Arafura Rare Earths Limited · ASX:ARU
Arafura Rare Earths — Arafura Resources — REE World Technology Metals Summit 2012
24 slides from Arafura Rare Earths's conference presentation, Feb 3, 2012
Slide 1: Arafura Resources
For personal use only Arafura Resources Richard Brescianini – GM Exploration & Development REE World Technology Metals Summit 2012 February 2012
Slide 2: Disclaimer – Important Notice
Disclaimer Important Notice For personal use only This presentation contains certain statements which may constitute “forward-looking statements”. Such statements are only expectations or beliefs and are subject to inherent risks and uncertainties which could cause actual values, results or performa
Slide 3: Introduction to Arafura
Introduction to Arafura Corporate Summary Our Vision: ‘To be the recognized leading producer of For personal use only Australian Public Company – formed 1997 Rare Earths for users worldwide’ Listed on ASX in 2003 (code ARU) ‘All Australian’ Business Model – mining, chemical processing Nola
Slide 4: Nolans Project
For personal use only Nolans Project
Slide 5: Nolans Project – Overview
Nolans Project – Overview Nolans Project is world scale and strategically significant ….. For personal use only One of only three well advanced, large-scale Rare Earth projects globally; Updated estimate of Identified Mineral (JORC) Resources by end-February; As at November 2008 Annual Productio
Slide 6: Nolans Project – Overview
Nolans Project – Overview Australia – low sovereign risk and world-class regulatory environment; For personal use only Excellent locations: Nolans Bore Mine is remote, but not isolated, and is close to infrastructure; Whyalla is a long-standing and well established industrial city. 5 km Whyalla
Slide 7: Nolans Bore Resource – Magnet Feed
Nolans Bore Resource – Magnet Feed The Nolans Bore resource is well aligned with magnet end markets ….. For personal use only Volume REO Price Projected Revenue Nolans Bore has a higher Rare Earth % REO (tonnes (US$/kg) (US$ % Revenue proportion of desirable Element Contained p.a.) 19 Jan 2012 mil
Slide 8: Arafura's approach to the Nolans Project
Arafura’s approach to the Nolans Project For personal use only Create value, de-risk and use world class expert assistance ….. Engage world class experts to assist in all aspects of the Nolans Project; Focus on value-creating Rare Earth Oxide production in industry chain; Standard design and l
Slide 9: Project History and Timeline
Project History and Timeline Already a long way through a lengthy industry For personal use only development timeline, one of the few advanced Current Timing subject to world-scale projects ….. Status completion of BFS Exploration Prefeasibility Study Bankable Feasibility Study Construction Operatio
Slide 10: Building a Sustainable Business
Building a Sustainable Business Arafura is ‘going the extra mile’ to ‘get it right’ first time and ensure success ….. For personal use only Australian developed & proven flow sheet – not reliant on others; Additional flow sheet demonstration programs at scale are underway to de-risk start up & a
Slide 11: Demonstration Program
Demonstration Program The flow sheet has been proven at pilot scale and is now undergoing final demonstration ….. For personal use only Mixed REO Carbonate Production 2009 Water Leach Piloting 2009 Sulphation Baking 2009 ANSTO, Sydney ANSTO, Sydney ANSAC, Bunbury Gypsum from HCl Regeneration Demonst
Slide 12: Rare Earth Oxide Production
Rare Earth Oxide Production Three REO products now available for target customer evaluation ….. For personal use only Solvent Extraction Circuit for REO Production 2012 Mixer-Settler from Solvent Extraction Circuit 2012 ANSTO, Sydney ANSTO, Sydney Page 12
Slide 13: Target Customer Program
Target Customer Program Interest in Arafura’s REO products is high; For personal use only Arafura has identified target customers worldwide with whom it would like to develop mutual long term relationships. Key geographical regions include Japan, Korea, Europe and the USA; First LOI already si
Slide 14: Nolans Project – Government Approvals
Nolans Project – Government Approvals For personal use only Excellent support from Federal, Northern Territory (NT) and South Australian (SA) governments; Major project status for Whyalla Rare Earths Complex from SA Government; Strong support from local communities in both NT and SA – communit
Slide 15: Rare Earths Market
For personal use only Rare Earths Market
Slide 16: Supply & Demand
Supply & Demand For personal use only Total Rare Earth Oxide (REO) supply growth Global REO Supply - Demand Balance Metric tons % Cap. Util. does not keep up with 400,000 200% demand growth rates in any year! 350,000 180% Capacity utilizations 300,000 160% bottoms out in 2015 at 107%; 250,000 14
Slide 17: Price Trends
Price Trends Prices in real terms have returned to long term levels prior to low price ‘Chinese era’ ..… For personal use only 1990 to 2005: atypical low-priced era driven by unsustainable low-cost Chinese production; 2006: prices begin to rise with first Chinese export quotas; 2007-2008: pric
Slide 18: Nolans Project Value Proposition
For personal use only Nolans Project Value Proposition
Slide 19: Nolans Project – Financial Valuation
Nolans Project – Financial Valuation High potential value, long-life, multiple revenue streams with upside potential .…. For personal use only CAPEX @ 0.95 A$950 million Sales Revenue US$ Low Mid High REO US$/kg $22 $38 $54 Current price REO 20,000t US$ $440 $760 $1,080 (19 Jan 2012) Co- & By-produc
Slide 20: Rare Earth Project Comparisons
Rare Earth Project Comparisons Arafura is undervalued compared to industry peers ….. For personal use only Exploration Prefeasibility Study Bankable Feasibility Study Construction Operations Northern Minerals Greenland Minerals & Arafura (20 kt p.a.) Molycorp Molycorp (ASX: NTU) Energy (40 kt p.a.)
Slide 21: Investment Opportunity
Investment Opportunity Funding status: For personal use only Cash on hand A$35.3 million with no debt; Macquarie Capital (Australia) appointed to advise on funding options; Adopting prudent approach in challenging financial markets: – Several BFS work streams to slow down pending successful fu
Slide 22: Summary
For personal use only Summary
Slide 23: Summary
Summary A compelling value proposition despite short-term funding challenges ….. For personal use only Robust and well regarded ‘All Australian’ business model; World-scale Nolans Project with high value creation potential; Nolans Project well advanced and likely to be one of very few new supp
Slide 24: Thank you
For personal use only Thank you
Arafura Resources — REE World Technology Metals Summit 2012 on 6ix