Read - Cashmere Iron

Report
CASHMERE IRON
One of Australia's Premium
undeveloped Magnetite and DSO
Hematite iron ore deposits
2014 AGM
Disclaimer
CASHMERE IRON
Cashmere Iron Ltd (“Cashmere”) has prepared this presentation (the “Presentation”) solely for the benefit of the Recipient. This Presentation is provided solely for the purpose of
assisting the Recipient in its evaluation of Cashmere and its iron ore development project.
The Presentation has been released to the Recipient on the express understanding that the contents will be regarded and treated as strictly confidential. The Presentation is solely for
the benefit of the recipient and may not be reproduced or used, in whole or in part, or given to any other person for any purpose without the prior consent of Cashmere. The
Presentation is designed solely for information purposes. The information contained herein has been prepared to assist the Recipient in evaluating Cashmere, but does not purport to
be all-inclusive or to contain all of the information that the Recipient may require to evaluate Cashmere and its business.
In all cases, the Recipient should conduct its own investigation and analysis of Cashmere and its business and the information set forth in the Presentation. While all reasonable care
has been taken to ensure that the facts stated herein are accurate and that the forecasts, opinions and expectations contained herein are fair and reasonable, Cashmere does not
make any representation or warranty as to the accuracy or completeness of the information in the Presentation and shall not have any liability for any information or representations
(express or implied) contained in, or for any omissions from, the Presentation or any other written or oral communications transmitted to a Recipient in the course of its evaluation of
the Proposal. In no case shall any of Cashmere’s advisers, or any of their respective directors, officers or employees, be in any way responsible for, or have any liability in respect of,
the contents hereof (or any omissions here from), and no reliance should be placed on the accuracy, fairness or completeness of the information contained in this Presentation.
All projections, forecasts and forward-looking statements and calculations in the Presentation are for illustrative purposes only using assumptions described herein. The calculations
are based on certain assumptions, which may not be realised. In addition, such forward-looking statements involve a number of risks and uncertainties. Actual results may be
materially affected by changes in economic, taxation and other circumstances. Cashmere disclaims any responsibility for any errors or omissions in the financial calculations set forth in
the Presentation and make no representations or warranties as to the accuracy of the assumptions on which they are based. The reliance that the Recipient places upon the
projections, forecasts, calculations and forward-looking statements of the Presentation is a matter for its own commercial judgment. No representation or warranty is made that any
projection, forecast, calculation, forward-looking statement, assumption or estimate contained in the Presentation should or will be achieved.
Cashmere assumes no responsibility to update the Presentation in any respect. Neither this Presentation nor any copy of it may be taken or transmitted into or distributed in the
United States. Any failure to comply with this restriction may constitute a violation of US securities laws, as applicable. The distribution of this Presentation in other jurisdictions may
also be restricted by law, and persons into whose possession this document comes should inform themselves about, and observe, any such restrictions.
This Presentation does not constitute or form part of, and should not be construed as, an offer or invitation to purchase or subscribe for any securities, and neither this Presentation
nor anything contained herein shall form the basis of or be relied upon in connection with any contract or commitment whatsoever.
By accepting this Presentation the Recipient agrees to be bound by the foregoing limitations.
•The information in this report that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Allen J. Maynard and Brian J. Varndell, both
of whom are members of the Australasian Institute of Mining and Metallurgy and is employed by AM&A. Allen Maynard and Brian Varndell both have sufficient experience which is
relevant to the style of mineralisation and type of deposit under consideration and to the activity which they are undertaking to qualify as a Competent Person as defined in the JORC
Code. Allen Maynard and Brian Varndell consent to the inclusion in this report this information in the form and context in which it appears.
2
Executive Summary
CASHMERE IRON
• Public company, formed in 2007 to explore and develop the Cashmere Downs
Iron Ore Project.
• 50,000 metres drilled
• Hematite JORC resource complete
• Magnetite JORC resource complete
• Mine development model based on early stage Hematite production funding
future phases of development: Stage 1 at 5 million Tonne Per annum
increasing to a potential 20 million tonne per annum.
• Port capacity reservation deed for the Esperance Port for 5Mt/pa from the
new facility. The YES consortium awarded development approval by Western
Australian Government 2014.
• Highly experienced leadership team with proven track record in project
delivery
Ore Body definition
CASHMERE IRON
• In excess of 50,000 metres of drilling completed covering 600 holes
• 6000 DTR tests at 38 µm grind size.
• Final Magnetite Product 68% fe. with less than 4.5%SiO2
• Hematite/Detrital JORC resources 47.5 million tonnes
• JORC resource of over 1 billion tonne combine Magnetite and Hematite
of which 928 million tonne is in measured and indicated categories.
• An additional 7 Billion tonne inferred potential
• Stage 1 Hematite Detrital studies complete (Jan 2012)
• Metallurgical test work complete on each stage of the Project
• Exploration to date of 14% of the BIF ridges, which has defined
significant Hematite and Magnetite JORC resources in excess of 1BT.
Significant Project Milestones
CASHMERE IRON
• Aboriginal Heritage agreements signed (with Mabrouk Minerals)
• 3 Mining Leases granted
• Level 2 Spring and Autumn Environmental survey complete
• No significant Flora types identified
• Fauna assessment recognised Mallee fowl present
• Capacity reservation Deed with Esperance Port
• Purchase Agreements in place with Pastoral lease holders
Completed Stages.
CASHMERE IRON
•
Due Diligence by Chinese Party completed 2013
Complete
•
Project Definition Study
Complete
•
Magnetite JORC Resource 1 billion tonne
Complete
•
Hematite/Detrital JORC resources 47.5 Million Tonne
Complete
•
Pastoral lease agreement
Complete
•
Native Tittle agreements
Complete
•
Level 2 Environmental surveys
Complete
•
Port Definitive Feasibility Study
Complete
•
Port capacity reservation deed
Complete
•
Detrital Hematite Desk top study
Complete
•
DSO Scoping Study
Complete
•
BFO Pre Feasibility Study
Complete
•
Magnetite Scoping Study
Complete
CASHMERE IRON
JORC Resources
Resource Description
Detrital Hematite >30% Fe*
DSO Hematite*
BIF >40.0% fe
BIF Hematite >20% Fe
BIF Magnetite >20% Fe*
Resource Description
BIF Hematite >20% Fe
JORC
Classification
Indicated
Indicated
Indicated
Measured
Indicated
Inferred
Measured
Indicated
Inferred
Measured &
Indicated
Inferred
JORC
Classification
Reserves
Tonnage
Mt
Fe %
SiO2%
Al2O3%
42
5.5
3.7
42
137
13
160
597
65
37.8
58.1
40.27
33.5
32.9
31.3
33.4
32.5
31
33.8
9.39
28.14
48.5
49.3
51.2
48.3
49.4
51.1
6.6
4.92
6.11
0.6
0.6
0.8
0.4
0.5
0.5
982.8
78
33
31.1
48.5
51.1
0.8
0.6
Tonnage
Mt
Fe %
SiO2%
Al2O3%
166
33.8
48.1
0.6
*Detrital Hematite requires downstream wet processing similar to the FMG process plants used in the Pilbara
*DSO Hematite is a typical Crush and screen lump and fines product
*Magnetite requires Wet magnetic separation and is processed using the same methods as Savage River iron and Karara mining
Project Location
•
Mid-West region of Western Australia
•
700km North-East of Perth
•
180km from Menzies on existing road
•
Government owned, commercially
operated, open access rail from Menzies
to Esperance (526km)
•
Esperance deep water port, open access,
multi-user, with advanced expansion
plans with development Proponents to be
announced Q2 2014 – (Capacity
reservation deed signed Dec11)
CASHMERE IRON
Geology and prospectivity (project area)
JORC Resource 1Bt
Potential Magnetite target of
8.6Bt
Magnetite/ Hematite
mineralisation
CASHMERE IRON
•
201km2 over 5 tenements at
Cashmere Downs
•
52km outcropping Banded Iron
Formation (BIF) identified
•
Exploration potential of 8.6Bt1
calculated from 37km of the 52km
outcropping BIF
•
+1Bt JORC resource from 7.5km of
52km of BIF
•
42Mt Hematite Detrital Iron ‘DSO’
JORC Resource
•
5.5 Mt DSO Hematite JORC Resource
•
14% of BIF ridges has been drilled to
JORC status
•
•
Independent geologist report, (Mackay and Schnellman 2010)
Details of the individual categories of the resource are set out on
page 9.
CASHMERE IRON
Developments in last 12 months
• Continued discussions and Due Diligence with
“YES” consortium
• Discussions with State Development
• Discussions with Department of Transport
• Cost reductions and Efficiency's
• Area 8 JORC Resources (inferred) 4.5m/t
• Independent Technical Valuation
Latest Exploration Results AREA 6
CASHMERE IRON
•
3 PARALLEL BIF RIDGES STRIKE NORTHNORTH WEST FOR APPROX 2.5KM EACH GIVING A TOTAL OF
7.5KM OF BIF AVERAGEING 20 METERES IN WIDTH.
•
ROCKCHIP SAMPLES A6BIF1-14 WERE TAKEN ALONG THE CENTRAL BIF SEQUENCES. THE ENCOURAGEING
RESULTS WERE OBTAINED FROM HEMATITE ENRICHED BANDED IRON AND ALTERED MASSIVE
MAGNETITE UNITS.
•
CONCEPTUAL DSO ORE TONNAGES FROM AREA 6 COULD BE 15 MILLION TONNES.
•
•
•
•
•
•
•
•
•
•
•
ASSAY RESLUTS
A6BIF-1
A6BIF-2
A6BIF1-3
A6BIF1-4
A6BIF1-5
A6BIF1-6
A6BIF1-7
A6BIF1-12
A6BIF1-13
A6BIF1-14
CaFe 62.7%
CaFe 62.93%
CaFE 62.19%
CaFE 64.02%
CaFe 61.26%
CaFe 65.03%
CaFe 65.83%
CaFe 65.93%
CaFe 53.80%
CaFe 61.06%
DSO economics CAPEX breakdown
CASHMERE IRON
Mining and Processing model is built around a full Contract mine and crush typical of the
current market operators minimising upfront Capital costs FOB Cost fro DSO Hematite
Mining
Capex 2.5mtpa
Capex 5mtpa
A$M
A$M
Mobilisation
$1.33
Establishment
$1.23
Preliminary site works
$5.00
Power supply
$1.24
Utilities / water
$1.50
Processing
Contractor Processing
Mobile Plant
$2.24
Accommodation
$4.80
Road Upgrade
$15.20
Rail Haulage
$3.84
Total Capital Cost
$36.38M
Contractor Contract Processing
$4.80
$4.80M
DSO Stage 1. economics
CASHMERE IRON
MACA mining Operations using the Proposed DSO modular plant.
OPEX FOB
2.5Mtpa
Admin
$1.00
Mining
$7.98
Processing
$6.95
Haulage (road & rail)
$44.0
Port loading
$5.00
Contingency
$4.00
TOTAL FOB (ex Royalties)
$68.93/t
Pipeline To Oakajee
CASHMERE IRON
Mt Magnet
Oakajee Port
Yalgoo
Cashmere Iron
265km Pipeline to Golden Grove Pump Booster Station
235km Pipeline Golden Grove to Oakajee Port
550mm Diameter Slurry pipeline
650mm Diameter return Water pipeline.
34 Mw Total Power requirement
Estimated Transport Cost Mine to Port $5.30 Per Tonne
BFO Hematite – economics
CASHMERE IRON
Cashmere Iron ran a pre-feasibility study into the development of a process
that would produce a saleable product from the Hematite cap that spans
the Biff ridge system. The outcome was that a process similar in principal to
the Magnetite methodology would produce a 65% fe material at a rate of
5mtpa, through a process of Crushing, milling, magnetic separation and
filtering. This plant has the option of upgrading the circuit to a full scale
Magnetite process once the ore body beneath the cap is exposed thus
capitalising on a material that would traditionally be pre-striped and stored
as Waste. The operating costs have been developed using pipeline logistics
options which significantly reduced the FOB cost.
Stage 3 BFO Hematite Summary
Process Plant Capex
Annualised tonnage
FOB cost A$ tonne
Revenue
Expenditure
Earnings (EBITDAR)
$1,374.95 M
5 million pa
$51.69
$471.00 M p/a
$258.00 M p/a
$213.00 M p/a
Based on Iron Price of US$80.00 tonne and exchange rate of 0.85
Magnetite Process Economics
CASHMERE IRON
The Magnetite Processing consists of three stage crushing to achieve a >6mm particle
size which feeds a 2 stage grinding circuit at this point the material is reduced to =< 35
µm, The plant feed then passes through several stages of magnetic separation and
flotation and is finally filtered to give a high grade filter cake product of 68% fe with a
>4.5% silica and extremely low contaminant. The final product is held at an optimum 9%
moisture content to allow effective material handling process and the loading of a
product that attracts a premium price in the market.
Stage 4 Magnetite Pipeline Summary
Process Plant Capex
Annualised tonnage
FOB cost A$ tonne
Revenue
Expenditure
Earnings (EBITDAR)
$1,413.30 M
10 million pa
$47.48
$1,082.35 M p/a
$474.81 M p/a
$607.54 M p/a
Magnetite values Represent Transport to port via pipeline
Based on Iron Price of US$80.00 tonne plus 15% bonus for High Grade clean Magnetite ore at an exchange rate of 0.85
CASHMERE IRON

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