Salazar Resources Limited · TSXV:SRL
Salazar Resources — Investor Presentation (March 2014)
52 slides from Salazar Resources's investor presentation, March 2014
Slide 1: Salazar Resources Ltd. Corporate Presentation 2014
TSX-‐V: SRL SALAZAR RESOURCES LTD. CORPORATE PRESENTATION 2014 “In partnership to develop La1n America’s next major VMS camp”
Slide 2: Disclaimer
Disclaimer Forward-looking statements: This report includes certain statements that may be deemed forward-looking. All statements in this release, other than statements of historical facts, that address future production, reserve potential, exploration drilling, exploitation activities and events or
Slide 3: Background – Ecuador Mining Law 2013
Background – Ecuador Mining Law 2013 MID-‐SIZE MINING LARGE PROJECTS Underground Mining between 300 – 1,000 t/day > 1,000 t/day for Underground mining Open Pit Mining between 1,000 – 2,000 t/day > 2,000 t/day for Open Pit mining Mining concessions granted up to 10 years: 4 years early Mining conces
Slide 4: El Domo NI 43-101 Resource
El Domo NI 43-101 Resource Contained Contained Contained Contained Contained Category Cut-‐off Tonnes Copper Zinc Lead Gold Silver Copper Zinc Lead Gold Silver $ (Mt) (%) (%) (%) (g/t) (g/t) (M lbs) (M lbs) (M lbs) (ozs) (ozs) Indicated 30 6.08 2.33 3.06 0.28 2.99 55.81 312.95 409.56 37.76 584,457 1
Slide 5: Investment Highlights
Investment Highlights ØMajor near surface high grade discovery with a NI 43-101 resource estimate ØCompleting preliminary economic assessment (PEA) on the El Domo property at the Curipamba project ØLooking to be next VMS producer in Latin America Ø100% ownership of all properties – No NSR royalt
Slide 6: Share Structure
Share Structure As of February, 2014 TSX-‐V Symbol SRL Shares Outstanding 56.123M Management and OpDons Outstanding 0.97M Insiders 30% Warrants Outstanding 4.8M 41% Lundin Mining Fully Diluted 61.89M Silvercorp FD Market CapitalizaDon (C$mm) 15.15M Trafigura 9% 13% 7% Float Warrants Expiry Date 1,2
Slide 7: Key Personnel
Key Personnel Fredy Salazar, President & Chief Executive Officer Francisco Soria, Ing., Exploration Manager § M.Sc., 27 years experience, Newmont § 22 years geological experience, 8 years with Exploration, original work on Fruta del Norte Newmont, specializing in South America. Pablo Acosta, Chief
Slide 8: Project Portfolio
Project Portfolio Flagship Project: Curipamba – VMS Camp Other Projects: Santiago - Hydrothermal Au and porphyry Cu-Au Rumiñahui - Au quartz stockwork Mendez - Cu-Zn-Mo porphyry
Slide 9: Curipamba Project, Deposit El Domo
Curipamba Project, Deposit El Domo The Salazar team discovered a high grade VMS camp with gold- rich Cu-Zn VMS and structural zones. The mineralized body now has a strike length of 850m North – South and an East – West width of between 300-500m, with an average thickness of 10m. The body is sub-hori
Slide 10: Curipamba Project
Curipamba Project § 100% owned (30,327.18 hectares) § Located in the Western Cordillera of Ecuador § 2.5-hour drive from Guayaquil § 20 km from Pan-American highway and 15km from high tension wires § Host to a new volcanic massive sulphide camp controlled by Salazar § 39,190m drilled in 206 ho
Slide 11: El Domo VMS Deposit
El Domo VMS Deposit § Discovered El Domo in 2008 § In Las Naves concession, where El Domo Deposit is located. § El Domo remains open in all direcDons, the average drill hole spacing is approximately 50m within the El Domo. § For the resource esDmate made in December 2013, a total of 31,770m were
Slide 12: El Domo Project - Mineral Resource Estimate
El Domo Project -‐ Mineral Resource EsSmate at an NSR cut-‐off of US$30 per tonne (December 2013), by Buenaventura Ingenieros-‐BISA Lithology Tonnes Copper Zinc Lead Gold Silver Copper Zinc Lead Gold Silver Category Unit (Mt) (%) (%) (%) (g/t) (g/t) (M lbs) (M lbs) (M lbs) (oz) (oz) VMS Indicated
Slide 13: Indicated and inferred mineral resource summary
Indicated mineral resource of 6.080 million tonnes at an average grade of 2.33% Cu, 3.06% Zn, 0.28% Pb, 2.99 g/t Au, and 55.81 g/t Ag, containing 312.95 million pounds Cu, 409.56 million pounds Zn, 37.76 million pounds Pb, 584,457 ounces Au, and 10 .91 million ounces Ag. The current indicated minera
Slide 14: 3D Model El Domo Deposit
3D Model El Domo Deposit ca ear RESOURCES LTD.
Slide 15: El Domo – 3D Wireframe
EI Domo — 3D Wireframe CS SALAZAR
Slide 16: Lithology model in Section 9588300N and Section 69505E
Lithology model in Section 9588300N and Section 69505E
Slide 17: Lithology model in Section 9588300N and Section 69505E
Lithology model in Section 9588300N and Section 69505E
Slide 18: Geology & Mineral Resources - Main Drilling Results
Geology & Mineral Resources - Main Drilling Results HOLE ID FROM(m) TO(m) LENGTH(m) Au (g/t) Ag (g/t) Cu (%) Pb (%) Zn (%) CURI-046 49.33 65.66 16.33 3.590 114.20 3.42 0.83 5.52 CURI-048 40.05 59.00 18.95 3.410 61.08 2.83 0.44 3.18 CURI-053 65.41 73.34 7.93 3.520 240.35 4.37 0.23 3.22 CURI-056 55.30
Slide 19: Metallurgy – Summary
Metallurgy – Summary • The metallurgical testwork was completed in December 2013 under the direcDon of Transmin Metallurgical Consultants (“Transmin”) in Lima, Peru. • Three composite samples were collected from exisDng drill holes to represent each of the three major geometallurgical domains at El
Slide 20: Projected metallurgical performance of flotation plant
The metallurgical performance of an efficient flotaSon plant has been projected in the following table. Concentrate grade (%) or g/t Recoveries (%) Com posite ID Products Mass Pull (%) Cu, Zn, Pb, Au, Ag, Cu, Zn, Pb, Au, Ag, % % % g/t g/t % % % % % Concentrate Cu 2.46 19.7 17 1.31 8.18 748 58.2 8.24 7.
Slide 21: Highlights
HIGHLIGHTS Highlights include: Composite CPO-001 • P r e l i m i n a r y m e t a l l u r g i c a l Composite CPO-002 testwork confirmed that El Composite CPO-003 Domo feed is amenable for c o n v e n D o n a l fl o t a D o n technology. • Testwork also confirmed the producDon of commercial quality flota
Slide 22: Metallurgy – Micro photography of Cu conc
Metallurgy – Micro photography of Cu conc (G&T Metallurgical Service Lab) Large quantities of Sphalerite and Chalcopyrite liberate at 30 microns size. The fact that both minerals report to Cu conc is mainly due to reagents and flotation conditions (pH, slurry dilution in water, ORP, conditioning tim
Slide 23: Metallurgy – Micro photography
Metallurgy – Micro photography
Slide 24: El Domo Open Pit Mine Planning Process
El Domo project « Open Pit » Mine Planning Process: OpDmal Cone Nested Pits Mining Design CAPEX CalculaDon OPEX CalculaDon ProducDon Program Equipment Requirement
Slide 25: Preliminary Economic Assessment: Highlights
Preliminary Economic Assessment: Highlights The PEA evaluated the economics of an iniDal open pit operaDon followed by underground mining feeding to a convenDonal froth flotaDon plant. The report also studied several alternaDves sites for waste dump, tailing reservoir, processing plant and ancillary
Slide 26: Summary Capital and Operating Cost
Summary Capital and OperaSng Cost Costo de capital inicial y sostenimiento (CAPEX) con conSngencia Tajo Abierto Mina Subterranea CAPEX Inicial Sostenimiento Total Inicial Sostenimiento Total Mina 19,238,886 554,115 19,793,001 6,867,849 655,875 7,523,724 Panta de procesos 43,890,000 0 43,890,000 0 0
Slide 27: After-tax cashflow
Acer-‐tax cashflow FLUJO DE CAJA DESPUES DE IMPUESTOS 250 Milliones US$ 200 150 100 50 0 -A 2 -A 1 A1 A2 A3 A4 A5 A6 A7 A8 A9 A 10 A 11 A 12 A 13 A 14 -50 -100 -150 Flujo de Caja Flujo de caja acumulado
Slide 28: Sensitivity of NPV, Cashflow and IRR
SensiSvity of Net Present Value (NPV), Cashflow (CF) and Internal Rate of Return (IRR) versus changes in OperaSng Cost (Opex) and Capital Expenditures (Capex) Aner-‐tax cashflow NPV TIR FC Payback 86,716,077 30% 202,582,458 2 70% -‐36,040,207 -‐4% -‐13,529,328 1 75% -‐16,928,962 5% 21,542,679 5 8
Slide 29: Open Pit Input Parameters for Optimization
El Domo project « Open Pit » Input Parameters for OpDmizaDon: Point Values Cu/(Zn+Pb)<0.33 Pb US$/1% 3,7 0.33<Cu/(Zb+Pb)<3.0 Pb US$/1% -‐ Pb US$/1% Cu/(zn+pb)>3.0 -‐ Zn US$/1% 8,8 Zn US$/1% 3,9 Zn US$/1% -‐ Cu US$/1% Ag US$/1 Onz 4,7 9,0 Cu US$/1% Ag US$/1 Onz 31,5 9,0 Cu US$/1% Ag US$/1 Onz 44,6
Slide 30: Open Pit Input Parameters for Optimization (continued)
El Domo project« Open Pit » Input Parameters for OpDmizaDon (conDnued): Block Cost Parameters Unidad Valor Cost of Mine Clearance $/t material 2,75 Cost of Ore Mine Ore and Waste Transport per Bank $/t material $/bank 2,75 0,02 Cost of Mineral Processing $/t mineral 20,00 Block Design Parameters (Sl
Slide 31: Pit Optimization: Optimal Cone
El Domo project« Open Pit » Pit OpDmizaDon : OpDmal Cone Pit Shell 2D Sección 2 Sección 1 Pit Shell 3D
Slide 32: Final Pit Design
El Domo project« Open Pit » Final Pit Design:
Slide 33: Section 1 – Optimal Cone: E-W
El Domo project« Open Pit » SecDon 1 – OpDmal Cone: E-‐W OpDmum Cone
Slide 34: Section 2 – Optimal Cone: N-S
El Domo project« Open Pit » SecDon 2 – OpDmal Cone: N-‐S OpDmum Cone
Slide 35: Open Pit Coding Solids
El Domo project« Open Pit » Coding Solids PARAMETROS Densidad de Mineral 3.3 m3/tn Densidad de Desmonte 2.7 m3/tn Dominios Dominio 1 Zinc Cu/Zn <0.33 Dominio 2 Complejo 0.33<Cu/Zn < 3 Dominio 3 Cobre Cu/Zn >3 1 Zn 2 Complejo 3 Cu
Slide 36: Location of alternative main structures
LocaSon of alternaSve main structures (faciliSes, relaveras and desmonteras)
Slide 37: Underground Mine Design
El Domo project« Underground » Mine Design Topography VenDlaDon Shan Access Ramp Solid Cut off Eq. 1.0 % Cu OperaDon Ramp
Slide 38: El Domo Deposit Underground
El Domo Deposit « Underground »
Slide 39: Underground Block Models (NSR > 40)
El Domo project« Underground » Block Models (NSR > 40)
Slide 40: Underground Exploration Ramp
El Domo project« Underground » ExploraDon Ramp Longitud Tonelaje NSR Cu Zn Au Ag m t $/t % % g/t g/t 170 34,461 205.02 2.08 5.28 5.95 78.56
Slide 41: Geophysical Targets + Potential
Geophysical Targets + Potential
Slide 42: Curipamba VMS District
Curipamba VMS District The Curipamba District has excellent potential for additional discoveries: §The Curipamba (El Domo) is the major hydrothermal centre with VMS (volcanogenic massive sulphide) mineralization in the Ecuadorian Andes §Each of these centres should contain a VMS compliment similar
Slide 43: Other Curipamba Targets
Other Curipamba Targets 1. Sesmo: Hydrothermal Breccia + polysulphides, 15m @ 39.19/t Au, 741 g/t Ag in Trench 2. El Gallo: 597m drilling in 5 holes, highlighted results: 6.95m@ 4.51 g/t Au, 157 g/t Ag in drill hole 15; 8.25m @ 5.80 g/t Au and 66g/t Ag in drill hole 16 3. Sesmo Sur: 3,746 m drilling
Slide 44: Community and Social Activities
Community and Social Activities The Community Relations Plan of the company approved by the Ecuadorian State, promotes a sustainable environment of good vicinity in the zone of influence of the project Curipamba, through citizen participation practices and respect to the local identity. This will en
Slide 45: Appendix: Other projects
Appendix: Other projects Santiago Project - Hydrothermal Au and porphyry Cu-Au Rumiñahui - Au quartz stockwork Mendez - Cu-Zn-Mo porphyry Colombian Assets
Slide 46: Santiago Project
Santiago Project § 37 km NNW of Loja, area of 2,350 hectares § Newmont 1990: 4,578m drilled in 23 holes § Comprises a large mineralized hydrothermal system with the upper parts dominated by a rhyolite/dacite intrusive complex displaying intense quartz-alunite alteration. In the Northeast of the c
Slide 47: Santiago Project - Historical work 1993
Santiago Project - Historical work 1993 Newmont Drilling Porphyry Highlights (4578m in 23 holes): Hole # Interval (m) Width (m) Au (g/t) Cu (%) Cu equiv DDH-FU-001 0 - 323 323 0.37 0.23 0.47 DDH-FU-002 129 - 300 171 0.50 0.33 0.66 DDH-FU-008 0 - 300 300 0.24 0.11 0.27 DDH-FU-015 0 - 72 72 0.35 0.10
Slide 48: Previous Drilling
Previous Drilling Fierro Urco Vein – 1.5m @ 6.4 g/t Au and 136 g/t Ag 148m @ 0.36% Cu 37m @ 0.18%Cu 91m @ 0.16%Cu 10m @ 0.21% Cu 342m @ 0.23%Cu OPEN MINERALIZATION SOURCE: ARMENO MINES & MINERAS INC.
Slide 49: Rumiñahui Project
Rumiñahui Project Highlights: § Two concessions that cover a total area of 2,910 hectares of prospective Au-Cu-Ag targets § Located approximately 100 km northwest of Quito § Main targets identified to date are the original discovery areas previously worked by artisan miners § Gold values from ro
Slide 50: Mendez Property
Mendez Property Highlights: § Two concessions that cover a total area of 9,500 hectares in the Province of Morona Santiago § Cu-Zn-Mo (Gold) porphyry system § Copper mineralization is associated with 2-3% sulphides and multi-directional veinlets in a granodioritic to quartz diorite composition of
Slide 51: Background – Ecuador Mining Law 2013
Background – Ecuador Mining Law 2013 MID-‐SIZE MINING LARGE PROJECTS Underground Mining between 300 – 1,000 t/day > 1,000 t/day for Underground mining Open Pit Mining between 1,000 – 2,000 t/day > 2,000 t/day for Open Pit mining Mining concessions granted up to 10 years: 4 years early Mining conces
Slide 52: Contact Information
Contact Information Av. 10 de Agosto N37-232 y Villalengua Edif. Cominesa of. 31, Quito Tel:+593-2-227-8975 Ext. 103 info@salazarresources.com
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