REIS 2013 Broken Hill - Centrex Metals ASX:CXM


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Company presentation given at the Resources & Energy Investment Symposium in Broken Hill, May 2013

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REIS 2013 Broken Hill - Centrex Metals ASX:CXM

  1. 1. DEVELOPING RESOURCES FOR DEVELOPING MARKETSDEVELOPINGRESOURCESFORDEVELOPINGMARKETSBroken Hill Resources &Energy InvestmentSymposiumMay 2013Gavin BoschGeneral Manager Finance
  2. 2. DEVELOPING RESOURCES FOR DEVELOPING MARKETSFORWARD LOOKING STATEMENTS• These materials include forward looking statements. Forward looking statements inherently involve subjectivejudgement and analysis and are subject to significant uncertainties, risks and contingencies, many of whichare outside of the control of, and may be unknown to Centrex Metals Limited („Centrex‟ or the „Company‟).• Actual results and developments may vary materially from those expressed in these materials. The types ofuncertainties which are relevant to the Company may include, but are not limited to, commodity prices, politicaluncertainty, changes to the regulatory framework which applies to the business of the Company and generaleconomic conditions. Given these uncertainties, readers are cautioned not to place undue reliance on suchforward looking statements.• Forward looking statements in these materials speak only at the date of issue. Subject to any continuingobligations under applicable law or any relevant stock exchange listing rules, the Company does not undertakeany obligation to publicly update or revise any of the forward looking statements or any change in events,conditions or circumstances on which any such statement is based.• Forward looking statements include, but are not limited to, statements concerning Centrex‟s plannedexploration program, targeted resources, commencement of product export and other statements that are nothistorical facts. When used in this document, the words such as “could”, “target”, “plan”, “estimate”, “intend”,“may”, “aim”, “potential”, “should”, and similar expressions reflected in these forward-looking statements arereasonable, such as statements involving risks and uncertainties and no assurance can be given that actualresults be consistent with these forward-looking statements.
  3. 3. DEVELOPING RESOURCES FOR DEVELOPING MARKETSTHE KEY MESSAGES• Three significant Chinese backed joint ventures covering iron ore, basemetals and a deep-water port• Newly defined iron ore deposit at Kimba Gap• Acquiring more projects and seeking to form additional internationalpartnerships• Attracting foreign investment to fund project development and grow thebusiness• A$ 46.5M uncommitted cash (31 March) after recently paying A$ 15.7Mfully franked special dividend• Developing cost effective infrastructure and export solutions for projects• New representation in India to build an additional investment base
  4. 4. DEVELOPING RESOURCES FOR DEVELOPING MARKETSCOMPETITIVE STRENGTHS & STRATEGY• Substantial and growing bank of end to end project knowledge• Management team with strong total supply chain operational experience (iron ore, coal,phosphate, gold and steel)• Strong international partnerships“Acquire, define and develop a portfolio of resource projects for developing markets toprovide shareholder value.”Our focus is on;• Bulk commodities• End to end project solutions• Value extraction• Optimising capital risk
  5. 5. DEVELOPING RESOURCES FOR DEVELOPING MARKETSBOARD & MANAGEMENTDavid Klingberg AOFTSE, D UniSA, BTech,FIEAust, FAusIMM, FAICDNon-Executive Chairman• Former CEO of KinhillLimited• Former Chancellor of theUniversity of SouthAustraliaJim HazelBEc, SFin, FAICDNon-Executive DirectorGraham ChrispBTech (CE)Non-Executive DirectorJohn den DryverBE (Mining), MSc, FAusIMMNon-Executive DirectorJim WhiteBApp Sci (Met), FIEAust, CP EngExecutive DirectorPoh KiatDip CENon-Executive DirectorLu BingqiangBE (Mining)Non-Executive DirectorBen HammondBSc (Geol), MBA, MAusIMM, GAICDActing-CEOAlastair WattsBSc (Geol), Dip Bus, MAusIMMGM ExplorationGavin BoschBCom, CPA, CSAGM Finance & CompanySecretarySteve BrownBeng (Elec), MEAust, CP EngChief Operating Officer (EyreIron Pty Ltd)Angela WebbCA BA (Acc), GDip Fin, GDip ACG,GAICDFinance Manager & CompanySecretary (Eyre Iron Pty Ltd)AK TareenChief Advisor – StrategicInvestments India & South Asia
  6. 6. DEVELOPING RESOURCES FOR DEVELOPING MARKETSCENTREX OVERVIEW• Eyre Iron Joint Venture - 40% interest in magnetite iron oreprojects with Wuhan Iron & Steel funding first $75M ofdevelopment; 680Mt Mineral Resource at flagship Fusionproject• Port Spencer Joint Venture - 50% interest in proposed deep-water port facility with Wuhan Iron & Steel to fund next $4M ofdevelopment; State Government approval received• Bungalow Joint Venture – Baotou Iron & Steel earning 50%interest by funding first $40M of development; 338Mt MineralResource• Goulburn Joint Venture - Shandong 5th Geo-MineralProspecting Institute earning 35% for $2M exploration; abilityto earn 80% by funding to production• Wilgerup - 100% interest 13.3Mt Indicated DSO Resource• Kimba Gap – Recently announced independent magnetiteExploration Target• Gundaroo - Exploration Licence Application for NSW Gold-Base Metals project near GoulburnBaseMetalsIronIronIronPort
  7. 7. DEVELOPING RESOURCES FOR DEVELOPING MARKETSCORPORATE OVERVIEW• Capital Structure (ASX:CXM)– Shares on Issue: 313.6M– Options & Rights on Issue: 3.3M– Market Capitalisation (@ $0.14): A$ 43.9M– Cash (31st March 2013): A$ 46.5MTop 10 Shareholders % Issued CapitalSouth Cove Ltd 25.8Wugang Australian Resources Investment Pty Ltd 12.9Baotou Iron & Steel (Group) Company Ltd 7.0HSBC Custody Nominees (Australia) Ltd 5.3SEL Holdings Ltd 5.2United Iron Ltd 4.8Mr Sik Ern Wong 2.6Davan Nominees Pty Ltd 2.0Mr Melvin Boon Kher Poh 1.7Keng Chuen Tham 1.4Total 68.7
  8. 8. DEVELOPING RESOURCES FOR DEVELOPING MARKETS• Joint Venture with Wuhan Iron & Steel funding first A$ 75M ofdevelopment• 680Mt Mineral Resource defined at the Fusion MagnetiteProject, including 312Mt Measured and Indicated• Additional Exploration Targets to be drilled out• Targeted at 5Mtpa premium >67% Fe concentrate production• Competitive advantages− Backed by a major end user of magnetite− Cost effective 40km slurry pipeline to port− Low-cost Cape capable port development− Power from the national grid− Water via desalination plant at port• Definitive feasibility study well underway with final scope to beagreed mid 2013• Total Joint Venture Mineral Resource of 894Mt across Fusion,Carrow and Greenpatch projectsEYRE IRON JOINT VENTURE (CXM 40%)For details of resources see announcement 18th February 2013
  9. 9. DEVELOPING RESOURCES FOR DEVELOPING MARKETSPORT SPENCER (CXM 50%)• Joint Venture with Wuhan Iron & Steel for thedevelopment of a deep-water bulk commodity exportfacility at Port Spencer• Multi-user facility with 20Mtpa capacity using a 5,000tphshiploader• Able to double capacity with 10,000tph shiploader• 515m jetty to deep water loading Cape vessels on anytide• No dredging required and no cyclones• Underpinned already by two magnetite joint ventures,DSO project and grain consortium• Land already owned for 3rd party user subdivisionfeeding on to common central conveyor• South Australian government development approval forPhase 1 received December 2012• Federal Government referral process underway
  10. 10. DEVELOPING RESOURCES FOR DEVELOPING MARKETSBUNGALOW JOINT VENTURE (CXM 70%)• Baotou Iron & Steel have a 30% interest afterhaving funded A$ 24M of development• Baotou have the right to commit a furtherA$ 16M to earn a 50% interest• 338Mt Mineral Resource including 22MtMeasured and 164Mt Indicated• 5Mtpa of magnetite concentrate production to beexported via a 100km slurry pipeline from PortSpencer• Achievable infrastructure solutions for power,water and product transport• Backed by a major end user of magnetite• Prefeasibility Study expected completion in2013For details of resources see announcement 25th May 2012
  11. 11. DEVELOPING RESOURCES FOR DEVELOPING MARKETSGOULBURN JOINT VENTURE (65%)• JV Agreement signed for $2Mexploration program for Shandong 5thGeo-Mineral Prospecting Institute toearn 35%• Requires Chinese and AustralianGovernment approvals• Second stage option for Shandong toearn 50% by funding a BankableFeasibility Study• Third stage option for Shandong toacquire 80% by funding through toproduction• Promising IP anomalies near historicallydefined Zn-Pb-Cu mineralisation• Drilling access and permits in place• Diamond drilling program planned for2013 once joint venture transactioncompleted
  12. 12. DEVELOPING RESOURCES FOR DEVELOPING MARKETSWILGERUP (100%)• 100% Centrex owned DSOhematite project at Wilgerup• Massive hematite JORCIndicated Resource of13.3Mt @ 57.7% Fe• All mining approvalsreceived• Off-take agreements alreadyin place• Develop in line with PortSpencer• 6 additional DSO targetsidentified from recent gravitysurveyFor details of resources see announcement 23rd October 2009
  13. 13. DEVELOPING RESOURCES FOR DEVELOPING MARKETSNEW PROJECTS (CXM 100%)Kimba Gap• 4km strike of outcropping banded iron formation (BIF)coincident with magnetic and gravity anomalies• Exploration Target of 275Mt to 420Mt of magnetite BIFat between 21% and 27% DTR*• Drilling to date shows potential high iron low silicaconcentrate product• Prospect located 50km north of Bungalow JointVenture with potential for combined operation*The potential quality and grade is conceptual in nature andthere has been insufficient exploration to define a MineralResource. It is uncertain if further exploration will result in thedetermination of a Mineral Resource.Gundaroo• Exploration Licence Application 4744 roughly 10kmwest of Goulburn project in NSW• 280km2 covering a structural corridor with historicallydefined gold and base metals mineralisation
  14. 14. DEVELOPING RESOURCES FOR DEVELOPING MARKETSCORPORATE & BUSINESS DEVELOPMENT• Actively pursuing acquisition opportunities in early stage bulk commodityprojects• Centrex to take acquisitions through conceptual development andresource definition• Leveraging off international networks to fund project developments• Proven track record of securing foreign investments with third Chinesebacked joint venture agreement in January 2013• Former South Australian Senior Trade Commissioner to India appointed toaid with marketing current and future projects• Capital management review identified Centrex had funds surplus to itsmedium term requirements leading to A$ 15.7M fully franked dividendbeing paid in early 2013• Special dividend a reward for long-term shareholders• A$ 46.5M in uncommitted cash remaining after dividend
  17. 17. DEVELOPING RESOURCES FOR DEVELOPING MARKETSCOMPETENT PERSON STATEMENTThe information in this report relating to Exploration Targets is based on and accurately reflects information compiled by MsSharron Sylvester of AMC Consultants Pty Ltd who is a consultant and adviser to Centrex Metals Limited and who is a Memberof the Australian Institute of Geoscientists (RPGeo). Ms Sylvester has sufficient experience relevant to the style of mineralizationand type of deposit under consideration and to the activity she is undertaking to qualify as a Competent Person as defined in the2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Ms Sylvesterconsented to the inclusion of this information in the 17th May 2013 announcement in the form and context in which it appeared inthat document.