Corporate Presentation - Heron Resources Limited
Corporate Presentation - Heron Resources Limited
Corporate Presentation - Heron Resources Limited
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<strong>Heron</strong> <strong>Resources</strong> <strong>Limited</strong><br />
<strong>Corporate</strong> <strong>Presentation</strong><br />
Diggers & Dealers Conference, Kalgoorlie<br />
5 August 2013<br />
ASX: HRR
Forward Looking and Compliance Statements<br />
The material used in this presentation is intended to be a summary of selected geological data, current and<br />
proposed activities, as well as resource estimates based on information available to <strong>Heron</strong> <strong>Resources</strong> at the<br />
time. It does not include all available information and should not be used in isolation as a basis to invest in<br />
<strong>Heron</strong> <strong>Resources</strong>. Any potential investor should refer to <strong>Heron</strong> <strong>Resources</strong>’ ASX releases and statutory reports<br />
before considering investing in the Company.<br />
This presentation includes information relating to a completed independent scoping study, completed<br />
independent resource estimate and a completed pre-feasibility study and includes “forward looking<br />
statements” which include, without limitation, estimates of potential nickel in concentrate production based on<br />
mineral resources and flow-sheets that are currently being evaluated. While the Company has a reasonable<br />
basis on which to express these estimates, any forward looking statement is subject to risk. Risks include,<br />
without limitation: nickel metal prices, foreign exchange rate movements, failure to meet project milestones,<br />
project funding capacity, concentrate off-take contracts and estimates of future capital and operating costs.<br />
The Company does not undertake to release publicly any revisions to forward looking statements included in<br />
this presentation to reflect events or results after the date of this presentation, except as may be required<br />
under applicable securities laws.<br />
The information in this presentation that is related to Exploration is based on information compiled by David<br />
von Perger who is a member of Australian Institute of Mining and Metallurgy. David von Perger is a full time<br />
employee of <strong>Heron</strong> <strong>Resources</strong> <strong>Limited</strong>. David von Perger has sufficient experience that is relevant to the style<br />
of mineralisation and type of deposit under consideration, and to the exploration activity being undertaking to<br />
qualify as Competent Person as defined in the 2004 Edition of the “Australasian Code for Reporting of<br />
Exploration Results, Mineral <strong>Resources</strong> and Ore Reserves”. David von Perger consents to the inclusion in this<br />
presentation of the matters based on his information in the form and context that it appears.<br />
Refer <strong>Heron</strong> <strong>Resources</strong> <strong>Limited</strong> 2012 Annual Report, page 64, Section 8.0, “Statement of Mineral <strong>Resources</strong>”<br />
and accompanying Attribution Statement.<br />
<strong>Heron</strong> <strong>Resources</strong> <strong>Limited</strong><br />
2
<strong>Corporate</strong> Snapshot<br />
Overview<br />
Listed 1996<br />
ASX Code<br />
HRR<br />
Shares on Issue 252.99M<br />
Cash (Jun-13 Qtr)<br />
$39.6M<br />
Listed Investments<br />
$3.3M<br />
Enterprise Valuation<br />
Shares 52 week range $0.120-0.235<br />
Share price (2-Aug) $0.145<br />
Market cap<br />
$36.7M<br />
Cash + Listed Investments<br />
$42.9M<br />
Director<br />
Craig Readhead<br />
Ian Buchhorn<br />
Stephen Dennis<br />
Non-Executive Chairman<br />
Managing Director<br />
Non-Executive Director<br />
Top Shareholders<br />
Ian Buchhorn 18.0%<br />
BHP 14.9%<br />
Vale Inco 12.8%<br />
MBM Chaos 8.2%<br />
Ningbo Shanshan Co Ltd 4.8%<br />
<strong>Heron</strong> <strong>Resources</strong> <strong>Limited</strong><br />
3
Key Asset – our Cash & Minerals Portfolio<br />
• Cash and Investments<br />
– $39.6m cash, $3.3m listed investments (asset value equivalent to $0.17 per share)<br />
– Low overheads, generate value through exploration and project “first mover” plays<br />
• Exploration (<strong>Heron</strong> 100%)<br />
– Lachlan Fold Belt, Cadia-style copper-gold, Mallee Bull-style copper, Avoca Tank-style copper-gold<br />
– Albany Fraser Mobile Zone, Nova/Bollinger-style nickel-copper-PGM<br />
– KNP Gold Projects (Big Four, Siberia South), shear-hosted gold<br />
• Kalgoorlie Nickel Project (<strong>Heron</strong> 100%)<br />
– Nickel Laterite Mineral Resource, 727Mt @ 0.72% nickel & 0.044% cobalt, a world-class resource<br />
– PFS Completed by Vale Inco 2009, focus on HPAL, A$34.5m expenditure, Vale Inco earned no equity<br />
– Beneficiated nickel Leach Feed Grade of 1.2 – 1.5% nickel<br />
– Now reviewing alternate processing:<br />
• Simulus Engineers (sulphuric acid process) – test work on three KNP material types commenced<br />
• Direct Nickel (nitric acid process) – finalizing test work ahead of updating scoping study<br />
• Discussions with other groups assessing potential process route optimizations (coordinated by Simulus Engineers)<br />
• Yerilla Nickel-Cobalt Project (<strong>Heron</strong> 100%, Shanshan right to earn 70%)<br />
– Nickel Laterite Mineral Resource, 135Mt @ 0.73% nickel & 0.045% cobalt<br />
– <strong>Heron</strong> completed PFS 2008, farmed out to Shanshan 2009, studies continue through Simulus Engineers<br />
<strong>Heron</strong> <strong>Resources</strong> <strong>Limited</strong><br />
4
Key Asset – our People<br />
• Board – Non Executive<br />
– Craig Readhead (Non Executive Chairman) corporate and mining lawyer<br />
– Stephen Dennis (Non Executive Director) project management, commercial<br />
• Board – Executive<br />
– Ian Buchhorn (Managing Director) mineral economist, mine geologist<br />
• Senior Management<br />
– Charlie Kempson (GM Business Development) engineering, finance<br />
– David von Perger (Exploration Manager) exploration geologist<br />
– Bryan Horan (Company Secretary and CFO) accounting<br />
• Geologists<br />
– Steven Jones (Senior Geologist) resource geologist, mineral economist<br />
– Lorne McCrum (Project Geologist) exploration geologist<br />
– Kathleen Patrick (Administrative Geologist) statutory compliance geologist<br />
• Consultants<br />
– Legal, database and geophysics<br />
Executive Team completes most projects in-house, including drilling 14,165 metres in 608 holes<br />
during 2012, hence <strong>Heron</strong>’s low burn-rate and cash preservation<br />
<strong>Heron</strong> <strong>Resources</strong> <strong>Limited</strong><br />
5
Key Asset – our Track Record<br />
• On sell-side, 17 years of sustained Shareholder value creation, whilst advancing the KNP<br />
– 1996 <strong>Heron</strong> listed on the ASX raising $8M, portfolio of gold and nickel sulphide targets<br />
– 1998 Large high-grade nickel laterite discoveries at Goongarrie South<br />
– 1999 Takeover bid from Centaur – rejected by <strong>Heron</strong> Shareholders<br />
– 2002 Spun out Avoca <strong>Resources</strong> Ltd, 1 for 5 in specie distribution ($0.67 per HRR at AVO merger)<br />
– 2003 Spun out Pioneer Nickel <strong>Limited</strong><br />
– 2005 JV with Vale Inco, then BHP responded by buying out <strong>Heron</strong>’s second largest Shareholder<br />
– 2006 Spun out Rubicon <strong>Resources</strong> <strong>Limited</strong> and Epsilon Energy Ltd (later re-named Azimuth)<br />
– 2006 Back-door listing of iron-ore assets through Polaris Metals <strong>Limited</strong><br />
– 2006 Nickel laterite discoveries at Jump up Dam, implemented Heap Leach PFS<br />
– 2007 Last major capital raisings, at $1.15 per share (to BHP and Vale Inco)<br />
– 2009 Polaris Metals taken over by Mineral <strong>Resources</strong>, netting <strong>Heron</strong> $38M<br />
– 2009 Option on A1 Gold Mine, <strong>Heron</strong> commence gold mine decline development<br />
– 2010 KNP gold tenements sold to Metaliko <strong>Resources</strong> <strong>Limited</strong> netting $2M cash and shares<br />
– 2011 Acquisition of Lachlan copper-gold tenements in NSW, now main exploration focus<br />
– 2012 A1 Gold Mine sold, A1 Consolidated Ltd lists with <strong>Heron</strong> holding 19%<br />
– 2013 Advancing the KNP through Direct Nickel and Simulus Engineers piloting studies<br />
<strong>Heron</strong> <strong>Resources</strong> <strong>Limited</strong><br />
6
Strategy – Business Development<br />
• Preferred Investments<br />
– Production mining operation<br />
• The operation benefits from <strong>Heron</strong>’s cash injection, facilitates a step change in the operation<br />
– Near-production mining operation<br />
• <strong>Heron</strong> facilitates the equity funding component of the project funding package<br />
– Feasibility stage project<br />
• <strong>Heron</strong> funds the resource drill-out and Feasibility Studies to facilitate future project funding<br />
• Preferred Locations and Commodities<br />
– WA – gold, nickel, base metals<br />
• <strong>Heron</strong> has good operational experience in the jurisdiction, may complement the KNP<br />
– NSW – copper-gold, base metals<br />
• Complements <strong>Heron</strong>’s extensive Lachlan Fold Belt exploration holding<br />
– International – bulk commodities<br />
• Absolutely essential that common-user infrastructure is available, and minimal sovereign risk<br />
• Targeting east and north Asia markets (seek projects in Australia or west coast North America)<br />
M&A is a prime focus for the Company, as a means to fast-track the acquisition and<br />
development of mineral production cash-flow<br />
<strong>Heron</strong> <strong>Resources</strong> <strong>Limited</strong><br />
7
Strategy – Exploration<br />
<strong>Heron</strong> Exploration Targets (all 100% <strong>Heron</strong> ownership):<br />
• Copper-Gold<br />
– Widely traded commodities, good mix in that strong global economic activity favours copper,<br />
economic uncertainty favours gold<br />
– Premium exploration belts available in Australia, being the Lachlan Fold Belt NSW (Cadia, North<br />
Parkes porphyry) and Cloncurry NW Queensland (Ernest Henry IOCG)<br />
– <strong>Heron</strong> projects acquired through tenement applications, first require identified drill targets in prior<br />
exploration review<br />
• Nickel-Copper-PGM Sulphides<br />
• Gold<br />
– Targeting the Proterozoic mobile belts that flank the Yilgarn Archaean greenstone belts, where<br />
<strong>Heron</strong> has an existing exploration presence<br />
– Commodities complement the KNP nickel laterite<br />
– Current active exploration at Bedonia (EM/geochem anomaly for drill testing)<br />
– Focus is the Kalgoorlie province greenstones, systematically evaluating existing KNP tenure<br />
– Gold exploration alone maintains the KNP in good standing, preserves the KNP asset value<br />
Divested former Exploration Projects are the source of <strong>Heron</strong>’s current robust cash position<br />
<strong>Heron</strong> <strong>Resources</strong> <strong>Limited</strong><br />
8
Exploration – Lachlan Copper-Gold 100% <strong>Heron</strong><br />
• Mt Allen & Osterley Projects, NSW<br />
– <strong>Heron</strong>’s Mt Allen EL adjoins and immediately<br />
south of the 2012 Mallee Bull copper/gold<br />
discovery (by Peel Mining)<br />
– Mallee Bull copper discovery and Mt Allen :<br />
• both are southern Cobar Supergroup host<br />
rocks, basin margin rift structural settings<br />
• <strong>Heron</strong> holds over 1,200km 2 in Cobar<br />
Superbasin under tenure along strike of Mallee<br />
Bull copper pipe discovery and McKinnons<br />
epithermal gold deposit<br />
– Historical gold workings at Mt Allen and<br />
Osterley sampled in <strong>Heron</strong> field<br />
reconnaissance, are the exploration focus:<br />
• Initial Peel Mallee Bull exploration focus was on<br />
Four Mile goldfield, then ground EM defined<br />
deep conductor, RC drill follow up discovered<br />
high grade copper<br />
– Review of historical Mt Allen and Osterley<br />
data identified “walk-up” gold and copper<br />
targets<br />
• Surface gold veins, interpret as pathfinder to<br />
deeper base metal systems (as at Mallee Bull)<br />
• Four target areas for <strong>Heron</strong> soil auger geochem<br />
<strong>Heron</strong> <strong>Resources</strong> <strong>Limited</strong><br />
9
Exploration – Lachlan Copper-Gold 100% <strong>Heron</strong><br />
• Osterley Project, NSW<br />
– 25km south of Cobar<br />
– Devonian Upper Amphitheatre Group and<br />
Biddabirra sediments<br />
– The Thule Fault is a major fault and has been<br />
the focus of previous exploration<br />
– Recent ground EM by <strong>Heron</strong> has identified a<br />
subtle conductor to the SE of old Geopeko<br />
gossan<br />
– Anomaly on the western edge of a discrete<br />
magnetic low 500m east of Thule Fault<br />
– EM anomaly may be related directly to bedrock<br />
mineralisation or represent a splay structure<br />
that has localised mineralisation<br />
– EM anomaly under deeper soil cover, soil auger<br />
program to provide geochemical coverage, prior<br />
to possible drill testing<br />
Osterley Project, aeromagnetic image showing EM<br />
anomaly and magnetic low (alteration?) target area<br />
<strong>Heron</strong> <strong>Resources</strong> <strong>Limited</strong><br />
10
Exploration – Lachlan Copper-Gold 100% <strong>Heron</strong><br />
• Girilambone Project, NSW<br />
– Along strike and immediately adjoining 2011 coppercopper/gold<br />
discoveries by Straits <strong>Resources</strong> (ASX:SRQ)<br />
– <strong>Heron</strong> drilled four targets based on geology, magnetic<br />
and EM surveys<br />
– Up to 1,080ppm copper returned in the drilling<br />
associated with minor chalcopyrite, <strong>Heron</strong> to follow up<br />
– Recent access gained to the Coolabah target directly<br />
along strike from the Straits Avoca Tank discovery –<br />
copper soil anomaly defined in this area<br />
– Follow-up with targeted RAB programs to map<br />
geology/alteration and target mineralisation<br />
Left: RC drilling November 2012<br />
Below: Typical QMH host (quartzmagnetite-hematite),<br />
with pyrite<br />
<strong>Heron</strong> <strong>Resources</strong> <strong>Limited</strong><br />
11
Exploration – Lachlan Copper-Gold 100% <strong>Heron</strong><br />
• Gundagai Project, NSW<br />
– Big Ben Prospect, gold<br />
• Shear zone 10-50m wide, 500m strike quartzlimonite-pyrolusite<br />
stockworks hosted by white<br />
intensely phyllic altered porphyry dyke<br />
• Recent <strong>Heron</strong> drilling:<br />
– 20m @ 1.58g/t gold from 27m<br />
includes 1m @ 23.7g/t gold<br />
– 8m @ 1.07g/t gold from 25m<br />
– 1m @ 5.32g/t gold from 81m<br />
– 4m @ 1.04g/t gold from 25m<br />
Coarse gold panned in several intervals<br />
– Califat/Snowball Prospects, copper/gold<br />
• VMS-related, massive sulphide lodes, mined<br />
historically<br />
• <strong>Heron</strong> rock-chip samples: 10.2 - 84.3g/t gold with up<br />
to 4.4% copper<br />
• Ground-based EM survey commenced in mid July to<br />
generate drill targets<br />
– Basin Creek Prospect, copper<br />
• High grade copper in historic drilling, peak 4.5m @<br />
18% copper<br />
• <strong>Heron</strong> is planning ground-based EM with drill followup<br />
to test any conductors<br />
<strong>Heron</strong> <strong>Resources</strong> <strong>Limited</strong><br />
12
Exploration – Lachlan Copper-Gold 100% <strong>Heron</strong><br />
• Sussex Project, NSW<br />
– 50km east of Cobar<br />
– Large, complex magnetic high<br />
within Ordovician Girilambone<br />
meta-sediments<br />
– Lies along the north-west<br />
extension of the Gilmore Suture,<br />
major mineralized crustal fault<br />
– 10km NE of the Mt Boppy Gold<br />
mine<br />
– Reconnaissance auger sampling<br />
has defined a large staellite<br />
copper/zinc/nickel anomaly and<br />
a another more discrete<br />
copper/gold /arsenic anomaly<br />
– Follow-up infill and extensional<br />
soil auger sampling currently<br />
underway.<br />
Sussex Project, major regional aeromagnetic<br />
anomaly on Gilmore Suture, <strong>Heron</strong> soil<br />
auger anomalies, follow-up current<br />
<strong>Heron</strong> <strong>Resources</strong> <strong>Limited</strong><br />
13
Exploration – Northwest Queensland 100% <strong>Heron</strong><br />
• Cloncurry Copper Project, Qld<br />
– <strong>Heron</strong> applications for 15 tenements<br />
covering 1,717km 2<br />
– IOCG alteration styles confirmed, magnetic<br />
anomalism, silicification, REE anomalism,<br />
basis for applications<br />
– Tenement application focus on Proterozoic<br />
copper-polymetallic mining centres near Mt<br />
Cuthbert, Mammoth East, Ernest Henry,<br />
Eloise East and Maramungee<br />
– District-scale reconnaissance sampling has<br />
been completed by <strong>Heron</strong>, confirmed largescale<br />
alteration systems<br />
– Target generation studies completed,<br />
extensive areas defined for soil geochemical<br />
survey<br />
– Mammoth East Prospect, previous<br />
reconnaissance drilling intersected high-level<br />
quartz veining with strong gold, copper and<br />
lead anomalism, drill-ready for <strong>Heron</strong><br />
<strong>Heron</strong> <strong>Resources</strong> <strong>Limited</strong><br />
14
Exploration – Nova-Style Nickel-Copper 100% <strong>Heron</strong><br />
• Albany Fraser Mobile Zone, WA<br />
– Bedonia Nickel Project<br />
• Magnetic and ground EM<br />
anomalies identified<br />
• Bedrock conductors at margin of<br />
mafic intrusive bodies<br />
• <strong>Heron</strong> auger nickel and copper<br />
anomalies<br />
• Tenements also host <strong>Heron</strong>’s<br />
coal occurrences in palaeochannels,<br />
1999 identified 650Mt<br />
coal Exploration Target<br />
– Rocky Gully Nickel Project<br />
• Strong Ni-Cu-PGM anomalism in<br />
laterite identified in previous<br />
<strong>Heron</strong> drilling<br />
• Mafic/ultramafic intrusive plugs<br />
identified<br />
• <strong>Heron</strong> drilled in 2009, data reinterpreted<br />
on basis of Sirius<br />
Nova-Bollinger discovery<br />
• Seeking JV partner to progress,<br />
while <strong>Heron</strong> focus remains on<br />
Bedonia<br />
<strong>Heron</strong> <strong>Resources</strong> <strong>Limited</strong><br />
15
Exploration – Nova-Style Nickel-Copper 100% <strong>Heron</strong><br />
• Bedonia Nickel-Copper-PGM Project<br />
– 60km west of Nova-Bollinger Ni-Cu discovery<br />
(ASX:SIR)<br />
– Coincident ground EM and magnetic anomalies<br />
– Coincident nickel and copper soil auger<br />
anomalies<br />
– Drilling expected to commence in August<br />
<strong>Heron</strong> <strong>Resources</strong> <strong>Limited</strong><br />
16
Exploration – Nova-Style Nickel-Copper 100% <strong>Heron</strong><br />
• Rocky Gully – Nickel-Copper Project<br />
– 85km NW of Albany<br />
– Strong Ni-Cu-Co in laterite (this is<br />
uniquely diagnostic at Nova discovery)<br />
– Ni-Cu sulphides identified in <strong>Heron</strong> RC<br />
chips (again diagnostic of Nova)<br />
– Ground-based EM completed<br />
– Seeking a JV partner<br />
<strong>Heron</strong> <strong>Resources</strong> <strong>Limited</strong><br />
17
Exploration–Eastern Goldfields Gold Targets 100% <strong>Heron</strong><br />
Targets mainly on KNP Tenure<br />
• Big Four Gold Project, WA (KNP)<br />
– Drilling beneath old gold workings targeting<br />
porphyry units within Siberia Ultramafic<br />
– Discussions with local miners underway,<br />
reviewing tribute mining to open up ore<br />
• Siberia South Gold Project, WA (KNP)<br />
– Strong gold-in-soil results along strike from<br />
old workings<br />
– RAB drilling recently completed - visual<br />
mineralization, results pending<br />
• Horse Rocks Gold, WA (non KNP)<br />
– Significant broad zone of gold anomalism in<br />
historical drilling<br />
– RAB drilling follow-up planned<br />
Left:<br />
panned<br />
gold from<br />
Big Four RC<br />
drilling<br />
samples<br />
<strong>Heron</strong> <strong>Resources</strong> <strong>Limited</strong><br />
18
Exploration – EGF Gold Targets 100% <strong>Heron</strong><br />
• Big Four Gold Project – <strong>Heron</strong> highgrade<br />
gold intercepts<br />
– 6m @ 5.28g/t gold from 53m<br />
– 2m @ 33.6g/t gold from 108m<br />
– 10m @ 4.3g/t gold from 32m<br />
– 15m @ 2.27g/t gold from 28m<br />
– 9m @ 4.69g/t gold from 14m<br />
– 3m @ 10.47g/t gold from 44m<br />
– 4m @ 20.14g/t gold from 108m<br />
– 6m @ 8.58g/t gold from 125m<br />
– 8m @ 5.93g/t gold from 78m<br />
<strong>Heron</strong> <strong>Resources</strong> <strong>Limited</strong><br />
19
Exploration – Mt Zephyr Gold/Base-Metals 100% <strong>Heron</strong><br />
• Contiguous greenstone tenure<br />
– 200km 2 , 80km north northeast of<br />
Leonora<br />
– Distal VMS system over 5km of strike,<br />
deeper drilling required<br />
• Paul’s Find Prospect (pending tenure)<br />
– Rich coarse gold in laminated quartz<br />
vein identified by prospector (>30oz<br />
gold nuggets recovered)<br />
• Gale Gold Prospect<br />
– Newcrest drilled and identified broad<br />
low grade gold and copper, drilling<br />
planned by <strong>Heron</strong><br />
• Zephyr North Prospect<br />
– Deep <strong>Heron</strong> diamond hole intersected<br />
magnetite skarn with minor copper<br />
Above: magnetic image with<br />
<strong>Heron</strong> tenements and key<br />
prospects<br />
Left: Paul’s Find – some of the<br />
gold recovered by prospector<br />
<strong>Heron</strong> <strong>Resources</strong> <strong>Limited</strong><br />
20
Strategy – Kalgoorlie Nickel Project 100% <strong>Heron</strong><br />
• KNP Option Value<br />
– A world-class mineral resource, PFS completed by the World’s leading nickel company in Vale Inco,<br />
~$100 billion in-ground value – such an asset in a $37M market cap company such as <strong>Heron</strong><br />
represents significant option value<br />
– KNP Option Value will continue to be preserved by <strong>Heron</strong>, through targeted development studies<br />
• High Pressure Acid Leach (HPAL) Technology<br />
– HPAL is the proven technology for nickel laterite processing, so is bankable<br />
– Any future HPAL development of the KNP by <strong>Heron</strong> will unequivocally be as a partnership, most likely<br />
with a downstream Stainless Steel Materials end-user<br />
– <strong>Heron</strong> strategy is to optimize existing industry-accepted laterite technologies and apply to the KNP<br />
• Technology Partnerships and Alternatives<br />
<strong>Heron</strong> aiming for lower capex cost development of segments of the KNP, facilitated by <strong>Heron</strong> and a<br />
specialist technology partner<br />
– Simulus Engineering<br />
– Direct Nickel<br />
– Heap Leach<br />
– Iron Nickel Segregation Roast<br />
In 2007 at the end of the “mid 2000s Nickel Cycle”, the market value of <strong>Heron</strong> (essentially<br />
the KNP value) was up to $350 million<br />
<strong>Heron</strong> <strong>Resources</strong> <strong>Limited</strong><br />
21
Kalgoorlie Nickel Project – Feasibility<br />
• Excellent Resource and Infrastructure<br />
– 727Mt grading 0.72% nickel and 0.044% cobalt (at<br />
0.5% Ni cog), JORC 2004 Mineral Resource<br />
– Screen beneficiated feed grade 1.2-1.5% nickel<br />
– Located within 100km radius of Kalgoorlie<br />
– All gas, road, rail, port infrastructure present<br />
– Ravensthorpe HPAL nickel laterite technically<br />
successful re-commission, industry confidence for<br />
HPAL<br />
• Vale Inco completed PFS in 2009<br />
– $34.5 million expenditure, immensely valuable<br />
Feasibility Study data set;<br />
• >95,000 metres drilled, deliver JORC resource<br />
• Metallurgical assessment HPAL (-Heap Leach)<br />
– 2.5Mtpa beneficiated leach feed, up to 36Ktpa<br />
nickel production over a 34 year mine-life<br />
– Opex US$4.42/lb of nickel (after cobalt credits)<br />
– Pre-production capex US$1.5 billion (in 2009)<br />
• Vale Inco PFS 2009 commentary:<br />
“one of the most prospective nickel laterite tenement<br />
packages in the world”<br />
<strong>Heron</strong> <strong>Resources</strong> <strong>Limited</strong><br />
22
Kalgoorlie Nickel Project – Screen Beneficiation<br />
• Project Attributes<br />
– Screen beneficiation of the nickel laterite is what makes these projects<br />
work (screening is both low capex and opex, “project-maker”)<br />
– Flow-sheet utilised successfully at both Ravensthorpe and previously at<br />
Cawse<br />
– Screen out hard barren silica material, increases nickel leach feed grade<br />
by a factor of 1.5 – 2.0 times<br />
Screened rejects<br />
Silica fragments 60% of output<br />
Reject grade 0.3% Ni<br />
Scrubbed slurry<br />
into pilot plant trommel<br />
screen deck<br />
Run-of-mine siliceous ore,<br />
yellow-brown limonite and coarse<br />
silica<br />
Head grade<br />
0.7 - 0.8% Ni<br />
Screened slurry<br />
Limonite 40% of output<br />
Leach Feed Grade<br />
1.2 - 1.5% Ni<br />
<strong>Heron</strong> <strong>Resources</strong> <strong>Limited</strong><br />
23
Kalgoorlie Nickel Project – Simulus Engineers<br />
• Simulus Engineers<br />
– Simulus will trial its patented process (Carbon<br />
Friendly Nickel Production - CFNP) for the<br />
recovery of sulphuric acid and other reagents in<br />
nickel laterite hydrometallurgical processing<br />
– Recovery of reagents in nickel laterite<br />
processing has potential to generate substantial<br />
cost savings in plant construction and operation<br />
– <strong>Heron</strong> has provided three bulk KNP and Yerilla<br />
laterite samples to Simulus in Kewdale,<br />
Western Australia for the initial test work<br />
– The test work will generate inputs for a Scoping<br />
Study to estimate the potential benefits which<br />
may be achieved through applying the Simulus<br />
technology to the KNP at a commercial scale<br />
– If successful, the initial test work and Scoping<br />
Study is intended to lead into a closer<br />
partnership between <strong>Heron</strong> and Simulus<br />
through CFNP under which the technology will<br />
be further developed<br />
Part of equipment being used by Simulus at their Kewdale<br />
facility – Image courtesy Simulus Laboratories<br />
<strong>Heron</strong> <strong>Resources</strong> <strong>Limited</strong><br />
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Kalgoorlie Nickel Project – Direct Nickel<br />
• Direct Nickel<br />
– Emerging hydrometallurgical process for<br />
extracting nickel from laterite deposits<br />
– Substantially lower capex and opex<br />
compared with existing HPAL operations<br />
– The process is capable of treating the full<br />
laterite profile, from limonitic to saprolitic<br />
ores using a single flowsheet<br />
– Five samples of KNP-Highway goethite and<br />
goethite-silica ore have been tested in both<br />
fresh and saline process water<br />
– Extraction of nickel via the Direct Nickel<br />
process has mostly been 96-99%<br />
– A new round of testwork commissioned,<br />
aimed at identifying where the chlorine<br />
reports post leaching<br />
– Next stage will be updated Scoping Study<br />
– Development Target<br />
50Mt at 1.2% nickel leach feed, 3Mtpa plant<br />
32Ktpa nickel, capex around A$1 billion<br />
Image courtesy Direct Nickel, pilot plant at CSIRO, South Perth<br />
• Direct Nickel uses nitric acid to leach nickel laterite<br />
ores<br />
• Unique feature is ability to recover ~95% of reagents,<br />
thus reducing operating costs<br />
<strong>Heron</strong> <strong>Resources</strong> <strong>Limited</strong><br />
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Kalgoorlie Nickel Project – Heap Leach Review<br />
• Bulong Heap Leach Study<br />
– Conceptual study completed by <strong>Heron</strong>(consultant ex heap<br />
leach project manager from a northern Goldfields nickel<br />
laterite operation)<br />
– <strong>Heron</strong> Bulong is site for leaching operation, assuming:<br />
• High grade saprolite Boulder Block pit, >2% nickel<br />
• Minable material estimated at 20Mt @ 1.2% nickel<br />
• 600,000tpa local acid supply (KNS and local roaster)<br />
• 1.3Mtpa ROM feed at 70% nickel recovery<br />
• Mixed sulphide produced ,suitable for BHP Kwinana<br />
• 15 year mine life<br />
– High level economics:<br />
• Capex A$127M (+/- 50%)<br />
• Opex US$ 3.64/lb nickel<br />
– Study demonstrates economic potential at Boulder Block<br />
– Discussions ongoing with BHP regarding acid supply<br />
– Discussions current with local owners of site<br />
infrastructure and additional resources<br />
– Benefits from the current Simulus study<br />
Schematic heap-leach layout from <strong>Heron</strong>’s<br />
Jump Up Dam 2008 PFS study<br />
<strong>Heron</strong> <strong>Resources</strong> <strong>Limited</strong><br />
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Kalgoorlie Nickel Project – Iron Nickel Studies<br />
• Iron-Nickel Sinter<br />
– The high iron content of the goethitedominated<br />
KNP nickel laterite has long been<br />
recognised<br />
– Goongarrie South – 2011 estimated high<br />
iron mineral resource 48.5Mt @ 41% iron<br />
and 0.65% nickel, with 7.6% alumina at 35%<br />
iron cut-off<br />
– Bench scale roasting tests at Oretest, Perth,<br />
feed grade around 50% iron, 1.2% nickel<br />
Generated a magnetic separated sinter<br />
product with up to:<br />
• 73% iron<br />
• 3.7% nickel<br />
• 49.5% mass recovery<br />
– Next step, evaluate potential market<br />
acceptance of the product<br />
Goethite-rich nickel laterite<br />
within old chrysoprase pit south of Goongarrie South<br />
<strong>Heron</strong> <strong>Resources</strong> <strong>Limited</strong><br />
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Investment Summary<br />
• Strong cash position<br />
– $39.6M cash, $3.3M in listed equity investments – company not constrained when opportunities arise<br />
– $0.17 per Share cash + shares asset value, robust proposition together with the high quality exploration assets<br />
– Compact management team, low overheads, low burn-rate, high skill sets, first-mover track-record<br />
• Business Development<br />
– Focus is M&A where <strong>Heron</strong> cash can add value to a target company or asset<br />
– Priority targets: WA – gold-base metals, NSW – copper-gold-base metals, International – bulk commodities<br />
• Exploration – excellent portfolio, well funded drill-focussed exploration<br />
– Copper-gold (Cadia/Mallee Bull/Avoca Tank target styles), Lachlan Fold Belt central NSW, 100% owned –<br />
aggressive phase of exploration currently underway, continual target generation, expeditious drill testing<br />
– Nickel-copper (Nova-Bollnger style), Albany Fraser Mobile Zone southwest WA, 100% owned – initial drilling<br />
program expected to commence in August<br />
– Active drilling, 14,165 metres in 608 holes during 2012, similarly aggressive drilling in 2013<br />
– <strong>Heron</strong>’s strong cash backing limits any downside exploration risk<br />
• Projects<br />
– Kalgoorlie Nickel Project, 100% ownership, one of the world’s largest undeveloped nickel laterites, ~$100<br />
billion in-ground metal value, PFS completed, enormous medium to long-term option value<br />
– <strong>Heron</strong> is investing in technologies with the potential to enhance the value of the KNP<br />
<strong>Heron</strong> <strong>Resources</strong> <strong>Limited</strong><br />
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www.heronresources.com.au<br />
Contact:<br />
Ian Buchhorn<br />
Managing Director<br />
1/37 Ord Street<br />
West Perth WA 6005<br />
T: +61 892 154 440<br />
M:+61 418 831 624<br />
ibuchhorn@heronresourcces.com.au<br />
<strong>Heron</strong> <strong>Resources</strong> <strong>Limited</strong><br />
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