Zanaga Iron Ore Co. Ltd. · LSE:ZIOC

Zanaga Iron Ore — Non-Deal Roadshow (November 2011)

23 slides from Zanaga Iron Ore's roadshow presentation, November 2011

  1. Slide 1: Investor Presentation: Roadshow Presentation – November 2011

    InvestorPresentation Roadshow Presentation– November 2011 November 2010 0

  2. Slide 2: Disclaimer

    Disclaimer IMPORTANT NOTICE This document, which is personal to the recipient, has been issued by Zanaga Iron Ore Company Limited (the “Company”). This document does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for

  3. Slide 3: Summary

    Summary  Value Engineering Exercise (“VEE”) completed - results confirm the economic viability of the Zanaga Project - post VEE the projected cost of the 45 Mtpa railway option remains in line with IPO estimates - an alternative 30Mtpa slurry pipeline transportation option identified with potential

  4. Slide 4: Project highlights

    Project highlights 4.3Bt resource identified with  Drilling program totaling 126,984 meters identified 4.3 Bt iron ore resource grading on average future upside potential 33% Fe1  Upside potential – only c.50% of magnetic footprint drilled Large scale, low cost mining  2 development options under

  5. Slide 5: Project timeline and work programmes

    Project timeline Work Programmes Completion of Order of PFS and Value Q2: Pipeline Initial Magnitude PFS in Engineering Study Q1: Feasibility Study Q3: Mining Exploration Study progress Exercise completion completion target Commences 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 ~$180m spent Pip

  6. Slide 6: Value Engineering Exercise

    Value Engineering Exercise  Xstrata assumed management control of Zanaga Project in February 2011  Value Engineering Exercise (VEE) undertaken as an initial stage of Feasibility Study  VEE initiated to identify most attractive development option in order to optimise project economics  The pipeli

  7. Slide 7: Capex and Opex for 45 Mtpa railway option in line with IPO estimates

    Capex and Opex for 45 Mtpa railway option is in line with IPO estimates 45 Mtpa Railway Option Capital Cost Estimate (US$m)  Original railway option as outlined at IPO IPO Pre VEE VEE savings Post VEE  Assumes 118 Mtpa of ore treated through one of two processing Area (Nov ‘10) (Feb ’11) (Mar-Sep

  8. Slide 8: Pellet Feed is becoming an increasingly attractive product

    Pellet Feed is becoming an increasingly attractive product Future demand for pellet feed Declining Grades 51% 3,500  Iron ore grades are declining, leading to premiums for higher Production (Mt) 3,000 quality products expected to appreciate 49% 2,500 FeGrade 2,000 - The ongoing decline in availabil

  9. Slide 9: Pipeline transportation option could result in significant benefits

    Pipeline transportation option could result in significant operational and financial benefits… Route  Pipeline option is preferable transport solution for pellet feed Zanaga Exploration Licenses - Lower capex / opex Zanaga Congo - Brazzaville Gabon - Flexibility on route selection - Access to site

  10. Slide 10: …using proven pellet feed technology

    …using proven pellet feed technology Indicative plant flow sheet  Design capacity of 30mtpa in ROM Ore pipeline scenario Primary Crushing  Capable of processing hematite and magnetite ores Crushed Ore Stockpile Primary Grinding  Simple, well tested technologies SAG/AG Mills with no step-outs 1 mm

  11. Slide 11: Pipeline capex – ongoing optimisation

    Pipeline capex – ongoing optimisation 30 Mtpa Pipeline Option Capital Cost Estimate (US$m)  Assumes initially 30 Mtpa of pellet feed produced from 75 Mtpa of combined Area Cost hematite/magnetite ore Mine 1,203  Treatment of ore through single integrated process plant Beneficiation plant 1,071  P

  12. Slide 12: Pipeline opex – highly competitive

    Pipeline opex – highly competitive  Pipeline LOM opex estimated at US$16/t Operating cost estimate for 30mtpa pipeline case 1,2 excluding US$5/t contingency Parameter LoM Cost (US$/t)  Drivers of low operating cost Mining 4.09 - Low strip ratio - minimises material Processing 9.11 movement - Low e

  13. Slide 13: Bottom quartile cost curve position

    Bottom quartile cost curve position FOB Cash Costs for 2010 - Saleable Mine Production(1) US$/t 120 RoW Brazil Australia China 100 80 60 (2) Expected Cash Cost US$21.09/dmt + Estimated Royalties 40 20 0 0 163 325 488 651 813 976 1139 1301 1464 1627 2010A Cumulative Production (mt) Source: AME. Note:

  14. Slide 14: Iron Ore pricing – Blended AME/CRU price curves

    Iron Ore pricing – Blended AME/CRU price curves continue to move upward and outward Blended AME/CRU price average historical price forecasts(1) Production US$/t Commences 190 170 150 130 ` 110 90 ~US$88/t ~US$81/t 70 50 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Q3 2010 Q1 2011 Q2 2011 S

  15. Slide 15: Over 4bn tonnes of resource with upside potential

    Over 4bn tonnes of resource with upside potential Mineral Resource statement 1 Ongoing drilling program (metres) Tonnes SiO2 Al2O3 LOI 120,000 Fe (%) P (%) Mn (%) (Mt) (%) (%) (%) 100,000 80,000 Measured 149 38.7 0.047 39.1 2.4 0.093 1.2 60,000 Indicated 2,540 34.1 0.050 43.6 2.8 0.112 1.0 40,000 20

  16. Slide 16: Geology well understood

    200mRL 400mRL 600mRL 57 57 57 57 57 57 ZZZZZZNNN R RRR R CCC C C 192 192 192 192 0000055555 192 192 000000111 ZZZZZNNN R RRR R C CCC C 252 252 252 252 000000555 252 252 55666 86 86 86 86 ZZZNNN 6666666 86 86 ZZZZZNNN R NNNRRR R CC CCC 81 81 R C 81 81 81 81 RR RRR CCC C C 00011111999 0000011111 88888

  17. Slide 17: Xstrata relationship governed by Joint Venture Agreement

    Xstrata relationship governed by Joint Venture Agreement  Xstrata obliged to fund Feasibility Study to internal standards and international best practice  At end of the Feasibility Study Xstrata has a one off right to acquire ZIOC stake in the Project for cash  If cash offer is rejected by ZIOC p

  18. Slide 18: Strategic partner search process

    Strategic partner search process  Xstrata and ZIOC wish to explore potential strategic partners in order to further enhance long-term project value  Areas of potential value-add include and are not limited to : - off-take on commercial terms - access to construction financing - construction expert

  19. Slide 19: Appendix

    Appendix 18

  20. Slide 20: Corporate structure

    Corporate structure  Market cap: £224m ($358m) Management & Board  Share price: £0.80 Name Position  Shares outstanding: 280.4m Clifford Elphick Non-Executive Chairman Mike Haworth Non-Executive Director  Cash on B/S at 30 June of $48m Clinton Dines Non-Executive Director  Listed on AIM in Nove

  21. Slide 21: Project location

    Project location Central African Cameroon Republic Equatorial Guinea Republic of Congo Gabon Zanaga Exploration Licenses Democratic Republic of 300km the Congo Pointe Noire Brazzaville Angola  Located in the French-speaking Republic of Congo, 300km north-east of the major port city of Pointe Noire

  22. Slide 22: Excellent port site

    Excellent port site Site has potential for expansion Site has potential for expansion  Short distance to 20m deep water (post minimal dredging) - 1.6km trestle planned 1  Good existing onshore facilities in Pointe Noire  Land area presents scope for future expansion of facilities 3 4 2 1 Slurry p

  23. Slide 23: Creating a positive presence through a responsible approach to business

    Creating a positive presence through a responsible approach to business Local employment Open engagement with communities Dedicated on-site clinic Environmental studies On-site nurseries Supporting local education 22

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