Mines & Money: World Mining Congress Australia Day Presentation - December 2008 EXCO RESOURCES N.L.
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Mines & Money: World Mining Congress
Australia Day Presentation
EXCO RESOURCES N.L.
December 2008
Presented by Michael Anderson – Managing Director
DISCLAIMER
This presentation contains forward looking statements that are subject to risk factors associated
with resources businesses. It is believed that the expectations reflected in these statements are
reasonable but they may be affected by a variety of variables and changes in underlying
assumptions which could cause actual results or trends to differ materially, including but not
limited to: price fluctuations, actual demand, currency fluctuations, drilling and production
results, reserve estimates, loss of market, industry competition, environmental risks, physical
risks, legislative, fiscal and regulatory developments, economic and financial market conditions
in various countries and regions, political risks, project delay or advancement, approvals and
cost estimates.
All references to dollars, cents or $ in this presentation are to AUS$ currency, unless otherwise
stated.
Information in this presentation relating to mineral resources and exploration results is based on
data compiled by Exco’s Exploration Manager Stephen Konecny, BSc Hons Geo. (MAusIMM),
Mr Mike Dunbar, (who is a full time employee of the Mitchell River Group and a consultant to
Exco Resources Ltd), and who is a member of The Australasian Institute of Mining and
Metallurgy, and Mr Laurie Barnes (who is a full time employee of the Mitchell River Group and a
consultant to Exco Resources Ltd) and who is a member of the Australian Institute of
Geoscientists. Mr Konecny, Mr Dunbar and Mr Barnes have sufficient experience which is
relevant to the style of mineralisation and type of deposit under consideration and to the activity
which they are undertaking to qualify as Competent Persons under the 2004 Edition of the
Australasian Code for reporting of Exploration Results, Mineral Resources and Ore Reserves.
Mr Konecny, Mr Dunbar and Mr Barnes consent to the inclusion of the data in the form and
context in which it appears.
2
AGENDA
• Introduction to Exco
¾ Financial Summary
¾ Corporate Strengths
• Project Portfolio
¾ Queensland Copper Projects
¾ South Australia – White Dam
• Development Options
¾ Cloncurry Copper Project (CCP)
¾ Ore Supply scenario
¾ White Dam Joint Venture
¾ Ivanhoe Joint Venture
• Why invest in Exco?
3
SNAPSHOT OF EXCO (ASX:EXS)
EXS – Ordinary Shares 254,083,625
- Employee Options 14,500,000
Share Price (20/11/08) A$0.10
- 12-month range A$0.10 - A$0.43
Market Capitalisation (undiluted) A$25.4M
(fully diluted) A$26.8M
Current Cash (at end Q3/08) A$10.6M
Board of Directors
Major Shareholders
Barry Sullivan Chairman
Ivanhoe Australia Ltd 19.9 %
Michael Anderson Managing Director
Alasdair Cooke Executive Director Lion Selection Group Limited 10.4 %
Craig Burton Non-Exec Director Alasdair Cooke 6.4 %
Peter Reeve Non-Exec Director TOP 10 56 %
4
CORPORATE STRENGTHS
CASH POSITION The Company has a healthy cash position and
remains adequately funded to achieve immediate
objectives
MANAGEMENT Exco’s Board & Management team have a track
record of delivery, and a commitment to create long
term value for shareholders
QUALITY ASSETS Exco has large, strategic ground holdings in some
of Australia’s most prospective base metal terrains.
The established resources provide a critical mass
which underpins the Company’s development
strategies
OPPORTUNITY Exco’s project portfolio offers a number of near-
term opportunities to create cash flow and a
platform to grow a significant business
PROJECT
EXCO RESOURCES N.L.
PORTFOLIO
NW QUEENSLAND
Exco holds a strategic 4,100km2, land
position across 3 main centres in QLD:
- Cloncurry
- Hazel Creek / Boomarra
- Soldiers Cap / Tringadee
Geology highly prospective for Cu-Au-U
Key Activities:
(1) Resource Development
(2) Regional Exploration
(3) Joint Ventures
(4) Project Development
7
NW QLD - RESOURCE BASE
GRADE METAL
PROJECT DEPOSIT JORC TONNES
Cu % Au g/t Cu T Au Oz
E1 North * 63% Indicated 12,300,000 1.00 0.29 122,900 116,700
E1 South 40% Indicated 18,200,000 0.67 0.18 121,900 103,900
E1 East Inferred 8,000,000 0.83 0.26 66,000 65,500
CLONCURRY Monakoff * 49% Indicated 1,902,000 1.58 0.48 30,100 29,400
COPPER
PROJECT Monakoff East Inferred 700,000 1.25 0.36 8,700 8,000
Great Australia * 65% Indicated 2,134,000 1.54 0.13 32,900 8,900
SUB - TOTAL 43.2 Mt 0.88 0.24 382,400 332,500
Taipan Inferred 1,460,000 0.80 0.1 11,600 5,000
Kangaroo Rat * Inferred 875,000 1.65 1.0 14,400 28,000
Mt Colin * 64% Indicated 667,195 3.43 - 22,880 -
OTHER Turpentine 88% Indicated 1,841,000 1.03 0.2 19,000 11,800
Wallace South Inferred 1,000,000 - 1.6 - 53,000
Victory - Flagship Inferred 196,000 1.20 1.4 2,300 8,800
SUB - TOTAL 6.0 Mt 1.16 0.55 70,180 106,600
TOTAL 49.3 Mt 0.92 0.28 452,580 439,100
* Granted Mining Leases
8
NW QLD - RESOURCE GROWTH
60 Indicated >100% increase in Resource
“NEW”
Inferred INTERIM TARGET
Tonnage over last 2 years with
TOTAL further upside
50
R eso u rce T o n n ag e (M t)
Contained Cu up by 89% & contained
40 Au up by 128%
On track to exceed 50Mt of total
30 resource
New “Interim target” of 60Mt &
20 >500,000t of Cu by mid 2009
Current drilling will convert a total of
10
≥25Mt in-pit resources to Indicated
category
0
2006 2007 2008 2009 “Critical Mass” in place for the
Cloncurry Copper Project
YEAR
9
SOUTH AUSTRALIA
White Dam Gold Project
Final approval imminent
Proposed JV with Polymetals
Completing detailed project
implementation planning &
financial modeling
Regional Exploration
Highly prospective yet largely
untested area for:
• Gold
• Base Metals
• Uranium
Numerous geophysical
anomalies require follow-up
10WHITE DAM RESOURCE BASE
¾ Total Resource – 9.1 Mt @ 1.13 g/t Au for 330,400 ounces
¾ White Dam “in-pit” Oxide – 4.5 Mt @ 1.27 g/t Au
¾ Project upside from Vertigo – 1.78 Mt @ 1.28g/t Au
¾ Further potential at Vertigo, White Dam & White Dam North
White Dam Gold Project - Mineral Resource Estimate
(0.5g/t cut-off grade applied at White Dam; 0.7g/t cut-off grade applied at Vertigo)
Deposit Indicated Inferred Total
Tonnes g/t Tonnes g/t Tonnes g/t Ounces
White Dam Oxide 5,529,000 1.12 8,000 1.59 5,538,000 1.12 199,900
White Dam Fresh 493,000 1.13 1,288,000 0.96 1,781,000 1.01 57,600
Sub -Total 6, 022, 000 1.12 1,296,000 0.96 7,318,000 1.09 257,400
Vertigo 1,785,000 1.28 1,785,000 1.28 73,000
TOTAL 6, 022, 000 1.12 3,081,000 1.14 9,103,000 1.13 330,400
11DEVELOPMENT
EXCO RESOURCES N.L.
OPTIONSCLONCURRY COPPER PROJECT (CCP)
13RECENT KEY EVENTS - CCP
DEC 2007 Commenced PFS on Cloncurry Copper Project
FEB 2008 New resources at Monakoff East & Taipan
APR 2008 E1 South Resource increased by >50%
JUNE 2008 Successful completion of PFS demonstrates
credentials of ‘base case’ 2Mtpa project
JULY 2008 Commenced DFS on expanded (2.5-3Mtpa) project
AUG 2008 Discovery of new ore zone at E1 North
SEPT 2008 Major upgrade of E1 North & E1 South Resources
NOV 2008 Completion of drilling programs required to
establish mineable reserveDRILLING SUCCESS - E1 CAMP
Infill drilling has confirmed grade and
continuity, plus depth & strike extensions
Recent upgrades of E1 North & E1 South:
significant increase in tonnage and
sizeable conversion to indicated category
NEW mineralised zone identified on
eastern limb of E1 North; further resource
upgrade due soon
E1 Camp now hosts 38.5Mt, 310,800t of
Cu & 286,100oz of Au, with further upside
Ongoing programs focused on resource
conversion and realising further potential
of “Central Zone”
15FURTHER UPSIDE AT E1 CAMP
16CCP FUNDAMENTALS
– Stand-alone concentrator concept
– Key deposits: E1 Camp & Monakoff
– Initial 10-year open-pit mine life
– Throughput 2.5 to 3.0 Mtpa of ~1.0% Cu ore
– Production ~25ktpa Cu, ~17koz Au
– Straightforward process & metallurgy
– By-product potential: Co, Fe, Acid & U(?)
– Native title agreements in place
– EIS commenced Q4/2007
– Completed PFS in Q2/2008
– Full DFS now underway
17DFS - UPSIDE OPPORTUNITIES
Exploration & • Resource base can clearly deliver a mineable reserve of ≥ 25Mt
Resources
• Supports increase in throughput to ≥ 2.5Mtpa and improved economics
Mining & • Can achieve a 50% increase in throughput for only 25% increase in Capex
Processing
• Economies of scale lead to unit cost reductions in power and labour
Cobalt – Recovery to a bulk concentrate. Zero additional capex. Payability
subject to concentrate marketing
Magnetite – Potential to produce ≥ 500,000tpa; viability subject to transport
and marketing constraints. Additional process Capex only ~A$10M
By-Products
Pyrite / Acid – Roasting of pyrite concentrates to produce suphuric acid for
the local market. Potential to also generate power & increase Co recovery.
Conceptual scoping study completed; No value at present
Uranium – Available for tailings leach. Subject to politics could produce
>400,000lbs/annum; No value at present
N.B. By-product recovery has a positive impact on overall Cu-Au recoveries
18Building on the PFS Base Case
PFS DFS*
Throughput 2Mtpa 3Mtpa
Initial Project Life 11.5 years 8-10 years
Cu recovery 93% 93%
Au recovery 80% 80%
Estimated Capital Cost (±25%) ~A$209M ~A$250M
Operating Cost (including TC/RC & royalty) US$1.80/lb US$1.73/lb
Gold credit (US$0.34/lb) (US$0.34/lb)
Total Cash Cost US$1.46/lb US$1.39/lb
Base Case NPV @8.5% (Cu & Au only) A$126.7M A$256M
IRR (Cu & Au only) 28.6% 37%
Potential By-product NPV (Co & Magnetite) A$50-70M A$50-80M
Average Cu Price assumed US$2.68 US$2.50
A$ Exchange US$0.9 US$0.7
Payback period 2-3 years 2-3 years
* Indicative model 19CCP - FORWARD PROGRAM
DEFINITIVE FEASIBILITY STUDY (DFS)
• Seamless transition from PFS to DFS in July 2008
• Re-appointed GRD Minproc as Study Manager
• Current focus on unlocking upside: e.g.
¾ Increasing throughput ≥ 2.5Mtpa & production ≥25ktpa Cu
¾ Pit optimisations & mine scheduling
¾ Cost optimisation / reduction
¾ Metallurgy and By-product potential: Co, Fe, Acid & U(?)
• Ongoing resource upgrades (E1 North & Central Zone)
ENVIRONMENTAL IMPACT STATEMENT (EIS)
• Commenced baseline studies Q3/2007
• Application for voluntary EIS approved July 2008
• On track for completion Q1/2009, followed by approvals
20ORE SUPPLY OPTION
- E1 ores 8km from Ernest Henry Mine
- Existing 11Mtpa Concentrator at EHM
- Current open pit plan ends 2H/2010
- Evaluating U/G potential from 2011
- Potential for EXS to fill production gaps
- Significant tonnages at E1 with upside
- Compatible mineralogy / metallurgy
- Lower capital risk option for EXS
- Lower operating cost structure
- EXS seeking long-term arrangement
- No formal agreement yet in place
21WHITE DAM GOLD PROJECT
• Agreement with Polymetals to acquire
50% of project
• Polymetals to sole fund first A$9.6M
of capital development
• Polymetals will develop and manage
the project
• Grant of Mining Lease approved;
currently finalising MARP
• Plan to treat 2Mtpa (50,000oz pa)
commencing in late 2009
• A$ gold price offers attractive margins
• Exco remains exposed to project and
gold price upsideIVANHOE JOINT VENTURE
23EXCO’s KEY INGREDIENTS
MANAGEMENT: An experienced Board & Management Team with
a track record of disclosure & successful delivery
ASSET QUALITY: Strategic ground position in a highly prospective
belt, and a resource base which continues to grow
CASH: Well funded to complete drilling & resource development
programs, and to progress studies for the Cloncurry Copper Project
DEVELOPMENT OPTIONS: Three near-term opportunities for cash
flow for Exco:
1. Stand-alone development of the 100% owned Cloncurry Copper Project
2. Ore-Supply arrangements with Xstrata’s Ernest Henry Mine
3. Development of White Dam Gold Project in JV with Polymetals
COMMITMENT: Exco is committed to expediting the path to cash
flow, and to creating maximum value for shareholdersTHANK YOU
EXCO RESOURCES N.L.
ASX: EXS
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