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D'AGUILAR GOLD LIMITED (DGR)

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D'AGUILAR GOLD LIMITED (DGR) Events

Company (Stock Code)	Date/Time	Event	Timezone: Australia/NSW
D'AGUILAR GOLD LIMITED (DGR)	Wed, 17 Sep 2008 04:00PM	DGR - Excellence in Mining & Exploration - Mr Ian Levy, Chief Executive Officer of AusNiCo
D'AGUILAR GOLD LIMITED (DGR)	Thu, 28 Feb 2008 11:30AM	DGR - Resourceful Events Nickel Day - Mr Ian Levy, Chief Executive Officer of AusNiCo
D'AGUILAR GOLD LIMITED (DGR)	Thu, 12 Oct 2006 01:30PM	Excellence in Mining & Exploration Conference DGR - Mr Nick Mather, MD
D'AGUILAR GOLD LIMITED (DGR)	Fri, 28 Nov 2008 01:00PM 12:00PM Australia/Queensland	Annual General Meeting Level 7, Waterfront Place, 1 Eagle Street, Brisbane, QLD
D'AGUILAR GOLD LIMITED (DGR)	Fri, 22 Feb 2008	Interim Results
D'AGUILAR GOLD LIMITED (DGR)	Fri, 30 Nov 2007	Annual General Meeting Level 8, Waterfront Place, 1 Eagle Street Brisbane QLD
D'AGUILAR GOLD LIMITED (DGR)	Thu, 1 Mar 2007	Interim Results
D'AGUILAR GOLD LIMITED (DGR)	Fri, 24 Nov 2006 12:00PM	Annual General Meeting Level 2, Naldam House, 1 Eagle Street Brisbane QLD
D'AGUILAR GOLD LIMITED (DGR)	Thu, 28 Sep 2006	Full Year Results
D'AGUILAR GOLD LIMITED (DGR)	Thu, 16 Mar 2006	Interim Results
D'AGUILAR GOLD LIMITED (DGR)	Mon, 28 Nov 2005 12:00PM 11:00AM Australia/Queensland	Annual General Meeting
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D'AGUILAR GOLD LIMITED (DGR)

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.

IAN LEVY, CHIEF EXECUTIVE OFFICER OF AUSNICO; D’AGUILAR GOLD LIMITED (DGR)

“Excellence in Mining and Exploration Presentation”

http://www.brr.com.au/event/51587

 

WEDNESDAY, SEPTEMBER 17, 2008, 4:00 PM.

 

            DGR    Thank you very much. I had rewritten that introduction to say Ian Levy is talking about AusNiCo to try to keep it brief.

10

                        In these difficult times, investors do move to quality but following the Warren Buffet principle, they also move to simplicity. This company, AusNiCo, and the name stands for Australian Nickel Cobalt, is a very simple proposition and it is basically for investors. This business is to discover nickel which is used

15                    to make stainless steel; so you cannot get much more simple than that. I have the normal safe haven statement that you’ve all seen before.

 

                        In summary, the company is a 90% subsidiary of the D’Aguilar Gold Group which is a company dedicated to creating mineral provinces, not just

20                    individual companies, mineral provinces. We have a large tenement area currently at about 1,800 sq m and it is getting larger and we’ll talk about that. We do have exploration success in nickel. We’ve discovered nickel sulphides. In Queensland, we are the very first to discover nickel sulphides in the economic grades and widths in Queensland. We’re the only the second

25                    to discover economic grade in widths of nickel sulphides in Eastern Australia. So we are very new.

 

                        We’ve also discovered copper gold, which is part of the mineral system and copper silver, all in fresh sulphides should go to considerable depths. We

30                    also have exciting nickel-cobalt system at our place called Mt. Cobalt which was a mine. We are working on growing nickel oxide laterite deposits as well. Finally, one of the key characteristics, we have a granted milling lease nearby, within 2 km of the discovery hole and this means there is a chance we can into production earlier than our peers.

35

                        We have a very strong Board. I won’t go through the list of them other than to say they are all aggressive discoverers and builders of mining companies. We’ve done it before, we’ll do it again.

 

40                    To put you all in context, there’s a very brief history of nickel in Australia and being at a conference where Roy was always present, I apologize for the brevity of it. First of all in about 1964, nickel sulphides were discovered at Kambalda in Western Australia and at the time the world of nickel said that this was a unique freak occurrence. It was a prospect to looking for uranium

45                    and Western Mining went down and felt that it was for nickel and with Roy’s leadership, they discovered nickel sulphides, a unique, new style of nickel orebody.

 

                        By 1980, there were many nickel mines in Western Australia. It became one of the world’s joint nickel provinces. The first mover in that field, Western Mining, WMC, my old employer, it had found many mines. It had taken its first-mover advantage and captured the best ground. Most West Australian

5                      nickel districts have been identified by 1980 and during a slump in the base metal prices, nickel exploration went into the doldrums and it almost stopped completely during the 1980’s. Luckily, some people like myself, I hope, stuck at it and by 1997, Jubilee Mines NL discovered Cosmos, north of Kalgoorlie. It was the first new nickel mine for 20 years.

10

                        In 1998, my old company, Allegiance Mining, discovered the Avebury nickel sulphide in Tasmania and that’s a look alike for what we are currently discovering. But at that time it was called, another of these new unique deposits, and I don’t think it is unique, I think there’s many of them, and I think

15                    we’re going to find quite a few of them.

 

                        In 2007, the nickel industry has been completely re-rated. There’s been massive consolidation and takeovers, Jubilee was taken over for more than $2.2 billion, Allegiance was taken over for $840 million and LionOre was

20                    taken over for something like $2.5 billion. So these are very valuable assets if you can discover them.

 

                        The future, AusNiCo has discovered another Avebury-look alike up in Queensland and it’s at a prospect called Pembroke which you will see on the

25                    later slides. We are taking to this to an IPO and we will probably pick the very bottom of the market. The bell will ring when we list it, this is the bottom of the market. But it’s a good time to get in; don’t’ by at the top of the market, but at the bottom. Over the next two years, AusNiCo has used its first mover advantage and it hopes to discover several of these deposits. They are bulk-

30                    scaled, Avebury-style orebodies. We think they have widespread but we do know that they’re extremely hard to find.

 

                        Just having a look at Allegiance Mining….this was the track record. This is the share price of Allegiance mining. I was the CEO of it during the period of

35                    this graph starting when the shares were around about 10 or 12 cents and eventually that was sold out to Zinifex for a $1.10, and these assets if we were to discover them can produce a very good track record for investors.

 

                        Quickly summarizing the difference between the Western Australian deposits,

40                    typical deposits to Western Australia and these new ones that we’re hoping to find, the new ones are on the left, they’re the bulk sized. They’re very large. We’re looking for 5 to 20 million tonnes orebodies. They’re low grade compared to Western Australia. They are very wide, they are 40 m wide. Compare that with Western Australia, they’re smaller deposits. They are

45                    high grade. They have to be high grade to cover their additional costs and then very narrow, and in places, they’re quite dangerous to mine. The ground stability in the newer geology of Eastern Australia is strong and good, but it is ideally suited to open pit mining. I’ll leave you to read the other details on our website.

                        Looking at our location, we’re pretty well located. We’re north of Brisbane in Southeast Queensland. We’re far enough away from the Sunshine Coast to be invisible to the tourist. We’re in a mining province, we’re in a mining district that’s being mined for 150 years. We first made our discoveries on

5                      the southern tenements that I’ve put a circle around there. Once we’d made those discoveries, we said, where else? We copied Western Mining. We said, where else could this type of mineralisation occur? We immediately followed the ultramafic system which is the nickel host rock to the north. Since this slide was made, we’ve actually extended the tenements by about

10                    another 35% beyond that. We are pegging ground. We’re keeping it as a secret as possible. We do want to genuinely capture first-mover advantage.

 

                        Zooming in on that southern area that I have circled, the green rocks are the good rocks. There they are the greenstone rocks that are typical hosts of

15                    nickel. When we went there, we had some data from the 1970s and we now call it the myth busting project that we got involved in. There were several myths sitting there. The Mt. Cobalt mine was considered to be some cobalt-manganese wad and it was mined during the war. Ridleys was a discovery at Blacksnake which was thought to be unusual laterite. It had a bit of base

20                    metal with it, but it was thought to be nickel laterite. The greenstones themselves were completely ignored. When we went into explore, we found that the host rocks, the greenstones, had been hydrothermally altered. They were hydrothermal silica breaches. We found “gossans,” gossans that must have been after sulphides. We knew that the old interpretation was wrong.

25                    We then sampled at the surface and we found nickel sulphides, This pentlandite, the main nickel mineral and magnetite in gray. We found them at the surface in the greenstones in the serpentinites. We’ve been able to find nickel sulphides in scattered locations over a 20 km zone in the northern part of that map and I’ve circled for your attention where we’re doing most of our

30                    work. To date, we’ve only explored 5% of this known nickel province.

 

                        In the recent drilling, we’ve discovered several intercepts. We’ve discovered a copper-gold system sitting on top of the nickel. It’s got 20 m at about 0.50% copper and about 1.5 g gold. We then hit the nickel sulphide system total

35                    width of 50 m of drilling and it averaged about 0.34% nickel, all of which is in nickel sulphide. That’s low grade but it is wide and it’s probably an open pit. The nickel sulphide itself had a core zone of 4 m going 1.1% nickel and that’s higher grade than the Avebury mine currently in production in Tasmania, and we’re talking about an open pit here. We also hit a copper-silver system,

40                    very heavy in sulphides at the end of our nickel system and it’s got 14 m at 1.2% copper and 3 ounces to the tonne of silver. It’s such quite exciting series of discoveries, some of them very encouraging.

 

                        Zooming in on the geology, this is a very complicated diagram but again the

45                    dark green is where the nickel will occur and it does occur. We have a total of six prospects in that area which is around about 7 km x 7 km. We’ve got nickel discoveries right in the middle above the Shamrock Mill, which we’ll talk about in the moment is the Pembroke nickel sulphide discovery. This is the Mt. Cobalt, nickel-cobalt system that we’ll talk about. Ridleys, where the story all began, and down here we have new unexplored nickel provinces that don’t have a drillhole in them. I won’t go into the details of this air photo other than to show that all of the bright lines that are on that photo are were the soils are anomalous in base metals including nickel and that’s where you naturally

5                      would look first. It also shows that the area is sparsely populated. There’s no hardly anybody lives up there and it is not heavily farmed, so it is an ideal location for open pit mining. The other features you should look at is in the bottom of that photo is the Millsite. That’s a granted milling lease and if we were to be successful in getting an open pit, we can get this into production

10                    faster than any of our peers, because that mining lease for the mill is already granted down here. That’s a total distance of 2 km from the discovery hole there. So, we have an exciting opportunity.

 

                        No presentation would be complete in the nickel story without a psychedelic

15                    magnetic image…that’s what this is. The bright reds and purples are highly magnetic ultramafic rocks and sure enough, if you look at it, all of these large masses, that’s 1 km down there, these masses which are kilometres across, all of them are associated with elevated nickel values, and so we’ve very encouraged by that. We have a lot of work ahead of us. I’ll just show where

20                    the discovery hole is, it’s right in the centre. The Pembroke nickel discovery and this is the Shamrock Mill Site where one day, I hope that we can process the ore through it.

 

                        Our geological model for the geologists amongst us that dwell on it …

25                    basically it is granite that is intruded into an ultramafic intrusive and they’ve cooked each other up and nickel has concentrated as opposed consequence from the granite, we also get the copper-silver. I said we’re trying to gather all of the first-mover advantage. This is the basis on which we peg the northern leases. This magnetic image here, we grab that as quickly as we could and

30                    we’ve gone further to the north grabbing tenements as quickly as we could. Whilst the industry wasn’t watching, we have try to grab whatever we can.

 

                        Every major nickel orebody in the world has a major crust hole structure running nearby. Australia’s largest lineament, you can see on any map of

35                    Australia, it’s a lineament that runs from Fraser Island up in Queensland through a little deposit called Broken Hill and comes out down in South Australia….it’s the Darling Lineament, and sure enough we’ve got that lineament right near our system and we’re very encouraged by that. We believe that it may well have offset the ultramafics and that this northern

40                    province may be a continuation of our existing nickel province down to the south. But we now own it, we own it 100%, it’s all incumbent and where a very simple proposition. We are trying to do what Western Mining did capture the first-mover advantage.

 

45                    Talking about some complications, the overburden to some of these deposits is nickel oxide and it’s not too bad a nickel oxide. It does upgrade very simply. It’s massively thick. We’ve modelled the Magnetics and this hot zone down here, to the bottom left of this drilling, is where we think there could be magnetic sulphide target. Sitting up here on the top is a hugely thick nickel oxide occurrence with grades typically 0.50% to 0.75% nickel. Thank you.

 

                        That’s for the specialists to show where this next cross section comes from. I

5                      won’t dwell on it. This is a cross section through the orebody. This is where we think the Magnetic target lies and we’re very keen to drill here. As you can see we’ve got topography that doesn’t exist in Western Australia. These are very steep mountains, and we’ve got up to a 115 m of this nickel oxide laterite material sitting on top of the systems. That’s a photo of it. Again, it

10                    has excellent metallurgy for leaching. There’s nickel oxide material and we don’t know how much we got of it other than we’ve probably got millions and millions of tonnes of it, and we will evaluate that in due course. It’s very cheap to evaluate.

 

15                    We’ve been working very aggressively on the exploration activities and pegging ground and we’re now ready to take this to market. To sum up on the nickel industry, one of the key features of the nickel metal as a commodity is that historically, it’s being one of the very first metals to move in price. The price of nickel has often moved ahead of the other metals. So if you believe,

20                    as I do, that this is a temporary downturn in commodity markets, nickel may well be one of the very first to show some strength and if you were trying to expose yourself a new metal, I could not recommend nickel more highly. This is a graph of nickel prices. Back to June 2002, the nickel is in blue, copper is in copper colored, gold is in gold, and zinc is in green, and you can see here

25                    that when the Chinese revolution was starting to take place in the base metal markets, nickel was the first to jump up in price. So I’m fairly bullish about 2009 for other reasons including that one and I’m hoping that we list at the very bottom of the market. There’s no point bringing my shareholders in at the top of the market when you can only go down. It’s nice that we will go up

30                    together hopefully. That’s the game plan.

                       

                        One of the reasons why nickel is the ideal industrial growth metal is because of this map, and I will take 20 seconds to explain what are these. On the left-hand side, it’s a measure of the consumption of stainless steel which is the

35                    main market for nickel, per capita, per person in economy, and along the horizontal axis is the gross domestic product measured in US thousands per capita, per person. So, this is wealth an industrial development along this line, and this is basically how much nickel each person consumes. Have a look at where Taiwan is, extreme high consumers of this beautiful metal

40                    stainless steel, so is the Italy, Germany, South Korea, and all of the heavily industrialised countries are all that way. Look where China is and look where India is, they’re sitting right down very low consumption per person of stainless steel, but their GDP is set to grow. So hopefully, this trend will continue over the next 10 to 20 years, I believe it will, where China will move

45                    more towards where Taiwan is today and it will become the powerhouse of nickel. So exposure to exploration right now will become exposure to ongoing industrial growth in China and India.

 

                        Thank you very much.

INTERVIEW CONCLUDED

 

 

 

 

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