Lynas Rare Earths Limited · ASX:LYC
Lynas Rare Earths — Lynas — Investor Presentation (September 2009)
29 slides from Lynas Rare Earths's investor presentation, Sep 29, 2009
Slide 1: Business Update and Capital Raising
For personal use only Business Update and Capital Raising 29 September 2009 NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS
Slide 2: Disclaimer
Disclaimer For personal use only This Presentation has been prepared by Lynas Corporation Limited (ABN 27 009 066 648) (Lynas or the Company). This Presentation contains summary information about Lynas and its subsidiaries (Lynas Group) and their activities current as at the date of this Presentatio
Slide 3: Disclaimer
Disclaimer For personal use only Not an offer This Presentation does not constitute an offer to sell, or the solicitation of an offer to buy, any securities in the United States or to any “U.S. person” (as defined in Regulation S under the U.S. Securities Act of 1933 (Securities Act) (U.S. Person)).
Slide 4: Business update
Business update For personal use only ► On 1 May 2009, Lynas announced that it had entered into a Heads of Agreement with China Nonferrous Metal Mining (Group) Co., Ltd (“CNMC”) in relation to a proposed equity and debt investment The transaction was subject to a number of conditions including the
Slide 5: Equity offer details
Equity offer details For personal use only ► A$450 million fully underwritten equity offer comprising three tranches: Approximately A$88 million unconditional placement (“Unconditional Placement”) Approximately A$295 million 1-for-1 non-renounceable entitlement offer (“Entitlement Offer”) Appr
Slide 6: Key investment highlights
Key investment highlights For personal use only 9 Lynas owns Rare Earths deposits and will be one of the only major suppliers outside of China China supplies 95% of global demand and this supply is currently being limited by Chinese Government export and production quotas 9 Lynas to benefit from p
Slide 7: Mt Weld has an attractive resource base and significant growth potential
Mt Weld has an attractive resource base and significant growth potential For personal use only Mt Weld Tenements The Total CLD Sector Mineral Resource (2.5% REO cut-off) March 2008 Category Tonnes Grade Tonnes (Mt) (%REO) (kt) REO Measured 2.21 14.7 324 Indicated 3.84 11.5 441 Inferred 6.19 6.8 418
Slide 8: Lynas Mt Weld will be the 1st fully integrated new source of supply outside of China
Lynas Mt Weld will be the 1st fully integrated new source of supply outside of China For personal use only Mining - Australia Open pit mining at Mt Weld Contractor mining on a campaign basis Rare Earths Concentration - Australia Concentrator using flotation to be constructed at Mt Weld Conta
Slide 9: First mining campaign at Mt Weld and surface ore stockpiles completed
First mining campaign at Mt Weld and surface ore stockpiles completed – on budget & time For personal use only ► 770,000t mined and on surface NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS -9-
Slide 10: Concentration Plant Status at Mt Weld
Concentration Plant Status at Mt Weld For personal use only ► Engineering Design completed ► Contract Status on-site Bulk earth works Downer EDI Completed ► All Approvals in place Construction contract Abesque Engineering On hold Steam generation RCR Energy Systems On hold ► All major equipmen
Slide 11: Lynas has secured land for the processing plant on Malaysia's east coast
Lynas has secured land for the processing plant on Malaysia’s east coast For personal use only Satellite Photo of Gebeng Industrial Area ► Strong Federal, State, and Local Government support Lynas granted “strategic pioneer status” with 12 year tax free period Gebeng Industrial ► Excellent infrast
Slide 12: Malaysian Advanced Material Plant Status
Malaysian Advanced Material Plant Status For personal use only ► Engineering Design substantially completed ► All Approvals in place ► Contract Status on-site Bulk earth works Substantially completed Piling Completed Concreting works On hold Other construction contracts Yet to be let, on hol
Slide 13: Supply agreements have been signed
Supply agreements have been signed For personal use only 1st Customer Agreement - 6th Customer Agreement – Supply Supply Contract Contract • ~US$90M¹ • Long term multiple year contract • Long term 5 year contract • Product from Phase I & Phase II of • Cerium, Europium, Terbium & final separation and
Slide 14: Sources and Uses
Sources and Uses For personal use only Sources A$mm Existing cash balances $4.1 Proceeds from equity raising $450.0 Total $454.1 Uses A$mm Construction and other capital costs – Phase 1 $314.5 Working capital and production ramp-up costs – Phase 1 $120.6 Estimated fees and expenses $19.0 Total $454.
Slide 15: Summary of estimated capital and operating costs to fund Phase 1
Summary of estimated capital and operating costs to fund Phase 1 of the Rare Earths Project For personal use only Construction & Other Capital Costs Total A$mm Capex spent to Future capex date A$mm A$mm WA Concentration Plant $59.5 $13.6 $45.9 Gebeng Cracker & Separator Plant 233.5 40.9 192.6 Engine
Slide 16: Pro forma June 2009 balance sheet
Pro forma 30 June 2009 balance sheet (adjusted for the capital raise) For personal use only Assets 30 June 09 (A$’000) Pro forma 30 June 09 (A$’000) Cash and cash equivalents $16.7 $447.7 PPE 151.5 151.5 Other Assets 49.7 49.7 Total Assets $217.9 $648.9 Liabilities 30 June 09 (A$’000) Pro forma 30 J
Slide 17: Offer timetable
Offer timetable For personal use only Event Date Institutional Entitlement Offer and Placements1 open Tuesday, 29 September 2009 Record date to determine eligibility to participate in the entitlement offer 5.00pm (WAST) Tuesday, 29 September 2009 Institutional Entitlement Offer and Placements1 close
Slide 18: Appendix A: Key risk factors
Appendix A For personal use only ► Key risk factors NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS -18-
Slide 19: Key risk factors
Key risk factors For personal use only 1) Introduction A number of risks and uncertainties, which are both specific to Lynas and of a more general nature, may affect the future operating and financial performance of Lynas and the value of Lynas shares. You should carefully consider the following ris
Slide 20: Key risk factors (cont.)
Key risk factors (cont.) For personal use only 3) Rare Earths market demand and price risks Lynas’ business relies primarily on the production and sale of Rare Earths products to a variety of buyers. Fluctuations in the global Rare Earths market may materially affect Lynas’ financial performance. De
Slide 21: Key risk factors (cont.)
Key risk factors (cont.) For personal use only 5) Regulatory and environmental risks a) General regulatory risks Lynas’ business is subject, in each of the countries in which Lynas operates, to various national and local laws and regulations relating to the development, production, marketing, pricin
Slide 22: Key risk factors (cont.)
Key risk factors (cont.) For personal use only 6) Tax risks Lynas is subject to taxation and other imposts in Australia and Malaysia. Future changes in taxation laws in those countries, including changes in interpretation or application of existing laws by the courts or taxation authorities in those
Slide 23: Appendix B: Foreign selling restrictions
Appendix B For personal use only ► Foreign selling restrictions NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS -23-
Slide 24: Foreign selling restrictions
Foreign selling restrictions For personal use only United States The securities in the proposed offering have not been and will not be registered under the U.S. Securities Act, or under the securities laws of any state or other jurisdiction of the United States. Accordingly, the securities in the pr
Slide 25: Foreign selling restrictions (cont.)
Foreign selling restrictions (cont.) For personal use only European Economic Area (which includes Belgium, Sweden, Luxembourg, the Netherlands and Germany) The information in this Presentation has been prepared on the basis that all offers of New Shares will be made pursuant to an exemption under th
Slide 26: Foreign selling restrictions (cont.)
Foreign selling restrictions (cont.) For personal use only Italy The information in this Presentation and any other materials in connection with the offer of the New Shares relating to Italy are for distribution, in compliance with any applicable law and regulation, only to qualified investors in It
Slide 27: Foreign selling restrictions (cont.)
Foreign selling restrictions (cont.) For personal use only Hong Kong The contents of this Presentation have not been reviewed or approved by any regulatory authority in Hong Kong. The information in this Presentation has not been, and will not be, registered as a prospectus in Hong Kong under the Co
Slide 28: Appendix C: Note on reserves and resources
Appendix C For personal use only ► Note on reserves and resources NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS -28-
Slide 29: Note on reserves and resources
Note on reserves and resources For personal use only The information in this report that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Brendan Shand, who is a member of The Australasian Institute of Mining and Metallurgy. Brendan Shand is an em