For personal use only Chinese Backed Magnetite & Port Chinese Backed Magnetite & Port Development in South Australia Development in South Australia Investor Presentation Investor Presentation May 2012 May 2012 SOUTH AUSTRALIA’S DEVELOPING IRON ORE HUB FOR HIGH QUALITY MAGNETITE CONCENTRATE 1 Ben Hammond, Chief Operating Officer
DISCLAIMER For personal use only FORWARD LOOKING STATEMENTS These materials include forward looking statements. Forward looking statements inherently involve subjective judgement and analysis and are subject to significant uncertainties, risks and contingencies, many of which are outside of the control of, and may be unknown to Centrex Metals Limited (‘Centrex’ or the ‘Company’). Actual results and developments may vary materially from those expressed in these materials. The types of uncertainties which are relevant to the Company may include, but are not limited to, commodity prices, political uncertainty, changes to the regulatory framework which applies to the business of the Company and general economic conditions. Given these uncertainties, readers are cautioned not to place undue reliance on such forward looking statements. Forward looking statements in these materials speak only at the date of issue. Subject to any continuing obligations under applicable law or any relevant stock exchange listing rules, the Company does not undertake any obligation to publicly update or revise any of the forward looking statements or any change in events, conditions or circumstances on which any such statement is based. Forward looking statements include, but are not limited to, statements concerning Centrex’s planned exploration program, targeted resources, commencement of product export and other statements that are not historical facts. When used in this document, the words such as “could”, “target”, “plan”, “estimate”, “intend”, “may”, “aim”, “potential”, “should”, and similar expressions reflected in these forward-looking statements are reasonable, such as statements involving risks and uncertainties and no assurance can be given that actual results be consistent with these forward-looking statements. 2
CENTREX OVERVIEW For personal use only Current Projects • 40% interest in magnetite joint venture with Wuhan Iron & Steel, fully funded to Feasibility • 50% interest in deep-water port joint venture with Wuhan Iron & Steel • Minimum 50% interest in magnetite joint venture with Baotou Iron & Steel, fully funded to Feasibility • 100% interest in Wilgerup DSO hematite project • 100% interest in iron ore rights to 8 exploration licences outside current joint ventures in South Australia • 100% interest in base metals project in NSW CENTREX’S PROJECTS ARE WITHIN CLOSE PROXIMITY OF ITS PROPOSED PORT 3
WHY INVEST IN CENTREX? For personal use only • What competitive advantages does Centrex have in getting a magnetite project off the ground? • What separates Centrex from the rest of the pack? 4
CURRENT MARKET VALUE For personal use only The Gap… Represents An Implied Market Value of Centrex’s Project Portfolio of $0.082/share or $A 26M $0.082/share or $A 26M for; – WISCO Magnetite JV – WISCO Port JV NOT – Baotou Magnetite JV BAD VALUE! – Wilgerup DSO Project – 8 Iron Ore Exploration Licences 5 – 2 Base Metals Exploration Licences
For personal use only PROJECT SUMMARIES 6
WISCO MAGNETITE JOINT VENTURE For personal use only • Wuhan Iron & Steel (Group) Co. (“WISCO”) paid $A 78M directly to Centrex for 60% of the iron ore rights to 5 Exploration Licences on the Southern Eyre Peninsula • Centrex retains a 40% interest in the joint venture • WISCO has paid and is funding the first $A 75M of exploration and study costs, enough to complete a Definitive Feasibility Study for the initial magnetite iron ore project • WISCO must pay additional payment tranches to Centrex if the Joint Venture reaches certain Inferred Mineral Resource milestones (up to the value of $A 108M) • A Scoping Study has been completed on the Fusion Magnetite Project (“Fusion”) and a Definitive Feasibility Study well under way 7
WISCO MILESTONE PAYMENTS For personal use only Carrow Greenpatch Iron Mount Koppio, Brennand, Kapperna Exploration Target Minimum Exploration Target Maximum • WISCO to pay $27M directly to Centrex for each of the four resource milestone payments • After-tax estimate of $19M received at each resource milestone payment 2.0Bt • At 313.6M shares each incentive payment equivalent to $0.06/share 1.25Bt 1.75Bt • Currently 6 drill rigs on site undertaking 1.5Bt approved 108,000m program for infill *See slides 23, 24 & 25 for full details ^See slides 23, 24, 25 & 27 for full details drilling and exploration to expand ^The Exploration Targets quantities and grades presented are conceptual in nature, as there has been insufficient exploration to define an overall Mineral Resource and 8 resource base in 2012! it is uncertain if further exploration will result in the determination of additional Minerals Resources other than those stated.
PORT SPENCER JOINT VENTURE For personal use only • WISCO have entered into a 50/50 joint venture for the development of a deep-water bulk commodity facility at Port Spencer • Under the joint venture WISCO will fund the next $4 M of development studies • The project has Major Project status from the South Australian Government and PER released • Low environmental impact, no dredging, no tide or channel restrictions, minimal weather delays • The foundation customer for the port will be the WISCO Magnetite JV • Additional users such as hematite, grain and other magnetite users have been identified in addition 9
BAOTOU MAGNETITE JOINT VENTURE For personal use only • Baotou Iron & Steel Group (“Baogang”) may earn up to a 50% interest by spending $A 40M on exploration and studies • To date Baogang have committed $A 24M and earned a 30% participating interest • $A 21M spent to date on exploration and development studies • Prefeasibility Study expected for completion in late 2012 • 103Mt Inferred Mineral Resource and 530Mt to 750Mt Exploration Target at present* • Updated resource statements imminent *See slide 26 for full details *The Exploration Targets quantities and grades presented are conceptual in nature, as there has been insufficient exploration to define an overall Mineral Resource and it is uncertain if further exploration will result in the determination of additional Minerals 10 Resources other than those stated.
WILGERUP & IRON ORE EXPLORATION For personal use only • Wilgerup; – 100% Centrex owned DSO hematite project at Wilgerup – Massive hematite JORC Mineral Resources of 10.5Mt @ 59.8% Fe* – All Mining approvals received for a Baotou JV proposed 1 to 1.5Mpta operation over 7 years with production commencing in line with Port Spencer Development – Off-take agreements already in place • Iron Ore Exploration; WISCO JVs – 8 tenements outside current projects still to be explored on the Eyre Peninsula 11 *See slide 28 for full details
BASE METALS EXPLORATION For personal use only VHMS • Centrex holds two tenements Prospects prospective primarily for VHMS style base metal mineralisation • Secondary skarn prospects already historically identified • Barite also common as an accessory mineral within the tenements, plus Unknown historic gold occurrences SKARN Prospects • Airborne gravity and magnetics survey flown in 2010 with many high priority targets identified for follow-up • Currently preparing land access agreements for target drilling in 2012 • Significant historical Cu-Pb-Zn intercepts at Collector Prospect* 12 *See AGM Presentation 21 st January 2010 page 36 for full details
For personal use only DEVELOPMENT OF WISCO JOINT VENTURES 13
END USER CUSTOMER AS INVESTOR For personal use only • Iron ore concentrates are a niche market due to the relatively fine passing 2011 TOTAL SEABORNE IRON ORE EXPORTS size 57Mt Fines • Current pellet feed market less than 5% 146Mt Lump of the seaborne export market Pellets 178Mt • Limited ability with current technology Pellet Feed to sell concentrates into sinter market as dominantly ultra-fines (<150 µm) 777Mt • Limited use in sinter market at present SOURCE: CRU; Iron Ore Market Service, April 2012 with only some mills using around 5- 10% as sinter feed • While economies of scale for magnetite Wuhan Iron & Steel Group– 4 th Largest Global Steel Group (36.55Mt) concentrate projects are large, an end user for the product must first be SOURCE: MetalBulletin Top Steelmakers 2010 defined 14
LARGE RESOURCE POTENTIAL For personal use only • 454Mt of Mineral Resource Defined to date at Fusion • 701Mt to 1,015Mt of Exploration Target still to be drilled out • Drilling ongoing with 6 rigs operating on site for a 108,000m infill and exploration program • More resource updates expected in 2012 15 *See slides 23 & 27 (Bald Hill & Charlton Gully only)
INITIAL MINING AREA For personal use only • Coffey Mining completed conceptual mine designs for Koppio, Brennand, Kapperna and Iron Mount • Mineable Ore Reserves have yet to be defined for the project • Two primary crushers located at pit boundaries, with ore transported to process plant by overland conveyor 16
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