Iluka Resources Limited · ASX:ILU
Iluka Resources — Investor Presentation (March 2008)
36 slides from Iluka Resources's investor presentation, Mar 12, 2008
Slide 1: Approximately $350m Accelerated Renounceable Pro-rata Entitlement Offer
For personal use only Iluka Resources Limited Approximately $350m Accelerated Renounceable pro-rata Entitlement Offer David Robb Managing Director March 2008 NOT FOR RELEASE IN THE UNITED STATES
Slide 2: Disclaimer – Forward Looking Statements
Disclaimer – Forward Looking Statements For personal use only This presentation contains forward-looking statements that are subject to risk factors associated with exploring for, developing, mining, processing and sale of minerals. Forward-looking statements include those containing such words as a
Slide 3: Table of Contents
Table of Contents For personal use only Transaction Overview 4 Company Overview 7 Purpose of the Offer – Jacinth-Ambrosia Project 11 Transaction Details 21 Appendix – Overview of Iluka’s Assets – Jacinth-Ambrosia Project Details 25 3
Slide 4: Transaction Overview
For personal use only Transaction Overview 4
Slide 5: Transaction Equity Funding
Transaction Equity Funding For personal use only Offer Price $2.55 per New Share Discount to last close (12 March) 30% Discount to TERP (12 March) 22% (Theoretical Ex-Rights Price $3.26) Discount to pre-announcement price (20 February) 42% Offer Proceeds A$353 million (A$341 million after fees and c
Slide 6: Transaction Rationale
Transaction Rationale For personal use only • Provides Iluka with the financial capacity to proceed with the development of the Jacinth-Ambrosia mineral sands project in the Eucla Basin – Represents Iluka’s entry into an undeveloped, world class zircon province – Key component of Iluka’s transition
Slide 7: Company Overview
For personal use only Company Overview 7
Slide 8: Global Leader in Mineral Sands
Global Leader in Mineral Sands For personal use only • #1 global producer of zircon • #2 global producer of titanium dioxide • Significant 2007 market share position in the high value products of rutile (35%), synthetic rutile (66%) and chloride ilmenite (42%) Major Zircon and Titanium Dioxide Feeds
Slide 9: Strong Market Share
Strong Market Share For personal use only Estimated Market Share by Sales Volume, 2007 estimate Source: Iluka 9 This map shows Iluka’s estimated market share by sales volume in each of the major geographical regions for titanium dioxide and zircon products in 2007 Note: The Asian region includes Aus
Slide 10: Strong Platform for Growth
Strong Platform for Growth For personal use only • Ore Reserves/depletion cover of 11 years • Extensive exploration tenement position of over 90,000 square kms • Ongoing commitment to exploration – strong success record • Production targets achieved in 2007 from the new Murray Basin operation • Murr
Slide 11: Purpose of the Offer – Jacinth-Ambrosia Project
For personal use only Purpose of the Offer – Jacinth-Ambrosia Project 11
Slide 12: Major New Growth Project
Major New Growth Project Jacinth-Ambrosia, Eucla Basin For personal use only • Exciting, new zircon province • Most significant new zircon discovery in recent decades • Reserve base expected to underpin production for ~10 years • Definitive feasibility study work well advanced – Project definition,
Slide 13: Extensive Deposit and Tenement Position
Extensive Deposit and Tenement Position Eucla Basin For personal use only Western Australia South Australia Jacinth-Ambrosia Typhoon Kalgoorlie Tripitaka Dromedary Gulliver’s Ceduna Esperance Heavy Mineral Deposit Adelaide Iluka & JV Tenements Granted Iluka Tenement Applications Eucla Basin 0km 500k
Slide 14: Jacinth-Ambrosia Project Key Characteristics
Jacinth-Ambrosia Project Key Characteristics For personal use only • Large – Known zircon content ~3.5 x 2007 global zircon consumption • High quality – Zircon:TiO2 production ratio which Iluka believes to be 10 x industry average • Scale – 300kt zircon production currently planned in 2011 – Commiss
Slide 15: Illustrative Schematic of Proposed Mine Plan
Jacinth-Ambrosia Project, Eucla Basin Illustrative Schematic of Proposed Mine Plan For personal use only 15 Source: Iluka Note: Diagram not to scale
Slide 16: Jacinth-Ambrosia Project Risk Mitigation
Jacinth-Ambrosia Project, Eucla Basin Risk Mitigation For personal use only • Capital efficient development • Use of upgraded or relocated facilities – Wet concentrator plant from the US – Existing Narngulu mineral separation plant (WA) • Conventional mineral sands mining and processing • Ultra sali
Slide 17: Key Approval Timetable
Jacinth-Ambrosia Project, Eucla Basin Key Approval Timetable For personal use only Target Date DFS Commenced June 2007 Place orders for certain long lead capital equipment March 2008 Execute Phase – Board approval sought May 2008 Grant Mineral Lease and Miscellaneous Purpose Licence Mid 2008 Mining
Slide 18: Favourable Growth Dynamics: Zircon Demand Characteristics
Favourable Growth Dynamics Zircon Demand Characteristics by Use and Location For personal use only • Zircon demand mainly influenced by End-use Trends for Zircon Consumption: 1990 to 2015 ceramics usage (tiles, sanitary ware etc) but with growing speciality applications • Demand is forecast to remai
Slide 19: Favourable Growth Dynamics: Zircon Demand in the BRIC Economies
Favourable Growth Dynamics Zircon Demand in the BRIC Economies For personal use only • Demand influenced by strong urbanisation Regional Zircon Consumption: 1990 to 2015 trend in BRIC economies, especially China and India • Zircon demand related to end-consumer consumption trends (may display featur
Slide 20: Key Risk Factors
Key Risk Factors(1) For personal use only • Successful and timely completion of the Jacinth-Ambrosia project in the Eucla Basin in South Australia is subject to certain risks, including delays and cost overruns • Delays or cost overruns in the development of the Murray Basin Stage 2 project • Apprec
Slide 21: Transaction Details
For personal use only Transaction Details 21
Slide 22: Why Invest Now?
Why Invest Now? For personal use only • Equity raising combined with new A$500 million debt facilities (comprised of a A$445 million Syndicated Term Loan Facility and a A$55 million Working Capital Facility) • Provides financial capacity to proceed with Jacinth-Ambrosia project • Favourable mineral
Slide 23: Offer Timetable – Key Dates (2008)
Offer Timetable – Key Dates (2008)* For personal use only Lodgement of Prospectus with ASIC 12 March Institutional Offer Opens (10am AEST) 13 March Institutional Offer Closes for Australian Institutions (5pm AEST) 14 March Institutional Offer Closes for International Institutions (6am AEST) 15 March
Slide 24: What You Need to Do – Immediate Next Steps
What You Need to Do – Immediate Next Steps For personal use only Institutional Shareholders • Read the Prospectus including the risk factors contained therein carefully and in full before making any investment decision • Read Procedures Manual carefully (provided by Underwriters) • If you are in Aus
Slide 25: Appendix
For personal use only Appendix – Overview of Iluka’s Assets – Jacinth-Ambrosia Project Details 25
Slide 26: Overview of Iluka's Assets and Location
Overview of Iluka’s Assets and Location For personal use only 26 Source: Iluka
Slide 27: Existing Australian Operations
Overview of Iluka’s Assets and Location Existing Australian Operations For personal use only Mid West • Three Wet Concentrator Plants (two at Eneabba and one at Gingin) • One Secondary Concentrator Plant (at Eneabba) • One Mineral Separation Plant (at Narngulu) • One Zircon Finishing Plant (at Narng
Slide 28: United States Operations
Overview of Iluka’s Assets and Location United States For personal use only Virginia • Two Wet Concentrator Plants (Old Hickory and Concord) • One Mineral Separation Plant (at Stony Creek) • Recent commitment to develop Brink deposit Florida / Georgia • Tailings re-treatments and processing facility
Slide 29: Eucla Basin Overview
Overview of Iluka’s Assets and Location Eucla Basin For personal use only Eucla Basin • Jacinth-Ambrosia first production expected in mid 2010 • Large exploration tenement holding of 52,000 square kilometres, including more than 2,000 kilometres of multiple ancient shorelines • Tripitaka (Joint Vent
Slide 30: Consolidated Rutile Limited
Overview of Iluka’s Assets and Location Consolidated Rutile Limited For personal use only Queensland • 51.04% interest in the ASX-listed mineral sands mining company Consolidated Rutile Limited • Two Floating Dredges / Wet Concentrator Plants (at North Stradbroke Island) • One Mineral Separation Pla
Slide 31: Mining Area C Royalty Area
Overview of Iluka’s Assets and Location Mining Area C Royalty Area For personal use only Pilbarra, Western Australia • Rights to royalty and capacity payments over iron ore produced from parts of BHP Billiton’s MAC iron ore project in northern Western Australia 31
Slide 32: Jacinth-Ambrosia Development Outline
Eucla Basin, Jacinth-Ambrosia Project Development Outline For personal use only Mining Method • Conventional, relatively shallow dry mining in a relatively large open pit • Ore up to a depth of 45 metres, under 8 to 10 metres of overburden • Overburden removal by scraper • Simple dozer trap mining,
Slide 33: Ore Reserves and Mineral Resources
Jacinth-Ambrosia, Eucla Basin Ore Reserves and Mineral Resources For personal use only Ore Reserves and Mineral Resources for the Jacinth-Ambrosia project (at 31 December 2007) In Situ HM(1) Average HM Grade Average Zircon Tonnes % Assemblage % Ore Reserves 6.4 6.5 50 Mineral Resources 9.5 4.0 48 Ex
Slide 34: Eucla Basin Ore Reserves
Eucla Basin Ore Reserves* For personal use only 34 * Reported in accordance with the JORC Code, 2004
Slide 35: Eucla Basin Mineral Resources
Eucla Basin Mineral Resources* For personal use only 35 * Reported in accordance with the JORC Code, 2004
Slide 36: Iluka Resources Limited Entitlement Offer
For personal use only Iluka Resources Limited Approximately $350m Accelerated Renounceable pro rata Entitlement Offer For further information, visit Iluka’s website www.iluka.com