Slide 1: The Lake Wells Sulphate of Potash Project – Definitive Feasibility Study Presentation
For personal use only The Lake Wells Sulphate of Potash Project Definitive Feasibility Study Presentation September 2019
Slide 2: Disclaimer: Important Information
Disclaimer: Important Information For personal use only Nature of this document consents to the inclusion in this report of the matters based on this information in the form and context as it This presentation has been prepared by Australian Potash Limited (APC or the Company). The information is ap
Slide 3: Investment Highlights
Investment Highlights For personal use only Flagship SOP asset: JORC2012 Measured Resource of 18.1Mt and 3.6Mt 1 Reserve Enormous upside: Life of Mine run-rate uses only 21% of Total Measured 2 Resource Strong board and management team with decades of project financing, 3 development, management and
Slide 4: Company Snapshot and Capital Structure
Company Snapshot Capital Structure For personal use only APC Daily Volume APC Market Cap Share Price (26/08/2019) A$0.11 8 40 Shares on Issue (ASX: 357m 7 35 APC) DAILY VOLUME (M) MARKET CAP (A$M) 6 30 Listed Options (ASX: 5 25 APCOA, 20c, 10/2019; 85m APCOB, 12c, 08/2021) 4 20 3 15 Unlisted Options
Slide 5: DFS Summary
DFS Summary For personal use only Attractive Financial Technically Robust Flagship SOP Project SOP Market Outcomes NPV8 A$665M High grade SOP 3.6Mt Reserve 30 year mine life IRR 25% suite of products 2019 SOP 18.1Mt Measured Granted mining First quartile Australian price Resource leases US$262/t SOP
Slide 6: Leading Industry Partners
Leading Industry Partners For personal use only Contributor Background Description of Contribution Independent water resources consultancy Exploration, resource and reserve, borefield with expertise in hydrogeology and hydrology design, process water supply Experts in engineering, environmental Evap
Slide 7: Global SOP Capacity
Global SOP For personal use only Capacity Country Company Location Method Mt % Global Prod tpa USA Compass Utah 320,000 Chile SQM Atacama 240,000 India Archean Rann of Kutch 65,000 China Xinjiang Luobupo Lop Nur, Xinjiang 1,800,000 China Qinghai Lenghu Bindi Dayantan 900,000 China Qinghai CITIC Guo’
Slide 8: Australian SOP Companies
Australian SOP Companies For personal use only Market Capacity Pre-Production CAPEX Company Project Study stage Capitalisation tpa A$M A$M Australian Potash Lake Wells DFS 150,000 208 39.3 (ASX: APC) 1 Agrimin (ASX: Lake Mackay PFS 426,000 545 115.2 AMN) 2 BCI Minerals (ASX: Mardie PFS 100,000 97/49
Slide 9: Asset Overview
Asset Overview For personal use only Ownership Australian Potash Limited (100%) Commodity Sulphate of Potash suite of products Operation Bore-field (78 bore network) abstraction, solar Type salt evaporation and processing Deposit Brine contained within a palaeochannel • 3 mining leases Tenement • 17
Slide 10: SOP Probable Ore Reserve
SOP Probable Ore Reserve For personal use only • 95% of SOP production from aquifers from Probable Ore Reserves of 3.6Mt • 5% recovered from Measured resource over the 30 year mine life Recovered Brine and Mass for first 10 years of operations and LOM Brine K Concentration (mg/L) Mass Proportion Ave
Slide 11: Bore Field and Ponds
Bore Field and Ponds For personal use only Bore Field Pipeline ❑ Bore field design to abstract 540 litres/second over the life of mine ❑ Bore field comprises 78 bores across both lines and is approximately 77km ❑ Bore-field connected with reticulated powerlines and telemetry Evaporation Ponds ❑ Evap
Slide 12: Bore Field and Abstraction
Bore Field and Abstraction For personal use only
Slide 13: Bore Field and Abstraction
Bore Field and Abstraction For personal use only
Slide 14: Evaporation Ponds
For personal use only Evaporation Ponds
Slide 15: Evaporation Ponds
For personal use only Evaporation Ponds
Slide 16: Evaporation Ponds
For personal use only Evaporation Ponds
Slide 17: Process Plant
For personal use only Process Plant
Slide 18: Process Plant
Process Plant For personal use only Simple Block Model ❑ Processing facility is designed to produced 150,000tpa of SOP from salts recovered from the harvest ponds and from MOP addition ❑ Key process stages include: ❑ Harvest salts – loaded onto trucks and transported to processing plant ❑ Crushing –
Slide 19: Site Operations
Site Operations Logistics For personal use only ❑ Bulk haulage using super-quad trucks to Geraldton Port, backloaded MOP Super Quad Truck (above) and Geraldton Port (right)
Slide 20: Site Infrastructure
Site Infrastructure For personal use only Site Infrastructure ❑ APC has received Request for Proposals (RFP) and budget quotations for the site infrastructure : preferred proposals selected & form basis for DFS costings Power station and reticulation ❑ Build, Own, Operate (BOO) Gas fired power stati
Slide 21: Implementation
Implementation Project Delivery Model For personal use only ❑ EPCM project execution model with oversight from the Company’s team Quarters from FID (2) (1) 1 2 3 4 5 6 7 8 9 10 FEED Approvals & Permitting Engineering & Procurement Brine borefield & pond construction Plant construction Plant commissi
Slide 22: Environmental & Social
Environmental & Social For personal use only Environmental and Social ❑ Environmental Scoping Study (ESD) approved September 2018 ❑ Environmental Review Document (ERD) due for lodgement with EPA in Q3 2019 Approvals ❑ Receipt of all approvals planned for Project development commencing Q2 2020 ❑ Mini
Slide 23: Marketing: Market Demand
Marketing For personal use only Market Demand ❑ Global SOP demand CAGR 1.3% CAGR 2018 to 2040 reaching 8.7mt in 2040 ❑ Global SOP demand ex-China 2.3% CAGR (much higher) ❑ Demand growth driven by increasing SOP application rates (developing)/Europe
Slide 24: Marketing: Historical Pricing
Marketing For personal use only Historical Pricing ❑ SOP premium over MOP averages US$269/t last five years ❑ SOP Europe price last 5 years stable in the range of US$500-US$600/t ❑ Premium c.US$100/t over MOP price considered floor premium - Mannheim conversion cost for MOP 700 600 500 400 US$/t 300
Slide 25: Marketing: Target Markets and Offtakes
Marketing For personal use only Target Markets and Offtakes ❑ Test-work confirmed the LSOP will produce high grade, premium suite of SOP products (53% K2O, <1% Cl, 17% S) ❑ Target markets include ❑ Australia: 360ktpa of potash with opportunity to expand SOP ❑ China: c.4Mt SOP ❑ South East Asia and w
Slide 26: Financial Analysis
Financial Analysis For personal use only DFS Financial Model DFS Capex and Opex Physicals Unit LOM Capex Item A$m Life of Mine Years 30 Project indirects 37 SOP production Tonnes 4.5Mt Bore-field 48 Key Assumptions Evaporation ponds 26 Ave realised SOP price US$/t $614 Processing plant 58 Exchange r
Slide 27: Financial Analysis: First Quartile SOP Producer
Financial Analysis For personal use only First Quartile SOP Producer ❑ Cash cost US$262/t - Project comfortably first quartile of the industry cost curve ❑ +50% global SOP production from Mannheim – energy intensive, high cost, environmental issues ❑ Natural ‘floor’ in cost curve of US$400/t due to
Slide 28: Financial Analysis: Sensitivities
Financial Analysis For personal use only Sensitivities ❑ Scenarios on key sensitivities (-15%) of the Project still deliver attractive financial returns 30% 1000 900 25% 800 Pre-tax IRR Pre-tax NPV (A$m) 700 20% 600 500 15% 400 10% 300 (15.0%) (7.5%) 0.0% 7.5% 15.0% 200 (15.0%) (7.5%) 0.0% 7.5% 15.0
Slide 29: Notes
For personal use only Notes
Slide 30: For personal use only
“Two out of every five people on Earth today owe their lives to the higher crop outputs that For personal use only fertilizer has made possible” Bill Gates