Arafura Rare Earths Limited · ASX:ARU
Arafura Rare Earths — Arafura Resources — New World Metals Conference 2019
28 slides from Arafura Rare Earths's conference presentation, Dec 12, 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 December 2019 New World Metals Conference
Slide 2: Important Notice – Disclaimer
Important Notice – Disclaimer 2 For personal use only 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: Corporate Snapshot
Corporate Snapshot 3 For personal use only Capital Structure ASX Code ARU ASX Share Price (30 Sept) $0.086 Shares on Issue 1,055m Market Capitalisation (30 Sept) $90.7m 12 Month Liquidity $58.5m 6 Month Liquidity $52.5m Cash (30 Sept*) $26.4m Debt Nil Enterprise Value (30 Sept*) $64.3m ▪ Nolans worl
Slide 4: NdPr Market Opportunity
For personal use only 4 NdPr Market Opportunity Arafura Resources Limited (ASX:ARU) December 2019
Slide 5: NdPr Market Opportunity
NdPr Market Opportunity 5 For personal use only ▪ 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 de
Slide 6: NdPr Magnet Power Efficiency & Deprival Value
NdPr Magnet Power Efficiency & Deprival Value 6 For personal use only Modelled effect of increase in NdPr price, Permanent Magnet (PM) vs Induction Motor and incremental Li-ion Battery Pack ▪ Chevrolet Bolt: 150 kW permanent magnet (PM) motor with 60 kWh lithium-ion battery pack.1 ▪ PM motor cost ba
Slide 7: Rare Earths are now in the Mainstream Press
Rare Earths are now in the Mainstream Press 7 For personal use only Arafura Resources Limited (ASX:ARU) December 2019
Slide 8: China's Evolving Integrated NdPr Supply Chain – Enables 2025 EV Strategy
China’s Evolving Integrated NdPr Supply Chain – Enables 2025 EV Strategy 8 For personal use only Ore Concentrate Oxide Metal Alloy Magnet Component EV 2010 95% 95% 90% 80% 85% 80% 2018 70% 70% 85% 90% 90% 90% Market x 10x 100x 1000x Value ▪ China is the only country with a fully integrated Mine to M
Slide 9: Rest of World Alternative Supply Chain
Rest of World Alternative Supply Chain 9 For personal use only Ore Concentrate Oxide Metal Alloy Magnet Component EV ▪ European auto industry employs 13.8 million people which equates to 6.1% of the EU workforce and 11.4% of all manufacturing jobs (“Electric cars sparks jobs fears in Germany’s auto
Slide 10: Nolans Project
For personal use only 10 Nolans Project Arafura Resources Limited (ASX:ARU) December 2019
Slide 11: Definitive Feasibility Study (DFS) Completed
Definitive Feasibility Study (DFS) Completed 11 For personal use only ▪ DFS completed February 2019 confirming Nolans as a world class NdPr project ▪ CAPEX US$726m, low OPEX producer at US$25.94/kg NdPr ▪ Long-life asset – 23-year mine life based on Ore Reserves only, with potential to extend produc
Slide 12: 100% Australian Domiciled in the NT
100% Australian Domiciled in the NT 12 For personal use only ▪ Ore to oxides at a single site ▪ DFS includes fully-costed permanent disposal and rehabilitation of tailings and process residues at site ▪ Environmental approvals secured ▪ Product traceability and waste management certainty Arafura Res
Slide 13: Licence to Operate – Sustainable Supply
Licence to Operate – Sustainable Supply 13 For personal use only Extensive community and stakeholder consultation Waste management plan tailings and residue facility Assessing impact from mining, extraction and transport corridor Surface water and groundwater management plans Biodiversity studies on
Slide 14: Project Implementation
For personal use only 14 Project Implementation Arafura Resources Limited (ASX:ARU) December 2019
Slide 15: Product Offtake
Product Offtake 15 For personal use only Proportion of revenue for rare earth products only ▪ Customer engagement targeted at NdPr users not aligned with Made In China 2025 strategy o Japan – NdFeB magnet manufacturers ▪ U.S. emerging as an offtake opportunity o Europe & Korea – automotive component
Slide 16: Project Funding Strategy
Project Funding Strategy 16 For personal use only ▪ Arafura looking to secure US$726m to meet CAPEX requirements for 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 e
Slide 17: Other Activities
Other Activities 17 For personal use only ▪ Drilling and metallurgical work in progress ▪ Potential to increase current mine life of 23 years ▪ Potential to reduce very low estimated OPEX of US$25.94/kg NdPr (lowest amongst peers) even further ▪ Native Title negotiations with Central Land Council (C
Slide 18: Indicative Production Timeline
Indicative Production Timeline 18 For personal use only Arafura Resources Limited (ASX:ARU) December 2019
Slide 19: Thank You
For personal use only Thank You December 2019 New World Metals Conference
Slide 20: Long Life Asset
Long Life Asset 20 For personal use only 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 21: Drilling & Metallurgical Program
Drilling & Metallurgical Program 21 For personal use only ▪ DFS completed in February 2019 included a mine life of 23 years based on Ore Reserves only but includes the costs of mining Inferred Resources within the LOM pit ▪ Targeted drilling and metallurgical program aims to substantially increase t
Slide 22: Drilling & Metallurgical Program
Drilling & Metallurgical Program 22 For personal use only October 2019 – Drilling at Nolans Bore – hole NBDH1105 Northern Territory Senator Sam McMahon inspects drill core at Nolans Bore Drill core sample from Nolans Bore used in flotation variability program October 2019 – Flotation variability tes
Slide 23: DFS Completed February 2019
DFS Completed February 2019 23 For personal use only Refer ASX announcement 7 February 2019: Nolans Project Definitive Feasibility Study Arafura Resources Limited (ASX:ARU) December 2019
Slide 24: Process Flowsheet Supported by Successful Pilot
Process Flowsheet Supported by Successful Pilot 24 For personal use only Arafura Resources Limited (ASX:ARU) December 2019
Slide 25: Flowsheet Piloting Program
Flowsheet Piloting Program 25 For personal use only ✓Phase 1 Beneficiation 5,000 kg high- phosphate concentrate >82% NdPr, >90% ✓Phase 2 P2O5 recovery ✓Phase 7 Phosphate Rare Earth Extraction Beneficiation Pilot Plant Separation Fertilizer grade phosphoric acid Q4 CY2019 3% TREO losses to
Slide 26: Supply & Demand Balance
Supply & Demand Balance 26 For personal use only ▪ 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 27: Experienced Board
Experienced Board 27 For personal use only 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 28: Experienced Management
Experienced Management 28 For personal use only RICHARD BRESCIANINI PETER SHERRINGTON GENERAL MANAGER EXPLORATION & CHIEF FINANCIAL OFFICER & COMPANY BUSINESS DEVELOPMENT SECRETARY Richard has over 30 years’ experience in the minerals Peter commenced employment with Arafura in 2008 as industry. He w