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Cdm Corporate Presentation

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CobreDelMayo

Cobre del Mayo is a Mexican copper mining company whose principal asset is the Piedras Verdes Mine, a large producing open pit copper mine in Sonora, Mexico. Since being acquired by Invecture Group in 2009, the mine has been transformed into a high quality copper producing asset through implementing three processing methods and expanding reserves to 3 billion pounds of copper. Cobre del Mayo has a stable production profile, low costs, a long mine life of 17 years, and generates reliable cash flow from its established operations in the favorable and low-risk mining jurisdiction of Sonora, Mexico.

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1 COBRE DEL MAYO Corporate Presentation June, 2013
2 Content I. Introduction & Overview II. Piedras Verdes Project III. Operational Environment IV. Industry and Commodity Overview V. Conclusion 3 8 14 18 21 COBRE DEL MAYO 2
I. Introduction & Overview
4 Cobre del Mayo, S.A. de C.V. (Cobre del Mayo, CDM or the Company) is a Mexican based company whose principal asset is the Piedras Verdes Mine (Piedras Verdes or the PV Mine) which is a large, producing open pit copper mine located near the town of Alamos in Sonora, Mexico The PV Mine produces LME Grade A copper cathode and sells refractory and vein type ore for its processing into concentrate CDM became 100% owned by Invecture Group S.A. de C.V. (Invecture) subsequent to Invectures acquisition of Frontera Copper Corporation (FCC), a Canadian TSX-listed company, in May 2009 Since the acquisition by Invecture and under the stewardship of new management, the PV Mine has been transformed into a high quality copper producing asset Introduction COBRE DEL MAYO 4
5 Business Strategy The key principles of our current business strategy include: Continue to operate the PV mine on a stable basis, pursue opportunities to improve cash cost and free cash flow with lower capital consumption Implement low capex operational optimization such as Mines Dispatch System to lower mining costs and improve truck utilization, electrowinning titanium anodes to reduce unit electricity consumption and enable increase cathode production and crushing system upgrades to further improve recoveries Focus on maintaining low costs and take advantage of stable production to generate reliable cash flow As such, CDM is a 3rd Quartile producer including by-product credits and a 2nd Quartile producer excluding by-products The overall business strategy is built on a commitment to sustainable and safe mining Strong culture and philosophy of prioritization of safety measures COBRE DEL MAYO 5 14
6 Company overview COBRE DEL MAYO 6 10 Successful Completion of Turnaround and Ramp-Up Transformed PV Mine from poorly performing Run of Mine (ROM) heap leach SX/EW to a crushed and conveyor stacked leach, with a low grade ROM leach, and a contract to sell high grade vein type refractory ore to Kupari Metals (KM) for flotation Enabled PV to process substantially all of the ore type present with rates of recovery commensurate with grade Expanded the reserve from under 1 billion pounds of copper in 2009 to an estimated 3 billion pounds today Creation of: Additional revenues from the sale of ore to Kupari Metals flotation plant Stable production of cathode at or above nameplate capacity Mine life that has increased from 9 to 17 years Stable profitability, cash flow and enterprise value generation resulting from the implementation of three processes with sound grade control and the expansion of the deposit Established and Stable Producer Ramp up of the crushing system in mid 2010 and stacking system in late 2010 has enabled improved recoveries and lower operating costs Processes in use at CDM are based on proven and broadly used technologies The mine and process equipment is modern Mine fleet has on average approximately over half of its useful life remaining Crushing, screening and stacking system was completely rebuilt when acquired The SXEW system was acquired new in 2006 and is state of the art
7 Company overview (contd) COBRE DEL MAYO 7 10 Favorable Mining Jurisdiction Mexico is an OECD and WTO country with free trade agreements in place with over 40 countries Signatory to all major international conventions and treaties Foreign trade represents over 60% of GDP; central bank reserves of US$167 billion Sonora is safe Privileged location with full infrastructure in place 30 minutes from Alamos and Navojoa provides access to skilled labor and management Connected to high voltage, low cost electricity grid Access via modern paved highways to the rest of Sonora and Arizona; deep water port is within 5 hours Water available at the mine exceeds requirements by about 60% The union is cooperative and modern in its approach to labor relations Proven Management Team Operating team at site complemented by the strategic and technical team based in Vancouver and Invecture team in Mexico City Multidisciplinary operating management drawn from three countries The size and operating margins at CDM enable it to pay very competitive compensation The track record and successful turnaround of PV evidences the strength of management
II. Piedras Verdes Project
9 Piedras Verdes Mine History 2002 20092003 2004 2005 2006 2007 2008 March 02 FCC purchases Phelps Dodge's 70% interest in Piedras Verdes Mine May 03 FCC acquires remaining 30% stake in Piedras Verdes Mine from Azco Mining December 04 FCC lists on the TSX February 05 FCC signs letter of intent with Grupo Peal for the provision of contract mining services October 06 Commercial production at Piedras Verdes Mine April 07 Inaugural ceremony to commemorate completion of construction, commissioning and ramp up toward full production of Piedras Verdes November 08 Development of the Piedras Verdes Mine was suspended due to low copper prices to preserve cash May 09 FCC delisted from TSX, although Series 1 and 2 Notes remained listed (until later extended and prepaid by Invecture) December 08 Invecture announces offer to acquire all of the common shares of FCC COBRE DEL MAYO 9 15
10 Key Initiatives Implemented Under New Ownership and Management Changed from contract mining to owner operation and purchased the former contractors equipment fleet Purchased, re-engineered and installed a crushing, screening, conveying and stacking system to convert the operation from Truck Dump Run of Mine to a primarily crush-conveyor stacked heap leach Undertook the successful recharacterization and modeling of alternative styles of mineralization Developed new mining and processing plans and implemented an effective ore quality and grade control system Initiated an aggressive resource definition and expansion drill campaign Completed an agreement with Kupari Metals to supply crushed ore Developed a new resource model and mine plan to produce a target 32 ktpa of copper cathodes COBRE DEL MAYO 10 16
11 Fully Developed Infrastructure and Advantaged Location COBRE DEL MAYO 11 All infrastructure is in place Extremely competitive transportation costs for off-takers given Piedras Verdes location and nearby infrastructure Huatabampo Chihuahua Sinaloa Piedras Verdes Alamos Navojoa Sonora Ciudad Obregon Guaymas Baja California P C Deep Water Port Commercial Airport Railway Rail Station Major Highway Private Airport C P Easily Accessible by: Air: Ciudad Obreg坦n Airport (~90 minute drive - 111 km) has 10 commercial flights daily lamos-5,000 foot paved runway (22 km) available to general aviation Road: 14 km access road to secondary road that reaches (i) the State Highway 162, (ii) the lamos/Navojoa Highway or (iii) the Pan- American Highway that passes through Navojoa Rail: ~50 km to Sonoras mainline north-south railway Port: 250 km to deep-water port of Guaymas (from which copper concentrate is blended and exported by both trading and mining companies) Power: Connected to CFE grid to the mine owned and maintained substation with continuous capacity of 25 MW; CDM is CFEs single largest customer in the area Cost of electricity is ~0.10/kWh, which is ~35% cheaper than Chile, largest copper producing country Water: CDM holds 16 titled water concessions with a combined tested industrial water totaling ~8.1 Mm続/y while the requirement for the operation of the PV mine and flotation plant is ~5.5 Mm続/y 22
12 Disciplined Exploration and Drilling Program To Solidify Resource Base CDM controls a portfolio of 30 titled mining concessions Encompasses area of ~57k hectares Fully paid all claim license fees and taxes for concessions owned and under control No litigation pending with respect to any concessions All concessions have been surveyed by a certified and registered mineral lands surveyor Piedras Verdes is on 3,809 hectares of land CDM initiated a highly successful exploration program in Q4 2011, scheduled for completion in Q4 2013, that has added resources at a rate of ~15 Mt per month COBRE DEL MAYO 12 19
13 Mine Plan Flow Diagram COBRE DEL MAYO 13 PV Mine utilizes conventional truck and shovel mining methods Two alternative process options are utilized for copper recovery: ROM heap leach Crushed ore heap leach Copper is produced as: LME Grade A cathode from the SX/EW process Ore is mined 24 hours per day, 365 days per year Customers / Off Takers Trafigura: 18 months since June 2013 & LME + US$0.25 cents / lb Kupari Metals CDMs copper is used in end-markets in the U.S. and Mexico Strong quality and brand that is recognized in the market 20 High%Grade%% Sale%to%KM% High Grade Crushing System Sale to KM
III. Operational Environment
15 Stable Operating Environment in Mexico COBRE DEL MAYO 15 Mexico is an economic leader in Latin America and is the worlds 11th largest economy by GDP 2013E and 2014E real GDP growth of 3.4% per year High degree of political stability OECD/WTO country and member of 12 free trade agreements, including NAFTA Mexican Peso has long history of one of the ten most traded global currencies Mexico is recognized as a mining friendly jurisdiction Largest producer of silver globally (17% of global production) Largest producer of zinc in Latin America (2011 production of 626kt) 3rd largest producer of copper in Latin America (2011 production of 414kt) As a result of mining-supportive governmental policies, stability, OECD tax regime and abundance of resources, Mexico has attracted extensive investment from international mining companies Over 200 mining companies operate in Mexico, of which 60 have producing assets; 53 of those 60 belong to subsidiaries of foreign companies ~40% of mine production and ~70% of investments in exploration are undertaken by foreign investors Sources: IMF, Brook Hunt. 26
16 Sonora is Among the Most Prolific Mining Areas in Mexico COBRE DEL MAYO 16 Sonora is one of Mexicos safest states and the only U.S. border state that has not been significantly affected by recent violence associated with the war on drugs Sonora represents Mexicos most important state in terms of mining production Largest copper producing state in Mexico Sources: Ministry of Public Safety and Security, Mexican Mining Statistics 2011, Metals Economic Group. (1) Based on the methodology of the Ministry of Public Safety and Security 2011 Total Mining Production in Mexico Very High / High Medium Low Risk Ratings1 Sonora 2011 Copper Production in Mexico Crime Index (Crimes per 1,000 people) Sonora 27% Zacatecas 25% Chihuahua 12% Coahuila 9% Others 27% Sonora 67% Zacatecas 14% San Luis Potosi 8% Others 11% 48 17 16 13 10 6 4 2 1 Chihuahua Baja California Baja California Sur Quintana Roo Aguas- calientes Sonora Chiapas Colima Campeche National Average = 9 27
17 Pristine Track Record of Safety, Environmental and Labor Relations COBRE DEL MAYO 17 Safety, Environmental compliance and Labor relations are key areas of focus of CDM Since current management took control of the operation, Piedras Verdes has had a solid safety track record The amount paid by CDM for Riesgo de Trabajo (worker risk) as classified by IMSS is in the lowest quota, demonstrating the improvements of safety standards at CDM Framework and policies and procedures to mitigate operational risk and ensure regulatory and environmental requirements compliance Employee training programs support the effective execution of these policies and procedures which are consistently reviewed CDM has obtained all necessary permits for the construction and operation of the mine Future permits for further construction and operation such as leach pad expansion would be required; to date, such permits have been issued in the normal course of business Piedras Verdes complies with all applicable environmental standards that are among the worlds most advanced Labor relations: Large pool of nearby qualified labor Approx. 70% of the workforce lives in Navojoa with the remaining 30% living in Alamos Approx. 40% of the ~310 line employees are represented by the Confederaci坦n de Trabajadores de Mexico (CTM) which is one of Mexicos largest unions characterized by constructive and open approach towards labor relations (unlike SNTMMSSRM) CDM and Piedras Verdes have historically held a positive relationship with CTM No work stoppages in the history of the Piedras Verdes Mine Certified as Industria Limpia (Clean Industry) by PROFEPA (enforcement arm of SEMARNAT; Mexican environmental protection agency) and Empresa Socialmente Responsible (Socially Responsible Company) by Centro Mexicano para la Filantrop鱈a 28
IV. Industry and Commodity Overview
19 Incentive Price Drives the Value of Copper COBRE DEL MAYO 19 The incentive price required to justify investments in the expansion of existing mines and the construction of new ones is estimated by Goldman Sachs at US$3.23/lb Although short term copper prices are unpredictable, copper must ultimately trade above US$3.23/lb for global mine copper supply to be maintained Source: Goldman Sachs Research estimates.
20 Evolution of Copper Estimates Overtime The market has consistently underestimated copper prices when forecasting long term Copper Price (US$ / lb) -- 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00 4.50 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2010 2009 2008 Actual 10 LT 09 LT 08 LT 07 LT 06 LT 05 LT04 LT03 LT02 LT 01 LT2000 LT 11 LT 2011 2012 2013 LT Long Term Price (as forecast during Q4 of year indicated)(1) Actual Copper Price Broker Consensus (as forecast during Q4 of year indicated) 12 LT Source: Bloomberg, Wall Street Broker Estimates. COBRE DEL MAYO 20 32
V. Conclusion
22 Conclusion Proven Management Team COBRE DEL MAYO Strong Copper Fundamentals Established and Stable Producer Low Financial Risk and Robust Cash Flow Generation Favorable Mining Jurisdiction COBRE DEL MAYO 22 Successful Completion of Turnaround and Ramp-Up 46

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Cdm Corporate Presentation

  • 1. 1 COBRE DEL MAYO Corporate Presentation June, 2013
  • 2. 2 Content I. Introduction & Overview II. Piedras Verdes Project III. Operational Environment IV. Industry and Commodity Overview V. Conclusion 3 8 14 18 21 COBRE DEL MAYO 2
  • 3. I. Introduction & Overview
  • 4. 4 Cobre del Mayo, S.A. de C.V. (Cobre del Mayo, CDM or the Company) is a Mexican based company whose principal asset is the Piedras Verdes Mine (Piedras Verdes or the PV Mine) which is a large, producing open pit copper mine located near the town of Alamos in Sonora, Mexico The PV Mine produces LME Grade A copper cathode and sells refractory and vein type ore for its processing into concentrate CDM became 100% owned by Invecture Group S.A. de C.V. (Invecture) subsequent to Invectures acquisition of Frontera Copper Corporation (FCC), a Canadian TSX-listed company, in May 2009 Since the acquisition by Invecture and under the stewardship of new management, the PV Mine has been transformed into a high quality copper producing asset Introduction COBRE DEL MAYO 4
  • 5. 5 Business Strategy The key principles of our current business strategy include: Continue to operate the PV mine on a stable basis, pursue opportunities to improve cash cost and free cash flow with lower capital consumption Implement low capex operational optimization such as Mines Dispatch System to lower mining costs and improve truck utilization, electrowinning titanium anodes to reduce unit electricity consumption and enable increase cathode production and crushing system upgrades to further improve recoveries Focus on maintaining low costs and take advantage of stable production to generate reliable cash flow As such, CDM is a 3rd Quartile producer including by-product credits and a 2nd Quartile producer excluding by-products The overall business strategy is built on a commitment to sustainable and safe mining Strong culture and philosophy of prioritization of safety measures COBRE DEL MAYO 5 14
  • 6. 6 Company overview COBRE DEL MAYO 6 10 Successful Completion of Turnaround and Ramp-Up Transformed PV Mine from poorly performing Run of Mine (ROM) heap leach SX/EW to a crushed and conveyor stacked leach, with a low grade ROM leach, and a contract to sell high grade vein type refractory ore to Kupari Metals (KM) for flotation Enabled PV to process substantially all of the ore type present with rates of recovery commensurate with grade Expanded the reserve from under 1 billion pounds of copper in 2009 to an estimated 3 billion pounds today Creation of: Additional revenues from the sale of ore to Kupari Metals flotation plant Stable production of cathode at or above nameplate capacity Mine life that has increased from 9 to 17 years Stable profitability, cash flow and enterprise value generation resulting from the implementation of three processes with sound grade control and the expansion of the deposit Established and Stable Producer Ramp up of the crushing system in mid 2010 and stacking system in late 2010 has enabled improved recoveries and lower operating costs Processes in use at CDM are based on proven and broadly used technologies The mine and process equipment is modern Mine fleet has on average approximately over half of its useful life remaining Crushing, screening and stacking system was completely rebuilt when acquired The SXEW system was acquired new in 2006 and is state of the art
  • 7. 7 Company overview (contd) COBRE DEL MAYO 7 10 Favorable Mining Jurisdiction Mexico is an OECD and WTO country with free trade agreements in place with over 40 countries Signatory to all major international conventions and treaties Foreign trade represents over 60% of GDP; central bank reserves of US$167 billion Sonora is safe Privileged location with full infrastructure in place 30 minutes from Alamos and Navojoa provides access to skilled labor and management Connected to high voltage, low cost electricity grid Access via modern paved highways to the rest of Sonora and Arizona; deep water port is within 5 hours Water available at the mine exceeds requirements by about 60% The union is cooperative and modern in its approach to labor relations Proven Management Team Operating team at site complemented by the strategic and technical team based in Vancouver and Invecture team in Mexico City Multidisciplinary operating management drawn from three countries The size and operating margins at CDM enable it to pay very competitive compensation The track record and successful turnaround of PV evidences the strength of management
  • 9. 9 Piedras Verdes Mine History 2002 20092003 2004 2005 2006 2007 2008 March 02 FCC purchases Phelps Dodge's 70% interest in Piedras Verdes Mine May 03 FCC acquires remaining 30% stake in Piedras Verdes Mine from Azco Mining December 04 FCC lists on the TSX February 05 FCC signs letter of intent with Grupo Peal for the provision of contract mining services October 06 Commercial production at Piedras Verdes Mine April 07 Inaugural ceremony to commemorate completion of construction, commissioning and ramp up toward full production of Piedras Verdes November 08 Development of the Piedras Verdes Mine was suspended due to low copper prices to preserve cash May 09 FCC delisted from TSX, although Series 1 and 2 Notes remained listed (until later extended and prepaid by Invecture) December 08 Invecture announces offer to acquire all of the common shares of FCC COBRE DEL MAYO 9 15
  • 10. 10 Key Initiatives Implemented Under New Ownership and Management Changed from contract mining to owner operation and purchased the former contractors equipment fleet Purchased, re-engineered and installed a crushing, screening, conveying and stacking system to convert the operation from Truck Dump Run of Mine to a primarily crush-conveyor stacked heap leach Undertook the successful recharacterization and modeling of alternative styles of mineralization Developed new mining and processing plans and implemented an effective ore quality and grade control system Initiated an aggressive resource definition and expansion drill campaign Completed an agreement with Kupari Metals to supply crushed ore Developed a new resource model and mine plan to produce a target 32 ktpa of copper cathodes COBRE DEL MAYO 10 16
  • 11. 11 Fully Developed Infrastructure and Advantaged Location COBRE DEL MAYO 11 All infrastructure is in place Extremely competitive transportation costs for off-takers given Piedras Verdes location and nearby infrastructure Huatabampo Chihuahua Sinaloa Piedras Verdes Alamos Navojoa Sonora Ciudad Obregon Guaymas Baja California P C Deep Water Port Commercial Airport Railway Rail Station Major Highway Private Airport C P Easily Accessible by: Air: Ciudad Obreg坦n Airport (~90 minute drive - 111 km) has 10 commercial flights daily lamos-5,000 foot paved runway (22 km) available to general aviation Road: 14 km access road to secondary road that reaches (i) the State Highway 162, (ii) the lamos/Navojoa Highway or (iii) the Pan- American Highway that passes through Navojoa Rail: ~50 km to Sonoras mainline north-south railway Port: 250 km to deep-water port of Guaymas (from which copper concentrate is blended and exported by both trading and mining companies) Power: Connected to CFE grid to the mine owned and maintained substation with continuous capacity of 25 MW; CDM is CFEs single largest customer in the area Cost of electricity is ~0.10/kWh, which is ~35% cheaper than Chile, largest copper producing country Water: CDM holds 16 titled water concessions with a combined tested industrial water totaling ~8.1 Mm続/y while the requirement for the operation of the PV mine and flotation plant is ~5.5 Mm続/y 22
  • 12. 12 Disciplined Exploration and Drilling Program To Solidify Resource Base CDM controls a portfolio of 30 titled mining concessions Encompasses area of ~57k hectares Fully paid all claim license fees and taxes for concessions owned and under control No litigation pending with respect to any concessions All concessions have been surveyed by a certified and registered mineral lands surveyor Piedras Verdes is on 3,809 hectares of land CDM initiated a highly successful exploration program in Q4 2011, scheduled for completion in Q4 2013, that has added resources at a rate of ~15 Mt per month COBRE DEL MAYO 12 19
  • 13. 13 Mine Plan Flow Diagram COBRE DEL MAYO 13 PV Mine utilizes conventional truck and shovel mining methods Two alternative process options are utilized for copper recovery: ROM heap leach Crushed ore heap leach Copper is produced as: LME Grade A cathode from the SX/EW process Ore is mined 24 hours per day, 365 days per year Customers / Off Takers Trafigura: 18 months since June 2013 & LME + US$0.25 cents / lb Kupari Metals CDMs copper is used in end-markets in the U.S. and Mexico Strong quality and brand that is recognized in the market 20 High%Grade%% Sale%to%KM% High Grade Crushing System Sale to KM
  • 15. 15 Stable Operating Environment in Mexico COBRE DEL MAYO 15 Mexico is an economic leader in Latin America and is the worlds 11th largest economy by GDP 2013E and 2014E real GDP growth of 3.4% per year High degree of political stability OECD/WTO country and member of 12 free trade agreements, including NAFTA Mexican Peso has long history of one of the ten most traded global currencies Mexico is recognized as a mining friendly jurisdiction Largest producer of silver globally (17% of global production) Largest producer of zinc in Latin America (2011 production of 626kt) 3rd largest producer of copper in Latin America (2011 production of 414kt) As a result of mining-supportive governmental policies, stability, OECD tax regime and abundance of resources, Mexico has attracted extensive investment from international mining companies Over 200 mining companies operate in Mexico, of which 60 have producing assets; 53 of those 60 belong to subsidiaries of foreign companies ~40% of mine production and ~70% of investments in exploration are undertaken by foreign investors Sources: IMF, Brook Hunt. 26
  • 16. 16 Sonora is Among the Most Prolific Mining Areas in Mexico COBRE DEL MAYO 16 Sonora is one of Mexicos safest states and the only U.S. border state that has not been significantly affected by recent violence associated with the war on drugs Sonora represents Mexicos most important state in terms of mining production Largest copper producing state in Mexico Sources: Ministry of Public Safety and Security, Mexican Mining Statistics 2011, Metals Economic Group. (1) Based on the methodology of the Ministry of Public Safety and Security 2011 Total Mining Production in Mexico Very High / High Medium Low Risk Ratings1 Sonora 2011 Copper Production in Mexico Crime Index (Crimes per 1,000 people) Sonora 27% Zacatecas 25% Chihuahua 12% Coahuila 9% Others 27% Sonora 67% Zacatecas 14% San Luis Potosi 8% Others 11% 48 17 16 13 10 6 4 2 1 Chihuahua Baja California Baja California Sur Quintana Roo Aguas- calientes Sonora Chiapas Colima Campeche National Average = 9 27
  • 17. 17 Pristine Track Record of Safety, Environmental and Labor Relations COBRE DEL MAYO 17 Safety, Environmental compliance and Labor relations are key areas of focus of CDM Since current management took control of the operation, Piedras Verdes has had a solid safety track record The amount paid by CDM for Riesgo de Trabajo (worker risk) as classified by IMSS is in the lowest quota, demonstrating the improvements of safety standards at CDM Framework and policies and procedures to mitigate operational risk and ensure regulatory and environmental requirements compliance Employee training programs support the effective execution of these policies and procedures which are consistently reviewed CDM has obtained all necessary permits for the construction and operation of the mine Future permits for further construction and operation such as leach pad expansion would be required; to date, such permits have been issued in the normal course of business Piedras Verdes complies with all applicable environmental standards that are among the worlds most advanced Labor relations: Large pool of nearby qualified labor Approx. 70% of the workforce lives in Navojoa with the remaining 30% living in Alamos Approx. 40% of the ~310 line employees are represented by the Confederaci坦n de Trabajadores de Mexico (CTM) which is one of Mexicos largest unions characterized by constructive and open approach towards labor relations (unlike SNTMMSSRM) CDM and Piedras Verdes have historically held a positive relationship with CTM No work stoppages in the history of the Piedras Verdes Mine Certified as Industria Limpia (Clean Industry) by PROFEPA (enforcement arm of SEMARNAT; Mexican environmental protection agency) and Empresa Socialmente Responsible (Socially Responsible Company) by Centro Mexicano para la Filantrop鱈a 28
  • 18. IV. Industry and Commodity Overview
  • 19. 19 Incentive Price Drives the Value of Copper COBRE DEL MAYO 19 The incentive price required to justify investments in the expansion of existing mines and the construction of new ones is estimated by Goldman Sachs at US$3.23/lb Although short term copper prices are unpredictable, copper must ultimately trade above US$3.23/lb for global mine copper supply to be maintained Source: Goldman Sachs Research estimates.
  • 20. 20 Evolution of Copper Estimates Overtime The market has consistently underestimated copper prices when forecasting long term Copper Price (US$ / lb) -- 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00 4.50 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2010 2009 2008 Actual 10 LT 09 LT 08 LT 07 LT 06 LT 05 LT04 LT03 LT02 LT 01 LT2000 LT 11 LT 2011 2012 2013 LT Long Term Price (as forecast during Q4 of year indicated)(1) Actual Copper Price Broker Consensus (as forecast during Q4 of year indicated) 12 LT Source: Bloomberg, Wall Street Broker Estimates. COBRE DEL MAYO 20 32
  • 22. 22 Conclusion Proven Management Team COBRE DEL MAYO Strong Copper Fundamentals Established and Stable Producer Low Financial Risk and Robust Cash Flow Generation Favorable Mining Jurisdiction COBRE DEL MAYO 22 Successful Completion of Turnaround and Ramp-Up 46