2013 AGM Ma na g ing Dire c to r’ s Pre se nta tio n No ve mb e r 2013
Disc la ime r T his ma te ria l c o nta ins c e rta in fo re c a sts a nd fo rwa rd -lo o king info rma tio n, inc luding re g a rding po ssib le o r a ssume d future pe rfo rma nc e , c o sts, pro duc tio n le ve ls o r ra te s, pric e s, re se rve s a nd re so urc e s o r po te ntia l g ro wth o f Strike Re so urc e s, industry g ro wth o r o the r tre nd pro je c tio ns. Suc h fo re c a sts a nd info rma tio n a re no t a g ua ra nte e o f future pe rfo rma nc e a nd invo lve unkno wn risks a nd unc e rta intie s, a s we ll a s o the r fa c to rs, ma ny o f whic h a re b e yo nd the c o ntro l o f Strike Re so urc e s. Ac tua l re sults a nd de ve lo pme nts ma y diffe r ma te ria lly fro m tho se e xpre sse d o r implie d b y the se fo rwa rd -lo o king sta te me nts de pe nding o n a va rie ty o f fa c to rs. No thing in this ma te ria l sho uld b e c o nstrue d a s e ithe r a n o ffe r to se ll o r a so lic ita tio n o f a n o ffe r to b uy o r se ll se c uritie s. F ull JORC c o mpe te nt pe rso n sta te me nts fo r this pre se nta tio n a re c o nta ine d in Appe ndix 1, a lo ng side re le va nt re so urc e ta b le s. 2
Strike Re sourc e s – c re a ting va lue by de ve loping a la rg e sc a le hig h g ra de iron ore proje c t in Pe ru I ro n o re pro je c t de ve lo pe r, fo c usse d o n the hig h g ra de (57% F e ) la rg e sc a le (20 Mtpa ) Apurima c ma g ne tite pro je c t in Pe ru We ll funde d - $13 millio n c a sh e no ug h fo r 12 – 18 mo nths o f de ve lo pme nt a nd e xplo ra tio n a c tivity Ac q uire d 100% c o ntro l o f fla g ship pro je c t, MD re -b a se d to Pe ru Ne a r te rm o b je c tive s - de fine 500Mt o f re so urc e s fro m e xisting de po sits a nd e xplo ra tio n ta rg e ts a t Apurima c a nd de mo nstra te pro o f o f c o nc e pt fo r sma ll sc a le ne a r te rm mining K e y to me e ting o b je c tive s will b e suc c e ssful se c uring o f c o mmunity a nd g o ve rnme nt a ppro va ls, with po sitive pro g re ss to da te 3
Ag e nda I ro n Ore Ma rke t Why Pe ru? Co rpo ra te Histo ry Pro je c ts 4
T he iron ore ma rke t c ontinue s to show re silie nc e a s othe r c ommodity pric e s fa ll Ir on Or e Pr ic e Re mains F ir m China c o ntinue s to Re st o f the wo rld still g ro w, no w c o ming to c o me China e xpe c te d to o ff a ve ry hig h b a se pro duc e a ro und 1 •Sig nific a nt urb a nisa tio n a nd g ro wth still to c o me •Ab so lute g ro wth ra te s b illio n to nne s o f ste e l in Afric a a nd I ndia slo wing , b ut e ve n b y 2025, up fro m 735 mo de st ra te s no w millio n to nne s g e ne ra te la rg e c urre ntly inc re me nta l vo lume de ma nd Ir on Or e Pr ic e Conse nsus F or e c asts ($US) ADDIT IONAL SUPPL Y ST IL L RE QUIRE D F Y13 F Y14 F Y15 F Y16 F Y17 $132.73 $125.36 $118.42 $107.30 $94.50 So urc e : CapitalI Q 5
Pe ru is a n a ttra c tive de stina tion for mining inve stme nt Pe ru is g e o g ra phic a lly ve ry we ll pla c e d fo r e xpo rting mine ra ls to China a nd USA • L e g a l re fo rms c a rrie d o ut in e a rly 2000s - mo de lle d o n I nte rna tio na l b e st pra c tic e • Aim to pro vide sta b le e nviro nme nt to se c ure me dium to lo ng te rm T he Pe ru Go ve rnme nt ha s inve stme nt a stro ng c o mmitme nt to • No disc rimina tio n b e twe e n na tio na l a nd fo re ig n inve sto rs e nc o ura g ing inte rna tio na l • I rre vo c a b le Mining Co nc e ssio ns inve stme nt in the mining • F re e a va ila b ility o f fo re ig n c urre nc y tra nsfe rs, fre e tra nsfe r o f c a pita l se c to r • Arb itra tio n syste m to re so lve c o nflic ts • I nte rna tio na lly c o mpe titive ta x a nd ro ya lty ra te s 6
Pe ru is a g loba lly sig nific a nt produc e r of c ommoditie s with sig nific a nt ne w proje c ts pla nne d ove r the ne xt 10 ye a rs Rank – L atin Rank – Pe ru is a g lo b a lly sig nific a nt pro duc e r o f mine ra ls Mine r al Ame r ic a Wor ldwide • Pe ru is the la rg e st pro duc e r o f g o ld, zinc , tin a nd le a d in L a tin Zinc 1 3 Ame ric a • T hird la rg e st pro duc e r o f c o ppe r, silve r, zinc a nd tin wo rldwide T in 1 3 • Ove r 400 mining lic e nc e s no w unde r e xplo ra tio n L e a d 1 3 Mining I nve stme nt c o ntinue s to a dva nc e in Pe ru Go ld 1 6 • US$54.6 b illio n in inve stme nt pla nne d o ve r ne xt 10 ye a rs (20% of whic h is planne d for the Apur imac r e gion) Silve r 2 3 • Mining inve stme nt in Pe ru re a c he d a n histo ric a l re c o rd in 2012 o f mo re tha n US$8.5 b illio n - inc luding US$US1.2 b illio n fo r e xpa nsio n o f Ma rc o na iro n o re mine b y Sho ug a ng Hie rro Co ppe r 2 3 • I n the la st de c a de , Pe ruvia n mining e xpo rts ha ve inc re a se d in va lue e ig ht time s, a nd no w a c c o unt fo r o ve r 65% o f to ta l So urc e : Mining Ye a rb o o k 2012.ME M. e xpo rts 7
Pe ru ha s the strong e st g rowth of a ll of the South Ame ric a n c ountrie s a nd a ve ry he a lthy inve stme nt ra ting se c ond only to Chile in the re g ion Inve stme nt gr ade L atin Ame ric a b e nc hmarking Countr y S&P F itc h Moody’s Chile A+ A+ Aa3 Pe r u BBB+ BBB+ Baa2 Me xic o BBB BBB Baa1 Br azil BBB BBB Baa2 Columbia BBB- BBB- Baa3 Bolivia BB- B+ Ba3 Ve ne zue la B+ B+ B2 Ar ge ntina B B B3 E c uador B B- Caa2 8
Str ike ’s shar e pr ic e histor y indic ate s tr e me ndous upside pote ntial, now it has 100% pr oje c t owne r ship, c ommunity ac c e ss and ir on pr ic e s r e main str ong SRK Shar e Pr ic e $3.00 April 2008 Iron Ore Pric e s T hird pa rty offe r toda y a re similar to va lue s Strike ’s F e b 2007 pric e s in 2008 inte re st in Pe ru I nc re a se s to $2.50 Proje c ts a t $450m 68% inte re st in Pro je c ts $2.00 July 2008 Apurima c F e b 2010 Pre -F e a sib ility Re so urc e inc re a se Study Co mple te d $1.50 a t Apurima c 269mt @ 57%fe De c 2012 Se pt 2013 $1.00 July 2006 Inc re a se s to Community Ac q uire s 51% 100% inte re st in a c c e ss inte re st in Apurimac a nd a pprova ls Apurima c a nd Cusc o Proje c ts g ra nte d $0.50 Cusc o Pro je c ts $0.00 9
Ac hie ve me nts during 2013 Co nso lida te d o wne rship o f Pe ru pro je c ts - SRK no w 100% E xite d I ndo ne sia c o a l pro je c t - $4,300,000 c a sh re c e ive d Pe rth b a se d c o rpo ra te o ve rhe a d sig nific a ntly re duc e d MD re lo c a te d to Pe ru - whe re the a c tio n is! I mpo rta nt c o mmunity a ppro va ls se c ure d Cue rvo re so urc e inve nto ry sig nific a ntly e xpa nde d Ma inta ine d stro ng c a sh b a la nc e 10
Strike ’s proje c ts a re foc usse d in the hig hly prospe c tive Apurima c a nd Cusc o re g ions in southe rn Pe ru, home to se ve ra l world c la ss proje c ts Apurima c (100% Strike ) F la g ship pro je c t • Ve ry hig h g ra de Ma g ne tite o re : • 269Mt a t 57.3% F e Sho rt te rm ta rg e t o f 500 Mt • Pro duc tio n T a rg e t: 20 Mtpa • 69,000 ha o f c o nc e ssio ns • Cusc o (100% Str ike ) 104Mt a t 32.6% F e with • e xplo ra tio n upside 17,000 ha o f c o nc e ssio ns • Ce rro Cc opa ne 395.6 Mt a t a n a ve ra g e g ra de o f • 43.8% iro n. 3 rd pa rty o pe ra te d • 11
Pr e - fe asibility study c omple te d in 2008 1 (update d in 2010 2 ) on Apur imac pr oje c t indic ate s c le ar pote ntial for de ve lopme nt of a wor ld c lass ir on or e pr oje c t Pr oduc tion tar ge t 15 – 20 million tonne s pe r ye ar of ir on- or e c onc e ntr ate • Ba se c a se o f 20Mtpa o f c o nc e ntra te pro duc e d b y o pe n pit mining a nd pro c e ssing 20 – 27Mtpa o f o re • T ra nspo rt o f the hig h g ra de (>66%F e ) pro duc t to the c o a st via a slurry pipe line fo r drying a nd shipme nt to c usto me rs E stimate d c apital e xpe nditur e (2010) of US$ 2.6 – 2.9 billion, c ompe titive with othe r major ir on or e pr oje c ts • Va rio us pro duc tio n a nd tra nspo rt o ptio ns we re c o nside re d, inc luding Ra il, Ro pe Co nve yo r (lump a nd fine s) a nd Slurry Pipe line (c o nc e ntra te ) • Slurry Pipe line o ffe rs lo we st c a pita l c o st Attr ac tive life - of- mine ope r ating e xpe nse s (2010) of US$ 17 – 20 pe r tonne of pr oduc t • Ope n c ut mine , lo w strip ra tio (1.2 to 1.8) de live rs lo w mining c o sts • Ore is hig h g ra de , c o a rse g ra ine d ma g ne tite whic h lib e ra te s e a sily • Hig h Ma ss Re c o ve rie s (>60%) a t c o a rse g rind size (>500 mic ro ns) le a ding to lo w pro c e ssing c o sts • Slurry pipe line pro vide s lo w c o st tra nspo rt me c ha nism 12
Strike ’s Apurima c proje c t be nc hma rks we ll a g a inst othe r c ompa ra ble iron ore proje c ts a round the world Hig h Gra de L ow Ope ra ting Costs L ow Ca pita l Inte nsity 13
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