ki iron ore project metal bulletin confnov 05 · 11/22/2005 · metal bulletin iron ore conference...
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Metal Bulletin Iron Ore Conference 22 November 2005
Koolan Island Iron Ore Project
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Contents• Location
• Project Outline
• Project Schedule
• Corporate Overview
• History
• Equipment
• Geology
• Resource
• Development Data
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Location
WA Map
Koolan Island Project
• Western Kimberley Region WA
• 2,000km NNE of Perth
• Nearest towns: Derby 150km S and Broome 320km SW
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Koolan Island
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Project Outline
• Brownfields development
• Based on Main orebody, supplemented by four satellites, Mullet, Acacia, Eastern and Barramundi
• Deepwater port able to accommodate panamax vessels to 75,000 dwt
• Resource sufficient to support 4Mta operation for 10+ years
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Project Schedule
• BFS completed August 2005
• Environmental Recommendations in Approval stage• Land Access Agreement with Traditional Owners being
completed
• Mining Lease Grant expected early 2006
• Construction Commencement Q1, 2006
• Plant Commissioning Q2, 2006
• Wharf & Shiploader Completion Q3, 2006
• 1st Shipments Q3, 2006
(As Anticipated 14/11/2005)
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BFS Highlights• Bankable Feasibility Study (BFS) completed, with positive results, encouraging
the Company to proceed with mine development, subject to Government approvals, formalisation of off-take contracts and Board approval of funding arrangements
• Initial capital costs of A$108 million, inclusive of mine development costs of A$26 million
• Financial modeling of the Project has been based on a sales mix of fines (70%) and lump (30%), producing total revenues of A$1.4 billion over the nine year life of the mine
• Operating cash surplus of A$583 million (EBITDA) over the nine year life of the project
• The project returns, based on 29.1 million tonnes of saleable ore, a net present value (NPV) of A$217 million (before interest and tax) at a 10% discount rate, with an Internal Rate of Return (IRR) of 39.7%
• First shipment of iron ore scheduled to commence in second half of 2006• BFS takes no account of exploration upside of the Koolan Island Project
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Corporate Overview
• Aztec Resources Limited is a public company listed on ASX and the London Stock Exchange’s AIM market
• Market Capitalisation: A$85,000,000
• 497,700,000 + shares
• Major Shareholders:
Cambrian Mining plc…………………………………...18.7%National Nominees Limited…………………………….6.3%ANZ Nominees Limited….…………………………..….5.3%CITIC Resources Australia Pty Ltd.………………..…3.4%HSBC Custody Nominees (Australia) Ltd……………3.1%
(10/10/2005)
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History – Pre BHP• Ore deposits on Koolan and Cockatoo Islands
discovered in 1880
• First mining leases granted, small scale mining commenced 1907
• First attempt at large scale mining in 1936 when Yampi Sound Mining Company (a consortium including Nippon Mining Co) announced intention to export to Japan
• Federal Government embargo on all iron ore export in 1938
• First ore mined on Koolan fed small charcoal-iron plant built by State Government in 1945
• BHP granted leases in 1951
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The BHP Years 1965 - 1993
• By the conclusion of mining in 1993, 68Mt ore had been produced
• Shipment grade declined from >67%Fe for the early Main pit production to 65% - 65.3%Fe for the final blend
• On closure, all infrastructure removed or buried, stockpiles and roads ‘moonscaped’ and the Main pit opened to allow ingress of the sea
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The Aztec Era
• Aztec granted tenements in 2003
• Notice of Intent approved January 2004, drilling commenced February 2004
• Camp established on Koolan Island August 2004
• Data collection for BFS completed February 2005
• Land Access Agreement negotiations commence with Traditional Owner’s March 2005
• BFS completed August 2005
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Koolan Island Mine & Infrastructure Layout
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Mining Operations
• Contractor-based operation
• Conventional open-pit operation, rotary drills, 200t hydraulic backhoes, FEL’s, rear dump trucks and ancillary plant
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Transportation System
• Truck haulage to ROM pad, primary crusher and stockpiles
• Conveyor to shipping stockpile
• FEL reclaim from shipping stockpile
• Conveyor to sampling station, wharf and shiploader
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Port Facilities
• Steel-pile wharf able to accept Panamax vessels up to 75,000 dwt
• Berth pocket 16m draft
• Fixed, luffing shiploader, capacity 3,000tph
• 20m minimum draft in departure channel - no dredging required
• Vessel berthing/departure assisted by tugs
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Regional Geology
• Kimberley Basin is a large structural basin occupying most of the Kimberley region with sediments of Lower-Mid Proterozoic age dominant
• The Yampi ore bodies lie at the western end of the NW –SE trending King Leopold Mobile Zone which forms the south western border of the Kimberley Basin
• Hematite concentration occurs in the basal Yampi, member of the Pentecost Sandstone in the Kimberley group
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Local Stratigraphy
Pentecost SandstoneWhite well sorted quartz sandstone, grey siltstone
Yampi MemberPink-brown arkose and feldspathic sandstone; minorsiltstone, hematitic quartz sandstone, glauconitic sandstone
Iron ore
Elgee SiltstoneRed-brown and grey sitstone and minor phyllite; thin sandstone interbeds
Basal boulder to pebble conglomerate
Warton SandstoneWhite well-sorted quartz sandstone and feldspathicsandstone; siltstone interbeds; andalusite granofelsin places.
• The Kimberley Group comprises essentially a succession of sandstones, quartzite's and siltstones, with some interbeddedphyllite, unconformably overlying the Speewah Group
• The stratigraphy on Koolan Island comprises the Warton sandstone, Elgee Siltstone and Yampi Member of the Pentecost Sandstone (distinguished by its hematite content)
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Local Structure
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Main Ore Body
Warton San
dstone
ElgeeSilts
tone
Yampi M
ember
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Main Ore Body
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Eastern-Barramundi Ore Body
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Eastern-Barramundi Ore Body
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Mullet-Acacia Ore Body
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Mullet-Acacia Ore Body
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Resource Drilling
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Resource Estimates
0.73.366.335 600Main
1.15.664.653,400Total0.615.558.53,700Acacia-East
1.010.361.26 200Mullet-Acacia
2.97.660.97 900Eastern-Barramundi
%%%('000)
Al2O3SiO2FeTonnesOrebody
55% Fe cut off grade (as at 14 Oct 2005)
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Koolan Island
Complete mining Main Pit2014 / 2015
Complete mining Eastern and Mullet Pits2009 / 2010Waste stripping at Main pit reaches sea levelDecember 2009Full production 4mtpa2008 / 2009De-water Main pit lake and re-hab footwall2007 / 2008Seawall construction2006 / 2007First ore shipmentSeptember 2006Commence crushingAugust 2006
Mobilise remaining fleetCommence mining Mullet/EasternWaste stripping at MainCommence seawall construction
June 2006
Establish mining facilities and roads, initial clearingFeb - May 2006Mobilise first mining fleetJanuary 2006ActivityDate
KEY MINE DEVELOPMENT DATES (As Anticipated 14/11/2005)