Disclaimer
Information presented is not guaranteed to be accurate or complete
Targets are conceptual only. Only if stated are resources JORC compliant
Check veracity of information for yourself
This is resources exploration – things can and do go wrong
Things change with time – keep your eyes on the ball
We are not liable for anything you conclude from this presentation
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09/09 12/09 03/10 06/10 09/10
Share Price $ M
Market Cap
Share Price
Royal SnapshotIssued Securities
- 261,753,735 Fully Paid Shares- 4,006,677 Listed Options (ROYO) - 34,763,356 Listed Options (ROYOA)- 26,770,000 Unlisted Options
Share Price at 19/11/10 $0.17Market Cap $44MCash $13M
Experienced management team:Philip Crabb ChairmanMarcus Flis Managing DirectorFrank DeMarte Executive DirectorBrian Richardson Non-executive DirectorMalcolm Randall Non-executive Director
Directors Shareholdings 12%Top 20 shareholders 44%
Share structure
Retail64%
Directors12%
Sin-Tang13%
ABN Amro8%
Norilsk Nickel
2%
Thundelarra1%
The Razorback Iron ProjectA high tonnage, outcropping magnetite deposit
with access to infrastructure
Regional Geology
RAZORBACK PROJECT
Located in the Neoproterozoic Adelaide Geosyncline (>c1,500 Ma)
Sandstones, iron rich siltstones and tillites of the basal Adelaidean Series were deposited during the Sturtian Period
Collectively, these units constitute the Braemar Iron Formation and were deposited in a cold, quite, shallow water environment
The area was deformed in the DelamerianOrogeny (ca 500Ma) to form the Nackara Arc
The Braemar Iron Formation is not a banded iron formation, but a bedded magnetite
Local StratigraphyLocally, the Braemar Iron Formation consists of up to seven cycles of glacial and inter-glacial sediments, labelled Members A to G
Each cycle consists of up to three units:
Interbedded magnetite
tillitic magnetite
bedded magnetite
Members B and D are the current focus for resource definition drilling
Member G will be assessed in early 2011(Lottermoser & Ashley, 2000)
Ore types
Interbedded magnetite with alternating layers of iron rich and iron poor shale
tillitic magnetite – a magnetite shale with tillitic dropstones
bedded magnetite – a magnetite rich shale
Extensive Braemar Iron Formation held Aeromagnetic data flown by Royal shows extent of magnetite target (white areas in the image)
Over 110km strike length of virgin target horizon with huge geological resource potential
Razorback Ridge size and quality now supported by drilling data
31% magnetite shell31% Magnetite shell
3D Magnetic Modelling of RazorbackLooking SW Magnetic data is a direct
predictor of magnetite concentrations
Has been used in exploration drilling
Is being used in resource drilling
Will be used in long-term mine planning
27% Magnetite shell26% Magnetite shell25% magnetite shell
Modelled magnetite shell at Razorback Ridge
North-south model cross section showing dip of magnetite horizon
Over 100m thickness of ore at a moderate dip
Adit dug into hill by the SA government in the 1960s, now refurbished
Razorback Initial JORC Inferred Resource Model
Domain Mt Fe% SiO2% Al2O3% P% LOI%B1 44.9 34.1 32.7 4.9 0.23 4.4B2 108.4 23.9 43.0 7.3 0.19 5.2B3 53.5 25.5 41.6 6.6 0.22 5.0D 70.3 24.2 44.4 7.2 0.20 4.8Total Resource 277.0 25.9 41.4 6.7 0.20 4.8
Access to existing, available, open-user railMine to rail is ~28km
Rail has 10Mtpa capacity availableand expandable through theaddition of passing loops
Services up to three available ports
Cartage cost will be substantiallybelow that of other operationsaccessing third-party rail
Access to this rail and ancillary infrastructure translates to over $750 M savings in CAPEX compared to similar magnetite projects in Australia
Access to existing, available, open user portsPt Pirie (~180km distance)
• Handy ship capable (<40,000t)
• Option to trans-ship to Panamax or Cape sized vessels
Pt Adelaide (~390km distance)
• Sea container operation
Pt Bonython (proposed, ~350km distance)
• Cape-size capable
Option for an alternative port solution (~200km distance)
Occurs in an infrastructure-rich areaHigh voltage transmission lines
Cooper Basin – Adelaide gas pipeline
On the edge of the Murray ArtesianBasin
Dormitory towns
Mining towns
Heavy industries
Within 3 ½ hours drive from Adelaide
Mineralisation is not a banded iron formation:
It is a bedded magnetite (Cold Water Iron)
Host is a clastic rock, not a chemical
precipitate
Ore breaks along grain boundaries, not across
crystal faces
Low crushing cost
low grinding cost: initial tests indicate
8.5kWh/t (cf bifs @ 18 – 22kWh/t)
Very low sulphides and other exotic minerals
Phosphorous, titanium, and vanadium occurs as
detrital minerals
BIF structureBIF structure
Bedded magnetite structureBedded magnetite structure
Easy Liberation
Zero stripping ratio initially, very low for LoM
Geologically and mineralogically simple and consistent
Amenable to continuous surface mining techniques avoiding the need for drill and blast
It is likely to be a low cost producer
Its not all just about head grade!
AssumptionsRazorback grade: JORC Inferred ResourceBIF grade: Assumed global averageMining costs: $5/t assumedOre hardness: Initial testing, Razorback
Fe Tech 2010 for WA bifsPower costs: 22.54c/kWh (WA)
13.2c/kWh (SA)Rail costs: Mid West average (WA)
Quote (SA)
Razorback Iron Project
Typical Australian
BIF
Cost benefit to Razorback
Head Grade, Fe 26% 35%
Weight Recovery 20% 40%
Strip Ratio 0:1 2:1
ROM mined to produce 1t of product 5t 7.5t $12.50
Ore hardness (kWh/t) 8.5kWh/t 20kWh/t
Ore to crush & grind (t) 5 2.5
Power cost/t $5.61 $11.20 $5.59
Infrastructure Railing cost/t $10.00 $22.00 $12.00
$30.09
Grade
Mining
Crushing & grinding
Razorback Advantage/t
Will produce a clean concentrateConcentrate size Fe% SiO2% P% Al2O3% MgO% Na2O% TiO2% S%
Head grade 28.15 39.20 0.22 6.14 2.56 1.01 0.41 0.012
150μm 59.22 13.47 0.04 1.26 0.52 0.26 0.13 0.006
106μm 62.98 9.72 0.03 0.81 0.35 0.18 0.07 0.005
75μm 68.10 4.28 0.01 0.29 0.16 0.11 0.03 0.003
45μm 70.48 1.73 0.005 0.08 0.07 0.05 0.02 0.004
Note low phosphorous, alumina, magnesium, sodium, titanium, and sulphur in the concentrates
55
60
65
70
75
150μm 106μm 75μm 45μm
Fe%
Grind Size
55
60
65
70
75
150μm 106μm 75μm 45μm
Fe%
Grind Size
Low Native Title, environmental & social risks
“....no areas that need to be avoided for mining activities because of the presence of significant vegetation, fauna or habitat”
Rural Solutions SA, July 2010
Razorback
No Native Title
High local community support
Blue sky potentialCollectively, the area contains in excess of 110km strike of the target lithology
Only 3km of a possible 35km strike has been drilled to define the initial Inferred Resource on Red Dragon
The SA Govt. has awarded Royal a drilling co-funding grant, recognising the prospectivity of this area for iron ore industry development
10 km
Magnetite is attracting a price premium
Source: Platts, May 2010
US$/dmt
% Fe
Magnetite is currently attracting a $5/%Fe/t premium. If a 68% product is produced, that premium totals US$30/t, or over half the beneficiation, mining, and port cost.
2010: A Watershed for Razorback Completed high resolution aeromagnetic survey and geological mapping
Signed an MOU with Flinders Ports Pty Ltd for export facilities
Completed Fauna and Flora baseline surveys
Signed an MOU with Genessee & Wyoming Australia on rail access
Phase I drill-out of Razorback Ridge completed (>12,000m)
Maiden Inferred Resource of 277Mt announced in August 2010
Initial drilling at Interzone and Iron Peak prospects to extend the mineralisation
Metallurgical testing
Start the Pre Feasibility Study
Full Disclaimer and Competent Person’s StatementThis presentation has been prepared by Royal Resources Limited (ABN 34 108 102 432) (“Royal”) based on information available to it. 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 Royal, its related bodies corporate, its or their directors, employees or agents, advisers, nor any other person accepts any liability for any loss arising from the use of or reliance on this presentation or anything contained in, omitted from or otherwise arising in connection with it, including, without limitation, any liability arising from fault or negligence on the part of Royal, its related bodies corporate or its or their directors, employees or agents.
Royal Resources acknowledges exploration targets set out in this presentation are not to be interpreted as Mineral Resources or Ore Reserves unless specifically stated as being JORC compliant. Quoted targets are based on the interpretation of host rock prospectivity, volume of rock, and assumed densities. The potential quantity and grade is conceptual in nature and there has been insufficient exploration to define a mineral resource and it is uncertain if further exploration will result in determination of a mineral resource.
The details contained in this report that pertain to ore and mineralisation is based upon information compiled by Mr Marcus Flis, a full-time employee of the Company. Mr Flis is a Fellow of the Australasian Institute of Mining and Metallurgy (AUSIMM) and 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 December 2004 edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves” (JORC Code). Mr Flis consents to the inclusion in this report of the matters based upon his information in the form and context in which it appears.
The distribution of this document in jurisdictions outside Australia may be restricted by law and you should observe any such restrictions.
This presentation is not an offer, invitation, solicitation or recommendation to invest in Royal and neither this document nor anything in it shall form the basis of any contract or commitment. The information in this presentation does not take into account the investment objectives, financial situation and particular needs of investors and does not constitute investment, legal, tax or other advice. Before making an investment in Royal an investor should consider whether such an investment is appropriate to their particular investment objectives , financial situation and particular needs and consult a financial adviser if necessary. This presentation does not purport to constitute all of the information that a potential investor may require in making an investment decision. Investments are subject to investment risk, including possible delays in repayment and loss of income or principal invested. Royal does not guarantee the performance of the investment referred to in this presentation, the repayment of any capital invested or any particular rate of return.
Nothing in this presentation is a promise or representation as to the future. Statements or assumptions in this presentation as to future matters may prove to be incorrect and differences may be material. Royal does not make any representation or warranty as to the accuracy of such statements or assumptions.
You acknowledge that circumstances may change and the contents of this presentation may become outdated as a result. Royal accepts no obligation to correct or update the information or opinions in this presentation. Opinions expressed are subject to change without notice.
By accepting this document, you agree to be bound by the above limitations.
ContactRegistered OfficeLevel 3, IBM Building PO Box 7525 1060 Hay Street Cloisters Square WEST PERTH WA 6005 PERTH WA 6850
Telephone: +61 8 9322 8542Facsimile: +61 8 9322 6577
Australian Securities Exchange Code: ROY
For further information:MD & CEO Marcus FlisChairman Phil Crabb
[email protected] www.royalresources.com.au