Australian Vanadium Limited · ASX:AVL
Australian Vanadium — Merger or Acquisition (September 2023)
61 slides from Australian Vanadium's merger presentation, Sep 25, 2023
Slide 1: Creating the Australian vanadium leader
Creating the Australian vanadium leader Merger with Technology Metals Australia & Equity Raising 25 September 2023 Not for release or distribution in the United States
Slide 2: Important Information & Disclaimer
Important Information & Disclaimer IMPORTANT – You must read the following before continuing prospectus or product disclosure statement prepared in accordance with the Corporations Act. Neither AVL nor TMT is responsible for updating, nor undertakes to update, this Presentation. This Presentation ha
Slide 3: Important Information & Disclaimer (cont.)
Important Information & Disclaimer (cont.) Not an offer particular needs of any recipient. Before making an investment decision, you should consider the appropriateness of the information having regard to these matters, any relevant offer document and in This Presentation is for information purposes
Slide 4: Important Information & Disclaimer (cont.)
Important Information & Disclaimer (cont.) Past Performance “will”, “intend”, “should”, “could”, “may”, “believe”, “forecast”, “estimate”, “target”, “outlook”, “guidance” and other similar expressions within the meaning of securities laws of applicable jurisdictions and include, but Past performance
Slide 5: Important Information & Disclaimer (cont.)
Important Information & Disclaimer (cont.) Financial Data Murchison Technology Project Metals Project Investors should be aware that this Presentation contains certain financial information and measures that are The information in this Presentation relating to production targets, or forecast financi
Slide 6: Important Information & Disclaimer (cont.)
Important Information & Disclaimer (cont.) Disclaimer of matters, including legal and regulatory requirements, logistical and registry constraints and the discretion of AVL and the Joint Lead Managers. Each of AVL, the Joint Lead Managers and their respective advisers, Macquarie Capital (Australia)
Slide 7: Important Information & Disclaimer (cont.)
Important Information & Disclaimer (cont.) No liability Acceptance To the maximum extent permitted by law, no representation or warranty, express or implied, is made by AVL By attending an investor presentation or briefing, or accepting, accessing or reviewing this Presentation you or TMT, their res
Slide 8: Today’s presenters and agenda
Today’s presenters and agenda 01 TRANSACTION OVERVIEW 02 STRATEGIC RATIONALE 03 EQUITY RAISING Graham Arvidson Ian Prentice 04 SUMMARY Chief Executive Officer, Managing Director, Australian Vanadium Technology Metals 05 APPENDICES Investor Presentation | ASX:AVL 8
Slide 9: Transaction Overview
Transaction Overview 9
Slide 10: Merger overview
Merger overview The merger between Australian Vanadium and Technology Metals represents a logical consolidation of adjoining orebodies, creating a leading Australian based vanadium developer of global significance Transaction outline ▪ Australian Vanadium Limited (ASX:AVL) to merge with Technology M
Slide 11: Transaction summary
Transaction summary Merger via Scheme of Arrangement with unanimous TMT Board recommendation and major shareholder intention of support Transaction ▪ Merger of Australian Vanadium Limited (‘AVL’) and Technology Metals Australia Limited (‘TMT’), to be implemented via a TMT Scheme structure of Arrange
Slide 12: Strategic rationale
Strategic rationale Creating a leading Australian vanadium developer of global significance Enhanced project ✓ Consolidation of two adjoining projects on the same orebody with integrated project studies to drive synergies. economics, ✓ Combined mineral resource base representing a >25-year1 mine lif
Slide 13: Benefits for TMT shareholders
Benefits for TMT shareholders Transaction will provide immediate value uplift to TMT shareholders and ongoing exposure to the benefits of combining adjoining vanadium projects ✓ TMT shareholders receive a 26.7%1 upfront premium to TMT’s 30-day VWAP. Upfront premium and ✓ TMT shareholders to retain a
Slide 14: Indicative transaction timetable
Indicative transaction timetable Outlined below is an indicative timetable for the TMT scheme of arrangement with Scheme meeting anticipated for December and implementation early 2024 Scheme timetable Event Date First court hearing Early November 2023 TMT to dispatch Scheme documents to TMT sharehol
Slide 15: Strategic Rationale
Strategic Rationale 15
Slide 16: Standalone project overviews
Standalone project overviews AVL and TMT have adjoining and contiguous projects which are both well-advanced Units Australian Vanadium Project1 MTMP2 Reserves & Resources Resource Tonnage Mt V2O5 239.0 153.7 ▪ Both projects significantly Resource Grade % V 2O 5 0.73 0.80 advanced Contained Resource
Slide 17: Combination provides enhanced project economics and material synergies
Combination provides enhanced project economics and material synergies Consolidation of adjoining projects on contiguous orebody to unlock material benefits for both AVL and TMT shareholders Benefits of consolidation ▪ Aligned development and processing flowsheet. ▪ Enhanced project economics, mine
Slide 18: Next steps: project integration strategy and development concept
Next steps: project integration strategy and development concept Integration working group to be formed with purpose of assessing available project enhancement opportunities and development strategy / pathway to deliver identified synergies Initial evaluation Ongoing ▪ Working group led by Graham Ar
Slide 19: Improved funding capability
Improved funding capability The combined group is expected to have access to larger pools of capital Potential project funding mix ✓ RCF expected to have a substantial shareholding in the combined group1. AVL’s $49M ✓ TMT and AVL consider RCF’s support for the Commercial Australian Equity market com
Slide 20: Strong vanadium market fundamentals
Strong vanadium market fundamentals Vanadium markets underpinned by global steel growth, with upside from fully commercialised vanadium flow battery technology ideal for the rapidly growing long duration stationary energy storage sector Strong market fundamentals Vanadium market demand1 MTV Global v
Slide 21: Position of strength in the sector
Position of strength in the sector Combined group well positioned to take advantage of expected upside in vanadium markets over the medium term Combined group positioning Vanadium pentoxide production costs (US$/lb)1,2,3,4 $10 Positioned as low-cost producer with ability to Standalone projects are l
Slide 22: Focused, experienced and aligned board & management team
Focused, experienced and aligned board & management team Board of Directors Approach to Board & Management ✓ Leadership team with a track record of Miriam Cliff Lawrenson Stanborough AM Peter Watson project delivery and deep vanadium Non-Executive Non-Executive Non-Executive expertise. Chair Directo
Slide 23: Approach to the Integration Team
Approach to the Integration Team Integration – Project Sponsorship ✓ Working group between AVL’s and TMT’s technical teams to be formed to Graham Arvidson Ian Prentice facilitate and develop the integrated Chief Executive Executive optimisation strategy Officer Integration ✓ Working group to be over
Slide 24: Equity Raising
Equity Raising 24
Slide 25: Equity raising overview
Equity raising overview ▪ AVL is undertaking a placement (Placement) to raise a minimum of A$15 million1 comprising the issue of a minimum of ~576.9 million new shares in AVL (New Shares), with the ability to take oversubscriptions to increase the size of the Placement to A$20 million. Offer structu
Slide 26: Sources & uses
Sources & uses Sources A$m Placement 15.0 TOTAL 15.0 Uses1,2 A$m Project expenditure and integration 8.6 Working capital and general corporate purposes3 6.4 TOTAL 15.0 Notes: 1. In the event that the merger is terminated prior to its completion, AVL will utilise the Placement proceeds for ongoing de
Slide 27: Overview of pro-forma combined group
Overview of pro-forma combined group Pro-forma market capitalisation ~A$217m and net cash ~A$52.1m (excludes impact of transaction costs and stamp duty) AVL TMT AVL Placement Pro-forma Spot share price / spot A$/sh 0.0271 0.2951 0.026 0.027 implied share price # Ordinary shares m 4,365.92 258.25 576
Slide 28: Indicative equity raise timetable
Indicative equity raise timetable Australian Vanadium is conducting an equity raising by way of an institutional placement Placement timetable Event Date Trading halt and launch of Placement Monday, 25 September 2023 Trading halt lifted and announcement of completion of Tuesday, 26 September 2023 Pl
Slide 29: Conclusion
Conclusion 29
Slide 30: Transaction summary
Transaction summary Logical consolidation of two contiguous orebodies to drive synergies to the benefit of both AVL and TMT shareholders Enhanced project Improved funding Increased market Strong market Right skill-set to economics, capability relevance, fundamentals drive value expansion liquidity a
Slide 31: Appendix: Vanadium Market Fundamentals
Appendix Vanadium Market Fundamentals 31
Slide 32: Vanadium Demand
Vanadium x Demand Vanadium market demand currently dominated by use in the steel industry, although its exposure to the energy transition through VFBs could provide a sizeable diversification from steel. Steel 87% Tools Ships Construction Trains Industry Critical minerals 6% 3D Printing Aerospace Ch
Slide 33: Steel growth underpins pricing dynamics - potential upside from energy storage thematic
Steel growth underpins pricing dynamics - potential upside from energy storage thematic Vanadium demand 350,000 • Vanadium is used to strengthen steel and has had a 300,000 historic correlation to global steel demand • Vanadium delivers longer life, stronger and lower 250,000 weight steel reducing t
Slide 34: Vanadium Flow Batteries
Vanadium Flow Batteries Vanadium Flow Battery Forecasts 70 80 Annual installations (GWh) • VFBs are a mature and proven technology ideally Implied V205 consumption (kt V205) positioned to meet demand for large, long duration 60 stationary storage Implied V consumption (kt V) Vanadium Consumption (kt
Slide 35: Vanadium Supply: 2022 V2O5 Cash Cost Curve
Vanadium Supply 2022 V2O5 Cash Cost Curve $18.00 $16.00 Steel Slag Primary Ore $14.00 Secondary • Global vanadium market of 118,000 MTV* U Ores in 20221 $12.00 Stone Coal Cash Cost US$/lb. V2O5 • Steep cost curve driven by multiple supply $10.00 production routes $8.00 • Long-term average price for
Slide 36: Vanadium Supply
Vanadium Supply Global Vanadium Supply (2022) Other, 6% USA, 3% • Global vanadium market of 118,000 MTV* in 20221 Brazil, 5% • AVL’s planned production of 6,300MTV represents ~5% of South current global supply1 Africa, 8% • Over 75% of global vanadium supply currently sourced from China, Russia and
Slide 37: Vanadium Markets: Critical Metal Demand
Vanadium Markets: Critical Metal Demand • US, EU, Canada, Australia, Japan, Brazil, South Africa, India and the UK have all classified vanadium as a critical metal essential to their economies1 • Vanadium is used extensively in aerospace, defence and specialty chemical industries • Demand from aeros
Slide 38: VFB Technical Merit
VFB Technical Merit Long duration, Easy to scale power Lifespan over competitive techno- and energy separately 25 years with little to economics >4h no degradation in performance over time Non-flammable Multiple daily cycles, Vanadium electrolyte can making it one of the with 100% depth of be reused
Slide 39: Appendix: Reserve & Resource Statements
Appendix Reserve & Resource Statements 39
Slide 40: AVL - Geology & Mining: Resource Table
AVL - Geology & Mining: Resource Table Domains Category Mt V2O5 % Fe % TiO2 % SiO2 % Al2O3 % LOI % Measured 11.3 1.14 43.8 13.0 9.2 7.5 3.7 Indicated 27.5 1.10 45.4 12.5 8.5 6.5 2.9 HG 10 Inferred 56.8 1.04 44.6 11.9 9.4 6.9 3.3 Subtotal 95.6 1.07 44.7 12.2 9.1 6.8 3.2 Measured - - - - - - - Indicat
Slide 41: AVL - Geology & Mining: Ore Reserve Table
AVL - Geology & Mining: Ore Reserve Table The updated Ore Reserve for the Australian Vanadium Project 2022 Bankable Feasibility Study is detailed in the table below V2O5 Ore Reserve Mt V2O5% Fe2O3% TiO2% SiO2% LOI% production kt Ore Reserve Mt Proved 10.5 1.11 61.6 12.8 9.5 3.7 70.9 Waste 238.5 Prob
Slide 42: TMT - Geology & Mining: Resource Table
TMT - Geology & Mining: Resource Table Classification Material Mt V2O5 % Fe % Al2O3% SiO2 % TiO2 % LOl % P% S% Massive 4.4 1.1 48.1 5.5 7.3 12.4 -0.4 0.01 0.3 Measured (Yarrabubba) Disseminated 1.5 0.6 30.0 10.8 23.4 7.7 2.5 0.01 0.2 Massive 5.1 1.1 46.9 5.7 8.4 12.1 -0.2 0.01 0.3 Measured (Gabanint
Slide 43: TMT - Geology & Mining: Reserve Table
TMT - Geology & Mining: Reserve Table Non-Magnetic Rec Rec. Ex-Pit Ore Magnetic Conc. Waste Total Conc. V2O5 % llmenite Deposits Mass Mt V2O5 % TiO2 % Mt V2O5 % Mt TiO2 % M lb kt Mt Mt Yield Yarrabubba 15.88 0.87% 10.0% 44.4% 7.04 1.61% 8.84 12.35% 202.7 1,132.6 110.1 126.0 Probable Yarrabubba 15.88
Slide 44: Appendix: Key Risks
Appendix Key Risks 44
Slide 45: Key Risks
Key Risks 1. Introduction A number of risks and uncertainties, which are specific to AVL, TMT, the Scheme and/or the Placement, and of a more general nature may affect the future operating and financial performance of AVL, TMT and the combined merged group (Combined Group), and the value of their re
Slide 46: Key Risks
Key Risks The issuance of AVL shares could adversely affect the market price of AVL shares If the Scheme is implemented, a number of additional AVL shares will be available for trading in the public market. The increase in the number of AVL shares may lead to sales of such shares or the perception t
Slide 47: Key Risks
Key Risks Failure to realise benefits of the Scheme, including potential synergies After implementation of the Scheme, the Combined Group will seek to pursue the strategies, operational objectives and benefits described in this Presentation, including the potential synergies. There is a risk that th
Slide 48: Key Risks
Key Risks 1.4. Risks relating to AVL, TMT and the Combined Group Risks associated developing the projects The ability of AVL, TMT (and later, the Combined Group) to meet capital and operating cost estimates, or achieve production targets, on a timely basis or at all cannot be assured. The assets of
Slide 49: Key Risks
Key Risks Funding AVL (and later, the Combined Group) will require further financing support in the future to support additional capital expenditure and to meet future objectives. Despite AVL’s strong capital raising track record, there is no certainty that it (or the Combined Group) will be success
Slide 50: Key Risks
Key Risks Resource estimates The Mineral Resources and Ore Reserves for the assets of AVL and TMT are estimates only and no assurance can be given that any particular recovery level will in fact be realised. AVL's and TMT’s estimates are prepared in accordance with the JORC Code 2012 but they are ex
Slide 51: Key Risks
Key Risks Security of tenure All tenements in which AVL and TMT have interests are subject to renewal conditions or are yet to be granted, which will be at the discretion of the relevant mining authorities. The maintenance of tenements, obtaining renewals, or getting tenements granted often depends
Slide 52: Key Risks
Key Risks Native Title and Aboriginal heritage The Directors of each of AVL and TMT closely monitor the potential effect of native title claims involving the tenements in which AVL and TMT (as applicable) have an interest. If native title rights do exist, the ability of AVL, TMT or the Combined Grou
Slide 53: Key Risks
Key Risks Climate change There are several climate-related factors that may affect the operations and proposed activities of AVL, TMT and the Combined Group. The climate change risks particularly attributable to those entities include: • the emergence of new or expanded regulations associated with t
Slide 54: Key Risks
Key Risks Political risks and government actions AVL’s and TMT’s activities are subject to extensive laws and regulations controlling not only the mining of and exploration for mineral properties, but also the possible effects of such activities upon the environment and upon interests of native and/
Slide 55: Key Risks
Key Risks Market competition Significant and increasing competition exists for mineral acquisition opportunities throughout the world. As a result of this competition, some of which is with large, better established mining companies with substantial capabilities and greater financial and technical r
Slide 56: Key Risks
Key Risks Production target of the Combined Group The feasibility of projects and the ability of the Combined Group to achieve production targets cannot be assured and there are risks that they will not be achieved. The assets of the Combined Group will be subject to uncertainty with regards to tonn
Slide 57: Key Risks
Key Risks General economic conditions Economic conditions, both domestic and global, may affect the performance of AVL, TMT and the Combined Group and their shares. Adverse changes in macroeconomic conditions, including global and country-by-country economic growth, the cost and general availability
Slide 58: Key Risks
Key Risks Data and cyber security risks The integrity, availability and reliability of data within AVL’s, TMT’s and the Combined Group’s information technology systems may be subject to intentional or unintentional disruption. Given the level of increasing sophistication and scope of potential cyber
Slide 59: Appendix: Foreign selling restrictions
Appendix Foreign selling restrictions 59
Slide 60: Foreign selling restrictions
Foreign selling restrictions Foreign selling restrictions This Presentation does not constitute an offer of New Shares in any jurisdiction in which it would be unlawful. In particular, this Presentation may not be distributed to any person, and the New Shares may not be offered or sold, in any count
Slide 61: australianvanadium.com.au
+61 428 550 499 craig.sainsbury@automicgroup.com.au australianvanadium.com.au Level 2, 50 Kings Park Road, West Perth, Western Australia 6005 Australian Vanadium Limited | ASX: AVL
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