Sunstone Metals Ltd · ASX:STM
Sunstone Metals — Avalon Minerals — Investor Presentation (April 2016)
27 slides from Sunstone Metals's investor presentation, Apr 5, 2016
Slide 1: Avalon Minerals – Investor Update
5th April 2016 AVALON MINERALS – INVESTOR UPDATE Highlights Updated work on the Viscaria Copper Project Scoping Study delivers greater confidence in the 2.0 Mtpa Target Case; Mining Inventory increased with expanded pit design, and incorporation of Exploration Potential from D Zone; ESIA and p
Slide 2: Avalon Minerals – Building a European Copper Producer
AVL ak AVALON MINERALS LTD COPPER IN- SWEDEN BUILDING A EUROPEAN COPPER PRODUCER oe April 2016 —~asa=
Slide 3: Disclaimer
DISCLAIMER DISCLAIMER FORWARD-LOOKING STATEMENTS To the maximum extent permitted by law, no This Presentation includes certain statements that may representation, warranty or undertaking, express or be deemed “forward-looking statements”. All implied, is made and, to the maximum extent permitted sta
Slide 4: Avalon Minerals – Simple Story
AVALON MINERALS – SIMPLE STORY 1. Copper development company 2. Updates to Viscaria Scoping Study deliver robust 21,000tpa producer for minimum 9 years 3. Single high quality asset focus - Viscaria 4. Supported by outstanding infrastructure - Kiruna 5. Low sovereign risk - Sweden 6. Highly competent
Slide 5: Copper – Supply, Demand, Forecasts
COPPER – SUPPLY, DEMAND, FORECASTS Viscaria production forecast to come on line at tightening of supply- demand, and consensus forecast price increase Develop in the lead-up to a supply shortfall Copper price up 5% YTD 3
Slide 6: Corporate
CORPORATE TICKER ASX:AVI Top 10 shareholders hold 70% of shares on issue Frankfurt:AL9 Board and management hold 3.5% and have SHARE PRICE* A$0.015 participated in recent placements SHARES ON ISSUE 378,353,560 European and UK shareholders total 50% MARKET CAP A$5.3M CASH# A$1.2M SUBSTANTIAL SHAREHOL
Slide 7: Viscaria Copper Project
VISCARIA COPPER PROJECT PROJECT SITE KIRUNA TOWN PUBLIC ACCESS ELECTRIC RAIL LOW COST HYDRO POWER 5
Slide 8: Kiruna and Viscaria Location Map
KIRUNA AND VISCARIA LOCATION MAP Viscaria Kiruna LKAB Copper orebodies shown in orange 6
Slide 9: Viscaria Copper: Expanded Scale
VISCARIA COPPER: EXPANDED SCALE • Delivering increased project scale to an average annual production rate of between 20,000 – 30,000 tonnes copper in concentrate • Increased mining inventory through low technical risk drilling of an exploration target (see slide 11) will be undertaken on D Zone oreb
Slide 10: Viscaria Copper: Updates to 2015 Scoping Study
VISCARIA COPPER: UPDATES TO 2015 SCOPING STUDY • At the expanded scale of 2.0Mtpa the project is less sensitive to copper price and at $2.75/lb Cu delivers a robust return of 20% IRR • At Target Case 2.0Mtpa the project delivers average annual net operating profit of US$66 million. For comparison, t
Slide 11: Viscaria Copper: Updates to 2015 Scoping Study
VISCARIA COPPER: UPDATES TO 2015 SCOPING STUDY The 2015 Scoping Study confirmed the project description to begin ESIA process (Refer ASX Announcement 14 December 2015 ) 2015 Scoping Study Target Case A and Expanded Case Process plant size 1.2Mtpa scenario 2.0Mtpa scenario 3.0Mtpa scenario Strip rati
Slide 12: Viscaria Copper: Mineral Resource Estimates and Mining Inventory
VISCARIA COPPER: MINERAL RESOURCE ESTIMATES AND MINING INVENTORY Mineral Resource Tonnes (Mt) Grade (% Cu) A Zone# 21.6 1.5 B Zone# 19.7 0.8 D Zone Open Pit* 3.1 0.8 D Zone Underground* 8.0 1.4 Total 52.4 1.2 (93% Measured and Indicated) Mining Inventory Tonnes Tonnes Grade (% Grade (% (Mt) 2015 (Mt
Slide 13: D Zone: Extremely Confident It Will Be Larger
D ZONE: EXTREMELY CONFIDENT IT WILL BE LARGER Clear message from 2015 – orebody is getting better as we go deeper The northern target zone has the potential to deliver 3-5Mt of mineralised rock, at grades comparable to those seen in VDD 195 (21.5m @ 1.5% Cu) Similarly the southern target zone has th
Slide 14: D Zone: Extremely Confident It Will Be Larger
D ZONE: EXTREMELY CONFIDENT IT WILL BE LARGER N D Zone D Zone copper host is orebody; black 50-70% magnetite – dashed line simple process to model D Zone Magnetic host to deliver orebody model; green, blue, geometry yellow domains 3-D and plate modelling of magnetic data demonstrates very clearly th
Slide 15: D Zone: 2015 Mine Planning
D ZONE: 2015 MINE PLANNING Mine planning will be modified to capture deeper and new shoots, for example those expected in the vicinity of VDD 196 And that will deliver >0.9% Cu cut-off material shown in yellow This will contribute to increased mining inventory 13
Slide 16: A & B Zone Combined Open Pit: More Tonnes and Improved Strip Ratio
A & B ZONE COMBINED OPEN PIT: MORE TONNES AND IMPROVED STRIP RATIO Historical mining targeted >2% Cu only Very significant open pit opportunities Red areas of >2% Cu have been partly mined, but all other mineralised areas will contribute to resource growth 14
Slide 17: A & B Zone: Significant Upside in Expanded Open Pits
A & B ZONE: SIGNIFICANT UPSIDE IN EXPANDED OPEN PITS There is more copper within the expanded open pit than the historical resource estimate suggests This is confirmed by Avalon drilling from 2014 (VDD 182) and detailed reviews of historical drill holes Current pit outline Exploration Target for A&B
Slide 18: Much More Copper in the District
MUCH MORE COPPER IN THE DISTRICT Mine scale orebody extensions, low technical risk Exploration success within 5km A rich portfolio of near mine targets to add to the scale of the project 16
Slide 19: Stakeholder Engagement and Permitting
STAKEHOLDER ENGAGEMENT AND PERMITTING AVALON IS COMMITTED TO STRONG COMMUNITY ENGAGEMENT AS THE VISCARIA DEVELOPMENT PROGRESSES The proposed development area is in a window surrounded by Area of Development Focus multiple land use areas The key issues are • a strong mining heritage • water managemen
Slide 20: A High Quality Leadership Team
A HIGH QUALITY LEADERSHIP TEAM Chairman Resources executive. Broad global experience with large companies and building juniors Graham Ascough CEO and Managing Director Geologist and Business Development. Track record of discovery and growth Malcolm Norris General Manager Mining Engineer. Studies and
Slide 21: Planning to Deliver
PLANNING TO DELIVER 2015 2016 2017 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 STUDIES AND EXPLORATION Exploration (discretionary) Scoping Study Copper Production + 18 months Updated Scoping Study Decision to Mine Accelerate Feasibility Study PERMITTING ESIA Baselines ESIA Assessments and Application ESIA review to
Slide 22: Consider an Investment Decision Based on Risk and a 3-5 Year Time Frame
AVALON MINERALS – CONSIDER AN INVESTMENT DECISION BASED ON RISK AND A 3-5 YEAR TIME FRAME General Risk – Low Technical Risk – Low • Sweden, low sovereign risk • 2015 drilling program very successful • Kiruna, a mining district • Strong upside case for delivery of additional • Viscaria Project resour
Slide 23: Appendices
APPENDICES AVALON 21
Slide 24: Viscaria Copper – 2015, Delivered to Goals
VISCARIA COPPER – 2015, DELIVERED TO GOALS Ownership • 100% ownership retained • Completed 8,000m of diamond drilling at D Zone in 2015 • Strongly outperformed historical results and delivered confidence Drilling • Outstanding results such as VDD 193, 26.7m at 2.6% Cu including 6.6m at 3.5% Cu • Rec
Slide 25: Viscaria – Don't Underestimate the Value of Location and Existing Infrastructure
VISCARIA – DON’T UNDERESTIMATE THE VALUE OF LOCATION AND EXISTING INFRASTRUCTURE Mining infrastructure is in place adjacent to the world’s largest underground magnetite mine and iron pellet manufacturing facility Airport Mining town with mining contractors Low cost hydro power Highway access
Slide 26: Viscaria Copper – Mineral Resources
VISCARIA COPPER – MINERAL RESOURCES Viscaria Copper Project Mineral Resource Estimates Summary – Nov 2015 Resource Area Location Classification Tonnes (Mt) Cu Grade (%) Contained Cu (kt) Measured 14.44 1.7 240.0 Indicated 4.69 1.2 57.2 A Zone Open Pit Inferred 2.48 1.0 25.5 Subtotal 21.61 1.5 322.7
Slide 27: Competent Persons Statement
COMPETENT PERSONS STATEMENT Competent Persons Statement The information in this report that relates to exploration targets and results is based upon information reviewed by Mr Malcolm Norris who is a Fellow of the Australasian Institute of Mining and Metallurgy. Mr Norris is a full-time employee of