Iluka Resources Limited · ASX:ILU
Iluka Resources — Bank of America Merrill Lynch 2020 Global Metals, Mining and Steel Conference
32 slides from Iluka Resources's conference presentation, May 12, 2020
Slide 1: Bank of America Merrill Lynch 2020 Global Metals, Mining and Steel Conference
Bank of America Merrill Lynch 2020 Global Metals, Mining and Steel Conference 12 May 2020 14 Tom O’Leary, Managing Director Ambrosia, South Australia
Slide 2: Disclaimer and Compliance Statement
Disclaimer and Compliance Statement 2 This presentation has been prepared by Iluka Resources Limited (Iluka). By accessing this presentation you acknowledge that you have read and understood the following statement. This document provides an indicative outlook for the Iluka business in the 2020 fina
Slide 3: Iluka’s COVID-19 Response
Iluka’s COVID-19 Response 3 Iluka’s first priority is the safety and wellbeing of its people, their families, and the communities in which the company operates Approach and response Group-level • Crisis Management Team established to coordinate and provide oversight of response • Risk mitigation pla
Slide 4: Iluka’s Commitment to Sustainability
Iluka’s Commitment to Sustainability 4 Iluka Group TRIFR down to 2.9 in 2019 (3.5 in 2018) and ongoing commitment to sustainability Iluka’s Sustainability Approach Female Key Pillars representation 2.9 • Health and Safety Group TRIFR 2019 • People (2018: 3.5) 33% 29% • Social Performance Exec. Mgt.
Slide 5: Global Assets and Portfolio
Global Assets and Portfolio 5 60 years experience in mineral sands exploration, project development, mining, processing and marketing LONDON AMSTERDAM ANTWERP NEWCASTLE CINCINNATI VIRGINIA CASTELLON QINGDAO RALEIGH ZHENJIANG SHANGHAI XIAMEN HYDERABAD SIERRA LEONE PUTTALAM PORT KLANG OPERATIONS AND P
Slide 6: Financial Strength
Financial Strength 6 Strong underlying financial results in 2019: strong balance sheet supports the company’s resilience during the current pandemic Financial Highlights 2019 • Mineral sands revenue of $1,193 million Multi Option Facility Agreement (MOFA) ‒ zircon sand prices up 10%, rutile1 prices
Slide 7: Markets
Markets
Slide 8: Zircon Market Update
Zircon Market Update 8 2019 Iluka sales volume • First quarter seasonal softness further exacerbated by COVID-19 by destination • Sales to China affected by: Europe, Other Asia ‒ extended duration of Chinese New Year Holiday Middle East 14% 17% ‒ lockdown of ceramics producers Americas 3% ‒ reductio
Slide 9: High Grade Titanium Feedstock Market Update
High Grade Titanium Feedstock Market Update 9 • Solid demand in downstream pigment markets during the first quarter • Iluka sales weighted to US and Europe, limited volumes to China • Iluka’s high grade titanium dioxide feedstock customers reported to be running plants at normal capacity utilisation
Slide 10: High Grade Titanium Feedstock – Offtake Agreements
High Grade Titanium Feedstock – Offtake Agreements 10 A significant proportion of Iluka’s high grade feedstock production underpinned by longer term take-or-pay agreements High Grade Titanium Sales and Take-or-Pay Contracts kt • Take-or-pay contracts deliver higher degree of revenue 500 certainty fo
Slide 11: Operations
Operations Cataby, Western Australia
Slide 12: Mineral Sands Operational Configuration
12 Mineral Sands Operational Configuration Portfolio of operations weighted towards premium zircon and high-grade titanium products Cataby / South West Jacinth-Ambrosia / Mid West Sierra Rutile, Sierra Leone • Large chloride ilmenite rich mine 150km from Perth • World’s largest zircon mine • Began o
Slide 13: Flexible Production Settings at Jacinth-Ambrosia mine
Flexible Production Settings at Jacinth-Ambrosia mine 13 December 2017 June 2018 August 2018 August 2019 August 2020 Restart and expansion Ambrosia option Ambrosia move Move to Ambrosia Return to Jacinth consideration explored approved • Mining moved to Ambrosia in • 12 months of high grade mining a
Slide 14: Zircon Production Settings
Zircon Production Settings 14 Basis for operational configuration decisions include: • optimising production based on market conditions • minimising costs and improving cash flow • maintaining flexibility to return to higher production level • Zircon production reduced during this period of market u
Slide 15: Project Pipeline
Project Pipeline Wimmera, Victoria
Slide 16: Project Pipeline Summary
Project Pipeline Summary 16 Iluka develops and gates projects in a disciplined manner towards execution subject to acceptable progress in the following areas: (i) confidence in satisfactory project risk-return attributes, (ii) high level of strategic alignment, and (iii) sequenced to take advantage
Slide 17: Eneabba Project
Eneabba Project 17 Construction completed with first production 8 April - first sales expected Q3 2020 Underpinned by 2-year sales offtake agreement Eneabba RESERVE ASSEMBLAGE • Extraction, processing and sale of monazite-rich tailings stockpile providing additional Other business diversification in
Slide 18: Balranald Project
Balranald Project 18 Finalising preparations for the trial to validate the technology to mine the deposit, process the ore and return waste at commercial rates Balranald RESOURCE ASSEMBLAGE (VHM) Iluka aims for each mining unit to • The Balranald project comprises the West Balranald and Nepean depos
Slide 19: SR1 Kiln Restart Project
SR1 Kiln Restart Project 19 Capital-efficient incremental SR option – contingent on satisfactory feedstock arrangements SR1 Kiln Restart • Refurbishing SR1 represents a low capex, low risk opportunity to produce an INDICATIVE ANNUAL PRODUCTION MIX1 additional 110ktpa of high-grade synthetic rutile S
Slide 20: Sembehun Project
Sembehun Project 20 One of the world's largest, highest grade, undeveloped rutile projects Sembehun Project INDICATIVE ANNUAL PRODUCTION MIX • Group of deposits located 20-30km from Sierra Rutile's existing operations Ilmenite • Project would extend Sierra Rutile’s production beyond Area 1 30% • One
Slide 21: Wimmera
Wimmera 21 Continue with prefeasibility studies – completion expected in 2021 as focus moves to product quality Wimmera INDICATIVE ANNUAL PRODUCTION MIX • Wimmera is a large-scale project planned to produce ceramic-grade zircon and rare Rare Earth earth products Oxide <5% Zircon ‒ including valuable
Slide 22: Other projects
Other projects 22 Iluka continues to build and maintain a portfolio of other assets, focussing on expansion, innovation and traditional growth projects South West Deposits Five deposits in WA’s southwest capable of providing chloride ilmenite to the SR kilns • The five deposits comprise Tutunup, Elg
Slide 23: Exploration
Exploration 23 Exploration is a key component of Iluka's growth strategy • Continued commitment to identification and assessment of global mineral sands opportunities • Targeting New Mine (greenfields) opportunities of Vior Farm In, Quebec Rutile (hard rock) US strategic target sufficient scale to s
Slide 24: Proposed Demerger of Royalty Business
Proposed Demerger of Royalty Business Source: Google Maps – Imagery 2020 CNES / Airbus Maxar Technologies, Imagery CNES / Airbus, Landsat / Copernicus, Maxar Technologies, Map data 2020
Slide 25: Proposed demerger overview and update
Proposed demerger overview and update 25 The demerger of Iluka’s royalty business is targeted for 2H 2020 with the MAC Royalty to be the cornerstone asset of Australia’s leading ASX listed royalty company Overview Demerger benefits • The proposed demerger will establish two separately listed ASX veh
Slide 26: Introduction to RoyaltyCo
Introduction to RoyaltyCo 26 RoyaltyCo aims to be Australia’s leading resources royalty company, providing shareholders with a cash flow generative and low operational risk investment vehicle with strong growth potential RoyaltyCo overview MAC Royalty is RoyaltyCo’s cornerstone asset • Upon a succes
Slide 27: MAC Royalty growth profile and revenue potential
MAC Royalty growth profile and revenue potential 27 Considerable growth to underlying Mining Area C production/sales over coming years expected - MAC Royalty earnings are determined based on these sales rates, iron ore pricing, the ratio of lump to fines, the premium lump attracts over fines and the
Slide 28: For more information contact
For more information contact: Melissa Roberts General Manager – Investor Relations and Commercial Mineral Sands Operations investor.relations@iluka.com +61 (0) 450 398 431
Slide 29: Appendix: Mineral Resources and Ore Reserves
Appendix: Mineral Resources and Ore Reserves 29 Cataby Mineral Resources and Ore Reserves Jacinth-Ambrosia Mineral Resources and Ore Reserves Mineral In situ Mineral Assemblage in HM3 Mineral In situ Mineral Assemblage in HM3 Resource Resource Resource HM HM Resource HM HM Deposit Tonnes1 Deposit To
Slide 30: Appendix: Mineral Resources and Ore Reserves
Appendix: Mineral Resources and Ore Reserves 30 Eneabba Mineral Resources and Ore Reserves South West Deposits Mineral Resources and Ore Reserves In situ Mineral Assemblage in HM3 Mineral In situ Mineral Assemblage in HM3 Resource Notes: Resource HM HM Resource HM HM Mineral Tonnes1 1. In situ (dry)
Slide 31: Appendix: Mineral Resources and Ore Reserves
Appendix: Mineral Resources and Ore Reserves 31 Balranald Mineral Resources Sembehun Mineral Resources and Ore Reserves Mineral In situ Mineral Assemblage in HM2 In situ Insitu Mineral Assemblage3 Resource Mineral Resource Resource HM HM Rutile Deposit Tonnes1 Deposit Resource Tonnes1,6,7 Ilmenite5
Slide 32: Appendix: Mineral Resources and Ore Reserves
Appendix: Mineral Resources and Ore Reserves 32 Atacama Mineral Resources PQ Mineral Resources Mineral In situ Mineral Assemblage in HM2 Mineral In situ Mineral Assemblage in HM3 Resource Resource Resource HM HM Resource HM HM Deposit Tonnes1 Deposit Tonnes1 Category Tonnes3 Ilmenite Zircon Rutile C