Arafura Rare Earths Limited · ASX:ARU
Arafura Rare Earths — Arafura Resources — Investor Presentation (March 2018)
23 slides from Arafura Rare Earths's investor presentation, Mar 12, 2018
Slide 1: Arafura Resources Limited – March 2018 Australasian Investor Update
For personal use only Arafura Resources Limited Up and coming supplier of NdPr to permanent magnets used in the growing clean energy industry March 2018 Australasian Investor Update
Slide 2: Disclaimer
Disclaimer 2 For personal use only Important Notice This presentation has been prepared by Arafura Resources Limited (Arafura Resources). It is of a summary form only and therefore contains general background information which may not be complete. It should be read in conjunction with and full revie
Slide 3: Investment Highlights & Capital Structure
Investment Highlights & Capital Structure 3 For personal use only • Nolans Project in the Northern Territory, low geopolitical risk, 30+ year mining and chemical processing operation ASX Code ARU • One of the largest and richest deposits of Neodymium-Praseodymium Share Price (31-Dec-17) A$0.099 (NdP
Slide 4: NdPr Market Update
For personal use only 4 NdPr Market Update Arafura Resources Limited (ASX:ARU) March 2018
Slide 5: Overview: Secure Supplier of NdPr to Permanent Magnets Used in Clean Energy
Overview 5 For personal use only Secure Supplier of NdPr to Permanent Magnets Used in Clean Energy • NdPr is a key component in the manufacture of high-strength NdFeB permanent magnets used in electric vehicles (EVs), wind turbines, portable electronic devices, and many industrial applications • EVs
Slide 6: NdPr Price – Supply & Environmental Reform
NdPr Price – Supply & Environmental Reform 6 For personal use only NdPr Oxide Pricing 2015-2018 • Removal of RE export tariffs $85.0 and quotas Communist Party $80.0 5 yr Convention • Enforced closure of illegal and unsustainable mines and $75.0 China smelting impacted NdPr $70.0 structural reform p
Slide 7: NdPr Magnet vital to EV Market
NdPr Magnet vital to EV Market 7 For personal use only Permanent magnet synchronous motors (PMSM): Dominant drive train technology for EVs. Recent announcements include: • Most car manufacturers have EV targets of 10-60% by 2025 • Tesla moving to PMSM for mass produced Model 3 • Toyota to sell more
Slide 8: Established Markets & Growing Applications
Established Markets & Growing Applications 8 For personal use only Source: Adamas Intelligence, Arnold Magnetic Technologies, Japanese industry participants, Roskill Arafura Resources Limited (ASX:ARU) March 2018
Slide 9: Emerging Demand Dynamic – China 2025 Strategy
Emerging Demand Dynamic – China 2025 Strategy 9 For personal use only • Steady increases in global magnet production 2014 to 2016, NdPr price movement indicates continued growth for 2017 • China’s domestic consumption will increase as it pursues clean energy objectives and global leadership in EV ma
Slide 10: Non-China Supply Peer Comparison
Non-China Supply Peer Comparison 10 For personal use only • Non-China NdPr supply will be constrained by the sector’s historical inability to attract capital • Nolans is one of the world’s largest and more advanced undeveloped NdPr projects which provides investors with a compelling investment oppor
Slide 11: Nolans Project
For personal use only 11 Nolans Project Arafura Resources Limited (ASX:ARU) March 2018
Slide 12: Project Configuration
Project Configuration 12 For personal use only Arafura Resources Limited (ASX:ARU) March 2018
Slide 13: Close To Key Infrastructure
Close To Key Infrastructure 13 For personal use only • Stuart Hwy – 10 km east • Alice Springs railyard, airport and other services – 135 km south • Amadeus gas pipeline – adjacent to processing site • Water supply – 30 km south • Tailings and process wastes remain at site Arafura Resources Limited
Slide 14: Environmental Assessment Nearing Completion
Environmental Assessment Nearing Completion 14 For personal use only Notice of Intent Environmental Impact Statement (EIS) Terms of Reference Environmental Studies and Stakeholder Consultation Draft EIS Report Public Review Supplementary EIS Report Northern Territory EPA Assessment and NT Environmen
Slide 15: Project Flowsheet
Project Flowsheet 15 For personal use only Arafura Resources Limited (ASX:ARU) March 2018
Slide 16: Pilot Scale Work Completed
Pilot Scale Work Completed 16 For personal use only Beneficiation Pilot Plant Phosphoric Acid Regeneration Circuit Bulk Pre-Leach Pilot Plant High-Phosphate Concentrate Rare Earth & Phosphoric Acid Products NdPr-Rich Pre-Leach Residue >82% NdPr & >90% P2O5 Recovery 3% TREO Loss to Waste Gypsum Arafu
Slide 17: Remaining Piloting Activities 2018
Remaining Piloting Activities 2018 17 For personal use only Acid Bake Phase 4 Commenced PLR and Acid Mixing Baked Mixture Feeding Acid Bake Cooled Sulfated Product Water Leach Liquor Customer qualified product suite produced from previous work Arafura Resources Limited (ASX:ARU) March 2018
Slide 18: Project Metrics
Project Metrics 18 For personal use only • Ultra competitive operating costs US$6.23/kg TREO or US$24.38/kg NdPr oxide – lowest amongst peers • Phosphoric acid recovered to reduce commodity risk • High rare earths recovery • NdPr price as at 7/03/18 US$54.75 Refer Arafura ASX release 7 June 2017 for
Slide 19: Project Funding Strategy
Project Funding Strategy 19 For personal use only • Advancement of environmental approval critical enabler for engagement with offtakers, financiers & Export Credit Agencies (ECA) • ECAs are key to providing government-backed funding and guarantees, leveraged against the strategic link to NdFeB magn
Slide 20: Piloting & Final Feasibility
Piloting & Final Feasibility 20 For personal use only 2018 Targets include: • Securing environmental approvals • Advancing NdPr offtake arrangements • Completing the DFS and definition stage engineering • Engaging with strategic partners for capital equipment procurement and project funding Arafura
Slide 21: Summary
Summary 21 For personal use only Attribute Arafura High-growth and high-value NdFeB permanent magnet focus ✓ NdPr production planned to coincide with projected supply gap ✓ ✓ Lowest production cost to remain competitive in a cyclical downturn Located in a jurisdiction with low geopolitical risk and
Slide 22: Appendix A: Mineral Resources
Appendix A: Mineral Resources 22 For personal use only RESOURCES TONNES M RARE EARTHS TREO % PHOSPHATE P2O5 % NdPr ENRICHMENT % Measured 4.9 3.2 13 26.1 Indicated 30 2.7 12 26.4 Inferred 21 2.3 10 26.5 TOTAL 56 2.6 11 26.4 1% TREO cut-off grade. Numbers may not compute exactly due to rounding. “NdPr
Slide 23: Appendix B: Peer Comparison
Appendix B: Peer Comparison 23 For personal use only Notes and assumptions used in the preparation of the Peer ASX-Listed Peer Group Companies Comparison Project Code Company Name Project Location Interest • Exchange rate of AUD1 = USD 0.795. ARU Arafura Resources Ltd Nolans NT 100% LYC Lynas Corpor
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