Western Copper & Gold - Developing a Premier Copper-Gold Mine


00:00:09 As the introductions that start up my name is Paul West-Sells. I'm the president CEO of Western Copper and Gold. Western Copper and Gold is that a very simple company we have one asset which is the very large casino copper gold project which is located up in the Yukon. Right pause right here show you a picture that shows a picture of the site. What you're looking at there is our exploration camp. What sort of right in the in the program there is the actual deposit.

00:00:41 I will be making forward-looking statements. I encourage you to review this before you make any investment decision. Start off with, with our ownership structure then cash those sort of things. We ended last year with about $7 million in cash we've burned through a bit of that we're probably sitting around $6 million cash in the bank right now. In terms of what we want to do over the next year that's more than ample for what we need to do our share price is been sitting around a buck 50 we hit a high of about $2 we pulled back to we're about a dollar 40 right now.

00:01:21 I would say it's a good opportunity to buy into the name. We've got about a hundred million shares outstanding. There are a few options we have no warrants. Where the shares are eight percent is with Management and Board vote six percent of that is with our executive chairman Dale Corman. A group of high net worth individuals there's about a dozen names there have the bulk of our shares. These are really people that have followed our story for a long time. They're personal friends of our Chairman Dale's or myself.

00:01:57 We have fairly constant contact with this group. Okay, let's talk about the project this is the number one ranked copper project according to Goldman Sachs. We're up in the Yukon I'm going to talk a bit more about this if you look at what's been happening in the. Yukon over the past twelve months it's been an absolute frenzy of investment from the majors over the past twelve months. This is a project then for those of you that were listening to the previous presentation.

00:02:32 He was talking about the importance of looking at NPV after-tax NPV this is a project with the 22 percent IRR in a two billion net present value after-tax at today's commodity prices with the full feasibility study. This is absolutely key why we represent very, very good value. There's a map there that's disappeared. Key think here let's talk about size nine million ounces of gold four point five billion pounds of copper in the reserve another nine million ounces of gold five point four billion pounds of copper the inferred resource.

00:03:14 How does that compare? Let's look at this first from the copper perspective because when you look at that amount of copper, gold. Want half of the value in the deposit is copper a half the value of the deposit is gold. When you look at it from a copper perspective just the copper in the deposit is about the size of the Rosemont project which was bought a few years ago by Hudbay for 550 million. If you look at it in terms of copper equivalent were double those sizes.

00:03:42 when you look at this from a gold perspective. With just the gold in the deposit we're about the size of the detour Gold Line started up a few years ago. If you look at us in terms of gold equivalent we're actually larger than Nover Gold's Donlin Gold project. This is a significant size copper gold project. You know one takeaway that I hope to leave you guys with is that. These sized deposits these large you know double-digit million ounces of gold deposits large corporate deposits are very, very few far between we feel very honored to have one in a great jurisdiction in the Yukon.

00:04:23 The talk a little bit about the copper and gold markets here. First of all I'm going to talk about copper. You know I'm sure you guys have heard lots of buck gold companies talking about gold there's lots of gold deposits out there. In terms of copper deposits, deposits with sizable amount of copper they're actually fairly rare. When you look at the copper market look at this graph and this is a fairly common graph in the copper industry.

00:04:52 The green line on the top represents the demand, demand is straightforward grows about one to two percent per year fairly consistent copper's of big commodity in terms of the supply demand. Then you look at the supply, the supply as you can see is consistently dropping. You have to constantly be building more mines to supply that supply demand deficit. If you look at what's predicted by two thousand ten years time 2027. It's predicted that those it's going to be a five million on copper deficit.

00:05:24 We talked about the size of the casino project the copper gold project I have. Even project of that magnitude it would take 65 mines the size of casino to make up that supply deficit that since it's been happening in the next ten years. That graph is actually it's a Wood Mackenzie graph there is completely independent in terms of their analysis. I mean new mines need to come online to provide additional copper edge that's really where those mines going to come from.

00:05:55 On the gold side of the equation it's fairly simple there's just hasn't been a number of significant deposits discovered in the gold space. That shows the amount of gold found throughout the sector you can see that it's just been dropping year after, year after, after year. When we're sitting here with a deposit that has close to 18 million ounces of gold we feel fairly confident that this is something that's going to be attractive to a number of investors. This shows our share price over the past year really what this shows is why people buy junior mining companies when they're interested in investing in gold base metals.

00:06:44 If you go back to beginning of 2016 we were sitting about 30 cents. What happened at the beginning of the year is that the price of gold went up by $200 an ounce we essentially doubled. Then you go to about a year ago summer of 2016 the summer 2016. The first major mining company Gold Corp makes an investment in the Yukon wise cabin act for $500 million. we see our share price move on the back of that. Then you go to around October of last year that's where you see real significant move of our share price that's on the back of copper.

00:07:23 When copper went from $2 has been at $2 for years finally went up to 250 then up to 276 we saw our share price go up significantly that's really. Where during that time you also saw a significant investment from a number of other major gold companies like Nikkoego, Barrack, Newmont in the Yukon we've seen our share price go up by almost four times in the past year really on the price of copper the price of gold going up investment in Yukon.

00:07:56 I tell people look if you believe in copper you believe in gold you want good leverage to that we're a good name to hold. We still have more room to grow if you look at our value if you look at the enterprise value of the company. Per pound of copper or per pound of copper equivalents in the ground you can see as this shows that we're still fairly undervalued as compared to our peers. On the gold space you see that even more the gold space in terms of enterprise value per ounce of gold equivalent the ground.

00:08:30 We still have a significant way to go before we're at the full valuation of the share price. Okay, I don't know what that slide had talk a little bit about the company this shows the management board. We're missing a couple pictures but we've got our Chairman Dale Corman he's been in the mining industry his whole life. His big win was with western silver in 2006 he sold that company to Glamis Gold for 1.6 billion.

00:09:07 We spun out of that and sort of continued on from there. I've been in the Industry my whole life I worked for a number of majors before joining Western ten years ago a camp. He's sort of one of the key guys worked for Bechtel Engineering he's built large copper gold projects such as this one. When we're talking about the mine and the design of the mine this is really cams mine. Last we've got Julian who's been with us for 10 years as well everybody that entire senior management team has been with the company for 10 years.

00:09:42 Really we're a fairly simple company what we love to do is create value by Devi risking assets. We acquired it in 2006 required it from Rossbeeds, Lumina Resources. We took the project finished off the drilling. We did two pre feasibility studies then a full bankable feasibility study. Then we brought it into permitting we're about halfway through permitting at this point in time. It's very, very simple straightforward de-risking the asset moving it forward.

00:10:16 One of the things we're very proud of is, is how we've worked in the Yukon in our outreach in the Yukon. We've worked very, very close with the local communities. We're very, very happy that we've got agreements with all the key First Nations in the area. You know I've been talking for a while about the how good the government of the Yukon is to us I mean their help sponsoring us being here. The nice thing is that when a year ago they put their money where their mouth is they put together a $200 million infrastructure package.

00:10:46 For them for infrastructure in the Yukon one hundred $30 million of that infrastructure directly benefits Western Copper and Gold casino project. People ask is a mining friendly absolutely. Fortunately we're missing our cross-section here. Really what this is to show is that there's sort of two parts to the deposit if anyone got print out you can see it. The surface of the deposit is depleted copper and Rich in gold that's wound off first goes into a heap leach that's the 157 million times at point three gram per ton gold.

00:11:29 Beneath that is the, the main part of the deposit 965 million tons at 0.5 percent copper equivalent. Importantly over the first four years the grade is quite a bit higher that's the 172 million times at point seven percent copper equivalent which is quite a good grade. As I said from the onset the thing that really separates this project from the pact is the economics. This is at 12, 50 gold two, 50 copper we ran these numbers about three weeks ago two point one billion net present value. 21 point seven percent IRR after-tax today's prices.

00:12:13 I mean this is an incredibly economic project for a project of this scale at today's commodity prices. There's some very well we're not going to talk about the reasons why because that slides disappeared. One of the key reasons why that is this project has one of the best strip ratios in the business at point 621. Strip ratio is one of those boring metrics that mining engineers look at the key thing is, is that compared to a typical for free copper deposit having that lowest trip ratio drops my operating cost by what 25 percent.

00:12:49 Yeah, That shows the stripped ratio so that early high-grade low stripped ratio those are the two key things that really drive the good economics of the project. Capital cost you know big projects take a bit big capital the capital cost is two-and-a-half billion. That sounds like a lot of money because it is a lot of money. I want to talk a little bit about what that actually means. If you look at the capital intensity so that's US dollars per ton of copper equivalent produced per year we're right in with the pack.

00:13:23 If you it's tough to read if you look at all those projects those are 85 projects that are is potentially come online in the next ten years. You find that half of them actually have capital cost greater than what we have a casino. Last two slides I can leave you with is this one then, the next one. Don't like what I'm saying this is Goldman Sachs they took 85 copper projects from owned by the majors to own in junior mining companies such as ourselves put them together. What copper price do these need to go forward?

00:14:00 We were number one on that list. When the new copper mines start to get built it's going to be us point one. Point two is really what's been happening in the Yukon when people talk about the majors moving into the Yukon and majors making investment. The Yukon, they're not talking about any part of the Yukon. They're talking about our neighborhood where that's mentioned of orange in the middle everything to the west and green. That's Gold Corp acquisition of Camanak.

00:14:29 If you look at all the stuff in yellows to the east that's the Agnico Eagle. You look at the brown it's Newmont on, on these are claims touching our claims that district is where you're seeing the investment. We'll continue to do that going forward. To finish you know this is a sizable copper gold deposit we're seeing significant investment right in our area from the majors we've got great leverage to copper and gold. You know I the consensus is there's a looming copper deficit coming and we've got a clear path to creating value. Thank you very much.