Regent Pacific Group Limited · HKEX:575
Regent Pacific — BMO Investor Presentation (February 2008)
32 slides from Regent Pacific's conference presentation, February 2008
Slide 1: Regent Pacific BMO Investor Presentation
Regent Pacific BMO Investor Presentation February 2008
Slide 2: Disclaimer
Disclaimer The information contained in this presentation has been prepared using the information available to Regent Pacific Group Limited (“Regent”) at the time of preparation and may not include all relevant information regarding Regent or Yunnan Simao Shanshui Copper Company Limited (“Yunnan Sim
Slide 3: Disclaimer continued
Disclaimer continued Any forward-looking statement is subject to known and unknown risks, uncertainties, assumptions and other factors, some of which are beyond Regent’s or Yunnan Simao’s control, including, but not limited to: geopolitical uncertainty, political and economic instability, uncertain
Slide 4: Overview
SECTION ONE Overview 4
Slide 5: Our Strengths
Our Strengths Top-notch Management Team Strong Asset Portfolio Favorable Benchmark Against Peers Attractive Industry Fundamentals and Outlook 5
Slide 6: Top-notch Management Team
Top-notch Management Team • Stephen Dattels (Co-Chairman) – Former Executive VP Corporate Finance & Director Financing of Barrick Gold Corporation – Extensive track record of managing successful Expertise mining projects, including co-founder of UraMin Inc. • Jamie Gibson (CEO) – Direct Investment S
Slide 7: Attractive Investment Opportunity on HKEx
Attractive Investment Opportunity on HKEx • Unprecedented global coal tightness • Most undervalued coal play listed on HKEx • Substantial production and earnings growth forecasted over next 3-4 years • Ji Ri Ga Lang EBITDA margin of 80% on production of 3Mtpa • Expansion upside • Further acquisition
Slide 8: About Regent
About Regent • China based resources group focused on commodities, in particular thermal coal • Listed on HKEx with market cap of US$562M* • Strong cash position with over US$140M cash* • A proven operator of resources in China • Coal operations will be among lowest thermal coal producers in the wor
Slide 9: Regent since CCEC acquisition
Regent since CCEC acquisition Delivering on Targets Positioned for Growth • Acquired 51% interest in • Executing acquisitions Ji Ri Ga Lang coal project Project X: Negotiating JV Contract for 10Mtpa thermal coal • Ji Ri Ga Lang on track for 0.5 - 1.0Mtpa in 2008 Ji Lin South: Negotiating LOA for 5Mt
Slide 10: Our Growth Strategy
Our Growth Strategy • Diversification from a single mine owner, mitigate earnings volatility • Focus on moving Ji Ri Ga Lang into production in 2008 with expansion potential over 3Mtpa • Various stage of negotiation on two other world class coal assets with over 9Bt of coal resources (Chinese standa
Slide 11: Coal and Chemical
SECTION TWO Coal and Chemical 11
Slide 12: Quality Assets with Strong Growth Potential
Quality Assets with Strong Growth Potential 12
Slide 13: Inner Mongolia – Rail Infrastructure
Inner Mongolia – Rail Infrastructure 13
Slide 14: Ji Ri Ga Lang
Ji Ri Ga Lang Potential open pit, truck and shovel operations Drilling programme completed Estimate JORC Code compliant resource at end of 1Q08 LOCATION North north-west of Xilinhot, Inner Mongolia RESOURCE - Measured and indicated 98Mt - Inferred 19Mt - Total 117Mt (Chinese basis) COAL TYPE Thermal
Slide 15: Project X
Project X Potential open pit, truck and shovel operations Drilling programme planned for 2008 LOCATION Inner Mongolia RESOURCE 6Bt Chinese basis COAL TYPE Thermal coal (4500 kcal/kg) COST PER TONNE* RMB 20/t LOCAL MARKET PRICE* RMB 240/t MARKET Regional power stations TIME TO FIRST COAL* 2011 SEAM T
Slide 16: Ji Lin South
Ji Lin South Potential open pit, truck and shovel operations Drilling programme planned for 2008 LOCATION North-east of Xilinhot, Inner Mongolia RESOURCE 2.4Bt Chinese basis COAL TYPE Thermal coal (5000 kcal/kg) COST PER TONNE* RMB 35/t LOCAL MARKET PRICE* RMB 180/t EQUITY 100% MARKET Power station
Slide 17: Zhun Dong
Zhun Dong Underground Mine Open Cut Potential Good Thermal Coal SRK Report Greenfield Exploration LOCATION 200km north-east of Urumqi, Xinjiang RESOURCE 3Bt Chinese basis, 300–500Mt JORC COAL TYPE Thermal coal (+6000 kcal/kg) COST PER TONNE* RMB 80/t LOCAL MARKET PRICE* RMB 200/t EQUITY 100% MARKET
Slide 18: ACIL Project – Coke to Chemical
ACIL Project – Coke to Chemical Products Project I Project II Project III Coke 1.05Mt 2.24Mt - Coal Tar 30,000t 97,500t - Crude Benzene 9,000t 85,000t - Ammonium Sulfate 8,000t 16,000t - Methanol 80,000t 209,000t - Synthetic Ammonia - - 500,000t Production In full Undergoing Undergoing Timetable pro
Slide 19: Coal Markets – Unprecedented Times
Coal Markets – Unprecedented Times • Tight coal markets being squeezed by slower growth and stronger demand from Asia, especially China and India • Tightness exacerbated by problems in China, South Africa and Australia • Expect continued tightness extending to 2010 • China transformed into a net imp
Slide 20: Coal Markets – Unprecedented Times (cont’d)
Coal Markets – Unprecedented Times (cont’d) • China will still focus on coal fired electricity generation – (China’s energy white paper – Dec 07) • China added 90GW in power in 07 – 14.4% increase = size of UK’s entire grid • Expect 14% power capacity growth in 08 and – 13% thereafter until 2014 • C
Slide 21: Strong Coal Demand
Strong Coal Demand China is the World’s Largest Coal China Continues to Lead Strong Coal Consuming Country Demand Growth 2006 World Coal Consumption (Million tonnes oil equivalent ) China US % CAGR: 13.7 38.6% 18.4% 1,191 1,096 978 853 India 712 7.7% Other 35.3% 2002 2003 2004 2005 2006 Rich Coal Re
Slide 22: Dapingzhang
SECTION THREE Dapingzhang 22
Slide 23: Regent – Quality Asset with China Focus
Regent – Quality Asset with China Focus 40% Owner of the Dapingzhang JV • JV in operation since April 06 • Cash flow positive since operation Dapingzhang JV hosts resources of 374,000t Cu + 260,000t Zn + Au-Ag-Pb • Open pit, truck and shovel operations 97.5% Owner and operator of the Yinzishan JV •
Slide 24: Dapingzhang Mine – Mill Infrastructure
Dapingzhang Mine – Mill Infrastructure New Mine Office & Accommodation No.3 Mill Plant 500 tpd No.2 Mill Plant 500 tpd New Concentrate Filtration Plant No.4 Mill Plant 2,000 tpd New Zinc Circuit Tailings Dam Capacity 16M tonnes 24
Slide 25: Dapingzhang Mine – Potential to Add Significant Resources and Extend Mine Life
Dapingzhang Mine – Potential to Add Significant Resources and Extend Mine Life 25
Slide 26: Dapingzhang Mine – Potential to Add Significant Resources and Extend Mine Life
Dapingzhang Mine – Potential to Add Significant Resources and Extend Mine Life 26
Slide 27: Dapingzhang Mine – Copper and Zinc Operation in China
Dapingzhang Mine – Copper and Zinc Operation in China COPPER OPERATION ZINC OPERATION Mining: Open Pit Open Pit Processing: Conventional flotation Conventional flotation Product: Copper concentrate with Zinc concentrate gold & silver credits Forecast Metal Sold 2008: 10,000t/a^ 32,000t/a Resources (
Slide 28: Dapingzhang Mine – Mineral Resources
Dapingzhang Mine – Mineral Resources Mineral Resource Statement as at September 2007 Dawaz Measured Resource Copper Zinc Gold Silver Lead Tonnes Grade Grade Grade Grade Grade (Mt) (%Cu) (%Zn) (Au g/t) (Ag g/t) (%Pb) Massive 0.98 0.47 4.18 0.12 30.02 0.55 Disseminated 0 0 0 0 0 0 Total Massive & 0.98
Slide 29: Conclusion
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Slide 30: Attractive Investment Opportunity – Why?
Attractive Investment Opportunity – Why? China Growth Opportunity • Significant demand for thermal coal by IPPs in China • Proven ability to source, acquire and develop assets • On-the-ground management team World Class Projects • Potential for significant coal resources >9Bt and production growth >
Slide 31: Comparable Coal Company Analysis
Comparable Coal Company Analysis Market Capitalization US$MM 107,000 102,031 18,000 26,915 16,000 13,431 14,000 12,000 10,000 8,328 8,000 6,000 4,000 2,837 2,427 2,000 562 0 (1) Shenhua Energy China Coal Bumi Resources Yanzhou Coal Hidili Straits Asia RPG Sources: FactSet, company filings Resources
Slide 32: Comparable Coal Company Analysis
Comparable Coal Company Analysis EV/Reserve EV/Production Reserve 31-Jan-08 Mkt cap EV/EBITDA (x) PE (x) Production (US$/) (US$/t) (mt) Source: UBS estimates * Bloomberg consensus (US$ m) 2007E 2008E 2009E 2007E 2008E 2009E 2007E 2007E 2008E China Shenhua 102,031 17.9 12.8 10.5 34.1 25.2 21.2 15.6 5
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