Aspire Mining Limited · ASX:AKM
Aspire Mining — Mines & Money, Hong Kong, March 2014
28 slides from Aspire Mining's conference presentation, Mar 25, 2014
Slide 1: The Ovoot Coking Coal Project Investor Presentation
For personal use only The Ovoot Coking Coal Project Investor Presentation Mines & Money, Hong Kong, March 2014 June 2010 1
Slide 2: Important Information
Important Information For personal use only •Nature of this document: This document has been prepared by Aspire Mining Limited (“Aspire”, “AKM”, or the “Company”) and contains summary information about the Company and its subsidiaries as at the date of release of this document. The information in th
Slide 3: Important Information cont.
Important Information cont. For personal use only •Production Target Assumptions: The following are key assumptions used to achieve the ODP first year target of 5Mtpa of marketable coking coal. 1) In the eight months prior to commencement of first year ODP production, a 23 million BCM waste removal
Slide 4: Company Snapshot – Corporate Structure
Company Snapshot – Corporate Structure For personal use only Ownership (Fully Diluted) AKM Directors (ex Turbat) 10.8% SouthGobi Resources Ltd 26.73% 30.97% Noble Group Mongolian Shareholders 17.82% Others 13.67% 100% 90% 10%* 10.81% Ovoot Coking Northern Capital Structure (ASX:AKM) Coal Project Rai
Slide 5: A Junior Explorer with one of the Largest Met Coal Reserves in Mongolia
A Junior Explorer with one of the Largest Met Coal Reserves’ in Mongolia For personal use only Company Focus: “To develop World Class Coking Coal Projects” • Northern location provides opportunity for Ovoot to access European and seaborne coking coal markets • Planned upgrade of TMR will allow capac
Slide 6: Mongolia – A Major Trading Corridor
Mongolia – A Major Trading Corridor For personal use only • Mongolia has agreed to establish a working group with China to oversee the construction of new road, rail and pipeline infrastructure connecting the two countries with Russia (Reuters, 28 Oct 2013). • “Landlocked Mongolia aimed to become a
Slide 7: JORC Resource & Reserve Update Confirm Ovoot as Second Largest Coking Coal Reserve in Country
JORC Resource & Reserve Update Confirm Ovoot as Second Largest Coking Coal Reserve in Country For personal use only JORC Reserve Probable Total Marketable (31 July 2013) (Mt) (Mt) (Mt) (arb 2% (arb, 9.5% moisture) moisture) Ovoot Open Pit 247 247 182 Ovoot 8 8 6 Underground Total 255 255 188 JORC Ov
Slide 8: The Ovoot Basin – Further Potential Exists
The Ovoot Basin – Further Potential Exists For personal use only 8
Slide 9: Vitrocoal: Low Ash, High Fluidity Coking Coal
VITROCOAL Low Ash, High Fluidity Coking Coal For personal use only Indicative Ovoot Washed Coking Ovoot Coking Coal displays High fluidity and Coal Specification plastic properties Moisture 9% An ideal blend coking coal indicated by industry leading Gray-King Index and Rank Ash 9% Chinese clas
Slide 10: Ovoot Coking Coal – High Fluidity, Mid-Vol
Ovoot Coking Coal – High Fluidity, Mid‐Vol For personal use only Ovoot is the highest dilation in the mid-vol range 10
Slide 11: Chinese Blending Coal Requirements
Chinese Blending Coal Requirements For personal use only Chinese Coking Coal Reserves Typical Chinese Coke Blend Unamed coal, 2% Other, Meagre 5% lean, Gas coal, 7% 14% Lean, 12% Lean, 7% Gas coal, 29% 1/3 Coking, 19% Primary coking coal, 25% Primary coking Gas fat coal, coal, 31% 7% 1/3 Coking, Fat
Slide 12: Australia and Mongolia Main Coking Coal Import Sources for China
Australia and Mongolia Main Coking Coal Import Sources for China For personal use only 10,000 Chinese Coking Coal Imports Australia 9,000 Mongolia Canada & US 8,000 Russia 7,000 Quantity 000' Tonnes 6,000 5,000 4,000 3,000 2,000 1,000 0 Mar Qtr 2011 Jun Qtr 2011 Sept Qtr 2011 Dec Qtr 2011 Mar Qtr 20
Slide 13: Oxidised and low quality coking coals can be upgraded when blended with Ovoot coking coal
Oxidised and low quality coking coals can be upgraded when blended with Ovoot coking coal For personal use only Non-coking, Thermal Coals, and Semi-Soft Coking Coals • Coke oven blend tests conducted on 50/50 blend and 75/25 blend (oxidised coal/Ovoot) • Used alone, low coking, thermal and oxidised
Slide 14: Significant Interest in Ovoot Coking Coal Exceed Ovoot Development Production
Significant Interest in Ovoot Coking Coal Exceed Ovoot Development Production For personal use only Offtake Customers Potential Offtake under Non‐Binding MOU’s Chinese up to 5.6 Mtpa Russian up to 1.3 Mtpa ODP Production 5 Mtpa Excess MOU interest 1.9 Mtpa (+38%) Additional Chinese, Russian, Japanes
Slide 15: Ovoot Development Plan
Ovoot Development Plan For personal use only Mine CAPEX and OPEX Estimates Initial Production up to 5 Mtpa CAPEX US$144m (incl. contingency and working capital) Commencement 2017 Production growth potential up to 10MtpaNote1 Life of Mine 21 yearsNote1 OPEX (Avg first 2 years) US$76‐86/tNote2 OPEX (A
Slide 16: Exceptional Deposit – High Washing Yield and % Coking
Exceptional Deposit – High Washing Yield and % Coking = Highest In‐Situ Value per tonne For personal use only 16
Slide 17: Ovoot Mine Development Plan Has Robust Economics
Ovoot Mine Development Plan Has Robust Economics For personal use only Revised development plan has significantly reduced capital cost estimates for the Ovoot mine Estimated Capex to produce 5mtpaNote1 US$ 144m Estimated Opex FOR China at US$92/t ‐ Mine pre strip $60m 5mptaNote 1 ‐ Mobilisation $ 8m
Slide 18: Ovoot coking coal will have a long term cost advantage
Ovoot coking coal will have a long term cost advantage For personal use only Metallurgical Coal (HCC + PCI + SSCC) Ovoot and Mongolian coking coal has a significant geographical advantage that requires rail development to secure Source: Aspire Mining Ovoot coking coal nominal cost US$82-92/t (not in
Slide 19: China Fat, Primary Coking Coal against Seaborne traded HCC
China Fat, Primary Coking Coal against Seaborne traded HCC For personal use only Coking Coal Price Comparison China HCC (Primary Coking Coal) China Fat Coking Coal Why the Low Prices? Seaborne HCC 400.00 • Current Seaborne market oversupplied 350.00 • Domestic Chinese 300.00 production competing wit
Slide 20: Supply Response: Recent Met Coal Production Reductions
Supply Response: Recent Met Coal Production Reductions For personal use only Canada – British Columbia Source: Alpha Natural Resources presentation “2013 UBS Coal Conference” dated 4 December 2013. Teck News Release dated 13 Feb 2014. 20
Slide 21: Majority of Approved Coking Coal Developments in Near Term Are High Quality Met Coal
Majority of Approved Coking Coal Developments in Near Term Are High Quality Met Coal For personal use only Majors with Near Future Met Coal Development Projects 2013 Global Seaborne Supply of Metallurgical 12 WHITEHAVEN, Maules Coal1: Creek VALE, Moatize II Mtpa Additional Production (100% basis) 10
Slide 22: Erdenet – Ovoot Railway Project
For personal use only Erdenet – Ovoot Railway Project 22
Slide 23: Rail Infrastructure Unlocks Industry Development in Northern Mongolia
Rail Infrastructure Unlocks Industry Development in Northern Mongolia For personal use only • Connects the Ovoot Project and Northern Mongolia Northern Rail Line Rail Capex directly onto the Trans‐Mongolian Railway network for access to international markets Alignment Erdenet to Ovoot (547km) CAPEX1
Slide 24: Potential Rail Financing Structure
Potential Rail Financing Structure For personal use only Equity 10.8% 10% 90%* Strategic Investor/s Export Credit Northern Rail Line Banks * Aspire’s current ownership interest in Northern Railways, which is expected to reduce as Strategic Investors are introduced in the financing process. 24
Slide 25: Investor Protection Provided Through Corporate Structure
Investor Protection Provided Through Corporate Structure For personal use only Bilateral Investment Agreement: Mongolian Investment Law between Singapore and Mongolia (enacted 1 November 2013) (since July 1995) • Any future amendments to law require minimum 67% Parliament votes in favour • Applicabl
Slide 26: Government Initiatives to Re-attract FDI
Government Initiatives to Re‐attract FDI For personal use only 1. The introduction of the new Investment Law in November 2013 which effectively removed the requirement for Government approvals for Foreign investment to circumstances of changes in control events involving foreign state owned enterpri
Slide 27: Ovoot and Railway Development Pathway
Ovoot and Railway Development Pathway For personal use only Ovoot Mine Completed Northern Railway Completed JORC 2012 Resources and Reserves ✓ Pre Feasibility Studies ✓ Pre Feasibility Studies ✓ Confirmation of Alignment to Mongolian ✓ Standards Mining Licence ✓ Initial Stakeholder Engagement ✓ MRAM
Slide 28: Contact details
Contact details For personal use only Aspire Mining Limited ABN: 46 122 417 243 ASX Code: AKM Web: www.aspiremininglimited.com AUSTRALIA Level 2, Suite 20, 22 Railway Road Subiaco, Western Australia, 6008 MONGOLIA Sukhbaatar District, 1st Khoroo, Chinggis Ave‐8 Social Insurance Department Building A