Iluka Resources Limited · ASX:ILU
Iluka Resources — Shareholder Meeting (May 2008)
64 slides from Iluka Resources's shareholder meeting presentation, May 21, 2008
Slide 1: Iluka 2008 Annual General Meeting
For personal use only Iluka 2008 Annual General Meeting Perth 21 May 2008
Slide 2: Grahame Campbell
For personal use only Grahame Campbell Directorships: • Macro Engineering Council • Worley Parsons Limited • Pacific Hydro Limited Board Committees • Audit and Risk 2
Slide 3: Valerie Davies
For personal use only Valerie Davies Directorships: • One.2.One Communications Pty Ltd (Principal) • Tourism Australia • HBF Health Fund Inc Board Committees: • Remuneration and Nomination (Chairman) 3
Slide 4: Jenny Seabrook
Jenny Seabrook For personal use only Directorships: • Electricity Networks Corporation (Deputy Chairperson) • Westralian Newspaper Holdings Limited • BWA Managed Investments • St Andrew’s Superannuation Services • M.G. Kailis Holdings Board Committees: • Audit and Risk 4
Slide 5: Gavin Rezos
Gavin Rezos For personal use only Directorships: • Albion Capital Partners (Principal) Board Committees: • Remuneration and Nomination 5
Slide 6: John Pizzey
John Pizzey For personal use only Directorships: • Amcor Limited • Alumina Limited Board Committees: • Remuneration and Nomination (Chairman-elect) 6
Slide 7: Donald Morley
Donald Morley For personal use only Directorships: • Alumina Limited (Chairman) • Spark Infrastructure Limited Board Committees: • Audit and Risk (Chairman) 7
Slide 8: Robert Every
Robert Every For personal use only Directorships: • Wesfarmers Limited • Boral Limited Board Committees: • Audit and Risk • Deputy Chairman (Chairman- elect) 8
Slide 9: David Robb
David Robb For personal use only Directorships: • Iluka Resources Limited (Managing Director) • Consolidated Rutile Limited (Chairman) 9
Slide 10: Iluka 2008 Annual General Meeting
For personal use only Iluka 2008 Annual General Meeting
Slide 11: Formal Proceedings of Meeting
For personal use only Formal Proceedings of Meeting 11
Slide 12: Proxies Received for AGM
For personal use only Proxies Received for AGM • Proxies received • 272 million shares • 71% of issued shares 12
Slide 13: Formal Proceedings of the Meeting
For personal use only Formal Proceedings of the Meeting • Financial Statements 13
Slide 14: Chairman's Address
For personal use only Chairman’s Address 14
Slide 15: Iluka's Transition
For personal use only Iluka’s Transition • New, long life, high quality assets • Iluka’s leading market position • Improved returns for the business 15
Slide 16: 2007 Financial Results
For personal use only 2007 Financial Results • Continued reliance on mature ore bodies • Adverse currency movements • Partial currency mitigation from operational and cost initiatives • Currency hedging re-established 16
Slide 17: Iluka's Transition Well Advanced
For personal use only Iluka’s Transition Well Advanced 17
Slide 18: Murray Basin Stage Operational
Iluka’s Transition Well Advanced For personal use only Murray Basin Stage 1 Operational 18
Slide 19: Commitment to Murray Basin Stage 2
Iluka’s Transition Well Advanced For personal use only Commitment to Murray Basin Stage 2 • Capital expenditure of up to $209 million • Opens up resource base of northern Murray Basin • Commissioning in early 2009 • Economic life of Murray Basin beyond 2023 19
Slide 20: Major Recapitalisation Completed
Iluka’s Transition Well Advanced For personal use only Major Recapitalisation Completed • Refinanced and extended bank debt • New syndicated facility of $500 million • Equity raising of $353 million • Market capitalisation of $1.47 billion ¾ net increase of ~$170 million (after new equity) 20
Slide 21: Iluka's Transition Well Advanced
For personal use only Iluka’s Transition Well Advanced • Equity raising to fund Jacinth-Ambrosia project • Suspension of 2007 final dividend • Board approval for Jacinth-Ambrosia project • First production mid 2010 21
Slide 22: Other Areas of Progress
For personal use only Other Areas of Progress • Shareholder Value Creation focus • Increased employee share ownership 22
Slide 23: Iluka 2008 Annual General Meeting
For personal use only Iluka 2008 Annual General Meeting
Slide 24: Board and Governance Matters
For personal use only Board and Governance Matters Director retirements • Valerie Davies • Grahame Campbell • Ian Mackenzie 24
Slide 25: Managing Director's Address
For personal use only Managing Director’s Address 25
Slide 26: Environment, Health and Safety Performance
For personal use only Environment, Health and Safety Performance • LTIFR of 1.7 (Ð 35%) • AIFR of 27 (Ð 17%) • Environmental Incidents • no Level 4 or 5 incidents • Level 2 and 3 incidents Ð 44% • Level 1 incidents Ï 23% • Water consumption Ï 16% • CO2 emissions Ð 6.6% 26
Slide 27: Alignment with Shareholder Objectives
For personal use only Alignment with Shareholder Objectives • Restructuring of short and long term incentives ¾ return on capital ¾ return on equity and Total Shareholder Return (TSR) 27
Slide 28: Rigour and Capital Efficiency
For personal use only Rigour and Capital Efficiency • Focus on Return on Capital (ROC) outcomes • 2007 capital expenditure ~ 50% below budget • Capital efficient approaches – Jacinth-Ambrosia ¾ re-use of wet concentrator ¾ use of spare processing capacity within the Group 28
Slide 29: Reconfigured South West Business
For personal use only Reconfigured South West Business • Truncate mining operations • Regularly review running 2 synthetic rutile kilns based on: ¾ feedstock availability ¾ operating costs ¾ product pricing ¾ return on capital 29
Slide 30: Clear Role for Regions
For personal use only Clear Role for Regions • Regionally focussed management model • Focus on improved ROC in each region • Set targets and define plans to improve unit costs of production 30
Slide 31: Development Plans for Murray Basin Stage and Jacinth-Ambrosia
Development Plans for Murray Basin Stage 2 For personal use only and Jacinth-Ambrosia • Critical opportunities to rebuild production platform • Capitalise on continued demand strength • Delivery risk manageable: ¾ conventional approaches ¾ leveraging existing assets ¾ fabrication and contracting str
Slide 32: Plans to Increase Zircon and Rutile Sales
For personal use only Plans to Increase Zircon and Rutile Sales • Planned increase of high value products • Detailed assessment of supply/demand dynamics • Balanced approach to sales volumes and price 32
Slide 33: Mineral Sands Displays 'Late Cycle' Characteristics
For personal use only Mineral Sands Displays ‘Late Cycle’ Characteristics • Titanium dioxide intensity in China will grow • Zircon to follow a similar trend • Key driver – major urbanisation ¾ China and India’s urban population – 600 million growth forecast by 2030 ¾ BRIC’s1 middle class estimated t
Slide 34: Major Project Funding Requirements 2008 - 2010
For personal use only Major Project Funding Requirements 2008 - 2010 • A$/US$ Trend 2007 – May 2009 1.00 0.95 0.90 AUD/USD 0.85 0.80 0.75 0.70 Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 34
Slide 35: Major Project Funding Requirements 2008 - 2010
For personal use only Major Project Funding Requirements 2008 - 2010 • Successfully refinanced and extended debt facilities • Reasonable terms despite tight debt market conditions 35
Slide 36: Iluka's Future
For personal use only Iluka’s Future • Large, high quality, long life deposits and provinces • Murray Basin Stage 2 planned to commission Q1 2009 ¾ production of 330,000 tpa (average 2009-2012) ¾ economic life beyond 2023 36
Slide 37: Jacinth-Ambrosia, Eucla Basin
For personal use only Jacinth-Ambrosia, Eucla Basin Western Australia South Australia Jacinth-Ambrosia Typhoon Kalgoorlie Tripitaka Dromedary Gulliver’s Ceduna Esperance Heavy Mineral Deposit Adelaide Iluka & JV Tenements Granted Iluka Tenement Applications Eucla Basin 0km 500km 37
Slide 38: Jacinth-Ambrosia
For personal use only Jacinth-Ambrosia • Large – 3.5x 2007 global consumption • High quality – Zircon:TiO2 ratio 10x industry average • Scale – 300ktpa production potential • Long life – 10 years plus mine life • High value products ¾ zircon prices 1.4x TiO2 prices1 ¾ zircon prices 6x chloride ilmen
Slide 39: Jacinth-Ambrosia
For personal use only Jacinth-Ambrosia • Heavy Mineral Concentrate planned to be processed at Narngulu, Western Australia • ~ $60 million investment in plant upgrading • Underpins continued presence in Mid West 39
Slide 40: Mining Area C Iron Ore Royalty
For personal use only Mining Area C Iron Ore Royalty • Unique, low risk exposure to iron ore • Volumes and pricing upside 40
Slide 41: Invest in Exploration to Add to Resource Base
For personal use only Invest in Exploration to Add to Resource Base • Strong reserve and resource position • 11 years reserve coverage • Tenement holding of 92,000 square kilometres • ~ $20 million annual expenditure • Initial exploration for gold near Tropicana discovery in Western Australia • Uran
Slide 42: A Company That Executes Well
For personal use only A Company That Executes Well • Major project delivery • Murray Basin Stage 2 • Jacinth-Ambrosia 42
Slide 43: Strong Zircon and Rutile Sales Growth
For personal use only Strong Zircon and Rutile Sales Growth • New approaches to penetrating growth markets • Marketing plans backed by assessment of: ¾ Pricing and volume trade offs ¾ To achieve shareholder return outcomes • 2008 zircon contractual strategy 43
Slide 44: Stronger Position in Growth Markets
For personal use only Stronger Position in Growth Markets • Largest single supplier of zircon into China but underweight • Established office in China 44
Slide 45: Invest in People, Product and Market Development
For personal use only Invest in People, Product and Market Development • Recruit and retain talent • Develop product offering • Sustained commitment 45
Slide 46: Maintain Mutually Beneficial, Long Term Relationships
For personal use only Maintain Mutually Beneficial, Long Term Relationships • Licence to operate • High environmental and ethical standards • Reliable and price competitive 46
Slide 47: Iluka 2008 Annual General Meeting
For personal use only Iluka 2008 Annual General Meeting
Slide 48: Chairman's Address continued
For personal use only Chairman’s Address continued 48
Slide 49: 2008 Full Year Earnings Guidance
For personal use only 2008 Full Year Earnings Guidance 2008 NPAT Guidance – range of $10 million to $20 million - includes NPAT from the Narama sale of $30 million Based on the following: • achieving planned sales • average A$/US$ spot exchange rate of 90.00 cents (2007: 83.90 cents) NPAT sensitivit
Slide 50: Iluka 2008 Annual General Meeting
For personal use only Iluka 2008 Annual General Meeting
Slide 51: Shareholder Questions
For personal use only Shareholder Questions 51
Slide 52: Ordinary Resolutions: Election of Directors
For personal use only Ordinary Resolutions Election of Directors 52
Slide 53: Election of Director
For personal use only Election of Director • Resolution 1 – Election of Ms Jenny Seabrook 53
Slide 54: Election of Director
For personal use only Election of Director • Resolution 1 – Proxies Received For: 269.2 million Against: 235,756 Abstain: 137,246 54
Slide 55: Re-election of Director
For personal use only Re-election of Director • Resolution 2 – Re-election of Mr Donald Morley 55
Slide 56: Re-election of Director
For personal use only Re-election of Director • Resolution 2 – Proxies Received For: 269.1 million Against: 253,018 Abstain: 193,594 56
Slide 57: Grant of Share Rights
For personal use only Grant of Share Rights • Resolution 3 – Grant of Share Rights to Mr David Robb as a Retention Incentive 57
Slide 58: Grant of Share Rights
For personal use only Grant of Share Rights • Resolution 3 – Proxies Received For: 262.7 million Against: 6.5 million Abstain: 353,779 58
Slide 59: Adoption of Remuneration Report
For personal use only Adoption of Remuneration Report • Resolution 4 – Adoption of Remuneration Report 59
Slide 60: Adoption of Remuneration Report
For personal use only Adoption of Remuneration Report • Resolution 4 – Proxies Received For: 267.6 million Against: 254,018 Abstain: 311,058 60
Slide 61: Deputy Chairman's Address
For personal use only Deputy Chairman’s Address 61
Slide 62: Conclusion of Meeting
For personal use only Conclusion of Meeting 62
Slide 63: Disclaimer – Forward Looking Statements
For personal use only Disclaimer – Forward Looking Statements This presentation contains forward-looking statements that are subject to risk factors associated with exploring for, developing, mining, processing and sale of minerals. Forward-looking statements include those containing such words as a
Slide 64: Iluka Resources Limited
For personal use only Iluka Resources Limited