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Frank Terranova delivered the presentation at the 2014 Mining NSW Conference. Mining NSW Conference is the premier event focused on base metals exploration, building regional skill, and promoting economic development. For more information about the event, please visit: http://bit.ly/miningnsw14
Citation preview
ASX Code: SXG
Opening a new chapter at Mt Boppy
Opening an exciting new chapter at Mt Boppy
Page: 2
• This presentation has been prepared by Southern Cross Goldfields Limited (“SXG” or the “Company”). It should not be considered as an offer or invitation to subscribe for or purchase any securities in the Company or as an inducement to make an offer or invitation with respect to those securities. No agreement to subscribe for securities in the Company will be entered into on the basis of this presentation. "
• You should consider all the Company’s announcements and reports lodged with the ASX before making any investment decisions."
• This presentation contains forecasts and forward looking information. These are not a guarantee of future performance and involve unknown risks and uncertainties. Actual results and developments will almost certainly differ materially from those expressed or implied. SXG has not audited nor investigated the accuracy or completeness of the information, statements and opinions contained in this presentation. Accordingly, to the maximum extent permitted by applicable laws, SXG makes no representation and can give no assurance, guarantee or warranty, express or implied, as to, and take no responsibility and assume no liability for, the authenticity, validity, accuracy, suitability or completeness of, or any errors in or omission, from any information, statement or opinion contained in this presentation."
• You should not act or refrain from acting based on this presentation. This presentation does not purport to be all inclusive or to contain all information which its recipients may require in order to make an informed assessment of the Company’s prospects. You should conduct your own investigation and perform your own analysis in order to satisfy yourself as to the accuracy and completeness of the information, statements and opinions contained in this presentation before making any investment decision. "
Disclaimer
Page: 3
• Southern Cross has successful history with Mt Boppy and is commi:ed to the region
• Mt Boppy redevelopment plan brings significant benefits to central NSW
• Project is first step for reborn SXG, with new cornerstone investor, TrailStone Group, backing SXG management team.
• A$60M development funding package secured and A$6 million capital raise in progress.
• Poised to seize market opportuniMes, drive accelerated growth
Overview
Page: 4
Growing Australian resource development company
ASX code SXG
Shares on issue
887M
Last price A$0.01
Market cap A$8.8M
Top 20 shareholders
56%
% Board & management
~ 30%
Cash A$2M
• Formed in 1986 as private company, renamed Polymetals Mining, by current director David Sproule • Successfully developed numerous projects: Nimbus Silver, White Dam Gold, Hellyer Zinc, Mt Boppy Gold • Merged with Southern Cross Goldfields in 2012 • Two projects now primed for development
* Figures exclude current capital raising
Page: 5
Mt Boppy - generating cash within 12 months
• Historical production of 490 kozs
• Previously operated by Polymetals, producing 68,000 ounces from 2002 - 2005
• Production ceased due to low gold price. Plant put on care and maintenance
• Production to recommence in 2015
• Simple cutback to existing pit. Plant to be refurbished
• Production of 64 kozs over 2 years
Mt Boppy major work
Page: 6
East West Cross Section through Interpreted Mineralised Domains Plan view of expanded pit shell and site layout
Major economic spin-offs to be delivered
Page: 7
• Major economic spin-offs for the region:
- Development cost of ~A$26 million
- Cash operating costs of approximately A$35-40 million over two year project life
- Will employ up to 80 people at peak, on site in mining and processing roles
Potential exploration growth
Page: 8
Regional processing facility
Page: 9
Page: 10
Marda in WA – potential next project
Marda/Sandstone Gold Project – 100% Location 400km north east of Perth, WA
Marda Resource 495koz Au at 1.9 g/t, with significant exploration upside potential
Marda Reserve 175koz Au at 2.3 g/t
Production 167koz over initial four years Simple open cut operation with conventional CIL processing
Status Feasibility Study completed
Development Cost ~A$32M
Production Cost /oz
Cash cost ~ A$800/oz Total ~ A$1000/oz
Sandstone Assets 600ktpa CIL processing plant and 100 person camp to be relocated to Marda from Sandstone
Development time Commence development in 2016, first gold 2017. Capital redeployed from Mt Boppy
Page: 11
Base case gold production
25 28
10
46
46 52
23
2015 2016 2017 2018 2019 2020
Mt Boppy Marda
Projections based on STATED RESERVES ONLY. Further potential exists in Resource development and conversion
Kozs
Page: 12
• TrailStone Group -‐ a US$500 million fund, seeded by US$26 billion RiverStone Capital
• TrailStone to take up to A$2 million equity stake, plus warrants and will provide debt of A$60 million, including A$25 million gold loan.
• Provides shareholders with major leverage to growth
New cornerstone investor provides funding
Page: 13
• Access to capital will provide mulMple strategic opMons
• S&P/ASX Small Resources Index has fallen almost 70% since peak in Jan 2011
• Resource and Reserve valuaMon mulMples have fallen sharply over the past five years
• Excess capacity in mining services sector
• Outlook for commodity prices remains robust in medium term.
Poised to seize market opportunities
Page: 14
• SXG will assess projects where it can add value through quality project execuMon, certainty of funding.
• Focus on precious metals, base metals, specialty metals, ex bulks
• Preference to avoid high sovereign risk environments
• Preferred projects within 2-‐3 years of producMon, with established resource and reserve
• DiversificaMon important -‐ pipeline of projects at different stages: development, construcMon or producMon
Rigorous and disciplined investment focus
Page: 15
Be part of mid-market development leader
Valuation re-rating triggers: • Funding package secured
• Low risk transition to producer status within 1 year
• Strategic capability to seize market opportunities
• Shareholders leveraged to growth.
• Southern Cross has successful history with Mt Boppy and is commi:ed to the region
• Mt Boppy redevelopment plan brings significant benefits to central NSW
• Project is first step for reborn SXG, with new cornerstone investor, TrailStone Group, backing SXG management team.
• A$60M development funding package secured and A$6 million capital raise in progress.
• Poised to seize market opportuniMes, drive accelerated growth
Competent Person’s Statement
• The information in this presentation that relates to Mineral Resources at Canbelego is based on information compiled) by Mr Troy Lowien, SXG Senior Resource Geologist, who is a Member of the Australian Institute of Mining and Metallurgy (AIMM) and is a fulltime employee of SXG.
• The information in this presentation that relates to Mt Boppy Ore Reserves is based on information compiled by Messrs Sean Buxton and Andrew Lawry, who are Members of AIMM. Both former employees, Mr Buxton was Polymetals Mining Limited (Polymetals) General Manager and Mr Lawry is former Polymetals COO.
• Messrs Lowien, Buxton and Lawry, have sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activities which they undertook to qualify as a Competent Persons as defined in the 2004 Edition of the “Australasian Code for reporting of Exploration Results, Mineral Resources and Ore Reserves” (the JORC Code). Messrs Lowien, Buxton and Lawry and consent to the inclusion of matters based on their information in the form and context in which it appears in this announcement.
• Information in this presentation relating to Mineral Resources and Exploration results in the Marda Project has been compiled by Richard Simmons, Exploration Manager, SXG who has sufficient experience which is relevant to the type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’ . Mr Simmons is a Member of the AIMM and has consented in writing to the inclusion of this data. Mr Simmons has reviewed and approved the information contained in this report and has consented to the inclusion in this report of the matters compiled by him in the form and context in which they appear.
• The information in this presentation that relates to Ore Reserves at Marda is based on information compiled by Mr Denis Grubic, who is a Member of AIMM. Mr Grubic is an independent consultant employed by Rock Team Pty Ltd.
• Mr Grubic has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’.
• The information is extracted from the announcement entitled “SXG set to open up new WA gold province with Marda Gold Development” created on 10th May 2012 and is available to view on www.scross.com.au. The company confirms that it is not aware of any new information or data that materially affects the information included in the original market announcement and, in the case of estimates of Mineral Resources or Ore Reserves, that all material assumptions and technical parameters underpinning the estimates in the relevant market announcement continue to apply and have not materially changed. The company confirms that the form and context in which the Competent Person’s findings are presented have not been materially modified from the original market announcement.
• Information in this presentation relating to Mineral Resources in the Sandstone Project has been compiled by David Otterman of D.W. Otterman Exploration Consultant who is an independent consultant and has sufficient experience which is relevant to the type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’.
• Mr Otterman is a Fellow of the AIMM, Chartered Professional (Geology), and has consented in writing to the inclusion of this data. Mr Otterman has consented to the inclusion in this presentation of the matters compiled by him in the form and context in which they appear.
Page: 16
Has Southern Cross Goldfields Ltd
ASX:SXG www.scross.com.au
Brisbane Office Lvl 6, 344 Queen St Brisbane, QLD 4000
Ph: +617 3221 6022
Perth Office Lvl 1, 672 Murray St West Perth, WA 6005
Ph: +618 9215 7600