2016 Annual General Meeting 25 November 2016 ASX:VML

Transcription

1 2016 Annual General Meeting 25 November 2016 ASX:VML

2 Forward looking statements Certain written statements contained or incorporated by reference in this presentation, including information as to the future financial or operating performance of the Company and its projects, constitute forward-looking statements. All statements, other than statements of historical fact, are forward-looking statements. The words believe, expect, anticipate, contemplate, target, plan, intend, continue, budget, estimate, may, will, schedule and similar expressions identify forward-looking statements. Forward-looking statements include, among other things, statements regarding targets, estimates and assumptions in respect of tungsten, gold or other metal production and prices, operating costs and results, capital expenditures, mineral reserves and mineral resources and anticipated grades and recovery rates. Forward-looking statements are necessarily based upon a number of estimates and assumptions related to future business, economic, market, political, social and other conditions that, while considered reasonable by the Company, are inherently subject to significant uncertainties and contingencies. Many known and unknown factors could cause actual events or results to differ materially from estimated or anticipated events or results reflected in such forward-looking statements. Such factors include, but are not limited to: competition; mineral prices; ability to meet additional funding requirements; exploration, development and operating risks; uninsurable risks; uncertainties inherent in ore reserve and resource estimates; dependence on third party smelting facilities; factors associated with foreign operations and related regulatory risks; environmental regulation and liability; currency risks; effects of inflation on results of operations; factors relating to title to properties; native title and aboriginal heritage issues; dependence on key personnel; and share price volatility and also include unanticipated and unusual events, many of which are beyond the Company's ability to control or predict. For further information, please see the Company's most recent annual financial statement, a copy of which can be obtained from the Company on request or at the Company's website: The Company disclaims any intent or obligation to update any forward-looking statements, whether as a result of new information, future events or results or otherwise. All forward-looking statements made in this presentation are qualified by the foregoing cautionary statements. Investors are cautioned that forward-looking statements are not guarantees of future performance and, accordingly, not to put undue reliance on such statements.

3 AGM The following is a statement made by Mark Strizek, Managing Director at the Company s AGM: 2016 was a year of substantial change and significant progress for Vital Metals. This came about as your Board determined to sharpen the Company's focus on its substantial gold and zinc assets in West Africa and Queensland. Your Company took the decision in 2016 to seek to unlock the exciting potential of its gold assets to drive shareholder value in the face of a challenging Tungsten price. Vital remains ready to develop the Watershed Tungsten Project as soon as a suitable development partner can be identified. Our Watershed Tungsten Project is fully permitted and shovel ready, and remains a highly attractive tungsten development opportunity that we remain confident will return considerable value for shareholders in the future. GOLD PROJECTS BURKINA FASO Kollo Gold Project This project is located in highly prospective Birimian Greenstone terrain with 400 km² of contiguous tenements lying in the trend of the Markoye Fault Corridor. The Markoye Fault Corridor is a very fertile structure, shown to host elephants; multi million ounce gold deposits. Its potential has again been confirmed by the successful exploration campaign that West African Resources have had at their Tanlouka Project, located along strike to the north of our tenements. Your Company has delivered some very encouraging drill results from what was a weatherinterrupted program of exploration drilling at the Kollo Gold Project in Burkina Faso including 1 : KDD008: 56g/t Au from 134m, including 167g/t Au KDD004: 9.11 g/t Au from 88.1m KRC289: 7.42g/t Au from 41 m KRC290: 11.6g/t Au from 65m KRC293: 7.05 g/t Au from 48m The results confirmed that Kollo has the potential to become a significant gold project with high grades and extensive exploration upside. Gold mineralisation remains open at depth and with the end of the wet season, drilling operations have started again and the first batch of assay results are anticipated to become available in the coming weeks. 1 Results reported 20/09/2016 and 20/10/2016. This information was prepared and first disclosed under the JORC Code The Company confirms that it is not aware of any new information or data that materially affects the information included in the previous announcements.

4 Our exploration success in Burkina Faso to date has been a simple strategy of following artisanal mining coincident with gold in soil anomalies. This has generated some great results and there is still further drill testing to do, however following an update during the year of our regional exploration model we believe there is also the potential to deliver further gold discoveries. The updated and reworked regional exploration model identified significant exploration potential within the tenement package. Across the prospects in Burkina Faso we have identified 40km of structures that may host gold mineralisation. To date we believe we have only tested around 15% of these structures and returned very positive intercepts confirming their potential to host significant gold mineralisation. This has led the Board to be excited about the potential of the remaining 85% of structures yet to be tested and we are of the opinion that an extensive drill campaign is the most effective way of progressing from here. Multiple Untested Gold Targets: Kollo and Kollo Extensions Kollo Southwest extension - with supporting Geochem and discordant magnetic signature Kollo Central - untested due to topography will test with track mounted rig Kollo Southwest extension - with supporting Geochem and discordant magnetic signature Kollo Northwest - NW extension of Kollo mineralisation under transported soil Regional Boungou South - limited drilling, gold in soil geochem and discordant magnetic structure ADB / Cassava - robust gold in soil geochem (+600m strike) along major structure Eastern Boundary North and South - untested major structure forms belt margin in south Tangassougou - regional gold in soil geochem anomaly AUSTRALIA Elephant Creek Gold Prospect, Far North Queensland In the first half of the year we announced the results of our exploration data review which identified exciting gold potential at Elephant Creek. From the data numerous gold exploration targets were identified within tenement EPM which are similar to other known occurrences of gold mineralisation in the Hodgkinson Basin region which has a history of mineral production extending back to the Palmer River gold rush days in Total gold production from the Palmer River catchment to the north of EPM was recorded as 1.34 million ounces and historical gold production from the Hodgkinson field to the south has been reported at 300,000 ounces, of which some 90% came from hard rock sources.

5 Exceeded expectations Your Company determined that the maiden drill program in Queensland would take place in the second half of the year along the Ivory vein at Elephant Creek. In November the first gold assay results from the initial 12 RC holes results returned significant intercepts of gold mineralisation including 2 : IVRC : g/t Au from 17m IVRC : 3.05 g/t Au from 32m IVRC : 4.26 g/t Au from 42m IVRC : 2.48 g/t Au from 19m These results demonstrate the high-grade nature of the gold mineralisation at Ivory, with intercepts from the on-going drill program exceeding significant gold mineralisation intercepts reported from historical exploration drilling. Further drilling has been taking place and we look forward to announcing the results in the coming weeks. The results at Elephant Creek are a very positive sign that the prospect could be a mature second front for your Company s gold activities, to run alongside the highly prospective Doulnia Gold Project in Burkina Faso. The Elephant Creek Gold Project offers significant exploration upside. Gold mineralisation at Ivory remains open both at depth and along strike and perhaps most exciting of all is Ivory is but one of 11 known gold-bearing vein systems that have been identified providing plenty of opportunities to rapidly build a portfolio of significant gold mineralisation through a concerted drilling campaign. COPPER Peninsula copper prospect (EPM 25139) in Far North Queensland. Mineralisation at Peninsula is analogous to the historic Dianne Copper Mine that sold direct ship ore to Mitsui Smelters in Japan. Mineralisation observed at the surface is as Malachite and Azurite within gossanous sediment. Grab sampling of rock chips from the Peninsula prospect have returned copper grades of up to 19% Cu. Your Company is looking at ways to progress exploration at Peninsular in the near term. 2 Results reported 3/11/2016. This information was prepared and first disclosed under the JORC Code The Company confirms that it is not aware of any new information or data that materially affects the information included in the previous announcements.

6 ZINC Burkina Faso Our Burkina Faso tenements have considerable base metal (zinc) potential with the mineral endowment remaining untested with only limited modern exploration. Vital considers that there is reasonable potential for the further discovery of significant zinc mineralisation in Burkina Faso, similar to that of the Perkoa mine. Within our portfolio, there are a number of highly prospective zinc VMS style prospects offering significant potential for the discovery of a large zinc deposit as they are essentially untested with drilled zones not closed off. Multiple Untested Zinc Targets: Nabenia Zinc Prospect - Most advanced zinc prospect and ready for immediate follow-up of significant intercepts. Loubel Zinc Prospects - Located on the southern side of the Tiebele Dome: Koubongo Zinc Prospects - Associated with north-facing felsic volcanics in the contact aureole of the Tiebele Dome. AVV Zinc Prospect - The nearby presence of chloritised, silicified and pyritised rhyolites, pyritic mafic volcanics and a magnetic rhyolite body (a subvolcanic intrusion) adds to AVV s exploration appeal. These prospects provide of scope for the delineation of a significant zinc project through a targeted drilling campaign. While gold exploration is our focus in Burkina Faso we are reviewing our strategy in how to extract value for these highly prospective targets. CORPORATE Your Company s strategy to focus on its gold assets has led to a demand on new funds to finance the exploration and drill campaigns. We have achieved several raises through the year and are proud to say that each has been done at a premium or equal to the one before. In May as part of a share placement that raised $800,000 at 1.1 cents we were very pleased to announce Ausdrill had committed to invest $500,000. Ausdrill is a leading ASX listed mining services group with extensive experience operating in West Africa and their commitment was a significant vote of confidence in your Company. In June and July we completed a placement through a rights issue at 1.1 cents of $1.15m and then in August we were happy to announce a raising of $1.03M through a heavily over-subscribed placement at the increased price of 1.5 cents. The proceeds were used to advance drilling activities in West Africa and in Australia. The Board would like to thank all those who have invested in Vital Metals and we hope you feel that the Company has invested those funds wisely and agree that your Company s new strategy in 2016 has consistently produced positive results.

7 SUMMARY 2016 has been a year of frustration and excitement. Having achieved such success in bringing the Watershed Tungsten Project to shovel ready status we were then let down by forces out of our control. Following this though your Board s decision to think quickly and refocus the strategy towards exploring the gold and zinc assets has borne fruit immediately. Your Board believes that undertaking a systematic exploration work program to thoroughly test potential structures is the key to leveraging off what we have shown to be the Company s impressive assets, which in turn will mean creating significant value for shareholders in the near term. With numerous potential opportunities to discover significant gold mineralisation your Board has every reason to look forward to 2017 with confidence.

8 Burkina Faso - The Right Address Birimian Greenstones Markoye Fault Corridor: A known producer of multi-million ounce deposits Deep rooted crustal feature tapping into fluids that make ore bodies Opportunity to make a significant discovery Located in a premier gold province, near MNG Gold s Youga Gold Mine and along strike from Cardinal Resources Ghana Projects Investor Presentation 3

9 A Major Emerging Gold System Multiple untested gold targets Kollo and Kollo Extensions Kollo South-west Kollo Central Kollo North-east Regional Boungou South ADB / Cassava Eastern Boundary North & South Tangassougou Attractive Zinc prospects Investor Presentation 4

10 Kollo Trend Active Drilling Program Multiple targets still remain to be tested Investor Presentation All results reported previously 25/5/2010, 24/3/2011, 9/6/2011, 3/8/2011, 30/1/2012, 20/2/2012, 29/3/2012. This information was prepared and first disclosed under the JORC Code It has not been updated since to comply with the JORC Code The Company confirms that it is not aware of any new information or data that materially affects the information included in the previous announcements. 5

11 Kollo Trend Gold Exploration Upside Auger program is planned to test Kollo Extensions and Eastern Boundary targets in the dry season Investor Presentation All results reported previously 25/5/2010, 24/3/2011, 9/6/2011, 3/8/2011, 30/1/2012, 20/2/2012, 29/3/2012. This information was prepared and first disclosed under the JORC Code It has not been updated since to comply with the JORC Code The Company confirms that it is not aware of any new information or data that materially affects the information included in the previous announcements. 6

12 Burkina Faso Regional Gold and Zinc Boungou South Gold Prospect located 6km to the south east of Kollo Project Encouraging first pass RC drill results include: 5.59 g/t gold from 31m including g/t gold from 35m; and 4.93 g/t gold from 65m Highly prospective for VMS style mineral deposits. Drill-ready targets with ore grade intercepts including: 3.1% Zn from 44m 2.6% Zn from 30m 2.7% Zn from 59m including 8.3% Zn Investor Presentation All results reported previously 25/5/2010, 24/3/2011, 9/6/2011, 3/8/2011, 30/1/2012, 20/2/2012, 29/3/2012. This information was prepared and first disclosed under the JORC Code It has not been updated since to comply with the JORC Code The Company confirms that it is not aware of any new information or data that materially affects the information included in the previous announcements. 7

13 Queensland Gold Elephant Creek Investor Presentation Results reported previously 3/11/2016, 17/12/2013, 18/04/2016 and 5/09/2016. The Company confirms that it is not aware of any new information or data that materially affects the information included in the previous announcements. 8

14 Queensland Exploration Copper Peninsula copper prospect (EPM 25139) Mineralisation at Peninsula is analogous to the historic Dianne Copper Mine which sold direct ship ore to Mitsui Smelters in Japan. Mineralisation observed at the surface is as Malachite and Azurite within gossanous sediment. Grab sampling of rock chips from the Peninsula prospect have returned copper grades of up to 19% Cu. Investor Presentation Results reported previously 17/12/2013, 18/04/2016 and 5/09/2016. The Company confirms that it is not aware of any new information or data that materially affects the information included in the previous announcements. 9

15 Queensland Watershed Tungsten Project DFS completed, fully permitted, 100% owned Reserves of 21.5Mt at 0.15% (31,000 tonnes WO 3 ) 2.5Mtpa open pit operation, 10-year life Simple mining with ore from surface, low strip ratio, mineralisation is visual Simple metallurgy average recovery of 73.6% Producing high purity and high grade premium 65% WO 3 concentrate no contaminants Targeting Capex of US$75M and C1 cost of US$117/mtu*) Substantial land position to drive growth Investor Presentation DFS reported 17 September Updated DFS figures reported in ASX release 22 January 2015, 29 June The Company confirms that it is not aware of any new information or data that materially affects the information included in the previous announcements. See accompanying Forward Looking and Cautionary Statements. Exchange rate of A$1:US$0.75 has been assumed. Capital costs are on an 100% equity basis. Production costs represent first fours 10 years.

16 Queensland Watershed Tungsten Project Project Animation Investor Presentation DFS reported 17 September Updated DFS figures reported in ASX release 22 January 2015, 29 June The Company confirms that it is not aware of any new information or data that materially affects the information included in the previous announcements. See accompanying Forward Looking and Cautionary Statements. Exchange rate of A$1:US$0.75 has been assumed. Capital costs are on an 100% equity basis. Production costs represent first fours 11 years.

17 Competent Person s Statement The information that refers to Mineral Resources in this presentation was prepared and first disclosed under the JORC Code It has not been updated since to comply with the JORC Code 2012 on the basis that the information has not materially changed since last reported. The information in this report that relates to Exploration Targets, Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Mr Mark Strizek, a Competent Person who is a Member or The Australasian Institute of Mining and Metallurgy. Mr Strizek is a full time employee of the Company. Mr Strizek has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaking to qualify as a Competent Person as defined in the 2012 edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Strizek consents to the inclusion in the announcement of the matters based on his information in the form and context in which it appears. The information in this presentation that relates to Mineral Resources for the Watershed Deposit is based on information evaluated by Mr Simon Tear who is a Member of The Australasian Institute of Mining and Metallurgy (MAusIMM) and who has sufficient experience 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 2012 edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Tear is a Director of H&S Consultants Pty Ltd and he consents to the inclusion of the estimates in the report of the Mineral Resource in the form and context in which they appear. The Ore Reserves statement has been compiled in accordance with the guidelines defined in the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code 2012 Edition). The Ore Reserves have been compiled by Mr Steve Craig of Orelogy Group Pty Ltd, who is a Fellow of Australasian Institute of Mining and Metallurgy. Mr Craig has had sufficient experience in Ore Reserve estimation relevant to the style of mineralisation and type of deposit under consideration to qualify as Competent Person as defined in the 2012 Edition of the Australasian Code for Reporting of Mineral Resources and Ore Reserves. Mr Craig consents to the inclusion in the presentation of the matters based on his information in the form and context in which it appears.

18 Cautionary Statement The Definitive Feasibility Study (DFS) referred to in this presentation is based on a Proved and Probable Ore Reserve derived from a Measured and Indicated Mineral Resource, plus a small proportion of mining inventory, which comprises material that is currently classified as Inferred Mineral Resource. There is a low level of geological confidence associated with Inferred Mineral Resources and there is no certainty that further exploration work will result in the determination of Indicated Mineral Resources or that the production target itself will be realised. The Company advises that the Proved and Probable Ore Reserve provides 93% of the total tonnage and 93% of the total WO3 metal underpinning the forecast production target and financial projections, and that the additional life of mine plan material comprises less than 7% of the total tonnage and WO3 metal. Furthermore, in the first five years of production, 95% of the material planned to be processed is based on Proved and Probable Ore Reserves. As such, the dependence of the outcomes of the DFS and the guidance provided in this announcement on the lower confidence Inferred Mineral Resource material contained in the life of mine plan is minimal. The Company confirms that all the material assumptions underpinning the production target, and the forecast financial information derived from the production target continue to apply and have not materially changed.