Forsys Metals Investor Presentation - Marcel Hilmer, CEO - MarketScreener
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Forsys Metals
Investor
Presentation
Q1 2015 Marcel Hilmer, CEO
TSX: FSY | FSE: F2T | NSX: FSY
FORWARD-LOOKING STATEMENTS Some of the statements contained in the following material are forward looking statements and not statement of facts. Such statements are based on the current beliefs of management, as well as assumptions based on management information currently available. Forward looking statements are subject to various risks, uncertainties and other factors that could cause actual results to differ materially from expected results. Readers must rely on their own evaluation of these uncertainties. This presentation uses the terms, “Measured Resources,” “Indicated Resources” and “Inferred Resources.” The Company advises investors that although these classification terms are recognized and required by Canadian regulations (National Instrument 43-101—Standards of Disclosure for Mineral Projects “NI43-101”), they are not recognized by the U.S. Securities and Exchange Commission. Investors are also cautioned not to assume that any part or all of the mineral deposits in these categories will ever be converted to Mineral Reserves. Investors are also cautioned that “Inferred Resources” have a great amount of uncertainty to their existence and economic feasibility. Additional information identifying the Company’s risks and uncertainties is contained in its filings available at www.sedar.com. NI 43-101 and Qualified Persons Mr. Martin Hirsch, M.Sc in Geology and a member of the British IMMM, Chief Geologist for Forsys Metals Corp., is the designated Qualified Person responsible for the Company’s exploration programs. He is familiar with the methods for Quality Assurance and Quality Control specifically applicable to uranium. Mr Hirsch has sufficient experience that is relevant to the style and mineralization, type of deposit and the use of radiometrics in resource estimates as well as to the activity he is undertaking to qualify as a Qualified Person under NI 43-101. Mr. Dag Kullmann, M.Sc. Mining Engineering from the University of Alberta, a Fellow of the Southern African Institute of Mining and Metallurgy (SAIMM), Engineering Manager for Forsys, is the designated QP responsible for the reporting of Mineral Reserves. Mr. Kullmann has sufficient experience in the assessment and application of modifying factors required for the determination of reserves for open pit operations to qualify as a QP under NI 43-101. Investor Presentation | Q1 2015 | Page 2
Advancing
Africa’s
most compelling
uranium project
Namibia
Investor Presentation | Q1 2015 | Page 3
Norasa: A unique project and opportunity
• 79Mlbs of U308 Reserves at 202ppm
• 103Mlbs of M&I Resources + 22Mlbs of Inferred of Resources
Large U308 Project • Long life mine with targeted annual production of 5.2Mlbs
• US$40M in exploration and development expenditure to date
• US$410M NPV post-tax
Strong Technical • 100% of off-take available
• 11.2MTPA plant with low Capex
Report Economics • $34.76/lb Opex for first 5 years
• 6th largest producer in world once in production in 2016
• Namibia is the 5th largest producer of uranium.
• Fair tax / mining codes in a pro-business, stable democracy
Ideal Location • Located 35km from Rio’s Rossing mine & 90ms by sealed road to port
and Infrastructure • Infrastructure for roads, water and power in place or arranged
• Relatively low environmental impact and favourable topography.
Upcoming • Feasibility Study on schedule for release in Q1 2015
• Project financing in Q2/3 2015
Milestones • Construction completed in 2016
Investor Presentation | Q1 2015 | Page 4
CAPITAL STRUCTURE
Forsys Metals Shareholder Base
Shares Outstanding* 119.3 M
1%
Insiders Options* 2.5 M
Fully Diluted* 121.8 M
33%
Retail
Cash** $3.1M
66%
Share Price* $0. 18
Institutional
12 months range $0.15 -$0.60
Avg. daily volume 3 Mths 24 K
Market Cap (diluted) CAD $22 M
* As at January 14, 2015 **As of September 30, 2014
Significant upside potential
Investor Presentation | Q1 2015 | Page 5
URANIUM RECOVERY UNDERWAY
China India Russia U.S.A South Korea World Total*
Under Construction 27 6 9 5 5 70
Planned 64 22 31 5 8 183
Proposed 123 35 18 17 311
Total 204 63 58 27 13 564
Operable 22 21 34 99 23 437
Growth led by
546
New
emerging reactors to
countries without be built or
domestic supply under
construction*
Investor Presentation | Q1 2015 | Page 6 *WNA 1 January 2015
URANIUM SUPPLY CRISIS BREWING
• Annual U3O8 demand 180M lbs but current production supply 150M lbs
• Gap filled by declining secondary sources, e.g. concluded HEU agreement between
U.S.A and Russia
• Strong fundamentals support $65 - $70/lb long-term analyst price forecasts
* Graph Dundee Capital Markets – Q2 2014
Investor Presentation | Q1 2015 | Page 7
URANIUM POSITIVE FUNDAMENTALS
Forecast trend drivers:
• Major global nuclear power
expansion (30% growth by
2020)
• Japan reactor re-starts
• Looming supply imbalance
• Demand for affordable and
clean electricity
• Global power consumption
growing 4% p.a.
Long-term spot price forecast: $66/lb
Investor Presentation | Q1 2015 | Page 8
NAMIBIA
PROVEN
URANIUM
5 th
JURISDICTION largest global producer
of uranium
• Pro-business, stable
democracy
• Fair and balanced tax code
• Metals: uranium, gold,
diamonds, zinc, copper and
11.5% GDP derived from
lead mining
Investor Presentation | Q1 2015 | Page 9
NORASA | IDEAL LOCATION
N
NORASA URANIUM PROJECT
AREVA’S TREKKOPJE MINE
ARANDIS
RIO TINTO’S ROSSING MINE
NAMIBIA
Mine Sites
PALADIN’S
SWAKOPMUND Towns
LANGER HEINRICH MINE
35km from Rio Tinto’s Rossing Mine
Investor Presentation | Q1 2015 | Page 10NORASA | WORLD CLASS
Resources Reserves
Total M&I: 103 Mlbs* Total P&P: 79 Mlbs*
Grade: 197 ppm Grade: 202 ppm
U 3O 8
• Consolidation of 3 zones: Valencia Main / Satellite Pit & Namibplaas
• Estimated Inferred Resource: 50Mt grading 198ppm for 22Mlbs of U3O8
• Open pit environment
* Total Measured & Indicated Resources and Proven and Probable Reserves estimate at cut-off of 100ppm for Valencia and 160ppm for Namibplaas – October 2013
and Q2 2014. Resources include Reserves
Investor Presentation | Q1 2015 | Page 11INFRASTRUCTURE: #1 IN AFRICA*
• Short and medium term supply of water from Areva’s
desalination plant
Water Supply • NamWater’s own desalination plant to provide long term
requirements of up to 20 million cubic metres per annum
• Namibia signed electricity import agreement with
Mozambique in 2013 for 122MW
Power Supply
• NamPower to construct its own 800MW gas power station
in co-operation with Zambian power company
• 26 km of new access road linking Valencia mine to highway
Roads completed in mid 2010. Some internal service roads have
also been constructed
Buildings • Semi-permanent village will be established 8 km from
process plant
* Fraser Institute Report 2012/13
Investor Presentation | Q1 2015 | Page 12NORASA IN PERSPECTIVE
Future Global Producer
6
7520
Top
3386
annual 3146 3065
2661
2305 2289 2135 2011 1955
production
in tonnes U3O8
Data from the World Nuclear Association and Forsys NI 43-101 Technical Report March 27, 2014
Investor Presentation | Q1 2015 | Page 13Norasa: Compelling Economics
20101 20142
$245m $410m
Post-tax NPV Post-tax NPV
$36.43/lb $34.76/lb
Cash Costs3 Cash Costs3
1 Snowden, Valencia Uranium (Pty) Ltd: Addendum to June 2009 Technical Report; Project No 696 dated January 2010
2 Compliant NI 43-101 Technical Report released on March 27, 2014 based on Q1 2014 upgraded reserves estimate
3. Cash costs for the first 5 years of operation. LoM in 2010 is $37.76 and for 2014 is $38.20
Investor Presentation | Q1 2015 | Page 14NORASA | 2014 Technical Report*
Capital cost USD $392M
Plant throughput Mtpa 11.2
Production MLb/pa 5.0
Cash costs - 5 Yrs $/lb $34.76
- LoM $38.20
Average grade ppm 202
Recoveries % 89.1
Revenue (LoM) USD $4.4B
EBITDA $1.8B
IRR % 36.0
NPV (discount rate 8%) USD $410M
* 2014 NI 43-101 Technical Report released on March 27, 2014 and available for download on www.sedar.com. See also
Appendix and News Release: March 27, 2014 for details
Progress through optimization and consolidation
Investor Presentation | Q1 2015 | Page 15VALENCIA ZONE | FULLY PERMITTED
Permit Summary
Permit Issued By Status
Mining Licence (ML149) Ministry of Mines and Energy
Accessory Works Ministry of Mines and Energy
Environmental Clearance —Valencia Village Ministry of Environment and Tourism
Environmental Clearance Ministry of Environment and Tourism
Petroleum Consumer Installation Ministry of Mines and Energy
Desalination Ministry of Agriculture, Water & Forestry
Investor Presentation | Q1 2015 | Page 16NORASA PROJECT SCHEDULE Investor Presentation | Q1 2015 | Page 17
SENIOR MANAGEMENT
Marcel Hilmer 30 years of senior management experience with global public and private organizations, specifically with international mergers and
CEO & Exec. Director acquisitions in Africa, Europe, Asia and Australia. A long standing fellow of the Institute of Chartered Accountants in Australia. Previously,
with First Quantum Minerals Limited as a business development executive.
Rowen Colman A Chartered Accountant with over 25 years of successful senior financial management experience in various global industries and holds a
CFO Bachelor Degree in Commerce from the University of NSW, Australia. Previously, was the Development Director for a major sovereign
wealth fund in the Middle East and guided the fund from start-up to a global powerhouse.
Mark Frewin Was a partner at the international law firm of McCarthy Tétrault, and based in their London England office. Focuses on energy and in
VP Legal Affairs & Director particular mining and metals. Has participated in numerous international mine financings including several for companies which do
business in Africa. Mr. Frewin is also a director of the Company and of IC Potash.has been a director of Caledonian Consultancy Kimited
since June 2013 and a director of Giyani Gold Corp. since June 2012.
Dag Kullmann A Mining Engineer (M.Sc. University of Alberta, Canada, 1989) with over 20 years of experience in the precious, base metals, diamonds,
General Manager & Project coal and uranium mining industry throughout Africa and within Asia and Europe. Acted as Qualified Person for several large and small
Engineer mining companies for the completion of reserve reporting and listing documentation for the JSE, AIM, ASX and TSX.
Martin Hirsch An experienced and professionally registered Geologist with a Master’s Degree in Geology from the Johan Wolfgang-Goethe University in
Chief Geologist Frankfurt A.M, Germany. Has more than 20 years of mining industry experience in opencast mining and exploration project management in
uranium and diamonds. Previously with Rio Tinto’s Rössing Uranium Mineas Chief Geologist and Areva Resources Namibia.
An experienced team – successfully delivering projects on
time and within budget
Investor Presentation | Q1 2015 | Page 18DIRECTORS
Martin R. Rowley Graduated from the University of Western Australia with a Bachelor of Commerce degree in 1975. He worked as executive assistant to
Independent Director & the Board of Directors of a large Australian public company from 1980 to 1984. He then established his own resource consulting and
Chairman investment company and was involved as a shareholder, Director and Chairman of a number of Australian public resource companies
before co-founding First Quantum Minerals Ltd in 1997. Since November 2013 he has been a non-executive Chairman of Galaxy
Resources Limited
Thomas Allen A counsel to Norton Ross Canada LLP, an international law firm, and has extensive experience advising numerous corporations on
Independent Director corporate affairs, corporate governance, corporate financings and reorganizations.
Paul Matysek Served as President and Chief Executive Officer of Lithium One Inc. and Nevada Copper Corp. Has over 35 years of exploration and
Independent Director development experience and has been involved in raising over $200 million for various exploration and development projects since
1999. Has been CEO of Goldrock Mines Corp since November 2012.
Claudio Cornini Founder and current Executive Director of Cornhill and Harvest Ltd. (C&H). Since 2008, C&H has focused on providing small cap and
Independent Director larger private companies with investment, corporate finance and M&A advisory services Prior to this, between 2004 – 2008, He served
as Chairman of AAA Bank in Milan, Italy and concurrently, from 2007 to early 2008, he was in charge of the Network Desk at ABN
AMRO in Italy.
Marcel Hilmer & Details on previous management slide
Mark Frewin
100+ years of experience in African mining
Investor Presentation | Q1 2015 | Page 19VALUATION AGAINST PEERS
3.0
$2.60
2.5
EV/lb ($)
2.0
1.5
$1.20
$0.96
Average
1.0
$0.69
$0.52
$0.82/lb
0.5
$0.23 $0.21 $0.17
0.0
DML.T KIV.V MGA.T UEX.T LAM.T DYL.AX FSY.T BAN.T
Current EV and expected sector recovery
provide attractive entry point
Investor Presentation | Q1 2015 | Page 20 Poised to capitalize on emerging uranium sector
recovery
Mining friendly jurisdiction
Forecast annual production of 5Mlbs of uranium
FORSYS Updated Feasibility Study on schedule for Q1/15
INVESTMENT Large Reserves and strong economics in a low cost
SUMMARY environment
Advancing towards production in 2016
Fully permitted with excellent infrastructure and low
Capex
Proven management with track record of creating
value through successful discovery, development
and production
Investor Presentation | Q1 2015 | Page 21Australian Representative Office
CONTACT Marcel Hilmer, CEO
18 Richardson Street
INFORMATION West Perth WA 6005
+61 (0) 8 9426 6400
info@forsysmetals.com
Namibian Operations
Dag Kullmann, General Manager
1st Floor, Makarios Centre
Cottage Avenue
Swakopmund
+264 (0) 64 402 772
kullmann@forsysmetals.com
Canadian IR and Corporate Services
Joe Racanelli, VP, TMX Equicom
31 Adelaide Street East
Toronto, Ontario M5C 2K3
+1 416-815-0700 ext. 243
jracanelli@tmxequicom.com
www.forsysmetals.com
Investor Presentation | Q1 2015 | Page 22APPENDIX
RESOURCES & RESERVES
• Measured and Indicated Resources based on updated and released Estimate of Resources – 7 October
2013. Resources include Reserves.
• Reserves based on updated and released Estimate of Reserves – February 2014
Investor Presentation | Q1 2015 | Page 24OPEN PIT DESIGNS
Valencia Main & Satellite Namibplaas
Valencia pit design, isometric view with the Namibplaas pit design, isometric view with
higher grade resource blocks within the pits. the higher grade resource blocks within the
Mining licence boundary shown in red. (view pit. (view N)
NNE)
Investor Presentation | Q1 2015 | Page 25NI 43-101 Technical Report*
10.0
Planned Annual Uranium Production 250
Uranium MLbs Head Grade
9.0
8.0 200
7.0
6.0 150
5.0
4.0 100
3.0
2.0 50
1.0
0.0 -
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
Investor Presentation | Q1 2015 | Page 26 * 2014 NI 43-101 Technical Report released on March 27, 2014 and available for download on
www.sedar.com. See also Appendix and News Release: March 27, 2014 for detailsYou can also read
