Mgx Resources Limited · ASX:MGX
Mgx Resources — Mount Gibson Iron — Investor Presentation (May 2014)
37 slides from Mgx Resources's investor presentation, May 8, 2014
Slide 1: May Investor Presentation
May Investor Presentation For personal use only MGX 8 May 2014
Slide 2: Disclaimer
Disclaimer This Document is Confidential and may not be reproduced, redistributed or passed on, directly or indirectly, to any other person, or published, For personal use only in whole or in part, for any purpose without prior written approval from Mount Gibson Iron Limited. This Document is not a
Slide 3: MGX at a glance
MGX at a glance For personal use only Member S&P/ASX-200 Record ore sales/revenue to 31 March 2014 Market cap ~$800 million 7.1Mt ore, $696.5m *@ $0.73/share , 6/5/2014. 1,090.6m shares on issue Dividends paid since Sept 2011 Ten year history of production $130m fully franked 50Mt ore sold April 201
Slide 4: MGX March quarter summary
MGX March quarter summary For personal use only • Group ore sales 2.0 Mt • Koolan Island sales 495kt • Tallering Peak sales 820kt • Extension Hill sales 709kt • Sales revenue $187m Sep-2013 Dec-2013 Mar-2014 YTD Unit Quarter Quarter Quarter FY 2013/14 Standard DSO product sales* kwmt 2,148 2,046 1,3
Slide 5: Business overview
Business overview For personal use only Koolan Island • Premium DSO lump and fines • Ramping up to 4 Mtpa run rate by end 2014 • Long life asset with extension potential • Simple logistics, remaining LOM strip ratio ~4.5:1 Mid West Region Tallering Peak, Extension Hill, Shine & Geraldton Port facili
Slide 6: MGX - high quality ore
MGX - high quality ore • High grade For personal use only − average Group Ore Reserves grade 62.1% Fe* • Low contaminants − Low Alumina - average 1.16% (Group Ore Reserves)* − Low Phosphorous – average 0.03% (Group Ore Reserves)* Western Australian Iron Ore Projects - Iron Grade and Phosphorous Cont
Slide 7: Maximising value – a simple strategy
Maximising value – a simple strategy For personal use only • Cost reduction and elimination of waste Leverage off • Operational optimisation and business improvement • Extension of production profile: existing asset – Optimise resources and reserves inventory – Brownfields exploration base to extrac
Slide 8: Focused on adding to the sales profile
Focused on adding to the sales profile For personal use only Ore sales history and current indicative outlook* 10 Actual Forecast 8 First priority goal 6 Ore Sales (Mwmt) 4 2 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Year to 30 June Shine Extension H
Slide 9: Mid West Operations
For personal use only Mid West Operations 9
Slide 10: Mid West – established infrastructure and potential to grow resources
Mid West – established infrastructure and potential to grow resources For personal use only 10
Slide 11: Geraldton Port – a competitive advantage
Geraldton Port – a competitive advantage For personal use only Ship Loader Rail Unloader MGX Berth 5 MGX Shed Berth 4 Shed 11
Slide 12: Extension Hill – a low cost growth platform
Extension Hill – a low cost growth platform For personal use only • Established road, rail and port solutions • ~0.6:1 remaining LOM strip ratio • +3 years life at 3Mtpa − Hematite Mineral Resource of 14.8 Mt @ 57.9% Fe* − Ore Reserves of 12.8Mt @ 58.3% Fe* • High potential near-mine exploration tar
Slide 13: Tallering Peak – an example of value-add
Tallering Peak – an example of value-add • For personal use only ~1 Mt ore sales remaining prior to closure • +23 Mt produced over 10 year life • LG stockpile sales generating strong cash margins at current prices • T6 optimisation, LG sales and rapid T1 development demonstrate MGX value-add capabil
Slide 14: Mid West Opportunities
Mid West Opportunities For personal use only 14
Slide 15: Mid West – established infrastructure and potential to grow resources
Mid West – established infrastructure and potential to grow resources For personal use only • Established infrastructure footprint gives MGX a competitive edge • Extension Hill region shaping as a potential resources hub • Shine Hematite Project – targeting mining by end CY2014 • Positive results fr
Slide 16: Extension Hill South – high potential target
Extension Hill South – high potential target • For personal use only Multiple known hematite targets located 1-3km from crusher • Iron Hill Prospect Exploration Target of 5-7 Mt @ 58-61% Fe.* N • Significant intercepts in 15 of 16 holes targeting primary Iron Hill hematite, including: • 22m @ 63.8%
Slide 17: Extension Hill South – high potential target
Extension Hill South – high potential target For personal use only Iron Hill Prospect Planned Diamond Drilling 17
Slide 18: Shine – a quality near-term opportunity
Shine – a quality near-term opportunity For personal use only • Purchase completed 7 March 2014* • Hematite Mineral Resource of 7.8 Mt @ 59.0% Fe* • Ore Reserves of 5.6Mt @ 59.3% Fe • Advanced approvals/permitting • Indicative ore production target of 1.6 Mtpa • Indicative $9-11m development cost (<
Slide 19: Shine – a quality near-term opportunity
Shine – a quality near-term opportunity For personal use only Refer ASX release 7 March 2014 for details of the Shine Hematite Project and Slide 37 for Resource and Reserve information. 19
Slide 20: Shine – a quality near-term opportunity
Shine – a quality near-term opportunity For personal use only • 76 hole infill RC drilling programme commenced April 2014 • 6 hole diamond drilling programme scheduled for late May • Diamond core to provide samples for metallurgical test work . 20
Slide 21: Plateau Prospect, Fields Find
Plateau Prospect, Fields Find For personal use only • Plateau located ~75km from Extension Hill • Unconventional setting - iron-enriched laterite over ultra-mafic basement • 228 hole RC programme completed November 2013* • 114 significant intersections +50% Fe*, including: • 18m @ 59.2% Fe, 16m @ 58
Slide 22: Koolan Island Operation
Koolan Island Operation For personal use only 1km N West End targets Main Pit 22
Slide 23: Koolan Island – a unique operation
Koolan Island – a unique operation For personal use only 1km N West End targets Main Pit 23
Slide 24: Koolan Island – Main Pit projection
Koolan Island – Main Pit projection For personal use only 24
Slide 25: Koolan Island – a unique operation
Koolan Island – a unique operation For personal use only • Long life asset: ~7 years − Ore Reserves 30 Mt @ 64% Fe* − Mineral Resources of 69 Mt @ 63% Fe* • High-quality ore, low contaminants − Ultra low phosphorous - 0.01% − Ultra low alumina – 0.76% • Simple logistics - dedicated shiploader and no
Slide 26: Koolan Island – Main Pit operations
Koolan Island – Main Pit operations For personal use only 1km West End Main Pit West April 2014 exploration targets N Flooding in Main Pit West February 2014 • Seasonal flooding limited March Qtr ore production • Normal ore production resumed March 2014 • Ramping up to ~4 Mtpa run rate by end CY2014
Slide 27: Koolan Island Operations
Koolan Island Operations For personal use only 1km West End exploration targets N Mining Operations Centre 27
Slide 28: Koolan Island – lifting productivity
Koolan Island – lifting productivity For personal use only Productivity Index Over Time 3.0 2.5 Index (base Jan 2012) 2.0 1.5 1.0 0.5 0.0 January March 2012 Index of tonnes mined (ore & waste) per work hour, base January 2012 2014 Productivity has risen significantly following mine optimisation work
Slide 29: Koolan Island – ongoing focus on cost reduction
Koolan Island – ongoing focus on cost reduction For personal use only Achieved Saving Key Items (A$) Workforce reduction from planned levels (approx 100 persons). $17m/year Reduction in hired mining and ancillary equipment. $20m/year Removal of +40 light vehicles. $2m/year Tendering of key supply co
Slide 30: Koolan Island – lowering unit costs
Koolan Island – lowering unit costs For personal use only Unit Cash Cost - Mining & Administration 25 (A$ per tonne of ore/waste mined) A$/tonne mined 20 15 2013/14 guidance A$8-10/tonne 10 5 0 Sep-12 Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Calendar Quarters Unit cash mining costs at low end of gu
Slide 31: Koolan Island – recapitalisation for strong future cashflow
Koolan Island – recapitalisation for strong future cashflow For personal use only Forecast Koolan Island waste stripping and iron ore sales profile 12 Actual Forecast 10 8 6 4 2 0 Year to 30 June 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Iron Ore Sales (Mwmt) Indicat
Slide 32: Koolan Island – West End targets
Koolan Island – West End targets For personal use only • PoW approved for 33 hole RC programme • Work planned to commence by end June 2014 • Drilling to test for extensions of hematite sandstone mineralisation from 2013 mapping West End • Reconfirm mineralisation exploration intercepted in 2011 dril
Slide 33: Koolan Island – significant potential beneath Main Pit
Koolan Island – significant potential beneath Main Pit For personal use only • Ore Reserves 30 Mt @ 64% Fe* • Mineral Resources of 68 Mt @ 63% Fe* • Deep drilling to define orebody continuity planned for late 2014 • Study underway to Resource under Main Pit* Area of Interest assess potential to deep
Slide 34: Summary
Summary • For personal use only An established mid-cap iron ore producer • On track to sell a record 9.5 million tonnes in FY2014 • Strong operating cashflows and balance sheet • Established transport infrastructure and long term customer contracts • Exploration upside and disciplined value-focused
Slide 35: Thank You
Thank You For personal use only MGX For more information: Phone: +618 9426 7500 Email: admin@mtgibsoniron.com.au Web: www.mtgibsoniron.com.au 35
Slide 36: Appendix – Reserves and Resources supplementary information
Appendix – Reserves Supplementary and Resources information For personal use only Mineral Resources and Ore Reserves at 30 June 2013 Total Group Mineral Resources and Ore Reserves at 30 June 2013 Koolan Island Total Group Mineral Resources and Ore Reserves at 30 June 2013 Tonnes Fe SiO2 Al2O3 P mill
Slide 37: Appendix – Reserves and Resources supplementary information
Appendix – Reserves Supplementary and Resources information Shine Hematite Mineral Resources For personal use only Resource Category Tonnes Fe SiO2 Al2O3 P LOI (Mt) % % % % % Measured 2.65 59.7 7.58 2.18 0.085 4.18 Indicated 4.17 58.7 9.14 1.72 0.078 4.06 Inferred 0.95 58.0 9.80 1.51 0.079 4.68 Tota