Neometals Ltd · ASX:NMT
Neometals — Investor Presentation (August 2017)
76 slides from Neometals's investor presentation, Aug 22, 2017
Slide 1: The Evolution of Lithium - Investor Presentation
For personal use only The Evolution of Lithium ® Investor Presentation August 2017 1
Slide 2: Disclaimer
2 Disclaimer For personal use only Summary information: This document has been prepared by Neometals Ltd (“Neometals” or “the Company”) to provide summary information about the Company and its associated entities and their activities current as at the date of this document. The information contained
Slide 3: For personal use only
3 For personal use only + = + =
Slide 4: Investment Thematic – Conservative Exposure to Energy Storage Revolution
Investment Thematic – Conservative Exposure to Energy Storage Revolution For personal use only 8X Growth Needs +3X Lithium 4
Slide 5: Focus on Li-Ion Battery Commodities
Focus on Li-Ion Battery Commodities For personal use only 5
Slide 6: For personal use only
6 For personal use only + = + =
Slide 7: Our Positions in the Supply Chain
Our Positions in the Supply Chain For personal use only + = 7
Slide 8: Downstream processing adds value
Downstream processing adds value For personal use only + = 8
Slide 9: Mt Marion Lithium Operation
Mt Marion For personal use only Lithium Operation Neometals 13.8% through Reed Industrial Minerals Pty Ltd + = 9
Slide 10: World's largest lithium concentrator
World’s largest lithium concentrator For personal use only + = 10
Slide 11: Globally Significant Operation – 400kt concentrates pa
Globally Significant Operation – 400kt concentrates pa (~50kt LCE) For personal use only JORC Resource 77.8Mt @ 1.37% Li2O* 2HFY17 Shipments 116,000 dmt 1HFY18 EBITDA A$72M** (100% basis) C1 costs A$369/t CIF (~US$290/t) Total costs A$460/t CIF (~US$360/t) Leading BOO Provider Complete
Slide 12: Downstream processing: WA-based LiOH Project
For personal use only Downstream processing WA-based LiOH Project Neometals 100% Offtake Option for ~50kt spodumene concentrates
Slide 13: Secure LiOH supply for the West
Secure LiOH supply for the West For personal use only Battery makers users want LiOH from spodumene converted outside China 8X Growth
Slide 14: Commercialisation Plan
Commercialisation Plan For personal use only • Local plant to minimise transport from Mt Marion 7t spodumene concentrate needed for 1t of LiOH • Utilise local natural gas, sulfuric acid and workforce • Conventional flowsheet -Remove technology risk – speed to market Vendor Lump-sum FEED Study Test w
Slide 15: Downstream processing: Lithium Titanate R&D
For personal use only Downstream processing Lithium Titanate R&D Neometals 100% + =
Slide 16: Superior Anode Material for EV
Superior Anode Material for EV For personal use only + = 16
Slide 17: Research & Development Plan
Research & Development Plan For personal use only Produced Cycle testing Cycle testing Cycle testing LTO at in coin-cell in commercial in larger CSIRO Li-ion battery pouch-cell format (18650) in USA Li-ion battery Li-ion battery* Q2 CY17 Q2 CY17 Q3 CY17 Q4 CY17 (*) Subject to Board Approval + =
Slide 18: Intellectual Property Portfolio
For personal use only Intellectual Property Portfolio + =
Slide 19: Our Approach
Our Approach For personal use only • R&D Projects must : • address real market opportunity, • create a sustainable competitive advantage • Have strong business case • Conduct Engineering Cost Studies asap to not waste time/money + = 19
Slide 20: Downstream processing: Direct Extraction from Brine
For personal use only Downstream processing Direct Extraction from Brine 100% Neometals + =
Slide 21: Replace Evaporation with faster, friendlier LiCl recovery process
Replace Evaporation with faster, friendlier LiCl recovery process For personal use only + = 21
Slide 22: Direct Extraction via Adsorption
Direct Extraction via Adsorption For personal use only • Pat pending Titanate adsorbent • Quick load/strip cycle – 30mins • Complete rejection of sodium • High recovery of Lithium 53-79% • Returns water to salar, no evaporation • Next Step - Proof of Scale + = 22
Slide 23: Downstream processing: Direct Conversion to LiOH
For personal use only Downstream processing Direct Conversion to LiOH Neometals 70% Mineral Resources Ltd 30% + =
Slide 24: Patented ELi Process
Patented ELi Process - conversion of LiCl to LiOH from any source For personal use only IP • 1 Granted patents (AU) • 18 Pats pending + = 24
Slide 25: Gamechanger for LiOH from brine production
Gamechanger for LiOH from brine production For personal use only Business model is to licence to existing brine producers in return for royalty stream: • De-risks ELi for own use later • Quicker cashflow • Higher P/E multiple + = 25
Slide 26: Downstream processing: Lithium Battery Recycling
Co For personal use only Downstream processing Lithium Battery Recycling Neometals 50% of IP (3 US Prov. Pats) Exclusive licence to commercialise + =
Slide 27: Li Battery Recycling Rationale
Li Battery Recycling Rationale Co For personal use only Estimated < 5% Recyled Consumer Electronics LCO cathode = 20% Co + = 27
Slide 28: Plant Schematic and Study Results
Plant Schematic Co and Study Results For personal use only Scoping Study Results (± 30% accuracy) • Operating Costs US$4.45/lb Co (US$10k/t) • Spot price US$25/lb Co (US$55k/t) • Capex US$4.5M • Pilot Plant under construction, testwork October 2017 • Can be constructed and commissioned in 42 weeks +
Slide 29: Barrambie Titanium Project
For personal use only Barrambie Titanium Project 100% Neometals + = 29
Slide 30: Problem: Poor Industry Profitability; Solution: Patented Neomet Process
Problem: Poor Industry Profitability Solution: Patented Neomet Process For personal use only • Increasing Confidence • Lowering Costs + = 30
Slide 31: Globally Significant Ti Resource
Globally Significant Ti Resource For personal use only 1,000 RC/Diamond holes to 60 vertical depth, Open all directions 1 2 +150Mt 47Mt @ 3 @34% TiO2 22% TiO2 18% Lac Tio Barrambie* Tellnes * Mineral Resource Estimate (JORC2012) on page 29 + = 31 Sources: Company Reports
Slide 32: Commercialisation Plan
Commercialisation Plan For personal use only Pilot Scale Met Sample Beneficiation Pilot Scale DSO/Toll Drilling and Test work Hydromet Concentrate/ Updated for Neomet/ Test work Offtake and/or Pre-feasibility DSO for Neomet Neomet DFS Study Evaluation Evaluation* Decisions* Q2/3 CY17 Q3 CY17 Q4 CY17
Slide 33: Corporate
For personal use only 33 Corporate + = 33
Slide 34: Snapshot
Snapshot For personal use only Cash at Bank • A$46.5M * Receivables • A$8.5M 30 June 2017 Investments • A$8M Capital Market Cap Management • A$150M @ 27c • A$11.5M dividend in FY17 • 5% Share buyback in progress * Includes $4M of restricted access term deposits + = 34
Slide 35: Executives and Consultants
Executives and Consultants For personal use only Chris Reed Mike Tamlin Jason Carone Yatendra Sharma Mike Spratt CEO COO CFO & Company Secretary Project Manager Project Manager Chris started in the mining Mike has over 35 years Jason . holds a Bachelor of Yatendra holds a PhD in Michael is a Metallu
Slide 36: Investment Proposition
For personal use only 36 Investment Proposition + = 36
Slide 37: Lithium: Cash, cashflow & growth options
Lithium : Cash, cashflow & growth options For personal use only 03 02 Downstream 01 process to LiOH. Licence ELi to + Cashflows from ~A$46.1M Cash plus ~A$16.5M in receivables and 13.8% Mt Marion + brine rock producers. Li-Ion Battery Recycling Project investments + = 37
Slide 38: Technology: developing a diversified portfolio
Technology : developing a diversified portfolio For personal use only 03 02 01 Successful Secure partners Secured Strong Partners for + completion of Pilot Plant for - Li Battery + to commercialise - Brine IP & ELi - Li Battery Neomet Process Recycling Recycling + = 38
Slide 39: Titanium: the big one
Titanium : the big one For personal use only 03 02 01 Commence DFS + Successful completion of + Obtain Strong Partners Completed PFS Pilot Plant to Commercialise + = 39
Slide 40: Thank you
For personal use only Thank you www.neometals.com.au + = 40
Slide 41: Supporting Information
For personal use only 41 SUPPORTING INFORMATION 41
Slide 42: Corporate
For personal use only 42 Corporate + = 42
Slide 43: Experienced Board
Experienced Board For personal use only Steven Cole Chris Reed David Reed Natalia Streltsova Doug Ritchie Chairman Managing Director Non‐Executive Director Non‐Executive Director Non‐Executive Director Steven has 35 years of Chris started in the mining David was a director and Natalia Streltsova is
Slide 44: Long-term Strategy
Long-term Strategy For personal use only 2 cent unfranked div – April ‘16 2 cent unfranked div – Aug ‘16 5% on market buyback + = 44
Slide 45: Tactical Plan – FY18
Tactical Plan – FY18 For personal use only • Negotiate new MSA to improve offtake quality and revenues • Advance local LiOH project with vendor testwork, offtake and partner selection processes. • Licence Dexter and/or ELi to brine producer for royalties • Fast-track evaluation of recycling process
Slide 46: Significant Financial Resources
Significant Financial Resources For personal use only ASX CODE: NMT OTC:RDRUY 18 MONTH SHARE PRICE Last close (7‐8‐2017) A$ 0.29 Shares on issue M 544 60 50 Market capitalisation A$M 157 40 Net Cash (at 30‐6‐2017) A$M 46.1 30 Receivables/Investments A$M 16.5 20 10 0 Jan-16 Apr-16 Jul-16 Oct-16 Jan-1
Slide 47: Operating Structure
Operating Structure For personal use only + = 47
Slide 48: Evolution of our Lithium Business
Evolution of our Lithium Business For personal use only • Commercialise Mt Marion • Evaluating local Conventional Downstream Processing • Co-developed, Evaluated, Patented New ELi® Process • Co-developed, Evaluated, Patent Pending ELi ® for brines • Testing and Evaluating Lithium-Ion Battery
Slide 49: Mt Marion Lithium Operation
Mt Marion For personal use only Lithium Operation Neometals 13.8% through Reed Industrial Minerals Pty Ltd + = 49
Slide 50: Strong Operating Partner
Strong Operating Partner For personal use only Australia’s largest contract minerals processor Operate mine-to-port on BOO basis No upfront capital cost to NMT Minimum production levels (~50ktpa LCE) Fixed rate mining and processing costs + = 50
Slide 51: Mine Production/Guidance
Mine Production/Guidance* For personal use only Notes: • Costs include arms length mining infrastructure service agreements with MRL • RIM went into commercial production on 1 March 2017. The production costs net of sales receipts of 37Kt of spodumene produced pre 1 March 2017 were capitalised in li
Slide 52: Outstanding Offtake Agreement
Outstanding Offtake Agreement For personal use only China’s largest, most diverse lithium producer Life-of-Mine, Take-or-pay Offtake Agreement From 1 July moving to transparent Lithium Carbonate/Lithium Hydroxide linked formula, with floor price protection – US$841/t CIF for SepQ Letter of C
Slide 53: Mineral Resource Estimate
Mineral Resource Estimate Mt Marion Lithium deposit, as at October 2016, for a block cut‐off grade of 0.5% Li2O For personal use only Classification Deposit Tonnes (Mt) Li2O % Fe % Indicated Area 1,2,2W 19.3 1.41 1.08 Area 4 2.0 1.11 0.99 Area 6 7.7 1.29 1.04 Indicated Total 28.9 1.35 1.06 Inferred
Slide 54: Downstream processing: Direct Extraction from Brine
For personal use only Downstream processing Direct Extraction from Brine 100% Neometals + =
Slide 55: Selective LiCl Extraction from Brine
Selective LiCl Extraction from Brine For personal use only + = 55
Slide 56: Selective LiCl Extraction from Brine
Selective LiCl Extraction from Brine For personal use only + = 56
Slide 57: Downstream processing: ELi Process
For personal use only Downstream processing ELi Process™ Neometals 70% Mineral Resources Ltd 30% + =
Slide 58: ELi potentially levels playing field for western hard rock developers
ELi potentially levels playing field for western hard rock developers For personal use only Business model is to deploy/co-invest in partnership with and/or licence to integrated hard- rock developers in return for equity/royalty stream. + = 58
Slide 59: Feasibility Study - Financial Metrics
Feasibility Study - Financial Metrics For personal use only FS Life of Plant (LOP) 20 years Pre-production Capital cost US$ 158 million** [1 Average Annual Pre-tax Net Cashflow US$ 82 million Pre-tax Internal Rate of Return 51% Pre-tax NPV (12% real discount rate) US$ 481 million Payback of capital
Slide 60: Downstream processing: Lithium Battery Recycling
Co For personal use only Downstream processing Lithium Battery Recycling Neometals 50% of IP (3 US Prov. Pats) Exclusive licence to commercialise + =
Slide 61: Closing the loop: Recycle and re-use
Closing the loop:Recycle and re-use Co For personal use only + = 61
Slide 62: Pilot Plant in Construction
Pilot Plant in Construction Co For personal use only + = 62
Slide 63: Commercialisation Plan
Commercialisation Plan Co For personal use only Running Partner/Site Selection Processes in parallel with test work and engineering programs + = 63
Slide 64: Technology Licensing: Neomet Process
For personal use only Technology Licensing Neomet Process Neometals - 25% of sub-licencing royalties + =
Slide 65: Patented Neomet Process
Patented Neomet Process For personal use only Commodity agnostic – developed in Canada for Ni-laterites, in use commercially for treating refractory copper-gold concentrates. Neometals Laboratory in Montreal + = 65
Slide 66: Commercialising technology with leading industry partners
Commercialising technology with leading industry partners For personal use only + = 66
Slide 67: Project Development Phasing
Project Development Phasing For personal use only Laboratory scale set up (above) Pilot scale up (below) + = 67
Slide 68: Barrambie Titanium Project
For personal use only Barrambie Titanium Project 100% Neometals + = 68
Slide 69: Strong demand/supply fundamentals
Strong demand/supply fundamentals For personal use only The titanium pigment industry is 10x as large as the lithium compound industry. Growth = GDP Globally declining grades and quality Cost push price inflation + = 69
Slide 70: Globally Significant Ti Resource
Globally Significant Ti Resource For personal use only + = 70
Slide 71: Dual Track Evaluations
Dual Track Evaluations For personal use only Direct Ship Concentrate Barrambie Geraldton Barrambie Geraldton China - China - Toll Neomet Concentrator China - Toll Ti Pigment Concentrator Ti Pigment + = 71
Slide 72: Evaluating potential for Direct Shipping Ore and Toll-concentration in China
Evaluating potential for Direct Shipping Ore and Toll-concentration in China For personal use only + = 72
Slide 73: Neomet Process: Product Efficiency
Neomet Process: 3 Product Efficiency For personal use only Strong EPC & OEM Alliance + = 73
Slide 74: Why Titanium Hydrolysate?
Why Titanium Hydrolysate? For personal use only + = 74
Slide 75: Mineral Resource Estimate
Mineral Resource Estimate Barrambie Ti‐V deposit, as at September 2015, for a block cut‐off grade of 15% TiO2 For personal use only Density TiO2 V2O5 Fe2O3 Al2O3 SiO2 Classification Zone Oxidation MTonnes (t/m3) (%) (%) (%) (%) (%) Eastern Oxide 18.7 2.82 23.29 0.59 42.93 10.70 16.36 Transition 8.7
Slide 76: Pre-feasibility Study - Financial Metrics
Pre-feasibility Study - Financial Metrics (*) For personal use only Life of Mine (LOM) 19.6 years Pre-production Capital cost A$ 549 million [1 (excluding EPCM and Contingency) Average Annual Pre-tax Net Cashflow A$ 123 million Pre-tax Internal Rate of Return 21% Pre-tax NPV (12% real discount rate)