Image Resources Nl · ASX:IMA
Image Resources Nl — Investor Presentation (October 2011)
49 slides from Image Resources Nl's investor presentation, October 2011
Slide 1: Image Resources October 2011
gee [Mage resources October 2011
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS This presentation contains forecasts and forward looking statements which are made in good faith and are believed to have reasonable basis. basis However, such forward looking statements are subject bj t tto risks, i k uncertainties t i ti and d other th factors f t which
Slide 3: Directors
DIRECTORS • George Sakalidis Managing Director Geophysicist, 30 yrs exp • Roger Thomson Executive Director, Geologist, +30 yrs exp. Formerly – Delta Gold • Peter Thomas Non Executive Chairman Mining Lawyer, +20 yrs exp.
Slide 4: Company Structure
COMPANY STRUCTURE • IMA: ASX code • 90.7M: shares (1.2M shares held by Iluka) • 10.7M: options • $43M: market cap. • Top 10 shareholders hold 45% • $2.8M: cash • $2.0M: liquid investments • $1.5M: annual spend rate Shareholdings in other companies • 8.6% of Meteoric Resources NL • 10.7% of Magnetic
Slide 5: Projects Highlights
PROJECTS HIGHLIGHTS • Eleven JORC compliant resources within North Perth Basin. • Commercialisation of the North Perth Basin commenced with appointments pp of development p manager g and manager of mineral process design • Upgraded resources for Atlas and Gingin South deposits plus l four f resource
Slide 6: North Perth Basin Tenements
NORTH PERTH BASIN TENEMENTS e : = = Q 500 ad = KM # a oy WESTERN AUSTRALIA Map Area ® Kalgoorlie MOGUMBAR “31° 31.2 ° [J existing Tenements [314° 05 Ground Geophysical ‘Survey Coverage <= Mineral Sand Deposit Image Resources HM Resource =_ ® Mineral Sand Mine © ~~ Location 31.4% 31.6% -115.2° [7115.
Slide 7: North Perth Basin Resources
NORTH PERTH BASIN RESOURCES • Current: Dry Mining andMeasured Resources 47 4Mt @6.5%HM 47.4Mt @6 5%HM which is 3.1Mt 3 1Mt of contained HM • Current: Dry Mining and Dredge Mining Resources 7 9Mt off contained 7.9Mt t i d HM • Target: 10-15Mt contained HM - (short term) • Grade: 6.5% (dry) - 39% of c
Slide 8: Commodity Price Increases
COMMODITY PRICE INCREASES F Forecast t Product P d t Pricing P i i 2009 – 2014 ($US/t) Product 2010 2011 2014 Zircon 850 2000 >2300 Rutile 600 1000 >1200 Chloride Ilmenite 110 180 >200
Slide 9: North Perth Basin Dry Mining Resources 2011
NORTH PERTH BASIN DRY MINING RESOURCES - 2011 Dry Mining Inferred ‐ 2.5% HM Cutoff Resource BCM TONNES % HM % SLIMES HM TONNES Gingin Sth 400,000 730,000 6.5 8.4 48,000 Gingin Nth 580,000 1,090,000 5.2 14 57,000 Red Gully 1,455,000 2,570,000 7.5 10.7 192,000 Sub ‐ Total 2,435,000 4,390,000 6.8 11.2
Slide 10: North Perth Basin Dredge Resources 2011
NORTH PERTH BASIN DREDGE RESOURCES - 2011 Cooljarloo Bidaminna Total Ownership % 70-100% 100% 70-100% Tonnes Mt 188 45 233 HM % 1.8% 3.0% 2.0% Total HM Mt 3.4 1.3 4.7 Ilmenite % 72% 83% 75% Zircon % 10% 5% 9% Rutile/Leucoxene % 4% 8% 5% Valuable HM % 86% 97% 89% Slimes % 12-20% 3-4% 3-20% Source: L
Slide 11: North Perth Basin Product Tonnes 2011
NORTH PERTH BASIN PRODUCT TONNES - 2011 Dry Mining Resources Dredge Mining Resources Cooljarloo Gingin Total Cooljarloo Bidaminna Total Total Total HM Mt 18 1.8 13 1.3 31 3.1 34 3.4 14 1.4 48 4.8 79 7.9 Ilmenite Mt 1.0 0.80 1.8 2.4 1.1 3.5 5.3 Zircon t 175,000 139,000 314,000 336,000 73,000 409,000
Slide 12: Cooljarloo
COOl ARLOO —— pSStinnes North ee an es Pairs R cooliarioc Z > _ a \ 7 ANS , » 2 ek Mineral Sand Occurances ? a= . > 9 12x Vertical Exaggeration ae ~ a Ges > - a _ ov _ — -_ 2 7? 34% Gry a i SP _- saes i Pe ch
Slide 13: Cooljarloo Current Resources and Exploration Targets
COOLJARLOO CURRENT RESOURCES AND EXPLORATION TARGETS
Slide 14: Atlas Resource
ATLAS RESOURCE New Measured plus Indicated Resource: • [email protected]%HM • 90% Measured Resource • 822,000t contained HM , • 22,000m in 1,700 , AC holes • Drill pattern 100mx20m Atlas HM Deposit
Slide 15: Atlas Assemblage
ATLAS ASSEMBLAGE • Southern S th 2 2.5km 5k averages over 10% HM and 10-20% Zircon • 65% of ilmenite suitable for synthetic rutile • Strategic because of five SR kilns in the Perth Basin, three of which are idle • Coatings on grains minimal • Grain size coarse 163 microns
Slide 16: Indicative Ilmenite Quality
INDICATIVE ILMENITE QUALITY ATLAS DEPOSIT Nb2O5 ZrO2+ Fe2O3 Cr2O3 U XRF Al2O3 V2O5 CeO2 SnO2 P2O5 ZrO2 TiO2 SiO2 MnO MgO CaO K2O SO3 FeO HfO Th % % % % % % % % % % % ppm ppm % % % % % % % Primary Ilmenite 56.0 39.8 11.2 0.88 0.54 0.14 0.38 1.22 0.08 0.08 0.03 <10 90 0.16 0.13 0.01 0.04 0.01 0.02 0.0
Slide 17: Atlas Extension New Tenement
ATLAS EXTENSION NEW TENEMENT
Slide 18: Cooljarloo North Resources and Targets
COOLJARLOO NORTH RESOURCES AND TARGETS HM Tonnes HM Deposit Grade Mt Kt % Helene 11.5 4.6 470 Hyperion 3.7 7.8 290 Total 15.2 4.8 760
Slide 19: Cooljarloo Panorama
COOLJ ARLOO PANORAMA Se) Bidaminna| = = =< — Lancelin = Tiwest — ———_— ——= —— —— Cooljarloo = ae + raters ; Telesto Res 2 oe ss ’ e _aHyperionResource | > Helene Resource, ~- yy, Drill Collars -— -
Slide 20: Cooljarloo SE
COOLJARLOO SE RHEA,, MIDDLE STRAND AND CHANNELS • The high grade core at Middle Strand extended, grading more than 10% HM over a 1.1km strike length. • Resource upgrades about to commence at Rhea and Middle Strand, each showing potential for both dry mining and dredgeable resources. Hole From To Int
Slide 21: Rhea Cross-Section
RHEA CROSS-SECTION SHOWING THREE LEVELS OF MINERALISATION
Slide 22: Gingin Resource Targets
GINGIN RESOURCE TARGETS
Slide 23: Gingin Resources and High Priority Targets
GINGIN RESOURCES AND HIGH PRIORITY TARGETS • 0.96M tonnes contained HM added to Image’s Image s dry resource base which is now 3.1M tonnes after purchase of assets from Iluka for 1.2M shares and $100,000. • Zircon grade significant at Red Gully and Boonanarring averaging 12 and 15% plus Boonanarring
Slide 24: Gingin South Resource Summary
GINGIN SOUTH RESOURCE SO C S SUMMARY • The Gingin South deposit has increased in size, with a continuous high grade core of greater than 8% HM over a 5.5km 5 5k strike t ik length. l th • Overall Resource 8.1 Mt @ 6.1% HM,, containing g 492,000 , t HM. • 5.5 km strike length • Measured resource upgr
Slide 25: Gingin South Cross Sections
GINGIN SOUTH CROSS SECTIONS I | | 100m) 6525750mN Gingin South Mining Lease E x2 GS0199 GS0314 04 64 Gs0201 GS0167 GS0166 GS0165 GS0170 GS0169 GS0168 z = 3 3 8.6% HM o 6 9 —— I 80m i aa if | | 10.3% HM 13.0% HM am 1am | 16.7% HM] I T 21m 9, x 21 IM% 49 48m 21m 21m "| 24m 2-4 |-30m60m ah = tm = 4-6 r
Slide 26: Gingin South Cross Sections
GINGIN SOUTH CROSS SECTIONS 3 110m o oO 3 g g 3 8 8 8 8 3 8 9 9 i] <] -} 100m 2 = & tc) & 8 & 3 8 © & 90m 10.1% HM = : ——— | = a Ge Go 70m 33m 33m 4im sour on 36m 36m 36m HL me 62-4 ms 4-6 6523200mN & = 6-8 ingi j 3 mum 68-10 Gingin Project Area 8 g ie I =. = I wi Ww HM% § 5 # 2 _— 2-4 $ S a Q cs oO
Slide 27: Chandala - Gingin South Drilling Summary
CHANDALA - GINGIN SOUTH DRILLING SUMMARY • Initial results confirm the high grade nature of Chandala with intercepts including 15m at 11.1% HM from surface and 3m @ 25.9% HM from 16m.
Slide 28: Boonanarring Resource
BOONANARRING RESOURCE • Measured Resource covering 1.9km. • 3.1Mt @ 7.2% HM containing 221,000t HM at a 2.5% cut-off)
Slide 29: Boonanarring Resource and Exploration
BOONANARRING RESOURCE AND EXPLORATION • Target and resource 12.5 x 400m • Southern 2.3km extension of enriched zircon resource (up to 30%)) open p • Northern 7.7km extension has wide spaced encouraging HM intersection
Slide 30: Project Assessment Resource Evaluation
PROJECT ASSESSMENT RESOURCE EVALUATION • Image has 11 JORC resources in the Nth Perth Basin • Focus is on higher HM grade and enhanced Zircon content • Cooljarloo, Cooljarloo North and Gingin areas are the most promising • Compile existing resources data into a continuous mine plan
Slide 31: Project Assessment Resource Evaluation
PROJECT ASSESSMENT RESOURCE EVALUATION • IRR of 32.1%-42.9% • Capital payback within first 18-22 months of operation • NPV of $59M-$98M for the first six resources • Net life of mine cash flow after capital of $170M $259M $170M-$259M • Capital costs of $84M • 3.6Mtpa 3 6Mtpa multi-pit operation over
Slide 32: Perspective
PERSPECTIVE • $0.75B sales WA 2007-8 • 2 Pigment Pi t Plants Pl t • 5 Synthetic Rutile Plants of which 3 are idled • 5 Mineral Separation Plants • Reserves - depleting • Image - growing
Slide 33: Reserve Comparisons - HM (Mt)
RESERVE COMPARISONS - HM (Mt) Reserve Data sourced from latest publicly available Annual Reports - Iluka & Tiwest 2010, Consolidated Rutile 2008 and BeMax 2007.
Slide 34: Corporate Activity Mineral Sands Sector
CORPORATE ACTIVITY MINERAL SANDS S SSSECTOR C O • Basin B i MiMinerals l takeover t k 2002 130M • Magnetic Minerals takeover 2003 26M • Ticor i takeover k 2005 460M • Millenium Chemicals takeover 2007 1.3B • Bemax takeover 2008 300M • Consolidated Rutile takeover 2009 160M • Mergers/Takeovers common
Slide 35: Memoranda of Understanding
MEMORANDA OF UNDERSTANDING • 2 MOU MOU’s s signed with local WA producers • 1 MOU signed with Chinese Hainan Provincial Bureau of Geological Exploration • 1 MOU signed with Diatreme • Objective to facilitate exchange of Image’s Image s data and samples (for metallurgical testing) to explore potentia
Slide 36: Eucla Basin
EUCLA BASIN 0,500,000 mt 525 000 me 2,500,000 mit A Se SSCS SERPENTINE:LAKES® FORREST@LAKES Date:1170872010 image Heavy Mineral Exploration Tenements Eucla Basin, WA 2778000 mie PO Box sas Topogr mage Wen Pet Topographic Image wader Tel 9485 2430 Recent Applications wrnn mace Can eb 375,000 Ee 22 DU
Slide 37: Cyclone Extended
CYCLONE EXTENDED • Cyclone Extended (Image 100%) initial resource: 86Mt @ 1.9%HM (1%( cut-off)) containing g 345,000t , of zircon and 155,000t of rutile + leucoxene. High value assemblage up to 45% zircon • Combined with the contiguous Cyclone deposit: global resource 1.8Mt of zircon and 0.7Mt of ru
Slide 38: High Value Deposit
HIGH VALUE DEPOSIT Source: Diatreme Resources Limited
Slide 39: High Value Deposit
HIGH VALUE DEPOSIT Source: Diatreme Resources Limited
Slide 40: Cyclone Extended
CYCLONE EXTENDED • The Cyclone and Cyclone Extended deposit is 7.4sq km in area with a low clay (slimes) content making it amenable to low cost conventional mineral sands mining and processing techniques g levels of zircon and rutile in the Cyclone • The high y and Cyclone Extended deposit are very
Slide 41: Cyclone Extended Resource Outlines
CYCLONE EXTENDED RESOURCE OUTLINES • Drilling completed mid September to infill resource and identify extensions • Total T t l off 6 6,500m 500 off d drilling illi planned
Slide 42: Cyclone Extended Section A & B
CYCLONE EXTENDED SECTION A & B
Slide 43: Cyclone Extended 2011 Exploration Target
CYCLONE EXTENDED 2011 EXPLORATION TARGET
Slide 44: Cyclone Extended 2011 Exploration Target
CYCLONE EXTENDED 2011 EXPLORATION TARGET
Slide 45: Work Programme
WORK PROGRAMME • July: Gingin South drilling and Res. Update • Aug: Financial Analysis on 6 JORC Resources completed • Aug: Eucla Basin drilling completed September • Nov: New drilling Boonanarring, Gingin South and Red Gully • Nov: Metallurgical test work North Perth and Eucla Basin • Oct: Pit Desi
Slide 46: Conclusions
CONCLUSIONS • Differentiator: Image finding it...others consuming it p and depletingg reserves • Upside: Both corporate (MOU’s) + stand alone • Zircon short supply for at least 3 years. Many Chinese plants do not have enough zircon to operate • Re-rating: mineral sand prices predicted to increase be
Slide 47: IMA is Undervalued
IMA IS UNDERVALUED Code Company EV Project Tonnage Grade HM EV/t of HM $M Mt %HM Mt $/t MDL Mineral Deposits 392 Grande Cote 1030 1.7 17.5 22.4 BSE Base Resources 108 Kwale 146 4.9 7.1 15.1 APG Austpac 47 WIM 150 90 5.9 5.3 8.9 GUN Gunson Resources 43 Coburn 308 1.2 3.7 11.6 DRX Diatreme Resources 3
Slide 48: Contact Details
CONTACT CONTACT DETAILS DETAILS Level 2, 16 Ord Street, West Perth WA 6005 PO Box 644 644, West Perth WA 6872 Ph: 9485 2410 Fax: 9485 2840 g • Email: [email protected] • Web: www.imageres.com.au • ASX: IMA
Slide 49: Image Resources October 2011
gee [Mage resources October 2011
Image Resources NL — Investor Presentation (October 2011) on 6ix