Slide 1: Dubbo Zirconia Project - Sydney Presentation
For personal use only Dubbo Zirconia Project NSW Australia Sydney Presentation 26 June 2013 ©
Slide 2: Corporate Profile
Corporate Profile • Listed on ASX since 1969, also listed on OTCQX For personal use only • Market cap $120M • 6,100 shareholders (85% Australian) • Multi commodity explorer, miner and developer focused on Central West of NSW • Active in region for more than 20 years • Developed Peak Hill Gold Mine i
Slide 3: The Dubbo Zirconia Project
The Dubbo Zirconia Project For personal use only • A very large* polymetallic resource of the metals zirconium (hafnium), niobium (tantalum), yttrium and rare earths • Important and strategic metal mix, including 25% heavy rare earth • Open pit life of at least 70 years • Demonstrated flow sheet wit
Slide 4: Rare Metals - Rare Earths
Rare Metals - Rare Earths For personal use only Rare Metals – Rare Earths • China produces 90% of world downstream zirconium chemicals • China currently produces 95% of world REE output • China is limiting the export of raw rare Rare metals earths materials • Brazil produces 90% of world niobium Lig
Slide 5: Zirconium Industry
Zirconium Industry For personal use only DZP target market Increasing prices Increasing purity ©
Slide 6: Zirconium Industry
Zirconium Industry For personal use only Zirconium Chemicals Output (2011 – 194,000t ZrO2 basis CAGR 10% ) Baddeleyite, 7000t ZOC 50000t Fused unstabilised zirconia 72000t Fused Chemical stabilised zirconia zirconia 40000t 25000t • Mid 2013 consumer zircon inventories running down • Market expected
Slide 7: Zirconium Prices
Zirconium Prices For personal use only • China produces 90% of Zirconium Price Trends US$/kg world downstream 12000 zirconium chemicals 10000 • Zircon is the primary feed 8000 for downstream industry US$/T • Zirconium chemicals - 6000 zirconia market (estimated) 4000 • 140,000t in 2012 2000 • 240,00
Slide 8: Zirconium Applications
Zirconium Applications For personal use only © 8
Slide 9: Niobium Industry/Price
Niobium Industry/Price For personal use only • CBMM (Brazil) dominates the industry 85% (80,000t) of world production in 2012 • Early 2011 a Japanese Korean consortium acquired 15% of CBMM for US$1.95B • September 2011 a Chinese consortium acquired 15% of CBMM for US$1.95B Niobium market supply © So
Slide 10: Niobium Industry
Niobium Industry For personal use only Current use of ferro-niobium 13% 29% Structural 10% Pipe Auto Stainless Other 24% 24% • 90% of Nb used in standard grade ferro-niobium for the production of high strength low alloy (HSLA) steels • Nb HSLA steels are primarily consumed in structural and pipe, bu
Slide 11: Niobium Applications
Niobium Applications For personal use only © 11
Slide 12: REE Industry
REE Industry For personal use only REE DEMAND 2016 Other Catalysts • Total REE consumption 2012 115,000t 12% 15% with annual growth estimated at 5- Ceramics 10% to be 162,000t in 2016 6% • China produces about 90% of world Glass 6% supply and consumed about 65%, Phosphors with Japan 15% and the US 1
Slide 13: REE Supply - Demand
REE Supply - Demand For personal use only © Source: IMCOA 13
Slide 14: REE Prices
REE Prices For personal use only DZP Light REE mix DZP Heavy REE mix DZP LREE US$/kg DZP YHREE US$/kg $180 $350 $160 $300 $140 $250 $120 $100 $200 US$/kg US$/kg $80 $150 $60 $100 $40 $20 $50 $- $- 4Q 2Q 4Q 1Q 2Q 3Q 4Q 1Q 4Q 2Q 4Q 1Q 2Q 3Q 4Q 1Q 2010 2011 2011 2012 2012 2012 2012 2013 2010 2011 2011
Slide 15: Rare Earth Applications
Rare Earth Applications For personal use only © 15
Slide 16: DZP Process Flow Sheet
DZP Process Flow Sheet For personal use only Demonstration Pilot Plant – established 2008 ANSTO – Aust. Nuclear Science & Technology Organisation Process – unique & advanced Optimization – ongoing Simple open cut mining operation Crushing and grinding Sulphuric acid leach whole of ore
Slide 17: DZP Demonstration Pilot Plant
DZP Demonstration Pilot Plant For personal use only Y and HREE refining and recovery DPP Filtration, PLS, SX, Zr and Nb recovery Zirconium refining and precipitation Reverse osmosis and water recycle © Operating at ANSTO since 2008 17
Slide 18: DZP Pathway to Market
DZP Pathway to Market For personal use only AZL MoU’s and Agreements to secure 100% of output Zirconium (Zr) • Leading chemical company to develop applications and markets in Asia for zirconia produced by DZP • European manufacturer/trading company to market DZP products in Europe and North America
Slide 19: DZP Product Output
DZP Product Output For personal use only 100% 4% 911t $149.4M 90% 18% 3,997t 30% 80% 9% 1,967t 70% $118.7M 60% 24% 50% 15,827t 40% $81.5M 16% 70% 30% 20% $153.9M 31% 10% 0% Production 22,702T Revenue A$503.5M ZrO2 Nb metal LREO concentrate HREO concentrate © 19
Slide 20: DZP Operating Costs
DZP Operating Costs For personal use only Annual operation costs at 1Mtpa steady state A$214M • Polymetallic deposit and integrated flow sheet makes it difficult to assign costs to specific products • For total output, cost ~US$8.80/kg • On a proportional revenue basis: Zirconium ~US$ 3.90/kg Niobiu
Slide 21: DZP Feasibility Study
DZP Feasibility Study For personal use only DUBBO ZIRCONIA PROJECT Financial Summary for 20 year life in A$ Project Capacity 1,000,000 tonnes pa Capex – Plant $396.8M Sulphuric Acid Plant $116.6M Infrastructure + Owners $253.4M SUB TOTAL $766.8M EPCM $63.5M Contingency (20%) $166.1M TOTAL $996.4M An
Slide 22: DZP Infrastructure
DZP Infrastructure For personal use only • 20km from Dubbo (43,000 pop) • Access to skilled local labour • 250 permanent workforce • Access to State power and gas • Land and water being secured • Waste to be stored onsite • EIS to be lodged June 2013 • Production expected Q1 2016 © 22
Slide 23: DZP Environment
DZP Environment Alkane has a 25 year history of sustainable mine management For personal use only EIS addresses all environmental aspects Water • 70% recycle of process water currently achievable • Limited groundwater aquifers – minimal impact • Water secured from existing water licences Power • The
Slide 24: DZP Community Inclusion
DZP Community Inclusion For personal use only Community involvement is core to our work • Regular community consultation’s and newsletters • RTO’s invited to Alkane demonstration pilot plant to discuss job training/planning • Community feedback and discussion encouraged • Local aboriginal community
Slide 25: DZP Financing
DZP Financing For personal use only • $1 billion DZP finance package being arranged by: o Credit Suisse (Australia) o Sumitomo Mitsui Banking Corporation o Petra Capital • Finance sources: o Possible sale of a strategic minority stake in DZP o International Government funding (ECA) o Commercial debt
Slide 26: DZP Major Milestones
DZP Major Milestones For personal use only Major Milestones 2013 2014 2015 2016 Environmental Impact Statement Project Approval Process Project Financing Program EPC / EPCM tender award Detailed design / Long lead orders CONSTRUCTION PRODUCTION © 26
Slide 27: Financial and Equity
Financial and Equity For personal use only Financial Equity Shares – 372,539,000 Hedge Funds 6% Domestic Market Capitalisation – A$120M (21 June 2013) Institutions 20% Retail and Foreign Cash & Investments – A$120M (31 May 2013) others 34% Institutions 14% 2012 Financials Directors and manag
Slide 28: The Bottom Line
The Bottom Line Cash flow from Tomingley Gold Project early 2014 - $20-25Mpa at current spot gold For personal use only • • This cash flow supports all Alkane’s activities and provides DZP funding options • Dubbo Zirconia Project – strategically important zirconia and heavy rare earth production • L
Slide 29: Dubbo Zirconia Project
For personal use only Dubbo Zirconia Project The DZP is a world class project providing a strategic and alternate supply of zirconium, niobium and rare earths for rapidly developing international “Future Metal” markets for many years. www.alkane.com.au View a video summarizing the DZP at: http://www
Slide 30: Disclaimer
Disclaimer For personal use only Disclaimer This presentation contains certain forward looking statements and forecasts, including possible or assumed reserves and resources, production levels and rates, costs, prices, future performance or potential growth of Alkane Resources Ltd, industry growth o
Slide 31: DZP Resource & Reserves
DZP Resource & Reserves For personal use only Dubbo Zirconia Project – Mineral Resources Toongi Tonnage ZrO2 HfO2 Nb2O5 Ta2O5 Y2O3 REO Deposit (Mt) (%) (%) (%) (%) (%) (%) Measured 35.70 1.96 0.04 0.46 0.03 0.14 0.75 Inferred 37.50 1.96 0.04 0.46 0.03 0.14 0.75 Total 73.20 1.96 0.04 0.46 0.03 0.14 0