Arafura Rare Earths Limited · ASX:ARU
Arafura Rare Earths — Arafura Resources — Investor Presentation (June 2019)
42 slides from Arafura Rare Earths's investor presentation, Jun 20, 2019
Slide 1: Transformational Equity Capital Raising Presentation
For personal use only Arafura Resources Limited (ASX:ARU) Transformational Equity Capital Raising Presentation Not for release to US wire services or distribution in the United States of America June 2019 Investor Presentation
Slide 2: Important Notice – Disclaimer
Not for release to US wire services or distribution in the United States of America Important Notice – Disclaimer 2 For personal use only This presentation has been prepared by Arafura Resources Limited (Arafura, Arafura Resources or the Company) in relation to an offer of new fully paid ordinary sh
Slide 3: Transformational Equity Raising
For personal use only Not for release to US wire services or distribution in the United States of America 3 Transformational Equity Raising Arafura Resources Limited (ASX:ARU)
Slide 4: Investment Proposition
Not for release to US wire services or distribution in the United States of America Investment Proposition 4 For personal use only ▪ Arafura Resources Limited ASX listed company developing its 100% owned Nolans Rare Earths (NdPr) Project located in the Northern Territory, Australia. ▪ Rare earths in
Slide 5: Becoming Australia’s Next Fully Integrated NdPr Producer
Not for release to US wire services or distribution in the United States of America Becoming Australia’s Next Fully Integrated NdPr Producer 5 For personal use only Arafura’s Portfolio of Australian assets ▪ 100% ownership of Nolans Rare Earth Project ▪ Mine and all downstream processing facilities
Slide 6: Transformational Equity Raising
Not for release to US wire services or distribution in the United States of America Transformational Equity Raising 6 For personal use only Strategy to accelerate engineering activities to be aligned with forecast NdPr price Funding to increases from 2020 Accelerate 1 Commencing Front End Engine
Slide 7: Entitlement Offer Summary
Not for release to US wire services or distribution in the United States of America Entitlement Offer Summary 7 For personal use only Non-Renounceable Entitlement Offer ▪ A seven (7) for twenty (20) Non-renounceable pro-rata Entitlement Offer at 8.5¢ per share to raise approximately $23.2 million (b
Slide 8: Introducing Talaxis
Not for release to US wire services or distribution in the United States of America Introducing Talaxis 8 For personal use only ▪ Talaxis is a wholly owned subsidiary of Noble. ▪ Noble is a leading energy products and industrial raw materials supply chain manager, who markets, processes, finances an
Slide 9: Entitlement Offer Details
Not for release to US wire services or distribution in the United States of America Entitlement Offer Details 9 For personal use only Arafura intends to use funds raised: ▪ To progress further development of the Nolans NdPr Project including project execution readiness to allow award of key design a
Slide 10: Effect of Entitlement Offer
Not for release to US wire services or distribution in the United States of America Effect of Entitlement Offer 10 For personal use only The below assumes the maximum number of New Shares are issued under the Entitlement Offer and no options or performance rights are exercised or other shares are is
Slide 11: Indicative Entitlement Offer Timetable
Not for release to US wire services or distribution in the United States of America Indicative Entitlement Offer Timetable 11 For personal use only Event Date Announcement of Entitlement Offer 20 June 2019 Record Date for the Entitlement Offer 7.00pm (AEST) 25 June 2019 Entitlement Offer Opens 28 Ju
Slide 12: For personal use only
For personal use only Not for release to US wire services or distribution in the United States of America 12 Company update Arafura Resources Limited (ASX:ARU)
Slide 13: Corporate Snapshot
Not for release to US wire services or distribution in the United States of America Corporate Snapshot 13 For personal use only Capital Structure ASX Code ARU ASX Share Price (17 June 19) $0.125 Shares on Issue 781m Market Capitalisation $97.6m 12 Month Liquidity $39.9m Cash $7.9m Debt Nil Enterpris
Slide 14: Nolans DFS Complete
Not for release to US wire services or distribution in the United States of America Nolans DFS Complete 14 For personal use only ▪ Confirms Nolans as a world class NdPr project ▪ Annual NdPr production 4,357 tonnes p.a. ▪ Ultra-low cost producer at US$25.94/kg NdPr ▪ Robust economics with average EB
Slide 15: Capital Cost Breakdown & NPV Sensitivity
Not for release to US wire services or distribution in the United States of America Capital Cost Breakdown & NPV Sensitivity 15 For personal use only Key Sensitivities Refer ASX announcement 7 February 2019: Nolans Project Definitive Feasibility Study Arafura Resources Limited (ASX:ARU)
Slide 16: Offtake and Project Funding Discussions Underway
Not for release to US wire services or distribution in the United States of America Offtake and Project Funding Discussions Underway 16 For personal use only ▪ Offtake agreements to underpin project funding ▪ Customer engagement targeted at NdPr users not aligned with China 2025 strategy ▪ Japan – N
Slide 17: NdPr Market Update
For personal use only Not for release to US wire services or distribution in the United States of America 17 NdPr Market Update Arafura Resources Limited (ASX:ARU)
Slide 18: NdPr Forecast Puts Arafura in the “Zone”
Not for release to US wire services or distribution in the United States of America NdPr Forecast Puts Arafura in the “Zone” 18 For personal use only NdPr Oxide China Domestic US/ kg & Nolans 250 200 150 100 Roskill 2020-2030 NdPr Price Forecast Range US$66kg-US$90kg 50 0 5/05/2010 5/05/2011 5/05/20
Slide 19: Nolans Project
For personal use only Not for release to US wire services or distribution in the United States of America 19 Nolans Project Arafura Resources Limited (ASX:ARU)
Slide 20: 100% Australian Domiciled Project
Not for release to US wire services or distribution in the United States of America 100% Australian Domiciled Project 20 For personal use only ▪ Tailings and process residues permanent disposed at site. ▪ Stuart Highway is 10 km east. ▪ Product traceability and waste management certainty. ▪ Alice Sp
Slide 21: Long Life Asset
Not for release to US wire services or distribution in the United States of America Long Life Asset 21 For personal use only RESOURCES TONNES (m) RARE EARTHS TREO % PHOSPHATE P2O5 % NdPr Enrichment % Measured 4.9 3.2 13 26.1 Indicated 30 2.7 12 26.4 Inferred 21 2.3 10 26.5 TOTAL 56 2.6 11 26.4 As an
Slide 22: Drill & Metallurgical Program
Not for release to US wire services or distribution in the United States of America Drill & Metallurgical Program 22 For personal use only ▪ DFS completed in February 2019 included a mine life of 23 years based on reserves only but includes the costs of mining inferred resources within the LOM pit.
Slide 23: Process Flowsheet Supported by Successful Pilot
Not for release to US wire services or distribution in the United States of America Process Flowsheet Supported by Successful Pilot 23 For personal use only Arafura Resources Limited (ASX:ARU)
Slide 24: Key Government Approvals Secured
Not for release to US wire services or distribution in the United States of America Key Government Approvals Secured 24 For personal use only NT Environment Protection Authority (EPA) Recommends Environmental Approval “The NT EPA considers that …… the Project can be managed in a manner that ….. avoi
Slide 25: Technology Program
Not for release to US wire services or distribution in the United States of America Technology Program 25 For personal use only ✓ Phase 1 ✓ Beneficiation 5,000 kg high- phosphate concentrate ✓Phase 2 >82% NdPr, >90% Phase 7 P2O5 recovery ✓Phosphate Extraction Beneficiation Pilot Plant Rare Earth
Slide 26: DFS Completed February 2019
Not for release to US wire services or distribution in the United States of America DFS Completed February 2019 26 For personal use only 23 year mine life 4,357 tonnes NdPr p.a. EBITDA A$377m p.a. Ultra low OPEX of US$25.94/kg NdPr Capital payback in year 5 Highly leveraged to NdPr price Refer ASX a
Slide 27: Strong News Flow
Not for release to US wire services or distribution in the United States of America Strong News Flow 27 For personal use only ▪ Native Title Agreement. ▪ Mining Lease. ▪ Progress for product offtake agreements and project funding. ▪ Drilling and metallurgical results. ▪ Contractor appointment, secur
Slide 28: Appendices
For personal use only Not for release to US wire services or distribution in the United States of America 28 Appendices Appendix A: Risks Appendix B: Experienced Board Appendix C: Experienced Management Appendix D: Compliance Statements- Mineral Reserves, Resources & Production Targets Arafura Resou
Slide 29: Appendix A: Risks
Not for release to US wire services or distribution in the United States of America Appendix A: Risks 29 For personal use only Risk factors You should be aware that being issued New Shares involves various risks. This Section discusses some of the key risks associated with an investment in New Share
Slide 30: Appendix A: Risks
Not for release to US wire services or distribution in the United States of America Appendix A: Risks 30 For personal use only 1.1 Company specific risks (a) Exploration and production The future profitability of the Company (and its subsidiaries) (Group), and the value of the New Shares are directl
Slide 31: Appendix A: Risks
Not for release to US wire services or distribution in the United States of America Appendix A: Risks 31 For personal use only (c) Operating Industry operating risks include, but are not limited to, fire, explosions and environmental hazards. The occurrence of any of these risks could result in subs
Slide 32: Appendix A: Risks
Not for release to US wire services or distribution in the United States of America Appendix A: Risks 32 For personal use only (f) Reserves and resource estimates (continued) In addition, reserve and contingent resource estimates (production targets and forecast financial information derived from a
Slide 33: Appendix A: Risks
Not for release to US wire services or distribution in the United States of America Appendix A: Risks 33 For personal use only (i) Environmental The Group’s exploration, development and production activities are subject to legislation regarding environmental matters. The legal framework governing th
Slide 34: Appendix A: Risks
Not for release to US wire services or distribution in the United States of America Appendix A: Risks 34 For personal use only (j) Title (continued) In 2017 the Northern Territory Government (NTG) introduced a “Shared Land Use” policy which encourages consultation between the holder of a mineral tit
Slide 35: Appendix A: Risks
Not for release to US wire services or distribution in the United States of America Appendix A: Risks 35 For personal use only (l) Access to Capital Markets The Group’s business relies on access to debt and equity funding. There can be no assurance that sufficient debt or equity funding will be avai
Slide 36: Appendix A: Risks
Not for release to US wire services or distribution in the United States of America Appendix A: Risks 36 For personal use only (o) Financial risks The Group’s activities expose it to a variety of financial risks, including: • Market risk: The risk that the fair value of future cash flows of a financ
Slide 37: Appendix A: Risks
Not for release to US wire services or distribution in the United States of America Appendix A: Risks 37 For personal use only 1.2 General risks (a) Potential for dilution If shareholders do not take up their entitlements under the Entitlement Offer, then their percentage holding in the Company may
Slide 38: Appendix A: Risks
Not for release to US wire services or distribution in the United States of America Appendix A: Risks 38 For personal use only Further, the effect of these conditions on the Group’s ability to refinance its debt obligations, and the terms on which any such refinancing can be obtained, is uncertain.
Slide 39: Appendix A: Risks
Not for release to US wire services or distribution in the United States of America Appendix A: Risks 39 For personal use only 1.3 Speculative investment The above list of risk factors ought not to be taken as an exhaustive list of the risks faced by the Company or by investors in the Company. The a
Slide 40: Appendix B: Experienced Board
Not for release to US wire services or distribution in the United States of America Appendix B: Experienced Board 40 For personal use only MARK SOUTHEY CHRIS TONKIN NON-EXECUTIVE CHAIRMAN NON-EXECUTIVE DIRECTOR Mark Southey has previously held senior executive Chris Tonkin has over 35 years’ experie
Slide 41: Appendix C: Experienced Management
Not for release to US wire services or distribution in the United States of America Appendix C: Experienced Management 41 For personal use only RICHARD BRESCIANINI PETER SHERRINGTON GENERAL MANAGER EXPLORATION & CHIEF FINANCIAL OFFICER & COMPANY DEVELOPMENT SECRETARY Richard has over 30 years’ exper
Slide 42: Appendix D: Mineral Reserves, Resources and Production Targets
Not for release to US wire services or distribution in the United States of America Appendix D: Mineral Reserves, Resources and Production Targets 43 For personal use only Ore Reserves The information in this presentation that relates to Ore Reserves is extracted from Arafura’s ASX announcement date
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