Sum Europe 2012 April15
Upcoming SlideShare
Loading in...5
×
 

Sum Europe 2012 April15

on

  • 576 views

Sumatra - Emerging Gold Producer

Sumatra - Emerging Gold Producer

Value Investment Opportunity

Statistics

Views

Total Views
576
Views on SlideShare
562
Embed Views
14

Actions

Likes
0
Downloads
1
Comments
0

2 Embeds 14

http://www.linkedin.com 13
https://www.linkedin.com 1

Accessibility

Categories

Upload Details

Uploaded via as Microsoft PowerPoint

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment
  • add missing data

Sum Europe 2012 April15 Sum Europe 2012 April15 Presentation Transcript

  • INDONESIA’S EMERGING GOLD PRODUCER April 2012 European Roadshow
  • DisclaimerThis document is prepared as a presenter‟s aid and support. It is not astand alone document. Best efforts have been taken to ensure theaccuracy of information contained at the time of presentation. In someinstances forward targets and/or assumptions have been included. All suchinstances are indicative only and subject to alteration and/or cancellationas and when the management of Sumatra Copper & Gold plc sees fit. Allinformation contained herein is general in nature.Potential investors are cautioned against using the content of thispresentation in isolation for making investment decisions.Research and the counsel of a qualified financial adviser or accountant arestrongly recommended to anyone considering investing in listed companysecurities, including Sumatra Copper & Gold plc.The information in this presentation that relates to Exploration Results,Mineral Resources or Ore Reserves is based on information compiled byMatthew Farmer, geologist, who is a Member of the Australasian Instituteof Mining and Metallurgy. Mr. Farmer is an employee of the Company whohas sufficient experience which is relevant to the styles of mineralizationand types of deposit under consideration and to the activity which he isundertaking to qualify as a Competent Person as defined in the 2004edition of the “Australasian Code for Reporting of Exploration Results,Mineral Resources and Ore Reserves”. Mr. Farmer has consented to theinclusion in this document of the matters based on his information in theform and context in which they appear.
  • InvestmentHighlightsTembang Other Company Attributes• Value Investment • Newcrest a major shareholder (7%)• 2013 Target production and JV partner• Low Risk Project – 2 Stage Dev. • Significant greenfields to – Combination of Open Pit & Underground brownfields land holdings of more than 3,200km² – Low Strip Ratio - Open Pit - at Asmar – High Grade Underground at Belinau • 100% ownership of 7 exploration – Brownfield Development permits (IUPs) across Sumatra – Excellent Metallurgy • Company has consistently – Simple Process Flowsheet demonstrated an ability to navigate• Management Team and manage new Indonesian Experienced Mining & Process Managers recently Mining Laws appointed to take project into production 3
  • Corporate OverviewCorporate 12 months share priceCode SUM $0.40Shares/CDIs issued* 190.6M $0.35 Unlisted options 22.8M $0.30 Fully diluted 213.4M $0.2552 wk high/low A$0.395 - A$0.11 $0.20 $0.15Share price A$0.12 $0.10Market cap ~$22M $0.05 $0.00Cash $6.5MDebt $5MAvg daily vol ~330,000Top shareholders Board and managementDirectors/Management 9.6% Warwick Morris Non-Exec ChairmanMacquarie Bank 9.2% Julian Ford Managing DirectorNewcrest 7.0% Adi Sjoekri Executive DirectorRand Merchant Bank 3.3% Peter Nightingale Non-Exec Director Jocelyn Waller Non-Exec Director Updated 13 April 2013 4
  • Development Strategy2-Stage Development Strategy for Tembang ProjectStage 1 – Short Term Plan Stage 2: Long Term planBelinau (O/P & U/G) & Asmar (O/P) Other Tembang deposits• Low risk, small scale mine • Commence production following• Belinau: High-grade vein system with strong completion Stage 1 exploration upside • Larger mine and throughput• Reduced upfront capital costs• Asmar: Perfect Oxide Blend for Belinau with • Implement Energy Cost Reduction Low Strip Ratio Strategy for Stage 2• Fund development and expansions from • Complete Deeper Exploration Cashflow Campaign to target doubling of gold• Production targeted for Q3, 2013 production.• Comprises 18% of total Tembang Resource 5
  • Sumatra’s Prolific Mineralisation Miwah 3.14 Moz Au, 9.0 Moz Ag Anjing Hitam Zinc and Lead MARTABE 5.8 Moz Au, 62.2 Moz Ag G Resources - Mkt Cap. $970 mil Sontang SIHAYO 1.4 Moz Sihayo - Mkt Cap. $120 mil Tambang Sawah Tandai 1.4 Moz Au, 15 Moz Ag TEMBANG 1.0 Moz Au 12.8 Moz Ag Sumatra Copper & Gold - Mkt Cap. $22 mil Donok 1.3 Moz Au, 7.4 Moz Ag Ojolali WAY LINGGO 0.2 Moz Au, 0.3 Moz Ag Kingsrose - Mkt Cap. $360 mil Cibaliung Pongkor 3.6 Moz Au, 26.3 Moz Ag
  • Project PortfolioTembang Project(100% SUM)• Advanced gold and silver projectTandai Project (30% SUM, 70% Newcrest)• Exploration JV project with NewcrestSontang Project (100% SUM)• High-grade exploration projectOther greenfield projects(100% SUM)• Exploration IUPs covering more than 1,370km2 7
  • Tembang Project: Overview Production 2013 – 2nd Half timeline 513,000 oz gold Total Reserve 5.6M oz silver (1) Total mine life 10 years Brownfield from Infrastructure previous production Open pit and Mine type underground Numerous regional Upside targets Aerial view of Tembang ProjectNote 1: refer to Appendix 1 for full Reserve and Resource Statement 8
  • Tembang Project Location& Infrastructure 9
  • Tembang Production Plan Asmar Open Pit Stage 1 Berenai/Central Area Stage 2 6 1 7 3 4 2Processing Plant 5 11 Workshop Stage 1 Proposed Tailings dam Stage 2 8 Magazine 10 Haulage Road Camp Site Belinau Underground Belinau Open Pit Deposit Stage 1 Stage 1
  • Belinau Open Pit - Expansion Optimised Belinau Pit Design Existing Pit New Pit The Two Stage Belinau Open Pit Cut Back provides for 18 months ore supply before underground high grade feed is required for the mill.
  • Tembang PFS & OptimisationKey Points to Note•Well defined Reserve: 150,000 metres drilling PFS Optimisation Update (April 2012)•High Grade Ore & Excellent Metallurgy means simplestandard process circuit Gold Equivalent 40,000 - 45,000 oz Au Production equivalent(1)pa•Brown Field Project: RecommissionTSF & Old Plant Site C1- Target Cash US$350 to•Combination of O/P and U/G – Flexible Production Options Operating Costs US$450 per Oz Au•12 months ore supply before U/G required ore required (including silver credits) Stage 1 - Target 218,000 oz Au Eq(1) Production LOM Mine life 5 years (stage 1) 400,000 tpa @ Production rate 2.5 g/t Au and 30 g/tAg Gold Recovery 90% Silver Recovery 80% Reserve in Stage 1 18% of Resource Production Plan Note 1: Please refer to Appendix 1 for gold equivalent calculation 12
  • Tembang 2012 Milestones PERMITTING Forestry •In-principle ApprovalAMDAL ✔ Mining ✔ Operational •Borrow and Use•Environmental • Technical Head - Pinjam PakaiManagement Plan Licence • Masterlists Manpower Decision•Environmental • Conversion of IUP • Electricity Generation •Collaborative to MineImpact from exploration • Explosives AgreementAssessment to mining • Local Permitting Q1 2012 Q1/Q2 2012 Q2/Q3 2012 Q3 2012 Q4 2012 Q1 2012 Q2 2012 Q3 2012 “Sumatra has met all Resource to Pre- ✔ Reserve ✔ Definitive its target milestones Feasibility Feasibility in 2012” Optimisation Stage 1 Stage 1 Report ✔ TECHNICAL 13
  • Epithermals –Long Life from Brownfield Exploration “The Indonesian mine (Gosowong) is a very rich mine. We currently have a five year reserve life. We had a five year reserve life ten years ago, we had a five year reserve life five years ago and I am anticipating that where we are going with exploration we will have another five year reserve life in another five years.” Greg Robinson, Managing Director - Newcrest Limited Melbourne Mining Club Address, February 2012 14
  • Tembang Exploration: Near Mine Targets ASMAR DEEP 4.15m @ 15.2 g/t Au, 24.0 g/t Ag BELINAU DEEP 1.95m @ 81.92 g/t Au, 208.0 g/t Ag BERENAI DEEP 15.15m @ 4.94 g/t Au, 5.0 g/t Ag 15
  • Valuation of ASX Listed Gold Companies(1)(EV / Resource Oz) “With Sumatra moving into production, there KRM is >350 $/Oz 350 is a opportunity for a major re-rating of the Valuation (EV/Resource Oz Gold Equivalent) companies valuation over the next 2 years” MML is 300 320 $/Oz 250 25% 50 75% % AR is 200 244 $/Oz 150 100 SUM is Sihayo 50 25 $/Oz 103 $/Oz 0 0 20 40 60 80 100 120 140 160 180 200 Gold Resources - Millions of Ounces Au Equivalent 16Note: Anglo Gold, Newcrest and Eldorado Gold & Gold One have been removed from the Goldnerds Database. Database is based in April 1, 2012 Update
  • Valuation of ASX Listed Gold Companies(1) (EV / Reserve Oz) Archipelago(1) 382 $/oz G-Resources 217 $/ozNote:Archipelago is based on their Mineral Inventory, not Reserve, 17Anglo Gold, Newcrest, Eldorado Gold & Gold One have been removed from the Goldnerds Database. Database is based in April 1, 2012 Update
  • Valuation of ASX Listed Gold Companies(1)(Net Cash Costs) 1,800 “Sumatra’s target cash costs is to be in the 1st Quartile. The high grade under ground 1,600 BelinauResoure (8 g/t Au and 70 g/t Ag) and low strip ratio of Asmar, < 1:3 should be major contributors to achieving a low cash 1,400 cost 25% 50% 75% Cash Costs ($/oz Gold) 1,200 1,000 SUM Target 800 350 to 450 $/Oz C1 Costs 600 G Resources -350 $/Oz 400 Archipelago-580 $/Oz MML & KRM 200 200 to 250 $/Oz C1 0 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000 Cumulative Gold Production - Millions of Ounces Au Equivalent 18
  • Valuation and Re-rating Potential 19
  • Tandai JV: Exploration SuccessNewcrest JV• JV Terms – Newcrest to spend US$12 million to earn 70% interest in the Project within 5 years – Newcrest has already met minimum expenditure of US$1.8 million – Sumatra currently managing project• 2011/12 – Budget of A$4.3 million – 2011: Heli-supported drill program targeting existing known epithermal systems – Target is to drill out one new mineralised vein system in 2012 – Identify one new greenfield discovery in 2012 and drill test it 20
  • Tandai: Ulukau Prospect - New Discovery Newly discovered Epithermal Stockwork 21
  • Summary• Soon to be “self funded explorer” – Emerging Producer - Gold and silver production targeted for 2013 – Two-stage development allows for relatively small initial capex• Tembang – Relatively low capital intensity – Production costs targeted for 1stquartile – Brownfields project means relatively low technical risk• Major competitive advantage in Sumatra – Large tenement position – Demonstrated capacity and ability to acquire projects, attract quality JV partners• News flow in 2012 – Tembang development milestones – Newcrest funded exploration at Tandai JV 22
  • Appendices 23
  • 1A: Tembang Project Resource Tembang Mineral Resource August 2011 Reported to JORC Code Standards Belinau Vein Above 2.78g/t Au Underground Cut-Off Category Ktonnes Au g/t Ag g/t Au koz Ag koz Measured 149 7.22 75.5 35 361 BELINAU Indicated 266 8.02 67.9 69 580 VEIN Inferred 72 10.50 81.4 24 188 The information in this report that relates to Mineral Resources is based on information compiled by Mr David Sub-Total 487 8.14 72.2 127 1,130 Stock MAusIMM who is an independent Geological All Veins Excluding Belinau Above 0.5g/t Au Open Pit Cut-Off Consultant to the Company and is a Competent Person as Category Ktonnes Au g/t Ag g/t Au koz Ag koz defined by the Australasian Code for the reporting of Measured 2,598 2.27 37.8 190 3,156 Exploration Results, Mineral Resources and Ore Reserves Indicated 4,423 1.80 25.6 256 3,637 (the JORC Code 2004 Edition) and has consented to theOTHER VEINS inclusion in this report of the matters based on his information Inferred 3,554 1.80 20.3 202 2,319 in the form and context in which they appear. In addition, the Sub-Total 10,575 1.91 26.8 648 9,112 Mineral Resource Estimates were reviewed by Mr. Robert PSV Material Above 0.3g/t Au Open Pit Cut-Off Spiers who is a member of AIG and a full time employee of Category Ktonnes Au g/t Ag g/t Au koz Ag koz Hellman & Schofield Pty Ltd. Mr. Spiers has sufficient Measured - - - - - experience which is relevant to the style of mineralisation and Indicated 11,323 0.54 6.9 198 2,523 type of deposit under consideration and to the activity which PSV he is undertaking to qualify as a Competent Person as Inferred 194 0.50 4.6 3 29 defined in the 2004 Edition of the „Australasian Code for Sub-Total 11,517 0.54 6.9 201 2,552 Reporting of Exploration Results, Mineral Resources and Ore Combined Total Resource Open Pit + Underground Reserves‟. Mr. Spiers has consented to the inclusion in this Category Ktonnes Au g/t Ag g/t Au koz Ag koz report of the matters based on their information in the form Measured 2,747 2.54 39.9 224 3,517 and context in which it appears. Indicated 16,012 1.02 13.1 522 6,741 ALL Inferred 3,820 1.90 20.7 229 2,536 Total 22,579 1.35 17.6 976 12,794 Note: Rounding errors may occur, reporting cut-offs as indicated, significant figures do not imply any added level of precision. 24
  • 1B: Tembang Project Reserve Reserve Tonnes Grade Contained Grade ContainedDeposit Category (kt) Au (g/t) Gold (oz) Ag (g/t) Silver (oz) Proven 650 1.7 35,000 24.0 498,000Asmar Probable 1,230 1.3 49,000 20.5 808,000 Proven 910 2.0 60,000 40.8 1,195,000Berenai Probable 980 2.1 67,000 23.6 740,000 Proven 560 2.5 45,000 40.9 735,000Buluh Probable 400 2.0 26,000 29.0 374,000 Proven - - - - -Aidit Probable 20 3.1 2,000 44.6 30,000 Proven 140 4.2 19,000 52.1 238,000Bujang Probable 50 2.3 4,000 26.0 40,000 Proven 90 5.5 16,000 68.4 196,000Belinau_OP Probable 60 3.4 6,000 53.2 97,000 Proven 50 8.7 15,000 74.1 130,000Belinau_UG Probable 360 5.0 59,000 39.3 458,000 Proven 2,400 2.5 190,000 38.7 2,991,000Total Probable 3,090 2.1 213,000 25.6 2,547,000 Total 5,490 2.3 403,000 31.4 5,539,000 25
  • 2. Sumatra BoardWarwick Morris Mr Morris and has more than 30 years experience in the resources industry. He was recently a director of Macquarie Bank Ltd, where he was ChairmanBSc (Hons), MSc, MAusIMM of the Metals and Energy Capital Division and head of Metals and Mining.Non-Executive Chairman Appointed to the Board in 2008Julian Ford Mr Ford has more than 25 years within the global resources industry. He hasBSc(Eng), BCom, Grad Dip held senior positions within several major resource companies and co-(Bus. Mgt) founded Zambezi Resources in 2004Managing Director Appointed to the Board in 2012 Mr Nightingale has over 20 years senior financial experience and isPeter Nightingale Chairman of ASX-listed Callabonna Uranium and Director of AugurBEc, CA Resources, Cockatoo Coal, Planet Gas and unlisted Equus Resources andNon-Executive Director Nickel Mines. Appointed to the Board in 2010 Mr Waller co-founded Sumatra Copper & Gold in 2006. Prior to this wasJocelyn Waller CEO of Trans Siberian Gold plc, an AIM listed company which Mr WallerMA (Hons) (Cantab) established in 2000. He currently serves as a Non-Executive Director ofNon-Executive Director RusAnt Ltd. Appointed to the Board in 2006Richard Edwards Mr Edwards spent eight years as an owner/manager of his own business,BComm, CPA, A Fin and subsequently spent the past nine years providing financial reportingCFO and Company and company secretarial services to a range of publicly listed companies. He 26Secretary is also CFO and Company Secretary of ASX listed Callabonna Uranium Ltd.
  • 3.Tembang Project Management TeamAdi Sjoekri Mr Sjoekri has over 17 years corporate experience, working forBSc ,MSc, MBA (Management) major companies such as CSR and Newmont. More recently heDirector (Govt was a consultant for the mining industry.Liaison, Permitting, Forestry)Don Harper Mr Harper is qualified mining engineer with more than 21 years‟B.Eng (Mining Engineering), B.Surv industry experience, Don has a strong track-record of project(Surveying) management and taking resources projects from pre-feasibilityMine Manager stage into production.Grant Harding Mr Harding is a qualified extractive metallurgist with more than 25 years experience in the mining industry. He has extensive seniorB.AppSc, FAusIMM operational, engineering and project management experience;Project Manager most of this in Indonesia.Matthew Farmer Mr Farmer has over 27 years experience in exploration and miningBSc (Hons) Geology, MAusIMM, FGS mostly focused in South East Asia. His experience spans a mix ofExploration Manager major and junior companies including BP Minerals and Newmont 27
  • 4. Positive PFS outcome – March 2012 Stage 1 Development Plan: Belinau PFS - Key outcomes for Belinau Deposit Total revenue $175 million •Pre-Feasibility Study (PFS) confirmed Operating costs, royalties & sustaining $75 million Belinau as a robust and profitable standalone capital project Pre-tax project operating $100 million cash flow •Belinau comprises ~13% of Tembang resource Pre-production capital $48 million Internal Rate of Return 31% •Optimisation studies ongoing C1 cash operating costs •Evaluating open pit opportunities (including silver credits) US$511 •Definitive Feasibility Study (DFS) has Mine life 3 years (stage 1) commenced Note: Production rate 200,000 tpa The Belinau Underground PFS was published on the [xx] and included only the Belinau Underground Study. Updates based on Optimisations will be posted by SCG. The 1 st Update was posted on the 12th March 2012. 28
  • 5. Sontang Project: Overview • Polymetallic discovery • Located in Pasaman regency West Sumatra province • Best intersection of 11.9 metres @ 6.5 g/t Au, 33 g/t Ag, 8.0 % Zn • Mineralisation over +150 metre strike length depth to 75 metres 29
  • 6. Sontang East Drilling Results 30
  • 7. Sumatra Peer Comparisons Notes, Please see next page for notes and Sumatra Intrepid Kingrose Medusa Sihayo G Resources Archi- details on the values quoted in this table. Copper & Mines Mining Mining Gold pelago Gold Sihayo Toka Tembang Tujuh Project Way Linggo Co-O Mine Martabe Pungkut TindungMarket cap 1,000† 630†(AUD M) 25 477† 363† 1,100† 109†Gold Equivalent Resource*EV ($/ Oz Au Resource) 19 16 1093 2019 97 167 244JORC resource 1.0 25* 0.39* 2.6* 1.42* 9# 2.58#(M oz)Resourcegrade 1.35 0.46* 11* 9.6* 2.75* 1.34# 1.53#(g/t)Est Capital Cost 32## 155* 225* 82.9* 576#(AUD M)Annual Production 38,000## 114,000* 43,000* 77,000* 88,000* 250,000# 61,191#(oz Au pa)Cash costs production 350 to 450 376* 145* 206* 678* 350# 579#(AUD / oz)Est Mine Life 10 4+# 10+# 8+# 9+#(Years)Production/(Forecast) 2013 2010# 2007 # [2014] # 2012# 2011#(Year)Project ownership 100% 80%* 85%* 100%* 75%* 100%# 95%# Sources: *Gold Nerds March 2011; #Company presentations; †Yahoo Finance 14 March 2012: ## SUM March Optimisation Update 31
  • For Of Fire: Information – ASX:SUM8. RIMFurtherProlific mineralisation • World’s Largest Gold Deposit – Grasberg • Lowest Costs Producers – Gosowong, Co-O, Way Linggo Sumatra projects Au deposit Cu-Au deposit Atlas Placer MIWAH KELIAN Siana 3.14 Moz Au, 8.9 Moz Ag Bulawan 3.56 Moz Au, 1.44 Moz Ag Kingking 500 Kms MARTABE MT.MURO 6.49 Moz Au, 66.2 Moz Ag 1.25 Moz Au, 34.6 Moz Ag Mamut TOKA TINDUNG Gn.Pani 1.75 Moz Au TEMBANG 1.0Moz Au 12.8 Moz Ag GOSOWONG 2.8 Moz Au Wabu MESEL 1.83 Moz Au SIHAYO 1.4 Moz Sontang Tombulilato Ojolali AWAK MAS 1.92 Moz Au Way Linggo TANDAI 1.4 Moz Au, 15 Moz Ag ELANG 25.0 Moz Au, 16.0 lb Cu Wetar GRASBERG DONOK Cibaliung 38.5 Moz Au, 35.6 lb Cu 1.34 Moz Au, 7.4 Moz Ag PONGKOR Note: The resources shown on this page are 3.6 Moz Au, 26.3 Moz Ag TUJUH BUKIT BATU HIJAU historical resources that have been published. The 14.0 Moz Au, 8.8 lb Cu 17.2 Moz Au, 14.1 lb Cu detailed Tembang Resource is shown in Appendix 1