Reward Minerals Ltd · ASX:RWD
Reward Minerals — Investor Presentation (November 2018)
24 slides from Reward Minerals's investor presentation, Nov 19, 2018
Slide 1: Reward Minerals Limited CEO Presentation
REWARD MINERALS Developer of the LIMITED LD Brine SOP Project, the most compelling investment opportunity in the SOP space Proactive Investors CEO Presentation ASX | RWD 19 November 2018 www.rewardminerals.com
Slide 2: Forward Looking Statements & Disclaimer
FORWARD LOOKING STATEMENTS & DISCLAIMER This document includes forward-looking statements. When used in this document, the words such as “could”, “plan”, “estimate”, “expect”, “intend”, “may”, “potential”, “should”, and similar expressions are forward-looking statements. Although RWD believes that t
Slide 3: Investment Rationale
INVESTMENT RATIONALE Industry’s Largest most detailed, Lowest Deposit conservative rainfall High PFS Highest Yet… average in- evaporation Undervalued situ grade rate Underpinned by a key global investment theme: Feed the world! The most compelling investment opportunity in the SOP space 3
Slide 4: Contents
CONTENTS ►Corporate Snapshot ►SOP Market Introduction ►LD Project Overview & Metrics ►Current Activities ►Conclusions 4
Slide 5: Corporate Snapshot
CORPORATE SNAPSHOT Capital Structure 31 Oct 2018* ASX:RWD Ordinary Shares on Issue 162.1m Rights and Options on Issue 17.6m Share Price $0.135 Undiluted Market Capitalisation $21.9m Short Term Debt A$0.5m Cash & Equivalents A$5.5m Undiluted Enterprise Value A$16.9m Major Shareholders Name Shares (m)
Slide 6: What is SOP? Sulphate of Potash
WHAT IS SOP? SULPHATE OF POTASH The Premium source of potassium fertiliser K2SO4 (44.8% K, 55.2% SO4) ►A low-chloride source of potassium and sulphur ►Potassium is an essential plant macronutrient ►Sulphur is also an important nutrient ►Applied to speciality and/or chloride sensitive crops ►SOP supp
Slide 7: What is Driving SOP Growth?
WHAT IS DRIVING SOP GROWTH? SOP Demand drivers SOP Growth forecast: ~4% pa ► Increasing population, decreasing arable land Global SOP Demand (Mtpa) 8.0 ► Changing demographics – improved diet ► Increasing soil salinity 7.0 ► Need for improved water efficiency 6.0 ► China prompted major growth 5.0 20
Slide 8: LD SOP Project – Introduction
LD SOP PROJECT – INTRODUCTION An inter-generational project in the making….. ► Largest SOP deposit in Australia ► One of the highest average grades ► Highest evaporation in Australia ► Detailed PFS, attractive economics ► Years of extensive testwork and trials ► Permitting well-advanced ► ILUA execu
Slide 9: Highest Evaporation Rate
HIGHEST EVAPORATION RATE No better location for a brine evaporation operation in Australia LD Project 9
Slide 10: LD – Superior Grade and Evaporation
LD – SUPERIOR GRADE AND EVAPORATION Grade and evaporation have a direct impact on production 40 Typical Potassium Target Concentration LD Grade & Evaporation Potassium Concentration – g/l 30 13.4 g/l SOP = 8 g/l K 20 Goldfields Evaporation & Lower Grade* ~8 g/l SOP = ~3.6 g/l K 10 100 200 300 400 50
Slide 11: Operational/Cost Implications
OPERATIONAL/COST IMPLICATIONS To match output, lower grade operations need to: Abstract/Pump More Brine Build Bigger Ponds National Geographic Bigger ponds, more seepage, with lower evaporation making it worse: Suffer More Seepage Capex & Opex Costs Decreasing grade/Lower Evaporation 11
Slide 12: LD SOP Project Operations Overview
LD SOP PROJECT OPERATIONS OVERVIEW A$91/t A$102/t Other Opex Costs Closure – A$2/t Martu Royalty – A$7/t Road Maint - A$15/t FOB Cash Cost: Site Services - A$22/t A$344/t (US$258/t) EBITDA Margin: A$105/t ~44.6% @ US$500/t Ex-Works Cost: A$239/t (US$180/t) Source: See References in Compliance Sectio
Slide 13: LD SOP Project Metrics
LD SOP PROJECT METRICS • At least 400,000 tpa Production • ~9 Mt SOP produced over ~25 years • Less than 10% of the resource • A$345 M, includes indirects and owners costs (+/-20%) Capital cost • A$451 M, includes contingency & pre-production costs •Cash cost – A$335/tonne (FOB Port Hedland) Operati
Slide 14: LD SOP Project Metrics - Economics
LD SOP PROJECT METRICS - ECONOMICS • Price: US$500/tonne, FX: AUD/USD: 0.75 Assumptions • Discount Rate: 8% Real • Royalty: State: 3.75%, Martu: 1.25% • Average EBITDA – 45% (~$118 M/year) Margins • Average Cash – 48% (~$122 M/year) • Pre-tax: NPV8% – $518 M, IRR – 19% Returns • Post-tax: NPV8% – $2
Slide 15: Conservative PFS
CONSERVATIVE PFS SOP Grade Flow Rates ► PFS Assumption: 10 g/litre ► 15 trenches excavated (20 m – ► Pumping trials: ~13 g/litre 1 km long) and pumped ► Approximately 200 million litres ► Flow rates 6 to >100 l/sec/km pumped to date ► 15 l/sec/km used in PFS 15 Source: See References in Compliance S
Slide 16: Realistic and Deliverable Logistics
REALISTIC AND DELIVERABLE LOGISTICS 866 km from site to Port Hedland A world class port exporting millions of tonnes per year 511 km sealed road to Port Hedland 355 km of existing, frequently used track First 250 km designed in detail from terrain models at +/-100mm accuracy 16 Source: See Reference
Slide 17: Current Activities
CURRENT ACTIVITIES* ► Environmental Permitting: ► “ERD” (EIA) Submitted ► Public Consultation ► Resource Conversion: ► Infill drilling program ► Reserve Definition ► Flowsheet Improvements: ► Ongoing R&D ► Pond Trials: ► Evaporation ► Crystallisation ► Seepage 17 * Some actions listed may be subject
Slide 18: Conclusions
CONCLUSIONS Reward’s LD Brine SOP Project: Is technically robust ► Conservative PFS conducted to exacting standards (+/-20%) ► Flowsheet independently reviewed (ERCOSPLAN) … and economically attractive, with ► Scope to improve economics on multiple fronts … and at 407,500 tonnes SOP/annum ► One of t
Slide 19: Appendices
\ -/ APPENDICES
Slide 20: PFS Results – Capital Costs
PFS RESULTS – CAPITAL COSTS Initial and Sustaining Capital Costs (LOM Real) AUD M Production - Trenches and Ponds 57.6 Process Plant 73.2 Infrastructure 108.8 Site Support Temporary Services 2.9 Construction Costs 59.2 Subtotal 301.7 Indirect Costs (EPC, Consultants, Commissioning) 20.0 Owners Costs
Slide 21: LD – Indicative Schedule
LD – INDICATIVE SCHEDULE 2018 2019 2020 2021 2022 2023 ACTIVITY Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Project Quarter Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8 Q9 Q10 Q11 Q12 Q13 Q14 Q15 Q16 Q17 Q18 Project Assessment and Approval EPA Assessment and Approval Feasibility Study Feasibility S
Slide 22: Experienced Board & Management
EXPERIENCED BOARD & MANAGEMENT Colin McCavana – Non-Executive Director, Chairman Daniel Tenardi – Projects Director - 30+ years experience in mining and earthmoving industries - 25+ years mining experience with various organisations including the management, acquisition and development of including
Slide 23: Compliance Statements
COMPLIANCE STATEMENTS Competent person statements: This information in this report that relates to Resource Estimation and hydrogeology is based on information compiled by Mr Robert Kinnell, a hydrogeologist and Competent Person who is a Member of The Australian Institute of Mining and Metallurgy an
Slide 24: Reward Minerals Ltd contact details
Reward Minerals Ltd 159 Stirling Highway Nedlands, WA, 6009 (T): +61 8 9386-4699 (W): www.rewardminerals.com
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