Lynas Rare Earths Limited · ASX:LYC
Lynas Rare Earths — Investor Presentation (April 2004)
23 slides from Lynas Rare Earths's investor presentation, Apr 29, 2004
Slide 1: Slide 1
Slide 2: Disclaimer
DISCLAIMER The information contained in this presentation has been prepared using the information available to Lynas Corporation Limited (Lynas) at the time of preparation of the presentation. External or other factors may have impacted on the business of Lynas and the content of this presentation,
Slide 3: Introduction to Lynas, Rare Earths market, Implementation of Lynas
“Introduction to Lynas ‘Rare Earths m Implementation of Lynas
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Slide 6: Rare Earths market
Introduction to Lyn Rare Earths market __
Slide 7: What are rare earths?
WHAT ARE RARE EARTHS? Rare Earths is the collective name for 15 metallic elements known as the Lanthanide series, plus Yttnum
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Slide 9: Rare earths enrich our lives in many ways
RARE EARTHS ENRICH OUR LIVES IN MANY WAYS _ Colour & Light Miniaturisation | Glass Polishin : Powders c / Powerful ~ Cerium é | magnets - Neodymium Phosphor for | CRT & PDP screens / i Ceramic capacitors - Europium / Yttrium " ; / / - Neodymium - Terbium / Yttrium : - Lanthanum Glass Screens ~ Ceriu
Slide 10: Rare earths have many applications in the automotive industry
RARE EARTHS HAVE MANY APPLICATIONS IN THE AUTOMOTIVE INDUSTRY... Glass and Mirrors UV cut glass Car body primers olishin owder i- i p 9 powd * Cerium and anti-corrosive « Cerium ‘ coatings Vehicle ® ¥ttrium Diesel Fuel Additive Engine ° Cerium Sensors « Lanthanum ° ¥SZ Catalytic Converter e Ce/Zr Ra
Slide 11: Electronics is also a key industry for rare earths
. ELECTRONICS IS ALSO A KEY INDUSTRY FOR RARE EARTHS Integrated Circuit Speakers ¢ Ultra high purity Ce polishes silicon wafe componenes cas * Nd magnets in headphones of Ipod and MP3 Players NEC Notebook powered by integrated Fuel Cell Screen ¢ Eu, Tb phosphors ~ CRT & PDP ~ Backlight for LcD e Ce,
Slide 12: The rare earths market is global and underlying industries are growing strongly
THE RARE EARTHS MARKET (S GLOBAL AND THE UNDERLYING INDUSTRIES ARE GROWING STRONGLY Regional distribution of 2002 market Market forecast (excluding new applications) 90 | So | 86.5 Phosphors BC | USA 20% 70- | Glass 28% China Polishing Powder eu =) Catalysis os Qo ee: o oS 2 oO Ww o E NiMH Magnets O
Slide 13: Annual rare earths supply capacity static, growth in demand equals room for Mt Weld
ANNUAL RARE EARTHS SUPPLY CAPACITY STATIC, GROWTH IN DEMAND EQUALS ROOM FOR MI WELD Supply source Current capacity Expansion potential Chinese ~70 0008 TREO LIMITED ‘Light’ Rare Go % light, 5% Baotou sourced Rare Earths area by-product ofan Earths heavy Rare Earths iron ore mine that has quality and
Slide 14: Rare earths prices are recovering rapidly, and Lynas price forecasts are very conservative
RARE EARTHS PRICES ARE RECOVERING RAPIDLY, AND LYNAS PRICE FORECASTS ARE VERY CONSERVATIVE Basic Rare Earth Product Average Price on Mt Weld Distribution (1992 to 2010F) —o— FOR China +eOrees Lynas Projection Published target price by Chinese Group for 2004 iit Weld enters the market a
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Slide 16: Lynas is building a new supply model in the rare earths industry
LYNAS iS BUILDING A NEW SUPPLY MODEL IN [HE RARE EARTHS INDUSTRY, AMR FITS WITH THE RED MODEL Stable Supply and Price Research and Development Support Long Term Contracts AMR TECHNOLOGIES INC. 20% owned by Lynas major shareholder Refini Open Pit Low Cost High Grade Simple Operation Global Efficient
Slide 17: Concentration, cracking, separation
CONCE TRATION SEPARATION Flotation _ Acid Crackir _ Solvent Extraction
Slide 18: The Mt Weld resource estimate and mine plan is complete
THE MI WELD RESOURCE ESTIMATE AND MINE PLAN IS COMPLETE Central Lanthanide Deposit (4% REO cut-off) Grade (%REO) Tonnes REO Category Tonnes (Mi) Measured 12 15.7 186,000 Indicated 5.0 118 983,000 Inferred 15 . 148,000 Total : . 917,000
Slide 19: The simplicity of the concentration process reduces costs and improves recoveries
THE SIMPLICITY OF THE CONCENTRATION PROCESS REDUCES COSTS AND IMPROVED RECOVERIES UNDERPIN ECONOMICS TOWNES =~ CRUSHING FLOTATION sone CONCENTRATE GRINDING CLASSIFICATION < all Fs - ” a < PRIMSRY CRUSHING AT MINE - PRE RAIL MAGNETIC rales GRINDING SEPARATION 4 SECONDARY FLORATION c i
Slide 20: To complete the RED model Lynas is addressing cracking and separation in parallel
TO COMPLETE THE RED MODEL LYNAS IS ADDRESSING THE CRACKING AND SEPARATION STAGES IN PARALLEL Current progress in implementation of the RED model: Mine and ~ Feasibility study successfully completed Concentrator: _ Environmental, anthropological and archeological approvals received ~ Mine plan and pr
Slide 21: The valuations show robust results, with good leverage if prices increase
THE VALUATIONS SHOW ROBUST RESULTS, WITH GOOD LEVERAGE IF PRICES INCREASE BEYOND FORECAST Funding requirements and Valuation results Funding requirements Valuation results The initial capital requirement (first 2 years) for development of the RED model is A$ 100m including the capex for pre-strip, M
Slide 22: Financial profile of total rare earths company
FINANCIAL PROFILE OF TOTAL RARE EARTHS COMPANY Production Volume Light & Heavy (2008): Capital costs (all up including AMR): Exchange Rate Estimate: Discount Rate: Project NPV (10%): IRR: EBITDA 2008: Net Profit 2008: 17,500 tns USD 95min AUD 130min .73 USDIAUD 10% +$200mIn 35% +AUD 60min +AUD 25min
Slide 23: Conclusion
CONCLUSION Lynas is building a unique, world class, integrated business from mine to customer to supply a growing global market for Rare Earths Rare Earths are key matetials across a wide range of industries including electronics and automotive. In addition new applications that utilise Rare Earths
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