UG2 Resource ~ 5.3 Moz Pt/Pd = 1.5:1 Open Pit Potential – 6 Km Outcrop GHOST MOUNTAIN
5 September 2008
The Manager Company Announcements Australian Securities Exchange Exchange Plaza 2 The Esplanade PERTH WA 6000
Via E Lodgement
COMPANY PRESENTATION – UPDATED FOR COMPETENT PERSONS STATEMENT
Please find attached the Company presentation from the Africa Downunder Conference, updated for the inclusion of the Competent Persons Statement on the Disclaimer page.
For and on behalf of the Board
Peter Landau Executive Director
AUSTRALIAN OFFICE Level 3, 1 Havelock Street West Perth WA 6005 Australia
PO Box 684 West Perth WA 6872 Australia
Tel: +61 (0)8 9488 5220 Fax: +61 (0)8 9324 2400
NKWE PLATINUM LIMITED ARBN 105 979 646
REGISTERED OFFICE Clarendon House 2 Church Street Hamilton HM11 For personal use only use personal For PO Box HM666 Hamilton HMCX BERMUDA
NKWE PLATINUM LIMITED Bermuda Regn Number 32747
Web: www.nkweplatinum.com
NKWE PLATINUM LIMITED
ARBN 105 979 646 Bermuda Rgn No 32747 THE PGM
For personal use only use personal For OPPORTUNITY
www.nkweplatinum.com ASX:NKP Disclaimer
This Document is Confidential This document may not be reproduced, redistributed or passed on, directly or indirectly, to any other person, or published, in whole or in part, for any purpose without prior written approval from Nkwe Platinum Limited.
Distribution Limitations The distribution of this document in jurisdictions outside of Australia may be restricted by law, and persons into whose possession this document comes should inform themselves about, and observe, all such restrictions.
This Document is not a Prospectus nor an Offer to Subscribe for Shares This document is not a prospectus and does not contain or purport to contain all the information in relation to a transaction that would be contained in a prospectus or that you, the recipient, may require to evaluate the proposal. This is not an offer to subscribe for shares.
No Representation or Warranty is made as to the Accuracy and Completeness of this Document and no Liability Accepted Whilst all reasonable care has been taken to confirm the reliability of the information and opinions expressed herein, no representation or warranty is made as to the accuracy or completeness of this document. Any assumptions, interpretations, estimates and forecasts contained herein involve subjective judgments that may be subject to significant uncertainties and contingencies and may not prove accurate. Accordingly, any estimates and forecasts may not be achieved, and any statements as to future matters may not prove correct and the differences may be material. In all cases, the recipient must conduct his / her own investigation and assessment and satisfy his / her self as to the completeness, accuracy or reliability of the information herein.
Competent Person Statement The information in this report that relates to Mineral Resources is based on a resource estimate completed by Mr Nico Denner who is employed by Geological and Mine Evaluation Computer Services. Mr Denner is a Geologist with over 14 years of experience in the South African Mining Industry and 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 Person as defined by the 2004 Edition of the ‘Australasian Code of Reporting of Exploration Results, Mineral Resources and the Ore reserves. Mr NJ Denner is a member of South African Council for Natural Scientific Professions
(Membership No. 400060/98). For personal use only use personal For Mr Denner consents to the inclusion of this information in the form and context in which it appears in this report. Introduction to Nkwe
Vision To be among the top five global vertically integrated platinum producing companies
“This transaction provides Xstrata with entry into the prospective Eastern Limb region and access to a significant, continuous PGM block. The joint development of these properties with Nkwe and Genorah, together with a downstream processing operation, will provide significant growth in mined production and refining for all partners, helping to establish Nkwe as an independent, integrated producer of scale and adding further growth potential to our rapidly developing platinum business.“ (6 August 2008) Mission To become a leading platinum producer which mines, refines and markets platinum products to contribute significantly towards shareholder wealth, employee satisfaction and community development.
Values Grow shareholder value Strive for excellence Creating a legacy Good corporate citizen
Enjoy doing business For personal use only use personal For Platinum Market Overview
Metal for the future Primarily used in the manufacture of 9000 2500 autocatalysts, industrial applications and increasingly in jewellery 8000 2000 Investment case for PGM’s is simple – the 7000 world needs more and supply will battle to keep pace 6000
Tight global market 1500 US$/oz 5000 Platinum market moved from a 355,000 oz
surplus in 2006 to a 480,000 oz deficit in 2007 oz ‘000 4000 The market is forecast to remain in deficit in 1000 2008/09 and remain tight beyond 3000 South African production contributed 78% of 2000 2007 global supply 500 Output constrained by smelter closures, 1000 mining issues and a difficult IR climate
Platinum price responded, rising to a high of 0 0 US$2,290/oz in March 2008 98 99 00 01 02 03 04 05 06 07 08 09F 10F 11F 12F
Total Supply ('000oz) Total Demand ('000oz) Average Price (US$/oz) For personal use only use personal For
Source: Johnson Matthey (Platinum 2008), Credit Suisse Standard Securities estimates, Bloomberg Platinum Market Overview
Supply Global supply fell by 4.1% in 2007 to a total of 6.55Moz Future production out of South Africa is the key to platinum market dynamics To fill the supply gap, South African mines must overcome impediments that hampered 2007 production Widely held view that South African power supply issues will not be resolved in the short term but significant capacity increase planned for 2010+
Demand Global demand rose by 8.6% in 2007 to 7.03Moz Catalytic converters consumed 50% of this demand PGM demand from the automotive sector will continue to surge through: booming car production in Asia; and the retro fitting of PGM containing converters to heavy duty diesel vehicles to meet tightening emissions legislation Investment demand for platinum through Exchange Traded
Funds is also expected to remain robust For personal use only use personal For
Source: Johnson Matthey (Platinum 2008), Credit Suisse Standard Securities estimates PGM Market Overview
Platinum Supply by Region (Moz) (2002 – 2012F) Platinum Demand by Application (Moz) (2002 – 2012F) 9 9 8 8 7 7 6 6 5 5 4 4 3 3 2 2 1 1 0 0 02 03 04 05 06 07 08F 09F 10F 11F 12F 02 03 04 05 06 07 08F 09F 10F 11F 12F South Africa Russia North America Others Investment Autocatalyst Industrial Jewellery
Palladium Supply by Region (Moz) (2002 – 2012F) Palladium Demand by Application (Moz) (2002 – 2012F) 10 10 9 9 8 8 7 7 6 6 5 5 4 4 3 3 2 2 1 1 For personal use only use personal For 0 0 02 03 04 05 06 07 08F 09F 10F 11F 12F 02 03 04 05 06 07 08F 09F 10F 11F 12F South Africa Russia North America Others Investment Autocatalyst Industrial Jewellery
Source: Johnson Matthey (Platinum 2008), Credit Suisse Standard Securities estimates Corporate Structure
ASX listed (ASX.NKP), pure Platinum Group Metals (“PGM”) company All Projects in Bushveld, South Africa Regionally diversified across East & West Bushveld Critical mass to become Vertically Integrated PGM Producer HDSA controlled and fully compliant Xstrata option fully funds BFS and potentially, development Other Shareholders
35.7% Genorah Resources
Nkwe Platinum Ltd
26% GARATAU + De Kom 74%
26% 74% Rooderand, Kliprivier
26% Hoopekrants, Option to acquire 74% For personal use only use personal For Nooitverwcht, Eerstegeluk 59% from Genorah 15% from IGC Current Corporate Snapshot
Board and Executive Management Share performance and volume (12 months) Maredi Mphahlele – Managing Director $1.40 12m Peter Landau – Executive Director $1.20 10m Tony Weber – Technical Director $1.00 8m Mxoleli Nkuhlu – Legal Director $0.80 6m Sharif Pandor – Non Executive Director $0.60 4m Andre van der Merwe – Project Manager $0.40 Shammy Luvhengo – Bus. Dev. & Investor Relations $0.20 2m Staff Sithole – Corporate Affairs Manager $0.00 0m Aug-07 Oct-07 Dec-07 Feb-08 Apr-08 Jun-08 Aug-08
Shareholders Capital Structure Genorah Resources1 35.7% Current Share Price (1 September 2008) $ 0.71 Shares Outstanding2 m 187.7 BAC Fund 6.0% Market Capitalisation (undiluted) $m 133.3 RAB Capital plc 5.6% Cash 3 $m 7.7 Credit Suisse 4.8% Hawkesbridge Private Equity 1.9% Total Debt $m - 1.2% For personal use only use personal For Amari Holdings Net Cash $m 7.7 1.2% New City Investment Managers Enterprise Value (undiluted) $m 125.6 Other 47.9% 1 Increasing to 69.2% upon decision to mine 2 Does not include 66M options at various prices from $0.90 - $1.75 3 As at 30 June 2008 Future Corporate Structure
PROFORMA Shareholders Capital Structure Current Share Price (1 September 2008) $ 0.71 Genorah Resources1,2 69.2% Shares Outstanding2 m 553.75 IGC Market Capitalisation (undiluted) $m 393.16 BAC Fund Cash 34 $m 23.00 RAB Capital Credit Suisse Total Debt $m - Amari Holdings Net Cash $m 23.00 New City Investment Managers Enterprise Value (undiluted) $m 356.74 Other 30.8%
1 Increases initially to 48% pursuant to JORC Milestone in Genorah transaction 2 Option to acquire 59% in Southern Farms will increase shares on issue by ~250M
3 Includes cash balance as at 30 June 2008 plus $16m receivable from sale of De Wildt and Xstrata Option For personal use only use personal For The Projects
Existing Infrastructure – Well Serviced Power N
Water Johannesburg POLOKWANE SOUTH AFRICA Roads PPL
Cape Town MOKOPANE Security Lebowa Twickenham Communications Marula Amandelbult Messina Modikwa Northam EERSTE GELUK ROODERAND - RUIGHOEK Union GARATAU Two Rivers
Eland DE WILDT Everest South BRPM Waterval Implats Rustenburg RUSTENBURG PRETORIA Kroondal TINDERBOX - KLIPRIVIER
Marikana Lonmin Crocodile River Smelters Western Limb Eastern Limb Bushveldt JOHANNESBURG For personal use only use personal For Bushveldt Flagship Projects
Clapham Garatouw Farm JUBILEE 118 KT Groothoek k 256 KT e IMPLATS Twyfelaar o Tjate Project h 119 KT s r T a K Marula mine Dsjate a 0 n 5 249 KT in 2 Merensky Reef – 2.83 g/t 4PGE* over 242cm W Driekop MINING LEASE 253 KT AREAS / PROPERTIES NKWE Platinum
from 350m depth DE KOM ANGLO Platinum U 252 KT G 2 IMPALA Platinum
M c h UG2 - 7.63 g/t 4PGE over 79cm from 700m depth Zwemkloof e r SEKHUKHUNE Farms r o e m 283 KT n Maandagshoek i JUBILEE Platinum s ti k 254 KT te y Merensky Reef outcrop s R e GARA a e m UG2 chromitite seam Eerste Geluk Farm Groot Vygenboom e f Mooihoek 284 KT TOUW 255 KT 282 KT Merensky Reef - 2.90 g/t 4PGE over 218cm from NKWE ANGLO PLATINUM PLATINUM Genoakop Modikwa mine surface 285 KT Hendriksplaats 281 KT 3 0 UG2 - 7.45 g/t 4PGE over 77cm from 300m + HOOGSTE PUNT Onverwacht 290 KT HOEPA 292 KT
k KRANTZ depth. m 291 KT
Houtbosch Geluks Drilling Summary Location 323 KT
Winterveld Over 30,650m (50 holes) of core drilled 293 KT SOUPIANA 325 KT Total of 227 reef intersections including NOOIT- VERWACHT EERSTE 324 KT GELUK deflections 327 KT STEELPOORT
For personal use only use personal For Resource definition in the current feasibility KENNEDY'S VALE Het Ford Project 329 KT study targets both Merensky and UG2 De Goedecerwacht
* 4PGE = Pt+Pd+Rh+Au Resources & Potential
Clapham JUBILEE 118 KT Groothoek k 256 KT e IMPLATS Twyfelaar o Tjate Project h 119 KT SRK Mineralisation Potential Report s T r a K Marula mine Dsjate a 0 n 5 249 KT in 2 W MINING LEASE 5 Farms potential mineralisation target of Driekop 253 KT AREAS / PROPERTIES NKWE Platinum
100M ounces 4PGE DE KOM ANGLO Platinum U 252 KT G 2 IMPALA Platinum with 30% discount factor applied ( ) M c h Zwemkloof e r SEKHUKHUNE Farms r o e m 283 KT n Maandagshoek i JUBILEE Platinum s ti k 254 KT te y Merensky Reef outcrop s Latest JORC inferred resource R e a GARA e UG2 chromitite seam Groot Vygenboom e m f Mooihoek 284 KT TOUW 255 KT For portions of the Eerste Geluk and 282 KT Nooitverwacht farms NKWE ANGLO PLATINUM PLATINUM Genoakop Modikwa mine 285 KT Hendriksplaats 281 KT Discounted Channel Grade 3PGE 3 Resource Width (3PGE + Au 0 + HOOGSTE PUNT Onverwacht 290 KT HOEPA 292 KT Tonnage (m) + Au g/t) (Moz) k KRANTZ Merensky m 291 KT Inferred 54.49 1.22 5.03 7.75 Houtbosch Geluks Location 323 KT
UG2 Winterveld Inferred 48.09 0.68 8.17 12.62 293 KT SOUPIANA 325 KT Total / average 102.58 20.37 NOOIT- VERWACHT EERSTE 324 KT GELUK 327 KT STEELPOORT Disclaimer: It is important to realise that the “mineralisation potential” statement is
not a JORC compliant Minerals Resource statement, but reflects the amount of For personal use only use personal For mineralisation that the Project has the potential to host given the known Merensky/UG2 KENNEDY'S VALE reef characteristics of adjacent mining operations. Het Ford Project 329 KT De Goedecerwacht Other Resources
Eastern Limb KLIPRIVIER UG2 Resource ~ 5.3 Moz Pt/Pd = 1.5:1 Open pit potential – 6 km outcrop GHOST MOUNTAIN
KLIPRIVIER DE WILDT TINDERBOX Sold to Xstrata – US$12m (July 2008) UG2 Resource ~ 4.4 Moz Pt/Pd = 3.5:1 Western Limb Footwall mineralisation – wide reef mining
ROODERAND ROODERAND DE WILDT
Merensky, UG2, Pseudo Reef ~ 4.5 Moz For personal use only use personal For Pt/Pd = 2:1 Xstrata Joint Venture
The Deal – Key Points
Xstrata option payment of US$10M Xstrata has option to acquire a collective 50% participating interest in the Properties from Nkwe and Genorah. Ultimate transaction to result in Nkwe and Xstrata each holding a 50% participating interest with Genorah holding approximately 65% of Nkwe’s issued capital (fully diluted). The Option is exercisable at Xstrata’s election following the completion of the BFS scheduled for completion in Q4 2009. If the Option is exercised, Xstrata will fund the total development cost of the Properties with the construction of 2 underground mines (both reefs) and associated concentrator facilities (approx US$1.5Bn). JV partners will undertake feasibility study for the development of downstream processing capability to develop a vertically integrated mine to market business.
The proposed 50:50 JV will include any contiguous properties currently (or in the For personal use only use personal For future) controlled by Nkwe or Xstrata. Project Dynamics
Valuation considerations Technical Considerations Resource/Target Mineralisation > 100M ounces Access Decline versus shaft access UG2 Grade (RoM) 4.56 g/t 4PGE (~60%) Combination: e.g. decline with raise bored ventilation shaft MR Grade (RoM) 3.76 g/t 4PGE (~40%) Location Configuration: e.g. number of declines, shaft size, etc. (optimisation of Capex ~US$1.5 billion construction and ramp-up times, production rates) Peak production 1 Moz of 4PGE LoM > 50 years Mining Cash operating cost US$450 / 4PGEoz Optimised mining rate(s) On or off reef development (or combination) Basket Price (Long term) US$1,420 / 4PGEoz Mechanised /conventional /hybrid mining methods (Current) US$1,300 / 4PGEoz Ground support implications of different mining methods
Approx NPV ~US$ 7 billion Transport Wheeled vs track vs conveyor (or combinations)
Sequencing Optimise sequencing of construction, production and For personal use only use personal For processing for both Merensky and UG2 reefs The Outcome for Nkwe
De-Risks Project and Value Accretive Xstrata JV provides significant project development advantages, particularly in relation to stapled financial strength and capacity Provides Nkwe with exposure to Xstrata’s: – extensive expertise in PGM’s and other alloys – proven track record in complex project development and production Large scale capital expenditure commitments will underwrite the assets value Significant targeted production profile of ~1Moz PGM per annum = Major PGM producer
Selected recent and near completion platinum projects PGM Construction Development Development Project Company Country Complete Production Commencement CAPEX (US$m) Type (oz / annum) Mototolo JV Xstrata RSA 2005 Yes 210 214,000 Mine and concentrator Elandsfontein Xstrata RSA 2007 Yes 200 280,000 Mine and concentrator Amandelbult East Upper UG2 Epansion Anglo Platinum RSA 2007 No 210 106,000 (from 2012) Mine and concentrator upgrade Unki Anglo Platinum ZIM 2007 No 400 150,000 Mine and concentrator Twickenham Expansion Anglo Platinum RSA Post 2008 No 950 180,000 (from 2016) Mine expansion Booysendal Northam RSA 2009 No 950 340,000 (from 2014) Mine and concentrator Smokey Hills Platinum Australia RSA 2007 No 52 95,000 (from 2008) Mine
For personal use only use personal For Garatouw, Eerste Geluk Nkwe RSA 2010 No ~1,000 1,000,000 Mines and concentrator Timetable
Activity Planned Date
Selection of Strategic Partner Xstrata – August 2008
Listing on both JSE and AIM** 4th Quarter 2008
Exploration Ongoing – Upgraded JORC (Sept 08)
Pre-feasibility 4th Quarter 2008/ 1st Quarter 2009
Bankable Feasibility 4th Quarter 2009
Authorisations/Permitting 4th Quarter 2009
Mine Development 2010 For personal use only use personal For
** Financial Institutions already mandated for this Peer Group Comparison
EV / Resource (US$ / Oz) The Platinum Universe
100x 160x Bubble Size = EV EV / Resource(US$/ Oz) 140x EV / Resource (US$/ Oz) 80x 120x Implats
100x 60x Platinum Australia Lonmin 80x 40x Wesizwe 60x Average = 53.5x Stillwater
40x 20x Nkwe Pro-Forma 20x Nkwe Current Eastern Platinum 6.9 5.0 Ridge Anooraq ex. Anglo Platinum 0x 0x kePro-Forma Nkwe Platinum Australia Aquarius Platinum keCurrent Nkwe Anooraq Anglo Platinum Anglo Northam Eastern Platinum Wesizwe Implats Lonmin Stillwater Ridge 0 40 80 120 160 200 240 Resource (Moz) 40x Stillwater
Wesizwe 1 20x Eastern Platinum Nkwe Current
For personal use only use personal For Ridge Nkwe Pro-Forma Anooraq 0x 0 50 100 1 Pro-forma capital structure, target attributable resource of 50Moz 4PGE 2 Current capital structure, current JORC compliant resource of 20Moz 4PGE
Source: Company websites and announcements Note: Nkwe’s attributable ounces are based on an independent SRK Target Mineralisation Report Xstrata bid for Lonmin
Value of a Bushveld PGM Oz Growth Profile (US$M)
Xstrata offer provides a transparent $3,000m $2747m independent valuation of producing $2,500m Bushveld assets $2198m $2,000m Xstrata’s bid for Lonmin implies a takeover value of US$54.9/PGM resource oz $1,500m Xstrata/Lonmin multiple implies a rerated $1,000m 1 enterprise value of US$2,747m for Nkwe Value (US$m) Enterprise $500m assuming the targeted attributable $114m $0m mineralisation is achieved or US$2,198m2 (Pro-Forma) Rerated Nkwe Aquarius Northam (Current) Rerated Nkwe Eastern Platinum Stillwater Platinum Australia Anooraq Wesizwe Ridge (Current) Nkwe post development based on the current JORC compliant resource Development of the Xstrata alliance is the first step to providing the impetus for a 2
rerating of Nkwe 1 For personal use only use personal For
1 Pro-forma capital structure with LMI takeover resource multiple applied, target attributable resource of 50Moz 4PGE 2 Current capital structure with LMI takeover resource multiple applied, current JORC compliant resource of 20.4 Moz 4PGE
Source: Company websites and announcements Note: Future Nkwe’s attributable ounces are based on an independent SRK Target Mineralisation Report. A PGM Company of Scale
Production of 500,000 oz per annum would elevate Nkwe into the ranks of the largest platinum producers in South Africa1 based on 2007 production Nkwe’s strategic partner in Xstrata may potentially be the third largest producer in South Africa assuming the proposed Lonmin takeover proceeds
Pro-forma 2007 Actual PGM Production by Company
Anglo Platinum 4155
Implats 3860
Lonmin / Xstrata (inc. Nkwe eastern limb) 2026
Lonmin 1443
Xstrata (inc. Nkwe eastern limb) 583
Aquarius 500
Nkwe (attributable) 500
Northam 324
For personal use only use personal For 0 500 1000 1500 2000 2500 3000 3500 4000 4500
PGM Production (Koz)
1 Attributable production excludes Xstrata’s 50% interest 2 Anglo Platinum production excludes purchase of metals in concentrate A PGM Company of Scale
At 500,000 oz per annum PGM each, the proposed mines would be the fifth largest producing PGM assets in South Africa based on 2007 production rates
Pro-forma 2007 Actual PGM Production by Asset
Im p a la 1055
Marikana - Lonmin 752 Rustenburg 665 Amandelbult 577
Nkwe / Xs t ra t a "No rt h M ine " 500 Nkwe / Xs t ra t a "S o ut h M ine " 500
Kroondal 440 Northam 300 Unio n 263
Mogalakwena 164 Marikana - Anglo / Aquarius 155
Everest 99 Bafokeng Rasimone 97
Motolo 95 Pandora 91 Crocodile River 86
Modikwa 59 For personal use only use personal For 0 200 400 600 800 1000 1200 Attributable PGM Production (Koz)
Notes • Anglo Platinum / Aquarius mines subject to pool and share agreement • Pandora - Lonmin / Anglo Platinum own 42.5% each, with 7.5% held by BEE interests • Eastplats owns 69% of Barplats, which in turn owns Crocodile River • Motolo is an Anglo Platinum / Xstrata 50:50 JV Corporate Strategy
Complete feasibility study on the core projects through Xstrata Joint Venture Develop new mines to ultimately produce 1 Moz pa 4PGE Pursue vertical integration by developing independent Smelting/ Refining capacity “Grow the footprint” - Corporate deals on other and/or adjacent projects
Mining Complex Smelting Complex Refining Complex
1 million ounces of PGM’s per annum For personal use only use personal For Investment Summary
Excellent asset position Experienced management and directors Strong strategic partner in Xstrata – Fully funded to BFS and future production (Xstrata option) Plan to develop full exposure to entire PGM value chain – Combination of UG2 and Merensky gives increased bi-product yield of chrome, nickel and copper – excellent smelting/refining dynamics Working on potential “early” production strategy Fully compliant with SA legislation Well positioned to consider corporate activity now and in future
For personal use only use personal For Strong commodity fundamentals Contacts
Contacts SOUTH AFRICA Tel: +27 (0) 11 445 2161 Name: Shammy Luvhengo Fax: +27 (0) 11 445 2166 Title: Exec GM: Business Development and Investor Relations P.O. Box 11585 Tel No: +27 84 580 9868 or +27 11 445 2161 Vorna Valley E-mail: [email protected] Midrand 1686 Name: Maredi Mphalele Republic of South Africa Title: Managing Director IMS PARK Tel No: +27 83 346 1342 or +27 11 445 2161 No. 6 Eastern Services Road E-mail: [email protected] Eastgate Ext 3 Sandton Name: Peter Landau Johannesburg Republic of South Africa Title: Director Tel No: +44 774 757 7815 or +61 407 751 115 LONDON E-mail: [email protected] Tel: +44 (0) 207 389 8190
Website: www.nkweplatinum.com For personal use only use personal For