Download - Wings Dec 09 Pea Ridge Presentation
1/4/12 4:35 PMDecember 2009
Page 1 of 19http://webcache.googleusercontent.com/search?q=cache:_-TH7bYftPAJ:…rporate_Presentation-_December_2009.pdf+&cd=2&hl=en&ct=clnk&gl=us
This is the html version of the file http://www.wingsironore.com/Wings_Enterprises-_Corporate_Presentation-_December_2009.pdf.Google automatically generates html versions of documents as we crawl the web.
Page 1
1
December 2009
Page 2
Disclaimer
1/4/12 4:35 PMDecember 2009
Page 2 of 19http://webcache.googleusercontent.com/search?q=cache:_-TH7bYftPAJ:…rporate_Presentation-_December_2009.pdf+&cd=2&hl=en&ct=clnk&gl=us
2
November 2009
The enclosed materials are informational only and are not intended to constitute any part of an offering of or solicitationof an offer to purchase any securities by Wings Enterprises Inc. and/or its affiliates (the “Company”). Such materialsare intended to provide general information about the Company so that recipients may evaluate the merits ofparticipating in the Company’s proposed financing transaction. Offers and sales of any securities by the Company willonly be effected through a purchase agreement having terms acceptable to the Company, its agent and participants.
The enclosed materials contain certain projections which are based upon numerous assumptions, and in some casesrely on information from third parties. While we have attempted to present such information as accurately as possible,we have not independently verified all such information. Accordingly, interested persons are encouraged to seek moreinformation to verify the accuracy of any such information.
These materials contain certain forward-looking statements within the meaning of the Private Securities LitigationReform Act of 1995 (the “1995 Act”). Although the Company is not afforded the protections of the 1995 Act with respectto these forward-looking statements, they are provided under the common law counterpart to the 1995 Act, the so-called“bespeaks caution” doctrine (the “Doctrine”). Such statements are made in good faith by the Company pursuant to theDoctrine, and are identified as including terms such as “may,” “will,” “should,” “expects,” “anticipates,” “estimates,”“plans,” or similar language. There are factors that could cause actual results to differ materially from those containedin any forward-looking statement made by or on behalf of the Company, including, without limitation, its ability to retainkey management personnel, general economic and political conditions and more particularly conditions affecting theiron ore market, our ability to successfully finance the development of our sites, and risks generally associated with acompany our size, including the effects of having limited resources, capital and inadequate sales, and general exposureto litigation. The Company further cautions that such factors are not exhaustive or exclusive. The Company does notundertake to update any forward-looking statement which may be made from time to time by or on behalf of theCompany.
Page 3
Wings Enterprises at a Glance
Company Type: • Private Co.
Principal Asset: • Pea Ridge Iron Mine(100% interest)
• Producer for 30 yrs
Location Of Mine: • Sullivan, Missouri
! Brownfield iron ore development company that owns the Pea Ridge Iron Mine inMissouri with one of the most prospective high grade iron ore deposits in theworld
1/4/12 4:35 PMDecember 2009
Page 3 of 19http://webcache.googleusercontent.com/search?q=cache:_-TH7bYftPAJ:…rporate_Presentation-_December_2009.pdf+&cd=2&hl=en&ct=clnk&gl=us
Resources: • 150M tons Iron OreResource (+57% Fe)
• High Grade
Alberici Constructors: • Revenues of $1.3 B
All figures throughout the presentation are in US$ unless noted otherwise.
3
Page 4
4
Investor Highlights
Redevelopmentof Past
Producing IronOre mine
State andFederal
Support forRedevelopment
World ClassNorth AmericanStrategic BasedMineral Deposit
Unique Accessto US EAF
Market
High GradeScalable IronOre Deposit
Proximity,Transportation& Infrastructure
Advantage
30 yrsHistoric
Production
150 MT Cont.57% Fe +
significant upsidepotential
FullyPermitted
& PotentialSubsidies
One ofRichest
REEDeposits
Eligible forFederal &
StateSubsidies
Page 5
1/4/12 4:35 PMDecember 2009
Page 4 of 19http://webcache.googleusercontent.com/search?q=cache:_-TH7bYftPAJ:…rporate_Presentation-_December_2009.pdf+&cd=2&hl=en&ct=clnk&gl=us
On the Move
Large ScaleProduction
Initial PublicOffering
Developing HighGrade Iron Mine
Established RegionalInfrastructure
• Q1-2013 start-up
• 4 MT 70% Concentrate
• Potential to upgrade to pigiron (98% Fe)
• 6 – 12 months
• Construction financing
• Fully permitted
• Significant potential for byproducts production (REE)
• Mississippi River
• Rail and road access
• Pipeline proposed
5
Page 6
Management
James KennedyPresident & Owner- Designed and constructed the iron ore beneficiation
facility at Pea Ridge- Former portfolio manager for Kennedy Capital
Management with AUM of $100M- 13 years as a securities research analyst and marketing
representative funding over $300M in early 1990s
Laurence M. NuelleChief Geologist
Advisors During Feasibility Study
Terry GoodingFormer Senior Mining Manager for Pea Ridge
Larry TuckerFormer Chief Underground Mine Manager andActing Geologist for Pea Ridge
David JamesFormer Senior Mine Engineer for Pea Ridge
Management & Advisors
1/4/12 4:35 PMDecember 2009
Page 5 of 19http://webcache.googleusercontent.com/search?q=cache:_-TH7bYftPAJ:…rporate_Presentation-_December_2009.pdf+&cd=2&hl=en&ct=clnk&gl=us
6
- Transitioning to become the company’s full timegeologist
- Completed extensive work at Pea Ridge under theUSGS, specifically relating to the rare earth deposit
- Will coordinate the laboratory and processing for theproduction of rare earth concentrates from the Apatiteand the heavy rare earths from the breccia pipes
Martin SchaperInterim CFO
Bob NiemeierInterim COO
Tom GallagherFormer Senior Personnel and Safety Officerfor Pea Ridge
Page 7
All the Ingredients for Success
High Grade Underground Resource
Fully Permitted Brownfield Operation
Extensive Development Upside
Infrastructure & Geographic Advantage
Strategic Mineral Deposits / By-Products
Near Term Cash Flow from Tailings Development
1
2
3
4
5
6
1/4/12 4:35 PMDecember 2009
Page 6 of 19http://webcache.googleusercontent.com/search?q=cache:_-TH7bYftPAJ:…rporate_Presentation-_December_2009.pdf+&cd=2&hl=en&ct=clnk&gl=us
7
Page 8
8
Resource Estimates are not 43-101 Compliant
Source: Pincock Allen & Holt, Bo Arvidson Consulting and multiple USGS reports and assays
Resources Summary
! Significant resource upside open at depth and along strike
Metal Contained TonsGradeTons
Metal Contained TonsGradeTons
75.3k5.4%1.4MREO from Apatite
1.4M7.0%Phos. / Apatite – ~30% P2O5
1.0M5.0%Iron Ore – Fe3O4
4.8M24.0%20MIron Ore – Fe2O3
Recoverable Surface Resources – Tailings Lake
72k12%600kREO
Rare Earth Oxide Breccia Pipes
55k Conc.5.0%1.1MRare Earth
Underground Crude Ore ResourcesMetal Contained TonsGradeTons
Iron Ore 150M + 57.0% 86.4M
Phosphorus 0.7% 1.1M
Pyrite 0.5% 75M
Page 9
! Discovered in 1950
! Originally a partnership between Bethlehem Steeland St. Joe Land Company in 1957
! 30 million tons of pellets, fines heavy media and
Pea Ridge Iron Mine – Fully Permitted BrownfieldProducer
1/4/12 4:35 PMDecember 2009
Page 7 of 19http://webcache.googleusercontent.com/search?q=cache:_-TH7bYftPAJ:…rporate_Presentation-_December_2009.pdf+&cd=2&hl=en&ct=clnk&gl=us
9
other iron products between 1964 and 2001! Shift to specialty products in 1990
! Shut down in 2001 due to falling iron ore pricesand strategic investments
! Iron ore reclamation began in Fall of 2006
! Current production of 30 tons per hour at 70% Fefrom 200k ton surface reserve
Page 10
Alberici Constructors, Inc
! Established in 1918
! 2008 Revenues of $1.3 Billion
! Ranked 47st Largest Contractor byEngineering News Record (ENR)
! Headquarters in St. Louis, MO, withregional offices in Detroit, MI; Atlanta, GA;Toronto, Canada; and Irapuato, Mexico
Design and Construction Partner
1/4/12 4:35 PMDecember 2009
Page 8 of 19http://webcache.googleusercontent.com/search?q=cache:_-TH7bYftPAJ:…rporate_Presentation-_December_2009.pdf+&cd=2&hl=en&ct=clnk&gl=us
10
Page 11
11
Pea Ridge Mine
Project Overview
44 Mile Underground
Pipeline
New Processing &
Bulk Shipping Port
Page 12
Pea Ridge – Profile of a Successful Mine
Iron Ore Resource 150 MT
1/4/12 4:35 PMDecember 2009
Page 9 of 19http://webcache.googleusercontent.com/search?q=cache:_-TH7bYftPAJ:…rporate_Presentation-_December_2009.pdf+&cd=2&hl=en&ct=clnk&gl=us
12
Mine Life 30+ years
Annual Production 4 MTPA
Cash Operating Costs per Ton (excluding potential by-products) US$47.00
Iron Ore Grade 57%
*Pre Production Development Costs *$390 M
*Includes mine development costs of $180M; Surface facility costs of $150M; and Pipeline System / Dewater costs of $60M
*Full mine development will require an additional $150M over the next 10 years.
Page 13
Highly Profitable – Even at Current Prices
Iron ore $ per Ton
$91.00
$2.102
$11.50
$33.40
$47.001
HighlyProfitable
Hoisted cost per ton
70% Fe Concentrate
Pipeline to River
~50% margins before by-productsfrom Fe Concentrate
1/4/12 4:35 PMDecember 2009
Page 10 of 19http://webcache.googleusercontent.com/search?q=cache:_-TH7bYftPAJ…rporate_Presentation-_December_2009.pdf+&cd=2&hl=en&ct=clnk&gl=us
13
Current Prices Our Cost3
1 Source: Marston Engineering report dated September 9, 2009
2 Includes Dewatering cost at River Site
3 Assumes hoisting 6 million tons to produce 4 million tons of +70% concentrate and recovery of all hoisted Hematite,approximately 30% of total dilution, via tailings lake reclaim facility
Page 14
14
Upside Potential from By-Product Revenues1
1 Does not factor in production costs or additional Capex required to produce these by-products. Process and cost will be determined in theexpected upcoming feasibility study.
5% of phosphorus production15% of hoistedmaterial
0.7% of iron oreMineral Source:
$23.1M$14.0M$4.2MPotential AnnualRevenues
$11,000.00$14.00$100.00Price per Ton
Cerium, Lanthanum, Yttrium,Neodymium, Gadolinium and
Dysprosium
Waste rock frommining
30% P 2O 5 / 5% rareearth oxides
ChemicalComposition
2,100 tons per year1M tons per year42k tons per yearPotential AnnualProduction
Cob Rock Rare Earth OxidesPhosphorusBy-Product
Page 15Redevelopment of Pea Ridge MinePig Iron Technology
1/4/12 4:35 PMDecember 2009
Page 11 of 19http://webcache.googleusercontent.com/search?q=cache:_-TH7bYftPAJ…rporate_Presentation-_December_2009.pdf+&cd=2&hl=en&ct=clnk&gl=us
15
Unit Capacity CostProd. Cost(per FinishedTon)
Kobe ITkm31
System500,000 tpy $200M $220.002
Alternative3 50,000 tpy $20M $200.00
1 Production cost above include market price for iron ore, of $91 (Current spot market price of 65% Fe = $85 [$85/65= $1.30] / $1.30 x 70% Fe =$91)
2Kobe cash cost may be as low as $200 per finished ton based on 70% Fe iron units. Target capacity requires the use of 4 Kobe units
3The “Alternative” technology is not named due to confidentiality agreements
! High grade and quality of Pea Ridge deposit make it uniquely amendable toupgrading using Kobe Steel’s advanced iron ore refining technology
! Value add proposition creating higher value / significantly higher margin production
! Pea Ridge is in advanced discussions with Kobe Steel
Page 16
Profit Centre Revenues Gross Profit
Phase 1: 4M Tons x $91.0
Mine Production $364M $176M
Phase 1 Total $364M $176M
Phase 2: (4M Tons Concentrate)
Pig Iron (3M Tons Concentrate) $800M* $360M
Redevelopment of Pea Ridge MineSignificant Value Potential
1/4/12 4:35 PMDecember 2009
Page 12 of 19http://webcache.googleusercontent.com/search?q=cache:_-TH7bYftPAJ…rporate_Presentation-_December_2009.pdf+&cd=2&hl=en&ct=clnk&gl=us
16
Iron Ore Fines (1M Tons Concentrate) $91M $44M
Phase 2 Total $891M $404M
*3M Tons of Concentrate results in 2M Tons of Pig Iron, sold at $400/Ton FOB/St. Louis
Page 17
17
Infrastructure & Geographical Advantage
! Proximity to End User Market• Direct access to regional steel manufacturing sector via river, rail
and road• Strategically located below all locks and river control devices on
Mississippi
! Transportation & Logistical Advantage from Mississippi(site for port development)
• Large Land Package for development• Access to Union Pacific / BNSF rail lines• Approx. 30 miles from St. Louis
! Strong Government Support• Potential for subsidies at State / Federal level• Eminent Domain• USGS considers Pea Ridge to be a strategic asset
Page 18
1/4/12 4:35 PMDecember 2009
Page 13 of 19http://webcache.googleusercontent.com/search?q=cache:_-TH7bYftPAJ…rporate_Presentation-_December_2009.pdf+&cd=2&hl=en&ct=clnk&gl=us
18
! Majority of iron ore in the U.S.comes from Mesabi Range
! EAF steel mills in U.S. arelocated in South Central U.S.
! All pig iron from the region isimported
! Wings is strategically located tomeet this demand
Geographical / Transportation Advantage
Wings’ Crystal City location iscentrally located below St.Louis and all lock and damcontrol structures
Mesabi Range
Page 19
Wings
3 BOF via Water
EAF
BOF
! Wings has a Logistical Advantage to 22 Steel Mills in the USA
Geographical / Transportation Advantage
1/4/12 4:35 PMDecember 2009
Page 14 of 19http://webcache.googleusercontent.com/search?q=cache:_-TH7bYftPAJ…rporate_Presentation-_December_2009.pdf+&cd=2&hl=en&ct=clnk&gl=us
19
3,000 Miles toBrazil
17 EAF via Water2 EAF via Rail
! The U.S. imports 5million tons of pig iron viaNew Orleans per year
Page 20
20
! Wings has direct access to Union Pacific and BNSF at our River facility, with a regionallogistical advantage to 27 EAF mills
EAF
Wings
Geographical / Transportation Advantage
1/4/12 4:35 PMDecember 2009
Page 15 of 19http://webcache.googleusercontent.com/search?q=cache:_-TH7bYftPAJ…rporate_Presentation-_December_2009.pdf+&cd=2&hl=en&ct=clnk&gl=us
Page 21
21
Mississippi River
Interstate Hwy 55 and 67Union Pacific RailNBNSF Rail
Hwy 55Small Regional Airport
Geographical / Transportation Advantage
Page 22
! Government allocated funding forGreenfield Intra Modal Facility on theMississippi
! Wings will control 2.5 miles of riverfront
! Partnership interest from State of
Intra Modal Port Project
1/4/12 4:35 PMDecember 2009
Page 16 of 19http://webcache.googleusercontent.com/search?q=cache:_-TH7bYftPAJ…rporate_Presentation-_December_2009.pdf+&cd=2&hl=en&ct=clnk&gl=us
22
Missouri and Jefferson County
! “Eminent Domain” legislation inplace
! Financial incentives to be introducedinto legislation
Page 23
! Pea Ridge has the highest value Heavy Rare Earths Distribution of anyPermitted mine in the World
SEGY = Heaviest and Most Valuable (Samarium, Europium, Gadolinium, Yttrium, and Terbium)Nd, Pr, Dy = The Middle REO Values (Neodymium, Praseodymium and Dysprosium)
13%- SEGY
21%- Nd., Pr., Dy.
66%- Ce. + La.
Pea Ridge Iron Mine – Heavy Rare Earths
1/4/12 4:35 PMDecember 2009
Page 17 of 19http://webcache.googleusercontent.com/search?q=cache:_-TH7bYftPAJ…rporate_Presentation-_December_2009.pdf+&cd=2&hl=en&ct=clnk&gl=us
23
Ce + La = The Light, abundant and lowest value (Cerium and Lanthanum)
Page 24
24
! The Breccia Pipes open at depthand potentially continue to 900 ft
• 600k tons @ 12% REO
! Another source of REO is fromthe flotation of apatite from theiron ore in beneficiation process
! REO enriched apatite to be a byproduct
Pea Ridge Iron Mine – Heavy Rare Earths
Page 25
! In discussions with REO/REE companies regarding development, concentrationand sales of rare earth oxides
Pea Ridge Iron Mine – Heavy Rare Earths
1/4/12 4:35 PMDecember 2009
Page 18 of 19http://webcache.googleusercontent.com/search?q=cache:_-TH7bYftPAJ…rporate_Presentation-_December_2009.pdf+&cd=2&hl=en&ct=clnk&gl=us
25
! In communication with the DoD and DoE to develop rare earth elemental alloyrefinery at cost US$500-US$700M
• Requires a grant from the Federal Government
! Pea Ridge rare earth deposit classified as “Strategic and Critical” by the USGS
! Pea Ridge to be a stable rare earth producer, economically insulated from foreignmonopoly pricing pressure
Page 26
Wings Enterprises Inc.Corporate Office
8800 Page AvenueSaint Louis, Missouri 63114-6106
United States of America
CEO - James KennedyTel: (314) 494-1638
COO – Bob NiemeierTel: (314) 733-2329
Website: www.wingsironore.com
Contact Information
1/4/12 4:35 PMDecember 2009
Page 19 of 19http://webcache.googleusercontent.com/search?q=cache:_-TH7bYftPAJ…rporate_Presentation-_December_2009.pdf+&cd=2&hl=en&ct=clnk&gl=us
26