1G O L D | L E A D | Z I N C | S I L V E R | C O P P E R

HERA PROJECT

Implementing a Feasibility December 2014

By: J D Moore

2G O L D | L E A D | Z I N C | S I L V E R | C O P P E R

Content

• History of Hera Project

• Hera’s feasibility

• Implementing a Feasibility

• Hera’s Implementation

• Next steps

• Questions

3

HERA PRJECT- LOCATION

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PROJECT TIMELINE

2001• Discovery of Hera deposit by Pasminco

2003

•Triako purchase Hera from Pasminco's Receivers•Drilling campaign delineates top of New Cobar‐style system

2005•Positive Pre‐Feasibility Study completed on Hera deposit

2006

• CBH take over the Triako in scrip $70million scrip bid•Hera was Triako's primary asset at the time of takeover•CBH significantly increased the size of the Hera resource•Decline permitted

2009

• YTC acquires Hera from CBH for $11m cash + royalty• YTC acquires 80% interest in Nymagee JV for $1m cash

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PROJECT TIMELINE

2010

• YTC undertakes additional drilling to increase resource base at Hera• Develops metallurgical flow‐sheet to maximise gold production

2011• Positive Feasibility Study completed on the Hera Deposit

2012

•Work commences on Boxcut and clearing of site appoved under REF.• Project approval received from the Department of Planning and Infrastructure.

• Funding secured through Glencore for development of the Hera Project and Nymagee Mine 

2013

• Underground mine portal established and Surface Decline commenced• Surface Fan installed  and site offices established•Mine accomodation village completed

2014

• Tailings dam constructed• Processing Plant construction completed• YTC Resources changes name to Aurelia Metals

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Feasibilities

Feasibility:“Is an analysis of a proposed venture, it determines the cost, risk and potential value the venture can add.”The Hera Definitive Feasibility Study (DFS) based on the Resource included an explicit mine and construction design, schedule and cost frame work.cost are around $8 Million ‐ $13 Million

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KEY METRICS – STAGE 1 HERA DEVELOPMENT

Resources 2.44Mt @ 4.1g/t Au, 2.8% Pb, 3.8% Zn and 16.7g/t Ag

Reserves 1.8Mt @ 3.6g/t Au, 2.5% Pb, 3.5% Zn and 15g/t Ag

Initial Mine Life 7.3 years

Estimate Project Revenue (Stage 1 Only) >$500 million

Estimated Average Annual Production* Gold: 39,000ozLead: 7,800tZinc: 10,800tSilver: 154,800oz

Recoveries (average over initial LOM) Gold: 94%Lead: 91%Zinc: 90%

HERA Resource

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A u s t r a l i aA u s t r a l i a

NSW

Hera ResourceSCHEMATIC

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HERA MINE - DEVELOPMENT

Hera Underground development

• Total Development of 12.5km, 50/50 split between Cap and OP

• Development to be Completed by March 2017

• Long ore body (up to 800m strike)

• Ground conditions generally good

• Decline development and capital to be shotcreted while Operating to bolted and meshed

• Development dimensions typically 5mx5.5m for Decline and 5mx5m for level development

• Cablebolts used for intersection support

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HERA MINE - MINING METHODS

• Combination of bottom up and top down open stoping mining methods

• Series of regional pillars developed for stability in top down mining areas (every 100m vertical)

• High grade zone 100% recovery using CRF

• Stopes opened using LHR

• Production rate of 350Kt per annum.

• (<30Kt per month)

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HERA MINE - MINING METHODS

• High grade stopes extracted via retreat method to allow mining along strike without leaving pillars

• Typical widths range from 5-12m and strike lengths of 25-30m

• CRF will be placed in by loader

• Stopes will require extensive cablebolting of hangingwalls for stability

• Production drilling using 76mm blast holes combined with raisebored slots

• Bulk explosive ANFO

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PRIMARY AND SECONDARY CRUSHING - 120 TPH

TERTIARY CRUSHING

GRINDING AND GRAVITY MODULE60% GRAVITY GOLD RECOVERY

FLOTATION CIRCUIT56% LEAD + ZINC BULK CONCENTRATE

91% LEAD RECOVERY90% ZINC RECOVERY

CONCENTRATE LEACH TANKS34% GOLD RECOVERY (TOTAL 94%)

47% SILVER RECOVERY

HERA DEVELOPMENTPROCESS FACILITY

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Implementing feasibilities

• Majority of new projects run over budget and over time

• Average capital over run for projects since 1965 is 20‐60% (mining, energy and construction ‐ USA)

• Mining is  one of the worst culprits• “Resource Capital Funds' Jasper Bertisen 

said the "vast majority" of mining projects have been coming in "way over budget" for the past couple of decades. As a result, RCF now automatically factors in an average cost overrun of 25% when it considers the cost of mining projects.”

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Implementing feasibilities

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Implementing feasibilities

• In a study of 300 + mining projects (by Christopher Hubrich at CIM MES 2014) found that the most common reasons for overrun where– Poor Project / planning quality (quality feasibility)– Economic environment – Bearish markets– Different executive sponsorship, design and build team.

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Hera Implementation

• Hera Implementation Phase  up until Nov 2014 (21 months from start)

• Cost overrun = Actual CAPEX / Planned CAPEX• Pure CAPEX we are 1% under budget and on time• 2% overrun (feasibility included some OPEX)

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surface work / infrastructure

10%

water management3%

mining51%

Process plant construction

29%

TSF5%

camp2%

Hera Implementation

• Horizontal development Underestimation of costs

– Contract management– Box hole / portal

• Ground Support– Unanticipated site conditions– Contract management– Establishing a team

• Material Movement– Planning quality

• Off set by savings in infrastructure and vertical development

– Good Tendering Practice– Planning– Combining Projects

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Hera Implementation• Senior executive oversight 

– Championed by Sean and Dean

• Design team = build team– Maintained same consultants– Same management

• Did not change Scope of the DFS• Well Defined targets / Hurdles

– First production November 2014

• Constant monitoring against DFS• Escalation plans 

– Stop / Review– Re‐asses Plan– Determine additional recourses to achieve plan

• Change Management process– Additional DD for extended Resource– Over achievement on development allowed us to 

continue with one Jumbo instead of the planned 2.– Changes to the standard ground support – helped 

bring costs under control

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0

200

400

600

800

1000

Metres/ $ per m

etre

Shotcrete and Mesh Total Cost By Month

Actual metres

Actual $/m

Budget m

Budget $/m

Hera Implementation

0

200

400

600

800

1000

Jun‐14 Jul‐14 Aug‐14 Sep‐14 Oct‐14 Nov‐14

Ground support installed vs. Budget 

Total actual/m

Total budget /m

this excludes stope Cable bolts

• Underestimated ground support requirements for initial box cut and first 500m of Decline

• Stoped and reviewed• Monitoring against Plan – regularly• People to do it – Mining Eng. started November.

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Hera Implementation• Building a team 

– Despite “cool” economy, finding and retaining the right people was struggle

– Delay in staffing contributed to overrun

• Contract Management– Robust contracts– Well defined targets and hurdles

• Setting up of processes – Culture up front– Establishing and documenting the procedures before 

they are needed– Establishing meeting regimes– Scheduling discipline– Templates– Choosing an appropriate software to support future 

operations

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2013 Jan‐14 Feb‐14 Mar‐14 Apr‐14 May‐14 Jun‐14 Jul‐14 Aug‐14 Sep‐14 Oct‐14Budget Cum 2,319 2,546 2,772 2,998 3,223 3,612 4,011 4,284 4,566 4836.4 5,106Actual Cum 2,368 2,653 2,847 3,132 3,453 3,781 4,059 4,411 4,794 5180.7 5,542

0

1,000

2,000

3,000

4,000

5,000

6,000

Metres Cu

m

Monthly Metres Cumulative

HERA DEVELOPMENT - UNDERGROUND AHEAD OF SCHEDULE

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HERA DEVELOPMENT – FINALISING MILL COMMISSIONING

Hera Mill – July 2014

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HERA DEVELOPMENT – FIRST GOLD POUR – 12TH SEPTEMBER

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HERA DEVELOPMENT – Sold first concentrate on schedule

25BUILDING A MID-TIER MINING COMPANY

GROWTH

Aurelia Metals LimitedASX:AMI

2 Corporation PlaceORANGE NSW 2800

T: +61 2 6363 5200E: office@aureliametals.com

www.aureliametals.com

26Hera Village

References

• MISAC meeting presentation on Hera Project by Sean Pearce • The Definitive feasibility study Of Hera Mine September 2011• “Why building a mine on budget is Rare” by Chris Haubrich, October 2014 (CIM 

MES Toronto)• Bullock 2011• http://www.mineweb.com/mineweb/content/en/mineweb‐mining‐finance‐

investment‐old?oid=140690&sn=Detail , viewed 9 December 2014• Correcting the course of capital projects – plan ahead to avoid time and cost 

overruns down the road” by PWC,  October 2013• Odysseus Pre‐feasibility Report, Xstrata nickel, 2012 • Golders Consultancies, Jo Graf – Geotechnical engineer. 

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Questions?