Sunstone Metals Ltd · ASX:STM
Sunstone Metals — Avalon Minerals — Shareholder Meeting (October 2014)
32 slides from Sunstone Metals's shareholder meeting presentation, October 2014
Slide 1: Avalon Minerals AGM 2014 Presentation
AVALON MINERALS Ltd. A pre-production copper–magnetite opportunity with growth upside AGM 2014 Presentation October 2014
Slide 2: Disclaimer
Avalon Minerals – Disclaimer Forward-looking Statements This Presentation includes certain statements that may be deemed “forward-looking statements”. All statements in this Presentation, other than statements of historical facts, that address future activities and events or developments that Avalon
Slide 3: At a Glance
Avalon Minerals – At a Glance • ASX quoted resource company with a focus on the Ticker ASX:AVI 100% owned Viscaria copper-magnetite project in Sweden Share Price (30 day VWAP)* $0.005 • Viscaria has a completed Scoping Study, underpinned Shares on Issue 1,437,354,886 by a robust resource estimate Ma
Slide 4: Coverage
Avalon Minerals – Coverage Breakaway Research – • September 2014 • ‘Overlooked Northern Star’ – Speculative BUY • “Modelling indicates potential to produce up to $US110m free cash flow per year” • “Risked base case valuation of $0.068/share” Morgans Research – • July 2014 – site visit report • “What
Slide 5: Shareholder Support
Avalon Minerals – Shareholder Support • Strong shareholder support • Top 5 shareholders hold 50% of shares on issue • Top 3 shareholders have taken strategic stakes of >8% • Introduction of new shareholders with the recent placement to raise A$1.95 million NAME HOLDING % Tan Sri Abu Sahid Bin Mohame
Slide 6: Corporate Re-positioning
Avalon Minerals – Corporate Re-positioning New Board and Management Chairman Appointed November 2013. Mr. Ascough is a senior resources executive with more than 23 years of industry experience evaluating mineral Graham Ascough projects and resources in Australia and overseas. He is currently non-e
Slide 7: Viscaria Project – At a Glance
Viscaria Project – At a Glance Is ROBUST: Viscaria copper-magnetite project is a robust development scenario based on a 2014 updated Scoping Study PFS activities have commenced and the PFS is due for completion in Q3, 2015 Metallurgy delivers premium quality products of Cu con (~26%) and Fe
Slide 8: Location
Viscaria Project – Location Viscaria Cu-Fe Project Fe Mine and processing Cu Smelter Cu Refinery Cu Mine 8
Slide 9: Infrastructure
Avalon Minerals – Infrastructure Town (Kiruna, pop. 20,000; skilled workforce) Road Access Rail (Public Access) Power (Low Cost; ~8c/kWh) Contractors >100 year mining heritage 9
Slide 10: Resource Summary
Viscaria Project – Resource Summary OVERALL RESOURCE 680,000 t, or 1.5 Billion lbs Copper 9.1 Million t Recoverable iron Cu Fe Copper Resource Iron Resource 63.86Mt @ 35.3Mt @ 37% Measured 6% Measured 1.05% 29.8% 23% Indicated 39% Indicated 40% Inferred 58% Inferred SCOPING STUDY OPEN PIT RESOURCE*
Slide 11: Scoping Study Cautionary Statement
Viscaria Project – Scoping Study Cautionary Statement The Scoping Study referred to in this presentation is based on lower-level technical and economic assessments and is insufficient to support estimation of Ore Reserves, or to provide assurance of an economic development case at this stage, or to
Slide 12: August 2014 Scoping Study
Viscaria Project – August 2014 Scoping Study US$199 M 3.5Mtpa CAPEX plant (start up) >10 year 69% Fe mine life magnetite con Open pit only 1Mtpa PRODUCTION TARGET Infrastructure magnetite con 33.7Mt @ 0.61% Cu, in place 22% Fe Underground ~25% Cu con upside 18,000tpa Cu Belt scale in con exploration
Slide 13: August 2014 Scoping Study
Viscaria Project – August 2014 Scoping Study US$45 - 248 mill US$0.44 – US$1.36 Range of potential pre-tax NPV at US$3.00/lb Cu and Forecast C1 cash cost net of magnetite credits for US$60 - 100/t 69% Fe magnetite concentrate price open pit mining scenario; assumes $120 - $80/t magnetite concentrate
Slide 14: August 2014 Scoping Study - Sensitivity
Viscaria Project – August 2014 Scoping Study - Sensitivity NPV Sensitivity to assumed Magnetite Price (US $/t 69% Fe concentrate) commodity prices Cu Price (US $/lb) 60 80 100 (NPV10%REAL, Pre Tax) 2.75 -$3 $98 $200 3 $ 45 $147 $248 3.25 $ 94 $195 $297 3.5 $143 $244 $345 Capex Disount Rate NPV sensi
Slide 15: D Zone long section
Viscaria Project – D Zone long section 15
Slide 16: A Zone long section
Viscaria Project – A Zone long section Previously mined by Outokumpu – 15 years of production to 1997 – 12.5Mt of 2.3% Cu at 850,000tpa, producing a concentrate of 26% Cu, 2% Zn & 0.5g/t Au (43Mlb (19.5k t) pa Cu metal in concentrate) Pre-mined endowment of A Zone only is estimated to have been ~40-
Slide 17: Metallurgy
Viscaria Project – Metallurgy • High quality products • Independent review completed • D Zone copper sulphide mineralisation produces a concentrate with 26% copper and 94% copper recovery; • High quality, magnetite concentrate with 70% Iron produced with low impurity* levels from D Zone; • A Zone an
Slide 18: Metallurgy
Viscaria Project – Metallurgy Low technical risk – standard Cu flotation to produce Cu concentrate, followed by magnetic separation to produce magnetite concentrate 18
Slide 19: Growth Options
Viscaria Project – Growth Options Assessment of value of gold content at Discovery Zone – 55,000 ounces in mineral resource* Oxide copper potential – initial metallurgical testing indicates the oxide material is amenable to acid leaching, further testing planned, oxide resource at D Zone is open
Slide 20: Down plunge potential
Viscaria Project – Down plunge potential No drilling exists below these intercepts – No drilling exists below these intercepts – clear potential for resource growth clear potential for resource growth No drilling exists below these Underground Potential intercepts – clear potential for Contemplate
Slide 21: Belt Scale Exploration Upside
Viscaria Project – Belt Scale Exploration Upside Kurravaara Kurravaara Historic workings exploited vein/disseminated copper-gold mineralization concentrated in a regional scale fold hinge Rock chips from this area contained up to 1g/t Au and 0.9% Cu West Nukutus Excellent magnetic anomaly of s
Slide 22: Peer Group Comparison
Viscaria Project – Peer Group Comparison LOW Capital Intensity, forecast at 11,000 $/t Viscaria LOW Cost/lb copper production, <$1.36/lb, low forecast net of magnetite credits × LOW Valuation - EV/Resource lb of Copper, very low at <1c/lb Share Price EV/lb Cu in Capital Company Code (A$) shares
Slide 23: Stakeholder Management
Viscaria Project – Stakeholder Management • Proposed development areas are in windows surrounded by multiple land use areas • The key issues are (1) a strong mining heritage, (2) reindeer herding, (3) Natura 2000, and (4) recreation 23
Slide 24: Planning to Deliver
Avalon Minerals – Planning to Deliver 2014 2015 2016 2017 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Stakeholder Engagement Stakeholder plans, forums, reviews Studies & Exploration Drilling; PFS and Exploration Studies; Engineering, Environmental, Logistics Pre-Feasibility Study PFS Feasibility St
Slide 25: Value Growth Drivers
Avalon Minerals – Value Growth Drivers CURRENT NEAR TERM (within 12 months) LONGER TERM (>12 months) Improve capital structure and funding De-risk project through PFS implementation Secure EA and mining permit position approval Advance selected PFS studies (logistics, Complete PFS drilling program S
Slide 26: Resource Estimate Summary
Avalon Minerals – Resource Estimate Summary Currently Defined Mineral Resource for Copper reported on the Viscaria Project above a 0.4% Cu cut-off. Resource Name Classification Tonnes (t) Cu Grade (%) Cu Metal (t) A Zone Measured 14,439,000 1.7 240,000 Indicated 4,690,000 1.2 57,200 Inferred 2,480,0
Slide 27: Resource Estimate Summary
Avalon Minerals – Resource Estimate Summary Currently Defined Mineral Resource for Iron reported on the Viscaria Project above a 15% Mass Recovery cut-off Resource Name Classification Tonnes (Million Fe Grade (%) Mass Recovery Estimated recoverable Tonnes) (%) iron (Million Tonnes) D Zone Measured 2
Slide 28: Resource Estimate Summary - Notes
Avalon Minerals – Resource Estimate Summary - Notes • The A, B D and Discovery Zone Mineral Resources were prepared and first disclosed under the JORC Code 2004. They have been updated since to comply with the JORC Code (2012). • All Copper Mineral Resource estimates are reported above a block cut-o
Slide 29: Competent Persons Statement
Competent Persons Statement Competent Persons Statement The information in this report that relates to mining project evaluations is based upon information compiled by, or under the supervision of Manish Garg B.Eng. (Hons.), Master of Applied Finance, MAusIMM, MAICD; Tim Horsley B.Sc. (Hons) (Mining
Slide 30: Relevant ASX Announcements
Avalon Minerals – Relevant ASX Announcements Date ASX announcement 26th June 2013 D Zone Drill Program Doubles Mineral Resource to 30Mt 9th July 2013 Project NPV now US$373M 9th April 2014 Significant Upgrade to Discovery Zone Mineral Resource 22nd May 2014 Confidence Upgrade to D Zone Mineral Resou
Slide 31: Perfectly located significant copper-iron resource
Avalon Minerals – Perfectly located significant copper-iron resource Discovery Zone A Zone B Zone 680,000 t, or 1.5 Billion lbs Copper D Zone 9.1 Million t Recoverable iron 31
Slide 32: 3D Representation of the A Zone, B Zone, D Zone and Discovery Zone
Avalon Minerals – 3D Representation of the A Zone, B Old plant Old tailings Zone, D Zone and Discovery Zone site facility Optimised Pit Shell 32