Arafura Rare Earths Limited · ASX:ARU
Arafura Rare Earths — Arafura Resources — Investor Presentation (May 2019)
30 slides from Arafura Rare Earths's investor presentation, May 15, 2019
Slide 1: Emerging as Australia's Next NdPr Producer
For personal use only Arafura Resources Limited (ASX:ARU) “Emerging as Australia’s Next NdPr Producer” May 2019 Investor Presentation
Slide 2: Important Notice – Disclaimer
Important Notice – Disclaimer For personal use only 2 This presentation has been prepared by Arafura Resources Limited (Arafura, Arafura Resources or the Company) and is of a summary form only and therefore contains general background information which may not be complete. It should be read in conju
Slide 3: Investment Highlights
Investment Highlights For personal use only 3 Arafura Resources Limited ASX listed company developing its 100% owned Nolans Rare Earths (NdPr) Project located in the Rare earths in corporate spotlight Northern Territory, Australia. Wesfarmers (ASX:WES, Mkt Cap $40bn) recently announced condition
Slide 4: Corporate Snapshot
Corporate Snapshot For personal use only 4 Capital Structure ASX Code ARU ASX Share Price (13 May 19) $0.05 Shares on Issue 781m Market Capitalisation $39.0m 12 Month Liquidity $13.8m Cash $7.9m Debt Nil Enterprise Value $31.1m Board Position JP Morgan 18% Nominees Mark Southey Chairman ECE Nolans I
Slide 5: Emerging as a Fully Integrated Australian Producer
Emerging as a Fully Integrated Australian Producer For personal use only 5 Portfolio of Australian assets Building long term relationships o 100% ownership of Nolans Rare Earth Project o Key target markets identified o Processing plant to be built in Australia o Non‐binding offtake agreements fo
Slide 6: NdPr Forecast Puts Arafura in the "Zone"
NdPr Forecast Puts Arafura in the “Zone” For personal use only 6 NdPr Oxide China Domestic US/ kg & Nolans 250 200 150 100 Roskill 2020‐2030 NdPr Price Forecast Range US$66kg‐US$90kg 50 0 5/05/2010 5/05/2011 5/05/2012 5/05/2013 5/05/2014 5/05/2015 5/05/2016 5/05/2017 5/05/2018 NdPr Oxide China Domes
Slide 7: Offtake and Project Funding Discussions Underway
Offtake and Project Funding Discussions Underway For personal use only 7 Offtake agreements to underpin project funding Customer engagement targeted at NdPr users not aligned with China 2025 strategy Japan – NdFeB magnet manufacturers Europe & Korea – automotive OEMs and wind turbine makers
Slide 8: 100% Australian Domiciled Project
100% Australian Domiciled Project For personal use only 8 Tailings and process residues permanent disposed at site. Product traceability and waste management certainty. Stuart Highway is 10 km east. DFS includes fully costed permanent disposal and Alice Springs railyard, airport and other
Slide 9: Key Government Approvals Secured
Key Government Approvals Secured For personal use only 9 NT Environment Protection Authority (EPA) Recommends Environmental Approval “The NT EPA considers that …… the Project can be managed in a manner that ….. avoids significant or unacceptable environmental impacts and risks.” Assessment completed
Slide 10: DFS Completed February 2019
DFS Completed February 2019 For personal use only 10 23 year mine life 4,357 tonnes NdPr p.a. EBITDA A$377m p.a. Ultra low OPEX of US$25.94/kg NdPr Capital payback in year 5 Highly leveraged to NdPr price Refer ASX announcement 7 February 2019: Nolans Project Definitive Feasibility Study Arafura Res
Slide 11: Strong News Flow
Strong News Flow For personal use only 11 Native Title Agreement, Mining Lease and Water Licence. Progress for product offtake agreements and project funding. Subject to funding, accelerated activities will target; drilling results, early contractor involvement appointment, securing second han
Slide 12: Contact
For personal use only Contact: Level 3, 263 Adelaide Terrace Perth, WA, 6000, Australia T: +61 8 6210 7666 E: arafura@arultd.com May 2019 Investor Presentation
Slide 13: Appendices
For personal use only 13 Appendices Arafura Resources Arafura Resources Limited (ASX:ARU) Limited (ASX:ARU) May 2019
Slide 14: Experienced Board
Experienced Board For personal use only 14 MARK SOUTHEY CHRIS TONKIN NON‐EXECUTIVE DIRECTOR NON-EXECUTIVE DIRECTOR Mark Southey has previously held senior executive Chris Tonkin has over 35 years’ experience as a senior positions with Honeywell and ABB both in Australia and business executive with a
Slide 15: Experienced Management
Experienced Management For personal use only 15 RICHARD BRESCIANINI PETER SHERRINGTON GENERAL MANAGER EXPLORATION & CHIEF FINANCIAL OFFICER & COMPANY DEVELOPMENT SECRETARY Richard has over 30 years’ experience in the minerals Peter commenced employment with Arafura in 2008 as industry. He worked wit
Slide 16: NdPr Market Opportunity
For personal use only 16 NdPr Market Opportunity Arafura Resources Arafura ResourcesLimited (ASX:ARU) Limited (ASX:ARU) May 2019
Slide 17: NdPr Market Opportunity
NdPr Market Opportunity For personal use only 17 Underlying demand for NdFeB magnets across all applications is forecast to grow by 6% p.a. over the period to 2030 NdFeB demand growth for EV applications is more dramatic and forecast to grow by 24% p.a. Supply‐demand balance achieved through d
Slide 18: NdPr Magnet Substitution - EV
NdPr Magnet Substitution ‐ EV For personal use only 18 Modelled effect of increase in NdPr price, NdFeB Magnet v Induction Motor and incremental Li‐ion battery pack Chevrolet Bolt: 150 kW NdFeB magnet $3,000 motor with 60 kWh lithium‐ion battery pack.1 $2,500 NdFeB magnet motor cost based on US$
Slide 19: Supply & Demand Balance
Supply & Demand Balance For personal use only 19 China continues to dominate the global supply chain being the world's largest producer accounting for about 80% of NdPr for global NdFeB magnet production Supply reforms, industry consolidation and higher environmental standards will constrain Chi
Slide 20: Favourable NdPr Pricing Outlook
Favourable NdPr Pricing Outlook For personal use only 20 Historical NdPr Oxide Price 80% of Nolans revenue derived from NdPr oxide New supply pipeline will not be sufficient to meet demand EV drivetrains rely on high quality and high efficiency NdFeB magnets Roskill forecast a tight market a
Slide 21: Nolans Project
For personal use only 21 Nolans Project Arafura Resources Arafura ResourcesLimited (ASX:ARU) Limited (ASX:ARU) May 2019
Slide 22: Nolans DFS Complete
Nolans DFS Complete For personal use only 22 Confirms Nolans as a world class NdPr project Annual NdPr production 4,357 tonnes p.a. Ultra‐low cost producer at US$25.94/kg NdPr Robust economics with average EBITDA A$377m p.a., NPV10 A$729m, IRR 17.43% Highly leveraged to NdPr (96% of RE rev
Slide 23: Capital Cost Breakdown & NPV Sensitivity
Capital Cost Breakdown & NPV Sensitivity For personal use only 23 Key Sensitivities Refer ASX announcement 7 February 2019: Nolans Project Definitive Feasibility Study Arafura Resources Limited (ASX:ARU) May 2019
Slide 24: Long Life Asset
Long Life Asset For personal use only 24 RESOURCES TONNES (m) RARE EARTHS TREO % PHOSPHATE P2O5 % NdPr Enrichment % Measured 4.9 3.2 13 26.1 Indicated 30 2.7 12 26.4 Inferred 21 2.3 10 26.5 TOTAL 56 2.6 11 26.4 As announced on 7 June 2017. 1.0% TREO cut-off grade. Numbers may not compute exactly due
Slide 25: Drill & Metallurgical Program
Drill & Metallurgical Program For personal use only 25 DFS completed in February 2019 included a mine life of 23 years based on reserves only but includes the costs of mining inferred resources within the LOM pit. Targeted drill and metallurgical program aims to substantially increase the curren
Slide 26: Process Flowsheet Supported by Successful Pilot
Process Flowsheet Supported by Successful Pilot For personal use only 26 Arafura Resources Limited (ASX:ARU) May 2019
Slide 27: Technology Program
Technology Program For personal use only 27 Phase 1 Beneficiation 5,000 kg high‐ phosphate concentrate Phase 2 >82% NdPr, >90% Phosphate Phase 7 P2O5 recovery Extraction Rare Earth Merchant grade Beneficiation Pilot Plant Separation phosphoric acid Design has suitable for advanced fertilizer
Slide 28: Project Implementation
For personal use only 28 Project Implementation Arafura Resources Arafura ResourcesLimited (ASX:ARU) Limited (ASX:ARU) May 2019
Slide 29: Project Funding Strategy
Project Funding Strategy For personal use only 29 Arafura looking to secure a A$1,146m(1) in new funding to execute the Nolans Project Potential sources of funding include equity, debt, JV and/or project selldown with a strategic investor DFS completion and environmental approval are critical
Slide 30: Indicative Production Timeline
Indicative Production Timeline For personal use only 30 Estimates of times are indicative only and are subject to change Arafura Resources Limited (ASX:ARU) May 2019