Oceanic Iron Ore Corp. · TSXV:FEO
Oceanic Iron Ore — Investor Presentation (December 2015)
49 slides from Oceanic Iron Ore's investor presentation, Dec 3, 2015
Slide 1: Investor Presentation
fn OCEANIC (RON -ORE CORP WWW.OCEANICIRONORE.COM TSX:V - FEO Investor Presentation
Slide 2: Cautionary Notes
Cautionary Notes This presentation includes certain "Forward-Looking Statements” as that term is used in applicable securities law. All statements included herein, other than statements of historical fact, including, without limitation, statements regarding potential mineralization and resources, ex
Slide 3: Corporate Overview
Corporate Overview Capitalization Summary (December 3, 2015) Shares in Issue 42,308,124 Warrants ($0.30 - $10.00) 15,536,250 Options ($0.15 - $0.20) 4,184,100 Convertible Debenture ($0.43) 4,710,067 Restricted Share Units 2,596,355 Fully Diluted 69,334,896 Listings FEO (TSX-V) 3
Slide 4: Company Overview
Company Overview • Iron ore development in the Labrador Trough (Québec) • Led by a highly experienced management team that has managed, operated developed and/or sold over $20 bn in assets • 100% owned Ungava Bay projects - Hopes Advance, Morgan Lake, Roberts Lake • Largest single concession holder
Slide 5: Hopes Advance Project - A World Class Premium Product Iron Ore Project
HOPES ADVANCE PROJECT - A World Class Premium Product Iron Ore Project • World Class Iron Ore Reserves • Lowest Quartile Costs • Best in Class Management • Superior Quality Product • Stands Up in All Price Cycles Hopes Advance 66.5% Fe Pellets Iron Ore Carrier 5
Slide 6: Hopes Advance – The Premier High Quality, Low Cost Iron Ore Project
Hopes Advance – The Premier High Quality, Low Cost Iron Ore Project in North America Robust Pre- • Base case pre-tax NPV of $5.6bn and unlevered IRR of 20.5% Feasibility Study* • Life of mine operating cost $30/tonne, potential to become one of the world’s Economics lowest operating cost iron ore pr
Slide 7: Hopes Advance Pre-Feasibility Highlights
Hopes Advance Pre-Feasibility Highlights (September 2012) Variable PFS Highlights • Phase 1 production of 10 FOB Price $100/tonne million tpa to year 10 CAD:USD $1.00 • Expansion to 20 million tpa production thereafter LOM operating cost $30.18/tonne Pre-tax NPV (8%) $5.6bn • Expected mine life of 3
Slide 8: Significant Progress to Date
Significant Progress to Date • Technical • Pilot plant testwork and flowsheet development • Pre-Feasibility Study in respect of Hopes Advance completed • Proven and probable mineral reserves* established • Project Optimization • Product Value in Use Marketing Study • Product Optimization Study • Shi
Slide 9: 2015 - A Year of Cost Reduction and Building for the Future
2015 - A Year of Cost Reduction and Building for the Future • Reduced overhead costs, management salaries and fees • Deferral of EIA and BFS work to 2016 to preserve cash • Negotiated amendment to $3 million debenture agreement with Sino-Canada Fund I • Negotiated amendment to 2015 royalty payments
Slide 10: Current Global Sources Are Creating Demand For Higher Quality Supply
Current Global Sources Are Creating Demand For Higher Quality Supply • Quality of major supply sources has declined and the decline continues • Japanese market has focused on high quality flat carbon and stainless steel products to meet consumer demand. All Japanese steel producers currently cite qu
Slide 11: Asian Based Strategic Partner Experience
Asian Based Strategic Partner Experience • Sustained direct investment by major steel producers in China into high quality foreign iron ore projects driven by: • Declining quality • High cost domestic production or absence thereof • Continued long term growth outlook across the steel sector, particu
Slide 12: Next Steps
Next Steps Development Activity Target Completion Date Strategic Partnering & Financing 2016 Completion of Environmental Impact Study 2016 Negotiate impact benefits agreement with local 2016 stakeholders Feasibility Study 2016 / 2017 Project Construction 2018 - 20 Production 2020 - 2051+ 12
Slide 13: Hopes Advance Mineral Reserve
Hopes Advance Mineral Reserve MINERAL RESERVES (25% Fe cut-off) Category Tonnes Total Fe (%) Weight Recovery (%) Proven Reserves 763,276,000 32.3% 37.4% Probable Reserves 595,990,000 32.1% 37.1% Proven and Probable 1,359,266,000 32.2% 37.3% Reserves Disclosure: • Open pit reserves are based on a 25%
Slide 14: Hopes Advance Images
Hopes Advance Images Castle Mountain Zone 2 Camp Drill Core 14
Slide 15: Hopes Advance Metallurgy
Hopes Advance Metallurgy • 600 samples across all deposits at Hopes Advance Bench – Scale • Demonstrated high weight recoveries with high percentage of Testwork iron recovery from gravity process April 2012 • Simple process flow sheet with high grade 66.5% concentrate • Very low levels of deleteriou
Slide 16: Hopes Advance Flowsheet – Simple Metallurgy
Hopes Advance Flowsheet – Simple Metallurgy Primary Grinding • High weight and Fe %Fe 34.2% recoveries using a simple %SiO2 42.1% flowsheet Wt% 100% Gyratory Crusher Primary Grinding Grind 300um Spiral Tails Cobber LIMS Con Final Tails %Fe 19.7% %Fe 40.0% %SiO2 59.2% %SiO2 40.8% Wt% 68.5% Wt% 13.5%
Slide 17: Excellent Product Chemistry
Excellent Product Chemistry Major Elements (%)* Fe SiO2 Mg0 Ca0 AI203 Na K 66.6% 4.5% 0.1% 0.4% <0.01% <0.01% <0.01% Mn Ti Cr V P S 0.22% <0.01% <0.01% <0.01% <0.01% 0.03% • Combined concentrate includes 64% hematite and 30% magnetite • Ratio of hematite to magnetite is 2.1 : 1 * Analysis for Castle
Slide 18: High Quality Product
High Quality Product Alumina - %AIO2O3 Phosphorus - %P Source: Alderon Iron Ore, Sept 2012 Source: Alderon Iron Ore, Sept 2012 • High quality product with amongst the lowest alumina and phos content • Positive impact on blast furnace performance and overall operating and capital costs 18
Slide 19: Hopes Advance Site Layout
Hopes Advance Site Layout • No rail requirement Power Generation Ungava Bay Tailings Facility Port Pointe Iron Breakwater Valley Hopes Advance Bay F E D C Concentrator, Aupaluk Truck Shop, & Bay Zone Camp McDonald Oceanic Iron Ore Claims Restricted Land West Zone Pipeline & Access Road Pit Designs A
Slide 20: Port & Shipping Logistics
Port & Shipping Logistics • September 2013 – results of Shipping Optimization Study led by AMEC • Includes input from shipping & transshipment companies as well as port authorities: • Fednav Limited • Canada Steamship Lines • Europees Massagoed Overslagbedrijf • Shipping strategy is technically feas
Slide 21: Viable Year-Round Shipping Routes
Viable Year-Round Shipping Routes • Hopes Advance Bay is located at the midpoint between Deception Bay to the NW and Voisey’s Bay to the SE • Proven shipping technology: Glencore Xstrata, Vale, and soon Canadian Royalties all shipping 12 months per year with two of three operations located further n
Slide 22: Social and Environmental Considerations
Social and Environmental Considerations • A corporate philosophy and first consideration in Hope’s Advance development • Clear communication and buy-in required from employees, consultants and contractors • Early stakeholder and government interaction • LOI agreed with Inuit community • Focus on add
Slide 23: Global Steel Production to Increase 50% by 2021
Global Steel Production to Increase 50% by 2021 • Driven by global population growth • China will lead, however India and growth in other geographic regions also contributors • Growth in global construction sector projected at +70% by 2025 • Economic iron ore resources in China declining with 40% of
Slide 24: China Steel Demand
China Steel Demand Robust & Growing Over Medium - Long Term Source: Rio Tinto • China’s cumulative steel consumption per capita remains well behind developed world • New and replacement consumption will drive future growth focused in automotive, machinery and “white” products such as appliances, air
Slide 25: Supply Cost CIF China
Supply Cost CIF China “The National Development and Reform Commission on February 3, 2014 said Chinese steelmakers should keep building up stakes in global iron-ore assets in the interests of China's strategic security and "speaking rights," or influence, in global trade. China's ore imports rose 10
Slide 26: China’s Increasing Importance as an Iron Ore Importer
China’s Increasing Importance as an Iron Ore Importer 26
Slide 27: World Iron Ore Export Sources
World Iron Ore Export Sources 27
Slide 28: Low Operating Cost Relative to Peers
Low Operating Cost Relative to Peers Iron Road Limited 6 7 % C O N CE N T RAT E $59.26 Champion Iron Mines 6 5 %+ S IN T E R F E E D $44.05 Black Iron 6 7 % P E LLE T F E E D $43.97 Advanced Explorations 6 6 % C O N CE N T RAT E $49.13 Alderon Iron Ore 6 5 .5 % C O N CE N T RAT E $42.17 Afferro Mini
Slide 29: Hopes Advance – The Premier Iron Ore Development Project
Hopes Advance – The Premier Iron Ore Development Project • Exceptional large scale resource in low risk jurisdiction • Low cost producer: $30/tonne life of mine • High grade (66.5%) premium iron concentrate for seaborne market • Low impurities = high quality source of supply • Fast track development
Slide 30: Appendices
APPENDICES
Slide 31: Leadership Team
Leadership Team Steven Dean, • A Fellow of the Australian Institute of Mining and Metallurgy, a Member of the Canadian Institute of Mining, Executive Chairman Metallurgy and Petroleum, and a Fellow of the Institute of Chartered Accountants of Australia. Extensive and Director experience internationa
Slide 32: Leadership Team
Leadership Team Gordon Keep, • Extensive business experience in investment banking and creating public natural resource companies. Director Currently Executive Vice-President of Fiore Financial Corporation, a private boutique merchant banking firm • Also serves as an officer and/or director for seve
Slide 33: Ungava Property Project Areas
UNGAVA PROPERTY PROJECT AREAS 3,703 CLAIMS – 1,568 SQ.KM. 33
Slide 34: Conceptual Port Location
Conceptual Port Location 34
Slide 35: Conceptual Port Design
Conceptual Port Design • Pointe Breakwater has natural attributes which make it an ideal potential location for a year round large tonnage vessel deepwater port 35
Slide 36: Conceptual Shiploader Design
Conceptual Shiploader Design • Shiploader will be engineered and constructed to accommodate the tides in Ungava Bay 36
Slide 37: Trans-shipment
Trans-shipment Export vessel Floating Transfer Station • Floating transfer station with deck mounted equipment to transfer cargo from ice class vessels to export vessel 37
Slide 38: Ice Class Ship In Action
Ice Class Ship In Action Source: Aker Arctic 38
Slide 39: Section View of the Castle Mountain Grid
Section View of the Castle Mountain Grid 39
Slide 40: Previous Work
Previous Work • Labrador Trough noted for iron potential in 1895 by GSC • First claims staked in Hopes Advance area in 1951 • 1950-1970 active exploration including sampling, trenching, drilling, metallurgical testwork • Ungava Iron Ores Company completed most of the exploration in Hopes Advance are
Slide 41: Roberts Lake – Historical Resource
Roberts Lake – Historical Resource* Crude Resource Head Iron Exploration Metres Deposit (million metric Source Date (Sol. Fe) Drillholes Drilled tonnes) Kayak Bay Zone (Zone 1) 111.7 35.3% 45 1,880 P.E. Cavanagh 1970 Payne River (Zone 2) 22.3 31.0% 26 2,535 P.E. Cavanagh 1970 Igloo Lake (Zone 3) 101
Slide 42: Morgan Lake – Historical Resource
Morgan Lake – Historical Resource* Crude Resource Head Iron Exploration Metres Deposit (million metric Source Date (Mag. Fe) Drillholes Drilled tonnes) Payne Range 72.4 23.9% 29 1,427 G.A. Gross 1964 Morgan Lake 437.8 21.8% 16 2,184 A.T. Griffis 1957 Total Drill Indicated 510.2 22.1% 45 3,611 --- --
Slide 43: NPV Sensitivity to FOB Ungava Bay Iron Ore Price
NPV Sensitivity to FOB Ungava Bay Iron Ore Price (Unlevered)* $11,000 $10,000 $9,000 $8,000 NPV @ 8% (million) $7,000 $6,000 $5,000 $4,000 $3,000 Pre-Tax $2,000 After-Tax $1,000 $0 75 80 85 90 95 100 105 110 115 120 125 130 135 FOB Ungava Bay ($ / tonne) * Source: Oceanic Iron Ore Corp. – NI 43-101
Slide 44: NPV Sensitivity to Fuel Pricing
NPV Sensitivity to Fuel Pricing 2.0 15.5 2.0 15.0 NPV @8% ($ billion) 1.9 14.5 1.9 14.0 1.8 13.5 IRR (%) 1.8 13.0 1.7 12.5 1.7 12.0 1.6 11.5 1.6 11.0 1.5 10.5 % of base case 70 75 80 85 90 95 100 105 110 115 120 125 130 After-Tax 1.9 1.9 1.9 1.8 1.8 1.8 1.7 1.7 1.6 1.6 1.6 1.5 1.5 IRR 15.0 14.8 14.7
Slide 45: NPV Sensitivity to CAD:USD Exchange Rate
NPV Sensitivity to CAD:USD Exchange Rate 3.5 22.5 3.0 20.0 NPV @8% ($ billion) 2.5 17.5 IRR (%) 2.0 15.0 1.5 12.5 1.0 10.0 0.5 7.5 0.0 5.0 CAD/USD 0.85 0.90 0.95 1.00 1.05 1.10 1.15 1.20 1.25 1.30 1.35 1.40 1.45 After-Tax (0.1) 0.3 0.6 0.9 1.2 1.5 1.8 2.1 2.4 2.7 3.0 3.3 3.6 IRR 7.8 9.0 10.2 11.3 12
Slide 46: Construction Capital Costs
Construction Capital Costs* Initial Capex Expansion Capex Capital Description 2014 to 2016 2025/2026 ($000) ($000) Mine Equipment 92,658 61,231 Mine Development 66,203 2,918 Crusher 29,674 30,355 Concentrator 481,514 492,643 Pipeline 56,740 83,787 Port Filtering and Drying 325,654 267,401 Port and M
Slide 47: Total FOB Operating Costs (Excluding Royalty)
Total FOB Operating Costs (Excluding Royalty)* Years Years Years 2017 - 2024 2025 - 2026 2027 – 2047 Life of Mine Category (10 MM T/YR & (10 MM T/Y & (Post Average Self Generated Hydroelectric Expansion - 20 Power) Power) MM T/YR) Mining $1.57 $1.59 $1.23 $1.27 ($/tonne all material) Mining $5.46 $6
Slide 48: Concentrator Operating Costs
Concentrator Operating Costs LOM Concentrator Operating Costs (Thousand $) Period 2017 – 2024 2025 – 2026 2027 – 2047 LOM Total Production Rate 10 M t/y 10 M t/y 20 M t/y - Power Self-Generated Hydroelectric Hydroelectric - Operating Cost Manpower $126,113 $32,285 $424,882 $583,280 Electric Power $9
Slide 49: Oceanic Iron Ore Corp.
fn OCEANIC TRON LORE. CORP WWW.OCEANICIRONORE.COM TSX:V - FEO
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