Pls Group Limited · ASX:PLS
Pls — Pilbara Minerals — Benchmark Minerals World Tour – Sept 2017
53 slides from Pls's conference presentation, Sep 11, 2017
Slide 1: Pilgangoora – the world's leading lithium development project
For personal use only Pilgangoora – the world's leading lithium development project Benchmark Minerals World Tour – Sept 2017
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 25 May 2017. This document is provided for informational purposes and does not constitute or contain an
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: Pilbara Minerals – Overview
Pilbara Minerals – Overview ► 100% ownership interest in the world-class Pilgangoora Lithium -Tantalum Project For personal use only ► Pilgangoora is located in the Pilbara region of Western Australia, a proven mining jurisdiction 120km south of Port Hedland with established transport and port infra
Slide 5: Lithium Market
For personal use only Lithium Market Pilgangoora Project 5
Slide 6: Lithium raw materials: the key ingredient of the improved 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 7: China market overview – 2016 snapshot
China market overview – 2016 snapshot (Lithium Carbonate Equivalent) For personal use only Domestic Production +15kt Imports +85kt ►Spodumene SC6.0 (56kt) LOCAL PRODUCTION: ►Brine (7kt) ► Brine (10kt) Exports +11kt ►Lithium Carbonate (22kt) ► Spodumene (5kt) ►Lithium Carbonate (1kt) +90kt China ►Lit
Slide 8: 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 Variance – Battery Grade vs Technical Grade over recent history Minimum - +USD$1,200/tonne Maximum - +USD$3,500/tonne Several implications – • Techni
Slide 9: Global Cost Curve – Carbonate Grade Matters
Global Cost Curve – Carbonate Grade Matters…… For personal use only Global cost curves are not ‘normalised’ for Battery Grade specifications, i.e. ≥99.5% purity lithium carbonate The majority of brine production does not meet Battery Grade specifications and therefore has to have more money spent on
Slide 10: Pilgangoora Project
For personal use only Lithium Market Pilgangoora Project 10
Slide 11: Project highlights
Project highlights Outstanding project economics driven by very low cost of operations DFS OUTCOMES, 2Mtpa Process Capacity - Base Case For personal use only ► Average annual production of approximately 314ktpa of 6% spodumene concentrate (44ktpa of Lithium Carbonate Equivalent or LCE) and 321,000lb
Slide 12: Pilgangoora – Quality Product Streams
Pilgangoora – Quality Product Streams For personal use only ► Testwork and now pilot scale programs deliver outstanding results and demonstrates the class of the Pilgangoora project as a large-scale, low cost supplier of quality lithium raw materials. ► Genuine 6% Lithia (SC6.0) spodumene concentrat
Slide 13: Pilgangoora Project – current work streams
Pilgangoora Project – current work streams For personal use only HPGR FILTER PRESS PILGANGOORA WATER CAMP BUILDING INSTALLATION ROM / PLANT / TMF AREA CIVIL WORKS 13
Slide 14: Construction progress – Process Plant
Construction progress – Process Plant ► Bulk civil earthworks complete in For personal use only process plant area with the exception of the crusher pad ► Process plant pads ready for handover to RCR ► Access road upgrades underway 14
Slide 15: Construction progress – Tailings Mgt Facility
Construction progress – Tailings Mgt Facility ► TMF (cell 1) clearing complete For personal use only ► Cell wall key trench in progress 15
Slide 16: Construction progress
Construction progress For personal use only ► Communications tower and comms building in place ► Cellular phone network and high speed data comms ► Commissioning complete by the end of September 16
Slide 17: 4Mtpa Expansion Option – Pre-Feasibility Study Complete
4Mtpa Expansion Option – Pre-Feasibility Study (“PFS”) Complete Outstanding projected economic returns, project likely to grow to 5Mtpa ► Modest estimated incremental capital to expand to 4Mtpa, AUD 128m For personal use only ► LOM average annual production of approximately 564ktpa of 6% spodumene c
Slide 18: Offtake secured
Offtake secured Strong industrial relationships with offtake partners ► Stage 1 (2mpta) 10-year 160,000tpa 6% chemical-grade spodumene concentrate offtake For personal use only signed with Ganfeng Lithium ► Includes a binding equity subscription agreement of USD 20m ► Pricing based on a 6-month pric
Slide 19: Pilgangoora 2Mtpa – delivering on project execution
Pilgangoora 2Mtpa – delivering on project execution For personal use only Stage 2 Stage 1 Stage 3 Stage 4 PFS (2Mtpa Resource DFS (2Mtpa) Project and 4Mtpa) Growth Complete Execution Complete Resource Estimation Project Definition Detailed Design and Project Execution – from ► JORC Inferred ► Maiden
Slide 20: 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 project funding robust lithium lithium production from and gra
Slide 21: Contacts
For personal use only Contacts Ken Brinsden +61 8 6266 6266 @PilbaraMinerals @KenBPilbara
Slide 22: Supplementary Information
For personal use only Supplementary Information 22
Slide 23: Pilbara Minerals – overview
Pilbara Minerals – overview Capital Structure Board of directors For personal use only Current Share Price (3 August, 2017) A$ $0.43 Tony Kiernan – Non-Executive Chairman Shares on Issue # 1,549 million ► Highly experienced public company director and former solicitor with over 30 Options on Issue1
Slide 24: Board of Directors
Board of Directors For personal use only Highly experienced company director and former solicitor with over 30 years’ professional Non-Executive Tony Kiernan experience. Currently Chairman and a non-executive director of several ASX-listed resource Chairman companies Mining Engineer with over 22 yea
Slide 25: Management Team
Management Team Chartered Accountant with more than 25 years’ experience in the Australian resources sector. Prior to joining Pilbara Minerals, Mr Lynn served as the Chief Brian Lynn Chief Financial Officer For personal use only Financial Officer at Atlas Iron Limited and spent 12 years as the Chief
Slide 26: Lithium Ion Battery Technology
For personal use only Lithium Ion Battery Technology Lithium Market Pilgangoora Project 26
Slide 27: 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 28: 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 ► Its of
Slide 29: Lithium ion batteries – Market Potential
Lithium ion batteries – Market Potential For personal use only New markets being created and a further substantial driver of Lithium ion consumption…… 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 30: Resources & Reserves
Resources & Reserves JORC Mineral Resources: 25th 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 1.2
Slide 31: 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 32: 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 33: 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 34: 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 35: Operating costs set to become one of the lowest cost spodumene producers
Operating costs set to become one of the lowest cost spodumene producers ► DFS indicates first 5 years’ average cash operating cost1 Operating Costs – USD (Real) first 5 years ave2 For personal use only of USD 189/t concentrate CFR2 ► Contributing factors to the low forecast cash operating cost: ► S
Slide 36: Pilgangoora – capital costs
Pilgangoora – capital costs ► Total estimated capital cost of AUD 234m For personal use only ► Includes contingency of AUD 10m (AUD 6.5m excluding process plant) ► Represents ~12.5% of currently uncommitted capital costs (excluding process plant) ► Only ~AUD 60m of remaining capex is not yet committ
Slide 37: A rapid pathway to financing, development and production
A rapid pathway to financing, development and production For personal use only PILGANGOORA PROJECT DELIVERY SCHEDULE 2016 2017 2018 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 J A S O N D J F M A M J J A S O N D J F M A M J DFS FUNDING REGULATORY APPROVALS PROCUREMENT (INCL LONG LEAD) CAMP & ROADS EARLY WORKS ALL OTHER
Slide 38: Leading the Charge for Lithium-Ion Megafactories (EV only)
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. 38
Slide 39: 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 40: 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 40 Source: Benchmar
Slide 41: Roskill significantly upgrade Lithium Outlook
Independent research group, Roskill, significantly upgrade 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 42: 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 43: 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 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: Global motor vehicle lithium demand growing strongly
Global motor vehicle lithium demand growing strongly ► Tesla Model 3 to be released in 2017, retail price of USD 36,000 Global EV Builds For personal use only ► 400,000 orders already and growing ► Mercedes Benz releasing twelve new models of EVs in 2017 ► BMW i3 Series due for release 2017 in direc
Slide 47: Global lithium market demand growing strongly
Global lithium market demand growing strongly Consensus Global lithium demand forecast China – A Lithium Consumption Powerhouse For personal use only ► Central Government policy position towards ‘New Energy’ ► Domestic carbonate pricing took-off coincidentally with acceleration in EVs and Electric B
Slide 48: Global supply of lithium – new mines required
Global supply of lithium – new mines required ► The top four producers of global lithium supply accounted Global Lithium Supply Forecast (LCE) For personal use only for ~88% of global production in 2015 ► Lithium sourced from hard-rock operations represented 49% of global supply with 51% from brine
Slide 49: Pricing – outlook strong
Pricing – outlook strong ► Forecast DFS price deck derived from basket of Price forecast – Battery-grade Lithium Carbonate For personal use only independent economic and bank/broker models ► China domestic pricing, import pricing and spodumene import pricing models ► Expectation that domestic batter
Slide 50: 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 51: 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 USD ~325m ► Completed a RMB 268m (USD 38m) capital raise in December 2016 ► Currently produces 8,000tpa of Lithium Carbonate (LC) & 2,000t
Slide 52: Lithium Sector Market Performance 2017 YTD
Lithium Sector Market Performance 2017 YTD 250 China Domestic Battery Grade LCE Price 150 Chinese Major Converters For personal use only Globally Integrated Majors 130 Brine Peers 130 200 Hardrock 110 90 150 % Change 70 50 100 30 39 10 18 9 50 -12 -10 -30 China Domestic Chinese Major Globally Brine
Slide 53: Investment highlights
Investment highlights ► Emerging low-cost Australian lithium producer For personal use only ► Second largest spodumene lithium resource and high grade relative to its peers ► Outstanding project economics demonstrated by DFS ► Stage 2 PFS demonstrating potential to double scale to 4Mtpa ► Offtake an
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