Investor Presentation June 2011
TSX: DPM
Investor Presentation June 2011 FORWARD LOOKING STATEMENTS This - - PowerPoint PPT Presentation
TSX: DPM Investor Presentation June 2011 FORWARD LOOKING STATEMENTS This presentation contains forward -looking information or "forward-looking statements" that involve a number of risks and uncertainties. Forward-looking
TSX: DPM
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This presentation contains “forward-looking information” or "forward-looking statements" that involve a number of risks and
the future prices of gold and other metals, the estimation of mineral reserves and resources, the realization of mineral estimates, the timing and amount of estimated future production, costs of production, capital expenditures, costs and timing of the development of new deposits, success of exploration activities, permitting time lines, currency fluctuations, requirements for additional capital, government regulation of mining operations, environmental risks, unanticipated reclamation expenses, title disputes or claims, limitations on insurance coverage and timing and possible outcome of pending litigation. Often, but not always, forward-looking statements can be identified by the use of words such as “plans”, “expects”, or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates”, or “does not anticipate”, or “believes”, or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved. Forward-looking statements are based on the opinions and estimates of management as of the date such statements are made, and they involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any other future results, performance or achievements expressed or implied by the forward- looking statements. Such factors include, among others: the actual results of current exploration activities; actual results of current reclamation activities; conclusions of economic evaluations; changes in project parameters as plans continue to be refined; future prices of gold; possible variations in ore grade or recovery rates; failure of plant, equipment or processes to operate as anticipated; accidents, labour disputes and other risks of the mining industry; delays in obtaining governmental approvals or financing or in the completion of development or construction activities, fluctuations in metal prices, as well as those risk factors discussed or referred to in this news release under and in the Company‟s annual information form under the heading "Risk Factors" and other documents filed from time to time with the securities regulatory authorities in all provinces and territories of Canada and available at www.sedar.com. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be anticipated, estimated or intended. 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 anticipated in such statements. Accordingly, readers are cautioned not to place undue reliance on forward-looking statements.
Market Cap @ June 23, 2011 (fully diluted) Fully Diluted/Cash on Dilution Shares Issued DPM – TSX @ June 23, 2011
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At March 31, 2011
Cash and Short-Term Investments:
(includes $48.4M cash and cash equivalent for Avala Resources)
$140.5M Plus Restricted Cash: $30.2M Plus Strategic Investments (@ June 23, 2011): $~400M Total Debt *: $86M Debt to Total Capitalization: 9% Top 5 Institutional Shareholders: <50% C$ 7.73 125M C$1.1 B
Analyst Coverage BMO John Hayes Cormark Securities Mike Kozak Dundee Securities Paul Burchell RBC Capital Markets Stephen Walker Stifel, Nicolaus & Co. Josh Wolfson Union Securities Brian Mok
150M/C$78M
All monetary figures are expressed in U.S. dollars unless otherwise stated
* Includes $14.5M project financing through Raiffeisenbank
Deno Open Pit Potential Krumovgrad Deno Underground Chelopech
~100,000oz 2010 ~125,000oz 2011 2014 (E) + 250,000 oz
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* Cash cost of sales/oz gold (net of by product credits). Reconciliation included in Appendices DPM Ownership 100% Location Bulgaria Acquisition Date
Resources Measured & Indicated (at Sept. 2010) Gold (oz) (4.1 g/t) 3,770,000 Copper (lbs) (1.4% Cu) 880,900,000 Reserves (at Jan. 2011) Gold (oz) (4.0 g/t) 2,600,000 Copper (lbs) (1.3% Cu) 590,000,000 Mine Type Underground Deposit Type High sulphidation epithermal deposit Estimated Mine Life @ expanded rate 10 + yrs
100 200 300 400 30 60 90 2008 2009 2010 2011
Ounces (000’s) Cash Cost * (Gold $US/oz)
71.4 88.4 65.5
5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 2008 2009 2010 2011
Pounds (000’s)
Gold Production Copper Production
19.9M 27.5M 26.2M $309 $369 92.0 35.5M $210
(E) (E)
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Expansion of mine/mill production capacity from 1 MT
Status
Construction Commissioning
modernization & upgrade of the existing concentrator Commissioning
conveying system Hard Rock Tunneling Completion
Ongoing
69% July 2012
Tunneling works in progress from 4 headings 69% of required 4,295 m of hard rock tunneling completed as of March 31, 2011 Engineering of ore passes, transfer stations, crushing station, mechanical, electrical and instrumentation is underway Completion – July 2012
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Vyara Portal Construction
Haulage to the dump Hoisting Dump and wagon loading 735 m asl 100 m asl Crusher is located 585 m below surface
Underground Crusher design
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Expansion cost/tonne
Total ore processed in 2010 1,000,781 tonnes Cash cost/tonne (excl. royalties) in 2010 $51.54 Expanded ore production rate 2 million tonnes per year Savings from: Economies of Scale ~ $12.48 Crushing and Conveying ~ $6.00 Other (SAG mill etc.) ~ $3.13 Feasibility study cost/tonne at 2 mtpy $29.93*
* Based on March 24, 2011 Technical report for the Chelopech Project. Exchange rate of US$1.35/Euro, US$900/oz Au, US$2.50/lb Cu and US$17/oz Ag.
913 901 981 1,300
$0.00 $10.00 $20.00 $30.00 $40.00 $50.00 $60.00 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000
Tonnes ore processed per year (000’s) Ore Processed and Cost/Tonne Cost/tonne ($US) (Excluding royalties)
2007 2008 2009 2010 1,001 2011 (E)
245,965 m of drilling since August 2003 Introduction of strategy and advanced technology Discovery of Blocks 145 and 147 in 2009 Discovery of Targets 181 & 182 and Block 152 in 2010 Discovery of Target 144 in early 2011
Near mine
confirmation of recent discoveries and targets
Greenfields
Vast Potential
system
the SW
Green fields exploration targets:
drilling & DHEM survey then move west of 151
Near Mine Exploration Targets
discoveries into reserves
new orebodies (149 style, low tonnes, high grade) along strike
144 discovered in Q1
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150 149 147 145 151 19
Plan view of ore bodies and structure
T181 & 182 18 16 103
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Casting blister Moulds of blister copper Blister copper bars
Other El Brocal Chelopech
56,000 T
Total = ~120,000 T
50,000 T 13,000 T
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Expected 2011 tonnage 170,000 – 190,000 T Improved production Addressed reliability and maintenance needs Completion of emissions and expansion study Project 2012 implementation
Emissions controls
systems
Improved environmental performance Smelting rate of 240,000 tpy Lower costs Commitments met to Government and community
Production expansions
reverb converted to holding furnace
Costs
2009 2011E 2010 2012E + O2 Chelopech con Third party con Tonnes 50,000 100,000 150,000 200,000 250,000
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2011
appeal
DPM Ownership 100% Location Bulgaria Proposed Mine Type Open Pit Gold Recoveries 85% Minimum concentrate grade 200 g/t Yearly ore tonnage production 850,000 tpy Life of mine Au production 850,000 – 900,000 oz Estimated Mine Life 8 – 9 yrs Estimated capital cost US$125M to US$140M Deposit Type Low-sulphidation epithermal Au/Ag deposit
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Low strip open pit (2:1) Reduced Footprint
300 ha original plan
tailings and mine waste facility
Conventional crushing, grinding and flotation processing One land owner
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DPM Ownership 100% Location Armenia Acquisition Date August 2006 Cash Cost 2 2008 $US/tonne $109.40 2009 $US/tonne $72.27 2010 $US/tonne $66.33 Mine Type Underground Deposit Type Polymetallic vein deposit
10 20 30 200820092010 2011 1,000 2,000 3,000
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100 200 300 400 500 600 5,000 10,000 15,000 20,000 Ounces (000’s) Pounds (000’s)
Gold Production Copper Production Silver Production Zinc Production
Ounces (000’s) Pounds (000’s)
1 1 1
12.2 1,999 29.2 14.8 296 2,890 1,527 527 290 19,089 9,166 8,833
Mine Production increased 55% Copper concentrate increased 39% Zinc concentrate increased 19% Completed Mine & Mill Expansion to 600k tonnes per year in Q4 2010
33 3,500 23,000 530
(E)
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285,000 metres of drilling completed An intensive drilling program designed to determine the bulk mineable open pit potential of the Shahumyan deposit Scoping study complete by end of 2011
Cutoff (AuEq - g/t) Tonnage (Mt) Gold Equiv. (g/t) Copper (%) Gold (g/t) Silver (g/t) Zinc (%) 0.50 335.8 1.19 0.11 0.48 8.39 0.41 0.75 226.5 1.47 0.13 0.61 10.32 0.49 1.00 147.1 1.80 0.15 0.79 12.62 0.57 1.25 98.3 2.14 0.17 0.99 14.99 0.65 1.50 69.8 2.45 0.18 1.19 17.00 0.72 1.75 49.2 2.80 0.19 1.43 19.14 0.78 2.00 36.3 3.13 0.19 1.68 20.87 0.83
Shahumyan Deposit – September 2008 Inferred Mineral Resource – Ordinary Kriging Estimate
10mE x 10mN x 10mRL Block Size – 5m Capped Input Composite Data Note: AuEq US$ price assumptions: Cu $5,511.6/t ($2.50/lb), Au $850/oz, Ag $16/oz and Zn $2,204.6/t ($1.00/lb).
Vein 5 Adit 11 Maxims Village
Copper Occurrences (Red Diamond) Polymetallic Occurrences (Blue Half Circle) Strong Conductors (Red Hatch) Kapan Exploration License (Black/Red Outline) Shahumyan Polymetallic Deposit Conductive anomaly 21
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Securities Holdings % Held Value @ June 23, 2011 Sabina Gold & Silver Corp. (TSX:SBB) 18.5M 11.6% $113M Special Warrants 10M $61M Warrants (strike C$1.07) 5M $25M Total SBB $199M Avala Resources Ltd. (TSX-V:AVZ) 110M 51% $127M Special Rights 50M $58M Total AVZ $185M Dunav Resources Ltd. (TSX-V:DNV) (formerly Queensland Minerals Ltd.) 40M – 60M ~ 47.5%
(on completion of earn-in)
$24 - $36M
Total shares and other securities ~$400M
100 200 300 400 500 2009 2010 2011 Value of portfolio ($millions)
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2011 Estimated Annual Gold Production (oz) Market Cap (US$) @ June 23, 2011
* 500,000 oz per year once production commences. Production start date not disclosed.
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Jonathan Goodman, President & CEO Hume Kyle, EVP and CFO Rick Howes, EVP and COO Adrian Goldstone, EVP, Sustainable Business Development Iliya Garkov, VP & GM Deno Gold Simon Meik, VP Processing Craig Barker, Director Exploration & Resource/Reserve Estimation Nikolay Hristov, VP & GM, Chelopech Mine P.Eng., MBA and CFA with over 25 years in the resource sector as a geologist, senior analyst, portfolio manager and senior executive. P.Eng. With over 30 years in the mining sector, previously with Inco Vale. Joined DPM in 2009. M.Sc. with over 20 years in the minerals sector. Recognized internationally as a water management and cyanide use expert in the minerals industry. Joined DPM in 2006. C.A. and C.F.A with over 25 years experience in strategic planning, M&A, financial planning and reporting, taxation, treasure and risk
Ph.D. Mining of Minerals with over 17 years experience with Chelopech Mining EAD. Ph.D. with > 30 yrs in many aspects of the mineral processing industry, in both project engineering and operations. Joined DPM in 2003. Geologist with <15 years experience in the exploration and mining industry and extensive international experience. Joined DPM in 2007. Ph.D. mineral processing with extensive experience in research and development. Joined Chelopech Mining EAD in 2004. Hans Nolte, VP & GM Namibia Custom Smelter Chemical engineer with over 25 yrs in the mining sector, specifically as a metallurgist in the smelting industry. Joined DPM in early 2010. Jeremy Cooper, VP, Commercial Affairs Corporate and commercial financier with over 20 yrs investment banking experience. Joined DPM in 2003.
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852 953 913 901 981
2005 2006 2007 2008 2009 2010
57 71 75 71 88 66
2005 2006 2007 2008 2009 2010
2005 2006 2007 2008 2009 2010
(000’ tonnes per year)
2005 2006 2007 2008 2009 2010
(lbs in millions)
1,000
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Chelopech Mineral Reserves – January 1, 2011 Category Tonnes (M) Gold Copper Grade (g/t) Ounces (M) Grade (%) Pounds (M) Proven 14.59 3.66 1.72 1.37 450 Probable 6.26 4.37 0.88 1.04 144 Total 20.85 3.87 2.60 1.27 583 Chelopech Mineral Resources – Sept. 2010 Category Tonnes (M) Gold Copper Silver Grade (g/t) Ounces (M) Grade (%) Pounds (M) Grade (g/t) Ounces (M) Measured 15.84 4.2 2.14 1.6 558.7 10.9 5.55 Indicated 12.70 4.0 1.63 1.1 307.9 7.2 2.94 M&I 28.54 4.1 3.77 1.4 866.6 9.1 8.49 Inferred 8.10 2.9 0.76 0.9 160.7 10.3 2.68
3.2g/t AuEq Cut-Off Grade; Cut-off Grade AuEq formula: Au (g/t) + 2.5 x Cu (%). Mineral Resources are inclusive of Mineral Reserves.
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US$ Year 2010 Actual Year 2009 Actual Year 2008 Actual Cost of Sales: $72,579 $ 74,499 $ 67,245 Less amortization (12,960) (12,401) (9,811) Less reclamation and other costs (1,337) (1,841) (2,155) Plus other charges, including freight 41,234 38,317 26,006 Less by-product credits (87,320) (64,198) (59,376) Cash cost of sales after by-product credits $12,196 $34,376 $ 21,909 Gold oz (payable metal) 58,065 93,081 70,878 Cash cost of sales/oz gold, (net of by-product credits) $2103 $ 3691 $ 3092
1Based on US$2.34/lb copper 2Based on US$3.16/lb copper 3Based on US$3.42/lb copper
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Significant Intercept Results Received in Q1 2011 Hole_ID From (m) To (m) Interval (m) Cu (%) Au (g/t) EXT 145_260_23 327.0 337.5 10.5 0.88 2.83 EXT145_260_24 171.0 175.5 4.5 0.86 5.29 EXT145_260_24 313.5 313.5 12.0 0.69 7.50 EXT149_225_10 96.0 100.5 4.5 1.56 3.12 EXT149_225_11 103.5 108.0 4.5 4.69 6.39 G150_225_07 94.0 117.0 23.0 0.41 9.91 G150_225_08 75.0 120.0 45.0 0.23 4.70 G150_225_09 181.5 208.5 27.0 0.96 13.38 G150_225_09 79.5 121.5 42.0 0.22 5.34 G150_225_09 197.1 246.0 48.9 0.49 12.09 G150_225_10 165.0 193.5 28.5 0.69 7.33 G150_225_11 91.5 129.0 37.5 0.19 7.00 G150_225_12 94.5 142.5 48.0 0.46 4.44 G150_225_13 93.0 141.0 48.0 0.24 6.04
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US$ thousands, unless otherwise indicated
For the periods ended Year 2010 Actual Year 2009 Actual Year 2008 Actual Ore processed (mt) 428,865 218,235 269,033 Cost of sales (US$) $ 32,743 $ 21,072 $ 36,319 Add (deduct): Amortization (5,374) (3,170) (2,560) Reclamation costs and other (788) (752) (1,108) Care and maintenance costs
(1,732) Change in concentrate inventory 3,572 1,696 (1,485) Total cash cost of production (US$) $ 30,153 $ 15,772 $ 29,434 Cash cost per tonne of ore processed (US$) (royalties not applicable in 2009) $ 70.31 $ 72.27 $ 109.40 Cash cost per tonne of ore processed, excluding royalties (US$) $ 66.33 $
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Sourced from “Krumovgrad Gold Project – Ada Tepe Deposit Definitive Feasibility Study Technical Report”, Amended and Restated January 7, 2007