Ferro-alloy Resources Ltd. · LSE:FAR
Ferro-alloy Resources — Investor Presentation (2022)
36 slides from Ferro-alloy Resources's investor presentation, 2022
Slide 1: Corporate Presentation Q3 2022
CORPORATE PRESENTATION Q3 2022
Slide 2: Disclaimer
Disclaimer The information contained in this confidential document (“Presentation”) has been prepared by Ferro-Alloy Resources Limited (the “Company”). It has not been fully verified and is subject to material updating, revision and further amendment. This Presentation has not been approved by an au
Slide 3: Overview
Overview Vanadium producer in Kazakhstan Kyzylorda Aktobe Corporate • Listed on London Stock Exchange and Astana International Exchange Nur-Sultan • Operations: Kazakhstan Almaty Activities • Producing vanadium, molybdenum and nickel Motorway and rail in Shieli CHINA from purchased concentrates • Fe
Slide 4: Strategic Investment
Strategic Investment Led by Sir Mick Davis, former Xstrata CEO, Vision Blue has made a multi-stage strategic investment into FAR: • $10.1m already invested (including $1.1m by co-investors) Further options: • $2.5m - option to subscribe within two months of announcement of feasibility study for Phas
Slide 5: Proposed Placing
Proposed Placing Whilst the existing operation is now nearing completion, the Ukrainian invasion and residual Covid-19 issues are causing concern as to potential disruption to supply chains and export routes. The aim is to secure sufficient funding so that the Feasibility Study can be completed as q
Slide 6: Use of Proceeds
Use of Proceeds Specific areas that will benefit from the Placing proceeds include: • Feasibility Study remains on current timetable • By-product studies to include: o Concentrate of carbon in silica as a substitute for carbon black to make tyres o Briquetted carbon-silica tails as feed for smelting
Slide 7: Interim financial report for the half year to June 2022
Interim financial report for the half year to 30 June 2022 Operating highlights • Feasibility study ongoing • Drilling of four ore-bodies (OB 1 – 4) nearing completion • Early comparison of old and new estimate over 800m strike length of OB1, based on semi-quantitative XRF analysis shows a possible
Slide 8: Interim results for half year to June 2022
Interim results for half year to 30 June 2022 • H1 revenue, while materially ahead of last year, has been impacted by the supply chain issues caused by the war in Ukraine and the after effects of Covid-19 • Uncertainty remains as to the impact these issues will have on the outcome for H2 but the Com
Slide 9: The Vanadium Market
The Vanadium Market Corporate Presentation | Q3 2022 9
Slide 10: Vanadium consumption by application 2021
Vanadium consumption by application 2021 1.7% 0.9% 0.1% 3.5% 1.8% 2.1% HSLA Steel High Alloy Steel Super Alloys/Titanium Alloys Chemicals Cast Iron 30.2% Energy Storage Stainless Steel 59.8% V Metal Source: TTP Squared Inc: Vanitec Corporate Presentation | Q3 2022 10
Slide 11: Vanadium is a battery metal
Vanadium is a battery metal An entirely new major market for vanadium Projected annual demand in 2050 for Energy Technologies as a percentage of 2018 Production Levels under 2DS Cobalt Source: presentation to Vanitec 2020 Corporate Presentation | Q3 2022 11
Slide 12: World market for vanadium is growing strongly
World market for vanadium is growing strongly Sources of New Demand 2020-2025 60,000 50,000 40,000 MTV 30,000 20,000 10,000 - 2021e 2022e 2023e 2024e 2025e Change in Steel Production Change in Specific V Consumption in Steel Energy Storage Source: Vanitec, TTP Squared Inc Corporate Presentation | Q3
Slide 13: Two operations
Two operations A: Balasausqandiq project – approximately 96% of NPV B: Existing processing operation – approximately 4% of NPV Corporate Presentation | Q3 2022 13
Slide 14: Balasausqandiq deposit
Balasausqandiq deposit (96% of FAR’s NPV) Corporate Presentation | Q3 2022 14
Slide 15: Balasausqandiq deposit: An unusual type of ore
Balasausqandiq deposit: An unusual type of ore Nearly all the vanadium produced in the world is from titano-vanadiferous magnetite, a form of iron ore. Extraction of vanadium from this material is energy intensive and expensive. The ore at Balasausqandiq is different. It is a sedimentary deposit, wi
Slide 16: Balasausqandiq – why a huge cost advantage over other producers and projects?
Balasausqandiq – why a huge cost advantage over other producers and projects? Crucially not a titano-vanadiferous magnetite deposit WHY THIS MATTERS: • No need for high temperature roasting • Significantly reduces capital costs • No need to pre-concentrate ore • Significantly reduces operating costs
Slide 17: Balasausqandiq – other advantages
Balasausqandiq – other advantages FAVOURABLE GEOLOGY • Outcrops at surface, open pit, • Very large deposit • Total resource plus exploration potential 115m tonnes (middle of estimated range) • Visible geological cut-off, low stripping ratio EXISTING INFRASTRUCTURE AND TRANSPORT LINKS • Surfaced road
Slide 18: Balasausqandiq – economics
Balasausqandiq – economics LOW COST PRODUCER Balasausqandiq forecast cash cost of production: • $1.54/lb expected (costs apportioned between products) • $(1.20) if by-product revenues are deducted from costs EXCEPTIONAL FINANCIAL STATISTICS (Phases 1 and 2 combined) • NPV of $2 billion (10% discount
Slide 19: Feasibility study highlights
Feasibility study highlights Resource Around 18,500m out of the total drilling programme of 22,850 metres completed Ore Body 1 infill drilling completed. Drilling of OB2-4 ongoing Early semi-quantitative results of infill drilling of three new sections at 200m intervals within an 800m strike length
Slide 20: Development plan
Development plan Corporate Presentation | Q3 2022 20
Slide 21: Development plan
Development plan Now Expansion of existing operation and feasibility study for Ongoing Balasausqandiq Mining and processing 1 Mtpa of ore Production 5,600 tpa Capex Phase 1 (to be funded from existing operations, debt, and exercise of $100m options by strategic partner) Expansion to 4 Mtpa of ore Ca
Slide 22: Timeline – near term
Timeline – near term Approximate timeline of existing plant and feasibility study Completed by Commissioning of new molybdenum circuit Q4 2022 Commissioning of new press filter and repulpation Q4 2022 Commissioning of nickel roast and leach circuit Q4 2022 Completion of drilling of OB 2, 3 &4 Q4 202
Slide 23: Timeline – post feasibility study
Timeline – post feasibility study Approximate timeline of development plan Completed By Existing plant at full capacity Q4 2022 Finance for Phase 1 Q3/Q4 2023 Front end engineering Phase 1 Q1 2024 Construction Phase 1 Q4 2025 Construction Phase 2 Q2 2028 Corporate Presentation | Q3 2022 23
Slide 24: Existing operation
Existing operation (4% of FAR’s NPV) Corporate Presentation | Q3 2022 24
Slide 25: Existing process plant - today
Existing process plant - today • Recovers vanadium, molybdenum and nickel from recycled raw-materials • All the valuable components are recovered and sold – no significant residues are left on site • Based on expanded pilot/test plant for the Balasausqandiq project Corporate Presentation | Q3 2022 2
Slide 26: Existing Production
Existing Production The existing process plant production of V2O5: Corporate Presentation | Q3 2022 26
Slide 27: Existing process plant
Existing process plant Advantages: • Useful cash flow – targeting $10m free cash flow per year • Balasausqandiq is not a green-field site • An experienced management team o Technical experience o Four PhD’s within technical team o Enables informed input to design of Balasausqandiq project o Capabili
Slide 28: Products and revenue – existing operation
Products and revenue – existing operation Projected 2023 Projected monthly sales Jan-June 2022 (average per revenue 2023 at current (average per month) prices and discounts month) Tonnes $m (% of total) Tonnes Tonnes treated 196 275 - 325 Production: Vanadium pentoxide 29 55 - 62 $1.0m - $1.15m (50%
Slide 29: Existing operation - update
Existing operation - update The expansion of the process plant is now nearing completion and, with the new nickel operation due to start up later this year, is capable of generating significant funds The final steps in the expansion due to be completed in the final quarter 2022 are: • New molybdenum
Slide 30: Appendix
Appendix Corporate Presentation | Q3 2022 30
Slide 31: Share capital
Share capital Major shareholders Shareholder Current shares (m) After conversion of VBR loan notes* (m) Vision Blue Resources* 38.3 (10.1%) 71.8 (17.5%) Andrey Kuznetsov 68.5 (18.1%) 68.5 (16.6%) Nicholas Bridgen 49.7 (13.2%) 49.7 (12.1%) Other shareholders 221.2 221.2 Total 377.7 411.2 *Vision Blue
Slide 32: Kazakhstan
Kazakhstan An attractive operating environment • An upper-middle income country (World Bank) • 25th (of 191) in ease of doing business (World Bank 2020) • 10% income tax, 20% profits tax • No general requirement for government free-carry or local ownership • Subsoil use law updated in 2018 based on
Slide 33: By-products
By-products Valuable by-products produced as part of the single processing route Carbon-silica Concentrated to make a 40% carbon concentrate, can be used in the Projected revenue Product per tonne of ore ($/t) manufacture of rubber, principally tyres. Carbon-silica mix can also be briquetted to make
Slide 34: Board
Board Experienced team with proven capability Sir Mick Davis Chairman A highly successful mining executive accredited with building Xstrata plc into one of the largest mining companies in the world prior to its acquisition by Glencore plc. Before listing Xstrata on the LSE as CEO he was CFO of Billi
Slide 35: Straightforward process
Straightforward process Process flowsheet tested in 15,000 tpa pilot plant Thickening Autoclave Crushing & De-Carbonisation and Filtration Leaching Absorption Desorption Grinding Circuit Ammonia Precipitation, Ferro Vanadium Metavanadate Crystallisation Dissociation Vanadium Pentoxide (75-75% & Filt
Slide 36: Balasausqandiq
Balasausqandiq Resources and potential JORC resource based on OB1 plus exploration potential in OB2 – OB5 Category Tonnes V2O5 V2O5 Orebody (JORC 2012) (Mt) (%) (tonnes) OB1 Indicated Primary1 21.4 0.67 143,380 OB1 Inferred Oxide2 1.3 0.89 11,570 OB1 Inferred Primary1 1.6 0.67 10,720 Total 24.3 0.68