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TRANSCRIPT
Cummins Range Rare Earth Oxide Project –part of a technological future
David Hatch – Managing DirectorNavigator Resources Limited
www.navigatorresources.com.au
March 2010
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Disclaimer The information contained in this presentation is not financial product advice. The presentation is for
information purposes and is of a general and summary nature only. It does not constitute an offer. NavigatorResources Limited (Navigator) gives no warranties in relation to the statements and information in thispresentation. Investors should seek appropriate advice on their own objectives, financial situation and needs.
This presentation contains certain statements which may constitute “forward-looking statements”. Suchstatements are only predictions and are subject to inherent risks and uncertainties which could cause actualvalues, performance or achievements to differ materially from those expressed, implied or projected in anyforward looking statements.
Navigator disclaims any intent or obligation to update publicly any forward-looking statements, whether as aresult of new information, future events or results or otherwise. Investors are cautioned that forward-lookingstatements are not guarantees of future performance and investors are cautioned not to put undue relianceon forward-looking statements due to the inherent uncertainty therein.
This presentation does not constitute or form any part of any offer or invitation to sell or issue, or anysolicitation of any offer to purchase or subscribe for, any securities in the Company nor shall it or any part of it,or the fact of its distribution, form the basis of, or be relied on in connection with, any contract orcommitment or investment decision relating to any securities in the Company. Any decision regarding anyproposed subscription for securities in the Company must be made solely on the basis of information on theCompany that is publicly available.
This presentation does not constitute an offer of securities for sale.
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Corporate Overview
NAV Share Price March 2009 - March 2010 (A$)
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ASX Code: NAV
Ordinary Shares 392,599,036
Market Capitalisation ($0.145) A$56..9 million
12mth High-Low A$0.40-0.115
Cash (31 December 2009) A$18.5 million
Debt Drawn A$9.0 million
Debt Undrawn A$7.0 million
Hedging Nil
ASX Code: NAVO
Listed Options 121,458,787
Market Capitalisation ($0.055) A$6.7 million
Unlisted Options 30,255,882
Gold
TerbiumFor
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Production-ready Board of Directors Dr Allan Trench – Non-Executive
ChairmanOver 20 years geology/businessmanagement experience in the Australianresources industry. Experience with CRUGroup, WMC, Barrick, Woodside andMcKinsey & Company.
David Hatch – Managing DirectorAccomplished track record in management,optimisation & development of pre-dominantly gold mining assets in Australia,Indonesia, PNG & West Africa. Former MDKingsrose Mining, Westonia Mines & AbossoMinerals.
Gordon Galt – Non-Executive DirectorMining engineer with extensive experiencein project, corporate and funds managementand advisory. Former MD Newcrest Mining.Current director Taurus Funds Management.
Ian Macpherson – Non-Executive DirectorChartered accountant with 30 yearsexperience, specialising in corporate advice,equity and debt raising and compliance.Established Ord Partners in 1990.
John Shipp – Non-Executive DirectorMining engineer with 40 years ofinternational experience. Ex-PresidentBarrick Gold Australia-Africa operations andGM of KCGM and Boddington.
Matt Healy – Non-Executive DirectorAn experienced commercial and contractsmanagement executive for an internationalproperty development, construction andasset management company.
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Experienced Executive Management Group
Trevor Cook –Chief Operating Officer30 years multi-commodity projectexperience with Ashton Gold,MacMahons, BGC, ConsolidatedMinerals and View Resources.
Michelle Simson –Administration ManagerExperience in the WA gold anduranium sectors, both in site andcorporate roles.
Gerry Kaczmarek –CFO & Company SecretaryAccountant and economist with 30years resources experienceincluding 10 years as CFO/CompanySecretary of Troy Resources.
Bernie Kirkpatrick –Exploration Manager42 years multi-commodityexploration and mining experiencethroughout Australasia.
David Hatch – Managing Director
Ian Bignell – General Manager Bronzewing OperationsMining engineer with wealth of management experience; previously at Argyle Diamond Mine, Bulyanhulu Gold Mine in Tanzania, Gympie in Queensland and Emperor Gold Mines in Fiji.
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Diverse portfolio of Australian mining assets
Leonora (Au)
Bronzewing (Au)
Cummins Range (REE)
Laura River (Ni-Cu-PGM)
Eastman (Zn-Pb-Ag-Cu)
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Cummins Range is part of a WA-focused portfolio
* Refer Reserves & Resources Table as appended
Cummins Range an unusual but exciting Rare Earth Element opportunity
A variety of development and further exploration possibilities
Current resource of: 72,000t REO at 1.72%
Bronzewing production targeted for April 2010
Designed to produce 100,000oz Au per annum
9.27Mt of ore at 1.9 g/t Au to be mined
Total resource of: 850,000oz Au at 2.1 g/t*
Leonora trial mining to occur Feb-June 2010
Leonora potential to produce up to 50,000oz Au/yr in full production
Total resource of: 750,000oz Au at 1.9 g/t *
NAV is, in the short term, focussing on becoming a gold producer
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Rare earths introduction
Cummins Range History Location Geology Resource Competitive profile
Cummins Range – an important project for the world’s technological future
Cummins Range – exciting rare earth opportunity
Small image: Terbium – http://images-of-elements.com; Large image: Cummins Range – Navigator Resources
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Which are the rare earth metals?
“Heavy” REE
Europium
Gadolinium
Terbium
Dysprosium
Holmium
Erbium
Thulium
Ytterbium
Lutetium
“Light” REE
Lanthanum
Cerium
Praseodynium
Neodynium
Promethium
Samarium
Other REE - Scandium and Yttrium
Sc21
Y39
La57
Ce58
Pr59
Nd60
Sm62
Eu63
Gd64
Tb65
Dy66
Ho67
Er68
Tm69
Yb70
Lu71
Image: Periodic table – http://www.atomicmath.com
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Rare earth metals are used in key technologies
Magnets:DVD, CD & MP3 players, hybrid vehicles, wind turbines
Phosphurs:CRT and LCD TVs and screens, MRI machines
Metal alloys:Hybrid cars, aerospace, military hardware, high performance sports equipment, superconductors, computer memory
Glass, ceramics, polishes:CRT, LCD & plasma TVs/screens, telescopes, camera lenses, x-ray tubes, ceramic capacitors, laser
Other (including catalysts):Fluorescent bulbs, catalytic convertors, oil refining, neutron capture, cancer treatment, nuclear batteries in spacecraft
Source: IMCOA
38%
32%
13%
9%
8%
REO demand by value (2008)
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Rare earth metals – “green” applications
38%
32%
13%
9%8%
Hybrid cars (neodymium & dysprosium)• Rare earth magnets used in batteries and other components requiring small, lightweight motors
Wind turbines(neodymium & dysprosium)• Rare earth magnets used in motor, where lightweight is important due to the position of the motor on top of a tall, thin support, subject to high winds
Fluorescent lights(terbium, europium, gadolinium & yttrium)
• Combination of red, blue & green phosphors to make white light that is more efficient than incandescent bulbs
Non-toxic pigments(lanthanum & cerium)
• Non-toxic replacements to cadmium and other heavy metals in red-orange pigments
Top left: Hybrid Toyota Prius - www.toyota.co.uk ; Top right: Energy efficient light bulb; Centre: Wind turbine - dan at FreeDigitalPhotos.net; Bottom left: rechargeable batteries - www.amazon.com; Bottom right: cerium pigment - www.nelionexports.com/chemicals.html
Rechargeable batteries(lanthanum)
• Non-toxic replacements to cadmium and other heavy metals in red-orange
pigments
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Rare earth metals – military applications
38%
32%
13%
9%8%
Underwater mine detectorsAircraft components
Jet fighter engines
Sources: Navigator Resources & Great Western Minerals - http://www.gwmg.ca/images/file/2009-nov-27-military-applications.pdf
Electronic countermeasures
Anti-missile defence
Range findingSatellite systems
Missile guidance
Neodymium
Praseodymium
Samarium
Dysprosium
TerbiumRare earth magnets
Unmanned predator drones
Tomahawk cruise missiles
Guided artillery projectiles
Bunker buster bombs
Smart bombs
Rechargeable batteries
Jamming devices
Stryker armoured vehicle Avionics
Advanced lighting
Computer displays
Fibre optics
Lasers
Europium
Yttrium
Electric drive motors
Actuators
Night vision
Radar
Sonar
Lanthanum
Lutetium
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All rare earth oxides are highly valuable
0%100%200%300%400%500%600%
2004 2005 2006 2007 2008 2009
Cu Price Change Nd Price Change
0%
100%
200%
300%
400%
2004 2005 2006 2007 2008 2009
Cu Price Change Dy Price Change
Rare Earth Metal Oxide Price (Oct 2009)
Lanthanum US$ 4.90 /kg
Cerium US$ 4.00 /kg
Praeseodymium US$ 14.50 /kg
Neodymium US$ 14.50 /kg
Samarium US$ 4.75 /kg
Europium US$ 465.00 /kg
Gadolinium US$ 6.00 /kg
Terbium US$ 360.00 /kg
Dysprosium US$ 110.00 /kg
Yttrium US$ 10.00 /kg
Copper (metal) US$ 6.29 /kg (US$ 6,286.77 /t)
Silver (metal) US$ 553.94 /kg (US$ 17.23 /oz)
Gold (metal) US$ 33,564.60 /kg (US$ 1,043.51 /oz)
Price sources: REOs – Metals Pages; Copper – LME; Precious – LBMA
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Rare earth metals are not that rare – sort of!
USGS chart from “Rare Earth Elements – Critical Resources for High Technology”, 2002
Rare earth metals are not the least common natural elements
More common than the precious metals
Some more common than the base metals
However – they rarely form discreet “deposits”
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REOs occur in a diverse range of geologies
Carbonatite associated:
eg. Mountain Pass, USA and
Nolan’s Bore, Australia
Lateritic carbonatites:
eg. Mt Weld and Cummins
Range, Australia
Hydrothermal Fe-REE:
eg. Bayan Obo, China and
Olympic Dam, Australia
REE lateritic clays:
Only found in southern
China
Placer deposits:
eg. India, Brazil, Australia,
USA, South Africa, Sri Lanka
Alkaline felsics:
eg. Kola Peninsula, Russia and
Brockman, Australia
Pegmatite/quartz/fluorite :
eg. Australia and Karonge,
Burundi, Naboomspruit, RSA
Skarns:
eg. Mary Kathleen, Australia
Top left: Mountain Pass – USGS; Top mid-left: Cummins Range – Navigator Resources; Top-right: Bayan Obo – www.chinapicturespub.com; Top right: Lateritic clay, China – New York Times; Bottom left: Monazite placer – IHC Merwede; Bottom mid-left: Kovdor, Kola Peninsular – NHM, UK; Bottom mid-right: Evje-Iveland – www.smartminerals.com; Bottom right: Mary Kathleen – National Archives, Australia
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Traditionally rare earth demand reacts to supply
Now classic USGS chart from “Rare Earth Elements – Critical Resources for High Technology”
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Initially rare earth metals genuinely “rare” From their discovery (1794-1907) through to 1960s rare
earth elements were unusual and only mined as part of monazite placers
Only the relatively more common light rare earth elements had any uses
Monazite contains large amounts of thorium which breaks down into radioactive radium
Only countries with limited environmental standards could effectively mine monazite
Heavier rare earth metals were mainly scientific curiosities
Chart from “Rare Earth Elements –Critical Resources
for High Technology” –
USGS, 2002
Image of monazite placer dredge in Brazil
from IHC Merwede
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Mountain Pass stimulated rare earth innovation
Mountain Pass, California discovered in 1949, started in 1965 – invention of colour TV stimulated demand for europium and made the deposit economic (europium used for red phosphurs – still no substitute known!)
But main effect was to stimulate rare earth demand
Ready availability of cheap rare earth metals drove innovation
Mountain Pass mined light and middle rare earth metals
Heavy rare earth metals still unusual at this stage
Chart and image of
Mountain Pass from
“Rare Earth Elements –
Critical Resources for High
Technology” – USGS,
2002
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1990s saw Chinese REO production take off
Bayan Obo, Inner Mongolia, is world’s largest producer of REOs (mainly light REEs) – mined as a by-product of iron at very low cost
REE clays also mined at very low cost –artisanally
Contain heavy rare earth elements
Thus demand for heavy REEs increases
Chinese mines stimulated heavy REE demand
Image of abandoned Chinese REE clay mine (Thomas Lee, New York Times) and Bayan Obo (www.chinapicturespub.com)
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Mountain Pass, USA, stopped mining in 2002
From 2002-2007 China mined over 95% of rare earth oxides!
China began exporting less rare earth oxides in 2007
Partly because consuming more domestically
Partly due to environmental concerns over artisanal mining reducing production
China now mines nearly all rare earth oxides
Update of classic USGS rare earth mined production chart with most recently available USGS data (up to 2008) from New York Times article “Earth-friendly elements mined destructively” – 25/12/09
Mountain Pass closure
Chinese production
peaks?
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There are very few rare earth projects globally
Cummins Range
Mount Weld
Thor Lake Kvanefjeld
Hoidas Lake
Bokan Mountain
ZeusMountain Pass
Mianning
Bayan Obe
Nolans
Strange Lake
Sarfartoq
Yangibana
Kangankunde
Wigu Hill
Country with REE mine project(s)
Non-REE mining country
REE mining country
REE mine
REE mine project
Cummins Range REE mine project
Only around 200 REE projects worldwideLess than 20 advanced REE projects globally
Only 4 major advanced REE projects in AustraliaCummins Range is one of them
Steenskampkraal
Deeps Sands
Benjamin River
Douglas River
Data: Intierra & USGS
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There is a potential rare earth supply bottleneck ahead
China is already warning of export restrictions
Demand for rare earth metals is drastically increasing
Important that REO mines are developed outside China to maintain supply
Australia is likely to be key REO mining country –
Good REO deposits, with required mining and financial expertise to exploit them
Strong mining history and culture, combined with fantastic mining infrastructure
Nearest major mining country to major REO consumers in China and Japan
Cummins Range is one of the few REO projects in Australia...
Important for REO mines to be developed outside China
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A brief history of Cummins Range
2002-6 2007 2008 20091978
Discovered by CRA Exploration
Non-JORC resource of 3-4Mt @ 2-4% REO (60-
160kt of REO)
Part of NAV IPO (2003)
Successful drill programme
Strong aircore intersections announced
Good RC intersections announced
Deposit confirmed as a laterite with potential for enrichment (eg. Mt Weld)
Preliminary JORC resource
announced
Independent JORC resource
announced
Independent valuationA$10-20 million
69Kt REO, 398kt
phosphate & 765t U3O8
72Kt REO, 459kt
phosphate & 780t U3O8
Deposit confirmed to have low thorium levels reducing
environmental risk
Aerosurveying by NAV (2002)
Review of data by NAV shows high
grade zone suitable for delineation
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120km to the Great Northern Highway running from Port Hedland to Wyndham
130km SW of Halls Creek town and airstrip
550km by air and 700km by road to major town, seaport and airport of Broome
850km by air and 1,100km by road to international hub airport, seaport and city of Darwin
Several operating mines already in the area including Coyote Au, Savannah Ni-Cu and Argyle diamond mines
Cummins Range is in a favourable location
Cummins Range
Halls Creek
Darwin
Northern Australia is the nearest future REE region to Japan (5,500km) and China (4,500km)
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2007-8 drilling showed a high grade starter zone
Cummins Ridge – Best drill intersections (2007)Drillhole Width Grade Depth
NRC038 17 m 5.27 % REO 42 m
NRC058 29 m 4.57 % REO 27 m
NRC038 20 m 5.55 % REO 2 m
NRC059 33 m 382 ppm U3O8 24 m
NRC066 20 m 919 ppm U3O8 73 m
NRC058 35 m 962 ppm U3O8 27 m
Deep oxidation of carbonatite has produced physical concentration of resistate minerals, especially apatite and monazite
Cross section of Cummins Range showing horizontal mineralisation within a regolith overlying a
carbonatite diatreme
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Inferred resource containing:
72,000t of rare earth oxides
460,000t of phosphate
780t of uranium oxide
Mainly light rare earth oxides
Low thorium levels
Cummins Range Inferred Resource – September 2009
Tonnage (Mt) Cut-off grade REO (%) P2O5 (%) U3O8 (ppm) Th (ppm) Total REO (Kt)
4.17 1.0 % 1.72 11.0 187 41 71.7
Cummins Range – a developing REO resource
95.6%
Ratio of REO in resource (%)
LREO
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Cummins Range Inferred Resource – September 2009
MetalOxide Price
(US$/kg)Proportion in resource (%)
Value of resource oxide blend
(US$/kg)
Lanthanum 4.90 27.3 1.34
Cerium 4.00 47.7 1.91
Praseodymium 14.50 4.8 0.70
Neodymium 14.50 15.2 2.20
Samarium 4.75 1.6 0.08
Europium 465.00 0.4 1.86
Gadolinium 6.00 1.0 0.06
Terbium 360.00 0.1 0.36
Dysprosium 110.00 0.5 0.55
Yttrium 10.00 0.0 0.00
Other 0.00 1.4 0.00
Total 100.0 9.05
Cummins Range resource is a competitive blend
0 5 10 15 20
Thor Lake
Lake Hoidas
Dubbo
Mt Weld
Nolans
Cummins Range
Kvanefjeld
Steenkampskraal
Bayan Obo
Mountain Pass
Bear Lodge
Value of resource oxide blend (US$/kg)
Oxide prices: Metals Pages; Resource data: Green Leader Cummins Range Rare Earth Project – 29 October 2009
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Most likely development path would be a bulk, low-grade operation with some on-site concentration through flotation, heavy media separation and magnetic methods.
By-product uranium and/or phosphate may also contribute.
Cummins Range – potential production
Production potential of advanced REE projects
Project Resource StatusProduction target
(REO/yr)
Mt Weld12.2Mt @ 9.7% REO
Construction10,500t ramping
up to 21,000t
Mountain Pass13.0 Mt @ 8-
9% REOProduction &
expansion
Currently 2,000t expanding to
10,000-20,000t
Nolans Bore18.6Mt @ 3.1% REO
Feasibility5,000t ramping up
to 20,000t
Kangankunde2.5 Mt @ 4.2% REO
Advanced exploration
5,000t
Hoidas Lake1.4Mt @ 2.6% REO
Advanced exploration
1,000-2,000t
Cummins Range4.2Mt @ 1.7% REO
Advanced exploration
?
Thor Lake14Mt @ 1.2%
REOAdvanced
exploration1,000-2,000t
Sources: Navigator Resources; Green Leader Cummins Range Rare Earth Project; Company websites
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Cummins Range – further along the pipeline
2 mines
4 projects
6 projects
17 projects (inc. Cummins Range)
49 projects
120 mines/projects
Of 198 rare earth operations on Intierra
only 29 are at advanced exploration
status or further
Operating
Feasibility Study
Pre-feasibility orScoping Study
Advanced Exploration
Exploration
Grass roots
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Cummins Range is further developed than most rare earth projects
Potential for high grade, direct shipping starter zone
Low stripping ratio and by-product U3O8 & phosphate will lower operating costs
Oxidised nature of the deposit will lower beneficiation costs
Low thorium levels reduce the chances of environmental problems
Potential to further expand the resource:
Drilling stopped in the deposit’s best grades and widths to the north-west
Further drilling is also required to the north
Other prospects within the diatreme perimeter are effectively undrilled
Cummins Range – low risk rare earth potential
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Demand for rare earth metals is increasing
Rare earth metals have important environmental and strategic military applications
Rare earth oxide supply is dominated by China – exports may be restricted
We are potentially approaching a rare earth supply bottleneck
Critical that rare earth mines are developed outside China
Australia has the deposits, infrastructure and expertise to be a key rare earth producer
Australia is the closest traditional mining country to REO markets in Japan & China
Cummins Range is one of the few advanced stage rare earth projects in Australia
Cummins Range represents a low risk opportunity to develop a rare earth mine
Cummins Range – part of a technological future
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Navigator Gold Reserves & ResourcesBronzewing Reserves – July 2009
Mt g/t Au oz
Probable 6.324 1.9 385,000
Total 6.324 1.9 385,000
Bronzewing Resources* – July 2009
Mt g/t Au oz
Indicated 10.03 2.0 640,000
Inferred 2.53 2.6 210,000
Total 12.56 2.1 850,000
Leonora Resources – September 2009
Mt g/t Au oz
Indicated 8.27 2.0 539,000
Inferred 4.13 1.6 211,000
Total 12.40 1.9 750,000
*Bronzewing resources are inclusive of reserves
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Sections of information contained within this report that relate to Exploration Results, Mineral Resources or OreReserves at the Cummins Range Rare Earth Project, Bronzewing Gold Project and Leonora Gold Project are based oninformation reviewed by Bernie Kirkpatrick who is a full-time employee of Navigator Resources Limited and aMember of the Australasian Institute of Mining and Metallurgy. Bernie Kirkpatrick has sufficient experience whichis relevant to the style of mineralisation and type of deposit under consideration and to the activity which he hasundertaken to qualify as a Competent Person as defined in the 2004 Edition of the “Australasian Code for Reportingof Exploration Results, Mineral Resources and Ore Reserves”. Bernie Kirkpatrick consents to the inclusion in thisreport of the matters based on his information in the form and context in which it appears.
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