SLIDE 1
METMAR LIMITED JSE Showcase Presentation
August 2009
Group Overview and Track Record
SLIDE 2 Company history Company history
May 1982 May 2006 February 2008 BEE t Metmar founded May 2006 Reverse listed BEE partners acquire 10% of Metmar June 2006 10c distribution June 2007 13 5c distribution June 2008 18c distribution June 2009 30c distribution 10c distribution 13.5c distribution 18c distribution 30c distribution J 2007 N b 2007 D b 2008 J 2009 January 2007 7% of Kivu acquired (R5m) November 2007 4% of Kalahari Resources acquired (R20m) December 2008 Kivu stake increased to 7.178% in rights issue for $277 741 June 2009 Further 10% interest in Minéro Zinc (R40m) March 2007 15.8% of PGR17 (8.9% interest in Mogale Alloys) acquired (R36m) April 2008 WAG acquired (R80m with profit warranties) April 2009 Ruuki acquires PGR 17, (R248m accruing to Metmar) y ) q ( ) July 2007 5.2% of PGR17 (2.9% interest in Mogale Alloys) October 2008 10% interest in Minéro Zinc acquired (R40m) ) May 2009 R153m payment from Ruuki Mogale Alloys) acquired (R14.8m) acquired (R40m)
Our Business Model Our Business Model
Trading Equity Stakes Projects g q y j Delivering full spectrum of services associated with Strategic minority investments Recovering and utlising i d t i l t d b marketing and trading resource-based bulk commodities g y which secure marketing agreements industrial waste and by- products from chemical and metallurgical industries commodities Samtem Mogale Delmas Coal Scaw Samtem SNF International West African Group Owen Plastics / Tufflex Mogale Kivu Kalahari Minéro Zinc Scaw Clay Fusion Gubha Resources ZISCO Owen Plastics / Tufflex Minéro Zinc ZISCO International Projects A it C it l i ti A it Annuity revenues Capital appreciation Annuity revenues
SLIDE 3 Value creation for shareholders Value creation for shareholders
26
Projects
Notwithstanding R131m of internal cash resources invested in projects and acquisitions since listing
41
Minéro Zinc Kivu
p j q g
207
Kalahari
130
Mogale Sale
312.0 400.0 271.0
Metmar
10.0 13.5 18.0 30.0
Trading
35.5
Listing price Distribution - Distribution - Distribution - Distribution - "Effective" Pro Forma Share price Fair value Listing price Distribution June 2006 Distribution June 2007 Distribution June 2008 Distribution June 2009 Effective purchase price Pro Forma NAV per share Share price (31/07/09) Fair value estimate
Solid growth track record Solid growth track record
Revenue (Rm)
1 251 1 634 2 068 3 439
Revenue (Rm)
2006 2007 2008 2009 99 85 218
Earnings before tax (Rm)
48 2006 2007 2008 2009 27.3 22.4 34.9
Cashflow to debt (%)
11.6 2006 2007 2008 2009 2006 2007 2008 2009
SLIDE 4 Solid growth track record Solid growth track record
C i ( ) Q i k i ( ) 1.4 1.3 1.3 1.3 1.2 0.9 1.0 0.9 Current ratio (x) Quick ratio (x) 2006 2007 2008 2009 6.2 7.5 5.0 7.5
Gross profit margin (%)
2006 2007 2008 2009 45.6 50.2 34.9 49.1 25 0 Return on equity (%) Return on Assets employed (%) 19.3 18.6 16.6 25.0 2006 2007 2008 2009
Strategy and Outlook
SLIDE 5
Strategy Strategy
Strategic Strategic equity stakes
NAV Industry network
St t d P j Structured trade finance
Commodity flows Enhanced returns
Projects
Unlocking shareholder value Annuity revenue
Metmar Trading Trading
Extending reach in value chain Extending reach in value chain
New Structured Finance Division to structure trade and commodity finance arrangements g
– Increased differentiation and specialisation in Metmar – Working in partnership with banking partners – Increasing potential commodity partnerships – Supporting key business driver of securing higher commodity flows
Metmar Global to take advantage of new EU REACH legislation Metmar Global to take advantage of new EU REACH legislation
– Participate in trading opportunities arising from REACH and general trading and banking opportunities in EU market
SLIDE 6 Investment criteria Investment criteria
Exclusive marketing agreements to secure commodity flow Business synergies with existing operations
- Business synergies with existing operations
Current supply and beneficiation market for proposed commodity
- Opportunity for Metmar to apply its intellectual and financial capital
Hurdle returns and payback period
- Hurdle returns and payback period
- Opportunity pipeline
Opportunity pipeline
Approach from potential partners 20 pp p p Metmar conducts preliminary in estigation 7 investigation Due diligence 7 3 Due diligence Meets investment criteria 3 1 Meets investment criteria Investment concluded 1 ? Investment concluded ?
SLIDE 7 Opportunity pipeline Opportunity pipeline
Sector Description Investment Payback Coal Coal mining assets R200m to R400m Three to four years Vanadium waste stockpiles to extract Pig Iron Vanadium waste stockpiles to extract vanadium, produce pig iron and sell power into grid $30m Maximum six years Tin Mining and beneficiation $5m to $10m Three years Chrome Chrome Ore Mine R11m Two years Ch Ch i Zi b b R50 T Chrome Chrome source in Zimbabwe R50m Two years
Prospects Prospects
IMF predicts that 2009 global output will shrink by 1,3% Economic indicators from different parts of the world notably China showing signs Economic indicators from different parts of the world, notably China, showing signs
South Africa and Metmar positioned to benefit early from eventual upswing in global economy y Will result in increased demand for numerous commodities traded or produced by M t Metmar Metmar continues business but in smaller volumes and at lower prices than normal In current circumstances it is unlikely that 2010 financial results will equate to d lt hi d f 2009 record results achieved for 2009
SLIDE 8 Questions? Questions?
Presentation can be downloaded from www.metmar.co.za
This presentation contains forward-looking statements about the company’s operations, strategic investments and financial
- conditions. They are based on Metmar Limited’s best estimates and information at the time of writing. They are nonetheless
subject to significant uncertainties and contingencies many of which are beyond the control of the company. Unanticipated events will occur and actual future events may differ materially from current expectations due to explorations results new events will occur and actual future events may differ materially from current expectations due to explorations results, new business opportunities, changes in priorities by the company or its joint ventures as well as other factors. Any of these factors may materially affect the company’s future business activities and its ongoing financial results.
Additional information
SLIDE 9 Metmar Trading: Value chain Metmar Trading: Value chain
plier mer
Source and procurement Quality Control and Funding and hedging Shipping execution and logistics Delivery on time and in spec
cer / Supp ial consu
p warehousing hedging and logistics in spec
Produc Industri
Metmar Trading: Trading segments
Non-ferrous metals Ferro-alloys and ore Noble alloys Carbons Chemicals
L d
- Ferro manganese
- Silico manganese
- Ferro chrome
St i l t l ll M l bd
- Anthracite
- Lead
- Nickel
- Tin
- Zinc
- Stainless steel alloys
- Manganese ore
- Magnetite
- Iron ores
- Molybdenum
- Titanium
- Vanadium
- Char
- Coal
- Metallurgical coke
- Chemicals
- Food additives
Plastics Rubber and rubber chemicals Minor metals
- Copper ore
- o es
- Chrome ore
- Chrome concentrates
- PVC
LDPE
LLDPE
Plastomers
- Natural rubber
- Synthetic rubber
- Speciality polyethylene
- High impact styrene
- General purpose styrene
C l i b t fill
- Carbon black
- Process aids for rubber industry
- Rubber chemicals
Fill f bb i d t
- Cobalt
- Tantalite
- Tungsten
M i
- Calcium carbonate fillers
- PIB
EVA
PET
Colour Masterbatches
- Fillers for rubber industry
- Mould release agents
- Tackifiers
- Magnesium
SLIDE 10
Metmar Trading: Acquisition of West African Group (WAG) Metmar Trading: Acquisition of West African Group (WAG)
Acquired in April 2008 for R80 million based on profit warranties
– Payback anticipated within four years Payback anticipated within four years
27 employees working from Durban, Boksburg and Cape Town Market leader in natural rubber and polystyrene
– Long standing supplier to blue chip client base g g pp p
Technical knowledge to design and innovate products for clients
– Solid relationships with top rubber and plastic packaging companies – Representing Exxon Mobil Chemical in South Africa with polyethylene products
Unlocking synergies with SNF plastics division
E i i t Z bi k t – Expansion into Zambian market
West African Group West African Group
SLIDE 11
Strategic Equity Stakes: KIVU (7 178%) Strategic Equity Stakes: KIVU (7.178%)
Location Rwanda and eastern Democratic Republic of Congo Overview Focused on exploration for and mining of tin, tantalum, tungsten and niobium Overview Focused on exploration for and mining of tin, tantalum, tungsten and niobium Gatumba Mining Concessions extend over 20 800 hectares in Rwanda Surface exploration confirmed significant tin tantalum and niobium deposits Surface exploration confirmed significant tin, tantalum and niobium deposits Production anticipated to commence within a year Ri ht i t i USD3 5 illi l t i 2008 t f d l ti d Rights issue to raise USD3.5 million late in 2008 to fund exploration and perform pre-feasibility study on Gatumba South deposit Metmar followed rights and increased shareholding to 7.178% from 7.0% Total investment R8 million Projected payback period 2 to 3 years Future trading income period Future trading income
Location Map Location Map
SLIDE 12
Development: Office Block Development: Office Block
Pre and post repair photo’s of the Gatumba Mine offices
Development: In-field plants Development: In-field plants
The in-field upgrading plant at pg g p Ruhanga under construction
SLIDE 13
Development: Sample Prep Development: Sample Prep
Construction of the Sample Preparation Facility at Gatumba
Exploration: Drilling Exploration: Drilling
Drill rig in operation on the Gatumba South deposit
SLIDE 14
Strategic Equity Stakes: Minéro (20%) Strategic Equity Stakes: Minéro (20%)
Location Reivilo, North West Province , South Africa Overview Minéro Zinc owns Pering Mine Overview Minéro Zinc owns Pering Mine CPR issued by Venmyn in May 2009 indicated return of 33% based on capital amount of R800 million required to re establish based on capital amount of R800 million required to re-establish mine, process plant and related infrastructure LOM f t l t 13 LOM of at least 13 years Commencement date Commissioning of mine anticipated mid-2011 with first delivery of concentrates in same year Total investment R80 million Total investment R80 million Projected payback Three year payback on investment Future trading income
Pering Mine: Location Map Pering Mine: Location Map
SLIDE 15
Pering Mine: Aerial view Pering Mine: Aerial view
Slimes return water dam Slimes return water dam Tailings dam Tailings dam Previous plant Waste dumps Waste dumps Pit 24 Main pit p area Main pit
Geological Cross Section Geological Cross Section
SLIDE 16
Resource Table – CCIC Modelling Resource Table CCIC Modelling
Source: Mineral Resource Statements for Pering (Venmyn, 2008)
Strategic Equity Stakes: Kalahari (Direct 8 33% indirect 3 33%) Strategic Equity Stakes: Kalahari (Direct 8.33%, indirect 3.33%)
Location Kuruman Northern Cape South Africa Location Kuruman, Northern Cape, South Africa Overview Kalahari owns 40% of Kalagadi (IDC 40%, Arcelor Mittal 50%) K l di h ld i i i ht th f b li d t l 960 illi t f Kalagadi holds mining right on three farms believed to overlay ± 960 million tons of manganese ore (38% Mn) A l Mitt l h ff t k t ith K l di t t k t 50% f l bl ArcelorMittal has off take agreement with Kalagadi to take up to 50% of saleable production of both sinter and alloy C i f i d d i l i Construction of mine and production plant in progress Mine capacity will be 3 million tpa of manganese ore (38% Mn). Ore preparation facility and sinter plant capacity of 2.4 million tpa of high grade sinter (47% Mn) Total investment R20 million Returns Cash distribution of R223 million with R26 million accruing to Metmar in Sept 2008 Implied value of R214 5 million on Arcelor Mittal investment Implied value of R214.5 million on Arcelor Mittal investment Future trading income
SLIDE 17
Location of Umtu Olive Pan and Gama in Kalahari Manganese Field Location of Umtu, Olive Pan and Gama in Kalahari Manganese Field Outline of Inferred Resource on Umtu 281 Outline of Inferred Resource on Umtu 281
SLIDE 18 Cross section
August 09 Oct 09
Cross section
November 09 August 09 April 11 Sept 09 Oct 09 May 11 April 11 p ay Pre Sink to 41m July 09 Pre Sink Aug 09
Slow March 10 June10
Sept 10 Sept 10
Nov 10 p April11 Oct 10
Nov 10 Oc Jan 11 Dec 10
5th Qtr July 09
Main Shaft Main Shaft
16 July 2009 16 July 2009 30 July 2009 23 July 2009
SLIDE 19
Vent Shaft Vent Shaft
16 July 2009 16 July 2009 30 July 2009 y 23 July 2009
Vent Shaft Stage Vent Shaft Stage
16 July 2009 16 July 2009 23 July 2009
SLIDE 20
Stage Inside Vent Shaft Stage Inside Vent Shaft
23 July 2009
Vent Shaft Settling Pond Vent Shaft Settling Pond
16 July 2009 23 July 2009
SLIDE 21
Vent Shaft Sub-bank Steel Vent Shaft Sub-bank Steel
30 July 2009 30 July 2009
Tubular Tubular
23 July 2009 23 July 2009
SLIDE 22
Compressor House & Headgear Steel Compressor House & Headgear Steel
23 July 2009 23 July 2009
Clear Water Dams Terrace Clear Water Dams Terrace
16 July 2009
SLIDE 23
Clear Water Settling Dams Clear Water Settling Dams
30 July 2009
Strategic Equity Stakes: Mogale (11.8% effective holding through 21% holding of PGR)
Location Mogale, Krugersdorp, South Africa O i M t di d f it i t t i PGR d M l All t R kki SA ith Overview Metmar disposed of its interest in PGR and Mogale Alloys to Ruukki SA with effect from 1 April 2009 All conditions precedent to disposal, other than approval of Metmar shareholders met Total investment Initial investment of R50.8 million R t Di id d ti t R33 0 illi i 2008 d 2009 Returns Dividends amounting to R33.0 million in 2008 and 2009 Sale proceeds amounting to R248.2 million First tranche of R153.4 million paid on 29 May 2009
SLIDE 24
Metmar Industrial (60%) Metmar Industrial (60%)
Unlock value from other producers’ environmental problems through processing We perceive an intrinsic value where they see a problem We perceive an intrinsic value where they see a problem Source of supply to generate annuity revenues in line with Metmar’s listing model Number of projects: 7 projects Total investment in projects to date:± R25 million Total investment in projects to date:± R25 million Capital payback to date: ± R7 million Projected payback: ± 3 years
Metmar Industrial: Delmas Coal Metmar Industrial: Delmas Coal
Location Delmas, Mpumalanga Overview Recovery of coal from slime dams Recovered coal sold into domestic market and Eskom as an energy source Application Energy source pp gy Commencement date May 2008
SLIDE 25
Metmar Industrial: Scaw Metmar Industrial: Scaw
Location Scaw Metals Germiston Gauteng Location Scaw Metals, Germiston, Gauteng Overview Extraction of DRI iron fines from course char and fine char by- products at Scaw Metals Recovered iron fines sold back to Scaw Processed char is then sold as an energy source Application Energy source to brick makers etc Application Energy source to brick makers, etc. Commencement date November 2006
Metmar Industrial: Clay Fusion Technology Metmar Industrial: Clay Fusion Technology
Location ArcelorMittal Vanderbijlpark Gauteng Location ArcelorMittal, Vanderbijlpark, Gauteng Overview Metallurgical steel waste and by-products from ArcelorMittal used to produce clay bricks comprised of 70% steel waste and by-products, and 30% clay Potential to earn “carbon credits” as additional income Application Bricks for construction industry Application Bricks for construction industry Commencement date Mid 2010
SLIDE 26 Metmar Industrial: Gubha Resources Metmar Industrial: Gubha Resources
Location North Zimbabwe Hwange Colliery Location North Zimbabwe, Hwange Colliery Overview Reclamation of metallurgical coke from coke dumps/stockpiles Gubha Resources re-screens metallurgical coke recovered from coke dumps/stockpiles at Hwange Colliery Size of recovered coke: Breeze - 0 x 6 mm Peas – 6 x 30 mm Nuts - + 30 mm Nuts + 30 mm Commencement date November 2006
Gubha Resources value adding process with Hwange metallurgical coke
Metmar Industrial’s coke stockpile at Hwange Adding value through hand picking Adding value through crushing stockpile at Hwange
1 2
picking
3
crushing Adding value through screening
4 6 5
Adding value through scalping Adding value through stockpiling in sizes Satisfied Customer
7 8
Loading
7 8
SLIDE 27
Metmar Industrial: ZISCO Metmar Industrial: ZISCO
Location Central Zimbabwe – Zimbabwe Iron and Steel Company in Redcliff Overview Reclamation of metallurgical coke from coke dumps and stockpiles Overview Reclamation of metallurgical coke from coke dumps and stockpiles Screening of metallurgical coke recovered from coke dumps/stockpiles at ZISCO dumps/stockpiles at ZISCO Size of recovered coke: Breeze - 0 x 6 mm Peas – 6 x 30 mm Nuts - + 30 mm Commencement date May 2009
Metmar Industrial: Iran crushing / recovery (in JV) Metmar Industrial: Iran crushing / recovery (in JV)
Location Bandar Abbas Iran Location Bandar Abbas , Iran Overview Ferro Chrome Slag recovered via the feeding of recovery plants supplied by Metmar Jigging and separation of metal from slag gg g p g Ferro Chrome fines recovered and sold into domestic market C t d t A il 2008 Commencement date April 2008
