OVERLAND RESOURCES LIMITED Audio Webcast

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OVERLAND RESOURCES LIMITED (OVR)

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OVERLAND RESOURCES LIMITED (OVR) Events

Company (Stock Code)	Date/Time	Event	Timezone: Australia/NSW
OVERLAND RESOURCES LIMITED (OVR)	Tue, 28 Oct 2008 09:00AM	Overland Summary 2008
OVERLAND RESOURCES LIMITED (OVR) Excellent Potential to Expand Andrew Zinc Deposit	Thu, 31 Jul 2008 03:00PM	OVR - Resourceful Events Investor Series: Melbourne - Mr Hugh Bresser, MD
OVERLAND RESOURCES LIMITED (OVR)	Wed, 20 Feb 2008 12:15PM	OVR - Andrew Zinc Deposit Update - Mr Hugh Bresser, MD
OVERLAND RESOURCES LIMITED (OVR)	Wed, 6 Jun 2007 04:30PM	OVR - Base Metal Project Update and Successful Placement - Mr Hugh Bresser, MD
OVERLAND RESOURCES LIMITED (OVR)	Wed, 26 Nov 2008 05:30PM 02:30PM Australia/West	Annual General Meeting City West Function Centre, 45 Plaistowe Mews, West Perth, WA
OVERLAND RESOURCES LIMITED (OVR)	Wed, 12 Mar 2008	Interim Results
OVERLAND RESOURCES LIMITED (OVR)	Wed, 28 Nov 2007 09:30AM	Annual General Meeting The Sutherland Room, City West Centre, 45 Plaistowe Mews West Perth WA 6005
OVERLAND RESOURCES LIMITED (OVR)	Wed, 26 Sep 2007	Full Year Results
OVERLAND RESOURCES LIMITED (OVR)	Wed, 21 Feb 2007	Interim Results
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OVERLAND RESOURCES LIMITED (OVR)

Please note: This company appears on this website as a result of its listing on the Australian Securities Exchange. Boardroom Radio does not claim any association with any company listed on this site.

PRESENTATION BY HUGH BRESSER, MANAGING DIRECTOR OF OVERLAND RESOURCES (OVR)

“Excellent Potential to Expand Andrew Zinc Deposit”

http://www.brr.com.au/event/48835

 

THURSDAY JULY 31, 2008, 3:00 PM.

 

            OVR    Overland Resources, we're relatively new. We listed in November last year, so we're coming up with our two-year anniversary, which is pretty exciting for

10                    us. We've got a fairly tight register with 74 million shares on this year of which about 50% to 55% is held by our top 20 shareholders and we've got, well there's only two on the slide, but we've got three significant shareholders that I think they're worth mentioning, the first one being Singpac International, which is a subsidiary of Glencore now holding about 13% of us. Geologic

15                    Resource Partners, which is our Boston-based fund that specializes in the commodity sector. They came on board with the fundraising for all in April last year. Geologic have had a lot of exposure to zinc to the North American market, so we're very pleased for them to come on with a sign and recognition of the quality of the project and of the team that we've put

20                    together. Our third substantial is a Melbourne-based fund, EIM Capital. They're, again, a specialist commodity fund. They've got a policy of having only 20 companies on their register and we're pleased to have them on board as well. Our current market capitalization is around 37 million and like everybody else we've been impacted by the current market situation. I don't

25                    think that's a major issue. I mean we're not the lone ranger there and I'm sure everybody in this room has been feeling the plight of the market since December.

 

                        Now Board and Management, Michael Haynes is our Chairman. Michael is

30                    focused mainly on project evaluation. He is also managing director of Black Range Minerals and chairman of Genesis Mining and Bellamel Mining. Myself, my background is minerals exploration and project development. I've spent 10 years with BHP and Billiton before joining Overland. Our recent member to the board is Anthony Polglase. Tony joined us in January. Tony's

35                    background is very much around metallurgy and for a zinc project that's an absolute crucial component for any development going forward. There's also got a great deal of background in project implementation and project management, which for us is crucial. We're slowly evolving our board and we will continue to evolve our board as the project advances. We are very much

40                    focused on moving from, basically, an exploration and development company to being a producer, and that's really what the timeline is that we're trying to achieve and what we've like to see at the end of the day. We have an office in Vancouver, which is managed by BP Exploration Adrian Bray. Adrian is a key geologist and a background in pre-feasibility, feasibility studies in QA/QC.

45

                        Now, Mark mentions the zinc market and I know Warwick did as well. If you have a look at the fundamentals, at the moment zinc is still at a critical level. The LME stocks are extremely low and we're sitting down here with sort of two to three weeks, three to four weeks, maybe of consumption sitting in the market and the price, yes, it's come off 50%, but it's still significantly higher than it ever has been. We don’t see this supply increasing. The current market at the moment, they were predicted. We expected them. We expect it to be flat for probably another 12 to 18 months. That's the expectation. Then

5                      around about 2011-2012, you'll start to see a major shift, supply diminishes, we move back into deficit and you should see, well the anticipation is that we see a significant price increase, and that's where we want to be. We're trying to look forward, to look for something that has a long term price appreciation, and we see zinc as being one of those commodities. We want to be in a

10                    position where we are coming into the market at the time that we do see those prices moving up.

 

                        On our project, it is based in the Yukon in Canada. We had a look at quite a few belts around the world for zinc properties. We like the Selwyn Basin; it's a

15                    richly-endowed base metal belt. It has some very significant base metal projects up there. It's been under-explored. For various reasons, there hasn't been a lot of activity in the Yukon. About seven years ago, they changed their government. They became a self-regulating territory rather than a federally-administrated territory. And at that time, the government's made a very clear

20                    decision that they see mining as a strategic industry for them and are very proactively moving forward to promote mining and assist companies to bring things into development and into production. Recently, the share with Coppermine has come into production at Minto and CarMax Copper which is down to the south, it sits in about here, it has just gone through the regulatory

25                    process and they'll be starting construction shortly. What we'd like to be is we'd like to be the third one coming in there. It's not always good to be first. We'd like to learn from the processes that everyone else has gone through, so we're sitting in a very comfortable position. The project itself sits up here in the middle of the Selwyn Basin. Other significant zinc deposits in the area,

30                    we've got Tom and Jason which are SEDEX. Howard’s Pass huge load grade SEDEX, Faro, Grum and Swim. They were zinc operations and placed down in about '89 so infrastructure today is excellent. We also see ourselves as being first movers into that belt, in that particular area, and we think we've got a significant first-mover advantage. We don’t have any competitors

35                    surrounding us. We do have the opportunity to explore beyond our tenements. The legislation up there allows us to pretty much explore anywhere we want as long as we're not having significant impact on the land. The Yukon does have a long running history and it's got a sound and transparent mining law. Stable government, it's supportive of development, so

40                    often risk just isn't there and I think that's a very important component for zinc. Some of the larger producers that are coming into the market are situated in Peru, Ecuador, areas that are going through a pretty substantial rethink I guess is a polite way of putting it on their mining laws.

 

45                    So what have we’ve got out there? We've got 5 million tonnes of grading, around about 11% zinc equivalent, depends on which commodity price used on the day that it was shifted around, but overall, we've got 5 million tonnes grading 7.5% zinc, nearly 2% lead, small silver credits and significant germanium component in there. This resource is still open at depth and is still open on the strike, and this is calculated at a 3% cut-off. So, if we get our metallurgy right and we can move that number down, the resource obviously increases. And metallurgy is absolutely a key, absolutely a key for a zinc mine. Anyone that's been following the zinc market or knows anything about

5                      the zinc market, you know Dugald River, you know the issues that they had at McArthur River, it's all around ground size, energy consumption, can you liberate the zinc? We've got exemptional recoveries. Our test work was done by SGF flight field in Canada and we're getting 98% recoveries for our lead and 96% recoveries for our zinc with a very coarse ground. This is about 125

10                    microns. And the concentrated grades that are being reported, 63% lead concentrate and 58% zinc concentrate, exceptional concentrate grades; high quality and marketable. We don't believe we have any contaminants in there. We've seen nothing that's gonna create a penalty issue for us. It's a straightforward process, we use conventional floatation technology. We don't

15                    have any technology risk associated with it. It's a big plus of us and it's a low CAPEX, low OPEX operation.

 

                        In April, we released a scoping study on our mining results. I sort of tend to agree with Mark's comments on discounted cash flows. They're meaningful at

20                    that particular time, what we were interested in is what was our CAPEX going to be? Could we operate up there with low-capital intensity and operate at a reasonable cost of production. And our results that came back from the study certainly support that theory and that environment. We 're looking at a CAPEX of around about 60 million, operating cost about $79 per tonne of ore

25                    feed to the plant and that factors in all the transport of the concentrate to port. We're looking at a reasonably small operation. We're looking around about 700,000 tonnes per annum going through the plant. The study indicated initial start-up pit looking around about 2.9 million tonnes at nearly 6% zinc and 3.5% lead and that was factoring in dilution and recoveries as well, and

30                    overall, looking at the production of around about 60,000 tonnes of zinc concentrate and 30,000 tonnes of lead concentrate per annum.

 

                        I've included a couple of photos here. This is the Sherwood Copper Minto Mine and this is the plant operation up there. Being Australian operating in

35                    Canada, when I come down and I talk about our project, the question I'm asked regularly is can you operate all year around? Can you operate an open pit? Sure they’re at the same latitude as us. And they operate an open pit and they operate all year around. It is very feasible. It's a Canadian thing. You use Canadian miners. They know what they're doing. They know how to operate

40                    in the environment and it isn't an issue for us to be able to operate all year around. We have been drilling since April this year. We drilled just under a hundred holes this year. We have been putting them at about 25-metre centres inside the pit and beneath the pit and these are some of the results that we’ve released to the market at the moment. This is sort of grades within

45                    the pit that we are getting at the moment and thickness is 27 metres at with 11% zinc and 1% lead; 12 metres at 14% zinc, 8% lead; 17 metres at 14%. It is a thick high-grade ore body that comes to surface. It is a robust operation that we are looking at.

 

                        What has been exciting for us is some of these hits beneath the pit. We are always interested in testing these zones because when we did the modelling work, these were seen as waste and they had a significant impact on how far down you can push that pit. The strip ratio goes up. You can get it out, but

5                      your value for your extra tonnes just is not there so we are either looking at putting it an underground operation to get into the expansion to these areas or looking to see if we can increase some of the knowledge in here and that is basically an impact due to drilling density. Prior to our drilling program this year, we only had 33 holes put into the project so we now got 125 holes in

10                    there, but beneath the pit significance in these areas, 55 metres at 11% zinc with only 4% lead, that significantly changed what we can do with the pit there and what we can do with underground operations. It is a fantastic outcome for us. Elsewhere, 36 metres at 8% and 6% lead. The robust components of this mineralization beneath the pit are standing up fantastically. We see this as a

15                    great opportunity for expansion. We have released results for 48 holes. We still got another 50 and it is probably more like 52 or 53 now that we are still operating out there and we will be continuing to release these results as they come through. Some of the exploration potential in areas that we are testing, this is the Andrew zinc deposit itself. This is a 2-kilometre long soil anomaly

20                    which heads off to the southeast, some sort of thinner as you see around the entry. Some drilling is originally done by Miranda in 2002. They put one single hole and got 5.5 metres at 7.5% zinc; 9.5 metres at 1.5% zinc with some significant lead credits we’ve got in that lower zone and I did not follow it up. That is one of the areas that we are focusing our regional exploration on at

25                    the moment. We are also focusing in this area. We see that as being a major area to look at and this one down here, a long structurally controlled, we see the same sort of rocks at the surface, we are seeing the same breccia zones, we see the same sediments and we will be drill testing in here to evaluate that area as well for potential for expansion. It doesn’t take much if you got an

30                    open pit here for small satellite ore bodies to occur in these areas to then add to your feed to your plant and we would like to see that expanded to a replica of the Andrew, but anything we find there is a positive and has a significant impact on the project.

 

35                    So what we are looking at? We’ve got four rigs on the property. We drilled 98 holes and we’ve got 17,000 metres we drilled this year. We have commenced our environmental baselines. Part of our program is to move through the permitting processes as quickly as we can. We started baselines now. We have all that information available. We can move straight into the permitting

40                    processes in the Yukon. Geotechnical and hydrogeological information is being collected at the moment and we are undertaking additional metallurgical test work. That was all this quarter.

 

                        The quarter coming, we are looking at conversional resources to reserves so

45                    factoring in the information we have collected, we will be redoing that resource, we will be factoring in the geotechnical information looking at a new mining study to look at conversions. We are testing the lateral and vertical extent of the Andrew itself. We are drill testing those advanced projects. We have other prospects in the area that we are looking at as well. We’ve got outcropping mass of sulphides in two areas. We’ve got what are known as (inaudible) (00:16:26) zones and the Andrew has won over the top of it. It is where the sulphides are outcropping and you have vegetation depletion and we have picked up four of five of those throughout the tenement area that we

5                      will be looking at drill testing and we are going to be expanding our regional exploration program as well. We want to be able to turn around in two years’ time and not only have the Andrew, but have anything that could possibly fit the Andrew as well or the biggest goal for us would be to discover (inaudible) (00:16:58) out there. December quarter, continuing our drill program and

10                    moving through our feasibility studies.

 

                        So what are we looking at with the Yukon Base Metal project? We’ve got a high-grade zinc deposit there. It is near surface, it is open-pittable, it is open at depth in the long strike. We’ve got excellent metallurgical properties. We’ve

15                    got a low CAPEX and low OPEX. It is economically robust. We internally think that the zinc price is going to improve. We think its market is going to get better for us. We’ve got access for a year-round deep water port. These are the all-handling facilities at Skagway, that is actually a concentrate shipping loaded with copper concentrate from the Minto Copper Mine. We’ve got a low

20                    sovereign risk and we’ve got a fairly aggressive timeline to production. We are trying to condense as much of the regulatory process as we can. We’re working with the regulators. We are keeping constant contact with them. The Yukon government has actually assigned a project coordinator to the company so it is sponsored by the government. The coordinator then assists

25                    us with ensuring we have all the permitting processes in place and that we are not missing anything. It is a fantastic government to be working with. They are very proactive and we would like to be seeing ourselves coming into the market as a producer like in 2011 and 2012 assuming all things goes well and that’s it.

30

            Q         Thanks Hugh, great presentation. Have you considered your listing, perhaps TSX would be very hungry for your projects.

            OVR    It’s an interesting question and we’re still evaluating our options there. It’s not something that we are considering in the near term. We’ve got a very strong

35                    support here and in Australia and we have been able to tap in some very good support in North America. It’s really about timing if you are going to do something along those lines and we would need to be able to realize our valued component for our existing shareholders through that process before they would consider it.

40

            Q         Perhaps down the line. Thank you.

            OVR    Trucking distance to the port currently is around about 700 kilometres, but there is an alternative route that we are looking at and have commissioned a joint feasibility study with some of the other companies. North American

45                    Tungsten has a tungsten deposit up here that they’re trying to bring into production. Selwyn Resources are trying to bring the Howard’s Pass into production and what we have is the current trucking load to take us both to Carmax and down to what was the Skagway. There is an existing road, the South Canal Road, that runs down here and that will cut our trucking distance to 500 kilometres so it is a significant issue for us and what we are looking at is if it is feasible to upgrade that road. It needs a few of the that bridges upgraded and some of the switch (inaudible) (00:20:22) taken out so we’re working in conjunction with highways of Yukon, (inaudible) (00:20:26) as well

5                      as the Port of Skagway. They’re interested in creating more industries for them through the winter periods so we are pretty closer with something coming out of that.

 

            Q         Hugh, thanks very much. Obviously, you focused on Yukon for fairly good

10                    reasons given the audience, but what are you planning to do with your New Zealand and New South Wales properties?

            OVR    At the moment Bruce, we are very much focused on moving the Andrew through to production. That has been, I guess, our focus for the new term. We do have properties in New South Wales and New Zealand and we are

15                    continuing to undertake small regional programs on those and evaluate them as we move forward, but certainly when you got a project of this scale, you do don’t to be completely diluted. You need to keep focus and particularly at this time of year we want mostly our resources committed to that area.

 

INTERVIEW CONCLUDED

 

 

 

 

Contact brr@brr.com.au for more information

 

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