Alfonso Martinez part 2 - Latam Ventures PDAC 2012

PROSPECTORS & DEVELOPERS ASSOCIATION OF CANADA

March 4–7, 2012. Toronto, Canada

w w w . s g m . g o b . m x

II MEXICO’S MINERAL POTENTIAL

III

IV ADVANCED PROJECTS

VI WHY IS MEXICO THE BEST MINING INVESTMENT OPPORTUNITY?

MINES OPENED IN 2009, 2010 AND 2011

I MINING INDUSTRY ECONOMIC INDICATORS

Part 2 of 2




TOTAL 9,294

METATES Durango Open pit Au, Ag Chesapeake Gold 3,160 EL ARCO BCS Open pit Cu, Au Grupo México 1,500 EL BOLEO BCS Open pit Zn, Ag Baja Mining Corp 1,100 BAHUERACHI Chihuahua Open pit Cu, Co, Zn Jinchuan-Tyler 619 TERRAZAS Chihuahua Open pit Zn, Cu Constellation 500 BUENA VISTA Sonora Open pit Zn, Cu Grupo México 500 LA VERDE Michoacán Open pit Cu Teck-Cominco 250 EL CRESTON Sonora Open pit Mo, Cu Creston Moly Corp 200 IXHUATAN Chiapas Open pit Au Linear Gold/KinRoss 200 SIERRA MOJADA Coahuila Open pit Zn Metalline 250 SAN NICOLAS Zacatecas Open pit Zn, Cu, Pb Teck-Gold corp 246 MINA EL PILAR Sonora Open pit Cu Stingray Copper Inc 186 LAS MERCEDES Sonora Open pit Au Yamana Gold 152 MORELOS NORTE Guerrero Open pit Au, Ag Torex Gold resources 150 EL GALLO Sinaloa Open pit Ag, Au US Gold 149 SAN ANTON Guanajuato Open pit Au, Ag, Cu Cerro Resources 82 NOCHE BUENA Sonora Open pit Au, Ag Fresnillo Plc 68




II MEXICO’S MINERAL POTENTIAL

III

IV ADVANCED PROJECTS

V WHY IS MEXICO THE BEST MINING INVESTMENT OPPORTUNITY?

MINES OPENED IN 2009, 2010 AND 2011

I MINING INDUSTRY ECONOMIC INDICATORS




WORLDWIDE EXPLORATION BUDGETS

Source: Metals Economics Group; World Exploration Trends 2012

According to Metals Economics Group's of “Corporate Explora:on Strategies”, worldwide nonferrous explora:on budgets keep on growing.

0

2

4

6

8

10

12

14

16

18

20

2003 2004 2005 2006 2007 2008 2009 2010 2011

2.19

3.55

4.90

7.13

10.50

12.60

7.32

12.10

18.2

Bill

ion

US

Dol

lars




EXPLORATION BY REGION 2011

Source: Metals Economics Group

Latinoamérica remains the favourite destination for investment in mining exploration

Latin America, 26%

Canada, 18%

Rest of the World, 15%

Africa, 15%

Australia, 12%

United States, 8%

Pacific/ Southeast Asia, 6%

USD $ 18.2 BILLION

Latin America 25 %

13 %

Pacific Islands 5 %




EXPLORATION BUDGETS OFTHE TOP TEN COUNTRIES 2011

Source: Metals Economics Group

Others countries 31%

12%

4%

3% 18%

8%

6%

5%

5%

2%

3%

USD $ 18.2 BILLION




FOREIGN COMPANIES: MINING EXPLORATION PROGRAMS

Source: Ministry of Economy (General Bureau of Mining Promotion).

0

50

100

150

200

250

300

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

101

162

74

156168

204214

257 262

286 288

Companies




0 50 100 150 200 250

Canada

USA

China

Australia

Japan

Korea

United…

India

Peru

Belgium

Luxembourg

Chile

Italy

Spain

Holland

207 71.88%46 15.47%

8 2.78%

6 2.08%

4 1.39%

4 1.39%

3 1.04%

2 0.69%2 0.69%

1 0.35%

1 0.35%1 0.35%

1 0.35%

1 0.35%

1 0.35%

MEXICAN COMPANIES FUNDED BY FOREIGN CAPITAL 2011

Source: Ministry of Economy (General Direction of Mining Promotion).




Source: Bureau of Mining Promotion; 2010 data

806 MINING PROJECTS FINANCED WITH FOREIGN CAPITAL BY MINERAL

COPPER, 98, 12%

POLYMETALLIC, 135, 17%

IRON, 46, 6% OTHERS, 23, 3%

GOLD AND SILVER, 504, 62%




Rank Country Economic System

Political System Security Permission Corruption Economic

Stability Tax Total 2010 vs 2011

1 Australia 9 8 8 8 10 9 5 57 -4

2 Canadá 9 9 4 4 10 9 7 52 -4

3 Chile 9 9 7 6 8 8 4 51 +2

4 Brasil 7 8 5 5 5 9 6 45 +3

5 México 8 8 2 7 6 6 7 44 -1

6 USA 8 9 3 1 10 7 3 41 -1

7 Colombia 6 7 6 6 5 5 4 39 0

8E Botswana 6 5 5 5 5 5 6 37 +1

8E Perú 6 6 4 4 5 7 5 37 +4

10E Ghana 6 5 2 6 3 6 6 34 -2

10E Mongolia 6 6 5 5 2 6 4 34 -2

Source: Behre Dolbear 2011 Ranking of Countries for Mining Investment




0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

TSX TSXV LSE+AIM ASX Hong Kong NYSE JSE Others

12.5

5.3 4.3

1.9 1.5

0.96 0.53

2.7

Source: Gamah International; compiled by TMX Group.

!   TORONTO STOCK EXCHANGE AND TSX VENTURE EXCHANGE HOLD 58% OF THE WORLD’S PUBLIC MINING COMPANIES, WITH A CAPITAL VALUE OF $563 BILLION CANADIAN DOLLARS

!   TSX AND TSXV RAISE 60% OF THE WORLD’S MINING EQUITY CAPITAL WITH 1,178 COMPANIES LISTED, OF THOSE, 210 OPERATE IN MEXICO (14%)

$ B

ILLI

ON

C$B

ASX




Africa: TSXV: 109 Companies TSX: 71 Companies 180

Europe: TSXV: 56 Companies TSX: 30 Companies 86

Russia & CIS Countries: TSXV: 16 Companies TSX: 15 Companies 31

USA: TSXV: 258 Companies TSX: 103 Companies 361

Canada: TSXV: 782 Companies TSX: 176 Companies 958

Central America & Caribbean: TSXV: 30 Companies TSX: 20 Companies 50

South America: TSXV: 197 Companies TSX: 86 Companies 283

Mexico: TSXV: 141 Companies TSX: 59 Companies 210

Australia: TSXV: 39 Companies TSX: 48 Companies 87

India/Asia: TSXV: 66 Companies TSX: 44 Companies 110

Source: TSX Annual Report 2010




Mexico’s legal security, strong economics and stable political system are a guarantee for safe investments

Mexico is 1st in Latin America and 4th worldwide in the list of the 10 top recipient countries of global exploration investments, as indicated by the 2011 Metals Economics Group´s “Corporate Exploration Strategies” analysis

Mexico is ranked in the 5th position, just after Canada, Australia, Chile and Brazil, as lower risk countries, according to the 2011 Behre Dolbear Group´s, “Ranking of Countries for Mining Investment” study, emphasizing the fact that Mexico has the most convenient mineral tax regime.

As mining destination, Mexico is the third most attractive country for the Toronto Stock Exchange investors, where 58% of the public world mining companies quote. After Canada and USA, Mexico holds 210 listed companies in the TMX which represents 75% of the entire companies operating in Latin America.

In the past 4 years, an average of 5 new major scale mining projects have been brought into production every year.

Thank you

Technology

Alfonso Martinez part 2 - Latam Ventures PDAC 2012