may 2013 - western pacific resources · the deer trail mine (dtm) for $7 million over 2.5 years...

30
May 2013

Upload: others

Post on 21-Mar-2020

2 views

Category:

Documents


0 download

TRANSCRIPT

May 2013

Cautionary Statements Th is p r e s en ta t ion i s for i n for ma t ion a l p ur p o s es o n ly a n d do e s n ot c on s t i t ut e a n off e r to sel l or so l i c i ta t ion to b uy th e s e c ur i t i e s r efer r ed to h er ein . C er ta in s ta t em en ts con t a in e d h er e in , a s w el l a s or a l sta te m en t s th a t m a y b e ma d e b y W es t er n Pa c i f i c R eso u r c e s Cor p . (th e “ Co mp a n y” o r “ W es t er n Pa c i f i c” ) o r b y o ff i ce r s , d i r ec tor s o r e mp loye e s o f th e Co mp a n y a c t in g on i t s b eh a lf , th a t a r e n o t sta t e m en t s of h i stor i ca l fa ct , ma y con st i t ut e “ fo r wa r d- look in g sta t e m en t s” a n d a r e ma d e p ur s ua n t to a p p l ica b l e a n d r e l e va n t n a t ion a l l e g i s la t ion in co un tr i e s wh er e th e C omp a n y is con d u ct in g b u s in e s s a n d/or i n v e sto r r e la t ion s. F o r wa r d - loo k in g sta t e m en t s, in c l u d e, b ut a r e n o t l i m it e d to th os e w ith r esp e ct to th e p r i c e o f go l d, th e t i m in g a n d a mo un t o f es t ima t e d f u t ur e s uc c es s of ex p lor a t ion a ct i v i t i e s , th e Co mp a n y’s c ur r en cy f l uc t ua t ion s, r e q u ir e m en t s for a d d it ion a l ca p i ta l , a p p r ox i ma t e c a sh p os it ion , go v er n m en t r e g ula t ion o f m in in g op er a t i on s, a n d en v i r on men ta l r i sk . Of t en , b ut n ot a l wa ys, for wa r d- look in g s ta t e m e n ts ca n b e i d en t i f i e d b y th e us e of wo r ds s uch a s “ p la n s” , “ ex p e ct s” , “ do es n ot ex p ec t” , “ i s ex p e ct e d” , “ ta r g et s” , “ b u d g et” , “ es t ima t es” , “ fo r eca st s” , “ in t en d s” , “ a n t i c ip a t es” o r “ do es n o t a n t i c ip a t e” , o r “ b el i ev e s” , or e q u i va len t s or va r ia t ion , in c l u d i n g n e ga t i v e va r ia t ion , of s u c h wo r ds a n d p h r a se s, or sta t e th a t c er ta in a ct ion s , e ven ts o r r es ul ts , “ ma y ” , “ co ul d” , “ woul d” , “ m i gh t” or “ w i l l” b e ta k en , oc c ur o r b e a ch ie v e d on a c e r ta in t i m el in e. F or wa r d- lo ok in g sta t e m en t s in vol ve k n o wn a n d un k n own r i s k s , un ce r ta in t i e s a n d o th er f a ctor s th a t co ul d ca us e t h e a ct ua l r es ult s o f th e C omp a n y to b e ma t er ia l ly d i f f er en t fr o m th e h i sto r i ca l r e s ult s or f r om a n y f ut u r e r e s ult s ex p r e s se d o r i m p l i e d b y s uch for wa r d- loo k in g s ta t em en ts. S u ch r is k s a n d un c e r ta in t i e s in c l u d e, a mon g o th e r s, th e a va i l a b i l i ty of f un ds, th e f in a n c ia l p o s it ion of We st e r n Pa c i f i c , th e t i m in g a n d con t en t of wo r k p r o g r a ms, r e s ult s of ex p lo r a t ion a ct i v i t i e s a n d d ev elop m en t of m in er a l p r op er t i es , th e in t er p r eta t ion of dr i l l in g r e sul ts a n d oth er g eolo g i ca l da ta , th e un c er ta in t i es o f r e so ur c e a n d r es e r v e e st i ma t ion s i f i n c lu d e d, r e c e ip t a n d s e c ur i ty of m in er a l p r op er ty t i t l es ; p r o j e ct cos t o v er r un s or un a n t i c i p a te d co st s a n d ex p en s e s, f l uc t ua t ion s in me ta l p r i c e s; c ur r en cy f l u ct ua t io n s; a n d g en e r a l ma r k et a n d in d us tr y con d i t ion s. Th er e ca n b e n o a s s ur a n ce th a t fo r wa r d look in g s ta t e m en t s w i l l p r o v e to b e a cc u r a t e a s a c t ua l r e s ult s a n d fu t ur e e v en t s co ul d d i f fe r ma t er ia l ly f r o m th os e a n t i c ip a t e d in s u ch sta t e m en t s. Ex cep t a s ma y b e r eq u ir e d b y a p p l i ca b l e la w or sto ck ex ch a n g e r e gula t io n , th e Co mp a n y un d er ta k es n o ob l i ga t ion to u p da te p ub l ic ly or r e l ea s e a n y r e v i s ion s to th e se fo r w a r d-look in g sta t e m en t s to r ef l e ct e v en t s o r c i r c u ms ta n c es a ft e r th e da t e o f th i s p r e s en ta t ion or t o r ef l e ct th e o cc u r r en c e o f un a n t ic ip a te d even ts. Accor din gly , r ea der s sh ould n ot p la ce un due r e l ia n ce on for wa r d- look in g sta temen ts. THE C OMP AN Y HA S N O T E S TABL I SHED A M I N E R AL RE SO U R CE E ST I MA TE F O R T HE DEE R T RAI L MI N E N O R HA S I T MAD E A PRODUCTI ON DECI SI ON WI TH RESPECT TO SUCH PROJECT. Qu a l i f i ed P erson Un d e r th e t er m s of N I 4 3- 1 0 1 , C la n cy Wen d t , P.G eo. , i s W e st e r n Pa c i f i c ' s Qua l i f i e d P e r son , a n d h a s r e v ie w e d a n d a p p r ov e d th e tech n ica l d isc losu r e con ta in ed in th is p r esen ta t ion .

2

Management & Board Michael Callahan, President Mr. Callahan served as Vice President of Hecla and President of Hecla’s Venezuelan Operations from 2006 to 2009. Joining the company in 1989, he held various positions at the company including Vice President of Corporate Development. Between December 2009 and July 2012 he served as President of Silvermex Resources Ltd. (TSXV: SMR), until the company was acquired by First Majestic. Warwick Smith, CEO & Director Mr. Warwick Smith has worked as a corporate development specialist for various public companies since 1999, including investor relations for Fortuna Silver Mines and Northland Resources. Mr. Smith co-founded and provided corporate development services to Riverside Resources Inc. (TSXV: RRI) in 2007. After developing a team and securing financing, Riverside Resources was listed on the TSX Venture Exchange in August 2007. During his tenure Mr. Smith and the team at Riverside Resources successfully raised financing from numerous key strategic shareholders. Arthur Brown, Chairman & Director Mr. Brown served as CEO and Chairman of Hecla until retiring in 2006. During his 39 year tenure at Hecla he held many senior positions in operations, becoming the company’s President in 1986, and Chairman and CEO in 1987. Mr. Brown serves as a director on the board of AMCOL International Corporation (NYSE: ACO) where he also serves as a member of the audit and compensation committees. Mr. Brown is also a director of the Idaho Independent Bank. He is a former Director of the National Mining Association and served as a Director of The Gold Institute and The Silver Institute (Past President). Eric Saderholm, Vice President, Exploration & Director Mr. Saderholm has over 25 years of experience in the minerals industry with leadership in exploration, project development, property management and mining. He has been integral to geologic teams that added over 18 million ounces of gold to reserve bases in Nevada, Washington and Peru. Mr. Saderholm was Vice President, Project Development at US Gold from August 2006 until early 2008. Prior to that position, he was at Newmont Mining Corp for 12 years where his final position was Carlin Trend Exploration Manager, Regional Geologist. At Newmont, he also held the positions of Chief Geologist at the Phoenix Mine, Lone Tree Complex and Mule Canyon Mine, all located in Nevada as well as Project Manager, Grupo Carachugo, Peru.

Douglas Ford, CFO (CFO of Rockgate Capital, Rockridge Capital, Falkirk Resources) Ralph Rushton, Director (VP Corporate Dev. Radius Gold and Investor Relations Gold Group) Michael Williams, Director (Currently President of Full Metal Minerals, formerly Chairman of Underworld) Brent Cook, Advisor (Exploration Insights Newsletter and Mining Consultant) Ron Parratt, Advisor (Currently Executive Chairman of Renaissance Gold , formerly President/CEO of AuEx Ventures) Dr. James Beesley, Advisor (President of Transformative Ventures, Founder of Sequoia Partners)

3

Share Structure Share Structure

Shares Issued 29,096,128

Warrants 2,272,500 ($0.75)

Options 2,935,000 ($0.195-$0.57)

Fully Diluted 34,303,628

Cash & Trading Stats

Daily volume (last 3 mths) 106,000

52 week trading range $0.08 – 0.35

TSX-Venture: WRP.V OTC: WRPSF

4

• Western Pacific has signed an Acquisition Agreement to acquire 100% of the Deer Trail Mine (DTM) for $7 million over 2.5 years from Unico, Inc. (DTMC)

• Deer Trail is a permitted Mine with extensive infrastructure in place including a 250 tpd capacity flotation mill- three main areas include Upper Deer Trail Mine, 3400 (Lower Deer Trail Mine) and 8600 (Lower Deer Trail Mine)

• Deer Trail is located in Piute County, Utah, 5 miles SSW from Marysvale

• Targets include disseminated gold, high grade gold veins, mantos, skarn, & porphyry

• Vastly under-explored, under-drilled: upside from exploration potential on property, including a Moly-Porphyry target (several fluorite veins in Lower Mine, bi-modal volcanism as indicators)

• Western Pacific has an approx market cap of $0.155 X 29,096,128 shares= $4.5 million market cap

• Michael Callahan (President) and Arthur Brown (Chairman), former Hecla Mining and Silvermex Executives, joined Western Pacific in Feb 2013: Strong senior management team with the ability to raise capital, manage technical and engineering risks, and create shareholder value

Investment Case

5

• Pursuant to the Agreement, the Company will pay to Unico (DTMC) a total of $7 million (Canadian) over 2.5 years as follows:

– on closing, $1,825,000 in cash;

– on closing, the transfer of the Company’s Bombardier property, which the parties have assigned a value of $1,500,000;

– twelve months after closing, $2,000,000 subject to acceleration of payment if the mine is in commercial production; and

– thirty months after closing, $1,675,000 subject to acceleration of payment if the mine is in commercial production.

• The Company wil l retain a right of f irst refusal for 36 months after closing in respect of a

proposed sale of the Bombardier property by DTMC to a third party. If DTMC sells the Bombardier property after the 30th month following closing for less than $1,500,000, the Company wil l pay DTMC a “make whole” payment equal to the difference between the sale price and $1,500,000. The Company may elect to satisfy up to 25% of the total post-closing payments of $3,675,000 and 25% of any make whole payment in its common shares, where the number of shares wil l be calculated based on 85% of the twenty day volume weighted share price.

• The closing of the acquisition is subject to customary closing conditions, including the acceptance of the TSX Venture Exchange.

Deal Structure

6

Deer Trail Photos

7

8

Photo provided by Dreamcastar Video Productions

9

Location

Mining in Utah provided $3.5 billion to Utah’s economy in 2012, making the state’s mining industry the nation’s seventh largest

10

* Source: http://www.sltrib.com/sltrib/money/55789340-79/production-utah-billion-mineral.html.csp

Claim Map

All weather road access to Highway 89, major rail arteries within 75 miles, plus Interstate Highways 15 & 70 within 30 miles

11

• 3,275 acres includes 250 tpd flotation mill, extensive mining facilities (5.12 square miles)- 200 claims with 30 patented and 170 unpatented- mill produced at a rate of 100-130 tpd in 2008

• Historic production dates back to the late 1800’s with grades as high as

– 1.38 opt Au – 15 opt Ag – 12% Zn, 5% Pb, 0.6% Cu

(Refer to Sl ide 21 for tonnage and grade)

Introduction to the Deer Trail Mine, Utah

• Deer Trail consists of polymetallic mineralization with silver, gold, copper, lead and zinc payables. (Tellurium also documented through sampling)

• Located in Central Utah- 5 miles SSW of Marysvale at the eastern base of the Tushar Mountains- 165 miles SSW from Salt Lake City

• Large Scale Mining permit issued by Utah Div. of Oil, Gas & Minerals

*non NI 43-101 12

• Both ownership of and leasehold interests in significant water rights

• Excellent access to interstate highways and major rail arteries- all weather road to US Hwy 89, Interstate 70 & 15 within 30 miles from mine- Major railroad 75 miles from site

• Regional Supply and service center half hour from property

• NSR royalty due to Crown Mines (5% on gold and 3% on all other minerals and hydrocarbons)

Introduction Cont.

• Mill complex (250 tpd flotation mill and crusher) and fully equipped laboratory built in early part of 2000’s

• Developed network of timbered and ventilated tunnels with shafts and tracks for ore cars extends more than five miles

13

Upper Mine Lower Mine

Mill

Schematic Model of Carbonate Replacement Deposits (CRD)

14

If DTM is following the model, general location of discovery zone at the above

• Property includes mine dumps and tailings

• Permits, water rights (year round water supply) and infrastructure in place

– Flotation Mill (250 tpd) – Crusher – General Office – Assay Lab and Core

Sampling Facil ity – Substation on regional

electric grid – Two battery locomotives

and thirteen 1.5-ton ore cars

– An engine storage and charging house

– Miners locker room – Compressor building – Portable dril l – Two front end loaders – Three dump trucks

Infrastructure

15

Infrastructure- Mill, Lab and Offices

16

Sample Prep

Ore Bins Mill & Offices

Thickener & Cyanide Circuit

17

Infrastructure- Mill, Cyanide Circuit and Stockpiles

Thickener & Cyanide Circuit

Offices

Mill

Ore Bins

Infrastructure- Lower Mine Complex

18

Offices Miners’ Dry

Mine Portal (PTH) & Lamp Room

Compressor Shed

Locomotive House

Tipple

250 tpd Flotation Mill

19

Production History

Source: Unico Inc Annual Report Feb 28, 2010

• In 1945 the PTH Tunnel was started to explore for the faulted extension of the Deer Trail mineralized body. The 3,400 mineralized body was discovered and a total of 5,000 tons averaging 0.19 opt Au, 15.17 opt Ag, 6.26% Zn, 2.84% Pb & 0.76% Cu were shipped

• By 1964 the PTH Tunnel intersected the offset part of the Deer Trail mineralized body and between 1964 and 1981 this 8,600 Area produced 100,000 tons of unoxidized sulphide materials averaging 0.10 opt Au, 15 opt Ag, 12% Zn, 5% Pb & 0.6% Cu

• The PTH Tunnel travels over 10,000 feet with a developed network of tunnels, shafts and raises, and was mined extensively for Au and Ag for 2o years

Mine Area Period Tonnage Au Ag Zn Pb Cu

Upper Mine 1918 1923 138,000 1.380 opt 11.49 opt NA 3.26% NA

3,400 Area (Lower Mine) 1945 1962 12,226 of 25,600

0.171 opt 11.61 opt 7.45% 2.96% 0.52%

8,600 Area (Lower Mine) 1964 1980 100,000 0.100 opt 15.00 opt 12.00% 5.00% 0.60%

Summary of the Most Productive Periods of the Upper/Lower Deer Trail Mine

20

Assay Lab

21

Underground Development

Upper Deer Trail

6,000 ft of development

Lower Deer Trail (3,400 Area)

5,000 ft of development

Lower Deer Trail (8,600 Area)

10,000 ft of development

22

3,400 Area Sample

Semi-oxidized Callville Limestone-hosted Mineralization

23

8,600 Area Samples

Samples from Massive Manto

Sulphide Portion of Toroweap Sandstone-hosted Mineralization

24

• Targets include disseminated gold, high grade gold veins, stock dykes, mantos, skarn, and mineralization

– Au, Ag, Cu, Mo, Pb, Zn, and possibly Te and Ir

– More than 20 Ag/Au-rich poly-metallic mantos several inches to five feet thick in Pennsylvanian Callville Formation

– Historically prolific Mississippian Redwall Limestone underlies Callville Formation & is virtually unexplored

• Tellurium (Te) and indium (Ir) potential

– Tellurium is an extremely rare element and a key component of cadmium-telluride photovoltaic cells

– Indium is a very high-unit value element used in high-demand computer and television flat-panel LCD displays

Targets and Geology

25

Targets and Geology Disseminated Gold, High Grade Gold Veins, Mantos, Skarn?

Stacked Mantos, Massive Skarn

Mantos Extensions & Stacked Mantos

Stock Dike Contact Skarns

26

No systematic exploration above Upper Mine Manto

3,400 intersected while driving level to Lower Manto in 8,600 area- no

systematic exploration at depth

Additional prospective units lie down section from the Callville host of the 3,400 Manto

Target Areas

Exploration and Development Potential

Mantos Open at Depth

27

• Eventual expansion of mill beyond 250 tpd

• Potential to expand current known mineralization in Upper and Lower Mines through underground and surface drilling

• Planned sampling and exploration of old tailings material

• Potential target 800-2,000 ft below historic mine area for Mississippian Redwall Limestone Mineralization- Mississippian of Western US hosts many 5-40 million ton Ag-Au rich polymetallic mantos

• Possible large Moly- Porphyry target as indicated by alteration patterns, geochemistry and structural features

• Range-front gold and silver targets including the “Close-In” alunite zone

Exploration and Development Potential

28

• Deer Hunters discovered the property through outcrop in 1878

• 1878-1917 10,000 tons of material were mined

• 1918 a small mill was installed and between 1918-1923 138,000 tons of predominantly oxide material averaging 1.38 ounces per ton gold, 11.49 ounces per ton silver and 3.26% lead was mined- over 200,000 Au oz and 1.5 million Ag oz were produced from primarily oxide mineralization

Deer Trail Mine History

• Mining Activity was almost continuous from the turn of the century to 1981, with stoppage due to a lack of mill and smelter recipients (Miners had undertaken to “follow the mineralization”)

• More recent production ceased due to prolonged depressed metal prices and general mis-management

• Previously explored by Arundel Mining, Noranda, Goldfields, Phelps Dodge, Battle Mountain Gold and Cominco American

29

1450 -701 W Georgia Street

Vancouver, B.C.

Canada V7Y 1G5

Phone: 1-877-689-7411

Contact Details

For more information please contact

CEO Warwick Smith

[email protected]

or

Investor Relations Erin Ostrom [email protected] 604-692-2891

Rob Gamley (Contact Financial) 1-877-689-7411

30