West African Minerals Corporation One2One Investor Presentation

The new iron ore frontier
Thursday 14th March 2013
From 6.00pm, Chesterfield Mayfair Hotel, 35 Charles Street, Mayfair, W1J 5EB
AIM: WAFM

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Issued by West African Minerals Corporation. Registered office at Craigmuir Chambers, Road Town, Tortola, British Virgin Islands. Registered number: 1415559.
Company Overview March 2013
1

West African Minerals Corporation (WAFM)
Group Overview
Share Capital
Sierra Leone
Central African Republic
Issued Share Capital
Options and Warrants
Fully-diluted Share Capital
Market Capitalisation 1
Market Capitalisation 1
288.0 M
28.1 M
316.1 M
£174.2M
US$260.0M
Interest: 75%
Tenement:
5 exploration
licences
Area: 687 km 2
Operator:
WAFM
Interest: 25%
Tenement:
2 exploration permit
applications
Area: 977 km 2
Operator: AXMIN Inc. (75%)
Cash 2
US15.0M
Share Performance
Cameroon
Interest: 100% 3
Tenement:
6 exploration
permits
Area: 5,999 km 2
Operator:
WAFM
Notes:
1. Based on WAFM share price of approx. 59.5p as at 11 March 2013 and ROE of GBP:USD1.487
2. Consolidated WAFM Group cash at 11 March 2013.
3. Government of Cameroon has a right to a 10% free carried interest.
Company Overview March 2013
2

WAFM’s Strategy
WAFM is focused on Direct Shipping Ore (DSO) in Cameroon
• WAFM’s assets in Cameroon are ideally located to explore for high grade iron ore.
• Large scale exploration programme underway targeting multiple deposits within
an emerging major iron ore district.
• Single country infrastructure with deep water coastal access, favourable mining
jurisdiction, geopolitical stability.
• Near term cash flow potential from deposits in proximity to the coast.
• Longer term value from large scale DSO discoveries inland.
Largest landholder strategically positioned in the next
major iron ore district
Company Overview March 2013
3

EV/Resource – US$/t Fe (Contained)
Mount Gibson
BC Iron
Fortescue*
Western Desert
Atlas Iron*
Red Hill Iron
IMX
Golden West
Flinders Mines
London Mining
Sphere Minerals
Grange
Royal
Cape Lambert
African Minerals
Ironclad
Grindalbie
Pluton
Iron Ore Trading Multiples
DSO vs Magnetite or BIF Producers/Developers
12.00
10.00
8.00
11.6
9.3
DSO trades at 6-7 times BIF
DSO
Magnetite or BIF
6.00
4.00
2.00
4.0
3.2
1.1
Average 3.4
0.6 0.6 0.4 0.2
Average 0.5
0.8 0.7 0.6 0.5 0.5 0.5 0.4 0.4 0.2
0.00
The market values DSO at a considerable premium over banded iron
formation (BIF) and magnetite resources
Source: Citi Monthly Iron Ore Update – Feb 2013
Company Overview March 2013
4

Cameroon-Congo iron belt
Company Overview March 2013
5

West Africa – the new Pilbara
• West Africa (including west central Africa) is emerging as the next significant iron ore
province.
• The region has attracted the attention of global majors and diversified miners.
• Iron ore is a significant contributor to diversified miners’ profits, making up to threequarters
of the earnings for Rio Tinto, BHP and Anglo American.
• Major diversified miners are attracted to the area due to the potentially large, high-grade
deposits with generally low processing costs and low impurities.
• African iron ore explorer-developers have significant growth potential with an aggregate
market cap of ̴US$4.0 billion compared to Fortescue with a market cap of US$16 billion.
• Consolidation/investment is a continuing theme in African iron ore.
– Hanlong’s US$1.42 billion revised bid for Sundance Resources (1 st tranche funding received ($5M)
– Afferro’s MOU with Korean steel producer Posco Africa (02.25.13) towards project-level
investment with intention to facilitate infrastructure and project development funding
– Shandong’s US$1.5 billion investment in the Tonkolili Project of African Minerals
• Given China’s goal to own 50% of all foreign iron ore resources that it imports by 2015, it is
likely that Chinese investment into the African iron sector will continue.
Company Overview March 2013
6

Characteristics of major iron ore districts
Pilbara
• Number, size and quality of deposits form major district
• Orebodies extend >200-300km in strike length
• 100Mt to >1Bt size potential
Company Overview March 2013
7

Characteristics of major iron ore districts
Carajás
• Hydrothermal replacement IOCG type deposits
• Primarily related to mafic/ultramafic layered complexes
• Massive iron oxide mineralization occurred during PaleoProterozoic era
Hamersley Basin
Pilbara – for comparison
Company Overview March 2013
8

Characteristics of major iron ore districts
After 5 years of exploration the Cameroon-Congo iron belt is already rivalling the Pilbara
Cameroon-Congo
Iron Belt
Company Overview March 2013
9

Characteristics of major iron ore districts
After 5 years of exploration the Cameroon-Congo iron belt
is already rivalling the Pilbara
Cameroon-Congo
Iron Belt
Company Overview March 2013
10

Targeting DSO in Cameroon
Phase 1 Geophysical Programme
• In April 2012, a 27,912 line km aeromagnetic survey * was completed over WAFM
permits by SA company New Resolution Geophysics. Results were interpreted by The
MSA Group.
• 30 discrete demagnetised zones were identified overlying magnetiteenriched
bedrock which are considered to represent potential DSO targets.
– 10 of these targets on Binga and Minko permits near the coast and close to planned port at
Kribi.
– 20 of these targets on the SE permits, of which 7 have geophysical signatures similar to the
Mbarga deposit on adjacent Mbalam permit of Sundance Resources.
– 2 of the largest anomalies on the Djadom and Lélé concessions are interpreted as
demagnetised, and therefore potentially hematite-rich areas, overlying the hinge zones of
large banded iron formations
– *Line specifications: 200x2,000m on Lélé, Dja, Djadom and 400x4,000m on Sanaga, Minko and Binga.
Company Overview March 2013
11

Binga aeromagnetics and drilling to date
Open
Open
Open
Open
Open
Open
WAFM has tested 20 km in total and identified three areas of
enrichment with 21 drill holes over 30% Fe
Company Overview March 2013
12

The Mbarga Extension
Magnetic Anomalies Appear to Continue onto Dja and Djadom
Apparent continuation of magnetic anomalies from Sundance Resources’
Mbarga resource eastwards onto Djadom/Dja permits
Company Overview March 2013
13

Phase 2 Exploration Programme
Phase 2 Exploration Underway at Djadom South – adjacent to Mbarga
Objective:
To verify the Phase 1 geophysical results and test for high tonnage potential hematite-DSO
• Comprising 400 to 500 shallow holes (an estimated 18,000 to 22,500 metres in total) of
Reverse Circulation (RC) drilling.
• Commenced at the Binga permit located close to the proposed deep water multi-user
port at Kribi.
• Currently focused on the large magnetic features in south-eastern Cameroon - Djadom
South permit adjacent to the Mbarga deposit.
• Results of this drilling to drive resource definition drilling programmes on the most
prospective targets in conjunction with a planned fixed wing gravity survey to better
define the thickest concentrations of hematite mineralisation.
Follow up by Phase 3 resource definition diamond core and RC drilling
towards defining a maiden resource in 2013
Company Overview March 2013
14

The South Djadom Target – just east of Mbarga
Company Overview March 2013
15

Gravity survey over large SE permits – Feb 2013
Gravity survey indicates large scale anomalies on Djadom & Lélé
• 5,000 line km fixed wing airborne gravity gradiometry survey (Falcon ) was flown over
portions of the Djadom and Lélé permits in late 2012.
• Interpretation by independent consultants confirmed numerous density anomalies coincident
with the previous aeromagnetic anomalies. These anomalies are seen as
regionally extensive BIF similar to that hosting the neighbouring Mbarga.
• To date, 52 reverse circulation percussion holes have been drilled in the southern part of
Djadom - 14 holes have intersected significant BIF horizons; of these, five have
intersected hematite-rich material.
• Several of these hematite-rich intersections are located within the priority density
targets defined by the gradiometry survey. Assay results for these intersections are
expected over the next month.
• As a result, about 5,000 metres of drilling covering about 98sqkm of combined gravity
and aeromagnetic anomalies in this area will be undertaken over the next two months.
These findings significantly enhance WAFM’s ability to prioritize & select drill targets
Company Overview March 2013
16

Djadom South
17

Initial assay results at Djadom South
Assay Results of first 42 holes
Minimum 30% Fe over 5 m
Incl. Minimum 50% Fe over 5m
Depth
Borehole from (m)
Depth to
(m)
Downhole
length (m) Fe % Al2O3 % P % S % SiO2 % LOI %
DRC025 10 21 11 45.2 4.5 0.08 0.01 23.9 6.0
DRC026 1 18 17 49.1 1.5 0.05 0.02 21.7 5.6
Incl. 6 12 6 52.2 0.9 0.05 0.02 17.5 6.0
DRC029 1 16 15 52.7 6.0 0.06 0.03 11.1 6.5
Incl. 4 10 6 57.7 3.8 0.07 0.02 7.0 6.0
DRC035 1 11 10 46.3 2.3 0.10 0.01 24.8 5.8
DRC037 0 10 10 50.3 7.5 0.06 0.02 13.5 6.1
Incl. 3 8 5 57.2 4.3 0.06 0.02 8.8 4.3
DRC038 1 9 8 52.1 7.6 0.05 0.02 12.4 4.5
Incl. 1 6 5 56.4 5.4 0.04 0.02 10.1 3.1
DRC045 0 19 19 49.9 6.6 0.06 0.02 16.5 4.5
Incl. 1 10 9 53.9 6.2 0.04 0.02 12.9 3.1
DRC046 0 23 23 48.0 5.8 0.06 0.02 18.9 5.4
Incl. 1 9 8 56.1 4.4 0.03 0.01 12.5 2.2
Company Overview March 2013
18

Djadom South Gravity Contrast
Company Overview March 2013
19

Cameroon infrastructure scheme
• 510 km rail line from Mbalam in
the east to Lolabe bulk ore port –
est. cost $4.7 Bil
• Lolabe will handle bulk iron-ore
carriers up to 300,000 deadweight
tons. Preliminary planning
commenced in 2011
• Kribi deepwater container port is
being developed by China
Harbour Engineering Company
Ltd. (CHEC)
• Sinohydro building 200 MW
Memve’ele hydropower project in
southern Cameroon on the Ntem
River
CAMEROON
The government declared the port ‘land for public utility’ in 2010, and the rail corridor in 2011
Company Overview March 2013
20

Why Cameroon?
• Cameroon has the largest and most diversified economy of the
6-nation Central African Economic & Monetary Community
• Strategically located at the point of entry-exit for sub-region
• China has been an important partner to Cameroon for 40 years
which is recently being strengthened
• Discovery of high grade hematitic material along the
Cameroon iron belt has opened up potential for significant
DSO production in Africa
• Government - Stable gov’t for >20 years; committed to infrastructure
development
• Economy - GDP growth of 4.2% to US$25.5 Bil in 2011; expected 5.1% in 2012
• Fiscal regime – Favourable mining code revisions to attract new investment;
fiscal incentives
Major Chinese funded infrastructure projects include Douala-Yaounde highway,
deepwater container port at Kribi, Lolabe bulk iron ore carrier port, and numerous hydro
and natural gas power plants including 200MW Memve’ele hydropower plant, roads,
proposed 510km rail line to Lolabe port.
Company Overview March 2013
21

WAFM Investment Strengths
Exposure to African iron ore
Strategically located assets
Successful management team
Strong Gov’t Support
Favorable long-term
outlook for iron ore
• West Africa is rapidly emerging as the next significant iron ore
province.
• Transactions include Hanlong’s US$1.4B bid for Sundance Res;
Afferro’s MOU with Korean steel producer Posco; Shandong’s
US$1.5B investment in African Minerals’ Tonkolili Project.
• Licence areas are located in close proximity to advanced iron ore
projects and are near existing/planned infrastructure.
• Some neighboring properties are valued in excess of US$1 billion.
• Experienced management team led by former senior executives at
Lonmin, BHP and UraMin.
• Cameroon Gov’t is committed to building port & rail infrastructure
• Bilateral treaty to protect foreign investors title rights
• The long term demand outlook for iron ore (principally by China)
remains attractive.
• High-cost Chinese production required to balance the market will
provide support for iron ore prices.
Company Overview March 2013
22

Key Takeaways
Rapidly emerging high grade
discovery associated with large
scale geophysical anomalies at
South Djadom
Potentially significant near
coastal mineralization at Binga.
Two major regional geophysical
targets at North Djadom and
Lele yet to be tested.
Company Overview March 2013
23