Arianne Resources (TSX-V:DAN) Corporate Presentation

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Arianne Resources (TSX-V:DAN) Corporate Presentation

  1. 1. Lac à Paul Project – Arianne Resources Inc. January, 2012
  2. 2. Disclaimer Total resources include all categories unless otherwise stated. All currency are in US $ unless otherwise stated. This presentation contains forward looking statements. All statements, other than statements of historical fact, included herein, including without limitation, statements regarding potential mineralisation and reserves, exploration results and future plans and objectives of d’Arianne Resources Inc, are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from d’Arianne Resources Inc’s expectations are disclosed under the heading "Risk Factors" and elsewhere in d’Arianne Resources Inc’s documents filed from time-to-time with the TSX Venture and other regulatory authorities.20/02/2012 Copyright © 2009 Arianne Resources Inc . Slide: 2
  3. 3. Overview Arianne Resources is a minerals company focused on developing our principal asset, the Lac à Paul Phosphate Project Lac à Paul Project – Phosphate Rock Concentrate mine located in Saguenay-Lac-St. Jean region,Quebec, Canada • Pre-feasibility Study completed by Met-Chem in November 2011 – Measured and Indicated Resources now 348 Million mt at 6.5% P2O5 – Inferred Resources of additional 114 Million mt at 5.5% P2O5 – Mine life of 25 years at 2 Million mt/yr 85 BPL P2O5 concentrate – Initial Capital of $649 Million TSXv: DAN (Jan 6, 2012) – Operating Costs FOB Rail of $98/mt P2O5 concentrate Shares Outstanding 66.3 million Options 5.4 million – Assumed Life of Mine Concentrate Sales Price of $175/mt in constant dollars Warrants 11.4 million – NPV (8%): Pre-tax $684 Million, After- Fully Diluted 83.1 million tax $362 Million Recent Share Price $1.20 – After-tax Payback Period of 5.2 years Market Capitalization (FD) $99.7 million Cash $5.5 million Debt $020/02/2012 Copyright © 2009 Arianne Resources Inc . Slide: 3
  4. 4. Overview Lac à Paul Project – Phosphate Rock Concentrate mine located in Saguenay-Lac-St. Jean region,Quebec, Canada • COREM and Jacobs Engineering Testwork completed October 2011 ‒ Mill recovery at 90% yields 39% P2O5 concentrate with MER of 0.079 ‒ Acidulation testing confirmed 98% recovery of P2O5 to phosphoric acid ‒ Low corrosion of 6.5 mils/yr for 317L and 1.9 mils/yr for 904L ‒ Low sulfuric acid use at 2.18 mt/mt P2O5 ‒ Low gypsum production of 3.94 mt/mt P2O5 ‒ MAP and DAP exceeding standard grades for N and P2O5 ‒ High quality concentrate suitable for blending with low-quality rock • Existing power, logistics, population + governmental, community and first nations support = low-cost production of high-quality product available to supply global export phosphate rock market.20/02/2012 Copyright © 2009 Arianne Resources Inc . Slide: 4
  5. 5. The Arianne Team Bernard has extensive experience in the resource sector. Prior to Arianne, he served as director of theBernard Lapointe Sanguenay-Lac-Saint-Jean Mining Fund. He acted as a geochemist analyst for the Centre for Research inCEO, Director Mineral Resources of University of Quebec. Bernard holds a B.A. in geology from the University of Quebec, a Masters degree in structural geology from University of Quebec, and a Ph.D. in mineral resources from the University of Quebec. Jim is a metallurgical engineer with an MBA in finance. He worked in various roles from Mill Metallurgist toJim Cowley Financial and Business Development manager, where he acted as a negotiator in the sale and purchase ofPresident, Director mineral assets for Exxon, Climax Molybdenum and Rio Tinto. Luc is currently VP Finance and Marketing of Fromagerie Boivin. He also serves on different boards ofLuc Boivin directors including Promotion Saguenay. Luc is the chairman of Technologie Biolatis.Director Dave is a retired metallurgical engineer. He served as Vice President of Energy and Raw Minerals at Agrium, aDave DeBiasio leading global fertilizer company where he actively participated in the development of the KapuskasingDirector phosphate mine. Marco is a senior mining exploration professional with 20 years of experience, mostly with major miningMarco Gagnon companies. He is currently President and CEO of Adventure Gold, a Montreal-based gold explorationDirector company. He was a founder and former President and CEO of Focus Metals. He worked with Inmet Mining, Barrick Gold, Minnova and Radisson Mining Resources. He has a graduate degree in geology from the University of Quebec. Guthrie has over 25 years’ experience in private equity investments, senior management and corporate law.Guthrie Stewart Until Dec 2007, he was a partner of the Equity Fund of EdgeStone Capital Partners. He is currently serving asDirector, Secretary the Chairman of Orbit Garant Drilling. He earned an LL B. from Osgoode Hall Law School and an MBA from INSEAD, EuropeAlain Vachon Alain is a geologist with more than 30 years experience in the mining industry. He has worked for Exploration Noranda, Barrick, and with Rouyn Mining Resources where he was chief geologist of mining operations. In theDirector past 12 years, Alain worked mainly in Peru with Sulliden, Gold Hawk and Paramount Gold. Slide: 5
  6. 6. History & Going ForwardBrief History of Lac à Paul• Property discovered in late 1990s – Originally explored for Nickel – Phosphate/Titanium was discovered• Market in 1990s was not ready for the project• Listed in 2003• Phosphate price escalated in the last 2-3 years, and theCompany decided to move the project forward• Established Initial Resource• Completed Scoping Study• Completed Pre-feasibility StudyKey Catalysts• Evaluation of increased production scenario (3.0 Mtpy)and recovery and sale of titanium concentrate (Early 2012)• Feasibility to commence after the evaluation• Drilling the Paul Zone and other zones including Lucieand Nicole Zones Slide: 6
  7. 7. Phosphate and the World Phosphorous is an essential ingredient in fertilizers Phosphate Rock Demand used for plant and root development • Phosphate Rock demand reached record • There are no substitute for phosphates in fertilizers levels in 2010 and is projected to grow at an annual rate of 2% through 2020 • 87% of all phosphate supply is used for fertilizers • Demand for high P2O5, low Cadmium rock will dominate phosphate rock trade in EU and North America Phosphate Production and Consumption1, 2 • CRU projects that phosphate prices will remain high, having been undervalued vs.(in mt) Production Consumption Surplus/ MAP/DAP prices in past 2010 2020 Growth 2010 2020 Growth DeficitEurope 13.3 15.1 1.3% 19.6 20.5 0.5% (5.4) • Global phosphate rock mining capacityAfrica 42.2 58.2 3.3% 26.9 40.4 4.2% 17.8 utilization will climb to near-record levelsNorth America 26.2 24.8 (0.5%) 32.1 31.3 (0.2%) (6.5) of 85% by 2020Latin America 8.3 16.7 7.2% 10.6 16.4 4.5% 0.3Middle East 14.0 21.1 4.2% 6.7 16.1 9.2% 5.0 • North American phosphate importAsia-Pacific 74.2 82.4 1.1% 83.7 93.6 1.1% (11.2) requirements will grow to 6.5mt by 2020World 178.2 218.3 2.1% 179.6 218.3 2.0% - • Lac a Paul is not included in CRU production estimatesNote1 CRU; Phosphate Rock 10-Year Outlook 2011, updated in Sep 20112 Growth is based on 2010-2020 annual growth rate Slide: 7
  8. 8. Lac à Paul Project located 200 km north of the town of Saguenay in the Saguenay-Lac-St-Jean region, Québec, Canada The property covers an area of more than 25,000 hectares or 250 km² Road Train Key Highlights • Existing heavy-duty road, rail line and port = excellent access to export market • Existing hydro-power facilities nearby (35 km) = low power cost • Saguenay-Lake St. Jean area population of 300,000 = high- quality labor pool20/02/2012 Copyright © 2009 Arianne Resources Inc . Slide: 8
  9. 9. Lac a Paul Chute-des-Passes RoadPower Generation Project • Well-maintained heavy-duty gravel• Power requirement of 46 MW road supporting logging industryeasily supplied by 750 MW Rio Chute-des-Passes • 165 mt capacity road & bridgesAlcan Chute-des-Passes dam 35 support 115 mt/truck phosphate rockkm away or 450 MW Peribonka IV loadsHydro Quebec dam. • 210 km from project to railhead at Dolbeau requires 2 truck loads/hour Peribonka IV Saguenay Port • Year-round deep water port supports cape-size vessels. • Capacity for 4 million mt/yr concentrate storage, handling and ship-loading. Saguenay-Lac-St-Jean Region • Connection to rail infrastructure in progress. • Population of 272,610 • Largest City: Saguenay (Pop: 143,692) • Work force: 127,500 (Sep 2011) Lac Saint-Jean • Unemployment Rate: 7.5% (Sep 2011)Rail• Rail access at Dolbeau-Mistassini,210km away from the project via road• Connected to North American RailNetwork (CN) 20 km Copyright © 2009 Arianne Resources Inc . Slide: 9
  10. 10. Lac à Paul Proven and Problable ReservesPaul Zone extension and other known mineralizations 1 km20/02/2012 Copyright © 2009 Arianne Resources Inc . Slide: 10
  11. 11. Lac à Paul Paul Nicole Proven and Problable Reserves ManouanePaul Zone extension and other known Lucie mineralizations 1 km20/02/2012 Copyright © 2009 Arianne Resources Inc . Slide: 11
  12. 12. Pre-Feasibility Study Highlights Prefeasibility Study • Open-pit mining operations at the Paul and Assumed Concentrate Price $175/tonne Manouane Zones Annual Concentrate Production ~2mtpa Mine Life 25 years • Low Strip Ratio of 0.83 Direct CAPEX $454 million • Annual Production of 2 million tonnes of 39% Indirect CAPEX $121 million P2O5 apatite concentrate Contingency $74 million Total CapEx $649 million • Average selling price of the concentrate Cash Operating Cost (mine site) $87/tonne $175/tonne (2015 to 2020) Cash Operating Cost (Train FOB) $98/tonne ‒ Comparable to 85 BPL Russian grade concentrate Capital Payback (before tax) 4.7 years • Estimated mine life: 25 years at 33,000 IRR (before tax) 19.2% tonnes/day with 89% mill recovery rate NPV (8%) (before tax) $684 million Capital Payback (after tax) 5.2 years IRR (after tax) 15.2% 3 million mt/yr Phos Rock Production NPV (8%) (after tax) $362 million Rate Scenario (preliminary figures) • Initial Capex increases by 20% to ~$780 million • Pre-tax NPV (8%) increases to $1 Billion • Operating costs fall considerably (~20%)20/02/2012 Copyright © 2009 Arianne Resources Inc . Slide: 12
  13. 13. Future Mine Capital Costs Estimate ($ million) Mine 66.7 Ore process (mill) 336.6 Tailings and water management facilities 18.4 General services and infrasctructure at mine site 61.9 Service vehicles and equipment 7.6 Insurance and spare parts 10.4 Power and communication 67.2 Stockpile and rail car load-out 80.2 CRUSHER ORE Total capital cost 649.0 AGGREGATE FUEL AND RECLAIM PLANT GARAGE ADMIN20/02/2012 Copyright © 2009 Arianne Resources Inc . 13
  14. 14. Open-pit Paul CRUSHER ORE AND RECLAIM AGGREGATE FUEL ADMIN GARAGE PLANT20/02/2012 Copyright © 2009 Arianne Resources Inc . 14
  15. 15. Resources NI 43-101 Updated NI 43-101 Resources • M&I resources quadruple over the previous resource estimates • Fall 2011 drilling program has extended Paul zone from 1.3km to 2.0km strike length and still open in both directions and below 400m • Manouane Zone covers an area of about 1000 metres long by 250m wide and is open at depth over 300m • Drilling program in progress Paul Zone1 Manouane Zone1 Zone 21 Total Mt P2O5 TiO2 Mt P2O5 TiO2 Mt P2O5 TiO2 Mt P2O5 TiO2 (%) (%) (%) (%) (%) (%) (%) (%) Measured (M) 22.1 6.82 7.89 136.9 5.93 8.77 - - 159.0 6.05 8.65 Indicated (I) 161.8 7.1 8.21 26.9 5.64 8.46 - - 188.7 6.89 8.24 Total (M&I) 183.9 7.06 8.17 163.8 5.88 8.72 - - 347.7 6.50 8.43 Inferred 50.3 6.61 8.25 - - 64 4.55 4.57 114.3 5.46 6.90 NOTE 1 Cut-off grade of 2.43% P O 2 520/02/2012 Copyright © 2009 Arianne Resources Inc . Slide: 15
  16. 16. Products Content Content P2O5 (%)1 39.1 Total SiO2 (%)1 2.49 CaO (%)1 52.1 Acid Insoluble SiO2 (%)2 1.81 MgO (%)1 0.96 Acid Soluble SiO2 (%)2 0.59 Apatite Concentrate Fe2O3 (%)1 1.67 Organic C (%)2 0.91 • Apatite concentrate with Al2O3 (%)1 0.84 H2O (%)2 0.30 P2O5 content of 39% Na2O (%)1 0.28 CaO/P2O5 Analytical Ratios1 1.33 and and below- K2O (%)1 0.15 F/Soluble SiO21 2.88 detection levels of Cd, Hg, As and F (%)1 1.70 F/(SiO2+Al2O3+MgO)1 0.40 radioactive elements. (Fe2O3+Al2O3)/P2O51 0.064 Cl ppm (water soluble)2 108 (Fe2O3+Al2O3+MgO)/P2O5 (MER)2 0.079 Cl ppm (total)1 860 SO3 (%)2 0.12 Cd ppm1 < 0.5 CO2 (%)2 2.38 Hg ppm 1 < 0.02 INSOL (%)2 1.75 As ppm 1 < 0.05 Phosphoric Acid, Loss of Ignition(LOI)(%) 0.51 U mg/L 1 1 < 0.02 MAP and DAP Production • Produced high quality phosphoric acid, MAP and DAP (exceeds standard grades) • Low corrosion rates (6.5 mils/yr for 317L and 1.9 mils/yr for 904L)3 • Low acid use (2.18 mt/mt P2O5) • Low gypsum production (3.94 mt/mt P2O5) • High recovery from rock to phos acid (98%) • No de-foaming or filtration reagents required in phos acid production. 1 Analysis from Corem 2 Analysis from Jacobs Engineering Inc. 3Note: non-detecable levels of corrosion observed with oxidizer when operating at 30% P O , Jacobs report. 2 520/02/2012 Copyright © 2009 Arianne Resources Inc . Slide: 16
  17. 17. Not All Phosphates Are Created Equal Igneous Deposits Sedimentary DepositsGrade of rock 4-15% P2O5 10-30% P2O5 Igneous Rocks vs.Mining and Sedimentary Rockscrushing Consolidated rocks Very easy if the rocks are • Phosphate rock from Lac à unconsolidated Paul is igneous rockBeneficiation • Phosphate rock from Zone(chemicaltreatment) Paul (average M&I grade of Easy separation and treatment due to carbonate and Recovery % more than 85% (and phosphate separation 7.06%) can be beneficiated to can be >90%) Recovery % between 75 to phosphate concentrate (39% 85% P2O5)Concentrate • Recovery of 89% of P2O5grade 35-41% P2O5 Average grade of 29% P2O5 • Very low content of but can reach 35% P2O5 contaminants in theConcentrate concentratequality Contain very little or not at all Could contain some contaminant contaminant (heavy metals, (Concentrates from carbonite rock uranium,…) could contain more contaminant) Slide: 17
  18. 18. Comparable Companies Stonegate MBAC Arianne Resources M&I: 39.5mt @ 10% M&I: 58.8mt @ 5.0% Inf: 376.3mt @ 9% (Peru) Inf: 24.0mt @ 5.3% (Itafos) M&I: 347.7mt @ 6.5% + + Inf: 114.3mt @ 5.46% M&I: 19mt @ 30.6% Inf: 33.5mt @ 12.4% (Santana) Inf: 12mt @ 30.1% (Idaho) Resources - M&I: 9.8Mt P2O5 M&I: 2.9Mt P2O5 M&I: 22.6Mt P2O5 P2O5 Content Inf: 37.5Mt P2O5 Inf: 9.6Mt P2O5 Inf: 6.2Mt P2O5 Product n/a SSP, P2O5 Concentrate 38% P2O5 Concentrate Cost/tonne n/a US$104.32/tonne (LOM) C$98/tonne NPV n/a US$252.5m (10%) C$684 million (8%) CapEx n/a US$195 million C$649 million Status Conducting Scoping Study PFS Completed PFS completed Geography Peru, Idaho Brazil Quebec Market Cap1 C$168 million C$301 million C$100 million Market Cap / $17.1/t P2O5 $103.8/t P2O5 $4.4/t P2O5 P2O5 Content2Note1 Capital IQ, company filings. As of January 6, 2012. Based on fully-diluted shares2 M&I P O Content only 2 5 Slide: 18
  19. 19. Key Milestones 2012 Milestones 2013 2014 2015 Q1 Q2 Q3 Q4 Additional drilling inside and outside mining zones Environmental Impact Study Additional Metallurgical Work1 Increased Production Scenario Feasibility Study Quebec Government Environment Public Hearings Mine Construction 1to include ilmenite and magnetite product testing.20/02/2012 Copyright © 2009 Arianne Resources Inc . Slide: 19
  20. 20. Summary & Going Forward Key Competitive Advantages of the Lac à Paul Project • Extraordinary M&I resource with highly prospective mineralized zones will yield large, low-cost, long-lived phosphate rock supply source to export market for 25+ years. • Low 0.8:1 strip ratio on existing M&I reserves • High-quality igneous deposit = 90% recovery, 39% (85 BPL) concentrate, high-value product • Conventional truck & shovel mining, concentrating and transport • Existing power and logistics infrastructure ensure competitive cost to export market • Quebecs Plan du Nord will support development with infrastructure investment • Saguenay Communities and First Nations support new employment opportunity • No environmental challenges in resource development-friendly region Next Stages • Evaluation of increased production scenarios (3.0 Mtpy) • More drilling in Paul Zone and other areas including Lucie and Nicole •Feasibility study to commence after the evaluation Paul Zone outcrop20/02/2012 Copyright © 2009 Arianne Resources Inc . Slide: 20
  21. 21. Appendix
  22. 22. Igneous Rock Deposits in the World Rock Concentrate content Tonnes Location content after beneficiation Status Name of site (Mt) (% P2O5) (% P2O5) Khibiny1 Russia 4 000 15 Unknown In operation Tapira Brazil 1010 6.5 35 In operation Kovdor Russia 700 7 Unknown In operation Araxa Brazil 619 15 36 In operation Siilinjarvi Finland 465 4 35.3 In operation Lac à Paul Canada 3482 6.5 39 In development Kapuskasing Canada n/a 24 35 To close by 2013 Catalao Brazil 275 11 35 In operation Jacupiranga Brazil 100 5 36 In operationNotes1 Biggest deposit in the world, resources not updated2 Combine mesured and indicated resources. Slide: 22
  23. 23. Sedimentary Rock Deposits in the World Concentrate Rock Tonnes content after Name of site Location content Status (Mt) beneficiation (% P2O5) (% P2O5) Kara Tau Kazakhstan 800 10.1 Unknown In operation New Valley Egypt 715 25 31 In operation Umm Wu’al Saudi Arabia 537 19 to 35 Unknown In operation Al Jalamid Saudi Arabia 5341 20.4 32-33 In operation Paradise -Legend Australia 3922 15.7 32.5 In development Lee Creek United States 365 30.7 Unknown In operation Arad-Rotem Israel 300 23 to 30 32 In operation Zohar Israel 250 23 to 30 32 In operation Zin Israel 150 23 to 30 32 In operationNotes1 Combined indicated and measured resources2 Combined indicated and inferred resources Slide: 23
  24. 24. Principal Office Contacts – Investors Relations30 rue Racine Est, suite 160Chicoutimi, QC G7H 1P5 Bernard Lapointe, Ph D, geo.Canada CEO bernard@arianne-inc.comTelephone: (418) 549 7316Facsimile: (418) 549 5750 Jim Cowley PresidentEmail: info@arianne-inc.com Telephone: (801) 599-3789Website:www.arianne-inc.com jim@arianne-inc.com

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