Arafura Rare Earths Limited · ASX:ARU
Arafura Rare Earths — Arafura Resources — Metal Research Bureau Rare Earths Conference, Tokyo 2010
36 slides from Arafura Rare Earths's conference presentation, Dec 6, 2010
Slide 1: ASX Release: Metal Research Bureau Rare Earths Conference Tokyo
ASX RELEASE 6 December METAL RESEARCH BUREAU RARE EARTHS 2010 CONFERENCE TOKYO, JAPAN For personal use only Arafura’s Nolans rare earth supply opportunity for users worldwide from 2013. Dr Steve Ward, Managing Director and CEO will address the Metal Research Bureau of Japan in Tokyo on the 7 Decembe
Slide 2: A Rare Earths Supply Opportunity For Users Worldwide from 2013
For personal use only A Rare Earths Supply Opportunity For Users Worldwide from 2013 Dr. Steve Ward- Managing Director & CEO Metal Research Bureau Rare Earths Conference Tokyo, December 7th 2010 1
Slide 3: Disclaimer
Disclaimer Important Notice For personal use only This presentation contains certain statements which may constitute “forward-looking statements”. Such statements are only expectations or beliefs and are subject to inherent risks and uncertainties which could cause actual values, results or performa
Slide 4: Arafura – Our Company
Arafura – Our Company “A Speciality Chemical Company” For personal use only which will make products to pharmaceutical grade quality standards. Confirmed Strategy Our vision is to be the recognised leading supplier of Rare Earths to the world. Mission To create and maximise shareholder value in a su
Slide 5: Arafura – Corporate Summary
Arafura – Corporate Summary Successful fundraising recently completed….. For personal use only As at 03 December 2010 *As at 9 December 2010 Capital Capital 335m shares 366m shares 18.1m Board/Employee options 18.1m Board/Employee options Market capitalisation Market capitalisation @ A$1.245 = ~A$41
Slide 6: Business Model Confirmed
Business Model Confirmed Adding Value in Australia….. For personal use only • Mining & ore beneficiation at Nolans Bore in the Northern Territory Big Bertha Drill Program at Nolans Bore • Mineral concentrate transported by rail to Whyalla in South Australia • 20,000 tpa Rare Earth Oxides (REO) produ
Slide 7: Capturing Value in the Industry Supply Chain
Capturing Value in the Industry Supply Chain For personal use only Positioning to maximise value creation..… Rare Earth Mineral Rare Earth Ore Intermediates Metals/Alloys Components OEMs Concentrate Oxides (Carbonate) • Production of Rare Earth Oxides rather than lower priced concentrates or interme
Slide 8: Rare Earths Market
For personal use only Rare Earths Market 7
Slide 9: Supply and demand
Supply and demand The Industry challenge is on the Supply side to keep up with demand….. For personal use only 450,000 400,000 350,000 Nolans phase 2 300,000 opportunity Overall global These forecasts Tonnes per annum tightness has been include new projects: 250,000 exacerbated in Lynas, Molycorp, 2
Slide 10: Current Market Dynamics – The Perfect Storm
Current Market Dynamics – ‘The Perfect Storm.’ The warning signs have been present for sometime….. For personal use only Chinese Export Quota History 2004-2010 (Tonnes REO) REE Production Trends Ye Domestic Foreign Total Y on Y ROW ar Companies Companies Change Demand 150 20 48,040 17,659 65,699 0%
Slide 11: The Industry Response
The Industry Response For personal use only Now moving from shock and concern to responding ….. The strategic importance of Rare Earths is now fully appreciated by many governments including the USA, EEC, Japan, South Korea and Australia. Australian Foreign Minister Kevin Rudd pledges Australia’
Slide 12: Future Supplies
Future Supplies Suppliers will struggle to keep up with demand for many years to come ….. For personal use only Rare Earths is a complex industry and requires a deep understanding. Rare Earths are common in the Earth’s crust but they are very scarce in economically exploitable deposits. It is
Slide 13: Rare Earth Pricing
Rare Earth Pricing Some reports of a price bubble but ….. For personal use only The era of low prices for Rare Earths is behind us. Pricing will follow normal supply demand dynamics. Pricing will take into consideration; The ongoing global tightness of the market. Significant cost of envir
Slide 14: Arafura's World-Class Nolans Project
For personal use only Arafura’s World-Class Nolans Project 13
Slide 15: Nolans Project – Globally Significant
Nolans Project – Globally Significant High potential value, long life, multiple revenue streams with upside potential…. For personal use only Phase 1 Annual Production REO Rare Earths 20,000 t Oxides P 2O 5 as 61% 80,000 t Financial Evaluation October 2010 Phosphoric Acid October 2010 Project Econom
Slide 16: Nolans Project – Key Metrics
Nolans Project – Key Metrics For personal use only Capital Cost ($950m) caters for mine and four processing plants; Rare Earth Oxides, Phosphoric Acid, Uranium Oxide and gypsum Rare Earths – 20,000 t of Rare Earth oxides produced. Good potential financial returns on Rare Earth prices lower tha
Slide 17: Market Value
Market Value Increasing recognition of value in Arafura ……. For personal use only ARU Price History and Volume $2.00 8,000,000 $1.80 7,000,000 $1.60 6,000,000 $1.40 5,000,000 $1.20 $1.00 4,000,000 $0.80 3,000,000 $0.60 2,000,000 $0.40 1,000,000 $0.20 $0.00 0 Volume Share Price Market Capitalisation
Slide 18: Future Work Program
Future Work Program A fast track program to production…… For personal use only 2010 2011 2012 2013 2014 2015 Technology Demonstration Program Nolans Resource Expansion Drilling Bankable Feasibility Study EIS & Regulatory Approvals Customer Contracts Project Financing Construct Mine & Rare Earths Com
Slide 19: Nolans Project Activities 2011
Nolans Project Activities 2011 The next 12 months: For personal use only Technology • Commercial quantities of Rare Earth Oxides produced • Complete piloting and demonstration programs Mine • Complete all engineering and environmental studies • Regulatory approvals • Resource definition and expansio
Slide 20: Arafura Resources – Summary
Arafura Resources – Summary Arafura is a credible part of the future of the Rare Earths industry ….. For personal use only Confirmed Strategy and Business Model World class long life and economically exploitable resources High value creating Nolans Project Highly efficient production process d
Slide 21: Thank You
For personal use only Thank You 20
Slide 22: For more information
For more information…… For personal use only Nolans Project Fact Sheets at www.arafuraresources.com.au 21
Slide 23: Managing Director & CEO's Address – Introduction
ARAFURA RESOURCES LIMITED Rare Earths Conference Tokyo, Japan December 7th 2010 Managing Director & CEO’s Address For personal use only Dr Steve Ward Slides 1 and 2 - INTRODUCTION Thank you for the kind introduction. Good afternoon ladies and gentlemen. It is certainly a great pleasure and honour to
Slide 24: Speaker notes: Our Company
Before I begin the main presentation, I would like to display the following ‘Disclaimer’ slide and ask you to consider the details. For personal use only Slide 3 – ARAFURA – OUR COMPANY Please let me begin with some background comments on our company. Arafura is an Australian based public company wh
Slide 25: Speaker notes: Corporate Summary
years from initial exploration discovery to realizing production of saleable rare earth products. In 2010, we entered the ‘Emerging Company” phase of our corporate For personal use only development. We have stepped-up all our work programs and are now on a ‘fast-track’ development timeline to reach
Slide 26: Speaker notes: Capital raising
recent fund raising, we are now well placed to progress to the Project Financing stage late in 2011. I would like to comment in a little more detail on our recent capital raising. For personal use only Rare earth projects are very capital intense. We will need to raise approximately $1 Billion in Pr
Slide 27: Speaker notes: Business Model
Slide 5 – BUSINESS MODEL CONFIRMED During 2010, we made a significant step forward with the confirmation of our Business Model. This is a truly value adding proposition in Australia. For personal use only Ore will be mined and beneficiated into a mineral concentrate at Nolans Bore in the Northern Te
Slide 28: Speaker notes: Supply and Demand
as a supplier at that point in the industry chain. Our analysis demonstrated that this was the most value creating opportunity for us. We have made excellent progress with the technology development which For personal use only is on track to be completed by the end of this year. There is considerabl
Slide 29: Speaker notes: Supply outlook
also illegal. China does not have latent idle capacity which could be brought on line to increase supplies. If China decides to increase export quotas, this will simply create shortages in China. For personal use only There are very few economically viable Rare Earth Projects which are sufficiently
Slide 30: Speaker notes: Industry Response
Strong growth demand for rare earths in high technology applications Consolidation of global production essentially into one country, For personal use only China in a relatively short timeframe, with very few potentially viable projects advanced outside of China. The USGS highlighting the crit
Slide 31: Speaker notes: Future Supplies
Several governments have held conferences and meetings to determine how to establish secure future supplies. Only 2 weeks ago, the Australian Foreign Minister pledged Australia’s support to supply Japan. For personal use only Governments and OEM’s have begun to support new projects with either sales
Slide 32: Speaker notes: Rare Earth Pricing
Taking all the above details into consideration, we contend that the current market dynamics are certainly not a classic bubble. Slide 12 – RARE EARTH PRICING For personal use only As the Rare Earths Industry moves forward we believe we will see pricing that follows normal supply/demand dynamics in
Slide 33: Speaker notes: Nolans Project
In summary, the era of low prices for rare earths is behind us! For personal use only Slide 14 – NOLANS PROJECT – GLOBALLY SIGNIFICANT Arafura’s Nolans Project is globally significant. It has a number of attributes to justify this billing. These include: long life, proven resource, attractive rare e
Slide 34: Speaker notes: Market Value
We believe that in a holistic sense, when one considers all aspects of the project, it is capital efficient and competitive, provides excellent potential For personal use only returns and has a very effective competitive production cash cost for rare earth oxides. Slide 16 – MARKET VALUE Turing now
Slide 35: Speaker notes: Project Activities 2011
A key feature of the next 12 months will be to enter into commercial arrangements with selected customers. Discussions have begun and will accelerate over the next few months. Our future production is currently For personal use only uncommitted and we represent a great opportunity for users seeking
Slide 36: Speaker notes: Summary
Slide 19 – ARAFURA RESOURCES - SUMMARY Ladies and Gentlemen, Arafura is most certainly a credible part of the future of the rare earths industry which we believe is moving into a new For personal use only and exciting era. We have all the building blocks in place to be successful. We are poised to r
Arafura Resources — Metal Research Bureau Rare Earths Conference, Tokyo 2010 on 6ix