Investor Update Macquarie Australia Corporate Day Hong Kong & Singapore September 2012

Transcription

1 Investor Update Macquarie Australia Corporate Day Hong Kong & Singapore September 2012

2 Disclaimers Competent Persons The information in this presentation that relates to pre-mining Ore Reserves, Mining Production and Cost Estimation for the Santa Rita Nickel Deposit is based on information compiled by Mr. Carlos Guzmán who is a Member of The Australasian Institute of Mining and Metallurgy. Mr. Guzmán is a Mining Engineer, Principal and Project Director with NCL Brasil Ltda and is a consultant to Mirabela Nickel Limited. Mr. Guzman qualifies as a Competent Person as defined in the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code) and is a Qualified Person in accordance with NI Mr. Guzmán consents to the inclusion in the presentation of the matters based on his information in the form and context in which it appears. The information in this report that relates to Exploration Results is based on information compiled by Mr Lauritz Barnes who is a consultant to Mirabela Nickel Limited. Mr Lauritz Barnes is a Member of both The Australian Institute of Geoscientists and The Australasian Institute of Mining and Metallurgy. Mr Barnes has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which is being undertaken 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 Barnes consents to the inclusion in the report of the matters based on the information in the form and context in which it appears. Forward Looking Information Certain information in this presentation, including all statements that are not historical facts, constitutes forward-looking information within the meaning of applicable Canadian securities laws. Such forward-looking information includes, but is not limited to, information which reflect management s expectations regarding Mirabela s future growth, results of operations (including, without limitation, future production and capital expenditures), performance (both operational and financial) and business prospects (including the timing and development of new deposits and the success of exploration activities) and opportunities. Often, this information includes words such as plans, expects or does not expect, is expected, budget, scheduled, estimates, forecasts, intends, anticipates or does not anticipate or believes or variations of such words and phrases or statements that certain actions, events or results may, could, would, might or will be taken, occur or be achieved. In making and providing the forward-looking information included in this presentation, the Company has made numerous assumptions. These assumptions include among other things: (i) assumptions about the price of nickel and other base metals; (ii) that there are no material delays in the optimisation of operations at the Santa Rita Operation; (iii) assumptions about operating costs and expenditures; (iv) assumptions about future production and recovery; (v) that the supply and demand for nickel develops as expected; (vi) that there is no unanticipated fluctuation in interest rates and foreign exchange rates; and (vii) that there is no material deterioration in general economic conditions. Although management believes that the assumptions made and the expectations represented by such information are reasonable, there can be no assurance that the forward-looking information will prove to be accurate. By its nature, forward-looking information is based on assumptions and involves known and unknown risks, uncertainties and other factors that may cause the Company s actual results, performance or achievements, or results, to be materially different from future results, performance or achievements expressed or implied by such forward-looking information. Such risks, uncertainties and other factors include among other things the following: (i) decreases in the price of nickel and copper; (ii) the risk that the Company will continue to have negative operating cash flow; (iii) the risk that additional financing will not be obtained as and when required; (iv) material increases in operating costs; (v) adverse fluctuations in foreign exchange rates; (vi) the risk that concentrate produced will not meet certain minimum specifications; (vii) production estimates may not be accurate; (viii) environmental risks and changes in environmental legislation; (ix) failure to comply with restrictions and covenants under the Unsecured Senior Notes; and; (x) changes in the terms of the Leasing Facility in order to achieve successful syndication. The Company s MD&A and the annual information form contain information on risks, uncertainties and other factors relating to the forward-looking information. Although the Company has attempted to identify factors that would cause actual actions, events or results to differ materially from those disclosed in the forward-looking information, there may be other factors that cause actual results, performances, achievements or events not to be anticipated, estimated or intended. Also, many of the factors are beyond the Company s control. Accordingly, readers should not place undue reliance on forward-looking information. The Company undertakes no obligation to reissue or update forward-looking information as a result of new information or events after the date of this presentation except as may be required by law. All forward-looking information disclosed in this presentation is qualified by this cautionary statement. 2

3 Mirabela highlights World class nickel operation with a 22 year reserve life and potential to extend Mirabela has successfully delivered the Santa Rita project with mining operations and the processing plant now running at full capacity Aggressive cost reduction and optimisation programs are underway and starting to deliver results Off-take agreements for 100% of concentrate production until end of 2014 World class site infrastructure with access to grid power, water and logistics Exciting organic growth portfolio Strong management team & highly skilled workforce Excellent safety and environmental record 3

4 Mirabela corporate information ASX Price and Volume 29 August 2012 Share Price (A$) Week High/Low(A$) 1.74/.22 Shares Outstanding (mill) 877 Market Cap (A$ mill) Cash (US$ mill)* Debt (US$ mill)* Source: bigcharts.com, 17 August 2012 Top Shareholders 1 Investor Shares Held % Resource Capital Funds Mgt 116,666, % Deans Knight Capital Mgt 116,074, % Perpetual Investments 98,582, % Lancaster Park 50,972, % 50% 40% 30% 20% 10% Average Volume (50 day) * As at 30 June, 2012 Shareholders by Region M (MBN:ASX) 0.11M (MNB:TSX) Mr Robert Disbrow 41,394, % 0% 1: Orient Capital Pty. Ltd. as at 31 July 2012 North America Australia Central America Asia UK Europe (ex UK) 4

5 Safety, environment & community Excellent Health & Safety Record Q 09 1Q 10 2Q 10 3Q 10 4Q 10 1Q 11 2Q 11 3Q 11 4Q 11 1Q 12 2Q MMA LTIFR (Mirabela + Contractors) Mirabela has achieved an excellent safety record during the ramp-up of the operation Mirabela is focused on safety training, and the implementation of best practices aimed at achieving the safest possible work environment Strong Environmental, Government & Community Programs In full compliance with all environmental operating requirements Strong government and community engagement Major employer in the region and an important part of the communities in Ipiau & Itagiba 5

6 Substantial reserves and resources 22 year mine life based on reserves JORC mineral reserves and resources (as at 31 December 2010) 1 Classification 2,7 Tonnes (M) Nickel grade (%) 3 Copper grade (%) Recovered Nickel (t) 4 Open-cut reserves Proven % 0.14% 64,100 Probable % 0.13% 505,700 Total % 0.13% 569,800 Open-cut resources 5 Measured % 0.14% n/a Indicated % 0.13% n/a Inferred % 0.14% n/a Total % 0.14% n/a Underground resources 6 Inferred % 0.23% 690,000 2 ¹ Mineral reserves referred to in this document are reported in accordance with the JORC Code. Mineral resources that are not mineral reserves do not have demonstrated economic viability. Reserves are included in resources. ² Reflects strip ratio of 5.0:1 ³ Contained nickel tonnes of 829,800 4 Weighted average recovery of 68.7% 5 Based on a weighted average cut-off grade of 0.25% nickel 6 Based on a weighted average cut-off grade of 0.50% nickel 7 As at 30 June 2012, a total of 9,238,856 tonnes of ore has been mined from reserves at an average nickel grade of 0.48% Open Pit extension drilling program completed; resource upgrade expected at the end of Q3 Source: Santa Rita Project, Brazil Technical Report (22 nd March 2011) 6

7 Mirabela has delivered a world class operation in two years Total material mined and ore grade Ore milled, grade processed and nickel recovery Waste mined (kt) Ore mined (kt) Nickel grade (%) 14, % 12, % 0.55% 1,997 10,000 1,693 1,774 1, % ,295 8, % % 6, % 0.48% 0.48% 0.50% 4,000 2, % 6,578 8,155 8,067 7,825 8,742 10,166 8,944 8,539 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q % 0.40% Nickel in concentrate produced and sold C1 unit cash costs Nickel in concentrate produced (t) Nickel in concentrate sold (t) Cash Cost US$/lb BRL/USD 6,000 5,000 4,000 3,000 2,000 2,359 3,104 2,084 3,909 4,228 5,155 4,155 4, , ,405 3,676 2,825 3,395 4,605 5,029 4,245 4,276 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q

8 Overview of Q quarter Achieved full year unit cash cost guidance six months early with Q2 unit cash costs of US$6.03/Ib Production of 4,276 tonnes of nickel in concentrate Mining total material moved on target at 10.0 million tonnes Average plant nickel feed grade of 0.51% with nickel recoveries in line with ore quality at 58% 2 nd line crusher successfully commissioned and desliming plant fully operational Open pit extension drilling programme successfully completed Balance sheet strengthened with successfully A$120 million equity raising 8

9 2012 production & cost guidance Production of between 19,000 and 21,000 tonnes of contained nickel in concentrate On track to achieve towards the lower end of the production guidance Cash costs to be below US$6.00/lb for the remainder of year At current BRL:USD exchange rate of 2: capital expenditure budget of US$60 million US$30 million spent in H1 9

10 Mine ramp up achieved and now on sequence Mt Total Material Moved H1 Actual : Actuals for 2009, 2010, 2011, Forecast for 2012 (Actual H1) Mirabela s 40 Mtpa Open Pit Mining Operation Mine ramp up to full production achieved Geological resource model has been updated to include detailed ore zone and faulting information Comprehensive review of blast-hole drilling grade control showing close match on all key variables Mine now on sequence to mine plan 10

11 Mirabela mobile equipment fleet Drill Rigs (x11): - Rock L8 (x4); - Pit Viper 271 (x2); - DML45 HP (x5). Front End Loader (x3): - 992K (x1); - 994F (x2). Dozers (x8): - CAT D9T (x2); - CAT D10T (x2); - Komatsu 375 (x4). Excavators (x7): - O&K RH90-C (x1); - O&K RH120-E (x3); - CAT 345D (x1); - Liebherr (x2) (phasing out). Trucks (x18): - CAT 777F (x6); - CAT 785D (x12). Other: Graders CAT 16M (x3); Wheel Tractors CAT 834H (x2); Retro excavators 416E (x1); Contractor CAT 777 trucks (x3); plus loaders (x2). 11

12 Processing plant expansion now complete Plant now running at full capacity of 7.2Mtpa 2 nd Line Crusher & Desliming Plant projects now operational Focus now on recovery improvement & efficiency 12

13 Conventional Ni sulphide process flow sheet Trucking Primary Crusher ~80% passing 250mm 13

14 Mirabela continues to deliver a high quality concentrate to its customers Norilsk Shipment at Ilheus Port Mantyluoto Port, Finland First nickel concentrate delivery to Votorantim in November 2009 Over 185,000 dmt of concentrate has been delivered to Votoranim First nickel shipment to Norilsk sailed in January ships have been sent to Norilsk totalling over 73,000 dmt of concentrate All concentrate sold has been within offtake specifications 14

15 Mirabela growth strategy PHASE 1 COMMISSIONING & RAMP-UP PHASE 2 SELF-FUNDED ORGANIC GROWTH & OPTIMISATION PHASE 3 EXTERNAL GROWTH Processing Plant Ramp-Up Mining Ramp-Up Nickel Recovery Stabilization Build Operating Capability Mine & Plant Optimization 9 Mtpa Open Pit & Plant Expansion - Pre-feasibility study started - Open-pit extension drilling program completed - Study completion expected end of Q1, 2013 Ongoing Maintain Independence Develop Support Systems Complete Pre-Stripping 7.2 Mtpa Plant Expansion Desliming Circuit Primary Crusher Upgrade Regional Tenement Maintenance - Ongoing tenement maintenance - Palestina drilling underway (license requirement) - Leverage Brazilian exploration platform Underground Project & Near Mine Exploration - Drilling programs defined - Programs will commence once Company financials improve On hold Base Metal Focus Leverage Strong Brazilian Platform OPERATION DELIVERED GROWTH RESTARTED FRAMEWORK DEFINED 15

16 Open pit extension drilling successful Schematic Longitudinal Projection Open pit extension drilling programme has been successfully completed (14 drill holes) Results closely match our resource interpretation, showing the continuation of the ore-body underneath the North Pit and support the trend of improving widths and grades at depth Updated In-pit Resource expected end of Q3 Composite results from Pit Extension Drilling (1) Hole ID From (m) Composite down-hole width (m) Ni% Cu% MBS MBS MBS MBS-625 (2) MBS MBS MBS MBS MBS MBS MBS MBS MBS MBS Drilling has recommenced at Palestina. First results are expected end of Q3 (1) 0.4% Ni cut-off grade, 4m minimum mining width (2) Fault affected intersected fault in position of expected mineralised zone Note: The standard assay method ME-ICP61 (four acid digest with an ICP-AES finish) has been used for all the drill results included in the above table. This method tends to be slightly conservative for results above 0.6% nickel and samples with a result above this are currently being assayed using an ore grade method. All the holes included in the table above will be re-reported to include the ore-grade assays with the remaining four holes during the second quarter. 16

17 Softening commodity prices due to uncertainty regarding global growth Nickel Price vs. Nickel Stock Level 1 Nickel Price Nickel Stocks (US$/Tonne) (million) Demand Pressures - Ongoing European uncertainty - Perceived softening in China growth - Nickel trading below marginal costs - Low nickel price appears to be driven by negative market sentiment as much as supply/demand fundamentals Sources: 1. Bloomberg, 3/9/ Shanghai Tsingshan Mining Investment Co., a unit of Tsingshan Holding Group, China s largest privately owned stainless-steel producer Supply Pressures/Responses - Almost 50% of NPI capacity suspended as price falls below marginal costs 2 - Extended production shutdowns at two large nickel laterite operations - Further start-up and ramp-up delays at a number of other large laterite operations - Increasing pressure from Indonesia on the supply and cost of laterite ore exports 17

18 Longer term consensus on potential supply shortages and strengthening prices 610kt of yet unidentified new nickel projects required to meet long term demand 1 Average Nickel laterite and sulphide mined grades continue to decline adding to the cost of producing nickel NPI costs under pressure due to increasing supply costs Brook Hunt incentive price for new nickel projects is US$16.5 to 17.5/lb (2011 terms) 1 Brook Hunt long term nickel price stands at US$13.0/lb (2011 terms) 1 Source 1: Brook Hunt (A Wood Mackenzie Company) - Nickel Market Service

19 Debt overview Mirabela s Debt Position: Debt re-financing - April 2011 US$ 395 million bond issue with an 8.75% semi-annual coupon One bullet payment in April 2018 Banco Bradesco S.A. facility - January 2012 US$ 50 million unsubordinated debt with interest payable semi-annually at LIBOR +6% 50% of principal due in month 12, and then repayable in equal instalments in months 24, 30 and 35 Caterpillar Financial Services Corp. facility March month leasing facility with interest paid at US$ LIBOR + COF % As at 30 June 2012 US$21 million outstanding Atlas Copco Customer Finance facility January 2012 US$ 5.2 million equipment finance facility with interest paid semi-annually, fixed at 6% US$ mm 400 Principal is paid semi-annually in equal instalments over 36 months As at 30 June 2012 US$4.4 million outstanding 50 0 Current maturity profile (US$M) Senior Unsecured Notes Banco Bradesco Facility Caterpillar Facility Atlas Copco Facility Bullet payment in April

20 Conclusions Mirabela has successfully delivered the Santa Rita project Aggressive cost reduction and optimisation programs are underway and starting to deliver results 22 year open pit reserve life underpins Mirabela s strategic importance in the nickel market Organic growth activities are continuing with a successful open pit extension drilling program completed and the 9Mt feasibility study underway Mirabela is positioned to take advantage of a strengthening nickel market 20