KUN-MANIE NICKEL AND COPPER SULPHIDE DEPOSIT PROACTIVE INVESTORS - - PowerPoint PPT Presentation

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KUN-MANIE NICKEL AND COPPER SULPHIDE DEPOSIT PROACTIVE INVESTORS - - PowerPoint PPT Presentation

KUN-MANIE NICKEL AND COPPER SULPHIDE DEPOSIT PROACTIVE INVESTORS ONE2ONE FORUM JANUARY 2016 2 Disclaimer The information contained in this confidential document ( Presentation ) has been prepared by Amur Minerals Corporation (the "


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KUN-MANIE NICKEL AND COPPER SULPHIDE DEPOSIT PROACTIVE INVESTORS ONE2ONE FORUM

JANUARY 2016

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2 2

The information contained in this confidential document (“Presentation”) has been prepared by Amur Minerals Corporation (the "Company"). It has not been fully verified and is subject to material updating, revision and further amendment. This Presentation does not constitute or form part of, and should not be construed as, an

  • ffer for sale or subscription of, or solicitation of any offer to purchase or subscribe for, any shares in the Company nor should it form the basis of, or be relied on in

connection with any contract or commitment whatsoever. This Presentation has not been approved by any of the Company’s professional advisers, nor by any authorised person pursuant to Section 21 of the Financial Services and Markets Act 2000 and therefore it is being delivered for information purposes only to a very limited number of persons and companies who are persons who have professional experience in matters relating to investments and who fall within the category of person set out in Article 19 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order") or are high net worth companies within the meaning set out in Article 49 of the Order or are otherwise permitted to receive it. Any other person who receives this Presentation should not rely or act upon it. By accepting this Presentation, the recipient represents and warrants that they are a person who falls within the above description of persons entitled to receive the

  • Presentation. This Presentation is not to be disclosed to any other person or used for any other purpose.

While the information contained herein has been prepared in good faith none of the Company nor any of its shareholders, directors, officers, agents, employees or professional advisers give, have given or have authority to give, any representations or warranties (express or implied) as to, or in relation to, the accuracy, reliability or completeness of the information in this Presentation, or any revision thereof, or of any other written or oral information made or to be made available to any interested party or its advisers (all such information being referred to as "Information") and liability therefore is expressly disclaimed. Accordingly, neither the Company nor any

  • f its shareholders, directors, officers, agents, employees or advisers take any responsibility for, or will accept any liability whether direct or indirect, express or implied,

contractual, tortious, statutory or otherwise, in respect of the accuracy or completeness of the Information or for any of the opinions contained herein or for any errors,

  • missions or misstatements or for any loss, howsoever arising, from the use of this Presentation.

Neither the issue of this Presentation nor any part of its contents is to be taken as any form of commitment on the part of the Company to proceed with any transaction and the right is reserved to terminate any discussions or negotiations with any prospective investors. In no circumstances will the Company be responsible for any costs, losses or expenses incurred in connection with any appraisal or investigation of the Company. In furnishing this Presentation, the Company does not undertake or agree to any obligation to provide the recipient with access to any additional information or to update this Presentation or to correct any inaccuracies in, or omissions from, this Presentation which may become apparent. Certain forward looking statements may be contained in the presentation which include, without limitation, expectations regarding metal prices, estimates of production, operating expenditure, capital expenditure and projections regarding the completion of capital projects and pre feasibility studies as well as the financial position of the company. Although Amur believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to be accurate. Accordingly, results could differ from those projected as a result of, among other factors, changes in economic and market conditions, changes in the regulatory environment and other business and operational risks. Neither this Presentation nor any copy of it may be (a) taken or transmitted into Australia, Canada, Japan, the Republic of Ireland, South Africa or the United States of America, their territories or possessions; (b) distributed to any U.S. person (as defined in Regulation S under the United States Securities Act of 1933 (as amended)) or (c) distributed to any individual outside Australia, Canada, Japan, the Republic of Ireland or South Africa who is a resident thereof in any such case for the purpose of

  • ffer for sale or solicitation or invitation to buy or subscribe any securities or in the context where its distribution may be construed as such offer, solicitation or

invitation, in any such case except in compliance with any applicable exemption. The distribution of this document in or to persons subject to other jurisdictions may be restricted by law and persons into whose possession this document comes should inform themselves about, and observe, any such restrictions. Any failure to comply with these restrictions may constitute a violation of the laws of the relevant jurisdiction.

Disclaimer

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3

PROJECT STATUS

Low cost

  • perations

Access to hydro power and rail network World-Class Nickel Project Phased Project Development Full State Support Far East Fund committed to invest in infrastructure

  • Developing world-class (831k Ni t equivalent

resource) nickel copper sulphide project located in Amur region (Russia)

  • Amur Minerals Corporation (100% holding) is

LSE AIM listed company Key highlights  Large scale project (up to 50k t annual Ni equivalent production) with significant exploration upside (highly likely resource to reserve conversion)  High operational efficiency (operating cash cost – 6,056 USD/Ni-eq t)  Broad state support (Far East Development Fund, Ministry of Far East Development) and sizable regional tax benefits  Strong long term fundamentals: nickel price is set to grow in coming years as a result of market rebalance due to increasing supply cuts Resources 121 Mt @ 0,54%Ni, 0,15% Cu Reserves 90 Mt @ 0,59%Ni, 0,16% Cu

1st phase (feasibility study): 2016 2nd phase (project design): 2016-2017 Construction: 2017-2019

AMC projected to be a top producer globally Two Stage Infrastructure Development

1 2 3 4

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4

NICKEL MARKET FUNDAMENTALS

A fundamentally attractive commodity in the right point in the cycle for investing

1,993 1,990 1,941 1,869 1,884 1,934 2,044 2,054 1,779 1,846 1,881 1,937 1,981 2,033 2,076 2,121 262 407 467 398 302 204 171 104 500 1,000 1,500 2,000 2,500 2013 2014 2015F 2016F 2017F 2018F 2019F 2020F World mine production, kt Total world nickel use, kt Reported total commercial stocks, kt

  • Demand projected to recover: stainless steel production

to recover and increase; nickel price reflects stainless steel destocking, not the market’s fundamental weakness

  • Over 60% of nickel producers operate with negative

margins at current prices – mine closures are inevitable

  • Indonesia maintaining its export ban on nickel ore. Supply

from Philippines doesn’t satisfy Chinese demand

  • China is seeking alternatives to imported nickel ore, such

as nickel pig iron mainly from Papua New Guinea, to maintain refined nickel production

  • Changes in the trade balance towards increasing imports
  • f nickel pig iron projected to raise nickel units and

refined nickel price

  • LME nickel stocks since June 2015 highs indicating the

market may have reached its turning point Despite global economic turbulence and decreasing commodity prices, nickel market has strong long-term fundamentals:

Nickel Supplies Deficit Nickel oversupply

In the mid-term, new market entrants projected to benefit from projected tightening nickel supply and increasing prices

214 145 60

  • 68
  • 96
  • 99
  • 33
  • 67

15,034 16,891 12,318 14,125 16,000 18,364 18,500 20,864

  • 5,000

10,000 15,000 20,000 25,000 2013 2014 2015F 2016F 2017F 2018F 2019F 2020F

  • 150
  • 100
  • 50

50 100 150 200 250 Refined Nickel Market Balance Average LME Cash Nickel Price, $/t Wood Mckenzie

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5

RESOURCE BASE

  • Kun-Manie is one of the largest sulphide nickel-copper

deposits in the world

  • AMC engaged in the development of Kun-Manie since 2004

and holds a 20-year detailed exploration and production license (valid until July 2035)

  • >40 km of diamond core drilling confirms 121 million tonnes
  • f resource over 5 deposits (Kubuk, Gorny, Ikenskoe,

Vodorazdelny, Maly Kurumkon)

  • 6 km of 2015 season drill holes completed to both infill and

expand Maly Kurumkon up to 400m

  • Results indicate that grades continue along strike and dip

directions in four deposits providing for strong exploration upside

  • Highly efficient underground mining areas identified

17 37 39 55 58 70 99 169 203 274 275 50 100 150 200 250 300 PT ANTAM (Persero) Tbk Anglo American Plc Kun-Manie* Eramet SA Sumitomo Metal Mining Co. Sherritt International Corp BHP Billiton Ltd Jinchuan Group Ltd Glencore International MMC Norilsk Nickel Vale SA

Largest Nickel Producers in the world (2014, kt)

* Average for the Kun-Manie mine during first 5 years 200 400 600 800 Nickel Copper Inferred Indicated Measured 15.7 37.8 67.3 0.1 0.2 0.3 0.4 0.5 0.6 20 40 60 80 Measured Indicated Inferred Resources Ni Grade, % Cu Grade, % Kt Mt 10 20 30 40 50 Platinum Palladium Inferred Indicated Measured 651 178 Kg 17 18

Overview of the Kun-Manie resources potential

15.7 37.8 67.3 Measured Indicated Inferred 121 Mt Kun-Manie projections indicated a potential top global nickel producer

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SLIDE 6

6 With state support, the project’s capital cost Could be decreased

STATE SUPPORT: INFRASTRUCTURE

  • Kun-Manie is located in Zeya area of Amur

region in the Far Eastern Federal District, 320 km from Baikal-Amur rail line (BAM) and 360 km from Zeya hydro power plant

  • Project envisages construction of 320 km road

linking Kun-Manie deposit with BAM and 50 km power line from Zeya HPP substation to BAM Infrastructure construction in the Far East is strongly supported and sponsored by the government

  • Far

East Development Fund negotiating investment in project infrastructure

  • State program for the development of the Far

East allows for state financing of infrastructure for large industrial projects, such as Kun-Manie

  • With access to Zeya hydro power plant, AMC

smelter options will have some of the lowest electric power tariffs globally 1 3 4

1 Deposit and

concentrator

2 Access road 4 Zeya hydro

power plant Legend

2

3 Smelter

ZAO “Kun-Manie” mining license

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7 Given front-loaded production schedule, preferential tax regime provides tremendous savings to the project Total tax savings estimated at ………….

STATE SUPPORT: TAX REGIME

0% 10% 18.0% 18.0% 2% 2% 0% 5% 10% 15% 20% Years 1-5 Years 6-10 Year 11

  • nwards

General tax regime Federal budget Regional budget

20% 40% 60% 80% 100%

0% 20% 40% 60% 80% 100% 1-2 3-4 5-6 7-8 9-10 11

  • nwards

Income tax Natural resource extraction tax

  • The project will be eligible for profit tax reduction for first

10 years of mining operations, including: – Regional profit tax exemption in first 5 years of

  • perations

– Reduced regional tax rate (10% vs. regular 18%) for second 5 years of operations – Federal profit tax exemption (2%) until 2029

  • Total estimated tax savings of >$400mm in years 1 to 10
  • Mineral extraction tax will be reduced for the project in

first 10 years of operations with full tax exemption in first 2 years

  • Regular tax rate of 8% will only be achieved in year 11

with step increase from 0% initial rate to regular rate over 10 year period

  • Total estimated tax savings of >$100mm in years 1 to 10

Profit tax rate Applied natural resource tax rate as % of regular rate >$500mm

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8

92 92 67 63 53 51 51 49 47 44 43 41 39 36 36 23 33 29 26 26 11

Koniambo (New Caledonia) Ambatovy (Madagascar) Ramu (Papua New Guinea) Goro (New Caledonia) Barro Alto (Brazil) Turnagain (Canada) Weda Bay (Indonesia) Onça Puma (Brazil) Taganito (Philippines) Ravensthorpe (Australia) Wingellina (Australia) Sheba's Ridge (South Africa) Araguaia (Brazil) Dumont (Canada) Decar (Canada) Kun-Manie Santa Rita (Brazil) Wellgreen (Canada) Mayaniquel (Guatemala) Kalgoorlie (Australia)

OPERATIONAL EFFICIENCY

  • Kun-Manie is close to core nickel consuming markets –

China, Japan and South Korea

  • High value added product: low-grade matte, high-grade

matte or cathode precipitate metal (subject to DFS)

  • Project assumes the construction of an owner-operated

smelter on the Baikal-Amur railway line allowing to avoid loss of value on third party smelting and transportation

  • Project has a highly attractive capital and operating

efficiency: operating cash costs – 6,056 USD/Ni-eq t Estimated Capital intensity

$/ Ni t (Ni-equivalent t)

Proximity to Asian markets Access to low cost hydro power Low labour and diesel costs Preferential tax regime State subsidies for infrastructure

Estimated Operating cost

$/ Ni t (Ni-equivalent t) 6,083 5,128 7,298 6,056 20,504 17,848 5,000 10,000 15,000 20,000 25,000 1-5 years (Ni only) 1-5 years (Ni-eq) Life of mine (Ni) Life of mine (Ni-eq) Cash Cost Historic Ni Price (2006-2015 average) Forecast Ni price (real terms)

56 494 334 436 Mining Smelting Refining Infrastructure

($/t)

Infrastructure construction potentially subsidized by the government

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9

585 56 10 27 17 Nickel Copper Cobalt Platinum Palladium

Annual Revenue

$mm

KEY OPERATIONAL AND FINANCIAL INDICATORS

An ideal production solutions for potential strategic partners and off-takers

Production Ni, kt Cu, kt Co, kt Pt, MOz Pd, MOz TOTAL 407 119 4 256 291

  • The project assumes three production options – from low

grade matte to cathode precipitate metal: Overview of Production Options Key Production Indicators

15.1 6.0 6.0 1-8 years 9-15 years Mining, Mt Strip mining, Mt Low-grade Matte (LGM) High-Grade Matte (HGM) Cathode Precipitate Metal

A LGM would contain approximately 25% combined nickel, copper and cobalt suitable for on-sale and future smelting and refining A HGM would contain approximately 70% combined nickel, copper and cobalt and would (typically) be sold to a refinery for onward processing The final product - the recovered metal would include nickel and copper cathodes, cobalt precipitate and platinum and palladium metals 695 1-5 years

$695 mm

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10

FUNDING AND FINANCING ALTERNATIVES

Potential Investor Universe Financing Sources

  • International Banks
  • Equity Markets
  • Industry players
  • Sovereign Funds
  • Potential JV Partners

Participation Opportunities Investor Profile Investor Participation

  • Commodity Knowledge
  • Resource Industry Experience
  • Far East Experience
  • Potential JV Partners
  • Skilled JV Partner
  • Large Project Experience
  • Commodity Trading
  • Financial Strength
  • Longevity
  • Far East Experience
  • Mining
  • Metallurgy
  • Processing and Smelting
  • Rail Transportation
  • EPCM
  • Transport and Energy Infrastructure

Fundraising Goals (2016-2017) #1 Prepare Bankable Feasibility Study #2 Strategic Partner and complete project design #3 Construction financing Operations

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MILESTONES AND POTENTIAL TIMELINE

Project Implementation Timeline Stages 2015 2016 2017 2018 2019 2020

  • 1. Funding and Financing
  • 2. Ore Sampling
  • 3. Reserves Upgrade
  • 4. Metallurgical Pilot
  • 5. Environmental Studies
  • 6. Process Engineering
  • 7. Infrastructure Engineering
  • 8. Bankable Feasibility Study
  • 9. Finance
  • 10. Construction
  • 11. Production

 In April 2004 ZAO Kun-Manie, a wholly owned subsidiary

  • f the AMC, was granted an exploration license

 In November 2007, consultants SRK completed a pre- feasibility study for the AMC  Since 2007, exploration and drilling has been conducted

  • n an ongoing basis and an updated resource estimate

was compiled in late 2013 (and subsequently upgraded in April 2015)  In June 2014, Rosnedra (the state licensing agency) confirmed that the initial exploration phase of the project had been completed and that the company had met its obligations  In May 2015 the Russian Prime Minister D. Medvedev had approved the AMC’s detailed exploration and mine production license until July 2035  During 2014 and early 2015, the Company internally updated the PFS to reflect information acquired since 2007 and also updated operating and capital costs to Q1 2015 to reflect inflation and currency fluctuations  During 2004-2015 the AMC completed 35 km of diamond core drilling, conducted metallurgical tests (conventional sulphide flotation method works, product can be smelted)

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AMUR MINERALS CORPORATION

Key information

  • Amur Minerals Corporation (AMC) is a developing mineral exploration company

focused on base metal projects in the Far East of Russia. The company’s principal asset is the Kun-Manie sulphide nickel, copper project located in Amur Oblast

  • AMC received a production license in May 2015 which is valid until 1 July 2035

and allows the AMC’s subsidiary, ZAO Kun-Maine, to recover all revenues from 100% of the mined metal

  • AMC is listed on the AIM (LSE) since 2006. The company is domiciled in the British

Virgin Islands. Currently its market capitalization amounts to $59,1mm*

  • Currently AMC aims to analyze results from its recently-completed infill drilling

program and metallurgical test work results in order to prepare a Definitive Feasibility Study for the development and ultimate production at Kun-Manie

Source: AMC, LSE * As of November 13, 2015

Market Data AMC Shareholders Share Price Dynamics

5 10 15 20 25 30 35 40 20 40 60 80 100 120 19-Nov-2010 19-Feb-2011 19-May-2011 19-Aug-2011 19-Nov-2011 19-Feb-2012 19-May-2012 19-Aug-2012 19-Nov-2012 19-Feb-2013 19-May-2013 19-Aug-2013 19-Nov-2013 19-Feb-2014 19-May-2014 19-Aug-2014 19-Nov-2014 19-Feb-2015 19-May-2015 19-Aug-2015 Trade Volume, mm Share Price, GPb

Kun-Manie Production Licence Awarded AMC received a positive update from Rosnedra related to its application for a mining licence

Ticker AMC.L Share price (13/01/2016) 6,9GBX Shares Outstanding 460.25 mm Options 55,9 mm Market Capitalization £31.76mm Resources Ni-eq (JORC compliant) 831 kt 16% 13% 11% 11% 11% 5% 5% 4% 1% 24% TD Direct Investing Nominees Hargreaves Lansdown (Nominees) Investor Nominees Limited HSDL Nominees Limited Barclayshare Nominees Limited HSBC Client Holdings Nominee (UK) Wealth Nominees Limited Lawshare Nominees Limited Менеджмент Прочие

mm shares GBX

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13 . .

SHAREHOLDER

The sole shareholder of the Fund is the State Corporation "Bank for Development and Foreign Economic Affairs (Vnesheconombank)"

ABOUT THE FUND

The Fund is a vital element of state system established to support accelerated development of the economy of the Far East

CAPITAL

Charter capital of the Fund is in excess

  • f 15 bn RUB.

In 2016, the Fund will be recapitalized in accordance with Presidential decree

The Fund is focused on investing in INFRASTRUCTURE to support large scale investment projects in the Far East The target of the Fund for the next FIVE YEARS is to implement no less than 20 investment projects with total value of more than 700 billion RUB (10 billion USD)

PROJECT ASSISTANCE FAR EAST DEVELOPMENT FUND