Sunstone Metals Ltd · ASX:STM
Sunstone Metals — Avalon Minerals — Investor Presentation (November 2015)
32 slides from Sunstone Metals's investor presentation, Nov 5, 2015
Slide 1: Avalon Minerals: Building a European Copper Producer
AVL ak AVALON MINERALS LTD COPPER IN- SWEDEN BUILDING A EUROPEAN COPPER PRODUCER —_ ee 5 November 2015 —~asa=
Slide 2: Disclaimer
DISCLAIMER DISCLAIMER FORWARD-LOOKING STATEMENTS To the maximum extent permitted by law, no This Presentation includes certain statements that may representation, warranty or undertaking, express or be deemed “forward-looking statements”. All implied, is made and, to the maximum extent permitted sta
Slide 3: Avalon Minerals – The Investment Case
AVALON MINERALS – THE INVESTMENT CASE 100% ownership of the High Quality Viscaria Copper Asset Near Term Development, ASSET Significant Upside; Adding thick and high grade intersections Affordable Capex, Expandable, Infrastructure in place TEAM Discovery, Mining, Finance, Track Record of Delivery Ti
Slide 4: Corporate
CORPORATE Top 10 shareholders hold 65% of shares on issue TICKER ASX:AVI Top 10 comprise institutions and high net worth SHARE PRICE* $0.027 individuals SHARES ON ISSUE 255,171,330 Board and management hold 3.2% and have MARKET CAP $6.9M participated in recent placements CASH# $1.2M European and UK
Slide 5: Avalon Minerals – The Focus Is
AVALON MINERALS – THE FOCUS IS .. • Moving the Viscaria Copper Deposit towards production • ‘90%’ of focus and funding – Update Scoping Study in Q4 2015 to deliver copper only development scenario – Focus on D Zone resource increase – D Zone continuing to deliver improved results; we are drilling an
Slide 6: Viscaria Copper Project
VISCARIA COPPER PROJECT PROJECT SITE KIRUNA TOWN PUBLIC ACCESS ELECTRIC RAIL LOW COST HYDRO POWER
Slide 7: Viscaria Copper – Open Pit & Underground
VISCARIA COPPER – OPEN PIT & UNDERGROUND Avalon aspires to be a long term >20,000 tonne per annum copper producer within 4 years • Drilling Program and Scoping Study in progress • Assessing an $80M CAPEX, minimum 1.2Mt per annum plant, copper-only start up project • Timing – – updated Scoping Study
Slide 8: Location
LOCATION • 3 Exploitation Concessions approved covering the main areas of mineralisation at Viscaria • Viscaria is in an area of ‘National Interest for Minerals’ • Outstanding access to, and quality of, infrastructure, and low cost power • Commitment to highest standards of stakeholder engagement an
Slide 9: Resource Estimate Summary
RESOURCE ESTIMATE SUMMARY VISCARIA COPPER FOCUS TARGETING 12 million tonnes, to deliver 1.2Mt/yr for 10 years A Zone Open Pit 2.6Mt @ 1.25% Cu in current A Zone resource estimate Defining D Zone Underground @ 1.7% Cu Defining D Zone Open Pit @ 1.0% Cu } Current drilling focus A Zone Underground @ 2.
Slide 10: D Zone Long Section
D ZONE LONG SECTION Cu (%) x true thickness contours – improving with depth
Slide 11: D Zone Cross Sections; VDD 193, 186
D ZONE CROSS SECTIONS; VDD 193, 186 Sub-vertical orebody, with steep south- westerly plunging shoot geometry
Slide 12: D Zone Long Section – Significant Upside
D ZONE LONG SECTION – SIGNIFICANT UPSIDE N D Zone is delivering very robust intersections Geophysical modelling and structural geology is enabling the delivery of a predictive Target Area of VDD 193, model for resource and being tested now growth with VDD 195 Very significant large target area at so
Slide 13: D Zone Drilling and Planning Underway
D ZONE DRILLING AND PLANNING UNDERWAY N 550m VDD 195 D Zone showing planned open pits and schematic underground mine planning scenario based on studies in progress
Slide 14: Project Planning and ESIA Underway
PROJECT PLANNING AND ESIA UNDERWAY • Approved Exploitation Concessions (mining leases) over A, B and D Zones; valid to 2037 and 2039 • ESIA is the critical path for environmental permitting, and dictates the ‘Decision to Mine’ timetable • ESIA has commenced • Recognised international and Swedish con
Slide 15: Outstanding Belt Scale Exploration Upside
OUTSTANDING BELT SCALE EXPLORATION UPSIDE • Mine scale orebody extensions, low technical risk • Exploration success One drill hole; 1m @ within 5km; several 1.6% Cu & 1m @ West Nukutus copper 2.5% Cu discovery; up to 0.5% Cu in targets defined and auger samples and one DDH; 1km long. being tested •
Slide 16: Outstanding Belt Scale Exploration Upside
OUTSTANDING BELT SCALE EXPLORATION UPSIDE Targets outlined in yellow – geophysically driven A Horizon sub-basins represent additional geological targets requiring drill testing
Slide 17: Infrastructure – In Place, High Quality
INFRASTRUCTURE – IN PLACE, HIGH QUALITY • Kiruna town population 20,000, skilled workforce • Sealed national highway to mine gate • Electrified public access rail to mine gate • Abundant Low Cost Power Supply ~8c/kwh • Contractors and OEM presence in Kiruna • 100+ year mining heritage • Local smelte
Slide 18: Stakeholder Engagement
STAKEHOLDER ENGAGEMENT • Proposed development area is in a window surrounded by multiple land use areas • The key issues are (1) a strong mining heritage, (2) reindeer herding, (3) Natura 2000, and (4) recreation Area of Development Focus Area of National Interest for Minerals
Slide 19: A Very High Quality Leadership Team
A VERY HIGH QUALITY LEADERSHIP TEAM Chairman Resources executive. Broad global experience with Graham Ascough large companies and building juniors CEO and Managing Director Geologist and Business Development. Track record of Malcolm Norris discovery and growth General Manager Mining Engineer. Studie
Slide 20: Planning to Deliver: Copper Production during 2018
PLANNING TO DELIVER 2015 2016 2017 STAKEHOLDER ENGAGEMENT Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Stakeholder plans, forums, reviews STUDIES AND EXPLORATION Copper Production during 2018 Exploration Scoping Study Prefeasibility Study Decision to Mine Feasibility Study PERMITTING ESIA Preparation ESIA Ba
Slide 21: Why Should You Own Avalon Minerals?
WHY SHOULD YOU OWN AVALON MINERALS? • We hold 100% of a high quality asset • We are in a low risk mining district • We have Infrastructure and low cost hydro power • Low sovereign risk • There is a manageable path to production • There is leverage to copper • We will deliver exploration success in a
Slide 22: OO LET ON tor rng
OO LET ON tor rng enn, ereuipea min me
Slide 23: A Zone Long Section
A ZONE LONG SECTION High grade copper targets defined down plunge across several areas at A Zone X-section Proposed drill holes, ~4,000m • Previously mined by Outokumpu – 15 years of production to 1997 – 12.5Mt of 2.3% Cu at 850,000tpa, producing a concentrate of 26% Cu, 2% Zn & 0.5g/t Au • (43Mlb (
Slide 24: ASX:AVI vs XSR
ASX:AVI vs XSR Avalon Minerals vs Small Resources Index $0.160 2,600.00 Avalon ASX; Small Resources Index $0.140 2,400.00 $0.120 2,200.00 $0.100 2,000.00 $0.080 1,800.00 Repairing the corporate $0.060 structure; assessing the assets 1,600.00 $0.040 1,400.00 $0.020 New team in place $0.000 1,200.00 A
Slide 25: Copper price; USD/lb and Swedish Krona/lb
USD 0 1 2 3 4 5 6 7 8 9 10 26-Sep-10 26-Nov-10 26-Jan-11 26-Mar-11 26-May-11 26-Jul-11 26-Sep-11 26-Nov-11 26-Jan-12 26-Mar-12 26-May-12 26-Jul-12 26-Sep-12 26-Nov-12 26-Jan-13 26-Mar-13 26-May-13 26-Jul-13 26-Sep-13 26-Nov-13 26-Jan-14 26-Mar-14 26-May-14 26-Jul-14 26-Sep-14 26-Nov-14 26-Jan-15 26-
Slide 26: Peer Group Comparison
PEER GROUP COMPARISON AVALON MINERALS IS CONSIDERED TO BE HEAVILY DISCOUNTED RELATIVE TO ITS PEERS • LOW Capital Intensity, forecast at 5,500 $/t • LOW Cost/lb copper production <$2.00/lb forecast for copper only project • LOW Valuation - EV/Resource lb of Copper very low at <0.01c/lb • LOW Enterpri
Slide 27: Peer Group Comparison
PEER GROUP COMPARISON EV/LB CU CAPITAL SHARE SHARES ON A$ CASH AND A$ IN INTENSIT COMPANY CODE PRICE (A$) ISSUE CU RESOURCES (M+I+I) LBS CU M. CAP (A$) RECEIVABLES DEBT EV RESOURCE COUNTRY STAGE Y Avalon Minerals ASX AVI $0.026 255,171,330 55mt @ 1.1% Cu 1,333,420,000 $6,634,455 $2,000,000 $0 $4,634
Slide 28: Value Growth Drivers
VALUE GROWTH DRIVERS NEAR TERM CURRENT LONGER TERM (within 12 months) Manage appropriate funding position Complete required ESIA to allow Secure Environmental Permit vs dilution (capital and asset) for full permitting and all development approvals Environmental and Social Impact De-risk project thro
Slide 29: Resource Estimate Summary - Copper
RESOURCE ESTIMATE SUMMARY - COPPER Currently Defined Mineral Resource for Copper for Avalon Minerals above a 0.4% Cu cut-off. Resource Tonnes Cu Grade Cu Metal Classification Name (Million Tonnes) (%) (t) Measured 14.44 1.7 240,000 Indicated 4.69 1.2 57,200 A Zone Inferred 2.48 1.0 25,500 Subtotal 2
Slide 30: Resource Estimate Summary
RESOURCE ESTIMATE SUMMARY Currently Defined Mineral resource for iron reported for Avalon Minerals above a 15% Mass Recovery cut-off Resource Tonnes Fe Grade Mass Recovery Estimated recoverable Classification Name (Million Tonnes) (%) (%) iron (Million Tonnes) Measured 2.0 28.7 35.1 0.5 Indicated 9.
Slide 31: Resource Estimate Summary - Notes
RESOURCE ESTIMATE SUMMARY - NOTES • The A, B, and D Zone Mineral Resources were prepared and first disclosed under the JORC Code 2004. They have been updated since to comply with the JORC Code (2012). • All Copper Mineral Resource estimates are reported above a block cut-off Grade of 0.4% Cu. • All
Slide 32: Competent Persons Statement
COMPETENT PERSONS STATEMENT Competent Persons Statement The information in this report that relates to the 2014 Scoping Study is based upon information compiled by, or under the supervision of Manish Garg B.Eng. (Hons.), Master of Applied Finance, MAusIMM, MAICD; Tim Horsley B.Sc. (Hons) (Mining Eng
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