Agrimin Limited · ASX:AMN
Agrimin — Diggers & Dealers Mining Forum 2018
35 slides from Agrimin's conference presentation, August 2018
Slide 1: Investor Presentation Diggers & Dealers Mining Forum 2018
Investor Presentation Diggers & Dealers Mining Forum 2018
Slide 2: Important Notices and Disclaimers
Important Notices and Disclaimers Nature of Document This presentation has been prepared as a summary only, and does not contain all information about Agrimin Limited’s (“Agrimin” or “the Company”) assets and liabilities, financial position and performance, profits and losses, prospects, and the rig
Slide 3: Agrimin Highlights
Agrimin Highlights ➢ Major structural changes to BOTH supply and demand = opportunity for the establishment of a significant new seaborne supplier of SOP ➢ Pre-Feasibility Study demonstrated the potential for the Mackay SOP Project to become the largest and lowest cost seaborne supply ➢ Definitive F
Slide 4: Corporate Overview
Corporate Overview Capital Structure (as at 6 August 2018) Share Price Chart ASX Code AMN Share Price A$0.86 Positive $1.40 Pre-Feasibility Shares 169.6M Native Title Study Share Rights 8.0M $1.20 Agreement Positive Signed Market Capitalisation A$145.9M Scoping $1.00 Study Cash A$14.4M $0.80 Maiden
Slide 5: Mackay SOP Project
Mackay SOP Project Western Australia
Slide 6: Project Overview
Project Overview ➢ Project is situated on the world’s largest undeveloped SOP bearing Project Location & Proposed Infrastructure Corridor salt lake and is 100% owned by Agrimin ➢ Located 785km south of Wyndham Port in Western Australia ➢ Pre-Feasibility Study completed in May 2018 and demonstrated t
Slide 7: Highly Attractive Project Economics
Highly Attractive Project Economics ➢ Pre-Feasibility Study1 indicates the Mackay SOP Project is a Pre-Feasibility Study Material Assumptions and Outcomes technically and financially robust development proposition Parameter Value Initial Operating Life 20 years Annual SOP Production Rate 426,000t ➢
Slide 8: Operating Costs
Operating Costs ➢ Agrimin’s AISC of US$256/t will be in the bottom quartile of Operating Cost Estimates (±25%) the global cost curve Parameter US$/t Labour 42.78 All-In Sustaining Cost Breakdown Electricity 47.22 Maintenance & Consumables 10.03 Road Haulage Royalties & & Shiploading Gas & Diesel Fue
Slide 9: Capital Costs
Capital Costs ➢ Capital cost of US$409M has a post-tax payback period of Capital Cost Estimates (±25%) 4.2 years Parameter US$M Brine Field 28.0 Capital Cost Breakdown Evaporation Pond System 52.6 Camp & Indirects & Process Plant 80.1 Infrastruction Contingecy Trench & Pond Utilities & Equipment 42.
Slide 10: Key Attributes that Support Large-Scale Production
Key Attributes that Support Large-Scale Production ➢ Potassium and Sulphate mineralisation is dissolved within the hypersaline groundwater (brine) in Lake Mackay Shallow Brine Resources Across the Entire Deposit ➢ Total Mineral Resource1 of 26.1Mt of SOP (drainable porosity) and 264.4Mt of SOP (tota
Slide 11: Project Scale has Growth Potential
Project Scale has Growth Potential ➢ Mineral Resources are hosted within a single Project Tenement Map contiguous brine deposit across Lake Mackay ➢ Current proposed development covers only 70% of the overall project area, with potential to expand over time ➢ Deepest drill hole on Lake Mackay is 30m
Slide 12: Mineral Resources
Mineral Resources1 ➢ Shallow Mineral Resources commence at an average of 0.4m beneath the ground surface across the entire deposit ➢ 98 drill holes on a 5km grid provide a strong geological understanding of the deposit ➢ Long-term pumping tests up to 120 days provide a strong basis for the developme
Slide 13: Mine Plan
Mine Plan ➢ Mine plan predicts an average annual brine extraction Mine Plan – Brine Extraction and Grade rate of 66.3Mm3 at 8.0kg/m3 of SOP over an initial 20 90.0 9.0 year period 80.0 8.0 70.0 7.0 ➢ Mine Plan is based on a portion of the Indicated 60.0 6.0 Mineral Resource to a depth of only 3.0m A
Slide 14: Near Surface Brine Provides Low Resource Risk
Near Surface Brine Provides Low Resource Risk ➢ Simple and low-cost extraction of Potassium-rich brine via a Proposed Trench Layout (20 Years) shallow on-lake trench system ➢ Trench design optimised to allow natural surface water movement to the feed channel Pilot Trenching on Lake Mackay Investor P
Slide 15: Large On-Lake Area Supports a Sustainable Operation
Large On-Lake Area Supports a Sustainable Operation ➢ Full-scale evaporation ponds will cover less than 2% of Proposed Evaporation Pond Layout (20 Years) Lake Mackay over the project’s initial 20 year life ➢ Unlined evaporation ponds to have a low capital cost and use of wet harvesters to provide op
Slide 16: Significant Investment in New Regional Infrastructure
Significant Investment in New Regional Infrastructure ➢ Gas to be supplied via a pipeline connected to the Amadeus Gas Proposed Site Layout Pipeline, proposed under a Build-Own-Operation (BOO) arrangement ➢ Process water to be supplied by a raw water borefield located to the south-east of the proces
Slide 17: Mine-to-Ship Logistics Chain
Mine-to-Ship Logistics Chain ➢ Supply and demand fundamentals for SOP support the Proposed Quad Road Train Configuration establishment of reliable and large-scale seaborne supply ➢ A dedicated fleet of quad road trains will be loaded via a load-out facility at the process plant Wyndham Port ➢ Road t
Slide 18: High Quality SOP Samples Produced
High Quality SOP Samples Produced ➢ Process testwork has produced commercial grade SOP samples Simplified Process Flow Diagram (>52% K2O) that exceed industry benchmark grades ➢ Saskatchewan Research Council has completed extensive testwork to validate the conventional SOP production flowsheet SOP S
Slide 19: Long-Term Field Work Underway
Long-Term Field Work Underway ➢ Long-term field tests commenced in August 2017 and will continue throughout 2018 to support the Definitive Feasibility Study ➢ Pilot scale evaporation trials underway to test the full crystallisation process under site conditions ➢ Environmental and heritage surveys c
Slide 20: Indicative Project Delivery Schedule
Indicative Project Delivery Schedule 2018 2019 2020 2021 Activity Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Off-take & Project Financing Definitive Feasibility Study Environmental Assessment Front End Engineering Design Regulatory Approvals Site Establishment Trench & Pond Earthworks Plant & Infrast
Slide 21: A Catalyst for Regional Economic Development
A Catalyst for Regional Economic Development ➢ Agrimin’s proposed US$409M fertilizer operation at Lake Mackay is the only advanced industrial development in this very remote part of Australia ➢ The Mackay SOP Project will create substantial economic and public benefits for Australia’s central desert
Slide 22: Sulphate of Potash (SOP)
Sulphate of Potash (SOP) Specialty Fertilizer for Modern Agriculture
Slide 23: Overview of Fertilizers
Overview of Fertilizers ➢ Fertilizers provide three macronutrients that every crop needs: ➢ Nitrogen (N) – the most important for healthy plant growth, such as leaf size, colour and yield ➢ Phosphorus (P) – vital for photosynthesis and enhances stem durability ➢ Potassium (K) – essential to increase
Slide 24: Potash Overview
Potash Overview ➢ 90% of all potash production is in the form of MOP (muriate of potash) which contains 46% chloride ➢ SOP is chloride-free and vital for cash crops, such as fruits and vegetables. SOP improves nutritional value, taste and appearance of crops ➢ Global SOP market is 7Mtpa and valued a
Slide 25: Robust Outlook for SOP Prices
Robust Outlook for SOP Prices ➢ SOP demand in China has more than tripled since 2007 and was met with a tripling in supply… but future supply growth is not apparent ➢ Long-term SOP prices will be supported by major structural trends: 1. Strong demand caused by: • Increasing area under cultivation fo
Slide 26: Strong China SOP Prices
Strong China SOP Prices ➢ SOP prices in China have increased by >30% in the China SOP Price – 2 Year History last 2 years due to strong demand growth and 650 3,600 rising production costs 600 3,400 550 3,200 ➢ Latest public price is US$478/t for Powder SOP and 500 3,000 US$502/t for Granular SOP (52
Slide 27: SOP Demand has Experienced Major Structural Change
SOP Demand has Experienced Major Structural Change Traditional Farmer Evolving Farmer 2009 2018 Source: Yara, Google Earth Investor Presentation | Diggers & Dealers Mining Forum 2018 27
Slide 28: SOP Supply has also Experienced Major Structural Change
SOP Supply has also Experienced Major Structural Change ➢ 3 major salt lake projects have been built in China in 2018 Forecast SOP Production of Major Producers1 the last 10 years to meet the increased SOP demand: 2,000,000tpa ➢ CITIC Guoan Group at Xitai Jinair salt lake (2012) 1,800,000tpa Salt La
Slide 29: An Emerging SOP Supply Gap in China
An Emerging SOP Supply Gap in China ➢ China’s demand for SOP has grown from 1.2Mtpa in 2007 to 4.0Mtpa in 2017. China now provides over 50% of current global demand ➢ This demand growth has been met by increased domestic production of SOP from new salt lake operations in China ➢ For the first time i
Slide 30: Tightening Environmental Controls are Impacting SOP
Tightening Environmental Controls are Impacting SOP ➢ There is approximately 3.2Mtpa of SOP Mannheim capacity ➢ More than 40% of China’s SOP supply comes from the throughout China, which produced a total of 1.7Mtpa in 2017 conversion of MOP to SOP using the Mannheim Process Mannheim Process: ➢ Stric
Slide 31: Compelling Investment Case for New Seaborne SOP Supply
Compelling Investment Case for New Seaborne SOP Supply ➢ Agrimin is aiming to become the largest and lowest cost supplier of seaborne SOP 2017 Global SOP Cost Curve (FOB) ➢ Major industry opportunity to replace high-cost Mannheim production in China ➢ Australia has the advantages of low geopolitical
Slide 32: Office Contact
Office Contact: 2C Loch Street Nedlands, Western Australia 6009 Australia T: +61 8 9389 5363 E: admin@agrimin.com.au W: www.agrimin.com.au Investor Relations Contact: Mark Savich Chief Executive Officer M: +61 402 746 757 E: msavich@agrimin.com.au Media Contact: Michael Vaughan Fivemark Partners M:
Slide 33: Appendix 1. Key People
Appendix 1. Key People Board of Directors Key Technical Personnel Mark Savich | Chief Executive Officer Tom Lyons | General Manager Financial analyst (CFA) with 14 years of experience in the resources Geologist with experience in a range of commodities including industrial minerals, metals and bulks
Slide 34: Appendix 2. Mineral Resources Statement (JORC Code 2012)
Appendix 2. Mineral Resources Statement (JORC Code 2012) Mineral Resource – April 2018 (Total Porosity) Category State Depth (mbgs) Volume (Mm3) Average Total Porosity SOP Grade (kg/m3) Contained SOP (Mt) Indicated WA 0.40 – 11.25 24,182 46.1% 8.3 92.2 WA 0.40 – 11.25 2,627 46.0% 8.2 9.9 NT 0.40 – 1
Slide 35: Appendix 3. Climate
Appendix 3. Climate ➢ Arid climate of Lake Mackay is excellent for solar evaporation of brines ➢ Project is located in the highest solar radiation zone in the country with an evaporation rate of between 3,200mm to 3,400mm per year ➢ Project area has an average rainfall of 280mm per year Average Annu