Corporate Presentation October 2015 TSX: ORA

Transcription

1 Corporate Presentation October 2015 TSX: ORA

2 Cautionary Notes TSX: ORA 2 This presentation is subject to change without notice and does not purport to be comprehensive or contain all the information necessary to evaluate the subject matter discussed herein. Accordingly, this document should not form the basis of, and should not be relied upon in connection with, any investment in Aura Minerals Inc. (the Company ). This document is provided for general informational purposes only. The data included in this presentation regarding industry size, trends and prices are based on a variety of sources, third party studies and surveys, industry and general publications and our knowledge and experience in the industry in which we operate. While we believe such data to be accurate as of the date hereof, this information may prove to be inaccurate. As a result, you should be aware that industry data included in this presentation, and estimates and beliefs based on that data, may not be reliable. We have not independently verified the industry data included in this offering memorandum and cannot guarantee their accuracy or completeness. Forward-Looking Information. Certain information contained or incorporated by reference in this presentation, including any information as to our strategy, projects, plans or future financial or operating performance, constitutes "forward-looking statements. All statements, other than statements of historical fact, are forward-looking statements. The words believe, "expect", anticipate, contemplate, target, plan, intend, continue, budget, estimate, may, will, schedule and similar expressions identify forward looking statements. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by the company, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Known and unknown factors could cause actual results to differ materially from those projected in the forward-looking statements. Such factors include, but are not limited to: fluctuations in the spot and forward price of gold and copper or certain other commodities (such as silver, diesel fuel and electricity); changes in national and local government legislation, taxation, controls, regulations, expropriation or nationalization of property and political or economic developments in Canada and other jurisdictions in which the Company does or may carry on business in the future; diminishing quantities or grades of reserves; increased costs, delays, suspensions and technical challenges associated with the construction of capital projects; the impact of global liquidity and credit availability on the timing of cash flows and the values of assets and liabilities based on projected future cash flows; the impact of inflation; fluctuations in the currency markets; operating or technical difficulties in connection with mining or development activities; the speculative nature of mineral exploration and development, including the risks of obtaining necessary licenses and permits; risk of loss due to acts of war, terrorism, sabotage and civil disturbances; changes in U.S. dollar interest rates and other operating currencies; risks arising from holding derivative instruments; litigation; business opportunities that may be presented to, or pursued by, the company; our ability to successfully integrate acquisitions or complete divestitures; employee relations; availability and increased costs associated with mining inputs and labor. In addition, there are risks and hazards associated with the business of mineral exploration, development and mining, including environmental hazards, industrial accidents, unusual or unexpected formations, pressures, cave-ins, flooding and gold bullion, copper cathode or gold/copper concentrate losses (and the risk of inadequate insurance, or inability to obtain insurance, to cover these risks). Many of these uncertainties and contingencies can affect our actual results and could cause actual results to differ materially from those expressed or implied in any forward-looking statements made by, or on behalf of, us. Readers are cautioned that forward-looking statements are not guarantees of future performance. All of the forward-looking statements made in this presentation are qualified by these cautionary statements. Specific reference is made to the most recent Annual Information Form on file with the Canadian provincial securities regulatory authorities for a discussion of some of the factors underlying forward-looking statements. The company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required by applicable law. This presentation contains non-gaap measures. Please see Note 16 in the Company s management discussion and analysis for the period ended June 30, 2015 for a discussion on non-gaap performance measures.

3 Technical Information: NI Technical Reports TSX: ORA 3 Scientific or technical information contained herein was prepared in accordance with National Instrument Standards of Disclosure for Mineral Projects ( NI ), based on the technical reports set forth below and other information filed by the Company with the Canadian securities regulators, which include more detailed information with respect to the Company s properties, including the dates of such reports and the estimates included therein, details of quality and grade of each mineral reserve or mineral resource, details of the key assumptions, methods and parameters used in the reserve and resource estimates and other economic projections and a general discussion of the extent to which the resource estimates and the other estimates and projections included in the reports may be materially affected by any known environmental, permitting, legal, taxation, socio-political, marketing, or other relevant issues. For more detailed information regarding the Company and its mineral properties, you should refer to the Company s independent technical reports set forth in Appendix I and other filings with the Canadian securities regulators, which are available at Please see the appendix to this presentation for a NI mineral resource and mineral reserve statement for the Company s properties. San Andres With respect to the Company s San Andres mine, information contained herein is based on information as set forth in the technical report dated July 2, 2014, with an effective date of December 31, 2013, and entitled Mineral Resource and Mineral Reserve Estimates on the San Andres Mine in the Municipality of La Union, in the Department of Copan, Honduras (the San Andres Report ). Sao Francisco With respect to the Company s Sao Francisco mine, information contained herein is based on information as set forth in the technical report dated January 31, 2012, with an effective date of September 30, 2011, and entitled Resource and Reserve Estimates on the Sao Francisco Mine in the Municipality of Vila Bela da Santissima Trindade, State of Mato Grosso, Brazil (the Sao Francisco Report ). Aranzazu With respect to the Company s Aranzazu mine, information contained herein is based on information as set forth in the technical report with an effective date of September 18, 2015, and entitled Preliminary Economic Assessment of the Re-Opening of the Aranzazu Mine, Zacatecas, Mexico (the PEA ). The PEA includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves. There is no certainty that the PEA will be realized. Mineral resources that are not mineral reserves do not have demonstrated economic viability. Serrote The Company is considering a revised development and operating plan that may require lower capital expenditures and that features an earlier phased execution schedule than that reported in the technical report dated October 15, 2012, with an effective date of September 4, 2012, and entitled NI Technical Report on the Feasibility Study for the Serrote da Laje Project, Alagoas State, Brazil prepared by Micon International Limited under the guidance of SNC-Lavalin Inc. (the Serrote Report ).

4 Aura Minerals Investment Highlights TSX : ORA 4 Canadian mid-tier gold and copper production company focused on the operation and development of gold and base metal projects in the Americas. The Company s assets include: San Andres: producing gold mine in Honduras Continued operational improvements Increased gold production and decreased cash costs Sao Francisco: producing gold mine in Brazil Push-back in mine is expected to extend the mine life into the later part of 2015 and final processing into 2016 Aranzazu: copper-gold-silver mine in Mexico (operations temporarily suspended) Updated NI compliant PEA announced August 2015 Serrote: copper project in Brazil Significantly De-Risked Ernesto/Pau-a-Pique : gold mine in Brazil (operations temporarily suspended) Agreement announced April 30, 2015 to acquire the Project upon completion of certain conditions

5 Aura Minerals Strategy Going Forward TSX : ORA 5 Continue to reduce debt to almost nil by the end of the of 2016 Further our operational improvements at San Andres, Aura s principal cash flow generator Proceed with the NI studies for the Ernesto Pau-a-Pique Project, which will replace gold production from Sao Francisco Update the NI studies for Aranzazu (PEA to pre-feasibility) and Serrote as the basis for a financing to restart or re-market Aranzazu and procure a partner in combination with project financing for Serrote

6 Results and 2015 Guidance TSX : ORA 6 Operation 2014 Q1/2015 Q2/ Guidance San Andres Production (oz) 88,813 23,361 19,914 85,000 95,000 Cash Cost ($/oz) Sao Francisco Production (oz) 84,959 14,588 13,702 55,000 60,000 Cash Cost ($/oz) 1,134 1,347 1, ,100 Total Gold Production (oz) 181,165 37,949 33, , ,000 Cash Cost ($/oz) ,000 Aranzazu Production (lbs) 14,593,460 1,205, Cash Cost ($/lb)

7 San Andres Location Honduras Ownership 100% Project Type Open Pit, Heap Leach P&P Reserves 1 68,102 kt M&I Resources 1 36,739 kt Throughput 18,600 tpd Life of Mine 10 ~ 85,000 oz p.a. TSX: ORA 7 The San Andres mine is located in the highlands of western Honduras, within the Municipality of La Union, Department of Copán The property covers 399 hectares of land with well-developed infrastructure, including power, water supply, warehouses, maintenance facilities, assay laboratory and on-site camp facilities San Andres can be reached from both the city of San Pedro Sula located 150 km northeast and the country s capital, Tegucigalpa located 300 km southeast Note: Average production, cash costs, and life of mine are projections only. Please refer to the Company s management discussion and analysis and audited consolidated financial statements for the period ended June 30, 2015, which are available on SEDAR, for financial and operating results 1. Please see the appendix for a complete Mineral Reserve and Mineral Resource Statement.

8 San Andres TSX: ORA 8 Reserves and Resources Tonnes (kt) Grade (g/t) Contained (koz) Reserves Proven 14, Probable 53, Total Proven & Probable 68, ,129 Additional Resources M&I 36, Inferred 4, Additional Resources 41, Limited Capex Requirements Since acquiring San Andres in 2009, Aura has installed and upgraded a primary crushing system to enable better efficiency, provide stable throughput and ensure product quality Ongoing negotiations with local communities to enable enhanced mine development Workforce restructuring Updated NI Released in July 2014 Increase in Mineral Reserves and Mineral Resources announced in May 2014 with a 44% increase in total Proven and Probable Mineral Reserves and a 1.7% increase in Measured and Indicated Mineral Resources Planned tonnage increase going forward to approximately 7 Mt of processed material per year Current and anticipated reduction in operating costs Low-Cost Producer Projected LOM cash costs of US$900/oz Recoveries for 2014 and 2015 materially above those expected in July Cost reduction through the use of a combination of 2015 grid connection and solar power Note: Average production, cash costs, and life of mine are projections only. Please refer to the Company s management discussion and analysis and audited consolidated financial statements for the period ended June 30, 2015, which are available on SEDAR, for financial and operating results 1. Please see the appendix for a complete Mineral Reserve and Mineral Resource Statement.

9 Aranzazu 100% owned open pit and underground copper-gold mine in the state of Zacatecas, Mexico Temporary suspension of operations announced on January 15, 2015 TSX: ORA 9 PEA HIGHLIGHTS Updated resource model at US$45/tonne ( t ) Net Smelter Return ( NSR ) cut-off providing a tighter wireframe and allowing a more efficient focus on mining mineralization from the Underground: Notes: 1. Mineral Resources stated as at March Mineral Resources stated according to CIM guidelines. 3. Mineral Resources stated at a cut off of $45/t NSR. 4. The figures only consider material classified as sulphide mineralization. 5. The figures may not add due to rounding of the numbers to reflect that they are estimates. 6. Inferred Mineral Resources are too sepculative geologically to have the economic considerations applied to them that would enable them to be categorized as Mineral Reserves.

10 Aranzazu PEA - Highlights TSX: ORA 10 Conceptual mine production considering 3,090 tonnes per day ( tpd ) underground mine using a combination of longitudinal and transverse long hole mining methods for the majority of the deposit, with cut & fill in the upper levels of the deposit NSR cut-off of US$55/t for potentially mineable resources estimated at 6,072,000 tonnes of Measured and Indicated resources at average grades of 1.64% Copper ( Cu ), 1.16 g/t Gold ( Au ) and 20.0 g/t Silver ( Ag ), plus 4,759,000 tonnes of Inferred resources at average grades of 1.66% Cu, 1.21 g/t Au and 20.7 g/t Ag Preliminary mine re-design considering 30m stope heights which allows a reduction of development costs by approximately 40% compared to the old mine design An annual process plant throughput rate of 1,050,000 tonnes producing an annual average of 63,460 tonnes of Copper Concentrate at 23% Cu grade, 11.6 g/t Au and 236 g/t Ag. This is equivalent to 10.3 years life-of-mine ( LOM ) Future process plant recoveries (supported by historical results and metallurgical testing) of: - Copper at 84.0% - Gold at 59.4% - Silver at 70.3% - Arsenic at 37.9%

11 Aranzazu PEA - Highlights TSX: ORA 11 Average NSR value of the mineralization mined over the LOM is US$108.7/t LOM Operational Costs are US$47.8/t. LOM All-in Costs (including development) average US$ 57.7/t NSR calculation considers metal values as well as penalties associated with Arsenic content in the concentrate Initial Capital Expenditure is US$26.2M during Year 1 and Year 2, including US$10.7M outstanding debts with Suppliers and Contractors Total LOM CAPEX of US$119.1M The project s net present value ( NPV ) and internal rate of return ( IRR ) are US$103.1M and 81%, respectively, based on the following metal prices: US$3.00/Lb Cu, US$1,275.00/Oz Au and US$20.00/Oz Ag Payback period after the start-up of the operation is three years Average yearly EBITDA of US$47.6M with an average yearly undiscounted free cash flow of US$19.2M

12 São Francisco Overview and Outlook TSX: ORA 12 Open pit, heap leach, gravity circuit Mining expected to continue into late-2015 and processing to mid-2016 Key initiatives: Optimized mine plan to end of mine life Overall cost reduction program implemented Processing of tailings Additional goodbye cuts being investigated 2015 production guidance of 55,000 60,000 ounces at a cash cost per oz of $900 - $1,000* The Company is investigating multiple options to maximize the closure value of the assets of the São Francisco mine, including the disposal of the plant and equipment. *Note: Please refer to the Company s management discussion and analysis and audited consolidated financial statements for the period ended June 30, 2015, which are available on SEDAR, for financial and operating results

13 Serrote Project Provides Valuable Long-Term Option TSX: ORA 13 A wholly-owned development-stage copper-gold project which is the Company s core development asset Feasibility study completed with significant reserve position: ~1.0 B lbs. contained Cu (proven and probable)* Meaningfully increases copper exposure Initial target production of 32M lbs. per year Average LOM production of 66M lbs. per year The Company plans to update Serrote s and is considering a revised development and operating plan that would require lower capital expenditures and an earlier phased execution schedule Project is substantially de-risked and developed under Equator Principles Permitted for construction Main engineering package awarded and major processing equipment bids received Access to roads, railway, ports, towns, power and water Community and government support with Resettlement plan initiated Off-take alternatives Advanced funding negotiations underway Operating Metrics* Licensing Installation License Granted Plant Capacity 7Mtpa Copper Concentrator (flotation) LOM Production 831M lbs. Cu; 171Koz. Au Total / Avg. ~66M lbs. per year * LOM LOM Avg. Grade 13 years 0.52% Cu and 0.10 g/t Au (0.60% to 0.74% during first 4 years) LOM Strip Ratio 2.7:1 After Tax NPV 8% and IRR 191 million; 19.4% Capex LOM Cash Costs Effective Tax Rate $420 million (net of recoverable taxes) $1.40 per lb % (Net of State and Federal tax incentives) * Please see the Serrote Report and the appendix for the mineral reserve and resource statement. Reflects 100% ownership at Serrote. Serrote production estimates based on the Serrote Report

14 Corporate Social Responsibility Moving Forward Together TSX: ORA 14 Aura s corporate responsibility framework includes four core principles: Protect the environment and the health and safety of people Value honesty and integrity Promote open communication and transparency Strive to continuously improve corporate responsibility practices Aura s policy is to comply with municipal, state, and federal environmental legislation and work with regulatory authorities to identify and mitigate health, safety, and environmental issues Aura works closely with local authorities, employees, and community members to identify corrective actions and preventative measures that best promote responsible health and safety practices Aura is committed to sustainable development, safety, the preservation of the environment and the improvement of communities where the Company operates Please see Aura s Corporate Responsibility Report filed on its website and SEDAR for additional information

15 Capital and Debt Structure TSX: ORA 15 Share Structure as at August 11, 2015 Trading Symbol/Exchange: TSX: ORA Issued and Outstanding: 285,534,651 Options Outstanding: 19,283,770 Treasury Share Units: 1,292,145 1 Warrants Outstanding: 4,500,000 2 Fully Diluted: 310,610,566 Major Shareholders Directors, Management 3,016,090 (approx. 1.06%) Cartiera International N.V. 57,009,346 (approx %) Cyprus River Holdings Ltd 45,595,900 (approx %) Sercor Ltd 45,625,874 (approx %) Group Debt Outstanding (see Notes below) Auramet Trading LLC USD$8,281,000 2 Banco Itau BBA S.A. USD$8,937,000 3 Notes: ,261 RSUs were issued to the Company s CEO (277,338 RSUs) and CFO (120,000) on May 12, 2015 in lieu of a portion of their salaries 2. Stated as at June 30, On December 2, 2014, the Company obtained a $15,500,000 loan (the Gold Loan ) from a subsidiary of Auramet International LLC ( Auramet ). The Gold Loan is payable in 50 weekly installments of 305 ounces of gold commencing on February 13, In partial consideration of the Gold Loan, the Company issued 4,500,000 warrants to Auramet at an exercise price of CDN$0.11 exercisable until December 2, Stated as at June 30, Obtained by the Company s wholly-owned subsidiary, Mineracao Vale Verde Ltda. ( MVV ). No fixed terms of repayment

16 Appendix

17 Mineral Reserve & Resource Statement TSX: ORA 17 SAN ANDRES (as of December 31, 2013) Mineral Reserve Category Tonnes Gold Grade Contained Gold Ounces (000) (000) (g/t) Proven 14, Probable 53, Proven and Probable 68, ,129 1) The mineral reserve estimates are based on an optimized pit, which has been made operational, using $1,300/oz gold. 2) The cut-off grade used was 0.28 g/t for oxide material and 0.37 g/t for mixed material. 3) Contained metal figures may not add due to rounding. 4) Surface topography as of December 31, Mineral Resource Category Measured 16, Indicated 88, ,407 Measured & Indicated 104, ,660 Inferred 4, ) The Mineral Resource estimate is based on an optimized shell using $1,600/oz gold. 2) The cut-off grade used was 0.23 g/t for oxide material and 0.30 g/t for mixed material. 3) Contained metal figures may not add due to rounding. 4) Surface topography as of December 31, 2013, and a 200m river offset restriction have been imposed. 5) Mineral Resources are inclusive ofmineral Reserves. 6) The estimate of Mineral Resources may be materially affected by environmental, permitting, legal, marketing, or other relevant issues. 7) The Mineral Resources in this news release were estimated using the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Standards on Mineral Resources and Reserves, Definitions and Guidelines prepared by the CIM Standing Committee on Reserve Definitions and adopted by the CIM Council.

18 Mineral Reserve & Resource Statement TSX: ORA 18 SERROTE (for Sulphide material as of April 10, 2012) Classification 1 Material t (x 1,000) Cu (%) Au (g/t) Magnetite (%) NSR $/t Proven 2, 4 50, Probable 2, 3, 4 34, Total Mineral Reserves 85, The Measured and Indicated mineral resource was converted to mineral reserves based on $3.00/lb copper and $1,250/oz gold prices, 84% recovery for copper and 65% gold recovery within the ultimate pit design above an economic NSR cut-off of $7.45/t. The resources are factored by planned mining dilution and ore losses to define the reserves. 2. Above a NSR cut-off of $7.45 / tonne and inside the designed ultimate pit. 3. Includes 1,745k tonnes of additional low grade material as dilution. 4. Numbers may not add due to rounding. Although the Company believes the oxide and magnetite asset has potential economic value, it is not included in the reserve calculations. Measured 63, , Indicated 55, , Total Measured and Indicated Resources 119, ,315, Inferred 5, , Based on 0.12% CU Cut-off. 2. Numbers may not add due to rounding. 3. Oxide material and the magnetite from the sulphide material Although the Company believes the oxide and magnetite asset has potential economic value, it is not included in the resource calculations. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. 1. For additional information on the Mineral Reserves and Resources, please consult the Serrote Report.

19 Mineral Reserve & Resource Statement TSX: ORA 19 SAO FRANCISCO (as of December 31, 2013) Mineral Reserve Category Tonnes (000) Au (g/t) Contained Ounces (000) Proven 2, Probable 1, Total Proven and Probable Mineral Reserves 3, * The mineral reserve estimate is based on a cut-off grade of 0.41 g/t Au. Mineral Resource Category Measured 3, Indicated 1, Total Measured and Indicated Mineral Resources 5, Inferred Resources The mineral resource estimate is based on a cut-off grade of 0.34 g/t Au. Mineral resources are inclusive of mineral reserves. Numbers may not add due to rounding. For additional information on Mineral Reserves and Resources, please consult the Annual Information Form Published March ARANZAZU SULPHIDE MATERIAL (AS OF MARCH 2015) Mineral Resource Category Cut-off NSR ($/t) Tonnes (thou.) Cu (%) Cu (thou. Lbs) Au (g/t) Au (thou. Oz) Ag (g/t) Ag (thou. Oz) Measured 45 3, , ,212 Indicated 45 8, , ,613 Measured and Indicated 45 12, , ,825 Inferred 45 5, , ,201 Notes: 1. Mineral Resources stated as at March Mineral Resources stated according to CIM guidelines. 3. Mineral Resources stated at a cut off of $45/t NSR. 4. The figures only consider material classified as sulphide mineralization. 5. The figures may not add due to rounding of the numbers to reflect that they are estimates. 6. Inferred Mineral Resources are too sepculative geologically to have the economic considerations applied to them that would enable them to be categorized as Mineral Reserves.

20 Aura Minerals Inc. 155 University Avenue Suite 1240 Toronto, Ontario Canada Ph: Fax: Web: TSX: ORA 20