Alkane Resources Ltd · ASX:ALK
Alkane Resources — Mining & Energy Services Council of Australia (April 2014)
19 slides from Alkane Resources's conference presentation, Apr 10, 2014
Slide 1: Dubbo Zirconia Project
ALKANE RESOURCES LTD AUSTRALIAN ZIRCONIA LIMITED Dubbo Zirconia Project NSW Australia Mining & Energy Services Council of Australia 10 April 2014
Slide 2: Today's Team
Today’s Team Alkane – Australian Zirconia Limited Nic Earner Chief Operations Officer Brendan Ward Commercial Manager Industry Capability Network (ICN) NSW Ken Raymond Mining Projects Manager © 2
Slide 3: Corporate Profile
Corporate Profile • Listed on ASX since 1969, also listed on OTCQX (US) • Market cap ~$120M • ~6,300 shareholders • Multi commodity explorer, miner and developer focused on Central West of NSW, Australia • Active in region for more than 20 years • Developed Peak Hill Gold Mine in 1996, operated to 2
Slide 4: Dubbo Zirconia Project
Dubbo Zirconia Project • Very large polymetallic resource (homogenous ore body) of the metals zirconium (hafnium), niobium (tantalum), yttrium and rare earths • Important and strategic metal mix - 25% of rare earth output is in “heavy” group • Reserve supports 35 year mine life at 1Mtpa processing w
Slide 5: Process Flow Sheet
Process Flow Sheet • Simple open cut mining operation • Crushing and grinding • Sulphuric acid, roast, leach whole of ore • Solvent extraction, separation & refining © 5
Slide 6: REE Industry
REE Industry • Global market estimated at US$3-5B FORECAST REE DEMAND 2016 of ~110,000 t Other Catalysts • China produces about 90% of world 12% 15% supply and consumed about 65%, Ceramics with Japan 15% and the US 14% 6% • The REE industry is “imbalanced” with Glass 6% potential oversupply of light
Slide 7: Zirconium Industry
Zirconium Industry Zirconium Chemicals Output (2011 – 194,000t ZrO2 basis CAGR 5-10% ) Increasing prices Increasing purity • Global market US$2-3B • 2013 consumer zircon inventories running down • Market expected to move back into under supply 2015 - 2016 © Source: Iluka, TCMS, JP Morgan 7
Slide 8: Niobium Industry
Niobium Industry Main traded product is ferro-niobium 13% 29% Structural 10% Pipe Auto Stainless Other 24% 24% • 90% of Nb used in standard grade ferro-niobium for the production of high strength low alloy (HSLA) steels • Nb HSLA steels are primarily consumed in structural and piping, but the auto i
Slide 9: DZP Estimated Product Output @ 1Mtpa
DZP Estimated Product Output @ 1Mtpa 100% 5% 1,309t 90% 95% yttrium, dysprosium, 20% 4,665t 30% terbium 80% 28.5% of revenue 8% 1,967t 70% 90% neodymium, 60% 24% praseodymium 50% 21.6% of revenue 15,827t 40% 16% 67% 30% Revenue reasonably equally distributed 20% between all four product 31% outputs
Slide 10: DZP Product Applications
DZP Product Applications Multiples end uses for Alkane’s products Rare Earth Materials: • Electronics, magnets, ceramics, glass, metal alloys, phosphors, catalysts Niobium Materials: • Alloys, capacitors, glass, jewellery, coinage, superconducting magnets, special steels Zirconium Materials: •
Slide 11: DZP Pathway to Market
DZP Pathway to Market AZL MoU’s and Agreements to secure 100% of output Zirconium (Zr) • Leading chemical company to develop applications and markets in Asia for zirconia produced by DZP • European manufacturer/trading company to market DZP products in Europe and North America • Ceramic colours labo
Slide 12: DZP Funding Strategy
DZP Funding Strategy Total Project Capex of $996m Based on April 2013 DFS to +/- 17% Includes $166m contingency Includes current FEED program to achieve BFS standard @ +/- 10% Targeted funding sources: • Government Assistance Programs/ECA style funding • Commercial Bank Debt Lead Coordin
Slide 13: Front End Engineering Design
Front End Engineering Design • Scope: • Confirm DFS and progress cost & schedule estimates to ±10% • Develop construction strategy • Develop procurement strategy & produce preferred vendors list • Expected to award next week • Engineering lead – Perth • Construction & procurement lead – NSW © 13
Slide 14: Front End Engineering Design
Front End Engineering Design • Major packages include: • Road upgrade; ~ 28 km + bridges, ~$30M • Site establishment; ~$20M • Concrete; ~$50M • Structural steel; ~$25M • Steel platework; ~$50M • Acid plant, ~$100M • Powerline; ~$25M • E,I&C; $70M © 14
Slide 15: Front End Engineering Design
Front End Engineering Design • Major components include: • Acid plant • Crushers • Valves • Grinding Mill • Instrumentation • Kiln • Boilers • Filters • Scrubbers & dust collectors • Fibreglass work • Chillers • Specialty fittings • Heat Exchangers • Pumps • Water & sewage treatment • Agitators • Of
Slide 16: DZP Major Milestones
DZP Major Milestones Major Milestones 2013 2014 2015 2016 Environmental Impact Statement Project Approval Process Project Financing Program Engineering Contract Front End Engineering Design (FEED) CONSTRUCTION PRODUCTION Estimates of times are indicative only and are subject to change. Alkane reserv
Slide 17: Next Steps for Suppliers
Next Steps for Suppliers • Role of ICN NSW • Primary domestic vendor interface point before to tender • Packages posted on ICN Gateway • Collate interested vendors • Send to Engineer / Alkane for review and short-listing • FEED Engineer • Prepare packages • Send out for indicative / firm pricing (by
Slide 18: Conclusion
Conclusion • Keep in contact with ICN via Gateway http://gateway.icn.org.au • Expect first placements on Gateway in late May • Expect packages to go out to selected suppliers May to August for indicative / firm pricing (by package) • Early works / long leads in Q4 2014 • Operations supply / service
Slide 19: Thank you for coming
ALKANE RESOURCES LTD Thank you for coming 19
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