Athena Resources Limited · ASX:AHN
Athena Resources — Shareholder Meeting (November 2011)
50 slides from Athena Resources's shareholder meeting presentation, Nov 28, 2011
Slide 1: Welcome to the 2011 AGM
Welcome to the 2011 AGM For personal use only RESOURCES LIMITED Tà{xÇt RESOURCES LIMITED
Slide 2: Disclaimer
Disclaimer For personal use only – This presentation is provided for the sole purpose of providing preliminary technical, financial and other background information to enable you to review the business activities of Athena Resources Limited (“Athena”). – The material provided does not constitute an
Slide 3: Competent Persons Statements
Competent Persons For personal use only Statements – The technical information relating to Athena’s exploration projects was compiled by Mr Liam Kelly, an employee of Athena Resources Limited. Mr Kelly is a Member of the Australasian Institute of Mining and Metallurgy, and has sufficient relevant ex
Slide 4: What we are covering today
What we are covering today For personal use only Company background The Year in Review The future of Athena RESOURCES LIMITED Tà{xÇt RESOURCES LIMITED
Slide 5: Overview - Financial
Overview - Financial For personal use only Capital Structure Share Price Ordinary Shares 112m Options 34m Fully Diluted 146m Market Capitalisation Enterprise value Ev to Attributable Contained Fe Raj supplying $9 million $1.40 $1.20 $1.00 RESOURCES LIMITED $0.80 $0.60 $0.40 $0.20 $0.00 EMG MDX AHN I
Slide 6: The Year in Review
The Year in Review For personal use only • Exploration • Preliminary JORC Resource • Metallurgy RESOURCES LIMITED Tà{xÇt RESOURCES LIMITED
Slide 7: Byro Exploration
Byro Exploration For personal use only RESOURCES LIMITED Tà{xÇt RESOURCES LIMITED
Slide 8: Byro Base Metals Exploration
Byro Base Metals Exploration For personal use only BYRO EAST DRILL HOLES (Left) • AHRC0025 Southeast Contact Cu anomaly • AHRC0026 Midwest Contact Ni soil anomaly • AHRC0027 (140m) Then diamond tail below • AHDH0001 Extended to 500m RESOURCES LIMITED Tà{xÇt RESOURCES LIMITED
Slide 9: Byro Base Metals Exploration
Byro Base Metals Exploration For personal use only RESOURCES LIMITED Tà{xÇt RESOURCES LIMITED
Slide 10: Byro South Ore Body
Byro South Ore Body For personal use only RESOURCES LIMITED Tà{xÇt RESOURCES LIMITED
Slide 11: Typical Byro South Cross Section
Typical Byro South Cross Section For personal use only RESOURCES LIMITED Tà{xÇt RESOURCES LIMITED
Slide 12: Byro Iron Ore Exploration - Fe1 Ore Body
Byro Iron Ore Exploration Fe1 Ore Body For personal use only RESOURCES LIMITED Tà{xÇt RESOURCES LIMITED
Slide 13: Typical Fe1 Cross Section
TYPICAL FE1 CROSS SECTION For personal use only RESOURCES LIMITED Tà{xÇt RESOURCES LIMITED
Slide 14: Byro Magnetite Horizon
BYRO MAGNETITE HORIZON For personal use only RESOURCES LIMITED Tà{xÇt RESOURCES LIMITED
Slide 15: Last year promise
Last year promise For personal use only This diagram was shown at last years AGM To Achieve Inferred Resource Tonnes Grade Target Definition Assay DTR Drilling Approvals 0RE TESTING Drilling Contracts Optimise Grind Drilling Crushing Methods Data Collation RESOURCES LIMITED Announce Resource to Mark
Slide 16: Preliminary Inferred Resource
Preliminary Inferred Resource For personal use only RESOURCES LIMITED Tà{xÇt RESOURCES LIMITED
Slide 17: Ore Testing
Ore Testing For personal use only • Metallurgical test work was carried out on both diamond core and RC chips. • Changsha Research Institute of Mining and Metallurgy proposed a simple processing flow sheet including crushing and grinding followed by wet low–intensity magnetic separation (LIMS). • AL
Slide 18: Grind Size Characteristics
Grind Size Characteristics For personal use only Grind Size in microns and time in seconds to achieve this RESOURCES LIMITED Grind time (effort) has significant impact on both capital costs and operating costs Tà{xÇt RESOURCES LIMITED
Slide 19: Grind Size Comparison
Grind Size Comparison For personal use only 300.0 250.0 250.0 200.0 150.0 100.0 75.0 75.0 50.0 38.5 40.0 40.0 32.0 RESOURCES LIMITED 25.0 25.0 23.0 25.0 0.0 AHN EMG GBG ACS FXR GRR IRD ARH MDX LML ROY Tà{xÇt RESOURCES LIMITED
Slide 20: Grind Size Characteristics
Grind Size Characteristics For personal use only Grind Size in microns and time in seconds to achieve this RESOURCES LIMITED Even our nearest competitors require 8 times the capex – the others require 30 times ! Tà{xÇt RESOURCES LIMITED
Slide 21: Quality and Composition
Quality and Composition For personal use only What does 35% Head Grade mean ? RESOURCES LIMITED Tà{xÇt RESOURCES LIMITED
Slide 22: Quality and Composition
Quality and Composition For personal use only Concentrate at 250 microns RESOURCES 49.4% Recovery LIMITED Tà{xÇt RESOURCES LIMITED
Slide 23: Quality and Composition
Quality and Composition For personal use only Concentrate at 125 microns RESOURCES 46.5% Recovery LIMITED Tà{xÇt RESOURCES LIMITED
Slide 24: Plant Design
Plant Design For personal use only GRES were commissioned during the year to design a plant suitable for our product RESOURCES LIMITED Tà{xÇt RESOURCES LIMITED
Slide 25: The future of Athena
The future of Athena For personal use only PRODUCTION IN 2014 RESOURCES LIMITED Tà{xÇt RESOURCES LIMITED
Slide 26: The importance of timing
The importance of timing For personal use only First mover advantage • Geraldton Port capacity • Oakajee rail access • Oakajee port access • Capitalise on current strong iron ore prices RESOURCES LIMITED Tà{xÇt RESOURCES LIMITED
Slide 27: Production in 2014
Production in 2014 For personal use only How will we achieve this ? RESOURCES LIMITED Tà{xÇt RESOURCES LIMITED
Slide 28: Long Term Development - Phase I
Long Term Development Parameters For personal use only – PHASE I • 24 million tonnes existing JORC Resource • Mining / processing at 6M tpa • Transport by Road • Shipping from Geraldton Port • Starting 2014 • Duration 4 years RESOURCES LIMITED Tà{xÇt RESOURCES LIMITED
Slide 29: Long Term Development - Phase II
Long Term Development Parameters For personal use only – PHASE II • 50 million tonnes target currently being drilled • Mining / processing at 25M tpa • Transport by Rail • Shipping from Oakajee Port • Starting 2018 • Duration 2 years RESOURCES LIMITED Tà{xÇt RESOURCES LIMITED
Slide 30: Long Term Development - Phase III
Long Term Development Parameters For personal use only – PHASE III • +100 million tonnes of additional targets at Byro • Mining / processing at 25M tpa • Transport by Rail • Shipping from Oakajee Port • Starting 2020 RESOURCES LIMITED Tà{xÇt RESOURCES LIMITED
Slide 31: Summary table of Phases
Summary table of Phases For personal use only Target tpa Transport Shipping Start Life Phase I 24m 6m Road Geraldton 2014 4 Phase II 50m 25m Rail Oakajee 2018 2 Phase III +100m 25m Rail Oakajee 2020 RESOURCES LIMITED Tà{xÇt RESOURCES LIMITED
Slide 32: Tonnes mined
Tonnes mined For personal use only This schedule shows the effect of the tonnes planned above over the first ten years of the project. 000tpa 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 ……… Phase I 6,000 6,000 6,000 6,000 Phase II 25,000 25,000 Phase III 25,000 25,000 25,000 25,000 Total 6,000
Slide 33: Pricing Considerations
Pricing Considerations For personal use only • Mechanics • Quality • Value in Use RESOURCES LIMITED Tà{xÇt RESOURCES LIMITED
Slide 34: Mechanics
Mechanics For personal use only • When a report suggests an iron ore price is $150/tonne, what does this mean for Athena? – Generally this price will be; • In US dollars • CFR China main port (though not necessarily - it could be FOB) RESOURCES LIMITED • Based on 62% Fe Tà{xÇt RESOURCES LIMITED
Slide 35: The calculation
The calculation For personal use only • The industry standard for iron ore pricing however is c/dmtu, used to equalise different iron ore grades. • For Athena then, US$150/tonne means, – Subtract US$10/tonne being the approximate freight rate for Geraldton to China by Panamax vessel – US$140/tonne d
Slide 36: Quality
Quality For personal use only • Why is iron ore quality important? – There are many reasons, and two detrimental effects are; – High phosphorus in the iron ore reports to the finished steel and high phosphorus steel is brittle and difficult (or impossible) to roll into flat steel. – High levels of s
Slide 37: Extract from The Steel Index
Extract from The Steel Index For personal use only Iron Ore Specifications RESOURCES LIMITED Tà{xÇt RESOURCES LIMITED
Slide 38: Quality
Quality For personal use only • Iron ore pricing principles apply quite sizeable penalties for impurities above certain levels. • Athena’s concentrate product meets all acceptable product specifications Athena TSI Std TSI Max Indicative Penalty Moisture 8.00% 10.00% Alumina 0.27% 3.50% 4.00% 5c/dmt/
Slide 39: Value in Use
Value in Use For personal use only • Carbon Pricing / Coking Coal – Iron ores consists of oxygen and iron atoms bonded together into molecules. – To convert it to metallic iron the oxygen must be removed. – Magnetite (Fe3O4) has one less oxygen atom per molecule than Hematite (Fe2O3) – Carbon is use
Slide 40: The chemistry
The chemistry For personal use only • A (very) simplified chemical equation of the blast furnace can be represented as – Air blast and charcoal (coke): 2 C + O2 → 2 CO. – Carbon monoxide (CO) is the principal reduction agent. » Stage One: 3 Fe2O3 + CO → 2 Fe3O4 + CO2 » Stage Two: Fe3O4 + CO → 3 FeO
Slide 41: Other references
Other references For personal use only Sources for benchmark prices IODEX http://www.platts.com/DailyIronOreBenchmark MBIOI http://www.mbironoreindex.com/ TSI http://www.thesteelindex.com/en/iron-ore/ RESOURCES LIMITED Tà{xÇt RESOURCES LIMITED
Slide 42: Selling Price Assumptions For Projections
Selling Price Assumptions For Projections For personal use only Calendar Year Athena price US$ Comment 2014 130 2015 115 2016 105 2017 100 2018 95 Onwards RESOURCES LIMITED *Based on forecasts from CBA, JPMorgan, UBS Tà{xÇt RESOURCES LIMITED
Slide 43: Capital and Operating Costs
Capital and Operating Costs For personal use only • Costs provided from GRES Study – Capital • Plant $136 million • Camp $24 million – Operating - Processing • Fixed per annum $18,750,000 • Variable cost per tonne $4.71 RESOURCES LIMITED Tà{xÇt RESOURCES LIMITED
Slide 44: Capital and Operating Costs
Capital and Operating Costs For personal use only • Costs derived from other external sources – Operating - Mining • Waste $5.50 • Ore $5.50 – Other Operating Costs • Road Haulage per km (Phase I) 9.5 cents per tonne • Rail total Phase I $3.00 • Rail rate per km (Phase II onwards) 3.0 cents per tonn
Slide 45: Projections
Projections For personal use only Byro Iron Project - 10 year plan <------ Existing JORC normalised ------> <---------------------------- Current Drilling -------------------------------> Calendar Year ending 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Tonnes Mined 000's 18,000 16,500 15,000 1
Slide 46: Projection Summary
Projection Summary For personal use only NPV of Cash Flows first 4 years 7.5% $97,000,000 NPV per share (from January 2012) $0.65 Average Profit per share per annum $0.25 NPV of Cash Flows first ten years 7.5% $741,000,000 NPV per share (from January 2012) $4.95 Average Profit per share per annum $1
Slide 47: Typical Year and Tonne
Typical Year and Tonne For personal use only First four years Subsequent Years Annual Tonne Annual Tonne $000's $ $000's $ Sales 299,000 126 1,030,000 118 Mining -87,000 -37 -413,000 -47 Processing -47,000 -20 -137,000 -16 Transport -75,000 -31 -122,000 -14 Gross Profit 90,000 38 358,000 41 Administ
Slide 48: Timeline to production
Timeline to production For personal use only •Flora and Fauna Jan-12 Apr-12 •Hydrology Apr-12 Jun-12 •Heritage Apr-12 Jun-12 •Environmental Apr-12 Jun-12 •Definitive feasibility study Feb-12 May-12 •Construction of Plant Jul-12 Dec-13 •Construction of Camp Jan-13 Jun-13 •Pre strip and Mining Aug-13
Slide 49: Conclusion
Conclusion For personal use only • We have the Product • We have the Process • We have the Market • We have the Timeline • We have the Economics ATHENARESOURCES IN PRODUCTIONLIMITED IN 2014 Tà{xÇt RESOURCES LIMITED
Slide 50: Thankyou
Thankyou For personal use only ATHENA IN PRODUCTION IN 2014 RESOURCES LIMITED Tà{xÇt RESOURCES LIMITED
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