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Straits Resources Presentation, Investor Roadshow November 2013.
Straits Resources Presentation, Investor Roadshow November 2013.
Straits Resources Presentation, Investor Roadshow November 2013.
Straits Resources Presentation, Investor Roadshow November 2013.
Straits Resources Presentation, Investor Roadshow November 2013.
Straits Resources Presentation, Investor Roadshow November 2013.
Straits Resources Presentation, Investor Roadshow November 2013.
Straits Resources Presentation, Investor Roadshow November 2013.
Straits Resources Presentation, Investor Roadshow November 2013.
Straits Resources Presentation, Investor Roadshow November 2013.
Straits Resources Presentation, Investor Roadshow November 2013.
Straits Resources Presentation, Investor Roadshow November 2013.
Straits Resources Presentation, Investor Roadshow November 2013.
Straits Resources Presentation, Investor Roadshow November 2013.
Straits Resources Presentation, Investor Roadshow November 2013.
Straits Resources Presentation, Investor Roadshow November 2013.
Straits Resources Presentation, Investor Roadshow November 2013.
Straits Resources Presentation, Investor Roadshow November 2013.
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Straits Resources Presentation, Investor Roadshow November 2013.

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Straits Resources (ASX:SRQ) investor presentation at Symposium's Investor Roadshow in Sydney and Melbourne to over 250 attendees, November 2013. Presentation was given by Straits Resources' Executive …

Straits Resources (ASX:SRQ) investor presentation at Symposium's Investor Roadshow in Sydney and Melbourne to over 250 attendees, November 2013. Presentation was given by Straits Resources' Executive Chairman, Andre Labuschagne.

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  • 1. Turnaround Strategy: Gaining Traction Investor Presentation October 2013
  • 2. Disclaimer Forward-Looking Information Certain statements contained in this press release constitute forward-looking statements or forward-looking information. The words “intend”, “may”, “would”, “could”, “will”, “plan”, “anticipate”, “believe”, “estimate”, “expect”, “target” and similar expressions are intended to identify forward-looking statements. These statements are based on certain factors and assumptions and while Straits considers these factors and assumptions to be reasonable based on information currently available, they may prove to be incorrect. Forward-looking statements are given only as at the date of this release and Straits disclaims any obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. Competent Person Statement for Mineral Resources and Drilling Results: The information in this presentation to Mineral Resources and Drilling Results is based on information compiled by Byron Dumpleton, who is a member of the Australian Institute of Geoscientists. Mr Dumpleton is a full-time employee of Straits Resources Limited and has sufficient experience relevant to the style of mineralisation, 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 for Reporting of Mineral Resources and Ore Reserves”. Mr Dumpleton consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. Mineral Resources reported are inclusive of Ore Reserves.
  • 3. Investment Proposition • An established, focussed Australian copper producer • New Board and Senior Management with proven track record in corporate and operational turnarounds • Restructuring of the Straits business well advanced and delivering results • Three consecutive quarters of improved performance (production and cost) at flagship Tritton Copper Operation • Value proposition with clear share price growth potential
  • 4. Corporate Overview Board of Directors • Andre Labuschagne • Alastair Morrison • Michele Muscillo Executive Chairman Non-executive Director Non-executive Director Executive Management • Rob Brainsbury Chief Financial Officer • Ian Sheppard Chief Operating Officer Major Shareholders Capital Structure ASX Code SRQ Ordinary Shares 1.164bn Options & Performance Rights Nil Share Price (@ 22 Oct ‘13) 0.7¢ Market Capitalisation $8.15M Cash & Receivables (@ 30 Sep ‘13)* $29M Borrowings (@ 30 Jun ‘13) $157.7M *Excludes Mt Muro Standard Chartered Private Equity Ltd 18.4% Glencore Finance Ltd 11.3% Baker Steel Capital Managers 9.4% Top 20 74.3%
  • 5. Achievements FY2013 ‘Difficult decisions’ have been taken: 1. Debt position improving: • Debt reduced since 30 June 2013 by ~$28M • Mt Muro silver prepayment facility (A$34.9M) closed out through cash payment (US$7.5M) and convertible notes (US$7.0M) to be issued • Copper swap facility restructured with repayment profile extended to 5 years 2. Operations transitioned to cashflow positive: • Mt Muro gold mine (Indonesia) placed on care and maintenance (divest or close) – cash ‘bleed’ stopped • Reliable performance at Tritton - result of new management, focus on improving maintenance and operations planning practices • Tritton production stabilised and achieving record results 3. Rightsizing complete: • Sale of non-core assets: Hillgrove antimony/gold operation and plant for $37.1M, Stuart Shelf exploration assets for $2.2M • Corporate head office reduced from ~50 staff to 8 and relocation to Brisbane for cost saving and proximity to operations • Strategy developed for non core assets
  • 6. Strategy for FY2014 • Produce ~25,000 tonnes of copper (FY2013: ~23,000t) • Add 50,000 tonnes of JORC compliant copper reserves at Tritton from known projects • Finalise exit from Mt Muro Gold Mine (divestment or closure) • Continue to improve debt position • Continue Tritton resource to reserve conversion (leverage established infrastructure) • Accelerate exploration of high value regional opportunities with suitable JV partners
  • 7. Tritton Operations: Overview • Located near Nyngan in NSW • Volcanogenic massive sulphide system • Reserve - 7.3Mt @ 1.7% for 118kt copper • Resource – 25,530kt @ 1.7% for 435kt copper • Multiple mines • Conventional crushing and flotation circuit -1.5Mtpa concentrator • FY2014 production forecast ~25,000t • 7+ year mine life • Good opportunity for oxide project to restart • Extensive pipeline of known mining projects • Highly prospective geological region – excellent potential for new discoveries
  • 8. Value Tritton Operations: Strategy Sustain/grow Improve grade Stabilise production: fill the mill Ongoing cost control through mining method & design and cost savings Reserve extensions and new projects Time
  • 9. Tritton: Turnaround Achievements • New management team • Renewed focus on planning, people and maintenance • Legacy bottlenecks addressed • Costs continue to improve • Operation setting new records for underground mine production, processing plant throughput and copper production Tritton C1 Cash Cost (A$/lb) Tritton Copper Production $3.50 7,000 $3.00 6,000 Tonnes 8,000 $2.50 5,000 $2.00 4,000 3,000 $1.50 2,000 $1.00 1,000 $0.50 0 $0.00 Dec-12 Mar-13 Jun-13 Sep-13 Dec-12 Mar-13 Jun-13 Sep-13
  • 10. Tritton: Resource Development Pipeline
  • 11. Target Reserve Development Pipeline Development Project Target Cu Kt Avoca Tank UG 15kt Budgery pit 10kt Murrawombie pit extension 10kt Murrawombie UG 20kt Budgerygar UG 14kt Tritton below current reserve 60kt North East below thrust 5kt Larsons pit extension 3kt Total 137Kt
  • 12. Peer Valuations EV/Reserves (A$/t)* 2,831 1,713 1,544 1,129 1,015 984 946 926 568 Sandfire PanAust Inova Altona Mining Discovery Hillgrove Metals Straits OZ Tiger Minerals Resources EV/Production (A$/t)* 24,089 19,399 9,466 8,463 7,976 7,343 7,124 5,156 PanAust Sandfire * Source: Bloomberg, company filings. Production refers to FY2013 output. Altona Mining Hillgrove OZ Tiger Minerals Resources Inova 4,784 Discovery Metals Straits
  • 13. Value ‘Disconnect’ DEC ‘12  Market cap ~A$110M  No clear operational focus  ‘Heavy’ corporate structure Snapshot 12 SEP ‘13 JUN ’13 8 6 AUG ‘13 Operations at Mt Muro suspended: Clash between police and illegal miners 10 SHARE PRI CE (c) Snapshot Credit Suisse debt restructure SEP ‘13 SCB debt restructure  Strong team  Clear focus: copper assets  Lean corporate structure 4 2  Operations Cashflow NEGATIVE  Operational issues at Mt Muro and Tritton  Large debt position  Market cap ~$A11M 0 Dec '12 Jan '13 DEC ‘12 Feb JAN ‘13 New Mt Muro Chairman, operations MD and suspended CFO appointed Mar April May June July Aug Sept MAR ‘13 APR ’13 AUG ‘13 Sep ¼ ‘13 Sale of Hillgrove , Ian Sheppard appointed as COO Mt Muro grade below forecast estimate Mt Muro on care & maintenance – buyer sought Tritton – Record quarterly production  Operations Cashflow POSITIVE  Record production at Tritton  Debt reducing
  • 14. Value ‘Disconnect’ 1. Difficult decisions taken this year – addressed or addressing key risks 2. Company better positioned today than at start of CY13 – not reflected in share price 3. Current undervaluation represents opportunity to gain exposure to the turnaround
  • 15. Summary 1. Established, focussed Australian copper producer ‒ ‒ ‒ Multiple mines and a 1.5Mtpa copper concentrator at Tritton in NSW Growing production profile of 23,000t+ in 2013 to 25,000t in 2014 Few mid-cap copper investment opportunities 2. New Board and Senior Management with proven track record ‒ ‒ Executive Chairman/MD, CFO and COO have led a number corporate and operational turnarounds Clear focus on operational excellence and financial performance 3. Restructuring of the Straits business is well underway ‒ Substantial rationalisation has occurred at an operational and corporate level in the past 12 months 4. Value proposition with clear share price growth potential ‒ Undervalued relative to peers ‒ Value yet to be ascribed to turnaround achievements
  • 16. Thank you
  • 17. Mineral Resource - Tritton Area June 2013 Estimate Region Cut-off Tritton Underground Variable Cu Tritton Pillars (Recoverable) Variable Cu Murrawombie 0.6% Cu North East 0.6% Cu Larsens 0.6% Cu Avoca Tanks 0.6% Cu Budgerygar 0.8% Cu Budgery 0.5% Cu Sub Total Projects Variable Cu Stockpiles Tritton Copper Operation Project Variable Cu Grand Total (Tritton Operations) Variable Cu Commodity Tonnes (kt) Cu (%) Measured 2,050 2.0 Tonnes (kt) Tonnes (kt) 1,900 2.2 Total 11,480 1.9 380 2.6 6,530 1.4 Cu (%) Cu (%) 7,530 1.7 Inferred 380 2.6 Cu (%) Tonnes (kt) Indicated 30 2.4 Tonnes (kt) 1,510 1.2 8,040 1.4 250 1.9 60 1.8 340 1.9 810 1.8 Cu (%) Tonnes (kt) 710 2.8 810 1.8 140 1.0 850 2.5 1,610 1.5 1,610 1.5 1,740 1.1 280 0.9 2,020 1.1 2,080 17,950 5,500 Cu (%) 2.0 1.6 1.6 25,530 1.7 Tonnes (kt) 50 1.5 Cu (%) Tonnes (kt) Cu (%) Tonnes (kt) Cu (%) Tonnes (kt) Cu (%) Tonnes (kt) Cu (%) 50 1.5 2,130 17,950 5,500 25,580 2.0 1.6 1.6 1.7
  • 18. Ore Reserve – Tritton Area June 2013 Estimate Region Project Mining Method Cut-off Cu Tritton Variable Murrawombie Tritton Copper Operation UG UG Variable North East UG Variable Larsens UG Variable Stockpiles Stockpile Variable Grand Total (Tritton Operations) Variable Commodity Tonnes (kt) Cu (%) Cu recovered (t) Tonnes (kt) Cu (%) Cu recovered (t) Tonnes (kt) Proved Probable 921 2.1 18,500 - - 50 1.5 700 971 2.1 19,200 4,327 1.7 67,200 1,370 1.7 21,600 182 5,248 1.7 85,800 1,370 1.7 21,600 182 1.6 - Cu (%) Cu recovered (t) Tonnes (kt) Cu (%) Cu recovered (t) Tonnes (kt) Cu (%) Cu recovered (t) Tonnes (kt) Cu (%) Cu recovered (t) Total 1.6 2,800 440 1.6 6,600 - 2,800 440 1.6 6,600 50 1.5 700 7,290 1.7 118,000 6,319 1.7 99,000

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