Doug Grewar Managing Director

Transcription

1 ABN Doug Grewar Managing Director Melbourne Mining Club 16 March 2010

2 Legal Disclaimer The information contained in this presentation does not constitute an offer, invitation, solicitation or recommendation in relation to the subscription, purchase or sale of securities in any jurisdiction and nothing in this presentation shall form the basis of any contract or commitment. In particular, this presentation does not constitute an offer to sell, or a solicitation of an offer to buy, securities in the United States or to or for the account or benefit of any U.S Person. Except as required by law, no representation or warranty, express or implied, is made as to the fairness, accuracy, completeness, reliability or correctness of the information, opinions and conclusions, or as to the reasonableness of any assumption contained in this. presentation. To the extent permitted by law, you release Drummond Gold Limited (DGO) and its officers, employees and agents from any liability without limitation arising as a result of the reliance by you or any other person on anything contained in or omitted from this presentation. This presentation contains certain Forward-Looking Statements regarding future events and the future financial performance of DGO. All statements, other than statements of historical fact, included herein, including without limitation statements regarding forecast cash flows and potential mineralisation resources and reserves, exploration results and future expansion plans and development objectives of Drummond Gold Limited are forward-looking statements that involve various risks and uncertainties many of which are outside the control of DGO. Any forward looking statements included in this presentation involve subjective judgement and analysis. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. The distribution of this presentation or information contained in it in jurisdictions outside Australia may be restricted by law and you should observe any such restrictions. The information contained in this presentation does not constitute investment, legal, accounting, regulatory, taxation or other advice and it does not take into account your investment objectives or personal situation or needs. You are solely responsible for seeking independent professional advice in relation to this presentation and any action taken on the basis of the information contained in it. No responsibility or liability is accepted by DGO or its officers, employees or agents for the information contained in this presentation or any action you take on the basis of this presentation. Melbourne Mining Club 16 March

3 Company Snapshot Listing Code DGO(ASX) ASX Listing Date 21 December 2007 Principal Activities Gold and base metals Share Price 15 March 2010 A$0.043 Market Capitalisation A$4.2M 12 Month Range A$0.030 A$0.125 Shares on issue 96.7 million Top 20 Shareholders 81.1% No of shareholders 660 approx Substantial Shareholders Founders Cash at Bank (December 2009) A$1.0M Debt Nil Web site Melbourne Mining Club 16 March

4 High quality, highly experienced board of directors John Dunlop Chairman Mining Engineer, respected company director. Chairman Alliance Resources Limited, Alkane Resources Limited, and Director Gippsland Limited, Copper Strike Limited Doug Grewar Managing Director Experienced Mining and Mining Contracting Industry Executive - DownerEDI, Macmahon Holdings, CSR Readymix Director Superior Coal Limited Ross Hutton Director Mining Engineer, Executive Project Management and Technical Management. Director Kagara Limited Brice Mutton Director Geologist, Former Chief Geologist Mount Isa Mines, and a senior mining executive Melbourne Mining Club 16 March

5 A Consistent Strategy Since Listing Highly focussed exploration Early production Acquisition for growth and cashflow The Plan Acquire Maldon Gold Project, commence gold production 2010 Build on existing Queensland gold resources through exploration and earn in, targeting medium term production Melbourne Mining Club 16 March

6 Resources and Assets Central Queensland Drummond Basin Assets Victoria Maldon (Acquisition) Historical production at Mt Coolon 230koz at Yandan 365koz Bonanza high grade epithermal underground Bulk low grade open pit Intrusion Related Gold Mt Coolon exploration office and modern camp Yandan exploration camp Mt Coolon Resource 283,000oz Yandan Resource 308,000oz (DGO earning 51%) Historical production Bendigo Zone 22moz Maldon Goldfield 1.75moz Eaglehawk Reef 491,000oz Inferred JORC Resource 182koz Quartz vein echelon reefs High grade field average 28g/t 250ktpa CIL Treatment Plant Support infrastructure Mine equipment inventory Quality management and personnel Melbourne Mining Club 16 March

7 Drummond Basin A Prime Address Pedigree Mining Area Close to infrastructure Power Water Tailing disposal 8M oz gold mined and resources Limited exploration especially at depth Only 10 years concerted effort Potential for discovery of high grade resources Melbourne Mining Club 16 March

8 Mt Coolon Mines and Prospects Highly focussed exploration area Initial exploration based on geochemistry Minimal exploration in areas of surface cover Significant opportunities from modern exploration techniques 3 advanced projects 4 granted mining leases More than 2000 square kilometres exploration tenements including Yandan Large drilling, geochemistry and GIS database Melbourne Mining Club 16 March

9 Koala high grade mine potential Koala 235Koz High grade gold vein 1.0km long and up to 8m wide 2-20m wide alteration halo around vein Not tested sufficiently at depth or along strike Decline in place Open cut and UG production possibilities Melbourne Mining Club 16 March

10 Koala north and south high priority targets Pajingo Cracow similarities Potential for mineralization on linking structures Targets defined by coincidence IP and aeromagnetics Previously untested by drilling A Company high priority Phase one 2010 drilling programme targeting Tower and Koala South anomalies Melbourne Mining Club 16 March

11 Yandan East Hill A real high grade mine possibility Earn in JV for 51% Synergies with Mt Coolon First option $1.0M High grade gold target JORC resource 308koz Discovery 1996 Confirmation of high grade and low grade zones Priority targets on new interpretation of the high grade zones and strike extension Melbourne Mining Club 16 March

12 Badlands Intrusion Related Gold Style Polymetallic Gold Silver Lead Zinc large scale deposit Intrusion related gold style mineralisation similarities with Mt Wright and Mt Leyshon gold deposits Characterized by its proximity to the Manaman Granodiorite and the TPM Copper Gold skarn Significant soil geochemistry and rock chip sampling confirmed by RC drilling program A discrete target which requires a priority deep diamond drilling program Melbourne Mining Club 16 March

13 Maldon Acquisition Maldon Gold Project Acquisition Script only acquisition Formal valuation by IER $8.2M Comparative value of resource companies without decline development or established access to resource. Maldon Plant and Equipment valued at A$4.4M alone Maldon base production case (~20,000 oz pa) produces discounted cash flows of A$22.0m after tax over 5 years. Highlights of Maldon Acquisition Fully permitted and operational gold processing plant (250ktpa) Fully maintained mine access decline 1772m (50m crosscut to initial gold lode) Mining infrastructure in place Production ready within 6 months Tailings dam, water management Experienced mine-ready management team Additional treatment plant capacity available Prospective drill targets nearby Numerous external ore milling opportunities within trucking distance Quality Victorian acquisition opportunities Plant can be relocated in future to Mt Coolon Capital expenditure by Alliance on Maldon decline and associated infrastructure in excess of $20M. Melbourne Mining Club 16 March

14 Maldon A New JORC Resource Inferred JORC Resource of 182,000 oz (modeled at 12 g/t) Alliance South Lode, southern extension of Eaglehawk reef Independently estimated by Mining One Pty Ltd Based on 72 cored holes Open at depth and along strike in both directions Hypothetical mine model prepared and yielding average 8 g/t (AUD1200 oz) Drummond first steps - proceed immediately to trial mining Minimal capex required Melbourne Mining Club 16 March

15 Maldon ready for trial mining, high potential extensions Advanced mining project with tenements covering majority of historically significant Maldon Goldfield Melbourne Mining Club 16 March

16 Benefits of Maldon Gold Project Rapid early pathway to gold production High grade gold resource with potential for further discoveries May provide surplus cash to fund highly prospective Drummond Basin exploration Acquisition terms represent excellent value for Maldon assets and advanced project Introduction of cornerstone investors Melbourne Mining Club 16 March

17 Next Steps In the Drummond Basin Complete the first option stage of expenditure at Yandan and test for East Hill mineralisation orientation and strike extension. Conduct the phase one drilling program at Koala to test Tower and Koala South anomalies Ultimately build resource inventory to support construction of a Central Processing Plant scoping study completed. At Maldon Secure funding for company to complete condition precedent and begin trial mining Finalise acquisition with Alliance Resources Limited Commence trial mining by extending decline and developing 2 ore drives and 2 rises If trial mining successful, commence mining and processing Establish new vent shaft, extend tailings dam walls and further develop decline to access reef at lower levels Incorporate exploration underground drilling into the mining program to explore parallel historic reef systems within the Maldon Central Shear Zone Engage third party toll treatment opportunities to utilise processing capacity Prioritise exploration effort to increase resource base at Maldon. Melbourne Mining Club 16 March

18 Thank you

19 Maldon Gold Project Resources Estimated Gold Resource and Category Measured Indicated Inferred Total Mine Location '000t Au g/t '000oz '000t Au g/t '000oz '000t Au g/t '000oz '000t Au g/t '000oz South West Zone East Zone Total Maldon Gold Resources 31 October 2009 The data in this report that relates to Mineral Resources for the Alliance South Deposit is based on information evaluated by Mr TG Summons who is a Member of The Australian Institute of Geoscientists (MAIG) and Mr MV McKeown who is a Fellow the Australasian Institute of Mining and Metallurgy (FAusIMM). These people have sufficient experience relevant to the style of mineralisation and type of deposit under consideration and are each qualified to act as a Competent Person as defined in the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code ). Mr Summons is an associate of Mining One Pty Ltd, and Mr Mc Keown is an employee of Mining One Pty Ltd and they consent to the inclusion in the report of the Mineral Resource in the form and context in which it appears Maldon Gold Project Resources Gold Forum 7 December

20 Mt Coolon Resources Mine Location Resource Category Measured Indicated Inferred Total cutoff Koala Eugenia 000 t Au g/t Au oz 000 t Au g/t Au oz 000 t Au g/t Au oz 000 t Au g/t Au oz Au g/t Hectorina Pit , ,300 None Underground Extension , , , Tailings , ,700 None Total , , ,200 in whittle pit - direct mill , , outside pit 3, ,500 3, , Total 4, ,200 4, , Glen Eva Underground below pit ,200 21, , , Total , ,600 4, ,100 5, ,000 Drummond Gold Resources 30 September The data in this report that relates to Exploration Results, the accuracy and quality of data forming the basis of all resource estimates, and the interpretation of mineralisation at Eugenia, Koala and Glen Eva, are based on information compiled by Mr Erik Norum who is a Member of The Australasian Institute of Geoscientists and who has sufficient experience 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 (the JORC Code ). Mr Norum is a full-time employee of Drummond Gold Ltd and he consents to the inclusion in the report of the Mineral Resource in the form and context in which they appear. The data in this report that relates to Mineral Resources for the Eugenia, Glen Eva and Koala Deposit is based on information evaluated by Mr Simon Tear who is a Member of The Australasian Institute of Mining and Metallurgy (MAusIMM) and who has sufficient experience 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 (the JORC Code ). Mr Tear is a full-time employee of Hellman & Schofield Pty Ltd and he consents to the inclusion in the report of the Mineral Resource in the form and context in which they appear. Gold Forum 7 December

21 Yandan Project Resources Estimated Gold Resource and Category measured indicated inferred Total cu t- of f Mine Location Au g/t '000oz '000t Au g/t '000oz '000t Au g/t '000o z '000t Au g/t '000o z Au g/t Yandan Yandan 4, ,100 '000t 308 Total 4, , Yandan Gold Resources 30 September 2009 The information in this report that relates to Mineral Resources is based on information supplied by Peter Storey, who is a member of the Australian Institute of Mining and Metallurgy. Mr Storey is a full time employee of Straits Resources Limited and has sufficient experience relevant to the style of mineralisation, 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 Mineral Resources and Ore Reserves. Mr Storey consents to the inclusion in the report of the matters based on their information in the form and context in which it appears. Gold Forum 7 December