Another Iron ore producer crawls out of the woodwork

I RO N O R E I N CANADA
INVESTOR
PRESENTATION
August 2008
Forward Looking Statements
The information presented contains “forward-looking statements”, within the meaning of the United States Private Securities Litigation Reform Act of 1995,
and “forward-looking information” under similar Canadian legislation, concerning the business, operations and financial performance and condition of the
Company. Forward-looking statements and forward-looking information include, but are not limited to, statements with respect to estimated production, the
estimation of mineral reserves and mineral resources; the realization of mineral reserve estimates; the timing and amount of estimated future production;
costs of production; capital expenditures; success of exploration activities; permitting time lines and permitting, mining or processing issues; government
regulation of mining operations; environmental risks; unanticipated reclamation expenses; title disputes or claims; litigation liabilities; and limitations on
insurance coverage
coverage. Generally
Generally, forward-looking
forward looking statements and forward
forward-looking
looking information can be identified by the use of forward-looking
forward looking terminology such
as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or
“believes”, or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur”
or “be achieved”. Forward-looking statements and forward-looking information are based on the opinions and estimates of management as of the date such
statements are made, and they are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity,
performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking statements or
forward-looking information. Although management of the Company has attempted to identify important factors that could cause actual results to differ
materially from those contained in forward-looking statements or forward-looking information, there may be other factors that cause results not to be as
anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ
materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements and forward-looking
information. The Company does not undertake to update any forward-looking statements or forward-looking information that are incorporated by reference
herein except in accordance with applicable securities laws
herein,
laws.
Investors are advised that National Instrument 43-101 of the Canadian Securities Administrators requires that each category of mineral reserves and mineral
resources be reported separately. Mineral resources that are not mineral reserves do not have demonstrated economic viability.
Cautionary Note to U.S. Investors Concerning Estimates of Measured, Indicated or Inferred Resources
The information presented uses the terms “measured”, “indicated” and “inferred” mineral resources. United States investors are advised that while such terms
are recognized and required by Canadian regulations, the United States Securities and Exchange Commission does not recognize these terms. “Inferred
mineral resources” have a great amount of uncertainty as to their existence, and as to their economic and legal feasibility. It cannot be assumed that all or
part of an inferred mineral resource will ever be upgraded
pg
to a higher
g
category.
g y Under Canadian rules,, estimates of inferred mineral resources mayy not
anyy p
form the basis of feasibility or other economic studies. United States investors are cautioned not to assume that all or any part of measured or indicated
mineral resources will ever be converted into mineral reserves. United States investors are also cautioned not to assume that all or any part of an inferred
mineral resource exists, or is economically or legally mineable.
2
Investment Highlights
 World
W ld class
l
development-stage
d
l
t t
iiron ore project
j t
– high quality, high recovery, 34 year life, upside potential
 Unique location = low cost, fast development
– ready infrastructure: rail, road, power, port
 Higher return versus peers
– Feasibility study completed
April 2007 — IRR 44.5% pre-tax
 Experienced management team
– CEO has commissioned four
major developments
3
Agenda
 Company overview
 What sets this project apart
 Development Scenario
 Acquisition Quinto
 Moving forward
4
Consolidated Thompson at a Glance
 Exploration and development company that owns the developmentstage Bloom Lake iron ore deposit in Labrador Trough, Quebec
Stock symbol:
Share price (08/06/08):
CLM – TSX
$6.69
Shares issued:
118.9 million
Fully diluted:
132.1 million
52-week High/Low:
Market cap:
Cash:
$10.21 – $4.00
C$795 million
C$352.4 million
5
Strong Board of Directors
Bruce Humphrey,
p
y, Chairman: Former COO at Goldcorpp & President and CEO of
Desert Sun Mining prior to its sale to Yamana Gold.
Brian V. Tobin, Vice Chairman: Former Federal Minister of Industry & Premier of
Newfoundland / Labrador.
Pierre Lortie, Chair of Advisory Board: Former President of the Montreal Stock
Exchange & President and COO of Bombardier International and Bombardier
Transportation.
Stan Bharti, Director: 25 years + experience in operations, public markets and
finance
Jean Depatie, Director: Over 35 years of national and international experience in
economic geology; Serves on the board of Glamis Gold.
Gerald McCarvill, Director: 20+ years experience in the financial sector
Bernard Wilson, Director: Senior financial professional with extensive international
experience and relationships.
6
Experienced Management
Richard Quesnel, President, CEO & Director: Professional Mining Engineer and holds
a B.Sc. (Engineering) from McGill University, Montreal.
Experience commissioning four major developments from start-up including:
• Mount Wright Mine, Quebec Cartier Mine, Quebec
• Gibraltar Mine,
Mine British Columbia,
Columbia an open pit operation similar to this project
• Barrick Gold, commissioned and operated the flagship Meikle mine in Nevada
• Montcalm, Falconbridge, Ontario
Brad
B
dB
Boland,
l d Chi
Chieff Fi
Financial
i l Offi
Officer: CMA with
ith extensive
t
i financial
fi
i l
experience within resources. Previously VP, Corporate Controller of
Kinross Gold Corp. and VP, Finance of Goldcorp Inc.
Pat Gleeson, Corporate Secretary: Mr. Pat Gleeson is a corporate
securities lawyer. In addition, he is an officer of several publicly traded
companies.
René Scherrer, Hubert Vallée & Ghislain Arel, Project Managers:
Former managers @ Québec Cartier, Iron Ore Company of Canada and
Quebec Fer et Titane.
Marc Duchesne, VP Finance & Michel Perras, VP HR & Safety:
Former directors with extensive experience within resource sectors.
7
Agenda
 Company overview
 What sets this project apart
 Development Scenario
 Acquisition Quinto
 Moving forward
8
1. Positioned in Attractive Iron Ore Market
 Iron
I
ore – primary
i
steel
t l making
ki componentt
 Three years of rising prices
– 33% increase in Chinese steel making
– 70% increase in 2005; 19% in 2006
– 9.5% in 2007 and 65% in 2008
 70% of export production controlled by
three companies
– CVRD, BHP, RTZ
– committed $8.5 B to new expansion projects
 Despite expansions, tight supply and
shortages forecast over next five years
9
2. In a Good Neighbourhood
 Th
Three existing
i ti producers
d
5% of world production
Carol Lake
16.0 MTPY
Wabush Iron
5.5 MTPY
Mont-Wright
15.0 MTPY
Churchill
Falls
Twin Falls
Labrador CAROL LAKE (IOC)
City
Bloom Lake Property
LABRADOR
WABUSH (WABUSH IRON)
MONT-WRIGHT (QCM)
36.5 MTPY
 Future producer
QUÉBEC
Bloom Lake 7.0 MTPY with
potential to expand
Sept-Iles
Port Cartier
St. Lawrence
River
10
3. A World-Class Ore Body
Total In Situ Mineral Resources at a Cutoff of 15% Total Fe
Average Grades
Resource
Category
Volume
bcm* x 1,000
Tonnage
tonnes x 1,000
Total Fe%
Magnetite%
CaO%
MgO%
Measured
141,350
488,465
29.91
10.54
2.32
2.18
I di t d
Indicated
43 372
43,372
149 232
149,232
29 29
29.29
10 55
10.55
2 37
2.37
2 15
2.15
184,722
,
637,697
,
29.76
10.54
2.33
2.17
10,322
35,697
30.97
8.47
0.84
0.82
Total Measured
+ Indicated
Inferred
Source: Bloom Lake 43-101 Report
* Bulk cubic metre - A historic unit of measure in the iron ore industry.
11
3. Exploration Program = Growth Potential
Mill Site
Exploration 2007 - 2008
5,000 m.
Actual Pit Outline
4. Low Cost Due to Unique Location
 Major infrastructure
already in-place
Churchill
Falls
Twin Falls
– rail lines
– power lines
Labrador CAROL LAKE (IOC)
City
Bloom Lake Property
LABRADOR
WABUSH (WABUSH IRON)
MONT-WRIGHT (QCM)
– main access roads
– housing for employees
p sea port
p
– deep
QCM
QNS&L
QUÉBEC
É
Sept-Iles
Pointe Noire
Port Cartier
St. Lawrence
River
Producing iron mine
Shipping terminal
Rail line
Hydro
Road
13
4. Low Cost Due to Unique Location
 Only
O l significant
i ifi
t infrastructure
i f t t
item
it
is
i 31 km
k railil line
li
 To be built and operated by third party
31 km
k
Proposed rail line
connection to
QNS&L /IOC rail line
Labrador
City
Bloom Lake
Project
14
5. Rapid Development Timeline
 Compact infrastructure footprint
15
Agenda
 Company overview
 What sets this project apart
 Development Scenario
 Acquisition Quinto
 Moving forward
16
Feasibility Study Summary
Bloom Lake Iron Ore Project
Output (concentrate):
Total Capital Expenditures(1):
7 Mt per year
CDN $410 M
Revenues:
US $42.09/t concentrate
Operating costs:
US $19.76/t concentrate
Total cash flow*:
US $2,754 M
Net present value (12%)*:
Internal rate of Return*:
Payback
b k period*:
d*
Mine life:
US
$739 M
44.5%
~2.4 years
34 years
*Pre-tax
(1) Feasibility Study Exchange Rate: CDN/US Exch 1.17
17
The Planned Mining Operation
 Conventional open-pit mining
 Trucks and shovels
– 24 hours per day, 7 days a week, 365 days per year
 Mining
g rate:
a
17.5
5 M d y tonnes
o
of
o ore
o producing
p odu g
7 MT concentrate per year
 Concentrate ~66.5% total iron
– equal to or better than other Quebec /
Labrador producers
18
Agenda
 Company overview
 What sets this project apart
 Development Scenario
 Acquisition Quinto
 Moving forward
19
Investment Highlights

On April 21st, CLM announced a friendly acquisition of Quinto Mining
Corp. With this acquisition, CLM would add two major projects
(Peppler Lake & Lamelee) within the heart of the same infrastructureready camp as Bloom Lake

This acquisition has the potential to position CLM as the 2nd largest
iron ore producer in Canada

Potential for significant synergies between Bloom Lake & newly
acquired
q
Peppler
pp Lake & Lamelee
–


World class development-stage iron ore projects
–
High quality, high recovery, upside potential
–
Peppler Lake and Lamelee provide significant upside potential
Unique location = low cost, fast development
–

Rail, port, mill, G&A, etc.
Ready infrastructure: rail, road, power, port
Experienced management team and board
–
CEO has commissioned four
major developments
20
Quinto Assets
 Principal assets to be acquired are
the Peppler Lake and Lamelee iron
ore deposits, located within close
proximity of Bloom Lake
 Updated resource estimate for
Peppler Lake indicated resource of
302 million tonnes grading 28.4% Fe
– 17 further holes expected to increase
tonnage
to
age
Churchill
Falls
Twin Falls
Labrador CAROL LAKE (IOC)
City
Bloom Lake Property
WABUSH
MONT-WRIGHT (QCM)
Lamelee
Peppler Lake
QUÉBEC
 The Lamelee deposit is 10 km north
of Peppler Lake
– Intersections of 250 – 350 m grading
30%+ Fe starting 3 m from surface
– 27 holes already drilled
– Tonnage
g could exceed Peppler
pp Lake
LABRADOR
Sept-Iles
Port Cartier
St. Lawrence
River
21
Transaction Summary
Structure
Exchange Ratio
Consideration Offered
Listings

Business combination via plan of arrangement

Share exchange

0.2 Consolidated Thompson shares for each Quinto share

Implied value of C$1.54 per share (based on the April 18, 2008 TSX
closing price of Consolidated Thompson)

Premium of 38.7% to the 20-day volume weighted average price of
Quinto; premium of 16% to the April 18, 2008 closing price

Values Quinto at C$150 million on a fully diluted basis

Toronto Stock Exchange: CLM

Toronto Venture Exchange: QU
Benefits to CLM Shareholders

Substantial increase in iron ore resources,
resources with an indicated 302 million tonnes
defined at Peppler Lake
–

45% percent increase in iron ore based on current resource estimate (24% increase on a per share
basis)
Significant potential for further resource expansion at Peppler Lake and Lamelee
–
Recent positive drill results at Peppler Lake have not been included in the resource estimate
–
Recent Lamelee drill results suggest that Lamelee has the potential to exceed the tonnage and
grade
d att P
Peppler
l Lake
L k

Potential future expansion in production to 16 million tonnes per year

Significant synergies expected through rail, port, mill, G&A

Opportunity to fast track both Peppler Lake and Lamelee to production by leveraging
development, operational and technical expertise of CLM management

Acquisition
q
could propel
p p CLM toward continued consolidation in the Labrador Trough
g
Agenda
 Company overview
 What sets this project apart
 Development Scenario
 Acquisition Quinto
 Moving forward
24
Timeline to Production
2005
2006
006
2007
2008
2009
Q1 Q2 Q3 Q4
Q1 Q2 Q3 Q4
Q1 Q2 Q3 Q4
Q1 Q2 Q3 Q4
Q1 Q2 Q3 Q4
Restructuring
R
Resources
43-101
43 101
Scoping Study
Feasibility Study (5MT)
EIS and Permitting
Feasibility (7MT)
Final Off-Take Agreements
Final Transport Agreements
Final Project Financing
Construction
Mining Production Q2-2009
25
Priorities
 Completed :
–
Technical review NI 43-101 of the mineral resources at Bloom Lake
–
Positive Scoping Study on Bloom Lake
–
Feasibility Study confirming economic viability @ 5.0 Mtpy
–
Closed $42 M Financing
–
Submitted Environmental Impact Study and retained BBA for the EPCM
–
Feasibility Study on Expansion of Bloom Lake to 7.0 Mtpy
–
Closed $200 M Equity Financing
–
Secured equipment with long lead times – AG mill and gyratory crusher
–
Long-term
g
contracts for sales of iron ore: 100% for 7 yyears
 Advanced into the development-stage of a World
class iron ore project:
–
Reviewing potential increase in throughput
–
Finalizing last Phase of Financing
–
Finalizing transport arrangements
–
Initiating Construction in Q1 2008
26
Why Invest in Consolidated Thompson
1
Unique
U
i
Location
L
ti =
Low Cost & Fast track
Development
2
+
High return project &
P iti
Positioned
d in
i a Favorable
F
bl
Iron Ore Market
3
+
World Class Deposit
with upside potential
4
+
E
Experienced
i
d Team
T
Leverage
Appendix 1: Concentrate Specifications
Bloom Lake Concentrate Specification
Element or Mineral
Iron
Formula
Fe
Min (%)
Max (%)
Typical (%)
65
68.0
66.0
Sili
Silica
SiO2
55
5.5
45
4.5
Alumina
Al2O3
0.3
0.15
Lime
CaO
0.25
Magnesia
MgO
0.30
Titania
TiO2
0 02
0.02
Manganese
Mn
0.15
0.02
Phosphorus
P
0.03
0.015
Sulphur
S
0.02
Na2O
0 018
0.018
K2O
0.007
Soda
Potash
LOI
Moisture
H2O
1.0
0.2
5.0
4.0
6.0
2.0
Particle Size Analysis
larger than 0.4 mm
Average particle size (d 50)
0.26 mm
Smaller than 0
0.15
15 mm
25 0
25.0
Smaller than 0.045 mm
25.0
5.0
28
Bloom Lake - Mine Site
Bloom Lake – Access Road
Bloom Lake – Preliminary Work