Objective Capital's Rare Earths, Speciality & Strategic Metals
Investment Summit 2012
Ironmongers' Hall, City of London
13-14 March 2012
Speaker: Mark Strizek, Vital Metals
Monthly Market Risk Update: March 2024 [SlideShare]
Developing a top ten unexploited tungsten deposit
1. RARE EARTHS, SPECIALITY
& STRATEGIC METALS
INVESTMENT SUMMIT
Developing a top ten unexploited tungsten deposit
Mark Strizek – CEO, Vital Metals
IRONMONGERS’ HALL, CITY OF LONDON TUESDAY-WEDNESDAY, 13-14 MARCH 2012
www.ObjectiveCapitalConferences.com
3. Developing and Exploring
Watershed Tungsten Project, Queensland
JOGMEC joined as JV partner in August 2011. Funding DFS study to earn a
30% interest in the project
DFS study expected to be completed in Q4 2012
Tungsten prices at all time high as Chinese demand overtakes ROW
Tungsten has been noticed by globally significant investment house
Gold Exploration, Burkina Faso
18,000 metre drilling programme completed at Kollo, notable gold assay
results include1:
44m at 6.39 g/t gold from 8m including (4m at 58.03 g/t gold from 24m)
60% Farm in milestone reached with Ampella Mining Limited over Doulnia
and Kampala tenements (Vital earning 80%).
Tenement portfolio grows to 850 sq km with two new exploration tenements
granted (100% interest).
1 Reported previously 3/8/2011
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4. Corporate Overview
Capital Structure Major Shareholders
Citicorp Nominees – 9.16%
ASX: VML
Rex Harbour – 7.66%
Shares on Issue JP Morgan Nominees – 6.01%
228.40 million shares Consolidated Minerals – 5.5%
4.7 million unlisted options HSBC Custody Nominees – 4.73%
National Nominees Ltd – 4.11%
Market Capitalisation
$11.42 million Directors – 1.73%
At share price of $0.050 (09 Mar 2012) Top 40 – 61.85%
Cash at 31 December 2011, $1.60 million
ASX:VML
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5. Vital’s Vision
“To develop high quality, low cost projects that can be brought
into production quickly, creating value for our shareholders.
Achieving this via a project portfolio diversified by commodity,
country and development stage to minimise risk and provide
maximum opportunities for growth.”
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6. Tungsten – One of the Best Performing
Commodities in 2011
A step change in prices during 2010 – 2011
A repeat of what occurred to prices during 2005
Support has been found for the new price regime
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7. Tungsten – Demand driven by the Dragon
Global demand for tungsten is forecast to continue growing strongly, particularly in hard
metal and cutting tool utilization. Global deep well drilling is also increasing demand.
Global supply of tungsten is forecast to grow at 6% per annum. However this is subject to
confirmation on a number of new projects outside China.
Primarily due to declining grades in traditional mining areas and increasing wage costs, the
cost of production in China continues to increase strongly.
By 2012 China's demand is forecast to significantly exceed its domestic supply. Despite its
strong domestic production program, China is already the world's largest importer of
tungsten concentrates.
Over the past decade, recycling has filled the shortfall in mined supply, however recycling
programs has now reached maximum efficiency and will not continue to be an increased
supply source.
The indicated new price regime will encourage new projects coming to market.
However, this potential increased supply is not expected to match forecast demand in the
short to medium term, particularly as the lead time for developing new mines is increasing.
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8. Tungsten – Supply Shortfall Forecast
Reliability of future supplies of
tungsten minerals is of concern to
many nations.
Demand outstripping supply with
the difference primarily being
supplemented by material released
from government stock
piles, especially in the USA and
Russia.
Source: ITIA
Roskill forecasts the world tungsten
market to be in deficit by 2013 as
government stock piles are depleted.
Source: Roskill ASX:VML
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9. Watershed – Targeting Production in 2014
Definitive Feasibility Study (DFS) scheduled
for completion H2 2012 – Targeting
production in 2014
Indicated JORC Code Compliant Resource -
15.1mt @ 0.46% WO3 (0.1% WO3 cut-off
undiluted) open at depth and along strike
Finalising project Environmental Approval -
expected to be completed in 2012
Native Title ILUA progressing to
registration in 2012
Mining Lease applications already on foot
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10. Watershed – DFS Current Work Program
Completed diamond drill program
designed to close off mineralisation.
New data will be used to update
resource model which will feed into pit
optimisation studies
Confirmatory metallurgical test-work
testing variability and floatation
recovery underway
Work on finalising design of TSF/ WRD
has commenced
Working with Western Yalanji to
register ILUA with NNTT
All work being funded by JOGMEC
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12. Watershed – Geology and Resources
Watershed deposit is part of a large
structural system that is largely
unexplored. Vital’s exploration package
now covers 600 sq km.
Walk up exploration prospects at the
Watershed South, Desailly and Desailly
North.
Drill spacing over the main resource area is
good with the grid spacing approaching
50m by 50m.
Resource comprises 997 mineralised
intercepts (Av Length is 5.4m):
– 304 of intercepts exceed 5m @ 0.5%
WO3
– 160 of these exceed 5m @ 1.0% WO3
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13. Watershed – Potential for Satellite Operation
Recent review of historic data
shows multiple veins of
tungsten in the Desailly
prospect just 5km from the
proposed Watershed tungsten
mine.
Desailly has an exploration
potential of between 2-3 million
tonnes of mineralisation with
grade expected to be between
0.2 and 0.4% WO3.
Desailly could add to the life of
operations at Watershed by
providing feed to the Watershed
processing plant.
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14. Watershed – Potential Exists at Depth
Vital geological team confident in
significant scope for extending
mineralisation at depth.
Trend observed for mineralisation
to increase with depth as in hole
MWD119 - intersected 20m @ 1.27
% WO3 from 302m
Vital developed the Watershed Vein
Swarm Model (right) which exhibits
a good correlation with drilling
Model suggests potential for
mineralisation to have significant
grade and thickness at depth
Potential for underground
operation in the future
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15. Watershed – Simple Flowsheet
Simple flowsheet – exploits scheelite
fluorescence and density:
– Ore crushed from ore stockpiles fed to
– X-Ray ore sorter which removes around
~50% of waste.
– Retained feed will be split in spirals and
then cleaned using tables, magnetic
separation, cyclones and floatation.
Intention is that plant will be modular and
scalable
Further work on floatation circuit remains to
be completed
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17. Burkina Faso – Open for Business
Presidential Democracy since 1990
Rule of Law, rising standard of living.
Transparent mining code based on WA Mines Act
70,000 sq km of Birimian Greenstone Belts
Significant potential for growth in gold resources
support services available
Birimian
Birimian Gold Gold
Area Resource Resources
Country (%) (M oz)* (%)
Ghana 19 110 61
Mali 10 33 19
Burkina Faso 22 15 7
Guinea 11 12 7
Ivory Coast 35 8 4
Senegal 3 3 2
TOTAL 100 +181 100
*Deposit >1Moz
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18. Burkina Faso – Located on a Proven Gold System
Vital selected the tenements
in Burkina Faso due to their
location in favourable
geotectonic settings at, or
near to, the intersection of
the Markoye Fault Corridor
and the Bole shear zone
These systems host the
Essakane, Bombore, Kiaka
and Youga gold deposits for
a combined total of >16 Moz
gold resources
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19. Burkina Faso – Impressive Gold Results
Strategic tenement package with potential for further gold
discoveries
Early exploration success including exciting gold intersections:
– 44m at 6.39 g/t gold from 8m 1; and
– 32m at 2.44 g/t gold from 36m 2
18,000m of RC drilling completed confirms gold potential - provides
foundation to build ongoing exploration strategy. Widespread gold-
in-soil anomalism is providing a pipeline of targets
60% ownership attained on JV ground – in partnership with Ampella
Mining. Vital to earn 80% on funding a PFS
Mediga and Zeko tenement recently granted (Vital 100%) giving 850
km2 of contiguous tenements including JV lease areas.
1 Reported previously 3/8/2011
2 Reported previously 24/3/2011
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21. Burkina Faso – Kollo Gold Prospect
Over 3km of strike length at Kollo, active artisanal mining along trend
18,000m RC drilling completed, project best intercept of 4m at 58.03 g/t gold
from 24m (KRC210)
Significant areas remain untested along strike – more drilling planned
All results reported previously 25/5/2010, 24/3/2011, 9/6/2011, 3/8/2011, 30/1/2012, 20/2/2012 ASX:VML
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22. Burkina Faso – Kollo Gold Prospect
Mineralisation from
surface, should be suitable for
open pit mining
Indications of high grade
shoots plunging to the north-
west
Open along strike and at
depth, further work needed to
test the limits
All results reported previously ASX:VML
25/5/2010, 24/3/2011, 9/6/2011, 3/8/2011, 30/1/2012, 20/2/2012
www.vitalmetals.com.au
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23. Burkina Faso – Boungou South Gold Prospect
Boungou South located around 6km
to the south east of Kollo Prospect
Encouraging first pass RC drill results
include:
4m @ 4.93 g/t gold from 65m
(KRC229);
3m @ 1.8 g/t gold from surface
(KRC233);
5m @ 5.59 g/t gold from 31m (inc 1m
@ 24.97 g/t gold from 35m, KRC233).
Open along strike, further work
planned.
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24. Vital Metals – The Investment Case
Fully funded DFS (JOGMEC) is due for completion in 2012
Fast tracking to tungsten concentrate production by 2014
Access to off-take partner and project finance via JOGMEC farm-in
Robust project metrics and low capital cost from previous Feasibility Study
Watershed JORC tungsten resource is open ended which combined with large
tenement package at Watershed provides a tremendous opportunity to
increase resources via further exploration
Planning follow up exploration program, plenty of time to complete next round
of drilling in Burkina Faso before the wet season.
Aiming to define a maiden JORC gold resource at Kollo in 2012
Secured 60% milestone in Burkina Faso on JV tenements (earning 80%). Further
gold discoveries possible within 850 km2 of contiguous tenements
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25. Forward-looking &
Competent Person Statement
Disclaimer:
Certain oral and written statements contained or incorporated by reference in this presentation, including information as to the future
financial or operating performance of the Company and its projects, constitute forward-looking statements. All statements, other
than statements of historical fact, are forward-looking statements. The words
“believe”, “expect”, “anticipate”, “contemplate”, “target”, “plan”, “intend”, “continue”, “budget”, “estimate”, “may”, “will”, “sched
ule” and similar expressions identify forward-looking statements.
Forward-looking statements include, among other things, statements regarding targets, estimates and assumptions in respect of
tungsten, gold or other metal production and prices, operating costs and results, capital expenditures, mineral reserves and mineral
resources and anticipated grades and recovery rates. Forward-looking statements are necessarily based upon a number of estimates
and assumptions related to future business, economic, market, political, social and other conditions that, while considered reasonable
by the Company, are inherently subject to significant uncertainties and contingencies. Many known and unknown factors could cause
actual events or results to differ materially from estimated or anticipated events or results reflected in such forward-looking
statements. Such factors include, but are not limited to: competition; mineral prices; ability to meet additional funding requirements;
exploration, development and operating risks; uninsurable risks; uncertainties inherent in ore reserve and resource estimates;
dependence on third party smelting facilities; factors associated with foreign operations and related regulatory risks; environmental
regulation and liability; currency risks; effects of inflation on results of operations; factors relating to title to properties; native title
and aboriginal heritage issues; dependence on key personnel; and share price volatility and also include unanticipated and unusual
events, many of which are beyond the Company's ability to control or predict.
For further information, please see the Company's most recent annual financial statement, a copy of which can be obtained from the
Company on request or at the Company's website: www.vitalmetals.com.au. The Company disclaims any intent or obligation to
update any forward-looking statements, whether as a result of new information, future events or results or otherwise. All forward-
looking statements made in this presentation are qualified by the foregoing cautionary statements. Investors are cautioned that
forward-looking statements are not guarantees of future performance and, accordingly, not to put undue reliance on such
statements.
Competent Person:
The information in this report that relates to Exploration Results and Mineral Resources is based on information compiled by Mr Mark
Strizek (MD), an employee of the Company. Mr Strizek is a member of the Australasian Institute of Mining and Metallurgy (AusIMM)
and has sufficient experience of relevance to the styles of mineralisation and the types of deposits under consideration, and to the
activities undertaken, to qualify as a Competent Person as defined in the 2004 Edition of the Joint Ore Reserves Committee (JORC)
Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves.
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