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8/11/2019 Rio Alto Corporate Presentation-November 2013 v2
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Corporate PresentationNovember 2013
“Inspiration and Innovation”
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TSX: RIO BVL: RIO NYSE: RIOM FSE: MS2
Capital Structure
3
TSX: RIO
BVL: RIO
NYSE: RIOM
Frankfurt FSE:
MS2
Shares Issued (Nov. 1, 2013): 176.7 million
Warrants Outstanding Nil
Options Outstanding: (Av. Exercise Price – C$ 2.03) 7.9 million
Fully Diluted: 184.6 million
Share Price:
C$1.74
as at 06/11/2013
Market Cap (issued capital): approx. C$ 307.5 million
16% ‐ Sentry Capital
9% ‐ Management
+16% ‐ Peruvian Investors
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Dr. Klaus Zeitler | Non Exec Chairman
Alex Black | President, CEO
Anthony Hawkshaw
| CFO
Victor Gobitz Colchado | Director
Drago Kisic Wagner | Director
Sidney Robinson | Director
Ram Ramachandran | Director
Dr. Roger Norwich | Director
Board of Directors
4
Commitment?..........Percentage of company held by Chairman, President, CEO, CFO, COO
AUQ : 0.1% AEM : 0.2% AGI : 0.7% AR : 1.9%
BTO : 1.6% P : 0.7% TMM : 3.7% RIO : 4.2%
Share Ownership of RIO Directors – 7%
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TSX: RIO BVL: RIO NYSE: RIOM FSE: MS2
Share Price Performance & Analysts
5
ANALYST COVERAGE
GMP Securities George Albino +1 416 943 6187
BMO Nesbitt Burns Inc Brian Quast +1 416 359 6824
Scotia Capital Mark Turner +1 416 863 7484
Clarus Securities Inc Mike
Bandrowski +1
416
343
3352
Stonecap Securities Inc Christos Doulis +1 416 342 9992
Desjardins Capital Markets Adam Melnyk +1 416 607 3081
Raymond James Adam Low +1 416 777 4943
Euro Pacific Capital Inc Heiko Ihle +1 800 727 7922
Kallpa Securities SAB Humberto Leon +51 1 630 7500
Larrain Vial Vicente Rodriguez +56 (2) 2616 5546
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• Startup 2011: 10 month build, $50M capex, 10,000 tpd
• Mine
Expansions 24,000 tpd
2011,
36,000
tpd
2012
• Production 2012: 201,113 ounces of gold
• Guidance 2013: 190 – 210,000 ounces of gold
• Production Upside Consistent Positive Grade Reconciliation
• Re‐optimization Oxide mining @ $1,200 – lowering costs & strip ratio
• Reserve Growth Q1 reserve update and exploration plan
• Feas. Study Phase 2 Estimated completion Q2 2014
• Extensive exploration program on 27,000 ha property – ongoing
• Proactive
exploration
strategy
– regional
and
rest
of
Peru
Strong Progress
6
“A record of execution and delivery”
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Minimal Debt – Gold Loan
7
Amount US$ 50 million
Total Obligation 61,312 “notional” ozs Min. o z s 5 2 , 1 1 5
Max.
o z s 7 0 , 5 0 9
Price Range $1,450 repay 85% of ozs BASE $1,150 $950 repay 115% of ozs
Status (as at 1 October 2013)
44,144 “notional”
ozs repaid Min.
o zs o w in g
14,593
17,593 “notional” ozs owing Max. o z s o w i n g 19,743
Due Date October 2014
Payments to
Date Made
through
to
February
2014
Plus $3M debt facility ‐ matures October 2014
Total Debt approx $25M
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La Arena ‐ Location
8
• Located in a gold mining district in north
central Peru
• 3.5 hour drive from Trujillo, on mostly
paved
road• Land package – approx 27,000 ha
• Altitude 3,400m above sea level
• 18 km east of Barrick´s Lagunas Norte Gold
Mine
• 10km
north
of
La
Virgen
Gold
Mine
owned
by Cia Minera San Simon
• Strong community support
• No agriculture
• Excellent infrastructure
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Reserves (as at Jan 1, 2013)
9
Material ClassificationOxide Ore Sulphide Ore Metal Mined
Tonnes (Mt) Au (g/t) Tonnes (Mt) Au
(g/t) Cu
(%) Au
(oz) Cu
(lbs)
Like ly Oxide PitSe dime nts Prove d 5.6 0.47 84,000
Pr obable 47.9 0.52 803,000
Final pit e xcluding
oxide pit
Se dime nts Prove d ‐
Probable 8.0 0.39 100,000
Por phyr y Prove d 0.1 0.32 0.29 1 ,500 942, 000
Pr obable 268.7
0.24
0.33
2 ,0 91 ,0 00 1 ,9 45 ,9 29 ,0 00
Pit De sign* 61.5 0.50 268.9 0.24 0.33 3 ,0 80 ,0 00 1 ,9 46 ,8 71 ,0 00
Mineral Reserve – Oxide & Sulphide
Within Pit Design, block cut‐off NSR calculation ($1,400 Au, $3.00 Cu)
* Rounded numbers may not sum exactly
Allows
for
98%
mining
recoveryMined surface at 1 January 2013.
Resources and Reserves are included in a NI 43‐101 technical report filed
on
SEDAR
Updated oxide reserve estimate – Q1, 2014
based on
$1,200
gold
price
&
3rd iteration
of
block
model
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Near Term Reserve Upside Opportunity
10
Oxide (Epithermal)
Oxide (Porphyry)
RESERVE PIT
SEDIMENTARY INTRUSIVESE
NW
Potential to add approx 1 year to oxide reserves(subject to technical work to be completed by Q1 2014)
Calaorco Colluvial Zone
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Medium Term Reserve Upside Opportunity
11
Potential to add approx 1 to 2 years to oxide reserves
(subject
to
technical
work
still
to
be
completed)
Lack of drilling
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Positive Grade Reconciliation Continues
12
PORPHYRY
HIGH GRADE ZONE
(Approx. 1g/t Au)
CALAORCO
PIT
HIGH GRADE NW STRUCTURES
(Upwards of 100g/t over
10‐20cm widths)
DEPTH POTENTIAL
WEST WALL
Looking SE
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2013 Performance to date
13
Highlights for the three months ended September 30, 2013
Adjusted net income ‐ $17.0 million ($0.10 per share)
Net income ‐ $15.9 million ($0.09 per share)
Cash provided by operations ‐ $35.5 million
Gold produced and sold ‐ 59,157 ozs at average realized price of $1,310 per oz
Capital investments ‐ $19.4 million ; exploration spending ‐ $2.0 million
Highlights for the nine months ended September 30, 2013
Adjusted net income ‐ $34.9 million ($0.20 per share)
Net
income ‐
$20.8
million
($0.12
per
share)
Cash flow from operations ‐ $57.3 million
Gold produced and sold ‐ 144,092 ozs at average realized price of $1,384 per oz
Capital investments ‐ $55.2 million ; exploration spending ‐ $5.8 million
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Gold Production & Guidance
14
Production & Sales
Production 2012 201,113 ozs
Production Guidance 2013 190 – 210,000 ozs
____________________________________ _____________________________________ _____________________________________ ___________________________________
Cost Guidance for 2013 Q3 Actual Guidance (13 Nov)
Adjusted Operating Cost US$ 675 to US$ 725 / oz $569 approx $650
All‐in sustaining costs US$ 900 to US$ 1,000 / oz $808 approx $900
All‐
in
costs US$ 1,200
to
US$
1,300
/ oz $961
approx $1,200
________________________________________________________________________________________________________________________________________________
Mine Plan Re‐Optimization (in progress)
$1,200 pit
(excl.
upside) LOM
(from
July
2013)
After
Tax
Cash
Flow
(incl.
Sustaining
Capital)
@ US$ 1,000 : approx $155M
@ US$ 1,500 : approx $340M
All‐in sustaining costs Reducing on annualized basis due to mining fleet reduction
and diminishing pad construction
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La Arena – Social & Community
15
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La Arena – Environment
16
Reclamation work on
waste dump No. 1
Reclamation work on
waste dump No. 1
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La Arena – Gold Oxide Mine Layout
17
L a y o u t f r o m J u l y 2 0 1 0
Re port
Pad Space available by end 2013
Current Leach Pad
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Ore Production ‐ 36,000 tonnes per day
La Arena – Gold Oxide Mine (cont.)
18
Calaorco Pit
Leach Pad
Ethel Pit
PLS Pond
Process Plant
Major Events Pond
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La Arena – Gold Oxide Mine (cont.)
19
Ore Production : + 36,000 tonnes per day
CAT777 Dump TruckRH90 Excavator
Mining Fleet Reduction
2013 – 4 fleets
2014 – 3 fleets
2015 – 2 fleets
2016 – 2 fleets
1 fleet = 1 exc + 7 trucks
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La Arena – Gold Oxide Mine (cont.)
20
Calaorco Pit Panorama – July 2013
Calaorco Pit – June 2013
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• Feasibility study (bankable) – 18,000 tpd
• Target Phase 2 capex ‐ $ 200M to $ 250M
• 30Mt to 60Mt starter pit – target grades approx 0.4 % Cu, 0.3 g/t Au
• Target : +20% IRR (post taxes)
• Current timing for FS completion – Q2 2014
• Locate all of Phase 2 project within current oxide mine EIA boundary
• Permitting process started in May 2013 – EIA approval prior to end 2013
• Clean
copper
concentrates with
gold
credit
– FS
met
tes two rk o ngo i ng
• Projected Start‐up Production – approx 50M lbs Cu and 40,000 oz Au pa
• Phase 3 – scoping level work : open pit v underground
La Arena – Phase 2 (feasibility study underway)
21
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40Mt pit 150Mt pit
Long term sulphide plan – Phase 3
SECTION 9126500 N
approx 115Mt @ 0.7% Cu , 0.53g/t Au
at 0.5% Cu cutoff
Open Pit or Underground?
drillholes ended in mineralization @ 1000m
Cu, Au, Mo grades increase with depth
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La Arena – Phase 2 & Phase 3
23
La Ramada LOM Waste Dump
Phase 3
Current EIA Boundary
Freylones LOM Tailings Site
Phase 3
La Ramada Electrical Substation
Phase 2 Starter
Pit
Sulphide Plant Site
Phase 3 Pit
Outline
Road Deviation
1 km
Land owned by
La Arena SA
Land to be purchased
by La Arena SA
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Feasibility study activities
Permitting of Phase 2 : Phase 2 EIA approval expected Q4, 2013
Phase
2
Construction
Permit
expected
Q2,
2014
Mine Plan : Optimize mine schedule for Phase 2 and timing of Phase 3 project
Ore & Waste Handling: Detail the option of in‐pit crushing and conveying of ore and waste for Phases
2 and 3
Met. Testwork : Testing and trade‐off work to improve Au recovery from 40%
Waste & Tailings Options : Review alternatives for tailings and waste deposition (Phase 3)
Phase 2 Capex (next 12 months)
Study Costs US$ 3M (committed – est completion Q2, 2014)
Substation and Transmission Line US$ 16M (committed – est completion Q3, 2014)
Surface Rights Acquisitions (Phase 3) US$ 12M (planned to be completed in 2014)
Plant Long Lead Items US$ ? (subject to feasibility study detail)
La Arena – Phase 2 (feasibility study underway)
24
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La Arena – Geology
25
July 2010 Report – Reserve Pit Shell
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27,000 ha ‐ multiple gold and copper exploration targets
La Arena ‐ Au Oxide Exploration
26
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Regional and Peru Exploration
10,000 ha within 30km
of La
Arena
La Libertad Department
Santa Barbara Resources
Earn‐inAyacucho Department
Duran Ventures
Earn‐inHuancavelica Department
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Sancos Prospect – Santa Barbara Resources
Hol e ID From To Interval Au g/t
SARC 001 0 14 14 0.35
SARC 003 0 22 22 0.46
SARC 005 0 22 22 0.27
SARC
005 30 38 8 0.30
SARC 006 8 98 90 0.29
SARC 011 0 154 154 0.45
SARC 012 82 100 18 0.47
SARC 019 0 94 94 0.47
SARC 020 38 56 18 0.29
SARC 021 52 82 30 0.40
Highlights ‐ Previous Drilling
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Minasnoic Prospect – Duran Ventures Inc.
Hole ID FROM TO Interval Au g/t Ag g/t
M NB‐
03 110.5 146.85 36.35 0.20
16.21M NP‐02 0 57.15 57.15 0 .55 3.66
M NP‐03 10 60 50 0.33 13.63
Incl uding 30 50 20 0.51 28.29
M NP‐06 40 78 38 0.14 53.02
M NP‐07 5.65 69.1 63.45 0.53 8.18
M NP‐10 10.55 1 00.2 8 9.65 0.23 13.72
M NP‐14 0 62 62 0.34 20.74
Incl uding 34 52.3 18. 3 0.48 30.37
M NP‐16 12 83.4 71.4 0.44 5.48
Incl uding 28.55 46.25 17.7 1.38
11.49
M NP‐23 74.05 300.23 226.18 0.45 5.31
Incl uding 146 176.9 30.9 1.86 21.06
M NP‐28 68 78 10 0.57 1.26
Highlights ‐ Previous Drilling
Recommended