Central Eyre Iron Project On the Road to Production. Larry Ingle, General Manager - 8 th SA Exploration & Mining Conference - 2 December 2011

Transcription

1 Central Eyre Iron Project On the Road to Production Larry Ingle, General Manager - 8 th SA Exploration & Mining Conference - 2 December 2011

2 Disclaimer Forward-Looking Statements This presentation contains forward looking statements concerning the projects owned by Iron Road Limited. Statements concerning mining reserves and resources may also be deemed to be forward looking statements in that they involve estimates based on specific assumptions. Forward-looking statements are not statements of historical fact and actual events and results may differ materially from those described in the forward looking statements as a result of a variety of risks, uncertainties and other factors. Forward looking statements are based on management s beliefs, opinions and estimates as of the dates the forward looking statements are made and no obligation is assumed to update forward looking statements if these beliefs, opinions and estimates should change or to reflect other future developments. Data and amounts shown in this presentation relating to capital costs, operating costs and project timelines are internally generated best estimates only. All such information and data is currently under review as part of Iron Road Limited s ongoing development and project studies. Accordingly, Iron Road Limited cannot guarantee the accuracy and/or completeness of the figures or data included in the presentation until the project studies are completed. Competent Person s Statements The information in this report that relates to Exploration Results is based on and accurately reflects information compiled by Mr Larry Ingle, who is a fulltime employee of Iron Road Limited and a Member of the Australasian Institute of Mining and Metallurgy. Mr Ingle has sufficient experience relevant to the style of mineralisation and the type of deposits 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 Ingle consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. The information in this report that relates to Mineral Resources is based on and accurately reflects information compiled by Mr Iain Macfarlane and Mr Alex Virisheff, both of Coffey Mining Ltd, who are consultants and advisors to Iron Road Limited and Members of the Australasian Institute of Mining and Metallurgy. Mr Macfarlane and Mr Virisheff have sufficient experience relevant to the style of mineralisation and the type of deposits under consideration and to the activity which they are undertaking to qualify as Competent Persons as defined in the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Macfarlane and Mr Virisheff consent to the inclusion in the report of the matters based on their information in the form and context in which it appears. Exploration Targets It is common practice for a company to comment on and discuss its exploration in terms of target size and type. The information in this presentation relating to exploration targets should not be misunderstood or misconstrued as an estimate of Mineral Resources or Ore Reserves. Hence the terms Resource(s) or Reserve(s) have not been used in this context. Any potential quantity and grade is conceptual in nature, since there has been insufficient work completed to define them beyond exploration targets and that it is uncertain if further exploration will result in the determination of amineralresource. 2

3 Central Eyre Iron Project (CEIP) Centrally located on Eyre Peninsula. Well serviced by established towns on road and rail networks. Favourable geographical and climatic location. Supportive state and local governments. Good relationships with local communities. Large scalable magnetite project, with low variability. Growing resource, currently 1.3Bt.* Exploration target 18-25% Fe.* * see Appendix 3

4 Exploration Lease & Geology 4

5 Resource Model - Boo-Loo & Dolphin Inferred Mineral Resource Estimate (JORC) 17.3% Fe Mass Rec % Indicative Concentrate Specifications- 70% Fe, 1.3% SiO 2, 1.0% Al 2 O 3, 0.00% P (1,414 DTR; P80-40µm)

6 Resource Model Murphy South Mineral Resource Estimate (JORC) Inferred 16.6% Fe Indicated 16.7% Fe Mass Rec. 16.8% Indicative Concentrate Specifications- 69.5% Fe, 1.2% SiO 2, 1.0% Al 2 O 3, 0.00% P (1,982 DTR; P80-40µm)

7 Prefeasibility Study Substantial 12.4Mtpa iron concentrate operation outlined (Base Case) Capital and operating costs compare favourably to similar Australian projects CAPEX A$2.6b, OPEX A$59/t Significant competitive advantages Coarse grind size (-106 µm) reduced power use, lower operating costs, no need for pellet plant Blast furnace feed (sinter) much wider market Large open cut mine, low strip ratio and good geotechnical characteristics minimised mining costs Project economics dictated by physical characteristics of ore and low strip ratio, not in-situ grades 7

8 Conventional Open Cut Mining Large scale conventional mining with 67Mtpa delivered to plant. Low strip ratio of 0.8 to 1.0. Optimised pit depth of 550m. Excellent geotechnical properties. 15m benches, 70º batters Operating cash flow versus pit shell size curve is very flat. the pit is robust and the shell selected for detailed pit design work is not critical. 8

9 Benchmarking Concentrate Grade Concentrate Grade - % iron EMG-Beyondie VMC-Yalgoo GIR-Yerecoin ARH-Balmoral IRD-CEIP (40 micron) AGO-Ridley GRR-Southdown IRD-CEIP (53 micron) IRD-CEIP (75 micron) GBG-Karara ACS-Magnetite Range CXM-Bungalow CXM-Fusion CXM-Carrow IRD-CEIP (106 micron) CFE-Cape Lambert IRD-CEIP (125 micron) FXR-Mt Oscar P80 Grind Size micron 9

10 Value Through Resource Growth Base case only incorporates Murphy South Mineral Resource Estimate at the time. Additional mineral resources will substantially increase project value. NPV A$1.1b (base case, 0.8Bt) NPV A$2.5b (near term target, 2.0Bt) NPV - $ millions 3,000 2,000 1,000 Base 1,399 Case 1,091 1,808 2,090 Near Term Target 2,687 2,756 2,811 2,597 2,478 2, Murphy South mineable resource billion tonnes 10

11 Resource Growth Pipeline Boo-Loo / Dolphin Mineral Resource - 328Mt N Stage VI Drilling Programme Exploration Target Mt Resource Modelling in Progress Murphy South Mineral Resource 1.01Bt Rob Roy Exploration Target Mt Stage VII Drilling Programme Scale 1000m *It is common practice for a company to comment on and discuss its exploration in terms of target size, grade and type. The potential quantity and grade of an exploration target is conceptual in nature since there has been insufficient work completed to define the prospects as anything beyond exploration target. It is uncertain if further exploration will result in the determination of a Mineral Resource, in cases other than the Boo-Loo and Murphy South prospect. 11

12 Sinter Test Work Nippon Steel Testing & Research CEIP concentrate suitable for use in sinter plants, processing into pellets unnecessary. Significantly larger market, majority of blast furnace steel mills have associated sinter plants. Avoid possible future constraints in pellet plant capacity. NPV $m 3,000 2,500 2,000 1,500 1, CEIP Concentrate - SEM Image Product Price Sensitivity NPV $ Realise premium above Pilbara fines prices confirming a higher project value. Cost benefit relative to other magnetite producers-no pelletising. Similar characteristics in use to Brazilian Pellet Feed Fines, a universally well understood iron product. 0 0% 5% 10% 15% 20% Premium to Pilbara Fines dmtu Possible substitute for Australian & Brazilian Fines in steel mill use. 12

13 CEIP - Summary Scale - large and growing mineral inventory Long life, low cost higher project value Quality coarse grained product 67% Fe premium price higher project value Sinter feed large, unrestricted market No pelletising necessary - no plant constraints, cost saving higher project value Substitution of existing well understood iron products 13

14 CEIP The Way Forward Murphy South (west) mineral resource upgrade later this month. Stage VII drilling programme progressing well. Project development partner discussions commenced, active engagement with a number of groups. Currently building DFS project team and establishing permanent Adelaide office. DFS field activities and approvals process well underway. Assess Stage 2 expansion options of between 50% - 100% increased production relative to PFS Base Case. 14

15 But wait there is more 15

16 Central Eyre Iron Project - Hambidge Hambidge Stage IV A Scale 500m B C KEY Completed drill hole D 16

17 Hambidge Exploration Target 800Mt-1.0Bt magnetite gneiss* 15-18% Fe* *It is common practice for a company to comment on and discuss its exploration in terms of target size, grade and type. The potential quantity and grade of an exploration target is conceptual in nature since there has been insufficient work completed to define the prospects as anything beyond exploration target. It is uncertain if further exploration will result in the determination of a Mineral Resource, in cases other than the Boo-Loo and Murphy South prospect. 17

18 On the Road to Production Contact Details Larry Ingle General Manager

19 Appendix CEIP Global Mineral Resource Estimate CEIP Global Mineral Resource Location Classification Tonnes Fe SiO 2 Al 2 O 3 P LOI (Mt) (%) (%) (%) (%) (%) Murphy South Indicated Inferred Boo-Loo Inferred Total 1, The mineral resource estimates were carried out following the guidelines of the JORC Code (2004) by Coffey Mining Ltd. CEIP Exploration Target *The information in this presentation that relates to exploration targets at the Central Eyre Iron Project is based on and accurately reflects information compiled by Mr Albert Thamm, Coffey Mining, who is a consultant and advisor to Iron Road Limited and a Fellow of the Australasian Institute of Mining and Metallurgy. Mr Thamm has sufficient experience relevant to the style of mineralisation and the type of deposits 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 Thamm consents to the inclusion in the report of the matters based on his information in the form and context in which it appears on 31 August, 2009 in West Perth.