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Focused on Growing August 2013 Presentation Production

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Page 1: Focused on Growing Production - Copper Mountain Mining ... · PDF filecompleted Feasibility Study, 2012 Forecasts and other ... SAG Mill (Liner/ Grate) Reclaim water Ball Mill Tailings

Focused on Growing

August 2013 Presentation

Production

Page 2: Focused on Growing Production - Copper Mountain Mining ... · PDF filecompleted Feasibility Study, 2012 Forecasts and other ... SAG Mill (Liner/ Grate) Reclaim water Ball Mill Tailings

“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.”

2 TSX:CUM

Page 3: Focused on Growing Production - Copper Mountain Mining ... · PDF filecompleted Feasibility Study, 2012 Forecasts and other ... SAG Mill (Liner/ Grate) Reclaim water Ball Mill Tailings

“Canada’s Newest Major Copper Producer”

Exploration Feasibility/Financing Construction Operation

Ongoing evaluations of acquisition and merger opportunities that can add shareholder value

3 TSX:CUM

2007-2008 2008-2009

2010-2011 2012-2013

Ramp up

2011-2012

Page 4: Focused on Growing Production - Copper Mountain Mining ... · PDF filecompleted Feasibility Study, 2012 Forecasts and other ... SAG Mill (Liner/ Grate) Reclaim water Ball Mill Tailings

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

4 TSX:CUM

Page 5: Focused on Growing Production - Copper Mountain Mining ... · PDF filecompleted Feasibility Study, 2012 Forecasts and other ... SAG Mill (Liner/ Grate) Reclaim water Ball Mill Tailings

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

Page 6: Focused on Growing Production - Copper Mountain Mining ... · PDF filecompleted Feasibility Study, 2012 Forecasts and other ... SAG Mill (Liner/ Grate) Reclaim water Ball Mill Tailings

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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

TSX:CUM

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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

TSX:CUM

Page 8: Focused on Growing Production - Copper Mountain Mining ... · PDF filecompleted Feasibility Study, 2012 Forecasts and other ... SAG Mill (Liner/ Grate) Reclaim water Ball Mill Tailings

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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

TSX:CUM

Page 9: Focused on Growing Production - Copper Mountain Mining ... · PDF filecompleted Feasibility Study, 2012 Forecasts and other ... SAG Mill (Liner/ Grate) Reclaim water Ball Mill Tailings

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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

TSX:CUM

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Page 11: Focused on Growing Production - Copper Mountain Mining ... · PDF filecompleted Feasibility Study, 2012 Forecasts and other ... SAG Mill (Liner/ Grate) Reclaim water Ball Mill Tailings

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

TSX:CUM 11

** 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

Page 12: Focused on Growing Production - Copper Mountain Mining ... · PDF filecompleted Feasibility Study, 2012 Forecasts and other ... SAG Mill (Liner/ Grate) Reclaim water Ball Mill Tailings

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

12 TSX:CUM

Resolved

Resolved

Resolved

Drop tanks

Ball mill motors

Reclaim barge & water

Modified grate design

Resolved

Page 13: Focused on Growing Production - Copper Mountain Mining ... · PDF filecompleted Feasibility Study, 2012 Forecasts and other ... SAG Mill (Liner/ Grate) Reclaim water Ball Mill Tailings

13 TSX:CUM

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)

TSX:CUM

Page 15: Focused on Growing Production - Copper Mountain Mining ... · PDF filecompleted Feasibility Study, 2012 Forecasts and other ... SAG Mill (Liner/ Grate) Reclaim water Ball Mill Tailings

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

TSX:CUM 15

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

Page 16: Focused on Growing Production - Copper Mountain Mining ... · PDF filecompleted Feasibility Study, 2012 Forecasts and other ... SAG Mill (Liner/ Grate) Reclaim water Ball Mill Tailings

1

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

Page 17: Focused on Growing Production - Copper Mountain Mining ... · PDF filecompleted Feasibility Study, 2012 Forecasts and other ... SAG Mill (Liner/ Grate) Reclaim water Ball Mill Tailings

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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.

TSX:CUM

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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

TSX:CUM

Page 19: Focused on Growing Production - Copper Mountain Mining ... · PDF filecompleted Feasibility Study, 2012 Forecasts and other ... SAG Mill (Liner/ Grate) Reclaim water Ball Mill Tailings

0

20

40

60

80

100

22.1 Mlbs

56.6 Mlbs

30 Mlbs

90-100 Mlbs

35-40 Mlbs**

Q1&Q2

19

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

TSX:CUM

Page 20: Focused on Growing Production - Copper Mountain Mining ... · PDF filecompleted Feasibility Study, 2012 Forecasts and other ... SAG Mill (Liner/ Grate) Reclaim water Ball Mill Tailings

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

20 TSX:CUM

* Excludes non cash charges for FX changes and interest rate swap ** Net of precious metal credits

Page 21: Focused on Growing Production - Copper Mountain Mining ... · PDF filecompleted Feasibility Study, 2012 Forecasts and other ... SAG Mill (Liner/ Grate) Reclaim water Ball Mill Tailings

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

Page 23: Focused on Growing Production - Copper Mountain Mining ... · PDF filecompleted Feasibility Study, 2012 Forecasts and other ... SAG Mill (Liner/ Grate) Reclaim water Ball Mill Tailings

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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

Page 24: Focused on Growing Production - Copper Mountain Mining ... · PDF filecompleted Feasibility Study, 2012 Forecasts and other ... SAG Mill (Liner/ Grate) Reclaim water Ball Mill Tailings

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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

TSX:CUM

Page 25: Focused on Growing Production - Copper Mountain Mining ... · PDF filecompleted Feasibility Study, 2012 Forecasts and other ... SAG Mill (Liner/ Grate) Reclaim water Ball Mill Tailings

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

25 TSX:CUM

Page 26: Focused on Growing Production - Copper Mountain Mining ... · PDF filecompleted Feasibility Study, 2012 Forecasts and other ... SAG Mill (Liner/ Grate) Reclaim water Ball Mill Tailings

“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

TSX:CUM

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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

TSX:CUM

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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

TSX:CUM

Page 29: Focused on Growing Production - Copper Mountain Mining ... · PDF filecompleted Feasibility Study, 2012 Forecasts and other ... SAG Mill (Liner/ Grate) Reclaim water Ball Mill Tailings

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]

29 TSX:CUM

Page 30: Focused on Growing Production - Copper Mountain Mining ... · PDF filecompleted Feasibility Study, 2012 Forecasts and other ... SAG Mill (Liner/ Grate) Reclaim water Ball Mill Tailings

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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

TSX:CUM

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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

TSX:CUM