Reward Minerals Ltd · ASX:RWD
Reward Minerals — Proactive Investors One2One Forum, London (June 2018)
28 slides from Reward Minerals's conference presentation, Jun 26, 2018
Slide 1: Reward Minerals Limited
REWARD MINERALS Aiming to develop the LIMITED longest-life brine SOP Project outside of China Proactive Investors One2One Forum, London 26 June 2018 ASX | RWD www.rewardminerals.com
Slide 2: Forward Looking Statements & Disclaimer
FORWARD LOOKING STATEMENTS & DISCLAIMER This document includes forward-looking statements. When used in this document, the words such as “could”, “plan”, “estimate”, “expect”, “intend”, “may”, “potential”, “should”, and similar expressions are forward-looking statements. Although RWD believes that t
Slide 3: Contents
CONTENTS ►Corporate Snapshot ►What’s in a name? ►SOP 101 ►Brine 101 ►Project Overview & PFS Results ►Next steps ►Conclusions 3
Slide 4: Corporate Snapshot
CORPORATE SNAPSHOT Capital Structure 29 May 2018 ASX:RWD Ordinary Shares on Issue 135.8m Rights and Options on Issue 4m Share Price $0.195 Undiluted Market Capitalisation $26.5m Short Term Debt A$1.0m Net Cash & Equivalents1 ~A$1.7m Undiluted Enterprise Value A$25.8m Major Shareholders Name Shares (
Slide 5: What's in a name?
WHAT’S IN A NAME? Lake Disappointment, Explorer Frank Hann & Talbot 5
Slide 6: SOP Market Overview
SOP MARKET OVERVIEW SOP is the premium Potash fertiliser ►Sulphate of Potash – “SOP” or K2SO4 (44.8% K, 55.2% S) ►Provides a chloride free source of potassium and sulphur ►Essential plant macronutrient; increases yields, water retention & disease resistance ►Sulphur also important nutrient, helps pr
Slide 7: SOP 101: Growth Drivers
SOP 101: GROWTH DRIVERS World Population Arable Land 12 0.35 10 0.3 Population in billions Hectares per capita 8 0.25 0.2 6 0.15 4 0.1 2 0.05 0 0 1975 2000 2025 2050 1975 2000 2025 2050 Source: FAO, USA Today, Company Analysis Demand driven by Grow forecast: at least 4% pa ► Increasing population, d
Slide 8: SOP 101: Markets and Prices
SOP 101: MARKETS AND PRICES SOP is the premium Potash fertiliser The SOP:MOP Price premium has stayed close to U$270/t for Key Growth Markets most of the last three years China India Southeast Asia 2011 Historical Midpoint NW Europe SOP Prices LD Source: Integer Research – Used with permission Proje
Slide 9: SOP 101: Producers > 100ktpa
SOP 101: PRODUCERS > 100ktpa Over 70% of SOP supply is from high cost Mannheim and K Salts Production LD could be the largest brine SOP producer outside China Yara Kokkola – 200ktpa Compass Minerals ▪ SOP (Mannheim) Great Salt Lake – 300ktpa K+S ▪ SOP (Brine) Aktiengesellschaft– 1,200ktpa Xinjiang L
Slide 10: Brine 101
BRINE 101 Critical Success Factors for Brine-based SOP Operations Geology Operational Environment Grade and Brine chemistry Specific Yield/Permeability Jurisdiction Logistics Catchment Area Social Licence 10
Slide 11: Geology
GEOLOGY Playa, or palaeochannel? A picture paints a thousand words….. 50 There are no operational benefits or synergy from multiple, regionally dispersed deposits Use of the Lake Wells image is purely for the purpose of geological explanation only and is not an opinion of potential projects that may
Slide 12: Grade
GRADE Assuming the same operating environment, a 8.25 g/l SOP brine requires a halite evaporation pond area some 160% larger than a 13.4 g/l SOP brine Also, assuming similar seepage rates1, an evaporation pond that is 160% larger will also suffer ~60% greater seepage losses, for the same SOP output
Slide 13: Ideal Operational Environment – 1
IDEAL OPERATIONAL ENVIRONMENT – 1 Year-round evaporation is critical, not just the average….. ~ Lake Disappointment “The winter is coming….” Denser potash salts brines evaporate very slowly 13
Slide 14: Ideal Operational Environment – 2
IDEAL OPERATIONAL ENVIRONMENT – 2 Rainfall is useful for recharge, but not welcome in winter….. ~ Lake Disappointment “The winter is coming….” Denser potash salts brines evaporate very slowly 14
Slide 15: LD SOP Project – Location
LD SOP PROJECT – LOCATION ► Australia’s largest brine SOP deposit ► And highest average in-situ grade ► Ideal operating environment ► Highest Evaporation ► Lowest Rainfall ► Excellent brine chemistry ► Extensive metallurgical testwork ► Existing road access ► Process water available 5
Slide 16: LD SOP Project – Overview
LD SOP PROJECT – OVERVIEW ► 100% owned ► Prefeasibility study recently completed ► 3,000km2 tenement coverage ► Granted Mining Lease ► Miscellaneous Licence in place ► Ground Water Licence Applications submitted ► Environmental assessment well- advanced ► Registered Indigenous Land Use Agreement in
Slide 17: LD Project PFS Highlights
LD PROJECT PFS HIGHLIGHTS1 Production: ► Over 9 Mt SOP produced at over 400,000 tpa ► 27-year LOM, based on extraction of only 6% of current resource Costs: ► A$451M Total Capex incl. contingency and pre-production costs ► A$394/tonne AISC Opex (incl. royalties, overheads, etc) Economics: ► A$460M P
Slide 18: LD Project PFS Highlights Contd
LD PROJECT PFS HIGHLIGHTS CONTD1 Process: ► Over 40 phases of metallurgical testwork completed ► ERCOSPLAN independent review of mass balance and flowsheet: ► “State of the art” Timing: ► 3¼ Year development period ► One year production ramp-up Life extension: ► Excellent potential to increase produ
Slide 19: PFS Feedback
PFS FEEDBACK1 Is this where capex is going to end up Your recovery for most brine SOP Are your logistics seems low, can’t projects? achievable? you do any better? Will 133 km of trenches be Reward’s flow rates enough? are optimistic You seem to have Why has Reward taken a very escalated its SOP How
Slide 20: PFS Feedback – Responses
PFS FEEDBACK – RESPONSES ►Recovery – Agreed! ► 65% Overall Recovery Assumed, based on testwork ► Losses experienced in seepage and entrainment ► It is conservative, 70 to 75% may be achievable over time ►Capex – Thorough, conservative approach ► Estimate largely based on competitive tenders ► Enable
Slide 21: PFS Feedback – Responses Contd
PFS FEEDBACK – RESPONSES CONTD ►Financial Modelling – Used best practice methodology ► A nominal model used – price and costs are inflated (inflation effects are included) ► Ensures correct treatment of depreciation, tax and tax losses ► Quarterly periodicity allows accurate assessment of pre-produc
Slide 22: PFS Results – Cash Opex Costs
PFS RESULTS– CASH OPEX COSTS1 A$91/t A$102/t Other Opex Costs Closure – A$2/t Martu Royalty – A$7/t Road Maint - A$15/t FOB Cash Cost: Site Services - A$22/t A$362/t (US$272/t) EBITDA Margin: A$123/t ~41.9% @ US$500/t Ex-Works Cost: A$239/t (US$180/t) 1. All figures taken from 2018 PFS Study – Refer
Slide 23: LD – Development Schedule
LD – DEVELOPMENT SCHEDULE1 2018 2019 2020 2021 2022 2023 ACTIVITY Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Project Quarter Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8 Q9 Q10 Q11 Q12 Q13 Q14 Q15 Q16 Q17 Q18 Project Assessment and Approval EPA Assessment and Approval Feasibility Study Feasibility
Slide 24: Next Steps
NEXT STEPS1 Funding ► Engage with potential strategic partners Environmental Assessment ► Finalise ERD (EIA) for public review Build Corporate Depth and Capability ► The team to fund, permit, and develop LD Project Enhancements ► R&D can deliver process improvements ► Contractor consolidation benefi
Slide 25: Conclusions
CONCLUSIONS The LD Brine SOP Project is ideally positioned … PFS demonstrated the Project is technically robust ► Conservative PFS conducted to exacting standards (+/-20% accuracy) ► With successful independent process review completed (ERCOSPLAN) … and economically attractive with ► Scope to improv
Slide 26: Appendices
\ - APPENDICES
Slide 27: Experienced Board & Management
EXPERIENCED BOARD & MANAGEMENT Colin McCavana – Non-Executive Director, Chairman Daniel Tenardi – Projects Director - 30+ years experience in mining and earthmoving industries - 25+ years mining experience with various organisations including the management, acquisition and development of including
Slide 28: Competent Person Statement
COMPETENT PERSON STATEMENT This information in this report that relates to Resource Estimation and hydrogeology is based on information compiled by Mr Robert Kinnell, a hydrogeologist and Competent Person who is a Member of The Australian Institute of Mining and Metallurgy and a Fellow of the Geolog
Reward Minerals — Proactive Investors One2One Forum, London (June 2018) on 6ix