Altech Batteries Limited · ASX:ATC
Altech Batteries — Altech Chemicals — Non-Deal Roadshow (January 2015)
31 slides from Altech Batteries's roadshow presentation, Jan 27, 2015
Slide 1: North America Roadshow Company Presentation
Altech Chemicals Limited (ASX:ATC) For personal use only North America Roadshow Company Presentation Iggy Tan Managing Director
Slide 2: Our vision
For personal use only To be a world leading producer of high purity alumina (HPA) Our vision
Slide 3: Sapphire - natural form of high purity alumina
For personal use only • Sapphire - natural form of high purity alumina (HPA) • Formed by mother nature like diamonds • Extremely hard – no. 9 on Mohs scale Sapphire (third hardest mineral behind diamond) gemstone • Scratch-resistant artificial sapphire glass made from HPA
Slide 4: What is HPA?
For personal use only • Purified alumina or aluminum oxide (Al2O3) • Greater than 99.99% (4N) purity • Maximum allowable impurities of 100ppm • Smelter Grade Alumina (SGA) ~ 99.5% (5,000 ppm impurities) What is HPA? • Bayer Process, sodium contamination • Lots of work to upgrade SGA (99.5%) 4N 99.
Slide 5: Our Target Business: high price for purity
For personal use only Smelter Grade Alumina High Purity Alumina High Purity Alumina High Purity Alumina High price SGA 99.5% $0.4 per Kg HPA 99.9% (3N) $1 -10 per Kg HPA 99.99% (4N) $10-50 per Kg HPA 99.999% (5N) $50-150 per Kg for purity Our Target Business
Slide 6: Artificial sapphire process
For personal use only • HPA is placed in an autoclave • Heated to >2,000 oC melting point under intense pressure • Forms single crystal sapphire (boule) Artificial • Allowed to cool slowly – 22 day cycle sapphire • Diamond cutting equipment to cut sapphire shapes process • Heat & scratch resistant
Slide 7: Welcome to the world of HPA
Welcome to the world of HPA For personal use only Sodium Lamps Hybrid Cars Display Screens Abrasives Ceramic Ultrafiltration Electronic Substrates Tools Special Ceramics Semiconductors HP Refractory Polishing Cosmetics Medical Abrasives Separation Headlights Membranes LED Lighting Optical Lenses Ind
Slide 8: Uses of HPA
For personal use only High Purity Alumina Applications Semi Phosphor LEDs Other Based conductors Applications Applications Uses of HPA 99.99% 4N Smartphone Others Phosphor sapphire glass is 7% 16% a new market Semiconductors 22% LED 55% Technavio Research
Slide 9: Demand for HPA
For personal use only Technavio Research • Global HPA demand 19,040tpa in 2014 • Expected to increase to 48,230tpa by 2018 Demand • Growing at a CAGR of 28% for HPA QY Research • Global HPA demand 24,550tpa in 2014 • Expected to grow to 36,000tpa in 2017 • Growing at a CAGR of 16%
Slide 10: HPA Demand & Growth Forecast
For personal use only HPA Demand & Growth Forecast 60.0 40% 48.2 35% 50.0 35% 33% 30% 39.9 40.0 28% Demand 25% 32.4 23% 30.0 25.3 21% 20% 20.0 14.1 19.0 15% for HPA 10% 10.0 5% 0.0 0% 2013 2014 2015 2016 2017 2018 Volume ktpa Growth Rate % • Rapid growth rates • Estimated supply deficit
Slide 11: HPA demand from smartphones
For personal use only • Estimate 30g1 of HPA in an iPhone sapphire glass screen • 500 million smartphones sold per year • If sapphire glass technology was implemented HPA o It would require about 15,000tpa of HPA demand: o That’s four of our proposed 4,000tpa plant smartphones • There will be a HPA
Slide 12: Smartphones with sapphire crystal screens
For personal use only • High end Vertu TI with sapphire crystal screen • Rest will follow Smartphones sapphire crystal screen
Slide 13: HPA geographic demand
For personal use only • 70% of HPA demand is in Asia Pacific region (APEC) o Region for the world’s manufacturing • Altech’s HPA plant (Malaysia) well-positioned to service in APEC region HPA • Transport, customer service, technical geographic credibility Americas 14% demand Europe, Middle East, Afr
Slide 14: Largest HPA producers
For personal use only • 6 largest HPA producers • 3 Chinese, 1 Japanese, 1 Sth African, 1 French Sumitomo Chemical , Others (15), 3,570 3,020 HPA Huantou, 800 Dailian Rall, 600 Sasol, 1,800 Producers Nippon Light Metal, 1,100 Baikowski, 1,200 Hebei Pengda, 3,000 Xuancheng Jing Rui, Zibo Xinfumeng, 2
Slide 15: Altech's differentiation
ALTECH’S DIFFERENTIATION For personal use only Current HPA Producers Alumina Alumina Current HPA Refinery Smelter Producers Bauxite Smelter Grade Alumina 99.8% Aluminium Metal 99.99% HPA Or other high purity Al compounds ALTECH HPA PLANT One Single Process Step Aluminous Clay 99.99% HPA
Slide 16: Low-impurity aluminous clay feedstock
For personal use only • Processed and purified by mother nature • Very low impurities due to weathering • Iron levels are 0.7% vs 21% in bauxite • Silica is non reactive – easily removed Low-impurity Bauxite Canadian Altech aluminous clay Darling HPA HPA Range Project Project feedstock Al2O3 (%) 34.
Slide 17: Feedstock costs
For personal use only • Majors like Sumitomo, Sasol: o Aluminum alkoxide from Al metal (1) • Chinese producers: o Choline – Dissolving Al foil in choline • Chinese producers: Current HPA o Aluminium Hydroxide (2) with HCl producers • All use relatively expensive feedstock • Altech aluminous clay 5 t
Slide 18: Meckering aluminous clay deposit
For personal use only • Altech owns 100% of deposit • Landowner agreement in place • No native title • Low environmental impact Meckering • Previously mined for kaolin – trial pit aluminous clay • Low stripping ratio • 65Mt JORC Resource deposit • 130kms from Fremantle Port
Slide 19: Altech's HPA process
For personal use only • Use a standard HCl leach process • Standard metal extraction • Developed in 1980’s by alumina industry • Couldn’t compete with bauxite SGA costs Altech’s • Great at producing HPA (no sodium ions) HPA • No demand of HPA in 1980s process • Conventional & off the shelf equipment
Slide 20: Our success so far
For personal use only • Laboratory test work simulates process • Final 99.99% (4N) HPA produced • Integrated Plant Study (IPS) completed • Process works and is robust Our success • Towards larger commercial plant so far • IPS pilot plant opex around A$8.6/kg • HPA sells for US$20-$25/kg
Slide 21: Altech HPA Process
ALTECH HPA PROCESS WESTERN AUSTRALIA For personal use only Campaign Mining ROM Storage Shed Screening Filter Press Drum Scrubber Attritioner > 0.5mm Calcined Clay Feed Storage Hydrochloric Acid Cooler Calciner HCl Gas Milling Polishing Filter 600 C thickener MALAYSIA Screening Stage 1 Crystalisation
Slide 22: Bankable Feasibility Study
For personal use only • Target: to be a top HPA producer in the world • Launched BFS for 4,000tpa HPA o BFS completion: end Q3 2015 Bankable • In parallel, progress necessary approvals, funding, off- take agreements etc. Feasibility • Subject to funding: Study (BFS) • In position to order long lead
Slide 23: Australian Operation
AUSTRALIAN OPERATION For personal use only Diesel Generator Screening Diesel Storage Drum Trommel Office Plant Feed OS Rejects Product Storage Filtration Beneficiated Al Clay shipped to HPA Run of Mine Plant in Malaysia
Slide 24: HPA Preferred Location
For personal use only • Tanjung Langsat Industrial Park, Johor Bahru (Malaysia) • Al clay feedstock shipped from WA • Operating costs ~40% lower than Australia • Capital costs expected to be 50-60% lower HPA Preferred • Anticipates opex in the bottom quartile of the Location cost curve for internati
Slide 25: Altech's Preferred Site Location
ALTECH’s PREFERRED SITE LOCATION For personal use only HPA LOCATION • Hydrochloric acid, sulphuric acid, power & natural gas • Cement plants to purchase silica residue • Skilled labour, telecommunications • International container sea-port & Singapore • Investment incentives
Slide 26: Malaysia HPA Operation
MALAYSIA HPA OPERATION For personal use only Water Treatment Limestone Leach Silica Neutralisation Cooler Feed Calciner Silica Purification Removal Final Beneficiated Roaster Product Kaolin Feed Product Calciner Product Cooler Jet Milling & Bagging
Slide 27: Experienced board
For personal use only Highly experienced board: • Fundraising Luke Atkins Chairman • Project building • Industrial chemical processing Experienced • Alcoa Alumina management Iggy Tan board • Sherwin Alumina management Managing Director • High purity chemicals Dan Tenardi Non Exec Director Peter Bail
Slide 28: Corporate Snapshot
For personal use only Corporate Snapshot Cash Position $ ASX Code ATC Cash A$ 1.2m Shares on Issue 111.5m Debt 2 A$ 0 Share Price¹ A$0.80 ASX Share Price Performance Market Capitalisation (Undiluted) A$8.9m Options on Issue 21.5m Major Shareholders Board & Management 36% Top Twenty Shareholders 25%
Slide 29: Midpoint Evaluation of $0.25 / share
For personal use only • Midpoint Evaluation of $0.25 / share • Only 7.5% of full project value – early stage EV/EBITDA Multiple Valuation • 7.5 x EV / EBITDA multiple, Price $20/kg, Opex Breakaway $8/kg = $360m evaluation Research DCF Valuation • Disc @10%, Price $20kg, Opex $8/kg = $260m Evaluation
Slide 30: Thank you
For personal use only Right Place Right Time Right Feedstock Right Technology Thank you
Slide 31: Forward-looking Statements
For personal use only Forward-looking Statements This announcement contains forward-looking statements which are identified by words such as ‘anticipates’, ‘forecasts’, ‘may’, ‘will’, ‘could’, ‘believes’, ‘estimates’, ‘targets’, ‘expects’, ‘plan’ or ‘intends’ and other similar words that involve ris