Download pdf - Forsys Investor Presentation October 2013

Forsys Metals Investor

Presentation October 2013

Marcel Hilmer, CEO

TSX: FSY | FSE: F2T | NSX: FSY

FORWARD-LOOKING STATEMENTS

Investor Presentation | October 2013 | Page 2

Some of the statements contained in the following material are forward looking statements and not statement of facts. Such statements are based on the current beliefs of management, as well as assumptions based on management information currently available. Forward looking statements are subject to various risks, uncertainties and other factors that could cause actual results to differ materially from expected results. Readers must rely on their own evaluation of these uncertainties. This presentation uses the terms, “Measured Resources,” “Indicated Resources” and “Inferred Resources.” The Company advises investors that although these classification terms are recognized and required by Canadian regulations (National Instrument 43-101—Standards of Disclosure for Mineral Projects “NI43-101”), they are not recognized by the U.S. Securities and Exchange Commission. Investors are also cautioned not to assume that any part or all of the mineral deposits in these categories will ever be converted to Mineral Reserves. Investors are also cautioned that “Inferred Resources” have a great amount of uncertainty to their existence and economic feasibility. Additional information identifying the Company’s risks and uncertainties is contained in its filings available at www.sedar.com. Qualified Person Mr. Martin Hirsch, M.Sc in Geology and a member of the British IMMM, Chief Geologist for Forsys Metals Corp., is the designated Qualified Person responsible for the Company’s exploration programs. He is familiar with the methods for Quality Assurance and Quality Control specifically applicable to uranium. Mr Hirsch has sufficient experience that is relevant to the style and mineralization, type of deposit and the use of radiometrics in resource estimates as well as to the activity he is undertaking to qualify as a Qualified Person under NI 43-101.

http://www.sedar.com/

Advancing

Africa’s

most compelling

uranium project


Well positioned for positive uranium sector outlook

• Advanced, fully permitted project in

Namibia

• Large compliant Resources and

Reserves

• Strong and improving economics

• Production scheduled to

commence in Q2 2016


OUR CORE FOCUS | NORASA

Significant upside potential


CAPITAL STRUCTURE

40.4%

53.5%

Insiders

Institutional

Retail

6.1%

Forsys Metals Shareholder Base

Cash*: $4.0 M

Share Price*: $0. 35

12 months range: $0.33 -$0.87

Avg. volume (3 mths): 22.3

Market Cap (diluted): CAD $40.0M

Shares Outstanding*: 109.8 M

Options*: 2.7 M

Warrants*: 2.0 M

Fully Diluted*: 114.5 M

* as of June 30, 2013

Driven by demand for affordable and clean electricity

POSITIVE URANIUM FUNDEMENTALS


30% nuclear power

• Global power consumption to

grow 4% every year to 2020+

• 30 nuclear power countries

expanding capacity

• 45 nuclear-free countries

looking to add nuclear power

• Driven by rising fossil fuel costs

and harmful emissions

growth

in

by 2020*

*Global Data, March 2013

URANIUM RECOVERY

UNDERWAY

557 New

reactors to

be built or

under

construction

China India Russia U.S.A

Saudi Arabia World Total

Under Construction 28 7 10 3 0 68

Planned 61 18 28 9 0 175

Proposed 118 39 18 15 16 314

Total 207 64 56 27 16 557

Operable 17 20 33 100 0 432

Growth led by

emerging

countries without

domestic supply


Strong fundamentals support $70/lb

long-term analyst price forecast

DEMAND TO EXCEED SUPPLY

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

-100,000

-75,000

-50,000

-25,000

0

25,000

50,000

75,000

Net Balance World Supply World Requirements

• Annual U3O8 demand ~170M lbs

• Current production supply ~140M

lbs

• Gap filled by secondary sources will

end late 2013

• HEU Agreement between U.S. and

Russia


PROVEN

URANIUM

JURISDICTION

• Pro-business, stable

democracy

• Fair and balanced tax code

• Metals: uranium, gold,

diamonds, zinc, copper and

lead

5th largest global producer

of uranium

GDP derived from

mining

9%


NAMIBIA

Opportunities for further resource expansion

* Total Measured & Indicated estimate at cut-off of 100ppm for Valencia and 170ppm for

Namibplaas

• Consolidation of 3 zones: Valencia Main / Satellite Pit & Namibplaas

• Extensive mineralization near

surface

• Open pit environment

NORASA | WORLD CLASS PROJECT

U3O8

Total M&I: 96 Mlbs*

Grade: 200ppm


~35km from Rio Tinto’s Rossing Mine

NORASA | IDEAL LOCATION

SWAKOPMUND

ARANDIS

NORASA URANIUM PROJECT

RIO TINTO’S ROSSING MINE

PALADIN’S LANGER HEINRICH MINE

Mine Sites

Towns

NAMIBIA

N

AREVA’S TREKKOPJE MINE


EXCELLENT INFRASTRUCTURE

Water Supply

Power Supply

Roads

Buildings

• The National Desalination Task Force confirmed additional

water availability by end of 2014

• Approximating 20 million cubic metre capacity per annum

• NamPower confirmed sufficient power supply capacity

• New base-load generation is anticipated to be

commissioned in 2015

• Additional power from Mozambique

• 26 km of new access road linking Valencia mine to highway

completed in mid 2010. Internal service roads have also

been constructed

• Semi-permanent village will be established 8 km from

process plant


NORASA IN PERSPECTIVE


10 uranium

producers in tonnes U

3O

8

Data from the World Nuclear Association.

3386 3146 3065

2661 2289 2135 2011 1955 1903

7520

Norasa’s operating potential - a re-rating opportunity

Top

$429M* Pre-tax NPV

$35/lb* Cash Costs

* 2010 Snowden Valencia Technical Report Investor Presentation | October 2013 | Page 14

Basis for

optimization

and

consolidation

* SNOWDEN, Valencia Uranium (Pty) Ltd: Addendum to June 2009 Technical Report; Project No 696 dated January 2010

STRONG ECONOMICS

Progress through optimization and consolidation

2013 Engineering

Cost Study

Throughput 8.6M tonne/yr 11.2M tonne/yr

Production 3.3M lb/yr 4.2 M lb/yr

Process cost $/lb $23.66 $21.11

CAPEX (Plant) $241.6 MM $249.7 MM

Crushing 3-Stage 2-Stage

Milling 3 rod mills 1 SAG mill

Revenue (loM) $3.5 billion $4.5 billion

Differential NPV + $348 million

* 2013 ECS was completed by AMEC and focused on the optimization of Norasa’s project economics. Includes Namibplaas and

Valencia. See News Release: May 2, 2013 for details


NORASA | Optimized / Expanded Plant*

2010 Base Case Updated to

2013 $

Permit Summary

Permit Issued By Status

Mining Licence (ML149) Ministry of Mines and Energy

Accessory Works Ministry of Mines and Energy

Environmental Clearance —Valencia Village Ministry of Environment and Tourism

Environmental Clearance Ministry of Environment and Tourism

Petroleum Consumer Installation Ministry of Mines and Energy

Desalination Ministry of Agriculture, Water & Forestry


VALENCIA ZONE | FULLY PERMITTED

NORASA PROJECT SCHEDULE


MANAGEMENT

An experienced team – successfully delivering projects on

time and within budget

Marcel Hilmer CEO & Exec. Director

30 years of senior management experience with global public and private organizations, specifically with international

mergers and acquisitions in Africa, Europe, Asia and Australia. A long standing member of the Institute of Chartered

Accountants in Australia. Previously, with First Quantum Minerals Limited as a business development executive.

Rowen Colman Director Finance

A Chartered Accountant with over 25 years of successful senior financial management experience in various global industries

and holds a Bachelor Degree in Commerce from the University of NSW, Australia. Previously, was the Development Director

for a major sovereign wealth fund in the Middle East and guided the fund from start-up to a global powerhouse.

Mark Frewin VP Legal Affairs &

Director

A partner at the international law firm of McCarthy Tétrault, and based in their London England office. Focuses on energy and

in particular mining and metals. Has participated in numerous international mine financings including several for companies

which do business in Africa. Mr. Frewin is also a director of the Company and of IC Potash.

Dag Kullmann General Manager &

Project Engineer

A Mining Engineer (M.Sc. University of Alberta, Canada, 1989) with over 20 years of experience in the precious, base metals,

diamonds, coal and uranium mining industry throughout Africa and within Asia and Europe. Acted as Qualified Person for

several large and small mining companies for the completion of reserve reporting and listing documentation for the JSE, AIM,

ASX and TSX.

Martin Hirsch Chief Geologist

An experienced and professionally registered Geologist with a Master’s Degree in Geology from the Johan Wolfgang-Goethe

University in Frankfurt A.M, Germany. Has more than 20 years of mining industry experience in opencast mining and

exploration project management in uranium and diamonds. Previously with Rio Tinto’s Rössing Uranium Mineas Chief

Geologist and Areva Resources Namibia.


DIRECTORS

100+ years of experience in African mining

Martin R. Rowley Independent Director &

Chairman

Graduated from the University of Western Australia with a Bachelor of Commerce degree in 1975. He worked as executive

assistant to the Board of Directors of a large Australian public company from 1980 to 1984. He then established his own

resource consulting and investment company and was involved as a shareholder, Director and Chairman of a number of

Australian public resource companies before co-founding First Quantum Minerals Ltd in 1996.

Thomas Allen Independent Director

A counsel to Ogilvy Renault LLP, an international law firm based in Canada, and has extensive experience advising

numerous corporations on corporate affairs, corporate governance, corporate financings and reorganizations.

Paul Matysek Independent Director

Serves as President and Chief Executive Officer of Lithium One Inc. and Nevada Copper Corp. Has over 35 years of

exploration and development experience and has been involved in raising over $200 million for various exploration and

development projects since 1999.

Claudio Cornini Independent Director

Founder and current Executive Director of Cornhill and Harvest Ltd. (C&H). Since 2008, C&H has focused on providing

small cap and larger private companies with investment, corporate finance and M&A advisory services Prior to this,

between 2004 – 2008, He served as Chairman of AAA Bank in Milan, Italy and concurrently, from 2007 to early 2008, he

was in charge of the Network Desk at ABN AMRO in Italy.

Marcel Hilmer &

Mark Frewin

Details on previous management slide


VALUATION AGAINST PEERS

Current EV and expected sector recovery

provide attractive entry point

Average: $1.04

EV

/lb

($)


4.0

1.6

1.0 0.8

0.7 0.5

0.4 0.3

0.1

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

$4.00

DML.T KIV.V UEX.T RSC.T LAM.T MGA.T FSY.T DYL.AX BAN.T

FORSYS

INVESTMENT

SUMMARY


Poised to capitalize on uranium sector recovery

Consolidated project in mining friendly jurisdiction

Strong economics and low cost environment

Advancing towards production

Fully permitted with excellent infrastructure

Experienced management team

CONTACT

INFORMATION

Investor Relations and Corporate

Services Canada

Joe Racanelli

VP, TMX Equicom

31 Adelaide Street East

Toronto, Ontario M5C 2K3

+1 416-815-0700 ext. 243

[email protected]

Australian Representative Office

Marcel Hilmer, CEO

18 Richardson Street

West Perth WA 6005

+61 8-9322-3549

[email protected]

www.forsysmetals.com


APPENDIX

LARGE COMPLIANT RESOURCE*


* Based on updated Estimate of Resources – October 2013

Category Cut-Off Grades Tonnes [M] U3O8 [ppm] U308 [mlb]

Measured

Val 60ppm: Nam 100ppm 27 153 9

Val 100ppm: Nam 160ppm 17 202 7

Val 140ppm: Nam 200ppm 10 253 6

Indicated

Val 60ppm: Nam 100ppm 419 153 141

Val 100ppm: Nam 160ppm 221 197 96

Val 140ppm: Nam 200ppm 114 248 62

Measured + Indicated

Val 60ppm: Nam 100ppm 447 153 150

Val 100ppm: Nam 160ppm 237 197 103

Val 140ppm: Nam 200ppm 125 248 68

Inferred

Val 60ppm: Nam 100ppm 105 156 36

Val 100ppm: Nam 160ppm 50 198 22

Val 140ppm: Nam 200ppm 18 269 10

OPEN PIT DESIGNS


Namibplaas

Valencia Main & Satellite

Namibplaas resource model displaying blocks of 170ppm plus within the updated preliminary pit outline.

Valencia resource model displaying blocks of 200ppm plus within the updated preliminary pit outline.

ENGINEERING COST STUDY


AMEC released an Engineering Cost Study Report

dated May 2013. The scope of works included assessing

a number of comminution flowsheet changes,

optimizations and process plant Capex and Opex

updates. The preferred option was a two-stage crush

plus single stage SAG mill using acidic filtrate at a grind

of P80 ~600 µm. Highlights include:

• Differential NPV estimates increased by

US$348m before tax

• Opex is significantly reduced from the adjusted

2010 engineering cost study (in 2013 dollars)

• Capex for the process plant is cost-effective at

US$249.7m

• Leach residence time reduced significantly by

30%

• Increase in plant throughput from 8.7 Mt/a to

11.2 Mta

• An increase in average annual production from

3.3 Mlb to 4.2 Mlb U3O8

• Plant availability increased from 88% to 91%

• Plant block model greatly simplified.