Arafura Rare Earths Limited · ASX:ARU
Arafura Rare Earths — Arafura Resources — Investor Presentation (August 2019)
23 slides from Arafura Rare Earths's investor presentation, Aug 1, 2019
Slide 1: Emerging as Australia's Next NdPr Producer
For personal use only Arafura Resources Limited (ASX:ARU) “Emerging as Australia’s Next NdPr Producer” August 2019 Investor Presentation
Slide 2: Important Notice – Disclaimer
Important Notice – Disclaimer 2 For personal use only This presentation has been prepared by Arafura Resources Limited (Arafura, Arafura Resources or the Company) and is of a summary form only and therefore contains general background information which may not be complete. It should be read in conju
Slide 3: Rare Earth Projects – Myths and Mis-directions
Rare Earth Projects – Myths and Mis-directions 3 For personal use only ▪ Metrics for RE projects not well understood by average investor. ▪ Not simple mining projects. ▪ Effective comparison requires “looking” under the hood and digging into the detail required to allow comparison between projects ▪
Slide 4: Arafura Corporate Snapshot
Arafura Corporate Snapshot 4 For personal use only Capital Structure ASX Code ARU ASX Share Price (26 Jul 19) $0.086 Shares on Issue 1,055m Market Capitalisation (26 Jul) $90.7m 12 Month Liquidity $42.3m Cash (30 Jun*) $28.6m Debt Nil Enterprise Value (30 Jun) $76.6m Patersons recently underwrote ri
Slide 5: Arafura's Nolans Project
Arafura’s Nolans Project 5 For personal use only ▪ DFS Completed February 2019 confirms Nolans as a world class NdPr project DFS ▪ Annual NdPr production 4,357 tonnes Complete ▪ Ultra-low cost producer US$25.94/kg NdPr Permitting De-Risked ▪ Robust economics with average EBITDA A$377m in Final DFS p
Slide 6: 100% Australian Domiciled with Infrastructure
100% Australian Domiciled with Infrastructure 6 For personal use only ▪ DFS includes fully costed permanent disposal and rehabilitation of tailings and process residues at site. ▪ Stuart Highway 10 km east. ▪ Environmental approvals secured ▪ Alice Springs railyard, airport and other services 135 km
Slide 7: Sustainable Supply is Our Value
Sustainable Supply is Our Value 7 For personal use only Extensive community and stakeholder consultation Waste management plan tailings and residue facility Assessing impact from mining, extraction and transport corridor Social License Surface water & groundwater to Operate management plans Biodiver
Slide 8: The Hard Work Matters
For personal use only 8 The Hard Work Matters Arafura Resources Limited (ASX:ARU) August 2019
Slide 9: Technology Program – De-Risked Process
Technology Program – De-Risked Process 9 For personal use only ✓ Phase 1 Beneficiation 5,000 kg high- phosphate concentrate ✓Phase 2 >82% NdPr, >90% Phosphate ✓Phase 7 P2O5 recovery Extraction ✓Rare Earth Merchant grade Beneficiation Pilot Plant Separation phosphoric acid Design has suitable for
Slide 10: Unique Process Delivers Ultra-Low Opex
Unique Process Delivers Ultra-Low Opex 10 For personal use only ▪ Leaching in phosphoric acid allows the leaching of the phosphate minerals without precipitation of the calcium reducing tonnage to the acid bake ▪ Phosphoric acid for pre-leach is generated by leaching of the high phosphate concentrat
Slide 11: Unique Process Delivers Ultra-Low Opex
Unique Process Delivers Ultra-Low Opex 11 For personal use only ▪ Innovative process developed by Arafura precipitates low impurity rare earth sulphate by addition of Phosphoric Acid Recycle Phosphoric Acid Pre-Leach precipitation agent without neutralisation of acid ▪ Following precipitation and so
Slide 12: De-Risked DFS
De-Risked DFS 12 For personal use only ▪ Designed for ramp-up ▪ Risks costed into DFS outcomes o Surge capacities between major process stages including o Conservative three year ramp up schedule included one week concentrate, two weeks PLR, one week RE (29% Y1, 62% Y2, 93% Y3) chloride o Additional
Slide 13: The Opportunity
For personal use only 13 The Opportunity Arafura Arafura Resources Limited Resources Limited (ASX:ARU) (ASX:ARU) August 2019
Slide 14: NdPr Market Opportunity
NdPr Market Opportunity 14 For personal use only ▪ Underlying demand for NdFeB magnets across all applications is forecast to grow by 6% p.a. over the period to 2030 ▪ NdFeB demand growth for EV applications is more dramatic and forecast to grow by 24% p.a. ▪ Demand in applications for consumer elec
Slide 15: NdPr Magnet Substitution - EV
NdPr Magnet Substitution - EV 15 For personal use only Modelled effect of increase in NdPr price, NdFeB Magnet v ▪ Chevrolet Bolt: 150 kW NdFeB magnet Induction Motor and incremental Li-ion battery pack motor with 60 kWh lithium-ion battery pack.1 $3,000 ▪ NdFeB magnet motor cost based on US$8 per k
Slide 16: Supply & Demand Balance
Supply & Demand Balance 16 For personal use only ▪ China continues to dominate the global supply chain being the world's largest producer accounting for about 80% of NdPr for global NdFeB magnet production ▪ Supply reforms, industry consolidation and higher environmental standards will constrain Chi
Slide 17: Supply & Demand Balance
Supply & Demand Balance 17 For personal use only ▪ China will likely to experience some Demand and Supply Growth 2018 to 2030 reduced illegal/undocumented Demand Growth China Supply Global Supply production offsetting increased 30000 production from domestic ores and imported mineral concentrates 25
Slide 18: Funding to production
For personal use only 18 Funding to production Arafura Arafura Resources Limited Resources Limited (ASX:ARU) (ASX:ARU) August 2019
Slide 19: Offtake and Project Funding Discussions Underway
Offtake and Project Funding Discussions Underway 19 For personal use only ▪ Offtake agreements to underpin project funding ▪ Customer engagement targeted at NdPr users not aligned with China 2025 strategy ▪ Japan – NdFeB magnet manufacturers ▪ Europe & Korea – automotive OEMs and wind turbine makers
Slide 20: Project Funding Strategy
Project Funding Strategy 20 For personal use only ▪ Arafura looking to secure a A$1,146m(1) in new funding to execute the Nolans Project ▪ Potential sources of funding include equity, debt, JV and/or project selldown with a strategic investor ▪ DFS completion and environmental approval are critical
Slide 21: Indicative Production Timeline
Indicative Production Timeline 21 For personal use only Arafura Resources Limited (ASX:ARU) August 2019
Slide 22: Contact
For personal use only Contact: Level 3, 263 Adelaide Terrace Perth, WA, 6000, Australia T: +61 8 6210 7666 E: arafura@arultd.com August 2019 Investor Presentation
Slide 23: Long Life Asset
Long Life Asset 23 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 As announced on 7 June 2017. 1.0% TREO cut-off grade. Numbers may not compute exactly due
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