Australian Junior Resources Blue Chip Australian Junior Resources Blue Chip Australian Junior Resources Blue Chip Australian Junior Resources Blue Chip 15 December 15 December 2009 2009
Disclaimer This presentation should not be relied upon as a representation of any matter that a potential investor or their adviser should p p p y p consider in evaluating the Company. Potential investors must make their own independent assessment and investigation of the matters contained herein and should not rely on any statement or the adequacy or accuracy of the information provided. The Company and its related bodies corporate or any of its directors, agents, officers or employees do not make any representation or warranty, express or implied, as to the accuracy or completeness of any information, statements or representations contained in the presentation, and they do not accept any liability whatsoever (including in negligence) for t ti t i d i th t ti d th d t t li bilit h t (i l di i li ) f any information, representation or statement made in or omitted from this presentation. This presentation may contain forward looking statements that are subject to risk factors associated with copper, gold, other minerals and gas businesses. Based on currently available information, the Company believes that the expectations reflected in these statements are reasonable but they may be affected by a variety of variables and changes in underlying fl d i h bl b h b ff d b i f i bl d h i d l i assumptions which could cause actual results or trends to differ materially, including but not limited to: price fluctuations, actual demand, currency fluctuations, drilling and production results, reserve estimates, loss of market, industry competition, environmental risks, physical risks, legislative, fiscal and regulatory developments, economic and financial market conditions in various countries and regions interest and foreign exchange rates availability of capital political risks project delay or in various countries and regions, interest and foreign exchange rates, availability of capital, political risks, project delay or advancement, approvals and cost estimates. Comments in relation to exploration targets, exploration potential and resource potential referenced in this document have been made based on both historical and company technical data at hand of the time of writing. It is important to note that these targets are conceptual in nature as there has been insufficient exploration to date to define a mineral resource and it is these targets are conceptual in nature as there has been insufficient exploration to date to define a mineral resource and it is uncertain if further exploration will result in the determination of a mineral resource. Interested parties should form their own view on these exploration targets. Investors should undertake their own analysis and obtain independent advice before investing in HGO shares. All references to dollars, cents or $ in this presentation refer to Australian currency unless otherwise stated.
Key Assets Australian Mine with Asian Growth Pipeline p Mining � Kanmantoo : oxide Kanmantoo : oxide copper heap leach – 100% Development � Kanmantoo Copper/Gold Mine: a a too Coppe /Go d e 2.0MTPA -> 3.0MTPA – 100% Exploration � Bird’s Head, Indonesia: gold and copper/gold – 80% � Sumba, Indonesia: gold – 80% � Kanmantoo: copper/gold, silver/lead/zinc silver/lead/zinc – 100% 100% � Wheal Ellen: silver/lead/zinc/gold – 100% � Cocata and Coulta: Cocata and Coulta: uranium – 100% � Watson: uranium – 50% � Munderra: base metals – 100% � Mt. Lucy: magnetite – 100% initially 2
Metals Outlook Copper on the Move pp “Right Commodities at the Right Time” M Macquarie Bank Commodities, 9 June 2009 – i B k C diti 9 J 2009 “ Looking further out, in our view, copper has the best fundamentals of any of the base metals, and should go into an economic upturn with low stocks limited go into an economic upturn with low stocks, limited idle capacity and a lack of committed new projects. Over the 2011/12 period, copper could easily be as tight as it was at the height of the recent bull market” tight as it was at the height of the recent bull market . Fraser Institute 2009 – “ Commodity shortages could hinder recovery the world may face a shortage of raw hinder recovery, the world may face a shortage of raw materials and skyrocketing commodity prices as the world economy moves past the recession and into renewed growth.” g 3
Metals Outlook World Industrial Production & Commodity Prices y Core of argument for secular reversal of g the long term decline of real commodity prices 4
Kanmantoo Project South Australian Region g • South Australia is one of the most prospective terrains in most prospective terrains in the world � Home of the Big One; Olympic Dam Olympic Dam • Historically neglected and vastly under explored. • Initial project at Kanmantoo will produce cash flow to fund Hillgrove’s exploration and development development. • Strategy to commence new developments once mine underway underway � Upside from additional regional satellite reserves � Underground high grade � Underground high grade targets e.g. Bremer Mine Hillgrove’s Near Term Focus
Kanmantoo Project Kanmantoo Copper/Gold Mine 2009 pp 6
Kanmantoo Project Ore Body 7
Kanmantoo Project Snapshot p • Kanmantoo was operated by NBH/ SBH/EZ as their first open cut mine SBH/EZ as their first open cut mine from 1971-1976, mining around 4.1Mt of copper ore. • Hillgrove commenced work in 2003, Hillgrove commenced work in 2003, and plans to start mining 2010 / 2011. • Low risk access to critical water, power and transport infrastructure. p p • Attractive employer/costs compared to fly-in fly-out remote mine operations. • RBS Sempra Commodities contracted • RBS Sempra Commodities contracted to life of mine concentrate off-take • Total (0.25% Cu Cut Off Grade Model) T Tonnes C Cu A Au A Ag C Cu Metal M t l Au A Ag A Type Kt % g/t g/t Tonnes Ounces Ounces Oxide 1,125 0.8 0.2 3.3 8,600 6,900 121,000 Transitional 1,620 0.8 0.2 2.9 12,200 9,600 152,000 Fresh 29,447 0.9 0.2 3.2 271,500 174,600 3,040,700 Total 32,192 0.9 0.2 3.2 292,200 191,100 3,313,600 8
Kanmantoo Project Summary y Resources: 292,700 tonnes copper @ 0.9% 194,700 ounces gold @ 0.2g/t 3,326,300 ounces silver @ 3.2g/t Oxide heap leach operation 450tpa contained copper Oxide heap leach operation 450tpa contained copper Mining Stage 1: Mining Stage 1: Mining Stage 2: 2.0Mtpa sulphide float operation to produce ~20,000tpa copper in concentrate produce 20,000tpa copper in concentrate Open cut with underground potential Mining method: 6 5 year mine life with potential to expand 6.5 year mine life with potential to expand Mine life: Mine life: Capex : AUD$98 million Production : ~20,000tpa copper in concentrate Q1 2011 Cash operating cost : USD$1-50/lb @ Cu price USD$2.60 AUD/USD = 0.80 60-114,000tpa @ 24% copper, 3.5g/t gold, 66g/t silver Concentrate: 9
Kanmantoo Project Low Risk Features • Operational histor significantl de risks the project Operational history significantly de-risks the project • Known, simple metallurgy with excellent recoveries • Large database of exploration, mining and processing information • Capital cost per tonne of annual copper in concentrate produced <50% Capital cost per tonne of annual copper in concentrate produced <50% of global average • Head grade > the weighted average global head grade Head grade the weighted average global head grade • Low cost power, water, transport and labour • Geotechnically sound ground conditions • Low political risk environment 10
Kanmantoo Project Pillara Plant/Heap Leach Operation p p Pillara Mine’s process plant and associated equipment and buildings Oxide ore heap leach processing operation 11
Exploration Focus Kanmantoo Near Mine Prospects 12
Kanmantoo Project Uniquely Positioned q y • Only Australian mid-cap copper developer with production planned to y p pp p p p start in 2011: � $98 million capex � Mining Lease 6345 granted � MARP approval almost complete � All feasibility studies, metalurgical testing completed � Freehold land of 835ha (2,063 acres) acquired � Pillara process plant acquired � Long lead time equipment acquired � Progressing joint venture financing • Short latency project ideally positioned to come on stream at the start Short latency project ideally positioned to come on stream at the start of a global synchronised global economic recovery 13
Regional Pipeline – Indonesia Highly Prospective Advanced Gold Exploration g y p p 14
Bird’s Head Project Regional Setting g g Bird’s Head covers part of the interpreted westward continuation of the New Guinea ‘Orogenic Belt’ 15
Bird’s Head Project Historical Drainage Anomalies g Stream Sediment Anomalies by Gold Work by Normandy and past explorers highlighted 16 high order anomalies, with Bird’s Head containing 10 of these 16
Delta Prospect West Delta Area 17
Bird’s Head Delta Prospect p Gold Rock Geochemistry • Confirms large corridor of mineralisation • Peak value of 205g/t gold • Peak values 205g/t gold, 471g/t silver, 17.9% copper, 471g/t silver, 17.9% copper, 6.3% lead, 7.5% zinc (not same sample)
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