Iluka Resources Limited · ASX:ILU
Iluka Resources — Technical Presentation (June 2011)
63 slides from Iluka Resources's technical presentation, Jun 1, 2011
Slide 1: Jacinth–Ambrosia Investment Market Site Visit
Iluka Resources Limited Jacinth–Ambrosia Investment Market Site Visit 1 June 2011 1
Slide 2: Disclaimer – Forward Looking Statements
Disclaimer – Forward Looking Statements This presentation contains forward-looking statements that are subject to risk factors associated with exploring for, developing, mining, processing and sale of minerals. Forward-looking statements include those containing such words as anticipate, estimates,
Slide 3: Iluka's Australian Operations
Iluka’s Australian Operations Murray Basin, Victoria / NSW Darwin • Major rutile and zircon production province • MSP processing facilities for VIC and SA HMC Northern Territory Eucla Basin, South Australia Queensland • Globally significant zircon production source Western • Mine life10 years+ Austr
Slide 4: Murray Basin (MB)
Murray Basin (MB) MUP coupled to pit production Operational Improvement • Successfully changed Kulwin Mining Method in late 2010 Mining Unit Plant (MUP) decoupled from in pit production Reduced number of mining unit moves Allowed build of Pre-Concentrator Plant (PCP) Stockpile PCP stockpile
Slide 5: Jacinth – Ambrosia (J-A)
Jacinth – Ambrosia (J-A) Operational Improvement Dozer Push • Solid YTD HMC production • De-bottlenecking and standard operations focus improving production • Trialling new mining method to improve HM grade, recovery and MUP availability, scrapers vs dozer push • Focus on unit costs Scrapers Corpora
Slide 6: Western Australia
Western Australia Narngulu MSP Operational Improvement • Narngulu MSP running above nameplate on key bottlenecks • J-A Rutile commissioning complete Q1 (focus was zircon prod.) • Focus on unit costs Douglas mine SW Kilns Corporate Plan Development Streams - Enhancing Production • Assessing potential
Slide 7: Operation Information
Iluka Resources Limited Jacinth–Ambrosia Investment Market Site Visit 1 June 2011 Operation Information
Slide 8: Jacinth-Ambrosia Location
Jacinth-Ambrosia Location 3
Slide 9: Summary Physical Characteristics
Summary Physical Characteristics Jacinth – Ambrosia (as at 31 December 2010) HM Mineral Resources* 8.3 million tonnes of HM HM Ore Reserves* 6.4 million tonnes of HM Avg Ore Reserve HM Grade 6.0% Avg HM Ore Assemblage 50% zircon 28% ilmenite 5% rutile Development Capex $390 million (original budget
Slide 10: Assemblage Characteristics
Assemblage Characteristics Globally Highest Zircon Assemblage Mineral Sands Deposit 3.00 Iluka Jacinth-Ambrosia 2.50 2.00 Zircon to titanium tioxide ratio 1.50 1.00 Namakw a A ustralian Zircon Gunson Resources Iluka Mid West Iluka V irginia Iluka Murray Basin 0.50 DuPont CRL Ticor SA RBM BeMax Tiw e
Slide 11: Jacinth-Ambrosia Overview
Jacinth-Ambrosia Overview Portfolio Positioning • Key component of Iluka’s transformation to higher margin production base • Existing capacity utilised in Western Australia for processing of Jacinth-Ambrosia concentrate - reflects Iluka’s integrated approach to capacity utilisation - concentrate fro
Slide 12: Jacinth-Ambrosia Overview: Project Execution
Jacinth-Ambrosia Overview Project Execution • Project delivered 5 years from exploration success • Capital expenditure of $390 million vs capital budget of $420 million • Project delivered 3 months ahead of schedule - nil LTIs - nil environmental licence breaches • 1st concentrate produced in Novemb
Slide 13: Product Market Application
Product Market Application • Premium grade zircon - low impurity levels suitable for ceramics market - similar to Eneabba quality for ceramics use – no longer available - application for casting, zirconium chemicals and zirconia applications • High titanium dioxide / rutile - low in sulphur and phos
Slide 14: Jacinth-Ambrosia Production and Financial Characteristics
Jacinth-Ambrosia Production and Financial Characteristics • Operating mines will produce HMC - includes mining, separation and transportation costs to mineral separation plant • Final product processing of HMC at one or more mineral separation plants (Narngulu or Hamilton) • Consequently, revenue, E
Slide 15: Production and Financial Components
Production and Financial Components • Cash production costs include: mining, separation and transportation costs of HMC from Port Thevenard and to Geraldton - transportation of HMC a major part of J-A’s cash costs of production • Cash cost of production not the key differentiator in mineral sands •
Slide 16: Jacinth-Ambrosia Indicative Cash Costs of Production
Jacinth-Ambrosia Indicative Cash Costs of Production Overheads 3% Mining and HMC Transport Concentrating 34% 40% Separation 23% • Approximate total Jacinth-Ambrosia cash costs of production (including processing in Western Australia) ~ $170 million • Cash production costs subject to variation depend
Slide 17: Operations Overview
Iluka Resources Limited Operations Overview Mining & Facilities Manager Shane Tilka
Slide 18: Operational Overview
Operational Overview Mining • Two contiguous deposits • Located within Yellabinna and Nullabor Regional reserves • First mining on mixed use reserves in South Australia • Initial mining of Jacinth with mine mining unit plant move to Ambrosia planned in 2017 • Total area disturbed by mining and infra
Slide 19: Project Overview
Project Overview Water • Hyper saline water drawn from paleochannel • Bore field 32 kms from process plant • No groundwater dependent ecosystems associated with J-A water supply source • ~ 7 GL/annum raw water requirement - Iluka consumes ~6% volume over mine life • Transferred to mine site in glass
Slide 20: Site Overview
Site Overview WA CIN TAINMINES | hEg2 010
Slide 21: Operational Overview: Mine Plan
Operational Overview Mine Plan Mining Method • Conventional dry mining in large open pit • Overburden removal by truck and excavator • Dozer trap mining • Mining unit plant in pit Physical Properties • 900m wide by 5 km long • Free running, fine grained sand • Low in moisture; no groundwater • Avera
Slide 22: Operational Overview: Mining Contractor
Operational Overview Mining Contactor • Exact Mining appointed in Mid 2009 - 5 year contract • Mining fleet to include: - 1900 Hitachi Excavator - 4 x 777 Caterpillar Haul trucks - 3 x D10 Dozers - 1 x D9 Dozers - 16H Grader - 345 Caterpillar Excavator - Water Cart • Predominantly fixed rate contrac
Slide 23: Project Overview: Dozer Trap
Project Overview Dozer Trap Red loam White strand • Ore pushed by dozer into mobile mining unit plant (dozer trap) • 200m x 100m ore blocks • MUP capacity – Up to 1400 tph • Slurry (-10 mm) pumped to wet concentrator plant • Secondary screening at concentrator (-2 mm)
Slide 24: Operational Overview: Wet Concentrator Plant
Operational Overview Wet Concentrator Plant • Fit for purpose concentrator relocated from Georgia • Utilisation in keeping with equipment re-use and risk mitigation • Significant capex saving • Onsite storage capacity for HMC of 60,000 tonnes under stackers • Higher current stockpile – reflects inte
Slide 25: Operational Overview: Processing
Operational Overview Processing • On site processing of ore into a Heavy Mineral Concentrate (“HMC”) • Ore slurry sent by pipeline to WCP - current distance of 1 km, extending to 7 kms for Ambrosia • WCP capacity of 1000 tonnes per hour - rateable to produce up 120 tonnes of HMC per hour • Waste slu
Slide 26: Operational Overview: Transportation
Operational Overview Transportation • HMC transported 270km by road to Port Thevenard • Portion of Ooldea Road upgraded to high quality unsealed • New 40km section to connect Ooldea Road to Eyre Highway • B -Triple 96 tonnes trucks, approximately 18 per day • Transport provider – Kalari • Approx 30
Slide 27: Operational Overview: Transportation
Operational Overview Transportation • Long term contractual arrangement to utilise ABB / Viterra ship loading facilities at Port of Thevernard • 40,000 tonnes storage facility at Port Thevenard • Time charter shuttle vessel established - payload of 25,000 tonnes - 16 day round trip to Geraldton, Wes
Slide 28: Jacinth Ambrosia Workforce
Jacinth Ambrosia Workforce • 100 operational personnel on site • Fly-in-fly-out from Ceduna / Adelaide • Roster - 8 days on 6 days off for fixed plant operators and Professionals - 2 weeks on 1 week off for Mining Contractor • Employment policy - employee collective agreement established pre July 20
Slide 29: Jacinth-Ambrosia Current Focus
Jacinth-Ambrosia Current Focus Current Priorities • Maintaining our safety and environmental performance of nil LTI’s and environmental breaches • Focus on reducing operating costs now operating is in steady state (eg: flocculent) • Establishment of strategic HMC stockpile at Narngulu – accelerate H
Slide 30: Iluka Exploration - Eucla Basin
Iluka Exploration - Eucla Basin • Definitions Peter Benjamin • Mineral Sand Deposit Formation • Mineralisation Types General Manager Exploration • Eucla Basin Exploration Overview May 2011 • Exploration Plan for 2011 • Exploration Techniques
Slide 31: (Heavy Mineral) Definitions
Closing Slide Closing Statement (Heavy Mineral) Definitions
Slide 32: Definitions : Heavy Minerals
Definitions : Heavy Minerals Heavy minerals are those with an SG > 2.9 t/m3 VHM : Valuable heavy minerals…those that are worth something! Titanium is the 9th most abundant element Forms of titanium • Rutile ~ 94-96% TiO2 • Leucoxene ~ 65->90% TiO2 • Pseudorutile ~ 60-65% TiO2 • Altered Ilmenite ~ T’
Slide 33: Mineral Sand Deposit Formation
Closing Slide Closing Mineral Statement Sand Deposit Formation
Slide 34: Mineral Sand Deposit Formation
Mineral Sand Deposit Formation CRYSTALLINE HINTERLAND (Mineral Sand Source) COA STA L PL AIN LON GS HO RE DR IFT OLDER SEDIMENTS
Slide 35: Mineral Sand Deposit Formation Stage 1
Mineral Sand Deposit Formation Stage 1 Period of fair weather builds up beach from sediments brought down by rivers. Mineral sands grains scattered through the quartz sand grains - background grades of less than 0.5% H.M. OLDER SEDIMENTS
Slide 36: Mineral Sand Deposit Formation Stage 2
Mineral Sand Deposit Formation Stage 2 CYCLONIC STORMS Large waves, massive erosion, large volumes of quartz moves offshore, “Heavy minerals” are left behind, placer forms OLDER SEDIMENTS
Slide 37: Mineral Sand Deposit Formation Stage 3
Mineral Sand Deposit Formation Stage 3 FAIR WEATHER AFTER STORMS During period of fair weather quartz moves back onshore - beach rebuilds and placer buried - preserved MINERAL SAND PLACER OLDER SEDIMENTS
Slide 38: Mineral Sand Deposit Formation Stage 4
Mineral Sand Deposit Formation Stage 4 The sea retreats leaving beach sediments behind which later become buried under river and lake sediments RIVER & LAKE SEDIMENTS MINERAL SAND PLACER OLDER SEDIMENTS
Slide 39: Mineralisation Types
Mineralisation Types Y ILUKA
Slide 40: Types: The Strand
Types: The Strand Douglas, Murray Basin • Typically represent fossilized and buried beaches • Often occur as multiple occurrences, i.e. Strand Plains • Typically well defined edges, long (>kms), width (~100-300 metres) and thickness (2-5 metres) • High grade concentrations of 15-30+% HM and 50-90% V
Slide 41: Types: The Dunal
Types: The Dunal North Stradbroke Island • Consists of vegetated, massive parabolic dunes at or near sea level • Multiple dune-building periods coinciding with Pleistocene glacial maximums ranging from 300,000 – 20,000 years BP • Typically gradational grade boundaries (onion skin) long (>10 kms), wi
Slide 42: Types: Combined Strand and Dunal
Types: Combined Strand and Dunal Jacinth Mine – Line 5776 X Section 0 500m 1000m 0m 10m W E 20m 30m Heavy Mineral Contours – Laboratory HM% 1-3%HM 3-20%HM 20-80% HM J:\DRAFT\PwrPOINT\MINSANDS\MS_AUST\SA\SA_005.ppt
Slide 43: Eucla Basin Exploration Overview
Eucla Basin Exploration Overview
Slide 44: Tenement Location Plan
Tenement Location Plan Transcontinental Railway Atacama Jacinth& —* Ambrosia “ Typhoon Eyre Highway Dromedary Legend @ Mineral Occurrences [| lluka Tenements Z YA lluka Applications 20691 8v01
Slide 45: 2011 Eucla Basin By Area and Budget
2011 Eucla Basin By Area and Budget 2011 All Tenements & Applications (Approx. Area March 2011) 4% 2% 6% 28% Eastern Region Eucla Basin Perth Basin Other International 60% Budget 2011 12% 4% Perth Basin 26% Project Generation (HM) 25% Eucla Basin* Murray Basin Corp 33%
Slide 46: Exploration Overview
Exploration Overview • Two stage, green and brown fields exploration strategy (Oct’ 09) • Exploration Statistics (from 2004) - $33M expensed, compared with commitments of $20M - 337,000 metres of drilling - 2010 Actual: A$8.0M in Eucla Basin • Five resources (14 Mt HM), four other occurrences (10 Mt
Slide 47: Significant Projects Results: Typhoon Prospect
Significant Projects Results Typhoon Prospect • Discovered in July 2007 1 • ~ 3.0km long by ~0.5km wide • 4km from Jacinth Concentrator • Ilmenite dominated assemblage 1 Typhoon Discovery reported to ASX 5th July 2007
Slide 48: Significant Project Results: Typhoon Inferred Resource
Significant Project Results Typhoon Inferred Resource and Type Section South West North East
Slide 49: Atacama: HM within 9km of Concentrator
Atacama HM within 9km of Concentrator Table 1: Atacama Mineral Resource (>5% HM cut-off grade) In Situ HM Assemblage * Mineral Material HM HM Clay Resource Tonnes Tonnes Ilmenite Zircon Rutile (%) (%) Category (Million) (Million *(%) (%) (%) s) Inferred 29.2 3.3 11.3 7 75 15 2 Includes leucoxene, wh
Slide 50: Atacama Section Line
Atacama Section Line 4 ILUKA Legend _ Atacama - Line +YTaAN = P S = S S To) 8 @ 8 2 x on xt eo 2 =) E7KkEB 8 8 Es &e ly (2) APNE 2 & cS en cael iw 4 g = a ( <x ies _| —— 1.5m @ 7.9%||6m @ 6.3% “/. 7.5m @ 16.5%| |6m @ 9.3% 1.5m @ 18.9% 6m @ 18.3% 12m @ 7.7% [_]>1% HM 7.5m @ 10.3% 3m @ 6.3% [> 3% HM M
Slide 51: Eucla Basin Exploration Plan for 2011
Closing Slide Closing Statement Eucla Basin Exploration Plan for 2011
Slide 52: Eucla HM Exploration Overview 2011
Eucla HM Exploration Overview 2011 • Similar levels to 2010 program • ~63,000m of drilling planned including 51,000m exploration planned • ~$7.5M proposed budget for Eucla HM exploration • 1.5 Track drill rig for 9 - 10months (continuous drilling)
Slide 53: 2011 Activity Summary
2011 Activity Summary ILUKA Brownfields Exploration Phase 2 Radiometries Complete ‘Typhoon Indigenous Survey EYRE HIGHWAY A ven a ees 011 Drill Program Status c= [4 Complete . Active Work Future work BAY bat Soest N EUCLA BASIN r¢ Da A 2011 | Pa resmestes ee Activity Summary amma | —_—m HM Resources
Slide 54: Environmental Update
Environmental Update • No significant Environmental issues in 2010 • November Audit by PIRSA and DENR ~ no issues • Predator access survey indicates exploration tracks do not encourage travel by feral animals • New approval process PEPR (Program for Environmental Protection & Rehabilitation) • Exten
Slide 55: Barton Rehabilitation
Barton Rehabilitation ILUKA
Slide 56: Exploration Techniques
Closing Slide Closing Statement Exploration Techniques
Slide 57: Exploration Techniques: Target Generation
Exploration Techniques Target Generation
Slide 58: Exploration Techniques: Initial Reconnaissance
Exploration Techniques Initial Reconnaissance
Slide 59: Exploration Techniques: Initial Reconnaissance (cont)
Exploration Techniques Initial Reconnaissance (cont) Looking for: • HM slicks • Favourable geology
Slide 60: Perth Basin Use of Digital Terrain Modelling
Exploration Techniques Perth Basin Use of Digital Terrain Modelling Eneabba Cataby Capel
Slide 61: Murray Basin Aeromagnetics (modelled)
Exploration Techniques Murray Basin Aeromagnetics (modelled)
Slide 62: Exploration Techniques: Drilling
Exploration Techniques Drilling
Slide 63: Further information
Closing Slide Further information: Dr Robert Porter, General Manager, Investor Relations +61 3 9600 0807 robert.porter@iluka.com www.iluka.com Closing Statement