Corporate Strategy Review January 2007
Forward Looking Statement Certain statements in this presentation constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and Canadian securities legislation. Such forwardlooking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company, or other future events, including forecast production, earnings and cash flows, to be materially different from any future results, performances or achievements or other events expressly or implicitly predicted by such forward-looking statements. Such risks, uncertainties and other factors include, but are not limited to, factors associated with fluctuations in the market price of precious metals, mining industry risks, recent operating losses, uncertainty of title to properties, risk associated with foreign operations, environmental risks and hazards, proposed legislation affecting the mining industry, litigation, governmental regulation of the mining industry, properties without known mineable reserves, uncertainty as to calculations of reserves, mineral deposits and grades, requirement of additional financing, uninsured risks, competition, dependence on key management personnel, potential volatility of market price of the Company s common shares, dilution and certain anti-takeover effects. Such information contained herein represents management s best judgment as of the date hereof based on information currently available. The Company does not intend to update this information and disclaims any legal liability to the contrary.
Agenda Our Philosophy Maximize shareholder value through: Discover Acquire Develop Operate Long Term Value
Discover Exploration in the Americas Focus and persistence Annual exploration expenses of ~$25 Million 50 geologists and liberal use of the drill Flexible Joint Ventures Nevada Rossi JV with Barrick Winnemucca Mnt. JV with Evolving Gold Mexico 100% owned Mercedes project Nicaragua JV with Radius Gold Peru Millo JV with SW Resources Brazil Bonsuccesso Chile El Peñón, Minera Florida & several new properties Argentina Esquel Leveraging a successful exploration record
Discover How do Discovery Costs Compare?* $/oz $80 $70 $60 $50?? $40 $30 $20 $10 $28 $15 $0 MDG MDG - Atacama Industry *per oz = exploration spending/ resource replacement
Discover Results of High Re-investment Rate M oz added to Reserves & Resources 1.6 1.4 1.2 1 0.8 0.6 GEO (silver) Gold 0.4 0.2 0 2000 2001 2002 2003 2004 2005 GEO = Gold Equivalent Ounces = silver converted
Discover Continuing Expansion at El Peñón Angosta Year of Initial Resource Development 1996 5 kilometers 1998 2002 2003 2004 2005 2006 Exploration Drilling Al Este Fortuna / Dominador 9 kilometers El Peñón Core Area
Discover Mercedes New Meridian discovery Easy logistics 100% Meridian Timeline: 20,000+ meters of diamond drilling commencing in February 2007 2-3 diamond drill rigs to be on site ~9 months to completion Expect to have NI 43-101 compliant resource prepared by year-end 2007 Site tour in 2007
Acquire Overview Continue with accretive acquisitions based on the following criteria: Low acquisition costs on recent Meridian purchases Project to exceed IRR of 10% Cash costs in lower half of industry average Less than ~$300/oz Low political risk Exploration upside The Americas Production upside Value-based growth
Acquire Minera Florida Acquired 100% of Minera Florida for $100M on July 1, 2006 Current resource >1.2M oz Au (with Ag and Zn by-products) Smooth transition with the workforce and community (app. 245 new Meridian employees) NI 43-101 compliant reserve update completed during Q4 06 Aggressive exploration campaign continues to further delineate more gold in the 2 new vein systems 2 drill rigs on site Expansion potential - reserves & resources
Acquire Jeronimo 56.7% operating interest acquired from CODELCO for $20 million (or ~ $15/oz) MDG required to complete feasibility estimated at between $10 to $15 million Total resource of approximately 2.8 million ounces Au MDG commencing metallurgical test work Q1 07 commence diamond drilling program for metallurgical samples met testing Scoping study underway with report expected mid-year 2007
$250 $240 Acquire Provide Value *2005/2006 Acquisition Cost (US$/oz) (does not include production costs) $200 $164 $150 $100 $122 <$100 $50 $20 ~$15 $0 Company Transaction Mine Transaction Development MDG - Minera Florida *estimate Fortuna Jeronimo *Source: Merrill Lynch, A Golden M&A Environment July 26, 2006
Develop Rossi JV Development plans approved on 40/60 JV with Barrick Gold Exploration continuing to expand Discovery Zone Guidance MDG 2007 production: 25,000 oz @ $280/oz MDG 2008+ production: 30,000 40,000 oz @ $290/oz
Develop Esquel Resource of 2.6M oz @ 14g/tonne on a land position of 1,400 sq km s Communicating responsible mining and sustainable development in local community Re-engineered to satisfy local concerns Esquel
Develop Potential Pipeline Project 2007 2008 2009 2010 2011 2012 2013 El Peñón (including Al Este) Minera Florida Rossi Jeronimo Mercedes Esquel Geology Drilling Resource Pre-feasibility Feasibility Pre-Production Development Production
Operate Responsibly El Peñón On schedule for increased mill and mine throughput to 2,800tpd Increasing silver grades to further enhance cash flow Continue to strive for operational excellence through continuous improvement measures Focus on Health & Safety Minera Florida Engineering study underway to increase production to ~100,000oz Au/year Tonnage to increase from 35,000tpm to 60,000tpm Cordon de Cantilliana, palm tree project Health & Safety
Operate Growing Gold Equivalent Production 500 450 400 350 300 250 200 150 100 50 0 2004 2005 2006 2007 Rossi Minera Florida El Penon (GEO) El Penon (Au)
Long Term Value Superior Profitability 700 600 500 144 Profit before tax Finding cost Non-cash Cash cost 400 300 200 100 0 548 28 58 0 75 82 300 *North American Industry top 8 includes: Barrick, Bema, Centerra, Goldcorp, Kinross, IAMGold, Newmont and Yamana. Based on RBC CM forecasts. YTD Meridian 2006E NA Industry
Our Philosophy 1. Discover History of discovery of gold at <$30/ounce Continual replacement of ounces at operations Discovery of 100% MDG opportunities Flexible JV s 2. Acquire Minera Florida has immediate impact of turning dollars to gold at < $100/ gold ounce Fortuna in production within 24 months of purchase, acquired at <$20/ gold equivalent ounce Jeronimo resource of 1.6 million ounces (MDG share) acquired for US$20million or $15.00/ oz 3. Develop Projects on time and on budget 4. Operate Responsible mining continue reputation for excellence Maximize operations for cash flow = Long Term Value
Long Term Value Lead by Being Different N.A. Industry Meridian Gold Growth Strategy 2005 Exploration Expenses (% of sales) Top 8* 1 Acquisitions 4% Organic 11% * 1 North American Industry top 8 includes: Barrick, Bema, Centerra, Goldcorp, Kinross, IAMGold, Newmont and Yamana 2006E Cash Costs ($US/oz) $300 $(20) * 2 RBC CM Share Dilution (1996 present) 417% 36% Share Appreciation (1996 Jan 11, 2007) 22% 612% * 2 Based on 2005 exploration spending
Long Term Value Implications of an M&A Strategy The Big N.A. Result: 1996-2006E increase in production 1996-2006 increase in shares outstanding Gold s Top 3* 179% 157% Failure of new reserve growth to offset previous aging asset base A reduction of each shareholder s fractional ownership otherwise known as dilution July 31, 1996 Share value $95.70 Better to have purchased 1oz of Au in 1996 January 11, 2007 Share value $82.55 +$4 in dividends Size does not equal value *N.A. Industry top 3: Newmont, Barrick, Kinross
Corporate Strategy Review January 2007 NYSE: MDG TSX: MNG 9670 Gateway Drive Suite 200 Reno, NV 89521 1-800-557-4699 www.meridiangold.com