Presentation March 2015

Transcription

1 Presentation March ACN ASX: AOH FSE: A2O

2 Altona has runs on the board Luikonlahti plant, Outokumpu, Finland

3 Altona s Track Record Company formed in 2010 Outokumpu Project in Finland was financed and built on time and budget in 2012 Mine outperformed Paid back project debt 2 years early Sold Outokumpu for A$112 million in 2014 (market cap pre deal ~A$80 million) A$80 million (15 cents) returned to shareholders in February 2015 Cloncurry DFS and permitting completed Successful exploration - Resources increased 142% - Turkey Creek discovery Jumbo and massive sulphides at the Outokumpu Project Slide 3

4 Corporate Snapshot Major Shareholders Perpetual: 14.9% L1: 10.7% Board / management: 10.2% German retail: 7.5% Matchpoint / Shah: 5.1% Other institutional / HNW: 20.5% Top 20: 69.4% Market Status ASX (Australia) code: FSE (Frankfurt) code: Share price: Shares on issue: Market capitalisation: Cash (Feb 2015): Enterprise value: AOH A2O A$ M A$53M A$48M A$5M Close Price (A$/share) Daily Volume Traded On-Market Daily Close Price - AOH 18,000,000 16,000,000 14,000,000 12,000,000 10,000,000 8,000,000 6,000,000 4,000,000 2,000,000 Daily VolumeTraded On-Market Share performance graph is adjusted for capital return of 15 cents a share in February Slide 4

5 Our Strategy Altona is focussed on a transaction to realise and demonstrate value from the Cloncurry asset, a transaction could take many forms - Joint venture - M&A - Project sale Altona will avoid debt and dilution Altona aims to maximise the return to shareholders Cash will be husbanded At Cloncurry, Altona will continue with low-key, low-cost activities that add value and shorten lead times Why invest? Low market value for Cloncurry and track record of deals and shareholder returns. Altona represents a low-risk cash-backed option. Slide 5

6 Why Copper? Thousand Tonnes Thousand Tonnes Copper Prices & Inventories 1, SHFE COMEX LME US$ A$ 0 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 China Copper Imports Imports $4.25 $3.75 $3.25 $2.75 $2.25 $3.80 $3.60 $3.40 $3.20 $3.00 $2.80 $2.60 Copper inventories historically low; 5 days of consumption A$ prices relatively stable Continued strong Chinese copper imports Production deficit in 2014 Supply struggling (again!) 0 $2.40 Jan 13 Apr 13 Jul 13 Oct 13 Jan 14 Apr 14 Jul 14 Oct 14 Jan 15 Source: COMEX, LME, Reuters, SHFE, SNL, Terra Studio Slide 6

7 Cloncurry Project RC drilling at the Lady Clayre deposit

8 Cloncurry Project is in a World Class Mineral Field Slide 8

9 Little Eva - First development at Cloncurry Project Global Resource 287Mt at 0.6% copper at Cloncurry Project in 12 deposits Contains 1.65 million tonnes copper, 0.4 million ounces gold Two deposit styles: IOCG copper-gold deposits (red) and stratiform copperonly deposits (green) Little Eva Project (LEP) is focused on copper-gold deposits only Deposits in the LEP are Little Eva, Bedford, Lady Clayre and Ivy Ann Turkey Creek discovery likely to be incorporated into LEP Resources of 156Mt at 0.61% copper, (0.96Mt copper) in deposits not in DFS reserves / mine plan Slide 9

10 Simple Geology Little Eva Cross Section (25900mN) High grade Little Eva drill core Large bulk IOCG style deposit similar to Ernest Henry Reserves of 75Mt at 0.5% copper, 0.1g/t gold Slide 10

11 Competitive Copper Grade (First Quartile) 3.0 Size and grade of undeveloped open pit copper projects 2.5 Copper Grade (%Cu) First Quartile Second Quartile Third Quartile Fourth Quartile Little Eva 0.59% 0.5 Weighted Average Copper Contained in Resources (Mt) Source: Terra Studio Slide 11

12 Straightforward Bulk Mining Contract mining. Pit is 1.3km long, up to 370m wide, 240m deep. Low strip ratio of 1.8:1 after pre-strip. 90% of ore from Little Eva pit

13 Standard 7Mtpa Plant and Processing Simple and rapid flotation with coarse grind. 96% copper and 85% gold recoveries to a clean 25% copper and 4g/t gold concentrate (no arsenic, uranium)

14 Definitive Feasibility Study (DFS) Ernest Henry Mill Bankable study by GR Engineering Services in February 2014 Native title, environmental permits and mining leases all in place Material production of 39ktpa copper, 17kozpa gold Long mine life of minimum 11 years Concentrate trucked 65km to Cloncurry in half containers, rail to Townsville port Power via 9km line from Dugald mine proposed 220KV line or onsite power Ground water or access water pipeline Fly-in fly-out work force with 220 man village Copper-only deposits, Turkey Creek and oxide ore not in DFS Slide 14

15 Little Eva Has Competitive Cash Costs 3.5 C1 Cash Costs Q US$/lb First Quantum Antofagasta Norilsk Nickel Southern Copper KGHM Rio Tinto Little Eva Freeport McMoRan BHP Billiton Glencore Anglo American Costs Q Cumulative production (%) Source: GFMS, Thomson Reuters Slide 15

16 Turkey Creek Discovery: Not in mine plan Turkey Creek is an emerging 21Mt discovery Slide 16

17 Impact of Turkey Creek Confirms exploration potential of Altona s tenements Maiden resource of 21Mt at 0.6% copper for 123,300 tonnes contained copper Potential for additional 1-3 years production An additional year of production gives approximately A$40 million NPV Initial metallurgical testwork indicates high recoveries in Little Eva flotation scheme (chalcocite-bornite) Mining inventory next quarter Mine plan, layout, financial model and Environmental Management Plan to be modified to incorporate Turkey Creek Copper flower and outcropping copper ore at Turkey Creek Slide 17

18 Cloncurry Project Summary Near term production at Little Eva Robust financials Upside in wider Cloncurry Project Exploration Upside Feasibility complete and Little Eva permitted First production in 20 months from final investment decision 39ktpa copper and 17kozpa gold for at least 11 years NPV A$346 million (7.5% real pre-tax) All-in cash costs US$1.96/lb Capital cost US$231 million (A$294 million) Low capital intensity of US$6,000 per annual copper tonne Optimisation opportunity from current lower cost regime Almost 1Mt of copper in 8 deposits not in DFS Prior DFS level studies on these deposits Oxide ore yet to be considered Discoveries such as Turkey Creek will improve mine life and economics Multiple anomalies and targets to be tested in 800km 2 land holding Slide 18

19 Altona: A simple investment proposition Record of operational and financial success Record of exploration success Record of shareholders returns Strong cashed-up company Cloncurry is robust and development-ready Cloncurry has material scale and is growing Altona is leveraged to a deal on Cloncurry Altona team at Cloncurry Slide 19

20 Appendices Reconnaissance drilling near Mt Roseby

21 Experienced Team Alistair Cowden Managing Director Over 30 years as a geologist and mining company executive. Founded Altona precursor Vulcan Resources and Rox Resources, Archaean Gold and Magnetic Minerals. Iain Scott Chief Operating Officer Metallurgist, formerly Straits, Renison. With 25 years in mining and processing and 15 years at COO and MD levels. Eric Hughes Chief Financial Officer Accountant, formerly BHP Billiton. 25 years in financial management of resources companies. 15 years as CFO of listed companies. Roland Barstch General Manager - Exploration Geologist with 30 years exploration, development and production experience with Iron Ore Holdings, Crosslands Resources, SRK and WMC. Kevin Maloney Non-Executive Chairman Founder of The Mac Services. Extensive career in private investment, retail banking, finance and resources Steve Scudamore Non-Executive Director 28 years as a partner at international accounting and financial services firm KPMG. Paul Hallam Non-Executive Director Formerly Director of Operations at Fortescue and EGM Development and Projects for Newcrest. Peter Ingram Non-Executive Director 45 years mining and mineral exploration experience.

22 Little Eva DFS: Key metrics Units Project Life 11 Years Throughput 7,000,000 Tonnes per annum Average Strip Ratio 1:8:1 Copper Grade 0.6 % Gold Grade 0.1 g/t Copper Production 38,800 Tonnes per annum Gold Production 17,200 Ounces per annum Capital Expenditure 294 A$ millions Life of Mine Revenue (NSR) 2,931 A$ millions NPV (7.5% pre-tax real) 346 A$ millions Internal Rate of Return 29 % C1 Cash Cost 1.65 US$ per pound copper All-in Cash Cost 1.96 US$ per pound copper Operating Cost A$ per tonne milled See ASX release dated 13 March 2014 for DFS details. Slide 22

23 Little Eva Capital Costs A$ millions Pre-strip 52 Process Plant and Infrastructure 168 First Fill and Spares 12 Tailings Facility 18 Accommodation Village 18 Owners Costs 8 Contingency 18 Total 294 Excludes mobile fleet and working capital Capital cost (US$) Capital intensity (US$ capital per annual copper tonne)* US$262 million US$6,700 * USD:AUD 0.89 Slide 23

24 Little Eva Life of Mine Cashflow Totals FY 15 FY 16 FY 17 FY 18 FY 19 FY 20 FY 21 FY 22 FY 23 FY 24 FY 25 FY 26 FY 27 Capital costs (294) (44) (250) Revenue(NSR) 2, Operating costs Sustaining capital (1,654) - (7) (124) (175) (186) (184) (175) (165) (157) (159) (157) (94) (71) (117) - (6) (54) (8) (4) (3) (5) (7) (12) (14) (4) - - Royalties (191) - (1) (20) (21) (19) (20) (20) (19) (18) (18) (19) (9) (7) Total 675 (44) (252) All values in A$ millions. Key Assumptions 2015 to AUD:USD Copper (US$/lb) Gold (US$/ounce) 1,230 1,300 TC/RC (US$/tonne/US$lb) 75 / / Slide 24

25 Little Eva Project - Resources and Reserves Tonnes (m) Copper (%) Gold (g/t) Contained Copper (t) Contained Gold (oz) Sulphide Resources Measured , ,000 Indicated , ,000 Inferred , ,000 Total , ,000 Reserves Proven ,000 85,000 Probable ,000 90,000 Sub Total , ,000 Probable (stockpile) ,000 31,000 Total , ,000 Mining Inventory ,000 14,000 Little Eva Project comprises Little Eva, Bedford, Lady Clayre and Ivy Ann. Slide 25

26 Cloncurry Project Resource Estimates CONTAINED TOTAL MEASURED INDICATED INFERRED METAL DEPOSIT Tonnes Grade Copper Gold Tonnes Grade Tonnes Grade Tonnes Grade Cu Au Cu Au Cu Au Cu Au million tonnes ounces million million million % g/t % g/t % g/t % g/t I metre LITTLE EVA PROJECT - COPPER-GOLD DEPOSITS Little Eva , , Ivy Ann* ,000 17, Lady Clayre* ,000 85, Bedford* ,000 11, Sub-total , , COPPER ONLY DEPOSITS Blackard* , Scanlan* , Turkey Creek , Longamundi* , Legend* , Great Southern* , Caroline* , Charlie Brown* , Sub-total , TOTAL ,647, , * This information was prepared and first disclosed under the JORC Code 2004 Edition. It has not been updated since to comply with the JORC Code 2012 on the basis that the information has not materially changed since it was last reported. All other resources are classified and reported in accordance with the JORC Code 2012 edition. See ASX release of 23 October 2007 and 26 July 2011 (Longamundi, Great Southern, Caroline and Charlie Brown), 23 April 2012 (Bedford, Ivy Ann and Lady Clayre), 03 July 2012 (Blackard and Scanlan), 22 August 2012 (Legend), 27 May 2014 (Little Eva) and 18 March 2015 (Turkey Creek) for full details of resource estimation methodology and attributions. Little Eva is reported above a 0.2% copper lower cut-off grade, all other deposits are above 0.3% lower copper cut-off grade Note: All figures may not sum exactly due to rounding.. Slide 26

27 Disclaimer and JORC Compliance What You Should Know Find out more - This presentation is being used as a presenter s aid with summarised information. See Altona s other periodic and continuous disclosure announcements lodged with the Australian Securities Exchange, which are available at or for more information. Third party information - Altona does not make any representations as to the accuracy or otherwise of third party information, including where projections are given. Forward-looking statements - Within this presentation there may be certain forward-looking statements, opinions and estimates. These are based on assumptions and contingencies which are subject to change without notice and are not guarantees of future performance. Altona assumes no obligation to update such information. Taking action - Please undertake your own evaluation of the information in this presentation and contact your professional advisers if you wish to buy or sell Altona shares. Competent Person Statement and JORC Compliance Responsibility for entire release: Information in this presentation that relates to Exploration Targets, Exploration Results, Mineral Resources or Ore Reserves, is based on information compiled by Dr Alistair Cowden, BSc (Hons), PhD, MAusIMM, MAIG and Dr Iain Scott PhD Min. Processing, BSc Met. (Hons) who are both full time employees of the Company and who have sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which they are undertaking to qualify as Competent Persons as defined in the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (The JORC Code). Dr Alistair Cowden and Dr Iain Scott consent to the inclusion in the release of the matters based on their information in the form and context in which it appears. Slide 27

28 JORC Compliance Resource and Reserve estimates: The information in this presentation relating to estimates of Mineral Resources and Ore Reserves have been extracted from the following reports: ASX Release Date Title of ASX Release Outline of Relevance Resource Estimates 26 July 2011 Roseby Resource passes one million tonnes of contained copper 23 April 2012* Further resource upgrades at Roseby Project 14 May 2012* Little Eva: A new large scale copper development 3 July 2012* 15% Resource Upgrade at Roseby Project 22 August 2012* Further Resource Upgrade at Roseby Project 27 May 2014 JORC 2012 Resource estimate for the Little Eva deposit 18 March 2015 Resource Estimate for the Turkey Creek deposit Reserve Estimates 13 March 2014* Cost review delivers major upgrade to Little Eva Initial resource estimate for Little Eva deposit with 2004 JORC Table 1. Resource estimates for Bedford, Ivy Ann and Lady Clayre deposits with relevant 2004 JORC Table 1. Little Eva Definitive Feasibility Study. Included an updated resource estimate for Little Eva due to the removal of surface oxide mineralisation from the resource estimate reported on 19 December Resource estimates for the Blackard and Scanlan deposits with relevant 2004 JORC Table 1. Resource estimate for the Legend deposit with 2004 JORC Table 1. Resource estimate for the little Eva deposit with 2012 JORC Table 1. Resource Estimate for the Turkey Creek deposit with 2012 JORC Table 1. Reserve estimates unchanged since ASX release of 14 May 2012 Little Eva: A new large scale copper development. * This information was prepared and first disclosed under the JORC Code It has not been updated since to comply with the JORC Code 2012 on the basis that the information has not materially changed since it was last reported. Slide 28

29 JORC Compliance (continued) The ASX releases referenced in the previous slide are on the Altona website at The Company confirms that it is not aware of any new information or data that materially affects the information included in the most recent market announcement for each deposit and, in the case of Mineral Resources and Ore Reserves, that all material assumptions and technical parameters underpinning the estimates in the relevant market announcement continue to apply and have not materially changed. The Company confirms that the form and context in which the Competent Person s findings are presented have not materially modified from the original market announcement. Copper equivalence: When used, copper equivalence refers to copper in concentrate, not resources or reserves, or drill results. Revenues from gold is simply equated to copper revenue. Production target and forecast financial information: Information in this presentation refers to a production target and the forecast financial information derived from a production target as disclosed to the market in the ASX release Cost Review Delivers Major Upgrade to Little Eva dated 13 March 2014, which is available to be viewed at or The Company confirms that all the material assumptions underpinning the production target and the forecast financial information derived from the production target referred to in the above-mentioned release continue to apply and have not materially changed. Slide 29

30 Telephone: Facsimile: altona@altonamining.com