Neometals Ltd · ASX:NMT
Neometals — Investor Presentation (June 2018)
72 slides from Neometals's investor presentation, Jun 18, 2018
Slide 1: Benchmark Presentation – June 2018
For personal use only All the right elements ® Benchmark Presentation – June 2018 ASX Code: NMT OTC/Nasdaq Intl: RDRUY 1
Slide 2: Disclaimer
2 Disclaimer For personal use only Summary information: This document has been prepared by Neometals Ltd (“Neometals” or “the Company”) to provide summary information about the Company and its associated entities and their activities current as at the date of this document. The information contained
Slide 3: Executive Summary
3 Executive Summary For personal use only Neometals Ltd (ASX:NMT) is a diversified technology materials development company with a clear growth plan to move downstream and increase margins from its sustainable products • WA headquarters, Market Cap ~$180m*, Cash ~$41m**, no debt, cashflow positive •
Slide 4: For personal use only
4 For personal use only + = + =
Slide 5: Long-term Strategy
Long-term Strategy For personal use only Over last 3 Financial Years we have returned ~$27.9M in 3 consecutive dividends and ~$6.2M in on-market share buyback + = 5
Slide 6: For personal use only
6 For personal use only + = + =
Slide 7: Lithium Business Unit
For personal use only Lithium Business Unit • Mt Marion Lithium Mine • Mt Edwards Lithium Project • Kalgoorlie Lithium Refinery Project • Lithium Battery Recycling Project + = 7
Slide 8: Aiming to create the highest-margin, sustainable integrated lithium business
Aiming to create the highest-margin, sustainable integrated lithium business For personal use only + = 8
Slide 9: Downstream processing margins, recycling is a sustainable cost advantage
Downstream processing margins, recycling is a sustainable cost advantage For personal use only + = 9
Slide 10: Scale up through organic growth
Scale up through organic growth For personal use only + = 10
Slide 11: Upstream processing: Mt Marion Lithium Mine
For personal use only Upstream processing Mt Marion Lithium Mine Neometals 13.8% Mt Marion Offtake Option for min 12.37% spodumene concentrates + = 11
Slide 12: We entered the lithium industry at the start of the megatrend in 2009
We entered into the Lithium Industry at the start of the megatrend in 2009 For personal use only 12
Slide 13: Mt Marion: World's largest lithium concentrator
Mt Marion World’s largest lithium concentrator For personal use only + = 13
Slide 14: Mt Marion – World Class Operation
Mt Marion – World Class Operation 450kt concentrates pa (cont ~55kt LCE) For personal use only • NMT holds 13.8% equity • 1H FY18 EBITDA A$52M (100% basis) • 1H FY18 Profit A$7.35M (NMT share) • Large Resource – 78Mt* • Open at depth/along strike • Processing 2.4Mtpa • Operating at steady state • Ex
Slide 15: Downstream processing: Kalgoorlie Lithium Refinery
For personal use only Downstream processing Kalgoorlie Lithium Refinery Neometals 100% Mt Marion Offtake Option for min 12.37% spodumene concentrates
Slide 16: Build a secure LiOH supply for Western cathode/battery/car makers
Build a secure LiOH supply for the Western cathode/battery/car makers For personal use only
Slide 17: Build a secure LiOH supply for Western cathode/battery/car makers
Build a secure LiOH supply for the Western cathode/battery/car makers For personal use only
Slide 18: Build a sustainable cost-competitive supply for Western battery supply chain
Build a sustainable cost-competitive supply for Western battery supply chain For personal use only 7 t of Spodumene Concentrate per tonne of LiOH Local Processing means: • No road transport to port • No port/shipping costs • No VAT (17%) on import into China
Slide 19: Proposed Kalgoorlie Lithium Refinery
Proposed Kalgoorlie Lithium Refinery For personal use only Utilise: • local/state/fed govt support • local workforce • sealed roads • rail infrastructure • grid power • reclaimed water • natural gas • sulfuric acid • Conventional flowsheet removes technology risk
Slide 20: MoU with City of Kalgoorlie-Boulder
20 MoU with City of Kalgoorlie-Boulder For personal use only • 2 year option to sublease 40 hectare site. • 70km by road from Mt Marion • 5km from City • Supply of reclaimed water • Assistance with connection to essential infrastructure • Assistance with procurement of utilities
Slide 21: Commercialisation Plan
Commercialisation Plan For personal use only Partner/ M+W Offtake FEED Study & Final Construct** Commission** & Feasibility Investment Study Decision* FY’s19 & 20 Mid CY21 MarQ 19 JuneQ 19 Offtake/Partner Selection Process (*) Subject to NMT Board Approval (**) Subject to FID
Slide 22: Potential growth options
Potential growth options For personal use only + = 22
Slide 23: Lithium Battery Recycling
Co For personal use only Downstream processing Lithium Battery Recycling Neometals 50% of IP (5 US Prov. Pats) Exclusive licence to commercialise + =
Slide 24: Less than 5% of Li-ion batteries are recycled
Less than 5% Li-ion batteries are recycled Co For personal use only Typically = 20% Co + = 24
Slide 25: Demo Plant Schematic and Study Results
Demo Plant Schematic Co and Study Results For personal use only Scoping Study Results (± 30% accuracy) • Operating Costs US$4.45/lb Co (US$10k/t) • Spot price US$25/lb Co (US$55k/t) • Capex US$4.5M • Pilot Plant being commissioned. • Can be constructed and commissioned in 42 weeks + = 25
Slide 26: Pilot Plant - Montreal
Pilot Plant - Montreal Co For personal use only + = 26
Slide 27: Commercialisation Plan
Commercialisation Plan Co For personal use only Running Partner/Site Selection Processes in parallel with test work and engineering programs + = 27
Slide 28: Mt Edwards Lithium Project
Mt Edwards For personal use only Lithium Project Neometals 100% + = 28
Slide 29: Mt Edwards Brownfields Exploration Project
Mt Edwards (100% NMT)* Brownfields Exploration Project For personal use only • Fertile LCT pegmatites present • 240 km2 of tenure and mineral rights • Excellent road/rail/energy infrastructure • Multiple Historic Nickel Mines containing +48,000t Ni metal (*) Subject to completion. Refer to NMT annou
Slide 30: Mt Edwards Central Area Targets
Mt Edwards Central Area Targets For personal use only + = 30
Slide 31: Mt Holland Lithium Project
Mt Holland For personal use only Lithium Project Neometals via ~36% of Hannans Ltd (ASX:HNR) + = 31
Slide 32: Mt Holland Lithium Project
Mt Holland Lithium Project (via 36% Hannans Ltd – ASX:HNR) For personal use only Location map showing Hannans 100% owned tenure. Refer to ASX:HNR Announcement “ Hannans – Mt Holland Lithium” released on 16 January 2018. Location map showing Western Australian producing mines and exploration projects
Slide 33: Investment Proposition
For personal use only 33 Investment Proposition + = 33
Slide 34: Company Highlights
34 Company Highlights For personal use only • Diversified exposure to world’s most sought advanced materials • Multi revenue streams • Focus on downstream integration to maximise margins • Strong track record – building projects, attracting partners, de-risking & returning $ • Lithium materials vali
Slide 35: Thank you
For personal use only Thank you www.neometals.com.au + = 35
Slide 36: Supporting Information
For personal use only 36 SUPPORTING INFORMATION 36
Slide 37: We have the Human and Financial Resources to execute
We have the Human and Financial Resources to execute For personal use only ASX CODE: NMT OTC:RDRUY 12 MONTH SHARE PRICE Last close (6‐June‐18) A$ 0.34 Shares on issue M 543.5 0.60 Market capitalisation A$M ~185 Net Cash (31‐Mar‐17) A$M 41.8 0.50 Receivables/Investments A$M 16.5 0.40 0.30 MAJOR SHARE
Slide 38: Corporate
For personal use only 38 Corporate + = 38
Slide 39: Tactical Plan – FY18
Tactical Plan – FY18 For personal use only • Increase offtake quality to all 6% Li2O and revenues through plant upgrade • Advance local LiOH project with vendor testwork, offtake and partner selection processes. • Fast-track evaluation of recycling process pending Mini-Max Test work. • Fast-track ev
Slide 40: Board of Directors
Board of Directors For personal use only Steven Cole Chris Reed David Reed Natalia Streltsova Doug Ritchie Chairman Managing Director Non‐Executive Director Non‐Executive Director Non‐Executive Director Steven has 35 years of Chris started in the mining David was a director and Natalia Streltsova is
Slide 41: Executive Team
Executive Team For personal use only Mike Tamlin Darren Townsend Jason Carone Paul Wallwork Eileen Hao COO CDO CFO & Co Sec GM Marketing GM China Mike has over 35 years Darren is a Mining Jason . holds a Bachelor of Paul has nearly 30 years of Eileen has 22 years experience, including over Engineer
Slide 42: Consultant Team
Consultant Team For personal use only Darren Wates Dr Bryan Smith Clay Gordon Dr Yatendra Sharma Mike Spratt General Counsel Geologist Geologist PM ‐ Lithium PM ‐ Titanium Darren has over 15 years’ Bryan has over 45 years’ Clay . obtained a Bachelor Yatendra holds a PhD in Michael is a Metallurgist
Slide 43: Operating Structure
Operating Structure For personal use only + = 43
Slide 44: Barrambie Titanium Project
For personal use only Barrambie Titanium Project 100% Neometals + = 44
Slide 45: Globally Significant Ti Resource
Globally Significant Ti Resource For personal use only Resource based on +1,000 RC & Diamond holes to 80m below surface. Drilled to +250 mbs * Mineral Resource Estimate + = (JORC2012) on page 56 45
Slide 46: Just scratched the surface
Just scratched the surface For personal use only Government Seismic Survey indicates intrusion extends ~4km below surface * Mineral Resource Estimate – High Grade Subset (JORC2012) on page 57 + = 46
Slide 47: Globally Significant V Resource
Globally Significant V Resource For personal use only • Mineral Resource Estimates (JORC2012) + = for Global and High V subset refer to pages 56 & 58 47
Slide 48: Dual Track Evaluations
Dual Track Evaluations For personal use only Conventional Process Neomet Process Barrambie Geraldton Barrambie Geraldton China – Ti China - Toll China – Ti China - Toll Slag Concentrator Hydrolysate Concentrator Ti Pigment Ti Pigment + = 48
Slide 49: Evaluating Direct Shipping Operation and Toll-concentration in China
Evaluating Direct Shipping Operation and Toll-concentration in China For personal use only + = 49
Slide 50: Evaluating Neomet Process for Chemical Production in longer term
Evaluating Neomet Process for Chemical Production in longer term For personal use only Strong EPC & OEM Strategic Alliance + = 50
Slide 51: Why Titanium Hydrolysate?
Why Titanium Hydrolysate? For personal use only + = 51
Slide 52: Successful evaluation of Neomet Process will disrupt the Ti industry
Successful evaluation of Neomet Process will disrupt the Ti industry For personal use only Increased Scale of Test work + Increasing Accuracy of Engineering studies = Lowering Opex + = 52
Slide 53: Commercialisation Plan
Commercialisation Plan For personal use only Pilot Scale Chinese Chinese DSO/Toll Beneficiation Lab Scale Pilot Scale Processing Test work Evaluation Evaluation Decision* & Results & First bulk Results Pilot Scale samples Hydromet* MarQ 17 JunQ 18 DecQ 18 MarQ 19 Offtake/Partner Selection Process (*
Slide 54: Mineral Resource Estimate
Mineral Resource Estimate Barrambie Ti‐V deposit, as at March 2018, for a block cut‐off grade of ≥10% TiO2 or ≥ 0.2% V2O5 For personal use only TiO2 V2O5 Fe2O3 Classification Zone Oxidation MTonnes (%) (%) (%) Eastern Strongly Oxidised 26.4 19.68 0.50 39.6 Weakly Oxidised 10.0 21.45 0.56 48.6 Fresh
Slide 55: Mineral Resource Estimate subset
Mineral Resource Estimate subset Barrambie Ti‐V deposit, as at April 2018, for a block cut‐off grade of 14% TiO2 For personal use only Density TiO2 V2O5 Fe2O3 Al2O3 SiO2 Classification Zone Oxidation MTonnes (t/m3) (%) (%) (%) (%) (%) Eastern Oxide 19.8 2.79 22.62 0.57 42.26 11.09 17.17 Transition 8
Slide 56: Mineral Resource Estimate subset
Mineral Resource Estimate subset Barrambie Ti‐V deposit, as at April 2018, for a block cut‐off grade of 0.5% V2O5 For personal use only Density TiO2 V2O5 Fe2O3 Al2O3 SiO2 Classification Zone Oxidation MTonnes (t/m3) (%) (%) (%) (%) (%) Eastern Oxide 11.3 2.93 24.33 0.72 46.13 9.32 13.29 Transition 5
Slide 57: Pre-feasibility Study - Financial Metrics
Pre-feasibility Study - Financial Metrics (*) For personal use only Life of Mine (LOM) 19.6 years Pre-production Capital cost [1 A$ 549 million (excluding EPCM and Contingency) Average Annual Pre-tax Net Cashflow A$ 123 million Pre-tax Internal Rate of Return 21% Pre-tax NPV (12% real discount rate)
Slide 58: Mt Marion Lithium Operation
Mt Marion For personal use only Lithium Operation Neometals 13.8% through Reed Industrial Minerals Pty Ltd + = 58
Slide 59: Strong Operating Partner
Strong Operating Partner For personal use only Australia’s largest contract minerals processor Operate mine-to-port on BOO basis No upfront capital cost to NMT Minimum production levels (~50ktpa LCE) Fixed rate mining and processing costs + = 59
Slide 60: Outstanding Offtake Agreement
Outstanding Offtake Agreement For personal use only China’s largest, most diverse lithium producer Life-of-Mine, Take-or-pay Offtake Agreement Pricing is a transparent Lithium Carbonate/Lithium Hydroxide linked formula, with floor price protection – US$960/t CIF for JunQ Letter of Credit (10
Slide 61: Mine Production
Mine Production For personal use only Mt Marion Project H2 FY17 H1 FY18 6% Tonnes exported 000 WMT 50.0 109.0 4% Tonnes exported 000 WMT 66.0 93.0 Total Tonnes exported (100%) 000 WMT 116.0 202.0 Revenue A$/WMT 782.9 808.9 C1 costs A$/WMT 570.9 474.9 Total expenses A$/WMT 658.0 548.4 EBITDA A$/WMT 1
Slide 62: Mineral Resource Estimate
Mineral Resource Estimate Mt Marion Lithium deposit, as at October 2016, for a block cut‐off grade of 0.5% Li2O For personal use only Classification Deposit Tonnes (Mt) Li2O % Fe % Indicated Area 1,2,2W 19.3 1.41 1.08 Area 4 2.0 1.11 0.99 Area 6 7.7 1.29 1.04 Indicated Total 28.9 1.35 1.06 Inferred
Slide 63: Mt Edwards Lithium Project
Mt Edwards For personal use only Lithium Project Neometals 100% + = 63
Slide 64: Mineral Resource Estimate
Mineral Resource Estimate Mt Edwards Lithium Project, as at April 2018, for a block cut‐off grade of 1% Ni For personal use only Classification Deposit Tonnes (kt) Nickel % Nickel (t) Measured 132N Armstrong 10 2.1 210 Cooke McEwen McEwen Hangingwall Zabel Measured Total 10 2.1 210 Indicated 132N 11
Slide 65: Technology Licensing
For personal use only Technology Licensing Neomet Process Neometals - 25% of sub-licencing royalties + =
Slide 66: Patented Neomet Process
Patented Neomet Process For personal use only Commodity agnostic – developed in Canada for Ni-laterites, in use commercially for treating refractory copper-gold concentrates. Neometals Laboratory in Montreal First sublicence issued in SeptQ 17 + = 66
Slide 67: Commercialising technology with leading industry partners
Commercialising technology with leading industry partners For personal use only + = 67
Slide 68: Project Development Phasing
Project Development Phasing For personal use only Laboratory scale set up (above) Pilot scale up (below) + = 68
Slide 69: Investment Proposition
For personal use only 69 Investment Proposition + = 69
Slide 70: Lithium: Cash, cashflow & growth options
Lithium : Cash, cashflow & growth options For personal use only 03 Increasing quality 02 (and revenue) of production from 01 Mt Marion + Cashflows from ~A$41.8M Cash plus ~A$16.5M in receivables and 13.8% Mt Marion + Downstream conversion to LiOH. investments + = 70
Slide 71: Titanium: the big one
Titanium : the big one For personal use only 03 02 01 Globally significant Ti-V + Potential for fast track DSO/Toll Concentrate for + Pilot Plant the Potentially Disruptive Resource Ti/V Smelting Neomet Process + = 71
Slide 72: Technology: developing a diversified portfolio
Technology : developing a diversified portfolio For personal use only 03 02 01 Successful Secure partners Secured Strong Partners for + completion of Pilot Plant for - Li Battery + to commercialise - Li Battery Recycling Neomet Process Recycling + = 72