[PDF] - Perilya Limited October 2009 Disclaimer and Important Notice This PDF Document

SLIDE 1

Perilya Limited October 2009

SLIDE 2

Disclaimer and Important Notice

This presentation contains forward looking statements that are subject to risk factors associated with an underground mining business. Where the company expresses or implies an expectation or belief as to future events or results, such expectation or belief is Where the company expresses or implies an expectation or belief as to future events or results, such expectation or belief is expressed in good faith and believed to have a reasonable basis. However, forward looking statements are subject to risks, uncertainties and other factors, which could cause actual results to differ materially from future results expressed, projected or implied by such forward looking statements. Such risks include, but are not limited to metals price volatility, currency fluctuations, production performance, increased production costs and variances in ore grade or recovery rates from those assumed in mining plans, project delay or advancement, environmental risks, approvals and cost estimates, as well as political and operational risks in the countries and states in which we sell product to, shipping risks and governmental regulation and judicial outcomes. The company does not undertake any obligation to release publicly any revisions to any forward looking statement to reflect events or circumstances after the date of this presentation, or to reflect the occurrence of unanticipated events, except as may be required under applicable securities laws. All references to dollars, cents or $ in this presentation are to Australian currency, unless otherwise stated. References to “Perilya” or “company” references to Perilya Limited (ABN 85 009 193 695) or its applicable subsidiaries.

Competent Person Statement: The information contained in this report relating to the Ore Resource at Mt Oxide is based on information compiled by Mr Martin Jones who is a full-time employee of Perilya and is a member of the Australasian Institute of Mining and Metallurgy. Mr Jones has sufficient experience which is relevant to the style of mineralisation and type

f 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

1

p g p , p form and context in which it appears.

SLIDE 3

Perilya

Positioning our zinc, lead and copper assets for the future

B k Hill Flinders Broken Hill Mount Oxide

2

SLIDE 4

Lead/Zinc/Silver Production Comparison with Peers

70 000 80,000 60.0 50 000 60,000 70,000

es)

40.0 50.0

)

40,000 50,000

d/Zinc (tonne

30.0

lver (tonnes)

20,000 30,000

Lead

10.0 20.0

Sil

10,000 Perilya* CBH* JML* Kagara* Terramin** 0.0 0 0

3

Zinc Lead Silver

* Basis 2008/2009 annual production ** Basis April-June Quarter annualised

SLIDE 5

Quarterly Performance – Overview

Highlights

Production of 28,900tns combined Zn+Pb
Quarterly costs of US$0 38/lb zinc remain

H1 H2 Sept Qtr Dec 08 Jun 09 2010 PRODUCTION STATISTICS Ore Total Ore Mined (kt) 788.9 737.6 349.7

Quarterly costs of US$0.38/lb zinc remain

under target of US$0.50 – US$0.55/lb, despite 9 days lost production due to regional power outage (lost production

( ) Total Ore Treated (kt) 839.1 750.9 345.0 Zinc Grade (%) 5.3 5.4 5.4 Concentrate (kt) 81.5 72.8 33.9 Contained Zinc (kt) 40.1 35.2 16.4

estimated 4kt of combined metal)

Free cash increased from $36.9 million to

$46.2 million (after payment of $7 million being the net payment for the silver buy-

Payable Zinc (kt) 33.6 29.4 13.7 Lead Grade (%) 3.0 4.4 4.2 Concentrate (kt) 28.7 40.2 17.9 Contained Lead (kt) 20.4 27.7 12.5

being the net payment for the silver buy back). Positive cashflow of $16.3 million net off one-off silver buy-back payment

Broken Hill cash & earnings positive in

Payable Lead (kt) 19.4 26.4 11.8 Silver Grade (g/t) 30.7 49.5 53.8 Contained Silver (Moz) 0.607 0.908 0.419 CASH COST & OPERATING MARGIN (US$/lb zinc)

current environment

Silver sale termination completed during

quarter

( ) Average Price Received 0.73 0.57 0.82 Direct Cash Costs 1.11 0.85 1.01 By-product credits

(*)

(0.25) (0.51) (0.90) Zinc treatment charges 0.22 0.24 0.27 N t C h C t 1 08 0 58 0 38 4 Net Cash Cost 1.08 0.58 0.38 Cash Operating Margin (0.35) (0.01) 0.44

(*) Silver and Lead production net of treatment charges, freight, handling and realised lead/silver hedging gains and losses

SLIDE 6

Perilya - General

Experienced Operators –

Long history of mining in Broken Hill

Quality Assets –

Broken Hill - a solid foundation with 2.8Mtpa concentrator. LOM plan 8+ years based

n reserves (being updated for release in December Quarter)

–

Mount Oxide - potential low cost copper project

–

Flinders – optionality – cashflow positive

–

Holding low cost add-ons that can be fast tracked into production

Strong Major Shareholder (50.1%) that is delivering –

Balance Sheet strength Balance Sheet strength

–

Industry experience in mining, processing, smelting and marketing

–

Potential for future off-take agreements

5

–

Opportunities for synergies

SLIDE 7

Broken Hill – Line of Load

In excess of 250 000 000 t mined at 10% Pb 13% Zn 115g/t Ag In excess of 250,000,000 t mined at 10% Pb, 13% Zn, 115g/t Ag 7km strike length

6

SLIDE 8

Recent History: Reduction in Employees - Broken Hill

Employee Manpower Trend 2008 - 09

700 800

Major reduction in employees in

September 2008 in response to market trends

100 200 300 400 500 600

Selective process based on capability –

Safety performance

J a n

8

F e b

8

M a r

8

A p r

8

M a y

8

J u n

8

J u l

8

A u g

8

S e p

8

O c t

8

N

v
8

D e c

8

J a n

9

F e b

9

M a r

9

A p r

9

M a y

9

J u n

9

J u l

9

A u g

9

Actual Linear (Actual)

–

Skill Level to match available roles

–

Individual performance

Building a team Building a team –

With strong leadership and a belief that success was possible

–

Having a strong focus on achieving targets

–

Doing what we say we are going to do

7

SLIDE 9

Recent History: Productivity Improvement - Broken Hill

Tonnes Hoisted per Employee

300 350 400 450 (t)

Productivity improvement built on

strong systems and good planning processes

50 100 150 200 250 300

A robust Mine Planning Process –

Set up Mine2-4D LOM plan

N

v
7

D e c

7

J a n

8

F e b

8

M a r

8

A p r

8

M a y

8

J u n

8

J u l

8

A u g

8

S e p

8

O c t

8

N

v
8

D e c

8

J a n

9

F e b

9

M a r

9

A p r

9

M a y

9

J u n

9

J u l

9

A u g

9

Actual Linear (Actual)

–

Set up detailed activity based EPS schedule

Improve Development output –

Detailed plan

–

Focus on priority areas

Improve Production output –

Focus on high grade Pillar mining activities (Toe City)

–

Improved use of in cycle shotcreate

–

Setting Standards and training

–

Debottlenecking the mine operational ( y)

–

Focused on metal tonnes not just ore tonnes E i t tili ti d li bilit

8

–

Debottlenecking the mine operational activities

–

Equipment utilisation and reliability

SLIDE 10

Recent History: Cost Reductions - Broken Hill

Cost / t Payable Metal

2 000 2,500 3,000 (A$)

Operating with smaller teams and reducing

administration and support staff

500 1,000 1,500 2,000

Doing without the “nice to have”
Drive to eliminating waste

C / O

N

v
7

D e c

7

J a n

8

F e b

8

M a r

8

A p r

8

M a y

8

J u n

8

J u l

8

A u g

8

S e p

8

O c t

8

N

v
8

D e c

8

J a n

9

F e b

9

M a r

9

A p r

9

M a y

9

J u n

9

J u l

9

A u g

9

Actual Linear (Actual)

Strong negotiation with Service providers and

Suppliers

Providing better information to operating

Cost / Tonne Ore Milled

100 120 140 160 (A$)

Providing better information to operating

areas as to where their spend is

20 40 60 80 7 7 8 8 8 8 8 8 8 8 8 8 8 8 9 9 9 9 9 9 9 9

9

N

v
7

D e c

7

J a n

8

F e b

8

M a r

8

A p r

8

M a y

J

u n

8

J u l

A

u g

8

S e p

8

O c t

8

N

v
8

D e c

8

J a n

9

F e b

9

M a r

9

A p r

9

M a y

J

u n

9

J u l

A

u g

9

Actual Linear (Actual)

SLIDE 11

Silver Sale Termination

Terminated Silver Sale Agreement with Coeur d’Alene for US$55 million Effective from 1 July 2009 (with settlement 31 July). Provides spot exposure on 11 2 Moz rather than previously committed price Provides spot exposure on 11.2 Moz rather than previously committed price. Face value 11.2 Moz is ~US$145 million (basis US$13.60/oz Ag) at date of completion - now

US$195 million (basis US$17.50/oz Ag. Significant Long Term Benefits

Reduction in Net Cash

Ability to re-assess Unsecured Funding (<3%+LIBOR)

Reduction in Net Cash Costs (C1) of US$0.10 – US$0.12/lb

(based on prices at time of transaction)

Immediately Cashflow & Earnings Accretive

Ability to re-assess high silver deposits. (North Mine & Potosi)

10

SLIDE 12

Broken Hill - Organic Growth

North Mine

Re-start “normal” North Mine
Sands Project
North Mine Deeps

Broken Hill

Potosi Sth Ops Resource E pansion

Silver Peak potential
Extended Zone offers
Continue to optimise

existing resource

Utilise decline in

Hill

Expansion

longer term feed potential lower levels

Potential “sands”

project

Flying Doctor

Permitting underway
Potential low cost open

11

cut

SLIDE 13

Broken Hill Organic Growth - Silver Peak/Potosi

18000mN 18400mN 18800mN 19200mN 19600mN 20000mN 20400mN 20800mN

Central Blocks

10400mRL

Potosi North Silver Peak Flying Doctor Open Pit

10000mRL

Pit

9600mRL

Potosi Extended Potosi Extended North

Existing Potosi Workings >200m x %PbZn >100m x %PbZn >50m x %PbZn >20m x %PbZn 12 Designed Potosi Workings Existing Silver Peak Workings >20m x %PbZn Halo: 0 to 20m x %PbZn

SLIDE 14

Flinders

Focus & Strategy

% % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % %

1 1 1 1 1 1 1 1 1

km km km km km km km km km

0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5

Reliance Reliance Reliance Reliance Reliance Reliance Reliance Reliance Reliance Emu Emu Emu Emu Emu Emu Emu Emu Emu Reliance East Reliance East Reliance East Reliance East Reliance East Reliance East Reliance East Reliance East Reliance East

% % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % %

1 1 1 1 1 1 1 1 1

km km km km km km km km km

0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5

Reliance Reliance Reliance Reliance Reliance Reliance Reliance Reliance Reliance Emu Emu Emu Emu Emu Emu Emu Emu Emu Reliance East Reliance East Reliance East Reliance East Reliance East Reliance East Reliance East Reliance East Reliance East

% % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % %

1 1 1 1 1 1 1 1 1

km km km km km km km km km

0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5

Reliance Reliance Reliance Reliance Reliance Reliance Reliance Reliance Reliance Emu Emu Emu Emu Emu Emu Emu Emu Emu Reliance East Reliance East Reliance East Reliance East Reliance East Reliance East Reliance East Reliance East Reliance East

# # # # # # # # # # # ## # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # ## # # # # # # # # # # # # # # # ## # # # # # # ## #

% % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % %

1 1 1 1 1 1 1 1 1

km km km km km km km km km

0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5

Reliance Reliance Reliance Reliance Reliance Reliance Reliance Reliance Reliance Emu Emu Emu Emu Emu Emu Emu Emu Emu Reliance East Reliance East Reliance East Reliance East Reliance East Reliance East Reliance East Reliance East Reliance East

For Scale

In the past 12 months have shipped 121,041

% % % % % % % % % % % % % % % % % % % % % % % % % % %

Emu East Emu East Emu East Emu East Emu East Emu East Emu East Emu East Emu East Emu South Emu South Emu South Emu South Emu South Emu South Emu South Emu South Emu South

% % % % % % % % % % % % % % % % % % % % % % % % % % %

Emu East Emu East Emu East Emu East Emu East Emu East Emu East Emu East Emu East Emu South Emu South Emu South Emu South Emu South Emu South Emu South Emu South Emu South

% % % % % % % % % % % % % % % % % % % % % % % % % % %

Emu East Emu East Emu East Emu East Emu East Emu East Emu East Emu East Emu East Emu South Emu South Emu South Emu South Emu South Emu South Emu South Emu South Emu South

# # # # # # # # # # # # # # # # # # # # # # ### # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # ## # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # ## # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # ## # # # # # # ## # # ## # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # ## # # # # # # # # # # # # # # # # # # # # # ## # # # # # # # # # # # # # # # # # # # # # #

% % % % % % % % % % % % % % % % % % % % % % % % % % %

Emu East Emu East Emu East Emu East Emu East Emu East Emu East Emu East Emu East Emu South Emu South Emu South Emu South Emu South Emu South Emu South Emu South Emu South

Beltana Open-Cut For Scale

North Moolooloo

tonnes of ore at a grade of 30.1%

Excellent potential for additional discoveries

and increased resources

% % % % % % % % % % % % % % % % % % % % % % % % % % %

Moolooloo Moolooloo Moolooloo Moolooloo Moolooloo Moolooloo Moolooloo Moolooloo Moolooloo Aristotle Aristotle Aristotle Aristotle Aristotle Aristotle Aristotle Aristotle Aristotle Hermae Hermae Hermae Hermae Hermae Hermae Hermae Hermae Hermae

% % % % % % % % % % % % % % % % % % % % % % % % % % %

Moolooloo Moolooloo Moolooloo Moolooloo Moolooloo Moolooloo Moolooloo Moolooloo Moolooloo Aristotle Aristotle Aristotle Aristotle Aristotle Aristotle Aristotle Aristotle Aristotle Hermae Hermae Hermae Hermae Hermae Hermae Hermae Hermae Hermae

% % % % % % % % % % % % % % % % % % % % % % % % % % %

Moolooloo Moolooloo Moolooloo Moolooloo Moolooloo Moolooloo Moolooloo Moolooloo Moolooloo Aristotle Aristotle Aristotle Aristotle Aristotle Aristotle Aristotle Aristotle Aristotle Hermae Hermae Hermae Hermae Hermae Hermae Hermae Hermae Hermae

# # # # ## # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # ## # # # #

% % % % % % % % % % % % % % % % % % % % % % % % % % %

Moolooloo Moolooloo Moolooloo Moolooloo Moolooloo Moolooloo Moolooloo Moolooloo Moolooloo Aristotle Aristotle Aristotle Aristotle Aristotle Aristotle Aristotle Aristotle Aristotle Hermae Hermae Hermae Hermae Hermae Hermae Hermae Hermae Hermae

Aristotle – Anaconda

Targeting replacement of Beltana stockpiles
Confirm Reliance as an economic follow-on

from Beltana

% % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % %

Beltana Beltana Beltana Beltana Beltana Beltana Beltana Beltana Beltana Aristotle Aristotle Aristotle Aristotle Aristotle Aristotle Aristotle Aristotle Aristotle Anaconda Anaconda Anaconda Anaconda Anaconda Anaconda Anaconda Anaconda Anaconda Copper King Copper King Copper King Copper King Copper King Copper King Copper King Copper King Copper King Atlas Atlas Atlas Atlas Atlas Atlas Atlas Atlas Atlas

% % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % %

Beltana Beltana Beltana Beltana Beltana Beltana Beltana Beltana Beltana Aristotle Aristotle Aristotle Aristotle Aristotle Aristotle Aristotle Aristotle Aristotle Anaconda Anaconda Anaconda Anaconda Anaconda Anaconda Anaconda Anaconda Anaconda Copper King Copper King Copper King Copper King Copper King Copper King Copper King Copper King Copper King Atlas Atlas Atlas Atlas Atlas Atlas Atlas Atlas Atlas

% % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % %

Beltana Beltana Beltana Beltana Beltana Beltana Beltana Beltana Beltana Aristotle Aristotle Aristotle Aristotle Aristotle Aristotle Aristotle Aristotle Aristotle Anaconda Anaconda Anaconda Anaconda Anaconda Anaconda Anaconda Anaconda Anaconda Copper King Copper King Copper King Copper King Copper King Copper King Copper King Copper King Copper King Atlas Atlas Atlas Atlas Atlas Atlas Atlas Atlas Atlas

# # # # # # # # # # # # # # # ## ## # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # #

% % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % %

Beltana Beltana Beltana Beltana Beltana Beltana Beltana Beltana Beltana Aristotle Aristotle Aristotle Aristotle Aristotle Aristotle Anaconda Anaconda Anaconda Anaconda Anaconda Anaconda Anaconda Anaconda Anaconda Copper King Copper King Copper King Copper King Copper King Copper King Copper King Copper King Copper King Atlas Atlas Atlas Atlas Atlas Atlas Atlas Atlas Atlas

Anaconda Beltana East

Consistent exploration funding is critical to

determine resource potential and grow production profile

Realize value from large land holdings

% % % % % % % % %Sundown

Sundown Sundown Sundown Sundown Sundown Sundown Sundown Sundown

% % % % % % % % %Sundown

Sundown Sundown Sundown Sundown Sundown Sundown Sundown Sundown

% % % % % % % % %Sundown

Sundown Sundown Sundown Sundown Sundown Sundown Sundown Sundown

# # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # #

% % % % % % % % %Sundown

Sundown Sundown Sundown Sundown Sundown Sundown Sundown Sundown

Atlas-Wallrider Trend

Copper King

Realize value from large land holdings
Maintain competitive advantage in niche

market

Success will deliver high value low cost Zn

13

% % % % % % % % %Wallrider

Wallrider Wallrider Wallrider Wallrider Wallrider Wallrider Wallrider Wallrider

% % % % % % % % %Wallrider

Wallrider Wallrider Wallrider Wallrider Wallrider Wallrider Wallrider Wallrider

% % % % % % % % %Wallrider

Wallrider Wallrider Wallrider Wallrider Wallrider Wallrider Wallrider Wallrider

# # # # # # # # # # # # # # # # # # # # # # # # # ## # # # # # # #

% % % % % % % % %Wallrider

Wallrider Wallrider Wallrider Wallrider Wallrider Wallrider Wallrider Wallrider

Success will deliver high-value, low-cost Zn

tonnes

SLIDE 15

Mt Oxide – Current Resource Outlines

Current resources (17.9 Mt

@ 1.3% for 224kt Cu)

Re-initiated exploration
Re initiated exploration

targeted at possible early access to oxide material and improving grade and quantity of resource in pit shell

Conducting EM work to

assist in investigation of higher grade at depth

14

SLIDE 16

Create the Future

Perilya has positioned its portfolio of assets –

Broken Hill: optimised with a number of low capital cost add-ons

–

Mount Oxide: potential low cost copper project Mount Oxide: potential low cost copper project

–

Flinders: optionality and stockpiles of zinc on the ground

Created a new foundation for the long-term sustainability of Broken Hill Perilya has optionality and leverage to metal price Perilya has optionality and leverage to metal price Growth opportunities in the current environment; Diversify risk & improve returns Zhongjin is a strong and well funded partner and signalling a desire for acquisitions Focus on long-term sustainability and shareholder value

15