Pampalo Next Gold Mine in Nordic Countries

Transcription

1 Pampalo Next Gold Mine in Nordic Countries June 15, 2010 June 15, 2010

2 The Group Transformation from exploration to gold mining Ilmenite deposits Summary and plans for future

3 Endomines Group in brief Mining company, listed on OMX Stockholm First North Premiere List from 2007 Currently focus: commence production at Pampalo Gold Mine 2011 Test production scheduled at Pampalo Gold Mine in Q4 2010, full-scale production in Q Targeting 1000kg/a gold production from 2011 Currently known reserves for 6 7 years production History of high quality and focused exploration Ilmenite deposit in Ostrobotnia Target to start production by 2013 Gold deposits Industrial mineral deposits Calcite Finland Porkonen Kivimaa Ilmenite Helsinki Pampalo Karelian Gold Line Endomines AB (publ.) Endomines Oy Gold deposits Kalvinit Oy Ilmenite deposits 3 15-Jun-10

4 Sustainable and profitable Gold Mining Mission To build and operate the Pampalo Gold Mine and other gold deposits along the Karelian Gold Line with long-term good profitability To explore and develop other ore and industrial mineral deposits in the Nordic countries Strategy To control the 40 km long Karelian Gold Line greenstone belt To utilise the centrally located Pampalo concentrator for processing ores from the Karelian Gold Line To use modern and environmentally sustainable technology To increase ore reserves by continuous exploration and strategic acquisitions and alliances Financial objectives To operate with a positive cash-flow from Jun-10

5 Board of Directors strong and multidisciplinary team Karl-Axel Waplan, Chairman Since M.Sc. in Mechanical Engineering. CEO of Northland Resources Inc., Canada. Previously CEO of Lundin Mining. Chairman of Radkin, Raw Material Fund and Raw Material Group AB, Sweden. Member of the Board of Union Resources Ltd, Australia. Previously held position as VP of Sales and Marketing at Boliden. Shareholding: 240,000 shares; 20,000 warrants Lisbeth Godin Jonasson Since Geologist. 25 years of experience from mining industry including Chief Geologist Viscaria Mine, Kiruna. Regional Manager at The Confederation of Swedish Enterprise in Östersund. Shareholding: Carina Hellemaa Since Independent financial adviser. Director,Crisis Management Initiative, Head of Corporate Finance, Finland, Svenska Handelsbanken, , Exec. Director, UBS, London, / IBJ, M.A. International Relations,Fletcher School of Law and Diplomacy,Tufts University,USA, Shareholding: - Timo Lindborg Since Founder and CEO of Endomines Oy/AB Dr. in Industrial Economics, M.Sc. in Civil Engineering and B.Sc. in Geology. Chairman Silver Resources Oy. Shareholding, incl. company and family: 2,565,785 shares; 174,281 warrants Tuomo Mäkelä Since M.Sc. in Geology. CEO Outokumpu Mining Oy, Chairman and CEO of Escanor Oy. CEO Saga Mining Oy, Board Member Northland Resources Inc and Talvivaara Sotkamo Oy. Earlier assignments including different management positions of Outokumpu Oy. Shareholding: Lars-Göran Ohlsson Since M.Sc. in Mining. Board member of Dannemora Mineral AB and Geomanagement AB. Earlier assignments include CEO of Riddarhyttan Resources AB, LKAB Prospektering AB and other management positions within the industry. Qualified Person by SveMin. Shareholding: Rauno Pitkänen Board Menber since M.Sc,Mining. Sandvik Mining and Construction, Underground Mining, Manager Projects and Systems. Over 30 years of experience in mining industry with Outokumpu Mining Oy and Tara Mines Ltd as well Global positions in Project and Business development with Outokumpu Mining Oy. Shareholding Jun-10

6 Management proven track record Experienced and professional management related to present phase of the company Markus Ekberg, CEO CEO from Aug M. Sc. (Geol.), Turku University. 25 years experience with mining projects and companies from Finland, Norway, Australia and Ireland. Qualified person according to Australian JORC and Canadian NI stock exchange codes. EuroGeologist. CEO/Chairman of Tetra Minerals Oy. Shareholding: 50,000 shares; 3,999 warrants Börje Lindén, CFO CFO from M.Sc. (Econ.) from Swedish School of Economics in Finland. 25 years experience from public companies in Sweden and Finland, including 7 years with PriceWaterhouseCoopers. Shareholding: 41,772 shares; 0 warrants Jaakko Liikanen, Chief Technical Officer Co-founder and employed since M.Sc. (Geol.), Uppsala University. 30 years experience from exploration geology and mining in Sweden and Finland, including LKAB Prospekterings AB and Terra Mining AB. Qualified Person by SveMin and FinnMin. Shareholding: 1,346,382 shares; 60,333 warrants 6 15-Jun-10

7 The Group Transformation from exploration to gold mining Ilmenite deposits Summary and plans for future

8 Karelian Gold Line 40 km of gold mineralization with excellent potential A total of 23 gold showings 5 with reserves (Pampalo + Pampalo East, Hosko, Muurinsuo, Rämepuro) 2 mining concessions granted 2 with resources (Kuivisto, Kuittila) Endomines is the sole owner of mineral rights along the Karelian Gold Line Pampalo the first deposit to be mined Additional exploration potential in strike and depth Hosko Kuivisto East Pampalo Rämepuro Muurinsuo Kuittila 9 15-Jun-10

9 History of Pampalo and Endomines Pampalo discovery 1990 by GSF sold to Outokumpu Outokumpu started intensive exploration and test mining at Pampalo 1995 Surface drilling, open pit test mining Underground drilling, decline, test mining Totally tonnes at 15.5 g/t mined and processed at Pyhäsalmi and Vammala plants Mining and processing tested low risk! Cost of drilling ( meters) and drifting (3 500 meters) 10 M Financed by test mining revenues at low gold prices Outokumpu ceased activities in November 1999 due to low gold price and strategic decision to withdraw from mining business Pampalo acquired by Dragon Mining NL (Australia) Pampalo acquired by Endomines at favourable terms 2006 Endomines has actively explored since 1996 north of Pampalo Jun-10

10 Construction started October 22, 2009 TRANSFORMATION FROM EXPLORATION TO MINING Jun-10

11 Production to commence at Pampalo financing secured Net proceeds of rights issue in November million Nordea Bank Project Financing 8 million Proceeds from issued warrants may bring additional 3.1 million by December 2010 Grant from Finland s Ministry of Employment and the Economy 2.5 million Credit guarantees from Finnvera (Government-owned Finnish financing company) Financing of investments, Investments by sector million Underground mine 1.6 Crushing, buildings, processing plant 8.9 Infrastructure 4.6 Engineering and project management 1.7 Reservation and other 1.9 Total investments 18.7 Company costs 2.4 Total financing need 21.1 Financing sources million Equity net 15.0 Loan 8.0 Government grant 2.5 Total financing secured Jun-10

12 Gold reserves verified by external consultants High-quality gold assets at Karelian Gold Line Proven and probable ore reserves total 1.4 Mt with an average gold grade of 4.5 g/t (200,000 oz gold) The reserves are all located along the Karelian Gold Line 125,000 oz in Pampalo and 73,000 oz in deposits close to Pampalo Current reserves for 6 7 years of production Gold reserves at Karelian Gold Line Deposit Classification Tonnes Grade Gold Consultant g/t Oz Kg Pampalo Stockpiled , WAI Proven , GEMELL 1,3 Probable , GEMELL 1,3 Total , Hosko Proven , MAPTEK 1,2 Probable , MAPTEK 1,2 Total , Rämepuro Probable , MAPTEK 1,2 Pampalo East Probable , MAPTEK 1,4 Muurinsuo Probable , MAPTEK 1, , All reserves reported according JORC-code 1) Used gold price 720 USD/oz 2) Cut-off: 0,5 g/t; 5% Ore loss & 15% dilution 3) Cut-off: 2,5 g/t. Ore losses: drifting 0 %, stoping 5 % and stoping nearby talc chlorite rock 40 % 4) Cut-off: 1,0 g/t; 5% Ore loss & 15% dilution 5) Used gold price 574 USD/oz. Cut-off: 2,5 g/t. Stock Pile top cut 10 g/t Au Jun-10

13 Pampalo Gold Mine Pampalo ore and mine Existing open-pit Existing decline down to 365 m Ore lenses Jun-10

14 Pampalo mining principle Decline from open-pit to depth of 365 m already existing, length 2,361 m Decline is used for ore trucking Drifting Raise Ore Long hole drilling Backfilling Blasting rings Charging RC loading Backfill Diamond drill holes with assays Horisontal pillar Longitudinal projection 20 m Cross section Jun-10

15 Processing free milling gold Ore from the mines Clean gold production: No cyanide or acid used No deleterious material in tailings No acid drainage Feeder Flotation Crushing Fines Flotation concentrate t/a; 200 g/t Au Coarse material Stockpile Grinding Classification Gravimetric separation Tailings area Processing equipment from Metso delivery in May August, 2010 Gravimetric concentrate 5 10 % Au, 5 t /a Jun-10

16 Construction of Pampalo Gold Mine processing plant Start Oct 22,2009 Plant Jan 14, 2010 Plant Feb 2, 2010 Plant Feb 8, 2010 Roofing celebration Mar 11, Jun-10

17 Undergound mining works ongoing Drifting Apr Drifting Apr Ventilation Ventilation raise drifting raise, 14 Apr Mucking Apr Jun-10

18 Processing plant works ongoing Crusher area Plant excavation Apr Apr Flotation cells May Power line Apr Jun-10

19 Promising future for Pampalo Expected net sales ~ 20+ million per annum Production costs 8 10 million per annum Pampalo in figures Key figures Units Annual capacity t/a 230,000 Gold grade g/t 4 6 Ore loss % 5 Waste rock dilution % Recovery % Average gold production kg/a 900 1,000 Operating expenditure average, /t ore Mining 21 Processing 10 Administration 4 Total ~ Jun-10

20 Pampalo Gold Mine on schedule and within budget Total investment about 19 million Test production start-up Q4 2010, full-scale production Q Positive cash flow in 2011 Paying off debt in 5 years Good prerequisite for future exploration Fixed long term gold price hedged Dec. 2, 2009 at 843/oz ($1,271/oz) 5% premium 50% (84,400 oz) of planned production by 2015 Secures a good minimum cash flow level Cost coverage and debt service also secured Potential upside from increase in gold price and/or capacity increase Gold concentrate sales agreement with Boliden Harjavalta smelter Endomines hedge Jun-10

21 Pampalo project has significant development potential All satellites along the Karelian Gold Line are within trucking distance from the Pampalo Plant The area has good infrastructure with paved roads All satellites outcropping mining can be started with open pit Satellites open along strike and depth Hosko Kuivisto East Pampalo Rämepuro Muurinsuo Kuittila Mineral Resources Karelian Gold Line Gold deposit Tonnes Grade Oz Kg Classification Au g/t Pampalo 368, ,000 2,245 Measured 673, ,000 3,163 Indicated 306, ,000 1,255 Inferred Pampalo East 359, , Indicated 21, , Inferred Hosko 11, , Measured 519, ,600 1,920 Indicated 547, , Inferred Rämepuro 162, , Indicated 61, , Inferred Muurinsuo 211, , Indicated 786, ,000 1,179 Inferred Kuivisto East 37, , Indicated 1) 145, , Inferred 1) Kuittila 275, , Inferred 2) 4,481, ,200 13,954 Note: Ore reserves are part of mineral resources and cannot be added Estimated by Runge Limited, Australia, unless other indication 1) Estimated by Maptek KRJA Systems Limited 2) Estimated by Geological Survey of Finland Reporting Code: JORC, Kuittila historical Jun-10

22 Australian Southern Cross greenstone belt compared to Ilomantsi greenstone belt Ilomantsi (Karelian Gold line) Southern Cross 20 km Tail or trunk?? Ilomantsi vs. Southern Cross greenstone belt Gold exploration and production summary Indicators Units Ilomantsi Central Southern Belt length km Belt width km Claims coverage % < Gold exploration since year Gold produced total oz 40,000 >10,000,000 Gold produced in 2008 oz 0 157,147 Known reserves & resources oz 450,000 >2,000,000 Data compiled by GSF / Dr P Eilu Jun-10

23 The Group Transformation from exploration to gold mining Ilmenite deposits Summary and plans for future

24 Potential for future development Kälviä Ilmenite Ilmenite is used for pigments in e.g. paint, plastic, rubber and paper, and titanium metal production The Kälviä Ilmenite project is the most developed in the European Union Endomines competitive advantage is closeness to European customers One potential customer also in Finland (Sachtleben Pigments Oy, Pori) Other major producers are in Australia, Norway, South Africa and the Ukraine EU consumption Mt/a ilmenite concentrate per annum all imported Environmental Impact Assessment approved in 2009 Gold deposits Industrial mineral deposits Pori Finland Porkonen Ilmenite Calcite Kivimaa Helsinki Pampalo Karelian Gold Line Jun-10

25 Ilmenite prospects Planned mining rate 1.5 Mt/a, concentrate production 150,000 t/a (10% of EU demand) 23,000 tonnes of test mining and processing done Customer feedback of produced concentrate has been positive Planned mine life years Total CAPEX estimate is EUR 50+ million Expected annual sales EUR million Permitting Financing in Q3 Q Construction in Q Q Bankable Feasibility Study in Q Final engineering in Q Q Production Jun-10

26 The Group Transformation from exploration to gold mining venture to company Ilmenite operations Summary and plans for future

27 Risk diversification through projects in different phases High Porkonen (gold) Kivimaa (gold) Risk Muurinsuo (gold) Hosko (gold) Rämepuro (gold) Kälvia (ilmenite) Pampalo (gold) Low Exploration Test mining Feasibility-study Mine development Mining Jun-10

28 Pampalo project in brief Pampalo processing plant is centrally located allowing efficient transportation of ore from other Karelian Gold Line deposits All permits for Pampalo Gold Mine granted Production process has low impact on environment Training programmes on-going All necessary personnel recruited for the construction phase and for running the mine 70 employees in total by the end of 2010 Excellent Safety Statistic -- LTI = 0 (no accidents) Tailings Storage Facility Processsing plant Crusher area and ROM-pad Ore and waste dumps Mine warehouse Open pit Ventilation station Jun-10

29 Summary Jun-10

30 Invitation Open Day for Shareholders Sat 19th June invitation letter has been mailed in May Welcome! Inbjudan Öppen dag för Aktieägarna lördag den 19 juni inbjudningsbrev skickat i Mai Vällkommen!

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32 Thank you.