Silver Elephant Mining Corp · TSX:ELEF
Silver Elephant Mining — Prophecy Coal — Investor Presentation (July 2013)
36 slides from Silver Elephant Mining's investor presentation, July 2013
Slide 1: Chandgana Mine Mouth 600MW Power Plant Project
Chandgana Mine Mouth 600MW Power Plant Project TSX: PCY | OTC-QX: PRPCF | Frankfurt: 1P2 www.prophecycoal.com July 2013
Slide 2: Disclaimer
Disclaimer This Presentation contains forward-looking information as defined under applicable securities law in Canada. Forward-looking information can be identified by the use of words such as "anticipated", "targeted" and "expect" or variations of such words and phrases or state that certain actio
Slide 3: Chandgana Power Project Summary
Chandgana Power Project Summary • Most advanced Mine Mouth IPP in Mongolia • Mongolia: Fast growing country in need of energy • Located in Central Mongolia, 300 km east of Ulan Bator • Mine mouth plant next to coal deposit (> 1 billion tonnes) • Near existing Mongolian 220kV grid (150 km) • Coal min
Slide 4: Prophecy Organization Chart – current
Prophecy Organization Chart – current Canada Prophecy Coal (TSX: PCY) 100% 100% 100% 100% Chandgana Coal Prophecy Power Red Hill 0912601 B.C. (Mongolia) (Mongolia) (Mongolia) (Canada) Assets: Coal Mines Asset: Future Power Plant Asset: Coal Mine Assets: Canada - Chandgana Tal - Power Plant Licenses
Slide 5: Chandgana Power Project Summary
Chandgana Power Project Summary Chandgana aerial view Project Map > 1 Bt coal, featuring 30 - 60m thick coal seam outcrop 5
Slide 6: Mongolia Power Market Summary
Mongolia Power Market Summary • Mongolian power sector is divided into the Central, Western and Eastern Systems; • The Central Energy System (CES) is the largest and operates five TPPs with combined installed capacity of 814MW; • Power demand exceeded peak capacity in 2013 (including import from Rus
Slide 7: Power Supply and Demand
Power Supply and Demand MW Power Supply and Demand – CES (MW) 1600 - 525 power deficit is -425 1400 projected to 1200 increase to 525MW in 2016 - 228 1000 -100 800 600 400 200 0 2007 2008 2009 2010 2011 2012 F2013 F2014 F2015 F2016 TPP-4 TPP-3 TPP-2 DTPP ETPP Wind Farm 50MW TPP-4 (extention) Import
Slide 8: Power Supply
Power Supply • Country’s total installed capacity is about 870 MW • More than 91% of electricity is generated by CHP’s Installed capacity Available capacity Plant Constructed Year MW 2012 MW CHP#2 1961 21.5 9 CHP#3 1968 136 109 CHP#4 1983 580 458 Darkhan Plant 1965 48 44 Erdenet Plant 1987 28.8 27 C
Slide 9: Power Demand
Power Demand • During the period of 2007-2012, electricity consumption in Mongolia increased on an average at 6% per year; MW Power Demand MW 1600 1400 1200 1000 800 600 400 200 0 2007 2008 2009 2010 2011 2012 F2013 F2014 F2015 F2016 Residential Industry - Non Mining Mining Source: NETGCO 9
Slide 10: Mongolian Parliament Resolution #72
Mongolian Parliament Resolution #72 • Mongolian Parliament Resolution #72 (09.12.2010) to set power and heat tariffs from 2014 for power sector based on the real costs of power generation and distribution - to completely liberalize electricity generation and distribution prices; • Attract private in
Slide 11: Electricity Tariffs Increases
Electricity Tariffs Increases Heat Tariff Electricity Tariff Year % Increase % Increase 2005 19.3% 8.5% 2007 - 4.3% 2008 39.0% 27.8% 2010 14.5% 17.4% 2011 12.0% 8.0% Average annual increase 21.0% 9.9% since 2005 Source: Energy Regulatory Commission 11
Slide 12: Electricity Tariff 2005 - 2016
Electricity Tariff 2005 - 2016 • Energy Regulatory Commission is planning to increase electricity tariffs by 15% in 2013 – pending approval by the Government; Electricity Price - MNT/kWh 160 140 120 MNT/kWh 100 80 60 40 20 Exchange Rate MNT/USD – 1,405.8 0 2005 2006 2007 2008 2009 2010 2011 2012 F20
Slide 13: Demand Forecast 2015
Demand Forecast 2015 • Demand in the CES is driven by development of UB and start of mining projects; • Demand in South Gobi is driven by OT (copper & gold) and TT (coking coal) mines; OT investment to date (US$ 6billion) 2015 CES power demand Chandgana increase Power Plant 331 MW 2015 Southern Regi
Slide 14: Demand Forecast 2015
Demand Forecast 2015 Chandgana Power Plant Source: NETGCO, based on the approved power usage applications 14
Slide 15: Power Demand by Region Additions
Power Demand # Consumers’ names Approved Capacity 2012 2013 2014 2015 1 Oyutolgoi 300 60 100 150 2 Tavanntolgoi 40 5 10 40 3 Zamyn-Uud 32 10 32 4 Tsagaansuvraga 75 46 46 75 5 Taishun development 45 5 10 45 6 Senj sant 9 5 5 9 7 МАК 20 5 5 5 20 8 Sanjin Ord 16 3 3 5 16 9 МIZU 20 5 5 5 20 10 Erel 10 1
Slide 16: Net Availability and Capacity Charge Hours
Net Availability and Capacity Charge Hours • CFB Technology exhibits 8,000+ annual available hours, with 10% internal aux heat consumption • PPA is to purchase average 243MW • Asian Development Bank states: Overall the CFB technology is technically matured, operationally reliable, commercially avail
Slide 17: Transmission Line Capacity
Transmission Line Capacity UlaanBaatar Baganuur Chandgana (300MW) 130km 150km 180km Choir Gobi (OT, TT) Chandgana – Baganuur: Government to construct double circuit 220kv OHTL with 250 MW capacity Baganuur to UlaanBaatar: Existing double circuit 220kv OHTL with 180 MW capacity Baganuur to Choir: Exi
Slide 18: Proposed Tariff
Proposed Tariff • A Weighted Average Tariff from 2017 to 2041 (24 years), subject to indexation • With Introductory First year (2016) Real Tariff, subject to indexation • Tariff is set yearly to recover capital cost, o&m, and fuel payments • Tariff consists of Capacity (Capex, O&M) and Energy (Fuel)
Slide 19: Chandgana PP Proposed Tariff Comparison
Chandgana PP Proposed Tariff Comparison Chandgana PP proposed tariff* is lower than tariff for imported power from Russia and China, and wind farm project USc/kWh *- Total tariff including coal costs at 17.7/t, in real terms and excludes compounded inflation which is estimated to be 3-4% per year So
Slide 20: Chandgana Coal Supply Agreement (CSA)
Chandgana Coal Supply Agreement (CSA) • Signed in June 2013 • Chandgana Coal will supply 3.6 million tonnes of coal annually, at USD17.7 per tonne for 25 years. •The CSA coal price is competitive to Mongolian domestic thermal coal prices and is subject to annual indexing on based on the USA CPI Inde
Slide 21: Chandgana Coal Preliminary Economic Assessement
Chandgana Coal Preliminary Economic Assessement • ChandganaTal mining licenses contain an estimated 124 million tonnes of coal resources in the measured category. •The mine will be open pit located approximately 2 km from the proposed power plant site. The average waste to ore strip ratio is estimat
Slide 22: Key Project Milestone
Key Project Milestone 2010: Detailed Environmental Impact Assessment Study Approved Chandgana Mining License Received 2011: 600MW Power Plant Construction License Received Tendering Process on EPC, and Discussion on PPA 2012: Mongolian election, Tariff and PPA application Submission 2013: Land Use R
Slide 23: Permits, Activities Completed in Q1 2013
Permits, Activities Completed in Q1 2013 • All major permits to start mobilization at site received • Land permit received in Feb 2013, land now in possession of Prophecy • Water use permit for drinking and initial construction requirement received • Temporary electricity supply permit for 2.25MW re
Slide 24: Mobilization Activities in 2013
Mobilization Activities in 2013 • Work on site boundary poles installation to commence on 15th May • Work for access road to site being tendered • Temp. supply for 35/6.6 kv, 2.25 MW design work awarded • Water well and pump house construction tender issued. Drinking water purification plant being t
Slide 25: Activities: Remaining 2013 to Q1 2014
Activities: Remaining 2013 to Q1 2014 Bring Temporary 2.5MW,35/6.6 KV Electricity Supply to Site Site Activities (Drinking water well and treatment,office, temp accommodation, power supply, boundary wall, access road). Complete Design of Power Plant (EPC), Owner Design Engineer Supervision Mobilisat
Slide 26: 2014 – 2016 Budget and Plan (300MW)
2014 – 2016 Budget and Plan (300MW) 2014 : • Completion of main building, auxiliary equipment foundation in turbine, chimney foundation, DM water, unit auxiliary power, completion of SG frame, start SG hydraulic test, turbine and boiler erection. Government start Transmission line construction 2015:
Slide 27: Ulaan Ovoo: Back to Basics
Ulaan Ovoo: Back to Basics 27
Slide 28: Ulaan Ovoo Coal
Ulaan Ovoo Coal 28 Source: Prophecy 28
Slide 29: Ulaan Ovoo Overview
Ulaan Ovoo Overview Single, thick coal seam • Outcrop is 50 m wide (max 200m) • 200 Mt M&I resource • 20+ years mine life • 5,204kcal/kg (9,367 btu/lb) • Low ash 12.46% & sulfur 0.40% First 20 million tonnes : no washing Strip ratio of 2:1 Source: Prophecy 29 Source: Prophecy
Slide 30: Near by Russian Power Plants
Near by Russian Power Plants Blending Plant Ulan- Ude Power Demand: 2mt pa Plant 1 & 2 Demand: 1mt pa Gusinoozersk Power Plant Tugnuskiy Mine Demand: 1mt pa Zeltura Border Kharanor Power~300kms Ulaan Uvoo Plant Demand: 0.5mt pa 30 Source: Prophecy
Slide 31: Ulaan Ovoo production data
Ulaan Ovoo production data Cost per Coal ton in 2011-2012 At Mine Gate Cost/Ton Coal mining and Fuel $11-$12 On-Site Coal Handling $2 Administration & Overheads $1 Total $14-15 Transport to Rail Siding and Loading Source: Prophecy Cost/Ton Trucking and Fuel $15-16 Coal Handling $1 Administrative $1
Slide 32: Ulaan Ovoo: Over $55million Invested
Ulaan Ovoo: Over $55million Invested H2 2013 Potential mine-restart, Possible Zeltura border re-opening, Negotiating Sizable Mongolian and Russian Offtake H1 2013 Sold 45kt from stockpile, 106kt tonnes stockpile remain, Total over $55 million invested to date H2 2012 Production Curtailed July, lack
Slide 33: Ulaan Ovoo Production Target
Ulaan Ovoo Production Target • Negotiating with several private new and existing Mongolian customers with monthly contract volume between 2,500 to 10,000 tonnes per month. • Negotiating with several Russian entities to supply coal to major Buryat power plants with monthly contract volume between 30,
Slide 34: Ulaan Ovoo & Chandgana: Disclaimer
Ulaan Ovoo & Chandgana: Disclaimer The production targets are to provide investors and shareholders with Company’s intentions regarding the Ulaan Ovoo and Chandgana project. The Company cautions that at this time there are no specific plans to resume mining operations at Ulaan Ovoo, no Russian coal
Slide 35: Company data
Company data Symbol : PCY on Toronto Stock Exchange (TSX) Total Shares Outstanding: 234,783,000 shares, 52 week trading range: $0.325 – $0.08 Contact: info@prophecycoal.com, +1 604-569-3661 Power Plant Signed Coal Land Use Supply Agmt Rights John Lee full Received time at PCY Power Tariff 35
Slide 36: Contact Information
Contact Information Phone: 604-569-3661 Fax: 604-569-3617 Toll Free: 1-800-459-5583 info@prophecycoal.com TSX: PCY Mongolia Presents Prophecy with Power Plant Land Use Rights 36