Rimfire Pacific Mining Limited · ASX:RIM
Rimfire Pacific Mining — Shareholder Meeting (November 2015)
46 slides from Rimfire Pacific Mining's shareholder meeting presentation, Nov 27, 2015
Slide 1: Exploration trends, finds and issues in Australia
For personal use only Exploration trends, finds and issues in Australia Richard Schodde Managing Director, MinEx Consulting Adjunct Professor, Centre for Exploration Targeting , UWA Presentation to International Mining and Resources (IMARC) Conference 10th November 2015 Melbourne Re-presented at the
Slide 2: Overview
Overview For personal use only 1. Two Centuries of discovery in Australia 2. Trends in exploration spend (1975-2014) 3. Location of discoveries made 4. Number of discoveries made 5. Increasing depth of discovery 6. Quality and value of the discoveries made 7. Who made the discoveries ? 8. Financial
Slide 3: Two Centuries of Discovery in Australia
For personal use only There have been several waves of exploration success in Australia since mining first started in the early 1800s 1. TWO CENTURIES OF DISCOVERY IN AUSTRALIA MinEx Consulting Strategic advice on mineral economics & exploration 3
Slide 4: No. of significant mineral discoveries in Australia: 1840-2014
No. of significant mineral discoveries in Australia: 1840-2014 Number of Discoveries Half of all deposits were found after 1983 For personal use only Mining Boom (Fe, Au & Ni) 1900-1955 1960s-70s 1851 Gold Long Hiatus in Rush discovery World War 2 Caution: Incomplete data in recent years NSW and Wes
Slide 5: Significant mineral discoveries in Australia: 1840-2014
Significant mineral discoveries in Australia: 1840-2014 Percentage Breakdown Gold is the main target For personal use only Western Australia is the main destination Note: Based on 1225 discoveries >= “Moderate” in size, Source: MinEx Consulting © November 2015 Excludes 414 deposits without a discove
Slide 6: Trends in Exploration Spend
For personal use only Exploration expenditures in Australia reached an all-time high in 2012 2. TRENDS IN EXPLORATION SPEND MinEx Consulting Strategic advice on mineral economics & exploration 6
Slide 7: Exploration expenditures in Australia
Exploration expenditures in Australia For personal use only Total Expenditures (June 2015 A$ million) A$4540m in June 2012 Exploration expenditures have dropped by 72% in the last three years … but still above the lows experienced in 2002 A$760m in March 2002 A$1380m in June 2015 Note: Data reported
Slide 8: Exploration expenditures in Australia by Commodity
Exploration expenditures in Australia by Commodity March 1990 to June 2015 For personal use only Total Expenditures (June 2015 A$ million) In the last boom most of the growth was in Bulk Minerals Spending on gold and base metals is now below that experienced back in the early 2000s Note: Data report
Slide 9: Bulk Minerals now accounts for half of the total spend
Bulk Minerals now accounts for half of the total spend Level of exploration by Commodity in Australia: March 1990 - June 2015 For personal use only Percentage of Total Expenditures 10% 55% 39% Note: Data reported on an annualised basis Source: ABS Cat No. 8412.0 MinEx Consulting Strategic advice on
Slide 10: Total exploration spend in Australia by State
Total exploration spend in Australia by State March 1990 - June 2015 For personal use only Total Expenditures (June 2015 A$ million) Note: Quarterly spend data is reported on an annualised basis Source: ABS 8412 MinEx Consulting Strategic advice on mineral economics & exploration 10
Slide 11: Total exploration spend in Australia by State (% of total)
Total exploration spend in Australia by State March 1990- March 2015 Spend (% of total for Australia) For personal use only 60% 20% 1% 2% 7% 3% 7% Source: ABS 8412 MinEx Consulting Strategic advice on mineral economics & exploration 11
Slide 12: Location of Discoveries
For personal use only 3. LOCATION OF DISCOVERIES MinEx Consulting Strategic advice on mineral economics & exploration 13
Slide 13: Discoveries – All Years
Discoveries – All Years Note: Bubble size refers to Moderate-, Major-, Giant- For personal use only and Supergiant-sized discoveries N = 2137 0.1-1 Moz 0.1-1 Mt 5-25 kt 10-100 Mt 20-200 Mt 20-200 Mt Moderate 1-6 Moz 1-5 Mt 25-125 kt 0.1-0.5 Bt 0.2-1 Bt 0.2-1 Bt Major 6-60 Moz 5-25 Mt 125-1000 kt 0.5
Slide 14: Discoveries: 2005-2014
Discoveries : 2005-2014 Note: Bubble size refers to Moderate-, Major-, Giant- For personal use only and Supergiant-sized discoveries N = 254 Caution: Incomplete data in recent years Coal in the Bowen and Iron Ore in Galilee basins the Pilbara Iron Ore in the Mid-West Moderate Major Giant SuperGiant
Slide 15: Number of Discoveries Made
For personal use only 465 significant discoveries have been made since 1975. the rate is a function of exploration spend and metres drilled 4. NUMBER OF DISCOVERIES MADE MinEx Consulting Strategic advice on mineral economics & exploration 19
Slide 16: Number of discoveries made by Commodity
Number of discoveries made by Commodity Australia: 1975-2014 For personal use only Number of Large number of Bulk Discoveries Mineral discoveries N = 732 made in recent years Shouldn’t be a real surprise given the large spend exploring for bulks Note: Excludes satellite deposits within existing Camp
Slide 17: Number of discoveries made by Size
Number of discoveries made by Size Australia: 1975-2014 For personal use only Number of Discoveries Discoveries in recent years tend to smaller in size Could be simply due to them not being fully- drilled out yet N = 732 Rimfire discovered the Au/Ag Sorpresa deposit in 2010 Note: Excludes satellite
Slide 18: Adjusted number of discoveries made by Size
Adjusted number of discoveries made by Size Australia: 1975-2014 For personal use only Number of Discoveries Need to adjust for the N = 732 +56 fact that it takes time to report a discovery and drill it out Note: Excludes satellite deposits within existing Camps. Includes Bulk Mineral discoveries..
Slide 19: Adjusted number of discoveries versus A$ Spend
Adjusted number of discoveries versus A$ Spend Australia: 1975-2014 For personal use only Number of Total Expenditures The rate of discovery Discoveries (June 2015 A$B) moves in-line with expenditures … with a slow decline over time Note: Excludes satellite deposits within existing Camps. Includes B
Slide 20: Discovery rate also moves in-line with drilling
Discovery rate also moves in-line with drilling Exploration drilling and discoveries Australia: 1975-2014 For personal use only Number of Metres Drilled Discoveries (Million) Note: Excludes satellite deposits within existing Camps. Includes Bulk Mineral discoveries.. Source: MinEx Consulting © Novem
Slide 21: Average cost per discovery
Average cost per discovery Australia: 1975-2014 For personal use only Costs blew out in 2010 due Average Cost per Discovery cost inflation associated with (June 2015 $M) For most of the last 40 the commodity boom, then years unit discovery costs by savage decline in field have (surprisingly !) activ
Slide 22: Increasing Depth of Discovery
For personal use only We are having to progressively explore under deeper cover 5. INCREASING DEPTH OF DISCOVERY MinEx Consulting Strategic advice on mineral economics & exploration 27
Slide 23: Estimated depth to basement for non-bulk mineral deposits in Australia
Estimated depth to basement for non-bulk mineral deposits in Australia INDICATIVE DEPTH OF COVER For personal use only Outcrop & Shallow Basement <100m Basement depth 100 to 500m In general we are still exploring in Basement depth 500 to 1000m areas of shallow Basement depth >1000m cover Outcropping
Slide 24: Depth of cover on discoveries – by Commodity
Depth of cover on discoveries – by Commodity Major & Giant Mineral discoveries in Australia: 1900-2014 Sorpresa was For personal use only 0-4 metres Metres Note: Excludes satellite deposits within existing Camps. Also excludes Bulk Mineral discoveries. Shaded envelope refers to depth of cover for 95
Slide 25: Cumulative distribution of depth for primary gold deposits
Cumulative distribution of depth for primary gold deposits > 100 koz found in Australia:2005-2014 For personal use only 8% of all 82% 1% of all 80% discoveries discoveries (by number) (by Moz) 95% 93% outcrop outcrop 97% 94% Average depth Average depth is 64 metres is 84 metres 97% 96% 97% 97% Depth
Slide 26: Quality & Value of the Discoveries Made
For personal use only Do we make money out of exploration? 6. QUALITY & VALUE OF THE DISCOVERIES MADE MinEx Consulting Strategic advice on mineral economics & exploration 31
Slide 27: Number of discoveries made by Quality
Number of discoveries made by Quality Australia: 1975-2014 For personal use only Number of Large number of recent Discoveries discoveries are of low quality / value 405 240 72 15 732 On average, industry finds three Tier 1, ten Tier 2 and sixty Tier 3 deposits per decade Note: Excludes satellite dep
Slide 28: Exploration expenditures versus expected value of discoveries
Exploration expenditures versus expected value of discoveries in Australia For personal use only 2015 US$ billion Until recently, exploration created value for Australia Over last 40 years $1.95 of value was created per $1 spent on exploration Caution: Incomplete discovery data in recent years TRUE
Slide 29: Who Made the Discoveries?
For personal use only In recent years Junior Explorers have became a key driver for Australia’s exploration performance 7. WHO MADE THE DISCOVERIES ? MinEx Consulting Strategic advice on mineral economics & exploration 35
Slide 30: Percentage of discoveries made by Company Type
Percentage of discoveries made by Company Type Moderate+Major+Giant discoveries in Australia: 1975-2014 For personal use only Number of Discoveries In recent years Junior Companies have found most of the deposits Rimfire discovered the Au/Ag Sorpresa deposit in 2010 Note: Figures are adjusted for sh
Slide 31: Percentage of discoveries made by Company Type
Percentage of discoveries made by Company Type Moderate+Major+Giant discoveries in Australia: 1975-2014 For personal use only Number of Discoveries Junior Companies now account for 60-70% of all discoveries (by number) in Australia Note: Figures are adjusted for shared discoveries Excludes satellite
Slide 32: Majors versus Juniors
Majors versus Juniors Australia: 2005-2013 For personal use only 5% ~15% 12% 45% ~52% 72% 12% ~8% 10% ~25% 30% 12% Note: Figures are adjusted for shared discoveries Excludes satellite deposits within existing Camps Source: MinEx Consulting © November 2015 Exploration expenditures are approximate onl
Slide 33: Financial Challenges Facing Junior Companies
For personal use only Junior Explorers are struggling to raise cash – which severely impacts on their level of work in the field 8. FINANCIAL CHALLENGES FACING JUNIOR COMPANIES MinEx Consulting Strategic advice on mineral economics & exploration 41
Slide 34: Cash Reserves and Expenditures for the Median Australian Junior
Cash Reserves and Expenditures for the MEDIAN Australian Junior Exploration Company : 1998-Sept 2015 For personal use only 2015 A$ Million pa During a downturn, “in-field” exploration & Cash Reserves development expenditures are cut the most Cash Reserves Exploration are at an & Development all-time
Slide 35: Cash Reserves and Expenditures: Rimfire Pacific Mining
Cash Reserves and Expenditures Rimfire Pacific Mining: December 1998-September 2015 RIM’s expenditures Most of the spend is RIM’s cash raisings For personal use only have doubled in “into the ground” are episodic 2015 A$ Million pa recent years rather than Admin Cash Reserves Exploration & Developme
Slide 36: Most Junior Explorers currently have less than $1m in Cash Reserves
Most Junior Explorers in Australia & Overseas currently have less than $1m in Cash Reserves For personal use only Cash Reserves (US$Million) Other Exchanges Cash ASX TSX+TVX Other <US$0.2m 27% 61% 53% <US$0.5m 44% 72% 62% <US$1.0m 63% 79% 70% RIM TSX/TSE A$1.49m = [2 Nov 2015] US$1.1m ASX Note: Base
Slide 37: Lack of cash is of main concern to juniors with low market caps
The lack of cash is of main concern to those junior companies with low market caps For personal use only Companies can always raise cash by issuing new shares ….. but that’s Cash Reserves (US$ Million) difficult if the market cap is low RIM [2 Nov 2015] Market Cap (US$ Million) as at 9 November 2015
Slide 38: Junior Explorers with very small market-caps are at most risk
Junior Explorers with very small market-caps are at most risk of failing For personal use only Cumulative Number RIM TSX/TSE ASX Other Mkt Cap ASX TSX+TVX Other <US$0.5m 2% 28% 15% Depending on the jurisdiction 5-30% of <US$1m 10% 43% 25% Juniors are at risk of <US$2m 27% 58% 39% going under Market
Slide 39: Summary / Conclusions [1/3]
Summary / Conclusions [1/3] 1. Two centuries of discovery in Australia For personal use only - Australia’s exploration history is driven by “droughts” and innovation - Half of significant deposits have been found in the last 32 years 2. Trends in Exploration spend - Reached an all-time high of A$4.5
Slide 40: Summary / Conclusions [2/3]
Summary / Conclusions [2/3] 5. Change in the depth of discovery For personal use only - Have to progressively explore under deeper cover. +200 metres is not uncommon. Average depth for gold is 64 metres. - Even so, majority of discoveries are still made under shallow cover 6. Quality & Value of Disc
Slide 41: Summary / Conclusions [3/3]
Summary / Conclusions [3/3] 7. Who made the discoveries ? For personal use only - Juniors are key driver for industry’s discvoery performance - Over the last decade Junior Companies accounted for ~52% of exploration spend, found 72% of the deposits and 45% of the value. 7. Financial challenges facin
Slide 42: Contact details
Contact details For personal use only Richard Schodde Managing Director MinEx Consulting Melbourne, Australia Email: Richard@MinExConsulting.com Website: MinExConsulting.com Copies of this and other similar presentations can be downloaded from my website MinEx Consulting Strategic advice on mineral
Slide 43: Addendum: Remuneration for Directors & Key Executives
For personal use only Addendum REMUNERATION FOR DIRECTORS & KEY EXECUTIVES OF AUSTRALIAN JUNIOR EXPLORATION COMPANIES MinEx Consulting Strategic advice on mineral economics & exploration 54
Slide 44: Analysis based on random sample of ASX-listed juniors
For personal use only The following analysis is based on a random sample of 100 ASX-listed junior exploration companies for the year-ending June 2015 … MinEx Consulting Strategic advice on mineral economics & exploration 55
Slide 45: Total Remuneration for Directors & Key Executives
Total Remuneration for Directors & Key Executives ASX-listed Junior Exploration Companies for year ending June 2015 For personal use only Total Remuneration (A$) For the remaining 98 companies the average remuneration was $589,263 Directors at 2 Companies Median = $396,673 deferred submitting an inv
Slide 46: Total Remuneration versus Market Cap
Total Remuneration for Directors & Key Executives versus Market Cap ASX-listed Junior Exploration Companies for year ending June 2015 For personal use only Total Remuneration (A$) RIM Market Cap (A$ Million) as at 20 Nov 2015 Note: Figures are based on a random sample of 100 ASX-listed Junior Explor
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