Australian Mines Limited · ASX:AUZ
Australian Mines — Investor Presentation (November 2018)
36 slides from Australian Mines's investor presentation, Nov 20, 2018
Slide 1: Investor Presentation
Investor Presentation November 2018
Slide 2: Disclaimer
Disclaimer Forward Looking Statements This document may contain forward looking statements. Forward looking statements can generally be identified by the use of forward looking words such as, ‘expect’, ‘anticipate’, ‘likely’, ‘intend’, ‘should’, ‘could’, ‘may’, ‘predict’, ‘plan’, ‘propose’, ‘will’,
Slide 3: Disclaimer (cont'd)
Disclaimer (cont’d) CAUTIONARY NOTE FOR U.S. INVESTORS REGARDING RESERVE AND RESOURCE ESTIMATES All resource estimates by the Company in this Presentation were calculated in accordance with the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the “JORC Code
Slide 4: Investment Highlights
INN AUSTRALIAN MINES LIMITED Investment Highlights
Slide 5: 100% owner of multiple battery metals projects in a stable jurisdiction
✓ 100% owner of multiple battery metals projects in a stable jurisdiction ✓ Advanced project pipeline with a development-ready flagship project ✓ Processing plant using proven 5th Generation technology and design ✓ 100% off-take agreement for expected cobalt and nickel production from Sconi Project
Slide 6: Sconi: Australia's most advanced cobalt-nickel-scandium project
Sconi: Australia’s most advanced cobalt- nickel-scandium project
Slide 7: Existing infrastructure, proven flowsheet, local township
Existing infrastructure Local township 100% cobalt + nickel off-take Proven processing flowsheet Production of final battery metal products 6
Slide 8: Sconi milestones: completed and upcoming
✔ Complete 100% acquisition of Sconi ✔ Commissioning of demonstration plant ✔ Secure off-take for cobalt and nickel ✔ Deliver Bankable Feasibility Study Finalise project financing Mineral Resource update Deliver optimised Feasibility Study Secure off-take for scandium Commence construction 7
Slide 9: Sconi: Favourable location for mining operations
Sconi: Favourable location for mining operations Existing infrastructure in place = Greenvale township, to house Sconi workforce, within 10 kilometres of the proposed operation = Existing grid power and water supplies to site = Within 250 kilometres of major port facilities and airport in Townsville
Slide 10: Electric vehicle battery producer since 2011 (SK innovation)
▪ Electric vehicle battery producer since 2011 ▪ Korean-headquartered, part of SK Holdings, which is the 3rd largest Korean company with annual revenue in excess of US$120 billion) ▪ Existing partners include: European and Korean car companies SK innovation proactively seeking to boost manufacturing
Slide 11: Processing flowsheet
H2SO4 MINED ORE CRUSHING AND HIGH SCANDIUM SCANDIUM Sc203 FROM SCONI GRINDING OF PRESSURE SOLVENT PRECIPITATION ORE ACID LEACH EXTRACTION (HPAL) (ScSX) COBALT SULPHATE CRYSTALLISATION IRON REMOVAL MIXED PRESSURE SOLVENT CoSO4 (FeR) SULPHIDE OXIDATION LEACH EXTRACTION Steam PRECIPITATE (POX) (SX) Lim
Slide 12: Aluminium-scandium alloys have superior qualities
▪ ▪ Aluminium-scandium alloys have superior qualities to existing : ✓ Increased strength and rigidity – enables significant weight saving advantages for the automotive sector via the transition to the significant the thinner, lighter yet stronger Al-Sc alloy ✓ Superior level of corrosion resistance
Slide 13: Australian Mines: A potential low-cost producer of scandium
Australian Mines: A potential low-cost producer of scandium * Demand traditionally constrained due to scarcity of supply and Ka corresponding high price “enaium od? « Along term, secure, cost-effective source will help drive demand for scandium over the long term " Active discussions with potential
Slide 14: Sconi: Bankable Feasibility Study
Sconi: Bankable Feasibility Study
Slide 15: BFS key results: 18 year project life
18 Year Project Life Pre-Tax IRR: 21% Pre-Tax NPV: $1.31 Billion 5.2 Year Payback Period Post-Tax IRR: 15% Post-Tax NPV: $697 million (post tax) (potential upside from resource extension drilling) (@ 8% discount rate) Strong Forecasted Financials Life-of-Mine Average Operating Costs: Capital Cost Es
Slide 16: BFS key assumptions
Initial Mine Life 18 years Throughput 2.0 million tonnes per annum Annual Feed Grade 0.10% Cobalt, 0.67% Nickel 18 years Recovery Cobalt 96%, Nickel 95% Strip ratio 1.06 (waste) : 1.0 (ore) Nickel Price US$7 per pound Nickel Sulphate Premium US$2 per pound Cobalt Price US$30 per pound Cobalt Sulphat
Slide 17: Projected post ramp-up production
▪ Projected post ramp-up production: ▪ Average cobalt sulphate production (Years 2 - 6): 9,898 tonnes per annum ▪ Average nickel sulphate production (Years 2 - 6): 70,894 tonnes per annum ▪ Average cobalt sulphate production (Life of Mine): 8,496 tonnes per annum ▪ Average nickel sulphate production
Slide 18: Total Projected Revenue and EBITDA
▪ ▪ Total Projected Revenue and EBITDA ($m) Nickel Sulphate Revenues (A$m) Cobalt Sulphate Revenues (A$m) Scandium Oxide Revenues (A$m) Total EBITDA (A$m) 800 700 600 500 400 300 200 100 0 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 17
Slide 19: Capital Cost Breakdown
▪ ▪ Capital Cost Breakdown US$m Mining 32 Processing Plant 730 Non-Process Infrastructure 102 Contingencies 110 Total 974 18
Slide 20: C1 Cash Cost Breakdown
▪ C1 Cash Cost Breakdown (US$ per pound of nickel produced) Mining 0.61 Ore handling 0.54 Processing 4.19 G&A 0.32 Freight 0.08 Subtotal 5.73 Less Co credit (4.86) Less Sc credit (0.39) Total C1 operating costs 0.48 19
Slide 21: Projected Cash Flows
Projected Cash Flows ($m) Net Free Cash Flow post tax (A$m) Cumulative net FCF post tax ($Am) 3,000 2,500 2,000 1,500 1,000 500 0 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 -500 -1,000 -1,500 -2,000 ▪ ▪ 20
Slide 22: Off-take terms: Cobalt & Nickel, Scandium
Cobalt & Nickel4 Duration 7 years with 6 year extension option Pricing LME plus a premium for sulphate Quantities Up to 12,000 tonnes of battery-grade cobalt sulphate and up to 60,000 tonnes of battery-grade nickel sulphate (following a 2-year ramp up) Timing Mining to commence before 31 December 20
Slide 23: Sconi development timeline and local development plans
SCONI Feasibility Study Finalise Commence Commencement Commissioning of First export to delivered project construction of mining processing plant European battery funding by October 2020 by July 2021 plant by Sep 2021 2018 2019 2020 2021 2022 Local Development Plans Upgrading the regional Greenvale
Slide 24: Significant potential to increase the current Ore Reserve at Sconi
▪ Significant potential to increase the current Ore Reserve at Sconi ▪ as a large portion of the favourable cobalt-nickel-scandium bearing geology at Sconi remains untested by drilling ▪ Ore Reserve Summary Classification Ore Nickel Cobalt Scandium (million tonnes) (%) (%) (ppm) Proved 6.93 0.79 0.1
Slide 25: Sconi
Sconi IX AUSTRALIAN MINES v LIMITED australianmines.com.au
Slide 26: Continued engagement with local government and community
Sconi Bankable Feasibility Study Continued engagement with local government and community = Australian Mines to invest in significant upgrades to local infrastructure as part Sconi development, including, but not limited to, funding: = upgrading the water supply to the Greenvale township = widening
Slide 27: Other Projects: Flemington Cobalt-Nickel-Scandium
Other Projects: Flemington Cobalt-Nickel-Scandium ▪ ▪ ▪ ▪ Upcoming Milestones for 2019 Resource Expansion Drilling Cobalt-Nickel Mineral Resource Update 26
Slide 28: Other Projects: Thackaringa Cobalt Project
Other Projects: Thackaringa Cobalt Project ▪ ▪ Upcoming Milestones for 2019 Maiden drilling program 27
Slide 29: Experienced Management Team
Experienced Management Team Michael Ramsden Benjamin Bell Chairman Managing Director Lawyer with 30 years experience as a Geophysicist with 20 years experience in the minerals corporate advisor industry Mick Elias Tim Maclean Director Chief Operating Officer International recognised expert in lateri
Slide 30: Capital Structure and Share Price Performance
Capital Structure Operating Locations Stock code ASX: AUZ OTCQB: AMSLF Frankfurt Stock Exchange: MJH Shares on issue 2,716 million Share price (12 Nov 2018) $0.06 Market Capitalisation $162 million Net Cash Position $7.9 million (30 Sep 2018) Board & Management Share Price Performance Michael Ramsde
Slide 31: For further information
For further information: Shareholder contact: Media contact: Sophia Bolhassan Michael Cairnduff Investor Relations Manager Cannings Purple p: +61 488 022 944 p: +61 406 775 241 e: sbolhassan@australianmines.com.au e: mcairnduff@canningspurple.com.au australianmines.com.au
Slide 32: Appendix 1: Sconi Project - Mineral Resources
Appendix 1: Sconi Project - Mineral Resources Classification Tonnes Nickel equivalent Nickel Cobalt (million tonnes) (%) (%) (%) Measured 4.80 0.99 0.85 0.07 Indicated 9.71 0.87 0.77 0.05 Inferred 7.11 0.62 0.53 0.04 TOTAL 21.61 0.82 0.71 0.05 Greenvale Mineral Resource (includes in-situ and dump ma
Slide 33: Appendix 2: References
Appendix 2: References Slide 9 : SK innovation 1 See SK innovation’s news release dated 6 March 2018. http://www.ajudaily.com/view/20181001145049871 www.koreaherald.com/view.php?ud=20180824000469 Slide 12 : Australian Mines - A potential low-cost producer of scandium 2 EMC Metals Corp, Scandium: A r
Slide 34: Appendix 2: References
Appendix 2: References Slide 21 : Sconi Off-take 4 See Australian Mines’ announcement to the ASX dated 6 March 2018 for full details of the terms of its binding off-take agreement with SK Innovation, which include the following key commercial terms: • A seven-year contract term from the first shipme
Slide 35: Appendix 2: References
Appendix 2: References Slide 24 : Continued engagement with local government and community 6 See Australian Mines’ announcement to the ASX dated 15 October 2018 for full details. Slide 26 : Other Projects: Flemington Cobalt-Nickel-Scandium 9 The Mineral Resource Estimate for the Flemington Cobalt-Sc
Slide 36: Appendix 3: Competent Persons Statement
Appendix 3: Competent Persons Statement Sconi Project, Queensland The information in this report that relates to Mineral Resources is based on, and fairly reflects, information compiled by Mr David Williams, a Competent Person, who is an employee of CSA Global Pty Ltd and a Member of the Australian
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