Slide 1: Lake Wells Potash (SOP) Project: Best Positioned for Early Market Entry
For personal use only LAKE WELLS POTASH (SOP) PROJECT Lake Wells Potash (SOP)AUSTRALIA WESTERN Project Best Positioned for Early Market Entry May 2017
Slide 2: Cautionary Statement & Disclaimer
CAUTIONARY STATEMENT & DISCLAIMER Scoping study – cautionary statement For personal use only The Study referred to in this announcement is a preliminary technical and economic investigation of the potential viability of the Lake Wells Potash Project. It is based on low accuracy technical and economi
Slide 3: Competent Persons Statement
COMPETENT PERSONS STATEMENT The information in the announcement that relates to Exploration Targets and Mineral Resources is based on information that For personal use only was compiled by Mr Jeffery Lennox Jolly. Mr Jolly is a principal hydrogeologist with AQ2, a firm that provides consulting servi
Slide 4: Significant Opportunity to Produce Potash
SIGNIFICANT OPPORTUNITY TO PRODUCE POTASH Australia is one of the best and most successful For personal use only mining jurisdictions in the world, especially Western Australia Yet, Australia imports 100% of its potash needs Farm gate prices in Australia for Sulphate of Potash (SOP) approximat
Slide 5: Strong Investment Case in a Growing Market
STRONG INVESTMENT CASE IN A GROWING MARKET 100% ownership of Lake Wells in a low risk mining For personal use only jurisdiction with proximity to domestic customers and export logistics Strong Sulfate of Potash (“SOP”) demand outlook in an undersupplied market, 2016 SOP demand ~7mt or ~10% of gl
Slide 6: The Team to Take Lake Wells Forward
THE TEAM TO TAKE LAKE WELLS FORWARD CAPITAL STRUCTURE (APC.ASX) SUBSTANTIAL SHAREHOLDERS For personal use only Shares on issue (m) 221 Board and management 2% Unlisted options (m) 30 Mark Creasy 13% 12 months share price range $0.07-0.16ps Top 20 49% Share price (25 May 2017) $0.11ps Market capitali
Slide 7: Lake Wells – A High Quality Opportunity
LAKE WELLS – A HIGH QUALITY OPPORTUNITY High returning scoping study for For personal use only production of 300ktpa premium SOP Study outcome1 LOM through two stage modular Assumed life of mine (years) 20 development – Stage 1 production of 150ktpa with a Stage 1 production rate 150,000tpa SOP re
Slide 8: Strong Fundamental Demand Outlook
STRONG FUNDAMENTAL DEMAND OUTLOOK SOP or potassium sulfate (K2SO4) is a premium SOP has significant impact on crop economics For personal use only product to MOP – Chloride free for use in chloride sensitive crops – Comprises 10% of aggregate potash market globally, significantly below the levels
Slide 9: Supportive Cost Curve and Industry Structure
SUPPORTIVE COST CURVE AND INDUSTRY STRUCTURE Industry cost curve supports the For personal use only potential for high margins from primary High cost secondary production to support pricing outcomes production brine assets, such as Lake Wells – High cost secondary Mannheim production represents ~6
Slide 10: Established Price Premium
ESTABLISHED PRICE PREMIUM Pricing history demonstrates a sustainable For personal use only Robust SOP pricing premium over MOP and growing premium over MOP Use of SOP in high value crops drives relative price inelasticity over MOP As a primary producer within close proximity to market, APC has
Slide 11: A Capital Efficient Path to Project Derisking
A CAPTIAL EFFICIENT PATH TO PROJECT DERISKING APC owners team focused on de-risking key For personal use only aspects of the project during the scoping study, STUDY DISCIPLINE KEY CONSULTANTS including; Process modelling & plant design – How big is the potential resource and how much can be effici
Slide 12: A Robust Resource at Lake Wells
A ROBUST RESOURCE AT LAKE WELLS APC has declared a Mineral Resource of For personal use only 14.7mt SOP @ 7,896mg/l based on a The path to a brine reserve specific yield methodology1 – Includes a high grade zone of 10.5mt @ 8,706mg/l Scoping study mineral inventory extracts 34% of the Indicated
Slide 13: High Level of Focus on Hydrogeology
HIGH LEVEL OF FOCUS ON HYDROGEOLOGY Lake Wells hydrogeology model comprised For personal use only four units Lake Wells resource and palaeochannel – Surficial aquifer (25% contained brine recoverable) – Upper sand (70% brine recoverable) – Middle clay aquitard (15% contained brine recoverable) – B
Slide 14: Strong Brine Extraction Test Results
STRONG BRINE EXTRACTION TEST RESULTS Brine extraction model is based on a low Lake Wells hydrogeological model For personal use only risk industry proven bore field development strategy – Commonly used in Western Australia’s Eastern Goldfield region for mining operations water supply – Large scale
Slide 15: Test Pumping Program at Lake Wells
TEST PUMPING PROGRAM AT LAKE WELLS For personal use only Site A & B test locations in plan view Site A test bore in shallow & basal aquifers Test bore pumping program at Lake Wells Site B test bore in basal aquifer 15
Slide 16: On-Playa Evaporation Ponds an Advantage
ON‐PLAYA EVAPORATION PONDS AN ADVANTAGE On-playa evaporation ponds will be built Project site layout For personal use only taking advantage of the natural topographic and lake surface structures – Geotechnical studies confirm sub-surface impermeable clay layer Harvest ponds (red) to be built off
Slide 17: Established Infrastructure to Market
ESTABLISHED INFRASTRUCTURE TO MARKET Located 189km north-northwest of Laverton For personal use only Existing road and rail network provide ready made transport logistics Lake Wells and key port locations – 300km established roads to Leonora rail siding – Leonora rail spur connects to state and
Slide 18: Lake Wells in Context – CITIC's Golmud
LAKE WELLS IN CONTEXT ‐ CITIC’s GOLMUD APC management was hosted by CITC’s COST AREA Golmud Lake Wells For personal use only at it Golmud SOP brine operation in 2016 Extraction method Bore field Bore field – Golmud is located on the Tibetan Plateau Aquifer thickness (m) 10-35 10-35 Visit highlig
Slide 19: Investment Summary
INVESTMENT SUMMARY 100% of Australia’s demand for potash is For personal use only imported: import replacement opportunity Australia will become a producer of SOP to the rest of the world Brine evaporation operations are low OPEX and SOP commands a premium to other potash types 100% project
Slide 20: Matt Shackleton contact details
For personal use only Matt Shackleton 0438 319 841 m.shackleton@australianpotash.com.au 20
Slide 21: Well Placed to Deliver on Timeline
WELL PLACED TO DELIVER ON TIMELINE 2017 2018 2019 2020 For personal use only Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Conclusion of the Native Title Act process on Mining Lease applications (11 May 2017) Construction and commissioning of pilot evaporation ponds Commence feasibility program Process
Slide 22: JORC Mineral Resource Estimate
JORC MINERAL RESOURCE ESTIMATE Drainable K Volume of Specific SOP Grade SOP Brine Concentration Aquifer Yield (mg/L) Resource Hydrogeological Unit Volume (mg/L) For personal use only Weighted Weighted MCM Mean MCM MT Mean Value Mean Value Indicated Resources Western High Grade Zone Surficial Aquifer
Slide 23: Value Accretive MOP Conversion Circuit
VALUE ACCRETIVE MOP CONVERSION CIRCUIT MOP to SOP conversion flowsheet For personal use only Utilises excess sulphate levels in brine to maximise plant and capital efficiency Low risk and proven production process – Process involves the addition of MOP + water to the SOP crystalliser unit – Prov
Slide 24: Permitted Pilot Pond Program Underway
PERMITED PILOT POND PROGRAM UNDERWAY For personal use only Pilot ponds layout APC has commenced a pilot evaporation pond program to build on data collected from the evaporation pan trials – 20 weeks from filling to reach crystallisation of mixed potash salts through evaporation – 8 weeks to recove
Slide 25: Proven Process Plant Design
PROVEN PROCESS PLANT DESIGN For personal use only Lake Wells scoping study flow sheet Process plant – Crush and screening – Conversion to schoenite – Flotation (schoenite separation) – SOP Crystallisation MOP conversion circuit to capture benefit of high sulphate levels Granulation plant – Des
Slide 26: Regulatory and Environmental Permitting
REGULATORY AND ENVIRONMENTAL PERMITING For personal use only Native Title Regulatory permitting timeline – Consultation period under the Native Title Act completed with no claims registered Department of Water – Licences in place to facilitate bore drilling and test pumping volumes Department
Slide 27: Relative Low Capex for Market Entry
RELATIVE LOW CAPEX FOR MARKET ENTRY COST AREA Pre‐production stage Pre‐production stage For personal use only 1 ‐ 150ktpa (A$m) 2 ‐ 300ktpa (A$m) Capital efficient capital development schedule Brine bore field 15.4 26.0 – Modular 2 stage development strategy with Evaporation ponds 26.4 25.5 stage
Slide 28: Lowest Quartile Operating Costs
LOWEST QUARTILE OPERATING COSTS For personal use only Scoping study positions Lake Wells in the COST AREA Pre‐production stage Pre‐production stage lowest cost quartile of the global SOP cost 1 ‐ 150ktpa (A$/t) 2 ‐ 300ktpa (A$/t) curve Reagents/consumables 127 126 Operating cost input derived fr