T R A D I N G – CORPORATE FINANCE – EQUITY RESEARCH - ASSET MANAGEMENT
Lima Stock Exchange – Junior Mining Companies Alberto Arispe, CEO, Head of Research Humberto Leon, Analyst March 2014
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This document has been prepared solely to be accompanied by an oral presentation and it does not carry any right of publication or knowledge to any other third party.
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Junior Mining in Lima Stock Exchange 2 Agenda
Peru: Highlighting the importance of Peru as a A Mining top metal producer. Page 04 - 15 Country
Introducing Lima Stock Exchange’s LSE Venture Page 16 - 33 Segment Venture Segment.
Describing the mining companies that list Listed in Lima Stock Exchange’s Venture Page 33 - 59 Companies Segment.
Junior Mining in Lima Stock Exchange 3 Peru – A mining country: Peru in numbers
• Name: Republic of Peru • Capital: Lima • Surface: 1,285,216 km2 • Population: 30.48 million (estimated by INEI) • Regions: 24 • Official Language: Spanish • President: Ollanta Humala Tasso (Ruling period 2011 – 2016)
• Economic Policy • Market Economy • Autonomous Central Bank: Chairman Julio Velarde • Inflation target @ 1% - 3% annually • Exchange Rate: Floating with Central Bank’s intervention • Debt rating: Investment Grade o S&P BBB+ o Moody’s Baa2 o Fitch BBB+
Source: World Bank, Peru’s Central Bank
Junior Mining in Lima Stock Exchange 4 Peru – A mining country: Peru in numbers
Average growth last 10 years: 12% Real GDP Evolution (2000 - 2013) 6.6%
10% 9.8% 8.9% 8.8%
8% 7.7% 6.8% 7.0% 6.3% 6.0% 1 6% 5.0% 5.0% 5.0%
4.0% 4% 3.0%
2% 0.9% 0.2% 0% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014e
Source: Peru’s Central Bank, Kallpa Securities SAB
Junior Mining in Lima Stock Exchange 5 Peru – A mining country: Peru in numbers
PBI nominal • Nominal GDP 2013*: USD 212.13 billion 2013 = S/. Mining in PBI: 3.6% • GDP per capita 2013*: USD 6,960 572,763 MM y Mining in Exports: 57% T.C. promedio 2013 = 2.7 GDP: Peru vs South America Retail GDP by Industry (2013)
Agroindustrial Nominal GDP Per capita GDP Country (MM USD) (USD) 14% 15% Brazil 2,224.91 11,335 Services Venezuela 381.13 12,734
Argentina 477.03 11,614 2% Colombia 370.51 7,762 4% 8% Construction Chile 268.31 15,372 6% Peru 203.98 6,811 Mining Ecuador 87.50 5,639 Uruguay 49.92 14,703 Bolivia 27.04 2,625 Utilities Paraguay 24.60 3,685 40% Cifras al 2012
Industrial • Mining industry’s contribution to GDP: 3.6% (5.4% in 2002) • Mining industry’s contribution to Exports: 57%
Source: Central Bank, CEPAL, Kallpa Securities SAB. * Provisional.
Junior Mining in Lima Stock Exchange 6 Peru – A mining country: GOLD - Top producers
6° Top gold's producers (thousand of fine oz.) Country 2007 2008 2009 2010 2011 2012 Place China 8,841 9,163 10,288 11,092 11,639 11,896 worldwide Australia 7,941 6,912 7,202 8,391 8,295 8,038 USA 7,652 7,491 7,170 7,427 7,523 7,395 Peru: Top gold producers (2012) Russia 5,047 5,531 6,200 6,174 6,430 6,591 Production South Africa 8,121 6,840 6,354 6,067 5,819 5,466 Rank Company (thousand oz.) Peru 5,473 5,783 5,916 5,275 5,343 5,187 Indonesia 3,789 2,070 4,180 3,858 3,086 3,054 1 Yanacocha 1,346 Canada 3,286 3,054 3,130 2,926 3,119 3,279 2 Barrick Misquichilca 865 Uzbekistan 2,733 2,733 2,894 2,894 2,926 2,894 3 Buenaventura 274 Ghana 2,322 2,346 2,568 2,636 2,572 2,861 4 Rio Alto 200 Mexico 1,265 1,619 1,652 2,334 2,701 2,797 5 Horizonte 184 P. N. Guinea 1,850 2,169 2,180 2,180 2,122 1,929 Others 2,318 Brazil 1,595 1,758 1,802 1,865 1,993 1,800 Others 15,363 15,595 17,370 19,167 22,023 22,184 Total 5,187 Total 75,279 73,065 78,906 82,286 85,591 85,371 Ranking 5 5 6 6 6 6 Peru/World 7.27% 7.91% 7.50% 6.41% 6.24% 6.08% Prod. (%)
Source: Ministerio de Energía y Minas – Ministry of Energy & Mining
Junior Mining in Lima Stock Exchange 7 Peru – A mining country : SILVER - Top producers
3° Place worldwide Top silver's producers (thousand oz.) Country 2007 2008 2009 2010 2011 2012 Mexico 100,806 104,050 114,259 141,809 133,437 136,641 Peru: Top silver producers (2012) China 86,807 90,022 93,237 112,528 118,958 122,173 Peru 112,574 118,505 126,118 117,043 109,919 111,854 Production Rank Company Australia 60,411 61,922 52,566 59,929 55,460 61,086 (thousand oz.) Russia 29,300 36,400 42,200 43,596 43,404 48,226 1 Volcan 22,028 Bolivia 16,879 35,808 42,622 40,490 39,018 41,796 2 Antamina 13,291 Poland 38,549 37,327 38,806 37,970 37,520 37,616 3 Buenaventura 14,665 Chile 62,259 45,172 41,829 41,368 41,515 36,330 4 Minera Suyamarca 7,505 USA 41,153 40,188 40,188 41,153 36,009 33,758 5 Cía. Minera Ares 6,327 Canada 27,664 23,396 20,284 19,164 18,390 17,040 Others 91,434 93,605 104,433 109,587 115,630 125,388 Others 48,038
Total 667,836 686,397 716,542 764,637 749,258 771,909 Total 111,854 Ranking 1 1 1 1 2 3 Peru/World 16.86% 17.26% 17.60% 15.31% 14.67% 14.49% Prod. (%)
Source: Ministerio de Energía y Minas – Ministry of Energy & Mining
Junior Mining in Lima Stock Exchange 8 Peru – A mining country: COPPER - Top producers
3° Top copper's producers (thousand MT) Place Country 2007 2008 2009 2010 2011 2012 worldwide Chile 5,557 5,328 5,394 5,419 5,260 5,370 China 946 1,090 1,070 1,200 1,310 1,500 Peru: Top copper producers (2012) Peru 1,190 1,268 1,276 1,247 1,235 1,299 Production USA 1,170 1,310 1,180 1,110 1,110 1,150 Rank Company (thousand Australia 870 886 854 870 958 970 MT) Russia 740 750 676 703 713 720 1 Antamina 463 Zambia 509 555 697 690 668 675 2 Southern Peru Copper 311 148 234 310 380 520 580 3 Cerro Verde 279 Canada 596 607 495 525 566 530 4 Xstrata Tintaya 52 Mexico 336 269 228 270 443 500 5 Gold Fields La Cima 38 Indonesia 797 633 999 872 543 430 Poland 452 429 439 425 427 430 Others 157
Kazakhstan 407 422 406 380 417 420 Total 1,299 Others 1,785 1,804 1,895 1,905 1970 2100 Total 15,503 15,583 15,918 15,997 16,145 16,674 Ranking 3 3 2 2 2 3 Peru/World 7.68% 8.14% 8.02% 7.80% 7.65% 7.79% Prod. (%)
Source: Ministerio de Energía y Minas – Ministry of Energy & Mining
Junior Mining in Lima Stock Exchange 9 Peru – A mining country: ZINC - Top producers
3° Place worldwide Top zinc's producers (thousand MT) Country 2007 2008 2009 2010 2011 2012 China 3,040 3,340 3,330 3,700 4,310 4,600 Peru: Top zinc producers (2012) Australia 1,514 1,519 1,290 1,479 1,515 1,490 Production Peru 1,444 1,603 1,513 1,470 1,256 1,281 Rank Company (thousand USA 803 778 736 748 769 748 MT) India 539 614 695 700 710 690 1 Volcan 306 Mexico 427 397 384 518 632 630 3 Antamina 270 Canada 630 751 699 649 612 640 2 Milpo 186 Kazakhstan 445 446 442 459 495 420 4 Los Quenuales 113 Bolivia 214 384 431 411 427 430 5 Atacocha 45 Ireland 401 398 386 342 340 345 Others 1,688 1,620 1,555 1,673 1,782 1,770 Others 361
Total 11,146 11,848 11,461 12,150 12,848 13,044 Total 1,281 Ranking 3 2 2 2 3 3 Peru/World 12.96% 13.53% 13.20% 12.10% 9.78% 9.82% Prod. (%)
Source: Ministerio de Energía y Minas – Ministry of Energy & Mining
Junior Mining in Lima Stock Exchange 10 Peru – A mining country: Mining investments – Estimated portfolio
By Country 2.0% 0.8% MM USD % 4.0% China China 13,839 23.2% 5.3% USA 9,950 16.7% USA Canada Canada 8,947 15.0% 23.2% Peru 5,636 9.5% 6.4% Peru Switzerland 5,200 8.7% Switzerland U.K. 5,000 8.4% 8.4% U.K. Australia 3,790 6.4% Mexico 3,160 5.3% Australia 8.7% 16.7% Brazil 2,370 4.0% Mexico South Africa 1,200 2.0% 9.5% Brazil Japan 490 0.8% 15.0% South Africa Total 59,582 Japan • China is the main mining investor in Peru 1.4% 3.1% 1.4% 0.2% By Mineral 5.5% MM USD % Copper 35,765 60.0% Copper Gold 9,822 16.5% Gold Iron 7,080 11.9% 11.9% Iron Polymetallic 3,264 5.5% Polymetallic Phosphates 1,870 3.1% Phosphates Silver 840 1.4% 16.5% 60.0% Silver Zinc 816 1.4% Potassium 125 0.2% Zinc Total 59,582 Potassium • Copper is the metal that will receive the highest investments
Source: Ministerio de Energía y Minas – Ministry of Energy & Mining
Junior Mining in Lima Stock Exchange 11 Peru – A mining country: Mining investments – Regional participation
Region MM USD % Apurímac 11,990 20.12% Arequipa 9,802 16.45% Cajamarca 9,132 15.33% Moquegua 5,820 9.77% Junín 5,670 9.52% Pasco 3,432 5.76% Cusco 2,736 4.59% Piura 2,645 4.44% Ica 2,483 4.17% Lambayeque 1,599 2.68% Áncash 1,310 2.20% Puno 920 1.54% • Apurimac will recieve Huancavelica 630 1.06% the highest investment Tacna 600 1.01% amounts. • Here are the most Ayacucho 370 0.62% important copper Huánuco 350 0.59% projects such as Las Lima 93 0.16% Bambas. Total 59,582
More than 10% Between 1% and 10% Less than 1%
Source: Ministerio de Energía y Minas – Ministry of Energy & Mining
Junior Mining in Lima Stock Exchange 12 Peru – A mining country: Future copper producers in Peru
Source: “Copper in Peru: Facts and Challenges”, a presentation by Jorge Acosta, Alberto Bustamante and Miguel Cardozo
Junior Mining in Lima Stock Exchange 13 Perú – A mining country: Lima Stock Exchange
• Market Cap: USD 115,026 MM (as of January 31th, 2014) 27% • Average daily traded volume: US$ 12.2 MM (until January 31th, 2014) Weight of mining on
Ticker Weight (%) INCA BAP 15.47 GRAMONC1 10.32 ALICORC1 9.87 CVERDEC1 8.36
CONTINC1 8.07 Top 10 mining companies Market Cap. (US$ MM) IFS 7.45 Southern 24,769 VOLCABC1 6.97 Cerro Verde 7,736 Main index FERREYC1 5.17 Top 10 Buenaventura 3,416 UNACEMC1 4.45 Volcan 1,864 INCA BVN 4.17 Mining Minsur 1,693 (as of January 31th, LUSURC1 3.96 companies Milpo 795 2014) MINSURI1 3.83 on BVL Fortuna Silver 485 CPACASC1 2.67 El Brocal 464 (as of January 31th, MILPOC1 2.17 2014) Rio Alto 348 EDEGELC1 1.86 Sierra Metals 309 INRETC1 1.68 41,879 RIO 1.67 CORAREI1 0.70 RELAPAC1 0.68 MPLE 0.46
Source: Lima Stock Exchange
Junior Mining in Lima Stock Exchange 14 Peru – A mining country: Mining concentration in Stock Exchange indexes
IPSA - Chile S&P/TSX Composite - Canada Santiago Stock Exchange Toronto Stock Exchange
Others Services & Retail 13% Others INCA - Peru 20% 24% Industrial Lima Stock Exchange 7% Financial 37% Consumption 8% Mining Others 7% 14% Mining Utilities Materials 24% 27% Financial 13% 13% Energy Industrial Industrial 23% 18% 12%
Construc. 10% Financial COLCAP – Colombia IPC - Mexico 31% Colombia Stock Exchange Mexican Stock Exchange
Others Financial 6% Services Industrial 10% 10% 24% Mining & Materials 16%
Oil & Gas 26% Industrial Services 9% 65% Financial 35%
Source: Lima Stock Exchange, Santiago Stock Exchange, Toronto Stock Exchange, Colombia Stock Exchange, Mexican Stock Exchange
Junior Mining in Lima Stock Exchange 15 LSE’s Venture Segment: Definitions
• Lima Stock Exchange’s Venture Segment (Lima’s Venture) was created in 2003. The first company listed in mid – 2005. Venture Capital Segment
• Mining companies in exploration stage, development stage or production with a life of mine less than 3 years, according to its reserves. In order to list in Lima’s Venture, each Junior Mining mining company must have a brokerage firm that acts as a Sponsor. Company
• Authorized broker firm by the Lima Stock Exchange responsible of verifying that junior mining companies comply with all the necessary requirements to list in the Lima’s Venture. KALLPA Securities SAB is sponsor of the 76.5% listed junior mining companies Sponsor in the LSE’s Venture Segment (13 of 17).
Junior Mining in Lima Stock Exchange 16 LSE’s Venture Segment : Sponsorhip & Advisory
Kallpa Securities SAB is sponsor of 13 junior mining companies and advisor of 5 mining companies of LSE’s main board.
Junior Mining in Lima Stock Exchange 17 LSE’s Venture Segment : Listed companies
LSE Venture Segment: Junior Mining Companies Listed Market Cap. (USD Company Ticker Metals Listing date Website million) 1 Alturas Minerales Corp. ALT Copper and gold jun-08 2.65 www.alturasminerals.com/ 2 AndeanGold Ltd. AAU Gold and silver oct-12 2.84 www.andeangoldltd.com/ 3 AQM Copper Inc. AQM Copper and gold aug-08 15.71 www.aqmcopper.com/ 4 Candente Copper Corp. DNT Copper, gold and silver feb-07 28.19 www.candentecopper.com/ 5 Candente Gold Corp. CDG Gold aug-10 4.88 www.candentegold.com/ 6 Duran Ventures Inc. DRV Polymetallic oct-12 4.69 www.duranventuresinc.com/ 7 Karmin Exploration Inc. KAR Zinc and gold jul-12 15.45 www.karmin.com/ 8 Lupaka Gold Corp. LPK Gold feb-13 14.50 www.lupakagold.com/ 9 Panoro Minerals Ltd. PML Copper and gold jun-07 55.27 www.panoro.com/ 10 Peruvian Precious Metals Inc. SGP Gold mar-11 11.74 www.peruvianpmc.com/ 11 Rio Cristal Resources RCZ Zinc and copper jul-10 0.39 www.riocristalresources.com/ 12 Rokmaster Resources Corp. RKR Gold apr-13 2.52 www.rokmaster.com 13 Southern Legacy Minerals Inc. LCY Polymetallic dec-12 3.37 www.slminerals.com/ 14 Sulliden Gold Corp. SUE Gold and silver aug-11 251.38 www.sulliden.com/ 15 Sunset Cove Mining Inc. SSM Silver and polymetallic aug-11 0.94 www.sunsetcovemining.com/ 16 Vena Resources Inc. VEM Zinc, uranium and precious metals jul-05 4.00 www.venaresources.com/ 17 Zincore Metals Inc. ZNC Zinc and lead aug-10 3.83 www.zincoremetals.com/
LSE Venture Segment: Former Juniors Market Cap. (USD Company Ticker Metals Listing date Website million) 1 Fortuna Silver Mines FVI Silver and polymetallic jun-08 559.32 www.fortunasilver.com/ 2 Luna Gold Corp. LGC Gold apr-11 116.58 www.lunagold.com/ 3 Minera IRL Limited MIRL Gold dec-07 38.91 www.minera-irl.com/ 4 Rio Alto Mining Ltd. RIO Gold and copper nov-09 427.78 www.rioaltomining.com/ 5 Sierra Metals Inc. SMT Silver, lead and zinc mar-12 283.31 www.sierrametals.com/ 6 Trevali Mining Corp. TV Zinc, lead and silver jun-11 293.30 www.trevali.com /
Source: LSE and Kallpa Securities SAB. Information as of February 24th 2014
Junior Mining in Lima Stock Exchange 18 LSE’s Venture Segment: Listed companies vs. IGBVL index
Source: LSE and Kallpa Securities SAB
Junior Mining in Lima Stock Exchange 19 LSE’s Venture Segment: Listed companies by market capitalization
Company Closing price Shares (Millions) FORTUNA SILVER MINES INC 4.440 125.97 RIO ALTO MINING LTD 2.420 176.77 USD MM TREVALI MINING CORP 1.050 279.33 900 SIERRA METALS INC 1.790 158.27 SULLIDEN GOLD CORP LTD 0.810 310.34 Mkt Cap YoY - Increase BEAR CREEK MINING CORP 1.941 92.59 800 LUNA GOLD CORP 1.110 105.03 Mkt Cap YoY - Decrease PANORO MINERALS LTD 0.270 204.71 700 Mkt Cap (US$ millions) MINERA IRL LTD 0.170 228.87 CANDENTE COPPER CORP 0.210 134.25 600 AQM COPPER INC 0.112 139.15 KARMIN EXPLORATION INC 0.257 60.05 LUPAKA GOLD CORP 0.172 84.50 500 PERUVIAN PRECIOUS METALS COR 0.090 130.01 VENA RESOURCES INC 0.100 67.99 559.3 400 CANDENTE GOLD CORP 0.050 77.14 427.8 ZINCORE METALS INC 0.100 38.27 300 SOUTHERN LEGACY MINERALS INC 0.058 57.62 ANDEANGOLD LTD 0.036 78.66 283.3 ALTURAS MINERALS CORP 0.020 132.31 200 DURAN VENTURES INC 0.009 234.33 293.3 251.4 179.8 SUNSET COVE MINING INC 0.020 104.40 100 RIO CRISTAL RESOURCES CORP 0.060 17.26 116.6 28.2 15.6 15.5 14.5 11.7 6.8 3.9 3.8 3.4 2.8 2.6 2.1 2.1 1.0 55.3 38.9
0
MINERA IRL LTD IRL MINERA
AQM COPPER INC COPPER AQM
LUNA GOLD CORP GOLD LUNA
ANDEANGOLD LTD ANDEANGOLD
SIERRA METALS INC METALS SIERRA
LUPAKA GOLD CORP GOLD LUPAKA
ZINCORE METALS INC METALS ZINCORE
VENA RESOURCES INC RESOURCES VENA
RIO ALTO MINING LTD MINING ALTO RIO
DURAN VENTURES INC VENTURES DURAN
TREVALI MINING CORP MINING TREVALI
CANDENTE GOLD CORP GOLD CANDENTE
PANORO MINERALS LTD MINERALS PANORO
CANDENTE COPPER CORP CANDENTECOPPER
ALTURAS MINERALS CORP MINERALS ALTURAS
SULLIDEN GOLD CORP LTD CORP GOLD SULLIDEN
SUNSET COVE MINING INC MINING COVE SUNSET
BEAR CREEK MINING CORP MINING CREEK BEAR
KARMIN EXPLORATION INC EXPLORATION KARMIN
FORTUNA SILVER MINES INC MINES SILVER FORTUNA
RIO CRISTAL RESOURCES CORP RESOURCES CRISTAL RIO
PERUVIAN PRECIOUS METALS COR METALS PRECIOUS PERUVIAN SOUTHERN LEGACY MINERALS INC MINERALS LEGACY SOUTHERN
Source: Bloomberg. Information as of February 24th 2014
Junior Mining in Lima Stock Exchange 20 LSE’s Main board: Senior mining’s ranking
Price Price Price Market Cap. Last Price Mkt. Cap. Feb Company Ticker Evol.(% Evol.(% Evol.(% (MM USD) (USD) 2013 (USD) WoW) YoY) YTD) Southern Copper SCCO US 26,157 31.14 31,091 -3.65% -13.69% 8.46% Cerro Verde CVERDEC1 PE 8,016 22.90 12,777 -2.55% -37.26% -6.53% Buenaventura BVN US 3,713 13.47 7,114 4.18% -47.12% 20.05% Volcan VOLCABC1 PE 1,904 0.42 4,209 2.48% -50.88% 3.51% Minsur MINSURI1 1,695 0.59 2,577 0.48% -32.75% 15.38% Milpo MILPOC1 PE 833 0.75 1,170 -1.79% -28.53% 0.00% Rio Alto RIO PE 428 2.42 807 -1.63% -47.39% 48.47% El Brocal BROCALC1 PE 386 3.53 1,352 0.00% -71.85% -1.00% Trevali TV PE 293 1.05 190 7.14% 10.53% 14.13% Minera Corona MINCORI1 235 7.48 453 7.77% -23.36% -0.94% Atacocha ATACOBC1 PE 41 0.04 115 9.45% -49.79% -7.69% Total: 61,855
Market Cap. Comparison - Feb 2014 vs. Feb 2013 35,000 Mkt Cap Feb 2014 30,000 Mkt Cap Feb 2013 25,000 20,000 15,000 10,000 5,000
0
Milpo
Volcan
Minsur
Rio Alto Rio
El Brocal El
Atacocha
Cerro Verde Cerro
Buenaventura Minera Corona Minera
Source: Bloomberg. Information as of February 24th 2014 Copper Southern
Junior Mining in Lima Stock Exchange 21 Senior mining companies listed in Lima Stock Exchange’s Mainboard
Original Fair Closing Price Last Report Company Ticker Valuation Currency Upside Recommendation Currency Value 02/24/2014 11/27/2013 Cia de Minas Buenaventura SAA BVN PE Kallpa SAB USD USD 19.40 13.44 44.35% Buy + 02/27/2014 Cia Minera Milpo SAA MILPOC1 PE Kallpa SAB PEN USD 0.98 0.75 30.33% Buy + - Minsur SA MINSURI1 PE Consensus PEN USD 0.69 0.59 16.94% Buy 02/17/2014 Sociedad Minera Cerro Verde SA CVERDEC1 PE Kallpa SAB USD USD 24.50 22.90 6.99% Hold - Sociedad Minera Corona SA MINCORI1 PE Consensus PEN USD n.d. 7.48 n.d. - 02/10/2014 Southern Copper Corp SCCO PE Kallpa SAB USD USD 29.00 31.50 -7.94% Hold 02/19/2014 Volcan Cia Minera SAA VOLCABC1 PE Kallpa SAB PEN USD 0.59 0.42 39.83% Buy +
Source: Bloomberg, Kallpa SAB. Information as of February 24th 2014
Junior Mining in Lima Stock Exchange 22 Market Cap. USD 26,157.38 million Southern Copper Corp. (SCCO) Cu Mo Ag Shares Outst. 839.99 million As of February 24th 2014
Main Projects in Peru: Tía María (Arequipa) and Toquepala Expansion (Tacna).
Southern Copper Corporation develops its operations in Peru and Mexico. It is one of the most profitable copper producers worldwide due to low cost and it has reserves to ensure a life of mine of 100 years at its current level of production. The company has approved an interesting portfolio of projects (USD 7,100 millions), which will allow the company to increase its copper production by over 50% through 2017.
Highlights: - Copper mines : Toquepala and Cuajone (both in Peru) & Buenavista and La Caridad (both in Mexico). - Polymetallic mines : Charcas, Santa Bárbara and Santa Eulalia (All in Mexico). - Copper production in 2013 was 1,400 M Lb. Cu. Almost 52% of its copper production came from Peru in 2013. - It’s average cash cost was US$ 1.00 in 2013 and should have a declining trend as its expansion projects start production.
Current status of projects: Buenavista project is developing according to SCCO’s guidance and will be completed by 2S2015. Projects in Peru are pending of approval of its Environmental Impact Assessment (EIA) from the Mining Ministry of Peru. The approval is expected in the 2S2014.
Market Information (LSE: SCCO) Project portfolio Main Shareholders of Common Shares Main Stock Exchange: New York Stock Exchange (NYSE) Project Metals Details Name Stake Grupo México S.A.B 81.7% Last Price: USD 30.84 A. Buenavista Cu , Mo CAPEX: USD 3,400 M Range 52w: USD 24.69 - 37.24 Institutional Funds 13.9% B. Tía María Cu CAPEX: USD 1,200 M Market Capitalization: USD 26,157.38 million Others 4.4% C. Toquepala Expan. Cu CAPEX: USD 1,050 M Shares Outstanding 839.99 million D. Angangueo Cu, Zn, Pb, Ag CAPEX: USD 175 M
Anual Production: Copper & Molybdenum Sales Breakdown K MT M Lb. Molybdenum (left axis) Copper (right axis) 3.7% 2.7% 30 3,000 6.5% Copper 25 2,500 3.1% Molybdenum 20 2,000 Zinc 8.2% 15 1,500 Silver 10 1,000 Sulfuric acid 75.9% 5 500 Others 0 0 2010 2011 2012 2013 2014e 2015e 2016e 2017e 2018e
Source: Bloomberg, Kallpa SAB, Southern Copper Corp .
Junior Mining in Lima Stock Exchange 23 Market Cap. USD 8,156.31 million Soc. Minera Cerro Verde (CVERDEC1) Cu Shares Outst. 350.06 million As of February 24th 2014
Main Projects in Peru: Cerro Verde Expansion (Arequipa).
Sociedad Minera Cerro Verde S.A.A. is a copper mine located in the region of Arequipa (Peru). It is one of the most profitable copper producers worldwide and it has reserves that ensure a life of mine of 90 years at its current level of production. The company is developing its expansion project (USD 4,600 millions), which will be operational by 2016 and will almost double its copper production (from 560 M Lb. Cu in 2013 to 1,550 M Lb. Cu)
Highlights: - Copper mine : Cerro Verde (Oxides and Sulphides). - Approximately 20% of its income came from the sale of copper cathodes in 2013 and the byproducts represented only 8%. - Copper production in 2013 was approximately 560 M Lb. Cu. - Its average cash cost was US$ 0.96 in 2013 and should follow an upward trend (lower grades) until its expansion project’s start up.
Current status of projects: Its Environmental Impact Assessment (EIA) has the approval of the Mining Ministry of Peru. From the total CAPEX of the project, there are still USD 3,100 M to be invested until 2016.
Market Information (LSE: CVERDEC1) Project portfolio Main Shareholders of Common Shares Bolsa de Valores de Lima General Main Stock Exchange: Project Metals Details Name Stake (BVL) Cyprux Climax Metals Company (Freeport) 53.6% Last Price: USD 23.30 A. Cerro Verde Expan. Cu CAPEX: USD 4,600 M Compañía de Minas Buenaventura S.A.A. 19.6% Range 52w: USD 20.30 - 36.00 SMM Cerro Verde Netherlands B.V. Market Cap.: USD 8,156.31 million 21.0% (Sumitomo) Shares Outstanding: 350.06 million Others 5.9%
Sales Breakdown M Lb. Anual Production: Copper 6.5% 1,400 1,200 Copper concentrates 1,000 19.3% 800 Cathodes of copper 600 400 74.1% Others (Silver and 200 molybdenum) 0 2011 2012 2013 2014e 2015e 2016e 2017e 2018e
Source: Bloomberg, Kallpa SAB, Soc. Minera Cerro Verde S.A.A.
Junior Mining in Lima Stock Exchange 24 Market Cap. USD 1,903.52 million Volcan Cia. Minera S.A.A. (VOLCABC1) Zn Ag Cu Shares Outst. 2,241.42 million As of February 24th 2014
Main Projects in Peru: New UEA Alpamarca – Río Pallanga (Junin), Silver Oxides (Pasco) and Silver Pyrites (Pasco).
Volcan Compañía Minera S.A.A. is a polymetallic miner, which operates 3 mining units (Yauli, Chungar and Cerro de Pasco) located in Peru. The company’s reserves ensure a life of mine of 15 years. New projects, Alpamarca – Rio Pallanga and Silver Oxides, will start operations In 1Q2014 allowing to increase its silver production between 25% - 30% in 2014.
Highlights: - Polimetallic mining units : Yauli, Cerro de Pasco and Chungar - Production 2013: 280 KT Zn, 67 KT Pb, 3.2 KT Cu and 20.7 M Oz Ag. - Its cost per metric ton treated in 2013 were US$/TM 67.6.
Current status of projects: New mining unit Alpamarca - Rio Pallanga and its silver oxide project in Cerro de Pasco will begin operations in 1Q2014, which together account for 8 million of additional silver ounces per year. As a result, the silver production in 2014 will fluctuate between 25.5 – 27.0 M Oz Ag. Its Silver Pyrites project is expected to add between 1.5 M – 2.0 M Oz Ag in 2016 linked to a CAPEX of USD 50 M.
Market Information (LSE: VOLCABC1) Project portfolio Main Shareholders of Common Shares Bolsa de Valores de Lima Main Stock Exchange: Project Metals Location Status Name Stake General (BVL) A. Silver Pyrites Ag AEU Cerro de Pasco Advanced Last Price: USD 0.42 Greenville Overseas Investments 46.9% B. Pared Oeste Zn, Pb, Ag AEU Cerro de Pasco Advanced Range 52w: USD 0.38 - 0.79 Empresa Minera Paragsha S.A.C. 11.1% C. Piritas de cobre Cu, Au, Ag AEU Cerro de Pasco Advanced Market Cap.: USD 1,903.52 million Blue Streak International N.V. 8.4% D. Carhuacayán Zn, Pb, Ag, Cu AEU Alpamarca Initial Shares Outstanding: 2,241.42 million Sandown Resources S.A. 7.8% E. Rondoní Cu Region of Huanuco Advanced Others 25.8%
Anual Production: Zinc & Silver Sales Breakdown K MT M Oz. 2.0% 375 Zinc (left axis) Silver (right axis) 38
300 30 11.3% Copper 225 23 40.1% Lead 150 15 Zinc Silver 75 8 46.6%
0 0 2010 2011 2012 2013 2014e 2015e 2016e 2017e 2018e
Source: Bloomberg, Kallpa SAB, Volcan Cia. Minera S.A.A .
Junior Mining in Lima Stock Exchange 25 Market Cap. USD 3,522.61 million Cia. de Minas Buenaventura (BVN) Au Ag Shares Outst. 274.89 million As of February 24th 2014
Main Projects in Peru: Conga (Cajamarca), Chucapaca (Moquegua), Tambomayo (Arequipa) and Trapiche (Apurimac).
Compania de Minas Buenaventura S.A.A. is primarily a gold producer with interests in other mining companies such as Yanacocha S.R.L., Sociedad Minera Cerro Verde S.A.A. and Sociedad Minera El Brocal S.A.A. All its mines are located in Peru and in 2013 the company produced 895,000 ounces of gold, 18.9 M Oz Ag and 65 KT Cu.
Highlights: - Gold mines : Yanacocha, Orcopampa, Breapampa, La Zanja and Tantahuatay. - In 2013, approximately 40% of its gold production and 95% of its silver production comes from its Direct Operations. - Cash Cost : USD/Oz. 802 (Orcopampa), USD/Oz. 601 (Breapampa), USD/Oz. 643 (La Zanja) and USD/Oz. 536 (Tantahuatay).
Current status of projects: Conga: Perol water reservoir finished in 2013. BVN is waiting for election of pro-mining authorities in regional elections in 2014. Chucapaca: The project owners need to buy land to continue with explorations. No new information is expected in 2014. Tambomayo: EIA and permits expected in 2014 to initiate production in 2016.
Market Information (LSE: BVN) Project portfolio Main Shareholders of Common Shares New York Stock Exchange Main Stock Exchange: Project Metals Details (NYSE) Name Stake Last Price: USD 12.78 A. Chucapaca Au, Ag, Cu Joint Venture with Gold fields Institutional Funds 55.0% Range 52w: USD 10.64 - 26.04 B. Conga Au, Ag, Cu Joint Venture with Newmont Benavides Family 27.0% BVN is looking for a partner to develop Market Cap.: USD 3,522.61 million C. Trapiche Cu Peruvian Pension Funds 16.0% this project. Shares Outstanding: 274.89 million Others 2.0% D. Tambomayo Zn, Pb, Ag, Au This project will be developed by BVN.
Anual Production: Gold & Silver Sales Breakdown M Oz. M Oz. 4.4% Silver (right axis) Gold (right axis) 5.2% 25.0 1.20
20.0 0.90 Oro 15.0 0.60 48.7% Plata 10.0 Plomo 5.0 0.30 41.6% Zinc 0.0 0.00 2010 2011 2012 2013 2014e 2015e 2016e 2017e 2018e
Source: Bloomberg, Kallpa SAB, Cia. de Minas Buenaventura S.A.A.
Junior Mining in Lima Stock Exchange 26 Market Cap. USD 832.94 million Cia. Minera MILPO S.A. (MILPOC1) Zn Cu Ag Shares Outst. 1,098.38 million As of February 24th 2014
Main Projects in Peru: Magistral (Ancash), Hilarión (Ancash) and Pukaqaqa (Huancavelica)
Companía Minera Milpo S.A.A. is a polymetallic miner that operates 3 mines in Peru (Atacocha, El Porvenir and Cerro Lindo). The life of mine of its current operations is longer than 10 years and about 50% of its revenue comes from the zinc content in its concentrates. The company has an interesting portfolio of greenfield projects, which focus on copper and zinc (Hilarion and Pukaqaqa), and brownfield projects (Chapi and Ivan) focus on copper.
Highlights: - Polymetalic mines : Cerro Lindo, El Porvenir and Atacocha. - Zinc production in 2013 was 260 K MT and copper production reached 38 K MT. Milpo’s silver production reached 6.2 M Oz. Ag. - Cerro Lindo explained more than 60% of Milpo’s income in 2013. Moreover, it’s the most efficient mining unit of the company. - Cash Cost : Cerro Lindo: USD/MT 30.3, El Porvenir: USD/MT 42.6, Atacocha: USD/MT 46.3.
Current status of projects: Milpo will continue its exploration campaign in order to increase its reserves and resources. By the end of 2014, it is expected to define the projects to be developed in the coming years.
Market Information (LSE: MILPOC1) Project portfolio Main Shareholders of Common Shares Bolsa de Valores de Lima Main Stock Exchange: Project Metals Details Name Stake General (BVL) Votorantim Group 50.1% Last Price: USD 0.75 A. Magistral Cu, Mo Greenfield project Peruvian Pension Funds 18.7% Range 52w: USD 0.40 - 0.98 B. Hilarión Zn, Pb, Ag, Cu Greenfield project Carvel Inc. 8.3% Market Cap.: USD 832.94 million C. Pukaqaqa Cu, Au, Ag Greenfield project Others 22.9% Shares Outstanding: 1,098.38 million D. Sulphides Chapi Cu Brownfield project
Anual Production: Lead, Copper & Zinc Sales Breakdown K MT K MT Lead (left axis) Copper (left axis) Zinc (right axis) 50 300 45 13.9% Zinc 40 250 Lead 35 200 30 50.1% Copper 25 150 30.4% 20 Silver 15 100 10 50 5 0 0 2010 2011 2012 2013 2014e 2015e 2016e 2017e 2018e 7.1%
Source: Bloomberg, Kallpa SAB, Cia. Minera MILPO S.A.A.
Junior Mining in Lima Stock Exchange 27 Market Cap. USD 1,694.98 million Minsur S.A. (MINSURI1) Sn Au Shares Outst. 961.00 million As of February 24th 2014
Main Projects in Peru: Mina Justa (Ica) and Tin Tailings in San Rafel (Puno)
Minsur S.A. is the fourth largest tin producer in the world. Also produces gold and rare metals. The company operates one tin mine (San Rafael) and one gold mine (Pucamarca) in Peru, and a tin and rare metals mine (Pitinga) in Brazil. Moreover, the firm produces cement at Chile by its subsidiary Melon S.A.., which has approximately 30% of market share in the chilean cement market.
Highlights: - Mining units: San Rafael (Tin), Pitinga (Tin and rare metals) and Pucamarca (Gold). - Production 2013: 28.3 K MT of tin, 116.7 K Oz. of gold. - Tin sales accounted for about 45% of revenues in 2013, while cement represented 33% in the same period. - The Pucamarca mine started operations in 2013.
Current status of projects: Minsur S.A. issued USD 450 millions to finance its expansion projects and refinance its debt. The company plans to invest between USD 1,500 M – USD 2,000 M in its expansion projects until 2020.
Market Information (LSE: MINSURI1) Project portfolio Main Shareholders of Common Shares Bolsa de Valores de Lima General Project Metals Details Name Stake Main Stock Exchange: (BVL) Expected to be ready Inversiones Breca S.A. 100.0% A. Pitinga Mine Expantion Nb, Ta Last Price: USD 0.59 in 2015. Range 52w: USD 0.41 - 0.84 Expected to be ready B. Tin Tailings in San Rafael Sn Market Cap.: USD 1,694.98 million in 2016. Expected to be ready Shares Outstanding: 961.00 million C. Mina Justa Cu in 2020.
Sales Breakdown Anual Production: Tin K MT 40 38 10.9% 36 Minsur (Tin) 34 32 44.0% Minsur (Gold) 30 28 33.1% Cementos Melón 26 24 Mineracao Taboca 22 20 12.1% 2010 2011 2012 2013
Source: Bloomberg, Minsur S.A.
Junior Mining in Lima Stock Exchange 28 Junior mining companies listed in Lima Stock Exchange’s Main Board
Original Fair Closing Price Last Report Company Ticker Valuation Currency Upside Recommendation Currency Value 02/24/2014 - Alturas Minerals Corp ALT PE Consensus USD USD n.d. 0.02 n.d. - - AndeanGold Ltd AAU PE Consensus USD USD n.d. 0.04 n.d. - - AQM Copper Inc AQM PE Consensus USD USD n.d. 0.11 n.d. - 09/11/2013 Candente Copper Corp DNT PE Kallpa SAB USD USD 0.68 0.21 223.81% Hold - Candente Gold Corp CDG PE Consensus USD USD n.d. 0.06 n.d. - - Duran Ventures Inc DRV PE Consensus USD USD n.d. 0.02 n.d. - - Fortuna Silver Mines Inc FVI PE Consensus USD USD 4.69 4.44 5.70% Hold - Karmin Exploration Inc KAR PE Consensus USD USD n.d. 0.26 n.d. - 11/27/2013 Luna Gold Corp LGC PE Kallpa SAB USD USD 3.26 1.11 193.69% Buy + - Lupaka Gold Corp LPK PE Consensus USD USD n.d. 0.17 n.d. - 08/21/2013 Minera IRL Ltd MIRL PE Kallpa SAB USD USD 0.89 0.17 423.53% Buy + 12/18/2013 Panoro Minerals Ltd PML PE Kallpa SAB USD USD 1.75 0.27 548.15% Buy + Peruvian Precious Metals - SGP PE Consensus USD USD n.d. 0.09 n.d. - Corp 02/27/2014 Rio Alto Mining Ltd RIO PE Kallpa SAB USD USD 4.50 2.42 85.95% Buy + - Rio Cristal Resources Corp RCZ PE Consensus USD USD n.d. 0.02 n.d. - - Rokmaster Resources Corp RKR PE Consensus USD USD n.d. 0.09 n.d. - - Sierra Metals Inc SMT PE Consensus USD USD 2.27 1.79 26.87% Buy - Southern Legacy Minerals Inc LCY PE Consensus USD USD n.d. 0.06 n.d. - 09/20/2013 Sulliden Gold Corp Ltd SUE PE Kallpa SAB USD USD 1.11 0.81 37.04% Hold - Sunset Cove Mining Inc SSM PE Consensus USD USD n.d. 0.01 n.d. - 11/28/2013 Trevali Mining Corp TV PE Kallpa SAB USD USD 1.65 1.05 57.14% Buy + - Vena Resources Inc VEM PE Consensus USD USD n.d. 0.06 n.d. - - Zincore Metals Inc ZNC PE Consensus USD USD n.d. 0.1 n.d. -
Source: Bloomberg. Information as of February 24th 2014
Junior Mining in Lima Stock Exchange 29 LSE’s Venture Segment: Evolution in 2014
INCA, Índice Junior BVL vs TSXV Composite Base = Dic 2013
15% INCA: -2.36% LSE Junior Index -6.22% TSXV Composite: 9.33%
10%
5%
0%
-5%
-10%
-15%
-20%
Jan-01 Jan-03 Jan-05 Jan-07 Jan-09 Jan-11 Jan-13 Jan-15 Jan-17 Jan-19 Jan-21 Jan-23 Jan-25 Jan-27 Jan-29 Jan-31
Feb-02 Feb-04 Feb-06 Feb-08 Feb-10 Feb-12 Feb-14 Feb-16 Feb-18 Feb-20 Feb-22 Feb-24
Source: Bloomberg. Information as of February 24th 2014
Junior Mining in Lima Stock Exchange 30 LSE’s Venture Segment: Traded volume
Others (Financial, Consumption, Industrial) Senior Mining Junior Mining 100% 1% 1% 1% 4% 3% 8% 90% 17% Junior Mining 35% 24% does not include 80% 41% shares from FVI, 70% 50% MIRL, RIO, TV, LGC 50% and SMT since 60% they do not 50% belong to the Junior Segment. 40% 82% 72% 64% 30% 58% 47% 20% 42% 10% 0% 2008 2009 2010 2011 2012 2013
(in PEN MM) (in PEN MM) Total traded Total traded 14,890 11,867 14,15514,890 17,24311,867 15,97314,155 10,99217,243 15,973 10,992 Other industries Other industries 8,643 7,610 6,6658,643 7,2417,610 11,4486,665 9,0157,241 11,448 9,015 Senior mining Senior mining 6,043 4,134 7,0936,043 8,5884,134 3,8717,093 1,8468,588 3,871 1,846 Junior mining Junior mining 203 124 396 203 1,415124 653 396 1311,415 653 131
Source: LSE, Central Bank and Kallpa Securities SAB as of December 2013
Junior Mining in Lima Stock Exchange 31 LSE’s Venture Segment: Mines/Projects listed
1. El Oro, Candente Gold Corp.’s main project, located in Soutrhern Mexico. Aguila (Duran Ventures) Crucero (Lupaka Gold) 2. Aurizona, Luna Gold’s production unit, located in Northwest Brazil. 3. Halfmile, Trevali’s mining unit, located in Northeast Canada. Yauricocha (Sierra Metals) Antakori (Southern Legacy) 4. Aripuana, Karmin Exploration’s main project, located in Western Brazil Urumalqui (AndeanGold) Pinaya (Rokmaster) Source: Kallpa Securities SAB
Junior Mining in Lima Stock Exchange 32 LSE’s Venture Segment: Mines/projects’ status
El Oro (CDG) Macusani (VEM) Esquilache (VEM) Cañariaco Norte (DNT) Don Nicolás (MIRL) LA Arena (RIO) Carolay (SSM) Urumalqui (AAU) Accha (ZNC) La Arena Phase II (RIO) Shahuindo (SUE) Corihuarmi (MIRL) Cañariaco Sur (DNT) Ichuña (DRV) Yanque (ZNC) Invicta (LPK) Ollachea (MIRL) Aurizona (LGC) Quebrada Verde (DNT) Minasnioc (DRV) Antilla (PML) Corani (BCM) Caylloma (FVI) Cushuro (KAR) Pinaya (RKR) Cotabambas (PML) San Jose (FVI) Antakori (LCY) Crucero (LPK) Igor (PPX) Yauricocha (SMT) Águila (DRV) Bolívar (SMT) Zafranal (AQM) Cusi (SMT) Santander (TV)
Production Construction EIA Feasibility Pre- Feasibility Scoping Study Deposit Discovery
Drilling
Preliminary Studies
Exploration Development & Studies Construction & Production
Source: Companies and Kallpa Securities SAB
Junior Mining in Lima Stock Exchange 33 Market Cap. USD 2.65 million Alturas Minerals Corp. (ALT) Cu Au Ag Shares Outst. 132.31 million As of February 24th 2014
Main Projects: Utupara (Apurimac, Peru), Sombrero (Ayacucho, Peru) and Huajoto (Huancavelica, Peru)
Alturas’ main interest is developing its 100% owned projects in Peru into drilling stage and to advance its 100% optioned projects in Chile. Core drilling for 5,481 lineal meters have been carried out in the copper - gold Utupara project located in the center of the Antabamba porphyry cluster. Of these, 2,103 meters drilled in the Cachorro Norte area reported copper-gold mineralization associated to hydrothermal breccias with intense potassic alteration, including intercepts of 18m @ 0.37 % Cu, 0.15 g/t Au and 59.1m @ 0.25% Cu, 0.30 g/t Au. Sombrero (3,800 hectares) is located at the northwestern end of the Eocene-Oligocene porphyry belt and is ready for an initial drilling program targeting copper-gold skarn and porphyry mineralization. Huajoto (3,700 hectares), located in the Central Peru polymetallic belt, reported its best drill intercept at 106.50m @ 1.64% zinc plus additional credits of rare earths, copper, gold and uranium from a drill hole in the external halo of mineralization, whereas epithermal gold and underlying copper-gold porphyry targets in the central part of the system are still undrilled. Additionally, Alturas has optioned three exploration projects in Chile. La Corina, located near La Serena at the southern end of the northern Chile porphyry belt, intercepted its best drilling target at 48 meters @ 0.9 g/t Au and it has planned a second exploration campaign. Marilin and Quispe, loctated in the prolific Maricunga belt east of Copiapo are early stage exploration projects with indications of gold-copper porphyry mineralization targets.
Current status: The Company remains very optimistic with respect to the mineral potential of its projects and is currently seeking for funding to resume its exploration drilling programs. Alternatively, management is actively seeking for strategic partnering to fund some or all of its projects in Peru and Chile.
Market Information (LSE: ALT) Project portfolio Board & Management
. Main Stock Exchange: Toronto Stock Exchange (TSX) – Project Metal Details Name Position Venture . Last Price: USD 0.02 Exploration Miguel Cardozo President, CEO & Director Walter Henry Director . Range 52w : USD 0.02 – 0.06 A. Utupara Copper & Gold 5,276 hectares Augusto Baertl Director . Market Cap.: USD 2.65 million B. Sombrero Copper & Gold 3,800 hectares Paul Pearson Director . Shares Outstanding: 132.31 million C. Huajoto Zinc, Gold & Copper 3,700 hectares Roland Eschle Director Kathleen Skerrett Director D. La Corina Copper & Gold 2,400 hectares Mario A. Miranda CFO E. Marilin Gold & Copper 1,500 hectares F. Quispe Gold and copper 1,600 hectares Main Shareholders LSE - Alturas Mineras (ALT) Thousands USD Name Stake 1,500 0.65 Volume Price Equinox Minerals Ltd. 11.89% 0.55 Production Sprott Inc. 3.06% 0.45 EIA Construction 1,000 Feasibility Mackenzie Financial Corp 1.51% 0.35 Pre- Scoping Feasibility Baertl, Augusto 0.91% 0.25 Study Cardozo, Miguel 1.49% 500 0.15 Deposit IG Investment Managem. 0.32% 0.05 Discovery Utupara Pearson, Paul 0.20% 0 -0.05 Huajoto Drilling Sombrero
Source: Bloomberg, Alturas and Kallpa Securities SAB Exploration Development Construction & Production
Junior Mining in Lima Stock Exchange 34 Market Cap. USD 2.84 million Andean Gold Ltd. (AAU) Au Ag Shares Outst. 78.66 million As of February 24th 2014
Main Project: Urumalqui (La Libertad, Peru)
Andean Gold Ltd., founded in Canada in 2006, is committed with the acquisition, exploration and potential development of properties with precious metals, principally in Peru and Ecuador. AAU has the right to earn a 100% interest in the Urumalqui Project from Gitennes Exploration Inc. pursuant to two option agreements, one for 60% and the other for 40%. The 60% option agreement expires on July 8, 2014, and AAU expects to timely fulfill the earn-in requirements of this option. The 40% option agreement was signed in May 2012, and has been amended twice, in May 2013 and in September 2013. Based on the latest amendment, AAU's remaining payment obligations to Gitennes are: CAD$ 150,000 which was due on December 31, 2013 (not paid, default must be cured by March 3, 2014), CAD$400,000 and 250,000 shares due March 17, 2014, CAD$500,000 and 500,000 shares due on September 17, 2014 and CAD$ 1 million and 600,000 shares due on March 17, 2015. In addition, Gitennes is entitled to receive a 1% NSR Royalty on any production, with a CAD$ 1.25 million cap.
Current status: AAU is presently focusing on commissioning a small-scale mining operation at the Urumalqui Project, with anticipated production during H1-2015. In February 2014, AAU announced the signing of a LOI with COFIDE, the Peruvian state owned development bank, whereby COFIDE would provide AAU with a US $4 million loan facility to develop the small-scale mine.
Market Information (LSE: AAU) Project portfolio Board & Management . Main Stock Exchange: Toronto Stock Exchange (TSX) – Project Metal Details Name Position Venture Exploration Anthony Ciali President, CEO & Director . Last Price: USD 0.04 A. Urumalqui 2 Purchase Options – 100% with Gold and Silver . Range 52w : 0.02 – 0.09 (Project) Gitenes Exploration Thomas Kelly Director 2,700 hectares / 15 MM Oz Ag Eq William Lindquist Director . Market Cap.: USD 2.84 million Silver, Lead, Zinc Exploration Fernando Pickman Director B. Molleturo (Project . Shares Outstanding: 78.66 million and Gold 100% owned by Andean Gold in Ecuador) Alberto Paz Director 3,594 hectares Thomas Yarmon Director Exploration C. Curiplaya 100% owned by Andean Gold Michael Cachia Director Gold and Copper (Project in Ecuador) 3,964 hectares Main Shareholders Exploration D. San Bartolomé Silver, Lead and Thousands LSE - Andean Gold (AAU) USD 100% owned by Andean Gold (Project in Ecuador) ZInc Name Stake 30,000 Volume Price 0.12 3,108 hectares Pinetree Capital Ltd. 5.36% 25,000 0.10 Sprott Asset Managem. 3.38% Production 20,000 0.08 EIA Construction Cali Anthony F. 1.97% Pre- Feasibility Cross David A. 1.60% Scoping 15,000 0.06 Feasibility Scott Graham Howard 1.09% Study 10,000 0.04 Deposit Inwentash Sheldon 0.88% Discovery Lindqvist William F. 0.31% 5,000 0.02 Urumalqui
0 0.00 Drilling
2012 2012 2012 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2014 2014 Source: Bloomberg, Andean Gold and Kallpa Securities SAB Exploration Development Construction & Production
Junior Mining in Lima Stock Exchange 35 Market Cap. USD 15.71 million AQM Copper Inc. (AQM) Cu Au Shares Outst. 139.15 million As of February 24th 2014
Main Project: Zafranal (Arequipa, Peru)
AQM Copper operates Zafranal copper project, a 50/50 Joint Venture with Teck Resources, located in a well know mining district home of the mines: Cuajone & Toquepala (Southern), Quellaveco (Anglo American), Cerro Verde, etc. The project is located at an altitude of 2,300 meters above sea level, it has access routes, availability of labor in neighboring communities and it is located 90 kilometers from the Pacific Ocean and 150 kilometers from the Matarani port.
In August 2013, AQM announced that it completed a transaction with Mitsubishi Materials Corporation (MMC). MMC invested USD 22.6 million and committed to invest an additional USD 15.07 million in order to acquire 40% of AQM’s Peruvian subsidiary, Minera AQM Copper Peru SAC (MAQM). Given that MAQM is the owner of the 50% of Zafranal’s JV, MMC and AQM obtained an 20% and 30% interest in Zafranal project, respectively.
Current status: In September, AQM published an updated Preliminary Economic Assessment (PEA) regarding Zafranal project. This PEA updated the previous assessment published in January 18th 2013, which was based in a 80,000 tons per day (TPD) plant size, in order to produce 93,907 tons per year (TPA) of copper concentrates necessary to produce 9,276 TPA of high quality copper cathodes. The current PEA contemplates a 44,000 TPD reduction, in order to produce 54,556 TPA of copper concentrates necessary to produce 5,949 TPA of copper cathodes. The initial investment considered for such purpose reached USD 1,122 million instead of USD 1,520 million from the previous revision.
Project portfolio Board & Management Market Information (LSE: AQM) Project Metal Details Name Position . Main Stock Exchange: Toronto Stock Exchange (TSX) – Venture A. Zafranal Copper and Development Alan Edwards Chairman (Project) Gold JV 50/50 withTeck Resources Bruce Turner President & CEO . Last Price: C$ 0.112 33,552 hectares Erick Underwood CFO . Range 52w : C$ 0.03 – 0.155 James Gilbert Director . Market Cap.: USD 15.71 million Stephen J. Altmann Director
. Shares Outstanding: 139.15 million Tom Vehrs Director Juana Rosa del Castillo CMZ General Manag. Lorenzo de la Puenta MAQM General Man.
Thousands LSE - AQM Cooper(AQM) USD Main Shareholders 140 1.20 Volume Price Name Stake 120 1.00 Production Tech S.A. 19.92% Construction 100 EIA Resource Capital Fund 12.50% 0.80 Pre- Feasibility 80 Scoping Feasibility Haywood Securities 11.60% 0.60 Study Fabulosa Mines Inc. 10.50% 60 Deposit Junior Investment Co. 6.10% 0.40 Zafranal 40 Discovery Board & Management 3.30% 20 0.20 Others 36.08% Drilling 0 0.00 2009 2010 2010 2011 2012 2013 2013 Source: Bloomberg, AQM Copper and Kallpa Securities SAB Exploration Development Construction & Production
Junior Mining in Lima Stock Exchange 36 Bear Creek Mining (BCM) Pb Ag
Delisted from LSE’s Venture Exchange Main Project: Corani (Puno, Peru)
Bear Creek has two main projects, Corani and Santa Ana, which have more than 500 million silver ounces, of which 320 million ounces are reserves that provide a short – term production potential. Santa Ana’s feasibility study describes the project as a mine with high silver grade, low cash cost and with a 4.6 million ounces estimated annual production for the first six out of eleven years life of mine. On the other hand, Corani flagship project’s Feasibility Study estimates a 13.4 million silver ounces estimated annual production during the first five years, then passing to 8 million ounces until culminating the 20 years life of mine. According to the study, Corani has probable and proved reserves for 270 million silver ounces, 3.1 billion lead ounces and 1.7 billion zinc ounces.
Current status: In February 2014, the company announced that it delivered to the Peruvian Minister of Economy and Finance, on February 6, 2014, a Notice of Intent to Submit a Claim to Arbitration, under the Free Trade Agreement between Canada and Peru. The dispute arises out of the enactment by the Peruvian government on June 25, 2011, of Supreme Decree 032 rescinding the Company's rights to operate the Santa Ana Project and which resulted in a complete stoppage of activities at Santa Ana and significant damages to the Company. The filing of the Notice of Intent also initiates a six-month consultation period between the parties during which time they are to continue to attempt to amicably settle the dispute. If no amicable settlement is reached in that six-month period, the Company may then initiate international arbitration proceedings against Peru.
Project portfolio Board & Management
Project Metal Details Name Position A. Corani Development Catherine McLeod-Seltzer Chairman & Director Silver and (Project) 100% owned by Bear Creek Lead Andrew T. Swarthout CEO & Director 5,700 hectares Steven Krause CFO Nolan Watson Director B. Santa Ana Silver Development Kevin R. Morano Director (Project) Mining concessions revoked by the Peruvian David De Witt Director Government Frank R. Tweddle Director 5,400 hectares Dr. Miguel Grau Director
Christian Ríos. VP Exploration
Main Shareholders Production Construction EIA Name Stake Pre- Feasibility Scoping Feasibility Silver Wheaton Corp. 14.4% Study Mason Hill Advisors LLC 10.8% Deposit Santa Ana Tocqueville Asset Mgmt. 10.0% Discovery Corani Sprott Asset Mgmt. 9.8% Board & Management 4.0% Drilling
Exploration Development Construction & Production Source: Bloomberg, Bear Creek and Kallpa Securities SAB
Junior Mining in Lima Stock Exchange 37 Market Cap. USD 28.19 million Candente Copper Corp. (DNT) Cu Au Ag Shares Outst. 134.25 million As of February 24th 2014
Main Project: Cañariaco (Lambayeque, Peru)
Candente Copper owns Cañariaco Norte project, located in Lambayeque, which has measured and indicated resources that total 752.4 million tons with, containing 7.53 billion copper ounces, 1.7 million gold ounces and 45.2 million silver ounces. Additionally, it contains 157.7 million tons of inferred resources that are equivalent to approximately 1.43 billion copper ounces. The Feasibility study completed in March 2011 forecasts an annual production of 262 million copper ounces, 39,000 gold ounces and 911,000 silver ounces throughout a 22 years life of mine. Other projects within the property are Cañariaco Sur and Quebrada Verde. On the other hand, regarding the project Arikepay, DNT has a JV with Compañìa Minera Zahena S.A.C. (Zahena) through Cobriza Metals Perú, a wholly owned subsidiary of DNT.
Current status: According to the option agreement between Zahena and Cobriza, Zahena can earn a 75% interest in Arikepay by making USD 5 MM in exploration expenditures and USD 4 MM in payments to Cobriza Metals Peru within 4 years (the First Option). A USD$50,000 payment on signing the Agreement and 3,000m of drilling within 12 months of receiving all drilling permits are firm commitments. Zahena can earn an additional 25% interest, by completing a bankable feasibility study and by paying Cobriza USD 10 MM within 5 years of earning its initial 75% interest (the Second Option). The completion of the Second Option would result in Zahena earning 100% interest in Arikepay subject to a 2% Net Smelter Return ("NSR") to Cobriza.
Market Information (LSE: DNT) Project portfolio Board & Management . Main Stock Exchange: Toronto Stock Exchange Project Metal Details Name Position (TSX) . Last Price: USD 0.21 A.Cañariaco Norte Copper, Gold and Development Joanne Freeze CEO, Chair & Director . Range 52w : USD 0.15 – 0.44 (Project) Silver 100% owned by Candente Sean Waller President & Director 16,390 hectares Michael Thicke Director & VP Explor. . Market Cap.: USD 28.19 million Andres Milla Director . Shares Outstanding: 134.25 million John E. Black Director B. Cañariaco Sur & Copper Exploration George Elliot Director Quebrada Verde 100% owned by Candente Wolfgang Nickel Director (Project) Adjacent to Cañariaco Norte Federico Oviedo Director Cameron Dong CFO Thousands LSE - Candente Copper (DNT) USD 5,000 2.50 Volume Price Main Shareholders
4,000 2.00 Production EIA Construction Name Stake Feasibility 3,000 1.50 Pre- Freeze Joanne 1.60% Scoping Feasibility Larrain Vial SA 0.46% 2,000 1.00 Study Cañariaco Norte Deposit Glover Steger Michael 0.35% 1,000 0.50 Discovery Waller Sean Ivor 0.29% Cañariaco Sur, Quebrada Verde Egusquiza Oliveros, Jenny 0.18% 0 0.00 Thicke Michael J. 0.14% Drilling
Montagne Ma. Eugenia 0.12%
2007 2007 2008 2009 2009 2010 2011 2011 2012 2013 2013
Source: Bloomberg, Candente Copper and Kallpa Securities SAB Exploration Development Construction & Production
Junior Mining in Lima Stock Exchange 38 Market Cap. USD 4.88 million Candente Gold Corp. (CDG) Au Shares Outst. 77.14 million As of February 24th 2014
Main Project: El Oro (México)
Candente Gold maintains 70% of interest in El Oro mining project, in exploration stage, located in Mexico in a well known gold mining district with an historic production of 8M Oz Au in 2 of the 50 known veins. The remaining 30% belongs to Gold Corp. S.A. de C.V., a Goldcorp Inc.’s subsidiary. It should be noted that after investing USD 10 million in El Oro and issuing 2 million common shares, Candente Gold acquired 20% of additional interest in the project, reaching a current 70%. Candente Gold was created from the spin – off of Candente Resources’ assets, which separated gold and copper assets into Candente Gold and Candente Copper companies, respectively.
Current status: In December 2013, CDG announced that it has received an expression of interest from Fideicomiso de Fomento Minero (FIFOMI) to provide financing to the Company for up to USD25 MM for exploration and test work on the Company's Tailings deposit at El Oro, Mexico. FIFOMI is a Public Trust created by the Mexican Federal Government in 1934 whose goal is to promote the development of the Mexican mining industry through the granting of financial and technical assistance to mining projects.
Market Information (LSE: CDG) Project portfolio Board & Management . Main Stock Exchange: Toronto Stock Exchange Project Metal Details Name Position (TSX) . Last Price: USD 0.05 A. El Oro Gold Exploration Joanne C. Freeze Chairman, CEO & Director . Range 52w : USD 0.05 - 0.13 (Project) 70% owned by Candente Sean Waller Vice President 14,950 hectares Peter Megaw Director . Market Cap.: USD 4.88 million Cameron Dong CFO . Shares Outstanding: 77.14 million Larry Kornze Director Andres Milla Director Kenneth Thomas Director
Thousands LSE - Candente Gold (CDG) USD Main Shareholders 200 1.20 Volume Price Name Stake 1.00 Production 150 EIA Construction US Global Investors Inc 7.81% 0.80 Pre- Feasibility Freeze Joanne 3.57% Scoping Feasibility Mackenzie Financial Corp 2.53% 100 0.60 Study Royal Bank of Canada. 1.60% Deposit Waller Sean Ivor 0.61% 0.40 Discovery 50 IG Investment Mgmt. 0.30% El Oro 0.20 Kornze Larry D. 0.28% Drilling 0 0.00 2010 2011 2012 2012 2013 2014 Source: Bloomberg, Candente Gold and Kallpa Securities SAB Exploration Development Construction & Production
Junior Mining in Lima Stock Exchange 39 Market Cap. USD 4.69 million Duran Ventures (DRV) Cu Mo Ag Zn Au Shares Outst. 234.33 million As of February 24th 2014
Main Project: Aguila (Ancash, Peru)
Aguila, a copper – molybdenum porphyry and Duran’s main project, is located in the department of Ancash, which is home of important mines such as Antamina and Barrick’s Pierina. The area’s infrastructure has an important regional hydroelectric plant located in Santa River approximately 40 kilometers from the project. This sub-station is located 6km and 32km from the Cañon del Pato power station. It also has other projects such as Ichuña (100% owned by DRV) and Don Pancho (100% owned by DRV), located 10 kilometers from Trevali Mining Corp.’s Santander mine.
Current status: In 2013, the company published Aguila project’s new resource estimation. The project currently has indicated resources for 1,037.98M Cu Lb and 79.72M Mo Lb, and inferred resources for 898.98M Cu Lb and 66.38M Mo Lb. The copper equivalent grade reached 0.48% Cu Eq for indicated resources and 0.39% Cu Eq for inferred resources. On the other hand, DRV announced that its Board of Directors has commenced a review of strategic alternatives for the Company with the objective of enhancing shareholder value. As part of the strategic review process, the Company will be examining a number of alternatives including, but not limited to, joint ventures, strategic partnerships, mergers, acquisitions, and the sale of the Company or other corporate transactions to enhance shareholder value.
Project portfolio Market Information (LSE: DRV) Board & Management Project Metal Details . Main Stock Exchange: Toronto Stock Exchange Name Position (TSX) A. Águila Copper and Exploration . Last Price: USD 0.02 (Project) Molybdenum 100% owned by de Duran Ventures Jeffrey Reeder President, CEO & Director 8,300 hectares . Range 52w : USD 0.02 - 0.09 Joseph del Campo Chairman & Director John Thompson Director . Market Cap.: USD 4.69 million Copper and B. Ichuña Exploration Steve Brunelle Director Silver . Shares Outstanding: 234.33 million 100% owned by Duran Ventures David Prins Director
1,000 hectares Daniel Hamilton CFO
Oscar Pezo VP Corp. Development C. Minasnioc Gold and Exploration (Project with an Silver 100% owned by Duran Ventures agreement with 3,800 hectares Main Shareholders LSE - Duran Ventures (DRV) Rio Alto Mining) Thousands USD 400 0.20 Name Stake Volume Price Production Front Street Investment 6.20% 300 0.15 EIA Construction Pre- Feasibility Prins David William 2.45% Scoping Feasibility Reeder Jeffrey J. 1.88% 200 0.10 Study Blackrock 1.66% Águila Deposit Global Strategy Financial 1.61% Discovery 100 0.05 Ichuña Brunelle Steven 0.97% Hamilton Daniel 0.96% Minasnioc 0 0.00 Drilling 2012 2013 2014 Source: Bloomberg, Duran Ventures and Kallpa Securities SAB Exploration Development Construction & Production
Junior Mining in Lima Stock Exchange 40 Market Cap. USD 559.32 million Fortuna Silver Mines Inc (FVI) Ag Au Shares Outst. 125.97 million As of February 24th 2014 Former Junior – It currently lists in LSE’s main board Main mines: Caylloma (Arequipa, Peru), San Jose (Oxaca, México) Fortuna Silver is an emerging silver producer in Latin America, with two 100%-owned underground mines in Peru and Mexico. The company has followed a disciplined growth strategy since its formation in 2005 and has earned a reputation as efficient mine builder and strong operator. In 2009, FVI acquired the San Jose project, located in Oxaca, Mexico. San Jose is a 1,800 tpd underground mine (mill expansion to 2,000 tpd. anticipated by 2Q2014), with 6.3 years life of mine and 100% owned by FVI. Recently, the company discovered Trinidad North deposit, a high – grade silver – gold discovery at the San Jose mine. FVI considers an easy access to Trinidad North with minimal CAPEX requirements (US$ 5.10 million) and an initial contribution to production blend by 1Q2015. On the other hand, Caylloma mine is located in Arequipa, Peru. It is a 1,300 tpd underground mine with 8 years life of mine and fully owned by the company.
Current status: On January 13th , 2014, the company announced 2013 production information from its two mines: San Jose and Caylloma. FVI produced 4.6 MM Oz. Ag and 21,242 Oz. Au or 5.9 MM Oz AgEq. For 2014, the company anticipates to reach 6 MM Oz Ag (+30% YoY) and 32,300 Oz Au (+52% YoY) or, 8 MM Oz. AgEq. This goal could be achieved due to the San Jose mine’s expansion to 2,000 tpd in the 2Q2014. On the other hand, as a result of lower operating costs and reduced capital requirements, the all-in sustaining cash cost per Oz. Ag may drop in 19% to US$/Oz. 17.14 Ag.
Market Information (LSE: FVI) Project portfolio Board & Management . Main Stock Exchange: Toronto Stock Exchange Mine Metal Details Name Position (TSX) Jorge Ganoza President, CEO & Director . Last Price: USD 4.44 A. Caylloma Silver, Lead and Production (mine) Zinc 100% owned by Fortuna Luis Ganoza CFO . Range 52w : USD 2.67 -4.60 35,500 hectares, 1,800 tpd. Manuel Ruiz-Cornejo VP Operations . Market Cap.: USD 559.32 million Dr. Thomas Verhs VP Exploration . Shares Outstanding: 125.97 million César Pera VP Human and Org. Devel. B. San José Production Silver and Gold Robert Brown VP Corporate Develop. (mine) 100% owned by Fortuna
64,400 hectares, 1,300 tpd.
Thousands LSE - Fortuna Silver (FVI) USD Main Shareholders 4,000 Volume Price 8.00 3,500 7.00 Name Stake 3,000 6.00 Production Van Eck Associates Corp. 10.05% 2,500 5.00 EIA Construction Pre- Feasibility Sprott Inc. 7.16% 2,000 4.00 Scoping Feasibility San José Sentry Investments Inc. 6.55% 1,500 3.00 Study Mason Hill Advisors LLC 6.51% 1,000 2.00 Deposit Caylloma Montrusco Bolston Inv. 5.43% Discovery 500 1.00 BlackRock 1.71% 0 0.00 Global X Management 1.61% Drilling
Source: Bloomberg, Fortuna Silver and Kallpa Securities SAB Exploration Development Construction & Production
Junior Mining in Lima Stock Exchange 41 Inca Pacific Resources (IPR) Cu Au Mo
Main Project: Magistral (Ancash, Peru) Delisted from LSE’s Venture Exchange Owner: Acquired by Compañía Minera Milpo (Votarantim Metais)
In 1998 Inca Pacific won the bidding process for the privatization of the concessions that include Magistral project, which contains a 4.32B Lb Cu Eq copper/molybdenum porphyry in resources. Of these, the estimated reserves total 1.85B Lb Cu Eq, which in accordance to the 2008’s mining plan, would be exploited at an annual rate of 7.5M Lb Cu + 6.3M Lb Mo though the 15 years life of mine. The initial contract granted Inca Pacific the option of acquiring 100% of the project if meeting certain annual investment commitments and if completing a Feasibility Study in the property. Subsequent to the Feasibility Study’s publishing and to the Environmental Impact Assessment’s approval, in December 2009, the Peruvian Government declared the nullity of the initial agreement alleging the breach of investment commitments in 2008 (USD 12 million) and taking USD 3 million put by Inca Pacific in order to guarantee such commitment. Before this, in March 2010, Inca Pacific initiated an arbitration process with Instituto Nacional de Mineria y Petroleo (National Institute of Oil & Mining) in regard with the reimbursement of the USD 3 million and with the resumption of the privatization agreement of Magistral’s concessions.
Acquisition of Inca Pacific Resources: Previous to the arbitration process’ final verdict, the Peruvian Government (through Agencia de Promocion de la Inversion Privada del Gobierno Peruano – Pro Inversion) initiated the privatization/sale process of Magistral’s concessions, which was subsequently adjudged to Compañia Minera Milpo in April 2011, the auction’s only bidder. The latter would have the option of acquiring Magistral’s mining concessions from the Peruvian Government if committing to develop the project in a period of time no longer than 36 months after executing the option for USD 8.02 million and paying a 2% NSR royalty throughout the project’s life of mine. As of the date of the awarding of Magistral’s mining concessions to Milpo, Inca Pacific was the owner of the mining rights adjacent to Magistral project. Although Inca Pacific initially disagreed with the decision of selling Magistral’s concessions to Milpo, in October 2011 Inca Pacific’s Shareholders Meeting agreed to sale the company’s shares to Milpo at C$ 0.61 per share for a total of USD 35 million. Currently, Magistral is owned by Milpo, a project that needs a USD 642 million estimated investment in order to start up operations in 2013 with a 31K MT estimated annual copper production.
Source: Bloomberg, Inca Pacific and Kallpa Securities SAB
Junior Mining in Lima Stock Exchange 42 Market Cap. USD 15.45 million Karmin Exploration Inc. (KAR) Zn Au Shares Outst. 60.05 million As of February 24th 2014
Main Project: Aripuana (zinc) and Aripuaña (gold), both in Brazil
Karmin has three projects: Aripuana (zinc) and Aripuaña (gold) in Mato Grosso – Brazil, and Cushuro (gold) in Huamachuco, Alto Chicama – Peru. In Aripuaña (gold) as well as in Cushuro, Karmin has a 100% ownership, while in Aripuaña (zinc) it has a JV with Votorantim for 30% of the property (Votorantim is the project’s operator). Aripuaña (zinc) is one of the ten most important undeveloped zinc projects worldwide. It has more than 30 million tons in resources in accordance with the NI 43-101 report and it currently has drillings up to 20,000 meters. Aripuaña (gold) has an historic production up to 350,000 gold ounces. Finally, Cashuro project, located in Alto Chicama world-class gold district in northern Peru, has been planning a drilling campaign.
Current status: On February 11th, 2014, the company announced the granting of stock options to the directors as well certain employees of Karmin. KAR will grant a total of 765,000 options. Each option permit the holders to purchase one common share at and exercise price of CAD$ 0.20 for a period of 5 years. 3. A total of 3.8 million shares have been reserved for issuance under the terms of Karmin’s stock option plan. Upon the granting of the options, the company will have 3.8 million options outstanding, which represents 6.3% of the 60’051,083 common shares currently outstanding.
Market Information (LSE: KAR) Project portfolio Board & Management
. Main Stock Exchange: Toronto Stock Exchange Project Metal Details Name Position (TSX) . Last Price: USD 0.257 A. Aripuana Zinc Exploration Larry Ciccarelli Chairman . Range 52w : USD 0.155 – 0.450 (Project in Brazil) JV 30% con Votorantim David Brace CEO & Director 82,000 hectares Richard Faucher Director . Market Cap.: USD 15.45 million B. Aripuaña Gold Exploration Ed Guimares Director . Shares Outstanding: 60.05 million (Project in Brazil) 100% owned by Karmin Terence Ortslan Director It shares the 82k hectares Luis Rodríguez-Mariátegui Director C. Cushuro Exploration Gold John Ianozzi CFO (Project) 100% owned by Karmin
2,500 hectáres LSE - Karmin Explorations (KAR) Thousands USD
600 1.40 Main Shareholders Volume Price 500 1.20 Name Stake 1.00 400 Production Board & Management 30.0% EIA Construction 0.80 Pre- Feasibility Alberto Arias Dávila 25.0% 300 Dutch investors 7.0% 0.60 Scoping Feasibility Study 200 Peruvian investors 5.0% 0.40 Deposit Aripuaña (zinc) Discovery 100 0.20 Aripuaña (oro) 0 0.00
Drilling Cushuro
2005 2005 2006 2007 2007 2008 2009 2009 2010 2011 2011 2012 2013 2013 Source: Bloomberg, Karmin Exploration and Kallpa Securities SAB Exploration Development Construction & Production
Junior Mining in Lima Stock Exchange 43 Market Cap. USD 116.58 million Luna Gold Corp. (LGC) Au Shares Outst. 105.03 million As of February 24th 2014 Former Junior – It currently lists in LSE’s main board Main Project: Aurizona (Brazil)
Since early 2010, Luna Gold is a mid-tier gold producer. Luna's primary asset is the Aurizona Gold Mine located in the northeast of Brazil. The Aurizona Gold Mine is currently under expansion to deliver a targeted life of mine average annual production of 135,000 ounces to be completed on budget during the 1H2014. In addition, a Preliminay Feasibility Study is underway and is targeted for release during the 3Q2014, which considers expanding gold production to deliver between 200,000oz and 300,000oz upon completion. LGC has achieved an annual gold production of 79,229 ounces in 2013 at Aurizona. For this year, the company anticipates an annual gold production of 85,000 – 95,000 Oz. Au at an annual average cash cost of production of USD/Oz. 690 to USD/Oz. 740. On the other hand, the company will delivery an updated NI 43-101 Resource and Reserve Estimate for Aurizona, during 3Q2014.
Current status: In February 2014, the company announced that has entered into an agreement with a syndicate of underwriters pursuant to which they have agreed to purchase, on a bought deal basis, 16’950,000 common shares of LGC at a price of CAD 1.18 per share for gross proceeds of approximately CAD 20 MM. The net proceeds of the Offering will be used for general corporate purposes.
Market Information (LSE: LGC) Project portfolio Board & Management
. Main Stock Exchange: Toronto Stock Exchange (TSX) Project Metal Details Name Position . Last Price: USD 1.11 A. Aurizona Gold Production John Blake President, CEO & Director . Range 52w : USD 1.02 - 3.85 (mine en Brazil) 100% owned by Luna Gold Duane Lo CFO . Market Cap.: USD 116.58 million Production 2013 @ 79.2K Au Oz. Keith Hulley Chairman & Director
. Shares Outstanding: 105.03 million Luis Baertl Director Steven Krause Director Wayne Kirk Director Bill Lindqvist Director
Geoff Chater Director
Thousands LSE - Luna Gold (LGC) USD Main Shareholders 800 Volume Price 4.00 700 3.50 Name Stake 600 3.00 Production Pacha Minerals Invest. 13.29% EIA Construction 500 2.50 Pre- Feasibility Royal Bank of Canada 3.01% US Global Investors Inc. 1.19% 400 2.00 Scoping Feasibility Study Aurizona Baertl Luis J. 0.72% 300 1.50 Deposit Groot Marcel de 0.55% 200 1.00 Discovery Toronto-Dominion Bank 0.52% 100 0.50 Prudential Plc. 0.39% 0 0.00 Drilling 2011 2012 2012 2013 2014 Source: Bloomberg, Luna Gold and Kallpa Securities SAB Exploration Development Construction & Production
Junior Mining in Lima Stock Exchange 44 Market Cap. USD 14.50 million Lupaka Gold Corp. Au Shares Outst. 84.50 million As of February 24th 2014
Main Project: Crucero (Puno, Peru)
Lupaka Gold Corp. listed on the LSE in February 2013. Lupaka is a Canadian junior mining company focused in gold projects in Peru, with combined measured & indicated resources for 2.1 million equivalent gold ounces and with 0.9 million equivalent gold ounces in inferred resources. Lupaka is strategically positioned in the geographical balance, diversifying its assets in three Peruvian regions: Crucero in Puno, Invicta in Northern Lima, and it holds a 17% stake in another junior mining company, Southern Legacy Minerals, therefore, it has a stake in Antakori project in Cajamarca. It should be noted that in regard with Crucero, its main project, it has 11 detected anomalies. However, results only contemplate one anomaly. The company plans to keep on exploring the other 10 additional anomalies in order to increase Crucero’s potential resources. In November 2013, the Company optioned the Josnitoro Gold Project from Hochschild Mining PLC. The project is located approximately 600 kilometres by road southeast of Lima in the Department of Apurimac, southern Peru.
Current status: The Company has announced its intention to put the Invicta project into production on a small scale. The Company is currently assessing economic parameters before committing to permitting. The Invicta project has high grade resource immediately accessible through existing development. Also, LPK recently joined with Hochschild Mining to advance exploration on the promising Josnitoro Gold project in Apurimac, Peru.
Market Information (LSE: LPK) Project portfolio Board & Management . Main Stock Exchange: Toronto Stock Exchange (TSX) Project Metal Obs. Name Position . Last Price: CAD$ 0.172 Exploration Eric Edwards President, CEO & Director A. Crucero (Project) Gold . Range 52w : CAD$ 0.18 – 0.49 100% owned by Lupaka Gordon Ellis Chairman
. Market Cap.: USD 14.50 million Darryl F. Jones CFO
. Shares Outstanding: 84.50 million Hernán Barreto Director
John Graf Director B. Invicta Exploration Norman Keevil III Director Gold and Stephen Silbernagel Director (Project) 100% owned by Lupaka Copper Jaima A. Pinto Director 30,000 hectares
Thousands TSX - Lupaka Gold (LPK) USD Main Shareholders
2,500 1.60 Volume Price 1.40 Name Stake 2,000 1.20 Production Management & Insiders 24.0% EIA Construction Feasibility Haywood Securities 15.0% 1,500 1.00 Pre- Scoping Feasibility Former Peruvian Partners 6.0% 0.80 Study Westerkirk Capital 5.0% 1,000 0.60 Deposit Invicta Macquarie 2.0% 0.40 Discovery Sprott Inc. 1.5% 500 Crucero 0.20 0 0.00 Drilling 2011 2012 2012 2013 Source: Bloomberg, Lupaka and Kallpa Securities SAB Exploration Development Construction & Production
Junior Mining in Lima Stock Exchange 45 Market Cap. USD 38.91 million Minera IRL Ltd (MIRL) Au Shares Outst. 228.87 million As of February 24th 2014 Former Junior – It currently lists in LSE’s main board Main Project: Ollachea (Puno, Peru)
MIRL is focused in the development of Don Nicolas and Ollachea projects, soon to start up operations in the end of 2014 and 2015, respectively. Currently, MIRL is a small - sized gold producer with a 20K Oz Au annual production for the 3 years of remnant life of mine; however, towards the end of 2015, MIRL will be a mid - sized gold producer with both projects Don Nicolas and Ollachea into production. It should be noted that MIRL proved its Management’s skills after taking Corihuarmi project into a mine in production in 2008. On the other hand, Ollachea, MIRL’s main project with resources for 2.6M Oz Au (1.1M Oz Au in mining reserves) requires a USD 177.5 million investment for the implementation of an underground mine with a 113K Oz Au estimated production throughout the project’s 9 years life of mine. Additionally, despite the fact that Ollachea is located in Puno, it has good relationships with the communities, after granting 5% of the project’s earnings in the favor of the latter.
Current status: In February 2014, the company announced that in the 4Q2013, the Corihuarmi Mine produced 6,446 Oz. Au, resulting in full year production of 25,223 Oz. Au, 5% higher than Minera IRL's guidance of 24,000 ounces. Higher than forecasted grade and mining more tonnes than scheduled contributed to the increase in gold production. Accordingly, the Company expects to report full-year 2013 cash costs below the anticipated rate of USD/Oz. 760. On the other hand, the company expects to conclude the financing for Ollachea and obtain its construction permit in 2Q2014.
Market Information (LSE: MIRL) Project portfolio Board & Management
. Main Stock Exchange: London Stock Exchange (LSE) Project Metal Details Name Position . Last Price: USD 0.17 A. Corihuarmi Gold Production Courtney Chamberlain Chairman & CEO . Range 52w : USD 0.13 - 0.68 (mine) 100% owned by MIRL Douglas Jones Director . Market Cap.: USD 38.91 million 9,315 hectares Daryl Hodges Director
. Shares Outstanding: 228.87 million Napoleon Valdez Director B. Ollachea Gold Development Brad Boland CFO (Project) 95% owned by MIRL Diego Benavides President Minera IRL S.A. Estimated annual prod.: @ 113K Oz Au
Development C. Don Nicolás Gold & Silver 51% owned by MIRL (Project in Argentina) Estimated annuam prod.: @ 56K Oz Au Thousands LSE - Minera IRL (MIRL) USD Main Shareholders 6,000 Volume Price 2.00 5,000 Name Stake 1.50 Production Rio Tinto 19.3% 4,000 EIA Construction Pre- Feasibility Miton Asset Mgmt. 8.7% 3,000 1.00 Scoping Corihuarmi Fratelli Investments 4.2% Feasibility Don Nicolás Study 2,000 CIMINAS 4.0% 0.50 Deposit Ollachea RBC Global Asset Mgmt. 3.0% 1,000 Discovery Macquarie Group 2.5% 0 0.00 Shairco 2.1%
Drilling
2007 2008 2009 2009 2010 2011 2012 2012 2013 2014
Source: Bloomberg, Minera IRL and Kallpa Securities SAB Exploration Development Construction & Production
Junior Mining in Lima Stock Exchange 46 Norsemont Mining Inc. (NOM) Cu Mo
Delisted ftom LSE’s Venture Exchange Main Project: Constancia (Cuzco, Peru) Owner: Acquired by Hudbay Minerals (TSX, NYSE: HBM)
Norsemont is one of the successful cases in LSE’s Venture Segment. In early 2011, three years after listing in LSE, Norsemont (owner of Constancia project with 3.9B Lb Cu Eq in resources), was acquired by Hudbay Minerals for USD 450 million (paying approximately USD 0.133 per Lb Cu Eq). The high price per copper pound relies upon Constancia’s advanced stage which maintains all the key permits that are necessary to start up operations and for the construction of an open-pit mine. Currently, Hudbay Minerals maintains 100% of interest in Norsemont. Constancia is located in the prolific copper district of Andahuaylas – Yauri, home of the mines Las Bambas & Tintaya (Xstrata – Glencore), Los Chancas (Grupo Mexico), among others. In February 2011, Ausenco Solutions published Constancia mine’s Feasibility and Optimization Study which evaluates the construction of an open-pit mine at low cost with a 180M Lb estimated annual production at a USD/Lb 0.93 cash cost throughout the project’s 15 years life of mine. Constancia’s reserves total 372 MT @ 0.39% Cu, 105.3 g/t Mo, 3.57 g/t Ag and 0.05 g/t Au. The estimated investment necessary to start up Constancia’s operations is approximately USD 920 million.
Current Status: Delisted from LSE and TSX. The project’s information is available under Hudbay Minerals. (See: http://www.hudbayminerals.com/ourBusiness/constancia.php)
Source: Bloomberg, Hudbay Minerals and Kallpa Securities SAB
Junior Mining in Lima Stock Exchange 47 Market Cap. USD 55.27 million Panoro Minerals Inc. (PML) Cu Au Mo Shares Outst. 204.71 million As of February 24th 2014
Main Project: Cotabambas (Apurimac, Peru)
Panoro has a portfolio of 14 projects, most remarkable are Antilla and Cotabambas with 10.47 B Lb CuEq in total resources, located in the well known mining district of Andahuaylas – Yauri, home of Las Bambas & Tintaya (Glencore), Los Chancas (Grupo Mexico) and Constancia (Hudbay Minerals). Panoro is focused in Cotabambas’ development, in order to identify the size and the potential of the copper/gold porphyry. Other Panoro’s projects are: Kussiorcco, Cochasayhuas and the JV Alicia with Strait Gold.
Current status: Last year, the company updated the resources in Cotabambas and Antilla (October and December 2013, respectively). In the case of Cotabambas, the new resource reflects a 40% increase in contained copper, a 41% increase in contained gold and a 51% increase in contained silver. The strip ratio was reduced from 3.0:1 to 1.3:1. In the case of Antilla, the new resource reflects a 38% increase in contained copper and 53% increase in contained molybdenum, while the strip ratio was reduced from 2.5:1 to 1:1. On the other hand, the company anticipates to deliver a PEA for both Cotabambas and Antilla in July 2014 (or before).
Market Information (LSE: PML) Project portfolio Board & Management
. Main Stock Exchange: Toronto Stock Exchange (TSX) – Project Metal Details Name Position Venture . Last Price: USD 0.27 A.Cotabambas Copper and Gold Development Luquman A. Shaheen President, CEO & Director . Range 52w : USD 0.23 - 0.50 (Project) 100% owned by Panoro David W. Huber CFO Total resources: 7.64 B Lb CuEq William J. Boden Chairman & Director . Market Cap.: USD 55.27 million Richard Mundle Director
. Shares Outstanding: 204.71 million Christiaan F. Staargaard Director B. Antilla Copper Development Lorne Torhjelm Director (Project) 100% owned by Panoro Christian G. Pilon Director Total resources: 2.83 B Lb CuEq
Thousands LSE - Panoro Minerals (PML) USD Main Shareholders 1,800 1.00 Volume Price 1,600 Name Stake 1,400 0.80 Production JPMorgan Chase & Co 8.69% 1,200 EIA Construction 0.60 Goodman & Co Inv Couns 7.11% 1,000 Pre- Feasibility Hudbay Minerals Inc 6.24% 800 Scoping Feasibility 0.40 Study IG Investment Manag. 5.10% 600 Deposit Antilla Boden Williams J 4.77% 400 0.20 Discovery Cotabambas Bank of Nova Scotia 3.88% 200 Korch Carsten M 1.48% 0 0.00
Drilling
2007 2008 2008 2009 2010 2010 2011 2012 2012 2013 Source: Bloomberg, Panoro and Kallpa Securities SAB Exploration Development Construction & Production
Junior Mining in Lima Stock Exchange 48 Market Cap. USD 11.74 million Peruvian Precious Metals Inc. (PPX) Au Shares Outst. 130.01 million As of February 24th 2014
Main Project: Igor (La Libertad, Peru)
Since its acquisition in 2005, Peruvian Precious Metals (Ex Sienna Gold) has been focused in the exploration and development of Igor gold project, located in a copper – gold belt in northern Peru, which is home of mines/projects such as Yanacocha (Newmont), Lagunas del Norte (Barrick), La Arena (Rio Alto) and Shahuindo (Sulliden), among others. Three mineralization zones have been confirmed within the property: Domo, Tesoros and Callanquitas. The explorations and drillings carried out before 2010 served to define resources for 202K Oz Au Eq.
Current status: In February 2014, the company announced a non-brokered private placement of convertible debentures with a principal amount of CAD 5’814,008.14 to one subscriber, with the following material attributes: i) 2 years from closing, ii) interest rate of 10% per annum, payable quarterly and iii) a conversion price of CAD 0.18 per share. The principal amount owing under the Debentures will be due and payable on the second anniversary of the closing date (the maturity date), unless earlier redeemed or converted pursuant to the terms of the Debentures. The Investor may convert all or part of the outstanding principal amount of the Debentures into common shares of the Company at the conversion price of $0.18 per share at any time during the term of the Debentures.
Market Information (LSE: PPX) Project portfolio Board & Management
. Main Stock Exchange: Toronto Stock Exchange (TSX) – Project Metal Details Name Position Venture . Last Price: USD 0.09 Igor Gold Development Brian Maher Director, President & CEO . Range 52w : USD 0.035 – 0.30 100% owned by Sienna Gold Jorge D. Benavides Chairman & Director Luis Felipe Arizmendi Director . Market Cap.: USD 11.74 million Brian Imrie Director . Shares Outstanding: 130.01 million Charles Littlejohn Director Declan Livesey Director Kimberly Ann CFO (interim)
LSE - Peruvian Precious Metals Thousands USD Main Shareholders 1,200 (PPX) 0.80 Volume Price Name Stake 1,000 0.70 Production Arizmendi Eche Luis-Felix 5.30% 0.60 EIA Construction 800 Rucci John 2.89% 0.50 Pre- Feasibility Littlejohn Charles 2.86% 600 0.40 Scoping Feasibility Study Livesey Declan 0.94% 0.30 400 Deposit Benavides Alfaro Jorge 0.93% 0.20 Discovery Igor 200 Miller Owen David W 0.24% 0.10 Forbes Gordon Archie 0.22% 0 0.00 Drilling 2011 2011 2012 2013 2013
Source: Bloomberg, Peruvian Precious Metals and Kallpa Securities SAB Exploration Development Construction & Production
Junior Mining in Lima Stock Exchange 49 Market Cap. USD 427.78 million Rio Alto Mining Limited (RIO) Cu Au Shares Outst. 176.77 million As of February 24th 2014 Former Junior – It currently lists in LSE’s main board Main Project: La Arena (La Libertad, Peru)
Rio Alto is the owner of La Arena project, whose development was established in two stages: Phase i) Gold Oxides (mine currently in production), and Phase ii) Copper and Gold Sulphides – 1.9 B Lb. Cu + 3.7 M Oz. Au in reserves. La Arena, nowadays is a world - class mining deposit, was LSE’s successful case in 2010, after Management took a project into production in a period of time less than two years with an excellent financing record with the participation of Peruvian investors. La Arena is located in a well known gold mining district which is home of Lagunas Norte (Barrick), Yanacocha (Newmont), Shahuindo (Sulliden), etc. Rio Alto’s value relies basically upon Copper and Gold Sulphides project’s development, whose annual production is estimated in 50 M Lb. Cu + 40 K Oz. Au, whose CAPEX is estimated in USD 200 - 250 million. In 2013, the company exceeded the anticipated production and reached 214,742 Oz. Au.
Current status: The company announced its production guidance for 2014: it will produce the same as in 2013, between 190K and 210K Oz. Au, with a cash cost that will range between USD/Oz. 629 – 695 and a CAPEX of USD 35.4 MM and USD 26 MM for Phase I, and Phase II, respectively. Also, the company anticipates for 2014, exploration expenses of USD 8.2 MM to schedule 29,500 meters of drilling. As a short – term catalyst, the company will delivery an updated resource and reserve estimation for Phase I in this 1Q2014.
Market Information (LSE: RIO) Project portfolio Board & Management
. Main Stock Exchange: Toronto Stock Exchange (TSX) – Project Metal Details Name Position Venture Gold and 100% owned by Rio Alto . Last Price: USD 2.42 La Arena Klaus Zeitler Chairman Copper . Range 52w : USD 1.26 – 4.79 Alex Black Presid., CEO & Director A. Gold Oxides Gold Production Anthony Hawkshaw CFO & Director . Market Cap.: USD 427.78 million (Mine) Estimated prod. 2014 @ 190K – 210K Oz Drago Kisic Wagner Director Au . Shares Outstanding: 176.77 million Victor Gobitz Colchado Director
Sidney Robinson Director B. Gold & Copper Copper and Development Ram Ramachandran Director Sulphides Gold Production’s start up in 2017. (Project) Eduardo Loret de Mola COO
Thousands LSE - Rio Alto (RIO) USD Main Shareholders 20,000 7.00 Volume Price Name Stake 6.00 Production Sentry Investments Inc 16.81% 15,000 5.00 EIA Construction Pre- Feasibility Van Eck Associates Corp 10.33% 4.00 Scoping Feasibility IG Investments Manag. 7.99% 10,000 Study Auscan Assets Ltd. 2.77% 3.00 La Arena – Deposit La Arena – Óxidos Norwich Roger 2.68% Discovery Sulfuros 5,000 2.00 Hawkshaw Anthony 2.15% 1.00 BlackRock 2.14% Drilling 0 0.00 2009 2010 2011 2011 2012 2013 2013 Source: Bloomberg, Rio Alto and Kallpa Securities SAB Exploration Development Construction & Production
Junior Mining in Lima Stock Exchange 50 Market Cap. USD 0.39 million Rio Cristal Resources (RCZ) Zn Cu Shares Outst. 17.26 million As of February 24th 2014
Ex Main Project: Bongará (Amazonas, Peru)
Rio Cristal Resources Corp. is a Canadian junior mining company focused in the discovery and development of zinc, copper and gold deposits in Peru. The company’s board presents a notable background within the mining industry, especially Peruvian. In May 16th 2013, the company renounced to its option agreement of acquiring Bongara zinc property, in Amazonas. This was due to the lack of financings in Canadian and Peruvian stock markets for a long period of time. During last year, the company considered the possibility of carrying out a Joint Venture for the project with a dozen of companies, but it did not succeed given the current conjuncture.
Current status: In July 2013, it was carried out the consolidation of its shares over the base of 1 new share per 10 old shares (1:10). The company had 172’591,630 shares outstanding. After the consolidation, the company has 17’259,163 issued shares. In September 2013, the company provided updated information regarding its activities and announced voting results from its Annual General Meeting (AGM) held in September 18th 2013. Rio Cristal’s CEO recalled that the company failed to comply with Bongara project’s payment option and it neither closed a Joint Venture with a bigger company. Rio Cristal is searching reverse takeover agreements in order to expose new projects to the shareholders.
Market Information (LSE: RCZ) Board & Management . Main Stock Exchange: Toronto Stock Exchange (TSX) – Venture Name Position . Last Price: USD 0.06 Thomas Findley President, CEO & Director . Range 52w : USD 0.005 - 0.30 Miguel Cardozo Director Hans A. Flury Director . Market Cap.: USD 0.39 million Tony Hines Director . Shares Outstanding: 17.26 million André Gauthier Director
Thousands LSE - Rio Cristal (RCZ) USD 2,000 4.50 1,800 Volume Price 4.00 1,600 3.50 Main Shareholders 1,400 3.00 1,200 2.50 Name Stake 1,000 2.00 800 Preble Charles G 1.85% Swarthout Andrew T 0.78% 600 1.50 Findley Thomas J 0.41% 400 1.00 Cardozo Goytizolo M 0.17% 200 0.50 Krause Steven 0.12% 0 0.00 BTG Pactual Chile 0.05% 2010 2011 2011 2012 2013 2013 Dean Corey M. 0.05%
Source: Bloomberg, Rio Cristal and Kallpa Securities SAB
Junior Mining in Lima Stock Exchange 51 Market Cap. USD 2.52 million Rokmaster Resources Corp. (RKR) Au Cu Shares Outstanding 27.92 million As of February 24th 2014
Main Project: Pinaya (Arequipa, Peru)
Pinaya is located in Southern Peru, 110 kilometers northeast of Arequipa and 7 kilometers from the access road to Glencore Xstrata’s Tintaya-Antapaccay mine. The project’s 192 square kilometers cover 25 kilometers of the southeast extension of the Andahuaylas – Yauri porphyry belt (300 kilometers long), along the northeast end of the Chilean copper porphyry belt. Drilling in Pinaya is expected in early 2014, in order to improve and to expand current copper gold porphyry resources, expand superficial gold oxide zones and test a new porphyry zone 12 km south of the resource area. The work carried out by previous operators included more than 46,000 meters of diamond drilling in 160 holes between 2004 and 2008, as well as the elaboration of Pinaya project’s resource estimation under NI 43 – 101 Canadian standards. An updated NI 43-101 Technical Report on the Pinaya Project and Resource Update was completed on July 26, 2012. According to the independent updated NI 43-101 report, Pinaya has measured resources of 310,150 Oz Au Eq, indicated resources of 1,104,300 Oz Au Eq and inferred resources of 867,720 Oz Au Eq.
Current status: Rokmaster listed in the LSE in April 2013 and also during the same month signed an agreement with the Pinaya community to carry out exploration and development activities that are necessary for the Pinaya project.
Market Information (LSE: RKR) Project Metal Details Board & Management . Main Stock Exchange: Toronto Stock Exchange (TSX) – A. Pinaya Gold and Exploration Name Position Venture (Project) copper 19,200 hectares. . Last Price: USD 0.09 John Mirko President, CEO & Director . Range 52w : USD 0.05 - 0.29 Feisal Somji Director Antonio M. de Quadros Director . Market Cap.: USD 2.52 million Larry Okada Director . Shares Outstanding: 27.92 million Ernest S. Peters Director Manuel Octavio Delgado Director John Fiorino Director Dennis Cojuco CFO Fernando Pickmann Manager – Corp. Develop.
TSX - Rockmaster Resources (RKR) Main Shareholders Thousands USD 70 Volume Price 0.35 Name Stake 60 0.30 Production Mirko, John 9.37% Construction 50 0.25 EIA Pre- Feasibility Somji, Feisal 1.97% 40 0.20 Scoping Feasibility Peters, Ernest 1.79% Study 30 0.15 De Quadros, Antonio 0.72% Deposit Okada, Larry 0.54% 20 0.10 Discovery Pinaya Cojuco, Dennis 0.21% 10 0.05 0 0.00 Drilling 2011 2012 2013 2013
Source: Bloomberg, Rokmaster and Kallpa Securities SAB Exploration Development Construction & Production
Junior Mining in Lima Stock Exchange 52 Market Cap. USD 283.31 million Sierra Metals Inc. (SMT) Ag Cu Zn Pb Au Shares Outst. 158.27 million As of February 24th 2014 Former Junior – It currently lists in LSE’s main board Main Project: Yauricocha (Peru)
Sierra Metals Inc. started up operations in 2003 in Mexico and it has acquired, explored and developed properties in two great projects (Bolivar in 2004 and Cusi in 2006). Through its wholly owned subsidiary, Dia Bras Peru S.A.C., Sierra Metals acquired 81.8% of Minera Corona, S.A. in May of 2011. Established in 1993, Corona is a Peruvian company engaged in the exploration, extraction, production and commercialization of copper, lead and zinc concentrates, with high silver and gold components at the Yauricocha Mine in Yauyos Province, Peru. Bolívar is an underground mine in commercial production at 2,000 tpd. located in Chihuahua, México; and Cusi also is an underground mine in commercial production at 600 tpd.
Current status: In January 2014, the company announced full – year 2013 production results. Total tonnes of ore processed reached 1’321,782 in 2013 compared to 1’269,850 tonnes in 2012, reflecting a 4.1% increase YoY. Metallic production reached 2’560,467 Oz. Ag (-2.3% YoY), 15.9 MM Lb. Cu (+0.3% YoY), 38.0 MM Lb. Pb (+6.4% YoY), 51.7 MM Lb. Zn (-12.4% YoY) and 6,736 Oz. Au (-35.8% YoY). Therefore, SMT established its production guidance for 2014 to 2’615,000 Oz. Ag, 23.4 MM Lb. Cu, 32.2 MM Lb. Pb, 44.7 MM Lb. Zn and 7,950 Oz. Au (this guidance’s numbers reflect the simple average between upper and lower range of the guidance).
Market Information (LSE: SMT) Project portfolio Board & Management . Main Stock Exchange: Toronto Stock Exchange Project Metal Details (TSX) Name Position . Last Price: USD 1.79 Alberto Arias Chairman A. Yauricocha Silver, Copper, Production . Range 52w : 1.72 – 2.60 Steven Dean Director (mine) Lead, Zinc and 81.8% owned by Sierra Metals Daniel Tellechea President, CEO and Director . Market Cap.: USD 283.31 million Gold Doug Carter Director . Shares Outstanding: 158.27 million Copper, Silver Igor Gonzales Director B. Bolívar Production and Zinc John Donnely Director (mine en México) 100% owned by Sierra Metals
Guillermo Kaelin Director Philip Renaud Director Development C. Cusi Silver, Lead Fernando Piccini CFO 100% owned by Sierra Metals (mine en Mexico) and Gold LSE - Sierra Metals (SMT) Main Shareholders Thousands USD 5,000 3.50 Volume Price Name Stake 3.00 Production 4,000 EIA Construction Arias Resource Capital 52.0% 2.50 Feasibility Pre- Yauricocha BlackRock 9.0% Scoping 3,000 2.00 Feasibility Goodman & Co. 4.0% Study Bolívar Others 36.0% 2,000 1.50 Deposit 1.00 Discovery Cusi 1,000 0.50 0 0.00 Drilling 2012 2012 2013 Exploration Development Construction & Production Source: Bloomberg, Sierra Metals and Kallpa Securities SAB
Junior Mining in Lima Stock Exchange 53 Market Cap. USD 3.37 million Southern Legacy Minerals Inc. Cu Au Ag Zn Shares Outst. 57.62 million As of February 24th 2014
Main Project: Antakori (Cajamarca, Peru)
Southern Legacy Minerals is a Canadian junior mining company with a diversified project portfolio consisting in copper and gold projects in Peru and Chile. Its Antakori flagship project is located in the Yanacocha Mining District, Cajamarca, near operations such as Gold Fields’ Cerro Corona and Buenaventura’s Tantahuatay mine. In accordance to Canadian standards NI 43-101, Antakori has inferred resources for 5.9 billion Lb Cu Eq at a 0.92% average grade. Antakori consists in a set of 14 adjacent mining concessions that represent a 212 hectares surface, added to 49 additional hectares. There is a good infrastructure in the zone, with a paved road located 6km from the project.
Current status: In December 2013, the company announced its intention to complete a non-brokered private placement offering of units of the company for maximum gross proceeds of up to CAD 300,000. Each unit will be comprised of one common share and one full common share purchase warrant. Each warrant entitles the holder to purchase one common share at a price of CAD 0.18 until 2 years from the date of the issuance of the units.
Market Information (LSE: LCY) Project portfolio Board & Management
. Main Stock Exchange: Toronto Stock Exchange (TSX) Project Metal Details Name Position . Last Price: USD 0.06 A. Antakori (Project) Copper, Gold, Exploration Fernando Pickmann CEO & Director . Range 52w : USD 0.15 – 0.31 Silver and Zinc 100% owned by LCY Andrés Milla Charman & Director . Market Cap.: USD 3.37 million 14 concessions in 212 hectares Antonio Pichardo CFO . Shares Outstanding: 57.62 million Darryl F. Jones Director John E. Larson Director Raymond Jannas Director Anthony Hawkshaw Director
LSE - Southern Legacy (LCY) Thousands USD Main Shareholders 70 0.45 Volume Price Name Stake 60 0.40 0.35 Production Andean American Mining 17.44% 50 Construction 0.30 EIA Pre- Feasibility Lopez Cesar 6.95% 40 0.25 Scoping Feasibility Pickmann Fernando 2.60% 30 0.20 Study Pichardo Antonio 2.08% 0.15 Deposit Green Apple Holdings 0.09% 20 Discovery 0.10 Antakori 10 0.05 0 0.00 Drilling 2012 2013 Source: Bloomberg, Southern Legacy and Kallpa Securities SAB Exploration Development Construction & Production
Junior Mining in Lima Stock Exchange 54 Market Cap. USD 251.38 million Sulliden Gold Corp. (SUE) Au Ag Shares Outst. 310.34 million As of February 24th 2014
Main Project: Shahuindo (Cajamarca, Peru)
Shahuindo, 100% owned by Sulliden, is a mid-scale gold and silver project expected to start production in 2015. The project is located in a well known mining district which is home to some of the lowest cost gold producers in the world, including Lagunas Norte (Barrick), Yanacocha (Newmont) and La Arena (Rio Alto). Shahuindo is a low CAPEX (USD 131.48 million) and low OPEX (USD/Oz. 552) project that obtained its EIA approval in September 2013 and is now in the final stages of permitting. The open-pit, heap leach project is expected to process 10K TPD for an annual production of 90K Oz Au Eq for 10.4 years. This initial phase of the project considers only about 40% of the project’s total mineral resources; the ADR plant and the conveyor belts will be sized to accommodate an expanded mine scenario, which is planned once in commercial production. Additionally, there remains excellent potential to further increase mineral resources on the property with a number of promising targets that remain undrilled.
Current status: In September 2013, Sulliden received the Environmental Impact Assessment (EIA) approval for Shahuindo. By the end of 2Q2014, the Company expects to have received all the final process permits for the project, and also have the financing in place for the construction of the mine. With an estimated one-year mine build, production status is anticipated in 2015.
Market Information (LSE: SUE) Project portfolio Board & Management
. Main Stock Exchange: Toronto Stock Exchange (TSX) Project Metal Details Name Position . Last Price: USD 0.81 A. Shahuindo Development Justin Reid President & Director Gold and Silver . Range 52w : USD 0.59 - 1.10 (Project) 100% owned by Sulliden Peter Tagliamonte Chairman & CEO
9,218 hectares . Market Cap.: USD 251.38 million Denis Arsenault CFO
. Shares Outstanding: 310.34 million Stan Bharti Director B. East Sullivan Exploration Poly - metallic Hon Pierre Pettigrew Director (Project) 100% owned by Sulliden James Coleman Director 334 hectares George Faught Director Bruce Humphrey Director Don Dudek Director
Thousands LSE - Sulliden Gold (SUE) USD 3,000 2.50 Main Shareholders Volume Price 2,500 Name Stake 2.00 Production EIA Construction 2,000 Van Eck Associates Corp 9.38% Pre- Feasibility 1.50 Agnico-Eagle Mines Ltd 8.69% 1,500 Scoping Feasibility Study Aberdeen International 5.12% 1.00 Shahuindo 1,000 Deposit Royal Bank of Canada 3.92% Discovery Standard Life 3.25% 500 0.50 FMR LLC 2.09% 0 0.00 Drilling Beutel Goodman & Co 2.04% 2011 2012 2012 2013 AGF Investments 1.44% Source: Bloomberg, Sulliden and Kallpa Securities SAB Exploration Development Construction & Production
Junior Mining in Lima Stock Exchange 55 Market Cap. USD 0.94 million Sunset Cove Mining (SSM) Ag Cu Shares Outst. 104.40 million As of February 24th 2014
Main Project: Carolay (La Libertad, Peru)
Focused in the development of mining projects in Peru, the company maintains within its portfolio a project in an early development stage: Carolay (poly - metallic), located in La Libertad. In May 2013, the company announced that it signed an option agreement in order to acquire 100% of Lac Gueret West Graphite property, in Northeast Quebec. The option’s terms require a USD 15,000 payment and the issuance of 1’500,000 shares.
Current status: Sunset Cove plans to culminate its diamond drillings up the 10,000 meters planned in the drilling program, and it is elaborating the NI 43 – 101 technical report in order to fulfill two targets: 1) the first resource estimation in Carolay; and, ii) starting up the mapping and exploration in the sectors that were acquired in November 2011: Humberto and Maranon, which have doubled the property’s area to 5,784 hectares. In order to achieve these targets, the company is searching financing options.
Market Information (LSE: SSM) Project portfolio Board & Management . Main Stock Exchange: Toronto Stock Exchange (TSX) - Project Metal Details Name Position Venture . Last Price: USD 0.01 A.Carolay Silver and poly . Exploration Lorne Woods President, Chair & CEO . Range 52w : USD 0.01 – 0.05 (Project) metallic Maintains a purchase option of 95% of Marc Blais Director & COO the project. Jacques Arsenault CFO . Market Cap.: USD 0.94 million 5,784 hectares Jason Mychasiw Director . Shares Outstanding: 104.40 million Arnaldo León Vega Director Steve Roebuck Director
Main Shareholders
Name Stake
Thousands LSE - Sunset Cove (SSM) USD Blais Marc 4.58% 1,200 Volume Price 0.20 Woods Lorne A 2.99% Mychasiw Jason 0.52% 1,000 Production EIA Construction Roebuck Steve 0.36% 0.15 Feasibility 800 Pre- Leon Vega Arnaldo 0.24% Scoping Feasibility Arsenault Jacques 0.05% 600 0.10 Study Deposit 400 Discovery 0.05 Carolay 200 Drilling 0 0.00 2011 2012 2013 2013 Source: Bloomberg, Sunset Cove and Kallpa Securities SAB Exploration Development Construction & Production
Junior Mining in Lima Stock Exchange 56 Market Cap. USD 293.30 million Trevali Mining Corp. (TV) Zn Pb Ag Shares Outst. 279.33 million As of Februay 24th 2014 Former Junior – It currently lists in LSE’s main board Main Projects: Santander Mine (Lima, Peru), Caribou & Halfmile Mines (New Brunswick, Canada)
Trevali has two main operating units: its Peru unit that commenced production in Q3-2013 from the 2,000-tonne-per-day Santander zinc-lead-silver mine, and its Bathurst Mining Camp, New Brunswick unit that will start up production in late-2014/early-2015 from the 3,000-tonne-per-day Caribou mine and mill (along with its Halfmile mine and Stratmat Deposit). With Glencore Xstrata as a strategic partner in developing its projects, Trevali will become a mid – scale zinc producer, capable of generating operating cash flows since 4Q2013, as it is estimated. Santander, which was a past producing Peruvian zinc mine, is now a modern underground zinc mine operating at 2K TPD with approximate annual production of 75-80 million Lbs of Zn-equivalent for 12 years at a low cash cost (approximately USD/Lb 0.50). The cash cost from Canadian operations is expected to average USD/Lb 0.65.
Current status: Santander started up operations in August 2013, and in less than two months it reached full capacity (2,000 TPD). Currently, the plant continues to operate at full capacity processing mineralized material from the underground mining at Magistral North, Central and South Deposits and the Rosa Zone. Initial concentrate sales commenced in October 2013, with production to date of approx. 20,000 tons of zinc concentrates and 6,000 tons of lead – silver concentrates.
Market Information (LSE: TV) Project portfolio Board & Management
. Main Stock Exchange: Toronto Stock Exchange (TSX) Project Metal Details Name Position . Last Price: USD 1.05 Mark Cruise President, CEO & Director . Range 52w : USD 0.48 – 1.06 Zinc, Lead and In Production Anna Ladd CFO A. Santander Mine . Market Cap.: USD 293.30 million Silver 100% owned by Trevali Paul Keller COO . Shares Outstanding: 279.33 million David Huberman Director Chris Eskdale Director B. Caribou/Halfmile Zinc, Lead, In Construction Mike Hoffman Director Silver and Anton Drescher Director Mines Copper-Gold 100% owned by Trevali Catherine Gignac Director Paul Klipfel Director LSE - Trevali Mining (TV) Valentín Paniagua Director Thousands USD 1,600 2.00 Peter Meredith Director Volume Price 1,400 Production 1,200 1.50 EIA Construction Main Shareholders Pre- Feasibility 1,000 Santander Scoping Feasibility 800 1.00 Study Caribou & Halfmile Name Stake 600 Deposit ABC Funds 14.3% 400 0.50 Discovery Glencore Xstrata 6.2% 200 CIBC Global Asset Mgmt. 3.6% 0 0.00 Drilling Blackrock 2.5% 2011 2012 2012 2013 Manulife Asset Mgmt. 2.0% Source: Bloomberg, Trevali and Kallpa Securities SAB Exploration Development Construction & Production
Junior Mining in Lima Stock Exchange 57 Market Cap. USD 4.00 million Vena Resources Inc. (VEM) U Zn Au Shares Outst. 67.99 million As of February 24th 2014
Main Project: Azulcocha (Junin, Peru), Macusani (Puno, Peru)
Vena’s portfolio has several projects, which include from base and precious metals up to commodities such as uranium, having Vena the most diversified portfolio within LSE’s Venture Segment. The main projects of the company are Esquilache, Amantina, Pucara, Granja Nueva and Azulcocha West / East. On the other hand, VEM has entered into joint venture’s agreements regarding Macusani, Munani and Las Princesas projects. Regarding to the uranium assets in Puno, in January 2014 the company has closed the sale to Azincourt Uranium Inc. of the Company’s 50% equity interest in Minergia S.A.C. Minergia is a joint venture company owned by Vena and Cameco Global Exploration Ltd., which owns and operates the Macusani and Muñani uranium projects in the Puno. Azincourt acquired Vena’s 50% ownership in Minergia in exchange for a total of CAD 1 million, of which CAD 750,000 was paid in 2,525,252 common shares of Azincourt and CAD 250,000 in cash.
Current status: In February 2014, the company has enhanced the JV agreement with Forrester Resources Corp. Vena has agreed to extend the first option by an additional 12 months and in return, Forrester has agreed to compensate Vena as follows: i) Forrester will pay Vena CAD 35,000 on the option extension date, ii) Forrester will issue 630,000 common shares to Vena on the option extension date, and iii) Forrester will pay Vena CAD 35,000 on or before six months from the option extension date.
Market Information (LSE: VEM) Project portfolio Board & Management
. Main Stock Exchange: Toronto Stock Exchange Project Metal Details Name Position (TSX) . Last Price: USD 0.06 A. Macusani Uranium Development Juan Vegarra Chairman, CEO . Range 52w : USD 0.08 - 0.18 (Project) 50% of JV 50/50 with Cameco Corp. John Clarke Director 24,000 hectares André Gauthier Director . Market Cap.: USD 4.00 million Miguel Grau M. Director . Shares Outstanding: 67.99 million B. Esquilache Silver Development Jose Roberto Romaña Letts Director (Project) 100% owned by Vena Andres Tinajero CFO 1,000 hectares
LSE- Vena Resources (VEM) Thousands USD Main Shareholders 2,500 3.50 Volume Price 3.00 Name Stake 2,000 Production 2.50 EIA Construction Vegarra Juan 3.57% Pre- Feasibility 1,500 Royal Bank of Canada 2.76% 2.00 Scoping Feasibility Study Grau Miguel 0.30% 1,000 1.50 Deposit Tinajero Andres 0.10% 1.00 Discovery Macusani 500 Clarke John Ashley 0.07% 0.50 Esquilache Zeitler Klaus M 0.05%
0 0.00 Drilling Gauthier Andre 0.04%
2006 2006 2007 2008 2008 2009 2010 2010 2011 2012 2013 2013 Source: Bloomberg, Vena and Kallpa Securities SAB Exploration Development Construction & Production
Junior Mining in Lima Stock Exchange 58 Market Cap. USD 3.83 million Zincore Metals Inc. (ZNC) Zn Pb Cu Shares Outst. 38.27 million As of February 24th 2014
Main Project: Accha & Yanque (Cuzco, Peru)
Zincore is an exploration company focused on the identification, acquisition, exploration and development of zinc and related base metals projects in Latin America. Company’s main property is its 100% owned Accha-Zinc Oxide District (AZOD), which covers more than 50,000 hectares and benefits from excellent infrastructure. AZOD is located in southern Peru and it is in pre-feasibility study technical stage (its report was released in August 2013). On the other hand, the company signed exploration agreements with First Quantum regarding Dolores projects (copper porphyry) and three new copper targets: Larisa, Alcatraz and Gema. ZNC also owns an copper-zinc skarn project: Minasccasa.
Current status: In December 2013, ZNC announced that First Quantum Minerals has selected three Copper Target Areas within AZOD for further exploration. The two companies will now execute separate framework agreements for each Target Area to further explore and, if warranted, develop the Targets as JVs. The three targets are: Larisa, Gema and Alcatraz (formerly knows as Laca-Laca). They have potential to be further explored for potentially developing as copper projects. Next steps for these Targets will include infill soil-sampling programs and detailed mapping to identify and prioritize initial drill targets.
Market Information (LSE: ZNC) Project portfolio Board & Management
. Main Stock Exchange: Toronto Stock Exchange (TSX) Project Metal Details Name Position . Last Price: USD 0.10 District of Accha Development Jorge Benavides President, CEO & Director . Range 52w : USD 0.08 - 0.48 100% owned by Zincore David Black Chairman . Market Cap.: USD 3.83 million 55,000 hectares Roman Friedrich Director . Shares Outstanding: 38.27 million A. Accha (Project) Zinc & Lead Arnold Klassen Director B. Yanque (Project) Zinc & Lead Mike Parker Director Exploration Myron Osatenko Director C. Dolores (Project) Copper JV with First Quantum Minerals, but
100% owned by Zincore
Thousands LSE - Zincore Metals (ZNC) USD Main Shareholders 800 6.00 Volume Price 700 Name Stake 5.00 Production 600 EIA Construction Feasibility First Quantum Minerals 18.32% 500 4.00 Pre- Scoping Feasibility Inversiones Pacasmayo 8.44% 400 3.00 Study Royal Bank of Canada 6.26% 300 2.00 Deposit Accha, Yanque Goodman & Co Inv Couns 5.43% 200 Discovery Bank of Nova Scotia 5.43% Dolores 100 1.00 Birkenshaw David John 4.62% 0 0.00 Drilling Benavides Alfaro Jorge 4.61% 2010 2011 2011 2012 2013 2013
Source: Bloomberg, Zincore and Kallpa Securities SAB Exploration Development Construction & Production
Junior Mining in Lima Stock Exchange 59 KALLPA SECURITIES SOCIEDAD AGENTE DE BOLSA
GERENCIA GENERAL
Alberto Arispe Gerente (511) 630 7500 [email protected]
COMERCIAL MERCADO DE CAPITALES FINANZAS CORPORATIVAS
Enrique Hernández Ricardo Carrión Andrés Robles Gerente Gerente Gerente (51 1) 630 7515 (51 1) 630 7500 (51 1) 630 7500 [email protected] [email protected] [email protected]
EQUITY RESEARCH
Marco Contreras Edder Castro Humberto León Fiorella Torres Analista Senior Analista Analista Asistente (51 1) 630 7528 (51 1) 630 7529 (51 1) 630 7527 (51 1) 630 7500 [email protected] [email protected] [email protected] [email protected]
TRADING
Eduardo Fernandini Javier Frisancho Jorge Rodríguez Head Trader Trader Trader (51 1) 630 7516 (51 1) 630 7517 (51 1) 630 7518 [email protected] [email protected] [email protected]
OFICINA - CHACARILLA OFICINA - MIRAFLORES
Hernando Pastor Daniel Berger Walter León Junior Mining in Lima Stock Exchange 60 Representante Representante Representante (51 1) 626 8700 (51 1) 626 8700 (51 1) 243 8024 [email protected] [email protected] [email protected]
OFICINA - AREQUIPA
Jesús Molina Ricky García Representante Representante (51 54) 272 937 (51 54) 272 937 [email protected] rgarcí[email protected]
OPERACIONES SISTEMAS
Alan Noa Mariano Bazán Ramiro Misari Jefe de Operaciones Analista - Tesorería Jefe de Sistemas (51 1) 630 7523 (51 1) 630 7522 (51 1) 630 7500 [email protected] [email protected] [email protected]
CONTROL INTERNO
Elizabeth Cueva Funcionaria de Control Interno (51 1) 630 7521 [email protected] GERENCIA GENERAL
Alberto Arispe Gerente (511) 630 7500 [email protected]
COMERCIAL MERCADO DE CAPITALES FINANZAS CORPORATIVAS
Enrique Hernández Ricardo Carrión Andrés Robles Gerente Gerente Gerente (51 1) 630 7515 (51 1) 630 7500 (51 1) 630 7500 [email protected] [email protected] [email protected]
EQUITY RESEARCH
Marco Contreras Edder Castro Humberto León Fiorella Torres Analista Senior Analista Analista Asistente (51 1) 630 7528 (51 1) 630 7529 (51 1) 630 7527 (51 1) 630 7500 [email protected] [email protected] [email protected] [email protected]
TRADING
Eduardo Fernandini Javier Frisancho Jorge Rodríguez Head Trader Trader Trader KALLPA(51 1) 630 7516 SECURITIES(51 SOCIEDAD 1) 630 7517 AGENTE(51 1) DE630 7518 BOLSA [email protected] [email protected] [email protected]
OFICINA - CHACARILLA OFICINA - MIRAFLORES
Hernando Pastor Daniel Berger Walter León Representante Representante Representante (51 1) 626 8700 (51 1) 626 8700 (51 1) 243 8024 [email protected] [email protected] [email protected]
OFICINA - AREQUIPA
Jesús Molina Ricky García Representante Representante (51 54) 272 937 (51 54) 272 937 [email protected] rgarcí[email protected]
OPERACIONES SISTEMAS
Alan Noa Mariano Bazán Ramiro Misari Jefe de Operaciones Analista - Tesorería Jefe de Sistemas (51 1) 630 7523 (51 1) 630 7522 (51 1) 630 7500 [email protected] [email protected] [email protected]
CONTROL INTERNO
Elizabeth Cueva Funcionaria de Control Interno (51 1) 630 7521 [email protected]
Junior Mining in Lima Stock Exchange 61 T R A D I N G – FINANZAS CORPORATIVAS – R E S E A R C H – ASSET MANAGEMENT
The content of this documents is only informative and referential.