REIS 2013 Broken Hill - KBL Mining ASX:KBL

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The 3rd annual Resources & Energy Investment Symposium (REIS) is on 19-22 May, once again held in the unique city of Broken Hill; Last year’s event exceeded the expectations of all that attended - …

The 3rd annual Resources & Energy Investment Symposium (REIS) is on 19-22 May, once again held in the unique city of Broken Hill; Last year’s event exceeded the expectations of all that attended - including over 350 delegates, 12 keynote speakers and more than 30 resource companies presenting their investment opportunities.

A focus for this year’s symposium will be on the current economic climate including its challenges and opportunities, not only in the Australian resources industry, but Australia’s position in the international market.

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  • 1. KBL Mining Limited | ABN 67 141 233 632Anthony (Trangie) JohnstonChief Executive OfficerDate: May 2013Renewed strategy delivering rewards
  • 2. KBL Mining Limited | ABN 67 141 233 632DisclaimerImportant Notice and DisclaimerThis presentation and these materials (together the “Presentation”) has been prepared by KBL Mining Limited ABN 38 129 954 365 (ASX:KBL) (“KBL”) as an Investor Presentation.By participating in this Presentation or reviewing or retaining these materials, you acknowledge and represent that you have read, understood and accepted the terms of thisImportant Notice and Disclaimer.This Presentation should be read in conjunction with KBL’s statutory accounts lodged with the Australian Securities Exchange (“ASX”) on 3 October 2012, 2012 Annual Report, and otherperiodic and continuous disclosure announcements that have been lodged by KBL to the ASX.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 or any other jurisdiction.Securities may not be offered or sold in the United States absent registration under the Securities Act of 1933 or an applicable exemption from registration.This Presentation may contain forward looking statements concerning projected earnings, revenue, growth, outlook or other matters (“Projections”) for the current or future financial years.Any such Projections are based on assumptions which may differ materially from the actual circumstances which may arise. KBL undertakes no obligation to update any Projections for eventsor circumstances that occur subsequent to the date of this Presentation or to keep current any of the information provided. Past performance is no guarantee of future performance.Recipients of this Presentation are advised that the information contained in this Presentation is not legal, tax, accounting, investment or financial product advice and should not be used asthe basis for making investment decision in relation to KBL securities.In addition, some of the financial data included in this presentation may be “non-GAAP” financial measures under Regulation G under the Securities Exchange Act of 1934. Certain of thesemeasures may not be comparable to similarly titled measures of other companies.The information contained in this Presentation is for information purposes only and does not constitute an offer to issue, or arrange to issue, securities or other financial products. KBL has noobligation to tell recipients if it becomes aware of any inaccuracy in or omission from the information in this Presentation. This Presentation has been prepared without taking into accountthe investment objectives, financial situation or particular needs of any particular person. You should consult your own advisors as to legal, tax, financial and related matters and conduct yourown investigations, enquiries and analysis concerning any transaction or investment or other financial decision.This Presentation, including opinions set out in it, is based on information compiled or prepared by KBL from sources believed to be reliable, although such information has not been verifiedin all instances. No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness or correctness of the information, opinions or conclusions contained inthis Presentation. To the maximum extent permitted by law, none of [Company short name], its directors, employees, advisors or agents, nor any other person, accepts any liability, includingwithout limitation any liability arising out of fault or negligence, for any loss arising out of the use if the information contained in this Presentation. In particular, no representation or warranty,express or implied, is given to the accuracy, completeness, likelihood of achievement or reasonableness of any forecasts, Projections or prospectus referred to in this Presentation.2
  • 3. KBL Mining Limited | ABN 67 141 233 632KBL Mining – Company snapshotKBL is a profitable copper-gold producer from the Mineral Hill Mine in NSW. Silver-lead production is also onthe radar, with Sorby Hills, Australia’s largest shallow silver-lead deposit, now in the final stages of permitting3Key statisticsASX code: KBLShare price: $0.07752 week range: $0.068 - $0.24Shares outstanding: 293.5 millionMarket cap: $22.6 millionCash*: $6.84 millionDebt*: $10.0 millionNet debt: $3.16 millionEnterprise value: $25.76 millionBoard of DirectorsJim Wall ChairmanSteve Lonergan Exec DirectorBob Besley Non-Exec DirectorJohn Richards Non-Exec DirectorKey ManagementTrangie Johnston CEOWill Beaurepaire CFORod Griffith COOEd Newman GM – projects
  • 4. KBL Mining Limited | ABN 67 141 233 632Investment Highlights4Refocused mining strategy – already delivering material performance improvementsDiversified portfolio by project and commodity – mitigates risk profileTwo advanced stage, quality projects:- Mineral Hill, NSW (producing) – underground high-grade copper-gold deposit- Sorby Hills, WA (production to commence early CY14) – shallow silver-lead depositNext two years to deliver significant ramp up in production – cashflow boosterActive production and exploration work pipeline – share price catalystsAttractive production profile compared to peers – unique value propositionCommercially-focused Board and management with a proven track record1234567
  • 5. KBL Mining Limited | ABN 67 141 233 632Mineral Hill – the geology• Located in the Lachlan Fold Belt in central NSW – a worldclass mineral province• Mineral Hill geological features:- Volcanic centre, located at junction of regionallyimportantstructures: Gilmore Suture & Lachlan Transfer Zone (LTZ)- Silurian rift containing felsic volcanics, volcaniclastics& younger cover sediments- Polymetallic epithermal system, comprising multiple high-grade,low tonnage orebodies arranged in distinct metal zones: Cu-Au (Red Terror, SOZ) Au-Cu (EOZ, ESOZ, SOZ, Jacks Hut, Ashes) Cu-Pb-Zn-Ag-Au (Parkers Hill, SOZ, Iodide) Au-Ag (Pearse, Pearse Nth – 800m from processing plant)5
  • 6. KBL Mining Limited | ABN 67 141 233 632Production at Mineral Hill Mine6Current mill operations – Back on track• Producing Cu-Au concentrates at a rate of 320,000tpa• Potential for 10+ years production life• Record performance in March quarter 2013 – result of inclusion of Red Terror Southwest in the mine plan:Record 1,114 t of Cu in concentrate produced – up 29% on last quarterRecord 652oz of Au in concentrate produced – up 79% on last quarterRecord Cu recoveries – averaged 91.5%, compared to average of 75% for FY12• Production was previously focused on working through the start-up Parkers Hill deposit:Compromised production performance in the latter half of 2012. Production figures for FY12 were 2,791t Cu, 836oz Au, 82,228oz Ag
  • 7. KBL Mining Limited | ABN 67 141 233 632Exploration at Mineral Hill7Exploration success continues to expand the size of the underground mineralised envelope at Mineral HillExploration work in the past 10 months has: Uncovered significant depth and strike extensions of existing underground orebodiesA number of deposits are proving to be larger than first anticipated Reviewed access roads to ESOZ and SOZ – dewatering now complete Ultimately, add significant tonnage to the existing JORC Resource and develop sufficientReserves for at least 2 years of sustainable production from the Mineral Hill mill
  • 8. KBL Mining Limited | ABN 67 141 233 632Sorby Hills – key facts• Largest, undeveloped near-surface silver-lead-zinc (Ag-Pb-Zn) deposit in Australia• Located in the East Kimberley region of WA, ~50km by sealed road from Kununurra• 75% ownership – remaining 25% held by JV partner Yuguang (largest Ag & Pb smelter group in China)• Has been well defined by extensive exploration• Current Resource of 16.7Mt @ 4.5% Pb, 0.7% Zn & 52g/t Agcontaining: 750,000t Pb, 117,000t Zn & 28Moz Ag• Pre-Feasibility Study successfully completed for Stage 1 – Sorby Hills is a staged development• Now in final stages of permitting : Public Environmental Review (PER) closed 10 April. Results pending8L: Sorby Hills location mapR: Sorby Hills top down view
  • 9. KBL Mining Limited | ABN 67 141 233 632Sorby Hills – A staged development9Stage 1 PFS results cover only 27% of the GlobalIndicated and Inferred Resource for Sorby Hills:4.432Mt @ 4.29% Pb & 44g/t Ag, at 2.5%Pb cut-offSorby Hills is planned as a staged development to reduce operational and capital riskStage 1: Covers 1,787ha. Will focus on the shallow central C, D & E deposits, which span 1km of the 10km strikelengthStage 2: Conceptual expansion of production. Will focus on deeper higher grade H, I, alpha & beta depositsStage 1 deposits
  • 10. KBL Mining Limited | ABN 67 141 233 632Sorby Hills – PFS results for Stage 110Key results: NPV post-tax = $88 million Cash costs of -$30.70 (negative) / oz Ag after Pb credits < 2 year payback period, with initial 10-year mine life Approx. 4Moz Ag and 100,000t Pb produced in first 5years Final environmental approval expected by mid 2013 Development expected to commence in FY2014Stage 1 inputs Year 1 – Year 5 Life of mineMining inventory (Mt) 2.2 6.2Strip ratio (x) 3.6 3.7Throughput (tpa) 400,000 625,000Initial mine life (years) 5 10Average silver (Ag) grade (g/t) 70 50Average lead (Pb) grade (%) 5.30 4.20Average Ag recovery (%) 87 80Average Pb recovery (%) 91 86Average Ag produced (Ozpa) 830,000 715,000Average Pb produced (tpa) 20,000 20,500Mining costs ($/t mined) 11.50 11.50Processing costs ($/t mined) 20.00 18.00Capital costs (AUD m) 70 80PFS modelling resultsLife of mine cash surplus (AUD m) 201Project Net Present Value (NPV) before tax (AUD m) 132Project NPV after tax (AUD m) 86Project IPP before tax (%) 58Project IRR after tax (%) 49Payback period (years) 1.7CAPEX (AUD m) 70C1 cash costs ($/oz Ag) -30.70C2 cash costs ($/lb. Pb) -0.11
  • 11. KBL Mining Limited | ABN 67 141 233 632KBL MiningLevel 3, 2 Elizabeth PlazaNorth Sydney, NSW 2060CONTACT USP: +61 2 9927 2006E: