Strike Resources Limited · ASX:SRK
Strike Resources — Investor Presentation (December 2006)
28 slides from Strike Resources's investor presentation, Dec 7, 2006
Slide 1: Market Announcement: Broker and Institutional Presentation
Thursday, 7 December 2006 MARKET ANNOUNCEMENT Broker and Institutional Presentation We are please to enclose a copy of a presentation to be made by Managing Director, Mr Shanker Madan and Director, Professor Malcolm Richmond, to various brokers and institutional investors in Sydney and Melbourne on
Slide 2: Title of the Presentation
TITLE OF THE PRESENTATION 6 Dec 2006
Slide 3: Executive Summary
TITLE OF THE PRESENTATION 2 Executive Summary Strike has secured rights to a z The global market for iron ore is forecast to remain potential 1.2 billion tonne high strong. grade (60%+Fe) iron ore resource. z Strike is targeting up to 20Mt Strike has assembled a very per year production by 2011. exp
Slide 4: The price of high grade iron ore has risen over 100% during the last 18 months
TITLE OF THE PRESENTATION 3 The price of high grade iron ore has risen over 100% during the last 18 months z Chinese demand is IRON ORE PRICE A$/Fe unit up threefold during A$ 1.00 last 5 years. 0.95 0.90 0.85 0.80 z Tight supply. 0.75 0.70 0.65 0.60 0.55 z Group pricing power 0.50 (CVRD, BHP & Rio
Slide 5: Outlook for Large Scale Producers
TITLE OF THE PRESENTATION 4 Outlook for Large Scale Producers z Price drivers ¾ Sustained GDP growth forecast > 8%pa China and 7% India. ¾ Chinese domestic production comprises ~ 6,000 small mines averaging 60,000 tpa of surprisingly low quality. ¾ Declining grades of existing large deposits. ¾ Curr
Slide 6: Strike has secured a major interest in two world class high grade iron ore deposits in Peru
TITLE OF THE PRESENTATION 5 Strike has secured a major interest in two world class high grade iron ore deposits in Peru z Located in Peruvian Andes close to large centres of population and infrastructure. z Resource estimates from previous works conducted by Peruvian Ministry of Energy and Mines (19
Slide 7: Peru is a very attractive country for mineral exploration and mining
TITLE OF THE PRESENTATION 6 Peru is a very attractive country for mineral exploration and mining z Peru is among the top five producers in the world of silver (2,921t), zinc (~1.37Mt), gold (173 t), copper (~842,000t), lead (309,000t), and moly (9,500) and is a net exporter of hydrocarbons. z Intern
Slide 8: The deposits lie in the Peruvian Altiplano approximately 430km from the coast
TITLE OF THE PRESENTATION 7 The deposits lie in the Peruvian Altiplano approximately 430km from the coast 6 Dec 2006
Slide 9: The Apurimac deposits are located near a regional airport
The Apurimac deposits are located near a regional 8 TITLE OF THE PRESENTATION airport servicing the major town of Andahuaylas (15km away, population ~250,000) 6 Dec 2006
Slide 10: Resource Estimate Apurimac: 730Mt
TITLE OF THE PRESENTATION 9 Resource Estimate Apurimac : 730Mt z Low lying flat tabular ore bodies estimated at up to 260 Mt each. z Mineralisation commences at surface lending to open cut mining with low waste to ore ratio. z Although a mixture of magnetite and hematite it is mostly high grade (+ 6
Slide 11: Drilling and Geophysics at Apurimac looks promising
TITLE OF THE PRESENTATION 10 Drilling and Geophysics at Apurimac looks promising z Detailed geophysical work and 31 diamond core holes ( 2,667 m) in 2005: – Resource target 210 -260 Mt (Opaban I). – JORC inferred Resource of 21 Mt 63.1% Fe (Opaban II). – Mineralisation from surface to over 100 metre
Slide 12: Cuzco deposits are located 80km South of the major city of Cuzco
TITLE OF THE PRESENTATION 11 Cuzco deposits are located 80km South of the major city of Cuzco 6 Dec 2006
Slide 13: Resource Estimate Cuzco: 500 – 650Mt
TITLE OF THE PRESENTATION 12 Resource Estimate Cuzco: 500 –650Mt z Flat tabular radial bodies within a 4km diameter circular area around an intrusive core. z Similar to Apurimac. z Work done to date ¾ Detailed geophysical surveys ¾ Extensive surface sampling 1 km 6 Dec 2006
Slide 14: Layout of Cuzco deposit
TITLE OF THE PRESENTATION 13 Layout of Cuzco deposit z Cross section of deposit illustrates low waste to ore ratio for open cut mining. z Resource target between 500 – 650Mt. z Extensive surface sampling shows grades are likely to be ~64%Fe. 6 Dec 2006
Slide 15: Strike's Indicative Resource is Significant by World Standards
TITLE OF THE PRESENTATION 14 Strike’s Indicative Resource is Significant by World Standards Deposit Company Size Grade Fe% Carajas CVRD ~4,300Mt 65% Sishen Kumbha ~2,500Mt 58% Yandicoogina Rio ~1,200Mt 58% Simandou (Guinea) Rio ~1200Mt 64% Christmas / Fortescue (FMG) 350Mt / 59% / 58%? Cloud Break ~
Slide 16: Recent international iron ore transactions
TITLE OF THE PRESENTATION 15 Recent international iron ore transactions z Belinga deposit in Gabon ¾ Deposit size: 500Mt. ¾ Grade: + 60% Fe. ¾ Location: 500km from Atlantic coast. ¾ Investment: US$3 billion. ¾ Parties: Consortium including Export-Import Bank of China and China National Machinery and
Slide 17: Strike's Peru assets are held in Apurimac Ferrum (AF)
TITLE OF THE PRESENTATION 16 Strike’s Peru assets are held in Apurimac Ferrum (AF). z Strike has operational and board control of AF from outset. z Strike invests $6.5M over 5 years to earn 12.5% of (AF): ¾ $1.5M within 12 months (2.7%) ¾ $5M over following 4 years (12.5%) ¾ Payment schedule can be
Slide 18: Strike's 12 month Work Programme
TITLE OF THE PRESENTATION 17 Strike’s 12 month Work Programme z $7 million budgeted for 2007. z 17,000 metres drilling scheduled across Apurimac and Cuzco deposits. z Metallurgical Studies. z Marketing. z Pre-feasibility studies for: ¾ Transport options: - slurry pipeline. - railroad. ¾ Port expansi
Slide 19: Metallurgy appears favourable
TITLE OF THE PRESENTATION 18 Metallurgy appears favourable z Preliminary drilling shows: ¾ Natural lump is likely to be high grade (+60% Fe) and of Direct Shipping quality. ¾ Natural fines may be easily beneficiated to high grade (+60% Fe) Direct Shipping fines as high grade sinter feed. z Further d
Slide 20: Transportation studies previously conducted
TITLE OF THE PRESENTATION 19 Transportation studies previously conducted z Extensive studies previously undertaken by Takahashi Trading (1961) and Wright Engineers (1970) on the viability of rail and slurry pipeline options to the coast showed both options to be feasible. z Potential to upgrade exis
Slide 21: Production Profile – Slurry Pipeline
TITLE OF THE PRESENTATION 20 Production Profile – Slurry Pipeline z ~400km to port facility. z Significant water and gas available. z Downhill gradient. z Targeted throughput: 20 Mt pa. z Proven technology. ¾ Bailadila (India) – 7 Mt pa, ~270km ¾ Samarco (Brazil) – 18 Mt pa, ~350km z Capital costs ~
Slide 22: Production Profile – Rail
TITLE OF THE PRESENTATION 21 Production Profile – Rail z Existing railway Cuzco to the coast could be upgraded to carry 10 – 15 Mt pa. z Capital costs ~ US$700M + z Low operating costs. But: z Potential delays in sourcing rolling stock. 6 Dec 2006
Slide 23: Strike has an uncommonly experienced board
TITLE OF THE PRESENTATION 22 Strike has an uncommonly experienced board z John Stephenson – Chairman ¾ Exploration Director Rio Tinto Australasia. ¾ 35+ years managing exploration. z Shanker Madan (MD) ¾ BHP, Rio Tinto, Hamersley Iron. ¾ 30+ years iron ore experience. z Malcolm Richmond ¾ Managing D
Slide 24: Marketing
TITLE OF THE PRESENTATION 23 Marketing z China Desk established to develop early relationships with potential buyers in China. z Managed by an experienced iron ore marketing specialist (ex Rio Tinto). z Visit to 7 Chinese steel mills booked for January 2007. z Ore quality has the potential to offer
Slide 25: Strike is outstanding value
TITLE OF THE PRESENTATION 24 Strike is outstanding value Company Proposed Share MC Adjust Attribut. Fe % Attrib. Adj MC Production Issue* ($M) MC Resourc. / Iron / / Iron Profile Inventory Inventory (A$ per (Mt) (Mt) tonne) Aztec Resources Ltd (AZR) 4Mtpa 1062 249.7 219.90 53.0 64% 33.9 6.5 Gindalbi
Slide 26: Strike Capital Structure
TITLE OF THE PRESENTATION 25 Strike Capital Structure z $11.5 m cash and liquid assets – sufficient for next 12 – 18 months. z Issued capital: ¾ 58.4 million ordinary shares ¾ 20.8 million 20c options (2008) ¾ 1.8 million 20c options (2011) [Hume Mining NL] ¾ 1.7 million 30c options (2011) [Hume Min
Slide 27: Summary
TITLE OF THE PRESENTATION 26 Summary Strike has secured rights to a z This is an asset potentially potential 1.2 billion tonne high worth many billions of grade (60%+Fe) iron ore dollars. resource. Strike has assembled a very z Strike has the people to take experienced iron ore project this resource
Slide 28: Thank You
TITLE OF THE PRESENTATION 27 Thank You The information in this presentation that relates to exploration results has been compiled by Mr Hem Shanker Madan who is a Member of The Australian Institute of Mining and Metallurgy. Mr Madan is the Managing Director of Strike Resources Limited. Mr Madan has
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