1. MOLY
MOLY
MINES
1 LIMITED
MINES
LIMITED
2011 Annual General Meeting
Presentation
26 May 2011
2. MOLY
Disclaimer MINES
2 LIMITED
This presentation includes “forward‐looking statements” as that term within the meaning of securities laws of applicable
jurisdictions. Forward‐looking statements involve known and unknown risks, uncertainties and other factors that are in some
cases beyond Moly Mines’ control. These forward‐looking statements include, but are not limited to, all statements other than
statements of historical facts contained in this presentation, including, without limitation, those regarding Moly Mines’ future
expectations. Readers can identify forward‐looking statements by terminology such as “aim,” “anticipate,” “assume,” “believe,”
“continue,” “could,” “estimate,” “expect,” “forecast,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “risk,” “should,”
“will” or “would” and other similar expressions. Risks, uncertainties and other factors may cause Moly Mines’ actual results,
performance, production or achievements to differ materially from those expressed or implied by the forward‐looking
statements (and from past results, performance or achievements). These factors include the failure to complete and
commission the mine facilities, processing plant and related infrastructure in the time frame and within estimated costs
currently planned; variations in global demand and price for molybdenum and copper; fluctuations in exchange rates between
the U.S. dollar and the Australian dollar; failure to recover the resource and reserve estimates of the Project; the failure of Moly
Mines’ suppliers and service providers to fulfil their obligations under construction, supply and tolling agreements; unforeseen
geological, physical or meteorological conditions, natural disasters or cyclones; changes in the regulatory environment,
industrial disputes, labour shortages, political and other factors; the inability to obtain additional financing, if required, on
commercially suitable terms; and global and regional economic conditions. Readers are cautioned not to place undue reliance
on forward‐looking statements. We assume no obligation to update such information.
3. MOLY
MINES
Annual General Meeting Results 3 LIMITED
Resolution For Against Proxy Abstain Excluded
Holder
Discretion
1 – Remuneration Report 7,550,332 917,249 536,971 228,946 ‐
2 – Re‐election of David Craig 8,322,542 286,735 571,321 52,900 ‐
3 – Re‐election of Steven Xiao 6,002,318 2,620,609 548,221 62,350 ‐
4 – Re‐election of Andy Zhmurovsky 8,260,541 340,136 547,321 85,500 ‐
5 – Approval of issue of options to Hanlong 7,517,445 1,065,477 539,995 110,581 ‐
Mining Investment Pty Ltd
6 –Moly Mines limited Performance Rights Resolution withdrawn
Plan
4. MOLY
Highlights and Achievements from November 2010 MINES
4 LIMITED
Spinifex Ridge Iron Ore Mine
Construction complete within 6 months of
development decision
p
Operations commence December 2010
Long term port access secured at Utah
Point, Port Hedland to September 2015
P i t P t H dl d t S t b 2015
Mining operations ramp up ahead of
schedule
Operating costs meet budget expectations
5 shipments completed
Strong reliable cashflow at current iron
Strong, reliable cashflow at current iron Spinifex Ridge Molybdenum Project –
ore prices
US$500M Finance Facility
China Development Bank approve
China Development Bank approve
US$500 million in financing facilities
EPC contract agreed with CACS and
GRES
Loan documentation advanced
5. Company Overview – A producer and mine MOLY
MINES
developer 5 LIMITED
Spinifex Ridge Iron Ore Mine
5 shipments completed Australia
High quality DSO
Life of mine access secured at Utah Point
Spinifex Ridge Molybdenum Project Broome
US$500M in project finance facilities approved
by China Development Bank
Funding secured through major strategic Karratha
Port Hedland
shareholder Spinifex Ridge
Strategic partner cornerstone growth plans
Marble Bar
Vision to build a major world class mining
group Newman
Hanlong Group US$6.5 billion credit lines Carnarvon
WESTERN AUSTRALIA
200kms
6. MOLY
Corporate Overview MINES
6 LIMITED
Capital Structure at 26 May 2011 Shareholders
ASX/TSX Ticker MOL Hanlong Group 56.8%
Market Cap
Market Cap A$365M Australian Register
g 35.3%
Ordinary Shares 384.9M Canadian Register 7.9%
Unlisted Options 54.1M Unlisted Options
TCW (1) 4.8M
Institutions 13.8M
Hanlong (2)
Hanlong 35.5M
35 5M
(1) TCW have advised that the the warrant holders wish to exercise 19 million warrants in MOL which will be issued after
today’s AGM
(2) Hanlong options to be approved by shareholders at today’s AGM
7. MOLY
MINES
7 LIMITED
Spinifex Ridge Iron Ore Mine
8. MOLY
Mine Layout, Reserves and Resources MINES
8 LIMITED
Waste Dump
NORTH
Auton
Port Hedland (170kms)
Dalek
Gallifrey
Spinifex Ridge
Molybdenum‐Copper
Molybdenum Copper
Deposit (500m)
ROM Pad,
Crushing,
Ore Stockpile
Marble Bar(50kms)
M bl B (50k )
50% Fe cut‐
50% Fe cut‐off
10. MOLY
Operations MINES
10 LIMITED
Operations run by Moly site management contracting key services of mining, crushing, haulage and
camp administration
BGC mining contractor
drill, blast, load and haul
40 BGC employees primarily on a 2 and 1 roster
Mining operations run day shift only, drill operations run double shift
Mining operations run day shift only, drill operations run double shift
1 x Hitachi 1900 Excavator
5 x Komatsu 785 (90t) dump trucks
A ill
Ancillary equipment
i t
Rapid Crushing and Screening
3 stage crushing plant to deliver a single Fines product of < 10 mm
Day shift operation currently operating to an annual production rate of 1 million tonne per annum
Bullbuck Transport
24 hour haulage g
2,800 tonnes per day
Agreement to use Utah Point shiploader and pad 13 through to September 2015
11. MOLY
Operations and Financials MINES
11 LIMITED
Life of Mine Reserve Production 2011 Operations ‐ Forecast
Ore 4.3‐4.6Mt Production: 822,000t
Strip ratio
Strip ratio 3.3
33 Cost of production: A$65/t shipped
C t f d ti A$65/t hi d
DSO hematite Fe Grade 59.0%
Total revenue, after shipping, marketing and royalties
FOB operating cost $65/T based on current spot prices (1) : A$125/t
Strong Life of Mine Operating Performance to Date 4 months ended April 2011 ‐ Actual
Tonnes shipped: 203,000
5 shipments dispatched from Utah Point for 326,000 tonnes
Stocks on hand: 59,000
Strong reconciliations to geological and mine models
Low grade stocks on hand: 86,000
Production outperforming budget
Operating cost: A$73.4/t shipped
Operating costs outperforming budget
p g p g g
Total revenue, after shipping, marketing and royalties:
Grade performing to budget
A$120.8/t
US$ sales price performing to budget, offset by strongly
appreciating A$
(1) Based on Platts IODEX 58% and 62% Fe CFR North China May 2011
19. MOLY
MINES
19 LIMITED
p g y pp
Spinifex Ridge Molybdenum / Copper
Project
Transportation of mill sections, Perth
China Information
20. MOLY
Molybdenum – a metal for our time 20
MINES
LIMITED
Consumption Supply
Driven by stainless steel, full alloy and tool 10 producers account for 55% of global mine
steels, high strength low alloy, carbon steels output
and catalysts
d t l t
Decades of industry under investment
Anti‐corrosive properties, provides resistance Primary producers now the dominant contributor
to abrasion and imparts hardness to steels
to global mine output
Different applications can use between 0.5% 2010 mine output has rebounded as existing
to 8% Mo
mines have restored capacity from 2008/2009
Used in high pressure applications in extreme shut downs
temperature conditions
At 5‐6% growth the market requires 10,000 tonnes
Consumers are price insensitive and unwilling (22mlb) of new production per annum to maintain
to b tit t i
t substitute given it i
its importance t structural
t to t t l equilibrium
integrity
Limited growth in by‐product mines, copper
Forecast demand for molybdenum set to grow production being sourced outside of traditional
at 5 6% yoy through 2015
5‐6% h h South American countries ‐ the world needs new
primary molybdenum mines
Energy applications, pipeline development,
nuclear power plants, desalination, high
sulphur fuels, motor vehicles
21. MOLY
Molybdenum – a metal for our time 21
MINES
LIMITED
Prices
Limited western world demand through
GFC, however end 2008 and early 2009
price levels prove unsustainable as higher
cost marginal producers in China
withdraw from market
F d a fl at US$15 00/lb
Found floor t US$15.00/lb
Prices stable through 2010 as mine output
reacted to and matched strong Chinese
domestic economy ‐ China currently the
dominant player and net importer
Market currently in balance ‐ global
inventories less than 1 months production
Under investment in moly projects will create supply tightness as global demand recovers
China export quota’s and potential rationalization of domestic production could contribute to western
p q p p
supply shortfall
As new primary molybdenum mines are brought into production during this decade, the marginal cost
of production will reflect their cost structures including capital payback
Supply and demand side factors could both contribute to rising price landscape this decade
22. MOLY
Reserves and Mineral Resources MINES
22 LIMITED
Reserves Relative Competitiveness
JORC / NI43‐101
Mt Mo% Cu% Ag g/t MoEq%1 Top 5 primary molybdenum
classification resource globally by
resource globally by
Proven reserves 199.7 0.06 0.10 1.5 0.09 contained metal
Mo Equiv. reserve grade is
Probable reserves 251.1 0.04 0.07 1.1 0.06
comparable to other
comparable to other
TOTAL 450.8 0.05 0.08 1.3 0.07 western world primary
molybdenum projects
First 10 yrs
Resources 45 yr mine life
y 0.10%
0 10% Complemented by Iron Ore
p y
JORC / NI43‐101 Fully permitted ready to
Mt Mo% Cu% Ag g/t MoEq% build
classification
Measured resources
M d 206.8
206 8 0.06
0 06 0.10
0 10 1.5
15 0.09
0 09
Indicated resources 445.4 0.04 0.07 1.1 0.06
TOTAL 652.2
652 2 0.04
0 04 0.08
0 08 1.2
12 0.07
0 07
Note—Reserves are a sub‐set of Resources
Inferred resources 399.0 0.04 0.07 1.1 0.06 0.02% Mo cut‐off assumed for resources
0.03% Mo cut‐off assumed for reserves
Capacity for life
extension & expansion 1 – Mo equivalent calculated on contained metal @
4QCY10 average metal prices
23. MOLY
US$500M Project Financing Platform MINES
23 LIMITED
10 MT/A Resource
Pit Shell
Hanlong US$200M equity and debt injection ‐ completed April 2010
Chinese engineering study completed, China Development Bank credit committee approvals July 2010
Sichuan Provisional Development and Reform Commission financing proposal acceptance August 2010
Term Sheet negotiation initiated
Term Sheet negotiation initiated September 2010
September 2010
• Corporate facility, 12 year loan term, US LIBOR plus margin equivalent to <5% interest rate 20Mtpa
• Negotiations with preferred Chinese and Australian engineering construction contractors Resource
• Parent company guarantees and asset pledges from Hanlong 0.02% Mo Shell Pit Shell
National Development Reform Commission approval for funding to be made available December 2010
China Development Bank issues commitment letter for up to US$250M January 2011
China Development Bank extends approval to US$500M April 2011
Commencement of full project finance facility documentation February 2011
• Construction contracts the major new contractual conditions required for facility completion
• Banking and legal due diligence
Award of EPC contract to CACS and GRES May 2011
Target date for completion of Facility Agreement documentation End June 2011
Expected availability of funds and decision to proceed with project 2nd half 2011
0.09% Mo Shell
0.09% Mo Shell
‐ High Grade Core
24. MOLY
Competence and Responsibility MINES
24 LIMITED
Molybdenum Copper
l bd
The information in this release that relates to drill data and geological interpretation is based on information compiled by Dr Derek Fisher, Mr Ben
Cairns who are Members of the Australasian Institute of Mining and Metallurgy. The information in this release that relates to Mineral Resources is
based on information compiled by Mr Clay Gordon who is a Member of The Australasian Institute of Mining and Metallurgy and the Australian Institute
of Geoscientists. Dr Fisher is employed by Trillium Investments Pty Ltd which is contracted to provide management services to Moly Mines, Mr Cairns
p y y y p g y
is a full‐time employee of Moly Mines and Mr Gordon is employed by Mining Assets Pty Ltd.
Each of Dr Fisher, Mr Cairns and Mr Gordon have sufficient experience which is relevant to the style of mineralization and 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 Exploration Results, Mineral Resources and Ore Reserves They consent to the inclusion in this release of the matters based on their
Reporting of Exploration Results Mineral Resources and Ore Reserves’. They consent to the inclusion in this release of the matters based on their
information in the form and context in which it appears.
Iron Ore
The information in this presentation that relates to drill data and geological interpretation is based on information compiled by Mr Ben Cairns who is a
Member of the Australian Institute of Geoscientists. The information in this presentation that relates to Mineral Resources is based on information
p
compiled by Mr Clay Gordon who is a Member of The Australasian Institute of Mining and Metallurgy and the Australian Institute of Geoscientists. Mr
Cairns is a full‐time employee of the company and Mr Gordon is employed by Mining Assets Pty Ltd.
Both Mr Cairns and Mr Gordon have sufficient experience which is relevant to the style of mineralisation and 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
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
Exploration Results, Mineral Resources and Ore Reserves’. Both Mr Cairns and Mr Gordan are Qualified Persons within the meaning of such term under
National Instrument NI43‐101 . Mr Cairns and Mr Gordon consent to the inclusion in this presentation of the matters based on their information in the
form and context in which it appears.
The information contained in this presentation that relates to Mineral Reserves is based on information compiled and verified under the supervision of
Mr Roger Pooley who is a Member of The Australasian Institute of Mining and Metallurgy. Mr Pooley is a Senior Mining Consultant with SRK Consulting
(Australasia) Pty Ltd, and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the
activity which he is undertaking to qualify as a Qualified Person for purposes of National Instrument 43‐101 and as a Competent Person as defined in
the 2004 edition of The Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves under JORC.
p g p ,
Mr Pooley consents to the inclusion in the presentation of the matters based on his information in the form and context in which it appears in this
document.
