Sundance Resources — Vimy Resources — Diggers and Dealers 2015
34 slides from Sundance Resources's conference presentation, Aug 5, 2015
Slide 1: Vimy Resources Limited
Vimy Resources Limited Diggers and Dealers – 5 August 2015 Mike Young, Managing Director and CEO
Slide 2: Uranium myths
Uranium myths “I can assure you that none of us are in the pay of the nuclear industry. I was very anti-nuclear until I worked on the after effects of the Chernobyl accident – now I am very pro-nuclear as I realise that we have an unwarrented fear of radiation, probably due to all the rubbish about
Slide 3: Uranium
Uranium Nuclear power ● A non-fossil fuel for base load power > Easy to transport, no particulates, no pollution > Extremely high energy density > Lower CO2 emissions than all but hydro and wind energy ● One of the cheapest forms of electricity > Fuel costs approximately 6% of total cost of electric
Slide 4: Power Fundamentals
Power Fundamentals Watts the story ● Watt = V x A (60 W light globe) > Capacity measured in Watts electric (kWe, MWe, GWe) > Output measured as Watt-hours (kWh, MWh GWh) ● Power generation > Power plants labeled by “Installed Capacity” (5MW, 800MW, 1000 MW = 1GW) > “Capacity Factor” is measure of av
Slide 5: Power Fundamentals
Power Fundamentals Base load ● Minimum capacity required on an ongoing continuous basis ● Fossil fuels, Hydroelectric, nuclear are the ONLY options – cost & reliability Peak demand ● Additional capacity to meet relatively short periods of high demand ● Higher cost capacity that can be switched on an
Slide 6: Uranium: A paradigm shift is coming
Uranium A paradigm shift is coming ● Global market balance switching to an overall shortage > New reactors cause big increase in demand > 3 years’ supply to initially fill core + 1 year’s stock in supply chain ● Increased demand mainly from China > China expected to add 15 GWe of capacity in 2015 >
Slide 7: China's coal use
China’s coal use – 5 Bt p.a. by 2020 ● Daquin Rail – 20,000 t and 3.2km long ● 6,250 t per km ● 5Bt = 800,000 km of coal trains ● Distance to moon = 384,400 km ● Nearly half of China’s RR used for movement of coal ● Rail network can’t sustain China’s energy growth using coal ● What would a train loo
Slide 8: China one day's coal use would fill a train 2200 km long
China one day’s coal use would fill a train 2200 km long ● Daquin Rail – 20,000 t and 3.2km long ● 6,250 t per km ● 5Bt = 800,000 km ● Distance to moon = 384,400 km ● Nearly half of China’s RR used for movement of coal ● Rail network can’t sustain China’s energy growth using coal ● What would a trai
Slide 9: Demand for reliable clean power – the next China boom
Demand for reliable clean power – the next China boom China continues to grow ● China’s rate of growth this century is c.10% pa GDP / kWh correlation ● Expected to average 5% to 6% y-o-y over next 20 years – economy will still treble in size $70,000 ● By 2035 – average wealth as measured by GDP / R²
Slide 10: IEA World Energy Outlook: Growth in Nuclear Energy
International Energy Agency World Energy Outlook 2012-2040 Growth in Nuclear Energy Three Scenario energy projections to 2040: • Current policies • New Policies • 450 Scenario which seeks to limit the LT increase in average global temperature to 2oC by keeping CO2 at 450 ppm Source: MCA, IEA – World
Slide 11: Uranium incentive price for new production
Uranium incentive price for new production Incentive price in 2015 US$ 160.0 0.88 140.0 0.77 120.0 0.66 Cost of Concentrate Cost to Electricity 100.0 0.55 Cents / kWh US$ / lb 80.0 0.44 Longer term additional 50-60kt required suggests 60.0 0.33 contract price rise > US$95/lb 40.0 0.22 Additional req
Slide 12: Mulga Rock Uranium Project, Western Australia
Mulga Rock Uranium Project, Western Australia The second largest uranium deposit in Western Australia ● Large, low-cost, long life asset ● 59.7 Mt @ 550ppm U3O8 for 73 Mlb (32,800t) U3O8* ● Clear cut geology, mining and metallurgy ● 16 year LOM with estimated total production 47 Mlb U3O8 ● PFS ident
Slide 13: Mulga Rock Uranium Project
Mulga Rock Uranium Project Mulga Rock West Mulga Rock East Emperor Shogun Princess Mulga Rock Camp Ambassador ● Remote, arid location with no local inhabitants + 200km to nearest town ● Deposits covered by granted Mining Leases ● Access is via the Tropicana Mine Road – AngloGold Ashanti 13
Slide 14: Project plan of deposits
Project plan of deposits ● Initial focus on Mulga Rock East 14
Slide 15: Geology – flat and simple
Geology – flat and simple ● Hosted within deeply weathered sediments comprising carbonaceous sandstone; silt; sandy lignites ● Mostly Uraninite (UO2) associated with carbonaceous material and lignite – no complex silicate minerals ● Deep weathering = soft friable rock ● Deep pit voids to provide tai
Slide 16: Mining – open pit
Mining – open pit ● Recent in-fill drilling confirmed continuity and grade ● Japanese test pit at Shogun in 1980s shows clear demarcation between carbon-rich mineralisation and oxidised overburden ● Deep weathering allowed for free dig mining methods ● PFS/DFS to explore bulk mining methods for over
Slide 17: Where is Vimy placed: peer comparison of global projects
Where is Vimy placed: peer comparison of global projects – Total Resources – 59.7 Mt @ 550 ppm U3O8 for 72.7 Mlbs 19.00 Wheeler River 18.50 (Denison) 0.30 18.00 3.00 Midwest Resource Grade (% U3O8) Legend (Denison) 0.25 Millenium 2.50 Conventional mining (Cameco) Paterson Lake 2.00 South In Situ Rec
Slide 18: Simple metallurgy – acid leach and resin-in-pulp
Simple metallurgy – acid leach and resin-in-pulp ● Beneficiation removes >65% of gangue prior to leach circuit ● Preliminary flow-sheet developed – acid leach and RIP ● Acid leach uranium extraction: > Acid leach = proven technology ● Acid leach exhibits fast kinetics at ambient temperatures > Simpl
Slide 19: Simple metallurgy – myth busting
Simple metallurgy – myth busting ● Beneficiation breakthrough: > Ore is amenable to beneficiation = higher grade feed and smaller process plant > Significant improvements in reagent consumption and leach kenetics = reduced costs > Significant reduction in water usage and tailings volume ROM Composit
Slide 20: Simple metallurgy – myth busting
Simple metallurgy – myth busting Key highlights from the test work: ● Uranium resource contains a large portion of coarse, unmineralised silicate sand ● Uranium mineralisation is associated with light carbonaceous and clay minerals ● Uranium grades resulting from beneficiation are 2.7 – 3.4 times th
Slide 21: Recent achievements
Recent achievements Successful Mulga Rock Scoping Study ● Supports Vimy’s view that the MRUP is Australia’s best undeveloped uranium project ● Indicates that the project is economic at current long-term contract prices for uranium ● Simple mining process, production growth potential, resource growth
Slide 22: Where is Vimy placed? Cash cost curve
Where is Vimy placed? Cash cost curve – SNL.COM Vimy C1 Range LOM US$25 - US$30 22
Slide 23: Corporate overview
Corporate overview Capital structure 1 Board and technical team 2 Shares on issue 1 227.7 million The Hon. Cheryl Edwardes Non-Executive Chairman Share price (14 July 15) $ 0.40 Mike Young CEO and Managing Director Market cap 1 $ 91 million Julian Tapp Executive Director Cash 1 $ 8.9 million David C
Slide 24: People: The Board
People : The Board The Hon. Cheryl Edwardes – Non-Executive Chairman ● Former WA State Government Minister holding Ministries of Environment, Labour Relations and Attorney General ● Providing statutory and approvals advice to Atlas Iron, Hancock Prospecting, FTI Consulting ● Significant networks in
Slide 25: People: The Team
People : The Team Shane McBride – Chief Financial Officer and Company Secretary ● Certified Practicing Accountant with over 33 years of commercial management experience gained in listed Australian companies ● Served as CFO, company secretary and director in exploration, development and producing min
Slide 26: Investment summary
Investment summary A unique uranium development Located in a safe jurisdiction, Attractive deposit with Funding agreed with low risk and sufficient scale and through to low costs long mine life project financing mining process Targeting first Investment decision Robust financials, concentrate produc
Slide 27: Appendix
Appendix Resource tables, project metrics and biographies 27
Slide 28: Pre-feasibility study and schedule
Pre-feasibility study and schedule Metallurgical test work – key breakthrough ● Beneficiation work yields excellent results – significant upgrade ● Leach and U extraction test work (underway) ● Uranium and base metal recovery (underway) Environmental approvals ● Draft Public Environmental Review (PE
Slide 29: Key physical and financial metrics
Key physical and financial metrics Life of Mine (LOM) 16 years Nameplate Run-of-Mine 2.55 Mtpa The Scoping Study results ROM Uranium Grade (Years 1-7) 640 ppm U3O8 confirm the potential ROM Uranium Grade (LOM) 498 ppm U3O8 for the MRUP to be a Average Strip Ratio LOM (waste tonne / ore tonne) 13.6 l
Slide 30: Pre-feasibility Study snapshot July 2015
Pre-feasibility Study snapshot July 2015 ● Mulga Rock – a significant deposit > 72.7Mlb U3O8 (59.7Mt @ 550ppm U3O8)* ● Vimy aims to produce >1,300 tpa U3O8 for +15 years ● Capital and operating costs competitive and falling ● Considered possible to produce concentrate (and by-products) at low costs
Slide 31: U3O8 Mineral Resource Estimate
U3O8 Mineral Resource Estimate Cut-off Grade Tonnes U3O8 U3O8 Deposit / Resource Classification (ppm U3O8) (Mt) (ppm) (Mlb) Mulga Rock East Princess Indicated 200 1.3 690 1.9 Princess Inferred 200 2.5 380 2.1 Ambassador Indicated 200 13.0 750 21.6 Ambassador Inferred 200 15.1 480 15.9 Sub-total 31.9
Slide 32: Base Metal Mineral Resource Estimate
Base Metal Mineral Resource Estimate Tonnes Cu Zn Ni Co Deposit / Resource (Mt) (ppm) (ppm) (ppm) (ppm) Mulga Rock East – tonnes and grade Princess – Indicated 1.3 750 1280 440 210 Princess – Inferred 2.5 270 500 250 140 Ambassador – Indicated 13.0 340 1350 600 250 Ambassador – Inferred 15.1 170 320
Slide 33: Schematic of Mulga Rock process plant
Schematic of Mulga Rock process plant 33
Slide 34: Disclaimer and Competent Persons' Statements
Disclaimer and Competent Persons’ Statements The purpose of this presentation is to provide general information about Vimy Resource Limited (Vimy); it constitutes a professional opinion only and is given in good faith. It is not recommended that any person makes any investment decision in relation t