Mgx Resources Limited · ASX:MGX
Mgx Resources — Mount Gibson Iron — Investor Presentation (May 2008)
27 slides from Mgx Resources's investor presentation, May 7, 2008
Slide 1: Investor Presentation May 2008
Investor Presentation May 2008 For personal use only 1 5/05/2008
Slide 2: Disclaimer
For personal use only Disclaimer This Document is Confidential and may not be reproduced, redistributed or passed on, directly or indirectly, to any other person, or published, in whole or in part, for any purpose without prior written approval from Mount Gibson Iron Limited. This Document is not a
Slide 3: Company overview
For personal use only Company overview Corporate • Issued capital 803.3 million shares, 10.8 million options • Market cap1 A$2,192 million • Cash2 A$42 million • Total debt2 A$93 million • EV A$2,141 million • Index S&P/ASX 200 • Finance facilities A$200m (includes A$25m contingent debt) Financials
Slide 4: Mount Gibson key event timeline
Mount Gibson key event timeline $4.00 For personal use only 3 $3.50 $3.00 Shares Trading Price (A$) Mount Gibson Ordinary $2.50 $2.00 2 $1.50 1 $1.00 $0.50 $0.00 Jan-04 Apr-04 Jul-04 Oct-04 Jan-05 Apr-05 Jul-05 Oct-05 Jan-06 Apr-06 Jul-06 Oct-06 Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 Tallering Pe
Slide 5: Key investment themes
For personal use only Key investment themes 1 Quality assets 2 Solid growth profile 3 Earnings leverage to strong iron ore price outlook 4 Disciplined financial strategy & strong performance 5 Experienced - disciplined Board & executive team with proven track record …Mount Gibson has a solid investm
Slide 6: Koolan Island, Tallering Peak and Extension Hill production
1 For personal use only Quality assets Koolan Island - production Tallering Peak - production Extension Hill - near-term production 6 5/05/2008
Slide 7: Tallering Peak
1 Quality assets Tallering Peak Main Range Pits looking west at end of March 2008 For personal use only • Simple process – mine, crush, road, rail and load vessels • First hematite ore shipped Feb 2004 • Producing 3 Mtpa • 65% Lump & 35% Fines ratio • Quality high grade, low 12 months 12 months 9 mo
Slide 8: Extension Hill
1 Quality assets Extension Hill For personal use only • Under development – first ore shipped June qtr 2009 • Low capital cost: $100m • Simple process – mine, crush, road, rail and load vessels • 3 Mtpa production rate • Low strip ratio – 0.7:1 • 50% Lump & 50% Fines ratio • Quality grade, low conta
Slide 9: Koolan Island provides significant upside potential
1 Quality assets Koolan Island provides significant upside potential … For personal use only 9 5/05/2008
Slide 10: Koolan Island
1 Quality assets Koolan Island Crushing, port & ship-loading facilities For personal use only • Ex BHP mine – closed 1992 • Mine, crush and shipload • First hematite ore shipped June 2007 • Production ramping up to 4 Mtpa by June qtr 2010 • Currently mining from satellite orebodies • Access premium
Slide 11: Koolan Main Pit - World class grade and quality
1 Quality assets Koolan Main Pit - World class grade and quality – 66.5% Fe, 3.48% SiO2, 0.69% Al2O3, 0.019% P, 0.3 LOI For personal use only 11 5/05/2008
Slide 12: Koolan Island Main Pit – World class high grade DSO
1 Quality assets Koolan Island Main Pit – World class high grade DSO Main Pit - March 2008 For personal use only • 37 metres wide • 1.5 km along strike Crusher Hill • 205,000 ore tonnes per vertical metre Main Pit • Access to Main Pit requires: Seawall construction – Construct seawall – De-water Ori
Slide 13: Main West ore-body has ensured timely access to Main Pit
1 Quality assets Main West ore-body has ensured timely access to Koolan Island Main Pit For personal use only 13 5/05/2008
Slide 14: Key Statistics: Reserves and Resources
1 Quality assets KEY STATISTICS For personal use only Tallering Peak Koolan Island Extension Hill Combined Reserves and Resources1 Reserves (Mt) 18.3 29.9 12.8 62.0 Proven & Probable Mineral Resources (Mt) 21.0 62.8 19.5 103.3 Measured, Indicated & Inferred Reserve Specifications Fe % 61.7 % 64.8 %
Slide 15: Key Statistics: Operations Data
1 Quality assets KEY STATISTICS For personal use only Tallering Peak Koolan Island Extension Hill Combined Operations Data Annual production (Mtpa) 3 4 (target) 3 (target) 10 Expected minimum mine life 6 8 6 Lump : Fines ratio 65% : 35% 30% : 70% 50% : 50% Truck (km) 65 - 85 Rail (km) 107 - 240 Stri
Slide 16: Projects have amongst the lowest capital intensity of peers
1 Quality assets Mount Gibson’s projects have amongst the lowest capital intensity of any of its peers For personal use only 200 ‘Greenfields’ infrastructure requirement 180 Balmoral South Magnetite Southdown 160 140 Capital intensity (US$/t) Karara magnetite 120 100 Rapid growth project 4 80 Pardoo
Slide 17: Solid growth profile: production growth to 2010
2 For personal use only Solid growth profile 9 Production growth to reach full production by 2010 … based on reserves 11 10 Extension Hill 9 Koolan Island 8 Tallering Peak 7 Million WMT 6 5 4 3 2 1 0 2006 Actual 2007 Actual 2008 Forecast 2009 Forecast 2010 Forecast 2011 Forecast 17 5/05/2008
Slide 18: Solid growth profile: organic growth opportunities
2 For personal use only Solid growth profile 9 Organic growth opportunities • T1 & North Ridge at Tallering Peak • Extension Hill conversion of resource to reserve • Koolan: – Western side of the Island unexplored with known surface hematite identified – Main Pit underground potential – outstanding
Slide 19: Tallering Peak – North Ridge and T1 gravity survey
2 Solid growth profile Tallering Peak – North Ridge and T1 gravity survey For personal use only Plan showing baseline gravity survey – T1 Plan showing location of gravity survey station points – North Ridge 19 5/05/2008
Slide 20: Potential mineralised area under Koolan Main Pit
2 Solid growth profile Extensive potential mineralised area under Koolan Main Pit to be drilled in coming months… For personal use only 20 5/05/2008
Slide 21: Recent drilling in Acacia & Barramundi
2 Solid growth profile Recent drilling in Acacia & Barramundi – increasing grade and width with depth For personal use only Section 2900E, Acacia East Section 3900E, Barramundi West 21 5/05/2008
Slide 22: M&A opportunities in iron ore & coking coal
2 For personal use only Solid growth profile 9 M&A opportunities in core steel production inputs – iron ore & coking coal Acquisitions that: • Lift Mount Gibson production to 15 – 20 Mtpa • Provide longer life (>15 years) and lower cost than existing operations • Produce high quality product (>64% F
Slide 23: Earnings leverage to strong iron ore price
3 Earnings leverage to strong iron ore price Robust iron ore price outlook For personal use only Dramatic growth in global iron ore Substantial increases forecast in iron consumption… ore prices… 250 12 2,000 …largely driven by Sales volume Lump price 10 China’s industrialisation Consumption (Mt) 20
Slide 24: Disciplined financial strategy & strong performance
4 Disciplined financial strategy & strong performance Good operating margins For personal use only 2005-2007 sales revenue 2005-2007 net profit CAGR 2005 - 2007: 45% Sales revenue (A$m) 200 163 60.0 CAGR 2005 - 2007: 88% 1 47.8 160 NPAT (A$m) 45.0 120 77 73 30.0 80 23.5 13.5 40 15.0 0 0.0 2005A 2006
Slide 25: Experienced Board & executive team
5 Experienced - disciplined Board & executive team with proven track record For personal use only Mr Luke Tonkin Mr Alan Rule Mr Neil Hamilton Managing Director CFO Chairman B.E., MAusIMM, AICD B.Comm, B.Acc, CA LLB • Appointed Non–Exec Chairman in April • Appointed in Oct 05 • Appointed CFO in Jun
Slide 26: Tallering Peak: access to infrastructure
For personal use only Tallering Peak Access to infrastructure – full production 26 5/05/2008
Slide 27: Koolan Island: installed infrastructure
Koolan Island Installed infrastructure – capacity 6Mtpa For personal use only 27 5/05/2008