Bokoni Platinum Mines. Philip Kotze, CEO 2 October 2009

Transcription

1 Analyst site visit Bokoni Platinum Mines Philip Kotze, CEO 2 October 2009

2 Cautionary risk factors and forward-looking statement information This presentation includes certain statements that may be deemed "forward-looking statements" within the definition of the United States Private Securities Litigation Reform Act of All statements in this presentation, other than statements of historical facts, that address future production, reserve potential, exploration drilling, exploitation activities and events or developments that Anooraq expects are forward looking statements. Anooraq believes that such forward looking statements are based on reasonable assumptions, including the assumptions that: Bokoni will continue to have production levels similar to previous years; the planned Bokoni expansions will be completed and successful. Forward-looking statements, however, are not guarantees of future performance and actual results or developments may dif ffer materially from those in forward looking statements. Factors that could cause actual results to differ materially from those in forward looking statements include market prices, exploitation and exploration successes, changes in and the effect of government policies with respect to mining and natural resource exploration and exploitation and continued availability of capital and financing, and general economic, market or business conditions. Investors are cautioned that any such statements are not guarantees of future performance and those actual results or developments may differ materially from those projected in the forward looking statements. Investors should review the Company's annual Form on 20-F with the United States Securities and Exchange Commission and its home jurisdiction filings that are available at This presentation uses the terms "measured resources", "indicated resources" and "inferred resources". Anooraq advises investors that although these terms are recognized and required by Canadian regulations (under National Instrument Standards of Disclosure for Mineral Projects), the U.S. Securities and Exchange Commission does not recognize them. Investors are cautioned not to assume that any part or all of the mineral deposits in these categories will ever be converted into reserves. In addition, "inferred resources" have a great amount of uncertainty as to their existence, and economic and legal feasibility. It cannot be assumed that all or any part of an Inferred Mineral Resource will ever be upgraded to a higher category. Under Canadian rules, estimates of Inferred Mineral Resources may not form the basis of feasibility or pre-feasibility studies, or economic studies except for a Preliminary Assessment as defined under National Instrument Investors are cautioned not to assume that part or all of an inferred resource exists, or is economically or legally mineable. Factors that could cause actual results to differ materially from those in forward looking statements include market prices, exploitation and exploration successes, changes in and the effect of government policies with respect to mining and natural resource exploration and exploitation, and general economic, market or business conditions. In addition, actual results may be affected by the following specific risk factors. Costs, including design, procurement, construction and on-going operating costs and metal recoveries could be materially different from those discussed herein. There can be no assurance that mining can be conducted at the rates and grades assumed herein. There can be no assurance that infrastructure facilities can be developed on a timely and cost-effective basis. Energy risks include the potential for signific cant increases in the cost of fuel and electricity, and fluctuation in the availability of electricity. Projected metal prices have been used herein. The prices of these metals are historically volatile, and Anooraq has no control of or influence on the prices, which are determined in international markets. There can be no assurance that the prices of platinum, palladium, rhodium, gold, copper and nickel will continue at current levels or that they will not decline below the prices assumed herein. A significant increase in costs of capital could materially adversely affect the value and feasibility of constructing the expansions at Bokoni. Other general risks include those ordinary to large construction projects, including the general uncertainties inherent in engineering and construction cost, the need to comply with generally increasing environmental obligations, and accommodation of local and community concerns. The economics are sensitive to the currency exchange rates, which have been subject to large fluctuations in the last several years. Investors are cautioned that any such statements are not guarantees of future performance and those actual results or developments may differ materially from those projected in the forward looking statements 2

3 Presentation outline Anooraq: an overview Bokoni: poised to perform Asset portfolio: significant emerging producer Financing: in place and fully funded Conclusion: delivering a turnaround 3

4 Anooraq: an overview 4

5 Anooraq: the journey so far 1983 Anooraq incorporated in Canada 1999 Exploration focus shifts to South Africa 2004 Pelawan Investments effects reverse takeover of Anooraq 2006 Inward listing on JSE completed 4 Sep 2007 Announcement for purchase of Lebowa and JV Projects controlling interests from Anglo Platinum 2008 Finalisation of transaction ti continu ues 1 July 2009 Anooraq assumes operational co ontrol of Bokoni* * Pursuant to transaction agreements, Lebowa Platinum Mines (Lebowa) changes name to Bokoni Platinum Mines (Bokoni) 5

6 Company structure Pelawan Investments (BEE) 52% ESOP & Community Trusts (BEE) 3% Anooraq Anglo Platinum 26% Anglo Platinum (warehoused) 51% 49% Bokoni Platinum Holdings 100% 100% 100% 100% Boikgantsho Kwanda Ga-Phasha Bokoni Mines 6

7 Our assets Kwand Thabazimbi CRF Kwand B Thabazimbi Amandelbult Union Pilanesberg Northam Brits Zeerust Sedibelo BRPM Pandora Pr Joh Rustenburg Zeerust Impala RPM Lonmin Crocodile River Eland River Boikgantsho Polokwane M Kwena WF da Bokoni Mokopane Marula Twickenham Limpopo Dwaalkop da Bela Bela Modikwa Two Rivers Mototolo Ga-Phasha Groblersdal Der Brochen Everest Booysendal Witbank retoria annesburg SF North 7

8 Our strategy To be a significant mine-to-market PGM company with a substantial and diversified PGM asset base 1.Complete Lebowa Transaction to become a PGM producer control 200 Moz of PGM resources 2.Establish new Bokoni culture, track record new infrastructure cost reduction increase tonnages, ounces expand Merensky output exploit organic growth opportunities 3.Continue asset portfolio development Ga-Phasha, Boikgantsho, Kwandaa 8

9 Our team: technical expertise Philip Kotze President & CEO: Anooraq Industry experience: 28 years Positions held: AngloGold, Kalgold and Harmony Gold Dickson Mamosebo Section Manager: Middelpunt UG2 Industry experience: 22 years Bernard Wessels General Manager: Bokoni Mines Industry experience: 13 years Positions held: General Manager at Harmony Gold s Masimong and Kalgold operations Kevin Erasmus Section Manager: Vertical & UM2 Merensky Industry experience: 30 years Bava Reddy Executive Mineral Strategy: Anooraq Industry experience: 15 years Positions held: Senior Geologist at AngloGold; General Manager at Harmony Gold s Target operation Gerhard van Niekerk Section Manager: Brakfontein Merensky Industry experience: 27 years 9

10 Our empowerment credentials 55% BEE shareholding 52% Pelawan Investments broad-based, 100% black-owned company 42% women-ownedowned 3% community trusts, ESOPs source of employment in local l area direct shareholding in Anooraq Anooraq board is majority HDP 10

11 Bokoni: poised to perform 11

12 Bokoni: topographical map DIAMAND ZEEKOEGAT N Middel Punt Hill Vertical Shaft UM2 Incline MIDDELPUNT Brakfontein UMKOANESTAD BRAKFO ONTEIN KLIPFONTEIN Ga-Phasha AVOCAA PASCHASKRAAL DE KAMP TWICKENHAM SURBITON Total Strike Length 26km BALMORAL HACKNEY 12

13 Production profile: current and future Current production Stage 1 ( ) Stage 2 (2016 onwards) 4.4g/t 4..3g/t 4.4g/t 50ktpm Expand Merensky, maintain UG2 production to 160ktpm Technical studies indicate Bokoni value maximised at: 30ktpm 120ktpm 120ktpm 40ktp m 255ktpm ~ E oz per annum ~ E oz per annum ~ E oz per annum 13

14 Production prill split ⅔ of production from Merensky Reef 2:1 Pt:Pd ratio on Merensky Reef with reserve grade: 4.3g/t 4E Only Eastern Limb operation with significant Merensky production high in platinum value High reserve grade on UG2: 5.36g/t 4E 14

15 Mining sequence for the next 100 years Declines Ventilation shaft Vertical shaft UG2 Merensky Surface Current 70m m Current 300m X cut to reef Sub vertical shaft 0-35 yrs yrs m X cut to reef X tram haulage yr rs m X cut to reef 15

16 Mining sequence for the nex xt 100 years, cont d UG2 MER UG2 History MER History UG2 Capacity MER Capacity Tonnes to concentrator stockpile Tonnes (000's) 1500 MPH - 45 ktpm MPH ktpm UG2 Brakfontein 120 ktpm Brakfontein 120 ktpm MER Zeekoegat 120 ktpm MER MPH Vert # 120 ktpm

17 Transforming Bokoni Mining strategy establish and expand Brakfontein a new mine infrastructure maintain production at Vertical and MPH New business culture: SMART business S Safety M Management on-site technical team strengthened, lean A Accountability R Return on investment immediate access to existing production and cash flows from Bokoni existing infrastructure (incl. water & power) positions Bokoni for expansion fully-funded project base to allow 100% production growth from current base with no lead time T Teamwork correct level decision making fully-empowered corporate structure 17

18 Transforming Bokoni, cont d Reduce costs labour restructuring re-deployment of own labour, displacement of contractors equipment reclamation capital revision mine design and expenditure Increase production planning for success vamping logistics optimisation Disciplined approach to orebody management, grade control establish quality ore flow management system quality mining systems and controls 18

19 Transforming Bokoni, cont d New mine infrastructure in place for Merensky shaft system at Brakfontein Driving a lower Merensky unit cost West Main decline East Strike drive West Strike drive East Level 4 Raise line Box hole Level 5 Main ore pass system Strike conveyors Main ore pass system

20 Changing the cost profile Long-term: Medium-term: R705/t, R5hort-term: Sh R805/t, 250 PGM R6 R905/t, 000 oz, Dec PGM R oz, Dec PGM 2010 oz, Jun 2010 R1 153/t, H

21 Asset portfolio: significant emerging producer 21

22 Ga-Phasha Located adjacent and contiguous to Bokoni Platinum Mines potential synergies being evaluated Significant resources measured and indicated 25.7 Moz 4E, inferred 64.7 Moz 4E 10km strike length over both Merensky, UG2 reefs Originally envisaged as UG2 project potential production of oz 4E per annum via twin decline shafts 22

23 Boikgantsho Located on the Northern Limb of the Bushveld Complex adjacent to Anglo Platinum s Moga lakwena mine Resources indicated resources 7.7Moz 7Moz (3E), t of Ni inferred resources 4.1Moz (3E), t of Ni Preliminary assessment (March 2005) (1.25g/t 3PGM) with high base metal credits (0.15% Ni) open pit operation 32 year mine tpm strip ratio: 1,7:1 pre-feasibility underway 23

24 Financing: in place 24

25 Funding Purchase consideration R2.6 billion APL A preference shares: R1.2 bn 9 year term 12% coupon ro olled up to repayment 1 x mandatory debt refinance (years 3 to 6) Pelawan and APL B preference shares: R1.1 bn issued to Pelaw wan Finance SPV 9 year term zero coupon compulsory convertible into 227 million ARQ shares Pelawan shares locked in until 2015 SCB senior debt: R0.3 bn ARQ working capital ESOP and community y trust: R0.12 bn equity financing 14 million new ARQ share issuance application: AR RQ working capital (three years) 25

26 Funding, cont d Debt facilities SCB senior debt: R0.7 9 year term coupon: JIBAR % (excl liquid and reserving costs) R500m drawdown and R250m capital and interest rolled up for three years No refinance penalty APL operating cash fl ow shortfall facility up to R0.75bn to fund any opex and capex contributions by ARQ for three years 9 year term 15.84% (nacq) coupon rolled up to repayment 1 x mandatory debt refinance (years 3 to 6) APL standby facility 9 year term Security SCB: 51% of the asse 75 bn coupon: SA prime rate (currently 11%) rolled up ARQ has access to 80% of cash flows from Lebowa mine to service SCB senior debt APL: back ranked security to SCB ets and cash flows from the Lebowa Mine 26

27 Offtake and smelter options Offtake: Anglo Platinum Bokoni 5 year initial term option to exten nd for further 5 year term competitive market rates metal in concentrate delivered to Anglo Platinum Polokwane Smelter Complex Ga Phasha 10 year initial term option to extend for further 10 year term competitive market rates Polokwane smelter options Smelter option no. 1 metal in concentrate delivered to Anglo Platinum Polokwane Smelter Complex to acquire ownership interest in Polokwane Smelter Complex ownership interest determined relative to Ga Phasha feed at Polokwane vests upon extension of Ga Phasha offtake Smelter option no. 2 to acquire own nership interest in Polokwane Smelter Complex ownership interest determined relative to Anooraq group feed at Polokwane vests upon extension of Ga Phasha offtake 27

28 Conclusion: delivering a turnaround 28

29 Turn around strategy with an exciting project pipeline Bokoni Existing plan from Merensky and UG2 of 150koz Approved and funded expansion to 270koz 4E by 2013 Further potential expansion to 570koz 4E Production Ga-Phasha Progressing pre-feasibility study (synergy review) 10km of strike length over both Merensky and UG2 Reefs 270koz 4E per annum via twin decline shafts Advanced exploration Boikgantsho Near surface open pittable operation Progressing pre-feasibility Near surface with 32 year tpm Low strip ratio of 1.7:1 Advanced exploration Kwanda Early-stage exploration activ vities Early-stage exploration 29

30 Our position in the market 900 Attributable oz (m) 4E post transaction Anglo Implats Bokoni Lonmin Northam* Anooraq Eastern Aquarius* Kameni Elands Jubilee Nkwe Plats Holdco *Northam includes Booysendal *Aquarius includes Ridge Mining i 30

31 Enterprise value $/oz Impala 61 Lonmin EV / Moz of M&I (Measured and Indicated Resource) 55 latinum Australia Pl 52 Aq quarius Platinum Northam Platinum Anglo Platinum 46 Jubilee Platinum 42 Platmin Nkwe Platinu um Group Metals Average: $39/oz Source: Bloomberg, Company materials Notes: 1. Market capitalization as of August 27, 2009; calculated using fully diluted TSM method, inc 13 Anooraq 9 We esizwe Platinum 6 Eastern Platinum 2. Enterprise value equals market capitalization plus debt less cash balances 3. Attributable 4 PGE resources calculated including any earn-in, out arrangements 4. Anooraq proforma acquisition of 51% of Bokoni, and 1% of Ga Phasha, Boikgantsho and Kwanda as announced on May 14, 2009 for R2.6 billion 5. Proforma restructuring of WBJV resulting in PTM increasing its interest in Project 1 and 3 to 74% and Wesizwe increasing its interest in Project 2 to 100% 6. Aquarius Platinum proforma for Ridge Mining acquisition, Inferred resource excludes Chieftains Plain and Walhalla na Sylvania $/oz 50 EV / Moz of Inventory (Measured, Indicated and Inferred Resource) Aq quarius Platinum Platinum Australia Impala 35 Lonmin 26 Anglo Platinum 20 Platmin 18 Platinu um Group Metals 13 Northam Platinum 6 6 Wesizwe Platinum Anooraq Average: $19/oz 4 4 clusive of market value of listed warrants; converted at spot exchange rates Eastern Platinum Jubilee Platinum 3 Nkwe na Sylvania

32 Q&A 32

33 Mineral Reserves and Resources Merensky Grade g/t 4E 4PGE oz UG2 Grade g/t 4E M t M t Bokoni¹ Reserves Proven Probable Total Resources (excl reserves) Measured Indicated Total measured & indicated Inferred E oz Total 4E oz Total att 4E oz 100% 51% Ga-Phasha² Resources Measured Indicated Total measured & indicated Inferred Platreef Total Total Total Total att Total att Total att Grade Ni Cu Ni Cu 3E 3E Ni Cu g/t 3E % % 000t 000t oz oz 000t 000t M t Boikgantsho³ Resources 100% 100% 100% Measured Indicated % 0.08% Total measured & indicated % 0.08% Inferred % 0.09% % 51% 51% Source: Anglo Platinum 31 December 2008; assumes completion of acquisition of a 51% interest in Lebowa by Anooraq. Total Proforma Total Reserves Total measured & indicated (inc reserves) Total inferred resources Total Proforma Total Reserves Total measured & indicated (inc reserves) Total inferred resources Qualified Person G. Chunnett, Pr.Sci.Nat., Anglo Platinum October Source: Independent QP G.J. van der Heever, November The mineral resources are based on a US$20 gross metal value per tonne cut-off. Gross Metal Value per tonne (GMV/t) is sum of Pt, Pd, Au, Cu and Ni grades multiplied by the following metal prices: Pt - US$650/oz; Pd - US$250/oz; Au - US$375/oz; Ni - US$4/lb; Cu - US$1/lb. Metallurgical recoveries assumed to be 100%.

34 Analyst site visit Bokoni Platinum Mines Philip Kotze, CEO 2 October 2009