Arafura Rare Earths Limited · ASX:ARU
Arafura Rare Earths — Arafura Resources — Investor Presentation (February 2019)
26 slides from Arafura Rare Earths's investor presentation, Feb 7, 2019
Slide 1: Nolans Definitive Feasibility Study
For personal use only Arafura Resources Limited Nolans Definitive Feasibility Study February 2019 Corporate Presentation
Slide 2: Important Notice – Disclaimer
Important Notice – Disclaimer 2 For personal use only This presentation has been prepared by Arafura Resources Limited (Arafura, Arafura Resources or the Company) and is of a summary form only and therefore contains general background information which may not be complete. It should be read in conju
Slide 3: Introducing Arafura
Introducing Arafura 3 For personal use only Capital Structure ASX Code ARU ASX Share Price (1 February 2019) $0.045 Shares on Issue 721,403,114 Market Capitalisation $32.5m 12 Month Liquidity $11.7m Cash (31 December 2018) $9.0m Debt Nil Enterprise Value $23.5m ▪ Arafura Resources Limited (Arafura)
Slide 4: Nolans DFS Highlights
Nolans DFS Highlights 4 For personal use only ▪ Confirms Nolans as a world class NdPr project ▪ Annual NdPr production 21% higher than previously estimated at 4,357 tonnes p.a. ▪ Ultra-low cost producer at US$25.94/kg NdPr ▪ Robust economics – average EBITDA A$377m p.a., NPV10 A$729m, IRR 17.43% ▪ H
Slide 5: NdPr Market Opportunity
For personal use only NdPr Market Opportunity Arafura Resources Limited (ASX:ARU) February 2019
Slide 6: NdPr Market Opportunity
NdPr Market Opportunity 6 For personal use only ▪ Underlying demand for NdFeB magnets across all applications is forecast to grow by 6% p.a. over the period to 2030 ▪ NdFeB demand growth for EV applications is more dramatic and forecast to grow by 24% p.a. ▪ Supply-demand balance achieved through de
Slide 7: Supply & Demand Balance
Supply & Demand Balance 7 For personal use only ▪ China continues to dominate the global supply chain being the world's largest producer accounting for about 80% of NdPr for global NdFeB magnet production ▪ Supply reforms, industry consolidation and higher environmental standards will constrain Chin
Slide 8: China – From Exporter to Net Importer
China – From Exporter to Net Importer 8 For personal use only ▪ China’s domestic NdPr consumption will increase by over 20% in the next 5 years as it pursues clean energy objectives and global leadership in EV manufacturing ▪ Even on modest growth assumptions an additional 10,000 tonnes p.a. of NdPr
Slide 9: Nolans Project
For personal use only Nolans Project Arafura Resources Limited (ASX:ARU) February 2019
Slide 10: Long Life Asset
Long Life Asset 10 For personal use only RESOURCES TONNES (m) RARE EARTHS TREO % PHOSPHATE P2O5 % NdPr Enrichment % Measured 4.9 3.2 13 26.1 Indicated 30 2.7 12 26.4 Inferred 21 2.3 10 26.5 TOTAL 56 2.6 11 26.4 As announced on 7 June 2017. 1.0% TREO cut-off grade. Numbers may not compute exactly due
Slide 11: 100% Australian Domiciled
100% Australian Domiciled 11 For personal use only Arafura Resources Limited (ASX:ARU) February 2019
Slide 12: Single Site Close to Key Infrastructure
Single Site Close to Key Infrastructure 12 For personal use only ▪ Stuart Highway – 10 km east ▪ Alice Springs railyard, airport and other services – 135 km south ▪ Amadeus natural gas pipeline – adjacent to project site ▪ Water supply – 30 km south ▪ Tailings and process wastes – at site ▪ Single s
Slide 13: Process Flowsheet
Process Flowsheet 13 For personal use only Arafura Resources Limited (ASX:ARU) February 2019
Slide 14: DFS Financials & KPIs
DFS Financials & KPIs 14 For personal use only Long-life asset – 23-year mine life Significant supply – 4,357 tonnes p.a. NdPr Robust economics – EBITDA A$377m p.a. Ultra low OPEX – US$25.94/kg NdPr Capital payback – Year 5 Highly leveraged to NdPr price Arafura Resources Limited (ASX:ARU) February
Slide 15: NdPr Pricing
NdPr Pricing 15 For personal use only ▪ 80% of Nolans revenue derived from NdPr oxide Historical NdPr Oxide Price ▪ New supply pipeline will not be sufficient to meet demand ▪ EV drivetrains rely on high quality and high efficiency NdFeB magnets ▪ Roskill forecast a tight market and escalating NdPr
Slide 16: Project Implementation
For personal use only Project Implementation Arafura Resources Limited (ASX:ARU) February 2019
Slide 17: Project Timeline – 2019
Project Timeline – 2019 17 For personal use only Arafura Resources Limited (ASX:ARU) February 2019
Slide 18: Marketing & Offtake
Marketing & Offtake 18 For personal use only ▪ NdPr oxide marketing strategy underpinned by targeting customers in the high-growth NdFeB supply chain for EVs, clean energy technologies, factory automation and electronics ▪ NdPr supply imbalance will be more pronounced for stakeholders not aligned wi
Slide 19: Project Funding Strategy
Project Funding Strategy 19 For personal use only ▪ Arafura looking to secure a A$1,146m(1) in new capital to execute the Nolans Project ▪ Potential capital sources include equity, debt, JV and/or project selldown with a strategic investor ▪ DFS completion and environmental approval are critical ena
Slide 20: Production Timeline
Production Timeline 20 For personal use only Arafura Resources Limited (ASX:ARU) February 2019
Slide 21: Contact
For personal use only Contact: Level 3, 263 Adelaide Terrace Perth, WA, 6000, Australia T: +61 8 6210 7666 E: arafura@arultd.com February 2019 Corporate Presentation
Slide 22: Appendices
For personal use only Appendices Arafura Resources Limited (ASX:ARU) February 2019
Slide 23: Experienced Board
Experienced Board 23 For personal use only IAN KOWALICK NON-EXECUTIVE CHAIRMAN Ian Kowalick has qualifications in science, engineering, economics, and finance. From 1995 to 2000, he held the most QUANSHENG ZHANG senior management position in the South Australian public NON-EXECUTIVE DIRECTOR sector,
Slide 24: Experienced Management
Experienced Management 24 For personal use only PETER SHERRINGTON RICHARD BRESCIANINI CHIEF FINANCIAL OFFICER & COMPANY GENERAL MANAGER EXPLORATION & SECRETARY DEVELOPMENT Peter commenced employment with Arafura in 2008 as Richard has over 30 years’ experience in the Commercial Manager and was appoi
Slide 25: Capital Cost Breakdown & NPV Sensitivity
Capital Cost Breakdown & NPV Sensitivity 25 For personal use only Key Sensitivities Arafura Resources Limited (ASX:ARU) February 2019
Slide 26: Environmental Approvals Secured
Environmental Approvals Secured 26 For personal use only NT Environment Protection Authority (EPA) Recommends Environmental Approval “The NT EPA considers that …… the Project can be managed in a manner that ….. avoids significant or unacceptable environmental impacts and risks.” Assessment completed
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