Slide 1: Capital Raising and Business Update
Lynas Corporation Rare Earths – we touch them everyday For personal use only Capital Raising and Business Update September 2014 NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 2: Disclaimer
Disclaimer For personal use only This Presentation has been prepared by Lynas Corporation Limited (ABN 27 009 066 648) (Lynas or the Company) in relation to an Entitlement Issue of shares and options in Australia. The offer is made pursuant to a prospectus under Section 6D.2 of the Corporations Act
Slide 3: Lynas is an integrated source of Rare Earths from Mine to Customer
Lynas is an integrated source of Rare Earths from Mine to Customer For personal use only Rare Earths are essential inputs to high technology, high growth, future- facing industries and Lynas is uniquely placed to succeed in this market • We have invested in a portfolio of aligned assets: o Mt. Weld:
Slide 4: Lynas is now well positioned for growth
Lynas is now well positioned for growth For personal use only Three conditions support Lynas’ transition: 1. A secure, low-cost funding platform to support continued business development 2. A Full Operational Stage License (FOSL) for the LAMP delivering ongoing license to operate 3. A capable and ap
Slide 5: Performance is improving with substantial improvements in key measures
Performance is improving with substantial improvements in key measures For personal use only Four successive quarters of increases in production volume and sales revenue, and on track for a fifth successive quarter of increases • Production has continued to increase every quarter, with a compound qu
Slide 6: Lynas is now offering an equity investment opportunity
As part of the business transformation, Lynas is now offering an equity investment opportunity For personal use only • The combination of the restructured debt agreement with new equity provides a secure platform for further business development • Once this transaction has been completed Lynas expec
Slide 7: Equity Raising Summary
Equity Raising Summary For personal use only Equity raising Institutional Placement of 150 million shares @ A$0.08 per share to raise A$12.0 million (before costs). terms A 5-for-14 Renounceable Entitlement Issue of 887.1m new shares @ A$0.08 per share to raise A$71.0 million (before costs). F
Slide 8: Indicative Use of Funds and Timetable
Indicative Use of Funds and Timetable For personal use only Sources A$M Uses A$M Institutional Placement 12.0 US$10 million instalment under the Senior Facility 11.0 Restructuring costs to reset the Company‟s cost base 6.0 Removal of bottlenecks, and more efficient waste management 24.0 processes in
Slide 9: Pro Forma Balance Sheet
Pro Forma Balance Sheet For personal use only 30 June 2014 Adjustment for 30 June 2014 Placement & A#039;000 Rights Senior A#039;000 Audited Issue Facility Proforma Assets Cash and cash equivalents 38,144 77,532 115,676 Other current assets 77,902 77,902 Total current assets 116,046 77,532 193,578 Total n
Slide 10: Key Investment Highlights
Key Investment Highlights For personal use only • The Assets are in place – Mine and processing in WA is proven and operating effectively – LAMP Phase 1 is fully commissioned and Phase 2 Cracking and Leaching and Product Finishing assets are operational • The new management team is in place with a c
Slide 11: Appendix
Appendix For personal use only • The Company – Key strengths, assets and performance • The Market – Market drivers and sector analysis • The Investment – Details of the investment opportunity, risks and disclaimers 11 NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 12: Lynas is a business with strong fundamentals
Lynas is a business with strong fundamentals For personal use only Lynas operates in an attractive market • Rare Earths are an essential element in high growth, future-facing industries • The Market size is currently ~100ktpa, expected to grow to ~140ktpa by 2020. Japanese firms are key customers fo
Slide 13: Production Process Overview
Production Process Overview For personal use only 13 NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 14: Market Analysis
Market Analysis For personal use only Rare Earth Demand Drivers 2015E Expected Global Rare Earths demand by application • Market size: ~100ktpa currently – expected to Other 5% Optical Glass 3% NiMH Batteries 11% grow to ~140ktpa by the end of the decade UV Cut 2% • Lynas Rare Earth materials are a
Slide 15: Rare Earths – Critical Components in Global and Growing End Markets
Rare Earths – Critical Components in Global and Growing End Markets For personal use only NdFeB Magnets Wind Gen. Auto HEV/EV Tech. Household Industrial NiMH Batteries HEV/EV Appliances Auto- catalysts Gen. Auto Global Rare Earth Mining Fuel and Processing Cracking (~100ktpa REO) Catalysts Oil Refin
Slide 16: Rare Earths are technology enablers in Hybrid Cars
Rare Earths are technology enablers in Hybrid Cars For personal use only 16 NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 17: … but conventional cars also contain Rare Earths
… but conventional cars also contain Rare Earths For personal use only 17 NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 18: Outlook: Key Demand Trends
Outlook: Key Demand Trends For personal use only Key macro consumption trends are expected to drive future growth of the global RE market 1 Energy efficient and green applications continue to accelerate strong NdPr demand Estimated REO demand in magnet industry growth 50 Wind energy, HEV/EVs, gene
Slide 19: China has dominated the RE market and is now moving towards a more orderly market approach
China has dominated the RE market and is now moving towards a more orderly market approach For personal use only China consumes 50-60% of global RE Moving towards supply discipline inside China – production already and this will aiming at sustainable production continue to grow, due to fast growing
Slide 20: Competent Person's Statement
Competent Person‟s Statement For personal use only • The Mineral Resources and Ore Reserves Statement in this presentation is based on, and fairly represents, information and supporting documentation prepared by Brendan Shand, who is a member of The Australasian Institute of Mining and Metallurgy. B
Slide 21: Rare Earths Market Data: Disclaimer
Rare Earths Market Data: Disclaimer For personal use only The slides in this presentation containing Rare Earths market data have been sourced from independent analysis of end application demand, along with Lynas estimates of quantities of Rare Earths end use in various key applications. Althoug
Slide 22: Key Risk Factors
Key Risk Factors For personal use only 1) Introduction Investing in New Shares involves a degree of risk. Before applying for New Shares and Options, you should consider whether they are a suitable investment for you. You should be aware that there are risks involved with participating in the Entitl
Slide 23: Key Risk Factors (cont'd)
Key Risk Factors (cont‟d) For personal use only 3) Operational Risks Lynas is exposed to various operational risks including unanticipated financial, operational or political events, cost overruns, decline in Rare Earths commodity prices and demand, equipment and labour shortages, equipment failure,
Slide 24: Key Risk Factors (cont'd)
Key Risk Factors (cont‟d) For personal use only While the LAMP will continue to ramp up there are no guarantees that the targeted production run-rates will be consistently achieved. There are inherent risks in the full start up of Phase 2 capacity which may limit the ability of Lynas to operate the
Slide 25: Key Risk Factors (cont'd)
Key Risk Factors (cont‟d) For personal use only It is impossible to predict future Rare Earths price movements with certainty. Any sustained low Rare Earths prices or further declines in the price of Rare Earths will adversely affect Lynas' business, results of operations and its ability to finance
Slide 26: Key Risk Factors (cont'd)
Key Risk Factors (cont‟d) For personal use only c) Disposal of Residues At both Mt. Weld and the LAMP, Lynas operations generate residue materials in the form of solids, liquids and gases. Lynas believes it has appropriate plans in place for the treatment, sale or disposal each of those residues. Fa
Slide 27: Key Risk Factors (cont'd)
Key Risk Factors (cont‟d) For personal use only - economic conditions in Australia and overseas; - investor sentiment in the local and international stock markets; - changes in fiscal, monetary, regulatory and other government policies; and - geo-political conditions such as acts or threats of terro
Slide 28: Key Risk Factors (cont'd)
Key Risk Factors (cont‟d) For personal use only 10) General risks a) General economic conditions Lynas' operating performance and financial performance is influenced by a variety of general economic and business conditions including the level of inflation, interest rates, exchange rates and governme
Slide 29: Foreign Selling Restrictions
Foreign Selling Restrictions For personal use only International Offer Restrictions This document does not constitute an offer of securities in any jurisdiction in which it would be unlawful. New Shares may not be offered or sold in any country outside Australia except to the extent permitted below.
Slide 30: Foreign Selling Restrictions
Foreign Selling Restrictions For personal use only New Zealand This document has not been registered, filed with or approved by any New Zealand regulatory authority under or in accordance with the Securities Act 1978 (New Zealand). The New Shares are not being offered or sold in New Zealand, or allo
Slide 31: Foreign Selling Restrictions
Foreign Selling Restrictions For personal use only Switzerland The New Shares may not be publicly offered in Switzerland and will not be listed on the SIX Swiss Exchange ("SIX") or on any other stock exchange or regulated trading facility in Switzerland. This document has been prepared without regar