Altech Batteries Limited · ASX:ATC
Altech Batteries — Altech Chemicals — Investor Presentation (April 2015)
45 slides from Altech Batteries's investor presentation, Apr 2, 2015
Slide 1: Company Presentation
Altech Chemicals Limited (ASX:ATC) For personal use only 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 & Ruby - natural form of HPA
For personal use only • Sapphire & Ruby - natural form of high purity alumina (HPA) • Formed by mother nature like diamonds • Colour from impurities Sapphire • Extremely hard – no. 9 on Mohs scale Gemstone • Third hardest mineral behind diamond • Scratch-resistant artificial sapphire glass made from
Slide 4: What is HPA?
For personal use only • Purified alumina (Al2O3) • Greater than 99.99% (4N) purity • Maximum allowable impurities of 100ppm • Smelter Grade Alumina (SGA) ~ 99.5% (5,000 ppm impurities mainly sodium) What is HPA? • Bayer Process uses sodium hydroxide (NaOH) • Sodium impurity is problem for electronic
Slide 5: 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 6: 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 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% Source: Technavio Research “2014-2018 Global High-purity Alumin
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 50.0 48.2 39.9 40.0 Demand 32.4 30.0 25.3 for HPA 20.0 19.0 14.1 10.0 0.0 2013 2014 2015 2016 2017 2018 Volume ktpa Source: Technavio Research “2014-2018 Global High-purity Alumina Market” • Rapid growth rates • Estimated supply deficit
Slide 11: Apple Watch
For personal use only • Apple moving to chic wearable vs geeky tech • Glass is all Sapphire • Wearable tech items 45.7m, up 133% Apple • By 2019, 126m units (ave growth 45%) • Apple Watch will raise the profile of wearables Watch • Profile of sapphire glass will be raised globally • Long term benefi
Slide 12: 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 from o That’s four of our proposed 4,000tpa plant Smartphones • There will be a
Slide 13: Smartphones
For personal use only • High end Vertu TI with sapphire crystal screen • Rest will follow Smartphones Sapphire Crystal Screen
Slide 14: More Sapphire Display Factories
For personal use only More Sapphire Display Factories “company (Apple) continues to cautiously evaluate the adoption of the scratch-resistant screens to ensure that there are sufficient supplies” Focus Taiwan News Channel
Slide 15: Geographic HPA Demand
For personal use only • 70% of HPA demand - Asia Pacific region (APEC) • Region for the world’s manufacturing • Altech’s HPA plant (Malaysia) well-positioned HPA to service APEC region • Transport, customer service, technical Geographic credibility Americas Demand 14% Europe, Middle East, Africa 16%
Slide 16: Current HPA Producers
For personal use only • Six largest HPA producers • 3 Chinese, 1 Japanese, 1 Sth African, 1 French Sumitomo Chemical , 3,020 Huantou, 800 Others (15), 3,570 Sasol, 1,800 Current HPA Dailian Rall, 600 Producers Nippon Light Metal, 1,100 Baikowski, 1,200 Hebei Pengda, 3,000 Xuancheng Jing Rui, Zibo Xi
Slide 17: Altech's Differentiation
ALTECH’S DIFFERENTIATION For personal use only Current HPA Producers Alumina Alumina Aluminium Refinery Smelter Dissolution 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 18: Aluminous Clay Feedstock
For personal use only • Processed by mother nature • Very low Iron (Fe) due to weathering • Silica is non reactive – easily removed Bauxite Canadian Altech Low-impurity Darling HPA HPA Range * Project Project Aluminous Clay Al2O3 (%) 34.5 22.77 30.5 Feedstock SiO2 (%) 21.5 53.29 56.3 Fe2O3 (%) 21.2
Slide 19: Meckering Aluminous Clay Deposit
For personal use only • Altech owns 100% of deposit in W Aust • Landowner agreement in place • No native title • Low environmental impact Meckering • Previously mined for kaolin – trial pit Aluminous Clay • Low stripping ratio Deposit • 65Mt JORC Resource • 130kms from Fremantle Port
Slide 20: Current HPA Feedstock Costs
For personal use only • Majors like Sumitomo, Sasol: o Aluminum alkoxide from Al metal • Chinese producers: o Choline – Dissolving Al foil in choline Current HPA • All use relatively expensive feedstock Feedstock • Altech aluminous clay 5 times cheaper than Al metal feedstock Costs Feedstock USD per
Slide 21: 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 22: Shareholder Value Drivers
For personal use only New Demand + Established Process + Great Deposit + Experienced People Shareholder Value Experienced People High Purity Altech New Demand Deposit Business (Electronics) Strategy Established HPA HCl Process
Slide 23: Development Program To Date
For personal use only • Started development work in early 2011 • Many studies and testwork programs • No issues about producing 99.99% HPA • Supporting lab pilot plant test work Development • Hydromet process not complex Program • Integrated Plant Study (IPS) completed • IPS Opex estimate of A$8.6 /
Slide 24: Altech HPA Process
ALTECH HPA PROCESS WESTERN AUSTRALIA For personal use only Campaign Mining ROM Screening Filter Press Beneficiated Kaolin To Fremantle Dryer Drum Scrubber > 0.5mm Shipping Calcined Clay Feed Storage Hydrochloric Acid Cooler Calciner HCl Gas Milling Polishing Filter 600 C thickener MALAYSIA Screening
Slide 25: Bankable Feasibility Study
For personal use only • To be a top HPA producer in the world • Launched BFS for 4,000tpa HPA • BFS completion: end Q3 2015 • In parallel, progress permitting, approvals, Bankable funding, off- take agreements etc. Feasibility • Subject to funding: Study (BFS) • In position to order long lead capita
Slide 26: Meckering Operation
MECKERING OPERATION For personal use only Hopper Feed Feed Conveyor ROM Stockpile Product Storage Workshop Dryer Filters Screening Oversize Load Out Water Raw Offices Generator
Slide 27: ROM Feed Hopper
ROM FEED HOPPER For personal use only Feed Hopper Discharge Chute Feed Conveyor
Slide 28: Drum Scrubber & Screening
DRUM SCRUBBER & SCREENING For personal use only Feed Chute Drum Scrubber Double Deck Screen
Slide 29: Screening & Oversize Rejects
SCREENING & OVERSIZE REJECTS For personal use only Oversize Conveyor Double Deck Screen Undersize Hopper
Slide 30: Oversize Load Out
OVERSIZE LOAD OUT For personal use only Double Deck Screen Oversize Conveyor Overflow Bunker Oversize Dump Truck Undersize Hopper
Slide 31: Pressure Filters
PRESSURE FILTERS For personal use only Pressure Filter Filter Feed Tank Filter Plates Filter Cake Filtrate Discharge Collection Filter Cake Conveyor
Slide 32: Kaolin Shipping
For personal use only KAOLIN SHIPPING
Slide 33: HPA Preferred Location: Tanjung Langsat, Malaysia
For personal use only • Tanjung Langsat Industrial Park, Johor Bahru (Malaysia) • Al clay feedstock shipped from WA • Operating costs ~40% lower than Australia HPA Preferred • Capital costs expected to be 50-60% lower Location • Anticipates opex in the bottom quartile of global HPA producers • Lette
Slide 34: 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 35: Malaysia HPA Operation
MALAYSIA HPA OPERATION For personal use only Cooler Silica Feed Calciner Neutralisation Acid Leach Beneficiated Kaolin Warehouse Silica Removal Purification Jet Milling & Bagging Roaster Final Product Calciner Product Product Cooler
Slide 36: Kaolin Calciner
KAOLIN CALCINER For personal use only Kaolin Feed Water Treatment Plant Bin Kaolin Calciner 600 oC Cooler Kaolin Loading Screen
Slide 37: Acid Leach & Neutralisation
ACID LEACH & NEUTRALISATION For personal use only Calcined Bin Purification Water Treatment Acid Leach Neutralisation Silica Filtration Silica Filtration Limestone
Slide 38: HPA Final Processing
HPA FINAL PROCESSING For personal use only Crystallisation 1 Centrifuge Crystallisation 3 Crystallisation 2 Waste Filtration Roaster 400 oC Calciner 1100 oC Microniser Cooler
Slide 39: 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 40: 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$0.08 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 41: Bottom Quartile Operating Costs
For personal use only • IPS pilot plant opex around A$8.6 /kg • Breakaway estimates competitors $14-$17 /kg • HPA sells for around A$23 /kg • Bottom quartile for operating costs Bottom 1. We own our feedstock Quartile 2. Large scale economy 4,000 tpa – one train for Op Costs 3. Main reactant HCl re-
Slide 42: Valuation
For personal use only EV/EBITDA Multiple Valuation • 7.5 x EV / EBITDA multiple, Price $20/kg, Opex $8/kg = $360m evaluation Breakaway DCF Valuation • Disc @10%, Price $20kg, Opex $8/kg Research = $260m Evaluation Evaluation
Slide 43: Ticking the Boxes
For personal use only Appointment of Experienced MD Appoint team for BFS Strategy to Focus on HPA Focus on Meckering Deposit Clarity of Vision HPA Location – Malaysia Divest Exploration Projects Name Change – Chemical Focus Scale Capacity of 4,000 tpa Ticking Launched Bankable Feasibility Study the
Slide 44: Thank you
For personal use only Right Place Right Time Right Feedstock Right Technology Thank you
Slide 45: 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
Altech Chemicals — Investor Presentation (April 2015) on 6ix