2 May 2013 BROKER PRESENTATION

Transcription

1 ASX Release 2 May 2013 ASX code: MAU Level 2, 16 Ord St West Perth WA 6005 PO Box 1388 West Perth WA 6872 Telephone Facsimile info@magres.com.au ABN: BROKER PRESENTATION Magnetic Resources NL advises that the Managing Director, Mr George Sakalidis and the Technical Director, Mr Gavin Fletcher, will be undertaking a roadshow to various investors and broking houses. A copy of the presentation is attached. For more information on the company visit George Sakalidis Managing Director Phone (08) Mobile george@magres.com.au Page 1 of 1

2 April 2013

3 FORWARD LOOKING STATEMENTS This presentation contains forecasts and forward looking statements which are made in good faith and are believed to have reasonable basis. However, such forward looking statements are subject to risks, uncertainties and other factors which could cause the actual results to differ materially from the future results expressed, projected or implied by forward looking statements.

4 OVERVIEW Magnetic Resources offer a very unique investment opportunity. The company has 4 key projects with coarse grained premium quality magnetite in the South West of Western Australia. Most magnetite projects in Australia require very fine grinding (approx µm) to achieve acceptable concentrate quality. The coarse grained magnetite projects held by Magnetic Resources are achieving exceptional quality concentrates at substantially coarser grind sizes. Concentrate quality of 68-70% Fe, and combined SiO 2 and Al 2 O 3 of less than 3% is consistently being achieved at very coarse grind sizes

5 OVERVIEW Perhaps of greater significance is that the Magnetic Resources projects are all situated very close to the vital infrastructure required to get the product to market. This substantially de-risks the project and reduces Capex and Opex in a very major way.

6 OPERATIONS Target tonnage based on drilling results, aeromagnetic and ground magnetic models, historical data, density of 3.5 and target depth of 100m for BIF styles and density of 2.8 and target depth of 250m for gneiss styles. The potential quality and grade is conceptual in nature as there has not yet been sufficient exploration to define a mineral resource and it is uncertain if further exploration will result in the determination of a mineral resource.

7 HIGHLIGHTS first mover advantage in the area, this created a pegging rush including major companies. Cliffs Natural Resources have pegged substantial tenements in the neighbouring area. Over 220km of iron ore potential strike extent over the South West Region of WA Magnetic hold 4 key projects representing 100km of coarse grained premium quality magnetite targets. Key projects are Ragged Rock, Jubuk, Calingiri and Cheesemans. Ragged Rock has 15 targets totalling 68km. All within 15km of the Trans Australian railway line and the Albany railway line. Robust initial economic assessment.

8 DIRECTORS GEORGE SAKALIDIS Managing Director Geophysicist, 32 yrs exp. GAVIN FLETCHER Technical Director Metallurgist, 16 yrs exp. PETER THOMAS Chairman Lawyer, 27 yrs exp. ERIC LIM Banking Finance 16yrs exp.

9 COMPANY STRUCTURE Total Shares 75,961,072 Partly Paid Contributing Shares (20c unpaid) Options Market Cap (April 2013) 18,618,862 9,997,143 $6M Cash (April 2013) $1M

10 RAGGED ROCK FLAGSHIP PROJECT What is different about Ragged Rock? s Very low CAPEX/OPEX World Class Product = price premium Capable and proven people

11 RAGGED ROCK FLAGSHIP PROJECT CAPEX/OPEX s No Railway required. (Most projects require 100km+ of Rail at ~$4M/km) Grid power available at the site Water expected to be available (fresh water intercepted in 5 of 11 holes in Stage 1 drilling) No mining camp required No airstrip or FIFO costs (Northam and York within 15km) Coarse grained, high purity magnetite reduces Capital Intensity by ~50%

12 RAGGED ROCK FLAGSHIP PROJECT CAPEX/OPEX Typical Magnetite Flowsheet Ore Feed Primary Crushing Secondary Crushing Screening HPGR Rougher Magnetic Separation Primary Grinding (Ball Mills) Secondary Magnetic Separation Scavenger Flotation Regrind Mill (Tower Mills) Flotation Cleaner Magnetic Separation Fine Grinding (Tower Mills) Final Concentrate

13 RAGGED ROCK FLAGSHIP PROJECT CAPEX/OPEX Indicative Ragged Rock Flowsheet Ore Feed Primary Crushing Secondary Crushing Screening HPGR Rougher Magnetic Separation Primary Grinding (Ball Mills) Secondary Magnetic Separation Final Concentrate Coarse grained = Simple flowsheet = Low Capex = Low Opex = high likelihood of success!!

14 RAGGED ROCK FLAGSHIP PROJECT CAPEX/OPEX CAPITAL INTENSITY - WA MAGNETITE PROJECTS Project Planned Throughput Capex $/annual tonne of concentrate Southdown 10Mt $290 Extension Hill (Asia Iron) 10Mt $300 Karara (Gindalbie) 8Mt $320 Sino Iron 27.6Mt >$330 Magnetic Resources (expected)* 1-2Mt $150-$170 Source: Iron Ore and Steel Forecasting Conference 2013 and public records Coarse grained = Simple flowsheet = Low Capex = Low Opex = high likelihood of success!!

15 RAGGED ROCK FLAGSHIP PROJECT World Class Product Company/Project Grind Size Fe (%) Silica (%) Alumina (%) MAGNETITE - AUSTRALIAN COMPANIES Gindalbie - Magnetite Northern Iron FMG - Glacier Valley Atlas Iron - Ridley Magnetite Magnetic Resources (expected DR) ~1-1.5 ~1.0 MAGNETITE - WORLD CLASS PROJECTS Carajas PF (Brazil) Tubarao SSF (Brazil) Samarco (Brazil) Carol Lake (Canada) Kaunisvaara (Finland/Sweden) Sources: Company presentations, company public records, Steel Index.

16 RAGGED ROCK FLAGSHIP PROJECT World Class Product - Pricing s Nearly all Iron Ore offtake agreements linked to 62% Fe benchmark Credits for high Fe content approx. $4-5/t per 1% Fe above 62% Eg.. 69% Fe product premium = $28-$35/t above benchmark In the event of price pressure, high purity products will always have a buyer!!

17 RAGGED ROCK FLAGSHIP PROJECT Capable and Proven Iron Ore people s Gavin Fletcher Metallurgist 16 years experience in Iron Ore, Gold and Diamonds Commissioning and start up of 7 projects in Australia, Africa and Europe Senior level involvement with 4 magnetite projects Commissioned Northern Iron (NFE) project in Norway (2010) Project Manager to improve NFE flowsheet. (grade increase 62%Fe to 67%Fe - $18m) Ex Principal Process Engineer FMG Ex GM Processing and Metallurgy for AIM listed African Minerals. Directly involved with $1.5Bn capital investment by Shandong Iron and Steel Group Established networks with Chinese Steel Mills and test facilities

18 RAGGED ROCK FLAGSHIP PROJECT Capable and Proven Iron Ore people s John Blanning - Consultant Civil Engineer, 30yrs exp. In Coal and Iron Ore Vice President of Mining African Minerals (AMI) AIM listed company with a project in Sierra Leone. Direct involvement to grow AMI from 30M to over 2Bn in 2 years Direct involvement in numerous capital raisings including $750M USD to CRM (China Rails and Materials). Prior to AMI, Head of Mining for FMG during the construction of a fully integrated Mine, Rail and Port operation to become Australia s 3 rd largest Iron Ore producer.

19 RAGGED ROCK FLAGSHIP PROJECT Initial Economic Assessment s An independent conceptual study by Engenium examined production scenarios of 1-2Mtpa of magnetite concentrate railed to Albany port. Using the available information and the assumptions below, the financial analysis indicates a robust economic return, warranting immediate drilling to further assess the targeted magnetite deposits 1Mtpa: capex $159M-179M; opex $64/t-$72/t; NPV(10%) $331M-$375M; IRR 23%-25% 2Mtpa: capex $294M-$314M; opex $64/t-$72/t; NPV(10%) $690M-$778M;IRR 26%-29% Assumptions: head grade 40%Fe; mass recovery 35%; conc. grade 68%Fe; exploration target Mt; strip ratio 1.0; price US$117/t fob (66%Fe); mine life 20 yrs; exchange rate A$0.84:US$1; processing 2.9Mt (1Mtpa case) or 5.7Mtpa (2Mtpa case) Albany the preferred port because of available port space and rail access.

20 RAGGED ROCK FLAGSHIP PROJECT Initial Economic Assessment s Very coarse grained material in excess of 100 microns to achieve excellent product quality. Economic assessment conducted on 75µm grind. A coarser product would reduce Capex and Opex considerably. Preliminary mass recovery very high (35%+) even on weathered material on surface. Albany is the chosen Port for the study due to readily available space. Ragged Rock is within 10km of the Albany railway line. No expensive Rail spur required. Export via Kwinana is possible and being investigated. This option would reduce Opex further Albany railway line can handle up to 3Mt/yr without any upgrades to the line. Ongoing discussions with Albany Port Authority suggest readily available options for export via Panamax vessels.

21 RAGGED ROCK FLAGSHIP PROJECT 12 Targets(41km) all within 15km of the Trans- Australian Railway Targeted tonnage >400Mt Exploration Target

22 RAGGED ROCK FLAGSHIP PROJECT Target 1 is 5km long and up to 300m wide Averages 43% Fe on surface

23 RAGGED ROCK FLAGSHIP PROJECT Target 1 is 5km long and up to 300m wide 79m combined magnetite BIF intersection Phase 1 drilling. 800m RC completed of 1900m program

24 OTHER PROJECTS - JUBUK DTR Conc. 70.5%Fe, 1.3% SiO 2, 90.4% recovery, P100-75µm Conceptual Study completed on Jubuk by Engenium Pty Ltd to show $153M CAPEX payback in 4 years

25 OTHER PROJECTS - WUBIN Total Target Tonnage Mt BIF 20-30%Fe DSO 50-60%Fe Target tonnage based on drilling results, aeromagnetic and ground magnetic models, historical data, density of 3.5 and target depth of 100m for BIF styles and density of 2.8 and target depth of 250m for gneiss styles. The potential quality and grade is conceptual in nature as there has not yet been sufficient exploration to define a mineral resource and it is uncertain if further exploration will result in the determination of a mineral resource.

26 OTHER PROJECTS WUBIN DTR Conc. 70.2%Fe, 1.4% SiO 2, 64% recovery, P100-75µm Mt Exploration Target at Cheesemans & surrounds Numerous targets in close proximity ( in excess of 30km ) Kwinana 330km

27 OTHER PROJECTS - CALINGIRI 15km of targeted aeromagnetics Prospective for DSO and premium magnetite Only 10km south of Cliffs/Giralia Yerrecoin magnetite deposit

28 WHY INVEST? BECAUSE THE PROJECT CAN BE ACHIEVED!! None of the major hurdles to project success, especially Infrastructure!! Coarse Grained Premium Product (68-70% Fe) and exceptionally low impurities Potential for >500 Million tonnes at Ragged Rock with minimal overburden Infrastructure in place. Adjacent to rail Easy access to multiple ports with capacity and optionality Robust initial economic analysis at Ragged Rock

29 CONCLUSION Magnetic Resources provides a unique opportunity to invest in an emerging premium quality coarse grained magnetite producer with very low Capex requirements and a high likelihood of project success Gavin Fletcher, Technical Director gfletcher@magres.com.au George Sakalidis, Managing Director george@magres.com.au Competent Person s Statement The information in this report that relates to exploration results is based on information compiled or reviewed by Mr George Sakalidis BSc (Hons) who is a member of the Australsian Institute of Mining and Metallurgy and Mr Cyril Geach BSc (Hons-Geology) who is a member of the Australian Institute of Geoscientists. George Sakalidis is a director of Magnetic Resources NL. George Sakalidis has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. George Sakalidis consents to the inclusion of this information in the form and context in which it appears in this report.