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Contractor Presenta,on    May  16,  2013    


Rosemont Team Team with +550 Years Cumulative Experience in Mining

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About Rosemont

Rosemont Copper…   Ø  Is  located  in  Arizona,  30  miles  southeast     of  Tucson  in  the  Rosemont/Helve?a   mining  district   Ø  Will  be  about  10%  of  U.S.  copper   produc?on     Ø  Will  use  50%  less  water  than  tradi?onal   mines   Ø  Will  create  economic  benefits     4


Why Augusta? Large

M&I Resource  of  7.5B  lbs  Cu  and  annual  produc?on  of  243M  lbs   Cu(1)  

Low cost

Low cash  cost  (net)  at  $1.02  per  lb  of  Cu(2)  

High quality

30-­‐32% clean  copper  concentrates  

Low risk

Excellent infrastructure  in  a  secure  jurisdic?on  

Robust economics

AYer-­‐tax NPV(3)  of  $2.5B  with  low  CAPEX  intensity  

Near term

Commence construc?on  in  2013  

Strategic asset • Compelling investment 1.  Average Annual  Life  of  Mine     2.  Using  60/40  Pricing  which  assumes  $14.19/lb/Mo,  and  Silver  Wheaton  Agreement  precious  metals  prices  of  $3.90/oz  Ag  and  $450/oz  Au   3.  Using  a  8%  discount  and  copper  price  of  $3.50  per  pound  copper   NOTE:  Rosemont  is  subject  to  a  80/20  Joint  Venture  Partnership  with  LGI  &  KORES,  all  metrics  are  currently  reported  on  a  100%  equity  basis  

TSX/NYSE AMEX:AZC

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Rosemont is low cost $4.00    

($/lb Cu); cash costs, net of by-product credits

$3.50      $3.00      $2.50      $2.00      $1.50    

Rosemont  $1.00      $0.50      $-­‐         1997  

1999 Median  Cost  

2001

2003 9th  Decile  

2005 Marginal  Cost  

2007

2009

2011

LME Cash  Price  

Sources: 1.  LME  prices  are  annual  averages  with  2012  YTD  based  on  current  copper  price  as  at  June  30,  2012    2.  Goldman  Sachs  report  June  6,  2011  using  data  from   www.minecost.com;  Brook  Hunt;  GS&PA  Research  Es?mates    3.  Rosemont  2012  Feasibility  Study  Update   6


Rosemont Production When in  produc?on,  Rosemont  will  be  among  the  top  five  largest  copper  mines  in  the  US                              2012  US  Copper  Produc?on  By  Mine  (Mlbs)  

632

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1.  Based on  Rosemont  2012  Feasibility  Study  Update.   Sources:  Company  Disclosure  and  Rosemont  2012  Feasibility  Study  Update.  

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41 Mineral   Park  

100

Miami

134

Robinson

157

Sierrita

175

Safford

Bagdad

Ray Complex  

Bingham Canyon  

Morenci

197

Mission

235

Silver Bell  

Rosemont LOM  Avg.:  243M  lbs  (1)  


Rosemont development model

Community Community    

Economic          Benefits  

The   ROSEMONT   Team  

Environment  

Ø  Ini?ate community  rela?ons  efforts   early   Ø  Provide  community  support   Ø  Two-­‐way  communica?on  with  the   community   Ø  Establish  local,  county  and  business   support    

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Business Association Support Associa?ons represen?ng  over  2000  businesses  and  their   employees  or  members:   Ø  ACT

Alliance  of  Construc?on  Trades  

Ø  ABA

Arizona  Builders’ Alliance  

Ø  ACA

Arizona  Contractors  Associa?on  

Ø  AMIGOS

Arizona  Mining  Industry  Gets  Our  Support  

Ø  ARP

Arizona  Rock  Products  

Ø  SACA

Southern  Arizona  Contractors  Associa?on  

Ø  SAHBA

Southern  Arizona  Home  Builders  Associa?on  

Ø  SAEDG

Southern  Arizona  Economic  Development  Group  

Ø  TUCA

Tucson  U?lity  Contractors  Associa?on  

Ø  PALF

Pima  Area  Labor  Federa?on  

Ø  USW

United  Steelworkers  of  America  

Ø  SVEDF

Sierra  Vista  Economic  Development  Founda?on   9


Local, County and Business Support Ø  Ø  Ø  Ø  Ø  Ø  Ø  Ø  Ø  Ø  Ø  Ø  Ø  Ø 

City of  Marana   Benson/San  Pedro  Chamber  of  Commerce   Benson  City  Council   Marana  Chamber  of  Commerce   Northern  Pima  County  Chamber  of  Commerce   Tucson  Hispanic  Chamber  of  Commerce   Tucson  Metropolitan  Chamber  of  Commerce   Metropolitan  Pima  Alliance   Nogales  Santa  Cruz  County  Chamber  of  Commerce   Willcox  Chamber  of  Commerce  &  Agriculture   Thatcher  City  Council   Sierra  Vista  Area  Chamber  of  Commerce   12,000  Families  signed  to  support   120  Southern  Arizona  business  leaders   10


Rosemont development model

Major Economic  Engine  

Community  

Economic          Benefits  

The   ROSEMONT   Team  

Environment  

Ø  Creates almost  4,200  jobs  annually     in  the  USA     Ø  Provides  $1.2  billion  in  new   investment     Ø  Contributes  $3  billion  of  Federal   income  tax   Ø  Total  Economic  Impact  of  nearly   $30  billion  to  the  USA  over  the  life   of  mine  

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Rosemont development model SeOng NEW  Environmental  Standards  

Community  

Economic          Benefits  

The   ROSEMONT   Team  

Environment  

Ø  Filtered Tailing  Technology  reduces  land   requirement  &  water  usage   Ø  Reducing  air  emissions  with  the  highest   emission  standards  in  mine  equipment   Ø  Air  quality  protec?on  with  high  efficiency   dust  collec?on   Ø  Permanent  land  conserva?on   Ø  Innova?ve  reclama?on  &  re-­‐vegeta?on   prac?ces  to  reduce  visual  impacts   Ø  Reduc?on  of  light  pollu?on  through  LED   outdoor  technology  

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Rosemont CAPEX CAPEX Breakdown  ($M)   General  Site  /  Ancillary  Facili?es  

$60  

Mine

$252

Concentrator &  Tailings  

$471  

Power /  Water  Supply  

$122  

EPCM/Commissioning/ Spare  Parts  

$104  

Owner’s Costs  

$163  

Con?ngency

$51

Sunk Costs  (Equipment  &  EPCM)  

($113)

Total Construc,on  &  Commissioning  

$1,110  

Mine Pre-­‐development    CAPEX   Total  CAPEX  

Con,ngency

General Site/   Ancillary  Facili,es  

Owner’s Costs   EPCM/   Commissioning/   Spare  Parts  

Mine

Power/Water Supply   Concentrator  &  Tailings  

$116 $1,226  

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Rosemont is construction ready $90M already  spent  on  equipment  

Most major  equipment  procured  –  fixed   price  contracts  set  in  2008/2009  

Grinding mills  and  drives  paid  for  and  delivered   14


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Updated Mineral Reserves ROSEMONT SULFIDE  MINERAL  RESERVE  2012  UPDATE   Sulfides  >=  4.90  $/ton  NSR  Cutoff   Classifica,on   Ktons  

NSR $/t  

TCu %  

Mo %  

Ag oz/t  

Proven

308,075

20.29

0.46

0.015

0.12

Probable

359,130

18.67

0.42

0.014

0.12

Total Reserves  

667,205

19.42

0.44

0.015

0.12

Waste +  Oxide  

1,243,455

S/R

1.9

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Preferred Alternative – Barrel Only

Diagram taken  from  Forest  Service  DraY  EIS  Execu?ve  Summary   17


Barrel Only Year 1

5700

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Barrel Only Year 10

5350 5700   5400  

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Barrel Only Final

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Site Layout Tailings Filtra,on     Mine  Shop  Area    

Primary   Crusher   Concentrator     Area    

N 22


Grinding Building

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Flotation Building

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Tailings Filter Building

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Shiftable Conveyor with Spreader

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Building Sizes §  Total of 16 buildings to be constructed. §  Top 7 in size listed below. Descrip,on

Area (square  feet)  

Coarse Ore  Storage  Building  

113,000

Filter Building  

77,000

Mill Building    

41,000

Flota?on Building  

36,000

Truck Shop  

28,500

Administra?on Building  

16,000

Concentrate Loadout  

15,000

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Construction Material Quantities Ø  Civil Cut  –  6  million  cu  yds   Ø  Fill  –  5  million  cu  yds   Ø  Concrete   Ø  70,000  cu  yds   Ø 

Ø  Structural Steel   Ø  8,000  tons   Ø  Equipment   Ø  Number  of  pieces  to  be  installed  –  1,800  

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Permits in  hand   Cer?ficate  of  Environmental  Compa?bility  (CEC)   Construc?on  Storm  Water  General  Permit   Agricultural  Land  Clearing  Permit   Air  Ac?vity  Permit   Groundwater  Withdrawal  Permit   Type  2.02  and  3.03  General  Aquifer  Protec?on  Permits   Arizona  Mined  Land  Reclama?on  Permits   Hazardous  Waste  Iden?fica?on  Number   Aquifer  Protec?on  Permit   Air  Quality  Control  Permit  

                                      

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Rosemont Forest Service Timeline 2009

2007

§  Feasibility Study  updated   §  Approval  for  Reclama?on   Plan  and  Economic  Impact   Study  received  from  State   §  USFS  delays  DEIS  issuance,   provides  updated  ?meline   (ROD  Q4  2010)  

§  Mine Plan  of   Opera?ons  filed   §  Ini?al  Bankable   Feasibility  Study   completed    

  2007  

2008

2009

2010

2011

§  USFS delivers  prelim.  DEIS   to  state  and  local  agencies   §  No?ce  of  Availability  for     DEIS  issued  by  USFS     §  Cer?ficate  of   Environmental   Compa?bility  issued  

2011

2012

450+ technical  studies,  XX  man  hours  of  work     2008  

§  NEPA process  launched,   EIS  process  ini?ated   §  Completed  extended   scoping  comment  period   §  USFS  updates  ?meline   (ROD  July  2010)   §  Permit  for  mine  water   supply  approved  

2010

§  USFS delayed  DEIS   release  for  addi?onal   study  and  modeling,   provides  updated   ?meline  (ROD  Q4  2011)   §  DEIS  presented  to  the   USFS  for  internal  review  

2013

§  USFS expects  ROD   Q3  2013  

2013

2012

§  Public comment  period  for   DEIS  concluded   §  Aquifer  Protec?on  Permit     §  Internal  review  draY  of  FEIS   delivered  to  the  FS  on  Sept.   2012   §  USFS  delays  the  DEIS  release   for  addi?onal  study  

*5 years,  450+  technical  studies   31


Remaining permits  to  acquire     Ø 

404 Permit   (ACOE*)  

Ø 

Public comment   analysis  concluded   Monitoring  and   mi?ga?on  plans  in   development  

*ACOE: U.S.  Army  Corps  of  Engineers   32


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EPCM Organization Chart Rosemont Copper  

M3 Engineering  

Project Engineering   Manager   •  •  •  •  •  •  •  • 

Process Environmental   Systems   Disciplines   Specialists   Consultants   Engineering   Contracts  

Project Procurement   Manager   Purchasing   Expedi?ng   Supplier   Quality   Assurance   •  Traffic   •  •  •  • 

Rosemont Project   Manager  

Project Controls   Manager   •  •  •  •  • 

Planning Scheduling   Es?ma?ng   Cost  Control   Change   Management  &   Trending  

CDM Smith  

Construc?on Site   Manager  

Startup

•  Constructability •  Preopera?onal   •  Field  Engineering   Tes?ng   •  Field   •  Startup   Procurement  &   Assistance   Warehousing   •  Commissioning   •  Labor  Rela?ons   •  Construc?on   Contracts   •  QA/QC   •  Safety   •  Logis?cs   34


Rosemont Copper   Construc?on  Management  Services    

Darrell Himmesoete  


About CDM  Smith   •  •  •  •  •  •  •  • 

Founded in  1947   Mining  work  for  more  than  30  years   Employee  owned  /  operated   Over  5,000  staff  /     125+  offices  worldwide   Over  $1.2B  in  annual  revenues   Large  civil  /  infrastructure   Engineering  and  construc?on   Core  business  areas:     –  Water   –  Environmental   –  Transporta?on   –  Energy,  Oil  and  Gas   –  Mining  and  Minerals  

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Core Values    

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HSE Culture   •  •  •  • 

Zero Injuries  /  Incidents   Zero  Environmental  Releases   Zero  MSHA  Cita?ons   Zero  Environmental  Cita?ons  

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Ø 

All contractors on site are required to follow MSHA regulations, State regulations and Rosemont Copper Safety Standards

Ø 

Contractors will be required to have a safety program and a safety representative on site

Ø 

To have a culture that employees embrace and a workplace that enables all employees, vendors, and contractors, to return home safely, after completing their work with the time, tools and skills necessary to perform each task at hand.

“Core Value”! 40


Ø  All contractors  will  be  expected  to  auend  Rosemont   environmental  training   Ø  Rosemont  approval  and  SDS  for  all  products  brought  on  site   prior  to  delivery     Ø  To  meet  environmental  obliga8ons  by  managing  environmental   impacts  and  implemen8ng  controls  for  pollu8on  preven8on.  All   employees  will  be  accountable  for  maintaining  compliance  with   requirements  designed  to  protect  the  environment.   "

"“Core Value”!

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Ø 

 Communica?ons  Limited  Alloca?on   Ø  Internet   Ø  Phone  

Ø  Ø  Ø  Ø  Ø 

 Construc?on  water      Construc?on  power      Concrete      Fuel  to  be  available  at  site  (Dry  Contracts)      Owner  Controlled  Insurance  Plan  (OCIP)   42


Ø  Compe??ve bid   Ø  Based  on  Construc?on  Work  

Packages (CWP)   Ø  Contract  may  be  one  or  mul?ple   CWP’s  (single  discipline  or  mixed)   Ø  Engineering  is  scheduled  to  deliver   according  to  CWPs     43


Registra,on

E-­‐bid

Pre-­‐   Qualifica,on    

Filtering of   contractors   based  on   exper?se  

Qualifica,on

Qualifica?on form  sent  via   email  

Bid &   Evalua,on       Award    

Online contractor  registra?on  system.  The  E-­‐bid   system  will  be  enhanced,  you  will  receive  an  email   no?fica?on  to  update  your  profile.  

Filtering of  contractors  based  on  informa?on   contained  in  E-­‐Bid.  i.e.  registered  and  competent   contractors  receive  a  Qualifica?on  Form.  

Review

RFQ

Qualifica?on based  on  safety  sta?s?cs,  bonding   capacity,  previous  experience,  etc.  Poten?al   bidders  are  short  listed  based  on  Qualifica?ons.  

Bid Evalua,on  

Award

Invita?on to  Bid  is  sent  to   Qualified  bidders.     Contract  is  awarded  based  on   Technical  Bid  Analysis  (TBA)   and  Commercial  Bid  Analysis   (CBA).  


Key Evalua?on   Ø  Bid  must  conform  to  bid  package  structure  as   requested  in  the  RFQ   Ø  Safety  Record   Ø  Proposed  Team   Ø  Content  of  the  work  plan   Ø  Current  Work  Load   Ø  Prior  experience  in  the  work  requested   Ø  Price   Ø  Local  presence   45


Ø   

Ø  Ø  Ø  Ø  Ø 

Combina?on of  horizontal   and  ver?cal  packages     Design-­‐Build   Lump  Sum   Time  and  Materials   Unit  Price   Job  /  Service  Order  

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Ø  Ø  Ø  Ø  Ø  Ø  Ø  Ø  Ø  Ø  Ø  Ø  Ø  Ø     

Geotechnical Evalua?on   Surveying   Compressed  Gases   Sanita?on  and  Water   Waste  Management   Security   Janitorial   Office  Supplies  and  Equipment   HVAC  Maintenance   Catering   Laundry  /  Uniforms   Lodging   Employee  Training   Environmental  Monitoring   47


Construction Tab


Ø 

Ø  Ø  Ø  Ø  Ø 

ROD Re-­‐start  Engineering   Develop  RFQ’s   Bid  Packages   Mobilize   Construc?on  

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THANK YOU  

Rosemont Contractors Presentation May 2013  

Rosemont Copper Contractors presentation

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