Slide 1: Australia's newest copper-gold producer
For personal use only Australia’s newest copper-gold producer: Start of mining at DeGrussa opens a new chapter of growth Sandfire Resources – Global Investor Update – March 2012
Slide 2: Important information and disclaimer
Important information and disclaimer Competent Person’s Statement • The information in this public presentation that relates to Exploration Results and Mineral Resources is based on information compiled by Mr John Evans who is a Fellow of For personal use only the Australasian Institute of Mining an
Slide 3: Sandfire – corporate snapshot
Sandfire – corporate snapshot For personal use only • Issued capital: 151.1M ordinary shares, 9.2M options • Market capitalisation: ~$1.2 billion (at $8.00/share) • Key project: DeGrussa (Doolgunna) • Strategic partner: POSCO • Product customers: POSCO, Yunnan Copper, MRI Trading Board Derek La Ferl
Slide 4: Sandfire – the vision
Sandfire – the vision For personal use only • To deliver superior returns to our owners from the premier high-grade DeGrussa VMS copper-gold mine • To discover additional VMS deposits within the emerging Doolgunna mineral field • To explore for, develop and mine key raw materials, in Australia and o
Slide 5: Sandfire – a highly experienced team
Sandfire – a highly experienced team Mr Karl M Simich Managing Director and Chief Executive Officer - Qualifications B.Comm, FCA, F.Fin For personal use only Experience and other directorships Mr Simich is an experienced international mining executive who has been involved in the financing, construc
Slide 6: Production...the "sweet spot" for investors
Production...the “sweet spot” for investors For personal use only Production: Financial Performance: Growth: • First DSO and underground ore • Forecast $2.4 billion operating cash • Organic growth – exploration mined – February 2012 flow, $4.2 billion revenue (DFS: life- of-mine) success • First DSO
Slide 7: Production
For personal use only Production • First DSO and underground ore mined – February 2012 • First DSO shipment – April 2012 • Plant commissioning – Q3 2012 • Ramp-up to 70-80ktpa Cu, 36kozpa Au by year end 7
Slide 8: DeGrussa: a new era of growth begins
DeGrussa: a new era of growth begins • 900km NE of Perth, established mining district For personal use only • Discovery to first production in <3 years • Open pit and underground mining operation: +7 year mine life • 100% debt funded through $390M ANZ facility • Conventional 1.5Mtpa on-site concentr
Slide 9: Current status
DeGrussa – current status For personal use only Construction of mine and infrastructure +65% complete 9
Slide 10: Current status
DeGrussa – current status For personal use only First DSO mined on 17 February 2012 10
Slide 11: Current status
DeGrussa – current status For personal use only Open pit well advanced with 5.7Mbcm mined to date including oxide copper – currently 70% complete 11
Slide 12: Current status
DeGrussa – current status For personal use only Evans Decline advanced to +1,200m from portal – first ore mined on 29 February 2012 12
Slide 13: Current status
DeGrussa – current status For personal use only Process plant construction +50% complete and all key infrastructure in place 13
Slide 14: Current status
DeGrussa – current status For personal use only On track for first ore to SAG Mill in Q3 of CY 2012 14
Slide 15: Current status
DeGrussa – current status For personal use only Product sales agreements in place for all DSO 15
Slide 16: Current status
DeGrussa – current status For personal use only Discussions well advanced for concentrate sale 16
Slide 17: Growth potential
DeGrussa – growth potential For personal use only • Oxide copper resources in open pit being stockpiled for proposed processing: • 44,000t of contained copper • 56,000oz of contained gold • Positive results from metallurgical testwork – further testwork continuing • Objective of testing is to conver
Slide 18: Development timetable
DeGrussa – development timetable For personal use only Pre-Feasibility Definitive Feasibility Study Project Financing Infrastructure Construction Major Equipment Concentrator Construction Open Pit Direct Shipping Ore Underground Massive Sulphide Concentrator Ramp-up Shipment 18
Slide 19: Financial Performance
For personal use only Financial Performance • Forecast $2.4 billion operating cash flow, $4.2 billion revenue (DFS: life-of-mine) • 77kt (170Mlb) payable copper metal per annum in first three years • Current spot price US$8,500/t, US$3.85/lb 19
Slide 20: Cashflow – a mid-tier mining powerhouse
Cashflow – a mid-tier mining powerhouse For personal use only DFS Outcomes First Production Q1 2012 (DSO), Q3 2012 (Conc.) 10.72Mt @ 5.1% Cu, 1.7g/t Au Life-of-mine extraction from Ore (541,000t contained copper, Reserves and Mineral Resources 599,000oz contained gold) discovered to date 93% Mineral
Slide 21: Annual grade and C1 cost profile
DeGrussa – annual grade and C1 cost profile For personal use only 21
Slide 22: Annual grade and C1 cost profile
DeGrussa – annual grade and C1 cost profile For personal use only • Definitive Feasibility Study optimises project cash flows • Higher grades + lower C1 costs in first three years = increased cash flow 22
Slide 23: Growth
For personal use only Growth • Organic growth – exploration success • Joint Venture opportunities • Acquisitions – Business Development Team 23
Slide 24: Growth – future catalysts
Growth – future catalysts • Organic growth – exploration success: For personal use only • Extensive bank of information now accumulated within prospective DeGrussa mine corridor • Prospective corridor extended to +30km, providing outstanding exploration upside • Regional exploration across Australia
Slide 25: Mineral Field – regional exploration
DeGrussa Mineral Field – regional exploration For personal use only 25
Slide 26: Major exploration push
DeGrussa – major exploration push For personal use only • Developing regional geology model from: • Deep drilling • Sterilisation & pre-development drilling • Mapping & geophysical interpretation • Priority VMS corridor extends for +30km • Lithogeochemistry program underway to aid target vectoring •
Slide 27: Unlocking the "Corridor of Riches"
DeGrussa – unlocking the “Corridor of Riches” For personal use only + 30km strike length prospective for VMS mineralisation • 30km long, 1.2km wide prospective corridor which can be explored to +2km vertical depth • Of this, only 1.2km strike length has been intensively explored to 600m vertical dep
Slide 28: Global VMS camps
Global VMS camps • Most significant VMS deposits occur in clusters that For personal use only define major mining camps – major source of global copper, zinc, lead production, eg: • Bathurst (New Brunswick) – 229.8Mt @ 0.46% Cu, 7.66% Zn, 3.01% Pb, 91g/t Ag, 0.46g/t Au (camp discovered 1952) • Kidd
Slide 29: DeGrussa is a VMS deposit
DeGrussa is a VMS deposit • Four lenses of mineralisation typical of VMS For personal use only deposit cluster • Classic host sequence of intra-volcanic sediments • Typical seafloor alteration with regionally extensive litho-geochemical signature • Classic VMS sulphide textures, including remnant ch
Slide 30: Potential of Global VMS Camps
Potential of Global VMS Camps Volcanic District No. of Deposits Million Tonnes Ore Million Tonnes Metal Area of District (km²) For personal use only Hokuroku, Japan 18 90 6.2 720 Bathurst No1, Canada 12 180 15.1 880 Bathurst No2, Canada 15 98 5.8 1150 Flin Flon, Canada 10 65 4.3 560 Snow Lake, Canad
Slide 31: Growth – Joint Ventures
Growth – Joint Ventures For personal use only • Reviewing asset-driven exploration opportunities in Australia and abroad • First opportunity secured: • Farm-in agreement with Global Resources Corporation (ASX: GRM) • Kennedy Highway Project (North Queensland) • $3M expenditure to earn 60%, with opti
Slide 32: Growth – Acquisitions
Growth – Acquisitions • Highly skilled in-house Business Development Team: For personal use only • Headed up by Technical Director John Evans • New Exploration Manager – Australia: Bruce Hooper • Business Analyst supported by strong technical team of 4-6 geologists and mining professionals • Ability
Slide 33: Summary – a new global mining company in the making
Summary – a new global mining company in the making • Flagship DeGrussa Project moving into production: For personal use only • First truck of DSO – 17 February 2012 • First truck of underground ore – 29 February 2012 • First ore in the SAG mill – Q3 2012 • High-margin production profile • Regional
Slide 34: Appendix: Competent Person's Statements
Appendix: Competent Person’s Statements Competent Person’s Statement – Mineral Resources For personal use only • The information in this report that relates to Mineral Resources (except the Indicated Resource of Supergene Chalcocite) is based on information compiled by Diederik Speijers who is a Fel
Slide 35: Australia's newest copper-gold producer
For personal use only Australia’s newest copper-gold producer: Start of mining at DeGrussa opens a new chapter of growth Sandfire Resources – Global Investor Update – March 2012
Slide 36: Appendix – DeGrussa: Financial Evaluation and Price Assumptions
Appendix – DeGrussa: Financial Evaluation and Price Assumptions Life-of-mine (LOM) For personal use only $ Billion Project revenue 4.2 Royalties (5% weighted average) (0.2) Operating costs and sustaining capital (1.6) Project operating cash flow (pre-tax) 2.4 Pre-production capital expenditure (0.4)
Slide 37: Appendix – DeGrussa: Capital and Operating Costs
Appendix – DeGrussa: Capital and Operating Costs For personal use only Capital Cost Breakdown A$M Construction (plant, equipment and infrastructure) 267 Open pit mining to access DSO 44 Underground mine development 56 Other pre-production 17 Total pre-production capital 384 Life-of-Mine Operating Co
Slide 38: Appendix – DeGrussa: Mineral Resources
Appendix – DeGrussa: Mineral Resources Table 1: DeGrussa Copper-Gold Project – March 2011 JORC Resource Statement For personal use only Resource Contained Contained Competent Zone Location Tonnes (Mt) Copper (%) Gold (g/t) Category Copper (t) Gold (oz) Person Gold Measured Open Pit 0.14 - 1.5 - 7,00
Slide 39: Appendix – DeGrussa: Ore Reserves
Appendix – DeGrussa: Ore Reserves Table 2: DeGrussa Copper-Gold Project – March 2011 Ore Reserve Statement Reserve Mining Contained Copper Contained Gold For personal use only Deposit Tonnes (Mt) Copper (%) Gold (g/t) Category Method (t) (oz) Open Pit - DeGrussa Probable 0.14 25.6 2.5 37,000 12,000