Sunstone Metals Ltd · ASX:STM
Sunstone Metals — Avalon Minerals — Investor Presentation (August 2010)
24 slides from Sunstone Metals's investor presentation, August 2010
Slide 1: Viscaria Copper – Iron Ore Project
Viscaria Copper – Iron Ore Project August 2010
Slide 2: Disclaimer
Disclaimer Forward Looking Statement This Presentation contains general information about Avalon Minerals Limited (Avalon). It does not purport to contain all the information that a prospective investor may require. The Presentation should not be considered as an offer or invitation to subscribe for
Slide 3: Avalon Snap Shot
Avalon Snap Shot Advanced Viscaria Cu-Fe Project in Northern Sweden Resource: 40.6Mt 1.3% Cu Scoping Study completed: 10 year LOM US $110M pa revenue US $24M pa cash margin Fast payback Solid returns Targeting production of 14,000tpa Cu and 400,000tpa Fe concentrate in 2012-13 Established infrastruc
Slide 4: Corporate Snapshot
Corporate Snapshot Capital Structure Shares on issue 132.3m Unlisted options 1.9m Market Capitalisation (18cps) $23.8m Cash $2.0m Debt nil Enterprise Value $21.8m Major Shareholders Board and Management Directors and Management 26.7% David McSweeney Chairman Galena Fund 9.8% Andrew Munckton Chief Ex
Slide 5: Viscaria Location
Viscaria Location Discovered in 70’s – 4km from Kiruna (pop 20,000) 15 years historical production to 1997 100ktpa @ 26% Cu Purchased 100% by Avalon Phelps Dodge, US $0.5 million All historical data, Zero liabilities Infrastructure Rail heavy haul Ports - Narvic, Luleu Power Facilities City Construc
Slide 6: Kiruna, LKAB and Viscaria
Kiruna, LKAB and Viscaria AY —— — si minerals Itd
Slide 7: Viscaria Copper Resource
Viscaria Copper Resource Inferred Mt Cu % Cu Metal 000 tonnes Inferred “A” Zone N 5.4 1.2 65 ’A’ Zone S 8.2 2.7 224 ‘B’ Zone 24.5 0.8 191 ‘D’ Zone 2.5 1.6 40 TOTAL 40.6 1.3 520 Updates in progress: ‘D’ Zone....90 holes drilled 6 to 8 Mt target ‘B’ Zone.....150 holes drilled New interpretation ‘A’ Zo
Slide 8: Viscaria Iron Ore
Viscaria Iron Ore D Zone Adjacent to Viscaria Cu mine 20m wide at 37% Fe Quality concentrate 70% Fe, 1% SiO2, 0.03%Cu, 50%WR 66% Fe, 3.5% SiO2, , 0.09%Cu, 58%WR 5 km from Kiruna (LKAB) 28mtpa ore, 20mtpa pellets Concentrator, Pellet Plant 68%Fe, 2% SiO2 pellets 6km magnetite rich ‘D’ Zone Drilled at
Slide 9: D Zone Cu and Fe
D Zone Cu and Fe mmo ve y = 2 Loom Ke 4.3m 2th Fe SOmRL | vmb0001 Visual Cu and Fe mineralisation | 100mRL 100mRL | vDD0014 20m @ 2.26% Cu 25.8m @ 2.2% Cu ’ Basalt 2.6m © 38.4% Fe eSauie Basalt | 150mRL i i fee ipo i 450mRL | U70 von0018 meen 5m @ 30.6% Fe 3m @ 1.7% Cu VvDD0018 1.5m @ 17.0% Fe | 200
Slide 10: Viscaria Development Plan
Viscaria Development Plan Base Case Upside Case Mine A, B, D A, B, D, D Extn Process rate 1.5mtpa 3.0mtpa Annual Saleable 49,000tpa @ 26% Cu 89,000tpa @ 26% Cu Products 392,000tpa @ 69% Fe 1,060,000tpa @ 69% Fe Delivered Grade 1.0% Cu 22% Fe 0.9% Cu 30% Fe Recovery 88% Cu 83% Fe 88% Cu 83% Fe LOM 10
Slide 11: Desktop Economics
Desktop Economics Base Case Upside Case CAPEX US $125M US $185M OPEX US$ 86M pa US $167M pa Cash cost (after credits) US $2,000/t, US $0.89/lb Cu US $1,000/t, US $0.45/lb Cu Revenues US $110M pa US $238M pa NPV @ 10% US $86M US $186M IRR 25.8% 35% Pay Back 3.1 Years 2.6 Years Average Annual Expendit
Slide 12: Project Comparison
Project Comparison Projects with similar ore processing Project, Location, Owner Copper Iron Ore Ernest Henry - Australia 72Mt @ 1.0% Cu 22% mag Fe (Xstrata) 50ktpa Cu metal output 1.2mtpa @ 67% Fe Cairn Hill - Australia ?? ?? Marcona - Peru 0.1% Cu 8.2mtpa (Shougang Hierro) removed but not concentr
Slide 13: Viscaria Project Work Program
Viscaria Project Work Program 2009 2010 2011 2012 2013 Pre-feasibility Cu and Fe Resource Update Metallurgy D Zone A and B Zone Mining concession Application Permitting EIA & E Court Drilling A,B,D Zone D Zone Extn Definitive Feasibility Cu & Fe Study Detailed design Construction & Plant Development
Slide 14: Peer Comparison – Contained Copper
Peer Comparison Contained Cu tonnes (Mt) 7.0 6.0 5.0 Mt Contained Copper 4.0 3.0 2.0 1.0 0.0
Slide 15: Fe and Cu Exploration
Fe and Cu Exploration Outstanding exploration ground 423km² tenure acquired - May 2010 Further ground under review Regional Cu-Au and Fe mineralization Magnetics/Gravity/EM Comprehensive geological, geochemical datasets (SGS), (LKAB) Multiple Targets IOCG VMS Cu and Zn Skarn Iron Ore Apatite Iron Or
Slide 16: Cu Exploration
Cu Exploration Viscaria trend 40km strike length EM conductor Highlights ‘A’ and ‘B’ Zone Massive sulphide lenses 4 primary targets identified Exploration program Geochemical sampling Geophysics Drilling 2011 1000m Percussion Base of till geochemistry
Slide 17: Adak Copper / Zinc Project
Adak Copper / Zinc Project Discovered in 40’s in Skellefte Base Metals Belt, 300km south of Kiruna Historical production 6.3mt @ 2.0% Cu, 4.7mt @ 0.9% Cu and 3.0% Zn Room and Pillar UG Historical data being assembled Paper and sepia Old core Historical drilling and production 18 months work Attracti
Slide 18: Sweden – A Mining Country
Sweden – A Mining Country Government Supports mining 28% company tax, 0.2 % royalties Approvals process transparent Iron Ore 28mtpa - LKAB Markets - W Europe, M East, Asia Pellets, Concentrates and Fines Sweden has an established Copper mining and 3rd in Europe Mines and smelters - Boliden export in
Slide 19: Photos
Photos
Slide 20: Summary - Avalon Minerals
Summary - Avalon Minerals Established ASX Listed Company Management with track record of project development Strong medium term outlook for copper and iron ore Scoping Study completed and PFS underway High quality Project Historical Base Metals production Near term production planned Cu and Fe Conce
Slide 21: Contact Details
Contact Details David McSweeney Managing Director & Chairman Richard Simpson Director - Corporate Finance Avalon Minerals Limited www.avalonminerals.com.au Hartleys Limited www.hartleys.com.au 91 Havelock Street T +61 8 9322 2752 Member of the ASX T +61 8 9268 2824 West Perth F +61 8 9322 2827 Level
Slide 22: Copper Demand
Copper Demand Chinese and world copper demand in the Copper Demand by Decade 8000 historical context 27500 50% 7000 China 25000 China 45% Other 6000 Total 22500 World Ex-China 40% 5000 20000 35% 4000 '000 tonnes World 17500 30% '000t copper 3000 % share 15000 China's share of world demand 25% 2000 1
Slide 23: Copper supply
Copper supply Planned Growth in Copper Mine Supply By Region, 2008-2013 Copper Mine Changes by Region 1400 Europe , 267, 7% 1200 Oce ania, -27, 1% 1000 N.Am erica, 259, 7% Africa, 933, 25% 800 Europe N.A merica 600 Asia '000t Af rica Oceania 400 L.A merica Tot al World As ia, 297, 8% 200 0 L.Am e ri
Slide 24: Iron Ore
Iron Ore Iron Ore Demand million tonnes 2007 2008 2009E 2010F 2011f 2012f 2013f 2014f 2015f Supply curve to Chinese market for iron ore fines Demand Europe 140 134 97 111 117 123 125 125 126 110 Vale Rio Tinto BHP Billiton FMG Asia 585 655 790 848 932 993 1066 1143 1221 105 Other Australia Other Bra
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