Apex Minerals Presentation For Legend Mining s EGM, 25 th October 2007: Building a significant gold business in Australia

Transcription

1 Apex Minerals Presentation For Legend Mining s EGM, 25 th October 2007: Building a significant gold business in Australia 1

2 Disclaimer Certain statements contained in this presentation, including information as to the future financial or operating performance of Apex Minerals and its projects, are forward-looking statements. Such forward-looking statements: are necessarily based upon a number of estimates and assumptions that, while considered reasonable by Apex Minerals, are inherently subject to significant technical, business, economic, competitive, political and social uncertainties and contingencies; and involve known and unknown risks and uncertainties that could cause actual events or results to differ materially from estimated or anticipated events or results reflected in such forward-looking statements. May include, among other things, statements regarding targets, estimates and assumptions in respect of metal production and prices, operating costs and results, capital expenditures, mineral reserves and mineral resources and anticipated grades and recovery rates, and are or may be based on assumptions and estimates related to future technical, economic, market, political, social and other conditions; Apex Minerals disclaims any intent or obligation to update publicly any forward-looking statements, whether as a result of new information, future events or results or otherwise. The words believe, expect, anticipate, indicate, contemplate, target, plan, intends, continue, budget, estimate, may, will, schedule and similar expressions identify forward-looking statements. All forward-looking statements made in this presentation are qualified by the foregoing cautionary statements. Investors are cautioned that forward-looking statements are not guarantees of future performance and accordingly investors are cautioned not to put undue reliance on forward-looking statements due to the inherent uncertainty therein. 2

3 Apex Minerals Capital Structure (ASX: AXM) Fully paid shares million Partly paid shares 19.7 million 20c) Unlisted Options 19.5 million (between 14c and $1.30) Market capitalisation Cash (at end Sept Qtr)* Exploration budget 12 months A$410 million (at $1.30 cps) A$41 million A$20 million Top 20 Shareholders ~60% Management ownership Mark Creasy shareholding Legend Mining shareholding** 9% (28.5 million shares) 8.1% (25.6 million shares) 10.7% (34 million shares) * Prior to A$12.5 million payment to Oxiana for cash component of Wiluna acquisition ** Prior to distribution in specie to Legend shareholders 3

4 Apex Minerals Gold Strategy April 2006 new direction & management team (ex-lionore) Numerous high grade deposits with fragmented ownership (each lacking the critical mass for efficient operation) Concept: consolidation of high grade refractory deposits and treatment via a central processing facility fed by several deposits Wiluna identified as the first hub with a BIOX plant, developed resources & significant exploration upside, but in need of investment and/or additional high grade feed Wilsons (Gidgee) & Youanmi identified as key satellite mining operations capable of trucking high grade ore to supplement Wiluna production Trucking cost of high grade ore/concentrate is immaterial compared to the fixed cost saving of stand alone operations, & is further offset by the cost differential between gas & diesel power generation This consolidation positions Apex with a distinct strategic advantage in respect to other refractory gold opportunities, & conventional free milling gold opportunities Many of these deposits have significant potential for expansion of resources and additional exploration upside as they tend to be under-drilled This by-passes the capital cost & time required to construct a new plant and significantly mitigates the time & cost overrun risk associated with this This also by-passes the high risk & long lead time exploration phase, allowing Apex to fasttrack to producer status 4

5 Apex Minerals Stage 1 Objectives Targeting initial production of >200,000oz per annum from Wiluna plant, commencing early 2009 Operate Wiluna mill at capacity of 1mtpa, with majority of feed coming from Wiluna underground operations & supplemented by high grade feed trucked from Wilsons (Gidgee) and/or Youanmi This is envisaged to comprise: A minimum of 500,000tpa from 6g/t gold Up to 350,000tpa from 7g/t gold Up to 150,000tpa from 11.5g/t gold Define sufficient reserves to underpin an initial 3-4 year life The majority of initial Wiluna production to be sourced from the East Lode (Burgundy-Henry5 North area) close to existing underground development Longer term production to be sourced from in/around other resource areas at Wiluna, further from existing development Targeting production of an additional 100, ,000oz per annum from Aphrodite, commencing 18 months later Utilise existing plant components from Gidgee & Youanmi to produce a gold concentrate for trucking to Wiluna or elsewhere, or for treatment on site Elevate Apex s production to approx. 300, ,000oz per annum, assuming no additional exploration success or acquisitions Discover additional resources to expand production and/or extend life at all operations 5

6 Strength in Personnel Mark Ashley - CEO and Managing Director Former CEO LionOre Australia and Director LionOre Mining International Kim Robinson - Non-Executive Chairman Founding Executive Chairman of Kagara Zinc. Former Executive Chairman Forrestania Gold for 10 years. Mark Bennett - Exploration Director Former Exploration Manager & Chief Geologist LionOre Australia and WMC. Winner of AMEC Prospector of the Year Award 2002 (for the discovery of the Waterloo nickel mine and Thunderbox gold mine). Glenn Jardine Operations Director Most recently CEO and previously Chief Operating Officer - LionOre Australia. Steve Lowe Non-Executive Director Partner of MKT Taxation Advisors. Experienced and successful team: Will Dix Exploration Andy Thompson Resource Geology Jeremy Robinson Business Analyst Anna Neuling Finance David Potts Metallurgy Carrie Pritchard Environment Tony Ingram Safety & Logistics Shane Taylor - GIS 8 Field Geologists & 12 Field Technicians and utility personnel Wiluna plant maintenance crew In-house financial & GIS personnel 6

7 Track record of delivering value The board and senior management of Apex have been directly involved in the discovery, development, construction and/or operation of: Bounty gold mine, WA Maggie Hays & Emily Anne nickel mines, WA Lake Johnston processing plant, WA Black Swan nickel mine, WA Thunderbox gold mine, WA Waterloo nickel mine, WA Amorac nickel deposit, WA Mt.Garnet polymetallic mine and processing plant, Qld Balcooma base metal mine, Qld Thalanga processing plant, Qld Mungana polymetallic deposit, Qld 7

8 Major drilling & resource program underway 12 Now Exploration and Resource Drilling Schedule Youanmi & Wiluna Wilsons 10 Phi & Alpha Wiluna Rigs Lawlers Aphrodite Youanmi Gidgee Wiluna surface Wiluna u/g 0 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Month 8

9 PROJECTS Gidgee Wiluna Five gold projects centred on the Wiluna Gold Mine Four of these have 2.5m oz gold resources One nickel exploration project Lawlers Youanmi Apollo Hill Aphrodite 9

10 WILUNA, GIDGEE & YOUANMI 120km Five gold projects centred on the Wiluna Gold Mine Gidgee Wiluna Four of these have 2.5m oz gold resources One nickel exploration project Youanmi Lawlers 260km Apollo Hill Wiluna to be the flagship mine and central processing hub in the first stage of an integrated refractory gold business Gidgee (Wilsons) and Youanmi intended to be satellite mines trucking high grade ore to Wiluna Aphrodite Aphrodite envisaged to be a stand alone operation producing gold concentrate for trucking, or being a second processing hub Intensive exploration and resource definition drilling program underway 10

11 Wiluna Background 4 million ounces produced to-date +700,000 ounce Resource (Measured, Indicated & Inferred) Suprisingly little exploration due to production pressure Unique opportunity to stop mining and focus on establishing a sustainable resource base Primary aim is to establish a critical mass of resources & reserves for an initial 4-5 year period, preferably at a higher production rate, with greater operational flexibility, utilising existing development Longer term aim is to add to these resources/reserves in the under-explored & less developed areas at Wiluna, to extend life 11

12 Wiluna Central Processing Strategy Wiluna - location Gidgee Wiluna Moonlight Adelaid e Happy Jack W est Lode Bulletin Henry 5 Calais East Lode Lawlers Youanmi Apollo Hill Aphrodite 12

13 Wiluna Central Processing Strategy Wiluna Pits, Resources & initial targets Adelaid e Moonlight Bulletin Moonlight Adelaid e Happy Jack W est Lode Bulletin Henry 5 Calais East Lode Henry 5 North Initial Exploration focus Moonlight Happy Jack Crispin Targe t Scroop Target Brothers Reef Target Henry 5 Brothers Reef Target Calais W est Lode West Lode East Lode Burgundy East Lode 13

14 Wiluna Central Processing Strategy Wiluna Initial Exploration focus & targets 14

15 Wiluna Central Processing Strategy Calais Lens 50 / Henry 5 Footwall Long Projection 15

16 Wiluna Central Processing Strategy Wiluna 100 Lens Calais, Henry5 & Henry5 North 16

17 Wiluna Central Processing Strategy Wiluna Brothers Reef 17

18 Wiluna Central Processing Strategy Gidgee Gidgee then: Ceased production in 2005 Mining of oxide and free milling primary ore from open pits & underground Processing via conventional 600,000tpa plant Mining terminated due to escalating costs as a result of decreasing plant throughput Three open pits mined the oxide caps of the Wilsons 1, 2 & 3 shoots, but fresh sulphides are refractory and could not be treated through the Gidgee plant Gidgee now: Apex intends to resume mining at the Wilsons deposit and truck the ore to Wiluna Wilsons can be accessed rapidly by using one of the existing open pits as a boxcut for a decline portal Prior metallurgical testwork using Wiluna s BIOX plant was succesful, but more is required - low metallurgical risk Ore would be treated at Wiluna = saving of fixed costs for one operation (~A$20 million pa). Cost of trucking ore ~$4 million pa (net $16 million pa saving) Once a mining operation is established, other resources will be re-evaluated 18

19 120km Wiluna Central Processing Strategy Gidgee - location Wiluna Omega Gidgee Wilsons Youanmi Lawlers Sw an Bitter Plant Sw an Bitter Premium Eagle Apollo Hill Aphrodite Main mineralised trend - numerous previously mined open pits providing underground potential 19

20 Wiluna Central Processing Strategy Gidgee Wilsons 7020N Section W ilsons 3 Pit W ilsons 3 Pit Section 7020N 22.4g /t W ilsons 2 Pit 11.5g /t W ilsons 1 Pit 20

21 Wiluna Central Processing Strategy Gidgee Wilsons deposit - status Current published resource ( diluted ) 6.9g/t for 164k oz Au 21

22 Wiluna Central Processing Strategy Youanmi Youanmi then: Ceased production in November 1997, having produced 667,000oz Mining of 150,000tpa at 11.5g/t head grade with recovery of 90% from refractory ore (i.e Apex s assumptions for this deposit). Mining and processing achieved targets proven 600,000tpa plant only at 25% capacity Cash costs were A$430/ounce & fixed costs were approx. A$12mpa = A$240/oz (ie 56% of total!) Gold price at that time was just over A$400/oz Closed as a result of low gold price & high unit cost due to low throughput, plus extrinsic corporate issues Youanmi now: Apex intends to resume mining at the same rate & anticipates similar recoveries low mining and metallurgical risk Ore would be treated at Wiluna = saving of fixed costs for one operation (~A$20 million pa). Cost of trucking ore ~$4 million pa (net $16 million pa saving) This effectively halves the total expected cash costs Gold price is also substantially higher today 22

23 Wiluna Central Processing Strategy Youanmi location Wiluna Gidgee Main Pit Youanmi Deeps +600,000oz Au produced Youanmi Lawlers 260km North Dome 2% Zn, 3.5g/t Ag PW17 Area (HG Lens, incl. 24% Zn In DDHPW17) Apollo Hill Penny West 87,000oz Au produced Incl. 21.8g/t Au Aphrodite 23

24 Wiluna Central Processing Strategy Youanmi Underground resource OLD WORKINGS CIRCA s 10.6g /t 9.7g/t 7.7g/t Assumed production area Target Areas 63.3g /t 6.4g/t 21.5g /t 28.1g /t 20.4g /t 15.5g /t 14.7g /t 7.9g/t 16.0g /t 46.1g /t 21.1g /t 24

25 APHRODITE Gidgee Wiluna Inferred Resource of 287,000 ounces + significant non JORC mineral inventory Youanmi Lawlers Flotation testwork highlights good recovery to produce high grade concentrate may be trucked to Wiluna Apollo Hill Aphrodite Concept mining 5-6g/t to produce 75, ,000 ounces of gold in concentrate in approx 3 years 25

26 Aphrodite Alpha lode (partial JORC resource) 6.5g/t 4.8g/t 0.6g/t 2.6g/t 1.9g/t 6.6g/t 13.6g /t 4.2g /t 2.7g/t 3.6g/t 1.5g/t 2.2g/t 4.6g/t 1.8g /t 1.1g/t 3.3g/t 6.4g/t 2.2g/t 8.8g/t 2.2g/t 5.2g/t 2.1g/t 0.8g/t 9.3g/t 6.1g/t 7.9g/t 1.1g/t 1.0g/t Planned hole 0.8g/t 3.9g/t 26

27 Aphrodite Phi lode (no JORC resource) 4.7g/t 4.9g/t 1.9g/t 16.5g /t 6.6g /t 1.1g/t 8.7g/t 1.9g/t 1.9g/t 1.8g/t 1.9g/t 3.6g/t 11.6g /t 4.6g/t 3.8g/t 2.9g/t 4.7g/t 4.3g/t 6.7g/t 5.2g/t Incl. 6.4g/t 4.7g/t 6.0g/t 4.6g/t 6.5g/t 5.0g/t 3.7g/t 5.2g/t 7.3g/t 3.9g/t 2.6g/t Planned hole 27

28 Aphrodite Section mN 1.7g/t 5.2g/t 28

29 Total Gold Resources Deposit Category Tonnes Grade Gold Aphrodite Inferred g/t 287,000oz* Gidgee Measured g/t 9,000oz Indicated g/t 288,000oz Inferred g/t 192,000oz Total Resources g/t 490,000oz Youanmi Measured g/t 3,200oz Indicated g/t 429,000oz Inferred g/t 519,000oz Total Resources g/t 951,000oz** Wiluna Measured g/t 16,000oz Indicated g/t 318,000oz Inferred g/t 435,000oz Total Resources g/t 768,000oz*** Total: Measured g/t 28,000oz Indicated g/t 1,035,000oz Inferred g/t 1,434,000oz Total Resources g/t 2,496,000oz * Excludes additional significant unclassified mineralisation at Aphrodite ** Based on 4g/t Lower Cut, to be 10g/t Lower cut *** Excludes two months (approx 20koz) of mining depletion at Wiluna 29

30 Thankyou for your attention Apex s current EV per resource ounce is comparable to that of Navigator Resources, View Resources & Equigold Apex s current EV per resource ounce is less than half that of Avoca Resources & Dominion Mining 30