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A MULTI-COMMODITY PORTFOLIOWITHNEAR TERM DEVELOPMENT OPPORTUNITIES
CORPORATE PRESENTATION MARCH 2017 l AIM:SAV
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TE CORPORATE PRESENTATION PORA MARCH 2017 l AIM:SAV O R C UE IQ B AM Z O A MULTI-COMMODITY M PORTFOLIOWITHNEAR A TERM DEVELOPMENT N OPPORTUNITIES O M D LA N FI N T E N TM S E INV 2 Disclaimer These presentation
TE PORA O R C UE IQ B AM Z O M A N O M D LA N FI N T E N TM S E INV
CORPORATE PRESENTATION MARCH 2017 l AIM:SAV
MOZAMBIQUE OMAN INVESTMENT FINLAND CORPORATE
These presentation slides (“the Slides”) do not comprise an admission document, listing particulars or a prospectus relating to Savannah Resources plc (“the Company”), or any subsidiary of the Company, do not constitute an offer or invitation to purchase
for any such securities. The Slides and the accompanying verbal presentation do not constitute a recommendation regarding any decision to sell or purchase securities in the Company. The Slides and the accompanying verbal presentation are confidential and the Slides are being supplied to you solely for your information and may not be reproduced or distributed to any other person or published, in whole or in part, for any purpose. No reliance may be placed for any purpose whatsoever on the information contained in the Slides and the accompanying verbal presentation or the completeness or accuracy of such information. No representation or warranty, express or implied, is given by
accuracy or completeness of the information or opinions contained in the Slides and the accompanying verbal presentation, and no liability is accepted for any such information or opinions (including in the case of negligence, but excluding any liability for fraud). The Slides contain forward-looking statements, which relate, inter alia, to the Company’s proposed strategy, plans and objectives. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond the control
forward-looking statements. Accordingly, you should not rely on any forward-looking statements and the Company accepts no
The Slides are directed only at persons in member states of the European Economic Area who are “qualified investors” within the meaning of section 86(7) of the Financial Services and Markets Act 2000 (“FSMA”). In addition, in the United Kingdom, these slides are being directed only at persons who fall within the exemptions contained in Articles 19, 48, 49 and 50A of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (such as persons who are authorised or exempt persons within the meaning of the Financial Services and Markets Act 2000 and certain other persons having professional experience relating to investments, high net worth companies, unincorporated associations or partnerships, the trustees of high value trusts and self- certified sophisticated investors) and persons to whom distribution may otherwise lawfully be made. Any investment, investment activity or controlled activity to which the Slides relates is available only to such persons and will be engaged in only with such
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KEY DATA MARKET AIM TICKER SAV SHARE PRICE1 5p MARKET CAP1 £26 million SHARES ON ISSUE1 450,946,455 CASH2 ~£3 million SHAREHOLDERS Al Marjan Limited – 28.44%* David Archer – 5.17% Rémy Welschinger – 4.22%
Prospective multi-commodity portfolio:
with Rio Tinto to develop heavy mineral sands project, which has an initial Indicated and Inferred Mineral Resource Estimate of 4.4 billion tonnes at 3.9% Total Heavy Minerals
targeting first mine development in late 2017
projects, covering an area of 159km² of highly prospective pegmatite terrain. Seven anomalous pegmatites discovered with drilling planned for Q2 2017 Skilled board and management team:
resource assets
with shareholders
1as at27.03.17 2as at 23.02.17
*Expecting to go to 29.99% after the Company’s forthcoming Annual General Meeting
AIM quoted development company with an established multi-commodity portfolio
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Experienced team with proven success in bringing resource assets into production
Maqbool Ali Sultan Non-Exec Director David Archer Chief Executive Officer Imad Kamal Abdul Redha Sultan Non-Exec Director Dale Ferguson Technical Director Matthew King Chairman
Manohar Pundalik Shenoy Alternate for Maqbool Ali Sultan Murtadha Ahmed Sultan Alternate for Imad Kamal Abdul Redha Sultan
David Price Exploration Manager,Oman
Durair A’Shaikh General Manager Business Development Oman Michael McGarty Chief Financial Officer
Paul O’Donoghue Country Manager, Mozambique
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Consortium agreement with:
Initial Indicated and Inferred Mineral Resource Estimate of 4.4 billion tonnes at 3.9% Total Heavy Minerals (THM) World class minerals region
M U T A M B A P R O J E C T
Source: Company photos
Strategy: Focussed on defining a dry mining operation for staged, early development in conjunction with Rio Tinto
Positive price indications for ilmenite:
steady price increases for the rest of the year as a result
improving demand from pigment manufacturers and reductions in supply
accelerating from late 2016 for sulphate ilmenite
& Cristal
and mine development
product streams; titanium dioxide minerals – in the form of ilmenite, rutile and leucoxene; and zircon
beach environments by the specific gravity of the most usually in concentration due to mineral grains
USES
refractive and ultraviolet light absorbing product, which is commonly used in paints, plastics, paper, textiles and inks
manufacture of welding electrodes and can be used in foodstuffs, pharmaceuticals and cosmetics
production of opacifiers, which are used in surface glazes and pigments MOZAMBIQUE OMAN INVESTMENT FINLAND CORPORA TE
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Tinto and Savannah entered into a Consortium Agreement October 2016 to define a potential dry mining operation for staged, early development
beneficial interest and potential to increase to 51% beneficial interest on the achievement of milestones
production to Rio Tinto (or an affiliate)
Terms of the Consortium Agreement: Phase 1: Scoping Study - Savannah 20% participating interest on completion Phase 2: Pre-feasibility Study - Savannah 35% participating interest on completion Phase 3: Feasibility Study – Savannah 51% participating interest on completion Construction Decision
(2) The Mutamba Project includes three deposit areas: Jangamo, Dongane and Ravene. The Chilubane Deposit is located 180km to the south west of the Mutamba Project.
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Initial Indicated and Inferred Mineral Resource Estimate
at 3.9% THM
Covers the Jangamo, Dongane and Ravene deposits Contains 102 million tonnes (“Mt”) of ilmenite, 2.2Mt rutile and 4.7Mt zircon Includes a high-grade portion of 92Mt at 6.2% THM
Additional upside potential
Significant resource expansion potential Resource estimation in respect the Chilubane deposit still to be completed
We believe a mineable inventory of c.200Mt at c.7% THM will provide sufficient scale for the initial mine development, producing c.+600ktpa
mag”) concentrate, either as final products or a bulk HMC
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Notes to above table: Source - referenced company's website * Mineral Estimates on 100% basis. Company has 10% interest, earning up to 51% interest ** Mineral Estimates on 100% basis. Company has 45% interest. *** Reserve not included in resource
Valuable THM% Other/ Non Valuable THM% Mineral Estimate Company Operation Country (Millions Tonnes) Total THM% Ilmenite Rutile Zircon Sub Total Resource Kenmare Moma*** Mozambique 6,472 2.90% 2.40% 0.10% 0.16% 2.66% 0.25% Savannah Resources Mutamba North* Mozambique 4,400 3.90% 2.30% 0.05% 0.11% 2.46% 1.44% Mineral Deposits Grand Cote** Senegal 1,915 1.40% 1.01% 0.04% 0.15% 1.19% 0.21% World Titanium Resources Ranobe Madagacscar 959 6.10% 4.40% 0.14% 0.34% 4.89% 1.21% Base Kwale Kenya 143 4.40% 2.24% 0.57% 0.26% 3.08% 1.32% Reserves Kenmare Moma *** Mozambique 1,564 3.30% 2.70% 0.06% 0.18% 2.94% 0.36% Savannah Resources Mutamba North* Mozambique Mineral Deposits Grand Cote** Senegal 1,294 1.50% 1.08% 0.04% 0.16% 1.28% 0.22% World Titanium Resources Ranobe Madagacscar 161 8.20% 5.93% 0.20% 0.45% 6.58% 1.62% Base Kwale Kenya 110.4 5.00% 2.70% 0.65% 0.30% 3.65% 1.35%
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SCOPING STUDY ENVIRONMENT AL STUDY
Mineral sands expert TZ Minerals International commissioned to conduct a scoping study to evaluate an initial phase, low capex, long life, dry mining operation around a potential 200Mt well gradedresource
Mutamba and Chilubane Projects and high-grade portion of 92Mt at 6.2% THM identified at Ravene Leading Mozambican environmental consultants IMPACTO and ERM have been awarded the contract to conduct environmental studies for the Mutamba and Chilubane Projects, which is expected to take 3-4 months to complete
potential development
Data compilation and a detailed review of the Chilubane deposit is underway to further understand and evaluate the project which is expected to take 6-8 weeks to complete In addition to new staff hired, all of Rio Tinto’s very experienced in-country team have been employed by Savannah and integrated into the in-countryteam
COMMUNITY ENGAGEMENT
Implementing a cohesive community engagement policy to ensure positive relationships with the communities in which we operate, supporting regional development, and ensuring high standards of social and environmental compliance
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The Port of Richards Bay is located approximately 160km North-East of Durban and 465km South of Maputo on the eastern seaboard of South Africa. The combination of specialized cargo handling facilities, fast vessel turnaround, deep water infrastructure, excellent rail links to the hinterland and the large greenfield development potential, has made the Port one world’s leading bulk ports, handling in excess of 80 million tonnesannually.*
Mutamba resource amenable to dry mining
Faster route to production
Lowercost Lowerrisk Flexible Scalable Ability to minehigh grade portions Allows staged approach
*Source: www.afritramp.eu
Cohesive community engagement programme to be implemented alongside
activities
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and ~40km from the ports of Inhambane and Maxixie
and ablution blocks and siteclinic
Laboratory
Sample Storage
Site clinic Site accommodation
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Supporting National Aids Day:
with local international Active development programmes:
programme authorities to support:
with an development agency to develop programmes to:
activity
Maintaining positive relationships with the communities in which we operate Supporting regional development Ensuring high standards of social and environmental compliance Ensuring honest, timely and transparent communication
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Aarja Zuha Lasail Bayda Salahi1 – gold Gaddamah - copper and gold
Mahab 4 - 1.51Mt at a grade of 2.1% copper for 31,500t of contained copper Maqail South – 0.16Mt at a grade of 3.8% copper
BLOCK 4
408km²
BLOCK 5
598km²
produced over 212,000t copper)
Strategy: Targeting a resource inventory to support high margin, low cost, copper/gold operations to commence mine production in late 2017
Highly prospective asset portfolio covering 1,006 km²
Source: Company photos
Exploration Target1
10,700,000t and 29,250,000t grading at between 1.4% and 2.4% copper for 150,000t and 700,000t of contained copper with additional gold credits estimated
1 It is important to note that the potential quantity and grade of the Exploration Target conceptual in nature, there has been insufficient
exploration to estimate a Mineral Resource and it is uncertain if further exploration will result in the estimation of a Mineral Resource.
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for the world’s expanding middle class
new copper demand expected to hit the markets by 2020
into deficit by 2017
will be a key driver of the next copper price cycle
in the cycle
Source: Rio Tintocorporate presentation2015
Demand continues to rise USES OF COPPER
Copper has a wide range of appliances, including:
mile) of copper wire, with 20-55kg copper
GraphproducedJune 2015 GraphproducedJune 2015
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Oman offers a compelling investment opportunity,
mine development options ✓Outstanding geology ✓VMS Clusters of 1Mt -15Mt - Oman hosts one of the largest concentrations of VMS deposits in the world ✓Metallurgically simple ores ✓Medium to high-grade deposits ✓Pro-mining Government ✓Power ✓Port ✓Roads ✓Low Fuel Cost
Source: Company data
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Block 5: established resource: Mahab 4 and Maqail South
JORC RESOURCE
Current Indicated and Inferred JORC Mineral Resource of 1.7Mt at 2.2% copper: 1.51Mt at 2.1% copper at Mahab 4 0.16Mt at 3.8% at Maqail South
FURTHER UPSIDE
Mahab 4 deposit remains open along strike to north and both up and down dip
23.8g/t silver and 16m at0.85%Cu
5.2% copper and 56.35m at 6.2% copper
Maqail South has returned intersects of 6.68m at 7.42% Cu and remains open to the west
HIGH
RECOVERIES
Preliminary metallurgical test work highlights the commercial appeal of Mahab 4, with work confirming that a saleable copper concentrate can be produced with recoveries exceeding 90%
MINING LICENCES
Two mining licence applications submitted to the Public Authority of Mining in the Sultanate
Preparation for Environmental Studies commenced October 2016
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Resource drill programme (eight holes) completed in October 2016 to improve confidence in resource estimate and collect material for metallurgical testing. New results from the drill programme are shown in blue:
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Chalcopyrite identified as the sole copper bearing mineral, which is likely to lead to a simple, quick and relatively low cost flotation process to concentrate the copper ('Cu') Test data indicates that any potential development should enjoy favourable processing costs as the resource at Mahab 4 appears to be relatively soft and requires relatively low primary milling powerrequirements Test work also indicates relatively low equipment liner and grinding media wear due to low abrasionrates Initial rougher flotation test work indicated potential recoveries of around 95% at moderate grind sizes Rougher cleaner flotation at 38microns indicated that a saleable copper concentrate of over 23% can be achieved with recoveries over 90% with additional gold and silver credits There is potential to also produce a zinc product but further work is required to confirm that this is possible without affecting the copper grades andrecoveries Additional test work is now underway to refine the process and to try and further improve the recoveries and overall copper concentrate grades
“The results from this work point towards a relatively simple float process and a clean and desirable copper concentrate, which is likely to be keenly sought after by off-takers and smelters.”
David Archer, CEO
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A N O M OMAN
✓ Preparation of scoping document for Environmental Impact Assessment commenced ✓ Community Meeting held at Wali Office
N.B. The mine layout is conceptual in nature
Underground mining is more expensive than open pit mining but has some significant benefits
potential impacts on our neighbours
smaller and easier to manage
easier to manage
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Results from the October 2016 drill campaign point towards a potential expansion of the current high-grade portions of Maqail South. Savannah is targeting an updated resource estimate in Q1 2017. New results are shown in blue:
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Eight holes completed October 2016 to improve confidence in resource estimate. New results from the drill programme are shown in blue:
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✓Introduction meetings held with MECA and Ministry of Water Resources ✓Scoping Assessment for Environmental Impact assessment submitted to MECA ✓Letters of No objection received from four ministries ROP , Defence, Tourism, and Culture ✓EIA process commenced
N.B. The mine layout is conceptual in nature
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Of the targets identified at Block 4, four were part
produced over 190,000t copper
the past 10 years have been identified by VTEM
Source: Company data
AARJA LASAIL BAYDA ZUHA
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supportive of rapid development
resource estimate:
1.9g/t gold and 53.8g/t silver from 103m
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underground operation
disseminated sulphide mineralisation
mineralisation remains
0.69% copper and 0.1g/t gold in 16B4DD003 from 87m, including 4m at 1.56% copper and 5.1m at 1.22% copper – results suggest asset could be developed as a larger tonnage, lower grade operation
Ground EM at Bayda
where historically 1Mt at 3% copper was mined from a small underground during the early 1990’s
and will be completed as a precursor to further RC and diamond drilling
Map shows the Bayda VTEM anomaly andplanned Fixed Loop Transient Electromagnetic (“FLTEM”) survey location
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programs
has continued with its community engagement including having regular meeting with Sheikhs and local officials
projects
framework to work together
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2017
2018
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Uniquely attractive copper development project poised to deliver into stronger copper prices in 2017/18 Fast-track Oman projects to start mining in late 2017 JORC Exploration Target of 10.7 to 29.3Mt at 1.4-2.4% copper and 0.38g/t gold Exploration Target of 151,500 - 702,500 tonnes contained copper and 55,000 - 362,000
Superb infrastructure setting – nearby power, copper smelter (under care & maintenance) and export port hub with global copper concentrate blending 30km by road Low capex with rapid payback period projected Low opex projected, including low fuel costs, with moderate high-grades expected
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STRATEGY: determine lithium resource potential to take advantage of strong market dynamics from the burgeoning battery market
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There is a revolution underway in how we generate and use energy; as such, the demand for materials such as lithium, which is a key component in new energy storage solutions, is rising at record rates
By 2022 there will be 3x the number of Electric Vehicle models on sale as in 20161
“new energy” vehicles on the road by 20202 Consumer demand from smartphones, tablets, laptops and power tools was 27.5kt in 2014 and is expected to grow at more than 10%1 Macquarie have forecast a CAGR of 9% to 2021 for lithium, with new energy vehicle batteries leading demand at a 31% CAGR to 2021, at which point they would account for one-third of all lithium demand versus just one-tenth today Global lithium demand was 184,000t in 2015. Based
Deutsche Bank’s analysis, global lithium demand will increase to 534,000t by 2025, with batteries accounting for 70% of global demand Prices expected to remain >$6,000/t lithium carbonate equivalent* Energy storage represents a small part of current lithium demand, but growth potential is high with renewable sources set to potentially rival EV growth rates3
1 Liberum: The Lithium Landscape, May 2016 | 2 Berenberg: Battery adoption at the tipping point – Feb 16 | 3 Deutsche Bank: Company Data
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▪ Excellent access to high quality infrastructure ▪ Close to potential end-customers, inc. battery producers ▪ Low sovereign risk and excellent mining law - Finland ranked number one in the 2014 Fraser Institute of 122 jurisdictions around the world
(it maintained its position in in the top 10 mining jurisdictions in the 2015 index)
▪ Region proven to host hard rock lithium deposits ▪ Finnish company Keliber Oy has defined a resource of 5.5Mt at 1.19% Li2O in the Kaustinen region ▪ Finland has access to good geological and exploration data, has favourable tectonic history for the formation of Lithium-Cesium-T antalum ('LCT') pegmatites, a history of lithium mining and has been poorly explored for lithium to date
Source: Company Data
Europe is a major importer of lithium consuming 24% of global market (second
supply
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Somero Lithium Project – 60.5km²
approximately 100km northwest of the Finnish capital Helsinki
Somero-Tammela rare earth pegmatite belts
at least 56 complex pegmatites enriched in lithium, niobium and tantalum, reaching up to 1.2km in length and 50m wide
Minerals Kietyonmaki and Hirvikalio lithium deposits
Finnish geological survey has confirmed the presence
the lithium minerals but no geochemical sampling was completed making these a high priority for sampling
Erajarvi Lithium Project – 98.5km²
▪ Located approximately 200km north of the Finnish capital Helsinki, near the town of Orivesi ▪ Historical geological mapping by the Finnish geological survey has confirmed the presence of lithium rich minerals ▪ Dykes within the tenement reach up to 600m length and 50m wide ▪ About 61 complex pegmatites have been mapped in the area to date – they contain a series of complex and simple pegmatites ▪ Complex pegmatites often distinctly zoned and contain lithium rich minerals including spodumene and lepidolite
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samples) and Erajarvi (288 samples)
anomalous lithium - two on Somero and five on Erajarvi
highlighted:
up to 4.47% lithium oxide ('Li2O') at the Torkkamaki Prospect and mineralisation traced over 150m along strike and remaining open
up to 1.56% Li2O at the Viitaniemi Prospect and mineralisation traced for over 350m before it was covered by glacial till
petalite, spodumene and lepidolite were all identified in hand specimens
seven anomalous pegmatites in readiness for drilling is being planned for Q2 2017 (following winter)
Exploration programme including data compilation, geological mapping and surface sampling aiming to generate drill ready targets during 2016
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HIGHLY PROSPECTIVE LITHIUM MARKET Strong market dynamics from the burgeoning battery market FAVOURABLE PRICING MARKET significant growth forecast, prices expected to remain >US$6,000/t lithium carbonate equivalent A TTRACTIVE LOCATION Finland has low sovereign risk, a supportive mining code and has been proven to host commercial lithium deposits Excellent access to high quality infrastructure and close to potential end-customers, such as battery producers 2 ATTRACTIVE PROJECTS covering an area of 159km² of highly prospective lithium terrain in Finland PROVEN MINERALISATION Key lithium minerals spodumene, lepidolite and petalite identified DEFINED PLAN to determine lithium resource potential – drill targets to be identified 2017 MUTLI-COMMODITY EXPOSURE Complements SAV’s established development portfolio – copper in Oman and mineral sands in Mozambique
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Active growth strategy in place to build a multi-commodity, geographically diverse development and production company Proven commercial potential of heavy minerals sands project in Mozambique with additional upside potential (being developed in partnership with Rio Tinto) Highly skilled development team with proven track record of mine development and investment success Copper mining on track to commence in Oman late 2017 Two attractive lithium projects in Finland with defined development plans Building the value of the company with high tempo activity across asset portfolio Supportive cornerstone investor
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D LA N FI N
DavidArcher CEO,SavannahResourcesPlc E:info@savannahresources.com
Source: Company photos
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Matthew King Chairman
audit – prev. Head of Operational Riskat HSBC
peer-to-peer lending platform andAllsop MyRa Ltd, a provider of specialistrisk
David Archer Chief Executive Officer
industry, with specific expertise in developing and operating copper/gold mines
and PowerTel Limited, and is Senior Independent Director of Anglo Pacific Group Plc
Maqbool Ali Sultan Non-Exec Director
experience in Oman, the Middle Eastand internationally
for 20 years following role as President of the Oman Chamber of Commerce andIndustry
Dale Ferguson Technical Director
experience in the resources industry
exploration, resource delineation, feasibility studies, due diligence investigations and mine development and operations
Imad Kamal Abdul Redha Sultan, Non-Exec Director
previously a director on the boards of the National Bank of Oman and Ominvest in the past, and currently a director of National Hospitality Institute & Oman ArabBank
Experienced team with proven success in bringing resource assets into production
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MANAGEMENT
Paul O’Donoghue Country Manager, Mozambique
since Oct 2013
Durair A’Shaikh General Manager Business Development Oman
mineralisation
department
Michael McGarty Chief Financial Officer
and finance experience, including publicly listed and multi-national companies
transactions, fundraising and resource development
David Price Exploration Manager, Oman
the mining and exploration business
nickel, copper, lead/zinc, bauxite & manganese
exploration activities in Oman since June 2014
BOARD ALTERNATES
Manohar PundalikShenoy Alternate for Maqbool Ali Sultan
experience
and a member it’s Finance and Investment sub- committees
corporations as Finance Director / CFO
Murtadha Ahmed Sultan Alternate for Imad Kamal Abdul Redha Sultan
board level experience and extensive experience working with publicly limited companies
Public Authority for Investment Promotion & Export Development (ITHRAA) and Corporate Governance – Capital Market Authority (CMA)