RE-IMAGINING LEAD
February 2016
(TSX:LFX) RE-IMAGINING LEAD February 2016 FORWARD LOOKING - - PowerPoint PPT Presentation
(TSX:LFX) RE-IMAGINING LEAD February 2016 FORWARD LOOKING STATEMENTS LEADFX Inc. (LEADFX) is a reporting issuer under Canadian securities laws. Certain statements general operating risks such as metal price volatility, lead carbonate
RE-IMAGINING LEAD
February 2016
11/7/2016
LEADFX Inc. (“LEADFX”) is a reporting issuer under Canadian securities laws. Certain statements contained in this presentation are forward-looking information within the meaning of securities laws. All statements included herein (other than statements of historical facts) which address activities, events or developments that management anticipates will or may occur in the future are forward-looking statements, including statements as to the following: statements relating to the business and future activities of, and developments related to LEADFX, and its subsidiaries after the date of this Presentation, including the development of water, lead and silver assets, future business acquisitions or transactions, future lead production, construction, commissioning and development of the Burgin Mine or quarrying on the property of Chief Consolidated Mining Company, the timing and length of care and maintenance at the Paroo Station Mine or Burgin Mine and future sales, future targets and estimates for production and sales, LEADFX’s ability to meet its working capital needs and debt repayments in the near term, forbearance by Enirgi Group Corporation pursuant to the amended credit agreements, the receipt of required additional financing to restart and operate the Paroo Station Mine, the cost and timing for completion of capital projects necessary for any future operations, grades and future lead prices, Mineral Resources, Mineral Reserves, life of mine, recovery rates, grades and prices, business strategies and measures to implement such strategies, competitive strengths, estimated goals and plans for LEADFX‟s future business operations, lead market outlook and other such matters. Forward looking statements are often, but not always, identified by the use of words such as „„seek‟‟, „„anticipate‟‟, „„contemplate‟‟, „„target‟‟, „„believe‟‟, „„plan‟‟, „„estimate‟‟, „„expect‟‟, and „„intend‟‟ and statements that an event or result „„may‟‟, „„will‟‟, „„can‟‟, „„should‟‟, „„could‟‟ or „„might‟‟ occur or be achieved and other similar
made by management in light of its experience and perception of historical trends, current conditions and expected future developments, as well as other factors management believes are appropriate in the
expectations is subject to a number of risks and uncertainties, including factors underlying management‟s assumptions, such as, expected concentrate sales when in operation, the costs and
to raise additional financing and the risks relating to ramping up mining and milling throughput and
regulatory compliance and approvals, shareholder dilution, regulatory proceedings and litigation and general operating risks such as metal price volatility, lead carbonate concentrate treatment charges, exchange rates, health and safety, environmental factors, mining risks, metallurgy, labour and employment regulations, government regulations, insurance, dependence on key personnel, the nature
and other information contained in this Presentation concerning the lead and silver industries and our general expectations concerning the lead and silver industries are based on estimates prepared by us using data from publicly available industry sources as well as from market research and industry analysis and on assumptions based on data and knowledge of these industries which we believe to be
positions, market shares and performance characteristics. While we are not aware of any misstatements regarding any industry data presented in this Presentation, the lead and silver industries involves risks and uncertainties and is subject to change based on various factors. Additional factors and considerations are discussed in LEADFX‟s 2014 annual information form dated March 10, 2015, management information circular September 14, 2015 and elsewhere in other documents filed from time to time by LEADFX with Canadian securities regulatory authorities and available on SEDAR at www.sedar.com. While LEADFX considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect. These factors may cause the actual results of LEADFX to differ materially from those discussed in the forward-looking statements, and there can be no assurance that the actual results or developments anticipated by management will be realized or, even if substantially realized, that they will have the expected results on LEADFX. Undue importance should not be placed on forward-looking information nor should reliance be placed upon this information as of any
undertake to update this information at any particular time. All statements, opinions and views contained in this Presentation are solely those of LEADFX and do not constitute any written or public oral statement of Enirgi Group Corporation or any other third party.
2
11/7/2016
LEADFX Overview
at 4.4% Pb1
advance to pre-feasibility stage
1 From NI 43-101 Technical Report on the Paroo Station Mine, Wiluna, Western Australia dated March 10, 2015 prepared by SRK Consulting (Australasia) Pty Ltd. For LEADFX
3
11/7/2016
Why Invest in Lead?
resources sector and, as a consequence, little was invested in lead exploration or mine development.
meet the demand. There are limited new mine opportunities to replace the rapidly depleting resources.
some jurisdictions, increasing regulatory burdens. Many of these dormant mines are now
50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 450,000
$0.00 $0.20 $0.40 $0.60 $0.80 $1.00 $1.20 $1.40 $1.60 $1.80 $2.00 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 Lead Price (US$/lb) LME Lead Stock
4
11/7/2016
portion of current supply is taken off-line.
$0.95/lb.1
Supply and Demand, Price Forecast
5
2 UBS Global I/O: Miner‟s Price Review - Dec, 2015
Chinese growth slowing but continuing positive demand outlook Asian growth in electric motorcycle battery replacement Global automobile ownership continues to grow Analysts forecast for global lead demand growth to be 2.5-3.5% CAGR to 20202 Confirmed 2015 closures: 70k tpa between Century Mine (Australia) and Lisheen Mine (Ireland) No known large lead mines approved
Lead prices will need to increase to encourage investment LEAD DEMAND LEAD SUPPLY
1 Wood Mackenzie and Metal Bulletin Research, or $1.02/lb and $0.95/lb.
11/7/2016
Supply and Demand, Price Forecast in Silver
Price sensitive and the strength in USD will be a drawback for demand in physical silver1
1Source: UBS Global I/O: Miner‟s Price Review - Dec, 2015
6
11/7/2016 7
Wayne has orchestrated the consolidation and growth of Enirgi Group since its inception. He has a track record of successfully creating and growing domestic and international companies. Wayne has been a Director of LEADFX since 2012.
Wayne Richardson
PRESIDENT & CHIEF EXECUTIVE OFFICER
Rob is a Mining Engineer with over 25 years in the Australasian mining industry. Rob has been involved with and led several mine start- ups and operational turnarounds, including BHP‟s Cannington mine. Rob has been associated with the Paroo Station mine since 2009 and led the 2010 restart.
Rob Scargill
MANAGING DIRECTOR Doug is a Chemical Engineer who has extensive experience with Rio Tinto Alcan and Alcan Gove Pty Limited. Doug has over 10 years of general management experience including mining, mineral processing and rail
Paroo Station since 2010 and led the 2013 restart.
Doug Grimmond
DIRECTOR OF MINING OPERATIONS, AUSTRALIA
Lincoln Greenidge
CHIEF FINANCIAL OFFICER Lincoln is a Canadian Chartered Accountant who has 16 years of experience in Finance roles within industries such as Banking, High Technology, Life Sciences, Dry Food Products, and Mining. Prior to joining LEADFX, he was Corporate Controller of IAMGOLD and HudBay Minerals Inc. D'Arcy is a former partner with Gowling Lafleur Henderson LLP, where he worked with public mining companies focusing on corporate and securities law. D'Arcy holds a Master of Laws (Securities Law) from Osgoode Hall Law School.
D‟Arcy Doherty
VP, LEGAL & GENERAL COUNSEL
11/7/2016 8
lead industry and has had a career in strategic business development at the senior management level in domestic and international markets. Mr. Richardson is the director and the President and CEO of Enirgi Group Corporation. Wayne has been a Director of LEADFX since March 2012.
Wayne Richardson
PRESIDENT & CHIEF EXECUTIVE OFFICER
David Ming Qi has been Deputy General Manager at China Yunnan Metallurgical Group
CYMCO's overseas projects and M&A activities.
a broad range of experience in both China and internationally.
David Ming Qi
Blainey & Burns LLP since 2001. Mr. Metcalfe has extensive executive, board, compensation committee and audit committee experience and currently serves on the board of several public companies.
Robert Metcalfe
accountant and former Partner at KPMG LLP, having retired in September 2010 after 30 years of service. Mr. Warner has a Bachelor of Commerce and a Masters of Business Administration from McMaster University.
David Warner The Honorable J. Trevor Eyton
CHAIRMAN Senator Eyton served as President and CEO of Brascan (now Brookfield Asset Management Inc.). He currently serves on the public boards of Brookfield Asset Management, Magna International, Silver Bear Resources Inc. and Cancana Resources Corp. Senator Eyton was appointed a director of LEADFX's predecessor company in May 2000. Peter Robson is an experienced company director with a professional background as a senior engineer with both Australian and Asian manufacturing firms. Mr. Robson's career has established him with a unique network throughout Australian industry and government.
Peter Robson
11/7/2016
Why LEADFX?
Proven Management Restart Ready Project Pipeline Stable Jurisdictions LEADFX Advantage
A proven management team with extensive experience in the primary lead sector including commissioning and operating the Paroo Station Mine. The flagship Paroo Station lead carbonate mine in Western Australia is currently on care and maintenance. Restart of commercial production is anticipated for H2, 2016. The Burgin Mine underground silver-lead-zinc project located in Utah anticipated to be advanced to a pre-feasibility level by Chief Consolidated Mining (83% owned by LEADFX). Western Australia and Utah ranked 5th and 14th, respectfully, in the Frasier Institute‟s Mining Investment Attractiveness Index in 2014. A technology advantage through leveraging Enirgi Group's existing smelting relationships. Potential cash flow from industrial minerals on Chief. Relationship with Enirgi Group provides a broader range of skills and expertise than normal for a company of this size.
9
11/7/2016
Enirgi Group Corporation
Enirgi Group Corporation (“Enirgi Group”) is the majority shareholder of LEADFX (85% ownership).1 Enirgi Group is a Canadian specialty chemicals and diversified industrials company focused on the operation and development of long-life, low-cost resource assets. Enirgi Group‟s story is about the quality of its management, the development and application of innovative and disruptive business models and technologies to create world class assets, and understanding and changing the markets in which it operates.
ENIRGI GROUP CORP OFFICE - TORONTO SODA DERIVATIVES LITHIUM COMPOUNDS WATER & OIL SHALE DERIVATIVES SPECIALTY LEAD METAL ENERGY STORAGE
solutions
and recycling market in Australia
project
bicarbonate
Australia
resource projects
technology
INNOVATION CHEMICALS POWER STORAGE AGRICULTURAL
ENVIRONMENTAL SERVICES
RESOURCES
management capabilities
volume and primacy
supply, logistics and water remediation
10
1 Based on information obtained from Enirgi Group‟s website.
11/7/2016
Stable Mining Jurisdictions
Mining development project Exploration project Paroo Station Mine, WA (100%)
Burgin Mine, Utah (83%)
Lead-Silver-Zinc potential Sun Project, Alaska
1 From the NI 43-101 Technical Report on the Paroo Station Mine, Wiluna, Western Australia dated March 10, 2015 prepared by SRK Consulting (Australasia) Pty Ltd. For
LEADFX Inc. (formerly, Ivernia Inc.)with an effective date of December 31, 2014. See Notes on Mineral Resource and Mineral Reserve Estimates for further information.
11
Nominal 79,000 tpa Contained Pb Nominal 79,000 tpa Contained Pb
2005
11/7/2016
Company and Paroo Station Mine History
October 2005
achieves commercial production April 2007
following EPA investigation into the air quality surrounding the vicinity of the Port of Esperance
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
February 2010
using packaged concentrate April 2011
concentrate transport review March 2013
recommencement of processing operations December 2014
Maintenance due to low spot lead prices and high AUS:USD exchange rate November 2015
and changes name to LEADFX December 2015
LEADFX‟s obligations to Sprott Resources Lending through bridge financing with Enirgi Group Nominal 90,500 tpa Contained Pb On Care & Maintenance On Care & Maintenance
12
October 2011
Western Australia EPA concludes concentrate transport process is best practice
11/7/2016
2016 – AGGREGATE
cash flow generation (Potentially coincide with fund raising for Mine development) 2017 – ACCELERATE
producer), subject to successful 2016 restart
Proposed Growth Plan
13
11/7/2016
Paroo Station Lead Carbonate Mine, WA
grinding, sulphidisation, flotation and dewatering circuits commissioned in 2005
SRK notes that the capital costs associated with restarting the project are considered to be relatively low given the recent operational history
recycling plants
Opportunities
provide cost certainty
14
11/7/2016
Utah
mining claims in the state of Utah
million tonnes of ore for 1.1 million tonnes of lead metal and 289 million ounces of silver
up to 1978
Burgin mine, Utah - Chief Consolidated Mining
Opportunities
smelting
15
11/7/2016
Resources and Reserves
Paroo Station Mine1 Burgin Mine Extension
1 From the NI 43-101 Technical Report on the Paroo Station Mine, Wiluna, Western Australia dated March 10, 2015 prepared by SRK Consulting (Australasia) Pty Ltd. For
LEADFX Inc. (formerly, Ivernia Inc.)with an effective date of December 31, 2014. See Notes on Mineral Resource and Mineral Reserve Estimates for further information.
Reserves Tonnes (Mt) Pb% Contained Pb Metal (kt) Proven 1.7 7.2 126 Probable 5.0 7.0 349 Total P+P 6.8 7.0 475 Resources Tonnes (Mt) Pb% Contained Pb Metal (kt) Measured 6.0 4.5 275 Indicated 25.8 4.3 1,120 Total M+I 31.8 4.4 1,395 Inferred 8.4 4.0 340
16
Historical Resource published by previous owner is under review
11/7/2016
Capital Structure & Shareholder Summary
17
Capital Structure Shareholder Summary % Held Institutions Enirgi Group Corporation 85.1% Ingalls & Snyder LLC (Asset Management) 3.2% Dynamic Resource Fund 0.5% Nesbitt Burns ITF (Pinetree Resource Partnership) 0.3% Rossport 0.3% Subtotal 89.5% Total Shares (Basic) 100.0%
1 Based on available 2015 shareholders data. 1
(in US$ millions, except per share amounts)
Current Current Share Price February 22, 2016 $0.22 Basic Shares Outstanding 38.3 Basic Market Capitalization $8.4 In-The-Money Options 0.0 Fully Diluted Shares Outstanding 38.4 Fully Diluted Market Capitalization $8.4 Cash & Cash Equivalents $1.6 Total Debt $12.1 Enterprise Value $19.0
11/7/2016
Notes on Mineral Resource and Mineral Reserve Estimates
Paroo Station Mine
18
The mineral resource estimate and mineral reserve estimate for the Paroo Station Mine is extracted from the “NI 43-101 Technical Report on the Paroo Station Mine, Wiluna, Western Australia” dated March 10, 2015 prepared by SRK Consulting (Australasia) Pty Ltd. for LEADFX Inc (formerly, Ivernia Inc.) with an effective date of December 31, 2014. A copy of the full technical report is available on LEADFX‟s website at www.www.leadfxinc.com and on its SEDAR profile at www.sedar.com. Mr. Terry Burns FAusIMM, an employee of Warbrooke-Burns & Associates Pty Ltd., is a “Qualified Person” for purposes of NI 43-101 and he supervised the preparation of and verified the above mineral resource figures prepared by LEADFX‟s consultants. The Mineral Reserve Estimate was developed by Mr Adrian Jones of AMC Consultants Pty Ltd. (“AMC”). Mr. Bruce Gregory, MAusIMM(CP) of AMC is a Qualified Person for the purposes of NI 43-101 and he supervised and verified the above Mineral Reserve figures prepared by Mr Jones.
2015 SRK (Australia) Technical Report Highlights Total Restart Capital Cost A$25M Pb price USD$2,100/t Mine Life 4.2 years Average Production 1.36 Mtpa Metallurgical Recovery 77.5% Concentrate Grade 67% NPV(8%) A$136M AUD/USD $0.77 LOM
Jessica Helm Investor Relations 1 Adelaide Street East, Suite 3001 Toronto, Ontario Canada M5C 2V9
P | + 1 416 867 9298 E | info@leadfxinc.com W | leadfxinc.com
A pure Lead & Silver resource company
11/7/2016 19