Lehating Investor Presentation March 2012
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Transcript of Lehating Investor Presentation March 2012
Investor Presentation Point
Contents
4 Manganese Market
3
1 Executive Summary
Project Overview
2 Company Overview
LocationInvestment Highlights
Premium Product
High grade lumpy Wessels manganese ore adds furnace Value-In-Use and is essential in terms of required manganese units when producing high grade ferro-manganese alloys
DFS in process DFS currently being prepared by TWP with completion by Q2 2012
Typical Ore body
Mine design is very similar to neighbouring BHP Wessels mine and Nchwaning mine with standard room and pillar mining
Logistics Solution on track
Capacity designed to accommodate Trasnet allocation with potential to increase production
Lehating accepted by Transnet as a long term allocation process qualified customer to export on the Hotazel-Port Elizabeth rail corridor
Quality Resource and Long life project
13 Mt @ 48% Mn for a >15 year mine life Low phosphorous and sulphur
Company Highlights
Key Investment PointsStrong Long Term Manganese Fundamentals
Experienced Management Team
High Grade Resource
Secure Marketing
BFS being prepared by TWP
Independent Review of Resource Completed
Qualified Participant on Transnet Rail Expansion
Strong support from potential lenders
Contents
4 Manganese Market
3
1 Executive Summary
Project Overview
2 Company Overview
Overview Lehating Mining (Pty) Ltd is a South African company which owns a 100% interest in the
Lehating Manganese Project (“Lehating or “the Project” ) located in the Kalahari Manganese Fields of the Northern Cape.
Phase 1 drilling commenced in October 2006 with all exploration work completed in 2011.
Lehating has a SAMREC compliant high-grade manganese ore resource of 13 million tons grading 48% Mn
Potential to increase resources to 30 million tons by including adjacent properties which could be mined from Lehating’s mine and plant infrastracture
Competent Person Report completed
Bankable feasibility study by TWP projects to be completed by Q2 2012
Corporate Structure
Lehating Mining
(Pty) Ltd
Traxys Projects
(18%)
Founders* (64%)
Workers Trust*(5%)
TWPI* (13%)
* - BEE shareholders comprise ~29% of Lehating Mining.
9
Traxys
•Traxys is a global leader in marketing, distribution and financial services for the mining, metals and minerals industries. Traxys is a privately owned corporation headquartered in Luxembourg with more than 23 offices around
the world. Traxys provides an array of financial and commercial services to its customers, all with the objective of lowering risk, reducing working capital requirements, achieving speed to market, and bringing transparency to a
transaction. •Traxys has annual revenues of $6 billion, operates under five divisions covering over 74 products and has Lines of credit in excess of $1.5 billion with major international banks.
Major Institutional Shareholders
TWP
•The TWP group (owned by Basil Read) is one of the largest South African based contractor/consulting groups. The value of projects currently under TWP management exceeds R80-billion and parts of their project pipeline extend beyond 2016. Income going forward is largely secured, with funds already committed to many of these projects•TWP Holdings strategy is to add value to their clients’ businesses along the full spectrum of the mining value chain, from concept to closure. TWP are the biggest mining sector consultancy in Africa, with a group staff complement exceeding 1,500 multi-disciplinary professionals and administrative personnel.
LeadershipCharles Sambo
Charles Sambo is a mining engineer and is the Chief Executive officer of Lehating Mining. Charles has 19 years' experience in general management, operations
management, and project finance within the mining industry. Charles has most recently served as Chief Operations Officer of Wesizwe Platinum Ltd and has
held the positions of General Manager Mining of Metallon Gold, and Analyst at Rand Merchant Bank. He holds a BEng in Mining, MSc in Mining, an MBA, and
has completed an International Executive Development Programme at Insead Business School. He is registered with a Mine Managers Certificate of
Competency.
Nico Hager
Nico is a legal consultant with more than 20 years' corporate and mining law experience. He is a director of PlatChrome ((Pty)) Ltd and was a mining rights
advisor to BHPBilliton for many years.He holds B.Juris LLB degrees and a National Diploma in Deeds RegistrationSolly Nkosi
Solly Nkosi is a chemical engineer and the Operations Manager of DMS Powders which forms part of the Siyanda Resources Group of companies Solly is
experienced in operations and production management gained in the chemical and metalliferous industries.Solly is a director of Afmelo Investments (Pty) Ltd, a
South African black empowerment investment company, and most recently also served as the Human Resources and Industrial relations manager of DMS
Powders. He holds a BSc degree in Chemical Engineering, and a Bachelors degree in Business Administration and an MBA. He is a Six Sigma operational excellence
Master Black Belt. Solly is currently busy with his DTech in Industrial Engineering. Through Afmelo Investments, Solly is the appointed voting representative in
Lehating Mining (Pty) Ltd to represent the interests of the Lehating employee and social development trusts.
Dean Cunningham
Dean Cunningham is the Chief Executive Officer of TWP Investments Limited and an Executive Director of Basil Read Corporate Finance which both form part of
the Basil Read Group of companies. Dean is experienced in all aspects of mining, corporate finance, equity markets and research experience. Over the course of
his career to date, Dean has held key positions in all these fields, notably as Director and Head of Mining Research for Investec Securities Limited and Head of
Equity Sales at Nedbank Securities. For several years he also operated his own mining research and financial advisory company. Dean, who holds a BSc Honours
in Mining Engineering and is a stock broker member of the JSE, is also an accredited rough and polished diamonds expert.Tim Mosey
Tim Mosey is the Managing Director of Traxys Projects LP, a specialized investment arm of the Traxys Group, a global leader in the marketing and sourcing of
metals, minerals and energy products to a wide range of mining and industrial partners. Experienced in all aspects of mineral development from exploration to
production, Tim most recently served as Vice President of Resource Capital Funds and as an international mining consultant for SRK Consulting. Tim holds a BSc
in Geological Engineering and an MSc in Mining Engineering.
Contents
4 Manganese Market
3
1 Executive Summary
Project Overview
2 Company Overview
BHP Mamatwan (38 – 40%Mn)
BHP (old)Hotazel(38 – 40%Mn)
UMK project(±40%Mn)
Kalagadi Mn project(38 – 40%Mn)
BHP Wessels(44 - 46%Mn)
Assmang Nchwaning(44 - 48%Mn)
Assmang Gloria(39%Mn)
Lehating(44 - 48%Mn)
Lehating Project Overview
Lehating is located in the world reknown Kalahari Manganese Field
Surrounded by the major manganese producers
Lehating represents one of the few remaining high grade manganese deposits
Manganese mineralisation at 260m depth
Orebody width of 5.4 – 6.8m
Final SAMREC compliant resource statement complete
Key Statistics and Production ForecastBase Case DFS Upside Case
Tonnes Processed 540,000 960,000
Recoveries 80% 85%
Saleable Product 432,000 816,000
Capital Cost $100m $120m
Mine-gate Operating Costs ($/dmtu) $1.57/dmtu $1.50/dmtu
Logistic Costs ($/dmtu) $1.85/dmtu $1.85/dmtu
Total costs ($/dmtu) $3.42/dmtu $3.35/dmtu
Long Term Mn Price ($/dmtu) $6.00/dmtu $6/dmtu
Lehating will be a low cost producer with production commencing in 2015
2015 2016 2017 2018 2019 20200
100
200
300
400
500 Base Case Production Profile
tons
000
's
1. In-situ grade used.Source: Company announcements.
5 15 25 35 45 20%
25%
30%
35%
40%
45%
50%
55%
Azul
Gravenhage
Otiozondu
Lehating
Emang
Bootu Creek
Resource (Mt)
Mn
Grad
e (%
)
Bubble Size = Recoverable Mn (Mt)Comparable Mn Projects
Lehating is higher grade than all current developing peers
Lehating Orebody
Ground Magnetic Survey
18
MANGANESE GRADE DISTRIBUTION
19
IRON CONTENT
20
SEAM THICKNESS
21
PERSPECTIVE VIEW – FROM SOUTH TO NORTH
22
PERSPECTIVE VIEW SOUTH WEST TO NORTH EAST
23
TWO SHAFTS AND SHAFT INFRASTRUCTURE
Main ShaftDepth – 273mExcavated diameter – 7.5mLined diameter – 6.5m
Vent ShaftDepth – 241mExcavated diameter – 6.1mLined diameter – 5.1m
Contents
24
4 Manganese Market
3
1 Executive Summary
Project Overview
2 Company Overview
Manganese ore uses
26
Manganese and Steel Growth
Source:CRU
Steel drives the demand for manganese
Historical CAGR’s between steel and manganese are consistent
CRU projects strong ore demand growth for manganese ore
27
28
Manganese Ore Grade by ProducerLehating
Global Manganese Reserves
Logistics Solutions
Value in Use of High Grade Ore
Pricing Basics
Source: BHP Billiton
END