DEVELOP GLOBAL LIMITED — Regulatory Filings 2016

Nov 17, 2016

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ASX Announcement
ASX Code: VXR
Released: 18 November
2016
For further details
John Nitschke
Managing Director
T: +61 8 6389 7400
admin@venturexresources.com
Board
Tony Kiernan
Chairman
John Nitschke
Managing Director
Anthony Reilly
Non-Executive Director
Darren Stralow
Non-Executive Director
Trevor Hart
Company Secretary
Contact Details
Registered Office
Level 2
91 Havelock Street
West Perth WA 6005
T: +61 8 6389 7400
F: +61 8 9463 7836
admin@venturexresources.com
www.venturexresources.com
ABN: 28 122 180 205
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Venturex Resources Limited (ASX: VXR) 2016 Annual General Meeting Chairman’s Address

Ladies and Gentlemen,

Despite the challenges of a volatile and, at times, confusing macro-economic environment – the tone of which has been set by unexpected geopolitical outcomes such as Brexit and last week’s US Presidential election – I am pleased to say that the past year has been active and fruitful for Venturex.

Against the backdrop of improved sentiment in the junior resource sector, we have been able to make steady and tangible progress with many of the things that are within our control – strengthening our balance sheet, sharpening our corporate focus and advancing our key projects in a prudent and considered manner.

Some of the key achievements of the past year have included a successful recapitalisation of the Company through a well-supported $5 million raising; the introduction of new cornerstone investors and a supportive broker in Euroz Securities; a reassessment of the exploration potential of our two key base metal projects; and the start of new exploration programs which are already delivering significant results.

And, with the value engineering studies and permitting for our Sulphur Springs Project well advanced, I am confident that Venturex is well placed to achieve its goal of becoming a significant new mid-tier Australian zinc-copper producer.

This aspiration is underpinned by a high quality resource inventory of some 900,000 tonnes of zinc and 300,000 tonnes of copper across our Sulphur Springs and Whim Creek project areas, located in the Pilbara region of Western Australia.

While there is little doubt that the greenfields Sulphur Springs Project will underpin the long-term future of the Company, much of the activity during the year focused on Whim Creek – a brownfields site with excellent potential to become our second copper-zinc production hub, possibly even ahead of Sulphur Springs.

A successful re-evaluation of the exploration potential at Whim Creek highlighted the potential both to extend existing deposits Salt Creek and Mons Cupri, and to discover new zones of VMS-style mineralisation.

A multi-pronged exploration approach, drawing on innovative geological thinking, has generated a number of promising targets and confirmed the potential of the Whim Creek area – which has seen virtually no systematic exploration in more than three decades.

An initial round of drilling was completed last month, returning good early results particularly from the high-grade zinc-copper lodes at Salt Creek. In parallel with this, reprocessing of historical geophysical data together with new geophysical surveys has helped define a new set of deeper targets which are the focus of a second round of diamond drilling currently underway. More on this later from our Managing Director, John Nitschke.

Recent exploration endeavours at Whim Creek have been fruitful, with drilling and geophysical techniques confirming serious potential to extend existing resources and open up fresh discoveries.

At Sulphur Springs, our focus has been to advance to “shovel-ready” status as quickly as possible in order to capitalise on the improvement in demand and prices for both copper and zinc. The Venturex technical team has nearly completed value optimisation of the 2013 Sulphur Springs Feasibility Study, with the results delivering a potential low-risk copper-zinc project with attractive economics and a proposed low-CAPEX Stage 1 development based on a near-surface, high-grade supergene copper zone.

A drilling program has been developed to prove up the near-surface supergene mineralisation at Sulphur Springs, which is currently scheduled for early next year.

While the development of the sulphide resources at both Whim Creek and Sulphur Springs remains our primary longer term objective, the Company also received during the year $780,000 under its agreement with Blackrock Metals which is reprocessing the existing heap leach at Whim Creek which is operated by our partner, Blackrock Metals.

I would like to acknowledge the continued support of key shareholders including Northern Star Resources which contributed strongly to the recent $5 million capital raising which brought a number of new shareholders onto the register.

I think it’s fair to say that the new shareholders and investors share a view with the Board that Venturex has an outstanding zinc and copper asset portfolio which is ideally placed for development at a significant turning point in the base metals price cycle.

Many of you would be aware of the positive outlook for the zinc market, underpinned by a growing supply deficit as the impact of recent major global mine closures accelerates. Zinc has been one of the best performing commodities of the year so far, with the price up more than 50 per cent since this time last year.

In recent weeks, copper has followed suit with prices jumping more than 20 per cent to peak recently at over US$5,600 a tonne, the highest level in over a year.

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Clearly there is a growing consensus that the base metals sector has turned the corner and that, as an aspiring base metals miner, Venturex can look forward to better times ahead. Our challenge now is to capitalise on this opportunity by advancing our projects to production and cash-flow quickly.

In conclusion, I would like to thank Venturex staff and consultants – led by John Nitschke – for their efforts over the past year.

Thank you for your attention.

TONY KIERNAN CHAIRMAN

For further information, please contact:

Investors

John Nitschke / Trevor Hart Media: Venturex Resources Limited Nicholas Read – Read Corporate Ph: +61 (08) 6389 7400 Ph: (08) 9388 1474 Email: admin@venturexresources.com Email: info@readcorporate.com.au

About Venturex Resources Limited

Venturex Resources (ASX: VXR) is a rapidly growing Australian zinc company which is focused on the exploration and development of its two advanced zinccopper projects located near Port Hedland in the premier Pilbara mining province of Western Australia. After recently completing a $5 million capital raising, Venturex has embarked on a major new drilling program aimed at further expanding its resource inventory, which comprises more than 900,000t of contained zinc and 320,000t of contained copper.

Its initial exploration focus is on extending the existing high-grade zinc, copper and lead resources at the Whim Creek Project, where it has identified a range of targets adjacent to the Salt Creek and Mons Cupri deposits. Drilling commenced in late August and will continue through until the end of the year, generating strong ongoing news-flow. The successful extension of the known Resources at Whim Creek will result in a project that is compelling at spot prices. The existing infrastructure at Whim Creek means that any such project could be producing zinc, copper and lead concentrates during the first half of calendar 2018.

Venturex is continuing to progress permitting and pre-development activities for its Sulphur Springs Project, one of the most significant undeveloped zinc deposits in Australia. On-going value engineering of the 2013 Feasibility Study has resulted in a potential low-risk copper-zinc project with attractive economics and a proposed low-CAPEX Stage 1 development based on a near-surface high grade supergene copper zone.

Venturex also receives an ongoing income stream from a profit share in an SX/EW heap leach operation recovering copper from the heap leach dumps at Whim Creek. Venturex received $780,000 in FY2016 from 990,000t of copper metal production. This cash flow covers the bulk of the Company’s overheads and is expected to continue for the next 2-3 years.

About Zinc

Zinc is a blue-grey metal which readily forms alloys with metals including copper, aluminium and magnesium. Zinc is primarily used for its corrosion resistance in galvanising which accounts for approximately half of global zinc consumption. Galvanised materials (commonly iron and steel) are used extensively in transport, construction and appliance manufacturing purposes. Metallic zinc is also used in dry cell batteries, die-casting, roof cladding and in the production of zinc oxide.

Zinc demand is dominated by China at 6.9Mt or 49%. Global consumption is forecast to grow at a CAGR of 2% over 2016-2020, with the strongest demand growth coming from China at 2% and also the US and India. Following recent mine closures and this increasing demand growth, the current zinc market is tight with declining global inventories and a supply deficit forecast in coming years. Zinc prices have responded accordingly rallying above the top of the global mine cost curve. The concentrate market also reflects this supply tightness, with smelters materially discounting treatment charges.

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