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Objective Capital's Commonwealth Resources

Objective Capital's Commonwealth Resources
Investment Foum 2012
Ironmongers' Hall, City of London
22 May 2012
Speaker: David Hatch, Navigator Resources

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    Investor Presentation Investor Presentation Presentation Transcript

    • COMMONWEALTH RESOURCESINVESTMENT FORUM Investor Presentation David Hatch – Managing Director, Navigator Resources IRONMONGERS’ HALL, CITY OF LONDON TUESDAY, 22 MAY 2012 www.ObjectiveCapitalConferences.com
    • NAVIGATOR RESOURCES LIMITEDINVESTOR PRESENTATION MAY 2012 DAVID HATCH Managing Director www.navigatorresources.com.au
    • IntroductionDISCLAIMER The information contained in this presentation is not financial product advice. The presentation is for information purposes and is of a general and summary nature only. It does not constitute an offer. Navigator Resources Limited (Navigator) gives no warranties in relation to the statements and information in this presentation. Investors should seek appropriate advice on their own objectives, financial situation and needs. Bronzewing This presentation contains certain statements which may constitute “forward-looking statements”. Such statements are only predictions and are subject to inherent risks and uncertainties which could cause actual values, performance or achievements to differ materially from those expressed, implied or projected in any forward looking statements. Navigator disclaims any intent or obligation to update publicly any forward-looking statements, whether as a result of new information, future events or results or otherwise. Investors are cautioned that forward-looking statements are not guarantees of future performance and investors are cautioned not to put undue reliance on forward-looking statements due to the inherent uncertainty therein. Leonora This presentation does not constitute or form any part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any securities in the Company nor shall it or any part of it, or the fact of its distribution, form the basis of, or be relied on in connection with, any contract or commitment or investment decision relating to any securities in the Company. Any decision regarding any proposed subscription for securities in the Company must be made solely on the basis of information on the Company that is publicly available. This presentation does not constitute an offer of securities for sale. ExplorationCOMPETENT PERSONS STATEMENTSections of information contained within this report that relate to Exploration Results, Mineral Resources or Ore Reserves at theBronzewing Gold Project, the Leonora Gold Project and Cummins Range Rare Earth Project are based on information reviewed byBernie Kirkpatrick who is a full-time employee of Navigator Resources Limited and a Member of the Australasian Institute of Mining Conclusionand Metallurgy. Bernie Kirkpatrick has sufficient experience which is relevant to the style of mineralisation and type of deposit underconsideration and to the activity which he has undertaken to qualify as a Competent Person as defined in the 2004 Edition of the“Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Bernie Kirkpatrick consents to theinclusion in this report of the matters based on his information in the form and context in which it appears.
    • IntroductionCORPORATE OVERVIEWASX Code: NAVOrdinary Shares 2,222,216,576 BronzewingMarket Capitalisation ($0.008) A$17.8 million12 month High-Low A$0.140-0.008Debt Outstanding US$12 millionHedging Nil LeonoraUnlisted Options 62,869,578ASX Code: NAVOB ExplorationListed Options 835,096,124Exercise Price A$0.04Expiry Date 31 July 2014 Conclusion
    • IntroductionBOARD & MANAGEMENT  Allan Trench Non-Executive Chairman (since 2005) Over 15 years geology/business Bronzewing management experience in the Australian resources industry including  John Shipp with CRU Group, WMC, Barrick, Non-Executive Director (since 2006) Woodside and McKinsey & Company. Mining engineer with 40 years of international experience. Former- President Barrick Gold Australia-  David Hatch Africa operations and GM of KCGM Leonora Managing Director (since 2009) and Boddington. A track record in the management, optimisation and development of predominantly gold mining assets in Australia, Indonesia, PNG and West  Guy Walker Africa. Former MD Kingsrose Mining, Non-Executive Director (since 2012) Exploration Westonia Mines and Abosso Minerals. Over 20 years experience in financial markets and funds  Ian Macpherson management in NZ, North America Non-Executive Director (since 2003) and the UK. Former COO of Chartered accountant with 30 years Talisman Global Asset Management experience, specialising in corporate and current Company Secretary of Au Mining. Conclusion advice, equity and debt raising and compliance. Established Ord Partners in 1990.
    • IntroductionBOARD & MANAGEMENT David Hatch – Managing Director Bronzewing  Gerry Kaczmarek  Bernie Kirkpatrick CFO/Company Secretary (since 2009) Exploration Manager (since 2008) Accountant and economist with almost 42 years multi-commodity 30 years experience in the resources exploration and mining experience and minerals processing industry with projects throughout covering projects in Australia and Australasia including roles of Mine overseas. Including 10 years as CFO Geologist, Consulting Geologist Leonora and Company Secretary of Troy and Australian Exploration Resources. Manager.  Craig Bradshaw  Michelle Simson Exploration Chief Operating Officer (since 2012) Manager Corporate Affairs (since Mining Engineer with nearly 20 years 2007) experience, predominantly with WA 9 years administration experience gold companies in roles including in the WA mining industry in the Mining Manager, General Manager and gold and uranium sectors, in both COO. site and corporate roles. Conclusion Tim Blyth – General Manager – Bronzewing Operations
    • IntroductionTWO GOLD PROJECTS IN WA BRONZEWING Bronzewing 1,067,000oz Au resource* +960km2 tenements +3Moz historic production Purchased September 2009; first gold poured April 2010 Leonora Mining operations focussed on Cockburn Open Pit LEONORA Exploration 745,000oz Au resource* 320km2 tenements +280,000oz historic production Trial mining program February-August 2010 Conclusion Potential 50,000oz Au/yr production * Refer Reserves & Resources table
    • Introduction1. Cockburn Pit Cutbacks Bronzewing2. Physicals Performance Leonora3. Current Mine Plan4. 2012/13 & 2013/14 Mine Plan Exploration Forecasts Conclusion
    • IntroductionCOCKBURN PIT CUTBACKS Bronzewing Leonora ExplorationEastern Cutback Interim Western Cutback Cutback commenced February 2011  Cutback commenced June 2011 First ore mined June 2011  First ore mined September 2011 Conclusion  Majority of waste pre-strip is completed  Eastern and interim western cutback now connected around southern end of pit
    • IntroductionPHYSICALS PERFORMANCE Bronzewing Leonora Exploration Conclusion Positive gold production trend continuing * Forecast
    • IntroductionCURRENT MINE PLAN Bronzewing Leonora 2+ years Mine Plan 200,000oz Exploration potential Cockburn Pit 4.33Mt @ 1.6g/t Au* Recovered (Drill testing a series of (If the current observed near mine surface trend of conversion of anomalies based on gold Exploration Inferred material continues, nuggets and soil sampling there will be additional ore scheduled for July) tonnes and mine life) Conclusion * $1,350 pit design; Indicated only
    • Introduction2012/13 MINE PLAN FORECAST Q1 Q2 Total movement: 2.40M BCM Total movement: 1.49M BCM Bronzewing Ore mined: 613,000t Ore mined: 708,500t Plant throughput: 512,500t Plant throughput: 497,000t Average grade: 1.30g/t Average grade: 1.55g/t Gold recovered: 18,000-22,000oz Gold recovered: 21,500-25,500oz Leonora Q3 Q4 Total movement: 1.49M BCM Total movement: 1.50M BCM Exploration Ore mined: 655,000t Ore mined: 727,500t Plant throughput: 472,500t Plant throughput: 478,000t Average grade: 1.46g/t Average grade: 1.51g/t Gold recovered: 19,000-23,000oz Gold recovered: 20,000-24,000oz Conclusion Note: Budget costs and revenue estimates in progress
    • Introduction2013/14 MINE PLAN FORECAST Q1 Q2 Total movement: 1.50M BCM Total movement: 1.08M BCM Bronzewing Ore mined: 664,000t Ore mined: 962,000t Plant throughput: 483,500t Plant throughput: 478,000t Average grade: 1.34g/t Average grade: 2.18g/t Gold recovered: 17,500-21,500oz Gold recovered: 30,500-34,500oz Leonora Q3 Q4 Plant throughput: 472,500t Plant throughput: 478,000t Exploration Average grade: 1.84g/t Average grade: 0.83g/t Gold recovered: 25,000-29,000oz Gold recovered: 9,500-13,500oz Note: Budget costs and revenue estimates in progress Conclusion
    • Introduction1. Project History Bronzewing2. Project Areas Leonora3. Trial Mining4. Development Scenarios Exploration Conclusion
    • Introduction PROJECT HISTORY PFS completed: 12.2Mt @ LGP purchased from Sons 1.9g/t Au First recorded of Gwalia Administrators (742,000oz)+; Development Bronzewing mining activity on 6 year life options under the leases Resource doubles consideration to 444,444oz* Leonora 1996- 2005 2006 2009 2010 2011... 1899 1978 2004 2004 Exploration Sons of Gwalia own & operate Leonora Gold Project (LGP) Inferred Resource: Trial mining activity 3.54Mt @ 1.9g/t undertaken; 5 months, (221,500oz) 114,000t, 7,673oz Conclusion Resource increases to 700,400oz#* Indicated : 2.15Mt @ 2.7g/t for 189,000oz ; Inferred: 3.73Mt @ 2.1g/t for 255,000oz; # Measured: 3.65Mt @ 2.1g/t for 241,300oz; Indicated: 3.44Mt @ 2.1g/t for 232,300oz;Inferred: 3.63Mt @ 1.9g/t for 227,000oz; + Indicated: 8.27Mt @ 2.0g/t for 539,000oz; Inferred: 3.91Mt @ 1.6g/t for 203,000oz
    • IntroductionTHREE MAIN PROJECT AREAS: TOTAL 745,000oz RESOURCE Bronzewing Leonora Cardinia Mertondale Raeside Exploration 199,000oz 395,000oz 134,000oz 4.79Mt @ 1.3g/t 5.59Mt @ 2.2g/t 1.57Mt @ 2.6g/t (Indicated: 2.35Mt @ 1.3g/t = 95,000oz (Indicated: 4.34Mt @ 2.2g/t = 311,000oz (Indicated: 1.47Mt @ 2.7g/t = 127,000oz Inferred: 2.44Mt @ 1.3g/t = 104,000oz) Inferred: 1.25Mt @ 2.1g/t = 84,000oz) Inferred: 0.10Mt @ 2.1g/t = 7,000oz) Bruno Pit Trial: Mert 2 Pit Trial: Resource review: Conclusion February – June 2010 March – May 2010 September 2009 * Additional 17,000oz Resource to total 745,000oz located at Gambier Lass prospect
    • IntroductionTRIAL MINING: SIGNIFICANT VALUE-ADD ACHIEVED Mining Processing Results Bronzewing February – June 2010 April – August 2010 40% grade upgrade from 114,000t ore 5 parcels (T1-T5) Bruno Pit Predominantly Bruno High recovery of 93% Significant ore body data supergene ore generated 7,673oz gold poured Free dig mining confirmed Mining costs and material Leonora handling confirmed A$2.12 million net profit generated Exploration Conclusion NAV gold from T1 milling
    • IntroductionSEVERAL DEVELOPMENT SCENARIOS Bronzewing Leonora 2009 PFS Scenario 2011 Post-Trial Scenario Financing Options 1Mtpa CIL processing facility Low capital (<$30 million) Debt Central Merton’s Reward 0.5Mtpa processing facility Hybrid Debt location OR Cardinia only; shallow low strip JV Exploration 6 year mine life ratio mining Equity Anticipated pit backfill of 53,000oz pa (1.8g/t) Asset Sale tailings and waste rock ~$45million capital 4-6 year mine life; 30,000- 40,000oz pa Conclusion Estimated unit cash cost of $900-$1,000/oz
    • IntroductionCARDINIA MULTIPLE PIT DEVELOPMENT Bronzewing Trial Mined Bruno Pit Leonora Exploration Conclusion Cardinia Pit Designs based on A$1,300/oz
    • Introduction1. Resources & Reserves Bronzewing2. Regional Geology Leonora3. Bronzewing4. Leonora Exploration5. East Kimberley Conclusion
    • IntroductionRESOURCES & RESERVESBronzewing Reserves – June 2011 Mt g/t Au oz BronzewingProbable 10.624 1.6 540,000Total 10.624 1.6 540,000Bronzewing Resources – June 2011 (inclusive of Reserves) Mt g/t Au ozIndicated 13.72 1.7 738,000 LeonoraInferred 5.60 1.8 329,000Total 19.32 1.7 1,067,000Leonora Resources – June 2011 Exploration Mt g/t Au ozIndicated 8.16 2.0 533,000Inferred 4.13 1.6 212,000Total 12.29 1.9 745,000 ConclusionCummins Range Inferred Resource – February 2012COG% Tonnage Mt TREO % P2O5 % U3O8 ppm Th ppm TREO kt1.0 4.90 1.74 11.2 145 48 85.0
    • Introduction Bronzewing Leonora Exploration Conclusion REGIONAL GEOLOGY
    • IntroductionBRONZEWING Total land holding: ~960km2 Total annual expenditure commitment: $2.74 million Bronzewing JV arrangement with Mark Creasy (70% NAV; 30% Creasy) JV arrangement with Audax Leonora Minerals & Hot Holdings (NAV farmin to 50% on $1 million expenditure over 4 years; additional 19% on $1 million Exploration over further 2 years) Conclusion
    • IntroductionBRONZEWING – COCKBURN Bronzewing Leonora Exploration Conclusion Potential for underground mining following completion of open pit
    • IntroductionBRONZEWING – DRAGON-VENUS Bronzewing Leonora Exploration Conclusion 33km south of Bronzewing plant Best intersections include 13m @ 5.2g/t from 126m and 10m @ 4.7g/t from 224m
    • IntroductionBRONZEWING – BOWER-HARRIER Greenfields prospect 3-5km SE of plant; close proximity to mill and other infrastructure Bronzewing NAV has farmed into ground with only sparse previous drilling BLEG soil anomalies + numerous nuggets over a strike length of 6km; maximum soil sample value of 225ppb Au Leonora Favourable geology with main host rock a pillowed basalt; magnetic structures evident; shearing visible in outcrop Heritage survey completed April 2012; Exploration prospect is ready for drill testing with a 9,000m aircore program planned for July 2012 First pass drill program costing <$0.5 million Conclusion will determine whether any likelihood of a significant new discovery
    • IntroductionLEONORA Total land holding: ~320km2 Tenement package focussed on well Bronzewing mineralised Mertondale Shear and sub-parallel Kurrajong trend Highly prospective land holding warrants exploration spend to increase open pit resource base from Leonora 745,000oz to +1Moz Total annual expenditure commitment: $1.75 million Exploration Conclusion
    • IntroductionLEONORA – MERTON’S REWARD Bronzewing Leonora Exploration Original gold discovery on Mertondale Shear Current Resource of 1.08Mt @ 2.6g/t for 91,000oz* Conclusion Potential for northeast plunging, high grade underground lodes Historical underground production (1899-1942) of 89,000t @ 21.0g/t = 60,524oz * within a $2,000/oz pit shell, 0.7g/t Au cutoff; Indicated: 1.01Mt @ 2.7g/t for 87,000oz ; Inferred: 0.07Mt @ 1.7g/t for 4,000oz
    • IntroductionLEONORA – MERTONDALE 5 Bronzewing Leonora Exploration 10km north of Mertondale Current Resource of 0.48Mt @ 3.0g/t for 46,000oz* Potential for flat, south plunging, higher grade shoot Conclusion Historical production of 0.39Mt @ 2.6g/t for 32,000oz * within a $2,000/oz pit shell, 0.7g/t Au cutoff; Indicated: 0.32t @ 3.2g/t for 33,000oz ; Inferred: 0.16Mt @ 2.7g/t for 13,000oz
    • IntroductionLEONORA – HOBBY Bronzewing Leonora Exploration Mineralisation from surface, located 6.5km NNE of Cardinia Conclusion Best intersections include 12m @ 10.7g/t from 6m and 9m @ 3.88g/t from 31m Mineralisation open down dip and along strike
    • IntroductionEAST KIMBERLEY Cummins Range Rare Earth Project: JV with Kimberley Rare Bronzewing Earths (NAV 75%; KRE 25%) (KRE to farmin to 55% on $10 million expenditure over 4 years; additional 25% on BFS delivery) Laura River Base Metals Project: Leonora JV with Magma Metals (NAV 30% free-carried; Magma have earnt in 70%) Exploration Conclusion
    • IntroductionCONCLUSIONS As expected, first two years of Bronzewing operation have been challenging Bronzewing Supplementary funding has been required NAV is positioned to generate significant cashflow in the next 2-3 years Seeking to extend Bronzewing mine life with higher quality ounces Leonora NAV is planning to drill test the near mine Bower and Harrier prospects in July Exploration NAV is keen to add value to the latent Leonora project by:  further exploration spend; or  facilitating development options with third parties Conclusion