Aspire Mining Limited · ASX:AKM
Aspire Mining — Sydney Resources Round Up, May 2014
24 slides from Aspire Mining's conference presentation, May 14, 2014
Slide 1: Aspire Mining Limited Investor Presentation
For personal use only Aspire Mining Limited Investor Presentation Sydney Resources Round Up, May 2014 1
Slide 2: Important information
For personal use only Important information •Nature of this document: This document has been prepared by Aspire Mining Limited (“Aspire”, “AKM”, or the “Company”) and contains summary information about the Company and its subsidiaries as at the date of release of this document. The information in th
Slide 3: Important information cont.
For personal use only Important information cont. •Production Target Assumptions: The following are key assumptions used to achieve the ODP first year target of 5Mtpa of marketable coking coal. 1) In the eight months prior to commencement of first year ODP production, a 23 million BCM waste removal
Slide 4: Corporate structure
Corporate structure For personal use only Ownership (Fully Diluted) AKM Directors (ex Turbat) 10.8% SouthGobi Resources Ltd 26.73% 30.97% Noble Group Mongolian Shareholders 17.82% Others 13.67% 100% 90% 10%* 10.81% Ovoot Coking Northern Railways Capital Structure (ASX:AKM) Coal Project LLC Undiluted
Slide 5: An emerging coking coal developer well placed to benefit from Mongolia's changing infrastructure landscape
An emerging coking coal developer well placed to benefit For personal use only from Mongolia’s changing infrastructure landscape Company Focus: “To develop World Class Coking Coal Projects” • Northern location provides opportunity for Ovoot to access European and seaborne coking coal markets • Plann
Slide 6: Why the Erdenet – Mogoin Gol railway (Northern Rail Line) will proceed
Why the Erdenet – Mogoin Gol railway (Northern Rail For personal use only Line) will proceed 1. The Ovoot project will produce a quality coking coal product required in Mongolia and export markets 2. Recent progressive legislative and policy changes shows GOM support of minerals sector and infrastru
Slide 7: Mongolia – set to become a major trading corridor
Mongolia – set to become a major trading corridor For personal use only • Mongolia has agreed to establish a working group with China to oversee the construction of new road, rail and pipeline infrastructure connecting the two countries with Russia (Reuters, 28 Oct 2013). • “Landlocked Mongolia aime
Slide 8: Unlocks development potential for large scale coal projects
Unlocks development potential for large scale coal For personal use only projects Russia considering access to China and other countries via western Mongolian border of Tsagaan Tolgoi3: • Russia’s defence Minister Sergei Shoigu proposed Project Estimated Owner an extension of the Kyzyl – Kuragino Ra
Slide 9: Northern rail line could become part of major international trade route
Northern rail line could become part of major international For personal use only trade route Elegest Coal Project Development1: • Phased production stages increasing to 5mtpa production, and up to 15mtpa from 2018. • 410 km Kyzyl – Kuragino Railway to be completed by 2018: ‐ Privately owned and ope
Slide 10: Rail infrastructure key to resources development
Rail infrastructure key to resources development For personal use only • Connects the Ovoot Project and Northern Mongolia directly onto the Trans‐Mongolian Railway network for access to international markets • Apply for BOOT (Build Own Operate Transfer) rail concession • 51% ownership to be vested i
Slide 11: Potential rail financing structure
Potential rail financing structure For personal use only Equity Financing Situation Preliminary Stages: • Non‐binding Expressions of Interest 10.8% received totalling US$1,300m • Indicates broad level of interest in 10% financing railway • Definitive discussions can commence 90%* Strategic Investor/
Slide 12: Aspire in line to capitalise on government initiatives to re-attract FDI
Aspire in line to capitalise on government initiatives For personal use only to re‐attract FDI 1. The introduction of the new Investment Law in November 2013 effectively removed the requirement for Government approvals for Foreign investment to circumstances of changes in control events involving fo
Slide 13: Ovoot is key input source for Mongolia's largest industrial complex development
Ovoot is considered one of the key input sources for For personal use only Mongolia’s largest industrial complex development Sainshand Industrial Complex • Expected Completion 2015 • Intended to include coke and steel plants and other industry • Non‐binding MOU signed for the supply of Ovoot coking
Slide 14: Oxidised and low quality coking coals can be upgraded when blended with Ovoot coking coal
Oxidised and low quality coking coals can be For personal use only upgraded when blended with Ovoot coking coal Non‐coking, Thermal Coals, and Semi‐Soft Coking Coals • Coke oven blend tests conducted on 50/50 blend and 75/25 blend (oxidised coal/Ovoot) • Used alone, low coking, thermal and oxidised
Slide 15: VITROCOAL: low ash, high fluidity coking coal
VITROCOAL: low ash, high fluidity coking coal For personal use only Ovoot Coking Coal displays high fluidity and plastic properties Indicative Ovoot Washed Coking Coal Specification An ideal blend coking coal indicated by industry leading Gray‐King Index and Rank Moisture 9% Chinese classifica
Slide 16: Significant interest in Ovoot coking coal exceeds Ovoot development production
Significant interest in Ovoot coking coal exceeds For personal use only Ovoot development production Offtake Customers Potential Offtake under Non‐Binding MOU’s Chinese up to 5.6 Mtpa Russian up to 1.3 Mtpa ODP Production 5 Mtpa Excess MOU interest 1.9 Mtpa (+38%) Additional Chinese, Russian, Japane
Slide 17: Ovoot development plan
Ovoot development plan For personal use only Mine CAPEX and OPEX Estimates Initial Production up to 5 Mtpa CAPEX US$144m (incl. contingency and working capital)Note2 Commencement 2017/18 Ovoot mine economics now expected to Production growth potential up to 10MtpaNote1 result in quick mine capital p
Slide 18: JORC Resource & Reserve confirm Ovoot as second largest coking coal reserve in country
JORC Resource & Reserve confirm Ovoot as second For personal use only largest coking coal reserve in country JORC Reserve Probable Total Marketable (31 July 2013) (Mt) (Mt) (Mt) (arb 2% (arb, 9.5% moisture) moisture) Ovoot Open Pit 247 247 182 Ovoot 8 8 6 Underground Total 255 255 188 JORC Ovoot Ope
Slide 19: China fat, primary coking coal against seaborne traded HCC
China fat, primary coking coal against seaborne For personal use only traded HCC China HCC (Primary Coking Coal) China Fat Coking Coal Seaborne HCC Why the Low Prices? 400.00 • Current Seaborne 350.00 market oversupplied 300.00 • Domestic Chinese production 250.00 competing with US$/tonne seaborne i
Slide 20: Ovoot coking coal will have a long term cost advantage
Ovoot coking coal will have a long term cost advantage For personal use only Metallurgical Coal (HCC + PCI + SSCC) 40% of Seaborne metallurgical coal production is uneconomic Ovoot and Mongolian coking coal has a significant geographical advantage that requires rail development to secure Source: Asp
Slide 21: Supply response: met coal production reductions
Supply response: met coal production reductions For personal use only …Plus approximately 13mt1 supply cuts during 2014 from: ‐ James River ‐ Walter Energy ‐ Arch Coal ‐ Patriot Coal ‐ Mechel ‐ Consol Energy ‐ Drummond Total supply cuts to date ~ 53mt Met coal prices should rise as supply/demand bal
Slide 22: Ovoot and railway development pathway
Ovoot and railway development pathway For personal use only Ovoot Mine Completed Northern Railway Completed JORC 2012 Resources and Reserves ✓ Pre Feasibility Studies ✓ Pre Feasibility Studies ✓ Confirmation of Alignment to Mongolian Standards ✓ Mining Licence ✓ Initial Stakeholder Engagement ✓ MRAM
Slide 23: Key points to remember
7 key points to remember For personal use only 1. The Ovoot project is world class 2. Financing solutions have been identified 3. Ovoot coking coal product is in high demand 4. Northern Railway could become part of an international trade route 5. Government of Mongolia is supportive of development 6
Slide 24: Contact details
Contact details For personal use only Aspire Mining Limited ABN: 46 122 417 243 ASX Code: AKM Web: www.aspiremininglimited.com AUSTRALIA Level 2, Suite 20, 22 Railway Road Subiaco, Western Australia, 6008 MONGOLIA Sukhbaatar District, 1st Khoroo, Chinggis Ave‐8 Social Insurance Department Building A