Zanaga Iron Ore Co. Ltd. · LSE:ZIOC
Zanaga Iron Ore — Technical Presentation (May 2014)
26 slides from Zanaga Iron Ore's technical presentation, May 2014
Slide 1: Zanaga Project Feasibility Study Results
Zanaga Project Feasibility Study Results Investor Presentation May 2014
Slide 2: Disclaimers
Disclaimers This document, which is personal to the recipient, has been issued by Zanaga Iron Ore Neither this document nor any copy of it may be taken or transmitted into the United Company Limited (the “Company”). This document does not constitute or form part of States of America, its territories
Slide 3: Zanaga Project Overview
Zanaga Project Overview Central African • World class iron ore project Cameroon Republic • 6.9Bt Mineral Resource Equatorial • High quality, low impurity iron ore product Guinea Republic of • Bottom quartile operating costs Congo Gabon • JV with Glencore Xstrata Zanaga Project Licenses • Glencore Xs
Slide 4: Work Programmes
Work Programmes Rapid Exploration and Engineering Progress 30Mtpa Staged Completion of Rail Development 30Mtpa Staged Initial Preliminary Rail PFS in PFS and Value 30Mtpa scoping study Development Exploration Studies progress Engineering Pipeline PFS Feasibility Study 2007 2008 2009 2010 2011 2012 2
Slide 5: World Class Project with Highly Attractive Economics
World Class Project with Highly Attractive Economics • Stage One 12Mtpa initial operation • Stage Two expansion to 30Mtpa operation • $2.2bn capital expenditure • $2.5bn capital expenditure for +18Mtpa production • $32/t FOB bottom quartile operating costs • $26/t FOB bottom quartile operating costs
Slide 6: Value Added Through Staged Development Approach
Value Added Through Staged Development Approach Pre-Feasibility Feasibility Study (2014) Study (2012) Stage 1 with Stage 2 ``````` Mine life years 30 22 (years 9-30) 30 Physicals 12 Production Mtpa (dry) 30 30 (13.2 for first 5 years) Strip Ratio Waste:ore 0.45 0.37 0.56 67.5 Premium Pellet Feed Pro
Slide 7: Large Scale Reserves and Resources
Large Scale Reserves and Resources >178,000m of exploration drilling has resulted in a large, well defined ore body Photo Lithology Average Fe Mineral Resource Statement SOL Tonnes Fe SiO2 Al2O3 P Classification Mt % % % % Measured 2,330 33.7 43.1 3.4 0.05 CAN Indicated 2,460 30.4 46.8 3.2 0.05 Infe
Slide 8: Mining – High Grade Product at Low Strip Ratio
Mining – High Grade Product at Low Strip Ratio • Stage One • Contractor mining for first 5 years • Targeting near surface friable Hematite in first 8 years • Low cost mining due to low strip ratio and free dig material • LOM strip ratio of 0.45 (less than 0.2 in first 8 years) • Compact itabirite mi
Slide 9: Processing summary
Processing summary • Process plant – Stage One Stage One Processing Route • Stage One utilises gravity separation and flotation to produce 66% Fe content pellet feed product Mineral Sizer • 13.2Mtpa production rate during first 5 years of operation due to higher grade feed and higher recoveries • LO
Slide 10: Pipeline Solution with Low Risk Land Access
Pipeline Solution with Low Risk Land Access Planned pipeline route • 366km pipeline to transport pellet feed from mine site to port at Pointe-Noire Zanaga Project • Stage One 20” Pipeline Explora1on Licenses – Optimal for 12Mtpa throughput – 13.2Mtpa capacity for first 5 years of operation due to in
Slide 11: Port Development
Port Development • MoU signed in 2013 between RoC Government and large Chinese SOE China Road and Bridge Corporation (CRBC) for construction of deepwater bulk export multi-user port facility • CRBC is a subsidiary of China Communications Construction Company (CCCC) • CCCC/CRBC are completing a Feasi
Slide 12: Zanaga Port Solution
Zanaga Port Solution • The FS includes design & costing for Staged Richards Bay Coal Terminal Development port solution which could be Mul;-‐user with Glencore as shareholder implemented if Government port is not available or incorporated into Government port • Stage One • Stage One jetty structure
Slide 13: Power Opportunities
Power Opportunities • Feasibility study based upon power offtake at the mine Refurbished 220kV transmission lines and port sites (within 180Km of Mine Site) • Stage One uses existing grid capacity for 100MW • Stage Two requires new power generation • New gas sources currently being developed • Major
Slide 14: Power Transmission
Power Transmission • Proposed connections to existing 220kV National Grid at Djambala and Loudima Substations are optimal for reliability 158km 199km 14
Slide 15: High Quality Product
High Quality Product • High quality, low impurity pellet feed product • High iron content will command price premium relative to 62%FE IODEX • Stage Two expansion provides option to produce two products or blend • Product suitable for direct feed to pellet plants (size approx. 80% passing 45 microns
Slide 16: Product Pricing expectations
Product Pricing expectations Stage 1 Pellet Feed 66%Fe product pricing ($/dmt) IODEX 62% Fe ($/dmt) 80 90 100 110 120 130 140 Fe Unit Adjustment 5.2 5.8 6.5 7.1 7.7 8.4 9.0 Quality Adjustment 2.6 2.9 3.2 3.5 3.8 4.2 4.5 Total Product Premium 7.8 8.7 9.7 10.6 11.5 12.6 13.5 CFR Price 87.7 98.7 109.7
Slide 17: Project Economics
Project Economics
Slide 18: Capital and Operating Cost Estimates
Capital and Operating Cost Estimates OPEX $/dmt Stage 1 Stage 2 CAPEX $m Stage 1 Stage 2 30 yr avg 9-30 yr avg FEED 22 11 Mining & Processing 19.1 17.4 Pre Production 23 - Pipeline 2.4 2.1 Mine Area 614 814 Port Area 6.5 2.7 Pipeline 399 467 G&A 2.0 0.9 Port Yard Facilities 173 243 Cash Cost 29.9 23
Slide 19: Stage One & Two Construction Capex Profile
Stage One & Two Construction Capex Profile Stage 1 & 2 Construction Capex Profile 1,400 1,223 1,200 1,000 918 USD M 773 800 734 600 404 400 292 235 200 53 71 0 3 2 0 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 19
Slide 20: Stage One attractive on a standalone basis
Stage One attractive on a standalone basis 1,000 16,000 800 12,000 600 8,000 400 Cumulative Cashflow - USD M 4,000 Annual Cashflow - USD M 200 0 0 -200 -4,000 -400 -8,000 -600 -12,000 -800 -1,000 -16,000 Net Cashflow After Tax & Free Carry Cumulative Net Cashflow After Tax & Free Carry Figures shown
Slide 21: …with Stage Two potentially self-financed
…with Stage Two potentially self-financed Net Cashflow Stage One & Two combined – IODEX 62%Fe $110/dmt 2,000 35,000 1,500 25,000 1,000 15,000 Annual Cashflow - USD M 500 5,000 Cumulative Cashflow - USD M 0 -5,000 -500 -15,000 -1,000 -25,000 -1,500 -2,000 -35,000 2016 2017 2018 2019 2020 2021 2022 20
Slide 22: Next Steps
Next Steps
Slide 23: Development Timeframe
Development Timeframe Activity Key Date FS & SEIA completed April 2014 Mining Licence Application Submitted May 2014 Preparation for FEED Second Half 2014 Front End Engineering (FEED) Phase 2015 Construction Phase 2016 – 2018 Mining Commences End 2018 First Shipment Q1 2019 23
Slide 24: Ownership of the Zanaga Project
Ownership of the Zanaga Project 50% +1 share 50% - 1 share JV Agreement Zanaga Project • Glencore Xstrata managing the Zanaga Project • FS demonstrates major improvements on previous PFS • Joint Glencore and ZIOC project funding process underway • Both debt and equity financing under consideration f
Slide 25: Strengths of the Zanaga Project
Strengths of the Zanaga Project • Bottom quartile operating costs and competitive capital costs • Competitive CFR operating cost estimates across both stages of $50-57/dmt over LOM (unadjusted for premium received*) • Capital costs in line with greenfield iron ore benchmarks • High grade pellet feed
Slide 26: Investment Highlights
Investment Highlights üRobust project fundamentals • Large ore body defined to support long life operation • High quality product specifications üFeasibility Study complete • Confirms attractive economic basis for development • Significant improvement on PFS üDeliverable and financeable project •
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