Alara Resources Limited · ASX:AUQ
Alara Resources — Investor Presentation (March 2014)
29 slides from Alara Resources's investor presentation, Mar 4, 2014
Slide 1: Investor Roadshow March 2014
For personal use only INVESTOR ROADSHOW March 2014 Explorer to Producer
Slide 2: Presentation Preface
Presentation Preface For personal use only THE PREVIOUS INVESTOR RELATIONS ROAD SHOW AND PRESENTATION WAS UNDERTAKEN IN MAY 2013 AND WAS CONDUCTED BY H. SHANKER MADAN – THE COMPANY’S MANAGING DIRECTOR AT THE TIME THIS INVESTOR UPDATE COVERS THE PERIOD FROM JULY 2013 TO THE PRESENT WHEN ALARA HAS BEE
Slide 3: Agenda
Agenda For personal use only PRESENTATION PREFACE COMPANY FINANCIAL OVERVIEW ALARA’S STRATEGY BOARD & MANAGEMENT RESTRUCTURE PERIOD HIGHLIGHTS SAUDI ARABIA UPDATE OMAN UPDATE SUMMARY www.alararesources.com 3 © Alara Resources Limited
Slide 4: Alara Strategy
Alara Strategy For personal use only THE ALARA STRATEGY IS CLEAR: • FOCUS ON BECOMING A MINE OPERATOR • RETAIN MIDDLE EAST THEATRE FOR OPERATIONS • EMPLOY THE KHNAIGUIYAH PROJECT (KMC) AS THE FIRST STEP IN THE MINE DEVELOPMENT PROGRAM • BUILD AN ADVANCED STAGE PROJECT PIPELINE IN THE REGION TO FOLLO
Slide 5: Board & Management Team Restructure
Board & Management Team Restructure For personal use only THE ALARA RESOURCES LIMITED BOARD OF DIRECTORS AND MANAGEMENT TEAM WAS RESTRUCTURED UNDER THE NEW MANAGEMENT IN ORDER TO MOVE THE COMPANY FROM BEING A RESOURCE DEVELOPER TO A MINE OPERATOR AND THUS TO DIRECTLY SUPPORT THE COMPANY’S STRATEGY w
Slide 6: Board of Directors
Board of Directors For personal use only Ian Williams AO Chairman • 40+ years’ mining industry experience • Hamersley Iron, Rio Tinto, Century Zinc and Pasminco • Awarded Order of Australia for services to Indigenous communities • Retained from the prior Board Philip Hopkins Managing Director • 30+
Slide 7: Management Team
Management Team For personal use only Philip Hopkins Managing Director Justin Richard Country Manager – Saudi Arabia & Oman Under Recruitment Chief Financial Officer Elle Macdonald Corporate Affairs Manager Victor Ho Company Secretary / Acting CFO A.V. Sthapak Exploration Manager Leanne Cureton Tech
Slide 8: Milestones – July 2013 to Present
Milestones – July 2013 to Present For personal use only KEY PERIOD MILESTONES • New Managing Director employed, Board and Management Team restructured (see prior slides) • Part of the Board restructure is HRH Prince Abdullah – key Saudi Arabian alliance and support • New offices established in West
Slide 9: Saudi Arabia: First Step into Production
For personal use only SAUDI ARABIA First Step into Production www.alararesources.com 9 © Alara Resources Limited
Slide 10: Khnaiguiyah Project Overview
Khnaiguiyah Project Overview For personal use only KHNAIGUIYAH ZINC-COPPER PROJECT (SAUDI ARABIA) Khnaiguiyah Mining Company (KMC) is a 50:50 joint venture company between Alara and the United Arabian Mining Company (Manajem), a privately owned Saudi Arabian mining company. The Khnaiguiyah Project i
Slide 11: Khnaiguiyah Project DFS Summary
Khnaiguiyah Project DFS Summary For personal use only • 2 Mtpa processing rate – Zn & Cu concentrates produced • Project revenue: A$2,074 M • Project costs : A$1,201M • EBITDA: A$873M • Cash flow (post Capex): A$467M • Capex: US$257M • Project NPV: A$170M • IRR: 23% • Weighted Avg cost of capital 9.
Slide 12: Why Saudi Arabia - Technical
Why Saudi Arabia - Technical For personal use only • 1970’s BRGM did full review - 5300 deposits • Saudi Geological Survey • DMMR (mines department) +4,000 maps • New mining code 2004 – ease of operation • Resource Potential in the Arabian Shield i. 40 fully identified resources ii. 15 ready to prog
Slide 13: Why Saudi Arabia - Commercial
Why Saudi Arabia - Commercial • 2014 Saudi mining budget – largest to date For personal use only SAR$228 Billion (~AU$70 Billion) • Saudi government focus I. Petroleum II. Mining III. Financial services • 20% Corporate tax - nil personal tax (staff) • Royalties – nil • SIDF – 75% debt available (low
Slide 14: Khnaiguiyah Project - Commercial Summary
Khnaiguiyah Project - Commercial Summary For personal use only ZINC & COPPER PRODUCTION COSTS Zn bottom 50% of the cost curve Cu bottom 25% of the cost curve Cash costs remain to be optimised and are expected to be in the bottom 30% of the cost curve upon production www.alararesources.com 14 © Alara
Slide 15: Zinc – World Market
Zinc – World Market For personal use only ZINC PRODUCTION Zinc demand is forecast to continue to grow Zinc supply is dropping off Wood Mackenzie quote: “Zinc will be the only metal to grow in unit value relative to its position in 2010 and will peak in 2016-2019” March 2014 www.alararesources.com 15
Slide 16: Zinc - Price Forecast
Zinc - Price Forecast Zinc forecast to outperform other commodities in the long term For personal use only Commodity prices: historical and forecast – rebased to 100 300 ZINC 250 Project goes into production • Demand continues to increase 200 • Pb and Zn only metals forecast to increase in value in
Slide 17: Khnaiguiyah Project – Opportunities/Risk
Khnaiguiyah Project – Opportunities/Risk DFS REVIEW COMPLETED For personal use only •Potential Capex Reductions: $10-12M Change SAG mill to cone crushers $10M Bulk concentrate shipping $10-18M Smaller plan – Heavy Media Separation (HMS) $3M Mine camp redesign •Potential Opex Reduction: $9-12M Power
Slide 18: KMC – Heavy Media Separation
KMC – Heavy Media Separation For personal use only KMC PROJECT RECENT OPPORTUNITY • Capex <$15M • Opex ~$1.00-125/tonne feed • Course feed crush @ ~6.5mm diameter • Removes the “light” silica based rock (no metal) • Can up to double feed grade (~8% Zn & 1.2% Cu) • Double metal output or half the Cap
Slide 19: Khnaiguiyah - Stand Out Project Drivers
Khnaiguiyah - Stand Out Project Drivers For personal use only WHAT MAKES THIS PROJECT STAND OUT? • Robust Project (see prior slides) • The Country (see prior slides) • The fiscal regime (see prior slides) • Funding opportunities strong • EPC bid in place • DFS and operating upsides PROJECT NEXT STEP
Slide 20: Oman Project Pipeline
For personal use only OMAN Project Pipeline www.alararesources.com 20 © Alara Resources Limited
Slide 21: Daris/Washihi Project Overview
Daris/Washihi Project Overview For personal use only DARIS / WASHIHI PROJECT OVERVIEW • The Daris/Washihi deposits (approximately 185Km apart) together form the basis for what is currently termed the Daris/Washihi Project. Each deposit is defined under a separate JV agreement as follows: • Daris - A
Slide 22: Strong Resource Base
Strong Resource Base For personal use only DARIS / WASHIHI RESOURCES • Largest Copper Resource in Oman • Deposit open north and south and at depth • <40% known geology explored • Ore amenable to heavy Media Separation Deposit Tonnes Cu% Au g/t Washihi Notes to Table 6,840,000 0.90 0.17 (JORC Indicat
Slide 23: Daris/Washihi Project Status
Daris/Washihi Project Status For personal use only PROJECT PROGRESS OR STATUS • Early 2013 completed 0.5 Mtpa Scoping Study • Post Scoping Study • Completed metallurgical test work • Upgraded Washihi ore tonnage and grade • Queried some of the assumptions/approaches • Commenced upgraded1.0Mtpa Scopi
Slide 24: Options Analysis Outcomes
Options Analysis Outcomes For personal use only OPTIONS Option #1 Option #2 Option #3 Option #4 Option #5 Option #6 1Mtpa 1 Mtpa 0.5 Mtpa Local Toll Heap Leach Vat Leach CRITERIA Flotation Post HMS Post HMS Treatment Daris Oxide Daris Oxide Capex $134.7M $170.5M $112.4M $1.0M $5.2M $3.0M Opex $35.17
Slide 25: Summary: Way Forward
For personal use only SUMMARY Way Forward www.alararesources.com 25 © Alara Resources Limited
Slide 26: Alara in Summary
Alara in Summary For personal use only MOVING TO PRODUCTION… • Complete JV discussions on KMC Project • Move to finance & construction • Optimise DFS and bring mine on line ADVANCE PROJECT PIPELINE … • Complete upgraded Oman Scoping Study • Define Oman Project way forward • Once KMC is in constructi
Slide 27: Mission Statement & Core Values
Mission Statement & Core Values For personal use only MISSION STATEMENT Alara’s mission is to become a mid-tier mineral producer with a focus on mineral deposits and projects in the Middle East region. We will deliver maximum shareholder value through profitable growth, development of low cost opera
Slide 28: JORC Code Competent Person Statements
JORC Code Competent Person Statements For personal use only The JORC Resource and Reserve information in this presentation was prepared and first disclosed under the JORC Code 2004. It has not been updated since to comply with the JORC Code 2012 on the basis that the information has not materially c
Slide 29: Explorer to Producer
For personal use only Explorer to Producer www.alararesources.com 29 © Alara Resources Limited