Alkane Resources Ltd · ASX:ALK
Alkane Resources — Shareholder Meeting (November 2015)
32 slides from Alkane Resources's shareholder meeting presentation, Nov 18, 2015
Slide 1: Annual General Meeting
For personal use only Annual General Meeting Sydney 18 November 2015 Shareholder Presentations Melbourne 19 November and Perth 20 November
Slide 2: Disclaimer
Disclaimer For personal use only This presentation contains certain forward looking statements and forecasts, including possible or assumed reserves and resources, production levels and rates, costs, prices, future performance or potential growth of Alkane Resources Ltd, industry growth or other tre
Slide 3: For personal use only
For personal use only © 2015 Alkane Resources Ltd 4
Slide 4: Board & Management
Board & Management For personal use only Board John S F Dunlop (Chairman) BE(Min), MEngSc(Min). Mining engineer D Ian Chalmers (Managing Director) MSc. Geologist Ian J Gandel (Director) LLB, BEc. Businessman Anthony D Lethlean (Director) BAppSc. Geologist/Banker Karen Brown (Company Secret
Slide 5: Alkane in the Central West NSW
Alkane in the Central West NSW For personal use only Peak Hill Gold Mine 1996 - 2005 Tomingley Gold Operations Production commenced 2014 Dubbo Zirconia Project Pre-construction Advanced exploration projects at Bodangora – Kaiser (Au – Cu) Wellington (Cu – Au) Elsienora (Au – base metals, barite) © 2
Slide 6: FY 2015 Snapshot
FY 2015 Snapshot For personal use only Tomingley Gold Operations in steady state 3% • Production 69,612 ounces • Gold revenue A$101.94 million 17% • Operating cash flow A$28.6 million • Capital A$15.9 million (incl deferred waste A$11.0M) 46% FY15 Financials 10% • Total income A$102.5 million • Loss
Slide 7: Tomingley Gold Operations FY15
Tomingley Gold Operations FY15 For personal use only $115 million funded without debt • Resource – 688,000oz of gold (21 Sept 2015) • Mine Method – open cut & underground • Mine Life – 6.5 years (targeting 10+ yrs) • Processing plant throughput – 1.0Mtpa • 2.00g/t Au and 93% recovery standard CIL CI
Slide 8: TGO Site
TGO Site For personal use only CIL Processing Plant Caloma open cut October 2015 © 2015 Alkane Resources Ltd 9
Slide 9: TGO Q1 FY16
TGO Q1 FY16 For personal use only Continuous Improvement Programs Mining: TGO has been working collaboratively over the last 12 months with its fleet hire equipment provider, Emeco, to improve overall mining productivity. This project, “Emeco Better Solution”, has to date delivered a 12% increase in
Slide 10: TGO Mine Schedule
TGO Mine Schedule For personal use only Wyoming Three Caloma Two and Caloma Wyoming One FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 Wyoming Three Wyoming One Wyoming One Underground Caloma Caloma Underground Caloma Two Peak Hill Underground ?? ? Exploration ?? ? Anticipated production oz 65-70
Slide 11: TGO Resource Expansion
TGO Resource Expansion For personal use only Additional Resource Potential Expand Wyoming One underground Caloma and Caloma Two underground TGO Peak Hill - substantial gold copper mineralization (non JORC 2012 Classification) Myalls underground (historic gold production) PHGM Wyoming Two and Three u
Slide 12: Dubbo Zirconia Project
Dubbo Zirconia Project For personal use only Located 400km northwest of Sydney within a region that has substantial infrastructure – roads, rail, power, gas, light engineering, people (~100,000), being a large agricultural and mining area A very large polymetallic resource of the metals zirconium ha
Slide 13: Zirconium Industry
Zirconium Industry For personal use only Zircon Demand by End Use (2015 ~ 1 million tonnes) Other 3% Foundry 12% Ceramics 47% Chemicals 21% Refractory 17% Global market US$2-3B China dominates downstream 2015 producer zircon inventories still high zirconium industry (85-90%) Market expected to stabi
Slide 14: Zirconium Applications
Zirconium Applications For personal use only Auto exhaust catalysts – ceria stabilised zirconia Thermal barrier coatings – yttria stabilised zirconia for jet and industrial gas turbines, and many other applications Substantial growth in advanced ceramics and cubic zirconia (jewellery) Current world
Slide 15: Hafnium Industry
Hafnium Industry For personal use only Super Alloys - 73% of 2015 supply By-product from zirconium metal • Depends on nuclear industry Prices escalating through demand by aerospace industries 2014 into 2015 © 2015 Alkane Resources Ltd Source: Modified after Lipmann Walton & Co Ltd 2015 16
Slide 16: Hafnium Applications
Hafnium Applications For personal use only Many innovations developing around hafnium Addition of 1%-2% Hf to NiCo alloys raises operating temperature from 1,400oC to 2,000oC providing fuel Reflective HfO2-SiO2 layer pushes energy in to space and efficiencies and emission minimisation. does not add
Slide 17: Niobium Industry
Niobium Industry For personal use only 90% of Nb used in standard grade ferro-niobium for the production of high strength low alloy (HSLA) steels World production estimated at 80,000t Nb in 2012. CBMM in Brazil accounts for 85% Global market US$3-4B. Price stability since 2008, including GFC CAGR an
Slide 18: Rare Earth Industry
Rare Earth Industry For personal use only REE Demand 2016 by Application US$3-5B Global market Other 136,000t Annual consumption 2014 Catalysts 8% 18% 3-5% Annual growth estimates Ceramics 85-90% REE produced by China 5% Glass 6% Phosphors 5% Permanent magnet dominant consumer and growth ~ 8% pa Ann
Slide 19: Rare Earth Applications – Permanent Magnets
Rare Earth Applications – Permanent Magnets For personal use only Permanent Magnets – major growth • Hybrid and electric cars • Wind turbine • Industrial gas turbines • Marine electric motors Thysen Krupp Maritim Permasyn marine propulsion systems © 2015 Alkane Resources Ltd Source: Siemens, Shin-Et
Slide 20: China's REE dominance
China’s REE dominance For personal use only The value increases from US$4B Minerals; US$40B Materials; US$400B Components; to US$4T Systems Is the rest of the world prepared to accept China’s domination of high-tech and advanced materials manufacture? Renewable Source: Karl Gerald van den Boorgart,
Slide 21: DZP 2015 Key Milestones
DZP 2015 Key Milestones For personal use only State Approval 28 May Federal Department of Environment Approval 25 August Front End Engineering Design (FEED) completed 27 August Revamped flowsheet, with specific rare earth separation on site, improved waste management and reduced water consumption Te
Slide 22: Process Flowsheet – 2015 Changes
Process Flowsheet – 2015 Changes For personal use only Addition of hafnium circuit Further onsite separation of rare earths Replacement of evaporation ponds with in-process evaporation © 2015 Alkane Resources Ltd 23
Slide 23: Product Output
Product Output For personal use only 6,664 tpa Rare earth chemical concentrate 95% REO (REO units) Product Output 16,374 tpa Zirconium as ZBC (carbonate) & zirconia 99% ZrO2 (ZrO2 units) Assumed 50% 200 tpa Hafnium as HfO2 recovery (Hf units) 1,967 tpa Niobium as ferro-niobium 65% Nb (Nb units) Tonn
Slide 24: Rare Earth Output
Rare Earth Output For personal use only DZP REE SX Toll treatment – off site Rare Earth Concentrates La2O3 1,441 tpa La / Ce CeO2 2,367 tpa Pr6O11 237 tpa Pr / Nd Nd2O3 921 tpa Sm2O3 112 tpa Sm / Eu / Gd Eu2O3 3 tpa Gd2O3 107 tpa Tb / Dy / Ho / Er / Tb4O7 14 tpa Tm / Yb / Lu Dy2O3 122 tpa Y (2/3N) Y
Slide 25: 2015 Financial Summary
2015 Financial Summary For personal use only Front End Engineering Design (FEED) completed August 2015 Capex A$1.3B / A$103M contingency Revenue A$550 - $600Mpa Opex A$260Mpa EBITDA A$290 - $340Mpa 20 year NPV A$1.2B (8%) and 17.5% IRR Revenue based upon Chinese domestic rare earth prices and curren
Slide 26: Marketing and Off-take
Marketing and Off-take For personal use only Joint venture with Treibacher Industrie AG to produce and market ferro-niobium Finalising a zirconium product marketing agreement for world wide sales Advancing the off-site rare earth processing agreement to enable marketing of separate rare earth produc
Slide 27: Funding Strategy
Funding Strategy For personal use only Investment at Project Government Commercial Bank Equity Capital Level Assistance Programs Debt (CBD) Markets (ALK) • Strategic • ECA Style Funding • Advisors: SMBC & • Advisors: Credit Suisse Investment(s) • Lead coordinator: Credit Suisse & Petra Capital • Adv
Slide 28: Timetable
Timetable For personal use only FEED provided ~30% detail design and the Project engineering design is now at construction stage awaiting finance. Estimates of times are indicative only and are subject to change. Alkane reserves the right to vary the timetable without notice. © 2015 Alkane Resources
Slide 29: The DZP Advantage
The DZP Advantage For personal use only Internationally strategic with supply of several critical metals from non-Chinese sources Business case has robust revenues, even at current Chinese domestic RE and Zr prices Full spectrum of rare earth magnet materials – neodymium, praseodymium, dysprosium an
Slide 30: 2015 Awards
For personal use only 2015 Awards 2015 Women in Resources National Awards NSW Winner - Simone Painter – Processing Manager TGO NSW Minerals Council Environment and Community ‘Leadership’ Thank you category - Mike Sutherland General Manager NSW NSW Minerals Council Environment Excellence Category – A
Slide 31: DZP Resources and Reserves
DZP Resources and Reserves For personal use only Dubbo Zirconia Project – Mineral Resources Toongi Tonnage ZrO2 HfO2 Nb2O5 Ta2O5 Y2O3 REO Deposit (Mt) (%) (%) (%) (%) (%) (%) Measured 35.70 1.96 0.04 0.46 0.03 0.14 0.75 Inferred 37.50 1.96 0.04 0.46 0.03 0.14 0.75 Total 73.20 1.96 0.04 0.46 0.03 0.1
Slide 32: Resource & Reserves: Tomingley
Resource & Reserves: Tomingley For personal use only TOMINGLEY GOLD PROJECT MINERAL RESOURCES (as at 30 June 2015) MEASURED INDICATED INFERRED TOTAL Total Gold DEPOSIT Tonnage Grade Tonnage Grade Tonnage Grade Tonnage Grade (Kt) (g/t Au) (Kt) (g/t Au) (Kt) (g/t Au) (Kt) (g/t Au) (Koz) Open Pittable
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