Anthony Molybdenum Project, Anthony Molybdenum Project, Queensland Queensland April 2010 ASX:ZGM
Disclaimer This presentation has been prepared by Zamia Gold Mines Limited (‘Zamia’ or ‘the Company’). The information contained is a professional opinion only and is given in good faith. Certain information in this presentation has been derived from third parties and though Zamia has no reason to believe that it is not accurate, reliable or complete, it has not been independently audited or verified by the Company. Any forward-looking statements in this presentation are subject to uncertainties, risk and contingencies which are outside the control of, and may be unknown to, Zamia. They relate only to the date of this presentation, they assume the success of the Company’s strategies, and they are subject to significant regulatory, business, competitive and economic uncertainties and risk. Actual future events may vary materially from the statements and the assumptions on which the opinions are based. The Company makes no representation or warranty as to the accuracy, reliability or completeness of the information in this document and does not take responsibility for updating or correcting any errors or omissions which may become apparent after this is released. To the extent permitted by law, Zamia and its officers, employees, related bodies and agents disclaim all liability, directly, indirectly or consequentially, for any loss or damage suffered by a recipient or other persons arising out of, or in connection with, any use or reliance on this presentation or information. Dr Ken Maiden (MAIG, FAusIMM), Managing Director of Zamia Gold Mines, compiled the technical aspects of this report. Ken is a Member of the Australian Institute of Geoscientists and a Fellow of the Australasian Institute of Mining and Metallurgy. He has sufficient experience to qualify as a Competent Person as defined in the September 2004 edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Dr Maiden consents to the inclusion of the matters in the form and context in which they appear. ASX:ZGM
Directors Ken Maiden - Managing Director • Geologist with 37 years professional experience Chen Qiang - Non Executive Director • International commodities trader and investor • Andrew Skinner - Non Executive Director Chartered accountant • Alan Humphris - Non Executive Director Investment Banker John Stone - Company Secretary • ASX:ZGM
Capital Structure - as at 8 April 2010 SHARES 136,959,395 OPTIONS 25,370,000 Holder Name % International Base Metals Limited 9.9 West Minerals Pty Ltd 9.4 Hangzhou Kings Industry Co Limited 9.2 Brownstone International Pty Ltd 9.1 Great Sea Wave Investment Pty Ltd 4.8 Dr Barry John Barker & Mrs Jaye Abbey Barker 2.2 Dr Kenneth John Maiden & Ms Margaret Frances Hayes 1.4 Blackmans & Associates Pty Ltd 1.4 Mr Daniel Thomas Healy 1.3 Aussie Q Resources Limited 1.2 ASX:ZGM
Molybdenum - Chemical Symbol Mo Molybdenum (Mo) is a heavy metal (atomic weight almost 96) with an extremely high melting point - over 2,600 ° C Steel, alloyed with molybdenum, is stronger & more heat-resistant Its major uses are in stainless steel and high-strength steel alloys High-strength steels are used in applications such as offshore drilling rigs, pipelines, power plants, ships, turbine engines, tools, desalination plants [Source: Mineral Information Institute] Source: International Molybdenum Association ASX:ZGM
Molybdenum - Demand Mo demand is expected to increase by 5% per year for the next 20 years • • The price is currently ~ US$17.50 /lb - up from $10.70 in November 2009 - and could increase to above US$20 /lb in 2011 • JP Morgan predicts a 55% price increase over the next several years due to lack of new supply and an increase in global industrial production • E&MJ (March 2010) suggests that the market could move into deficit by 2014, in which case the price could soar to around US$40 /lb ASX:ZGM
World Molybdenum Consumption 500 Chinese consumption is expected to increase 9% per 450 annum for the next 5 years China 400 350 million lbs Mo Other 300 250 Japan 200 USA 150 100 W. Europe 50 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Chinese molybdenum consumption doubled between 2005 and 2008. World consumption declined by ~9% in 2009 but China’s consumption rose 5% ASX:ZGM Source: International Molybdenum Association
Anthony Project - Location Central Queensland - • Established mine infrastructure • Access to power & water • Sealed highway to project area • Proximity to port facilities • Favourable regulatory regime • Environmental issues minimal ASX:ZGM
Zamia’s Exploration Permits Exploration Permits for Minerals (EPMs) are granted by the Queensland government for 5 years They carry expenditure & reporting commitments They carry exclusive rights for Mining Lease applications They can be extended beyond 5 years with the Minister’s approval Zamia’s exploration tenements & applications cover over 1500 km 2 ASX:ZGM
Project Area The black soil plains of Central Queensland have a long hot summer, with temperatures often above 35 ° , and a mild sunny winter with day-time temperatures around 20 ° . Rain falls mainly in summer. Oblique aerial view of Anthony project area Coal mining & farming provide good infrastructure. The town of Clermont has 3,000 inhabitants ASX:ZGM
Simplified Porphyry Model 400 million years ago Today ASX:ZGM
Anthony - Geology Drilling shows igneous intrusions into Anakie Metamorphics (schist). Mo-bearing veins are within the intrusions and extend out into the schist ASX:ZGM
Anthony - Geology A typical porphyry Mo system - • Multiple igneous intrusions • Extensive alteration - covers 1000 m x 700 m • Multiple vein-forming events • High grade Mo core Zoned to Au & Cu ? • Sawn drill core showing veins of quartz- molybdenite (steely-grey mineral) in strongly-altered schist ASX:ZGM
Initial Resource - Sulphide Mo Resource estimate by Dr P Hellman of resource consultants Hellman & Schofield Pty Ltd, 30 March 2010, reported in accordance with the JORC Code & Guidelines Inferred Molybdenum Cut-off Grade Resource Average Grade Metal ppm Mo million tonnes ppm Mo tonnes Mo 200 81.1 434 35,200 400 40.4 574 23,200 600 13.5 748 10,100 • The resource assessment shows a significant high grade zone of almost 750 ppm Mo • The resource has been assigned to the Inferred category pending completion of additional quality assurance work (currently in progress) • The deposit is ‘open’ laterally & at depth - i.e. the resource will grow with further drilling • Current Mo price US$17.50 /lb (~ US$38,500 /tonne) ASX:ZGM
Exploration Program Zamia’s drilling has confirmed a high grade zone within a large Mo deposit. In addition to the main high grade zone, hole RC03 indicates another high grade zone in the east ASX:ZGM
Anthony - Grade Distribution Section 2700N showing distribution of Mo grades The high grade zone (+600 ppm Mo) near surface would most likely provide the focus for initial mining. Note: Most holes drilled only to shallow depth ASX:ZGM
Indicative Financials Assumptions - Production 5 Mtpa at 1000 ppm Mo for 3 years then 5 Mtpa at 750 ppm Mo for 7 years Recovery 90% A$:US$ exchange rate 0.9 Assume no recovery from Mo oxide overburden Capex A$200 million Opex A$80 million per annum (A$16 /ROM tonne) (Mtpa = million tonnes per annum) Mo price US$16 /lb US$18 /lb US$20 /lb NPV (10%) A$ million 71 144 219 IRR (%) 19 27 35 Assumed grades & tonnages are based on current understanding of the deposit ASX:ZGM
Processing of Sulphide Mo Ore • In primary (fresh) ore, Mo occurs as molybdenite [MoS 2 ] - 60% Mo • Crushing & grinding liberate molybdenite from the host rock • Froth flotation then separates the molybdenite • This produces molybdenum concentrate, usually around 50% Mo, which is then sold to a smelter ASX:ZGM
Resource Potential Less than half of the Mo geochemical anomaly has been tested by drilling. Most holes in the central part of the anomaly have been drilled only to shallow depth ASX:ZGM
Resource Potential Drill Section 2800N Most holes finished in Mo, showing excellent potential to expand the resource at depth. Note the second high-grade zone intersected in the eastern part of the deposit ASX:ZGM
Anthony - Oxide Resource • The Anthony deposit is weathered (oxidised) to 60 – 80m depth • Oxide resource - 36 million tonnes at 380 ppm Mo (200 ppm Mo cut-off) • Program to investigate beneficiation & leaching options in progress Outcrop - veins in weathered schist ASX:ZGM
Discovery Potential Anthony Magnetic data indicate two magnetic intrusive bodies. Anthony is related to non- magnetic bodies adjacent to the magnetic intrusions. The geology indicates good potential for discovery of additional molybdenum, gold & copper ASX:ZGM
Other Targets Zamia has identified other targets for gold, molybdenum & copper. These will be explored in an ongoing exploration program The magnetic image (at right) shows intrusive bodies in EPM 17488 Mistake Creek. This EPM contains known gold, copper & molybdenum ASX:ZGM
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