Investor Presentation - Proactive Investors

Investor Presentation – January 2013 - Iron Ore and Manganese 

Development in Africa

Iron ore and manganese development in Africa 

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2


Corporate Overview 

PROFILE 

AIM quoted iron ore („Fe‟) and manganese („Mn‟‟) development company focussed 

in Africa 

PROJECTS 

Iron Ore: Mebaga, Gabon & Malelane, South Africa Manganese: Nayega, Togo & 

Leinster, South Africa 

STRATEGY 

To advance low capex deposits which offer significant value uplift potential through 

resource delineation, into production 

VALUE 

Milestone driven development programmes targeting near term production and 

cashflow 

Reviewing synergistic acquisition opportunities 

3


Key Data 

MARKET 

TICKER 

AIM 

FRX 

12 MONTH HIGH/LOW 4.25p / 1.505p 

SHARES IN ISSUE 634,311, 908* 

SHARE PRICE 2.175p (11.01.13) 

MARKET CAP £13.8m (11.01.13) 

NOMAD 

BROKER 

finnCap 

finnCap 

* 40m shares conditional on the sale of 17% in Ressources Equatoriales 

Shareholder Analysis 

16.45% 

Shareholders >15% 

Share Price 

35.67% 

12.93% 

Shareholders 10%15% 

Shareholders 5%10% 

15.97% 

Directors‟ Shareholdings 

18.98% 

Shareholders 2.5%5% 

Shareholders 0%2.5% 

Dave Reeves 15.91% 

Roy Pitchford 12.31% 

Russell Lamming 6.61% 

Brian Moritz 2.10% 

James Carter 0.44% 

Total 37.36% 

4


Proven Track Record in Africa 

“The Board has a proven record of building value for shareholders through developing assets into 

production and successfully completing trade sales” 

Feasibility Studies Completed and Mines Developed 

• Eureka Gold Mine, Zimbabwe – 1.8mtpa (Delta Gold) 

• Ngezi Platinum Mine, Zimbabwe – 2.2mtpa (Zimplats) 

• Leeuwkop Platinum Mine, South Africa – commenced development before takeover (Afplats) 

• Stellite Chrome Mine – South Africa - 480,000 tpa (Chromex) 

Company Trade Sales 

• Zimplats (ASX) – c.US$400m (D Reeves, R Pitchford) 

• Afplats (AIM) – c.US$600m (D Reeves, R Lamming, B Moritz, R Pitchford,) 

• Chromex (AIM) – c.US$50m (R Lamming, B Moritz) 

● MD - Dave Reeves ● Chairman - Brian Moritz ● Finance Director James Carter 

● Non Exec Director - Russell Lamming ● Non Exec Director - Roy Pitchford ● 

5


Market & Demand 

• Iron ore and manganese are the two main 

ingredients in steel making 

• BHP Billiton, Rio Tinto and Vale currently 

control 75% of the seaborne iron ore 

trade 

• Long term iron ore demand and price is 

supported by: 

• Demand growth driven from China 

• Rising capital intensity 

• Replacement of higher cost Chinese 

production 

• Manganese price currently 

US$5.40/dmtu (46% Mn CIF China)* 

• Iron Ore spot price currently US$158/t 

(62% Fe CIF China)** 

* Source Ferroalloy.net 

** Source Thomson Reuters 

6


Corporate Structure 

* 

*Subject to completion of purchase of 17% 

7


Mebaga DSO Iron Ore Project - Gabon 

Land Position 

309 sq km 

82 per cent. Holding* 

High Grade Zone 

1.8km strike 

Identified by historical work by 

BRGM 

DSO Grade 

20Mt @ 60% Fe 

„Exploration Target‟ 

bBSO Grade 

50Mt @ 47% Fe 

„Exploration Target‟ 

Proximity to Infrastructure 

30km to sealed highway 

200km to working rail 

Rail delivers to deep water port 

*Subject to completion of purchase of 17% 

8


Mebaga Iron Ore – Development Programme 

• Fast tracked exploration plan to drill out 

high grade iron ore resources 

• Geophysical data (aeromagnetic and 

radiometric) to be bought and processed 

• Reconnaissance and detailed geological 

mapping of the BIF trend is underway 

• Drilling programme planned to delineate 

JORC resources in H2 2013 

• Two infrastructure solutions: 

• Rail 182km to Port of Owendo on trans 

Gabon, currently exporting 3.5Mtpa of 

manganese 

• Barge 300km to Port Gentil along the 

Oougue River 

9


Mebaga Iron Ore Peer Comparison 

Company Exchange Location Comments Resource/ 

Exploration Target 

Market Cap 

(GBP)* 

EV/t 

Contained Fe 

(GBP) 

BC Iron ASX Australia In Production 

@ 4 mtpa 

81mt @ 54% 286 million 6.55 

African iron Republic of Congo Takeover 2012, PFS 55mt @ 55% 220 million 7.26 

Western Desert 

Resources 

ASX Australia (NT) Planning 3mtpa, late 

2013 

32mt @57% 157 million 8.63 

Territory Iron Australia (NT) Takeover 2011, 

2mtpa 

9mt @ 58% 112 million 20.77 

Mebaga AIM Gabon Commencing 

Resource Work 

20mt @ 60% 12million 1.00** 

* As of 8 January 2013 

** Assuming the exploration target is converted to a resource 

10


Nayega Manganese Project - Togo 

Land Position 

92,390 ha 

5 exploration licences in 

northern Togo 

Low Capex 

US$15m 

Initial estimate for 250,000 

tpa production 

Indicated Resource 

7.3Mt @ 14.7% 

Mn 

Low Opex 

US$2/dmtu FOB 

Initial estimate for 250,000 

tpa production 

Bankable Study 

H1 2013 

Development 

H2 2013 

Towards Production 

11


Nayega Manganese Project - Togo 

Fast-tracking to Development 

• Focussed on developing an open pit, zero 

strip mining operation 

• Simple beneficiation route using washing, 

screening and gravity 

• Good road access to Lome Port (600km 

away and undergoing USD50m expansion 

for third container port). Backloading of 

350,000 tpa available (US AID) 

• Undertaking a Definitive Feasibility Study 

with a view to completing in H1 2013 

• Exploitation permit application submitted 

• Regional evaluation has delineated 

additional targets for Mn mineralisation to 

increase resource 

12


Malelane Iron Ore Project – South Africa 

Inferred Resource 

139Mt @ 37% Fe 

Modelled on 1.1km of 14km 

Exploration Target 

775 - 930Mt 

34 – 36% Fe 

NPV US$523m (10%) 

IRR of 72% 

(pre tax) 

CAPEX US$139m 

& 

OPEX US$53.5/t FOB 

Proximity to Infrastructure 

6km and 170km 

From rail and deep water port of Maputo respectively 

13


Malelane Scoping Study Results & Development 

Project Upside 

• Starter DSO operation 

Scoping Study Economics 

Physicals 

Pre-Feasibility Study 

• NPV @10% - 523USD m (pre-tax) 

• IRR 72% (pre-tax) 

• Capital Cost USD139m 

• Capital Intensity USD77/t 

• Operating Cost USD53.5/t FOB 

• Revenue USD 95/t FOB 

• Payback 1.9 years 

• 1.8mtpa output of iron ore fines, LOM16.6 years 

• Conventional open pit mining, strip ratio 1.55:1 

• Process plant crush and HPGR to 6mm, gravity separation 

• Concentrate conveyed to rail siding 6km away 

• Build a rapid load out station for rail loading at existing siding 

• Rail to Port of Maputo approx 170km. Requires port expansion 

to 20mtpa to free up capacity in the existing loading area. 

• Drill programme and preliminary metallurgical 

testwork confirmed potential for low capex iron-ore 

development at Malelane 

• Further detailed geological mapping of the Spago 

ridge by structural geological consultant completed to 

aid drill targeting to update the resource 

• Environmental Studies and Social and Labour Plan 

drafting has commenced in preparation for a mining 

licence application 

• Positive preliminary metallurgical testwork - very 

coarse grind size is optimal for pre-concentration to 

57% Fe 

• Pre-feasibility drilling to commence at end of wet 

season for upgraded resource and confirmatory met 

testwork 

• Pre-feasibility study to be complete 2013 

15


Malelane Capital Intensity 

Adriana Lac Otelnuk 

Grange Resources Southdown 

Gindalbie Karara 

BHP Billiton Outer harbour expansion 

Macarthur Minerals Lake Giles 

Aquila West Pilbara 

Black Iron Shymanivske 

ArcelorMittal Mont Wright 

Oceanic Hopes Advance 

New Millenium KeMag and LabMag 

Northland Resources Hannukainen 

BHP Billiton Inner harbour expansion 

Rio Tinto Pilbara expansion 

Northland Resources Kaunisvaara 

Rio Tinto Simandou 

Champion Fire Lake North 

Alderon Kami 

Sundance Mbalam 

ArcelorMittal Liberia project phase I&II 

Northern Iron Sydvarangar Expansion 

IOC Carol Lake 

London Mining Marampa 

Fortescue Pilbara expansion 

Atlas Iron McPhee Ck/SE Pilbara 

Cliffs Bloom Lake phaseII 

Malelane 

African Minerals Tonkolili Phase I 

Atlas Iron North Pilbara 

Macarthur Minerals Ularring 

Mt. Gibson Extension Hill 

*Source Macquarie March 2012 

$0 $50 $100 $150 $200 $250 $300 

16


Additional Projects 

Leinster Manganese – South Africa 

Applications 

• One further Gabon DSO iron 

application, similar size to Mebaga and 

well positioned to shipping. Previously 

explored. 

Land position of 47,004 ha over 10 farms 

20km from Aquila's Avontuur Project (147.8Mt @ 38.2% Mn) 

• Two South African potential DSO iron 

projects located near to existing 

Malelane Project 

Anglo American drilled 51 holes (1977-1988) 

Exploration target 5.5 -8.7Mt @28.6 – 31.3% Mn (Coffey Mining) 

Known deposit open in all directions & historical data secured 

Aeromag survey completed – drilling planned 

17


Portfolio - Key Milestones 

Completed Milestones 2012 

2013 Value Drivers 

• Nayega Manganese Project – Togo 

Resource defined 7.3Mt at 14.7% 

Positive economics calculated – low capex and 

opex 

Met test work undertaken 

• Malelane Iron ore Project – South Africa 

Resource defined – 139Mt at 36.9% 

Scoping study completed with excellent 

economics 

Further resource programmes underway 

• Secured new DSO project - Gabon 

 

 

Secured project with an exploration target of 

20Mt at 60% 

Proximity to infrastructure with access to 

regional ports 

• Nayega Manganese Project – Togo 

• Secure exploitation permit 

• Complete Definitive Feasibility study H1 2013 

• Fast-track to mine development H2 2013 

• Malelane Iron ore Project – South Africa 

• Increase and upgrade resource 

• Complete environmental study 

• Pre-feasibility H2 2013 

• Mebaga DSO project – Gabon 

• Define a maiden DSO resource 

• Fast track to Scoping Study status by Q4 2013 

• Continued evaluation of synergistic 

opportunities in Africa 

• Complement low-capex/ near to 

infrastructure/early production investment 

criteria 

18


Development Summary 

Establishing its position as a leading low-capex iron ore and manganese exploration 

and development company with near-term production potential in Africa 

Nayega 

Togo 

Early cashflow to fund and develop iron ore portfolio in 

Africa 

Mebaga 

Gabon 

Proximity to infrastructure potentially enabling rapid 

development to exploit DSO resource potential 

Malelane 

South 

Africa 

Strong economics - robust NPV, IRR and low capital 

intensity (first quartile of iron ore projects globally) 

19


Contacts 

Dave Reeves 

Ferrex PLC 

Felicity Edwards/ 

Elisabeth Cowell 

St Brides 

Email: dave@ferrexplc.com 

Email: felicity@sbmf.co.uk 

elisabeth@sbmf.co.uk 

T: +44 (0)207 236 1177 

Elizabeth Johnson/ Joanna Weaving 

FinnCap Limited 

T: +44 (0)20 7220 0500 

20


Appendix - Board 

Brian Moritz 

Non-Executive Chairman 

Dave Reeves 

Managing Director 

James Carter 

Finance Director 

Roy Pitchford 

Non-Executive Director 

Russell Lamming 

Non-Executive Director 

Brian is a Chartered Accountant and former Senior Partner of Grant Thornton, London. He formed Grant 

Thornton’s Capital Markets Team which floated over 100 companies on AIM under his chairmanship. In 1995 he 

retired from Grant Thornton to concentrate on bringing new companies to the market as a director. He 

concentrates on mining companies, primarily in Africa, and was formerly chairman of African Platinum PLC 

(Afplats) and Metal Bulletin PLC as well as currently being chairman of several junior mining companies. 

Dave holds a first class honours degree in mining engineering from the University of New South Wales, a graduate 

diploma in applied finance and investment from the Securities Institute of Australia, and a Western Australian first 

class mine managers certificate of competency. He has spent the last 14 years operating in Africa including 

Zimbabwe Platinum Mines Ltd (Zimplats) and Afplats. He is a non-executive director of ASX company Minbos 

Resources. 

James is a CPA with 17 years experience in the mining industry. James was most recently CFO of Straits 

Resources, a diversified metals group listed on the ASX. Prior to this James was CFO and Company Secretary of 

SGX listed Straits Asia Resources and was integral to its development as a 10 million tonne per annum coal 

producer in Indonesia. His work at Straits included debt and equity capital markets, tax strategy, M&A and 

corporate governance. James was involved with equity and debt capital markets raisings of $2 billion in the last 5 

years. James is a board member of Worldwide Energy, an aspiring Indonesian coal company and PTT Asia Pacific 

Mining. 

Roy, a Charted Accountant, has more than 25 years senior management and executive experience. Previously 

CEO of Cluff Resources Zimbabwe Ltd, Delta Gold Zimbabwe (Pvt) Ltd, Zimplats, Afplats and African Minerals Ltd. 

Roy currently sits on numerous public and private mining companies‟ boards. 

Russell Lamming is a qualified geologist with an honours degree in geology from the University of the 

Witwatersrand and a Bachelor of Commerce in Economics from the University of Natal. Russell has a broad range 

of experience including directorship of a South African mining consultancy and precious metals analyst for a 

leading international broker. Russell led the commercial process at Afplats and was most recently CEO of AIM 

listed Chromex Mining, which was bought in 2010 at a significant premium to its listing price. He is currently MD 

of GoldPlat. 

21


Appendix - Management Team 

Mark Styles 

Exploration Manager 

Justin Longley 

General Manager, West 

Africa 

Gus Simbanegavi 

General Manager, South 

Africa 

Mark is a geologist with a first class honours degree obtained from the University of Western 

Australia and 20 years experience in exploration and project management worldwide. His 

experience covers a range of precious metals, base metals and industrial minerals in 

Australia, Saudi Arabia, Tanzania, South Africa, Canada and Mexico, where he was country 

manager for ASX-listed explorer Azure Minerals Limited. In 2008, Mark established a 

geological consulting company specialising in property evaluation, target identification and 

exploration management with Cliffs Asia Pacific Iron Ore as a major client. 

Justin holds a an honours degree in geology from University College London, and an MBA from 

Imperial College London. For over 20 years he has worked throughout Africa to identify and 

develop mineral resources, bring mines into production, and generally realise commercial 

opportunities. Justin has served as senior management for Diamondworks in Angola, Oryx 

Natural Resources in the DRC, and Mukuba Resources in Zambia. He has also led the 

turnaround of poorly performing businesses on behalf of Barclays Bank in Kenya. 

Gus is a mining engineer who has worked his whole career in Southern Africa. He has 

developed gold mines in Zimbabwe and was a Mine Manager for Zimplats at their platinum 

operation in Zimbabwe. Most recently Gus was General Manager Operations for Aquarius 

Platinum and has a wealth of open pit and underground experience. 

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