Australian Mines Limited · ASX:AUZ
Australian Mines — Merger or Acquisition (October 2016)
41 slides from Australian Mines's merger presentation, Oct 10, 2016
Slide 1: An emerging global leader in scandium
For personal use only An emerging global leader in scandium Flemington Scandium-Cobalt and Sconi Scandium-Cobalt Project acquisitions Investor Presentation 10 October 2016
Slide 2: Corporate Strategy
Corporate Strategy For personal use only “Our goal is to become the world’s largest producer of scandium from primary scandium deposits” – Michael Ramsden Non-Executive Chairman www.australianmines.com.au
Slide 3: Scandium: the technology metal
Scandium: the technology metal For personal use only “… automotive is a huge potential use of scandium, perhaps the greatest one on the horizon …” Resource Investor article, May 2015 1 “Aluminium goes mass-market with Ford F-150” Alcoa 2 “Combining the benefits of metallic 3D printing with new mater
Slide 4: Australian Mines - a global scandium company
Australian Mines - a global scandium company For personal use only • Acquiring 100% interest in the Flemington Scandium-Cobalt Project in New South Wales one of the highest-grade scandium deposits in the world 4 continuation of Clean TeQ’s Syerston ore body • Acquiring 75% interest in the Sconi
Slide 5: Australian Mines - a global scandium company
Australian Mines - a global scandium company For personal use only • Development of these deposits would deliver a strong, positive cash flow to Australian Mines recent Pre-Feasibility Study (PFS) of Sconi Scandium-Cobalt Project indicated an average EBITDA of $59 million per year and a 20+ year m
Slide 6: The Projects
The Projects For personal use only SCONI PROJECT FLEMINGTON PROJECT www.australianmines.com.au
Slide 7: Flemington Scandium-Cobalt Project
Flemington Scandium-Cobalt Project For personal use only Lorem Ipsum is simply dummy text of the printing and typesetting industry. Lorem Ipsum has been the industry's standard dummy text ever since the 1500s, when an unknown printer took a galley of type and scrambled it to make a type specimen boo
Slide 8: Flemington: Continuation of Syerston deposit
Flemington: Continuation of Syerston deposit For personal use only • Mineralisation associated with the Tout Ultramafic Complex geology • Northern continuation of Clean TeQ’s (ASX: CLQ) Syerston ore body Flemington & Syerston ore bodies = ‘one-half’ the same deposit – separated only by a tenement
Slide 9: Flemington: High-grade resource with upside
Flemington: High-grade resource with upside For personal use only • One of the highest-grade scandium deposits in the world 11,12 • Mineralisation remains open to the west 13 potential to significantly increase the current Mineral Resource • Flemington tenement also covers western section of Owend
Slide 10: Flemington: Mineralisation from surface
Flemington: Mineralisation from surface For personal use only www.australianmines.com.au
Slide 11: Sconi Scandium-Cobalt Project
Sconi Scandium-Cobalt Project For personal use only Lorem Ipsum is simply dummy text of the printing and typesetting industry. Lorem Ipsum has been the industry's standard dummy text ever since the 1500s, when an unknown printer took a galley of type and scrambled it to make a type specimen book. Lo
Slide 12: Sconi: Almost ready to go
Sconi: Almost ready to go … For personal use only • Pre-Feasibility Study completed 14 20+ year mine life producing 51 tonnes of scandium oxide (Sc203) per annum average EBITDA of $59 million per year • Mining Lease granted (on 8 May 2014) • Processing plant design identified • Electricity pow
Slide 13: Sconi: DFS and approval process started
Sconi: DFS and approval process started For personal use only • Definitive (or Bankable) Feasibility Study commenced being undertaken by leading mining consultants, SRK Consulting expected to be completed within 2 years • Off-take Heads of Agreements for scandium oxide from Sconi operations prev
Slide 14: Sconi: Producing a premier quality product
Sconi: Producing a premier quality product For personal use only • Simple metallurgy - pilot plant achieving the highest possible purity of the saleable scandium oxide being 99.99% 17,18 • Low risk operation – uses a proven off-the-shelf processing plant, which should consistently achieve >97% recov
Slide 15: Sconi: Scandium + cobalt-rich layer
Sconi: Scandium + cobalt-rich layer For personal use only www.australianmines.com.au
Slide 16: Scandium operations: Peer comparison
Scandium operations: Peer comparison For personal use only Flemington Sconi Syerston Company Australian Mines Australian Mines Clean TeQ (ASX: AUZ) (ASX: AUZ) (ASX: CLQ) Market cap $11 million - $235 million (as at 6 October 2016) Resource Measured + Indicated20 Measured + Indicated21 Proved + Proba
Slide 17: What's possible for shareholders…
What’s possible for shareholders… For personal use only Clean TeQ’s share price has increased 440% over the past 6 months alone solely on the back of its Syerston scandium-cobalt project www.australianmines.com.au
Slide 18: Proposed Timeline
Proposed Timeline For personal use only • Australian Mines’ strategy: develop the Sconi Scandium-Cobalt Project to generate revenue in 2020 to be followed by production at Flemington Scandium-Cobalt Project by 2022 www.australianmines.com.au
Slide 19: Community and Social Benefits
Community and Social Benefits For personal use only • The Flemington and Sconi Projects present a significant opportunity for economic development in regional New South Wales and Queensland, both in terms of direct employment opportunities and flow-through financial benefits, in the order of: 300
Slide 20: The Transactions: Flemington
The Transactions: Flemington For personal use only • Under the terms of the Option 1 $250,000 agreement with Jervois Mining, Non-refundable $250,000 fee upon execution of the Australian Mines has been agreement for a period of 3 months granted a series of options to Option 2 $250,000 enable the Comp
Slide 21: The Transactions: Sconi
The Transactions: Sconi For personal use only • Under the terms of the agreement entered into Initial deposit $250,000 with Metallica Minerals, Payable by Australian Mines on signing of the agreement Australian Mines will provide the following Completing consideration to earn up To earn 50% interest
Slide 22: The Commodity: Scandium - the technology metal
The Commodity: Scandium - the technology metal For personal use only • Scandium, or Scandium Oxide (Sc2O3) as it is commonly marketed, is a relatively scarce, high-value mineral used to produce aluminium alloys Resulting alloys suitable for the manufacture of weldable aluminium products such as ca
Slide 23: The Market: 800% increase in demand by 2026
The Market: 800% increase in demand by 2026 For personal use only • Existing demand across multiple existing civilian and military applications, including: automotive & aircraft manufacturing solid oxide fuel cell batteries sporting equipment • Current scandium supply is produced as a by-produ
Slide 24: Automotive: the growth market for scandium
Automotive: the growth market for scandium For personal use only • The largest and most likely future growth market for scandium will be the automotive manufacturing sector • Aluminium and aluminium alloys are already used by leading global car makers to great effect (e.g., Aston Martin, Audi, BMW,
Slide 25: Scandium: Making cars greener …
Scandium: Making cars greener … For personal use only Aluminium scandium alloys enable manufacturers to build: lighter vehicles, using smaller engines to generate the same power-to-weight performance resulting in reduced fuel consumption and lower carbon emissions www.australianmines.com.au
Slide 26: … and boosting their performance
… and boosting their performance For personal use only • The suitable aluminium alloy for automotive manufacturing requires only 0.2 - 0.4% scandium content or about 1 kilogram per vehicle but: 26 delivers a weight saving of 200 kilograms in a passenger vehicle and provides a 50% improvement in
Slide 27: Million potential customers every year
68 million potential customers every year For personal use only • In 2015 alone, more than 68 million new vehicles rolled off production lines around the world29 • Australian Mines sees a huge future for scandium in automotive manufacturing, due to economic and environmental benefits of weight reduc
Slide 28: Plus potential to expand into the battery market
Plus potential to expand into the battery market For personal use only • Cobalt is a co-product of the scandium mineralisation at both Flemington and Sconi • Cobalt is a critical material used in the production of lithium-ion batteries • Demand for lithium-ion batteries is expected to grow significa
Slide 29: Flemington + Sconi: Diversifies shareholder's risk
Flemington + Sconi: Diversifies shareholder’s risk For personal use only • Scandium is an in-demand, low investment risk commodity • Australian Mines has a near term production pathway with the advanced Sconi Scandium-Cobalt Project to generate cash flow • Subsequent medium term opportunity to build
Slide 30: Australian Mines' Portfolio: Gold, Copper, Nickel
Australian Mines’ Portfolio: Gold, Copper, Nickel For personal use only Doolgunna – Marymia Project: Earning 80% Australian Mines has an air core drilling program and follow-up RC drilling planned for the Dixon gold prospect, part of its Doolgunna-Marymia Project joint venture with Riedel Resources
Slide 31: The Board
The Board For personal use only Michael Ramsden, Non-Executive Chairman (BEc, LLb, FFin) Renowned resource project financier - Michael Ramsden is a lawyer with more than 25 years' experience as a corporate advisor. He has been involved with all forms of finance, including money markets, futures trad
Slide 32: The Board
The Board For personal use only Dominic Marinelli, Non-Executive Director (BEng, MBA, PGD Sc) Acclaimed international fund raiser - Dominic Marinelli has over 20 years' of corporate fundraising experience covering a wide range of industries including resources and other emerging technologies. Mr Mar
Slide 33: Capital Structure
Capital Structure For personal use only Cash reserves 30 September 2016 $0.8 million Debt N/A Nil Ordinary Fully Paid Shares on Issue 30 September 2016 1,107 million Share Price 6 October 2016 $0.01 Contact details: Level 1, 83 Havelock Street, West Perth, Western Australia, 6005 Phone: +61 8 9481 5
Slide 34: Key Take-Away Points
Key Take-Away Points For personal use only • Commercial scale, mineable deposits of scandium are rare globally • Worldwide demand for scandium expected to increase by 800% over the next 10 years – primarily driven by the automotive industry • Scandium resources and grades recorded at Sconi and Flemi
Slide 35: Thank You
For personal use only Thank You Level 1,83 Havelock St West Perth WA 6005 +61 8 9481 5811 +61 4 6777 0016 bbell@australianmines.com.au www.australianmines.com.au
Slide 36: Forward Looking Statements
Forward Looking Statements For personal use only Australian Mines Limited (ASX: AUZ) has prepared this announcement based on information available to it at the time. No representation or warranty, express or implied, is made as to the fairness, accuracy completeness or correctness of the information
Slide 37: Competent Persons Statements
Competent Persons Statements For personal use only Flemington Scandium-Cobalt Project Information in this document that relates to Exploration Results and Mineral Resources for the Flemington Scandium-Cobalt Project is based on information compiled by Max Rangott, who is a Fellow of The Australasian
Slide 38: Footnotes
Footnotes For personal use only 1 Resource Investor, Why is everyone talking about scandium, published 4 May 2015 (http://www.resourceinvestor.com/2015/05/04/why-everyone-talking-about-scandium?page=1) 2 Alcoa, https://www.alcoa.com/car_truck/en/info_page/case_studies.asp, July 2016 3 Airbus Group,
Slide 39: Footnotes
Footnotes For personal use only 13 SRK Consulting, Internal company report to Australian Mines Limited, dated October 2016 14 Metallica Minerals Limited, Sconi Scandium Project – Positive Pre-Feasibility Study, released 28 March 2013 15 Metallica Minerals Limited, Quarterly Activities Report to 40 J
Slide 40: Footnotes
Footnotes For personal use only 25 European Aluminium Association, The Aluminium Automotive Manual 2013, http://european-aluminium.eu/media/1543/1_aam_body- structures.pdf, 1 October 2016 26 AZO Materials, http://www.azom.com/article.aspx?ArticleID=10670, 1 October 2016 27 European Aluminium Associa
Slide 41: Disclosure
Disclosure For personal use only Disclosure in accordance with ASX Listing Rule 5.23 The Mineral Resource for the Sconi Scandium-Cobalt Project contained within this document is reported under JORC 2012 Guidelines. This Mineral Resource was first reported by Australian Mines’ joint venture partner,
Australian Mines — Merger or Acquisition (October 2016) on 6ix