Pls Group Limited · ASX:PLS
Pls — Pilbara Minerals — Investor Presentation (February 2018)
57 slides from Pls's investor presentation, Feb 26, 2018
Slide 1: Pilgangoora – the world's leading lithium development project
For personal use only Pilgangoora – the world's leading lithium development project Corporate Presentation – February 2018
Slide 2: Important Notices and Competent Person's Statement
Important Notices and Competent Person’s Statement Not an Offer of Securities For personal use only This document has been independently prepared by Pilbara Minerals Limited (“Pilbara”) and is dated 26/02/2018. This document is provided for informational purposes and does not constitute or contain a
Slide 3: Important Notices and Competent Person's Statement
Important Notices and Competent Person’s Statement Not Financial Product Advice For personal use only This document does not constitute financial product advice or take into account your investment objectives, taxation situation, financial situation or needs. This document consists purely of factual
Slide 4: Company Overview
For personal use only Company Overview Pilgangoora Stage 1 Project Pilgangoora Stage 2 Project Lithium Markets Summary 4
Slide 5: Pilbara Minerals – Overview
Pilbara Minerals – Overview ► Pilgangoora is located in the Pilbara region of Western Australia, a proven mining jurisdiction, 120km south of Port Hedland with established transport and port infrastructure For personal use only ► 100% ownership interest in the world-class Pilgangoora Lithium-Tantalu
Slide 6: Pilgangoora – delivering on project execution
Pilgangoora – Pilbara Minerals, delivering on project execution For personal use only Stage 2 PFS (2Mtpa Stage 1 Near-term Resource DFS (2Mtpa) and 4/5Mtpa) Project Production Growth Complete Complete Execution Growth to 5Mtpa Resource Estimation Project Definition Detailed Design and Project Execut
Slide 7: Pilbara Minerals – overview
Pilbara Minerals – overview Capital Structure Board of directors For personal use only Current Share Price (19 February 2018) A$ $0.84 Tony Kiernan – Non-Executive Chairman Shares on Issue # 1,646 million ► Highly experienced public company director and former solicitor with over 30 Options on Issue
Slide 8: Pilgangoora – Quality Product Streams
Pilgangoora – Quality Product Streams Testwork and now pilot scale metallurgical programs deliver outstanding For personal use only results and demonstrate the class of the Pilgangoora project as a large-scale, low cost supplier of quality lithium raw materials: ► Chemical Grade concentrates, Genuin
Slide 9: Company Overview
For personal use only Company Overview Pilgangoora Stage 1 Project Pilgangoora Stage 2 Project Lithium Markets Summary 9
Slide 10: Stage 1 – 2Mtpa Overview
Stage 1 – 2Mtpa Overview Stage 1 ► DFS completed in September 2016; subsequent update to reflect higher ore reserve (80.3Mt) further enhances project economics For personal use only ► 41 year project life based on 80.3Mt reserve ► LOM average annual production: ► approximately 320ktpa of 6% spodumen
Slide 11: Pilgangoora Project – Overview
Pilgangoora Project – Overview For personal use only Site overview, as at 14 February 2018 11 Plant site, as at 20 February 2018
Slide 12: Pilgangoora Project – construction progress
Pilgangoora Project – construction progress Power Plant For personal use only Ball Mill 12
Slide 13: Pilgangoora Project – construction progress
Pilgangoora Project – construction progress For personal use only Concentrate handling/storage Central Pit Pre Strip TMF Construction 13
Slide 14: Stage 1 Offtake secured
Stage 1 Offtake secured Strong industrial relationships with offtake partners ► Stage 1 (2mpta) 10-year 160,000tpa 6% chemical-grade spodumene concentrate For personal use only offtake signed with Ganfeng Lithium ► Pricing based on a 6-month pricing mechanism that takes into account the Chinese impo
Slide 15: Direct Shipping Ore (DSO)
Direct Shipping Ore (DSO) ► Mine Gate Sale Agreement with Atlas Iron Limited to deliver a minimum of 1.0 million tonnes of unprocessed For personal use only ROM lithium-tantalum material from April 2018. ► DSO opportunity expected to capitalise on current strong demand for lithium feedstock in the C
Slide 16: Pilgangoora – Stage 1 capital costs
Pilgangoora – Stage 1 capital costs Project Capital Expenditure Forecast by Month (from 1 Jan 18) For personal use only AUDm Monthly Expenditure Cumulative AUDm 35 32.7 32.4 284 300 Remaining project capital costs 30.1 30 funded from: 250 Total Project Expenditure • Existing cash on hand 24.9 25 to
Slide 17: Company Overview
For personal use only Company Overview Pilgangoora Stage 1 Project Pilgangoora Stage 2 Project Lithium Markets Summary 17
Slide 18: Stage 2 - 5Mtpa Expansion Overview (PFS Results)
Stage 2 - 5Mtpa Expansion Overview (PFS Results) ► Modest incremental capital to expand to 5Mtpa of AUD 207m For personal use only ► LOM average annual production, after Stage 1 and 2 production ramp-up: ► approximately 800ktpa of 6% spodumene concentrates, and ► approximately 780,000lbs of tantalit
Slide 19: Stage 2 - 5Mtpa Expansion
Stage 2 - 5Mtpa Expansion ► DFS now in progress and on track for completion by mid-2018, paving the way for a Final Investment Decision (FID) in Q3 2018, For personal use only start of construction by Q4 2018 and commissioning from Q4 2019. ► The 5Mtpa expansion of Pilgangoora will position Pilbara
Slide 20: 5Mtpa Expansion - Project Delivery Schedule
5Mtpa Expansion - Project Delivery Schedule For personal use only 20
Slide 21: Stage 2 Project – Off-take and Associated Funding
Stage 2, 5Mtpa Expansion Project – Off-take and Associated Funding Great Wall and Ganfeng Lithium off-take arrangements will underpin the Stage 2 5Mtpa expansion of the Pilgangoora Project, For personal use only while also providing off-take-linked debt financing solutions for a significant proporti
Slide 22: Company Overview
For personal use only Company Overview Pilgangoora Stage 1 Project Pilgangoora Stage 2 Project Lithium Markets Summary 22
Slide 23: Lithium Growth – Batteries are the key driver
Lithium Growth Batteries are the key driver The way we Generate, Use, Distribute and Store energy is changing. For personal use only Lithium Ion rapidly becoming the dominant rechargeable battery technology. Electric Vehicle uptake driving the growth in demand, followed by energy storage. The Lithiu
Slide 24: Lithium raw materials – key ingredient of the battery supply chain
Lithium raw materials The key ingredient of the improved battery supply chain ► Lithium raw materials are the vital ingredient for lithium Battery Supply Chain For personal use only battery technology Lithium raw materials ► Lithium is sourced predominantly from: Spodumene Mine - Hard Lithium Carbon
Slide 25: Lithium Raw Material Prices – Grade Differential
Lithium Raw Material Prices – Grade Differential For personal use only Lithium Carbonate ≈99% Technical Grade Lithium Carbonate ≥99.5% Battery Grade Price Variance – Battery Grade vs Technical Grade over recent history Minimum - +USD$1,200/tonne Maximum - +USD$3,500/tonne Upgrading an ‘Industrial or
Slide 26: Global Cost Curve – Product Grade Matters
Global Cost Curve – Product Grade Matters…… Global cost curves are not ‘normalised’ For personal use only for Battery Grade specifications, i.e. ≥99.5% purity lithium carbonate By far, the majority of brine production does not meet Battery Grade specifications and therefore has to have more money sp
Slide 27: China market overview – 2017 snapshot
China market overview – 2017 snapshot (Lithium Carbonate Equivalent) For personal use only Domestic Production +17kt3 Imports +193kt1 ►Spodumene (118kt)1 LOCAL PRODUCTION3: Exports +19kt1 ►DSO (36kt)1 ► Brine (≈12kt) ►Lithium Chemicals (39kt)1 ► Spodumene (≈5kt) ►Lithium Carbonate (1kt)1 LC Consumpt
Slide 28: Massive expansion of Lithium ion battery making capacity underway
Massive expansion of Lithium ion battery making capacity underway For personal use only More than USD20bn of committed investment expected to result in new battery manufacturing expansions that will increase global production capacity significantly and drive production costs down 28 Source: Benchmar
Slide 29: Company Overview
For personal use only Company Overview Pilgangoora Stage 1 Project Pilgangoora Stage 2 Project Lithium Markets Summary 29
Slide 30: Summary Investment highlights
Summary Investment highlights For personal use only Outstanding project Rapid pathway Ideally placed to Low-cost and through Significant economics and Offtake and full capitalize on high quality construction and resource scale ability to Stage 1 project robust lithium lithium production from and gra
Slide 31: Supplementary Information
For personal use only Supplementary Information 31
Slide 32: Board of Directors
Board of Directors Highly experienced company director and former solicitor with over 30 years’ professional For personal use only Non-Executive Tony Kiernan experience. Currently Chairman and a non-executive director of several ASX-listed resource Chairman companies. Mining Engineer with over 22 ye
Slide 33: Management Team
Management Team Chartered Accountant with more than 25 years’ experience in the Australian resources sector. Prior to joining Pilbara Minerals, Mr Chief Financial For personal use only Brian Lynn Lynn served as the Chief Financial Officer at Atlas Iron Limited and spent 12 years as the Chief Financi
Slide 34: Lithium Ion Battery Technology
For personal use only Lithium Ion Battery Technology Lithium Market Pilgangoora Project 34
Slide 35: Leverage to Lithium Ion Battery Materials
Leverage to Lithium Ion Battery Materials ► The leverage to Lithium Ion battery materials sits with Lithium For personal use only ► Massive market growth required in lithium raw materials to contribute to growth in battery industry: ► 250% supply growth to 2025 ► >500% supply growth to 2030 ► It’s o
Slide 36: Lithium ion batteries – Market Potential
Lithium ion batteries – Market Potential New markets being created and a further substantial driver of Lithium ion consumption… For personal use only The lower the cost of the lithium ion battery, the greater the market application and China is now a key driver in lowering the cost of the batteries
Slide 37: Lithium Ion Battery Technology
For personal use only Lithium Ion Battery Technology Lithium Market Pilgangoora Project 37
Slide 38: Roskill significantly upgrades Lithium Outlook
Independent research group, Roskill, significantly upgrades Lithium Outlook Significantly increased outlook driven by Li-Ion Battery demand in Electric Vehicles For personal use only Battery Other 1,800 Increased lithium use driven by EV battery requirements: 1,600 168 1,400 e-Buses PHEV & BEV HEV e
Slide 39: Transition to Electric Vehicles – Exponential Adoption Curve
Transition to Electric Vehicles – Exponential Adoption Curve 2025 Forecast EV Penetration Rates Roskill’s forecast scenarios for sales of EV’s (GWh) LCE Demand in Li-ion batteries For personal use only (% of total vehicle sales) 4,000 10 x growth from 83kt Assumed performance gains in batteries coul
Slide 40: Transition to Electric Vehicles – Factors Driving Adoption
Transition to Electric Vehicles – Factors Driving Adoption Momentum growing from consumers, car manufactures and regulators – EV’s fast becoming mainstream – tipping point is accelerating For personal use only • Reduction in Battery Costs bringing EV's closer to • Comfort (noise, smooth acceleration
Slide 41: Global motor vehicle lithium demand growing strongly
Global motor vehicle lithium demand growing strongly ► Tesla Model 3 deliveries started in August 2017 with a long Global EV Builds For personal use only range battery life of 310 miles with a starting retail price of USD 35,000 (>500,000 pre-orders) ► Volkswagen investing $84Bn to bring 300 EV mode
Slide 42: Leading the Charge for Lithium-Ion Megafactories
Leading the Charge for Lithium-Ion Megafactories (EV only) For personal use only Estimated 521% increase between 2016 and 2020: Relates to batteries for EV’s only. 42
Slide 43: Massive expansion of Lithium ion battery making capacity underway
Massive expansion of Lithium ion battery making capacity underway Battery making capacity set to increase significantly For personal use only ► Significant expansion through entire lithium-ion supply chain, including major chemical conversion capacity expansion (spodumene to Carbonate & Hydroxide) o
Slide 44: Increasing availability and choice of Electric Vehicles
Increasing availability and choice of Electric Vehicles Models by style and range available through to 2020: For personal use only Telsa Model 3 released with 2 battery types: • Standard – 220 Miles • Long Range – 310 Miles Current EV’s on the market: 44 Source: Bloomberg New Energy Finance
Slide 45: Technology Adoption
Technology Adoption Adoption Rates of Consumer Technology Solar – Installed Capacity, Estimates vs Actual and the influence of cost For personal use only “There are two kinds of forecasters: those who don’t know, and those who don’t know they don’t know.” ― John Kenneth Galbraith Source: Scientific
Slide 46: Pricing – outlook strong
Pricing – outlook strong ► Ganfeng Lithium, General Lithium and Great Wall Consensus Price forecast For personal use only spodumene offtake price based on relativity to the – Battery-grade Lithium Carbonate combined Chinese domestic and import market pricing outcomes for battery grade lithium carbon
Slide 47: Great Wall Motors - China's largest SUV and pickup manufacturer
Great Wall Motors - China’s largest SUV and pickup manufacturer • Listed on the Hong Kong & Shanghai Stock Exchanges For personal use only • Market capitalisation of RMB 120Bn ~US$19Bn • >60,000 employees and produces ~1 Million vehicles per year from 4 vehicle manufacturing bases. • SUVs sold under
Slide 48: Ganfeng Lithium – China's largest fully integrated lithium company
Ganfeng Lithium – China’s largest fully integrated lithium company ► Established in 2000 in Jiangxi Province, China, Ganfeng For personal use only Lithium has a capacity of around 35,000tpa of LCE and produces lithium carbonate, lithium hydroxide, lithium metals, butyl lithium, and a number of other
Slide 49: General Lithium – a major producer of lithium chemicals in China
General Lithium – a major producer of lithium chemicals in China ► Listed on NEEQ, Beijing, Code No: 837358 with a market capitalisation For personal use only of RMB 2.6Bn (USD ~410m) ► Currently produces 8,000tpa of Lithium Carbonate (LC) & 2,000tpa of High Purity LC 4N (99.99%) ► Recently commissi
Slide 50: Lithium Ion Battery Technology
For personal use only Lithium Ion Battery Technology Lithium Market Pilgangoora Project 50
Slide 51: Resources & Reserves
Resources & Reserves JORC Mineral Resources: 25 January 2017 For personal use only Category Tonnage Li2O (%) Ta2O5 Fe2O3 (%) Li2O (T) Ta2O5 (Mt) (ppm) (Mlbs) Measured 17.6 1.39 151 0.44 244,000 5.9 Indicated 77.7 1.31 125 0.58 1,017,000 21.5 Inferred 61.1 1.13 125 0.71 691,000 16.8 Total 156.3 1.25
Slide 52: Pilgangoora – a globally significant hard rock lithium resource
Pilgangoora – a globally significant hard rock lithium resource For personal use only PILBARA MINERAL S Note: Tantalum adjusted resource size includes consideration of the revenue of tantalum by-product. Source: Published resource estimates by project owners. Note that resources estimates for projec
Slide 53: Pilgangoora – mining
Pilgangoora – mining A straightforward open pit mining development ► Measured, Indicated and Inferred Resource of 156.3Mt @ 1.25% Li2O For personal use only and 128ppm Ta2O5 containing 1,952,000 tonnes Li2O, and including 44Mlbs Ta2O5 (Mineral Resource Update ASX release dated 25 January 2017) ► Ore
Slide 54: Pilgangoora – processing
Pilgangoora – processing ► Industry standard processing flowsheet For personal use only ► Spodumene concentrate produced at three mines in Western Australia ► 2-stage heavy media separation ► Gravity separation, tantalite recovery ► Grinding leading to oxide flotation ► Low/High intensity magnetic s
Slide 55: Pilgangoora – mine to ship
Pilgangoora – mine to ship Contracted logistics chain proposed ► Road transport from mine site to Wedgefield Storage Facility Loading – Rotabox For personal use only ► 127km via Great Northern Highway utilising double road trains ► Product storage at Wedgefield and loaded into shipping containers ►
Slide 56: Project highlights – 5Mtpa
Project highlights – 5Mtpa (inclusive of Stage 1 and Stage 2) Metric Unit PFS 5Mtpa For personal use only Life of Mine (LOM) Years 17 LOM Ore Mined Mt 80.4 LOM Waste Mined Mt 310.1 LOM Strip Ratio (waste:ore) 3.85 Plant Feed Rate Mtpa 4.67 Average Lithium Head Grade % 1.26 Average Lithium Recovery %
Slide 57: 2Mtpa - A rapid pathway development and production
2Mtpa - A rapid pathway development and production For personal use only 57
Pilbara Minerals — Investor Presentation (February 2018) on 6ix