Arafura Rare Earths Limited · ASX:ARU
Arafura Rare Earths — Arafura Resources — Investor Presentation (August 2018)
45 slides from Arafura Rare Earths's investor presentation, Aug 10, 2018
Slide 1: Nolans Equity Raising
For personal use only Arafura Resources Limited Nolans Equity Raising Not for release to US wire services or distribution in the United States August 2018 Investor Presentation
Slide 2: Important Notice - Disclaimer
Not for release to US wire services or distribution in the United States of America Important Notice - Disclaimer For personal use only This presentation has been prepared by Arafura Resources Limited (Arafura, Arafura Resources or the Company) in relation to an offer of new fully paid ordinary shar
Slide 3: Important Notice - Disclaimer
Not for release to US wire services or distribution in the United States of America Important Notice - Disclaimer For personal use only The information in this presentation that relates to Exploration Results or Mineral Resources is based on information compiled by Mr Kelvin Hussey BSc (Hons). Mr Hu
Slide 4: Contents
Not for release to US wire services or distribution in the United States of America Contents For personal use only 1. Entitlement Offer 2. Company Update 3. NdPr Market Update 4. Nolans Project 5. Review of Operations 2017/18 6. Appendices
Slide 5: Entitlement Offer
Not for release to US wire services or distribution in the United States of America For personal use only 1 Entitlement Offer Arafura Resources Limited (ASX:ARU)
Slide 6: Entitlement Offer Summary
Not for release to US wire services or distribution in the United States of America Entitlement Offer Summary 1.1 For personal use only Accelerated Non-Renounceable Entitlement Offer • A 1 for 4 Accelerated Non-Renounceable Entitlement Offer at $0.08 per share to raise approximately $11.5 million. T
Slide 7: Entitlement Offer Details
Not for release to US wire services or distribution in the United States of America Entitlement Offer Details 1.2 For personal use only Funds raised to progress further development of Nolans NdPr Project ➢ (see section 4 below for further information on the Nolans NdPr Project) Institutional Offer ➢
Slide 8: Effect of Entitlement Offer
Not for release to US wire services or distribution in the United States of America Effect of Entitlement Offer 1.3 For personal use only The below assumes the maximum number of New Shares are issued under the Entitlement Offer (subject to rounding and determination of entitlements) and no options a
Slide 9: Entitlement Offer Timetable
Not for release to US wire services or distribution in the United States of America Entitlement Offer Timetable 1.4 For personal use only Event Date Announcement of Entitlement Offer 10 August 2018 Institutional Entitlement Offer opens 13 August 2018 Institutional Entitlement Offer closes 14 August
Slide 10: Entitlement Offer Application of Funds
Not for release to US wire services or distribution in the United States of America Entitlement Offer Application of Funds 1.5 For personal use only Arafura intends to use funds raised under the Entitlement Offer to progress further development of the Company’s Nolans NdPr Project in the Northern Te
Slide 11: Company Snapshot
Not for release to US wire services or distribution in the United States of America For personal use only 2 Company update Arafura Resources Limited (ASX:ARU)
Slide 12: Company Snapshot
Not for release to US wire services or distribution in the United States of America Company Snapshot 2.1 For personal use only • ASX listed company developing the Nolans Rare Earths Project in the ASX Code ARU Northern Territory, a long-life mining and chemical processing Share Price (31-Jul-18) A$0
Slide 13: NdPr Market Update
Not for release to US wire services or distribution in the United States of America For personal use only 3 NdPr Market Update Arafura Resources Limited (ASX:ARU)
Slide 14: Overview
Not for release to US wire services or distribution in the United States of America Overview 3.1 For personal use only • NdPr Oxide is a key component in the manufacture of high-strength NdFeB permanent magnets used in electric vehicles (EVs), wind turbines, portable electronic devices, and many ind
Slide 15: Emerging Demand Dynamic – China 2025 Strategy
Not for release to US wire services or distribution in the United States of America Emerging Demand Dynamic – China 2025 Strategy 3.2 For personal use only Arafura is of the opinion that: • China’s domestic NdPr consumption will increase by over 30% in the next 5 years as it pursues clean energy obj
Slide 16: Nolans Project
Not for release to US wire services or distribution in the United States of America For personal use only 4 Nolans Project Arafura Resources Limited (ASX:ARU)
Slide 17: Current Project Metrics
Not for release to US wire services or distribution in the United States of America Current Project Metrics 4.1 For personal use only The following cost estimates have been generated by Arafura based on Arafura’s historical test work and previous work by independent consultants and are considered +/
Slide 18: Mineral Resources
Not for release to US wire services or distribution in the United States of America Mineral Resources 4.2 For personal use only RESOURCES TONNES (m) RARE EARTHS TREO % PHOSPHATE P2O5 % NdPr Enrichment % Measured 4.9 3.2 13 26.1 Indicated 30 2.7 12 26.4 Inferred 21 2.3 10 26.5 TOTAL 56 2.6 11 26.4 1%
Slide 19: Project Flowsheet – Piloting & Basis of Design for DFS
Not for release to US wire services or distribution in the United States of America Project Flowsheet – Piloting & Basis of Design for DFS 4.3 For personal use only
Slide 20: Project Configuration – Basis of Design for DFS
Not for release to US wire services or distribution in the United States of America Project Configuration – Basis of Design for DFS 4.4 For personal use only Separation Plant – site option study advanced for Nolans and alternate overseas location
Slide 21: Close To Key Infrastructure
Not for release to US wire services or distribution in the United States of America Close To Key Infrastructure 4.5 For personal use only • Current layout used as basis of design for DFS • Stuart Highway – 10 km east • Alice Springs railyard, airport and other services – 135 km south • Amadeus natur
Slide 22: Review of Operations 2017/18
Not for release to US wire services or distribution in the United States of America For personal use only 5 Review of Operations 2017/18 Arafura Resources Limited (ASX:ARU)
Slide 23: Environmental Assessment Completed
Not for release to US wire services or distribution in the United States of America Environmental Assessment Completed 5.1 For personal use only NT Environment Protection Authority (EPA) Recommends Environmental Approval “The NT EPA considers that …… the Project can be managed in a manner that ….. a
Slide 24: Flowsheet Piloting
Not for release to US wire services or distribution in the United States of America Flowsheet Piloting 5.2 For personal use only Beneficiation Pilot Plant Bulk Pre-Leach Pilot Plant • Program aimed to reduce execution risk by addressing key engineering and operational considerations prior to commiss
Slide 25: Definitive Feasibility Study
Not for release to US wire services or distribution in the United States of America Definitive Feasibility Study 5.3 For personal use only • Process design criteria, PFDs and mechanical equipment list issued for use • Underway Director appointment: Mark Southey, • Layouts of process plant previously
Slide 26: Timeline & Targets
Not for release to US wire services or distribution in the United States of America Timeline & Targets 5.4 For personal use only 2018 targets include: • Advancing NdPr offtake arrangements • Reporting DFS results • Engaging with strategic partners for capital equipment procurement and project fundin
Slide 27: Appendices
Not for release to US wire services or distribution in the United States of America For personal use only 6 Appendices Appendix A: Risks Appendix B: International Offer Restrictions Appendix C: Board Appendix D: Management Appendix E: Production Targets and Mineral Resources Arafura Resources Limite
Slide 28: Appendix A: Risks
Not for release to US wire services or distribution in the United States of America Appendix A: Risks 6.1 For personal use only Risk factors You should be aware that being issued New Shares involves various risks. This Section discusses some of the key risks associated with an investment in New Shar
Slide 29: Appendix A: Risks
Not for release to US wire services or distribution in the United States of America Appendix A: Risks 6.2 For personal use only 1.1 Company specific risks (a) Exploration and production The future profitability of the Company (and its subsidiaries) (Group), and the value of the New Shares are direct
Slide 30: Appendix A: Risks
Not for release to US wire services or distribution in the United States of America Appendix A: Risks 6.3 For personal use only (c) Operating Industry operating risks include, but are not limited to, fire, explosions and environmental hazards. The occurrence of any of these risks could result in sub
Slide 31: Appendix A: Risks
Not for release to US wire services or distribution in the United States of America Appendix A: Risks 6.4 For personal use only (f) Reserves and resource estimates (continued) In addition, reserve and contingent resource estimates are necessarily imprecise and depend to some extent on interpretation
Slide 32: Appendix A: Risks
Not for release to US wire services or distribution in the United States of America Appendix A: Risks 6.5 For personal use only (i) Environmental The Group’s exploration, development and production activities are subject to legislation regarding environmental matters. The legal framework governing t
Slide 33: Appendix A: Risks
Not for release to US wire services or distribution in the United States of America Appendix A: Risks 6.6 For personal use only (j) Title (continued) In 2017 the Northern Territory Government (NTG) introduced a “Shared Land Use” policy which encourages consultation between the holder of a mineral ti
Slide 34: Appendix A: Risks
Not for release to US wire services or distribution in the United States of America Appendix A: Risks 6.7 For personal use only (l) Access to Capital Markets The Group’s business relies on access to debt and equity funding. There can be no assurance that sufficient debt or equity funding will be ava
Slide 35: Appendix A: Risks
Not for release to US wire services or distribution in the United States of America Appendix A: Risks 6.8 For personal use only (o) Financial risks The Group’s activities expose it to a variety of financial risks, including: • Market risk: The risk that the fair value of future cash flows of a finan
Slide 36: Appendix A: Risks
Not for release to US wire services or distribution in the United States of America Appendix A: Risks 6.9 For personal use only 1.2 General risks (a) Potential for dilution If shareholders do not take up their entitlements under the Entitlement Offer, then their percentage holding in the Company may
Slide 37: Appendix A: Risks
Not for release to US wire services or distribution in the United States of America Appendix A: Risks 6.10 For personal use only Further, the effect of these conditions on the Group’s ability to refinance its debt obligations, and the terms on which any such refinancing can be obtained, is uncertain
Slide 38: Appendix A: Risks
Not for release to US wire services or distribution in the United States of America Appendix A: Risks 6.11 For personal use only 1.3 Speculative investment The above list of risk factors ought not to be taken as an exhaustive list of the risks faced by the Company or by investors in the Company. The
Slide 39: Appendix B: International Offer Restrictions
Not for release to US wire services or distribution in the United States of America Appendix B: International Offer Restrictions 6.12 For personal use only This document does not constitute an offer of New Shares of the Company in any jurisdiction in which it would be unlawful. In particular, this d
Slide 40: Appendix B: International Offer Restrictions
Not for release to US wire service or distribution in the United States of America Appendix B: International Offer Restrictions 6.13 For personal use only • to any person or entity who has requested to be treated as a professional client in accordance with MiFID II; or • to any person or entity who
Slide 41: Appendix B: International Offer Restrictions
Not for release to US wire services or distribution in the United States of America Appendix B: International Offer Restrictions 6.14 For personal use only The contents of this document have not been reviewed by any Hong Kong regulatory authority. You are advised to exercise caution in relation to t
Slide 42: Appendix B: International Offer Restrictions
Not for release to US wire services or distribution in the United States of America Appendix B: International Offer Restrictions 6.15 For personal use only Switzerland The New Shares may not be publicly offered in Switzerland and will not be listed on the SIX Swiss Exchange or any other stock exchan
Slide 43: Appendix C: Board
Not for release to US wire services or distribution in the United States of America Appendix C: Board 6.16 For personal use only IAN KOWALICK NON-EXECUTIVE CHAIRMAN TERRY GROSE NON-EXECUTIVE DIRECTOR Ian Kowalick has qualifications in science, engineering, economics, and finance. From 1995 to 2000,
Slide 44: Appendix D: Management
Not for release to US wire services or distribution in the United States of America Appendix D: Management 6.17 For personal use only PETER SHERRINGTON CHIEF FINANCIAL OFFICER & COMPANY SECRETARY RICHARD BRESCIANINI He commenced employment with Arafura in 2008 as GENERAL MANAGER EXPLORATION & Commer
Slide 45: Appendix E: Mineral Resources and Production Targets
Not for release to US wire services or distribution in the United States of America Appendix E: Mineral Resources and Production Targets 6.18 For personal use only Mineral Resources The mineral resource estimate set out in this presentation was released in an ASX announcement dated 7th June 2017, an
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