for personal use only - vital metals limited · pdf filethe information that refers to mineral...
Post on 12-Mar-2018
214 Views
Preview:
TRANSCRIPT
TUNGSTEN IS VITAL
EGM 27 AUGUST 2015
For
per
sona
l use
onl
y
Disclaimer
Competent Person’s Statement The information that refers to Mineral Resources in this presentation was prepared and first disclosed under the JORC Code 2004. It has not been updated since to comply with the JORC Code 2012 on the basis that the
information has not materially changed since last reported. The information in this report that relates to Exploration Targets, Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Mr Mark
Strizek, a Competent Person who is a Member or The Australasian Institute of Mining and Metallurgy. Mr Strizek is a full time employee of the Company. Mr Strizek has sufficient experience that is relevant to the style of
mineralisation and type of deposit under consideration and to the activity being undertaking to qualify as a Competent Person as defined in the 2012 edition of the “Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves”. Mr Strizek consents to the inclusion in the announcement of the matters based on his information in the form and context in which it appears. The information in this presentation that relates to
Mineral Resources for the Watershed Deposit is based on information evaluated by Mr Simon Tear who is a Member of The Australasian Institute of Mining and Metallurgy (MAusIMM) and who has sufficient experience relevant
to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 edition of the “Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves”. Mr Tear is a Director of H&S Consultants Pty Ltd and he consents to the inclusion of the estimates in the report of the Mineral Resource in the form and context in
which they appear. This Ore Reserves statement has been compiled in accordance with the guidelines defined in the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code –
2012 Edition). The Ore Reserves have been compiled by Mr Steve Craig of Orelogy Group Pty Ltd, who is a Fellow of Australasian Institute of Mining and Metallurgy. Mr Craig has had sufficient experience in Ore Reserve
estimation relevant to the style of mineralisation and type of deposit under consideration to qualify as Competent Person as defined in the 2012 Edition of the “Australasian Code for Reporting of Mineral Resources and Ore
Reserves”. Mr Craig consents to the inclusion in the presentation of the matters based on his information in the form and context in which it appears.
Forward looking statements Certain written statements contained or incorporated by reference in this presentation, including information as to the future financial or operating performance of the Company and its projects, constitute forward-looking
statements. All statements, other than statements of historical fact, are forward-looking statements. The words “believe”, “expect”, “anticipate”, “contemplate”, “target”, “plan”, “intend”, “continue”, “budget”, “estimate”, “may”, “will”,
“schedule” and similar expressions identify forward-looking statements. Forward-looking statements include, among other things, statements regarding targets, estimates and assumptions in respect of tungsten, gold or other
metal production and prices, operating costs and results, capital expenditures, mineral reserves and mineral resources and anticipated grades and recovery rates. Forward-looking statements are necessarily based upon a
number of estimates and assumptions related to future business, economic, market, political, social and other conditions that, while considered reasonable by the Company, are inherently subject to significant uncertainties and
contingencies. Many known and unknown factors could cause actual events or results to differ materially from estimated or anticipated events or results reflected in such forward-looking statements. Such factors include, but are
not limited to: competition; mineral prices; ability to meet additional funding requirements; exploration, development and operating risks; uninsurable risks; uncertainties inherent in ore reserve and resource estimates;
dependence on third party smelting facilities; factors associated with foreign operations and related regulatory risks; environmental regulation and liability; currency risks; effects of inflation on results of operations; factors relating
to title to properties; native title and aboriginal heritage issues; dependence on key personnel; and share price volatility and also include unanticipated and unusual events, many of which are beyond the Company's ability to
control or predict. For further information, please see the Company's most recent annual financial statement, a copy of which can be obtained from the Company on request or at the Company's website: www.vitalmetals.com.au.
The Company disclaims any intent or obligation to update any forward-looking statements, whether as a result of new information, future events or results or otherwise. All forward-looking statements made in this presentation are
qualified by the foregoing cautionary statements. Investors are cautioned that forward-looking statements are not guarantees of future performance and, accordingly, not to put undue reliance on such statements.
Cautionary Statement The Definitive Feasibility Study (DFS) referred to in this presentation is based on a Proved and Probable Ore Reserve derived from a Measured and Indicated Mineral Resource, plus a small proportion of mining inventory, which
comprises material that is currently classified as Inferred Mineral Resource. There is a low level of geological confidence associated with Inferred Mineral Resources and there is no certainty that further exploration work will
result in the determination of Indicated Mineral Resources or that the production target itself will be realised. The Company advises that the Proved and Probable Ore Reserve provides 93% of the total tonnage and 93% of the
total WO3 metal underpinning the forecast production target and financial projections, and that the additional life of mine plan material comprises less than 7% of the total tonnage and WO3 metal. Furthermore, in the first five
years of production, 95% of the material planned to be processed is based on Proved and Probable Ore Reserves. As such, the dependence of the outcomes of the DFS and the guidance provided in this announcement on the
lower confidence Inferred Mineral Resource material contained in the life of mine plan is minimal. The Company confirms that all the material assumptions underpinning the production target, and the forecast financial information
derived from the production target continue to apply and have not materially changed.
For
per
sona
l use
onl
y
Watershed tungsten project is located in Queensland Australia a mining friendly country
Highly experienced management team with an average of over 20 years in the mining industry
Access to a highly skilled workforce
High metallurgical recovery delivering a high quality scheelite concentrate
JOGMEC (Japanese Government agency holding 30% project interest) running process to secure a strategic long-term Japanese partner in Watershed Tungsten Project
Significant structural supply / demand imbalance forecast to continue in medium to long term
Technology metal with limited substitution risk in key applications
Limited number of tungsten production ready sites outside of China
Development ready with Mining Lease and Environmental Approvals in place
Ongoing improvements to the development plan for the mine and processing plant
High exploration potential with drill ready prospects
Key Investment Highlights F
or p
erso
nal u
se o
nly
Company Overview
Capital Structure
ASX Code: VML
Share price (21 August 2015): A$0.034
Shares on Issue: 316M
Options on Issue: 80M
Debt: A$3M
Market Cap (undiluted): ~A$10M
Directors
David Macoboy: Non-Exec Chairman (Finance)
Mark Strizek: Managing Director (Geology)
Peter Cordin: Non-Exec Director (Engineering)
Andrew Simpson: Non-Exec Director (Marketing)
Management
Ian Hobson – Company Secretary
Jamie Williamson – Exploration Manager
Major Shareholders - fully diluted*
1 Year Chart
*Assumes following options are exercised:
• Macquarie Bank Limited 58.8M unlisted options
• Vital Directors and Management 20.7M unlisted options
For
per
sona
l use
onl
y
Tungsten – accept no substitutes
Tungsten (chemical symbol W) is a corrosion-resistant,
dense material with the highest melting point of any metal
and is sought for both its mechanical and refractory
properties:
Tungsten’s density is comparable to Uranium and
Gold
It is the 2nd hardest known substance in the form of
tungsten carbide
Virtually no substitution for many of its applications
Its most important use is in tungsten carbides
(hardmetals).
Tungsten does not occur in its pure metallic form in nature,
but only as a constituent of a wide range of minerals. Of
those, two are of economic importance as they can form
mineable deposits. Those two minerals are scheelite
(Watershed) and wolframite.
Vital will take advantage of scheelite’s UV fluorescence
and high density during exploration and the planned mining
and processing operations at Watershed
Mineral Scheelite Wolframite
Formula CaWO4 (Fe,Mn)WO4
WO3 content (wt.%) 80.5 76.6
Density (g/cm3) 6.1 7.5
Colour Colourless, white, pale yellow
Brown-black
Mohs hardness 4-5 4.5
UV Fluorescence Blue, yellow if Mo-bearing Non fluorescent
Tungsten is a metal that has outstanding properties,
very hard, very tough and heat-resistant
UV Fluorescence Density
For
per
sona
l use
onl
y
The following industries rely on technology metals (tungsten
carbides) to achieve high productivity and reliability in use.
Automotive Industry:
Tungsten carbide based tools used to manufacture automobile parts
Industrial Engineering:
Cutting tools used in all areas thanks to robustness, strength and wear resistance
Mining & Road Construction:
Strength and wear resistance make carbide tools the first choice in this industry
Aviation:
Hi-tech materials worked using tungsten tools
Super alloys
Energy Oil & Gas:
Needs high wear resistance tungsten carbide tools
Health:
Needs high wear resistance tungsten carbide tools
Agriculture:
wear parts
Defence Applications:
Armour piercing and armour plating
How tungsten is used
China’s consumption of tungsten carbide has yet to catch up
to usage rates in North America, Europe and Japan
For
per
sona
l use
onl
y
Tungsten pricing is based on the Metric Ton Unit (MTU),
which is equal to 1% of a metric tonne, or 10 kilograms
There is no terminal market for tungsten such as the LME
Reference is made to the London Metal Bulletin (LMB) which
publishes twice weekly the price for Chinese ammonium
paratungstate (APT), an intermediary product
This published price reflects concluded transactions of the
previous half week reported by producers, consumers, and
traders. The price quotation is presented as a range
between high and low prices
The LMB quotation is based on a relatively small percentage
of world production thought to be in the order of around 10%
Tungsten concentrates are refined into intermediate
products before being used in final applications
Tungsten metal consumers prefer to have long term
contracts with primary producers to ensure security of
supply
Tungsten market
Source: Tungsten Market Research
More tungsten concentrates will be required
to meet increasing tungsten demand
Recycling which currently accounts for around 34% of supply cannot meet tungsten demand due to losses including: Dissipation (wear loss, arc erosion, loss due to oxidation) Dilution (loss in general steel melts) Discard (difficult or uneconomic to collect)
For
per
sona
l use
onl
y
Primary supply of tungsten comes from the mining of
scheelite and wolframite with concentrates accounting for
around 66% of total tungsten demand with the balance
coming from scrap
China dominates the World supply of primary tungsten
production, accounting for 84% of mine production in 2013
China prohibits the export of tungsten concentrate
meaning that non-Chinese consumers must rely on non-
Chinese supply
Most non-Chinese tungsten mines are generally small
scale artisanal or low output semi mechanised operations
Measures are being taken to stop the supply of tungsten
that has been mined under conditions of armed conflict and
human rights abuses: Section 1502 of the Dodd–Frank Wall Street Reform and Consumer
Protection Act
EU legislation requiring European importers of metals such as tungsten to
certify there supply chain is conflict metal free
The recent closure of the Cantung mine will put further
pressure on the supply of tungsten concentrates
Tungsten supply World Mine production of tungsten concentrates,
by country, 2002 to 2013
Source: Tungsten Market Research
Source: ITIA
Artisanal mining
China does not allow the export of tungsten concentrates
For
per
sona
l use
onl
y
Chinese tungsten concentrate is used to feed domestic demand
which has grown to such a level that China has been a net importer
of tungsten concentrate since 2008
China’s focus is to move from being a supplier of raw materials into
value added finished products
This has been implemented via export quotas and tariffs. Last year
the WTO found against Chinese trade practices and this has resulted
in the replacement of export quotas with a new 6.5% resource tax
Chinese tungsten enterprises tend to be vertically integrated and
produce intermediate products with six companies accounting for the
majority of production
Chinese tungsten ores now require more beneficiation, are more
complex and have lower utilisation value
Rising costs and declining ore grades at current mines mean that
Chinese producers are struggling to maintain output
There is a growing application and enforcement of taxation, safety
and environmental protections
Chinese supply unable to meet its own needs
Average site cash costs for a typical Chinese operation
were estimated to be around US$165/mtu to produce a
65% WO3 concentrate in 2013 -
10,000
20,000
30,000
40,000
50,000
60,000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
RM
B
Ratio of export volume to domestic consumption
Now a net
importer
Chinese average yearly wages
Source: Tungsten Market Research, ITIA
For
per
sona
l use
onl
y
There is a strong link between tungsten
consumption and GDP with consumption having
grown by 4% between 2004 and 2013
Chinese tungsten consumption increased sharply
over this time as the country experienced rapid
economic development
U.S. consumption of tungsten has steadily
increased in line with increasing GDP
Japan is the highest user of tungsten on a per
capita basis being a large exporter of high value
tungsten tools
Chinese tungsten consumption is expected to
continue to grow as the Chinese economy moves
into a consumption based economy
Assuming it follows U.S. levels of consumption
China will require an additional 12,000 tonnes of
tungsten per annum
Indian consumption is expected to increase on
the back of increasing economic development
Tungsten demand linked to GDP
There is a close link between increasing tungsten
consumption and increasing GDP
Japanese consumption of tungsten on a per capita basis is high however most tungsten tends to be exported as carbide tools
Source: World Bank, ITIA, USGS, Tungsten Market Research
Tungsten use per Capita against GDP per Capita
Forecast Chinese
consumption
Indian consumption
starting to grow
For
per
sona
l use
onl
y
Tungsten demand case study: Automobiles
Automobile manufacture is not possible without the use of tungsten in
the form of tungsten carbide cutting tools
Increasing worldwide automobile production has lead to ever
increasing demand for tungsten in the form of carbide tools
Vehicle motorisation rates in China (93 vehicles / 1,000 inhabitants)
and India (20 vehicles /1,000 inhabitants) are low compared to rates
in the U.S. (790 vehicles /1,000 inhabitants)
Watch for Indian growth
production in 2014
Source: OICA
Asia
Oceania
produced
47 million
vehicles
in 2014
Chinese tungsten demand
2004 to 2012
For
per
sona
l use
onl
y
Tungsten demand: past and future
Automobile manufacture is not possible without the
use of tungsten in the form of tungsten carbide cutting
tools
Source: USGS, ITIA, Argus Media, Tungsten Market Research
World tungsten demand, by country, 2004 to 2013
North America Europe Russia Japan China
Tungsten Carbides 66% 67% 54% 76% 54%
Mill Products 20% 11% 3% 3% 11%
Steels/alloys 9% 11% 37% 20% 28%
Other 5% 11% 6% 1% 7%
Est Tonnes W content
14,400
17,600
1,700
5,800
49,200
World tungsten demand, by end use, 2013
World forecast tungsten market supply / demand, 2004 to 2018
APT price outlook
forecast
For
per
sona
l use
onl
y
Large, low-cost, long life project
Fully permitted with all Mining Leases, Environmental Authority
and Indigenous Land Use Agreements in place
Highly visible ore with simple geology, mining and metallurgy
49.3Mt @ 0.14% WO3 for 70,400 tonnes WO3*
High metallurgical recovery delivering a high quality scheelite
concentrate
10 year LOM* with estimated total production 24,900 tonnes
WO3
DFS has identified upside on Resource, costs and LOM*
Experienced management team with focus on development and
production
Local community and Queensland Government is supportive of
the Project
Japanese Government agency JOGMEC (30% project interest)
introducing strategic JV partner
Investment decision and commencement of site establishment
earthworks anticipated in 2016
Watershed Tungsten Project, Queensland
*Notes:
• See Appendix for full details of Mineral Resource Estimate and Ore Reserve Statement
• Updated DFS figures reported in ASX release 22 January 2015, 29 June 2015
• See accompanying Forward Looking and Cautionary Statements
Watershed is located around 115km NW from
Cairns
For
per
sona
l use
onl
y
Proposed mine site is ideally
located close to the growing
centres of Cairns, Port
Douglas and Mareeba
Cairns has an International
and domestic airport
Watershed is located around
24km from the State highway
and Ergon 132kv grid power
line
The Project has minimal
infrastructure requirements:
24km track upgrade
24km grid power
connection
Process plant
Mine development
Accommodation camp
Water dams
Watershed infrastructure F
or p
erso
nal u
se o
nly
Scheelite is the sole economic tungsten bearing mineral
present within the deposit.
Significantly it is a molybdenum-free variety and fluoresces
a brilliant blue-white (molybdenum in scheelite attracts
penalties from APT smelters)
Scheelite is hosted by calc-silicate and albite-muscovite
altered units as well as by quartz-feldspar veins contained
within these altered units
Three styles of mineralisation are observed:
East-west orientated quartz-scheelite vein swarms (a
and below right) with some locally developed north-
south veins. The highest tungsten grades occur where
veins are hosted by the calc-silicate altered units and
biotite is present, and
Disseminated scheelite mineralisation (b) within the
calc-silicate altered calcareous limestone and
arenaceous units.
Albitised felsic dyke (not shown)
Veins carrying scheelite are between a few mm to 1m in
true thickness, with most being between 1 cm and 30 cm
Watershed Geology
Veins carrying scheelite can host bonanza grades
Examples of Watershed scheelite mineralisation
For
per
sona
l use
onl
y
Scheelite mineralisation intersected by exploration drilling
can be of high grade
Within the resource database:
Over 300 composite intervals exceed 5m length and
have an average grade of 0.5% WO3
160 composites with a length exceeding 5m having an
average grade of 1.0% WO3
High grade scheelite mineralisation has also been
intersected at a grade control drill spacing level (10 metres
east by 10 metres west) at three different areas (located
within the current Mineral Resource)
Extensive high-grade scheelite mineralisation hosted in
cross-cutting quartz-vein structures was encountered in the
drilling program. Some of the best intersections previously
reported* in the Northern zone included:
7m at 0.56% WO3 from 19m
13m at 0.42% WO3 from surface and 7m at 1.59% WO3
from 29m in the same hole
High grade mineralisation from surface
High grade scheelite mineralisation is targeted
early in the DFS mine plan
* ASX Announcement 26 February 2008
Surface sampling and RC drilling traces (grade control spacing)
showing scheelite mineralisation intercepts (North Zone)
For
per
sona
l use
onl
y
Vital believes there is good potential for the future
development of an underground operation at Watershed
Exploration drill testing has been able to demonstrate that
the tenor and width of scheelite mineralisation increases at
depth
Vital’s drill testing of vein style scheelite mineralisation was
able to identify continuity over a zone extending 175 metres
west and 125 metres depth from previously known drill
intercepts
Drill hole MWD119 reported mineralisation intermittently
over 286 metres from 91 to 377 metres down-hole with the
best interval being 20 metres at 1.27% WO3 from 302
metres (including 2 metres at 5.33% WO3 and 7 metres at
1.79% WO3)*
This high grade vein style scheelite mineralisation is around
100 metres below the pit and remains open at depth and
along strike
Further exploration drilling has the potential to convert this
into the Mineral Resources required to support an
underground operation
High grade mineralisation at depth
Scheelite mineralisation is
open along strike and
at depth
* ASX Announcement 19 February 2007
For
per
sona
l use
onl
y
Open pit mining
Low cost open cut mining will use a 200t hydraulic excavator and 5 x 100t dump
trucks to feed a 2.5Mtpa processing plant over 10 years
Highly visible ore will assist with selective mining
Waste to ore ratio is around 2.87 to 1 LOM
Mining studies for the Project have included:
Geotechnical drilling and modelling
Mining cost modelling
Optimisations and scheduling
Pit design and waste rock dump designs
Rock conditions are good and may allow pit slopes to be steeper than forecast
Ore is visible
assisting mining
operations
Simple low cost
open cut mining
For
per
sona
l use
onl
y
DFS flowsheet - low cost high recovery
Extensive metallurgical test work has been completed with over 150
tonnes of material sourced from an underground adit and 11 metallurgical
holes
DFS flowsheet maximises scheelite concentrate grade, recovery and
minimises power consumption (low Opex)
2.5Mtpa ROM ore feed passed over X-Ray ore sorters and spirals to
reject 84% of the material (2.1Mtpa of barren gangue) prior to flotation
400,000 tonne feed grading around will be around 1% WO3 fed to small
oxide flotation circuit
Flotation produces premium 65% WO3 concentrate at average recovery of
73.6%
Underground Adit X-Ray showing scheelite (dark)
-80mm to
+ 10 mm
-0.5mm
-0.125mm
Mass Balance
For
per
sona
l use
onl
y
Premium scheelite concentrate
Around 3,800 tonnes of scheelite concentrate
grading 65% WO3 will be produced annually
Concentrate produced using the DFS flowsheet will
be very marketable as it is a high grade (>65%
WO3), high quality product with most penalty
elements either close to trace or well within
acceptable levels
Molybdenum (Mo) is at trace levels and well below
any penalty threshold (Mo is a major penalty
element which if too high will result in a shipment
being rejected)
Radioactivity is at trace levels with combined U and
Th being well below trigger levels (Radioactivity
above specification can also result in a shipment
being rejected)
Arsenic in the concentrate is also well below any
penalty thresholds
As a result of this the concentrate product will be
able to sold at a premium and shipped anywhere in
the world
Watershed Tungsten Project
Watershed ticks the boxes; producing a clean high
grade scheelite concentrate that can be shipped
anywhere in the world
For
per
sona
l use
onl
y
Japan has a world class tungsten industry that produces high technology tungsten metal products for domestic and international consumption
Japan has no domestic tungsten mining industry and relies 100% on imports to supply its industry
Japanese tungsten industry is dominated by Mitsubishi and Sumitomo group companies who produce tungsten carbide tooling, primarily for the automotive industry in Japan and exported internationally
Mitsubishi and Sumitomo group companies have conversion facilities that can convert tungsten concentrate into intermediary products such as APT
Strategic tungsten stockpiles in Japan have steadily decreased since 2012 and are now at low levels representing around 60 days of production
JOGMEC (30% project interest) is running a tender process to secure a Japanese company as a joint venture partner in the Watershed Tungsten Project:
JOGMEC earn in agreement was signed in May 2011 and expires 31 December 2015
JOGMEC earnt a 30% interest in the Watershed Tungsten Project by spending $5.4M and maintain their interest by contributing to expenditure on a pro-rata basis
JOGMEC hold rights to transfer their project interest to one or more Japanese companies
JOGMEC expected to select tender winner by end of September 2015
Strategic Japanese JV partner
Japan currently relies on tungsten imports from China
to sustain its tungsten industry
“JOGMEC Seeks a Stable Supply of Natural Resources for Japan”
* Companies involved in the Japanese tungsten industry are listed for information
purposes only and does not imply a commercial arrangement with Vital Metals Ltd
Japan has a vibrant tungsten industry*
For
per
sona
l use
onl
y
Relentless focus - improving the bottom line
Market conditions conducive for up to 20% operating
cost reduction over DFS* baseline: Diesel
Grid electricity charges
Labour availability
Competitive market conditions
Continuous review of the DFS has identified savings in
the pre-production capital costs: Significant surplus capacity amongst mining and construction
contractors
Reduction in demand for mining and plant equipment with a large
amount of surplus and second-hand equipment in the market
Improved labour availability for construction and mine site jobs
Falling input costs mean this is a great time to
back and build a mining project in Australia..
Project Capital Cost
Estimates
DFS Sep 2014 DFS Update
June 2015
Mining $2.2M $2.2M
Processing Plant $130.5M $105M
Site Infrastructure $36.2M $32.8M
Working Capital $3.4m $3.4M
Total $172.3M $143.4M
*Notes:
• Updated DFS figures reported in ASX release 22 January 2015, 29 June 2015
• An exchange rate of A$1:US$0.76 has been assumed
• Capital costs are on an 100% equity basis
• See accompanying Forward Looking and Cautionary Statements
Watershed Tungsten Project APT Breakeven Price
Our target
For
per
sona
l use
onl
y
Project 15
Targeting up to 15 year open cut mine life
Mining and processing rate assumptions
unchanged from DFS*
Current long term pricing assumption of
US$325/mtu and FX US$0.70
Boost to NPV and free cashflow, potentially
100% increase
Tungsten metal output up around 135%
Conversion of Inferred Resources will add
more again
Potential satellite open pits and underground
to add further life
With mineralisation open along strike and at depth,
Watershed has all the ingredients to be a significant
long life operation... Notes:
• ASX Announcement 17 September 2014
• See accompanying Forward Looking and Cautionary Statements
For
per
sona
l use
onl
y
Cash cost curve
Vital C1 first 3 years US$124*
Source: Tungsten Market Research
World cost curve for tungsten production, 2013 (US$/mtu)
*Notes:
• Updated DFS figures reported in ASX release 22 January 2015, 29 June 2015
• An exchange rate of A$1:US$0.76 has been assumed
• See accompanying Forward Looking and Cautionary Statements
For
per
sona
l use
onl
y
Watershed Tungsten Project is ready to go
Excellent opportunity to leverage growing tungsten demand
JOGMEC (30% interest in project) key to securing partnership with Japanese
company that will provide off-take and assist with project financing
Good opportunity to grow beyond the 10-year open pit operation identified in DFS
Significant exploration potential to add additional mineral resources near to the
proposed mine development
Clear pathway to commence development in 2016, subject to successful
completion of project finance
Vital – why invest
Transfer of JOGMEC Interest
to JV Partner
Project Financing
Construction Mining
For
per
sona
l use
onl
y
Mineral Resources and Ore Reserves
Project Capital and Operating Costs
Watershed financial scenarios
Exploration Potential
Appendix F
or p
erso
nal u
se o
nly
Mineral Resources and Ore Reserves
Mineral Resources Tonnage Mt WO3%
Measured 9.5 0.16
Indicated 28.4 0.14
Sub Total: Measured and Indicated 37.8 0.15
Inferred 11.5 0.15
Total: Measured, Indicated and Inferred 49.3 0.14
Ore Reserves Tonnage Mt WO3%
Proved 6.4 0.16
Probable 15 0.14
Total: Proved and Probable 21.3 0.15
Notes to accompany Mineral Resources and Ore Reserves • Mineral Resources first reported in ASX release 30 July 2012
• Ore Reserves first reported in ASX release 17 September 2014
• Mineral Resources are inclusive of Ore Reserves
• Mineral Resources and Ore Reserves reported at a cut-off grade of 0.05% WO3
• Please refer to Competent Persons statement accompanying this presentation
For
per
sona
l use
onl
y
Project Capital and Operating Costs
Project Capital Cost Estimates A$M US$M
Mining 2.2 1.7
Processing Plant 105 79.8
Site Infrastructure 32.8 24.9
Working Capital 3.4 2.6
Total 143.4 109.0
C1 Cash Cost Estimates – Life of Mine A$/ t ore A$/mtu US$/mtu
Mining 12.8 111 85
Processing 7.5 69 52
Administration and Transport Charges 1.5 14 11
Total 20.9 194 148
Notes to accompany Capital and Operating Costs • Updated DFS figures reported in ASX release 22 January 2015, 29 June 2015
• An exchange rate of A$1:US$0.76 has been assumed
• Capital costs are on an 100% equity basis
• Operating costs are on a life of mine basis
• See accompanying Forward Looking and Cautionary Statements
For
per
sona
l use
onl
y
Watershed financial scenarios
APT US$300/mtu
FX US$0.76
APT US$325/mtu
FX US$0.76
APT US$350/mtu
FX US$0.76
APT US$375/mtu
FX US$0.76
Pre Tax Post Tax Pre Tax Post Tax Pre Tax Post Tax Pre Tax Post Tax
NPV @ 8% $68M $37M $119M $73M $170M $109M $221M $145M
IRR 18.3% 14.1% 25.1% 19.4% 31.4% 24.4% 37.3% 29.0%
Payback Years 4.1 2.8 2.5 2.3
Free Cashflow $178M $125M $258M $181M $337M $237M $416M $292M
Cash Costs US$/ mtu 148
Total Costs US$/ mtu 192
Notes to accompany financial scenarios: • Figures reported in ASX release 29 June 2015 and are on a 100% equity basis
• Operating costs are on a life of mine basis
• Please refer to accompanying Forward Looking and Cautionary Statements
For
per
sona
l use
onl
y
Exploration potential
Name Tenement Element of Interest Tonnage Range (kt) Grade Range Comments
Watershed Deeps* ML20536 W 10,500 – 14,000 0.14 - 0.25% These Exploration
Targets are conceptual
in nature, and there has
been insufficient
exploration to define a
Mineral Resource. It is
uncertain if further
exploration will result in
the estimation of a
Mineral Resource.
Watershed South* MDL127 W 830 - 1,000 0.06 - 0.15%
Desailly North* MDL127 W 830 - 1,000 0.06 - 0.15%
Desailly* MDL127 W 1,150 – 1,500 0.06 - 0.15%
Mt Elephant* EPM 14735 W, Sn 1,000 - 3,000 0.06 - 0.15%
Slaty Range* EPM 25102 W, Sn 35,000 – 60,000 0.10-0.18%
Exploration Potential exclusive of current Mineral
Resource W 49,000 – 80,000 0.10-0.19%
* Notes to accompany Exploration Potential • Exploration Targets reported 25 November 2013, AGM Presentation. Slaty Range reported 13 October 2014 • Please refer to Competent Persons statement accompanying this release
For
per
sona
l use
onl
y
Exploration potential F
or p
erso
nal u
se o
nly
Exploration potential F
or p
erso
nal u
se o
nly
Exploration potential F
or p
erso
nal u
se o
nly
top related