Waratah Minerals Limited · ASX:WTM
Waratah Minerals — Battery Minerals — Investor Presentation (May 2018)
41 slides from Waratah Minerals's investor presentation, May 2018
Slide 1: Fast-tracking Montepuez & Balama Projects
Fast-tracking Montepuez & Balama Projects BATTERY MINERALS LIMITED May 2018 Investor Presentation 1
Slide 2: Less than one year to first sales and cashflow
Less than one year to first sales and cashflow 1. Terms of US$30m debt & equity funding package with agreed RCF 2. Construction underway; commissioning in Nov 2018; First shipment Q1 2019 3. Strong board & management, developed 10 mines in 10 years 4. Key plant purchased; crushing circuit, ball mill
Slide 3: Corporate Overview
Corporate Overview Share Price Jeff Dowling Ben Van Roon Non-Exec Chairman Chief Operating Officer 0.12 160 Millions Daily Volume Traded On-Market 140 Daily Close Price - BAT 0.10 David Flanagan Tony Walsh 120 Daily VolumeTraded On-Market Managing Director Company Secretary & 0.08 Close Price (A$/sh
Slide 4: Graphite is commodity in demand
Graphite is commodity in demand Prospective Global Graphite Production 4
Slide 5: Montepuez an Exceptional first Project
Montepuez an Exceptional first Project Montepuez Graphite Project 2 VES (First Module) Annual graphite production 45,000 – 50,000pa Capex (pre-production) US$42.3 M Opex (concentrate/t) US$337/t Grade mined 12% TGC Plant Type and Scale Modular, ~500ktpa Projected Payback <2 years5 Net Operating Cash
Slide 6: US$30m debt/equity funding terms agreed RCF
US$30m debt/equity funding terms agreed RCF • Term sheet signed for US$25m term loan and US$5m equity • US$25m term loan1 is for 3 years at an interest rate of 10%pa • RCF to subscribe for US$5m (~AUD$6.7m) in proposed placement1 • Proceeds will be used for construction of the Montepuez project • US
Slide 7: Montepuez on track for Nov 2018 commissioning
Montepuez on track for Nov 2018 commissioning • Mining Licence Granted • Terms of US$30m debt & equity package agreed with RCF • Temporary construction camp installed • Construction water dams built and full • Crushing circuit arrived in-country and in- transit to site • Site civil works underway •
Slide 8: Balama getting things cranking
Balama getting things cranking Balama Graphite Project 2 Scoping Study Annual graphite production 50,000 – 55,000pa Capex (pre-production) US$50 M Opex (concentrate/t) US$372/t Grade mined 10.6% TGC Plant Type and Scale Modular, ~550ktpa Projected Payback <1.5 years5 Net Operating Cash Flow >US$30 M
Slide 9: The Five Year Plan
The Five Year Plan 2019 2020 2021 2022 2023 MONTEPUEZ RAMPING SIGE! COMMISSION RAMP UP BALAMA US$soM STAGE 2 FIRST UP STAGE 2 BALAMA MONTEPUEZ STAGE 2 BALAMA EXPORTS MONTEPUEZ STAGE 2 FULL PRODUCTION START RAMP UP RAMPING UP FROM 50,000 EXCEED TO 50,000TPA = 100,000TPA BAMPING UF FROM FROM 180,000 2
Slide 10: Montepuez Exploration Target – Additional Growth 300-400MT @ 5-10% TGC
Montepuez Exploration Target – Additional Growth 300-400MT @ 5-10 % TGC • 5 VTEM target areas • Only 15-20% of targets have been drilled • VTEM conductors remain largely untested • All deposits remain open at depth and along strike • Potential for 300- 400Mt @ 5-10% TGC1 • Buffalo deposit drilling a
Slide 11: Montepuez Exploration Upside
Montepuez Exploration Upside Elephant deposit, comprised 240 holes for 4,968 metres drilled to refusal using blade RC aircore technique. The results include: ▪ EL028A, 37 metres at 13.49% TGC from surface, ▪ EL058A, 20 metres at 15.61%TGC from 2 metres, ▪ EL078A, 24 metres at 16.07% TGC from surface
Slide 12: Next 12 months
Next 12 months 1. Award key contracts for Montepuez Stage 1 2. M1 construction & commission by Q4 2018 3. Balama Feasibility Study (B1) Q3 2018 4. First Concentrate shipment Q1 2019 5. Montepuez stage 2 construction Start Q2 2019 6. Updated Resources/Reserves all projects 7. Additional offtake agree
Slide 13: Disclaimer & Competent Persons Statement
Disclaimer & Competent Persons Statement Forward Looking Statements published data for which Competent Persons consents were periodic and continuous disclosure announcements lodged with obtained. Their consents remain in place for subsequent releases the ASX, which are available on the Battery Miner
Slide 14: APPENDICES
APPENDICES • Board and management biographies • Graphite Price Trend Jan 2016 to Mar 2018 - Montepuez • Graphite Price Trend Jan 2016 to Mar 2018 - Balama Central • Flake Graphite Cost Curve • Product Marketing Strategy – 4 Offtake Agreements • Key Milestones for BAT • Graphite Price Forecast • Mont
Slide 15: Board and Management
Board and Management Jeff Dowling Non-Exec Chairman Jeff has over 6 ½ years experience as a nonexecutive chairman and non- Ben Van Roon Chief Operating Officer After graduating from the WA School of Mines in 1996, Ben has executive director, and over 30 years experience with Ernst and Young, predomi
Slide 16: Graphite Price Trend Jan 2016 to Mar 2018
Graphite Price Trend Jan 2016 to Mar 2018 Graphite commodity price have steadily Montepuez Basket Price improved since March/April 2017 Flake Graphite Price Trend Jan 16 - Mar 18 USD, Metric tonnes Data source: Benchmark Mineral Intelligence Montepuez: Battery Minerals - Flake Graphite Concentrate S
Slide 17: Graphite Price Trend Jan 2016 to Mar 2018 (cont)
Graphite Price Trend Jan 2016 to Mar 2018(cont) Balama Central Basket Price Balama Central Graphite Project Flake Graphite Price Trend Jan 16 - Mar 18 USD, Metric tonnes ▪ Higher Jumbo and Large flake product Data source: Benchmark Mineral Intelligence $2,000 ▪ Higher basket price of circa US$1,220/
Slide 18: Flake Graphite Cost Curve
Flake Graphite Cost Curve Flake Graphite Price Trend Jan 16 - Mar 18 Flake Graphite Concentrate USD, Metric tonnes Cost curve Data source: Benchmark Mineral Intelligence 2017 $2,000 (Opex cost FOB port of origin) 1000 $1,800 900 $1,600 800 $1,400 700 $1,200 Average Opex US$550 OPEX cost 600 per tonn
Slide 19: Product Marketing Strategy – 4 Offtake Agreements
Product Marketing Strategy – 4 Offtake Agreements Date Customer and nature of agreement Tonnes contracted and period*** Jan 2018 Black Dragon - Binding offtake agreement 10,000tpa for 3 years Jan 2018 Keshuo - Binding offtake agreement 10,000tpa for 3 years Jan 2018 GEM - Binding offtake agreement 1
Slide 20: Key Milestones for BAT
Key Milestones for BAT Period Milestone Status • Environmental Impact Assessment ✓ Approved • Value Engineering Study ✓ Completed • Detailed engineering, early works & procurement ✓ Commenced – contracts signed, Ongoing 2H 2017 • Port Allocation from government for Pemba port ✓ 100,000tpa export cap
Slide 21: Graphite Price Forecast
Graphite Price Forecast BAT has taken a robust, well-referenced, and conservative approach to graphite commodity price assumptions in the VES, to provide a solid basis for decision making Graphite Price Forecast Sources: UBS, BMI, Roskill 1800 1600 1400 Montepuez: 1200 Battery Minerals basket US$ 10
Slide 22: Montepuez CAPEX & OPEX
Montepuez CAPEX & OPEX COST DRIVERS CAPEX OPEX CAPEX • Small Modular Plant – 70 t/h vs 180 t/h Area US $M Area Cost $/t (Conventional) • Smaller TSF Process Plant 20.9 Mining 46.32 • Cost Effective Buildings Mining fleet and 2.1 • Modular allows for accelerated expansions Processing 128.35 maintenan
Slide 23: Montepuez Diesel, Headcount and Haulage
Montepuez Diesel, Headcount and Haulage Diesel Operations Headcount Haulage Area US $/t Area No Area US $/t Power Generation Plant 62.6 Mining 27 Montepuez to Pemba Warehouse 21.67 Power Generation Camp 7.6 Processing 46 Warehouse to Port 30.75 Mining Fleet 18.7 Maintenance 25 Pemba Port Fees 9.45 M
Slide 24: Montepuez Project Delivery Schedule
Montepuez Project Delivery Schedule Montepuez Graphite Project 2017 2018 2019 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Activity Montepuez Graphite Mine Value Engineering Study completed Project Approvals Design Procurement Construction Commissioning Ramp Up Steady State Production and Shipping Note: See ASX annou
Slide 25: Montepuez Product size and specification
Montepuez Product size and specification Montepuez Flake Graphite Concentrate Sizing Flake size Flake size % of TGC grade Flake size (mesh) (micron) concentrate Fine -100 Mesh 0 -150 71.9% 97% Medium +100 Mesh +150 -180 10.2% 96% Large +80 Mesh +180 -300 13.5% 96% Jumbo +50 Mesh +300 4.4% 96% Note:
Slide 26: Balama CAPEX & OPEX
Balama CAPEX & OPEX Area Annual Cost Unit Cost CAPEX AREA US $Mil Cost US$Mil US$/t Process Plant $19.6 Labour 4.6 82.88 Mining fleet and Maintenance $4.2 Power 3.8 68.28 workshops Camp infrastructure and fit-out $2.8 Reagents and Consumables 2.2 39.13 Tailings Storage Facility and Earthworks $4.6 M
Slide 27: Balama Central Project Delivery Schedule
Balama Central Project Delivery Schedule Balama Central Graphite Project 2018 2019 2020 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Activity Scoping Study Completed Feasibility Study Approvals and Community Design Procurement and Fabrication Construction Commissioning Ramp Up Note: See ASX announcement date
Slide 28: Balama Central: Product size and specification
Balama Central: Product size and specification Balama Central: Flake Graphite Concentrate Sizing Flake size Flake size % of TGC grade Flake size (mesh) (micron) concentrate Fine -100 Mesh 0 -150 37% 97% Medium +100 Mesh +150 -180 9% 96% Large +80 Mesh +180 -300 25% 96% Jumbo +50 Mesh +300 29% 96% No
Slide 29: Graphite Price drivers
Graphite Price drivers Graphite Price Drivers Source – UBS June 2017 t 29
Slide 30: CRU – Graphite Demand (1)
CRU - Graphite Demand (1) Figure 5 Total graphite demand by market segment, kt 4500 5 4000 - 3500 3000 2500 ——— 2000 + 1500 1000 500 + 0 ’ ’ ’ ’ ' 2017 2018 2019 2020 2021 2022 2023 Electrodes ™ Carburisation Refractory & Foundry Lubricants Friction products Li-ion batteries Graphite shapes @ Expand
Slide 31: CRU – Graphite Demand (2)
CRU - Graphite Demand (2) Figure 8 Graphite demand by source, kt 4500 - 4000 5 3500 + 3000 + 2500 + 2000 + 1500 4 1000 500 0 2017 2018 2019 2020 2021 2022 2023 m Natural graphite m Synthetic graphite 31
Slide 32: CRU – Graphite Demand (3)
CRU - Graphite Demand (3 Figure 9 Natural graphite end use demand, kt 2500 5 1500 | mw a = 1000 + mma 500 + 0) r r r r r 1 2017 2018 2019 2020 2021 2022 2023 m Refractory & Foundry @ Carburisation Lubricants @ Friction products Li-ion batteries Graphite shapes m Expanded graphite Carbon brushes m Ot
Slide 33: Graphite Price drivers
Graphite Price drivers Source – Blackrock Investment Institute April 2017 t 33
Slide 34: Graphite Price drivers
Graphite Price drivers How much graphite is needed for electric car take-up? • A typical EV or HEV has a 30-100kWh battery pack (Tesla Model 3 have >60kWh) • Each battery requires ~1.1kg of graphite per kWh. • A Nissan Leaf with a 24kWh battery would need 27kg of graphite • A Tesla Model S with a 85
Slide 35: This is why we are in graphite! Demand will exceed supply by 2020
This is why we are in graphite! Demand will exceed supply by 2020 Mega Chinese anode plant projects alone exceed current supply 35
Slide 36: Montepuez Ore Reserves and Mineral Resources
Montepuez Ore Reserves and Mineral Resources • Ore Reserve Estimate January 2017 for Buffalo and Elephant deposits is 41.4Mt @ 8.80% TGC for 3.64Mt of graphite reported at a cut-off grade of 4% TGC • Total Mineral Resource January 2017 for Buffalo and Elephant deposits is 105.9Mt @ 7.74% TGC for 8.2
Slide 37: Montepuez Mineral Resource Statement
Montepuez Mineral Resource Statement Total Mineral Resource January 2017 for Buffalo and Elephant deposits is 105.9Mt @ 7.74% TGC for 8.2Mt of graphite reported at a 2.5% TGC cut-off ELEPHANT RESOURCE @ 2.5% TGC cut-off - January 2017 Contained Contained Tonnes TGC V2O5 Classification Type Graphite
Slide 38: Balama Central Mineral Resource
Balama Central Mineral Resource Total Mineral Resource for Balama Central is 32.9 million tonnes at 10.2 per cent TGC for 3.36Mt of graphite reported at a 6.0% TGC cut-off and includes Indicated Resources of 26Mt @ 10.3% TGC for 2,733Kt of graphite reported at a 6.0% TGC cut-off BALAMA CENTRAL GRAPH
Slide 39: Mozambican - Foreign Direct Investment
Mozambican - Foreign Direct Investment Corporate Tax - 32% Investment Incentives / protection • Legal protection for investors (incl. property/ intellectual rights) • No restrictions on loans/interest payments abroad • Tax incentives for projects (exemption from payment of customs duties and tax sta
Slide 40: Mozambique: a favourable jurisdiction
Mozambique: a favourable jurisdiction • Montepuez Mining Licence Application Submitted: Approval imminent • Environmental Impact Assessment completed and accepted • July 2017: A secured allocation of 100,000tpa port capacity with Portos e Caminhos de Ferro de Moçambique (CFM) at port of Pemba. • CFM
Slide 41: Mozambique - Snapshot
Mozambique - Snapshot OVERVIEW RESOURCES Stable multi-party democracy since 1994 Energy - Hydro, Gas and Thermal Population - 27 million Minerals - Coal, Gold, Graphite, Heavy Sands, ECONOMY Rare Earths, Precious Stones One of Africa's fastest growing economies STRATEGIC POSITION Access to markets –