Pls Group Limited · ASX:PLS
Pls — Pilbara Minerals — Investor Presentation (June 2017)
52 slides from Pls's investor presentation, Jun 15, 2017
Slide 1: Pilgangoora – the world's leading lithium development project
For personal use only Pilgangoora – the world's leading lithium development project Investor Presentation – 15 June 2017 Not for distribution or release in the United States
Slide 2: Important Notices and Competent Person's Statement
Important Notices and Competent Person’s Statement • This document has been independently prepared by Pilbara Minerals Limited (Pilbara) in relation to an institutional placement (Placement) of new shares (New Shares) and issue of New Shares under a For personal use only share purchase plan (Share P
Slide 3: Important Notices – Forward looking statements
Important Notices and Competent Person’s Statement Forward looking statements For personal use only • Certain information in this document refers to the intentions of Pilbara, but these are not intended to be forecasts, forward looking statements or statements about the future matters for the purpos
Slide 4: Important Notices – Not an offer
Important Notices and Competent Person’s Statement Not an offer For personal use only • This presentation is for information purposes only and is not an offer or an invitation to acquire New Shares or any other financial products in any place. This presentation does not constitute an offer in any ju
Slide 5: Competent Person Statement
Important Notices and Competent Person’s Statement COMPETENT PERSON STATEMENT For personal use only Information relating to the mineral resource estimate at the Pilgangoora Project is extracted from the ASX announcement dated 25 January 2017 entitled "Pilgangoora Resource Update", information relati
Slide 6: Bond and Equity Raising Details
For personal use only Bond and Equity Raising Details Investment highlights and key updates Lithium Market Pilgangoora Project 6 Not for distribution or release in the United States
Slide 7: Successful USD100 million Bond Issue: Summary of Key Terms
Successful USD100 million Bond Issue: Summary of Key Terms Issue Size: USD100 million For personal use only Issuer: Pilgangoora Operations Pty Ltd, a wholly owned subsidiary of Pilbara Minerals Ltd Guarantors: Pilbara Minerals Ltd and Pilgangoora Holdings Pty Ltd Term: 5 years with a maturity date i
Slide 8: Equity Raising Overview
Equity Raising Overview For personal use only Equity raising to raise approximately A$77 million through a Placement of new fully paid ordinary shares in Proforma Equity Capital Structure two tranches (Placement): • The first tranche of the Placement consisting of approximately 189.9 million shares
Slide 9: Equity Raising Timetable
Equity Raising Timetable Key Event Date For personal use only Record Date for Share Purchase Plan Entitlement Wednesday, 14 June Trading Halt and Announcement of Equity Raising and Share Purchase Plan Thursday, 15 June Institutional Placement Offer Opens 11.00am1, Thursday, 15 June Australia / Asia
Slide 10: Sources and Uses of Debt and Equity Financing Proceeds
Sources and Uses of Debt and Equity Financing Proceeds Sources Uses For personal use only Cash Balance (30 April 2017) A$51 million Remaining Pilgangoora Project Capex A$207 million General Lithium Equity (previously approved by shareholders) A$18 million Corporate and Exploration A$16 million Ganfe
Slide 11: Lithium Market
For personal use only Bond and Equity Raising Details Investment highlights and key updates Lithium Market Pilgangoora Project 11 Not for distribution or release in the United States
Slide 12: Summary Investment highlights
Summary Investment highlights For personal use only Outstanding Rapid pathway Ideally placed to Low-cost and Significant project Offtake and to financing and capitalize on high quality resource scale economics and equity funding production from robust lithium lithium and grade ability to double secu
Slide 13: Pilbara Minerals – overview
Pilbara Minerals – overview Capital Structure Board of directors For personal use only Share Price (14 June 2017) A$ $0.375 Tony Kiernan – Non-Executive Chairman Shares on Issue # 1,277 million ► Highly experienced public company director and former solicitor with over 30 Options on Issue 1 # 103 mi
Slide 14: Pilbara Minerals – overview
Pilbara Minerals – overview ► 100% ownership interest in the world-class Pilgangoora Lithium -Tantalum Project For personal use only ► Pilgangoora is located in the Pilbara region of Western Australia, a proven mining jurisdiction 120km south of Port Hedland with established transport and port infra
Slide 15: Pilgangoora 2Mtpa – delivering on project execution
Pilgangoora 2Mtpa – delivering on project execution For personal use only Stage 1 Stage 2 Stage 3 Stage 4 Resource PFS (2Mtpa) DFS (2Mtpa) Project Growth Complete Complete Execution Resource Estimation Project Definition Detailed Design and Project Execution – from ► JORC Inferred ► Maiden Ore Reser
Slide 16: Pilgangoora Project
For personal use only Bond and Equity Raising Details Investment highlights and key updates Lithium Market Pilgangoora Project 16 Not for distribution or release in the United States
Slide 17: Lithium Growth – Batteries are the key driver
Lithium Growth Batteries are the key driver The way we Generate, Use, Distribute and Store energy is changing For personal use only Electric Vehicle uptake driving the growth in demand, followed by energy storage The Lithium-ion Battery is the storage of choice Batteries are the fastest growing segm
Slide 18: Lithium raw materials – the key ingredient of the battery supply chain
Lithium raw materials The key ingredient of the battery supply chain ► Lithium raw materials are the vital ingredient for lithium Battery Supply Chain For personal use only battery technology Hard Rock Lithium raw materials ► Lithium is sourced predominantly from: Lithium Carbonate/ Spodumene Mine S
Slide 19: Pilgangoora – a globally significant hard rock lithium resource
Pilgangoora – a globally significant hard rock lithium resource For personal use only PILBARA MINERAL S Note: Tantalum adjusted resource size includes consideration of the revenue of tantalum by-product. Source: Published resource estimates by project owners. Note that resources estimates for projec
Slide 20: China market overview – 2016 snapshot
China market overview – 2016 snapshot (Lithium Carbonate Equivalent) For personal use only Domestic Production +15kt Imports +85kt ►Spodumene SC6.0 (56kt) LOCAL PRODUCTION: ►Brine (7kt) ► Brine (10kt) Exports +11kt ►Lithium Carbonate (22kt) ► Spodumene (5kt) ►Lithium Carbonate (1kt) +90kt China ►Lit
Slide 21: Massive expansion of Lithium ion battery making capacity underway
Massive expansion of Lithium ion battery making capacity underway Battery making capacity set to increase significantly For personal use only ► Significant expansion through entire lithium-ion supply chain, including major chemical conversion capacity expansion (spodumene to Li2CO3 & LiOH) over the
Slide 22: Global motor vehicle lithium demand growing strongly
Global motor vehicle lithium demand growing strongly ► Tesla Model 3 to be released in 2017, retail price of USD 36,000 Global EV Builds For personal use only ► 400,000 orders already and growing ► Mercedes Benz releasing twelve new models of EVs in 2017 ► BMW i3 Series due for release 2017 in direc
Slide 23: Pilgangoora Project
For personal use only Bond and Equity Raising Details Investment highlights and key updates Lithium Market Pilgangoora Project 23 Not for distribution or release in the United States
Slide 24: Project highlights – outstanding project economics
Project highlights Outstanding project economics driven by very low cost of operations DFS OUTCOMES, 2Mtpa Process Capacity Base Case For personal use only ► Average annual production of approximately 314ktpa of 6% spodumene concentrate (44ktpa of Lithium Carbonate Equivalent or LCE) and 321,000lbs
Slide 25: 4Mtpa Expansion Option – Pre-Feasibility Study Complete
4Mtpa Expansion Option – Pre-Feasibility Study (“PFS”) Complete Outstanding projected economic returns ► Modest estimated incremental capital to expand to 4Mtpa, AUD 128m For personal use only ► LOM average annual production of approximately 564ktpa of 6% spodumene concentrates inclusive of technica
Slide 26: Pilgangoora – mining
Pilgangoora – mining A straightforward open pit mining development ► Measured, Indicated and Inferred Resource of 156.3Mt @ 1.25% Li2O For personal use only and 128ppm Ta2O5 containing 1,952,000 tonnes Li2O, and including 44Mlbs Ta2O5 (Mineral Resource Update ASX release dated 25 January 2017) ► Ore
Slide 27: Pilgangoora – processing
Pilgangoora – processing ► Industry standard processing flowsheet For personal use only ► Spodumene concentrate produced at three mines in Western Australia ► 2-stage heavy media separation ► Gravity separation, tantalite recovery ► Grinding leading to oxide flotation ► Low/High intensity magnetic s
Slide 28: Pilgangoora – mine to ship
Pilgangoora – mine to ship Contracted logistics chain proposed ► Road transport from mine site to Wedgefield Storage Facility Loading – Rotabox For personal use only ► 127km via Great Northern Highway utilising double road trains ► Product storage at Wedgefield and loaded into shipping containers ►
Slide 29: Operating costs set to become one of the lowest cost spodumene producers
Operating costs set to become one of the lowest cost spodumene producers ► DFS indicates first 5 years’ average cash operating cost1 Operating Costs – USD (Real) first 5 years ave2 For personal use only of USD 189/t concentrate CFR2 ► Contributing factors to the low forecast cash operating cost: ► S
Slide 30: Pilgangoora – capital costs
Pilgangoora – capital costs ► Total estimated capital cost of AUD 234m, AUD 27m paid to 30 April, with AUD 207m remaining. For personal use only ► Includes contingency of AUD 10m (AUD 6.5m excluding process plant) ► Represents ~12.5% of currently uncommitted capital costs (excluding process plant) ►
Slide 31: Pilgangoora Project – current work streams
Pilgangoora Project – current work streams Site Establishment For personal use only ► Installation of temporary construction offices and communications ► Road access and rail crossing upgrades Processing Plant ► Process Plant EPC Contract (Stage 1 FEED) awarded to RCR Tomlinson with Stage 2 (constru
Slide 32: A rapid pathway to financing, development and production
A rapid pathway to financing, development and production For personal use only PILGANGOORA PILGANGOORA PROJECT INDICATIVE DELIVERY PROJECT SCHEDULE DELIVERY SCHEDULE 2016 2017 2018 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 J A S O N D J F M A M J J A S O N D J F M A M J DFS FUNDING REGULATORY APPROVALS PROCUREMENT (I
Slide 33: Offtake secured
Offtake secured Strong industrial relationships with chemical grade offtake partners ► Stage 1 (2mpta) 10-year 160,000tpa 6% chemical-grade spodumene concentrate offtake For personal use only signed with Ganfeng Lithium ► Includes a binding equity subscription agreement of USD 20m ► Pricing based on
Slide 34: Additional offtake arrangements
Additional offtake arrangements ► DSO Offtake For personal use only ► Shandong Ruifu have been unable to provide the prepayment which is a condition precedent to the previously announced DSO offtake agreement, due to PRC approval constraints. The parties continue to discuss possible alternate terms
Slide 35: Investment highlights
Investment highlights ► Emerging low-cost Australian lithium producer For personal use only ► One of the largest spodumene lithium resource and high grade relative to its peers ► Outstanding project economics demonstrated by DFS ► Stage 2 PFS demonstrating potential to double scale to 4Mtpa ► Offtak
Slide 36: Contacts
For personal use only Contacts Ken Brinsden +61 8 6266 6266 Not for distribution or release in the United States
Slide 37: Supplementary Information
For personal use only Supplementary Information 37 Not for distribution or release in the United States
Slide 38: Key risks
Key risks Pilgangoora Lithium-Tantalum Project new development For personal use only • Pilbara Minerals intends to develop the Pilgangoora Lithium-Tantalum Project. The development of the Project will require establishment of a minesite, construction of a processing plant, haulage road and rail cros
Slide 39: Key risks (continued)
Key risks (continued) Operational risks For personal use only • Mining operations generally involve a high degree of inherent risk and uncertainty. Such operations are subject to all the hazards and risks normally encountered in the exploration, development and production of Li2O, Ta2O5 and other mi
Slide 40: Key risks (continued)
Key risks (continued) Contract and counterparty risk For personal use only • There is a risk that Pilbara Minerals’ contractors to its material project agreements may not perform or may breach their obligations under those agreements. Such contractors may include its mining services contractor, haul
Slide 41: Key risks (continued)
Key risks (continued) Insurance and uninsured risks For personal use only • Although Pilbara Minerals maintains insurance to protect against certain risks in such amounts as it considers to be reasonable, its insurance is unlikely to cover all the potential risks associated with its operations and i
Slide 42: Board of Directors
Board of Directors Highly experienced company director and former solicitor with over 30 years’ professional For personal use only Non-Executive Tony Kiernan experience. Currently Chairman and a non-executive director of several ASX-listed resource Chairman companies Mining Engineer with over 22 yea
Slide 43: Management Team
Management Team Chief Financial Chartered Accountant with more than 25 years’ experience in the Australian resources sector. Prior to joining Pilbara Minerals, Mr Lynn served as the Chief For personal use only Brian Lynn Officer Financial Officer at Atlas Iron Limited and spent 12 years as the Chief
Slide 44: Resources & Reserves
Resources & Reserves JORC Mineral Resources: 25th January 2017 For personal use only Category Tonnage Li2O (%) Ta2O5 Fe2O3 (%) Li2O (T) Ta2O5 (Mt) (ppm) (Mlbs) Measured 17.6 1.39 151 0.44 244,000 5.9 Indicated 77.7 1.31 125 0.58 1,017,000 21.5 Inferred 61.1 1.13 125 0.71 691,000 16.8 Total 156.3 1.2
Slide 45: Global lithium market demand growing strongly
Global lithium market demand growing strongly Consensus Global lithium demand forecast China – A Lithium Consumption Powerhouse For personal use only ► Central Government policy position towards ‘New Energy’ ► Domestic carbonate pricing took-off coincidentally with acceleration in EVs and Electric B
Slide 46: Global supply of lithium – new mines required
Global supply of lithium – new mines required ► The top four producers of global lithium supply accounted Global Lithium Supply Forecast (LCE) For personal use only for ~88% of global production in 2015 ► Lithium sourced from hard-rock operations represented 49% of global supply with 51% from brine
Slide 47: Pricing – outlook strong
Pricing – outlook strong ► Forecast DFS price deck derived from basket of Price forecast – Battery-grade Lithium Carbonate For personal use only independent economic and bank/broker models ► China domestic pricing, import pricing and spodumene import pricing models ► Expectation that domestic batter
Slide 48: Ganfeng Lithium – China's largest fully integrated lithium company
Ganfeng Lithium – China’s largest fully integrated lithium company ► Established in 2000 in Jiangxi Province, China, Ganfeng For personal use only Lithium has a capacity of around 35,000tpa of LCE and produces lithium carbonate, lithium hydroxide, lithium metals, butyl lithium, and a number of other
Slide 49: General Lithium – a major producer of lithium chemicals in China
General Lithium – a major producer of lithium chemicals in China ► Listed on NEEQ, Beijing, Code No: 837358 with a market capitalisation For personal use only of USD ~325m ► Completed a RMB 268m (USD 38m) capital raise in December 2016 ► Currently produces 8,000tpa of Lithium Carbonate (LC) & 2,000t
Slide 50: Foreign Selling Restrictions
Foreign Selling Restrictions This document does not constitute an offer of New Shares in any jurisdiction in which it would be unlawful. In particular, this document may not be distributed to any person, and the New Shares may not be offered or sold, in any country outside Australia except to the ex
Slide 51: Foreign Selling Restrictions
Foreign Selling Restrictions New Zealand This document is not a product disclosure statement or any other form of disclosure document under the Financial Markets Conduct Act 2013 (the "FMC Act"). This document has not been registered, filed with or approved by any New Zealand regulatory For personal
Slide 52: Foreign Selling Restrictions
Foreign Selling Restrictions Switzerland The New Shares may not be publicly offered in Switzerland and will not be listed on the SIX Swiss Exchange (the “SIX”) or on any other stock exchange or regulated trading facility in Switzerland. This document has been prepared without regard to the For perso