For personal use only SYDNEY NSW 2000 ASX ANNOUNCEMENT INVESTOR - - PDF document

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9 February 2016 Australian Securities Exchange Level 5, 20 Bridge Street SYDNEY NSW 2000

ASX ANNOUNCEMENT

INVESTOR PRESENTATION The directors of Stonewall Resources Ltd are pleased to release the attached updated Investor Presentation. On behalf of the board Peter Hunt Company Secretary

MARKET DATA ASX code: SWJ Current share price: $0.014 Total shares on Issue: 1.519 billion DIRECTORS & SENIOR MANAGEMENT George Jenkins, CEO Trevor Fourie, Director Bill Richie Yang, Director Liu Yang, Director James Liu, Director Yihao Zhang, Director Runxi Zhu, Director MAJOR SHAREHOLDERS Tasman Funds Management Pty Ltd High Gift Investments Ltd Smart Vision Investment Group Ltd Khan International Limited Blonde Mile International Buttonwood Nominees Pty Ltd

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ASX: SWJ

Set to Produce & Set to Grow

Investor Presentation – February 2016

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• This Presentation has been prepared by and issued by Stonewall Mining Limited (ASX.SWJ) (Stonewall or Company) is to assist in informing interested

parties about the Company and 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 securities. No agreement to subscribe for securities in the Company will be entered into

• n the basis of this Presentation. This Presentation is limited to persons who are sophisticated investors for the purposes of s708(8) or professional

investors for the purposes of s708(11) of the Corporations Act 2001 or persons who hold Australian financial services licences and any of their

• representatives. By attending and/or receiving this presentation you warrant to Stonewall that you are such a person. This Presentation may contain

forward looking statements. Whilst Stonewall has no reason to believe that any such statements, forward looking statements and projections are either false, misleading or incorrect, it cannot and does not warrant or guarantee that through either the passage of time or actions beyond the control

• f Stonewall they will not become so.. You should not act and you must refrain from acting in reliance on any of this Presentation material. Nothing

contained in this presentation constitutes investment, legal, tax or other advice. This overview of Stonewall 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 prior to making any investment decision. You must make yourself fully aware and all risks associated with this offering and that you do not rely upon warranties or representations by Stonewall and/or its

• fficers. Neither the Company nor its advisers has verified the accuracy or completeness of the information, statements and opinions contained in this
• presentation. Accordingly, to the maximum extent permitted by law, the Company makes no representation and give no assurance, guarantee or

warranty, express or implied, as to, and take no responsibility and assume no liability for, the authenticity, validity, accuracy, suitability or completeness of, or any errors in or omissions, from any information, statement or opinion contained in this presentation. The contents of this presentation are confidential. This presentation is being provided to you on the condition that you do not reproduce or communicate it or disclose it to,

• r discuss it with, any other person without the prior written permission of the Company. This Presentation contains information, ideas and analysis

which are proprietary to Stonewall. By agreeing to receive this information you also agree to respect the confidential nature of this entire presentation. Specifically you agree not to reproduce in any manner or distribute any part of the information contained herein without the prior written consent of the Company.

• The information in this Presentation that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Daniel

van Heerden, who is currently employed as a Director and as Principal Mining Engineer by Minxcon Projects (Pty) Ltd. His qualifications include a B.Eng. (Mining) from the University of Pretoria in 1985 and a M.Com.(Business Administration) from Rand Afrikaans University (now UJ) in 1993. He is a member in good standing of the Engineering Council of South Africa and is registered as a Professional Engineer with registration no. 20050318 as well as a Fellow in good standing of the South African Institute of Mining and Metallurgy with Membership No. 37309 which is a Recognised Overseas Professional Organisation’ (ROPO) included in a list promulgated by the ASX from time to time. He has worked as a Mining Engineer for more than 28 years with more than 15 years directly associated with gold mining specifically..Daniel van Heerden is employed by Minxcon and has sufficient experience which is relevant to the style of mineralization 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, Mineral Resources and Ore Reserves’. Daniel van Heerden consents to the inclusion in this Presentation of the matters based on his information in the form and context in which it appears.

Set to Produce & Set to Grow | 2016

Disclaimer

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Set to Produce & Set to Grow | 2016

Contents

Corporate Production Growth Arbitration Supplementary Information Key Competitive Advantages Resources

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Corporate: Overview

LONG TERM DEBTS Beatle Rock A$ 0.85m 8/16 Tasman convertible A$ 1.65m 6/16 US floor price notice A$ 0.10m 3/16 APCIG A$ 4.75m 10/16 DIRECTORS and MANAGEMENT George Jenkins, CEO and Director of SWM Trevor Fourie, Director Bill Richie Yang, Director Liu Yang, Director Eric Zhang, Director James Liu, Director Runxi Zhu, Director COMPANY SECRETARY Peter Hunt Set to Produce & Set to Grow | 2016 ASX code: SWJ Current share price: AUD $0.014 Market Capitalisation: AUD $21 million Mineral Resources: 2.99Moz Free floating shares: 1.52 billion Unlisted Options Shares Exercise price Maturity 10,000,000 0.0150 01/19 3,000,000 0.0165 11/17 6,000,000 0.0430 02/18 27,272,728 0.0110 10/18 MAJOR SHAREHOLDERS Tasman Funds Management Pty Ltd High Gift Investments Ltd Best Wealth Winner Ltd Smart Vision Investment Group Ltd Khan International Ltd Hanhong New Energy Ltd Buttonwood Nominees Pty Ltd

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Corporate: Core Project Locations

5

• Tenements cover approx. 62,000 Ha in the

Eastern Goldfields of South Africa

• The projects in the Mpumalanga Province are

split into TGME Mines in the north and Sabie Mines in the south

• Tenements include over 40 historical mines

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Corporate: Chart

Set to Produce & Set to Grow | 2016

Stonewall Resources Pty Ltd (ASX: SWJ) (the “Company”) Stonewall Mining (Pty) Ltd (“Stonewall”) Transvaal Gold Mining Estate (Pty) Ltd (“TGME”) Sabie Mines (Pty) Ltd (“Sabie”) Bosveld Mines (Pty) Ltd (“Bosveld”)

100% 74% 74% 74% Australian Parent South African Subsidiary companies

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• 2011 Acquiring phase:

Market Valuation - AUD90m; Long term debt - AUD Nil

• 2012 Listing phase: Market

Cap – AUD108m; Long term debt – AUD4m

• 2013/4 Transaction phase:

Market Cap – AUD120m; Long term debt – AUD7m

• 2015 Conslidation phase:

Market Cap – AUD10 - 15m; Long term debt – AUD12m

• 2016 Transitioning phase:

Market Cap – AUD20m - m; Long term debt – AUD6m

Set to Produce & Set to Grow | 2016

Extraordinary Value Proposition

Corporate: Value

$0 $20,000,000 $40,000,000 $60,000,000 $80,000,000 $100,000,000 $120,000,000 $140,000,000

History & Future Value of Stonewall

Debt Market Capitalisation

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Set to Produce & Set to Grow | 2016

Value Drivers 2016

Near term production - Pre-Mined Residue Project (PMR)

• Mine plan in progress with aim to re-commence production at 30,000 to 40,000tpm utilising the

existing TGME plant by Q4 of 2016 (plant refurbishment and mine equipping phase to start Q2 of 2016).

• Advanced non-dilutive funding negotiations for plant upgrade and mine developement.
• Exchange Rate and Production cost advantage. 2013’s USD/ZAR : ~8.8; presently USD/ZAR ~16!!

Growth Resource and Reserves

• Further exploration and drilling planned at Sabie and TGME to firm up Reserves for future hardrock

mining and increase resources from extention-drillings on existing ore bodies.

• Potential joint venture announced.

Arbitration – Hong Kong Arbitration against QiXing for USD110m

• Arbitration Hearing is scheduled for 11 to 14 March 2016 and decision pending thereafter.
• Claim for not less than USD110m.
• Funding agreement in place, Stonewall entitled to 55% of a successful claim against no direct litigation

spend.

Corporate: Value

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Production from PMR projects

• Low Capital to Gold opportunities to maximize return.
• Targeting Return on Investment 200%+ per annum.
• Targeting 30,000 ounces per annum within 12 months.
• Low all-in anticipated cash cost equal to only 60% - 70%
• f Conventional Mining Methods.
• Multiple mining fronts are being proposed - accessing

several shallow producing mines with existing infrastructure and mine development.

• Large PMR exploration target (conceptual).
• Significant PMR mineralization potential:
• Exploration target of 0.73m – 2.40m ounces.
• Well tried and tested mining methods and well

understood metallurgy.

• All appropriate approvals in place.

Set to Produce & Set to Grow | 2016

Near Term Production: Pre-Mined Residue (PMR) – Cash Generative Business

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Near Term Production: PMR Source & History

Set to Produce & Set to Grow | 2016 North Central South

• Historically, miners would blast the face and manually

remove visible gold from the ore (reef picking) under very difficult conditions.

• Fine fractions of reef could not be extracted in this

manner.

• Due to logistical constraints the reef was picked

underground and the ‘waste’ pushed back into the stopes to act as support.

• Stone walls were erected to close off these sections.
• This ‘waste’ contains all the fine fraction gold that

could not be extracted and is a valuable resource in its

• wn right.
• The PMR is prevalent throughout the mining area with

large potential PMR exploration resource.

• The mining is divided into three regions: North, Central

and South. The focus for the first and second phase of the PMR project is the Central Region.

• Between 17 and 35 million tonnes of PMR material.
• Stonewall expects PMR project to generate

significant revenue which is attributed to:

• Low cost and easily accessible oxidised ore.
• Significantly upgrading through wet screening.
• Able to introduce scalable, cost-effective mining.
• Proven Metallurgical process flow, plant and

equipment in place.

TGME CIL Au Plant

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• Early in 2013, Stonewall discovered a significant new, pre-explored, pre-developed, pre-drilled, pre-

blasted exploration target known as the PMR Project.

• Stonewall commenced mining and plans to transition to full scale production. The phases are as

follows: Phase 1: Targeted 10,000tpm commenced in January 2015 (316oz/month).

• This phase was interupted by an illegal strike in Q2 2015
• Expanded studies commenced to firm up confidence levels and investigate improved mining

plans and reduce mining volume risk Phase 2: Recommence production targeting 30,000tpm by 2016 (948oz/month)* Phase 3: Targeting an increase in mining to 80,000tpm early 2017 (2,527oz/month)*

• Phase 2 & Phase 3 preparation:
• Focus on mining volume
• Ensuring consistency of feed and grade
• Increasing confidence and expanded PMR sources
• Additional sampling and exploration targeted

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Near Term Production: PMR Production Phases

* This is a strategic target only, not a forecast or projection. Refer forward looking statement on page 2.

Set to Produce & Set to Grow | 2016

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Near Term Production: Cost Study

Set to Produce & Set to Grow | 2016 An operating cost comparison for conventional underground mining in South Africa to the estimated cost for the Pre-Mined Residue Mining.

Source of raw data: Minxcon December 2014 (in ZARs) This is not the analysis on the company’s forecasts, but the views of an independent competent person based on industry analysis. However the company has experienced similar results in its PMR testing.

ZAR

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Near Term Production: PMR Conceptual Exploration Target PMR

Set to Produce & Set to Grow | 2016

• Although not yet included in the Company’s resource statement, significant sampling, mapping and

accesses to multiple mines (more than 1,500 samples) and testing for both grade and fractional analysis has shown the prevalence of the material across the mines.

• The estimation of the conceptual exploration target is based on an in situ grade range of between 1.28

g/t and 2.13 g/t albeit that this may vary from one area to the next.

*Refer forward looking statement on page 2. Subject to resource confirmation, planning and concept study completion

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Near Term Production: PMR Successfully Trialled

Set to Produce & Set to Grow | 2016

Mining Pre-Concentration

• PMR Mined at 40,000tpm
• Material pre-concentrated

using wet screening.

• 80-90% of gold concentrated

into ±20-30% of mass.

• Targeted screen size 15mm.
• + 15mm discarded.
• - 15mm material to plant.
• Target 17,000tpm of Material from Pre-Concentration step into plant,

milled, thickened and processed through CIL plant.

• Once through CIL section gold is recovered in Elution circuit and then

smelted into bars for sale.

Processing

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Near Term Production: PMR Summary

Set to Produce & Set to Grow | 2016

• Re-opening of mines is fast and inexpensive.
• Existing plant and infrastructure to be utilised resulting in low capex required to commence project*.
• Most of the gold is contained in the minus 25mm fraction, which allows for upgrading by means of

screening, which reduces processing costs substantially.

• PMR startup & operation schedule is underway and is expected to be complete in late March/April

2016.

• Target to cover 7+ years minimum project life,
• Firm up Capital Spend requirement including for plant-refurbishment and operating expenses to

transport initial PMR ore sources from Beta Mine.

• Bulk trial mining and testing of metallurgy and process flow completed in early 2015.
• Extensive sampling programme:

 More than 1,500 samples and assays of the pre- mined residue have been taken for preplanning of the trial mining phase and ultimate resource confirmation.*

• Over 3,000 historical maps have been scanned, digitized and analysed for potential additional PMR ore

calculations.

* This is a strategic target only, not a forecast or projection. Refer forward looking statement on page 2.

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Production: Operations Update – Bosveld & the Klipwal Plant

Bosveld Subsidiary – Klipwal CIL Plant

• Stonewall’s subsidiary Bosveld Mines

(Pty) Ltd entered into a 3-year lease agreement with private mining company BMI for the Klipwal Plant which transfers all Klipwal Plant and tenement associated costs to BMI.

• Agreement is expected to generate

additional revenues through rental income and profit share (expected ZAR 350,000pm initially then tripling within 9 months). Set to Produce & Set to Grow | 2016

• Bosveld project contains 1 Mining Right which covers 7,837 hectares of area, it hosts an 18 level

500m down-depth historical gold mine. It presents significant exploration upside for Stonewall in the future.

200000 400000 600000 800000 1000000 1200000 1400000

ZAR

TGME's Royalty from Bosveld Plant Lease

Source of the Royalty Chart: BMI. This is not the analysis on the company’s forecasts, but the estimates provided by the operator/leasee of the Klipwal Plant, BMI.

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Growth: Exploration

Set to Produce & Set to Grow | 2016

Exploration Results

• Completed first phase of surface exploration at Beta.
• 6,601m drilled in 2013/2014, lab testworks halted due to 2014/2015 corporate restructure. Continued Lab

testwork for drill cores planned for Q2 of 2016.

• Drilling at Vaalhoek intersected extensive sulphide mineralisation.
• Some existing mines characterised by multiple reefs.
• Exploration strategy expected to increase resources by an estimated 0.34 Moz to 3.07 Moz
• Glynn’s and Rietfontein reef extensions
• Vaalhoek reef and strike extensions
• Upgrade Competent Person’s Report

* This is a strategic target only, not a forecast or projection. Refer forward looking statement on page 2. Subject to resource confirmation, LOM extension, planning and concept study completion

Conceptual ounces in the exploration target

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Set to Produce & Set to Grow | 2016

Growth: Exploration Joint Venture

Further exploration and drilling planned at Sabie and TGME to firm up Reserves for future hardrock mining and increase resources from extention-drillings on existing ore bodies. Potential joint development announced for Sabie Mines Strategic exploration partner engaged (Chinese Exploration Bureau), including potential placement of up to A$4m. Due Diligence well advanced.

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Arbitration Update: Shandong Qixing Iron Tower Co.

Stonewall is fully committed to the Arbitration claim. The Arbitration against Shandong Qixing Iron Tower Co., Ltd is approaching a critical stage with the Tribunal Hearing scheduled for 11 to 14 March 2016:

Where: Hong Kong International Arbitration Centre The Claim: Not less than US$110 million Costs: Litigation funding Consortium (funded)

• Funders share is 45 percent of a successful claim
• Stonewall retains 55 percent of a successful claim

Key Process and Timeline：

• Stonewall’s Statement of Claim submitted (May 2015)
• Qixing’s Statement of Defense submitted (July 2015)
• Stonewall’s Claimants response submitted (November 2015)
• Qixing’s Response (due mid December 2015) - above completed
• Tribunal hearing (11 to 14 March 2016)
• Final decision by the tribunal (mid 2016 – indicative only)
• Enforcement through the courts in China (if necessary)

Set to Produce & Set to Grow | 2016

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More: South African assets overview

Stonewall has 7 mining rights and 6 prospecting rights covering over 62,000Ha in South Africa. Stonewall has a JORC compliant mineral resource of 2,99Moz. (refer resource statement)

TGME – Central / Northern

• Gold plant with crushing, milling, flotation, CIL, elution circuit, gold room, tailings dams and analytical laboratory
• Gold Plant capacity of approximately 17,000 tonnes per month
• Administration and support infrastructure to support mining and processing activities
• Several accessible mines
• 10 Houses (1 on-site, 9 are located in the town of Graskop 17 km from mine site)

TGME – Sabie / Southern

• Large industrial site including stores, sheds and offices to be used for an administrative and support hub for

upcoming exploration programs and future mining/processing operations

• Accessible mines

Bosveld (Klipwal Mine)

• Gold CIL Plant with Crushing, Milling to produce loaded carbon.
• Gold Plant capacity of around 4,000 tonnes per month.
• Administration and support infrastructure to support mining and processing activities
• Accommodation village with 14 houses
• Vertical shaft complete with headgear and winder
• Accessible underground mine, historically produced to 400m depth, 18 levels.

Set to Produce & Set to Grow | 2016

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More: The year 2015 at a glance

January to May

• US Based Notes to fund partial implementation of the PMR project following collapse of Qixing acquisition
• Shareholder’s Loan (Beatle Rock) to fund general corporate expenses following collapse of Qixing

acquisition

• Shareholder Loan (Hanhong) ) to fund general corporate expenses following collapse of Qixing acquisition
• Internal restructure and right sizing cost base
• Pre-mined residue initial plan completed and implemented, however implementation interrupted due to

industrial action and the need for further funding and detailed planning requirements June to November

• Introduction of new cornerstone investor, Tasman Funds Management
• Injection of approx. A$10.3m through placements and unsecured convertible notes
• Retirement of MMCAP convertible note (A$3m)
• Repaid “Floor Price” notices for US based notes (A$1.6m with only A$120k outstanding)
• New Board and Management (Including CEO)
• Initiated revised PMR feasibility studies in order to commence production in 2016
• Strategic exploration partner engaged (Chinese Exploration Bureau), including potential placement HoA

funding of up to A$4m under Due Diligence and Foreign Investment Review Board application. Set to Produce & Set to Grow | 2016

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More: Reduced Overheads for South Africa Operations

Corporate Head Office

• Relocation of the Stonewall Mining

Head Office to TGME (Gold Plant on- site) and a shared office for Geological Information System

• Reduced corporate support staff by

November 2015 TGME

• Commenced with right sizing strategy
• Reduced security overhead
• Implemented energy reduction

strategies for lower costs Targeting 60 % reduction in overheads by March 2016 Set to Produce & Set to Grow | 2016

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Resources Table

Mineral Resources for Stonewall Mining as at 30 November 2014

Set to Produce & Set to Grow | 2016

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Set to Produce & Set to Grow | 2016

Thank You

Trevor Fourie Australian Director Ph: +61 414 324 960 trevor@stonewallmining.com Bill Richie Yang Australian Director Ph: +61 404 831 804 richiey@stonewallmining.co.za Peter Hunt Company Secretary Ph: +61 8 7324 6000 peter.hunt@bdo.com.au

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