DEVELOP GLOBAL LIMITED — Investor Presentation 2019

Feb 11, 2019

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ASX: VXR
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AJ SAVERIMUTTO | Managing Director

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Important Information and Disclaimer

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Cautionary Statement

The information contained in this document (“Presentation”) has been prepared by Venturex Resources Limited (“Company”). This Presentation is being used as a presenter’s aid with summarised information. See Venturex’s other and periodic disclosure announcements lodged with the Australian Securities Exchange, which are available at www.asx.com.au or at www.venturexresources.com, for more information.

While the information contained in this Presentation has been prepared in good faith, neither the Company nor any of its shareholders, directors, officers, agents, employees or advisers give any representations or warranties (express or implied) as to the accuracy, reliability or completeness of the information in this Presentation, or of any other written or oral information made or to be made available to any interested party or its advisers (all such information being referred to as "Information") and liability therefore is expressly disclaimed. Accordingly, to the full extent permitted by law, neither the Company nor any of its shareholders, directors, officers, agents, employees or advisers take any responsibility for, or will accept any liability whether direct or indirect, express or implied, contractual, tortious, statutory or otherwise, in respect of, the accuracy or completeness of the Information or for any of the opinions contained in this Presentation or for any errors, omissions or misstatements or for any loss, howsoever arising, from the use of this Presentation.

This Presentation may include certain statements that may be deemed “forward-looking statements”. All statements in this Presentation, other than statements of historical facts, that address future activities and events or developments that the Company expects, are forward-looking statements. Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements. The Company, its shareholders, directors, officers, agents, employees or advisers, do not represent, warrant or guarantee, expressly or impliedly, that the information in this Presentation is complete or accurate. To the maximum extent permitted by law, the Company disclaims any responsibility to inform any recipient of this Presentation of any matter that subsequently comes to its notice which may affect any of the information contained in this Presentation. Factors that could cause actual results to differ materially from those in forwardlooking statements include market prices, continued availability of capital and financing, and general economic, market or business conditions. Venturex assumes no obligation to update such information.

Investors are cautioned that any forward-looking statements are not guarantees of future performance and that actual results or developments may differ materially from those projected in forward looking statements. Please undertake your own evaluation of the information in this presentation and consult your professional advisers if you wish to buy or sell Venturex shares.

This Presentation has been prepared in compliance with the JORC Code 2012 Edition. The ‘forward-looking information’ contained here is based on the Company’s expectations, estimates and projections as of the date on which the statements were made. The Company disclaims any intent or obligations to update or revise any forward looking statements whether as a result of new information, estimates or options, future events or results or otherwise, unless required to do so by law. The Production Target (and the forward looking financial information based on that Production Target) contained in the DFS includes material classified as Ore Reserves and Inferred Resources. Material classified as Ore Reserves contributes ~68% of the material within the LOM Production Target and Inferred Resources contribute ~32% of material included within the LOM Production Target. The mine plan has been sequenced to ensure that the reliance on material contributed from Inferred Resources is minimised within the first 5 years and the Company is satisfied that the proportion of Inferred Resources is not a determining factor for project viability. Nonetheless, the Company notes there is a low level of geological confidence associated with Inferred Resources and there is no certainty that further exploration work will result in the determination of Indicated Resources or that the LOM Production Target insofar as it relates to the Inferred Resources will be realised.

Competency Statement

The information in this presentation that relates Geophysical Exploration Results is based on information compiled by Mr Russell Mortimer, who is employed as a Consultant to the Company through geophysical consultancy Southern Geoscience Consultants Pty Ltd. Mr Mortimer is a member of the Australian Institute of Geoscientists and a member of the Australian Society of Exploration Geophysicists and has sufficient experience of relevance to the styles of mineralisation and the types of deposits under consideration, and activities undertaken, to qualify as a Competent Person as defined in the 2012 Edition of the Joint Ore reserves Committee (JORC) Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves.

The information in this presentation that relates to Exploration Results at the Sulphur Springs Project is based on information by Mr Luke Gibson who is an employee of the Company. Mr Gibson is a member of the Australian Institute of Geoscientists and Mr Gibson has sufficient experience with the style of mineralisation and the type of deposit under consideration.

The information contained in this presentation relating to the Whim Creek Projects Resources and Reserves was previously released in announcements Company Resource and Reserve Statement – Revised released 8 October 2013 and 23 March 2018.

The information contained in this presentation relating to the Kangaroo Caves Resources was previously released in announcements issued 22 September 2015, based on information compiled or reviewed by Mr David Milton, Hardrock Mining Consultants Pty Ltd who is a Member of the Australasian Institute of Mining and Metallurgy. Mr Milton has sufficient experience relevant to the style of mineralisation, type of deposit under consideration and to the activity being undertaking to qualify as Competent Persons as defined in the 2012 – Refer Edition of the “Australasian Code for Reporting of Mineral Resources”.

The information contained in this presentation relating to the Sulphur Springs Resources was previously released in announcements issued 21 March 2018, based on information compiled or reviewed by Mr David Milton of Mil Min Pty Ltd who is a Member of the Australasian Institute of Mining and Metallurgy. Mr Milton has sufficient experience relevant to the style of mineralisation, type of deposit under consideration and to the activity being undertaking to qualify as Competent Persons as defined in the 2012 – Refer Edition of the “Australasian Code for Reporting of Mineral Resources”.

The information contained in this presentation relating to the Sulphur Springs Reserves was previously released in ASX announcement dated 10th October 2018 based on information compiled or reviewed by Mr Daniel Donald, of Entech Pty Ltd who is a member of the Australasian Institute of Mining and Metallurgy. Mr Donald has sufficient experience relevant to the style of mineralisation, type of deposit under consideration and to the activity being undertaken to quality as a Competent Person as defined in the 2012 Edition of the “Australasian Code for Reporting of Mineral Reserves”.

The Company confirms that: a) The form and context of the material in this presentation has not been materially modified from the above previous announcements; b) It is not aware of any new information or data that materially affects the information included in the previous announcements and that all material assumptions and technical parameters underpinning the estimate in DFS announcement issued 10 October 2018 continue to apply and have not materially changed; and c) It is uncertain that following further exploration and evaluation that the historical estimates will be able to be reported as mineral resources or ore reserves in accordance with the JORC 2012 Code.

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Venturex Resources is a base metals developer based in the Pilbara, Western Australia. Venturex Resources has a large, quality asset base and is well positioned for production and growth in global copper and zinc markets.

We’re Building an Australian Base Metals Business.

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- Investment Highlights Timing, Profitability & Growth

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MARKET TIMING PROJECT & PROFITABILITY Low LME stockpiles High profit, low cost project ASX listed Cu/Zn developer Economy of scale (production) Strong forward markets Cornerstone asset

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POISED FOR GROWTH

DFS complete, funding progressing Strong exploration potential Northern Star ~19% shareholder

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- Board Corporate Snapshot

BOARD

Anthony (Tony) Kiernan Non-Executive Chairman

Former lawyer with 35 years listed company management experience

Ajanth (AJ) Saverimutto Managing Director Mining Engineer with 20 years mine development and financing experience

KEY METRICS

Share price ($AUD) 0.22 Shares on Issue (M) 258 Market Capitalisation (M$AUD) 56 P-NAV (MC/Project NPV) 12%

TOP 5 SHAREHOLDERS %

Anthony Reilly Executive Director

20 years banking, finance and resource sector experience in mine development

Darren Stralow Non-Executive Director

Mining Engineer with 18 years mine operations and management experience

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Directors
3.18% Henghou Industries (Hong Kong) Ltd
4.08%
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– Project Snapshot Sulphur Springs

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Strategically located in world-class Pilbara district

Access to port facilities , via haul road and sealed highways

13.8Mt Cu-Zn deposit ( 3.5% Cu Eq* )

+10yr mine life , producing Cu & Zn concentrate

Low CAPEX and rapid payback Funding strategy well advanced

Substantial exploration potential, +27km of Panorama Trend

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*Copper equivalent calculated at metal price assumptions Cu = USD6,150/t Zn= USD2,808/t, Pb = USD2,112/t

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– Diminishing Supply Market Timing

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Supply shortfall expected by 2020

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Resource depletion on current projects Grade decline in large Cu projects Lack of investment in new projects Falling copper inventories

Copper LME Warehouse Level – Zinc LME Warehouse Level Feb 1, 2018 – Feb 5, 2019

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Cu Demand

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4Mt
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SOURCE : Bloomberg, LME, SHFE, Comex Sept 2018

SOURCE : InfoMine

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– Strong Demand from EV’s Market Timing

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Electric Vehicles (EV’s)

Electric Vehicles (EVs) are a major growth market An average EV needs 4 x the copper of a conventional medium sized car The EV fleet will be 230 million in 2035 and 750 million by 2050 equivalent to half the global fleet[1]

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SOURCE: International Copper Association, US Global Investors

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SOURCE: Visual capitalist, US Global Investors

1. UBS Global Research, 29 August 2017, “Copper: Electric Vehicles & Charging Infrastructure to Accelerate Demand

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– Project Update Progress & Successes

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1.
DFS Completed
NPV (8) – A$ 474M
IRR – 51%
–
Free Cash / annum
$80M
1. LOM – 10 years
Mine Design + Metallurgy Testwork Construction
26% Cu Con. (90% + Recovery)
Early works
45/55% Zn Con. (90% + Recovery)
Construction
Production
VES Study
Funding
Proceed to DFS
Camp Purchased
2. Resource Drilling
6.9m @ 4.03% Cu
11m @ 12.2% Zn
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1. Refer ASX Release 18 Jan 2018

2. Refer ASX Release 10 Oct 2018

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– Australian Mines & Metal Endowment A Standout Asset

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Australian VMS
Sulphur Springs Project
10
8
6
4
2
Sulphur Springs Project
0
0 2 4 6 8 10 12 14 16 18 20
Resource (Mt)
CuEq. Grade (%)
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SOURCE : VXR, MMG, SLR, MLS, ERL, MRP, SYV, HRR, RVR, IGO, NQ (NEX), THX, SFR, HOR, G1A Copper equivalent calculated at metal price assumptions: Cu = USD6450/t, Zn = USD2,535/t, Pb = USD2050/t, Au = USD1200/oz. Bubble size according to copper equivalent metal in stated resource.

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– Project Design An Economy of Scale Project

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Open Pit Design

o Optimised open pit design

• Low strip ratio (8:1)

• Optimised extraction sequence

• Underground Design

• Bulk mining method (Modified – SLC)

• Low capital development requirement

• Low cost extraction methodology

• Metallurgy

• 1.25Mtpa plant throughput (increased 25%)

• Larger grind size = operating cost savings

• o Simple crush, grind, float process

• Infrastructure

• Camp purchased

• Access road optimised

• Fit for purpose and upgradable infrastructure

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Refer ASX Release 10 Oct 2018

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– DFS – Financial Results A Financially Attractive Project

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NPV [8]
AUD 472
Million [1]
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Excellent project financials

▪ NPV[8] = AUD 472 M

▪ IRR = 51%

• Free Cash Flow = AUD 818 M

Average cash flow of ~AUD 80 M per year

Infrastructure capital cost reduction to AUD146M (including contingency)

Plant capacity 1.25Mt/annum – designed to 2.0 Mt/annum

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Increased Ore Reserve from 7Mt @ 1.1% Cu and 3.5% Zn to 8.5Mt @ 1.4% Cu and 3.1% Zn (an increase of 42% in contained Cu metal)

Increased financial viability

Increased production rate

Reduced capital cost

1NPV calculated on following assumptions: Cu = USD6300/t, Zn = USD2650/t, AUD:USD = 0.72

Refer ASX Release 10 Oct 2018

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– Operating Costs Strong Margins & Cash Flow

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A Cornerstone Asset with Width, Grade and Scale

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LOM COSTS
Output	Unit	Value
Revenue	AUD/t	209
Operating Cost Per Tonne	AUD/t	122
Capital Cost per Tonne	AUD/t	22
Total Cost per Tonne	AUD/t	144
Margin	AUD/t	65

Mining Area	Tonnes (Mt)	Cu (%)	Cu Metal (kt)*	Zn (%)	Zn (Metal (kt)*
Sulphur Springs Open Pit	5.1	1.8	90	3.4	176
Sulphur Springs Underground	5.6	1.4	79	3.7	207
Kangaroo Caves Underground	1.8	0.7	12	3.8	70
Total Mining Inventory	12.6	1.4	181	3.6	453

Refer ASX Release 10 Oct 2018

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– Schedule to Production Making It Happen

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MILESTONE Yr 1 Yr 2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4	MILESTONE Yr 1 Yr 2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4	MILESTONE Yr 1 Yr 2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4	MILESTONE Yr 1 Yr 2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4	MILESTONE Yr 1 Yr 2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4	MILESTONE Yr 1 Yr 2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4	MILESTONE Yr 1 Yr 2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4	MILESTONE Yr 1 Yr 2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4	MILESTONE Yr 1 Yr 2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Mining EPA Approval
Water License & Works Approvals
Financing
Plant Site Earthworks & Pre Strip
Process Plant Construction
Process Plant Commissioning
Open Pit Development
Production Ramp-up
Full Production

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– Potential Paths to Production Funding

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FUNDING
DEBT EQUITY
ASSET
BANKS / BONDS NAIF MARKETS
LEVEL
PRIVATE EQUITY
CONCENTRATE
OFF-TAKERS
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– Project Update Ready for Development

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CONTROLS	Identify / Shortlist	Scope	Tender / EOI	Award / Contract
Plant Contract			In progress
Open Pit Contract			In Progress
Infrastructure & Earthworks
OPPORTUNITIES
Gas Supply Power
Capital Deferral
Key Personnel

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– Panorama Exploration Multiple Local Prospects

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Refer ASX Release 8 May 2018

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+27km VMS belt

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Potential for further look alike deposits Surface gossan identified at numerous prospects Drill program to follow

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Refer ASX Release 27 Nov 2017

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– Poised for Growth Realising Our Potential

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– Value Proposition Our Key Strengths

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Value Markets Shareholders Exploration Strong Team
Cornerstone Northern Star 27km exploration Robust
Strong markets
asset major shareholder potential strategy
Excellent Diminishing Few ASX listed Multiple VMS Strong
economics supply copper companies targets vision
Development New applications Support of major Sulphur Springs Proven
ready for copper shareholders deep drilling team
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AJ SAVERIMUTTO | Managing Director

Building an Australian Base Metals business.

Registered Office: Level 2, 91 Havelock Street, West Perth, WA 6005 T: + 61 8 6389 7400 F: + 61 8 9463 7836 admin@venturexresources.com

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ASX: VXR

Media: Nicholas Read / Read Corporate Ph: +61 8 9388 1474 Email: info@readcorporate.com.au

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