Argosy Minerals Limited · ASX:AGY
Argosy Minerals — Investor Presentation (November 2018)
23 slides from Argosy Minerals's investor presentation, Nov 30, 2018
Slide 1: Argosy Minerals November 2018
For personal use only November 2018 ASX Code: AGY www.argosyminerals.com.au
Slide 2: Disclaimer
Disclaimer This presentation is for information purposes only. Neither this presentation nor the information contained in it constitutes an offer, invitation, solicitation or recommendation in relation to the purchase or sale of shares in any jurisdiction. This presentation may not be distributed in
Slide 3: Cautionary Statement
Cautionary Statement • The PEA is a preliminary technical and economic study of the potential viability of the Rincon Lithium Project required to reach a decision to proceed with more definitive studies (equivalent to a JORC For personal use only Scoping Study). It is based on preliminary/low-level
Slide 4: Argosy Minerals Overview
Argosy Minerals Overview Rincon Lithium Project located in the world-class “Lithium Triangle” Capital Structure A$ 0.50 For personal use only 0.45 - Located in Salar del Rincon, Salta Province, Argentina Issued Capital 923,496,575 0.40 (ASX:AGY) 0.35 - Successful fast-track development strategy 0.
Slide 5: Fastrack Development Gaining Momentum
Fastrack Development Gaining Momentum Next phase to commercial scale production confirmed with exceptional PEA Results 2019 Argosy continues to build on achievements For personal use only Cash Generation 2017 - 2018 Secure project funding to enable significant increase in production Locking in Val
Slide 6: Proven Chemical Process
Proven Chemical Process Proven Stage 1 process to be upscaled Rincon Project Conceptual Process Flow Sheet The Base Case presented in the PEA is predicated on: For personal use only Actual costs incurred in producing battery grade lithium carbonate – certainty on reagent costs Actual costs incur
Slide 7: PEA Highlights
PEA Highlights Base Case Scenario1 – 10,000tpa Li2CO3 For personal use only CAPEX US$399M IRR 53% US$141M Pre-tax NPV (10% discount rate) Pre-tax 2.1 year payback EBITDA margin 16.5 year ~US$74M 61% mine life Annual pre-tax free cash flow over Annual EBITDA over life-of-mine Producing 10,000tpa Li2C
Slide 8: PEA Scenario Analysis
PEA Scenario Analysis Economic analysis undertaken on six business cases Case i For personal use only Capex US$215.2M - 10,000tpa Capex 1 sold at US$13,000/t, 16.5 year LOM Case ii Capex US$215.2M - 10,000tpa Capex sold at US$15,500/t, 16.5 year LOM Case iii Capex US$274.5M - 15,000tpa Capex sold at
Slide 9: PEA Parameters
PEA Parameters Financial analysis inputs Parameter Parameter For personal use only Notes: Financial analysis input (10,000 tpa cases) (15,000 tpa cases) 1 The US$15,500/t scenario is established as a ‘3-month Annual production rate 10,000tpa 15,000tpa Life of mine 16.5-years 11-years average spot pr
Slide 10: PEA Outcomes
PEA Outcomes Approximate economic analysis summary results For personal use only US$M Long-term forecast price - US$13,000/t US$M 3 - month average price – US$15,500/t 500 80% 700 80% 450 70% 70% 600 400 60% 60% 350 500 50% 50% 300 400 250 40% 40% 300 200 30% 30% 150 200 20% 20% 100 10% 100 10% 50 0
Slide 11: Pre-Development Capital Expenditure
Pre-Development Capital Expenditure Base case scenario 10,000tpa LCE production rate For personal use only Summary of indicative capital expenditure (US$M) Confidence in CAPEX estimates based on Stage 1 & 2 construction experience Process Equipment 39.9 Installation 20.0 Capital cost estimated val
Slide 12: Operating Costs
Operating Costs Indicative process operating cost Breakdown of estimated operating costs: For personal use only 10,000tpa 15,000tpa 357 238 238 159 Production Scenario 230 Production Scenario 287 612 551 95 Labour 113 Annual Operating Cost Annual Operating Cost US$46,448,340 p.a. US$64,635,179 p.a.
Slide 13: Long term supply cost curves for lithium - 2025
Long term supply cost curves for lithium - 2025 Argosy Rincon Lithium Project in the lower end of industry cost curve Lithium industry brine and hard rock total cost curve - 2025 For personal use only Notes on cost curves: • Total cost includes capital repayment and royalty costs USD per LCE tonne (
Slide 14: Rincon Project: Development Milestones
Rincon Project: Development Milestones Unique & proven development strategy to confirm successful chemical process solution only Stage 1 Stage 2 Commercial Stage use Pilot Plant Stage Initial Commercial Stage Industrial scale pilot plant to Option to bypass Stage 2 Large scale full Description perso
Slide 15: Taxation/Fiscal regime
Taxation/Fiscal regime Argentina open for business For personal use only Investment Friendly taxation regime already established, no need to negotiate separate fiscal agreement Corporate income tax at the rate of 30% from 1 January 2018, reducing to 25% from 1 January 2020 VAT is set at 21%, wit
Slide 16: Rincon Project: Location and Infrastructure
Rincon Project: Location and Infrastructure Rincon lies close to infrastructure in Salta Province, a prolific mining jurisdiction For personal use only The Project lies within Salta Province, ~3,700m ASL, serviced by city of Salta with population of ~600,000 The region is known for its high evap
Slide 17: Lithium Market Outlook
Lithium Market Outlook Long-term fundamentals remain sound Benchmark Mineral Intelligence commissioned to provide a Lithium Market Outlook Report (Nov 2018) For personal use only Key Findings - Demand The lithium market is set to grow sharply as the mineral is critical for use in battery technolog
Slide 18: Lithium Market Outlook
Lithium Market Outlook Long-term fundamentals remain sound Key Findings - Supply For personal use only Short/medium term - lithium market in balance to marginal oversupply. However, LCE prices to remain at current market levels Long term – significant supply growth required. Higher LCE prices ne
Slide 19: Lithium Market Outlook
Lithium Market Outlook Long-term fundamentals remain sound Key Findings – Price Outlook For personal use only 19 Source: Benchmark Mineral Intelligence
Slide 20: Lithium Market Outlook
Lithium Market Outlook Long-term fundamentals remain sound Key Findings – Outcomes for Argosy Rincon Project: For personal use only Rincon estimated operating costs at the low end of the industry cost curve Low case forecast long term pricing outlook +180-200%1 higher than Rincon estimated operating
Slide 21: Rincon Lithium Project Upcoming Milestones
Rincon lithium Project Upcoming Milestones Lithium brine project in the ‘Lithium Triangle’ with staged development works well underway Upcoming value-adding milestone works include: For personal use only Finalise Stage 1 off-take agreement - Product samples sent to potential customers - Argosy mai
Slide 22: Conclusion
Conclusion For personal use only Base case scenario1 delivers exceptional returns - Pre tax NPV US$399M (A$554M) - IRR 53% Project has the ability to generate strong annual cash flows – c. US$74M (A$102M) Long life asset 16.5 years with a short 2.1 year payback Cash cost of production at the low end
Slide 23: Contact
For personal use only Jerko Zuvela - Managing Director T +61 8 6188 8181 Level 2, 22 Mount Street PERTH WA 6000 Australia Email: admin@argosyminerals.com.au ASX Code: AGY www.argosyminerals.com.au
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