Pre-Mined Residue Investor Presentation

For personal use only
29 January 2015
Australian Securities Exchange
Level 5, 20 Bridge Street
SYDNEY NSW 2000
ASX ANNOUNCEMENT
INVESTOR PRESENTATION
The directors of Stonewall Resources Ltd (Company) are pleased to
release the following investor presentation in respect to the Company’s PreMined Residue Project.
By order of the board
MARKET DATA
ASX code:
SWJ
Current share price:
$0.185
Total free floating shares:
519 million
South African shares:
Total shares:
Peter Hunt
Company Secretary
80 million
599 million
DIRECTORS & SENIOR MANAGEMENT
David Murray, Chairman
Trevor Fourie, Director
Nathan Taylor, Director
Liu Yang, Director
James Liu, Director
Lloyd Birrell, CEO
MAJOR SHAREHOLDERS
Khan International Limited
Salamanca Ventures Limited
Buttonwood Nominees Pty Ltd
Murray SA Investment (Pty) Ltd
Hanhong New Energy Holdings Ltd
For personal use only
Investor Presentation
Building South Africa’s New Gold Mining
Powerhouse
January 2015
Strictly confidential
For personal use only
Disclaimer
 This Presentation has been prepared by and issued by Stonewall Resources Limited (ASX:SWJ) (Stonewall or Company) to assist in informing
interested parties about the Company and should not be considered as an offer or invitation to subscribe for or purchase any securities in the
Company or as an inducement to make an offer or invitation with respect to those securities. No agreement to subscribe for securities in the
Company will be entered into on the basis of this Presentation. This Presentation may contain forward looking statements. The forward looking
statements in this Presentation are not guarantees or predictions of future performance and involve unknown risks and uncertainties and other
factors, many of which are beyond the control of the Company, and may involve significant elements of subjective judgement and assumptions as
to future events which may or may not be correct. There can be no assurance that actual outcomes will not differ materially from these forwardlooking statements and projections. You should not act and you must refrain from acting in reliance on any of this Presentation material. This
Presentation has been prepared without taking account of any person’s individual investment objectives, financial situation or particular needs.
Nothing contained in this Presentation constitutes investment, legal, tax or other advice. This overview of Stonewall does not purport to be all
inclusive or to contain all information which its recipients may require in order to make an informed assessment of the Company’s
prospects. Before making an investment decision, you should conduct, with the assistance of your broker or other financial or professional
adviser, your own investigation in light of your particular investment needs, objectives and financial circumstances and perform your own
analysis in order to satisfy yourself as to the accuracy and completeness of the information, statements and opinions contained in this
Presentation. Neither the Company nor its advisers has verified the accuracy or completeness of the information, statements and opinions
contained in this Presentation. Accordingly, to the maximum extent permitted by law, the Company makes no representation and gives no
assurance, guarantee or warranty, express or implied, as to, and take no responsibility and assumes no liability for, the authenticity, validity,
accuracy, suitability or completeness of, or any errors in or omissions, from any information, statement or opinion contained in this Presentation.
 The information in this Presentation that relates to Exploration Results, Exploration Targets, Mineral Resources or Ore Reserves is based on
information compiled by Daniel van Heerden, who is currently employed as a Director and as Principal Mining Engineer by Minxcon Projects (Pty)
Ltd. His qualifications include a B.Eng. (Mining) from the University of Pretoria in 1985 and a M.Com.(Business Administration) from Rand
Afrikaans University (now UJ) in 1993. He is a member in good standing of the Engineering Council of South Africa and is registered as a
Professional Engineer with registration no. 20050318 as well as a Fellow in good standing of the South African Institute of Mining and Metallurgy
with Membership No. 37309 which is a Recognised Professional Organisation’ (RPO) included in a list promulgated by the ASX from time to time.
He has worked as a Mining Engineer for more than 28 years with more than 15 years directly associated with gold mining specifically. Daniel van
Heerden is employed by Minxcon and has 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’. Daniel van Heerden consents to the inclusion in this Presentation
of the matters based on his information in the form and context in which it appears.
Strictly confidential
2
For personal use only
Overview of Stonewall
Share price history (12 months to 1/12/14) (ASX:SWJ)
Share Capital
Shares On Issue
South African Shares (unissued)*
Total
Top 6 Shareholders
519,201,001
79,520,240
598,721,241
Khan International Ltd
154,193,387
30.282%
Buttonwood Nominees Pty Ltd
60,286,762
11.839%
Salamanca Ventures Ltd
57,629,259
11.318%
Unlisted Options @ A$0.20 * *
14,782,011
Murray SA Investments Pty Ltd
52,963,727
10.401%
Convertible Note ***
18,750,000
Hanhong New Energy Holdings Ltd
45,271,041
8.891%
Smart Vision Investment Group Ltd
28,514,028
5.600%
* Put and Call Option Agreement to purchase the remaining issued share capital in Stonewall Mining Proprietary Limited from South African shareholders.
** Exercisable at A$0.20, expiring November 2015.
*** A A$3,000,000 convertible note matures on 16 June 2015 and is convertible at the note holders discretion @ A$.16 per share equal to 18,750,000 fully paid ordinary shares.
Strictly confidential
3
For personal use only
Investment Summary
Stonewall Resources’ compelling gold business production model:
•
Large fully permitted South African acreage position in prolific gold producing region (Approx.62 000 ha)
•
Near-term trial mining planned for January 2015 for pre-mined residue material
•
Targeting all-in low cash cost (See illustration on page 9)*
•
Large JORC compliant Mineral Resource of 2.99 Moz (See table on page 10)
•
Significant exploration potential previously announced (Refer pages 11 and 12)
Pre-Mined Residue (PMR) Projects
Hard Rock Mine Projects
•
Pre-explored, pre-developed, pre-drilled, pre-blasted
•
•
Exploration target 0.7M – 2.4M oz*** (See table on
page 12)
Exploration Target of additional 0.34M -3.07M oz ***
(See table on page 11)
•
Aim to convert exploration target into Resource
Category
7 New Order Mining Rights and 6 Renewed New Order
Prospecting Rights
•
Targeting low all-in cash costs (See illustration on page
9)*
Central Division: Beta mine strategic target to produce
up to 40 000 oz p.a. as previously announced **
•
Southern Division: Sabie mines strategic target to
produce up to 50 000 oz p.a. as previously announced
**
•
•
•
Project supported by approx. 1,500 fully tested samples
•
First phase trial mining, subject to funding
•
Existing gold processing plant
* Refer forward looking statement on page 2. Subject to resource confirmation, planning and concept study completion.
** Subject to completion of study work and successful trial mining.
*** The potential quantity and grade of the Exploration Target is conceptual in nature, there has been insufficient exploration to define the Exploration Target as a Mineral Resource
and it is uncertain if further exploration will result in the determination of the Exploration Target as a Mineral Resource.
Strictly confidential
4
For personal use only
Projects Location
• Tenements cover approx. 62,000 Ha in the Eastern Goldfields
of South Africa
• The projects in the Mpumalanga Province are split into TGME
Mines in the north and Sabie Mines in the south
• Tenements include over 40 historical mines
Strictly confidential
5
For personal use only
PMR - Overview
•
Stonewall has since Q2 2014 discovered a significant new, pre-explored, pre-developed, pre-drilled, pre-blasted
exploration target known as the PMR Project.
•
Stonewall plans to commence production of the PMR Project in a phased approach, subject to funding and
successful bulk trial mining. Progression from one phase to the next will only occur once the target gold production
is consistently reached. The phases are as follows:
•
Phase 1: Trial phase targeting 10,000tpm starting January 2015, as previously announced.
•
Phase 2: Trial mining phase targeting an increase in mining to 30,000tpm to commence in March 2015, as
previously announced.
•
Phase 3: Scalable mining to commence by December 2015 or sooner subject to resource confirmation, LOM
extension, planning , concept study completion and capital. (Present plant capacity 80 000tpm mined)*.
* This is a strategic target only, not a forecast or projection. Refer forward looking statement on page 2.
Subject to resource confirmation, LOM extension, planning and concept study completion
Strictly confidential
6
For personal use only
PMR - Overview
As Announced on the 21st of November 2014 the project is expected to generate significant revenue which is attributed to:
•
Easily accessible material
•
Large quantities of material available through multiple sources (The PMR exploration target ounces range from 0.7M
– 2.4M oz (See table on page 12) A process has commenced to convert the exploration target ounces into JORC
compliant Mineral Resources.)
•
Significant upgrading through wet screening
•
Able to introduce scalable, cost effective mining
•
Low mining costs due to easily accessible oxidised material (Compared to Hard Rock Mining see page 9)
•
Proven Metallurgical process flow, plant and equipment in place
* This is a strategic target only, not a forecast or projection. Refer forward looking statement on page 2.
Subject to resource confirmation, LOM extension, planning and concept study completion
Strictly confidential
7
For personal use only
Stonewall’s Action Plan to 30 June 2015
Action plan for 1H 2015 (subject to funding):
Controlled mining trials of its PMR (Pre-Mined residue) from January 2015 to March 2015.
The project is expected to generate significant revenue, which is attributable to:
•
Corporate efficiencies and cost cutting underway
•
Ongoing review of capital structure and funding base
•
Non-core asset review commenced
•
Accelerate value creation from Stonewall’s valuable suite of assets
1.
Initial PMR project (at Beta)
2.
Expanded PMR projects
3.
Hard rock mines
Strictly confidential
8
For personal use only
Industry Analysis
Conventional Hard Rock Mining vs.
Pre-Mined Residue (PMR)
Independent analysis comparing a
typical
shallow
narrow
reef
conventional mining operation and
mining Pre-mined residue that can be
extracted at 67% of conventional
mining costs.*
* Source Minxcon December 2014
This is not the analysis on the company’s forecasts,
but the views of an independent competent person
based on industry analysis.
However the company has experienced similar
results in its PMR testing.
Total Cost
Management
Development
Stoping - Labour
Stoping - Consumables
Stoping - Explosives
Stoping - Support
Stoping - Mining Equipment
Trackless
Hoisting
Logistics Transport
Pumping
Ventilation
Shaft Maintenance
Engineering (U/G Workshops)
Survey and sampling
Planning
Administration
Safety and Training
Environmental
Security
Geology
Human Resources
Rock Engineering
Stores
Mettalurgical
Other
Overheads
Total Cost
Unit
USD/oz
USD/oz
USD/oz
USD/oz
USD/oz
USD/oz
USD/oz
USD/oz
USD/oz
USD/oz
USD/oz
USD/oz
USD/oz
USD/oz
USD/oz
USD/oz
USD/oz
USD/oz
USD/oz
USD/oz
USD/oz
USD/oz
USD/oz
USD/oz
USD/oz
USD/oz
USD/oz
USD/oz
Strictly confidential
Conventional
Mining
20.32
23.75
130.97
281.18
75.69
88.07
54.17
51.76
18.09
7.53
24.37
16.05
6.23
74.99
9.40
3.92
12.26
2.17
5.98
15.03
14.03
17.99
3.67
3.01
110.78
12.50
45.65
1,129.58
Adjustment
100%
0%
50%
50%
0%
100%
60%
100%
0%
100%
0%
100%
0%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
67%
PMR
20.32
65.49
140.59
88.07
32.50
51.76
7.53
16.05
74.99
9.40
3.92
12.26
2.17
5.98
15.03
14.03
17.99
3.67
3.01
110.78
12.50
45.65
753.70
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For personal use only
JORC Resource Summary
Mineral Resources for Stonewall Mining as at 30 November 2014
Mining Resource
Category
Type of Operation
UG
Measured
Mt
g/t
Gold Content
Kg
4.77
Surface
0.151
1.59
Tailings
2.294
0.77
‘000 oz.
811
Change in Tonnage
Change in Gold
Content (Moz)
%
%
26.1
0
0
240
7.7
0
0
1,770
56.9
0
0
2.615
1.08
2,821
90.7
0
0
UG
2.903
5.82
16,902
543.3
5.37
4.44
Surface
3.173
0.88
2,811
90.4
0
0
Tailings
0.012
0.58
7
0.2
0
0
6.088
3.2
19720
633.9
2.49
3.78
16.151
3.9
63,028
2,026.50
10.23
7.78
Total Indicated
UG
Inferred
Gold Grade
0.17
Total Measured
Indicated
Tonnage
Surface
0.801
0.8
642
20.7
0
0
Tailings
2.124
3.06
6,503
209
-0.21
-0.22
Rock Dump
0.121
1.59
192
6.2
0
0
Plant Floats
0.041
0.54
22
0.7
0
0
0.109
0.81
88
2.8
-29.45
-29.27
Total Inferred
Beta Main
19.346
3.64
70,475
2,266.00
8.10
6.82
Complaint Grand Total
28.049
3.32
93,016
2,990.60
6.04
5.94
Strictly confidential
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For personal use only
Exploration Targets: Summary
Hard Rock Projects
Project
SW
Minimum
Tonnage
Maximum
Tonnage
Minimum
Grade
Maximum
Grade
Minimum
Estimated
Gold
Maximum
Estimated
Gold
cm
Mt
Mt
g/t
g/t
Moz
Moz
TGME Mines:
Vaalhoek
100
3.5
10.9
1.00
4.00
0.12
1.41
Beta
100
3.5
3.5
0.95
3.50
0.11
0.4
Rietfontein
100
0.5
3.0
2.02
6.51
0.03
0.63
Glynn’s
100
2.5
6.5
1.00
3.00
0.08
0.64
Total
100
10.0
23.9
1.03
3.97
0.34
3.07
Sabie Mines:
The potential quantity and grade is conceptual in nature and there has been insufficient exploration to estimate a Mineral Resource. It is uncertain
if further exploration will result in the estimation of a Mineral Resource. Stonewall is working with the Competent Person to convert the potential
mineralisation to compliant mineral resources in accordance the definitions as stated by the Australian JORC Code for the reporting of mineral
resources and reserves. Surveying and sampling in accordance with the instructions of the Competent Person will continue and the
implementation of the Competent Person’s recommended Underground Backfill Sampling Protocol for the reef results (refer announcement dated
31 July 2013) in order to assess the possible conversion of the reef residue to a Mineral Resource is to be completed.
* Refer forward looking statement on page 2.
Subject to resource confirmation, planning and concept study completion
Strictly confidential
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For personal use only
Exploration Targets Summary:
PMR Project
Conceptual Exploration Target, Tonnage, Ounce and Grade Ranges fie the Underground Reef Residue as at January 2015
Area
Northern division
Central division
Southern division
Total
Historical
Mined Area
@ 93% (m2)
Minimum
Tonnage
(tons)
Maximum
Tonnage
(tons)
(‘ 000 000)
(‘ 000 000)
(‘ 000 000)
1.87
4.52
6.54
12.9
2.55
6.15
8.89
17.6
5.17
12.49
18.05
35.7
Minimum
assumed
Grade (g/t)
Maximum
assumed
Grade (g/t)
1.28
1.28
1.28
1.3
2.13
2.13
2.13
2.1
Minimum
Estimated
Gold
Maximum
Estimated
Gold
Minimum
Estimated
Gold
Maximum
Estimated
Gold
Kgs
Kgs
Moz
Moz
3,250
7,846
11,341
22,436
10,992
26,537
38,359
75,888
0.10
0.25
0.36
0.7
0.35
0.85
1.23
2.4
* Refer forward looking statement on page 2.
Subject to resource confirmation, planning and concept study completion
Strictly confidential
12
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Shandong Qixing Iron Tower Co. Ltd
(Shandong) Aborted Transaction
Stonewall entered into a Share Sale Agreement with Shandong in November 2013 whereby Shandong agreed to acquire
Stonewall Mining (the South African subsidiary of Stonewall) for US$141M.
•
On 21 November 2014 Stonewall announced to ASX that Shandong unexpectedly advised Stonewall that it did not
intend to complete the purchase.
•
Stonewall previously announced that 6 of the 7 conditions precedent in the sale agreement had already been met.
•
Shandong’s reasoning remains unclear, however media reports have referred to possible Shandong funding issues,
and Stonewall considers that Shandong actions may have been in breach of the sale agreement.
•
Stonewall has subsequently notified Shandong that it has reserved all its rights and is now considering all available
options including taking legal action against Shandong and its officers.
•
Stonewall intends to vigorously pursue and enforce all of its rights against Shandong and, if appropriate, its officers
including potentially a claim for damages by arbitration proceedings.
Strictly confidential
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For personal use only
Stonewall Resources:
Compelling Investment Opportunity
•
Target low Capital to Gold opportunities to maximize return
•
Targeting near term production from Pre-Mined Residue projects with successful Mineral Resource Definition, study
work and trial mining
•
Several shallow historically producing mines with existing infrastructure and mine development
•
Significant new PMR resource potentially adding an additional 0.72m – 2.44m exploration target ounces (See table on
page 12)
•
Large existing mineral resource of 2.99m oz defined in accordance with the JORC code (See table page 10)
•
Significant conceptual exploration target of an additional 0.34M - 3.07M oz from Hard Rock Projects identified by
Competent Person (See table on page 11)
•
Interests aligned with community and workforce through broad based BEE structure
•
Well understood metallurgy
•
Prudent governance and risk management
Strictly confidential
05/18/12
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Board of Directors
Dave Murray - Chairman
Simon Liu - Director
Nathan Taylor - Director
• Appointed as Chairman in November 2012
having served as Chairman of Stonewall
Mining Pty Ltd since 2010
• Over 20 years of experience in the
marketing and consulting industry
• Appointed as a non-executive director of
the Company on 28 June 2011
• Founding partner and President of
Hanhong Private Equity Investment
Company
• Over 8 years of resource/mining industry
experience including successful capital
raisings for listed entities
• 15 years of coal industry experience at the
Chief Executive Officer and Managing
Director level
• Former President of Energy Coal,
Metallurgical Coal and the Coal Customer
Group at BHP Billiton Limited, Chief
Executive Officer of BHP Billiton Mitsubishi
Alliance, Chief Executive Officer of Billiton
Coal, and Managing Director of Ingwe Coal
Corporation
• Director of Stonewall Mining Proprietary
Limited for the past 18 months and is
well acquainted with Stonewall’s
operations
James Liu - Director
Trevor Fourie - Director
• Managing Partner of Hanhong Private
Equity Investment Company
• Appointed as a non executive director
of the Company on 27 January 2012
• Director of AENY, a US coal mining
company
• Director of various
Investment companies
• Co-founded and managed 2 high-tech
companies in the Silicon Valley
• 24 years’ experience in corporate and
retail banking holding Executive
Directorship positions
• Former banker of Citigroup with over 20
years investment and management
experience
Strictly confidential
mining
and
15
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Key Management
Johan Fourie - Group Legal
Compliance and Infrastructure
Manager
• MsC Mechanical Engineering, Grad. Dip. In
Occupational
Hygiene
and
Safety,
qualifications in Environmental Engineering
Mario Ruygrok - Group Geologist
Lloyd Birrell - Chief Executive Officer
• Master of Science in Geology
• Bachelor of Commerce Degree in
Accounting from the University of Cape
Town and a Bproc from the University of
South Africa
• Over 20 years of experience in the mining
industry in both China and South Africa
• Former Chief Executive Officer of Agnes
Mining (subsequently renamed Galaxy
Gold Mining Limited)
• Over 37 years experience in the
environmental engineering and compliance
field
Chris Todd - Group Finance Manager
• Certificate in Mining Taxation from the
University of South Africa, and General
Management Development Programme
from the Unisa Graduate School of
Business Leadership
• Over 20 years’ financial management
experience in the mining industry
• Former Director of Ergo Mining (Pty) Ltd,
Skeat Gold Mining (Pty) Ltd and HVH Gold
Mining (Pty) Ltd
Jenique McNaught - Group
Business Development and Human
Capital Manager
• BA(Hons)
Finance
International
Business
and
• Corporate finance and merchant banking
experience and consulted to Stonewall
for 2 years prior to joining the company
permanently in 2012
Strictly confidential
Andre Visagie - Mining Engineer
• 30 years of experience as a mining
engineer in South Africa specialising in
vertical shafts and plants
• 12 years at the Foskor chemical plant in
Richard’s Bay
Marnits Maree – Metallurgist
• B.Sc Metallurgy
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Key Contacts
For further information please contact:
Trevor Fourie, Director
Stonewall Resources Limited
M: 0414 324 960
E: trevor@stonewallmining.com
Lloyd Birrell, Director and CEO
Stonewall Mining Proprietary Limited
M: 0027 82 857 6725
E: lloyd@stonewallmining.com
Strictly confidential
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