Energy Resources Of Australia Ltd. Class A · ASX:ERA
Energy Resources Of Australia Ltd. Class A — Investor Presentation (April 2012)
30 slides from Energy Resources Of Australia Ltd. Class A's investor presentation, Apr 16, 2012
Slide 1: ASX cover letter to Company Announcements Office
Head office Level 10, TIO Centre, 24 Mitchell St, Darwin NT 0800 GPO Box 2394, Darwin NT 0801, Australia T +61 8 8924 3500 F +61 8 8924 3555 Ranger mine Locked Bag 1, Jabiru NT 0886 Australia T +61 8 8938 1211 F +61 8 8938 1203 www.energyres.com.au ABN 71 008 550 865 A member of the Rio Tinto Group
Slide 2: ERA Update April 2012
ERA Update April 2012 For personal use only 1
Slide 3: Acknowledge Traditional Owners
Acknowledge Traditional Owners For personal use only • The mining operations of Energy Resources of Australia Ltd (ERA) are located on Aboriginal land and are surrounded by, but separate from, Kakadu National Park • ERA respectfully acknowledges the Mirarr, Traditional Owners of the land on which th
Slide 4: Forward-looking statement
Forward-looking statement • This presentation has been prepared by Energy Resources of Australia Ltd (“ERA”) and consists of the slides for a presentation concerning ERA. By reviewing/attending this presentation you agree to be bound by the following conditions. For personal use only Forward-looking
Slide 5: Agenda
Agenda • Safety • Capital expenditure For personal use only • People • Rehabilitation provision • Rainfall • What ERA must do • Pit 3 status • Ranger 3 Deeps exploration decline • Dewatering Pit 3 • Brine Concentrator • Pit 3 mining sequence • Exploration programme • Stockpile mining • Strategic mil
Slide 6: Strong safety performance
Strong safety performance • Throughout challenging conditions in 2011, ERA maintained its strong focus on safety, achieving a world class two million hours without a Lost Time Injury (LTI) and an All Injury Frequency Rate (AIFR) of 0.57 For personal use only • In 2011, ERA achieved 336 consecutive d
Slide 7: People Indigenous employment
People Indigenous employment • ERA is a major employer in the West For personal use only Arnhem region, and one of the leading employers of Indigenous people in the Northern Territory • As at 13 April 2012, ERA had 109 Indigenous employees (total ERA staff 560) • During 2011, ERA endorsed a new Indi
Slide 8: Rainfall tracker - April 2012
For personal use only Rainfall tracker - 13 April 2012 Significantly less rainfall than 2011 7
Slide 9: Pit status - April 2012
Pit 3 status - 13 April 2012 Quantity of water in Pit 3 (blue line) For personal use only Significantly less water in Pit 3 than 2011 • Currently 1.2 GL of water in Pit 3 and expected to be pumped dry by July 2012 8
Slide 10: Expected stages of dewatering levels in Pit
Expected stages of dewatering levels in Pit 3 April 2012 For personal use only June 2012 July 2012 -145RL 9
Slide 11: Projected Pit mining sequence to completion
Projected Pit 3 mining sequence to completion For personal use only Final pit design highlighting haul road 10
Slide 12: Stockpile mining
Stockpile mining • Q1 2012 production For personal use only predominantly from stockpiles • 612 tonnes of U308 produced in Q1 (average mill head Waste grade of 0.11% U308) • Average grade of all stockpiles is 0.12% U308 Ore • Post completion of pit all U308 production will come from stockpiles 11
Slide 13: Continued strong plant performance in 2012
For personal use only Continued strong plant performance in 2012 H2 20111 Q1 20121 Mill rate (tph) 300 305 Plant utilisation (%) 93.0 89.52 Uranium recovery (%) 89.0 89.0 Soluble loss (%) 2.8 2.9 Uranium recovery (%) 89.2 89.1 Grade (%) 0.171 0.11 1 Average over the relevant period 2 Utilisation imp
Slide 14: Ranger production forecast
Ranger production forecast Based on reserves of 13,484 tonnes of uranium oxide as of 31 December 2011 and current operations (excludes Ranger 3 Deeps production) For personal use only Note: 1 A decision to proceed with the development of the Ranger 3 Deeps mine is expected to have a favourable impac
Slide 15: Non-cash costs
Non-cash costs Over the next years, the non-cash cost will significantly increase For personal use only The increase is due to: – Property, plant and equipment net value of $741 million as of 31 December 2011 (including rehabilitation asset) – Capital expenditure of approximately $350 million from 2
Slide 16: $150 million savings targeted by end of 2014
$150 million savings targeted by end of 2014 • Significant cost saving initiatives – For personal use only – Vendor consolidation – 7:7 roster change – Contractor rationalisation – Leach Ph control – Lime usage – In-house maintenance – Merging of departments • $20 million cost savings realised in 20
Slide 17: Estimated capital expenditure
Estimated capital expenditure Capital (AUD $m) 2012 2013 2014 Capital Raising initiatives For personal use only Brine Concentrator 111 82 - Initiative $ million Commenced Tailings and pumping system - 47 - Brine Concentrator 220 Ranger 3 Deeps 120 Pond water retention pond 40 - - exploration dec
Slide 18: Activities included in the rehabilitation provision
Activities included in the rehabilitation provision Waste rock For personal use only placed in base of Pit 3 Mining completed in Pit 3 Waste rock used to cap Pit 1 and 3 Water treatment (Brine Concentrator) Wick installation to Tailings transferred drain Pit 1 to Pit 3 Profile of backfilled Pit 3 17
Slide 19: What ERA must do
What ERA must do • Continue to strengthen relationship with the GAC and Mirarr For personal use only • Complete Pit 3 in 2012 • Demonstrate successful treatment of water • Commence progressive rehabilitation on key areas on Ranger Project Area • Transition from open pit mining to a potential undergr
Slide 20: Ranger Deeps exploration decline on target
For personal use only Ranger 3 Deeps exploration decline on target Pit 3 • Detailed engineering has been completed • Box cut/decline contract awarded to Macmahon Holdings • Commencement of construction scheduled for 1 May 2012 • The first stage of construction is excavation of the box cut and instal
Slide 21: Ranger Deeps – indicative milestones to production
Ranger 3 Deeps – indicative milestones to production For personal use only Milestone Date Regulatory approval for exploration decline granted September 2011 Commencement of box cut excavation 1 May 20121 Exploration and resource drilling completed Mid 20141 Feasibility study complete Late 20141 Regu
Slide 22: Brine Concentrator on target
Brine Concentrator on target • ERA Board approved project on 1 February 2012 with estimated expenditure of $220 million For personal use only • The Brine Concentrator is being provided by HPD LLC, a subsidiary of Veolia Water Solutions and Technologies • Construction occurring in the USA, Germany, C
Slide 23: The Ranger Project Area has significant potential
The Ranger Project Area has significant potential • Exploration phase 1 – 2012 (marked in yellow) For personal use only 3m @ 0.14% (121m) 1m @ 0.13% (150m) – 15 new drill holes south of Magela Creek – 17 drill holes diamond tails north of Magela – Average depth +500m • Exploration phase 2 – 2012 wil
Slide 24: Strategic project milestones
Strategic project milestones 2012 2013 2014 Project A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D For personal use only Pit 3 mining completion Ranger Project Area Exploration Ranger 3 Deeps exploration decline
Slide 25: Improving relationship with Traditional Owners
Improving relationship with Traditional Owners • Expect to conclude a new mining agreement in Q2 2012 For personal use only – An Agreement respecting Mirarr traditional ownership and entitling them to greater participation in the benefits from mining on their land – Reflects Traditional Owners havin
Slide 26: ERA is the economic driver in the local region
ERA is the economic driver in the local region • Territory workforce with focus on Indigenous employment and training For personal use only • Economic contribution due to – – Employment of 600 employees direct employees and a substantial number of contractors – Royalty payments of 5.5% all of which
Slide 27: Market summary - near term outlook (1-2 years)
Market summary - near term outlook (1-2 years) For personal use only • Effects of Fukushima still being felt by the market • Deferred Japanese demand supplementing normal supply • Prices to remain suppressed until surplus material clears the market • Near term demand weak • Utilities appear to be we
Slide 28: Market summary – mid to long term outlook
Market summary – mid to long term outlook For personal use only • Longer term outlook is considerably more positive driven primarily by China and then wider Asia • Demand is expected to grow over the long term as concerns about climate change and energy security encourage further development of nucl
Slide 29: Summary
Summary • Continued strong safety performance For personal use only • Water continues to be managed well • Significantly less rainfall in 2011/12 than the 2010/11 wet season • Pit 3 expected to be fully dewatered in July 2012 and mining completed by the end of 2012 • Continued strong plant performan
Slide 30: Ranger mine overview 2012
For personal use only Ranger mine overview 2012 Pit 1 Rehabilitation Pit 3 activities complete commences mining by 2012 Brine 2012 Concentrator Commissioning 2013 Ranger 3 Deeps Exploration Decline Construction starts 2012 29
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