Arafura Rare Earths Limited · ASX:ARU
Arafura Rare Earths — Arafura Resources — Shareholder Meeting (October 2012)
16 slides from Arafura Rare Earths's shareholder meeting presentation, Oct 18, 2012
Slide 1: Arafura Resources Limited Extraordinary General Meeting
For personal use only Arafura Resources Limited Extraordinary General Meeting 18 October 2012
Slide 2: Disclaimer
Disclaimer Important Notice For personal use only This presentation contains certain statements which may constitute “forward-looking statements”. Such statements are only expectations or beliefs and are subject to inherent risks and uncertainties which could cause actual values, results or performa
Slide 3: Agenda
Agenda For personal use only 1. Overview of the Proposed ECE Transaction ECE Nolans Investment Company Proprietary Limited (ECE) Summary of the ECE transaction Resolution 1: Approval of Share Issue 2. Independent Expert’s Report 3. Update on Arafura 4. Next Steps 2013 Page 3
Slide 4: ECE – a beneficial & long-term partnership
ECE – a beneficial & long-term partnership ECE have a long-term relationship with Arafura For personal use only — First investing in the Company in 2009 — Current equity position = 16.27% ECE has shown further confidence in Arafura by agreeing to — Increase its current ownership level to 24.86%, sub
Slide 5: Summary of the ECE transaction
Summary of the ECE transaction Arafura will place a total of 45,266,500 new shares at A$0.22 per For personal use only share to ECE Nolans to raise $9,958,630 in cash This share placement will represent 8.75% of Arafura’s issued capital Assuming all approvals are given, ECE Nolans will revert back t
Slide 6: Resolution – Approval of Share Issue
Resolution 1 – Approval of Share Issue Subject to FIRB Approval, to consider, and if thought fit, to pass the For personal use only following resolution as an ordinary resolution: – For the purposes of the Corporations Act (item 7 of section 611) and for all other purposes - approval is given for th
Slide 7: Key benefits of the share placement
Key benefits of the share placement For personal use only Arafura will receive a cash injection of $9.96 million ― Places Arafura in a stronger financial position to progress its Nolans Rare Earths Project and negotiate various strategic agreements/partnerships ― The funds raised will be applied tow
Slide 8: IER validates valuation upside potential
IER validates valuation upside potential For personal use only IER validates advanced stage and valuation upside of the Nolans Rare Earths Project – Independent Expert’s utilisation of NPV methodology validates the advanced nature of the Project – Estimated value of Nolans Project = A$2.4bn to A$4bn
Slide 9: Independent Expert's assessment of ECE transaction
Independent Expert’s assessment of ECE transaction For personal use only Independent Experts Report (IER) has viewed the ECE placement of shares as being not fair but reasonable. IER considers the placement of the New Shares to be reasonable because the advantages to Shareholders are greater than th
Slide 10: Update on Arafura
Update on Arafura For personal use only Uniquely positioned to supply 10% of global rare earths products this decade Nolans Project – world scale and well advanced Recent Project Update confirms robust economics Independent Experts Report – validates significant valuation upside Funding plan in plac
Slide 11: World Scale, Strategically Significant Resource
World Scale, Strategically Significant Resource For personal use only RARE TONNES TONNES TONNES TONNES RESOURCES EARTHS (million) REO P2O5 U3O8 REO % Measured 4.3 3.3 144,000 572,000 1,120 Indicated 21 2.6 563,000 2,610,000 4,090 Inferred 22 2.4 511,000 2,220,000 3,610 TOTAL 47 2.6 1,217,000 5,410,0
Slide 12: Customer Qualified REO Products
Customer Qualified REO Products For personal use only Arafura’s separated REO products Produced four separated REO products to 99% purity In-specification final REO products verified by customers In the process of finalising production of a separated Lanthanum Oxide product to 99% LOI and MOU signed
Slide 13: Project Update validates robust economics
Project Update validates robust economics For personal use only Comprehensive Project Update released August 2012 Provides transparency for investors and other stakeholders Nolans Project Base Case confirms robust project economics over 20 years: — NPV of A$4.3 billion (10% discount rate) — IRR of 3
Slide 14: Funding required for 2012/13
Funding required for 2012/13 For personal use only Project Refinement Engineering Other Conversion to Ore Reserve Detailed engineering EIS submissions Demonstration Plant Transport and logistics Sales and supply Operation contracts Integrated Pilot plant Strategic partners REO purification to Projec
Slide 15: Funding Plan in place – multiple options
Funding Plan in place – multiple options For personal use only Recent Project Update and IER enhance funding options Short Term Medium – Long Term - $10m placement to ECE - Strategic partners - $22m R&D Claim* - Equity JV Discussions - Existing Cash Reserves - Off take ongoing - Debt financing - Equ
Slide 16: Arafura Resources Limited contact details
Arafura Resources Limited Level 5, 16 St Georges Terrace Perth WA 6000 For personal use only Tel: +61 8 6210 7666 arafura@arafuraresources.com.au www.arafuraresources.com.au
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