Iluka Resources Limited · ASX:ILU
Iluka Resources — Technical Presentation (October 2018)
50 slides from Iluka Resources's technical presentation, Oct 31, 2018
Slide 1: Jacinth-Ambrosia Site Visit
Jacinth-Ambrosia Site Visit For personal use only 31 October 2018
Slide 2: Disclaimer – Forward Looking Statements
Disclaimer – Forward Looking Statements For personal use only This presentation has been prepared by Iluka Resources Limited (Iluka). By accessing/attending this presentation you acknowledge that you have read and understood the following statement. Forward Looking Statements This presentation conta
Slide 3: Agenda
Agenda For personal use only 7.00am – 9.45am Flight to JA Site induction 10.00am – 11.00am Morning tea Company presentation Site tour • Tails platform • Mining unit platform 11.15am – 1.15pm • Rehabilitation • Ambrosia road • Wet concentrator / control room 1.15pm – 1.45pm Lunch 2.00pm – 4.45pm Retu
Slide 4: Welcome to Jacinth-Ambrosia
Welcome to Jacinth-Ambrosia For personal use only • JA is Iluka’s primary zircon mine • Enabling Iluka to maintain Group zircon production of ~335kt over the next 4 years Jacinth-Ambrosia, South Australia 4
Slide 5: Iluka Executive and other presenters
Iluka Executive For personal use only Executive Other presenters Tom O’Leary Adele Stratton Matt Blackwell Hamish Little Managing Director CFO Head of Marketing Operations Manager Jacinth-Ambrosia Steve Wickham Melissa Roberts Dan McGrath COO GM Investor Chief Metallurgist Relations and Commercial M
Slide 6: Zircon Market Update
Zircon Market Update For personal use only Jacinth-Ambrosia, South Australia
Slide 7: Zircon Applications and Sales
Zircon Applications and Sales For personal use only Zircon is an opaque (white), hard wearing mineral. It has many unique properties, including water, chemical, heat and abrasion resistant and non-conductive. Global Zircon Demand by Application Iluka Zircon Sales by Region, H1 2018 Iluka Zircon Sale
Slide 8: Demand Fundamentals
Demand Fundamentals For personal use only • Small changes in market easing supply tightness in Q3 • Q4 Chinese demand likely to be subdued though Iluka sales not expected to be impacted ‒ difficult conditions in Chinese tile industry ‒ sanitary and refractory applications demand remains solid • Indi
Slide 9: 2018 Supply and Consumption Balanced
2018 Supply and Consumption Balanced For personal use only Global Zircon Supply and Consumption 2018 Global Zircon Production • Significant inventory depleted in recent years Other Asia Americas ‒ 2016-18 supply = production + inventory Indonesia Europe • Existing producers’ mines are mature India A
Slide 10: Iluka's Production Response
Iluka’s Production Response For personal use only Iluka’s Zircon Production and Sales kt Production 1 Sales 400 300 200 100 0 2012 2013 2014 2015 2016 2017 2018 2 2019 2 20202 20212 Iluka’s response to tight market conditions: • Guided 2018-2021 zircon production of ~335ktpa ‒ Cataby project tonnes
Slide 11: ZIC Production Potential
ZIC Production Potential For personal use only What is ZIC? Iluka’s Zircon in Concentrate Stocks, Narngulu • Produced by blending/upgrading MSP tails • Source material is remnant stockpiles and Remnant current MSP production stockpiles • Currently processing/selling material from South West, SRL, US
Slide 12: Industry Response
Industry Response For personal use only • Aside from Iluka, current industry response still limited to Kalimantan • Indonesian zircon prices now in line with market (less speculative pricing) Chinese imports from Indonesia / Indonesian exports Zircon Sand and Price US$/t CIF Concentrate Equivalent 1
Slide 13: Approach to Pricing
Approach to Pricing For personal use only • Iluka approaching pricing decisions mindful of history • Current price appropriate given: – market conditions – customers capacity to pay – optimising returns for Iluka shareholders Zircon Price History US$1,580/t from US$/t US$1,410/t from Q4 2018 for 6 Z
Slide 14: Lessons Learned After 2012 Price Spike
Lessons Learned After 2012 Price Spike For personal use only Industry myths ‘debunked’ … Myth 2012 experience No substitute for zircon - demand inelastic Alumina, feldspar and other materials were to price used to reduce zircon loading. Double charging and other new manufacturing techniques reduced
Slide 15: Where Zircon Demand Was Lost
Where Zircon Demand Was Lost For personal use only • Price spike induced industry wide demand destruction of ~250kt • Largest impact in areas with lowest technical/adoption hurdles (ceramics and foundry) • European producers had already started modernisation process well before 2011 • Impact now ful
Slide 16: Zircon Recap
Zircon Recap For personal use only Pricing • Six monthly reference pricing intervals receiving positive feedback • Q4 2018 Zircon Reference Price of US$1,580/t • Market prices converged within narrow range, reduced speculation Supply/Demand • Softness in Chinese ceramics markets • Solid demand for p
Slide 17: Jacinth-Ambrosia
Jacinth-Ambrosia For personal use only Jacinth-Ambrosia, South Australia
Slide 18: Jacinth-Ambrosia
Jacinth-Ambrosia For personal use only Jacinth-Ambrosia Ceduna and Port Thevernard Style Two contiguous deposits; ore 15-40m thick Size (L x W) Jacinth: 900m x 5km, Ambrosia: 850m x 2.2km Method Dry mining, dozer trap to mining unit Production Capacity Wet concentrator ~1,000tph; Heavy mineral conce
Slide 19: Site Safety
Site Safety For personal use only • Workplace safety an important part of everyday and everything we do • Exceptional site safety record – One lost time injury (LTI) in 10 years • Continual drives for improvements through awareness and training Jacinth Ambrosia Injury Frequency Rates 20 16.0 15 10 6
Slide 20: Jacinth-Ambrosia History
Jacinth-Ambrosia History For personal use only • Globally significant zircon deposit, discovered by Iluka in 2004 • Located within Yellabinna and Nullarbor regional reserves • First operation approved for mining in mixed use reserves within South Australia • Development capital expenditure: $390 mil
Slide 21: Scope of Operation
Scope of Operation For personal use only Deposit Low in moisture, no groundwater, strip ratio ~0.5:1 (waste:ore) Ore ~15-40 metres thick Jacinth deposit - 900 metres wide, 5km long Ambrosia deposit - 850 metres wide, 2.2km long (main pit) Mining Overburden fleet 6x 785 150 tonne dump trucks and 2500
Slide 22: Scope of Operation
Scope of Operation For personal use only Site Facilities Accommodation village for ~180 people Sealed airstrip, 5 flights per week Employees 103 FTE Iluka employees under full production and ~90 contractors Fly in – fly out basis 20% indigenous employment target for Iluka employees (26% reached in 2
Slide 23: Dozer Trap Mining and Blending
Dozer Trap Mining and Blending For personal use only Slice - 5 Red Slice - 4 White White Slice - 3 Grey mix Grey Slice - 2 Slice - 1 Floor • 150m x 100m ore blocks • Ore pushed by dozers into mining unit plant dozer trap • Mining occurs in slices to stabilise the grade to the plant 23
Slide 24: Historical Mining and Production
Historical Mining and Production For personal use only Ore Mined and Heavy Mineral (HM) Final Products Grade mt kt Ore mined HM grade 350 Zircon Rutile (HYTI 90) Ilmenite 12 12% 300 10 10% Heavy Mineral Concentrate 250 8 8% (HMC) 200 kt 6 6% 900 HMC Produced HMC Processed 150 4 4% 800 100 700 2 2% 5
Slide 25: Remaining Reserve
Remaining Reserve For personal use only Ore Reserves, as at 31 December 2017 • Ore mined at Jacinth to Q3 2018 HM Assemblage2 of 8.3mt at HM grade 7.5% Ore1 HM Grade In situ Ilmenite Zircon Rutile Mt % HM Mt % % % • Ambrosia HM grade 3.5% ‒ Average mined HM grade Ambrosia since 2010: 7.6% Proved 53.
Slide 26: Ambrosia Mine Move
Ambrosia Mine Move For personal use only • As announced, the Iluka Board has approved accelerated mine move to Ambrosia • The mine move is expected to be completed by October 2019 (previously 2022) • Capital expenditure of ~$35 million in 2019, plus deferred capital of ~$20 million cost over 2020-21
Slide 27: Jacinth Ambrosia Mine Plan
Jacinth Ambrosia Mine Plan For personal use only Mine Sequence • Expect to maintain similar production levels to current operations in early years of Ambrosia Ambrosia HG zone • Ambrosia mining supplemented with heavy ~20mt @ 5.5% HM mineral concentrate stockpile built from Jacinth • Group zircon pr
Slide 28: 2018 Production Cash Costs
2018 Production Cash Costs For personal use only Cash costs of production Raw materials and consumables J-A and Narngulu J-A and Narngulu Finished Product Gas Transport 11% 2% Power 18% Mineral Separation 26% Consumables 17% Mining & Concentrating 51% HMC Diesel Transport 35% Reagents 22% 19% • Annu
Slide 29: Jacinth-Ambrosia Outlook
Jacinth-Ambrosia Outlook For personal use only Key Parameters 2014 20151 2018 2019 Comments Average annual production2 Zircon (including ZIC) kt 212 250 ~300 ~280 Smooth production outlook reflects mine move to Ambrosia in 2019 and drawdown of heavy mineral Rutile (HYTI90)3 kt 30 31 ~35 ~40 concentr
Slide 30: Rehabilitation
Rehabilitation For personal use only Rehabilitation principles • Direct return of overburden - lower cost with minimal rehandle and preserves topsoil organisms • Pump tails back to void – lower cost and only need to profile surface • Undertake research to continually improve rehabilitation methods a
Slide 31: Rehabilitation – before and after
Rehabilitation – before and after For personal use only Cell 1 West 2013 Cell 1 West trial Cell 1 West 2014, rehab just completed Cell 1 East 2013 Cell 1 East 2014 31
Slide 32: Community Support and Engagement
Community Support and Engagement For personal use only Local communities underpin our operations • Partnership with Far West Coast Aboriginal Corporation • 2017 South Australian Premier’s Community Excellence Award for Social Inclusion • NAIDOC week events and fundraising for Royal Flying Doctor Ser
Slide 33: Zircon Projects
Zircon Projects For personal use only Jacinth-Ambrosia, South Australia Cataby, Western Australia
Slide 34: Cataby
Cataby For personal use only • Progress on track and within budget ‒ bulk earthworks package complete ‒ site foundation works commenced ‒ construction of the mining unit equipment well advanced ‒ mining contractor commenced removal of overburden ‒ reassembling of relocated concentrator underway • To
Slide 35: Fine Minerals
Fine Minerals For personal use only • Conducting pre-feasibility study on development of WIM deposits in western Victoria • Underlying challenges of deposits ‒ recovery of fine sized minerals ‒ zircon product eligibility for ceramic market ‒ monetizing rare earth co-product • Strategic rationale of
Slide 36: Balranald
Balranald For personal use only • Third field trial deferred to 2019 Project Overview • Drilling programme completed, results being compiled Large, deep, high grade rutile-rich deposit near Balranald, New South Wales ‒ sonic drilling technique (previously drilled with air core drilling) Industry sig
Slide 37: Supplementary Information
Supplementary Information For personal use only Jacinth-Ambrosia, South Australia
Slide 38: Process Overview
For personal use only Process Overview 38
Slide 39: Wet Concentrator
Wet Concentrator For personal use only • Vibrating screens to remove grit from ore slurry • Cyclones remove fine material (clay/slimes) from ore slurry ‒ slimes to thickener Red loam ‒ sand fraction to spirals • Surge bin de-couples mining unit from White strand concentrator and regulates feed to sp
Slide 40: Heavy Mineral Concentrate Transport
Heavy Mineral Concentrate Transport For personal use only • Transported by road to Port of Thevenard • Fully sealed road, including 94km mine access • 15 purpose built B-Triple 96t road trains • 40kt storage facility at Port • Port facility including overland conveyors • Charter shuttle vessels to G
Slide 41: Final Product Processing
Final Product Processing For personal use only • Heavy mineral concentrate processed at Narngulu mineral separation plant, Geraldton • Narngulu currently solely processing JA material ‒ Cataby rutile and zircon to be processed at Narngulu MSP from 2019 • Narngulu processing capacity: ‒ ~1,200 ktpa h
Slide 42: Rehabilitation Research Case Studies
Rehabilitation Research Case Studies For personal use only Cell 1 trial Pearl Bluebush (Maireana Sedifolia) • Long-term trial established 2013, still monitoring • Very common species on site (up to 1500/ha) but not recorded in rehabilitation areas, likely • Investigating whether deep-rooted tree spe
Slide 43: Process Flow - Mineral Separation
Process Flow - Mineral Separation For personal use only MAGNETIC SEPERATION Non Magnetics Magnetics ELECTROSTATIC SEPERATION RUTILE / LEUCOXENE ZIRCON TAILS ILMENITE 43
Slide 44: Narngulu MSP Plant and Plant
Narngulu MSP Plant 1 and Plant 2 For personal use only 44
Slide 45: Narngulu Zircon Finishing Plant (ZFP)
Narngulu Zircon Finishing Plant (ZFP) For personal use only 45
Slide 46: Zircon Products
Zircon Products For personal use only PREMIUM UNIVERSAL STANDARD CONCENTRATES / TAILINGS • High end applications • Developed in 2013 for • Preferred feedstock of • Majority is toll in ceramics, fused Frit production and the ZOC producers processed with final zirconia, refractory and growing needs of
Slide 47: Worked Physical Example – Ore to Heavy Mineral Concentrate
Worked Physical Example – Ore to Heavy Mineral Concentrate For personal use only Worked Example Overburden 1. Ore 1. Ore: % of total mt Stockpiled for use in rehabilitation Slimes / Clay 15% 1.5 Heavy % of total mt Oversize 5% 0.5 mineral Heavy mineral 10% 1.0 Zircon 10% 0.1 Removes Slimes + Oversiz
Slide 48: Worked Physical Example – Heavy Mineral Concentrate to Final Product
Worked Physical Example – Heavy Mineral Concentrate to Final Product For personal use only Worked Example 3. Heavy % of total mt 3. Heavy Mineral Mineral Conc. Concentrate Assemblage Zircon 8.7% 0.095 Mineral % recovery Rutile 4.4% 0.05 Separation Plant Recovery Ilmenite 56.7% 0.62 Zircon 90% Non-va
Slide 49: Notes
For personal use only Notes 49
Slide 50: For more information contact
For personal use only For more information contact: Melissa Roberts melissa.roberts@iluka.com +61 (0) 450 398 431 www.iluka.com
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