Exploration Review. Tom Reddicliffe CEO. AGM Wednesday 23rd November 2005

Transcription

1 Exploration Review Tom Reddicliffe CEO AGM Wednesday 23rd November 2005

2 Project Areas North Kimberley Darwin NADL Tenement Interest = 27,500km² Merlin Arnhem Land WA NT Qld NADL / Rio Tinto Data License Agreement Area Diamond Pipe Perth Sydney Darwin Arnhem Land Seppelt Mt Harriet 125 km Timber Creek Tawana Argyle Rio Tinto Merlin Broome Ellendale Kimberley Diamond Co Aries Thundelarra Project Areas

3 NADL Tenement Interest = 4,150km² Darwin Nhulunbuy Legend NADL Tenement Borroloola Merlin Mining Lease Borroloola Access Road Drainage Merlin Diamond Pipes McArthur River Mine (Pb/Zn) 15 km Tennant Creek River Cape Crawford Alice Springs Gravity Diamonds Abner Range Discovery Glyde Mining Lease Tintagel Prospect Evidence for new diamond bearing pipes Merlin Project Area

4 Bedevere (not mined) 1km Emu u Pipes Kaye Ector Gareth Ywain Gawain Production from 9 pipes : 500,000cts US$108/ct 2 pipes not mined Operated : Shallow open pit resources exhausted 2.4 Mt mined Acquired by NADL in late 2004 Tristram (not mined) Sacramore MLN1154 Palomides Launfal & Launfal North Excalibur Australia s s largest diamond cts recovered from Gareth Merlin Diamond Mine

5 TOTAL RESOURCE 19.1 M tonnes 17.3 cpht 3.3 M carats 10.1 M Indicated tonnes 9 M Inferred tonnes In situ Value >A$600 million Northern Cluster 7.7 M tonnes 8.3 cpht 634,000 carats Central Cluster 2.3 M tonnes 32.3 cpht 740,000 carats Immediate Target 2kms Southern Cluster 9.1 M tonnes 21.4 cpht 1,955,000 carats 11.4 M tonnes cpht 2,695,000 carats >A$500 M MLN1154 Diamond values have improved since 2002 Expectation of US$140/ct ($US exchange rate 73c) Merlin Resource

6 Mining records of production and recovery indicate grades are understated due to significant liberation and recovery issues Jungiila Bunajina Potentially viable staged project identified by AMC based on -increased diamond values -improved liberation -improved recovery Project Economics

7 STAGE 1 Re-treatment of Sorthouse Tailings Crushing & Liberation Tests 10,000 carats recovered to date STAGE 3 Potential Dual Pipe Cutback 1.7 M tonnes 380,000 carats STAGE 2 Mining of Remnant Ore from Surface Stockpiles and Re-optimised Pits Potential for 180,000cts over 2 years STAGE 4 Underground Mining Potential 10.1 M tonnes 2.36 M carats over 10 years Staged Project

8 Fluorescence characteristics of Run of Mine diamond population Fluorescence Total Population Non/Very Low 19% Low-Moderate 76% High 5% X-ray fluorescence was the only diamond recovery technique used at Merlin Merlin Diamond Populations Majority of non-fluorescing diamonds including yellow population (60%) N Content GROUP B (75%) Dominantly moderate to high fluorescence characteristics (15% of tails population) Subsidiary population of nonfluorescing diamonds (25%) 10 1 GROUP A (25%) Dominantly non to low fluorescence characteristics (85% of tails population) N Character Optical Sorter successfully recovers sorthouse tails diamonds Recovery : Diamond Fluorescence

9 Stage 1 : Excavating sorthouse tailings from Ywain Pit

10 Recovery : Screening Plant

11 Fortnightly Results of X-ray X Rejects Processing Processed tonnes Recovered carats per fortnight 3,500 3,000 Introduction of Screening Plant 3,262 Processed Tonnes 2,500 2,000 1,888 Recovered Carats 1,500 1, , Aug 4 Sept 18 Sept 2 Oct 16 Oct 30 Oct 13 Nov Fortnight Ending Production Graph

12 Recovery : Diamonds from Sorthouse Tails

13 Sorthouse Tails Recovery (8 Aug (8 Aug 22 nd Nov) Carats Recovered mm -10+4mm -4+1mm Total ,753 10,695 Diamonds Recovered mm mm 1, mm 125,895 Total 127,555 Selection of cleaned white diamonds Largest stone = 14.21cts 35% white 5% yellow 29% browns 31% mixed Selection of cleaned yellow diamonds Confirmation of significant loss of diamonds from previous operations Recovery : Sorthouse Tails

14 Depth (m) Surface Enrichment Clay poor recovery Optimum recovery Hard rock poor recovery Grade (carats/m³) Decreasing grade with depth Grade (cts/m³) ) should be constant with depth if kimberlite type is unchanged Mining head grade affected by efficiency of liberation Palomides MLN % drop off in grade Palomides Liberation : Past Recoveries

15 Liberation Tests : Trommel Oversize

16 Koppern 50tph 50% <1mm Stage 1 : Liberation Tests - HPGR Press

17 Trommel Oversize >100,000 tonnes Sizer rejects Trommel oversize (+25mm) Old plant site Palomides Sacramore Launfal Waste Dump Excalibur Waste Dump Fine Tails Dam (-1mm) Cyclone Float Tails (+1mm/-8mm) Stage 2 : Surface Stockpiles

18 Sizer Rejects approx 60,000 tonnes Stage 2 : Surface Stockpiles

19 Pipe Ywain Mining grade 60cpht Stage 2 : Reoptimised Pits

20 approx 200m Excalibur Old plant site Launfal Sacramore Palomides 1.7 M tonnes 380,000 cts Stage 3 : PALSAC Cutback

21 Legend Kimberlite VK1 Kimberlite Pipes coalesce at base of sandstone Country Rock Pits Large Diameter drill samples reports high diamond counts in VK1 unit Sacramore Palomides 0m Grade (carats/m³) Depth (m) Surface Enrichment 20 Clay poor recovery Optimum recovery 40 Harder rock Improved recovery due to different kimberlite type Sacramore Increasing grade with depth % increase in grade VK1 = 10% of volume????? VK1 PKB Sandstone Shale Higher grade? 50m 100m 150m 200m 250m 300m PalSac : Higher Grade Core

22 Ywain Underground Model : Southern Cluster Excalibur Gawain Launfal 10.1 M tonne for 2.36 M carats over 10 year mine life Tristram Excalibur 34cpht Palomides Sacramore Launfal North Launfal 20cpht 20cpht 25cpht 24cpht Sacramore Palomides Stage 4 : Underground Mining Potential

23 Legend Kimberlite Pipe carat Alluvial Sample with Diamonds Indicator Target Merlin Pipes Geophysical Target 15 stones 4.78cts Alluvial Diamonds Australia s Largest Diamond 21 stones 3.15cts Alluvial Diamonds 75 Diamonds 5.3 Carats Tintagel Fingerprinting indicates diamonds are not sourced from Merlin Digital Terrain Model Merlin Orbit Tenements

24 Legend NADL Tenement Merlin Mining Lease Kimberlite Pipe Cluster Alluvial Sample with Diamonds Indicator and Geophysical Target HEM6 Controlling Structure 4 diamonds recovered over HEM target 5Kms Tintagel Project

25 Excalibur 15 Structures

26 Legend Application Tenement Granted Tenement Arnhem Land Tenement Interest = 21,500 km² 30 km Competitor Tenement Central Arnhem Hwy Aboriginal Consent Nhulunbuy Vetoed Under Consideration Consent Received Hwy Perth WA Darwin NT Sydney Kakadu National Park Arnhem Gulf of Carpentaria Groote Central Eylandt Darwin Area has potential for other minerals as well as Diamonds Arnhem Land

27 Legend North Kimberley Tenement Interest = 2,200 km² NADL Tenement Competitor Tenement Diamond Occurrence Diamond Pipes NT WA Perth Sydney Ashmore Falcon TM Target Follow-Up Gravity Diamonds JV 25 targets followed up 10 targets report positive for diamond and/or indicator minerals Seppelt Pteropus 25km North Kimberley Projects

28 Remain on track to become Australia s s 3 rd Diamond Producer Thank You