company presentation new website - asx · the yogi mine project ‐ outline the yogi mine project...
TRANSCRIPT
13 July, 2012
COMPANY PRESENTATION & NEW WEBSITE
The Company is pleased to advise that Mr Brett Manning, Managing Director of Ferrowest Limited will be presenting to the AMEC Investor Briefing in Perth tomorrow morning.
A copy of the presentation is attached.
Shareholders should also note that the Company now has a new web site that will be available from later today. The web address remains the same as www.ferrowest.com.au
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The Yogi Mine Project ‐ Outline
The Yogi Mine Project proposes the development of a magnetite mining and concentration operation coupled with exploration of potential direct shipping ore (“DSO”) grade haematite at the Yogi iron deposit near Yalgoo in the mid west region of Western Australia. Proposed production of magnetite concentrate will target 4,500,000 tonnes per annum (“tpa”) at 67%Fe. 3,000,000tpa would be exported through the new proposed Port of Oakajee with the other 1,500,000tpa planned to supply the Eradu MPI Project (detailed below).
Exploration of potential haematite DSO targets will be a high priority for the Yogi Mine Project with the current concept, subject to satisfactory exploration, study results and government approvals, envisaging conceptual mine production of around 1.5Mtpa. The DSO would be transported by road train to Geraldton for export to China.
The current magnetite Inferred Resource estimate at Yogi classified and reported in accordance with the JORC Code is 572.5 million tonnes at 27.5%Fe.
The target magnetite potential# at Yogi estimated at between 0.8 and 1.2 billion tonnes at an average grade of between 25.5%Fe to 29.5%Fe.
Million Tonnes Mineral Resource Estimate
(Mt)
Fe% SiO2% Al2O3% P% LOI%
Inferred (Fresh) 500.0 27.68 48.19 5.40 0.06 0.08
Inferred (Transitional)* 72.5 26.28 45.38 5.59 0.05 1.39
Inferred Total 572.5 27.51 47.84 5.42 0.06 0.25Notes: Tonnages rounded to nearest 10,000 tonnes. Cut‐off Grade 23.0% total Fe. Surficial oxide material is not reported as part of the mineral resource estimate. *Transitional material is partially oxidised but magnetite‐bearing. # The target potential is conceptual in nature as insufficient data exists to define a Mineral Resource and it is uncertain if further exploration will result in further Mineral Resource. The target potential is based upon calculations prepared by Ferrowest Limited with reference to current experience at Yogi and available data.
The Eradu MPI Project ‐ Outline
Ferrowest Limited is developing the Eradu MPI Project aimed at producing seaborne traded merchant pig iron (“MPI”) at 96%Fe using magnetite concentrate from the Yogi magnetite deposit near Yalgoo in the mid west region of Western Australia. Proposed initial production is 1,000,000 tonnes per annum. The plan to process the magnetite concentrate to pig iron at Eradu, 60Km east of Geraldton, is premised on the ITmk3® technology and excellent existing infrastructure servicing the project area. The resulting value added merchant pig iron product will be a relatively high margin, high quality, low volume product for export to quality electric arc furnace steel making plants worldwide.
The information in this report that relates to Exploration Results and general geological commentary is compiled by Graeme Johnston, a Fellow of the Geological Society of London. Information in this report that relates to Mineral Resources or Ore Reserves is based on information compiled by Graeme Johnston and Malcolm Titley, a Member of the Australasian Institute of Mining & Metallurgy.
Graeme Johnston is a Director of the Company and a geological consultant to it through Corad Pty Ltd. Graeme Johnston 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 ‘Australian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Graeme Johnston consents to the inclusion in this report of the matters based on his information in the form and context in which it appears.
Malcolm Titley (MAusIMM) is a Director and Principal Consultant of CSA Global and is responsible for the estimation of the Mineral Resource for the Yogi deposit. Malcolm Titley 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 Australian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Malcolm Titley consents to the inclusion in this report of the matters based on his information in the form and context in which it appears.
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TAKING IRON TO A WHOLE NEW LEVELFor
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DISCLAIMER• This document is NOT a Prospectus.
• This document is NOT an Offer or inducement to subscribe for shares.
• Investment in shares in Ferrowest Limited should be considered speculative.
• This document is the property of Ferrowest Limited and may not be reproduced, published or passed on to any other person for any purpose without the prior written approval of Ferrowest Limited.
• No representation or warranty, either express or implied, is made by Ferrowest Limited, its directors, employees or agents for any statement, opinion, forecast or expectation arising out of or contained in this document, nor for any omission from this document.
• This document contains the plans of Ferrowest Limited, which are based on certain assumptions, forecasts and forward looking statements that may or may not turn out to be correct. Ferrowest reserves the right to alter its plans in its absolute discretion.
• The situation in respect to prices, market demand, short term funding and project financing can change from day to day and represent a tangible risk to investment that needs careful monitoring.
• There are inherent risks and opportunities in world markets (including the ASX) at this time which you should consider in making investment decisions in respect of your personal circumstances and your personal investment objectives.F
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ASX Listed (Since 2006)
ASX Code: FWL
128,036,181 ordinary shares
Top Shareholders
TFA International PL ‐ 13.12%
Sin‐Tang Mining – 5.19%%
De Belle & Sheehan –5.60 %
Alcardo Investments – 4.03%
Directors (collectively) – 14.26%
DirectorsBryan Hughes (Chairman)
Brett Manning (MD)
Barry Wyatt
Philip Evers
Graeme Johnston
About Ferrowest Limited
# The target potential is conceptual in nature as insufficient data exists to define a Mineral Resource and it is uncertain if further exploration will result in further Mineral Resource. The target potential is based upon calculations prepared by Ferrowest Limited with reference to current experience at Yogi and available data.
Share Price: 3.6 cents (12Jul12)
5 Year Trading Range: 3.5 cents to 94 cents
Market Cap $4.6M (12Jul12)
Inferred Resources (magnetite) at Yogi:
572.5Mt @ 27.5%Fe
Target Potential# at Yogi:
0.8 – 1.2 Billion Tonnes at 25.5% ‐ 29.5% Fe
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Yogi Mine Project
A business plan with a balanced portfolio of opportunities including a solid base case, an innovative point of difference and excellent upside potential.
Eradu MPI Project
Other Projects
Conventional magnetite open cut mine and concentrator at Yogi to produce 4.5Mtpa of magnetite concentrate at 67%Fe for more than 25 years.
Manufacture of 1.0Mtpa merchant pig iron (MPI) in the form of 96%Fe iron nuggets using the new ITmk3® technology at Eradu, 60Km east of Geraldton.
Barry’s Ridge Project – South east of CueNew Forest – North of Tallering Peak MineJack Hills – North west of the Jack Hills Mine
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Tenement LocationsF
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Yogi Mine Project Overview
Long lead time items such as flora, fauna and Aboriginal heritage largely complete. The project has no ‘red flag’ issues and is well served with existing infrastructure.
• Proposed 4.5Mtpa Magnetite concentrate production• 25+ year mine life• 572.5 million tonne inferred magnetite resource @ 27.5%Fe• Preliminary Feasibility Study complete• Bankable Study targeted for completion in 18 months• Gold, base metals and haematite exploration also ongoing
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Yogi Mine Project LocationF
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Yogi Tenements & Targets
Yogi Tenement PrioritiesYogi Tenement PrioritiesIn‐Fill Drilling of 460Mt Inferred Resource at ‘SAM’ target to upgrade to indicated and measured (leading to probable and proven reserves)*
Resource drilling, starting at ‘TWEETY’ with the aim of increasing the resource inventory from 572Mt toward the 0.8 – 1.2Bt target potential# at a range of between 25.5% and 29.5% Fe
Gold, base metals and haematite exploration*Subject to successful exploration and studies
# The target potential is conceptual in nature as insufficient data exists to define a Mineral Resource and it is uncertain if further exploration will result in further Mineral Resource. The target potential is based upon calculations prepared by Ferrowest Limited with reference to current experience at Yogi and available data.
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Inferred Resource Estimate (Magnetite Mineralisation)
Million TonnesMineral Resource Estimate
(Mt)
Fe% SiO2% Al2O3% P% LOI%
Inferred (Fresh) 500.0 27.68 48.19 5.40 0.06 0.08
Inferred (Transitional)* 72.5 26.28 45.38 5.59 0.05 1.39
Inferred Total 572.5 27.51 47.84 5.42 0.06 0.25
Notes: Tonnages rounded to nearest 10,000 tonnes. Cut-off Grade 23.0% total Fe *Material that is partially oxidised but magnetite bearing.
Magnetite Iron Ore Concentrate Produced
Fe% SiO2% Al2O3% TiO2% P% (XRF) S% (XRF) Cu%
67.0 5.36 0.58 0.07 0.012 0.023 0.002
Magnetite at Yogi
Please refer to the Competent Persons Statement at the end of this presentation # The target potential is conceptual in nature as insufficient data exists to define a Mineral Resource and it is uncertain if further exploration will result in further Mineral Resource. The target potential is based upon calculations prepared by Ferrowest Limited with reference to current experience at Yogi and available data.
Target Potential# at Yogi, once fully drilled out, is 0.8 – 1.2Bt at 25.5 – 29.5%FeFor
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Project SpecificationsMining by conventional open cut methods
Concentration on site in a beneficiation plant using:
Crushing;
Grinding; and
Magnetic Separation
Concentrate will be transported by slurry pipeline or re‐instatement of the old railway that used to run through Yogi (145km from Mullewa to the concentrator plant)
Electricity will be generated on site using natural gas
The existing Mid West Natural Gas Pipeline passes through the tenements and will only require a 12km branch line
Relatively fresh ground water is available from pit dewatering and a proposed bore field to the immediate east of the mine
1.5Mtpa of concentrate will be transported to Eradu for the MPI plant and 3Mtpa will be exported through the proposed new Oakajee PortF
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Project Timetable Scoping StudyScoping Study CompletedCompleted
Preliminary Feasibility StudyPreliminary Feasibility Study CompletedCompleted
Bankable Feasibility StudyBankable Feasibility Study 18 months18 months
FinancingFinancing 3 months3 months
ConstructionConstruction 21 months21 months
Project LifeProject Life 25 Years +25 Years +
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Capital & Operating Costs*
Capital Cost – 4.5Mtpa Magnetite Concentrate Concept (A$)
Mine & Concentrator $ 720M
Railway $ 244M
Power Station (BOO#) $ ‐
Contingency (10%) $ 96M
$1,060M
Operating Cost 4.5Mtpa Magnetite Concentrate Production Concept (A$/t)
Mining $20.03
Concentrator $34.15
Product transport and port costs $16.87
$71.05
Project NPV(10%) is estimated at A$450M and an IRR of 22.5%
* Capital and operating costs are being analysed as part of the * Capital and operating costs are being analysed as part of the ongoing Feasibility Studies and will be ongoing Feasibility Studies and will be confirmed as the studies advance and become more defined. The coconfirmed as the studies advance and become more defined. The costs shown here are indicative and sts shown here are indicative and provided to give some general guidance of the expectations for tprovided to give some general guidance of the expectations for the project. These costs assume all he project. These costs assume all magnetite is exported and therefore does not reflect the synergimagnetite is exported and therefore does not reflect the synergies of the value adding process to MPI.es of the value adding process to MPI.
##Build Own Operate.Build Own Operate.
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Eradu MPI Project Overview
Merchant pig iron (96%Fe) is a high value, relatively low volumeproduct with a niche market that is underserviced in the Asian region. Brazil is the major competitor but has double the shipping cost to Asia.
• Proposed 1.0Mtpa Merchant Pig Iron (MPI) production• 25+ year project life ‐ ore supplied by the Yogi Mine Project• New ITmk3® iron making technology• Preliminary Feasibility Study complete• Bankable Study targeted for completion in 18 months• Proposed plant site has natural, gas, rail, road and port•MPI is currently selling for around US$430/t in Asia
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Eradu MPI Project LocationF
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Project Specifications1.5Mtpa of 67%Fe magnetite concentrate from Yogi will be consumed each year
1.0Mtpa of MPI will be produced in the form of Iron Nuggets and exported
The main Dampier to Bunbury Natural Gas Pipeline will supply gas for the furnace and power
Magnetite concentrate will arrive by either the existing rail on the southern boundary of the plant site, a slurry pipe or possibly road trains along the Geraldton to Mount Magnet Highway
MPI will be transported by rail to the Port of Geraldton for export
Geraldton Port is ideal for MPI, which generates no dust and can be exported over any loader
55,000dwt vessels used through Geraldton are ideal for the high value MPI cargo
Cutting edge ITmk3® iron making technology is very efficient with about 30% less GHG
MPI Spec: MPI Spec:
96 96 –– 97% Fe97% Fe
2.5 2.5 –– 3.5% C3.5% C
< 0.05% S < 0.05% S For
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Steel Dynamics ITmk3® Plant
Photos: Courtesy of Steel Dynamic Inc.Photos: Courtesy of Steel Dynamic Inc.
Ferrowest proposes to use the same ITmk3® technology as the Steel Dynamics plant in Minnesota
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ITmk3® Process FlowF
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Environmental BenefitsGaseous Emissions
0 1 2 3 4 5 6 7 8 9 10
Carbon Gases
NOx
SOx
Paticulates (PM10)
VOC
Kg per MT of Steel Produced
ITmk3 Blast Furnace
ITmk3® Advantages
Lower energy consumption
Reduced CO2 emissions
Reduced transportation costs
Source: US Department of EnergySource: US Department of Energy
CO2 - From Mine to Finished Steel
BF-BOF Route ITmk3®-EAF Route
Steel Making Routes
KG
/MT
Stee
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Source: US Department of EnergySource: US Department of EnergyPhoto: Courtesy of Steel Dynamic Inc.Photo: Courtesy of Steel Dynamic Inc.
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Scoping Study
Preliminary Feasibility Study
Bankable Feasibility Study
Financing
Commence Construction
Production
Completed
Completed
3 Months
18 Months
21 Months
Project Timeline
Eradu MPI Project
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Capital & Operating Costs*
Capital Cost – 1.0Mtpa MPI (A$)
MPI Plant & Services $510M
Other Site Services $ 40M
Power Station (BOO#) $ ‐
Contingency (10%) $ 55M
$605M
Operating Cost 1.0Mtpa MPI (A$/t) $290/t
Long Term Average Sale Price (US$/t CFR Asia) $500/t
Project NPV(10%) is estimated at A$357.6M and an IRR of 23.9%
* Capital and operating costs are being analysed as part of the * Capital and operating costs are being analysed as part of the ongoing Feasibility Studies and will be confirmed as the studiesongoing Feasibility Studies and will be confirmed as the studies advance advance and become more defined. The costs shown here are indicative andand become more defined. The costs shown here are indicative and provided to give some general guidance of the expectations for provided to give some general guidance of the expectations for the the project. These costs assume that the mine only produces sufficieproject. These costs assume that the mine only produces sufficient concentrate for the MPI operation and therefore does not reflnt concentrate for the MPI operation and therefore does not reflect the ect the capital cost per tonne reductions from an expanded 4.5Mtpa magnecapital cost per tonne reductions from an expanded 4.5Mtpa magnetite concentrate operation at the Yogi mine.tite concentrate operation at the Yogi mine.
##Build Own Operate.Build Own Operate.
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The Ferrowest OpportunityYogi tenement package
Large, long life, magnetite ore body
Relatively close to the coast
Co‐located with existing infrastructure
Long lead environmental items cleared
Unique MPI based business plan
Magnetite concentrate production for the Chinese market
Niche MPI market opportunity
Higher margins through value adding
Possible entry price opportunity and only 128M shares on issue For
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Thank you for your time
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Competent Persons Statement
• The information in this report that relates to Exploration Results and general geological commentary is compiled by Graeme Johnston, a Fellow of the Geological Society of London. Information in this report that relates to Mineral Resources or Ore Reserves is based on information compiled by Graeme Johnston and Malcolm Titley, a Member of the Australasian Institute of Mining & Metallurgy.
• Graeme Johnston is a Director of the Company and a geological consultant to it through Corad Pty Ltd. Graeme Johnston 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 ‘Australian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Graeme Johnston consents to the inclusion in this report of the matters based on his information in the form and context in which it appears.
• Malcolm Titley (MAusIMM) is a Director and Principal Consultant of CSA Global and is responsible for the estimation of the Mineral Resource for the Yogi deposit. Malcolm Titley 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 Australian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Malcolm Titley consents to the inclusion in this report of the matters based on his information in the form and context in which it appears.F
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