“When birds fly in formation there is a leader breaking the still air,
generating a wake of energy flow that propels the whole
team forward. In the Sotho language this leader, or pathfinder,
is called motjoli. In a similar fashion Motjoli Resources is
forging the way forward on the South Africa’s mining landscape.
Economic Empowerment in the Mining Sector
South Africa: TheSouth Africa: TheSouth Africa: The South Africa: The Land of Geological Land of Geological gg
superlativessuperlatives
• Nchakha MoloiNchakha Moloi• CHAIRMAN MOTJOLI RESOURCES• PDAC , SATURDAY , 6 MARCH 2009
Economic Empowerment in the Mining Sector
PDAC , SATURDAY , 6 MARCH 2009
Country BackgroundCountry Background
• South Africa is a minerals treasure trove with significant deposits of a range of g p gminerals:
Bushveld Igneous Complex (PGM V Fe– Bushveld Igneous Complex (PGM, V , Fe, Cr)M– Manganese
– Wits Basin– Alumino-silicates– Karoo basin
Economic Empowerment in the Mining Sector
Karoo basin
Country BackgroundCountry Background
• Out of 133 countries SA is ranked(a) :– 6 for financial market sophistication– 6 for soundness of banks– 2 for the regulation of securities exchange– 9 for the strength of investor protection– 2 for ease of accessing credit
• SA is a constitutional democracy, has a sound mining regulatory regime and strong state g g y g ginstitutions
Economic Empowerment in the Mining Sector
(a) WEF 2009/10 Global Competitiveness report
Economic Empowerment in the Mining Sector
Kalahari Basin
Samancor Mn Wessels MR
Ntsimbintle PRNew Order Rights
MR = Mining Right
PR = Prospecting RightAssmang MR
Kalahari Resources PR
Northern Cape Manganese Pty Ltd PR
Interplay PR
Samancor Mn Hotazel PR
Dreamworld PR
Ntsimbintle PR2.5 0.0 2.5 5.0
Samancor Mn Mamatwan MRSamancor Mn Middelplaats PRKms1:250,000
Economic Empowerment in the Mining Sector
Avontuur Manganese ProjectAvontuur Manganese Project JV between Aquila & Motjoli thru
R kRakana
New basin north of the Kalahari Manganese Fieldg
Current Inferred Resource(1)totals 34Mt at 40% Mn in two depositsdeposits
A restated Gravenhage Resource Statement is due in Q1 2010
JV / Aquila is participating in the Manganese Industry Forum (MIF)
Transnet and the MIF are evaluating two export options‐ Coega (near Port Elizabeth)
Economic Empowerment in the Mining Sector
‐ Saldanha Bay
7
Avontuur Manganese ProjectAvontuur Manganese Project Significant potential to
expand the currentexpand the current resource within the current block model and along a further 10km of Avontuur Basin edgeBasin edge
Explorationupsidepotential
Economic Empowerment in the Mining Sector 8
Economic Empowerment in the Mining Sector
Economic Empowerment in the Mining Sector
Pilanesberg Geology Turfspruit
(African Minerals )Aurora
(Pan Palladium)ComplexUpper ZoneMain ZoneCritical ZoneL Z
Mphahlele(Boynton/BEE)
Dwaalkop (Messina)
( )
Anooraq (Hunter Dickinson)
(Pan Palladium)
PGE ReefsLower Zone
Sedibelo Amandelbuilt
(Nkwe)
Cyferkuil (Anglo/Anooraq)
Gaphasha (Anglo/Annoraq)
Grass Valley(Pan Palladium)
War Springs(PTM )
(IBMP/Placer)
Z d it
Tuschenkomst (Boynton)
( )
Blue Ridge(Blue Ridge)
Millennium (Southern Era)
Twickenham(Anglo/BEE)
( )
Ruighoek (Boynton)
Zandspruit (Anglo/Boynton)
Rietfontein (Ranger)
(Blue Ridge)
Kameeldrift(CAMEC)
Kliprivier (Nkwe)
Ti d bStyldrift (Anglo/BEE)
PTM (Anglo/BEE)
Sheba’s Ridge (Blue Ridge)
Mineral Range(Lonmin)
Tinderbox (Placer/Nkwe)
Economic Empowerment in the Mining Sector
(Lonmin)
Fonte Verde (Blue Ridge)
De Wildt (Nkwe)
Economic Empowerment in the Mining Sector
SA Iron & Steel PotentialSA Iron & Steel PotentialPhalaborwa
Slurry pipeline
Phalaborwa Fe ore dumps
300Mt magnetiteVaremo “level 21”
BC Ti Magnetites2Gt (20%TiO2)=2X world(∑BC Fe=10XSishen!) Minmetals
Aquilla Steel, SA
Existing Gas pipeline
(∑ ) MinmetalsProblem!
q ,iron ore projects
MatolaFe/steel
*** Motjoli, Cascades Fe ore
Slurry pipeline
S.Bay G ?
Beneficiation OpportunitiesRole of Junior Companies
R.BayIron/steel
Gas?
Slurry pipeline Molteno/Indwe
Coal gasification
Economic Empowerment in the Mining SectorNqura
Fe/steelGas
pipeline
T S th Af i J i i th k t
Growing Junior Resource CompaniesGrowing Junior Resource Companies• True South Africa Juniors are rare in the market
• Market is dominated by foreign juniors
• Foreign juniors have an advantage over locals
– Depth of international markets p
– Sophistication of individual investors
L t f i i it l
••SoquemSoquem (mineral DFI) in Canada (mineral DFI) in Canada ••SAMDA led flow through initiativeSAMDA led flow through initiative
– Lower cost of raising capital
• Juniors – generally have no income but have to incur huge exploration
••National treasury investigated National treasury investigated Venture Capital FundVenture Capital Fund
••SASA New Africa Mining FundNew Africa Mining Fundexpenditure for a number of years before they become cash generative
• BEE Challenge: Low levels of Capital Access and Formation
••SASA--New Africa Mining Fund New Africa Mining Fund
g p
• JRC’s to use of this model to access funding
• Need to find sustainable funding model to grown BEE JRC’s
Economic Empowerment in the Mining Sector
• Need to find sustainable funding model to grown BEE JRC s
Predominantly foreign Predominantly foreign JRC’s is JRC’s is ultimately politically unsustainable!ultimately politically unsustainable!
Focus Area : Adding ValueFocus Area : Adding ValueThe Value Curve
5-10% 70-85%10-20%
Indicative Relative Allocation of CapitalThe Value Curve
ddin
g
D
Economically
Valu
e Ad
CB
Junior ConsolidationEconomically Viable Resource
EXPLORATION PRE-DEV MINE CONSTRUCTION
MINEPRODUCTION
AB
Time
A – Discovery B – Concept Study C – Pre-Feasibility Study D – Bankable Feasibility Study
Milestones
Economic Empowerment in the Mining Sector 15
NAMF Hi t & P fNAMF History & Performance• Vintage: March 2003Vintage: March 2003• Commitment Period: Feb 2009
Si R563M $86M (i 2003)• Size R563M or $86M (in 2003)• Reviewed > 400 proposals• Number of Investments: 10• Value realised: 95%Value realised: 95% • Gross IRR (25/01/10): ZAR 41% USD 39%
N t IRR (25/01/10) ZAR 26% USD 24%• Net IRR (25/01/10): ZAR 26% USD 24%
Economic Empowerment in the Mining Sector
16
Targeted Required Rates of Return
M l i l f R Ti V l d IRR
Targeted Required Rates of Return
Multiples of Return, Time Value and IRR
140%
91%100%
108%115%
100%
120%
Ret
urn NAMF
seeks 4x
43% 48% 52% 55% 58%50%
57%63%
68% 73% 78%
59%71%
82%
44%
60%
80%
nal R
ate
of
15%25%
32%38% 43% 48%
19%32%
41%
26%
44%
20%
40%
Inte
rn
0%0%0%0%1 2 3 4 5 6 7 8 9 10
Mutiples of Return (times)Typical 3x & 5 yrs
Economic Empowerment in the Mining Sector 17
5 yrs 4 Yrs 3 Yrs3x & 5 yrs
SS African Mineral DepositsSS African Mineral DepositsHowever, many of the gaps correspond to
zones of low geo-datazones of low geo data
Kalahari sand cover
Economic Empowerment in the Mining Sector
Africa’s Undiscovered ResourcesAfrica requires massive investment into basic Africa requires massive investment into basic
geological mapping in order to assess & valorise its geological mapping in order to assess & valorise its i l t FDI f bli l t FDI f bl k l ti ill lk l ti ill lmineral assets. FDI for bluemineral assets. FDI for blue--sky exploration will only sky exploration will only
come in on an unacceptably high riskcome in on an unacceptably high risk--reward basis! reward basis!
Economic Empowerment in the Mining SectorSource: USGS; Source: USGS; USGS Mineral Resources Program. The USGS Mineral Resources Program. The
Global Mineral Resource Assessment ProjectGlobal Mineral Resource Assessment Project
Some SS African Opportunities(Fe ore, coal/gas deposits)
e.g. Iron/Steele.g. Iron/Steel
Kodo: Kodo Fe; d
Resource Scarcity:Link resource access to
local processing
Nouakchott: Tiris Fe,
Chinguetti gas
Liganga:
S.Sudan gaslocal processing, infra estab/rehab,
inputs industries, HRD, etc
Dakar: Faleme Fe,
C gue gas
g gLiganga Fe; Ruhuhu coal
Buchanan:
etc.Diam gas
Tete: Muande Fe; Moatize coke
Nimba Fe, delta gas Ajaokuta:
Itakpe Fe, delta gas
Gauteng: BC Fe coal fines
Luanda: Kissala Fe Soyo gas
Moatize cokeg
gas line
Matola: Phala Fe, Pande gas
Fe, coal fines
S.Bay: Kathu Fe; Offshore gas?
Fe, Soyo gas
Economic Empowerment in the Mining SectorSource: MINTEK - CDC Presentation
gOffshore gas?
Coega: Kathu Fe, Molteno coal?
R.Bay: Motjoli Fe KZN coal/gas
KK L b hL b hKea Kea LebohaLebohaEnkosiEnkosi
Economic Empowerment in the Mining Sectorwww.motjoli.co.zawww.motjoli.co.za
