Century Global Commodities Corporation · PDAC, March 2016 Century Global Commodities Corporation...

17
PDAC, March 2016 Century Global Commodities Corporation Corporate Presentation By Sandy Chim, CEO

Transcript of Century Global Commodities Corporation · PDAC, March 2016 Century Global Commodities Corporation...

Page 1: Century Global Commodities Corporation · PDAC, March 2016 Century Global Commodities Corporation Corporate Presentation ... Iron Ore Market Dynamics in the Coming Cycle ... Century

PDAC, March 2016

Century Global

Commodities Corporation

Corporate Presentation

By Sandy Chim, CEO

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Forward Looking Statement

Except for statements of historical fact, this presentation contains certain “forward-looking information”

within the meaning of applicable securities law. Forward-looking information is frequently characterized by

words such as “plan”, “project”; “intend”, “believe”, “anticipate”, “estimate” and other similar words, or

statements that certain events or conditions “may” or “will” occur. Forward-looking statements are based

on the opinions and estimates of management at the date the statements are made, and are subject to a

variety of risks and uncertainties and other factors that could cause actual events or results to differ

materially from those anticipated in the forward-looking statements. Factors that could cause actual

results to differ materially from those in forward-looking statements include market prices for metals, the

conclusions of detailed feasibility and technical analyses, lower than expected grades and quantities of

mineralization and resources, mining rates and recovery rates and the lack of availability of necessary

capital, which may not be available to the Corporation on terms acceptable to it or at all, changes in and

the effect of government policies with respect to mineral exploration and exploitation, the ability to obtain

required permits, delays in exploration and development projects and the possibility of adverse

developments in the financial markets generally, potential environmental issues and liabilities associated

with exploration and development and mining activities. The Corporation is also subject to the specific

risks inherent in the mining business as well as general economic and business conditions. The

Corporation undertakes no obligation to update forward-looking information if circumstances or

management’s estimates should change except as required by law. The reader is cautioned not to place

undue reliance on forward-looking statements. More detailed information about potential factors that

could affect financial results is included in the documents that may be filed from time to time with the

Canadian securities regulatory authorities by the Corporation.

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Cash & Capital Structure

Financial highlights (Dec 31, 2015) C$

Cash and bank deposits $25.2M

Receivables (accounts & tax) $11.5M

Total corporate working capital . . . . . . . . . Available for M&As $36.5M

Exploration and evaluation assets $20.5M

Investment in a joint venture (with a net cash position of ~$5.7M) $60.8M

NAV $119.1M

Capital structure

Shares outstanding 98,794,571

Fully diluted Options/Grants: 13,120,500

Warrants: 1,000,000

112,915,071

Market capitalization

(@ closing share price of

$0.30, March 3, 2016)

~$30M

Share holdings

Founding shareholders 35.5%

Management 16.6%

WISCO (23.5%)

Minmetals (4.7%)

28.2%

Altius Minerals Corp.

Other public shareholders

5.1%

14.6%

Total 100.0%

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Century - Well Funded

Century and JV cash gives flexibility to:

pursue M&A in depressed market

move ahead with mining database and non-metal initiatives

maintain iron ore strategy and prepare for market recovery

C$M

Cash and receivables 36.5

JV Net Cash 5.7

Market Cap ~30.0

Available for strategic plan 36.5

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Iron Assets Positioned for

Market Recovery

Joyce Lake DSO (BFS):

high-grade low capex /

opex- 1st Priority

Full Moon taconite (PEA):

high-volume long-term supply

Value Acquisition and Creation in An

Undervalued Markets

Commodity cycle upside Lower cost curve Self-funding potential Attraction to strategic

partners Tracking value and market

trends of mining companies.

M&As: Down-cycle

value creation

Mining

Database:Tracking

value for

partners &

users

100%

Non-Metals

Business Unit

Organic

growth :Projects are

self-funded to

FS and EIS

Strong Chinese SOE Strategic Partnerships for a

Dual Ferrous and Non-ferrous Strategy

Minmetals Exploration &

Development

(Luxembourg)

Limited S.à.r.l

WISCOInternational

Resources

Development

& Investment

Ltd (PRC)

4.7%23.5%

60% 100%

CenturyGlobal

Commodities

Corporation

(TSX: CNT)

Duncan Lake

Project

Sunny Lake

Project

Attikamagen

Project

100% 65%

JV Net Cash $5.7M

Non-ferrous

Ferrous

Strong balance sheet

(~$40M) for strategic M&As

100%

40%

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Non-Ferrous and Ferrous Strategies

Non-Ferrous

M&A - focus on producing facilities, esp. gold

Mining Database - launching now with gold

Non-metal business targeting major EMs' demand to

generate cash flow while the metals market recovers

Ferrous (Quebec, Newfoundland and Labrador )

Maintaining assets for market recovery including:

▫ Joyce Lake DSO Feasibility complete

▫ Blackbird DSO Resource estimate

▫ Full Moon Taconite PEA complete

▫ Duncan Lake Magnetite PEA complete

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Operating Cost

Opex FOB, Sept-Îles C$/t $58.25

Opex FOB, Sept-Îles US$/t $46.61

Capital Cost

Capex C$M 259.6

Operating Parameters

Life of Mine years 7+

Tonnage tpa 2.5M

Processing Dry

Product mix lump 35%

fines 65%

Joyce Lake DSO – Feasibility March 2015

Reserves Tonnage Fe % SiO2 %

Reserves (+ 52% Fe) 17.72 M 59.71 11.62

Oblique View of Joyce Lake Mineralization

Environmental Impact Statement completed (waiting to submit)

Post feasibility – internal optimization complete

Project positioned to proceed quickly when market recovers as first project

development followed by others, including the Full Moon Taconite Project

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0

50

100

150

200

250

US$

/t

Iron Ore Spot Price (TSI (CFR China) Fe62% spot since ~2009)

Iron Ore: Where We Are, How We Got Here

7 - 8 years

Dec 11, 2015:

US$37.0 (lowest in 15)

End 2015:

US$40.2

Iron Ore Price TrendGlobal financial

crisis

China’s US$600B stimulus Real estate boom in China Start of major expansions

Over supply from major expansions

Market bottom?

recovery?

Mar 3, 2016:

US$51.6~30% YTD

OR

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Where we are headedIron Ore Market Dynamics in the Coming Cycle

China demand factor: Steel demand peaked two years ago More sustainable mid-high rate GDP growth (5-7%) driven by consumption

(requiring fewer commodities than in the last cycle) and structural reforms No massive stimulus anymore. Short-term limited and specific government

target stimulus expected to maintain target (~7% in 2016) growth only Recent surge in iron ore price due to seasonal re-stocking and supply

disruption at Port Hedland due to tropical cyclone Longer-term outlook remains positive on the strength of such massive

regional initiative as One Belt One Road, started with AIIB last year

Global supply factor: Oversupply due to major expansions and cost reductions by top producers Major expansions to complete by 2018 (Vale sees 70mtpa capacity exit in

2016) Cost curve is flattening as more low-cost supply enters the market

Iron ore price expected to remain low in the short to medium term

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Century Strategically Positioned

$5.7M of patient cash in Iron Ore JV

All three projects are at BFS or PEA

Carrying cost for projects is minimal

Prepared to wait two-three years or longer if necessary

Once market returns Joyce Lake DSO (EIS completed) can be brought to production in 18 to 30 months

Creating value for shareholders continues with M&A, Database and other Non-metal initiatives

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0

5000

10000

15000

20000

25000

30000China’s GDP in US$B (Past and Projected)

In 2016 China grows by $740B to

$12T

Non-Ferrous Strategy: Why diversify?

Source: China NBS data, IMF, Century (constant 2015 constant exchange rate in forecast years from 2016 forward)

Low labour cost driving cheap exports

Growth by fixed asset investment

Consumption-ledService-oriented

China joins WTO and starts housing reform

Consumption-led, service-oriented economy:

Mid-high income per capita Demand for quality consumer products More investable assets demanding quality

investment products and services

Super Cycle

Eco

no

mic

Re

form

beg

ins

US$B

China38%

USA16%

EU10%

Other36%

Country / Region's Share of World's 2015 GDP Growth

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Two-Pronged Non-Ferrous Strategy

M&A:

Focus on value proposition, precious and base metal producing opportunities

Maintaining relationships with sources of capital

The Century Mining Database:

Originally built for Century use for acquisitions

Designed with proprietary algorithms for searches for both professionals and retail investors

Considering a link to strategic partners with substantial user-base community

Fully translated with focus on Chinese clientele for mining investment purposes

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For professional and retail investors, to:

rank and compare data or metrics of choice

access results by search questions, by markets and mining metrics

directly link to 800+ company reviews and access 3,500 projects

Expl. and mining companies,

TSX/TSXV, LSE/AIM, ASX, HKEx + others

Starting with gold includes:

>1500 companies, market cap >US$100B

100+ countries, >5 billion oz. gold

Bilingual - English and Chinese

Feature highlights:

asset location maps

regional analysis and data downloading

benchmarking and custom tracking tools

The Century Mining Database

Supported by A Growing List of Strategic Partners: ICBC; TIME; MC

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China’s Pent-Up Liquidity –To be released when RMB internationalizes

High Net Worth Individual Holdings Overseas High Net Worth Individuals Planning Overseas Investments

19%

33%37%

57%

0%

10%

20%

30%

40%

50%

60%

HNWI Ultra-HNWI

2011 2015 2011 201550% 40%

40%45%

0%

20%

40%

60%

80%

100%

HNWI Ultra-HNWI

Increase

Unchanged

Decrease

Increase

Unchanged

Decrease

Investment Sector Growth 2008-2015 (CAGR %)China Total Investable Assets 2015 - US$ 17T

7.73

0.67

2.53

2.53

2.00

1.20

Cash and Deposits

OverseasBank WM Products

Capital Markets

Life Insurance14%

18%

19%

25%

30%

38%

CASH AND DEPOSITS

L IFE INSURANCE

INVESTMENT PROPERTY

CAPITAL MARKET PRODUCTS

BANK WM PRODUCTS

OVERSEAS INVESTMENT

*Sources: Bain & CompanyCentury Global Commodities Corporation (TSX:CNT)

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Middle Class Demand for Quality FoodCentury Food, a Start-up Venture

Distributing western-sourced high quality food products to the Chinese

market

Enormous potential - rising demand from 115M middle class adults

Century Food is run by a separate, lean team of professionals based in

Hong Kong, with a proven track record in the sector

Building on knowledge and distribution network in the China market

Minimal incremental overhead and minimal Capex required

To generate cash flow while the metals market recovers providing a strong

position to take advantage of market cyclicality

To Date: Century has successfully established a distribution network to

supermarkets, hotel and restaurant chains, and international airlines in

Hong Kong, from an exclusive distribution agreement with a large Australian

egg producer (China-Australia FTA signed and sealed) and is now moving

into other high quality food products

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SummaryCentury is also well funded with $36.5M working capital in the

Company and $5.7M cash in its JV to pursue its strategic plans

Century has been restructured as an international company for:

Ferrous strategy (waiting for market recovery)

Non Ferrous strategy (M&A and Mining Database)

Century Food venture in China

Key activities going forward:

Launching and growing the mining database

Rigorously identifying mining M&A opportunities

Growing our food business in China

Continuing to position our massive iron ore deposits and advanced projects for market recovery

Potential multiple spin-outs to crystalize value in due course

Market cap of ~C$30M

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Thank You!Please visit our booth for a mining database demo and to check out your favourite mining companies!