Objective Capital Global Mining Investment Conference - Tungsten: Mark Fields

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London Global Mining Investment Conference Stationers Hall, London Wednesday 30 th September 2009 www.ObjectiveCapitalConferences.com 16.25 Tungsten Mark Fields President & CEO Geodex Minerals

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Objective Capital Global Mining Investment Conference Tungsten - The Commodity Super Cycle 30 Sep 2009 by Mark Fields, Geodex Minerals

Transcript of Objective Capital Global Mining Investment Conference - Tungsten: Mark Fields

Page 1: Objective Capital Global Mining Investment Conference - Tungsten: Mark Fields

London Global Mining Investment Conference

Stationers Hall, London

Wednesday 30th September 2009

www.ObjectiveCapitalConferences.com

16.25 Tungsten

Mark FieldsPresident & CEOGeodex Minerals

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TUNGSTEN

The Commodity Super Cycle

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DISCLAIMER

This presentation by Geodex Minerals Ltd. (the “Company”) contains forward-looking statements, including, in particular, statements about the Company’s plans, strategies and prospects. These statements have been based on the Company’s current assumptions, expectations and projections about future events. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, the Company can give no assurance that these expectations will prove to be correct or that results anticipated in the forward-looking statements will be achieved. These forward-looking statements include risks and uncertainties. These risks and uncertainties include, among other things, market conditions, industry uncertainty and other factors.

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Jan-04 Jun-04 Nov-04 Apr-05 Sep-05 Feb-06 Jul-06 Dec-06 May-07 Oct-07 Mar-08 Aug-08 Jan-09 Jun-090

50

100

150

200

250

300

350

MID PRICE

TUNGSTEN PRICE

*APT = Ammonium Paratungstate 1mtu =10kg

Source: Metal Bulletin

Tungsten APT* European free market $ per mtu

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TUNGSTEN PRIMARY USES

A Unique Metal Hardest of all metals Highest Melting Point Lowest Expansion Coefficient High Thermal and Electrical Conductivity

59%16%

17%

8%

Global Tungsten UsesCemented Carbide Mill ProductsSteels/ Alloys Other Applications

Source: ITIA - 2009

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CEMENTED CARBIDES

Hard & Resistant: Wear Parts

Woodcutting

Mining and Construction Tooling – Turning, Milling, Drilling

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CEMENTED CARBIDES CON’T

Source: ITIA - 2009

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STEELS/ALLOYS

Tool Steels

Heat Resisting Steel and Cast Steel

High Speed Steel

Stainless Steel & Valve Steels

Sea Water Resistant

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STEELS/ALLOYS

Diamond Tools

Tungsten Alloys

Wear Protection

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MILL PRODUCTS

Incandescent LampsFluorescent Lamps & Tubes

High Intensity discharge LampsLamps & Tungsten Wires

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Chips

LCD’s

High Performance Switches

Electrodes

MILL PRODUCTS

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OTHER APPLICATIONS

Sports & Leisure Time

BiologyJewellery

Chemical Products

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RESEARCH AND DEVELOPMENT

New Technologies• Deep Drilling• Fossil Power Generation• Thermonuclear Energy• Chip Technology

Tungsten & the Environment• Catalyst to clean exhaust fumes or products from toxic compounds• Saves fossil fuels through energy saving devices• As a substitute for toxic lead and chromium

Medical Industry • Micro Machining Brain Implant Needle Arrays

Chip Technology

Directional Drilling

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ANNUAL WORLD TUNGSTEN PRODUCTION

Source: ITIA - 2009

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China41,000

Russia 3,200

Canada

2,700

Other Coun-tries7,600

Source: US Geological Survey - 2008

WORLD MINE PRODUCTION

World Production 2008

tonnes of tungsten

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WORLD TUNGSTEN RESERVES

China60%

Canada9%

Russia8%

USA5%

South Amer-

ica3%

Others15%

Source: ITIA - 20093 million tonnes, W content

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CHINA FACTORS

China has dominated tungsten markets for the past 20 years, and currently supplies over 75% of world’s tungsten.

China has recently shifted from an exporter to a net importer with an increasing focus on producing downstream tungsten products.

China now prohibits tungsten exploration by foreign companies.

Tungsten prices have increased as China’s expansion and infrastructure build-out surpassed tungsten mine capacity.

Geodex has opportunity to position itself as a key supplier in world tungsten industry.

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CHINA FACTORS CON’T

1991 - Tungsten listed as one of the ‘Protective Resources”

2001 - Policy of Qualified Tungsten Exporter and Export Supplies

2005 - Export rebate reduced from 13% to 8%

2006 - Export rebate further reduced and cancelled

2007 - Export duty introduced at 5%

2008 - Export duty increased to 10%

2009 - Export reduced to 5%

Source: China Minmetals Nonferrous Metals Co., Ltd - 2009

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WORLD’S 10 LARGEST TUNGSTEN DEPOSITS

Deposit Name Location Reserve ‘000t W

Verkhne-Kayrakty Kazakhstan 872

Mactung Yukon, Canada 617

Shizhuyuan China 550

Tyrnyauz Russia 460

Xingluokeng China 234

Yaogangxian China 175

Logtung Yukon, Canada 168

Inkurskoye Russia 135

Wuming Daminghan China 101

Xianglushan China 100

Sisson Brook Canada 77*

Source: US Geological Survey and updated by ITIA and Geodex in 2009

*Includes only Measured & Indicated Resources. Additional Inferred Resource of 43,000t W (Sisson Brook excludes molybdenum values)

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GEODEX MINERALS

Primary Asset Sisson Brook, New Brunswick

Development Stage Initiating prefeasibility

Metals Tungsten, molybdenum

Key Factors

Favourable location; excellent infrastructure and in a politically stable country Potential for low cost, large, open- pit mine

TSX.V: GXMFrankfurt: G2W

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SHARE STRUCTURE

September 2009

SHARES OUTSTANDING 87.7 million shares

FULLY DILUTED 101.1 million

CASH ON HAND $0.7 million

52 Week High-Low: $0.10 - $1.37

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NEW BRUNSWICK, CANADA

Sisson Brook • Located within one hour drive of Fredericton,

provincial capital of New Brunswick

• Stable, mining - friendly jurisdiction with excellent labour workforce

• Geodex owns 70% directly and 16% indirectly, no royalties

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SISSON BROOK MINE DEVELOPMENT PLAN

Potential Open Pit Mine producing 20,000 tonnes

per day

Process Plant

Power Line

Bird Brook Tailings Area

Right ingredients for developing low-cost mine

Infrastructure on or near project includes:• hydro line• provincial highway• railway• deep water port

Previously logged area with extensive road network

Geotechnical, environmental and community studies continue to progress

1000 m

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SISSON BROOK DEPOSIT

Zone I

Zone III

Zone II

East Flank

500 m

Tungsten - Molybdenum

46,500m of drilling carried out since 2005

Jan 2009, new resource calculation completed

Feb 2009 preliminary economic assessment completed

Initiating pre-feasibility studyEllipse

Zone

Core Zone

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SISSON BROOK LEVEL PLAN - ZONE III 275 m ELEVATION

300 m

Cross – Section 5136700

Core Zone

Ellipse Zone

W E

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SISSON BROOK CROSS - SECTION 5136700

200 m

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2009 RESOURCE MODEL

Zone III & Ellipse

Tonnes(million) % WO3 %Mo

WO3%Equivalent (2.02:1)

WKg

(million)

Mo Kg

(million)

M & I 91.0 0.107 0.035 0.177 77 32

Inferred 56.4 0.096 0.037 0.170 43 21

Sisson Brook January 2009 43-101 Resource Calculation Zone III & Ellipse

* At 0.125% WO3 equivalent cutoff grade, based on %WO3 + (%Mo x 2.02) M & I = Measured & Indicated

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SCOPING STUDY MAY 2009¹

Production

Method Open Pit

Mine Life 20 Years

Processing

• Pre – Concentration• Conventional Milling• Gravity/Flotation

Recoveries WO3 Mo

Pre – Sorting before Milling 96% 84%

Total Mined Ore 74% 70%

¹ This assessment is preliminary in nature and it includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves. There is no certainty that the preliminary assessment will be realized. The mineral resources discussed here are not mineral reserves and do not have demonstrated economic viability.

Jack M. Marr, M. Sc. P. Geo., is the QP, responsible for the Sisson Brook project.

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Capital Cost $ US (million)¹

Capital Cost $ 263

30% Contingency $ 78

Total Capital Cost $ 341

Price Assumptions Unit¹

WO3(APT Price)

$US 220 / mtu*(US $10 / lb)

Mo $US 15.00 / pound

SCOPING STUDY MAY 2009

Operating Cost

$ CDN Per Tonne $ US Per Tonne¹

Mine Ore + Waste 2.60 2.22

Plant 4.66 3.96

G & A 0.66 0.56

Total 7.92 6.74

* 1 mtu = 10kg

¹Conversion used: $1CDN = $0.85 US

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SCOPING STUDY MAY 2009

Financial

IRR (from year – 2) 23%

NPV (8% discount) $US 372 mill

Payback Year 4

Annual Average

Metal Production

MTU(10kg = 1MTU)

Kilogram(million)

Annual Revenue

$US (million)

WO3 470,000 4.7 103

Mo - 1.6 52

Total - - 155

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PROPOSED PREFEASIBILITY PROGRAM

Purpose Identify and outline the potential commercial development scenario Provide the basis for future work programs including feasibility report

Mine Design Engineering Metallurgical Testing Process Facilities Design General Engineering and Infrastructure Design Environmental Monitoring Waste Management Design Financial Modeling and Analysis

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GEODEX MINERALS

Primary Asset Sisson Brook, New Brunswick

Development Stage Initiating prefeasibility

Metals Tungsten, molybdenum

Key Factors

Favourable location; excellent infrastructure and in a politically stable country Potential for low cost, large, open- pit mine

TSX.V: GXMFrankfurt: G2W

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London Global Mining Investment Conference

Stationers Hall, London

Wednesday 30th September 2009

www.ObjectiveCapitalConferences.com

Mark Fields

President & CEO

Geodex Minerals

Mark Fields joined Geodex Minerals as President and CEO in May 2009. Mr Fields holds a B.Sc. in Geology from the University of British Columbia and a B. Comm. (Honours) from Queen’s University.

Mr Fields was a member of the management team which participated in the sale of La Teko Resources Ltd to Kinross Gold Corporation and he was involved in the acquisition and development of the Diavik diamond mine for the Rio Tinto Group. As Executive Vice President of Pine Valley Mining Corporation, he was a key member of the executive team which brought the Willow Creek coal mine into commercial production. He is an independent director of three companies listed on the TSX Venture Exchange.