Mindarie Mineral Sands Project: A New Beginning

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1 Mindarie Mineral Sands Project: A New Beginning SA Exploration and Mining Conference November 28, 2013 Adelaide, SA Patrick Mutz CEO Murray Zircon Pty Ltd 1

2 Murray Zircon Pty Ltd Australia s newest mineral sands miner. 2

3 Murray Zircon in Australia South Australia Murray Zircon was established in June 2011 as a joint venture to redevelop the Mindarie Mineral Sands Project in South Australia 11/30/2013 3

4 Mindarie Mineral Sands Project Mindarie Project is located 150km east of Adelaide. Mindarie Adelaide 11/30/2013 4

5 Murray Zircon Pty Ltd Murray Zircon joint venture majority shareholder: Guangdong Orient Zirconic Industry Science and Technology Co., Ltd. (Orient Zirconic), a listed company in China (SHE: ). Joint venture minority shareholder: Initially, Australian Zircon NL, the former owner/operator of the Mindarie Project. Australian Zircon s shareholding now owned by private investors. Murray Zircon also holds an exploration tenement portfolio covering more than 11,000 km² within the Murray Basin in South Australia. 5

6 Location of Murray Zircon Exploration Tenements 6

7 Mindarie Mineral Sands Project Redevelopment of the Mindarie Project was completed in 2012 with wet commissioning in December. Mining and processing operations have reached steady-state and are currently at name-plate capacity. The product is heavy mineral concentrate (HMC) which is exported to China for separation into Zircon, Ilmenite and Rutile. 7

8 Mindarie Mineral Sands Project Current JORC Reserves are 58.1 million tonnes at 4.3% THM. Minimum 15 year mine-life Active exploration programme. JORC Resources recently increased by 58% to 270 million tonnes at 2.6% THM. 8

9 Murray Zircon Pty Ltd Orient Zirconic (China) 100% Orient Zirconic (Australia) 65% Private Investors (Hong Kong) 35% Joint Venture Partner Murray Zircon Pty Ltd WIM 150 Project 100% Mindarie Project 100% Exploration Tenements 22/03/2012 9

10 Orient Zirconic (China) Guangdong Orient Zirconic Industry Science and Technology Co., Ltd (OZC), is one of China s leading zircon processing companies and is headquartered at Shantou in Guangdong Province (about 480km northeast of Hong Kong). OZC has the most comprehensive range of zirconium products in the world, including zirconium dioxide, zirconium oxychloride, fused zirconia, zirconia structural ceramic as well as zirconium sponge and other products. OZC is listed on the Shenzhen Stock Exchange (Code:002167) with a market capitalisation approx. RMB 4.9 Billion (A$850 million*). *Share price and exchange rate on 21/10/

11 OZC Headquarters & Branch Locations in China Chaoyang Branch, Liaoning Leiyang Branch, Hunan Lechang Branch, Guangdong Yanhong Branch, Shantou, Guangdong Headquarters, Shantou, Guangdong 11/30/

12 11/30/

13 Mindarie Project History The Mindarie Project was originally developed by Australian Zircon Limited (ASX:AZC) in The mine commenced operations in October 2007 following the construction of a Primary Concentrator Plant (PCP) and Mineral Separation Plant (MSP). PCP MSP In October 2009 the project was placed on care & maintenance. 13

14 Mindarie Project Redevelopment As part of its strategy to redevelop Mindarie, Murray Zircon proactively assumed responsibility for all remaining rehabilitation liability over previously mined areas. Rehabilitation works commenced in August 2011 and were completed in March At the same time, the Company initiated refurbishment of the PCP and associated wet plant facilities in October The Company also submitted a Program for Environmental Protection and Rehabilitation (PEPR) to the South Australian Department of Manufacturing, Innovation, Trade, Resources and Energy (DMITRE), for approval to resume mining. 14

15 Rehabilitation Works Area 3 Area 1 Area 2 Area 4 Area 5 Area 6a Aerial Photo: March 2011 Phased Rehabilitation Milestones Overburden Completed December 2011 Sub-soil replacement Completed February 2012 Top-soil replacement Completed March 2012 Cropping Completed April/May 2012

16 11/30/2013 Rehabilitated Land 16

17 Mindarie Project Redevelopment Through its successful rehabilitation efforts, positive relationships were built with the local community, affected landowners as well as the government through DMITRE. NET RESULT? DMITRE approved Murray Zircon s PEPR application and issues a licence to resume mining in April 2012; less than 1 year from the formation of the company. 17

18 Mindarie Redevelopment & Commissioning Primary Concentrate Plant refurbishment/upgrade activities completed in August Mining contract and product logistics contract finalised in September A newly purchased Mining Slurry Unit was installed and a new slurry pumping system was completed in November Resumption of mining commenced in October 2012 and wet commissioning of the Slurry Unit and PCP began in December. First HMC product was exported before the end of December. 18

19 Highlights of Operations Mining at Mindarie is via dry, open-cut method using scrapers to remove overburden and dozers to mine the ore. Typical mineral strands in the area are m wide, 10-20m deep and up to 13km long. Mining/processing design capacity is 500 dry tonnes per hour ore feed to produce 10-12K tonnes of HMC per month. Ore is slurried with water at the in-pit Slurry Unit and the slurry is pumped 3-8km to the Primary Concentration Plant (PCP). At the PCP, the heavy minerals are removed with spiral classifiers to produce a Heavy Mineral Concentrate containing typically 80-90% heavy minerals. 19

20 Overburden removal with scrapers Ore Slurry Unit 11/30/2013 Ore mining by dozer push method 20

21 Highlights of Operations Only Heavy Mineral Concentrate (HMC) is produced at Mindarie. HMC is transported from Mindarie by truck approximately 200km to the port in Adelaide at 7-10 B-Double trucks per day. Transport by train is also an option but is not used at this time. At the port, HMC is currently loaded into standard shipping containers with liners for export to China. Bulk shipping is also an option but is not used at this time. In China the HMC is separated into zircon and various titanium minerals. OZC s internal demand for zircon will support full production from the Mindarie project. 21

22 HMC Storage Pad 11/30/

23 Mindarie Project Value Adding Vertical integration strategy: secure demand and secure supply; Allows opportunity for synergism with downstream processing to maximize the recoverable mineral and value. Efficient mining and processing operations targeting superior mineral recovery at the lowest possible cost. Leveraging tightly scheduled moving hole mining method to control the mining costs and achieve rapid/effective rehabilitation. Incorporating automation of pumping and processing facilities to improve production efficiencies and maximise production rate. Iterative mine optimization to minimise strip ratio and maximise total minable reserves. 23

24 Mineral Reserves and Resources Classified reserves estimates at variable total heavy minerals cut-off grade % % Proportion of source material Million Total Slimes Zircon within heavy Leucoxene mineral Rutile component Ilmenite Tonnes Heavy Minerals % % % % Proved Reserves Probable Reserves Total Reserves Classified Resource Estimates at variable total heavy minerals cut-off grades % % Proportion of source material Million Total Slimes Zircon within heavy Leucoxene mineral Rutile component Ilmenite Tonnes heavy minerals % % % % Measured Resources Indicated Resources Inferred Resources Total Resources - OCT NEW Indicated Resources * NEW Inferred Resources * Total Resources - OCT * * - estimated 11/30/

25 Typical Mining Equipment 11/30/

26 11/30/2013 Slurry Pumping Skid 26

27 11/30/2013 Primary Concentration Plant 27

28 11/30/2013 Mining Camp 28

29 Summary Through Murray Zircon, Orient Zirconic has made a significant investment in the mining community in South Australia. Murray Zircon has effectively demonstrated its commitment to secure and uphold its social licence to operate; Completed past mine rehabilitation liability and successfully built positive and effective community and regulatory relationships. The company has successfully completed redevelopment and commissioning of the Mindarie Project and is now South Australia s newest mineral sands miner and the only active mining operation under majority Chinese ownership. Through its vertical integration strategy, Murray Zircon and Orient Zirconic will strive to be a successful, long-term supplier of zircon and titanium dioxide into the global markets. 29

30 For further information: Website: Patrick Mutz, CEO Murray Zircon Pty Ltd P.O. Box 3444 Level 6 West, 50 Grenfell Street Adelaide, South Australia, Australia 5000 Phone: ABN: