Energy Resources Of Australia Ltd. Class A · ASX:ERA
Energy Resources Of Australia Ltd. Class A — Investor Presentation (November 2019)
36 slides from Energy Resources Of Australia Ltd. Class A's investor presentation, Nov 15, 2019
Slide 1: Capital Raising Presentation
For personal use only Capital Raising Presentation 15 November 2019 Not for release or distribution in the United States www.energyres.com.au
Slide 2: Important notices
Important notices This presentation has been prepared by Energy Resources of Australia Ltd ABN 71 008 550 865 Financial data For personal use only (ERA). It contains general information about ERA's activities as at the date of this presentation. It is information given in summary form and does not p
Slide 3: Important notices (cont'd)
Important notices (cont’d) Forward-looking statements Investment risk For personal use only This presentation contains certain forward-looking statements including statements of current An investment in ERA is subject to investment risk and other known and unknown risks, some of intention, statement
Slide 4: Acknowledgement of Traditional Owners
Acknowledgement of Traditional Owners The operations of Energy Resources of Australia Ltd (ERA or the Company) are located on For personal use only Aboriginal land and are surrounded by, but separate from, Kakadu National Park ERA respectfully acknowledges the Mirarr, Traditional Owners of the land
Slide 5: Outline
For personal use only Outline • Executive summary • Purpose of the Entitlement Offer • Details of the Entitlement Offer • Key risks • Selling restrictions / jurisdictions 5 Not for release or distribution in the United States www.energyres.com.au
Slide 6: Executive summary
For personal use only Executive summary • ERA is undertaking a fully underwritten 6.13 for 1 pro rata renounceable entitlement offer to raise approximately $476 million, at an offer price of $0.15 per share • Proceeds will fund ERA’s rehabilitation obligations for the Ranger Project Area and enable
Slide 7: Executive summary (cont'd)
For personal use only Executive summary (cont’d) • ERA has concluded that the Entitlement Offer is the only commercially viable funding solution for the Company to meet its rehabilitation obligations for the Ranger Project Area − The Entitlement Offer follows a comprehensive assessment of a range of
Slide 8: Outline
For personal use only Outline • Executive summary • Purpose of the Entitlement Offer • Details of the Entitlement Offer • Key risks • Selling restrictions / jurisdictions 8 Not for release or distribution in the United States www.energyres.com.au
Slide 9: ERA is one of Australia's largest uranium producers
ERA is one of Australia’s largest uranium producers with almost four decades of uranium production history and experience • Since commencement of operations at Ranger in 1981, ERA has developed a track For personal use only record of reliably supplying customers to provide fuel for the global nuclea
Slide 10: Successful rehabilitation of the Ranger Project Area is a strategic priority
The successful rehabilitation of the Ranger Project Area is a strategic priority for ERA For personal use only • ERA’s legal obligations to rehabilitate the Ranger Project Area are long-standing. The Ranger s41 Authority requires ERA to complete rehabilitation by January 2026 so that the environment
Slide 11: Overview of Ranger Project Area rehabilitation program
For personal use only Overview of Ranger Project Area rehabilitation program • As at 30 June 2019, the Company’s recorded rehabilitation provision in the balance sheet was $799 million1 ($858 million undiscounted in real terms2) • This corresponds to an estimated rehabilitation project expenditure o
Slide 12: Standard of rehabilitation to be achieved at Ranger
The standard of rehabilitation that must be achieved is to return the environment at the Ranger Project Area to a state similar to adjacent areas of the World Heritage listed Kakadu National Park For personal use only 2012 – Cessation of mining at Ranger 2019 – Progressive rehabilitation Pit 3 at co
Slide 13: Progressive rehabilitation is underway with milestones achieved
For personal use only Progressive rehabilitation is underway with a number of milestones achieved • Approximately $559 million spent on rehabilitation and water management projects since 20121 − Key works completed include construction and operation of the brine concentrator, preliminary Pit 3 backf
Slide 14: ERA has an executable plan to fully rehabilitate Ranger
ERA has an executable plan to fully rehabilitate the Ranger Project Area in accordance with the Company’s obligations • The Mine Closure Plan is reviewed and updated annually in accordance with Commonwealth and Northern Territory For personal use only regulatory requirements • Closure implementation
Slide 15: Successful rehabilitation will create a sustainable, positive legacy
Successful rehabilitation of the Ranger Project Area will create a sustainable, positive legacy for ERA For personal use only • ERA believes successful rehabilitation is a prerequisite to support future operations and growth beyond Ranger • Beyond meeting the Company’s environmental, economic and so
Slide 16: Outline
For personal use only Outline • Executive summary • Purpose of the Entitlement Offer • Details of the Entitlement Offer • Key risks • Selling restrictions / jurisdictions 16 Not for release or distribution in the United States www.energyres.com.au
Slide 17: Overview of the Entitlement Offer
For personal use only Overview of the Entitlement Offer • Fully underwritten 6.13 for 1 pro rata renounceable entitlement offer to raise approximately $476 million − Approximately 3,174 million new fully paid ordinary shares to be issued (New Shares) Offer structure • New Shares issued under the Ent
Slide 18: Overview of the Entitlement Offer (cont'd)
For personal use only Overview of the Entitlement Offer (cont’d) • Eligible Shareholders who take up their entitlement in full may also apply for additional New Shares at the Offer Price in excess of their entitlement under the Shortfall Facility Shortfall Facility • The allocation of any additional
Slide 19: Proceeds enable ERA to fund its rehabilitation obligations
Proceeds enable ERA to fund its rehabilitation obligations for the Ranger Project Area and continue as a going concern For personal use only As at 30 June 2019 $ million Total estimated rehabilitation project expenditure1 925 Less: Total cash resources, including $76 million held in the Ranger Rehab
Slide 20: Cash flow forecast sensitivity
Cash flow forecast sensitivity • Proceeds raised from the Entitlement Offer, along with ERA’s existing cash resources and expected future cash flows, will primarily be used to fund rehabilitation of the Ranger Project Area For personal use only • It is important to note that the Company’s cash flow
Slide 21: Entitlement Offer timetable
For personal use only Entitlement Offer timetable Key events Date Announcement of Entitlement Offer Friday, 15 November 2019 ASX release of Offer Booklet, Cleansing Notice and Appendix 3B Friday, 15 November 2019 Notices sent to shareholders Monday, 18 November 2019 “Ex” date Tuesday, 19 November 20
Slide 22: Outline
For personal use only Outline • Executive summary • Purpose of the Entitlement Offer • Details of the Entitlement Offer • Key risks • Selling restrictions / jurisdictions 22 Not for release or distribution in the United States www.energyres.com.au
Slide 23: Key risks
Key risks Introduction For personal use only A number of risks and uncertainties, which are both specific to ERA and of a more general nature, may affect the future operating and financial performance of ERA and the value of ERA shares. This section describes some, but not all, of the material risks
Slide 24: Key risks (cont'd)
Key risks (cont’d) Transfer of Tailings to Pit 3 For personal use only ERA is well progressed with the dredging of tailings for the Tailings Storage Facility to their final deposition point in Pit 3. Completion of this activity within the required schedule is critical to meeting the overall closure
Slide 25: Key risks (cont'd)
Key risks (cont’d) Ranger Rehabilitation Trust Fund For personal use only ERA is required to maintain a Ranger Rehabilitation Trust Fund (Trust Fund) with the Commonwealth Government. The Trust Fund is intended to provide security against the estimated costs of closing and rehabilitating the Ranger
Slide 26: Key risks (cont'd)
Key risks (cont’d) Compulsory acquisition of ERA by Rio Tinto For personal use only The take-up by the Underwriter and its related bodies corporate of their entitlements, and the Underwriter underwriting the Entitlement Offer, is likely to result in greater control passing to Rio Tinto (and its rela
Slide 27: Key risks (cont'd)
Key risks (cont’d) Undeveloped properties – Jabiluka Mineral Lease For personal use only Undeveloped properties are considered assets not yet ready for use. At present, undeveloped properties consist of the Jabiluka Mineral Lease. The Jabiluka Mineral Lease is currently held subject to a Long Term C
Slide 28: Key risks (cont'd)
Key risks (cont’d) Resource estimates and ore reserves For personal use only Resource estimates are expressions of judgment based on knowledge, experience and resource modelling. As such, resource estimates are inherently imprecise and rely, to some extent, on interpretations made which may prove to
Slide 29: Key risks (cont'd)
Key risks (cont’d) Regulators and stakeholders For personal use only Uranium mining in the Northern Territory is regulated through a suite of Commonwealth and Northern Territory legislation. The Traditional Owners of the land on which the Ranger Project Area and Jabiluka is situated are the Mirarr p
Slide 30: Key risks (cont'd)
Key risks (cont’d) Nature of uranium production For personal use only Uranium production involves risks which, even with a combination of experience, knowledge and careful evaluation, may not be able to be adequately mitigated. Mining operations are subject to hazards normally encountered in explora
Slide 31: Key risks (cont'd)
Key risks (cont’d) Loss of customers For personal use only ERA sells uranium oxide produced at its Ranger mine to Rio Tinto Marketing Pte Ltd (RTU) in accordance with the terms of the Amended and Restated Agreement for the Sale and Purchase of Natural Uranium Concentrates dated 16 August 2017 for on
Slide 32: Key risks (cont'd)
Key risks (cont’d) Tax risks For personal use only ERA is subject to taxation and other imposts in Australia. Future changes in taxation laws, including changes in interpretation or application of existing laws by the courts or taxation authorities in those jurisdictions, may affect taxation treatme
Slide 33: Key risks (cont'd)
Key risks (cont’d) Risks relating to equity investments and markets For personal use only Investors should be aware that there are risks associated with any investment in a company listed on ASX. The value of ERA shares may rise above or fall below the Offer Price, depending on the business, financi
Slide 34: Outline
For personal use only Outline • Executive summary • Purpose of the Entitlement Offer • Details of the Entitlement Offer • Key risks • Selling restrictions / jurisdictions 34 Not for release or distribution in the United States www.energyres.com.au
Slide 35: Selling restrictions / jurisdictions
For personal use only Selling restrictions / jurisdictions International Offer Restrictions This document does not constitute an offer of new ordinary shares (New Shares) of the Company in any jurisdiction in which it would be unlawful. New Shares may not be offered or sold in any country outside Au
Slide 36: Selling restrictions / jurisdictions
Selling restrictions / jurisdictions United States For personal use only This presentation and any other materials relating to the Entitlement Offer does not constitute an offer to sell, or a solicitation of an offer to buy, securities in the United States or any other jurisdiction in which such an
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