Emerging Producer in the. Murchison Goldfields

Transcription

1 Emerging Producer in the Kirkalocka Gold Project Update April 2012 Murchison Goldfields ASX:MUM

2 Release of Feasibility Study Released April 2, 2012 Demonstrates the recommissioning of Kirkalocka is economic Project has been de-risked and is moving towards 50,000ozpa NPV of $66 million and an IRR of 72% at a gold price of A$1600 Every $50 increase in the price of gold o NPV increases by $9 million or more o IRR increases by 9% or more Debt providers in discussions with the company to fund the project Exploration provides upside potential for the company including significant higher grade near surface targets to increase life of mine and head grade 6,000m drilling program to be completed by June 2

3 Financial Parameters Gold price A$1,500 (base case) A$1,650 (base case +10%) A$1,350 (base case - 10%) A$1,600 (spot price) Net cash flow (before tax) $66 million $100 million $31 million $88 million NPV $48 million $75 million $19 million $66 million IRR 55% 81% 28% 72%

4 Capital Cost Parameters Item Initial A$ million Year 2 A$ million Pre-production mining $8.6 - Treatment plant refurbishment costs $2.6 - Scrubber and regrind mill $1.4 - Communications & IT $1.1 - Environmental bonds $1.0 - Fine ore stockpile system $0.8 - Leach agitators $0.6 - Intensive leach reactor $0.5 - Lift 1 tailings storage facility $0.5 - Secondary and tertiary crushing - $6.8 Other $4.4 $1.1 Total $21.5 $7.9

5 Feasibility Parameters Parameter Ore processed - g/t Au 1 Strip Ratio Average Annual throughput oxide / primary FS Result 7M 1.1 g/t Au 3.5 :1 Waste:Ore ratio 2.1 Mtpa / 1.6 Mtpa Process Recovery oxide / primary 95% / 89% Initial capital expenditure Mining Costs Processing Costs Administration Costs Life of Mine (LOM) Average LOM Cash Operating Cost/Oz Au (C1) 2 $21.5 million $19.43/t ore $12.36/t ore $2.29/t ore 4.75 years $1,073/Oz Au Notes: 1 The difference between the Ore Reserve and estimated processed tonnes and grade is that it is anticipated as part of the Life of Mine (LOM) plan that low grade material will be stockpiled. The low grade material may be processed towards the end of the LOM. 2 C1 definition includes operating and administration costs, and excludes royalties.

6 Kirkalocka Development Done Completion of feasibility study Q Define near surface mineralisation along 2.8km strike Target an increase life of mine, grade and resource base Q3 Project funding 2012 Q4 Re-commission and re-license Kirkalocka Plant 2012 Q1/Q2 Commence Production

7 Project History Discovered by CRA Exploration in early 1990 s Campaign mined by Equigold from October 2002 until October 2005 Processing ceased August 2008 MMS acquired the Kirkalocka pit and surrounding tenements from Equigold in April 2008 MMS acquires Kirkalocka processing facility

8 Refurbished CIL Processing Plant

9 Refurbished Primary Crusher

10 Partially Refurbished SAG Mill

11 Refurbished Leach Tanks

12 106 Room Camp

13 Airstrip and Tailings Pond Airstrip Tailings Pond

14 2012 Mineral Resource & Ore Reserve 2012 Ore Reserve Reserve Category Dry Tonnes (million) Gold Grade (g/t Au) Gold In Situ (koz) Probable Reserve Mineral Resource Classification Ore Tonnage (Mt) Au Grade (g/t) In Situ Au (oz) Indicated ,000 Inferred ,000 TOTAL ,000

15 Ore Reserve and mineralisation extension Ore Reserve pit design excluding laterite pits Shallow near surface resource not currently included in Ore Reserve

16 Mount Magnet South Ore Reserve pit designs Ore Reserve laterite pit design Ore Reserve pit design

17 May - June 2012 Drilling Program Stage Number of holes Metres Objective 4A 24 2,240 South2 Supergene drilling and mining optimisation 4B 16 1,440 South3 Supergene drilling and mining optimisation 4C Step out drilling Southern Supergene under laterite 4D Laterite drilling ROM Pad Total

18 Opportunities within 900m of existing Ore Reserve Mount Magnet South future pit designs Future oxide pits Southern cutback extension Feasibility Study pit

19 May - June 2012 Drilling Program

20 Opportunities along strike Current Reserve Extents Poorly Tested Area Curara Well South 3.03 g/t Au 1.64 g/t Au 3.05 g/t Au 2.9 g/t Au 2.26 g/t Au

21 Board & Project Management Mr Reg Gillard, Non-Executive Chairman +30 years experience in corporate finance, management and governance. Non-Executive Chairman of Perseus Mining Ltd market cap of $A3.5M to A$1.2B in 7 years. Former Chairman of Moto Goldmines Ltd resource over 20Moz Au. Former Chairman Mt Edon Gold Mines Pty Ltd taken over by Teck Corporation and Camelot Resources for C$200M Mr Mark Pitt, Director Mining engineer with +40 years of experience. Former COO and Director for Dioro Exploration NL prior to takeover by Avoca Resources Ltd market cap of C$2.3B. Former General Manager of Operations for Saracen Mineral Holdings - 100,000 oz per annum production. Mr Patrick Flint, Director +17 years experience in management, development funding, project acquisitions and joint venture negotiations. Former CFO for Moto Goldmines Ltd. Instrumental in bringing Tiger Resources Ltd s DRC copper projects to production (current market cap of A$325M). Graham Howard, General Manager Projects Geologist with over 26 years of project and operations mining experience. Competent Person reporting the trebling of the resource at Newcrest Mining Ltd s Telfer project, (+600,000oz per annum operation). Managed Boddington Gold Project s feasibility study for Newcrest Mining Ltd, Australia s largest open cut gold mine with annual production of over 700,000oz per annum. Amy Barker, Environmental Manger Proven Achievement in Permitting and Licensing including FMG s Mainline Duplication and Christmas Creek Projects.

22 Capital Structure Shares on Issue 369,315,612 Listed options ($0.07 expiring 31 August 2014) Unlisted options ($0.06/$0.10 expiring 2012/2013) 42,479,275 7,750,000 Performance rights 16,999,998 Convertible notes ($0.10 November 2012) 10,000,000 Fully diluted shares 446,544,885 Top 40 shareholding 58.3% Share price (April 10, 2012) $0.065 Market Capitalisation (fully diluted $0.065) Enterprise Value (on a fully diluted basis) $24.0m $27.3m 22

23 Competent Persons statement The optimisation, mine design and Ore Reseve reporting was completed by Anthony Keers (CP) MAusIMM and Roselt Croeser MAusIMM, who are directors of Auralia Mining Consultants. Anthony Keers and Roselt Croeser have sufficient experience that is relevant to the style of mineralisation, type of deposit under consideration and to the activity being undertaken to qualify as Competent Persons as defined in the 2004 edition of the Australasian Code for Reporting of Exploration, Results, Mineral Resource and Ore Reserves (JORC, 2004). Anthony Keers and Roselt Croeser consent to the inclusion in this report of the matters based on the information in the form and context that the information appears. The information including Ore Reserve database compilation, project parameters and costs were completed under the overall supervision and direction of Graham Howard MAusIMM, who is a full time employee of Mount Magnet South NL. Graham Howard has sufficient experience that is relevant to the style of mineralisation, type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2004 edition of the Australasian Code for Reporting of Exploration, Results, Mineral Resource and Ore Reserves (JORC, 2004). Graham Howard consents to the inclusion in this report of the matters based on the information in the form and context in which it appears. Rounding, conforming to the JORC Code, may cause some computation discrepancies.

24 Competent Persons statement Competent Persons Statement Mineral Resource The estimation, depletion and reporting was completed by Lynn Olssen MAusIMM (CP) who is a full-time employee of Snowden Mining Industry Consultants. Lynn Olssen has sufficient experience that is relevant to the style of mineralisation, type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2004 edition of the Australasian Code for Reporting of Exploration, Results, Mineral Resource and Ore Reserves (JORC, 2004). Lynn Olssen consents to the inclusion in this report of the matters based on the information in the form and context that the information appears. The information including database compilation, geological interpretation and mineralisation wireframing were completed under the overall supervision and direction of Graham Howard, MAusIMM, who is a full time employee of Mount Magnet South NL. Graham Howard has sufficient experience that is relevant to the style of mineralisation, type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2004 edition of the Australasian Code for Reporting of Exploration, Results, Mineral Resource and Ore Reserves (JORC, 2004). Graham Howard consents to the inclusion in this report of the matters based on the information in the form and context in which it appears. Rounding, conforming to the JORC Code, may cause some computation discrepancies.

25 Disclaimer and Forward Looking Statements This presentation has been prepared by Mount Magnet South NL ( MMS or the Company ). This document contains background information about MMS current at the date of this presentation. The presentation is in summary form and does not purport to be all inclusive or complete. Recipients should conduct their own investigations and perform their own analysis in order to satisfy themselves as to the accuracy and completeness of the information, statements and opinions contained in this presentation. This presentation is for information purposes only. Neither this presentation nor the information contained in it constitutes an offer, invitation, solicitation or recommendation in relation to the purchase or sale of shares in any jurisdiction. This presentation may not be distributed in any jurisdiction except in accordance with the legal requirements applicable in such jurisdiction. Recipients should inform themselves of the restrictions that apply in their own jurisdiction. A failure to do so may result in a violation of securities laws in such jurisdiction. This presentation does not constitutes investment advice and has been prepared without taking into account the recipient s investment objectives, financial circumstances or particular needs and the opinions and recommendations in this presentation are not intended to represent recommendations of particular investments to particular persons. Recipients should seek professional advice when deciding if an investment is appropriate. All securities transactions involve risks, which include (among others) the risk of adverse or unanticipated market, financial or political developments. To the fullest extent permitted by law, MMS, its officers, employees, agents and advisers do not make any representation or warranty, express or implied, as to the currency, accuracy, reliability or completeness of any information, statements, opinions, estimates, forecasts or other representations contained in this presentation. No responsibility for any errors or omissions from this presentation arising out of negligence or otherwise is accepted. Certain statements made during or in connection with this presentation contain or comprise certain forward-looking statements regarding MMS s Mineral Resources and Reserves, exploration operations, project development operations, production rates, life of mine, projected cash flow, capital expenditure, operating costs and other economic performance and financial condition as well as general market outlook. Although MMS believes that the expectations reflected in such forward-looking statements are reasonable, such expectations are only predictions and are subject to inherent risks and uncertainties which could cause actual values, results, performance or achievements to differ materially from those expressed, implied or projected in any forward looking statements and no assurance can be given that such expectations will prove to have been correct. Accordingly, results could differ materially from those set out in the forward-looking statements as a result of, among other factors, changes in economic and market conditions, delays or changes in project development, success of business and operating initiatives, changes in the regulatory environment and other government actions, fluctuations in metals prices and exchange rates and business and operational risk management. Except for statutory liability which cannot be excluded, each of MMS, its officers, employees and advisors expressly disclaim any responsibility for the accuracy or completeness of the material contained in this statement and excludes all liability whatsoever (including in negligence) for any loss or damage which may be suffered by any person as a consequence of any information in this statement or any error or omission. MMS undertakes no obligation to update publicly or release any revisions to these forward-looking statements to reflect events or circumstances after today s date or to reflect the occurrence of unanticipated events other than required by the Corporations Act and ASX Listing Rules. Accordingly, you should not place undue reliance on any forward-looking statements. 25

26 Suite 2, Ground Floor 10 Outram Street West Perth WA 6005 T: F: E: admin@mountmagnet.com.au 26