asx announcement invitation to investor...

29 January 2015 Australian Securities Exchange Level 5, 20 Bridge Street SYDNEY NSW 2000

ASX ANNOUNCEMENT

INVITATION TO INVESTOR UPDATE PRESENTATION

The directors of Stonewall Resources Ltd (ASX: SWJ) (Stonewall or Company) are pleased to invite shareholders and interested stakeholders to participate in an Investor Update Presentation at which the attached presentation will be delivered via teleconference. The teleconference will be held:

By order of the board

Peter Hunt

Company Secretary

MARKET DATA

ASX code:

SWJ

Current share price:

$0.185 Total free floating shares:

519 million

South African shares:

80 million

Total shares:

599 million

DIRECTORS & SENIOR MANAGEMENT David Murray, Chairman Trevor Fourie, Director

Nathan Taylor, Director Liu Yang, Director James Liu, Director

Lloyd Birrell, CEO

MAJOR SHAREHOLDERS Khan International Limited Salamanca Ventures Limited

Buttonwood Nominees Pty Ltd Murray SA Investment (Pty) Ltd Hanhong New Energy Holdings Ltd

Date: Thursday 29th January 2015

Time: 5:00pm (AEDT) Presenters: Mr Trevor Fourie – Director of Stonewall Mr Lloyd Birrell – CEO of Stonewall Mining Pty Ltd The purpose of the presentation is to update shareholders and stakeholders on the Company’s future plans after a period of voluntary suspension. The presentation will be of approximately 15 minutes duration after which it is proposed that the presenters will field questions for a period of approximately 15 minutes. Instructions on how to dial in and participate in the presentation are attached immediately after this page.

For

per

sona

l use

onl

y

Investor Presentation

Teleconference Details

1

1. Dial the following, according to your location

State Dial-In Number

Victoria 03 9999 5000

New South Wales 02 8999 0900

Queensland (Brisbane local call) 07 3177 2900

Queensland (Gold Coast local call) 07 5699 8600

Western Australia 08 6555 0600

South Australia 08 7070 0600

Australian Capital Territory 02 6171 0500

Northern Territory 08 7999 7500

Tasmania (Hobart local call) 03 6111 0700

Tasmania (Launceston local call) 03 6388 8200

International +61 3 9999 5000

2. Conference ID: 258460#

PLEASE NOTE: STANDARD CALL CHARGES APPLY. PLEASE SEE YOUR PHONE PROVIDER FOR CALL COSTS

Strictly confidential

For

per

sona

l use

onl

y

2

Phone Commands for

Teleconference

While on the phone, all attendees (hosts and guests) can use these commands. Press the STAR key on your phone, then the number.

*0 - Tells the caller what commands they can use.

*2 - Raises or lowers the caller's "hand" in the 'Who's On' page.

*3 - Decreases the caller's microphone volume - in case they are too loud.

*4 - Increases the caller's microphone volume - in case they are too quiet.

*6 - Mutes the caller.

*7 - Unmutes the caller.

PLEASE NOTE: STANDARD CALL CHARGES APPLY. PLEASE SEE YOUR PHONE PROVIDER FOR CALL COSTS


For

per

sona

l use

onl

y

Investor Presentation

Building South Africa’s New Gold Mining Powerhouse January 2015


For

per

sona

l use

onl

y

Disclaimer

4

This Presentation has been prepared by and issued by Stonewall Resources Limited (ASX:SWJ) (Stonewall or Company) to assist in informing interested parties about the Company and should not be considered as an offer or invitation to subscribe for or purchase any securities in the Company or as an inducement to make an offer or invitation with respect to those securities. No agreement to subscribe for securities in the Company will be entered into on the basis of this Presentation. This Presentation may contain forward looking statements. The forward looking statements in this Presentation are not guarantees or predictions of future performance and involve unknown risks and uncertainties and other factors, many of which are beyond the control of the Company, and may involve significant elements of subjective judgement and assumptions as to future events which may or may not be correct. There can be no assurance that actual outcomes will not differ materially from these forward-looking statements and projections. You should not act and you must refrain from acting in reliance on any of this Presentation material. This Presentation has been prepared without taking account of any person’s individual investment objectives, financial situation or particular needs. Nothing contained in this Presentation constitutes investment, legal, tax or other advice. This overview of Stonewall does not purport to be all inclusive or to contain all information which its recipients may require in order to make an informed assessment of the Company’s prospects. Before making an investment decision, you should conduct, with the assistance of your broker or other financial or professional adviser, your own investigation in light of your particular investment needs, objectives and financial circumstances and perform your own analysis in order to satisfy yourself as to the accuracy and completeness of the information, statements and opinions contained in this Presentation. Neither the Company nor its advisers has verified the accuracy or completeness of the information, statements and opinions contained in this Presentation. Accordingly, to the maximum extent permitted by law, the Company makes no representation and gives no assurance, guarantee or warranty, express or implied, as to, and take no responsibility and assumes no liability for, the authenticity, validity, accuracy, suitability or completeness of, or any errors in or omissions, from any information, statement or opinion contained in this Presentation.

The information in this Presentation that relates to Exploration Results, Exploration Targets, Mineral Resources or Ore Reserves is based on information compiled by Daniel van Heerden, who is currently employed as a Director and as Principal Mining Engineer by Minxcon Projects (Pty) Ltd. His qualifications include a B.Eng. (Mining) from the University of Pretoria in 1985 and a M.Com.(Business Administration) from Rand Afrikaans University (now UJ) in 1993. He is a member in good standing of the Engineering Council of South Africa and is registered as a Professional Engineer with registration no. 20050318 as well as a Fellow in good standing of the South African Institute of Mining and Metallurgy with Membership No. 37309 which is a Recognised Professional Organisation’ (RPO) included in a list promulgated by the ASX from time to time. He has worked as a Mining Engineer for more than 28 years with more than 15 years directly associated with gold mining specifically. Daniel van Heerden is employed by Minxcon and has sufficient experience which is relevant to the style of mineralization and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Daniel van Heerden consents to the inclusion in this Presentation of the matters based on his information in the form and context in which it appears.


For

per

sona

l use

onl

y

Renewed Attractiveness of Stonewall Resources

Successful recapitalisation now achieved: With strong support from major shareholders

Up to A$13.5m new capital injection: Initial A$1.5m

Gold production now commenced: At attractive Pre-Mined Residue (“PMR”) project with low all-in cash costs*

New corporate and asset level discussions remain ongoing: Prior Shandong Qixing transaction was at US$140m

Significant new PMR exploration target: Potentially adding an additional 0.7m – 2.4m exploration target ounces**

(See table on page 8)

Large existing mineral resource of 2.99m oz: Defined in accordance with the JORC code (see table page 11)

Significant conceptual exploration target: An additional 0.34M - 3.07M oz from Hard Rock Projects identified by

Competent Person*** (See table on page 12)

Cost savings program implemented: Other initiatives ongoing

Strong gold markets: Since mid-November 2014 the USD gold spot price has appreciated by about [10%], and the

S&P/ASX All Ordinaries Gold index has appreciated by over [40%]

Currency advantage: Production cost in ZAR

Stonewall is ideally positioned to deliver increased value to shareholders from operations and other initiatives underway

5


* Refer forward looking statement on page 2. Subject to resource confirmation, planning and concept study completion.

** Subject to completion of study work and successful trial mining.

*** The potential quantity and grade of the Exploration Target is conceptual in nature, there has been insufficient exploration to define the Exploration Target as a Mineral Resource and it is uncertain if further exploration will result in the determination of the Exploration Target as a Mineral Resource.

For

per

sona

l use

onl

y

Background to the Shandong Qixing

transaction

Stonewall entered into a Share Sale Agreement with Shandong in November 2013 whereby Shandong agreed to

acquire Stonewall Mining (the South African subsidiary of Stonewall) for US$141M.

• On 21 November 2014 Stonewall announced to ASX that Shandong unexpectedly advised Stonewall that it did not intend to complete the purchase.

• Stonewall previously announced that 6 of the 7 conditions precedent in the sale agreement had already been met.

• Shandong’s reasoning remains unclear, however media reports have referred to possible Shandong funding issues, and Stonewall considers that Shandong actions may have been in breach of the sale agreement.

• Stonewall has subsequently notified Shandong that it has reserved all its rights and is now considering all available options including taking legal action against Shandong and its officers.

• Stonewall intends to vigorously pursue and enforce all of its rights against Shandong and, if appropriate, its officers including potentially a claim for damages by arbitration proceedings.

6


For

per

sona

l use

onl

y

What has been achieved

Recapitalisation of Balance Sheet

With support of major shareholders, agreed to extension of maturity dates for:

• AUD$4m APCIG to October 2016

New financing facility up to AUD$13.5m

• AUD $1.5 million unsecured convertible securities (with a face value of AUD $1.8 million) to be provided initially

with a 12 month maturity.

• Convertible at 85% of an average price calculation at the time of conversion.

• Company has a floor protection mechanism that allows the Company to not issue the shares under a conversion

price lower than a floor price specified by the Company.

• Further potential share issuances by the Company at its election to raise AUD $300,000 (and up to AUD

$1,000,000 with mutual consent) per month for 12 months.

• Issued at 91% of an average price calculation at the time of issuance.

• The potential future share issuances under the new facilities are subject to market and other standard

conditions.

The significance of the extension of maturity dates and new funding is:

Time for company to consider alternative offers

Commencing production or pre-mined residue to achieve steady state and breakeven in first half of 2015 and ramp

up to cash flow positive in second half of 2015

7


For

per

sona

l use

onl

y

What has been achieved

Commenced Production of PMR

Commenced production at Beta Mine with limited capital

Ponieskrans Mine in commissioning targeting extraction of PMR from February/March 2015

Targeting production of 30 000oz pa (80 000tpm) by end 2015 without expanding plant capacity significantly***

Plant refurbished and switched on

Currently processing stockpile extracted during December

Continue to process PMR from Beta Mine

Continue exploration activities of PMR

Process underway to Implement Competent Person’s Sampling Protocol

Significant new PMR exploration target potentially adding an additional 0.72m – 2.44m exploration target ounces***

(See table on page 8)

8





For

per

sona

l use

onl

y

Stonewall Summary

One of the largest Mining Right Areas

• 7 New Order Mining Rights

• 6 New Order Prospecting Rights

• 43 farms covering approx. 62 000 Ha

2.99m oz JORC Compliant Mineral Resource (See table page 11)

• 43 Historically Producing Mines

• Shallow, slow dipping ore bodies with easy cheap access

• Exploration Target of additional 0.34M -3.07M oz* (See table page 12)

Existing Infrastructure

• Plant and Equipment

• Deposition

• Power

• Proven Metallurgical process flow

Pre-mined Residue (PMR)

• Exploration target, Pre- developed, Pre- drilled, Pre- blasted

• Conceptual ounces ranging from 0.72M – 2.44M oz* (See table page 8)

9



The potential quantity and grade is conceptual in nature and there has been insufficient exploration to estimate a Mineral Resource. It is uncertain if further exploration will result in the estimation of a Mineral Resource. Stonewall is working with the Competent Person to convert the potential mineralisation to compliant mineral resources in accordance the definitions as stated by the Australian JORC Code for the reporting of mineral resources and reserves. Surveying and sampling in accordance with the instructions of the Competent Person will continue and the implementation of the Competent Person’s recommended Underground Backfill Sampling Protocol for the reef results (refer announcement dated 31 July 2013) in order to assess the possible conversion of the reef residue to a Mineral Resource is to be completed.

For

per

sona

l use

onl

y

Commencement of Mining

Pre-mined Residue

• Old timers historically high graded by blasting stope faces and hand sorting the reef in the stopes

Preliminary test work has indicated that***:

• Gold reef left behind in fine fraction -25mm

• 90% of gold in 25% of the mass upgradable by screening

Conceptual Exploration Target, Tonnage, Ounce and Grade Ranges fie the Underground Reef Residue as at January 2015**

Commenced mining at Beta Mine and production to commence from Ponieskrans Mine by February/March 2015

10





Area Historical

Mined Area

@ 93% (m2)

Minimum

Tonnage

(tons)

Maximum

Tonnage

(tons)

Minimum

assumed

Grade (g/t)

Maximum

assumed

Grade (g/t)

Minimum

Estimated

Gold

Maximum

Estimated

Gold

Minimum

Estimated

Gold

Maximum

Estimated

Gold

(‘ 000 000) (‘ 000 000) (‘ 000 000) Kgs Kgs Moz Moz

Northern division 1.87 2.55 5.17 1.28 2.13 3,250 10,992 0.10 0.35

Central division 4.52 6.15 12.49 1.28 2.13 7,846 26,537 0.25 0.85

Southern division 6.54 8.89 18.05 1.28 2.13 11,341 38,359 0.36 1.23

Total 12.9 17.6 35.7 1.3 2.1 22,436 75,888 0.7 2.4

For

per

sona

l use

onl

y

Industry Analysis

Conventional Hard Rock Mining vs.

Pre-Mined Residue (PMR)

11

Independent analysis comparing a typical shallow narrow reef conventional mining operation and mining Pre-mined residue that can be extracted at 67% of conventional mining costs.*

* Source Minxcon December 2014

This is not the analysis on the company’s forecasts, but the views of an independent competent person based on industry analysis.

However the company has experienced similar results in its PMR testing.

Total Cost Unit Conventional

Mining Adjustment PMR

Management USD/oz 20.32 100% 20.32 Development USD/oz 23.75 0% - Stoping - Labour USD/oz 130.97 50% 65.49 Stoping - Consumables USD/oz 281.18 50% 140.59 Stoping - Explosives USD/oz 75.69 0% - Stoping - Support USD/oz 88.07 100% 88.07 Stoping - Mining Equipment USD/oz 54.17 60% 32.50 Trackless USD/oz 51.76 100% 51.76 Hoisting USD/oz 18.09 0% - Logistics Transport USD/oz 7.53 100% 7.53 Pumping USD/oz 24.37 0% - Ventilation USD/oz 16.05 100% 16.05 Shaft Maintenance USD/oz 6.23 0% - Engineering (U/G Workshops) USD/oz 74.99 100% 74.99 Survey and sampling USD/oz 9.40 100% 9.40 Planning USD/oz 3.92 100% 3.92 Administration USD/oz 12.26 100% 12.26 Safety and Training USD/oz 2.17 100% 2.17 Environmental USD/oz 5.98 100% 5.98 Security USD/oz 15.03 100% 15.03 Geology USD/oz 14.03 100% 14.03 Human Resources USD/oz 17.99 100% 17.99 Rock Engineering USD/oz 3.67 100% 3.67 Stores USD/oz 3.01 100% 3.01 Mettalurgical USD/oz 110.78 100% 110.78 Other USD/oz 12.50 100% 12.50 Overheads USD/oz 45.65 100% 45.65 Total Cost USD/oz 1,129.58 67% 753.70


For

per

sona

l use

onl

y

Conclusion

Target low Capital to Gold opportunities to maximize return

Pre-mined Residue project already commenced at Beta Mine

• Fast track production

• Low capex requirements

• Low all-in cash costs (See illustration on page 7)*

Several shallow historically producing mines with existing infrastructure and mine development

Significant new PMR exploration target potentially adding an additional 0.7m – 2.4m exploration target ounces** (See table on page 6)

Large existing mineral resource of 2.99m oz defined in accordance with the JORC code (see table page 9)

Significant conceptual exploration target of an additional 0.34M - 3.07M oz from Hard Rock Projects identified by Competent Person*** (See table on page 10)

Interests aligned with community and workforce through broad based BEE structure

12





For

per

sona

l use

onl

y

Appendix 1: JORC Resource Summary

13

Mineral Resources for Stonewall Mining as at December 2014


Mining Resource

Category

Type of Operation Tonnage Gold Grade Gold Content Change in Tonnage Change in Gold

Content (Moz)

Mt g/t Kg ‘000 oz. % %

Measured

UG 0.17 4.77 811 26.1 0 0

Surface 0.151 1.59 240 7.7 0 0

Tailings 2.294 0.77 1,770 56.9 0 0

Total Measured 2.615 1.08 2,821 90.7 0 0

Indicated

UG 2.903 5.82 16,902 543.3 5.37 4.44

Surface 3.173 0.88 2,811 90.4 0 0

Tailings 0.012 0.58 7 0.2 0 0

Total Indicated 6.088 3.2 19720 633.9 2.49 3.78

Inferred

UG 16.151 3.9 63,028 2,026.50 10.23 7.78

Surface 0.801 0.8 642 20.7 0 0

Tailings 2.124 3.06 6,503 209 -0.21 -0.22

Rock Dump 0.121 1.59 192 6.2 0 0

Plant Floats 0.041 0.54 22 0.7 0 0

Beta Main 0.109 0.81 88 2.8 -29.45 -29.27

Total Inferred 19.346 3.64 70,475 2,266.00 8.10 6.82

Complaint Grand Total 28.049 3.32 93,016 2,990.60 6.04 5.94 For

per

sona

l use

onl

y

Appendix 2: Exploration Targets: Summary Hard Rock Projects

14

* Refer forward looking statement on page 2.

Subject to resource confirmation, planning and concept study completion


Project SW Minimum

Tonnage

Maximum

Tonnage

Minimum

Grade

Maximum

Grade

Minimum

Estimated

Gold

Maximum

Estimated

Gold

cm Mt Mt g/t g/t Moz Moz

TGME Mines:

Vaalhoek 100 3.5 10.9 1.00 4.00 0.12 1.41

Beta 100 3.5 3.5 0.95 3.50 0.11 0.4

Sabie Mines:

Rietfontein 100 0.5 3.0 2.02 6.51 0.03 0.63

Glynn’s 100 2.5 6.5 1.00 3.00 0.08 0.64

Total 100 10.0 23.9 1.03 3.97 0.34 3.07

For

per

sona

l use

onl

y

Key Contacts

For further information please contact:

Trevor Fourie, Director

Stonewall Resources Limited

M: 0414 324 960

E: [email protected]

Lloyd Birrell, Director and CEO

Stonewall Mining Proprietary Limited

M: 0027 82 857 6725

E: [email protected]

15


For

per

sona

l use

onl

y

mailto:[email protected]

mailto:[email protected]

asx announcement invitation to investor...

Documents