for personal use only a return-driven resource developer · corporate snapshot 4 issued share...
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A return-driven resource developer
RIUSydney-MelbourneRoadshowPresentation
May2016
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DisclaimerandForwardLookingStatements
Thispresentationisnotaprospectusnoranofferofsecuritiesforsubscriptionorsaleinanyjurisdictionnorasecuritiesrecommendation.Theinformationinthispresentationisanoverviewanddoesnotcontainallinformationnecessaryforinvestmentdecisions.Inmakinginvestmentdecisions,investorsshouldrelyontheirownexaminationofMetalicityLimitedandconsultwiththeirownlegal,tax,businessand/orfinancialadvisersinconnectionwithanyacquisitionofsecurities.TheinformationcontainedinthispresentationhasbeenpreparedingoodfaithbyMetalicityLimited.However,norepresentationorwarranty,expressorimplied,ismadeastothecompletenessoradequacyofanystatements,estimates,opinionsorotherinformationcontainedinthispresentation.Tothemaximumextentpermittedbylaw,MetalicityLimited,itsdirectors,officers,employeesandagentsdisclaimliabilityforanylossordamagewhichmaybesufferedbyanypersonthroughtheuseof,orrelianceon,anythingcontainedinoromittedfromthispresentation.CertaininformationinthispresentationreferstotheintentionsofMetalicityLimited,butthesearenotintendedtobeforecasts,forwardlookingstatements,orstatementsaboutfuturemattersforthepurposesoftheCorporationsAct(Cth,Australia)oranyotherapplicablelaw.Theoccurrenceofeventsinthefuturearesubjecttorisks, uncertaintiesandotherfactorsthatmaycauseMetalicityLimited’sactualresults,performanceorachievementstodifferfromthosereferredtointhispresentationtooccurascontemplated.Thepresentation containsonlyasynopsisofmoredetailedinformationtobepublishedinrelationtothemattersdescribedinthisdocumentandaccordinglynoreliancemaybeplacedforanypurposewhatsoeveronthesufficiencyorcompletenessofsuchinformationandtodosocouldpotentiallyexposeyoutoasignificantriskoflosingallofthepropertyinvestedbyyouorincurringbyyouofadditionalliability.Recipientsofthispresentationshouldconducttheirowninvestigation,evaluationandanalysisofthebusiness,dataandpropertydescribedinthisdocument.Inparticular,anyestimatesorprojectionsoropinionscontainedhereinnecessarilyinvolvesignificantelementsofsubjectivejudgment,analysisandassumptionsandyoushouldsatisfyyourselfinrelationtosuchmatters.
CompetentPersonStatement
TheAustralasianCodeforReportingofExplorationResults,MineralResourcesandOreReserves(the‘JORCCode’)setsoutminimumstandards,recommendationsandguidelinesforPublicReportinginAustralasiaofExplorationResults,MineralResourcesandOreReserves.TheInformationcontainedinthispresentationhasbeenpresented in accordancewiththeJORCCodeandreferencesto“Measured,IndicatedandInferredResources”aretothosetermsasdefinedintheJORCCode.TheinformationinthispresentationthatrelatestoGeology andExplorationResultsisbased,andfairlyreflects,informationcompiledbyMrMichaelHannington,whoisaMemberoftheAustralianInstituteofGeoscientists.MrHanningtonisafulltimeemployeeofMetalicity.MrHanningtonhassufficientexperiencewhichisrelevanttothestyleofmineralisationandtypeofdepositunderconsiderationandtotheactivitywhichheisundertakingtoqualifyasaCompetentPersonasdefinedinthe2012Editionofthe‘AustralasianCodeforReportingofExplorationResults,MineralResourcesandOreReserves’.MrHanningtonconsentstotheinclusioninthereportofthemattersbasedonhisinformationintheformandcontextinwhichitappears.TheinformationinthispresentationthatrelatetotheMineralResourceandExplorationTargetestimatesisbasedon,andfairlyrepresents, informationwhichhasbeencompiledbyMrJamesRidley.MrRidleyisaDirectorandPrincipalGeologistatRidleyMineralResourceConsultingPtyLtdandaMemberoftheAustralasianInstituteofMiningandMetallurgy.MrRidleyhassufficientexperiencethatisrelevanttothestyleofmineralisationandtypeofdepositunderconsiderationandtotheactivitythatisbeingundertakentoqualifyasCompetentPersonasdefinedinthe2012Editionofthe‘AustralasianCodeforReportingofExplorationResults,MineralResourcesandOreReserves.MrRidleyconsentstotheinclusioninthispresentationofthematters basedonhisinformationintheformandcontextinwhichtheyappear.Allpartieshaveconsentedtotheinclusionoftheirworkforthepurposesofthispresentation.Theinterpretationsandconclusionsreached inthispresentationarebasedoncurrentgeologicaltheoryandthebestevidenceavailabletotheauthorsatthetimeofwriting.Itisthenatureofallscientificconclusionsthattheyarefoundedonanassessmentofprobabilitiesand,howeverhightheseprobabilitiesmightbe,theymakenoclaimforabsolutecertainty.Anyeconomicdecisionswhichmightbetakenonthebasisofinterpretationsorconclusionscontainedinthispresentationwillthereforecarryanelementofrisks.
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Important noticesF
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Creatingvaluethroughastrongreturn-drivenfocus
Discovery,developmentandacquisitionallkeyenablers
Ahighlyexperiencedboardandmanagementteam
OurassetsareinthepremiumminingjurisdictionofWesternAustralia
FlagshipassetistheworldclassAdmiralBayzinc-leadproject
— PositiveScopingStudycomplete,PFSunderway
KeyexplorationfocusisattractivelithiumtenureinthehighlyendowedPilgangoora/Wodgina district
Wellfundedforarangeofworkprogramswithapproximately$5mcash
We are driven by return on capital
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Founders ~15%
ManagementandAssociates ~12%
ShanghaiMetals 9.4%
Kagara Limited 5.1%
Corporate snapshot
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Issuedsharecapital(MCT) 450.1mil
Options 82.7 mil
Shareprice A$0.051
Marketcapitalisation(undiluted) A$22.9mil
Cash(31March2016) ~A$5.0mil
Debt(31March2016) A$0mil
Averagedailytradedvolume 1.26mil
Analystcoverage
Capitalstructure Metalicityshareprice
Majorshareholders
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A highly experienced team
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AndrewDaleyNon-ExecutiveChairmanBSc(Hons),FAusIMM
– Miningengineer andinvestmentbankerwith40+yearsexperienceinresources/financesectors– IndustryexecutiveroleswithAngloAmerican,RioTinto,ConocoMineralsandFluorAustralia– Resourcesfinanceexecutive roleswithBarclaysCapital,NAB,ChaseManhattan– PreviousNon-ExecutiveDirectorpositionswithOxianaandPanAust
MatthewGauciManagingDirectorBSc,MBA,MAusIMM
– Mining executivewith15+yearsexperienceinresourcessector– Strategic managementandminingcorporatefinanceexpertise– Managed privateandpublicexplorationcompaniesoperatinginAustralia,Africa&SouthAmerica– Previously ManagingDirectorofUranex
ChrisBainNon-ExecutiveDirectorBAppSc,DipGeoSc,MAusIMM
– Geologist andmineraleconomistwith30+yearsexperienceinresourcesandfinancesectors– Worked inundergroundminegeologyinMtIsaandTasmaniaandexplorationaroundBrokenHill– Subsequentbroad experienceinminingprojectM&A,evaluation/valuationandcapitalraisings– Previously aDirectorofPhillipCapitalResourcesFund
MatLongworthNon-ExecutiveDirectorBSc(Hons)(Geol),MAusIMM,MAICD
– Geologist with30+yearsexperienceinresourcesandfinancesectors– Ledmultidisciplinary projectevaluationanddevelopmentteamsinvariousseniorcorporateroles– ConsultantwithXstractMiningConsultants– Previously ManagingDirectorofHeronResources
MikeHanningtonExplorationManagerBSc(Geophys),LLB,MAIG
– Miningexecutive with30+yearsexperienceintechnicalandcommercialroles– Operational,explorationandfinancingexecutiverolesforcompaniesincludingNorthLtd &Oxiana– DeepbasemetalprojectexperienceincludingNorthparkes,GoldenGroveandProminentHill– PreviouslyDirectorofTalismanMiningandAlchemyResourcesF
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Zinc: the right place to be
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Source:MacquarieResearch,March2016(WoodMac,CRU,LME,ILZSG)Source:MacquarieResearch,March2016(WoodMac,CRU,LME,ILZSG)
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LocatedintheKimberleyregionofWesternAustralia,approximately200kmsouthofBroome
Resourcedelineatedon2grantedMLsand1grantedELoveran18kmmineralisedcorridor
TotalProjectareaof3,443km2 ofMLsandELs
InferredMineralResourceestimateof170Mtat7.5%ZnEq
100%ownershipunencumbered
World class zinc-lead project
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Continuity and grade
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InferredMineralResource(MRE)estimateof170Mtat4.1%Zn,2.7%Pband25g/tAg
ExplorationTargetRange(ETR)estimatedbetween160Mtand210Mtat7.2%and7.8%ZnEq
The18kmextentoftheMREexhibitssedimentaryformationsthathostthemineralisationthatvarybylessthan50minelevationalongthestrike
Themineralisationalsoappearstoconformtotheshapeoftheantiform,withmineralisationpinchingoutawayfromtheaxisoftheantiform towardstheedgesofthelimbs
A large scale mineralised system
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3.0%Zneqcut-offgrade
Containedmetal=7Mtzinc,4.6Mtlead,150Mozsilver
ExplorationTargetRange2
— Explorationtargetestimatebasedon3%Zn+Pb cutoff grade
— 160-210Mtat4.5-4.6%Zn,2.2-2.1%Pband25g/tAg
— Containedmetal=7.2-9.6MtZn,3.5-4.3MtPb,142-188MozAg
— 18kmtargetedstrikeextent
A globally significant zinc-lead resource
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Classification Tonnes(mt) Zn(%) Pb(%) Ag(g/t) Zneq (%)1
Inferred 170.0 4.1 2.7 25 7.5
1 SeeMetalicityASXreleaseon4/07/2016;Zneq =Zn+0.97Pb+0.03Ag(Table1:ZincEquivalenceParameters)
2 Notethatthepotentialquantitiesandgradesareconceptualinnature,thattherehasbeeninsufficientexplorationtoestimateMineralResourcesandthatitisuncertainwhetherfurtherexplorationwillresultintheestimationofMineralResources.
MajorzincdevelopmentprojectsgloballyAdmiralBayResourceEstimate
Source:Variouscompanyreportsandreleases
0.0%
5.0%
10.0%
15.0%
20.0%
0.0
5.0
10.0
15.0
20.0
25.0
30.0
Admira
lBay-ETR
Selwyn(C
anada)
Meh
diabad(Iran)
Gamsberg(Sou
thAfrica)
Admira
lBay(A
ustralia)
Ozernoe
(Russia
)
DugaldRiver(A
ustralia)
Teen
a(Australia)
Citron
en(G
reen
land
)
TalaHam
za(A
lgeria)
Dairi(Ind
onesia)
HackettR
iver(C
anada)
Akie(C
anada)
Bisha(Eritrea)
Olympias(G
reece)
Asmara(Eritrea)
Halfm
ileLake(Canada)
Resourcegrade(Zn+Pb(%))
Resourcecont.metal(Zn+Pbonly(mt))
Cont.Zn+Pb(mt)
Zn+Pbgrade(%)
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Keychallenges
— Depthofmineralisation(±1,300mdepth)
— Geothermalgradient(4⁰C/100m)
— Regionalgroundwatersystems
Threedevelopmentoptionsexamined,decline,TBMandverticalshaft.Withverticalshaftasthemostsuitable
Shaftsinkingknowledgeandtechnologyadvances,exampleofResolutionCopperproject(RioTinto)developmentshaftto2,116mdepth
Undergroundworkingtemperaturescontrolledviaconventionalrefrigeratedairfacilities
ScopingStudyworkprogressednewandlowercostprojectdevelopmentoptions
Mining Studies – low cost options
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Shaft
Surface Surface Surface
15kmstrike
Crosssection
Longsection
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Thematerialdoesnotcurrentlydemonstrateanydeleteriousmetallurgicalbehaviour
Preliminarymetalrecoveryexpectationsareintherangeof90-95%acrosszinc,leadandsilver
Concentrateproductgradesweregood,althoughtheselectivityofzincandleadwasnotidealandthereisscopeforfurtheroptimisation
OptimisationofthePFSflowsheetandfutureconsiderationoffluorineremovalisrequired.Thiswillultimatelyrequireconfirmationthroughmoredetailedtestwork
Thetestwork resultsandbenchmarkingagainstsimilaroretypesindicatesconfidenceintheabilitytoprocesstheAdmiralBayoresusingthesimpleandconventionalflowsheetselected
Lowlevelsofthedeleteriouselementsiron,manganeseandarsenicinthezincconcentrate,whichmayotherwisecarrypenalties,arecomparabletoorlowerthanotherTier1zincdeposits
High quality concentrate products
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Composite AdmiralBayConcentrate
Grade
CenturyConcentrate
Grade
LisheenConcentrate
GradeZinc 55% 57.00% 57%
Composite AdmiralBay Century Lisheen PenaltyFe 2.70% 1.50% 3.00% $1.5/1%>8%Mn 0.09% 0.02% 0.03% $1.5/0.1%>0.5%As 0.01% - 0.13% $2/1%>0.2%
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Flatterrainandlowelevation
Excellentproximitytoworldclassinfrastructure
Roadtransportroutes
— GreatNorthernHighwaywithin70km
— Sealedcontainerstruckedtoport(rotainers)
Readyportsforconcentrateexport
— PortHedland(450kmsouth-west)
— Broome(190kmnorth)
Multiplepoweroptions
— WestKimberleygasproject(LCOEUS$75/MWh)*
— Solarfarm&energystorage(LCOEUS$100/MWh)*
Ithasbeenassumedafly-in,fly-outanddrive-in,drive-outoperationoutofBroome
*Levelized CostOfEnergy,Source:WorldEnergyCouncil2013,withaforecastfor2020ofupto47%costreductioninPV
Ready infrastructure solutions
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Source:DeGrussa Mine
SourceCRS
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Approximately2,500km2 ofexplorationlicenceapplications
LargestspecificlandholdingforlithiuminWesternAustralia
Lowcost/riskentryintolithiumexplorationsector
Acquiredviaaspecificspodumenetargetingmodel
— Developedinconjunctionwithleadinglithiumexplorationexperts
Keytenementsinworldclasshardrocklithiumdistricts
— Pilbara(PilgangooraandWodgina)
— SouthWest(Greenbushes)
Outstanding lithium portfolio
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Lithium: underlying demand growth driver
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Source:NEDO,GoldmanSachsGlobalInvestmentResearch
AdvancementinLi-ionbatterytechnologyfortypicalbasemodelelectricvehicles(EVs)
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LargestspecificlandholdingforlithiuminthePilgangooraandWodginadistricts(859km2)
Greenstonebeltpegmatitesintheregionareknowntohostlargescalelithium(spodumene)andtantalumresources
— Pilgangooralithiumprojects:80.2mtat1.26%Li2O(PilbaraMinerals)and35.7mtat1.05%Li2O(AlturaMining)
— Wodginatantalumdeposits(GlobalAdvancedMetals)
Metalicity’stenementsarepredominantly:
— Withinthemainpegmatitetargetcorridor
— AbuttingexistingworldclassLithiumdeposits
Pilbara hotspot
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Re-processingofhistoricalHyperspectraldata
— Distinctmineralzoningwithinthepegmatites
— Clearcorrelationwithrecordedspodumene
Strongprospectivityoverastrikeofapproximately1.5kmwithanindicativewidthof0.5km
ComparablewithdimensionsofPilbaraMinerals’Pilgangooradepositlocatedaround25kmnortheast
ComparablewithdimensionstoMineralResources’Wodgina depositlocated5kmnortheast
Drillingsettocommence
— Initial2,000mRCprogramatcentralpegmatites
— Planned3,000mRCprogramatotherpegmatites
Strong potential
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Pegmatitesmapped SpodumenesignaturesfromHyperspectral
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AdmiralBayisaworldclasszinc-leaddevelopmentproject
— Largescaleandlonglifetypeasset,
— Nofatalflaws
— Highlyexperiencedteam
— Strongpricefundamentalsforzinc
ProgressingmoreefficientapproacheswithPFSunderway
Partnerdiscussionsunderway
Ourlithiumprojectsresideindistrictsofworldclassendowment
DrillingsettocommenceatPilgangoora South
The key takeaways
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