Sovereign Metals Limited · ASX:SVM
Sovereign Metals — Investor Presentation (February 2018)
29 slides from Sovereign Metals's investor presentation, February 2018
Slide 1: Malingunde Graphite Project: The Saprolite Advantage
MALINGUNDE GRAPHITE PROJECT THE SAPROLITE ADVANTAGE A SIMPLE OPERATION WITH SUBSTANTIAL COST BENEFITS OVER PEERS. FEBRUARY 2018 ASX:SVM
Slide 2: Sovereign Metals Overview
SOVEREIGN METALS OVERVIEW. A RARE COMBINATION OF EXCEPTIONALLY LOW CAPEX & OPEX PROVIDES A CLEAR PATHWAY TO PRODUCTION. . 1. WORLD’S LOWEST OPEX & CAPITAL INTENSITY1. 2. A SIMPLE STRATEGY BASED ON MARKET FUNDAMENTALS. 3. A STABLE JURISDICTION WITH CLEAR PATHWAY TO MARKET. 4. FULLY FUNDED TO DFS WITH
Slide 3: Malingunde: The Lowest Cost Graphite Development
MALINGUNDE: THE LOWEST COST GRAPHITE DEVELOPMENT. • Saprolite is the very soft, graphite-bearing, clay-rich oxide material that is formed from intense weathering of the original bedrock. • Malingunde is the world’s largest reported saprolite-hosted graphite resource. Resource update expected Q2 2018
Slide 4: Saprolite Advantage: Very Simple Operations With Enormous Cost Advantages Versus All Peers
SAPROLITE ADVANTAGE: VERY SIMPLE OPERATIONS WITH ENORMOUS COST ADVANTAGES VERSUS ALL PEERS. NO DRILLING OR BLASTING, NO CRUSHING OR GRINDING REQUIRED. Sovereign – Soft saprolite (clay) material Peers – Hard rock material 3
Slide 5: Potential for a Simple & Highly Profitable Flake Graphite Operation
POTENTIAL FOR A SIMPLE & HIGHLY PROFITABLE FLAKE GRAPHITE OPERATION. MALINGUNDE SOFT SAPROLITE-HOSTED DEPOSIT TO DELIVER VERY LOW COST PRODUCTION, WITH BEST IN CLASS MARGINS. OPERATING COST HIGHEST MARGINS BOTTOM OF THE COST CURVE CAPITAL COST & INTENSITY $ LOWEST OF ALL PEERS OPERATIONS LOWEST RISK
Slide 6: Malawi: A Mining Friendly Jurisdiction With Logistics Solution in Place
MALAWI: A MINING FRIENDLY JURISDICTION WITH LOGISTICS SOLUTION IN PLACE. • Enviable access to infrastructure; just 20km from Lilongwe, the capital of Malawi. • A stable, transparent jurisdiction, increasingly attracting significant international investment. • Transport MoU signed with Vale & Mitsui.
Slide 7: Malingunde: Project Economics
MALINGUNDE: PROJECT ECONOMICS
Slide 8: Malingunde: Generating Value Through a Simple, Low Cost Strategy
MALINGUNDE: GENERATING VALUE THOUGH A SIMPLE, LOW COST STRATEGY. JUNE 2017 SCOPING STUDY OUTCOMES. US$301/t Average US$29m Total OPERATING DEVELOPMENT COST CAPEX 1.5 years <Capital PAYBACK PERIOD 17yrs 44kt Total Average ANNUAL MINE LIFE PRODUCTION 7
Slide 9: Malingunde: Low Cost Equates to Superior Margins & Very Short Payback
MALINGUNDE: LOW COST EQUATES TO SUPERIOR MARGINS & VERY SHORT PAYBACK IN ALL PRICING SCENARIOS. • Credible pricing assumptions for product sold to existing markets. • Exceptional margins even in bearish global pricing scenarios. MALINGUNDE OPEX BREAKDOWN MALINGUNDE MARGIN & PAYBACK ANALYSIS (US$/t c
Slide 10: Malingunde: The Ability to Generate Cash From Existing Markets
MALINGUNDE: THE ABILITY TO GENERATE CASH FROM EXISTING MARKETS. • SVM’s simple, low cost strategy is the clearest and lowest risk path to market. • Low cost will enable sales to existing traditional markets and the rapidly growing battery supply chain. • Project economics not contingent on extreme v
Slide 11: Malingunde: A Very Rare Combination of Low Opex & Low Capex
MALINGUNDE: A VERY RARE COMBINATION OF LOW OPEX & LOW CAPEX WITH REALISTIC SCALE. • Malingunde Scoping Study: Q1 operating costs and best in class capital intensity. • Malingunde’s production volumes can be realistically placed into current markets. • Many peers are only economic at unrealistic scal
Slide 12: Malingunde: Technical Detail
MALINGUNDE: TECHNICAL DETAIL
Slide 13: Mining: Soft, Near Surface Material, Free Dig, Simple and Cheap to Mine
MINING: SOFT, NEAR SURFACE MATERIAL. FREE DIG, SIMPLE AND CHEAP TO MINE. • Saprolite is the very soft, graphite-bearing, clay-rich oxide material formed from intense weathering of the original bedrock. • The Malingunde deposit is near surface, free dig and has a very low strip ratio of 0.5. • By com
Slide 14: Processing: High Grade Concentrates Produced via a Simple Process Flow-Sheet
PROCESSING: HIGH GRADE CONCENTRATES PRODUCED VIA A SIMPLE PROCESS FLOW-SHEET. • Simple process flowsheet – no primary crush or grind. • Significant capex & opex benefits over hard-rock processing. • Modular design enables scalability. • High grade concentrate across all flake size fractions. CONCENT
Slide 15: The Graphite Market
THE GRAPHITE MARKET
Slide 16: Natural Flake Graphite: Understanding Demand
NATURAL FLAKE GRAPHITE: UNDERSTANDING DEMAND. • Long term growth forecasts for energy storage are very compelling. • Significant graphite demand is also driven by traditional industrial applications. OVERALL NATURAL GRAPHITE DEMAND CURRENT APPLICATIONS FOR NATURAL GRAPHITE (ktpa) 2,500 85% Existing
Slide 17: The Battery Revolution Is Rapidly Gaining Momentum
THE BATTERY REVOLUTION IS RAPIDLY GAINING MOMENTUM. SOVEREIGN METALS WILL BE IN THE BEST POSITION TO SUPPLY HIGH QUALITY, LOW COST GRAPHITE FOR BOTH BATTERY & TRADITIONAL APPLICATIONS. ANNUAL GLOBAL EV SALES BY VEHICLE CLASS (million cars per year) Bloomberg New Energy Finance BATTERY PACK COMMODITY
Slide 18: Natural Flake Graphite: Understanding Supply
NATURAL FLAKE GRAPHITE: UNDERSTANDING SUPPLY. • The ability to compete on price with China is critical to project success, noting Chinese supply is increasingly constrained by quality & environmental factors. • China remains the dominant and lowest cost global producer. Canada 2% 75% Turkey 4% India
Slide 19: Summary
SUMMARY
Slide 20: Next Steps: Rapid Pathway to Production
NEXT STEPS: RAPID PATHWAY TO PRODUCTION. ACCELERATED PROJECT DEVELOPMENT BASED ON EXCEPTIONAL SCOPING STUDY OUTCOMES. 1. Pre-feasibility study. ~Q2 2018 2. Product sales agreements. Underway 3. Feasibility study & permitting. ~Q4 2018 4. Project finance. ~Q1 2019 19
Slide 21: Malingunde: The World's Best Flake Graphite Project
MALINGUNDE: THE WORLD’S BEST FLAKE GRAPHITE PROJECT. US$301/t US$29m 44kt 17yrs <1.5 years Average Total Average Total Capital OPERATING DEVELOPMENT ANNUAL MINE LIFE PAYBACK COST CAPEX PRODUCTION PERIOD TECHNICAL FINANCIAL World’s largest, soft saprolite graphite Best in class opex resource Be
Slide 22: Appendix
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Slide 23: Market Information
MARKET INFORMATION. OPPORTUNITY FOR MATERIAL RE-RATE: CAPITAL STRUCTURE1 DELIVERY OF WORLD CLASS SCOPING STUDY Shares on Issue 276,796,073 WITH A CLEAR & SIMPLE STRATEGY. Unlisted Options ($0.10 to $0.18) 24,916,667 Performance Rights 700,000 ASX : SVM SHARE PRICE MOVEMENT Un-Diluted Market A$37.4 m
Slide 24: Management Team With a Proven Track Record of Success
MANAGEMENT TEAM WITH A PROVEN TRACK RECORD OF SUCCESS. RAISED +A$285M IN 2017 TO FUND NATURAL RESOURCE PROJECTS, INCLUDING TWO PROJECTS CURRENTLY IN CONSTRUCTION. Mr Middlemas was a Senior Group Executive for Normandy Mining for more than ten years, which was IAN MIDDLEMAS Australia’s largest gold m
Slide 25: Malingunde: Significant Ability to Generate Cash
MALINGUNDE: SIGNIFICANT ABILITY TO GENERATE CASH. • Rapid payback of initial capital. • Margin sensitivity highlights the significant cash generated across a wide range of price scenarios. CAPITAL ESTIMATE CASH FLOW PROFILE – PRICING SENSITIVITY (US$M) (US$, 44ktpa for 17 yrs) DEVELOPMENT CAPITAL US
Slide 26: Disclaimers
DISCLAIMERS. DISCLAIMER NOTICE This presentation has been prepared as a summary only, and does not contain all information Sovereign Metals Limited’s (“SVM”) assets and liabilities, financial position and performance, profits and losses, prospects, and the rights and liabilities attaching to SVM’s s
Slide 27: Competent Persons Statement
COMPETENT PERSONS STATEMENT. COMPETENT PERSONS STATEMENT The information in this presentation that relates to Mineral Resources is extracted from an announcement dated 18 April 2017. This announcement is available to view on www.sovereignmetals.com.au. The information in the original ASX Announcemen
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Slide 29: Sovereign Metals Limited
Sovereign Metals Limited | ASX : SVM T: +61 8 9322 6322 | F: +61 8 9322 6558 E: info@sovereignmetals.com.au | www.sovereignmetals.com.au Level 9, BGC Centre, 28 The Esplanade, PERTH WA 6000 | ABN: 71 120 833 427 FOLLOW US
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