MARENGO MINING LIMITED
MGO - Resources Rising Stars - Mr Les Emery, Managing Director
Wed, 1 Oct 2008 12:00PM
Select a tab above to display more information
 NORTHERN MINING LIMITED
(NMI)
|
42 Metre Gold Intersection At Blair North Prospect in Kalgoorlie - Mr Alan Lockett, Executive Chairman Wed, 1 Jul 2009 12:30PM |
    |
 MOUNT MAGNET SOUTH NL
(MUM)
|
MUM - Strategic Update Presentation - Matthew Shackleton, Managing Director Wed, 1 Jul 2009 11:00AM |
|
 FLINDERS MINES LIMITED
(FMS)
|
FMS - Iron Ore Activities Report No 27 - Dr Kevin Wills, Managing Director Wed, 1 Jul 2009 10:00AM |
|
MARENGO MINING LIMITED (MGO)
ASX code: MGO
Website: http://www.marengomining.com/
Industry: Materials
Principal Activities:
Mineral exploration and development of the Yandera Copper Project in Papua New Guinea.
Address:
, 9 Havelock Street, Level 2,
WEST PERTH
WA
Phone: (08) 9429 0000
Fax: (08) 9429 0099
Executives & Directors
Mr John Horan , Non Exec. Chairman
Mr Les Emery , Managing Director, CEO
Dr Douglas Dunnet , Non Exec. Director
Mr John Hick , Non Exec. Director
Ms Elizabeth Martin , Non Exec. Director
Sir Rabbie Namaliu , Non Exec. Director
Ms Susanne Sesselmann , Non Exec. Director
Mr John Ribbons , CFO
Mr John Ribbons , Company Secretary
Company Podcasts
Company ASX Announcements
Company ASX announcements can be viewed on the ASX website.
Announcements from the preceding six months are shown below.
Please refer to the relevant stock exchange if any of the above information is incorrect
MARENGO MINING LIMITED (MGO) Events
Australia/NSW
MARENGO MINING LIMITED (MGO)
| Response to ASX Query - Change of Director`s Interest | Fri, 3 Jul 2009 |
| Mailout to Shareholders - Notice of General Meeting 30/07/09 | Thu, 2 Jul 2009 |
| Amended Appendix 3Y - Change of Director`s Interest Notice | Mon, 29 Jun 2009 |
| Change of Director`s Interest Notice (R Namaliu) | Fri, 26 Jun 2009 |
| Investor Presentation - June 2009 | Wed, 24 Jun 2009 |
| Investor Presentation - May 2009 | Thu, 21 May 2009 |
| Unaudited Interim Financial Report to 31 March 2009 - TSX | Mon, 18 May 2009 |
| 31 March 2009 MD and A - TSX | Mon, 18 May 2009 |
| Mailout to Shareholders | Wed, 6 May 2009 |
| Quarterly Cashflow Report - 31 March 2009 | Thu, 30 Apr 2009 |
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 LES EMERY, MANAGING DIRECTOR OF MARENGO MINING LIMITED (MGO)
“Resources Rising Stars”
http://www.brr.com.au/event/51920
WEDNESDAY, OCTOBER 1, 2008, 12:00 PM.
MGO Thanks for an introduction Matt, the 35 years probably being little on the lean side. I should revise up on that. As I go into Queensland in current turbulent
10 times, so what are you doing, I said I’m coming to show the flags so there’s the flag.
Thanks to Nickel’s Read and Read Corporate and thanks to all who’s organizing the conference. It’s times like this one, I think we need to get back
15 to reality and show that there’s real work being done by real people. I did hear today as well Matt, apparently there’s a….as I suppose the difference between the seagull and the stock broker and I was told that seagulls will still put a deposit on a Mercedes.
20 The disclaimer and I’ll question you on that one later.
Our presentation really in four parts. As you can see the general overview of Papua New Guinea, our adopted country, an overview on Marengo, the team, and most importantly. an update on Yandera.
25
Papua New Guinea, our closest neighbour, independent nation and it’s a very stable commonwealth country with a very stable government, Sir Michael Somare was returned to offer us in 2007 for another five years; and it’s a country which is very reliant on resources. Currently, it’s about 60% of
30 its national earnings. Revenue comes from the resource industry with the announced LNG Project, Exxon Mobil which is about $11 billion project that will move up to 75% or 80%, so it cannot afford to do anything to upset a major runner. A very supportive government for projects, it wants to maintain a strong stream of production of metals, particularly copper. The Ok Tedi
35 mines got a wane down plan for the 2013, so it means another copper project to come on stream and the Yandera really is the next cab off the rank in that respect.
When you look at the location of Papua New Guinea, you really can’t get
40 much closer to the Asian markets unless you’re physically there. We’re a few days sailing due north, staying on the Port of Madang. Look north and what do see? You see a hole a heap of Chinese, Korean, Taiwanese, Japanese smelters, and of course, around the corner you’ve got that next meagre economy of India. So, we don’t have to cut out cross the Pacific or round up
45 the Atlantic into Europe.
Corporately, we are a tri-listed company, which is quite a feat. Originally, our birth place on the ASX, we moved into Port Moresby in 2006 and one of the companies listed on the POMSoX and along with our companies like Oil Search, Lihir Gold, and since I was here last year our bigger treatment is we listed on the Toronto Stock Exchange main board. That was the process started around about this time last year and we were successful in listing in April of this year. Pre-listing by way of private placement into Canada and on
5 the listing itself, we’ve raised a total of $20 million as a result of that, and it’s positioning ourselves for the future when we come to the next phase of this project which is the financing of the project. We need some pretty resilient markets. We need some big markets and deep pockets, and it’s fair to say that the Australian market is just not big enough to singly assist us in the
10 equity funding of this project. So we found the process quite challenging but we got there and if we want to look back we’re now listed in the future in Toronto as Canada becomes more familiar with the project. As an example, a similar Canadian company with the similar project to us in South America would have a market cap of around five to ten times the Marengo’s market
15 cap. So really, there’s a lot of upside for us in Canada and that’s why we’re there.
Our current cash at bank is a touch over $20 million as we speak, and that’s a nice, healthy number which will keep us fully funded right through to the end
20 of the DFS. It was suggested in April when we raised that we should raise half of it then and keep and raise the rest when the share price went up. Now I want to give you a written guarantee so, I said, no, we’ll do it in one hit. So we’re not under any stress financially. We’ve got some surplus there and obviously our ongoing strategy is to make sure that we are always ahead of
25 the game on the financial aspects. Shareholder base is very strong. We have 10% of our shareholders in Papua New Guinea and that grows by the day, and almost 50% of our shareholding is institutionally held. Our largest and most supportive shareholders, Sentient Global Fund, a ten-year closed fund has around 24%, and we have a number of other institutional holders as you
30 see there.
The Board, we’ve had some increase in numbers over the last few months and that’s I guess as a result of increasing the company’s profile listing on the TSX, establishing firmer links into Papua, New Guinea and what I now refer
35 to as a development board and this board is quite capable of taking a project like Yandera into production. Of our new appointees, Sir Rabbie Namaliu, former Prime Minister of Papua New Guinea, joined the Board earlier this year. He really is regarded as one of the senior and without insulting him, eldest statesman of Papua New Guinea, a former finance director, Foreign
40 Minister. He’s been everywhere and done everything and his counsel is still very much acknowledged and utilized by the government of Papua, New Guinea. We’ve also added a European director, Susanne Sesselmann who was head of project finance for a large German bank for many years and she’s on a….also a European infrastructure fund, and we’ve added Elizabeth
45 Martin and John Hick out of Canada, so we’ve added again two very capable people to the Board.
In the management team, these are the guys that really run the day-to-day business of the project. We’re also fortunate to have appointed Sam Akoitai, former Mining Minister of Papua, New Guinea. He lost his seat in the election in ’07 and he joined us so he heads our Marengo-PNG Subsidiary Company. Again, he plays a very important part in making sure that we continue to be identified as a Papua, New Guinean Operator and very focused in that
5 country.
I won’t go through the list there. I guess since ’05 we’ve been fully focused on Yandera and continue to be. Right through to April of this year, when we announced the first phase of the Definitive Feasibility Study Complete and
10 that gave us pretty well a roadmap forward through to completion of the study and development. We’re now in phase 2 of that and I’ll talk a bit about that shortly.
Just a quick fly through of the project, a bit of an update, it’s situated in the
15 New Guinea Copper-Gold Belt. On the northern side, it’s the same belt that hosts the projects like Ok Tedi Pilbara, Grasberg on the Indonesian side, so it’s elephant country and very much in the rim of fire. We control a large, attractive land that’s about 1,500 sq km, runs for almost 100 km along the belt. Numerous prospects which haven’t had more on the cursory look at over
20 the last twenty or thirty years. Again, I’ll talk a little more on that as we go through. It’s in the foot hills on the northern side of the highlands, average elevation about 1,600 m, so it’s quite accessible. It’s a classic copper porphyry with molybdenum, gold, silver, and uranium, which is a rare by-product. The area is not that well populated. We have one village nearby
25 called the Yandera, the project named after. It’s about 1,500 people and the village is adjacent to our exploration camp which you can see there, a very well-established camp. We have about 50 people working for us on a full-time basis and they labour anything out to 300 or 400. The village itself long-established, a tidy little unit and we work very well with the local population
30 who are our main source of employees.
The central zones are sitting above the village around about 1,500 m or 1,600 m. As you can see there, some of the drill sites are quite challenging but our guys and gals are very enterprising and we can manage to put rigs anywhere.
35 It’s a classic porphyry containing copper sulphides, various copper sulphides, and we do get some bonanza grades and we get large tracks of a fairly standard grade.
The drilling on the project started back in 1968. By the end of this year, about
40 80,000 m of diamond coal would have been completed of which half is attributable to Marengo. So we’ve moved on from a good base and continue to build on that base.
The open pit mining operation is proposed or have at least two stages.
45 There’ll be a near-mine site treatment plant and initially treating 25 million tonnes a year, and for those who do know Ok Tedi mine is about the same size. It’s a conventional crush/grind copper and molybdenum concentrate floatation. No rocket science. The metallurgy is under way at the moment on the DFS and we see nothing but great positive results coming out of that, so we don’t have impurities, we don’t have any recovery issues, it varies various stock standard. The tailings and concentrate will continue on down the hill for some 20 km to the base of the Ramu Valley heading north towards Madang. There’s an initial tailings down on the valley floor and the second stage we
5 may look at taking that tailings further out to deep sea tailings placement, which is a method of tailings disposal of choice in Papua, New Guinea.
The copper concentrate will continue on its merry way up to the seaport of Madang, which is an established seaport, so we don’t have to build the port.
10 As you can see there, it brings in Handymax vessels quite easily. Moly will be cut out of that because it’s a much smaller bulk. We cut it out by track to Madang. Again, the footprint we have has been 100 km long to northern India, we’re just only in the last few months have taken up some ground there. We have a continuous belt of perspective geology with known
15 mineralisation. To the southeast we have the Kainantu Project which is actually a bulk sales that runs all the way down there. That’s owned by (inaudible) (00:11:37) they bought it from Highlands Pacific in December last year, paid $150 million and that really does put us on the map in terms of why we are where we are. We’re all on this major belt which if it’s in South
20 America, it probably would have ten major copper-gold mine zone.
The Ramu Nickel Project, MCC of China developing at the moment by building bridges, they’re building their plant downhill on the coast of about $200 million to $300 million into a billion dollars spent at the moment and that
25 will come on stream late next year. So we’re in a growing mineral province.
Our resource currently sits at about 660 million tonnes of just under half a percent copper equivalent, just copper and moly. It does contain gold, silver, and the rare metal uranium. They are not included in the current resource.
30 We have announced that a new resource will be released towards or by the end of this calendar year. I’m hopeful that it’ll actually come a little sooner than that or maybe in the next month or two we’ll get that out. It’s a question of continuing to build the global resource but at the same time we’re still working to come up with an initial mining resource for the first ten years of
35 what I think is a 30-year plus operation.
Again, the activities focused on the Central Porphyry, our proposed data pit which would run for an initial three years and then something in the order of seven to ten years beyond that, but as you can see the dark red area is really
40 the mineralised zone as we know it. The green is where we have copper anomalies, so where this goes in the future? Nobody knows. So, inward in that area there we certainly feel a long mine life. Again, the camp, the village, a plant site situated up here so we don’t have to relocate. Our major village relocations minimize the social impacts at the same time give the people at
45 Yandera and some of the surrounding smaller villages a big future.
Our ore zone itself is basically that span together with the hill over on the left hand side. So, in the first few years that pit is a reverse pit. We’re actually taking it down a hill and it’s in about year seven or eight before we actually get the below ground level. That reduces our strip ratio, the first ten years strip ratio is less than 3 to 1. In the first three years it’s much lower and it’s about 0.5 to 1, very accessible country.
5 So DFS, we’ve got a number of high-profile consultants working with us. We completed the study in April on phase 1 and again I won’t go through the detail, you can see that all years of components of the DFS are there. It is scheduled to be complete by June of next year, it will be complete by June of next year. So, if I’m invited to speak at this function next year we will have all
10 the details available.
The outcomes I guess, again, is quite clear, I won’t go through all of those but we initially are targeting a 10-year timeframe and looking at producing out of our resource about 450 million tonnes at a grade of 0.5% copper. That
15 tonnage may vary depending of what sort of cut-off grades we’re looking for and ultimate throughput. Ideally, it seems that 25 million tonnes is a good start up number. That may change as the second stage goes through. We’re looking at….its quality not quantity and it’s not producing…processing tonnes for the sake of it. What we want to do is make the best profit outcome for the
20 company and hence, the shareholders. We have identified, as I mentioned, a number of alternatives and we’ll run several of these studies in parallel, so that the final decision will be made post-DFS. Again, that just shows our infrastructure, the Ramu Nickel Project being close is a benefit to us because of some of its infrastructure and its pipeline easements are already in place
25 and there are some regional benefit or regional initiatives to generate power for both projects.
The timeline, we push this out a few months since last year. Interestingly, you look at the markets and they were once doom and gloom. When you start
30 talking to sag mill or ball mill producers or manufacturers we’re told that the size sag mill that we’re looking up to is a 40-footer which is the biggest in the world about Arkadia Hill. They’re about 2½ to 3 years delivery time from order. There are ways of shortcutting that in buying (inaudible) (00:16:26) and we are looking at placing orders for some long lead items in the not to distant
35 future, but realistically it’s a big project. It doesn’t come on stream overnight. If you want a project that’s going to run for ten to thirty years, that’s the timeframe and that is in today’s development schedule that’s still a short timeframe.
40 Again, in terms of the resource itself we have an overall average growth of about 0.5% but you can see from that both in the molybdenum sample about 500 ppm is considered an average grade from a pure molybdenum mine excluding where there’s no copper. So we have molybdenum mine grades, we also have high grade copper zones at the broad zones, or broad widths,
45 and that really does add value to the bottom line. So our mine planning is to access some of these in the early years to accelerate repayment of debt.
Regionally, that red blob there is about ten times the size of the area that we’re working on at the moment. Probably the red light in the middle is about the size of all of the drillings that going to be undertaken in Yandera. In that whole 100 km belt there’s not one of the drill hole, all of these prospects, these were found by Chemico BHP, these are located by us in recent months. None of these have ever been drilled but you can see we’re not particularly
5 suggesting that these grades are right through these anomalies but when you walk up to one of these targets and you get these sort of outcrops, might be which where there’s smoke there’s fire. So we do some regional work but we’re very focused on bringing the DFS into completion, otherwise, we’ll just run all over the place like a headless chook, I mean, we’ve got to get the mine
10 up and running, but you can see the future which is well and truly laid out.
Very closely related to involve with the local communities, not only in employment but we’re very insistent that we maintain a very strong community relations. Environmental management is critical and again, we’re
15 using some of the world’s best environmental experts to make sure that we don’t go down the path that other operators have done in developing nations.
Local population, a very large part of our employment force. We have a village-out policy and if a local can do the job they get first preference and
20 then we move out from there. We try and avoid expats. We find that the National Alert Forces is much better to work with. Expats want to come home and they comply and just too much trouble. So we’d rather have the local guys and girls. We have eleven national geologists on site and we have two expat geologist, so that gives you an indication of the sort of balance we
25 place on the employment.
There’s only final one was that in terms of valuations, Paradigm Capital produced a report on us out of Toronto after we listed, that was put out in June. They suggested that we had a valuation of around 93 cents and you
30 know I sort of think that they’re on the right track. Groups like that can see the potential of a company like Marengo with a long way to go, we’ve got a big challenge, we’ve got the right people, we’ve got the funds, and we’ve got a support of shareholder base.
35 Thank you.
PRESENTATION CONCLUDED
Contact brr@brr.com.au for more information
DISCLAIMER: Transcripts made available by Boardroomradio.com is a free service whereby the transcripts are created by one or more third party contractors without any involvement or oversight by Boardroomradio.com or the respective company, firm, partnership or individual that is being transcribed. Boardroomradio.com and its contractors, client companies, firms, partnerships and guest speakers (paid or otherwise) do not invite reliance upon, nor accept responsibility for, the information they provide. Boardroomradio.com makes every effort to provide a high quality service. However, neither Boardroomradio.com, its transcript providers, nor the providers of any other written or oral data made available on the Boardoomradio.com site (and its partner sites) give any guarantees, undertakings or warranties concerning the accuracy, completeness or up-to-date nature of the information provided. Users should confirm information from another source if it is of sufficient importance for them to do so. Boardroomradio.com, its directors and employees do not accept any liability for the results of any actions taken or not taken on the basis of information in this site, or for any negligent misstatements, errors or omissions.
