Transforming Gold Mining in South...
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ASX: SWJ
Transforming Gold Mining in South Africa Investor Presentation – July 2016
Transforming Gold Mining in South Africa | 2016
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This Presentation has been prepared by and issued by Stonewall Mining Limited (ASX.SWJ) (Stonewall or Company) is to assist in informing interested parties about the Company and should not be considered as an offer or invitation to subscribe for or purchase any securities in the Company or as an inducement to make an offer or invitation with respect to those securities. No agreement to subscribe for securities in the Company will be entered into on the basis of this Presentation. This Presentation is limited to persons who are sophisticated investors for the purposes of s708(8) or professional investors for the purposes of s708(11) of the Corporations Act 2001 or persons who hold Australian financial services licences and any of their representatives. By attending and/or receiving this presentation you warrant to Stonewall that you are such a person. This Presentation may contain forward looking statements. Whilst Stonewall has no reason to believe that any such statements, forward looking statements and projections are either false, misleading or incorrect, it cannot and does not warrant or guarantee that through either the passage of time or actions beyond the control of Stonewall they will not become so. You should not act and you must refrain from acting in reliance on any of this Presentation material. Nothing contained in this presentation constitutes investment, legal, tax or other advice. This overview of Stonewall does not purport to be all inclusive or to contain all information which its recipients may require in order to make an informed assessment of the Company’s prospects. Before making an investment decision, you should conduct, with the assistance of your broker or other financial or professional adviser, your own investigation in light of your particular investment needs, objectives and financial circumstances and perform your own analysis in order to satisfy yourself as to the accuracy and completeness of the information, statements and opinions contained in this presentation prior to making any investment decision. You must make yourself fully aware and all risks associated with this offering and that you do not rely upon warranties or representations by Stonewall and/or its officers. Neither the Company nor its advisers has verified the accuracy or completeness of the information, statements and opinions contained in this presentation. Accordingly, to the maximum extent permitted by law, the Company makes no representation and gives no assurance, guarantee or warranty, express or implied, as to, and take no responsibility and assume no liability for, the authenticity, validity, accuracy, suitability or completeness of, or any errors in or omissions, from any information, statement or opinion contained in this presentation. The contents of this presentation are confidential. This presentation is being provided to you on the condition that you do not reproduce or communicate it or disclose it to, or discuss it with, any other person without the prior written permission of the Company. This Presentation contains information, ideas and analysis which are proprietary to Stonewall. By agreeing to receive this information you also agree to respect the confidential nature of this entire presentation. Specifically you agree not to reproduce in any manner or distribute any part of the information contained herein without the prior written consent of the Company.
The information in this Presentation that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Daniel van Heerden, who is currently employed as a Director and as Principal Mining Engineer by Minxcon Projects (Pty) Ltd. His qualifications include a B.Eng. (Mining) from the University of Pretoria in 1985 and a M.Com.(Business Administration) from Rand Afrikaans University (now UJ) in 1993. He is a member in good standing of the Engineering Council of South Africa and is registered as a Professional Engineer with registration no. 20050318 as well as a Fellow in good standing of the South African Institute of Mining and Metallurgy with Membership No. 37309 which is a Recognised Overseas Professional Organisation’ (ROPO) included in a list promulgated by the ASX from time to time. He has worked as a Mining Engineer for more than 28 years with more than 15 years directly associated with gold mining specifically..Daniel van Heerden is employed by Minxcon and has sufficient experience which is relevant to the style of mineralization 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’. Daniel van Heerden consents to the inclusion in this Presentation of the matters based on his information in the form and context in which it appears.
Transforming Gold Mining in South Africa | 2016
Disclaimer
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Corporate Overview
LONG TERM DEBTS Beatle Rock A$ 0.45m 8/16 BMIL Loan A$ 0.25m 9/16 Tasman Convertible (fixed $0.009) A$ 1.65m 6/17 APCIG A$ 4.75m 10/16 KEY MANAGEMENT & DIRECTORS George Jenkins CEO and Director of SWM – Metallurgist (Australian/South African) Trevor Fourie Director/Acting Chairman – (Australian) Stephen Gemell Director – Mining Engineer (Australian) Bill Richie Yang, Director (Australian)
COMPANY SECRETARY
Peter Hunt
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ASX code: SWJ
Current share price: AUD $0.013
Market Capitalisation: AUD $23.5
million
(Source: ASX website)
Mineral Resources: 2.99Moz
Free floating shares: 1.81 billion
MAJOR SHAREHOLDERS
Tasman Funds Management Pty Ltd
High Gift Investments Ltd
Best Wealth Winner Ltd
Smart Vision Investment Group Ltd
Khan International Ltd
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Transforming Gold Mining in South Africa | 2016
Immediate implementation of the Pre-Mined Residue Project (PMR)
• In-house project study near completion
• Pre-explored, pre-developed, pre-drilled, pre-blasted material.
• To re-commence production at 40,000 tpm by Q1 of 2017,
• Low all in cash cost with exchange rate advantages.
• Low capital to start utilising existing infrustructure, plant and
processing facilities.
• Short lead time to production.
Compelling Near Term Production Opportunity in South
Africa’s “New” Gold Province
Investment Summary: Exploiting South Africa’s new “Gold Province” outside of the Witwatersrand and Greenstones
• Large fully permitted acreage in prolific gold producing region with large JORC compliant
Mineral Resource of 2.99Moz (see page 39 “Resource Table”)
• Compelling near term PMR project plus Hard Rock projects
• Long term plan for an additional brand new Biox-Plant for a 150,000 – 200,000 oz pa
Operation
• Targeting additional exploration ounces of 0.34 to 3.07 Moz (Hard Rock) plus 0.7Moz to
2.4Moz (PMR) (see tables on page 40 & 41)
• Transforming gold mining in South African
Description Value
All in Sustainable Cost per Tonne (Over Stage One)
US$57/t
All in Sustainable Cost per Tonne 2017
US$42/t
Initial CapEx (20% Contingency) US$15.1m
Stage One LOM 10 Years
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* This is a strategic target only, not a forecast or projection. Refer forward looking statement on page 2.
Exploiting South Africa’s “New” Gold Province Sabie / Pilgrim’s Rest Gold Firlds
TGME – Pilgrim’s Rest / Sabie Mines: Large fully permitted South African Acreage 62000 Ha. (75km North to South and 25km East to West)
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TGME Projects – Locations in South Africa’s “New” Gold Province
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TGME Projects – Locations in South Africa’s “New” Gold Province
Northern
Central
Southern
TGME CIL Au Plant
Three Broad Areas
• Northern
– Resources, PMR targets
• Central – Pilgrim’s Rest Township (Area of Focus for Proposed PMR start up)
– Resources, PMR targets
– CIL Gold Plant,
– Full elution circuit,
– Existing tailing dams on-site
• Southern – Sabie Township
– Resources, PMR targets,
– Existing tailings
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History – Gold Production in South Africa
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• In 1873 the first payable gold field was discovered in South Africa’s Eastern Gold-Fields in the Sabie area,
some 300kms from the Witwatersrand (WITS) which, at the time, had no identity.
• The Sabie-Pilgrims Rest gold-field produced the first genuine gold rush in South Africa. It also produced
the first gold coins (The Burger’s sovereign).
• Around this time, the Transvaal Gold Mining and Estates (TGME) company was born which produced
gold for over 100 years.
• Gold was discovered in WITS in 1886 on farm Langlaagte which later became Johannesburg
• WITS became the largest goldfield in the world and by 1925 made up over 50% of Global gold sales
• Four distinct stages of development on WITS:
o 1880 – 1910 : Discovery to formation of Union of South Africa. Rapid growth with interruption during Boer War
o 1911 – 1951 : Slower rate of growth with interruptions or effects from local and global events (Witwatersrand
Rebellion and First and Second World Wars)
o 1952 – 1965 : Rapid growth through introduction of mines on farther reaches of WITS complex as well as improved
deep mining technologies
o 1966 – Present : Decline in production due to depletion of reserves and increased environmental management
costs of acid mine drainage water and high cost on mining
o Some analysts predict that only 33 years of minable underground reserve left in the WITS fields
The rebirth of the “New” Gold Province in the Sabie-Pilgrim’s Rest Gold Fields.
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Historical Production – the tip of the iceberg
Northern & Central
• 1872 - 1972 : ≈ 4.27 million ounces
• 2005 - 2014 : ≈ 0.23 million ounces
Southern
• 1872 – 1972 : ≈ 2.15 million ounces
• Glynns Lydenburg : ≈ 1.2 million ounces
• Elandsdrift : ≈ 78,000 ounces
Area also produced significant volumes of copper,
silver, superphosphates (fertilizers) and pyrites (for
sulphuric acid production)
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Historical Production – Zoom In
General Area Operations Description Period Ounces
Northern
12 Mines plus alluvial workings 1893 – 1930 152,400
18 mines in the Pilgrims Rest area 1889 – 1972 3,940,000
TGME Mines 2005 – 2014 233,765
Central Graskop Area 1873 – 1958 32,000
Alluvial Workings 1873 - 1958 144, 779
Total 4,502,944
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Historical Production
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General Area Operations Description Period Ounces
Southern
15 Mines in Sabie Area plus alluvial workings
1872 – 1958 2,110,881
Spekboom Alluvial 1873 – 1958 37,179
Other South of Sabie, Rietvlei Mine 1928 - 1933 5,000
Total 2,153,060
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Historical Production: TGME Limited - Established 1896
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• First 20 years above 10 g/t
• Next 45 years around 8 g/t
• PMR has been produced at mining grades of between 8 and 10 g/t mined hence the high value of the material
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History – Stonewall’s TGME (Sabie / Pilgrim’s Rest)
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• The Transvaal Gold Exploration Company was established in 1883
• Company reconstituted as Transvaal Gold Mining Estates Ltd (TGME) and registered as a company on 16 May
1895
• By 1896, all the small workings consolidated and owned and managed by TGME
• Production initially from extensive alluvial diggings followed by open cast mining of oxidized primary reefs then
into underground mining of oxidized reef and then fresh un-oxidized reef
• 1955 TGME acquires Glynn’s Lydenburg Ltd. (in operation since 1898 and now called Sabie Mining (PTY) Ltd).
Sabie is a subsidiary of Stonewall along with TGME
• Between 1895 and 1970 TGME and Sabie Mines produced 5moz of gold at an average recovered grade of 10.35
g/t
• Large-scale Mining ceased in 1971.
• The primary mineralisation characterised by narrow, flat-reefs generally less than a meter thick with grades
from 1-50 g/t
• Typically ore bodies mined in the past had grades of 20-25 g/t over average reef thickness of 40-45 cm (800-
1125 cmg/t)
• The payability of historic development averaged 30% (Fowler, 1968)
• From 1968 to 2010 TGME tenements portfolio were collectively owned and operated by Rand Mines Properties
Limited, Randgold & Exploration Ltd and Simmer & Jack Mines Ltd.
• In August 2010, Stonewall Mining Pty Ltd purchased 100% of the equity in TGME and Sabie Mines
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• PMR discovered in 2013 as part of data review during exploration activities
• Discrepancy identified between milled volumes and volumes of “mined out” stopes. Waste rock dumps should have been larger than what they actually were. Question asked where this material had gone to
• Inspections underground revealed that material had been placed into the mined out stopes
• Sampling and analysis indicated that material had grade, particularly in the fine fractions and the PMR project was born
• Extensive sampling completed in Beta and Poniekranz Mines indicated sufficient grade to pursue conversion into production
• Bulk mining trials completed in early 2015 with lessons learnt for further implementation planning
• Project halted in May 2015 due to illegal strike by workers
• Company recapitalised throughout second half of 2015
• Project reviewed in Q3 of 2015 and revised strategy of risk reduction, extended production timeframes and a broader view on PMR mines available for production implemented
• Internal study is complete. Document currently being finalised
• A PMR resource delineation sampling program scheduled for Q3/Q4 2016, funding required
PMR Project - Introduction
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• Gold deposits that outcropped on surface were mined into the underground sections following gold “veins”
• As the mining progressed into underground sections the stopes were low in height and followed a general 5 phase mining approach
PMR Project – History of PMR Material
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• A stabilised mine area is clean of material, has a retaining “Stonewall” built and is now ready to mine for gold ore
Phase 1 Drill and Blast Ore : The ore is drilled and blasted into void and is ready for high grading through hand sorting
Phase 2 Hand Sorting : Hand sorting removes visible and large sized high grade material leaving a residue
Lighting equipment used for hand sorting was primitive (candle and paraffin headlamps) resulting in an ineffective hand sorting process which also did not cater for effective fines removal. The fines carry the higher values and was left in the stopes
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PMR Project – History of PMR Material
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Phase 4 Drill and Blast Waste : The waste is drilled and blasted into the void and is now ready for packing against “Stonewalls”
Phase 5 Clean Up : The waste is packed against “Stonewalls” and support is put in place for the next cycle of mining
Phase 3 Residue Packing : The residue is packed against “Stonewalls”
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Production for Central Division in proximity of existing Plant and infrustructure:
• Successfully Trialled in 2015
• In house project study completed
• Targeting 40,000 tpm mined, 27,000 tpm milled
• Commissioning of project in Q1 of 2017 and full production by Q2 of 2017
PMR Production Strategy
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Northern
Central
Southern
TGME CIL Au Plant
Mine
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17
20
18
20
19
20
20
20
21
20
22
20
23
20
24
20
25
20
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Beta
Dukes
Browns Hill
Dukes South
Poniekranz
Theta
Clewer
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* This is a strategic target only, not a forecast or
projection. Refer forward looking statement on
page 2.
PMR – Production Chain
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Mining Pre-Concentration
• Two PMR mines operational at 19,500 tonnes per month per mine
• Material pre-concentrated using wet screening.
• 90% of gold concentrated into 68 % of mass.
• Targeted screen size 17mm. • + 17mm discarded. • - 17mm material to plant.
• Target 27,000 tpm of Material from Pre-Concentration step into plant, milled, thickened and processed through CIL plant.
• Once through CIL section gold is recovered in Elution circuit and then smelted into bars for sale.
Processing
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* This is a strategic target only, not a forecast or projection. Refer forward looking statement on page 2.
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PMR Production Data Description Value
Average annual mining volume 445,000 t
Initial Life of project 10 years
Average Mined Grade
Subject to PMR Resource
Delineation Program in
Q3 2016
• Low per tonne unit cost
• Technically of low Risk
• Stage One 10 Year initial life of project developed
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* This is a strategic target only, not a forecast or projection. Refer forward looking statement on page 2.
Transforming Gold Mining in South Africa | 2016
• Low initial Capital requirement
• Sustaining Capital spread over life of project (10 years)
PMR Study Data Description Value
Initial Capital (2016/2017) US$ 15.1 Million
Sustaining Capex (2018 – 2026) US$ 6.1 Million
Total LOM Project Capital Requirement US$ 21.2 Million
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* This is a strategic target only, not a forecast or projection. Refer forward looking statement on page 2.
• The PMR project plan is focussed on maximising mechanisation. The following equipment has been selected :
o Conveyors to clear material from the mine( to replace scrapers used in trial mining)
o Scrapers in stopes to remove bulk of material and transfer onto conveyors (no hand lashing of material)
o Transvac machines to remove bulk of fines and deposit onto conveyors (no hand lashing)
o High pressure water for final clean up of fines and pumping of water and fines out of mine
• Conditions at diferent mines dictate selection of the mechanised equipment for the mining process
• The company owns LHD’s that may be used in some of the sections of some of the mines
• Hydraulic reclamation will also be trialed as a mining technique to be tested in mines with space restrictions of certain mines
– Capital cost is low however operational risk is high hence this technique not being proposed as the mining method commencement of the project; however
– Hydraulic reclamation is expected to reduce capital and operating costs and require fewer personnel. The process will be reviewed after trial mining section is completed
PMR Project – Focussed on Mechanisation
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* This is a strategic target only, not a forecast or projection. Refer forward looking statement on page 2.
• Labour compliment reflects compromise between capital expenditure and operating expenditure
• Investment of additional capital for larger equipment for underground and Pre-Conditioning sections presents opportunity to reduce number of personnel and therefore operating costs. Less shifts required to get same volumes
• Increased capital expenditure on larger equipment should reduce labour requirements and cost.
• Careful,management of labour is intended to mitigate issues that mining companies typically experience with the lower level employees within the workforce
• Remuneration policies have been considered in order to improve productivity e.g. production and performance bonuses
PMR Project – Labour (foundation for years to come)
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Staff Functional Area Salaries Wages Total
Corporate 5 - 5
Finance and Administration 9 - 9
Safety 1 - 1
HR, Training and Health - - -
Environment 3 6 9
Security 1 - 1
Stores 1 1 2
Technical Services - - -
Mining 17 97 114
Maintenance 7 8 15
Pre-Conditioning and Plant 7 43 50
Total 51 155 206
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* This is a strategic target only, not a forecast or projection. Refer forward looking statement on page 2.
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PMR Implementation Schedule
• Mining rights for Beta approved, awaiting official notification from DMR. Amended Mine Works Programme to be submitted to DMR for review currently Hard Rock Mining Proposed
• Mining rights for Dukes approved. Amended Mine Works Programme to be submitted to DMR for review currently Hard Rock Mining Proposed
• Environmental Permitting approved for greater TGME area including PMR project mines
• Future amendments to mining rights and permitting to be completed as part of normal operational processes
• Implementation schedule and assumes fully funded position to run activities concurrently as well as cater for redundancy
• Detailed planning and engineering prior to commencing with capital expenditure
Description M1 M2 M3 M4 M5 M6 M7 M8 M9 M10 M11 M12 M13
Resource Delineation
Drafting, Submission and Approval of
Amended Mines Works Programme for Beta
and Dukes
Detailed Mine Design Beta and Dukes
Detailed Engineering Design Mines and Plant
Mine Equiping
Plant Upgrade/Refurbishment
Commissioning (Gold Sales Commence M10)
Full Production
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* This is a strategic target only, not a forecast or projection. Refer forward looking statement on page 2.
• Market Review shows project is well positioned in South African industry
• Review considered a cross section of mines in WITS and Barberton Areas
PMR Peer Review NOTE: The data below reflects the 2015 costs of the other producers and no escalations have been applied to these mines when considering the comparison
Transforming Gold Mining in South Africa | 2016
Here we are
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* This is a strategic target only, not a forecast or projection. Refer forward looking statement on page 2.
Transforming Gold Mining in South Africa | 2016
Central / Northern Divisions (Pilgrim’s Rest)
• Phase 1
– Bring PMR into production
• Phase 2
– Bring Blyde Tailings dam into production
– New Processing Plant Required, no crushing or milling
• Phase 3
– Bring 5 hard rock mines into production at 10 ktpm per mine
– New Processing Plant Required including crushing and milling
– Mines 1 and 2 will feed new plant
– Second new Processing Plant Required including crushing and milling
– Mines 3 & 4 will feed second plant
– Mine 5 will require crushing and milling and the Tailings plant will be utilised to process this ore
Our Long Term Production Strategy
* This is a strategic target only, not a forecast or projection. Refer forward looking statement on page 2.
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Transforming Gold Mining in South Africa | 2016
Southern Division (Sabie)
• Phase 1
– Bring PMR into production
– New processing plant required
• Phase 2
– Bring Glynns Lydenburg Tailings dam into production
– New Processing Plant Required, no crushing or milling
• Phase 3
– Bring hard rock mines into production at 10 ktpm per mine
– New Processing Plant Required including crushing, milling and BIOX
– Mines 1 and 2 will feed new plant
– Second new Processing Plant Required including crushing and milling and extension to BIOX
– Mines 3 & 4 will feed second plant
– Bring additional tailings into production
Our Long Term Production Strategy
* This is a strategic target only, not a forecast or projection. Refer forward looking statement on page 2.
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Northern / Central - Pilgrim’s Rest
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Production Target Ounces: From PMR to Primary Ore
Southern - Sabie
* This is a strategic target only, not a forecast or projection. Refer forward looking statement on page 2.
Ore source 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
PMR Subject to Proposed Resource Delineation
Tailings - 3,500 4,800 4,000 3,900 2400 - - - -
Primary - - 13,400 28,800 44,200 66,600 77,200 77,200 77,200 77,200
Subtotal (Excluding PMR) - 3,500 18,200 32,800 48,100 69,000 77,200 77,200 77,200 77,200
Ore source 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
PMR Subject to Proposed Resource Delineation
Tailings - - 4,300 4,300 4,300 4,300 4,300 200 - -
Primary - - - 13,400 28,800 44,200 59,700 61,700 61,700 61,700
Subtotal (Excluding PMR) - - 4,300 17,700 33,100 48,500 64,000 61,900 61,700 61,700
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TOTAL – Pilgrims and Sabie
Transforming Gold Mining in South Africa | 2016
Production Target Ounces: From PMR to Primary Ore
* This is a strategic target only, not a forecast or projection. Refer forward looking statement on page 2.
Ore source 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
PMR Subject to Proposed Resource Delineation Tailings - 3,500 9,100 8,300 8,200 6,700 4,300 200 - -
Primary - - 13,400 42,200 73,000 110,800 136,900 138,900 138,900 138,900
Total - 3,500 22,500 50,500 81,200 117,500 141,200 139,100 138,900 138,900
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TGME Gold Fields
• 7 Mining Rights
• 6 Prospecting Rights
• 62,000 Ha in the Eastern Goldfields of South Africa
• 2.99 Moz Au resource (see table on page 39)
• Hard Rock Exploration Target of 0.33 – 3.07 Moz (see table on page 40)
• Estimated PMR material between 0.72 - 2.44 Moz Au (see table on page 41)
• Gold fields divided in Northern (Vaalhoek), Central (Pilgrim’s Rest) and Southern Sections (Sabie)
• Existing plant in Central section
• Proposed future MEGA plant at Sabie
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Sabie/Pilgrim’s Rest – Regional Geological Setting
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Geology • Situated in the Sabie-Pilgrim’s Rest Goldfield where
gold occurs in sedimentary host rocks of the
Transvaal Supergroup.
• TGME mineralization hosted in northeast-striking
disconcordant carbonate reefs in Malmani
Dolomites in flat, bedding parallel shears located
mainly on shale partings.
• Gold mineralization at Rietfontein is hosted in
granites within a shear zone.
• Different operations exploit different reefs in the
area, e.g. Frankfort – Bevett’s and Theta Reefs, Beta
– Beta Reef, Duke’s Hill – Rho Reef. Hermansburg,
DG2 and DG1 target surface gold mineralisation.
• Vaalhoek Rock Dump comprises untreated material
from the historical Vaalhoek Mine. Glynn’s
Lydenburg and Elandsdrift tailings dumps comprise
historically mined out and processed tailings from
various regional gold mines.
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Transforming Gold Mining in South Africa | 2016
Geology – Significant Gold Mineralisation and Reefs’
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Geology continued
Transforming Gold Mining in South Africa | 2016
• Similar sections may be expected in Vaalhoek and Glynn’s Lydenburg Area – horizontal reefs
• Rietfontein represents shear zone gold mineralization in granites rather than the typical carbonate veins – vertical reefs
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Arbitration Update: Shandong Qixing Iron Tower Co.
The Arbitration against Shandong Qixing Iron Tower Co., Ltd is complete, awaiting an award, likely by
end August 2016
Where: Hong Kong International Arbitration Centre
The Claim: US$118.5 million
Costs: Litigation funding Consortium (funded)
• Funders share is 45 percent of a successful claim
• Stonewall retains 55 percent of a successful claim
Key Process and Timeline:
• Stonewall’s Statement of Claim submitted (May 2015)
• Qixing’s Statement of Defense submitted (July 2015)
• Stonewall’s Claimants response submitted (November 2015)
• Qixing’s Response submitted (December 2015)
• Tribunal hearing completed (11 to 14 March 2016)
• Final decision (by 1 September 2016 – as indicated by Tribunal)
• Enforcement through the courts in China (if necessary)
Transforming Gold Mining in South Africa | 2016
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Corporate Chart
Transforming Gold Mining in South Africa | 2016
Stonewall Resources Pty Ltd (ASX: SWJ)
(the “Company”)
Stonewall Mining (Pty) Ltd
(“Stonewall”)
Transvaal Gold Mining Estate (Pty) Ltd
(“TGME”)
Sabie Mines (Pty) Ltd (“Sabie”)
Bosveld Mines (Pty) Ltd (“Bosveld”)
100%
74% 74% 74%
Australian
Parent
South African
Subsidiary
companies
38
(The other 26% interest in the subsidaries are owned by the local BEE groups)
Resources Table – June 2014
Transforming Gold Mining in South Africa | 2016
Mineral Resource
Category
Type of
Operation
Tonnage Gold Grade Gold Content
Mt g/t Kg 000 oz
Measured
UG 0.170
4.77
811
26.1
Surface 0.151
1.59
240
7.7
Tailings 2.294
0.77
1,770
56.9
Total Measured 2.615
1.08
2,821
90.7
Indicated
UG 2.903
5.82
16,902
543.3
Surface 3.173
0.88
2,811
90.4
Tailings 0.012
0.58
7
0.2
Total Indicated 6.088
3.20
19,720
633.9
Total Measured & Indicated 8.703
2.59
22,541
724.6
Inferred
UG 16.151
3.90
63,028
2,026.5
Surface 0.801
0.80
642
20.7
Tailings 2.124
3.06
6,503
209.0
Rock Dump 0.121
1.59
192
6.2
Plant Floats 0.041
0.54
22
0.7
Beta Main 0.109
0.81
88
2.8
Total Inferred 19.346
3.64
70,475
2,266.0
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Further Immediate Exploration Target
Transforming Gold Mining in South Africa | 2016
• Completed first phase of surface exploration at Beta
• 6,601m drilled in 2013/2014, lab testworks halted due to 2014/2015 corporate restructure.
Continued Lab testwork for drill cores planned for Q2 of 2017
• Drilling at Vaalhoek intersected extensive sulphide mineralisation
• Some existing mines characterised by multiple reefs
• Exploration strategy expected to increase resources by an estimated 0.34 Moz to 3.07 Moz
o Glynn’s and Rietfontein reef extensions
o Vaalhoek reef and strike extensions
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Project SW
Minimum
Tonnage
Maximum
Tonnage
Minimum
Grade
Maximum
Grade
Minimum
Ounces
Maximum
Ounces
Cm Mt Mt g/t g/t Moz Moz
TGME Mines:
Vaalhoek 100 3.5 1.0 4.00 3.50 0.12 1.41
Beta 100 3.5 3.5 0.95 3.50 0.11 0.40
Sabie Mines
Rietfontein 100 0.5 3.0 2.02 6.51 0.03 0.63
Glynn's 100 2.5 6.5 1.00 3.00 0.08 0.64
Total 100 10.1 24.1 1.03 3.97 0.33 3.07
The information in this Presentation that relates to Exploration Results, Exploration Targets, Mineral Resources or Ore Reserves is based on information compiled by Daniel van Heerden, who is currently employed as a Director and as Principal Mining Engineer by Minxcon Projects (Pty) Ltd. His qualifications include a B.Eng. (Mining) from the University of Pretoria in 1985 and a M.Com.(Business Administration) from Rand Afrikaans University (now UJ) in 1993. He is a member in good standing of the Engineering Council of South Africa and is registered as a Professional Engineer with registration no. 20050318 as well as a Fellow in good standing of the South African Institute of Mining and Metallurgy with Membership No. 37309 which is a Recognised Overseas Professional Organisation’ (ROPO) included in a list promulgated by the ASX from time to time. He has worked as a Mining Engineer for more than 30 years with more than 20 years directly associated with gold mining specifically. Daniel van Heerden is employed by Minxcon and has sufficient experience which is relevant to the style of mineralization and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Daniel van Heerden consents to the inclusion in this Presentation of the matters based on his information in the form and context in which it appears
Conceptual ounces in the exploration target
Refer forward looking
statement on page 2.
The Exploration Target is
conceptual of nature, with low
confidence and does not
imply a resource
Further Immediate Exploration Target
Transforming Gold Mining in South Africa | 2016
41
Competent Person:
Vaalhoek - the two exploration targets that have been determined from the historical resource block
data. The widths of these target areas are based on the historical blocks with a value greater than 300
cmg/t. The average widths are 750 m and 1 120 m for the two target areas. The extent of the
extension uses a maximum of 1 500 m and a minimum of 500 m which is roughly the width of the
historical mining. This results in a potential tonnage of between 3.55 Mt and 10.96 Mt for the two
target areas. The minimum grade has been based on the lowest category for the historical resource
blocks (0 - 100 cmg/t) and the maximum grade is based on the highest category for the historical
resource blocks (+400 cmg/t).
Beta - The conceptual exploration target is based on the lateral extension of the Beta reef to the
south. The area is estimated to be 983 000 m2 (between the yellow and purple lines). The grade is
expected to range between 95 cmg/t and 350 cmg/t (average of two drill holes in the area; from the
current estimation model in that area).
Refer forward looking
statement on page 2.
The Exploration Target is
conceptual of nature, with low
confidence and does not
imply a resource
Further Immediate Exploration Target
Transforming Gold Mining in South Africa | 2016
42
Competent Person:
Rietfontein - These target areas and ounces are
based mainly on historical resource block information
and the areas that have been targeted are those with
historical resource data indicating values greater
than 300 cmg/t or 3.00 g/t over a stoping width of
100 cm. This "cut off" was used as it is a possible
economic cut off for this type of mining at shallow
depths. The ranges or lateral or down dip extent of
these conceptual target areas are not based on semi-
variogram ranges of the mineralised zones but rather
optimistic forecasts of potential pay areas above 300
cmg/t or 3.00 g/t over a stoping width of 100 cm.
Glynn's - The conceptual exploration targets (best
potential at Glynn's), at Compound Hill and
Malieveld, are based on the historical resource block
data that was available. The lateral extent of these
target areas are based on the historical blocks with a
value greater than 300 cmg/t. The lengths for the
three are 2 160 m, 630 m and 525 m respectively. The
down dip extension is based on a minimum of 200 m
which is approximately the extent of the historical
mining and an average maximum of 500 m which is
the optimistic view. The minimum value has been
based on the lowest category for the historical
resource blocks (0 - 100 cmg/t) and the maximum
value is based on the highest category for the
historical resource blocks (+300 cmg/t).
Refer forward looking
statement on page 2.
The Exploration Target is
conceptual of nature, with low
confidence and does not
imply a resource
Transforming Gold Mining in South Africa | 2016
• Although not yet included in the Company’s resource statement, significant sampling, mapping and accesses to multiple mines (more than 1,500 samples) and testing for both grade and fractional analysis has shown the prevalence of the material across the mines
• The estimation of the conceptual exploration target is based on an in situ grade range of between 1.28 g/t and 2.13 g/t albeit that this may vary from one area to the next
Conceptual PMR Target
Area
Historical
Mined
Area @ 93
%
Minimum
Tonnage
Maximum
Tonnage
Minimum
assumed
Grade
Maximum
assumed
Grade
Minimum
Estimated
Gold
Maximum
Estimated
Gold
Minimum
Estimated
Gold
Maximum
Estimated
Gold
000 000 m² Mt Mt g/t g/t Kg Kg Moz Moz
Northern
Division 1.87 2.55 5.17 1.28 2.13 3,250 10,992 0.104 0.353
Central
Division 4.52 6.15 12.49 1.28 2.13 7,846 26,537 0.252 0.853
Southern
Division 6.54 8.89 18.05 1.28 2.13 11,341 38,359 0.365 1.233
Total 12.94 17.60 35.71 1.28 2.13 22,436 75,888 0.721 2.440
43
Refer forward looking statement on page 2.
The numbers is conceptual of nature, with low confidence and does not imply a resource
Transforming Gold Mining in South Africa | 2016
Conceptual PMR Target
44
Refer forward looking statement on page 2.
The numbers is conceptual of nature, with low confidence and does not imply a resource
Competent Person: PMR Exploration Target Methodology
TGME has undertaken a study on the residual broken rock that historically had been packed in the old mining stopes. The historical mines that were
accessible have been investigated to get an understanding of the potential of the "residue mining" in the historical operations. The investigations
undertaken by the mine personnel at Beta and Theta mine revealed old mining areas packed with broken rock which has been sampled in places.
Grade
• Some 1,500 samples have been taken in such areas. The samples were analysed for gold grade. This sampling was done randomly without
consideration given to obtain a representative sample.
• The grade range of between 1.28 g/t to 2.13 g/t is based upon a 25% variance from the mean of all sampled values combined to achieve a mean
of 1.7 g/t.
Volume
• The area was determined for the individual mines from the historical mining plans and reduced by 7% to account for the open development areas
already existant in the current mining void. All historical mining areas have been assumed to contain material based on the areas investigated
although it was not possible to investigate all the areas due to access restrictions.
• The height of the broken rock has been estimated to range from 80 cm to 120 cm and is based based on stoping widths of 90 cm to 140 cm which
were factorised by a packing of 80% for the stoping width and swelling factor of an additional 5%.
• The density applied to for the residue has been ranged from 1.7 to 2.3 t/m³, and is based upon a variance of 15% from the mean of 2.0 t/m³. It
has been assumed that the broken density of the PMR represents approximately 65% of the possible unmined rock density of the reef (2.7 t/m³).
Content
• Mathematical calculations: – Kg = Tons x Grade /1000
• Kg to ounces conversion factor – 32.15075 ounces/kg
Transforming Gold Mining in South Africa | 2016
Extraordinary Value Proposition
Market Capitalisation – Where are we heading?
$0
$20,000,000
$40,000,000
$60,000,000
$80,000,000
$100,000,000
$120,000,000
$140,000,000
History & Future Value of Stonewall
Debt
MarketCapitalisation
• 2011 Acquiring phase: Market Valuation - AUD90m; Long term debt - AUD Nil
• 2012 Listing phase: Market Cap – AUD108m; Long term debt – AUD4m
• 2013/4 Transaction phase: Market Cap – AUD120m; Long term debt – AUD7m
• 2015 Consolidation phase: Market Cap – AUD10 - 15m; Long term debt – AUD12m
• 2016 -> Transitioning phase: Market Cap – AUD20m - ??m; Long term debt – AUD6m
45
?
Transforming Gold Mining in South Africa | 2016
Thank You
Trevor Fourie Australian Director Mobile: +61 414 324 960 [email protected]
Bill Richie Yang Australian Director Mobile: +61 404 831 804 [email protected]
46
www.stonewallresources.com.au