Lynas Rare Earths Limited · ASX:LYC
Lynas Rare Earths — Lynas — Investor Presentation (February 2012)
30 slides from Lynas Rare Earths's investor presentation, Feb 14, 2012
Slide 1: Rare Earths – we touch them everyday
Lynas Corporation Rare Earths – we touch them everyday For personal use only February 2012
Slide 2: Disclaimer
Disclaimer For personal use only This Presentation has been prepared by Lynas Corporation Limited (ABN 27 009 066 648) (Lynas or the Company). This Presentation contains summary information about Lynas and its subsidiaries (Lynas Group) and their activities current as at the date of this Presentatio
Slide 3: Agenda
Agenda For personal use only 1. SAFETY AND SUSTAINABILITY 2. WESTERN AUSTRALIA OPERATIONS 3. MALAYSIA OPERATIONS 4. SALES & MARKETING 5. FINANCIAL UPDATE 3
Slide 4: Lynas will offer a source of supply of Rare Earths outside of China
Lynas will offer a source of supply of Rare Earths outside of China For personal use only LYNAS VITALS AT A GLANCE VISION: Be the leader in Rare Earths for a sustainable future. EXCHANGES: ASX (code LYC), OTCQX (code LYSDY) Mount Weld INDICES: ASX 100, MSCI Australia SHARES: 1,714m on issue (1,885m
Slide 5: Safety and Sustainability
For personal use only SAFETY AND SUSTAINABILITY 5
Slide 6: Lynas is a safe and sustainable source of Rare Earths supply
Lynas is a safe and sustainable source of Rare Earths supply For personal use only STRONG SAFETY CULTURE Malaysia Operations Gas Treatment Lynas has achieved more than 7,000,000 hours Lost Time Injury (LTI) free on the LAMP construction project IAEA confirmed compliance of the LAMP design with i
Slide 7: Western Australia Operations
For personal use only WESTERN AUSTRALIA OPERATIONS 7
Slide 8: Mine within Central Lanthanide Deposit, 15.0 million tonne resource
The mine is within the Central Lanthanide Deposit (CLD), a Resource of 15.0 million tonnes at 9.8% for 1.5 million tonnes of contained REO For personal use only MOUNT WELD STOCKPILES WITH RARE EARTH OXIDE PERCENTAGES DUNCAN DEPOSIT (DD) Offices 773,000t on stockpiles 8% 13% DD CLD 17% DEPOSIT 26% 15
Slide 9: The Concentration Plant commenced feed of ore in May 2011
The Concentration Plant commenced feed of ore in May 2011 For personal use only OVERHEAD VIEW OF THE CONCENTRATION PLANT 9
Slide 10: Concentration Plant continues to perform well
Concentration Plant continues to perform well – this part of the production process is now significantly de-risked For personal use only MOUNT WELD CONCENTRATION PLANT Concentration Plant December December Performance 2011 ramp- up plan Final concentrate 37.0% 36.0% grade Recovery 71.7% 65.0% Flotat
Slide 11: Duncan deposit is complementary to current operations at the CLD
The Duncan deposit is complementary to the current operations at the Central Lanthanide Deposit For personal use only CENTRAL LANTHANIDE DEPOSIT AND DUNCAN DEPOSIT RESOURCES Comparison of REE distribution CLD & Duncan Mineral Resource (2.5% REO cut-off) CLD Duncan REO (Secondary Monazite) (Crandalit
Slide 12: Duncan is a highly prospective deposit that could provide HREEs
Duncan is a highly prospective deposit that could provide a new source of HREEs For personal use only Total Mount Weld resources Duncan is a shallow deposit that could be easily exploited using open cut mining Duncan is open to the east and southwest (see chart) with a high Potential extension C
Slide 13: Malaysia Operations
For personal use only MALAYSIA OPERATIONS 13
Slide 14: Current status of the LAMP
Current status of the LAMP For personal use only MAJOR MILESTONES TO DATE LAMP construction: 91% complete Ready-for-Start-Up program (operational preparedness): 91% complete Malaysia headcount: 236 (now at 85% of total expected workforce) Pre-commissioning test packs: 33% complete Temporar
Slide 15: LAMP Temporary Operating Licence
LAMP Temporary Operating Licence For personal use only Licence approved in February 2012 Lynas respects the regulatory approvals process in Malaysia. Lynas has intensified its community consultation and engagement following the IAEA review. We intend to maintain this commitment to all stakeholde
Slide 16: Schematic - Lynas Advanced Materials Plant core process
Schematic - Lynas Advanced Materials Plant core process, which uses mature industry technology For personal use only 16
Slide 17: The LAMP is 0.8km wide and 1.4km long
The Lynas Advanced Materials Plant (LAMP) is 0.8km wide (N-S) and 1.4 km long (E-W) For personal use only OVERVIEW OF LEACHING, UP AND DOWNSTREAM SEPARATION AND PRODUCT FINISHING WORKSHOPS 17
Slide 18: LAMP construction is more than 90% complete
LAMP construction is more than 90% complete For personal use only Cracking (Rotary Kiln) Gas Treatment Primary Leaching Secondary Leaching 18
Slide 19: LAMP construction is more than 90% complete
LAMP construction is more than 90% complete For personal use only Upstream Extraction Downstream Extraction Post Treatment Tunnel Furnaces 19
Slide 20: The path to operating cash flow
The path to operating cash flow For personal use only Key steps to first cash flow Commissioning Commence First cash Construction First Customer Commercial & first feed to plant ramp- flow from completion kiln production qualification shipments up sales Current operational focus is construction co
Slide 21: Products are set for Phase 1; flexibility in Phase 2
The products are set for Phase 1; Lynas has product flexibility in Phase 2 For personal use only ANTICIPATED PHASE 1 ─ 11,000t REO PRODUCTS VOLUMES (tpa) Ce carbonate 2,600 La carbonate 1,350 Ce / La carbonate 4,000 Nd / Pr oxide 2,700 SEG + Heavy Rare Earths 480 PHASE 2 ─ ADDITIONAL 11,000t REO PRO
Slide 22: Sales & Marketing
For personal use only SALES & MARKETING 22
Slide 23: Sales & Marketing
Sales & Marketing For personal use only Key points Lynas’ philosophy is to establish a non-Chinese Rare Earths supply chain based on environmentally sustainable practices. Lynas’ Rare Earths Direct (RED) brand epitomises this philosophy. Lynas has entered into binding offtake agreements in each
Slide 24: Strategic Alliance with Sojitz for Japanese market supply
The Strategic Alliance with Sojitz shall provide a stable and long term source of supply for the Japanese market For personal use only LYNAS, SOJITZ AND JOGMEC HAVE EXECUTED DEFINITIVE AGREEMENTS Sojitz – Lynas Strategic Alliance Financing Availability Distribution & Agency Agreement Agreement Agree
Slide 25: Letter of Intent signed with Siemens for magnet JV
Letter of Intent signed with Siemens to establish a JV company for the sustainable production of neodymium-based Rare Earths magnets For personal use only LYNAS AND SIEMENS INTEND TO FORM A JOINT VENTURE FOR MAGNET PRODUCTION LYNAS SIEMENS Magnet technology and Long term supply manufacturing capabil
Slide 26: Financial Update
For personal use only FINANCIAL UPDATE 26
Slide 27: Budgeted Phase construction costs are fully funded
Budgeted Phase 1 construction costs are fully funded For personal use only PHASE 1 ESTIMATED CONSTRUCTION AND OTHER TOTAL SPEND TO 31/12/11 FUTURE SPEND CAPITAL COSTS A$m A$m A$m Mount Weld Concentration Plant 75.4 75.4 0.0 Lynas Advanced Materials Plant, Malaysia 349.1 255.0 94.1 Engineering and Pr
Slide 28: US$225m Convertible Bond issue to Mount Kellett
US$225m Convertible Bond issue to Mount Kellett provides comprehensive funding facility through to first cash flow from sales For personal use only In January 2012, Lynas executed binding documentation with Mount Kellett Sources of funds Uses of funds • US$50m Tranche 1 (already subscribed on • ~$17
Slide 29: Lynas – online in 2012, delivering Rare Earths globally
Lynas – online in 2012, delivering Rare Earths globally For personal use only • Our vision is to be the leader in Rare Earths for a sustainable future. • We are close to realising this vision. • Our supply of Rare Earths will be based on environmentally sustainable practices. • Lynas will be online
Slide 30: Note – Competent Person statement
NOTE For personal use only The information in this report that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Brendan Shand, who is a member of The Australasian Institute of Mining and Metallurgy. Brendan Shand is an employee of Lynas Corporatio