Slide 1: An emerging intermediate gold producer Operations Report AGM
TSX: AGI February, 2006 An emerging intermediate gold producer Operations Report AGM 24 May 2006
Slide 2: Operations Topics
Operations Topics • Overview • 2006 Objectives • Expansion to 15,000 tpd • Production to date • Plan for the remainder of the year • Target objectives for gold production • Leach pad construction • Escondida mill • Road construction • Impact on local communities and Sonora
Slide 3: Overview
Overview 15,000 tpd heap leach Plant & Facilities 140-155,000 Au oz per year 9 million tonnes mined in pit 17,000 tpd crusher $210 – 225 per oz. 48”x60” Jaw 7’ standard 7’ short head x2 20,000 tpd overland conveyor 160,000 sq m leach pad 25,000 tpd ADR plant 6,000 mw power plant
Slide 4: 2006 Objectives
2006 Objectives • Complete expansion to 15,000 Q2, 2006 • Produce gold at $210 - 225/oz • Reduce operating costs • Continue Reserve development in Salto, Mina Vieja and Escondida • Complete the access road • Discover more deposits in the Mulatos District • Design recovery plant for Escondida Hanging
Slide 5: Expansion from 10,000 tpd to 15,000 tpd
Expansion from 10,000 tpd to 15,000 tpd • Equipment • Seven 100 ton Caterpillar haul trucks • Two 992 front end loaders (delivered in June) • Two D9T dozers • One 16H grader • One blast hole drill • Other • Services • Cost at completion $20 million • Status Complete during second quarter
Slide 6: Mine production and pad loading
Mine production and pad loading Mine Production Pad Loading (000 Tonnes) (000 Tonnes) Period Ore Waste Total ROM Crushed Total 2005 800 5,276 6,076 800 800 Q1 – 06 1,118 2,273 3,391 782 332 1,114 Q2 – 06 1,320 2,576 3,896 586 727 1,313 Q3 – 06 1,320 2,576 3,896 191 1,170 1,361 Q4 – 06 1,320 2,575 3,
Slide 7: Target objectives for Gold Production
Target objectives for Gold Production • April YTD 32,445 oz Au Produced • 2006 140 to 155,000 oz Au @ $210 to 225/oz • 2007 + 200,000 @ - $200/oz • 2008 Escondida Hanging Wall High-grade mill • 2008 + 250,000 @ - $200/oz Metallurgical performance • Expect Feasibility Study Recovery @ 73% • Cyanide c
Slide 8: Leach pad construction
Leach pad construction Phase One A 160,000 sq m Expansion storm Phase Two - Expansion water pond 2005 Phase One B 200,000 sq m 2006
Slide 9: New leach pad - May 2006
New leach pad - 22 May 2006 EX Avanos GOLD INc.
Slide 10: Escondida Mill
Escondida Mill • Al Hayden and Maurice Tagami contracted to complete the mill option trade-off study • Metallurgical samples ready for testing • Heap leach tests contemplated • 2000 tpd is minimum size • 2000 tpd allows pulp agglomeration without a tailings dam • Higher recovery from higher grade Es
Slide 11: Road Improvement and Construction
Road Improvement and Construction Total 120 kilometers new & improved 23 remaining to complete in 2006 Commute 3 hours shorter
Slide 12: Impact on Sonora and Mexico
Impact on Sonora and Mexico • Direct employment 352 • Indirect employment at 3:1 1,056 • Annual payroll including benefits and taxes US$6,000,000 • Annual gold production in ounces 140 to 155,000
Slide 13: Impact to the town of Mulatos
Impact to the town of Mulatos • Employees from Mulatos 25 • Contractor employees from Mulatos 7 • Current estimated residents of Mulatos 200 • Company provides doctor and medicine for both Mulatos and Matarachi • Company provides 24x7 doctor for emergencies • Schools supported, Día del Niño, scholar
Slide 14: Disclaimer
DISCLAIMER All amounts in U.S. dollars unless otherwise stated. This may include certain “forward-looking statements” within the meaning of the United States Securities Exchange Act of 1934, as amended. All statements, other than statements of historical fact, included in this presentation, includin