asx emerging companies conference london
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ASX EMERGING COMPANIES CONFERENCELONDONMarch 2010
No representation or liability: No representation or warranty is made as to the fairness, currency, accuracy, completeness, reliability or reasonableness of this presentation, or any opinions, conclusions and forward‐looking statements it contains or any other information which Aquila provides to you (whether in this presentation or otherwise). Except to the extent required by law, Aquila Resources Limited (“Aquila”) does not undertake to advise any person of any information coming to its attention (including, without limitation, correcting or updating information) relating to the financial condition, status or affairs of Aquila or its related bodies corporate.To the maximum extent permitted by law, Aquila and its related bodies corporate and officers, employees and advisers are not liable for any loss or damage (including, without limitation, any direct, indirect or consequential loss or damage) suffered by any person directly or indirectly as a result of relying on this presentation or otherwise in connection with it.
Forward‐looking statements: This presentation is heavily dependent on forecasts, projections or forward‐looking statements (together the “Forward‐looking Statements”). No representation or warranty is given as to the accuracy, completeness, reliability, financial feasibility, likelihood of achievement or reasonableness of any Forward‐looking Statements contained in the presentation. Forward‐looking Statements are by their nature subject to significant uncertainties and contingencies and no representation is made that any Forward‐looking Statements will come to pass.
Seek your own independent advice: Do not rely on this presentation to make an investment decision. This presentation has been prepared without consideration of your objectives and needs (including, without limitation, the need if any for the information to be accurate, reasonable, complete or reliable) and financial situation. You should make your own independent assessment of the information in the presentation and seek your own independent professional financial, taxation and legal advice in relation to the information and before taking any action in relation to any matter contained in the presentation.
Not an offer: This presentation is not intended to be an offer for subscription, invitation, solicitation or recommendation with respect to securities in Aquila in any jurisdiction. Without limiting the foregoing, this presentation is not intended as an offer, invitation, solicitation or recommendation with respect to the purchase or sale of any security in the United States, United Kingdom or Australia or to any person to whom it is unlawful to make such an offer, invitation, solicitation or recommendation. No shares or other securities in Aquila have been nor will be registered under the US Securities Act. This presentation does not constitute an advertisement for an offer or proposed offer of securities. It is not intended to induce any person to engage in, or refrain from engaging in, any transaction.
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Disclaimer
Aquila Resources Limited
Currently in the ASX 200
Focused on coking coal, iron ore and manganese projects in the world’s best locations
Solid balance sheet with experienced management focused on generating shareholder value
Strategic Cooperation with Baosteel Group Corporation
Current FX hedging:‐ 09/10 USD20M at 86 cents ‐ 10/11 USD40M at 85 cents
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Aquila – 5 Years Forward
COMMODITY / Project CAPACITY AQUILA’S SHAREIRON OREWest Pilbara Iron Ore – CID
– BID 30.0 Mtpa10.0 Mtpa
12.0 Mtpa5.0 Mtpa
Thabazimbi (South Africa) 2.5 Mtpa 1.9 MtpaTotal 42.5 Mtpa 18.9 Mtpa
MANGANESE (South Africa)Avontuur 1.0 Mtpa 0.74 MtpaCOAL * (Queensland)Isaac Plains 2.8 Mtpa 1.4 MtpaEagle Downs – Stage 1 4.0 Mtpa 2.0 MtpaWashpool 1.6 Mtpa 1.6 Mtpa
Total 8.4 Mtpa 5.0 Mtpa* Assumes Belvedere Coal option is exercised or the asset is sold
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West Pilbara Iron Ore Project
Aquila has, through its 50% API JV, assembled an iron ore footprint of around 9,350km2 of tenements in the Pilbara
JORC(1) Resources of 742 million tonnes have been identified
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West Pilbara Iron Ore Project
Stage 1 of the Project is based on a mine producing at least 30Mtpa from the Channel Iron deposits
DFS engineering studies were 88%complete as at January 2010
Pre‐Feasibility Study underway for an additional 10Mtpa of Bedded Iron from the Hardey deposit
Memoranda of Understanding signed with 22 Chinese, Japanese and Korean steel mills
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DFSFinanceApprovalsConstructionProduction
Jun 10 Jun 11 Jun 12 Jun 13 Jun 14
Pilbara Infrastructure
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Current Pilbara rail and port infrastructure is controlled by BHPB, FMG and Rio Tinto
The West Pilbara Iron Ore Project to construct 275km of new railway to connect the Project with a new port at Anketell Point
The Project rail and port infrastructure will be available for tonnages other than that required for the Project
Anketell Point
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The West Pilbara Iron Ore Project has been studying Anketell Point for 2 yearsA Public Environmental Review document will be submitted in March to the Environmental Protection AgencyThe State Government has recently approved the development of the Anketell Point port facilitiesThis port has capacity to be expanded up to 350Mtpa
Aquila – 74%Opportunity for 1‐3Mtpa of sales of Thabazimbi ore using existing rail infrastructureTransnet Study on rail capacity for export
Thabazimbi Iron Ore Project
Drilling continues to intersect high grade iron ore zonesResource Statement due in Q2 2010
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Avontuur Manganese Project
Aquila – 74%
New basin north of the Kalahari Manganese Field
Current Inferred Resource(2)totals 34Mt at 40% Mn in two deposits
A restated Gravenhage Resource Statement is due in Q2 2010
Aquila is participating in the Manganese Industry Forum (MIF)
Transnet and the MIF are evaluating two export options‐ Coega (near Port Elizabeth)‐ Saldanha Bay
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Ports under consideration by Transnet
Avontuur Manganese Project
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Significant potential to expand the current resource within the current block model and along a further 10km of Avontuur Basin edge
Explorationupsidepotential
Isaac Plains Coal Mine
Aquila – 50%
Coal quality ‐ 25% Semi Hard Coking Coal
50% PCI25% Thermal Coal
Well located near regional infrastructure
Record coal sales of 775,445 tonnes in Q2 FY2010
Coal exported through Dalrymple Bay Coal Terminal with planned expansion tonnage covered by contract
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Year ending June 2007 2008 2009 2010(7 mths)
Overburden ('000m3)
4,870 7,870 15,340 13,890
ROM Coal(‘000t)
631 1,529 1,984 1,859
Coal Sales (‘000t)
410 1,057 1,271 1,644
Isaac Plains Coal Mine
Production ramping up to 3.6Mtpa ROM (2.8Mtpa product) as regulatory approvals are received
Mine consolidated under single mining and processing contracts
Resource will support another 17 years of production
New Environmental Approval being granted following the completion of an Environmental Impact Statement process to allow:
Increase in ROM production to 3.6Mtpa (CHPP capacity)
Construction of dragline
Approval of Mining Leases for Isaac Plains South
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Aquila – 50%Coal quality – hard coking coal in three
target seamsMeasured and Indicated Resource for Harrow Creek Upper seam covers 90% of the mining plan for the payback period
Eagle Downs Hard Coking Coal Project
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Summary of In situ Resources(4) by Seam (million tonnes)
As at February 2010Seam Measured Indicated Inferred TotalQ 33.5 18.5 45.0 97.0HCU 103.5 47.5 26.5 177.5HCL 129.0 63.5 187.5 380.0DY 72.3 45.0 86.0 203.3DY ‐ PCI 1.0 4.5 31.0 36.5Total 339.5 179.0 376.0 894.3
LocationProven
Reserves(4)
(Mt)
ProbableReserves(4)
(Mt)
Recoverable Reserves(4)
(Mt)
HCU 24 17 41
HCL 46 26 72
DY 29 17 46
Total 99 60 159
Base Case – Single longwall producing up to 4.6Mtpa
Mining Lease approvals expected by Q4 2010
Bankable Feasibility Study due in April 2011 with first development coal expected in 2012
First longwall operating in 2014 at up to 4Mtpa
CAPEX estimate of $988M with an OPEX of $71 per tonne (exc. royalties)
Potential for installation of a second longwall for up to 8Mtpa at full production
Eagle Downs Hard Coking Coal Project
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BMA Peak Downs Mine
Washpool Hard Coking Coal Project
Aquila – 100%Coal quality – Hard coking coal
Open cut targeting 4m of coal from 15m to 65m depth
Feasibility Study due for completion in Q1 2010
Mining and processing of 4Mtpa ROM producing 1.6Mtpa of product coal
MDL application lodged and environmental processes underway
Port capacity at Wiggins Island and QR rail capacity under consideration
In situ Resources(5) (million tonnes)
Indicated Inferred Total
All seams 33.8 104.3 138.1
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(1) The information in this report that relates to the Hardey, Trinity Bore, Kumina Creek and Robe Exit Mineral Resources is based on information compiled by Mr Stuart H Tuckey. The information in this report that relates to the Catho Well, Catho Well North, Cardo Bore East, Cardo Bore North, Cochrane, Jewel, Kens Bore and Upper Cane Mineral Resources is based on information compiled by Mr Stuart H Tuckey, Dr Sia Khosrowshahi and Mr Jani Kalla who are members of the Australasian Institute of Mining and Metallurgy. Mr Tuckey is full‐time employee of the API Management Pty Ltd. Dr Khosrowshahi and Mr Kalla are full‐time employees of Golder Associates Pty Ltd. Messers Tuckey, Khosrowshahi and Kalla have sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which they are undertaking to qualify as Competent Persons as defined in the 2004 Edition of the ‘Australasian Code of Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Tuckey. Dr Khosrowshahi and Mr Kalla consent to the inclusion in the report of the matters based on their information in the form and context that the information appears.
(2) The information in this presentation, insofar as it relates to Mineral Exploration activities, is based on information compiled by Brent E Green who is a member of the Australian Institute of Geoscientists, and who has more than five years experience in the field of activity being reported on. Mr Green is a full‐time employee of the Company. Mr Green 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 a Competent Person as defined in the 2004 Edition of the ‘Australasian Code of Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Green consents to the inclusion in the presentation of the matters based on the information in the form and context in which it appears.
(3) The information in this presentation that relates to the Isaac Plains Project Resource Statement has been based on information compiled by Mr Graeme Hewitt and Mr Mal Blaik who are members of the Australian Institute of Mining and Metallurgy. Mr Hewitt is a full time employee of Vale Australia and is seconded to the Bowen Central Coal Management to manage the exploration and evaluation of a series of project interests held by Aquila Resources Limited and Vale Australia including Isaac Plains. Mr Hewitt is a qualified Geologist (BSc (Hons) University of NSW, MBA (University of Queensland) and a Fellow of the Australasian Institute of Mining and Metallurgy and as such qualifies as a Competent Person under the JORC Code. Mr Hewitt holds shares in Aquila Resources Limited. Mr Blaik is a Principal Consultant of JB Mining Services Pty Ltd. Mr Blaik is a qualified geologist (BSc App Geol (Hons) University of QLD, 1979) and is a member of the Australasian Institute of Mining and Metallurgy and as such qualifies as a Competent Person under the JORC Code. Mr Hewitt and Mr Blaik consent to the inclusion in the presentation of the matters based on their information in the form and context in which it appears.
Competency Statements
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(4) The information in this announcement that relates to the Eagle Downs Resource Statement has been based on information compiled by Mr Mal Blaik who is a member of the Australasian Institute of Mining and Metallurgy. Mr Blaik has over 30 years experience in geology and over 20 years experience in coal resource evaluation. Mr Blaik is a Principal Consultant of JB Mining Services Pty Ltd. Mr Blaik is a qualified geologist (BSc App Geol (Hons) University of QLD, 1979) and is a member of the Australasian Institute of Mining and Metallurgy and as such qualifies as a Competent Person under the JORC Code. Mr Blaik consent to the inclusion in the announcement of the matters based on their information in the form and context in which it appears.
The information in this presentation that relates to the Bowen Central Coal Management Pty Ltd mining lease reserves, is based on information prepared by staff of Bowen Central Coal Management Pty Ltd and reviewed by Mr Geoffrey Watson, who is a member of the Australian Institute of Mining and Metallurgy. Mr Watson is a full time employee of Runge Ltd. Mr Watson consents to the inclusion in the presentation of the matters based on their information in the form and context in which it appears.
(5) The information in this presentation that relates to the Washpool Coal Project, is compiled by Mr Blair Richardson and modelled and reviewed by Mr Lyon Barrett. Mr Richardson is a previous employee of Aquila Resources Limited, with 25 years experience in geology and over 15 years experience in resource evaluation. Mr Richardson is a member of The Australasian Institute of Mining and Metallurgy and 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 a Competent Person as defined in the 2004 Edition of the JORC Code. Mr Richardson holds shares in Aquila Resources Limited.
Mr Barrett is a full time employee of Salva Resources and has over 15 years experience in geology and over 10 years experience in resource evaluation. Mr Barrett is a member of The Australasian Institute of Mining and Metallurgy and 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 a Competent Person as defined in the 2004 Edition of the JORC Code.
Mr Richardson and Mr Barrett consent to the inclusion in the presentation of the matters based on this information in the form and context in which it appears.
Competency Statements
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