Arafura Rare Earths Limited · ASX:ARU
Arafura Rare Earths — Arafura Resources — Metal Events International Rare Earths Conference 2018
27 slides from Arafura Rare Earths's conference presentation, Nov 8, 2018
Slide 1: Accelerating Towards Final Investment Decision
For personal use only Arafura Resources Limited “Accelerating Towards Final Investment Decision” November 2018 Metal Events- International Rare Earths Conference
Slide 2: Important Notice - Disclaimer
Important Notice - Disclaimer 2 For personal use only This presentation has been prepared by Arafura Resources Limited (Arafura, Arafura Resources or the Company) and is of a summary form only and therefore contains general background information which may not be complete. It should be read in conju
Slide 3: Agenda
Agenda 3 For personal use only 1. Introducing Arafura 2. NdPr Market Update 3. Funding New NdPr Supply 4. Nolans Project 5. Timeline Arafura Resources Limited (ASX:ARU) November 2018
Slide 4: Introducing Arafura
Introducing Arafura 4 For personal use only ▪ Arafura Resources Limited (“Arafura”, “Company”) is an ASX NdPr Oxide Pricing US$/kg $85.0 listed company focussed on developing its 100% owned $80.0 Nolans Rare Earths Project located in the Northern Territory, $75.0 Australia. $70.0 ▪ Neodymium-Praseod
Slide 5: Investment Highlights
Investment Highlights 5 For personal use only ▪ Globally Strategic Asset – Nolans Rare Earth Project is one of the world’s Highly Leveraged largest undeveloped NdPr projects with an existing JORC Compliant to NdPr Price Resource of 56Mt at 2.6% TREO with 26.4% NdPr enrichment that could come to prov
Slide 6: Corporate Snapshot
Corporate Snapshot 6 For personal use only Capital Structure ASX Code ARU ASX Share Price (15 Oct) $0.07 Shares on Issue 629,595,910 Market Cap (15 Oct) $44.1m 12 Month Liquidity $25.0m Cash (30 Sept ‘18) $8.1m Debt Nil Enterprise Value $36.0m ECE Nolans Invest. Co 17.42% Board Position JP Morgan 20
Slide 7: NdPr Market Update
For personal use only 7 NdPr Market Update Arafura Resources Limited (ASX:ARU) November 2018
Slide 8: China Becoming a Net Importer of NdPr
China Becoming a Net Importer of NdPr 8 For personal use only ▪ China’s domestic NdPr consumption will increase by NdPr Oxide China over 30% in the next 5 years as it pursues clean 60,000 energy objectives and global leadership in EV Tonnes manufacturing. 40,000 20,000 ▪ Supply reforms, industry con
Slide 9: China's NdPr Supply – Capital Constrained?
China’s NdPr Supply – Capital Constrained ? 9 For personal use only ▪ China’s growth in production ▪ From 1980 to 2000 China’s rare earth production increased by an average 14% annually ▪ From 2005 to 2011 China’s NdPr production increased by an average of 4.5% annually ▪ 2011 to 2015, China’s NdPr
Slide 10: Funding - New NdPr Supply: The Challenges
Funding - New NdPr Supply 10 For personal use only The Challenges ▪ NdPr market relatively niche, research and data is limited, no commodity exchange ▪ Price volatility, historically not demand – supply driven ▪ China has a legacy position as the dominate producer ▪ Perceived technology and environm
Slide 11: Funding - New NdPr Supply: Funding Sources
Funding - New NdPr Supply 11 For personal use only Source Details Advantages Disadvantages Bonds and 144A Structured Loans & Debt • Tolerate risk • Requires credit rating Offerings Securities • Flexible • Opportunistic timing • Fast to execute Mineral Royalty / Funding tied to revenue • Subordinated
Slide 12: Funding New NdPr Supply: The Solutions
Funding New NdPr Supply 12 For personal use only The Solutions ▪ Alignment with offtake and strategic partners that removes some market risk ▪ Offtake contracts will need to be engineered to mange downside price risk for low cost/ efficient producers ▪ Piloting at scale to remove materials handling
Slide 13: Nolans Project
For personal use only 13 Nolans Project Arafura Resources Limited (ASX:ARU) October 2018
Slide 14: Project Configuration
Project Configuration 14 For personal use only Arafura Resources Limited (ASX:ARU) November 2018
Slide 15: Close To Key Infrastructure
Close To Key Infrastructure 15 For personal use only ▪ Stuart Highway is 10 km east ▪ Alice Springs railyard, airport and other services are 135 km south ▪ Amadeus natural gas pipeline is adjacent to project site. Water supply is 30 km south. ▪ Tailings and process wastes remain at site. ▪ Product t
Slide 16: Favourable Project Economics
Favourable Project Economics 16 For personal use only ▪ Ultra competitive operating costs US$6.23/kg TREO or US$24.38/kg NdPr oxide is the lowest amongst peers. ▪ Highly leveraged to forecast NdPr price increases with NdPr accounting for 85% of Nolans rare earth composition by value. ▪ 30+ years LOM
Slide 17: Flowsheet Piloting Nearing Completion
Flowsheet Piloting Nearing Completion 17 For personal use only Phase 1 Phase 2 Phase 3 Phase 4 Phases 5 & 6 Phase 7 Beneficiation Phosphate Extraction Bulk Pre-Leach Acid Bake Rare Earth Processing Rare Earth Separation • 5,000 kg high- • Merchant grade • 2,000 kg pre-leach • Successful use of • Pil
Slide 18: Acid Bake Pilot Complete
Acid Bake Pilot Complete 18 For personal use only Acid Bake Plant Arafura Resources Limited (ASX:ARU) November 2018
Slide 19: Acid Bake Pilot Complete
Acid Bake Pilot Complete 19 For personal use only Final Sulphated Rare Earth Material Paddle Dryer used for bake and cooling Arafura Resources Limited (ASX:ARU) November 2018
Slide 20: Definitive Feasibility Study
Definitive Feasibility Study 20 For personal use only • DFS on track for reporting in 2018 • Activities with independent expert advice from specialist consultants Process plant, Mining planning and ore Tailings storage facility design, infrastructure and lead reserve geotechnical and surface water s
Slide 21: Timeline & Targets
Timeline & Targets 21 For personal use only Arafura Resources Limited (ASX:ARU) November 2018
Slide 22: Why Arafura?
Why Arafura? 22 For personal use only ✓ Australian project of global strategic importance. ✓ 100% owned asset with 30+ year mine life. ✓ Highly leveraged to forecast NdPr price increases. ✓ Environmental approval secured. ✓ DFS results December 2018. ✓ Final investment decision 2019. Arafura Resourc
Slide 23: Appendices
For personal use only 23 Appendices Arafura Resources Limited (ASX:ARU) November 2018
Slide 24: Appendix A: Mineral Resources
Appendix A: Mineral Resources 24 For personal use only RESOURCES TONNES (m) RARE EARTHS TREO % PHOSPHATE P2O5 % NdPr Enrichment % Measured 4.9 3.2 13 26.1 Indicated 30 2.7 12 26.4 Inferred 21 2.3 10 26.5 TOTAL 56 2.6 11 26.4 1% TREO cut-off grade. Numbers may not compute exactly due to rounding. “Nd
Slide 25: Appendix B: Process Flowsheet
Appendix B: Process Flowsheet 25 For personal use only Arafura Resources Limited (ASX:ARU) November 2018
Slide 26: Appendix C: Experienced Board
Appendix C: Experienced Board 26 For personal use only IAN KOWALICK TERRY GROSE NON-EXECUTIVE CHAIRMAN NON-EXECUTIVE DIRECTOR Ian Kowalick has qualifications in science, engineering, Terry Grose has a strong commercial economics, and finance. From 1995 to 2000, he held the most background gained ove
Slide 27: Appendix D: Experienced Management
Appendix D: Experienced Management 27 For personal use only PETER SHERRINGTON RICHARD BRESCIANINI CHIEF FINANCIAL OFFICER & COMPANY GENERAL MANAGER EXPLORATION & SECRETARY DEVELOPMENT Peter commenced employment with Arafura in 2008 as Richard has over 30 years’ experience in the Commercial Manager a
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