ian ransome: mining the deep ocean (day 2 - session 5: global hotspots)

GLOBAL MININGINVESTMENT CONFERENCE 2010

STATIONERS’ HALL ● CITY OF LONDON ● TUESDAY-WEDNESDAY, 28-29 SEP 2010

www.ObjectiveCapitalConferences.com

Investment Conferences

Mining the deep oceanIan Ransome – CEO, Diamond Fields International Ltd

DAY 2 - SESSION 5: GLOBAL HOTSPOTS (PART 2)

Other sponsors & participating organisations:

GLOBAL MININGINVESTMENT CONFERENCE 2010

Lead sponsors:

Media partners:

Atlantis II

Meeting The Technical Challenges To Develop New Resources

Meeting The Technical Challenges To Develop New Resources

3

• Increased Global Demand for mineral resources• >80% of Global mineral resources beneath the Oceans• Rise in Metal prices combined with development in deep water

technology now make Marine mining feasible• Land Resources becoming scarcer

• Increased Global Demand for mineral resources• >80% of Global mineral resources beneath the Oceans• Rise in Metal prices combined with development in deep water

technology now make Marine mining feasible• Land Resources becoming scarcer 4

NEXT FRONTIER – MARINE RESOURCES

• Transition to Marine Resource Exploration and Mining happening at depth up to 5 000 metres NOW….

• Marine Mineral Resources reserved by major countries such as China, Russia, Germany, France etc…….

• Witnessing the birth of a NEW industry…….

• Transition to Marine Resource Exploration and Mining happening at depth up to 5 000 metres NOW….

• Marine Mineral Resources reserved by major countries such as China, Russia, Germany, France etc…….

• Witnessing the birth of a NEW industry……. 5

NEXT FRONTIER – MARINE RESOURCES

6

NEXT FRONTIER – SMS AND SEDEX DEPOSITS

Marine Seafloor Massive Sulphides and Sedimentary Exhalative Suphide Deposits formed at Ocean Ridge Spreading Ridges at depths between 1 500 – 3 000 metres

7

Atlantis II

Jiddah

Atlantis II

POLYMETALLIC (Zn, Cu, Ag, Au, Co) SEDEXRed Sea Commission Mining Licence 30 Years

2km

8

Atlantis II Deeps

LIMIT OF BRINES

Atlantis II

Mining Depths: 1900 – 2200 metresBrine Pool:200 metres thick62°C – 45°C

9

Atlantis II

NEXT FRONTIER

HISTORY

•Atlantis II Deposit Explored since 1969• 1974 Red Sea Commission Formed to jointly Explore Atlantis II• 1977 – 1982 Preussag AG German Exploration Company contracted to undertake Feasibility Study of Atlantis II Deeps• Resource, Processing, Metallurgical, Pre-Pilot Mining and Environmental Studies Successfully Completed (US$28 Million)• Largest known marine SEDEX Deposit in the World

MV VALDIVIA

MV SEDCO 445

FLOATATION PLANT ABOARD SEDCO 45

10

Atlantis II

1 metre

Preussag A.G. Coring Programs

•Total 628 core samples•Sampling Density 0.091km²•Average Sampling depth 8.5m

North Basin

East BasinWest Basin

Southwest Basin

11

Atlantis II

HISTORIC RESOURCE ESTIMATE

Bulk Resources Based on top 8.5 metres Average

•91 700 000 tonnes DSF• 1 890 000 tonnes Zn• 425 000 tonnes Cu• 3 750 tonnes Ag• 47 tonnes Au• 5 368 tonnes Co

Minimum Resource

9.4%

0.2%

Zinc

East Basin

West Basin

Southwest Basin

North Basin

The Atlantis II Project Is A Technical Challenge• Deposit is located in 2000 meters of water• 70km from nearest shore• New processing and mining technology required• No existing infrastructure • Elevated Brine Pool temperatures 45°C – 62°C• Fine Particle Size Distribution (PSD) of Ore 80% < 2

microns

A Commercial risk• Worlds Deepest mining operation and First deep sea mud

deposit to be mined

The Atlantis II Project Is A Technical Challenge• Deposit is located in 2000 meters of water• 70km from nearest shore• New processing and mining technology required• No existing infrastructure • Elevated Brine Pool temperatures 45°C – 62°C• Fine Particle Size Distribution (PSD) of Ore 80% < 2

microns

A Commercial risk• Worlds Deepest mining operation and First deep sea mud

deposit to be minedBut:

Largest known and only tested Marine SEDEX in the World. It has the potential to focus expertise and innovation on a new frontier -- deep sea mineral resources

But:Largest known and only tested Marine SEDEX in the World. It has the potential to focus expertise and innovation on a new frontier -- deep sea mineral resources

12

Atlantis II

TECHNICAL CHALLENGES

13

Atlantis II

MINING SYSTEM

CONVENTIONAL DRILL SHIP

• Integrated Design• Capital Intensive• Operating Costs

REQUIREMENTS:

• Mine muds in hostile environment• Transport material 2000 metres to surface• Geodynamic Positioning

14

Atlantis II

STAND ALONE MINING RISER

SYSTEM MINING TOOL (SMT)

Dredging Industry

RISER LIFT PUMP (RLP)

Offshore Oil Industry

RISER BUOYANCYOffshore Oil Industry

RISER PIPESOffshore Oil Industry

BUOYANCY CANSOffshore Oil Industry

SUBSEA PLATFORMOffshore Oil Industry FPSO

15

Atlantis II

Offshore Processing Challenges

• Ore is fine grained sulphide muds

• Pre-Pilot Mining Operations undertaken by Preussag (1980’s) successively concentrated offshore using floatation to 30% Zn @ 70% Recoveries

• New processing techniques using sea water are being developed to achieve recoveries up to 85%

• Filtration using Rotary Vacuum Filters or Disc Nozzle Filters – Slurry Transport

Offshore Processing Challenges

• Ore is fine grained sulphide muds

• Pre-Pilot Mining Operations undertaken by Preussag (1980’s) successively concentrated offshore using floatation to 30% Zn @ 70% Recoveries

• New processing techniques using sea water are being developed to achieve recoveries up to 85%

• Filtration using Rotary Vacuum Filters or Disc Nozzle Filters – Slurry Transport

16

Atlantis II

SYSTEM FLOW DESIGN

Integrated Mining Tool

Support Vessel

Offshore Processing

Concentrate Transport

Offloading and Stockpiling

HydrometallurgyProduc

t

• Early studies by the Red Sea Commission show that neither sensitive coral reefs or fauna within surface layers affected

• The Atlantis II Project can be developed with minimal environmental impact

• The environment at Atlantis II is naturally variable

• Possibility of Pumping Tailings under brine layer by return riser

• Early studies by the Red Sea Commission show that neither sensitive coral reefs or fauna within surface layers affected

• The Atlantis II Project can be developed with minimal environmental impact

• The environment at Atlantis II is naturally variable

• Possibility of Pumping Tailings under brine layer by return riser

17

Atlantis II

18

Atlantis II FINANCIAL VIABILITY

• Project Currently in Engineering Feasibility Stage• Project Costings Dependent on final Design Selection

• Initial Financial Viability Assessment undertaken using updated Preussag A.G. Feasibility Study (1981)• Variable IRR returns calculated ranging from 16.1% - 22% Production Model Dependent• Expected IRRs to range from 25%-35% from new Feasibility study using improved technologies, improved resource base and recoveries

FISCAL

• Minimal Infrastructure

• Limited Social Disturbance

• Minimal Overburden or Stripping

• Minimal Waste

• Increased Worker Safety – Remote Controlled at the “Mine Face”

• Minimal Infrastructure

• Limited Social Disturbance

• Minimal Overburden or Stripping

• Minimal Waste

• Increased Worker Safety – Remote Controlled at the “Mine Face”

19

Atlantis II

20

Atlantis II • 26 Other Deeps Known in

Red Sea

• Vast Areas of Ridge Complex Unexplored

• Major Potential for Massive SEDEX , SMS Deposits

• Technology developed from Atlantis II Project will be applied to developing these further prospects

• Operational Cost Advantages working from Saudi Arabia

• Diamond Fields set to Be at forefront in Deep Water Marine Resources – the Next Frontier

BUSINESS STRATEGY

Other sponsors & participating organisations:

GLOBAL MININGINVESTMENT CONFERENCE 2010

Lead sponsors:

Media partners: