Slide 1: Strike Resources: High-Quality Iron Ore in Peru
STRIKE RESOURCES HIGH-QUALITY IRON ORE IN PERU ASX CODE: SRK March 2012
Slide 2: Forward-Looking Information Disclaimer
FORWARD-LOOKING INFORMATION DISCLAIMER This material contains certain forecasts and forward-looking information, including regarding possible or assumed future performance, costs, production levels or rates, prices, reserves and resources or potential growth of Strike Resources, industry growth or o
Slide 3: Strike Resources
STRIKE RESOURCES Australian-listed Resources Company • Large-scale iron ore projects in Apurimac and Cusco regions of southern Perú • Seeking to establish 15-20 Mtpa business • Apurimac Project in pre-feasibility study stage • Current iron ore mineral resources totalling 374Mt* • Potential access to
Slide 4: Why Invest in Iron Ore?
WHY INVEST IN IRON ORE? Demand Predicted to Increase: 1770Mtpa (2013) to 3260Mtpa (2030)* • Demand driven by urbanisation, industrial development and consumerism • Ongoing strong demand growth driven from Asia, especially China and India • Chinese and Indian economic growth forecast to average above
Slide 5: Iron Ore in Peru
IRON ORE IN PERU IOCG Skarn Placer Size Large Moderate Moderate Fe Grade Low - moderate Moderate - high Low Fe Style Magnetite + haematite Magnetite Vanadium Ti Fe Mining Moderate - high cost Low cost Low cost Processing Moderate cost + complex Low cost Moderate cost + v complex Logistics Good - exc
Slide 6: Peru – A Major Resources Precinct
PERU – A MAJOR RESOURCES PRECINCT Peru – The Last Decade COMPANY WITHOUT A TAX STABILITY CONTRACT: BURDEN ACCORDING TO A MODEL MINING COMPANY’S PROFITABILITY • Free-trade agreement with the USA 1/ 2/ (% of profit before taxes and contributions) • Competitive labor rates 60 • Competitive corporate ta
Slide 7: Australian Securities Exchange (ASX)
AUSTRALIAN SECURITIES EXCHANGE (ASX) ASX: SRK Capital structure: • Ordinary, fully paid shares 142M • Unlisted options 13.9M • Cash Position: (Jan 2012) A$25M Top Shareholders • Gallagher Holdings Limited 18.2% • Orion Equities Limited 11.7% • Database Systems Limited 6.6% • Ferrous Resources 4.5% •
Slide 8: Strong Experienced Board
STRONG EXPERIENCED BOARD MALCOLM RICHMOND KEN HELLSTEN SAMANTHA TOUGH (Independent Chairman) (Managing Director) (Independent NED) Former senior RioTinto Over 30 years with BHP Served at senior executive executive who led Billiton and smaller level in the resources and development of resources group
Slide 9: Foundations Established for Strong Sustainable Growth
FOUNDATIONS ESTABLISHED FOR STRONG SUSTAINABLE GROWTH Outcomes 2011 Objectives Complete - resignation of 3 “aligned” directors and appointment of independent BUSINESS Appointed Tom Kelly (CEO) and strong #5 Establish sound business approach at AF technical and commercial team in Lima PARTNERS by
Slide 10: Apurimac Ferrum: Strike's Pathway to Control or Free Carry
APURIMAC FERRUM: Strike’s Pathway to Control or “free carry” June June Sept 2009 2011 2012 2012 D&C 25% SRK No D&C Top-up 75% for AF or IAC 2009 Settlement After IAC Agreement Transaction No D&C Top- D&C IAC up for AF 32% SRK 12% D&C D&C SRK 68% SRK SRK 44% 50% 50% D&C 44% 56% 44% US$1.9M D&C Strike
Slide 11: Apurimac Iron Ore Project
APURIMAC IRON ORE PROJECT Highlights • JORC resource of 269Mt @ 57.3% Fe* • High-grade with potential DSO and Pictures here. coarse, friable magnetite • At least 50% direct interest in concession owner (AF) with control likely during 2012 • Positive initial Pre-feasibility Study (2008) • Initial pro
Slide 12: Apurimac – Opaban Iron Ore Deposits
APURIMAC – OPABAN IRON ORE DEPOSITS Current Resources of 269Mt at 57.3% Fe* Bouguer Gravity Opaban 1 Anomaly Target of 300 – 350Mt at 57 – 58% Fe+ Current resources: • Continuous broad zones Pictures here. • Dominantly high-grade, coarse-grained magnetite Opaban 3 • High-grade potential DSO of 67.9M
Slide 13: Opaban: Excellent Metallurgical Properties
OPABAN: EXCELLENT METALLURGICAL PROPERTIES DTR Mass Recovery • Coarse particle liberation size (250 microns vs 30 – 40 microns) 80% 60 ‐70% • 60 - 70% mass recovery (vs 35 – 50%) Pictures here. 60% 39% Opaban • Excellent product grades with low impurities 25% 30% Project 1 40% Project 2 Fe 64% to >6
Slide 14: 2008 Pre-Feasibility Demonstrated Attractive Project Economics
2008 PRE-FEASBILITY DEMONSTRATED ATTRACTIVE PROJECT ECONOMICS Initial Pre-feasibility: Key Parameters and Results • 27Mtpa mining operation at S/R of <2:1 for 20Mtpa product • High-grade product >68% Fe with low impurities • Slurry pipeline to coast for dewatering and export • Average operating cost
Slide 15: Further Upside Potential – Transportation Options
FURTHER UPSIDE POTENTIAL-TRANSPORTATION OPTIONS Rope Conveyor Study Completed • Up to 2km between supports • Capacity of >20Mtpa • Up to 20km per conveyor section • European design with high availabilities (>98%) • Facilitates ore, lump/fines and coarse concentrate options • Generate electricity on
Slide 16: Apurimac Project Status & Forward Plan
APURUMIC PROJECT STATUS & FORWARD PLAN Current Status • >15Mtpa operation required to deliver robust financial returns • 15 – 20 year operational life necessary to justify infrastructure Opaban 1 resource • Using 65% mass recovery, >500Mt required Forward Plan • Increasing iron ore base through expl
Slide 17: Excellent Iron Ore Potential
EXCELLENT IRON ORE POTENTIAL Exploration Potential • 590km2 held under concessions OPABAN in Apurimac, ~200km2 in Cusco IRON ORE Pictures here. PROJECT • Drilling targets at Colcabamba, Sillaccassa, Mapsa /Ferrum Opaban (North, I and III) and Cusco (Santo Tomas) • >60% Fe in several regional target
Slide 18: Cusco – Santo Tomas Project
CUSCO - SANTO TOMAS PROJECT Resource Status • Inferred resource: 104.3 Mt @ 32.6% Fe & 0.5% S (June 2011)* • Potential: 23 - 26Mt @ 30 - 35% Fe (June 2011)+ • Lower mass recovery than Opaban and floatation circuit and/or fine grinding will be required Pictures here. • Good potential to discover addi
Slide 19: Cuervo and Copper/Gold Potential
CUERVO AND COPPER/GOLD POTENTIAL • Options on Additional Resources • Option to acquire 49% of Cuervo* CUERVO • Stage 1 • C$5.25M for 32.5% (undiluted) Las Bambas (Xstrata), 1.13Bt @ 0.77%Cu Pictures here. • Min $4.15M direct project costs 1.132Mt @ 0.77% Cu • Security over project concessions • 2 di
Slide 20: Cuervo Transaction – An Option on Additional Fe Resources
CUERVO TRANSACTION – AN OPTION ON ADDITIONAL Fe RESOURCES Orcopura: Resources of 106.4Mt @ 45.3%Fe* • Open along strike and at depth • Strong magnetic and gravity association Pictures here. Huillque and Aurora: 72 Mt at 52.6% Fe* • Open along strike and at depth Bob 1 • Up to 10km strike potential •
Slide 21: Building Strong Community Relations in Peru
BUILDING STRONG COMMUNITY RELATIONS IN PERU Community Approvals Required for all Mining Programs • Successful resource companies implement pro-active and sustainable programs to establish long-term relationships based on mutual respect • Community support fostered through both short- and long-term p
Slide 22: Community Approvals – Positive & Improving
COMMUNITY APPROVALS – POSITIVE & IMPROVING Colcabamba “pilot” very successful and approval granted for further 12 months’ exploration Established “AF Information Offices” in 2 main communities – Huinchos and Huinquiri President Humala visit and positive mining industry messages to Andahuaylas
Slide 23: Timeline for Detailed Pre-Feasibility Study
TIMELINE FOR DETAILED PRE-FEASIBILITY STUDY (After community approvals) 6 MONTHS 2 MONTHS 5 MONTHS 5 MONTHS Opaban Enviro Studies + EIS Approval Opaban I & Resources Resource Estimate and Workshops (EIS) III Drilling Mining Studies Extension 2 MONTHS: Prepare & Satellite Environ 2 MONTHS 4 MONTHS 2
Slide 24: Iron Ore Project Summary
IRON ORE PROJECT SUMMARY 374 Mt 50.4% Fe JORC resources* + Cuervo (179Mt @ 48.2%Fe) Targeting 15 – 20Mtpa business over >15 years • Expect further exploration will substantially increase iron ore tonnage • Consolidation steps commenced - ≥50% AF and 32.5% Cuervo • Further consolidation planned withi
Slide 25: Berau Thermal Coal Project
BERAU THERMAL COAL PROJECT Project • Thermal coal project capable of delivering very good returns based on 2Mtpa operation Pictures here. Partner Status • Dialogue and negotiations over last 2 years on restructure of Co- operation Agreement • Numerous (generous) proposals offered to partner – all re
Slide 26: Highlights – SRK Value & Growth
HIGHLIGHTS – SRK VALUE & GROWTH Board and management restructured Focused: Apurimac & Cusco Iron Ore Projects in Peru Consolidation strategy to secure >500Mt resources underway: • Moved to at least 50% of Apurimac Ferrum (AF) • Recapitalisation of AF in September 2012 • Option to acquire 49% o
Slide 27: Thank You
STRIKE RESOURCES Limited THANK YOU ASX: SRK www.strikeresources.com.au 27
Slide 28: Appendix – JORC Code Information
APPENDIX – JORC CODE INFORMATION Resource Breakdown – AF Projects Project Classification Tonnes (Mt) Head Fe (%) Inferred 127.2 56.7 Apurimac Indicated 142 58 Cusco Inferred 104.4 32.6 The 68Mt DSO component of the Apurimac resource is comprised of a 27Mt inferred resource at 61.35% Fe and 41 Mt ind
Slide 29: Appendix – JORC Code Information (cont'd)
APPENDIX – JORC CODE INFORMATION Resource Breakdown (cont’d) Cerro Ccopane Project (Cuervo Resources, Inc) The resource estimate for Cuervo’s Orcopura prospect stands at 19.7 Mt at 48.3% Fe (measured resource), 35.9 Mt at 45.9% Fe (indicated resource) and 50.8 Mt at 43.7% (inferred resource). That e