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BATSALANI JUNIOR MINING: BLACK OWNED JUNIOR MINING INVESTMENT COMPANY Toronto: 4 March 2008. Farouk Abrahams Chief Executive: Batsalani Junior Mining. BATSALANI JUNIOR MINING GROWTH OPPORTUNITIES IN MINING IN SOUTH AFRICA.

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batsalani junior mining black owned junior mining investment company toronto 4 march 2008

BATSALANI JUNIOR MINING:BLACK OWNED JUNIOR MINING INVESTMENT COMPANYToronto: 4 March 2008

Farouk Abrahams

Chief Executive: Batsalani Junior Mining

batsalani junior mining growth opportunities in mining in south africa

BATSALANI JUNIOR MINING GROWTH OPPORTUNITIES IN MINING IN SOUTH AFRICA

Batsalani is a Setswana word meaning PARTNERSHIP, a philosophy our team shares with our associated strategic alliances, investors, partners, lenders, BEE consortia and portfolio investee companies

www.batsalani.co.za

agenda
AGENDA
  • GROUP
    • Background
    • Existing Investments
  • MARKET OPPORTUNITY
  • BATSALANI JUNIOR MINING
    • Executive Summary
    • Pipeline
    • Smokey Hills PGM Project
    • Investment Model
    • Exit Strategies
    • Conclusion
background
BACKGROUND

TELECOMMS-MEDIA-TECHNOLOGY

MINING & RESOURCES

PROPERTY

Mining Assets

“Incl. Junior Mines”

Beneficiation

Services and procurement

  • Batsalani is a black owned investment company owner managed by experienced entrepreunial investment bankers.
  • Independent with a sound proven track record in its focus areas and was founded by the late Frank Molobi, Farouk Abrahams (CE) and Ibrahim Khan (Chair).
  • Batsalani aims to identify, source and secure a portfolio of assets that provides a consistent and sustainable cash flow.
  • Our vision is to leverage Funding, Strategic industry insight, Relationships, and Transaction execution capabilities to unlock value in our portfolio companies.

Batsalani focuses on the following sectors:

market opportunity
Market Opportunity

Mineral and Petroleum Resources Development Act (MPRDA) 2002

Prospecting rights applied for between May 2004 and October 2007 totaled:

7 547 received

5 948 accepted

2 789 granted

2 033 issued

Mining permits applied for between May 2004 and October 2007 totalled:

3 840 received

3 255 accepted

1 318 issued

The natural consequence of the MPRDA and related legislation over the last 3 years resulted in conclusion of over US$ 10 billion BEE deals

Creation of black owned mining companies – Anooraq, BSC Resources

Creation of Partnership/JV’s – Platinum Australia, GVM Metals, Homeland Corp

Factors such as structurally higher demand in terms of “Chindia effect”, the weakening US$ and consolidation in supply, remain positive factors

South Africa is the world’s richest and most diverse repository of mineral commodities.

Globally, largest producer of gold, vermiculite, platinum and chromium.

Major deposits of antimony, coal, iron ore, manganese, nickel, phosphates, tin, uranium, diamonds, copper and vanadium

Source: SAMDA

south africa s exploration expenditure 2003 2006
South Africa’s Exploration Expenditure2003-2006

Dominant targets for recent exploration activity in South Africa:

PGM’s, Diamonds, Gold, Uranium and Coal

Source: SAMI Report – 2006-2007

south africa s role in world mineral production
South Africa’s Role in World Mineral Production

Vanadium

Silicon metal

Ferro-chromium

Vermiculite

Platinum group metals

Manganese ore

Fe-Mn/Fe-Si-Mn

Chrome ore

Iron Ore

Coal

Aluminium

Antimony

Zinc

Uranium

Silver

Gold

Copper

Lead

Number = World Ranking

Nickel

Source: Data from SAMI Report – 2006-2007

the listed junior mid tier mining companies
The Listed Junior/Mid Tier Mining Companies

New BEE regulations (2002) have added some life into the industry by attracting smaller mining players to join the fray.

With the major players focusing on cross-acquisition, it is the smaller miners that are now expected to revive the industry.

Source: Business Monitor International

By Market Capitalisation

Sector Exposure

Source: Nedcor Securities, as at 15/2/08

why junior mid tier mining isn t what it used to be
Why Junior/Mid Tier Mining Isn’t What It Used To Be?

Thejunior mining space in South Africa has increased massively in value

Source: Data from NedSec Junior Mining and Exploration Index and I-Net Bridge

executive summary
Executive Summary
  • The opportunity to benefit from investing into mining projects in South Africa.
  • Via a black owned investment company managed by an experienced team of technical and financial entrepreneurs/professionals
    • Intend on partnering with junior/mid-tier mining operators which have a successful track-record in both green and brown fields projects and/or
    • Or do some early stage development i.e. take it up the value curve and/or
    • Use different mineral hubs for consolidation in the industry
  • Strong pipe line in Commodities – PGM, coal, nickel and base metals
  • To generate capital appreciation, with a view to extracting long term growth from profitable portfolio investments in the junior mining sector
  • We are not:
    • Operational company such PLA or BSC Resources
    • Nor private equity or asset management company in the strict sense
  • We are development company - combination
pipeline
Pipeline

Black owned and managed investment firm

Strong and experienced financial and technical team

Has established key relationships with all stakeholders in the industry

pla smokey hills pgm project
PLA Smokey Hills PGM Project
  • Located on the eastern limb of the Bushveld Complex in the Limpopo Province
  • PLA commenced a resource definition drilling program on the project in July 2005
  • Mining Right issued & construction commenced in November 2007
  • Open Pit Mining started in January 2008
  • Commissioning in June 2008
investment model
Investment Model
  • 3 C’s
    • Counterparty
    • Country
    • Commodity
  • Leverage own capital using favourable developmental funding for BEE deals
  • Cost curve analysis

Source: NAMF Annual Report

exit strategies
Exit Strategies
  • Following results from early stage development either trade sale to and/or partner with a junior mining/mid tier company
  • Management Buy Out (“MBO”)
  • Leveraged Buy Out (“LBO”), possibly coupled with a share buy back
  • Initial Public Offering (“IPO”)
  • Acquisition by major mining company
  • Hold
concluding remarks
Concluding Remarks
  • Global demand for commodities
  • South Africa “response” to this global demand
  • Batsalani Junior Mining:
    • Black owned investment company
    • Structured multi-disciplinary management team – highly experienced in mining and finance
    • Strong existing relationships with key players in the industry
    • Strong pipeline of deal flow at advanced stages
  • Interested parties as investors, assets or relationship with potential sources of junior mines are invited to meet with management to discuss possibilities
contact details
Contact details

Farouk Abrahams

Tel: +27 (0) 11 656 6816/7

fabrahams@batsalani.co.za

South Africa – Johannesburg

Physical Location: 222 Rivonia Road

Morningside Close

Block A, 1st Floor

Morningside

21496

Postal Address: P O Box 781809

Sandton

2146

Telephone: +27 (0) 11 656 6816/7

Fax: +27 (0) 11 656 6804

Website: www.batsalani.co.za