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Alkane Resources — AGM Information 2010
May 9, 2010
48579_rns_2010-05-09_55eb6efb-3965-4a3f-8e09-075fab18a428.pdf
AGM Information
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R ESOURCES L TD
AB N 3 5 0 0 0 6 8 9 2 1 6
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10 May 2010
Manager Announcements Company Announcements Office ASX Limited 20 Bridge Street Sydney NSW 2000
Dear Sir,
PRESENTATION
Attached is a copy of a presentation to shareholders immediately following the annual general meeting today.
A copy of this presentation will also be available on the Company’s website www.alkane.com.au.
Yours faithfully, for ALKANE RESOURCES LTD
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D I Chalmers Managing Director
Registered Office: 129 Edward Street Perth WA 6000 Telephone: 61 8 9227 5677 Facsimile: 61 8 9227 8178 PO Box 8178 Perth Business Centre Western Australia 6849 www.alkane.com.au [email protected]
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…putting the pieces together
Annual General Meeting
10 May 2010
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Corporate snapshot
Shareholder profile
Exchanges ASX: ALK
Share Price (7 May 2010) A$0.29
Shares 249m
Fully Diluted Market Cap ~A$73m
Cash (at April 31 2010) ~A$10.0m
Retail
No debt Institutions Directors & ManagementTop 20 ~60%3%
12 Month High / Low A$0.48/ $0.18 at 31 December 2009 Abbotsleigh (Gandel Metals) 29%
Directors & Management
J. S. F. Dunlop Chairman
D . . I Chalmers Managing Director
I. R. Cornelius Non‐Executive Director
A. D. Lethlean Non‐Executive Director
I. J. Gandel Non‐Executive Director
L.A. Colless CFO Joint Secretary
K.E. Brown Joint Secretary
T W Ransted Chief Geologist
Source: FT M D Sutherland General Manager NSW
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Business Strategy Multi commodity explorer and miner, focussed in the Central West of New South Wales, Australia Dubbo Zirconia Project – world class resource of zirconium, hafnium, niobium, tantalum, yttrium and rare earths Gold production from Peak Hill mine 1996 – 2005. Au Au Cu New gold development planned at Tomingley based Zr NbY REE Cu upon 800,000 oz resource 150km area Au Major gold discovery at McPhillamys (+4 million oz) Au Joint Venture with Newmont Develop multiple operations within tight geographic area over next five years
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Tomingley Project Gold
Definitive Feasibility Study Mintrex Pty Ltd Study Manager: Fiona Morgan Environmental Assessment R W Corkery & Co Pty Ltd
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Tomingley Gold Project, NSW
ALKANE RESOURCES: 100%
• Three deposits under conceptual development :
– Caloma (80% open pit ore recovery)
– Wyoming One (35% open pit ore recovery)
– Wyoming Three (80% open pit ore recovery)
947 AC, RC and core holes totalling 109,114 metres
• Total current combined resource => + 850,000oz
– Expansion potential
• Deposits open at depth
• Significant regional exploration potential
• Minimum six year mine life => +10yr target
• Initial open pit operations (Yrs 1‐6)
Underground extensions (Yrs 6 ‐10)
…advanced feasibility study
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TGP Infrastructure
• Infrastructure:
– water => 45km pipeline
– power (State Grid) => 20km 66Kv power line
– roads => primary & secondary access
• Skilled local workforce
– population base of 150,000 within 120km
diameter area
– No FIFO, no accommodation required
Proposed site layout
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TGP Infrastructure
45km water pipeline and 20km power line
Alkane’s test bore near Narromine
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TGP Current Resource Expansion
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- South Caloma Discovery:
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3,000m aircore with several +3.0g/t intercepts
-
– RC resource drill out planned – Potential 1Mt open pit resource
-
Caloma Underground
-
Seven core holes 3,500m
-
– Numerous mineralised intercepts – Geological modelling for resource potential
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TGP Wyoming One Underground
• Resource at 3.00g/t gold cut off:
– 690,000 tonnes @ 5.00g/t Au (121,000 oz)
• Prefeasibility study:
– Decline development near base of pit
– Sub level long hole open stoping
– Only three ore bodies ‘376’, ‘831’ and
‘Hangingwall’ targetted
– > 80,000 oz recovered
Conceptual underground development
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TGP Economics
PRODUCTION OUTCOMES BASE CASE EXPANDED CASE
Mine Life 6 Years 7 ‐ 10 Years
Annual Throughput
Open Pit 1.0 Million tonnes
Underground 0.5 Million tonnes
Annual Average Production 50,000oz 50,000oz
Method conventional CIL circuit conventional CIL circuit
Recovery >90% >90%
Capex (+/‐ 10%) A$90 Million +A$10 Million
Estimated cash costs A$800/oz A$800/oz
Potential LOM cashflow ~A$120 Million [#] A$210 Million [#]
# Based on A$1250 per ounce gold price; 1 Mtpa mill throughput for open pit and 0.5Mtpa for underground
…targeting 10 year mine life
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Advanced Exploration
Gold ODEJV ‐ McPhillamys
Newmont Australia Limited (NAL)
Subsidiary of US based Newmont Mining Corporation
NAL are the Managers and Operators
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ODEJV
ORANGE DISTRICT EXPLORATION JOINT VENTURE (ODEJV)
Gold, Copper – Orange, NSW | Alkane Resources: 49%, Newmont Australia: 51%
TWO FOCUS AREAS:
MOLONG
• Molong
Carlin & Ridgeway‐type – targeting copper‐gold porphyry‐style gold
porphyry targets mineralisation (Ridgeway‐type) and Carlin style
• Moorilda
MOORILDA – drilling confirms potential to host a major gold
system @ McPhillamy’s
Cadia Valley
+50Moz
• Newmont have earnt 51%, to go to 75% by
carrying all expenditures through to completion
Orogenic (structural) of final BFS
gold targets
…low risk with significant upside + 4moz system
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ODEJV Moorilda | McPhillamy’s
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CONCEPTUAL TARGET McPHILLAMY’S
A Section AA
• Basic area [] => +0.5g/t gold
• Potential tonnage = > ~100 million A AA
• Grade cut off => 600m
@ 0.5 g/t gold ~4.5 million oz
@ 1.0 g/t gold ~3.5 million oz
150m
• Mineralisation strike length over 400m
6km; possibly up to 10km
BASE AREA
• Preliminary metallurgical scoping •• ~600m x 150m x 85% = 76,500mVertical depth of 500m = ~38 million m [2] [3]
indicates +90% gold recovery from • Tonnage [@ 2.8 SG] = ~100 million tonnes
CIL
• Likely low waste to ore ratio to
significant depth
150m @ 1.5g/t Au
… potential open cut or block caving operation
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ODEJV Moorilda Regional Targets
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MULTIPLE TARGET AREAS:
- Exploration
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– Detailed regional aeromagnetic survey
– Regional Induced Polarisation
– Regional gravity
– Regional soil sampling
– Detailed geological mapping
– Specific aircore, RC and limited core drilling
• Drill results
– Kings Plain 78m @ 1 04g/t Au .
– Sherlock 3m @ 1.13g/t Au and 13m @ 0.51g/t Au
– Flanagans 3m @ 1.16g/t Au and 10m @ 0.99g/t Au
– Hodsons 39m @ 0.26g/t Au
– McPhillamys East 18m @ 0.27g/t Au
– Confidence 3m @ 1.45g/t Au
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Dubbo Zirconia Project Zirconium, niobium, yttrium, rare earth elements
Definitive Feasibility Study TZ Minerals International Pty Ltd Study managers: Steve Gilman and Gavin Diener Marketing: Alister MacDonald (TCMS) and Dudley Kingsnorth (IMCOA) DPP Operations: ANSTO Minerals Group
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Rare Metals ‐ Rare Earths
Rare Metals – Rare Earths
• China produces 90% of world
downstream zirconium chemicals
• China is limiting the export of raw rare
earths materials
• China currently produces 95% of world Rare metals
REE output
• Brazil produces 90% of world niobium Light rare earths Mids Heavy rare earths
� Green technology is dependant on rare metals and rare earths
� Increased demand also driven by changes in legislation
� China has dominant position
…not so rare, but increasingly valuable
Yttrium “powered” compact floro light u
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Dubbo Zirconia Project Location
Dubbo region pop 80,000
State power grid
State gas grid
Major mixed agriculture
Transport hub
Substantial light industry
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DZP Resources
Measured Resource : 35.7 million tonnes grading
0 - 55 metres 1.96% Zr02, 0.04%HfO2, 0.46% Nb2O5 ,
0.03% Ta2O5 , 0.14% Y2O3 , 0.75% REO
and 0.014% U3O8
Inferred Resource : 37.5 million tonnes at similar grades
55 - 100 metres
TOTAL : 73.2 million tonnes
Major world resource of zirconium, hafnium, niobium, tantalum, yttrium and rare earth elements
Although the ore is not classified as a radioactive deposit, it contains 23 million lbs (10,200t) of uranium
Production of uranium is currently prohibited in NSW
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DZP Flow Sheet
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Market Summary Zirconium: drying agent in paints; primer coat of vehicle metalwork; ceramic pigments; engineering ceramics ; auto catalysts; electronics; solid oxide fuel cells; fuel rods in nuclear power plants ; special alloys and glasses Hafnium: alloys, control rods for nuclear reactors; nextgen microprocessors Niobium: HSLA steels ; special alloys and glasses Yttrium: stabilizer in ceramics; phosphors for TV/computer screens; lasers; and compact fluoro lights = energy efficient bulbs Rare earths: speciality glasses; phosphors ; fertilizers; catalysts; lasers; permanent magnets/rechargeable batteries , particularly for hybrid vehicle motors Increased demand for many of the metals is driven by environmental legislation to ensure emissions minimisation and energy consumption efficiency
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Zircon Usage
Zircon provides the feedstock for the zirconium industry
2012 Global
consumption
estimate
1,400,000tpa
18% = 250,000t zircon
for zirconia and
zirconium chemicals
Source: TZMI
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Zircon Supply Demand Price
20% shortfall by 2020
Zircon price and supply will have a major impact on the cost and availability
of zirconium chemicals, zirconia and zirconium metal
Source: TZMI
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Zirconium Chemicals
Current Zirconia
Zirconium Chemical
Uses
2015 Estimated 150,000 tonnes with industry growth rate of 4.5%pa
High growth areas: Advanced ceramics and catalysts 13.0%pa
Ceramic pigments 8.0%pa
Zirconium metal for nuclear applications ?
Products range from US$4/kg to US$20/kg Metal US$200/kg
Source: TZMI
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Structure of Niobium Industry
Metallurgical
� Structural steels
� resistant steelsStainless and heat
Pyrochlore FeNb � Superalloys
� magnetsSuper conducting
Columbite
Tantalite Nb 2O 5 Oxides
� Class
� Ceramics
AZL Nb
Concentrate
Nb Raw Materials Intermediate Products Applications
DZP process removes radioactive elements such as uranium and thorium, producing clean concentrate
Source: TZMI
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Niobium Demand
Niobium 2008
(Ferroniobium units)
consumption
~85,000t – 90% Brazil
Estimate for 2012
~100,000t
Ferroniobium price spiralled to US$60/kg in March 07 and is currently around US$35 - 40/kg
Long term expected to be in US$25 - $35/kg
Sources: IAMGOLD / TZMI
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Rare Earth Supply ‐ Demand Source: IMCOA
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Rare Earth Consumption
Total YREE demand 2014 estimated to be 200,000 tonnes
Source: IMCOA
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| DZP Product Output | ||||
|---|---|---|---|---|
| Base case model | of 400,000 tonnes per year of ore processed | |||
| Ore processed | 400,000tpa | 1,000,000tpa “Blue sky” | ||
| **ZBS, ZOH, ZBC, ZrO2 ** | 15ktpa (6ktpa ZrO2) | **37ktpa (15ktpa ZrO2) ** | ||
| Nb-Ta concentrate | 2ktpa (1.4ktpa Nb2O5) | 5ktpa (3.5ktpa Nb2O5) | ||
| LREE concentrate | 1,980tpa (REOs) | 4,950tpa (REOs) | ||
| YREE concentrate | 600tpa (REOs) | 1,500tpa (REOs) | ||
| Base case revenues ~US$100m | Blue sky ~US$250m | |||
| Open pit | life 200 years | Open pit life 80 years | ||
| �**ZBS = zirconium basic sulphate; ** | ZOH = zirconium hydroxide; ZBC = zirconium carbonate Equivalent ~99% ZrO2 + HfO2 | |||
| �Nb-Ta concentrate = ~70% Nb2O5 + Ta2O5 calcined basis �LREE = La, Ce, Nd �YHREE = Y, Gd, Dy, Tb |
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Zr Applications ‐ metal
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Zirconium metal and alloys for nuclear power plants
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Today there are 436 reactors, with 40 under
construction, 110 planned and 272
proposed.
Depending upon reactor type, each uses
10 to 45 tonnes Zr metal.
Fuel rod has life of 5 to 6 years, and then
must be replaced
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Zr ‐ Nb Applications
Niobium alloys for turbine blades
Zirconia thermal barrier coatings
in jet engines
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Applications in the Auto Industry
Source: Rhodia
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Zr Applications
Emission control – zirconia ceramics
Catalytic converter
Oxygen sensors
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Zr REE Applications
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Source: Rhodia
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Zr REE Applications Source: Rhodia
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Nb Applications
Also the addition of
0.15kg of n oi bium o t
the steel content of
an average car,
decreases the
weight by 100kg
Niobec (IAMGOLD)
Source: Rhodia
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REE Applications
Source: Molycorp
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Development pathway
‐> 2009 2010 2011 2012 2013
DUBBO ZIRCONIA Resource definition 2001 ‐2002 �
PROJECT Flow sheet development 2002 �
Laboratory Zr – Nb 1999 ‐ 2002 �
Pilot plant Zr – Nb 2002 �
Mine Plan & Scheduling 2002 �
Plant Design & Engineering 2002 �
Laboratory Y & REE 2009 ‐
Demonstration Pilot Plant 2008 ‐
Zr – Nb Product Distribution �
Y ‐ REE Product Distribution
Secure Offtake Agreements
Definitive Feasibility Study 2002
Environmental Impact (EA) 2000 ‐>
Detailed Design
Project Financing
Construction
Production
CAPEX base case estimated at approximately A$150
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DZP Strategic Significance
Majority of “downstream” zirconium products are derived from zircon, whose
output is governed by ilmenite/rutile from mineral sands mining operations.
China om nates ownstream z rcon um us ness at ~d i d i i b i 90% but eef d is z rcon.i
Niobium production dominated by one company, CBMM in Brazil with 90% of market.
Rare earth and yttrium production dominated by China (95%). DZP offers
new source particularly for important Y and HREE.
Production costs are spread across the four metal outputs – zirconium (hafnium),
niobium (tantalum), light rare earths and yttrium-heavy rare earths.
Project located in region with very favourable infrastructure and legislative
framework, both at a State and Federal level.
The DZP provides an alternative and strategic source for a number of important
metals, and is capable of producing for hundreds of years from one ore body.
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Community Activities
The Tomingley Annual Picnic Race Meeting
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Community Activities
Gilgandra High School
F1 in Schools National Final - Melbourne
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Community Activities
Narromine Glenn M [c] Grath Statue
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Peak Hill Site Rehabilitation
Heap Leach Pads and Waste Rock
Emplacement
Kangaroos on Heap Leach Pads
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…a perfect fit
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Disclaimer Disclaimer This presentation contains certain forward looking statements and forecasts, including possible or assumed reserves and resources, production levels and rates, costs, prices, future performance or potential growth of Alkane Resources Ltd, industry growth or other trend projections. Such statements are not a guarantee of future performance and involve unknown risks and uncertainties, as well as other factors which are beyond the control of Alkane Resources Ltd. Actual results and developments may differ materially from those expressed of implied by these forward looking statements depending on a variety of factors. Nothing in this presentation should be construed as either an offer to sell or a solicitation of an offer to buy or sell securities. Competent Person The information in this presentation that relates to mineral exploration, mineral resources and ore reserves is based on information compiled by Mr D I Chalmers, FAusIMM, FAIG, (director of the Company) has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as Competent Person as defined in the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Ian Chalmers consents to the inclusion in the presentation of the matters based on his information in the form and context in which it appears.
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NSW Central West Location Movie
Perth
Sydney
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Demonstration Pilot Plant Movie
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NAGAL PLANT PINJARRA WA
Large mixer-settlers
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NAGAL PLANT PINJARRA WA
All mixer-settlers
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