Lachlan Star Limited · ASX:LSA
Lachlan Star — Investor Presentation (November 2010)
28 slides from Lachlan Star's investor presentation, Nov 22, 2010
Slide 1: Unhedged Gold Producer
Unhedged Gold Producer Nov 2010 ASX – LSA www.lachlanstar.com.au
Slide 2: Disclaimer
This Document is not a Prospectus nor an Offer to Subscribe for Shares. Lachlan Star and its subsidiaries (“LSA”) makes no representation or warranty (express or implied) as to the accuracy , reliability or completeness of this document. LSA and its respective directors, employees, agents and consul
Slide 3: Acquiring operating Compañía Minera Dayton (CMD) gold mine in Chile
• Acquiring operating Compañía Minera Dayton (CMD) heap leach gold mine in Chile • CMD has produced 830,000 ounces of gold over 15 years • Located immediately adjacent to Teck’s large Andacollo copper gold mine (80,000 tpa Cu and 60,000 ozpa Au) • Exploration target1 range of 1.1 m ounces to 1.7 m o
Slide 4: Acquisition consideration
• Cash deposit in escrow US$1.5 m • Cash payment to vendors on closing US$7.5 m • Shares to vendors on closing US$9.8 m (A$10 m) • Total Consideration at Closing US$18.8 m • Deferred consideration of: • 2.5% of gold produced to Dec 2014 • 25% of gold produced >119koz to Dec 2014 • US$0.5m in Q1 2013
Slide 5: Funding: rights issue, placement and vendor shares
• Cash on hand A$3.4 m • Rights Issue @ 1c A$5.4m • Placement A$5.5 to $6m • Vendor Shares @ 1 c A$10 m • Vendor shares subject to voluntary escrow for 6 months • Small debt or convertible note to be considered for working capital and exploration in early 2011 • Major shareholders and directors supp
Slide 6: Pro forma securities on issue
Security On Issue Securities to Pro Forma Total be Issued Shares 1,079,867,371 1,079,867,371 Rights Issue 539,933,686 539,933,686 Placement 550,000,000 550,000,000 Vendors 1,000,000,000 1,000,000,000 Total 1,079,867,371 2,089,933,686 3,169,801,057 Options: 2c Strike 22,500,000 10,000,000 32,500,000
Slide 7: The transaction will transform Lachlan Star
• The transaction will transform Lachlan Star into a company with: • a 100% interest in a major gold resource in a politically stable country • existing unhedged production of circa 40,000 to 50,000 ounces of gold per annum • an under explored tenement position that has been shown to host major ore
Slide 8: Established mine with long history in prospective location
• Established mine with long history in highly prospective location • 8Mtpa crushing, stacking and elution plant currently operating at 1/3 capacity • 100tpd ball mill and CIL circuit • Circa 30,000 oz of gold in inventory on leach pads • Copper recovery circuit • Water rights in excess of current r
Slide 9: CMD location map
-72E La Serena Coquimbo seaaat (Port) Compania ] Minera Dayton ) Province of Coquimbo > Ql Pacific ARGENTINA Highway ——— Major Road —~— Railway — Drainage | Vina del Mar,* Quilpué—7 "Los Andes ) Valparaiso r as f\ wat = / > 0 20 40 60 80 100km D\SANTIAGO) eae LACHLAN STAR
Slide 10: CMD tenements and pits
Las Loas Pit T Pit Compania Minéra Dayton oe Socorro Pit LACHLAN a STAR ys
Slide 11: Adjacent to Teck Andacollo mine
• Located immediately adjacent to Teck Andacollo mine (100m from Tres Perlas deposit) • Teck deposit hosts resources of 535 Mt grading 0.37 % Cu and 0.12 g/t Au • Limited copper exploration on CMD tenements
Slide 12: CMD Operation
Slide 13: CMD Operation — Los Loas Pit
CMD Operation — Los Loas Pit LACHLAN 2 STAR
Slide 14: CMD Operation — Leach pad
CMD Operation —Leach pad LACHLAN 2 LAN Se
Slide 15: Exploration target of 1.1m to 1.7m ounces of gold
Potential Quantity Potential Grade (g/t Au) (Mt) Project lower upper lower upper Las Loas 8.2 10.9 1.06 1.10 Churrumata 12.1 16.2 0.75 0.76 Tres Perlas 13.5 22.1 0.53 0.54 Chisperos 5.8 7.1 0.55 0.57 Toro 13.3 21.2 0.53 0.55 Socorro 0.5 2.3 0.65 0.80 Totals 53.3 79.8 0.65 0.68 • Exploration target1
Slide 16: Past production peaked at 135,000 oz
Compania Minera Dayton Gold production by year (ozs) 140,000 120,000 100,000 80,000 60,000 40,000 20,000 0 • Past production peaked at 135,000 oz –goal is to return operation to >100,000ozpa producer within 2 to 3 years
Slide 17: CMD exploration targets map
Cero Negro HE Cero Tao Arqueros jor Stuctures EF om Toro Socorro Churrumata Teck Operations Chisperos ros LACHLAN STAR
Slide 18: Mineralisation open at depth and along strike
• Mineralisation open at depth and along strike • Typically only limited by drilling
Slide 19: Mineralisation envelope expands at lower cut-off grades
• As cut off grades reduced, mineralisation envelope expands rapidly • Potential for bulk tonnage resources
Slide 20: Higher grade zones at depth
• Higher grade zones present at depth which may support underground mines •Drilling at depth very limited
Slide 21: Underground mine potential
• Limited historical work indicates the potential for underground mine development • UG Scoping study at Churrumata Norte completed in 2007 indicated potential for a small underground mine •New study and drilling required to confirm the mineralisation and mine plan
Slide 22: Significant exploration potential
• Significant exploration potential –limited exploration in the past 7 years • Limited exploration at depth for high grade veins • Potential for dealing into adjacent tenements to secure additional reserves – only gold plant in the area
Slide 23: 2010 drill program results
Drill Hole Deposit From (m) To (m) Interval (m) Gold Grade (g/t) REC-TR07 Toro 5 15 10 2.28 REC-TR10 Toro 95 103 8 10.5 REC-CHIS09 Chisperos 113 128 15 4.07 REC-CHU05 Churrumata 3 11 8 1.19 55 97 42 0.63 2908 Churrumata 1 8 7 7.31 38 74 36 1.96 2957 Churrumata 90 102 12 3.37 • Small 2010 drill progr
Slide 24: Other assets: Luiri Gold and Bushranger
• Luiri Gold – • 31,092,500 million shares and CDI’s (28%) valued at circa $6 million • Holds gold projects in Zambia (800,000 oz in resources), currently the subject of a tenement dispute with the Zambian government • Large exploration tenements prospective for gold, base metals and iron ore • Bush
Slide 25: Board and management
Mick McMullen Chairman Geologist with 17 years experience in identifying, financing, developing, and mining operations in Africa, Australia, Europe, Asia and South America. Has been an executive director of publicly listed mining companies for over 13 years and been responsible for the development o
Slide 26: Management team
Bob Anderson Group Company Perth based accountant with over 20 years experience in Secretary and CFO financial management of Australian companies. Gaston di Parodi General Manager CMD Chemical Engineer, with 30 years experience in start-up and operation of gold leaching facilities and leaching consu
Slide 27: Competent Person statement
• The information in this report that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Mr Michael McMullen, who is a Member of The Australasian Institute of Mining and Metallurgy. Mr McMullen is employed by McMullen Geological Services Pty Ltd. Mr
Slide 28: Unhedged gold production
Unhedged gold production Exploring in a world class environment , LACHIAN BE STAR ye