molymoly credit suisse - global steel and mining … suisse - global steel and mining conference ......

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MOLYMOLYMINESMINESLIMITEDLIMITED

Credit Suisse - Global Steel and Mining Conference24 -25 September 2008

Derek FisherChief Executive Officer

Credit Suisse - Global Steel and Mining Conference24 -25 September 2008

Derek FisherChief Executive Officer


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Forward Looking StatementsForward Looking Statements

This presentation includes �forward-looking statements� as that term within the meaning of securities laws of applicable jurisdictions.

Forward-looking statements involve known and unknown risks, uncertainties and other factors that are in some cases beyond Moly Mines�

control. These forward-looking statements include, but are not limited to, all statements other than statements of historical facts

contained in this presentation, including, without limitation, those regarding Moly Mines� future expectations. Readers can identify

forward-looking statements by terminology such as �aim,� �anticipate,� �assume,� �believe,� �continue,� �could,� �estimate,� �expect,�

�forecast,� �intend,� �may,� �plan,� �potential,� �predict,� �project,� �risk,� �should,� �will� or �would� and other similar expressions.

Risks, uncertainties and other factors may cause Moly Mines� actual results, performance, production or achievements to differ materially

from those expressed or implied by the forward-looking statements (and from past results, performance or achievements). These factors

include the failure to complete and commission the mine facilities, processing plant and related infrastructure in the time frame and

within estimated costs currently planned; variations in global demand and price for molybdenum and copper; fluctuations in exchange

rates between the U.S. dollar and the Australian dollar; failure to recover the resource and reserve estimates of the Project; the failure

of Moly Mines� suppliers and service providers to fulfil their obligations under construction, supply and tolling agreements; unforeseen

geological, physical or meteorological conditions, natural disasters or cyclones; changes in the regulatory environment, industrial disputes,

labour shortages, political and other factors; the inability to obtain additional financing, if required, on commercially suitable terms; and

global and regional economic conditions. Readers are cautioned not to place undue reliance on forward-looking statements. We assume no

obligation to update such information.

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MolybdenumMolybdenumSpinifex Ridge Molybdenum ProjectSpinifex Ridge Molybdenum Project

Should You Be Interested?

MOLYMOLYThe Metal

MOLYMOLYThe Company

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MOLYMOLYMINESMINESLIMITEDLIMITEDSpinifex Ridge Molybdenum ProjectSpinifex Ridge Molybdenum Project

Mo Metal Price

+ $30per lb

$73,000per ton

OR

Moly Mines has 850,000,000 lbs of MoPlus

Copper, Tungsten and Iron

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Molybdenum OxideMolybdenum Oxide

CopperCopper

NickelNickel

ZincZinc

Molybdenum � the metalMolybdenum � the metalSpinifex Ridge Molybdenum ProjectSpinifex Ridge Molybdenum Project

Stable, non volatile price

Sept 2003 Sept 20080

2.50

US$

/lb

0.501.001.502.00


30

US$

/lb

6121824


5

US$

/lb

1234


20

40U

S$/lb

5


Why the High Mo Price?Why the High Mo Price?Spinifex Ridge Molybdenum ProjectSpinifex Ridge Molybdenum Project

� World Mo economy is rapidly changing

� Accelerating growth in consumption ( 5 � 6%)

� Driven by;

! hydrocarbon industry

! construction industry

! automobiles

! 21st century issues

� global warming

� nuclear power

Rougher \ Scavengers Flotation

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Chindia, ChindiaChindia, ChindiaSpinifex Ridge Molybdenum ProjectSpinifex Ridge Molybdenum Project

� 25% of world Mo production

� +35% of world steel

� +25% of world specialty steel �expanding

� Mo exports severely restricted

� Urbanisation, infrastructure

China

India et al

Secondary Crusher

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World Mo Industry � STAGNANT !!!World Mo Industry � STAGNANT !!!Spinifex Ridge Molybdenum ProjectSpinifex Ridge Molybdenum Project

� 25 years of low, flat Mo prices

�Little or no exploration

�Last new large Mo mine � 1982

�World consumption � 460m lbs pa, 5% growth pa

The world needs a �Spinifex Ridge�every year to satisfy expanding

consumptionGrinding

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MOLYMOLYMINESMINESLIMITEDLIMITEDIndustry OverviewIndustry Overview

Growing Supply Defecit Growing Supply Defecit

Highlights

� Estimated committed supply growth includes plannedexpansions of existing primary and by-product mines

� Moly consumption is expected to grow at 5-6% CAGR through 2015

� Cumulative supply deficit of 70-100Mlb expected by 2012, growing to 230-300Mlb by 2015

� Short fall in future supply can only be met by NEW production from NEW mines

� Only 4 major new primary mines under consideration to help fill this deficit

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Why Moly Mines?Why Moly Mines?Spinifex Ridge Molybdenum ProjectSpinifex Ridge Molybdenum Project

� The World�s most advanced large Mo resource

� Significant Copper, Iron, Tungsten, Silver

� All permitting in place, Stage 1 development commenced

� Capex, Opex largely de-risked

� Located close to Asian market in the Pilbara, WA

� Long life resource, can supply 5% of World consumption for +25 years

� Off-take with ThyssenKruppFlotation Copper Cleaning

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Mt Newman (Fe)Mt Newman (Fe)

Woodie Woodie(Mn)

Woodie Woodie(Mn)

Telfer(Au, Cu)Telfer

(Au, Cu)

Paraburdoo (Fe)Paraburdoo (Fe)

Tom Price (Fe)Tom Price (Fe)

Marble Bar

Nifty (Cu)Nifty (Cu)

Port Hedland

Dampier

Broome

Spinifex RidgeSpinifex RidgeYarrie (Fe)Yarrie (Fe)

100kms

KarrathaKarratha

W e s t e r n

A u s t r a l i a

Chichester Range (Fe)Chichester Range (Fe)

Major RoadRailMajor Port

EASTASIAEASTASIA

Commodity

Iron OreManganeseChromiteCopperSaltCondensateLNGLPGAmmonia

Current

2641.10.30.26.83.312.51.50.7

Future

8001.50.50.48.34.517.02.00.8

Production � Mt pa

Pilbara Exporters 2006 / 2007

4,000kms4,000kms

10,000kms

13,000kms

18,000kms

Pilbara Region, Australia � Location, Location !Pilbara Region, Australia � Location, Location !Spinifex Ridge Molybdenum ProjectSpinifex Ridge Molybdenum Project

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Construction ReadyConstruction ReadySpinifex Ridge Molybdenum ProjectSpinifex Ridge Molybdenum Project

Services corridorServices corridor

Secondary CrusherSecondary Crusher

StockpileStockpile

Ball & SAG MillsBall & SAG Mills

HPGR MillHPGR Mill

Power StationPower Station

AdministrationAdministrationTailings ThickenerTailings Thickener

Mo / Cu Regrind & FlotationMo / Cu Regrind & Flotation

Waste 3Waste 3

Waste 2Waste 2

Waste 1Waste 1

PitPit

ROMROM Plant &AdministrationPlant &Administration

Dry Stack TailingsDry Stack Tailings

CampCamp

Pit Office/WorkshopsPit Office/Workshops

Port Hedland (160kms)

NorthNorth

TunnelTunnel

23 Year Reserve+ Resource tail

10 Year

20 Mtpa Open pit mine140,000 tonnes / day (average)Pre-strip � 34 Million tonnesStrip ratio � 1.1 to 1

(includes pre-strip, excludes low grade)

First 10 year pit� 1.3 kms x 1.1kms� 400m deep, Pit angle 43°

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Mineral / Ore Reserves & Mineral ResourcesMineral / Ore Reserves & Mineral ResourcesSpinifex Ridge Molybdenum ProjectSpinifex Ridge Molybdenum Project

JORC/NI43-101 classification Mt Mo% Cu% Ag g/t Proven reserves 199.7 0.06 0.10 1.5 Probable reserves 251.1 0.04 0.07 1.1 Total 450.8 0.05 0.08 1.3

JORC/NI43-101 classification Mt Mo% Cu% Ag g/t Measured resources 206.8 0.06 0.10 1.5 Indicated resources 445.4 0.04 0.07 1.1 Total 652.2 0.05 0.08 1.3 Inferred resources 399.0 0.04 0.07 1.1

Reserves

Resources

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0.09% Mo HighGrade Core

0.02% Mo Resource(~1 billion tonnes)

10 Year Pit Shell

10 Year Plan10 Year PlanSpinifex Ridge Molybdenum ProjectSpinifex Ridge Molybdenum Project

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2020 and Beyond2020 and BeyondSpinifex Ridge Molybdenum ProjectSpinifex Ridge Molybdenum Project

� Ore :

� Mo %:

� Strip Ratio

Initial 10 Years (DFS)Initial 10 Years (DFS)

197Mt

0.065

1.3 :1

� Ore :

� Mo %:

� Strip Ratio

2020 & Beyond2020 & Beyond

935Mt

0.044

1.1 :1

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MOLYMOLYMINESMINESLIMITEDLIMITEDSpinifex Ridge Molybdenum ProjectSpinifex Ridge Molybdenum Project

Expansion Scenario �2015Expansion Scenario �2015

DFS 20mtpa � Pre Tax NPV - A$855M IRR - 21.5%

30mtpa - (3 year Av Mo)1 A$2,215M 23.2%- (Spot Mo)2 A$3,313M 29.9%

� In-pit crusher, mill expansion to 30-33mtpa

� Stockpiled, lower-grade ore processed from 2015

1. US $28.50 / lb � per Ryans Notes

2. US $33.50 / lb � per Ryans Notes

Flotation Mo Cleaners

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Project ExecutionProject ExecutionSpinifex Ridge Molybdenum ProjectSpinifex Ridge Molybdenum Project

� All mining leases "

� Native title agreement "� Environmental approvals

� State "

� Commonwealth "

� Key construction contracts "

� Mining contract awarded � A$1.1 billion over 7 years "

� Engineering / construction team "

� EPCM "

� Offtake � ThyssenKrupp "

� Long lead equipment "Milling

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Project UpdateProject UpdateSpinifex Ridge Molybdenum ProjectSpinifex Ridge Molybdenum Project

� 70% Project capital cost contracted or tendered

� Engineering and procurement of process plant

� 35% complete

� 463,000 man hours

� $150m Interim Financing negotiated and being documented

� funds expected mid October

� continues Critical Path activities - long lead items, construction

camp, access, airport

� Full project funding � negotiating with Strategic Investors

Milling

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Execution & Development TimetableExecution & Development TimetableSpinifex Ridge Molybdenum ProjectSpinifex Ridge Molybdenum Project

Q1

20072007

Q2 Q3 Q4 Q1

20082008

Q2 Q3 Q4 Q1

20092009

Q2 Q3 Q4 Q1

20102010

Q2 Q3 Q4

� Long Lead Items Ordered

� Feasibility Study Completed

� Capital Cost Control Est.

� Key Contract Completion

� Environmental Approvals

� Project Funding

� Site Construction Activities

� Commissioning

� Production

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GalifreyPlanned

Spinifex Ridge Molybdenum \

Copper Pit

PlannedSpinifex Ridge Molybdenum \

Copper Pit

Planned Waste DumpPlanned Waste Dump

PlannedSpinifex Ridge

Processing Plant

Plan

ned

Tunn

el

500m

Auton

Dalek

Surface Fe Mineralisation Outcrop

Fe Prospect

North

I R O N

F O R M A T I O N

Iron Ore At Spinifex Ridge Iron Ore At Spinifex Ridge

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MOLYMOLYMINESMINESLIMITEDLIMITEDSpinifex Ridge

- Iron OreSpinifex Ridge- Iron Ore

ResultsConceptual Model

Dalek Prospect� 72 metres @ 60.7% Fe from 0m including

� 42 metres @ 66.2% Fe and� 9 metres @ 60.2% Fe

� 106 metres @ 52.8% Fe from 0m including


Auton Prospect� 55 metres @ 64.3% Fe from 0m

� 19 metres 61.6% Fe from 3m

Galifrey Prospect (rockchips)

� SXF42119 � 67.1% Fe� SXF42124 � 65.6% Fe� SXF42118 � 65.5% Fe

� Targeting a 10 Million tonne resource

� 6 year mine, 1- 2 Million tonne pa

� Drill & blast, crush, screen, truck to Port Hedland - $50/t

� Minimal capital cost, established infrastructure

� Complementary to Spinifex Ridge Mo\Cu operations

� $360m Net Cashflow (50:50 lump/fines, 60% Fe)

or

� A$2-3/lb in Mo cost credits

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MOLYMOLYMINESMINESLIMITEDLIMITEDMolybdenum � �a metal for our time�Molybdenum � �a metal for our time�

What is Molybdenum?What is Molybdenum?

Spinifex Ridge Copper/Molybdenum Producer

Crushing, Grinding, Flotation

Crushing, Grinding, Flotation

Lubricants, Chemicals, Mo Metal

Bags, Drums, Cans

Bags, Drums

Low Cu Concentrate

High Cu Concentrate

TechnicalMolybdenum Oxide

Pure Oxide Oxide Powder and Briquettes

FeMo

LeachingRoasting

Sublimation and Further Processing

Converting

Molybdenum Output Flow-Chart Highlights

� Moly is primarily used as an alloying agent in steel or as a catalyst in chemicals

� Moly offers very attractive properties� Fourth highest melting point of any metal

on the periodic table� Anti-corrosive� Weldability� Flexibility� Hardness

� Low substitution risk� Unique properties that satisfy increasing

performance requirements� Potential substitutes are more costly

and/or follow same commodity cycle

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Diversified End-Use Diversified End-Use Molybdenum � �a metal for our time�Molybdenum � �a metal for our time�

28%

40%11%

6%

4%4%

5% 2%

StainlessSteel

Low Alloy Steels

Chemicals

Moly Metal

Castings

Superalloys

High-speed & tool steels OtherGlobal economies demanding more molybdenum

� Stainless and low alloy steels will continue to

grow supporting molybdenum�s traditional

applications.

� BUT�.

� The Energy Industry to emerge as a major end

user of molybdenum products

Energy IndustryEnergy Industry Global WarmingGlobal Warming Nuclear PowerNuclear Power

� Desalination� Automobile Industry� Desalination� Automobile Industry

� Piping� Shells & tubes� Piping� Shells & tubes

ULSDULSD

� Ultra low sulphur diesel� Catalysts� Ultra low sulphur diesel� Catalysts

� Pipelines� Sour oils & gases

(high sulphur)

� Pipelines� Sour oils & gases

(high sulphur)

Energy Industry accounts for 35-40% of global Moly demandEnergy Industry accounts for 35-40% of global Moly demand

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Market HighlightsMarket HighlightsMolybdenum � �a metal for our time�Molybdenum � �a metal for our time�

� Sept 2008 Spot Price

� US$33.50 /lb

� 3 Year Average

� US$30.00 /lb

� 5 Year Average

� US$26.10 /lb

� Long Term Estimate

� US$20.00+ /lb

PricingSupply and Demand

CAGR Demand Estimates: 5 � 6%

Existing Production Sources Are At Capacity � Primary mines require capital intensive expansions

� By-product producers have high graded & production stagnant

� Chinese industry consolidating, export quota�s & tariffs applied

� No significant new supply before 2011

� Production costs are rising, energy intensive industry

� New projects are capital intensive

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China Growth Supported by Stability from WestChina Growth Supported by Stability from WestIndustry OverviewIndustry Overview

� Western Europe, USA and Japan accounted for 62% of total consumption in 2007, China consumed 17%

� World CAGR of 6.6% since 2002� China CAGR of 24% since 2002� Strong global demand growth since the early 2000s

� Continued strong demand growth from BRIC markets driven by urbanization, development in stainless, carbon and alloy steels

� China to lead world growth at estimated 12 � 15% CAGR through 2015� Developing steel industries key growth driver (2006-2012 CAGR of 17%)

� 8-9% growth expected for low alloy steels and chemicals

� Western Europe: Estimated 3 � 4% CAGR through 2015� Stainless steel represents ~50% of total moly demand

� Automotive industry (low alloy steels) also important contributor to demand

� Moly bearing grades becoming increasingly popular

� USA: Estimated 2 � 3% CAGR through 2015� Comparatively even distribution between end segments

� Strong environmental regulations driving growth (chemicals)

HighlightsMoly Consumption Dominated by the Big Four

China is Expected to Drive Demand Growth

17%

15%

21%29%

18%USA

W Europe

Other

Japan

China

30%

11%

20% 25%

14%USA

W EuropeOther

Japan

China

~ 2015

2007

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Iron Ore At Spinifex Ridge Iron Ore At Spinifex Ridge

Iron Ore Drilling

Tungsten Drilling

Iron Formation

Waste

Mo Pit

Waste

Process Plant

0 1500metres

Mine Village

Airstrip

Tailings

Fe Area 2Fe Area 2 Fe Area 1Fe Area 1

S p i n i f e xR i d g e

Mining Leases

� 55 metres @ 64.3% Fe from 0m� 19 metres @ 61.6% Fe from 3m� 29 metres @ 58.3% Fe from 0m including

� 4 metres @ 63.1% Fe from 0m and� 11 metres @ 61.2% Fe from 17m

� 18 metres @ 58.3% Fe from 7m including� 8 metres @ 61.4% Fe from 11m

� 14 metres @ 55.6% Fe from 2m� 16 metres @ 56.0% Fe from 0m� 18 metres @ 54.3% Fe from 0m� 7 metres @ 55.0% Fe from 1m� 106 metres @ 52.8% Fe from 0m including


� 72 metres @ 60.7% Fe from 0m including� 42 metres @ 66.2% Fe and� 9 metres @ 60.2% Fe

� Major synergies for the Spinifex Ridge operation

� Potential credits to molybdenum production

� Resource delineation drilling required

Highlights Results

June

200

8 R

esul

ts

General / Misc. Leases

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Corporate StructureCorporate StructureMoly Mines LimitedMoly Mines Limited

Shares on issue: 86,191,677

� ASX Listed: 54M

� TSX Listed: 32M

Options: 15,425,000

Fully diluted issued capital: 101,616,677

Board/Staff (inc all options) : 16%

Cash on hand: A$26M

Major Shareholders:� 19.9% - Harbinger Capital� 7.2% - CIBC Mellon� 5.8% - Oppenheimer Funds

Broker Coverage:� Paradigm Capital Inc.� Haywood Securities Inc. � Wellington West Capital Markets

Inc.Trading Symbols:

� ASX: MOL, TSX: MOL, FWB: HJ1

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� 50 Kings Park Rd, West Perth, WA, 6005, AUSTRALIA� Telephone: +61 8 9429 3300 Fax: +61 8 9429 3399

Contact informationContact information

� Suite 1801, Level 18, 80 Richmond St West, Toronto, Ontario, CANADA

� Telephone: +1 416 777 1801 Fax: +1 416 777 1802

� Email: [email protected]� Website: http://www.molymines.com� Stock market codes: ASX: MOL, TSX: MOL, FWB: HJ1

Moly Mines LimitedMoly Mines Limited

molymoly credit suisse - global steel and mining … suisse - global steel and mining conference ......

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