murray zircon (mz) | ris2014 broken hill investor presentation

Mindarie Mineral Sands Project: A New Beginning

4th Annual Resources Investment Symposium

26-28 May 2014 Broken Hill, NSW

Patrick Mutz

CEO Murray Zircon Pty Ltd

Murray Zircon Pty Ltd

Copyright Murray Zircon 2

Australia’s newest mineral sands miner.


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Murray Zircon in Australia

South

Australia

Murray Zircon was established in June 2011 as a joint venture to

redevelop the Mindarie Mineral Sands Project in South Australia


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Mindarie Mineral Sands Project

Adelaide

Mindarie

Mindarie Project area

is located 150km east

of Adelaide.



Murray Zircon joint venture majority shareholder:

Guangdong Orient Zirconic Industry Science and Technology Co., Ltd. (Orient Zirconic), a listed company in China (SHE: 002167).

Joint venture minority shareholder: Initially, Australian Zircon NL, the former owner/operator of the Mindarie Project.

Australian Zircon’s shareholding now owned by private investors.



Objective: Rehabilitate and redevelop the Mindarie Project.

All project and company assets as well as certain liabilities were transferred to the Joint venture and into Murray Zircon.

Mindarie Project land, wet and dry processing plants and all associated equipment and infrastructure;

Mineral Leases and associated reserves and resources;

Exploration portfolio covering more than 11,000 km² within the Murray Basin; and

Liability for rehabilitation of previously mined land.

Reserves & Resources


JORC Reserves of 58.1 million tonnes at 4.3% THM.

Up to 15 year mine-life

JORC Resources of 171 million tonnes at 3.2% THM.

Exploration potential


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Primary Concentration Plant (PCP)


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Mineral Separation Plant

Location of Murray Zircon Exploration Tenements


Rehabilitation Liability Areas

Aerial Photo: March 2011

Area 1 Area 2

Area 3

Area 6 Area 4 Area 5

Mindarie Project – History

The Mindarie Project was originally developed by Australian Zircon Limited (ASX:AZC) in 2006.

The mine commenced operations in October 2007 following the construction of a Primary Concentrator Plant (PCP) and Mineral Separation Plant (MSP).

From the outset the project was plagued with numerous challenges;

Technical; community; regulatory; financial including a falling commodities market.

In October 2009 the project was placed on care & maintenance.


Mindarie Project – Redevelopment

As part of its strategy to redevelop Mindarie, Murray Zircon assumed responsibility for all remaining rehabilitation liability over previously mined areas.

Rehabilitation works commenced in August 2011.

At the same time, the Company initiated refurbishment of the PCP and associated wet plant facilities in October 2011.

The Company also submitted a Program for Environmental Protection and Rehabilitation (PEPR) to the South Australian Department of Manufacturing, Innovation, Trade, Resources and Energy (DMITRE), for approval to resume mining.


Rehabilitation Success

Phased Rehabilitation Milestones

Overburden Completed December 2011

Sub-soil replacement Completed February 2012

Top-soil replacement Completed March 2012

Cropping Completed April/May 2012


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Rehabilitated Land

Mindarie Project – Redevelopment

Through its successful rehabilitation efforts, positive relationships were built with the local community, affected landowners as well as the government through DMITRE.

NET RESULT?

DMITRE approved Murray Zircon’s PEPR application in April 2012 and issues a licence to resume mining;

less than 1 year from the formation of the company.


Mindarie Redevelopment & Commissioning

Primary Concentrate Plant refurbishment/upgrade activities completed in August 2012.

Mining contract and product logistics contract finalised in September 2012.

A newly purchased Mining Slurry Unit was installed and a new slurry pumping system was completed in November 2012.

Resumption of mining commenced in October 2012 and wet commissioning of the Slurry Unit and PCP began in December.

First HMC product was exported before the end of December.


Highlights of Operations

Mining at Mindarie is via dry, open-cut method using scrapers to remove overburden and dozers to mine the ore.

Typical mineral strands in the area are 150-200m wide, 10-20m deep and up to 13km long.

Mining/processing design capacity is 500 dry tonnes per hour ore feed to produce 10-12K tonnes of HMC per month.

Ore is slurried with water at the in-pit Slurry Unit and the slurry is pumped 3-8km to the Primary Concentration Plant (PCP).

At the PCP, the heavy minerals are removed with spiral classifiers to produce a Heavy Mineral Concentrate containing typically 80-90% heavy minerals.



5/30/2014 Ore mining by dozer push method

Overburden removal with scrapers

Ore

Slurry

Unit

Highlights of Operations

Only Heavy Mineral Concentrate (HMC) is produced at Mindarie.

HMC is transported from Mindarie by truck approximately 200km to the port in Adelaide at 7-10 B-Double trucks per day.

Transport by train is also an option but is not used at this time.

At the port, HMC is currently loaded into standard shipping containers with liners for export to China.

Bulk shipping is also an option but is not used at this time.

In China the HMC is separated into zircon and various titanium minerals.

OZC’s internal demand for zircon will support full production from the Mindarie project.



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HMC Storage Pad


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Typical Mining Equipment


5/30/2014 Slurry Pumping Skid


5/30/2014 Primary Concentration Plant


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Mining Camp

22/03/2012



Orient Zirconic (China)

Orient Zirconic (Australia)

100%

Private Investors


35% 65%

100%

Mindarie Project Exploration Tenements

100%

WIM 150 Project

Joint Venture

Partner

Orient Zirconic (China)

Guangdong Orient Zirconic Industry Science and Technology Co., Ltd (OZC), is one of China’s leading zircon processing companies and is headquartered at Shantou in Guangdong Province （about 480km northeast of Hong Kong）.

OZC has the most comprehensive range of zirconium products in the world, including zirconium dioxide, zirconium oxychloride, fused zirconia, zirconia structural ceramic as well as zirconium sponge and other products.

OZC is listed on the Shenzhen Stock Exchange (Code:002167) with a market capitalisation approx. RMB 4.7 Billion (A$850 million*).

Copyright Murray Zircon

27

*Share price and exchange rate on 31/12/2013.


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OZC Headquarters & Branch Locations in China

Chaoyang Branch, Liaoning

Headquarters, Shantou, Guangdong

Leiyang Branch, Hunan

Lechang Branch, Guangdong

Yanhong Branch, Shantou, Guangdong

New majority shareholder in March 2013;

Formerly Company Chairman – Mr Chaodian Chen at 30.8%

Now CNNC subsidiary at 15.7%

CNNC (China National Nuclear Corporation ) is the large state-owned enterprise under direct management of the central government.

January 2014 - OZC announced the acquisition of Zhejiang Zircon Valley Sci &Tech Pty Ltd; one of China’s largest producers of zirconium oxychloride for export.

February 2014 - OZC announced a merger with Hainan Wensheng High-Tech Materials Co., Ltd (Wingsheng or Winsheen); China’s biggest HMC importer and separator.


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Orient Zirconic - Recent Developments

Summary

Through Murray Zircon, Orient Zirconic has…

Made its initial investment and entered the mining community in South Australia;

Acted on its vertical integration strategy to securing steady supply of zircon;

Established a base for potential future investment.


For further information:

Website: www.murrayzircon.com.au Email: [email protected]

Patrick Mutz, CEO


P.O. Box 3444 Level 6 West, 50 Grenfell Street

Adelaide, South Australia, Australia 5000

Phone: +61 8 8410 8884 ABN: 75 147 048 744

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