Arafura Rare Earths Limited · ASX:ARU
Arafura Rare Earths — Arafura Resources — Japanese Business Seminar 2008
23 slides from Arafura Rare Earths's conference presentation, May 20, 2008
Slide 1: Arafura Resources Limited Japanese Business Seminar
For personal use only Arafura Resources Limited Japanese p Business Seminar Alistair J Stephens Managing Director M 2008 May Hosted by the Northern Territory Government
Slide 2: Important Notice
Arafura Resources Ltd For personal use only Important Notice This presentation contains certain statements which may constitute "forward-looking statements". Such statements are only predictions and are subject to inherent risks and uncertainties which could cause actual values, results, performance
Slide 3: Topics
Topics For personal use only 1. Overview of Arafura 2. Overview of the rare earths market 3 Overview 3. O i off the th Nolans N l project j t Nolans – will not be the biggest But it will be the best
Slide 4: Overview of Arafura
Overview of Arafura For personal use only ASX listed (as at 1 May 2008) ASX:ARU 145.6 million shares ASX:ARUO 8.9 million options (13 cents) expiring 30 June 2008 Principle project – Nolans phosphate hosted rare earths Rare earths & Phosphoric acid – strategically vital commodities Exploration proje
Slide 5: Rare earths – history and future
Rare earths – history and future For personal use only Market driver Industry Structure 1900s Emerging market in flint Emerging g g market 1950s Polishing and glass 1960s Oil industry catalyst Strong growth 1970s CRT TV era 1980s Batter era Battery Industry reforms 1990s Magnet era 2000 Electronics
Slide 6: Demand for our products is strong
Demand for our products is strong For personal use only Rare Earths Chemical catalysts Growing at 5% to 10% per annum Stronger growth to come from rechargeable battery market and increased heavy crude oil production Magnets Market growth currently 15% to 20% per year Strong growth in the hybrid car
Slide 7: Rare earths supply chain
Rare earths supply chain For personal use only China Japan Europe & USA India & Russia China dominates supply and controls the supply chain
Slide 8: Japan's market share
Japan’s market share For personal use only nes tonn Global 50% 45% 35% 20% 50% share
Slide 9: Nolans is enriched in higher value RE
Nolans is enriched in higher value RE For personal use only age percenta 5% 27% 68% Value US$/Kg 9.0 10.8 11.50 12.2 13.95 Nolans has additional a co-product of phosphoric acid and by-products of uranium and calcium chloride Baotou has a co-product of iron SEGY = Samarium, europium, gadolinium, yttr
Slide 10: Nolans final product value
Nolans final product value Product value including co-product and by-product credits in US$/kg as REO equivalent For personal use only Refer to appendix for pricing assumptions Nolans Expressed in US$/Kg REO equivalent US$/kg REO
Slide 11: Nolans project location
Nolans project location For personal use only Nolans project 135 km north of Alice Springs 5km to g gas line 10km to Stuart Highway 15km to Aileron Roadhouse 60 km to rail line 1200 km north to Darwin 1300 km south to Port Pirie
Slide 12: Nolans Project Flowsheet
Nolans Project Flowsheet seer t ees ast Pie mateanere maa agement RNIN . 46 . Chemical Separation ‘ i | | 1 Rare Earth Uranium Phosphoric rac Concentrate Oxide Acid (By-Product) . . egos ee eT t. oe Siero ee Oe as
Slide 13: Nolans resource
Nolans resource For personal use only 18.6 mt of Indicated and Inferred resources - JORC compliant 577,000 tonnes REO (3.1%) and 2.1mt P2O5 (14%), 4,000 t U3O8 (0.47lb/t) Only drilled to 100m below surface Drilling has identified more mineralisation not yet classified as resources Exposed at surface
Slide 14: Simple mining
Simple mining For personal use only Small quarry < 1.7m tpa Conventional drill and blast open pit Crush, screen, upgrade ore by heavy media separation Transport <500,000 tpa concentrated product using truck and rail Low power and water demand
Slide 15: Current Results – HMS & PA
Current Results – HMS & PA For personal use only HMS = Heavy Media Separation Effective rejection of waste and 85% recovery of REO and phosphate Will upgrade the resource grade from 3.1% REO to at least 6% or better PA = Phosphoric acid Indicative results show a better than 80% recovery Premium qual
Slide 16: Capital costs
Capital costs For personal use only Pre-feasibility costs estimates accurate to ±30% Mine site $85m grinding & leaching Rare Earths Uranium Phosphoric CC Equipment costs $80m $10m $75m $40m Installation $140m $15m $140m $45m Total process plant $220m $25m $215m $85m Total process costs include equip
Slide 17: Operating costs
Operating costs For personal use only Pre-feasibility costs estimates accurate to ±30% $50m $150m $50m • Mining • Chemicals • Power • Transport • Maintenance • Administration Excludes royalties or corporate costs Several chemical manufacturers have expressed strong interest in building and operating
Slide 18: Nolans revenues – at May 2008
Nolans revenues – at May 2008 For personal use only Rare Earths Phosphoric Acid Uranium Calcium Chloride 20,000 150,000 150 400,000 tonnes pa tonnes pa tonnes pa tonnes pa US$15,000/t US$1,800/t US$75/lb US$100/t US$300m US$210m US$25m US$40m Total revenue per annum 2008 value USD $575m Revenue at e
Slide 19: Nolans business structure
Nolans business structure For personal use only Mining & Phosphoric acid Rare Earths Onsite Plant Plant Processing 100% Arafura Looking for offtake Looking for partner • Autocatalysts Rare Earth • FCC catalyst in oil Phosphoric Catalysts acid • Electronics Magnet • HEV motor market • Plasma Pl di di
Slide 20: Nolans markets
For personal use only Nolans markets
Slide 21: Arafura Resources Limited – strong management team
Arafura Resources Limited For personal use only Strong management team Experienced and motivated A reputation for delivering Nolans project An open resource to support long life, strategic growth opportunities Strong community endorsement of the project Strategically important with strong industry i
Slide 22: Arafura Resources Limited Japanese Business Seminar
For personal use only Arafura Resources Limited Japanese p Business Seminar Alistair J Stephens Managing Director M 2008 May Hosted by the Northern Territory Government
Slide 23: Pricing assumptions - US Dollars
Pricing assumptions - US Dollars For personal use only Commodity Prices 2007 2008 PFS actual Q1 actual assumptions REO in USD/kg Ce 3.75 1.5 La 4.75 1.75 Nd 31.5 30.0 Pr 31.0 35.0 Sm 4.5 5.0 Gd 15.0 5.0 Eu 430 300 0 300.0 Dy 105 100.0 Tb 710 0.0 Phosphoric acid spot 600 1800 400 per tonne P2O5 Calci