corporate presentation may 2011 - geologix filecorporate presentation ... apr‐10 may‐10 jun‐10...
TRANSCRIPT
CORPORATE PRESENTATION | May 2011
Growth ThroughAcquisition, Exploration
and Development
Company Overview
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Developing and expanding a gold‐copper resource in Mexico with robust assessed economics and
significant exploration upside. Prefeasibility programs underway and production
targeted by 2014.
Shares Outstanding 132.3 MOptions 9.0 MWarrants 4.1 M(3.5M @ $0.30 to 8/11), (300K @ $0.35 to 10/11), (316K @ $0.30 to 3/12)
Fully Diluted 145.4 MCash (Approximate March 30, 2011) CDN $20.0 MFully Diluted Market Cap CDN $70.0 MRecent Share Price $0.48Debt Nil
Share Structure
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Share Price Performance
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‐100%
‐50%
0%
50%
100%
150%
200%
250%
300%
350%
Apr‐10 May‐10 Jun‐10 Jul‐10 Aug‐10 Sep‐10 Oct‐10 Nov‐10 Dec‐10 Jan‐11 Feb‐11 Mar‐11 Apr‐11
Geologix 12 Month Stock Price Performance
Geologix
TSX
TSX‐ Venture
DOW
Acquired Rights to Tepal Property (March 2010)
Acquired Rights to Tepal Property (March 2010)
Company Asset Overview
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NEVADA JV
PERU JV
TEPAL GOLD‐COPPER PROJECT
TEPAL GOLD‐COPPER PROJECT
Primary Focus: Mexico
Advancing to Prefeasibility
Category Tonnes (M)
Goldg/t
Copper %
Gold Oz. (M)
Copper lbs (M)
Au Oz. Equiv* (M)
Indicated 57.8 0.42 0.24 0.80 311.1 1.70Inferred 93.2 0.28 0.20 0.80 414.8 2.10
2011 Tepal Resource:
SecondaryMexico:
Libertad: Au, Ag ‐ Option(New GIX discovery target)
Peru:La Joya: Au, Cu, Zn, Pb ‐ JV (Glencore drilling Q1 ‐2011)
Nevada:RO: Au, Ag ‐ JV (drilling 2011)
Silver Cloud Au‐Ag(available for option)
Gold equivalent used in this presentation is estimated using 2011 PA Base Case of $1000/oz. Au, $16/oz. Silver and $2.75 Cu metal prices: (Ag oz.* $16)/$1000 = gold oz., (Cu lbs* $2.75)/$1000 = gold oz. It must be noted that the ounces gold equivalent does not represent actual ounces of gold in the mine plan, but rather their calculated equivalent value.
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Board of Directors & AdvisorsGraham Thody, CAChairman, Director
25 years industry experience.Currently serves as President & CEO of UEX Corporation, Director of Baja Mining.
Dunham Craig, B.Sc., P.Geo.President , CEO, Director
20 years industry experience; discovery through development & production.Cominco, Wheaton River (VP Corp Dev.), Glencairn (VP Corp Dev.)Development of 2 operating mines through BFS and production.
Randy Smallwood, B.Sc., P.EngDirector
President & CEO of Silver Wheaton Corp.20 years experience, with specific experience in mine development and operations.Gold Corp, TeckCominco, Homestake , Westmin Resources, Wheaton River Minerals.
George Brack, B.Sc., MBA, CFADirector
25 years experience investment banking, corporate development, M&A.Prior President of Macquarie North America, Managing Director Mining Group Scotia Capital.
Mauricio Candiani, MBADirector
President & CEO of Candiani Mining, previous Federal Congressman in Mexico.Extensive background in Latin American divesture deals, equity and M&A transactions.Previous Advisor to Southern Copper, Endeavour Silver, La Camera, and Mitsui.
Eduardo Luna, MBAAdvisor to the Board
Executive Vice President & President, Mexico of Primero Mining.Prior President GoldcorpMexico, Prior President Luismin Mining Mexico.
Robert Willis, P.Eng.Advisor to the Board
Chairman & CEO, San Marcos Mining, Past Director, President, and Chairman , Geologix, Prior President and CEO of Manhattan Minerals Corp., Prior President and CEO of Pioneer Metals Corp.
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Technical Team – Full Time Employees
Siegfried (Sig) Weidner, B.Sc.VP Exploration
25 years experience, including 18 years at Rio Algom/Billiton/BHP Billiton with extensive experience throughout the Americas.Lead the team responsible for the discovery of BHP’s Spence Porphyry Copper deposit in Chile and awarded PDAC Prospector of the Year award in 1998.Previous BHP Exploration Manager, North America & Europe.
Steven McRoberts, M.Sc., P.Geo.VP Corporate Development
25 years experience, including 17 years at Teck/Teck Cominco focused in the Americas, Australia and Asia.Former member of Teck’s Advanced Projects Team, world wide.Former Manager of Hecla Mining’s Project Generation Group, responsible for technical evaluation and economic modeling of feasibility to production stage projects.
Faysal Rodriguez, M.Sc., L. EngManager, Mexico
15 years in the mining industry. A Mexican national.Responsible for permitting Glamis Gold’s El Sauzal Project (Mexico), and Agnico‐Eagle’s, Pinos Altos Project (Mexico). Strong background in Mexican project permitting, mining and community relations.
Tepal Project Strategy
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• Acquire a resource‐stage project• Indicate it is economically viable• Explore to make it bigger• Advance toward production
TEPAL PROJECT | MICHOACÁN, MEXICO2011 PEA Summary (SRK Consulting Canada Ltd.)
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2011 PEA HighlightsBase Case ($1000 Au, $2.75 Cu, $16 Ag)
$749 M net positive earnings EBITDA1
3.48 M ounces gold equivalent2 in mine plan
1.14 to 1.0 Strip Ratio life of mine (“LOM”)
‐$303 per ounce gold cash cost net of byproduct credits
$312 M Capital Cost
18.1 year mine life
4.1 years to payback
96% of current resource converts to PEA mine plan
1 EBITDA: earnings before interest, taxes & depreciation allowance2 Gold equivalent used in this presentation is estimated using 2011 PA Base Case of $1000/oz. Au, $16/oz. Silver and $2.75 Cu metal
prices: (Ag oz.* $16)/$1000 = gold oz., (Cu lbs* $2.75)/$1000 = gold oz. It must be noted that the ounces gold equivalent does not represent actual ounces of gold in the mine plan, but rather their calculated equivalent value.
TEPAL PROJECT | MICHOACÁN, MEXICO2011 PEA Summary (SRK Consulting)
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2011 Base Case Average Operating Cost on a Co‐Product Basis
OPEX per Au equivalent $/oz. Eq. Au payable (2.4 M oz.) $478
2011 Base Case Average Cash Cost on a By‐Product Basis
OPEX Cash Cost Au/oz. $/oz. Eq. Au payable (977,000 oz.) ‐ $303
Gold Producers: Total Cash Costs*
Ranking 2010E
Senior Producer Avg. $553
Intermediate Producer Avg. $542
Junior Producer Avg. $702 *Source: BMO Capital Markets, Bloomberg – January 2011
2011 PEA Capital Costs
Initial Capital (pre‐full production) $312
TEPAL PROJECT | MICHOACÁN, MEXICOTEPAL PROJECT – OVER THE HURDLE
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PROJECT DEVELOPMENT MILESTONE HURDLES
Target Ratio Tepal
NET CASH FLOW (AFTER PAYBACK) TO CAPEX RATIO 2 : 1 $749M : $312M
CASH COSTS TO SALE PRICE RATIO (Au equiv.) 2 : 1 $1000/oz. : $478/oz.
PAYABLE PRODUCTION (Au equiv.) 2.44 M oz.
Gold equivalent used in this presentation is estimated using 2011 PA Base Case of $1000/oz. Au, $16/oz. Silver and $2.75 Cu metal prices: (Ag oz.* $16)/$1000 = gold oz.,(Cu lbs* $2.75)/$1000 = gold oz. It must be noted that the ounces gold equivalent does not represent actual ounces of gold in the mine plan, but rather their calculated equivalent value.
TEPAL PROJECT | MICHOACÁN, MEXICOProject 2011 NPV & Value
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Metal Price Sensitivity
Tepal PEA ($ Millions) $900 Au$16 Ag $2.75 Cu
Base Case$1000 Au $16 Ag$2.75 Cu
$1200 Au$16 Ag$3.50 Cu
Project NPV (0% Discount Rate)Project NPV (5% Discount Rate)
$653 M$347 M
$749 M$412 M
$1,320 M$786 M
Project IRR 20% 22% 34%
Discounted $NPV vs Fully Diluted SharesDiscounted $NPV / GIX Shares (FD) $2.38/share $2.83/share $5.40/share
TEPAL PROJECT | MICHOACÁN, MEXICOTepal Payable Production & Pro‐forma
‐
50,000
100,000
150,000
200,000
250,000
300,000
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Payable Prod
uctio
n Au
oz. Equ
iv Pro‐forma: 35,000 tpd/11 years
Average > 200,000 oz/y Au eq.
Current PEA: 23,000 tpd rate/18 yearsAverage > 134,000 oz/y Au eq.
Exploration Continuing
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Payback
TEPAL PROJECT | MICHOACÁN, MEXICOComparables on Gold Only – Gold Ounces vs. Cash Costs
$418$543
$254
$504
‐$303
$407
582 579
830 850977
1,356
‐$400
‐$200
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
Esperanza Amarillo Kimber Grayd Geologix Mansfield
NPV
& M
CAP in $US MILLIONS
Cash Costs/ Au oz. (Dore)
Payable oz Au (Dore)
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TEPAL PROJECT | MICHOACÁN, MEXICOComparables On Gold Only – NPV vs Market Cap
$91 $84$109
$89$72
$122$109
$154 $141
$187
$412
$305
$0
$50
$100
$150
$200
$250
$300
$350
$400
$450
Esperanza Amarillo Kimber Grayd Geologix Mansfield
NPV
& M
CAP in $US MILLIONS
MCAP ($M) NPV @ 5%
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TEPAL PROJECT | MICHOACÁN, MEXICOMid‐Tier Production Gold Equivalent & MCAP
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$0
$500
$1,000
$1,500
$2,000
0
50,000
100,000
150,000
200,000
250,000
Argonaut Minefinders Alamos Primero Gammon
Market C
apita
lization ($M)
Prod
uctio
n Au
eq/ year
Production oz./y Au EquivalentMarket Capitalization $M
Company Mine Status Production oz./y Au Equiv Mine Plan oz. Au Equiv Market Capitalization $MArgonaut El Castillo P&P 75,000 1,231,000 $467
Minefinders Dolores P&P 80,000 2,440,000 $1,200Alamos Mulatos P&P 175,000 2,390,000 $1,800Primero Tayotita P&P 198,000 1,915,000 $430Gammon Ocampo/Chanate/Cubo P&P 230,000 2,546,000 $1,800
TEPAL PROJECT | MICHOACÁN, MEXICOProject Location Map
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TEPALPROJECTTEPAL
PROJECT
TEPAL PROJECT | MICHOACÁN, MEXICO
• Town of Tepalcatepec– Town population of 16,000– Well‐educated workforce– Large percentage of people work away from home– 14 kilometres from site
• Power– 25 megawatts available today– 14 kilometres from site
• Land– Topography is a “natural” for construction– Surface land is privately owned– Ranch land – no churches or buildings– No archaeological sites or protected areas
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Local Infrastructure
TEPAL PROJECT | MICHOACÁN, MEXICO
• Ore Processing:– Oxide ~10% of total ore
• Heap Leach: 77.3 % gold recovery• Standard industry process – simple & well known
– Sulphide – ~90% of total ore• Flotation circuit: recovery 86.6% Cu, 62.8% Au• Concentrate sold in Mexico or Pac Rim Smelters• Coarse grind size: energy efficient• Concentrate is very clean and in demand• Concentrate grade is 26% Cu and 28 g/t Au• Standard industry process – simple & well known
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Metallurgy
TEPAL PROJECT | MICHOACÁN, MEXICOPEA Site Layout & Resource Expansion Targets
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NorthWasteRock
SouthWaste Rock
Heap Pad
TailingsPond
Layout conceptual – not a final engineered drawing
0 1 Km
PEA MILL SITEPEA MILL SITE
NORTH PITNORTH PIT
SOUTH PITSOUTH PIT
TIZATE PITTIZATE PIT
TEPAL PROJECT | MICHOACÁN, MEXICOGeologix Resources and Mine Plan Growth
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Extensive ongoing
exploration on the property
just started.
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
5
Mar‐10 Apr‐10 May‐10 Jun‐10 Jul‐10 Aug‐10 Sep‐10 Oct‐10 Nov‐10 Dec‐10 Jan‐11 Feb‐11 Mar‐11 Apr‐11
Resource Growth amd PEA Mine
Econ
omics ‐(Million oz. A
u Equivalent) Resource Growth (Au equivalent)
PEA Mine Plan (Economics)
2013
TEPAL PROJECT | MICHOACÁN, MEXICO
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Long Section:North & South Zones
Open in multiple directions
Long Section:Tizate Zone
Open in multiple directions
OPEN
OPEN
OPEN
OPENOPEN
OPEN
OPEN
OPEN
OPEN
Exploration at North, South & Tizate Zones
TEPAL PROJECT | MICHOACÁN, MEXICO
Upside & Ongoing Exploration
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N
Claim/Property Map: 172 sq. km160 sq. km remains untested
2011 Exploration:- Airborne- Sampling- Mapping- Geochemistry- Target Delineation- Drilling
50003000200010000
METRES
706,000E
2,124,000N
2,122,000N
2,120,000N
2,118,000N
2,116,000N
2,114,000N
2,112,000N
2,110,000N
708,000E
710,000E
712,000E
714,000E
716,000E
718,000E
720,000E
722,000E
untested
untested
untested
untested
GIX owns 100% (subject to 2.5% NSR)
Non‐GIX Claims
GIX has optionto own 100%
SOUTH PIT
SOUTH PIT
NORTH PIT
NORTH PIT
HISTORICAL WORK AREAHISTORICAL WORK AREA
NEWTIZATE PIT
NEWTIZATE PIT
untested
Time Lines & Milestones
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TEPAL DEVELOPMENT 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Tepal Exploration
Tepal Prefeasibility
Tepal Permitting
Tepal Feasibility & Financing
Tepal Construction
TEPAL PRODUCTION
Tepal Oxide Heap Leach
Tepal Sulphide
TEPAL PROJECT | MICHOACÁN, MEXICOPossible Project Financing
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KEY FACTORS FOR FAVOURABLE POSSIBLE PROJECT FINANCING• Low Capex $312M• Low Opex $478/oz AuEq• High IRR 22%• Fast Payback 4.1 years
MULTIPLE FINANCING OPTIONS• Smelters – Desirable Blending Concentrate• Metal Traders – Off‐take Agreements• Banks – Desirable Metals, Production Levels, & Jurisdiction
TEPAL PROJECT | MICHOACÁN, MEXICO
Utilize Management Expertise to Advance Project
Keep the Plan Simple!• Commence Pre‐feasibility• Exploration: Ongoing Expansion Potential• Resize Operations and Optimize during Prefeasibility• Advance Toward Production Decision
Project Strategy
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Research Analyst Coverage
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Brokerage Firm Analyst Rating 12 Month Target
Wellington West Steve Parsons Buy C$1.10Raymond James Garry Baschuk Outperform C$1.10Mackie Research Dale Mah Buy C$1.12Union Securities Brian Mok Strong Buy C$1.25Salman Partners Tim Lee Buy C$1.30Byron Capital Drew Clark Buy C$1.50
This presentation includes forward‐looking information. While we believe the anticipated results, performance or achievements expressed or implied by the forward‐looking information are based on reasonable assumptions and expectations, you should not place undue reliance on them as they involve unknown and known risks, uncertainties and other factors which may cause the actual results of the Company to differ materially from those anticipated. You should review our documents filed with the securities authorities in Canada, including our AIF under the heading “Description of the Business – Risk Factors”. These documents describe the material factors and assumptions that were applied in drawing the conclusions and making the forecasts and projections reflected in the forward‐looking information and the material factors that could cause our actual results to differ materially. We undertake no obligation to update or revise any forward‐looking statements or information made in this presentation.
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Forward‐Looking Statement
Closing
Dunham Craig President & [email protected]
Jeffrey R. WilsonVP Corporate [email protected]
GEOLOGIX EXPLORATIONS INC.595 Burrard StreetPO Box 49172Three Bentall CentreVancouver, BC Canada V7X 1K8
Tel: [email protected]
Advanced‐Stage Mineral Assets | Mexico Focus Aggressive Growth Strategy | Proven Management Team
Strong Project Fundamentals
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2011 PEA Summary (SRK Consulting)
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PEA Base CaseTepal Mine Plan
(NI‐43‐101)Tonnes
AverageGold g/t Gold Oz.
AverageCopper % Copper lbs.
Gold Equivalent* Oz
Sulphide Ore Mined O/P 130,200,000 0.33 1,370,000 0.22 608,0 00,000 3,013,000
Oxide Ore Mined O/P 14,300,000 0.40 182,000 0.22 69,000,000 374,000
Total Ore Mined 144,500,000 1,550,000 677,000,000 3,480,000
The PEA mine plan considers Indicated and Inferred resources and cannot be classified as “Reserves”.Further infill drilling will be conducted for the purpose of improving Inferred Resources to Measured or Indicated categories.
2011 PEA Base Case Payable Production (23,000 Tonnes per day plan)
Average Mine Production Unit Average: Years 1‐9 Average: Years 10‐18.4 LOM: Total
Gold oz. 64,300 40,000 979,000
Copper lbs. 30,700,000 26,100,000 520,700,000
Silver oz. 6,300 171,000 1,767,000
Gold Equivalent* oz. 146,200 112,400 2,438,,000
TEPAL PROJECT | MICHOACÁN, MEXICOMine Life Averages
Tepal PEA Mine Plan Details Mine Type Open Pits (3)
Mine Life 18.1 years
Over All Strip Ratio (Waste t/ore t) 1.14:1
North Pit Strip Ratio 0.81:1
South Pit Strip Ratio 2.04:1
Tizate Pit Strip Ratio 0.87:1
OXIDE
Oxide tonnes processed 14,300,000
Daily Heap Leach Rate 6700 tpd
Oxide Gold Recovery 77.3%
Oxide Copper Recovery 13.4%
Oxide Processing Crush ½”, Heap Leach
SULPHIDE
Sulphide tonnes processed 130,200,000
Sulphide Mine Plan Throughput 23,000 tpd
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TEPAL PROJECT | MICHOACÁN, MEXICOMine Life Averages (cont’d)
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Tepal PEA Mine Plan Details SUPHIDE Cont….
Sulphide Gold Recovery 62.8%
Sulphide Copper Recovery 86.6%
Sulphide Silver Recovery 55.5%
Sulphide Processing Grind/Standard Flotation/Concentrate
Primary Grind Size ~140 micron
Concentrate Grade 24.8% Cu, 28 g/t Au, 125 g/t Ag
Smelter Penalties None
ROYALTIES
NSR Royalty 2.5%
PAYBACK PERIOD
Base Case $1000 Au, $2.75 Cu, $16 Ag 4.1 years
TEPAL PROJECT | MICHOACÁN, MEXICOMine Life Averages (cont’d)
Tepal PEA Mine Plan Details
OPERATING COSTS
Mining (Owner Fleet) $/t mined $1.36
Mining (Owner Fleet) $/t processed $2.92
Sulphide Ore $/t milled $4.30
Oxide Ore $/t leached $4.31
G&A and Sustaining Capital $/t milled $0.68
Average Operating Cost $/t ore $8.05
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