Prescient presentation - Petmin

Recommendations

Info

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 …Committed …A PLATFORM to growth, FOR dedicated GROWTH to value
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. …Committed …A PLATFORM to growth, FOR dedicated GROWTH to value
Page 1 and 2: 1 Prescient Presentation The upside
Page 3 and 4: 3 Disclaimer No representation, war
Page 5 and 6: 5 Petmin’s share price outperform
Page 7 and 8: Current overview of Petmin 7 Red Cr
Page 9 and 10: 9 Significant upside potential as a
Page 11 and 12: Petmin Board and management governa
Page 13 and 14: Urbanisation and infrastructure Los
Page 15 and 16: Urbanisation has a double effect on
Page 17 and 18: The effect of urbanisation and infr
Page 19 and 20: Our strategy is based on key pillar
Page 21 and 22: Petmin valuation curve - Huge optio
Page 23 and 24: Investor presentation - 14 November
Page 25 and 26: Somkhele anthracite mine 25 More th
Page 27 and 28: Somkhele anthracite mine 27 …A ST
Page 29 and 30: 29 Performance Summary 2010 and 201
Page 31 and 32: Sale of SamQuarz silica mine 31 Pet
Page 33 and 34: Comprehensive and aggressive Petmin
Page 35 and 36: NAIC 35 …A STRONG …Committed PL
Page 37: NAIC 37 Executive Summary • Commo
Page 41 and 42: NAIC 41 Example of Drill Core Recon
Page 43 and 44: Iron Ore - Mount Ginka, Liberia 43
Page 49 and 50: Red Crescent Resources (RCR) and Si
Page 51 and 52: SIVAS 51 Note 1 • Phase 1 - Measu
Page 53 and 54: SIVAS $ 1.40 $ 1.20 $ 1.00 $ 0.80 $
Page 55 and 56: Petmin holds a 25% interest in Vere
Page 57 and 58: Petmin value curve - Veremo 57 …A
Page 59: Significant upside potential as at

Prescient presentation - Petmin

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?