Investor Presentation
Document Sample
Lennard Shelf Zinc Lead Project
Project Overview
25 May 2009
Summary – Lennard Shelf Zinc-Lead Project
• Premier “Mississippi Valley Type” (MVT) Zinc-Lead provinces
• Initial resource base of 41Mt @ 7.9% Zn & 3.2% Pb
• Remaining resources 8.2 Mt @ 7.4% Zn & 4.6% Pb*
• Update Feasibility Study into viability of reopening the Kapok Mine
and accessing Kapok West
• Existing resources being assessed as to their economic viability
• Excellent potential to expand existing resources and define new
resources via a two year drilling program
• Clean, very high grade, premium concentrate
• Positive Zn price forecasts
• Zinc and lead parity (lead was 1/3 of zinc)
• Three potential processing options
Capital Structure
Shares Post April Capital Raising 114,286,666
Shares to Acquire Project 25,000,000
Total Shares Post Project Acquisition 139,286,666
Total Options 55,664,998
Market Capitalisation (current) $4M
Cash at bank $1.05M
* 23% of shares held in Top 20 – 80%
escrow until Dec 2009 (post project acquisition)
Project Location
400km to the coast
Deep Water Port
Tenements 435sq. km
Project Purchase Arrangement
• Meridian to acquire the mining leases and exploration licences
comprising the project from Lennard Shelf Pty Ltd (50% Teck,
50% Xstrata) for 25,000,000 Meridian Shares
• 25,000,000 purchase shares will be subject to a voluntary
minimum 12 month escrow period
• Lennard Shelf Pty Ltd will have the ability to claw back to a 51%
interest in any newly defined mineral resource by funding a
bankable feasibility study or spending $20M whichever comes first
• MOU Meridian Minerals has until 19 June to raise a minimum of
$5M
• Immediately upon Meridian raising a minimum of $5M the MOU
will become unconditional
Regular Discovery History
• 1974 Exploration Commenced by BHP
• 1978 Pillara discovery 23.2 Mt
• 1984 Cadjebut discovery 5.2 Mt
• 1985 Goongewa discovery 2.6 Mt
• 1990 Kapok discovery 4.6 Mt
• 1997 Kutarta discovery 2.3 Mt
• 2002 Fossil Downs resource defined 2.1 Mt
• 2003 Teck buys project
• 2004 Falconbridge joins Teck in JV
• 2005 Palijippa discovery 2.5 M
Project Development History
• 1974 Exploration Commenced by BHP
• 1994 Western Metals buys out BHP
Project too small to make an impact on BHP’s bottom line
• 2003 Western Metals goes in to administration
Debt load and currency hedging the main issues
• 2003 Teck buys project for $26M
• 2004 Falconbridge joins Teck in JV
• 2007 Pillara Mine reopens
Strategic use of concentrate by Teck
• 2008 Pillara Mine closes
Amongst the lowest grade on the Lennard Shelf, 9% Zn Eq.
Softening zinc price
Oil at US$145/b, AU$=US$0.92, high labour costs from 3 locations
• 2009 Project acquired by Meridian Minerals for $0.5M
Focus on smaller higher grade resources, 13 -15% Zn Eq.
Recovering zinc price, lead price 3X above previous level
Oil at US$52/b, AU$=US$0.70, labour costs down 20-35%
Impact of Zinc Price on Project
Pillara Shuts
Down
Pillara
Recommences
production
800,000 tpa
Impact of Zinc Price on Project
Pillara Shuts
Down
9% Zn Eq.
Kapok
15% Zn Eq.
Australian Zinc Project Comparisons
» Lennard Shelf Zinc-Lead Project (50% Teck, 50% Xstrata)
• Multiple resources (8.2Mt @ 7.4% Zn & 4.6% Pb)
• Potential to re-use existing Pillara plant/infrastructure (requires additional
deal with Lennard Shelf Pty Ltd)
» Angas Zinc-Copper Project (Terramin Australia Limited)
• Feasibility completed on single resource
• Pre mining: 2.41Mt @ 7% Zn, 2.7% Pb, 0.24% Cu, 31g/t Ag & 0.48g/t Au
• Greenfields Site
» Jaguar Zinc-Copper Project (Jabiru Metals Limited)
• Feasibility completed on single resource
• Pre mining: 1.7Mt @ 3% Cu, 11.3% Zn, 0.7% Pb & 115g/t Ag
• Reused old Teutonic Bore Mine infrastructure/brought second-hand
Cadjebut Plant/Kapok underground crusher/conveyor
Jabiru Metals Ltd – Developer to Miner
First CONCS
First ORE mined
delivered
Decline
intersects ORE
• Base share price:
$0.20
Commence decline GFC • Commencement of
Mining Ore: ~$1.50
Feasibility Significant
Upgrade, Project • Commencement of
Funding (Consmin), Off-
take agreement Conc Production:
~$1.60
• Maximum 7 X Base
Share Price
• Market Cap $140M
Terramin Australia Ltd – Developer to Miner
Angas First
Production
Mining • First intersection into
Approvals Angas: ~$0.10
• Commencement of
Resource Upgrade Mining ore: ~$3
Resource Def. • Maximum 8 X Base
GFC Share
• Market Cap $96M
First drill hits
Zinc Resources Comparison
Lennard Shelf Jaguar Angas
Size (Mt) 8.2* 1.7 2.4
7% Zn, 2.7% Pb,
3% Cu, 11.3% Zn,
Grade 7.4% Zn & 4.6% Pb 0.24% Cu, 31g/t Ag
0.7% Pb & 115g/t A
& 0.48g/t Au
Metallurgical
95% Zn, 85% Pb 78% Zn, 87% Cu 90% Zn, 85% Pb
Recoveries
Contained Zinc 584,250 t 192,100 t 168,700 t
Depth 200-600m >300m >50-500m
Concentrate
58-60% Zn, 72-77% Pb 48% Zn, 24% Cu 52% Zn, 49% Pb
Grades
Status Feasibility & Scoping Production Production
Market Cap $4M $140M $97M
* Resources figures taken from Western Metals Limited Report to the ASX 1st July 2003
Diverse Range of Mineralisation Styles
LENNARD SHELF
Goongewa / / Kutarta
GoongewaKutarta
Fitzroy Pillara Block
Trough Emanuel Block
Oscar
Pillara
Pillara Block
Kapok
Kapok Nullara Cycle
Present Day
Erosion Level Pillara Cycle
Cadjebut
Cadjebut
Devonian Fossil Downs
Fossil Downs
Basinal
Clastics Proterozoic Basement
10km
Devonian / Carboniferous Devonian Fore-Reef Lower Dolomite Unit
Devonian Clastics Devonian Reef Ordovician
Devonian Basinal Shale Devonian Platform Proterozoic
CDR 259
Mining and Production Overview
• Total pre-mining resources: 41Mt @ 7.9% Zn & 3.2% Pb
• Four mines previously developed
• Cadjebut, Goongewa, Kapok, Pillara
• Cadjebut and Goongewa had highest rates of return
• Milling rate
• 3Mtpa was peak rate by Western Metals
Producing 170,000t Zn and 80,000t Pb in concentrate
• Meridian Minerals targeted production rate - 800,000 tpa
Producing 64,000t Zn and 26,000t Pb in concentrate
• Simple mineralogy
• Cheap processing
• High value clean concentrates sought after by smelters
• Interest already expressed by metal traders in obtaining concentrates
Remaining Resources (as of Feb 2009)
Size Zn Pb Cu Ag
Resource Comments
(Mt) (%) (%) (%) (g/t)
Kapok JORC Measured, Indicated,
0.89 8.6 5.6 0 0 Inferred
Central
Kapok JORC Measured, Indicated,
0.62 8.0 11.2 0 0 Inferred
East
Kapok
1.22 4.3 9.0 0 0 JORC Inferred
West
Cadjebut
0.39 1.4 14.4 0 0 JORC Inferred
Splay
Kurtarta 2.34 7.2 0.5 0 39 JORC Inferred, Indicated
Fossil
2.15 9.5 2.1 0 50 JORC Inferred * Resources
Downs
figures taken
Napier from Western
0.59 8.5 8.0 0.5 75 JORC Inferred
Range Metals Limited
Report to the
Totals 8.2 7.4 4.6 ASX 1st July
2003
High Grade Zinc-Lead Mineralisation
Sphalerite mineralisation >20% Zn
Mines and Resources at the Emanuel Range
EMANUEL RANGE
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1.2Mt @ 4.3% Zn, 9.0% Pb
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2.34Mt @ 7.2% Zn, 0.5% Pb
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Kapok Central Kapok East
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0.891M @ 8.6% Zn, 5.6% Pb 0.619M @ 7.6% Zn, 9.3% Pb
0 5km
Kapok – Kapok West: Longitudinal Section
0.39Mt @ 1.4% Zn & 14.4% Pb 0.619Mt @ 7.6% Zn & 9.3% Pb
Central
1.2Mt @ 4.3% Zn & 9% Pb 0.891Mt @ 8.6% Zn & 5.6% Pb
Feasibility study in to reopening Kapok and accessing Kapok West
from Kapok decline – Decision Date Dec 09
Kapok Mine Area and Portal
Kutarta Resource
EMANUEL RANGE
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• 2.3Mt @ 7.2% Zn, 0.5% Pb
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0 5km
21
Palijippa Prospect – High Grade Intersections
NW SE
Carolyn
Carolyn Carolyn
Bugle
Gap
Bugle Gap
5%Zn, 2.6%Pb /6.3m
13%Zn, 2%Pb / 2.2m 15.8%Zn, 10.2%Zn,
10.4%Zn, 2.5%Pb / 10.4m 1.9%Pb /4.85m
Bugle Gap 3.2%Pb / 10.5
Pillara Bugle Gap 6.6%Zn, 0.4%Pb / 9.1m
12%Zn, 7%Pb / 2.1m
4.5%Zn, 0.4%Pb
/24.4m 9.31%Zn, Neptunian
1.77%Pb / 3m zone
5.9%Zn / 6m
10.5%Zn,
1.2%Pb / 7.4m Pillara 12.3%Zn,
9.4%Zn,
3.4%Pb / 14m 1.1%Pb / 3.9m
>1%Zn grade contour 26.7%Zn,
Emanuel Shale >0.5%Zn grade contour 6.9%Pb / 3m
100m
Fossil Downs Location Plan
Fossil Downs
Pillara Resource and
Processing Plant
Cadjebut Splay and
Kapok Resources
10km
Fossil Downs Resource
• Inferred Resource of 2.15Mt @ 9.5% Zn, 2.1% Pb and 50g/t Ag
• Fossil Downs has the greatest potential to significantly expand
the existing resource on the Lennard Shelf
• Intersections at Fossil Downs are amongst the highest grades on
the Lennard Shelf
• FD062; 4m @ 30.27% Zn, 10.48%Pb and 183g/t Ag from 450.6m
• FD070; 12m @ 16.22% Zn, 3.27%Pb and 178g/t Ag from 494m
• FD080; 13.3m @ 12.7% Zn, 1.78%Pb and 73g/t Ag from 547.7m
• Significant potential to expand resource
Pillara Processing Plant
Pillara Resource
And 1.5Mtpa
Processing Plant
(not part of project
purchase)
Cadjebut and
Kapok Resources
10km
Processing Options
1. Toll treat through existing
Pillara mill (subject to
concluding arrangement
with Lennard Shelf Pty
Ltd)
2. Purchase Pillara mill
(dependent upon finding
partner acceptable to
Lennard Shelf Pty Ltd)
3. Purchase second hand
plant and locate at Kapok
Trade off study needs to
be completed to find
optimum position of plant.
Investment Proposal
• Subject to securing $5M Meridian Minerals has an opportunity to
acquire 100% of the Lennard Shelf Zinc-Lead Project
• Funding of $7M is required to be raised in May-June 09 via an equity
raising
• Participation in the capital raising provides the investor with the
following:
• Access to a low risk world-class MVT Zinc-Lead project
• Current resource base of 8.2Mt @ 7.4% Zn & 4.6% Pb
• Excellent potential to significantly expand current resources
• Exposure to rising zinc and lead prices
• Abundant news flow from feasibility study and two year drill program
• Experienced management team with a track record of shareholder value
creation
• Significant potential to grow market cap and share price
Use of Funds
Activity Allocated Budget
Year One assessment of Kapok and Kapok West and
$1M
other existing zinc-lead resources
Year One resource extension and exploration program $2M
Year Two resource extension and exploration program $2M
Working Capital and Administration FY 09-10 and 10-11 $2M
TOTAL $7M
Project Development Plan and News Flow
• April 09 – Secure Project via MOU (subject to raising finance)
• May 09 – Complete Due Diligence on assets
• June 09 – Complete $7M fund raising
• June 09 – MOU becomes unconditional
• July 09 – Commence update of study in to viability of Kapok Central
and Kapok West mineral reserves
• July 09 – Commence resource extension drilling and exploration
• Dec 09 – Decision Point on viability of Kapok Central and Kapok West
• Jan 10 – Commence development work at Kapok if feasibility study is
positive
• Dec 10 – Complete resource extension and exploration drilling and
move resources towards production if viable at prevailing zinc price
Conclusions
• Meridian Minerals has the opportunity to secure a 100% interest in the
world-class Lennard Shelf Zinc-Lead MVT Project
• Existing resources comprise 8.2Mt @ 7.4% Zn & 4.6% Pb
• Premium highly sought after concentrate
• Operating and owners costs significantly lower and zinc price rising
• Significant potential to grow market cap and increase share price
• Update of feasibility study in to re-opening the Kapok Mine and
accessing Kapok West
• Excellent potential to create value by growing the resource base at
Kutarta, Palijippa, Kapok and Fossil Downs
• High level of existing infrastructure including 1.5Mtpa processing plant
in the region (access to be negotiated)
• On-going news flow over two year program
Attribution
The information in this report that relates to Exploration Results, Mineral Resources or Ore Reserves is based on
information compiled by Mr Jeremy Read, who is a member of The Australasian Institute of Mining and Metallurgy.
Mr Read is a full-time employee of Meridian Minerals Limited. He 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 quality 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 Read consents to the inclusion in this announcement of the matters based upon his
information in the form and context in which it appears.
Resources figures relating to the Lennard Shelf Project have been taken from Western Metals Limited
Report to the ASX 1st July 2003
