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 9 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 10 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 11 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 For personal use only 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 13 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 14 | 14 For personal use only 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 For personal use only 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 16 For personal use only Key Contacts For further information please contact: Trevor Fourie, Director Stonewall Resources Limited M: 0414 324 960 E: [email protected] Lloyd Birrell, Director and CEO Stonewall Mining Proprietary Limited M: 0027 82 857 6725 E: [email protected] Strictly confidential 17
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