Zamanco Presentation May 2012 V3 · Not an Offer for Securities This document has been created by...

www.zamancominerals.com

Zamanco�Minerals�Limited

A�new�manganese�development�opportunity�in�ZambiaMay 2012�


Not an Offer for SecuritiesThis document has been created by Zamanco Minerals Limited (the Company) solely for use at investor presentations to be made by the Company in 2012 and doesnot constitute nor does it contain an offer or invitation to buy or subscribe for securities in the Company or an inducement to make an offer or invitation with respect tothose securities. By attending the meeting where this presentation is made, or by reading the presentation slides, you agree to be bound by the following limitations.

Relevant Law & Relevant PersonsThe distribution of this document in jurisdictions outside of Australia may be restricted by law, and persons into whose possession this document comes should informthemselves about, and observe, all such restrictions.

Information is a synopsis onlyThis document only contains a synopsis of information on the Company and accordingly no reliance may be placed for any purpose whatsoever on the sufficiency orcompleteness of such information and to do so could potentially expose you to a significant risk of losing all of the property invested by you or incurred by you ofadditional liability. The information presented in this document is subject to change without notice.

Currency referencesFinancial amounts in this document are expressed in Australian dollars, or A$. USD or US$ shall mean the lawful currency of the United States of America.

Forward looking StatementsThis document contains ‘forward looking statements’ which involve subjective judgment and analysis and are subject to significant uncertainties, risks, andcontingencies, many of which are outside the control of, and are unknown to the Company. In particular, these forward looking statements are made only as of the dateof this document, they assume the success of the Company’s business strategies, and are subject to business, competitive and economic uncertainties and risks. Norepresentation, warranty or assurance (express or implied) is given or made in relation to any forward looking statement by any person (including the Company). Inparticular, no representation, warranty or assurance (express or implied) is given in relation to any underlying assumption or that any forward looking statement will beachieved. Actual future events may vary materially from the forward looking statements and the assumptions on which the forward looking statements are based.Given these uncertainties, recipients are cautioned to not place undue reliance on such forward looking statements. Subject to any continuing obligations underapplicable law or any relevant listing rules of the ASX, the Company disclaims any obligation or undertaking to disseminate any updates or revisions to any forwardlooking statements in this document to reflect any change in expectations in relation to any forward looking statements or any change in events, conditions orcircumstances on which any such statement is based. Nothing in this document shall under any circumstances create an implication that there has been no change inthe affairs of the Company since the date of this Presentation.

DisclaimerAlthough reasonable care has been taken to ensure that the facts stated in this document are accurate and that the opinions expressed are fair and reasonable, norepresentation or warranty, express or implied, is made as to the fairness, accuracy, completeness or correctness of the information and opinions contained in thisdocument and no reliance should be placed on such information or opinions. None of the Company, or Pursuit Capital Pty Ltd (Pursuit) or any of their respectivemembers, directors, officers or employees nor any other person accepts any liability whatsoever for any loss, however arising, from any use of such information oropinions (save in respect of fraud). No reliance should be placed on the information and no representation or warranty (express or implied) is made by the Company orPursuit, or any of their respective directors or employees or any other person, and save in respect of fraud, no liability whatsoever is accepted by such person inrelation thereto.

Disclaimer


Zamanco’s�Strategic�Business�Plan

StrategicCommodity

Mix

FavourableLocations

RightPeople

Scalability

The vision is to develop the Company into a mid-cap resources entity through the staged development of ferro-alloys projects in southern Africa.


• Zamanco�Minerals�Limited�is�a�manganese�exploration�and�development�company�focused�on�Zambia;

• Zamanco�has�entered�into�Agreements�covering�four�tenement�areas�in�known�manganese�regions�and�is�accelerating�exploration�to�define�JORC�resources;

• Zamanco’s�strategy�is�to�develop�a�60,000tpa�high�carbon�ferromanganese�and�12,000tpa�manganese�metal�operation�near�Serenje�in�central�Zambia;

• The�Company�is�focused�on�downstream�beneficiation�due�to�higher�margins,�high�quality�feedstock,�distance�to�port�and�fiscal�terms�that�favor�beneficiation;

• Zamanco’s�management�team�is�experienced�with�the�development�and�operation�of�mining�and�processing�operations�in�southern�Africa.

Investment�Highlights


Zamanco Minerals LimitedASX Code: ZAMFully Paid Shares on Issue: 35.15mDeferred Shares: 46.35mOptions (ZAMO): 29.4m (@ 20c)Share Price: $0.20Range (12 months) $0.16�0.30Market Capitalisation: $7.3mMonthly Volume (Shares): ~0.4mCash (30 March 2012) $2.13mDebt (current): nil

Corporate�Snapshot

Directors Substantial�Shareholders

Geoff�Donohue Chairman Geoff�Donohue�(indirect) 16.79%

Jacques�Badenhorst Managing�Director Peter�Ironside(indirect) 15.11%

Thomas�Hill Executive�Director Peter�McIntyre�(indirect) 8.89%

Peter�McIntyre Non�Executive�Director Jacques�Badenhorst�(indirect) 3.56%

Peter�Ironside Non�Exec�Director/Company�Secretary Thomas�Hill�(indirect) 3.56%

0

100000

200000

300000

400000

500000

600000

700000

800000

900000

1000000

$0.00

$0.05

$0.10

$0.15

$0.20

$0.25

$0.30

$0.35

May

�11

Jun�

11

Jul�1

1

Aug�

11

Sep�

11

Oct

�11

Nov

�11

Dec�

11

Jan�

12

Feb�

12

Mar

�12

Apr�

12

May

�12

Volume

Share�Price�(A$/share)

Volume Share�Price


Reasons�for�investing�in�Zambian�projects,�include:

• Known areas for manganese mineralisation.

• Political stability since attaining independence in 1964

• Banking, financial, legal and insurance services of aninternational standard.

• English speaking, with high literacy rate.

• Road and rail access to African ports.

Zamanco has a Certificate of Registration with theZambian Development Agency, which provides:

• 0% tax rate on dividends for 5 years from first year of declaring adividend;

• 0% tax on profits for 5 years from the first year profits is made,with only 50% profits being taxable in years 6 to 8, and 75%taxable in years 9 and 10.

• 0% import duty on raw materials, capital goods, machineryincluding trucks and specialised motor vehicles for 5 years.

Why�Zambia?


The Central, Luapula and Northern provinces ofZambia have areas where high grademanganese is found.

Mansa 45% to 63% MnO2 content.

Mkushi 38% to 61% MnO2 content.

Chinsali 36% to 58% MnO2 content.

Zambia is linked to ports along the African coastthat have the potential to make the export ofmanganese metal and ferromanganese a viablebusiness.

ProposedSmelter�Location

Why�Zambia?

Manganese�provinces


Zamanco has assessed the economics of developing a Direct Shipping Ore (DSO)operation as compared to value adding by downstream beneficiation

• Zambian manganese ores need to be transported long distances for export

• 1500�1600km transport distance to Beira or Dar�Es�Salaam

• Impractical to transport significant tonnages by road due to cost, logistics and safety

• Beneficiation to ferromanganese and/or manganese metal reduces transport volumes by60%, whilst product values increase by 4�8 times

• Zambian Government encourages beneficiation through the imposition of a 10% levy onnon�processed ore sales

• Good potential to acquire additional beneficiated ore at mine gate from local producersthat are unable to export

DSO�versus�Downstream�Processing


Proposed�Serenje�Manganese�Project�• Internal�Scoping�Study�completed�by�Zamanco�management�for�the�development�of�a�

ferromanganese�and�manganese�metal�project�in�Zambia.

• Study�indicated�that�a�60kt�per�annum�high�carbon�ferromanganese�plant�and�12kt�per�annum�manganese�metal�plant�could�be�developed�based�on�available�power.

• Development�of�these�production�levels�would�require�~180kt�per�annum�of�manganese�ore�grading�~50%�Mn.

• Developments�as�a�result�of�Scoping�Study:• MoU�signed�with�Zesco�for�provision�of�power;

• Land�secured�at�Pensulo,�near�Serenje,�sufficient�for�proposed�processing�plant�location;

• Agreements�entered�into�on�four�tenement�areas�near�Mansa�and�Mkushi;

• Three�of�these�tenements�are�subject�to�grant�following�lifting�of�Gov’t�moratorium�and�transfer�of�tenements�to�Zamanco�subsidiary�companies

• Exploration�program�initiated�in�April�2012�with�planned�trenching,�geophysics�and�drilling�to�be�completed�in�2012.

• Options�Analysis�initiated�with�Pyrocon�to�evaluate�processing�options�in�relation�to�various�manganese�alloy�products.�Expected�June�2012.


• Agreements�signed�over�four�tenement�areas�near�Mkushi�and�Mansa• Zamanco�to�have�80%�equity�in�Large�Scale�Prospecting�and�Mining�Licenses• Partners�to�be�paid�via�royalty�from�ore�production• Small�or�no�upfront�payments�to�vendors• Tenement�portfolio�totals�~3,000km2

• Three�new�Agreements�over�tenements,�subject�to�Due�Diligence�&�Ministerial�consent,�located�in�Chinsali,�Kabwe�and�Mansa

• Initial�exploration�program�of�trenching�and�geophysics�commenced�in�April�2012�to�be�followed�up�by�drilling

• JORC�resource�targeted�to�be�confirmed�in�2012

• Company�is�also�assessing�the�opportunity�to�acquire�lump�material�and�discarded�fines�from�mine�gate�suppliers�in�Zambia�to�increase�plant�scale�or�project�life

Exploration�&�Acquisition�Strategy


Exploration�&�Acquisition�Strategy

Serenje

EML

EML


Sampling�and�Evaluation�– Jack�Stuart�Mkushi�Permit�

• Trenches�and�outcrops�sampled�in�April�‘12.�Assays�awaited• Ground�geophysics�to�be�completed�(blue�lines)


EML�Kabwe�(subject�to�DD�&�Ministerial�consent)

topsoil

Mn mineralisation

~3m,open

Historic Mn pit

Mn nodules in clay matrix


Chinsali�(subject�to�DD�&�Ministerial�consent)

Grab sampled along strike, April ‘12Assays awaited


New�Tenements�– Exploration�Strategy

EML Kabwe• Extensive sub soil manganese mineralisation over tenement area• Potential low cost mining and beneficiation• Ability to measure resource in relatively short time frame• Exploration program will consist of pitting and drilling over a 2km x 2km area

• Laterite holes to be drilled to ~10m with some deeper holes targeting primary vein mineralisation;

• Approximate cost $300k• Program to commence once Ministerial consent received

Chinsali• Manganese mineralisation outcrops over 4.5km• Potential low cost mining and beneficiation• Ability to measure resource in relatively short time frame

• 1500-2000m RC drilling program• Approximate cost $300k• Program to commence once Ministerial consent received


Proposed�Mining�/�Ore�Purchase�and�Beneficiation

Estimated�Beneficiated�ROM�Requirement:�180,000t�conc.�at�50%�MnO2 pa

Estimated�Capex:�US$12�14m(if�mine�established)

Conc.�trucked�to�Serenje

Proposed�Ferromanganese�Smelter�

Estimated�Capex:�US$34�38m

Potential�Life:�10�yrs+

Proposed�Manganese�Metal�Plant

Estimated�Capex:�US$3�5m

Potential�Life:�10�yrs+

Potential�Production�from�the��Plant:�

up�to�60,000t HCFeMn�pa

Potential�Production�from�the�Plant:�12,000t

Mn�metal�pa

Proposed�Serenje�Manganese�Project�

Based on internal scoping study estimates and conditional on the Company sourcing sufficient manganese to construct & supply the smelter/plant.


Indicative�Development�Timetable

ExplorationTrenching and GeophysicsAirborne SurveysDrillingResource Estimate

Bankable Feasibility Study

Financing *

Plant Construction *

Commence Mining *

Production *

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

2012 2013

*�Based�on�a�positive�Bankable�Feasibility�Study�and�regulatory�and�corporate�approvals�being�received

Q1

2014


Manganese�Price�Trends

Manganese�product�prices�have�increased�by�20�50%�over�the�past�3�years

Higher�priced�products�=�higher�margins


Future�Opportunities

Zamanco�believes�that�further�project�opportunities�may�exist�within�Africa�for�manganese�and�chrome�projects�based�on�favourable�geology:

Gabon� Mn,�FeMnDRC� Mn,�FeMnSouth�Africa� Mn,�FeMnZimbabwe� Cr,�FeCr

Gabon,�High�Grade�Manganese

DRC,�High�Grade�Manganese

Zimbabwe,�High�Grade�Chrome

South�Africa,�High�Grade�Manganese

Current�Zambian�project


ASX�Comparables

Company CodeEnterprise�Value

Status Projects Resources Comments

Bligh�Resources BGH 2.35�� Exploration Australia No�resourcesNorthern�Manganese NTM 3.95�� Exploration Northern�Territory No�resources

Segue�Resources SEG 6.88�� Exploration South�Africa No�resourcesEarning�51%�of�Emang�Project,�Expl�Target�45�60Mt�@�28�44%�Mn

Western�Manganese WMN 14.99�� Exploration West�Timor�(Indon) No�resources

Montezuma�Mining MZM 6.05�� Exploration Pilbara�(Aust) 64.7Mt�@�11.2%�Mn Also�have�500koz�gold�resource

Spitfire�Resources SPI 8.70�� Exploration South�Woodie�Woodie 2.94Mt�@�7.07%�Mn Targetting�5�10Mt�at�15�25%�Mn

Kaboko�Limited�(formerly�Uran�Limited)

KAB 10.86�� Trial�Mining Zambia No�resources Best�3m�at�30%�Mn

Shaw�River�Resources SRR 11.38��Advanced�exploration

Australia,�Namibia��DSO 6.8Mt�@�23.1%�Mn (Targeting�10�15Mt�@�18�25%�Mn�in�Pilbara)

Jupiter�Mines JMS 213.24�� Construction South�Africa 163Mt�at�37%�MnOwn�49.9%�of�Tshipi�project�in�SA,�plus�Aust�Fe�project

OM�Holdings OMH 282.94�� Producer Bootu�Creek�(Aust) 32Mt�at�22%�MnProducing�1Mt�at�37%�Mn�pa,�plus�60ktpa�of�HCFeMn

Level�1��Early�Stage�Exploration,�

Level�2��Early�Stage�Exploration,�Low�grade�

Level�3��Small�scale�trial�mining�

Level�4��BFS�Stage

Level�5��Pre�Production�or�


Zamanco�Capital�Structure

Current�shares�on�issue(including�upfront�shares�to�Zamanco)

35,150,000

Shares�Yet To�Be�Issued

Existing�ZAM�Options on�Issue(20c�exercise,�Sept�2012)

29,400,000

Deferred�Consideration�1�� >1Mt�@�40%�Mn�JORC�resource 5,150,000

Deferred�Consideration�2�– Completion�of�BFS,�decision�to�proceed 15,450,000

Deferred�Consideration�3�– 12 months�continuous�production 25,750,000

TOTAL 110,900,000


Board�of�Directors

Geoff�Donohue�(53)�– Non�Executive�Chairman�(Australia)Mr�Geoff�Donohue�has�over�27�years�experience�at�both�board�and�senior�management�level�within�public�companies�and�the�securities�industry.�Mr�Donohue�holds�a�Bachelor�of�Commerce�from�James�Cook�University�of�North�Queensland,�Graduate�Diploma�in�Financial�Analysis�from�the�Securities�Institute�of�Australia�and�is�a�Certified�Practicing�Accountant.

Jacques�Badenhorst�(39)�–Managing�Director�(Africa)Mr Jacques Badenhorst is an Extractive Metallurgical Engineer, who studied at the University of Johannesburg and has 14 years hands onexperience. Jacques was responsible for the design and operational management of various operations, including, platinum, copper,vanadium, diamond, gold and ferrochrome recovery plants in Southern Africa. Jacques held senior management positions with companiesincluding Grinaker LTA and Anglo Gold. He is a member of SAIMM (South African Institute for Mining and Metallurgy) and MMMA (MineMetallurgical Managers Association). Member of the Institute of Directors (IOD) of South Africa.

Thomas�Hill�(49)�– Executive�Director�(Africa)Mr Thomas Hill has spent the past 10 years, since 2000 as a director of companies listed on the Johannesburg Stock Exchange (JSE). Hisinvolvement was with the initial listing of these companies, funding and management. He holds an Engineering (electronics) degree from theUniversity of Pretoria and a Masters degree in Business Leadership from the University of South Africa, (their MBA program). Thomas hasbuilt his experience around the listing, funding and running of listed companies and has over the past 18 months focused extensively on theminerals and mining industry in Southern Africa where he works with well established mining companies and practitioners to bring miningand mineral processing projects to the market.

Peter�McIntyre�(56)�– Non�Executive�Director�(Australia)Mr Peter McIntyre has been involved in the mining industry for nearly 27 years, which included 15 years with WMC Ltd in various seniormanagement positions. He has been involved with the development of major projects including St Ives Gold and Mt Keith Nickel, as well asCentral Norseman Gold Operations. He was previously the Managing Director of Extract Resources, which owns one of the largestundeveloped uranium projects in the world. Mr McIntyre is a chartered Civil Engineer and a Fellow of the Institution of Engineers, Australia.He also completed an MBA program at the Massachusetts Institute of Technology in Boston.

Peter�Ironside�(57)�– Non�Executive�Director�and�Company�Secretary�(Australia)Mr Peter Ironside is a Chartered Accountant and business consultant with over twenty years experience in the exploration and miningindustry. He has been a Director and/or Company Secretary of several ASX listed companies. Mr Ironside brings a significant level ofaccounting, compliance and corporate governance experience to the Board, together with support in the areas of corporate initiatives andcapital raising.


Contacts

Geoff DonohueChairmanPh +61 8 9423 5925E: [email protected]

Jacques BadenhorstManaging DirectorPh +27 82 780 8443E: [email protected]

Thomas HillExecutive DirectorPh +27 83 407 6037E: [email protected]


Appendices


Mkushi�Permit


“You can’t make Steel without Manganese and if you can’t make Steel, the world stops”Brian Gilbertson, CEO, Pallinghurst Resources Ltd

New Golden Age for steel production will last at least the next 20 � 25 years.

China, once a net exporter of manganese alloy, became a net importer of manganese alloy in August 2009.

From 2008 level, steel consumption in China is expected to double by 2020 due to continued urbanisation.

Indian Steel consumption growth potential is immense.

The U.S. relies entirely on manganese imports.

Demand for manganese alloy steel is increasing at a faster rate than ordinary low carbon steel.

Manganese�Sector

World�Supply

World�Demand Balance

Unit�Consumption�(kg/t�steel)

World�Supply

World�Demand

World�Balance

Unit�Consumption�(kg/t�steel)

2001 3,269�� 3,250�� 18 3.6 3,865�� 3,859�� 6 4.52002 3,214�� 3,153�� 61 3.5 4,441�� 4,413�� 27 4.92003 3,187�� 3,124�� 62 3.4 5,116�� 5,138�� 22 5.12004 3,820�� 3,764�� 56 3.2 6,010�� 5,960�� 50 5.42005 3,584�� 3,667�� 83 3.2 6,048�� 6,104�� 56 5.52006 4,035�� 4,070�� 35 3.3 6,696�� 6,576�� 119 5.42007 4,215�� 4,306�� 91 3.1 8,369�� 8,291�� 78 5.82008 4,328�� 4,242�� 86 3.1 8,353�� 8,150�� 203 6.12009 3,299�� 3,493�� 194 3.0 7,366�� 7,503�� 137 6.32010 4,408�� 4,406�� 2 3.0 8,679�� 8,830�� 151 6.1

High�Carbon�Ferromanganese Silica�Manganese

Source: 2010 Annual Market Research Report, The International Manganese Institute


Major�Manganese�Producers

MexicoMinera AutlanMolango, Naopo, Nonoalco

BrazilBPL: BuritiramaVale: Azul, Urucum,Morro da MinaTML: Icomi

GhanaGMC: Nsuta

GabonEramet: Moanda

South AfricaAssmang: Gloria, NchwaningSamancor: Mamatwan, Wessels

UkrainePrivat: Marganetz, Ordzhonikidze

KazakhstanENRC: Tur, Vostochny, Zhairem

India125 mines totalMOIL (10 mines)SandurTata

AustraliaBHPB/Aaplc: Groote EylandtCML: Woodie WoodieOM Holdings: Bootu Creek

China~250 minesMain Mn reservesGuanzi (33%)Hunan (16%)Largest mine: Daxin (300ktpa)

Source: Hatch Beddows, IMnl


Corporate�Directory

Registered OfficeZamanco Minerals LimitedGround Floor 168 Stirling Highway NedlandsWA 6009

PO Box 610 NedlandsWA 6909

Tel: +61 8 9423 5925Fax: +61 8 9389 1750Email: [email protected]

Company SecretaryPeter Ironside

ASX CodeZAM

Websitewww.zamancominerals.com

SolicitorsSteinepreis PaganinLevel 4, Next Building16 Milligan StreetPERTH WA 6000

Share RegistryComputershare Investor Services Pty LtdLevel 2, Reserve Bank Building45 St George’s TerracePERTH WA 6000

AuditorsBDO Audit (WA) Pty LtdChartered Accountants38 Station StreetSUBIACO WA 6008

BankersANZ Bank32 St Quentins AvenueCLAREMONT WA 6010

Zamanco Presentation May 2012 V3 · Not an Offer for Securities This document has been created by...

Documents

Transcript of Zamanco Presentation May 2012 V3 · Not an Offer for Securities This document has been created by...