Iluka Resources Limited · ASX:ILU
Iluka Resources — AJM 14th Annual Mineral Sands Conference 2014
20 slides from Iluka Resources's conference presentation, Mar 4, 2014
Slide 1: AJM 14th Annual Mineral Sands Conference
AJM 14th Annual Mineral Sands Conference Dan McGrath Manager Eastern Operations March 2014
Slide 2: Agenda
Agenda 1. Iluka’s Mineral Sands Operations Overview 2. Exploration Update 3. Project Development 4. Competitiveness and Challenges of new projects 2
Slide 3: Company Overview
Company Overview • Principal objective: create and deliver value for shareholders • Market capitalisation: ~$4 billion • Strong balance sheet with financial flexibility • Royalty income from Mining Area C iron ore (BHPB), Western Australia • Market development continuing through the cycle • Corporat
Slide 4: 2013 Key Industry Features
2013 Key Industry Features • Low cycle business conditions – globally uneven zircon demand – pigment industry adjustments flow through to low demand for rutile / synthetic rutile • Significant year-on-year decline in mineral sand prices, particularly TiO2 products • Iluka operations flexed – low cap
Slide 5: 2013 Key Features
2013 Key Features • Cash conservation focus – lower total cash production costs (reduced 36% year-on-year) – low capital expenditure while preserving project development pathways • Non-cash adjustments of $41 million (after tax) – technical success consequence – old equipment now not required in min
Slide 6: Production Flex – Zircon & High Grade TiO2
Production Flex – Zircon & High Grade TiO2 52% 67% reduction reduction 6
Slide 7: Cash Conservation Focus
Cash Conservation Focus 40% reduction 63% reduction Relates to ~ $200m to ~$250m average p.a. sustaining and growth capital expenditure, which is both an historical average and expectation for the company’s 2014-2018 corporate planning cycle. The $200m level shown on the chart. 7
Slide 8: Iluka Operational Overview
Iluka Operational Overview • Production flexibility • Approximately 800 employees • 10 years reserve cover; resources ≈ 6 times reserves • Operations in Australia and United States, sales offices globally distributed JORC Status (December 2013) Ore (Mt) HM In-Situ (Mt) Rutile (%) Zircon (%) Ilmenite
Slide 9: Mineral Sands Regional Overview
Mineral Sands Regional Overview Region (Assets) Capacity Rutile / SR Zircon Ilmenite #Plants/Trains 2014 (rated input) (ktpa) (ktpa) (ktpa) Murray Basin Concentrating 900tph RHF 2 1 Idle Hamilton MSP 700ktpa HMC 1 230 200 150 80% Util Perth Basin Concentrating 2300tph 4 Idle MSP 2100ktpa HMC 3 200 3
Slide 10: Mineral Sands Operational Overview
Mineral Sands Operational Overview • Market and operational flexibility created through Integration across regions 10
Slide 11: Flexible Production Capability
Flexible Production Capability Production and product optionality through the cycle Demand Strong Re-start SR3 New projects (Eucla Eneabba) Eucla satellites (SR ilmenite) New rutile source EPP Expand J-A capacity High grade JA +TIO2 +ZIRCON Maximise MB production Re-start SR1 Increase MSP feed Draw
Slide 12: Continued Improvement in Safety Performance
Continued Improvement in Safety Performance Total Recordable Injury Frequency Rate (TRIFR) Lost Time Injury Frequency Rate (LTIFR) 16 15.1 14 12 10.5 Frequency Rate 10 8 6 4.6 4 3.1 1.9 2 0.3 0 2011 2012 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 • 63% reduct
Slide 13: Iluka's Approach
Iluka’s Approach • Focus on shareholder returns through the cycle • Flex asset operation in line with market demand • Continue market development through the cycle • Preserve/advance mineral sands growth opportunities • Maintain a strong balance sheet • Act counter-cyclically where appropriate 13
Slide 14: Exploration – Australia
| | G Exploration — Australia un, Legend [) ttuka Tenure Northern Territory Queensland Western Australia South Australia 14
Slide 15: Exploration – a platform for Growth
Exploration – a platform for Growth • $22million expenditure in 2013 • 50 people • 66,000 km2 tenements held in Australia • Internal drilling capability • Australia: – >30,000m on greenfield targets in Eucla Basin 2013 – Brownfield drilling around Atacama – >20,000m greenfield drilling in the Murray
Slide 16: Mineral Sands Project Development
Mineral Sands Project Development Project Location Characteristics Definitive Feasibility Study West Balranald Murray Basin, NSW • High grade rutile, zircon, ilmenite • Next planned mine development in Murray Basin • ~ 8 year mine life Cataby Perth Basin, WA • Chloride ilmenite with associated zirco
Slide 17: Competitiveness of New Projects
Competitiveness of New Projects • Market Segmentation – Assemblage and quality – Demand factors • No recent Tier 1 resource discoveries – Reserve depletion of older, formerly high quality ore bodies – Positioning the new project on the cost curve – Sensitivity to the cycle • Australian Factors – For
Slide 18: Challenges of New Projects
Challenges of New Projects • Ramping Up throughput, quality and recovery – On top of our game • Hydrology – Shifting technical focus for Iluka, – Productivity and sustainability driven • Sustainability Outcomes and our “Licence to Operate” – New operations to meet the embedded management standards –
Slide 19: Summary
Summary • 2013 was a challenge for the heavy minerals industry • Flexibility to manage the cycle • Exploration targets have broadened • Keeping the project pipeline full • Positioning projects on the curve 19
Slide 20: Iluka Resources Limited
Iluka Resources Limited www.iluka.com For more information, contact: Robert Porter, General Manager Investor Relations & Corporate Affairs robert.porter@iluka.com +61 3 9225 5008 / +61 (0) 407 391 829 20
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