presentation given by managing director andrew woskett at qld exploration council explorers'...
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MD presentation in QldTRANSCRIPT
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A Standout Junior Miner July 2014
Minotaur Exploration Limited | ASX: MEP
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Standout? - a compelling investment case
Copper-gold in QLD
Currently drilling new, shallow, copper-gold targets west of the high-grade Eloise mine
Nickel-gold in WA
Tenements host standout examples of nickel sulphide mineralisation
Targets include known deposits and multiple untested geological, geochemical and geophysical targets
These options present a compelling new exploration opportunity, particularly in the rising nickel price environment
Minotaur’s focus is on core copper-gold assets & new nickel options
and coupled with Minotaur’s discovery track record, sound management capabilities, strong cash position, multiple JVs contributing to annual expenditures and highly
regarded mining industry shareholders, creates a compelling investment case
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Minotaur standouts amongst junior miners
Financial Information Number of shares 152.2m
Share price (25-Jul-14) A$0.14
Market capitalisation A$21.3m
Cash (30-Jun-14) A$4.8m
Enterprise value A$16.5m
Note: 12.5m unlisted options (exercise prices A$0.21-0.55)
About Minotaur Exploration (ASX: MEP)
Primary focus on copper and gold exploration in QLD Secondary focus on advanced nickel prospects in WA Actively monetising non-core assets (listed investments,
magnetite, industrial minerals) Core geology team responsible for Prominent Hill discovery is
still with Minotaur Clean capital structure (no debt, limited options, only 152m
shares on issue) with high profile share register and supportive JV partners
JV Partners JOGMEC Japan Oil, Gas and Metals National Corp (Japanese government entity)
Mitsubishi Mitsubishi Materials Corp & Mitsubishi Corp
Sumitomo Metals Mining Oceania Major global metals player
Sandfire Resources Major Australian copper-gold producer
GFR Cornerstone private investor and alliance partner
Major Shareholders Norilsk Nickel 7.1%
OZ Minerals 5.3%
Newmont Capital 3.5%
GFR 2.8%
Other major shareholders: FMR Investments Sandfire Resources Locantro Capital
5.8%
Directors 3.2%
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Relative Share Price Performance
MEP daily volume S&P/ASX Small Resources Index MEP share price
SUSTAINED OUTPERFORMANCE
Share price (A$) Volume traded (m)
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Minotaur recovers approximately 50% of its annual operating expenses through joint venture arrangements Strategic alliances with high profile international partners expand Minotaur’s project capacity and help minimise cash drain
Note: 1. Chart totals correspond to quarterly exploration + administration expenditure by Minotaur upfront Source: Appendix 5B’s
Innovative funding model
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Minotaur net spend R&D tax incentive Grants + interest JV repayments
FY12
FY13
FY14
Minotaur annual exploration & admin costs by funding source (A$m) 57% (of reported exploration & admin expenditure)
47%
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43% (Minotaur net spend)
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“The Prominent Hill copper-gold deposit, discovered in 2001 by Adelaide based Minotaur Exploration, was a stand-out greenfield discovery in Australia” OZ Minerals, owner and operator of Prominent Hill copper-gold mine
Prominent Hill region was identified as an IOCG province in the late 1980s, but it wasn’t until 2001 that Minotaur Resources (ASX: MNR) intersected economic mineralisation
By 2004 the scope of the project was becoming clear and Oxiana (now OZ Minerals) acquired the Prominent Hill deposit, while MNR’s remaining assets were spun off into Minotaur Exploration (ASX: MEP)
Shareholders received 1.85 Oxiana shares and 1 MEP share for each share held in MNR before the Prominent Hill transaction, equivalent to A$2.29 per share (2,190% higher than MNR’s share price pre-discovery)
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Jan-01 Apr-01 Jul-01 Oct-01 Jan-02 Apr-02 Jul-02 Oct-02 Jan-03 Apr-03 Jul-03 Oct-03 Jan-04 Apr-04 Jul-04 Oct-04
MNR share price (A$)
Minotaur acquires remaining 81% for A$12m in cash and
shares
Scheme of Arrangement with Oxiana attributes value of A
$98m to Minotaur’s equity share of Prominent Hill
First drill results confirm Minotaur’s
interpretation
Recognising geophysical similarities to Olympic Dam,
Minotaur begins to earn a 19% interest at Prominent Hill (in JV alongside Billiton earning 51%)
ONE GOOD REASON TO OWN
MINOTAUR (the same core
geology team remains in place)
Source: IRESS, company filings
Minotaur’s role in Prominent Hill discovery
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Geographic focus is Australia
NON-CORE ASSETS All iron ore and industrial minerals
projects are actively being prepared for divestment Mutooroo Iron
Poochera Kaolin Lake Purdilla Gypsum
OTHER ASSETS SA Copper-Gold SA Base Metals
VIC Copper-Gold
Clear focus on copper-gold assets in QLD and nickel prospects in WA SECONDARY FOCUS
Nickel-Gold (WA) Leinster: multiple targets located in
database to be pursued Scotia: known deposits to be drilled
to define JORC resources Kambalda West: high tenor nickel
deposits under historic mines
PRIMARY FOCUS Copper-Gold (QLD)
Cloncurry JV: continues on IOCG targets
Eloise JV: inaugural diamond drilling underway
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Core assets: copper-gold portfolio MEP’s primary focus is its strategic Cu-Au ground position around Cloncurry Minotaur recognised Cloncurry region as an emerging IOCG province Extensive land position strategically acquired over several years – around
known Cu-Au mining centres: Ernest Henry (adjacent to Ernest Project) Eloise (adjacent to Elrose Project) Osborne (adjacent to Osborne Project)
In-house technical expertise has been successfully applied to geophysical target identification under deep and conductive cover, revealing multiple, potentially mineralised anomalies
Investigatory drilling proves Minotaur’s geophysical technique to be a valid discovery tool
Eloise Copper JV JV partner spending A$6m over 4 years to earn 50% Minotaur is Operator/Manager Tenements highly prospective for Eloise style high-grade Cu-Au deposits EM-generated conductive plates modelled and selected for first-pass drill
investigation First-pass diamond drill campaign underway; initial results due late July Follow-up drilling to be determined
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Core assets: nickel portfolio Advanced nickel sulphide prospects on proven, fertile ultramafic belts Leinster JV (MEP 85%)
Multiple nickel targets identified from a massive historic exploration database acquired through Breakaway Resources Large tenement package ideally located over mineralised ultramafic units On strike from historic mines and Tier 1 nickel projects Estimate replication of database alone would require over 10 years of intensive
exploration and cost in excess of A$30m Ground along the Nickel belt is tightly held and rarely available
Scotia (MinAuSol of which MEP 50%) Small historic nickel sulphide resource established at St Patricks Multiple drill holes into adjacent St Andrews deposit represent an advanced
stage prospect with walk-up drill positions established Modern ground EM to cover both targets and refine geometry of drill intersected
ultramafic units will be underway in August
Kambalda West Minotaur holds nickel rights over 10 tenements owned by Tychean Resources
(TYK) High-grade Ni-Au assays published 23 July 2014 Additional deposits waiting to be drilled to JORC standard
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Share price catalysts
Actively drilling at Eloise Targets identified by aerial and ground EM surveys in 2014 represent significant copper-gold discovery potential
Inaugural drilling campaign underway, initially testing targets at 50-150m depth Initial results will be published late July
Drilling of additional targets will be considered based on results of initial drill campaign
Exploration on advanced nickel portfolio in WA Historic nickel database reveals multiple nickel sulphide targets and drill defined mineralisation, all of which have received little follow
up
Modern EM to be applied to Saints deposits to extend boundaries of known mineralisation and test for new conductors new assay results from West Kambalda report high tenor nickel sulphide mineralisation beneath historic 5B mine
Sale of non-core assets Magnetite, gypsum and kaolin projects being prepared for sale
Listed investment developments Minotaur’s listed investment portfolio provides discovery upside and monetisation potential on liquidity events
New opportunities Minotaur is actively reviewing major Australian copper-gold acquisition opportunities with its alliance partners
Advanced stage to ready-to-mine and/or in-production opportunities being targeted
Minotaur expects substantial news flow over the coming months
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A compelling investment case
Enviable record of exploration success – core geology team responsible for Prominent Hill discovery is still with Minotaur
Significant exploration potential given focus and quality of core assets
Innovative funding model underpinned by strategic JV alliances
History of responsible capital management with strong balance sheet and clean capital structure
High profile share register and supportive JV partners
Clear asymmetric payoff profile given implied value currently ascribed to Minotaur’s strategic copper-gold portfolio and advanced nickel assets is only A$1.3m
Actively monetising non-core assets to realise additional value for shareholders
Substantial news flow over the coming months
Minotaur is a standout junior miner on the ASX
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APPENDIX – Nickel Assets
Middle-stage (established mineralisation) ultramafic NiS-Au systems
Advanced-stage (brownfields) ultramafic NiS-Au systems
Mineral Resource estimates stated herein are as reported by previous operators according to JORC principles then applying. The estimates have not been re-compiled in accordance with JORC 2012 edition as the data remain unaltered in all material aspects.
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Nickel asset development
Leinster define and test multiple targets, establish upside potential to attract sizeable JV earn-in partner.
Scotia refine Saints Nickel deposits, move to JORC, establish mining proposal (in conjunction with 50% partner).
Kambalda West follow up on new & significant Ni-Au assays at 5B mine (MEP holds Ni Rights and 1.5% gold NSR over 10 TYK tenements).
Launching an inaugural work programme
Work programme duration: August 2014 – Dec 2015
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WA Nickel assets: in the Tier 1 nickel district
Leinster 285km2 of mafic/ultramafic greenstones bounded
by regional scale crustal faults (MEP 85%)
Scotia 187km2 of mafic/ultramafic greenstones along the
Bardoc Shear Zone (MEP 50%)
Kambalda West Nickel Rights over Tychean Resources’ (TYK)
tenements (10)
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Leinster: Tier 1 Nickel Province
Leinster tenements were originally compiled by LionOre and vended into Breakaway Resources
Ground in this region is possessively held with entry opportunities extremely limited.
Minotaur obtained a presence via its 2013 acquisition of Breakaway Resources
Minotaur’s tenure (red blocks) is situated along the Nickel prolific ultramafic belt
Past exploration identified multiple NiS geochem anomalism, EM conductors, Ni drill intersections and modest Ni resources, but with limited follow-up
Minotaur’s 2014 data re-compilation shows tenement NiS opportunity compels a modern approach to assess numerous known - but untested - targets
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Leinster: Wildara & Mt Clifford tenements
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Targets include:
large, untested EM plates in ultramafic units
offhole, downhole EM conductor
EM conductors in vicinity of Ni gossans
untested conductors near anomalous Ni intercepts
no ground EM coverage over known ultramafic units and/or basal contacts
no ground EM on ultramafic belt on strike from the mined Waterloo Nickel deposit
Leinster: multiple targets on the Nickel belt
Wildara group Mt Clifford group
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Scotia: Nickel mining province
Advanced ‘Kambalda style’ NiS exploration asset on a proven Ni mineralised ultramafic belt:
hosting multiple ore-grade NiS drill intersections
with a modest Ni resource blocked out
limited past efforts to expand the resource base
deposits are open at depth and along strike
multiple ‘walk-up’ drill positions available from database
significant upside potential on proximal but only partly tested ultramafic/basalt contacts
warrants an extensive modern EM programme to refine conductive plates & guide drilling
to establish JORC resources and mining scenarios
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Scotia: mining history and ore grade results Sco$a underground Nickel Mine: Ceased produc$on in 1977 produced 1.4Mt @ 2.2% Ni (to 360m depth) for 30,800t of contained Ni Main lode horizon truncated by fault Off-‐hole DHTEM conductor not yet tested New discovery poten$al
Saints Nickel targets: St Patricks Inferred Resource
o 135,600t @ 3.7% Ni (for 5,000t contained Ni)
St Andrews no resource calculated Western Contact no resource calculated Hinge zone at depth, not tested
Estimate prepared prior to JORC 2012 edition and not updated as facts remain unaltered in all material aspects
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Scotia: Saints mineralisation not closed off
Mineralisation remains open at depth and along strike
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Scotia: Saints Nickel discovery potential
Conceptual Target –
Hinge zone
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Scotia: Saints - potential along contact horizons
Western Contact St Andrews
Potential for discovery of Ni Sulphide mineralisation in
Hinge zone
300 metres
only 5% of prospective contacts have been drilled Western Contact mineralised in several locations
over 2km of strike
St Patricks and St Andrews deposits on Eastern Contact present excellent resource potential
07BSGD0030 0.34m @ 2.40% Ni 0.55m @ 6.29% Ni
07BSGD0048 27.45m @ 1.80% Ni 07BSGD0049 2.30m @ 2.64% Ni
07BSGD0015 2.0m @ 3.32% Ni 1.0m @ 4.76% Ni
St Andrews Hangingwall Zone
St Andrews Deposit
St Patricks Deposit Inferred Resource:
135,600t @ 3.70% Ni
07BSGD0047 1.90m @ 3.10% Ni Incl. 0.3m @ 5.29% Ni
07BSGD0038 1.0m @ 2.61% Ni
07BSGD0055 4.80m @ 2.81% Ni
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Kambalda West: Nickel Rights
Established NiS Mineralisation: 1A Mine 5A Mine Andrews Mine 5B Mine
20km South-West of Kambalda
MEP has 100% Ni rights over MTH’s ‘Spargos’ tenements & TYK’s ‘Spargoville’ tenements
4 historic mines produced 14,000t Nickel to 1993
all mined deposits remain open at depth
30km2 of underexplored tenements
no regional exploration since 2006
no drilling since 2008
mineralised deposits all located within granted Mining Leases
Nickel Prospects: Spargo South Burnham Kemble Gardiner
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Underground mining on 3 levels through 1991/92
No evidence of evaluation for extensions to depth or the West
Drilling in 2007/08 identified several pods West of the historic workings
Potential to increase both size and grade of the deposit
High Tenor Sulphides,
up to 9% Ni
Kambalda West: 1A Nickel Mine
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high grade deposit at base of historic oxide pit
Includes sulphide intercepts up to 13% Ni
Limited drilling beneath pit
Kambalda West: 5A high-grade Nickel deposit
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high grade Ni-Au deposit beneath historic gold pit
Nickel sulphide intercepts incl. 24m @ 1.53% Ni
Gold intercepts incl. 5m @ 9.7 g/t Au
Refer ASX release dated 23 July 2014 for full details
Kambalda West: 5B high-grade Nickel deposit
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Produced 7,800 tonnes Ni in 1970’s
Remnant oxide mineralisation exists near surface
Attractive near-term development prospect
Base of mine at 11 Level yielded highest grade ore: 2.5 – 3.0% Ni mineralisation continuous for over 200m
High Tenor - up to 20% Ni in massive sulphides
Historic drilling, while sparse, supports case for down-plunge extensions
Potential to extend the deposit at depth and along strike
Shallow Potential
Kambalda West: Andrews (5D) Nickel Mine
Down plunge
potential
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This presentation has been prepared by the management of Minotaur Exploration Limited (“Minotaur”, ASX: MEP) for the general benefit of analysts, brokers and investors and does not constitute specific advice to any particular party or persons. Information herein is based on publicly available information, internally developed data and other sources. Where an opinion, projection or forward looking statement is expressed in this presentation, it is based on the assumptions and limitations mentioned herein and is an expression of present opinion only. No warranties or representations are made or implied as to origin, validity, accuracy, completeness, currency or reliability of the information. Minotaur specifically disclaims and excludes all liability (to the extent permitted by law) for losses, claims, damages, demands, costs and expenses of whatever nature arising in any way out of or in connection with the information, its accuracy, completeness or by reason of reliance by any person on any of it. Where Minotaur expresses or implies an expectation or belief as to the success of future exploration and the economic viability of future project evaluations, such expectation or belief is expressed in good faith and is believed to have a reasonable basis. However, such projected outcomes are subject to risks, uncertainties and other factors which could cause actual results to differ materially from projected future results. Such risks include, but are not limited to, exploration success, metal price volatility, changes to current mineral resource estimates or targets, changes to assumptions for capital and operating costs as well as political and operational risks and government regulatory outcomes. MEP disclaims any obligation to advise any person if it becomes aware of any inaccuracy in or omission from any forecast or to update such forecast.
Information in this presentation that relates to exploration results for Minotaur Exploration Ltd is based on information compiled by Mr Ian Garsed, who is a full-time employee of the Company and a Member of the Australian Institute of Geoscientists (AIG). Mr Garsed has sufficient experience relevant to the style of mineralisation and type of deposits under consideration and to the activity that he has undertaken to qualify as a Competent Person as defined in the 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves” (JORC Code). Mr Garsed consents to inclusion of this information in the form and context in which it appears.
Competent Person’s Statement
Disclaimer
Disclaimer