Endocoal Limited
INVESTOR UPDATE
September 2012 HONG KONG
AN EMERGING BOWEN BASIN COAL DEVELOPER
www.endocoal.com.au
Endocoal Limited INVESTOR UPDATE September 2012 HONG KONG AN - - PowerPoint PPT Presentation
Endocoal Limited INVESTOR UPDATE September 2012 HONG KONG AN EMERGING BOWEN BASIN COAL DEVELOPER www.endocoal.com.au DISCLAIMER This presentation has been prepared and issued by Endocoal Limited, ACN 132 183 281 (Endocoal or Competent
Endocoal Limited
INVESTOR UPDATE
September 2012 HONG KONG
AN EMERGING BOWEN BASIN COAL DEVELOPER
www.endocoal.com.au
This presentation has been prepared and issued by Endocoal Limited, ACN 132 183 281 (“Endocoal” or “Company”) to assist it in informing interested parties about the Company. The information in this document is in summary form and should not be relied upon as a complete and accurate representation of any matters that a potential investor should consider in evaluating Endocoal. While management has taken every effort to ensure the accuracy of the material in the presentation, neither the Company nor its advisers has verified the accuracy or completeness of the information, or any statements and opinions contained in this presentation. This presentation is provided for information purposes only, and to the maximum extent permitted by law, Endocoal, its officers and management exclude and disclaim any liability in respect of the authenticity, validity, accuracy, suitability or completeness of, or any errors in or
reliance on the presentation. The presentation may contain forward looking statements. The words ‘anticipate’, ‘believe’, ‘expect’, ‘project’, ‘forecast’, ‘estimate’, ‘likely’, ‘intend’, ‘should’, ‘could’, ‘may’, ‘target’, ‘plan’ and other similar expressions are intended to identify forward‐looking statements. Indications of, and guidance on, future earnings and financial position and performance are also forward‐looking statements. Forward‐looking statements are subject to risk factors associated with the Company’s business, many of which are beyond the control of the Company. It is believed that the expectations reflected in these statements are reasonable but they may be affected by a variety of variables and changes in underlying assumptions which could cause actual results or trends to differ materially from those expressed or implied in such
any of its directors, employees, servants, advisers or agents assume any obligation to update such information This presentation should not be considered as an offer or invitation to subscribe for or purchase any securities in the Company or as an inducement to make an offer or invitation with respect to those
this presentation. You should not act and refrain from acting in reliance on this presentation material. Nothing contained in this presentation constitutes investment, legal, tax or other advice. This overview of Endocoal does not purport to be all inclusive or to contain all information which its recipients may require in order to make an informed assessment of the Company’s prospects. Before making an investment decision, you should conduct, with the assistance of your broker or other financial or professional adviser, your own investigation in light of your particular investment needs, objectives and financial circumstances and perform your own analysis in order to satisfy yourself as to the accuracy and completeness of the information, statements and opinions contained in this presentation and making any investment decision. References to dollars, cents or $ in this presentation are to Australian currency, unless otherwise stated.
2
DISCLAIMER
Competent Person’s Statement: In accordance with the Australian Securities Exchange requirements, the technical information contained in this presentation has been reviewed by Darren Walker, B.Sc. (Hons) in Geology employed by Endocoal Limited. Mr Walker is a member of the Australian Institute
Metallurgy and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the “Australasian Code for reporting of Exploration Results, Minerals Resources and Ore reserves”. Mr Walker consents to the inclusion in the report of the matters based on this information in the form and context in which it appears. Competent Person’s Statement: In accordance with the Australian Securities Exchange requirements, the technical information relating to the Rockwood, Meteor Downs South and Inderi JORC Resources contained in this presentation has been reviewed by Phill Sides, B.App.Sc. (Geology), employed by JB Mining Services. Mr Sides is a member of the Australian Institute of Geoscientists and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the “Australasian Code for reporting of Exploration Results, Minerals Resources and Ore reserves”. Mr Sides consents to the inclusion in the report of the matters based on this information in the form and context in which it appears. Statement of Compliance: The information in this report that relates to Marketable Reserves at Endocoal’s South Meteor Downs Project is based on a mine plan, a mine schedule and costs prepared by The Minserve Group Pty Ltd. Mr Jeff Jamieson was responsible for the report’s preparation and the reserve statement therein. He is both a Fellow of the Australasian Institute of Mining and Metallurgy, and a Chartered Professional (Mining) and is a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Jamieson consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.
4
5
8
12
16
17
18
19
20 APPENDICES 21
3
ORION DOWNS TALWOOD / PRETORIA HILL ROCKWOOD
4
1. 2. 4. 3.
STOCKYARD CREEK
5
COMPANY STRATEGY
To become a long‐term, sustainable supplier of diversified coal products to global markets
Project Pipeline Company Growth
Orion Downs Development Target production 2H 2013 Rockwood Advanced Exploration Current JORC Resource 447.1Mt Additional 3,948km2 of ‘greenfields’ exploration in the Bowen Basin
Major Shareholders as at 30/08/2012 %
Hidili Asset Management 12.6% Republic Investment Management 10.8% Cookshill Investments Pty Limited 8.6% AMCI Capital 6.1% Indus Capital Partners 5.4% Macquarie Capital Group 5.3% Top 6 Shareholders 48.8% Top 20 Shareholders 64.5%
Share Price (31 Aug 2012): A$0.22 Ordinary Shares on issue: 186.9m Basic Market Cap: A$41.1m Options(A) and Rights(B) on issue: 21.6m Fully Diluted Market Cap: A$45.9m Cash @ 30 June 2012: A$5.8m Debt: $0.0m Enterprise Value: A$40.1m
Other securities currently on issue:
‐ 10.0 million @ A$0.50 (expiring 16/07/2013) ‐ 3.9 million @ A$0.72 (expiring 4/02/2015) ‐ 3.0 million @ A$0.50 (expiring 2/12/2013) ‐ 1.5 million @ A$0.468 (expiring 10/08/2014) ‐ 1.0 million @ A$0.46 (expiring 23/08/2013) ‐ 350,000 @ A$0.60 (expiring 16/03/2014) ‐ 250,000 @ A$0.40 (expiring 23/08/2013) ‐ 250,000 @ A$0.40 (expiring 16/03/2014) ‐ 200,000 @ A$0.60 (expiring 30/03/2014)
CAPITAL STRUCTURE
Sullivan Creek (100%) – 1,020km2 – Targeting:
Expedition Peak (100%) – 129km2 – Targeting:
Orion Downs (100%) – 1,020km2 – 51.4Mt JORC Resource
Rockwood (100%) – 99km2 – 337.3Mt JORC Resource – Targeting PCI Coal Essex (100%) – 204km2 – Targeting:
Springton Duaringa (100%) – 761km2 – Targeting:
Barfield (100%) – 564km2 – Targeting:
Stockyard Creek / Cedars (100%) – 1,020km2 – Targeting:
Nebo (100%) – 78km2 – Targeting:
Pretoria Hill (50%) – 410km2 – Targeting:
Talwood (100%) – 177km2 – Targeting:
6
BOWEN BASIN TENEMENTS
Locations
ST STOCKYAR ARD CREEK CREEK
ENDOCOAL EXPLORATION
Resource Discovery & Evaluation
7
Minerva 33Mt resource (Sojitz Resources) West Rolleston 369Mt resource (Macarthur Coal Ltd) Athena 560Mt resource (Sojitz Resources) Springsure Creek 375Mt resource (Bandanna Energy Ltd) Arcturus 206Mt resource (Bandanna Energy Ltd) Orion Downs Inderi project 34.58Mt resource Meteor Downs South project 16.82Mt resource Rolleston Leases Rail to Port Rolleston Mine 600Mt resource Xstrata PLC
METEOR DOWNS SOUTH (MDS) PROJECT EVALUATION OUTCOMES MDS PROJECT STATUS Project Area Measured Indicated Inferred Total JORC Meteor Downs South 13.32Mt 3.5Mt 0.0Mt 16.82Mt Inderi 18.48Mt 8.1Mt 8.0Mt 34.58Mt Total 31.8Mt 11.6Mt 8.0Mt 51.4Mt
to support grant of Mining Lease in late‐2012/early‐2013.
JORC RESOURCES SUMMARY
‐ Delivering 1.5‐1.9 Mtpa from MDS open cut mine; ‐ Low actual mining cash cost of $29.17/t; ‐ Free On Truck (FOT) opex cost of $37.11/t; ‐ Low capex set‐up cost ($42M for FOT case) based on ‘mining contractor’ model; to deliver ‐ Workforce productivity level > 20,000 t/person/year
8
Overview
MARKETABLE RESERVES
‐ Based on a costed mine plan and mining schedule. ‐ Mine plan peer‐reviewed by an independent expert.
thermal coal;
preparation plant/beneficiation required;
Rolleston mine; and
thermal coal Asian market. Property C SEAM D SEAM CV (Kcal/kg) 6,233 6,025 Ash (A) 9.5% 8.0% Inherent Moisture (A) 9.9% 11.2% Sulphur (A) 0.42% 0.43%
(A) Air‐dried basis)
MDS PROJECT OVERVIEW
truck fleet for overburden removal and coal extraction;
with maximum thickness of 9.7m;
plant, for road‐haul to despatch facility.
PRODUCT COAL PROPERTIES 9
Meteor Downs South (MDS) Project
COAL QUALITY OPPORTUNITY
PORT CAPACITY & ALLOCATION
Agreement’) status in WICET Stage 2: ‐ Registration for total 4Mtpa in WICET Stage 2 due for completion in 2015.
prior to WICET Stage 2 start‐up: ‐ Seeking pre‐2015 tonnage to allow production 2H 2013.
TIMELINE TO PRODUCTION
INFRASTRUCTURE & TRANSPORT LOGISTICS
line;
access negotiations;
and
infrastructure as Stage 1 and Stage 2 projects at Orion Downs.
10
Near‐Term Production From MDS Open Cut
(Conceptual rail‐loop layout only, with other options under review.)
MLA
Maiden JORC Resource MLA Lodged April 2011 Acquired 2Mtpa allocation of FFFA status at WICET Stage 2 Drilling completed to deliver Measured JORC Resource
Approvals / Mining Lease MDS Project Evaluation Export
Environmental Management Plan process underway
11
Milestones Completed
Meteor Downs South Project Milestones
2Q 2011 3Q 2011 4Q 2011 1H 2012 2H 2012 1H 2013 2H 2013 Meteor Downs South Project Evaluation completed
Upcoming Milestones Mine Construction
12
Rockwood (EPC1514); ‐ Exploration drilling along and across anticline structures running north‐west to south‐east through the tenement; ‐ Multi‐seam deposit, with >21 separate coal intersections.
‐ Confirmed continuity of geological structures; and ‐ Identified similar and likely repeating structures elsewhere
current resources prospective for future mine development.
2011/12 EXPLORATION ACTIONS & OUTCOMES CURRENT JORC RESOURCES
Project Area Measured Indicated Inferred Total JORC Rockwood Total 0.0Mt 47.1Mt 400.0Mt 447.1Mt ROCKWOOD SITUATION
deposits.
Rockwood
Willunga 318Mt resource (Macarthur Coal – Peabody) Codrilla 80Mt resource (Macarthur Coal – Peabody) Saraji 1.0Bt resource (BMA) Norwich Park 517Mt resource (BMA)
312.5Mt Resource
Overview
13 COAL QUALITY ASSESSMENT PROCESS COAL VALUE‐ IN‐USE STUDY
for Rockwood coal.
‐ Best fit with operating plants and coal requirements; and ‐ Value of Rockwood PCI coal in the international market.
have evaluated coal laboratory results, to assess: ‐ Coal physical properties, ash chemistry, plus likely washing characteristics; ‐ Consistency within & between coal seams; ‐ Comparison ranking of Rockwood coal properties with
Coal Quality & Value‐In‐Use Studies
ROCKWOOD COAL QUALITY
‐ Expected to deliver product coal with competitive ash level and acceptable washing yield.
Ash Volatile Matter Carbon Specific Energy (ad) (% daf) (% daf) (ad MJ/kg) 11.3 6.5 91.8 30.1
(Average washed quality of samples tested to date for PCI properties.)
DRILLING TARGET AREAS IN 2012
‐ Identified following ground gravity and aerial magnetic surveys, with confirmation by later seismic survey;
‐ Expanding the Rockwood exploration footprint to the south‐east along already identified coal‐bearing anticline structures; and ‐ Understanding geological structures so as to locate potential mine sites within the initial discovery area.
Drilling Targets Planned
14 FUTURE DRILLING PRIORITY
identified as prospective for the siting of mining pits: ‐ Within the currently identified JORC Resource area.
CONCEPTUAL MINE PLANNING STUDY
and coal quality model developed from 2011/12 drilling programs to: ‐ Evaluate potential for open cut mining and consider alternative mining methods ‐ Identify infrastructure opportunities, including access to water supplies to support Rockwood development.
PORT INFRA‐ STRUCTURE & TRANSPORT LOGISTICS
‐ For Abbot Point, currently providing potential user input to the port development industry consultation process set up by the new Queensland Government; and ‐ Continuing involvement with the Adani port development project at Dudgeon Point, confirming interest in acquiring Northern Bowen Basin port allocation.
Extracted from report IN‐SITU RAW COAL RESOURCES WITHIN EPC1514 – “ROCKWOOD” prepared by JB Mining Services.
Planning for Mine Development
15
A A A A
16
Scout Drilling Program
‐ Research noting content of a Utah Development Company drilling outcomes report, dated 1961; ‐ Utilising first‐principles geological investigation; and ‐ Targeting contact zone between freshwater sequence and underlying volcanic basement.
‐ Two coal seams intersected, each approx. 3m thick (with ~0.3m separation); ‐ Five holes, identifying the seams at shallower depth; and ‐ First laboratory testing results indicates some coal plies with coking properties (including CSN in range 7‐9).
SCOUT DRILLING IN 2012
17
line (now completed) linking to Abbot Point coal loaders;
unseasonal rainfall;
PRETORIA HILL JV
TALWOOD
Overview
Project Evaluation Studies Early Exploration
Pretoria Hill JV Cedars EPC 1516 Barfield EPC 1620 Springton Duaringa EPC 1803 Essex EPC 1515 Nebo EPC 1513 Expedition Peak EPC 1512 Sullivan Creek EPC 1518
Export Thermal Coal PCI Coal Coking Coal
Prospective Coal Type Target
18
Granted Tenements
Three Coal Products Strategy Developing
Talwood
Advanced Exploration
Inderi 34.6Mt JORC Resource
Development
Rockwood 447.1Mt JORC Resource Meteor Downs South 16.8Mt JORC Resource Stockyard Creek EPC 2339
19
INFRASTRUCTURE
Continue participation in Wiggins Island Coal Terminal expansion process. Negotiate access to under‐utilised allocations at Gladstone Port for early shipping of Meteor Downs South coal. Negotiate with QR for rail access to the Bauhinia spur line from Orion Downs to the Blackwater system and Gladstone port. Continue involvements with Northern Bowen Basin rail and port developments to access rail and port allocations. Identify water sources for future development at Rockwood.
ROCKWOOD
Commence in‐fill drilling on specific target areas identified as being prospective for the location of mining pits. Undertake in‐fill drilling within the initial discovery area to shift ‘Indicated’ and ‘Inferred’ resources to ‘Measured’ and ‘Indicated’ status respectively. Begin conceptual mine‐planning activities, including consideration of future infrastructure needs.
OTHER TENEMENTS
Extend exploration at Stockyard Creek where a scout drilling program has identified two coal seams. Undertake further drilling program targeting Rugby coking coal measures at Talwood. Finalise JV agreement with Carabella Resources and commence exploration at Pretoria Hill. Further exploration on the Essex, Springton, and Nebo tenements. Negotiate land access agreements and commence scout drilling at prospective target areas identified.
METEOR DOWNS SOUTH
Complete EMP process to support the granting of a mining lease in late‐2012/early‐2013. Continue planning activities and achieve key milestones for delivery of the Meteor Downs South Project during 2013. Identify and secure alternatives for Gladstone port access in 2013 and 2014 prior to WICET Stage 2.
Key Tasks Identified
20 NEAR‐TERM PRODUCTION FROM ADVANCED EXPORT‐QUALITY THERMAL COAL PROJECTS AT ORION DOWNS:
approval process confirmed and a project evaluation study now completed. ATTRACTIVE PIPELINE OF COAL DEVELOPMENT PROJECTS IN THE BOWEN BASIN:
INFRASTRUCTURE DEVELOPMENTS CONTINUING TO IMPROVE:
STRONG BOARD & MANAGEMENT, WITH SUBSTANTIAL COAL MINE DEVELOPMENT AND OPERATIONAL EXPERIENCE.
21
22
Rod Austin, Interim Non‐Executive Chairman
Operator of 6 coal mines in Hunter Valley and Queensland.
Exported thermal and semi soft coking coal to Korea, Japan, Taiwan and China (1991‐1995).
Timothy Hedley, Chief Executive Officer
Crinum, Blackwater, Moura and South Walker Creek mines in the Bowen Basin; and as a Mine Operations Adviser to Tarong Energy on its coal mining operations.
modelling, assessment of coal properties, pit design, infrastructure, mine scheduling, and capital and
BOARD & MANAGEMENT
23
Phil McCarthy, Non‐Executive Director
General Manager 1986 to 1990.
Assistant Superintendent Operations and Planning 1982 to 1985.
Mining contractor and oil and gas service contractor.
BOARD & MANAGEMENT
Lex Hansen, Non‐Executive Director
24
Fred Yu, Non‐Executive Director
Director for Microsoft in the Greater China region.
Gavin Solomon, Non‐Executive Director
BOARD & MANAGEMENT
Board of Directors
Rod Austin (Interim Chairman) Lex Hansen, Phil McCarthy, Gavin Solomon, Fred Yu
Board of Directors
Rod Austin (Interim Chairman) Lex Hansen, Phil McCarthy, Gavin Solomon, Fred Yu Chief Executive Officer ‐ Tim Hedley Chief Executive Officer ‐ Tim Hedley Company Secretary ‐ Peter Edwards Company Secretary ‐ Peter Edwards Exploration Manager ‐ Darren Walker Exploration Manager ‐ Darren Walker Chief Financial Officer ‐ Peter Edwards Chief Financial Officer ‐ Peter Edwards Geologists Geologists Drilling Contractors Drilling Contractors Tenement Management ‐ Stephen Moore Tenement Management ‐ Stephen Moore Consulting Geologists ‐ GeoDiscovery Group Pty Ltd Consulting Geologists ‐ GeoDiscovery Group Pty Ltd PricewaterhouseCoopers (Auditors) ‐ Craig Thomason PricewaterhouseCoopers (Auditors) ‐ Craig Thomason Senior Geologists ‐Kaylie Hyland ‐ David Richardson Senior Geologists ‐Kaylie Hyland ‐ David Richardson Share Registry ‐ BoardRoom Pty Ltd Share Registry ‐ BoardRoom Pty Ltd Lawyers ‐ Gilbert & Tobin Lawyers ‐ Gilbert & Tobin ASX ASX
25
ORGANISATION CHART
SAFETY ENVIRONMENT PERFORMANCE IN OPERATION
Key Priorities
BUILDING CAPABILITY
26
BOWEN BASIN EXPLORATION
27
Contact: Tim Hedley, CEO
thedley@endocoal.com.au +61 417 771 198
NOTES: