1 Mo, Cu & Fe Metals For Our Time September 2009 MOL_MoCuFe_Roadshow_Sept_20090901 1.pptx 2009 Roadshow Dr Derek Fisher CEO Moly Mines Ltd
Disclaimer 2 This presentation includes forward looking statements as that term within the meaning of securities laws of applicable jurisdictions. Forward looking statements involve known and unknown risks, uncertainties and other factors that are in some cases beyond Moly Mines control. These forward looking statements include, but are not limited to, all statements other than statements tt t of historical i facts contained ti din this presentation, tti including, without t limitation, those regarding Moly Mines future expectations. Readers can identify forwardlooking statements by terminology such as aim, anticipate, assume, believe, continue, could, estimate, expect, forecast, intend, may, plan, potential, predict predict, project project, risk risk, should should, will or would and other similar expressions. Risks, uncertainties and other factors may cause Moly Mines actual results, performance, production or achievements to differ materially from those expressed or implied by the forward looking statements (and from past results, performance or achievements). These factors include the failure to complete and commission the mine facilities, processing plant and related infrastructure in the time frame and within estimated costs currently planned; variations in global demand and price for molybdenum and copper; fluctuations in exchange rates between the U.S. dollar and the Australian dollar; failure to recover the resource and reserve estimates of the Project; the failure of Moly Mines suppliers and service providers to fulfil their obligations under construction, supply and tolling agreements; unforeseen geological, physical or meteorological conditions, natural disasters or cyclones; changes in the regulatory environment, industrial disputes, labour shortages, political and other factors; the inability to obtain additional financing, if required, on commercially suitable terms; and global and regional economic conditions. Readers are cautioned not to place undue reliance on forward looking statements. We assume no obligation to update such information.
Company Overview Corporate ASX and TSX listed: Trading Symbol MOL Shares on issue: 93,995,677 Options: 5.8M (1) (2) Warrants: 17.9M (TCW) (1) (3) Cash: A$64M (1) Debt: A$217M (1) Share Price (September 1, 2009): C$1.16 Market Capitalization: C$109M Brokerage Coverage: Paradigm Capital, Haywood Securities, StoneBridge Group 2009 Year to Date 3 $1.80 7,000,000 Share Pirce (C$) $1.60 $1.40 $1.20 $1.00 $0.80 $0.60 $0.40 $0.20 Volume Share Price 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 $0.00 Jan 09 Feb 09 Mar 09 Apr 09 May 09 Jun 09 Jul 09 Aug 09 Sep 09 0 Note: (1) As at June 30, 2009 (2) Includes the 304,000 options exercised since June 30, 2009 Exercise prices range from A$0.40 to A$3.00 maturing in next 4 to 16 months (3) Exercise price of A$0.0001 maturing in 2018 Moly Mines Limited
Project Overview 4 Spinifex RidgeMolybdenum / Copper Project Fully permitted, engineered, ready for development at 20 Mtpa. Engineering underway on 10 Mtpa start up. A$100M long lead lead equipment for 20 Mtpa mine manufactured in Germany and delivered to Australia. Spinifex RidgeIron OreProject D.S.O. 59% iron ore. 1 Mtpa. Production mid 2010. Location on Spinifex Ridge mining leases. Australia Moly Mines Limited
Experienced Owner & Project Teams 5 Board of Directors Mr. David Craig Chairman An experienced businessman and lawyer, who has held and holds Executive and Board positions in the fields of law, financial services and the resources industry. Appointed as Chairman in 2009 Management Team Mr. Collis Thorp Chief Operating Officer 40 years mining experience, having operated and managed open-pit and underground mines in Australia and internationally. Experience covers precious, base and specialty metal operations, including gold, tin, tungsten, titanium and zircon. Dr. Derek Fisher CEO/Managing Director Over 38 years of worldwide experience in the resource industry, more than 20 years experience as a manager of publicly listed resource companies, in addition to serving as a director of mining companies that developed mines in Australia, Mongolia, Armenia and the DRC. Mr. David Constable A professional geologist with over 25 years Canadian and international exploration and development experience. Mr. Mike Gloyne General Manager Operations A mining engineer with 25 years of extensive industry experience including open-pit pit mine management, mining contractors management. Mr. John McEvoy Chief Financial Officer Extensive experience, having spent 17 years in senior finance roles in both the public and private mining sector. Mr. Michael Senft Over 25 years investment banking experience having held senior executive roles with Merrill Lynch and UBS in New York and London. Mr. Andrew Worland Company Secretary, General Manager Commercial & Marketing Extensive finance, corporate and investor relations experience in the resources sector, over 13 years in senior finance and corporate roles. Mr. David Nixon A mechanical engineer with 40 years experience in the mining and construction industries in Southern Africa, Australia, New Zealand, Canada and Indonesia. Moly Mines has established a quality technical & management team experienced in all aspects of project financing, development, construction, mining & processing and operations, demonstrating low management risk in the project. Moly Mines Limited
TCW Debt & Restructure 6 Debt US$183 Million repayable October 31, 2009. Security MOL s assets including: Long lead equipment. Mo/Cu deposit. Fe deposit. Restructure US$183 Million to be restructured by Nov 30, 2009. US$43 Million repaid from cash reserves. Minimum equity raising of US$25 Million by 30 November 2009. US$140 Million of debt with varying maturities 15% coupon. US$40M 18 months, equipment excess to 10 Mtpa Mo/Cu. US$56M 2 years, Equity debt. US$24M 2 years, equipment, 10 Mtpa Mo/Cu US$20M 5 years, Fe ore mine. First US$25M of cash raised applied to Fe development and advance engineering for 10 Mtpa Mo Project. Additional equity raised reduces 2 year Equity debt. Excess equipment available for immediate sale. Moly Mines Limited
Capitalisation Pre & Post Equity Raising 7 A$M Outstanding at 31 Mar 09 Pre Funding Unaudited Outstanding at 31 Mar Unaudited outstanding at 31 09 following completion of Mar 09 following completion of minimum offering (1) and debt an US$80m offering & debt restructuring restructuring Cash (5) 98 36 (2) 36 (2) Total Debt 227 (3) 202 (2,3) 123 (2,3) Shareholders Equity 165 203 (4) 286 (4) Retained Earnings Total Capitalisation i 165 203 286 Due < 1 year 156 Excess Equipment (18 months) 40 40 Equity Debt (2 years) 56 1 10 Mt Equipment (2 years) 24 24 Fe Debt (5 years) 20 20 Total Debt US$M 156 140 85 Total Debt A$M 227 202 123 (1) US$25M net capital raising (assuming no TCW debt converted to equity). (2) Converted AUD/USD rate as at 31 March 2009. (3) MOL had an additional A$0.12M in finance lease liabilities as at 31 Mar 2009. (4) Includes 5% equity raising fee. (5) Cash balanced reduced in period to 30 June 2009 mainly related to equipment payments. Moly Mines Limited
Located in well established mining province 8 100kms Dampier Australia Karratha Port Hedland 1 Major Road Rail Major Mj Port Gas Pipeline Marble Bar Chichester Range (Fe) Yarrie (Fe) Spinifex Ridge Woodie Woodie (Mn) Nifty (Cu) Telfer (Au, Cu) Highlights h Spinifex Ridge is located in the East Pilbara region in northern Western Australia Primary road transport to and from the site to Port Hedland The existing roads are in excellent condition and fully capable of handling tripletrailer road trains (Au, Cu) The Project is likely to use existing port facilities at Port Hedland for seaborne transportation Tom Price (Fe) Paraburdoo (Fe) 95 Established service industries to support major mining W e s t e r n operations Mt Newman (Fe) A u s t r a l i a Proximity to Asian steel industry. Spinifex Ridge Projects
9 Spinifex Ridge Molybdenum Project China Information
Reserves and Mineral Resources 10 Reserves JORC / NI43 101 classification Mt Mo% Cu% Ag g/t Proven reserves 199.7 0.06 0.10 1.5 Probable reserves 251.1 0.04 0.07 1.1 TOTAL 450.8 0.05 0.08 1.3 Resources JORC / NI43 101 classification Mt Mo% Cu% Ag g/t Measured resources 206.8 0.06 0.10 1.5 Indicated resources 445.4 0.04 0.07 1.1 Highlights h 20 Mtpa 23 year Reserve life Expansion potential 24Mlb Mo in concentrate per annum 27Mlb Cu in concentrate per annum TOTAL 652.2 0.05 0.08 1.3 Inferred resources 399.0 0.04 0.07 1.1 Note Reserves are a sub set set of Resources 0.02% Mo cut off assumed for resources 0.03% Mo cut off assumed for reserves Spinifex Ridge Molybdenum Copper Project
Low-Risk / Low Cost Open Pit Mining 11 Highlights h Conventional open pit Australia Port Hedland (170kms) Pit design has been optimised to maximise grades early and to fit processing requirements Waste 1 Waste 2 Low Grade Stockpile Fe Pits Mo Camp / Village ROM Airstrip Dry Stack Tailings Favourable mining characteristics Deposit is porphyry p ywith continuous mineralisation Minimal grade control or dilution issue low grade halo de risks mining High Grade Plant & Minimal requirement for selective Stockpile Administration mining Mo \Cu Pit Pit Mining fleet based on conventional open pit mining equipment Waste 3 Creek Diversion Channel Pit Office/ Workshops Specified equipment or alternatives can be readily mobilised by contractors Conventional comminution and flotation processing Dry stack tailings operational/environmental advantages Spinifex Ridge Molybdenum Copper Project
Phase 1 Startup Project 12 10 Million tonne per annum (Mtpa) Initial head grade 0.07% Mo, 0.11% Cu (1 st 10 years) 10 Mtpa Resource Pit Shell 12 13 Million lbs Mo per year Utilises same large scale equipment as 20 Mtpa plant. Scoping Study completed March 2009. Reduced Capital A$528M (plus A$70M for power station if not financed by 3 rd party) 0.02% Mo Shell 20Mtpa Resource Pit Shell 0.09% Mo Shell High Grade Core 0.04% Mo Shell Spinifex Ridge Molybdenum Copper Project
Long Lead Equipment Orders Completed 13 Spinifex Ridge Molybdenum Copper Project
Long Lead Equipment Orders Delivered 14 Spinifex Ridge Molybdenum Copper Project
Long Lead Equipment Stored In Perth 15 Spinifex Ridge Molybdenum Copper Project
20 Mtpa versus 10 Mtpa 16 vs Funding hurdle for 10 Mtpa scenario significantly lower 20 Mtpa 10 Mtpa BFS Bankable Feasibility Study completed Smaller scale development study outputs Capital (incl power station) A$1,232M Capital (excl power station) A$604M $0.80 FX US$986M $0.80 FX US$483M Spent to date US$60M Spent to date US$60M Funding Required (1) US$926M Funding Required (1) US$423M (1) Excludes working capital and other financing requirements (i.e. debt service) Spinifex Ridge Molybdenum Copper Project
Scenarios Spinifex Ridge Molybdenum Project Scenarios 17 Capital Cost A$M 10 Mtpa Base Case $674 10 Mtpa Including Credits for Capex Already Expended $598 11.3 Mtpa Case $718 11.3 Mtpa Including Credits for Capex Already Expended $642 With US$25M raised MOL retains 10 Mtpa equipment for 2 years. 10 Mtpa Base Case utilises 1 ball mill, 1 HPGR and 2 secondary crushers (MOL will replace 20 Mtpa primary crusher). 11.3 Mtpa scenario uses 1 additional HPGR relatively cheap expansion option. Spinifex Ridge Molybdenum Copper Project
Mine Statistics 18 10 Mt/a Case Mine Plan Expansion Case Mine Plan (20Mt/a year 7 onwards) Year 1 10 11 23 LOM Year 1 10 11 23 LOM Waste (Mt) 180 47 227 Waste (Mt) 227 268 495 Ore Mined (Mt) 148 88 236 Ore Mined (Mt) 227 224 451 Waste to Ore ratio 1.2 0.5 1.0 Waste to Ore ratio 1.0 1.2 1.1 Mill Feed (Mt) 88 148 236 Mill Feed d(m (Mt) 128 323 451 Mill Feed Mo (% Mo) 0.07 0.05 0.06 Mill Feed Mo (% Mo) 0.06 0.04 0.05 Mill Feed Cu (% Cu) 0.11 0.08 0.09 Mill Feed Cu (% Cu) 0.1 0.08 0.08 Mo Recovery (%) 84 90 87 Cu Recovery (%) 64 68 66 Mo Production (Mlb) 107 143 250 Cu Production (Mlb) 135 181 316 Mo Recovery (%) 84 89 87 Cu Recovery (%) 64 67 66 Mo Production (Mlb) 146 282 428 Cu Production (Mlb) 182 372 554 10 Mtpa case significantly reduces capital hurdle. Initial 10 Mtpa mine plane is a subset of 20 Mtpa case full reserve still available. Initial development targets high grade core. Spinifex Ridge Molybdenum Copper Project
Economics High and Low Case Scenarios 10 Mt/a Case 19 Scenario EBITDA (A$M) Pre tax NPV (A$M) Pre tax IRR (nominal converted) High Case ( US$30/lb) 292 1,444 26.2% Low Case (~ current spot ) 149 343 15.3% 3 Year Average Case ( US$25/lb) 244 1,050 22.5% Expansion Case (to 20 Mt/a) Scenario EBITDA (A$M) Pre tax NPV (A$M) Pre tax IRR (nominal converted) High Case ( US$30/lb) 459 2,251 28.7% Low Case (~ current spot) 220 578 16.5% 3 Year Average Case ( US$25/lb) 396 1,669 24.7% Project provides strong returns on various Mo pricing scenarios Fe project can provide additional returns. Spinifex Ridge Molybdenum Copper Project
20 Spinifex Ridge Iron Ore Project China Information
Iron Ore Project Overview Hematite direct shipped ore (DSO) 59% Fe. Location within Spinifex Ridge Mo mining leases. Falls under the Mo/Cu permitting. Commence production Q2/2010. Close to Port Hedland within trucking distance. China market nearby 21 Spinifex Ridge Iron Ore Project
Location Map 22 EL Exploration Licence Iron Ore Resource 6.1 Mt @ 59% Fe 1.5kms Rockchip Sample Granite GPL General Purpose Lease 64.7% Fe Granite 59.2% Fe 55.8% Fe 60.2% Fe Basalt Iron Formation Basalt 55.2% Fe Ultramafic 56.1% Fe Basalt Felsics 61.4% Fe 61.9% Fe 61.6% Fe 55.1% Fe Basalt Basalt Molybdenum Copper Resource 652Mt @ 0.05% Mo, 0.08% Cu Ultramafic Basalt ML Mining Leases Granite Spinifex Ridge Iron Ore Project
Resource 23 Resource 6.1 Mt @ 59% Fe tonnes Fe% SiO2 Al2O3% P% S% LOI% Indicated 6,110,000 58.9 8.5 1.7 0.15 0.006 4.7 Inferred 1,160,000 57.2 12.8 0.9 0.15 0.011 4.1 50% Fe cut off Resource includes Auton, Auton North East, Dalek lkand Gallifrey. 162 RC and diamond drill holes for 11,011m to an average depth of 70m Spinifex Ridge Iron Ore Project
Site Layout 24 Port Hedland (170kms) NORTH Auton Waste Dump Dalek Gallifrey Spinifex Ridge Molybdenum Copper Deposit (500m) ROM Pad, Crushing, Ore Stockpile Marble Bar(50kms) Resource 6.1 Mt @ 59% Fe Spinifex Ridge Iron Ore Project
Development Scenarios 25 Open pit, 3:1 strip ratio. 1 Mtpa production rate. Dalek Capital cost ~A$9.4 Million. Initial portaccess feeis estimated ata$2.4 4Million. Opex ~A$45 per tonne FOB Port Hedland. Auton Iron ore FOB Port Hedland (62.5% Fe). (Forecast 2009 benchmark @ 80c FX) A$76 per tonne fines Gallifrey A$93 per tonne lump (Metal Bulletin June 30) Spinifex Ridge Iron Ore Project
Mine Development Open pit mining: i 3:1, three ore bodies. Contract mining. 1 Mtpa production rate. Simple processing; 2 stage crushing and screening equipment readily available. Lump / fines 40/60. Truck (115 tonne road trains) haulage to Port Hedland 190km. Shipping out of Utah Point at Port Hedland access to port announced September 2009. 26 Spinifex Ridge Iron Ore Project
Operating Scenarios Mining Numerous contractors available. Crushing, screening Contract operators. Haulage Numerous in Port Hedland hauling Manganese, Chrome, Iron and Salt. 30km unsealed road then 160km to Port Hdl Hedland. d Haulage rates applied based on third party operating quotation systems. 27 Spinifex Ridge Iron Ore Project
Operations Description 28 Spinifex Ridge Minesite Stockpiles Haulage from pit Fines stockpile (<6.0mm) Road haulage to Port Hedland Lump stockpile (>6.0mm 32.0mm) Crushing & Screening at site Stockpiles at Port Ship loading & Export Spinifex Ridge Iron Ore Project
Project Timeline 29 PFS Reserve Statement Port Access Fee Contract Tenders & Award Mining Approval Construction Mining Pre strip First Ore Production First Ore Shipment Commercial Production Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Spinifex Ridge Iron Ore Project
Financial Parameters 30 Production Ore 5.2Mt Waste 15.6Mt Total 20.8Mt Strip Ratio 3.0 Grade Fe 59% Marketing Traders Mills Strategic Partner Financial Capital Cost ~AUS$9.4M Operating cost per tonne: Unit Cost ($/t) Mining 11 Crushing 4 Haulage 19 Port 7 Admin/O/H / 5 A$46 Capex ~A$9.4 Million pa. (excluding contingency & port deposit) Payback expected to be ~18 months from first positive cash flow. Spinifex Ridge Iron Ore Project
31 MOL revaluation post debt restructure Remaining debt supported by strong assets & Fe cash flows Mo \Cu Project World class, with staged development option Can be brought quickly to production Fe Project Early cash flow underpins company while awaiting Mo Project. MOL An Option on China!
Competence and Responsibility 32 The information in this release that relates to drill data and geological interpretation is based on information compiled by Dr Derek Fisher, Mr Brendan Cummins who are Members of the Australasian Institute of Mining and Metallurgy. The information in this release that relates to Mineral Resources is based on information compiled by Mr Clay Gordon who is a Member of The Australasian Institute of Mining and Metallurgy and the Australian Institute of Geoscientists. Dr Fisher is employed by Trillium Investments Pty Ltd which is contracted to provide management services to Moly Mines, Mr Cummins is a fulltime employee of Moly Mines and Mr Gordon is employed by Mining Assets Pty Ltd. All of Dr Fisher, Mr Cummins and Mr Gordon have 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 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. They consent to the inclusion in this release of the matters based on their information in the form and context in which it appears.
33 50 Kings Park Rd, West Perth, WA, 6005, AUSTRALIA Telephone: +61 8 9429 3300 Fax: +61 8 9429 3399 Telephone: +1 416 777 1801 Fax: +1 416 777 1802 Email: info@molymines.com Website: http://www.molymines.com Stock market codes: ASX: MOL, TSX: MOL, FWB: HJ1 Moly Mines Contact Details