Iluka Resources Heavy Mineral Exploration in the Eastern Eucla Basin, South Australia. AESC July 7th 2010

Transcription

1 Iluka Resources Heavy Mineral Exploration in the Eastern Eucla Basin, South Australia AESC July 7th 2010

2 Disclaimer Forward Looking Statements This presentation contains forward-looking statements that are subject to risk factors associated with exploring for, developing, mining, processing and sale of minerals. Forward-looking statements include those containing such words as anticipate, estimates, should, will, expects, plans or similar expressions. It is believed that the expectations reflected in these statements are reasonable but they may be affected by a range of variables and changes in underlying assumptions which could cause actual results or trends to differ materially. These include, but are not limited to: price and currency fluctuations, actual supply versus demand, production results, reserve and resource estimates, loss of market, industry competition, environmental risks, physical risks, legislative and regulatory developments, economic and financial market conditions in various countries and regions, political risks, project delay or advancement, approvals and cost estimates. Specific Risks & Sensitivities The information contained in this presentation is subject to, but not exclusively to, the following: Changes in exchange rate assumptions Changes in product pricing assumptions Major changes in mine plans and/or resources Changes in equipment life or capability Emergence of previously underestimated technical challenges Environmental or social pressures which impact licence to operate All currency referred to is Australian denominated unless otherwise indicated.

3 Competent Person Statement The statement of Exploration Results, Mineral Resources and Ore Reserves presented in this report has been prepared in accordance with the Australasian Code for Reporting of Mineral Resources and Ore Reserves, December 2004 (the JORC Code). The information relating to Exploration Results, Mineral Resources and Ore Reserves is based on information compiled by Competent Persons (as defined in the JORC Code). Each of the Competent Persons have, at the time of reporting, sufficient experience relevant to the style of mineralisation and type of deposit under consideration, and to the activity they are undertaking to qualify, as a Competent Person as defined by the JORC Code. At the reporting date, each Competent Person listed in this Report was a full-time employee of Iluka Resource Limited. Each Competent Person consents to the inclusion in this Report of the matters based on their information in the form and context in which it appears. All of the Mineral Resource and Ore Reserve figures reported represent estimates at 31 December All tonnes and grade information has been rounded, hence small differences may be present in the totals. All of the Mineral Resource information is inclusive of Ore Reserves (that is, Mineral Resources are not additional to Ore Reserves).

4 Eucla Basin HM Source ± Officer Basin Western Australia Musgrave Block South Australia Eromanga Basin Yilgarn Block Eucla Basin Gawler Block Albany-Fraser Province Ceduna Legend Iluka Tenements Railway Line Highway Iluka Applications Mineral Occurrences 500 Kilometers Eucla Basin Tenements June 2010

5 Regional Setting LOCATION PLAN Map Area Transcontinental Railway Eyre Highway Jacinth & Ambrosia Typhoon Mojave Legend Tripitaka Dromedary Legend Mineral Occurrences Paling_Range Ooldea_Range Mineral Barton_Range Occurrences Iluka Tenements Iluka Applications ± km Ceduna Gulliver's

6 Summary Physical Characteristics Jacinth - Ambrosia Mineral Resources 1 Ore Reserves million tonnes of HM 6.4 million tonnes of HM Ave HM Grade (Ore Reserves) 2 6.5% Ave HM Assemblage (Ore Reserves) 2 Development Capex 50% zircon 28% ilmenite 5% rutile <$390 million (original budget $420 million) Expected Mine Life At least 2020 Total Finished Product Targeted peak production 2.8 million tonnes of zircon 1.5 million tonnes ilmenite (saleable) 0.35 million tonnes of rutile 300,000 tpa zircon Staged ramp up in 1 st year 1 Refer to Iluka 2009 Shareholder Review. 2 Refer to Iluka 2009 Annual Report

7 Assemblage Characteristics Globally Highest Zircon Assemblage Mineral Sands Deposit Iluka Jacinth-Ambrosia Zircon to titanium tioxide ratio Namakw a Australian Zircon Gunson Resources Iluka Mid West Iluka Virginia Iluka Murray Basin DuPont CRL Ticor SA RBM Tiw est JV MDL Grande Cote BeMax Tiomin Iluka South West QIT Kenmare Titanium doxide production (thousand tonnes) Iluka Producers New Projects Potential Projects Industry Average (0.21)

8 Jacinth Stratigraphy

9 Jacinth Stylised Section Beach Placer - high grade core (up to 82%) and low grade top Zircon dominated, cut into rock basement Trapped into a J shaped bay an the foot of Ooldea Scarp

10 Jacinth Geology Overburden removed

11 Jacinth HM grade and Zircon distribution Legend Year1, Year1, Year1, Block Block Block N HM HM HM MGA Coordinates, GDA94 MGA Coordinates, GDA94 Legend Zircon zircon Meters Meters Ver. ORIG DRAWN DATE COMMENTS Ver. ORIG DRAWN DATE COMMENTS REVISIONS REVISIONS JACINTH JACINTH ZIRCON ZIRCON RED LOAM (ZONE 44) OOLDEA SAND (ZONE 43) :10,000 (A3) ORIG: DRAWN: SCALE: DATE: DWG No: CGT Drawn 04/01/2010 Drawing No. 1:10,000 (A3) ORIG: DRAWN: SCALE: DATE: DWG No: CGT Drawn 04/01/2010 Drawing No FIGURE: 1 FIGURE: N N MGA Coordinates, MGA Coordinates, GDA94 GDA ORIG Ver. DRAWN DATE DATE COMMENTS COMMENTS Ver. ORIG DRAWN REVISIONS REVISIONS JACINTH JACINTH HM HM Averaged Over Over m m 15m 20m 30m 35m 40m Depth 1:10,000 SCALE: 1:10,000 (A3) ORIG: Teale DRAWN: SCALE: Drawn DATE: (A3) 27/03/2010 DWG No: C ORIG: Teale DRAWN: Drawn 27/03/2010 DATE: DWG Drawing No: No. Drawing C No. 1 FIGURE: FIGURE: Meters Meters ,000 1,000 1

12 Jacinth/Ambrosia Mine Overview Accommodation village (160 persons) Water - water transported from borefield to site 32 km - potable water produced by reverse osmosis plant Unsealed airfield - fly-in-fly-out from Ceduna / Adelaide Diesel fuel supply Power Station ( MW) HMC transported 270km by road to Port Thevenard Portion of Ooldea Rd upgraded to high quality unsealed New 40km section to connect Ooldea Rd to Eyre Hwy B -Triple 90 tonne trucks, approx. 18 per day 40,000 tonne storage facility at Port

13 Operational Overview Mining Method Conventional dry mining in large open pit Overburden removal by truck and excavator Dozer trap mining Mining unit plant in pit Physical Properties 900m wide by 5 km long Free running, fine grained sand Low in moisture; no groundwater Average overburden ~8 metres Overburden minimal in mid to upper part of Jacinth and deeper at Southern end where higher grade exists Ore at average thickness of 20 metres with a maximum depth of 45 metres Jacinth average grade 7.5%HM and higher at Southern end, Ambrosia average grade 4.9%. Average strip ratio for J-A 0.5:1

14 Mining and Processing

15 Competitive Revenue:Cash Cost Position Iluka s Portfolio Transformed with New Production Base Industry Revenue to Cash Cost Ratio* Iluka SA Iluka MB First Quartile Second Quartile Iluka US Iluka WA Third Quartile Iluka Fourth Quartile Other Iluka Avg = 1.8 Ratio Iluka Avg = % TiO2 + Zr (kt) Revenue to cash cost ratio is key measure of competitiveness Ratio highly dependent on product price relativities Iluka well placed with Jacinth-Ambrosia and Murray Basin operations forecast to be in the first quartile for the industry A significant number of existing operations forecast to have cash negative margin positions * Based on constant exchange rates; Iluka pricing, production and industry cost forecasts.

16 Typhoon Prospect Discovered in July ~ 3.0km long by ~0.5km wide 4km from Jacinth Concentrator Ilmenite dominated assemblage Scoping studies in progress ML 6315 EML km to Jacinth Concentrator Line 1 EL 3742 Line 2 Line 3 Line 4 Line 5 MAP AREA Km Line 6 Line 7 Line 8 CEDUNA Line 9 TARCOOLA Typhoon Discovery reported to ASX 5 th July 2007 ± Metres Coord Ref; GDA94 MGA Z53 Legend Drilling > 3% HM Tenements EL 3638 Typhoon Heavy Mineral Resource DRILL LINES Ref: v

17 Tripitaka Deposit Discovered in November % Iluka owned ~90km south east of Jacinth ~1 million tonnes of HM 2 65% zircon assemblage Scoping Studies in Progress 1 Tripitaka Discovery reported to ASX 11 th November Tripitaka Inferred Resource reported to ASX 27 th September 2006

18 Tripitaka Geology

19 Zircon Supply Supply Peak Near Term Unless Substantial Price Increases Few material new zircon sources - primary contribution from existing suppliers Even with advent of Jacinth-Ambrosia, relative industry zircon:ti02 production ratio remains stable at ~0.2 (over period ) Majority of mooted / planned TiO2 projects have low zircon assemblage Iluka s assessment is zircon market comes into balance into 2011/2012 Given zircon typically a co-product in mineral sands developments, higher TiO2 prices also required to realise associated zircon production Given zircon demand growth historically greater than TiO2, zircon availability may come under further pressure if projected TiO2 volumes do not materialise Even with advent of 50% price increase, zircon supply to 2015 increases only marginally relative to 2011 levels; significantly higher pricing required to support new supply Zircon Supply Induced New Projects at 0%, 25% and 50% Zircon price rises (on 2008 levels) ktpa Current Producers No price rise 25% price rise 50% price rise Iluka s analysis of mineral sands supply is based on inducement analysis of known projects, at varying zircon and Ti02 prices, with a risk weighting applied based on: sovereign, environmental, regulatory approval, funding and technical risks. Source: Iluka analysis of company announcements

20 Zircon Demand Demand Influenced Predominantly by Developing/Urbanising Economies Global Zircon Consumption CAGR since 1990 is 3.4% while China s CAGR is 17.2% Zircon Consumption Trends Rest of World vs China Growth Zircon (kt) World China Rest of World CAGR = 3.4% China s Urban Residential Floorspace China used 2.8 bn sqm of tiles in 2008 Future growth in China s urban floorspace will influence increases in China s tile use, along with expected increase in ceramics quality Total Floorspace bn sqm Installed CAGR = 2.8% CAGR = 1.3% CAGR = 17.2% Zircon Demand Growth Demand 3.4% CAGR globally China demand CAGR of 17.2%; largest global consumer of zircon: - largest producer and exporter of ceramics; - largest producer of zirconium oxychloride; and - import dependent Urbanisation and construction are strong indicators to demand growth Demand profile strengthening from low base in BRICs and developing Asian economies Zircon kg / Tile sqm Source: McKinsey Consultants Zircon Intensity of Use Intensity of zircon per tile currently low in China This is forecast to rise as quality of tiles produced and demand in China and for exports increases Global Zircon Intensity of Use (LHS) % Chinese Tile Production (RHS) 0 15% % 35% 30% 25% 20% China Tile Production (% of Total)

21 Closing Slide Eucla Basin Exploration Overview 2010 Closing Statement

22 Eucla HM Exploration Overview 2010 Searching for long life, high quality deposits ~59,000 metres of regional drilling planned Eucla HM exploration budget is 40% of total exploration budget for Iluka 1.5 Track drill rigs for 10months Three main target areas in 2010 I. Maralinga Area (Barton Range) II. Immarna Prospect III. Jacinth Brownfield's (within 5 to 10km)

23 Exploration Program 2010 Maralinga Area - Barton Range Barton Shoreline Miocene Shorelines MARALINGA 100 MGA Coordinates, GDA94 Kilometers Legend SA_Railway_100K Iluka ELA Iluka Tenements Maralinga Area Exploration ± ORIG: Originator DRAWN: Drawn SCALE: 1:1,500,000 (A4) DATE: Date DWG No: Drawing No. FIGURE:

24 Exploration Program 2010 Ooldea Range LOCATION PLAN Transcontinental Railway Immarna Map Area Area of Focus 2010 Jacinth & Ambrosia Typhoon Mojave Legend Mineral Occurrences Ooldea_Range Barton_Range Iluka Tenements Iluka Applications ± Tripitaka 0 30 km Eyre Highway

25 Exploration Program 2010 Jacinth Brownfield's Exploration Two target styles (within 10km of J/A) I. Jacinth Style (zircon-rich strands) II. Typhoon style (ilmenite dominated strands) FAIR WEATHER BASE m m SL High Stands m Work Program I. Desktop review in progress Ambrosia? Brownfields Area II. Surface sampling (Nov 09) III. Drilling 5000m (mid 2010) IV. Review and follow-up Jacinth Iluka Drilling Iluka Tenure HM Occurrence HM Resource Outline Typhoon? Kilometers? ±

26 Closing Slide Exploration; searching for long life high quality deposits Closing Statement