NH3 Clean Energy Limited · ASX:NH3
NH3 Clean Energy — Hexagon Resources — Shareholder Meeting (November 2018)
30 slides from NH3 Clean Energy's shareholder meeting presentation, Nov 20, 2018
Slide 1: Building a Diversified High-Quality Graphite Business
“Energy storage & EVs” Natural Graphite Forecast Demand- Synthetic Graphite Forecast “Industrial applications” Batteries* Demand-Electrodes* BUILDING A DIVERSIFIED HIGH-QUALITY GRAPHITE BUSINESS Leveraged to high growth demand in the energy storage and industrial sectors Annual General Meeting of Sh
Slide 2: Hexagon has the expertise to understand the graphite market
Hexagon has the expertise to understand the ASX:HXG graphite market and position itself to maximise value
Slide 3: Clear Business Strategy
Clear Business Strategy The Strategy is to become a vertically integrated, advanced materials company, producing quality graphite products into a diverse range of premium end-use markets 1. Implementing the strategy: Analyse graphite market – its complex and highly fragmented nature Identify hig
Slide 4: Hexagon at a Glance
Hexagon at a Glance ASX Code HXG Shares on Issue 291.8M Options on issue 24.4M (unlisted) Share price (9/11/18) A$0.16 12 Month high/low A$0.28/A$0.09 Market Capitalisation A$49M Debt Nil Cash (30/06/2018) A$6.5M Emerging, low-risk, funded graphite business Upstream (Stage 1) development c. 100ktp
Slide 5: Business Structure
Business Structure HXG business is organised, aligned to the graphite value chain: • Source – demonstrated high-purity, crystalline, natural flake graphite • Refining – proprietary, low cost process to achieve ultra high purity • Product Development – to cater to a diverse range of premium end users
Slide 6: Business Structure: Source
Business Structure Source – the right “in-ground” material is critical to be competitive in high-quality markets The McIntosh Project: • Has clean mineralogy to make high- grade concentrates • Is Large scale for long term project • Funded through to Commercial Production Other Opportunities • HXG ha
Slide 7: Source - Overview
Source - Overview McIntosh Graphite Project – large-scale deposit in mining-friendly jurisdiction Current Stage 1 – Mineral Resources. Contained JORC Classification Tonnes (Mt) TGC (%) Graphite (kt) Total Indicated & 21.3 4.5% 964 Inferred Full Mineral Resources Table & Location Plan in Attachment 1
Slide 8: McIntosh Project - planning for future development
Source – McIntosh Project - planning for future development Stage 1: Multi open pit mining, simple flotation at c. 2.4Mtpa to produce c. 100,000tpa of high-grade (97-98% TGC) graphite concentrate, likely across 3 flake sizes. 8
Slide 9: McIntosh Joint Venture (MJV)
Source – McIntosh Joint Venture (MJV) Partnered with ASX listed Mineral Resources Limited (ASX:MIN) • Mineral Resources Limited (MRL) to fund all Feasibility Study work, capital development and ramp- up costs to achieve Commercial Production to earn a 51% interest in the McIntosh Project (subject to
Slide 10: McIntosh Joint Venture Update
Source – McIntosh Joint Venture Update* Feasibility Study in progress New Targets – Confirming Exploration Targets • Mahi Mahi - 90 metres of shallow graphite 90m • Threadfin - 20 metres of shallow graphite Resource Infill/Met Samples • Emperor - indicates graphite occurs at Mahi Mahi Target shallow
Slide 11: McIntosh Graphite Marketable Attributes: Purity and Flake Size
Source - McIntosh GraphiteTM Marketable Attributes Purity Flake Size High purity, high value & low purification cost Emperor deposit - 85% of Flake Before - 97.5% Wt C 99.9998 wt.% C was achieved by a in Concentrate sample is Large, proprietary thermal purification Jumbo & Super Jumbo size. techniqu
Slide 12: McIntosh Graphite Marketable Attributes: Expandable, Highly Crystalline
Source - McIntosh GraphiteTM Marketable Attributes Expandable Highly Crystalline 220% Expansion Factor for + 60 Mesh Flake (+250um) HOPG – rare attribute Highly Ordered Pyrolytic Graphite* Before - 97.5% Wt C High proportion of Large/Jumbo sized Highly crystalline, near all-hexagonal flake: preferre
Slide 13: Source – the production case
Source – the production case A diverse and sought after product range – from the “Upstream” Stage 1: 100ktpa planned output, comprising 3 graphite concentrate products: Product 1 - “Expanded Line” destined for foils and shielding (nuclear grade) and Conductivity Enhancement Materials (CEM) Produ
Slide 14: Business Structure: Refining
Business Structure Refining – is a key distinguishing feature of HXG’s business strategy: • Cost Advantage - McIntosh flake “easy to purify”; and • Utilisation of highly productive, established, state-of-the-art refining technology which enables access into high-volume markets. 14
Slide 15: Refining
Refining A core pillar of the down stream business strategy HXG’s modified flow sheet – refining first; because it is low cost and produces high-value end products. Here’s an example for the Battery Materials stream: HXG is proposing an innovative downstream flow sheet based on: • Low Cost, first st
Slide 16: Business Structure: Product Development
Business Structure Product Development The 3 product streams reflect diverse opportunities, enabled by: • Purity – ultra-high and low cost; • Large flake - majority Large & Jumbo size; and • Easy milling – large flake size is desirable for certain end uses, but there is increasing demand for ultra-f
Slide 17: Product Development
Product Development Graphite – a multi-staged, complex and demanding supply chain Downstream test work currently underway: 1. “Electrode” Line: • Making and testing UHP electrodes with varying blends of McIntosh flake. Currently UHPs – made of synthetic graphite. • High purity, ultra-fine lubricants
Slide 18: Fast track to commercialisation
Product Development Fast track to commercialisation HXG is focussed on speed to positive cash flow and profitability Opportunities to fast track commercialisation: Sell concentrates; excellent prices available for quality materials from stable jurisdictions. Refined, raw materials – can attract
Slide 19: Business Structure - Marketing
Business Structure - Marketing Marketing Understand the market Focus products and production to meet those needs Design qualification and ramp-up to attain positive cash flow as fast as possible Ongoing work to value-add and build “premium quality” brand value. HXG will establish a dedicated
Slide 20: A global market context for HXG products
Marketing: A global market context for HXG products Key Facts • Scale – 2.44mtpa of graphite produced globally in 2017*: 1.55 mtpa of synthetic graphite; and 0.90 mtpa of natural (mined) graphite. 76% of all graphite is from China • Natural graphite market comprises: 0.59 mtpa flake (66%)
Slide 21: Market Drivers – EVs, ESS, EAF electrodes
Marketing: A global market context for HXG products Market Drivers – EV’s & ESS as well as EAF electrodes and pollution control in China • Natural flake graphite is already flaky and crystalline; “graphitisation” has already occurred over the course of millions of years under the influence of temper
Slide 22: Marketing – based on diversity and quality
Marketing – based on diversity and quality What goes into the “pricing matrix”? McIntosh Graphite has a unique range of technical attributes, including: • Purity – ultra-high “5-9’s” achievable at a low cost. • HOPG-like – rare, highly ordered crystalline structures – suitable to displace synthetic
Slide 23: Reliable and reputable jurisdiction
Marketing advantage – reliable & reputable jurisdiction No issues of Sovereign or Brand Risk from Australia Sovereign Risk Brand Risk 23
Slide 24: Basket Price for Stage 1 product mix
Marketing – based on diversity and quality Graphite is not a commodity, pricing is very opaque HXG’s estimate of Basket Price for Stage 1, 3 Product mix HXG-97-98 % TGC Planned Size Specification % of Output $US/t FOB Stage 1: Concentrate production (Prod. 1-3). Product* (ASTM) Lower price range Hig
Slide 25: Pricing – Final Products
Marketing – based on diversity and quality Some examples of the value chain HXG is pursuing in downstream processing Pricing – Final Products • Examples from IMERYS*: KSL6 c.US$16.2/kg CEM, synthetic graphite KS15 c.US$9.6/kg CEM, synthetic graphite BNB90 c.US$19/kg Expanded graphite – CEM, natural
Slide 26: News – charting the commercialisation path
News – ongoing news charting the commercialisation path “Upstream” MJV (Mineral Resources - Manager) • Ongoing – with drill results, resource updates, flowsheets, Opex and CapEx outcomes – based on recently completed drill program. “Downstream” 100% HXG Focus & NAmLabs (USA) • Pilot Furnace agreemen
Slide 27: Highlights
Highlights Low-risk strategy, fully funded graphite source and quality downstream products McIntosh is a high purity, natural crystalline flake graphite resource Stage 1 project to produce c. 100ktpa of graphite concentrates for a diverse range of premium priced end uses Stage 1 Project – full
Slide 28: Important Notices
Important Notices Competent Persons’ Attributions Exploration Results and Mineral Resource Estimates The information within this report that relates to exploration results, Exploration Target estimates, geological data and Mineral Resources at the McIntosh Project is based on information compiled by
Slide 29: Attachment 1: Mineral Resource Detail
Attachment 1: Mineral Resource Detail McIntosh Flake Graphite Project Mineral Resource as at May 2017 reported by deposit and Location Plan – McIntosh Mineral Resources (in yellow). Also shown are Exploration above a 3% TGC cut-off grade. Targets* (in brown) as reported to ASX 12 April. 2017. As per
Slide 30: Hexagon Resources Limited Contact
Hexagon Resources Limited www.hexagonresouces.com Contact Mike Rosenstreich Managing Director [email protected] +61 (08) 6244 0349
Hexagon Resources — Shareholder Meeting (November 2018) on 6ix