Slide 1: August 2017
ASX code: ARL August 2017 www.ardearesources.com.au
Slide 2: Important Notice and CP statement
Important Notice and CP statement Important notice the Company is under no obligation to revise any forward looking statement to This presentation contains general information only and is, or is based upon, reflect events or circumstances after the date of this presentation or to reflect information
Slide 3: Ardea Resources is a diversified Australian developer and explorer
Ardea Resources is a diversified Australian developer and explorer Kalgoorlie Nickel Project (KNP) Cobalt Zone, WA Lewis Ponds zinc-gold-silver project, NSW Exploration in WA and NSW 3
Slide 4: Ardea Resources Limited
Ardea Resources Limited ASX listingM Listing date 9 February 2017 Share price at listing $0.20 Capital structure, 4 August 2017 Share price $0.81 Shares on issue 67,000,747 Market capitalisation $54.3 million Cash at bank $2.5 million Enterprise value $51.8 million Options - $0.25 (IPO) 12.31 millio
Slide 5: Ardea's Cobalt Focus
ARDEA’S COBALT FOCUS Tight supply Booming demand 100% ownership of one of the world’s largest cobalt deposits 5
Slide 6: Cobalt market
Cobalt market Cobalt price 1 Aug 2016 – 4 Aug 2017 Cobalt price 1 Jul 2005 – 4 Aug 2017 Cobalt price (USD/t) ~100,000 tpa global production Demand is outstripping supply Presently US$58,500/t, some way to go to repeat 2008 levels 6 6
Slide 7: The Automotive Electrification Revolution is underway
The Automotive Electrification Revolution is underway Mercedes Benz 10 electric vehicles by 2022, investing €10 billion Volkswagen Group 30 electrified vehicles by 2025 Every manufacturer is planning an electrified range All electrified vehicles will use Li-ion batteries with cobalt cathodes 7
Slide 8: Norway – electrified vehicle market penetration
Norway – electrified vehicle market penetration A sign of things to come? 2013 Tax reductions 2011 2013 2015 2017 2020 2025 76% of market Electrified 22% of market 50% of market 250,000 EVs All new vehicles diesel vehicle tops electrified electrified forecast to be zero emissions sales charts 8
Slide 9: The game changer?
The game changer? Toyota Solid-State Lithium Ion Battery 800-1000 km range Recharge in 5-10 minutes Lighter, less volatile Lithium cobalt pyrophosphate cathode Production commences 2022 9
Slide 10: KNP Cobalt Zone
KNP COBALT ZONE 10
Slide 11: The KNP is Australia's and the developed world's largest cobalt resource
View over Goongarrie South, looking northeast, showing the partial extent of the deposit (yellow), the extensive historic drill grid, and proximity to infrastructure The KNP is Australia’s and the developed world’s* largest cobalt resource 773 Mt at 0.05 % Co and 0.7 % Ni** 405,000 t contained Co me
Slide 12: KNP Cobalt Zone
KNP Cobalt Zone KNP Yerilla KNP Standing on the shoulders of giants: West Over $50 million spent historically Cobalt and nickel mining development project within 150km of Kalgoorlie Scandium, PGE, high-purity alumina, chromium by-product potential KNP East On active, granted mining leases 100% owner
Slide 13: Lateritic cobalt-nickel deposit
Lateritic cobalt-nickel deposit Soft, iron-rich clay is host to mineralisation • Cobalt to nickel ratio in most similar deposits is 1:12 to 1:20 • KNP Cobalt Zone cobalt to nickel ratio is less than 1:6 13
Slide 14: KNP Cobalt Zone
KNP Cobalt Zone Sub-horizontal bodies of cobalt mineralisation at each location Near surface open-pit mining – low strip ratio – easy digging 14
Slide 15: Scandium
Scandium Discovered at Goongarrie South, Black Range, Kalpini Systematic scandium resampling of KNP Cobalt Zone commencing September Tabular, near-surface bodies grading between 45 and 500 g/t scandium Will be mined to access cobalt and nickel below Possible scandium oxide by-product? 15
Slide 16: Flow sheet development
Flow sheet development Direct supply of cobalt sulphate Co Ni Sc and nickel sulphate to cathode manufacturers Pre-feasibility study progressing. Scope includes: • Open pit, free digging • Acid digestion of cobalt-nickel ore • Processing/purification • Precipitation of cobalt and nickel sulphate from
Slide 17: Our game changer?
Our game changer? • Lab-scale atmospheric hydrochloric acid leach Cobalt Nickel Scandium Proportion of metal extracted from laterite 98.7% 98.4% 92.4% • Efficiencies exceed those for HPAL • Testing ongoing 17
Slide 18: Pre-feasibility study timeline
Pre-feasibility study timeline Optimise the Cobalt Zone before seeking a funding partner May-Sept Bench-scale metallurgical test work and process technology evaluations for the flowsheet Completion of initial leach optimisation tests 2 weeks mid-August Sample variability response tests 2 weeks late
Slide 19: Comparing peers – CleanTeQ and Ardea
Comparing peers – CleanTeQ and Ardea Same style of deposit Syerston KNP Commodities Co, Ni, Sc Co, Ni Ownership CleanTeQ 100% Ardea 100 % Location NSW WA Drilling >1300 holes > 9000 holes Deposit style Laterite Laterite Substrate bedrock Ultramafic rocks Ultramafic rocks Depth 5 to 40 m 0 to 120 m (
Slide 20: Comparing peers – CleanTeQ and Ardea
Comparing peers – CleanTeQ and Ardea Different valuations CleanTeQ Ardea Resources PFS (Co, Ni) Oct 2016 Q1 2018 DFS Due Q4 2017 ?2018-19 ~16 months difference Market Cap (4 Aug) $450 million $54.3 million 20
Slide 21: Lewis Ponds
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Slide 22: Lewis Ponds bulk mining model
Lewis Ponds bulk mining model Major development project with enormous potential • Historic resources: 6.62 Mt @ 2.4 % Zn, 1.4 % Pb, 0.2 % Cu, 1.5 g/t Au, and 69 g/t Ag • Bulk mining open pit exploration target: 15 – 25 Mt @ 2.2 – 3.7 % ZnEq* or 1.0 – 1.5 g/t AuEq* • Main resource on freehold land ow
Slide 23: Prefeasibility DMS test work
Prefeasibility DMS test work Initial Dense Media Separation (DMS) tests • 30% mass rejected, retaining 95% of contained metals. • Pre-concentration has the potential to enhance the project economics by increasing metal production rate without increasing overall concentrator size. • Timeline Activity
Slide 24: Exploration
EXPLORATION 24
Slide 25: Ardea's regional presence
Ardea’s regional presence Offices established in Kalgoorlie and Orange • Geologists appointed for both offices • Duties – Progression of development projects – Forwarding exploration projects 25
Slide 26: Thank you
Thank you 26 26
Slide 27: Appendix 1: Resource breakdowns
Appendix 1: Resource breakdowns KNP nickel-cobalt mineral resource (JORC 2012) Quantity Cobalt Nickel Contained Contained Resource Category (Mt) (%) (%) cobalt (t) nickel (t) Measured 9.6 0.10 1.02 9,700 98,800 Indicated 232.9 0.06 0.75 141,200 1,759,700 Inferred 530.5 0.05 0.68 254,400 3,600,000 KN
Slide 28: App 1: Resource breakdowns (continued)
App 1: Resource breakdowns (continued) KNP Cobalt Zone nickel-cobalt mineral resource (JORC 2012) Resource Cutoff Size Co Ni Cobalt remodel Area Prospect category (% Co) (Mt) (%) (%) status Goongarrie Goongarrie South Total 0.08 25.29 0.139 0.826 Upgraded Big Four Total 0.08 11.38 0.131 0.712 Upgrad
Slide 29: KNP Cobalt Zone mineral resource – Compliance Statement
App 1: Resource breakdowns (continued) KNP Cobalt Zone nickel-cobalt mineral resource (JORC 2012) – Compliance Statement COMPLIANCE STATEMENT (JORC 2012 and NI43-101) A competent person’s statement for the purposes of Listing Rule 5.22 has previously been announced by the Company for: 1. Kalgoorlie
Slide 30: App 1: Resource breakdowns (continued)
App 1: Resource breakdowns (continued) Lewis Ponds mineral resource (JORC 2012) Quantity Zn Cu Pb Au Ag Resource Category (Mt) (%) (%) (%) (g/t) (g/t) Indicated Main Zone 5.82 2.1 0.1 1.1 1.5 59 Tom’s Zone 0.54 5.5 0.3 3.8 1.7 172 Total Indicated 6.35 2.4 0.2 1.4 1.5 68 Inferred Main Zone 0.17 1.7 0
Slide 31: Appendix 2: Key Risks
Appendix 2: Key Risks An investment in the Company is not risk free. Before deciding to trade in the Shares, Shareholders and interested investors should read the entire Prospectus, consider at least the following risk factors in light of their personal circumstances and investment objectives (inclu
Slide 32: App 2: Key Risks (continued)
App 2: Key Risks (continued) Limited exploration • Aside from Lewis Ponds and the KNP, Ardea’s projects have been subjected to only limited drill testing. Whilst gold and/or nickel mineralisation as the case may be has been located in multiple previous drill intersections, there is a risk that the m
Slide 33: App 2: Key Risks (continued)
App 2: Key Risks (continued) Exploration and Operating Risks (cont.) • (vii) unavailability of transport or drilling equipment to allow access and geological and geophysical investigations; (viii) unavailability of suitable laboratory facilities to complete metallurgical testwork investigations; (ix
Slide 34: App 2: Key Risks (continued)
App 2: Key Risks (continued) Environment • The projects are subject to Western Australian, New South Wales and Federal laws and regulations regarding environmental matters and the discharge of hazardous wastes and materials. As with all mining projects, the projects would be expected to have a varie
Slide 35: App 2: Key Risks (continued)
App 2: Key Risks (continued) Other Risks General Economic Risks and • Share market conditions may affect the listed securities regardless of operating performance. Share market conditions are affected by many Business Climate Risks factors such as: (a) general economic outlook; (b) movements in or o
Slide 36: App 2: Key Risks (continued)
App 2: Key Risks (continued) Exploration, Development, • The business of mineral exploration, project development and mining by its nature contains elements of significant risk. Ultimate and Mining and Processing Risks continuing success of these activities is dependent on many factors such as: (a)