Neurizer Ltd · ASX:NRZ
Neurizer — Investor Presentation (May 2018)
37 slides from Neurizer's investor presentation, May 16, 2018
Slide 1: Small Scale Commercial Development Pathway
Wednesday, 16 May 2018: ASX ANNOUNCEMENT (ASX: LCK) Small Scale Commercial Development Pathway • Post PCD small scale power generation pathway selected • Staged development approach provides multiple de-risking benefits • Logical step toward a large scale commercial project Leigh Creek Energy Limite
Slide 2: About Leigh Creek Energy
For further information contact: Tony Lawry | Corporate and Investor Relations T: +61 (0) 412 467 160 | E: tony.lawry@lcke.com.au About Leigh Creek Energy Leigh Creek Energy Limited (LCK) is an emerging energy company focused on developing its Leigh Creek Energy Project (LCEP), located in South Aust
Slide 3: Poised for Growth - Corporate Presentation May 2018
POISED FOR GROWTH Corporate Presentation| May 2018 Phil Staveley - Managing Director www.lcke.com.au Leigh Creek Energy Limited (ASX: LCK) 1
Slide 4: Disclaimer
Disclaimer This presentation has been completed by Leigh Creek Energy Limited. It may contain forward looking statements that are subject to risk factors associated with the energy industry. It’s believed that the expectations reflected in these statements are reasonable, but they may be affected by
Slide 5: Table of Contents
Table of Contents Section 1 Overview Section 2 Project Status Section 3 Technology and Site Suitability Section 4 Regulatory Section 5 Market Opportunity Section 6 Team Section 7 Corporate and Financial LCK PCD site at Leigh Creek www.lcke.com.au Leigh Creek Energy Limited (ASX: LCK) 3
Slide 6: Overview
Overview • ASX listed (ASX:LCK) • Unconventional Gas company (ISG) – developer of energy, petrochemicals • Leigh Creek Energy Project – Flagship project • Major de-risking event occurred April 2018 – environmental approval received • PCD operations commence – planned Q3 2018 • Nationally significant
Slide 7: Commercial Pathway
Commercial Pathway 2021 2022 2023 2024 Feasibility Stage One Construction Stage One Operation Stage Two Construction Stage 2 Operation Staged Commercial Objectives: Small-scale Large-scale Appraisal Demonstration power plant commercial Commercial (Stage One) (Stage Two) Small-scale power p
Slide 8: Valuation Catalysts to Stage One Commercial
Valuation Catalysts to Stage One Commercial FID, Approvals, commence FEED, offtakes construction PRMS Contingent of power plant Resource upgraded to Reserve – 2C to 2P 2020 PCD syngas 2019 production Q4 2018 Q3 2018 Environmental Approval - complete April 2018 www.lcke.com.au Leigh Creek Energy Limi
Slide 9: Overview – Cornerstone Investor China New Energy Group Limited (32.8%)
Overview – Cornerstone Investor China New Energy Group Limited (32.8%) • Hong Kong based company jointly owning assets with Shanxi Meijin Energy Limited (Chinese private entity) • Contributed $20m in equity in 2017 (before fees) • Funds were received in 4 tranches – all settled early • Long term foc
Slide 10: Project Status
Project Status Section 2 Leigh Creek coal field www.lcke.com.au Leigh Creek Energy Limited (ASX: LCK) 8
Slide 11: Leigh Creek Coalfield – Best site in the world for ISG
RIGHT PLACE - Leigh Creek Coalfield – “Best site in the world for ISG” • Open-cut coal mine supplied Port Augusta power station, 250km away, for 60 years until 2016 • Remote location with pre-existing infrastructure available • No useful water resource or aquifer in vicinity of operations Former min
Slide 12: LCEP gas is a significant resource
LCEP gas is a significant resource Category 1C 2C 3C East Australian 2C gas resources 38,607 PJ Syngas Resource (PJ) 2,748 2,964 3,303 • Syngas resource: SPE-PRMS: 2,964 PJ 2C 7.8% • Potential for up to 80PJpa Leigh Creek Energy Project • 30+ year Project timeline • Portion of resources expected to
Slide 13: Development Pathway
Development Pathway Pre-commercial demonstration • Demonstrate effectiveness of ISG operations Small scale power • Inform design of commercial • Offtake agreements and plants negotiations commence • PRMS upgrade from 2C • Complete technical and Resource to 2P Reserve financial feasibility Large-scal
Slide 14: Next steps
Next steps 2015 2016 2017 2018 2019 2020 Appraisal FID Stage One Demonstration Small Power Plant Environmental approval • Complete Feasibility Study JORC Coal resource PRMS Gas resource • PCD assembled, tested and • Sales contracts and offtake commissioned agreements Site environmental chara
Slide 15: Next steps – 2018 PCD Operation
Next steps – 2018 PCD Operation 1. Construction commences Q2 2018 2. Activity Notification – ISG Well installation Q2 2018 3. Construction complete Q3 2018 4. Commissioning complete Q3 2018 5. Activity Notification – PCD Operations Q2 2018 6. Initiation of ISG chamber Q3 2018 7. PRMS upgrade process
Slide 16: PCD underway - outcomes and objectives
PCD underway - outcomes and objectives 1. Produce first gas from the ISG process at the LCEP 2. Demonstrate that LCK can operate ISG gasifiers safely and in an environmentally responsible manner 3. Provide information required for the review of the existing PRMS 2C Resource and the expected partial
Slide 17: Small-scale power plant is enabler for large-scale project
Small-scale power plant is enabler for large-scale project 1. Manageable project size 2. Low CAPEX 3. Low operational risk 4. Smaller scale reduces sovereign risk from government policy uncertainty 5. Simple design Appraisal Small-scale Demonstration Large-scale Commercial power plant petrochemicals
Slide 18: Commercial Studies are progressing
Commercial Studies are progressing Stage Two large scale options Power Generation - 460MW base load (completed 2016) Natural Gas - 80PJpa (completed 2016) Urea - 2Mtpa (ongoing) Methanol - 2Mtpa (ongoing) Encouraging results in petrochemicals/fertilisers There are no guarantees that a spec
Slide 19: Technology and Site Suitability
Technology and Site Suitability Section 3 www.lcke.com.au Leigh Creek Energy Limited (ASX: LCK) 17
Slide 20: In-Situ Gasification technology
In-Situ Gasification technology Successes and failures of ISG are not a function of the process technology, they are determined by the management of such technology and the suitability of the site In situ gasification (ISG) converts coal to Syngas underground and is brought to the surface. Syngas is
Slide 21: Worldwide experience of ISG
Worldwide experience of ISG International Carbon Energy,Bloodwood Creek • Angren, Uzbekistan - 60 years Queensland Government’s Chief Scientist, Dr. Geoff Garrett AO, confirmed that Carbon Energy: • Eskom, Majuba, South Africa • Met the key recommendations of the government appointed Independent Sci
Slide 22: Leigh Creek Coalfield – Best site in the world for ISG
RIGHT PLACE - Leigh Creek Coalfield – Best site in the world for ISG LCEP • No aquifers or users of groundwater in hydrology operational area • Water flows inward to the LCEP from surrounding strata • Limited use of water regionally • Water not connected to regional sources • Useful water resources
Slide 23: LCEP site meets these 4 parameters
Applying ‘best practice’ for ISG From Camp, W, and White, J “Underground Coal Gasification: An Overview of Groundwater Contamination Hazards and Mitigation Strategies, March 2015, Lawrence Livermore National Laboratory 1. Minimal and manageable land use conflict 2. Manageable groundwater resources 3
Slide 24: Regulatory
Aroona Dam Leigh Creek Regulatory Section 4 www.lcke.com.au Leigh Creek Energy Limited (ASX: LCK) 22
Slide 25: South Australia – Internationally recognised regulation
South Australia – Internationally recognised regulation South Australia consistently ranks well in the world’s oil and gas regulatory jurisdictions for exploration and production • Clear title and development pathway • ISG approval process outlined in existing legislation • Government support for Un
Slide 26: South Australia Assessment of Leigh Creek Energy UCG Trial Proposal
South Australia Assessment of Leigh Creek Energy UCG Trial Proposal, April 2018 • “key factors … proper site selection and deployment of fit for purpose technology and monitoring … “ • “the scenario at Leigh Creek is vastly different to that at Chinchilla, in terms of geology and operations…” • Vigi
Slide 27: South Australian government support consistent across administrations
South Australia – It’s all about the Science 7 March 2018 “project(s) should be fully assessed (and) guided by the experts (internal and external) … (to demonstrate) risk to the environment can be managed appropriately and safely, then consider economic benefits” Dan van Holst Pellekaan MP South Aus
Slide 28: Market Opportunity
Entrance to Leigh Creek site Market Opportunity Section 5 www.lcke.com.au Leigh Creek Energy Limited (ASX: LCK) 26
Slide 29: Stage Two Commercial Opportunities
Stage Two Commercial Opportunities Petrochemicals • Domestic and international demand - Australia heavily reliant on imports (particularly for urea) • High natural gas prices in Australia hampers new construction of domestic plants Electricity • Syngas a feedstock for production, conventionally prod
Slide 30: Team
Team Section 6 www.lcke.com.au Leigh Creek Energy Limited (ASX: LCK) 28
Slide 31: Experienced Executive Team
Experienced Executive Team Justyn Peters Lawyer; depth of experience in the ISG industry and senior management roles; experience in mining, industry Executive Chairman representative bodies and various state and federal environment departments and authorities. Phil Staveley Finance Executive; 30+ ye
Slide 32: Corporate & Financial
Corporate & Financial Section 7 www.lcke.com.au Leigh Creek Energy Limited (ASX: LCK) 30
Slide 33: Company Summary
Company Summary LCK Capital Structure Top Shareholders # of Shares % Ordinary Shares 415.9m China New Energy Group 136.3m 32.8 Listed Options ($0:50 strike) 17.7m Allied Resource Partners 94.7m 22.8 Unlisted Options ($0:21 - $1:50 strike) 24.9m CITIC Australia 17.2m 4.2 Market Cap @ $0:20 $83.4m Rub
Slide 34: Concluding Remarks
Concluding Remarks Section 8 www.lcke.com.au Leigh Creek Energy Limited (ASX: LCK) 32
Slide 35: The Chasm – EV/Resources (2C) ($/GJ)
The Chasm – EV/Resources (2C) ($/GJ) EV/Resources (2C) (A$/GJ) 1.60 1.50 Acquire $4:69/GJ M&A in the 1.40 d Lattice Takeover gas space 1.30 offers at Average: $1:30/GJ Energy approx. has 1.20 from 1.10 Origin EV traditionally 1.00 for taken place $1,585m 0.90 = at $0.50- 0.80 $1:19/G 1.00/GJ and 0.7
Slide 36: Conclusion: Right market, right time, right place
Conclusion: Right market, right time, right place 1. Large resource – 2,964 PJ 2. Near term de-risking events Environmental Approval – complete On site assembly of pre-fabricated PCD plant PCD operations PRMS upgrade to reserve 2,964 2C PJ Small scale Large scale 3. Long life project – 30+ y
Slide 37: Thank you for your time
Thank you for your time Questions? www.lcke.com.au Leigh Creek Energy Limited (ASX: LCK) 35