Neometals Ltd · ASX:NMT
Neometals — Reed Resources — Investor Presentation (July 2014)
42 slides from Neometals's investor presentation, July 2014
Slide 1: Advanced Mineral Developers
Advanced Mineral Developers Titanium Lithium www.reedresources.com 1
Slide 2: Disclaimer
Disclaimer Summary information: This document has been prepared by Reed Resources Ltd (“Reed” or “the Company”) to provide summary information about the Company and its associated entities and their activities current as at the date of this document. The information contained in this document is of
Slide 3: Corporate
Corporate www.reedresources.com www.reedresources.com 3
Slide 4: Company Strategy
Company Strategy 03 01 02 Co-venture with strong Demonstrate partners Focus low-cost to reduce on advanced competitive operating and mineral assets advantage financial risk www.reedresources.com 4
Slide 5: Minerals for the 21st Century
Minerals for the 21st Century Lithium Titanium Lithium www.reedresources.com 5
Slide 6: Corporate Overview
Corporate Overview Corporate Overview ASX Code: RDR OTC: RDRUY 2014 share price Last close (30 June 2014) $ 0.018 Price and volume Shares on issue M 523.4 5.0 0.07 4.0 0.05 Share price ($) Cash (est 30 June 2014) $m 13 Volume (m) 3.0 0.04 2.0 Incl Restricted Term 1.0 0.03 $m 6.2 Deposit 0.0 0.02 04-
Slide 7: Group structure chart
Group structure chart Process Minerals Int’l Reed Resources Ltd Pty Ltd (Mineral Resources Ltd) 30% 70% Australian Reed Barrambie Reed Mount Finnerty Vanadium Industrial Gas Exploration Pty Ltd Corporation Minerals Pty Ltd Pty Ltd (Holdings) Pty Ltd Pty Ltd DBNGP Barrambie Mount Marion Nickel Mount
Slide 8: Rebuilding the Balance Sheet
Rebuilding the Balance Sheet Cash at Bank A$8.7M Comet Vale A$1.9M cash sale, 31 March 2014* completed 23 June. Mt Finnerty Meekatharra Sale process for Iron A$4.6M cash + cancellation of 24M shares**, Ore project underway settlement 30 June * Includes $6.2M of restricted access term deposits ** Sub
Slide 9: Mount Marion Lithium Project
Mount Marion Lithium Project RDR 70%, MIN 30% (Fund and operate) www.reedresources.com 9
Slide 10: Secure Lithium Mineral Supply
Secure Lithium Mineral Supply Captive Resource Infrastructure Mine Ready www.reedresources.com 10
Slide 11: Strong Partner for upstream
Strong Partner for upstream Mineral Resources Limited are an ASX100 Listed Company worth +A$2 Billion (ASX: MIN), are Australian largest contract processor of minerals Fund ‘sunk’ costs to Final Investment Decision, then construct and operate project from mine-to-port, with no upfront capital cost w
Slide 12: Development strategy: de-risk with strong partners
Development strategy: de-risk with strong partners Target 30-40% Low upfront capital RDR RDR X% 70% + = Produce Lithium Value add into Integrated lithium Mineral Lithium Battery producer Concentrates with Materials (LiOH) partner MIN with Partners www.reedresources.com 12
Slide 13: Leverage to a Megatrend - rechargeable Li batteries
Leverage to a Megatrend - rechargeable Li batteries LiOH Li2CO3 LI2CO3 11,000 350,000 Demand in metric tonnes of lithium carbonate 10,000 300,000 9,000 250,000 LiOH Price US$ per tonne equivalent (LCE) 8,000 200,000 Current Price US$7,500 7,000 150,000 6,000 100,000 5,000 50,000 0 0 2011 2012 2013 2
Slide 14: Lithium is the only real alternative to gasoline
Lithium is the only real alternative to gasoline Pb-acid Practical Ni-Cd Theoretical Ni-metal hydride Li-ion Li-S Zn-air Li-air Gasoline 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 Energy density, watt-hours/kg www.reedresources.com 14 Sources: Roskill
Slide 15: Low Cost Strategy
Low Cost Strategy Developing the Competitive Edge in Lithium Hydroxide RIM and Partner www.reedresources.com www.reedresources.com 15
Slide 16: RIM LiOH Production Process
RIM LiOH Production Process Ion Exchange Membrane Electrolysis High efficiency purification circuit delivers ultrapure electrolyte - the key to high current efficiency electrolysis for LiOH (and opens the door to Li metal) Remove trace Lithium Hydroxide Remove Remove impurities to Cell Efficiency Fe
Slide 17: Proprietary adaption of a Mature Technology – Chlor Alkali
Proprietary adaption of a Mature Technology – Chlor Alkali Chlor Alkali Conventional process produces NaOH RIM Process Our new process produces LiOH LiOH Na OH POWER Li20 POWER H2O + H2 HCl H2 + LiCl Na Cl Cl2 Cl2 Na Cl Step 1: Proof of concept Top quality - 99.9% LiOH Very efficient - 90% rec
Slide 18: Why LiOH? Its Physical Properties
Why LiOH? Its Physical Properties New second generation cathode chemistry wet production process favours LiOH - chelates with Fe or Mn salts to produce cathode without roasting LITHIUM HYDROXIDE LITHIUM CARBONATE Cathode crystal structure – Spherical Cathode crystal structure – Flat, angular Flow of
Slide 19: Chlor-alkali Cell
Chlor-alkali Cell www.reedresources.com 19
Slide 20: Comparison Results
Comparison Results Battery grade specifications with leading lithium hydroxide monohydrate producer Items FMC RIM Results LiOH.H2O % Min 56.5 56.5 Fe ppm ≤5 0.1 Na ppm ≤20 0.6 K ppm ≤10 1.3 Cl ppm ≤20 20 Ca ppm ≤15 0.6 Al ppm ≤10 3 Ni ppm ≤10 0.2 Si ppm ≤30 3.3 www.reedresources.com Source: http://w
Slide 21: Flowsheet cost
Flowsheet cost Operating process advantage Competitors Input Price Input Price US$5,000/t US$350/t x1 x 7.5 Final Lithium Lithium Final Product Chlorination Lithium Carbonate Carbonate Product LiOH Spodumene Purification Brine Technical Battery LiOH Battery Electrolysis Grade Grade (BG) Grade Cost C
Slide 22: Capital cost advantage
Capital cost advantage Capital Efficiency (US$/ Production tonne LCE per annum) 25,000 US$/MT 20,000 LiOH Plant 15,000 10,000 Li2CO3 5,000 Plant LiOH Li2CO3 0 Brine-based Brine-based Spodumene-based RIM Capex expansion new project new project 2012 PFS www.reedresources.com 22 Sources: FMC Corporate
Slide 23: Robust downstream economics
Robust downstream economics 10,000t LiOH Annual Production 8,800t Li2CO3 Life of Mine (LOM) 20 years Average Net Operating Cost per tonne of recovered LiOH US$ 3,878 Low initial capital costs US$ 83 million (excluding mineral concentrator and mine) Pre-tax NPV (12% discount rate) US$ 321 million Pay
Slide 24: Downstream Strategy
Downstream Strategy Demonstrate Demonstrate Partner Commercial- Technical Consistent Qualification isation Feasibility Quality www.reedresources.com 24
Slide 25: Near-term milestones
Near-term milestones Proof Commence Complete Commence Operating Of Semi Pilot Semi Pilot Engineering & Capital Concept Plant Plant Cost Study Costs Testwork Testwork Anticipated Continue to prove technical feasibility, product quality Attract LiOH JV Partner* Nov 2013 March 2014 June Q2 ‘14 Sept Q3
Slide 26: Barrambie Titanium Project
Barrambie Titanium Project 100% RDR www.reedresources.com 26
Slide 27: Secure Raw Material Supply
Secure Raw Material Supply 1 2 47Mt @ 3 34% 22% TiO2 18% Lac Tio Barrambie Tellnes Sources: company reports www.reedresources.com 27
Slide 28: Simple upstream – dig and deliver
Simple upstream – dig and deliver www.reedresources.com 28
Slide 29: Development strategy: de-risk with strong partners
Development strategy: de-risk with strong partners Target 30- 40% Low upfront capital RDR RDR X% 100% + = Mine, Crush, Truck JV with Ti Integrated Very low capex industry partner titanium producer www.reedresources.com 29
Slide 30: Potential lowest quartile operating costs
Potential lowest quarter operating costs Competitors Input Price Input Price US$1,000/t US$150/t X1.2t X 4t Final Final Chlorination Product ROM Chlorination Product Rutile & Purification Fine Ore & Purification Fine Pigment Pigment Cost US$2,100 - Cost 2,300/t US$1,214/t Step 1: Proof of concept
Slide 31: Flowsheet
Flowsheet www.reedresources.com 31
Slide 32: Scoping Study – unoptimised
Scoping Study – unoptimised 13,000t TiO2 Annual Production 300t V2O5 Life of Mine (LOM) 27 years Average Net Operating Cost per tonne of recovered TiO2 US$ 1,214 Total initial capital costs US$ 109 million Pre-tax Internal Rate of Return 24% Payback of capital costs 4 years Assumes US$3,000/t TiO2 a
Slide 33: Strong Ti Demand and Price
Strong Ti Demand and Price TiO2 Demand vs Price 12000 4000 TiO2 Global Demand ()volume tonnes TiO2 Price US$ per metric tonne 3500 10000 3000 8000 2500 TiO2 Price 6000 2000 1500 4000 TiO2 Demand 1000 2000 500 0 0 1980 1985 1990 1995 2000 2005 2010 2012 2013 www.reedresources.com 33 Source: US Geolog
Slide 34: Strong long term fundamentals
Strong long term fundamentals Developing Economies Pigment Use Growing with GDP 5 4 Pigment (Kg) Person North America 3 Europe 2 Japan China 1 Global India Asia 0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000 REAL GDP/CAPITA (US$) www.reedresources.com 34 Source: Iluka
Slide 35: Near-term milestones
Near-term milestones Scoping Obtain Mini-pilot Commence Pre Study technology plant Pre- Feasibility +/- 35% licence feasibility Study accuracy Study Results Attract JV Partner* Nov 2013 Dec 2013 Apr– Jul 2014 Aug 2014 Dec 2014 *Subject to board approval www.reedresources.com 35
Slide 36: Focus
Focus www.reedresources.com 36
Slide 37: A growth story for coming year
A growth story for coming year 03 01 02 Demonstrate technical + Demonstrate economic = Obtain Strong partners feasibility viability to commercialise www.reedresources.com 37
Slide 38: Realise inherent value of Advanced Materials assets
Realise inherent value of Advanced Materials assets 175 Mt Marion Meekatharra Barrambie 150 125 Market Capitalisation A$m 100 75 GFC 50 25 0 Dec-05 Jun-06 Dec-06 Jun-07 Dec-07 Jun-08 Dec-08 Jun-09 Dec-09 Jun-10 Dec-10 Jun-11 Dec-11 Jun-12 Dec-12 Jun-13 Dec-13 Jun-14 RDR Goldindex (XGD) www.reedresou
Slide 39: Lithium peer comparison
Lithium peer comparison Shares Last Market Mkt Cap/ Resource Grade Contained Company on Issue Trade Cap per t of (Mt) Li2O (%) Li2O (kt) (M) (AUD$) (AUD$m) Li2O Stria 18 0 0 0 0.18 3.2 n/a RB Energy 254.2 17.1 0.94 160 0.69 175.4 $1,091 Talison 0 61.5 2.8 1,722 0 848 $492 Critical Elements 120.7 26.
Slide 40: Thank you
Thank you www.reedresources.com www.reedresources.com 40
Slide 41: Mineral Resource Estimates
Mineral Resource Estimates Mineral Resource Estimate for the Mt Marion Lithium deposit, as at July 2011, for a block cut-off grade of 0.3% Li2O Measured Indicated Inferred Total Project Area Material type Tonnes Li 2 O% Fe 2 O 3 % Tonnes Li 2 O% Fe 2 O 3 % Tonnes Li 2 O% Fe 2 O 3 % Tonnes Li 2 O% Fe
Slide 42: Mineral Resource Estimates
Mineral Resource Estimates Mineral Resource estimates for the Barrambie Ti-V deposit, as at September 2013, for a block cut-off grade of 15% TiO2 Density TiO2 V2O5 Fe2O3 Al2O3 SiO2 Classification Zone Oxidation MTonnes (t/m3) (%) (%) (%) (%) (%) Eastern Oxide 18.7 2.82 23.29 0.59 42.93 10.70 16.36 T