MANAGING DIRECTOR & CEOS PRESENTATION TO THE 2010 ANNUAL GENERAL - - PDF document
28 May 2010 MANAGING DIRECTOR & CEOS PRESENTATION TO THE 2010 ANNUAL GENERAL MEETING Perilya ( ASX:PEM ), a full copy of the Managing Director & CEOs presentation to the Companys Annual General Meeting is attached. Ends For
Perilya Limited 1
28 May 2010
MANAGING DIRECTOR & CEO’S PRESENTATION TO THE 2010 ANNUAL GENERAL MEETING
Perilya (ASX:PEM), a full copy of the Managing Director & CEO’s presentation to the Company’s Annual General Meeting is attached. Ends
For further information: Investors & Media: Paul Arndt Managing Director +61 8 6330 1000 Inquiries: Paul Marinko Company Secretary +61 8 6330 1000
Safety Lead Indicators
1000
Key Highlights
400 500 600 700 800 900
100 200 300
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A p r
Number of Incidents
Frequency Rates
All Injury
J F M A p M J J A u S O N D J F M A p Safety Meetings Safety Interactions Task Observations Inspections Hazards & Near Miss Reports
3 4 5 6 45 55 65 75 85 95 105
Incidents and Frequency Rate Lowest recorded AIFR 24.9
1 2 J a n
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M a r
A p r
M a y
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N
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5 15 25 35
F M M A S N D F M All Injuries All Inj. FR
Cost / Tonne Ore Milled
120 140 160 (A$)
Cost / t Payable Metal
2 000 2,500 3,000 (A$) 20 40 60 80 100 500 1,000 1,500 2,000 N
J a n
M a r
M a y
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S e p
N
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N
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Actual Linear (Actual) N
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S e p
N
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N
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Actual Linear (Actual)
Tonnes Hoisted per Employee
(t)
Employee Manpower Trend 2008 - 09 p p y
200 250 300 350 400 450 (t)
p oyee a po e e d 008 09
400 500 600 700 800 50 100 150 J u l
A u g
S e p
O c t
N
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M a y
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100 200 300 J u l
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N
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Actual Linear (Actual) Actual 2 per. Mov. Avg. (Actual)
Financial Results Summary
y 6 Months to 6 Months to 12 Months to Dec-09 Jun-09 Jun-09 Revenue 151.7 98.5 211.5 Net Profit / (Loss) for the period 28.5 2.1 (75.1) EBITDA 55.0 11.4 (60.3)
months
with guidance of combined Zn+Pb of 120-130kt contained
EBITDA 55.0 11.4 (60.3) Shares on Issue (M) 526.1 394.6 394.6 Simple EPS (annualised) 0.11 0.01 (0.19) Cashflow from Operations 50.4 (12.9) (59.5) (*) Cash 116.7 36.9 36.9
contained.
US$0.51/lb zinc over the period
Net Cash / (Debt) 54.7 28.3 28.3 Total Assets 294.3 160.8 160.8 Shareholders Equity 144.8 83.7 83.7 (*) Prior to $60.3 million hedge book closure in FY09
US$0.51/lb zinc over the period
Lingnan – 52.0% shareholder
Operating Results Summary Metal Production - Broken Hill:
35,100 35,200 75,300
29,200 27,700 48,100 Combined Zn + Pb (tns) 64,300 62,900 123,400
2010 onwards
0.91 0.91 Beltana Sales (contained Zn) 26,180 17,320 32,602 Broken Hill (all in US$/lb payable Zn)
0.95 0.57 0.66
0 44 0 58 0 85
0.44 0.58 0.85
0.51 (0.01) (0.19)
3.2 80,000
2.0 2.4 2.8 50,000 60,000 70,000 s (Silver) & Lead) 0.8 1.2 1.6 20,000 30,000 40,000 Million Ounces Tonnes (Zinc & 0.0 0.4 10,000 ,
Perilya (*) Kagara JML CBH Terramin y ( ) g CY 2009
Zinc (LHS) Lead (LHS) Silver (RHS)
– (*) Excludes an additional 43 500 tonnes of zinc sold in 2009 from Beltana Project – Source: ASX Release for respective companies – ( ) Excludes an additional 43,500 tonnes of zinc sold in 2009 from Beltana Project
Fundamentals remain strong, despite current supply surplus China and India remain large, growing sources of demand
Mine supply falls away significantly in 3 – 5 years No major mine supply to replace
No “Super Giants” have been found (e.g. Broken Hill, Mt Isa, Red Dog) Cost profiles increasing – structural shift to lower grade / higher cost mines Consensus forecasts predict stable prices for 2010-11 increasing in subsequent
HEDGING 50% Pb d
2,800 3,000
AUD Metal Prices ($/tn) (Zn + Pb)
50% Pb prodn at A$2,829/tn to June 2011
2,200 2,400 2,600
/tonne
1,800 2,000
A$/
1,400 1,600
Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10
AUD Zn AUD Pb
Annual Zinc Production‐ 2010
100 200 300 400 500 600 700 Rampura ‐ Agucha Red Dog
Annual Zinc Production 2010
Forecast: 2013 - 2015 Long term producer: short term environmental risk?
Century Antamina Mt Isa
CLOSED by 2015 Production output to reduce by 55% by 2015
San Cristobel Lanping Brunswick
CLOSED by 2013 Production output to reduce by 25% by 2015
Tara McArthur River Lisheen Skorpion
CLOSED by 2015 CLOSED by 2016
Skorpion Vazante Zyryanovsk Kidd
Production output to reduce by 30% by 2015 CLOSED by 2016 p y y
Source: Brook Hunt
A l Zi P d ti 2015
S ll d
100 200 300 400 500 600 700 Ozernoye Dugald River
Annual Zinc Production ‐ 2015
Status ? Feasibility
Smaller and higher cost
Paragsha Super Pit Sardana Lady Loretta
Brook Hunt “Probable”
Dairi Project Mehdiabad Gamsberg
Financing/Feasibility. Iranian Political Risk Feasibility/Permitting
Mt Isa Super Pit Selwyn Kipushi Ci
Brook Hunt “Possible” Feasibility. F ibilit
Citronen Izok Lake Hilarion Hacket River
Possible Feasibility. Feasibility Feasibility
Hacket River
Source: Brook Hunt
y
+10 Y Mi Lif t S th O ti (JORC R ) Broken Hill
Flinders
Zinc, Lead & Silver
Mt Oxide
Copper Tampang (50%)
Copper
17.8% Pb+Zn over 0.6m 11.5% Pb+Zn over 0.2m
N4270A
(1,387m)
100x100m 75m from hole
7240A 1.1m @ 14.7% Pb+Zn
Currently drilling EM N4970
(2 309 ) 21.9% Pb+Zn over 0.4m
anomalies
1km
2010 Modelled EM Plates (approximate) (2,309m)
>400x400m 150m from hole
Silver Peak Shaft Potosi Pit Portal Silver Peak Project Current Development Potosi Extended Project Potosi Extended Project
Evaluations into the Potosi & Silver Peak deposits have been undertaken including finalisation of mining plan and detailed costings for the project now completed. Mining Inventory of 1.4 Mt @ 8.8% Zn, 3.9% Pb and 43 g/t Ag Additional drilling in 2010 to add to existing resources & improve project economics. Drivers for development go-ahead are:-
pp p pp p g
Moderate results for Sands Project but Moderate results for Sands Project but
encouraging intersections in the North Mine Zinc Lodes and at Junction North.
New zones are close to existing decline New zones are close to existing decline
further drilling program budgeted for 2011.
15.0 325 9.8 1.60 11549 Zn (%) Ag (g/t) Pb (%) Length (m) Hole 15.0 325 9.8 1.60 11549 Zn (%) Ag (g/t) Pb (%) Length (m) Hole
100m
Junction North #3 Lens
100m
Junction North #3 Lens 3.2 275 5.0 4.60 and 3.1 219 4.2 9.20 and 12.8 634 18.3 4.10 11552 8.4 348 11.1 2.85 and 16.5 471 13.6 2.65 11550 3.2 275 5.0 4.60 and 3.1 219 4.2 9.20 and 12.8 634 18.3 4.10 11552 8.4 348 11.1 2.85 and 16.5 471 13.6 2.65 11550
11527 11528 11531 11549
#2 Lens
11527 11528 11531 11549
#2 Lens 4.1 741 19.5 4.20 11533 8.4 515 14.8 6.05 11555 8.0 127 5.9 1.95 11554 1.2 32 1.0 4.60 and 22.6 394 13.7 0.90 11551 4.1 741 19.5 4.20 11533 8.4 515 14.8 6.05 11555 8.0 127 5.9 1.95 11554 1.2 32 1.0 4.60 and 22.6 394 13.7 0.90 11551
11530 11549 11550 11551 11554 11536
Decline
11530 11549 11550 11551 11554 11536
Decline 5.3 60 13.3 16.00 11530 3.4 36 6.6 10.10 11531 2.3 43 7.3 14.25 11528 2.1 37 6.4 9.50 11527 9.1 246 9.9 10.50 11536 5.3 60 13.3 16.00 11530 3.4 36 6.6 10.10 11531 2.3 43 7.3 14.25 11528 2.1 37 6.4 9.50 11527 9.1 246 9.9 10.50 11536
11552 11555 11556 11533
Underground Drilholes Surface Drillholes
11552 11555 11556 11533
Underground Drilholes Surface Drillholes Underground Drilholes Surface Drillholes Underground Drilholes Underground Drilholes Underground Drilholes
High Grade Target for 2010
I th t 12 th h hi d 121 041
In the past 12 months have shipped 121,041
tonnes of ore at a grade of 30.1% from Beltana.
2010 exploration program of $3 million to test for
additional discoveries and increase known additional discoveries and increase known resources.
There are a number of untested zones currently
being drill tested Success should deliver high- being drill tested. Success should deliver high- value, low-cost Zn tonnes
Recent success at Moolooloo (see graphic);
positive indications for new project; more drilling positive indications for new project; more drilling required.
Reliance deposit marginal at current metal
g g project development decision.
Significant Potential in favourable North Moolooloo section. g Zinc price environment
General Manager appointed
underway.
now underway to upgrade existing resources to higher confidence (“Indicated & Measured”).
targeting additional tonnes & higher grades within the ‘optimized pit shell’.
g g g p possible transition from open cut to UG. Development Decision: Dec ‘10 Development Decision: Dec 10
Activity Apr‐10 May‐10 Jun‐10 Jul‐10 Aug‐10 Sep‐10 Oct‐10 Nov‐10 Dec‐10 Resource Definition Geology Mining Processing Infrastructure Site Services Environment External Relations Legal Financial Evaluation Financial Evaluation Study Management Board Submission
$
Approximately $9.87 million budgeted for 2010 for drilling and development studies. Development decision in December 2010.
Chargeability
Outstanding opportunity for discovery of a large Cu-Au porphyry deposit below and southwest of the current drilled area at Bongkud with area also having epithermal potential.
Chargeability anomaly
TRD017
Bongkud is a copper gold porphyry deposit with a strong clay-pyrite-sericite overprint. Appears only partially unroofed. I iti ll t t d i 1999 b 16 l d RC h l i
200m
TRD030 TRD017 TRD003
Initially tested in 1999 by 16 angled RC holes averaging 158m of which one was deepened by diamond drilling to 331m (TRD003). TRD003 intersected 169m @ 0.37% Cu and 0.89g/t Au.
Location of drill section Bongkud Hill
Drilled deeper in 2000, 6 more diamond holes and 2 more RC holes mostly to the northeast of TRD003. Hole TRD030 (the last hole, to only 150m) was to the southwest and intersected 63m @ 0.73% Cu and
TRD030 TRD003 supergene
@ 0.52g/t Au
200m
% C > 0.6% eCu
200mRL
Re-invigorate potentially significant
200m
> 1% eCu
Copper / Gold Project
Perilya & Zhongjin have a stated desire to acquire new, long life assets. Preferred commodities are zinc, lead, copper & precious metals
Large resource base Long life potential (> 10 years) Will consider both onshore and offshore projects Strong operational & financial capability Ability to access competitive debt via parent support
Long Life Asset in Broken Hill
Supportive Major Supportive Major Shareholder Strong Balance Sheet Proven
Significant Organic Development Potential Leverage to Zinc, Lead and Silver Prices
Management Team
Financial Capability to Acquire New Projects
The information in the AGM Presentation that relates to Ore Reserves for Southern Operations at Broken Hill is based on information compiled by Mr. Noel Carroll who was at the time of compiling the report a fulltime employee of Perilya and is a member of the Australian Institute of Geoscientists. Mr. Carroll 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, Mineral Resources and Ore Reserves’. Mr. Carroll consents to the inclusion in the report of the matters based on the information in the form and context in which it appears. The information in the AGM Presentation that relates to Mineral Resources comprises:
Henry George deposits), North Mine Uppers, North Mine Deeps and Potosi and is based on information compiled by Mr. Noel Carroll who is a full-time employee of Perilya and is a member of the Australian Institute of Geoscientists Mr Carroll has sufficient experience which is relevant to the style of employee of Perilya and is a member of the Australian Institute of Geoscientists. Mr. Carroll 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, Mineral Resources and Ore Reserves’. Mr. Carroll consents to the inclusion in the report of the matters based on the information in the form and context in which it appears.
by Mr. Dean Rogers. Mr. Rogers who is a full-time employee of Perilya and is a member of the Association of Professional Geoscientists of Ontario, a recognised Overseas Professional Organisation included in a list promulgated by the ASX from time to time. Mr. Rogers 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, Mineral Resources and Ore Reserves’. Mr. Rogers consents to the inclusion in the report of the matters based on the information in the form and context in which it appears.
member of the Australian Institute of Geoscientists. Mr. Jones 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, Mineral Resources and Ore Reserves’. Mr. Jones consents to the inclusion in the report of the matters based on the information in the form and context in which it appears.”