Greenx Metals Limited · ASX:GRX
Greenx Metals — Prairie Mining — Investor Presentation (May 2017)
42 slides from Greenx Metals's investor presentation, May 2017
Slide 1: An Emerging Tier 1 Coking Coal Company
AN EMERGING TIER 1 COKING COAL COMPANY MAY 2017 ASX / LSE / WSE: PDZ ABN: 23 008 667 852
Slide 2: Disclaimers
DISCLAIMERS Important Information This presentation has been prepared as a summary only, and does not contain all information about Prairie Mining Limited’s (“Prairie”) assets and liabilities, financial position and performance, profits and losses, prospects, and the rights and liabilities attaching
Slide 3: Tier 1 Coking Coal Projects Accessing Highly Favourable Regional Markets
TIER 1 COKING COAL PROJECTS ACCESSING HIGHLY FAVOURABLE REGIONAL MARKETS Debiensko • Multiple Tier 1 coking coal projects Scoping Study completed Q1 2017 • Combined NPV of US$3.3Bn (pre-tax) Primary Product Premium Hard Coking Coal • Projected annual EBITDA US$630m Pre tax NPV (8%) US$1.5Bn Steady S
Slide 4: Exceptional European Supply and Demand Fundamentals
EXCEPTIONAL EUROPEAN SUPPLY AND DEMAND FUNDAMENTALS Europe consumes over 75 Mtpa of coking coal per year of which 64Mt (85%) is imported European Union has determined Coking Coal to be its 2nd most Economically Important Critical Raw Material Coking coal consumed by Europe (2016) Coking coal price s
Slide 5: Strong Cash Position with International Institutional Support
STRONG CASH POSITION WITH INTERNATIONAL INSTITUTIONAL SUPPORT Capital Structure • ASX, LSE and WSE listed • Recently completed successful A$5.5m placing to UK based Current Issued Share Capital 163 million high-quality institutions Options & Performance Rights 18 million • Cornerstone investor and n
Slide 6: Experienced Executive Team and Accomplished Board
EXPERIENCED EXECUTIVE TEAM AND ACCOMPLISHED BOARD Mr. Ben Stoikovich, Chief Executive Officer • Mr. Stoikovich is a mining engineer and professional corporate finance executive Board of Directors • He has extensive experience in the resources sector gained from a career firstly as a Mining Engineer
Slide 7: Debiensko Project
DEBIENSKO PROJECT Fully permitted mine restart project
Slide 8: Debiensko – A Tier 1 Premium Hard Coking Coal Asset
DEBIENSKO – A TIER 1 PREMIUM HARD COKING COAL ASSET Steady State Annual Hard Coking Coal Production: 2.6Mtpa Average Operating Costs: US$47/t Pre-tax NPV (8%): US$1.5Bn Initial Mine Life: 26 Years Upfront Capex (incl. Contingencies): US$504m 8
Slide 9: Fully Permitted "Mine Ready" Project
FULLY PERMITTED “MINE READY” PROJECT Environmental Consents and a Mining Concession are already in place 9
Slide 10: Fully Permitted "Mine Ready" Project
FULLY PERMITTED “MINE READY” PROJECT Existing shafts on site at Debiensko Rail yard next to Debiensko Established on-site facilities Fully fitted and ready office buildings 10
Slide 11: Globally Significant Project
GLOBALLY SIGNIFICANT PROJECT 2.6 Mtpa HCC Production from a JORC Resource of 301 Mt Saleable Tonnes HCC (Mt) 3.0 2.5 2.0 65Mt saleable 1.5 HCC produced 1.0 over 26 years Indicated 0.5 93Mt 0.0 Inferred 208Mt Yr 1 Yr 3 Yr 5 Yr 7 Yr 9 Yr 11 Yr 13 Yr 15 Yr 17 Yr 19 Yr 21 Yr 23 Yr 25 Potential Resource
Slide 12: Well Understood Geology with Proven Operating History
WELL UNDERSTOOD GEOLOGY WITH PROVEN OPERATING HISTORY Adjacent mines demonstrate a long history of successful longwall coking coal production • Debiensko is a former operating mine adjacent to two neighbouring coking coal producers in the same geological setting • Geological, geotechnical, and minin
Slide 13: High Quality Premium Hard Coking Coal
HIGH QUALITY PREMIUM HARD COKING COAL Hard Coking Coal quality comparable to that produced by the large diversified miners • Debiensko has attractive Debiensko’s Premium Hard Coking Coal vs. Select Products coal quality parameters, within all seams 100 • Two products can be Prime Hard produced: Mid-
Slide 14: Strong Cash Margins with US$47/t Cash Cost
STRONG CASH MARGINS WITH US$47/t FOR CASH COST Extremely low cash costs provide profitability throughout the cycle 160.00 15.00 (16.24) Annual EBITDA: 142.00 (8.00) 140.00 US$282m (6.14) (6.70) (4.64) 120.00 (4.44) (0.70) 110.14 US$/t Steady State 100.00 LOM Free 80.00 Cash Flow: Average annual tota
Slide 15: Lowest Delivered Cost Supplier of Hard Coking Coal into Central Europe
LOWEST DELIVERED COST SUPPLIER OF HARD COKING COAL INTO CENTRAL EUROPE Hard Coking Coal Cost Curve – Delivered to Central Europe 175 Debiensko* Australia Russia North America 150 Poland and Czech Others 125 Business Costs** (US$/t) Debiensko total delivered cost to Zdzieszowice 100 75 50 25 0 0 25 5
Slide 16: Established Infrastructure at Site Reduces Project Capex
ESTABLISHED INFRASTRUCTURE AT SITE REDUCES PROJECT CAPEX Rail A1 Highway Exit to Debiensko Mine Site Public Roads Estimated Infrastructure / Utility Cost (US$m) Estimated cost to fully reinstate operational Rail 3.6 infrastructure less than Road 0.4 US$10m Power 5.3 Locomotives passing Water 0.1 Deb
Slide 17: Very Low Capital Intensity
VERY LOW CAPITAL INTENSITY Debiensko has extremely low capital intensity compared to recently constructed hard coking coal mines Total Capex Breakdown Debiensko Capital Intensity vs. Recently Built Hard Coking Coal Mines Capital Intensity (US$/t Saleable Production Capacity) 0 100 200 300 400 500 60
Slide 18: Highly Favourable Regional Market Fundamentals
HIGHLY FAVOURABLE REGIONAL MARKET FUNDAMENTALS Europe relies on imports of over 85% of it hard coking coal needs primarily from Australia, the USA and Russia Potential Debiensko Market Share based on Scoping Study production of 2.6Mtpa Zdzieszowice 40.2Mt Imported 7.0Mt Domestic 18 Note: Zdzieszowic
Slide 19: Transport Advantage of Being a Regional Producer
TRANSPORT ADVANTAGE OF BEING A REGIONAL PRODUCER Indicative Time and Cost of Delivery of HCC to Zdzieszowice Coke Plant Debiensko 1 Day US$4.60/t Queensland (Australia) 59 Days US$37.70/t Mobile (USA) 31 Days US$33.50/t Murmansk (Russia) 17 Days US$26.20/t Hampton Roads (USA) 26 Days US$31.00/t Sour
Slide 20: Transport Advantage Leads to Higher Netback Premium Prices
TRANSPORT ADVANTAGE LEADS TO HIGHER NETBACK PREMIUM PRICES Debiensko’s Potential Netback Premium Pricing over imported Hard Debiensko 3.00 1.60 US$4.60 Coking Coal would average $15+/t Queensland 18.20 6.00 11.90 1.60 US$37.70 Origin Mobile 14.00 6.00 11.90 1.60 US$33.50 Murmansk 6.70 6.00 11.90 1.6
Slide 21: Next Steps at Debiensko
NEXT STEPS AT DEBIENSKO JORC Revised Focused Debiensko Coal Quality Maiden Scoping JORC Feasibility Infill Drill Mine Assessment Resource Study Resource Studies Program Restart Estimate Estimate Q1 2017 REST OF 2017 2018 ONWARDS 21
Slide 22: Jan Karski Mine
JAN KARSKI MINE Bankable Feasibility Study In Progress
Slide 23: Jan Karski – A Tier 1 Semi-Soft Coking Coal Asset
JAN KARSKI – A TIER 1 SEMI-SOFT COKING COAL ASSET Steady State Annual Coal Jan Karski Mine Design Render - PFS (March 2016) Production: 6.34Mtpa Average Operating Costs: US$25/t (FOR) Pre-tax NPV (8%): US$1.8Bn Initial Mine Life: 24 Years Upfront Capex (incl. Contingencies): US$632m Source: PFS Resu
Slide 24: An Advanced High Value Low Ash Semi-Soft Coking Coal Project
AN ADVANCED HIGH VALUE LOW ASH SEMI-SOFT COKING COAL PROJECT Jan Karksi mine is located in a proven coal basin in close proximity to existing infrastructure 24
Slide 25: Jan Karski Economics Unlocked by Mining the High Quality 391 Seam
JAN KARSKI ECONOMICS UNLOCKED BY MINING THE HIGH QUALITY 391 SEAM Jan Karski is adjacent to Europe's lowest cost hard coal mine, and will focus on mining the abundant, highly productive 391 seam Note: Average insitu seam quality reported at LW Bogdanka S.A concession: Seam 382 (Ash: 13.12%, CV: 26,4
Slide 26: Potential to Produce High Value Ultra-Low Ash Semi Soft Coking Coal
POTENTIAL TO PRODUCE HIGH VALUE ULTRA-LOW ASH SEMI SOFT COKING COAL Ultra Low Ash Coking coal (<3%) with high Coke Strength can be produced from Jan Karski with indications of 10% premium pricing to international SSCC benchmark pricing Premium to benchmark SSCC price • Coke oven tests demonstrate ex
Slide 27: Jan Karski Mine – Compelling Project Economics
JAN KARSKI MINE – COMPELLING PROJECT ECONOMICS Jan Karski Mine PFS Key Parameters Clean Coal Production (Steady State Average) 6.34Mtpa Initial Mine Life 24 years Operating cash cost (Steady State Average) US$24.96/t Steady State Annual EBITDA US$348.1m Capex To First Production US$631.7m Jan Karski
Slide 28: Lowest Delivered Cash Costs into Key European Markets
LOWEST DELIVERED CASH COSTS INTO KEY EUROPEAN MARKETS Jan Karski Mine is projected to have an average operating cash cost of US$24.96 per tonne FOR at steady state production; Semi-soft coking coal product from Jan Karski is anticipated to be at the bottom of the global cash cost curve for semi-soft
Slide 29: Low Capital Intensity
LOW CAPITAL INTENSITY The Jan Karski Mine is located in one of the best serviced and infrastructure advantaged coal regions globally, leading to low capital intensity; all major capital items in the PFS are based on a combination of indicative quotes from major industry suppliers or estimates from i
Slide 30: High Quality Transport Infrastructure
HIGH QUALITY TRANSPORT INFRASTRUCTURE Rail and port studies confirm ample capacity, accessibility and low costs of regional infrastructure Rail accessibility Underutilised port capacity • High quality rail lines connect the Lublin region with the rest of • Port of Gdansk located 520km from project b
Slide 31: Favourable Regional Transport Costs
FAVOURABLE REGIONAL TRANSPORT COSTS Strategic European supply location results Transport Cost from Jan Karski in low transport costs for product shipped Destination Mode Cost (US$/t) from the Jan Karski Mine Berlin IPP Rail ~$15.2/t Hansaport Polish Rail + Ship from Gdansk ~$19.2/t Czech Steelworks
Slide 32: Jan Karski Mine – China Coal Strategic Co-operation Agreement
JAN KARSKI MINE – CHINA COAL STRATEGIC CO-OPERATION AGREEMENT In November 2016, Prairie and China Coal entered into a financing and construction co-operation agreement for the Jan Karski Mine Jan Karski is Significantly De-risked Prairie teams up with World-Leading Partner Poland is a key “One Belt
Slide 33: Next Steps at Jan Karski
NEXT STEPS AT JAN KARSKI Enhanced Bulk Power Finalise Full “wrap Jan Karski Coking Coal Supply Chinese BFS Funding around” Infill Drilling Mine Quality Connection Complete Package EPC Construction Testwork Works and Offtake Contract Q1 2017 REST OF 2017 2018 ONWARDS 33
Slide 34: Tier 1 Coking Coal Projects with Unparalleled Access to Highly Favourable Regional Markets
TIER 1 COKING COAL PROJECTS WITH UNPARALLELED ACCESS TO HIGHLY FAVOURABLE REGIONAL MARKETS Two Large Scale, Long Life Coking Lowest Cash Cost Projects with High Quality Product with Coking Coal is a Critical Raw Coal Assets in Proven Coal Basins High Operating margins Excellent Market Access Materia
Slide 35: Appendix
APPENDIX
Slide 36: What Makes a World Class Tier 1 Coking Coal Project?
WHAT MAKES A WORLD CLASS TIER 1 COKING COAL PROJECT? Comparison of Emerging Coking Coal Projects Globally Sovereign High Quality Long Life 1st Quartile Compelling Significant Risk Product Asset Cash Costs Economics Scale Major Coking Coal Project Primary Owner (Ticker) Annual Infrastructure Coking C
Slide 37: Prairie Is Unlocking Value by Introducing International Best Practice
PRAIRIE IS UNLOCKING VALUE BY INTRODUCING INTERNATIONAL BEST PRACTICE Prairie is introducing modern mine design, operations management and technology to deliver substantial productivity, coal quality and production cost improvements • Lowest cash costs of production at both Tier 1 assets can be achi
Slide 38: Mid-Vol Product
MID-VOL PRODUCT Debiensko Mid-vol HCC comparable to Australian Goonyella brand and medium volatile coals produced in Poland today by JSW Debiensko Medium Volatile Matter Hard Coking Coal Comparison to International Benchmarks Debiensko* Goonyella Oaky Creek Elkview Tuhup Pittston Borynia-JSW Pniowek
Slide 39: Low-Vol Product
LOW-VOL PRODUCT Debiensko’s Low-vol HCC is similar to other internationally traded low volatile matter hard coking coals, including brands such as Peak Downs (BHP Billiton Mitsubishi Alliance – BMA) and Hail Creek (Rio Tinto) Debiensko Low Volatile Matter Hard Coking Coal Comparison to International
Slide 40: Competent Persons Statements
COMPETENT PERSONS STATEMENTS Competent Persons Statements – Debiensko Hard Coking Coal Project The information in this presentation that relates to Mining, Coal Preparation, Infrastructure, Production Targets and Cost Estimation was extracted from Prairie’s announcement dated 16 March 2017 entitled
Slide 41: Competent Persons Statements
COMPETENT PERSONS STATEMENTS Competent Persons Statements – Jan Karski Mine The information in this presentation that relates to the Exploration Results, Coal Resources, Coal Reserves, Mining, Coal Preparation, Infrastructure, Production Targets and Cost Estimation was extracted from Prairie’s annou
Slide 42: Contact Details
CONTACT DETAILS Ben Stoikovich, Chief Executive Officer +44 207 478 3900 Artur Kluczny, Group Executive – Poland +48 22 351 73 80 Sapan Ghai, Corporate Development +44 207 478 3900 | info@pdz.com.au London Office: Unit 1C, 38 Jermyn Street | London | SWY1 6DN Warsaw Office: Ul. Wspólna 35 lok. 4 | W