Sunstone Metals Ltd · ASX:STM
Sunstone Metals — Avalon Minerals — Noosa Mining Conference July 2015
30 slides from Sunstone Metals's conference presentation, July 2015
Slide 1: Avalon Minerals – Copper in Sweden
AVL ak AVALON MINERALS LTD COPPER IN- SWEDEN BUILDING A EUROPEAN COPPER PRODUCER
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 ASSET Near Term Development, Significant Upside, Affordable Capex, Expandable, Infrastructure in place TEAM Discovery, Mining, Finance, Track Record of Delivery Tidy structure, good funding position, stron
Slide 4: 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 during 2015 to deliver copper only development scenario – Focus on D Zone resource increase – D Zone continuing to deliver better results – Additional A Zone
Slide 5: Corporate
CORPORATE Top 10 shareholders hold 65% of shares on issue TICKER ASX:AVI Top 10 comprise institutions and high net worth SHARE PRICE* $0.03 individuals SHARES ON ISSUE 240,319,478 Board and management hold 3.2% and have MARKET CAP $7.2M participated in recent placements CASH# $3.2M European and UK s
Slide 6: Viscaria Copper Project
VISCARIA COPPER PROJECT PROJECT SITE KIRUNA TOWN PUBLIC ACCESS ELECTRIC RAIL AVAILABLE CHEAP 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 • Viscaria Project, northern Sweden • Drilling Program and Scoping Study in progress • Assessing an $80M CAPEX, minimum 1.2Mt per annum plant, copper-only start up project
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: D Zone Long Section
D ZONE LONG SECTION Limit of Resource Estimate
Slide 10: D Zone Long Section
D ZONE LONG SECTION 500m Also Open Developing thicker copper system with high grade shoots Limit of Resource Estimate
Slide 11: D Zone Drilling and Planning Underway
D ZONE DRILLING AND PLANNING UNDERWAY D Zone showing planned open pit and schematic emerging mine planning scenario based on studies in progress, and current proposed drill holes
Slide 12: D Zone Drilling and Planning Underway
D ZONE DRILLING AND PLANNING UNDERWAY 150m Open Pits 400m Decline Stopes D Zone showing planned open pit and schematic emerging mine planning scenario based on studies in progress, and current proposed drill holes
Slide 13: Resource Estimate Summary
RESOURCE ESTIMATE SUMMARY VISCARIA COPPER FOCUS HIGHER GRADE SUBSETS OF ESTIMATED RESOURCES A Zone Open Pit 4Mt @ 1.25% Cu Defining A Zone Underground @ 2.5% Cu Defining D Zone Underground @ 1.7% Cu Defining D Zone Open Pit @ 0.9% Cu VISCARIA RESOURCE 2014 SCOPING STUDY OPEN PIT RESOURCE Cu 32 Mt @
Slide 14: Outstanding Belt Scale Exploration Upside
OUTSTANDING BELT SCALE EXPLORATION UPSIDE • Mine scale orebody extensions, low technical risk • Exploration success within 5km; several targets defined and being tested • A rich portfolio of near mine targets to add to the scale of the project Development Area Background; TMI magnetics 14
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; 1km long; drilling starting this mont
Slide 16: 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 Equipment Manufacturers based in Kiruna • 100+ year mining herita
Slide 17: 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 18: 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 19: 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 Exploration Scoping Study Copper Production during 2018 Prefeasibility Study Decision to Mine Feasibility Study PERMITTING ESIA Preparation ESIA Ba
Slide 20: 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 21: OO LET ON tor rng
OO LET ON tor rng enn, ereuipea min me
Slide 22: We Are Copper Bulls
WE ARE COPPER BULLS Forecast consensus from the experts… • More than half of a $110 billion pipeline of copper and gold mines have been postponed or scrapped, Bloomberg, Jan 2015 • So by 2017–2018 we will face the consequence of a lack of new supply, which is demand outweighing supply.” Hayward Secu
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: 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 <$2.00/lb forecast for copper only project • LOW Valuation - EV/Resource lb of Copper very low at <0.01c/lb
Slide 25: Peer Group Comparison
PEER GROUP COMPARISON SHARE A$ CASH EV/LB CU PRICE SHARES ON AND IN CAPITAL COMPANY CODE (A$) ISSUE CU RESOURCES (M+I+I) LBS CU M. CAP (A$) RECEIVABLES EV RESOURCE COUNTRY STAGE INTENSITY Avalon Minerals ASX AVI $0.030 240,319,478 63.86mt @ 1.05% Cu 1,475,166,000 $7,209,584 $3,200,000 $4,009,584 $0.
Slide 26: Value Growth Drivers
VALUE GROWTH DRIVERS NEAR TERM CURRENT LONGER TERM (within 12 months) Secure Environmental Permit Manage appropriate funding position Define optimised path and all development approvals Environmental and Social Impact De-risk project through PFS Secure funding for Assessment (ESIA) in progress initi
Slide 27: Resource Estimate Summary
RESOURCE ESTIMATE SUMMARY 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 21.61 1.5
Slide 28: 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 29: Resource Estimate Summary – Notes
RESOURCE ESTIMATE SUMMARY - NOTES • The A, B, D and Discovery 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%
Slide 30: 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