The Hillside Project: Australia's Next Great Copper ... - SA Explorers
The Hillside Project: Australia's Next Great Copper ... - SA Explorers
The Hillside Project: Australia's Next Great Copper ... - SA Explorers
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Investor Presentati on<br />
AUSTRALIA’S S NEXT GREAT COPPER PROJECT<br />
HILLSIDE: SOUTH AUSTRALIA<br />
January 10, 2013
DISCLAIMER<br />
Inves stor Pre esentati on<br />
January 10 0, 2013<br />
<strong>The</strong> presentation ti (in this projected form and as verbally presented) (“Presentation”) ti is provided d on the basis that t none of the<br />
Company nor its respective officers, shareholders, related bodies corporate, partners, affiliates, employees, representatives and<br />
advisers make any representation or warranty (express or implied) as to the accuracy, reliability, relevance or completeness of the<br />
material contained in the Presentation and nothing contained in the Presentation is, or may be relied upon as a promise,<br />
representation or warranty, whether as to the past or the future. <strong>The</strong> Company herby excludes all warranties that can be excluded by<br />
law.<br />
<strong>The</strong> Presentation contains prospective financial material which is predictive in nature and may be affected by inaccurate assumptions<br />
or by known or unknown risks and uncertainties and may differ materially from results ultimately achieved.<br />
<strong>The</strong> Presentation contains “forward-looking statements”. All statements other than those of historical facts included in the<br />
Presentation are forward-looking statements. Where the Company expresses or implies an expectation or belief as to future events or<br />
results, such expectation or belief is expressed in good faith and believed to have a reasonable basis. However, forward-looking<br />
statements are subject to risks, uncertainties and other factors, which could cause actual results to differ materially from future<br />
results expressed, projected or implied by such forward-looking statements. Such risks include, but are not limited to, copper and<br />
other metals price volatility, currency fluctuations, increased production costs and variances in ore grade or recovery rates from<br />
those assumed in mining plans, as well as political and operational risks and governmental regulation and judicial outcomes. <strong>The</strong><br />
Company does not undertake any obligation to release publicly any revisions to any “forward-looking statement”.<br />
<strong>The</strong> Presentation contains general background information about the Company and its activities current as at the date of this<br />
presentation, 31 October 2012. <strong>The</strong> information in this Presentation is in summary form only and does not contain all the information<br />
necessary to fully evaluate any transaction or investment. It should be read in conjunction with the Company’s other periodic and<br />
continuous disclosure announcements lodged with the ASX, which are available at www.asx.com.au and other publicly available<br />
information on the Company available at www.rexminerals.com.au.<br />
<strong>The</strong> Presentation does not constitute an offer, invitation or recommendation to subscribe for or purchase any security and does not<br />
form the basis of any contract or commitment. <strong>The</strong> Presentation, the entitlement offer and the contracts formed on acceptance of the<br />
relevant applications are governed by the laws applicable in Victoria, Australia. Each person who applies for new shares submits to<br />
the jurisdiction of the courts of Victoria, Australia.<br />
All persons should consider seeking appropriate professional advice in reviewing the Presentation and the Company.<br />
<strong>The</strong> information in this presentation that relates to Exploration Results, Mineral Resources and Exploration Potential is based on<br />
information compiled by Mr Patrick Say. Mr Say is an employee of Rex Minerals Ltd, is a member of the Australian Institute of Mining<br />
and Metallurgy and is a Competent Person under the definition of the 2004 JORC Code. <strong>The</strong> Exploration Potential and Exploration<br />
Targets described in this Presentation is conceptual in nature, and there is insufficient information to establish whether further<br />
exploration will result in the determination of a Mineral Resource. Mr Say consents to the publication of this information in the form<br />
and content in which it appears.<br />
2
HILLSIDE PFS SUMMARY<br />
PFS Results Overvi iew<br />
January 10, 2013<br />
Annual production (>100kt CuEq)<br />
70kt<br />
50koz<br />
1.2Mt<br />
<strong>Copper</strong> Gold Iron Ore<br />
Australia’s largest undeveloped copper project<br />
Mine Life<br />
15+ years<br />
Cash Costs C1 costs ~US$1.2/lb<br />
Strong Margins<br />
Base case EBITDA of A$240M and<br />
potential for >A$380M<br />
Value Creation Effective financing is the key to<br />
unlocking the value at <strong>Hillside</strong><br />
3 AUSTRALIA’S NEXT GREAT COPPER PROJECT. HILLSIDE: SOUTH AUSTRALIA
ABOUT COPPER<br />
Corp<br />
30000<br />
Top 40 <strong>Copper</strong> <strong>Project</strong>s World Wide<br />
(after Goldman Sachs report, March 2012)<br />
orate an nd Over rview<br />
Ca apital Cos st US$/t<br />
25000<br />
20000<br />
15000<br />
10000<br />
Lower Capital c ost<br />
Top 40 Cu<br />
<strong>Project</strong>s<br />
<strong>Hillside</strong><br />
5000<br />
<strong>Hillside</strong> PFS<br />
January 10, 2013<br />
4<br />
Lower Operating Costs<br />
0<br />
$0.80 $1.00 $1.20 $1.40 $1.60 $1.80 $2.00 $2.20 $2.40<br />
Cash Cost US$/lb<br />
* Derived from: Goldman Sachs report, March 2012
ABOUT COPPER<br />
Corp orate and Over rview<br />
<strong>The</strong> world needs an estimated US$150 billion of new capital to deliver<br />
over 10Mtpa of new copper production by 2025.<br />
New mine supply?<br />
Existing mine supply<br />
January 10, 2013<br />
5 *BASED ON DATA SOURCED FROM CRU AND GOLDMAN <strong>SA</strong>CHS, MARCH 2012
Corporate a nd Ove erview<br />
1 > Corporate and Overview<br />
2 > <strong>Hillside</strong> <strong>Project</strong><br />
3 > Model and Economics<br />
January 10, 2013<br />
4 > Regional Potential<br />
6 AUSTRALIA’S NEXT GREAT COPPER PROJECT. HILLSIDE: SOUTH AUSTRALIA
CAPITAL STRUCTURE<br />
Corp orate and Over rview<br />
January 10, 2013<br />
<strong>Hillside</strong>id <strong>Copper</strong> <strong>Project</strong>, Sth Aust<br />
2Mt<br />
1.7Moz<br />
44Mt<br />
<strong>Copper</strong> Gold Iron Ore Fe<br />
Market Information<br />
ASX code RXM<br />
Shares<br />
188.9 million + 6.4m options<br />
Mkt Capitalisaton ~A$150 million<br />
Cash at Bank A$59.2 million at 30/9/2012<br />
7 AUSTRALIA’S NEXT GREAT COPPER PROJECT. HILLSIDE: SOUTH AUSTRALIA
THE TEAM<br />
Corp orate an nd Over rview<br />
January 10, 2013<br />
Directors<br />
Paul Chapman<br />
Non Executive Chairman<br />
Mark Parry<br />
Managing Director<br />
Steven Olsen<br />
Executive Director<br />
Richard Laufmann<br />
Non Executive Director<br />
Alister Maitland<br />
Non Executive Director<br />
Management Team<br />
Patrick Say<br />
Chief Geologist<br />
Amber Rivamonte<br />
Company Secretary<br />
Janet Mason<br />
CFO<br />
Marc Twining<br />
Exploration Manager<br />
Pam McRae Williams<br />
Community Manager<br />
John Burgess<br />
Study Manager<br />
(Metallurgy/Environmental)<br />
8 AUSTRALIA’S NEXT GREAT COPPER PROJECT. HILLSIDE: SOUTH AUSTRALIA
MARKET CAP PER TONNE OF FORECAST COPPER PRODUCTION COMPARISON<br />
40000<br />
Corp orate an nd Over rview<br />
35000<br />
30000<br />
25000<br />
20000<br />
15000<br />
10000<br />
5000<br />
0<br />
Financing and<br />
construction<br />
~$2,100/t<br />
~$18,000/t<br />
Australian <strong>Copper</strong> Producers<br />
~$20,000/t<br />
~$23,600/t<br />
~$35,100/t<br />
Rex Sandfire Pan Aust Oz Minerals Cudeco<br />
Mine life (years): 15+ 7 11 6 10<br />
Cash Costs: ~US$1.20/lb ~US$1.05/lb ~US$1.10/lb ~US$1.20’lb No PFS<br />
January 10, 2013<br />
Forecast copper 70,000t 70,000t 90,000t 105,000t ~28,000t<br />
production<br />
Effective financing of the <strong>Hillside</strong> project is the key to value creation at Rex.<br />
9 *SOURCE: PUBLICALLY AVAILABLE DATA AS AT 26/10/2012
<strong>Hillside</strong> Proj ect<br />
1 > Corporate and Overview<br />
2 > <strong>Hillside</strong> <strong>Project</strong><br />
3 > Model and Economics<br />
January<br />
4 > Regional Potential<br />
10, 2013<br />
10<br />
AUSTRALIA’S NEXT GREAT COPPER PROJECT. HILLSIDE: SOUTH AUSTRALIA
LOCATION<br />
<strong>Hillside</strong> <strong>Project</strong> January 10, 2013<br />
11 AUSTRALIA’S NEXT GREAT COPPER PROJECT. HILLSIDE: SOUTH AUSTRALIA
RESOURCE<br />
Hillsi de Proj ect<br />
HILLSIDE PROJECT<br />
Discovered 2008–20092009<br />
Resource Drilling Jan 2010<br />
Starts<br />
Resource (July 2012)<br />
330Mt @0.8%CuEq<br />
(0.6%Cu, 0.16g/t Au, 13.7%Fe)<br />
High Grade Resource 116Mt @ 1.2% CuEq<br />
(0.9% Cu, 0.2g/t Au, 14.2% Fe)<br />
January 10, 2013<br />
Shallow High Grade<br />
(
RESOURCE<br />
<strong>Hillside</strong> <strong>Project</strong> January 10, 2013<br />
13 AUSTRALIA’S NEXT GREAT COPPER PROJECT. HILLSIDE: SOUTH AUSTRALIA
RESOURCE GROWTH OVER TIME<br />
<strong>Hillside</strong> <strong>Project</strong> January 10, 2013<br />
14 AUSTRALIA’S NEXT GREAT COPPER PROJECT. HILLSIDE: SOUTH AUSTRALIA
COMPARISON WITH OTHER AUSTRALIAN COPPER PROJECTS<br />
Australia’s largest undeveloped open pit copper Resource<br />
Hillsi<br />
de <strong>Project</strong> 15<br />
* Source: Publically available data as at 23 July 2012
RESOURCE – FUTURE GROWTH<br />
<strong>Hillside</strong> <strong>Project</strong> January 10, 2013<br />
16<br />
AUSTRALIA’S NEXT GREAT COPPER PROJECT. HILLSIDE: SOUTH AUSTRALIA
Model and Econom ics<br />
1 > Corporate and Overview<br />
3 > <strong>Hillside</strong> <strong>Project</strong><br />
4 > Model and Economics<br />
January<br />
5 > Regional Potential<br />
10, 2013<br />
17<br />
AUSTRALIA’S NEXT GREAT COPPER PROJECT. HILLSIDE: SOUTH AUSTRALIA
OPEN PIT MINE PLAN<br />
Model and Economics January 10, 2013<br />
18 AUSTRALIA’S NEXT GREAT COPPER PROJECT. HILLSIDE: SOUTH AUSTRALIA
WATER – AGREEMENT REACHED WITH <strong>SA</strong> WATER<br />
Model and Economics January 10, 2013<br />
19 AUSTRALIA’S NEXT GREAT COPPER PROJECT. HILLSIDE: SOUTH AUSTRALIA
SLURRY PIPELINE TO EXISTING PORT<br />
Model and Economics January 10, 2013<br />
20 AUSTRALIA’S NEXT GREAT COPPER PROJECT. HILLSIDE: SOUTH AUSTRALIA
MINERAL PROCESSING<br />
<strong>Copper</strong>-gold concentrate via<br />
conventional floatation<br />
Mode el and E<br />
Economics January 10, 2013<br />
Iron ore concentrate via<br />
conventional magnetic separation<br />
21 AUSTRALIA’S NEXT GREAT COPPER PROJECT. HILLSIDE: SOUTH AUSTRALIA
LOCATION ADVANTAGES<br />
Mode el and Econom ics<br />
January 10, 2013<br />
Issue<br />
<strong>Hillside</strong> Advantage<br />
Land Ownership<br />
Rex has 100% of freehold and mineral<br />
Mining Risks<br />
Processing Risks<br />
Site Access<br />
Transport to Port<br />
Power and Water<br />
Access to People<br />
rights over <strong>Hillside</strong><br />
Staged open pit design<br />
Good recoveries from standard floatation<br />
and magnetic separation<br />
Existing Highway (2hr to Adelaide) and<br />
road network to local towns<br />
12km pipeline to local port<br />
Access off state grid/pipeline<br />
Local work-force (not fly-in, fly-out)<br />
22 AUSTRALIA’S NEXT GREAT COPPER PROJECT. HILLSIDE: SOUTH AUSTRALIA
PROJECT REVENUE PRODUCTION<br />
Mode el and Econom ics<br />
Output Key Features Advantage<br />
100+ ktpa CuEq Integrated modular plant Economies of scale<br />
3 revenue streams<br />
<strong>Copper</strong> (Cu)<br />
70,000 tpa<br />
Gold (Au)<br />
50,000 ozpa<br />
• OpenPit<br />
• Shallow orebody<br />
• Moderate Strip<br />
• Conventional floatation to<br />
Quality Cu-Au concentrate.<br />
• Slurry pipeline to existing<br />
port (only 12kms).<br />
• Good recovery<br />
• Low impurities<br />
• Easily saleable<br />
concentrate<br />
January 10, 2013<br />
Magnetite<br />
12Mtpa 1.2 Conventional recovery from<br />
tailings of Cu/Au circuit.<br />
Refined product with<br />
>65%Fe and low<br />
Slurry pipeline to existing port. impurities.<br />
Very low cost<br />
delivered to port<br />
(~A$40/t)<br />
23 AUSTRALIA’S NEXT GREAT COPPER PROJECT. HILLSIDE: SOUTH AUSTRALIA
FINANCIALLY ROBUST AND EXPOSURE TO HIGH COPPER PRICES<br />
Mode el and Econom ics<br />
Commodity Base Case Upside Case<br />
<strong>Copper</strong> (US$ real) US$2.8/lb US$4.5/lb<br />
Gold ld(US$ real) US$1,200/oz US$1,600/oz<br />
Iron Ore (62%Fe) (US$ real) US$100/t US$120/t<br />
Iron ore premium (US$ real) US$25/t US$25/t<br />
Exchange Rate (USD:AUD) 0.8 1.0<br />
Pre-tax annual operating cash flow A$240 million >A$390 million<br />
January 10, 2013<br />
24 AUSTRALIA’S NEXT GREAT COPPER PROJECT. HILLSIDE: SOUTH AUSTRALIA
TIMELINE HORIZON<br />
Mode el and Econom ics<br />
Explore &<br />
Discovery<br />
Delineate and Drill<br />
2008 2011<br />
2012<br />
3 Resource Upgrades<br />
Pre Feasibility Work and Study<br />
Environment Approval Processes<br />
4 th Resource<br />
Concept<br />
Study<br />
Reserve pending<br />
Approvals &<br />
Bankable<br />
Crystalise<br />
2013 Permits<br />
Feasibility<br />
Funding<br />
January<br />
2014<br />
Construction<br />
18 Months<br />
2015<br />
Production &<br />
Ramp up<br />
10, 2013<br />
25 AUSTRALIA’S NEXT GREAT COPPER PROJECT. HILLSIDE: SOUTH AUSTRALIA
Regional Po otential<br />
1 > Corporate and Overview<br />
2 > <strong>Hillside</strong> <strong>Project</strong><br />
3 > Model and Economics<br />
January<br />
4 > Regional Potential<br />
10, 2013<br />
26<br />
AUSTRALIA’S NEXT GREAT COPPER PROJECT. HILLSIDE: SOUTH AUSTRALIA
HILLSIDE: JUST THE START – A STRATEGICALLY IMPORTANT POSITION<br />
Regional Potential January 10, 2013<br />
27 AUSTRALIA’S NEXT GREAT COPPER PROJECT. HILLSIDE: SOUTH AUSTRALIA
CONCLUSION<br />
January<br />
PFS Results – <strong>Hillside</strong> is Australia’s largest undeveloped copper project.<br />
Production – 70,000tpa copper and over 100,000t CuEq pa.<br />
Mine Life – PFS shows potential for over 15 year mine life.<br />
Cash costs – C1 costs of ~US$1.2/lb deliver good annual cash margins.<br />
Infrastructure - <strong>Hillside</strong> has superior infrastructure advantages compared to<br />
development projects across the globe, leading to a low capital intensity.<br />
Sovereign Risk - A safe and enviable location.<br />
Unique - <strong>Hillside</strong> and the surrounding copper potential has important long<br />
term strategic value which is unique compare against other copper projects.<br />
Value Creation – <strong>The</strong> key to unlocking the value at <strong>Hillside</strong> is an effective<br />
financing package.<br />
10, 2013<br />
28<br />
AUSTRALIA’S NEXT GREAT COPPER PROJECT. HILLSIDE: SOUTH AUSTRALIA
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