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C R E A T I N G A D I V E R S I F I E D M I D - T I E R B A S E M E T A L S C O M P A N Y
Creating a diversified mid-tier base metals company INVESTOR
PRESENTATION APRIL 25, 2016
C R E A T I N G A D I V E R S I F I E D M I D - T I E R B A S E M E T A L S C O M P A N Y
Forward Looking Statements This presentation contains forward-looking statements and/or forward-looking information within the meaning of the United States Private Securities
Litigation Reform Act of 1995, and applicable Canadian securities laws. Forward-looking statements are frequently, but not always, identified by words
such as “expects,” “anticipates,” “believes,” “intends,” “estimated,” “potential,” “possible” and similar expressions, or statements that events, conditions or
results “will,” “may,” “could” or “should” occur or be achieved. Forward-looking statements are statements concerning the Nevsun’s and Reservoir’s
current beliefs, plans and expectations about the future including but not limited to the arrangement and related transactions, Nevsun’s commercial
production, Bisha’s future production of copper and related cash flows, and development of the Timok project and related costs. These statements are
by their very nature inherently uncertain. The actual achievements of the combined company or other future events or conditions may differ materially
from those reflected in the forward-looking statements due to a variety of risks, uncertainties and other factors, including, without limitation, the risks that:
(i) the conditions to completion of the arrangement will not be satisfied, including approval by Reservoir's and Nevsun’s shareholders, court approval and
successful exercise by Reservoir of the ROFO; (ii) an event, change or other circumstance that could give rise to the termination of the arrangement
agreement will occur; (iii) the retention of employees and other personnel will be adversely affected by uncertainty surrounding the arrangement; (iv) the
companies will be unable to successfully integrate their operations following completion of the arrangement; (v) any of the assumptions in the historical
resource estimates turn out to be incorrect, incomplete, or flawed in any respect; (vi) the methodologies and models used to prepare the resource and
reserve estimates either underestimate or overestimate the resources or reserves due to hidden or unknown conditions, (vii) exploration activities or the
mine operations are disrupted or suspended due to acts of god, internal conflicts in the country of Eritrea or Serbia, unforeseen government actions or
other events; (viii) operations will be disrupted due to equipment or power failures, uncertainties in the copper minerology, metallurgical recoveries or
concentrate grades, or other or other events; (ix) Nevsun is subjected to any hostile takeover or other unsolicited attempts to acquire control of Nevsun;
or (x) are associated with the speculative nature of exploration activities, periodic interruptions to exploration, failure of drilling, processing and mining
equipment, the interpretation of drill results and the estimation of mineral resources and reserves, changes to exploration and project plans and
parameters and other risks are more fully described in the Nevsun’s Annual Information Form for the fiscal year ended December 31, 2015, which is
incorporated herein by reference. Nevsun’s and Reservoir’s forward-looking statements are based on the beliefs, expectations and opinions of
management on the date the statements are made, and neither Nevsun nor Reservoir assume any obligation to update such forward-looking statements
in the future, except as required by law. For the reasons set forth above, investors should not place undue reliance on Nevsun’s or Reservoir’s forward-
looking statements and the forward-looking information presented here.
Further information concerning risks and uncertainties associated with these forward-looking statements and Nevsun’s business can be found in
Nevsun’s Annual Information Form for the year ended December 31, 2015, which is available on the Company’s website (www.nevsun.com), filed
under Nevsun’s profile on SEDAR (www.sedar.com) and on EDGAR (www.sec.gov) under cover of Form 40-F. Further information concerning risks and
uncertainties associated with the forward-looking statements related to Reservoir and its business can be found in Reservoir’s Management Discussion
and Analysis for the year ended November 30, 2015, which is available on the Company’s website (www.reservoirminerals.com) and filed under
Reservoir’s profile on SEDAR (www.sedar.com).
2
C R E A T I N G A D I V E R S I F I E D M I D - T I E R B A S E M E T A L S C O M P A N Y
Transaction Highlights
3
Strategic combination • Creating a diversified mid-tier base metals company
Consolidates 100% ownership in Timok Copper-Gold Project in Serbia • 100% owner and operator of the high grade Upper Zone
Timok development funding • Development is underpinned by Nevsun’s strong balance sheet and operating cash flows
Further upside • Significant exploration exposure in two prolific mining districts
Significant benefits for Nevsun and Reservoir shareholders
C R E A T I N G A D I V E R S I F I E D M I D - T I E R B A S E M E T A L S C O M P A N Y
Term Sheet
4
FUNDING
TRANSACTION
Nevsun provides funding to enable Reservoir to exercise the ROFO (US$135 million):
Private Placement: Nevsun subscribes for 19.99% of Reservoir at C$9.40/share (US$90.3 million)
Unsecured cash loan: US$44.7 million
CORPORATE
TRANSACTION
Nevsun to acquire 100% of the issued and outstanding shares of Reservoir
Reservoir shareholders to receive two Nevsun shares for each Reservoir share held
124% premium to Reservoir’s on March 2, 2016, the day prior to the ROFO notice
35% premium to Reservoir’s 20-day VWAP
Nevsun 67% and Reservoir 33% ownership of combined company
Combined company owns 100% of Timok’s Upper Zone and 60% (1) of the Lower Zone
BOARD Reservoir to have two representatives on Nevsun’s Board of Directors
OTHER TERMS
Lock up from Nevsun’s and Reservoir’s directors and officers
Major shareholders of Nevsun have expressed support for transaction
US$20 million reciprocal break fee
APPROVALS
Subject to required regulatory filings/approvals
Reservoir shareholder vote required (66 2/3% of votes cast threshold; Nevsun can vote its19.99%)
Nevsun shareholder vote required (50% threshold)
(1) pre-feasibility study (post-feasibility combined company will own 46% and Freeport 54%)
C R E A T I N G A D I V E R S I F I E D M I D - T I E R B A S E M E T A L S C O M P A N Y
Benefits to Nevsun Shareholders
On strategy for diversification: delivers on our stated goal to diversify geographically
Attractive deployment of capital: Puts Nevsun’s cash and cash flow generation to use
in an attractive development project with a high projected return
High quality asset: The Upper Zone is a high grade copper-gold development project in
a historic mining jurisdiction, with excellent local and regional infrastructure
Increased growth potential: Upper Zone increases Nevsun’s growth profile, with further
upside potential from the Lower Zone
Strategic partner: forms strategic partnership with Freeport with a leading copper and
gold producer
5
A stronger, more diversified and valuable platform for growth
C R E A T I N G A D I V E R S I F I E D M I D - T I E R B A S E M E T A L S C O M P A N Y
Benefits to Reservoir Shareholders
6
Expedited Development of Timok: Project to be expedited to production for benefit of all
stakeholders
Premium value: Premium of 124% since March 2, 2016; 35% premium to 20-day VWAP at April
22, 2016
Low risk option to exercise ROFO
Increases long-term exposure in Timok: new company will hold 100% interest of the Upper
Zone
Strong balance sheet and cash generation to fund Timok’s growth potential: exposure
to cash generated at Bisha and cash on Nevsun’s balance sheet
Strong operating team to advance Timok: demonstrated ability to develop and bring
production online, on time and under budget
Increase capital market profile: more share liquidity and institutional shareholder base
Participation in a diversified mid-tier base metals company
C R E A T I N G A D I V E R S I F I E D M I D - T I E R B A S E M E T A L S C O M P A N Y
Serbia and Timok Infrastructure
7
Serbia is a great country to build a mine:
• Working toward EU membership
• Long history of mining in Timok project area (Bor)
• Supportive federal government (pro foreign investment)
• Municipality with experienced & educated labour force
Timok
Project
Timok has all the characteristics for a successful development
Close proximity to existing mine
infrastructure: • Power
• Roads
• Rail
• Water
• Bor and Aurubis smelters
• Ports
C R E A T I N G A D I V E R S I F I E D M I D - T I E R B A S E M E T A L S C O M P A N Y
Timok Project Upper Zone
8
Upper Zone
Semi Massive Sulphide (“SMS”) high
sulphidation epithermal pyrite and copper sulphide
Subject of the April 2016 Reservoir PEA
Lower Zone
Extensive porphyry style copper-gold
mineralization below the Upper Zone
Block cave mining potential
Potential15-20 years from production
1. The cut-off grade used for the estimate is 0.75% Cu.
2. All figures are rounded to reflect the relative accuracy of the estimate.
3. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability.
4. Mineral Resource is given on 100% basis, currently 45% is attributable to Reservoir.
See detailed table of resources in Appendix
Inferred Mineral Resource
35 MT @ 2.9% Cu and 1.7 g/t Au
1.7 MT @ 13.5% Cu and 10.4 g/t Au
Large, high grade Upper Zone
Upper Zone Block Model Copper grade distribution
Indicated Mineral Resource
C R E A T I N G A D I V E R S I F I E D M I D - T I E R B A S E M E T A L S C O M P A N Y
Timok JV Structure
9
45% Upper Zone (55% Freeport)
45% Lower Zone (55% Freeport)
100% Upper Zone (0% Freeport)
60.4% Lower Zone (39.6% Freeport)
100% Upper Zone (0% Freeport)
46% Lower Zone (54% Freeport)
Current ROFO + Transaction (1) Post-Feasibility
Proforma Nevsun Ownership:
Transaction Consolidates 100% of the Timok Upper Zone
(1) Nevsun becomes project operator post ROFO and transaction
C R E A T I N G A D I V E R S I F I E D M I D - T I E R B A S E M E T A L S C O M P A N Y
Nevsun’s Track Record of Success
10
Depletion
Reserve
Reserve
0
5
10
15
Startup Dec 2015
Mine Life, years
B I S H A R E S E R V E L I F E +50%
Capital and operating delivery
Built and expanded Bisha on-time and under budget
over 3 phases
Deployed over $430 million in capital
Operated Bisha 5 years, delivering strong earnings
and cash flow
Financial delivery
5 years of dividend growth
Returned $130 million to shareholders
Growth delivery
Continuous reserve and resource growth at Bisha
Current reserves (effective Dec 31, 2015) detailed in 2015 AIF.
Qualified person is Anoush Ebrahimi, Ph.D. at SRK Consulting
Managing and Delivering Results – Development & Operations
C R E A T I N G A D I V E R S I F I E D M I D - T I E R B A S E M E T A L S C O M P A N Y
Transaction Highlights
11
Strategic combination • Creating a diversified mid-tier base metals company
Consolidates 100% ownership in Timok Copper-Gold Project in Serbia • 100% owner and operator of the high grade Upper Zone
Timok development funding • Development is underpinned by Nevsun’s strong balance sheet and operating cash flows
Further upside • Significant exploration exposure in two prolific mining districts
Significant benefits for Nevsun and Reservoir shareholders
C R E A T I N G A D I V E R S I F I E D M I D - T I E R B A S E M E T A L S C O M P A N Y
Thank You.
Further information at: www.nevsun.com
www.reservoirminerals.com
Media Inquiries Longview Communications
Trevor Zeck
+1 604 694-6037
Nevsun Resources Scott A. Trebilcock
Chief Development Officer
+1 604 623-4700
Reservoir Minerals Chris MacIntyre
VP, Corporate Development
+1 416 346-7660
C R E A T I N G A D I V E R S I F I E D M I D - T I E R B A S E M E T A L S C O M P A N Y
Cukaru Peki Mineral Resource
1. The cut-off grade used for the estimate is 0.75% CuEq.
2. All figures are rounded to reflect the relative accuracy of the estimate.
3. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability.
4. The Mineral Resource is given on 100% basis, currently 45% is attributable to Reservoir.
5. Qualified Person: is Martin Pittuck, Corporate Consultant (Mining Geology) from SRK Consulting
13
Arsenic
% CuMetal (Cu
Mt)Au g/t
Metal (Au
Moz)% As
>10.0 1.2 15.5 0.2 12.4 0.5 0.21
0.75-10.0 0.5 8.2 0.04 5.1 0.08 0.27
>10.0 1.2 13.2 0.2 10.5 0.4 0.20
0.75-10.0 33.8 2.5 0.8 1.4 1.5 0.17
Total - Indicated 1.7 13.5 0.2 10.4 0.6 0.23
Total - Inferred 35.0 2.9 1.0 1.7 1.9 0.17
Copper Gold
Inferred
Indicated
CategoryGrade Category
%Cu
Tonnes
(Mt)