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Heemskirk Heemskirk Tin Project Tin Project - - Tasmania Tasmania CEO Peter Blight February 2012 For personal use only
HeemskirkHeemskirk Tin Project Tin Project -- TasmaniaTasmaniaCEO Peter Blight
February 2012
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CorporateASX Code: SRZ (listed April 2005)Shares on Issue: 191.5MShare Price: 8.3c (12 month range: 4-24c)Market Capitalisation: $16M Cash: $4.0M (Feb 12) Investment: $0.6M (USA shareholding)
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Ownership StructureTop 20 67%Gippsland Ltd 23%RCF 15%Other Institutional 4%Private Investors 58%
Board & ManagementPhil Harman – Non-Executive ChairmanTom Burrowes – Non-Executive DirectorDr David Isles – Non-Executive DirectorDr Tom Whiting – Non-Executive DirectorPeter Blight – Chief Executive OfficerChris Kemp – Company Secretary
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Focused on tinRapidly advancing Heemskirk Tin near Zeehan, Tasmania – single commodity - single project focusEstablished mining regionGood historical drilling data basePotential to discover blind depositsMining and environmental scoping are positiveProject target: production by early 2015
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Simplifying Ownership StructureHistorical JV – 60% Stellar, 40% Gippsland with Stellar as operatorStellar acquired Gippsland’s 40% for 43.5 m Stellar shares and a royaltySimple share transaction with no changes to Stellar board or focus100% ownership allows Stellar to control program through to productionOwnership impediments to financing, feasibility and development removed
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Tin prices recover strongly
Tin demand expected to rise to 362,000 tonnes in 2012
Supply shortfall for 5 of last 6 years
LME stocks have declined to minimal level
Strong price recovery to US$25,000/tonne since Dec 20115
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LME StocksLME Price
Tonnes US$/tonne
40% price rise 2012 YTD
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Growth dominated by solder
Tin recycling is becoming more important, particularly in China,and now represents 22% of global demand
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Source: ITRIFor
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Where is tin mined?F
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Not enough in ITRI project list
8Source: ITRI
Company Project Country CapacityMinsur San Rafael tailings Peru 7,500Syrymbet Syrymbet Kazakhstan 6,500Kasbah Resources Achmmach Morocco 5,600Amerilangui Ujin Narsiin Khundlen Mongolia 5,200TMR Ltd Offshore dredges Indonesia 5,000Metals X Rentails Australia 4,000Stellar Resources Heemskirk Australia 4,000Venture Minerals Mount Lindsay Australia 3,700PT Timah Deep Offshore Dredges Indonesia 3,600Consolidated Tin Mines Mt Garnet Australia 3,200Adex Mining Mount Pleasant Canada 3,200Deutsche Rohstoff Gottesberg Germany 3,000Yunnan Tin Wuchangping China 3,000Sinchi W ayra Colquiri tailings Bolivia 2,700Silver Standard Pirquitas Argentina 2,500
Total 62,700
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Great location - multiple deposits
Heemskirk tin project and St Diziertin deposit 100% owned
Significant mining district
Easy access to water & power
Sealed road between both deposits
Rail & road connect to Burnie port
18 km from Australia’s largest tin mine Renison Bell
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High Grade ResourceHeemskirk Mineral Resource 4.4mt grading 1.1% tin 48kt of contained tin in 3 nearby deposits
Queen Hill, 1.6Mt @1.2% tin as indicated resource
All deposits open at depth
Highest grade tin project with JORC resource
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Heemskirk Mineral ResourceDeposit Indicated Inferred Total
kt % Sn kt Sn kt % Sn kt Sn kt % Sn kt SnQueen Hill 1,600 1.2 19 1,600 1.2 19Montana 360 1.6 6 360 1.6 6Severn 2,400 0.9 23 2,400 0.9 23Total 1,600 1.2 19 2,760 1.0 29 4,360 1.1 48cut-off grade 0.6% tinestimated on 3 March 2011 by Mining One Pty Ltd
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Positive Metallurgy
Traditional high-sulphide tin ore processing circuit proposed – comparable with Renison Bell circuit
Tin present as cassiterite rather than more difficult to treat stannite
Pre-concentration works well
Mineral characterisation shows potential to produce 50% tin concentrate at 70% recovery
Test work is on-going
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Scoping study greenlight
Internal rate of return of 21% & 3.5yr payback advance project to pre-feasibility stage
US$12,780/t cash cost positions project competitively on the industry cost curve
Life of mine revenue of $673 million net of smelter charges
600,000 tpa throughput over 7.6 years provides economies of scale
3,900 tpa of tin in concentrate production ranks project as 2nd in Australia to Renison Bell
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Conservative project assumptions
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Parameter Units Assumption Comment
Mine life years 7.6 minimum life
Mining dilution % 15 typical for underground mines
ROM grade % 0.93 average resource grade is 1.1%
Treatment rate tpa 600,000 drawing from all three deposits
Recovery % 70 target rate
Tin in concentrate tpa 3,900 average annual production rate
Concentrate grade % 50 typical grade
Tin price (net) US$/t 22,500 net of 10% smelting charge
Exchange rate US$ 1.00Operating cash cost US$/t tin 12,780 43% operating margin
Capital cost US$m 108 pre-production capital
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Competitive cost structure
14 Cash cost estimates are provisional and used with permission from ITRI.
Existing production Major new projects
Heemskirk US$12,780/t
Current tin price & marginal cost of production US$25,000/t
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Excellent exploration potential
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Severn Long Section
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ZS107A shows that high grade continues at depth
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Feasibility Program
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Indicative Timing Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Drilling Severn Extension RL Exploration Queen Hill Extension Montana Extension Infill DrillingMetallurgyEnvironmental PrefeasibilityFeasibility Financing
2012 2013
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How does Heemskirk compare?
Advanced tin project
Positive scoping study adds momentum
Highest grade tin project with JORC resource
Excellent exploration potential on tenement
Project located near mining infrastructure
Well positioned to smelters in SE Asia & China
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Low Cost Opportunity
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Opportunity for re‐rating & share price upside
Enterprise Value per Tonne Tin in Resources ($/T)
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Disclaimer
Forward Looking StatementThis presentation contains only a brief overview of Stellar Resources Limited (“Stellar") and its activities and operations. The contents of this presentation, including matters relating to the geology of Stellar’s projects, may rely on various assumptions and subjective interpretations which it is not possible to detail in this presentation and which may not have been subject to any independent verification.
This presentation may contain a number of forward-looking statements. Known and unknown risks and uncertainties, and factors outside of Stellar’s control, may cause the actual results, performance and achievements of Stellar to differ materially from those expressed or implied in this presentation. To the maximum extent permitted by law and stock exchange listing rules, Stellar does not warrant the accuracy, currency or completeness of the information in this presentation, nor the future performance of Stellar, and will not be responsible for any loss or damage arising from the use of the information.
Competent Person’s StatementThe drill and exploration results reported herein, insofar as they relate to mineralisation, are based on information compiled by Mr R.K. Hazeldene who is a Member of the Australasian Institute of Mining and Metallurgy. Mr Hazeldene has sufficient experience relevant to the style of mineralisation and type of deposits being considered to qualify as a Competent Person as defined by the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code, 2004 Edition). Mr Hazeldene consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. It should be noted that the abovementioned exploration results are preliminary.
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Stellar Resources LimitedLevel 17, 530 Collins Street
Melbourne VIC 3000Phone +61 3 9618 2540 Fax +61 3 9649 7200
www.stellarresources.com.au
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