Vital Metals Ltd · ASX:VML
Vital Metals — Shareholder Meeting (November 2015)
33 slides from Vital Metals's shareholder meeting presentation, Nov 24, 2015
Slide 1: Annual General Meeting 24 November 2015
For personal use only ANNUAL GENERAL MEETING 24 NOVEMBER 2015
Slide 2: Disclaimer: Competent Person's Statement
Disclaimer Competent Person’s Statement The information that refers to Mineral Resources in this presentation was prepared and first disclosed under the JORC Code 2004. It has not been updated since to comply with the JORC Code 2012 on the basis that the For personal use only information has not mat
Slide 3: Key Investment Highlights
Key Investment Highlights Watershed tungsten project is located in Queensland Australia a mining friendly country For personal use only Highly experienced management team with an average of over 20 years in the mining industry Access to a highly skilled workforce High metallurgical recovery
Slide 4: Company Overview
Company Overview Capital Structure Major Shareholders For personal use only ASX Code: VML Share price (23 Nov 2015): A$0.015 Shares on Issue: 341.8M Options on Issue: 148M Debt: A$3M Market Cap (undiluted): ~A$5.1M Directors David Macoboy: Non-Exec Chairman (Finance) 1 Year Chart Mark Strizek: Manag
Slide 5: Tungsten – accept no substitutes
Tungsten – accept no substitutes Tungsten (chemical symbol W) is a corrosion-resistant, Tungsten is a metal that has outstanding properties, For personal use only dense material with the highest melting point of any metal very hard, very tough and heat-resistant and is sought for both its mechanic
Slide 6: How tungsten is used
How tungsten is used The following industries rely on technology metals (tungsten For personal use only carbides) to achieve high productivity and reliability in use. Automotive Industry: Tungsten carbide based tools used to manufacture automobile parts Industrial Engineering: Cutting tool
Slide 7: Tungsten market
Tungsten market Tungsten pricing is based on the Metric Ton Unit (MTU), For personal use only which is equal to 1% of a metric tonne, or 10 kilograms There is no terminal market for tungsten such as the LME Reference is made to the London Metal Bulletin (LMB) which publishes twice weekly the p
Slide 8: Tungsten supply
Tungsten supply World Mine production of tungsten concentrates, Primary supply of tungsten comes from the mining of by country, 2002 to 2013 For personal use only scheelite and wolframite with concentrates accounting for around 66% of total tungsten demand with the balance coming from scrap Chin
Slide 9: Chinese supply unable to meet its own needs
Chinese supply unable to meet its own needs Chinese tungsten concentrate is used to feed domestic demand Ratio of export volume to domestic consumption For personal use only which has grown to such a level that China has been a net importer of tungsten concentrate since 2008 Now a net China’s fo
Slide 10: Tungsten demand linked to GDP
Tungsten demand linked to GDP There is a strong link between tungsten Tungsten use per Capita against GDP per Capita For personal use only consumption and GDP with consumption having grown by 4% between 2004 and 2013 Forecast Chinese Chinese tungsten consumption increased sharply consumption ove
Slide 11: Tungsten demand case study: Automobiles
Tungsten demand case study: Automobiles Automobile manufacture is not possible without the use of tungsten in For personal use only the form of tungsten carbide cutting tools Chinese tungsten demand Increasing worldwide automobile production has lead to ever 2004 to 2012 increasing demand for tu
Slide 12: Tungsten demand: past and future
Tungsten demand: past and future World tungsten demand, by country, 2004 to 2013 World forecast tungsten market supply / demand, 2004 to 2018 For personal use only forecast World tungsten demand, by end use, 2013 APT price outlook North America Europe Russia Japan China Tungsten Carbides 66% 67% 54%
Slide 13: Watershed Tungsten Project, Queensland
Watershed Tungsten Project, Queensland Large, low-cost, long life project For personal use only Fully permitted with all Mining Leases, Environmental Authority and Indigenous Land Use Agreements in place Highly visible ore with simple geology, mining and metallurgy 49.3Mt @ 0.14% WO3 for 70,
Slide 14: Watershed infrastructure
Watershed infrastructure Proposed mine site is ideally For personal use only located close to the growing centres of Cairns, Port Douglas and Mareeba Cairns has an International and domestic airport Watershed is located around 24km from the State highway and Ergon 132kv grid power line The P
Slide 15: Watershed Geology
Watershed Geology Scheelite is the sole economic tungsten bearing mineral For personal use only present within the deposit. Significantly it is a molybdenum-free variety and fluoresces a brilliant blue-white (molybdenum in scheelite attracts penalties from APT smelters) Scheelite is hosted by
Slide 16: High grade mineralisation from surface
High grade mineralisation from surface Scheelite mineralisation intersected by exploration drilling Surface sampling and RC drilling traces (grade control spacing) For personal use only can be of high grade showing scheelite mineralisation intercepts (North Zone) Within the resource database:
Slide 17: High grade mineralisation at depth
High grade mineralisation at depth Vital believes there is good potential for the future Scheelite mineralisation is For personal use only development of an underground operation at Watershed open along strike and Exploration drill testing has been able to demonstrate that at depth the tenor and
Slide 18: Open pit mining
Open pit mining Low cost open cut mining will use a 200t hydraulic excavator and 5 x 100t dump For personal use only trucks to feed a 2.5Mtpa processing plant over 10 years Highly visible ore will assist with selective mining Waste to ore ratio is around 2.87 to 1 LOM Mining studies for the
Slide 19: DFS flowsheet - low cost high recovery
DFS flowsheet - low cost high recovery Extensive metallurgical test work has been completed with over 150 For personal use only tonnes of material sourced from an underground adit and 11 metallurgical holes DFS flowsheet maximises scheelite concentrate grade, recovery and minimises power consump
Slide 20: Premium scheelite concentrate
Premium scheelite concentrate Around 3,800 tonnes of scheelite concentrate For personal use only grading 65% WO3 will be produced annually Concentrate produced using the DFS flowsheet will be very marketable as it is a high grade (>65% WO3), high quality product with most penalty elements either
Slide 21: Relentless focus - improving the bottom line
Relentless focus - improving the bottom line Market conditions conducive for up to 20% operating Watershed Tungsten Project APT Breakeven Price For personal use only cost reduction over DFS* baseline: Our target Diesel Grid electricity charges Labour availability Competitive market conditi
Slide 22: Project upside
Project 15 Targeting up to 15 year open cut mine life For personal use only Mining and processing rate assumptions unchanged from DFS* Current long term pricing assumption of Drilling target for near surface open-pitable US$325/mtu and FX US$0.70 mineralisation Boost to NPV and free cashflow
Slide 23: Cash cost curve
Cash cost curve World cost curve for tungsten production, 2013 (US$/mtu) For personal use only Vital C1 first 3 years US$124* *Notes: • Updated DFS figures reported in ASX release 22 January 2015, 29 June 2015 • An exchange rate of A$1:US$0.76 has been assumed • See accompanying Forward Looking and
Slide 24: Vital – why invest
Vital – why invest Watershed Tungsten Project is boxed up and ready to go For personal use only Excellent opportunity to leverage growing tungsten demand Australia provides low sovereign risk, attractive exchange rate and competitive mining cost base Good opportunity for growth beyond the 10
Slide 25: Appendix
Appendix Mineral Resources and Ore Reserves For personal use only Project Capital and Operating Costs Watershed financial scenarios JOGMEC JV Partner Exploration Potential
Slide 26: Mineral Resources and Ore Reserves
Mineral Resources and Ore Reserves Mineral Resources Tonnage Mt WO3% For personal use only Measured 9.5 0.16 Indicated 28.4 0.14 Sub Total: Measured and Indicated 37.8 0.15 Inferred 11.5 0.15 Total: Measured, Indicated and Inferred 49.3 0.14 Ore Reserves Tonnage Mt WO3% Proved 6.4 0.16 Probable 15 0
Slide 27: Project Capital and Operating Costs
Project Capital and Operating Costs For personal use only Project Capital Cost Estimates A$M US$M Mining 2.2 1.7 Processing Plant 105 79.8 Site Infrastructure 32.8 24.9 Working Capital 3.4 2.6 Total 143.4 109.0 C1 Cash Cost Estimates – Life of Mine A$/ t ore A$/mtu US$/mtu Mining 12.8 111 85 Process
Slide 28: Watershed financial scenarios
Watershed financial scenarios For personal use only APT US$300/mtu APT US$325/mtu APT US$350/mtu APT US$375/mtu FX US$0.76 FX US$0.76 FX US$0.76 FX US$0.76 Pre Tax Post Tax Pre Tax Post Tax Pre Tax Post Tax Pre Tax Post Tax NPV @ 8% $68M $37M $119M $73M $170M $109M $221M $145M IRR 18.3% 14.1% 25.1%
Slide 29: JOGMEC JV partner
JOGMEC JV partner Japan has a world class tungsten industry that produces high technology For personal use only tungsten metal products for domestic and international consumption Japan has no domestic tungsten mining industry and relies 100% on “JOGMEC Seeks a Stable imports to supply its indust
Slide 30: Exploration potential
Exploration potential For personal use only Name Tenement Element of Interest Tonnage Range (kt) Grade Range Comments These Exploration Watershed Deeps* ML20536 W 10,500 – 14,000 0.14 - 0.25% Targets are conceptual in nature, and there has Watershed South* MDL127 W 830 - 1,000 0.06 - 0.15% been insu
Slide 31: Exploration potential
Exploration potential For personal use only
Slide 32: Exploration potential
Exploration potential For personal use only
Slide 33: Exploration potential
Exploration potential For personal use only