Slide 1: Developing a World-Class Iron Ore Project – Peru and Thermal Coal – Indonesia
For personal use only Developing A World-Class Iron Ore Project – Peru and an early cash flow from Thermal Coal – Indonesia Strike Resources Limited, March 2010 Presentation Schedule Strike Resources Limited – Corporate Summary Overview of Peru Iron Ore Projects Apurimac Development Product
Slide 2: Executive Summary
Executive Summary For personal use only The Company’s flagship project is a 20 Mtpa, high-quality iron ore Project in Peru. Resource recently upgraded to 269Mt 142Mt Indicated @57.8% Fe* and 127Mt Inferred @ 56.7% Fe** - a significant milestone on the path to project development. Pre feasibili
Slide 3: Strike Resources listed on ASX; Directors' experience
Strike Resources Limited is listed on the Australian For personal use only Securities Exchange (ASX) ASX Code: SRK Capital structure: • Ordinary, fully-paid shares 130 million • Unlisted options 18.3 million • Fully-diluted issued capital 148.3 million Major shareholders include: • Gallagher H
Slide 4: Peruvian operations summary
For personal use only PERU 7 Peruvian operations summary Strike is developing a 20 Mtpa high-grade (68% Fe) iron ore operation in Peru, with a resource potential of over 1 billion tonnes.* Pre-feasibility study confirms potential project earnings of ~US$ 900 million annually at current benchmark
Slide 5: Strike holds its Peru interests through Apurimac Ferrum S.A.
Strike holds its interests in Peru through a joint venture For personal use only company, Apurimac Ferrum S.A. (AF) Strike Resources Limited 44%* Iron Associates Corporation (Peru) 12% D&C Group 44% (Peru) Apurimac Ferrum S.A. (P ) (Peru) Apurimac Concessions Cuzco Concessions * Strike can potential
Slide 6: Peru is a world-class mineral belt
Peru is a world-class mineral belt For personal use only Peru is among the top five producers in the world of silver, zinc, gold, copper and lead. Rio Tinto, Xstrata, Newmont, BHP, Shougang and Teck Cominco, amongst many others, have a large stake in Peru’s mining industry. Peru offers: • free
Slide 7: The Apurimac Project location
For personal use only PERU The Apurimac Project 13 Apurimac Project location 14 7
Slide 8: Operating conditions in Apurimac are highly favourable
Operating conditions in Apurimac are highly favourable for developing a world-class mine For personal use only Climate • elevation - 3,500m ASL • similar elevations to many large mines in Peru • weather conditions benign. Labour Apurimac Project located 15km from Andahuaylas with 50 000 populati
Slide 9: Target mineralisation for Opaban 1 and Opaban 3
Target iron ore mineralisation for Opaban 1 and Opaban 3 is projected at 300 - 350Mt at 57.3% Fe* For personal use only Target mineralisation is based on: Bouguer Gravity Opaban 1 Anomaly • undrilled gravity and magnetic anomalies • both deposits open at depth and to the west Opaban 3 • high-grade
Slide 10: An aggressive campaign of works is planned at Apurimac
For personal use only An aggressive campaign of works is planned at Apurimac Exploration and development budget of US$15 million. 29,000m of drilling planned to commence in mid 2010. Target iron ore mineralisation of 300 – 400Mt at 57.3 Fe.* 10 and 15 Mtpa slurry pipeline options to be consi
Slide 11: Apurimac Project Development: test work confirms metallurgical properties
For personal use only PERU Apurimac Project Development 21 Test work has confirmed the ore has excellent metallurgical properties Test work on reverse-circulation chip samples from Opaban I returns product grades at coarse crushing with particle sizes of 80% passing 125 and 250 microns as follows:
Slide 12: High-grade concentrate through simple beneficiation
High-grade concentrate will be produced through simple beneficiation For personal use only Stockpile -35 HPGR Primary oversize 1200 -1200 Screens -3 3 C h Crusher -400 Secondary Wet Crusher Screens -3 Ball Cyclone Mill -3 -0.25 LIMS -0.15 Ball -0.25 Mill PIPELINE Regrind Thickeners Concentrate WHIMS
Slide 13: The pipeline route has been identified
The pipeline route has been identified For personal use only 25 Large bodies of water are located nearby to support transport by slurry pipeline 26 13
Slide 14: Port locations and Apurimac operating costs
Port – potential locations For personal use only Proposed port site changed from Tres Hermanas to San Juan. Both offer: • deep water (20m+) within 300m from shore • protection from southern ocean currents • highway access. Tres Hermanas was initially preferred due to land access issues at San Ju
Slide 15: Operating costs versus Australian mines; capital costs
Apurimac operating costs will be much For personal use only lower than Australian mines Cash costs at target production rate(US$/tonne Fe) $50 $45 $40 $35 $30 $25 $20 $15 $10 $5 $0 ATLAS IRON LTD FORTESCUE METALS FERRAUS LTD BC IRON LTD STRIKE/APURIMAC BROCKMAN RESOURC GIRALIA RESOURCE GINDALBIE MET
Slide 16: Forecast earnings and NPV; iron ore spot prices
Forecast earnings and net present value for Apurimac are very attractive For personal use only Description Units Estimate Price per tonne FOB US$/T 60 Cash operating costs per tonne US$/T 18 Tonnes per annum MT 20 Capex US$M 2,500 EBITDA (first year full production) US$M 880 Net p present value (8%
Slide 17: Good grades, simple metallurgy and low cost structure
Good grades, simple metallurgy and low cost structure For personal use only gives a distinct advantage Apurimac offers superior grades compared to lower grade ores from Australia. Operating costs are expected to be very competitive. Apurimac ore is a mix of hematite and magnetite, which libera
Slide 18: Apurimac has potential to be a world-class iron ore mine
The Apurimac Project has the potential to be a world-class, For personal use only highly- profitable iron ore mine Strike’s objective is to delineate sufficient resource to support a 20Mtpa operation at Apurimac. Capex of $125 per annual tonne of production is comparable with other major iron or
Slide 19: Cuzco Project location and mineralisation target
Cuzco Project location For personal use only 37 Cuzco has a mineralisation target of 500 - 650Mt at 45 to 60% Fe* 23 Concessions with an area of 17,963 ha. The Cuzco deposits p occur as radial iron ore deposits within a 4km diameter area around an intrusive core. Current drilling on 30% of rad
Slide 20: A second pipeline from Cuzco may join Apurimac pipeline
A second pipeline from Cuzco may join with the Apurimac pipeline For personal use only Stage 1- Apurimac Stage 2 - Cuzco 39 INDONESIA 40 20
Slide 21: Why coal in Indonesia? Berau project location
Why coal In Indonesia? For personal use only Demand for thermal coal is expected to grow strongly to 2030, driven primarily by industrialisation in China and India and the resulting growth in demand for energy. energy Indonesia is the world’s largest exporter of thermal coal and is well placed t
Slide 22: Berau JORC Resource of 27.7Mt and feasibility study
Approximately 20,000m of drilling has established a JORC Resource in Berau of 27.7Mt For personal use only Berau thermal coal JORC Resource* is 27.7 Mt: • Measured 11.0 Mt • Indicated 11.1 Mt • Inferred 5.6Mt. Coal quality: • K/cal (gar): 5605 - 5633(gar) • moisture (ar): 16.6 - 16.9 • internal
Slide 23: Production from Berau to scale up to 3Mtpa
Production from Berau is planned to scale up from 1.5Mtpa to 3Mtpa For personal use only Coal will be transported 30km by road from the mine to a new barging port on the Segah River. River Coal will then be barged to a trans-shipment location approximately 30km offshore. Other mines in this ar
Slide 24: Berau feasibility study confirms positive economics
Strike has completed a detailed feasibility study, which has confirmed For personal use only the project has positive economics Total capital costs of ~US$19 million. Annual forecast operating surplus of approximately US$39 million, based upon: • a projected long term coal price of approximately
Slide 25: Strike undervalued relative to emerging iron ore peers
An analysis of key metrics relative to emerging iron ore peers For personal use only suggests that Strike is presently undervalued Advanced stage, premier emerging iron ore project. Vastly undervalued relative to its peers. Strong rerating potential. Potential for further enhancement from im
Slide 26: Strike undervalued based on current attributable resource
Strike appears undervalued relative to its emerging peers, based on current attributable resource For personal use only 9.00 Circle size denotes EV ($m) Resource of 269 Mt 8.00 @ 57.3% Fe. ((SRK 44%) 7.00 AGO AGO, 787 EV / Actual Resource (US$/t) 6.00 SRK excluding 5.00 Predominantly Hematite Peers
Slide 27: Undervalued based on target production metric; global transactions
Strike also appears undervalued based on For personal use only its target production metric 80 circle size denotes EV ($m) 70 ATLAS IRON LTD 60 EV / Ttarget producrion (US$/t pa) AFRICAN MINERALS 50 GRANGE RESOURCES 40 GINDALBIE METALS BROCKMAN RESOURC 30 BC IRON LTD IRON ORE HOLDING 20 GIRALIA RESO
Slide 28: Summary
Iron ore project benchmarks show that the Apurimac Project is not remote from port by global standards For personal use only APURIMAC PROJECT 363 KM to coast Source: African Minerals Sep 2009, SRK 55 Summary Strike is developing a 20 Mtpa high-grade (68% Fe product) iron ore operation in Per Peru,
Slide 29: Disclaimer
Disclaimer For personal use only This material contains certain forecasts and forward-looking information, including regarding possible or assumed future performance, costs, production levels or rates, prices, reserves and resources or potential growth of Strike Resources, industry growth or other t
Slide 30: Strike Resources Limited contact details
For personal use only Strike Resources Limited A.B.N 94 088 488 724 Level 14 The Forrest Centre 221 St Georges Terrace Perth, Western Australia 6000 Telephone +61 8 9214 9700 Facsimile +61 8 9322 1515 Email: info@strikeresources.com.au Web: eb www.strikeresources.com.au st e esou ces co au 59 30