Lynas Rare Earths Limited · ASX:LYC
Lynas Rare Earths — Lynas — Shareholder Meeting (November 2003)
34 slides from Lynas Rare Earths's shareholder meeting presentation, Nov 26, 2003
Slide 1: Lynas Corporation Ltd
CORPO RATION LTD
Slide 2: What do we have?
What do we have?
Slide 3: Corporation
Corporation |
Slide 4: We have China knowledge
WE HAVE CHINA KNOWLEDGE China Knowledge Ten years experience with Chinese resources sector » Sino Mining International = Sino Gold * Lynas Corporation Limited Ability to find opportunities in China Ability to execute in China Ability to bring China demand/cost base to Australian resources
Slide 5: Why is China knowledge important
Slide 6: What is happening in China
Slide 7: We have advanced materials
WE HAVE ADVANCED MATERIALS Rare Earths - Where do they come from? Whilst Rare Earths are relatively abundant in the earths crust, they are rarely present in economic concentration They are never found as free metals but as a cocktail of Rare Earths elements that need separating for commercial use Ch
Slide 8: Rare earths applications
RARE EARTHS APPLICATIONS INYOURLIFE Polishing Powders - Cerium on » Red Phosphor for ee ae Hel colour television / (CRT & PDP) - Europium Glass Screens - a & Bulbs - Cerium - Neodymium - Yttrium
Slide 9: Rare earths applications
RARE EARTHS APPLICATIONS IN YOUR LIFE Powerful magnets (NdFeB) - Neodymium ‘Nano’ Powders for UV resistant coatings - Cerium Oxide Ceramic Capacitors - Neodymium - Lanthanum
Slide 10: Rare earths applications
RARE EARTHS APPLICATIONS IN YOUR LIFE Water Treatment Reagents - Lanthanum Automotive Catalytic Converters - Lanthanum - Cerium Non-toxic coatings (Lead Replacement) - Yttrium
Slide 11: Rare earths applications
RARE EARTHS APPLICATIONS Fuel Cells : : Lanthanum a . Cerium Yttrium Fluorescent Lighting Europium Terbium Dysprosium NiMH Batteries - Mischmetal
Slide 12: China clearly dominates rare earths, but has over capacity issues
CHINA CLEARLY DOMINATES RARE EARTHS, BUT HAS OVER CAPACITY ISSUES China’s dominance China's over-capacity Currently supplies over 90% ||. Mining 80,000 tpa for 170 of the world’s Rare Earths producers with 180,000 tpa of capacity Very competitive separation due to cheap yet skillful Most producers o
Slide 13: Lynas is building a new supply model in the rare earths industry
LYNAS IS BUILDING A NEW SUPPLY MODEL IN THE RARE EARTHS INDUSTRY Stable Supply and Price Research and Development Support Long Term Contracts Customer Refining i Open Pit Low Cost High Grade Simple Operation i High Mining and Low Total Cost Production : Environmental Standards Global Efficient Broad
Slide 14: Slide 14
Slide 15: The Mt Weld resource estimate and mine plan is complete
THE MT WELD RESOURCE ESTIMATE AND MINE PLAN IS COMPLETE Ceniral Lanthanide Deposit (4% REO cut-off) Category Tonnes (Mt) S bee Tonnes REO Measured 12 157 186,000 Indicated 5.0 11.8 583,000 Inferred 15 99 148,000 Total 77 12.0 917,000
Slide 16: The composition of Mt Weld ore is a competitive advantage
THE COMPOSITION OF MT WELD ORE IS A COMPETITIVE ADVANTAGE Mt Weld Ore Baotou By-Product Feed REO Concentration = 14.8% REO Concentration = 6% - La Oxide 23.91% - La Oxide 25.00% - Ce Oxide 47.83% - Ce Oxide 50.07% - Nd Oxide 17.93% ~ Nd Oxide 16.60% - Eu Oxide 0.45% - Eu Oxide 0.18% - Dy Oxide 0.21%
Slide 17: Composite price for Mt Weld rare earths
COMPOSITE PRICE FOR MT WELD RARE EARTHS Basic Rare Earth Product Average Price on Mt Weld Distribution (2001 to 2003) —@ FOE China OCF US G = a 6 2 Pa & 5 a P4 ae 3 a & 6 oe @ s e 6 a & eS a
Slide 18: The ore will be concentrated at Mt Weld
THE ORE WILL BE CONCENTRATED AT MT WELD Key aspects of concentration Pilot plant commenced in March Location State-of-the-art flotation technology developed which achieved excellent recoveries in bench level tesis Flotation plant to be located at mine site: = Reduced transportation costs « Supports
Slide 19: The simplicity of the concentration process reduces costs
THE SIMPLICITY OF THE CONCENTRATION PROCESS REDUCES COSTS < al PF - ” 2 4 ATONNES CRUSHING GRINDING PRINARY CRUSHING ATMINE - PRE-RAIL SECONDARY FLOTATION 4 TONNE CONCENTRATE FLOTATION Towne CONCENTRATE CLASSIFICATION MAGNETIC: 30 TONNES GRINDING seraration. 8 PRIMARY DRYING FLOTATION
Slide 20: Initially concentrate will be cracked to carbonate in China
INITIALLY CONCENTRATE WILL BE CRACKED TO CARBONATE IN CHINA Reasons to initially crack in China To deliver the Mt Weld sulte of products to our customers at least 12 months earlier To utilise available cracking Capacity with one of our processing partners in China Ability to maintain ownership via t
Slide 21: Carbonate will be separated to rare earths products in China
CARBONATE WILL BE SEPARATED TO RARE EARTHS PRODUCTS IN CHINA Our processors Broad product suite [~The RED brand Private processors Ability to produce a : range of Rare EC Track record in Earths products to international market customer RareEarthsDirect ISO 9002 qualified [| Specification Se assuranc
Slide 22: Separation in China provides many advantages
SEPARATION IN CHINA PROVIDES MANY ADVANTAGES Reasons to toil separate in China Immediate access to advanced RE processing technology to create broad product suite Minimises Capex requirement for facilities/equipment Maintains ownership/control of materia! Is consistent with the processing practices
Slide 23: Mt Weld rare earths project
MT WELD RARE EARTHS PROJECT Current situation of Bankable DFS : — Mine: - Mine plan and production schedule complete, and contractors estimate quotes received ~ Project received environmental approvals - Anthropological and archeological approvals substantially complete, final approvals due Nov. 03
Slide 24: Mt Weld rare earths project
MT WELD RARE EARTHS PROJECT Next steps : — Board Review — Finalise Chinese processing agreements ~ Go-ahead decision based on NPV of project ~ Capital investment of A$32.4m, plus working capital, plus A$8.2m contingent payment to Rio at current costs and markel conditions gives NPV of —A$90m (assumi
Slide 25: Overview of Lynas production process
Slide 26: Current value of Mt Weld project
Slide 27: What is CSG?
WHAT IS CSG? China Iron and Steel Industry and Trade Group (CSG) is large central government SOE combining * Import/export = Domestic trade = Production = Investment activities CSG was under the Ministry of Metallurgical Industry CSG has more than 100 subsidiaries, holding companies CSG is a major s
Slide 28: What is Channar?
WHAT IS CHANNAR? Channar is an iron-ore mine located 20km SE of Paraburdoo, Western Australia The Channar mine is owned by Hamersiey lron Pty Ltd (Rio Tinto) and CMEIC Since commencement of production in 1988, Channar has produced and sold more than 60 million tonnes of iron ore The major characteri
Slide 29: Why CSG, Lynas and Channar?
WHY CSG, LYNAS AND CHANNAR? Australian natural resources company focusing on supplying the China market ~ CSG in effect will be accessing Australian-sourced capital through Lynas ~ CSG currently markets the full production from the Channar project and will continue to market all of the Lynas share ~
Slide 30: Channar purchase
Slide 31: The future
Slide 32: Expansion / additional assets
Expansion / iE additional asset) _ CH
Slide 33: Rio Tinto's involvement
Slide 34: Conclusion
CONCLUSION If this strategy is fully implemented it will create a new mid cap resources group with Rare Earths base and special access to China’s growth