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Making Sustainable Gold Production a Reality
Corporate PresentationFebruary 2009
Disclaimer
This presentation is not a prospectus nor an offer for securities in any jurisdiction nor a securities recommendation.
The information in this presentation is an overview and does not contain all information necessary for investmentp ydecisions. In making investment decisions in connection with any acquisition of securities, investors should rely on theirown examination of Focus Minerals Ltd (Focus Minerals or the Company) and consult their own legal, business and/orfinancial advisers.
The information contained in this presentation has been prepared in good faith by Focus Minerals Ltd, however norepresentation or warranty expressed or implied is made as to the accuracy, correctness, completeness or adequacy ofany statements, estimates, opinions or other information contained in this presentation.
To the maximum extent permitted by law, Focus Minerals Ltd, its directors, officers, employees and agents disclaimliability for any loss or damage which may be suffered by any person through the use or reliance on anything containedin or omitted from this presentation.
Certain information in this presentation refers to the intentions of Focus Minerals Ltd , but these are not intended to beforecasts, forward looking statements or statements about future matters for the purposes of the Corporations Act or anyother applicable law. The occurrence of events in the future are subject to risks, uncertainties and other factors that
F Mi l L d’ l l f hi diff f h f d i himay cause Focus Minerals Ltd’s actual results, performance or achievements to differ from those referred to in thispresentation. Accordingly, Focus Minerals Ltd, its directors, officers, employees and agents do not give any assurance orguarantee that the occurrence of the events referred to in the presentation will actually occur as contemplated.
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Contents
1 Focus Minerals An Overview1 Focus Minerals – An Overview
2 The Opportunity
3 Proposed Capital Raising
4 Development Timeline
3
Focus Minerals – Key Assets
• Large 210km2 tenement position in world-class Coolgardie minerals province
• ~1.8Moz JORC-compliant gold resource base in multiple deposits
Fully permitted 1 2Mtpa Three Mile Hill• Fully permitted 1.2Mtpa Three Mile Hill Gold Plant
• Nepean Nickel Project (Inferred Resource 591,300t @ 2.2% Ni – 13,000 tonnes Ni)
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Focus Minerals – An Overview
• Multiple deposits containing gold resources of 1.8Moz (incl. reserves)
• Commercial gold production commenced in April 2008Commercial gold production commenced in April 2008
• Current Reserves – 111,255oz – Perseverance – 82,555oz – Countess – 28,700oz
• Targeting production of 45,000oz in 2009 and +80,000oz in 2010
• 100% ownership of fully permitted 1.2Mtpa processing plant (Three Mile Hill Plant)
• Currently toll treating at nearby 3rd party Greenfields Mill• Currently toll treating at nearby 3rd party Greenfields Mill
• Debt free by December 2009
• Hedge free by September 2009 – able to take full advantage of strong spot gold• Hedge free by September 2009 able to take full advantage of strong spot gold prices
• Significant near mine & regional exploration potential
5
Focus Minerals – Resource Statement
Total Resource (incl. Reserves)Tenements
Perseverance 608,500 6.92 135,400Cyanide (Tyndals east) 367,000 5.54 65,400
oz AuGradeTonnesCurrent Knowledge
Cyanide (Tyndals east) 367,000 5.54 65,400Countess 468,000 3.89 58,500Empress 679,500 2.14 46,800The Mount 2 090 000 5 50 369 600The Mount 2,090,000 5.50 369,600Lindsays (open pit & underground) 5,840,000 1.67 314,400Brilliant 3,074,000 2.43 240,100Greenfields 1 616 000 1 69 87 800Greenfields 1,616,000 1.69 87,800Dreadnought 3,458,000 1.99 221,000Norris 1,050,000 2.43 82,000King Solomon 1 400 000 2 00 90 000King Solomon 1,400,000 2.00 90,000Lord Bob 820,000 1.60 42,200Other satellite deposits 573,000 2.11 38,800
1 792 0002 5322 044 000T t l
6
1,792,0002.5322,044,000Total
Directors
Donald TaigExecutive Chairman(B Com FAICD FCPA)
• Fellow of both the Australian Institute of Company Directors and the Australian Society of Certified Practising Accountants
• 11 years with CRA Ltd and past Director of Metals Exploration Ltd• Previous Directorships include Tolhurst Noall Ltd, Clover Corporation Ltd, (B.Com, FAICD, FCPA)
• Associate Director of corporate advisory firm Azure Capital
p , p ,MD of Chiquita Brands South Pacific, and Chairman of Prudential Investment Company of Australia
Christopher HendricksNon-Executive Director(CA, M.Acc, B.Acc)
p y p• Chartered Accountant, Finsia graduate and also has a Masters in Accountancy• Significant experience gained in Australia and South Africa in corporate
advisory, capital raisings, mergers and acquisitions and assurance advisory services for multinational companies
Phil LockyerNon Executive Director
• Over 40 years experience in the resources industry, as a mining engineer and metallurgist particularly in gold and nickelH t d hi i i lt b i i 1999Non-Executive Director
(AWASM, DipMetal, M.SC)• Has operated his own mining consultancy business since 1999• 20 years with WMC Ltd in Kambalda in various roles, plus senior positions • Also past Non-Executive Director of Jubilee Mines NL, Perilya Ltd, St.
Barbara Mines Ltd and Non-Executive Director of Swick Drilling Services
Jon GrygorcewiczCompany Secretary(CA B Bus)
• Associate member of the Institute of Chartered Accountants in Australia• Previous commercial experience within the audit and corporate advisory
services divisions of Arthur Young Australia and has been associated with a number of listed companies involved in exploration and mining of gold(CA, B Bus)
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number of listed companies involved in exploration and mining of gold, diamonds and oil.
Management
Campbell BairdChief Executive OfficerB Eng (Min), Masters of International Finance
• Recently the General Manager, Operations for Vulcan Resources Ltd developing the Kylylahti Copper Cobalt mine in Finland
• 5 years as a Senior Consultant with SRK Consulting• Extensive practical experience with WMC (St Ives), Plutonic (Mt Morgans Gold Mine),
North Ltd (Northparkes and the Iron Ore Company of Canada)
Peter WilliamsChief Operating Officer
International Finance North Ltd (Northparkes and the Iron Ore Company of Canada).
• Career spanning more than 30 years within the mining industry. Significant experience has been gained in managing large mining operations
• Previous Senior Management roles at CRA Ltd (Dampier Salt), North Ltd (Peak Hill p g(M.AusIMM)
g ( p ), (gold) , Resolute Mining Ltd (Bullabulling gold), and New Hampton Goldfields Ltd (Jubilee Gold)
• Over 10 years experience in resource development, mine exploration, regional exploration and open pit roles for Newmont Australia, Normandy, Sons of Gwalia and
Garry AdamsExploration Manager
p p p , y,Centaur Mining and Exploration
• Experience includes project generation, large scale drill programs, deposit modelling, grade control estimation and open pit mining
• Previously the Senior Resource Evaluation Geologist with Newmont Australia
Darren GibcusGeneral Manager - Coolgardie Operations
• Over 15 years experience in gold, silver and nickel mining operations in Australia and Indonesia for BHP Billiton, WMC, Placer Pacific Ltd, Sons of Gwalia Pty Ltd, St. Barbara Mines Ltd and Aurora Gold Ltd
• Experience has been gained at various mines including Big Bell gold mine, Granny Smith gold mine Mt Munro silver gold mine Leinster Nickel Operations Tarmoola gold mineg p
Chuck McCormick
gold mine, Mt Munro silver-gold mine, Leinster Nickel Operations, Tarmoola gold mine, Carusoe Dam gold mine and Marvel Loch gold mine
• Founding Director of Focus Minerals with over 30 years experience in the mining industry in Australia, Canada, USA, the Middle East and Africa
k d d l d l l d d d h dd ldBusiness Development Manager
8
• Worked and lived in Kalgoorlie since 1979 and discovered the Paddington Gold Mine. He has also defined a number of other gold mines in the region
• Founder and MD of Electrum NL
Contents
1 Focus Minerals An Overview1 Focus Minerals – An Overview
2 The Opportunity
3 Proposed Capital Raising
4 Development Timeline
9
Focus Minerals – The Opportunity
• Focus Minerals has an advanced pipeline of development projects and the ability to produce in excess of 100,000oz pa sustainablyability to produce in excess of 100,000oz pa sustainably
• Focus Minerals wants to seize the opportunity of the rising gold price
• To increase production, Focus must increase milling capacity – current toll-treating arrangements provide for 0.4Mtpa - 1.2Mtpa
capacity is essentialcapacity is essential
• A proposed equity raising of A$28m provides sufficient funds to refurbish the 1.2Mtpa Three Mile Hill Plant and expedite development of additional nearby p p p ydeposits
• Ability to leverage off historically high gold prices – greatly increased y g y g g p g yprofit margins and Shareholder returns
10
Focus Minerals – Realising the Opportunity
Refurbishing the existing Three Mile Hill mill to a throughput rate of 1.2Mtpa will:
• Lower operating costs significantly – economies of scale• Lower operating costs significantly economies of scale
• Substantially increase available throughput from 0.4Mtpa to 1.2Mtpa
• Greatly enhance cash generating capabilityG eat y e a ce cas ge e at g capab ty
• Reduce counterparty risk associated with third party processing – “Master of Own Destiny”
• Allow Focus Minerals to develop additional nearby deposits and consider inorganic growth strategies both locally and globally
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Three Mile Hill Processing Plant
Contents
1 Focus Minerals An Overview1 Focus Minerals – An Overview
2 The Opportunity
3 Proposed Capital Raising
4 Development Timeline
12
Focus Minerals – Use of Funds
Focus Minerals is proposing to raise $A28m in order to expand production capacity to >100,000oz pa.
Use of Funds 2009Source of Funds
Refurbish & modernise Three Mile Hill Plant A$18mA$25mProposed capital
raising Resource Development A$4.6m
Share Purchase Plan A$3mAdvanced explorationand definition
A$3.8m
Capital raising expenses A$1.6m
Share Purchase Plan(Maximum)
A$3m and definition
Total A$28mTotal A$28m
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Total A$28mTotal A$28m
Focus Minerals – Capital Structure & Corporate Info.
Existing fully paid shares
Unlisted options
1,246.1m (incl. 140m escrowed until 30/04/09)
56.3m exercisable at prices between $0.05 and $0.175
Convertible note:
Share price
$2m 8.25%pa convertible on or before 30/04/2009 at $0.075/share
$0.027 (16/02/2009)
Undiluted market capitalisation
Cash & bullion – 31/12/08
Debt – 31/12/08
$33.7m
$4.8m
$16 3mDebt – 31/12/08
Top 20 shareholders
Management
$16.3m
33.15%
0.94%a age e t
Substantial shareholders
Capital Structure – Post Raising
0 9 %
Matador Mining Pty Ltd (11.93%)
Existing shares on issue
A$28m capital raising
P f h i
1,246.1m
1,400.0m
2 646 1
14
Proforma shares on issue
Market Capitalisation post raising (based on $0.027 per share)
2,646.1m
$71.4m
Focus Minerals – Enterprise Value / Resource
EV / Resource (A$ / oz)
Focus is trading below the average of other Gold Producers.
EV / Resource (A$ / oz)
346 335
400
335
300
A$
/ o
z
161200
Average: A$105/oz2
8062 59
4225 16 16 10
31
0
100
Peer Company
DO
M
AVO
BCD
TRY
AXM
SBM
IAU
FML
SLR
DIO
CTO
NG
F
15
1. Includes proforma EV after capital raising (see calculation below) FML EV/Resource of A$30/oz: [market cap ($64.6m) + debt ($16.3m) – cash ($27.7m)] / resource (1.74moz Au)
2. Average excludes Focus Minerals
Contents
1 Focus Minerals An Overview1 Focus Minerals – An Overview
2 The Opportunity
3 Proposed Capital Raising
4 Development Timeline
16
Focus Minerals – Project Pipeline
Focus intends to bring Countess, Empress, Cyanide and The Mount Deposits into production in the near future - followed by other projects.
PerseveranceCurrent to Oct 2010Resource:135,388oz @ 6.9g/t 85 500 in reserve
Countess3rd Quarter 2009Resource:58,500 oz @ 3.9g/t 28 700 i
Empress1st Qtr 2010 Resource:46,805 oz @ 4.68g/t
The Mount1st Qtr 2010Resource:370,000 oz @ 5.50g/t
Cyanide1Qtr 2010Resource 65,368 oz @ 5.54g/t85,500 in reserve
Cash cost – A$560/oz28,700 oz in reserveCash cost – A$760/oz
46,805 oz @ 4.68g/tCash cost - A$670
370,000 oz @ 5.50g/tCash cost – A$800/oz
65,368 oz @ 5.54g/tCash Cost A$780/oz
Focus Minerals – Tindals Mining Centre: Major Deposits
• Tindals Mining Centre resource inventory – 550,000oz• Indicated – 348,700oz
I f d 206 900• Inferred – 206,900oz
U/G Accessfrom Tindals Decline
Cyanide367,000 @ 5.54g/t Au
Countess Empress
PerseveranceIndicated
608,400 @ 6.92g/t Au
Countess468,000 @ 3.89g/t Au
Empress192,500 @ 4.68g/t Au
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Focus Minerals – Potential At Depth & Recent Success
LyndsaysTindals Mining Centre
Bayleys
Brilliant
7 kms7 kms
Tindals Mining Centre
200200m
LyndsaysBayleysBrilliantPerseverance
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Focus Minerals – Changing our Production Profile
The refurbishing of Three Mile Hill will allow processing capacity to increase from 0.4Mtpa via toll treating to 1.2Mtpa (excess capacity to be filled by toll treating)
1 4
Current and expanded mill capacity
E d d
treating).
1.2
1.4
a)
Expandedmill capacity
0.8
1.0
ctio
n (m
tpa
Expanded mining production
0.4
0.6
Ore
Pro
duc Expanded mining production
0.0
0.2 Current mill capacity
2009 2010 2011 2012 2013 2014
20
Focus Minerals – Future Production Profile
Currently Focus is producing ~45,000oz pa…by refurbishing the mill, sustainable production of +100,000oz pa is achievable.
Current and expanded gold production through increased mill capacity
140
120
140
00)
80
100
Oun
ces
(‘00
Expanded production through increased mill capacity
40
60
Prod
uctio
n O Expanded production through increased mill capacity
0
20
Gol
d P
Current mill capacity
21
2009 2010 2011 2012 2013 2014
Focus Minerals – Targeted Reserves of 700,000oz
The Proposed Capital Raising will enable Focus to fast track existing resources into reserves.
800
Expected increase in current gold reserves
600
700
s
400
500
nd
Ou
nce
s
~700koz
200
300
Thou
san
0
100
Current Reserves Target Reserves
128.7koz
22
Current Reserves Target Reserves
Focus Minerals – Long Term Development Pipeline
Focus has a number of projects that it anticipates to develop in 2009/2010 with sustainable production expected.
450
Gold resource ounces1, revenue and production commencement pipelineProject – Revenue ($m)
300
350
400
s (‘
00
0) Mount - $433m
Lindsays - $330m
200
250
rce
Ou
nce
Brilliant - $288mDreadnought - $265m
Perseverance - $162m
50
100
150
Res
our
Cyanide - $78m
Countess - $70mEmpress $56m
Greenfields - $105m
Norris - $98m
King Solomon - $108m
Lord Bob - $51m
Bi Bl $36
02007 2008 2009 2010 2011 2012 2013 2014
Earliest Date of Production Commencement
Empress - $56m Big Blow - $36m
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1. Assuming gold price of A$1200/oz
Focus Minerals – A Sustainable Future
45,000oz in >80,000oz next >100,000oz in,2009
,year
,2011
• Focus is already a profitable gold producing company
• Debt free by December 2009
d f b S b 2009• Hedge free by September 2009
• Focus will refurbish the Three Mile Hill mill and move to production of +80,000oz in 2010 and 100,000oz in 2011 , ,
• Significant leverage to the rising gold price
• 100% owned 1.8Moz resource base
• This cements the company’s position as a long-term sustainable gold producer
24
Competent Persons Statement
• The information in this report relating to Exploration Results,p g p ,Mineral Resources or Ore Resources is based on informationcompiled by Dr Garry Adams who is a Member of the AustralianInstitute of Mining and Metallurgy and has sufficient explorationInstitute of Mining and Metallurgy and has sufficient explorationexperience which is relevant to the style of mineralization and typeof deposit under consideration to qualify as a Competent Person asdefined in the 2004 Edition of the ‘Australasian Code for Reportingdefined in the 2004 Edition of the Australasian Code for Reportingof Exploration Results, Mineral Resources and Ore Reserves’. DrGarry Adams is a full time employee of Focus Minerals Ltd and
t t th i l i i th t f th tt b d hiconsents to the inclusion in the report of the matters based on hisinformation in the form and context in which it appears.
