Minara Presentation. Agenda. Peter Johnston. Achievements in 2005 Financial performance Challenges/opportunities for 2006 Growth Summary

Transcription

1 Minara Presentation Peter Johnston Managing Director and CEO February 2006 Agenda Achievements in 2005 Financial performance Challenges/opportunities for 2006 Growth Summary 2 1

2 The journey 2005 A year of Consolidation BNM 2002/ Financial Restructuring Capital Injection Consolidation Growth Minara Timeline 3 Significant Achievements in 2005 Mining fleet purchased and delivered Completed statutory shutdown Split the H 2 S plant Initiated business improvement plan Settled legacy issues Glencore writ Improved production trends 4 2

3 Financial Position Full year Net Profit - $43.0 million $72m cash on hand Unhedged currency or commodity Minimal Debt (mining fleet) Strong cash flow Dividend maintained Accounts IFRS compliant Financial Performance Statutory maintenance shutdown Statutory maintenance shutdown 6 3

4 Murrin Murrin Production 2005 Production 28,240 tonnes Nickel and 1,750 tonnes Cobalt Production reduced due to statutory shutdown & acid spill Improving production profile Record production in December A statutory maintenance shutdown was included in both 2003 and 2005 Minara s share is 60% 7 Challenges for 2006 Consistent production Utilities - acid plant - hydrogen sulphide plant Costs - labour - materials - lead times Maintenance Turnover 8 4

5 Operations Production profile improving - mining - plant uptime - feed density - autoclave availability - refinery efficiency Maintenance focus on H2S and acid plants No new technical issues Record short term production - Aug, Sep, Oct -Dec 9 Business Improvement Ore Leach % Solids Each 1% solids adds 1200 tonnes pa nickel production % increase in density Baseline Jun-05 Jul-05 Aug-05 Sep-05 Oct-05 Nov-05 Dec-05 Jan

6 Process Improvement - Nickel In Ore Budget Monthly Average ROM Feed Grade (Ni) 1.25 Ni % Cost Containment industry wide issue Focus on volume - 70% of costs are fixed Business Improvement Program - Focus on scheduled maintenance - Shutdown management - Contractor management Focus on Labour - New rosters - Traineeships/apprenticeships/graduates - New pay structure Capital Management - Tight control with significant hurdle rates 12 6

7 The journey Growth BNM 2002/ Financial Restructuring Capital Injection Consolidation Growth Minara Timeline 13 Heap Leach Culmination of 5 years R&D Additional $12m R&D investment over next 2 years $25m investment in demonstration plant Initially treat scats then ore Low risk, known technology Low capital cost, low operating cost Synergies with current plant 14 7

8 Exploration Focus on sulphide nickel Three joint ventures Bardoc, Windarra, Irwin Hills/Coglia Fourth opportunity under consideration Own projects: Marshall Pool - Existing laterite resource, possible sulphides Weld Range - Nickel/copper/PgE prospect 15 Exploration Coglia Well and Yilgarn Joint Venture Covers 60km strike of laterite deposits and sulphide potential Opportunities sulphides laterite feed cobalt upgrade heap leach Intersections 0.26%Co 0.30%Co Resource 0.26%Co 16 8

9 Current opportunities Operating HPAL plant 3 rd party residues/ oxides/ sulphides Unused refining capacity nickel up to 60,000tpa cobalt up to 5,000tpa Unused acid plant capacity Exploration Heap leach Scats/ore Murrin Murrin Marshall Pool 17 Summary 9

10 Conclusion Healthy balance sheet Improving HPAL production Second production stream from heap leach Nickel market fundamentals remain sound Improving returns for shareholders Dividend: 5c/sh, total payout last 15 months: 35c/sh Growth options positive Improving production at Murrin Murrin Heap leach Exploration, including JV s 19 About Minara 10

11 History Founded in 1994, previously known as Anaconda Nickel Ltd Debt restructure and recapitalisation in 2002/2003 Name changed in Dec 03 to Minara Resources Ltd Minara will be the world s 10th largest nickel producer at Murrin Murrin Murrin Murrin is a 60/40 Joint Venture between Minara and Glencore International AG At capacity Murrin Murrin will produce 40,000 TPA Nickel, 2,500 TPA Cobalt before any expansion 21 Murrin Murrin Location 125E o 120 E o Wyndham 20S o o 115 E North West Shelf Gasfield Karratha Port Hedland Newman Calcrete Mining 25 S o 30 S o Carnarvon Perth Meekatharra Wiluna Mt Margaret Geraldton Leonora Jimberlana Ravensthorpe Murrin Murrin Kalgoorlie Murrin Murrin East Murrin Murrin North Deposits Plant Area and Tailings Disposal Reference Karratha Mt Korong Albany Major Town or City Other ANL Projects Road Railroad Goldfields Gas Pipe Line K Esperance Scale km Murrin Murrin South Deposit 22 11

12 Murrin Murrin Facility UTILITIES REFINERY ORE LEACH 23 Murrin Murrin - Resources/Reserves RESERVES: 2005: 1.09% Ni and 0.087% Co (2004: 140mt) Resources: 334million 0.99% Nickel and 0.064% Cobalt 40 plus years mine life at nameplate capacity Recent acquisitions at Coglia Well/Irwin Hills being drilled out to determine resource 24 12

13 Minara Overall Resource Position Murrin Murrin 0.99% Ni Marshall Pool 0.69% Ni Weld Range 0.75% Ni Irwin Hills/Coglia 0.7% Ni TOTAL 1,010 mt for 8.1mt contained nickel 25 Improvement in safety better than industry norm continuing focus on lead indicators Murrin Murrin Injury Frequency Rates Frequency rate per million hours worked Ja n - Ma r 2004 Apr - Jun 2004 Jul - Sep 2004 Oct - D ec 2004 Ja n - Ma r 2005 Apr - Jun 2005 Jul - Sep 2005 Oct - Dec 2005 Lost Time Injury Frequency Rate Lost Time and Disabling Injury Frequency Rate LTI / DIFR - Target 26 13

14 Minara s Murrin Murrin 10th largest nickel producer in the world 300 World Refined Nickel Production by Producer 250 Production ('000t) Murrin Murrin at full capacity 50 0 Norilsk Nickel Inco (+Tokyo Ni) BHP Billiton Falconbridge Jinchuan Eramet Sumitomo Cubanickel Parmco Murrin Murrin JV OMG Sherritt Larco Source: AME; Macquarie Research 27 Laterite Nickel Supply - lessons Require strong technical base Capital intensive Infrastructure important Maintenance intensive Volume and grade dependent Minimum 5-8 years development Alternative leaching options emerging Atmospheric Heap leach 28 14

15 Nickel price and stocks history Nickel price US$/tonne LME stocks tonnes 20,000 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 Jan- 89 Jun- 90 Nov- 91 Apr- 93 Sep- 94 Feb- 96 Jul-97 Dec- May- Oct- Mar- Aug Jan- Sep , , , , , Cobalt Price US$ /mt Jan-05 Feb-05 Metal Bulletin 99.3% Price Mar-05 Apr-05 May-05 Jun-05 Jul-05 Sep-05 Oct-05 Nov-05 Dec

16 Minara Share Price MRE share price $3.50 $3.00 $2.50 $2.00 MRE share price 1 July Sept c cap return 5c dividends Daily trade 50,000,000 40,000,000 30,000,000 $1.50 $1.00 $0.50 $ Jul 21-Aug 13-Oct 03-Dec 29-Jan 22-Mar 14-May 07-Jul 27-Aug 19-Oct 09-Dec MatlinPatterson exit register 04-Feb 31-Mar 24-May 15-Jul 06-Sep 27-Oct 19-Dec 10-Feb 20,000,000 10,000,