Vrx Silica Ltd. · ASX:VRX
Vrx Silica — Shareholder Meeting (November 2020)
25 slides from Vrx Silica's shareholder meeting presentation, Nov 27, 2020
Slide 1: VRX Silica – Supplying Global Demand, AGM Presentation
For personal use only VRXSILICA Supplying Global Demand AGM PRESENTATION November 2020
Slide 2: Important Information – Disclaimer
IMPORTANT INFORMATION For personal use only Disclaimer This document has been prepared by VRX Silica Limited. The information contained in this document is for information purposes only and has been prepared for use in conjunction with a verbal presentation and should be read in that context. The in
Slide 3: Sand is the main material that modern cities are made of
For personal use only “Sand is the main material that modern cities are made of ” Vince Beiser “The World in a Grain” 2018 The story of sand and how it transformed Civilisation
Slide 4: VRX Silica – Investment Highlights
VRX SILICA – INVESTMENT HIGHLIGHTS For personal use only Significant market interest in product as environmental permitting nears completion 100% owner of three high value Silica Sand Projects – Muchea, Arrowsmith North and Arrowsmith Central – all located within 1 close proximity to Perth, Western
Slide 5: Corporate Summary
CORPORATE SUMMARY For personal use only CAPITAL STRUCTURE Share Price 21cps* Ordinary Shares on Issue 499 million** Options on Issue 78.2 million Market Capitalisation $104 million** Cash $9.3 million** Debt Nil Enterprise Value $94.7 million** BOARD AND MANAGEMENT SHAREHOLDERS Person Role Experienc
Slide 6: What is Silica Sand?
WHAT IS SILICA SAND? For personal use only Silica Sand is quartz that over time, through the erosion by water and wind, has been broken down into tiny granules. Industrial sand is a term normally applied to high purity silica sand products with closely controlled sizing. It is a more precise product
Slide 7: Silica Sand Has Various Applications
SILICA SAND HAS VARIOUS APPLICATIONS For personal use only Glassmaking and the foundry industry is the target application for VRX’s silica product Glassmaking and Foundry are VRX’s GLASSMAKING Flat, containers, architectural, thin film high-value target markets ▪ Asian glass making production METAL
Slide 8: Silica Sand Applications Driving Growth in Demand
SILICA SAND APPLICATIONS DRIVING GROWTH IN DEMAND For personal use only Glass and Foundry Industry growth is set to drive the demand for silica sand in the APAC Region Silica Market Demand by End Use (APAC Countries) ▪ Developing countries in the APAC region Silica (millions of tonnes) 2014 2019 202
Slide 9: Arrowsmith North & Central and Muchea Silica Sand Projects
ARROWSMITH NORTH & CENTRAL AND MUCHEA SILICA SAND PROJECTS For personal use only Each project may be developed and operated separately and profitably ▪ 100% ownership ▪ Large scale, high-grade and low impurity silica sands projects GERALDTON ▪ BFSs completed Aug-Oct 2019 with following combined high
Slide 10: Silica Sand Price and Demand Dynamics
SILICA SAND PRICE AND DEMAND DYNAMICS For personal use only Silica Sand is forecast to increase in price across Asia-Pacific countries in line with rising demand and supply constraints due to depletion and environmental restrictions on dredging Historic and Forecast Silica Sand Pricing Asia Pacific
Slide 11: Demand Not Met by Existing Production
DEMAND NOT MET BY EXISTING PRODUCTION For personal use only Key countries in the Asia Pacific region have unmet demand from local production only Asia Pacific Silica Sand Market Largest Net Importers of Silica Sand in Asia Pacific Region Silica sand (millions of tonnes) Consumption Production 1 Sili
Slide 12: Indicative Project Timeline
INDICATIVE PROJECT TIMELINE For personal use only Approvals, offtakes and funding progressing, with development commencing early 2021 Approvals / Permitting Construction Production ▪ Bankable feasibility studies for the Muchea, Arrowsmith North and Arrowsmith Central projects ARROWSMITH Commence Pro
Slide 13: Exceptional Project Economics
EXCEPTIONAL PROJECT ECONOMICS For personal use only All three projects have exceptional standalone economics over 25 years MUCHEA ARROWSMITH ARROWSMITH $338 M NORTH CENTRAL $242 M $148 M $32.8 M $28.3 M $25.9 M NPV Capex NPV Capex NPV Capex IRR 83% IRR 79% IRR 60% VRXSILICA Source: VRX Bankable Feas
Slide 14: Significant Comparative Advantage
SIGNIFICANT COMPARATIVE ADVANTAGE For personal use only VRX’s projects have significantly lower operating costs than domestic and international peers due to competitive logistics solutions Estimated operating costs per tonne of product Muchea Arrowsmith North Arrowsmith Central ASX Listed Peer $A/t
Slide 15: Infrastructure Ready
INFRASTRUCTURE READY For personal use only Connecting VRX’s projects to Asian Silica Sand customers MUCHEA ARROWSMITH ▪ Adjacent to Brand ▪ Established rail Highway network direct to ▪ Granted Mining Geraldton Port Lease (100km) runs through project ▪ Underutilised area railway adjacent to project c
Slide 16: Silica Sands Product and Revenue Breakdown
SILICA SANDS PRODUCT AND REVENUE BREAKDOWN For personal use only Life of mine breakdown and steady state contributions to revenue Steady-state revenue contribution by product Production breakdown by product Estimated revenue per annum ($A m) (bars) Forecast product price ($US/t) (dots) Tonnes (milli
Slide 17: Robust Project Economics
ROBUST PROJECT ECONOMICS For personal use only Post-tax NPV10 of $727.8 million driven by low cost, long-life, high-margin operations Free Cash Flow Profile LOM3 Post Tax, ungeared NPV10 $727.8m $400m Sustaining Capex Post Tax, ungeared IRR 83% Development Capex Tax Paid (Geared) Payback Period 2.4
Slide 18: High Margin Operation
HIGH MARGIN OPERATION For personal use only LOM operating margin of A$20/t underpins robust project economics Price and Cost Profile LOM1 Operating Cost $A/t A$/t Royalties and Marketing 60.0 Administration Mining 4.86 53 Mining 52 52 52 52 52 52 50 Processing Processing 6.57 50.0 Product Handling S
Slide 19: Attractive Capex Sizing
ATTRACTIVE CAPEX SIZING For personal use only The three projects require low capex relative to their earnings potential Muchea Capex Arrowsmith North Capex Arrowsmith Central Capex Process Local Feed Overland Trommel, Ancil. Contin. Total Process Local Feed Trommel, Contin. Total Process Local Feed
Slide 20: Processing Flowsheet
PROCESSING FLOWSHEET For personal use only Simple processing, no chemicals and no dust, 2mtpa processing plant at each site Processing Plant Design Loader Feeder Trommel Screening Attritioning Cells Classifier ▪ Muchea, Arrowsmith North and Arrowsmith Central to each have 2 Mtpa processing capacity
Slide 21: +99.5% SiO2 with Simple Screen
+99.5% SiO2 WITH SIMPLE SCREEN For personal use only Arrowsmith North Silica Sand Project “Cream Sand” Size by Analysis Data ▪ Applying a simple Deleterious Elements by Size Fraction Simple screen upgrades to +99.5% SiO2 product 0.212mm – 1.0mm screen removes the 6% 100% majority of the impurities i
Slide 22: Environmental, Social and Governance (ESG)
ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) For personal use only VRX is delivering on its ESG responsibilities aligned to the UN’s Sustainable Development Goals CLEAN ENERGY ECONOMIC INDUSTRY SUSTAINABLE RESPONSIBLE CLIMATE REHABILITATION GROWTH INNOVATION COMMUNITIES PRODUCTION ACTION PLAN Utilisin
Slide 23: Investment Highlights
INVESTMENT HIGHLIGHTS For personal use only Well placed to capitalise Outstanding on robust market project economics outlook and demand Emerging Australian Tenure secured strategic silica sand with rapid pathway producer to financing and production VRXSILICA 23
Slide 24: Resources and Reserves
RESOURCES AND RESERVES For personal use only Mineral Resources Ore Reserves Project Classification Mt SiO₂ % Al₂O₃ % Fe₂O₃ % TiO₂ % LOI % Project Classification Product Recovery Mt SiO2 % Al 2 O 3 % Fe2 O3 % TiO2 % LOI % Indicated 29 99.6 0.09 0.03 0.07 0.22 F80 48% 10.2 99.9 0.02 0.008 0.03 0.1 Muc
Slide 25: Thank you
For personal use only Thank you Bruce Maluish Managing Director Level 1, 6 Thelma Street West Perth WA 6005 Phone: 08 9226 3780 Email: brucem@vrxsilica.com.au