Diggers & Dealers Presentation · • Strong global demand growth since the early 2000s •...
Transcript of Diggers & Dealers Presentation · • Strong global demand growth since the early 2000s •...
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MOLYMOLYMOLYMOLYMOLYMOLYMOLYMOLYMMMMIIIINNNNEEEESSSSMMMMIIIINNNNEEEESSSSLIMITEDLIMITED
Diggers & Dealers Presentation5 August 2008
Mike GloyneMike GloyneMike GloyneMike Gloyne - General Manager Operations
Diggers & Dealers Presentation5 August 2008
Mike GloyneMike GloyneMike GloyneMike Gloyne - General Manager Operations
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This presentation includes “forward-looking statements” as that term within the meaning of securities laws of applicable jurisdictions.
Forward-looking statements involve known and unknown risks, uncertainties and other factors that are in some cases beyond Moly Mines’
control. These forward-looking statements include, but are not limited to, all statements other than statements of historical facts
contained in this presentation, including, without limitation, those regarding Moly Mines’ future expectations. Readers can identify
forward-looking statements by terminology such as “aim,” “anticipate,” “assume,” “believe,” “continue,” “could,” “estimate,” “expect,”
“forecast,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “risk,” “should,” “will” or “would” and other similar expressions.
Risks, uncertainties and other factors may cause Moly Mines’ actual results, performance, production or achievements to differ materially
from those expressed or implied by the forward-looking statements (and from past results, performance or achievements). These factors
include the failure to complete and commission the mine facilities, processing plant and related infrastructure in the time frame and
within estimated costs currently planned; variations in global demand and price for molybdenum and copper; fluctuations in exchange
rates between the U.S. dollar and the Australian dollar; failure to recover the resource and reserve estimates of the Project; the failure
of Moly Mines’ suppliers and service providers to fulfil their obligations under construction, supply and tolling agreements; unforeseen
geological, physical or meteorological conditions, natural disasters or cyclones; changes in the regulatory environment, industrial disputes,
labour shortages, political and other factors; the inability to obtain additional financing, if required, on commercially suitable terms; and
global and regional economic conditions. Readers are cautioned not to place undue reliance on forward-looking statements. We assume no
obligation to update such information.
Forward Looking StatementsForward Looking Statements
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Investment HighlightsInvestment Highlights
Spinifex Ridge Molybdenum ProjectSpinifex Ridge Molybdenum Project
Attractive location, environmental approval received and final Part
IV/works approvals in process, 70% of capex awarded/ready to award
plus, mining, roasting and off take contracts executed.
Sustained sector outlook with continuing strong demand,
constrained supply and strong price fundamentals.
Poised to become the 1st major new primary Mo producer, with 23
year Reserve mine life with substantial resource tail.
Operating contracts provide cost certainty. Substantial by-product
credits.
20Mtpa to 33Mtpa expansion potential year 5.
Significant potential Project credits from iron ore mineralisation.
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World Class PartnersWorld Class Partners
Spinifex Ridge Molybdenum ProjectSpinifex Ridge Molybdenum Project
Incentive based EPCM agreement for project
delivery and execution.
ThyssenKrupp (Polysius) – (Primary Crusher, Ball Mills, HPGR’s),
Metso – (Secondary Crusher), Ausco – (Village Accommodation)
Molymet, the worlds largest independent
toller of Mo concentrates,
ThyssenKrupp, volume and
cashflow certainty,
7 year mine operations agreement.
Global managers of the debt and equity
funding package for Spinifex Ridge,
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Mineral / Ore Reserves & Mineral ResourcesMineral / Ore Reserves & Mineral Resources
Spinifex Ridge Molybdenum ProjectSpinifex Ridge Molybdenum Project
JORC/NI43-101 classification Mt Mo% Cu% Ag g/t
Proven reserves 199.7 0.06 0.10 1.5
Probable reserves 251.1 0.04 0.07 1.1
Total 450.8 0.05 0.08 1.3
JORC/NI43-101 classification Mt Mo% Cu% Ag g/t
Measured resources 206.8 0.06 0.10 1.5
Indicated resources 445.4 0.04 0.07 1.1
Total 652.2 0.05 0.08 1.3
Inferred resources 399.0 0.04 0.07 1.1
Reserves
Resources
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Services corridorServices corridor
Secondary
Crusher
Secondary
Crusher
StockpileStockpile
Ball & SAG
Mills
Ball & SAG
MillsHPGR MillHPGR Mill
Power StationPower Station
AdministrationAdministration
Tailings
Thickener
Tailings
Thickener
Mo / Cu Regrind &
Flotation
Mo / Cu Regrind &
Flotation
Waste 3Waste 3
Waste 2Waste 2
Waste 1Waste 1
PitPit
ROMROM Plant &Administration
Plant &Administration
Dry Stack TailingsDry Stack Tailings
CampCamp
Pit Office/Workshops
Pit Office/Workshops
Port Hedland (160kms)
NorthNorth
TunnelTunnel
Construction ReadyConstruction Ready
Spinifex Ridge Molybdenum ProjectSpinifex Ridge Molybdenum Project
23 Year Reserve+ Resource tail
10 Year
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Execution & Development TimetableExecution & Development Timetable
Spinifex Ridge Molybdenum ProjectSpinifex Ridge Molybdenum Project
Q1
20072007
Q2 Q3 Q4 Q1
20082008
Q2 Q3 Q4 Q1
20092009
Q2 Q3 Q4 Q1
20102010
Q2 Q3 Q4
• Long Lead Items Ordered
• Feasibility Study Completed
• Capital Cost Control Est.
• Key Contract Completion
• Environmental Approvals
• Project Funding
• Site Construction Activities
• Commissioning
• Production
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What is Molybdenum?What is Molybdenum?
Spinifex Ridge Copper/Molybdenum Producer
Crushing, Grinding, Flotation
Crushing, Grinding, Flotation
Lubricants, Chemicals, Mo Metal
Bags, Drums, Cans
Bags, Drums
Low Cu Concentrate
High Cu Concentrate
TechnicalMolybdenum Oxide
Pure Oxide Oxide Powder and Briquettes
FeMo
LeachingRoasting
Sublimation and Further Processing
Converting
Molybdenum Output Flow-Chart Highlights
• Moly is primarily used as an alloying
agent in steel or as a catalyst in
chemicals
• Moly offers very attractive properties
• Fourth highest melting point of any metal on the periodic table
• Anti-corrosive
• Weldability
• Flexibility
• Hardness
• Low substitution risk
• Unique properties that satisfy increasing performance requirements
• Potential substitutes are more costly and/or follow same commodity cycle
Molybdenum … ‘a metal for our time’Molybdenum … ‘a metal for our time’
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• Stainless and low alloy steels will continue to
grow supporting molybdenum’s traditional
applications.
• BUT….
• The Energy Industry to emerge as a major end
user of molybdenum products
Diversified End-Use Diversified End-Use
Molybdenum … ‘a metal for our time’Molybdenum … ‘a metal for our time’
28%
40%
11%
6%
4%
4%5% 2%
Stainless
Steel
Low Alloy Steels
Chemicals
Moly Metal
Castings
Superalloys
High-speed & tool steels Other
Energy IndustryEnergy Industry Global WarmingGlobal Warming Nuclear PowerNuclear Power
• Pipelines
• Sour oils & gases
(high sulphur)
• Pipelines
• Sour oils & gases
(high sulphur)
• Desalination
• Automobile Industry
• Desalination
• Automobile Industry• Piping
• Shells & tubes
• Piping
• Shells & tubes
ULSDULSD
• Ultra low sulphur diesel
• Catalysts
• Ultra low sulphur diesel
• Catalysts
Energy Industry accounts for 35-40% of global Moly demandEnergy Industry accounts for 35-40% of global Moly demand
Global economies demanding more molybdenum
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• June 2008 Spot Price
• US$33.20 /lb
• 3 Year Average
• US$30.00 /lb
• 5 Year Average
• US$26.10 /lb
• Long Term Estimate
• US$20.00+ /lb
Market HighlightsMarket Highlights
Molybdenum … ‘a metal for our time’Molybdenum … ‘a metal for our time’
PricingSupply and Demand
CAGR Demand Estimates: 5 – 6%
Existing Production Sources Are At Capacity
• Primary mines require capital intensive expansions
• By-product producers have high graded & production stagnant
• Chinese industry consolidating, export quota’s & tariffs applied
• No significant new supply before 2011
• Production costs are rising, energy intensive industry
• New projects are capital intensive
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Growing Supply Defecit Growing Supply Defecit
• Estimated committed supply
growth includes planned
expansions of existing primary
and by-product mines
• Moly consumption is expected to
grow at 5-6% CAGR through
2015
• Cumulative supply deficit of 70-
100Mlb expected by 2012,
growing to 230-300Mlb by 2015
• Short fall in future supply can
only be met by NEW production
from NEW mines
• Only 4 major new primary mines
under consideration to help fill
this deficit
Industry OverviewIndustry Overview
Highlights
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• Western Europe, USA and Japan accounted for 62% of total
consumption in 2007, China consumed 17%
• World CAGR of 6.6% since 2002
• China CAGR of 24% since 2002
• Strong global demand growth since the early 2000s
• Continued strong demand growth from BRIC markets driven by
urbanization, development in stainless, carbon and alloy steels
• China to lead world growth at estimated 12 – 15% CAGR through
2015
• Developing steel industries key growth driver (2006-2012 CAGR of 17%)
• 8-9% growth expected for low alloy steels and chemicals
• Western Europe: Estimated 3 – 4% CAGR through 2015
• Stainless steel represents ~50% of total moly demand
• Automotive industry (low alloy steels) also important contributor to
demand
• Moly bearing grades becoming increasingly popular
• USA: Estimated 2 – 3% CAGR through 2015
• Comparatively even distribution between end segments
• Strong environmental regulations driving growth (chemicals)
HighlightsMoly Consumption Dominated by the Big Four
China is Expected to Drive Demand Growth
China Growth Supported by Stability from WestChina Growth Supported by Stability from West
Industry OverviewIndustry Overview
17%
15%
21%
29%
18%
USA
W Europe
Other
Japan
China
30%
11%
20% 25%
14%
USA
W Europe
Other
Japan
China
~ 2015
2007
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Iron Ore Drilling
Iron Formation
Waste
Mo Pit
Waste
Process Plant
0 1500
metres
Mine Village
Airstrip
Tailings
Fe Area 2Fe Area 2Fe Area 1Fe Area 1
S p i n i f e x
R i d g e
Mining Leases
• 55 metres @ 64.3% Fe from 0m
• 19 metres @ 61.6% Fe from 3m
• 29 metres @ 58.3% Fe from 0m including
• 4 metres @ 63.1% Fe from 0m and
• 11 metres @ 61.2% Fe from 17m
• 18 metres @ 58.3% Fe from 7m including
• 8 metres @ 61.4% Fe from 11m
• 14 metres @ 55.6% Fe from 2m
• 16 metres @ 56.0% Fe from 0m
• 18 metres @ 54.3% Fe from 0m
• 7 metres @ 55.0% Fe from 1m
• 106 metres @ 52.8% Fe from 0m including
• 3 metres @ 65.4% Fe and
• 47 metres @ 65.8% Fe
• 72 metres @ 60.7% Fe from 0m including
• 42 metres @ 66.2% Fe and
• 9 metres @ 60.2% Fe
Iron Ore At Spinifex Ridge Iron Ore At Spinifex Ridge
• Major synergies for the Spinifex Ridge operation
• Potential credits to molybdenum production
• Resource delineation drilling required
Highlights Results
Ju
ne
200
8 R
es
ult
s
General /
Misc. Leases
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MOLYMOLYMOLYMOLYMOLYMOLYMOLYMOLYMMMMIIIINNNNEEEESSSSMMMMIIIINNNNEEEESSSSLIMITEDLIMITED
Shares on issue: 86,191,677
• ASX Listed: 54M
• TSX Listed: 32M
Options: 15,425,000
Fully diluted issued capital: 101,616,677
Board/Staff (inc all options) : 16%
Cash on hand: A$48M
Major Shareholders:
• 19.9% - Harbinger Capital
• 7.2% - CIBC Mellon
• 5.8% - Oppenheimer Funds
Broker Coverage:
• Paradigm Capital Inc.
• Haywood Securities Inc.
• Wellington West Capital Markets Inc.
Trading Symbols:
• ASX: MOL, TSX: MOL, FWB: HJ1
Corporate StructureCorporate Structure
Moly Mines LimitedMoly Mines Limited
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MOLYMOLYMOLYMOLYMOLYMOLYMOLYMOLYMMMMIIIINNNNEEEESSSSMMMMIIIINNNNEEEESSSSLIMITEDLIMITED
• 50 Kings Park Rd, West Perth, WA, 6005, AUSTRALIA
• Telephone: +61 8 9429 3300 Fax: +61 8 9429 3399
Contact informationContact information
• Suite 1801, Level 18,
80 Richmond St West, Toronto, Ontario, CANADA
• Telephone: +1 416 777 1801 Fax: +1 416 777 1802
• Email: [email protected]
• Website: http://www.molymines.com
• Stock market codes: ASX: MOL, TSX: MOL, FWB: HJ1
Moly Mines LimitedMoly Mines Limited
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The information contained in the report to which this statement is attached relating Mineral Resources and Mineral / Ore Reserves is
based on information compiled and verified under the supervision of Dr Derek Fisher who is a Fellow of The Australasian Institute of
Mining and Metallurgy. Dr. Fisher is CEO of Moly Mines Limited and has sufficient experience which is relevant to the style of
mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as
defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’ and as a
Qualified person for purposes of National Instrument 43-101 of the Canadian Securities Administrators.
Dr Fisher consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.
The Mineral Resource estimates was prepared under the supervision and based on information compiled by Mr Phil Jankowski, MAusIMM
(CP), who is an employee of SRK Consulting and has been engaged by Moly Mines Limited in such capacity. Mr Jankowski has sufficient
experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is
undertaking to qualify as a Competent Person as defined in the 2004 edition of the Australasian Code for Reporting Identified Mineral
Resources and Ore Reserves (JORC Code) and as a Qualified person for purposes of National Instrument 43-101 of the Canadian Securities
Administrators. Mr Jankowski consents to the inclusion in this release of the matters based on his information in the form and context in
which it appears. The grades were estimated by SRK into the block model by Ordinary Kriging. Geological data verification and QA/QC of
the drill hole results were described in the report titled “Spinifex Ridge Mo-Cu Deposit, Western Australia, Updated NI 43-101 Technical
Report” prepared by SRK and filed on SEDAR in May 2008.
Ore/Mineral Reserves & Mineral ResourcesOre/Mineral Reserves & Mineral Resources
Spinifex Ridge Molybdenum / Copper Competent Person Statement
Spinifex Ridge Iron Ore Competent Person Statement
The information in this report that relates to Exploration Results is based on information compiled by Dr Derek Fisher who is a Fellow of
The Australasian Institute of Mining and Metallurgy. Dr Fisher is Chief Executive Officer of Moly Mines Limited, and has sufficient
experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is
undertaking to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration
Results, Mineral Resources and Ore Reserve’s and as a Qualified Person for purposes of National Instrument 43-101 of the Canadian
Securities Administrators. Dr Fisher consents to the inclusion in the report of the matters based on his information in the form and
context in which it appears.
Moly Mines LimitedMoly Mines Limited