Alkane Resources Ltd · ASX:ALK
Alkane Resources — BBY Limited Rare Earth Conference 2011
31 slides from Alkane Resources's conference presentation, Apr 12, 2011
Slide 1: ASX cover letter for BBY Rare Earth Conference presentation
R ES O U RCES L TD AB N 3 5 0 0 0 6 8 9 2 1 6 12 April 2011 Manager Announcements Company Announcements Office ASX Limited 20 Bridge Street Sydney NSW 2000 Dear Sir, PRESENTATION Attached is a copy of the Company’s presentation to the BBY Limited Rare Earth Conference in Sydney. A copy of this prese
Slide 2: Dubbo Zirconia Project
…putting the pieces together Dubbo Zirconia Project NSW Australia An advanced development and strategic supply for the zirconium, niobium i bi andd rare earths th industries i d ti BBY Limited Rare Earth Conference Sydney 12 April 2011
Slide 3: Corporate snapshot
Corporate snapshot Shareholder profile* Exchanges ASX: ALK OTCQX: ANLKY Share Price (9 April 2011) A$2.25 Shares 269m Fully Diluted Market Cap ~A$605m C h (at Cash ( t 28 FFebruary b 2010) ~A$22 2 ~A$22.2m Retail Top 20 ~60% No debt Institutions Directors & Management 3% 12 Month High / Low A$2.30/
Slide 4: DZP Location
DZP Location Central West New South Wales
Slide 5: Business Strategy
Business Strategy Multi commodity explorer and miner, focussed in the Central West of New South Wales, Australia Dubbo Zirconia Project – world class resource of zirconium, hafnium, niobium, tantalum, yttrium and rare earths Au Cu Gold production from Peak Hill mine 1996 – 2005. Au Zr Nb Cu New gold
Slide 6: Dubbo Zirconia Project
Dubbo Zirconia Project Zirconium, niobium, yttrium, rare earth elements Definitive Feasibility Study TZ Minerals International Pty Ltd Study managers: Steve Gilman and Gavin Diener Marketing: Alister MacDonald (TCMS) and Dudley Kingsnorth (IMCOA) DPP Operations: ANSTO Minerals Group Bob Ring, Doug C
Slide 7: Rare Metals - Rare Earths
Rare Metals ‐ Rare Earths Rare Metals – Rare Earths • China produces 90% of world downstream zirconium chemicals • China currently produces 95% of world REE output • China is limiting the export of raw rare Rare metals earths materials • Brazil produces 90% of world niobium Light rare earths Mids He
Slide 8: Dubbo Zirconia Project Location
Dubbo Zirconia Project Location D bb region Dubbo i pop 80,000 80 000 State power grid State gas grid Major mixed agriculture Transport hub Substantial light industry
Slide 9: DZP Geology
DZP Geology 0 200 metres J Jurassic i aged d trachyte t h t intrusive i t i
Slide 10: DZP Geology
DZP Geology Recent Grits SEDIMENTS Basalt Dykes TRACHYTE SEDIMENTS Siliceous Contact Niobium Zirconium Zone Horizontal Scale 0 100 m
Slide 11: DZP Resources
DZP Resources Measured Resource : 35.7 million tonnes grading 0 - 55 metres 1.96% Zr02, 0.04%HfO2, 0.46% Nb2O5 , 0.03% Ta2O5 , 0.14% Y2O3, 0.75% REO and 0.014% U3O8 Inferred Resource : 37.5 million tonnes at similar grades 55 - 100 metres TOTAL : 73.2 million tonnes Major world resource of zirconium
Slide 12: DZP Flow Sheet
DZP Flow Sheet ALKANE Resources LTO Recovery > seater aa Residue Storage Refining & Precipitation Filter GB ausreavian DUBBO ZIRCONIA PROJECT NEW SOUTH WALES FLOW SHEET
Slide 13: DZP Demonstration Pilot Plant
DZP Demonstration Pilot Plant
Slide 14: Zirconium Applications
+ Zirconium Applications ALKANE Resources LtTo PRD ov srrsvan ZIRCONIA LTO ~ APPLICATIONS FOR ZIRCONIUM MATERIALS Electronics a -Dielectrics Ceramics e Piezoelectrics -Ceramic colours ae Multi layer capacitors -Enamels & ~Oxygen sensors: -Opacifiers -Sonar Catalysts ; Automotive ra -Gasoline & diese
Slide 15: Zirconium Industry
Zirconium Industry Zircon Zirconium silicate ZrSiO4 Primary Zr mineral source Value 2010 1.4 million tonnes ~US$1.6 billion Æ US$2B Zi Zirconium i products d t Zirconia Zi i ZZrO O2 , Zirconium Zi i chemicals, h i l Zr Z metal t l 2010 120,000 tonnes ~US$0.7 billion Æ US$1B Source: TCMS
Slide 16: Zircon Supply Demand Price
Zircon Supply Demand Price 20% shortfall by 2020 Zircon prices have escalated by 50% during 2010 to US$1,500/t Zircon p price and supply pp y will have a major j impact p on the cost and availabilityy off zirconium chemicals, zirconia and zirconium metal. China has declared zirconium a strategic met
Slide 17: Downstream Zirconium Usage
Downstream Zirconium Usage Zircon provides the feedstock for the zirconium industry Zr products consumption 2008 ~110,000 tonnes 2012 Global Zircon consumption estimate 1,400,000tpa 18% = 250,000t zircon for zirconia and zirconium chemicals 140,000tpa Zr products Source: TZMI
Slide 18: Downstream Zirconium Industry
Downstream Zirconium Industry China supplies about 90% of the world’s downstream zirconium products Source: TZMI / TCMS
Slide 19: DZP Zircon - Zirconium Chemicals Pricing
DZP Zircon ‐ Zirconium Chemicals Pricing Source: TCMS
Slide 20: Niobium Applications
Bow Niobium Applications ALKANE Resources LTO PD sere can: ZiMCORIA tro APPLICATIONS FOR NIOBIUM MATERIALS _ Special ste Steels - HSLA* Alloys ie stenplconde - Weight reduction for fuel efficiency ~ turbine blades -Mobile electronics - Pipelines J — - Bridges . 4 da \ as / Glass — Camera lens and TV
Slide 21: Structure of Niobium Industry
Structure of Niobium Industry Metallurgical Structural steels Stainless and heat CBMM in Brazil Pyrochlore FeNb resistant steels produces about 90% Superalloys of world demand. Super conducting magnets Early 2011 a Japanese Korean consortium Columbite acquired 15% of Nb 2 O 5 Tantalite Oxides CBMM f
Slide 22: Niobium Demand
Niobium Demand Niobium 2008 (Ferroniobium units) consumption ~85,000t – 90% Brazil Estimate for 2012 ~100,000t Ferroniobium price spiralled to US$60/kg in March 07 and is currently around US$43/kg Sources: IAMGOLD / TZMI
Slide 23: REE Applications
or REE Applications ALKANE Resources LtTo LIAN ZIRCONIA LTO 17 OF ALKANE REBOURCES LO) APPLICATIONS FOR RARE EARTH MATERIALS ‘ & im : Electronics -Display phosphors al i (CRT, PDP, LCD) -Medical imaging phcechor Ceramics Catalysts PB Lasers -Capacitors Automotive catalytic converter -Fibre Optics _-
Slide 24: Rare Earth Supply - Demand
Rare Earth Supply ‐ Demand Will rare earth supply demand be in balance from 2015 with Lynas y and Molycorp producing? High g probability p y for LREE but not HREE The DZP has a 75% LREE - 25% HREE split which gives it a demand advantage Separated rare earth products Value 2010 130,000 tonnes ~US$2.0
Slide 25: REE Demand Drivers
REE Demand Drivers Growth 10 – 15% 5 - 10% 5 – 10% 4 - 8% 8 -12% 4 – 8% Source: IMCOA
Slide 26: DZP Rare Earth Pricing
DZP Rare Earth Pricing Rare Earths Prices 2010 (US$/kg REO) (Source: Metal Pages© ) DZP Q2 Average Q3 Average Q4 Average Q1 Average Spot 1 April Light Rare Earth Distribution 2010 2010 2010 2011 $121 Lanthanum Oxide 19.5% $7.13 $25.75 $53.00 $95.00 $121 Cerium Oxide 36.7% $5.58 $24.50 $50.00 $96.00
Slide 27: DZP Product Output and Revenues
DZP Product Output and Revenues Base case model of 400,000 tonnes pa and expanded 1 million tonnes pa of ore processed Potential Production and Revenues Product 400,000 tonnes per annum 1,000,000 tonnes per annum ZBS, ZOH, ZBC, ZrO2 6,000tpa US$42.0M* 15,000tpa US$105.0M* Nb -Ta concentrate 1,400tpa
Slide 28: DZP Strategic Significance
DZP Strategic Significance Majority of “downstream” zirconium products are derived from zircon, whose output is governed by ilmenite/rutile from mineral sands mining operations. China dominates downstream zirconium business at ~90% but feed is zircon. Niobium production dominated by one company, CBM
Slide 29: Development pathway
Development pathway ‐> 2009 2010 2011 2012 2013 2014 DZP Resource definition 2001 ‐ 2002 9 Flow sheet development 2002 9 Laboratory Zr – Nb 1999 – 2002 9 Pilot plant Zr – Nb 2002 9 Mine Plan & Schedulingg 2002 9 Plant Design & Engineering 2002 9 Laboratory Y & REE 2009 ‐ 9 Demonstration Pilot Plant
Slide 30: ...a perfect fit
ie ALKANE RESOURCES LTD ..@ perfect fit ALKAN RESOURCES LTD
Slide 31: Disclaimer
Disclaimer Disclaimer This presentation contains certain forward looking statements and forecasts, including possible or assumed reserves and resources, production levels and rates, costs, prices, future performance or potential growth of Alkane Resources Ltd, industry growth or other trend projecti
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