Volt Resources Ltd · ASX:VRC
Volt Resources — Investor Presentation (March 2017)
33 slides from Volt Resources's investor presentation, March 2017
Slide 1: Emerging natural graphite supplier to global markets
Emerging natural graphite supplier to global markets Investor Presentation – March 2017 Trevor Matthews - Chief Executive Officer ASX: VRC 1
Slide 2: Disclaimer
Disclaimer The information contained in this confidential document (“Presentation”) has been prepared by Volt Resources Limited (the “Company”). It has not been fully verified and is subject to material updating, revision and further amendment. While the information contained herein has been prepare
Slide 3: Volt Resources: Snapshot
Volt Resources: Snapshot • Volt starts small-scale mining/processing in 1Q2018, post Transitioning to producer signing a binding offtake agreement with US-based NanoGraphene High-grade graphite • High TGC content, flake distribution >60% in large to super jumbo sizes, excellent conductivity/ expanda
Slide 4: The Namangale project (100%-owned)
The Namangale project (100%-owned) ➢ The Namangale project is a graphite development located in south-east Tanzania now moving into small scale mining and processing from early 2018 The Company confirms that it is not aware of any new information or data that materially affects the information inclu
Slide 5: Corporate overview
Corporate overview Capital Structure VRC Share Price Chart (12-months) Shares on Issue 976,784,137 0.14 Options and Rights 236,314,983 0.12 Share Price ( 10 Mar 2017) A$0.036 0.10 52 week high / low A$0.145 / 0.011 0.08 FD Market Cap A$44m 0.06 Cash (31 Dec 2016) A$3m 0.04 Avg daily volume (shares)
Slide 6: Board and executive management
Board and executive management Stephen Hunt o Minerals marketing specialist with 25 years experience in global roles: 15 Non-Executive Chairman yrs at BHP and 10 years as Director of ASX listed companies. B Bus (Marketing) AICD o Ex-founding director at graphite focused Magnis Resources. Trevor Matt
Slide 7: Volt's two primary target markets: A) spherical graphite
Volt’s two primary target markets: A) spherical graphite… Spherical graphite for use in lithium-ion batteries, driven by: ➢ Accelerating demand for EVs – reaching 7m in 2020F (vs c. 800k in 2015) ➢ Growing renewable energy take-up driving stationary power storage market Resulting in: ➢ Huge capacity
Slide 8: ...which has an attractive value chain
…which has an attractive value chain Increasing value US$7,000- 12,000/t US$3,000- Graphite anodes 5,000/t for use in lithium- US$700- ion batteries Coated spherical 1,700/t* graphite ^ Undertaken Uncoated spherical - Coating globally graphite ^ Undertaken in Volt graphite - Milling (40-60% China, K
Slide 9: ...and B) expandable graphite
..and B) expandable graphite Expandable graphite for use in core applications: ➢ Flame retardant polystyrene insulation foam (combined with building materials) ▪ “Stricter building regulations in China / Europe, could propel demand to rival the battery sector” ➢ Graphite foil (used in electronic pro
Slide 10: Volt's emerging target markets: graphene and graphite composites
Volt’s emerging target markets: graphene and graphite composites Graphite composites for use in a wide array applications: ➢ Well known consumer products that use carbon fibre include golf clubs and racing bikes ➢ Hi-tech applications are parts in fighter jets that travel at extreme speeds Graphene
Slide 11: Exploiting substitution opportunities in traditional markets
Exploiting substitution opportunities in traditional markets Global supply Global supplyof ofall graphite2016E graphite 2015E ➢ In 2016, c. 2.2Mt of graphite was produced; synthetic graphite accounted for 47% ➢ Traditional heavy industries remained the dominant natural graphite consumers in 2016 Syn
Slide 12: Global marketing strategy delivers first binding off-take
Global marketing strategy delivers first binding off-take ➢ Inaugural binding off-take agreement for 5,000 tonnes over 5-years with US- based graphene producer, Nano Graphene Inc (NGI), commencing 1Q2018 ➢ Volt won the mandate to supply its premium graphite concentrate because it: ▪ has exceptionall
Slide 13: Implications: Transition to producer status earlier than planned
IMPLICATIONS: Transition to producer status earlier then planned ➢ The NGI agreement transforms Volt’s status to producer well ahead of budget ➢ From 1Q2018, cashflow starts from small scale mining and processing ➢ Several key benefits Volt can leverage from this binding agreement comprise: ▪ Demons
Slide 14: The Namangale project's status: PFS completed; DFS underway
The Namangale project’s status: PFS completed; DFS underway ➢ PFS concludes Namangale project is Parameter Units Metric IRR - before tax (%, real) 86.9% financially attractive to progress – IRR - after tax (%, real) 66.5% US$1.3B pre-tax NPV and 1.4 year NPV @ 10.0% - before tax (US$ M, real) 1,310
Slide 15: Largest graphite Mineral Resource in Tanzania
Largest graphite Mineral Resource in Tanzania ➢ JORC compliant Mineral Resource Estimate is 461Mt @ 4.9% TGC Namangale Project Tonnes (millions) TGC % Inferred North 264 5.0 South 23 3.6 Total Inferred 286 4.9 Indicated North 122 5.2 South 33 4.3 Total Indicated 155 5.0 Measured North 20 5.3 Total R
Slide 16: Maiden Ore Reserve largest of all development projects
Maiden Ore Reserve largest of all development projects ➢ Maiden JORC Ore Reserve is 127Mt @ 4.4% TGC Contained Ore Reserve Ore TGC Graphite Classification (Mt) (%) (Mt) Proved Namangale 1 (North) 19.3 4.32 0.8 Namangale 2 (South) - - - Namangale 3 (South) - - - Subtotal – Proved 19.3 4.32 0.8 Probab
Slide 17: Blended basket price based on two products
Blended basket price based on two products ➢ Volt will produce two natural flake graphite concentrates, with Namangale South producing a premium quality larger flake product (as >60% flake distribution in large to super jumbo category) ➢ The blended basket price has been calculated at US$1,684/t bas
Slide 18: Attractive margins based on relatively low CAPEX and OPEX
Attractive margins based on relatively low CAPEX and OPEX OPEX Operating cost estimate summary Annual Operating Costs Total Product ➢ Annual OPEX US$93M (US$536/t FOB (US$M/y) (US$/t) Mtwara) which delivers US$195M EBITDA Technical Services and 42.1 243 Mining Processing 31.5 182 Total General & 6.0
Slide 19: The project's material comparative advantages
The project’s material comparative advantages ➢ Sealed roads through project ➢ Deep water port at Mtwara is 140km by sealed road from the Project and under- utilised ➢ Port land available for product storage ➢ Benefits concentrate product exports and imports of supplies, parts and equipment for cons
Slide 20: 2017-19 action plan
2017-19 action plan 2016 2017 2018 2019 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D PFS ✔ Pre-DFS ✔ DFS Secure off-take agreements Project finance FID FEED & Value engineering Detailed design & engineering EPS Document
Slide 21: Processing and logistics plans taking shape
Processing and logistics plans taking shape ➢ Further work on optimising the mine schedule based on the Project’s large reserve and resource base ➢ Review of mining methods to take advantage of the relatively shallow and continuous ore body ➢ Processing flow sheet design and equipment selection will
Slide 22: Process for securing environmental certificate progressing
Process for securing environmental certificate progressing ➢ The first phase is completing the Environmental and Social Impact Assessment (ESIA) process which Volt’s team and consultant in Tanzania are progressing • Volt has advised the National Environmental Management Council (NEMC) of its plans a
Slide 23: Successful stakeholder meetings – integral part of the ESIA process
Successful stakeholder meetings – integral part of the ESIA process ➢ Volt’s CEO, Trevor Matthews was in Tanzania in late January to meet with officials from three levels of government and promote the Namangale project ➢ In addition, he participated in a stakeholder workshop and gained support for t
Slide 24: Compared with peers, VRC has the largest Reserve
Compared with peers, VRC has the largest Reserve… ➢ VRC has ample Reserves to scale up and meet the material projected jump in demand for spherical and expandable graphite over the next decade Probable Proved GPX KNL MNS SYR VRC 0 20 40 60 80 100 120 140 (Mt) Source: Company data (Note: BKT has not
Slide 25: ...second largest Resource
… second largest Resource Measured Indicated Inferred GPX KNL BKT MNS VRC SYR 0 200 400 600 800 1,000 1,200 (Mt) Source: Company data 25
Slide 26: ...but trades at lowest EV/(M&I Resource) multiple
…but, trades at lowest EV/(M&I Resource) multiple ➢ Highlights material upside as Namangale project is continually de-risked EV/(Measured & Indicated Resource Tonnes) (x) 5.0 Study phases MNS seeking offtakes/finance; KNL Funded and 4.0 pending finance constructing approval mine 3.0 2.0 1.0 - BKT VR
Slide 27: Competitive advantages facilitate value creation
Competitive advantages facilitate value creation ➢ Securing the binding agreement with US-based NanoGraphene transitions Volt to producer status much earlier than expected; provides considerable leverage with other prospective customers ➢ Three MOUs with leading Chinese battery and anode material pr
Slide 28: Appendices
APPENDICES VV) VOLT 7 RESOURCES
Slide 29: Appendix A: Global lithium-ion battery capacity by group
Appendix A: Global lithium-ion battery capacity by group ➢ Huge ramp up from 66GWh in 2015 and driven by >12 ‘gigawatt’ facilities, costing >US$20bn, coming on stream to meet projected lithium-ion battery demand (GWh) 2015 2020 120 100 80 60 40 20 0 Source: Company reports and Volt Resources estimat
Slide 30: Appendix B: The opportunity for natural graphite suppliers
Appendix B: The opportunity for natural graphite suppliers ➢ BMI stated China, which is the world’s largest supplier at circa 800kt/annum, has hit ‘peak natural graphite’… ▪ Unlikely to meet internal spherical graphite needs, let alone global ▪ Supply bottlenecks apparent for expandable graphite ▪ I
Slide 31: Emerging trend: Naturally sourced graphite preferred feedstock
Emerging trend: Naturally sourced graphite preferred feedstock ➢ BMI’s analysis suggests most end-users prefer natural graphite over synthetic: ▪ Lower impact on the environment and lower cost to produce ▪ Higher energy density and power output (applicable for EVs) ➢ Caveats: ▪ Graphite product must
Slide 32: Appendix C: Tanzania has a well established mining and service industry
Appendix C: Tanzania has a well establish mining and service industry PESTEL analysis: Political stable and enjoying solid economic performance Politics ➢ Relatively stable democracy since 1960s & English speaking ➢ Strong and successful purge against corruption (IMF Apr 2016) Economics ➢ Economic p
Slide 33: Volt Resources Limited
Volt Resources Limited ACN 106 353 253 Level 5, London House, 216 St. Georges Terrace Perth WA 6000 Australia Phone: +61 (8) 9486 7788 Email: info@voltresources.com Web: www.voltresources.com 33