EXTRACT RESOURCES LTD Audio Webcast

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EXTRACT RESOURCES LTD (EXT)

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EXTRACT RESOURCES LTD (EXT) Events

Company (Stock Code)	Date/Time	Event	Timezone: Australia/NSW
EXTRACT RESOURCES LTD (EXT)	Wed, 27 May 2009 01:45PM	EXT - AMEC 2009 National Mining Congress - Richard Henning, Business Development Manager
EXTRACT RESOURCES LTD (EXT) Company Presentation	Wed, 18 Mar 2009 01:30PM	EXT - Paydirt Uranium Conference Presentation - Mr Peter McIntyre, MD
EXTRACT RESOURCES LTD (EXT)	Tue, 27 Jan 2009 12:15PM	EXT - Rossing South Zone 1 Initial Resource Estimate - Mr Peter McIntyre, MD
EXTRACT RESOURCES LTD (EXT)	Wed, 15 Oct 2008 10:30AM	Extract's Projects and Discoveries
EXTRACT RESOURCES LTD (EXT) Proposed Merger with Kalahari	Fri, 26 Sep 2008 10:30AM	EXT - Restructure and Merger Proposal - Mr Peter McIntyre, MD
EXTRACT RESOURCES LTD (EXT)	Thu, 20 Mar 2008 01:30PM	EXT - Paydirt's 2008 Uranium Conference - Mr Peter McIntyre, MD
EXTRACT RESOURCES LTD (EXT)	Thu, 7 Dec 2006 11:00AM	EXT - Uranium Exploration Update - Mr Peter McIntyre, MD
EXTRACT RESOURCES LTD (EXT)	Wed, 4 Mar 2009 11:00PM	Interim Results
EXTRACT RESOURCES LTD (EXT)	Wed, 5 Nov 2008 12:00PM 02:00AM Australia/WA	Annual General Meeting Esplenade River Suites Functions Rooms, 112 Melville Parade, Como, WA
EXTRACT RESOURCES LTD (EXT)	Fri, 2 Nov 2007 09:00AM	Annual General Meeting 112 Melville Parade Como WA
EXTRACT RESOURCES LTD (EXT)	Wed, 14 Mar 2007 11:00PM	Interim Results
EXTRACT RESOURCES LTD (EXT)	Wed, 29 Nov 2006 09:00AM	Annual General Meeting Broadwater Pagoda Resort Hotel, 112 Melville Parade Como WA
EXTRACT RESOURCES LTD (EXT)	Mon, 2 Oct 2006	Full Year Results
EXTRACT RESOURCES LTD (EXT)	Thu, 16 Mar 2006 11:00PM	Interim Results
EXTRACT RESOURCES LTD (EXT)	Tue, 29 Nov 2005 01:00PM 03:00AM Australia/WA	Annual General Meeting
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EXTRACT RESOURCES LTD (EXT)

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PRESENTATION BY PETER MCINTYRE, MANAGING DIRECTOR OF EXTRACT RESOURCES LTD (EXT)

“Extract’s Projects and Discoveries”

http://www.brr.com.au/event/52307

 

WEDNESDAY, OCTOBER 15, 2008, 11:30 AM.

 

            BRR    Good morning and welcome to Boardroom Radio’s Uranium eConference. Joining us today is Peter McIntyre, Managing Director at Extract Resources.

10                    Today Peter will be presenting on the uranium mining activities and future prospects at Extract.

 

            EXT     My name is Peter McIntyre, Managing Director of Extract Resources, and thank you for the opportunity to give you a brief update on the company in

15                    what I know is actually interesting financial times.

 

                        Extract Resources is a uranium company. It’s listed here on the ASX. Although we are going through a corporate transaction at the moment with one of our major shareholders, I’ll talk briefly about that later on. But first off,

20                    to tell you a little bit about the company, we are based entirely in Namibia, as I say, focused at this stage entirely on uranium. We have nearly 3,000 square kilometres of project area. The main project is an area down towards the south that we referred to as the Husab Project and indeed the rest of the presentation will be primarily focused upon the Husab Project. The company

25                    is currently feeling all cashed up, which is once again a very good position to be in in the challenging times that we currently have.

 

                        Moving on, the main project area is really going to refer to is in the -- was called the Husab Project. There’s a fair bit of activity around where we

30                    operate. It’s dominated by the Rossing Mine, which is 69% owned by Rio Tinto. Once again that’s quite significant because Rio Tinto recently became a fairly significant shareholder in Extract Resources. And as we go into the presentation, you’ll understand where that synergy has come about, but the fair bit of other activity in the area. We are in what these referred to as the

35                    primary alaskite uranium belt in Namibia, as I mentioned dominated by the Rossing Mine, which has been going for about 30 years or so.

 

                        Now Husab area in itself around 630 square kilometres. Now a lot of it is actually around sand cover, so we don’t have the benefit of radiometrics,

40                    which is also significant in respect to recent discovery that we made here in Rossing South. Up until, I guess, the last 18 months or so, we’ve been focusing upon the Ida Dome, which is an outcropping system down towards the south of our project area. It’s also an area that was drilled out back in the 70s by Anglo-American, so we had the benefit of previous work. Since we

45                    discovered Rossing South and announced that discovery earlier this year, a large part of our focus is now turned towards the system.

 

                        Okay, moving along, this next slide just shows a bit more detail about the Ida Dome and look -- I’ll quickly go through that, but the image on the right is essentially the radiometric survey that was conducted sometime ago. It indicates quite a large outcropping uranium system that strikes on the west for about 5 kilometres and on the east side for about 4.5 kilometres. Now most of our drilling over the last 12 months, 18 months or so is made towards

5                      the southern end of that system, primarily in what we referred to as the Garnett Valley and in recent times we’ve moved the drilling off to the southeast in the area known as (inaudible) (0:03:14) stone.

 

                        The next slide shows some of the sections that had been generated on the

10                    Garnett Valley. We’re not going into too much detail on that because once again the focus had shifted towards the Rossing South area, which is shaping up as being far larger than the Ida Dome area.

 

                        Nonetheless, we did put out a maiden resource on Ida Dome and that was

15                    centred around the Garnett Valley area. Now that was fairly significant step or stage for the company. It’s to start resource, came up at around 25 million pounds of U308, which we’ll continue to grow for the Ida Dome after we completed our drilling and then received the balance of resource from that drilling.

20

                        Next slide just shows you part of the area where we’re operating in, in the Namib Desert in Namibia. It shows you our camp, some of the drilling activities.

 

25                    Now the next slide is a Google image looking down on our project area. Now this shows a fairly significant sand embankment, which comes down from the northeast and covers a large part of the area. Now that sand is significant in respect to our discovery at Rossing South. And it’s because of that sand -- and you’ll note Rossing South just at the northern end of our project, but it’s

30                    because of that sand that there’s been no exploration under that ever and we were first ones to look beneath the sand, to try and pick up the uranium alaskites.

 

                        When you look at the next slide, it shows a magnetic image, which is

35                    effectively thick enough at some geological features underneath the sand and there’s a very dominant feature that strikes up from south up to north. It’s our northern boundary that swings to the west and then swings to the northeast again. Now that stratigraphy, which hosts the Rossing Mine just a little bit further to the north, so we identified that is a 15-kilometre long target on our

40                    ground of potentially the same stratigraphy that hosts the Rossing Mine.

 

                        Now briefly about the Rossing Mine, the next slide, you can see some of our drilling activity relevant to where the Rossing Mine compete as exist. The Rossing operation has been going for 32 years. It’s produced around 240

45                    million pounds of uranium in that time. As mentioned earlier, Rio Tinto had about 69 -- they have 69% of the Rossing joint venture. It’s largely produced 7% to 8% of the world uranium production. So it is a world-class operation and their activity drilling just to the south of that you can see, once again, just coming off at the edge of the sand that I referred to, only going deeper into the sand as we go south, from the northern end, there’s only about 6 kilometres from the Rossing itself.

 

                        The next few slides, we’d just go through some of the sections that were

5                      being generated on Rossing South. And you’ll note that firstly on all of the sections, that there is a sand cover that sits about the bedrock and it’s a bedrock where the uranium alaskites exist. So it is moving from north to south on some of those sections, quite wide sections.

 

10                    This next line, we refer to chemical assay results, was in fact our discovery line. Now we talked about the system as being out there and about 150 metres wide at -- in this particular case is 474 parts per million, but on average the bulk tonnage grade is a little bit high than 300 parts per million, which is very similar to the bulk tonnage grade that they mine at the Rossing

15                    (inaudible) (0:07:00) to the south. We are still on what we call Zone 1. We go through a fairly large area there where we haven’t yet (0:07:07) tested and that’s still very much alive, but we moved down to Zone 3.

 

                        The structure has turned over from Zone 1 where it was dipping at about 40

20                    degrees to the east to what appears to be a flat line part. This particular section is quite a massive amount of ore. First of all, you’ll note that the sand cover has in fact deepened in this particular section and the further south are going to the sands, we expect that. But sitting beneath that sand in this particular case there’s a section that’s approximately 600 metres across and

25                    about -- up to 200 metres thick in the middle (inaudible) a very good grade, so these are shaping up as being a very, very large system.

 

                        As we move further down on the next section, move it further to the south, you see that that also continues, once again, very wide sections, quite flat line

30                    sand cover, thickening again.

 

                        The next section again, to the south, the further -- the southernmost section that we drilled today once again, is representing a very large system of ore.

 

35                    From north to south, on Rossing South, we’ve tested so far about 6.5 kilometres, based upon the magnetic image that we referred to earlier, one of the earlier slides, the system is in fact about 15 kilometres that we have to test. So at this stage, we’ve tested about 6 kilometres, and still about 9 kilometres to the south that we have to complete. Now, what was that is on

40                    Zone 1, we’re starting to close down the drill spacing from 400-metre wide traverses, which still exists on Zone 2 and we are closing it down to Zone 1. We should complete the Zone 1 closing of 400 metres by the end of October and then we’ll move the drilling rigs immediately onto Zone 2 and also undergo the same exercise. That will enable us on both Zone 1 and Zone 2 to

45                    generate an inferred resource as (inaudible) (0:09:09) move the spacing, in some cases, we’ll close the spacing down even further to come up with an indicated resource in due course.

 

                        Now, the next slide, once again, breaks up Zone 1 and 2, and it pretty much summarizes between Zone 1 and 2 the key results that we’ve had to date. And repeating myself, Zone 1 you’ll see at the closing the drilling down now to 100 metres. There are still some gaps in that which we will complete by the

5                      end of October. Zone 2 is still at 400-metre spacing but next month in November we should commence the 100-metre spacings on Zone 3 as well. But at this stage, the continuity looks very good on both zones, but still we have to confirm that with the closest space drilling that we’re currently undergoing. Zone 1, we should have third resource out on Zone 1 in the first

10                    quarter of 2009. Zone 2, third resource should follow in the second quarter in 2009.

 

                        The next image is a three dimensional image based upon the modelling that we’ve done to date. Once again, we refer to both Zones 1 and 2 and point out

15                    significant untested area between the two zones that aren’t part of our target at the moment but will no doubt become a part of the target once we have sufficient information, drilling information in particular to incorporate. But we did establish based upon the work that we’ve completed to date. About three months ago, we establish a target for Rossing South. And it is an exploration

20                    target, so it’s not a job-compliant resource but we established a target of between 128 million pounds and 198 million pounds between the two zones. And once again that is simply represented by the drilling that we’ve done to date. That doesn’t incorporate the ground in between because we don’t have sufficient information and it doesn’t incorporate the 9 kilometres of sales

25                    target zone that we have south of Zone 3.

 

                        So just in summary and I’ll touch upon some of those points, we should have a maiden resource set on Rossing South by January ’09 and that will be distinctly on Zone 1, which we’ll be drilling Zone 2. We believe that that would

30                    give us sufficient confidence to move into a fairly detailed feasibility study on Rossing South commencing in February ’09. Now that will commence while we’re still completing the resource definition in Zone 2 and indeed once we completed on Zone 2, I got no doubt we’ll be drilling it much longer. There’s still a lot more ground to be tested on that whole 15-kilometre Rossing South

35                    target. And we shouldn’t lose sight of Ida Dome going to the south. We have a maiden resource down there. We had planned a 60,000-metre program on Ida Dome. We’re about 40,000 metres into it. So it is our intention to complete that program, targeting around 40 million pounds that we established some time ago and we are well on the way to achieve that.

40

                        A bit of information on Extract corporate, although that’s changing at the moment but we have cash and sources of cash at around $30 million at the moment. We have a dominant shareholder in Kalahari Uranium and more recently we had Rio Tinto acquire shares in the company and they have

45                    taken quite a dominant position.

 

                        The share prices of Extract Resources over the last 12 months is perhaps a little bit out of date given the last 1 to 2 weeks, but notwithstanding that, we have held up reasonably well over that period. And there’s been a few incidences obviously throughout that 12 months, which has put a lot of pressure on the market. But unfortunately I think we think that we were very fortunate to make the Rossing South discovery, which is shaping up as being world class. So that certainly assisted the company over that period of time.

5

                        Now recently the company announced a merger with Kalahari Minerals. If you recall, Kalahari Minerals is in fact the parent company of Kalahari Uranium that has a 39% shareholding at Extract Resources today. Kalahari is listed on the main board of the London Stock Exchange and we’re working at a ratio in

10                    Kalahari will be issuing 1.6 shares for every 1 Extract share. Extract will effectively become listed on both the ASX and the TSX, but Kalahari Minerals will then dual-list with their AIM listing on the ASX and (inaudible) (0:14:08) shortly thereafter. Cash of both companies currently amounts to around $40 million post-transaction because there’s 2-3 months we have to

15                    go through (inaudible) (0:14:18) still expect to be in a very healthy cash position.

 

                        The next slide just shows a bit of a summary of how the two companies will come together under MergeCo, the numbers of shares that will be on issue.

20                    The share prices as we say have obviously changed in the events of recent weeks, but nonetheless the ratio is still very much valid. The overall market capitalization of the merged company does increase slightly and that’s because of both the base metal assets and the cash position of Kalahari that will now come together with Extract’s 100% interest in the uranium projects.

25

                        The main rationale for Extract and Kalahari together on this part was the fact that the 39% shareholding in Extract Resources do create a fair bit of uncertainty in respect to the management and control of the company. And it does represent, you know, fairly significant blocking stake in Extract

30                    Resources. So we see that this will create a lot more liquidity within the stock and give it far better focus and direction with respect to the management of the company going forward. The focus of the group will remain very firmly on the Husab project and in particular the Rossing South project, and I guess we are very much focused upon bringing Rossing Southeast production in the

35                    shortest possible time frame.

 

                        The next slide shows a combination of the two companies in respect to the board of directors going forward, this representation of both Kalahari Minerals and Extract Resources within the board of the merged companies.

40

                        Next slide then shows the effect of the consolidation and the fact that 39% shareholding comes out of Extract and it’s replaced by a substantial shareholding in Rio Tinto. Now, Rio Tinto’s investment in Extract Resources is quite significant for the company, I believe. There’s no better endorsement

45                    in Rio’s involvement within the company. They also acquired shares in Kalahari Minerals at the same time when they acquired their stake in Extract Resources.

 

                        I guess the significance for us apart from the endorsement from Rio in the project is the opportunities that I’m very keen to explore now with the existence of Rio in respect to the Rossing joint venture, the Rossing project (inaudible) (0:17:11), I believe there will be major benefits made through

5                      synergies of both operations, both Rossing and also Extract’s Rossing South projects, in respect to a number of issues, with all the infrastructure-based issues that I believe are going to fast-track -- will enable us to fast-track Rossing South development. And on that basis, I thank you once again for the opportunity to present. Thanks for listening in.

10

            BRR    Peter McIntyre, thank you for sharing the insights about your company. Listeners, that was Peter McIntyre, Managing Director at Extract Resources, presenting as part of Boardroom Radio’s Uranium eConference. Thanks for listening.

 

PRESENTATION CONCLUDED

 

 

 

 

Contact brr@brr.com.au for more information

 

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