reis 2013 broken hill - carpentaria exploration asx:cap
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The 3rd annual Resources & Energy Investment Symposium (REIS) is on 19-22 May, once again held in the unique city of Broken Hill; Last year’s event exceeded the expectations of all that attended - including over 350 delegates, 12 keynote speakers and more than 30 resource companies presenting their investment opportunities. A focus for this year’s symposium will be on the current economic climate including its challenges and opportunities, not only in the Australian resources industry, but Australia’s position in the international market.TRANSCRIPT
Carpentaria Exploration Ltd Resources and Energy Investment
Symposium - Broken Hill
May 21st 2013 We find it. We prove it. We make it possible.
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CARPENTARIA Key Messages
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• Hawsons Iron Project is a quality asset set to stand above its peers
• Ownership and JV status se<led a=er two years -‐ Joint Venture can focus on delivering the project
• Bankable Feasibilty Study to conEnue with $5.0 million funding from Pure Metals potenEally adding great value to the project
Disclaimer
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This presenta,on has been prepared by the management of Carpentaria Explora,on Limited (CAP) for the benefit of analysts, brokers and investors and not as specific advice to any par,cular party or persons. The informa,on is based on publicly available informa,on, internally developed data and other sources. Where an opinion is expressed in this presenta,on, it is based on the assump,ons and limita,ons men,oned herein and is an expression of present opinion only. No warran,es or representa,ons can be made as to origin, validity, accuracy, completeness, currency or reliability of the informa,on. CAP disclaims and excludes all liability (to the extent permiGed by law) for losses, claims, damages, demands, costs and expenses of whatever nature arising in any way out of or in connec,on with the informa,on, its accuracy, completeness or by reason of reliance by any person on any of it. Where CAP expresses or implies an expecta,on or belief as to the success of future explora,on and the economic viability of future project evalua,ons, such expecta,on or belief is expressed in good faith and is believed to have a reasonable basis. However, such expected outcomes are subject to risks, uncertain,es and other factors which could cause actual results to differ materially from expected future results. Such risks include, but are not limited to, explora,on success, metal price vola,lity, changes to current mineral resource es,mates or targets, changes to assump,ons for capital and opera,ng costs as well as poli,cal and opera,onal risks and governmental regula,on outcomes. CAP does not have any obliga,on to advise any person if it becomes aware of any inaccuracy in or omission from any forecast or to update such forecast.
CARPENTARIA EXPLORATION Company Snapshot
ASX : CAP CASH 10th May 2013 A$3.8 million ISSUED SECURITIES 108 m shares MARKET CAP. (@ $0.24) $26 million Board of Directors Nick Sheard – Geophysicist Bob Hair – Lawyer Bin Cai – Accountant Neil Williams – Geologist Paul Cholakos – Mining Engineer
KEY ASSET Hawsons Iron Project JV – Carpentaria 60% BMG in Liq. 40%-‐ Pure Metals to acquire
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HAWSONS IRON PROJECT Key Facts
Studies – Audited Prefeasibility study
completed (ASX release Nov 2011-‐ (2004 JORC Code))
– BFS underway Aim
– 10 to 20 Mtpa concentrate (69.5% Fe)
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JORC Inferred Resource – 1.4 Billion tonnes for 220 Million tonnes con’. – 15.5% mass recovery – 69.9%Fe and 2.50% SiO2
Explora:on Target 1 – 6-‐11 Billion tonnes at 14-‐17% mass
recovery 69%Fe 2.5% SiO2 (defined by drilling and assaying all magneEc anomalies combined with detailed magneEc modelling)
1 The potential quantity and grade of the exploration targets is conceptual in nature and there has been insufficient exploration to define a Mineral Resource. It is uncertain if further exploration will result in the determination of a Mineral Resource.
HAWSONS IRON PROJECTHawsons Iron Project vs Sydney Harbour"
20 kms
Sydney Harbour
Greater Sydney Area
Botany Bay
HAWSONS IRON PROJECT Key Development Advantages
• ExisEng rail and port infrastructure • ExisEng power and water supply • Transport concept
– Slurry to rail – Rail first 10Mt – Pipeline for full producEon – Port Pirie transhipment to Cape size ships
following low cost upgrade – MoU’s in place
• Large deposit with 0.3 waste to ore raEo and no internal diluEon
• Very so= siltstone ore – low cost processing – Approx. one quarter power usage of
standard magneEte iron ores • Grid power – $0.085Kwh • Lower labour costs • No NaEve Title – full access to project
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Port Pirie Spare Berths
HAWSONS IRON PROJECT 2011-‐2013
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Results
• ConEnued sole funding project – over $4m in 2 years – Reducing key risk areas – processing,
geology, improving viability
• Strengthened the Board
• NegoEated a deal with largest shareholder
Specific Challenges
• Internal dispute within JV Partner BMG (40% share) – no funding for one year
• Subsequent LiquidaEon of BMG – Further one year delay – almost complete
• Shareholder challenge – Interest in the project
HAWSONS IRON PROJECT Global Challenges
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Volaclity in iron ore price in 2012
• resulted in some magneEte projects and infrastructure projects being shelved
• Hawsons esEmated costs are at the right place of the cost curve and studies have conEnued to add value
HAWSONS IRON PROJECT Global Challenges
Challenge • Extreme Eghtening in capital
markets
• CauEous Chinese magneEte investment
• slowed development of many projects
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Results • InvesEgaEng lower capital cost
opEons
• Deal with Pure Metals for $5.0m extra funding to the project
Quality of the Hawsons Project has met most of these challenges so far New deal with Pure Metals will maintain project momentum
HAWSONS IRON PROJECT Pure Metals Deal
• Pure Metals are a related party to CAP 19% shareholder Silvergate Capital
• Pure Metals to complete purchase from Liquidator – Ownership CAP 60%, Pure Metals 40% – est. May 31st
• ParEes agree on work program
• Then Pure Metals to : – Sole Fund $5.0 million in 12 months – Pay CAP $1.0 million cash – Pay CAP $2.8 million cash at a Eme the earlier of compleEon of
Federal Court proceedings or two (2) years for reimbursement of CAP past expenditures
– The Federal Court has ruled the sale from the Liquidator of the 40% interest can proceed in response to a challenge to the Liquidators acEons by a third party
– Final determinaEon date to be set, however Judge already ruled “no serious quesEons to be tried”
HAWSONS IRON PROJECT Moving Forward
Benefits of Deal with Pure Metals • $5.0 million to be spent on project
• $3.8m cash to CAP in a difficult market without diluEon
• Reduce CAP’s ongoing funding requirement for Hawsons to 60% • Increase project access to iron ore end users and Asian capital markets • Secure funding in difficult market shows confidence in project
• CAP to retain majority 60% ownership through above deal
HAWSONS IRON PROJECT The Way Forward
Focus on schedule and risk • Resource-‐ relaEvely low risk • Processing – relaEvely low risk
– Proof of concept-‐ small scale Pilot Plant work recent results confirm 69% Fe achievable within our cost esEmates
– flexibility to explore lower cost opEon of 66% Fe vs higher cost 69% Fe opEon
• Mining – economic opEon found, in-‐pit crush and convey appears best. room for opEmisaEon
• EIS guidelines provided and State Significant Project declared
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SEM image of Hawsons Concentrate at an intermediate processing stage
HAWSONS IRON PROJECT The Way Forward – State Significant Project
• OpEmise producEon rates uElising exisEng infrastructure for Stage 1 but maintain project scalability (Stage 2)
• ConEnue EIS – Focus on stakeholder engagement and
associated acEviEes – permiong requirements for site and
transport infrastructure – CompleEng EIS by Nov.2014 – Lodge Mining Lease ApplicaEon
• Explore opEons to accelerate the BFS while growing shareholder value
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Carpentaria’s Plan – Not Sexy, but what is needed now
CARPENTARIA Key messages
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• Hawsons Iron Project is a quality asset set to stand above its peers
• Ownership and JV status settled after two years - Joint Venture can focus on delivering the project
• BFS to continue with $5.0 million funding from Pure Metals potentially adding great value to the project
Carpentaria Exploration We find it. We prove it. We make it possible. Phone: +61 7 3220 2022
To find out more, visit us at www.capex.net.au
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The informa,on in this presenta,on that relates to Explora,on Results and Resources is based on informa,on compiled by S.N.Sheard, who is a Fellow of the Australian Ins,tute of Geoscien,sts and has had sufficient experience which is relevant to the style of mineraliza,on and type of deposit under considera,on and to the ac,vity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edi,on of the 'Australasian Code for Repor,ng of Explora,on Results, Mineral Resources and Ore Reserves'. S.N.Sheard is an employee of Carpentaria and consents to the inclusion in the report of the maGers based on his informa,on in the form and context in which it appears.
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