Alara Resources Limited · ASX:AUQ
Alara Resources — Shareholder Meeting (November 2013)
21 slides from Alara Resources's shareholder meeting presentation, Nov 22, 2013
Slide 1: Presentation at 2013 AGM
Alara Resources Limited A.B.N. 27 122 892 719 Telephone | +61 8 6323 5900 Level 3, 35 Havelock Street Facsimile | +61 8 6323 5999 West Perth, Western Australia 6005 AUSTRALIA Web | www.alararesources.com Email | info@alararesources.com PO Box 1890 West Perth, Western Australia 6872 ASX/MEDIA RELEASE
Slide 2: 2013 Annual General Meeting: Managing Director's Report to Shareholders
For personal use only 2013 Annual General Managing Meeting Director’s Managing Director’s Report to Shareholders Presentation Perth, Western Australia 22 November AGM 2013 22 December 2013 Moving from Explorer to Producer Moving from Explorer to Producer Change & the Way Forward
Slide 3: Agenda
For personal use only Presentation Company Overview Agenda Company Changes Company Status Oman Update Saudi Arabia Focus Way Forward Camel herder at the Saudi Project site
Slide 4: Company Direction
Company Direction For personal use only “Alara is transitioning from being a mineral resources developer to a mine builder and operator.” “Alara will achieve its goals through open, collaborative and respectful working relationships with its employees, partners, shareholders, and stakeholders.” www.
Slide 5: Key Company Change Areas
Key Company Change Areas For personal use only Board of Directors Management Team JV Relationship Focus Market Relationship Site Security Chief, Driver & Country Manager www.alararesources.com 4 © Alara Resources Limited
Slide 6: Board Changes
Board Changes Former Board of Directors Current Board of Directors For personal use only Ian Williams AO Ian Williams AO Chairman Non-Executive Chairman • 40+ years’ mining industry experience Current • Hamersley Iron, Rio Tinto, Century Zinc and Pasminco • Awarded Order of Australia for services to
Slide 7: Management Changes
Management Changes Former Management Team Current Management Team For personal use only H. Shanker Madan Managing Director Philip Hopkins Managing Director Resigned Elvio Ruggiero Justin Richard Chief Financial Officer Country Manager – Saudi Arabia & Oman Resigned Ganesh Krishnamurthy Oman Lead Jul
Slide 8: JV Relationship, Focus, & Market Change
JV Relationship, Focus, & Market Change For personal use only JV Relationship • Open and trustful • Business based • Follow up & closure Focus • Saudi Zn Project • Equity position • Transition to production • Oman optimisation Market Relationship • Realistic • Open and frank • Balanced • Accessible
Slide 9: Early results of Company Change
Early results of Company Change For personal use only On this day… • ASX “speeding ticket” • Market down +2% • Alara up 10% In the Market • Resources are flat/declining • Metal prices declining • Limited funds for juniors Where is Alara? • Robust Projects • Market looking for these! • Board and Mana
Slide 10: Way Forward Outline
Way Forward Outline Oman Daris/Washihi Project For personal use only • Highly prospective Project • Largest Oman Cu Resource • New 1 Mtpa Scoping Study (+value) • Optimise for Alara and JV Partners • Dual divestment strategy options • Divest partially • Divest fully • Other options being evaluated K
Slide 11: Oman Overview
Oman Overview For personal use only Daris/Washihi Project Overview • Remains a highly attractive Project • Largest copper resource in Oman (see below) • Considerable upside remains • New 1Mtpa Scoping Study 90% complete • Have begun divestment work • Partial – retain 51% and progress as such • Full
Slide 12: Saudi Arabian Project Focus
Saudi Arabian Project Focus For personal use only Khnaiguiyah Project Focus & Highlights • Springboard to a production base • Robust DFS • $US 170 m NPV & IRR 23% • 2.8 year payback • Ready to move to Project finance stage • Focused on successful Project execution Right Board & Management Team. Righ
Slide 13: Why Saudi Arabia - Technical
Why Saudi Arabia - Technical For personal use only • 1970’s BRGM did full review – 5300 deposits • Saudi Geological Survey • DMMR (mines department) - +4,000 maps • New mining code 2004 – ease of operation • Resource Potential in the Arabian Shield I. 40 fully identified resources II. 15 ready to pr
Slide 14: Why Saudi Arabia - Commercial
Why Saudi Arabia - Commercial For personal use only • 2012 Saudi mining budget – largest to date • Saudi government focus I. Petroleum II. Mining III. Financial services • 20% Corporate tax (nil personal) • Royalties – nil • SIDF – 75% debt available (low rates) • Ownership – 100% permitted • Profit
Slide 15: Project Economical Highlights
Project Economical Highlights For personal use only • Project revenue: A$2,074M • Project costs : A$1,201M • EBITDA: A$873M • Cash flow (post Capex): A$467M • Capex: US$257M • Project NPV: A$170M • IRR: 23% • Weighted Avg cost of capital 9.1% • Payback: 2.8 years • Average production of 80ktpa Zn an
Slide 16: Stand Out Project Drivers
Stand Out Project Drivers For personal use only What Makes this Project Stand Out? • The Project itself (see prior slides) • The Country (see prior slides) • The fiscal regime (see prior slides) But in addition the key here is … • Eliminated risk through balanced plan • Zinc supply falls off • Zinc
Slide 17: Zn Supply & Demand Curve
Zn Supply & Demand Curve For personal use only Zinc Production Zinc supply is falling off Zinc demand is rising Wood Mackenzie quote: “Zinc will be the only metal to grow in unit value relative to its position in 2010 and will peak in 2016-2019” November 2013 www.alararesources.com 16 © Alara Resour
Slide 18: Zn Forecast Price Curve
Zn Forecast Price Curve Zinc forecast to outperform other commodities in the long term For personal use only Commodity prices: historical and forecast – rebased to 100 300 Project goes into Zinc 250 production • Demand 200 continues to grow • Pb and Zn only 150 metal to increase in value in next 5 y
Slide 19: Project Production Costs
Project Production Costs For personal use only Zinc & Copper Production Costs Zn bottom 50% of the cost curve Cu bottom 25% of the cost curve Cash costs remain to be optimised and expected to be in the bottom 30% of the cost curve upon production www.alararesources.com 18 © Alara Resources Limited
Slide 20: Project Opportunities
Project Opportunities For personal use only DFS Review Underway • EPC (turn key) tender received • Moving toward final bid process • DFS Risk & Opportunity underway • Focused on: • Project execution success (time & money) • Scheduled commissioning and ramp up • Capex reduction • Risk elimination/red
Slide 21: Alara's Way Forward - 2014
Alara’s Way Forward - 2014 For personal use only • Complete Management Team restructure • Complete the updated Scoping Study on Daris/Washihi • Finalise the considerations for Daris/Washihi assets • Finalise way forward for Khnaiguiyah Project (KMC) – JV Partner equity position • Complete finance st
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