Developing Mexican Silver-Zinc Production

Developing Mexican
Silver-Zinc Production
Terence N. McKillen -
President & CEO
TSXV: “XAG”
February 2013
www.Xtierra.ca
Forward Looking Statement
Xtierra Inc. (“XAG”) has prepared this presentation for information purposes only. The information contained herein was
prepared by management on a best efforts basis and is believed to be accurate. It contains forward-looking statements about the
Company's plans for the mining, development and exploration of its properties.
Forward-looking information may include reserve and resource estimates, estimates of future production, unit costs, costs of
capital projects and timing of commencement of operations, and is based on current expectations that involve a number of
business risks and uncertainties. Factors that could cause actual results to differ materially from any forward-looking statement
include, but are not limited to, failure to establish estimated resources and reserves the grade and recovery of ore which is mined
varying from estimates, capital and operating costs varying significantly from estimates, delays in obtaining or failures to obtain
required governmental, environmental or other project approvals, delays in the development of projects, changes in exchange
rates, fluctuations in commodity prices, inflation and other factors.
Forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ
materially from expected results. Shareholders and prospective investors should be aware that these statements are subject to
known and unknown risks uncertainties and other factors that could cause actual results to differ materially from those
suggested by the forward-looking statements. Shareholders are cautioned not to place undue reliance on forward-looking
information. By its nature, forward-looking information involves numerous assumptions, inherent risks and uncertainties, both
general and specific, that contribute to the possibility that the predictions, forecasts, projections and various future events will not
occur. The Company undertakes no obligation to update publicly or otherwise revise any forward-looking information whether
as a result of new information, future events or other such factors which affect this information, except as required by law.
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www.Xtierra.ca
Introduction
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Xtierra Inc.
Developing a mid-tier silver and base
metals producer with:
• 100M silver eq. ozs. | incl. 33M oz. silver
in NI 43-101 resources
Advanced Projects
•
•
Bilbao (Ag-Zn-Pb-Cu)
Laguna (Ag-Au-Hg)
Exploration Projects
•
•
Panfilo Natera District
Pinos District
Accretive Acquisitions
Seeking opportunities
Strategic Goal
Sequentially bring Bilbao and Laguna
deposits into production
Major Shareholders
•
•
•
Pacific Road Funds (35%)
Minco Plc (29%)
Sprott (9%)
www.Xtierra.ca
Bilbao Deposit in Relation to Central Mineral Belt
Mulatos
Dolores
Pinos Altos
Ocampo
ZACATECAS
El Sauzal
Guadalupe y Calvo
Guanacevi
La Cienega
Metates
Tayoltita
San Martín
Fresnillo
Zacatecas
San Luis Potosi
LAGUNA
EL
MORRO
BILBAO
MILAGROS
PINOS
BILBAO
Guanajuato
MEXICO CITY
0
500 Km
SCALE
www.Xtierra.ca
Pipeline of Advanced Projects
100 million silver equivalent ounces in NI 43-101 resource categories (incl. 33 million oz. silver)
Bilbao zinc-lead-silver-copper (100% Xtierra)
•
•
•
•
•
NI 43-101 Resource Estimate (64 million silver equivalent ounces | incl. 19 million oz. silver )
•
10.6 M tonnes indicated resources @ 2.13% Zn, 2.00% Pb, 0.19% Cu, 53.81g/t Ag
•
0.4 M tonnes inferred resources @ 1.44% Zn, 1.73% Pb, 0.18% Cu, 46.39g/t Ag
High grade silver zone along western margin (Hole X26 1.3kg/t Ag/3m) and to the south
(CG-4 247g/t Ag/5.7m)
Upside for additional resource development – deposit open to SW | nearby exploration prospects
Feasibility Study being completed H1 2013
Targeting production 2015 at 1,500-2,000 TPD underground mine
Laguna silver-gold-mercury tailings (100% Xtierra)
•
•
•
•
NI 43-101 Resource Estimate (34 million silver equivalent ounces | 14 million ounces silver )
•
6.8M tonnes measured + indicated @ 57.92 g/t Ag, 0.31 g/t Au, 328.92 g/t Hg
•
0.5M tonnes inferred @ 71.87 g/t Ag, 0.38 g/t Au, 261.26 g/t Hg
Feasibility study completed (Micon - 2007)
1.3 million tonnes/year thiosulphate agitated vat leach proposed
Update feasibility study | further metallurgical test work on static vat leach option | land acquisition
Pinos gold-silver exploration (option to acquire100%)
•
•
•
•
•
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License holdings totaling 3,000 hectares
High grade gold and silver veins as well as bulk tonnage quartz stockwork potential
Wide spread mineralization noted over 1 km strike - highest value obtained 1,760 g/t gold (56 oz/t)
Historic head grade in Pinos district 65 g/t (2oz/t) gold and 1.5kg/t (48 oz/t) silver
Initial 2,000m drilling completed Feb/2010 – best intersection 11.5g/t Au over 4 m
www.Xtierra.ca
Bilbao Project - Highlights
Exploration/Pre-Feasibility | 2006-09
•
13,000 metres drilling (2006-2008)
•
Independent NI 43-101 resource estimate (2008 + 2009)
•
Scoping Study on underground mine (Mar 2007)
•
Preliminary evaluation of oxide metallurgy (Dec 2008)
Feasibility Study | 2010-2012
•
Advanced metallurgical studies (oxide, transition and sulphide ores)
•
Open pit and underground mine design
•
Geotechnical/Rock Mechanics
•
Hydrology
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Environmental baseline
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Topographic mapping
•
Civil engineering/electrical supply
•
43-101 Resource Estimate (2011) - 10% increase in indicated
resources to 10.62 million tonnes includes same metal content
(688,000 tonnes Zn eq) as previous indicated and inferred resource (2010)
•
Infill drilling (10,000m)
•
Drilling of high grade silver veins
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Step-out drilling to expand sulphide resource base
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Infill drilling | condemnation drilling | geotechnical drilling
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Metallurgical test work on oxides
•
Land acquisition (Nov. 2012)
2013
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•
•
•
•
•
Completion of Feasibility Study (H1)
Construction decision (H2)
Project Financing (H2)
Permitting (H2 2013 | H1 2014)
Production target 2015 | 1,500-2,000 tpd underground mine
www.Xtierra.ca
Bilbao Project – Infrastructure
• located 50km east of Zacatecas
• rural setting (non-intensive agriculture)
• flat lying topography
• good infrastructure
• 3km from 4-lane inter-state
highway
• 3km from town of Panfilo Natera
• 1km gravel road from Ojo Caliente
road
• CFE 115kv line within 500 metres
• required land has been purchased
• located adjacent to 3 aquifers
(Schlumberger Water Services)
• excellent ground stability in open pit
and underground (Tratamientos
Geotecnicos)
• no significant environmental issues
• highly skilled workforce in Zacatecas
• availability of goods, services,
contractors
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www.Xtierra.ca
Local Infrastructure
Current access road to project site
Gas Station near project gate
Current access road to project
Electricity sub-station near Pánfilo Natera
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Motorway Mexico 49 near Bilbao
www.Xtierra.ca
Bilbao Project – Geology
Poly-metallic skarn replacement deposit hosted in
Lower Cretaceous limestones and volcanics at
contact with Tertiary intrusives.
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Bilbao Project – 43-101 Resource Estimate
NI 43-101 indicated + inferred
resources (May 2011)
•
Indicated
10.62Mt - 2.00%Pb, 0.19%Cu,
2.13% Zn, 53.81g/t Ag
•
Inferred
0.43Mt -1.73%Pb, 0.18% Cu, 1.44%
Zn, 46.39g/t Ag
Total Holes: 101 | 24,260 m
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 New high grade silver and gold zone on western margin (X26
1.3kg/t /3m | Hole X85 90g/t /20m | X84b 860g/t 1m) being
drilled 2011-2012
 Thicker oxide lenses – up to 90m thick discovered
 Remains open to the southwest
 Resource estimate completed Q2 2011 to be revised Q1 2013
for final mine design
www.Xtierra.ca
3-D Representation of Resource at 2.5% Zn+Pb Cut-off
250 m
OXIDE
MIXED
N
SULPHIDE
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www.Xtierra.ca
Bilbao – Underground Development
•
•
•
•
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Ramp decline
1500-1700 tpd
Long hole open stoping with pillars
Thickened tailings to surface
impoundment
www.Xtierra.ca
Bilbao – Sulphide Flow Sheet
• sulphides amenable to conventional
flotation concentration
• primary & secondary crushing
• SAG/ball mill
• two products
• lead concentrate
• zinc concentrate
• possible copper concentrate being reviewed
• preliminary recovery
• Pb 91%
• Zn 77%
• Au 50%
• Ag 74%
estimates
• concentrate grades
• Zn 43-45%
• Pb 54%
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www.Xtierra.ca
Bilbao – Polymetallic Production
Sulphides & Transition Only
1,500-2,000 TPD U/G
Annual Production
• zinc concentrate
• lead concentrate
• copper concentrate (being evaluated)
• silver production
• gold production (minor)
*Subject to final feasibility
Ag
32%
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www.Xtierra.ca
The Future
Bilbao
• Complete bankable feasibility study – H1 2013
•
•
•
•
•
•
Finalise mineable reserve & resources
•
Socio-economic study for final environmental review
•
Finalise tailings disposal design (thickened | 50% to surface impoundment)
Production decision – H2 2013*
Project Financing – H2 2013*
Permit applications – H2 2013 – Q1 2014*
Construction start up – H1 2014*
Production – 2015*
[* Subject to feasibility study and/or regulatory approvals]
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Share Capital
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Exchange Listing
TSXV: ‘XAG’
Shares Issued
103,425,892
Warrants | Options
None | 8.83M@ $0.21-0.51
Fully Diluted
112.2 million
Share Price (Feb 4, 2013)
$0.24
52 Week Hi/Lo
$0.42/$0.10
Market Cap. (Feb 4, 2013)
$24.8M
Daily Volume
50,000 – 150,000 shares
Major Shareholders
Pacific Road Funds (34%)
Minco Plc (29%)
Sprott (9%)
Cash
$2 million
www.Xtierra.ca
Selected TSX Mexican Silver Companies
Company
Symbol
Feb 1
(C$)
Market
Cap (C$)
52 week
Hi | Lo
Ag res.
oz (M)
Ag
prodn.
oz (M)
Ag Eq.
prodn.
oz (M)
Endeavour Silver
EDR
7.01
$698
11.58 | 6.83
80.0
4.5
6.4
MAG Silver
MAG
11.14
669
13.32 | 6.7
88.0
-
-
Fortuna Silver
FVI
4.27
535
7.58 | 3.03
83.0
4.0
5.2
Aurcana Corp.
AUN
0.88
411
1.26 | 0.72
162.0
1.4
2.5
Great Panther
GPR
1.52
212
2.91 | 1.48
7.2
1.0
1.6
Scorpio Mining
SPM
1.01
200
2.20 | 0.48
61.0
1.2
2.3
Excellon Res.
EXN
0.50
138
0.71 | 0.33
17.0
1.3
Impact Silver
IPT
1.15
78
2.18 | 0.96
12.1
0.8
-
AGQ
0.23
69
0.49 | 0.16
30.6
~ 0.25
-
60.1
2.2
34.0/
100.0 (oz eq)
-
Arian Silver
$334
Average
Xtierra (Feb 1)
17
XAG
0.24
24.8
0.42 | 0.10
www.Xtierra.ca
Management Team
Terence N. McKillen
President & CEO
Director
Mr. McKillen is a professional geologist with over 40 years of experience in the mining industry. He holds B.A. and M.A.
degrees in geology from the University of Dublin (Trinity College) and a M.Sc. degree in mining geology & mineral exploration
from the University of Leicester. He is a registered Professional Geoscientist (P.Geo.) in the Provinces of Ontario and
Newfoundland & Labrador. Mr. McKillen is currently Chief Executive Officer and Director of Minco Plc, and a Director of
Conquest Resources Limited.
Gerry J. Gauthier
Chief Operating Officer
Mr. Gauthier is a professional mining engineer (P.Eng.) with over 40 years operations experience in Canada, USA, Mexico and
Central America. He is a director of Labrador Iron Mines Holdings Limited. Formerly Chief Operating Officer, Nevsun
Resources Ltd. and Vice-President Glencairn Gold Corp., General Manager of the Page-Williams gold mine at Hemlo,
Ontario, Senior Vice President North American Operations for Lac Minerals Ltd.
Danesh K. Varma
Chief Financial Officer
Danesh Varma is Chief Financial Officer, Company Secretary and a Director of Minco plc. Mr. Varma has 30+ years
experience in the mining finance industry, having worked for Brookfield Asset Managers, Northgate Exploration Ltd, Westfield
Minerals Ltd and The Dundee Bank. A qualified accountant in UK and Canada, Mr Varma is currently Chief Financial Officer of
Labrador Iron Mines Holdings Limited, Minco Plc and Conquest Resources Limited and holds directorships with American
Resource Corporation and Anglesey Mining Plc.
Luis de la Fuente
General Manager
Sr. Luis de la Fuente is a graduate engineer from the University of Guanajuato, Mexico and holds a diploma in Administration
from the University of Aguascalientes. He has over 35 years experience in the mining industry with mine development and
operation of open pit mines and processing facilities. Sr. de la Fuente was formerly president of the Mining Association of
Mexico. He has also held senior administrative, planning and operations positions with Compania Minera de Cananea, Minera
Real de Angeles, Helca Mining Co. and Santa Cruz Gold Inc
Alejandro Alaniz
Manager Finance &
Administration
Sr. Alaniz is a Certified Public Accountant and holds a Masters degree in Business Administration from the Universidad del
Valle de Atemajac, Mexico and a Diploma in Industrial Chemistry from the Universidad de Guadalajara, Mexico. He has over
20 years experience in financial administration of Mexican public and private companies. Prior to joining the Minco group in
May 2005, Sr. Alaniz was Finance & Administrative Director of Industrias Nigua C.A. based in the Dominican Republic. Sr.
Alaniz has been responsible for the administration and financial control of the Company’s subsidiaries in Mexico.
Anthony C. Gallon
Chief Geologist
Dr. Anthony Gallon is a professional geologist with B.Sc., M.Sc. and Ph.D. degrees in various geological and geochemical
disciplines from the Universities of Nottingham and Leeds, UK. He is a Member of the Institution of Mining and Metallurgy and
a Chartered Engineer. Tony has worked in the minerals industry for over 40 years with several companies including Roan
Selection Trust, Anglo American Corporation, Robertson Research International and Oxus Gold.
Neil Steenberg
Corporate Secretary,
Legal Counsel & Director
Mr. Steenberg has over 35 years experience in the practise of securities and mining law. Mr. Steenberg currently operates an
independent business law practise. Prior to December 31, 2003, Mr. Steenberg was a Partner in the law firm of Gowling
Lafleur Henderson LLP where he served as Chair of the firm's national corporate finance and securities practice group.
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www.Xtierra.ca
Board of Directors
John F. Kearney
Chair
Terence N. McKillen
Director
Mr. Kearney is a mining and business executive with 40 years experience in the mining industry internationally. He holds law
and economics degrees from University College Dublin, a Masters Degree in Business Administration from Trinity College,
Dublin. He is a member of the Law Society of Ireland. Mr. Kearney was formerly Chairman, President and CEO of Northgate
Exploration Limited. He is a director of a number of public companies including Labrador Iron Mines Holdings Ltd., Canadian
Zinc Corp., Anglesey Mining plc, Conquest Resources Limited, Sulliden Exploration Inc. and Avnel Gold Mines Ltd. He is a
director of the Ireland Fund of Canada.
See Management
Neil Steenberg
Director
See Management
Tim Gallagher
Director
A graduate in Commerce from McMaster University, Mr. Gallagher holds a Master of Business Administration from York
University and is a Chartered Financial Analyst. He is a director of Excalibur Resources Ltd. and Xmet Inc. Previously he was
in institutional sales for Loewen Ondaatje McCutcheon and Union Bank of Switzerland (Canada). Mr. Gallagher has assisted a
number of companies implement their growth plans primarily through the TSXV’s Capital Pool Program since 1997.
Lee A. Graber
Director
Lee is a professional mining engineer with 30+ years experience in the mining industry. He is currently Investment Director
with Pacific Road Capital Management, based in San Francisco. Lee spent 23 years with Homestake Mining Company where
as Vice President responsible for Corporate Development, he initiated, managed and closed major acquisition and divestment
transactions totaling US$9.2 billion. Subsequent to Homestake, Lee was Managing Director, Mergers and Acquisitions for
Endeavour Financial Ltd. in Vancouver advising junior resource companies on financings, mergers and acquisitions and
project development and is, or has been a director of a number of public resource companies including Scorpio Mining Corp.,
AuEx Ventures, Inc., Atacama Minerals Corp., and Asia Pacific Resources Ltd.
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www.Xtierra.ca
Contacts
www.Xtierra.ca
[email protected]
Terence McKillen: President & CEO
+1 (647) 728-4102
[email protected]
Tim Gallagher: Investor Relations
+1 (416) 925-0090
[email protected]
220 Bay Street, Suite 700
Toronto, Ontario, Canada, M5J 2W4
+1 416-362-8243
Hermanos Escobar No. 115, Colonia Agronomica 1
Zacatecas CP 98050, Zacatecas, Mexico
+52 (492) 925-0804
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www.Xtierra.ca