Slide 1: Investor Briefing - Mining 2007 Resources Convention
Arafura Resources Limited For personal use only Investor Briefing Mining 2007 Resources Convention Gavin Lockyer – Chief Financial Officer Richard Brescianini – GM Strategic Development & Exploration 1 November 2007 Brisbane, Australia
Slide 2: Board and Senior Management
Board and Senior Management For personal use only Non-Executive Chairman GM – Project Development Mick Muir Steve Mackowski Non-Executive Directors GM – Strategy & Exploration Ian Kowalick Richard Brescianini Terry Jackson International Business Advisor Dr. Steve Ward Gloria Zhang Managing Director
Slide 3: Capital structure
Capital structure For personal use only ASX Codes ARU : ARUO Shares on Issue 124.2 m Options – listed 11.6 m @ 13c, June ’08 Share Price (31/10/07) AUD$1.195 Market Capitalisation – fully diluted (07/09/07) ~AUD$162 m Cash on hand AUD$3.0 m Commercial Ready Grant for feasibility AUD$3.3 m Sale of Ir
Slide 4: Arafura's projects
Arafura’s projects For personal use only Arafura Resources 10% NuPower 100% Arafura Uranium Nolans Exploration Resource will sustain an Vanadium operating life of +20yrs Multiple revenue streams Gold REO, Phosphate, Uranium Nickel Target production 2011 farm-in by Mithril Resources
Slide 5: REE-P-U project
Nolans REE-P-U project For personal use only DARWIN • • Nolans Bore • 5 km to gas pipeline 135 km to Alice Springs ALICE SPRINGS 10 km to Stuart Highway 1200 km to Darwin 60 km to rail line
Slide 6: Rare earths – strange minerals
Rare earths – strange minerals For personal use only Fluorapatite: Ca5(PO4)3F Cheralite: (Ce,Th,REE)(P,Si)O4 Bastnäsite: (Ce,La)(CO3)F Monazite: (Ce,La,Nd,Th)PO4 Thorite: ThSiO4
Slide 7: Geology and resources
Nolans geology and resources For personal use only Mt REO% REO (kt) P2O5% U3O8 lb/t Total 10.5 3.1 332 13.8 0.5 Indicated Total Inferred 8.1 3.0 245 14.3 0.43 TOTAL 18.6 3.1 577 14.0 0.47 RESOURCES JORC November 2005 – 1% REE cut-off
Slide 8: Process
Nolans process For personal use only Mining 750,000 tpa Washing & transport to Darwin Removes 30% as waste for 95% REO recovery Acid Leach 530,000 tpa Sulphuric acid treatment Neutralisation High REO recovery Recovers all REO and metals Caustic “cracking” process SX for Phosphoric acid recovery Thor
Slide 9: Product uses
Nolans product uses For personal use only Nolans Products Rare Earths Phosphoric Acid Calcium Chloride Antifreeze agent Petroleum Catalysts Fertiliser grade De-icing Automotive Binding agent Chemical grade Exhaust Catalysts in road construction Food additive grade Rechargeable batteries Dust suppres
Slide 10: Product mix
Nolans product mix For personal use only The Nolans project is rich in high value rare earths 100 4.0% 90 % R E O C o n te n t 27.3% 80 70 60 2006 demand Baiyunebo Mountain Pass Mt Weld Nolans Ce+La Nd+Pr+Dy Heavy RE
Slide 11: Rare earths supply and demand
Rare earths supply and demand For personal use only 200,000 200,000 175,000 Demand growth estimated at 11.5% pa 175,000 +155 000 tonnes by 2010 150,000 150,000 +185 000 tonnes by 2012 Demand tpa - REO 125,000 125,000 100,000 100,000 75,000 75,000 50,000 50,000 25,000 25,000 0 0 04 05 06 f f f f f f
Slide 12: Valuation
Nolans valuation For personal use only NPV post-tax AUD$1.1 billion IRR post-tax 16% CAPEX AUD$750 million OPEX AUD$350 million pa Escalation rates – CAPEX 10%, OPEX 3%, Revenue – variable Operating life +20 years Exchange rate AUD$1 = USD$0.90 over life of operation Revenue from 4 product streams –
Slide 13: PFS assumptions
Nolans PFS assumptions For personal use only 1. Capital costs estimated at AUD$750 million • A base of AUD$450 million for all plant • Includes AUD$120 million for contingency – scope change • Includes AUD$180 million for first fill chemicals etc 2. Operating costs estimated at AUD$350 million per a
Slide 14: Project opportunities
Nolans project opportunities For personal use only 1. Resources grade • Assumes the average resource grade – conservative • Optimum feed grade analysis in progress 2. Capital costs • Savings expected with components manufactured overseas • Capital requirements under review 3. Operating costs • On-si
Slide 15: Project opportunities
Nolans project opportunities For personal use only 5. Exchange rate • Long term forecast USD : AUD is 0.75 • At AUD$1=USD$0.75 has a +$600 million impact = a post-tax NPV of $1.7 billion 6. Pricing PFS Current prices^ • Rare earths* US$ 11,600/t US$ 13,900/t • Phosphoric acid US$ 400/t US$ 500 – 600
Slide 16: Development plan
Nolans development plan For personal use only Development timeline 2008 Pilot plant & detailed engineering design 2009 Approvals process 2010 Construction & commissioning 2011 Production at 50% utilisation = 10,000 t REO 2012 Production at 75% utilisation = 15,000 t REO 2013 Production at 100% utili
Slide 17: Exploration project locations
Exploration project locations For personal use only Kurinelli – Davenport West (Gold) Frances Creek – Mt Porter (Gold) Aileron-Reynolds Range (REE) Hammer Hill JV (Nickel) Jervois (Vanadium)
Slide 18: Drilling 2007-08
Nolans drilling 2007-08 For personal use only 2006-07 4,634 metres RC 2,024 metres core 2007-08 20,000 metres RC underway
Slide 19: Jervois vanadium project
Jervois vanadium project For personal use only
Slide 20: Jervois magnetite outcrops
Jervois magnetite outcrops For personal use only Outcrop 1 Outcrop 2 Fe 51.4% 55.4% TiO2 15.1% 13.8% V2O5 1.16% 1.45% P 0.03% 0.01% S 0.03% 0.04% SiO2 4.24% 1.57% Al2O3 3.94% 3.40%
Slide 21: Jervois 2006 program – drilling
Jervois 2006 program – drilling For personal use only • 10-12 magnetic targets tested • 937 metres of RC drilling in 15 holes • Most holes intersected broad zones (20-60 metres thick) of >10% magnetite mineralisation • Semi-massive magnetite over intervals 5-47 metres thick
Slide 22: Jervois primary mineralization
Jervois primary mineralization For personal use only HOLE INTERVAL FROM % V2O5 % Fe UNRC001 44 m surface 0.76 31.5 UNRC002 22 m 28 m 0.77 32.4 UNRC004 10 m 3m 0.52 31.0 UNRC005 21 m surface 0.62 29.7 UNRC008 47 m 26 m 0.37 29.2 UNRC015 18 m 47 m 0.38 23.4
Slide 23: Jervois concentrate grades
Jervois concentrate grades For personal use only HOLE INTERVAL FROM % V2O5 % Fe UNRC001 44 m surface 1.98 61.6 UNRC002 22 m 28 m 1.89 63.4 UNRC004 10 m 3m 1.41 66.9 UNRC005 21 m surface 1.61 65.3 UNRC008 47 m 26 m 1.03 63.2 UNRC015 18 m 47 m 1.34 67.7
Slide 24: Jervois summary result
Jervois summary result For personal use only Magnetite Weight Recovery (DTR) % % V2O5 % Fe 27.9 1.34 64.5 Average for all samples in 2006 drill program Recovery of vanadium to concentrate averages 76%
Slide 25: Vanadium deposits
Vanadium deposits For personal use only DTR Concentrate Reserve Resource Grade Recovery Grade Mt Mt % V2O5 % % V2O5 Jervois, NT Not Not 27.9 0.47 1.34 (average) applicable applicable Balla Balla, WA 104 65 0.63 1 Barrambie, WA 23.6 36-64 0.82 1.3-1.68 Windimurra, WA 98.2 22.0 0.40 1.17 Rhovan, RSA 5
Slide 26: Jervois metallurgical assessment
Jervois metallurgical assessment For personal use only • Comparatively low in silica and phosphorus allowing potential for leach oxidation • A good quality vanadium-only product is recoverable
Slide 27: Summary – our corporate strategy
Summary – our corporate strategy For personal use only Developing long life projects with high returns Short term • How big is Jervois? • Divest / realise the value of non-core assets • Expand our exploration opportunities Medium Term Development (target 2011) • Development of Nolans Rare Earths – P