Reward Minerals Ltd · ASX:RWD
Reward Minerals — Shareholder Meeting (May 2019)
33 slides from Reward Minerals's shareholder meeting presentation, May 29, 2019
Slide 1: Reward Minerals Limited AGM Presentation
REWARD MINERALS Developer of the LIMITED LD Brine SOP Project, the most compelling investment opportunity in the SOP space AGM Presentation 29 May 2019 ASX | RWD www.rewardminerals.com
Slide 2: Forward Looking Statements & Disclaimer
FORWARD LOOKING STATEMENTS & DISCLAIMER This document includes forward-looking statements. When used in this document, the words such as “could”, “plan”, “estimate”, “expect”, “intend”, “may”, “potential”, “should”, and similar expressions are forward-looking statements. Although RWD believes that t
Slide 3: Reward Overview
REWARD OVERVIEW Reward’s flagship is the Lake Disappointment SOP Project in Western Australia: Australia’s Highest Permitting Largest evaporation well Deposit High rate advanced A detailed, average in- Lowest PFS situ brine rainfall completed grade 2018 The Project has the potential to produce in ex
Slide 4: Contents
CONTENTS ►Corporate Snapshot ►LD Project: ►Overview & Metrics ►Current Activities ►Officer Basin Exploration upside ►Conclusions 4
Slide 5: Corporate Snapshot
CORPORATE SNAPSHOT Capital Structure 28 May 2019 ASX:RWD Ordinary Shares on Issue 162.6m Rights and Options on Issue 17.6m Share Price $0.096 Undiluted Market Capitalisation $15.6m Cash & Equivalents ~A$1.6m Undiluted Enterprise Value A$14m Major Shareholders Name Shares (m) % Michael Ruane 54.1 33.
Slide 6: LD SOP Project – Introduction
LD SOP PROJECT – INTRODUCTION An inter-generational project in the making….. ► Largest SOP deposit in Australia ► One of the highest average grades ► Highest evaporation in Australia ► Detailed PFS, attractive economics ► Years of extensive testwork and trials ► Permitting well-advanced ► ILUA execu
Slide 7: Highest Evaporation Rate
HIGHEST EVAPORATION RATE No better location for a brine evaporation operation in Australia LD Project 3
Slide 8: Low Rainfall
LOW RAINFALL No better location for a brine evaporation operation in Australia LD Project 4
Slide 9: LD SOP Project Metrics
LD SOP PROJECT METRICS • At least 400,000 tpa Production • ~9 Mt SOP produced over ~25 years • The PFS abstracted less than 10% of the resource Capital cost • A$345 M, includes indirects and owners costs (+/-20%) • A$451 M, includes contingency & pre-production costs Operating Cost •AISC – A$376/ton
Slide 10: LD SOP Project Metrics - Economics
LD SOP PROJECT METRICS - ECONOMICS • Price: US$500/tonne, FX: AUD/USD: 0.75 Assumptions • Discount Rate: 8% Real • Royalty: State: 3.75%, Martu: 1.25% Margins • Average EBITDA – 45% (~$118 M/year) • Average Cash – 48% (~$122 M/year) • Pre-tax: NPV8% – $518 M, IRR – 19% Returns • Post-tax: NPV8% – $2
Slide 11: LD SOP Project Operations Overview
LD SOP PROJECT OPERATIONS OVERVIEW A$91/t A$102/t Other Opex Costs Closure – A$2/t Martu Royalty – A$7/t Road Maint - A$15/t FOB Cash Cost: Site Services - A$22/t A$344/t (US$258/t) EBITDA Margin: A$105/t ~44.6% @ US$500/t Ex-Works Cost: A$239/t (US$180/t) Source: See References in Compliance Sectio
Slide 12: Conservative Assumptions in PFS
CONSERVATIVE ASSUMPTIONS IN PFS SOP Grade Flow Rates ► PFS Assumption: 10 g/litre ► PFS Assumption: 15 l/sec/km ► Pumping trials: ~13 g/litre ► 15 trenches excavated (20 m – ► Approximately 200 million litres 1 km long) and pumped pumped to date ► Flow rates 6 to >100 l/sec/km 8 Source: See Referenc
Slide 13: Realistic and Deliverable Logistics
REALISTIC AND DELIVERABLE LOGISTICS 866 km from site to Port Hedland A world class port exporting millions of tonnes per year 511 km sealed road to Port Hedland 355 km of existing, frequently used track First 250 km designed in detail from terrain models at +/-100mm accuracy Logistics cost per tonne
Slide 14: Current Activities
CURRENT ACTIVITIES* ► Environmental Permitting: ► Public Consultation: comments received ► Resource Conversion: ► Infill drilling program completed ► Program under review ► Flowsheet Improvements: ► Ongoing R&D ► Pond Trials: ► Evaporation and Seepage ► Crystallisation ► Crude Potash Harvested 10 *
Slide 15: Updated WA EPA Permitting Schedule
UPDATED WA EPA PERMITTING SCHEDULE A thorough, extraordinarily long process…… Feb-19 Mar-19 Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Public exhibition of ERD DWER provided final comments to Reward Reward submits response to submissions DWER reviews response
Slide 16: Officer Basin Potash Exploration
Officer Basin Potash Exploration 12
Slide 17: Introduction
INTRODUCTION Shallow SOP mineralisation is the target ► Gibson Desert, ~400km east of Newman ► Limited oil/gas exploration historically ► Officer, Canning and Amadeus Basins are large Sedimentary Evaporite Basins ► Browne is the host formation for evaporites in the Officer Basin ► Seismic data indic
Slide 18: General Context
GENERAL CONTEXT ► The world’s two largest potash basins which have been mined extensively are located in the Saskatchewan Province of Canada and in the Perm region of Russia ► The giant Elk Point Basin in Saskatchewan contains over 100 billion tonnes potash at depths between 600-1,700m ► MOP product
Slide 19: Gibson Area Context
GIBSON AREA CONTEXT Midway Well & Madley Prospects: Targeting shallow SOP mineralisation ► In the Gibson area of the Western Officer Basin over 250,000km2 of the Browne Formation occurs at shallow depth and outcrops in numerous locations Midway Well ► Erosion of the outcropping Browne 5,561km2 Evapo
Slide 20: Officer Basin Stratigraphy
OFFICER BASIN STRATIGRAPHY Evaporite bearing Browne Formation in the Western Officer Basin is the target Haines, 2012. GSWA Simplified stratigraphy and petroleum systems of the Officer Basin 16
Slide 21: Midway Well Cross Section
MIDWAY WELL CROSS SECTION Targeting shallow SOP mineralisation ► Tenement coverage over Midway Well Prospect – 5,561km2 ► The top of the Browne Formation has been eroded away, offering shallow drill targets ► Three interpreted salt rupture zones have been interpreted from seismics – potentially Brow
Slide 22: Madley Prospect Cross Section
MADLEY PROSPECT CROSS SECTION Targeting shallow SOP mineralisation ► Tenement coverage over Madley Prospect – 3,035km2 Legend ► In the area, the Browne Formation is generally deep (>1,000m) ► However, there is evidence of salt-rupture/thrusted salt at or near the surface ► These uplifted zones are t
Slide 23: Madley Prospect Analogy
MADLEY PROSPECT ANALOGY Targeting shallow SOP mineralisation ► The Madley Prospect consists of a series of Diapiric structural targets ► These Diapiric structures are analogous to other producing potash deposits in the rest of the world, such as the Zechstein Potash Deposits in Germany (below left)
Slide 24: Exploration Approach
EXPLORATION APPROACH Targeting shallow SOP mineralisation ► Midway Well Prospect: ► Drill Northern Evaporite exposure zone ► Drill Southern Browne Formation outcrops Top of Browne Fm Top of Salt, ► Madley Prospect: not analysed ► Analyse available GSWA “salt” cores to assess regional potash potentia
Slide 25: Conclusions
CONCLUSIONS Reward: a unique ASX potash company: Its flagship LD brine SOP Project is ► technically robust ► Conservative PFS conducted to exacting standards ► Independently reviewed Flowsheet ► Advanced stage of permitting ► … and economically attractive, with ► Scope to improve economics on multip
Slide 26: Appendices
\ - APPENDICES IM site
Slide 27: Globally Significant Tier 1 Resource
GLOBALLY SIGNIFICANT TIER 1 RESOURCE 153 Mt Indicated & Inferred Drainable SOP Resource – Australia’s largest Assigned Nominal Dimensions (m) Volume Area Specific SOP Brine Drainable Unit Yield Hydrostratigraphic Unit Grade SOP Symbol Effective 3 6 2 6 (kg/m3) (Mt) Top Base Thick. (m x 10 ) (m x 10
Slide 28: PFS Results – Capital Costs
PFS RESULTS – CAPITAL COSTS Initial and Sustaining Capital Costs (LOM Real) AUD M Production - Trenches and Ponds 57.6 Process Plant 73.2 Infrastructure 108.8 Site Support Temporary Services 2.9 Construction Costs 59.2 Subtotal 301.7 Indirect Costs (EPC, Consultants, Commissioning) 20.0 Owners Costs
Slide 29: LD – Superior Grade and Evaporation
LD – SUPERIOR GRADE AND EVAPORATION Grade and evaporation have a direct impact on production 40 Typical Potassium Target Concentration LD Grade & Evaporation 30 Potassium Concentration – g/l 13.4 g/l SOP = 8 g/l K 20 Goldfields Evaporation & Lower Grade* ~8 g/l SOP = ~3.6 g/l K 10 100 200 300 400 50
Slide 30: Operational and Cost Implications
OPERATIONAL AND COST IMPLICATIONS To match output, lower grade operations need to: Abstract/Pump More Brine Build Bigger Ponds National Geographic Bigger ponds, more seepage, with lower evaporation making it worse: They will Suffer More Seepage Leading to higher costs Capex & Opex Costs Decreasing g
Slide 31: Exploration Capability
EXPLORATION CAPABILITY Reward-owned Hanjin Rig in operation 27
Slide 32: Compliance Statements
COMPLIANCE STATEMENTS Competent person statements: This information in this report that relates to Resource Estimation and hydrogeology is based on information compiled by Mr Robert Kinnell, a hydrogeologist and Competent Person who is a Member of The Australian Institute of Mining and Metallurgy an
Slide 33: Reward Minerals Ltd contact details
Reward Minerals Ltd 159 Stirling Highway Nedlands, WA, 6009 (T): +61 8 9386-4699 (W): www.rewardminerals.com