Finders Resources One2One Investor Presentation

Finders Resources One2One Investor Presentation

Finders Resources Limited


Proactive Investors August 2011


This presentation (Presentation) has been prepared by Finders Resources Limited (Finders) based on information available to it and from third party sources.

By retaining this Presentation, you (the Recipient) acknowledge and represent to Finders that you have read, understood and accepted the terms of this

Important Notice. If you do not accept these terms, you should immediately destroy or delete this Presentation.

This Presentation does not purport to contain all the information that a prospective investor may require in connection with any potential investment in Finders.

You should not treat the contents of this Presentation, or any information provided in connection with it, as financial advice, financial product advice or advice

relating to legal, taxation or investment matters.

No representation or warranty is made by Finders or any of its advisers, agents or employees as to the accuracy, completeness or reasonableness of the

information contained in this Presentation or provided in connection with it. No information contained in this Presentation or any other written or oral

communication in connection with it is, or shall be relied upon as, a promise or representation and no representation or warranty is made as to the accuracy or

attainability of any estimates, forecasts or projections set out in this Presentation. No liability will attach to Finders with respect to any such information,

estimates, forecasts or projections.

Finders does not accept responsibility or liability for any loss or damage suffered or incurred by you or any other person or entity however caused (including,

without limitation, negligence) relating in any way to this Presentation including, without limitation, the information contained in or provided in connection with it,

any errors or omissions from it however caused (including without limitation, where caused by third parties), lack of accuracy, completeness, currency or

reliability, or you or any other person or entity placing any reliance on this Presentation, its accuracy, completeness, currency or reliability.

Finders does not accept any responsibility to inform you of any matter arising or coming to Finders' notice after the date of this Presentation which may affect

any matter referred to in this Presentation. Any liability of Finders, their advisers, agents and employees to you or to any other person or entity arising out of

this Presentation including pursuant to the Australian Securities and Investments Commission Act 2001, Corporations Act 2001, Part IVA or V (including

sections 51AA, 51AB, 51AC, 52 or 53) of the Trade Practices Act 1974 or any corresponding provision of any state or territory legislation, or similar provision

under any applicable law is, to the maximum extent permitted by law, expressly disclaimed and excluded.

The distribution of this Presentation may be restricted by law in certain jurisdictions. Recipients and any other persons who come into possession of this

Presentation must inform themselves about, and observe any such restrictions.

Future matters:

This Presentation contains reference to certain intentions, expectations, future plans, strategy and prospects of Finders. Those intentions, expectations, future

plans, strategy and prospects may or may not be achieved. They are based on certain assumptions, which may not be met or on which views may differ and

may be affected by known and unknown risks. The performance and operations of Finders may be influenced by a number of factors, many of which are

outside the control of Finders. No representation or warranty, express or implied, is made by Finders, or any of its directors, officers, employees, advisers or

agents that any intentions, expectations or plans will be achieved either totally or partially or that any particular rate of return will be achieved

Given the risks and uncertainties that may cause Finders' actual future results, performance or achievements to be materially different from those expected,

planned or intended, Recipients should not place undue reliance on these intentions, expectations, future plans, strategy and prospects. Finders does not

warrant or represent that the actual results, performance or achievements will be as expected, planned or intended.


Investment Overview (ASX:FND)

Undervalued investment opportunity with significant potential

• Market Cap >50% discount to Wetar NPV

Strong project economics, low costs, high projected cash flows

• EBITDA @ $7000/tonne copper exceeds current market


High grade copper resource with low strip ratios

Significant upside potential in grade, recoveries, resources

Indonesian-based exec team with local contacts & experience

Funding progressing, banks mandated

Construction to commence Q4, full production 2013

Ojolali: highly prospective gold-silver opportunity

Copper has strong fundamentals, few near- term producers


Corporate Overview (ASX:FND)

Market Capitalisation ~$120m

Broker Coverage

Shareholder Register






Mark Savich

Martin Potts

John Macdonald

Vince Pisani

Anna Kassianos

Resource Capital Fund


(11.7% diluted)

Acorn Capital Ltd 10.9%

Straits Resources Ltd 10.8%

Taurus Resources 9.7%

Lujeta Pty Ltd 5.6%




FND Share Price Performance Last 12 Months




Supportive, expert cornerstone investors

Indonesia – Asia’s premier mining location

Active advanced projects and world class mines Au/Cu mines


Mt Muro

G. Pani

Toka Tindung









Awak Mas

Ojolali Gold

Silver Project Tujuh Bukit Batu



Wetar Copper



World class mineral province – New Mining Law 2009


Wetar Copper Project .


Wetar Copper Project - Background

Resource discovered by CSR Minerals (Russell Fountain)

Sold to Billiton who developed gold mine

• Developed existing port, road and camp infrastructure

• Chris Farmer, exploration geologist

Billiton lease ended in 2004, claimed by Finders

Less than 6km by established haul road from port

Key Finders executives have been involved with Wetar since 1980s


Reserves - Bankable Feasibility Study

High grade JORC mining reserves at surface

• Strip ratio 0.95

(0.5% Cu Cut-off) Category Tonnes (m) Grade % Cu


Copper (kt)

FND 95%

Kali Kuning Pit Proved 4.91 2.5 123 117

Probable 0.85 2.2 19 18

Sub-Total 5.76 2.5 142 135

Lerokis Pit Proved 2.05 2.4 49 47

Probable 0.37 2.3 9 9

Sub-Total 2.42 2.4 58 55

Combined Proved 6.96 2.5 172 163

Probable 1.22 2.2 28 27

Total 8.18 2.5 200 190

JORC Reserves support a 9.2 year mine life


Development Plan - recap

Demonstration Plant

Expanded Demo

Plant: 7,000 tpa

Whim Creek Plant:

25,000 tpa


• +2,500 t of LME Grade A

cathode sold at premium

• Leach parameters optimised

resulting in +80% Cu recovery

• All operational aspects verified

from mining to marketing

Key points

• Brownfield expansion of

existing demonstration plant


• Faster route to profitable

copper production

• Takes FND to cash positive

Key Points

• Optimises mine economics

• Construction starts in parallel

• Reduces production risk

• Reduces hedging risk


Q4 2011*


Q3 2012*

Whim Ck

Q2 2013*

25,000 tpa

* Note for timing

Assumes conversions complete by Q3 2011 and project finance in place

Staged development path de-risks the transition to full-scale production


Wetar Layout – Kali Kuning

Main expansion:

Whim Creek plant

and leach pads

Kali Kuning Test Pit

Leach Pad


Gold Pit

Leach Pad

EDP Expansion

Demo SX-EW Plant

Solution Ponds

Environmental Ponds

Stepwise increase in production to 25,000tpa requires waste rock platform


Demonstration Plant

Commercial height heaps, no scale-up issues

SX-EW technology is modular, extra capacity is derived from tanks and power


Wetar - Economic Overview

BFS June 2011

Ore Reserves 1

8.2 MT

Strip Ratio 0.95

Initial Mine Life

9.2 years

Ave Cu Grade 2.5%

Ave Cu Recovery 75%

Cathode Production Capacity

25,000 tpa

LoM Production

150,000 tonnes

Capital Costs (incl. $17m acc.


Operating Cash Cost – LoM 2



Copper Price Sensitivity – Based on BFS

Flat LOM Copper Price ($/t)

Price Case Base 3 $6,000 $7,000 $8,000 $9,000 $10,000

LOM Cash Surplus (US$m) 525 295 408 518 627 737

Project NPV (US$m) 304 143 216 287 359 430

Project IRR 62% 32% 42% 51% 60% 69%

Payback Period (Years) 0.9 1.6 1.3 1.1 0.9 0.8


1. Excludes 0.2mt of Inferred Resources within the pit shell.

2. Excludes royalty (4%), head office costs and marketing expenses (nil net of sales premium)

3. Assumes copper pricing based on the Comex forward curve as at 16 June and then reversion to a long term real price of US$2.50 / lb by 2017

Finders trades at a significant discount to NPV


EBITDA / Capex US$m











Cashflow at Various Copper Prices








US$10,000 / tonne

US$9,000 / tonne

US$8,000 / tonne

US$7,000 / tonne

US$6,000 / tonne

Capital Costs

FND Mkt Cap



Full year EBITDA exceeds current market cap at $7,000/tonne Cu


Sensitivity Analysis

Grades/recoveries could add $40m+ to NPV

Production +1 Yr

WACC (+/- 2%)

Opex (+/- 10%)

Capex (+/- 10%)

Fuel Price (+/- 10%)

Indonesian Rupiah (+/- 10%)

(40,000) (30,000) (20,000) (10,000) - 10,000 20,000 30,000 40,000 50,000



Project is not overly sensitive to movements in costs


Financing Status

Standard, Credit Suisse, Barclays mandated in July

• $138m in facilities including $20m cost overrun facility

• Require 20,000 tonnes hedging life of mine

• Targeting credit approval in Sep/Oct

Investigating a range of equity alternatives

• Mezzanine, converts, offtake-linked financing, placement and rights



Team in Place

Dr Russell Fountain


Dr Chris Farmer

(Managing Director)

Rob Thomson


James Wentworth

(Finance Director)

Bob Sowter

(Wetar General Manager)

Chris Allwood

(Project Manager)

Darren Holmes


Daniel Tarrant


Greg Brown

(Contracts & Logistics)

The Demo Plant Crew


Over 40 years of international experience in all aspects of mineral exploration, project feasibility and

development of mining projects. Previous senior positions include President, Phelps Dodge

Exploration Corporation; Exploration Manager, Nord Pacific Limited and Chief Geologist, CSR Minerals.

20 years of international experience, Phelps Dodge and Senior Geologist Billiton Indonesia BV. Chris

has lived in Jakarta since 1991.

Over 30 years of Australian and international mining experience including 5 Asian development projects

in the last 13 years. CEO Climax Mining Limited and Asian Mineral Resources Limited.

More than 17 years of finance and investment experience with a focus on mining and mining services in

Australia and internationally. Non-Executive Director of Mastermyne (ASX:MYE).

Civil engineer and Chartered Professional Engineer. More than 45 years experience building and

operating mines in Indonesian, Asia and Africa.

More than 30 years of multi-disciplinary projects. Recent experience includes Principal’s

Representative for Straits at Sebuku and Owners Projects Manager at Minara.

Over 10 years copper SX-EW experience, including commissioning the Lady Annie, Browns Oxide and

Leichardt plants.

Daniel has 11 years experience of copper SX-EW in a range of metallurgical and operations positions

at PPM Solutions, Birla, Lady Annie, Mt Gordon, Young Australia.

Materials and Logistics Manager for the Ambatovy Nickel Project, President Director for Linfox Logistics

in Indonesia for 7 years.

Successfully built, commissioned and operated the demonstration plant at Wetar. Highly experienced

Indonesian nationals with previous experience on major construction projects and mining operations

throughout Indonesia. Ably supported by local crew who have shown tremendous progress in the past

two years.


Strong Local Community Support

Community relationships with FND management extend back to

previous mining of the original gold pit by Billiton .

Completed compensation and access agreements.

Local employment priority. ~125 people (almost 100% of workable age


Yayasan (social charity) for each village. Initial focus: foods supply,

sustainable projects, health and skills training.


Mine Site - Resources Upside


• Potential

0.5-1.5Mt @

1.5-3% Cu

• Gold cap potential

Au eq. 50-100k oz


• Strong EM

conductors under

cover sequence

Meron potential extra 1-2 years production; exploration to recommence


Exploration upside

South coast tenements remain under explored

Kali Kuning &



Potential size

0.5-1.5mt @ 1-3%

Pantai Merah

Au-barite resource

One hole in copper

Batu Duri

9 drill holes, incl.

10m @ 4.5% Cu


8 drill holes in gold

cap only

25 km

Similar systems explored for gold cap by Billiton



Mining Permits issued 9 June 2011

Forestry rezoning almost complete

• Will occur no later than December

Forestry permit application also lodged

Subsidiary permits also in progress

Local government see the Wetar Project as a key for regional development


Key Milestones *

Final Permits/Conversion


: Q3

Bank Mandate : Q3 2011

Construction : Q4 2011

Expanded demo plant (7,000tpa) : Q3 2012

Main plant (25,000tpa total) : Q2 2013

• Incorporates the Whim Creek plant

* All timelines subject to permitting and financing


Ojolali Project – FND 72% with option

13km 2 mineral district

Sumatran Gold Belt

• Matarbe, Lebong Donok, Lebong Tandai,

Pongkor, Cibalung, Way Linggo

Jambi oxide gold – 175koz


• High grade Au/Ag intercepts open at depth

Numerous targets

• Bulk low grade disseminated Au (Jambi N&S,


• Bonanza grade Au, Ag (Way Neki, Batu

Kuning, Kencur)

• High grade supergene Ag (Tambang, Jambi)

• Feeder structures at depth (Tambang, Talang


1m oz + Au potential in established gold district



175k oz Au at surface with depth potential

Leach test results encouraging

Potential seed project to underwrite further exploration


Beyond Wetar

FND will evaluate follow-on projects with growth potential

• Ojolali

• Pyrite roasting on Wetar – gold/silver/copper/acid

FND will seek to lever its expertise

• Massive sulphide leaching know-how

• Asian experience and presence

Management team has history of discovery and project development


Investment Overview (ASX:FND)

Undervalued investment opportunity with significant potential

• Market Cap>50% discount to Wetar NPV

Strong project economics, low costs, high projected cash


• EBITDA @ $7000/tonne copper exceeds current market


High grade copper resource with low strip ratios

Significant upside potential in grade, recoveries, resources

Indonesian-based exec team with local contacts &


Funding progressing, banks mandated

Construction to commence Q4, full production 2013

Ojolali: highly prospective gold-silver opportunity

Copper has strong fundamentals, few near- term producers



The information in this report that relates to exploration potential, mineral resource and ore reserve estimation is the responsibility of Dr Russell

Fountain. Dr Fountain is a Director of Finders and a Fellow of the Australian Institute of Geoscientists. Dr Fountain has sufficient experience that is

relevant to the styles of mineralisation and types of deposits under consideration and to the activity that he is undertaking to qualify as Competent

Person in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’ (JORC Code) and as a

Qualified Person as defined in the AIM Rules. He consents to the inclusion in this report of the matters based on his information in the form and context

in which they appear. All assaying of drill core samples was undertaken by the ITS laboratory in Jakarta. ITS is one of the world’s largest product and

commodity testing, inspection and certification organizations. The Jakarta laboratory is ISO 17025 accredited and employs a Laboratory Information

Management System (LIMS) for sample tracking, quality control and reporting.


SX-EW Process

SX-EW technology is used to produce ~22% of the world’s copper production


Project Layout for Full Scale Production

Future Airstrip

Camp & Port



Main Plant &


Expanded Demo

Plant Operations

Kali Kuning



1 km


US$ / lb Cu

Copper projects in the future

Operating costs (C3*) for new copper projects globally




BFS Wetar Project


Source: Brook Hunt

*C3 costs include royalty, depreciation, corporate overheads, funding costs (assuming 70% debt)

The Wetar project is well positioned against new production


Grade & Recovery Upside

Predicted 10-30% grade uplift in Breccia unit (25% KK resource)

Recoveries better in Heap 3: 80% copper recovery

Potentially an extra years production (25,000t)

A 17% increase above DFS base case LOM production



Old Mining Area

Kali Kuning - Meron

Old Mining Area


Conversion Production Forest

Open Ground

Production Forest

Production Forest

Re-zoning implications

Kali Kuning and Meron deposits in open ground

Part of Lerokis requires forestry permit

• Available

‣ ~890,000t @ 3.4%Cu

• Requiring permit



‣ 4 hectares

‣ Not mined until 2015

‣ ~18.5kt cathode

Production forest area

Re-zoning expected in 2011, final stages of verification


More magazines by this user
Similar magazines