Sunstone Metals Ltd · ASX:STM
Sunstone Metals — Avalon Minerals — Investor Presentation (January 2015)
37 slides from Sunstone Metals's investor presentation, January 2015
Slide 1: Avalon Minerals Ltd. Investor Presentation
AVALON MINERALS Ltd. Investor Presentation Copper in Sweden - Near Term Development - Growth January 2015
Slide 2: Avalon Minerals – Disclaimer
Avalon Minerals – Disclaimer Forward-looking Statements This Presentation includes certain statements that may be deemed “forward-looking statements”. All statements in this Presentation, other than statements of historical facts, that address future activities and events or developments that Avalon
Slide 3: Avalon Minerals – At a Glance
Avalon Minerals – At a Glance Ticker ASX:AVI Top 10 shareholders hold 63% of shares on issue Share Price (30 day VWAP)* $0.025 Board and management hold 2% Shares on Issue 144,735,608 Market Cap $3.62 mill Substantial shareholders Cash (31 Dec 2014) $1,802,000 NAME % 52 week trading $0.02 - $0.15 Ta
Slide 4: Viscaria Project – At a Glance
Viscaria Project – At a Glance A COPPER Project: Scoping study in progress and assessing copper-only start up – targeting lower CAPEX and higher grade Viscaria copper-magnetite project is a robust development scenario based on a 2014 updated Scoping Study, but weakness in iron price dictates a
Slide 5: Viscaria Project – At a Glance
Viscaria Project – At a Glance As a • high grade, • low CAPEX, • copper only project, with a staged development plan • with existing high quality infrastructure • exploration upside Avalon Minerals is considered to be heavily discounted relative to its peers (See slide 22 for comparables) 5
Slide 6: Viscaria Project – Location
Viscaria Project – Location Viscaria Project N 1 km Fe Mine and processing Cu Smelter Cu Refinery Cu Mine 6
Slide 7: Existing Infrastructure
Avalon Minerals – Existing Infrastructure Town (Kiruna, pop. 20,000; skilled workforce) Sealed national highway to mine gate Electrified rail (Public Access) to mine gate Power (Low Cost; ~8c/kWh) and abundant supply Contractors and OEM presence in Kiruna >100 year mining heritage Loca
Slide 8: Resource Estimate Summary
Viscaria Project – Resource Estimate Summary OVERALL RESOURCE 2014 SCOPING STUDY OPEN PIT RESOURCE* *Represents the portion of the resource captured in open pit shells Cu Fe 32 Mt @ 0.7% Cu 16% Measured 64Mt @ 35Mt @ 51% Indicated 1.05% 29.8% & 23% Fe1 33% Inferred - See Cautionary Statement pg 35 6
Slide 9: 2015 Scoping Study
Viscaria Project – 2015 Scoping Study Robust 2014 Scoping Study, but …… Maximising shareholder return and weakness in the Fe price dictates review of other options Now optimising project to deliver • Lower CAPEX (~$100 mill) • Higher grade, copper only start-up (range of grades 1.2 – 2.5% Cu) • Shor
Slide 10: Opportunities being investigated
Viscaria Project – Opportunities being investigated • High grade copper only opportunities exist at A Zone, B Zone and D Zone • Current timetable has a potential decision to build in 2017 • At A Zone grades in excess of 1.25% Cu in opencut positions (for example see slide 34) and in excess of 2.5% i
Slide 11: A Zone long section
Viscaria Project – A Zone long section High grade copper targets defined down plunge across several areas at A Zone X-section Proposed drill holes, ~4,000m Previously mined by Outokumpu – 15 years of production to 1997 – 12.5Mt of 2.3% Cu at 850,000tpa, producing a concentrate of 26% Cu, 2% Zn & 0.5
Slide 12: A Zone – FW and HW copper zones defined
Viscaria Project – A Zone – FW and HW copper zones defined Drill hole VDD0182 completed in December 2014 A Zone HW • To assess the A Zone footwall mineralisation mineralisation • to assess the main A Zone orebody Positive results Original A Zone open pit Potential increase in open pit mineral A
Slide 13: D Zone high grade copper sulphide potential
Viscaria Project – D Zone high grade copper sulphide potential Proposed drill holes, ~4,500m 13
Slide 14: D Zone copper oxide potential
Viscaria Project – D Zone copper oxide potential Oxide copper target zone; drilling Q1, 2015 Oxide Oxide Sulphide Sulphide Recently announced copper oxide results VDD0180 – 5.6m @ 1.6% Cu within 15.5m @ 0.7% Cu VDD0181 – 24m @ 0.4% Cu above main target zone (hole abandoned in target zone) Order of M
Slide 15: Metallurgy
Viscaria Project – Metallurgy • 12 year mining history delivered good quality concentrates • High quality products • Low technical risk • Independent review completed (Ausenco) Copper • D Zone copper sulphide mineralisation is chalcopyrite and produces a concentrate with 26% copper and 94% copper re
Slide 16: Copper Price Forecasts
Viscaria Project – Copper Price Forecasts Avalon is targeting production at a higher copper price environment, forecast for post 2017 Source: Glencore Investor Day, December 2014 16
Slide 17: Copper Price Forecasts
Viscaria Project – Copper Price Forecasts Forecast consensus … Forecast expansions and new supply will not materialise as planned Supply deficit from 2017 Healthy demand from China and US “The year which is likely to see the heaviest volume of oversupply is 2016, at which time we expect a surplus of
Slide 18: The Pipeline – opportunities being investigated
Viscaria Project – The Pipeline – opportunities being investigated Scale Source Products A Zone Open Pit (1.25% Cu) Cu in concentrate ~1 mtpa A Zone Underground (>2.5% Cu) Cu in concentrate D Zone Underground (>1.7% Cu) Cu in concentrate D Zone Copper Oxide Cu cathode Expansion D Zone Open Pit Cu +
Slide 19: Belt Scale Exploration Upside
Viscaria Project – Belt Scale Exploration Upside Several targets Iso Gruvavaara Historic workings Rock chips up to 1g/t Au and 0.9% Cu West Nukutus Magnetic anomaly of similar magnitude and scale to D Zone The closest historic drill hole (150m to the east) intersected up to 0.3% Cu and 0.5g/
Slide 20: Belt Scale Exploration Upside
Viscaria Project – Belt Scale Exploration Upside Nihka Target • Similar style to D Zone mag anomaly • But larger, and greater depth extent • No previous drilling • Q1 drill test 20
Slide 21: Regional Scale Exploration
Viscaria Project – Regional Scale Exploration Tjavelk Targets Several conductors and magnetic anomalies Previous exploration returned Cu + Au anomalies Recent geophysical modelling completed Drill targets defined Tjarro Target Previous drilling 15m @ 1.3% Cu 34m @ 0.6% Cu & 0.4g/t Au 11m @ 0.4% Cu &
Slide 22: Peer Group Comparison
Viscaria Project – Peer Group Comparison LOW Capital Intensity, forecast at 7,500 $/t Viscaria LOW Cost/lb copper production, <$2/lb forecast for copper only project × LOW Valuation - EV/Resource lb of Copper, very low at <1c/lb share price EV/lb Cu in Capital Company Code (A$) shares on issue C
Slide 23: Stakeholder Management
Viscaria Project – Stakeholder Management • Proposed development areas are in windows surrounded by multiple land use areas • The key issues are (1) a strong mining heritage, (2) reindeer herding, (3) Natura 2000, and (4) recreation 23
Slide 24: Planning to Deliver
Avalon Minerals – Planning to Deliver 2015 2016 2017 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Stakeholder Engagement Stakeholder plans, forums, reviews Studies & Exploration Copper production during 2018 Drilling; Studies and Exploration Scoping and Pre-Feasibility Studies Feasibility Study DFS Permittin
Slide 25: Value Growth Drivers
Avalon Minerals – Value Growth Drivers CURRENT NEAR TERM (within 12 months) LONGER TERM (>12 months) Manage appropriate funding position Define optimised path good progress Secure Environmental Permit and all development approvals Advance selected studies (high grade targets, De-risk project throu
Slide 26: Avalon Minerals Ltd.
AVALON MINERALS Ltd. www.avalonminerals.com.au January 2015
Slide 27: Appendices
Avalon Minerals – Appendices 27
Slide 28: Corporate Re-positioning
Avalon Minerals – Corporate Re-positioning New Board and Management Chairman Appointed November 2013. Mr. Ascough is a senior resources executive with more than 23 years of industry experience evaluating mineral Graham Ascough projects and resources in Australia and overseas. He is currently non-e
Slide 29: Coverage 2014
Avalon Minerals – Coverage 2014 Breakaway Research – • September 2014 • ‘Overlooked Northern Star’ – Speculative BUY • “Modelling indicates potential to produce up to $US110m free cash flow per year” • “Risked base case valuation of $0.068/share” (pre 10:1 share consolidation) Morgans Research – • 2
Slide 30: August 2014 Scoping Study
Viscaria Project – August 2014 Scoping Study Scoping Study assumed: 3.5Mtpa US$199 M CAPEX • a central processing facility at plant (start up) Viscaria of 3.5 Mtpa 69% Fe >10 year • feed from 4 open pits, but mine life magnetite con Open pit only dominated by D Zone and Discovery Zone 1Mtpa PRODUCTI
Slide 31: Resource Estimate Summary
Avalon Minerals – Resource Estimate Summary Currently Defined Mineral Resource for Copper reported on the Viscaria Project above a 0.4% Cu cut-off. Resource Name Classification Tonnes (Million Cu Grade (%) Cu Metal (t) Tonnes) A Zone Measured 14.44 1.7 240,000 Indicated 4.69 1.2 57,200 Inferred 2.48
Slide 32: Resource Estimate Summary
Avalon Minerals – Resource Estimate Summary Currently Defined Mineral Resource for Iron reported on the Viscaria Project above a 15% Mass Recovery cut-off Resource Name Classification Tonnes (Million Fe Grade (%) Mass Recovery Estimated recoverable Tonnes) (%) iron (Million Tonnes) D Zone Measured 2
Slide 33: Resource Estimate Summary - Notes
Avalon Minerals – Resource Estimate Summary - Notes • The A, B D and Discovery Zone Mineral Resources were prepared and first disclosed under the JORC Code 2004. They have been updated since to comply with the JORC Code (2012). • All Copper Mineral Resource estimates are reported above a block cut-o
Slide 34: Resource Estimate Summary
Avalon Minerals – Resource Estimate Summary From August 2014 Scoping Study 34
Slide 35: Scoping Study Cautionary Statement
Viscaria Project – Scoping Study Cautionary Statement The Scoping Study referred to in this presentation is based on lower-level technical and economic assessments and is insufficient to support estimation of Ore Reserves, or to provide assurance of an economic development case at this stage, or to
Slide 36: Competent Persons Statement
Competent Persons Statement Competent Persons Statement The information in this report that relates to the 2014 Scoping Study is based upon information compiled by, or under the supervision of Manish Garg B.Eng. (Hons.), Master of Applied Finance, MAusIMM, MAICD; Tim Horsley B.Sc. (Hons) (Mining Eng
Slide 37: Perfectly located significant copper-iron resource
Avalon Minerals – Perfectly located significant copper-iron resource Discovery Zone A Zone B Zone 680,000 t, or 1.5 Billion lbs Copper D Zone 9.1 Million t Recoverable iron 37
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