JERVOIS PRE-FEASIBILITY STUDY - ABN...
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October 2015 JERVOIS PRE-FEASIBILITY STUDY
Transcript of JERVOIS PRE-FEASIBILITY STUDY - ABN...
October 2015
JERVOIS PRE-FEASIBILITY STUDY
Contents
Corporate Overview P3
Introduction P5
Location Plan P6
PFS Key Metrics P7
Capital Costs P8
Operating Costs P9
Processing Plant Layout P10
Production Schedule P12
Concentrate Production P13
Project Cash Flow P14
Project Schedule P15
Sensitivity Analysis P16
Mineral Resource P17
Ore Reserve P19
Comparative Analysis P20
Site Layout P24
Exploration P27
3D Fly Through P28
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Corporate Overview
ASX CODE KGL
Issued shares 141.5 million
Options 2.8 million
Share Price 14 cents
Market Capitalisation(20 Oct 15) $20 million
Cash (30 June 2015) $4.8 million
Debt Nil
BOARD OF DIRECTORS
Simon Milroy – Managing Director
Chris Bain – Acting Chairman
Brad Ellis – Non-executive Director
John Taylor – Non-executive Director
Denis Wood – Non-executive Director
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Corporate Overview
TOP 4 SHAREHOLDERS
KMP Investments 27.03%
HSBC Custody Nominees (Australia) Limited 11.49%
J P Morgan Nominees Australia Limited 7.35%
Coal Industry Services Pty Ltd 1.80%
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Introduction - Jervois Copper Project
KGL Resources has completed a Pre Feasibility Study on the Jervois Copper Project
A series of open pit and underground mines will feed a 2.2 Mtpa flotation concentrator to produce a copper concentrate.
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Location
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Located on existing mining licenses.
Copper concentrate to be transported by road to Alice Springs then by rail to Darwin for export.
PFS Key Metrics
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LIFE OF MINE Copper Resource 26.7 Mt @ 1.12% Cu and 17 g/t Ag
Lead/Zinc Resource 3.8 Mt @ 0.72% Cu, 3.7% Pb, 1.2% Zn, 68 g/t Ag
Mine Life 8.25 years
Average Annual Production 21,000t Cu + by-products
LOM C1 – Cash Costs US$0.88/lb A$1.26/lb
LOM C3 – Total Costs US$2.13/lb A$3.04/lb
Gross Revenue (net of TC/RC) A$2.4 billion
Operating Cash Flow A$807mPre-Production CapitalCosts A$189.5m
Deferred Capital Costs A$26.7m
NPV A$248m
Payback Period 3.2 years
IRR 35%
Capital Costs
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CAPITAL COST A$
Treatment plant $89.6m
Infrastructure $23.0m
Mining $1.4m
Construction $22.2m
EPCM $19.8m
Owner’s costs $10.2m
Sub-total $166.2m
Contingency (14.0%) $23.2m
Project Total $189.5m
Operating Costs
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COSTS US$ * A$
Mining $0.60 $0.85
Processing $0.58 $0.82
General & Admin $0.11 $0.16
Marketing & Transport $0.68 $0.97
By-products credits ($1.09) ($1.55)
C1 – Cash Costs $0.88 $1.26
Depreciation & Amortisation $1.00 $1.43
NT State Royalties 0.25 0.34
C3 – Total Costs $2.13 $3.04
* Assuming an A$/US$ exchange rate of 0.70
Processing Plant – Copper Only
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Processing Plant – incl. Lead Zinc
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Production Schedule
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Ore
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Reward OP Reward UG Bellbird OP Bellbird UG Green Parrot OP
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Concentrate Production
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Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9
TON
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Copper Lead - Zinc
Project Cash Flow
$(300)
$(200)
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$-
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Yr -2 Yr -1 Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9
A$
mill
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Sales revenue Operating activities Capital investment Rehabiliation Cumulative Cashflow
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Project Schedule
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ACTIVITY 2016 2017 2018
Commence DFS 1Q*
Commence FEED 1Q
Project Award – Start Detailed Design 2Q
Award Long Lead Items 2Q
Engineering & Procurement Completed 2Q
Commence Site Earthworks 3Q
Mechanical Completion 3Q
First Production 4Q
* Subject to financing
Sensitivity Analysis
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ASSUMPTIONS UNIT 2018 20192020
& LOM
A$/ US$ 0.70 0.70 0.70
Copper US$/lb 3.25 3.25 3.25
US$/t 7,165 7,165 7,165
Lead US$/t 2,225 2,257 2,299
Zinc US$/t 2,707 2,727 2,624
Silver US$/oz 19.97 20.39 19.94
Gold US$/oz 1,300 1,311 1,269
A$/US$ EXCH. RATE US$ COPPER PRICE
$2.50 $3.00 $3.25 $3.50 $4.00
IRR (%)
0.75 11% 23% 29% 35% 45%
0.70 17% 29% 35% 41% 52%
0.65 23% 35% 42% 48% 59%
0.60 29% 42% 49% 55% 67%
NPV (10%) * (A$m)
0.75 10 126 184 242 357
0.70 62 186 248 310 434
0.65 122 255 322 388 522
0.60 191 335 408 480 624
Free Cash Flow * (A$m)
0.75 149 343 441 538 733
0.70 238 447 551 655 864
0.65 341 566 678 791 1,016
0.60 462 705 827 949 1,192
* Before interest and tax
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Silver Indicated Silver Inferred Exploration Potential
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Cop
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Copper Indicated Copper Inferred Exploration Potential
Mineral Resource
30.5 Mt @ 1.1% Cu for 327,000 t Cu 30.5 Mt @ 23 g/t Ag for 23 Moz Ag
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Mineral Resource
Copper Resources Category Mt Cu % Ag g/t Pb % Zn % Copper kt Silver Moz Lead kt Zinc kt Cut-offCu%
Marshall Copper Indicated 1.4 1.45 35.6 - - 20.1 1.6 - - 0.5Inferred 0.3 0.90 20.2 - - 2.5 0.2 - - 0.5
Reward Copper Indicated 5.0 1.14 25.3 - - 57.1 4.1 - - 0.5Inferred 7.6 1.02 22.2 - - 78.0 5.4 - - 0.5
East Reward Inferred 2.0 0.82 7.1 - - 16.9 0.5 - - 0.5
Bellbird Indicated 4.1 1.22 7.7 - - 49.9 1.0 - - 0.5Inferred 4.3 1.29 8.5 - - 55.9 1.2 - - 0.5
Cox’s Find Inferred 0.7 0.87 2.8 - - 6.0 0.1 - - 0.5Rock Face Inferred 0.7 0.82 3.1 - - 6.0 0.1 - - 0.5
TOTALIndicated 10.5 1.21 19.8 - - 127.0 6.7 - - -Inferred 16.2 1.06 14.6 - - 172.1 7.6 - - -TOTAL 26.7 1.12 16.6 - - 299.1 14.3 - - -
Lead/Zinc Resources Category Mt Cu % Ag g/t Pb % Zn % Copper kt Silver Moz Lead kt Zinc kt Cut-offCu%
Reward Lead/Zinc Indicated 0.5 0.74 70.7 6.8 0.9 3.6 1.1 33.6 4.4 NoneInferred 0.8 0.51 90.9 8.6 1.2 4.1 2.3 69.4 9.4 None
Green ParrotLead/Zinc
Indicated 0.5 0.99 64.0 0.9 0.6 5.1 1.1 4.7 3.2 0.3Inferred 1.4 0.81 78.0 1.8 0.9 11.1 3.4 24.4 12.8 0.3
Bellbird North Inferred 0.7 0.57 17.9 1.7 2.5 3.8 0.4 11.3 16.7 0.2
TOTALIndicated 1.0 0.87 67.3 3.8 0.8 8.7 2.2 38.3 7.6 -Inferred 2.8 0.67 67.6 3.7 1.4 19.0 6.2 105.1 38.9 -TOTAL 3.8 0.72 67.5 3.7 1.2 27.7 8.4 143.4 46.5 -
2015 Combined TOTAL 30.5 327.0 22.6 143 47
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Ore Reserve
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COPPER RESERVES CATEGORY MT Cu % Au g/t Ag g/t Pb % Zn %
Bellbird Probable 3.4 1.20 0.12 7.4 0.02 0.05
Marshall-Reward Probable 5.0 1.07 0.26 25.0 0.22 0.21
TOTAL Probable 8.4 1.12 0.20 17.9 0.14 0.14
LEAD/ZINC RESERVES CATEGORY kT Cu % Au g/t Ag g/t Pb % Zn %
Bellbird Probable 239 0.57 0.03 20.0 2.27 3.04
Marshall-Reward Probable 205 0.91 0.20 62.7 5.38 0.83
TOTAL Probable 444 0.77 0.13 45.49 4.13 1.72
Source: SNL Mining & Metals, Terra Studio. Most recent mineral resources available, copper only. Bubble size according to copper metal contained.Excluded mines and projects: Carrapateena, Cobar, DeGrussa, Golden Grove, Northparkes, Olympic Dam, Stockman
Australian Copper Mines and Projects
Nifty
TrittonSulphur Springs
EloiseMount Oxide
Mt Gordon
Mt GunsonJervois Osborne
Prominent HillMt Lyell
Mutooroo
MaroochydoreHorseshoe Lights
White RangeEinasleigh
KanmantooE1-MonakoffLady Annie
HuckittaMount Isa (HMX)North Portia
Mt ElliottHillsideCloncurry
BrownsMary Kathleen
Rocklands
Kalkaroo
Nanadie WellStavelyWalford CreekCoulston Lakes
Bushranger
Copper Hill
Temora
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Cop
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Mineral Resources (tonnes, log scale)
Underground OP+UG Open Pit
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$0
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Cap
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Capital Intensity of Selected Projects
Producer In Construction Feasibility / Financing Source: Terra Studio, Wood Mackenzie
Low Capital Intensity
JERVOIS
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Long Term C1 Cost Curve
Jervois C1 Cost US88¢/lb
US
¢/lb
Source: Terra Studio, Wood Mackenzie. Highly probable and probable mines only
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Negative C1 costs here are due to high by product credits
Weighted Average: 0.53% Cu
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Cop
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Copper Contained in Resources (Mt)
Size and grade of undeveloped copper projects
First Quartile Second Quartile Third Quartile Fourth Quartile
Source: SNL Mining & Metals, Terra Studio. Undeveloped copper projects with more then 250,000t of contained copper metal (open pit only)
Global Grade Ranking
JERVOIS 1.12%
Source: SNL Mining & Metals, Terra Studio. Undeveloped copper projects with more then 250,000t of contained copper metal (open pit only)
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Reward Prospect Looking South
Outcropping Copper Mineralisation
REWARD MARSHALL COX’S FIND GREEN PARROT ROCKFACE BELLBIRD
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Green Parrot & Marshall Reward
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Bellbird & Bellbird North
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Exploration
• Soils and RAB results highlight new prospects
• DHEM commenced at Rockface and Green Parrot
• Extension of 3D IP
– All holes targeting chargeability anomalies intersected copper mineralisation
• Gravity Survey – high density targets due to:
– Mineralisation (copper/lead/zinc sulphides)
– Alteration (magnetite/garnet)
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3D Project Fly Through
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Play Movie Movie is available at www.kglresources.com.au
Forward-Looking Statements:This presentation includes certain “Forward-Looking Statements”. All statements, other than statements of historical fact, included herein, including without limitation, statements regarding forecast cash flows and potential mineralisation, resources and reserves, exploration results and future expansion plans and development objectives of KGL Resources are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements.
SIMON MILROY • +61 7 3071 9003• [email protected]• www.kglresources.com
Level 7, 167 Eagle StreetBrisbane, QLD 4000AUSTRALIA
ASX CODE: KGL
For more information contact
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Competent Person Statement
The Jervois Resources information and Exploration Potential were first released to the market on 29 July 2015 and complies with JORC 2012. The company confirms that it is not aware of any new information or data that materially affects the information included in the original market announcement and that all material assumptions and technical parameters underpinning the estimates in the relevant market announcement continue to apply and have not materially changed. The company confirms that the form and context in which the Competent Person’s findings are presented have not been materially modified from the original market announcement.’
The Jervois Reserves information was first released to the market on 16 October 2015 and complies with JORC 2012. The company confirms that it is not aware of any new information or data that materially affects the information included in the original market announcement and that all material assumptions and technical parameters underpinning the estimates in the relevant market announcement continue to apply and have not materially changed. The company confirms that the form and context in which the Competent Person’s findings are presented have not been materially modified from the original market announcement.’
The Jervois Pre-feasibility information was first released to the market on 16 October 2015 and complies with JORC 2012. The company confirms that it is not aware of any new information or data that materially affects the information included in the original market announcement and that all material assumptions and technical parameters underpinning the estimates in the relevant market announcement continue to apply and have not materially changed. The company confirms that the form and context in which the Competent Person’s findings are presented have not been materially modified from the original market announcement.’
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