Slide 1: Presentation to Fund Managers and Institutional Investors
Thursday, 3 July 2008 MARKET ANNOUNCEMENT For personal use only Presentation to Fund Managers and Institutional Investors The Company is pleased to enclose a copy of a presentation to a number of fund managers and institutional investors in Hong Kong, London and New York. For further information: Jo
Slide 2: Developing a World Class Iron Ore Project
For personal use only DEVELOPING A WORLD CLASS IRON ORE PROJECT Strike Resource Limited – July 2008
Slide 3: Executive Summary
TITLE OF THE PRESENTATION 2 For personal use only EXECUTIVE SUMMARY z The global market for iron ore is Strike has secured rights to a potential forecast to remain strong. world class 1.2 billion tonne high grade (62%+Fe) iron ore resource in Peru. z Strike is targeting up to 20 million tonnes per y
Slide 4: Earning a 68% interest in two world class iron ore deposits in Peru
TITLE OF THE PRESENTATION 3 For personal use only Strike is earning a 68% interest in two world class iron ore deposits located in Peru South America 3
Slide 5: Peru is a World Class Mineral Belt
TITLE OF THE PRESENTATION 4 For personal use only PERU IS A WORLD CLASS MINERAL BELT z Peru has 12% to 16 % of the world’s known resources of silver, gold, zinc, copper and lead z Peru is among the top five producers in the world of silver, zinc, gold, copper and lead z Xstrata, Newmont, BHP, Shouga
Slide 6: Historical Reports Estimate 1.2 Billion Tonnes of High Grade Iron Ore
TITLE OF THE PRESENTATION 5 For personal use only HISTORICAL REPORTS ESTIMATE 1.2 BILLION TONNES OF HIGH GRADE IRON ORE ACROSS TWO DEPOSITS z Large untapped deposits of high grade iron ore are rare. z Resource grade is a critical factor in mine profitability. z Resource estimates from surface mappin
Slide 7: Strike's Resource Potential is Significant by World Standards
TITLE OF THE PRESENTATION 6 For personal use only STRIKE’S RESOURCE POTENTIAL IS SIGNIFICANT BY WORLD STANDARDS Deposit Size Grade Fe% Company Carajas (Brazil) ~4,300Mt 65% CVRD Sishen (S Africa) ~2,500Mt 58% Kumbha Minas-Rio (Brazil) ~850Mt – 2,000Mt 40% MMX/Anglo Yandicoogina (Aus - Pilbara) ~1,20
Slide 8: Highly Experienced Board
TITLE OF THE PRESENTATION 7 For personal use only HIGHLY EXPERIENCED BOARD John Stephenson – Chairman Exploration Director Rio Tinto Australasia. 35+ years managing exploration. Shanker Madan (Managing Director) BHP, Rio Tinto, Hamersley Iron. 30+ years iron ore experience. Farooq Khan 20+ years cap
Slide 9: Strike's Production Growth
TITLE OF THE PRESENTATION 8 For personal use only STRIKE’S PRODUCTION GROWTH Strike proposes a three phase project development plan ¾ Stage 1 2 Mt pa of High Grade Lump production by 2009 ¾ Stage 2 20 Mt pa High Grade sinter/concentrate production by 2011 ¾ Stage 3 Expansion to 40 Mt pa of High Grad
Slide 10: Stage 1 Production Plan (2009)
TITLE OF THE PRESENTATION 9 For personal use only STAGE 1 PRODUCTION PLAN (2009) 2 MT PA FROM SURFACE OUTCROPS AND SCREE AT CUZCO ¾ Estimated Capex US$25million ¾ Resource delineation has commenced. Lump ore is mainly hematite (+60% Fe) ¾ Conventional surface mining to a depth of 10m ¾ Road transpor
Slide 11: Stage 2 Production (2011)
STAGE 2 PRODUCTION (2011) TITLE OF THE PRESENTATION 10 For personal use only 20 MT PA FROM APURIMAC ¾ Mined ore will be crushed, mixed with water and fed into a ~360km slurry pipeline ¾ On reaching the coast, the ore will be de-watered ¾ Product grades of 68.02% Fe to 68.28% Fe with average weight r
Slide 12: Apurimac Deposits
TITLE OF THE PRESENTATION 11 For personal use only APURIMAC DEPOSITS Apurimac deposits are located near a regional airport servicing the major town of Andahuaylas (15km away, population 250,000) 11
Slide 13: Stage 3 Production (2015)
TITLE OF THE PRESENTATION 12 For personal use only STAGE 3 PRODUCTION (2015) POTENTIAL EXPANSION TO 40 MT PA ADDING 20MT PA FROM CUZCO ¾ Drilling to delineate resource to support a further 20Mtpa ¾ Separate mine development at Cuzco ¾ Second pipeline to join into the Apurimac pipeline corridor ¾ Uti
Slide 14: Project Timetable
TITLE OF THE PRESENTATION 13 For personal use only STAGE 2 PROJECT TIMETABLE Pre-feasibility (Due to be released to market in July 2008) Feasibility Stage 2 Production 22Mt pa Design Stage 2 (Jan 2011) Construction 2007 2008 2009 2010 2011 Drilling 65,000m 13
Slide 15: Pre-Feasibility Program – Individual Studies
TITLE OF THE PRESENTATION 14 For personal use only 20 MTPA PRE-FEASIBILITY PROGRAM – INDIVIDUAL STUDIES COMPLETION JULY 2008 Ore Body Process Slurry Mine Plan Plant Design Pipeline Modelling Environment Water and Port and Marketing Power Stockpile 14
Slide 16: Schematic Flow Sheet
TITLE OF THE PRESENTATION 15 For personal use only SCHEMATIC FLOW SHEET 15
Slide 17: Preliminary Estimated Operating Costs
TITLE OF THE PRESENTATION 16 For personal use only PRELIMINARY ESTIMATED OPERATING COSTS 2Mt pa 20Mt pa 40Mt pa US$/tonne US$/tonne US$/tonne Mining & Processing 5 8 8 Transport 30 3 4 Port 5 2 2 Infrastructure 1 1 1 Admin & O/heads 1 1 1 Total 42 15 16 Prefeasibilty Studies underway to provide grea
Slide 18: Large Bodies of Water Nearby Support Transport by Slurry Pipeline
TITLE OF THE PRESENTATION 17 For personal use only LARGE BODIES OF WATER LOCATED NEARBY SUPPORT TRANSPORT BY SLURRY PIPELINE 17
Slide 19: Benefits of a Slurry Pipeline
TITLE OF THE PRESENTATION 18 For personal use only BENEFITS OF A SLURRY PIPELINE z Relatively low capital expenditure and operating cost. z The route allows for a mostly flat to gentle downhill gradient, allowing gravity to do most of the work thereby minimising the need for extensive pumping. z Wat
Slide 20: Proposed Pipeline Routes
TITLE OF THE PRESENTATION 19 For personal use only PROPOSED PIPELINE ROUTES Deposit Deposit 11 -- Apurimac Apurimac Deposit Deposit 22 -- Cuzco Cuzco 19
Slide 21: Proposed Pipeline Route
TITLE OF THE PRESENTATION 20 PROPOSED For personal use only PIPELINE ROUTE The favourable topography crosses the Peruvian alto- plano before descending to the coastal plain 20
Slide 22: Proven Technology
TITLE OF THE PRESENTATION 21 For personal use only PROVEN TECHNOLOGY z PSI have selected a preferred pipeline route to transport iron ore from the mine to coast over a distance of 363km z Only 2 pumping stations will be required z The pipeline will be buried z The route does not pass through any sen
Slide 23: Operating Conditions
TITLE OF THE PRESENTATION 22 For personal use only OPERATING CONDITIONS CLIMATE ¾ Apurimac 3500m ASL; Cuzco ~4000m ASL ¾ Similar elevations to many large mines in Peru ¾ Weather conditions benign LABOUR ¾ Apurimac Project 15km from Andahuaylas with 250,000 population ¾ Cuzco Project 80km from Cuzco:
Slide 24: Strike's Iron Ore Advantage
TITLE OF THE PRESENTATION 23 For personal use only STRIKE’S IRON ORE ADVANTAGE ¾ Superior grades compared to lower grade ores from Australia ¾ For every low grade tonne Australia exports, more South American high grade tonnes are likely to be required to balance the steel mills feed ¾ Expected opera
Slide 25: Initial Metallurgical Test Work
TITLE OF THE PRESENTATION 24 For personal use only INITIAL METALLURGICAL TEST WORK Test work on reverse circulation chip samples from Opaban I returns product grades at coarse crushing with particle sizes of 80% passing 125 and 250 microns as follows. Fe 68.02 % to 68.28% Al2O3 0.30% to 0.35% SiO2 1
Slide 26: Exploration Drilling 2008 – Resource Definition
TITLE OF THE PRESENTATION 25 For personal use only EXPLORATION DRILLING 2008 – RESOURCE DEFINITION ¾ 60,000 m drilling at Apurimac ¾ 5,000m drilling at Cuzco ¾ Prefeasibility studies (Due for completion July 2008) ¾ Budgeted expenditure 2007/2008 : US $7 million 25
Slide 27: Strike is Targeting an Iron Ore Province
TITLE OF THE PRESENTATION 26 For personal use only STRIKE IS TARGETING AN IRON ORE PROVINCE Strikes methodology is province rather than deposit focused ¾ The Company believes that the Apurimac and Cuzco deposits are not isolated instances of large iron ore deposits and that there exists the potentia
Slide 28: Apurimac Concessions
TITLE OF THE PRESENTATION 27 For personal use only APURIMAC CONCESSIONS Apurimac concessions outlining high grade surface outcrops 27
Slide 29: 172Mt @ 62.28% Fe JORC Inferred Resource in Apurimac
TITLE OF THE PRESENTATION 28 For personal use only 172Mt @ 62.28% Fe JORC Inferred Resource–and growing-in APURIMAC Opaban I and Opaban III : First 2 of 37 concessions drilled ¾ Detailed gravity and magnetic surveys followed by 31 diamond core holes and 45 RC holes have been drilled to date ¾ A reso
Slide 30: Cuzco Resource Estimate: 500-650Mt
TITLE OF THE PRESENTATION 29 For personal use only CUZCO RESOURCE ESTIMATE : 500-650MT ¾ Flat tabular radial iron ore deposits within a 4km diameter area around an intrusive core ¾ Work done to date ¾ Geophysical surveys ¾ Rock chip sampling of outcropping mineralisation ¾ 66 DDH holes drilled total
Slide 31: Cuzco: Drilling Update
TITLE OF THE PRESENTATION 30 For personal use only CUZCO : DRILLING UPDATE ¾ Based on 66 drill holes, mapping and detailed ground magnetic surveys the following have been outlined thus far: ¾ Outcrop areas are hematite, generally high grade (+60% Fe) with low levels of impurities. Drilling to date h
Slide 32: Flat Lying Iron Ore Deposits
TITLE OF THE PRESENTATION 31 For personal use only FLAT LYING IRON ORE DEPOSITS Cross sections drawn of geophysical modelling indicate iron ore deposits are likely to be horizontal or gently dipping commencing at or near the surface with potentially low waste to ore ratio for mining operations. 31
Slide 33: Australian Iron Ore Comparison
AUSTRALIAN IRON ORE COMPARISON TITLE OF THE PRESENTATION 32 For personal use only EV/Resource Tonne (Based on +55% Fe JORC-Compliant Resources) The (EV/ Resource t) number for Strike become even smaller with the planned JORC compliant Resource upgrades due shortly Source: Patersons Securities Limite
Slide 34: Current Project Structure
TITLE OF THE PRESENTATION 33 For personal use only CURRENT PROJECT STRUCTURE Apurimac Ferrum Shareholding Structure following: a) $US$6.5 million invested by Strike into AF; and b) Exercise by Strike of Options under the AF Agreement. Strike Resources Ltd 70% D&C Group 51.0% Iron Associates 30% MAPS
Slide 35: Dispute with D & C Group
TITLE OF THE PRESENTATION 34 For personal use only DISPUTE WITH D & C GROUP ¾ Company has received informal notification from D & C Group that it objects to I.A.C. transaction ¾ Incomplete Judicial Precautionary Measure (JPM) instituted by D & C Group (JPM akin to an interim injunction) ¾ D & C Grou
Slide 36: Other Projects – Paulsen's East
TITLE OF THE PRESENTATION 35 For personal use only OTHER PROJECTS Paulsen’s East (75%) ¾ High grade hematite deposit in the Pilbara, WA ¾ Average iron grade 64.7% Fe from rock chip samples ¾ Drilling underway to support a 1mt pa DSO lump and fine operation ¾ Production proposed to start in 2009 ¾ Co
Slide 37: Other Projects – Beau Coal
TITLE OF THE PRESENTATION 36 For personal use only OTHER PROJECTS Beau Coal (30%) ¾ Thermal coal project in Indonesia ¾ SRK has free carried 30% interest to BFS ¾ JORC resource awaited after completion of drilling currently underway ¾ Production of ~1 tm pa proposed to start in 2009 ¾ Early cash flo
Slide 38: Capital Structure
TITLE OF THE PRESENTATION 37 For personal use only CAPITAL STRUCTURE ASX Code: SRK SOrdinary fully paid shares: 102.4 million Unlisted Options: 17.4 million Fully Diluted Issued Capital 119.8 million Market Capitalization (Fully Diluted): ~A$270 million (at $2.25/share) Cash : A$19 million 52 week r
Slide 39: Unlisted Options
TITLE OF THE PRESENTATION 38 For personal use only UNLISTED OPTIONS STotal Unlisted Options: 17.4 million $0.178 (9 February 2011) Unlisted Options 1,833,333 $0.278 (9 February 2011) Unlisted Options 1,666,667 $0.938 (21 July 2011) Directors’ Options 4,600,000 $0.938 (13 September 2011) Unlisted Dir
Slide 40: Disclaimer
TITLE OF THE PRESENTATION 39 For personal use only DISCLAIMER 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 Resource
Slide 41: Strike Resources Limited
TITLE OF THE PRESENTATION 40 For personal use only Strike Resources Limited A.B.N 94 088 488 724 Level 14 The Forrest Centre 221 St Georges Terrace Perth, Western Australia 6000 Telephone +61 8 9214 9700 Facsimile +61 8 9322 1515 Email: info@strikeresources.com.au Web: www.strikeresources.com.au 40