Wa Kaolin Limited · ASX:WAK
Wa Kaolin — Investor Presentation (November 2020)
32 slides from Wa Kaolin's investor presentation, November 2020
Slide 1: Establishing a Multigenerational Industrial Business
Establishing Building AA Multigenerational Multigenerational Industrial Business Industrial Business Production of High Purity Kaolin From One of the World’s Largest Resources Company Presentation November 2020 Extraction of Pit 2 at the Wickepin Kaolin Project by a contract miner
Slide 2: Important Notice & Disclaimer
Important Notice & Disclaimer This presentation has been prepared by WA Kaolin Limited, (WAK or the Company). To the fullest extent permitted by law, WAK and its related bodies corporate, its directors, officers, employees and representatives (including its agents and advisers), disclaim all lia
Slide 3: WA Kaolin in a Nutshell
WA Kaolin in a Nutshell A high quality, long life, permitted Kaolin project located in Wickepin, 220km south-east of Perth, Western Australia. Acquired kaolin deposits in 1999 from Rio Tinto who discovered and drilled them out. Significant Investment to Deliver a De-risked Project Founded by ent
Slide 4: Low Capital Intensity
Low Capital Intensity Installing Modular K99 Capacity Direct ship ore (DSO) style product, amenable to free digging, open cut campaign mining with a low strip ratio. Working High Road Existing & Simple Scenario Metric Scenario Scenario Mining Presently trucked to Kwinana for processing, where 1
Slide 5: Experienced & Invested Executive Team
Experienced & Invested Executive Team OWNERS NON-EXECUTIVE DIRECTORS MANAGEMENT Vale Keith Snell - The Alf Baker Andrew Sorensen Dr John White Linton Putland Cathy Moises Michael Kenyon Board and Management Executive Director CEO Non-Executive Chairman Non-Executive Director Non-Executive Director C
Slide 6: Sequential Scale Up To Manage Risk
Sequential Scale Up To Manage Risk The brownfields expansion scales the project up in a modular/sequential manner to meet customer demand. A focus on calibrating execution risk. Current Operations Stage 1 Stage 2 2020 2022 20232 K99 K99 Expand K99 Proof of Concept Plant Commercial Scale Capacity Kwi
Slide 7: Feasibility Outcomes
Feasibility Outcomes (Stage 1 & 2 Only) A Definitive Feasibility Study completed by BDB Process has delivered robust economics-based ramp up of kaolin production to 400,000tpa only Financial Key There remains significant scope to Parameters further increase theAverage Value production. Key Assum
Slide 8: About Kaolin
About Kaolin Overview A platy white clay derived from the mineral Kaolinite formed by THE CERAMICS INDUSTRY hydrothermal weathering of igneous rock such as granite Kaolin increases the durability of ceramics as A common mineral, however, rarely occurs in large high-grade and low impurity deposit
Slide 9: Kaolin Market
Kaolin Market Est US$4.76b market in 2019 and is projected to reach US$6.3b by 20271 By volume, the market was 29.4mt in 2019 and is expected to reach 35.8mt by 2027 (CAGR 3.3%) Imerys, Quarzwerke (Sibelco) and BASF account for over 26% of global production. Imerys alone accounted for 16.3% of
Slide 10: Wickepin Project Overview
Wickepin Project Overview Ownership 100% Wickepin, 220 km south-east of Perth, Western Australia Location Existing processing plant is currently located on portside industrial land in Kwinana, south of Perth Open Pits (2 pits are currently in operation on M70/1143) Mine Type Strip Ratio: 0
Slide 11: World Class Resource - Quality
World Class Resource - Quality In-situ primary deposit. Majority of global producers mine secondary Type USA deposits (typically contain organic material) Reserves diminishing and highly Suitable for all kaolin applications Applications variable Confirmed by world renowned independent expert –
Slide 12: World Class Resource - Size
World Class Resource - Size One of the World’s Largest Remaining Primary Resources: Reserves of Kaolin Resources of Kaolin Producer Country Type (mt)1 (mt)1 WA Kaolin Australia Primary 13.42 270.02 Imerys (Listed Conglomerate) All Areas Primary/Secondary 98.9 151.7 KaMin (Private) All Areas Secondar
Slide 13: Existing & Simple Mining
Existing & Simple Mining There are 2 pits in operation inside the mining tenement area (M70/1143) with both at a depth still above the basement of the mineralised zone, the Mining Pit 1 current maximum depth of Pit 1 and Pit 2 is 13m and 17m respectively. The mineralised zone is visually defined
Slide 14: Commercial Production Based on Proven Technology
Commercial Production Based on Proven Technology Drying and beneficiation through physical separation with no chemicals required is a simple and proven process, already operating on a small scale Kwinana K99 K99 Process commercial basis in Kwinana. Processing Plant Modular construction sees very sim
Slide 15: WAK’s Existing Customers
WAK’s Existing Customers Demand for WAK’s kaolin products from existing customers is driving the expansion timing and strategy. A Taiwanese distributor has executed a 10-year distribution agreement with a 6 year offtake agreement. The target offtake is 432kt of kaolin in the six years. In year
Slide 16: Owners’ Proposition
Owners’ Proposition The Owners have been and intend to be in WAK for the long haul and support WAK building a multigenerational industrial minerals enterprise that can generate significant free cash. The Owners are mindful of limiting their equity ownership to facilitate liquidity for investors.
Slide 17: Capital Structured Post-IPO
Capital Structured Post-IPO WAK raised $22.0 million (before costs) through the issue of 110.0 million ordinary fully paid shares at an issue price of 20c per share in conjunction with listing on the ASX. Capital Structure Shares (m) $m Shares on Issue before IPO 125.00 Pre-IPO Converting Note (po
Slide 18: Owners’ Outcomes
Owners’ Outcomes Having funded ~$42m invested to date, the Owners outcomes are aligned to the performance of WAK: Owners’ Performance Right Summary Performance Rights 5,500,000 Wickepin production facility has been constructed and commissioned within 12.5% of budget ($18m). Year 11 Wickepin producti
Slide 19: IPO Indicative Use of Funds
IPO Indicative Use of Funds The Company has raised $22m to fund the Stage 1 expansion. IPO RAISING – USE OF FUNDS $m CAPEX (Wickepin) - plant & equipment 16.0 IPO Costs (including converting note interest) 1.66 Owners’ Loan 0.7 Debt Reduction 1.8 Creditors 0.2 Working Capital 1.64 Total 22.0 Note 1:
Slide 20: Investment Thesis
Investment Thesis The long LoM (31 years plus) and low CAPEX/low capital intensity sets the scene for what is planned to be a sequential scale up of the WAK Industrial Minerals business over 5/6 years. WAK has set out what it believes to be a low risk strategy to build a significant industrials
Slide 21: Appendices
Appendices 21
Slide 22: Project Management & Execution
Project Management & Execution Budget and Performance Milestones contemplate 12 months1 to complete Stage 1 Skills required to execute include: Permits Procurement In House Contracts Administration Documentation Detailed Design & Engineering Site Management Outsourced Safety Sche
Slide 23: Approvals & Permits
Approvals & Permits Site Approval Category Authority Status Lead Time Mine Site Approval granted for 60,000tpa kaolin operation Mining Approval DMIRS Completed Approval granted for 360,000tpa kaolin operation 1 Works Approval (Environmental) DER Granted and extended to Feb 2023 Completed Application
Slide 24: Reserve & Resource Statement
Reserve & Resource Statement WAK has a Probable Ore Reserve of 30.5mt of kaolinised granite on Mining Lease M70/1143. WAK has reported an Inferred Mineral Resource at 644.5mt of kaolinised granite. Yield Kaolinised Granite Category Lease Area Brightness (%) (Million Tonnes) Ore Reserve 2020 Prob
Slide 25: Competent Persons Statements
Competent Persons Statements The Mineral Resources, Ore Reserves and production targets referred to in this announcement were previously reported in the Prospectus dated 11 October 2020 and released to the ASX on 24 November 2020 and the Definitive Feasibility Study announcements released on 24 and
Slide 26: APAC Region Breakdown
APAC Region Breakdown APAC Market Revenue by Application APAC Vertical Markets by Country (US$m) (US$m) Ceramics, Fibreglass, Paints, Rubber 283.4 65.8 213.52 693.9 100.3 396.2 111.5 24.8 463.5 28.0 13.7 64.9 China Japan Australia Paper Ceramics Paint & Coatings Thailand Vietnam Other Fibreglass Rub
Slide 27: Key Assumptions
Key Assumptions Revenue The revenue assumption were arrived at through a combination of WAK’s sales history of kaolin products into each of the target markets, e.g. ceramics, fibreglass, coatings, rubber, cosmetics and so on. In addition to this direct experience, WAK commissioned a market researc
Slide 28: Key Assumptions contd.
Key Assumptions contd. Capex, construction and commissioning The capital estimate has been developed in house as part of the Definitive Feasibility Study. The estimate is based on the process flow diagrams, electrical load list and engineering drawings that have been prepared for the Wickepin K99
Slide 29: Top 20 Shareholders
Top 20 Shareholders (as at 20th November 2020) Position Shareholder Holding % IC 1 SILVER TROPIC PTY LTD <WAMCO INDUSTRIES UNIT A/C> 49,883,574 17.64% 2 SCIENTIFIC MANAGEMENT ASSOCIATES (VICTORIA) PTY LTD <WAMCO INDUSTRIES UNIT A/C> 48,844,333 17.27% 3 MR KENNETH HALL <HALL PARK A/C> 10,000,000 3.54
Slide 30: Indicative Proforma Capital Structure Evolution
Indicative Proforma Capital Structure Evolution The delivery of performance equity and the exercise of options would grow the capital structure: Year 1 2 3 4 5 Existing Shares 282,821,885 282,821,885 293,821,885 299,321,885 436,554,698 Performance Rights - 11,000,000 5,500,000 5,500,000 5,500,000
Slide 31: Future Possibilities
Future Possibilities Globally some half a dozen kaolin producers currently ship 1mtpa or more (major producers include Imerys, Quarzwerke (Sibelco), BASF, KaMin and Thiele Kaolin Co.). Market volume is growing at 3.1% CAGR at a time when supply is tightening. Expand K99 Production WAK can buil
Slide 32: Andrew Sorensen CEO
Andrew Sorensen CEO asorensen@wakaolin.com.au +61 8 9439 6300 www.wakaolin.com.au 32