Energy Resources Of Australia Ltd. Class A · ASX:ERA
Energy Resources Of Australia Ltd. Class A — Investor Presentation (May 2008)
38 slides from Energy Resources Of Australia Ltd. Class A's investor presentation, May 6, 2008
Slide 1: ERA – Positioned to Meet Demand
For personal use only Energy Resources of Australia Ltd (ERA) ERA – Positioned to Meet Demand Chris Salisbury Chief Executive May 2008
Slide 2: Acknowledgement
Acknowledgement For personal use only ERA has two adjoining leases on Aboriginal land surrounded by, but separate from, World Heritage Kakadu National Park in the Northern Territory of Australia ERA respectfully acknowledges the Mirarr, Traditional Owners of the land on which the leases (and Ranger
Slide 3: Forward Looking Statements
Forward Looking Statements For personal use only This presentation contains statements which may include predictions as to the future, and which may constitute forward-looking statements within the meaning of Australian or US securities laws. Such statements include, but are not limited to, statemen
Slide 4: Outline
Outline For personal use only • Who we are • Market • Financial and operational performance • Sales contracts • Expansion and exploration • Sustainable development • Summary 4
Slide 5: Energy Resources of Australia
Energy Resources of Australia For personal use only • Operations based in the Northern Territory, Australia • 28 years of uranium mining experience at Ranger mine: world’s second largest uranium mine • World class resources with significant expansion opportunities • Remote location in a culturally s
Slide 6: Australian Uranium Deposits
Australian Uranium Deposits For personal use only JABILUKA 2 Timor Sea ) ))) RANGER NO.3 Deposits with 10k to 50k tonne U3O8 KOONGARRA Coral Sea ) Deposits with 50k to 100k tonnes U3O8 ) Deposits with 100k to million tonnes of U3O8 ) VALHALLA ) Deposits with more than 1 million tonnes of U3O8 ) KINT
Slide 7: ERA Leases
ERA Leases For personal use only Scale: 10 kilometres Scale: 10 Kilometres 7
Slide 8: Ranger Mine Site
Ranger Mine Site For personal use only Magela Creek Current Pit Stockpiles Plant & infrastructure Previous pit Water evaporation pond 8
Slide 9: Outline
Outline For personal use only • Who we are • Market • Financial and operational performance • Sales contracts • Expansion and exploration • Sustainable development • Summary 9
Slide 10: Uranium Fuel Cycle
Uranium Fuel Cycle For personal use only Manufacturing Manufacturing of of rods, pellets and rods, pellets and Enrichment Enrichment of of UU235 content 235 content fuel fuel assemblies assemblies from from 0.7% to 3–4% by 0.7% to 3–4% by gaseous gaseous diffusion diffusion or or centrifuge Reproces
Slide 11: World nuclear power
World nuclear power For personal use only 439 nuclear power reactors world wide, generating 16 per cent of world electricity 11
Slide 12: Uranium long term and spot price variability
Uranium long term and spot price variability use only $150 Mini recovery $125 Spot price increases followed by fuelled by investors and asset sell off speculators $100 U O ($/lb) For personal $75 8 3 $50 Price correction as investor $25 buying dried up $0 6 7 8 6 7 8 7 8 6 7 6 7 6 7 r-0 r-0 r-0 y-0
Slide 13: Demand outlook
Demand outlook For personal use only WNA Report Date March 2007 March 2008 Nuclear reactors Total Capacity Total Capacity (GW) (GW) Currently Operating 435 369 439 372 Under Construction 28 23 35 29 Ordered or planned 66 71 91 99 Proposed 158 124 228 199 Source: WNA • Nuclear renaissance is gatherin
Slide 14: Uranium Demand Versus Supply
Uranium Demand Versus Supply For personal use only 180 WNA high case 160 140 WNA base demand 120 Tonnes ‘000 100 Prospective Supply 80 Planned Supply 60 Under development 40 Existing production 20 Secondary supplies 0 2005 2010 2015 2020 2025 2030 Source: World Nuclear Association (WNA) 14
Slide 15: Outline
Outline For personal use only • Who we are • Market • Financial and operational performance • Sales contracts • Expansion and exploration • Sustainable development • Summary 15
Slide 16: Safety
Safety worked only All Injury and Lost Time Frequency Rates 6 use 5 per 200,000 hours personal 4 3 2 ForInjuries 1 0 2004 2005 2006 2007 AIFR LTIFR Mineral Industry TIFR Source: ERA, Minerals Council of Australia 16
Slide 17: Record Results in 2007
Record Results in 2007 For personal use only 2007 2006 Change Net profit (A$ Million) 76 44 +74% Revenue (A$ Million) 362 317 +14% Average realised price (US$/lb) 25.06 18.36 +36% Production U308 (tonnes) 5,412 4,748 +14% 17
Slide 18: Net profit (A$)
Net profit (A$) For personal use only 152 132 112 A$'m 92 72 52 32 43.6 102.2 (38.6) 4.6 (22.9) 43.8 (36.3) (16.6) (3.7) 76.1 2006 Sales FX on Hedging Sales Inventory Production Unit Cost Tax 2007 NPAT Price Sales Volume Movement Volume NPAT 18
Slide 19: Operating Costs
Operating Costs For personal use only 270 265 260 255 250 245 240 A$'m 235 230 225 220 215 210 205 254.9 43.8 (11.1) (4.5) (4.6) (15.1) (2.3) 1.6 (12) (2.9) (1.9) 263.9 2006 Inventory Raw Water Employee Consultants Royalties Shipping Depreciation Borrowing Other 2007 Costs movements materials dispos
Slide 20: Capital Expenditure
Capital Expenditure For personal use only 45 40 2007 35 2006 30 25 A$'m 20 15 10 5 - Development Special Projects Sustaining Exploration Enviromental, Safety, Health 20
Slide 21: Operational Performance
Operational Performance For personal use only Ore to waste (million tonnes) 18 16 Waste 14 Ore • Process plant throughput capacity of 12 2.4 million tonnes per annum 10 8 • All sulphuric acid imported from 3Q 6 2007 4 2 • Mining due to cease in 2012, 0 processing life out to 2020 '02 '03 '04 '05 '06
Slide 22: Outline
Outline For personal use only • Who we are • Market • Financial and operational performance • Sales contracts • Expansion and exploration • Sustainable development • Summary 22
Slide 23: Sales Contracts
Sales Contracts For personal use only • ERA sells uranium under long term Average realised uranium price contracts US$ / lb • Large portfolio of customers 30 • Contracts are generally: 25 25.06 — 3 to 5 years in duration 20 18.36 — first delivery 2 to 4 yrs after 16.00 agreement 15 13.68 11.19 • Con
Slide 24: Outline
Outline For personal use only • Who we are • Market • Financial and operational performance • Sales contracts • Expansion and exploration • Sustainable development • Summary 24
Slide 25: New Facilities
New Facilities For personal use only Laterite Plant • Treats stockpiled ‘lateritic’ ore • Annual U3O8 production ~ 400 tonnes Radiometric sorting • Radiometric sorting facilitates the upgrading & processing of lower grade ores • Brings forward production of 1,100 tonnes over 4 years • Application co
Slide 26: Pit Extension
Pit 3 Extension For personal use only ERA has recently commenced an extension to the Ranger operating pit following a detailed feasibility study • extension contains 54.5 Mt of material and has extended mine life to 2012 • an additional 4,857 tonnes of uranium (10.7 Mlbs) added to reserves (majority
Slide 27: Ranger Expansion Options
Ranger Expansion Options For personal use only Statutory & Regulatory Approvals Traditional Owners Hydrometallurgy- Water & Tailings processing plant Organization & Resources Comminution Heap Leach facility Various open pit extensions 10000tpa Multiple mining rates options 9000tpa Mining Rate 6500tp
Slide 28: Extensions to Orebody
Extensions to Orebody 3 For personal use only Shell 12 Shell 50 Source: ERA Jan 08 Pit, Shell 50, Ore @ 0.08% cutoff 28
Slide 29: Reserves and Resources
Reserves and Resources For personal use only Ranger 3 Ore - MT % U3O8 Contained U3O8 - tonnes Reserves1 32.11 0.15 49,671 Resources2 42.39 0.12 50,567 Jabiluka Ore - MT % U3O8 Contained U3O8 - tonnes Reserves3 11.80 0.50 59,000 Resources3 15.18 0.50 76,403 • In addition to resources, Ranger has appr
Slide 30: Preliminary Heap Leach Results
Preliminary Heap Leach Results For personal use only 100 90 80 70 U3O8 Extraction (%) 60 50 40 30 20 10 0 0 65 Leach Duration (days) n 30
Slide 31: Significant Exploration Pipeline
Significant Exploration Pipeline For personal use only • Ore shown to extend to >400m depth • Numerous targets untested at depth • Historical drill results encouraging • Trial seismic survey program for drill targeting 1km 1km 1km 31
Slide 32: Outline
Outline For personal use only • Who we are • Market • Financial and operational performance • Sales contracts • Expansion and exploration • Sustainable development • Summary 32
Slide 33: Sustainable Development
Sustainable Development For personal use only ERA is committed to developing its resources responsibly & sustainably with an understanding of, and respect for, social, cultural & environmental consequences • Health and Safety of our people • Protection of the environment and other world heritage val
Slide 34: Planning for closure & rehabilitation
Planning for closure & rehabilitation For personal use only ERA has had a long history of environmental management & reconstruction work at Ranger mine — final landform designs & trials — revegetation — ecosystem reconstruction Closure plans & liabilities are updated annually Regulator & stakeholder
Slide 35: Engaging with Traditional Owners
Engaging with Traditional Owners • Cultural Awareness training now For personal use only facilitated by Traditional Owners • Archaeological sites surveyed & a number of sites preserved • Mirarr working with ERA to conduct traditional burning & improved fire management of leases • Formalised access b
Slide 36: Outline
Outline For personal use only • Who we are • Market • Financial and operational performance • Sales contracts • Expansion and exploration • Sustainable development • Summary 36
Slide 37: Summary
Summary For personal use only • 28 years of uranium mining experience in the Northern Territory of Australia • World’s second largest uranium mine • Lease areas contain world class ore bodies, including one of world’s largest undeveloped resource • 2007 was a year of record results • Significant exp
Slide 38: For personal use only
38 For personal use only
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