Southern Hemisphere Mining Limited · ASX:SUH
Southern Hemisphere Mining — Investor Presentation (October 2010)
40 slides from Southern Hemisphere Mining's investor presentation, Oct 15, 2010
Slide 1: Los Pumas Manganese Project Pre-Feasibility Study / Development Plan
For personal use only Southern Hemisphere Mining Limited Los Pumas Manganese Project Pre-Feasibility Study/ Development Plan
Slide 2: Disclaimer Notice
For personal use only Disclaimer Notice This Presentation contains certain forward –looking information and forecasts. Such forecasts, projections and information are not a guarantee of the Company’s future performance and include unknown risks and uncertainties. Accordingly, the actual results and
Slide 3: Investment Highlights
Investment Highlights For personal use only Los Pumas Manganese Project Near-term production Diversified Project Early-stage high-potential copper/gold assets Portfolio Iron sands asset with attractive project economics One of the world’s leading mining jurisdictions 100% Chile-based Pol
Slide 4: Company Snapshot
Company Snapshot Capitalisation Summary For personal use only Ordinary Shares (1) 103,019,022 Headquartered in Australia and operating in Chile Market Capitalisation @ $0.58 AU$60M Dual listed on the ASX (SUH) and the TSXV (SH) Cash (2) AU$4M Diversified portfolio of Chilean-based metals proje
Slide 5: Management & Board of Directors
Management & Board of Directors For personal use only Management & board of directors are closely aligned with Southern Hemisphere’s shareholders Board of Directors Position Ownership Trevor Tennant Chairman and MD 15.10% James Pearson Executive Director 8.77% David Craig Non-Executive Director <0.1
Slide 6: Pre-Feasibility and Enhancement Studies
Pre-Feasibility and Enhancement Studies For personal use only PFS Key Outcomes and Proposed Enhancements Los Pumas Pre-Feasibility Study (PFS) supports the development of the Los Pumas Manganese Project PFS Estimated Net Present Value After Tax: US$90m at an approximate average cash cost of US$3
Slide 7: Los Pumas Project Location
Los Pumas Project Location For personal use only The Los Pumas Manganese Project is located in the North of Chile, region XV of Los Pumas Project location Arica and Parinacota The mine and process plant are located close to the Chile-Peruvian border, 35km north from the town of Putre, at an elev
Slide 8: Mining in Chile
Mining in Chile For personal use only World’s largest copper producer Strong mining history with westernised regulations Robust, growing economy and stable, democratic government Free trade agreements with Australia, Canada, USA, EU, China and Japan Los Pumas Project located in a region th
Slide 9: Manganese Market
Manganese Market For personal use only Manganese price history (44% Mn) Manganese is the fourth most used metal globally with approximately 90% of it produced employed in the production of ferroalloys for use in steelmaking – 18 there is no known substitute for Manganese in steel production 16 14
Slide 10: Manganese Price Outlook
Manganese Price Outlook For personal use only Manganese price is forecast to rise due to both Manganese Price Forecast demand and supply factors: 18 Higher steel production and IOU trends 16 14 China’s continued reliance on Manganese 12 imports – domestic production is suffering grade and cost
Slide 11: Los Pumas Manganese Project Overview
Los Pumas Manganese Project Overview For personal use only Large, easy to mine JORC Measured, Indicated and Inferred Resource 18.3Mt Near term production (expected Q1 2012) Low capital and operating costs expected Los Pumas Major Geological Features Excellent logistics and near mine infrastr
Slide 12: Los Pumas Pre-Feasibility Study Scope
Los Pumas Pre-Feasibility Study Scope For personal use only PFS has evaluated the development of an open pit mine at Los Pumas to produce 300ktpa of 38% manganese product for a 7 year mine life Production is by contract miner and scheduled from Measured, Indicated and a tail of Inferred status m
Slide 13: Los Pumas Pre-Feasibility Study Highlights
Los Pumas Pre-Feasibility Study Highlights(1) For personal use only Mn Price US$7.40/dmtu FOB Arica Resource 18.3Mt @ 7.6% Mn Targeted product size Mine life 7 years Fines 0.5-10mm (main product) Average annual production (life of mine) 300,000 tonnes Ultra Fines 0.2-0.5mm (secondary product) Ta
Slide 14: Los Pumas Resource
Los Pumas Resource For personal use only Resource supports initial 7 year mine life Resource(1) Tonnes Mn SiO2 Fe2O3 Al P (Mt) (%) (%) (%) (%) (%) Measured and indicated 14.3 7.8 57 3 6 0.05 Inferred 4.0 6.8 54 3 6 0.06 TOTAL 18.3 7.6 57 3 6 0.05 Mineral Resources reported at a cut-off grade of 4% M
Slide 15: Geology
Geology For personal use only Tabular flat mantle, near surface and easy to mine Resource outcropping at 0-30m depth Low strip ratio (1.5:1), combined with metallurgical characteristics support favourable operating costs Three main lithological units comprising: block and ash pink ignimb
Slide 16: Metallurgy
Metallurgy For personal use only Winze sinking program Metallurgical test work Mintek (South Africa) undertook testing Independent review by Mineral Processors Bulk samples obtained from a winze sinking program of four winzes for a total of 62 meters A total of 4 tonnes of sample were sent t
Slide 17: Mining
Mining For personal use only Los Pumas PFS features open pit mining with low capacity load and haul equipment Conventional open pit mining performed by Los Pumas Project Site Map local contract miner Shallow multiple pits incorporated into overall mine area Adjacent top-dumped waste dumps Lo
Slide 18: Permitting
Permitting For personal use only Chile has absolute dominion over all the mines and minerals explored and exploited through mining concessions Southern Hemisphere has obtained concession status for the Los Pumas Project land, granting it exclusive exploitation rights for a 50 year period to pros
Slide 19: Water Supply
Water Supply For personal use only Regional hydrogeological study undertaken by Hydroconsult Modest plant water requirements of 20 litres/second Several sources of surface water identified at varying distances from the project Agreement reached with Putre Community Land Owners (PCLO) to acce
Slide 20: Environment & Community
Environment & Community For personal use only Los Pumas Project surface rights are privately owned by the PCLO PCLO has granted Southern Hemisphere easement rights over the Los Pumas Project land for all exploration and mining purposes, including the construction of plant, buildings and associat
Slide 21: Los Pumas Plant
Los Pumas Plant For personal use only Simple and proven design with operational flexibility Key features EPCM contract with turnkey packages for processing plant sections Value of works is estimated at US$31.6 million Value of works includes direct cost of crusher, DMS plant, effluent product,
Slide 22: Process Flowsheet
Process Flowsheet For personal use only Simple process Well proven DMS technology Dense media cyclones Minimises generation of <0.5mm material Feasibility Study to investigate enhancements in capturing fines and losses to floats 22
Slide 23: Los Pumas Project Infrastructure
Los Pumas Project Infrastructure For personal use only All key infrastructure (multi-user) in place: 170km by sealed road to Arica Port with bulk loading capabilities for Handymax ships Undercover stockpile facilities available (used for zinc concentrates from Bolivia) Conveyor system for lo
Slide 24: Capital Costs
Capital Costs(1) For personal use only US$M Capital Investment Scope Mine Establishment 1.2 410tph three stage crushing plant Mine Facilities 0.6 1,750t crushed feed silo Process Plant 31.6 Infrastructure 18.7 353tph coarse (10mm x 2.0mm) and fine (2mm x 0.5 mm) dense media separation General
Slide 25: Operating Costs
Operating Costs(1) For personal use only Life of Mine Estimated US$/dmtu1 Strip ratio of 1.5:1 Mining 1.20 Processing 0.70 Metal recovery yield 60% Site services 0.40 Further metallurgical test work expected Logistics 0.90 to enhance metal recovery yield Administration & Accommodation 0.30 ass
Slide 26: Sensitivity Analysis
Sensitivity Analysis For personal use only Project IRR most sensitive to metal recovery and product yield assumptions Less sensitive to capex and product price assumptions Further metallurgical test work being undertaken to enhance metal recovery yield assumptions 80% 70% 60% 50% Post Tax IRR 40% 30
Slide 27: Feasibility Enhancement Study
Feasibility Enhancement Study For personal use only FES Company is undertaking an enhancement study incorporating resource work being conducted by Coffey Mining and additional metallurgical test work by Mintek and Mineral Processors of the Los Pumas mineralisation FES is expected to deliver: R
Slide 28: Development Schedule
Development Schedule For personal use only Targeting production first quarter 2012 2010 2011 2012 September November November December December February February October October January January August March April June May July PFS a Environmental Approval FES Engineering Procurement DMS Turnkey Cont
Slide 29: Financing
Financing For personal use only PFS Capex for the Los Pumas Manganese Project is US$74 million The Company will assess a range of financing alternatives to fund development The Los Pumas PFS shows strong potential financial returns which the Company believes will allow financing of its developme
Slide 30: Regional targets
Regional targets For personal use only Regional map of exploration potential Mineralisation in the Los Pumas Project area known since World War II but potential not assessed previously Regional exploration potential exists in addition to resource work being undertaken as part of the FES Other
Slide 31: Regional targets
Regional targets For personal use only Southern Hemisphere Regional Target – La Pascuala IGNIMBRITE: 15 – 25 m [insert] ANDESITE FLOW: 20 – 40 m PINK IGNIMBRITE, with Mn in stock work: 10 – 20 m VOLCANIC AGLOMERATED, with Mn cement: 1 – 2 m RECENT SEDIMENT: 0,5-1 m V V ANDESITE FLOW: 40 – 50 m V V
Slide 32: Copper Mining in Chile
Copper Mining in Chile For personal use only Chile is the number one copper producer in the world Accounts for c. 30% of the worlds copper mine production 10 Largest Copper Mines (Production kt) Home to truly world class, long-life deposits 1,200 3 of the 5 largest copper mines in the world
Slide 33: Copper Prospects
Copper Prospects For personal use only Map of Company Copper Properties Copper/Copper-Gold The Company has 13 properties covering over 800km2 of mineral permits World class copper belt host to major discoveries A number of the properties are prospective for porphyry style copper/copper-gold
Slide 34: Copper Prospects: Chitigua
Copper Prospects For personal use only Chitigua Chitigua Project Regional Setting Porphyry copper-molybdenum target immediately east of West Fault – host to several of the world’s largest copper deposits (Escondida, Gaby, Chuquicamata, Collahuasi) Located directly between Teck Resources’ Quebr
Slide 35: Copper Prospects: Santa Gracias/Chacay
Copper Prospects For personal use only Santa Gracias/Chacay Santa Gracias Project Santa Gracias is a porphyry copper-gold target in the La Serena region Located within a north-west trending structural corridor which is host to Teck Resources’ Andacollo copper-gold project1 La Cuyana at Santa G
Slide 36: Copper Prospects: Mantos Grandes
Copper Prospects For personal use only Mantos Grandes Targeting high grade hypogene, skarn related copper-gold mineralisation Historical small scale copper mining present with basic infrastructure to support an operation Prior geochemical sampling confirmed existence of copper-gold geochemic
Slide 37: Iron Sands Project
Iron Sands Project For personal use only Iron Sands Exploration licenses covering three areas of iron sands occurrences Recently acquired for C$0.7m (to be paid in shares, subject to shareholder approval) The largest, the Chanco Project, has an area 24km by 3km Samples have been taken and
Slide 38: Summary
Summary For personal use only PFS supports development of the Los Pumas Manganese Project FES underway and expected to deliver enhanced economic outcome Testing of the Iron Sands potential underway with specialty steel producer in China Immediate exploration focus on walk-up drill targets fo
Slide 39: Appendices
For personal use only Appendices 39
Slide 40: Data Sources
Data Sources For personal use only PFS Component Responsibility Geological exploration Southern Hemisphere Resource definition Coffey Mining Initial metallurgical test work Mintek, peer review by Mineral Processors Process engineering Mineral Processors Preliminary civil, structural, mechanical and
Southern Hemisphere Mining — Investor Presentation (October 2010) on 6ix