Metallurgical Coal Producer

Transcription

1 Metallurgical Coal Producer New Elk Coal Mine Q1 2011

2 Forward Looking Statement (Pt 1) The information provided in this presentation is intended exclusively for those viewing it. Reproduction or conveyance of any of the following information to others by any means is not to be undertaken without the written permission of Cline Mining Corporation ( Cline or the Company ). By viewing, the viewer agrees to these conditions. This presentation contains certain forward-looking information (also referred to as forward-looking statements ), which may include, but are not limited to, statements with respect to anticipated commencement dates of mining coal or metal production operations, projected quantities of future coal, metal production and anticipated production rates, operating efficiencies, and costs and expenditures. Information inferred from the interpretation of drilling results, exploration work and information concerning mineralization and mineral resource and reserve estimates may also be deemed to be forwardlooking statements, as it constitutes a prediction of what might be found to be present when and if a project is actually developed. In certain cases, forward-looking statements can be identified by the use of words such as could, expect, believe, will, estimate, anticipate, project and similar expressions and statements relating to matters that are not historical facts. In making the forward-looking statements in this presentation, the Company has applied several material assumptions, including, but not limited to, the assumption that: (1) market fundamentals will result in sustained coal demand and prices; (2) construction of the infrastructure that is required for the New Elk Coal Mine (defined below) will be completed within budgets and timetables; (3) the coal production operations of the New Elk Coal Mine, once completed, will be viable operationally and economically; and (4) the project financing, equipment financing and any other financing that may be needed will be available on commercially reasonable terms, if at all. Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking statements, including but not limited to: risks related to the integration of acquisitions; risks related to international operations; risks related to joint venture operations; actual results of current exploration activities; actual results of current reclamation activities; conclusions of economic evaluations; changes in project parameters as plans continue to be refined; future prices of coal and other minerals and metals; possible variations in ore reserves, grade or recovery rates; failure of plant, equipment or processes to operate as anticipated; accidents, labour disputes; delays in obtaining governmental approvals or financing or in the completion of development or construction activities and other risks of the mining industry, as well as those factors discussed in the most recent annual information forms filed on SEDAR by the Company and available at Although these disclosures have attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The Company disclaim any intention or obligation to update or revise any forward-looking statements that are included in its documents including information contained on this presentation whether as a result of new information, future events or otherwise, save and except in as may be required by applicable law. 2

3 Forward Looking Statement (Pt 2) This information does not constitute an offer to any other person or, a general offer to the public of, or the general solicitation from the public of, offers to subscribe or purchase any of securities of Cline. Any unauthorized use of the presentation is strictly prohibited. Distribution of this information to any person other than the offeree or its advisors that received it directly from the Company is unauthorized, and any disclosure of any of such information without the prior written consent of the Company is prohibited. Except as specifically provided herein, this presentation may not be copied or otherwise distributed, in whole or in part, by or to any person or in any medium whatsoever. Cautionary Note to United States Investors Concerning Estimates of Measured, Indicated and Inferred Resources This presentation uses the terms Measured, Indicated and Inferred Resources. United States investors are advised that while such terms are recognized and required by Canadian regulations, the United States Securities and Exchange Commission does not recognize them. Inferred Mineral Resources have a great amount of uncertainty as to their existence, and as to their economic and legal feasibility. It cannot be assumed that all or any part of an Inferred Mineral Resource will ever be upgraded to a higher category. Under Canadian rules, estimates of Inferred Mineral Resources may not form the basis of feasibility or other economic studies. United States investors are cautioned not to assume that all or any part of Measured or Indicated Mineral Resources will ever be converted into Mineral Reserves. United States investors are also cautioned not to assume that all or any part of an Inferred Mineral Resource exists, or is economically or legally mineable. The independent qualified persons under National Instrument Standards of Disclosure for Mineral Projects responsible for all technical data reported in this presentation are Gary L. Skaggs, P.E., P.Eng. and Tim Ross, P.E., of Agapito Associates, Inc., independent consultants to the Company 3

4 Company Snapshot December 2010 Ticker Shares Outstanding Options Warrants Market Cap Cash and facilities Major Shareholders Corporate Office Colorado Office Toronto Stock Exchange: CMK million 5.7 mil. (average C$1.70 strike) 0.7 mil. ($0.40 exercise) C$700 million approx. C$25 million Pinetree Capital (8%) Royal Bank (9%) Management (3%) Toronto, Ontario, Canada Trinidad, Los Animas County, Colorado, U.S.A. Lossan Bekisopa Iron Ore New Elk Coal Mine (Main Asset) Cline Lake Gold Madagascar 4

5 Experienced Management & Board Ken Bates, President, CEO & Director Experienced coal mining executive with Sherritt Gordon Mines and Denison Mines Dennis Mraz, COO Former Vice President & General Manager with Denison Mines, underground/open pit coal Ernest Cleave, CFO Senior financial professional with Goldcorp, Falconbridge, Xstrata, Bata South Africa Honorable Bill McKnight P.C., Chairman Previous Canadian Minister of Defence, Minister of Mines, Minister of Indian Affairs, Minister of Agriculture Peter Elzinga, Director Experienced corporate executive and director, diplomat, Chief of Staff Premier of Alberta, Member of Parliament Canada, President Conservative Party, Director EPCOR, United Protection Security. Dale Hendrick, Director Prominent Canadian mining executive and consultant with wide experience in large scale mining internationally. Previously with Noranda Mines, Kerr Addison Senator David Tkachuk, Director Member of the Senate of Canada and western Canadian businessman 5

6 New Elk Coal Mine, Colorado 6

7 Overview and Highlights of New Elk Coal resource of 315 million tons NI compliant (1) 25 miles paved highway from town of Trinidad, CO Coal plant; load-out for unit trains Mine permits in-place and environmental permits in place water, air etc. Underground rehabilitation complete Coal load-outs to unit trains to US steel mills and export terminals Steel rail-spur (24 miles / $20M) to be reinstalled on the right-of-way from mine to customers by unit train Q4 production wash-plant rehabilitation completed mid- November 2010 Proximity to major seaports and steel mills via BNR rail system, providing access to continental customers and export coal terminals on US Atlantic and Pacific coasts Production profile Mine first production started December 2010 Rate of production of 3.0 mil. tons per year by end of 2011 for 20 years (first stage plan) (1) A mineral resource estimate of 315 million tons of coal in place (87.6 million tons Measured and million tons Indicated) as detailed in technical report titled NI Technical Report of the New Elk Mine Project Los Animas County, Colorado, USA prepared by Gary L. Skaggs, P.E., P.Eng. and Tim Ross, P.E., of Agapito Associates, Inc. dated November 1, 2010 (effective March 13, 2010) available on SEDAR under the Company s profile. 7

8 Site Layout of New Elk Tails Tails Conveyor Rail Spur ROW Road to Trinidad Wash Plant Product Silos West Portal East Portal 8

9 Excellent On-Site Infrastructure Mine site infrastructure includes: 650 tph coal wash plant Twin 12,500 ton product silos Unit train rail load-out from silos Mine buildings Conveyor systems Coal stacker Electric substation Mine portal access from plant Coal waste dump Processing Plant Coal Stacker Waste Conveyor Electric Substation 9

10 Development Progress - New Elk Anti-clockwise: Mine Portal Entrance, Underground Conveyor, Apache Seam, Conveyor Entrance 10

11 Development Progress - New Elk Anti-clockwise: Crosscut 2, Crosscut 1, Rope Slope, First Coal 11

12 Close Proximity to Major Ports & Steel Mills VANCOUVER 1225 Mi. NEW ELK PROPERTY LOS ANGELES 801 Mi. NEW ORLEANS 957 Mi. Altos Hornos Steel Mill MEXICO 692 Ml CORPUS CHRISTI 890 Ml 12

13 Corpus Christi Bulk Terminal 13

14 Corpus Christi Bulk Terminal Bulk Terminal Facilities : 18 acres on the waterfront will serve as storage pad and drainage pond Served by three Class I rail companies - BNSF, UP, KCS railways 6.3 miles of rail track in facility 45-foot draft can accommodate Panamax vessels 70,000 tonnes 575 foot dock length Bulk ship loader can move 1,500 tons/hour Ship loader can load vessel from pad or rail Can support throughput of up to 3 million tpy Above: Ship loader, Below: View of Corpus Christi Bulk Terminal 14

15 New Elk Coal - Quality Typical Specifications Moisture 8.5% Volatile 35% Ash 8.5% Sulfur 0.5% Fluidity* +25,000 ddpms *Fluidity is a measurement of the plastic properties of coking coal. The ASTM approved method of measuring fluidity is performed on a Gieseler plastometer which measures the maximum fluidity of coking coal in dial divisions per minutes (DDPMs). The greater the ddpms the more fluidity in the coal. The maximum measurement on the instrument is 30,000. Above: Pre-production drilling at the New Elk Coal Mine (July 2010) 15

16 New Elk Economics Assessment Period Coal Production 20 years / 58 mil. tonnes Production to reach a rate of 3 million tpy by end of 2011with annual production of 3 million tpy thereafter All Figures in US$ / average over 20 years / in metric tonnes Financial Model/Planning Example for Coal at $200 Gross Coal Price $168 $200 Transportation & Handling $46 $50 Net Coal Price $122 $150 Operating Costs $51 $56 Margin $71 $94 IRR (%) 98.65% % NPV (10%) US$1.04 billion US$1.51 billion Economics of the New Elk Coal Mine are detailed in technical report titled NI Technical Report of the New Elk Mine Project Los Animas County, Colorado, USA prepared by Gary L. Skaggs, P.E., P.Eng. and Tim Ross, P.E., of Agapito Associates, Inc. dated November 1, 2010 (effective March 13, 2010) available on SEDAR under the Company s profile. 16

17 Summary New Elk Production started December 2010 Low financing requirement vs. green-field Permits in place Compelling stock valuation Experienced management team and board Substantial coal resource size Low risk jurisdiction Additional value from non-core properties 17

18 Contact Details Ticker Address Website 181 Bay Street, Heritage Building 3rd Floor Toronto Ontario M5J 2T3 Telephone Fax