Sandfire Resources Ltd · ASX:SFR
Sandfire Resources — Sydney Mining Club (June 2012)
33 slides from Sandfire Resources's conference presentation, Jun 7, 2012
Slide 1: A position of strength
For personal use only A position of strength Start of copper shipments marks transition to production and cash-flow Karl Simich, Managing Director Sydney Mining Club, 7 June 2012
Slide 2: Important Information and Disclaimer
Important Information and Disclaimer Forward-looking statements and Competent Person’s Statement Competent Person’s Statement • The information in this public presentation that relates to Exploration Results and Mineral Resources is based on information compiled by Mr John Evans who is a Fellow of F
Slide 3: Sandfire – the vision
Sandfire – the vision A mining company focused on shareholder returns • To deliver superior returns to our owners from the premier For personal use only high-grade DeGrussa VMS copper-gold mine • To discover additional VMS deposits within the emerging Doolgunna mineral field • To explore for, develo
Slide 4: Sandfire Snapshot
Sandfire Snapshot A position of strength and opportunity For personal use only • Discovery to production: less than 3 years • Delivered key project milestones on time and on budget: • Open pit operations and DSO shipments underway • Construction and development approaching completion • Plant commiss
Slide 5: Sandfire Snapshot – Reasons to invest
Sandfire Snapshot Reasons to invest • Quality: For personal use only • High-grade resource: one of Australia’s stand-out greenfields discoveries • Experienced corporate, development and operations teams • Strength: • High-margin production of 77ktpa copper in first three years • $4.2 billion revenue
Slide 6: Copper Market
Copper Market Demand strong, supply weak, grades falling, stocks short For personal use only Source: Brook Hunt – a Wood Mackenzie Company Source: Brook Hunt – a Wood Mackenzie Company • Copper demand outlook remains robust • Supply constrained by declining global copper grades, increasing costs of
Slide 7: Project – key facts
DeGrussa Project – key facts Mining operation taking shape • 900km NE of Perth, established mining district For personal use only • Open pit and underground operation: +7 year life • 100% debt funded through $390M financing facility • Conventional 1.5Mtpa on-site concentrator • Life-of-mine extracti
Slide 8: Hitting the milestones: First DSO mined
DeGrussa – hitting the milestones First DSO mined in February 2012 For personal use only 8
Slide 9: Hitting the milestones: Open pit well advanced
DeGrussa – hitting the milestones Open pit well advanced with 6.5M bcm mined to date from Stage 1 and 1.2M bcm from Stage 2 For personal use only 9
Slide 10: Hitting the milestones: DSO shipments underway
DeGrussa – hitting the milestones Shipments of DSO now underway with product sales agreements in place For personal use only First shipment of 6,600t of DSO chalcocite grading 30% Cu 10
Slide 11: Hitting the milestones: First ore to SAG Mill
DeGrussa – hitting the milestones On track for first ore to SAG Mill in Q3 of CY 2012 For personal use only Underground: Massive Sulphide Mineralisation at C1 footwall contact 11
Slide 12: Hitting the milestones: Process plant on schedule
DeGrussa – hitting the milestones Process plant on schedule for commissioning late Q3 2012 For personal use only 12
Slide 13: Hitting the milestones: Concentrator crusher and ROM
DeGrussa – hitting the milestones Concentrator crusher and ROM For personal use only 13
Slide 14: Hitting the milestones: Accommodation village and airstrip
DeGrussa – hitting the milestones 600-person accommodation village and airstrip for up to 100-seat aircraft operating For personal use only 14
Slide 15: Hitting the milestones: Concentrate sales process
DeGrussa – hitting the milestones Concentrate sales process well underway – product in demand For personal use only 15
Slide 16: Development timetable
DeGrussa – development timetable All key milestones achieved on schedule and on budget For personal use only Pre-Feasibility Definitive Feasibility Study Achieved Project Financing Achieved Infrastructure Construction Achieved Major Equipment Achieved Concentrator Construction Open Pit Achieved Dire
Slide 17: Annual grade and C1 cost profile
DeGrussa – annual grade and C1 cost profile Exceptional grades underpin strong margins For personal use only 17
Slide 18: Annual grade and C1 cost profile
DeGrussa – annual grade and C1 cost profile Exceptional grades underpin strong margins For personal use only • Optimised project cash flows • Higher grades + lower C1 costs in first three years = increased cash flow 18
Slide 19: Growth Potential – Oxide copper testwork
DeGrussa – Growth Potential Oxide copper testwork For personal use only • Oxide copper resources in open pit being stockpiled for later processing: • 44,000t of contained copper • 56,000oz of contained gold • Positive results from metallurgical testwork – further testwork continuing • Objective is t
Slide 20: Growth – future catalysts
Growth – future catalysts Strong focus on organic and external growth opportunities • Organic growth – exploration success: For personal use only • Extensive bank of information now accumulated within prospective DeGrussa mine corridor • Prospective corridor extended to +30km, providing outstanding
Slide 21: Mineral Field – regional exploration
DeGrussa Mineral Field – regional exploration Premier 400 sq km land-holding in emerging copper province: first-mover advantage For personal use only 21
Slide 22: Unlocking the “Corridor of Riches”
DeGrussa – unlocking the “Corridor of Riches” Minimal exploration conducted along +30km long prospective corridor For personal use only + 30km strike length prospective for VMS mineralisation • 30km long, 1.2km wide prospective corridor which can be explored to +2km vertical depth • Of this, only 1.
Slide 23: Global VMS camps
Global VMS camps Major source of global copper production from VMS cluster deposits • Most significant VMS deposits occur in clusters that For personal use only define major mining camps – major source of global copper, zinc, lead production, e.g. • Bathurst (New Brunswick) – 229.8Mt @ 0.46% Cu, 7.6
Slide 24: DeGrussa is a VMS deposit
DeGrussa is a VMS deposit Four lenses of mineralisation typical of a VMS deposit cluster For personal use only • Classic host sequence of intra-volcanic sediments • Typical seafloor alteration with regionally extensive litho-geochemical signature • Classic VMS sulphide textures, including remnant ch
Slide 25: Potential of global VMS camps
Potential of global VMS camps VMS districts generally contain 4-20 deposits, with an average of 12 deposits Volcanic District No. of Deposits Million Tonnes Ore Million Tonnes Metal Area of District (km²) For personal use only Hokuroku, Japan 18 90 6.2 720 Bathurst No1, Canada 12 180 15.1 880 Bathur
Slide 26: Sandfire Summary
Sandfire Summary A new mining company in the making For personal use only • Open pit production underway • Overall project development nearing completion • Concentrator commissioning in Q3 2012 • High-margin production profile • Exceptional cash flow • Exploration to establish a VMS copper-gold camp
Slide 27: Appendix: Competent Person’s Statements
Appendix: Competent Person’s Statements Competent Person’s Statement – Mineral Resources For personal use only • The information in this report that relates to Mineral Resources (except the Indicated Resource of Supergene Chalcocite) is based on information compiled by Diederik Speijers who is a Fel
Slide 28: A position of strength
For personal use only A position of strength Start of copper shipments marks transition to production and cash-flow Karl Simich, Managing Director Sydney Mining Club, 7 June 2012
Slide 29: Appendix – Sandfire: Corporate Information
Appendix – Sandfire: Corporate Information • Issued capital: 151.1M ordinary shares, 9.7M options For personal use only • Market capitalisation: ~$1.1 billion (at $7.50/share) • Key project: DeGrussa (Doolgunna) • Strategic partner: POSCO • Product customers: POSCO, Yunnan Copper, MRI Board Derek La
Slide 30: Appendix – DeGrussa: Financial Evaluation and Price Assumptions
Appendix – DeGrussa: Financial Evaluation and Price Assumptions Life-of-mine (LOM) For personal use only $ Billion Project revenue 4.2 Royalties (5% weighted average) (0.2) Operating costs and sustaining capital (1.6) Project operating cash flow (pre-tax) 2.4 Pre-production capital expenditure (0.4)
Slide 31: Appendix – DeGrussa: Capital and Operating Costs
Appendix – DeGrussa: Capital and Operating Costs For personal use only Capital Cost Breakdown A$M Construction (plant, equipment and infrastructure) 267 Open pit mining to access DSO 44 Underground mine development 56 Other pre-production 17 Total pre-production capital 384 Life-of-Mine Operating Co
Slide 32: Appendix – DeGrussa: Mineral Resources
Appendix – DeGrussa: Mineral Resources Table 1: DeGrussa Copper-Gold Project – March 2011 JORC Resource Statement For personal use only Resource Contained Contained Gold Competent Zone Location Tonnes (Mt) Copper (%) Gold (g/t) Category Copper (t) (oz) Person Gold Measured Open Pit 0.14 - 1.5 - 7,00
Slide 33: Appendix – DeGrussa: Ore Reserves
Appendix – DeGrussa: Ore Reserves Table 2: DeGrussa Copper-Gold Project – March 2011 Ore Reserve Statement For personal use only Reserve Contained Gold Deposit Mining Method Tonnes (Mt) Copper (%) Gold (g/t) Contained Copper (t) Category (oz) DeGrussa Probable Open Pit - DSO 0.14 25.6 2.5 37,000 12,