Bannerman Energy Ltd · ASX:BMN
Bannerman Energy — Investor Presentation (May 2018)
35 slides from Bannerman Energy's investor presentation, May 30, 2018
Slide 1: Uranium: big bears mother bigger bulls
Uranium: big bears mother bigger bulls Brandon Munro, CEO May 2018
Slide 2: Important notices
Important notices 2 Technical disclosures and forward looking disclaimers Certain disclosures in this report, including management's assessment of Bannerman’s plans and projects, constitute forward looking statements that are subject to numerous risks, uncertainties and other factors relating to Ban
Slide 3: Bannerman at a glance (BMN:ASX)
Bannerman at a glance (BMN:ASX) 3 Capital structure Etango uranium project, Namibia (271Mlbs* U3O8 resource). ASX share price A$0.045 12 month share price range A$0.026 – A$0.065 Sector leading valuation leverage to uranium price increases. Shares on issue 856 million Largest advanced, unaligned ura
Slide 4: Why uranium, and why now?
Why uranium, and why now? 4 Decade long surplus Supply disruption Demand momentum swinging to deficit in 2018 expected in next 3 months building Uranium sector highly Lack of price response will Uncontracted uranium catalyst responsive generate volatility demand builds from 2020 Spot price and equit
Slide 5: Global supply-demand balance (Mlbs U3O8e)
Headed for deficit for the first time in almost 10 years… 5 40.0 30.0 Global supply-demand balance (Mlbs U3O8e) 20.0 10.0 0.0 2005A 2006A 2007A 2008A 2009A 2010A 2011A 2012A 2013A 2014A 2015A 2016A 2017A 2018E -10.0 -20.0 -30.0 Source: Cameco, UxC, BMO Research, May 2018
Slide 6: Global supply-demand balance: look what happened last time
…and from a similar starting point, look what happened last time! 6 40.0 US$136/lb 30.0 Global supply-demand balance (Mlbs U3O8e) GFC 20.0 10.0 0.0 2005A 2006A 2007A 2008A 2009A 2010A 2011A 2012A 2013A 2014A 2015A 2016A 2017A 2018E -10.0 US$21/lb US$21/lb -20.0 -30.0 Source: Cameco, UxC, BMO Researc
Slide 7: Supply disruption likely in the short term
Supply disruption likely in the short term 200 1 ae 2017 reactor consumption J 160 a ~ [e) 140 = & 2 120 : a & 100 zg - my Se 2 5 6 a bo ? 2 80 z 2 £ Zz . 2 Z o d 2 a 2 > Q nw =) cS $ 60 3 a 3 £ & s 5 « = . 5 5 . ¢& 40 5 2 2 2 2 3 > = ra o 8 ws = KazAtomProm supply cuts & % a g 2 3 20 3 5 3 5 z & ;
Slide 8: Demand momentum building
Demand momentum building 8 18 20 80 16 70 14 15 60 12 50 10 10 40 8 30 6 d 5 20 4 2 10 0 0 0 25 yr. 2015 2016 2017 2018 2019 South UAE Russia India R.O.W. China India Russia China R.O.W. ave. Korea Nuclear reactor completion 58 reactors under construction 154 reactors on-order/planned 10 12 9 8 10 8
Slide 9: In a sector famed for catalyst response
In a sector famed for catalyst response 9 $180 GFC commences $160 McArthur River $140 Fukushima production $120 suspended McArthur River $100 (mine flooded) production $80 Down-blended suspended Oil crisis Russian warheads (economics) $60 supply ~20% of world market (ended 2013) $40 Cigar Lake $20 f
Slide 10: Yet no U3O8 price response
Yet no U3O8 price response 10 Utility procurement programs on hold Limited term contracting in recent years • s232 Petition in US • 665 Mlbs utility uncovered requirements to 2027 • Other geo-political uncertainty • Uncovered requirements building from 2020 • Comfort from inventory levels • In conte
Slide 11: How to get set for a uranium bull market
How to get set for a uranium bull market 11 Track record in sector Advanced asset Leveraged to price Low non-financial risks Strategic appeal Leadership can deliver Characteristics of the best performers in early bull markets.
Slide 12: Bannerman is the ideal uranium bull market exposure
Bannerman is the ideal uranium bull market exposure 12
Slide 13: Track record in sector
Track record in sector Bannerman has a long track record in uranium 13
Slide 14: Bannerman has a long track record in uranium
Bannerman has a long track record in uranium 14 Uranium only since 2006 Operating in Namibia since 2006 Deep sector experience History of institutional support Nuclear industry profile Established credibility and leverage
Slide 15: Bannerman has a long track record in uranium
Bannerman has a long track record in uranium 15 Peak enterprise value $522m $4.00 BMN share price (ASX, monthly average) 40.0 30.0 $3.00 Global supply-demand balance (Mlbs U3O8e) 20.0 $2.00 10.0 $1.00 0.0 $0.00 2005A 2006A 2007A 2008A 2009A 2010A 2011A 2012A 2013A 2014A 2015A 2016A 2017A 2018E -10.0
Slide 16: Leveraged to price
Leveraged to price Bannerman offers sector leading valuation leverage to a uranium price correction 16
Slide 17: EV per resource/reserve pound (US$/lb)
EV per resource/reserve pound (US$/lb) 3.00 0.00 0.50 1.00 1.50 2.00 2.50 NexGen (TSX:NXE) Berkeley (ASX:BKY) Fission (TSX:FCU) Westwater (NDAQ:WWR) Outstanding in-ground price leverage Boss (ASX:BOE) Peninsula (ASX:PEN) EV / Resource Toro (ASX:TOE) Deep Yellow (ASX:DYL) EV / Reserve Vimy (ASX:VMY)
Slide 18: Sector leading valuation leverage
Sector leading valuation leverage 18 NPV sensitivity curve 500% to uranium price (2015 Term Price Optimisation Study) % of base Etango post-tax NPV8 (base = 100%) Jun 2007 – Apr 2008 400% UXC Est. Domestic Chinese Production ge Incentive Price ran n 300% retio cc Spot Price (base) Pre-Fukushima PVa
Slide 19: Strategic appeal
Strategic appeal Etango is the largest un-aligned uranium project with a feasibility study 19
Slide 20: Strategic appeal: Global uranium mines and projects
Wiluna (PFS) 20 Honeymoon (PFS) Lance (in ramp-up) Letlhakane (PEA/SS) Madaouela (PFS) Mulga Rock (DFS) Kayelekera Salamanca*** (DFS) * CGN owns 19.99% of Fission Uranium Corp head equity ** CNNC owns 25% of Langer Heinrich project equity *** SGRF has conversion rights and options to own up to 37% o
Slide 21: Strategic appeal: Global uranium projects
Wiluna (PFS) 21 Honeymoon (PFS) Lance (in ramp-up) Letlhakane (PEA/SS) Madaouela (PFS) Mulga Rock (DFS) Kayelekera Salamanca*** (DFS) * CGN owns 19.99% of Fission Uranium Corp head equity ** CNNC owns 25% of Langer Heinrich project equity *** SGRF has conversion rights and options to own up to 37% o
Slide 22: Projects not owned by a uranium major or SOE
Wiluna (PFS) 22 Honeymoon (PFS) Lance (in ramp-up) Letlhakane (PEA/SS) Madaouela (PFS) Mulga Rock (DFS) Kayelekera Salamanca*** (DFS) * CGN owns 19.99% of Fission Uranium Corp head equity ** CNNC owns 25% of Langer Heinrich project equity *** SGRF has conversion rights and options to own up to 37% o
Slide 23: Projects not owned by a major or SOE with a completed DFS
Wiluna (PFS) 23 Honeymoon (PFS) Lance (in ramp-up) Letlhakane (PEA/SS) Madaouela (PFS) Mulga Rock (DFS) Kayelekera Salamanca*** (DFS) * CGN owns 19.99% of Fission Uranium Corp head equity ** CNNC owns 25% of Langer Heinrich project equity *** SGRF has conversion rights and options to own up to 37% o
Slide 24: Advanced asset
Advanced asset Etango is the most advanced uranium asset not in construction 24
Slide 25: A shovel ready project
A shovel ready project 25 EARLY STAGE OR CONCEPTUAL STUDY ADVANCED FEASIBILITY WORK WILUNA (ASX: TOE) DEVELOPMENT ARROW HONEY YELEERIE MOON (TSX/NYSE: NXE) (TSX: CCO) (ASX: BOE) MADAOUELA (TSXV: GXU) ETANGO (ASX: BMN) SALAMANCA (ASX: BKY) NORASA (TSX: FSY) MULGA KINTYRE TUMAS TRIPLE R ROCK (ASX: DYL
Slide 26: Low non-financial risks
Low non-financial risks Etango has low technical risk in the world’s premier uranium jurisdiction 26
Slide 27: Bannerman has low technical risk…
Bannerman has low technical risk… 27 Etango is a low technical risk project BMN market cap has substantial value backing ü Permitted with Retention Licence ü ~360,000m of drilling ü Environmental/social approvals in place ü Huge volume of technical work, (including DFS) ü Simple, bulk tonnage operat
Slide 28: …in the world’s premier uranium jurisdiction
…in the world’s premier uranium jurisdiction 28 Namibia is the premier uranium jurisdiction ü +40 year production history ü Global player in uranium ü Politically/socially supportive ü Excellent infrastructure: port/road/rail/water/power First class operating jurisdiction ü Stable and secure ü Stron
Slide 29: Leadership can deliver
Leadership can deliver Bannerman has the team to deliver value to shareholders 29
Slide 30: Bannerman has the team to deliver value to shareholders
Bannerman has the team to deliver value to shareholders 30 Ronnie Beevor Brandon Munro Mike Leech Chairman CEO Chairman (Namibia) ü 35 years investment banking Ø 20 years mergers and experience acquisitions/resources Ø 30 years Namibian uranium ü Former head of Rothschild experience operating experi
Slide 31: Bannerman offers outstanding uranium sector opportunity
Bannerman offers outstanding uranium sector opportunity 31 A sector moving from long … plus growing demand bear market into deficit… momentum. … Bannerman can maximise shareholder value. … with sharp supply In a sector famed for catalysts in the short term… bull markets… BMN
Slide 32: Appendix A: Uranium peer comparative
Appendix A: Uranium peer comparative 32 Key listings ASX: BMN ASX: VMY ASX: TOE ASX: BKY ASX: BOE ASX: URI ASX: PEN ASX: DYL ASX: ACB TSX: FSY TSX: FCU TSX: NXE TSX: GXU AIM: BKY N’daq: WWR NYSE: NXE Market cap 28 34 43 156 72 17 43 44 44 13 250 664 61 (US$m) Flagship Etango, Mulga Rock, Wiluna, Sal
Slide 33: Appendix B: Bannerman team
Appendix B: Bannerman team 33 Strong and experienced board Skilled management with Namibian expertise 30+ years investment banking experience incl. head of 20 years transactional and financing experience as a Ronnie Beevor Rothschild Australia. Brandon Munro corporate lawyer and resources executive.
Slide 34: Appendix C: Etango Project – resources and reserves
Appendix C: Etango Project – resources and reserves 34 Etango Project – Mineral Resource Estimate Mineral Resource Note 1: Refer to the Competent Persons Statement at the start of this document for Measured Indicated Inferred further information on the Etango Mineral Resource Estimate. The Etango es
Slide 35: Appendix D: Robust development economics
Appendix D: Robust development economics 35 DFS Opt Study Key project parameters To be improved in DFS Update World class scale (November 2015) Production (U3O8 LOM avg) 7.2 Mlb pa Processing Optimisation Study completed 2017 Total resource size of 271 Mlbs* U3O8, including ü US$73M estimated capita