Sunstone Metals Ltd · ASX:STM
Sunstone Metals — Avalon Minerals — Investor Presentation (June 2015)
34 slides from Sunstone Metals's investor presentation, June 2015
Slide 1: Copper in Sweden: Building a European Copper Producer
AVL ak AVALON MINERALS LTD COPPER IN- SWEDEN BUILDING A EUROPEAN COPPER PRODUCER June 2015
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 Low Market Capitalisation, low Enterprise Value, UNDERVALUED low $/lb resources 100% ownership of a High Quality Copper Asset ASSET Near Term Development, Significant Upside, Affordable Capex, Expandable, Infrastructure in place TEAM Discovery, Mining, Finance,
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* $0.03 individuals Board and management hold 3.3% and have SHARES ON ISSUE 228,319,478 participated in recent placements MARKET CAP ~$6.8M European and UK shareholders
Slide 5: Copper – Open Pit & Underground
COPPER – OPEN PIT & UNDERGROUND Avalon aspires to be a long term 20,000 plus 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 deliver
Slide 6: Viscaria Copper Project Upside
VISCARIA COPPER PROJECT UPSIDE • Mine scale orebody extensions, low technical risk upside • Exploration success within 5km; several targets defined and being tested, • There is justification to be very bullish on the likelihood of success • Regional exploration potential, large landholding, copper t
Slide 7: Non-Technical Risk Is Low
NON-TECHNICAL RISK IS LOW • 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 stakehol
Slide 8: Location
LOCATION PROJECT SITE KIRUNA TOWN KIRUNA RAIL
Slide 9: Location
LOCATION D Zone Prospect 13.6Mt@ 1 25.6Mt @ B Zone Prospect 19.7Mt @ 0.8% Cu YY Tie hk ‘A Zone Prospect 21 6Mr @ 1.5% Cu * Viscaria K3 Be Discovery Zone Prospect G.OMt @ 0.8% Cu, 0.199" Au & 9.7Mt @ 38.5% Fe Rakkurij&rvi K1 application AVALON
Slide 10: Location
LOCATION Viscaria 10 B Zone Prospect ay, ) - a _— thy Sa ~ be o at AZone EiCspece yaa Sea - AVALON
Slide 11: Outstanding Belt Scale Exploration Upside
AND OUTSTANDING BELT SCALE EXPLORATION UPSIDE SEVERAL TARGETS NIHKA • Iron oxide copper system • Strong discrete magnetic anomaly with bedrock copper anomaly • One DDH just completed WEST NUKUTUS • Magnetic anomaly of similar magnitude and scale to D Zone • The closest historic drill hole (150m to t
Slide 12: Existing Local Infrastructure
EXISTING LOCAL INFRASTRUCTURE • 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 smelter & multip
Slide 13: 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 14: 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 15: OO LET ON tor rng
OO LET ON tor rng enn, ereuipea min me
Slide 16: Appendices
a meee PPENDICIES a
Slide 17: 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 18: Resource Estimate Summary
RESOURCE ESTIMATE SUMMARY COPPER FOCUS HIGHER GRADE SUBSETS OF ESTIMATED RESOURCES A Zone Open Pit 4Mt @ 1.25% Cu Outlining A Zone Underground @ 2.5% Cu Outlining D Zone Underground @ 1.7% Cu Outlining D Zone Open Pit @ 0.7% Cu OVERALL RESOURCE 2014 SCOPING STUDY OPEN PIT RESOURCE* Cu Fe 32 Mt @ 64M
Slide 19: Recent Drilling Announcements
RECENT DRILLING ANNOUNCEMENTS Collar RL Dip Azimuth Date of ASX HOLE NUMBER PROJECT PROSPECT Easting (mE) Northing (mN) EOH (m) (m) (degrees) (degrees) announced results VDD0180 VISCARIA D-Zone 1,680,952 7,537,425 65.2 509 -55 135 18-Nov-14 VDD0181 VISCARIA D-Zone 1,680,251 7,536,816 122.1 516 -50 1
Slide 20: Deposit Details
DEPOSIT DETAILS N 1 km 20
Slide 21: 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 22: D Zone Long Section
D ZONE LONG SECTION f--750m Glacial "y [email protected]%Cu 34.8m @ 0.8%Cu incl. 11 [email protected]% Cu TITY osetted cu resource ‘Oxide Cu boundary 4.0m @ 1.2%Cu Jand [email protected]%Cu incl. [email protected]%Cu} 23m @ 1.0%Cu 54m @ 0.5%Cu incl. [email protected]%Cu incl. [email protected]%Cu voD0T8S 14m @ 1.2%Cu y oe 10.0m @ 1.2% Cu incl. 5.6m @
Slide 23: Outstanding Near Mine Exploration Upside
OUTSTANDING NEAR MINE EXPLORATION UPSIDE
Slide 24: Nihka - Belt Scale Exploration Upside
NIHKA - BELT SCALE EXPLORATION UPSIDE N • A large magnetic anomaly in a structurally complex domain • No previous exploration • Recent auger drilling defined copper anomalism in bedrock • Diamond drill hole NDD 001 completed and intersected an altered iron oxide copper system with trace levels of ch
Slide 25: And Outstanding Belt Scale Exploration Upside
AND OUTSTANDING BELT SCALE EXPLORATION UPSIDE SEVERAL TARGETS TJAVELK • Significant EM responses • Modelled geophysics • Drill targets defined TJARRO • Previous drilling; SGU, LKAB, Outokumpu • 15m at 1.34% Cu • 3.6m at 1.63% Cu, 1.23g/t Au and 4.75g/t Ag • Copper-gold opportunity • Early days
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 <0.1c/lb
Slide 27: Peer Group Comparison
PEER GROUP COMPARISON COMPANY Avalon Minerals Intrepid Mines Avanco Resources KGL Resources Altona Mining Rex Minerals Kombat Copper Tintina Resources Constantine Metal Resources PRODUCERS Hiligrove Resources Straits Resources Rambler Metals and Mining cope ASK: AVI ASK:IAU ASX:AVE ASKCKGL ASX:AOH A
Slide 28: Stakeholder Management
STAKEHOLDER MANAGEMENT • 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
Slide 29: Planning to Deliver
PLANNING TO DELIVER TARGET TIME FRAMES • Investigating options to shorten timeframe to decision to build • Construction 2017 • Cu production 2018; expansion potential 2020
Slide 30: 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 31: Resource Estimate Summary
RESOURCE ESTIMATE SUMMARY Currently Defined Mineral Resource for Copper reported on the Viscaria Project 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 Subtot
Slide 32: Resource Estimate Summary
RESOURCE ESTIMATE SUMMARY Currently Defined Mineral resource for iron reported on the Viscaria Project 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 Indicate
Slide 33: 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% C
Slide 34: 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