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Golden Deeps Limited (ASX: GED)

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POTENTIAL SHORT TERM CASH FLOW

Golden Deeps Limited (“Golden Deeps” or “the Company”) is set to benefit from a joint
venture (“JV”) with Hong Kong based Generous Metals Company Limited (“GMC”) to develop
the 80% owned Abenab Vanadium-Lead-Zinc Project (“the Project”), located in the Otavi
Mountain Land of Northern Namibia.
Under the terms of the JV (which covers only that surface mineralised material identified at the
time of the agreement), GMC will fund development and operations at the Project, including
a comminution and concentration plant (with the size to be determined), which is planned to
produce high grade V2O5-Pb-Zn concentrates from surface material, including stockpiles and
tails, to be sent to China for refining.
Project operating profit will initially be shared between Golden Deeps (50%) and GMC (50%)
after recoupment of costs to GMC, with ~5 - 10% then expected to be distributed from Golden
Deeps to Coniston Pty Ltd (“Coniston”), the Company’s largest shareholder and the holder of
a free carried interest in the Project. Following the end of the JV Golden Deeps will be sole
operator and own the plant, and will have the ability to treat mineralised material identified
subsequent to the signing of the JV on its own account - such material has been identified
over a significant area in recent work by Golden Deeps, and thus has the potential to host an
appreciable shallow Resource, the estimation of which is underway.
Initial production from the Project is targeted for later in 2020, which is located over historic
operations that produced 102,000 t of concentrate grading at 18% V2O5, 13% Pb and 42%
Zn from 1.85 Mt from 1.85 Mt of ore - Abenab is one of the highest grade and largest known
vanadate deposits globally, with the mineralogy including descloisite and willemite.
The nature of the material to be treated under the JV, being free dig, at surface and able to
be upgraded to a very high grade V2O5-Pb-Zn concentrate by gravity separation and flotation
should make Abenab a very low cost project. Also, given that it will be treating historic tails and
stockpiles should mean a relatively simple and quick permitting process.
Activities under the JV are currently concentrating on metallurgy, with a 40 t bulk sample
being recently sent to China for concentration and refining test work - the Chinese side of the
operation, including marketing, is being managed by GMC, with Golden Deeps managing the
Namibian operations.
Recent work by the Company has included diamond, RC and auger drilling that has identified
mineralised surface material that falls out of the scope of the JV - this drilling also included
material within the JV, with the results to be used for an initial Mineral Resource Estimate
(“MRE”) for the surface mineralised material.
KEY POINTS
� Funded, low cost project: Through the JV with GMC, Abenab is fully funded through
development and operations, and in our view should be low cost by virtue of the style
of mineralisation. One key benefit is that the Project should be relatively insulated from
the vagaries of vanadium pricing; in addition it is planned to produce lead and zinc which
provide a revenue hedge.
� Short term to production: All going well, it is expected that operations could commence
later in 2020.
� Proven mining destination: Namibia has a well developed mining industry, which
provided 47% of the country’s total export income in 2017 and contributed 12% of GDP -
this is supported by a transparent and tested legal framework.
� Infrastructure rich: Namibia has well developed transport and utility infrastructure - this
applies to the Project area, which is well served by roads and has access to grid power.
� Strong management and committed personnel: Company personnel have extensive
relevant experience, including in the commercial and technical aspects of the industry.
� Geared to operational success: With an EV of~A$6.4 million and a tight capital structure
the Company is well geared to successful development and production.
� Steady newsflow: Ongoing work over coming months should lead to steady newsflow