YTC Resources- Resources & Energy Symposium 2012
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YTC Resources is building a mid-tier mining company by developing its Hera-Nymagee project located in the world-class Cobar Basin of New South Wales, Australia. The project consists of the Hera gold deposit and the nearby Nymagee copper deposit. A definitive feasibility study has confirmed the technical and financial viability of an initial stage of development focused on the Hera deposit. Drilling continues to expand both deposits and identify additional targets along a 7km mineralized corridor, positioning the project for future growth.
YTC Resources- Resources & Energy Symposium 2012
- 1. BUILDING A MID-TIER MINING COMPANY IN A WORLD CLASS TERRAIN 1
- 2. DISCLAIMER • This presentation has been prepared by YTC Resources Limited (“YTC” or the “Company”). It should not be considered as an offer or invitation to subscribe for or purchase any securities in the Company or as an inducement to make an offer or invitation with respect to those securities. No agreement to subscribe for securities in the Company will be entered into on the basis of this presentation. It is not to be distributed to third parties without the consent of YTC. • This presentation contains forward-looking statements and projected drilling schedules that are not based on historical fact, including those identified by the use of forward-looking terminology containing such words as “believes”, “may”, “will”, “estimates”, “continue”, “anticipates”, “intends”, “expects”, “should”, “schedule”, “program” , “potential” or the negatives thereof and words of similar import. • Management of YTC cautions that these forward-looking statements are subject to risks and uncertainties that could cause actual events or results to differ materially from those expressed or implied by the statements. Management believes that the estimates are reasonable, but should not unduly be relied upon. • YTC makes no representation, warranty (express or implied), or assurance as to the completeness or accuracy of these projections and, accordingly, expresses no opinion or any other form of assurance regarding them. Management does not intend to publish updates or revisions of any forward-looking statements included in this document to reflect YTC’s circumstances after the date hereof or to reflect subsequent market analysis. • By its very nature exploration for gold and copper is a high risk business and is not suitable for certain investors. YTC securities are speculative. Potential investors should consult their stockbroker or financial advisor. There are a number of risks, both specific to YTC and of a general nature which may affect the future operating and financial performance of YTC and the value of an investment in YTC including and not limited to economic conditions, stock market fluctuations, gold, copper and silver price movements, regional infrastructure constrains, securing drilling rigs, timing of approvals from relevant authorities, regulatory risks, operational risks, reliance on key personnel and foreign currency fluctuations. • You should not act or refrain from acting in reliance on this presentation material. This overview of YTC does not purport to be all inclusive or to contain all information which its recipients may require in order to make an informed assessment of the Company’s prospects. You should conduct your own investigation and perform your own analysis in order to satisfy yourself as to the accuracy and completeness of the information, statements and opinions contained in this presentation before making any investment decision. 2
- 3. INVESTMENT HIGHLIGHTS HERA-NYMAGEE PROJECT EVOLVING AS A MAJOR COBAR STYLE MINERAL SYSTEM • Hera (gold-base metals) & Nymagee (copper-base metals) deposits 4.5km apart • YTC moving toward an integrated development in 2 Stages Hera –Nymagee Deposit: Contained Metal in JORC Resources* Gold (Oz) Silver (Oz) Copper (Tonnes) Lead (Tonnes) Zinc (Tonnes) HERA DEPOSIT 321,832 1,308,320 4,042 67,278 93,870 NYMAGEE DEPOSIT - 2,342,638 95,935 26,964 52,963 TOTALS 321,832 3,650,958 99,977 94,242 146,833 STAGE 1: HERA DEPOSIT (YTC-100%) – DFS COMPLETE – AWAITING PERMITTING • Near-term, high-grade gold-lead-zinc-silver development • Operating costs of A$395/ounce (after Pb-Zn credits) • Hera deposit open to north and south STAGE 2: NYMAGEE DEPOSIT (YTC-95%) – MAIDEN RESOURCE ESTABLISHED • Maiden Resource: 8.1Mt @ 1.2% Cu, 0.3% Pb, 0.7% Zn and 9g/t Ag • High grade copper-lead-zinc & silver open to north and at depth • Strong geological analogue to the giant CSA Mine 3 *Refer Appendix 1– Resources and Reserves
- 4. CORPORATE SNAPSHOT Shares on issue 249.2 m Options on issue 5.425m Market Cap (at 30c/share ) $75m Est Cash (31 March 2012) $16.8m Enterprise Value $ 58m Major Shareholders (approx. %) 6 month share chart Board & Management Glencore Retail (49%) YTG Institutional (30%) Retail Yunnan Tin Group (12.3%) Institutional Glencore (6.5%) Board and Management 4 (2.5%)
- 5. PROJECT LOCATION COBAR BASIN IS A WORLD CLASS METALLIFEROUS PROVINCE Bourke CSA Copper Mine +1.5Mt Cu endowment Cobar Gold Field Armidale Endeavour Mine +7Moz Au Eq production Toho Zinc Australia Zn-Pb-Ag Girilambone Cu Mine CSA Mine Straits Resources Glencore NSW Cu Tritton Straits Nyngan Cobar Cu Mt Boppy Mine COBAR BASIN METAL INVENTORY The Peak Mine NewGold Polymetals 6.4Moz Au, 200Moz Ag, 2.2Mt Cu, 4Mt Zn, 3Mt Pb Au Au-Cu Nymagee Cu Deposit Cobar Basin Mineral Hill Kimberley Metals Cu-Au-Pb-Zn Hera Au-Pb-Zn Deposit YTC Office Northparkes Mine Newcastle Rio Tinto ORANGE Cu-Au Parkes 100kms Lithgow Cadia Mine Newcrest Bathurst Cu-Au 5 Cowra SYDNEY
- 6. COBAR BASIN DEPOSITS LONG LIFE, HIGH GRADE – VERTICAL CONTINUITY COBAR DISTRICT – LONG SECTION Long Section: Cobar Gold Field +7Moz Au Eq production CSA +1.5Mt Cu Eastern Western Perseverance The Peak New Occidental Chesney New Cobar Great Cobar System System 500m 10km 1000m 1500m QTS QTS South North HERA - NYMAGEE PROJECT – LONG SECTION Hera Gold and Base Metals Nymagee Cu Deposit Resource: 670koz Au Eq 96kt Cu, 92kt Pb, 147kt Zn, 2.3Moz Ag Reserve: 423koz Au Eq. 500m 1000m 1500m 6
- 7. PROSPECTIVITY Poorly Tested Gravity High HERA-NYMAGEE CORRIDOR Untested Gravity High Nymagee Copper Deposit • The Hera & Nymagee deposits are both marked by prominent gravity Untested Gravity Highs highs Untested Gravity High Nymagee JV: YTC 95% • Numerous gravity targets defined by Nymagee JV: YTC 95% EL 6162: YTC 100% detailed ground gravity along 7km of strike. • Outstanding potential for Hera- Nymagee corridor to evolve into Cobar field equivalent Hera Gold Deposit Zeus Gravity Anomaly N Untested Gravity Highs 2km 7
- 8. STAGE 1 – HERA DEVELOPMENT HERA DFS COMPLETE – SEPTEMBER 2011** • Hera DFS confirms a financially & technically robust project producing gold-silver doré bars and a bulk lead-zinc concentrate • Resource 677,200 ounces Au Eq. at grade of 8.6g/t Au Eq* • Reserve 423,471 ounces Au Eq. at grade of 7g/t Au Eq* • Minimum 7.3 year mine life • >A$510 million revenue generated in Stage 1 • Net Revenue (pre tax profit): $94.8m at Au = A$1450/oz $152m at Au = A$1750/oz • Production of >390,000 ounces (gold equivalent) over life of mine • Average annual production exceeds 50,000 Au Eq. ounces over life of mine • Life of Mine gold recovery of 94% • Operating costs of A$395 per ounce (after Pb-Zn credits) • Pre-Production capital of $73.5m *Refer Appendix 2– Gold Equivalent Calculations 8 ** Refer Appendix 5 – Hera DFS Detail
- 9. STAGE 1 – HERA DEVELOPMENT PERMITTING & DEVELOPMENT STATUS • YTC has completed Stage 1earthworks including Hera boxcut under existing Part 5 Approval • Mining Lease Lodged January 2012 • Environmental Assessment (EA) now in final stages of permitting Magazine Box Cut Rom Pad Contractors Laydown Processing Area Settling Ponds Hera Boxcut – April 2012 9
- 10. HERA RESOURCE 677kOz Au Eq IN JUNE 2011 AND GROWING TO THE NORTH & SOUTH TNY019 4m @ 52g/t Ag, 15% Pb CNYDD019: 20.7m @ 0.31g/t Au, 50g/t Ag , 2.9% Pb, 1.9% Zn HRD021 (northernmost drill hole) HRD026 (southernmost drill hole) 2m @ 0.13g/t Au, 50g/t Ag 6.52%Pb, 14.2% Zn 7.7m @ 5.7g/t Au, 0.41% Cu, 2.1% Pb, 2.8% Zn 10
- 11. COBAR DISCOVERY CASE STUDY THE PEAK - PERSERVERANCE EXAMPLE 11,000mE 10,000mE 10,000mRL Peak Deposit (1995) 4.6Mt @ 7.6g/t Au and 0.9% Cu PK57B: 7m @ 4.5g/t & 1.5% Cu (1994) Perseverance Deposit (2004) 2Mt @ 11g/t Au and 0.9% Cu 9,000mRL North 500m 11
- 12. NYMAGEE BIG COPPER SYSTEM: OPEN AT DEPTH • Maiden JORC Nymagee Resource in Dec 2011, after discovery of high grade copper in Oct 2010. • 8.1Mt @ 1.2% Cu, 0.3% Pb, 0.7% Zn and 9g/t Ag • Open to the north and at depth • Represents an analogue to the upper part of a CSA style copper system • Deep drilling results show the Nymagee copper system now extends beyond 500m vertical • High-grade massive sulphide to ~400m vertical, including: NMD038: 18m @ 6.3% Cu and 26g/t Ag NMD001: 8.9m @ 7.2% Cu and 24 g/t Ag NMD008W1: 20m @ 3.9% Cu • Results for deepest hole to date show the copper system continuing at depth: NMD50W1: 240m @ 0.4% Cu (bulk interval) includes 33.3m @ 0.96% Cu from 422.42m, and 61.0m @ 0.8% Cu from 547m, • Results strongly encouraging for vertical extensions of economic mineralisation 12
- 13. NYMAGEE COPPER DEPOSIT vs CSA SCHEMATIC CROSS SECTION COMPARISON - LOOKING NORTH MAIN SHAFT SHALLOW COPPER ZONE Pb-Zn-Ag Lens • Nymagee evolving as the (off section) upper part of a ‘CSA’ style -200m -200m MAIN LENS Cobar deposit • Model suggests increasing Low-Grade Cu Mineralisation copper grade with increasing High-Grade Cu Mineralisation depth Pb-Zn Mineralisation INTERPRETED -400m -400m ROYAL LODE • Additional 1.5km depth potential to explore INTERPRETED DEPTH LIMIT CLUB HOUSE OF DEEPEST LODE DRILLING 100m -600m -600m NOMINAL >0.25% Cu 100m ENVELOPE WESTERN QTS NORTH SYSTEM 100m CZ EASTERN LENS SYSTEM 100m -800m -800m POTENTIAL “QTS” TARGETS AT CSA – Cross Section Nymagee – Cross Section DEPTH MINERALISATION >1.5Mt Cu Production CONTINUES TO >100kt Cu in Resource 13 >12mt @ 5% Cu Resource >2000m Open at Depth
- 14. NYMAGEE EXTENSION OPEN TO NORTH AND AT DEPTH LONG SECTION – NYMAGEE NMRC090: Looking West – Scale as shown 3m @ 2.75% Cu and 50g/t Ag NMD060: NMD068: 8m @ 2.0% Cu from 301m, and 14m @ 63g/t Ag, 2.7% Pb and 5.2% Zn from 207m 10m @ 2.0% Cu from 357m NYMAGEE RESOURCE: 8.1Mt @ 1.2% Cu, 0.3% Pb, 0.7% Zn and 9g/t Ag NEW EM TARGETS NMD50W1 (Deepest Hole) 240m@ 0.4% Cu NYMAGEE TARGET ZONE North Selected drill results outside the Resource 100m 14
- 15. YTC BROKER COVERAGE YTC - Broker Coverage Avg: $0.69 $0.67 Argonaut - December 2011 $0.72 Valuation JP Morgan - June 2011 $0.67 Hartleys - January 2012 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 15
- 16. SUMMARY • Hera DFS confirms a financially & technically robust project as Stage 1 • >$510 million in revenue in Stage 1 alone • Operating Costs of A$395/oz (after Pb-Zn credits) • Stage 1 development establishes strong foundation for development of Nymagee in Stage 2 • Feasibility Study evaluating integration of Hera-Nymagee continuing • Hera & Nymagee are expanding deposits • Economic intersections along strike and at depth • Strong drilling commitment – minimum 10,000m diamond core drilling in 2012 • Experienced team assembled for transition from explorer to developer/producer 16
- 17. BUILDING A MID-TIER MINING COMPANY GROWTH ASSETS IN A PREMIER MINING ADDRESS GROWTH 17
- 18. THANK YOU YTC Resources Limited ASX:YTC 2 Corporation Place ORANGE NSW 2800 T: +61 2 6361 4700 E: office@ytcresources.com www.ytcresources.com 18
- 19. APPENDIX 1: RESOURCES AND RESERVES MINERAL RESOURCE ESTIMATE- HERA DEPOSIT - JUNE 2011 NSR Cu Pb Zn Au Eq Contained Au Category Tonnes (A$) Au g/t Ag g/t % % % (g/t) Ozs Eq Indicated 2,113,000 243 4.2 17.0 0.2 2.8 3.9 9.2 Inferred 330,000 207 3.5 14 0.1 2.3 3.3 7.5 Total 2,444,000 238 4.1 16.7 0.2 2.8 3.8 8.6 677,200 PROBABLE ORE RESERVE: HERA DEPOSIT – DFS: SEPT 2011 Au Eq Contained Au SOURCE Tonnes Au (g/t) Ag (g/t) Cu (%) Pb (%) Zn (%) (g/t) Ozs Eq Development Sub-total 278,158 2.86 13.06 0.13 2.26 3.19 Stope Sub-Total 1,597,760 3.72 15.39 0.17 2.56 3.55 MINE PROBABLE RESERVE 1,875,918 3.59 15.04 0.16 2.51 3.50 7.00 423,471 MINERAL RESOURCE ESTIMATE- NYMAGEE DEPOSIT – DEC 2011 Description Cut Off Tonnes Cu % Pb % Zn % Ag g/t INDICATED Shallow Cu Resource (above 90mRL) 0.3% Cu 5,147,000 1.00 0.10 0.20 5 Deeper Cu Resource (below 90m RL) 0.75% Cu 1,984,000 1.80 0.30 0.60 11 Lead-Zinc-Silver Lens 5% Pb + Zn 364,000 0.50 4.40 7.80 41 INFERRED Deeper Cu Resource (below 90m RL) 0.75% Cu 601,000 1.30 0.10 0.20 8 GLOBAL 8,096,000 1.20 0.30 0.70 9 Contained Metal (tonnes) 96,000 27,000 53,000 69 19
- 20. APPENDIX 2 GOLD EQUIVALENT CALCULATIONS – HERA DFS & HERA RESERVE This report makes references to the Hera Ore Reserve, DFS outputs and metal equivalents. It is the Company's opinion that all the elements included in the metal equivalents calculation have a reasonable potential to be recovered. Au Equivalent calculation formula = (Metal price x metal grade) ÷ (gold price per oz ÷ 31.1) The following metal prices, exchange rates and metal recoveries and payabilities were used for the calculation of a gold equivalent. Metal Recovery Payability Source Au 94% 100% YTC Metallurgical testwork and Marketing Study Cu 88% 0% YTC Metallurgical testwork and Marketing Study Pb 91% 95% YTC Metallurgical testwork and Marketing Study Zn 90% 85% YTC Metallurgical testwork and Marketing Study Ag to dore 47% 100% YTC Metallurgical testwork and Marketing Study Ag to Bulk Con 46% 0% YTC Metallurgical testwork and Marketing Study Metal Price Source Au US$1450/oz 20% discount to spot Pb US$2,500/t LME 15 month buyer Zn US$2,318t LME 15 month buyer Ag US$32/oz 20% discount to spot AUD/USD 1.00 Consensus Forecast 20
- 21. APPENDIX 3 GOLD EQUIVALENT CALCULATIONS – HERA RESOURCE This presentation makes a number of references to metal equivalents. These metal equivalent values refer to those included with Hera Resource Estimate released to the ASX on 2nd June 2011 It is the company's opinion that all the elements included in the metal equivalents calculation have a reasonable potential to be recovered. Au Equivalent calculation formula = (Metal price x metal grade) ÷ (gold price per oz ÷ 31) The following metal prices, exchange rates and metal recoveries and payabilities were used in the estimation of “net recoverable ore value per tonne (NSR)” and for the calculation of a gold equivalent. Metal Recovery Payability Source Au 94% 100% YTC Metallurgical testwork and Marketing Study Cu 88% 0% YTC Metallurgical testwork and Marketing Study Pb 91% 95% YTC Metallurgical testwork and Marketing Study Zn 90% 85% YTC Metallurgical testwork and Marketing Study Ag to dore 47% 100% YTC Metallurgical testwork and Marketing Study Ag to Bulk Con 46% 0% YTC Metallurgical testwork and Marketing Study Metal Price Source Au US$1200/oz 90% of Consensus forecast, to May 2013 Consensus economics, May2011 Cu US$8,370/t 90% of Consensus forecast, to May 2013 Consensus economics, May2011 Pb US$2,420/t 90% of Consensus forecast, to May 2013 Consensus economics, May2011 Zn US$2,425/t 90% of Consensus forecast, to May 2013 Consensus economics, May2011 Ag US$27/oz 90% of Consensus forecast, to May 2013 Consensus economics, May2011 AUD/USD 0.90 21
- 22. APPENDIX 4 BOARD OF DIRECTORS Partner of PricewaterhouseCoopers Australia (Coopers & Lybrand) for 19 years specialising in the Anthony Wehby provision of corporate finance advice. Anthony is based in Sydney and maintains a consulting Non-Executive Chairman practice providing advice on mergers and acquisitions, IPO's, funding and valuations Dr Wenxiang Gao Over 20 years experience as a senior mining engineer in China. Dr Gao is the General Manager of Non-Executive Director Yunnan Tin Group, the world’s largest tin producer. Geologist with over 15 years experience in minerals exploration and resource development in Rimas Kairaitis gold, base metals and industrial metals. Mr Kairaitis has a strong record of exploration success in Chief Executive Officer NSW. Christine Ng Christine is an Executive Director of China Yunnan Tin Minerals Group Co. Ltd (listed on Hong Non-Executive Director Kong Stock Exchange). Over 15 years experience in the resources industry as both a solicitor for Clayton Utz and a Richard Hill geologist and commercial manager for mining companies in range of mineral commodities Non-Executive Director worldwide. A lawyer with over 30 years experience in the resources sector. He is the Senior Partner of Robin Chambers Chambers & Company, an international law firm based in Melbourne, and Special Counsel – China Non-Executive Director for its affiliate, the New York law firm of Chadbourne & Parke (Beijing, China). Over 15 years experience in the mining and exploration industry, specialising in field logistics and Stephen Woodham support and land access in rural and remote environments. Non-Executive Director 22
- 23. APPENDIX 5: STAGE 1 – HERA DEVELOPMENT DFS – SEPTEMBER 2011 HERA DFS 3D view of Hera Mine Design showing mine capital development, final Diluted Reserve (tonnes) 1,875,918 stope design and CRF fill. Diluted Reserve Grade g/t Au (on gold equivalent basis) 7g/t Au Eq. Net Smelter Return (NSR) $218 / tonne Mine Life (box cut to last revenue) 7.3 years Mining & Process Rate 350,000 tpa Payable Metal Production Gold Production (to dore) 204,274 ounces Silver Production (to dore) 426,860 ounces Zinc Production 63,439 tonnes Lead Production 43,399 tonnes Gold Equivalent Production 352,324 ounces Operating Costs Mining $72.79 / tonne Milling $34.55 / tonne Offsite costs $49.33 / tonne Key DFS Inputs Administration $14.25 tonne Item Input Units Source Operating Margin (after mining and milling) $105.33 / tonne Lead Price $2,500 US$/Tonne LME 15 month buyer Zinc Price $2,318 US$/Tonne LME 15 month buyer Operating Costs (after Pb-Zn credits) $394.60 / Au ounce Gold Price $1,450 US$/Ounce 20% discount to spot Silver $32 US$/Ounce 20% discount to spot Pre-Production Capital Costs (to first ore) $73.5 million Gold Recovery to Dore 94% Recovery DFS Metallurgy Study Silver Recovery to Dore 47% Recovery DFS Metallurgy Study Net Revenue (pre-tax Profit) Lead Recovery to bulk Con 91% Recovery DFS Metallurgy Study Zinc Recovery to bulk Con 90% Recovery DFS Metallurgy Study A$1,450/oz gold price $94.8 million Bulk Concentrate Grade 56% Pb + Zn DFS Metallurgy Study A$1,750/oz gold price $152 million Exchange Rate 1.00 AUD/USD Consensus Forecast 23 All $ figures are as Australian Dollars
- 24. APPENDIX 6: YTC SENIOR MANAGEMENT BUILDING AN EXPERIENCED OPERATIONS TEAM Dean Fredericksen –Chief Operations Officer (COO) Dean closely involved with YTC for the last 2.5 years as a consultant. Dean was closely involved on the assessment and Feasibility of the Hera and Nymagee Projects since 2009. Dean brings over 20 years mine geology and project assessment experience to YTC with companies including ACM, MPI, Newcrest & Sino Gold. Sean Pearce –Hera Project – General Manager Sean Pearce is a Mining Engineer and has over 23 years operational experience in underground metalliferous mines. Sean joins the company from Peak Gold Mines in Cobar, where he was Mining Manager since 2007. Sean will initially be based in the YTC offices in Orange, and will work closely with Dean and Stuart Jeffrey on the completion of the Hera DFS. He will then take on the site management as the Project moves into mine construction and commissioning. Ray Dekker – Project Supervisor Ray holds over 40 years experience in underground and open cut mining. He is a ticketed Mine Manager and his extensive experience in the industry has included senior roles at Mt Isa, Bendigo Gold and Renison mines. Rays, consultancy experience ranged from Project Supervision, relieving Mine Manager and professional mentoring. Stuart Jeffrey – Principal Geologist – Hera & Nymagee Projects Stuart brings 20 years of both exploration and mine geology experience to the Hera and Nymagee Projects, including a close association with the Hera Project extending back to 2004. Stuart has experience with a broad range of Companies including BHP, Triako and CBH Resources 24
- 25. COMPETENT PERSONS STATEMENTS Competent Persons Statement – Exploration Results The information in this presentation that relates to Exploration Results is based on information compiled by Rimas Kairaitis, who is a Member of the Australasian Institute of Mining and Metallurgy. Rimas Kairaitis has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves.’ Mr Kairaitis consents to the inclusion in this report of the matters based on his information in the form and context in which it appears. Competent Persons Statement – Hera Resource Estimate The Resource Estimation has been completed by Mr Dean Fredericksen the Chief Operating Officer of YTC Resources Ltdwho is a Member of the Australasian Institute of Mining and Metallurgy. Mr Dean Fredericksen has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves.’ Mr Fredericksen consents to the inclusion in this report of the matters based on his information in the form and context in which it appears. Competent Persons Statement – Hera Ore Reserve The Information in this report relating to Ore Reserves is based on work undertaken by Mr Michael Leak of Optiro Pty Ltd under supervision of Mr Sean Pearce. This report has been compiled by Sean Pearce, who is a Member of the Australasian Institute of Mining and Metallurgy. Sean Pearce has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves.’ Mr Pearce consents to the inclusion in this report of the matters based on his information in the form and context in which it appears. 25