Sandfire Resources Ltd · ASX:SFR
Sandfire Resources — Merger or Acquisition (June 2019)
31 slides from Sandfire Resources's merger presentation, Jun 25, 2019
Slide 1: Sandfire to Acquire MOD Resources: Building a Global Mining Company
to acquire BUILDING A GLOBAL MINING COMPANY Karl Simich, Managing Director and CEO of Sandfire / Julian Hanna, Managing Director of MOD Investor Presentation 25 June 2019 Access this presentation here or http://www.sandfire.com.au SANDFIRE RESOURCES NL | MOD RESOURCES LIMITED
Slide 2: Important Information and Disclaimer
Important Information and Disclaimer This presentation has been prepared by Sandfire Resources NL and MOD Resources Limited. This document contains background information about Sandfire Resources NL and MOD Resources Limited current at the date of this presentation. The presentation is in summary fo
Slide 3: Sandfire to Acquire MOD Resources
Sandfire to Acquire MOD Resources Strengthening Sandfire’s Global Copper Development and Exploration Pipeline + Value Accretive T3 project NPV of A$309m1 versus acquisition cost of A$167m2 Upside Potential Highly prospective land-holding on the underexplored Kalahari copper belt – 11,700km2 Leverage
Slide 4: Contents
Contents 1 Transaction Detail 2 Strategic Rationale 3 MOD Metrics 4 Sandfire Pro-Forma 5 MOD Overview 6 Sandfire’s Vision for MOD 7 In-Country Operations 8 About Botswana 9 Indicative Timetable SANDFIRE RESOURCES NL | MOD RESOURCES LIMITED Slide: 4
Slide 5: Transaction Detail
1 Transaction Detail1 • Sandfire Resources NL (“Sandfire”) to acquire MOD Resources Limited (“MOD”) via a Scheme of Arrangement (“Scheme”) Overview • MOD is a dual ASX and LSE-listed mining company whose flagship asset is the T3 project in Botswana (refer to Section 5 for details) • 100% consolidati
Slide 6: Strategic Rationale
2 Strategic Rationale MOD is a Compelling Strategic Fit for Sandfire Value Accretive Significant value potential from regional exploration underwritten by the value of T3 Belt-Scale Province Highly prospective, dominant land-holding on the under explored Kalahari copper belt (11,700km2) Near-Term Pr
Slide 7: Complementary Strengths
2 Complementary Strengths “A combination of SFR and MOD leverages both companies’ strengths to tap the full potential of T3 and future discoveries” – Sandfire MD Karl Simich BALANCE SHEET PROSPECTIVE LANDHOLDING Sandfire brings financial capacity to fund 11,700km2 on the underexplored development an
Slide 8: Benefits For MOD Shareholders
2 Benefits For MOD Shareholders “The MOD Board considers the implementation of a Scheme with Sandfire to reflect a compelling value proposition for MOD shareholders” – MOD MD Julian Hanna • 45% to the closing price of A$0.310 per share on 24 June 2019 Attractive • 45% to the 20-day VWAP of A$0.310 p
Slide 9: Sandfire's Strategic Acquisition Criteria
2 Sandfire's Strategic Acquisition Criteria Regional Potential Production Mine Life Highly prospective, >5 Years >30ktpa Cu dominant landholding T3 production averages T3 mine life on on the underexplored over 30ktpa3 for first 7 existing reserves of Kalahari copper belt years of full production >11
Slide 10: MOD Metrics
3 MOD Metrics Belt Scale Province Dominant Landholding in Botswana Near-Term Production Long Life Project First 2 Life Of 2 1 Production 2021 Mine >11yrs ~11,700 km2 LOM 3 Contained 2 Production 28ktpa Reserve 343kt Botswana Compelling Low Cost / Low Capital Investment Attractiveness6 Value Proposit
Slide 11: Sandfire Pro-Forma – An Emerging Global Mining House
4 Sandfire Pro-Forma – An Emerging Global Mining House The MOD Acquisition Adds the EMEA1 Region to Sandfire’s Global Portfolio Sandfire EMEA Sandfire APAC Sandfire Americas Developing / Producing Assets T3 (100%) DeGrussa & Monty (100%) Black Butte (86%) 11,700 km2 6,674 km2 86 km2 LOM Avg Cu LOM A
Slide 12: Pro-Forma Project Pipeline
4 Pro-Forma Project Pipeline T3 Adds a Near-Term Development Project to Sandfire’s Growth Pipeline Exploration Resources / Feasibility Development Operating Enigma Morck Well Temora Black Butte Peak Hill DeGrussa A4 White Rock T1 T3 Monty T4 Thaduna Cobar The T3 project complements Sandfire’s develo
Slide 13: Forecast Copper Supply Deficit
4 Forecast Copper Supply Deficit T3 Production From 2021 to Benefit From the Forecast Copper Supply Deficit Copper Production Capability and the Future Supply Gap1 (Mt Cu) 26 T3 Production Brownfield contribution Available from base case mines 24 Demand for mine production capability (refined metal)
Slide 14: Pro-Forma Reserves and Resources
4 Pro-Forma Reserves and Resources (Pro-Forma) Monty Monty 12% Copper 27% Ore Reserves by Asset1,2,3,4 299kt 343kt 642kt 53% 34% (kt Cu) 73% T3 100% DeGrussa DeGrussa T3 Monty Green Dragon/ T1 Other Monty Thaduna 6% Temora 8% 9% Copper 9% 4% Temora DeGrussa 31% Mineral Resources 14% 42% 10% DeGrussa
Slide 15: Pro-Forma Relative Positioning
4 Pro-Forma Relative Positioning Market Capitalisation1 (A$m) Copper Reserves3 (contained Cu, Mt) 4.2 3,307 2.2 2.1 2,078 2,029 1,258 1,128 0.9 0.6 0.6 0.5 514 348 0.3 0.3 262 94 ERO 2 Sandfire Atalaya Capstone Sandfire (PF) Imperial MOD Hudbay ERO Sandfire Atalaya Sandfire (PF) Imperial Capstone MO
Slide 16: MOD Overview – Belt-Scale Exploration Opportunity
5 MOD Overview – Belt-Scale Exploration Opportunity Underexplored Belt Scale Opportunity Across the Kalahari Copper Belt Significant Landholding (~11,700km2)1 • Sedimentary-style copper deposits2 Prospective • Similarities to Zambia2 Region Cupric Canyon: Zeta NE • Mineralisation hosted in domes Cup
Slide 17: T3 Project Overview
5 T3 Project Overview1 Open Pit Copper Development Project With >11 Year Life T3 March 2019 Feasibility Study • 6 stage single open pit mine plan Mine Plan Ore Tonnes Mined 34.4Mt • Designed to partly defer CAPEX Average Grade (Cu) 1.0% Copper in Concentrate 318.4kt Concentrate Grade (Cu) 30.4% Reco
Slide 18: T3 Project Overview (continued)
5 T3 Project Overview (continued) T3 Reserves & Resources T3 Site Layout4 Tonnes Copper Silver Ore Reserves1 (Mt) (%) Kt (g/t) Moz Proven - - - - - Probable 34.4 1.0 342.7 13.2 14.6 Total 34.4 1.0 342.7 13.2 14.6 Process Plant Mineral Tonnes Copper Silver Resource2 (Mt) (%) Kt (g/t) Moz Indicated 36
Slide 19: Mythbusting the Boseto Comparison
5 Mythbusting the Boseto Comparison T3 Orebody is Lower Strip, Shallower, Wider and Protected from Oxidation T3 Boseto Government • Botswana’s Government and local community has a long history of supporting mining Relations operations and development in the region Understanding of • T3 studies have
Slide 20: Sandfire's Vision for MOD
6 Sandfire’s Vision for MOD Optimisation & Unlock the Belt-Scale Community Centric Construction of T3 Opportunity Focus to Development • Optimise T3 as the first • Increase and accelerate • Exploration and development cornerstone regional asset exploration spend to unlock the activities continuing t
Slide 21: MOD's Experience Retained
6 MOD’s Experience Retained Perth-Based Team In-Country Team • Managing Director of MOD since 2013 • In-country representative of MOD since 2011 and • Former Managing Director of Western Areas (12 years) Executive Country Manager since 2018 • Qualified geologist with over 35 years experience • Quali
Slide 22: Local Relationships, Workforce and Sustainability
6 Local Relationships, Workforce and Sustainability Building on Strong Local Relationships Sandfire’s Values • MOD has generated strong stakeholder engagement and local support • In-country management and operations to be retained with Tshukudu Metals and Tshukudu Exploration as in-country operating
Slide 23: In-Country Operations and Community Engagement
7 In-Country Operations and Community Engagement In Country Operating Companies Community Engagement • Ghanzi based Senior Community Relations Manager • Strong ongoing stakeholder engagement and support • Firm commitment to training and employment • Firm commitment to in-country procurement and serv
Slide 24: About Botswana
8 About Botswana Botswana is a World-Class, Stable and Attractive Mining Jurisdiction Country Snapshot • #1 in Africa, #32 in the world for investment attractiveness3 above NSW, VIC, Attractive TAS3 Mining • Politically stable democracy2 T3 Maun • Sound economic growth since independence in 19662 In
Slide 25: Indicative Timetable
9 Indicative Timetable Event Indicative Date First Court Hearing Late August Scheme Meeting Early October Second Court Hearing Mid October Effective Date Mid October Record Date Mid October Targeted Implementation Date Late October SANDFIRE RESOURCES NL | MOD RESOURCES LIMITED Slide: 25
Slide 26: Appendix
Appendix SANDFIRE RESOURCES NL | MOD RESOURCES LIMITED Slide: 26
Slide 27: Competent Person's Statements
Competent Person’s Statements DeGrussa and Monty Mineral Resource The information in this report that relates to Mineral Resources is based on information compiled by Mr Callum Browne who is a Member of The Australasian Institute of Mining and Metallurgy. Mr. Browne is a permanent employee of Sandfi
Slide 28: Competent Person's Statements
Competent Person’s Statements T3 Mineral Resource The information in this news release that relates to Mineral Resource estimates (excluding prior estimates) is based on and fairly represents information and supporting documentation compiled by Dr Matthew Cobb; an employee of CSA Global Pty Ltd. Dr
Slide 29: Competent Person's Statements
Competent Person’s Statements T3 Ore Reserve The information in this announcement that relates to Geological Data and the T3 Mineral Resource described in this release is reviewed and approved by Mr Bradley Ackroyd, BSc (Hons), Manager Mine Geology for MOD Resources Ltd. Mr Ackroyd is a registered m
Slide 30: Competent Person's Statements
Competent Person’s Statements T3 Ore Reserve (continued) The information in this announcement that relates to geochemistry, civils (waste stockpiles and the TSF) and the T3 Mineral Resource described in this release is reviewed and approved by Mr David Morgan, BSc Civil Engineering, MSc Irrigation E
Slide 31: Registered Office and Principal Place of Business
Sandfire Resources NL MOD Resources Limited Registered Office and Principal Place of Business Registered Office and Principal Place of Business Level 2, 10 Kings Park Road First Floor, 1304 Hay Street West Perth, Western Australia 6005 West Perth, Western Australia 6005 T +61 8 6430 3800 T +61 8 932
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