Slide 1: Epanko: Ready to Go, Ready to Grow
Developing premium quality graphite in Tanzania ASX: KNL EPANKO: READY TO GO, READY TO GROW Developing a high-quality graphite project in Tanzania as a long- term supplier to the rapidly growing global battery market Not for release or distribution in the United States
Slide 2: International Offer Restrictions
I N T E R N A T I O N L O F F E R R E S T R I C T I O N S International Offer Restrictions This document does not constitute an offer of new ordinary shares ("New Shares") of the Company in any jurisdiction in which it would be unlawful. In particular, this document may not be distributed to any per
Slide 3: International Offer Restrictions
I N T E R N A T I O N L O F F E R R E S T R I C T I O N S In the United Kingdom, this document is being distributed only to, and is directed at, persons (i) who have professional experience in matters relating to investments falling within Article 19(5) (investment professionals) of the Financial Se
Slide 4: Important Disclosure and Disclaimer
I M P O R T A N T D I C L O S U R E A N D D I S C L A I M E R Securities Disclaimer This presentation is for informational purposes only and does not constitute an offer to sell, or solicit to purchase, any securities. Such offer can be made only through proper subscription documentation and only to
Slide 5: Investment Case
I N V E S T M E N T C A S E High quality graphite project with completed BFS showing strong economics for 40ktpa Low technical risk – shallow mining with simple metallurgy & processing. Its is all about quality of the graphite and sales of product! Binding offtake agreements for 30ktpa with Ge
Slide 6: Our Vision
O U R V I S I O N OUR VISION: “To become a major producer of high-value, premium quality large flake graphite in Tanzania as a long- term stable supplier of graphite for the high growth battery market” 6 Not for release or distribution in the United States
Slide 7: Corporate Overview
C O R P O R A T E O V E R V I E W CAPITAL STRUCTURE YEAR-TO-DATE SHARE PRICE PERFORMANCE Shares on Issue 190m 0.35 Share Price (15 August 2016) $0.27 0.3 Market Cap (15 August 2016) $51.3m Net Cash (30 June 2016) $2.0m 0.25 Enterprise Value $49.3m 0.2 Unlisted Options – Various Expiries & Exercise P
Slide 8: Overview – The Case for Kibaran
O V E R V I E W – T H E C A S E F O R K I B A R A N Strong base case economics – US$77.5m capital cost, 41.2% IRR, 2.7-year payback, US$197.4m NPV and annual EBITDA of US$33.6m for 25-year mine life based on 40ktpa production Binding agreements in place for 100% of projected BFS annual productio
Slide 9: Placement Overview
P L A C E M E N T O V E R V I E W PLACEMENT Size and Structure Unconditional placement of 47.3m new ordinary Kibaran shares (New Shares) to sophisticated and professional investors to raise approximately $10.9m (before issue costs) under Kibaran’s existing 25% placement capacity (Placement) Placemen
Slide 10: Use of Funds
U S E O F F U N D S EPANKO EXPANSION & PRE-DEVELOPMENT Expansion and pre-development activities to provide a seamless timeline from debt financing to development of the Epanko Graphite Project Engineering design and project expansion study (60ktpa) to BFS standards Grade control, Mineral Resourc
Slide 11: Why Tanzania?
W H Y T A N Z A N I A ? Low Sovereign Risk Corporate Tax (30%) Royalty (3%) Mature mining sector Skilled workforce New road and bridge construction on route to Epanko Access to grid power Well developed infrastructure network 11 Not for release or distribution in the United States
Slide 12: Project Location and Infrastructure
P R O J E C T L O C A T I O N A N D I N F R A S T R U C T U R E 12 Not for release or distribution in the United States
Slide 13: Project Overview
P R O J E C T O V E R V I E W Completed Bankable Feasibility Study Simple open cut mine and conventional flotation processing plant Ore Reserve supporting 25-year mine life with contained resource of 2,194,600 tonnes CAPEX of US$77.5m Annual EBITDA of US$33.6m for 15 years with forecast prod
Slide 14: Epanko Processing Plant
E P A N K O P R O C E S S I N G P L A N T Production of Natural Flake Graphite Simple flowsheet design Double Initial Production Production 80ktpa 40ktpa +$30m EPANKO FLAKE SIZE DISTRIBUTION Microns Portion Retained Carbon Grade Name Mesh Size Double (µm) (%) (%) Production Jumbo >300 >48 20.0 97.
Slide 15: Strategic Long-Term Partnerships
S T R A T E G I C L O N G - T E R M P A R T N E R S H I P S Binding Agreements Traditional refractory market Epanko Value-added products including (Large Flake) expandable graphite High-growth battery market 15 Not for release or distribution in the United States
Slide 16: Strategic Long-Term Partnerships: Debt Financing
S T R A T E G I C L O N G - T E R M P A R T N E R S H I P S Debt Financing Specialist financier for the German and European export industry German Government Epanko loan guarantee (Large Flake) Africa’s largest investment bank 16 Not for release or distribution in the United States
Slide 17: Environmental & Social Impact Assessment
E N V I R O N M E N T A L & S O C I A L I M P A C T A S S E S S M E N T ESIA subject to highest standards – not just best practice Environmental approvals confirmed as part of BFS Relocation Action Plan (RAP) being completed to IFC principles as a condition of KfW financing Strong support se
Slide 18: About Graphite
A B O U T G R A P H I T E An industrial mineral with unique Battery Grade Graphite physical properties: Superior thermal/electrical conductivity Stable wide temperature range High melting point Lithium-Ion Excellent lubrication Resistant to chemical attack Fuel-Cell Redox-Flow 18 Not for r
Slide 19: Global Production and Demand
G L O B A L P R O D U C T I O N A N D D E M A N D China is the largest producer (~600ktpa) of natural graphite Half of China’s production is consumed by USA, Europe, Japan and Korea 19 Not for release or distribution in the United States
Slide 20: Kibaran's Graphite Sales
K I B A R A N ’ S G R A P H I T E S A L E S Europe is the largest refractory market outside China Japan and Korea is the largest battery grade graphite market 20 Not for release or distribution in the United States
Slide 21: Global Demand for Flake Graphite
G L O B A L D E M A N D F O R F L A K E G R A P H I T E Epanko annual production of 40,000 tonnes is 7% of global demand REGION North South END-USE Asia Europe Others TOTAL America America Refractories 225 46 15 30 8 324 Foundries 28 20 15 12 4 79 Batteries 57 4 5 4 1 71 Friction 10 5 3 1 1 20 Lub
Slide 22: World's Largest Gigafactories
W O R L D ’ S L A R G E S T G I G A F A C T O R I E S Gigafactories will drive future graphite demand 7GWh 35GWh “Panasonic (Japan) and LG Chem (Korea) are developing the world’s largest gigafactories for the 20GWh growing EV battery market” 22 Source: Schematic Interpretation of Benchmark Mineral I
Slide 23: Current Global Battery Demand
C U R R E N T G L O B A L B AT T E R Y D E M A N D ELECTRIC VEHICLES (‘EV’) ENERGY STORAGE SYSTEMS (‘ESS’) Number of electric cars worldwide on January 1, 2015 “Tesla’s 2016 production of its lithium- based Powerwall sold out in August 2015” Source: Outlook for EV’s & Future Potential Demand for Gra
Slide 24: Kibaran – Vertically Integrated
K I B A R A N – V E R T I C A L LY I N T E G R AT E D EPANKO GRAPHITE MINE Production of Natural Flake Graphite 40,000tpa of Graphite NPV – US$197.4m PRODUCTION OF BATTERY GRAPHITE Mechanical Shaping and Purification 5,000tpa of Spherical Graphite NPV – US$115m PRODUCTION OF LIB ANODE Coating of Sph
Slide 25: Production of Battery-Grade Graphite
P R O D U C T I O N O F B A T T E R Y - G R A D E G R A P H I T E Scoping Study Completed Superior quality confirmed by end users Initial production 15,000tpa NPV US$115m Capital Expenditure US$30m Next Step – Feasibility Study Production scale test on bulk sample commenced Discussion wi
Slide 26: The Team to Deliver
T H E T E A M T O D E L I V E R Robert Pett – Non-Executive Chairman Minerals Economist with over 30 years’ experience in developing resources and mines in Australia and Africa. Founding Chairman of Resolute Mining. Andrew Spinks – Managing Director Geologist with over 25 years’ experience. Expe
Slide 27: Our Study Team
O U R S T U D Y T E A M “All study consultants are considered leading experts with a proven history of developing projects in Tanzania” 27 Not for release or distribution in the United States
Slide 28: Key Investment Takeaways
K E Y I N V E S T M E N T TA K E A WAY S Well positioned to be a significant graphite producer Blue-chip strategic partners – ThyssenKrupp AG + Sojitz + EGT Debt finance – KfW-IPEX Bank + German Gov’t + Nedbank Access Japanese and Korean battery market Strong balance sheet – funded through t
Slide 29: Key Risks
K E Y R I S K S Financing risks and capital requirements The Company’s capital requirements will depend on a number of factors. While every care has been taken in estimating the capital cost and future operating costs for the Company’s projects, including contingency, the actual costs experienced in
Slide 30: Key Risks
K E Y R I S K S Exploration, development, mining and processing risks The Epanko Graphite Project is at the development stage, with a BFS completed in July 2015. The prospects of Kibaran should be considered in light of the risks, expenses and difficulties frequently encountered by companies at this
Slide 31: Key Risks
K E Y R I S K S Environmental and other regulatory risks Environmental laws in Tanzania are strict. Every activity from exploration through to development and mining require compliance with the regulations for environmental protections by virtue of section 81 of the Environmental Management Act, 200
Slide 32: Key Risks
K E Y R I S K S Tenement title Rights in relation to mining rights in Tanzania are governed by Tanzanian legislation. They are evidenced by the granting of licences. Each licence is for a specific term and carries with it annual expenditure and reporting commitments, as well as other conditions requ
Slide 33: Key Risks
K E Y R I S K S Export and import regulations The import and export policies of any jurisdiction in which KNL operates or sells product to may change in the future. As the revenues of KNL depend upon the process of exporting commodities, the profitability and financial position of KNL may be adverse
Slide 34: Key Risks
K E Y R I S K S Mineral Resource and Ore Reserve estimates The volume and quality of the commodities that the Company recovers may be less than the estimates previously provided to shareholders. While the Company’s Mineral Resources and Ore Reserves estimates are prepared in accordance with the JORC
Slide 35: Key Risks
K E Y R I S K S Emerging markets The Company's assets are located in Tanzania. When conducting operations on foreign assets in emerging markets such as Tanzania, the Company faces a number of additional risks that companies with operations wholly within Australia may not face. For example, the abili
Slide 36: Key Risks
K E Y R I S K S Commodity price volatility and exchange rate risk If the Company achieves success leading to mineral production, the revenue it will derive through the sale of product exposes the potential income of the Company to commodity prices and exchange rate risks. Commodity prices fluctuate
Slide 37: Kibaran Resources Limited
Kibaran Resources Limited 338 Hay Street, Subiaco WA 6008 Phone: + 61 8 6380 1003 Email: info@kibaranresources.com www.kibaranresources.com Not for release or distribution in the United States 37