Nh3 Clean Energy Limited · ASX:NH3
Nh3 Clean Energy — Hexagon Resources — Investor Presentation (November 2019)
32 slides from Nh3 Clean Energy's investor presentation, Nov 26, 2019
Slide 1: Next-Generation Energy Materials Start Here
Corporate Presentation 26 November 2019 Next-Generation Energy Materials Start Here
Slide 2: Important Notices
Important Notices DISCLAIMER The purpose of this presentation is to provide background information to assist in obtaining a general understanding of the proposals and objectives. This presentation may contain some references to forecasts, estimates, assumptions and other forward-looking statements.
Slide 3: Building a highly profitable energy-materials business with fast-track to cash flow
Hexagon is building a highly profitable energy-materials business employing a fast-track to cash flow strategy, initially focused on graphite and rare-earth elements • Supply-chain positioning - concentration risks • Short-term cash generation is a core focus • Targeting, deep, high-growth, high-mar
Slide 4: Hexagon Overview
Hexagon Overview ASX Code HXG Shares on Issue 291.8M Options & Performance Rights 25.7M Share Price (25 Nov 2019) A$0.07 Market Capitalisation A$21M Debt nil Cash (30 Sept 2019) A$3.1M Evolving US Focus Strong Share Register • 25% Institutional holders (with Tribeca since late 2017 are in the US Nat
Slide 5: Common Downstream Demand Drivers
Common Downstream Demand Drivers Rare Earth Elements (REE) & Graphite - Clear overlap • REEs are critical, non-substitutable inputs required in countless high- tech, green-energy, transportation and defence applications Defence & Renewable Electronics Fluid-Cracking Electric • REE permanent magnets
Slide 6: Supply Chain Issues
Supply Chain Issues China controls: • 85% of global REE production • 100% of global graphite battery anode production This is a non-sustainable, concentrated market structure threatening critical supply chains A rare-earth processing plant pollutes the air and produces hazardous waste in Baotou, Inn
Slide 7: Opportunities for HXG Rare Earths
Opportunities for HXG Rare Earths Praseodymium (Pr) metal 7
Slide 8: Rare-Earth Elements
Rare-Earth Elements • REEs comprise a relatively abundant group of 17 elements, including the 15 lanthanide elements on the periodic table, plus two other related elements, scandium and yttrium • The unique magnetic, electric, optical, and chemical properties of REEs have made them an integral part
Slide 9: REE Downstream Constraints
REE Downstream Constraints UPSTREAM There is no shortage of REE upstream projects outside REE Mining/ of China, with ~800 known deposits world-wide Concentration REE separation is the supply-chain constraint. DOWNSTREAM REE China which controls 85% of REO supply creating a Separation supply-chain vu
Slide 10: REE Constraint is in the Downstream
REE Constraint is in the Downstream REE separation to produce REOs is the key technical challenge • Solvent extraction (SX) is the dominant, industry-standard commercial processing method for 95% of REE separation • China dominates downstream REE separation, producing ~85% of global REO output • Hig
Slide 11: Technology, now ready for commercialisation
technology, now ready for commercialisation Photo: G&W, 2019 11
Slide 12: Rare-Earth Separation: Innovation Metals Corp
-Earth Separation Innovation Metals Corp (IMC) ▪ Private Canadian company, founded to develop cost-effective separation processes for critical minerals (REEs, Lithium, Cobalt, Nickel) ▪ World-renowned technical research and development expertise; partners and clients include public/private companies
Slide 13: RapidSX vs Conventional Solvent Extraction
Conventional Increased Separation Kinetics Solvent Extraction Faster metals separation Performance & Efficiency Low CAPEX Considerably reduced footprint Commercial Purity Yes Yes Low OPEX REE Recovery Rates High High Significantly reduced separation times Processing Time Rapid Slow <$2/kg for LREOs
Slide 14: American Innovation Metals (AIM)
American Innovation Metals (AIM) AIM will be a jointly owned entity to commercialise downstream REE separation 100% technology Hexagon has a binding Investment Agreement to acquire 49% of ▪ Investment is US$6.0M, comprising: 49% ✓ US$2.0M to build out a Commercial Demonstration Plant (CDP) within 12
Slide 15: AIM Critical Supply Chain Position
AIM Critical Supply Chain Position UPSTREAM • REE Ores REE Mining/ • REE Mineral Concentrates Concentration • Mixed REE Chemical Concentrates DOWNSTREAM REE • Separated REE Oxides (REOs) Separation • Separated REE Chemical Compounds DOWNSTREAM REE Metal & • REE Metals Alloy Making • REE Alloys DOWNS
Slide 16: CDP Timeline
Feedstock Agreements CDP Detailed Engineering CDP Construction CDP Commissioning CDP Operation Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 16
Slide 17: AIM Business Plan
AIM Business Plan • CapEx Savings 70 to 90% • OpEx advantages in lowest quartile of separation costs across a range of feedstock types ✓ LREE separation <$2/kg* ✓ HREE separation <$12/kg* • Enhanced REE recovery and REO purity Revenue to AIM – through sharing the CapEx and OpEx savings with clients
Slide 18: US Defense Production Act, Title III
US Defense Production Act, Title III The five Presidential Determinations proclaimed domestic REE processing capabilities are essential to national defence and addressed: • HREE Separation * • LREE Separation * • REE Metals & Alloys • NdFeB Magnets • SmCo Magnets * proven, low-cost solution to both
Slide 19: Opportunities for HXG Graphite
Opportunities for HXG Graphite SEM cross- -graphite performance-enhancement additive shown in an extruded synthetic graphite electrode (comprised of 2.5% Performance+ and 97.5% synthetic graphite) Image: HXG, 2019 19
Slide 20: Graphite Transformation Technical Accomplishments
Graphite Transformation Technical Accomplishments specialty downstream products SEM cross- -graphite antioxidant conductivity-enhancement additive Image: HXG, 2019 20
Slide 21: Battery-Grade Purification
Battery-Grade Purification Produced -flake graphite concentrate via thermal purification • Purified natural-flake graphite concentrate to All specialty battery-graphite applications (anode and cathode) require a finished graphite product with a net purity of Applications: serves as the precursor for
Slide 22: Li-ion Coated Anode Graphite
Li-ion Coated Anode Graphite Manufactured Li-ion battery anode graphite materials • Purified natural-flake graphite concentrate to • Milled (sized) • Spheroidised (shaped; high yield) • Surface-treated (coated) • Produced D50 sizes ranging from 7 to 25 microns • Tested performance in Li-ion cells Ap
Slide 23: Conductivity-Enhancement Graphite
Conductivity-Enhancement Graphite Manufactured battery cathode conductivity-enhancement graphite (CEG) materials • Purified natural-flake graphite concentrate to • Milled (sized) • Produced expandable graphite (graphite intercalation) • Produced expanded graphite (thermal shock) • Milled expanded gr
Slide 24: Antioxidant Conductivity Enhancement Additive
Antioxidant Conductivity Enhancement Additive Manufactured natural-flake graphite antioxidant conductivity- enhancement additive Performance+ • High-performance purified natural-flake graphite antioxidant additive to increase electrical and thermal performance, while extending life in synthetic grap
Slide 25: Downstream Scoping Study outcomes
Downstream Scoping Study outcomes Study findings underscore potential high margins and identify the challenges Financial Highlights Geraldton (Australia) Chelan County (USA) Pre-tax NPV (10% discount) A$0.88 to A$1.20 Billion A$0.92 to A$1.24 Billion • A standalone business sourcing feedstock from P
Slide 26: Go-To-Market Strategy
HXG Updated Downstream Strategy Speed to Market & Revenues Accelerated Qualification Timelines Go-To-Market Strategy Product Diversification Addressing Multiple Markets Now Leading Technical Expertise & Commercial Partners Established Relationships with Industry & End Users Workers assembling a Tesl
Slide 27: HXG Updated Downstream Strategy
HXG Updated Downstream Strategy -to- business strategy is based on extensive input and guidance from battery-industry leaders • Driven by major end users • Not reliant on upstream development activities • Underpinned by positive downstream scoping study (May 2019) • HXG has gained an intimate knowle
Slide 28: Battery Customer Requirements
Battery Customer Requirements Performance, Source Product Familiarity Testing Data Consistency Optionality Optionality & Safety & Scalability Customers require Customers require Customers require Customers require Customers require products derived from a suite of natural, specialty graphite extensi
Slide 29: Responding to Current Market Needs
Responding to Current Market Needs Ready to address customers today - 2 year time line -to-market strategy is based on commercially available feedstocks, transformed utilising only proven commercial technologies already approved and understood by end users to sell into markets as quickly as possible
Slide 30: Made-in-USA Premium Energy Materials
Made-in-USA Premium Energy Materials Rare-Earth Elements (REEs) Graphite Battery/Energy Separation & Purification Materials & Industrial DOWNSTREAM RARE-EARTH ELEMENTS DOWNSTREAM GRAPHITE • Battery Graphite technology • Comprehensive, go-to- -in- -graphite materials • -in- business, driven by leadin
Slide 31: HXG Near-term milestones
HXG Near-term milestones RARE EARTHS 1. Exercise Option to acquire 49% of AIM 2. Secure agreements for REE concentrate feedstocks and licencing agreements (in progress) 3. Meet US Govt requests for funding proposals to gain potential funding support for US facility 4. Commence construction of the CD
Slide 32: Contact
Contact Mike Rosenstreich Managing Director [email protected] +61 (08) 6244 0349 Next-Generation Energy Materials Start Here Neodymium (Nd) metal www.hexagonresources.com 32
Hexagon Resources — Investor Presentation (November 2019) on 6ix