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Perilya Limited – Investor Update
26 November 2009
Disclaimer and Important Notice
This presentation contains forward looking statements that are subject to risk factors associated with an underground mining
business.
Where the company expresses or implies an expectation or belief as to future events or results, such expectation or belief is
expressed in good faith and believed to have a reasonable basis. However, forward looking statements are subject to risks,
uncertainties and other factors, which could cause actual results to differ materially from future results expressed, projected or
implied by such forward looking statements. Such risks include, but are not limited to metals price volatility, currency fluctuations,
production performance, increased production costs and variances in ore grade or recovery rates from those assumed in mining
plans, project delay or advancement, environmental risks, approvals and cost estimates, as well as political and operational risks
in the countries and states in which we sell product to, shipping risks and governmental regulation and judicial outcomes.
The company does not undertake any obligation to release publicly any revisions to any forward looking statement to reflect
events or circumstances after the date of this presentation, or to reflect the occurrence of unanticipated events, except as may be
required under applicable securities laws.
All references to dollars, cents or $ in this presentation are to Australian currency, unless otherwise stated. References to
“Perilya” or “company” references to Perilya Limited (ABN 85 009 193 695) or its applicable subsidiaries.
1
Competent Persons Statement
The information contained in this report relating to the Ore Resource at Mt Oxide is based on information compiled by Mr Martin Jones who is a full-time employee of
Perilya and is a member of the Australasian Institute of Mining and Metallurgy. Mr Jones 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’. Mr Jones consents to the inclusion in the report of the matters based on the information in the
form and context in which it appears.
The information in this report that relates to Ore Reserves for Southern Operations is based on information compiled by Mr Noel Carroll who was at the time of compiling
the report a full-time employee of Perilya and is a member of the Australian Institute of Geoscientists. Mr Carroll 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’. Mr Carroll consents to the inclusion in the report of the matters based on
the information in the form and context in which it appears.
The information contained in this report relating to the Mineral Resources for Broken Hill comprises:
• Mineral Resource estimates for the Southern Operations, Southern Extensions (reported sub-set) and Potosi and is based on information compiled by Mr Noel
Carroll who is a full-time employee of Perilya and is a member of the Australian Institute of Geoscientists. Mr Carroll 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’. Mr Carroll consents to the inclusion in the report
of the matters based on the information in the form and context in which it appears.
• Mineral Resources for Silver Peak, Central Blocks, Flying Doctor, Pinnacles (1130 and Henry George deposits) and North Mine Uppers and is based on information
compiled by Mr David Price. Mr Price who was a full-time employee of Perilya, is now a full-time employee of Runge Limited, and is a member of the Australasian
Institute of Mining and Metallurgy. Mr Price 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’. Mr Price consents to the inclusion in the report of the matters based on the information in the form and context in which it
appears.
• Mineral Resources for the North Mine Deeps and is based on information compiled by Mr Jared Broome who was at the time of compiling the report a full-time
employee of Perilya and is now employed by Minerals And Metals Group Limited and is a member of the Australasian Institute of Mining and Metallurgy. Mr Broome
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’. Mr
Broome consents to the inclusion in the report of the matters based on the information in the form and context in which it appears.
2
Perilya
Positioning our zinc, lead and copper assets for the future
Broken Hill Flinders Mount Oxide
3
Perilya - General
Experienced Operators
– Long history of mining in Broken Hill
– Significant re-sizing in Sept 08 due to falling metal prices and onset of GFC
Quality Assets
– Broken Hill - a solid foundation with 2.8Mtpa concentrator. LOM plan 10+ years
based on reserves (as released on 12th November)
– Mount Oxide - potential low cost copper project
– Flinders – optionality – cashflow positive
– Holding low cost add-ons that can be fast tracked into production
Strong Major Shareholder (50.1%) that is delivering
– Balance Sheet strength
– Industry experience in mining, processing, smelting and marketing
– Potential for future off-take agreements
– Opportunities for synergies
4
Safety Performance
700
600 Safety Lead Indicators
Key Highlights 500
400
– Longest recorded period without lost 300
time injury
200
100
0
– Lost time injury frequency rate well
8
09
09
09
9
8
9
9
9
9
9
9
-0
-0
-0
-0
-0
l-0
-0
-0
-0
n-
n-
b-
ov
ec
ar
ug
ep
ay
pr
ct
Ju
Ja
Ju
Fe
M
O
A
N
M
D
A
S
below the industry average Safety Meetings Safety Interactions
Task Observations Inspections
Hazards & Near Miss Reports
– All injury frequency rate the lowest in
All Injury
Perilya’s history at Broken Hill
Number of Frequency Rates
Incidents Incidents and Frequency
6 Rate 105
95
– Operating at our highest level of
5 85
75
4 65
positive safety indicators 3
55
45
2 35
25
1 15
5
0 -5
9
09
09
09
09
9
9
9
08
8
09
09
t-0
c-0
r-0
-0
l -0
n-
n-
v-
g-
p-
b-
ar-
ay
Oc
Ju
Ap
No
De
Ja
Ju
Fe
Au
Se
M
M
All Injuries All Inj. FR
5
N
ov
0
50
100
150
200
250
300
350
400
450
D -07 N
ov
0
20
40
60
80
100
120
140
160
(t)
ec
D -07
(A$)
J a -07 ec
n J a -07
Fe -0 8 n
b- Fe -0 8
M 08 b-
ar
M 08
Ap -08 a
r Ap r-08
M -08 r
ay M -08
J u -08 ay
n- J u -08
Ju 0 8 n-
Au l-0 Ju 0 8
g 8 Au l-0
Se -08 g 8
Actual
p Se -08
O -08
ct p
Actual
N -08 O -08
ov ct
D -08 N -08
ec ov
D -08
J a -08 ec
n J a -08
Fe -0 9
b- n
Fe -0 9
M 09
a b-
M 09
Cost / Tonne Ore Milled
Ap r-09 ar
r Ap -09
M -09 r
Linear (Actual)
Tonnes Hoisted per Employee
ay M -09
J u -09 ay
n- J u -09
Ju 0 9 n-
Au l-09 Ju 0 9
Linear (Actual)
g Au l-0
Se -09 g 9
p Se -09
O -09 p
ct O -09
-0
9 ct
-0
9
outage
Ja
n
9 day power
0
100
200
300
400
500
600
700
800
N
ov
0
500
1,000
1,500
2,000
2,500
3,000
Fe -0 8
b D -07
(A$)
M -08 ec
ar J a -07
Ap -08 n
r- Fe -0 8
M 08 b-
M 08
ay a
J u -08 Ap r-08
n-
0 r
Ju 8 M -08
ay
Au 8 l-0
J u -08
g n-
Se -08 Ju 0 8
p Au l-0
O -08 g 8
Actual
Actual
ct
N -08 Se -08
ov p
O -08
D -08 ct
ec N -08
J a -08 ov
n D -08
ec
Fe -0 9
b- J a -08
M 09 n
ar Fe -0 9
Ap -09 b-
Cost / t Payable Metal
M 09
r ar
M -09 Ap -09
ay
r
J u -09 M -09
n- ay
0
2 per. Mov. Avg. (Actual)
Employee Manpower Trend 2008 - 09
Ju 9 J u -09
n-
Au l-09 Ju 0 9
g
Linear (Actual)
Au l-0
Se -09
p g 9
Se -09
O -09 p
ct
-0 O -09
9 ct
-0
9
Operating Performance
6
Quarterly Performance – Overview
H1 H2 Sept Qtr
Highlights Dec 08 Jun 09 2010
PRODUCTION STATISTICS
Production of 28,900tns combined Zn+Pb Ore
Total Ore Mined (kt) 788.9 737.6 349.7
Quarterly costs of US$0.38/lb zinc remain Total Ore Treated (kt) 839.1 750.9 345.0
under target of US$0.50 – US$0.55/lb, Zinc
despite 9 days lost production due to Grade (%) 5.3 5.4 5.4
Concentrate (kt) 81.5 72.8 33.9
regional power outage (lost production Contained Zinc (kt) 40.1 35.2 16.4
estimated 4kt of combined metal) Payable Zinc (kt) 33.6 29.4 13.7
Lead
Free cash increased from $36.9 million to Grade (%) 3.0 4.4 4.2
$46.2 million (after payment of $7 million Concentrate (kt) 28.7 40.2 17.9
Contained Lead (kt) 20.4 27.7 12.5
being the net payment for the silver buy- Payable Lead (kt) 19.4 26.4 11.8
back). Positive cashflow of $16.3 million Silver
net of one-off silver buy-back payment Grade (g/t) 30.7 49.5 53.8
Contained Silver (Moz) 0.607 0.908 0.419
Broken Hill cash & earnings positive in CASH COST & OPERATING MARGIN (US$/lb zinc)
current environment Average Price Received 0.73 0.57 0.82
Silver sale termination completed during Direct Cash Costs 1.11 0.85 1.01
(*)
By-product credits (0.25) (0.51) (0.90)
quarter Zinc treatment charges 0.22 0.24 0.27
Net Cash Cost 1.08 0.58 0.38
Cash Operating Margin (0.35) (0.01) 0.44
(*)
Silver and Lead production net of treatment charges, freight, handling and realised lead/silver hedging gains and losses
7
Financial Performance – FY 2009
SUMMARY OF FINANCIAL AND OPERATING 2008‐09 Financial Year
PERFORMANCE
1 July – 31 Dec 1 Jan ‐ 30 June Financial Year 2007‐08 Financial
H1 H2 Total Year Total
Financial
Revenue ($Million) 113.0 98.5 211.5 273.1
Net (loss)/profit after tax ($Million) (77.2) 2.1 (75.1) (140.2)
Cash flow from operations ($Million) * (46.6) (12.9) (59.5) (9.9)
Total assets ($Million) 135.5 160.8 160.8 307.7
Shareholders equity ($Million) 39.6 83.7 83.7 147.6
* Before income from closure of hedge book which realised $60.3 million
Highlights
Significant turnaround in performance in the 2nd half of the year to post a $2.1 million profit.
A move to positive cashflow and earnings from Broken Hill and Beltana in the June quarter.
Significant improvements in productivities at Broken Hill, which moves the operation to a more
sustainable, lower cost profile.
Positive trend continues into the current financial year; enhanced even more with the buy-back
of the silver contract completed in July 2009.
8
Metal Prices (trends since Jul 08)
AUD Metal Prices ($/tn) (Zn + Pb) Since July 2008
2,600
2,400
2,200
2,000
A$/tonne
1,800
1,600
1,400
1,200
1,000
Jul-08
Aug-08
Sep-08
Nov-08
Dec-08
Jul-09
Aug-09
Sep-09
Nov-09
Apr-09
Feb-09
Mar-09
Jan-09
Jun-09
May-09
Oct-08
Oct-09
AUD Zn AUD Pb
Whilst USD metal prices have recovered quite well over the past 6 months (particularly lead), the
strong AUD has dampened this increase.
Lead and zinc prices are only 9 – 12% higher today than in September 2008, when the re-sizing at
Broken Hill occurred, testament to the impact that improved productivities and cost reductions are
having on the Company’s financial results.
9
Exploration and Development Pipeline
New reserve and resource announced for Broken Hill
Ore Reserves
• 12.9Mt @ 10.5% Zn/Pb (28% increase y-o-y)
Ore Reserves – Broken Hill
• >10 years with a long history of replacement
(based on US$0.77/lb Zn and US$0.82/lb Pb and Tonnes Zn Pb Ag Contained Contained Contained
AUD/USD rate of A$0.80) Classification ('000) % % g/t zinc (kt) lead (kt) Silver (koz)
Mineral Resources Proved 6,234 7.1 5.6 57 442 349 11,424
Probable 6,626 5.0 3.4 40 331 225 8,521
• 20.9Mt @16.7% Zn/Pb (8% increase y-o-y)
Total 12,860 6.0 4.5 48 773 574 19,945
• Substantial Resource base for potential
conversion to Reserves at a later date
Mine Planning
• Supported by mine plan and improved Mineral Resources – Broken Hill
performance
Tonnes Zn Pb Ag Contained Contained Contained
• Independent review of Ore Reserve and Classification ('000) % % g/t zinc (kt) lead (kt) Silver (koz)
mine plan for Southern Operations Measured 7,754 10.2 9.5 115 791 737 28,669
Holding add-ons Indicated 6,408 9.0 7.3 96 577 468 19,778
• North Mine, Potosi, Flying Doctor and the Inferred 6,695 8.9 5.0 60 596 335 12,915
Pinnacles region Total 20,857 9.4 7.3 92 1,964 1,540 61,362
• Can be fast tracked at low capital cost
10
Exploration and Development Pipeline
Example - Potosi Extended/Silver Peak potential project
Potosi Pit Vent Rise / Emergency Silver Peak Shaft
Escape
Potosi Pit
Portal
Silver Peak Project
Current Development
Current Development
Potosi Extended Project
11
Exploration and Development Pipeline (cont.)
Example – Mount Oxide Copper Project
Current resources (17.9
Mt @ 1.3% for 224kt Cu)
Re-initiated exploration
in October targeted at
improving grade and
quantity of resource in
pit shell.
Conducting EM work to
assist in investigation of
higher grade at depth
12
Exploration and Development Pipeline (cont.)
Example – Flinders exploration and Reliance development
% Re lia nce
Re lia nce
%Re lia nce
Re lia nce
In the past 12 months have shipped #
% Re lia nce Ea st
Re lia nce Ea st
%Re lia nce Ea st
Re lia nce Ea st
0
0
0 0.5
0.5
0.5 1
1
1
## km
km
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## #
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121,041 tonnes of ore at a grade of ## ## ### #
% Em u
######### # #
Em u
%Em u
### ## #
## # ###
Em u
###
# ##
##
# #
# ###
###
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#
#
## ##
###### ## #
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####
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For Scale
### #
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%
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30.1% #
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% Em u S outh
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## # ##
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Open-Cut
# ## # ### # #
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Excellent potential for additional ##
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North Moolooloo
# #
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discoveries and increased resources #
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% Moolooloo
%Moolooloo
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##M oolooloo
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#
We have re-initiated exploration #
(spending $3M this year) focussed on Aristotle –
#
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Beltana East
# ## #
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##### %#Ana conda
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Success will deliver high-value, low- #
##
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% Be lta na
% Be lta na
% Be lta na
% Be lta na
#
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cost Zn tonnes % Atla#s
% Atla s #
%Atla s
% Atla s
#
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% Coppe rr King
%Coppe r King
%Coppe King
#
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%S undow n
% Sundow n
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Sundow
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%Sundow n
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Study is well progressed on the # S undow
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Atlas-Wallrider
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development of the Reliance pit as a
Trend Copper King
first follow on to Beltana # ## # #
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## % W a llride r
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13
Rationale of the Silver Transaction
Terminated Silver Sale Agreement with Coeur d’Alene for US$55 million
Effective from 1 July 2009 (with settlement 31 July).
Provides spot exposure on 11.2 Moz rather than previously committed price.
Face value 11.2 Moz is ~US$145 million (basis US$13.60/oz Ag) at date of
completion - now US$195 million (basis US$17.50/oz Ag).
Significant Long
Term Benefits
Reduction in Net Cash Ability to re-assess
Immediately Cashflow Costs (C1) of high silver deposits. Unsecured Funding
& Earnings Accretive US$0.10 – US$0.12/lb
(based on prices at time of
(North Mine & (<3%+LIBOR)
transaction) Potosi)
14
Rationale of the Rights Issue
On 17 November, Perilya announced a1 for 3 Rights Issue at 42 cents per share to raise
approximately $55 million.
The Rights Issue is fully underwritten by both Zhongjin Lingnan and UBS.
Proceeds will be used to evaluate and, if appropriate develop, its organic base metal growth
options:
– Potosi / Silver Peak underground
– Flying Doctor open cut
– North Mine (Uppers or Sands projects)
– Reliance deposit in Flinders Ranges; and
– Continued exploration program at Mt Oxide
Whilst we are generating positive cashflow from our operations, these funds will ensure we
maintain a very healthy cash position and can comfortably fund these developments if
economic to do so.
Very positive feedback from investor community so far.
Offer documents will be mailed on 27th November; deadline for acceptances 14 December.
15
Share Price Performance Relative to Peers
Perilya Share
Performance
Perilya’s has outperformed its peers over the past 12 months
16
Lead/Zinc/Silver Production Comparison with Peers
80,000 60.0
70,000
50.0
60,000
40.0
Lead/Zinc (tonnes)
50,000
Silver (tonnes)
40,000 30.0
30,000
20.0
20,000
10.0
10,000
0 0.0
Perilya* CBH* JML* Kagara* Terramin**
* Basis 2008/2009 annual production
** Basis April-June Quarter annualised Zinc Lead Silver
17
Create the Future
Perilya has positioned its portfolio of assets
– Broken Hill: optimised with a number of low capital cost add-ons
– Mount Oxide: potential low cost copper project
– Flinders: optionality and stockpiles of zinc on the ground
Created a new foundation for the long-term sustainability of Broken Hill
Perilya has optionality and leverage to metal price
Rights issue provides financial capability to pursue growth opportunities in the
current environment; Diversify risk & improve returns
Zhongjin is a strong and well funded partner and signalling a desire for acquisitions
Focus on long-term sustainability and shareholder value
Positioning for growth
18
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