8 March 2010 INVESTOR PRESENTATION

Transcription

1 8 March 2010 INVESTOR PRESENTATION Paul Arndt, the Company s Managing Director & CEO together with Tim Manners, the Company s Chief Financial Officer, will be conducting a series of investor presentations over the period 9 th & 10 th of March in Sydney and in Melbourne. A full copy of that Investor Presentation is attached. For more details, visit ENDS For further information: Investors & Media: Paul Arndt Managing Director Analysts: Tim Manners Chief Financial Officer Inquiries: Paul Marinko Company Secretary

2 Perilya Limited Investor Update 9-10 March 2010

3 Disclaimer and Important Notice Disclaimer: This presentation contains forward looking statements that are subject to risk factors associated with an underground mining business. Where the company expresses or implies an expectation or belief as to future events or results, such expectation or belief is expressed in good faith and believedtohavea reasonable basis. However, forward looking statements are subject to risks, uncertainties and other factors, which could cause actual results to differ materially from future results expressed, projected or implied by such forward looking statements. Such risks include, but are not limited to metals price volatility, currency fluctuations, production performance, increased production costs and variances in ore grade or recovery rates from those assumed in mining plans, project delay or advancement, environmental risks, approvals and cost estimates, as well as political and operational risks in the countries and states in which we sell product to, shipping risks and governmental regulation and judicial outcomes. The company does not undertake any obligation to release publicly any revisions to any forward looking statement to reflect events or circumstances after the date of this presentation, or to reflect the occurrence of unanticipated events, except as may be required under applicable securities laws. All references to dollars, cents or $ in this presentation are to Australian currency, unless otherwise stated. References to Perilya or company references to Perilya Limited (ABN ) or its applicable subsidiaries. Competent Person Statement: The information contained in this report relating to the Ore Resource at Mt Oxide is based on information compiled by Mr Martin Jones who is a full-time employee of Perilya and is a member of the Australasian Institute of Mining and Metallurgy. Mr Jones 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. Mr Jones consents to the inclusion in the report of the matters based on the information in the form and context in which it appears. The information in this report that relates to Ore Reserves for Southern Operations is based on information compiled by Mr Noel Carroll who was at the time of compiling the report a full-time employee of Perilya and is a member of the Australian Institute of Geoscientists. Mr Carroll 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. Mr Carroll consents to the inclusion in the report of the matters based on the information in the form and context in which it appears. The information in this report relating to the Broken Hill Mineral Resources estimates include: Southern Operations, Southern Extensions, Potosi, Silver Peak, Central Blocks, Flying Doctor, Pinnacles (1130 and Henry George deposits), North Mine Uppers and North Mine Deeps and are based on information compiled by Mr Noel Carroll who is a full-time employee of Perilya and is a member of the Australian Institute of Geoscientists. Mr Carroll 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. Mr Carroll consents to the inclusion in the report of the matters based on the information in the form and context in which it appears. 1

4 Corporate Snapshot Tampang (50) Issued Capital M fully paid shares Market Capitalisation ~ $ 315 million (ASX 300) Mt Oxide Cash & Debt (31 Dec) Cash: $ million Debt: $ 61.2 million Enterprise Value ~ $ 260 million Significant Shareholders Zhongjin Lingnan (52.0) Paradice Investments (5.4) 2

5 Perilya - Overview Experienced Operators Long history of mining & resource/reserve replenishment in Broken Hill Significant re-sizing in Sept 08 due to falling metal prices and onset of GFC Quality Assets Broken Hill - a solid foundation with 2.8Mtpa concentrator. LOM plan 10+ years based on reserves (as released on 12 th November) Mount Oxide - potential low cost copper project Flinders optionality cashflow positive Tampang (50) early stage copper/gold project in Malaysia Holding low cost add-ons that can be fast tracked into production Strong Major Shareholder (52.0) that is delivering Balance Sheet strength Industry experience in mining, processing, smelting and marketing; and Potential for future off-take agreements & opportunities for synergies Profitable and Cashflow accretive at current metal prices 3

6 2009 Financial & Operating Results (6 mth period) Financial Results Summary 6 Months to 6 Months to 12 Months to Dec-09 Jun-09 Jun-09 Revenue Net Profit / (Loss) for the period (75.1) EBITDA (60.3) Shares on Issue (M) Simple EPS (annualised) (0.19) Cashflow from Operations 50.4 (12.9) (59.5) (*) Cash Net Cash / (Debt) Total Assets Shareholders Equity (*) Prior to $60.3 million hedge book closure in FY09 Operating Results Summary Metal Production - Broken Hill: - Contained Zinc (tns) 35,100 35,200 75,300 - Contained Lead (tns) 29,200 27,700 48,100 Combined Zn + Pb (tns) 64,300 62, ,400 - Contained Silver (Moz) Beltana Sales (contained Zn) 26,180 17,320 32,602 Highlights Significant boost in NPAT & EPS Higher metal prices & lower unit costs over past 6 months Solid metal production from Broken Hill; in line with guidance of combined Zn+Pb of kt contained. Cash costs of US$0.44/lb continue positive trend. Pre capital cash generation from Broken Hill of US$0.51/lb zinc over the period Record 6 month period of Beltana sales Strong balance sheet, with full support of Zhongjin Lingnan 52.0 shareholder Broken Hill (all in US$/lb payable Zn) - Average Price C1 Cash Costs Cash Margin 0.51 (0.01) (0.19) 4

7 Metal Price Trend A$/tonn ne 3,800 3,600 3,400 3,200 3,000 2,800 2,600 2,400 2,200 2,000 1,800 1,600 1,400 1,200 1,000 2 Year AUD Metal Prices ($/tn) (Zn + Pb) AUD Zn AUD Pb StrategicOptions Review by Management Zhongjin become majorshareholder Hedge Book Closure Decision to Re Size Mar-08 Apr-08 May-08 Jun-08 Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Whilst USD prices have strengthened over 2009, so has the AUD. Average AUD zinc and lead price for February 10 was only 15 and 5 higher, respectively, than those of Sept 08 when the resize at Broken Hill occurred. 5

8 2009 Financial Results (Peer Comparison in Base Metals) 40.0 Comparison of (implied) Simple Earnings Multiples (based on Dec results releases) times earnings WSA MRE IGO SRL MCR ABY PAN JML PEM The above excludes CBH & KZL as their implied multiples were greater than 350 times Also excludes TZN as this was negative. PEM based on $0.58 share price. 6

9 Zinc/Lead/Silver Production (Comparison with Peers) 80,000 70,000 Contained Metal Production CY Lead) Tonnes (Zinc & 60,000 50,000 40,000 30,000 20, Silver) Million Ounces ( 10, Perilya (*) Kagara JML CBH Terramin CY 2009 Zinc (LHS) Lead (LHS) Silver (RHS) 0.0 (*) Excludes an additional 43,500 tonnes of zinc sold in 2009 from Beltana Project Source: ASX Release for respective companies 7

10 Broken Hill - Quarterly Performance (2009) Contained Metal Production 2009 C1 Margin (USD per lb of Zinc) 20, Tonnes (Zinc & Lead) T 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 Mar 09 Jun 09 Sep 09 Dec Million Ounces (Silver) c per Lb of Payable Zinc USD (0.20) Mar 09 Jun 09 Sep 09 Dec 09 Cash Margin Ave Price Received C1 Cash Costs Zinc (LHS) Lead (LHS) Silver (RHS) Consistent production profile throughout 2009 for all 3 core metals In line with 120kt 130kt market guidance (combined zinc & lead) Growing cash margin Step change in Sept 09 as a result of the silver buy-back 8

11 160 (A$) Broken Hill - Operating Performance Cost / Tonne Ore Milled (A$) 3,000 Cost / t Payable Metal 2, ,000 1,500 1, Sep-08 Oct-08 Nov-08 Dec-08 Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Nov-07 Dec-07 Jan-08 Feb-08 Mar-08 Apr-08 May-08 Jun-08 Jul-08 Actual Linear (Actual) 0 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Tonnes Hoisted per Employee Actual Linear (Actual) Employee Manpower Trend Feb-08 Mar-08 Apr-08 May-08 Jun-08 Jul-08 Aug-08 Nov-07 Dec-07 Jan-08 (t) Dec-08 Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec Actual Linear (Actual) Actual 2 per. Mov. Avg. (Actual) 9 Nov-08 Oct-08 Sep-08 Jul-08 Aug-08

12 Broken Hill - Safety Performance Key Highlights Safety Lead Indicators Longest recorded period without lost time injury Lost time injury frequency rate well below the industry average Jan Feb-0 09 Mar-0 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct Nov-0 09 Dec-0 All injury frequency rate the lowest in Perilya s history at Broken Hill Operating at our highest level of positive safety indicators Number of Incidents Safety Meetings Safety Interactions Task Observations Inspections Hazards & Near Miss Reports All Injury Incidents and Frequency Rate Frequency Rates Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 All Injuries All Inj. FR 10

13 Exploration & Development Pipeline Zinc, Lead & Silver Broken Hill +10 Year Mine Life at Southern Operations (JORC Reserves) Approval pending to re-commence development of Potosi/Silver Peak deposit North Mine development potential Extensions to Southern Lodes Reliance study being updated for current DSO terms Flinders Significant potential from current resources (Reliance, Moolooloo, Aroona) Long term potential for beneficiation of lower grade material Mt Oxide 224,000 tonnes of contained copper; at an average grade of 1.3 GM Study Development appointed; Drilling program being designed Development decision by end of 2010 Copper Tampang (50) Large Cu/Au porphyry potential Exploration permitting underway with JV partner (Mega First Corporation) Subject to permit, drilling to commence later in year 11

14 Exploration and Development Pipeline (cont.) Current reserve and resource for Broken Hill Ore Reserves 10.5 Zn/Pb (28 increase y-o-y) >10 years with a long history of replacement (based on US$0.77/lb Zn and US$0.82/lb Pb and AUD/USD rate of A$0.80) Mineral Resources Zn/Pb (8 increase y-o-y) Substantial Resource base for potential conversion to Reserves at a later date Mine Planning Supported by mine plan and improved performance Independent review e of Ore Reserve e and mine plan for Southern Operations Holding add-ons North Mine, Potosi, Flying Doctor and the Pinnacles region Can be fast tracked at low capital cost Classification Ore Reserves Broken Hill (Nov 09) Tonnes ('000) Zn Pb Ag g/t Contained zinc (kt) Contained lead (kt) Contained Silver (koz) Proved 6, ,424 Probable 6, ,521 Total 12, ,945 Mineral Resources Broken Hill (Nov 09) Tonnes Zn Pb Ag Contained Contained Contained Classification ('000) (000) g/t zinc (kt) lead (kt) Silver (koz) Measured 7, ,669 Indicated 6, ,778 Inferred 6, ,915 Total 20, ,964 1,540 61,362 12

15 Exploration and Development Pipeline (cont.) Potential to add significant value to Perilya, longevity & size to Broken Hill Ops Targets and drilling ranked according to those able to deliver best success Broken Hill $3.4M budget (12,000m) of diamond drilling on both near mine and regional exploration targets Down hole geophysical work on the Southern Extensions target area Diamond drilling on Potosi Far Extended and North Mine Zn Lodes and other targets The North Mine Zn-sands drill program underway with encouraging results (Stage 1 already completed) Flinders Drilling progressing to test for high grade Zinc (Beltana style) on high priority targets (North Moolooloo etc) Some broad zones of zinc mineralisation have been intercepted to date Mt Oxide Airborne helicopter magnetic survey now completed to assist targeting Potential ti around existing prospects under review for possible resource extensions Regional Niton soil sampling and mapping programs assisting targeting Drilling program in Dec 09 Qtr on untested t western pit margins confirming i geological l model with encouraging copper grades within the optimised pit shell, which will assist future planning A strategy for potentially developing Mt Oxide has been initiated with Study General Manager appointed Tampang (Malaysia) Permitting progressing. Recent site visit and meetings with JV partners and Government officials to progress the licence renewal and plan for recommencement of exploration activities. 13

16 Exploration and Development Pipeline (cont.) Potosi Pit Potosi Extended/Silver Peak potential project Silver Peak Shaft Portal Silver Peak Project Current Development Potosi Extended Project Evaluations into the Potosi & Silver Peak deposits have been undertaken with work including finalisation of mining plan and detailed costings for the project now completed Re-commencement of development and subsequent mining of the Potosi and Silver Peak deposits is nearing a decision i point and thus in anticipation i the development application stage is being processed through h the local l authorities Slide : 14 14

17 Exploration and Development Pipeline (cont.) Potosi Extended/Silver Peak potential project Silver Peak Extensions Potosi Extended Down-dip Potosi Far Extended First Priority Target Second Priority Target 15

18 Exploration and Development Pipeline (cont.) BH North Mine - Junction North Drilling Target Areas Long Section 2-Lens 3-Lens 3-Lens Junction North Portion NM11549 NM11550 Drill Completed holes completed Surface Drillhole for Stage I NM11552 NM11551 NM m Test Hanging Wall stratigraphy at North Mine for Zn-Lode mineralization as seen in S Ops Potential to add significant tonnage (>Mt) accessible by the North Mine decline Surface drilling of target in early Potential mineral inventory of 9 Pb+Zn (non-jorc) Program was suspended as decline access was considered most Silver efficient Lode for further drilling Target Area Program will also test for extensions of 2 Lens further into the footwall Planned Surface Stage II Drilling Drillhole 16 Exploration : November 2009 Page : 16

19 Exploration and Development Pipeline (cont.) Broken Hill - Southern Extensions Long Section Area of Existing Resources Historic Downhole EM Anomalies 17

20 Exploration and Development Pipeline (cont.) Flinders exploration and Reliance development ¾ ¾ Exploration has been underway since S t b 2009 ($3M b September budget) d t) focussing on prioritized targets (red highest, green lower) as shown. There are a number of untested zones - North Moolooloo & Aroona (not shown) currently being drill tested with these zones having potential for additional discoveries and resource extensions. nce Relia liance nce Re 000 Relia liance nce Ea East st Re lia nce Ea st Re ¾ North Moolooloo M Moolooloo oolooloo Moolooloo M oolooloo Moolooloo Aristotle Anaconda He rm aaee ee He Herm rmaa He rm Aristotle Aristotle Aristotle Aristotle Beltana East Atla ss Atlas Atla Anaconda conda Ana Anaconda conda Ana nn S Sundow Sundow undownn S undow Sundow Atlas-Wallrider Trend Be lta na Be Belta lta ltana na na Be Success will deliver high high-value, value low lowcost Zn tonnes Study is also well progressed on the development of the Reliance pit as a first follow on to Beltana. For Scale Beltana Open-Cut Ea st Em Emuuu Ea Ea East st Em ¾ 111 km m m kkm k kkm km Em uu Emu Em u Em Emuuu S South South outh Em Em Copperrr King King Coppe King Coppe Copper King W llride Waaallride llriderrr W 18

21 Exploration and Development Pipeline (cont.) Mount Oxide Copper Project Copper resources of 1.3 for 224kt Cu. A strategy for potentially developing Mt Oxide has commenced with a Study GM (Ex Newcrest) having just been appointed Recent drilling from October to December tested undrilled areas on western margins of the old pit confirming geological interpretation, although program to north not completed due to wet season Drilling immediately north of the old pit has demonstrated good potential for additional tonnes & higher grades within the optimized pit shell. Regional targets will be investigated, pending Board approval 19

22 Exploration and Development Pipeline (cont.) Tampang JV 50 Outstanding opportunity for discovery of a large Cu-Au porphyry deposit below and southwest of the current drilled d area at Bongkud. Bongkud is a typical Au rich porphyry copper deposit with a strong clay-pyrite-sericite overprint. Only partially unroofed. Initially tested in 1999 by 16 angled RC holes averaging 158m of which one was deepened by diamond drilling to 331m (TRD003). TRD003 intersected 0.37 Cu and 0.89g/t Au (0.76 eq Cu). Drilled deeper in 2000, 6 more diamond holes and 2 more RC holes mostly to the northeast of TRD003. Hole TRD030 (the last hole, to only 150m) was to the southwest and intersected 0.73 Cu and 0.52g/t Au (0.95 eq Cu) of supergene material. A recent road cutting to the west of TRD030 shows strong pyrite alteration associated with narrow mineralised quartz veins. 200mRL 200m TRD030 TRD017 TRD030 TRD003 Location of drill section TRD003 Chargeability anomaly Bongkud Hill supergene > 0.6 ecu 200m >1 ecu 20

23 External Growth Looking for Value:- Perilya & Zhongjin have a stated desire to acquire new, long life assets. Preferred commodities are zinc, lead, copper & precious metals Large resource base Long life potential (> 10 years) Will consider both onshore and offshore projects Strong operational & financial capability Ability to access competitive debt via parent support Operational Experience + Financial Strength = Value 21

24 Questions?