January Mt and growing. Low cost Established mining jurisdiction Infrastructure solution Metallurgical product suite

Transcription

1 January Mt and growing Low cost Established mining jurisdiction Infrastructure solution Metallurgical product suite

2 IMPORTANT INFORMATION Important Information This presentation has been prepared and issued by Atrum Coal NL ("the Company") to inform interested parties about the Company and its progress. The material contained in this presentation sets out general background information on the Company and its activities. It does not constitute or contain an offer or invitation to subscribe for or purchase any securities in the Company nor does it constitute an inducement to make an offer or invitation with respect to those securities. No agreement to subscribe for or purchase securities in the Company will be entered into on the basis of this presentation. The information supplied is in summary form and does not purport to be complete. The Company, its directors, officers, employees, agents, affiliates and advisers have not verified the accuracy or completeness of the information, statements and opinions contained in this presentation. Accordingly, to the maximum extent permitted by law, the Company makes no representation and gives no assurance, guarantee or warranty, express or implied, as to, and takes no responsibility and assumes no liability for, the authenticity, validity, accuracy, suitability or completeness of, or any errors in or omission from, any information, statement or opinion contained in this presentation. You should neither act nor refrain from acting in reliance on this presentation material. This overview of the Company does not purport to contain all information that 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 and when making any decision in relation to this presentation or the Company. The information in this presentation does not take into account the objectives, financial situations or needs of any particular individual. you should consider seeking independent professional advice based on your own objectives. To the extent permitted by law the Company, its directors, officers, employees, agents, affiliates and advisers exclude any and all liability (including, without limitation, in respect of direct, indirect or consequential loss or damage or loss or damage arising out of negligence) arising as a result of the use of anything contained in or omitted from this presentation. All statements, other than statements of historical fact, included in the presentation, including without limitation, statements regarding forecast cash flows, future expansion plans and development objectives of the Company are forward-looking statements. Although the company believes that the expectations reflected in such forward-looking statements are reasonable, they involve subjective judgement, assumptions and analysis and are subject to significant risks, uncertainties and other factors, many of which are outside the control or, and are unknown to the Company. Accordingly, there can be no assurance that such statements or expectations will prove to be accurate and actual results and future events may differ materially from those anticipated or described in this presentation. Historic information is not an indication or representation about the future activities of the Company. The Company disclaims any obligation or undertaking to disseminate any updates or revisions to any information contained in this presentation reflect any change in expectations, events, conditions or circumstances on which that information is based. This presentation is provided on a strictly private and confidential basis, to be used solely by the recipient. Neither this presentation nor any of its contents may be reproduced or used for any other purpose without the prior written consent of the Company. In accepting this presentation, the recipient agrees that it is provided solely for its use in connection with providing background information on the Company and that it is not used for any other purpose. Exploration Targets This presentation refers to Exploration Targets as defined under Section 18 of the JORC Code. The Exploration Target quantity and quality is conceptual in nature. There has been insufficient exploration to define a mineral resource and it is uncertain if further exploration will result in the Exploration Target being delineated as a mineral resource. Competent Person Statement The information in this document that relates to Mineral Resources or Ore Reserves is based on information compiled by Robert J Morris M.Sc P.Geo, who is a Member of a Recognised Overseas Professional Organisation (ROPO) included in a list promulgated by the ASX from time to time, being the Canadian Institute of Mining and Metallurgy. Mr Morris is a consultant of the independent consulting firm Moose Mountain Technical Services and has sufficient experience which is relevant to the style of mineralisation and type of deposit and mineralisation under consideration by them and to the activity which they are 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 Morris 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 in this document that relates to Exploration Results is based on information compiled by Brad Van Den Bussche B.Sc P.Geol, who is a Member of a Recognised Overseas Professional Organisation (ROPO) included in a list promulgated by the ASX from time to time, being the Canadian Institute of Mining and Metallurgy. Mr Van Den Bussche is a full time consultant to Atrum Coal NL being the Chief Technical Officer and has sufficient experience which is relevant to the style of mineralisation and type of deposit and mineralisation under consideration by them and to the activity which they are 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 Van Den Bussche consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. 2

3 EXECUTIVE SUMMARY HIGH VALUE PRODUCT > Canadian metallurgical coal focus FUNDING OPTIONALITY > Four 100% owned projects LOW COST > Open cut targets with scale CLEAR PATH TO PRODUCTION > Clear infrastructure solution GROUNDHOG PROJECT (100%) CAPITAL STRUCTURE Shares on issue Share price Market capitalisation Cash (approximately) EV Partly paid shares Performance rights Shares on issue (fully diluted) MAJOR SHAREHOLDERS 102,487,500 $0.285 $29 million $4.1 million $24.9 million 38,125,000 11,050, ,662,500 ASX Code: ATU Directors and Key Management 39% DIRECTORS & KEY MANAGEMENT James Chisholm Non Executive Chairman Russell Moran Executive Director Gino D Anna Executive Director Dr Eric Lilford Technical Director Lyle Hobbs Chief Executive Officer Cameron McLean Chief Financial Officer 338Mt 107Mt Indicated / 231Mt Inferred Brad Van Den Bussche Glenn Collick Chief Technical Officer Chief Relationships Officer 3

4 MARKET COMPARABLES COMPANY ASX LOCATION SHARE PRICE COAL TYPE RESOURCE & RESERVES MARKET CAP EV EV/TONNE Bathurst Resources BTU NZ $0.415 Coking 126Mt $289M $249M $1.99 Cokal CKA Indonesia $0.17 Coking & PCI 46Mt # $70M $50M $1.08 Attila Resources AYA Alabama $0.65 Coking 57Mt # Carabella Resources CLR QLD $0.395 Coking & Thermal 141Mt $60M $41M $0.29 Tigers Realm Coal TIG Russia $0.175 Coking 162Mt # $73M $60M $0.36 Jameson Resources JAL Canada $0.275 Coking & Anthracite Nil $43M $38M N/A Aspire Mining AKM Mongolia $0.15 Coking 353Mt # $93M $79M $0.22 Atrum Coal ATU Canada $0.285 PCI, Anthracite & Coking 338Mt $29M $24.9M $0.074 Source: Recent Company Reports (16/01/13) # Equity interest in Resource Tonnes $2.00 $1.80 EV/TONNE UPSIDE 1. Re-rating of EV/Tonne upwards to peer average $1.60 $1.40 $1.20 $1.00 $0.80 $0.75/tonne peer average 2. Increase in JORC Resource beyond existing 338Mt at Groundhog $0.60 $0.40 $0.20 $- BTU CKA TIG CLR AKM ATU 4

5 ORGANISATIONAL STRUCTURE DIRECTORS AUSTRALIA JAMES CHISHOLM NON EXECUTIVE CHAIRMAN > Engineering & M&A Background > Founded a number of ASX listed coal companies > Chairman at Ebony Coal Limited RUSSELL MORAN EXECUTIVE DIRECTOR > Mining, Oil & Gas M&A Background > Founded a number of exploration companies > Non Executive Director at Ebony Coal Limited GINO D ANNA EXECUTIVE DIRECTOR > Investment banking and corporate advisory background > Has been a director of several junior ASX listed exploration companies DR ERIC LILFORD TECHNICAL DIRECTOR > Mining Engineer and Investment Banker > Former MD of ASX listed junior anthracite coal exploration company and former Head of Mining at Deloitte Touche Tohmatsu KEY MANAGEMENT CANADA LYLE HOBBS CHIEF EXECUTIVE OFFICER > 24 years experience with project development and logistics focus BRAD VAN DEN BUSSCHE CHIEF TECHNICAL OFFICER > Professional geologist with 27 years experience in coal industry > Mining engineer with MBA > Held positions with Gulf Canada Resources (4 yrs) and Norwest > 18 years at Highvale & Resources (6 yrs). Whitewood Coal Mines, one of largest coal operations in Canada GLENN COLLICK CHIEF RELATIONSHIP OFFICER > 25 years experience in the natural resources sector > Responsible for managing relationships with First Nations, Environment Canada and Ministry of Energy and Mines STRUCTURE ATRUM COAL NL 100% 100% 100% 100% ATRUM COAL USA INC ATRUM COAL GROUNDHOG INC ATRUM COAL PEACE RIVER INC ATRUM COAL NASKEENA INC 5

6 PROJECT LOCATIONS 107Mt JORC Indicated 231Mt JORC Inferred Mt 250Mt Target 0-25Mt Target Four 100% owned metallurgical coal projects in Canada s resource rich British Columbia province 6

7 ANTHRACITE COALS METALLURGICAL APPLICATIONS ULTRA LOW VOLATILE COAL > Most favoured PCI due to: > low ash, low sulphur, high calorific values, high carbon content and low volatile matter. > The replacement ratio of low volatile semi-anthracite / anthracite to coking coal varies according to the requirements of each blast furnace, however typically,: > 1.0 tonne of low-volatile semi-anthracite / anthracite can replace 1.5 tonnes of more expensive coking coal. > ULV is increasingly sought by steel mills in preference to high volatile bituminous coal that has traditionally been used as PCI coal > ULV provides superior performance in the blast furnace due to higher carbon and energy content. > The worldwide shortage of coke and its relatively high price further strengthens future demand for ultra low volatile semi-anthracite / anthracite. METALLURGICAL APPLICATIONS > Metallurgical reductants / charge carbon (US$ /t) > Ultra low volatile PCI (10-15% discount to HCC prices) > Sinter > Other products: > Filter media (US$1000/t) > Blend coal with coking coal for making metallurgical coke > Direct coke replacement 1.0 tonne of Ultra LV PCI can replace 1.5 tonnes of more expensive coking coal RISING DEMAND FALLING SUPPLY LOWER EMISSIONS 7

8 INCREASING DEMAND CHINA / KOREA / JAPAN China became a net importer of anthracite in 2004 Ultra LV PCI prices expected to improve steadily beyond US$150/t Groundhog Project >500Mt demand increase over the next decade with limited new production potential 8

9 WORLD ANTHRACITE PRODUCTION CHINA / VIETNAM / KOREA Groundhog Project Growing Asian demand and constrained seaborne supply 9

10 GROUNDHOG COAL RESOURCE HIGHLIGHTS > 22,815 hectares (100% owned) > 18 granted Coal Licences and 8 Coal Licence Applications > JORC Resource of 338Mt: JORC CATEGORY Indicated Inferred Total RESOURCE 107Mt 231Mt 338Mt > Current JORC Indicated and Inferred resource between 0 200m: JORC RESOURCE BREAKDOWN BY DEPTH 0 50m 0 100m 0 150m 0 200m 25.3% 57.6% 83.5% 96.3% Groundhog Project 85.3Mt 194.6Mt 282Mt 325.2Mt Indicative resource envelope for 338Mt > Atrum expects to grow resource base significantly - further upgrade expected Q Significant upgrade to global resource expected following integration of 2012 drilling results Q

11 GROUNDHOG OPEN CUT POTENTIAL HIGHLIGHTS > 338Mt JORC Indicated and Inferred resource > 8 coal seams between 0 and 200m based on historical drilling and trenching > Amenable to low cost open cut mining with ~ 195Mt occurring between 0 and 100m depth > Resource expected to continue at depths below 200m > Semi anthracite to anthracite coal rank > Primary product at Groundhog is expected to be ultra low volatile coals for application to the steel and ferro-alloy industries > Potential for premium products; coke replacement, charge carbon, reductants, filter media, sinter Mountain Example cross-section section taken from 338Mt JORC resource model Valley Floor 2 x Conceptual Pits Mountain ROM STRIP RATIO > Based on current resource estimated: > 41Mt < 7.7 : 1 > 140Mt < 10 : 1 > 246Mt < 12 : 1 COMPARISON > Tigers Realm Coal > 12.1 : 1 for US$88/tonne cash costs > Jellinbah - Lake Vermont > Coking/PCI > 8: 1 > Whitehaven - Tarrawonga > Thermal/PCI > 9.7: 1 > Whitehaven - Vickery > Thermal/PCI > 10: 1 Favourable ROM strip ratio estimates compared to peers 11

12 GROUNDHOG DRILLING RESULTS HIGHLIGHTS > Multiple shallow coal intersections encountered up to 8.2m in thickness from surface to a depth of 400m > DDH-GH intersected 36.0m and DDH-GH intersected 30.4m of cumulative coal in multiple seams between 0 and 400m depth > 20m cumulative coal average across multiple seams North Zone GROUNDHOG TENURE Central Zone East Zone Southern Zone Thicker coal seams than originally expected Groundhog project boundaries including newly acquired licence applications 2012 drill campaign target zones Recent 15 diamond cored drill holes currently being coal quality tested, seam correlated and incorporated into resource model 12

13 GROUNDHOG PROJECT DEVELOPMENT PROGRAM HIGHLIGHTS > Targeting ultra low volatile metallurgical coals > Extensive exploration database includes 38 diamond core drill holes for approximately 10,000m > Awaiting interpretation of 15 diamond cored drill hole program carried out by the Company in late 2012 > Over 800 coal samples sent for detailed coal quality testing with washed coal quality testing throughout Q > Further JORC Resource upgrade anticipated March 2013 > Scoping study and coal product market assessment commissioned in November 2012 results expected end of Q Washed coal quality data adjacent to Groundhog central core area suggests very high ranking semi-anthracite to anthracite coal INDICATIVE COAL QUALITY Air Dry Yield Volatile Fixed Ash Moisture (SG 1.65) Matter Carbon Sulphur Calorific Value (kcal/kg) Seam % 60.6% 10.3% 5.9% 83.9% 0.39% 7,480 Seam % 80.6% 5.3% 5.5% 89.1% 0.79% 8,056 Seam % 69.4% 6.7% 6.7% 87.7% 1.32% 7,915 Seam % 47.7% 9.0% 5.6% 85.4% 0.35% 8,024 Average 0.63% 65.8% 7.6% 6.1% 86.8% 0.84% 7,874 Data: Clean Coal Analysis Core Hole 7004 (Quintana Minerals Wash Data, 1970) Source: Moose Mountain Technical Services, Discovery Resource Estimate, 2010 Drill Depth: Core samples taken at 29.9m, 72.3m, 79.1m and 136.6m depth Wash Test: 1.65 SG Clean Coal Float Analysis Dry Basis Historical drilling at Groundhog 13

14 GROUNDHOG INFRASTRUCTURE RAIL PORT POWER WATER > 30km of rail easement with an upgrade required to link to existing rail > Direct access to rail siding following easement upgrade > 1,200km by direct rail link to Ridley Coal Terminal at Port of Prince Rupert or, 1,260km to Vancouver Metro > Ridley Coal Terminal at Port of Prince Rupert or Vancouver Metro deep sea optionality > Comparable shipping distance to Asia as Australia with 150,000 tonne Capesize vessel capacity > Ridley Coal Terminal currently using 70% of 16Mtpa capacity and upgrading to 24Mtpa by 2015 with a 40Mt+ progressive upgrade pipeline > Ability to connect to Main Lines for power requirements at the project location > Rivers traverse the project boundary for year round water supply The Groundhog Project has a clear path to production with robust rail, port, power and water infrastructure optionality 14

15 GROUNDHOG PROJECT SCHEDULE NoW lodgement First Nations access agreement Appointment of drilling, camp and helicopter contractors NoW grant Campsite installation Drilling and logging Coal quality analysis Resource definition Infrastructure and mine scoping study Coal marketing & product assessment Rail & port stakeholder discussions Preliminary surface infrastructure identification Preliminary coal handling & process review Pre feasibility study Bulk sampling Bankable feasibility study Baseline environmental studies Environmental approvals Mining licence approval Offtake discussions Project financing Rail & port access agreements Mine planning & pre development Mine construction First coal production Aug Sept Oct Nov Dec Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 On track and on budget 15

16 OTHER PROJECTS NASKEENA > 11,400 hectares (100% owned) > Mt Exploration Target > Open cut targets > 25 diamond drill holes and 8 trench samples completed between 2006 and 2008 > Simple truck and shovel operation potential > Historical coal seam intersections of 0.3M 2.4m thick > 150km from deep sea port PEACE RIVER > 5,325 hectares (100% owned) > Initial 0-25Mt Exploration Target > Located in a known coking coal region with 4 operating coal mines within a 40km radius of the project area > Significant resource development projects within the Peace River coalfield > In close proximity to Walter Energy, Xstrata, Cadero Resources, Anglo American and Teck Resources > Extensive road access to property, located within 16km of Tumbler Ridge BOWRON RIVER > 3,750 hectares (100% owned) > Extensive historical drilling, exploration and sampling on adjacent project to the north indicates significant coal bearing geology > 35km from rail siding at Hansard > Lower seam has an average thickness of 3.4m whilst the upper seam has an average thickness of 2.4m > Lower seam is continuous in the south and east of the project area as demonstrated in 1981 drilling Mt Target 0 25Mt Target N/A 2013 DEVELOPMENT > Review of existing drilling data for potential delineation of JORC Resource > Surface trenching of outcropping material for sampling and analysis of coal quality > Geophysical analysis > Drill target planning 2013 DEVELOPMENT > Notice of Works currently being prepared for lodgement > Trenching/Sampling program planned for October/November > Geotechnical mapping to identify drilling targets > Drill target planning for 2013 drill program 2013 DEVELOPMENT > Notice of Works currently being prepared for lodgement > Trenching/Sampling program planned for October/November > Geotechnical mapping to identify drilling targets > Drill target planning for 2013 drill program 16

17 CANADA EXPORT ADVANTAGE HIGHLIGHTS > Second largest metallurgical coal exporter > Low sovereign risk > Favourable regulatory environment > Extensive and regulated infrastructure; extensive railway cheap power deep water sea ports with cape size capacity high quality road network > Comparable shipping distance to Asia when compared to that of the east coast of Australia 17

18 BRITISH COLUMBIA PORT CAPACITY Well established deep sea ports with expanding coal handling capacity Ridley Terminal (Prince Rupert) Neptune Terminal (Vancouver Metro) Westshore Terminal (Vancouver Metro) 18

19 BRITISH COLUMBIA SHIPPING TIMES AND DESTINATIONS Shipping times in number of days from BC s two main ports to major destinations in Asia are as follows: JAPAN KOBE NAGOYA OSAKA TOKYO YOKOHAMA Prince Rupert Vancouver Metro KOREA INCHEON PUSAN Prince Rupert Vancouver Metro CHINA DALIAN GUANGZHOU HONG KONG SHANGHAI TIANJIN XIAMEN ZHANJIANG Prince Rupert Vancouver Metro INDIA CHENNAI KOLKATA MUMBAI VISAKHAPATNAM Prince Rupert Vancouver Metro Shipping times competitive with Australian east-coast ports 19

20 BRITISH COLUMBIA M&A ACTIVITY RECENT METCOAL TRANSACTIONS Western Canada has seen significant M & A activity: > Walter Energy acquires Western Coal - $3.3 billion > Anglo American acquires 25% of Peace River Coal held by NEMI and Hillsborough - $166 million > Xstrata acquires First Coal and Lossan - $193 million > Winsway and Marubeni jointly acquire Grand Cache Coal - $1 billion > Xstrata acquires Sukunka asset from Talisman Energy - $500 million > JX Nippon acquires 25% in Xstrata Coal BC JV - $435 million 20

21 GROUNDHOG COAL TYPE Low High Groundhog is host to high ranking semi-anthracite to anthracite coals 21

22 CONTACT Project Area Airstrip & Camp Railway Subgrade Russell Moran Gino D Anna James Chisholm Nathan Ryan Executive Director Executive Director Non-Executive Chairman Investor Relations M M M M E russell@atrumcoal.com E gino@atrumcoal.com E james@atrumcoal.com E nathan@atrumcoal.com 22