Reward Minerals Ltd · ASX:RWD
Reward Minerals — Investor Presentation (November 2020)
26 slides from Reward Minerals's investor presentation, Nov 6, 2020
Slide 1: Reward Minerals Limited Corporate Presentation
REWARD Developer of the MINERALS largest high-grade brine SOP Deposit in Australia LIMITED Corporate Presentation 5 November 2020 ASX | RWD www.rewardminerals.com
Slide 2: Forward Looking Statements & Disclaimer
FORWARD LOOKING STATEMENTS & DISCLAIMER This document includes forward-looking statements. When used in this document, the words such as “could”, “plan”, “estimate”, “expect”, “intend”, “may”, “potential”, “should”, and similar expressions are forward-looking statements. Although RWD believes that t
Slide 3: Agenda
AGENDA ►Corporate Snapshot ►Lake Disappointment Project Overview ►Potash Market Basics ►Lake Disappointment Details ►Recent Achievements ►Current/Upcoming Activities 3
Slide 4: Reward Corporate Snapshot
REWARD CORPORATE SNAPSHOT Capital Structure 21 Oct 2020 ASX:RWD EV to Drainable SOP Resource Tonne Ordinary Shares on Issue 190m Rights and Options on Issue 31.1m 24.00 Share Price $0.15 23.00 Undiluted Market Capitalisation $28.5m 22.00 Short Term Debt ~$1.3m 21.00 Cash & Equivalents ~$5.3m 20.00 U
Slide 5: Project Overview
PROJECT OVERVIEW Reward is developing the Lake Disappointment SOP Project Detailed, conservative PFS • Only SOP Project with State & Highest evaporation, Native title Federal Environmental Approval secured, ILUA Lowest rainfall in place for full production for PFS Life of Mine & beyond Largest Austr
Slide 6: Feeding the World Is a Challenge
FEEDING THE WORLD IS A CHALLENGE 12 Growing World Population Decreasing Arable Land 0.35 Hectares per Capita 10 0.3 Population in billions 8 0.25 0.2 6 0.15 4 0.1 2 0.05 0 0 1975 2000 2025 2050 1975 2000 2025 2050 ► Increasing population, decreasing arable land per capita ► World’s middle class grow
Slide 7: Sulphate of Potash Is Part of the Solution
SULPHATE OF POTASH IS PART OF THE SOLUTION “SOP” – K2SO4 ► The premium source of potassium fertiliser ► Applied to high value, speciality crops ► Some crops are chloride intolerant ► SOP is a low-chloride source of potassium ► K, one of the 3 essential plant macronutrients 7
Slide 8: Types of Potash (Potassium Fertiliser)
TYPES OF POTASH (POTASSIUM FERTILISER) The two major sources of potassium fertiliser are MOP and SOP MOP (typically 60% K2O) SOP (typically 52% K2O) ► Muriate of Potash (KCl): ~68Mtpa ► Sulphate of Potash (K2SO4): ~7Mtpa ► Current Pricing: US$200-300/t ► Current Pricing: US$400-600/t ► Applied to lo
Slide 9: Project Location
PROJECT LOCATION Relative Trucking Distance (Mine to Port) Port Reward Minerals Port Hedland Australian Potash Geraldton Salt Lake Potash Geraldton Agrimin Wyndham Kalium Lakes Fremantle - 500 1,000 1,500 Unsealed Road Sealed Road Source: Company Reports 9
Slide 10: Relative Size & Grade
RELATIVE SIZE & GRADE • Brine grade is important but so is resource geometry, which influences flow • Brine flows from large, shallow horizontal lake beds is reasonably predictable • Brine flows pumped from deep, long, narrow and meandering palaeochannels can be less predictable Note: Lake Disappoin
Slide 11: Globally Significant Tier 1 Resource
GLOBALLY SIGNIFICANT TIER 1 RESOURCE 153 Mt Indicated & Inferred Drainable SOP Resource1 – Australia’s largest 3,700 3,600 Net Evaporation Rate (mmpa) 3,500 Lake Disappointment1 3,400 RWD 3,300 AMN Lake Mackay 3,200 Beyondie KLL Project 3,100 Lake Way SO4 3,000 2,900 Lake Wells APC 2,800 5 7 9 11 13
Slide 12: LD Has the Highest Evaporation Rate
LD HAS THE HIGHEST EVAPORATION RATE No better location for a brine evaporation operation in Australia LD Project Beyondie Lake Way Lake Mackay Lake Wells Source: Company Reports 12
Slide 13: LD Has Low (Summer) Rainfall
LD HAS LOW (SUMMER) RAINFALL No better location for a brine evaporation operation in Australia LD Project Beyondie Lake Way Lake Mackay Lake Wells Source: Company Reports 13
Slide 14: Project Flow Sheet
PROJECT “FLOW SHEET” A$91/t A$102/t Other Opex Costs Closure – A$2/t Martu Royalty – A$7/t FOB Cash Cost: Road Maint - A$15/t A$335/t Site Services - A$22/t (US$258/t) EBITDA Margin: ~44.6% A$105/t @ US$500/t Ex-Works Cost: A$239/t (US$180/t) Source: All information taken from the Lake Disappointmen
Slide 15: Project Metrics – Costs & Production
PROJECT METRICS – COSTS & PRODUCTION • A$345 M, includes indirects and owners costs (+/-20%) Capital cost • A$451 M, includes contingency & pre-production costs • Lower Quartile Capital Intensity @ A$1,108/t • At least 400,000 tpa Production • ~9 Mt SOP produced over ~25 years • Less than 10% of the
Slide 16: Industry Economic Assumptions
INDUSTRY ECONOMIC ASSUMPTIONS Effective AUD Company Project Project Phase Discount Rate State Royalty SOP Price Australian 8% Post-Tax Lake Wells FEED A$916 A$0.73/t SOP Potash Nominal Under 8% Pre-tax Kalium Lakes Beyondie A$830 A$0.73/t SOP Development Nominal (?) Salt Lake Under 8% Post-tax Lake
Slide 17: Project Metrics – Economics
PROJECT METRICS – ECONOMICS Project • Pre-tax: Real NPV8 – $518 M, IRR – 19% • Post-tax: Real NPV8 – $293 M, IRR – 15% Returns • Assumptions: Price: US$500/t, FX: AUD/USD: 0.75 Sustainable • Average EBITDA Margin – 45% • Average Annual EBITDA – ~$118 M (Real) Margins • LOM EBITDA – $2,678 M (Real) •
Slide 18: 2020 Achievements – Consistent Progress
2020 ACHIEVEMENTS – CONSISTENT PROGRESS ► Entitlement Issue completed, $3.9 M raised (16 October) ► Take-up of 68% from existing shareholders ► $1.8 M shortfall being placed (3 months available to finalise) ► Bechtel commenced LD Project Review (14 October) ► Evaluate leading edge renewable energy s
Slide 19: Current/Upcoming Activities
CURRENT/UPCOMING ACTIVITIES* ► Project Activities: ▪ Bechtel Review Study (Q1 ‘21) ▪ Conduct pump-flow test program (Q1/Q2 ’21) ▪ Resource conversion/upgrade (Q2 ’21) ▪ Final metallurgical trials (Q1/Q2 ’21) ▪ Expanded pond construction trials (Q1/Q2 ’21) ▪ Final Feasibility Study (Q2-Q4 ’21?) ► Cor
Slide 20: Conclusion
CONCLUSION Reward is well positioned, its LD Brine SOP Project: ► Has Environmental Approvals and Native Title in place ► WA State and Commonwealth Approvals (2020) ► Mining Agreement with the Martu (2012) ► Is technically robust, backed by a ► Conservative PFS conducted to exacting standards (2018)
Slide 21: Anything but disappointing…..
Anything but disappointing….. 21
Slide 22: Appendices
ne ol APPENDICES F 21
Slide 23: Globally Significant Tier 1 Resource
GLOBALLY SIGNIFICANT TIER 1 RESOURCE 153 Mt Indicated & Inferred Drainable SOP Resource – Australia’s largest Assigned Nominal Dimensions (m) Volume Area Specific SOP Brine Drainable Unit Yield Hydrostratigraphic Unit Grade SOP Symbol Effective 3 6 2 6 (kg/m3) (Mt) Top Base Thick. (m x 10 ) (m x 10
Slide 24: PFS Results – Capital Costs
PFS RESULTS – CAPITAL COSTS Initial and Sustaining Capital Costs (LOM Real) AUD M Production - Trenches and Ponds 57.6 Process Plant 73.2 Infrastructure 108.8 Site Support Temporary Services 2.9 Construction Costs 59.2 Subtotal 301.7 Indirect Costs (EPC, Consultants, Commissioning) 20.0 Owners Costs
Slide 25: Source Information for Industry Economic Assumptions
SOURCE INFORMATION FOR INDUSTRY ECONOMIC ASSUMPTIONS The table showing industry economic assumptions has been sourced from the following company reports: 1. Australian Potash Ltd: AUSTRALIAN POTASH LTD ANNOUNCES DEFINITIVE FEASIBILITY STUDY OUTSTANDING OUTCOMES OVER 30 YEAR MINE LIFE, 28 August 2019
Slide 26: Compliance Statements
COMPLIANCE STATEMENTS Competent person statements: The information in this report that relates to the existing Lake Disappointment Project Mineral Resource Estimate and hydrogeology is extracted from the report titled “Lake Disappointment (LD) Project Confirmed as a Globally Significant Tier 1 Sulph
Reward Minerals — Investor Presentation (November 2020) on 6ix