building a new gold mine in california’s mother · pdf filebuilding a new gold mine in...

MAKING HISTORY . . . AGAINMAKING HISTORY . . . AGAIN

Building a New Gold Mine Building a New Gold Mine in California’s Mother Lode

May 2012

TSX-V:SGMOTCQX:SGMNF

Disclaimer

The following presentation may include certain “forward‐looking statements” within the meaning of applicable Canadian Securities Laws and the United States Private the meaning of applicable Canadian Securities Laws and the United States Private Litigation Reform Act of 1995. All statements, other than statements of historical fact, included in the presentation , including, without limitation, statements regarding potential mineralization and reserves, exploration results, and future plans and objectives of the Company are forward‐looking statements. Words such as “expect”, “ anticipate”, “estimate”, “may”, “will”, “should”, “intend”, “believe” and other similar expressions are forward‐looking statements. Forward‐looking statements are not guarantees of future events and are subject to risks uncertainties statements are not guarantees of future events and are subject to risks uncertainties assumptions and other factors. Actual results and future events could differ materially from those anticipated in such forward‐looking statements. There an be no assurance that such forward‐looking statements will prove to be accurate.

TSXTSX--V:SGM OTCQX:SGMNFV:SGM OTCQX:SGMNF

Why Sutter Gold?

One of the few precious metals juniors that will transition to gold production in 2012

Fast‐tracking the first phase of the high‐grade Lincoln Mine Project in Amador County, California – the first commercial gold mine in the Mother Lode in more than 50 years

Development philosophy that is consistent with historic small‐scale mines in the California Mother Lode, but adapted to current environmental standards and community requirements

Most major permitting in place for the Lincoln‐Comet and Keystone resources

New exploration program is targeting extension of known gold zones that could supplement current mining resource base and extend mine lifesupplement current mining resource base and extend mine life

Longer term, exploration potential exists at depth and in additional gold zones on adjacent property owned or leased by Sutter


Experienced Management Team

Leanne Baker President & Chief Executive Officer

Bob Hutmacher Chief Financial Officer

Matt Collins Chief Operating Officer ‐ QP

David Cochrane VP Environmental Health & Safety

Steve Zahony VP Exploration and Geology ‐ QP

Art Campo Chief Mine Geologist

Amanda Miller Controller

Edward McGoldrick General Manager


SUTTER AT a Glance

OTCQX TSX‐V

Sutter 5 Year Stock Price

52 wk high $0.52 $0.51

52 wk low $0.11 $0.11

Avg daily volume (2012) 45,300 50,000g y ( ) 3

Capital Structure (March 31, 2012)

Cash Position $3.8 million

RMB Gold Facility Draws $14.1 million

Shares Outstanding 117.5 million

Options 5.8 millionChart courtesy of Michael Fowler analyst for Loewon, Ondaatje, McCutcheon


Fully Diluted 123.6 milliony y , j ,

Investment Highlights

Opportunity: Fast‐track the first phase of the Lincoln Mine Project while gold price fundamentals

remain strongremain strong

Share price starting to reflect our initial exploration success and recent progress on permitting and development

Upside potential from current exploration drill program with built‐in capacity to Upside potential from current exploration drill program, with built in capacity to expand mining and milling rates

Ingredients for Success: Mining‐friendly Amador County, excellent infrastructure

Construction underway on new mill building, underground work begins in June 2012

Management team incorporates strong cadre of narrow‐vein mine experience and permitting expertise in California

Strong financial backing of 49% shareholder, with initial tranche of project financing through US$20M Prepaid Gold Facility


Lincoln mine projectadjacent to historic hwy. 49

Sutter controls a significant portion of the “California Mother Lode” vein system


Lincoln mine Projectexcellent infrastructure

Located between the towns of Sutter Creek (the historic Lincoln Mine) and Creek (the historic Lincoln Mine) and Amador City (the historic Keystone Mine)

Accessible by Highways 49 and 104

45 miles southeast of Sacramento in Amador County

Power, communication, and transportation infrastructure established

LOCATED IN THE PROLIFIC CALIFORNIA

MOTHER LODE GOLD BELT


Lincoln mine project HISTORY

•John Sutter explored for timber in mid 1840’s and briefly for gold in 1848 along the banks of what is now Sutter Creek1848

•First gold discovery came in June 1851 by the Amador Quartz Mining Company. Leland Stanford gained control of the mine in the late 1850’s, and renamed it the Lincoln

1851

•From the 1850’s to 1950’s, gold production from the eight historic mines on SGM’s current holdings exceeded 3.375 million ounces1851‐1958

•First modern exploration effort occurred from 1983‐1990. Stringbean Alley decline and other underground workings were developed in 1989‐901983‐90

•Project permitted for 1,000 tpd operation in 1998‐991998‐99

•Preliminary Economic Assessment for 150 tpd day operation 2011


y 5 p y pBoard of Directors approved Lincoln Mine Project development 2011

Mineral INVENTORYNI 43-101 compliant resource

Tons Uncut GradeOz/ton Contained OuncesO /to

Indicated:

Lincoln‐Comet 511,700 0.37 188,481

Keystone 161,900 0.21 34,563

Total Indicated 673,600 0.33 223,044

Total Inferred 2,377,900 0.19 458,914

Total Indicated and Inferred contained ounces 681,958

Source: NI 43-101 Technical Report, February 2008, Payne

The project benefits from the good metallurgy of the Mother Lode


including historic district gold recoveries of +95%

Lincoln mine project pea

NI 43‐101 Preliminary Economic Assessment (PEA):d l h f h l d Focused only on the upper portion of the Lincoln‐Comet deposit

Utilizing existing mine infrastructure to minimize development costs and timing

Base Case IRR of 20.5% at $1,100/ounce gold

Sutter Gold Mining’s Plan: Use contract mining to reduce CAPEXg

Begin small (high grade) with built‐in capacity to expand

Target lower op‐costs despite contracting

RMB Gold Facility to provide $13.4 million toward CAPEXy p $ 3 4

Increase IRR to 70% at $1,700/ounce gold

Underground development will provide additional traditional exploration


Lincoln mine project parameters

High‐Grade Scenario Five‐Year Plan

Indicated / Inferred Resource 210 300 t materialIndicated / Inferred Resource 210,300 t material0.573 opt (19.6 gpt)

Current Mining Plan 244,800 t material0.46 opt (15.8 gpt)

INSERT PHOTOS0.46 opt (15.8 gpt)

Cutoff Grade 0.22 opt (7.5 gpt)

Mine Operating Rate 150 tpd (7 days / week)

ll d ( d / k)

PHOTOS HERE

Mill Operating Rate 210 tpd (5 days / week)

Annual Gold Production 23,000 ounces

Gold Processing 70% from Gravity Circuit30% from Concentrate

Mining Cost / T $206.74

Milling Cost / T $42.10


g

Cash Cost /Ounce $704 before royalties

current geologic Block model & workingsGrade Shell & Design at o.22 opt Au cut-off

• Colors Identify Gold Veins• Existing Workings in Brown

Existing PortalExisting Workings in Brown

• Current Mine Design Strings (Drifts/Tunnels) Blue Lines• Modeling and Design in Surpac™

TSXTSX--V:SGM OTCQX:SGMNFV:SGM OTCQX:SGMNFTSXTSX--V:SGM OTCQX:SGMNFV:SGM OTCQX:SGMNFView Looking North at -25° Dip

Capital requirements

Capital Requirements – Lincoln Mine Project

Item Estimated Cost USD$ 000’s

Mine Equipment 4,213q p

Mine Development 2,680

Process Plant 4,120

Waste Management 2 052Waste Management 2,052

Infrastructure 1,691

Engineering 463

Owners Cost 4,716

TOTAL $19,934


Expenditures to Mar 31, 2012 $2,800

rmbAH prepaid gold facility

US$20 Million Prepaid Gold Facility l h d h l ld ( ) In July 2011, the Company signed an agreement with RMB Australia Holdings (RMBAH)

to implement a $20 million prepaid gold facility

The Company used the initial $6.6 million of the proceeds to repay a previous credit line supplied by RMBAH. The remaining $13.4 million is being drawn down to fund the line supplied by RMBAH. The remaining $13.4 million is being drawn down to fund the Lincoln Mine Project and other corporate expenses

As of March 31, 2012, the Company has drawn down $14.1 million of the facility

Repayment of the facility will work like this:p y y- When gold production begins, half of the monthly production will be sold at market

price, and half will be applied toward repayment of the facility

- Of the gold to be applied toward repayment, the Company will receive $942 per ounce

- As we draw down the $20 million facility, we are effectively receiving $377 per ounce for the 53,027 ounces included in the gold facility

- Our effective realized price for the gold in the prepaid facility is $1,319 per ounce


Potential cash flow model

PEA B % Ab % Ab Sutter Gold Cash Flow Sensitivity PEA Base

Case10% Above Base Case

20% Above Base Case Mining

Plan2

Pretax Cash Flow($000's)1 12,217 17,135 26,243 49,096

Internal Rate of Return, (% p.a.) 20.5% 38.9% 50.2% 69.6%

Gold Selling Price ($/oz) 1 100 1 210 1 320 1 473Gold Selling Price ($/oz) 1,100 1,210 1,320 1,4731 Mineral resources that are not mineral reserves do not have demonstrated economic viability2 Potential average realization price based on current gold price

Base case includes all estimates and assumptions used in the PEA, including owner‐operated fleet and a gold price of $1,100 per ounce. The Sutter Plan includes contract mining, lower capital costs, market price for half the gold sold (at $1,700 in this example) and $942 for the gold applied toward repayment of the prepaid gold facility


repayment of the prepaid gold facility.

Path to production

Site Preparation Completedin Winter 2011‐12

Mill Building Permit Received March 2012 g


Critical path to gold in Q4 2012

Underground mine development to begin in June 2012f d d b d d Contract for underground mining to be awarded

MSHA approval of ventilation plan and emergency contingency plan is required

Surface Fill Unit construction during summer 2012 Surface Fill Unit construction during summer 2012 Section 404 (Wetlands Permit) required from Army Corps of Engineers

Mitigation plan is proceeding, with cooperation from the Corps

SFU to be ready to receive tailings once mill is operating SFU to be ready to receive tailings once mill is operating

Mill and other facilities to be operational in Q4 2012 Mix of used and new equipment, some refurbishing requiredMix of used and new equipment, some refurbishing required

New gravity circuit

Concentrate production to require third‐party processing


2012 Priorities & beyond

Preparing for production: Completing mine development and building construction

Obtain remaining construction financing

Targeting production this year

Planning for resource expansion ‐ Exploration

Completed Completed Initial

Ground Breaking Production Expand p

43‐101 PEA Initial Financing

Breaking 2011 in 2012

pResource


Pipeline of ProjectsCalifornia mother lode

Exploration potential on other projects adjacent to the Lincoln project Exploration potential on other projects adjacent to the Lincoln project

2012 focus is to advance exploration within existing land holdings::

KeystoneLincolnEureka Bunker Hill


2012 exploration program

Goal of the Program:d ld h l

INSERT PHOTO HERE Expand gold resources at the Lincoln

Mine Project

Drill the under‐explored area between the Lincoln and Comet ore zonesLincoln and Comet ore zones

Better define the initial stage of underground mining


Exploration Program Highlights

Phase 1 As of April 10Phase 2

Includes 17 diamond drill holes in the southern

Lincoln segment, including much of the

pResults have been

announced for the first seven holes. Best results to date include 4 317 opt

Will include 13 drill holes in the northern Comet

segment, where drilling in the past was inclined in

the wrong direction All gunder-explored area

between the Lincoln and Comet ore zones. The

program will drill i t l 5 900 f t

to date include 4.317 opt in 1.8-foot interval and

1.791 opt in 2.1-foot interval – all bonanza

grades

the wrong direction. All but one of Sutter’s drill

holes in 2012 will be inclined to the northeast, to capture the southwest-approximately 5,900 feet grades to capture the southwest

dipping structures


EXPLORATION TARGETING


EXPLORATION Targeting


Phase 1 of exploration program9 of 17 holes completed

Lincoln and Southern portion of Comet resource (shown in red) at a 0.22 opt Au cut‐off.

Nddh‐206

ddh 203ddh‐201 & 202

ddh‐199& 200

ddh‐196& 197

ddh‐203 & 204

& 202& 200ddh‐198

LINCOLN ZONECOMET ZONE

Phase I Drilling (Southern) Long Section: looking N30°E showing projection of

0 200’


Phase I Drilling (Southern) Long Section: looking N30 E showing projection of completed drill holes (green lines) and planned drill holes (yellow lines).

Investment Opportunity

Potential for a three‐pronged increase in per‐ounce gold multiple: As we receive the rest of our permits and complete construction of the first As we receive the rest of our permits and complete construction of the first

commercial gold mine in the California Mother Lode in more than 50 years As we complete the ramp‐up to full production in 2013 As we add to our near‐term gold resource with current drilling program g g p g

Longer‐term upside potential to grow shareholder value: Exploration on adjacent land holdings

D l ti Deep exploration once we areunderground

Increasing leverage to gold price as we repay prepaid gold facility

Eventual ability to pay a dividend Other opportunities using a similar

model of smaller, narrow‐vein,high‐grade gold deposits


high grade gold deposits

SUTTER GOLD MININGSUTTER GOLD MININGSUTTER GOLD MININGSUTTER GOLD MINING

Contact Information:Contact Information:165 South Union, Suite 565, Lakewood, Colorado

Robert Hutmacher, CFOTel: 303‐238‐1438

www.suttergoldmining.com TSXV:SGM OTCQX: SGMNF

building a new gold mine in california’s mother · pdf filebuilding a new gold mine in...

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