Willow Creek Mine - Project Update - Minerals North

Willow Creek Mine - Project Update
April 2006

CAUTIONARY STATEMENT
The TSX has not reviewed and does not accept responsibility for the adequacy or
accuracy of this information.
CAUTIONARY STATEMENT
This information contains certain “forward looking statements”, as defined in the United
States Private Securities Litigation Reform Act of 1995, that involve a number of risks and
uncertainties including but not limited to economic, competitive, governmental and
geological factors effecting the Company’s operations, markets, products and prices and
other risk factors. There can be no assurances that such statements will prove to be
accurate and actual results and future events could differ materially from those anticipated
in such statements. Factors that could cause future results to differ materially from those
anticipated in these forward-looking statements include the Company’s dependence on
the steel industry, volatility in coal prices, accidents and other risks associated with
mining operations, the Company’s need for and availability of additional financing, the
restrictions imposed under the Company’s existing debt arrangements and its debt service
requirements and the other risk factors discussed in greater detail in the Company’s
various filings with the Securities and Exchange Commission and Canadian securities
regulators, including the Company’s Form 20-F dated September 30, 2005.
2

Agenda
Company Overview
Coal Products
Overview of Operations
Financial Outputs
Growth Opportunities
3

Company Overview
4

Achievements
Successfully developed the first “greenfield” metallurgical coal
mine in Canada in the last 20 years
– Mining commenced July 2004
– First product shipment in September 2004 – PCI Coal
Completed construction of infrastructure (coal washing plant) in
November 2005 to increase potential capacity to 180,000 t/month
– Completed first full winter of operation
– Plant now operating on a stable and effective basis
Delivered 1 Million tonnes of PCI coal to customers
Deliveries of hard coking coal commencing in May, 2006
– Coking coal sales have been secured in Japan and Europe
5

Strategy
Achieve long term supply arrangements for coking coal and PCI to
key Pine Valley customers
Increase output from the Willow Creek deposit to full plant capacity
of 2.2 million tonnes per year
Maintain low cost position
Explore nearby mineral property interests
6

Location and Infrastructure
7

Technical Use of PCI and Coking Coal
PCI
– Replaces coke in the furnace
– Assists in maintaining furnace stability
– Reduces silicon content of pig iron
– Improves consistency of the quality of hot metal
– All major steel mills have PCI facilities or are seeking to increase
(optimize) injection rates
Coking Coal
– Used to make coke which holds the iron mix in the blast furnace and
provides carbon to the metal
8

Crude Steel Making Process
64% of total steel production is based on the smelting of iron ore in
blast furnaces (1)
Coal requirements per tonne
of hot metal
– 350 – 400 kg coke made
from 525 – 600 kg coking
coal
– 100 – 200 kg of PCI coal
PCI is a direct replacement for coke in the blast furnace
(1) World Coal Institute
9

Diversified Portfolio of Customers
Building business with top steel producers
– Customers in Japan, Korea and Europe
Shipping samples to 21 different customers for testing
Customers want to support independent producers
Current Customers
Top Active Prospects
Company Rank 04 Prod Region Company Rank 04 Prod Region
Arcelor 1 46.9 Europe US Steel 7 20.8 U.S.
Nippon Steel 3 32.4 Japan ThyssenKrupp 9 17.6 Europe
JFE 4 31.6 Japan Gerdau 13 14.6 Brazil
POSCO 5 30.2 Korea China Steel 19 10.9 China
Corus Group 8 19.0 Europe Stelco 52 4.9 Canada
Riva Acciao (Ilva) 11 16.7 Europe USIMINAS 53 4.7 Brazil
Sumitomo 14 13.0 Japan Dofasco 57 4.4 Canada
Kobe Steel 27 7.7 Japan Tata Iron & Steel 58 4.2 India
Note: Ranked by 2004 production, millions of metric tonnes
Source: Company reports; the International Iron and Steel Institute (www.worldsteel.org)
10

Overview of Operations
11

Willow Creek Plant Site
27 June 2004 9 July 2004
12

Overview of Mine Development
April 2005
April 2005
May 2005
July 2005
13

Plant Site
October 2005
14

Mining Operation
Gray shading
designates
mining areas
Distance Above / (Below) Reference Point (Meters)
200
100
0
(100)
(200)
Actual exploration
drill holes shown as
black lines (roughly
perpendicular to
seams)
Coal Seams:
Coking PCI
1 5
2 6
3 7
4
Cross Section of Willow Creek Central Pits
15

Mine Site
16

Environmental Management
Monitoring
– Air quality
– Water quality (surface and sub-surface)
Managing
– Wildlife interaction
– ML/ARD
– Traffic and access
Reporting
– Weekly/monthly to Govt
– Annual reclamation
17

24 April 06
18

Production Forecast and Product Mix
Coking coal commercial production
in 2006
– Coking coal specifications are
being well received by customers
1.6
1.4
Willow Creek Coking
Willow Creek PCI
Production forecast based on the
following:
– No production outside Willow
Creek
Flexibility to increase percentage of
coking coal produced.
Millions of Tonnes
1.2
1
0.8
0.6
0.4
0.2
0
JFY 2004 JFY 2005 JFY 2006
Note: Fiscal year ends March 31
Source: Technical Report, 28 Jul 2005, pg. 25-17 and recent press
releases
19

Key Willow Creek Statistics
LV PCI saleable reserve:
7.1 mm tonnes
Coking coal saleable reserve: 7.7 mm tonnes
Mine production capacity:
2.2 mm tonnes/yr
LOM Stripping ratio: 5.0:1
Mine Life:
8 years approx
Processing feed rate:
450 tph
Total plant capital costs:
$33 million
Area to be disturbed: 528 Ha
20

Financial Impacts
21

Employment - Direct
Mine Site
Vancouver
Total
PVM employees
Hourly
28
-
28
Salaried
14
5
19
Total
42
5
47
Mining contractor
Hourly
105
-
105
Salaried
5
-
5
Total
110
-
110
Grand total
152
5
157
22

Employment - Indirect
Chetwynd region
– Suppliers of equipment parts and office goods
– Suppliers of services (water, rubbish, tires)
– Accommodation and meals
Other BC
– CN Rail crews
– Neptune and Ridley port crews
– Consultants - environmental, mining (PG, Van)
– Legal advice – contracts, purchases (Vanc)
– Financial – auditors, bankers (Vanc, Tor)
– Fuel supply (PG)
23

Financial Impacts - 2006
Wages paid – Tercon and PVM $13 million
Charges paid to CN / Ports $31.8 million
Paid to mining contractor $42 million
Goods/services from northern BC $14.5 million
Goods/services from remainder of BC $1.2 million
Taxes/licences
$3 million
24

Growth Opportunities
25

Growth Opportunities
Processing infrastructure in place to support additional tonneage
– Current facility has a processing feed rate of 450 tph
– Additional capacity could be added with minimal Cap. Ex.
Drilling program complete at Pine Pass for structure and brand split
– Data gathering commenced for permitting process
– Production decision targeted for mid 2006
– Additional quality drilling ongoing
Other prospective properties for exploration depending on market
fundamentals
26

Other Exploration Properties
Exploration completed by Gulf Canada and Shell Canada in the 80’s identified presence of
coal seams at other sites (not NI 43-101 compliant)
– Fisher Creek
– Crassier Creek
– Falling Creek
– Willow Creek South and West
Following completion of Pine Pass the
Company will turn its attention to
exploration work on other properties if
market conditions warrant
Other licenses are in close proximity to
Willow Creek Project
27

Thank You