Metro Mining Limited · ASX:MMI
Metro Mining — Zurich Investor Conference (February 2018)
32 slides from Metro Mining's conference presentation, Feb 20, 2018
Slide 1: Corporate Update
Corporate Update February 2018 1
Slide 2: Investment Highlights
Investment Highlights 1 Bauxite Hills construction program complete. Mining Operations on schedule to start April ‘18 2 Simple DSO project well located in Cape York with significant competitive advantage 3 Compelling economics, high margin, long life mine First 4 years of sales underpinned by a firm
Slide 3: Corporate Snapshot
Corporate Snapshot Capital Structure Share Price $0.35 Share Price (20-Feb-18) $0.32 $0.33 $0.31 Shares on Issue 1,286M $0.29 $0.27 Market Cap $411M $0.25 Options Unlisted 41.6M $0.23 $0.21 $0.19 Cash (31-Dec-2017) $19.0M $0.17 $0.15 Debt Facilities (drawn & undrawn) $39.6M $0.13 Enterprise Value $4
Slide 4: Achievements & Value Platform
Achievements & Value Platform ▪ Metro has completed several value adding milestones in 2017 to be primed for Q2 2018 production 1 4 Incorporated Gulf assets Binding Sales Agreement for 7Mt. Project Scale Expanded Staged development Post tax NPV10 of $601m & IRR of 81% ✓ Customer Base Growing
Slide 5: Bauxite Hills Mine Snapshot
Bauxite Hills Mine Snapshot Location Key Statistics 1 Ownership: Metro (100%) Location: Cape York, Qld Project Overview Commodity Bauxite Product Type Direct Shipping Ore Contained Mineral: Reserves 92.2Mt1 Resources 144.8Mt1 Mine Type Surface mining Status EA & MLs Granted, construction compete Fir
Slide 6: Simple DSO Project
Simple DSO Project Operational simplicity and specialist mining and transhipment contractors enables easy to manage operations Dry season only operating negates risk of weather impact Site location, geological setting and layout provides low Q2 operating costs Clear vegetation & remove overbur
Slide 7: Compelling Economics
Compelling Economics* High Margin Low Capex Avg. LOM OPEX1,2 vs. Avg. LOM Price Received (CIF) CAPEX vs. Avg. LOM EBITDA ~43% margin Payback within 1.7 years $61/WMT $73m $145m Expansion $35/WMT $37m Capital Initial Capex 3 $36m Avg. Opex Price Capex Avg. LOM EBITDA *ASX Release 15 Mar 2017 | Me
Slide 8: Strong Cost Curve Positioning
Strong Cost Curve Positioning 2nd quartile cost curve positioning provides attractive long term competitive advantage China Seaborne Bauxite Supply Cost Curve 2019 – Value-in-use Adjusted US$/Dmt (CFR) 1St Quartile 2nd Quartile 3rd Quartile 4th Quartile US$/DMT Source: CM Group Mt 0.0 5.0 10.0 15.
Slide 9: Competitive Advantage
Competitive Advantage ▪ Location, Location, Location ▪ Metro’s low cost shipping is a sustainable cost advantage to China relative to competing bauxite producers ▪ Cape York Bauxite is well known in, and well received by the Chinese market ▪ Minimal working capital requirements provided by speed to
Slide 10: Bauxite is the Primary Ore of Aluminium
Bauxite is the Primary Ore of Aluminium Key Ingredient for Manufacturing Aluminium 4-6 tonnes bauxite = 2 tonnes alumina = 1 tonne aluminium Key Bauxite Value Drivers Grade Alumina content ranges from 30% - 65% and silica ranges from 2% - 30% Location Proximity to buyer, supply reliability and sover
Slide 11: Percentage of China Al Capacity in World Total
China vs ROW Primary Aluminium Capacity 2000–2017 (Mtpy) 100% ROW Al Capacity(MT) World Total Al Capacity(MT) China's Al Capacity(MT) 90% Percentage of China Al Capacity in World Total 86% 84% 80% 81% 76% 74% 72% 79.4 70.4 75.3 70% 69% 67.0 62.6 56.5 63% 62% 60% 60% 59% 60% 56% 58% 47.9 56% 41.7 44.
Slide 12: China's 2017 Bauxite Imports
China’s 2017 Bauxite Imports Source: China Customs, CM ▪ Guinea has become the largest supplier to China driven by exports from the Chinese-controlled SMB-WAP ▪ Australia's supply has been steadily growing-up 4.2Mt (20%) in 2017 to 25.5Mt 12 | ASX : MMI | AGM| November 2017
Slide 13: Structural Change in China
Structural Change in China Source: CM Group China’s seaborne bauxite imports are forecast to grow from ~50mtpa Declining Chinese Bauxite Reserve Life Years 60 53 in 2015 to ~150mtpa by 2029 50 *Economic Inventory divided by consumption 50 rate in the year. Domestic Bauxite Imported Bauxite Imported
Slide 14: China Imported Bauxite Demand Forecast
China Imported Bauxite Demand Forecast Source: CM Group 14 | ASX : MMI | Corporate Update | February 2018
Slide 15: Key Market End Users & Off-take
Key Market End Users & Off-take* Overview of Key China End Users and Port Locations – Shandong Province Agreements cover 100% of planned 2018 7 2019 output, and 90% of possible expanded capacity in 2020 and 2021 as proposed in the BFS Wudi Zhanhua Binzhou Binding off-take secured (Xinfa), China’
Slide 16: Key Market End Users & Off-take
Key Market End Users & Off-take* Summary of Xinfa Off-take Summary of SPIC MOU Term 4 years Term 4years Total Tonnage 7Mt Total Tonnage (DMT) 6.5Mt Tonnage 1Mt for yr1 | 2Mt for yrs 2-4 0.5Mt for 2018 | 1.0Mt for 2019 Yearly Tonnage (DMT) Pricing CIF basis 2.0Mt for 2020 | 3.0Mt for 2021 Reference P
Slide 17: Project Construction
Project Construction 17 | ASX : MMI | Corporate Update | February 2018
Slide 18: Project Construction
Project Construction Satellite Image of Project Site Aerial View of Bauxite Hills Accommodation Camp 18 | ASX : MMI | Corporate Update | February 2018
Slide 19: Barge Load-out Facility
Barge Load-out Facility Barge Loading Facility Wet Commissioning 19 | ASX : MMI | Corporate Update | February 2018
Slide 20: Summary – A Compelling Investment
Summary – A Compelling Investment 1 Metro has significant advantages and is backed by leading partners 2 Strong seaborne bauxite fundamentals in China drive positive outlook 3 Recent achievements have delivered platform for value creation 4 Compelling metrics provides significant share price upside
Slide 21: Background Slides
Background Slides 21 | ASX : MMI | Corporate Update | February 2018
Slide 22: Proven Management Team
Proven Management Team ▪ Management has collectively been involved in developing and operating over 30 mines globally. Our strategy is to build and operate mines ▪ Significant bauxite knowledge and expertise, focused on Cape York bauxite operations and product marketing into China Simon Finnis | Man
Slide 23: Board of Directors
Board of Directors Stephen Everett Chemical engineer with 40+ years experience in the resources and construction industries both in Australia and overseas Chairman Formerly Chair of BeMaX Resources, Australian Solomons Gold, JMS Civil &Mining & IronRidge Resources Simon Finnis Mining executive
Slide 24: Supportive Partners
Supportive Partners Metro and Bauxite Hills Mine has attractive strong support from leading product partners and financial investors Economics & Financial Returns Product Quality & Demand Leading Metro’s $39.4M debt facility Globally recognised natural resource lender Specialises in providin
Slide 25: Construction Team
Construction Team Brisbane / Mackay / Gladstone Queensland Feasibility & engineering Civil works Owner’s team project construction management Haul Roads Queensland Townsville Piling works Electrical engineering & design Marine installation Marine infrastructure management N
Slide 26: BFS Summary
BFS Summary Bankable Feasibility Study Highlights* ▪ Completed by MEC Mining in March 2017 ▪ 6Mtpa steady state (initial 2Mtpa) ▪ Contract mining and transhipment ▪ 8 months per year dry season operation (April to Nov) ▪ 5 month construction period Key Results and Assumptions 1 Description Result As
Slide 27: BFS Capital Cost Estimates
BFS Capital Cost Estimates* Capital Cost Item Amount Capital Cost Item Amount Initial Capital Expansion Capital (in years 2 and 3) Integrated Truck dump and screens and Site establishment and haul roads A$3.1M A$13.9M upgraded haul roads Key infrastructure including BLF & camp A$25.8M Transhipment u
Slide 28: BFS Operating Cost Estimates
BFS Operating Cost Estimates* Operating Cost Item BFS LOM Average Mining, haulage and operation of BLF1 A$7.07/t Transhipment activities A$6.71/t Site and administrative costs A$2.65/t Total Operating Costs (ex-royalties and ocean freight) A$16.42/t Royalties A$6.57/t Ocean Freight A$11.71/t Total O
Slide 29: Reserves & Resources
Reserves & Resources* Bauxite Hills – DSO Mineral Resource &Ore Reserve Estimates DSO Bauxite Qualities (Dry Basis) Area Category DSO2 Tonnes (Mt)1 Total Al2O3 (%) Total SiO2 BH1 & BH6 Measured Resource 54.7 50.0 11.9 BH1, BH2 & BH6 Indicated Resource 66.4 49.2 14.5 BH1 & BH6 Inferred Resource 23.7
Slide 30: China Imported Bauxite Demand Forecast
China Imported Bauxite Demand Forecast Chinese refiners better understanding the ViU value proposition – lower import Additional Bx imports at CBIX ~US$50/dmt prices mean higher import volumes Bx imports at CBIX ~$US80/dmt Source: CM Group 30 | ASX : MMI | Corporate Update | February 2018
Slide 31: Regional Exploration
Regional Exploration Metro’s exploration exposure covers >1,800km2 of holdings (including Bauxite Hills) on Cape York All tenements are well located on the lateritic plateaus that host bauxite mineralisation Close proximity to the coast Potential to duplicate Bauxite Hills – internal growth
Slide 32: Disclaimer
Disclaimer FORWARD LOOKING STATEMENTS: Statements and material contained in this presentation, particularly those regarding possible or assumed future performance, production levels or rates, commodity prices, resources or potential growth of Metro, industry growth or other trend projections are, or
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