Slide 1: Latrobe Magnesium Presentation August 2014
For personal use only Latrobe Magnes um Presentation August 2014 David Paterson ASX: Chairman LMG
Slide 2: Presentation agenda
Latrobe Presentation Magnes um For personal use only 1. Corporate background 2. LMG opportunity 3. LMG process 4. LMG current activities 5. Timelines and milestones 6. Financial overview 2
Slide 3: Valuation Fundamentals and Performance
Latrobe 1. Corporate Background Magnes um Valuation Fundamentals and Performance For personal use only • Shares issued 927 million at 0.5 cents Market Capitalization $5m • Shares price history 2011 High 4.2 cents Low 2.2 cents 2012 High 2.4 cents Low 1.2 cents 2013 High 1.2 cents Low 0.4 cents 2014
Slide 4: People: Directors and Staff
Latrobe 1. Corporate Background Magnes um For personal use only People Directors and Staff David Paterson Executive Chairman Kevin Torpey Director & mining consultant John Lee Non executive director Philip Bruce Non executive director Jim Siemon Project director Consultants CSIRO - Melbo
Slide 5: Brief History
Latrobe 1. Corporate Background Magnes um Brief History For personal use only Listed on Australian Stock Exchange (LMG) in 2002. Dealing with Latrobe Valley fly ash for over 12 years. Tested every proven magnesium process technology. Breakthrough with Ecoengineer’s hydromet process some 3 ye
Slide 6: 90% of fly ash waste converted into products
2. LMG opportunity Latrobe Magnes um For personal use only 90% of fly ash waste converted into: % • Magnesium 10 • Cementitious Material 65 • Char 7 • Silica 8 ---- 90 ---- Up to 23 tonnes of carbon credits created per tonne of Mg. 6
Slide 7: Magnesium uses
Latrobe 2. LMG opportunity Magnes um For personal use only Magnesium uses % • Steel desulphurization 22 • Titanium sponge 11 • Alloy in aluminium can production 33 • Motor car parts for strength & 33 weight savings ----- 100 === New uses – planes and trains and consumer products (laptops, mobile pho
Slide 8: For personal use only
Latrobe 2. LMG opportunity Magnes um For personal use only 8
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Latrobe 2. LMG opportunity Magnes um For personal use only 9
Slide 10: For personal use only
Latrobe 2. LMG opportunity Magnes um For personal use only 10
Slide 11: Automotive Opportunity
Latrobe 2. LMG opportunity Magnes um For personal use only Automotive Opportunity CO2 per kms EU 2012 figure 120 g EU 2020 target 95 g -------- Emission reduction 25 g -------- Weight reduction required 250 kgs or 15% of medium sized car. USA Auto study revealed that the above weight reduction could
Slide 12: Primary Magnesium metal production
Latrobe 2. LMG opportunity Magnes um For personal use only Primary Magnesium metal production • 2000 210,300 tons • 2012 693,000 tons • 2013 792,000 tons • 2023 projected production 1,600,000 tons Average annual growth in the range between 6% to 7%. The above does not include alloys and powders. Chi
Slide 13: Magnesium Pricing China
Latrobe 2. LMG opportunity Magnes um For personal use only Magnesium Pricing China Magnesium Year-end Price $4,500 $4,000 $3,500 $3,000 US$/MT $2,500 $2,000 $1,500 $1,000 Note: US magnesium price was approx 50% above the FOB China Price for this period. 13
Slide 14: LMG business parts
3. LMG process Latrobe Magnes um For personal use only LMG business parts • Access to brown coal fly ash with sufficient MgO. • Use of proprietary Hydromet technology. • Construction expertise contracted for the thermal reduction process and its modernization. • Availability of existing infrastructu
Slide 15: Unique and proprietary process
Latrobe 3. LMG process Magnes um For personal use only Unique and proprietary process • Process is a combination of its unique patented hydromet process with the proven thermal reduction process been in operation since 1941. • Hydromet process uses standard industrial reagents to remove impurities f
Slide 16: LMG process
Latrobe 3. LMG process Magnes um For personal use only 16
Slide 17: LMG Process site and infrastructure
Latrobe 3. LMG Process Magnes um For personal use only Swop Line from Yallourn Swop Line from Hazelwood Natural Gas Pipeline Proposed Slurry Pipeline 320 Tramway Site 17
Slide 18: LMG Current Activities
Latrobe 4. LMG Current Activities Magnes um For personal use only Current Activities: • Finalizing the Latrobe Valley fly ash agreement. • Processing a bulk sample through commercial retorts in China. • Completing a detailed assessment of the cementitious material. 18
Slide 19: Timelines & milestones
Latrobe 5. Timelines & milestones Magnes um For personal use only Key Dates • Sept 2014 results of the Chinese bulk sample. • Oct 2014 receive results from the cementitious analyses. • Dec 2014 conclude MOU with major customers and suppliers • Mar 2015 complete bankable feasibility study. • Jun 2015
Slide 20: Financial overview
Latrobe 6. Financial overview Magnes um For personal use only 5,000 40,000 Financial Parameters tonnes tonnes A$/tonne A$/tonne Magnesium revenue 4,218 4,218 Net Cash operating costs (3,840) (2,635) --------- --------- Operating surplus 378 1,583 ==== ==== Capex A$45M A$285M NPV at 12% discount fact
Slide 21: Cost improvements through further process optimisation
6. Financial Overview Latrobe Magnes um Cost improvements through further process For personal use only optimisation – • Further iron reduction in BFA reduces FeSi usage possible savings up to A$350 per tonne of Mg. • Possible new magnetite product. • Use of vertical retorts may save 20% in capital
Slide 22: Disclaimer
Latrobe Disclaimer Magnes um For personal use only • This presentation may contain forward looking statements that are subject to risk factors associated with the magnesium business. • It is believed that the expectations reflected in these statements are reasonable but they may be affected by a var