Apc Minerals Limited · ASX:APC
Apc Minerals — Australian Potash — Investor Presentation (May 2021)
27 slides from Apc Minerals's investor presentation, May 24, 2021
Slide 1: Low Cost, Organically Certified, Environmentally Sustainable Green Sulphate of Potash
For personal use only Low Cost, Organically Certified, Environmentally Sustainable, Green Sulphate of Potash Transitioning to Development May 2021 www.australianpotash.com.au
Slide 2: Disclaimer
Disclaimer For personal use only Nature of this document This presentation has been prepared by Australian Potash Limited (APC or the Company). The information is based on publicly available information, internally developed data and other sources. By receiving this presentation, you acknowledge and
Slide 3: Australia's Green SOP Project
A genuinely Australia’s Green SOP Project For personal use only green, premium fertiliser FEED Program positions the Lake Wells SOP K-BriteTM product as a genuinely green, premium fertiliser product for distribution into the world’s most lucrative markets 100% owned project in Tier 1 jurisdiction 17
Slide 4: The Lake Wells Sulphate of Potash Project: The essential metrics
The Lake Wells Sulphate of Potash Project The essential For personal use only metrics 100% OWNED – TIER 1 LOCATION PRE-TAX# NPV8 A$415M A$88M EBITDA# (AVG ANNUAL OVER AUSTRALIA’S LARGEST MEASURED LOM) JORC COMPLIANT SOP RESOURCE CASH COST# US$251/t MINING LEASES & ENVIRONMENTAL APPROVALS SOP PRICE#
Slide 5: The Lake Wells Sulphate of Potash Project: The essential metrics
The Lake Wells Sulphate of Potash Project The essential For personal use only metrics 30 YEARS OF SOP PREMIUM PRODUCTS 90% PRODUCTION AT STANDARD 170,000 GRANULAR WATER SOLUBLE OF PRODUCTION TONNES PER ANNUM ORGANIC CERTIFICATION UNDER OFFTAKE RENEWABLE GREEN LOAN NAIF FUNDING ENERGY LOW CO2 EMISSIO
Slide 6: FEED Summary Financial metrics
FEED Summary Financial For personal use only metrics The Lake Wells Sulphate of Potash Project Strong Returns in All Scenarios Assumptions Unit SOP Price (495-605 US$/t) 286 544 SOP price [real] US$/t 550 FX (0.77-0.63 US$/A$) 312 542 FX rate US$:$A 0.70 Opex (+/-10%) 371 460 Discount rate % 8.0 Cap
Slide 7: Lowest Quartile on Global Cost Curve
Lowest Quartile on Global Cost For personal use only Curve Global FOB SOP cost curve 2018 Mannheim capacity: high energy, Brine mineralisation, long First Peer Quartile 540 Sustainable Production FOB cost (US$/t) Comparison high cost, environmental issues evaporation timeframe Mannheim 480 Primary O
Slide 8: Contracting Strategy
Minimising the risk of cost Contracting Strategy For personal use only overruns, schedule creep and process under-performance +75% of construction contracts by value are EPC 6 Packages EPC Contracted Why? SOP process plant Schedule guarantee Borefield fit-out & HV network Price guarantee Power stati
Slide 9: Pricing the SOP Product
Pricing the SOP Product Premium product For personal use only commands premium pricing • Granular or • Soluble High K2O • +52% K2O organic • Organic • 50% - 52% • Sustainable High K2O • Bagged K2O granular • Soluble Standard SOP • Granular • Organic Product quality • Powdered • 50% - 52% US$610++ •
Slide 10: Offtakes over 90% of Production
Offtakes over 90% of Production Tier 1 global partners For personal use only Third party validation 30,000 tpa K-BriteTM 20,000 tpa K-BriteTM through Europe 50,000 tpa K-BriteTM through China through USA Bankable Offtake agreements: • Take-or-pay 20,000 tpa K-BriteTM 30,000 tpa K- through Australia
Slide 11: Renewable Energy
Renewable Energy For personal use only High penetration renewables • 44% base case Renewable Energy Penetration rate rising to +60% • Material impact on reducing carbon emissions • Mannheim process generates 3 times the carbon emissions of Lake Wells • Contract delivers APC financial benefits of tec
Slide 12: Financing the Build
NAIF Financing the Build EFA For personal use only Commercial banks Equity 01 NAIF 02 EFA • Investment decision approved February 03 Banks 2021 • Conditional approval April 2021 04 Equity • A$140 million • Foreign institutions • 17-year tenor • A$45 million • Domestic institution • 10-year tenor [AU
Slide 13: Timeline to Production
Timeline to Production For personal use only Conservative schedule commitments www.australianpotash.com.au 13
Slide 14: Corporate Snapshot
Strong share price performance Corporate Snapshot For personal use only Strong balance sheet Zero debt Capital Structure* 16 $0.250 Share Price (19 May 2021) $0.175 14 Shares on Issue 635.6m $0.200 12 Listed options1 51.3m 10 $0.150 Unlisted options & Volume (m) 11.9m Price A$ Performance Rights2 8
Slide 15: Community, Environment and Sustainability
Community Sustainability For personal use only Environment Aboriginal culture Understand, Replacing and Respect, Protect reducing a material carbon footprint Employee Cultural Enviro Commitments Ma laces eim Rep P LSO High-penetration n En Cu gem nnh (c.44%) renewable ment ga le Employment & power s
Slide 16: Board
Skills Board For personal use only Experience Competence Jim Brett Rhett Matt Cathy Walker Lambert Brans Shackleton Moises Chairman Non-executive Director Project Director Managing Director & CEO Non-executive Director § Appointed Aug 2018 § Appointed May 2017 § Appointed NED May 2017 § Appointed Ju
Slide 17: Management Team
Skills Management Team For personal use only Experience Competence Matt Shackleton Stewart McCallion Ryan Duncan Simon Page Chris Shaw Managing Director & CEO Project Manager Technical Manager Hydrogeologist Exploration Manager § Project manager at § Direct salt processing § 25 years experience in §
Slide 18: Key Implementation Partners
Key Implementation Partners Experienced For personal use only Visible Key Implementation Partners1 Consultants 1 Implementation partner contracts subject to on-going review and finalisation: Partners identified have been advised of their ‘Preferred Contractor’ position www.australianpotash.com.au 18
Slide 19: Lake Wells Delivering into Favourable Structural Change
30+ year mine life Renewable power solution For personal use only Organic certification Green loan verification Lake Wells Delivering into Favourable Structural Change www.australianpotash.com.au 19
Slide 20: SOP Pricing: SOP trades at a premium to MOP
SOP Pricing SOP trades at a For personal use only premium to MOP SOP bulk fob NW Europe MOP bulk fob NW Europe SOP premium to MOP – Why? 700 • Suitability for higher value crops • Suitability for chloride sensitive crops 600 • Scarcity of primary deposits 500 Conservative US$550/t SOP used in FEED 4
Slide 21: Our Market
SOP is the premium form of Our Market For personal use only an essential, non- substitutable plant fertiliser 7M TONNES Essential High Margin US$3.5B Market Size <1% Chloride/17% Sulphur Premium pricing SOP Global Demand • SOP = 10% of the global demand • Potassium is essential • Solar salt = lowest
Slide 22: The Landscape is Changing Now
Mannheim SOP The Landscape is Changing Now production faces For personal use only increasing environmental pressure • SOP application rates in China are among the highest globally at about 68.5kg/ha compared with 54.9kg/ha in Origin of global SOP supply the US, and a global average of just 28.5kg/ha
Slide 23: ESG and Risk Management
Skills ESG and Risk Management For personal use only Governance Commitment § ASX Corporate Governance Structures § ISO45001 Framework (Gold Standard) § Continuous training and improvement § Deep Commercial and Technical Experience § 1:25 OH&S Professionals on staff § Highly experienced and diversifi
Slide 24: For personal use only
For personal use only www.australianpotash.com.au +61 9322 1003 @OzPotash Suite 31, 22 Railway Road, Subiaco WA 6904
Slide 25: Appendix 1: Capital expenditure
CAPEX Summary Appendix 1: Capital For personal use only expenditure The Lake Wells Sulphate of Potash Project CAPEX A$m Delivery and Execution Risk Mitigated Owners Team 18 Capable & experienced owner’s team Bore drilling & development 16 Schedule guarantee, specialist contractor, productivity KPIs
Slide 26: Appendix 2: Low risk, Proven Production Process
Proven Production Process Appendix 2: Low risk For personal use only Bore-field development Brine pumping Pre-concentration Crystallisation Processing • Brine is pumped from the • Brine is pumped into the pre- • Potassium-rich salts crystallise out • Potassium-rich salts refined by palaeochannel bor
Slide 27: Appendix 3: Flow sheet
Appendix 3: Flow sheet Process Flow Sheet For personal use only including Granulation circuit Bagging plant • Lake Wells flow-sheet augmented with granulation circuit and bagging plant to produce premium SOP • Offtake and distribution agreements provide uncapped exposure to premium price points • Pa