Forsys Investor Presentation October 2013


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Overview of Forsys Metals and flagship uranium project in Namibia

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Forsys Investor Presentation October 2013

  1. 1. Forsys Metals Investor Presentation October 2013 Marcel Hilmer, CEO TSX: FSY | FSE: F2T | NSX: FSY
  2. 2. FORWARD-LOOKING STATEMENTS Some of the statements contained in the following material are forward looking statements and not statement of facts. Such statements are based on the current beliefs of management, as well as assumptions based on management information currently available. Forward looking statements are subject to various risks, uncertainties and other factors that could cause actual results to differ materially from expected results. Readers must rely on their own evaluation of these uncertainties. This presentation uses the terms, “Measured Resources,” “Indicated Resources” and “Inferred Resources.” The Company advises investors that although these classification terms are recognized and required by Canadian regulations (National Instrument 43-101—Standards of Disclosure for Mineral Projects “NI43-101”), they are not recognized by the U.S. Securities and Exchange Commission. Investors are also cautioned not to assume that any part or all of the mineral deposits in these categories will ever be converted to Mineral Reserves. Investors are also cautioned that “Inferred Resources” have a great amount of uncertainty to their existence and economic feasibility. Additional information identifying the Company’s risks and uncertainties is contained in its filings available at Qualified Person Mr. Martin Hirsch, M.Sc in Geology and a member of the British IMMM, Chief Geologist for Forsys Metals Corp., is the designated Qualified Person responsible for the Company’s exploration programs. He is familiar with the methods for Quality Assurance and Quality Control specifically applicable to uranium. Mr Hirsch has sufficient experience that is relevant to the style and mineralization, type of deposit and the use of radiometrics in resource estimates as well as to the activity he is undertaking to qualify as a Qualified Person under NI 43-101. Investor Presentation | October 2013 | Page 2
  3. 3. Advancing Africa’s most compelling uranium project Investor Presentation | October 2013 | Page 3
  4. 4. OUR CORE FOCUS | NORASA • Advanced, fully permitted project in Namibia • Large compliant Resources and Reserves • Strong and improving economics • Production scheduled to commence in Q2 2016 Well positioned for positive uranium sector outlook Investor Presentation | October 2013 | Page 4
  5. 5. CAPITAL STRUCTURE Forsys Metals Shareholder Base 6.1% Insiders Shares Outstanding*: 109.8 M Options*: 2.7 M Warrants*: 2.0 M Fully Diluted*: 114.5 M 53.5% Retail Cash*: $4.0 M Share Price*: 40.4% $0. 35 Institutional 12 months range: Avg. volume (3 mths): Market Cap (diluted): $0.33 -$0.87 22.3 CAD $40.0M * as of June 30, 2013 Significant upside potential Investor Presentation | October 2013 | Page 5
  6. 6. POSITIVE URANIUM FUNDEMENTALS 30% • Global power consumption to grow 4% every year to 2020+ growth in nuclear power by 2020* *Global Data, March 2013 • 30 nuclear power countries expanding capacity • 45 nuclear-free countries looking to add nuclear power • Driven by rising fossil fuel costs and harmful emissions Driven by demand for affordable and clean electricity Investor Presentation | October 2013 | Page 6
  7. 7. URANIUM RECOVERY UNDERWAY China India Russia U.S.A Saudi Arabia World Total Under Construction 28 7 10 3 0 68 Planned 61 18 28 9 0 175 Proposed 118 39 18 15 16 314 Total 207 64 56 27 16 557 Operable 17 20 33 100 0 432 Growth led by emerging countries without domestic supply Investor Presentation | October 2013 | Page 7 557 New reactors to be built or under construction
  8. 8. DEMAND TO EXCEED SUPPLY 75,000 350,000 50,000 300,000 25,000 250,000 0 200,000 -25,000 150,000 -50,000 100,000 -75,000 50,000 -100,000 • Annual U3O8 demand ~170M lbs • Current production supply ~140M lbs • Gap filled by secondary sources will end late 2013 • HEU Agreement between U.S. and Russia 0 Net Balance World Supply World Requirements Strong fundamentals support $70/lb long-term analyst price forecast Investor Presentation | October 2013 | Page 8
  9. 9. NAMIBIA PROVEN URANIUM JURISDICTION th 5 largest global producer of uranium • Pro-business, stable democracy • Fair and balanced tax code • Metals: uranium, gold, diamonds, zinc, copper and lead Investor Presentation | October 2013 | Page 9 9% GDP derived from mining
  10. 10. NORASA | WORLD CLASS PROJECT • Consolidation of 3 zones: Valencia Main / Satellite Pit & Namibplaas • Extensive mineralization near surface • Open pit environment Total M&I: 96 Mlbs* Grade: 200ppm U 3O 8 * Total Measured & Indicated estimate at cut-off of 100ppm for Valencia and 170ppm for Namibplaas Opportunities for further resource expansion Investor Presentation | October 2013 | Page 10
  12. 12. EXCELLENT INFRASTRUCTURE Water Supply Power Supply Roads Buildings • The National Desalination Task Force confirmed additional water availability by end of 2014 • Approximating 20 million cubic metre capacity per annum • NamPower confirmed sufficient power supply capacity • New base-load generation is anticipated to be commissioned in 2015 • Additional power from Mozambique • 26 km of new access road linking Valencia mine to highway completed in mid 2010. Internal service roads have also been constructed • Semi-permanent village will be established 8 km from process plant Investor Presentation | October 2013 | Page 12
  13. 13. NORASA IN PERSPECTIVE 10 uranium 7520 Top 3386 3146 3065 2661 2289 producers 2135 2011 1955 in tonnes U3O8 Norasa’s operating potential - a re-rating opportunity Data from the World Nuclear Association. Investor Presentation | October 2013 | Page 13 1903
  14. 14. STRONG ECONOMICS $429M* Pre-tax NPV $35/lb* Cash Costs Basis for optimization and consolidation * SNOWDEN, Valencia Uranium (Pty) Ltd: Addendum to June 2009 Technical Report; Project No 696 dated January 2010 Investor Presentation | October 2013 | Page 14 * 2010 Snowden Valencia Technical Report
  15. 15. NORASA | Optimized / Expanded Plant* 2010 Base Case Updated to 2013 $ 2013 Engineering Cost Study Throughput 8.6M tonne/yr 11.2M tonne/yr Production 3.3M lb/yr 4.2 M lb/yr $23.66 $21.11 $241.6 MM $249.7 MM 3-Stage 2-Stage Milling 3 rod mills 1 SAG mill Revenue (loM) $3.5 billion $4.5 billion Process cost $/lb CAPEX (Plant) Crushing Differential NPV + $348 million * 2013 ECS was completed by AMEC and focused on the optimization of Norasa’s project economics. Includes Namibplaas and Valencia. See News Release: May 2, 2013 for details Progress through optimization and consolidation Investor Presentation | October 2013 | Page 15
  16. 16. VALENCIA ZONE | FULLY PERMITTED Permit Summary Permit Issued By Mining Licence (ML149) Ministry of Mines and Energy Accessory Works Ministry of Mines and Energy Environmental Clearance —Valencia Village Ministry of Environment and Tourism Environmental Clearance Ministry of Environment and Tourism Petroleum Consumer Installation Ministry of Mines and Energy Desalination Ministry of Agriculture, Water & Forestry Investor Presentation | October 2013 | Page 16 Status      
  17. 17. NORASA PROJECT SCHEDULE Investor Presentation | October 2013 | Page 17
  18. 18. MANAGEMENT Marcel Hilmer CEO & Exec. Director Rowen Colman Director Finance Mark Frewin VP Legal Affairs & Director Dag Kullmann General Manager & Project Engineer Martin Hirsch Chief Geologist 30 years of senior management experience with global public and private organizations, specifically with international mergers and acquisitions in Africa, Europe, Asia and Australia. A long standing member of the Institute of Chartered Accountants in Australia. Previously, with First Quantum Minerals Limited as a business development executive. A Chartered Accountant with over 25 years of successful senior financial management experience in various global industries and holds a Bachelor Degree in Commerce from the University of NSW, Australia. Previously, was the Development Director for a major sovereign wealth fund in the Middle East and guided the fund from start-up to a global powerhouse. A partner at the international law firm of McCarthy Tétrault, and based in their London England office. Focuses on energy and in particular mining and metals. Has participated in numerous international mine financings including several for companies which do business in Africa. Mr. Frewin is also a director of the Company and of IC Potash. A Mining Engineer (M.Sc. University of Alberta, Canada, 1989) with over 20 years of experience in the precious, base metals, diamonds, coal and uranium mining industry throughout Africa and within Asia and Europe. Acted as Qualified Person for several large and small mining companies for the completion of reserve reporting and listing documentation for the JSE, AIM, ASX and TSX. An experienced and professionally registered Geologist with a Master’s Degree in Geology from the Johan Wolfgang-Goethe University in Frankfurt A.M, Germany. Has more than 20 years of mining industry experience in opencast mining and exploration project management in uranium and diamonds. Previously with Rio Tinto’s Rössing Uranium Mineas Chief Geologist and Areva Resources Namibia. An experienced team – successfully delivering projects on time and within budget Investor Presentation | October 2013 | Page 18
  19. 19. DIRECTORS Independent Director & Chairman Graduated from the University of Western Australia with a Bachelor of Commerce degree in 1975. He worked as executive assistant to the Board of Directors of a large Australian public company from 1980 to 1984. He then established his own resource consulting and investment company and was involved as a shareholder, Director and Chairman of a number of Australian public resource companies before co-founding First Quantum Minerals Ltd in 1996. Thomas Allen A counsel to Ogilvy Renault LLP, an international law firm based in Canada, and has extensive experience advising numerous corporations on corporate affairs, corporate governance, corporate financings and reorganizations. Martin R. Rowley Independent Director Serves as President and Chief Executive Officer of Lithium One Inc. and Nevada Copper Corp. Has over 35 years of exploration and development experience and has been involved in raising over $200 million for various exploration and development projects since 1999. Paul Matysek Independent Director Claudio Cornini Independent Director Marcel Hilmer & Mark Frewin Founder and current Executive Director of Cornhill and Harvest Ltd. (C&H). Since 2008, C&H has focused on providing small cap and larger private companies with investment, corporate finance and M&A advisory services Prior to this, between 2004 – 2008, He served as Chairman of AAA Bank in Milan, Italy and concurrently, from 2007 to early 2008, he was in charge of the Network Desk at ABN AMRO in Italy. Details on previous management slide 100+ years of experience in African mining Investor Presentation | October 2013 | Page 19
  20. 20. VALUATION AGAINST PEERS $4.00 4.0 EV/lb ($) $3.50 $3.00 $2.50 $2.00 1.6 Average: $1.04 $1.50 1.0 0.8 $1.00 0.7 0.5 $0.50 0.4 0.3 0.1 $0.00 DML.T KIV.V UEX.T RSC.T LAM.T MGA.T FSY.T DYL.AX BAN.T Current EV and expected sector recovery provide attractive entry point Investor Presentation | October 2013 | Page 20
  21. 21. FORSYS INVESTMENT SUMMARY Poised to capitalize on uranium sector recovery Consolidated project in mining friendly jurisdiction Strong economics and low cost environment Advancing towards production Fully permitted with excellent infrastructure Experienced management team Investor Presentation | October 2013 | Page 21
  22. 22. CONTACT INFORMATION Investor Relations and Corporate Services Canada Joe Racanelli VP, TMX Equicom 31 Adelaide Street East Toronto, Ontario M5C 2K3 +1 416-815-0700 ext. 243 Australian Representative Office Marcel Hilmer, CEO 18 Richardson Street West Perth WA 6005 +61 8-9322-3549 Investor Presentation | October 2013 | Page 22
  23. 23. APPENDIX
  24. 24. LARGE COMPLIANT RESOURCE* Category Cut-Off Grades Tonnes [M] U3O8 [ppm] U308 [mlb] Val 60ppm: Nam 100ppm 27 153 9 Val 100ppm: Nam 160ppm 17 202 7 Val 140ppm: Nam 200ppm 10 253 6 Val 60ppm: Nam 100ppm 419 153 141 Val 100ppm: Nam 160ppm 221 197 96 Val 140ppm: Nam 200ppm 114 248 62 Val 60ppm: Nam 100ppm 447 153 150 Val 100ppm: Nam 160ppm 237 197 103 Val 140ppm: Nam 200ppm 125 248 68 Val 60ppm: Nam 100ppm 105 156 36 Val 100ppm: Nam 160ppm 50 198 22 Val 140ppm: Nam 200ppm 18 269 10 Measured Indicated Measured + Indicated Inferred * Based on updated Estimate of Resources – October 2013 Investor Presentation | October 2013 | Page 24
  25. 25. OPEN PIT DESIGNS Valencia Main & Satellite Namibplaas Valencia resource model displaying blocks of 200ppm plus within the updated preliminary pit outline. Namibplaas resource model displaying blocks of 170ppm plus within the updated preliminary pit outline. Investor Presentation | October 2013 | Page 25
  26. 26. ENGINEERING COST STUDY AMEC released an Engineering Cost Study Report dated May 2013. The scope of works included assessing a number of comminution flowsheet changes, optimizations and process plant Capex and Opex updates. The preferred option was a two-stage crush plus single stage SAG mill using acidic filtrate at a grind of P80 ~600 µm. Highlights include: • • • • • • • • Investor Presentation | October 2013 | Page 26 Differential NPV estimates increased by US$348m before tax Opex is significantly reduced from the adjusted 2010 engineering cost study (in 2013 dollars) Capex for the process plant is cost-effective at US$249.7m Leach residence time reduced significantly by 30% Increase in plant throughput from 8.7 Mt/a to 11.2 Mta An increase in average annual production from 3.3 Mlb to 4.2 Mlb U3O8 Plant availability increased from 88% to 91% Plant block model greatly simplified.