Iron Road Ltd · ASX:IRD
Iron Road — Non-Deal Roadshow (June 2013)
29 slides from Iron Road's roadshow presentation, Jun 26, 2013
Slide 1: Entitlement Offer: Securing the Pathways to Production
For personal use only Entitlement Offer Securing the Pathways to Production Shortfall Investor Road Show June 2013 9072674/1
Slide 2: Disclaimer
For personal use only Disclaimer Forward-Looking Statements This presentation contains forward looking statements concerning the projects owned by Iron Road Ltd. Statements concerning mining reserves and resources may also be deemed to be forward looking statements in that they involve estimates bas
Slide 3: Iron Road Overview
For personal use only Iron Road Overview • Iron Ore developer focused on the Central Eyre Iron Project (“CEIP”) in South Australia – Largest magnetite resource (Measured+Indicated) in Australia with 3.7 billion tonnes @ 16% Fe* – Completing a definitive feasibility study (“DFS”) with 20 Mtpa 67% iro
Slide 4: Corporate Overview
For personal use only Corporate Overview Total Enterprise Value at issue price of $0.18 Board of Directors In millions Current Proforma Peter Cassidy Non-executive Chairman Shares 291 582 Julian Gosse Non-executive Director Notional Market Cap (A$) 52.4 104.7 Ian Hume Non-executive Director Cash @ (
Slide 5: Investment Highlights
For personal use only Investment Highlights CEIP Globally • Within top 20 magnetite projects worldwide significant project • Largest (Measured+Indicated) magnetite resource in Australia Robust resource • CEIP Resource stands at 3.7 billion tonnes at 16% iron* • Exploration target at CEIP of 2.8-5.7B
Slide 6: CEIP - History
For personal use only CEIP - History • Commenced drilling in September 2008 after the IPO in June 2008 • Maiden resource of 110Mt @ 19% Fe announced August 2009 • Exploration target of 2.8-5.8 Bt @ 18-25% magnetite Gneiss defined in September 2009 • 12.4 Mtpa ‘base case’ project with capex of A$2.6
Slide 7: CEIP Resource Statement
For personal use only CEIP Resource Statement CEIP Global Mineral Resource Tonnes Fe SiO2 Al2O3 P Location Classification (Mt) (%) (%) (%) (%) Measured 2,222 15.69 53.70 12.84 0.08 Murphy South/Rob Roy Indicated 474 15.6 53.7 12.8 0.08 Inferred 667 16 53 12 0.08 Boo-Loo Inferred 328 17 52 12 0.09 To
Slide 8: Large scale long life project
For personal use only Large scale long life project 3,000 Largest Measured+Indicated magnetite Mineral Resource in 2,500 Australia, underpins long life M+I Resources - tonnes (millions) operation: 2,000 • Mineral Resource 3.7 billion tonnes @ 16% Fe* Resource Category 1,500 Measured (tonnes) • Explo
Slide 9: CEIP Prefeasibility Study Outcomes
For personal use only CEIP Prefeasibility Study Outcomes* • 12.4 Mtpa iron product (67% Fe) • A$2.59 billion capex – A$1.74 billion directs – A$0.51 billion indirects – A$0.34 billion contingency • A$59/t opex plus state royalty *See ASX announcement dated 14 June 2011 9
Slide 10: CEIP Prefeasibility Study Outcomes
For personal use only CEIP Prefeasibility Study Outcomes • Open cut mining with a 0.8 strip ratio • Simple, proven, off the shelf processing – Coarse grind size of -106µm • Transport to port via a slurry pipeline • Mining based on Murphy South resource of 0.9 billion tonnes @ 17% Fe – The total CEIP
Slide 11: Progress since Prefeasibility Study
For personal use only Progress since Prefeasibility Study PFS DFS Production 12.4 Mtpa 20 Mtpa Transport method Slurry pipeline Rail Resource 1.2 billion tonnes @ 17% Fe 3.7 billion tonnes @ 16% Fe* Port Sheep Hill (third party facility) Cape Hardy Capex A$2.59 billion TBD *Full Resource outlined at
Slide 12: Economic and Competitive Advantages
For personal use only Economic and Competitive Advantages Mining Processing Rail Port Low strip ratio of 0.8:1 Common and proven Significantly shorter than Sheltered, deep location mechanical process Pilbara and Brazilian routes with short jetty = reduced Off-the-shelf technology capital cost Off-th
Slide 13: Mining
For personal use only Mining • Large scale conventional mining – standard drill, blast, load, haul operations • PFS “base case” open cut mining operation, low strip ratio of 0.8 to 1 (ratio of waste to ore) • Proven, off-the-shelf equipment Typical excavator Cat 6090, 980 tonne machine 13
Slide 14: Processing
For personal use only Processing • After mining, ore upgraded by on site concentrator • Process consists of crushing, grinding and magnetic separation – Common process, not new technology – Mechanical processes, not chemical • After separation, ore is stockpiled for load-out onto trains • Proven, of
Slide 15: Premium Grades, Lower Processing Costs
For personal use only Premium Grades, Lower Processing Costs Comparison of Australian magnetite deposits 72 VMC-Yalgoo CEIP high grade (higher revenue) 70 ARH-Balmoral coarse grind (higher margin) Concentrate Grade - % iron AGO-Ridley GRR-Southdown 68 GBG-Karara CXM-Bungalow CXM-Fusion ACS-Magnetite
Slide 16: Rail and Utilities
For personal use only Rail and Utilities • Project will utilise standard gauge railway • Technical review of potential rail routes • Significantly shorter than Pilbara and Brazilian routes • Alignment preference is to bypass towns • Rail corridor to be utilised for other infrastructure – power, wate
Slide 17: Deep Water Port
For personal use only Deep Water Port • Cape Hardy offers sheltered, deep water with no dredging or breakwater required • 1.6km modular jetty/wharf structure • 30Mtpa capacity at commissioning • Handymax, Panamax and Capesize capable • 1,100ha land secured, potential third party access • Easy and co
Slide 18: CISRI Test Work Shows Excellent Results
For personal use only CISRI Test Work Shows Excellent Results • Bulk test programme at the prestigious China Iron & Steel Research Institute Group (CISRI), Beijing • Concentrate performs well in both sintering and pelletising • Product readily substituted for Brazilian Fines, Pilbara Fines or Chines
Slide 19: Gawler Iron Project
For personal use only Gawler Iron Project Potential for small 1-2Mtpa development that may provide early sustaining cash flows • Iron Road 90% • Average in situ grades ~25% iron, with higher grade zones of ~36% iron • Initial metallurgical study of several composite samples indicates excellent benef
Slide 20: Gawler Conceptual Plant Layout
For personal use only Gawler Conceptual Plant Layout • Modular plant layout, designed for rail transport • ~25km from Trans- Australian rail with connection to bulk ports • Dry process flow sheet, reducing costs • Tests indicate high quality iron concentrate with similar characteristics to CEIP 20
Slide 21: Iron Ore Market
For personal use only Iron Ore Market 21
Slide 22: The World Needs More Iron Ore
For personal use only The World Needs More Iron Ore Demand to 2020 China is expected to produce around • China continues to grow – rate slowing but 1 billion tonnes of steel per year by 2025, expected to be positive for the rest of the up from 735 million tonnes currently decade • Consumption off hi
Slide 23: Magnetite Operations
For personal use only Magnetite Operations • Have become the ‘black sheep’ of the Australian iron ore industry • Reputation impugned by DSO incumbents and failures of project management, not necessarily quality or size of deposit • Not all ores are created equal – WA’s difficult to process banded ir
Slide 24: The Future for Iron Road
For personal use only The Future for Iron Road • Feasibility studies for both projects funded Feasibility Study funding secured • Provides Iron Road robust platform from which to engage with potential project partners and finance providers • Largest Measured+Indicated magnetite Mineral Resource in A
Slide 25: Entitlement Offer Overview
For personal use only Entitlement Offer Overview Iron Road is undertaking a 1:1 non-renounceable entitlement offer to raise approximately $50.7 million (after expenses), at $0.18 per share (“Entitlement Offer”) • Entitlement Offer positions Iron Road to successfully transition to project financing a
Slide 26: Details of the Offer
For personal use only Details of the Offer • 1 for 1 non-renounceable Entitlement Offer to eligible shareholders raising approximately $50.7 million after expenses Structure • Issue of approximately 291 million shares • Offer price of $0.18 per New Share represents: Price • 21.1% discount to 60 day
Slide 27: Use of Funds (after expenses)
For personal use only Use of Funds (after expenses) Entitlement Offer total $50.7 million Central Eyre Iron Project DFS mining and processing studies $8.0 million Infrastructure studies, including rail, port, water and power requirements $13.0 million Marketing, other minor studies and study managem
Slide 28: Timeline
For personal use only Timeline Announcement of the Entitlement Offer Thursday, 13 June 2013 Ex-date Monday, 17 June 2013 Record Date (7pm AEST) Friday, 21 June 2013 Despatch of Offer booklet and Entitlement and Acceptance Forms Tuesday, 25 June 2013 Entitlement Offer opens Tuesday, 25 June 2013 Enti
Slide 29: Risk Factors
For personal use only Risk Factors You should be aware that there are risks associated with an investment in Iron Road. These can be categorised as specific risks (that is, matters that relate directly to Iron Road’s business) and general risks (those that relate to the business in general). Some of