Lynas Rare Earths Limited · ASX:LYC
Lynas Rare Earths — Lynas — Investor Presentation (March 2013)
30 slides from Lynas Rare Earths's investor presentation, Mar 4, 2013
Slide 1: Lynas Corporation – Rare Earths – we touch them everyday
Lynas Corporation Rare Earths – we touch them everyday For personal use only Investor Presentation 4 March 2013
Slide 2: Disclaimer
Disclaimer For personal use only This Presentation has been prepared by Lynas Corporation Limited (ABN 27 009 066 648) (Lynas or the Company). This Presentation contains summary information about Lynas and its subsidiaries (Lynas Group) and their activities current as at the date of this Presentatio
Slide 3: Key investment highlights
Key investment highlights For personal use only Investment highlights 1 Rare Earths production commenced at the LAMP 2 Expected strong near term cashflow 3 High quality, long life assets 4 Off-take arrangements through strong customer relationships 5 Favorable industry fundamentals with estimated ab
Slide 4: Company overview
Company overview For personal use only Building a fully integrated source of Rare Earths from mine to customers Primarily involved in the exploration, development, mining and processing of Rare Earth minerals ASX-listed, market capitalisation of A$1.2bn as of February 27, 2013 Owns and operate
Slide 5: Agenda
Agenda For personal use only Introduction Safety, environment and community engagement Operations: Western Australia Malaysia Sales and Marketing Financial overview 5
Slide 6: Lynas has a strong safety track record
Lynas has a strong safety track record For personal use only A safe, sustainable supply chain is a MUST for the industry Western Australia Operations Externally certified to OHSAS18001:2007 OHS Systems Management Five Lost Time Injury (“LTI”) incidents in the 5-year of construction/operational h
Slide 7: Environmental monitoring
Environmental monitoring For personal use only Lynas’ operations are safe for our workers, host communities and the environment Environmental protection measures include: Waste water treatment (full neutralisation) Gas cleaning system Dust collection system Solid waste management plan Envi
Slide 8: Lynas is committed to social development
Lynas is committed to social development For personal use only Lynas strives to create shared value through relationships with the community Malaysia Lynas has conducted a large scale public consultation effort specifically focused on issues such as safety, health, emissions and safe handling and
Slide 9: Agenda
Agenda For personal use only Introduction Safety, environment and community engagement Operations: Western Australia Malaysia Sales and Marketing Financial overview 9
Slide 10: Production process overview
Production process overview For personal use only Vertically integrated operations from mining at Mt. Weld to oxide production at the LAMP Rare Earths Solution 10
Slide 11: Mt. Weld Mine & Concentration Plant
Mt. Weld Mine & Concentration Plant For personal use only Overview of Australian assets Mt. Weld Mine Location of the Mt. Weld Project & Concentration Plant The highest grade known deposit of Rare Earths in the world Consists of the Central Lanthanide Deposit (“CLD”) and Duncan Deposit Located
Slide 12: Resources and reserves
Resources and reserves For personal use only Mt. Weld contains one of the world’s largest and highest grade Rare Earth resources CLD reserves are sufficient to imply a mine life in excess of 25 years at the Phase 2 production rate of 22,000tpa REO Greater proportion of the higher value heavy Rar
Slide 13: Central Lanthanide Deposit
Central Lanthanide Deposit For personal use only CLD is the world’s highest grade known Rare Earths orebody Recent drilling on the western side of the CLD has increased confidence levels in the resource with a large portion of the resources in the measured and indicated categories Above a REO cu
Slide 14: Agenda
Agenda For personal use only Introduction Safety, environment and community engagement Operations: Western Australia Malaysia Sales and Marketing Financial overview 14
Slide 15: Malaysia operations – Lynas Advanced Materials Plant
Malaysia operations – Lynas Advanced Materials Plant For personal use only The LAMP facility is strategically located in Malaysia Stable operating environment and a sovereign credit PERLIS Kangar THAILAND rating of A3 Alor Setar Kota Baharu LANGKAWI Gebeng is a hub into Asia with exceptional KED
Slide 16: Lynas Advanced Materials Plant – operational update
Lynas Advanced Materials Plant – operational update For personal use only First feed to kiln achieved in November 2012 First arrival of Rare Earths concentrate from Mount Weld in November 2012 Initial first feed of concentrate into LAMP rotary kilns in November 2012 Successful commissioning of
Slide 17: LAMP Phase ramping up operations
LAMP Phase 1 ramping up operations LAMP Phase 2 commissioning expected Q2 2013 For personal use only ANTICIPATED PHASE 1 ─ 11,000t REO CAPACITY Major Applications VOLUMES (tpa) Ce carbonate 2,600 Autocat, Chemical Catalysis La carbonate 1,350 FCC, NiMH batteries Ce / La carbonate 4,000 Polishing, Ni
Slide 18: Agenda
Agenda For personal use only Introduction Safety, environment and community engagement Operations: Western Australia Malaysia Sales and Marketing Financial overview 18
Slide 19: Sales and marketing – customer agreements
Sales and marketing – customer agreements For personal use only Lynas has agreements to supply Rare Earths products to credit-worthy counterparties globally Customers identified and contracts signed or under negotiation for all of Phase 1 production and a substantial portion of Phase 2 product
Slide 20: Rare Earths prices
Rare Earths prices For personal use only Mt Weld basket price history 2008-2013 Mt Weld basket price history last 12mths 250 120 100 200 80 USD/REO kg 150 USD/REO kg 60 100 40 50 20 0 0 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 China domestic China FO
Slide 21: Rare Earths market data - Disclaimer
Rare Earths market data - Disclaimer For personal use only The following slides containing Rare Earths market data have been sourced from independent analysis of end application demand, along with Lynas estimates of quantities of Rare Earths end use in various key applications. Although Lynas be
Slide 22: Demand drivers – Rare Earth uses
Demand drivers – Rare Earth uses For personal use only REO demand growth outlook 2015E Expected Global Rare Earths demand by application CAGR Sector 2012-2018 Rare Earths used Other NiMH Batteries Optical Glass 4% 10% UV Cut 3% NiMH Batteries 3.3% La, Nd 2% Magnets 10.1% NdPr, Dy Polishing 11% Autoc
Slide 23: Rare Earths market balance outlook
Rare Earths market balance outlook For personal use only Elemental market balances and demand growth rates La Ce NdPr Sm Eu Gd Tb Dy Y 12% 2012-2020F REO Demand Growth (CAGR) 10% Dy 1.5ktpa Gd 8% 1.2ktpa Sm 0.6ktpa 6% 4% NdPr 54.3ktpa La 2% 38.0ktpa Ce 36.1ktpa 0% -2% Y Tb 5.4ktpa -4% 0.3ktpa Eu 0.3
Slide 24: Sector outlooks
Sector outlooks For personal use only Demand outlook NiMH Batteries The main growth application for NiMH batteries is in Hybrid Electric Vehicles (~14% CAGR from 2012-2017 based on LMC Automotive assumptions) Other applications for NiMH batteries also include in small electrical appliances (i.e.
Slide 25: Agenda
Agenda For personal use only Introduction Safety, environment and community engagement Operations: Western Australia Malaysia Sales and Marketing Financial overview 25
Slide 26: Strong cash flows expected in the near term
Strong cash flows expected in the near term For personal use only Indicative timeline to first sales and operating cash flow Sep ‘12 Nov ‘12 Nov‘12 Q1‘13 Q2 ‘13 First Commercial shipment to First feed to Finished Customer shipments First cash TOL issued LAMP from kiln goods qualification and first f
Slide 27: Cash costs
Cash costs For personal use only Key points Estimated cash costs at steady-state 22,000 tonne per annum REO production capacity is US$14-15/kg REO Estimated cash cost split – 70% variable, 30% fixed Costs include WA and Malaysia overheads and WA royalties Cost optimisation programs exist and
Slide 28: Lynas has a strong balance sheet
Lynas has a strong balance sheet For personal use only Balance Sheet as at 31 December 2012 Assets A$m Cash 226.2 Trade Receivables 1.8 Inventory 74.4 Investment 2.6 PPE 804.0 Exploration 26.5 Other Assets 16.6 Total Assets 1,152.1 Liabilities & Equity Trade Payables & Accruals 34.1 Tax Payables 0.2
Slide 29: Conclusion
Conclusion For personal use only Highlights 1 Rare Earths production First production achieved in February 2013 commenced at the LAMP Ramp up to Phase 1 nominal capacity expected in Q2 2013 Expected strong near- >700,000 tonnes stockpiled at the CLD 2 term cash flows Mt. Weld Concentration P
Slide 30: Note – Competent Person statement
NOTE For personal use only The information in this presentation that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Brendan Shand, who is a member of The Australasian Institute of Mining and Metallurgy. Brendan Shand is an employee of Lynas and