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Investor Presentation April 2013
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Disclaimer
This presentation has been prepared by Ouro Mining Inc. (the "Company").
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commitment.
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observe, all such restrictions. In Australia this document is only being provided to persons who are sophisticated investors, in accordance with section
708(8) of the Corporations Act 2001 ("Corporations Act") and professional investors, in accordance with section 708(11) of the Corporations Act, or to such
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This presentation is not financial product or investment advice. It does not take into account the investment objectives, financial situation and particular
needs of any investor. Before making an investment in the Company, an investor or prospective investor should consider whether such an investment is
appropriate to their particular investment needs, objectives and financial circumstances, seek legal and taxation advice as appropriate and consult a
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This presentation may contain forward-looking statements that are subject to risk factors associated with exploring for, developing, mining, processing and sale of coal. Forward-looking statements include those containing such words as "anticipate", "estimates", "forecasts", "should", "could", "may", "intends",
"will", "expects", "plans" or similar expressions. Such forward-looking statements are not guarantees of future performance and involve known and unknown
risks, uncertainties, assumptions and other important factors, many of which are beyond the control of the Company. It is believed that the expectations
reflected in these statements are reasonable but they may be affected by a range of variables and changes in underlying assumptions which could
cause actual results or trends to differ materially. The Company does not make any representation or warranty as to the accuracy of such statements or
assumptions.
This presentation has been prepared by the Company based on information available to it as at January 31, 2013 and has not been independently
verified. No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness or correctness of the information, opinions
and conclusions contained in this presentation. To the maximum extent permitted by law, none of the Company or its subsidiaries or affiliates or the directors, employees, agents, representatives or advisers of any such party, nor any other person accepts any liability for any loss arising from the use of this
presentation or its contents or otherwise arising in connection with it, including without limitation, any liability arising from fault or negligence on the part of
the Company or its subsidiaries or affiliates or the directors, employees, agents, representatives or advisers of any such party.
The Company estimates its reserves and resources in accordance with the Australasian Code for Reporting of Identified Mineral Resources and Ore
Reserves 2012 Edition (JORC Code).
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Ouro Mining Inc
Ouro Mining is an unlisted public company developing its 100% owned
Heavener hard coking coal project in the Arkansas Coal Basin of the USA. The company is currently owned by:
Founder Shareholders 50%
Taurus Resources Fund 2 10%
Other Shareholders 40%
The Heavener Project is expected to produce 1.7Mtpa of product coal:
Low to mid vol hard coking coal
Underground longwall mining method
Weir DFS, 20 years JORC Reserves 53Mt
Additional Life of Mine JORC Reserves available 43Mt
The mine will benefit from:
Extensive existing infrastructure availability
First quartile cash operating costs
Low capital requirements
Rapid payback of capital
High quality product for the export market
4
Section 1
Heavener Project
5 5
Locality
6 6
The Heavener project straddles the border of Oklahoma and Arkansas
Coal occurs in the Lower Hartshorne Seam
Two 43-101 Reports already completed in 2008 and 2011
Resource of 201Mt (JORC)*
Reserve of 96 Mt (JORC) within Life of Mine Plan*
Over 300 drillholes on the tenements (29,000 metres)
Seam thickness varies from 1.3m to 5.0m, averaging 2.5m.
Seam dips 8⁰ to 16⁰ to the NNW
Little evidence of faulting in 18 km of strike length
Gas increases with depth. Will require degassing
DFS completed February 2013 (Weir International)
* Includes controlled and uncontrolled tenements as defined in WEIR Feasibility Report (2013)
Heavener Project - Summary
Resource Status
7 7
34 diamond drillholes
Geotechnical Work and Mine Design
Degassing Studies
JORC Reserve Statement
Coal washability and washplant design
2D Seismic Survey above planned mining
areas completed.
Heavener 2012 Field Work Completed
8 8
Heavener Conceptual Mine Layout
DFS Mine Plan , first 20 years 53Mt Additional Reserves 43Mt for expansion or extending life beyond 20 years
Exploration
9 9
Heavener Project - Summary
Tenement Status
Eight coal leases totalling 3130 hectares held by Ouro Mining, Inc.
Filing Number: 1912291074
Incorporated in the State of Oklahoma, USA
Applications filed for an additional 2210 hectares adjoining above tenements
Fully permitted open cut title due to recent opencut mining by previous
owners
Permitting for underground development currently underway
The region has a good skilled workforce available
Total local and government support for project development
Excellent infrastructure and access to rail and port
10 10
Washed Coal
• Float @ 1.4 Specific Gravity (%)
• Ash (%)
• Volatile Matter (%)
• Fixed Carbon (%)
• Sulfur (%)
• kcal/kg (dry basis)
• FSI @ 1.5 S.G.
• HGI
• Coke button
Coal Quality Low to Mid-Vol Hard Coking Coal
68.6 - 86.0
6.2 – 6.9
22.8 –23.8
69.4 – 70.7
0.81 – 1.04
8,036 – 8,105
9.0
100+
8.5 to 9
11 11
Transport Infrastructure
Rail and barge options are readily available
Minor capital expenditure to access either option
12 12
Transport Infrastructure
Primary target markets are South America (Brazil) and Western Europe
Access to Asian markets via the Panama Canal
13 13
Heavener Project Summary
Mining: Punch longwall with continuous miners for gateroad development
LW currently planned at 125m face with potential to expand to 250m faces
Planned production rate over a 20 year DFS Mine Plan 53Mt in place –
Average1.7Mtpa of washed product coal
Additional JORC reserves available within Life of Mine for a second mine
development, expansion or mine life extension – 43Mt
Estimated Costs – First 20 year Mine Plan 53Mt:
Capital - US$199m
Operating Cash Cost Ex Mine - US$65/t product
FOB Port Cash Cost - US$93/t product
Capital costs D & A - US$14/t product
14 14
Heavener - comparatives
Source: Wood Mackenzie, Ouro Mining
FOB cash costs of seaborne HCC export supply (2013)
Heavener is forecast to be in the
lowest quartile for HCC
producers in the seaborne coal
market
Heavener compares very
favorably on capital intensity
due to low infrastructure and
labour costs benefits.
Weighted average capital intensity of major seaborne metallurgical coal exporters (real 2013 dollars)
Source: Wood Mackenzie, Ouro Mining
Heavener
15 15
Heavener DFS 20 year Mine Plan
0
50
100
150
200
250
300
350
400
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
1.8
2
2014 2015 2016 2017 2018- 2032
US$/t
mt
Year
Attributable Production and Cash Cost Profile
Tonnes Average Cash Cost/t Average Cash Price Realised/t
US$167 FOB
US$93 FOB
At full production and a
coking coal price of
$167/t Heavener
generates an EBITDA
margin of $74/t
16 16
43 65101 10213
41
181 194
-100
-21
-82-30
-7
-200
-150
-100
-50
0
50
100
150
200
250
300
-200
-150
-100
-50
0
50
100
150
200
250
300
FY13/14 FY15 FY16 FY17 FY18U
S$m
US$
m
Year
Heavener Mine Cash Flow
Cash Costs EBITDA Net Inv Cash Cum Cash Flow Revenue
Heavener DFS 20 year Mine Plan
Heavener payback
period is forecast to be
circa 2 years.
EBITDA is forecast to be
$140m in FY17 based on
the Weir DFS using a long
term coal price of
$184.50/t and average
~$170m thereafter.
17 17
DFS Internal Rate of Return (IRR):
Pre Tax 53% Post Tax 44%
Heavener DFS 20 year Mine Plan
0
100
200
300
400
500
600
700
800
900
1000
18% 15% 12% 10%
"Real" Discount Rate %
Weir 20 year DFS NPV US$m
Post Tax NPV Pre tax NPV Increment
Weir has forecast NPV’s
before federal taxes and
post state taxes and
royalties for the first 20
years of production.
No value has been
ascribed to additional
reserves.
* Post tax NPVs estimated by Ouro management
18
Section 2
Management
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Key Management Team Members
Management Team
Mr Paul Ingram (MAus IMM) -- Executive Director and CEO
Mr Edward Pitrolo (BSEM, Certified Mine Manager) – Executive Director
Mr John Fisher-Stamp (FCA, FTIA, GAICD, MIMC) – Executive Director
Mr Harry Mustard BSc (Hons) MAIG – Exploration Manager
Mr Stephen Morgan– Operations Manager
Ms Sarah Jordan – Company Secretary
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Technical Advisors
Technical Advisors
Definitive Feasibility Study & JORC
Resource Work Weir International, Inc John W Sabo - Executive Vice President and
Managing Director
Mining and Engineering LD Operations Pty Ltd – Mining and Design Services Peter Ross - Managing Director
Tenement Management and
Environmental Emera Corp - Oklahoma Mr Saeed Zahrai - Principal
Gas and Drainage Management GeoMet Inc – Texas Mr Scott Meyers – Senior Consultant
Boxcut Design TEE Engineering – West Virginia Mr Tim Blackburn - Principal
Metallurgical & Coal Quality A & B Mylec Pty Ltd - Queensland Mr Andy Meyers - Principal
Geological and Data Verification Hanna Consulting Services - NSW Mr Pat Hanna – Principal
– FAusIMM, CP, MMICA, MAICD, MAGMM
21 21
Professional Advisors
Advisors
Auditor and Corporate Taxation Tulsa, United States Ernst & Young
Legal and Transfer Agent Australia, Hong Kong & United States Ashurst New York, United States Sichenzia Ross Friedman Ference LLP
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Section 3
Offer Overview &
Share Capital Structure
23 23
Private Placement Pre IPO Funding
Target Capital Raising Investors – Pre IPO Round
Offer Price Regulation S Shares of Common Stock
Shares of Common Stock on issue prior to this Offer Common Stock Share Options Granted
Number of Regulation S Shares of Common
Stock to be offered under this Offer to be completed by
30 April 2013.
Total Shares of Common Stock and Regulation S Shares of
Common Stock after Issue pursuant to the Offer: Shares of Common Stock and Reg. S undiluted
Shares of Common Stock and Reg. S fully diluted
Offer Price for all Shares fully diluted
Equity Value fully diluted
Exercise Price of Common Stock Options outstanding1
US$15,000,000 US$0.60 277,777,777
119,990,503
25,000,000
302,777,777
422,768,280
US$0.60
US$ 255,000,000
US$0.235
1= Options terms - Taurus Option 64,280,627 at any time up to an including IPO for US$15m and Texcord Option 55,709,876 at any time up to September 20, 2016 for US$13m
24 24
Ouro Current Share Structure
Shareholders Interests:
Ewan Developments Ltd
Songqiang Chen
Taurus Resources Fund 2
Other Shareholders
Total Outstanding Common Stock and
Reg. S Common Stock
Common Stock Options Granted
Total Outstanding Common Stock and Reg.S
Common Stock on a Fully Diluted Basis
Shares %
99,247,458
99,247,458
38,444,444
40,838,417
Issued Shares
277,777,777
Options
119,990,503
Issued Shares & Options
397,768,280
24.95%
10.26%
30.17%
9.67%
100.00%
24.95%
25 25
Ouro is seeking Pre IPO Capital of US$15m to continue the underground mine
approvals process and commence earthworks.
Ouro is scheduled to continue mine development works in Q3-Q4 CY 2013
which will require an additional round of Pre IPO funding of US$25m scheduled
for completion by 31August 2013 .
Ouro directors will review Debt to Equity Structure for IPO and funding options
in Q4 2013, to commence underground and surface infrastructure works and
equipment acquisition est. US$150m.
Ouro Pre IPO US$15m Use of Funds
Pre IPO US$15m funds will be applied to the following works activities:
Mine approvals, permitting & environmental compliance Geology & geotechnical Mine planning, engineering and consultants Capital equipment Earthworks, box cut & portal construction Tenements and land acquisition Working capital and corporate overhead
Total
US$2.1m
US$15m
US$1.7m
US$1.0m
US$7.6m
US$0.5m
US$1.6m
US$0.5m
26 26
Overview of Completion
Share Capital Structure
Equity Value pre completion – Pre IPO US$15m Round
Enterprise Value Pre IPO US$15m Round
JORC 20 Year Mine Plan in Place Tonnes - 53 Mt
Implied Market Capitalisation on Completion of Pre IPO
US$15m Round
US$240,000,000
US$245,000,000
US$255,000,000
Implied Market Capitalisation on Completion of Pre IPO US$25m Round 31 August 2013
US$335,000,000
US$450-475m Target Market Capitalisation Range and Structure on
completion of IPO Equity US$50m & Debt funding US$100m
1= Directors will consider the merits of dual listing on the HKEx post ASX IPO.
2= Directors shall consider interposing an Australian Holding Company above Ouro Mining, Inc
preceding ASX IPO.
1,2
27 27
Ouro Mining – pricing metrics
EV Methodology in Full Production Equity Value
1. Forecast average annual EBITDA in full production US$170m
Enterprise Value – Multiple 4x (less debt$100m) US$580m
2. Forecast average annual net cash flow over 20 year
mine life after income tax US$127m
Enterprise Value – Multiple 5x (less debt$100m) US$535m
3. Forecast NPV at various discount factors, after federal tax.
Additional LOM reserves and exploration assumed to be nil.
10% US$586m
12% US$467m
4. Implied Equity Value US$542m Average EV of EBITDA, Cash Flow and NPV
Less risk weighting discount for development stage 50%
Implied Equity Value ~US$270m
Implied Equity Value on completion of US$15m round US$255m
28 28
Attractive coking coal project to produce 1.7mtpa of washed product coal.
Infrastructure in place with ready access to export markets via Gulf of Mexico ports.
Available skilled workforce readily available and supportive local government and communities knowledgeable about mining ( 4 coal mines in the area).
A Definitive Feasibility Study completed in 2013 and permits are in place to commence development in 2013.
JORC Resources of 201Mt and Reserves within the Life of Mine Plane of 96 Mt.
Relatively low capital cost, DFS estimates (20yr, 56% LOM reserves) US$199m.
A payback period of circa 2 years.
Low comparative cash operating cost, DFS estimates
– US$65/tonne at the mine gate; and
– US$93/tonne Port FOB.
Attractive and readily available markets for low to mid vol hard coking coal in North and South America and Europe.
The DFS estimated, post state taxes but before federal taxes NPV’s, US$ 912m (10% disc) and US$ 537m (15% disc) for the first 20 years of production.
Ouru Mining highlights
29 29
• Seed Capital Funding- May 2012 – Completed
• Private Placement – October 2012 – Completed
• Drilling, seismic and JORC resource studies Mar-Dec 2012 - Completed
• DFS Reporting – Feb 2013 – Completed
• Pre IPO Funding – April 2013 - US$15m and August 2013 - US$25m.
• Procurement and Construction Start-up 2013
• Commencement of Production with
Gateroad Development in Q2 2014
• IPO/Debt Funding UG and Surface Infrastructure Q1 2014 - US$150m. Target structure – Equity US$50m and Debt – US$100m.
Timeline
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