Metal Bulletin Iron Ore Conference 22 November 2005 Koolan Island - - PowerPoint PPT Presentation

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

WA Map

Koolan Island Project

• Western Kimberley Region WA
• 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

• 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

(As Anticipated 14/11/2005)

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

• pened 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

White well sorted quartz sandstone, grey siltstone

Yampi Member

Pink-brown arkose and feldspathic sandstone; minor siltstone, hematitic quartz sandstone, glauconitic sandstone

Iron ore Elgee Siltstone

Red-brown and grey sitstone and minor phyllite; thin sandstone interbeds Basal boulder to pebble conglomerate

Warton Sandstone

White well-sorted quartz sandstone and feldspathic sandstone; siltstone interbeds; andalusite granofels in places.

• The Kimberley Group comprises

essentially a succession of sandstones, quartzite's and siltstones, with some interbedded phyllite, unconformably overlying the Speewah Group

• The stratigraphy on Koolan Island

comprises the Warton sandstone, Elgee Siltstone and Yampi Member

• f the Pentecost Sandstone

(distinguished by its hematite content)

Local Structure

Main Ore Body

W a r t

• n

S a n d s t

• n

e Elgee Siltstone Yampi Member

Main Ore Body

Eastern-Barramundi Ore Body

Eastern-Barramundi Ore Body

Mullet-Acacia Ore Body

Mullet-Acacia Ore Body

Resource Drilling

Resource Estimates

0.7 3.3 66.3 35 600

Main 1.1 5.6 64.6 53,400

Total

0.6 15.5 58.5 3,700

Acacia-East

1.0 10.3 61.2 6 200

Mullet-Acacia

2.9 7.6 60.9 7 900

Eastern-Barramundi

% % % ('000)

Al2O3 SiO2 Fe Tonnes Orebody

55% Fe cut off grade (as at 14 Oct 2005)

Koolan Island

Complete mining Main Pit 2014 / 2015 Complete mining Eastern and Mullet Pits 2009 / 2010 Waste stripping at Main pit reaches sea level December 2009 Full production 4mtpa 2008 / 2009 De-water Main pit lake and re-hab footwall 2007 / 2008 Seawall construction 2006 / 2007 First ore shipment September 2006 Commence crushing August 2006 Mobilise remaining fleet Commence mining Mullet/Eastern Waste stripping at Main Commence seawall construction June 2006 Establish mining facilities and roads, initial clearing Feb - May 2006 Mobilise first mining fleet January 2006 Activity Date KEY MINE DEVELOPMENT DATES (As Anticipated 14/11/2005)