Anthony Molybdenum Project, Anthony Molybdenum Project, Queensland - - PowerPoint PPT Presentation

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Anthony Molybdenum Project, Anthony Molybdenum Project, Queensland Queensland

April 2010

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This presentation has been prepared by Zamia Gold Mines Limited (‘Zamia’ or ‘the Company’). The information contained is a professional opinion only and is given in good faith. Certain information in this presentation has been derived from third parties and though Zamia has no reason to believe that it is not accurate, reliable or complete, it has not been independently audited or verified by the Company. Any forward-looking statements in this presentation are subject to uncertainties, risk and contingencies which are

• utside the control of, and may be unknown to, Zamia. They relate only to the date of this presentation, they assume

the success of the Company’s strategies, and they are subject to significant regulatory, business, competitive and economic uncertainties and risk. Actual future events may vary materially from the statements and the assumptions

• n which the opinions are based.

The Company makes no representation or warranty as to the accuracy, reliability or completeness of the information in this document and does not take responsibility for updating or correcting any errors or omissions which may become apparent after this is released. To the extent permitted by law, Zamia and its officers, employees, related bodies and agents disclaim all liability, directly, indirectly or consequentially, for any loss or damage suffered by a recipient or other persons arising out of,

• r in connection with, any use or reliance on this presentation or information.

Dr Ken Maiden (MAIG, FAusIMM), Managing Director of Zamia Gold Mines, compiled the technical aspects of this

• report. Ken is a Member of the Australian Institute of Geoscientists and a Fellow of the Australasian Institute of

Mining and Metallurgy. He has sufficient experience to qualify as a Competent Person as defined in the September 2004 edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Dr Maiden consents to the inclusion of the matters in the form and context in which they appear.

Disclaimer

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Directors

• Ken Maiden - Managing Director

Geologist with 37 years professional experience

• Chen Qiang - Non Executive Director

International commodities trader and investor

• Andrew Skinner - Non Executive Director

Chartered accountant

• Alan Humphris - Non Executive Director

Investment Banker

• John Stone - Company Secretary

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Capital Structure - as at 8 April 2010

Holder Name % International Base Metals Limited 9.9 West Minerals Pty Ltd 9.4 Hangzhou Kings Industry Co Limited 9.2 Brownstone International Pty Ltd 9.1 Great Sea Wave Investment Pty Ltd 4.8 Dr Barry John Barker & Mrs Jaye Abbey Barker 2.2 Dr Kenneth John Maiden & Ms Margaret Frances Hayes 1.4 Blackmans & Associates Pty Ltd 1.4 Mr Daniel Thomas Healy 1.3 Aussie Q Resources Limited 1.2

SHARES 136,959,395 OPTIONS 25,370,000

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Molybdenum - Chemical Symbol Mo

Molybdenum (Mo) is a heavy metal (atomic weight almost 96) with an extremely high melting point -

• ver 2,600°C

Steel, alloyed with molybdenum, is stronger & more heat-resistant Its major uses are in stainless steel and high-strength steel alloys High-strength steels are used in applications such as offshore drilling rigs, pipelines, power plants, ships, turbine engines, tools, desalination plants

[Source: Mineral Information Institute] Source: International Molybdenum Association

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Molybdenum - Demand

• Mo demand is expected to increase by 5% per year for the next 20 years
• The price is currently ~ US$17.50 /lb - up from $10.70 in November 2009 - and could increase

to above US$20 /lb in 2011

• JP Morgan predicts a 55% price increase over the next several years due to lack of new supply

and an increase in global industrial production

• E&MJ (March 2010) suggests that the market could move into deficit by 2014, in which case

the price could soar to around US$40 /lb

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World Molybdenum Consumption

Chinese molybdenum consumption doubled between 2005 and 2008. World consumption declined by ~9% in 2009 but China’s consumption rose 5%

Other China Japan USA

• W. Europe

50 100 150 200 250 300 350 400 450 500 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

million lbs Mo

Chinese consumption is expected to increase 9% per annum for the next 5 years

Source: International Molybdenum Association

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Anthony Project - Location

Central Queensland -

• Established mine

infrastructure

• Access to power &

water

• Sealed highway to

project area

• Proximity to port

facilities

• Favourable regulatory

regime

• Environmental issues

minimal

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Zamia’s Exploration Permits

Exploration Permits for Minerals (EPMs) are granted by the Queensland government for 5 years They carry expenditure & reporting commitments They carry exclusive rights for Mining Lease applications They can be extended beyond 5 years with the Minister’s approval Zamia’s exploration tenements & applications cover over 1500 km2

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The black soil plains of Central Queensland have a long hot summer, with temperatures often above 35°, and a mild sunny winter with day-time temperatures around 20°. Rain falls mainly in summer. Coal mining & farming provide good infrastructure. The town of Clermont has 3,000 inhabitants Oblique aerial view of Anthony project area

Project Area

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400 million years ago Today

Simplified Porphyry Model

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Anthony - Geology

Drilling shows igneous intrusions into Anakie Metamorphics (schist). Mo-bearing veins are within the intrusions and extend out into the schist

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Anthony - Geology

A typical porphyry Mo system -

• Multiple igneous intrusions
• Extensive alteration -

covers 1000 m x 700 m

• Multiple vein-forming events
• High grade Mo core
• Zoned to Au & Cu ?

Sawn drill core showing veins of quartz- molybdenite (steely-grey mineral) in strongly-altered schist

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10,100 748 13.5 600 23,200 574 40.4 400 35,200 434 81.1 200 tonnes Mo ppm Mo million tonnes ppm Mo Molybdenum Metal Average Grade Inferred Resource Cut-off Grade

Initial Resource - Sulphide Mo

Resource estimate by Dr P Hellman of resource consultants Hellman & Schofield Pty Ltd, 30 March 2010, reported in accordance with the JORC Code & Guidelines

• The resource assessment shows a significant high grade zone of almost 750 ppm Mo
• The resource has been assigned to the Inferred category pending completion of additional

quality assurance work (currently in progress)

• The deposit is ‘open’ laterally & at depth - i.e. the resource will grow with further drilling
• Current Mo price US$17.50 /lb (~ US$38,500 /tonne)

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Exploration Program

Zamia’s drilling has confirmed a high grade zone within a large Mo deposit. In addition to the main high grade zone, hole RC03 indicates another high grade zone in the east

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Anthony - Grade Distribution

The high grade zone (+600 ppm Mo) near surface would most likely provide the focus for initial mining. Note: Most holes drilled only to shallow depth

Section 2700N showing distribution of Mo grades

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Indicative Financials

Assumed grades & tonnages are based on current understanding of the deposit

Assumptions - Production 5 Mtpa at 1000 ppm Mo for 3 years then 5 Mtpa at 750 ppm Mo for 7 years Recovery 90% A$:US$ exchange rate 0.9 Assume no recovery from Mo oxide overburden Capex A$200 million Opex A$80 million per annum (A$16 /ROM tonne)

(Mtpa = million tonnes per annum)

35 27 19 IRR (%) 219 144 71 NPV (10%) A$ million US$20 /lb US$18 /lb US$16 /lb Mo price

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Processing of Sulphide Mo Ore

• In primary (fresh) ore, Mo occurs as molybdenite [MoS2] - 60% Mo
• Crushing & grinding liberate molybdenite from the host rock
• Froth flotation then separates the molybdenite
• This produces molybdenum concentrate, usually around 50% Mo, which

is then sold to a smelter

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Less than half of the Mo geochemical anomaly has been tested by drilling. Most holes in the central part of the anomaly have been drilled only to shallow depth

Resource Potential

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Resource Potential

Most holes finished in Mo, showing excellent potential to expand the resource at depth. Note the second high-grade zone intersected in the eastern part of the deposit Drill Section 2800N

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Anthony - Oxide Resource

• The Anthony deposit is weathered (oxidised) to 60 – 80m depth
• Oxide resource - 36 million tonnes at 380 ppm Mo (200 ppm Mo cut-off)
• Program to investigate beneficiation & leaching options in progress

Outcrop - veins in weathered schist

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Discovery Potential

Magnetic data indicate two magnetic intrusive bodies. Anthony is related to non- magnetic bodies adjacent to the magnetic intrusions. The geology indicates good potential for discovery of additional molybdenum, gold & copper

Anthony

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Other Targets

Zamia has identified other targets for gold, molybdenum & copper. These will be explored in an ongoing exploration program The magnetic image (at right) shows intrusive bodies in EPM 17488 Mistake Creek. This EPM contains known gold, copper & molybdenum

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• Geological interpretation
• Drilling to expand the resource
• Infill drilling Indicated & Measured resources
• Metallurgical tests on sulphide & oxide material
• Preliminary mine planning
• Infrastructure study (power, water, etc)
• Environmental study
• Financial analysis
• Exploration of other targets

Future Program

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Anthony - Timetable

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Molybdenum in Queensland

• Central Queensland focus
• Excellent infrastructure
• Coherent tenement position
• Major molybdenum discovery
• Large resource + high grade zone
• Pre-feasibility study scheduled
• Other targets being tested

ZAMIA GOLD MINES LIMITED Level 8, 275 George St Sydney NSW 2000 PO Box 4147 Sydney NSW 2001 P: + 61 2 8223 3744 F: + 61 2 8223 3799 info@zamiagold.com.au www.zamiagold.com.au