Len Jubber Chief Executive Officer Diggers & Dealers Forum 2007 Building momentum
Slide 2 Perilya –moving towards achieving critical mass as a producer • Strong balance sheet • Solid earnings capacity at Broken Hill • Developing new ore bodies at Broken Hill & Flinders • Investing in “near-mine” exploration activities at Broken Hill, Flinders and Mount Oxide • Evaluating M & A opportunities Top 20 zinc producer and top 10 lead producer Corporate Broken Hill Flinders Mount Oxide Growth
Slide 3 S trategy for growth Accelerate development of advanced assets and diversify near-term single asset risk through M&A Broken Hill Flinders Mount Oxide Corporate Broken Hill Flinders Mount Oxide Growth
Slide 4 Capital S tructure Perilya share price vs zinc & lead price (LME Spot) 600 6000 PEM ASX: PEM 500 5000 (US$/TONNE) (CENTS/SHARE) 400 4000 Shares on issue: 196M ZINC 300 3000 Options: 4.5M LEAD 200 2000 Market Capitalisation: A$882M 100 1000 0 0 ( Undiluted at $4.50 per share ) 1 Jul 2006 1 Oct 2006 1 Jan 2007 1 Apr 2007 1 Jul 2007 Geographic analysis of Share Register (31 Jul 2007) KEY SHAREHOLDERS: 80 Barclays Global Investors: 9.5% 60 Shares (m) AXA Group: 8.1% 40 Delta Partners: 5.5% 20 Board & Employees: 2.1% 0 Australia UK North Europe Asia New Unknown America (ex UK) Zealand Corporate Broken Hill Flinders Mount Oxide Growth
Slide 5 S trong financial performance - $157m net cash at June 2007 Corporate Broken Hill Flinders Mount Oxide Growth
Slide 6 S ignificant zinc and lead producer Annual zinc production by company (top 20) Annual lead production by company (top 20) Xstrata AG BHP Billiton Teck Cominco Limited Xstrata AG Glencore The Doe Run Company Zinifex Teck Cominco Limited Hindustan Zinc Anglo American plc Anglo American plc Glencore New Boliden Minera Volcan Minera Volcan Perilya Votorantim Industrias Penoles Zinifex Perilya (including projects) Hindustan Zinc Lundin Mining Corporation Western Mining BHP Billiton Industrias Penoles Breakwater Resources New Boliden Kazakhmys Ivernia West Oxiana Resources NL Lundin Mining Corporation HudBay Minerals Shenzhen Zhongjin Lingnan Yunnan Chihong Metallurgy Perilya (current) Hunan Nonferrous Ind Grupo Mexico Yunnan Chihong Metallurgy Shenzhen Zhongjin Lingnan Exxaro Resources Omnium Nord Africain ZGH Boleslaw - 200 400 600 800 1,000 1,200 - 50 100 150 200 250 300 Annual zinc production Annual lead production ('000 tonnes per annum) ('000 tonnes per annum) Corporate Broken Hill Flinders Mount Oxide Growth
Slide 7 Perilya – substantial earnings capacity & growth potential Lead Zinc Copper 125 4,000 250 10,000 750 5,000 100 600 4,000 200 Zinc Price (US$/t) Copper Price (US$/t) 3,000 Lead Price (US$/t) 8,000 LME Stockpiles (kt) LME Stockpiles (kt) LME Stockpiles (kt) 75 450 3,000 150 2,000 6,000 50 300 2,000 100 1,000 4,000 25 150 1,000 50 0 0 0 0 0 2,000 Jul-05 Jul-06 Jul-07 Jul-05 Jul-06 Jul-07 J u l - 0 J u l - 0 J u l - 0 5 6 7 No. 1 consensus pick Production/refining Tight market for next 3-5 years interruptions Price moving in Mount Oxide: Broken Hill – 6 th largest US$3,000 - 4,000 lead mine : - high grade band - potentially low - resource upside Low capex growth development to top 10 zinc threshold - captured value through producer status put options - resource open in all directions Corporate Broken Hill Flinders Mount Oxide Growth
Slide 8 Quality suite of assets • Rationalised portfolio to focus on three key assets • Significant landholding at each asset • Low capex development pipeline Corporate Broken Hill Flinders Mount Oxide Growth
Slide 9 Broken Hill - performance underpinning growth • 5 th anniversary since acquisition – 642 Kt zinc, 298 Kt lead • 5 year mine life maintained since acquisition • Resident workforce providing experience and stability • Investing in plant / equipment renewal and exploration • Largest mining lease holder in Broken Hill history Targeting three new ore sources Corporate Broken Hill Flinders Mount Oxide Growth
Slide 10 Broken Hill concentrator - increase production and reduce unit cost Southern Operations Potosi & Flying Doctor Southern Operations Potosi & Flying Doctor 1.9 Mt per annum 0.2 – 0.4 Mt per annum 1.9 Mt per annum 0.2 – 0.4 Mt per annum North Mine North Mine North Mine Deeps North Mine Deeps 0.1 – 0.2 Mt per annum 0.1 – 0.2 Mt per annum 0.2 – 0.4 Mt per annum 0.2 – 0.4 Mt per annum Satellite open pitable Satellite open pitable deposits ?? deposits ?? Broken Hill Concentrator 2.8 Mt Capacity North Mine Deeps evaluating Potosi & Flying Doctor North Mine Southern Operations existing ore feed Corporate Broken Hill Flinders Mount Oxide Growth
Slide 11 Broken Hill – long history of reserve replenishment Developing Operating Potosi Exploration Decline Southern Operations & North Mine 1.6mt @ 13.0% Zn, 11.6mt @ 7.3% Zn Resource Reserve 4.8% Pb 3.1% Pb, 43g/t Ag (as at 30 Jun 2006) (as at 30 Jun 2006) 47.7g/t Ag Exploration decline Project status 448m from portal 1.9Mtpa Production rate Flying Doctor Open Pit 0.52mt @ 5.4% Zn, Resource 5 years Mine life 7.1% Pb, 72 g/t Ag (as at 30 Jun 2007) Feasibility study due Project status 120 kt Zn Dec Qtr Ave annual metal 70 kt Pb production North Mine Deeps Redevelopment 2 Moz Ag 4.2mt @ 11.2% Zn, Resource 13.7% Pb, 214g/t Ag (as at 30 Jun 2006) Pre-feasibility Project status study due Sept Qtr Corporate Broken Hill Flinders Mount Oxide Growth
Slide 12 Broken Hill exploration - targeting 10+ year mine life Piesses • A$12M exploration budget 2007/08 Knob − extend existing resources Potosi Flying − identify new satellite ore bodies Doctor North Mine − major new discovery Round Hill City Southern Operations 5 km Mill Stirling Vale Southern Ops 1130 Extensions Smiths Sam Deeds Perilya Broken Hill Mining Lease Henry George Surface projection of ore bodies Existing Operations Exploration targets Monarch Flat Corporate Broken Hill Flinders Mount Oxide Growth
Slide 13 Potosi & Flying Doctor - targeting 4mt @ 10-12% zinc and 3-5% lead Flying Doctor 0.5 Mt @ 5.4% Zn, 7.1% Pb, 73 g/t Ag North Corporate Broken Hill Flinders Mount Oxide Growth
Slide 14 Potential to achieve critical mass in Northern lodes s 2.3m @ 4.0% Pb/Zn 3.1m @ 10.0% Pb/Zn 3.4m @ 7.0% Pb/Zn Corporate Broken Hill Flinders Mount Oxide Investment
Slide 15 Flinders zinc oxide proj ect Rail line Rail line Tenements Tenements Existing infrastructure + direct high grade ore shipping + high Zn price = superior IRR Corporate Broken Hill Flinders Mount Oxide Growth
Slide 16 966Kt @ 31% Zn = 300kt metal Leigh Creek Leigh Creek Aroona Aroona Operation • Cluster of shallow Development targets deposits Exploration targets Aroona II Aroona II Rail • Currently mining Road Beltana Relative scale of current resource Tom Thumb Tom Thumb 5 km • Drilling along strike Reliance Reliance Moolooloo Moolooloo Aristotle Aristotle Beltana Mine Beltana Mine Sundown Sundown Wallrider Wallrider Corporate Broken Hill Flinders Mount Oxide Growth
Slide 17 S eparate stockpiling creates marketing opportunities High Grade Product 150kt @ 38.1% = 57kt metal Intermediate Grade Product MARKETABLE 392kt @ ~ 30% = 110kt metal POTENTIALLY Low Grade Product MARKETABLE 242kt @ 21.5% = 53kt metal Stage 1 - Beltana UNMARKETABLE 376kt @ 32.6% Zn = 123 kt metal Reliance 355kt @ 29.5% Zn = 105 Kt metal Stage 2 Stage 3 Evaluate potential of Evaluate beneficiation deposits along strike Other 235kt @ 30.2% Zn = 71 Kt metal Corporate Broken Hill Flinders Mount Oxide Growth
Slide 18 Growth Mount Oxide IRR from high grade ore sales only Flinders Capital <$15M Beltana base case Broken Hill Corporate – 135%
Slide 19 Beltana upside case – blended intermediate grade ore + low grade high silicate ore Developing market options for 20% Zn high silicate product EARNINGS No additional Cap Ex Corporate Broken Hill Flinders Mount Oxide Growth
Slide 20 Maximising value = repeat developments along strike + product flexibility + multiple off take partners Opportunity to compress timeframe through expanded off take agreements EARNINGS Deposit style open to repetition along 15km strike Marketing key to unlocking latent value Corporate Broken Hill Flinders Mount Oxide Growth
Slide 21 Mount Oxide copper proj ect - targeting 300kt Cu • Resource 4.0Mt of 2.8 % Cu • Similar style deposit to Mt Gordon (14.9Mt @ 2.9% Cu) • Close to existing infrastructure • Excellent drilling results – 30.4m@ 5.2 Cu, 48ppm Ag and 426ppm Co • $3.5m drilling budget to Dec 2007 → Pre-feasibility study Mar Q 2008 Corporate Broken Hill Flinders Mount Oxide Growth
Slide 22 Less than 50 holes drilled to date 15m @ 1.2 % Cu Haemitite Breccia 1m @ 1.6 % Cu Ore Cu Cu % Tonnes % Metal Kt 1.5 2.5 37 33 Inferred 2.5 3.0 75 67 Indicated Total 4.0 Mt 2.8% 112Kt 100% Corporate Broken Hill Flinders Mount Oxide Growth
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