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Investor briefing A New Western Australian Gold Company JON PRICE June 2011 For personal use only
Investor briefing
A New Western Australian Gold Company
JON PRICE
June 2011
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Disclaimer & Important Information
• Statements and material contained in this Presentation, particularly those regarding possible or assumed future performance, production
levels or rates, resources or potential growth of Phoenix Gold Limited, industry growth or other trend projections are, or may be, forward
looking statements. Such statements relate to future events and expectations and, as such, involve known and unknown risks and
uncertainties.
• This presentation may describe Measured, Indicated and/or Inferred Resources. Inferred Resources have a greater amount of uncertainty as
to their existence and greater uncertainty as to their economic feasibility. It cannot be assumed that all or any part of any Inferred Resource
will ever be upgraded to a higher category. Exploration is an inherently risky proposition and investors are advised that most exploration
projects fail to identify economic resources. The Company has at present not confirmed the economic viability of any resources at the project.
The company plans further drilling programs and studies with the objective of confirmation of any deposits and ultimately completing a
feasibility study to demonstrate the economics of the resources.
• The information in this report that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Mr
Ian Copeland, who is a Member of The Australasian Institute of Mining and Metallurgy. Mr Copeland is a full-time employee of Phoenix Gold
Limited and has sufficient experience which is relevant to the styles of mineralisation and types 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 Copeland consents to the inclusion in the report of the matters based on his
information in the form and context in which it appears.
• The information contained in this presentation is for informational purposes only and does not constitute an offer to issue, or arrange to issue,
securities or other financial products. The information contained in this presentation is not investment or financial product advice and is not
intended to be used as the basis for making an investment decision. The presentation has been prepared without taking into account the
investment objectives, financial situation or particular needs of any particular person.
• No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness or correctness of the information,
opinions and conclusions contained in this presentation. To the maximum extent permitted by law, none of Phoenix Gold Limited, their
directors, employees or agents, nor any other person accepts any liability, including, without limitation, any liability arising out of fault of
negligence, for any loss arising from the use of the information contained in this presentation. In particular, no representation or warranty,
express or implied is given as to the accuracy, completeness or correctness, likelihood of achievement or reasonableness or any forecasts,
prospects or returns contained in this presentation nor is any obligation assumed to update such information. Such forecasts, prospects or
returns are by their nature subject to significant uncertainties and contingencies.
• Before making an investment decision, you should consider, with or without the assistance of a financial adviser, whether an investment is
appropriate in light of your particular investment needs, objectives and financial circumstances.
• The information on exploration targets in this presentation are based on a conceptual range of targets as follows:
Tonnage 1 million to 30 million tonnes
Grade 0.5g/t Au to 10 g/t Au
Ounces 0.5million to 2 million
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Introduction
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• Listed 22 December 2010
– Focus on Western Australian Goldfields two major shear zones
– Technical team in place, 977k oz Resource
• Commenced drilling early January 2011
– Castle Hill Resource increased 108% to 526k oz at 1.7g/t *
– Maiden Backflip resource of 93koz at 2.5g/t Au*
– Total Resource increase of 42% in 6 months to 1.39M oz*
• Broads Dam acquisitions adds 14km of Zuleika shear strike
• Now plan to accelerate drill program to grow current Resource base
– Extend Castle Hill to + 1M oz
– Grow Broads Dam to + 1M oz
– Explore high priority green fields targets
• Targeting a potential increase of 0.6M oz - 1.0M oz of gold in 18 - 24 months time**.
* Refer slide 24 – JORC Resource Inventory
** Refer slide 2 – Exploration targets
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Phoenix Gold Ltd – Corporate Overview
ASX Code: PXG
Ordinary shares 83 million
Listed options 72 million
Market cap (FD) ~$29 million
Range (since listing) $0.15 – $0.30
Average daily volume ~300,000
Investor %
SHL Pty Ltd 10m 12.1
Cazaly Resources 9m 10.9
Mr JP Price 7m 8.4
Mrs LA Rogers 5.6m 6.8
Cerep Pty Ltd 4.0m 4.8
Directors and Senior Management
Dale Rogers Non executive Chairman
Jon Price Managing Director
Clay Gordon Non executive Director
Ian Gregory Company Secretary
Ian Copeland Exploration Manager
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3 Gold Camps with multi Million ounce potential
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Current tenement holding – over 450km²
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• 2 world class shear zones
– Zuleika Shear
• Home to million ounce deposits
• High grade open pit and underground
potential
• Phoenix tenure underexplored along
strike and at depth
– Kunanalling Shear
• Home to large base load oxide and
transitional ore
• Historic drilling limited to top 60m
• Modern structural geology absent
• Disjointed tenure re-consolidated
• Close to milling and mining infrastructure
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Kunanalling area – 735koz Resource*
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• Castle Hill continues to grow
– Now 526k oz, increased 108% from IPO
– Over 2km strike and still open
– Up to 500m wide mineralised envelope
– Only drilled to average 60m depth
– Latest high grade results demonstrate
linking structures to form 1 large system
– Additional extensional and deeper drilling
needed to assess the extent of the
mineralised zone
• Rayjax drilling proves up high grade veins
– Shallow stacked quartz veins
– Open to south, east and at depth
– Resource release in Q2
– Potential 5-6g/t near term open cut
• Catherwood Feasibility 95% complete
– Resource re-optimised and redesigned
– Previous feasibility in 08 delivered 12k oz
for $4m free cash at A$850/oz gold price
– Report release in Q3
* Refer slide 24 – JORC Resource inventory
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Castle Hill – emerging flagship project
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• Significant intercepts from recent drilling
– 13 metres at 7.4g/t Au from 57 metres,
including 1m @ 83.9g/t.
– 7 metres at 6.9g/t Au from 67 metres,
Including 3m @ 12.4g/t.
– 2 metres at 6.0g/t Au from 23 metres.
– 11 metres at 4.1g/t Au from 89 metres,
Including 1m @ 25.4g/t.
– 11 metres at 2.4g/t Au from 89 metres,
Including 1m @ 12.4g/t.
– 5 metres at 2.3g/t Au from 26 metres.
– 11 metres at 2.0g/t Au from 52 metres,
Including 1m @ 7.2g/t.
– 15 metres at 1.3g/t Au from 77 metres. For
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Castle Hill – high grade drill results
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Rayjax – high grade drill results
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Carbine-Zuleika – 234k oz*
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• Zuleika shear
– Hosts multiple +1Moz gold projects at
+5g/t
– Recent discoveries below old pits using
structural geology and deeper drilling
– Disjointed tenure needed consolidation
• Phoenix acquired 95% of Blue Funnel
– 38,000 oz Resource at 3.9g/t
– Old pit worked to 60m, ore remains in
the floor
– Historic data being re-modelled to
identify drilling targets along strike and
at depth
• Phoenix acquired Broads Dam South
– Consolidated the historical Broads
Dam project
– Increased strike length to 14km on
Zuleika
– Assessing 12 previously defined high
priority drill targets
– Untested to the south and along
tenement boundaries * Refer slide 24 – JORC Resource inventory
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Ora Banda-Grant’s Patch – 397k oz*
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• Backflip – a maiden Resource
– 93k oz at 2.5g/t Au
– New paleochannel identified just outside
the Resource envelope
– Intercepts to nth and sth yet to be tested
• Ora Banda - untouched for over 10 years
– Nazzaris and Boundary first pass drilling
recently completed
– Potential for large scale open cut oxide and
transitional ore bodies
– Potential for staged early development to
generate internal cash flow
– Project update release in Q3
• Cashman’s project review
– Considered lower priority in comparison to
major project areas
– Options under consideration to create value
for shareholders
* Refer slide 24 – JORC Resource inventory
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Backflip – high grade drill results
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Exploration / Development Priorities
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Castle Hill
Broads Dam
Rayjax, Nazzaris
Picante, Carbine North, Backflip extensions, Whitehaven
Lady Jane, Boundary, Magdala, Carbine, Burgundy, Cutters Ridge,
Kintore
Christmas Reef, Boundary, advanced brownfields targets
Second-order greenfields exploration targets
Priority 1
Priority 2
Priority 4
Priority 5
Priority 3
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Next steps: accelerated drilling program
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• Drill program totalling 70,000m over 18 - 24 months
– 20,000m RC extending Castle Hill laterally and at depth
– 20,000m RC extending Broad Dam along Zuleika shear
– 5,000m DD testing depth extensions at Broads Dam
– 25,000m RAB on green fields exploration
• Budget estimate of A$9-10m
• Targeting gold potential increase of 0.6 -1.0m ounces*
• Drill projects sequentially to allow results and remodelling to direct
next drilling round
• Represents a potential $8 -10 / oz discovery cost
• Continuous news flow on a quarterly basis
* Refer slide 2 – Exploration Targets
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Drill program detail: phase 1 to March 2012
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Castle Hill Project Sept Qtr Dec Qtr Mar Qtr TOTAL Strike / depth extensions m 7,500 7,500
Drill cost A$ 1,365,000 1,365,000
Target outcome koz 240 240
Broads Dam Project
Strike / depth extensions m 7,500 7,500 15,000
Drill cost A$ 1,365,000 1,365,000 2,730,000
Target outcome koz 170 130 300
Greenfields exploration
RAB m 4,000 3,000 4,000 11,000
Drill cost A$ 280,000 210,000 280,000 770,000
Soils/geochem/geophys/mag A$ 100,000 100,000 100,000 300,000
Total metres m 11,500 10,500 11,500 33,500
Total Cost A$ 1,745,000 1,675,000 1,745,000 5,165,000
Total Target ounces koz 170 240 130 540
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Milestone timeline
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Jun Qtr
Castle Hill Resource upgrade (√)
Catherwood Feasibility
PFS on advanced mining projects(√)
Sept Qtr
Drill Broads Dam
Mine Nazzari’s stage 1
First ore treatment
PFS on Castle Hill development
Updated Resource and Reserve statement
Dec Qtr
Drill Castle Hill
Castle Hill feasibility study review
3-5 year mine plan and production
profile
Mine Rayjax
Mar Qtr
Castle Hill development review
Drill Ora Banda
Broads Dam PFS
Milling decision – Toll v build
Mine Catherwood
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Exploration success – value proposition
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Resources 1.4m ozs
Ordinary shares 83m
Feb 2012 ($0.20) 36m ($7.2m)
Nov 2014 ($0.25) 36m ($9.0m)
M Cap (FD) at $0.25 $39m
Cash at bank $2.8m
EV diluted $20m
EV/Resource oz $14/oz
Potential 2.2m ozs
Ordinary shares 135.1m
Nov 2014 ($0.25) 36m ($9.0m)
M Cap (FD) at $0.25 $43m
Cash at bank $3.2m**
EV diluted $28.6m
EV/Resource oz $14/oz
18-24
month
drill
program
$9-10m
budget
• Phoenix is targeting a minimum 2.2m oz position* in 18 - 24 months on
the back of its $9-10m budgeted drilling programme.
* Refer slide 2 – Exploration targets
** - includes deduction for acquisition costs
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Increasing Market Coverage
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Issue Framework
Issue Structure
Tranche 1 shares
7,800,000 @ $0.23 A$1.794m
Tranche 2 shares
8,286,955 @ $0.23 A$1.906m
TOTAL
16,086,955 A$3.70m
Use of Funds
Existing Cash (EOMQtr) $2.8m
+ Issue Proceeds $3.7m
= Available Cash $6.5m
+ Feb’12 Opts $7.2m
= Available cash $13.7m
- 18mth Drilling Budget ($9.5m)
= Working Capital $3.2m*
Indicative Timetable 2011
Placement Announced 1 July
Tranche 1 Settled via DvP 8 July
Shareholder Meeting to approve T2 5 Aug
Settlement of Tranche 2 via DvP 10 Aug
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* - includes deduction for acquisition costs ( approx. A$1m in June Qtr)
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Summary
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• Motivated team in place that is delivering on strategic targets
• Highly successful drilling campaigns growing Resources:
– Castle Hill emerging as large near surface project targeting 1m ozs.
– Broads Dam underexplored in highly prospective address
– Greenfields targets identified and prioritised
– Total resource up 42% in 6 months
– Delivering a pipeline of mining projects for potential cash generation
• Very attractive metrics on an EV/resource ounce basis
• World class shear zones untested at depth
• Upside in Resource growth and early development of production pipeline
• Well funded to complete the drilling program and development plan
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The People
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• Dale Rogers – Non Executive Director (Chairman)
– Mining engineer with almost 30 years experience in project development, operations and financing. Developed and managed operations in Australia and overseas. Former MD of Albidon Nickel.
• Clay Gordon – Non Executive Director
– Geologist and mineral economist with 25 years experience in gold mining, business development and project valuation in Australia and overseas. Current Chief Geologist and MD of Mining Assets.
• Jon Price – Managing Director
– Metallurgist with over 20 years experience in the gold sector. Developed several new open cut and underground operations near Kalgoorlie and project managed milling and heap leaching projects in Australia and overseas. Former GM at Paddington and St Ives gold mines in the Goldfields.
• Ian Copeland – Geology Manager
– Geologist and Mining Engineer with over 25 years experience in the Goldfields region. Worked as Geology/Exploration Manager with Barrick Gold, Goldfields Ltd and Placer Dome with vast experience in the Kunanalling/ Zuleika project area.
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JORC Resource Inventory
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Notes: 1. Stockpiles report material mined from historical mining operations at Lady Jane, Broads Dam, Premier, Catherwood, Bluebell, Mick Adam and
Shamrock.
2. The information in this report that relates to Exploration results and Mineral Resources is based on information compiled by Mr Ian Copeland.
Mr Copeland, who is a member of the Australasian Institute of Mining and Metallurgy and a member of the Australian Institute of
Geoscientists, is a full time employee of Phoenix Gold. Mr Copeland has sufficient experience which is relevant to the style of mineralisation
and types of deposits 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 Copeland has given his
consent to the inclusion in the report of matters based on the information in the form and context in which it appears.
3. Information that relates to exploration and production targets refers to targets that are conceptual in nature, where there has been insufficient
exploration to define a Mineral Resource and it is uncertain if further exploration will result in the determination of a Mineral Resource.
4. The information on exploration targets is based on a conceptual range of targets as follows: Tonnage range: 1 million to 30 million tonnes,
grade range: 0.5 g/t Au to 10 g/t Au
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