Vrx Silica Ltd. · ASX:VRX
Vrx Silica — Investor Presentation (August 2020)
23 slides from Vrx Silica's investor presentation, Aug 25, 2020
Slide 1: VRX Silica Investor Presentation August 2020
For personal use only VRXSILICA Supplying Global Demand INVESTOR PRESENTATION AUGUST 2020
Slide 2: VRX Silica – Investment Highlights
VRX SILICA – INVESTMENT HIGHLIGHTS For personal use only Significant market interest in product as environmental permitting nears completion 100% owner of three high value Silica Sand Projects – Muchea, Arrowsmith North and Arrowsmith Central – all located within 1 close proximity to Perth, Western
Slide 3: Corporate Summary
CORPORATE SUMMARY For personal use only CAPITAL STRUCTURE Share Price1 10 cps Ordinary Shares 445 million Options on Issue 93.4 million Market Capitalisation A$44.5 million Cash (30 June 20) A$2.6 million Debt Nil Enterprise Value A$41.3 million SHAREHOLDERS BOARD AND MANAGEMENT Australian Silica 13
Slide 4: What Is Silica Sand
WHAT IS SILICA SAND For personal use only Glassmaking and the foundry industry are the target applications for VRX’s silica sand products Silica Sand is quartz that over time, through the erosion by water and wind, has been broken down into tiny granules. Industrial sand is a term normally applied t
Slide 5: Silica Sand Has Various Applications
SILICA SAND HAS VARIOUS APPLICATIONS For personal use only Glassmaking and the foundry industry is the target application for VRX’s silica product Glassmaking and Foundry are GLASSMAKING Flat, containers, architectural, thin film VRX’s high-value target markets Automobile Parts ▪ Asian glass making
Slide 6: Silica Sand Applications Driving Demand Growth
SILICA SAND APPLICATIONS DRIVING DEMAND GROWTH For personal use only Glass and Foundry Industry growth is set to drive the demand for silica sand in the APAC Region ▪ Developing countries in the APAC region Silica Market Demand by End Use (APAC Countries) are anticipated to experience substantial Si
Slide 7: Arrowsmith (North & Central) and Muchea Projects
ARROWSMITH ( NTH & CENTRAL ) AND MUCHEA PROJECTS For personal use only Each project may be developed and operated separately and profitably ▪ 100% ownership GERALDTON ▪ Large scale, high-grade and low impurity silica sands projects ▪ BFSs completed Aug-Oct 2019 with following combined highlights: ▪
Slide 8: Silica Sand Price and Demand Dynamics
SILICA SAND PRICE AND DEMAND DYNAMICS For personal use only Silica Sand is forecast to increase in price across Asia-Pacific countries in line with rising demand and supply constraints due to depletion and environmental restrictions on dredging Historic and Forecast Silica Sand Pricing Asia Pacific
Slide 9: Demand Not Met by Existing Production
DEMAND NOT MET BY EXISTING PRODUCTION For personal use only Key countries in the Asia Pacific region have unmet demand from local production only Asia Pacific Silica Sand Market Largest Net Importers of Silica Sand in Asia Pacific Region Silica sand (millions of tonnes) Consumption Production 1 Sili
Slide 10: Indicative Project Timeline
INDICATIVE PROJECT TIMELINE For personal use only Approvals, offtakes and funding progressing, with development commencing later 2020 ▪ Bankable feasibility studies for the Muchea, Arrowsmith North and Arrowsmith Central projects completed ▪ Environmental permitting processes well advanced ▪ Grant o
Slide 11: Exceptional Project Economics
EXCEPTIONAL PROJECT ECONOMICS For personal use only All three projects have exceptional standalone economics over 25 years MUCHEA ARROWSMITH NORTH ARROWSMITH CENTRAL $338 M $242 M $148 M $32.8 M $28.3 M $25.9 M NPV Capex NPV Capex NPV Capex IRR 83% IRR 79% IRR 60% VRXSILICA Source: VRX Bankable Feas
Slide 12: Significant Comparative Advantage
SIGNIFICANT COMPARATIVE ADVANTAGE For personal use only VRX’s projects have significantly lower operating costs than domestic and international peers due to competitive logistics solutions Estimated operating costs per tonne of product Muchea Arrowsmith North Arrowsmith Central ASX Listed Peer $A/t
Slide 13: Infrastructure Ready
INFRASTRUCTURE READY For personal use only Connecting VRX’s projects to Asian Silica Sand customers MUCHEA ARROWSMITH ▪ Adjacent to Brand ▪ Established rail Highway network direct to ▪ Underutilised Geraldton Port railway adjacent to (100km) runs project through project ▪ Rail network ▪ Adjacent to
Slide 14: Silica Sands Product and Revenue Breakdown
SILICA SANDS PRODUCT AND REVENUE BREAKDOWN For personal use only Life of mine breakdown and steady state contributions to revenue Steady-state revenue contribution by product Production breakdown by product Estimated revenue per annum ($A m) (bars) Forecast product price ($US/t) (dots) Tonnes (milli
Slide 15: Robust Project Economics
ROBUST PROJECT ECONOMICS For personal use only Post-tax NPV10 of $727.8 million driven by low cost, long-life, high-margin operations Free Cash Flow Profile LOM3 Post Tax, ungeared NPV10 $727.8m $400m Sustaining Capex Post Tax, ungeared IRR 83% Development Capex Tax Paid (Geared) Payback Period 2.4
Slide 16: High Margin Operation
HIGH MARGIN OPERATION For personal use only LOM operating margin of $20/t underpins robust project economics Price and Cost Profile LOM1 Operating Cost $AUD/t A$/t Royalties and Marketing 60.0 Administration Mining 4.86 53 Mining 52 52 52 52 52 52 50 Processing Processing 6.57 50.0 Product Handling
Slide 17: Attractive Capex Sizing
ATTRACTIVE CAPEX SIZING For personal use only The three projects require low capex relative to their earnings potential Muchea Capex Arrowsmith North Capex Arrowsmith Central Capex Process Local Feed Overland Trommel, Ancil. Contin. Total Process Local Feed Trommel, Contin. Total Process Local Feed
Slide 18: Processing Flowsheet
PROCESSING FLOWSHEET For personal use only Simple processing, no chemicals and no dust, 2mtpa processing plant at each site Processing Plant Design Loader Feeder Trommel Screening Attritioning Cells Classifier ▪ Muchea, Arrowsmith North and Arrowsmith Central to each have 2 Mtpa processing capacity
Slide 19: +99.5% SiO2 with Simple Screen
+99.5% SiO2 WITH SIMPLE SCREEN For personal use only Arrowsmith North Silica Sand Project “Cream Sand” Size by Analysis Data ▪ Applying a simple Deleterious Elements by Size Fraction Simple screen upgrades to +99.5% SiO2 product 0.212mm – 1.0mm screen removes the 6% 100% majority of the impurities i
Slide 20: Environmental, Social and Governance (ESG)
ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) For personal use only VRX is delivering on its ESG responsibilities aligned to the UN’s Sustainable Development Goals CLEAN ENERGY ECONOMIC INDUSTRY SUSTAINABLE RESPONSIBLE CLIMATE REHABILITATION GROWTH INNOVATION COMMUNITIES PRODUCTION ACTION PLAN Utilisin
Slide 21: Investment Highlights
INVESTMENT HIGHLIGHTS For personal use only Well placed to capitalise Outstanding on robust market project economics outlook and demand Emerging Australian Rapid pathway to strategic silica sand financing and producer production VRXSILICA 21
Slide 22: Resources and Reserves
RESOURCES AND RESERVES For personal use only Mineral Resources Ore Reserves Project Classification Mt SiO₂ % Al₂O₃ % Fe₂O₃ % TiO₂ % LOI % Project Classification Product Recovery Mt SiO2 % Al 2 O 3 % Fe2 O3 % TiO2 % LOI % Indicated 29 99.6 0.09 0.03 0.07 0.22 F80 48% 10.2 99.9 0.02 0.008 0.03 0.1 Muc
Slide 23: Important Information Disclaimer
IMPORTANT INFORMATION For personal use only Disclaimer This document has been prepared by VRX Silica Limited. The information contained in this document is for information purposes only and has been prepared for use in conjunction with a verbal presentation and should be read in that context. The in