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Unveiling the Path to Success: Sydney Mining Club Presentation Recap

Dive into the corporate journey of Sydney Mining Club from 1996 to 2002, detailing achievements in coal and gold production, exploration strategies, leveraging opportunities, and future value targets. Discover insights on coal and gold operations, infrastructure acquisitions, team building, and market positioning for growth.

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Unveiling the Path to Success: Sydney Mining Club Presentation Recap

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  1. SYDNEY MINING CLUB 5 DECEMBER 2002

  2. Outline of Presentation • the answer • the question • the explanation: • How we got here • Coal cash flow leverage • Gold exploration leverage • Value adding to coal and to gold • value today and target value • the plan

  3. 1996 to 2002 - Corporate • Chopped H.O and divested non-core • Acquired coal infrastructure and consolidated gold ownership at low cost • Started gold and coal production • Used a range of debt & equity finance • Minimised shareholder dilution • Built teams and backing • Formed strategic alliances

  4. 1996 to2002 - Gold • Bought out partners • Started profitable small mine • Built great exploration and mining teams • Established resources 780K oz at 7.6g/t • Installed large exploratory decline • Launched exploration of Goldfield 7/02 • Already having significant hits Leverage to exploration upside

  5. 1996 to 2002 - Coal • Purchased infrastructure and land in 1998 • Built great team with a halved workforce • Production ramping-up to > 1.5Mtpa • Sufficient development put in place • Diversified customer & product base • Commenced mining in thick-seam zone • Positive consequences for coal quality • Some lessons being learnt for mining Leverage to emerging coal cash flow

  6. Coal – Production • 00-01 0.5Mt • 01-02 1.0Mt • 1st half 0.8Mtpa • 2nd half 1.8Mtpa • 1.2Mtpa rate triggers profits

  7. Southland is diversifying its customer & product base in preparation for production at capacity of >2Mtpa Coal – Marketing

  8. Coal- Strengths • Long-life mine • Most surface lands our freehold • Strong community support • Strong environmental control • Prolific historic coal seam • High quality = high margin • Infrastructure in place for +2 mtpa

  9. Gold - Production • Production from one zone of Inglewood Structure • Production doubled over 5 years • Profitably mining at high-grades of 8 g/t • Targeting much larger production if exploration succeeds Cash Cost = $317/oz

  10. Gold 2002-03 Status • Current production is efficient • Decline connects deeper mine in Dec • Major Goldfield targets being drilled • Decline will extend to discoveries • Still drilling Partridge to the west • 1st cab off the rank will be Inglewood north • Last week hit Inglewood 1 km to the south

  11. Exploration Potential • 100% controlled Goldfield and region • Prolific high-grade 4 million oz field • Potential for a further 6 million ozs • Strong community support • Low environmental risks • Established geological expertise

  12. River sand & cover rock concealment Mary Valley sediments (5-20m thick) GEOLOGICAL KEYHow gold formed at Gympie INGLEWOOD LODE

  13. Exploration Technology is Working • Targeting a new 2 million oz Inglewood-style ore system • Drilled through the river sands & sampled fresh rock below • Lo-level geochemistry identified anomalies • High hit rate in follow-up drilling of + 65%

  14. 1.5 million oz gold produced 2 million oz gold produced Ore Feeder ? Ore Feeder ? Inglewood Lode – A Major Goldfield Feeder?

  15. Gold - Development North • Deep Monkland Mine has +3 years reserves. • Lewis Decline is accessing ore zones and opens up the goldfield potential. TIME TO EXPAND EXPLORATION More Ore Shoots

  16. Inglewood Lode - north • New ore shoots north of current mine • Can access by extending Lewis Decline

  17. Inglewood being traced • 2km zone mined to date on/near Inglewood has yielded 2 million ounces at +8g/t • Length of Inglewood extended by >8km by geophysical survey interpretation • Drilling yielding good early results to north • We’ve hit it last week to the south, uplifted!!!

  18. Gold - Gemstone

  19. Coal $100 Million Sold 10% for $11 million In May 01 Gold $68 Million The starting point, mkt cap $160M Company Production Market Cap Market Cap (000oz) ($millions) (per prod oz) Troy 50 77 1.54 Triako 46 48 1.04 Sipa 56 47 0.84 152 172 1.13 Gympie Production = 60,000 ounces Imputed Value = $68 million

  20. The plan is to achieve 20%pa for next 6 years • GYM share price > 230cps in 2008 ? • Need value growth $240M ? • Discover/exploit > 2M oz au, @ 8g/t ? • Coal to 2.5Mtpa…$15/t profit & FCF ? • Add legs to each table, corporate ? • Separate the tables?

  21. emerging coal cash flow with the exploration leverage of a high-grade goldfield

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