the platinum industry - allan hochreiter investors... · scale of mining operations increasing to...
TRANSCRIPT
The Platinum Industry
René HochreiterJanuary 2008
Geology, Mining, Extraction, Market
2
262.8178
61 49 44 43 17
997.2
0
200
400
600
800
1000
1200
Ang
lo P
lats
Impl
ats
Lonm
in
Eas
tern
Ano
oraq
Aqu
ariu
s
Ela
nds
Nor
tham
Attributable 4E Resources Oz
Attributable Oz (m) 4E
262.8178
129 10561 44 43
884.2
0
100
200
300
400
500
600
700
800
900
1000
Ang
lo P
lats
Impl
ats
Lonm
in
Nor
tham
Ano
oraq
Eas
tern
Aqu
ariu
s
Ela
nds
Attributable Oz (m) 4E
Pre Transaction Post Transaction
3
2.56
1.24
0.660.263 0.195 0.02
0.10.0
0.5
1.0
1.5
2.0
2.5
3.0
Anglo Plats Implats Lonmin Aquarius Northam Anooraq Elands
Lebowa UG2 & MER expansions in progress
0.22
Current operations (2006)
Attributable Production
Platinum Production (m ozs per year)
4
Comparable Analysis EV / 4PGE Resource oz (M&I) EV / 4PGE Resource oz (M, Ind. &Inf.)
Notes1. Market capitalization as of September 12, 2007 using basic shares outstanding, inclusive of market value of listed warrants; converted at spot exchange rates 2. Enterprise value equals market capitalization plus debt less cash balances3. Attributable 4 PGE resources calculated prior to any earn-in, out arrangements4. Aquarius market capitalization and attributable resources assumes BEE group Savannah Consortium converts its interests in AQPSE (54% held by Aquarius
Platinum Limited) into 21.7 million shares of Aquarius; Inferred Resources exclude Chieftans Plain and Walhalla5 UG2 resources only at Eastern Platinum's Spitzkop/Kennedy's Vale project6. Anooraq EV based upon treasury share method i.e. assumes 167 million BEE warrants exercised at C$1.35 per warrant7. Anooraq resources excludes Avoca and De Kamp UG2 and Merensky PGM resources8. Anooraq Pro Forma EV and Resources assumes acquisition of 51% of Lebowa, 1% Ga Phasha and 1% of Boigantsho for R3.6 billion
5
Mines and Projects Location
6
Lebowa Platinum Mine - Current
Underground operations mining Merensky and UG2 reefsVertical shaft and declinesOnly Anglo Platinum Eastern Limb operation mining both Merensky and UG2 reefs
2006 production rate 140,000 tpm (85,000 tpm Merensky & 55,000 tpm UG2)2006 annual refined production = 202,500 oz (4E)High concentrator recoveries = approx 90%Cash on mine cost = R469/tonne
Significant reserves and resourcesP&P 10.4 M oz 4EMeasured and Indicated Resources 46 M oz 4EInferred Resources 53.2 M oz 4E
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Lebowa – Increasing Production
MIDDELPUNT
UMKOANESTADBRAKFONTEIN
KLIPFONTEIN
PASCHASKRAAL
TWICKENHAM
HACKNEY
SURBITON
AVOCA
DE KAMP
BALMORAL
ZEEKOEGAT
DIAMAND
Brakfontein Decline
Middel Punt Hill
MIDDELPUNT
UMKOANESTADBRAKFONTEIN
KLIPFONTEIN
PASCHASKRAAL
TWICKENHAM
HACKNEY
SURBITON
AVOCA
DE KAMP
BALMORAL
ZEEKOEGAT
DIAMAND
Brakfontein Decline
Middel Punt Hill
8
Lebowa – Expansions (see Appendix 1)Scale of mining operations increasing to reflect true quality of deposits
Anglo Platinum has approved and is implementing 2 major expansions at LebowaBrakfontein Merensky expansions – R1.3bn capex announced in 2006Middelpunt Hill (MPH) UG2 expansions – R1.7bn capex announced in 2007UG2 and Merensky expansions to increase production to 245,000 tpm by 2012Announced expansions to increase production to approx 430,000 4Eoz pa by 2012
Additional expansion projects at Lebowa on both Merensky and UG2 reefs at advanced stage of evaluation.
Scope for expansion at Lebowa to 350,000 tpmIncreased production rates at Lebowa to lower R/tonne unit costs
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Ga Phasha PGM Project
10
Boikgantsho Project
Anooraq/AngloPlat JV
AngloPlat - PPRust
Anooraq – Rietfontein JV
Lonmin AfriOre/Akanani
Mokopane (formerly Potgietersrust)
N1 Highway
Drenthe
Platreef outcrop
PPRust
Overysel
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OPEN
OPEN
OPEN
OPEN
OPEN
OPEN
OVERYSEL NORTHDEPOSIT
(ARQ-ANGLO JV)
OVERYSELDEPOSIT(Anglo Platinum)
DRENTHEDEPOSIT
(ARQ-ANGLO JV)
1 km
Segment 1
Segment 2
Deposit Category Tonnes Pt (g/t)
Pd (g/t)
Au (g/t)
3 PGM(g/t) % Ni % Cu Contained
Ounces PGMEHTNERD
000,046,88
35.0
94.0
26.0
85.0
90.0
90.0 61.1
41.0
51.0
90.0
90.0
000,903,5
000,513,3
detacidnI
derrefnI
005,932,231 52.1
Deposit Category Tonnes Pt (g/t)
Pd (g/t)
Au (g/t)
3 PGM(g/t) % Ni % Cu Contained
Ounces PGM
13,693,500
0.66
0.66
0.85
0.88
0.10
0.10 1.64
0.10
0.11
0.06
0.07
1,839,000
723,000
Indicated
Inferred
35,436,500 1.61
OVERYSEL NORTH
1,750,000
0.71
0.59
0.93
0.85
0.10
0.09 1.52
0.08
0.08
0.05
0.05
501,000
86,000
Indicated
Inferred
8,985,000 1.74Segment 1
Segment 2
Drenthe & Overysel NorthMineral Resource Statement Nov 2004
Estimated at a US$20 gross metal value per tonne (GMV/t) cut-off. GMV is the sum of Pt, Pd, Au, Cu and Ni grades multiplied by the following metal prices: Pt – US$650/oz; Pd – US$250/oz; Au – US$375/oz; Ni – US$4/lb; Cu – US$1/lb.Qualified person for the resource estimate is G.J. van der Heever, Pr.Sci.Nat.
Anglo Platinum Deposit
Norite
Platreef
Granite
Open Down Dip
Dolomite
Resource Deposit Outline
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LPM Merensky Current Depletion Strategy
N
650mMER Brakfontein Vert # P1 [email protected]/t@92cm
MER Brakfontein # [email protected]/t@99cm70%Meas. 29%Ind. 1%Inf.
MER Middelpunt Vert # P2 [email protected]/t@90cm
MER Diamand Vert # P2 [email protected]/t@92cm
MER Brakfontein Vert # P2 [email protected]/t@92cm
MER Middelpunt Vert # P1 [email protected]/t@90
MER Diamand Vert # P1 [email protected]/t@91cm
MR sub-outcrop
MER Zeekoegat [email protected]/t@89cm94%Meas. 6%Ind. 0%Inf.
MER Vertical # [email protected]/t@93cm100%Meas. 0%Ind. 0%Inf.
MER UM2 # [email protected]/[email protected]%Meas. 0.5%Ind. 0%Inf.
L1 = Current Operations & Projects in ExecutionL2 = Project Portfolio (Conceptual Study, Pre Feasibility and Feasibility)L3 = Growth Options (Scoping Studies)
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Merensky Expansion - Brakfontein
14
Middelpunt Hill – UG2 Expansions
Geology
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Geological Map of Southern Africa
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Geological Column of South Africa
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Localities of South Africa’s Major Mineral Deposits
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Geological Column of the Bushveld Complex Showing the Main Platinum Bearing Reefs
Mining and Metallurgy
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Longhole Stoping
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Breast Stoping
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Metallurgical Recovery
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Metallurgical Recovery
PGM Market Outlook
26
5,500
6,000
6,500
7,000
2002
2003
2004
2005
2006
2007
Total Supply Total Demand
Platinum Supply and Demand (JM 2007 Report)
1,5951,6051,9652,1602,5102,820Jewellery
10
(855)
4,195
6,775
270
345
880
5,290
6,785
2006
(265)
(885)
4,235
6,925
280
340
820
5,220
6,660
2007
365385295390N America
(40)(50)(330)(500)Movement in Stocks
(770)(690)(645)(565)recovery
3,8203,4903,2702,590of which: Autocatalyst:
gross
6,6906,5406,5306,470Total Demand
280250225150Others
8908451,050980Russia
5,1155,0104,6304,450of which: South Africa
6,6506,4906,2005,970Total Supply
2005200420032002‘000 oz
27
Palladium Supply and Demand (JM 2007 Report)
3,000
4,000
5,000
6,000
7,000
8,000
9,000
2002
2003
2004
2005
2006
2007
Total Supply Total Demand
1,425
995
1,065
800
(800)
4,015
6,635
985
3,900
2,905
8,060
2006
1,7151,1502,0201,020410Movement in Stocks
1,1001,430930260270Jewellery
620965920900760Electronics
355815850825785Dental
(945)(630)(530)(410)(370)recovery
4,3803,8703,7903,4503,050
of which: Autocatalyst:
gross
6,6057,2606,5605,4304,840Total Demand
1,0009051,035935990N America
4,2404,6204,8002,9501,930Russia
2,7952,6052,4802,3202,160of which:South Africa
8,3208,4108,5806,4505,250Total Supply
20072005200420032002‘000 oz
28
Rhodium Supply and Demand (JM 2007 Report)
500
600
700
800
900
2002
2003
2004
2005
2006
2007
Total Supply Total Demand
(13)
(170)
868
837
20
95
690
824
2006
2020172625North America
(4)(73)(9)10423Movement in Stocks
(179)(137)(140)(124)(99)recovery
861830758660599of which: Autocatalyst:
gross
808828729620592Total Demand
1
709010014090Russia
695628587544490of which:South Africa
804755720724615Total Supply
20072005200420032002‘000 oz
29
Platinum Demand/Supply Outlook (Allan Hochreiter)
7,0526,0875,0634,195of which: Autocats
-2,870-1,962-72110Supply shortfall/surplus
2,2402,1272,1531,692Implats
3,9304,0403,2882,800of which: AngloPlat
10,00910,0029,0156,785Supply Total
4,4004,3503,2001,605Jewellery
12,87911,9649,7366,775Demand Total
2020201520102006(000 oz)
400050006000700080009000
1000011000120001300014000
2006 2010 2015 2020
Total Supply Total Demand
(000 oz)
Surplus Shortfall
-3500-3000-2500-2000-1500
-1000-500
0500
2006 2010 2015 2020
Source: Rene Hochreiter, Allan Hochreiter (Pty) Ltd1
30
Palladium Demand/Supply Outlook (Allan Hochreiter)
2,5002,5002,100995Jewellery
3,3053,3003,8003,900Russia
5,5005,5005,5004,015of which: Autocats
37080-741,425Supply shortfall/surplus
3,8703,8803,4272,905of which: South Africa
8,3708,3808,4278,060Supply Total
-2,500-2,200-1,600-800Secondary Recovery
8,0008,3008,5016,635Demand Total
2020201520102006(000 oz)
6,000
6,500
7,000
7,500
8,000
8,500
9,000
2006 2010 2015 2020
Total Supply Total Demand
-2000
200400600800
1,0001,2001,4001,600
2006 2010 2015 2020
Surplus ShortfallSource: Rene Hochreiter, Allan Hochreiter (Pty) Ltd
31
Rhodium Demand/Supply Outlook (Allan Hochreiter)
1,5851,3681,138868of which: Autocats
-503-368-210-170Re cycling
-541-324-218-13Supply shortfall/surplus
863863759690of which: South Africa
1,0081,008904824Supply Total
1,5491,3321,122837Demand Total
2020201520102006(000 oz)
0
200
400
600
800
1000
1200
1400
1600
1800
2006 2010 2015 2020
Total Supply Total Demand
-600
-500
-400
-300
-200
-100
0
2006 2010 2015 2020
Surplus ShortfallSource: Rene Hochreiter, Allan Hochreiter (Pty) Ltd
32
This presentation includes certain statements that may be deemed "forward-looking statements". Investors are cautioned that any such statements are not guarantees of future performance and actual results or developments may differ materially from those projected in the forward-looking statements. For more information on the risks inherent in the Company's business, Investors should review the Company's annual Form 20-F filing with the United States Securities Commission and its home jurisdiction filings that are available at www.sedar.com. Mineral resources do not have demonstrated economic viability. Investors are cautioned not to assume that any part or all of the mineral deposits in these categories will ever achieve the status of ore reserves. A preliminary economic assessment is based on inferred resources that are geologically speculative, and as a result, there is no certainty that the economic considerations or results will be realized.
All information contained relating to the Preliminary Assessment, including but not limited to statements of the project's potential and the other information under the headings "Production Parameters," "Capital Costs, Sustaining Capital Costs, and Operating Costs," "Production Summary," and "Financial Analyses," are "forward looking statements" within the definition of the United States Private Securities Litigation Reform Act of 1995. The Preliminary Assessment was prepared to broadly quantify the project's capital and operating cost parameters and to provide guidance on the type and scale of future project engineering and development work that will be needed to ultimately define the project's likelihood of feasibility and optimal production rate. It was not prepared to be used as a valuation of the project nor should it be considered to be a pre-feasibility study. The capital and operating cost estimates which were used have been developed only to an approximate order of magnitude based on generally understood capital cost to production level relationships and they are not based on any systematic engineering studies, so the ultimate costs may vary widely from the amounts set out in the Preliminary Assessment. These factors could materially and adversely impact the projected economics of the project. As is normal at this stage of a project, data is incomplete and estimates were developed based solely on the expertise of the individuals involved as well as the assessments of other persons who were involved with previous operators of the project. At this level of engineering, the criteria, methods and estimates are very preliminary and result in a high level of subjective judgment being employed
The following are the principal risk factors and uncertainties which, in management's opinion, are likely to most directly affect the conclusions of the Preliminary Assessment and the ultimatefeasibility of the project. The mineralized material at the project is currently classified as inferred resources and do not constitute ore reserves. Considerable additional work, including in-fill drilling, additional process tests, and other engineering and geologic work will be required to determine if the mineralized material is an economically exploitable ore reserve. There can be no assurance that this mineralized material can become a reserve or that the amount may be converted to a reserve or what the ultimate grade thereof will be. Final feasibility work has not been done to confirm the pit design, mining methods, and processing methods assumed in the Preliminary Assessment. Final feasibility could determine that the assumed pit design, mining methods, and processing methods are not correct. Construction and operation of the mine and processing facilities depends on securing environmental and other permits on a timely basis. No permits have been applied for and there can be no assurance that required permits can be secured on a timely basis. Data is incomplete and cost estimates have been developed in part based on the expertise of the individuals participating in the preparation of the Preliminary Assessment and on costs derived from projects which are believed to be comparable, and they are not based on firm price quotes. Costs, including design, procurement, construction, and on-going operating costs and metal recoveries could be materially different from those contained in the Preliminary Assessment. There can be no assurance that mining can be conducted at the rates and grades assumed in the Preliminary Assessment. The Preliminary Assessment assumes specified, long-term prices levels for platinum, palladium, gold, copper and nickel. Prices for these commodities are historically volatile, and Anooraq has no control of or influence on those prices, all of which are determined in international markets. There can be no assurance that the prices of these commodities will continue at current levels or that they will not decline below the prices assumed in the Preliminary Assessment. Prices for platinum, palladium, gold, copper and nickel have been below the price ranges assumed in Preliminary Assessment at times during the past ten years, and for extended periods of time. The project will require major financing, probably a combination of debt and equity financing. Interest rates are at historically low levels. There can be no assurance that debt and/or equity financing will be available on acceptable terms. A significant increase in costs of capital could materially and adversely affect the value and feasibility of constructing the project. Other general risks include those ordinary to very large construction projects including the general uncertainties inherent in engineering and construction cost, the need to comply with generally increasing environmental obligations, and accommodation of local and community concerns.
Cautionary Risk Factors and Forward Looking Statement Information