PNG Chamber of Mines and Petroleum Conference December 2016 - PowerPoint PPT Presentation

PNG Chamber of Mines and Petroleum Conference December 2016

Disclaimer This presentation has been prepared by Highlands Pacific Limited (“Company”) . The material contained in this presentation is for information purposes only. This presentation is not an offer or invitation for subscription or purchase of, or a recommendation in relation to, securities in the Company and neither this presentation nor anything contained in it shall form the basis of any contract or commitment. This presentation is not financial product or investment advice. It does not take into account the investment objectives, financial situation and particular needs of any investor. Before making an investment in the Company, an investor or prospective investor should read this document in its entirety, consider whether such an investment is appropriate to their particular investment needs, objectives and financial circumstances, seek legal and taxation advice appropriate to their jurisdiction and consult a financial adviser if necessary. The Company is not licensed to provide financial product advice in respect of the Company’s securities. This presentation may contain forward-looking statements that are subject to risk factors associated with exploring for, developing, mining, processing and sale of commodities. Forward-looking statements include those containing such words as anticipate, estimates, forecasts, should, will, expects, plans or similar expressions. Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties, assumptions and other important factors, many of which are beyond the control of the Company. It is believed that the expectations reflected in these statements are reasonable but they may be affected by a range of variables and changes in underlying assumptions which could cause actual results or trends to differ materially. Nothing in this document is a promise or representation as to the future. Actual results may vary from the information in this presentation and any variation may be material. Past performance is not an indication of future performance. Statements or assumptions in this presentation as to future matters may prove to be incorrect and any differences may be material. The Company does not make any representation or warranty as to the accuracy of such statements or assumptions. Investors are cautioned not to place undue reliance on such statements. This presentation has been prepared by the Company based on information available to it and has not been independently verified. No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness or correctness of the information, opinions and conclusions contained in this presentation. To the maximum extent permitted by law, none of the Company or its subsidiaries or affiliates or the Directors, employees, agents, representatives or advisers of any such party, nor any other person accepts any liability for any loss arising from the use of this presentation or its contents or otherwise arising in connection with it, including without limitation, any liability arising from fault or negligence on the part of the Company or its subsidiaries or affiliates or the Directors, employees, agents, representatives or advisers of any such party. The Company estimates its reserves and resources in accordance with the Australian Code for Reporting of Identified Mineral Resources and Ore Reserves 2012 Edition (“JORC Code”), which governs such disclosures by companies listed on the Australian Securities Exchange. 2 Throughout the presentation all figures are quoted in US$ unless otherwise stated

Established player growing with PNG  World class copper, gold and nickel projects  RAMU nickel-cobalt mine - in production  FRIEDA RIVER copper-gold project - in for permitting  STAR MOUNTAINS copper-gold project - exploration drilling  SEWA BAY nickel laterite - exploration  +20 years operating history in PNG makes Highlands an ideal project partner  Past involvement in the Porgera Gold Mine, Kainantu Gold Mine and various exploration sites in PNG  Strong and dependable world class JV partners 3

World class mining company Capital Structure Shares on issue 928m Share price (Nov 2016) A$0.06 Market capitalisation A$55m Cash (Sept 2016) A$13.5m Major shareholders  Global commodities trader 15.9%  Chinese State-owned minerals producer based in 13.9% Guangzhou GRAM  JV partner at Frieda River  Long association with PNG PNGSDP 11.5% 4

RAMU

Ramu Nickel – PNG success story  Joint venture – Highlands 8.56%, MCC Ramu 85%, PNG Govt and landowners 6.44%  $2.1 billion capex  Annual production capacity 32,600t Ni, 3300t Co  Mine at Karumbukari. 135km slurry pipeline to Basamuk port  Construction 2008, commissioning 2012  Achieving full production rates 2016 6

Ramu – A PNG success story  Resource: 126 Mt @ 1.0% Ni and 0.1% Co  Reserve: 51 Mt @ 1.0% Ni and 0.1% Co  Resource/reserve potential to deliver mine life of +35 years  Mining: Open pit, free digging  Strip Ratio: Low at 0.28:1 7

Resuming full production rates Nickel Production (In Concentrate, tonnes) 32600 25582 ~8000 20987 22-23,000 11369 5383 2012 2013 2014 2015 2016 (f) 2017 (f) 8

Steadily ramping up to full production 2016 Monthly Nickel Production (In Concentrate, tonnes) Full production rate 2645 2638 2549 2700 2497 2345 2027 1140 951 Process plant production halted Jan Feb Mar April May Jun Jul Aug Sept Oct 9

Solid corporate citizen 10

Solid corporate citizen 11

Nickel price on the rise Nickel Price World Bank Nickel Price ($US/T) Forecast 25000 20000 USD Nominal 15000 USD Real 10000 5000 0 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 12

Nickel – multiple end uses drive demand Nickel Market Material Flow – 2015 Source: Nickel Institute USD Nominal 13

Nickel – multiple end uses drive demand Non-stainless uses of Nickel USD Nominal Source: Clive Whittington & Associates Ltd, INSG, CRU. Macquarie Research 14

FRIEDA RIVER

Frieda – located in northern PNG 16

Frieda - Multiple deposits and prospects Feasibility Study Focus  Feasibility based on HITEK Resource, excluding nearby Nena mineralisation  HITEK totals 2.7 billion tonnes of mineralisation  0.42% Cu and 0.23 g/t Au  Containing 12 million tonnes Cu and 19 million ozs Au. *See full resource statements included in appendix 17

Potentially attractive returns Processing rate 40 Mtpa (av). 700 Mt total  Joint venture. PanAust 80%, at 0.5% Cu and 0.29 g/t Au Highlands 20%. Av annual Cu production 175,000 tonnes  Project managed by PanAust Av annual Au production 250,000 ounces  PanAust Feasibility study released May 2016 C1 cash cost ** US$0.69/lb Cu  Multi-stage development approach. All In Sustaining Cost US$1.23/lb Cu  Large scale, open pit mining. Pre-production capex * US$3.6 billion  Conventional process plant Development and US$2.3 billion  Mining lease application sustaining capital over LOM submitted to MRA Mine Life Initial 17 years  EIS to be lodged this month (Dec 2016) *Excluding mining fleet and power plant **Brook Hunt convention for the reporting of direct cash costs comprising: mine site, product transportation and freight, treatment and refining charges and marketing costs; based on payable metal content. Assumes Cu price of US$3.30/lb, Au price of US$1455/oz, Ag price of US$23/oz.. Full details of the feasibility study are included in the ASX release entitled "Frieda Study Received", released on May 19, 2016. 18

STAR MOUNTAINS 16

Exciting JV with Anglo American Plc  $US10 million initial payment received  Phase 1 (51%): Anglo to spend US$25 million over four years and achieve a JORC inferred resource of 3 million tonnes contained Cu in five years  Phase 2 (80%): Anglo to complete and fund BFS  Anglo to provide Highlands up to $150 million in project funding as deferred free carry 20

Exploration over five decades  First explored by Kennecott in the early 1960s.  HIG conducted drilling campaigns in 2011 and 2012.  Highlands identified 17 copper gold targets and drilled 28 holes at six of these targets.  Intercepts included: • 596m @ 0.61% Cu & 0.85g/t Au from 24 m down hole, • 22m @ 1.42% Cu & 0.57 g/t Au from 146m down hole, • 68m @ 0.97% Cu & 0.37 g/t Au from 280m down hole. (For full details of exploration results, see ASX release entitled "Star Mountains Project Update" released on March 1, 2013) 21

Current drilling yielding good results  Initial JV drilling campaign completed December, 2015. Nine holes for 5387 metres.  Results included: Olgal: • 260 metres @ 0.31% copper and 0.19 g/t gold (Including 10.9 metres @ 0.60% copper and 0.34 g/t gold from 314m downhole) • 434.9 metres @ 0.52% copper and 0.72 g/t gold (Including 100 metres @ 0.82% copper and 1.39 g/t gold from 76m downhole) Kum Kom: • 30.6 metres @ 0.61% copper and 0.54 g/t gold Including 12.1 metres @ 0.94%copper and 0.72 g/t gold from 292.9m downhole • 13metres @ 1.3% copper and 0.53 g/t gold from 107m downhole • 30 metres @ 1.0% copper and 0.23 g/t gold from 515m downhole (For full details of exploration results, see ASX release entitled "Star Mountains Drilling Results" released on February 25, 2016.) 22