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Objective Capital's Industrial Metals, Minerals & Mineable Energy Investment Summit 2011 Ironmongers' Hall, City of London 3 November 2011 Speaker: Nick Tintor, Southern Andes Energy
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INDUSTRIAL METALS, MINERALSINDUSTRIAL METALS, MINERALS & MINEABLE ENERGYINVESTMENT SUMMITINVESTMENT SUMMIT
Leading in Peru's uranium districtNick Tintor – Southern Andes Energy
IRONMONGERS’ HALL, CITY OF LONDON ● THURSDAY, 3 NOV 2011www.ObjectiveCapitalConferences.com
Developing Peru’s Untapped Uranium Resources
Objective Capital Conference - London
November 2011
TSX-V:SUR
Cautionary NoteConcerning Forward Looking StatementsThese materials present an overview of Southern Andes
Energy’s projects in southern Peru. Readers are cautioned
Concerning Forward-Looking Statements
that the projects are at an early stage and that all estimates
and information contained herein are based on limited and
incomplete data. Additional work is required before the
mineralization and the economic potential of the projects
Scan be confidently modelled. Statements reflected in this
presentation may contain “forward-looking statements”
including management’s assessments of future plans and
operations including expectations of future production and
Tcapital expenditures. These statements regarding potential
mineralization and resources, estimated or potential future
production, potential ranking of properties and future
plans and objectives of the Company, are forward-looking
stat m nts t at n o a o s no n an n no n s sstatements that involve various known and unknown risks,
uncertainties and factors. Consequently, actual results may
differ materially from those anticipated in the forward-
looking statements. While the work, results, estimates and
projections in the presentation may be considered indicative
TSX-V:SUR
projections in the presentation may be considered indicative
of the nature and quality of the work undertaken, they are
not definitive. Readers are advised that undue reliance
should not be placed on forward-looking statements. 3
Our TeamManagement
Nick Tintor, President & Chief Executive OfficerGeologist, with over 25 years of experience in the mining industry; has been involved with all aspects of junior mining company management finance and project acquisitioncompany management, finance and project acquisition.
Hatem Kawar, Chief Financial OfficerOver 25 years of experience in technical and management aspects of industrial mineral projects in the Middle East. MBA degree (Schulich, York University, Canada).
Arnaldo T. Leon, Country Manager – PeruMr. Leon is a mining engineer with over 32 years of experience as a mining specialist in Peru. Responsible for managing Southern Andes Energy's existing property portfolio.
Al i V h Vi P id E l iAlain Vachon, Vice President Exploration More than 33 years of experience in exploration with the last 13 years in Peru as General Manager and consulting geologist for various junior Canadian companies.
Board of DirectorsRobert Boaz, Independent Chairman
Board of DirectorsJohn CookLaurence Curtis
James GarcelonNick Tintor
TSX-V:SUR 4
Southern Andes Energy A perfectly positioned Peruvian uranium play
Share structure: As at October 17, 2011
Shares Outstanding 74,134,711 Share Price $0.17(Oct. 17, 2011)
Options Outstanding 3,139,998 Market Capitalization $12.6 million
Warrants Outstanding 22,805,000 Cash and Securities (as of March 31, 2011)
$12.6 million
ll l d b lFully Diluted 100,079,709 Debt Nil
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Post Japan – Nuclear Showing Recovery
• Despite Japanese nuclear crisis, spot price for U3O8 has rebounded to +$50
Uranium renaissance driven by strategic demand, rising prices
• Nuclear build slowed but continues whilst uranium equities remain ignored
• China committed to nuclear program. Program delayed only one year for additional safety checks
• Currently 441 commercial nuclear reactors are in operation in 30 countries y p 58 units under construction worldwide representing ~60GWE of capacity 152 units and 337 units planned and proposed respectively Build out may be delayed – but remains intact
Catalysts:$80 Uranium Spot Price ($US)Catalysts:
• Continued price volatility but expect U stocks to respond when spot reaches $60
d A i i$40
$50
$60
$70
p ( )
• Increased M&A activity
• News confirming reactor build
(S UXC S b )
$20
$30
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(Source: UXC, September 2010 presentation)(Uranium spot price, Bloomberg. Accessed Oct. 17, 2011)
6
Why Peru?A stable, pro-mining jurisdiction with good infrastructure
• Peru vastly underexplored for uranium
• The country has not previously emphasized uranium deposits, but is receptive to the developmentof these prospects
• Potential for open pit deposits between 5-25 million lbs in size
• Peru supporting export of uranium and is proceeding with preparation and adoption new nuclearand uranium mining and processing guidelines
Excellent government support for uranium mining
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(Source: Peru Ministerio de la Produccion, Adex DataTrade, BCRP and MINEM)
7
Southern Andes EnergyDiscovering & developing Peru’s Uranium resources
Company restructured in 2010 with explicit focus on developing Peruvian uranium assets
Largest landowner of uranium assets in Macusani Plateau
• Controls over 65,000 hectares of concessions
• Identified over 55 uraniferous anomalies on Southern Andes’ land concessionsMacusani Plateau Andes land concessions
• Owns 7% equity interest in Macusani Yellowcake Inc.
O ns 65% interest in Caracara Sil er Controls portfolioStrategic equity interests
• Owns 65% interest in Caracara Silver. Controls portfolio of advanced-stage silver-zinc-lead projects in Peru
Obj ti I t i t t i l d k d
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Objective: Invest in strategic land package and create shareholder value advancing U and Ag projects
8
Macusani PlateauSouthern Andes controls the Macusani Uranium District
All properties are 100% owned by Southern Andes
Property Size (Hectares) Commodity
Macusani East 47,419 Uranium
Macusani West 16,600 Uranium
Picotani 1,906 Uranium
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Macusani Uranium District
M i E tM i W t
Southern Andes dominates the play
More than 65,000 hectares Macusani EastMacusani West ,
Under explored yet in three years produced strong results
New highway provides excellent all weather access
Proximity to hydro powery y p
Access to services and supplies
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Significant Near Surface Uranium Resources
• More than 60 million lbs U3O8 outlined in past 3 years
• Open pit deposits
• Clusters support concept of one central plant
• Extension potential lies on pSUR ground
• District potential +100 million lbs.
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Tupuramani Radiometric Extension f C lib i II III D iof Colibri II-III Deposit
• Colibri deposit hosts20 million lbs. U3O8(1)
• Tupuramani claim hasTupuramani claim has large radiometric anomaly on strike with radiometrics at Colibri
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(1)As published by Macusani Yellowcake and not verified by SUR
Tupuramani Radiometrics
327200 327400 327600 327800 328000 328200 328400 328600 328800 329000 329200 329400 329600 329800 330000 330200 330400 330600 330800 331000 331200 331400 331600 331800 332000
845
6400
845
6400
845
6600
845
6600¨
0 0
845
5800
845
5800
845
6000
845
6000
845
6200
845
6200
TUPURAMANI CONCESSION
5000
5000
845
5200
845
5200
845
5400
845
5400
845
5600
845
5600
RADIOMETRY ANOMALY
45
4400
45
4400
845
4600
845
4600
845
4800
845
4800
845
5
845
5
327200 327400 327600 327800 328000 328200 328400 328600 328800 329000 329200 329400 329600 329800 330000 330200 330400 330600 330800 331000 331200 331400 331600 331800 332000
845
4000
845
4000
845
4200
845
4200
84
84
0 400 800
Meters
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New Discovery at Tupuramani
• 3,214 ppm U3O8/20 m
• 3 590 pp U3O8/12• 3,590 ppm U3O8/12 m
• +1,500 m of strike
• Possible extension of Colibri uranium deposit
• Prospecting has indentified new targets on MichaMichane claims to southMichane claims to south
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Excellent Grades at TupuramaniA Priority Drill Target in 2012A Priority Drill Target in 2012
Widespread uranium on surface T-1: 878 ppm U3O8 (1 76 lbs/t) across 33 5 mWidespread uranium on surface T-1: 878 ppm U3O8 (1.76 lbs/t) across 33.5 m
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Tupuramani Potential Expanded
• Subparallel radiomtericzones host mineralization
Hi h f d i i
0.59%/1 m
• High surface grades in pits and trenches
• Possible offsets from the main Tupuramani
0.43%/2.6 m
main Tupuramanidiscovery and Colibriextension
• More then 3 km of
0.31% in pit
prospective strike identified
0.065%/2.85m
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Kihitian High Grade DiscoverySouthern Andes surrounds the play
• High grade discovery by YEL
• 7 m/1.8% U3O8 in new deeper zone
Pl f l dRecently discovered trenches
• Platforms planned less than 200 m from SUR boundary
SUR th• SUR covers three sides with similar geology
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Mineralized Trenches Extend Kihitian Potential
Southern Andes prospecting highlights in these trenches include:• 0.3% U3O8/3.9 m• 0.058% U3O8/14 m• 1.24% U3O8/0.9 m
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Surface Uranium Exposed in Trenches
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Extensive Mineralization at Tantamaco• Tantamaco surrounds Macusani Yellowcake’s
new Kihitian high grade discovery on three sides
• Recent reconnaissance field exploration has identified five new targets through trenching, sampling and pitting
• Hi hli ht i l d 0 15% U3O8 (3 0 lb• Highlights include 0.15% U3O8 (3.0 lbs U3O8/ton) across 17.4 m and including 1.74% U3O8 (34.8 lbs/ton) across 1.2 m
• Over 25% of all samples greater than 0.1% % p g %U3O8
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Accocucho Sur – Mineralized Zones• Zone 1 and Zone 2 +400 m apart with shallow
soil cover.
• Widespread uranium mineralization in• Widespread uranium mineralization in numerous trenches and channels.
Highlights include:246 8 U3O8 (0 49 lb /t) 48 95o 246.8 ppm U3O8 (0.49 lbs/t) across 48.95 m
o 1,114.7 ppm U3O8 (2.24 lbs/t) across 8.31 mo 702.5 ppm U3O8 (1.4 lbs/t) across 6.45 m
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Chacaconiza – Widespread U Anomalies
• Accocucho Sur hosts widespread autuniteuranium mineralization in area of high radiometrics
• Zones of +25,000 cps radiometrics
• Alpi-2 Zone radiometric anomaly strikes for more than 6 000 mmore than 6,000 m.
• Alpi-1 is the second uranium discovery Southern Andes has made in the ChacaconizaProject.Project.
o 1,031 ppm U3O8 (2 lbs/t) across 8.9 mo 657 ppm U3O8 (1.3 lbs/t) across 14.1 mo 430 ppm U3O8 (0.86 lbs/t) across 17.15 m
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Preliminary Test WorkPositive metallurgical results
Positive results were obtained from all samples submitted to the leaching test
U O i Pi h l l 1 2 3 4 A 88 3%• U3O8 extraction; Pich sample; columns 1,2,3,4: Average 88.3%;
• U3O8 extraction; Viz sample; columns 5,6,7,8: Average 99.5%;
• U3O8 extraction; Cha sample; columns 9,10,11,12: 98.2%;
• Total acid consumption of columns 1 to 4 ranges between 13 and 14.5 kg/t;
• Total acid consumption of columns 5 to 8 ranges between 12 and 14.1 kg/t ;
T l id i f l 9 12 b 13 8 d 16 4 k /• Total acid consumption of columns 9 to 12 ranges between 13.8 and 16.4 kg/t.
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Macusani Uranium – Low Cost ProductionPositive mining attributes
The mineralization found in the Macusani Uranium District is characterized by significant miningattributes:
• Near-surface mineralization
• Low blast factor in friable rocksDistrict characteristics suggest
low operating costs per lb. <$30/lb• Possible ripping at start
• Low work index means low crushing costs
• Very low reagent consumption in preliminary metallurgical testwork
<$30/lb
y g p p y g
• Excellent leach recoveries due to high porosity in host rock: +90%
• Ore in grades ranging from 200 ppm to 300 ppm
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Disconnect between NAV and Market CapMarket values uranium projects at zero
As at October 17, 2011
Cash $4,350,000
35%
$0.17 $0.17
$0.12
$0.14
$0.16
$0.18
r sh
are
pri
ce
35%
M i
Caracara Silver
$7,000,000 55%
$0 04
$0.06
$0.08
$0.10
$
Pri
ce v
s. N
AV
per
Macusani Yellowcake $1,280,000
10%
Total cash and securities: $12 6 million
$-
$0.02
$0.04
Share Price NAV per share
Shar
e P
Total cash and securities: $12.6 millionCash/securities per share: $0.17
TSX-V:SUR 25
(Source: Bloomberg. Accessed Oct. 17, 2011)
Summary and 2012 Plans
• Uranium and nuclear renaissance slowed but remains intact post Japanese crisis
S h A d E l h M i U i Di i i P i h• Southern Andes Energy controls the new Macusani Uranium District in Peru with more than 65,000 hectares
• Plan to drill new surface discoveries and known mineralized zones in January, 2012
• Initial 2,000 m drill campaign will test Tupuramani discoveries
• Identified significant targets surrounding new Kihitian discovery area
• Exposure to exploration results from 65%-controlled Caracara Silver in 2012
• Disconnect between net asset value and market capitalization
TSX-V:SUR 26
ContactHead Office (Toronto, Ontario, Canada)Nick Tintor, President & CEOOffice Tel: +1-416-987-0855Mobile Tel: +1 416 953 4244Mobile Tel: +1-416-953-4244Email: [email protected]
Investor Relations (Toronto, Ontario, Canada)( )Greg DiTomaso, Investor RelationsOffice Tel: +1-647-436-2592Email: [email protected]
TSX-V:SUR 27