Prescient presentation - Petmin

1 

Prescient Presentation 

The upside 

potential 

14 November 2011 

The content of this presentation is for general information purposes only and is not intended to serve as financial, investment or any other type of advice. In particular, 

the information contained herein is not intended to be and shall not be deemed to be an invitation or inducement to invest in or otherwise deal in any securities of 

Petmin or in any other investment. Any reliance on the information contained herein is at the user's own risk. 

Furthermore, this presentation may contain certain forward-looking statements concerning Petmin’s operations, economic performance and financial condition, and 

plans and expectations. These statements, including without limitation, those concerning the market outlook for the company’s products, expectations of prices, 

production, the commencement and completion of certain exploration and production projects, may contain forward-looking views. Such views involve both known 

and unknown risks, assumptions, uncertainties and other important factors that could materially influence the actual performance of the company. No assurance can 

be given that in these will Petmin 

prove to be correct and no representation or warranty express or implied is given as to the accuracy or completeness of such views or as to 

any of the other information in this presentation. Petmin’s future results may differ materially from past or current results, and actual results may differ materially from 

those projected in the forward-looking statements. 

Petmin will not be responsible for any loss or damage howsoever arising of any nature, including consequential loss or damage suffered or incurred, directly or 

indirectly, pursuant to or as a result of the use of, or any reliance on, this presentation or the information contained herein. 

You are hereby deemed to have agreed that any dispute of whatsoever nature relating to or arising out of any use of this presentation, whether directly or indirectly, 

shall be governed by the laws of the Republic of South Africa, and shall be subject to the exclusive jurisdiction of the courts of the Republic of South Africa. 

You are further hereby deemed to have acknowledged that you have read and understood this disclaimer and agree to be bound by these terms and conditions. Use 

of this presentation indicates acceptance of these terms and conditions. 

This presentation and any accompanying management discussion of this presentation ("Presentation") is given by Petmin Limited ("Company") to persons: (i) that 

the Company reasonably believes are of a kind described in either article 19(5) (investment professionals) or article 49(2)(a) to (d) (high net worth companies, 

unincorporated associations, etc) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005; or (ii) to whom it may otherwise be lawfully 

given, (all such persons together being referred to as "relevant persons"). This presentation must not be acted on or relied on by persons who are not relevant 

persons. Any investment or investment activity to which this Presentation relates is available only to relevant persons and will be engaged in only with relevant 

persons. 

No offer or invitation or solicitation of any offer to acquire securities of the Company is being made at this time nor does this Presentation constitute or form a 

prospectus or part of any invitation or inducement to engage in investment activity (within the meaning of section 21 of the Financial Services and Markets Act 2000 

("FSMA")). 

No reliance may be placed for any purpose whatsoever on the information or opinions contained in or given during this Presentation. The information and opinions 

contained in or given during this Presentation are provided as at the date hereof, are not necessarily complete and are subject to change without notice. 

…A STRONG …Committed PLATFORM to growth, FOR dedicated FUTURE to value GROWTH

2 

Disclaimer 

The content of this presentation is for general information purposes only and is not intended to serve as financial, investment or any other type of advice. In particular, 

the information contained herein is not intended to be and shall not be deemed to be an invitation or inducement to invest in or otherwise deal in any securities of 

Petmin or in any other investment. Any reliance on the information contained herein is at the user's own risk. 

Furthermore, this presentation may contain certain forward-looking statements concerning Petmin’s operations, economic performance and financial condition, and 

plans and expectations. These statements, including without limitation, those concerning the market outlook for the company’s products, expectations of prices, 

production, the commencement and completion of certain exploration and production projects, may contain forward-looking views. Such views involve both known 

and unknown risks, assumptions, uncertainties and other important factors that could materially influence the actual performance of the company. No assurance can 

be given that these will prove to be correct and no representation or warranty express or implied is given as to the accuracy or completeness of such views or as to 

any of the other information in this presentation. Petmin’s future results may differ materially from past or current results, and actual results may differ materially from 

those projected in the forward-looking statements. 

Petmin will not be responsible for any loss or damage howsoever arising of any nature, including consequential loss or damage suffered or incurred, directly or 

indirectly, pursuant to or as a result of the use of, or any reliance on, this presentation or the information contained herein. 

You are hereby deemed to have agreed that any dispute of whatsoever nature relating to or arising out of any use of this presentation, whether directly or indirectly, 

shall be governed by the laws of the Republic of South Africa, and shall be subject to the exclusive jurisdiction of the courts of the Republic of South Africa. 

You are further hereby deemed to have acknowledged that you have read and understood this disclaimer and agree to be bound by these terms and conditions. Use 

of this presentation indicates acceptance of these terms and conditions. 

This presentation and any accompanying management discussion of this presentation ("Presentation") is given by Petmin Limited ("Company") to persons: (i) that 

the Company reasonably believes are of a kind described in either article 19(5) (investment professionals) or article 49(2)(a) to (d) (high net worth companies, 

unincorporated associations, etc) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005; or (ii) to whom it may otherwise be lawfully 

given, (all such persons together being referred to as "relevant persons"). This presentation must not be acted on or relied on by persons who are not relevant 

persons. Any investment or investment activity to which this Presentation relates is available only to relevant persons and will be engaged in only with relevant 

persons. 

No offer or invitation or solicitation of any offer to acquire securities of the Company is being made at this time nor does this Presentation constitute or form a 

prospectus or part of any invitation or inducement to engage in investment activity (within the meaning of section 21 of the Financial Services and Markets Act 2000 

("FSMA")). 

No reliance may be placed for any purpose whatsoever on the information or opinions contained in or given during this Presentation. The information and opinions 

contained in or given during this Presentation are provided as at the date hereof, are not necessarily complete and are subject to change without notice. 

…A STRONG …Committed PLATFORM to growth, FOR dedicated FUTURE to value GROWTH

3 

Disclaimer 

No representation, warranty or undertaking is given by or on behalf of the Company, sponsor, nomad, or their respective directors, officers, employee, agents and 

advisers as to the accuracy, completeness or reasonableness of the information or opinions contained in or given during this Presentation and no liability is accepted or 

incurred by any of them for or in respect of any such information or opinions, provided that nothing in this paragraph shall exclude liability for any representation or 

warranty made fraudulently. The sponsor or nomad does not have any authority to make any representation or warranty on behalf of the Company or any other person 

connected with the Company. 

The contents of this Presentation are confidential and must not be copied, published, reproduced, distributed or passed in whole or in part to others at any time by 

recipients and its contents are confidential. This Presentation is being provided to recipients on the basis that they keep confidential any information or opinions contained 

herein or otherwise made available, whether oral or in writing, in connection with the Company. In particular, this Presentation should not be distributed, published or 

reproduced in whole or in part or disclosed by recipients and, in particular, should not be distributed to United States residents, corporations or other entities, US Persons 

(as defined in Regulation S promulgated under the United States Securities Act of 1933 (as amended)), persons with addresses in the United States of America (or any of 

its territories or possessions), Canada, Japan, the Republic of Ireland, the Republic of South Africa or Australia, or to any corporation, partnership or other entity created 

or organised under the laws thereof, or in any other country outside the United Kingdom where such distribution may lead to a breach of any law or regulatory 

requirement. 

Statements, beliefs and opinions contained in this Presentation, particularly those regarding the possible or assumed future financial or other performance of the 

Company, industry growth or other trend projections are or may be forward-looking statements, beliefs or opinions and as such involve risks and uncertainties. Actual 

results and developments may differ materially from those expressed or implied by such statements, beliefs or opinions, depending on a variety of factors and accordingly 

there can be no assurance that the projected results, projections or developments will be attained. No representation or warranty, express or implied, is given or made by 

the Company or any of its respective directors, employees or advisers or any other person as to the achievement or reasonableness of, and no reliance should be placed 

on any projections, targets, estimates or forecasts or the statements, beliefs and opinions expressed in this Presentation and nothing in this Presentation is or should be 

relied on as a promise or representation for the future. 

The sponsor or nomad is acting exclusively for the Company and is not acting for any other person or treating any other person as its client and will not be responsible to 

anyone other than the Company for providing the protections afforded to clients of the sponsor or nomad, or for providing advice in relation to any offering of securities in 

the Company. 

No recipient of or attendee at this Presentation should deal in or attempt to deal in or otherwise engage in any behaviour which would or might constitute market abuse 

(as defined in section 118 of FSMA) in relation to any securities or other qualifying investments to which this Presentation relates. This Presentation may contain inside 

information and accordingly recipients of or attendees at this Presentation will not be able to deal in any securities of the Company before the information is made public 

in accordance with (i) the insider dealing provisions of Part V of the Criminal Justice Act 1993 and/ or (ii) the market abuse provisions of Chapter VIII of the South African 

Securities Act 2004 (the "Securities Act") . No individual within the Company or its sponsor or nomad is, by virtue of making this Presentation, encouraging recipients of 

or attendees at this Presentation to deal in accordance with section 52(2)(a) of the Criminal Justice Act 1993 or section 73(4) of the Securities Act. 

By agreeing to attend or receive this Presentation you: (i) represent and warrant that you are a relevant person; and (ii) agree to the foregoing (including, without 

limitation, that the liability of the Company, its sponsor or nomad and their respective directors, officers, employees, agents and advisors shall be limited in the manner 

described above). IF YOU ARE NOT A RELEVANT PERSON OR DO NOT AGREE WITH THE FOREGOING, PLEASE IDENTIFY YOURSELF IMMEDIATELY. 

…A STRONG …Committed PLATFORM to growth, FOR …exceeding dedicated FUTURE to expectations 

value GROWTH

Prescient presentation – 14 November 2011 

1. About Petmin 

2. Strategy 

3. Business of Today 

4. Business of Tomorrow 

5. Results and highlights

5 

Petmin’s share price outperformed 

JSE General Mining and Small Cap indices 

Equity 

CAGR last 5 years 

(Excluding Dividends) 

Psg 20.7% 

Capitec 41.5% 

Anglo 8.3% 

Billiton 18.7% 

Petmin (since inception 2004/5) 40% 

…Committed …A PLATFORM to growth, FOR dedicated GROWTH to value

6 

About Petmin 

Cash-producing dividend-paying high-growth junior miner 

Listed on AIM (PTMN) and JSE (PET) 

Market cap R1.5 billion 

Proven experienced management team 

580 million shares in issue 

119 m shares traded 1/7/10 – 30/6/11 (34% of free float) 

Significant management and BEE shareholding (40%) 


Current overview of Petmin 

7 

Red Crescent 

Resources 

Corporate 

investment in 

a junior mining 

company with 

assets in 

Turkey 

Iron Bird JV 

JV with 

Humming Bird 

Resources, a 

early stage 

Liberian Iron 

Ore Project 

Petmin 

US$ 0m US$ 4.6m US$ 2.0m US$ 3.5m ZAR 98m 

0% 

SIVAS 

Currently 

owned 75% 

by RCR 

Turkey and 

25% by local 

partners 

10.1% 50% 10.7% 25% 100% 100% 

Canadian 

Iron Sands 

Copper Copper, Iron ore Iron sands 

zinc 

and pig 

iron 

Projects 

Operations 

Veremo 

Holdings 

(Pty) Ltd 

SamQuarz 

(Pty) Ltd 

SamQuarz 

Silica Mine 

Tendele Coal 

Mining (Pty) 

Ltd 

Somkhele 

Anthracite 

Mine 

Pig iron Silica Metallurgical 

anthracite 

…turning …Committed development to projects growth, …exceeding into dedicated cash generative to expectations 

value assets

Geographic diversification 

8 

A 

B 

C 

D 

E 

F 

•Anthracite 

South Africa: 100%-owned cash-generating 

Somkhele anthracite mine 

•Silica 

South Africa: 100%-owned cash-generating 

SamQuarz silica mine 

•Iron ore 

South Africa: 25% of Veremo pig iron project 

Liberia: 50% of Mount Ginka iron ore 

exploration project 

Canada: Up to 49.9% of iron sands 

exploration and development project 

•Copper 

Turkey: Up to 37.5% of Sivas copper 

exploration project and 10% stake in Red 

Crescent Resources with zinc and manganese 

prospects 

E 

E 

D 

F 

A 

B C 


9 

Significant upside potential as at 30 June 2011 

Petmin is trading at a discount to the directors’ valuation 

Market Capitalisation (09 November2011) ~R1.5bn 

Current share price = R2.59 

Somkhele R2.388bn (DCF @ 10% Real, net of debt) 

SamQuarz R0.231bn (Estimated after tax proceeds on sale) 

Veremo R0.496bn (Audited Valuation – FY11) 

Projects* R0.022bn (Cost of investments – FY11) 

Cash R0.228bn 

Corporate Office -R0.336bn (NPV over 20 years) 

TOTAL R3.029bn 

NAV per Share (with Corporate) R4.95 (612m shares fully diluted) 

*Huge optionality and value 

…Committed to Growth, dedicated to value

Petmin’s shareholder base 

10 

BEE shareholders include: 

Dark Capital (Pty) Ltd 

G Sibiya 

Lebo Mogotsi 

Umsobomvu Coal (Pty) Ltd 

Lebone Resources (Pty) Ltd 

Clidet 449 (Pty) Ltd 

Clidet 611 (Pty) Ltd 

Mantratime (Pty) Ltd 

28% 

15%* 

Management Other shareholders 

18% 

* – This excludes 3% of management equity included under BEE shareholders – total 

management shareholding is therefore 18% 

39% 

Institutional shareholders 

include: 

PSG Palladin 

Investec 

CoroCapital 

PIC 

Metlife 

BlackRock 

Old Mutual 

Traxys 

RMB 

Sanlam 

Nedcor 

SBSA / Stanlib 

‘Free Float’ 60% 

• Excludes strategic BEE 

• Excludes management 

40% 

• Management/strategic BEE 

10 

…Committed to growth, dedicated to value

Petmin Board and management governance structure 

11 

11 


Investor presentation – 14 November 2011 


2. Strategy 




Urbanisation and infrastructure 

Los Angeles 

18.8m 

Sources: McKinsey Global Institute, ‘ Urban World: Mapping the 

Economic Power of Cities’, 2011 

13 

Mexico City 22.9m 

The cause and effect of global economic growth 

New York 22m 

Rio 12.6m 

Sao Paulo 20.8m 

Buenos Aires 14.8m 

London 12.3m 

Paris 10.5m 

Istanbul 13.7m 

Lagos 12.2m 

Tehran 13.2m 

Moscow 14.8m 

Karachi 

16.9m 

Mumbai 

23.5m 

Delhi 

24.1m 

Dhaka 

14.1m 

Calcutta 

16.7m 

26 cities today with population >10 million people 

13 more cities with > 10 million people by 2025 

Jakarta 

18.8m 

250 million more urbanised Indians and Chinese by 2020 

Seoul 24.6m 

Beijing 14m 

Shanghai 18.8m 

Guangdong 25.1m 

Manila 

20.2m 

Tokyo 34.3m 

Osaka 16.8m 


The steel and infrastructure value chain 

Sources: Peabody Energy, ‘Barclays CEO Energy-Power Conference’, Sep 

2010; World Steel Association, 2011 

14 

19 Mt 

1600 Mt 

893 Mt 

643 Mt 

11 Mt 


Urbanisation has a double effect on steel demand, with 

more people AND greater steel usage per person 

Sources: Peabody Energy, ‘Barclays CEO Energy-Power Conference’, Sep 

2010; Central Intelligence Agency, ‘The World Factbook’, 2011; US 

Census Bureau, ‘International Database’, 2011; United Nations, 

‘2009 Revision Population Database’, 2011; IMF, ‘World Economic 

Outlook’, 2011 

15 

Country 

Population: 

million (percentage) 

2010 2015 2020 

Urbanisation: 


Urbanisation: 


Urbanisation: 


Japan 127 85 (67%) 86 (68%) 86 (69%) 

China 1 398 636 (47%) 713 (51%) 787 (55%) 

India 1 215 365 (30%) 411 (32%) 463 (34%) 

Brazil 195 169 (87%) 179 (88%) 187 (90%) 

Korea 48 40 (83%) 42 (84%) 42 (86%) 

Rest of world 3 921 2192 (55%) 2394 (57%) 2610 (58%) 

World total 6 904 3 486 (51%) 3 824 (52%) 4 176 (54%) 

World total population 6904 7298 7 677 

% urban 

90 

80 

70 

60 

50 

40 

30 

20 

10 

Global urbanisation growth 2010-2050 

2010 2050 

India and China total 

urbanised growth 

2010-2020 

= 250 million people 

~ 700 million to cities 

~ 800 million ‘new’ 

people 


value assets

Production (mt) 

Rising steel production is evident in China and India, 

with burgeoning infrastructure and urbanisation 

2500 

2000 

1500 

1000 

500 

0 

Global steel production and Asian growth 

World production 

in 2000: 549mt 

Other 26mt 

India 

40mt 

China 

499mt 

•World growth 

World production 

in 2010: 1414mt 

Other 

412mt 

India 

135mt 

China 

485mt 

•World growth 

World production in 

2025: 2446mt 

2000 2010 2025 

Sources: BHP Billiton, ‘Industry Outlook for the Next Decade’, Apr 2011; Rio 

Tinto, Tinto ‘Coal Australia Financial Community Presentation’, Jun 

2010; World Steel Association, 2011; Macquarie ‘China Day 

Presentations’, Nov 2010; Rio Tinto ‘Coal Australia Financial 

16 Community Presentation’, Jun 2010; Anglo American, ‘Global Iron Ore 

and Steel Forecast Presentation’, Mar 2011 

Commercial 

construction 

7% 

Industrial 

construction 

7% 

Regional steel consumption growth (mt) 

2000 2008 2020 

China 140 450 870 

India 30 50 160 

East Asia 130 150 145 

Western Europe 150 160 170 

North America 160 140 180 

South America 25 50 80 

Middle East and Africa 35 65 100 

2020 steel consumption by sector 

Infrastructure 

14% 

Machinery 

19% 

Other 

15% 

Residential 

Residential 

consumption construction 18% 

18% 

Appliances 

6% 

Automobiles 

10% 

Shipbuilding 

4% 

2020 steel consumption 

India 

8% 

…Committed to growth, dedicated to value 

Rest of world 

50% 

China 

42%

The effect of urbanisation and infrastructure 

development on the steel value chain 

17 

$900/t = over 

$1 trillion 

industry 

Sources: MEPS, ‘World Composite Steel Price’, Apr 2011; Standard Bank, 

‘Commodities Daily’, May 2011 

$4 200/t = over 

$100 billion 

industry 

$9 000/t= 

almost $200 

billion industry 


value assets

Vision: To develop into a geographically diversified, multicommodity 

mining company that will deliver sustainable and 

superior returns to shareholders 

18 

Strategy 

Organic and acquisitive growth 

Focusing on a mix of quality cash-producing assets and projects that create “optionality” 

Capitalise on the steel value chain and focus on commodities that support infrastructure development and urbanisation 

COMMODITIES 

Petmin is focussed on infrastructure 

development and urbanisation 

commodities such as: 

• Copper 

• Iron Ore 

• Metallurgical coals (coking & 

anthracite) 

• Manganese 

• Chrome 

• Other steel additives 

• Potash 

PETMIN ACQUISITION Leadership 

STRATEGY 

Our “Leadership at the Corporate Centre” is tasked with implementing the Board Approved Strategies and setting the tone for the business 

The role of the Corporate Centre is to allocate capital and employ the best possible teams for the various projects/operations 

The management system is decentralised and each management team is disciplined, innovative and entrepreunaral 

Goal 

To deliver sustained and superior risk-adjusted returns (capital growth and dividend) to its stakeholders 

PETMIN – 2010 

Market Cap ~ $250m 

JSE Main Board 

LSE Aim Market 

Anthracite/Silica Operations 

Iron Ore / Pig Iron Projects 

Predominantly South African Assets 

2010 – 2015 

Potentially through one transaction or a series of 

transactions 

GEOGRAPHIES 

Petmin will invest in politically-stable countries with security of tenure 

INVESTMENT CRITERIA 

• Opportunities must have a long potential life of mine i.e. >20 years 

• The ore body must be of high quality and yield a return (IRR) of at least 20% 

• Projects must have the ability to produce at least $30m PBT per annum at full 

production 

• Operations must be at the bottom 50% of the cost curve 

• Projects should be able to produce BFS within 36 months of initial investment 

• Dividend and gearing policies to be maintained 

PETMIN – 2015 

Market Cap > $600m 

Listed on LSE Main Board 

FTSE 250 

Infrastructure Based Commodities – mix of 

cash producing operations & projects 

South Africa Assets

Our strategy is based on key pillars 

19 


The Strategic Objectives for the next 3 years 

20 

Overall 

• To de-risk Petmin for all shareholders, by reducing our 

dependence on one geographic region and one 

commodity through geographic diversification spread 

across our chosen range of commodities that feed into 

the steel value chain 

• To continuously evaluate the performance of our assets 

to ensure superior returns through investment and 

divestment 

• To ensure sustainable organic growth in our cash 

producing assets 

• To maintain our dividend policy of paying 20% of HEPS 

• To maintain a debt to equity ratio of less than 30% 

• To acquire cash producing assets that produce at a price 

that will ensure a long-tern return well in excess of our 

cost of capital 

• To prudently allocate our capital resources between cash 

generating operations and a quality pipeline of 

development asset 

• To move our London AIM listing to the Main Board and to 

become part of the FTSE Top 250 Index by 2015 

• Continue the culture of zero harm to employees and 

minimal impact on the environment 

Business of Today 

• To ensure Operational Excellence 

• To ensure Value added Growth 

• To Securing the future 

• To successfully close the sale of SamQuarz 

• To ensure sustainable organic growth at Somkhele 

To successfully commission the Second Plant at 

Somkhele 

To ensure a “life of Mine” in excess of 20 years at full 

production 

To ensure the conversion of all prospecting permits into 

New Order Mining Licence 

To ensure sufficient export capacity 

Business of Tomorrow 

• To ensure Value added Growth 

• To Securing the future 

To acquire cash producing assets that produce at a 

price that will ensure a long-tern return well in excess of 

our cost of capital 

To invest in a quality pipeline of development assets 

To achieve the objectives iro Veremo, Iron Bird, Sivas 

and NAIC as outlined elsewhere 


value GROWTH

Petmin valuation curve – Huge optionality embedded in 

projects 

21 

Value curve 

• Exploration projects don’t generate cash flows or earnings and 

are difficult to value. Therefore management must move them up 

the value curve 

• Each stage of the value curve has a clear set of deliverables 

• There are a range early evaluation techniques (e.g. Aeromag, 

Lydar etc.) 

• Successful drilling results determine if feasibility study 

undertaken 

• Once the feasibility study is complete, there is the option to 

develop the resource by committing capital or relinquish the 

undeveloped resource 

Valuing a mining company with multiple resources 

• The preferred approach is to consider each resource separately 

as an option, value it and add the values of the options to 

determine the company’s value 

• Valuing a mining company: 

Value of developed resource (DCF Valuation: cash flow from 

extraction and sale of cash flow) 

+ 

Value of undeveloped resources (Option Valuation: option 

value of undeveloped resources (individually or aggregate) 

= Value of Assets 


value GROWTH

Petmin strategy 

22 

Focus on steel value chain and commodities required for urbanisation and 

infrastructure development 

•Rigorous investment criteria 

•Track record of developing assets for superior shareholder returns 

• Stable cash-generating operations in SA with expansion potential 

•Global expansion into high-potential exploration projects in Africa, Turkey 

and North America 


value GROWTH



2. Strategy 




South Africa’s largest anthracite producer, Somkhele, has 

a capacity of 1.3 Mtpa of specialised metallurgical coal 

Sources: CAMR, Feb 2010 

24 

Somkhele highlights 

Location • KZN, 85km north of Richards Bay Port 

Mining 

Commissioning 

Reserves and 

Resources 

Mineral Rights 

Plant 

People 

• Five areas with four coal seams (Areas 1 and 

2 under production) 

• B Seam up to 15m thick 

• Acquired in 2005 at pre-feasibility stage 

• Commissioned opencast mine and plant in 

June 2007 

• SAMREC-compliant resources of 51 Mt 

• Areas 1-3 reserves = 23.3 Mt 

• Process underway to ensure 20 year LOM 

• New Order Mining Rights for Area 1 

• Conversion of Areas 2 and 3 granted 

• Prospecting rights successfully renewed for 

Areas 4 and 5 covering 22,000 ha 

• Plant 1 capacity: 530,000 saleable tpa 

• Plant 2 capacity: 850,000 saleable tpa 

• 800 employees (including contractors) 

• 80% of employees are from local community 

US$/t 

800 

700 

600 

500 

400 

300 

200 

100 

0 

Anthracite and coke price comparison 

Mar-06 

Jun-06 

Sep-06 

Dec-06 

Mar-07 

Jun-07 

Sep-07 

Dec-07 

Mar-08 

Jun-08 

Sep-08 

Dec-08 

Mar-09 

Jun-09 

Sep-09 

Dec-09 

Mar-10 

Anthracite lumps c&f, Northern Europe China export coke 



25 

More than doubling production at cash-generating Somkhele mine in KwaZulu 

SA’s largest producer of anthracite – a specialised metallurgical coal 

2010/11 output – 524,000 tonnes produced and 579,000 tonnes sold 

More than doubling production to meet demand to more than a million tonnes by end Q1 2012 

45% export to metallurgical industry 

55% domestic customers in ferrochrome industry 

Capital expenditure R140 million on second wash plant 


value GROWTH


26 

Accelerated R54m three year 

Somkhele exploration 

programme 

•Prospecting rights over 22,000 ha 

successfully renewed 

•Mining on 1,400 ha and exploration 

of 2,500 ha to date 

•Life of mine exceeds 20 years at 

full production today 

•Exploration to increase resource, 

enable further expansion, and 

extend life of mine 

Total at the start of 

the exploration 

campaign 

Reserves added during 2011 

• Probable: 21.12Mt 

• Proven: 6.33Mt 

27.45Mt 

Exploration Percussion Core 

No m No m No m 

41 4191 210 

Total cost of exploration – R23.3m 

Saleable Product (@42%) - 11.53Mt 

Average cost per ton ~ R2 

Average margin per ton ~ R300 

Exploration Results 

26 

345 

111 2 696 


value GROWTH


27 


value GROWTH

28 

Performance Summary 2010 and 2011 - Somkhele 

Anthracite (Somkhele) 

2011 Reviewed 2010 Audited Variance Variance % 

Tonnes produced 524 006 467 843 56 163 12.0% 

Tonnes sold 579 087 411 630 167 457 40.7% 

- local 269 739 219 162 50 577 23.1% 

- export 309 348 192 468 116 880 60.7% 

Turnover (R’000) 471 385 334 880 136 505 40.8% 

- local (R’000) 242 554 178 041 64 513 36.2% 

- export (R’000) 228 831 156 839 71 892 45.84% 

PBT (R’000) 117 006 120 402 -3 396 -2.8% 

PAT (R’000) 83 407 87 947 -4 540 -5.2% 

Average cost at mine gate per tonne (R) 555.31 438.18 117.13 26.7% 

Average sales price per tonne(R) 814.01 813.55 0.46 0.1% 

- local 899.22 812.37 86.85 10.7% 

- export 739.72 814.88 -75.16 -9.2% 

Average dollar price of exports ($) 112.06 109.96 2.10 1.9% 

Weighted average Rand/$ exchange rate 6.6011 7.4107 -0.8096 -10.9% 

Margin: PBT/Turnover 24.82% 35.95% -11.13 -31.0% 

Profit per tonne sold (before tax) R202.05 R292.50 -90.45 -30.9% 

…turning …A STRONG development PLATFORM projects …exceeding FOR into cash FUTURE generative expectations GROWTH assets

29 

Performance Summary 2010 and 2011 - Somkhele 

Anthracite (Somkhele) 

2011 Reviewed 2010 Audited Variance Variance % 


Cost of run-of-mine coal 298.02 191.29 106.73 55.8% 

Plant processing 97.21 102.39 -5.18 -5.1% 

Other overhead costs (includes Petmin fees) 127.39 115.36 12.03 10.4% 

Depreciation 32.69 29.14 3.55 12.2% 


• The increased amount of overburden to be moved in this higher strip ratio environment resulted in an increase in 

mining cost of 56% when moving from a strip ratio of 1.7:1 in Area 2 to a strip ratio of 4:1 in Area 1. 

• The increase in production and sales volumes combined with efficiency improvements enabled Somkhele to limit 

the increase in total cost per tonne (at mine gate) to 26.7% 

• Average Cost at Mine Gate estimated to be R 650 for 2012 as ALL production will come fro Area 1 (Revised strip 

ratio of 3.8:1). 

…turning …A STRONG development PLATFORM projects …exceeding FOR into cash FUTURE generative expectations GROWTH assets

30 

Targeted net profit (“both plants in production”) – R’000 

Net margin (R/t)^ 

Contribution/ton 

Total Production (Including 2nd plant) – 000tpa 

1100 1200 1300 1400 

R 200 R 220 000 R 240 000 R 260 000 R 280 000 

R 250 R 275 000 R 300 000 R 325 000* R 350 000 

R 300 R 330 000 R 360 000 R 390 000* R 420 000 

R 350 R 385 000 R 420 000 R 455 000 R 490 000 

R 400 R 440 000 R 480 000 R 520 000 R 560 000 

Note - *refers to the targeted net profit before tax (Fluctuation in the R/$ has a significant impact) 

^Net profit margin = the total cash cost + depreciation + amortisation (Total Ex-mine gate costs) 


value assets

Sale of SamQuarz silica mine 

31 

Petmin has sold SamQuarz for R258m (Plus NAV) 

45% return year-on-year after tax 

Largest producer of flint-grade silica in SA 

Key supplier to SA clear glass and metallurgical industry 

New Order Mining Rights valid for 30 years 

Life of mine in excess of 40 years 

Stable production of 1.1m tons per annum 

Outstanding Conditions: (Best estimate Q2, 2012) 

• Section 11 

• Competition commission 


value GROWTH



2. Strategy 




Comprehensive and aggressive Petmin growth strategy 

33 

VALUE ADDING 

Feasibility 

Pig Iron 

BUSINESS OF 

TODAY 

Anthracite 

+ Silica 

Mining 

Anthracite 

Silica 

BUSINESS OF 

TOMORROW 

Infrastructure Development 

and Urbanisation Value 

Chains 

Steel-related commodities 

Infrastructure-related 

commodities 

Metallurgical coal 

Copper 

PGM 

POSITION ON THE STEEL AND RELATED PRODUCT VALUE CHAIN 

End Use 


NAIC 

34 

Petmin has option to acquire up to 49.9% of a Canadian iron sands/pig iron 

project 

• Petmin has acquired 10.7% of a privately owned Canadian iron sands/pig iron Project for 

$3.5m 

• Claims under licence cover 450km 2 

• Resource is extensive and well placed infrastructurally near clean cheap power and a port 

• The current exploration programme has drilled over 3500m with results due in Q1 2012 

• The current exploration phase includes a large bulk sample and smelt test 

• Financial indications at this stage indicate that the project will produce pig iron at costs well 

within the lowest quartile 


value GROWTH

NAIC 

35 


value GROWTH

NAIC 

36 

Note 1 

• Phase 1 – US$1.5 million invested. Committed to a drilling programme to drill up to 1 300m 

• Phase 2a – US$2 million invested. Committed to a drilling programme to drill a further 2 000m, Aeromags/Lydar, Lab analysis, ore dressing 

studies, melt test studies, environmental scoping, appointment of project manager and agreement with technical partners on melt test work 

• Phase 2b – US$1.5 million to be invested. Exploration programme includes bulk sample, melt test, initiate PFS, on-going drilling, environmental 

permitting and communications 

• Outcome of phase 1, 2a and 2b is a 20 years measured and indicated resource and satisfactory conclusion of the concentrate test work, 

production, melt test, initiation of environmental permitting and initiation of PFS 

Note 2 

• Phase 3 (a, b & c) – US$20 million to be invested (3a: $6 million, 3b: $6 million and 3c: $8 million) is the Bankable Feasibility Study (BFS) phase 

and Petmin will only proceed with the investment of the US$20 million on satisfactory outcome of phases 1, 2a and 2b 


value GROWTH

NAIC 

37 

Executive Summary 

• Commodity – pig iron fits within Petmin’s strategy of investing in ‘urbanisation’ commodities and more specifically the steel value 

chain. 

• Market – since our investment pig iron prices have increased for $450/t to over $500/t – long term prognosis remains positive 

despite current volatility (average Pig Iron Price for the last 6 months has been >$500). 

• Current estimates for NAIC’s cost of production are $260/t against a Q32011 Producer Median of $507/t. 

• At current pricing project has a real NPV10 of >$500m (Phase 1 ~550ktpa). 

• Significant competition for smelting plant location (Pennsylvania, Quebec, Louisiana, Labrador) means substantial financing, 

electrical tariffs and tax incentives are a reality. Initial discussions have been held with all provinces. 

• Exploration has made good progress with >4500m’s drilled since Petmin’s investment in October 2010. 

• >480/1370 samples of phase have been reanalysed – results are in line with original expectations at Heavy Mineral % of ~9% 

and useable Fe minerals (Magnetite, Titanomagnetite and Ilmenite) at ~50% of the HM’s. 

• Maiden resource announcement aimed for January 2012. 

• Metallurgically we have produced a viable concentrate with magnetic separation only (optimisation is still required) 

• Plans for a bulk sample to be fed through a pilot plant – Ordering of major equipment for the pilot plant has begun. 

• Discussions have been held with Tenova to carry out a conceptual study for the smelting plant – their proposal has been 

received. 

The work completed to date has confirmed our belief that this a real project with the potential to 

be a significant business. 


NAIC 

38 

Resource 

• >4500m’s has been drilled 

• Phase 1 samples are being reanalysed – results of heavy minerals 

received on ~480/1400 phase 1 samples have been received. 

• Completion of Phase 1 samples will enable a resource to be declared. 

• All drill holes drilled to date have had mineralisation. 

• Aeromagnetic data along with LIDAR data indicate good potential well 

below our current drilling cut-off. 

• Results to date are indicating an average grade of approximately 4.5% 

magnetite and titanomagnetite in line with original expectations. 

• Maiden resource statement due in January 2012 over 14km 2 of >3000mt 

grading at about 4.5% Magentite and Titanomagentite (10 - 15 years 

production) covering 3.1% of our claims 

Valuation 

• DCF10 Valuation of the project at June Pig Iron Price of $519/tonne is 

>$500m with an IRR of 27% (both real). 

• Levered value (50%) is >$550 with an IRR of >40% 

• At more conservative pricing ($409/t – lowest LT price of analysts) the 

projects value is >200m with an IRR of 17%. 

• Project has imminent potential for scalability. 

Long Term Pig iron Price 

Grade 

(Mag & Ti-mag) 

202 375 425 475 525 

2% 2% -205 -31 138 285 

3% 3% -39 131 280 423 

4% 3% 45 205 348 491 

5% 4% 89 247 390 531 

6% 5% 125 274 417 557 

7% 6% 141 294 437 576 

Market 

• Average Pig Iron Price has increased from about $450 at time of 

investment to >$500 (June 2011). 

• Cost Curve for Pig Iron has steepened from a range of $225/tonne - 

$516/tonne in 2010 to $240 - $640 in Q3 of 2011 (Cash Cost). 

• Grand River’s estimates cash cost is about $210/tonne ($260 all in). 

• Grand River’s access to low cost electricity (3.5c vs 7c) and low cost 

iron ore ($30/t vs. $180/t) give it a significant advantage over most 

other producers. 

• Average ratio of pig iron production to steel production is 0.52 but 

directly correlated to steel – if we believe in steel, we must believe in 

pig iron. 

• Market for Iron Ore has decreased since WSD report to about $140/t. 

Cost Comparison per Tonne of Pig Iron Produced 

Median Producer Cost Curve - 3Q2011 NAIC Expected Costs 

Unit/t Pig Iron US$/Unit Cost/t Unit/t Pig Iron US$/Unit Cost/t 

Iron Ore 1.60 180.00 288.00 1.91 28.94 55.21 

Briquetted Feed* 1.70 52.38 89.05 

Coke & PCI 0.50 406.02 203.01 0 0 0.00 

Electricity 38.00 0.07 2.66 1040.89 0.035 36.43 

Other Energy 3.30 6.50 21.45 0 0 0.00 

Labour 0.69 19.25 13.28 0.4 22 8.80 

Energy Credit 1.00 -41.89 -41.89 0 0 0.00 

All Other Costs 1.00 21.04 21.04 1 20.3 20.30 

507.55 209.78 

Source: World Steel Dynamics – November 2011 


NAIC 

39 

Metallurgy 

• Ore dressing studies continue to be carried out by Dr Jayson Ripke and 

Glenn Hoffman of Cardero Resources. 

• During the period a Wet High Intensity Magnetic Separator (WHIMS) was 

purchased and further testwork has begun using this unit. 

• Metallurgical testing has indicated that an adequate concentrate can be 

produced using just magnetic separation but this requires further 

optimisation. 

• Some optimisation has been achieved via the screening of the 

concentrate post magnetic separation but further work is required for 

production plant optimisation. 

• Tenova has been engaged to carry out a conceptual study on the pig iron 

production plant – proposal has been received. 

Environmental / Community 

• Some delays were experienced due to tree cutting on some of the claims 

and due to the environmental registration process that was triggered for 

the bulk sample. 

• Stantec have been engaged to run the permitting process for the bulk 

sample as well as to carry out a scoping study for the whole project. 

• The Innu Nation hold a land claim to our property and own 5% of Grand 

River shares. 

Pilot Plant 

• Objective of the pilot plant is to produce 200t of concentrate for a 

continuous melt test. 

• All equipment has been detailed (Process flowsheet engineering, 

equipment sizing and specifications). 

• An RFQ was sent out, on the basis of responses the ordering has begun. 

• Expectations are to operate the pilot plant during February 2012 and 

March 2012. 

• Negotiations are underway for access to furnace facilities to conduct the 

melt test. 

• Current cost estimates for the pilot plant are $650 000 – higher than the 

budget of $400 000. NAIC has applied for 50% of the costs to be paid by 

the Atlantic Canada Opportunity Agency (ACOA). Awaiting feedback. 

Location 

• Location remains a big advantage of the project. 

• Close proximity to a port has given the project options to produce a 

concentrate in Goose Bay but locate the smelter in other regions. 

• Erie, Pennsylvania, Quebec & Louisiana have all shown a significant 

interest in locating the project in 

their jurisdictions. 

• Each of these have indicated the 

potential for low electricity rates, 

soft loans and tax holidays for the 

project. 

• Potential loan financing of up to 

50% of the smelter CAPEX on soft 

repayment terms. 


NAIC 

40 

Invested 

USD1.5m – 

Oct 2010 

Initial Start-up 

and River 

Drilling Nov ‘10 

Initial 

Aeromags – 

Jan ‘11 

Land Targets 

Drilling – Feb 

– April ’11 

(1376m’s 

drilled) 

Initial 

Laboratory 

Data – Mar to 

July 

Aeromags 

over full 

property 

Samples 

Results 

audited – 

July/August 

Indicated 

Drilling – July 

to October 

2011 

(2856m’s 

drilled) 

Engage 

laboratory to 

redo all 

Phase 1 

samples – 

Sept - current 

Order Pilot 

Plant – 

November 

2011 

Timeline 

Obtain all 

results from 

Phase 1 

drilling – 

declare a 

maiden 

resource – 

Jan 2012 

Engage 

Tenova 

(should 

budget allow) 

– to carry out 

PFS on Iron 

Smelting 

Install and 

Commission 

Pilot Plant – 

Jan – Feb 

2012 

Maiden 

Resource 

Statement 

– Jan 2012 

Processing of 

concentrate – 

Feb-Mar 

2012 

Melt Test – 

Mar – Jun 

2012 

Processing of 

Phase 2 

samples 

complete – 

Mar 2012 

OCT 2010 JULY 2011 JAN 2012 JUN 2012 

Signed off 

NI 43101 by 

June 2012 

PFS/BFS to 

begin – July 

2012 


NAIC 

41 

Example of Drill Core 

Recon Drilling Winter Drilling 

Core Logging Port at Site 


value GROWTH

Iron Ore – Mount Ginka, Liberia 

42 

Liberia – emerging from civil war to become 

a major iron ore exporter again! 

Population of 3.6m people 

Civil war between 1989 and 2003 devastated the 

economy. 

Liberia was the 3 rd largest exporter of iron ore in the 

1970s 

Government is now stable and putting in place good 

governance mechanisms for mining regulations 

Major companies such as BHP, Arcelor Mittal, Rio 

Tinto and … Petmin are now investing 


value GROWTH


43 

Petmin holds 50% of the Mt Ginka iron ore exploration licence in Liberia 

$2m investment in Iron Bird Resources – a joint venture with AIM-listed Hummingbird 

Aeromag survey shows continuous magnetic unit interpreted as iron formation 

20km long up to 250m wide and 1,000m deep 

Early samples range from 33-54% magnetite Fe 

Iron Bird fully funded for further exploration of ore body and economic potential 

Mt Ginka is 20km from a major iron ore mine which produced 12-24Mt pa of high grade ore 

from 1964 to 1989 – now reopened by Arcelor Mittal (BHP Billiton also nearby) 

15km from railway line to deep-water port of Buchanan 


value GROWTH


44 


value GROWTH


45 

Petmin holds 50% of the Mt Ginka iron ore exploration licence in Liberia 


value GROWTH


46 

Note 1 

• Phase 1 – US$500 000 invested. The investment was utilised to fund a detailed aeromagnetic survey 

• Phase 2 – additional US$1.5 million invested on successful completion of phase 1. the investment is being utilised to demonstrate the 

potential scale and whether a commercially saleable magnetite can be produced 


value GROWTH


47 

2011 update 

• Mapping and trenching has confirmed the presence of fine to 

very fine-grained iron formation 

• Mapping and trenching have not provided any evidence 

supporting the potential for DSO at Mount Ginka 

• 2 tonnage cases for potentially exploitable magnetite IF: 

Likelihood Weathered IF Fresh IF Total IF 

Mid-case 34 Mt 240 Mt 274 Mt 

Max-case 135 Mt 425 Mt 560 Mt 

• 151 trench samples have dispatched to Mintek (South Africa) 

for geochemical and metallurgical analysis 

• 6 samples have been dispatched to Dr Chris Blake (Iron ore 

mineralogist) – results expected in December 

• Iron ore bearing mineralogy appears to be a combination of 

oxide-facies and silicate-facies minerals 

• The Iron Formation (IF)may exist adjacent to a laterally 

continuous with magnetic schist which may be responsible of 

overestimation of IF thickness 

2011 update continued 

• The fine grained mineralogy and weathered nature of the rock 

made it difficult to be certain of the mineralogy 

• If the Davis Tube Recovery result are successful and 

favourable external analysis of the achieved, then a core drilling 

programme of ~ 1500m is recommended 

• The IF exists within a thin sequence of garnet-bearing 

metasediments 

• The IF thickness varies from 0-100m and there is potential for 

+100m. Average thickness is between 30m and 50m 

Plans to March 2012 

• Receive the results from Mintek – December 2011 

• Drill 3 large diameter holes 

• Bench scale metallurgical tests on LD samples 

• End of the programme in March 2012 

• By March 2012, a decision on the next steps for the project 

will be made 

• Engage potential acquirers – both Arcelor Mittal and BHP 

have shown interest 


value assets


• Compilation of historical work 

• Airborne geophysical survey 

• Geophysical interpretation and 

review 

• Geological mapping and rock 

chip sampling 

• Drainage sampling for heavy 

mineral concentrate assessment 

• Trench mapping and sampling 

• Interim report of field work 

• XRF/XRD/SEM and compositing 

for DTR 

• Petrographic analysis of hand 

samples 

• Large diameter drilling campaign 

48 

 

Mar 11 

 

April May June July August September October November December January February Mar 12 

 

 

 

 

Completed To be completed Decision required 

 


value assets

Red Crescent Resources (RCR) and Sivas Copper 

Project, Turkey 

49 

Turkey – one of Europe’s largest economies with a mining industry taking off 

• Population – 73 million 

• 7 th largest economy in Europe ~ $1 trillion 

• Turkey is the fastest growing economy in Europe (8.9% Growth in 2010) 

• Government remains committed to joining the EU 

• Turkish mining industry set to grow with large unexplored resource base 

• Government encouraging FDI into mining with investment-friendly regulations 

• Turkey mining industry is currently characterised by numerous small family-owned 

businesses 

Value (US$ billion) 

12 

10 

8 

6 

4 

2 

0 

-2 

Turkish mining industry forecasts 

2010 2011 2012 2013 2014 

-1 

Value (US$b) Real growth % of GDP 

6 

5 

4 

3 

2 

1 

0 

%growth and %GDP 


value GROWTH

Red Crescent Resources (RCR) and Sivas Copper 

Project, Turkey 

50 


value GROWTH

SIVAS 

51 

Note 1 

• Phase 1 – Measured Resource of 20Mt of copper grading of 1% 

Phase 2 

• Phase 2 and 3 – deliver a Measured Resource of 100Mt of copper grading of 1% 


value GROWTH

SIVAS 

52 

Phased investment entry into Turkish copper 

Petmin acquired 10.1% interest in TX-listed Red Crescent 

Resources for CDN$4.64m 

Option on up to 37.5% in RCR’s Sivas Copper Project in 

Turkey for CDN$17m 

Initial exploration at Sivas confirmed extensive oxide and 

sulphide copper mineralisation – Petmin/RCR exploration 

started on 4 Nov 2011 

Potential for discovery of significant base metal deposits 

RCR has extensive zinc and manganese prospects in Turkey 


value GROWTH

SIVAS 

$ 1.40 

$ 1.20 

$ 1.00 

$ 0.80 

$ 0.60 

$ 0.40 

$ 0.20 

$ 0.00 

53 

Value of Copper Companies on a US$/lb basis 

Exploration 

Companies 

Potential Valuation Based on an EV/lb of Copper in the ground/production 

Production 

Companies 

Metric $/lb 

RCR 

(100Mt's @ 1%)* 

50 000tpa** 

Average exploration Co. 0.22 $486* 

Average Production Co. 0.80 $1 764** 

Exploration Range 0.04-0.54 $95m - $1187m* 

Production Range 0.21-1.17 $463m - $2579m** 

Real Option Valuation $822m 

Exploration company potential values are based on delineating 100Mt’s @ 

1% and production company values are based on a mine producing 50 000t 

of Copper per year. 

• Exploration figures were calculated using the copper equivalent 

resources for each company. This meant that if company’s had 

other minerals (i.e. Zn, Au, Co) found in their deposits, they were 

converted to a copper equivalent using forward prices for the 

applicable commodity. The economic value for each company was 

then divided by the total copper equivalent of their resources to 

determine the EV $ per lb in the ground 

• Production figures were calculated by using the copper equivalent 

for each mineral produced. The production of other commodities 

(i.e. Zn, Au, Co) was taken into account and a total copper 

equivalent was calculated using forward prices for the applicable 

commodity. The economic value for each company was then 

divided by the total copper equivalent of production assuming a 20 

year Life of Mine to determine the EV $ per lb in the ground. 

• Production LOM Assumption = 20 years 

• Forward prices ($/lb): 

• Copper = $3 ($6614/t) 

• Cobalt = $15 ($33069/t) 

Assumptions 

• Gold = $17 480 ($1115/oz) 


value assets

SIVAS 

• Drilling to commence of main zone using drill rig 1 

• Stream sampling to be completed 

• ALS analysis of first BH mineralized Listvenite 

• Deploy 2 nd drill rig 

• Preliminary mineralogy evaluation + lab scale Metallurgical test work 

• Secure Forestry and Operating Permits for Phase 2 

• New road construction to planned BH positions ~ 3km and Systematic 

sampling of Listvenite 

• Detailed structural mapping as recommended by EB/MR 

• Commence development of planned trenches and sampling 

• Obtain ALS results for MZ BH no2, and SEZ BH’s 1,2,3, 4 and 5 

• Mine minimum tonnages from Licenses 22013 (800 tons) and 18246 (500 

tons) 

• Submit requisite reports/documents for extension of Operating License no 

18246 for a further 10yrs 

• Grab and chip sampling of outcrops with known potential for Cu/Au/Ni 

mineralization 

• Initial mineralogy study on representative mineralized listvenite samples 

• Adit? 

54 

 

September 

 

 

October November December 

 

 

Completed To be completed 

To be 

completed in 

2012 


value assets

Petmin holds a 25% interest in Veremo pig iron project 

(potentially also titanium) 

55 

Veremo highlights 

Location • Stoffberg, Mpumalanga Province, South Africa 

Reserves & 

Resources 

Project Plan 

• Polymetallic ore body containing approximately 

43% Fe 

• 5 renewed New Order Prospecting Rights 

granted 

• Updated drilling programme has delineated a 

Measured Resource of 44.3Mt (previously 

11.6Mt) in the weathered zone of the ore body 

• Weathered material requires minimal preparation 

as this is more simple and does not demand 

technical development. This as opposed to a 

fresh zone which requires significant 

development in terms of sizing 

• Plant commissioning planned for 2013/4; 

• Potential for 1Mtpa pig iron 

• All capital financed by Framework Investments 

(Kermas) 

• Guaranteed dividend 2012-2014 of R65 million pa 

• November 2010 submitted mining rights 

application 

• Finalising metallurgical processing test work, 

including test work to produce titanium that may 

be used to produce synthetic rutile 

• Develop bankable feasibility study 

• May 2011 submitted application for EMPR 

Combined weathered 

resources (Dec 09) 

Measured (mt) 44.25 

Indicated (mt) 29.10 

Total (mt) 73.35 

Inferred (mt) 12.83 

Combined fresh resources 

(Dec 09) 

Measured (mt) 498.3 

Indicated (mt) 26.4 

Total (mt) 524.7 

Inferred (mt) 1.1 


56 

Veremo iron ore 

25% stake in Veremo iron ore project in Mpumalanga 

Magnetite with 42% Fe and 14% TiO 2 - suitable for high-quality pig iron production 

Mining right application submitted 

Production anticipated 2013-14 

Close to power, rail and water supply 

R50m capital expenditure to date 

Guaranteed dividend 2012-2014 of R65 million pa 


value GROWTH

Petmin value curve – Veremo 

57 


value GROWTH

Fully invested overview of Petmin 

58 

Red Crescent 

Resources 

Corporate 

investment in 

a junior mining 

company with 

assets in 

Turkey 

Iron Bird JV 

JV with 

Humming Bird 

Resources, a 

early stage 

Liberian Iron 

Ore Project 

Petmin 

US$ 17m US$ 4.6m US$ 2.0m US$ 25.0m ZAR 98m 

37.5% 

SIVAS 

Copper 

Project 

Ownership – 

37.5% Petmin 

37.5% RCR 

25% Local 

partners 

10.1% 50% 40%* 25% 0% 100% 

Canadian 

Iron Sands 

Pig Iron 

Project 

*Option for 

further 9.9% 

Copper Copper, Iron ore Iron sands 

zinc 

and pig 

iron 

Projects 

Operations 

Veremo 

Holdings 

(Pty) Ltd 

Pig Iron 

Project 

SamQuarz 

(Pty) Ltd 

SamQuarz 

Silica Mine 

Tendele Coal 

Mining (Pty) 

Ltd 

Somkhele 

Anthracite 

Mine 

Pig iron Silica Metallurgical 

anthracite 

SOLD to Ferro Atlantica – September 2011 

(awaiting Section 11) 

Petmin will receive ~ZAR229m after CGT 


value assets

Significant upside potential as at 30 June 2011 

59 

Petmin is trading at a discount to the directors’ valuation 

Market Capitalisation (09 November2011) ~R1.5bn 

Current share price = R2.59 

Somkhele R2.388bn (DCF @ 10% Real, net of debt) 

SamQuarz R0.231bn (Estimated after tax proceeds on sale) 

Veremo R0.496bn (Audited Valuation – FY11) 

Projects* R0.022bn (Cost of investments – FY11) 

Cash R0.228bn 

Corporate Office -R0.336bn (NPV over 20 years) 

TOTAL R3.029bn 

NAV per Share (with Corporate) R4.95 (612m shares fully diluted) 

*Huge optionality and value 

…Committed to Growth, dedicated to value

Prescient presentation - Petmin

Create successful ePaper yourself

Delete template?

Save as template?