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Objective Capital Global Mining Investment Conference - Tungsten: Mark Fields
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Transcript of 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
TUNGSTEN
The Commodity Super Cycle
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.
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
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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
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
CEMENTED CARBIDES
Hard & Resistant: Wear Parts
Woodcutting
Mining and Construction Tooling – Turning, Milling, Drilling
CEMENTED CARBIDES CON’T
Source: ITIA - 2009
STEELS/ALLOYS
Tool Steels
Heat Resisting Steel and Cast Steel
High Speed Steel
Stainless Steel & Valve Steels
Sea Water Resistant
STEELS/ALLOYS
Diamond Tools
Tungsten Alloys
Wear Protection
MILL PRODUCTS
Incandescent LampsFluorescent Lamps & Tubes
High Intensity discharge LampsLamps & Tungsten Wires
Chips
LCD’s
High Performance Switches
Electrodes
MILL PRODUCTS
OTHER APPLICATIONS
Sports & Leisure Time
BiologyJewellery
Chemical Products
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
ANNUAL WORLD TUNGSTEN PRODUCTION
Source: ITIA - 2009
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
WORLD TUNGSTEN RESERVES
China60%
Canada9%
Russia8%
USA5%
South Amer-
ica3%
Others15%
Source: ITIA - 20093 million tonnes, W content
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.
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
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)
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
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
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
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
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
SISSON BROOK LEVEL PLAN - ZONE III 275 m ELEVATION
300 m
Cross – Section 5136700
Core Zone
Ellipse Zone
W E
SISSON BROOK CROSS - SECTION 5136700
200 m
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
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.
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
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
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
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
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.