Forsys Investor Presentation October 2013

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Overview of Forsys Metals and flagship uranium project in Namibia

Text of Forsys Investor Presentation October 2013

  • Forsys Metals Investor Presentation October 2013 Marcel Hilmer, CEO TSX: FSY | FSE: F2T | NSX: FSY
  • FORWARD-LOOKING STATEMENTS 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 43-101Standards 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 Companys 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 Companys 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. Investor Presentation | October 2013 | Page 2
  • Advancing Africas most compelling uranium project Investor Presentation | October 2013 | Page 3
  • OUR CORE FOCUS | NORASA Advanced, fully permitted project in Namibia Large compliant Resources and Reserves Strong and improving economics Production scheduled to commence in Q2 2016 Well positioned for positive uranium sector outlook Investor Presentation | October 2013 | Page 4
  • CAPITAL STRUCTURE Forsys Metals Shareholder Base 6.1% Insiders Shares Outstanding*: 109.8 M Options*: 2.7 M Warrants*: 2.0 M Fully Diluted*: 114.5 M 53.5% Retail Cash*: $4.0 M Share Price*: 40.4% $0. 35 Institutional 12 months range: Avg. volume (3 mths): Market Cap (diluted): $0.33 -$0.87 22.3 CAD $40.0M * as of June 30, 2013 Significant upside potential Investor Presentation | October 2013 | Page 5
  • POSITIVE URANIUM FUNDEMENTALS 30% Global power consumption to grow 4% every year to 2020+ growth in nuclear power by 2020* *Global Data, March 2013 30 nuclear power countries expanding capacity 45 nuclear-free countries looking to add nuclear power Driven by rising fossil fuel costs and harmful emissions Driven by demand for affordable and clean electricity Investor Presentation | October 2013 | Page 6
  • URANIUM RECOVERY UNDERWAY 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 Investor Presentation | October 2013 | Page 7 557 New reactors to be built or under construction
  • DEMAND TO EXCEED SUPPLY 75,000 350,000 50,000 300,000 25,000 250,000 0 200,000 -25,000 150,000 -50,000 100,000 -75,000 50,000 -100,000 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 0 Net Balance World Supply World Requirements Strong fundamentals support $70/lb long-term analyst price forecast Investor Presentation | October 2013 | Page 8
  • NAMIBIA PROVEN URANIUM JURISDICTION th 5 largest global producer of uranium Pro-business, stable democracy Fair and balanced tax code Metals: uranium, gold, diamonds, zinc, copper and lead Investor Presentation | October 2013 | Page 9 9% GDP derived from mining
  • NORASA | WORLD CLASS PROJECT Consolidation of 3 zones: Valencia Main / Satellite Pit & Namibplaas Extensive mineralization near surface Open pit environment Total M&I: 96 Mlbs* Grade: 200ppm U 3O 8 * Total Measured & Indicated estimate at cut-off of 100ppm for Valencia and 170ppm for Namibplaas Opportunities for further resource expansion Investor Presentation | October 2013 | Page 10
  • NORASA | IDEAL LOCATION N NORASA URANIUM PROJECT AREVAS TREKKOPJE MINE ARANDIS RIO TINTOS ROSSING MINE NAMIBIA Mine Sites SWAKOPMUND PALADINS LANGER HEINRICH MINE Towns ~35km from Rio Tintos Rossing Mine Investor Presentation | October 2013 | Page 11
  • 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 Investor Presentation | October 2013 | Page 12
  • NORASA IN PERSPECTIVE 10 uranium 7520 Top 3386 3146 3065 2661 2289 producers 2135 2011 1955 in tonnes U3O8 Norasas operating potential - a re-rating opportunity Data from the World Nuclear Association. Investor Presentation | October 2013 | Page 13 1903
  • STRONG ECONOMICS $429M* Pre-tax NPV $35/lb* Cash Costs Basis for optimization and consolidation * SNOWDEN, Valencia Uranium (Pty) Ltd: Addendum to June 2009 Technical Report; Project No 696 dated January 2010 Investor Presentation | October 2013 | Page 14 * 2010 Snowden Valencia Technical Report
  • NORASA | Optimized / Expanded Plant* 2010 Base Case Updated to 2013 $ 2013 Engineering Cost Study Throughput 8.6M tonne/yr 11.2M tonne/yr Production 3.3M lb/yr 4.2 M lb/yr $23.66 $21.11 $241.6 MM $249.7 MM 3-Stage 2-Stage Milling 3 rod mills 1 SAG mill Revenue (loM) $3.5 billion $4.5 billion Process cost $/lb CAPEX (Plant) Crushing Differential NPV + $348 million * 2013 ECS was completed by AMEC and focused on the optimization of Norasas project economics. Includes Namibplaas and Valencia. See News Release: May 2, 2013 for details Progress through optimization and consolidation Investor Presentation | October 2013 | Page 15
  • VALENCIA ZONE | FULLY PERMITTED Permit Summary Permit Issued By 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 Investor Presentation | October 2013 | Page 16 Status
  • NORASA PROJECT SCHEDULE Investor Presentation | October 2013 | Page 17
  • MANAGEMENT Marcel Hilmer CEO & Exec. Director Rowen Colman Director Finance Mark Frewin VP Legal Affairs & Director Dag Kullmann General Manager & Project Engineer Martin Hirsch Chief Geologist 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. 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. A partner at the international law firm of McCarthy Ttrault, 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. A Mining Engineer (M.Sc. University of Al