Gus Simbanegavi Ferrex Plc

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Information about Gus Simbanegavi Ferrex Plc
Business & Mgmt

Published on March 18, 2014

Author: informaoz



2 Iron ore and manganese development in Africa  Company Overview  Iron Ore Projects Overview  Mabega Iron Ore Project: Gabon  Malelane Iron Ore Project: South Africa  Malelane Project Beneficiation  Orebody Type and Mineralogy  Beneficiation Model Development  Metallurgical Testwork  Malelane Process Flow  Future test work for Malelane  Malelane Project Outlook  Questions Presentation Content

3 Iron ore and manganese development in Africa Corporate Overview PROFILE AIM quoted iron ore (‘Fe’) and manganese (‘Mn’) development company focussed in Africa PROJECTS Iron Ore: Mebaga, Gabon & Malelane, South Africa Manganese: Nayega, Togo & Leinster, South Africa STRATEGY To advance low capex deposits, near infrastructure, which offer significant value uplift potential through resource delineation, into production VALUE 1. Low capital DSO iron at Mebaga – Anglo American to fund - Gabon 2. Near term manganese production and cashflow at Nayega - Togo 3. Larger, future company maker iron prospect at Malelane - SA

4 Iron ore and manganese development in Africa Corporate Structure

5 Iron ore and manganese development in Africa 1. Mebaga DSO Iron Ore Project - Gabon 6 assays to date Best Assay 66.03% Fe All holes intersected DSO material Land Position 309 sq km 82 per cent holding Binding Term Sheet Anglo American To fund exploration over 2 years Initial drill programme complete & mapping on-going to evaluate the 19km strike DSO Material ‘Oxide Exploration Target’ 90 – 150Mt @ 35 – 65% Fe Over 50% of known strike

6 Iron ore and manganese development in Africa Exploration Upside Total exploration target, for just 11km of 19km strike of BIF, of 630Mt to 1,050Mt @ 25 – 65% Fe, including 90 to 150Mt @ 35 – 65% of oxide target that will include DSO and bBSO material (easy to beneficiate)

7 Iron ore and manganese development in Africa Mebaga Iron Ore – On-going Exploration  Nine hole drill programme completed in Q4 2013 – best results include:  Detailed geological mapping of the entire 19km strike of BIF has recently recommenced to define additional drill targets  Portable XRF results up to 68% Fe recorded to date  Phase 2 of drilling will be aimed at better assessing the large- scale potential of Mebaga Close proximity to infrastructure to enable rapid advancement of DSO resource potential Hole From To Interval (m) Fe% NGDH002 0 25.8 25.8 57.8 NGDH003 10.44 48.2 37.76 53.4 NGDH004 6.1 29.15 23.05 56.5 NGDH006 12.4 26.2 13.8 60.2

8 Iron ore and manganese development in Africa Start-Up Operation  Gabon has excellent infrastructure  Sealed roads  Hydro plants  Operating Rail  Port  Plan to truck 100km south on upgraded main forestry road to Booue  290km rail to port – lease train sets  Tranship with Rotainer – similar to Ironbark in South Australia  Estimated FOB cost <$50/t

9 Iron ore and manganese development in Africa 3. Malelane Iron Ore Project – South Africa CAPEX US$139m OPEX US$53.5/t FOB Exploration Target 1,600 – 2,000Mt 28-30% Fe Incl 900 – 1,200 Mt 36-38% Fe Inferred Resource 139Mt @ 37% Fe Modelled on 1.1km of 14km Pre-Tax NPV: US$523m (10%) Pre-Tax IRR:72% Proximity to Infrastructure 6km and 170km From rail and deep water port of Maputo respectively

10 Iron ore and manganese development in Africa Malelane Iron Ore Project - Geology Malelane Inferred Resource at various cut-offs Cut- Off (%) Tonnes (m) Fe % CaFe % Al2O3 % SiO2 % P % S % LOI 1000 50 4.9 52.2 56.7 1.4 10.8 0.08 0.018 8.0 40 50.9 44.3 47.7 2.0 22.3 0.07 0.020 7.3 20 138.9 36.9 40.1 4.0 30.1 0.06 0.029 8.0

11 Iron ore and manganese development in Africa Malelane Scoping Study Results & Development  1.8mtpa output of iron ore fines, LOM16.6 years  Conventional open pit mining, strip ratio 1.55:1  Process plant crush and HPGR to 6mm, gravity separation  Concentrate conveyed to rail siding 6km away  Build a rapid load out station for rail loading at existing siding  Rail to Port of Maputo approx 170km. Requires port expansion to 20mtpa to free up capacity in the existing loading area Pre-Feasibility Study Physicals Scoping Study Economics  NPV @10% - 523USD m (pre-tax)  IRR 72% (pre-tax)  Capital Cost USD139m  Capital Intensity USD77/t  Operating Cost USD53.5/t FOB  Revenue USD 95/t FOB  Payback 1.9 years  Starter DSO operation Project Upside  Drill programme and preliminary metallurgical testwork confirmed potential for low capex iron-ore development at Malelane  Further detailed geological mapping of the Spago ridge by structural geological consultant completed to aid drill targeting to update the resource  Environmental Studies and Social and Labour Plan drafting has commenced in preparation for a mining licence application  Positive preliminary metallurgical testwork - very coarse grind size is optimal for pre- concentration to 57% Fe Larger, 3rd development project with strong economics – robust NPV, IRR and low capital intensity, as well as significant resource upside potential with only 1.1 km of the 14km BIF drilled

12 Iron ore and manganese development in Africa Malelane Capital Intensity *Source Macquarie March 2012 $0 $50 $100 $150 $200 $250 $300 Mt. Gibson Extension Hill Macarthur Minerals Ularring Atlas Iron North Pilbara African Minerals Tonkolili Phase I Malelane Cliffs Bloom Lake phaseII Atlas Iron McPhee Ck/SE Pilbara Fortescue Pilbara expansion London Mining Marampa IOC Carol Lake Northern Iron Sydvarangar Expansion ArcelorMittal Liberia project phase I&II Sundance Mbalam Alderon Kami Champion Fire Lake North Rio Tinto Simandou Northland Resources Kaunisvaara Rio Tinto Pilbara expansion BHP Billiton Inner harbour expansion Northland Resources Hannukainen New Millenium KeMag and LabMag Oceanic Hopes Advance ArcelorMittal Mont Wright Black Iron Shymanivske Aquila West Pilbara Macarthur Minerals Lake Giles BHP Billiton Outer harbour expansion Gindalbie Karara Grange Resources Southdown Adriana Lac Otelnuk

13 Iron ore and manganese development in Africa  Exploration target could support a significantly larger operation than outlined in the Scoping Study with >20mtpa possible  Ferrex to investigate magnetic lows (possible higher grade) and old Dumanene mine area for large tonnage, higher grade areas to underpin an expanded option  Current plans for additional rail capacity through Swaziland  Could look at a pipeline to the coast, would have very low operating costs. Malelane – The Bigger Picture

14 Iron ore and manganese development in Africa MALELANE IRON ORE PROJECT UNIQUE METALLURGY Case Study

15 Iron ore and manganese development in Africa  XRD analyses performed on the samples showed that the detectable crystalline phases present are quartz (SiO2), hematite (Fe2O3), goethite (FeOOH), mica and a clay mineral.  The hematite and goethite carry the bulk of the Fe. Malelane Orebody Type and Mineralogy

16 Iron ore and manganese development in Africa  Test work included coarse grinding with tabling and WHIMS (wet high intensity magnetic separation) and fine grinding with WHIMS. A final step tested was to apply reverse flotation to the WHIMS concentrate to upgrade the final product.  A final concentrate of 57.8 per cent Fe (62% CaFe) and 5.3 per cent Silica was achieved with flotation of a WHIMS concentrate. This process has however a high energy requirement process  A very unusual outcome of this work was that the coarser the grind, the better the overall recoveries of the iron. The coarsest grind size tested was 425 micron. It is believed this counter intuitive result is due to the predominate mineral being weakly magnetic goethite that required a certain critical size to be affected by the magnetic field.  Another point to note is the consistent grade of the product. It is not greatly affected by grind size. Initial Metallurgical Test work

17 Iron ore and manganese development in Africa WHIMS RESULTS - 10.00 20.00 30.00 40.00 50.00 60.00 70.00 80.00 90.00 425 250 150 45 GRIND SIZE RECOVERY % FE GRADE % 0.00 10.00 20.00 30.00 40.00 50.00 60.00 70.00 80.00 90.00 7000 11000 15000 20000 GAUSS SETTING RECOVERY % FE GRADE % RESULTS FOR 11000 GAUSS RESULTS FOR 425MICRON GRIND

18 Iron ore and manganese development in Africa  Based on the results of the Phase 1 testwork, it was decided to investigate coarser grind options.  The initial testwork and subsequent mineralogy showed that a large portion of the silica was tied up in a coarse fragment with a residual amount tied in the matrix of the iron at sizing of less than 10 micron. It is believed that this is why a constant grade material was produced at differing grind sizes.  Based on visual inspection of the core and the width of banding in the banded iron, it was decided to investigate a potential sinter feed product with material of less than 6mm in size. 2nd Batch of Metallurgical Test Work Done

19 Iron ore and manganese development in Africa  The size by assay work showed no preferential upgrade of the iron in any fraction, so whole re processing would be required Size by Assay SAMPLE Mass Fe g % Size mm 45.156 +4.0 289.2 43.259 +3.35 93.1 47.104 +2.0 221.7 45.676 +1.0 264.9 45.768 +0.71 104.0 44.645 +0.5 93.5 44.030 +0.25 165.7 43.541 -0.25 712.3 46.046

20 Iron ore and manganese development in Africa  DMS testwork on the plus 1mm size fraction worked well with a similar grade product to the phase 1 testwork being produced at plus 50% yields. 66% of the feed will report to this section with the remainder reporting to the -1mm section. DMS testwork on plus 1mm 0.000 10.000 20.000 30.000 40.000 50.000 60.000 70.000 80.000 90.000 100.000 2.8 2.9 3 3.1 3.2 3.3 3.4 SG FE GRADE % RECOVERY %

21 Iron ore and manganese development in Africa  Wet tabling testwork on the minus 1mm size fraction did not work well with off spec grade being produced at low yields. HLS testwork showed that the results should have been better than this, so various fines separation options were investigated. These included:  Flotation of the fines, with and without grinding  Spiral performance  Ludowici Reflux Classifiers  Recoveries or grades were not satisfactory using flotation or spirals DMS testwork on minus 1mm

22 Iron ore and manganese development in Africa  The Ludowici reflux classifer produced the best results of any separation mechanism tested.  This technology is currently employed in chrome and coal mines in South Africa  The technology uses laminar flow in the angled section to provide a better classification based on density alone rather than a combination of density and particle mass/size.  Testwork showed that a 53% recovery of the -1mm was achievable at a grade similar to the plus 1mm material Ludowici Reflux Classifier

23 Iron ore and manganese development in Africa  The testwork program showed that a more conventional high capital and energy process route of grinding the ore is not required for Malelane ore and that a simple crush and gravity separation process will deliver similar grades at acceptable yields.  This has resulted in capital and operating costs savings and greatly enhanced the NPV and IRR of the project  The deposit is unusual for South Africa with a high goethite and hence LOI content. It produces a product similar to FMG in Australia which ships 150mtpa  A sinter feed product with the following parameters was produced at a Fe yield of 58%. A value in use study shows that the product is comparable to a 62% Carajas fines in value for a steel mill Overall Testwork Results

24 Iron ore and manganese development in Africa Proposed Malelane Process Design • Closed circuit crushing with Jaw and Cone crusher down to passing -8mm . • Split into 2 streams coarse (- 8mm +1mm) DMS beneficiation • Fines (-1mm) Reflux classifier process • Total mass yield of 43% • Saleable Fe grade of 56.5%.

25 Iron ore and manganese development in Africa  Ferrex aims to progress the project to BFS over the next 2 years.  A large amount of work has been undertaken on the social and environmental aspects of the possible operation in preparation for a mining permit application  The unique style of the orebody resulted in a long and complicated testwork program that eventually yielded a very simple solution to maximise the economics of the project  Being well serviced by infrastructure (6km to rail and 170km to port), by having a simple mining method and processing method, the project produces very robust returns  The project is unique in South Africa for its geology and processing and highlights that there exists other iron ore opportunities outside the well known Sishen and Limpopo deposits that have better access to infrastructure and can economically be bought to market Malelane Project Outlook

26 Iron ore and manganese development in Africa Questions Questions???

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