INVESTING IN SUSTAINABLE GROWTH Australian Zinc Briefing : 20 February 2008 Len Jubber - CEO Bruce Hooper – GM Exploration
Slide 2 Corporate overview Capital structure (as at 19 Feb 2008) “Balance Sheet” (as at 31 Dec 2007) ASX PEM Cash $136m Shares on issue 196m Debt $28m Options 4.3m Beltana zinc stockpile 94kt zinc Market capitalisation A$314m (undiluted at $1.60 per share) 12 month ave daily turnover: 600 5000 1.1m Perilya Zinc Price Lead Price 4500 500 4000 3500 (US$/TONNE) (CENTS/SHARE) 400 Key Shareholders (as at 31 Jan 2008) 3000 300 2500 AXA Group 10.9% 2000 Barclays Global Investors 8.6% 200 1500 Delta Partners 5.6% 1000 100 500 Board & Employees 2.3% 0 0 Feb 2007 May 2007 Aug 2007 Nov 2007 Feb 2008 Corporate Broken Hill Flinders Mount Oxide Growth
Slide 3 Operating Operating Operating Operating Projects Projects Projects Projects Tampang (Cu, Au) Tampang (Cu, Au) Tampang (Cu, Au) Tampang (Cu, Au) Exploration Exploration Exploration Exploration Mineral Resources 2.5 Contained Metal Mt 2.0 Mount Oxide (Cu) Mount Oxide (Cu) Mount Oxide (Cu) 1.5 Mount Oxide (Cu) Mount Oxide (Cu) Mount Oxide (Cu) 1.0 0.5 0.0 Zinc Lead Copper Dee Range (Cu, Zn) Dee Range (Cu, Zn) Dee Range (Cu, Zn) Dee Range (Cu, Zn) Ore Reserves Beltana Beltana Beltana Beltana 1.0 (Zn) (Zn) (Zn) (Zn) Contained Metal Mt 0.8 0.6 Broken Hill Broken Hill Broken Hill Broken Hill 0.4 (Zn, Pb, Ag) (Zn, Pb, Ag) 0.2 (Zn, Pb, Ag) (Zn, Pb, Ag) 0.0 Potosi (Zn, Pb, Ag) Potosi (Zn, Pb, Ag) Zinc Lead Potosi (Zn, Pb, Ag) Potosi (Zn, Pb, Ag) North Mine Deeps North Mine Deeps North Mine Deeps North Mine Deeps Note : Cu as at Feb 2008 (Zn, Pb, Ag) (Zn, Pb, Ag) (Zn, Pb, Ag) (Zn, Pb, Ag) Zn, Pb as at 2006/07 Flinders (Zn) Flinders (Zn) Flinders (Zn) Flinders (Zn) Corporate Broken Hill Flinders Mount Oxide Growth
Slide 4 Perilya exposure to base metals Zinc Copper Lead 750 5,000 250 10,000 125 4,000 600 4,000 200 100 8,000 Copper Price (US$/t) 3,000 LME Stockpiles (kt) LME Stockpiles (kt) Zinc Price (US$/t) LME Stockpiles (kt) Lead Price (US$/t) 450 3,000 150 75 6,000 2,000 300 2,000 100 50 4,000 1,000 150 1,000 50 25 0 0 0 2,000 0 0 Feb 05 Feb 06 Feb 07 Feb 08 Feb 05 Feb 06 Feb 07 Feb 08 Feb 05 Feb 06 Feb 07 Feb 08 Broken Hill – 13 th largest Broken Hill – 6 th largest Mount Oxide: zinc mine lead mine : - resource upgraded to 203,000t Cu Developing new ore - resource upside as - potentially low sources at Broken Hill focus in recent decades development has been on zinc threshold Stage 1 – Beltana open - leverage to upside pit successfully - Including 8,300t through put options, completed cobalt & 4.2moz Ag down side protection Corporate Broken Hill Flinders Mount Oxide Growth
Slide 5 Broken Hill Developing new ore sources Piesses Knob Potosi Flying Doctor North Mine North Mine Deeps City Southern Operations Concentrator 5 km Stirling Vale Southern Ops Extensions 1130 Smiths Sam Deeds Perilya Broken Hill Mining Lease Surface projection of ore bodies Henry George Existing Operations Feasiblity Study Monarch Flat Exploration targets Corporate Broken Hill Flinders Mount Oxide Growth
Slide 6 Potosi & Flying Doctor targeting 6mt @ 10-12% zinc and 3-5% lead Flying Doctor Potosi Resource Resource 2.36 Mt @ 11.7% Zn, 4.6% Pb 54 g/t Ag 0.52 Mt @ 5.4% Zn, 7.1% Pb 72 g/t Ag Corporate Broken Hill Flinders Mount Oxide Growth
Slide 7 Low risk approach to North Mine Deeps No 2 Shaft No 1 Shaft Vent Shaft No 3 Shaft Decline portal 10300MRL 5 Level Ventilation shaft provides return airway for Decline and No3 shaft Current Decline 10 Level 12 level Shaft provides initial access for dewatering Mine Shaft re-commissioned to 22 level - Rock hoisting only with wire-rope guides Extended Decline provides 9600MRL 9600MRL access to ore body extremities 20 Level Water level 22 level North Mine Deeps 26 level 2 Lens 3 Lens 9000 MRL Fitzpatrick 32 level 3.7mt @ 24.7 % Zn + Pb Indicated / Inferred Resource North Mine 8500MRL Corporate Broken Hill Flinders Mount Oxide Growth
Slide 8 Broken Hill Pinnacles Region 11:30 Smiths Henry George Sam Deeds 2.7 m @ 13.5 % Zn 6.6m @ 11.7 % Zn 6m @ 9.3 % Zn Major Potential Between, ie Smiths, Sam Deeds Corporate Broken Hill Flinders Mount Oxide Growth
Slide 9 Henry George large system over 700m long, grade increasing with depth 200m Grade of Zinc 6.6m @ 11.7 % Zn 3.8 m @ 12.3 % Zn Open to Depth Corporate Broken Hill Flinders Mount Oxide Growth
Slide 10 11:30 Deposit high grade near surface narrow intercepts 200m 2.7 m @ 13.5 % Zn Grade of Zinc 1.3 m @ 33.7 % Zn Corporate Broken Hill Flinders Mount Oxide Growth
Slide 11 Value of spare Broken Hill concentrator equates to ~ A$150mpa, ~ US$0.20/ lb zinc Southern Operations Potosi Southern Operations Potosi 1.6 – 1.8 Mt per annum 0.2 – 0.4 Mt per annum 1.6 – 1.8 Mt per annum 0.2 – 0.4 Mt per annum Flying Doctor Flying Doctor North Mine North Mine 0.15 – 0.35 Mt per annum 0.15 – 0.35 Mt per annum 0.1 – 0.2 Mt per annum 0.1 – 0.2 Mt per annum North Mine Deeps North Mine Deeps 0.2 – 0.4 Mt per annum 0.2 – 0.4 Mt per annum Satellite open pitable Satellite open pitable Broken Hill Concentrator deposits–Henry George? deposits–Henry George? 2.8 Mt Capacity North Mine Deeps Flying Doctor evaluating Potosi North Mine Southern Operations existing ore feed Corporate Broken Hill Flinders Mount Oxide Growth
Slide 12 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 13 Direct ore shipping separate stockpiling creates marketing opportunities Flinders 966kt @ 31% Zn = 300kt metal High Grade Product > 35% zinc Intermediate Grade Product MARKETABLE 316kt @ ~ 32% = 101kt metal MARKETING Low Grade Product Stage 1 - Beltana > 15% zinc 376kt @ 32% Zn UNMARKETABLE Reliance 387kt @ 27.6% Zn = 105 Kt metal Stage 2 Stage 3 Evaluate potential of Evaluate beneficiation Other deposits along strike 235kt @ 30.2% Zn = 71 Kt metal Corporate Broken Hill Flinders Mount Oxide Growth
Slide 14 S tage 1 –Beltana Leigh Creek Leigh Creek • Stockpiled 316,400t Operation Development targets Aroona Aroona @ 32% zinc Exploration targets (101kt contained zinc) Rail Road Aroona II Aroona II • Cash cost US$0.65/lb Relative scale of current resource zinc 5 km Tom Thumb Tom Thumb • Completed within year Reliance Reliance Moolooloo Moolooloo Aristotle Aristotle Beltana Mine Beltana Mine Sundown Sundown Wallrider Wallrider Corporate Broken Hill Flinders Mount Oxide Growth
Slide 15 Stage 2 – Reliance Drilling completed Resource update underway Intercepts include : 79m @ 35 % Zn 21m @ 48 % Zn Hydrology modelling underway Feasibility Study Underway Pit optimisation indicates strong cash flow with 100m deep pit Corporate Broken Hill Flinders Mount Oxide Growth
Slide 16 Mount Oxide advanced copper proj ect • Mt Isa region • Close to existing infrastructure • Resource recently upgraded • Exploration camp under construction • Infill and extensional drilling April • Scoping Study March Qtr 2008 • Permitting advancing • Feasibility Study June 2009 Corporate Broken Hill Flinders Mount Oxide Growth
Slide 17 Mount Oxide resource open in all directions Table 1: Mount Oxide Mineral Resource Estimate at 0.2 % Cu cut off Cu Co Ag Copper Cobalt Silver Classification M Tonnes % % g/t Contained t Contained t Contained oz Indicated 9.8 1.6 0.05 12 154,000 5,200 3,430,000 Inferred 5.7 0.9 0.05 4 47,000 3,100 770,000 - Stockpiles 0.3 0.7 - - 2,000 - Total 15.5 1.3 0.05 9 203,000 8,300 4,200,000 • 80 % increase in contained copper • 60% in Indicated Category • Scoping study looking at metallurgy, geotechnical and economics • Potential bi-products Corporate Broken Hill Flinders Mount Oxide Growth
Slide 18 Mount Oxide 300 metres Mount Oxide Resource model looking North in 3d, demonstrating the relationship of shallow and low angle stratigraphic mineralised lenses and vertical structures at depth Corporate Broken Hill Flinders Mount Oxide Growth
Slide 19 W Mount Oxide N Target zone for 2008 300 metres Mount Oxide Resource model looking West in 3d, demonstrating the potential to the North in a sparsely drilled area Corporate Broken Hill Flinders Mount Oxide Growth
Slide 20 Perilya suite of exploration, development & operating assets Operating Exploring Feasibility Developing Southern Ops North Mine Potosi Flying Doctor North Mine Deeps Reliance Mount Oxide Pinnacles Zinc, Lead Zinc Copper Corporate Broken Hill Flinders Mount Oxide Growth
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