GM & VP Operations Don Strickland
VP Finance Rod Shier
President & CEO Jim O’Rourke
Executive VP Yosuke Isoda
Mine Manager Art Pratico
HR Manager Frank Armitage
Admin Mngr Walt Halipchuk
Mill Operations Les Bond
Maintenance Mngr Bill Van Damme
Chief Engineer Gordon Frost
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