Strike Resources Limited 2012 Annual General Meeting ASX CODE: SRK November 2012
Disclaimer This material contains certain forecasts and forward-looking information, including regarding possible or assumed future performance, costs, production levels or rates, prices, reserves and resources or potential growth of Strike Resources, industry growth or other trend projections. Such forecasts and information are not a guarantee of future performance and involve unknown risks and uncertainties, as well as other factors, many of which are beyond the control of Strike Resources. Actual results and developments may differ materially from those expressed or implied by these forward-looking statements depending on a variety of factors. Nothing in this material should be construed as either an offer to sell or a solicitation of an offer to buy or sell securities. 2
Meeting overview Chairman: Malcolm Richmond Managing Director: Ken Hellsten Directors: William Johnson Matthew Hammond Samantha Tough Company Secretary: Stephen Gethin Chief Financial Officer: Julian Tambyrajah Notice of AGM: 22 October 2012 Proxies Received: : 63 - representing 43,609,120 shares 3
Agenda Chairman’s Address Managing Director’s Presentation Questions for the Managing Director Financial and Directors’ Reports Questions for the Auditor Resolutions 1 – 5 Close 4
Chairman’s Address November 2012
Managing Director’s Presentation November 2012
Performance of Strike Resources relative to peers 0.5 Mindax 0.4 Cazaly Ferrowest Legacy Golden West Share price (A$) 0.3 FairStar Venus Metals Jupiter Royal Resources 0.2 SAFM Sherwin Iron Iron Road 0.1 Ferrum Crescent Strike Resources 0.0 Nov 11 Jan 12 Mar 12 May 12 Jul 12 Sep 12 Source Bloomberg (21/11/12) Notes Rebased to Strike’s share price as at 22/11/11 7
Strong foundations established 2011/12 Objectives Outcomes Board restructure completed with appointment of additional independent director BUSINESS “Lean and keen” technical and commercial #5 Establish sound business approach at AF team established in Lima by moving to stronger equity position and PARTNERS Achieved strong working relations with D&C in commercial funding #3 Strengthen Peru. Efforts continue in Indonesia arrangements or exit partner relations in Peru Established strong CR team with clear goals #6 Consolidate Strike/AF and mandate. Template community programs CORPORATE position as major iron ore #4 Re-establish #1 Strengthen established and acknowledged group in Apurimac and positive relations board and increase Cusco regions with communities Buy-out of minority partner and consolidation independent and authorities to directors triggered through “Shoot - out” process enable timely #7 Position for strategic approvals for investor entry into Cuervo deal completed and delivering results exploration and #2 Establish strong projects beyond operating team in Rothschild appointed. Peru (AF) 8
High quality Apurimac and Cusco Iron Ore • Apurimac Iron Ore AF Apurimac Opaban • 590 km 2 of concessions Project • 269 Mt @ 57.3% Fe at Opaban Cuervo • Pictures here. High-grade, coarse-grained, excellent metallurgy 1.132Mt @ 0.77% Cu • >500 Mt needed to support 15 – 20 Mtpa • Cusco Iron Ore • AF concessions and Cuervo partnership • Almost 400km 2 of AF and Cuervo concessions • AF: 104 Mt @ 33% Fe* and a 23 – 26 Mt potential AF Cusco iron ore mineralisation at 32 – 34% Fe** with Project 117Mt @ 1.15% Cu <50% of target area tested • Cuervo: 178 Mt @ 48% Fe + Bob 1 targets* Pictures here. • Similar ore style to Apurimac but lower grade and mass recovery and higher sulphur • >800 Mt needed to support 20 – 25 Mtpa * See the Appendix to this presentation for a breakdown of the total mineral resource into JORC categories per project and the JORC Code competent person statement. 9 **The potential quantity and grade of the target iron ore is conceptual in nature. There has been insufficient exploration to define an additional mineral Resource in relation to that target iron ore. It is uncertain whether further exploration will result in the determination of an additional Mineral Resource in relation to that target iron ore.
Excellent iron and Copper / gold potential • Apurimac Iron Ore Opaban Nth, Ferrum, • 590 km 2 of concessions Cristoforo Magnetic Target • Sillaccassa: two magnetic targets with ironstone Cuervo • Pictures here. Opaban North: 1 km magnetic target + Colcabamba ironstone 1.132Mt @ 0.77% Cu • Colcabamba: drilled Fe + magnetic anomalies Sillaccassa • Las Bambas (Xstrata), Numerous magnetic and imagery targets 1.13Bt @ 0.77%Cu • Cusco Iron Ore and Cu/Au • AF Cusco <50% target area tested at Cusco Project • Cuervo Bob1, Parco and Huillque Norte targets 117Mt @ 1.15% Cu Tintaya (Xstrata), • World class copper / gold province 117Mt @ 1.15%Cu Pictures here. • 16 m @ 1% Cu from 28 m and current gold mining but no testing to date • IP targets identified 10
Cuervo – Bob 1 drilling results 2 km of strike tested with results for central 800m • 100 – 200 m thick magnetite intersected on all sections • North-south orientation with moderate dips 45 – 60º to west • Open to north and Parco repetition highly prospective Pictures here. Drill Intercepts Hole 1: 133 m @ 49.6% Fe Hole 2: 182 m @ 39.6% Fe Hole 8: 185 m @ 47.5% Fe Hole 10: 117 m @ 57.4% Fe 117Mt @ 1.15% Cu Hole 3: 156 m @ 40.9% Fe Hole 5: 144 m @ 38.3% Fe Pictures here. Hole 11: 87 m @ 33.8% Fe • Coarse-grained magnetite • Elevated sulphur (2 – 3%) • Similar style to Orcopura Concession not held by Cuervo 11
Community approvals – challenging, but improving • Patience and trust building required, especially following previous AF “disappearance” • Andean community mistrust of outsiders and government authorities – feel abandoned • Southern Peru especially challenging due to Andahuaylas’ history as an activist centre • Expectations raised with Mr Humala’s election but indications of increased disillusionment and radicalism • Access agreements established – but not at Huinchos / Opaban as yet However: Doors open in cycles – Huinchos mid 2011 and again now with community accepting mining “Pilot” programs successful along with innovative Camposol visits and expertise Delivery of previous commitments well received and open dialogue underway with all campesinos Pictures here. 12
Apurimac Ferrum: SEPTEMBER 2012 status quo pathway JUNE 2012 JUNE 2011 2009 No D&C Top-up for AF D&C 32% D&C Top-up of AF SRK 2009 Settlement or IAC 68% After IAC Transaction Agreement IAC D&C D&C SRK 12% SRK 50% 50% 44% SRK 56% 44% D&C 44% D&C Top-up of US$30.8M to AF Dyer Coriat Family Strike Resources D&C SRK US$1.9m 50% 50% (D&C) * Strike funding of AF (>$30 M) recapitalised in Sept 2012 for additional 12% – 19% of AF 13
Apurimac Ferrum “Shoot - out” SRK gives Shoot- Process SRK prices bid out advice March 2012 May 2012 June 2012 August 2012 October 2012 D&C receives approx. US$3.2M SRK 100% Outcomes D&C pays SRK D&C SRK 44% D&C SRK 56% 50% 50% US $1.9m for 6% AF D&C 100% SRK receives * Strike to have 100% of AF or approx. $35.1M additional cash approx. US$35.1M 14
Shoot-out – current status and way forward D&C has defaulted • Counter offer of US$27 M plus loan repayment not honoured • Purchase of SRK AF shares for US$100 plus repayment of loans not honoured Pictures here. Strike Response • Default provision triggered and partners’ shares purchased for US$50 with loans (~US$3.2M) to be repaid within 3 years • Shares not transferred hence dispute notice delivered 117Mt @ 1.15% Cu Next Steps • 15 working day “good faith negotiations” period till 13 Pictures here. December • Commercial settlement or arbitration process triggered Legal Position • Independent advice supports SRK position 15
Beyond the Shoot-out – the way forward AF Projects are capital intensive and require significant patience SRK can fund in short term, but strong funding partner needed Pictures here. Resolve AF ownership – move to 100% ownership Commercial settlement or arbitrated resolution Progress CR and approvals at Opaban Recommence exploration including drilling 117Mt @ 1.15% Cu Monitor opportunities to further consolidate Pictures here. Rothschild managed international partner search Close out Berau settlement 16
Formal Business November 2012
Formal business Consider Financial Statements and Directors’ and Auditor’s Reports Resolutions: Pictures here. 1 Elect Samantha Tough as a Director 2 Re-Elect William Johnson as a Director 3 Approve Employee Long-Term Incentive Plan 4 Ratify Issue of Options to CFO 5 Adopt Remuneration Report 117Mt @ 1.15% Cu Pictures here. 18
Formal business Resolution 1 – Elect Samantha Tough as a Director Proxy Summary For Against Abstain Open Totals Pictures here. All Proxies 42,654,904 55,051 261,435 637,730 43,609,120 Chairman’s 22,387,213 55,051 261,435 602,730 23,306,429 Proxies 117Mt @ 1.15% Cu Pictures here. 19
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