Building momentum Slide 2 Perilya moving towards achieving critical - - PowerPoint PPT Presentation

Len Jubber Chief Executive Officer Diggers & Dealers Forum 2007

Building momentum

Slide 2

Perilya –moving towards achieving critical mass as a producer

• Strong balance sheet
• Solid earnings capacity at Broken Hill
• Developing new ore bodies at Broken Hill & Flinders
• Investing in “near-mine” exploration activities at

Broken Hill, Flinders and Mount Oxide

• Evaluating M & A opportunities

Top 20 zinc producer and top 10 lead producer

Corporate Broken Hill Flinders Mount Oxide Growth

Slide 3

S trategy for growth

Accelerate development of advanced assets and diversify near-term single asset risk through M&A

Broken Hill Flinders Mount Oxide Corporate Broken Hill Flinders Mount Oxide Growth

Slide 4

Capital S tructure

100 200 300 400 500 600 1 Jul 2006 1 Oct 2006 1 Jan 2007 1 Apr 2007 1 Jul 2007

(CENTS/SHARE)

1000 2000 3000 4000 5000 6000

(US$/TONNE)

Perilya share price vs zinc & lead price (LME Spot)

LEAD ZINC PEM

Geographic analysis of Share Register (31 Jul 2007)

20 40 60 80 Australia UK North America Europe (ex UK) Asia New Zealand Unknown

Shares (m)

ASX: PEM Shares on issue: 196M Options: 4.5M Market Capitalisation: A$882M (Undiluted at $4.50 per share) KEY SHAREHOLDERS: Barclays Global Investors: 9.5% AXA Group: 8.1% Delta Partners: 5.5% Board & Employees: 2.1%

Corporate Broken Hill Flinders Mount Oxide Growth

Slide 5

S trong financial performance

• $157m net cash at June 2007

Corporate Broken Hill Flinders Mount Oxide Growth

Slide 6

S ignificant zinc and lead producer

• 200

400 600 800 1,000 1,200 Xstrata AG Teck Cominco Limited Glencore Zinifex Hindustan Zinc Anglo American plc New Boliden Minera Volcan Votorantim Industrias Penoles Perilya (including projects) Lundin Mining Corporation BHP Billiton Breakwater Resources Kazakhmys Oxiana Resources NL HudBay Minerals Yunnan Chihong Metallurgy Perilya (current) Grupo Mexico Shenzhen Zhongjin Lingnan Omnium Nord Africain Annual zinc production ('000 tonnes per annum)

Annual zinc production by company (top 20)

• 50

100 150 200 250 300 BHP Billiton Xstrata AG The Doe Run Company Teck Cominco Limited Anglo American plc Glencore Minera Volcan Perilya Zinifex Hindustan Zinc Western Mining Industrias Penoles New Boliden Ivernia West Lundin Mining Corporation Shenzhen Zhongjin Lingnan Hunan Nonferrous Ind Yunnan Chihong Metallurgy Exxaro Resources ZGH Boleslaw Annual lead production ('000 tonnes per annum)

Annual lead production by company (top 20)

Corporate Broken Hill Flinders Mount Oxide Growth

Slide 7

Perilya

– substantial earnings capacity & growth potential

150 300 450 600 750 Jul-05 Jul-06 Jul-07

LME Stockpiles (kt)

1,000 2,000 3,000 4,000 5,000

Zinc Price (US$/t)

Zinc Lead Copper

50 100 150 200 250 Jul-05 Jul-06 Jul-07

LME Stockpiles (kt)

2,000 4,000 6,000 8,000 10,000

Copper Price (US$/t)

25 50 75 100 125 J u l

• 5

J u l

• 6

J u l

• 7

LME Stockpiles (kt)

1,000 2,000 3,000 4,000

Lead Price (US$/t)

• No. 1 consensus pick

for next 3-5 years Mount Oxide:

• high grade
• potentially low

development threshold

• resource open in all

directions Production/refining interruptions Broken Hill – 6th largest lead mine :

• resource upside
• captured value through

put options Tight market Price moving in US$3,000 - 4,000 band Low capex growth to top 10 zinc producer status Corporate Broken Hill Flinders Mount Oxide Growth

Slide 8

Quality suite

• f assets
• Rationalised portfolio

to focus on three key assets

• Significant landholding

at each asset

• Low capex

development pipeline

Corporate Broken Hill Flinders Mount Oxide Growth

Slide 9

Broken Hill - performance underpinning growth

• 5th anniversary since acquisition – 642 Kt zinc, 298 Kt lead
• 5 year mine life maintained since acquisition
• Resident workforce providing experience and stability
• Investing in plant / equipment renewal and exploration
• Largest mining lease holder in Broken Hill history

Targeting three new ore sources

Corporate Broken Hill Flinders Mount Oxide Growth

Slide 10

Broken Hill concentrator

• increase production and reduce unit cost

North Mine Deeps 0.2 – 0.4 Mt per annum North Mine Deeps 0.2 – 0.4 Mt per annum North Mine 0.1 – 0.2 Mt per annum North Mine 0.1 – 0.2 Mt per annum Southern Operations 1.9 Mt per annum Southern Operations 1.9 Mt per annum Potosi & Flying Doctor 0.2 – 0.4 Mt per annum Potosi & Flying Doctor 0.2 – 0.4 Mt per annum

evaluating existing

• re feed

Broken Hill Concentrator

2.8 Mt Capacity

Southern Operations North Mine Potosi & Flying Doctor North Mine Deeps

Satellite open pitable deposits ?? Satellite open pitable deposits ??

Corporate Broken Hill Flinders Mount Oxide Growth

Slide 11

Broken Hill

– long history of reserve replenishment

Operating Developing

Potosi Exploration Decline Resource

(as at 30 Jun 2006)

1.6mt @ 13.0% Zn, 3.1% Pb, 43g/t Ag

Project status

Exploration decline 448m from portal

Resource

(as at 30 Jun 2007)

0.52mt @ 5.4% Zn, 7.1% Pb, 72 g/t Ag

Southern Operations & North Mine Reserve

(as at 30 Jun 2006)

11.6mt @ 7.3% Zn 4.8% Pb 47.7g/t Ag

Production rate

1.9Mtpa

Mine life

5 years

Ave annual metal production

120 kt Zn 70 kt Pb 2 Moz Ag

Flying Doctor Open Pit Project status

Feasibility study due Dec Qtr

North Mine Deeps Redevelopment Resource

(as at 30 Jun 2006)

4.2mt @ 11.2% Zn, 13.7% Pb, 214g/t Ag

Project status

Pre-feasibility study due Sept Qtr Corporate Broken Hill Flinders Mount Oxide Growth

Slide 12

Broken Hill exploration

• targeting 10+ year mine life

5 km

North Mine Southern Operations

City

Potosi

Piesses Knob Flying Doctor Round Hill Southern Ops Extensions

1130 Smiths Sam Deeds Henry George Monarch Flat Stirling Vale Exploration targets

Mill

Surface projection of ore bodies Perilya Broken Hill Mining Lease Existing Operations

• A$12M exploration budget 2007/08

−

extend existing resources − identify new satellite ore bodies − major new discovery

Corporate Broken Hill Flinders Mount Oxide Growth

Slide 13

Potosi & Flying Doctor

• targeting 4mt @

10-12% zinc and 3-5% lead

North

Flying Doctor 0.5 Mt @ 5.4% Zn, 7.1% Pb, 73 g/t Ag Corporate Broken Hill Flinders Mount Oxide Growth

Slide 14

Potential to achieve critical mass in Northern lodes

2.3m @ 4.0% Pb/Zn 3.4m @ 7.0% Pb/Zn 3.1m @ 10.0% Pb/Zn s

Corporate Broken Hill Flinders Mount Oxide Investment

Slide 15

Flinders zinc oxide proj ect

Existing infrastructure + direct high grade ore shipping + high Zn price = superior IRR

Rail line Tenements Rail line Tenements

Corporate Broken Hill Flinders Mount Oxide Growth

Slide 16

966Kt @ 31% Zn = 300kt metal

Leigh Creek

Beltana Mine

Reliance Moolooloo Aristotle Aroona II Tom Thumb Aroona Sundown Wallrider

Leigh Creek

Beltana Mine

Reliance Moolooloo Aristotle Aroona II Tom Thumb Aroona Sundown Wallrider Rail Road 5 km Exploration targets Operation Relative scale of current resource Development targets

• Cluster of shallow

deposits

• Currently mining

Beltana

• Drilling along strike

Corporate Broken Hill Flinders Mount Oxide Growth

Slide 17

S eparate stockpiling creates marketing opportunities

Intermediate Grade Product 392kt @ ~ 30% = 110kt metal POTENTIALLY MARKETABLE Low Grade Product 242kt @ 21.5% = 53kt metal UNMARKETABLE High Grade Product 150kt @ 38.1% = 57kt metal MARKETABLE

Stage 1 - Beltana

376kt @ 32.6% Zn = 123 kt metal

Reliance

355kt @ 29.5% Zn = 105 Kt metal

Other

235kt @ 30.2% Zn = 71 Kt metal

Stage 2

Evaluate potential of deposits along strike

Stage 3

Evaluate beneficiation Corporate Broken Hill Flinders Mount Oxide Growth

Slide 18

Beltana base case

– 135% IRR from high grade ore sales only

Capital <$15M

Corporate Broken Hill Flinders Mount Oxide Growth

Slide 19

Beltana upside case

– blended intermediate grade ore + low grade high silicate ore

No additional Cap Ex

EARNINGS

Developing market options for 20% Zn high silicate product Corporate Broken Hill Flinders Mount Oxide Growth

Slide 20

Maximising value = repeat developments along strike +

product flexibility + multiple off take partners

Opportunity to compress timeframe through expanded

• ff take agreements

Deposit style open to repetition along 15km strike

EARNINGS

Marketing key to unlocking latent value

Corporate Broken Hill Flinders Mount Oxide Growth

Slide 21

Mount Oxide copper proj ect

• targeting 300kt Cu
• Resource 4.0Mt of 2.8 % Cu
• Similar style deposit to Mt

Gordon (14.9Mt @ 2.9% Cu)

• Close to existing infrastructure
• Excellent drilling results –

30.4m@ 5.2 Cu, 48ppm Ag and 426ppm Co

• $3.5m drilling budget to Dec

2007 → Pre-feasibility study Mar Q 2008

Corporate Broken Hill Flinders Mount Oxide Growth

Slide 22

Less than 50 holes drilled to date

1m @ 1.6 % Cu 15m @ 1.2 % Cu Haemitite Breccia

Ore Tonnes Cu % Cu Metal Kt % Inferred 1.5 2.5 37 33 Indicated 2.5 3.0 75 67 Total 4.0 Mt 2.8% 112Kt 100% Corporate Broken Hill Flinders Mount Oxide Growth

Slide 23

Open along strike both north, south & below existing resource

Plunge-line of alteration, grade and fold axis Haematite alteration

• utlines

Corporate Broken Hill Flinders Mount Oxide Growth

Slide 24

Zinc production growth profile

Corporate Broken Hill Flinders Mount Oxide Growth

Slide 25

ORGANIC & NEW BUSINESS GROWTH

FLINDERS

• Stockpile 110 kt Zn at

Beltana by Dec 2007

• Cultivate off take market
• Commence direct ore

sales by Dec 2007

• Prove up adjacent

deposits 2007/08 M & A

• Diversify cash flow
• Copper, lead, nickel & zinc

production MOUNT OXIDE

• Triple Cu resources to

300 kt

• Pre feasibility study in

March Q 2008 BROKEN HILL

• Spare mill capacity
• Potosi exploration decline
• Flying Doctor Feasibility

Study

• North Mine Deeps

Pre-feasibility Study

• Near Mine Exploration

$173M cash $16M debt

COMMODITY MARKETS

• Exploit high prices in tight

market Corporate Broken Hill Flinders Mount Oxide Growth

… … … . positioning for

sustainable growth