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AVZ - A Namibian ExplorerIron, Base Metals and REE
ASX:AVZ
April 2011
Forward looking statements This presentation may contain certain forward looking statements
and projections regarding:
estimated, resources and reserves;
planned production and operating costs profiles;
planned capital requirements; and
planned strategies and corporate objectives.
Such forward looking statements/projections are estimates for
discussion purposes only and should not be relied upon. They are
not guarantees of future performance and involve known and
unknown risks, uncertainties and other factors many of which are
beyond the control of Avonlea Minerals Limited. The forward
looking statements/projections are inherently uncertain and may
therefore differ materially from results ultimately achieved.
Avonlea Minerals Limited does not make any representations and
provides no warranties concerning the accuracy of the projections,
and disclaims any obligation to update or revise any forward
looking statements/projects based on new information, future
events or otherwise except to the extent required by applicable
laws.
The information in this report that relates to Exploration Results is
based upon information compiled by Mr Alex Aitken a member of
The Australian Institute of Geoscientists. Mr Alex Aitken is a full
time employee of the company. Mr Aitken has sufficient
experience which is relevant to the style of mineralisation and type
of deposit under consideration and to the activity which he is
undertaking to qualify as a Competent Persons as defined in the
2004 edition of the „Australasian Code for the Reporting of
Exploration Results, Mineral Resources and Ore Reserves‟. Mr
Aitken has consented to the inclusion in the report of the matters
based on his information in the form and context in which it
appears.
Disclaimer
* Excludes Director/Vendor options 15-45 cents
Shares on Issue ~ 83.4m*
Share Price ~ 16 cents (7c – 32c)
Market Capitalisation ~ A$13m
Cash at Bank ~ A$2.75 (Dec 2010)
Enterprise Value ~ A$10m
Capital Structure and Board (ASX:AVZ)
Roger SteinepreisChairman Non-Executive
- Corporate lawyer with over 20 years experience
- Legal advisor to a number of public companies
Steve ParsonsDirector (Alternate)
- 13+ years of corporate & technical experience
- Founder & Managing Director, Gryphon Minerals Ltd
- Gold in Burkina Faso, West Africa
- Geologist/technical
Andrew GastevichDirector Non-Executive
- Chartered Accountant
- ASX listed company experience
David RiekieManaging Director
- 25+ years corporate experience
- Experienced in capital raising initiatives (public & private)
- Non executive board experience (resource & industrial)
- African Experience
Hamish HallidayDirector Non-Executive
- 13+ years corporate & technical experience
- Founder & former MD, Adamus Resources Ltd (next
major gold mine in Ghana (1.7Moz))
- Currently MD of Venture Minerals (ASX:VMS) (magnetite,
tin, tungsten project in Tasmania, Australia)
- Geologist/technical
Brett DunnachieCompany Secretary
- Chartered Accountant with B. Com-Degree
- ASX listed company experience
- Company Secretary
Shareholder Profile
Top 40
Management
Other
Corporate Structure
Rare earthsRare metalsVanadium(Iron Ore)
Iron OreBase metals
Precious metals
(4,421 sq kms)Granted - 4,341sq kms
(6 Granted/1 pending EPL)
(1,725 sq kms)Granted - 1039 sq kms
(2 Granted ,3 Pending EPL’s)
(3,361 sq kms)(5 Pending EPL’s)
Tumba Base Metals X (Proprietary) LtdHimba Iron Exploration (Proprietary) Ltd
95% ownership (AVZ)/ 5% local
A Namibia Focus
Destination of choice for mineral exploration and mine development
A Country that commands numerous “X factors”; including infrastructure,
logistics, low operating and title risk benefits, small local population
Geography very similar to North Western Australia including ease of access and
movement
Magnetite Iron potential confirmed (over wide area)
Demonstrated successful, initial low cost exploration outcomes on granted
licenses
Consistent and ongoing exploration activity coupled with local engagement
Large scale Magnetite Iron Resource/Targets
- Ondjou (521Mt inferred Resource (plus 1.0 to 1.5 Bt exploration target*)
- Hammerhead / Thresher (1.0 to 1.9 Bt exploration target*)
Ongoing target generation and significant Fe exploration upside on licence areas
Continuing activity for Base metals and REE*This exploration target mineralisation tonnage and grade is conceptual in nature as there has been insufficient exploration completed to define a Mineral Resource
in accordance with the JORC Code (2004), and it is uncertain if further exploration will result in the determination of a Mineral Resource
Avonlea Minerals - Some Distinguishing Features
Namibia has mineral wealth
Diamonds, Uranium, Base metals
...... but still remains largely underexplored
Namibia has an effective mining and exploration framework
100 + years and “Tier 1” projects
A mining “culture“ and
Australian styled Mining Act (1992)
Ranked # 3 African country of choice and low critical risk/performance criteria*
Developed logistics and infrastructure
Deep water ports (and a new facility in blueprint for Cape Fria/Angra Fria)
Good roads and rail (and expanding across Northern / Central Namibia)
Hydro power operating (and expanding with Baynes Hydro Project)
Telecommunications system providing 93% coverage
..... Namibia is largely underexplored and Avonlea is well placed with its substantial
exploration ground holdings
Namibia - Some compelling Country Facts
Etango Project 160MlbsU3O8
Inferred & Indicated Resource
Tubas/87.8Mlbs U3O8
Inferred & Indicated Resource
Langer Heinrich/164Mlbs U3O8
All Resource Categories
Rössing South 367MlbsU3O8
Inferred Resource
Rossing Uranium/4150t U3O8
Inferred & Indicated Resource
Trekkopje
560MtlbsU3O8 Inferred Resource
Rosh Pinah 95ktpa Zn conc
Mining & Exploration Activity...not just Uranium
Ongaba Fe Deposit
Tsumeb Deposit
World Renowned 1.7Mt Cu2.8Mt Pb
0.9MtZn
Navachab Gold
Annual production 70,000ozs Au
Skorpian Mine
150,000t high grade Zn per year
Uis Sn Deposit
JORC compliant inferred resource of 521 Million tonnes at 24% Fe (Ondjou)
Inferred Resource estimate on 35% of 10km strike length within licence area
Additional 1 -1.5 billion tonne Fe exploration target range* at Ondjou
Extensional resource definition, diamond core drilling Ondjou; recommenced Q1 2011
Delineated a sizable initial Exploration Targets *
Lower grade (20 to 30 %Fe) - Hammerhead ~ 1.6 Bt+ (mid point)
Higher grade 30%+Fe - Thresher ~ 150 Mt+ (mid point)
Mapping before re-drilling
- Focus!
….. a Combined Exploration Target range~ 3 Bt at Ondjou, Hammerhead, Thresher
This target mineralisation tonnage and grade is conceptual in nature as there has been insufficient exploration completed to
define Mineral Resource in accordance with the JORC Code (2004), and it is uncertain if further exploration will result in the determination
of a Mineral Resource.
Current Magnetite Fe Resource/ Exploration Target ranges
….and further upside potential being drilled
Ondjou
Hammerhead / Thresher
Ondjou
(39 km2)
Hammerhead & Thresher
(1,000km2)
Iron Rich Chuos Formation
(115km strike on EPL‟s)
Our Current Regional Magnetite OpportunitiesThresher, Hammerhead and Ondjou Prospects
31.5km of surface channel sampling / 1,000m diamond core drilling (6 holes)
Broad zones Fe rich magnetite encountered in all diamond drill holes (5 - 50m width)
High grade units at Thresher West showing upper & lower horizons
Delineated a sizable initial Exploration Target *
Lower grade (20 to 30 %Fe) - Hammerhead ~ 1.6 Bt+ (mid point)
Higher grade 30%+Fe - Thresher ~ 150 Mt+ (mid point)
……and the large Bronzy Prospect has not yet been include in these calculations
Fe mineralisation remains open along strike and at depth
Fe mineralisation hosted within massive strata bound magnetite unit within chlorate schist
Aeromagnetic imaging confirms high grade potential
Additional mapping
for high grade target definition
In summary our historical results are the upper end of industry benchmarks:
Scale of exploration target
Grade (up to 30+% Magnetite Fe)
Positive Davis Tube Recovery (up to 61%)
Concentrates (up to 70% Fe)……. (impurities below 5%)* This exploration target mineralisation tonnage and grade is conceptual in nature as there has been insufficient exploration completed to define a Mineral
Resource in accordance with the JORC Code (2004), and it is uncertain if further exploration will result in the determination of a Mineral Resource
Thresher & Hammerhead ProspectsHistorical Exploration Outcomes
Thresher & Hammerhead ProspectsTWDD
D From D To Interval Fe % SiO2% Al2O3% Total S % P2O5% LOI% DTR Wt%
TWDD001 26 38 12 31.43 51.99 3.94 0.00 0.23 3.84 Head assays
69.30 2.83 0.25 0.05 -3.00 38.65 DTC (75UM)
TWDD001 38 56 18 32.76 40.84 3.75 0.05 0.57 0.79 Head assays
68.00 4.58 0.37 0.09 -3.23 39.02 DTC (75um)
TWDD002 28 38 10 26.71 42.38 5.12 0.23 0.53 3.97 Head assays
68.70 3.65 0.29 0.09 -3.21 27.38 DTC (75um)
TWDD003 16 26 10 30.58 42.80 4.50 0.0042 0.53 0.93 Head assays
67.80 5.19 0.28 0.069 -3.17 28.66 DTC (75um)
Hammerhead, Thresher (and Bronzy) Fe Exploration targets
Topographic view Hammerhead / Thresher and Bronzy from Nail & Tack (looking North West)
BronzyThresher
High DTR (David Tube Recovery)
Characteristics
- From surface samples
Highlights included
- 62% DTR (Fe head 48%)
- 46% DTR (Fe head 31%)
- 47% DTR (Fe head 32%)
High weight (DTR recovery) XRF concentrate grades awaited
DTR Wt% Recovery for Surface Samples
Highlights of sample with DTR Wt% greater than 30% with laboratory Head XRF grade
Thresher & Hammerhead
Sample ID DTR Wt% Head Fe% Head Al2O3 % Head SiO2% Head P2O5%
58645 37.4 30.1 5.5 39.0 0.8
58651 61.6 48.1 1.5 26.9 0.5
58764 36.9 36.1 3.8 28.3 0.5
58901 30.2 22.9 2.5 28.8 0.4
58942 36.0 43.4 1.2 33.6 0.5
58944 35.8 27.1 4.3 39.1 0.6
58967 42.3 42.8 3.2 26.8 0.8
58973 46.5 31.5 3.8 28.9 0.8
59204 40.9 42.7 0.4 36.9 0.5
Hammerhead, Thresher (and Bronzy) Fe Exploration targets
Bronzy
Thresher
Hammerhead
Nail & Tack
Thresher West
DD Holes
Thresher East
DD Holes
10 kms
Hammerhead, Thresher (and Bronzy) Fe Exploration targets with DTR
Wt% grades
Bronzy
Nail/Tack
Thresher
Hammerhead
10 kms
Ondjou Prospect
10 km strike
Iron Rich Chuos Formation
Ondjou Prospect - “Maiden” Inferred Magnetite Resource….and some key features for consideration
Ease of access for ongoing exploration
Proximity to regional township
Proximity to proposed infrastructure/coast
Evidence of (scarce) water resource
Scale and consistency of mineralisation encountered
Known Exploration upside
Existing resource and drilling to expand
Large scale Exploration targets over 100km strike
Inferred JORC Resource 521Mt at 24% (head grade Fe)
Total Cost circa $0.5m including assay costs
Reverse Circulation (3,400m) drilling program complete, confirmed:
Broad zones of Fe mineralisation encountered in all (21) drill holes
Mineralisation from surface and shallow dipping ~ 30o
Average down hole length of mineralisation - 90m at 25% Fe (average)
Current drilling covered 3,600m strike length (of 10,000m)
Mineralisation at Ondjou is an iron rich diamatite (glacial sediment)
Mag Suss / weight recovery correlation
New aeromagnetics confirm prospectivity over magnetic horizon
Drilling recommenced February 2011 (5,000m diamond drilling)
Ondjou ProspectSummary of Recent Activity and Milestones reached
Ondjou ProspectMagnetite Resource - Inferred
Outline of JORC
Resources
Current areas of
extensional
resource definition
Proposed Drill Holes
Completed Drill Holes
6 km
s
~ 1
0km
s
Images from Ondjou ProspectSouthern Extension
RC drilling at Ondjou north in 2010 Avonlea geologist indicating Fe rich outcrop in escarpment (dark grey outcrop)
Images from Ondjou ProspectSouthern Extension
Summary Fe Exploration Activity /Milestones - 6mnths to Jun „11
Resource definition drilling recommenced 1 Mar 2011 (5,000m ~$1.4m + assay costs)
6km extension being tested
Reprocessed Aeromagnetic data confirms high grade potential
Focussed mapping program to finalise targets exploration/drilling program(s)
Awaiting formal EPL grant (prior to remote sensing data acquisition)
Reconnaissance and target generation on 100+km iron rich Chuos formation
......and a scoping study will commence in conjunction with current programs
Ondjou
Hammerhead/Thresher/Bronzy
Himba Fe Licences
The Revised Valuation Metric - based on Fe potential
Africa is widely recognised as host emerging and significant iron ore provinces
Recent transactions have created a benchmark for a revised valuation metric
“...Shandong’s proposed US$1.5b investment in African Minerals’ Tonkolili Project (for a 25% interest) is equivalent to A$0.63 EV/t. Zanaga Iron ore recently listed on the AIM and is trading at ~A$0.26 EC/t (100% basis) and $0.52 EV/t (assuming Xstrata exercise their option to acquire 50%)” *
Company Estimated
Current
EV (A$M)
Current
Resources
(Mt)
Target Resource Tonkolili
Implied
EV/t
Discount Target EV/t Target EV (A$M) Current
Market Cap
Low High Low High
AKI 146 33 @ 56% Fe 900 1,300 $0.63 50% $0.32 286 413 150
AVZ 10 521 @ 24% Fe 2,680 3,420 $0.63 75% $0.16 425 543
CFE 290 197 @ 29% Fe 600 900 $0.63 25% $0.48 286 429 335
EQX 254 - 2,300 3,900 $0.63 50% $0.32 730 1,238 280
*Source: Foster Stockbroking Equity Research West African Iron Ore Explorers Report 12/01/2011. Fosters have applied a range of discountsto this metric to account for the respective resource size, infrastructure access and timeline to production
.... Circa $80m enterprise value (EV) for AVZ’s current Fe resource 521Mt @ 16 cents per tonne = $80m EV
.... OR $1 per contained tonne of Fe 521Mt x 24% Fe x 65% (concentrate)
= ~ 80Mt contained Fe @ $1per Fe tonne
13
All Prospects are proximal the Namibian coastline
(between 120 - 200 km)
Blueprint for transport corridor under consideration/ tenders being called
Government remains committed (AVZ will perpetuate in stakeholder dialogue)
New port option(Cape Fria/Angra Fria)
Rail link (east/west corridor in northern Namibia)
Rail/ Road/ Slurry options are practical alternatives (within scoping study mandate)
Existing and expanding Hydro electric power
Ruacanna 3rd turbine expansion program
Baynes project area being progressed
H2O options
Kunene River proximity (130km)
Coastal desalination potential (120km)
Logistics considerationsSolutions for bulk commodities have been identified
Avonlea‟s Other Exploration Equation.......
9,500 sq kms less 1,700 sq kms (Fe) Equals
7,800 sq km of licences with significant exploration potential to host
Base metal (Cu, Pb, Zn)
Vanadium
Rare earth / Rare metals
Precious metal
Commodity specific entities have been incorporated (local ownership established)
EPL‟s have been applied for (our licences are “in the queue”)
The regional geological potential has been independently assessed
Exploration programs including target definition is already underway
Himba Fe Projects
Eris Mining Butterfly & Hoarusib Projects
Tumba Base Metal
Projects
Eris Mining Abenab V
Project
Avonlea Project Areas - 9,500sq km (Pending/Granted EPL‟s)
Eris Mining Sn & REE Projects
Base Metal, Precious REE
Projects
Rare and base metal prospectivity/ proximity to mineral occurrences
Radiometric and Aeromagnetic images purchased
Regional/ geological mapping commenced; “ground truthing” underway
Geological settings for Cu, Ag, Au, Pb, Zn?
Limited or no exploration previously undertaken
Stream sediment and rock chip sampling program currently in progress
Independent Regional review to be finalised in the current quarter
......the Potential - Rare metals / Base metals focus
Hoarusib (EPL 4126, 4127, 4128) (2,964 sq kms)
Avonlea adjoining Project Areas to Hoarusib
Eris Mining Projects
Himba Iron Projects
INV Metals JV (Teck Cominco)
Areas of significant interest & activity
EPL‟s 4126, 4127, 4128
Hoarusib - Base metal potential
Copper, Lead, Zinc
Proximity to mining licences and
historical activity with known base
metal occurrences
Geological continuity of mineralised
sequences identified in the south and
east of the project area
Targeted exploration model to be
based around Stratiform Cu and
SEDEX models
Tsongoari
Pb-Zn-Ba Project
Granted licence EPL
4339 - prospective
for Cu, Pb, Zn
Tsongoari North Prospect
Base Metal Potential EPL 4339 (342sq km)
Avonlea Project Areas - Eastern Namibia
Companies already in playTeck Cominco
Etruscan (Namibia REE)
Auryx Gold
Okoruso Flourspar
Sabre Resuorces
Ambase Exploration
Weatherly
Cullen Resources
Tschudi43Mt 0.83% Cu;
10.52g/t Au
Tsumeb30Mt 10% Pb; 4.3% Cu;
3.5% Zn; 100g/t Ag
Tsumeb West1Mt 2.1% Cu;
18g/t Ag
Okorusu80,000t in 2009
97.5% pure CaF2
Otjikoto40.5Mt 1.5g/t Au
Kombat10Mt 3.1% Cu;
1.1% Pb, 26g/t Ag
Groot Otavi157,000t 5.85% Pb;
1.54% Zn, 15g/t Ag
Kaskara
Abenab West76,994t 58% Pb
5% V2O5
Berg Aukas1.6Mt 0.93% V2O5;
4.04% Pb; 16.77% Zn
Tzamin200,000t 1.9% Cu;
56.1% Ag
Abenab1.85Mt 17.05%
V2O5; 72% Pb
Otavi Carbonate Platform....known mineral occurrences & notable interest
Prospective for high grade poly metallic ore bodies
similar to the nearby Tsumeb Deposit ; production of
30Mt
10% Pb
4.3% Cu
3.5% Zn
100g/t AgFigures from Mineral Resources of Namibia 1992
Licence applications pending along strike from
Tsumeb covering the same stratigraphic horizons
Little modern systematic exploration has taken place
over the majority of the application / areas
Otavi Carbonate Platform Licence Holdings
Tumba
EPL‟s 4436, 4437, 4438, 4439, 4430 (3,361sq kms)
Images from Ore Deposit Conceptual Models, UWA, 2007, Frimmel, H.E.
Base Metals, Precious Metals & REE
potential
Limited previous exploration
- 14 historical base metal stream sediment
anomalies
Precious metal potential, similar to
Otjikoto Gold deposit
Base metal potential, similar to Tsumeb
deposit
REE potential, Bostonite / pegmatites
dykes
EPL4125 617sq kms
ParesisPrecious and base
metal potential
Rare Earths
Rare Earths
Historic Abenab vanadium mine
- Produced 42 million pounds V2O5 in
concentrate
40kms from Tsumeb mine (Cu, Pb,
Zn) but region is underexplored
Abenab VanadiumEPL 4416 (420sq km)
Immediate exploration target(s) based on significant MME database review
Abenab VanadiumEPL 4416 (420sq km)
Managing Director
David Riekie
Freemasons Hall
181 Roberts Road
Subiaco WA 6008
Tel: +61 8 9287 5900
Website: www.avonleaminerals.com.au
ASX: AVZ
Targets Pb, Zn, Cu, Ag (Au)
Licence PendingEPL
Area sq km
Mooihoek 4439 998
Patton 4436 942
Tsumis 4437 497
Hotsaus 4438 741
Guinas 4,440 183
Total 3,361
Tumba Base Metals X (Proprietary) Ltd
Licence details / expenditure
Tumba Base Metals X
Commitments over 3 years from issue and grant
Expenses as of 31 December 2010
The licence details
Eris Mining
Licence Status/Date Area sq km
Hoarusib
EPL 4126 Dec ‘08 996
EPL 4127 Dec ‘08 990
EPL 4128 Dec ’08 978
EPL 4339 Oct ‘10 342
Paresis
EPL 4125 Dec ‘08 617
Abenab
EPL 4416 Oct ‘10 420
Brandberg
EPL 4624 Application 78