Reward Minerals Ltd · ASX:RWD
Reward Minerals — ResourceStocks Sydney 2019
26 slides from Reward Minerals's conference presentation, Oct 1, 2019
Slide 1: Reward Minerals Limited
REWARD Developer of the MINERALS largest high-grade brine LIMITED SOP Deposit in Australia ResourceStocks Sydney 30 September – 1 October 2019 ASX | RWD www.rewardminerals.com
Slide 2: Forward Looking Statements & Disclaimer
FORWARD LOOKING STATEMENTS & DISCLAIMER This document includes forward-looking statements. When used in this document, the words such as “could”, “plan”, “estimate”, “expect”, “intend”, “may”, “potential”, “should”, and similar expressions are forward-looking statements. Although RWD believes that t
Slide 3: Investment Rationale
INVESTMENT RATIONALE Reward Minerals is the developer of the Lake Disappointment Brine Sulphate of Potash Project Native title Largest Detailed, secured, Australian conservative Advanced brine SOP Highest And… High PFS permitting deposit evaporation, Undervalued average in- status Lowest against sit
Slide 4: Contents
CONTENTS ►Corporate Snapshot ►SOP Market Basics ►LD Project Overview & Metrics ►LD Upside – A billion dollar project? ►Current Activities ►Conclusions 4
Slide 5: Reward Corporate Snapshot
REWARD CORPORATE SNAPSHOT Capital Structure 25 Sept 2019 ASX:RWD Colin McCavana – Non-Executive Chairman - 30+ years experience in mining and earthmoving industries Ordinary Shares on Issue 162.6m - Ops and development management of Australian and international projects Rights and Options on Issue 1
Slide 6: What is SOP? Sulphate of Potash
WHAT IS SOP? SULPHATE OF POTASH The Premium source of potassium fertiliser – K2SO4 ► A low-chloride source of potassium and sulphur ► Potassium is an essential plant macronutrient ► Sulphur is also an important nutrient ► Applied to speciality and/or chloride sensitive crops ► SOP supplies less than
Slide 7: What is Driving SOP Growth?
WHAT IS DRIVING SOP GROWTH? SOP Demand drivers SOP Growth forecast: ~4% pa ► Increasing population, decreasing arable land Global SOP Demand 8.0 ► Increasing soil salinity (Mtpa) 7.0 ► Need for improved water efficiency ► China prompted major growth 6.0 ► Could India be next? 5.0 ► Changing demograp
Slide 8: LD Brine SOP Project – Location
LD BRINE SOP PROJECT – LOCATION ► 866km to Port Hedland, class-leading bulk export terminal ► 511km sealed road – Great Northern Highway ► 355km of existing, frequently used dirt roads 8
Slide 9: Highest Evaporation Rate
HIGHEST EVAPORATION RATE No better location for a brine evaporation operation in Australia LD Project 9
Slide 10: Low Rainfall
LOW RAINFALL No better location for a brine evaporation operation in Australia LD Project 10
Slide 11: Superior Grade and Evaporation
SUPERIOR GRADE AND EVAPORATION Grade and evaporation have a direct impact on production 40 Typical Potassium Target Concentration Potassium Concentration – g/l LD Grade 30 & Evaporation 13.4 g/l SOP = 8 g/l K 20 Goldfields Evaporation & Lower Grade* ~8 g/l SOP = ~3.6 g/l K 10 100 200 300 400 500 600
Slide 12: Operational and Cost Implications
OPERATIONAL AND COST IMPLICATIONS To match output, lower grade operations need to: Abstract/Pump More Brine Build Bigger Ponds National Geographic Bigger ponds, more seepage, with lower evaporation making it worse: They will Suffer More Capex & Opex Costs Seepage Decreasing grade/Lower Evaporation 1
Slide 13: Standard Solar Evaporation Process
STANDARD SOLAR EVAPORATION PROCESS A$91/t A$102/t Other Opex Costs Closure – A$2/t Martu Royalty – A$7/t FOB Cash Cost: Road Maint - A$15/t A$344/t Site Services - A$22/t (US$258/t) EBITDA Margin: ~44.6% A$105/t @ US$500/t Ex-Works Cost: A$239/t (US$180/t) 13
Slide 14: Realistic and Deliverable Logistics
REALISTIC AND DELIVERABLE LOGISTICS A world class port 866 km from site to Port Hedland exporting millions of tonnes per year 511 km sealed road to Port Hedland 355 km of existing, frequently used track First 250 km designed in detail from terrain models at +/-100mm accuracy Logistics cost per tonne
Slide 15: Permitting: Updated WA EPA Schedule
PERMITTING: UPDATED WA EPA SCHEDULE Feb-19 Mar-19 Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Public exhibition of ERD DWER provided final comments to Reward Reward submits response to submissions DWER reviews responses to submissions and publishes the respons
Slide 16: Project Metrics – Costs & Production
PROJECT METRICS – COSTS & PRODUCTION • A$345 M, includes indirects and owners costs (+/-20%) Capital cost • A$451 M, includes contingency & pre-production costs • At least 400,000 tpa Production • ~9 Mt SOP produced over ~25 years • Less than 10% of the resource • Cash cost – A$335/tonne (FOB Port H
Slide 17: Project Metrics – Economics
PROJECT METRICS – ECONOMICS • Price: US$500/tonne, FX: AUD/USD: 0.75 Assumptions • Discount Rate: 8% Real • Royalty: State: 3.75%, Martu: 1.25% • Average EBITDA – 45% (~$118 M/year) Margins • Average Cash – 48% (~$122 M/year) • Pre-tax: NPV8% – $518 M, IRR – 19% Returns • Post-tax: NPV8% – $293 M, I
Slide 18: Bringing LD into Line with its Peers
BRINGING LD INTO LINE WITH ITS PEERS Could LD be a billion dollar project? Effective Name Study Discount Rate Pricing Exchange Rate Royalty Comment SOP Price 8% Nominal (Pre- and Suggest exchange rates and pricing were input as Australian Independent Argus Report. AUDUSD: 0.67 average derived from D
Slide 19: Bringing LD into Line with its Peers
BRINGING LD INTO LINE WITH ITS PEERS Could LD be a billion dollar project? 1,200 1,200 Discount Post Tax NPV (AUD M) Post Tax NPV (AUD M) 1,000 Rate: 1,000 8% Blocks to be animated, starting with Nominal the first block which should appear after 5 seconds & then each one 800 800 appearing at 5 secon
Slide 20: Current/Upcoming Activities
CURRENT/UPCOMING ACTIVITIES* ► Environmental Permitting: ▪ Final stages at state level ▪ Well advanced at federal level ► Resource Conversion: ▪ Infill drilling program completed ▪ Grade upside ► Flowsheet Improvements: ▪ Ongoing R&D (focused on enhancing recovery) ▪ Targeting cost reductions & oper
Slide 21: Conclusion
CONCLUSION Reward is well positioned, its LD Brine SOP Project: Is technically robust ► Conservative PFS conducted to exacting standards ► Independently reviewed Flowsheet … and economically attractive, with ► Scope to improve economics on multiple fronts … and at 407,500 tonnes SOP/annum ► One of t
Slide 22: Appendices
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Slide 23: Globally Significant Tier 1 Resource
GLOBALLY SIGNIFICANT TIER 1 RESOURCE 153 Mt Indicated & Inferred Drainable SOP Resource – Australia’s largest Assigned Nominal Dimensions (m) Volume Area Specific SOP Brine Drainable Unit Yield Hydrostratigraphic Unit Grade SOP Symbol Effective 3 6 2 6 (kg/m3) (Mt) Top Base Thick. (m x 10 ) (m x 10
Slide 24: PFS Results – Capital Costs
PFS RESULTS – CAPITAL COSTS Initial and Sustaining Capital Costs (LOM Real) AUD M Production - Trenches and Ponds 57.6 Process Plant 73.2 Infrastructure 108.8 Site Support Temporary Services 2.9 Construction Costs 59.2 Subtotal 301.7 Indirect Costs (EPC, Consultants, Commissioning) 20.0 Owners Costs
Slide 25: Information for Economic Analysis
INFORMATION FOR ECONOMIC ANALYSIS The information contained in Slide 18 of this presentation was sourced from the following company reports: 1. Australian Potash Ltd: AUSTRALIAN POTASH LTD ANNOUNCES DEFINITIVE FEASIBILITY STUDY OUTSTANDING OUTCOMES OVER 30 YEAR MINE LIFE, 28 August 2019. 2. Agrimin
Slide 26: Compliance Statements
COMPLIANCE STATEMENTS Competent person statements: This information in this report that relates to Resource Estimation and hydrogeology is based on information compiled by Mr Robert Kinnell, a hydrogeologist and Competent Person who is a Member of The Australian Institute of Mining and Metallurgy an