Arafura Rare Earths Limited · ASX:ARU
Arafura Rare Earths — Arafura Resources — Investor Presentation (May 2017)
31 slides from Arafura Rare Earths's investor presentation, May 25, 2017
Slide 1: A new opportunity for Korea: Korean Investor Update
For personal use only Arafura Resources High-Value Magnet Feed (NdPr) Rare Earths & A new opportunity for Korea Korean Investor Update May 2017 Arafura Resources Limited (ASX: ARU)
Slide 2: Disclaimer
Disclaimer For personal use only Important Notice This presentation has been prepared by Arafura Resources Limited (Arafura Resources). It is of a summary form only and therefore contains general background information which may not be complete. It should be read in conjunction with and full review
Slide 3: Corporate Overview
Corporate Overview For personal use only ASX Code ARU Shareholder Spread Share Price (30‐Apr‐17) A$0.065 Market Cap 546.9m Shares A$35.5m China Australia (ECE) 20% Cash (31 March 2017 +SPP Funds) A$14.9m Other Asia 48% 2% Debt Nil Enterprise Value A$20.6m Europe 26% North America 4% East China Miner
Slide 4: Company Snapshot
Company Snapshot For personal use only ASX listed company developing the Nolans Rare Earths Project in Australia Afforded major project status by Northern Territory and Australian governments Nolans one of the world’s largest Neodymium‐Praseodymium (NdPr) deposits Arafura to be a key supplier in the
Slide 5: Nolans – A Clear Path To Market
Nolans – A Clear Path To Market For personal use only 110,000 tpa 13,250 tpa1 CAPEX: US$680m3 OPEX: US$6.23/kg TREO3 20+ year resource Low cost operation 16,450 tpa2 Close to vital infrastructure: energy, 201,000 tpa water and transport 1. Containing 7,096 tpa TREO 2. Containing 6,978 tpa TREO 525,0
Slide 6: Project Metrics
Project Metrics For personal use only MINING & PROCESSING (1,2 & 3) Ultra competitive operating costs ROM feed (tpa) 525,000 US$6.23/kg TREO – lowest amongst Total rare earths 76% peers Recovery (ROM to final product) NdPr La 75% 75% Phosphoric acid recovered to reduce SEG‐HRE 68% PRODUCTION commodi
Slide 7: The NdPr Opportunity
For personal use only The NdPr Opportunity Arafura Resources Limited (ASX: ARU)
Slide 8: How Much NdPr Are We Talking About?
How Much NdPr Are We Talking About? For personal use only Permanent Magnets Electric Vehicles 1kg of NdPr 41 million by 2040 each containing 1.7kg of NdPr Wind Turbines Electric Bicycles Up to 150kg of NdPr per MW 30 million in 2017 each containing 0.1kg of NdPr Arafura Resources Limited (ASX: ARU)
Slide 9: The NdPr Market Opportunity
The NdPr Market Opportunity For personal use only Arafura Resources Limited (ASX: ARU) 9
Slide 10: Established Markets & Growing New Applications
Established Markets & Growing New Applications For personal use only Established magnet market demand steady Magnet growth being driven by clean technologies Source: Adamus Intelligence, Arnold Magnetic Technologies, Japanese industry participants, Roskill Arafura Resources Limited (ASX: ARU) 10
Slide 11: EV Growth Enablers
EV Growth Enablers For personal use only Arafura Resources Limited (ASX: ARU) 11
Slide 12: Korea Reliant On China For Supply
Korea Reliant On China For Supply For personal use only China accounts for 97% of South Korea’s rare earth permanent magnet imports by volume South Korea is the world’s 4th largest consumer of rare earth permanent magnets Source: United Nations Comtrade Database https://comtrade.un.org/; InvestorInt
Slide 13: Opportunities For Korea
Opportunities For Korea For personal use only Korea imports 10% of China’s rare earth magnet production Declining magnet imports from China after 2011 reflects replacement of magnets by magnet‐containing finished products Arafura will become a secure, long‐term supplier producing ~10% of global dema
Slide 14: Korea and Arafura
For personal use only Korea and Arafura Arafura Resources Limited (ASX: ARU)
Slide 15: Proposed Korean Refining
Proposed Korean Refining For personal use only Estimated CAPEX US$85m 16,450 tpa rare earth intermediate product from Australia to be refined to produce: 3,601 tpa NdPr oxide 3,315 tpa other rare earth products MOU with OCI to develop a JV Toll Processing Plant in South Korea Includes long-term supp
Slide 16: Summary
For personal use only Summary Arafura Resources Limited (ASX: ARU)
Slide 17: Korean Cooperation
Korean Cooperation For personal use only Arafura is looking for strategic partner(s) Seeking to co‐locate Korean plant with respect to reagents present an opportunity for more cooperation Investment at all levels (corporate / project) – ensures a joined focus on the entire project The new Korea‐Aust
Slide 18: Compelling Investment Opportunity
Compelling Investment Opportunity For personal use only There are three compelling reasons why an investment in Arafura Resources is attractive 1 Rare earths represent an opportunity for long term, sustainable value growth 2 A Rare Earth Separation Plant in South Investment in Arafura Korea would pr
Slide 19: Long Term Value Proposition
Long Term Value Proposition For personal use only Rare earths represent an opportunity for long term, sustainable value growth for investors as demand is driven by advanced technology and clean energy Rare earths supply, demand and pricing provide a strong base for attractive investment Rare earths
Slide 20: Wider Benefits For Korea
Wider Benefits For Korea For personal use only The development of a Rare Earth Oxide processing industry would provide numerous benefits to Korea Development of an REO processing facility would provide economic benefits for the region including direct employment of ~70 personnel and a similar number
Slide 21: The Value Proposition
The Value Proposition For personal use only Arafura Resources represents the essential elements of an attractive long term, sustainable investment in rare earths Fully exploited, Arafura (Nolans) has >20 year mine life, producing high grade, strategically important, rare earths at relatively low cos
Slide 22: Thank You
For personal use only Thank You Level 3, 263 Adelaide Terrace Perth WA 6000 T: +61 8 6210 7666 E: arafura@arultd.com Arafura Resources Limited (ASX: ARU)
Slide 23: Additional slides
For personal use only Additional slides Arafura Resources Limited (ASX: ARU)
Slide 24: Arafura Plans 2017-18
For personal use only Arafura Plans 2017-18 Arafura Resources Limited (ASX: ARU)
Slide 25: Targets for 2017-18
Targets for 2017-18 For personal use only To take advantage of the pending NdPr supply shortfall we will complete the following: Final piloting – results to be reported throughout 2017 Fast track where possible detailed design to Bankable Feasibility status Secure environmental approval (Nolans) – 2
Slide 26: Final Piloting In Progress
Final Piloting In Progress For personal use only Beneficiation Pilot Plant Phosphoric Acid Regeneration Circuit TREO Grade 7.0% TREO Recovery >80% NdPr Oxide Grade 1.8% NdPr Oxide Recovery >82% P2O5 Grade 29% P2O5 Recovery >90% Al2O3 Grade <3.2% Fe2O3 Grade <1.9% Mass Pull 55% High-Phosphate Concent
Slide 27: Environmental Assessment In Progress
Environmental Assessment In Progress For personal use only Draft EIS submitted May 2016 EIS Supplement submitted February 2017 Remaining steps in Northern Territory 512 pages, 24 appendices 290 pages, 16 appendices Environmental Impact Assessment process Public and government review May‐August 2016
Slide 28: Resource & Infrastructure & Funding
For personal use only Resource & Infrastructure & Funding Arafura Resources Limited (ASX: ARU)
Slide 29: Nolans Mineral Resources
Nolans Mineral Resources For personal use only Tonnes Rare Earths Tonnes Phosphate Uranium Resources (million) TREO % TREO P2O5 % U3O8 lb/t Measured 4.9 3.2 158,000 13 0.54 Indicated 30 2.7 816,000 12 0.44 Inferred 21 2.3 489,000 10 0.36 TOTAL 56 2.6 1,462,000 12 0.42 1% TREO cut-off grade. Numbers
Slide 30: Close To Key Infrastructure
Close To Key Infrastructure For personal use only Nolans Mine Site area Arafura Resources Limited (ASX: ARU) 30
Slide 31: Arafura's Project Funding Strategy
Arafura’s Project Funding Strategy For personal use only Debt finance will be a significant part of project funding and an enabler to attract project equity ECAs, MLAs and banks to be targeted, linked to offtake arrangements with customers in key markets and procurement opportunities for constructio