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Disclaimer
This presentation has been prepared by King Island Scheelite Limited (“KIS”) as a summary of its King Island Scheelite Project. It is for general information purposes only.
This presentation is not and should not be considered as an offer or invitation to subscribe for or purchase any securities in KIS, or as an inducement to make an offer or invitation with respect to those securities. No agreement to subscribe for securities in KIS will be entered into on the basis of this presentation.
This presentation contains certain forward‐looking statements which have not been based solely on historical facts but, rather, on KIS’s current expectations about future events and on a number of assumptions which are subject to significant uncertainties and contingencies many of which are outside the control of KIS and its directors, officers and advisers.
D d tt ti h b t k i th ti f thi t ti H thDue care and attention has been taken in the preparation of this presentation. However, the information contained in this presentation (other than as specifically stated) has not been independently verified for KIS or its directors and officers, nor has it been audited. Accordingly, KIS does not warrant or represent that the information contained in this presentation is accurate or complete. To the fullest extent permitted by law, no liability, however arising, will be accepted by KIS or its directors, officers or advisers, for the fairness, accuracy or completeness of the information contained in this presentation.
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Corporate Overview
ASX code KIS
Market capitalisation $10 million
Key Shareholders %
Shares on issue 62,373,758
Key Shareholders %
Morritt 21.7
Gibson 9.8
Chadwick 8.0
Hunan Nonferrous Metals (HNC) 7.1
Glen Rural 6.4
Chrysalis Investments 5.1
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Board & Management
Board: Tony Haggarty Non‐exec ChairmanZeng Shao Xiong Non‐exec DirectorAndy Plummer Non exec DirectorAndy Plummer Non‐exec DirectorRobin Morritt Non‐exec DirectorJeff Fan (Alternate for Zeng Shao Xiong)
Management: Simon Bird Chief Executive OfficerIan Morgan Company SecretarySue Jolliffe Project AccountantTim Callaghan Consultant GeologistTim Callaghan Consultant GeologistAlan Fudge Consultant Mining Engineer
(former King Island mine manager)Neville Wiggs/ Rob Hill Mining consultants
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Strategy & Financials
Clear strategic focus
1) Develop tungsten mine on King Island (Dolphin)
2) Explore in highly prospective NW Tasmania (Balfour)
3) Source opportunities to expand tungsten production
Sound financial management
H l h b l h $2 30 illi i hHealthy balance sheet $2.30 million in cash reserves
Slow burn rate $0.90 million per annum
Project funded (Dolphin) $63.25m HNC loan facility for KIS share
Focus on IRR and NPV Project returns to exceed WACC
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About TungstenExtraordinary properties of this strategic metal• highest melting point & lowest vapour pressure of all metals
• highest tensile strength at high temperatures
• tungsten carbide products are the hardest of all metals
• is among the heaviest of all metals
• has a brilliant sheen, is scratch and corrosion resistant and conducts electricity well
Applications for tungsten• cemented carbides to harden drills & machining tools
• military, aviation, electronic industriesmilitary, aviation, electronic industries
• lighting, laser & electrical applications
Source of this rare metali i l d d b d d i i f k t d it• ore is mainly produced by underground mining of skarn type deposits
• primary source is Wolframite or Scheelite concentrates comprising 63% of supply
• secondary source provides the remaining 37% from recycled scrap
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About Tungsten Pictures
Above: Worldwide largest gas turbine ready to be transported to Irsching,Bavaria; the combined gas/stream power plant has output of 340MW; theturbine blades contain up to 10% tungsten. (Courtesy of Siemens AG,p g y fGermany).
Right: Most cemented carbide inserts or drills are coated for improvedproductivity (Courtesy of Mitsubishi Materials Cooperation & Hitachi Toolengineering Ltd).
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About Tungsten
Supply• primary tungsten supply in 2009 was estimated at 61,500t
• more than 80% came from China but concentrate exports remain restricted• more than 80% came from China, but concentrate exports remain restricted
• supply issues outside China continue
• USA and Russian stockpiles are being depleted
Demand• >60% of consumption relates to cemented carbides
• global consumption is driven by the level of industrial output
• approximately 30% of world demand is from outside China
Impact on price• growing demand and supply restrictions have impacted prices in recent years
• prices have increased 40% in last twelve months
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About Tungsten Supply Chart
Chart provided from the International Tungsten Industry Association (ITIA)
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About Tungsten Prices
Increased >40% in last 12 monthsWas US$50 when former mine closed in 1990
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Our Projects
Dolphin• The King Island redevelopment is being carried out through the Dolphin Joint
Venture (DJV), a joint venture between King Island Scheelite (KIS) and HunanVenture (DJV), a joint venture between King Island Scheelite (KIS) and Hunan Nonferrous Metals Corporation Limited (HNC).
• This resource comprising Dolphin and Bold Head deposits of 11,413,000 tonnes contains 101,300 tonnes of WO3. The proposed redevelopment involves reopening the former underground mine at Dolphin and constructing a processingreopening the former underground mine at Dolphin and constructing a processing facility to produce approximately 3,300 tonnes of WO3 concentrate per annum.
BalfourBalfour• Exploring an area of historic mineralisation in NW Tasmania through a joint
venture with Pleiades Resources Pty Ltd.
• The Balfour Joint Venture (BJV) has conducted ground based gravity surveys with ( ) g g y yencouraging results in 2009. The two drilling programmes conducted so far have recorded tin‐tungsten intercepts at Specimen Hill and copper‐gold intercepts at Roaring 41S.
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DolphinKIS 50% interest & manager ‐ EL 19/2001 EL 16/2002 RL 2/1998KIS 50% interest & manager ‐ EL 19/2001, EL 16/2002, RL 2/1998
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Dolphin – Location
CurrieVictoria
Dolphin Project
King IslandGrassy
King Island
Tasmania
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Dolphin – Former Mine
Former mine operated as an open pit until 1975, then as an underground operation up to 1990.p
Gravity and flotation processes produced high grade WO3 concentrates.
Closed due to low tungsten prices.
The mine created significant employment, a new harbour and enjoyed strong local support.pp
Site has since been fully rehabilitated.
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Dolphin – Tenements
Lease / license Renewal date
Retention licenseRL 2/1998
18 Dec 2010
Exploration licenseEL 19/2001
14 Dec 2010
Exploration licenseEL 16/2002
09 May 2011
Mining licenseMLA 1 M/2006
31 May 2011
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Dolphin – Resource & Reserve
Dolphin Tonnes WO₃ % Tonnes WO₃ %
Resource # At 0.25% WO₃ Cut Off At 0.70% WO₃ Cut Off
Indicated 8.42 Mt 0.95% 4.75Mt 1.29%
Inferred 0.52 Mt 0.50% 0.01Mt 0.73%
8.94 Mt 0.92% 4.76Mt 1.29%
Reserve # At 0.70% WO₃ Cut Off
Probable 1.63Mt 1.30%
# Reported according to The JORC Code 2004
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Dolphin – Resource & Reserve
Former open pit to ‐80m RL and remaining ore body to ‐300m RL
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Dolphin – Resource & Reserve
Over 600 drill holes overlayed on former underground workings to ‐295m RL
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Dolphin – Development Plan
Feasibility Study – subject to approval• Complete detailed design and costings.
• Updated current approvals• Updated current approvals.
Mine300 000 1 30% WO ill i l ifi d ili f h d li fill• 300,000 tpa at 1.30% WO₃, post‐pillar stoping, classified tailing for hydraulic fill.
• Dewater mine and rehabilitate decline.
• Engage contractor to operate underground mine.
Mill• Construct plant and associated infrastructure.
• 91% recovery with whole‐ore‐flotation.
• 3,300t of WO₃ concentrate produced pa.
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Dolphin – Development Plan
Project economics from scoping study
Tungsten price (65% concentrate) US$190mtu (current price $200)
Revenue $460 million
Peak capital outlay $93 million
NPV9 $40 million
Timeframe
NPV9 $40 million
IRR 22%
Timeframe
Complete detailed design, tailings classification, amend current approvals.
6‐9 months once funding approved
Procurement and construction 18 24 monthsProcurement and construction 18‐24 months
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Dolphin – Future Potential
Confirm additional high‐grade ore at Dolphin
• Limited drilling beyond former workings despite improved grades at depth.
• Geological mapping indicates significant additional high grade tonnes (1‐2Mt).
• Demonstrate down‐plunge extension with development drilling.
Reopen Bold Head mine
• Former underground site approximately 2km north of Dolphin.
• No issues expected regarding access and approvals.p g g pp
• High grade JORC compliant resource and reserve confirmed (see next slide)
E i f thi f t t ti lEconomics of this future potential
• Minimum investment to process these extra sources of ore.
• Added value from these initiatives are not in the current financial model.For
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Dolphin – Future Potential
Bold Head Tonnes WO₃ % Tonnes WO₃ %
Resource # At 0.25% WO₃ Cut Off At 0.50% WO₃ Cut Off
Indicated 2.30 Mt 0.73% 1.50 Mt 0.93%
Inferred 0.17 Mt 1.13% 0.15 Mt 1.22%
2.47 Mt 0.76% 1.65 Mt 0.96%
Reserve # At 0.70% WO₃ Cut Off
Probable 0.61 Mt 0.76%
# Reported according to The JORC Code 2004
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BalfourKIS 70% interest & manager ‐ EL 27/2007 EL 40/2007KIS 70% interest & manager EL 27/2007, EL 40/2007
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Balfour – Location
Victoria
King Island
Balfour Project
King Island
Tasmania
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Balfour – Tenements
Lease / license Renewal date
Exploration licenceEL 27/2007
18 Oct 2012
Exploration licenceEL 40/2007
18 Oct 2012
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Balfour
• Area of historic mineralisation
• Tin, Tungsten at Specimen Hill
• Copper, Gold at Roaring 41S
• Further drilling to be undertaken
• Target is a Tennant Creek style Magnetite Copper Gold deposit
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Balfour ‐ Exploration
BackgroundWith encouraging results from a detailed ground based gravity survey of the area and subsequent geophysical analysis , a drilling programme was undertaken at Specimen Hillsubsequent geophysical analysis , a drilling programme was undertaken at Specimen Hill and Roaring 41S.
Target Programme Status
Tin‐tungsten intersectedSpecimen Hill 4 holes drilled in late 2009
Tin‐tungsten intersectedResults released in Dec 2009
Obtained approvals to drill adjacent prospect at Roaring 41S in May 2010
Roaring 41S 2 holes drilled in mid 2010Copper‐gold intersectedResults released July 2010
What next?Complete down‐hole magnetic survey to determine targets for next drilling phase atComplete down‐hole magnetic survey to determine targets for next drilling phase at Roaring 41S.
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Outlook
To date Going forward
Development • outstanding resource • commence detailed designp(Dolphin)
g• strong partner• funding in place• capable team assembled• preferred mining option agreed
g• confirm additional resource• dewater mine and rehabilitate decline• establish mill and infrastructure
Exploration(Balfour) • Drilled Specimen Hill prospect
Sn and WO₃ intercepted• Drilled Roaring 41S prospect
No further work at this stage
Complete down‐hole magnetic surveyDrilled Roaring 41S prospectCu and Au intercepted
Complete down hole magnetic surveyUtilise results to finalise targets for next drilling phase
Growth(Corporate
• Assess potential to combine with other tungsten projects
Progress specifically identified opportunities( p
opportunities)g p j pp
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KING ISLAND SCHEELITE LIMITEDKING ISLAND SCHEELITE LIMITED
Simon BirdChief Executive Officer
Level 1, 101 Sussex Street,Sydney NSW 2000
Phone: (02) 8622 1400Fax: (02) 8622 1401
Email: [email protected]
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