Arafura Rare Earths Limited · ASX:ARU
Arafura Rare Earths — Arafura Resources — Amvest Capital Webinar (May 2020)
31 slides from Arafura Rare Earths's conference presentation, May 6, 2020
Slide 1: ASX Announcement: Investor Presentation – Amvest Capital Webinar
ASX Announcement Investor Presentation – Amvest Capital Webinar 6 May 2020 For personal use only Arafura Resources Limited (ASX:ARU) (Arafura or the Company) is pleased to attach a copy of the presentation which was used as the basis for a webinar hosted by Amvest Capital, a New York City based spec
Slide 2: Investor Presentation – Amvest Webinar
5/05/2020 INVESTOR For personal use only PRESENTATION Amvest Webinar (ASX:ARU) 1
Slide 3: Disclaimer
5/05/2020 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 conjunction with and full r
Slide 4: Corporate Snapshot
5/05/2020 Corporate Developing the world-class Nolans Capital Structure Snapshot NdPr project ASX Code ARU For personal use only Nolans will supply 5-10% of ASX Share Price (31 March) $0.052 global demand for NdPr oxide, Shares on Issue 1,055m the key rare earths in permanent Market Capitalisation (
Slide 5: Nolans Project
5/05/2020 Nolans For personal use only Project (ASX:ARU) 4
Slide 6: 100% Australian Domiciled
5/05/2020 100% Australian Domiciled in the NT For personal use only Product traceability and single site waste Ore to oxide at a single site management certainty DFS includes fully-costed rehabilitation of Environmental approvals secured permanent disposal facility for tailings and (ASX:ARU) process
Slide 7: Definitive Feasibility Study
5/05/2020 Definitive Feasibility Study (DFS) Completed & Improved DFS completed February 2019 For personal use only confirming Nolans as a world class NdPr project Updated CAPEX US$726m, low OPEX producer DFS Ore Updated Ore Mining at US$25.94/kg NdPr Reserves Reserves Inventory Mining & Processing
Slide 8: Environment & Sustainability
5/05/2020 Environment & For personal use only Sustainability (ASX:ARU) 7
Slide 9: Sustainable Supply
5/05/2020 Extensive community and Licence to Operate – Sustainable Supply stakeholder consultation For personal use only Waste management plan tailings and residue facility Assessing impact from mining, extraction and transport corridor Surface water and groundwater management plans Biodiversity stu
Slide 10: Verified Tracking & Tracing across the Supply Chain
5/05/2020 Verified Tracking & Tracing across the Supply Chain For personal use only Supply Sustainable Production Arafura RE NdPr Oxide Metal NdPr Metal Magnet NdFeB Magnet OEM Chain Producer Convertor (China) (Germany) (Australia) (Thailand) Waste Management Certainty Supplier Toll Processor Manufa
Slide 11: Marketing Strategy
5/05/2020 Marketing For personal use only Strategy (ASX:ARU) 10
Slide 12: NdFeB Magnet Power Central to EV Efficiency & Cost
5/05/2020 Chevrolet Bolt: 150 kW permanent NdFeB Magnet Power Central to EV Efficiency & Cost magnet (PM) motor with 60 kWh For personal use only lithium-ion battery pack.1 PM motor cost based on US$8 per kW.2 Estimate of 1 kilogram of NdPr metal per Modelled effect of increase in NdPr price, Perman
Slide 13: EVs - driving the NdPr Market Opportunity
5/05/2020 EVs - driving the NdPr Market Opportunity For personal use only NdFeB Magnet Demand by Application 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 gro
Slide 14: Supply & Demand Balance
5/05/2020 Supply & Demand China continues to dominate the global supply chain Balance being the world's largest producer accounting for about For personal use only 80% of NdPr for global NdFeB magnet production Supply reforms, industry consolidation and higher environmental standards will constrain
Slide 15: China's Evolving Integrated NdPr Supply Chain
5/05/2020 China’s Evolving Integrated NdPr Supply Chain – Enables Made In China 2025 Strategy For personal use only Ore Concentrate Oxide Metal Alloy Magnet Component EV 2010 95% 95% 90% 80% 85% 80% 2018 70% 70% 85% 90% 90% 90% Market Value x 10x 100x 1000x MADE IN CHINA CHINA 2025 REST OF THE WORLD
Slide 16: Rare Earths are Critical Minerals
5/05/2020 Rare Earths China exerts control over most of the global rare earth supply chain are Critical Australia and its strategic allies For personal use only Minerals recognise the threat posed by China’s strategy to deny capital to new developments Australia is active in its policy response: Cri
Slide 17: Rest of the World Alternative Supply Chain
5/05/2020 Rest of the World Alternative Supply Chain For personal use only Ore Concentrate Oxide Metal Alloy Magnet Component EV European auto industry employs Diversification of NdPr supply Government recognition of the Nolans offtake strategy focused 13.8 million people which equates source may pr
Slide 18: Product Offtake
5/05/2020 Product Offtake For personal use only Amount Proportion Customer / Target Region Offtake Status (tonnes p.a.) of Revenue NdPr Oxide – targeting contract with NdFeB magnet companies &/or end users JingCi Material Science 900 MoU Baotou Tianhe Magnetics 900 MoU Japan 96% South Korea 2,557 In
Slide 19: Project Funding Strategy
5/05/2020 Project Funding For personal use only Strategy (ASX:ARU) 18
Slide 20: Project Funding Solutions
5/05/2020 Project Funding Solutions For personal use only The Enablers The Opportunities • Alignment with offtake and strategic partners that removes • China new supply more constrained – capital strategically some market risk focused downstream and tougher environmental standards • Offtake contract
Slide 21: Project Funding Strategy
5/05/2020 Project Funding Strategy Arafura looking to secure US$726m to meet CAPEX requirements for the Nolans project For personal use only Potential sources of funding include equity, debt, JV and/or project selldown with a strategic investor DFS completion and environmental approval are critical
Slide 22: Other Funding Sources
5/05/2020 Other Funding For personal use only Sources Subordinated debt facilities and other funding sources NAIF and Clean Energy Finance Corporation (CEFC) Mezzanine or cost over-run facility Build-Own-Operate (BOO) and equipment financing Offtake finance – prepayment or working capital (ASX:ARU)
Slide 23: Current Focus
5/05/2020 Current For personal use only Focus (ASX:ARU) 22
Slide 24: Indicative Production Timeline
5/05/2020 Indicative Production Timeline Targeting Front-End Engineering & Design (FEED) to be fully funded prior to commencement For personal use only Project Commitment Timetable subject to change due to impact on funding and offtake activities of COVID-19 (ASX:ARU) 23
Slide 25: 2020 Focus
5/05/2020 2020 Focus For personal use only Prioritising project Provision of sample Escalate engagement Continued dialogue work streams against product & advancing with financiers & with Australian & other cash conservation terms sheets with end financial advisors for governments seeking priorities
Slide 26: Appendices
5/05/2020 For personal use only Appendices (ASX:ARU) 25
Slide 27: Experienced Board
5/05/2020 Experienced Board For personal use only MARK SOUTHEY CHRIS TONKIN QUANSHENG ZHANG CATHY MOISES GAVIN LOCKYER CHAIRMAN NON-EXECUTIVE DIRECTOR NON-EXECUTIVE DIRECTOR NON-EXECUTIVE DIRECTOR MANAGING DIRECTOR Mark Southey has previously held Chris Tonkin has over 35 years’ Quansheng Zhang hold
Slide 28: Experienced Management
5/05/2020 Experienced Management For personal use only RICHARD BRESCIANINI PETER SHERRINGTON LLOYD KAISER BRIAN FOWLER STEWART WATKINS GENERAL MANAGER CHIEF FINANCIAL OFFICER & GENERAL MANAGER GENERAL MANAGER GENERAL MANAGER EXPLORATION & BUSINESS COMPANY SECRETARY SALES & MARKETING NT & SUSTAINABIL
Slide 29: Long Life Asset
5/05/2020 Long Life Asset 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% TREO cut-off grade. Numbers may not compute exactl
Slide 30: Process Flowsheet
5/05/2020 Process Flowsheet For personal use only Supported by Successful Pilot (ASX:ARU) 29
Slide 31: Residue Storage Facility
5/05/2020 Residue General arrangement of the final RSF design Storage Facility For personal use only Waste streams generated within the process plant disposed in RSF, a purpose built, long- term, earth fill, lined containment facility. The RSF footprint has been designed for the entire LOM and will
Arafura Resources — Amvest Capital Webinar (May 2020) on 6ix