Lynas Rare Earths Limited · ASX:LYC
Lynas Rare Earths — Lynas — Investor Presentation (September 2008)
36 slides from Lynas Rare Earths's investor presentation, Sep 4, 2008
Slide 1: ASX cover letter: corrected Investor Presentation September 2008
5 CORPORATION LTD Corporate Office Telephone: +61 2 8259 7100 Level 7 Facsimile: +61 2 8259 7199 56 Pitt Street Website: www.lynascorp.com Sydney NSW 2000 ACN: 009 066 648 AUSTRALIA 4 September 2008 Company Announcements Office Australian Securities Exchange 20 Bridge Street Sydney NSW 2000 Investor
Slide 2: Investor Presentation September 2008
For personal use only Investor Presentation September 2008
Slide 3: Disclaimer
Disclaimer For personal use only Not for distribution in the US ► The release, publication or distribution of this presentation in certain jurisdictions may be restricted by law and therefore persons in such jurisdictions into which this presentation is released, published or distributed should info
Slide 4: Lynas is an ASX company with a clear vision within the Rare Earths industry
Lynas is an ASX 200 company with a clear vision within the Rare Earths industry For personal use only Vision Be a global leader in the production and delivery of Rare Earths for a sustainable future Values Excellence in safety, health and the environment Learn from our differences, be innovative
Slide 5: Lynas Corporation is an ASX company with strong institutional support
Lynas Corporation is an ASX 200 company with strong institutional support For personal use only Listed on the Australian Stock Exchange (LYC) 648 million shares on issue 21 million unlisted options with strike prices between A$0.17 to A$1.27 US$97.3 million unlisted convertible bonds due Jan 2
Slide 6: Rare Earths are a unique group of elements
Rare Earths are a unique group of elements For personal use only A group of metallic elements With unique properties Lanthanum (La) Chemical Cerium (Ce) Catalytic Praseodymium (Pr) Electrical Neodymium (Nd) Magnetic Samarium (Sm) Metallurgic Europium (Eu) Optical Terbium (T
Slide 7: Rare Earths underpin new materials technology
Rare Earths underpin new materials technology required to sustain the needs of today’s society For personal use only Improve Energy Efficiency Environmental Protection Enable Digital Technology through lower consumption through emission control smaller & more powerful Compact fluorescent lights
Slide 8: Rare Earths improve fuel consumption and emission control in the automotive industry
Rare Earths improve fuel consumption and emission control in the automotive industry For personal use only Weight reduction through new magnets Electric motor with Neo magnets is half the weight of traditional ferrite motor Electric seats, windows and mirrors Sunroof and tail gate Windscreen w
Slide 9: Hybrid technology is totally dependent upon Rare Earths
Hybrid technology is totally dependent upon Rare Earths For personal use only HYBRID electric motor and generator HYBRID NiMH battery Neodymium Lanthanum Praseodymium Neodymium Dysprosium Cerium Terbium Enabling better emission standards and lower energy consumption -8-
Slide 10: Rare Earths play a pivotal role in automotive catalytic converters and clean diesel
Rare Earths play a pivotal role in automotive catalytic converters and clean diesel For personal use only AUTOCATS IN EVERY CAR CLEAN DIESEL TECHNOLOGY Autocats convert harmful gases to inert Rare Earths compound added to diesel gases fuel in the car Rare Earths enable Diesel soot trapped in filter
Slide 11: Rare Earths are vital for further important energy efficiency applications
Rare Earths are vital for further important energy efficiency applications For personal use only Energy efficient light bulb – Lanthanum is used to increase oil legislation driving demand refinery yields by 7% (FCC) Europium, Terbium and Yttrium 7% is equivalent to the demand predicted to double US
Slide 12: The consumer electronics industry use Rare Earths in many applications
The consumer electronics industry use Rare Earths in many applications For personal use only HIGH POWER NEO MAGNETS PHOSPHORS Disk drives RED GREEN BLUE Computers Data storage TV and computer screens Ipods CRT Video recorders Plasma Gaming consoles LCD Video cameras Speakers POLISH
Slide 13: Roskill forecast strong growth for Rare Earths across most applications
Roskill forecast strong growth for Rare Earths across most applications For personal use only Application Element Consumption tpa REO Growth Rate 2006 2012 % pa Battery Alloy La, Ce, Pr, Nd 17,000 43,000 17% Magnets Nd, Pr, Dy, Tb, Sm 20,500 42,000 13% Catalysts Ce, La, Nd 21,500 32,000 7% Polishing
Slide 14: A Rare Earths supply structural deficit looms as Chinese supply chains become more fragile
A Rare Earths supply structural deficit looms as Chinese supply chains becomes more fragile For personal use only Chinese Production Limits Chinese Government Policy Largest REO mine Baotou (50% of world Strategic value of REO well understood supply) operating at capacity REO is a by-product of ir
Slide 15: Other potential Rare Earths projects have a high level of uncertainty
Other potential Rare Earths projects have a high level of uncertainty For personal use only Mountain Nolans Hoidas Lake Thor Lake Pass Australia Canada Canada USA Separation plant Pre-feasibility study Advanced Advanced Status restarted in 07 for stock complete. Pilot plant exploration. Some explora
Slide 16: Imbalance of Supply and Demand suggests further price increases
Imbalance of Supply and Demand suggests further price increases For personal use only Price Development Supply – Demand Imbalance (US$/kg) (REO Metric Tonnes) 2006 2012 US$14.43/kg Based on Mt Weld Composition, FOB China basis 16.00 190000 15.00 18 Aug 08 Total Demand 108,000 188,000 14.00 165000 RE
Slide 17: Rare Earths are classified as critical minerals by the US Academy of Science
Rare Earths are classified as critical minerals by the US Academy of Science For personal use only Critical Metals US Academy of Science conducted a 4 (high) comprehensive study regarding key metals Rhodium to the US Economy: a shortage risk affects the US Society. Impact of Supply Platinum As parti
Slide 18: Lynas is building a sustainable, transparent, fully integrated source of supply
Lynas is building a sustainable, transparent, fully integrated source of supply For personal use only Mining - Australia Open pit mining at Mt Weld Contractor mining on a campaign basis Rare Earths Concentration - Australia Concentrator using flotation to be constructed at Mt Weld Containers
Slide 19: The current mining operation is within the Central Zone Pit which has 648,000t REO
The current mining operation is within the Central Zone Pit which has 648,000t REO For personal use only Mt Weld Tenements The Total CLD Sector Mineral Resource (2.5% REO cut-off) Updated in March 2008 Category Tonnes Grade Tonnes (Mt) (%REO) (kt) REO Measured 2.21 14.7 324 Indicated 3.84 11.5 441 I
Slide 20: Mt Weld's Central Zone Pit has a natural advantage in grade and composition
Mt Weld’s Central Zone Pit has a natural advantage in grade and composition For personal use only Mt Weld Baotou Composition Rare Earth Elements Composition US$/kg By Weight By Weight Lanthanum Oxide 25.60% 9.20 25.70% Cerium Oxide 45.74% 4.80 51.30% Praseodymium Oxide 5.42% 28.50 5.40% Neodymium Ox
Slide 21: Classification of Mineral Resources for the Southern Zone within the CLD Sector
Classification of Mineral Resources for the Southern Zone within the CLD Sector For personal use only Average REO Distribution of Mineral The Southern Zone Mineral Resource Resources (%) (2.5% REO cut-off) Central Southern Category Tonnes Grade Tonnes Rare Earth Oxide (Mt) (%REO) (kt) REO Zone Zone
Slide 22: First Mount Weld Rare Earths mining campaign completed
First Mount Weld Rare Earths mining campaign completed For personal use only Loss time injury free Ahead of schedule On budget -21-
Slide 23: 773,000 tonnes of ore stockpiled on site
773,000 tonnes of ore stockpiled on site For personal use only -22-
Slide 24: 18% Rare Earths Oxide ore for first two years of operation within stockpiles
18% Rare Earths Oxide ore for first two years of operation within stockpiles For personal use only -23-
Slide 25: The Concentration Plant to be built at Mt Weld
The Concentration Plant to be built at Mt Weld For personal use only ► Process Engineering Design over 95% complete ► Mintrex appointed as Superintendent ► Site clearance completed ► Works Approval received from Kalgoorlie DEC in July 2008 ► Australian principle construction contract tender short li
Slide 26: Containers of concentrate shall be trucked then railed to port for shipment to Malaysia
Containers of concentrate shall be trucked then railed to port for shipment to Malaysia For personal use only ► Transportation of containers to Malaysia via Fremantle -25-
Slide 27: State of Pahang on the east coast of Malaysia is an excellent location for processing
State of Pahang on the east coast of Malaysia is an excellent location for processing For personal use only ► Strong Federal, State, and Local Government support Lynas granted “strategic pioneer status” with 12 year tax free period Gebeng Industrial ► Excellent infrastructure in Gebeng Area Clos
Slide 28: Construction of the world's largest Rare Earths processing plant has commenced
Construction of the world’s largest Rare Earths processing plant has commenced For personal use only -27-
Slide 29: Concrete slabs will be laid in the near future
Concrete slabs will be laid in the near future For personal use only -28-
Slide 30: Rare Earths project schedule – 1st Phase 10,500tpa
Rare Earths project schedule – 1st Phase 10,500tpa For personal use only 2007 2008 2009 STAGE OF DEVELOPMENT Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Grade control drilling Mining Campaign Engineering Design Purchase Order and Equipment Delivery Civil Works Equipment Installation Commissioning - Concentr
Slide 31: Key supply contracts have been signed
Key supply contracts have been signed For personal use only 1st Supply Contract US$90M Long term 5 year contract Cerium, Europium, Terbium & Lanthanum 2nd Supply Contract US$200M Long term 5 year contract Neodymium & Praseodymium 3rd Supply Contract US$20M Long term multiple year con
Slide 32: Key financial aspects of the Rare Earths project
Key financial aspects of the Rare Earths project For personal use only Project Capex & Costs Budget Budget Funding AUDm Jul07 – Sep09 Jan08 – Sep09 Processing Plant 215.0 206.5 Cash at bank (1st Jan 08) 89.9 Concentration Plant 40.0 38.8 Completed Equity Issue 95.0 Mining 30.0 16.3 Senior Loan (USD
Slide 33: Operational expenses are dominated by reagent and energy costs
Operational expenses are dominated by reagent and energy costs For personal use only Cash Cost per tonne of finished REO by expense type and region 70% 66% 60% Current Budget assumes cash 20% costs of USD 6.20 +/- 10% per kilo 50% of final REO product 40% 2/3 of the costs are generated in 30% Ma
Slide 34: Rare Earths summary – A vital raw material to a greener world
Rare Earths summary – A vital raw material to a “greener” world For personal use only Demand Supply Lynas Continuous growth +10% China dominates the Will be the first and CAGR is forecast market with 95% supply dominant non-Chinese supplier The growth drivers are : China cannot meet 1. More efficien
Slide 35: The Crown Polymetallic resource at Mt Weld is the world's second largest niobium resource
The Crown Polymetallic resource at Mt Weld is the world’s second largest niobium resource For personal use only Category Indicated Inferred Total Mt 1.5 36.2 37.7 Crown Ta2O5 0.037% 0.024% 0.024% Polymetallic Nb2O5 1.4% 1.06% 1.07% Resource TLnO 1.65% 1.14% 1.16% ZrO 0.32% 0.3% 0.3% FeO3 46.5% 42.6%
Slide 36: Notes
Notes: For personal use only The information in this report that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Rob Duncan and Brendan Shand, who are members of The Australasian Institute of Mining and Metallurgy. Both Rob Duncan and Brendan Sha