Energy Resources Of Australia Ltd. Class A · ASX:ERA
Energy Resources Of Australia Ltd. Class A — Investor Presentation (April 2023)
49 slides from Energy Resources Of Australia Ltd. Class A's investor presentation, Apr 4, 2023
Slide 1: Capital Raising Presentation (for Interim Entitlement Offer)
For personal use only Capital Raising Presentation (for Interim Entitlement Offer) 4 April 2023 Not for release or distribution in the United States 1
Slide 2: Important notices
Important notices This presentation has been prepared by Energy Resources of Australia Ltd ABN 71 008 550 865 (ERA) in shares the subject of the Interim Entitlement Offer referred to herein and obtain any professional advice you require connection with its non-underwritten pro rata renounceable enti
Slide 3: Important notices – Forward-looking statements
Important notices Forward-looking statements This presentation contains certain forward-looking statements including statements of current intention, statements To the maximum extent permitted by law, ERA and its directors, officers, employees, agents, associates and For personal use only of opinion
Slide 4: Acknowledgement of Traditional Owners
Acknowledgement of Traditional Owners For personal use only The operations of Energy Resources of Australia Ltd (ERA) are located on Aboriginal land and are surrounded by, but separate from, Kakadu National Park. ERA respectfully acknowledges the Mirarr people who are the Traditional Owners of the l
Slide 5: Executive summary
For personal use only summary Executive 5
Slide 6: Executive summary
Executive summary For personal use only • ERA is undertaking a 5 for 1 non-underwritten pro rata renounceable entitlement offer to raise up to $369m, at an offer price of $0.02 per share (Interim Entitlement Offer) • The Interim Entitlement Offer is an interim funding solution for the Company, with
Slide 7: Executive summary
Executive summary • ERA remains committed to the comprehensive rehabilitation of the Ranger Project Area for people and country, including meeting all its For personal use only statutory and contractual obligations • Progressive rehabilitation of the Ranger Project Area continued during 2022 with se
Slide 8: Executive summary
Executive summary For personal use only • Expenditure on Ranger Project Area rehabilitation is not expected to generate any financial return for ERA. ERA’s strategic priority continues to be the comprehensive rehabilitation of the Ranger Project Area in accordance with ERA’s obligations such that it
Slide 9: Rehabilitation background and status update
Rehabilitation For personal use only background and status update 9
Slide 10: ERA is committed to the Ranger Project Area rehabilitation program
ERA is committed to the Ranger Project Area rehabilitation program and is continuing to progress rehabilitation For personal use only • Ranger commenced production in 1981 and was one of the longest continually operating uranium mines in the world, with production ceasing in January 2021 • The Range
Slide 11: Key recent events at Ranger
Key recent events at Ranger Dec-22 Apr-22 Transitioned to a ‘project Sep and Oct-21 Pit 3 capping application focused’ model by For personal use only Reforecast based on sub-aerial implementing an progress methodology submitted Integrated Project Jan-19 to stakeholders for Management Team 2019 Feasi
Slide 12: Summary of cost differences between 2019 Feasibility Study and Reforecast
Summary of cost differences between the 2019 Feasibility Study and the preliminary findings of the Reforecast(1) • In July 2021, ERA commenced a major reforecast of cost and schedule (Reforecast). This followed on from the 2019 Feasibility Study which estimated rehabilitation costs of For personal u
Slide 13: Near term rehabilitation activities and studies to lower execution risk
ERA has reviewed its near term rehabilitation activities and is concurrently undertaking studies to lower execution risk For personal use only • ERA is undertaking studies on rehabilitation options with lower technical risk, which will ultimately lead to a revised Mine Closure Plan. Consequently, th
Slide 14: Overview of Ranger rehabilitation activities planned to end of Q2 2024
Overview of Ranger rehabilitation activities planned to be undertaken to the end of Q2 2024 For personal use only Rehabilitation activities planned between 1 January 2023 and 30 June 2024 Indicative cost 1 Pit 3 initial • Mainly wicking, dewatering, geotextile and initial preparation for $53m cappin
Slide 15: Organisational change
Organisational change For personal use only • In January 2022, Bechtel was engaged to review ERA’s in-house project execution capability to manage and complete the rehabilitation • Bechtel identified a number of improvement opportunities for ERA’s consideration. In response to these findings, ERA im
Slide 16: Regulatory matters
Regulatory matters − ERA is not expected to be able to meet its rehabilitation deadline of January 2026 and has conveyed that For personal use only expectation to all stakeholders − To provide access to the site beyond January 2026 to complete rehabilitation of the Ranger Project Area, a new section
Slide 17: Regulatory matters
Regulatory matters − For personal use only As at 31 December 2022, $486m was held in the Trust Fund as security. In addition, bank guarantees procured by ERA totalling $125m are held by the Commonwealth as additional security for ERA's Ranger rehabilitation obligations (a further $1m is separately h
Slide 18: Outlook and priorities
Outlook and priorities • ERA's purpose is to create a positive legacy and achieve world-class, sustainable rehabilitation of former mine assets For personal use only at Ranger • The Ranger Rehabilitation Project is unique in that it is rehabilitating land in one of the world’s most culturally and en
Slide 19: Outlook and priorities cont'd
Outlook and priorities cont'd • Ranger 3 Deeps For personal use only − The amendment to the Atomic Energy Act by the Federal Parliament at the end of 2022 does not allow any further mining in the Ranger Project Area and, as such, development of Ranger 3 Deeps is not an authorised activity under the
Slide 20: Jabiluka Mineral Lease
Jabiluka Mineral Lease • Jabiluka Mineral Lease For personal use only − The Jabiluka Mineral Lease area known as Jabiluka was granted on 12 August 1982 as Mineral Lease N1 (MLN1) − The original term was granted for 42 years, meaning it runs until 11 August 2024 − ERA intends to apply for its renewal
Slide 21: Jabiluka Mineral Lease cont'd
Jabiluka Mineral Lease cont’d • For personal use only ERA holds the Jabiluka Mineral Lease − Jabiluka Mineral Lease contains two ore bodies being Jabiluka 1 and the significantly larger Jabiluka 2 that contains approximately 137,100 tonnes of uranium ore equivalent to c. 302 million pounds (“Mlb”) o
Slide 22: Details of the Interim Entitlement Offer
Details of the For personal use only Interim Entitlement Offer 22
Slide 23: Overview of the Interim Entitlement Offer
Overview of the Interim Entitlement Offer • 5 for 1 non-underwritten pro rata renounceable entitlement offer to raise up to approximately $369m For personal use only − Up to approximately 18,457m new fully paid ordinary shares to be offered (New Shares) to Eligible Shareholders at 7:00pm Sydney time
Slide 24: Overview of the Interim Entitlement Offer cont'd
Overview of the Interim Entitlement Offer cont'd For personal use only • Eligible Shareholders (as described in Slide 2), other than Rio Tinto, who take up their entitlement in full may also apply for additional New Shares (Additional New Shares) at the Offer Price in excess of their entitlement und
Slide 25: Overview of the Interim Entitlement Offer cont'd
Overview of the Interim Entitlement Offer cont'd For personal use only Rio Tinto will not be • Rio Tinto will not be able to apply for Additional New Shares under the Shortfall Facility or the Shortfall Bookbuild, issued New Shares because ASX Listing Rule 10.11 prevents ERA from issuing Shortfall S
Slide 26: Rio Tinto Voting Power
Rio Tinto Voting Power For personal use only • Rio Tinto’s voting power could increase to up to 89.1% in ERA following completion of the Interim Entitlement Offer taking into account the binding pre-commitments and assuming no other shareholders (other than those who have pre-committed) participate
Slide 27: Proceeds of Interim Entitlement Offer
Proceeds of Interim Entitlement Offer Sources Amount Uses Amount For personal use only Proceeds from Interim Entitlement Offer contribute towards Pre-committed proceeds of the Interim Entitlement Offer $355m rehabilitation expenditure 1/1/23 to 30/6/24 and 2022 $252m (Proceeds from the Pre-committed
Slide 28: ERA's liquidity position
ERA’s For personal use only liquidity position 28
Slide 29: ERA's liquidity position
ERA’s liquidity position For personal use only • ERA had approximately $561m of cash resources as at 31 December 2022 including $75m cash at bank (net of overdrafts), with the remaining $486m cash held by the Commonwealth Government as part of the Trust Fund. The Company has also procured $126m in b
Slide 30: Sources and uses of funds from January 2023 to end of Q2 2024
Sources and uses of funds from 1 January 2023 to the end of Q2 2024 Sources Amount Uses Amount For personal use only Committed net proceeds of the Interim Entitlement Offer Optimised rehabilitation expenditure 1/1/23 to 30/6/24 and (Includes pre-commitments from the Pre-committed Shareholders, and $
Slide 31: Interim Entitlement Offer timetable
Interim For personal use only Entitlement Offer timetable 31
Slide 32: Interim Entitlement Offer timetable
Interim Entitlement Offer timetable Event Date For personal use only Announcement of Interim Entitlement Offer (including Investor Presentation) Tuesday, 4 April 2023 ASX release of Interim Entitlement Offer Information Booklet, Cleansing Statement and Appendix 3B Tuesday, 4 April 2023 Notice sent t
Slide 33: Key risks
For personal use only Key risks 33
Slide 34: Key risks
Key risks Introduction Ultimately, the cost of rehabilitation of the Ranger Project Area is uncertain and requires matters involving estimation and judgment. As described earlier in this presentation, ERA is undertaking the For personal use only A number of risks and uncertainties, which are both sp
Slide 35: Key risks
Key risks 1.2 Water treatment and injection of waste brines will be further evaluated as part of the assessment of the alternative Pit 3 capping methodology during the 2022 Feasibility Study to be completed in September 2023. These impacts have been For personal use only Management of water on the R
Slide 36: Key risks
Key risks However, any further drawdown of funds under this framework will first require revaluation of the 1.7 Wet season and weather security following ERA's internal cost review, expected to occur after completion of the 2022 For personal use only Feasibility Study in September 2023. Given the ex
Slide 37: Key risks
Key risks 2. RISKS RELATING TO JABILUKA agreement would be required). Whether the NT Minister's discretion would be exercised in favour of any further renewals of the Jabiluka Mineral Lease is uncertain, given the positions expressed by For personal use only 2.1 Jabiluka Mineral Lease certain stakeh
Slide 38: Key risks
Key risks 3. RISKS RELATING TO THE INTERIM ENTITLEMENT OFFER AND OTHER GENERAL AND 3.2 Future access to capital SPECIFIC RISKS APPLICABLE TO ERA For personal use only The Interim Entitlement Offer is an interim funding solution for the Company. Proceeds from the 3.1 Valuation of ERA and its shares I
Slide 39: Key risks
Key risks 3.5 Rio Tinto voting power 3.8 Risk of selling or transferring Entitlements For personal use only Rio Tinto's current voting power in ERA is 86.3%. Rio Tinto’s voting power could increase to up to An Eligible Shareholder who does not wish to take up Entitlements can sell them on ASX or tra
Slide 40: Key risks
Key risks 3.10 Key persons, organisational structure and resourcing approval of, various stakeholders, including the Traditional Owners, shareholders and regulatory bodies, prior to any prospective development proceeding. For personal use only Recruiting and retaining qualified personnel is importan
Slide 41: Key risks
Key risks 3.13 Resource estimates and ore reserves • Use of JORC Code for non-reporting purposes For personal use only Resource estimates are expressions of judgment based on knowledge, experience and resource • Relationship to ASX Listing Rules and/or to other Codes modelling. As such, resource est
Slide 42: Key risks
Key risks 3.15 Regulators and stakeholders anticipates receiving approval to continue rehabilitation beyond 8 January 2026 under the amended Atomic Energy Act 1953 (Cth) (for the purpose of rehabilitation activities only) which will permit ERA For personal use only Uranium mining in the Northern Ter
Slide 43: Key risks
Key risks 3.18 Operational risks 3.21 Tax risks For personal use only ERA’s activities may be delayed or be unsuccessful for many reasons, including unanticipated ERA is subject to taxation and other imposts in Australia. Future changes in taxation laws, including financial, operational or political
Slide 44: Key risks
Key risks 3.24 Risks relating to equity investments and markets For personal use only Investors should be aware that there are risks associated with any investment in a company listed on ASX. The value of ERA shares may rise above or fall below the Offer Price, depending on the business, financial c
Slide 45: Selling restrictions / jurisdictions
Selling restrictions / jurisdictions For personal use only International Offer Restrictions This document does not constitute an offer of new ordinary shares (New Shares) of the Company in any jurisdiction in which it would be unlawful. New Shares may not be offered or sold in any country outside Au
Slide 46: Selling restrictions / jurisdictions cont'd
Selling restrictions / jurisdictions cont’d For personal use only Singapore This presentation has not been registered as a prospectus with the Monetary Authority of Singapore and the New Shares will be offered pursuant to one or more exemptions under the Securities and Futures Act 2001 of Singapore
Slide 47: Selling restrictions / jurisdictions cont'd
Selling restrictions / jurisdictions cont’d For personal use only Hong Kong WARNING: This document has not been, and will not be, registered as a prospectus under the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32) of Hong Kong, nor has it been authorised by the Securities an
Slide 48: Rio Tinto Intention Statement
Rio Tinto Intention Statement For personal use only Background Given Rio Tinto's current shareholding in ERA and the potential for its relevant interest to increase marginally from 86.3% to approximately 89.1% as a result of Rio Tinto's participation in the proposed Interim Entitlement Offer (depend
Slide 49: Rio Tinto Intention Statement cont'd
Rio Tinto Intention Statement cont’d For personal use only Employees Rio Tinto notes that ERA's ongoing employment requirements are a matter for ERA. In response to a review commissioned by ERA and conducted by Bechtel, ERA has implemented a number of initiatives to seek to strengthen its in-house p
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