Reward Minerals Ltd · ASX:RWD
Reward Minerals — Kalkine Invest-Nest (February 2020)
26 slides from Reward Minerals's conference presentation, Feb 27, 2020
Slide 1: Reward Minerals Limited
REWARD Developer of the MINERALS largest high-grade brine SOP Deposit in Australia LIMITED Kalkine Invest-Nest Sydney ASX | RWD 27 February 2020 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 ►How do we feed the world? ►Investment Rationale ►Corporate Snapshot ►LD Overview ►LD Project Metrics ►Current Activities ►Conclusions 3
Slide 4: How do we feed the world?
HOW DO WE FEED THE WORLD? Here’s the challenge… 12 Growing World Population Decreasing Arable Land 0.35 Hectares per Capita 10 0.3 Population in billions 8 0.25 0.2 6 0.15 4 0.1 2 0.05 0 0 1975 2000 2025 2050 1975 2000 2025 2050 ► Increasing population, decreasing arable land per capita ► World’s mi
Slide 5: Sulphate of Potash – Part of the Solution
SULPHATE OF POTASH – PART OF THE SOLUTION “SOP” – K2SO4 ► The premium source of potassium fertiliser ► Applied to high value, speciality crops ► Some crops are chloride intolerant ► SOP is a low-chloride source of potassium ► K, one of the 3 essential plant macronutrients 5 * Grantham Centre for Sus
Slide 6: Types of Potash (Potassium Fertiliser)
TYPES OF POTASH (POTASSIUM FERTILISER) The two major sources of potassium fertiliser are MOP and SOP MOP SOP ► Muriate of Potash (KCl): ~68Mtpa ► Sulphate of Potash (K2SO4): ~7Mtpa ► US$200-300/t ► US$450-650/t ► Applied to low value, chloride tolerant crops ► High value, chloride sensitive/intolera
Slide 7: Investment Rationale
INVESTMENT RATIONALE Reward Minerals is the developer of the Lake Disappointment Brine Sulphate of Potash Project Largest Env. Australian Detailed, permitting high-grade conservative finish line in And… brine SOP Highest PFS Native title clearly sight deposit evaporation, secured, undervalued Lowest
Slide 8: Reward Corporate Snapshot
REWARD CORPORATE SNAPSHOT Capital Structure 21 Feb 2020 ASX:RWD Colin McCavana – Non-Executive Chairman - 30+ years experience in mining and earthmoving industries Ordinary Shares on Issue 162.6m - Ops and development management of Australian and international projects Rights and Options on Issue 17
Slide 9: Slowly Regaining Traction
SLOWLY REGAINING TRACTION -37% -1% -15% -27% Share Price up 87.5% since previous Kalkine Presentation 3
Slide 10: Lake Disappointment Brine SOP Project
LAKE DISAPPOINTMENT BRINE SOP PROJECT Location ► 866 km from Port Hedland, class-leading bulk export terminal ► 511 km on the Great Northern Highway ► 355 km on existing, dirt roads/tracks 10
Slide 11: Highest Evaporation Rate
HIGHEST EVAPORATION RATE No better location for a brine evaporation operation in Australia LD Project 11
Slide 12: Low Rainfall
LOW RAINFALL No better location for a brine evaporation operation in Australia LD Project 12
Slide 13: Superior Grade and Evaporation
SUPERIOR GRADE AND EVAPORATION Grade and evaporation have a direct impact on production 40 Typical Potassium Target Concentration Potassium Concentration – g/l LD Grade 30 & Evaporation 13.4 g/l SOP = 8 g/l K 20 Goldfields Evaporation & Lower Grade* ~8 g/l SOP = ~3.6 g/l K 10 100 200 300 400 500 600
Slide 14: Operational and Cost Implications
OPERATIONAL AND COST IMPLICATIONS To match output, lower grade operations need to: Abstract/Pump More Brine Build Bigger Ponds National Geographic Bigger ponds, more seepage, lower evaporation rates make it worse: Suffer More Seepage Capex & Opex Costs Decreasing grade/Lower Evaporation 14
Slide 15: Standard Solar Evaporation Process
STANDARD SOLAR EVAPORATION PROCESS A$91/t A$102/t Other Opex Costs Closure – A$2/t Martu Royalty – A$7/t FOB Cash Cost: Road Maint - A$15/t A$344/t Site Services - A$22/t (US$258/t) EBITDA Margin: ~44.6% A$105/t @ US$500/t Ex-Works Cost: A$239/t (US$180/t) 15
Slide 16: Project Metrics – Costs & Production
PROJECT METRICS – COSTS & PRODUCTION • A$345 M, includes indirects and owners costs (+/-20%) Capital cost • A$451 M, includes contingency & pre-production costs • At least 400,000 tpa Production • ~9 Mt SOP produced over ~25 years • Less than 10% of the resource • Cash cost – A$335/tonne (FOB Port H
Slide 17: Project Metrics – Economics
PROJECT METRICS – ECONOMICS • Price: US$500/tonne, FX: AUD/USD: 0.75 Assumptions • Discount Rate: 8% Real • Royalty: State: 3.75%, Martu: 1.25% • Average EBITDA – 45% (~$118 M/year) Margins • Average Cash – 48% (~$122 M/year) • Pre-tax: NPV8% – $518 M, IRR – 19% Returns • Post-tax: NPV8% – $293 M, I
Slide 18: Permitting Is Critical
PERMITTING IS CRITICAL….. Government of Western Australia: Environmental Protection Authority Status of Active Formal Assessments - s. 38 Part IV of the Environmental Protection Act 1986 Last Updated: 20 January 2020 Stage 1 and 2 Stage 3 Stage 4 Stage 5 Proposal Information Referral of Proposal Ass
Slide 19: Current/Upcoming Activities
CURRENT/UPCOMING ACTIVITIES* ► Environmental Permitting: ▪ Final stages at state level ▪ Well advanced at federal level ► Resource Conversion: ▪ Infill drilling program completed ▪ Grade upside ► Ongoing Trials: ▪ Focused on enhancing recovery ▪ Crude potash harvested ▪ Pond construction methods ► P
Slide 20: Conclusions
CONCLUSIONS Reward is well positioned, its LD Brine SOP Project: Is technically robust ► Conservative PFS conducted to exacting standards ► On Australia’s largest high-grade SOP deposit, with an ► Independently reviewed Flowsheet … and economically attractive, with ► Scope to improve economics on mu
Slide 21: Appendices
\ APPENDICES H 21
Slide 22: What's With That Name?
WHAT’S WITH THAT NAME? Here to the southward he sighted a large lake ten miles distant, and they made their way to it next day, but found it was all white salt ... “it is the largest thing in lakes I ever saw ... I shall call the lake Lake Disappointment as I was disappointed in not finding water in
Slide 23: Globally Significant Tier 1 Resource
GLOBALLY SIGNIFICANT TIER 1 RESOURCE 153 Mt Indicated & Inferred Drainable SOP Resource – Australia’s largest Assigned Nominal Dimensions (m) Volume Area Specific SOP Brine Drainable Unit Yield Hydrostratigraphic Unit Grade SOP Symbol Effective 3 6 2 6 (kg/m3) (Mt) Top Base Thick. (m x 10 ) (m x 10
Slide 24: PFS Results – Capital Costs
PFS RESULTS – CAPITAL COSTS Initial and Sustaining Capital Costs (LOM Real) AUD M Production - Trenches and Ponds 57.6 Process Plant 73.2 Infrastructure 108.8 Site Support Temporary Services 2.9 Construction Costs 59.2 Subtotal 301.7 Indirect Costs (EPC, Consultants, Commissioning) 20.0 Owners Costs
Slide 25: Compliance Statements
COMPLIANCE STATEMENTS Competent person statements: The information in this report that relates to the existing Lake Disappointment Project Mineral Resource Estimate and hydrogeology is extracted from the report titled “Lake Disappointment (LD) Project Confirmed as a Globally Significant Tier 1 Sulph
Slide 26: Reward Minerals Ltd contact details
Reward Minerals Ltd 159 Stirling Highway Nedlands, WA, 6009 (T): +61 8 9386-4699 (W): www.rewardminerals.com
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