Mining Investment Opportunity March 2014
Forward Looking Information DISCLAIMER: Any numbers contained herein are preliminary and may be subject to change or amendment without notice. Certain statements made herein may contain information or statements about expected future events and financial and operating results of Octéa Limited and/or any of its subsidiaries (herein: “Octéa” or the “Octéa Group”), that are forward‐looking and subject to risks and uncertainties, and have not been reviewed by the auditors of Octéa or of any company within the Octéa Group. Accordingly, Octéa’s actual results, performance, or achievements could differ materially from those expressed or implied by such statements and such statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations. No undue reliance shall be placed on such forward looking statements. Factors that could cause actual results to differ materially may include items discussed in this document, but could also include other factors such as general business and economic conditions, competition, technological change, taxation, political risk and other risk factors that are identified from time to time. Furthermore, historical results stated herein may not be indicative of the Group’s or any of its member’s future performance. The Octéa Group disclaims any intention or obligation to update or revise any forward‐looking statements, whether as a result of new information, future events or otherwise.
Contents 1. Objective 2. Overview - Octéa Ltd 3. Koidu Ltd – Operating mine 4. Tonguma Ltd – Secondary growth 5. Boroma Ltd – Tertiary growth 6. Investment Opportunity 7. Summary
Objective To present an overview of Octéa Limited’s larger business, with an aim of attracting an appropriate equity partner in Octéa Mining Limited, who will enable the Company to maximize value in its late/mid stage exploration assets: Tonguma Limited and Boroma Limited , with a view to advancing development towards production in the near term .
The Company Purchase of the business at the Octéa Limited level, giving the investor exposure to the current operating company of Koidu 100% Limited (in addition to the “blue sky upside” of the late stage and early stage exploration projects of Tonguma Limited and Boroma Limited), in addition to the supporting marketing and administrative services. 100% 100% 100% 100% Marketing Company C.S.R. Initiatives 100% 100% 100% 100% Expatriate Management Mining Lease Mining Lease Exploration Licence Producing Mine Pre-feasibility Evaluation (extension of Koidu production)
Mineral Properties Koidu Diamond Mine - Operating mine since 2004 - Mining lease valid until July 2030 4.9 km 2 lease area - - Contains 2 kimberlite pipes, 4 kimberlite dyke zones and 3 blows – all high grade, high diamond value Tonguma Koidu & Boroma - Pre-feasibility study in progress FREETOWN - Mining Lease valid until 2036 142 km 2 lease area - - Contains at least 4 kimberlite dyke zones, each with multiple, high grade but narrow, dyke units Tonguma Boroma - Exploration Licence valid for 4 years until July 2016 (with conversion to mining licence) 67.1 km 2 licence area - - Contains one kimberlite pipe and numerous dyke zones of combined strike length of at least 25 km
Regional Geology - The Koidu and Tongo kimberlite clusters of pipes and dyke zones are part of a Jurassic age province of kimberlites within the Man Craton - Location of kimberlites is structurally controlled - Age of Kimberlites: ± 145 – 140 Ma
Koidu & Boroma - Koidu dykes extend into Boroma - Additional 4 dyke zones Boroma north of Koidu Koidu
Location Koidu Resettlement Village Perimeter wall Entrance, clinic 50 tph plant Stores & change house K2 Workshop Slimes dam 180 tph plant K1 Camp
Workforce Permanent employees: 950 Casuals: apx. 100 89 % Sierra Leonean 66% from neighbouring communities Over half (59%) of management positions at Koidu are filled by Sierra Leoneans Average monthly salary of US$180 which is 473% in excess of the national minimum wage in Sierra Leone of US$38 (SLL150,000) per month 45 permanent female employees, accounting for 5% of our national permanent workforce.
Mineral Resource DZD-1 DZC N DZB-East DZA Blow A Blow B1 Blow B3 Blow B2 K2 K1 1 km DZB-West View looking north
Koidu Limited – K1 Resource Statement K1 internal geology K1 Pipe shell K1 - Resource Statement (as at December 31, 2013) Bulk Volume Density Tonnage Carats Grade Revenue Value Body Domain (Mm3) (t/m3) (Mt) (Mct) (cpt) ($/ct) ($/t) Indicated Resource K1-IND 0.067 2.72 0.183 0.123 0.67 350 234 K1 TK-IND 0.255 2.56 0.654 0.438 0.67 350 234 Total K1 Indicated 0.323 2.593 0.837 0.561 0.67 350 234 Kimb1 Kimb3 Kimb2 Inferred Resource K1-IND 0.731 2.720 1.987 1.331 0.67 350 235 K1 TK-IND 0.615 2.560 1.573 1.054 0.67 350 234 K1 Resources - Carats (millions) Total K1 Inferred 1.345 2.647 3.561 2.386 0.67 350 235 0.928 Indicated Blow A 0.005 2.50 0.013 0.007 0.53 350 186 K1 Blows Inferred Blow B 0.117 2.63 0.308 0.111 0.36 350 126 2.386 Total Blows 0.122 5.130 0.321 0.118 0.37 350 128
Koidu Limited – K2 Resource Statement K2 Geological Model K2 Resources - Carats (millions) K2 Resource Statement (as at December 31, 2013) Indicated 0.894 K1Bb 0.950 Bulk Inferred Volume Density Tonnage Carats Grade Revenue Value Body Domain K1-UHG (Mm3) (t/m3) (Mt) (Mct) (cpt) ($/ct) ($/t) Geological Potential K1-MLG 0.515 Indicated Resource K1-UHG 0.000 2.45 0.001 0.000 0.48 270 130 K2 Indicated K2 Resources - Carats (millions) K1-MLG 0.233 2.41 0.562 0.135 0.24 270 65 K1-LMG K1-LMG 0.585 2.43 1.423 0.484 0.34 270 92 0.515 Indicated K1Bgm 84 Total K1 Indicated 0.819 2.42 1.985 0.619 0.31 270 Inferred Inferred Resource 0.950 K2 MZ-U 0.337 2.43 0.819 0.287 0.35 270 95 K1-GP K4-U 0.103 2.43 0.250 0.075 0.30 270 81 K1Bgm 0.060 2.31 0.140 0.021 0.15 270 40 Geological Potential Total K1 Inferred 0.501 2.42 1.209 0.383 0.32 270 85
Koidu Limited – Dykes and Blows Resource Statement Dykes and Blows Resource Statement (December 31, 2013) Bulk Volume Density Tonnage Carats Grade Revenue Value Body Domain (Mm3) (t/m3) (Mt) (Mct) (cpt) ($/ct) ($/t) K1 Blow B3 0.015 2.64 0.040 0.030 0.76 350 266 Dykes DZA-1 0.316 2.92 0.924 0.597 0.54 270 189 DZA-2 0.088 2.92 0.256 0.083 0.54 270 189 DZB-W 0.553 2.79 1.543 0.860 0.55 350 193 DZB-E 0.525 2.79 1.465 0.780 0.55 350 193 Total Inferred 2.350 DZD-1 DZC DZB-East N DZA Blow A Blow B1 Blow B3 Blow B2 K2 Dykes and Blows K1 Geological Model 1 km DZB-West View looking north
Production Metrics Diamond Sales 2007 - 2013 - Carats and Average Value per Carat 400,000 500 450 350,000 400 300,000 350 250,000 300 US$/ct Carats 200,000 250 200 150,000 All K1 Mixed K1 and All K2 150 material K2 material material 100,000 100 50,000 50 - - 2007 2008 2009 2010 2011 2012 2013 Carats Average Value per Carat (US$)
Production Metrics Diamond Sales 2007 - 2013 - Carats and Average Value per Carat 60,000 350.00 300.00 50 tph plant 180 tph plant 50,000 250.00 40,000 200.00 US$/ct Carats 30,000 150.00 20,000 100.00 10,000 50.00 - - Jan 12 Feb 12 Mar 12 Apr 12 May 12 Jun 12 Jul 12 Aug 12 Oct 12 Nov 12 Dec 12 Jan 13 Feb 13 Mar 13 May 13 Jun 13 Jul 13 Aug 13 Sep 13 Nov 13 Dec 13 Jan 14 Carats Average Value per Carat (US$)
Processing Plant Configuration 180 tph processing plant - 100,000 tpm, 1.2 Mt per annum processing capacity - 60,000 carats per month - Designed processing cost - $10/t - 2013 Actual - $12.35/t - 2014 Budget - $12/t
Mining Configuration 1.8 Mt per month designed / installed mining capacity – November 2013 – 1.705 Mt - 28 Volvo A40 ADTs - 11 Volvo EC700 excavators - 13 Sandvik DP1500 drill rigs - 3 CAT D9 bulldozers
Mining Configuration Mining targets - 2014 - Drilling: 50,000 - 75,000 m per month 400,000 - 550,000 m 3 per month - Blasting: - Loading & Hauling: 1.5 – 2.0 Mt per month, 50,000 – 68,000 tpd - Note: metres and tonnages dependent on where operations are located in the pit
Infrastructure and Support Services Associated Infrastructure - Workshop (mining fleet – 56 units) - Mess & change house - Slimes and return water dam - Training facility - Tailings dumps - Main stores - Water processing plant - Fuel depot (550,000L) - Power plant (10 MW) - Emulsion factory and store (1,000 tonnes of - Expatriate accommodation explosives per month) - Security control rooms
Open Pit Operations K1 K2 Cut 1 (220L) – Completed Dykes and Cut 2 (160L) – Completed (Jan Blows: 2014), ore 760,000t, waste 11.5 2.350M carats Mt Cut 1 (260L ) – Completed Cut 3 (100L) – From Jan 2014 to K1 Total Cut 2 (200L) – Completed (Dec 2013), Dec 2015, ore 1 Mt, waste 19 Mt ore 713,000t waste 3 Mt 2.9Mt ore K2 Total 39 Mt waste Cut 4 (40L) – From Sep 2015 to 1.3 Mt ore Cut 3 (140L ) – Currently being studied: From Dec 2016), ore 1.1 Mt, waste 3.065M carats 14 Mt waste 20 Mt Dec 2013 to Jun 2016, ore 590,000t, waste 11 1.002M carats Mt
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