Presentation May 2014 >
Disclaimer Forward-Looking Information This document may contain forward-looking statements. These forward-looking statements are made as of the date of this document and Sierra Rutile Limited (the “Company”) does not intend, and does not assume any obligation, to update these forward -looking statements, whether as a result of new information, future events or otherwise, except as required under applicable securities legislation. Forward- looking statements relate to future events or future performance and reflect Company management’s expectations or belief s regarding future events and future performance and include, but are not limited to, statements with respect to the estimation of mineral reserves and resources, the realization of mineral reserve estimates, the timing and amount of estimated future production, costs of production, capital expenditures, success of mining operations, environmental risks, unanticipated reclamation expenses, title disputes or claims and limitations on insurance coverage. In certain cases, forward- looking statements can be identified by the use of words such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will be tak en”, “occur” or “be achieved” or the negative of these terms or comparable terminology. By their very nature forward -looking statements involve known and unknown risks, uncertainties, assumptions and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward looking statements. Such factors include, among others, risks related to actual results of current exploration activities; changes in project parameters as plans continue to be refined; future prices of mineral resources; possible variations in ore reserves, grade or recovery rates; accidents, labour disputes and other risks of the mining industry; delays in obtaining governmental approvals or financing or in the completion of development or construction activities; as well as those factors detailed from time to time in the Company's interim and annual reports. These risks, uncertainties, assumptions and other factors could adversely affect the outcome and financial effects of the plans and events described herein. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward- looking statements. >
Investment Highlights Project Location Leading mineral sands producer with a well- 1 GUINEA established multi-mine operation SIERRA LEONE Strong existing production base and significant Moyamba installed infrastructure provide support for future Freetown 2 growth Bo Gbangbatok Momaligi Construction-ready projects, well-positioned to LIBERIA Mines 3 Process plant and tailings meet pick-up in rutile demand Main road Lanti Dredge Strong operating margins and cash flow generation supports future distributions to 4 shareholders Strong Board and management team with an 5 illustrated ability to deliver on the business plan > 1
Driving Value From An Established Operation Strong Rutile Production Growth 1 Lanti Dredge 160 Bucket line dredge and integrated processing plant Other capable of mining and treating Trailing 12 months production (rutile '000 tonnes) Lanti Dry Mining 1,000tph Lanti Dredge 120 Lanti Dry Mining Truck and shovel mining operation feeding a central 80 500tph processing plant 40 Mineral Separation Plant Currently capable of processing >165ktpa of rutile, with near-term upgrades 0 increasing processing capacity to 225ktpa A well-established operation with strong year-on-year production growth > 1 Sierra Rutile 2 2 CAGR between 1Q11 and 1Q14 12-month trailing production
Growth Supported by Significant Installed Infrastructure 1A - Bucket Ladder Dredge 2A – Wet Plant 3 – Trucking 4 – MSP Bucket ladder Dredge designed to dig Wetplant to process the Dredge feed at a rate of 1,000 tonnes per hour into a heavy mineral concentrate 1B – Dry Mining 2B – Concentrator Plant Mineral Separation Plant separates the heavy Trucking operation to transport heavy mineral concentrate into its components – mineral concentrate to the Mineral Separation Plant and finished product to capacity to produce 225,000 tonnes per annum the Port 5 – Storage Conventional earth moving equipment, Concentrator plant to process the dry mined mines 500 tonnes per hour ore into a heavy mineral concentration 7 – Shipping 6 – Port Silos and domes capable of storing 32,000 tonnes of product Port capable of loading over Shipping fleet comprising two push boats and 1,000 – 2,000 500,000 tonnes of product per year tonne barges used to transport product to deep water buoys for loading onto international vessels Existing infrastructure supports production growth to 225ktpa and is easily expandable to 275ktpa > 3
Growth Ready To Be Delivered: Gangama Dry Mine > Project overview Incremental Production Growth from Gangama – Production available within 12 months 240 – Production (rutile '000 tonnes) The Gangama Dry Mining project is operationally 200 +77% identical to the Lanti Dry Mining project 160 – The 1,000tph project consists of 2x500tph units 120 – Power, water and road access is already in place 80 – +20 year life as the mining unit will mine nearby 40 deposits once the Gangama deposit is depleted 0 > Strong focus on capital discipline 2014 Guidance Gangama Incl. Gangama – Value-optimisation study reduced Gangama capital budget by 21% from US$103 million 1 to Gangama Dry Mining 1 (Gangama deposit only) US$81 million 2 Average annual production rate (ore mined) 6.9mtpa > Minimal risk of capital cost over-runs Average annual rutile production 93,100 tpa – 77% of capital cost is fixed Project life (Gangama deposit life) 5 years – Only minor upgrades required to the MSP in Up-front capital expenditure $81mm order to reach required 225ktpa capacity Construction period 12 months Low-risk, value enhancing project which is ready to execute > 1 Pre-feasibility study estimate 4 2 Feasibility study estimate
Further Production Growth: Sembehun Dredge > Project overview Sembehun Dredge Study 1 : Key Project Highlights – Dredge mining operation based on a single Average production rate (ore mined) 13.0mtpa 1,875tph bucket ladder dredge and associated Average annual rutile production 135,000 tpa / floating treatment plant 113,000 tpa (first 5 years / LOM) – Product to be trucked 40km to existing MSP Project life 22 years – Product export through the existing port Up-front capital expenditure 2 $192 million – Power to be provided by existing power facility – Full camp and maintenance facilities established Deposit in the Sembehun area Mining Pond Mining Lease Boundary > Project status Proposed Dam Final Product Haul Road Existing Road – Pre-feasibility study complete HMC Hauling Road – Optimization study to be completed in 2015 to trade-off dredge mining against lower-capital cost, more selective dry mining techniques – Feasibility study to commence in 2015 Well-defined project that delivers strong financial returns for over 22 years > 1 Snowden Mining Industry Consultants study 5 2 Sierra Rutile estimate – based on revised capital cost using existing MSP and power supply
Ongoing Cost Reduction Drives Increasing Cash Flow > Tightly managed operating costs Decline in Operating Costs 1 Total Rutile Production Operating Cost / Tonne – Implementing cost-cutting initiatives following 140 900 $881 a bottom-up review 130 800 Total Rutile Production (kt) Operating Cost / tonne rutile 120 700 – $683 Reduction of 22% in operating cash costs in net of by-products 110 600 2013, further reduction of 18% expected in $557 100 500 2014 90 Q1 2014 400 80 operating cost: – Continually reinforcing a culture of cost US$539/tonne 300 70 efficiency 60 200 '12 '13 '14 > Efficient capital allocation Gangama Dry Mining Project Capital Cost 2 – Lanti Dry Mining project was completed on $120 21% cost budget and ahead of schedule reduction $110 $103 Capital Cost (US$ millions) – Gangama Dry Mining project capex reduction $100 by over 21% $90 $85 $81 $80 – Additional $23 million capital savings to be $70 realized through dry mining, rather than $60 dredging, the Gbeni deposit $50 $40 Original Cost Estimate Value-Optimized Cost Further Cost Reduction Sierra Rutile continues to generate shareholder returns by focusing on cost efficiency > 1 Sierra Rutile 2013 financial results; Operating cost per tonne is defined as total cash cost less by-product revenue divided by tonnes of rutile produced 6 2 Sierra Rutile
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