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REIS 2013 Broken Hill - Eastern Iron ASX:EFE


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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 - 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.

Published in: Education, Business, Technology

REIS 2013 Broken Hill - Eastern Iron ASX:EFE

  1. 1. Resources and EnergyInvestment SymposiumMay 2013
  2. 2. DisclaimerThis release may include forward-looking statements. These forward-looking statements are based on management’s expectations and beliefsconcerning future events. Forward-looking statements are necessarily subject to risks, uncertainties and other factors, many of which are outsidethe control of Eastern Iron Limited, that could cause actual results to differ materially from such statements. Eastern Iron Limited makes noundertaking to subsequently update or revise the forward-looking statements made in this release to reflect events or circumstances after the dateof this release.The information relating to the terms “iron ore”, “exploration target”, direct shipping ore”, “beneficiation” and “upgrade” should not be misunderstoodor misconstrued as an estimate of Mineral Resources and Reserves as defined by the JORC Code (2004) and therefore the terms have not beenused in this context. It is uncertain if further exploration or feasibility study will result in the determination of a Mineral Resource or Mining Reserve.This overview of Eastern Iron does not purport to be all inclusive or to contain all information which its recipients may require in order to make aninformed assessment of the Company’s prospects. You should conduct your own investigation and perform your own analysis in order to satisfyyourself as to the accuracy and completeness of the information, statements and opinions contained in this presentation and making anyinvestment decision.The information contained herein is general in nature and does not constitute financial product advice. If necessary, you should seek specificfinancial advice of your stockbroker prior to making any investment decision. This presentation has been prepared without taking into account theinvestment objectives, financial situation or particular needs of any investor.The information in this report that relates to Exploration Results and Mineral Resources is based on information compiled by Greg De Ross, BSc,who is a Fellow of the Australasian Institute of Mining and Metallurgy. Greg De Ross is CEO and a full-time employee of Eastern Iron Limited andhas sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration to the activity which he isundertaking to qualify as a Competent Person as defined in the 2004 Edition of the “Australasian Code for Reporting of Exploration Results, MineralResources and Ore Reserves”. Mr De Ross consents to the inclusion in the report of the matters based on his information in the form and context inwhich it appears.
  3. 3. Overview• Eastern Iron Limited (ASX:EFE) is an advanced exploration company with three significantiron projects on the East Coast of Australia• Targeting low capex, high margin iron ore developments, close to bulk transport/exportinfrastructure• Present focus on high grade Nowa Nowa magnetite/hematite deposit in VIC• Scoping study complete with robust economics – full feasibility now underway• Current JORC resource of 11.5Mt @ 49% Fe• Low CAPEX, excellent infrastructure in place• Ongoing negotiation with potential strategic partners for large scale QLD magnetite deposits• Resource upside – currently drilling prospective targets• Board & Management team - track record of identifying and developing bulk commoditydeposits
  4. 4. Corporate OverviewCapital Structure• 114.6 million shares on issue• $1.76 million cash (31 March)• PlatSearch NL (ASX:PTS) majorshareholder (46%)• Share price: 5.0c (9 May)• Ev $5M• Top 20: 80.4% of issued sharesExperienced Board and ManagementChairman: Steve GemellMD: Greg De RossNED’s : Greg Jones, Wendy Corbett, IvoPolovineo, Adrian Critchlow
  5. 5. Nowa Nowa Iron Project• Eastern Victoria – good local power,roads, labor, port infrastructure• 50km2 under exploration license• 100% owned by Eastern Iron• Existing global resource 11.5Mt @49% Fe at a lower cutoff of 40% Fe• Multiple deposits; further resource andexploration upside• Unoccupied Crown land – heavilylogged State Forest• DFS scheduled for completion in 2013
  6. 6. Five Mile Deposit• Drilled in 1950’s byVic Govt.• Massivemagnetite/hematitebody• Unoccupied CrownLand• 11Mt @ 49.8% FeResource• EFE has drilled 8diamond holesSeven Mile Deposit• High grade high silica hematite at surface• Potential small open cut at start ofdevelopment• Inferred 0.55Mt @ 48.3% Fe – potential toexpand resource• Single diamond drillhole 71.4m@46.3Fefrom surface• 5 additional holes drilled in Q2 2013Nowa Nowa – ProspectsSix Mile Deposit• Exploration upside –yet to be drilled
  7. 7. • Massive replacementmagnetite mineralisation• Ore body horizontal approx70m thick• Recent drilling resultsconfirm historical drillingNND014 62.9m from 67.7m @57.6% Fe, 9.78% SiO2, 1.77%Al2O3, 0.03% PFive Mile Prospect
  8. 8. • Multiple bodies of massivemagnetite• Exploration and resourceupside potential:• Extensions to Five Mile• Undrilled Six MileFive Mile Prospect7 Mile: 0.55Mt1DSO hematite6 Mile: undrilled5 Mile: 8.92Mt150%Fe mag/hem1 Details included in resource announcement byEFE on 10 Feb 2012
  9. 9. Item OutcomeMining rate Max 4.8Mtpa (ore and waste)Life of Mine (LoM) 8 yearsAverage production (Over LoM) 0.8MtpaLoM waste:ore ratio 2.3:1Average grade +61%Fe (fines) productCapex $32 millionFOB Cost/tonne $70LOM revenues $800 million+Mass recovery to product 65-70%*Scoping Study assumed 1$A:1$US; PB Fines $110/t FOB Eden.Scoping Study- Key outcomes
  10. 10. Nowa Nowa - Scoping Study ResultsMining• Open Cut mining 1Mtpa. LOM strip ratio 2.3 (inc overburden)Processing• Ore crushed to -1.6mm (not a concentrate!!)• Wet low intensity magnetic separation (LIMS)• 0.7Mtpa high grade +62% Fe “fines” product• Av 66% yield and 75% iron recoveryCrush size mm Mass Rec% Fe% SiO2% S% Fe Rec %WetLIMS1.6 66.1 64.2 6.8 0.4 75.6
  11. 11. Nowa Nowa – Transport Solution• Excellent infrastructure from mine site to port – simpletransport and export solution• Port facility – existing wharf an bulk loader vesselcapacity 55,000t• Product trucked 220km along sealed (Princes) highwayto Eden (std. B doubles)• Product stockpiled and loaded at SEFE Port facility –Two Fold bay• MOU with Port operators (SEFE) in place
  12. 12. Nowa Nowa - Feasibility Study• Project Manager – Engenium Ltd, WA based project delivery and projectengineering• Process Metallurgy – Resource Engineering Pty Ltd• Metallurgical Testwork – ALS Global – AMMTEC• Resource studies – H&S Consultants• Mining Studies – McCracken Mining Serv./ Mining One EnvironmentalAssessment – Earth Systems Pty Ltd
  13. 13. Nowa Nowa - Feasibility StudyDue for completion December 2013DFS to Investigate several project enhancements:• Increase iron recovery – scalping hematite from non magnetic process tail• Tailings 40% by weight hematite• Increasing rec to 85% adds +100kt product• Simple jigs and spirals• Reduce transport costs• Higher capacity trucks• Seven Mile Deposit• 1Mt possible weight coat production during year 1• Use of existing stockpiles areas at SEFE• Potential to reduce capital costs
  14. 14. Nowa Nowa – Activity OutlookApr – Jun13 Jul – Sep13 Oct – Dec13 Jan – Mar13Feasibility Study Large diameter core drillingfor metallurgical and markettesting Investigate projectenhancements Firm port arrangements Investigate off take options Opex and Capex estimatesPermitting Environmental base line Cultural Heritage Plan Project Referral EES/PermittingTargeting project commitment early 2014 and first production late 2014
  15. 15. A$168/t - 70MtpaA$105.7/t - 2MtpaA$132.6/t - 2MtpaA$116/t - 5.5MtpaA$90/t – 5.2MtpaA$95/t - 4.5MtpaA$6/t - 1MtpaFortescue MetalsNorthern IronGrange ResourcesAtlas IronMount GibsonIronBC IronEastern IronEastern Iron – Value PropositionEastern Iron poised for a valuation re-rating as the Nowa Nowa Project moves fromcompletion of Feasibility Study, to Production.Enterprise Value – Iron producersRevenue from Nowa Nowa development equivalent to a 80k oz gold producer, but atmuch lower capital cost and therefore higher return
  16. 16. • Eastern Iron is focused on:• Potential for near-term development of Nowa Nowa• Realising value from its large scale Queensland magnetite project• Potential to complete feasibility study & commencement of production by mid 2014.• Nowa Nowa – 2013• Metallurgical drilling and testwork• Update resource model• Market testing• Agreements on port access• Complete Feasibility study• Queensland Iron Project - progress discussions for farm out.• Pursue strategic acquisition opportunitiesInvestment Summary
  17. 17. Eastern Iron LimitedLevel 1, 80 Chandos StreetSt Leonards, NSW 2065T: +61 2 9906 @EasternIronEFE
  18. 18. APPENDIX
  19. 19. • Medium term pricing will be determined by pace of new supply additions (over-estimated?) andthe capital and operating costs of new capacity• Successful new projects will be those with low capital intensity (low capex/tonne of annualproduction) and low operating cost – high return eg: Nowa Nowa est $30-50/ annual tonneIron Ore Pricing – look for value
  20. 20. Recent downturn due to destocking in ChinaSource Macquarie Research July Sept 2012Recent prices below $90/t were temporary due to Chinese destocking and have rebounded asbuyers returned to the market (currently Pilbara Fines $120-125/t CNF China).