Arafura Rare Earths Limited · ASX:ARU
Arafura Rare Earths — Arafura Resources — Investor Presentation (May 2010)
34 slides from Arafura Rare Earths's investor presentation, May 31, 2010
Slide 1: Nolans Project Progress Report
For personal use only Nolans Project Progress Report Shareholder Presentation, Frankfurt, Germany May 29 2010
Slide 2: Disclaimer
Disclaimer For personal use only Important Notice This presentation contains certain statements which may constitute “forward‐looking statements.” Such statements are only predictions and are subject to inherent risks and uncertainties which could cause actual values, results, performance achievemen
Slide 3: Strategy & vision
Strategy & vision For personal use only Our annual strategic review of the business has recently been completed y This has resoundingly confirmed our focus on Rare Earths; y The outlook for Rare Earths continues to improve; y Nolans is one of the few truly world‐class near‐term supply sources, provi
Slide 4: Capital raising
For personal use only Capital raising y Successful capital raising of A$19.5 million in March 2010 via placement to sophisticated and institutional investors, and 1 for 10 renounceable rights issue (RRI) to existing shareholders; y These funds have enabled Arafura to step up activities associated wi
Slide 5: Corporate structure
For personal use only Corporate structure (ASX: ARU) As at 26 May 2010 Capital 290m shares; 15.5m Board/Employee options Market capitalisation (ASX:ARU closing price @ 26 May 2010) @ A$0.445 = ~A$130 million Cash (@ 31 March 2010 ASX Quarterly report) A$25.2 million Top shareholders ANZ Nominees1 30
Slide 6: Rare earths: outlook continues to improve
Rare earths: outlook continues to improve For personal use only y Excellent growth prospects fuelled by consumer demand for new high technology products, and society and regulator drives for clean and efficient energy; y Very low future demand risks due to substitution or more efficient use/recyclin
Slide 7: Rare earths: demand growth, constrained supply
Rare earths: demand growth, constrained supply For personal use only Arafura is ideally positioned to meet globally growing demand and, importantly, is able to supply anywhere in the world
Slide 8: In situ REO mix: a competitive advantage & more
For personal use only In situ REO mix: a competitive advantage & more In Situ REO value (April 2010) $15.19 $15.45 16.00 Cerium 14.00 $12.03 Lanthanum 12.00 $10.25 Praseodymium Neodymium 10.00 Samarium US$/kg 8.00 Europium Gadolinium 6.00 Dysprosium 4.00 Terbium Yttrium 2.00 Other 0.00 Mountain Pass
Slide 9: Nolans value proposition
Nolans value proposition % REO REO Price Projected Revenue For personal use only Rare Earth Element Volume % Revenue contained (US$/kg) (US$ millions) p.a Lanthanum 19.74% 3,948 $6.45 $25 8.1% Cerium 47.53% 9,506 $4.95 $47 15.3% Praseodymium * 5.82% 1,164 $30.25 $35 11.4% Neodymium * 21.20% 4,240 $3
Slide 10: Nolans: a desirable REE mix
Nolans: a desirable REE mix For personal use only Nolans has a higher "Magnet feed" proportion of desirable Nd + Pr + Dy as % of total REE mix “magnet feed” rare 35% earths Nd, Pr & Dy 30% compared with other 25% deposits. 20% 15% The permanent magnet 10% 5% market is forecast to 0% grow at 8% per a
Slide 11: Comparison of non-Chinese REE projects
For personal use only Comparison of non-Chinese REE projects Kvanefjeld North American 40,000t Non‐North American Information sourced from individual company presentations, and media and stock exchange releases. Information on Annual Production REO 30,000t Significant barriers Bear Lodge schematic o
Slide 12: Arafura's exploration portfolio
For personal use only Arafura’s exploration portfolio Arafura’s exploration focus remains on rare earths in the Aileron‐ Reynolds region of the Northern Territory. We will add value to our non‐rare earth assets through joint ventures.
Slide 13: Nolans Update
For personal use only Nolans Update
Slide 14: Nolans Project scope
For personal use only Nolans Project scope The scope of the Nolans Project is confirmed as follows: y Mine and ore beneficiation at Nolans site o Supplementary drill program to establish full extent of resource and expansion capability beyond first production phase of 20,000 t p.a. REO y Critical un
Slide 15: Nolans Project update
Nolans Project update Mine site For personal use only y Drilling for EIS hydrology studies completed; y Optimisation in progress with Whittle Consulting. First pass results expected shortly; y Transport study completed; y Contract for final engineering feasibility to be awarded soon. Technology y Fi
Slide 16: Mine site EIS: hydro drilling
For personal use only Mine site EIS: hydro drilling
Slide 17: Mine site: environmental studies
For personal use only Mine site: environmental studies MD & CEO, Steve Ward, and With GM Exploration, Richard Brescianini, GM Sustainability, Brian Fowler, at alongside monitoring bore drilled as part Nolans Bore during recent site of EIS hydro drilling program inspection
Slide 18: Nolans Project update
Nolans Project update Mine site For personal use only y Drilling in progress for EIS hydrology studies; y Optimisation in progress with Whittle Consulting. First pass results expected shortly; y Transport study completed; y Contract for final engineering feasibility to be awarded soon. Technology y
Slide 19: Final technology programs underway
Final technology programs underway For personal use only Already proven / demonstrated Mining & Concentration Piloting & demonstration program Optimisation program Chemical Separation Acid recycle Rare Earth Phosphate Processing Processing Rare Earth Uranium Phosphoric Gypsum Oxides Oxide Acid De‐ri
Slide 20: Acid bake optimisation source feed: Big Bertha
For personal use only Acid bake optimisation source feed: “Big Bertha” • 780mm drill diameter • 70m drill depth • 40 holes across deposit • 3,000 tonnes of feed
Slide 21: Nolans Project update
Nolans Project update Chemical plant For personal use only y Design studies ongoing y Site selection work in final phase o Small number of short listed sites being evaluated o Critical decision with long term implications y Site decision expected soon o Stakeholder engagement is complex – government
Slide 22: Nolans Growth Strategy
For personal use only Nolans Growth Strategy
Slide 23: Business plan
Business plan For personal use only y Nolans resource is sufficient to sustain production of 20,000 t p.a. of REO for at least 20 years – Nolans Phase 1 (Australia) y With further drilling, there is potential to expand Nolans to support increased production beyond 20,000 t p.a. – Nolans Phase 2 (Aus
Slide 24: Nolans is already a globally significant resource
Nolans is already a globally significant resource For personal use only y Phase 1 estimated initial mine life 20+ years from current known resource; y Exposed at surface; size extent unknown; y Only drilled to 130m below surface; y Further drilling planned to establish full extent of resource and Ph
Slide 25: Future drill program
For personal use only Future drill program LEGEND NB All Collars 2000-2008 Prop P1 North Zone Depth Extension Prop P1 Central Zone Depth Extension Prop P2 Drill Hole Prop P3 Drill Hole Prop P4 Exploration Drilling Prop P5 20x20m “Measured” Drilling Track Fence y Program aimed at growing resource bas
Slide 26: Moving forward: the next steps
Moving forward: the next steps For personal use only 2010 ‐ 2013 y Refine technology and, where necessary, demonstrate at scale; y Chemical plant site selection, EIS, mine site studies, regulatory approvals; y Extensive drilling program to increase resource base and reduce resource risk; y Refine th
Slide 27: Resource Super Profits Tax
For personal use only Resource Super Profits Tax
Slide 28: Value creation: pit to customer across all products
Value creation: pit to customer across all products For personal use only There are many value drivers to consider. Rare earths are much more complex than some other commodities. L Grade Size Conversion Ore O REE assemblage Reserves C Other valuable commodities A T Recovery Mining & I Ore accessibil
Slide 29: Resource Super Profits Tax (RSPT): an overview
For personal use only Resource Super Profits Tax (RSPT): an overview y Proposed commencement July 2012; y 40% tax on assessable resource profits , not gross revenue. Key Issue – Taxing Point y Over riding principal is to tax as close as possible to the point at which the resource is extracted – the
Slide 30: Resource Super Profits Tax: current status
For personal use only Resource Super Profits Tax: current status y Lack of clarity regarding application of the RSPT is causing considerable uncertainty in the Australian business environment and financial markets; y Subject of considerable political debate and media commentary; y Industry consultat
Slide 31: Summary
For personal use only Summary
Slide 32: Summary
For personal use only Summary Rare Earths – excellent prospects for value generation for Arafura shareholders: y Good market growth fundamentals with very small risks; y Market is supply side constrained. Nolans is one of the very few new rare earth supplies for users worldwide; y The Nolans resourc
Slide 33: Corporate information
For personal use only Corporate information Registered Office Arafura Resources Ltd Level 5, 16 St Georges Terrace Perth WA 6000 Telephone +61 8 6210 7666 Facsimile +61 8 9221 7966 Share Registry Security Transfer Registrars 770 Canning Highway Applecross WA 6153 Telephone +61 8 9315 2333 Facsimile
Slide 34: Thank You
For personal use only Thank You