Transcript PDF - Premier African Minerals

CORPORATE PRESENTATION
March 2014
AIM: PREM
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CORPORATE PRESENTATION, March 2014
2
Important Notice (Continued) & Insider Notice
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CORPORATE PRESENTATION, March 2014
3
Company Snapshot
Zimbabwe
AIM-listed multi-commodity (tungsten, REE, lithium, tantalum,
fluorspar, gold, nickel, zinc) exploration & development company,
focused on Africa
PROFILE
Togo
STRATEGY
Advance portfolio up the resource curve towards production,
forming JV partnerships and/or corporate transactions to add value
KEY
PROJECTS
1.
2.
3.
4.
VALUE
www.premierafricanminerals.com
Flagship RHA Tungsten Project, Zimbabwe
Katete REE & Zulu Lithium/Tantalum Projects, Zimbabwe
42% stake in TSX-V listed AgriMinco Corp.
Pipeline multi-commodity portfolio offering value upside
Near-term production and cash flow potential at RHA Tungsten Project
Exploration upside – Katete REE and Zulu Lithium/Tantalum Projects
Major shareholder of AgriMinco – exposure to potash, phosphates, clays
CORPORATE PRESENTATION, March 2014
4
Company Activity since AIM Listing
MAJOR SHAREHOLDERS
(as of 28 February 2014)
London (AIM)
PREM
Ordinary Shares in Issue
432,283,126
Share Price (GBP)
0.72p (as of 24/03/2014)
Market Cap (GBP, millions)
3.11 (as of 24/03/2014)
www.premierafricanminerals.com
Company & % of issued shares
Coc’roach Ltd/ZRH Nominees Ltd*
44.39%
Alpha International Business Ltd
Yorkville Advisors
11.31%
9.30%
Paddington Commercial Ltd
4.43%
Richard Dollar
3.67%
Cumming Family Trust
3.58%
*structures associated with G Roach
CORPORATE PRESENTATION, March 2014
5
Board of Directors & Key Management
GEORGE ROACH
PAMELA HUESTON
NEIL HERBERT
IAN STALKER
ALEXANDER DU PLESSIS
BRUCE CUMMING
Chairman & CEO
Extensive experience in securing and
establishing mineral exploration tenure
and operations throughout Africa,
including the Central African Republic,
Zimbabwe, South Africa, Chad, Mali,
Namibia, Zambia and Tanzania. Founding
Director and former Managing Director
Africa for UraMin Inc., a uranium resource
company with operations in Namibia,
South Africa and the CAR. UraMin was
sold in 2007 for US$2.5 billion. Former
President and CEO of Axmin Limited
(TSX-V:AXM). Chairman and CEO of
AgriMinco Corp. (TSX-V: ANO).
Non Executive Director
Over 30 years of development and
operational mine experience in Europe,
Africa, and Australia. Chairman and
Director of TSX-listed Azincourt Resources
Inc., Chairman and former CEO of TSXlisted Brazilian Gold Corp. before its
recent trade sale and former CEO of
Berkeley Resources, listed on ASX and
AIM. Former CEO of UraMin Inc. and
former Vice President of Gold Fields Ltd.,
the world’s fourth largest gold producer
at the time.
www.premierafricanminerals.com
Finance Director
Former CFO designate of AgriMinco Corp
(TSX-V: ANO) and current non-executive
director. Former CFO of G & B Central
African Resources, former CFO of Virginia
Diamond Field. Head Accountant with
Caledonia Mining Corporation (TSX-V:
CAL), a junior gold mining and
exploration company with operations in
South Africa, Zimbabwe and Zambia. Four
years with Deloitte in various locations,
working as a Senior Manager in Forensic
Accounting. Canadian Chartered
Accountant and MBA Graduate from the
University of Cape Town.
Non Executive Director
Professional Engineer with extensive
experience in management, development
and operational roles, covering a range of
commodities including diamonds, coal
and gold in the African mining arena.
Holds a BSc (Eng.) (Electrical) and MSc
(Eng.) from the University of the
Witwatersrand in South Africa. Consults
with a wide range of mining industry
clients around the world, and is also a
Visiting Adjunct Professor at the Centre
for Mechanised Mining at the University of
the Witwatersrand.
CORPORATE PRESENTATION, March 2014
Non Executive Director
Fellow of the Association of Chartered
Certified Accountants and has over 20
years’ experience in finance. Worked in
the management of mining and
exploration companies for over 15 years
and was Co-Chairman and Managing
Director of AIM quoted Polo Resources
Limited. Former Financial Director for
UraMin Inc.
Consulting Geologist
A SACNASP registered geoscientist and
member of the Geological Society of South
Africa. Initial 26 years' work experience spent
with Falconbridge Limited group companies
through Southern and West Africa exploring for
nickel, copper, gold, diamonds and uranium.
Further work experience in Bushveld Igneous
Complex, Zambian Copper Belt and Sierra
Leone. Was Chief Operating Officer for G&B
Group of companies between 2007 and 2012
and instrumental in generating many of the
Group’s exploration projects, including the
Danakil Potash project. Currently CEO and
Director AgriMinco Corp.
6
RHA Tungsten Project Overview Zimbabwe
The RHA Tungsten Project (RHA) covers a 1,800-hectare land-holding in the prospective multi-commodity
Kamativi Tin Belt in NW Zimbabwe. RHA has potential to be developed into a low capital and operational cost
mine in the near-term, with proven mineralisation and good local infrastructure.
LOCATION
PRODUCT
Kamativi Tin Belt, NW Zimbabwe
Wolframite - WO3
Geological model focuses on 6 mineralised lodes. To date, SAMREC
code compliant Resource declared only for Lode 2 (covering two
areas, Lode 2A and Lode 2B):
RESOURCE
MINING METHOD
• Lode 2A: Inferred 1,093,000 tonnes at 8.7 kg/t WO3
• Lode 2B: Indicated 147,000 tonnes at 4.7 kg/t WO3
Open pit to at least 40m (improved with Whittle optimisation)
followed by underground mining to 200m below surface, initially
LIFE-OF-MINE
6 years at annual production of 192,000 tonnes
DEVELOPMENT
STAGE
• Positive PEA and resource statement published Aug/Sept 2013
• Additional drilling Lode 2A completed, metallurgical work, updated
resource statement and geological model expected April 2014
Further information is contained in PREM’s News Release dated 28 August 2013, which is available on the Company’s website.
www.premierafricanminerals.com
CORPORATE PRESENTATION, March 2014
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Exploration Overview

Total drilling campaign of seventeen holes, 2,603m with
over 258m of trenching. Most recent drilling completed
late December 2013.

Latest drilling confirmed presence of numerous quartz
tourmaline veins highly mineralised with wolframite – not
previously identified in the hanging wall, including best
assays at up to 359kg per tonne

SAMREC code compliant Resource declared only for 1 of 6
lodes and based on the initial 6 drillholes:
Lode 2A - Inferred 1,093,000t @ 8.7kg/t WO3
Lode 2B - Indicated 147,000t @ 4.7 kg/t WO3

Resource update expected in April 2014

Ore body described in Lode 2A identified as expected in all
additional drilling

Mineralogical work completed with metallurgical test work
underway. Full specification of product expected April
2014

Off-take and marketing agreements to follow product
specification
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CORPORATE PRESENTATION, March 2014
Historic Production at RHA mine
8
Exploration Overview (continued)

Updated Mining Study expected April 2014

Previous study indicates robust economics of a
192,000 tonnes per annum tungsten operation,
LOM 6 years

Conventional open pit mining to 40m below
surface (BS) followed by underground mining to
200m BS over strike length of 300m

Strong promise to be expanded in future with
further exploration over known mineralised lodes

Underground mechanised mining using long hole
open stoping with pillars; low strip ratio

Flow sheets and recoveries to be defined in
updated Mining Study

Excellent infrastructure – accessibility via
Bulawayo-Victoria Falls tar road 23km

Low OPEX due to visible upgrade of mineralised
material
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CORPORATE PRESENTATION, March 2014
Diamond Drilling, Jan 2013
9
Mining Study - Robust Financial Model
Tungsten APT (Ammonium Paratungstate) price of $400/mtu,
and a 20% discount factor for 65% WO3 concentrate, a price of
$20,800/t (metric tonne) of WO3 concentrate sold
FINANCIAL EVALUATION SCHEDULE*
Year
Unit
Total
1
2
3
4
5
6
Mined Tonnes
t’000
907
52
192
192
192
192
87
(65%) WO3
concentrate
t
8,908
511
1,887
1,887
1,887
1,887
851
Revenue
USDm
185.3
10.6
39.2
39.2
39.2
39.2
17.7
Capex
USDm
13.4
13.4
Opex
USDm
51.7
4.8
10.0
11.1
11.3
9.7
4.8
Undiscounted
Pre Tax Real
Cash Flow
USDm
120.1
-7.7
29.2
28.2
28.0
29.5
12.9
* These numbers are gross for the local company, and are undiscounted and pre-tax.
Pre-tax internal rate of return - 378%
The average life of mine operating cost is estimated
to be USD 59.3 per Run of Mine (ROM) tonne.
Production starts in year 1 and continues for 6 years. Full mine
production of 192 ktpa (16,000 tpm) is reached within 12
months.
Source: Technical Report on the RHA Tungsten Project dated 10 September 2013
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CORPORATE PRESENTATION, March 2014
10
Why Tungsten?
World tungsten demand is growing at an annual rate of approximately 6%. World supply declined from 90,800
metric tonnes in 2006 to 72,000 tonnes in 2011. A strategic metal that is essential in such applications as steel
tools and cutting blades, defence applications, alloys, lighting and electronics, tungsten is a natural resource
with long-term upside potential.
APT price chart, 2008-June 2013
 Tungsten is one of few metals to have
withstood the recent metals bear market
(Source: Bloomsburg)
550
 China produces approximately 85% of world
tungsten supply but has greatly restricted
tungsten exports to keep pace with its own
industrial demand
450
350
 Prices have shot up from US$50 per MTU in
2002 to c. US$400 in H2 2013
 On-going supply/demand imbalances are
expected to keep tungsten at historic high
price levels, or to increase prices in the
medium-term
 Outlook is generally positive, with a
tightening market likely to increase APT
prices over the longer-term
www.premierafricanminerals.com
250
150
2009
2010
2011
2012
2013
•
Wolframite is easily bagged and shipped – no need
for high logistics capex spend
•
Strong demand for primary tungsten: only 30% of
tungsten is recycled back into the market
•
Strong demand and off-take potential. Off-take can
underpin bank financing for project or mine
development finance
CORPORATE PRESENTATION, March 2014
11
Why Zimbabwe?
Zimbabwe’s mining sector has shown a significant recovery over the last five years,
with an overall upward trend in mineral production. Mining leads the economy in export
earnings, rising from US$1.8 billion in 2011 to US$2 billion in 2012. Zimbabwe’s natural
resource riches offer strong upside opportunities across many commodities.
WORKING WITH INDIGENISATION
 Extensive mineral resource base of more than 60
different minerals
 Ore bodies in Zimbabwe are generally present at
shallower depths than comparable ore bodies in South
Africa, lending themselves to lower operating costs
 Premier is one of over 20 international companies
successfully operating in Zimbabwe, including
companies listed on the London, Australian and
Toronto exchanges such as Aquarius Platinum, Rio
Tinto, Caledonia Mining and Mwana
 Zimbabwe has great infrastructure and a skilled and
well-educated workforce
 Premier holds its Zimbabwean assets through
Mauritian subsidiaries, lending protection through
SADC Treaty
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 Premier’s subsidiaries in Zimbabwe are
fully indigenised with empowerment
partner: National Indigenisation and
Economic Empowerment Fund (NIEEF)
 Shareholder agreements in place with
NIEEF holding 51% of the RHA Tungsten
Project. Premier appointed operator of the
project.
 All exploration loans made by Premier to
be repaid as agreed with NIEEF
 Profit distribution fixed with repayment of
debt made first followed by 50/50 split of
remaining profit between dividends and
mine development
 RHA Tungsten project responsible for
funding mine development
CORPORATE PRESENTATION, March 2014
12
Investment Summary
 Near-term tungsten production investment - one of only three AIM listed
tungsten plays
 Mining Study outlines robust economics of RHA: low-capex investment, near-term
cash flow, positive APT/tungsten demand and pricing scenarios
 Off-take interest could secure future earnings
 Potential exploration and/or transactional value creation via additional portfolio of
mineral assets
 PREM fully compliant with Zimbabwe indigenisation laws
 Highly experienced Board with a proven track record of successful development
of mineral projects on the African continent
www.premierafricanminerals.com
CORPORATE PRESENTATION, March 2014
13
Contacts
PREMIER AFRICAN MINERALS
George Roach, Chairman & CEO
Pamela Hueston, Finance Director
E: info@premierafricanminerals.com
www.premierafricanminerals.com
CORPORATE PRESENTATION, March 2014
14
APPENDIX
Zulu Lithium & Tantalum Project, Zimbabwe
LOCATION
POTENTIAL PRODUCT
CLAIMS AREA
South-central Zimbabwe
Lithium & Tantalum
Structurally controlled lithium bearing pegmatites with historical data
from trenches and diamond drillholes
Two types of pegmatite have been identified in the area, both with
estimated grades of 1.2% lithium
RECENT WORK
Mapping and trenching has extended the pegmatite strike extent by
approximately 5km
6 diamond drillhole programme completed with grab samples
indicating tantalum content of between 220ppm and 1,037ppm and
lithium contents ranging from 0.2% to 0.7% LiO2
DEVELOPMENT STAGE
www.premierafricanminerals.com
Premier intends to commence a bulk sampling programme combined
with further drilling and trenching to define a maiden code compliant
mineral resource
CORPORATE PRESENTATION, March 2014
16
Katete REEs Project, Zimbabwe
LOCATION
POTENTIAL PRODUCT
CLAIMS AREA
RECENT WORK
Province of Matabeleland North, Zimbabwe
Rare Earth Elements (REEs)
25 mineral claim blocks
Previous work identified prospective rare earth mineralisation
including dysprosium, cerium, thorium, lanthanum, samarium and
yttrium
Results from trenching programme undertaken in 2001 indicated
highest total rare earth oxide (TREO) value was 14.6% with an
average of 1.74%.
Completed 7 drillhole drilling campaign totaling 1,187m and assays
of 4 holes indicate TREO distribution consistent with depth
DEVELOPMENT STAGE
www.premierafricanminerals.com
Undertake mineralogical and metallurgical studies followed by
definition of a maiden code compliant mineral resource
CORPORATE PRESENTATION, March 2014
17
Pagala Zinc Project, Togo
LOCATION
POTENTIAL PRODUCT
PERMITS
Western Togo
Zinc
4 contiguous Exploration Permits issued for zinc and associated
minerals
Mineralisation hosted in graphite-sericite schist and sideritic breccias
within a volcano sedimentary sequence
EXPLORATION
Exploration began in 1983- BRGM and Anglo-American have
undertaken drill testing
In 2000, Ambase Exploration Ltd recorded a non-SAMREC compliant
‘exploration target’ as defined in SAMREC code of 3.6 Mt @ 2.7%
zinc
DEVELOPMENT STAGE
www.premierafricanminerals.com
Initially, re-interpretation of existing data before decision on further
exploration programme
CORPORATE PRESENTATION, March 2014
18
Dapaong Gold Project, Togo
LOCATION
POTENTIAL PRODUCT
PERMITS
Northern Togo
Gold
2 Exploration Permits covering 400 sq km for gold and associated
metals
Area underlain by volcanic and sedimentary Birimian-aged intrusive
rocks with minor volcano-sedimentary sequences, quartz veins and
pegmatites, forming part of larger West African Craton geologic
region
EXPLORATION
DEVELOPMENT STAGE
www.premierafricanminerals.com
Area has seen extensive artisanal activity but no systematic
exploration as yet
Initial exploration - mapping, sampling, assays, data interpretation
CORPORATE PRESENTATION, March 2014
19
Why Togo?
Politically stable and strategically located in West Africa with good enabling
infrastructure and a deep-water port at Lomé, Togo has implemented a new investment
code that improves ease of doing business and is a member state of the Extractive
Industries Transparency Initiative.
 Togo’s mining industry has been dominated by
phosphates, marble and limestone, but there is
strong prospectivity for other commercial minerals,
including zinc, nickel, uranium, gold, diamonds and
iron ore
 Stable political environment and positive foreign
investment business environment
 Mining legislation framed to liberalise the mining
and natural resources sector
 Investment code in place to encourage investment
and the development of mining activities
 Improving infrastructure including expansion of the
Port of Lomé. Two airports and an unsophisticated
but operational road and rail network
Port of Lomé
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CORPORATE PRESENTATION, March 2014
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