Lotus Resources Limited · ASX:LOT
Lotus Resources — Investor Presentation (November 2020)
19 slides from Lotus Resources's investor presentation, Nov 18, 2020
Slide 1: Kayelekera Proven Uranium Producer
For personal use only Kayelekera Proven Uranium Producer INVESTOR PRESENTATION – NOVEMBER 2020
Slide 2: Important Notice
Important Notice For personal use only FORWARD LOOKING STATEMENT Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from those expressed or implied by such forward-looking information, including
Slide 3: Lotus Resources – Why invest? Capital Structure
Lotus Resources – Why invest? CAPITAL STRUCTURE For personal use only 740.6m $67m • Lotus Resources is a low capital cost and proven option in the uranium sector SHARES ON ISSUE MARKET CAP through its ownership of the Kayelekera Project in Malawi At $0.09 / share • US$200m spent on infrastructure at
Slide 4: Kayelekera is a Proven Uranium Producer
Kayelekera is a Proven Uranium Producer For personal use only 1.4Mtpa processing Proven production Significant Resource Permitted for Low C&M costs facility 11Mlbs of 37.5Mlb Resource 1 production US$1.2M pa 2 US$200m spent on production over 5 ~83% M&I with strong guidance to minimise infrastructur
Slide 5: Established and Proven Producers First to Respond
Established and Proven Producers First to Respond For personal use only Top 10 brownfield C&M assets that achieved commercial production 25.0 100.0 11.0 11.0 404 102 90.0 9.0 80.0 72 70.0 Installed Plant Capacity 7.0 60.0 Resource 5.9 50.0 5.0 40.0 38 33 2.4 3.0 30 3.0 30.0 2.0 2.0 20.0 1.5 1.5 16 1
Slide 6: Scoping Study Confirms Low Initial Capital & Rapid Start Up Potential
Scoping Study Confirms Low Initial For personal use only Capital & Rapid Start Up Potential1 • Scoping Study confirms Kayelekera can be among the first uranium projects to recommence production • Low total initial capital cost of US$50M, due to existing infrastructure • 1.4Mtpa processing facility,
Slide 7: Attractive Upside Valuation Compared to Peers
Attractive Upside Valuation Compared to Peers For personal use only Peer group comprises brownfield assets that achieved commercial production EV / Att. Resource1 EV / Att. Forecasted Production1 $4.00 $120 $3.50 $100 Average – US$87 / lb $3.00 $80 $2.50 Average – US$2.28 / lb US$ / lb US$ / lb $2.0
Slide 8: Uranium Positioned for Significant Re-rating
Uranium Positioned for Significant Re-rating For personal use only 400 Mlbs 400 Mlbs • A decade of low uranium prices has resulted in no new developments, discoveries and minimal exploration 350 Mlbs 350 Mlbs • Supply and Demand fundamentals have significantly tightened UPPER CASE DEMAND with an est
Slide 9: Long-Term Contracting Cycle is Imminent
Source: WNA, The Nuclear Fuel Report, Long-Term Contracting Cycle is Imminent September 2019 For personal use only • Nuclear utilities cover their fueling needs through long-term UTILITIES FACING RAPID PURCHASING contracts, which generally range between three to ten years. 120% • Typically no more t
Slide 10: Significant Price Increase Required to Meet Growing Demand
Significant Price Increase Required to Meet Growing Demand For personal use only 2024 2028 ST Demand Mine Supply LT Demand Mine Supply 190Mlb 160Mlb 210Mlb 150Mlb Annual Deficit Annual Deficit 30 M lbs U3O8 60 M lbs U3O8 Source: WNA, The Nuclear Fuel Report, September 2019; Note: Values based on the
Slide 11: Favorable Long-Term Pricing During the Last Deficit Market
Favorable Long-Term Pricing During the Last Deficit Market For personal use only UTILITY LONG TERM CONTRACTING VOLUME AND PRICING (2006 – 2010) >$90 205 754M lb U308 sold at prices Utility LT Contract Price Category (US$/lbs U3O8 ) $81-90 59 greater than US$60 / lb U308 $71-80 324 $61-70 166 $51-60
Slide 12: Peak Cycle Valuation Outweighed Commodity Prices
Peak Cycle Valuation Outweighed Commodity Prices For personal use only 4.6x MARKET CAP. ($M) / GROWTH TO PEAK (X) 10x 10x $138 20x $5,300 $380 $2,200 $37 $220 $273 Peak Cycle1 Today3 Peak Cycle1 Today3 Peak Cycle1 Today3 Paladin Energy Bannerman Resources Denison Mines 9.5x 4.6x 3.3x $30 $550 $19,60
Slide 13: Lotus Well Positioned for the Next Uranium Cycle
Lotus Well Positioned for the Next Uranium Cycle For personal use only Significant existing Proven production Board & Valuation Upside infrastructure 11M lb of historical Management team Significant valuation Low capex to supply with sales to Extensive African and discount compared recommence major
Slide 14: Contact
For personal use only CONTACT Eduard Smirnov Managing Director 1202 Hay St West Perth WA 6005 For further information visit: www.lotusresources.com.au
Slide 15: Appendix – Experienced Board and Management Team
Appendix 1 – Experienced Board and Management Team For personal use only Production, offtake, redevelopment and financing experience in uranium industry Eduard Smirnov John Sibley Grant Davey Stuart McKenzie Keith Bowes Managing Director Non-Executive Chairman Non-Executive Director Non-Executive Di
Slide 16: Appendix – Brownfield Uranium Assets
Appendix 2 – Brownfield Uranium Assets For personal use only Top 10 brownfield C&M assets that achieved commercial production Project Name Kayelekera Langer Heinrich Alta Mesa Project Azelik Project Nicholas Ranch Project Rabbit Lake McArthur River Smith Ranch Highland Crown Butte Willow Creek Count
Slide 17: Appendix – Valuation Peer Comparison
Appendix 3 – Valuation Peer Comparison For personal use only Peer group comprises brownfield assets that achieved commercial production Company Lotus Resources Paladin Energy UR Energy Energy Fuels Uranium Energy Corp Ticker LOT PDN URE EFR UEC Exchange ASX ASX TSX TSX NYSE EV (US$ m) $46 $308 $71 $
Slide 18: Appendix – Kayelekera Ownership Structure
Appendix 4 – Kayelekera Ownership Structure For personal use only Kayelekera Resources Pty Ltd Lotus Resources Limited (23.5%) (76.5%) Lily Resources Pty Ltd (85%) Government of Malawi Paladin (Africa) Limited (15%) Kayelekera Uranium Mine Note: Kayelekera Resources Pty Ltd is a third-party financia
Slide 19: Appendix – Kayelekera Project Development Milestones
Appendix 5 – Kayelekera Project Development Milestones For personal use only 1982 The Central Electricity Generating Board of Great Britain discovered the Kayelekera sandstone uranium deposit 1992 The project was abandoned due largely to the poor uranium outlook, as well as privatization of CEGB and
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