Lachlan Star Limited · ASX:LSA
Lachlan Star — Shareholder Meeting (November 2010)
29 slides from Lachlan Star's shareholder meeting presentation, Nov 30, 2010
Slide 1: Unhedged Gold Producer
For personal use only Unhedged Gold Producer Nov 2010 ASX – LSA www.lachlanstar.com.au
Slide 2: Disclaimer
For personal use only This Document is not a Prospectus nor an Offer to Subscribe for Shares. Lachlan Star and its subsidiaries (“LSA”) makes no representation or warranty (express or implied) as to the accuracy , reliability or completeness of this document. LSA and its respective directors, employ
Slide 3: Acquiring Compañía Minera Dayton (CMD) gold mine in Chile
For personal use only • Acquiring operating Compañía Minera Dayton (CMD) heap leach gold mine in Chile • CMD has produced 830,000 ounces of gold over 15 years • Located immediately adjacent to Teck’s large Andacollo copper gold mine (80,000 tpa Cu and 60,000 ozpa Au) • Exploration target1 range of 1
Slide 4: Acquisition consideration
For personal use only • Cash deposit in escrow US$1.5 m • Cash payment to vendors on closing US$7.5 m • Shares to vendors on closing US$9.8 m (A$10 m) • Total Consideration at Closing US$18.8 m • Deferred consideration of: • 2.5% of gold produced to Dec 2014 • 25% of gold produced >119koz to Dec 201
Slide 5: Funding the transaction
For personal use only • Cash on hand A$3.4 m • Rights Issue @ 1c A$5.4m • Placement A$5.5 to $6m • Vendor Shares @ 1 c A$10 m • Vendor shares subject to voluntary escrow for 6 months • Small debt or convertible note to be considered for working capital and exploration in early 2011 • Major sharehold
Slide 6: Pro forma securities on issue
For personal use only Security On Issue Securities to Pro Forma Total be Issued Shares 1,079,867,371 1,079,867,371 Rights Issue 539,933,686 539,933,686 Placement 550,000,000 550,000,000 Vendors 1,000,000,000 1,000,000,000 Total 1,079,867,371 2,089,933,686 3,169,801,057 Options: 2c Strike 22,500,000
Slide 7: Transformational transaction
For personal use only • The transaction will transform Lachlan Star into a company with: • a 100% interest in a major gold resource in a politically stable country • existing unhedged production of circa 40,000 to 50,000 ounces of gold per annum • an under explored tenement position that has been sh
Slide 8: Established mine in highly prospective location
For personal use only • Established mine with long history in highly prospective location • 8Mtpa crushing, stacking and elution plant currently operating at 1/3 capacity • 100tpd ball mill and CIL circuit • Circa 30,000 oz of gold in inventory on leach pads • Copper recovery circuit • Water rights
Slide 9: CMD Location
CMD Location -T2E La Serena Coquimbo + seeasaa (POD UI Compania LL Andacollo | § A~_ (ice ae ; he \ ? Ovalle . s ( CHILE 7 Santiago a d “0 y 2000km ee maeci fic Ocean Highway | Major Road | Railway San Filipe » Drainage o Vita del Mar, 4+ Quilpué—7 Los Andes ) Valparaiso LJ O> \ns LACHLAN STAR 4
Slide 10: CMD Location
CMD Location Las Loas ~ i Pitt Pit 3S ‘ North \ ‘ ~ > 4 % ; = Fy eh Compania Minera Dayton Toro iP LACHLAN sf % STAR My
Slide 11: Adjacent to Teck Andacollo mine
For personal use only • Located immediately adjacent to Teck Andacollo mine (100m from Tres Perlas deposit) • Teck deposit hosts resources of 535 Mt grading 0.37 % Cu and 0.12 g/t Au • Limited copper exploration on CMD tenements
Slide 12: CMD Operation
CMD Operation LACHLAN 3° STAR >
Slide 13: CMD Operation — Las Loas Pit
CMD Operation — Los Loas Pit LACHLAN 32 °% uss
Slide 14: CMD Operation — Leach pad
CMD Operation —Leach pad LACHLAN SX STAR SpA
Slide 15: Exploration target by project
For personal use only Potential Quantity Potential Grade (g/t Au) (Mt) Project lower upper lower upper Las Loas 8.2 10.9 1.06 1.10 Churrumata 12.1 16.2 0.75 0.76 Tres Perlas 13.5 22.1 0.53 0.54 Chisperos 5.8 7.1 0.55 0.57 Toro 13.3 21.2 0.53 0.55 Socorro 0.5 2.3 0.65 0.80 Totals 53.3 79.8 0.65 0.68
Slide 16: Gold production by year
For personal use only Compania Minera Dayton Gold production by year (ozs) 140,000 120,000 100,000 80,000 60,000 40,000 20,000 0 • Past production peaked at 135,000 oz –goal is to return operation to >100,000ozpa producer within 2 to 3 years
Slide 17: CMD Geology
CMD Geology Socorro Churrumata Teck Operations Chisperos cee LACHLAN SX STAR SpA
Slide 18: Mineralisation open at depth and along strike
For personal use only • Mineralisation open at depth and along strike • Typically only limited by drilling
Slide 19: Mineralisation envelope expands at lower cut-off grades
For personal use only • As cut off grades reduced, mineralisation envelope expands rapidly • Potential for bulk tonnage resources
Slide 20: Higher grade zones at depth
For personal use only • Higher grade zones present at depth which may support underground mines •Drilling at depth very limited
Slide 21: Underground mine development potential
For personal use only • Limited historical work indicates the potential for underground mine development • UG Scoping study at Churrumata Norte completed in 2007 indicated potential for a small underground mine •New study and drilling required to confirm the mineralisation and mine plan
Slide 22: Significant exploration potential
For personal use only • Significant exploration potential –limited exploration in the past 7 years • Limited exploration at depth for high grade veins • Potential for dealing into adjacent tenements to secure additional reserves – only gold plant in the area
Slide 23: 2010 drill program results
For personal use only Drill Hole Deposit From (m) To (m) Interval (m) Gold Grade (g/t) REC-TR07 Toro 5 15 10 2.28 REC-TR10 Toro 95 103 8 10.5 REC-CHIS09 Chisperos 113 128 15 4.07 REC-CHU05 Churrumata 3 11 8 1.19 55 97 42 0.63 2908 Churrumata 1 8 7 7.31 38 74 36 1.96 2957 Churrumata 90 102 12 3.37 •
Slide 24: Other assets: Luiri Gold and Bushranger
For personal use only • Luiri Gold – • 31,092,500 million shares and CDI’s (28%) valued at circa $6 million • Holds gold projects in Zambia (800,000 oz in resources), currently the subject of a tenement dispute with the Zambian government • Large exploration tenements prospective for gold, base meta
Slide 25: Board and management
For personal use only Mick McMullen Chairman Geologist with 17 years experience in identifying, financing, developing, and mining operations in Africa, Australia, Europe, Asia and South America. Has been an executive director of publicly listed mining companies for over 13 years and been responsible
Slide 26: Management team
For personal use only Bob Anderson Group Company Perth based accountant with over 20 years experience in Secretary and CFO financial management of Australian companies. Gaston di Parodi General Manager CMD Chemical Engineer, with 30 years experience in start-up and operation of gold leaching facilit
Slide 27: 2011 milestones
For personal use only • Q1 2011 • 2010 drill results • JORC resources and reserves • Q2 2011 • Underground mine development • Incremental expansion to CIL circuit • Q3 2011 • Development plan to increase production to circa 100,000 ozpa • Q4 2011 • Dual listing on TSX
Slide 28: Competent Person statement and exploration target notes
For personal use only • The information in this report that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Mr Michael McMullen, who is a Member of The Australasian Institute of Mining and Metallurgy. Mr McMullen is employed by McMullen Geologica
Slide 29: Unhedged gold production
Unhedged gold production Exploring in a world class environment For personal use only Z Xb LACHLAN 2} é STAR ye