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Business Combination of Tahoe and Rio Alto – Tahoe Exploration Inc

Tahoe Exploration Inc · Feb 5, 2015 · 38 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. Business Combination of Tahoe and Rio Alto – Tahoe Exploration Inc – slide 1
    Business Combination of Tahoe and Rio Alto Two Teams, One Common Vision A Leading Platform For Value Enhancing Growth February 2015
  2. Business Combination of Tahoe and Rio Alto – Tahoe Exploration Inc – slide 2
    Transaction Highlights The Leading Platform for Value Enhancing Growth A leading precious metals producer anchored by three high quality assets Escobal: Top 3 primary silver mine in the world by annual production, high grade with strong…
  3. Business Combination of Tahoe and Rio Alto – Tahoe Exploration Inc – slide 3
    Transaction Summary Business combination of Tahoe and Rio Alto via a Plan of Arrangement Proposed Total transaction value of approximately US1.1 billion1 Transaction Pro forma ownership: 65% Tahoe / 35% Rio Alto1 0.227 of a Tahoe…
  4. Business Combination of Tahoe and Rio Alto – Tahoe Exploration Inc – slide 4
    Experienced Management & Board Executive Team Board of Directors Kevin McArthur Executive Chairman Kevin McArthur Executive Chairman Current Vice Chair and CEO of Tahoe Alex Black CEO and Director (nominee) Alex Black CEO and…
  5. Business Combination of Tahoe and Rio Alto – Tahoe Exploration Inc – slide 5
    Capitalization As at February 6, 2015 Units Tahoe Rio Alto (at offer) Pro Forma2 TSX Share Price C 17.64 4.00 17.64 Basic Shares Outstanding1 million 147.6 333.8 223.4 FDITM Shares Outstanding1 million 149.2 359.5 230.8 FDITM…
  6. Business Combination of Tahoe and Rio Alto – Tahoe Exploration Inc – slide 6
    Strong Track Record of Execution & Delivery A History of Superior Shareholder Value Creation Tahoe (+200% Return Since IPO) Rio Alto (+300% Return Since July 2010)1 Acquisition of Escobal and IPO Acquisition of the La Arena project…
  7. Business Combination of Tahoe and Rio Alto – Tahoe Exploration Inc – slide 7
    Benefits to Tahoe Shareholders Strengthened platform for continued free cash flow generation Establishes a significant operating presence in Peru, the 2nd largest global silver producer and the largest gold producer in Latin America…
  8. Business Combination of Tahoe and Rio Alto – Tahoe Exploration Inc – slide 8
    Benefits to Rio Alto Shareholders Escobal is a world-class mine with high grade, low cost, long life production Immediate upfront premium, while maintaining exposure to future value creation through meaningful equity participation…
  9. Business Combination of Tahoe and Rio Alto – Tahoe Exploration Inc – slide 9
    Creating a Leading Precious Metals Company Best In Class Portfolio of Producing and Development Assets Production World-class, high-grade Escobal silver mine High-quality, low-risk La Arena gold mine 2015 expected production of…
  10. Business Combination of Tahoe and Rio Alto – Tahoe Exploration Inc – slide 10
    Steady Growth at Strong Operating Margins 2015E 2017E Silver Production Profile 2015E 2017E Operating Margin Profile Silver Production (Mozs) Operating Margins (%) Tahoe Margins (USM) Rio Alto Margins (USM) 25.0 90% 700 Silver…
  11. Business Combination of Tahoe and Rio Alto – Tahoe Exploration Inc – slide 11
    Combined Operating Footprint La Arena Oxides La Arena Sulphides 2015E Prod. 210-220kozs gold Reserves Au 0.6Mozs 0.31g/t Cash Costs US570-US600/oz Reserves Cu 0.6Blbs 0.43% Reserves Au 1.3Mozs 0.39g/t M&I Res. Au 2.1Moz…
  12. Business Combination of Tahoe and Rio Alto – Tahoe Exploration Inc – slide 12
    Targeted Growth Plans La Arena Oxide Near-Term Continued mineral resource and mineral reserve replacement to extend oxide mine life Exploration Escobal Operational Production rate expansion to 4,500 tpd by H2 2015 Enhancements…
  13. Business Combination of Tahoe and Rio Alto – Tahoe Exploration Inc – slide 13
    Commitment to Our Communities & Stakeholders Local business development Sustainable community programs Partnerships to alleviate malnutrition Open consultation Environmental excellence Ethical conduct Training locals for mine…
  14. Business Combination of Tahoe and Rio Alto – Tahoe Exploration Inc – slide 14
    A Leading Financial Foundation Market Capitalization (USB) 9.7 6.8 3.9 3.7 3.6 3.1 1.8 0.9 1 Fresnillo Agnico Eagle Yamana Kinross Eldorado Pro Forma New Gold IAMGOLD Debt to Equity (%)2 67.7% 55.6% 52.3% 47.3%…
  15. Business Combination of Tahoe and Rio Alto – Tahoe Exploration Inc – slide 15
    Production Growth With Very Low Capital Risk 2015E - 2017E Average Consensus Gold Equivalent Production (kozs)1 2,477 1,879 1,694 1,652 878 837 736 632 Kinross Fresnillo Agnico Eagle Yamana IAMGOLD Eldorado New Gold Pro…
  16. Business Combination of Tahoe and Rio Alto – Tahoe Exploration Inc – slide 16
    Strong Margins and Free Cash Flow 2015E - 2017E Average Consensus Co-Product Operating Margins (US/oz) 699 675 672 Avg: 595 659 648 640 626 603 532 422 Tahoe Pro Forma Yamana Eldorado Fresnillo Rio Alto New Gold Agnico Eagle…
  17. Business Combination of Tahoe and Rio Alto – Tahoe Exploration Inc – slide 17
    Peer Leading Return on Equity ROE for 9-Month Period ended September 30, 2014 10.3% 10.0% 9.9% 4.2% 1.9% 1.7% 1.1% (1.7%) (3.0%) (5.3%) Rio Alto Pro Forma Tahoe Fresnillo Agnico Eagle Eldorado Kinross New Gold…
  18. Business Combination of Tahoe and Rio Alto – Tahoe Exploration Inc – slide 18
    Dividend Yield Supported by Strong FCF Dividend Yield (%) 2.6% 1.7% 1.6% 1.4% 1.0% 0.4% 0.3% Goldcorp Pro Forma Barrick Yamana Agnico Eagle Newmont Eldorado Current monthly dividend of US0.02 to be maintained…
  19. Business Combination of Tahoe and Rio Alto – Tahoe Exploration Inc – slide 19
    The Bottom Line Superior Financial Returns Strong Financial Returns The New Tahoe Balanced growth A leading high quality platform to generate Expected 10% growth in gold equivalent production superior shareholder value and 18% growth…
  20. Business Combination of Tahoe and Rio Alto – Tahoe Exploration Inc – slide 20
    Tahoe Contact: Rio Alto Contact: Ira Gostin Alejandra Gomez investorstahoeresourcesinc.com alejandragrioaltomining.com 775.448.5807 877.628.1401 A New Leader in Precious Metals 23
  21. Business Combination of Tahoe and Rio Alto – Tahoe Exploration Inc – slide 21
    Appendix: Guatemala Overview Guatemala Facts: Resource-rich country Strong local community support Competitive mining law All-in tax and royalty rate of 40% compares favourably with other leading mining jurisdictions A New…
  22. Business Combination of Tahoe and Rio Alto – Tahoe Exploration Inc – slide 22
    Appendix: Escobal Location Located in southeast Guatemala, 40km east-southeast of Guatemala City Accessible via 70km of paved highway from Guatemala City to the town of San Rafael Las Flores Local population of 3,500 people…
  23. Business Combination of Tahoe and Rio Alto – Tahoe Exploration Inc – slide 23
    Appendix: World-Class Escobal Silver Mine High-Grade Silver Cornerstone Asset High-grade underground silver mine Commercial production declared in January 2014 Long mine life: +19 years LOM reserve grade of 347g/t silver One of…
  24. Business Combination of Tahoe and Rio Alto – Tahoe Exploration Inc – slide 24
    Appendix: Escobal Operating Results Average Mill Throughput (tpd) Head Grade (g/t Ag) 5,000 800 657 Mill Throughput (tpd) 3,710 585 Head Grade (g/t Ag) 4,000 3,474 551 3,419 600 547 3,041 3,000 400 2,000 200…
  25. Business Combination of Tahoe and Rio Alto – Tahoe Exploration Inc – slide 25
    Appendix: Escobal Above 3,500 tpd in 2014 Source: Company disclosure A New Leader in Precious Metals 28
  26. Business Combination of Tahoe and Rio Alto – Tahoe Exploration Inc – slide 26
    Appendix: Escobal Reserves and Resources Quantity Grades Contained Silver Gold Lead Zinc Silver Gold Lead Zinc (Mt) (g/t) (g/t) (%) (%) (Mozs) (kozs) (kt) (kt) Proven & Probable Reserves Proven Reserves 6.0 457 0.37 0.86% 1.51%…
  27. Business Combination of Tahoe and Rio Alto – Tahoe Exploration Inc – slide 27
    Appendix: Peru Overview Peru Facts: 2 Silver producer in the world 1 Gold producer in Latin America Established mining culture Source: GFMS A New Leader in Precious Metals 30
  28. Business Combination of Tahoe and Rio Alto – Tahoe Exploration Inc – slide 28
    Appendix: La Arena Location Located in a gold mining district in north central Peru 3.5 hour drive from Trujillo, on mostly paved road Land package approx 27,000 ha Altitude 3,400m above sea level 18km east of Barricks Lagunas…
  29. Business Combination of Tahoe and Rio Alto – Tahoe Exploration Inc – slide 29
    Appendix: La Arena Operation Established Operation Low Risk Operation Steady and consistent operations with strong exploration upside 2014 production of 222kozs Au History of continued reserve replacement with over 156% oxide…
  30. Business Combination of Tahoe and Rio Alto – Tahoe Exploration Inc – slide 30
    Appendix: Shahuindo Project High Quality Project With Real Synergies Scalable project with top tier economics 10,000 tpd operation with low strip ratio of 1.91:1 Initial production expected to be 100kozs per year with a 10 year mine…
  31. Business Combination of Tahoe and Rio Alto – Tahoe Exploration Inc – slide 31
    Appendix: La Arena Operating Results Tonnes Processed (Mt) Head Grade (g/t Au) 5.0 4.4 0.80 3.9 Tonnes Processed (Mt) 0.60 Head Grade (g/t Au) 4.0 3.5 3.4 0.60 0.52 0.54 0.47 3.0 0.40 2.0 0.20 1.0 0.0 0.00 Q1 2014…
  32. Business Combination of Tahoe and Rio Alto – Tahoe Exploration Inc – slide 32
    Appendix: La Arena Reserves and Resources Quantity Grades Contained Gold Silver Copper Gold Copper (Mt) (g/t) (g/t) (%) (kozs) (Mlbs) Proven & Probable Reserves Oxides - Proven Reserves 10.2 0.27 0.3 0.14% 89 -- Oxides - Probable…
  33. Business Combination of Tahoe and Rio Alto – Tahoe Exploration Inc – slide 33
    Appendix: Shahuindo - Infrastructure Excellent location and accessibility Source: Company disclosure A New Leader in Precious Metals 36
  34. Business Combination of Tahoe and Rio Alto – Tahoe Exploration Inc – slide 34
    Appendix: Shahuindo - Mineralization Continuous ore body outcropping on surface Section Easily accessible E1050 mineralization One single Section ultimate pit centered on Low strip ratio of a 200 m thick 1.91: 1 (Feasibility…
  35. Business Combination of Tahoe and Rio Alto – Tahoe Exploration Inc – slide 35
    Appendix: Shahuindo Reserves and Resources Quantity Grades Contained Gold Silver Gold Silver (Mt) (g/t) (g/t) (kozs) (kozs) Proven & Probable Reserves Oxides - Proven Reserves 15.0 0.90 10.4 434 5,008 Oxides - Probable Reserves…
  36. Business Combination of Tahoe and Rio Alto – Tahoe Exploration Inc – slide 36
    Appendix: Tahoe Endnotes 1. References in this presentation to the Escobal Feasibility Study 2014 are to the technical report entitled NI 43-101 Feasibility, Study Southeastern Guatemala, dated November 5, 2014 and prepared by M3. 2.…
  37. Business Combination of Tahoe and Rio Alto – Tahoe Exploration Inc – slide 37
    Appendix: Tahoe Endnotes Page 2 3. Additional GAAP measures: Tahoe has disclosed additional GAAP measures which include mine operating earnings, earnings (loss) from operations and cash generated by operating activities before changes in…
  38. Business Combination of Tahoe and Rio Alto – Tahoe Exploration Inc – slide 38
    Appendix: Rio Alto Endnotes Cash costs per ounce and AISC figures are non-IFRS measures. Rio Alto has adopted the World Gold Council (WGC) guidance for presentation of all- in sustaining and all-in total costs. Under WGC guidance, AISC…

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