Copper Production to Commence Disclaimer & forward looking - - PowerPoint PPT Presentation

SLIDE 1

Copper Production to Commence

SLIDE 2

Disclaimer & forward looking statement

The material used is this presentation is intended to be a summary of selected geological data, current and proposed activities, as well as resource estimates based on information available to Matrix at the time. It does not include all available information and should not be used in isolation as a basis to invest in

• Matrix. Any potential investors should refer to Matrix Metals Limited ASX releases

and statutory reports before considering investing in the company. The presentation includes information relating to a feasibility study which is in progress and includes “forward looking statements’ which include, without limitation, estimates of potential copper production based on mineral resources that are currently being evaluated. While the Company has reasonable basis on which to express these estimates, any forward looking statement is subject to risk. Risks include, without limitation: copper metal prices, foreign exchange rate movements, project funding capacity, copper product offtake contracts and estimates of future capital and operating costs. The Company does not undertake to release publicly any revisions to forward looking statements included in this presentation to reflect events or results after the date of this presentation, except as may be required under applicable securities laws.

SLIDE 3

SLIDE 4

Company Overview

Share on issue (ASX : MRX) Market Cap. at 6.5cps Cash on hand 661.6m * $43.0m* $9m * Independence Group Institutions Glencore Top 20 holding 18.9% 18% 6.3% >50% Board of Directors

* Assumes settlement of Glencore transaction, which is subject to certain legal due diligence

David Humann Chairman Andrew Chapman Managing Director Shane McBride CFO & Com Sec Geoff Jones Non Executive Director Clive Donner Non Executive Director Glencore Representative To be appointed

Capital Structure Shareholders

SLIDE 5

• Copper production at Mt Cuthbert commences by Q3 2007
• Project funding in place, predominately from Glencore International AG
• Development work has commenced
• Matrix 100% unhedged and exposed to record copper prices
• Matrix primary copper sulphide and copper oxide exploration programs

have commenced this quarter

• Xstrata Copper commencing primary copper sulphide drilling program in

early 2007

• Deep Yellow commencing uranium drilling program in November 2006

Investment Overview

SLIDE 6

All activities encompassed by the current project scope and future growth activities will be referred to as:

Leichhardt

Leichhardt includes :

The Mt Cuthbert Processing Facility The Mt Watson Deposit and all other tenements in the area north of the Mt Isa/Cloncurry road in North West Queensland.

Project Title

SLIDE 7

• Mt Cuthbert operations to treat Mt Watson ore
• Approvals, Licences and Native Title agreement in place
• 4-5 year Stage One mine life
• Low start up capital requirement $10m
• Stage One utilising Mt Watson mining inventory of 2.1Mt @ 1.2 % Cu of the

existing 8 Mt resource

• Stage One production of 5,500tpa of copper cathode
• Mining to commence in H1 2007
• Copper production by Q3 2007
• Development, $15m, fully funded by Glencore ($2.5m equity + $10m loan)

and major shareholders

• Mt Watson mining inventory characterised by surface exposure and very

favourable metallurgy

Leichhardt Stage 1

SLIDE 8

• SX/EW Processing Plant 5,500tpa copper cathode capacity
• Power Station, camp, office complex, laboratory, warehouse, acid and

fuel storage + roads etc

• Plant & infrastructure on care and maintenance and in good order
• Replacement value in excess of $40m (and long lead time)
• Start up capital works required to plant and infrastructure for production:

– Build haul road to Mt Watson – Upgrade village – General maintenance and refurbishment to plant and power station – Earthworks in leach pad area and stormwater dam area – Geotechnical drilling at Mt Watson

Mt Cuthbert Plant & Infrastructure

SLIDE 9

Mt Cuthbert SX/EW Production Facility

SLIDE 10

Stage One Economics

Assumes Westpac’s copper forward curves and forex forward curves

Backwardation Curve Spot Price Nameplate Production Rate 5,500 tpa Cu 5,500 tpa Cu Initial Project Life 4 yrs 4 yrs Operating Costs per lb USD$ 1.59 USD $1.59 Total Revenue AUD$ 163m AUD$ 200m EBIT AUD$ 52m AUD$ 88m Project NPV @8% Discount Rate AUD$ 41m AUD$ 70m IRR 147% 207%

SLIDE 11

LME Copper Stock and Prices

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US$ / Tonne 200 400 600 800 1000 1200 000's tonnes Copper Price LME Stock

• 176 % increase in LME copper price since 1990’s
• 55% increase in LME copper price in the past 12 months

LME Copper Price

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$US/tonne

Copper Price & Stocks

Short time frame to production allows Matrix to participate in the current strong copper price cycle

Source: IRESS October 2006 Source: IRESS October 2006

SLIDE 12

• Upgrade Plant capacity from 5,500tpa to 10,000tpa of copper cathode
• Utilising EW equipment already owned by Matrix
• Plant upgrade capital estimated at less than $5m
• Stage One development utilises only 2.1Mt @ 1.2% Cu of the existing Mt Watson

resource of 8Mt @ 1% Cu

• Additional ore feed from anticipated growth at Mt Watson and other existing

deposits

Leichhardt Stage 2

SLIDE 13

Leichhardt Regional Exploration

• Resource Width & Grade Intersections at Earl, Tewinga, Mt Wonder and

Boomerang

• Ongoing potential at Mt Watson and Mt Cuthbert
• Proven Primary Sulphide Potential

SLIDE 14

• Xstrata Smelter upgrades and

exploration

• CuDeco discovery
• Summit and Paladin Uranium

exploration

• Xstrata Copper / Matrix copper

sulphide JV

• Deep Yellow / Matrix Uranium JV
• CopperCo project development
• Universal Resources Roseby

Project

• Exco Resources Production Plans

Regional Activity

SLIDE 15

• Xstrata and Matrix entered into a

JV for primary copper sulphide exploration in September 2006

• Covers the McCabe ML and

surrounding EPM

• Xstrata Copper spend $5m

to earn 51%, then a further $10m or completion of BFS to earn 75%

• Field work underway, geophysics

(IP), mapping, sampling

• Drilling to commence at McCabe in

February 07

Xstrata Joint Venture

Primary Sulphide Exploration

SLIDE 16

Matrix Primary Sulphide Exploration

• Regional Exploration Program

commenced in 2005

• A host of new oxide copper,

primary sulphide copper, copper/gold, gold only and uranium prospects identified

• Drilling now underway at three

prospects: Sierra, Chopper Ridge and Greenmount Deeps

• Program will recommence in early

2007, including recommencement

• f work at Mt Watson, both on
• xide and sulphide targets

SLIDE 17

Deep Yellow JV Uranium Exploration

• Historical Uranium Producing

Region ~ Mary Kathleen and Summit Project

• DYL selected as partner from

competitive process

• Deep Yellow and Matrix entered

into a JV for uranium exploration in February 2006

• DYL earning 80% with buy out

provision for last 20%

• Commenced field work in mid

2006, with immediate success

• DYL drilling at “Lochness” to

commence next week

SLIDE 18

• Copper production to commence at

Leichhardt by Q3 2007

• Glencore funding package
• Low capital, short lead time with

little development risk

• Production profile to grow
• Matrix 100% unhedged and exposed

to record copper prices

• Matrix copper sulphide and oxide

exploration programs ongoing

• Xstrata Copper sulphide exploration

fieldwork underway during February 07

• Deep Yellow uranium exploration

program to commence next week

Summary