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EXECUTIVE SUMMARY

 

  • Cass Offshore Minerals Limited (‘CASS’) is the parent holding of Ironsands Offshore Mining Limited (‘IOM’) founded in August 2008 and Pacific Offshore Mining Limited ('POM') founded in February 2010.
  • Cass’ objective to commercialize substantial iron sand mineralization off the coast of New Zealand (‘NZ’).
  • CASS has 2 projects; potentially the next great source of Iron Ore and Ilmenite.
  • Capital is sought from investors seeking exposure to long life, low cost, strategic assets leveraged into the Asian growth story.

 

KEY RISK MITIGATION

 

  • Experienced Board and Management Team
  • World-leading Development Projects
  • Large Resources with Significant Exploration Upside
  • Simple Operations – Proven Technologies
  • Attractive Commodity Fundamentals
  • Low Capex / Opex and No Infrastructure Constraints
  • Sustainable Long Term Supply

 

OVERVIEW

 

  • As sea level has risen over the last 100,000 years the coastline has migrated inland resulting in extensive seabeds of iron sand.
  • CASS has secured exclusive rights to all minerals within its prospecting permits directly off the coast of NZ.
  • Major players in the field include Bluescope, New Zealand Steel and Sinosteel.
  • Trans Tasman Resources (‘TTR’) intends to supply 4 million Mtpa of 56% Fe concentrate from an entirely offshore operation following a $50 M program which is in continuity with offshore territory (the tenement) held by IOM.

 

ACTIVITIES

 

  • CASS intends to develop offshore dredge mining operations which are cheaper than onshore mining with no pre-stripping, blasting or crushing.
  • OPEX estimates are approximately US $25 per tonne.
  • Currently IOM anticipates beginning production at 4.5 million Mt p.a. in 2020, of 56%-58% Fe concentrate.
  • It is anticipated the Fe concentrate will be able to command US $60-70 per Mt CFR - a significant discount to current high grade Pilbara hematite.
  • Ilmenite will be processed onshore to iron nuggets 96% Fe and synthetic rutile 85% TiO2 suitable for pigment and Titanium manufacture.
  • Iron nuggets can be processed to steel by any steelmaker.

 

PRODUCTS

 

  • Product development will be completed during pre-feasibility stages
  • Cass’ technology provides critical advantages in blending iron sands with Chinese ores for plant feedstock.
  • Ilmenites will be assessed for pig iron (‘MPI’) and rutile manufacture.
  • NZ Ilmenite is low in chromate, other contaminants and radioactivity.
  • MPI is contaminant free and competes in the tight HMS scrap steel market for feedstock into all forms of steelmaking without restriction. 96% Fe 3%C.
  • Co-production of Zircon in small amounts.
  • Rare Earth Elements (‘REE’) are present include Niobium and Scandium.

 

TENEMENTS

 

PP51536 -> EP55709

 

  • In 2010, aeromagnetic surveys and 3D inversion models shows a TTM Exploration Target containing a bulk sand resource of 11.66Bt grading 10.4% iron sand, equivalent to a potential 1.463 Billion Mt of 60% Fe Concentrate.
  • In 2011, airborne magnetic surveys, seismic profile and drilling of 125 marine cores (6m deep) were completed.
  • DTR % consistent with in situ head grades of up to 30% iron sand.
  • Further testing is needed to test continuity.
  • The TTM is recoverable in 40-80m of water through large scale, low cost trailing suction hopper dredging (‘TSHD’).
  • Beach samples have shown 26 – 72% iron sand in the sediment.

 

PP52474 -> EP57130

 

  • Airborne magnetic studies, seismic surveys and shallow marine samples have confirmed plio-pleistocene valley in-fills with extensive high grade Ilmenites (up to 68% HMS) available with minimal overburden for TSHD uplift in 20-50m of water.
  • Exploration Target contains a bulk sand resource of 2.2 Billion Mt with 664 million Mt of HMS grading 15% ilmenite of the bulk resource; equivalent to a potential in situ ilmenite content of 332 million Mt.
  • Is also highly prospective for Gold and Silver being in geological continuity with the productive Waihi Gold mine (‘OceanaGold’). To be assessed.

 

TECHNICAL PROCESS

 

  • TTM can be offered at a significant discount for a product at 56%+ Fe - Containing < 5% TiO2, suitable as a hearth protectant and ideal for blending in the blast furnace.
  • A number of iron ore treatment processes (Midrex, Fastmelt, ITmk3, Corex & Finex) have been advanced and commercialized accepting TTM without restriction to produce liquid iron or Merchant Pig Iron.
  • These processes are able to refine low-grade iron inputs and remove Ti/V to the slag allowing for use in Blast Oxygen Furnaces (BOF) or in Electric Arc Furnaces (EAF).
  • Each of these technologies; can accept TTM; require less capital to implement; provide lower production costs and environmental advantages over traditional blast furnaces.
  • Existing steel makers are beginning to face pressures to modernize their plants (i.e. China, Korea, India) and increase steel production.
  • NZ ilmenite derived, high Titania slags (80-97% synthetic Rutile) are commercially refinable for use in the pigments industry, and reducible to Titanium Sponge or Ingot for the Aero-Spatial Industry.

 

SUPPLY / DEMAND

 

Iron Ore – Quoted figures, Ernst & Young and Bank of China International.

 

  • Iron ore producers are increasingly focused on productivity, adding incremental tonnes from efficiency as opposed to expansion.
  • Lower valuations and more stable iron ore prices make the market look attractive to investors.
  • Trading houses are increasing their exposure to iron ore, with Chinese trading companies being particularly active.
  • The need to secure future raw material supply also saw producers expand investments, including Anglo American’s $320m investment in Brazil's Minas-Rio project and NZ's Todd Corporation receiving $5 billion in state Chinese funding in a Pilbara joint venture created for the development of iron ore.
  • This activity will continue, as China and India, which are structurally short of quality iron ore, need to secure substantial future supply.

 

Ilmenite and Rutile – Quoted figures are from TZMI and RBS Capital Markets

 

  • Ilmenite and synthetic rutile prices will likely settle in the short term around long term averages of $150 and $800 US respectively per Mt.
  • Iluka recently acquired Sierra Rutile for 215 million pound; the project is scheduled to produce under half of POM's project at three times the cash cost per tonne.
  • TiO2 consumption per capita is increasing at 10-14% CAGR in China and India against a population backdrop of 2.6 billion people.
  • A 0.25Kg per capita increase in consumption in these two countries over 3 years equates to 650,000 Mt increase in demand.
  • CASS will be a producer able to fill this demand at scale.

 

SOVEREIGN / REGULATORY

 

  • The NZ Government and Ministry of Economic Development are very keen to see value unlocked from the significant deposits off the NZ coast.
  • Previous opposition from Green Party politics has shifted to support mineral mining development other than petroleum.
  • NZ does not operate a capital gains tax and has double taxation agreements to minimize tax on dividends, interest and royalty payments.
  • NZ has economic, political and business environment stability set in a well-developed legal regulatory framework minimizing fraud risk.
  • Trans Tasman Resources Limited has received a mining licence and EPA approvals are anticipated to produce up to 5 million Mtpa iron sand concentrate offshore NZ in the tenement next to CASS Offshore Minerals.

 

 

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