Greenx Metals Limited · ASX:GRX
Greenx Metals — Prairie Mining — Technical Presentation (March 2016)
37 slides from Greenx Metals's technical presentation, March 2016
Slide 1: Lublin Coal Project Pre-Feasibility Study Results
LUBLIN COAL PROJECT PRE-FEASIBILITY STUDY RESULTS March 2016 - ASX, LSE & WSE: PDZ
Slide 2: Investment Highlights
INVESTMENT HIGHLIGHTS Lowest Operating Costs into Europe PFS demonstrates the potential to have some of the lowest operating cash costs (US$25/t FOR) for hard coal delivered into key European markets Strategic Large Scale, Long Life Asset PFS confirms the robust economics of the Lublin Coal Project
Slide 3: The Lublin Coal Project – World Class Potential
THE LUBLIN COAL PROJECT – WORLD CLASS POTENTIAL An advanced, world class coal project in a proven coal basin located close to existing infrastructure 3 | March 2016 | Lublin Coal Project
Slide 4: Strategic European Supply Location
STRATEGIC EUROPEAN SUPPLY LOCATION • Prairie has access to multiple potential markets for the sale of its coal products given the location of the Lublin Coal Project in the heartland of industrial Europe, with excellent rail and port access • The Company will focus its marketing efforts on export ma
Slide 5: Key PFS Results
KEY PFS RESULTS Lublin Coal Project PFS Key Parameters Low Mining Method Longwall Operating US$ 24.96/tonne ROM Coal Production (Steady State Average) 8.0Mtpa Costs1 Clean Coal Production (Steady State Average) 6.34Mtpa Initial Mine Life 24 years Coal Handling & Process Plant Dense Media Strong EBIT
Slide 6: Low Operating Costs
LOW OPERATING COSTS Operating Costs (FOR Mine Gate) US$ per tonne Labour Costs 4.52 Materials and Consumables 5.34 Power 3.60 Leased Equipment and Contractors 5.32 Direct Mining Cost 18.79 CHPP, Waste Management & Logistics 2.92 Direct Production Cost 21.71 SG&A 2.25 Mine Closure Fund 0.21 Average O
Slide 7: Project Configuration
PROJECT CONFIGURATION Lublin Coal Project Configuration - PFS (March 2016) All major permitting processes are well underway including the environmental and social impact assessment, spatial planning (re-zoning) and the Deposit Development Plan 7 | March 2016 | Lublin Coal Project
Slide 8: Low Capital Intensity
LOW CAPITAL INTENSITY Capital Cost Summary US$ m Lublin Coal Project Mine Site Layout - PFS (March 2016) Shaft Costs (Sinking & Furniture) 233.3 Underground Development Drivages 34.1 Underground Infrastructure & Ancillary Equipment 87.6 (Belts, Ventilation, Electrics, Power Centers) Capitalised Pre-
Slide 9: High Quality JORC Compliant Resources & Reserves
HIGH QUALITY JORC COMPLIANT RESOURCES & RESERVES Lublin Coal Project - JORC Coal Reserve Estimate – 389 & 391 Seams* (million tons) Indicated Resources 181 Probable Recoverable Coal Reserves (Mt) 170 Probable Marketable Coal Product (Mt) 139 Product Yield 81.9% * Recoverable Reserves are stated on a
Slide 10: PFS Mine Plan – Significant Upside Potential
PFS MINE PLAN – SIGNIFICANT UPSIDE POTENTIAL Conversion of the remaining 87mt inferred resources within the 391 seam could potentially expand production over and above the PFS mine plan 10 | March 2016 | Lublin Coal Project
Slide 11: Superior Coal Quality
SUPERIOR COAL QUALITY Semi Soft Coking Semi-Soft Coking Coal Comparison Lublin Coal Project¹ JSW (Poland) Glencore (NSW) Solid Energy (NZ) Free Swell Index 4.0 – 6.0 6.0 4.0 – 6.0 3.0 – 5.0 Ash (% AD) ≤4.0 8.0 9.0 – 9.5 4.5 Volatile Matter (% AD) 34– 35 37.0 33.0 - 36.5 38.0 Premium Thermal Thermal
Slide 12: Coal Price Forecasts
COAL PRICE FORECASTS CRU forecasts that both metallurgical and thermal coal prices will recover over the medium to long term Metallurgical Coal - International Benchmark Long Term Price Forecasts Thermal Coal - International Benchmark Long Term Price Forecast 180 100 160 HCC Semi-soft PCI 90 CFR Chi
Slide 13: PFS – Product Mix and Price Assumptions
PFS – PRODUCT MIX AND PRICE ASSUMPTIONS PFS Saleable Coal Quality Specifications Product Coal Quality (As Received Basis) % LOM Saleable Sizing Ash Moisture Sulphur CV (kcal/kg NAR) Coal Production Metallurgical Coal 42.0% 0 to 30mm ≤4% 10.5% 0.9% 29,170 API Specification Coal 22.7% 0 to 30mm 14% 10
Slide 14: High Margin, Significant Cash Flow Generation
HIGH MARGIN, SIGNIFICANT CASH FLOW GENERATION Project EBITDA, Net Cash Flow (After Tax) and Annual Production 500 10 400 8 Saleable Coal Production (Million Tonnes) 300 6 200 4 US$ Million 100 2 0 0 (100) (2) (200) (4) EBITDA ($M) Net Cash Flow (After Tax, $M) Saleable Tonnes (Million Tons) (300) (6
Slide 15: PFS – Significant Value Creation Potential
PFS – SIGNIFICANT VALUE CREATION POTENTIAL The (ungeared) Net Present Value post tax is US$1.39 billion at an 8% discount rate (real), and the IRR is 26.6% Project Post-Tax NPV Sensitivity Analysis Post-Tax NPV at 8% discount rate (US$ billion) -20% -10% Base Case +10% +20% Sales Price 0.79 1.09 1.3
Slide 16: Pre-Feasibility Study Consultants
PRE-FEASIBILITY STUDY CONSULTANTS Consultant Activity Geotechnical and Roof Support Analysis, Mine Planning and Mineral Reserve Golder Associates (UK) (Golders) Estimation, Hydrogeology, Financial Modelling, and Study Management Royal HaskoningDHV UK Ltd (RHDHV) Geology, Mineral Resource Estimation,
Slide 17: Coal Remains Fundamental to Europe
COAL REMAINS FUNDAMENTAL TO EUROPE During 2014, Europe¹ consumed over 712mt of European Hard Coal Imports & Production by Country (mt) - 2014 coal, of which 311mt was hard coal and the remainder lignite (brown coal). In 2014 178 Hard Coal Production (2014) Hard Coal Imports (2014) alone, imports of
Slide 18: Highly Favourable Regional Supply/Demand Dynamics
HIGHLY FAVOURABLE REGIONAL SUPPLY/DEMAND DYNAMICS Declining domestic production and Germany – Hard Coal Consumption & Production increased reliance on imports are 80.0 the key trends forecast for hard coal 70.0 Estimated Domestic Supply Deficit markets in Germany, Poland and 60.0 55mt Czech Republic
Slide 19: Net Import Requirement of Hard Coal Forecast
Prairie forecasts a net import requirement of hard coal into Germany, Poland and Czech Republic of more than 75mtpa by 2020 19 | March 2016 | Lublin Coal Project
Slide 20: Favourable Regional Transport Costs
FAVOURABLE REGIONAL TRANSPORT COSTS Strategic European supply location results Transport Cost from Lublin in low transport costs for product shipped Destination Mode Cost (US$/t) from the Lublin Coal Project Berlin IPP Rail ~$15.2/t Hansaport Polish Rail + Ship from Gdansk ~$19.2/t Czech Steelworks
Slide 21: Lowest Delivered Cash Costs into Key European Markets
LOWEST DELIVERED CASH COSTS INTO KEY EUROPEAN MARKETS • Semi-soft coking coal product from Semi-soft coking coal quality adjusted costs delivered ARA*, 2015 the LCP is anticipated to be at the 160 160 bottom of the global cash cost curve Australia for semi-soft coking coal delivered to USA 140 140 B
Slide 22: Significant European Coking Coal Demand
SIGNIFICANT EUROPEAN COKING COAL DEMAND • In 2014 Europe consumed a total of European coking coal demand (mt) Polish coke exports by major destination (mt) 77mt coking coal, of which 13mt was semi-soft coking coal • Europe relies heavily on imports of 15mt 0.25 coking coal, importing 55mt (i.e. ~71%
Slide 23: High Quality Transport Infrastructure
HIGH QUALITY TRANSPORT INFRASTRUCTURE Rail Accessibility Underutilised Port Capacity • High quality rail lines connect the Lublin region with • Port of Gdansk located 520km from project by rail with the rest of Europe approximately 15mtpa spare coal export capacity • Direct access to major European
Slide 24: Lublin Coal Basin: Highly Favourable Geology
LUBLIN COAL BASIN: HIGHLY FAVOURABLE GEOLOGY The Lublin Coal Basin has highly favourable geological and mining conditions compared to the Upper Silesian Coal Basin. The International Energy Agency* predicts that the Lublin Coal Basin has the potential to strengthen competitive coal exports from Pola
Slide 25: Central European Coal Mining: Unit Cost Comparison
CENTRAL EUROPEAN COAL MINING: UNIT COST COMPARISON 100 90 Mine Operating SG&A Current Hard Coking Coal Price Cost* FOB Australia**: US$78.20/t 80 Sources 1: JSW: Quarterly Report for the period of 12 months ended 31 December 2015 prepared in accordance with IFRS; Cost of sales adjusted for coke busi
Slide 26: Ideal Geological and Mining Conditions for Longwall Operations
The Lublin Coal Basin has ideal geological and mining conditions for high productivity longwall operations As a result, the Bogdanka mine is currently the lowest cost hard coal mine in Europe Prairie will pioneer the introduction of international best practice in mine design, production organisation
Slide 27: Even Better Results Are Possible
EVEN BETTER RESULTS ARE POSSIBLE… …by taking a modern approach to mine design and incorporating international best practice International Longwall Coal Mine Labour Productivity Comparison Country Tonnes / man / year USA 10,000 Australia 7,000 Prairie Mining – Lublin Coal Project (PFS)* ~3,750 Bogdan
Slide 28: By Mining the Highly Productive 391 Seam
…BY MINING THE HIGHLY PRODUCTIVE 391 SEAM The 391 seam is thicker, contains the highest quality coal in the Lublin Coal Basin, with mining conditions expected to be better due to shallower relative depth Note: Average insitu seam quality reported at LW Bogdanka S.A concession: Seam 382 (Ash: 13.12%,
Slide 29: By Implementing International Best Practice
…BY IMPLEMENTING INTERNATIONAL BEST PRACTICE Coal mining technology in Poland has not kept pace with international best practices, thereby negatively impacting efficiency of existing mines. Prairie will start with a “clean slate”, drawing on modern international experience in all areas of developmen
Slide 30: Modern Coal Washing Techniques
MODERN COAL WASHING TECHNIQUES • Coal washing removes unwanted impurities Washplant Flowsheet Lublin Coal Project (PFS) such as rock, “dirt”, ash, sulphur, and moisture from ROM (unprocessed coal) feedstocks in order to improve coal utilization properties, marketability and value • Prairie’s wash pl
Slide 31: Long Term Strategic Partner – CD Capital
LONG TERM STRATEGIC PARTNER – CD CAPITAL • Prairie, through its subsidiary PDZ Holdings, Prairie Mining Limited (ASX/WSE/LSE: PDZ) concluded an Investment Agreement with global natural resources private equity fund At 9 March 2016 CD Capital in July 2015 to invest up to A$83m into the Lublin Coal Pr
Slide 32: Clear Pathway to a Mining Concession
CLEAR PATHWAY TO A MINING CONCESSION Geological Documentation Environmental Land Rezoning & Deposit Development Plan Impact Assessment & Acquisitions • Exploration program completed and • Environmental Baseline Studies • Spatial planning and land acquisition all terms of Exploration Concessions comp
Slide 33: Advancing Towards Mine Construction
ADVANCING TOWARDS MINE CONSTRUCTION 2015 2016 2017 Project Milestones Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Coal Resource Upgrade Coal Marketing Studies Pre-Feasibility Study Complete Agreed Exploration Program EIA Baseline Studies EIA Study Financing Work Stream Further Technical Studies Po
Slide 34: Government Policy Supports Development of the Lublin Coal Basin
GOVERNMENT POLICY SUPPORTS DEVELOPMENT OF THE LUBLIN COAL BASIN On 16 February 2016 Poland’s Deputy Prime Minister M. Morawiecki delivered an outline of the new national economic development plan The new economic The Plan emphasizes development of Plan for Poland: Eastern Poland through: • Encompass
Slide 35: Significant Benefits to the Lublin Region
SIGNIFICANT BENEFITS TO THE LUBLIN REGION A new mine in Lublin has the potential to deliver significant benefits to the region and has resulted in local municipalities showing strong support for Prairie’s development plans The Lublin Region is Deloitte Economic Benefits Study² characterised by: conf
Slide 36: Summary
SUMMARY Lublin Coal Project is set to become a strategic new supply of coal in Europe… Substantially Semi-Soft Lowest Cash Costs into Key Strategic De-risked Coking Coal European Markets Location • Clear and exclusive • Benchmarked to • Highly favourable • Located approx. 20 pathway towards a Europe
Slide 37: Disclaimer
DISCLAIMER Cautionary Statements and Important Information This presentation has been prepared as a summary only, and does not contain all information about Prairie’s assets and liabilities, financial position and performance, profits and losses, prospects, and the rights and liabilities attaching t