Investor Presentation February 2012
Investor Presentation
February 2012
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This presentation may contain forward-looking statements that are subject to risk factors associated with exploring for, developing, mining, processing and sale of
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This presentation has been prepared by the Company based on information available to it as at 26 January 2012 and has not been independently verified. No
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otherwise arising in connection with it, including without limitation, any liability arising from fault or negligence on the part of the Company or its subsidiaries or
affiliates or the directors, employees, agents, representatives or advisers of any such party.
The Company estimates its reserves and resources in accordance with the Canadian NI 43-101 Reporting Standard of Mineral Resources and Reserves. The
Company will commence a works program to estimate its reserves and resources in accordance with the Australasian Code for Reporting of Identified Mineral
Resources and Ore Reserves 2004 Edition (JORC Code) following completion of the Pre IPO Capital Raising.
Heavener Project
Overview
Section 1
Project Location
Dallas
Resource Status
Heavener Project - Summary
The coal occurs in the Lower Hartshorne Seam in Oklahoma and
Arkansas
Seam width averages 2m and in places is up to 4m thick
Seam dips 12⁰ to 17⁰ to the NNW
Seam has moderate to high gas increasing with depth and will require
degassing
No evidence of seam faulting in the entire 18 kms of strike of the seam
Over 300 Drillholes on the tenements (29,000 metres)
Two 43-101 Reports already completed in 2008 and 2011
Resource of 65Mt within tenements
Additional 140Mt along strike and down dip (currently being
negotiated)
Raw Coal
• Ash (%) 17.9
• Volatile Matter (%) 21.04
• Fixed Carbon (%) 61.6
• Sulfur (%) 1.31
• kcal/kg 6,966
•
Washed Coal
• Float @ 1.4 Specific Gravity (%) 68.6 - 86.0
• Ash (%) 6.2 – 6.9
• Volatile Matter (%) 22.8 –23.8
• Fixed Carbon (%) 69.4 – 70.7
• Sulfur (%) 0.81 – 1.04
• kcal/kg (dry basis) 8,036 – 8,105
• FSI @ 1.5 S.G. 9.0
• HGI 100+
• Coke button 8.5 to 9
Coal Quality Low to Mid-vol Hard Coking Coal
Tenement Status
Heavener Project - Summary
Six coal leases totalling 2772 hectares held by:
Ouro Mining, Inc.
Filing Number: 1912291074
Incorporated in the State of Oklahoma, United States
Fully permitted title due to recent opencut mining by the previous
owners Farrell Cooper
Requires permitting for underground development
The region has a good skilled workforce available
Total local and government support for project development
Excellent infrastructure and access to rail and port.
Transport Infrastructure
Dallas
Potential Markets
Planned Work Q1 - 2012
Heavener Project – Planned Work
Drilling of 21 diamond drillholes for:
Geotechnical Work and Mine Design
Degassing Studies
JORC Reserve Statement
Coal washability and washplant design
2D Seismic Survey above Mines 1 and 3 areas for structural studies.
Heavener Conceptual Mine Layout
Production Status
Heavener Project – Production Summary
Planned initial production – 1Mtpa sales
Estimated Capital Cost – US$80m
Estimated Mining Cost – US$65 per tonne
Estimated Total Cost of Production – US$100 per tonne FOB
Estimated sales - +US$250 per tonne
Management Team
Section 2
Directors & Management
Management Team
Mr Larry Li – Chairman
Mr Songqiang Chen – Deputy Chairman
Mr Dong Ji – Non-Executive Director
Mr Michael Liu (MA,MBA) – Non-Executive Director
Mr Mark Syropoulo (BSc) – Alternate Director Mr Michael Liu
Mr John Fisher-Stamp (FCA, FTIA, GAICD, MIMC) – Executive Director
Mr Paul Ingram (MAus IMM) – Executive Director and CEO
Mr Tony J Huffman – Company Secretary
Mr Mark Frauenhoff – Non-Executive Director
Mr George Wang – Vice President of Finance
Metallurgy and Washplant design A&B Mylec Pty Ltd Andy Meyers – Principal
Mining and Engineering LD Operations – Mining and Design Services Peter Ross – Principal
Greg Lewicki and Associates, PLLC
Geology and JORC Resource Work Hanna Consulting Services Pat Hanna FAusIMM, CP, MMICA, MAICD, MAGMM - Principal Consultant
Technical Advisors
Advisors
Accountant San Francisco, United States Mok Accountancy Corporation
Professional Advisors
Advisors
Legal Brisbane, Australia Blake Dawson
New York, United States Sichenzia Ross Friedman Ference Anslow LLP
Offer Overview &
Share Capital Structure
Section 3
Target Capital Raising Cornerstone Investors - BFS Round
Offer Price Regulation S Shares
of Common Stock
Shares of Common Stock on issue prior to this Offer
Number of Regulation S Shares of Common
Stock to be offered under this Offer
Total Shares of Common Stock and Regulation S Shares of
Common Stock after Issue pursuant to the Offer:
o Shares of Common Stock and Reg. S undiluted
o Current Offer Price for all Shares undiluted
o Equity Value undiluted
Options Outstanding for Shares of Common Stock
US$15,000,000
US$0.45
233,333,333
33,333,333
266,666,666
US$0.45
US$120,000,000
15%1
1= Options terms provide 15% entitlement to shares of common stock following completion of first US$80m capital raising
Private Placement Seed Funding - Offer Overview
Metamining, Inc. Cornerstone
Investors
87.50% 12.50%
BFS Seed Round Equity Structure Undiluted
Ouro Mining, Inc. Ouro is seeking to raise US$15m to undertake Bankable Feasibility Study for the
Heavener Project. IPO will be considered by directors in either of Mine
Construction or Production phases. These funds will be used for the following:
o work program to bring mine reserves to JORC standard
o undertake Bankable Feasibility Study
o repayment of Metamining, Inc. Short Term Loan
o payment of Farrell Cooper balance of 2nd CN Instalment
o IPO prospectus, professional, expert costs and ASX
admission costs
o estimated offering costs – legal, technical and corporate
fees and expenses
o working capital and corporate overhead
Total
Use of Funds
US$2m
US$2m
US$0.5m
US$3m
US$2.5m
US$2m
US$3m
US$15m
US$350 to 400m
Equity Value Pre – BFS Round
Enterprise Value Pre - BFS Round
o Resource 65 million tonnes
Implied Market Capitalisation on Completion of Seed Cornerstone Investors – BFS Round
Target Market Capitalisation Range on completion of
Construction Round
US$105,000,000
US$120,000,000
US$120,000,000
Offer Overview & Share Capital Structure
Directors shall consider interposing an Australian Holding Company above Ouro Mining, Inc. preceding the
Construction Round in preparation for ASX Admission and compliance with Listing Regulations.
Directors shall consider the merits of dual listing on HKEx Post ASX IPO
US$65,000,000
70,000,000
US$0.90–$1.00
US$350 – 400m
425,625,000
15%1
44,444,444
Target Capital Raising to Fund Construction Round1
Target Additional Shares of Common Stock to be issued
at Construction Round following 1 for 3 bonus issue :
o Target Number of New Shares of Common Stock
o Target Offer Price Range per Share undiluted
o Target Equity Value on completion of Construction Round
o Target Total Shares of Common Stock undiluted
o Options Outstanding for Shares of Common Stock
Regulation S Shares of Common Stock dealing restrictions
released at Construction Round:
o Number of Regulation S Shares of
Common Stock inclusive of 1 for 3 bonus issue.
Construction Round Offer Overview & Share Capital Structure
1= Options terms provide 15% entitlement to shares of common stock following completion of first US$80m capital raising
1 = Capital required is subject to BFS outcomes . Target Capital of US$65m relates to the performance obligation of the 15% Options
holder.
Seed Round and Post Construction Round Structure Undiluted
Pre IPO
Metamining
Inc
Seed
Cornerstone
Investors
Construction Round Subject to BFS outcomes – illustration only
Metamining
Inc
Seed
Cornerstone
Investors
Construction
Round
Investors
Ouro Mining
Inc
Ouro Mining
Inc
87.50% 12.50% 73.10% 10.44%1 16.46%
1 = Based on a Construction Round price
of US$0.92c
Australia/US Junior Coal Producers, Explorers/Developers - Diluted EV (US$m)
Market Comparables
CSO OURO
101 105
Australia/US Junior Coal Produces, explorers/Developers - EV/t
1 = Ouro EV per Resource tonne comparison with Junior Explorer/Developers in Australia "Chart 6 MTE verses
recent coal market .transactions ( A$EV/T), Average 1.67 -Metro Coal RBS Morgans 15 June 2011.
Early Stage Market Comparables
2.00
1.85
1.621
Market Comparables
Ouro Comparable Junior Coal Collective -
Producers, Explorers/Developers , Australia
and United States
Company
EV $USM Resource
Mt
Reserve
Mt
EV
US$/t1 Key mines/project/(s)
Cliffs Natural Resources, Inc - NYSE
(CLF)2 757 119 6.36
INR Resources Energy, LLC West Virginia, USA acquired July 2010. Producer 2 UG Mines
Production in 2011 is expected to reach 1.7mtpa Met and 1.2 mtpa Thermal.
Bathurst Resources Ltd (BTU) 3 417 73 10 5.72
Buller Coal Project OC (NZ) Producer ramping up to 2Mtpa hard coking coal.
Massey Energy Company - NYSE- (MEE)5 960 - 416 2.30
Cumberland Resources Corp Mines located in Virginia, United States acquired in March 2011
for $960m by Massey Energy. Producer 4 UG Mines ramping to 5 mtpa in 2012 Met Coal 50%
and Thermal 50%.
Cline Mining Corporation TSX - CMK4 400 315 1.26 Elk Mine UG Project, Colorado, USA. Near Term Met Coal Producer CY Q3 2011. Ramping to
3mtpa in CY 2012.
Carabella Resources Ltd –ASX -(CLR)3 205 95 - 2.13
Mabbin Creek Complex (Bowen Basin) 3-5Mtpa UG and OC Projects. Near Term Met Coal
Producer 2015.
Stanmore Coal Limited – Mackenzie Project-
ASX (SMR)6
119 99 - 1.20 OC Project, Blackwater, QLD, Australia. Conservative / early stage EV/t. JORC inferred
resource.
Corsa Coal Corp. - TSX (CSO)7 101 80 1.28
Wilson Creek, 2 UG and 2 OC Projects Somerset, Pennsylvania, USA. Near Term Met Coal
Producer CY Q3 2011. Ramping to 2.5mtpa Met Coal 80% and Thermal 20%.
Ouro Mining, Inc – Heavener Project 120 65 35 1.85
Heavener Project, Oklahoma, USA. Additional inferred Met Coal Resource 140mt permit
process. Production Met Coal forecast CY 2013 ramping to 1.5mtpa by CY2014. CDN 43-101
completed. Scoping Study Jan 2011 Greg Lewicki And Associates, PLLC. OC and UG permits
granted.
References:
1 = EV $US/t Assumed CDN/AU $ = 1 US$ for EV comparison
2 = www.ir.cliffsnaturalresources.com and
http://www.miningweekly.com/article/cliffs-closes-757m-inr-coal-assets-acquisition-2010-08-03
3 = Bell Potter ASX Coal Sector Implications of recent M & A, 30 September 2011
4 = www.clinemining.com and Cormark Securities Inc. Coking Coal producers April 7 2011
Producers
Explorers/Developers
5 = http://www.miningweekly.com/article/massey-energy-to-buy-cumberland-resources-for-960m-2010-03-
17
6 = RBS Morgans, Stanmore Coal, 11 May 2011.
7 = www.corsacoal.com and http://www.corsacoal.com/news/index.php?&content_id=32
Timeline
• Seed Capital Funding- Jan-Feb
2012
• Drilling, seismic and JORC
resource studies Mar-July 2012
• Completion BFS Reporting Aug –
Sep 2012
• Construction Round Funding –
Sep-Nov 2012
• Procurement and Construction
Start-up Q1 - Q3 2013
• Commencement of Production
Q4 2013