Arafura Rare Earths Limited · ASX:ARU
Arafura Rare Earths — Investor Presentation (December 2022)
39 slides from Arafura Rare Earths's investor presentation, Dec 5, 2022
Slide 1: Investor Presentation December 2022
5/12/2022 Not for release to US wire services or distribution in the United States. Investor For personal use only Presentation December 2022 (ASX:ARU) 1
Slide 2: Disclaimer
5/12/2022 Disclaimer For personal use only This presentation has been prepared by Arafura Rare Earths Limited (Arafura, Arafura Rare Earths 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 conjunction
Slide 3: Corporate Snapshot
5/12/2022 Corporate Nolans is a shovel-ready Capital Structure world class NdPr project in ASX Code ARU Snapshot the Northern Territory ASX Share Price (1 Dec 2022) $0.44 For personal use only Shares on Issue 1,727m NdPr is the key input for high Market Capitalisation $760.1m performance NdFeB 12 Mo
Slide 4: Equity Raising Overview
Equity Raising Overview 5/12/2022 Arafura is raising up to A$133 million (before costs) to accelerate its schedule for construction For personal use only Placement to sophisticated, professional and other institutional investors in Australia and overseas to raise A$121m (before costs) (“Placement”)
Slide 5: Nolans Project
5/12/2022 Nolans Project The Nolans Project contains all the Rare is the only advanced stage NdPr focused Earths but is particularly For personal use only project outside China that plans to enriched in the ‘Magnet Feed’ Rare Earths NdPr mine and process ore to oxide at a single site. 60 Nd 59 Pr NE
Slide 6: Project Update
5/12/2022 Project Nolans is the only advanced fully permitted Ore to Oxide project of scale outside China Update For personal use only Cornerstone Binding Offtake Agreement with Hyundai and Kia. Non-binding MoU with GE Renewable Energy to collaborate in establishment of sustainable supply chain for
Slide 7: NdPr Market & Offtake
5/12/2022 NdPr Market & For personal use only Offtake (ASX:ARU) 7
Slide 8: NdPr for Magnets Critical Component in Clean Energy Sector
5/12/2022 4/12/2022 NdPr for Magnets Critical Forecast supply gap emerging by 2030 represents in excess of 10 Nolans Projects Component in Clean Energy Sector For personal use only Wood Mackenzie forecast an Accelerated Energy Transition (AET) 1.5°C scenario (Global net zero by 2050) requires sign
Slide 9: NdPr Supply Gap
5/12/2022 4/12/2022 NdPr Supply Gap Investment in new projects is required to meet demand requirements For personal use only New supply will lag significantly behind demand growth and only a handful of non - China NdPr projects will be in production in the next 5 years Tighter regulatory and policy
Slide 10: Hyundai and Kia Binding Offtake
5/12/2022 Hyundai and 1 Hyundai Motor Company and Kia Corporation sign cornerstone binding NdPr offtake agreement for an initial seven (7) year term (with mutual agreement extension of Kia Binding For personal use only five (5) years)1. Offtake 2 Agreement provides for the supply of annual contract
Slide 11: Offtake
Offtake 5/12/2022 Arafura is targeting 85% of Planned Production1 as binding offtake for FID (Binding Offtake Target). For personal use only … Offtake Discussion Group Location NdPr Oxide (tpa)2 % of Binding Offtake Target Secured Offtake (binding agreement) Binding offtake agreement Hyundai & Kia K
Slide 12: Nolans Project Overview
5/12/2022 Nolans Project For personal use only Overview (ASX:ARU) 12
Slide 13: Close to existing key infrastructure
Close to existing key 5/12/2022 infrastructure For personal use only Stuart Highway 10km east Amadeus natural gas pipeline- adjacent to project site Water supply 25km southwest Tailings and process wastes at site Alice Springs railyard, airport and other services 135km south (ASX:ARU) 13
Slide 14: Nolans NdPr Project Status
5/12/2022 Regulatory Nolans Federal & NT Environmental Approvals secured Government and Minister support for senior debt facility NdPr For personal use only Mining Authorisation granted Status Security of Tenure & Social License to Operate Native Title Agreement Mineral License Granted Federal & NT
Slide 15: Strong Project Economics
5/12/2022 Strong Project Economics Project Update released in For personal use only Key Project Information November 2022 Mining and Production Mine Life (years) 38 NdPr Oxide (tpa) 4,440 SEG/HRE Oxide (tpa) Phosphoric Acid (tpa 54% P2O5 MGA) 474 144,393 Post-tax NPV8 of A$2.4 Product Pricing US$/kg
Slide 16: Robust Returns
5/12/2022 Potential Description Pricing Scenario KPI Analysis Low Base High Robust Returns US$/kg NdPr Oxide FOB Darwin (Offtake Contract Period) 114.20 125.50 147.20 For personal use only US$/kg NdPr Oxide FOB Darwin (LOM) 113.90 130.10 190.00 Average EBITDA (A$ per annum) 480 573 912 Scenarios bas
Slide 17: Drive to Production
5/12/2022 Drive to Production For personal use only Feb 19 Mid 25 DFS First Ore & Completed Production Mar 20 Mid 20 Aug 21 Nov 22 Jan 23 Mar 23 Apr 23 Mid 23 Early 25 Commencement Reserve Increase Native Title FEED Hyundai Offtake Long Lead FID* Construction Financial Close* Mining Agreement & Comm
Slide 18: ESG Ambitions
5/12/2022 ESG For personal use only Ambitions (ASX:ARU) 18
Slide 19: ESG Focus
5/12/2022 ESG Focus “Arafura’s ESG commitment is to be a trusted global leader and supplier of choice for sustainably mined and processed rare earth products, helping our customers deliver clean and efficient technologies. We are committed to delivering positive intergenerational economic, environme
Slide 20: Delivering to an ESG World
5/12/2022 Delivering to an ESG World For personal use only Nolans is the only NdPr focused project in Australia that plans to mine and process ore to oxide at a single site. In a changing world a focus on environmental responsibility has become paramount All environmental approvals along with Mining
Slide 21: Funding
For personal use only Funding 21 (ASX:ARU) 5/12/2022
Slide 22: Funding Strategy
5/12/2022 Funding Strategy Leverages Global Most countries targeting low carbon transport and renewable energy to achieve net-zero emissions For personal use only Focus On Critical Material Supply Europe, Japan, Korea and US recognise the need for Chains diversified and robust critical material valu
Slide 23: Progress on Funding
5/12/2022 Progress on Funding For personal use only Debt Equity Mandated Lead Arrangers (MLAs) appointed- Société Générale and NAB Potential strategic investment in Arafura to be MLAs seeking to arrange US$510m (inclusive of cost over run) debt negotiated in conjunction with final offtake through fi
Slide 24: Targeted Project Funding Structure
5/12/2022 4/12/2022 Targeted Project Project Funding MMI Grant For personal use only Requirement Funding Structure Debt Equity Nolans NdPr EFA & NAIF Project Bank- Offtake Strategic Uncovered Partner Equity Bank- ECA New Capital (ASX:ARU) Covered Guarantee 24
Slide 25: International Offer Restrictions
International 5/12/2022 Offer For personal use only Restrictions (ASX:ARU) 25
Slide 26: International Offer Restrictions
International Offer Restrictions 5/12/2022 For personal use only This document does not constitute an offer of new ordinary shares ("New Shares") of the Company in any jurisdiction in which it would be unlawful. In particular, this document may not be distributed to any person, and the New Shares ma
Slide 27: International Offer Restrictions
International Offer Restrictions 5/12/2022 For personal use only No advertisement, invitation or document relating to the New Shares has been or will be issued, or has been or will be in the possession of any person for the purpose of issue, in Hong Kong or elsewhere that is directed at, or the cont
Slide 28: International Offer Restrictions
International Offer Restrictions 5/12/2022 For personal use only United Kingdom Neither this document nor any other document relating to the offer has been delivered for approval to the Financial Conduct Authority in the United Kingdom and no prospectus (within the meaning of section 85 of the Finan
Slide 29: Contact Information
5/12/2022 Contact Information For personal use only Level 6, 432 Murray St, Perth WA 6000 34/119 Reichardt Rd, Winnellie NT 0820 +61 8 6370 2800 arafura@arultd.com www.arultd.com (ASX:ARU) 29
Slide 30: Appendices
5/12/2022 Appendices For personal use only (ASX:ARU) 30
Slide 31: Experienced Board
Experienced Board 5/12/2022 For personal use only Mark Southey Chris Tonkin Quansheng Zhang Cathy Moises Darryl Cuzzubbo NON-EXECUTIVE CHAIR NON-EXECUTIVE DIRECTOR NOMINEE DIRECTOR NON-EXECUTIVE DIRECTOR NON-EXECUTIVE DIRECTOR Mark Southey has previously held Chris Tonkin has over 35 years’ Quanshen
Slide 32: Experienced Management
Experienced Management 5/12/2022 For personal use only Gavin Lockyer Peter Sherrington Stewart Watkins Lloyd Kaiser MANAGING CHIEF FINANCIAL GENERAL MANAGER GENERAL MANAGER DIRECTOR OFFICER PROJECTS SALES & MARKETING Gavin Lockyer’s diverse, global Peter commenced employment Stewart has over 30 year
Slide 33: Long Life Development
Long Life Development 5/12/2022 For personal use only 1997 The beginning of Arafura Resources 2001 2003 2005-2007 2007 2007-2010 Acquired Tenements Maiden Resource ANSTO Testing on Pre-Feasibility Study Metallurgical HCl Pre-Leach with Processing in Testwork Darwin 2013 2011 2011-2012 2010-2012 2010
Slide 34: Long Life Asset
5/12/2022 Long Life Asset RESOURCES TONNES (m) RARE EARTHS TREO % PHOSPHATE P2O5 % NdPr ENRICHMENT % Geology For personal use only 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 World class strategic As announced on 7 June 2017. 1% TREO cut-off grade.
Slide 35: Technology Program Complete
Technology Program Complete 5/12/2022 For personal use only Flowsheet Pilot PHASE PHASE PHASE PHASE PHASE PHASE 1 2 3 4 5+6 + 7 BENEFICATION PHOSPHATE BULK ACID RARE EARTH RARE EARTH EXTRACTION PRE-LEACH BAKE PROCESSING SEPARATION 5,000kg high- Merchant grade 2,000kg pre-leach 4,100kg rare earth >99
Slide 36: Process Flowsheet
5/12/2022 Process Flowsheet For personal use only (ASX:ARU) 36
Slide 37: Waste and Water
Waste and Water 5/12/2022 Arafura’s single site processing model provides traceable product and waste management systems which is aligned Approved End to end Management with customers’ ESG expectations. For personal use only Environmental Approval and Project Costing includes all Approved end to end
Slide 38: Opportunities for Aboriginal Territorians
Opportunities for 5/12/2022 Aboriginal Territorians For personal use only Arafura will continue to consult with NT and Local governments, Indigenous organisations and the CLC to determine the capacity of the local labour market and businesses to meet the Nolans Project’s workforce and procurement ne
Slide 39: Seeking Offtake & Supply Chain ESG Credentials
5/12/2022 SEEKING Offtake & Supply Chain ACHIEVEMENT IN THESE ESG CREDENTIALS Mine RE Extraction For personal use only RE Separation Sustainable producer of NdPr to align to Toll (Australia) “Green Procurement” strategy Processing Contract NdPr Oxide Enables access to a sustainable NdPr Metal Conver
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