Copper Production to Commence
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.
Company Overview Capital Structure Board of Directors Share on issue (ASX : MRX) 661.6m * David Humann Chairman Market Cap. at 6.5cps $43.0m* Andrew Managing Director Chapman Cash on hand $9m * Shane McBride CFO & Com Sec Geoff Jones Non Executive * Assumes settlement of Glencore transaction, which is Director subject to certain legal due diligence Clive Donner Non Executive Director Glencore To be appointed Shareholders Representative Independence Group 18.9% Institutions 18% Glencore 6.3% Top 20 holding >50%
Investment Overview � 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
Project Title 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.
Leichhardt Stage 1 � 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
Mt Cuthbert Plant & Infrastructure � 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 $40m (and long lead time) � Start up capital works required to plant and infrastructure for production: – Build haul road to Mt Watson – Upgrade village – General maintenance and refurbishment to plant and power station – Earthworks in leach pad area and stormwater dam area – Geotechnical drilling at Mt Watson
Mt Cuthbert SX/EW Production Facility
Stage One Economics Backwardation Spot Price Curve 5,500 tpa Cu 5,500 tpa Cu Nameplate Production Rate 4 yrs 4 yrs Initial Project Life USD$ 1.59 USD $1.59 Operating Costs per lb AUD$ 163m AUD$ 200m Total Revenue AUD$ 52m AUD$ 88m EBIT Assumes Westpac’s copper forward curves and forex forward curves Project NPV @8% Discount AUD$ 41m AUD$ 70m Rate IRR 147% 207%
Copper Price & Stocks LME Copper Price 9,000 � 176 % increase in LME copper price since 1990’s 8,000 � 55% increase in LME copper price in the past 12 months 7,000 6,000 $US/tonne 5,000 4,000 3,000 2,000 1,000 - 0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 9 9 9 9 9 9 9 9 9 9 0 0 0 0 0 0 0 - - - - - - - - - - - - - - - - - p p p p p p p p p p p p p p p p p e e e e e e e e e e e e e e e e e S S S S S S S S S S S S S S S S S LME Copper Stock and Prices Source: IRESS October 2006 10,000 1200 Copper Price LME Stock 9,000 1000 8,000 Short time frame to 7,000 800 000's tonnes US$ / Tonne 6,000 production allows Matrix 5,000 600 to participate in the 4,000 400 current strong copper 3,000 2,000 200 price cycle 1,000 0 0 7 8 9 0 1 2 3 4 5 6 8 9 0 1 2 3 4 5 6 9 9 9 9 9 0 0 0 0 0 0 0 0 0 0 0 0 0 0 - - - - - - - - - - - - - - - - - - - p r p r p r p r p r p r p r p r p r p a a a a a a a a a e e e e e e e e e e M M M M M M M M M S S S S S S S S S S Source: IRESS October 2006
Leichhardt Stage 2 � 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 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
Regional Activity � 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
Xstrata Joint Venture Primary Sulphide Exploration � 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
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 of work at Mt Watson, both on oxide and sulphide targets
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
Summary � 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
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