For personal use only 7 August 2007 Manager Announcements - - PDF document

▶
for personal use only
SMART_READER_LITE
LIVE PREVIEW

For personal use only 7 August 2007 Manager Announcements - - PDF document

Jul 01, 2023 258 likes •564 views

For personal use only 7 August 2007 Manager Announcements Companies Announcements Office Australian Stock Exchange Limited 10 th Floor, 20 Bond Street SYDNEY NSW 2000 By e-lodgment Dear Sir/Madam MANAGING DIRECTORS PRESENTATION

slide-1
SLIDE 1

7 August 2007 Manager Announcements Companies Announcements Office Australian Stock Exchange Limited 10th Floor, 20 Bond Street SYDNEY NSW 2000 By e-lodgment Dear Sir/Madam

Please see attached presentation to be made at the Diggers & Dealers Mining Forum, Kalgoorlie by the Company’s Managing Director, Mr Peter Harold. Yours sincerely, SALLY MALAY MINING LIMITED TREVOR ETON Chief Financial Officer & Company Secretary

Contact Details: Sally Malay Mining Limited ABN: 47 095 792 288 Level 9, Sally Malay House

553 Hay Street

PERTH WA 6000

Ph: 61-8-9225-0999

www.sallymalay.com

MANAGING DIRECTOR’S PRESENTATION – DIGGERS & DEALERS 2007

For personal use only

slide-2
SLIDE 2

For personal use only

slide-3
SLIDE 3
  • estimates of future earnings, the sensitivity of earnings to metal prices and foreign exchange rate movements;
  • estimates of future metal production and sales;
  • estimates of future cash flows, the sensitivity of cash flows to metals prices and foreign exchange rate movements;
  • statements regarding future debt repayments;
  • estimates of future capital expenditures;
  • estimates of reserves and statements regarding future exploration results and the replacement of reserves; and
  • statements regarding modifications to the Company’s hedge position.

FORWARD LOOKING STATEMENTS

This presentation contains “forward-looking statements”. Such forward-looking statements include, without limitation: Where the Company expresses or implies an expectation or belief as to future events or results, such expectation or belief is expressed in good faith and believed to have a reasonable basis. However, forward looking statements are subject to risks, uncertainties and other factors, which could cause actual results to differ materially from future results expressed, projected or implied by such forward-looking statements. Such risks include, but are not limited to metals price volatility, currency fluctuations, increased production costs and variances in ore grade or recovery rates from those assumed in mining plans, as well as political and operational risks in the countries and states in which we operate or sell product to, and governmental regulation and judicial outcomes. For a more detailed discussion of such risks and other factors, see the Company’s Annual Reports, as well as the Company’s other filings. The Company does not undertake any obligation to release publicly any revisions to any “forward- looking statement” to reflect events or circumstances after the date of this presentation, or to reflect the occurrence of unanticipated events, except as may be required under applicable securities laws.

For personal use only

slide-4
SLIDE 4

2007 Milestone Year

  • Group production hits 13,225t Ni
  • Discovery of Deacon Orebody >58,000t Ni
  • Repaid all Senior & Subordinated Debt
  • Extended Sally Malay mine life
  • Copernicus Feasibility Study released
  • Net Profit forecast of ~ A$90 million
  • Maiden dividend anticipated
  • Inclusion in S&P/ASX 200 Index

For personal use only

slide-5
SLIDE 5

Sally Malay Overview

August 2006 August 2007 % Change Nickel Price (US$/t) $27,600 $30,000 9% Share Price 1.21 3.85 218% Market Capitalisation $220M $700M 218% Nickel Production (Equity) 9,500 12,000 26% Bank Debt (A$) $32M NIL

  • EBITDA (A$)

$65M ~$180M 177% NPAT (A$) $16M $90-100M 460% EPS (cents per share) 10 48 380% Cash (A$) $31M $120M 287% Dividend

  • Maiden
  • Well Funded

Robust Cash Position Increased Resource Base Strong Margins Sustainable Profits Quality & Diversity of Assets

For personal use only

slide-6
SLIDE 6

Corporate

  • Started Feb 2001:

$3 million IPO in Sept 2001 at $0.20 Initial Market Cap $12M

  • Shares on Issue:

186.4 million

  • Unlisted Options:

8.2 million (various strikes)

  • Trading Range:

$3.63 - $4.80 (July 2007)

  • Market Cap:

~$700M-$1B (fully diluted)

  • Shareholders:

~5,300 (as at June 2007)

  • Liquid Assets:

~$140M cash

  • Senior Debt:

Nil

  • Finance Leases:

~$13M

  • Board:

– Chairman Chris de Guingand – Managing Director Peter Harold – Non-exec Directors Chris Langdon John Rowe Brian Phillips

For personal use only

slide-7
SLIDE 7

$0.00 $1.00 $2.00 $3.00 $4.00 $5.00 $6.00

1 A u g u s t 2 6 1 N

  • v

e m b e r 2 6 1 F e b r u a r y 2 7 1 M a y 2 7 1 A u g u s t 2 7

Sally Malay Share Price (A$ per share)

Share Price - Major Milestones

05/06 Profit $15.9M Deacon Discovery Half Yearly 06 Profit $32M Initial Deacon Resource 42,000t Ni Winner Mine Approval Upgraded Deacon Resource 58,000t Ni Winner Upgrade 6,140t Ni New Massive Sulphides at Sally Malay Senior & Subordinated Debt Repaid

For personal use only

slide-8
SLIDE 8

Production On the Way to 20,000tpa

ssumptions Winner from Oct 2007 eacon from Nov 2007

  • pernicus from Q2 2008 (assumes open pit early 2008)

*Revised Targets 30 June 2007

Sally Malay Group Nickel Production (100% Basis) (Sally Malay Project - Nickel in Concentrate, Lanfranchi Project - Nickel in Ore)

5000 10000 15000 20000 25000 2004/05 2005/06 2006/07 2007/08 Forecast 2008/09 Target

Financial Year Tonnes Nickel Schimtz Ext Deacon Winner Helmut Sth Copernicus Sally Malay

For personal use only

slide-9
SLIDE 9

ssumptions inner from Oct 2007 (75%) eacon from Nov 2007 (75%)

  • pernicus from Q2 2008 (assumes open pit early 2008) – (60%)

*Revised Targets 30 June 2007

Sally Malay Group Nickel Production (Equity Basis) (Sally Malay Project - Nickel in Concentrate, Lanfranchi Project - Nickel in Ore)

5000 10000 15000 20000 25000 2004/05 2005/06 2006/07 2007/08 Forecast 2008/09 Target

Financial Year Tonnes Nickel Schimtz Ext Deacon Winner Helmut Sth Copernicus Sally Malay

Production On the Way to 20,000tpa

For personal use only

slide-10
SLIDE 10

Two Production Centres in WA

For personal use only

slide-11
SLIDE 11

Fill the Sally Malay Mill +1.0 Million tpa

For personal use only

slide-12
SLIDE 12

Fill the Sally Malay Mill +1.0 Million tpa “CHAMPAGNE CONCENTRATE”

  • 8-9% Ni
  • 4-5% Cu
  • 0.5-1.0% Co
  • Fe:MgO ratio 80:1
  • No penalties

LOGISTICS

  • Shipped via Wyndham
  • 100,000 tonnes/year
  • Offtake with Jinchuan
  • Monthly shipments
  • Paid 100% in 7 days

For personal use only

slide-13
SLIDE 13

Production Increasing

Multiple Ore Sources

  • Sally Malay
  • Copernicus

* Revised Targets 30 June 2007

Sally Malay Nickel Production (Nickel in Concentrate)

2000 4000 6000 8000 10000 12000 2004/05 2005/06 2006/07 2007/08 Forecast 2008/09 Target Financial Year Sally Malay Copernicus

For personal use only

slide-14
SLIDE 14

Fill the Sally Malay Mill +1.0 Million tpa

SALLY MALAY OREBODY Initial Resource

  • 3.74Mt @ 1.74% Ni for 65,000t Ni

Initial Reserve

  • 3.4Mt @ 1.56% Ni for 53,000t Ni

Production to 30 June 07

  • 1.9Mt @ 1.22% Ni for 23,200t Ni

Current Reserve

  • 2.8Mt @ 1.32% Ni for 37,000t Ni

Reserve increase of 7,000t Ni Increase in Mine Life

For personal use only

slide-15
SLIDE 15

Fill the Sally Malay Mill +1.0 Million tpa

SALLY MALAY OREBODY POSSIBLE EXTENSIONS

THE DEEPS

Potential to add significant Nickel Previous owner estimates:

  • Anglo American

80,000t Ni

  • Normandy Poseidon

40,000t Ni Non-JORC Resource

  • 1.63Mt @ 1.65% Ni = 27,000t Ni
  • Calculated by MRT Feb 1996
  • +3 years of additional mining

Deep Drilling

  • Drilling off decline
  • Timing – late 2007

For personal use only

slide-16
SLIDE 16

Fill the Sally Malay Mill +1.0 Million tpa

NEW MASSIVE SULPHIDE MINERALISATION

  • Two zones of significant mineralization
  • Untested contact position

Results

  • 17.7m @ 1.98%Ni, 0.22%Cu, 0.10%Co
  • 8.58m @ 1.17%Ni, 0.50%Cu, 0.06%Co

Location

  • ~300m below surface
  • ~150m from Sally Malay orebody
  • ~60m from Decline development

Exploration

  • Drilling ongoing

For personal use only

slide-17
SLIDE 17

Fill the Sally Malay Mill +1.0 Million tpa

COPERNICUS Resource

  • 852kt at 1.24% Ni for 10,600t Ni

Feasibility

  • Open Pit & Underground
  • 784kt at 1.1% Ni for 8,500t Ni
  • NPV range of $10-100M

Development Schedule

  • Q3/Q4 2007 - approvals
  • Q1 2008 - Commence Open Pit
  • Q2 2008 – treat ore
  • Q4 2008 – decision on UG

Deeps Exploration

  • EM Targets
  • more drilling this year

OPEN PIT COPERNICUS MINERALISATION POTENTIAL EXTENSION

For personal use only

slide-18
SLIDE 18

Resource

  • Global 14.3Mt @ 5.2g/t PGM g/t
  • Hi Grade 10.1Mt @ 6.1g/t PGM g/t

JV

  • SMY to spend up to $750,000
  • 2 stage Feasibility Study
  • Mining, metallurgy, offtake
  • 50% of 1st 1.5Mt high grade ore

Concept

  • Up to 400ktpa spare mill capacity
  • Established infrastructure
  • PGM concentrate to Jinchuan or 3rd party

Fill the Sally Malay Mill +1.0 Million tpa

THE PANTON FACTOR

For personal use only

slide-19
SLIDE 19

Two Production Centres in WA

For personal use only

slide-20
SLIDE 20

LANFRANCHI PROJECT Geology Elongated lenses Along Ultramafic-Basalt contact Historic Production (previous owner) 3.1Mt at 3.2% Ni = 98,450t Ni Schmitz 783,500t at 4.6% Ni Skinner 297,800t at 4.9% Ni Lanfranchi 1.4Mt at 2.3% Ni Exploration upside Down dip & plunge all orebodies New orebodies – ie. Deacon EM targets Northern Tramways Dome

Fill the Nickel West Kambalda Mill +350,000tpa

For personal use only

slide-21
SLIDE 21

Fill the Nickel West Kambalda Mill +350,000tpa

For personal use only

slide-22
SLIDE 22

Fill the Nickel West Kambalda Mill +350,000tpa

Multiple Ore Sources

  • Helmut South
  • Winner (Oct 2007)
  • Deacon (Nov 2007)

*Revised Targets 30 June 2007

Lanfranchi Nickel Production (Nickel in Ore)

2000 4000 6000 8000 10000 12000 14000 16000 2004/05 2005/06 2006/07 2007/08 Forecast 2008/09 Target Financial Year Helmut Sth Winner Deacon Schimtz Ext

For personal use only

slide-23
SLIDE 23

WINNER Resource 110,551t at 5.56% Ni 6,147t Ni Reserve 132,369t at 4.1% Ni 5,426t Ni Development Schedule Boxcut - Nov 06 Decline Dev – Jan 07 First Ore – Oct 07 Production Rate - 10kt/mth

Fill the Nickel West Kambalda Mill +350,000tpa

For personal use only

slide-24
SLIDE 24

NEW DEACON OREBODY Resource - 1.91Mt at 3.04%Ni 58,100t Nickel Massive - 185kt at 7.95%Ni 13,800t Nickel Best intersections 30m at 4.5%Ni 32m at 3.88% Ni Massive Sulphides 3.6m at 10.4% Ni 5.05m at 9.68% Ni

Fill the Nickel West Kambalda Mill +350,000tpa

For personal use only

slide-25
SLIDE 25

Fill the Nickel West Kambalda Mill +350,000tpa

NEW DEACON OREBODY Mining Method

65% Up-Hole Stoping 35% Cut & Fill

Mining Rate Up to 30,000t/month Capital Requirements 4 trucks, 2 boggers, 1 Jumbo Upgrade Ventilation Raise Bore & Fan Timing First Ore – Now Ramping Up Production – 2007/08 Full Production – Q3 2008

Helmut South Development Stope Design Deacon Decline

For personal use only

slide-26
SLIDE 26

Fill the Nickel West Kambalda Mill +350,000tpa

NEW DEACON OREBODY Exploration Mineralisation Open up & down plunge Dedicated drill drive up plunge Downhole EM down plunge Potential Surface Drilling Potential = HUGE +2.5 Mt @ 3% +80,000t Ni

Helmut Untested area of channel structure Deacon Resource Helmut South Basal Contact

For personal use only

slide-27
SLIDE 27

Fill the Nickel West Kambalda Mill +350,000tpa

110,500t @ 5.56%Ni 6,150t Ni

LANFRANCHI PROJECT OVERTURNED STRATIGRAPHY - NORTHERN DOME

For personal use only

slide-28
SLIDE 28

Kimberley

  • Maximise throughput & recoveries of Sally Malay Plant
  • Drill out Sally Malay Deeps
  • Increase resource base in Kimberley (Sally Malay leases, Copernicus, etc)
  • Possibility of adding PGM production
  • Target = 1.0 Mtpa,10,000tpa Ni +Cu + Co + PGMs, 10 years life

Lanfranchi

  • Increase Ni production, >350,000tpa thru KNO;
  • Develop Winner, Deacon, Schmitz Ext, Helmut Remnants, low grade deposits
  • Increase resource base – Northern Dome, down dip exploration, new shoots
  • Target = +350,000tpa, +10,000tpa Ni, +10 years life

Corporate

  • Manage costs, pay maiden dividend 2007

GOALS

  • Grow from within by unlocking the full potential of our projects

+ 10 Years at +20,000tpa Ni Eq. (ie Ni+Cu+Co+PGMs) production

10 YEAR PLAN

For personal use only

slide-29
SLIDE 29

“While all nickel producers have seen their stock rise on the back of the nickel price, Sally Malay offers the greatest organic growth potential, by far, of any nickel stock in the Australian market.”

Australian Financial Review – 21 February 2007

For personal use only