Lynas Rare Earths Limited · ASX:LYC
Lynas Rare Earths — Lynas — Shareholder Meeting (November 2017)
22 slides from Lynas Rare Earths's shareholder meeting presentation, Nov 28, 2017
Slide 1: 2017 Annual General Meeting
For personal use only LYNAS CORPORATION 2017 Annual General Meeting 1
Slide 2: Chairman's address
For personal use only 2 address Chairman’s
Slide 3: Stable operating costs and higher production rates
Stable operating costs and higher production rates For personal use only Total Operating Costs vs Production (excl. restructuring costs, STI & employee share based payment) Sales Revenue (A$’m) 7000 70 120 6000 60 100 5000 50 Quarter Quarter 4000 40 80 3000 30 60 2000 20 40 1000 10 0 0 20 Q1 FY15 Q1
Slide 4: Continuous improvement in NdPr and total production throughput
Continuous improvement in NdPr and total production throughput For personal use only Production Volume 4,665 Sales Volume (tonnes) 4,503 5,000 5,000 Others (RTS) Others Sales NdPr (RTS) 3,665 4,000 NdPr Sales 4,000 3,171 Total Sales Volume 3,080 2,691 Quarter 3,000 3,000 REOt REOt 2,043 2,000 2,000
Slide 5: Significantly improved cash flow
Significantly improved cash flow For personal use only Cash Flow (excl. AELB payment) Cash Flow (excl. AELB payment) 40 30 30 25 20 20 10 15 0 10 FY15 FY16 FY17 -10 5 Quarter Annual -20 0 Q1 FY15 Q1 FY16 Q1 FY17 Q1 FY18 -30 -5 -40 -10 -50 -15 Net Investing CF Net Operating CF Operating & Investing C
Slide 6: The Balance Sheet is being progressively de-leveraged
The Balance Sheet is being progressively de-leveraged For personal use only Debt Reduced Outstanding 31/12/16 Outstanding 24/11/17 during 2017 JARE Facility (1) US$ 200,000,000 US$ 170,000,000 US$ 30m Convertible Bonds (2) US$ 225,000,000 US$ 96,500,000 US$ 128.5m Cash received by Lynas Outstanding
Slide 7: Changes to the Lynas Board in 2017
Changes to the Lynas Board in 2017 For personal use only Jake Klein resigned in May 2017 after 12 years as a Non-Executive Director John Humphrey was appointed as a Non- Executive Director in May 2017 Grant Murdoch was appointed as a Non- Executive Director in September 2017 Liam Forde will
Slide 8: World #1 supplier of NdPr to the free market
Lynas is the world #1 supplier of NdPr to the free market For personal use only Europe & USA China & Japan Important strategic end Core client base for rare use markets earth metals Malaysia LAMP, Kuantan and Corporate office Australia Mount Weld rare earths deposit and processing plant. Perth offic
Slide 9: Introducing Lynas NEXT
Introducing Lynas NEXT For personal use only Optimise value from existing assets and 425mRL capability 407.5mRL 405mRL 400mRL 402.5mRL - 500 tonnes/month NdPr from April 2018 - 600 tonnes/month NdPr from January 2019 Temporary ramp blasted to 405mRL ready to dig 07.5mRL - Higher value product mix -
Slide 10: Rare Earth market growth is accelerating driven by magnets (NdPr)
Rare Earth market growth is accelerating driven by magnets (NdPr) For personal use only 45 NdFeB magnet growth by application 40 Demand forecast to 35 accelerate from 2020, 000 tons of NdPr Oxide used in Magnets 30 Others driven by Electrified 25 Automation & Appliances Electronic & Medical Electrif
Slide 11: Significant Drill Intersections at Mt Weld
Lynas Next Significant Drill Intersections at Mt Weld Currently treating Li/CZ (gold) ore from For personal use only CLD deposit AP (red) ore will be treated later Depth of AP ore zone limited by “AC” (air core) drill penetration Part 1 (“AP Depth Extension”) of a six part exploration progra
Slide 12: NEXT: Increase Throughput
Lynas NEXT Increase Throughput For personal use only • 600 tonnes/month NdPr from January 2019 • Improved operational reliability - Cracking and Leaching operations - Waste water and residue management - Tunnel Furnaces • Improved operational Recoveries - Mt Weld ball mill - Mt Weld flotation circui
Slide 13: NEXT: Enhance Product Mix
Lynas NEXT Enhance Product Mix For personal use only • Higher value product mix - Up to 150 tonnes/month of separated Nd and Pr - Up to 200 tonnes/month of additional separated Ce and La - Higher quality and more grades of La and Ce to meet customer needs 13
Slide 14: NEXT: Excellent Return on Capital
Lynas NEXT Excellent Return on Capital For personal use only Incremental CAPEX: $22.5m Total CAPEX: $35m Capex per Total Capex NdPr per NdPr per tonne per Invested annum month year A$M REOt REOt A$/kg Establishment costs + Production Lines 749 1,956 163 382.9 Additional Production Lines 259 3,282 27
Slide 15: Million EV global sales estimated by 2030
45 million EV global sales are estimated by 2030 Key Motor Technology Choices 1 highest – 4 lowest For personal use only PMM IM EESM PMa-SynRM with with NdFeB magnets Induction Externally Excited NdFeB magnet Most energy efficient Cheaper motor Robust Cheaper battery = Cheaper car Wider control Most
Slide 16: NEXT: Drive total Market Growth
Lynas NEXT Drive total Market Growth Residual “Fake News” provides Lynas with the opportunity to establish its positive credentials For personal use only Fake News Lynas Truth PMMs have a higher acquisition cost but years of lower • PMM electrical motors are expensive because of consumption, due to
Slide 17: NEXT: Drive Total Market Growth
Lynas NEXT Drive Total Market Growth For personal use only Assure supply reliability Engage directly with Automotive Industry on Lynas is no longer a Rare Earth technologies challenger we are a market leader Invest in Application R&D Promote sustainable business practices 17
Slide 18: NEXT: Improve Revenue Quality
Lynas Next Improve Revenue Quality For personal use only Secure large share of “rest of world market” through strategic end Reduce revenue volatility with user contracts with component makers and OEMs confirmed long term customer Deliver improved offers through partnerships with magnet contracts
Slide 19: NEXT: Supplier of choice to the Automotive market
Lynas Next Supplier of choice to the Automotive market For personal use only Lynas is the rare earths Ability to secure supply Stable financial structure producer that understands and respond efficiently to automotive needs EV market growth Specific knowledge of Experienced management automotive cha
Slide 20: Lynas leads the market in sustainability
Lynas leads the market in sustainability For personal use only Resource Optimisation Best Practice Delivering to customer Ongoing Community & Water Management Environmental needs engagement strategies Lynas has, and continues to, Lynas prioritises the safety Lynas is supporting Lynas runs long and s
Slide 21: Lynas NEXT
For personal use only 21 NEXT Lynas
Slide 22: Competent Person's Declaration
Competent Person’s Declaration For personal use only Competent Person’s Declaration and Compliance Statements Exploration information in this Announcement is based on, and fairly represents, information compiled by Mr. Brendan Shand who is a consultant geologist to Lynas Corporation. Mr. Shand is a