Primero corporate presentation january 2015 update final

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  • TSX P I NYSE PPP I

    CORPORATE UPDATE JANUARY 2015

  • TSX P I NYSE PPP I

    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 Company and reflect managements 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 Companys operations, including, without limitation, fluctuations in spot and forward markets for gold, silver and other metals, fluctuations in currency markets, changes in national and local governments in Mexico and the speculative nature of mineral exploration and development, risks associated with obtaining necessary exploitation and environmental licenses and permits, and the presence of laws that may impose restrictions on mining. A complete list of risk factors are described in the Companys annual information form and will be detailed from time to time in the Companys continuous disclosure, all of which are, or will be available, for review on SEDAR at www.sedar.com. This presentation uses the terms measured resources, indicated resources and inferred 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 (NI 43-101), 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 deposits in these categories will ever be converted in to reserves. In addition, inferred 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. 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 resource exists, or is economically or legally mineable. 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 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. Unless otherwise indicated, all dollar values herein are in US$.

    Cautionary Statement

    2

  • TSX P I NYSE PPP I 3

    Stable Platform for Growth OUR KEY FOCUS

    Producing in Americas Top Mining Jurisdictions

    Established Growth Profile from Assets in Production

    Disciplined Cost Management

    Experienced Board and Management

    Strong Financial Position

    Track Record of Delivering on Stakeholder Commitments

    Corporate Office (Toronto)

    Producing Mine Development Project Exploration Property

    Black Fox

    Grey Fox

    San Dimas

    Cerro Del Gallo

    Ventanas

  • TSX P I NYSE PPP I

    111

    143 161

    180 190

    215 64

    80

    100

    100

    2012 2013 2014 2015E 2016E 2017E

    Black Fox San Dimas 300-350

    250-270

    280-300

    Targeted Production Growth Profile (AuEq koz) 1,2

    4

    1. Strong balance sheet

    2. Measured growth

    3. Disciplined cost management

    4. Low-risk jurisdictions

    5. Responsible mining

    Operating in attractive mining jurisdictions with: Long mining history Stable Government Established permitting process

    Located in areas with: Existing infrastructure Skilled local workforce Suppliers Community support

    Established Organic Growth Profile FROM ASSETS IN PRODUCTION

    225

    *See final slide for footnotes.

  • TSX P I NYSE PPP I

    Increased Production by 57% in 2014

    2013 2014

    Gold equivalent production1 (gold equivalent ounces)

    143,114 225,100

    Gold production (ounces)

    111,983 190,000

    Silver production1 (million ounces)

    6.05 6.15

    All-in Sustaining Costs3 ($ per gold ounce)

    $1,077 $1,217

    Cash cost3 ($ per AuEq ounce)

    $599 $687

    5

    DISCIPLINED COST MANAGEMENT

    *See final slide for footnotes.

    0

    50,000

    100,000

    150,000

    200,000

    250,000

    2013 2014

    +57%

    Production (AuEq ounces)

  • TSX P I NYSE PPP I 6

    A Further 20% Production Growth in 2015

    2014 Black Fox San Dimas Outlook 2015

    Attributable gold equivalent production1 (gold equivalent ounces)

    225,100 75,000-85,000 175,000-185,000 250,000-270,000

    Gold Production (ounces) 190,000 75,000-85,000 145,000-155,000 220,000-240,000

    Silver Production1 (million ounces) 6.15 6.5-7.5 6.5-7.5

    Total cash costs3 (per gold equivalent ounce) $687 $820-$870 $590-$640 $650-$700

    All-in Sustaining Costs3 (per gold ounce) $1,217 $1,075-$1,125 $840-$890 $1,000-$1,100

    *See final slide for footnotes.

    2015 GUIDANCE

  • TSX P I NYSE PPP I 7

    Lower 2015 Capital Expenditures

    Capital Expenditures Estimated 2015 Costs

    San Dimas Underground Development $15.2 million

    San Dimas Sustaining Capital $10.8 million

    San Dimas Projects $15.4 million

    San Dimas Sub Total $41.4 million

    Black Fox Underground Development $13.4 million

    Black Fox Sustaining Capital $4.5 million

    Black Fox Projects $3.4 million

    Grey Fox Development Studies $1.3 million

    Black Fox Sub Total $22.6 million

    Cerro del Gallo Development $2.7 million

    Total $66.7 million

    2014 Capital Expenditure $80 million Note: Figures may not add due to rounding.

    2015 GUIDANCE

  • TSX P I NYSE PPP I 8

    Continuing to Invest in Exploration 2015 GUIDANCE

    Capitalized Exploration Expenditures Estimated 2015 Costs

    San Dimas Diamond Drilling $3.1 million

    San Dimas Drifting $1.9 million

    San Dimas Regional Diamond Drilling $0.9 million

    Ventanas Regional Diamond Drilling $0.5 million

    San Dimas Sub Total $6.4 million

    Black Fox Diamond Drilling $5.0 million

    Grey Fox & Regional Exploration $7.3 million

    Black Fox Complex Sub Total $12.3 million

    Cerro del Gallo Geology Mapping $0.4 million

    Total $19.1 million

    2014 Exploration $35 million

  • TSX P I NYSE PPP I

    Strong Financial Position

    Exchanges TSX: P NYSE: PPP

    Balance Sheet (September 30, 2014)

    Cash

    Line of Credit5

    Total Liquidity

    Convertible Debenture (6.5%, due March 2016, $14 conversion)

    Line of Credit Draw Down5 (Due May 2017)

    Total Debt4

    $22 million

    $45 million

    ~$67 million

    $48 million

    $30 million

    $78 million

    Capital Structure

    Common Shares Outstanding 6

    Fully Diluted 7

    Market Cap. At Jan 19, 2015

    160 million

    190 million

    C$895 million

    POSITIONED FOR GROWTH

    Source: 2014E-2016E Operating Cash Flow Capital IQ consensus CFPS multiplied by current 160 million shares outstanding.

    $67M

    STRONG Liquidity

    $78M4 PRUDENT Debt Level

    September 30, 2014

    Consensus Estimated Operating Cash Flow ($ millions)

    9

    $72 $79 $115

    $155

    $0

    $50

    $100

    $150

    $200

    2013 2014E 2015E 2016E

    *See final slide for footnotes.

  • TSX P I NYSE PPP I

    Experienced Board and Management

    10

    Joseph Conway | President & CEO 30 Years of Experience Appointed CEO in June 2010 Former CEO, President and Director of

    IAMGOLD and Repadre Capital

    Wendy Kaufman | CFO 20 Years of Experience Appointed CFO in September 2014 Former VP, Finance and Treasury of

    Inmet Mining Corp.

    Wade Nesmith | Chairman Founder of Primero Founding and current director of Silver

    Wheaton

    200+ Years of Combined Industry

    Experience

    Entrepreneurs

    BOARD OF DIRECTORS

    MANAGEMENT

    David Demers | Director 2,3,4,5 Founder, CEO and Director Westport

    Innovations Director of Cummins Westport and

    Juniper Engines

    Grant Edey | Director 3,5 President & CEO, Khan Resources Former Director of Breakwater Resources,

    Queenstake Resources, Santa Cruz Gold, CFO, IAMGOLD

    Rohan Hazelton | Director 1 VP, Strategy, Goldcorp Formerly with Wheaton River and

    Deloitte & Touche LLP

    Proven Track Record of Asset Turnaround

    Capital Markets Expertise

    Disciplined Approach to Business Development

    Eduardo Luna | Director 1 Former Chairman and CEO of Silver

    Wheaton, Executive VP of Goldcorp and Luismin (San Dimas)

    Former President of Mexican Mining Chamber

    Brad Marchant | Director 1 Co-founder of Triton Mining Corporation Founder of BioteQ Environmental

    Technologies Inc.

    Robert Quartermain | Director 2,3 Founder and President & CEO, Pretium

    Resources Former President of Silver Standard

    Resources

    Michael Riley | Director 2,5 Chartered accountant with more than 26

    years of accounting experience Chair of Primero Audit Committee

    Board Committees: 1. Health, Safety and Environment 2. Human Resources 3. Governance and Nominating 4. Lead Director 5. Audit

  • TSX P I NYSE PPP I

    1.9

    1.5

    1.1

    0

    0.5

    1

    1.5

    2

    2011 2012 2013

    Track Record of Delivering on Stakeholder Commitments

    Primero All Injury Frequency Rate SHAREHOLDERS

    Superior Value Creation

    ENVIRONMENT

    Certified Clean Industry

    COMMUNITY

    Awarded Socially Responsible Company

    SAFETY Lowering All Injury Frequency Rate

    11

    (100%)

    (40%)

    20%

    80%

    140%

    Primero Mining Corp. S&P/TSX Global Gold Index(Source Thomson One)

    Delivering Superior Returns to Primero Shareholders

    January 2012 to Present

  • TSX P I NYSE PPP I

    o Commence expansion to 3,000 TPD o Increase access to high-grade

    Victoria vein

    o Implement 7 day, 12-hour shifts to optimize mine throughput

    o Complete tunnels connecting Central Block to Sinaloa Graben, increasing efficiency and reducing costs

    Location Mine Type Ownership

    Durango, Mexico Underground, Gold & Silver

    100% (silver stream) 1

    Proven & Probable Gold Reserves (koz) (4.9M tonnes at 5.5 g/t)

    870

    Measured & Indicated Gold Resources (koz) (Inclusive of Reserves) (4.3M tonnes at 7.2 g/t)

    997

    Inferred Gold Resources (koz) (7.3M tonnes at 4.2 g/t)

    998

    2015E Production1 (AuEq koz) 175-185

    2015E Cash Costs3 ($/AuEq oz) $590-$640

    2014 2015 2016

    o 23% increase in gold reserve grade o Mill expansion to 2,500 TPD

    completed in Q1

    o Expanded top producing veins through successful exploration

    o Discovered new high-grade veins o Achieved record production of

    161,000 AuEq oz

    o Complete expansion to 3,000 TPD o Increase mined grade to current gold

    reserve grade of 5.5 g/t

    World Class Platform Asset

    12

    SAN DIMAS

    *See final slide for footnotes.

  • TSX P I NYSE PPP I

    -

    500

    1,000

    1,500

    2,000

    2,500

    3,000

    3,500

    Q3 2010 Q3 2012 Q3 2014 Q3 2016E

    *See final slide for footnotes.

    Expansion to 3,000 TPD SAN DIMAS

    Construction Mill expansion to 3,000 TPD began in Q1 2015 and is expected to be completed by Q2 2016

    Capital Cost Currently estimated at $26 million, including a 30% contingency After-tax IRR8 is expected to be 78% with a 12 month payback period9

    Production An estimated increase by more than 30% over 2014 to approximately 215,000 gold equivalent ounces

    Cash Cost Expected to drop by ~$50 per ounce from current levels

    89%

    GROWTH

    San Dimas Mill Throughput (TPD)

    13

  • TSX P I NYSE PPP I

    2015 Mine Expansion Plan

    14

    SAN DIMAS

    1600

    1800

    2000

    2200

    2400

    2600

    2800

    3000

    3200

    tpd

    Actual

    Forecast

    Mill Expansion

    Base Production

    Mine Production to 2,150 tpd

    Mine Production to 2,500 tpd

    Mill Expansion

    2011 2012 2013 2014 2015 2016

    Mine Production to

    2,900 tpd

  • TSX P I NYSE PPP I

    Proven History of Reserve & Resource Growth

    505

    660

    870

    577

    780

    997

    704

    762

    998

    2011 2012 2013

    P&P Reserves ( Au Koz)

    M&I Resources (Au Koz)

    Inferred Resources (Au Koz)

    (M&I Resources Include Mineral Reserves)

    See slides 27, 28, 29, & 30

    Significant Exploration Upside with Low Finding Costs o Completed 80,000 metres of drilling 2014, 2014 reserves and

    resources to be released in Q1 2015 o 2015: $6.4 million, 25,000 metres of drilling

    SAN DIMAS

    Low Finding Cost Per Ounce

    247 311

    $53.0 $34.7

    2012 2013

    P&P Reserves Discoverd (Koz Au)P&P Discovery Cost(US$/oz Au)

    15

  • TSX P I NYSE PPP I

    Note: Based on public data, average depth of listed mines is 1,633 metres.

    Established Jurisdiction with Proven Depth Potential Over 200 Million Ounces of Historical Production

    BLACK FOX

    16

  • TSX P I NYSE PPP I

    o Continue building underground long-hole stope inventory

    o Finalize mill and tailings optimization o Continue in-fill drilling of central

    zone

    o Goal of identifying resources to depth of 1,000 metres

    2014 2015 2016

    o Completed acquisition and integration of Black Fox Complex

    o Commenced optimization program, focused on cost reduction

    o Increased efforts on underground exploration and development

    o Discovered high-grade intercepts at depths up to 800 metres

    o Review the concept of sinking a shaft to access deep mineralization

    o Complete detailed economic analysis to potentially include Grey Fox as part of long term development at the Black Fox Complex

    Turnaround Opportunity to Create Value BLACK FOX

    Location Mine Type

    Ownership

    Timmins, Ontario Open-Pit & Underground, Gold

    100% (8% gold stream) 1

    Proven & Probable Gold Reserves (koz) (3.8M tonnes at 4.3 g/t)

    538

    Measured & Indicated Gold Resources (koz) (Inclusive of Reserves) (4.0M tonnes at 5.1 g/t)

    653

    Inferred Gold Resources (koz) (0.7M tonnes at 7.6 g/t)

    168

    2015E Production1 (AuEq koz) 75-85

    2015E Cash Costs3 ($/AuEq oz) $820-$870

    17 *See final slide for footnotes.

  • TSX P I NYSE PPP I

    Focused on Reserve & Resource Development Lateral & Depth Expansion

    BLACK FOX

    18

  • TSX P I NYSE PPP I

    Grey Fox Promising Exploration Project GREY FOX

    o Completed 76,000 metres of drilling in 2014.

    o Planned another 50,000 metres in 2015.

    o Positive exploration results announced to date from underground and open pit targets.

    o Further results pending. Location Ownership 4 km from Black Fox, Ontario 100% (no stream)

    Measured & Indicated...