Lynas Rare Earths Limited · ASX:LYC
Lynas Rare Earths — Diggers and Dealers Mining Forum 2017
29 slides from Lynas Rare Earths's conference presentation, Aug 8, 2017
Slide 1: The Time is Now: The Next Chapter of the Lynas Story
For personal use only The Time is Now The Next Chapter of the Lynas Story Diggers and Dealers Mining Forum Kam Leung VP Production 8 August 2017
Slide 2: Disclaimer
Disclaimer For personal use only This Presentation has been prepared by Lynas Corporation Limited (ABN 27 009 066 648) (Lynas or the Company) This Presentation contains summary information about Lynas and its subsidiaries (Lynas Group) and their activities current as at the date of this Presentation
Slide 3: What Makes an Attractive Investment?
What Makes an Attractive Investment? For personal use only 3
Slide 4: Growing Demand: Lithium and Rare Earths
Growing Demand For personal use only Lithium and Rare Earths 4
Slide 5: Growing Demand: Lithium and Rare Earths
Growing Demand For personal use only Lithium and Rare Earths 5
Slide 6: Adoption of New Technology: Are Electric Vehicles Crossing the Chasm?
Adoption of New Technology For personal use only Are Electric Vehicles Crossing the “Chasm”? The “Chasm” Early Late Majority Majority Early Adopters Laggards Innovators Crossing the Chasm, Geoffrey Moore 1991 1997 2019 2006 2040 6
Slide 7: Electric Vehicle Growth Driving the Demand for NdPr
Electric Vehicle Growth For personal use only Driving the Demand for NdPr Forecast Usage of Magnetic Rare Earth Metals NdPr in 2016 2020 2024 Electric Vehicles 2 kt 7 kt 12kt Electric vehicles will drive Wind Turbines 2kt 3 kt 4 kt the growth in NdPr consumption Requires 1 LYNAS every 4 years! 7
Slide 8: Supply of Magnetic Rare Earth Materials: NdPr Price Increased Throughout 2017
Supply of Magnetic Rare Earth Materials For personal use only NdPr Price Increased Throughout 2017 NdPr Oxide price inside China 46 380 China central government actions have contributed to improved market 44 360 conditions 42 340 40 320 • Mining and Production quotas USD/kg RMB/kg 38 300 inspected a
Slide 9: What Makes a Good Business?
What Makes a Good Business? For personal use only Secure Long Term Entry Barriers for Growing Positive Source of Raw Material Competitors Cashflow Community and Quality Management, Low Cost Producer Regulatory Support Quality Products Capability and Sustainable Production Market Position Opportunity
Slide 10: Secure Long Term Source of Raw Material
Secure long term source of Raw Material For personal use only The Mount Weld Carbonatite Intrusion World Class Rare Earths Metals Deposit Central Lanthanide Deposit Crown Deposit Mt Weld Mining Leases • Central Lanthanide Deposit, the highest grade operating Rare Earths mine in the world Coors Depos
Slide 11: Reliable Production: NdPr Production Marginally Above Design Rates
Reliable Production For personal use only NdPr Production Marginally Above Design Rates SX5 T3 SX5 T4 Start-up Start-up 11
Slide 12: Reliable Production: Mining Campaign 1B Completed Under Budget
Reliable Production For personal use only Mining Campaign 1B Completed Under Budget (A$3 million) 240kt ore @17.8% REO extracted Rain delays mining Access to first ore – 375mRL (Jan 25) Rainfall was 300% of Decile 9 Mine access ramp development CZ High ore – North Section of Pit Mn ore – West Sectio
Slide 13: Low Cost Producer: Cost Containment During Production Ramp Up
Low Cost Producer For personal use only Cost Containment During Production Ramp Up SX5 T4 Start-up SX5 T3 Start-up 13
Slide 14: Product Quality Counts for Rare Earths
Product Quality Counts for Rare Earths For personal use only 2014-16 Focus on NdPr; 2016 → Focus on La, Ce New centrifuge wash water sprays and measurement of centrifuge heel Reducing Na, Cl in all products Filtration improvements (launders, filter cloths, control sequence, maintenance and cleaning)
Slide 15: Developing Capability to Make New Product Grades
Developing Capability to Make New Product Grades For personal use only New SX Processes to Remove Impurities in La and Ce • Improved analysis of P in CeCl3 using new simultaneous ICP instrument • Modified SX6 operating strategy to reduce level of P in CeCl3 • Successfully trialled Zn removal from La
Slide 16: Strong Market Position
Strong Market Position For personal use only Lynas is the Second Largest Producer of NdPr Lynas is the Largest Supplier of NdPr to the Free Market Globally 16
Slide 17: Growing Cash Flow
Growing Cash Flow For personal use only As Revenue Increases and Costs Contained a. Lower sales revenue; b. Payment of annual insurance premium; c. Capital expenditure on TSF2 at WA ** **Investing Cash Flow is CAPEX 17
Slide 18: Lynas Expects to Progressively De-lever its Balance Sheet
Lynas Expects to Progressively De-lever its Balance Sheet For personal use only Finance Related Activities in 2017 Outstanding 31/12/16 Outstanding 7/8/17 Cash received by Lynas during 2017 Warrants at $0.038 (1) 174,365,466 0 A$ 6.6m Warrants at $0.05 (2) 348,843,836 312,409,035 A$ 1.8m Outstanding
Slide 19: Barriers to Entry: LAMP Processing Facilities and Operating Capability
Barriers to Entry For personal use only LAMP Processing Facilities and Operating Capability 928 metres of kilns and tunnel furnaces 4 rotary kilns (60m long) 8 tunnel furnaces (88m long) 44 High Speed Centrifuges 46 Plate & Frame Pressure Filters 1,000 Solvent Extraction Stages Quality specs as low
Slide 20: Barriers to Entry: LAMP Phase Start Up
Barriers to Entry For personal use only LAMP Phase 1 Start Up – Series 3 (T.McNulty 1998) Phase 1 and Phase 2 assets are now operating at above design rates 20
Slide 21: Capability for Growth: Rapid Start Up of Phase to Above Design Rates
Capability for Growth For personal use only Rapid Start Up of Phase 2 to Above Design Rates Phase 1 includes • SX5 Train 1 • SX5 Train 2 Phase 2 adds • SX5 Train 3 • SX5 Train 4 21
Slide 22: Capability for Growth: Expansion Potential in CLD and Duncan
Capability for Growth For personal use only Expansion Potential in Both the CLD (high grade NdPr) and Duncan (NdPr with enriched Dy) • CLD deposit is open to the south, west and at depth Rare Earth Profile Duncan and CLD • The Duncan Deposit (DD) forms a halo of heavy rare earth Mineral Resources el
Slide 23: Capability for Growth: Indicators From Campaign 1B Grade Control Drilling
Capability for Growth For personal use only Indicators From Campaign 1B Grade Control Drilling Current Level of Stage 1b Pit • Floor of AP (apatite) ore zone was based on depth of historic drilling • Recent grade control (1B) has identified a thick sequence of (6-7% REO) in the apatite- fresh rock t
Slide 24: Philosophy for Growth: Taking a Step by Step Approach
Philosophy for Growth For personal use only Taking a Step by Step Approach
Slide 25: Sustainable Production
Sustainable Production For personal use only Successful R&D - Mt Weld Water & Tailings, LAMP Residues • Safe storage of Mt Weld tailings • Beached tailings using Rheomax ETD • MudMaster Amphirol compaction and drying CondiSoil® Field Trials Mt Weld recycling of process water - Ultra Filtration (usin
Slide 26: Lynas Community Engagement
Lynas Community Engagement For personal use only 26
Slide 27: What Makes an Attractive Investment?
What Makes an Attractive Investment? For personal use only • Electric vehicles will drive sustained growth of magnetic materials • Lynas is the largest supplier of NdPr to the free market globally • Lynas is a performing business • Barriers for entry are high for new entrants • Lynas is well positio
Slide 28: Competent Person's Statement
Competent Person’s Statement For personal use only COMPETENT PERSON’S STATEMENTS– MINERAL RESOURCES The Mineral Resources and Ore Reserves Statement in this Presentation is based on, and fairly represents, information compiled by Mr. Brendan Shand who is a consultant geologist to Lynas Corporation.
Slide 29: Disclaimer – Rare Earths Market Data
Disclaimer – Rare Earths Market Data For personal use only • The slides in this presentation containing Rare Earths market data have been sourced from independent analysis of end application demand, along with Lynas estimates of quantities of Rare Earths end use in various key applications. • Althou
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