INDABA PRESENTATION 11 FEBRUARY 2015 > Disclaimer Forward-Looking Information This document may contain forward-looking statements. These forward-looking statements are made as of the date of this document and Sierra Rutile Limited (the “Company”) does not intend, and does not assume any obligation, to update these forward-looking statements, whether as a result of new information, future events or otherwise, except as required under applicable securities legislation. Forward-looking statements relate to future events or future performance and reflect Company management’s expectations or beliefs regarding future events and future performance and include, but are not limited to, statements with respect to the estimation of mineral reserves and resources, the realization of mineral reserve estimates, the timing and amount of estimated future production, costs of production, capital expenditures, success of mining operations, environmental risks, unanticipated reclamation expenses, title disputes or claims and limitations on insurance coverage. In certain cases, forward-looking statements can be identified by the use of words such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved” or the negative of these terms or comparable terminology. By their very nature forward-looking statements involve known and unknown risks, uncertainties, assumptions and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward looking statements. Such factors include, among others, risks related to actual results of current exploration activities; changes in project parameters as plans continue to be refined; future prices of mineral resources; possible variations in ore reserves, grade or recovery rates; accidents, labour disputes and other risks of the mining industry; delays in obtaining governmental approvals or financing or in the completion of development or construction activities; as well as those factors detailed from time to time in the Company's interim and annual reports. These risks, uncertainties, assumptions and other factors could adversely affect the outcome and financial effects of the plans and events described herein. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward- looking statements. > Leading Producer of Natural Rutile Company Overview > Location Sierra Rutile is a well-established, fully-integrated mineral sands operation in Sierra Leone GUINEA — World’s largest natural rutile deposit SIERRA LEONE — Wholly-owned multi-mine operation — Fully-integrated infrastructure supports product delivery to international markets > Second largest producer of natural rutile globally — High-grade feedstock for pigment manufacturing and titanium metal > Also produces ilmenite, a lower grade pigment feedstock, and zircon, used in the ceramics industry > Strong and diverse customer base including all primary chloride-based titanium pigment manufacturers and producers of high-specification quality titanium metals Moyamba Freetown Bo Gbangbatok Momaligi Exploration licenses LIBERIA Mining license Main roads > 3 Mineral Sands Market Overview > Sierra Rutile’s primary product is natural rutile, a titanium feedstock (also known as TiO2 feedstock) mainly used for the manufacture of TiO2 pigment — Natural rutile is one of a number of TiO2 feedstock in the production of white pigment, used to manufacture paint, plastics and paper — Other feedstock include ilmenite, synthetic rutile, leucoxene and titanium slag — TiO2 pigment is preferred due to its attractive characteristics of high brightness and opacity, surpassing any substitutes > Natural rutile is the premium feedstock for the chloride process, the preferred TiO2 pigment processing method — TiO2 feedstock are processed by either the chloride or the sulphate process — The chloride process is favoured as it is more efficient, cleaner and lower cost — Consumes less energy, generates less waste and is environmentally friendly — Requires use of high-grade feedstock such as natural rutile, synthetic rutile or chloride slag — In North America, almost all production is via the chloride process and China’s 12 th Five-Year Plan stipulated the move to chloride-based production > TiO2 feedstock is also used in the manufacture of titanium metal, and zircon is used in the global ceramics industry TiO2 Feedstock Natural Rutile Synthetic Rutile Leucoxene Titanium Slag Ilmenite Zircon Chloride Process Plastics TiO2 Pigment Sulphate Process Paper Paints & Coatings Titanium metal Ceramics > 4 Natural Rutile Advantage to Drive Demand Ore Consumption 13 times less chloride consumption than ilmenite 14 Chloride consumption indexed to natural rutile (x) Preferred pigment feedstock for the chloride process – Only feedstock that does not require upgrading prior to use – Lower greenhouse gas emissions than synthetic rutile and slag – Suitable for consumption in demanding regulatory environments Chloride Consumption 12 10 8 6 4 2 0 Waste Generation 17 times less waste than ilmenite 18 1.8 1.6 1.4 1.2 1.0 0.8 0.6 0.4 0.2 0.0 Waste generation indexed to natural rutile (x) > Quality and low contaminants of natural rutile promote high value-in-use, essential to the manufacture of high-quality final pigment products Ore consumption indexed to natural rutile (x) > 15 12 9 6 3 0 Ilmenite Slag Synthetic Rutile Natural Rutile Natural rutile is far more efficient than other feedstocks in chloride pigment manufacturing Source: Sierra Rutile Data based on performance of a typical chlorination plant, indexed to performance of natural rutile > 5 World’s Best Natural Rutile Deposit Well-Positioned Against Peers3 Large, High-Quality Deposit > Bubble Size: In-situ Contained Rutile Resource World’s largest natural rutile deposit 1.20% — Mining leases over a land area of 560km1 — JORC-compliant resource of 900 Mt of ore grading 0.94% rutile2 > High-value mineral assemblage > Resource has potential to support a mine life of over 65 years at current production rates Ore Grade (%) Contained Tonnes (kt) Rutile Grade (%) 1.00% Sierra Rutile, 8.4 Mt 0.80% 0.60% Iluka, 10.7 Mt 0.40% Category Mt Rutile Ilmenite Zircon Rutile Ilmenite Zircon Kenmare, 4.4 Mt 0.20% Total Resource 895.5 0.94% 0.13% 0.05% 8,397 763 400 MDL, 0.4 Mt – – Note: as at September 30, 2014 Base Resources, 4.2 Mt 50 100 150 200 Rutile Production (kt pa) Large, high-grade rutile deposit that provides a long production life 1 Source: Company Filings 2 As at September 30, 2014 3 2013A rutile production except for MDL and Base Resources, which show LOM average annual production 250 > 6 Well-Established Operation > Leading mining company in Sierra Leone – Operating since the 1960’s – Contributed 3% of Sierra Leone’s 2013 GDP1 – Highly skilled and experienced workforce – > – One of Sierra Leone’s largest private sector employers – >1,400 employees, >90% Sierra Leonean nationals Existing Operations Meaningful contributions to local communities Fully-integrated operation with supporting infrastructure – Operation has grown to include two operating mines, Lanti Dredge Mine and Lanti Dry Mine – Land-based mineral separation plant, recently upgraded to process over 225 ktpa of rutile – Supporting infrastructure: – Power plant – Trucking operation and haulage road network – Port, storage and shipping fleet at Nitti – On-site camp World class, established mining operation 1 GDP estimate from The World Bank Lanti Dredge Mine Bucket line dredge and integrated processing plant capable of mining and treating 1,000 tonnes per hour Lanti Dry Mine Truck and shovel mining operation feeding a central 500 tonnes per hour processing plant Mineral Separation Plant Capable of processing over 225 ktpa of rutile following the recently commissioned upgrade Supporting Infrastructure Storage, port and shipping fleet support delivery of product to international markets > 7 Strong and Low-Cost Production Base Meaningful production from multiple mines – – Operational improvements and high-return growth projects have created a sizeable production base 120-130 2015E production of 120,000 - 130,000 tonnes of rutile Attractive operating cost base – One of the highest margin producers of TiO2 feedstock – Successfully reduced total operating cash cost1 from $881/t in 2012 to $646/t in 2014 – Cost reduction initiatives continue, with 2015 total operating cash cost guidance of $595-615/t 120 120 750 114 $683 $646 94 $595615 80 500 40 250 -- Total Operating Cash Cost ($/t)1 > Successfully added production from Lanti Dry Mine in 2013 1000 $881 Production sourced from two mining operations, Lanti Dredge Mine and Lanti Dry Mine – – 160 Rutile Production (kt) > 0 2012 2013 Other Lanti Dredge Mine Low-cost production from multiple mines 1 Total operating cash cost (includes direct operating costs, general administrative costs and corporate costs but excludes depreciation) less by-product revenue divided by tonnes of rutile produced 2014 2015E Lanti Dry Mine Total Operating Cash Cost > 8 Overcoming Ebola Minimizing Impact of Ebola on Our Operations > Sierra Rutile’s performance during the Ebola outbreak highlights a resilient, well-run operation — Contrast to other West African mining operations which struggled to contain costs and overcome operating challenges > New Ebola Cases Sharply Declining > Latest World Health Organization data shows the number of new weekly cases continuing to fall sharply in Sierra Leone Sierra Leone: Weekly Confirmed Ebola Cases1 Ongoing focus on protecting employees, contractors, and the local community P > Safe work environment through proactive mitigation measures P > Proven cost-containment strategies P > Active supply chain management P > Ongoing support towards Sierra Leone’s efforts to contain Ebola Despite obvious challenges, Ebola has only proved the resilience of Sierra Rutile’s operations 1 Source: World Health Organization Ebola Situation Report (January 21, 2015). Data shows confirmed weekly Ebola virus disease cases reported nationally by Sierra Leone. Patient databases give the best representation and include confirmed and probable cases. However, data for the most recent weeks are sometimes less complete than situation reports. Situation reports contain confirmed cases only > 9 The Future: Leverage the Existing Asset Base Underutilized production capacity – – Sierra Rutile’s fixed cost base represents approximately 60% of total operating costs $881 As infrastructure and mineral separation plant capacity are already in place, expansion is limited to primary mining and heavy mineral concentration 200 800 $683 $646 $605 150 120 100 600 125 114 $428 94 400 Opportunity to further reduce costs – Opportunity for Sierra Rutile to leverage its asset base and meaningfully lower unit costs by increasing production volumes – Significant margin expansion as production grows 50 Total Operation Cash Cost ($/t)3 Low-risk expansion – > Recent upgrade to the mineral separation plant brings capacity to over 225 ktpa of rutile 1,000 225 Large fixed cost base stems from current excess installed capacity at the mineral separation plant, power plant, port and road network – > 250 Rutile Production (kt) > 200 – – 2012 2013 Production 2014 2015E 1 Illustrative Target 2 Total Operating Cash Cost ($/t) Utilizing existing capacity will further enlarge operating margins 1 Assume mid-point of the 2015 production and operating cash cost guidance 2 Illustrative target based on 225 ktpa production capacity and 2014 costs, assuming a 60% fixed and 40% variable breakdown 3 Total operating cash cost (includes direct operating costs, general administrative costs and corporate costs but excludes depreciation) less by-product revenue divided by tonnes of rutile produced > 10 Multiple Ready-to-Deliver Projects > Extensive portfolio of growth projects – > Unique and substantial resource base supports multiple executable projects: – All projects fully permitted – Well-understood geology with common physical and chemical characteristics – Accessible through existing infrastructure – Can all be processed through the existing mineral separation plant Taninahun Boka Grade: 1.65% 0 Gbap Kamatpo Kibi Dodo Nyandehun Grade: 1.93% Komende Jagbahun Grade: 0.97% Benduma Well-defined pipeline for expansion 1. 2. Gangama Dry Mine: Near-term, low capital intensity production growth, contributing approximately 90 ktpa of rutile Sembehun Mine: Longer-term, long-life production scale – Previously envisioned as a dredge, now assessing development as a dry mine 10km Gambia Grade: 1.03% Sembehun Grade: 0.99% Rutile: 3.6Mt Mogbwemo Grade: 0.88% Gbeni Grade: 1.09% Rutile: 708kt Gangama Grade: 1.19% Rutile: 888kt Lanti Grade: 1.01% Rutile: 854kt Ndendemoia Grade: 0.80% SRL plant Area 1 Mosavi Grade: 0.50% Readily-available projects across a large resource base > 11 Transitioning to a Dry Mining Operation Sierra Rutile’s next growth projects will be developed as dry mining rather than dredge operations > Dry mining has several advantages over dredge mining in the current market environment: — Modular approach to scale up production — Lower-capital intensity — Selective mining Production Flexibility Ability to selectively mine higher grade material 2.40% Gangama Dry Mine Grade (%) > 1.80% 1.20% Lanti Dry Mine — Shorter construction time 0.60% 1 4 5 Reduced preparation requirements shortens lead time Lower capital intensity vs. dredge operation $3,200 Construction Period (months) Capital Intensity ($/unit of rutile eq. production) 3 Year of Operation1 Lead Time Capital Intensity $2,400 $1,600 $800 – Gangama Dry Mine 2 Lanti Dry Mine Average Dredge Mine 2 24 18 12 6 – Lanti Dry Mine Gangama Dry Mine Sembehun 3 Dredge Mine Ability to access high-grade resources with a short lead time and low capital cost 1 Shows Lanti Dry Mine from 2014 and Gangama Dry Mine’s first five years of production 2 Average capital intensity of Rio Tinto’s Zulti South project and Mineral Deposit Limited’s Grande Côte project. Rutile equivalency calculated using long-term consensus estimates of $1,200/t rutile, $200/t ilmenite and $1,413/t zircon 3 Source: Sembehun Scoping Study, Sierra Rutile press release October 31 2012 > 12 Building on the Success of Lanti Dry Mine > Lanti Dry Mine Production Profile – Designed and built in less than 12 months 4,000 – Delivered under budget 3,500 Strong performance to date 3,000 – Relatively stable production to date – Provides operational flexibility through its ability to selectively mine as well as access multiple areas simultaneously Significantly de-risks future dry mining projects – Experience of developing and operating Lanti Dry Mine will materially de-risk future dry mining operations – Future dry mining projects have been further optimized from Lanti Dry Mine learnings 2,500 2,000 1,500 1,000 500 – May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 > Successfully commissioned Rutile Production (t) > Future dry mining projects are significantly de-risked as a result of the experience gained at Lanti Dry Mine > 13 Next Key Growth Project: Gangama Dry Mine > Project overview – > Key Project Highlights1 One of the highest grade deposits within Sierra Rutile’s asset portfolio – Production available within 12 months – Gangama Dry Mine is operationally identical to the Lanti Dry Mine project Average annual production rate (ore mined) 6.9 mtpa Average annual rutile production (Gangama deposit only) 93 ktpa Project life (Gangama and other deposits) – The 1,000 tph of ore feed project consists of 2 x 500 tph units Up-front capital expenditure2 – Power, water and road access is already in place Construction period – 20+ year life as the concentrator unit will be moved to nearby deposits once the Gangama deposit is depleted Grade Profile Minimal risk of capital cost over-runs $81m 12 months 2.50% — Mineral separation plant already capable of processing all production from Gangama Dry Mine Leverage Sierra Rutile’s large fixed cost base, lowering unit operating costs Grade (%) — 77% of capital cost is fixed > 20+ years 2.00% 1.50% 1.00% 1 2 3 4 Year of Operation (Gangama deposit only) 5 High grade, low-cost operation 1 Source: August 2013 Feasibility Study 2 Source: Sierra Rutile press release October 4, 2013 > 14 Further Production Growth: Sembehun Mine > > Project overview – The Sembehun group of deposits are located 45 km northwest of the existing operations – Largest resources within Sierra Rutile’s existing endowment, containing 3.6 Mt of rutile1 – Sembehun will provide longer-term production growth for Sierra Rutile Project status – Originally envisioned as a 1,875 tph dredge mining operation, now assessing possibility to develop as a lowercapital 1,000 tph dry mining project – Greater production flexibility, enabling selective mining – Lower capital costs, shorter lead-time and reduced impact to the community – Operations will be similar to those of Gangama Dry Mine and Lanti Dry Mine, substantially de-risking project development – Scoping study to be completed in 2015, with feasibility study commencing shortly thereafter Long-life project with significant development optionality 1 As at September 30, 2014 > 15 Capital-Efficient Production Growth Plan Capital Efficient Growth Plan Illustrative Production Outlook 250 P > Low-risk, short lead-time development pipeline – Apply proven ability to construct and operate dry mining operations P > Flexible, modular production – Maintain ability to quickly respond to market demand 200 Rutile Production (kt) P > Disciplined capital allocation to maximize free cash flow generation – Focus on low-capital intensity projects 150 100 50 P > Continued emphasis on operating efficiency – Leverage strong infrastructure and large fixed cost base – 2014 1 2015 Current Operations 2016 2017 2018 Gangama Dry Mine 2019 2020 Sembehun Mine Organic growth plan focusing on low-risk, low-capital, modular dry mining projects 1 Assume mid-point of the 2015 production guidance > 16 Balanced Approach to Growth and Shareholder Returns Well-Positioned to Responsibly Fund Growth > Sierra Rutile is well-positioned to fund high-returning growth without compromising future shareholder returns P Free Cash Flow Generation Supports Future Distributions > > Strong operating platform for cash flow generation – Consistent, low-cost production > Not a typical junior mining company – Transition towards financially disciplined growth and prioritizing a consistent return of capital to shareholders – Capital allocation framework will still allow for opportunistic growth to respond to changes in market demand Support meaningful and sustained dividend P > Healthy balance sheet – Allows for financial flexibility – Additional free cash flow generation from Gangama Dry Mine will provide capacity to initiate a meaningful and sustainable dividend P > Strong shareholder base – Supportive of disciplined capital allocation for growth – Dividend will differentiate Sierra Rutile from industry peers while still preserving balance sheet strength and operational flexibility P > Willingness to preserve shareholder value – Focus on minimizing equity dilution Ability to fund growth while supporting meaningful and sustained dividend distribution > 17 Strong Balance Sheet Relative to Peers Robust Balance Sheet for Future Growth > Low Leverage vs. Peers Sierra Rutile has maintained a strong balance sheet through its previous expansion and a challenging market environment 5 8% — Net debt of $37m1 — Borrowings include a $20m working capital facility and a loan of $23m from the Government of Sierra Leone1 — Availability period through to year-end 2015 > Focus is to maintain low leverage ratio to preserve financial flexibility Debt to Market Capitalization3 — Undrawn $30m senior loan facility2 that could be used towards the development of Gangama Dry Mine 4 26% 3 91% 2 252% 1 353% – 100% 200% 300% 400% Maintaining low leverage ratio to preserve financial flexibility 1 As at December 31, 2014. Repayments for the Government of Sierra Leone loan have been deferred until June 2016 2 Subject to certain, customary conditions 3 Source: Bloomberg as at February 2, 2015. Mineral Deposits Limited has no debt > 18 Highlights: Not a Typical Junior Mining Company P > World-class natural rutile deposit supporting an established, low-cost production base P > Resilient operation with proven ability to withstand the Ebola outbreak P > Opportunity to leverage fixed-cost base and extensive infrastructure to further reduce costs P > Transitioning to a more flexible and capital-efficient operation through dry mining expansion P > Low-risk production growth plan from well-defined and advanced projects P > Well-positioned to responsibly fund growth and support meaningful and sustained dividend > 19 Contact Details John Sisay Chief Executive Officer Email: [email protected] Sierra Rutile Limited 30 Siaka Stevens Street 2nd Floor, Access Bank Building Freetown Sierra Leone www.sierra-rutile.com
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