Cazaly Resources Pty Ltd / Cazaly Iron Pty Ltd (formally Cyril Resources)
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Share Issue
51.25 Mil - CAZ listed (includes recent exerecised options)
66.48 Mil - CAZ Fully Diluted (inc Echelon/Investec/Argonaunt options)
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Disclaimer - The information here is relevant to the Shovelanna Hill Iron
Ore project, and does not include information about Cazaly's
existing and Gold and Uranium projects.
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The Rio partners mentioned herewith are Hancock, Wright and Hamersley.
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Shovelanna - Tenement History
TR5003 - Rio first applied for Shovelanna Project, which was converted
to Exploration Licence E46/08 in 1983.
E46/08 - Rio tenement E46/08 expired on 11 Feb 1989 at midnight.
Application renewal paperwork was 'lost in the post' according
to the DoIR 1990 annual report.
E46/209 - 3 months after E46/08 expired, Rio and Partners, pegged the
same tenement, as E46/209 on 18/05/1989 at 11:55am. Tenement
was granted 27/08/1989 (for 5 years up to 26/08/2005). The
tenement expired midnight 26/08/2005. Rio had posted a cheque
to the DoIR approx one month prior to the lease expiring, being
registered/receipted at the DoIR on 28/07/2005. However, there
was no tenement application papers with the cheque and therefore
the DoIR refunded the cheque to Rio. E46/209 was declared as
'dead' and the lease had expired. The cheque was refunded to
Rio, according to the DoIR tenement register, on 28/07/2005.
E46/678 - 3 days after E46/209 expired, Cyril Resources (100% subsidairy
of Cazaly Resources) applied for the Shovelanna tenement as
E46/678 on 29/08/2005 at 13:50. E46/678 is currently pending
ministers approval for granting.
NOTE: Cazaly should not be declared as a 'midnight pegger' because the
former lease expired and they had legally pegged vacant (crown)
land.
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Objections
During the objection period of a new tenement application, two objections
were lodged at "Marble Bar" against Cazaly's E46/678 tenement, as follows:
MB54/056 - BHP
MB57/056 - Hancock (only one of Rio's partners lodged objection)
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PREVIOUS 20 YEARS under Rio Tinto JV
- Total Drilling from 1986 to 2005: 0 holes for 0 metres
- Work completed included; mapping, a helimag survey, a resource
estimation and 10 rock chips.
- Total expenditure: $270,793 ($13,540 per annum ave.)
- In 1989 E46/08 licence accidentally forfeited “…due to postal
difficulties…” (1990 Annual Report to DoIR). Re-pegged 3 months later
as E46/209.
- “The proximity of the Shovelanna mineralisation to the BHP Orebody 18
deposit suggests there may be a strategic value to this tenement apart
from any future mineral value.” (1997 Annual Report to DoIR)
- No feasibility, metallurgical, geotechnical or other work suggestive of
a commitment to mining in the short to medium term.
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CAZALY'S RESEARCH ON SHOVELANNA
- Extensive 3.5km long iron ore zone delineated.
- Extension of BHPB’s Orebody 18 North deposit.
- Indicated Resource of 216Mt @ 62% Fe (Cazaly Resources Ltd., Nov. 2005).
- High potential for the discovery of further ore.
- 40,000m drilling programme planned.
- No drilling since 1986.
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CAZALY'S RECENT SHOVELANNA PROGRESS - 2005
29 Aug 05: E46/678 Tenement application made.
30 Sep 05: Appoint Argonaut as advisors.
04 Oct 05: JV with Echelon Resources Ltd.
10 Oct 05: 40,000m Drilling programme designed
11 Oct 05: Advised of Rio Tinto’s Sec.111A objection.
08 Nov 05: CAZ lodges first Sec.111A submission.
11 Nov 05: Positive scoping study finalised.
14 Nov 05: Financing deal with Investec Bank signed.
27 Nov 05: Resource estimate completed.
28 Nov 05: MOU with BHP Billiton signed.
02 Dec 05: HMC Investors flag 7.38% CAZ stake.
15 Dec 05: Final Sec.111A submission lodged.
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KEY RELATIONSHIPS
Echelon (ECH) JV
- ECH to spend $2.5M to earn 14%.
- ECH to provide specialist iron ore experience through Matthew Rimes, a
former Rio Tinto, North and Robe River executive.
Investec Financing
- Letter of Intent to provide and arrange financing for any development.
BHP Billiton MOU
- Ore sale deal with CAZ to deliver 5Mt p.a.
- Mining to commence within 3yrs of all approvals for exploration.
- Any additional ore can be sold to 3rd parties.
- Margins, based on current prices and standard mining and crushing costs
are ~$70M to $85M p.a.
- CAZ responsible for exploration, mining and primary crushing ONLY.
Nominal CAPEX.
- Parties to investigate possibility of a unified mining operation.
Agree to share synergies.
- Pre-strip mining at BHP Billiton’s Orebody 18 N deposit
Cazaly now have Technical Know How, Financial Support, BHP Billiton
Relationship & the Will and Commitment to Deliver.
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E46/678 - SHOVELANNA HILL - CAZALY IRON PTY LTD
STATUS: PENDING (pending ministers decision)
Area: 18 BLOCKS
Application Received: 29/08/2005 13:50:00
Recommendation (warden): No recomendation (pending ministers decision)
Granted: Not granted (pending ministers decision)
Expenditure/Rent: (pending ministers decision)
* Current legal holders of Shovelanna Hill - E46/678
* Vacant land open for pegging in accordance with the Mining Act 1978 (WA)
* Area formerly held for over 35 years by Hamersley Iron, Hancock
Prospecting and Wright Prospecting in JV
* Objection to application made by Rio Tinto on behalf of the JV to the
Minister for State Development, Mr Alan Carpenter (under Section 111A,
Mining Act 1978 (WA)) on the grounds of public interest.
* JV entered into with Echelon Resources Ltd (ECH to earn 14% equity),
Headed by Mr Matthew Rimes, former Rio Tinto iron ore and Robe River
executive
* Scoping study for project development completed positive study outlines
timetable and plan to develop existing iron ore resource
* Project financing agreement entered into with Investec Bank to provide
and arrange financing for the development of the project
* MOU on ore purchase agreement with BHP Billiton based upon 5Mtpa
production giving expected margins of $70M to $85M p.a. for CAZ/ECH
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FORMER E46/208 - SHOVELANNA HILL - HANCOCK PROSPECTING PTY LTD ;
WRIGHT PROSPECTING PTY LTD ;
HAMERSLEY RESOURCES LTD
STATUS: DEAD !!!!!!
Area: 38.48000 KM2
Application Received: 18/05/1989 11:55:00
Recommendation (warden): Grant , 21/07/1989
Granted: 27/08/1989
Term: 5 Years + From: 27/08/1989 To: 26/08/2005
Death: Expired 26/08/2005 23:59:59
Expended Year End 26/08/2005: UNDEREXPENDED A$42,332.00
Due for Year End 26/08/2006: A$1,510.08 - OVERDUE -166 DAY(S)
PAYMENT 28/07/2005 (13798 PE): $1,510.08
REFUND 2006 14/10/2005 (13798PE): -$1,510.08
NOTE: RIO’s MINIMUM expenditure should have been $473,331 (for the 5
years under E46/208). Their expenditure for the 5 years was only $42,979.
Their expenditure exemptions totalled $388,002.
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