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Management, Strategy & Projects. David Mendelawitz Managing Director . August 2013. Important Information. - PowerPoint PPT Presentation
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Cleveland Mining Company Limited
Management, Strategy & Projects
August 2013
David MendelawitzManaging Director
ASX Code CDG
Cleveland Mining Company Limited 2
Important Information
This presentation contains certain “forward‐looking statements”. All statements, other than statements of historical fact, that address activities, events or developments that Cleveland Mining Company Limited (“Cleveland” or the “Company”) believes, expects or anticipates will or may occur in the future are forward‐looking statements. Forward‐looking statements are often, but not always, identified by the use of words such as “seek”, “anticipate”, “believe”, “plan”, “estimate”, “target”, “expect”, and “intend” and statements that an event or result “may”, “will”, “can”, “should”, “could”, or “might” occur or be achieved and other similar expressions. These forward‐looking statements reflect the current internal projections, expectations or beliefs of Cleveland based on information currently available to Cleveland.
Forward‐looking statements are subject to a number of risks and uncertainties, including those detailed from time to time in filings made by Cleveland with securities regulatory authorities, that may cause the actual results of Cleveland to differ materially from those discussed in the forward‐looking statements, and even if such actual results are realised or substantially realised, there can be no assurance that they will have the expected consequences to, or effects on Cleveland. Cleveland expressly disclaims any obligation to update or revise any such forward-looking statements.
Cleveland Mining Company Limited 3
Investment Highlights
Experienced team with clear strategy & significant ‘skin in
the game’
Located in a region with a strong mining culture, large
skilled labour pool and extensive mine service providers
Development risk now largely removed with mine ramp up
progressing well as the Premier mine transitions into
production
Now positioned for game-changing growth through
exploration upside and/ or acquisition
Strategy designed to mitigate variable market conditions
Track record of “fast track” success
▲ Location of Cleveland Projects
Cleveland Mining Company Limited 4
Why Gold in Brazil?
Brazil Traditional mining country
Low sovereign risk
Acceptable royalties and taxes
Low cost energy, labour, on-costs
ExampleCost
Brazil Australia Cost Difference
Truck driver(cost to business)
$15,000 - 20,000 p.a.
150,000 – 200,000 p.a
≈1000% +
Power Source
7c – 15c per Kwh(hydroelectric)
+30c (Gas)+50c (Diesel)
50-700%
Diesel $1.08/L 1.42/L ≈130%
Gold Low barriers to entry
High potential profit margin
in right jurisdiction
Easy to understand
Easy to sell
Constant strong demand
Declining world in-ground
resources
Cleveland Mining Company Limited 5
Start Small to Build Strong Foundations
Establish strong relationship with local partner – Edificia Participações
Low technical risk development funded by equity to minimise debt servicing pressure
Room to understand environment – what affects budgets and schedules – what can and can’t be done
Time to pull together a team
Sort out teething issues
Strong foundation for growth
Cleveland Mining Company Limited 6
From Concept to Cash Flows in 3 Years
Starting with no resource, no team, no permits
and minimal funds, Cleveland has:
• Secured projects
• Identified a resource
• Designed and licensed the project
• Built a team and solid understanding of Brazil
• Established production
• Secured a growth horizon
Within FY13/14 Cleveland will have:
• Stabilised production
• Established profitability
• Commenced expansion
Cleveland Mining Company Limited
▲Premier Mine February 2012 ▲Premier Mine June 2012
A Mine Built in Six Months
Premier Mine June 2013
Cleveland Mining Company Limited 8
Premier Gold Mine
Stage 1 (ongoing) 50:50 Joint Venture with Edifica Participações Mining and production commenced 40tph processing capacity Installed plant capability to deliver 10,000oz – 20,000oz
with current ore (1.0 – 3.0 gt) and 60% recovery. 34,000t @ 1.79gt of crushed or containing approx. 60kg
of gold on ROM currently being processed. Achieving >60% recovery
Stage 2 (Q4 2013 – Q1 2014) Introduction of higher-grade material from Premier and O
Capitão (3.0 – 10.0 gt) Addition of cyanide and floatation circuit to increase
recovery from 60% to 90%+
Stage 3 Expansion of resources through further drilling and
possible acquisition of other gold projects held in immediate region
Cleveland Mining Company Limited 9
Easy Mining with Exploration Upside
Initial ‘Foundation” Inferred Resource of
1.96mt @ 1.41 g/t for 89,000 ounces defined
to underpin production start and payback of
investment
Early access to high grade mineralisation
Ore-body is outcropping and shallow dipping
Open along strike and down dip
Unit repeats below and an order of
magnitude thicker
Multi million ounce prospectivity
demonstrated through drilling, geophysics,
soil sampling and mapping
Cleveland Mining Company Limited 10
O Capitão Gold Project
Resource expansion potential
Less than 10km from Premier Mine Site of large artisanal mine
(5-10t Au extracted by hand) Two mineralised areas identified:
1. Lavra
2. Dona Maria Multiple stacked lodes identified with significant high-
grade intercepts, Including:Lavra• 1.30m @ 14.29 g/t Au from 44.7m
• 2.00m @ 17.21 g/t Au from 39.0m
Dona Maria • 11.00m @ 1.01 g/t Au from 51.00m to 62.00m
• 4.40m @ 3.55 g/t Au from 91.00m to 95.40m
Planning for processing at Premier Mine
Lavra
Dona Maria
Premier 9km
Dona Maria
Lavra
Cleveland Mining Company Limited 11
Premier Gold Mine – The Next 18 Months
Period Milestone Event
3Q2013
Resumption of mining and crushing
4Q2013
Start of mining of Premier underground
1Q2014
Commissioning of cyanide circuitStart of mining of Lavra at O Capitão
2Q2014
Start of mining of Dona Maria at O Capitão
3Q2014
Start of mining Premier Pit 3
Cleveland Mining Company Limited 12
Multiple Sources of Ore
Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q 4 20140
10000
20000
30000
40000
50000
60000
70000
80000
Ore Tonnes Per Quarter By Source
ROM Stock 1.79 gt Metago Tailings 0.88 gt Premier Underground 2 -4 gtPremier Open pit 3 - 4 gt Lavra 10 gt Dona Maria 2 -3 gtPremier Tailings 1 - 1.2 gt
Current production from ROM stockpiles
Open pit mining re-commencing Q4
Relatively low reliance on underground sources
Cleveland Mining Company Limited 13
Premier Financial Metrics – Targets
Based on 1H2014 production targets @ 7,000 ounces per Qtr
Tonnes processed 70,000 / qtr with average head grade 3.22 g/t
Processing recovery at 90%
Brazil C1 cash cost target A$400 per ounce
Australian Head Office expense target A$125 per ounce
Sustaining CapEx and exploration expense target A$100 per ounce
Cleveland JV profit share 70/30 reducing to 50/50 as JV funding debt repaid by Edifica to Cleveland
Cleveland Mining Company Limited 14
Growth Potential
Gold Mara Rosa Gold Project
100 km from Crixas
Strike extension of Amarillo Gold Corps 1.2m
ounce Posse Deposit
Iron Ore Alliance with BC Iron
3 Projects comprising 80 tenements
Early stage iron ore Exploration on highly
prospective ground
Strategically located next to developing Port and
Rail Infrastructure
Cleveland Mining Company Limited 15
Company Overview and Capital Structure
Issued and Paid Up NumberShares
Shares on issue 211,486,669 OptionsOptions ($0.20) 3,527,000Options ($0.62) 500,000Performance Options ($0.20 - $0.84, against significant progress milestones)
24,540,000
Total Options 28,567,000
Cleveland Mining Company Ltd. (ASX:CDG)
Major ShareholdersMrs Sarah L. Mendelawitz 20.93%Mr Wang Zhe6.00%BC Iron (SA) Pty Ltd. 4.39%Finook Pty Ltd3.40%Penwerris Pty Ltd
2.56%
Share Price $0.13
Market Cap A$23m
1-year Range A$0.07 – 0.95
Cash (at 30/6/13) <A$1m
Receivables (from JV partner – to be paid from project profits)
~A$8.5m
Outstanding Iron Ore equity contribution from Chinese Steel Mill
~A$10m
Debt (at 30/6/13) ~A$1.4m
Board of DirectorsDon Bailey - Non-Executive Chairman
David Mendelawitz – Managing Director
Russell Scrimshaw – Non-Executive Director
Jim Williams – Non-executive Director
Cleveland Mining Company Limited
Contact
Phone: +61 (08) 6389 6000
Fax: +61 (08) 6389 6099.
Email: info@clevelandmining.com.au
Corporate Headquarters: Suite 3, 254 Rokeby Road, Subiaco, Western Australia
Mailing Address: PO Box 2089, Subiaco, Western Australia, 6904
Web: www.clevelandmining.com.au
Competent Person’s Statement
The information in this report that relates to Exploration Results is based on information reviewed by David Mendelawitz, who is a Fellow of the AusIMM. Mr Mendelawitz has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Mendelawitz consents to the inclusion of the matters based on his information in the form and context in which it appears. Mr Mendelawitz is employed by Cleveland Mining Company Ltd.
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