Agrimin Limited · ASX:AMN
Agrimin — Investor Presentation (June 2018)
36 slides from Agrimin's investor presentation, Jun 6, 2018
Slide 1: Investor Presentation June 2018
For personal use only Investor Presentation June 2018
Slide 2: Important Notices and Disclaimers
Important Notices and Disclaimers Nature of Document For personal use only This presentation has been prepared as a summary only, and does not contain all information about Agrimin Limited’s (“Agrimin” or “the Company”) assets and liabilities, financial position and performance, profits and losses,
Slide 3: Agrimin Highlights
Agrimin Highlights For personal use only ➢ Major structural changes to BOTH supply and demand = opportunity for the establishment of a significant new seaborne supplier of SOP ➢ Pre-Feasibility Study demonstrated the potential for the Mackay SOP Project to become the largest and lowest cost seaborne
Slide 4: Corporate Overview
Corporate Overview Capital Structure1 Share Price Chart For personal use only ASX Code AMN Positive Share Price A$0.90 Pre-Feasibility $1.20 Study Shares 157.1M Native Title Agreement Share Rights 8.0M Positive Signed $1.00 Scoping Market Capitalisation A$141.4M Study Cash A$6.4M $0.80 Maiden SOP Mi
Slide 5: Mackay SOP Project, Western Australia
For personal use only Mackay SOP Project Western Australia
Slide 6: Project Overview
Project Overview Project Location & Proposed Infrastructure Corridor For personal use only ➢ Project is situated on the world’s largest undeveloped SOP bearing salt lake and is 100% owned by Agrimin ➢ Located 785km south of Wyndham Port in Western Australia ➢ Pre-Feasibility Study completed in May 2
Slide 7: Highly Attractive Project Economics
Highly Attractive Project Economics Pre-Feasibility Study1 indicates the Mackay SOP Project is a Pre-Feasibility Study Material Assumptions and Outcomes For personal use only ➢ technically and financially robust development proposition Parameter Value Initial Operating Life 20 years Annual SOP Produ
Slide 8: Operating Costs
Operating Costs Operating Cost Estimates (±25%) For personal use only ➢ Agrimin’s AISC of US$256/t will be in the bottom quartile of the global cost curve Parameter US$/t Labour 42.78 All-In Sustaining Cost Breakdown Electricity 47.22 Maintenance & Consumables 10.03 Road Haulage Royalties & & Shiplo
Slide 9: Capital Costs
Capital Costs Capital Cost Estimates (±25%) For personal use only ➢ Capital cost of US$409M has a post-tax payback period of 4.2 years Parameter US$M Brine Field 28.0 Capital Cost Breakdown Evaporation Pond System 52.6 Camp & Indirects & Process Plant 80.1 Infrastruction Contingecy Trench & Pond Uti
Slide 10: SOP Greenfield Development Projects
SOP Greenfield Development Projects For personal use only ➢ Agrimin is developing the world’s largest and lowest cost greenfield SOP project outside of Ethiopia and Eritrea ➢ Global opportunities to establish a new large-scale SOP supply base are largely limited to Eastern Africa and Western Austral
Slide 11: Key Attributes that Support Large-Scale Production
Key Attributes that Support Large-Scale Production For personal use only ➢ Potassium and Sulphate mineralisation is dissolved within the hypersaline groundwater (brine) in Lake Mackay Shallow Brine Resources Across the Entire Deposit ➢ Total Mineral Resource1 of 26.1Mt of SOP (drainable porosity) an
Slide 12: Project Scale has Growth Potential
Project Scale has Growth Potential Project Tenement Map For personal use only ➢ Mineral Resources are hosted within a single contiguous brine deposit across Lake Mackay ➢ Current proposed development covers only 70% of the overall project area, with potential to expand over time ➢ Deepest drill hole
Slide 13: Mineral Resources
Mineral Resources1 For personal use only ➢ Shallow Mineral Resources commence at an average of 0.4m beneath the ground surface across the entire deposit ➢ 98 drill holes on a 5km grid provide a strong geological understanding of the deposit ➢ Long-term pumping tests up to 120 days provide a strong b
Slide 14: Mine Plan
Mine Plan Mine Plan – Brine Extraction and Grade For personal use only ➢ Mine plan predicts an average annual brine extraction rate of 66.3Mm3 at 8.0kg/m3 of SOP over an initial 20 90.0 9.0 year period 80.0 8.0 70.0 7.0 ➢ Mine Plan is based on a portion of the Indicated 60.0 6.0 Mineral Resource to
Slide 15: Near Surface Brine Provides Low Resource Risk
Near Surface Brine Provides Low Resource Risk Proposed Trench Layout (20 Years) For personal use only ➢ Simple and low-cost extraction of Potassium-rich brine via a shallow on-lake trench system ➢ Trench design optimised to allow natural surface water movement to the feed channel Pilot Trenching on
Slide 16: Large On-Lake Area Supports a Sustainable Operation
Large On-Lake Area Supports a Sustainable Operation Proposed Evaporation Pond Layout (20 Years) For personal use only ➢ Full-scale evaporation ponds will cover less than 2% of Lake Mackay over the project’s initial 20 year life ➢ Unlined evaporation ponds to have a low capital cost and use of wet ha
Slide 17: Significant Investment in New Regional Infrastructure
Significant Investment in New Regional Infrastructure Proposed Site Layout For personal use only ➢ Gas to be supplied via a pipeline connected to the Amadeus Gas Pipeline, proposed under a Build-Own-Operation (BOO) arrangement ➢ Process water to be supplied by a raw water borefield located to the so
Slide 18: Mine-to-Ship Logistics Chain
Mine-to-Ship Logistics Chain Proposed Quad Road Train Configuration For personal use only ➢ Supply and demand fundamentals for SOP support the establishment of reliable and large-scale seaborne supply ➢ A dedicated fleet of quad road trains will be loaded via a load-out facility at the process plant
Slide 19: High Quality SOP Samples Produced
High Quality SOP Samples Produced Simplified Process Flow Diagram For personal use only ➢ Process testwork has produced commercial grade SOP samples (>52% K2O) that exceed industry benchmark grades ➢ Saskatchewan Research Council has completed extensive testwork to validate the coventional SOP produ
Slide 20: Long-Term Field Work Underway
Long-Term Field Work Underway For personal use only ➢ Long-term field tests commenced in August 2017 and will continue throughout 2018 to support the Definitive Feasibility Study ➢ Pilot scale evaporation trials underway to test the full crystallisation process under site conditions ➢ Environmental
Slide 21: Indicative Project Delivery Schedule
Indicative Project Delivery Schedule For personal use only 2018 2019 2020 2021 Activity Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Off-take & Project Financing Definitive Feasibility Study Environmental Assessment Front End Engineering Design Regulatory Approvals Site Establishment Trench & Pond Eart
Slide 22: A Catalyst for Regional Economic Development
A Catalyst for Regional Economic Development For personal use only ➢ Agrimin’s proposed US$409M fertilizer operation at Lake Mackay is the only advanced industrial development in this very remote part of Australia ➢ The Mackay SOP Project will create substantial economic and public benefits for Aust
Slide 23: Sulphate of Potash (SOP)
For personal use only Sulphate of Potash (SOP) Specialty Fertilizer for Modern Agriculture
Slide 24: Overview of Fertilizers
Overview of Fertilizers For personal use only ➢ Fertilizers provide three macronutrients that every crop needs: ➢ Nitrogen (N) – the most important for healthy plant growth, such as leaf size, colour and yield ➢ Phosphorus (P) – vital for photosynthesis and enhances stem durability ➢ Potassium (K) –
Slide 25: Potash Overview
Potash Overview For personal use only ➢ 90% of all potash production is in the form of MOP (muriate of potash) which contains 46% chloride ➢ SOP is chloride-free and vital for cash crops, such as fruits and vegetables. SOP improves nutritional value, taste and appearance of crops ➢ Global SOP market
Slide 26: Robust Outlook for SOP Prices
Robust Outlook for SOP Prices For personal use only ➢ SOP demand in China has more than tripled since 2007 and was met with a tripling in supply… but future supply growth is not apparent ➢ Long-term SOP prices will be supported by major structural trends: 1. Strong demand caused by: • Increasing are
Slide 27: Strong China SOP Prices
Strong China SOP Prices China SOP Price – 2 Year History For personal use only ➢ SOP prices in China have increased by >30% in the last 2 years due to strong demand growth and 650 3,600 rising production costs 600 3,400 550 3,200 ➢ Latest public price is US$478/t for Powder SOP and 500 3,000 US$502/
Slide 28: SOP Demand has Experienced Major Structural Change
SOP Demand has Experienced Major Structural Change Traditional Farmer Evolving Farmer For personal use only 2009 2018 Source: Yara, Google Earth Investor Presentation | June 2018 28
Slide 29: SOP Supply has also Experienced Major Structural Change
SOP Supply has also Experienced Major Structural Change 2018 Forecast SOP Production of Major Producers1 For personal use only ➢ 3 major salt lake projects have been built in China in the last 10 years to meet the increased SOP demand: 2,000,000tpa ➢ CITIC Guoan Group at Xitai Jinair salt lake (2012
Slide 30: An Emerging SOP Supply Gap in China
An Emerging SOP Supply Gap in China For personal use only ➢ China’s demand for SOP has grown from 1.2Mtpa in 2007 to 4.0Mtpa in 2017. China now provides over 50% of current global demand ➢ This demand growth has been met by increased domestic production of SOP from new salt lake operations in China
Slide 31: Tightening Environmental Controls are Impacting SOP
Tightening Environmental Controls are Impacting SOP For personal use only ➢ There is approximately 3.2Mtpa of SOP Mannheim capacity ➢ More than 40% of China’s SOP supply comes from the throughout China, which produced a total of 1.7Mtpa in 2017 conversion of MOP to SOP using the Mannheim Process Man
Slide 32: Compelling Investment Case for New Seaborne SOP Supply
Compelling Investment Case for New Seaborne SOP Supply For personal use only ➢ Agrimin is aiming to become the largest and lowest cost supplier of seaborne SOP 2017 Global SOP Cost Curve (FOB) ➢ Major industry opportunity to replace high-cost Mannheim production in China ➢ Australia has the advantag
Slide 33: Contact Details
Office Contact: 2C Loch Street Nedlands, Western Australia 6009 For personal use only Australia T: +61 8 9389 5363 E: [email protected] W: www.agrimin.com.au Investor Relations Contact: Mark Savich Chief Executive Officer M: +61 402 746 757 E: [email protected] Media Contact: Michael Vaughan
Slide 34: Appendix 1. Key People
Appendix 1. Key People Board of Directors Key Technical Personnel For personal use only Mark Savich | Chief Executive Officer Tom Lyons | General Manager Financial analyst (CFA) with 14 years of experience in the resources Geologist with experience in a range of commodities including industrial mine
Slide 35: Appendix 2. Mineral Resources Statement (JORC Code 2012)
Appendix 2. Mineral Resources Statement (JORC Code 2012) Mineral Resource – April 2018 (Total Porosity) For personal use only Category State Depth (mbgs) Volume (Mm3) Average Total Porosity SOP Grade (kg/m3) Contained SOP (Mt) Indicated WA 0.40 – 11.25 24,182 46.1% 8.3 92.2 WA 0.40 – 11.25 2,627 46.
Slide 36: Appendix 3. Climate
Appendix 3. Climate For personal use only ➢ Arid climate of Lake Mackay is excellent for solar evaporation of brines ➢ Project is located in the highest solar radiation zone in the country with an evaporation rate of between 3,200mm to 3,400mm per year ➢ Project area has an average rainfall of 280mm