RIU Sydney Resources Round-Up

1

www.hannansreward.com

Presentation by Damian Hicks, Managing Director 13 May 2011

From its beginnings in 2002 Hannans has evolved from a pure greenfields explorer with a promising portfolio into a balanced junior diversified resources company with major belt positions covering precious and base metals and bulk commodities. Our aim is to provide shareholders with returns through exposure to significant economic mineral deposits and we aim to achieve that through successfully managing three business units:

1. Exploration – in Australia and overseas

2. Investment Management – converting projects into direct equities, investment into managed funds, provision of convertible notes and cash

3. Corporate Services – the provision of transaction services and corporate management

Hannans(ASX:HNR)

Hannans Reward

Australian Exploration

International Exploration(Resources & Rewards)

Hannans Investment Management

Equities InvestmentsCash

Convertible Notes

Corporate Board Services

Transaction Services & Corporate Management


2

We have positioned our shareholders for rapid capital growth from exploration success and steady growth from investment management and corporate services.

Hannans has a solid balance sheet after commencing ASX listed life in 2003 with a $3.5 million IPO and now has approximately $30 million in cash and investments and no debt.

An example of our business model is best evidenced by our early entry into the East Pilbara in 2003, our exploration discovery of a high grade hematite deposit near Jigalong, our agreement with the forward thinking Warwick Resources Ltd management team that lead to the commencement of the consolidation process of iron projects in the East Pilbara and ultimately our support for the Atlas Iron Ltd acquisition of Warwick Resources.

This can be summarised as opportunity recognition, exploration success through managed risk taking and disciplined processes followed by two value adding corporate transactions that ultimately resulted in an equity investment today worth more than $22 million being 6.4m shares in Atlas Iron Ltd.

Our job at Hannans is to repeat that process on a much grander scale with either a nickel sulphide discovery in Western Australia at Forrestania, Lake Johnston or Queen Victoria Rocks, a gold discovery at Lake Johnston and or monetising the manganese mineralisation at Jigalong in the East Pilbara. Successfully monetising our assets in a risk managed manner should see the balance sheet grow in multiples which will enable Hannans to enter into increasingly attractive projects of value.

Shareholders therefore remain exposed to this significant upside and capital growth.

Hannans shareholders also receive opportunities to invest in products developed by our corporate services business unit which has played major roles in the development of two IPO’s on ASX in the last 12 months. This includes the successful minerals incubator Scandinavian Resources Ltd (ASX:SCR), which is focussed on minerals in Sweden and Norway and has grown from a $12 million market capitalisation to a fully diluted $80 million in 12 months. It is my belief as Chairman of Scandinavian Resources that this company will rapidly move towards a market capitalisation closer to $250 million as it unlocks its iron deposits within 10km of Europe’s largest iron mine, the giant Kiruna mine owned by LKAB. More such offerings to Hannans shareholders are anticipated in the future.


3

Magnetite ore from Scandinavian Resources Ltd’s diamond drilling near Kiruna in March 2011


4

Its also worth noting that Hannans has not raised equity since September 2009 and currently has 131 million shares on issue. No capital raisings means no fees so we haven’t exactly been on many brokers’ radar’s during the recent capital raising bull market.

We are aware that the market is viewing Hannans as a listed investment company, which we are not; we are an increasingly diversified junior resources company with a strong balance sheet. Our market capitalisation is currently $25 million and our assets are worth nearly $30 million.

I encourage you to make your own assessment by considering the detailed Hannans Snapshot resting on your seat today and also attached to the latest Quarterly Report. If you recognise value in the Hannans portfolio advise your dealer to buy the stock.

I was reminded recently about a presentation made by the founder and major shareholder of the best performing nickel sulphide company in recent memory and favourite son of this conference, Mr Kerry Harmanis from Jubilee Mines when he questioned a number of attendees at a global investment conference.

He started his presentation by asking three well-dressed chaps what they did for a job. One said ‘an analyst, another said ‘an accountant’ and another ‘an engineer’. Kerry looked exasperated and apparently said to each of them “You won’t get it. You won’t get it. And neither will you. This Jubilee story, it’s a nickel sulphide exploration story. You can’t model it. You need to BELIEVE and you need to have FAITH!”

At Hannans, we believe and we have faith.

We believe and we have faith in our Exploration Team which is headed by our Exploration Manager Donald Huntly who joined us nearly 12 months ago from Xstrata Nickel. Don, a geologist has held senior exploration positions with major companies including Xstrata Nickel Australasia, Jubilee Mines, Goldfields of South Africa and WMC Resources and he contributed to the success of Jubilee Mines by playing a major role in the discovery of the Sinclair nickel sulphide deposit.


5

Don Huntly, Geologist

Ben Jones, Geophysicist

Dr Nigel Brand, Geochemist

Don brings a disciplined exploration process to Hannans integrating geology, geophysics and geochemistry. In that regard he has also brought into Hannans as consultants two of his colleagues from Jubilee Mines and Xstrata.

Ben Jones, an experienced geophysicist from Southern Geoscience played significant roles in the discovery of nickel sulphide mines including Cosmos and Sinclair for Jubilee Mines. Dr Nigel Brand, an experienced geochemist from Geochemical Services also worked WMC Resources, Anglo American, Jubilee and Xstrata. Nigel completed his PhD in 1997 on weathering process associated with nickel sulphides.

This experienced team has worked together with success on nickel sulphides in Western Australia and in my opinion they are as good as any nickel exploration team going around. Importantly they have three fantastic nickel sulphide projects to test their mettle on. They are the Forrestania Project, joining mid-cap nickel miner Western Areas, the Lake Johnston nickel and gold project adjoining global nickel producer Norilsk Nickel and the Queen Victoria Rocks nickel project adjoining a joint venture involving mid-cap nickel miner Mincor Resources.


6

Don is also smart enough to know he doesn’t know everything so he has engaged an experienced manganese specialist to assist him on the expansive Jigalong manganese project in the East Pilbara.


7


8

The Hannans Board is providing Don with the funds he requests to implement his plans and his processes. Hannans has consistently funded exploration since listing in 2003 as evidenced by this chart which shows exploration expenditure in blue and administration in yellow for every Quarter since listing on ASX. Fees earned by Hannans’ corporate services unit also reduce Hannans fixed costs ensuring more funds are allocated to direct exploration expenditure.

The low point in expenditure is the GFC, which created an opportunity for an unwelcome takeover approach from another well-known nickel investor which was rejected by Hannans shareholders. One can only surmise that the reason for this approach was to secure the undervalued nickel sulphide assets. I raise this piece of history because it taught me a very good lesson about the potential worth of our nickel portfolio and the need to make a discovery as soon as possible to crystallise the value for shareholders. We will not forget the faith shown by the majority of Hannans shareholders at that time including the support of our major shareholder, the prize winning global fund manager Craton Capital from South Africa. We aim to return the faith shown in us by making a discovery. We believe that by supporting Don and his Team we are giving ourselves every opportunity to achieve what must be considered an extremely difficult task, a greenfields nickel sulphide discovery. They really are few and far between but when they work, they work very well for shareholders.

Hannans Cash Expenditure & Share Price (All Quarters since ASX Listing)


9

Let us now consider the Forrestania Project.

We are exploring the northern extension of the western ultramafic unit that hosts the fantastic nickel sulphide deposits owned by Western Areas being Spotted Quoll and Flying Fox and the depth extension owned by Kagara being Lounge Lizard. The WSA ground finishes at their Beautiful Sunday deposit and then the Hannans ground position starts. We believe as a result of our combined geological, geophysical and geochemical understanding that we have similar rocks units to those in the south of the package. This ground position has been compiled over 5 years and represents the first time one company has exposure to the breadth of the rock units; previously it was characterised by a fragmented land ownership by gold focused companies.


10

At Forrestania there is a chance the rock units fold to the west and continue south parallel to the known ultramafic units. We’re seeking approvals to test that theory but if they continue to the north, we have that covered. If we have exploration discovery success here we really in the line of fire of existing participants at Forrestania and companies wanting to enter this world-class nickel sulphide belt. As an aside when recently completing an RC drill program Don intersected a +60% hematite cap sitting atop a magnetite BIF. This is interesting because the intersection is 70km south from Cazaly’s Parker Range Iron Project. Cazaly will be producing iron early next year from Parker Range and will make their shareholders lots of money from a small tonnage operation. The crazy thing about identifying a small iron deposit on Hannans ground, if that’s what occurs, is that the Yilgarn infrastructure offers a cost effective logistics solution whereas the Pilbara doesn’t. We’ll follow Cazaly with interest and wish them every success.


11

Moving east we get to Lake Johnston the belt where global major Norilsk Nickel is recommencing their nickel mining business shortly, if they haven’t already. We believe we have exposure to the rock units that host the Emily Ann and Maggie Hays nickel mines. Once again any exploration success for nickel sulphides and we really are standing in the way of a global major that no doubt would like more ore to feed its Lake Johnston operations. The perfect scenario for Hannans would be to have exploration success at both Forrestania and Lake Johnston thereby having sufficient nickel metal tonnes to consider an independent mining and processing operation.


12

Currently our focus is gold at Lake Johnston and for very good reason. Over the last 10 years we have aggregated a very promising land position and there’s lots of high grade gold identified but at this stage its narrow. We currently have outstanding geochemical anomalies, have completed extensive gravity surveys and are doing in-foil soil sampling ready for an RC program soon to test these gold targets. Watch this space for an economic gold discovery. Moving further east we get to Queen Victoria Rocks. QVR is close to the old Nepean nickel sulphide mine. QVR hosts the Spargos nickel prospect which has produced lots of smoke for a long time but no one has cracked it yet. Spargos Reward a nickel explorer in the 1970’s traded at between $7 and $10 for a year on the back of nickel exploration at Spargos.


13

Now Spargos has attracted many to our doors including successful consultants, well-credentialed juniors and a global major including Vale of South America which entered into a JV with Hannans some time ago at QVR. However I have observed them all in the last 10 years and I can confidently say that’s its been Don who is the first person to diligently compile and digitise 100% of the historical data at Spargos and build the picture or get a handle on the puzzle. The upshot is there is a clear lava channel, there’s nickel in the system, the flanking environments have been constrained and theres big gaps in between the drilling and geophysics testing the contact. So we’re going to fill those gaps in during the next few months.

QVR is the most advanced nickel target in the portfolio. It might not be located in the nickel industry’s equivalent to Peppermint Grove but don’t be surprised if it delivers the goods. Three cracking nickel sulphide projects together form a portfolio that many nickel explorers would give their right arm for; they are all being advanced in a logical systematic fashion by experienced successful nickel geoscientists with a budget to support their activities. I challenge anyone to suggest that Hannans’ nickel exploration portfolio has zero value. If you hear anyone say the ground is no good, you should requote Kerry and tell them, “You don’t get it. This is nickel sulphide exploration. You have to believe!”


14

Let’s now move to the East Pilbara to introduce the Jigalong Project.

I would like to take this opportunity to acknowledge the Jigalong Aboriginal Community, custodians of the Jigalong Aboriginal Reserve, home of the Rabbit Proof Fence. We were invited to Jigalong in 2003 by a friend of my father’s Mr Cedric Wyatt, CEO of the Jigalong Community. At the time Cedric invited us to Jigalong to make a contribution to the plan that would have seen Jigalong excised from the East Pilbara Shire and become self-governing. As an aside, and whilst remaining apolitical Cedric’s son Ben Wyatt, a Kalgoorlie born boy is destined to become, in due course and with good counsel, the first indigenous premier of Western Australia.


15

Over the course of the last 10 years I have been made to feel very welcome at Jigalong by the Community and as a result Hannans has invested the exploration funds to start scratching the surface of a vastly under-explored part of the Pilbara and I’m pleased to say that the Jigalong Community is a Top 20 Hannans shareholder. Exploring in the East Pilbara is very expensive and difficult due principally to its remoteness, limited field season and limited historical data sets. Hannans maintains all non-iron rights to the Jigalong Project which covers some +2,500 sq km and our focus is manganese. The project is located in the well-endowed East Pilbara manganese province and on the edge of the Mineral Resources owned Nicholas Downs manganese mine, a joint venture with Gina Rhinehart’s Hancock Prospecting. Much like the iron business, manganese is a bulk commodity and is dependent on infrastructure and logistics. I would be very surprised if this project wasn’t of interest to steel input companies in the Pilbara including those currently trying to enter the East Pilbara through corporate action. We’ll aim to develop a resource this year and then work towards consolidating the project with other like-minded companies to extract the synergies of consolidation in much the same way we did with Warwick and Atlas Iron. You must believe and have faith; this portfolio has very significant value. We have a fantastic Google Earth fly through of the portfolio in our booth and available soon on our web site so please come by the booth, introduce yourself and discuss the technical merits of the projects with Don. It’s going to be an interesting next six months for Hannans in the field. You can follow the planned activities in the Hannans Snapshot and Quarterly Report. I trust that this high level summary has whet your appetite, so if you are prepared to speculate on exploration stocks then do yourself a favour and buy some Hannans. Thank you

For more information contact: Damian Hicks Managing Director Hannans Reward Ltd +61419930087 (M) [email protected] (E)

Presentation by Damian Hicks, Managing Director

13 May 2011

Hannans Group Structure

2

Hannans(ASX:HNR)

Hannans Reward

Australian Exploration

International Exploration(Resources & Rewards)

Hannans Investment Management

Equities InvestmentsCash

Convertible Notes

Corporate Board Services

Transaction Services & Corporate Management

3scandinavianresources.comkirunairon.com

Corporate Board ServicesAn example of the service offering, see Scandinavian Resources Ltd

4

Hannans Exploration Management TeamMr Don Huntly, Exploration Manager appointed 1 July 2010), GeologistMr Huntly holds a Masters Degree in Science (Ore Deposit Geology and Evaluation) from theUniversity of Western Australia, a Bachelor of Applied Science (Geology) and is a full member ofAustralian Institute of Geoscientists (MAIG) as well as a Registered Professional Geoscientist(RPGeo). Mr Huntly is an experienced geologist having held senior exploration positions with majorcompanies including Xstrata Nickel Australasia, Jubilee Mines NL, Goldfields of South Africa(Agnew Gold Operation) and WMC Resources Ltd (Leinster Nickel operation). Mr Huntly played amajor role in the discovery of the Sinclair Nickel Deposit owned by Xstrata. He is a member of theAustralian Institute of Geoscientists and is a Registered Professional Geoscientist.

Dr Nigel Brand, Consultant from Geochemical Services, GeochemistNigel worked for WMC Resources for eleven years until 1999. During his time at WMC he workedthroughout the Norseman-Wiluna Greenstone belt on various regional Ni & Au exploitationprograms and at WMC operations at Norseman, Kambalda, Kalgoorlie, Leinster and Mt Keith. Hecompleted his PhD in 1997 on weathering process associated with nickel sulphides. On leavingWMC, Nigel joined Anglo American for four and a half years as their geochemist in the Asian-Pacific region, including India. Philippines and Australia exploring for Zn, Ni and Cu-Au PC/IOCGdeposits. In 2004, Nigel and Dr David Lawie co-founded ioGeochemistry, a global independentgeochemical consulting group based in Perth, Western Australia. In January 2005 Nigelestablished Geochemical Services Pty Ltd to provide hands-on and applied geochemicalexpertise to the international exploration and mining communities.

Ben Jones, Consultant from Southern Geoscience, GeophysicistBSc-Honours in Geophysics from Curtin University, Western Australia. 17 years industryexperience in mineral geophysics. Highly experienced in nickel sulphide exploration,particularly in Western Australia. Current role of Consulting Geophysicist with experiencedgroup Southern Geoscience. Prior senior positions include Chief Exploration Geophysicist withXstrata Nickel Australasia. Significant roles in the discovery of several nickel mines (Cosmos,Sinclair with Jubilee Mines / now Xstrata). Member of ASEG and AIG.

7

Hannans Cash Expenditure & Share Price(All Quarters since ASX Listing)

92144 99 109 118 104 97 106

24

265 268

13569

305 281219

292

30145

13

228142

207 235 194 149 172 139 158240

330158 261

158

390

77193 143

246

339

131

245

667

403 418

272

661

386

541

1,347

69

45

196

721

546

388

475

1,121

1,364

1,640

0.00

0.10

0.20

0.30

0.40

0.50

0.60

0.70

0.80

0.90

1.00

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

Dec 2003 Jun 2004 Dec 2004 Jun 2005 Dec 2005 Jun 2006 Dec 2006 Jun 2007 Dec 2007 Jun 2008 Dec 2008 Jun 2009 Dec 2009 Jun 2010 Dec 2010

Administration & OtherExploration and EvaluationHNR Share Price

Cash Expenditure HNR Share PriceA$

14

For more information contact:Damian HicksManaging DirectorHannans Reward Ltd+61419930087 (M)[email protected] (E)

Believe, have faith, buy Hannans (ASX:HNR)

RIU Sydney Resources Round-Up

Documents

Transcript of RIU Sydney Resources Round-Up