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Marcus Evans Conferences Greenland and Arctic Mineral Exploration and Exploitation Forum 2 nd & 3 rd November 2011 The Cumberland Hotel , London, UK. Growth within Greenland THE ANGEL MINING STORY. History 1. Became an AIM listed mineral exploration company to develop
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Marcus Evans Conferences Greenland and Arctic Mineral Exploration and Exploitation Forum 2nd & 3rd November 2011 The Cumberland Hotel, London, UK
Growth within Greenland THE ANGEL MINING STORY
History 1 • Became an AIM listed mineral exploration company to develop rare earth exploration projects (tantalum) 2005 Commenced exploration at Black Angel zinc/lead mine • Decided to mine the Black Angel $12.5m loan from Cyrus to fund BFS NH recruited • Completed BFS Mining licence for Black Angel Obtained offer of project finance Banking crisis Project finance offer is withdrawn Survival plan
History 2 • Off take agreement with MRI Purchase of Nalunaq Plan to build plant for $12m • Recruitment of new senior operations team • Nalunaq commences production Installed a cable car to access the Black Angel mine New feasibility study for Black Angel
Focussed on Greenland • Highly prospective and underexplored land mass • Greenland is seeking to increase economic independence as Danish subsidy is reduced • Opportunities in gold, zinc, lead, coal, iron ore, rare earths and precious stones, etc. • Angel is currently the only operational mining company in Greenland
Greenland Anything you want to do in Greenland is difficult ! • No road or rail transport • No local distributors of mining equipment or consumables • Purchase order lead time – at least 1 week (assuming air freight) • Very little skilled labour • Ice (fjord freezes over for 6 months, or may be blocked with ice floes) • Bureaucracy can frustrate
Greenland experience to date • NALUNAQ • Bought a bargain • Honest but bureaucratic regulators • Good conceptual project plan • Poor plant design (now rebuilt with design modifications) • Poor management of subcontractors & poor recruitment (new team now working well) • Poor selection of equipment(refurbished or replaced) • Impractical mine plan (new mine captain, new plan, now producing to target) • BLACK ANGEL • Huge opportunity • Good conceptual plan • Poor approach to engineering economic feasibility (new feasibility plan will be completed by year end) 7
Nalunaq Gold Mine • Zero JORC resource but life expectancy of 2 years is anticipated producing c. 50,000 ozs of gold. • Production commencing now • Grade 5 gpt to 100+ gpt (average for Crew was 14.5 gpt) • Cash cost forecast at $900 per ounce • Cash generation potential at current gold price $40m ($800 per ounce) • Invested to date $25m
Black Angel • A high grade zinc/lead mine • Operated by Cominco from 1976 and closed in 1990 • JORC resource of 4.5m tonnes of medium to high grade ore • Capex estimate to build the mine - $80m • Programme – - 2011 complete installation of cable car for mine access - 2012 mine chamber for plant, install plant, entrap first pillars - 2013 commence production • Annual target output 30,000 tonnes of Zn and 9,000 tonnes of Pb • Cash generation potential of first 5 years (pillar extraction) at $2,500 per tonne of metal - $190m
Why Develop Nalunaq ? • Existing mine infrastructure • Perceived to be low risk • Learn how to work in Greenland • Build a competent team • Generate cash to help fund Black Angel Was this a good decision? Time and costs have overrun dramatically. The gold price has increase from $800 per ounce to $1,700 per ounce
Making Nalunaq Economically Viable • Crew Gold shipped ore to Newfoundland for processing • They could not get approval for a process plant on site due to environmental risk • Angel had the idea of locating the process plant inside the mine • NERI supported the plan • We now have the world’s first underground cyanide leaching plant
Nalunaq: Mine Profile • Annual production target of 24,000 ounces • Average target grade of 13.5 grams/tonne • First commercial production in April 2011 • Cyanide plant will allow recovery of circa 92% • Ramp up to mining and full production Q1 2012 • Expected mine life of 2 years with opportunities for possible extensions
Black Angel zinc and lead mine Mine Entrance Mine Camp
Black Angel: future exploration potential DEEP ICE ZONE Drill intersection with 6.9 metres @ 19.5% Zn & 13.1% Pb SOUTH LAKES Measured and Indicated Resources: 1.7Mt @ 6.9% Zn & 2.5% Pb NUNNGARUT Indicated Resources: 0.2 Mt @ 9.0% Zn & 3.4% Pb ARK Measured Resources: 492kt @ 4.7% Zn & 2.2% Pb
Making Black Angel Economically Viable • Cominco built a process plant at Maarmorilik • For 15 years, tailings were disposed into the fjord • Lead contamination poisoned the local fish • Boliden dredged the tailings into very deep water – pollution cleared • Angel plan is to build a process plant in the mine and dispose the tailings as part of the roof support • First 5 to 6 years will be mining pillars
The Future • We have already learned a great deal, • much of it – the hard way. • There is still much more to learn and even more to do. • To continue development of our team • Improve training • Achieve highest practical level of operational efficiency • To set the standard for mining in Greenland • Develop NGM, BA and other Greenlandic projects
