Metal Bulletin Iron Ore Conference 22 November 2005 Koolan Island Iron Ore Project
Contents Location • Project Outline • Project Schedule • Corporate Overview • • History • Equipment Geology • Resource • Development Data •
Location Koolan Island Project Western Kimberley Region WA • WA Map • 2,000km NNE of Perth Nearest towns: Derby 150km S • and Broome 320km SW
Koolan Island
Project Outline Brownfields development • Based on Main orebody, supplemented by four satellites, • Mullet, Acacia, Eastern and Barramundi • Deepwater port able to accommodate panamax vessels to 75,000 dwt Resource sufficient to support 4Mta operation for 10+ years •
Project Schedule (As Anticipated 14/11/2005) BFS completed August 2005 • Environmental Recommendations in Approval stage • Land Access Agreement with Traditional Owners being • completed Mining Lease Grant expected early 2006 • Construction Commencement Q1, 2006 • Plant Commissioning Q2, 2006 • Wharf & Shiploader Completion Q3, 2006 • • 1st Shipments Q3, 2006
BFS Highlights Bankable Feasibility Study (BFS) completed, with positive results, encouraging • the Company to proceed with mine development, subject to Government approvals, formalisation of off-take contracts and Board approval of funding arrangements Initial capital costs of A$108 million, inclusive of mine development costs of • A$26 million • Financial modeling of the Project has been based on a sales mix of fines (70%) and lump (30%), producing total revenues of A$1.4 billion over the nine year life of the mine Operating cash surplus of A$583 million (EBITDA) over the nine year life of the • project The project returns, based on 29.1 million tonnes of saleable ore, a net present • value (NPV) of A$217 million (before interest and tax) at a 10% discount rate, with an Internal Rate of Return (IRR) of 39.7% • First shipment of iron ore scheduled to commence in second half of 2006 BFS takes no account of exploration upside of the Koolan Island Project •
Corporate Overview • Aztec Resources Limited is a public company listed on ASX and the London Stock Exchange’s AIM market Market Capitalisation: A$85,000,000 • 497,700,000 + shares • Major Shareholders: • Cambrian Mining plc…………………………………...18.7% National Nominees Limited…………………………….6.3% ANZ Nominees Limited….…………………………..….5.3% CITIC Resources Australia Pty Ltd.………………..…3.4% HSBC Custody Nominees (Australia) Ltd……………3.1% (10/10/2005)
History – Pre BHP Ore deposits on Koolan and Cockatoo Islands • discovered in 1880 • First mining leases granted, small scale mining commenced 1907 • First attempt at large scale mining in 1936 when Yampi Sound Mining Company (a consortium including Nippon Mining Co) announced intention to export to Japan Federal Government embargo on all iron ore export in • 1938 First ore mined on Koolan fed small charcoal-iron plant • built by State Government in 1945 BHP granted leases in 1951 •
The BHP Years 1965 - 1993 By the conclusion of mining in 1993, 68Mt ore had been • produced Shipment grade declined from >67%Fe for the early Main • pit production to 65% - 65.3%Fe for the final blend On closure, all infrastructure removed or buried, • stockpiles and roads ‘moonscaped’ and the Main pit opened to allow ingress of the sea
The Aztec Era • Aztec granted tenements in 2003 • Notice of Intent approved January 2004, drilling commenced February 2004 • Camp established on Koolan Island August 2004 Data collection for BFS completed February 2005 • Land Access Agreement negotiations commence with • Traditional Owner’s March 2005 BFS completed August 2005 •
Koolan Island Mine & Infrastructure Layout
Mining Operations Contractor-based operation • • Conventional open-pit operation, rotary drills, 200t hydraulic backhoes, FEL’s, rear dump trucks and ancillary plant
Transportation System Truck haulage to ROM pad, primary crusher and • stockpiles • Conveyor to shipping stockpile FEL reclaim from shipping stockpile • • Conveyor to sampling station, wharf and shiploader
Port Facilities Steel-pile wharf able to accept Panamax vessels up to • 75,000 dwt • Berth pocket 16m draft Fixed, luffing shiploader, capacity 3,000tph • • 20m minimum draft in departure channel - no dredging required Vessel berthing/departure assisted by tugs •
Regional Geology Kimberley Basin is a large structural basin occupying • most of the Kimberley region with sediments of Lower- Mid Proterozoic age dominant The Yampi ore bodies lie at the western end of the NW – • SE trending King Leopold Mobile Zone which forms the south western border of the Kimberley Basin Hematite concentration occurs in the basal Yampi, • member of the Pentecost Sandstone in the Kimberley group
Local Stratigraphy Pentecost Sandstone The Kimberley Group comprises • White well sorted quartz sandstone, grey siltstone essentially a succession of sandstones, quartzite's and Yampi Member Pink-brown arkose and feldspathic sandstone; minor siltstones, with some interbedded siltstone, hematitic quartz sandstone, glauconitic sandstone phyllite, unconformably overlying Iron ore the Speewah Group Elgee Siltstone Red-brown and grey sitstone and minor phyllite; thin sandstone interbeds • The stratigraphy on Koolan Island Basal boulder to pebble conglomerate comprises the Warton sandstone, Warton Sandstone Elgee Siltstone and Yampi Member White well-sorted quartz sandstone and feldspathic of the Pentecost Sandstone sandstone; siltstone interbeds; andalusite granofels in places. (distinguished by its hematite content)
Local Structure
Main Ore Body Yampi Member e E lgee Siltstone n o t s d n a S n o t r a W
Main Ore Body
Eastern-Barramundi Ore Body
Eastern-Barramundi Ore Body
Mullet-Acacia Ore Body
Mullet-Acacia Ore Body
Resource Drilling
Resource Estimates 55% Fe cut off grade (as at 14 Oct 2005) Orebody Tonnes Fe SiO 2 Al 2 O 3 ('000) % % % Main 35 600 66.3 3.3 0.7 Eastern-Barramundi 7 900 60.9 7.6 2.9 Mullet-Acacia 6 200 61.2 10.3 1.0 Acacia-East 3,700 58.5 15.5 0.6 Total 53,400 64.6 5.6 1.1
Koolan Island KEY MINE DEVELOPMENT DATES (As Anticipated 14/11/2005) Date Activity January 2006 Mobilise first mining fleet Feb - May 2006 Establish mining facilities and roads, initial clearing Mobilise remaining fleet Commence mining Mullet/Eastern June 2006 Waste stripping at Main Commence seawall construction August 2006 Commence crushing September 2006 First ore shipment 2006 / 2007 Seawall construction 2007 / 2008 De-water Main pit lake and re-hab footwall 2008 / 2009 Full production 4mtpa December 2009 Waste stripping at Main pit reaches sea level 2009 / 2010 Complete mining Eastern and Mullet Pits 2014 / 2015 Complete mining Main Pit
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