1. an emerging Australian copper producer and explorer Jerome G (Gino) Vitale Managing Director Presentation to Resourceful Events Forum Sydney,16 May 2008
2.Disclaimer Notice Such forecasts and information are not a guarantee of future performance and involve unknown risks and uncertainties, as well as other factors, many of which are beyond the control of Redbank Mines Limited. Actual results and developments may differ materially from those expressed or implied by these forward- looking statements depending on a variety of factors. Nothing in this material should be construed as either an offer to sell or a solicitation of an offer to buy or sell securities. This material contains certain forecasts and forward-looking information, including regarding possible or assumed future performance, costs, production levels or rates, prices, reserves & resources or potential growth of Redbank Mines Limited, industry growth or other trend projections.
7.Key Points RBM: new player in Australian copper sector with near term production Copper development companies: re-rated when achieve production Redbank Copper Field NT: recognized but under-explored geological province; strong potential for new discoveries. RBM has: - 100% of known resources in district, strong ground position - high grade deposits + numerous advanced targets to be drilled - mine infrastructure - exploration JV funded by Glencore (earning 50%) - DSF for Oxides Stage underway - production by 2Q 2009
8.Redbank Mineral Field within a world class metallogenic province
9.Redbank Project - Development Strategy Stage 1: (current to 2Q 2009) - site clean-up treating high grade (5% Cu) stockpiles Stage 2: Oxides from Bluff, Redbank, Azurite and other deposits (2Q 2009) Stage 3: Sulphides initially from Sandy Flat and Bluff deposits (2Q 2010)
10.Phase 1 - leaching stockpiles Sandy Flat Pit Vats Transitional ore heap leach Waste rock storage Tailings storage Ore stockpiles Crusher Leach column and process water ponds Flotation plant Process water pond
17.Pre-feasibility Study Results (Nov 2007) Base Case Operating Results (top 100m metres only) 31,500 t of Cu production first 5 years, average 6,300 tpa Cu Project Revenue A$200 million (at US$3.10/lb, A$1.00 = US$0.88) Cash Operating Costs: US$1.50/lb Cu EBITDA A$60 million, average EBITDA A$12.0m pa EBITDA/share - 38 cents (annualized - 7.6 cents)
18.Pre-feasibility Study Results Nov 2007 Base Case - Capital and Payback Capital Cost - A$19.4 million oxides and sulphides - leverage off existing infrastructure Payback - 14 months Oxides plant - 18 months Sulphides plant IRR: 72%
19.Base Case Production Statistics Oxides Sulphides Project tonnes per annum of ore mined, crushed and stacked on heap leach pad (oxides), + milled (sulphides) 500,000 300,000 total tonnes mined and treated 0.83 mt 1.11 mt 1.94 mt total waste tonnes mined including pre-strip 1.30 mt 11.00 mt 12.3 mt average strip ratio, Bluff, Redbank and Azurite pits for oxides; Sandy Flat and Bluff pits for sulphides 1.6 9.9 6.3 average Cu grade mined 1.44% 2.15% 1.86% average Cu metallurgical recovery rate 80.0% 90.0% 87% Preliminary Feasibility StudyPreliminary Feasibility Study November 2007November 2007
20.Base Case Stand-alone, A$ Oxides Sulphides Project Copper metal produced 9,861 tonnes 21,482 tonnes 31,343 Project revenue – open cut $61.6m $134.2m $195.8m Pre-tax operating surplus (EBITDA) $20.0m $39.6m $59.6m Pre-tax NPV at 8.0% discount rate (real) $10.6m $14.3m $24.9m Pre-tax IRR (real) 76.6% 65.3% 72.5% Average Annual EBITDA $6.7m $11.0m $12.0m Capital Cost (+/- 30%) including first fills $5.2m $14.2m US$12.6m $19.4m US$17.1 Capital Payback 14 months 18 months Mine Life 3 years 3.6 years (commencing year 2) Overall 5 years Preliminary Feasibility StudyPreliminary Feasibility Study November 2007November 2007
21.Preliminary Feasibility StudyPreliminary Feasibility Study November 2007November 2007 Base Case Cash Operating Cost Estimates per tonne of ore treated, A$ Oxides Sulphides Project Mining, including grade control $11.57 $43.75 $29.96 Processing (minesite costs) $32.10 $28.50 $31.12 Finished product haulage, selling and general admin $4.08 $9.23 $5.84 Total Operating Cost/t of ore $47.75 $81.48 $66.90 Revenue /tonne of Ore $74.04 $120.79 $100.77 Cash Operating Cost Estimate per pound of Copper produced Oxides Sulphides Project Cu price of US$3.10/lb A$1.69 /lb US$1.49 /lb A$1.73 /lb US$1.51 /lb A$1.72 /lb US$1.50 /lb
22.Preliminary Feasibility StudyPreliminary Feasibility Study November 2007November 2007 Project Sensitivities to Movements in Exchange Rate, Copper Price and Operating Costs A$ m -15% NPV EBITDA -10% NPV EBITDA BASE CASE NPV EBITDA +10% NPV EBITDA +15% NPV EBITDA Exchange Rate 59.4 107.1 40.2 80.7 25.0 60.0 12.5 42.4 7.1 34.9 Operating Costs 39.4 79.2 34.6 72.7 25.0 60.0 15.5 46.6 10.7 40.1 Copper price 4.4 31.2 11.3 40.6 25.0 60.0 38.7 78.6 45.6 88.1
23.Copper EquitiesCopper Equities -- Market Cap / Net Asset ValueMarket Cap / Net Asset Value (P/NAV)(P/NAV) 1 Source for global statistics: Tom Meyer, Raymond James Ltd Canada, 12 May 2008 1.01 times 0.87 times 0.37 times 0.53 times 0.58 times - 0.20 0.40 0.60 0.80 1.00 1.20 Global Average Development Companies Regional Average Development Companies Redbank Mines Global Average Producing Companies Regional Average Producing Companies NumberofTimes 1 1
24.Market Capitalization / tonne Cu (AUD)Market Capitalization / tonne Cu (AUD) from published JORC Mineral Resourcesfrom published JORC Mineral Resources Emerging ASX Listed Australian Producers, May 2008 (companies with projects in Australia only); undiluted for options on issue; Cudeco based on Company's non JORC 2007 estimates of tonnage and grade AUD 917 AUD 811 AUD 303 AUD 237 AUD 198 AUD 188 AUD 97 AUD 47 - 100 200 300 400 500 600 700 800 900 1,000 Copperco Cudeco Hillgrove Resources Matrix Metals Exco Resources Copper Strike Redbank Mines Universal Resources MarketCapitalizationpertonneCopper(AUD) Producing Companies Developing Companies Redbank Mines a Developing Company Non JORC Resource
25.Enterprise Value / lb Cu (AUD)Enterprise Value / lb Cu (AUD) from published JORC Mineral Resourcesfrom published JORC Mineral Resources (Enterprise Value = Market Capitalization(Enterprise Value = Market Capitalization -- Cash + Debt)Cash + Debt) Emerging ASX Listed Australian Copper Producers, May 2008 (companies with projects in Australia only); undiluted for options on issue; Cudeco based on Company's non JORC 2007 estimates of tonnage and grade Producing Companies Developing Companies Redbank Mines a Developing Company Non JORC Resource $0.34 $0.10 $0.10 $0.08 $0.06 $0.06 $0.02 $0.53 - 0.10 0.20 0.30 0.40 0.50 0.60 Copperco Cudeco Hillgrove Resources Matrix Metals Exco Resources Copper Strike Redbank Mines Universal Resources EnterpriseValueperpoundCopper(AUD)
26.Capital Intensity:Capital Intensity: Capital Investment per tonne of productionCapital Investment per tonne of production (AUD,(AUD, from published JORC Mineral Resources and feasibility or prefrom published JORC Mineral Resources and feasibility or pre--feasibility studies)feasibility studies) Producing Companies Developing Companies Redbank Mines a Developing Company Emerging ASX Listed Australian Copper Producers, May 2008 (companies with projects in Australia only) AUD 9,756 AUD 6,842 AUD 5,867 AUD 4,526 AUD 3,636 AUD 3,079 Not AvailableNot Available - 2,000 4,000 6,000 8,000 10,000 12,000 Universal Resources Hillgrove Resources Copper Strike Copperco Matrix Metals Redbank Mines Cudeco Exco Resources CapitalInvestment($)
27.Grade: Cu % per tonne for reported Mineral Resources Emerging ASX Listed Australian Producers, May 2008 (companies with projects in Australia only); undiluted for options on issue; Cudeco 2007 non JORC Company estimate of tonnage and grade 1.41% 1.10% 0.90% 0.99% * 0.68%** 0.96% ** 2.00% ** 0.98% ** 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% Cudeco Redbank Mines Matrix Metals Hillgrove Resources Copper Strike Exco Resources Copperco Universal Resources Cu%/Tonne Producing Companies Developing Companies Redbank Mines a Developing Company Non JORC Resource * reported Copper equivalent grade ** excludes credits for other contained mineral where no Copper equivalent grade reported
28.Cash Cost (USD) per Pound CopperCash Cost (USD) per Pound Copper (from published JORC Mineral Resources & feasibility(from published JORC Mineral Resources & feasibility or preor pre--feasibility studies)feasibility studies) Emerging ASX Listed Australian Copper Producers, May 2008 (companies with projects in Australia only) Producing Companies Developing Companies Redbank Mines a Developing Company Not AvailableNot AvailableNot Reported USD 1.01 USD 1.24 USD 1.48USD 1.50 USD 1.94 0 0.5 1 1.5 2 2.5 Matrix Metals Redbank Mines Copper Strike Universal Resources Copperco Hillgrove Resources Cudeco Exco Resources CashCostperlbofCuUSD
31.ERL94 Redbank Project Area 18 known pipes and targets 5 pipes shown to be significantly mineralised by drilling All deep drilling has shown the pipes extend down at least into the underlying Wollogorang Formation at depths of 300m+ (grey area in diagram) ERL 94
33.Redbank Project Area:Redbank Project Area: a major copper mineralisation system expressed as clusters of coa major copper mineralisation system expressed as clusters of copper rich subpper rich sub-- volcanic breccia pipesvolcanic breccia pipes The 21sq km held 100% by RBM contains all the significantly mineralised pipes in district pipes drilled to date mineralised to vertical depths of 300m. Suggested copper source is a major magmatic engine at depth likely to be focussed beneath the Redbank Project Area Strong ground position with 805 sq km at EL 24654 (Glencore to earn 50%) + 534 sq m under application
42.BLUFFBLUFF ((black stumps old diamond drill collars)black stumps old diamond drill collars)
43.BLUFF DEPOSIT – 2.0mt @ 1.6% Cu with a 2.0% Cu high Grade Core
44.ORE GENESIS - SALIENT POINTS SO FAR ore contains copper and several grams of silver, very little other metal content primary ore minerals chalcopyrite, primary (?) chalcocite, subsidiary pyrite primary mineralisation contained in orthoclasite to calcite explosively intruded into trachyandesite flow and shallow intrusive sequences, with intercalated fine grain sedimentary sequences mineralisation associated chlorite alteration of host rock the same mineralised intrusive breccias also intrude the fine sediment sequences of the underlying Wollogorang Formation Breccia with mineralised calcite veins
45.RECENT DRILLING – other benefits Multiple open pits allow for project optimization Validated historical holes now incorporated in JORC mineral resource position (to be further updated in June 2008) Historical work completed by Newmont in 1970’s and CRAE in 1990’s has proved to be of high quality and reliable for future drill targeting - efficient exploration dollars Improved understanding of geology
46.Exploration ResultsExploration Results –– refer ASX announcements for detailrefer ASX announcements for detail Started withStarted with -- 2 economically mineralized breccia pipes, Sandy Flat &2 economically mineralized breccia pipes, Sandy Flat & Bluff;Bluff; $1.25m later$1.25m later…… -- 4 economic grade pipes, with Redbank Target Area and4 economic grade pipes, with Redbank Target Area and Azurite added (jury still out on Punchbowl);Azurite added (jury still out on Punchbowl); -- exploration cost/lb Cu 3.5 cents, excellent ROIexploration cost/lb Cu 3.5 cents, excellent ROI
47.continue site clean-up (Stage 1) - generating cash from leaching of high grade stockpiles Complete DFS for Stage 2 (Oxides) dewater Sandy Flat pit ERL 94 - 12,000m RAB drilling to follow up on Nov 07 Geochem results; ERL 94 - 5,000m RC Drilling for follow up RAB results EL 24654: airborne magnetics and radiometrics (May/June 08), soil geochem, mapping Chalcopyrite breccia matrix Present and Planned Activities
48.DFS Major ComponentsDFS Major Components Infill, geotechnical and metallurgical sample drillingInfill, geotechnical and metallurgical sample drilling (completed April 2008)(completed April 2008) Mining reserve, pit designs and mining planMining reserve, pit designs and mining plan (July 08)(July 08) Mine scheduling, process optimisation studyMine scheduling, process optimisation study (Aug 08)(Aug 08) Process plant & additional infrastructure designProcess plant & additional infrastructure design (Aug 08)(Aug 08) Capital cost reCapital cost re--estimation to +/estimation to +/--15%15% (Aug 08)(Aug 08) Operating cost reOperating cost re--estimationestimation (Aug/Sept 08)(Aug/Sept 08) Updating of financial modelsUpdating of financial models (Aug/Sept 08)(Aug/Sept 08)
49.Board: - Kim McGrath – Chairman – Non Exec - Jerome G (Gino) Vitale - Managing Director - James Searle (geologist) - Exec; - Mike Kitney (process engineer/metallurgist) - Non exec; - Susan Field (Chartered Accountant) – Exec. Operations Manager: - Adrian Burling Independent - SRK Consulting Geologists: Process Consultants - MPC Metallurgical Process Consultants Project Manager Redbank DFS: - Craig Hall Board and ManagementBoard and Management
50.Corporate RegisterCorporate Register Issued Capital:Issued Capital: 159.768m shares on issue Top 15 Shareholders:Top 15 Shareholders: Singpac Investment Holdings Pte Ltd 16.67m Lisa Petrie 8.72m HSCB Custody Nominees (Credit Suisse Nominees) 7.00m Directors’ and associate holdings 5.19m HSCB Custody Nominees 4.00m Mesuta Pty Ltd 2.50m Retegia Pty Ltd 2.18m Steven Alman 1.99m Isaiah Sixty Superfund 1.77m Riverbank Superfund 1.73m John A Alman 1.54m Assura Pty Ltd 1.45m Hui Zhu 1.40m Timothy J Johnson 1.35m Acemac Pty Ltd <Mac Super Fund> 1.26m 36.77% 58.75m
51.Summary 2Q 2009 start-up horizon for a +6,000 tpa Cu operation with low technical and financial risk practical, staged approach to development project underpinned by high grade resource base, mine infrastructure and Glencore off-take agreement Strong ground position with high prospectivity, immediate drill targets and regional exploration upside RBM - a copper development company still ‘under radar’ undervalued compared with Australian and global peers
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