Strike Resources Limited · ASX:SRK
Strike Resources — Investor Presentation (June 2010)
27 slides from Strike Resources's investor presentation, Jun 16, 2010
Slide 1: A World-Class Iron Ore Project – Peru and Potential Early Cash Flow from Thermal Coal – Indonesia
For personal use only A World-Class Iron Ore Project – Peru and Potential Early Cash Flow from Thermal Coal – Indonesia June 2010
Slide 2: Executive Summary
Executive Summary For personal use only Strong cash position with A$46 million in cash and investments Flagship project is a 20 Mtpa, high-quality Iron Ore Project in Peru Resource recently upgraded to 269Mt @ 57.3% Fe (>50% Indicated)* Potential to substantially increase resources Pre fea
Slide 3: Key Corporate Data
Key Corporate Data For personal use only ASX code: SRK Capital structure: • ordinary, fully-paid shares 130 million • unlisted options 18.3 million • fully-diluted issued capital 148.3 million Major shareholders include: • Gallagher Holdings Limited 19.9% • Orion Equities Limited (OEQ) 10.1% •
Slide 4: Peru
For personal use only Peru 4
Slide 5: Peru is a world-class mineral belt
Peru is a world-class mineral belt For personal use only Peru is among the top five producers in the world of silver, zinc, gold, copper and lead Rio Tinto, Xstrata, Newmont, BHP, Shougang and Teck Cominco, amongst many others, have large stakes in Peru’s mining industry Peru offers: • free-tr
Slide 6: Strike is building strong community relations in Peru
Strike is building strong community relations in Peru For personal use only Local community approvals are required for land access and mining Strong, experienced Community Relations Team Mine development involves negotiations with several communities Community support is being fostered throu
Slide 7: Strike holds its interests in Peru through a joint venture company, Apurimac Ferrum S.A.
Strike holds its interests in Peru through a joint venture company, Apurimac Ferrum S.A. (AF) For personal use only Strike Resources Limited 44%* Iron Associates Corporation (Peru) 12% D&C Group 44% (Peru) Apurimac Ferrum S.A. (Peru) Apurimac Concessions Cuzco Concessions * Strike can potentially mo
Slide 8: The Apurimac Project
For personal use only PERU The Apurimac Project 8
Slide 9: Apurimac Project Location
Apurimac Project Location For personal use only 9
Slide 10: Target iron ore mineralisation for Opaban is projected at 300–350MT at 57–58% Fe
Target iron ore mineralisation for Opaban 1 and Opaban 3 is projected at 300 – 350MT at 57 – 58% Fe* For personal use only Target mineralisation is based on: Opaban 1 • undrilled gravity and magnetic anomalies Bouguer Gravity • both deposits open at depth and to the Anomaly west Opaban 3 • high-gr
Slide 11: Drilling has to date only "scratched the surface"
Drilling has to date only “scratched the surface” For personal use only The Apurímac project is at the heart of a new iron ore province Airport It comprises 72 concessions Inferred 127Mt @ 56.7% Fe totalling 59,000 hectares Indicated 142Mt @ 57.8%Fe Numerous +60% Fe rock chip samples on the ma
Slide 12: Excellent metallurgical properties
Excellent metallurgical properties For personal use only Coarse particle liberation size (250 microns vs 30 – 40 microns) Greater than 70% mass recovery (vs 35 – 50%) Excellent product grades with low impurities Fe 68.02% to 68.28% Al2O3 0.30% to 0.35% SiO2 1.51% to 1.77% P 0.01% to 0.02% Lo
Slide 13: Pre-feasibility study points to attractive project economics
Pre-feasibility study points to attractive project economics For personal use only Pre-feasibility study completed in June 2008 • 27Mtpa mining operation for 20Mtpa product • coarse beneficiation producing >68%Fe product with low impurities • slurry pipeline to coast for dewatering and export • av
Slide 14: Apurimac operating costs will be much lower than those of Australian mines
Apurimac operating costs will be much lower than those of Australian mines For personal use only Cash costs at target production rate(US$/tonne Fe) $50 $45 $40 $35 $30 $25 $20 BHPB, Rio and Vale $15 $10 $5 $0 ATLAS IRON LTD FORTESCUE METALS BC IRON LTD FERRAUS LTD BROCKMAN RESOURC GIRALIA RESOURCE S
Slide 15: Forward program – the pathway to feasibility study
Forward program – the pathway to feasibility study For personal use only Community programs Approvals Environmental studies, community and government approvals Drilling 29,000 m - Satellite, Opaban I & III Completion March 2011 Pipeline 10/15Mtpa Completion June 2010 Railway option Completion Septem
Slide 16: The Cuzco Project
For personal use only PERU The Cuzco Project 16
Slide 17: Cuzco Project Location
Cuzco Project Location For personal use only 17
Slide 18: Cuzco has a mineralisation target of 650Mt
Cuzco has a mineralisation target of 500 - 650Mt at 45 to 60% Fe* For personal use only 23 Concessions with an area of 17,963 ha The Cuzco deposits occur within a 4km diameter area around an intrusive core Current drilling on 30% of anomaly Work done to date includes: • geophysical surveys •
Slide 19: Indonesia
For personal use only INDONESIA 19
Slide 20: Berau Thermal Coal Project - Location
Berau Thermal Coal Project - Location For personal use only 5,000ha concession Rights to 100% of mineral resources (subject to royalty) AMDAL Environmental approval received IUP Production License granted Community approvals (agreements) received Land purchases well advanced FS and LoM
Slide 21: Approximately 20,000m of drilling has established a JORC resource in Berau of 27.7Mt
Approximately 20,000m of drilling has established a JORC resource in Berau of 27.7Mt* For personal use only JORC Resource of 27.7 Mt • Measured: 11.0 Mt • Indicated 11.1 Mt • Inferred 5.6Mt • <50% of prospective sequence tested Coal Quality: • K/cal (gar): 5605 - 5633 • moisture (av): 16.6 - 16.
Slide 22: Feasibility study indicates robust business
Feasibility study indicates robust business For personal use only Production of 1.5 – 3Mtpa Strip ratio 9.2:1 30km road haul to port and barging for off-shore loading Capital cost of US$19M plus working capital Operating costs of US$41/t fob Annual free cash flow of US$39M based on 3Mtpa
Slide 23: Peer Group Comparison
For personal use only Peer Group Comparison 23
Slide 24: SRK is undervalued relative to emerging peers, based on attributable current resource
SRK is undervalued relative to emerging peers, based on attributable current resource For personal use only Resource of 269 Mt @ 57.3% Fe. (SRK 44%) SRK excluding Berau Coal1 1 Berau Coal value stripped out based on EV/Resource coal metric of A$0.75/t. EV = Enterprise Value 24
Slide 25: Disclaimer
Disclaimer For personal use only 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 other t
Slide 26: Contact Information
Contact Information For personal use only Strike Resources Limited A.B.N 94 088 488 724 Level 8 The Forrest Centre 221 St Georges Terrace Perth, Western Australia 6000 Telephone +61 8 9324 7100 Facsimile +61 8 9324 7199 Email: info@strikeresources.com.au Web: www.strikeresources.com.au 26
Slide 27: A World-Class Iron Ore Project – Peru and Potential Early Cash Flow from Thermal Coal – Indonesia
For personal use only A World-Class Iron Ore Project – Peru and Potential Early Cash Flow from Thermal Coal – Indonesia June 2010