Arafura Rare Earths Limited · ASX:ARU
Arafura Rare Earths — Arafura Resources — Investor Presentation (June 2021)
41 slides from Arafura Rare Earths's investor presentation, Jun 24, 2021
Slide 1: Equity Raising Presentation
24/06/2021 Not for release to US wire services or distribution in the United States. Equity Raising For personal use only Presentation June 2021 (ASX:ARU) 1
Slide 2: Disclaimer
24/06/2021 Disclaimer This presentation has been prepared by Arafura Resources Limited (“Arafura”, “Arafura Resources”, “ARU” or the “Company”) in relation to Arafura’s proposed placement (“Placement”) of new fully paid ordinary shares in Arafura (“New Shares”) to certain institutional For personal
Slide 3: Disclaimer
24/06/2021 Disclaimer Dollar values For personal use only All dollar values are in Australian dollars (“$” or “A$” or “AUD”) unless stated otherwise. All references to “USD” or “US$” are to the currency of the United States of America. Pro forma financial information This presentation contains pro f
Slide 4: Table of Contents
24/06/2021 Table of Contents For personal use only Page 1 Equity Raising Overview 5 2 Nolans Project Overview 8 3 Critical Minerals Supply – a Global Issue 18 4 Further Information 24 5 Key Risks 30 6 International Offer Restrictions 37 (ASX:ARU) 4
Slide 5: 1. Equity Raising Overview
24/06/2021 1. Equity Raising For personal use only Overview (ASX:ARU) 5
Slide 6: Investment Highlights
24/06/2021 The Nolans Project is a globally significant resource for rare earths with the potential Investment to supply 5-10% of the world's NdPr oxide supply and a mine life of ~38 years1. NdPr MBL to do oxide is the key input for high performance NdFeB permanent magnets Highlights For personal us
Slide 7: Equity raising overview
24/06/2021 Equity raising overview For personal use only Arafura is raising up to A$45 million (before costs) to fund front-end engineering & design (“FEED”) activities and for general working capital purposes Two tranche Placement to sophisticated, professional and other institutional investors in
Slide 8: 2. Nolans Project Overview
24/06/2021 2. Nolans For personal use only Project Overview (ASX:ARU) 8
Slide 9: Capital Structure
24/06/2021 Capital Structure Corporate ASX Code ARU Snapshot ASX Share Price (21 June 2021) $0.17 For personal use only Shares on Issue 1,171m Market Capitalisation $199.0m 12 Month Liquidity $133.8m Nolans is a shovel-ready world class Nolans aims to supply Cash* $11.0m NdPr project 5-10% of global
Slide 10: Close to existing key infrastructure
24/06/2021 Close to existing key infrastructure For personal use only Stuart Highway 10 km 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) 10
Slide 11: Attractive Project Economics
24/06/2021 Attractive Project Economics Definitive Feasibility Study Mining and Production (DFS) update released in For personal use only May 2021 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$1.4 Financial US$ A$ bi
Slide 12: Shovel Ready NdPr Regulatory, Technical, Commercial
24/06/2021 Regulatory Nolans Federal & NT Environmental Approvals secured NdPr Government and Minister support for senior debt facility For personal use only Shovel Security of Tenure & Social License to Operate Native Title Agreement Ready Mineral License Granted Federal Major Project Status Indige
Slide 13: Key Development Milestones
24/06/2021 Key Development Milestones Aligned With NdPr Market Tightening For personal use only Milestone targets are indicative and subject to change and are contingent upon funding, offtake activities and general market conditions Outcome from Advance offtake MMI1 discussions with Potential for Ta
Slide 14: Ore to Oxide at Single Site
24/06/2021 Ore to Oxide at Single Site 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. Nolans aims to be a non-Chinese supplier of choice for sustainably mined NdPr oxide. $ CAPEX & OPEX include ore – oxide proc
Slide 15: ESG - Current activities and initiatives
24/06/2021 ESG - Current activities and initiatives For personal use only “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 del
Slide 16: Offtake Strategy and NdPr Sales Targets
24/06/2021 Offtake Strategy and NdPr Sales Targets For personal use only Customer engagement targeted at NdPr users not aligned with Made in China 2025 strategy Offtake engagement advanced with end users seeking supply security with a sustainable NdPr producer NdPr oxide prices have increased and in
Slide 17: Arafura's Debt Funding Strategy
24/06/2021 Arafura’s Debt Strategy Leverages Global Funding Strategy Focus on Critical Materials For personal use only Global Government Initiatives Supply Chains Creating Momentum ➔ Morrison launches the Resources Technology Conditional letters of support1 for senior debt facility: and Critical Min
Slide 18: Critical Minerals Supply – a Global Issue
24/06/2021 Critical Minerals For personal use only Supply – a Global Issue (ASX:ARU) 18
Slide 19: NdPr Market Opportunity
24/06/2021 NdPr Market Opportunity For personal use only DEMAND Automotive sector is forecast to consume nearly 50% of NdFeB supply Supply gap is growing at a cumulative annual growth rate (CAGR) of 8% 2030 forecast assumes ~34 million EVs Market analysts forecast a supply gap that represents 109% o
Slide 20: NdPr Price Rise
24/06/2021 NdPr Price NdPr Oxide Output & Price EXW China Rise For personal use only Chinese inventory stockpiles down by ~60% since mid-2020 Chinese producers near full capacity Source: Lynas Rare Earth (LYC output), BAIINFO (NdPr oxide production), Asian Metals (NdPr Price) Supply chain issues hig
Slide 21: Supply expansion challenge
24/06/2021 Supply expansion challenge Tighter environmental and regulatory controls For personal use only 1 in China have resulted in production volumes contracting China Northern Rare Earths (largest producer) Source: Baiinfo and Argus 2 will increase production but will require plant expansion to
Slide 22: Non-China Value Chain Map
24/06/2021 Non-China Value Chain Map Non-China Value Chain China Value Chain For personal use only - Mine - RE Separation - NdFeB Alloy/ - End User/ - NdPr Metal - RE Extraction - NdPr Oxide Magnet Maker Manufacturer NdPr procurement will be central to China’s 2025 EV and renewable Export of China R
Slide 23: Nolans Project Highlights
24/06/2021 Nolans Project Highlights For personal use only $ Long life asset Extensive & Definitive Only single site Low-cost Production of enriched in successful Feasibility Australian NdPr operation NdPr oxide NdPr large-scale pilot Study focused project aligned with completed completed, with all
Slide 24: 4. Further Information
24/06/2021 4. Further Information For personal use only (ASX:ARU) 24
Slide 25: Long Life Asset
24/06/2021 Long Life Asset RESOURCES TONNES (m) RARE EARTHS TREO % PHOSPHATE P2O5 % NdPr ENRICHMENT % NdPr rich & open at depth 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 As announced on 7 June 2017. 1% TREO cut-off grade. Num
Slide 26: Rehabilitation & Environmental Approval
24/06/2021 Rehabilitation & Environmental Approval and Project Costing includes all costs for Waste Management System and Rehabilitation. Waste Management For personal use only Waste rock dumps designed to “encapsulate” naturally occurring radioactive materials (NORM) rock at mine site Mine area sur
Slide 27: ESG/Sustainability Program Plan
24/06/2021 ESG/Sustainability Program Plan For personal use only Ambition Prioritisation Action Arafura Sustainability Goal 1. Mapped the Arafura Membership application to UN stakeholder mix Global Compact submitted “Our goal is to be a trusted global leader and supplier of choice for 2. Materiality
Slide 28: Technology Program Complete
24/06/2021 Technology Program Complete 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 >9
Slide 29: Nolans Supply Chain Model
TRACEABLE 24/06/2021 Nolans Supply BLOCKCHAIN NETWORK Chain Model Mine RE Extraction For personal use only RE Separation Sustainable producer of NdPr to align (Australia) Toll Processing to “green procurement” strategy Contract NdPr Oxide Offtake Model proposes ‘Toll Processing’ of Metal Converter m
Slide 30: 5. Key Risks
24/06/2021 5. Key Risks For personal use only (ASX:ARU) 30
Slide 31: Key Risks
24/06/2021 Key Risks Risk factors For personal use only You should be aware that being issued New Shares involves various risks. This section discusses some of the key risks associated with an investment in New Shares. A number of risks and uncertainties, which are both specific to and of a more gen
Slide 32: Key Risks (cont.)
24/06/2021 Key Risks (cont.) Metallurgy and Hydrometallurgy For personal use only Testwork is used to develop the metallurgical and hydrometallurgical processes required to convert ore into final products. Scale up, technology and materials handling risks remain as the Group moves from development,
Slide 33: Key Risks (cont.)
24/06/2021 Key Risks (cont.) Reserves and resource estimates For personal use only Mineral reserve and resource estimates are expressions of judgement based on knowledge, experience and industry practice. Estimates which were valid when originally calculated may alter or become uncertain when new in
Slide 34: Key Risks (cont.)
24/06/2021 Key Risks (cont.) Legislative changes, government policy and approvals For personal use only Changes in government, monetary policies, taxation and other laws in Australia or internationally may impact the Group’s operations and the value of the New Shares. The Group requires government r
Slide 35: Key Risks (cont.)
24/06/2021 Key Risks (cont.) Force majeure For personal use only The Group's projects now or in the future may be adversely affected by risks outside the control of the Group, including fires, labour unrest, civil disorder, war, subversive activities or sabotage, floods, pandemics, explosions or oth
Slide 36: Key Risks (cont.)
24/06/2021 Key Risks (cont.) Dividends For personal use only Any future determination as to the payment of dividends by the Company will be at the discretion of the Directors and will depend on the financial condition of the Company, future capital requirements and general business and other factors
Slide 37: 6. International Offer Restrictions
24/06/2021 6. International Offer For personal use only Restrictions (ASX:ARU) 37
Slide 38: International Offer Restrictions
24/06/2021 International Offer Restrictions 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 may not be For personal
Slide 39: International Offer Restrictions (cont.)
24/06/2021 International Offer Restrictions (cont.) For personal use only Norway This document has not been approved by, or registered with, any Norwegian securities regulator under the Norwegian Securities Trading Act of 29 June 2007 no. 75. Accordingly, this document shall not be deemed to constit
Slide 40: International Offer Restrictions (cont.)
24/06/2021 International Offer Restrictions (cont.) For personal use only United States This document does not constitute an offer to sell, or a solicitation of an offer to buy, securities in the United States. The New Shares have not been, and will not be, registered under the US Securities Act of
Slide 41: Contact Information
24/06/2021 Contact Information For personal use only Level 6, 432 Murray St Perth WA 6000 Australia +61 8 6370 2800 arafura@arultd.com www.arultd.com (ASX:ARU) 41
Arafura Resources — Investor Presentation (June 2021) on 6ix