Brian Rear, Millennium Minerals Limited - Discussing the Nullagine gold project maiden production run and prospects toward expansion

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Information about Brian Rear, Millennium Minerals Limited - Discussing the Nullagine gold...
News & Politics

Published on March 17, 2014

Author: informaoz

Source: slideshare.net

Description

Brian Rear, Chief Executive Officer, Millennium Minerals Limited delivered this presentation at the Mining the Pilbara 2013 conference. The conference aims to promote the sustainable development of mineral resources and the Pilbara region.

For more information, visit http://www.informa.com.au/miningthepilbara

MINING THE PILBARA JULY 2013

East Pilbara District – Western Australia 2

NULLAGINE GOLD PROJECT 3

MILLENNIUM MINERALS 4 CORPORATE SNAPSHOT ASX code MOY Market Capitalisation AU $61m Shares on issue 199M* MANAGEMENT BRIAN REAR Managing Director & CEO RICHARD HILL Chief Financial Officer SIMON POOLEY GM Operations PAUL O’CONNOR Site General Manager PIERRE MALHERBE Company Secretary BOARD PETER ROWE Chairman RICHARD PROCTER Director ROSS GILLON Director JOHN MORTON BRIAN REAR Director Executive director28 14 26.6 31.4 Institutional High Net Worth Retail IMC group EMERGING GOLD PRODUCER WITH A HIGH QUALITY TENEMENT PORTFOLIO IN THE EAST PILBARA DISTRICT OF WESTERN AUSTRALIA REGISTER BREAKDOWN * Post consolidation

STRATEGY 5 PURPOSE  Create a profitable mid-tier gold producing company  Generate value for shareholders whilst continually seeking additional opportunities to increase shareholder value through further development of organic growth opportunities KEY STRATEGIC TENETS Productivity and focus on Margins Keep it simple Strike a balance between sustaining the business and returning capital through dividends and organic growth Size is not a deterrent to excellence

NULLAGINE GOLD PROJECT 6  1.36 million ounce gold resource contained within 7 deposits on granted mining leases  The largest deposit, Golden Eagle contains 62% of the total Mineral Resource inventory CHARACTERISTICS Millennium Minerals ownership interest 100% JORC Mineral resources 1.36m ounces Ore Reserve 712,800 ounces Mine Life (approx) 8 years CIL Processing Plant Capacity 1.5 Mtpa Project construction completed September 2012  First gold poured September 2012  Hedge contracts in place provide price protection for 50% of forecast gold production at an average forward delivery price of $1,673 out to September 2015  6 months to June: gold poured 33,500 ounces, at C1 cost $794/ounce  Gross Margin $804/oz  EBITDA $22.6M  Repaid 20% of debt facilities, senior facility balance $36M

Key Elements  Dry Hire Mining Fleet – owner operate and manage mining  Mining and primary crushing – one shift per day  120 tonne and 80 tonne excavators, 777’s and 40t volvos - multiple pits  140 man accommodation village  113 direct employees, includes 7 head office and exploration  Zero lost time past 12 months  Corporate overhead 3%-5% revenue  Project Finance - $36M outstanding  Asset leasing facility - $6M outstanding

Process Plant – Design 8 Primary Crusher4 MW SAG Mill Leach Circuit Crushed Ore Stockpile Elution and Gold Room Expansion Capacity Extra Tanks Extra Mill 1.5Mt/year Carbon-in-leach Plant, single shift mining and primary crushing at start up

Nullagine Process Plant 9 Primary Crusher Leach Circuit Crushed Ore Stockpile Elution and Gold Room Mill Process Plant: Operates 10% -13% above design

Nullagine Process Plant 10 Primary Crusher Leach Circuit Crushed Ore Stockpile Elution and Gold Room Mill Process Plant: View from ROM Pad

OPERATING PERFORMANCE Focus on gross margin and productivity improvement Stick with the basics: low overheads, small corporate, spend money where it produces efficiency.

12 Ore Reserve Target Range Increase Through Aggressive Exploration Reserve 460kozs 567kozs 600kozs 800kozs 1000kozs Golden Eagle Shearers Otways All deposits Golden Eagle SW Little Wonder Gambols Hill EXPLORATION –ORGANIC GROWTH PATH The information relating to the terms “Target range” and “target grade” should not be misunderstood or misconstrued as an estimate of Mineral Resources or Ore Reserves as defined by the JORC code (2004) and therefore the terms have not been used in this context. It is uncertain whether further exploration or feasibility study will result in the determination of a Mineral Resource or Ore Reserve. Target 18 month timeframe 741kozs This is where we started Start up mine plan Ore Reserve Now

Strong Development Pipeline 13

*MML ASX Release - Resources & Reserves Upgrade Dec 2011 Proven Exploration Success Record 14

• Increased/first Mineral Resources at CCJV* & BCJV* (up 480,000 Ounces). Commencing first CCJV Ore Reserve. • 18,947m RC drilling completed YTD 2013; focus on Golden Gate prior to production commencement. • Drilling Highlights – very high grade shoots at D Reef*& All Nations* e.g. 9m @ 11 g/t Au from 57m including 1m @ 25 g/t Au, 19m @5.75 g/t Au from 57m, including 3m @ 31 g/t Au; – Strike & dip extensions defined at Golden Gate area & All Nations deposits; more likely as results compiled. • Updated Mineral Resource & Ore Reserve estimates for Golden Gate (ABCD Reefs) in progress, others to follow. *MML 2012 & 2013 ASX Releases Recent Exploration Milestones 15

Higher potential new prospects & deposits Close to current deposits & infrastructure (low development costs) CCJV: 2013 Mineral Resource updated to 105 kOz BCJV: 2014 maiden Mineral Resource 421 kOz 16

WELL PLACED TO DEAL WITH CHALLENGES 17  DECLINING GOLD PRICES  CONCERNS ABOUT BALANCE SHEET RISK  STRONG CASH BURN  INDUSTRY COST PRESSURE  LABOUR ISSUES  POLITICAL ISSUES - GOLD HEDGE CONTRACT OUT TO 2015 - STRONG CASH GENERATION AT THE OPERATING LEVEL - MINIMAL TO NO CORPORATE DEBT - STRATEGIC APPROACH TO PRODUCTION - FOCUS ON COST CONTROL – COSTS STABLE - SOLID LABOUR/TENEMENT CONTRACTS - STRONG NATIVE TITLE AND COMMUNITY ENGAGEMENT POSITION

INVESTMENT CASE  Greenfield development  Profitable under current market conditions – price protected out to late 2015 generates gross margin 40% to 60%  Multiple ore sources to draw on  Achieve guidance consistently – no surprises  Organic growth clearly visible  Management bias to operations and development  Strong value proposition – Almost 1:1 on cash flow multiples

MINING THE PILBARA JULY 2013

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