Iluka Resources Limited · ASX:ILU
Iluka Resources — Corporate Update (December 2005)
15 slides from Iluka Resources's corporate update, Dec 8, 2005
Slide 1: Florida/Georgia Mineral Sands Closure
Iluka Resources Limited Florida/Georgia Mineral Sands Closure Teleconference: Mike Folwell Managing Director & Chief Executive Officer David Grant Chief Financial Officer Steve Ward EGM Marketing, Business Development & USA Operations 8 December 2005
Slide 2: Disclaimer and Important Notice
Disclaimer and Important Notice This presentation contains forward- forward -looking statements that are subject to risk factors associated with the mining, processing and sale of minerals. Forward-looking statements include those containing such Forward- words as anticipate, estimates, should, will
Slide 3: Key Features of Today's Announcement
Key Features of Today’s Announcement 4 Business case does not support retention of Florida/Georgia nor allocation of further management/capital resources. 4 Staged closure completed in second half of 2006 4 Appropriate portfolio management action: - loss making and cash flow negative - few levers to
Slide 4: Factors Leading to Closure
Factors Leading to Closure Recent detailed review of Florida/Georgia business: 4 Increasing mining costs associated with thin, disparate, small and low grade ore bodies (2- (2- 4%) 4 High level of “benchmarked” operating efficiency in mining and processing however 4 “Step change” improvement in cost
Slide 5: Iluka Management Perspective on Review Findings
Iluka Management Perspective on Review Findings 4 Marginal business case going forward 4 Non Non--efficient future allocation of capital and management resources 4 No realistic sale options 4 Portfolio approach dictates directing future capital spend to higher value business 4 Staged exit which meet
Slide 6: Financial Implications of Exit
Financial Implications of Exit Total FY05 charge of ~US$60M ~A$80M Notes: - Assumes A$/US$ exchange rate of 75 cents - Write- down includes fair value allocation of ~US$23M – Write- legacy acquisition costs from Westralian Sands/RGC merger 6
Slide 7: Explanation of Write-down Components Cont'd
Explanation of Write-down Components Cont’d Write-- down Components Write 4 Asset write- write-downs 4 Redundancy provisions ~A$100M 4 Accelerated Rehabilitation costs 4 Consulting and other Tax Credit on write- write-down (~20% tax rate) Net write- write-down after tax ~$A80M 7
Slide 8: Financial Benefits of Closure
Financial Benefits of Closure 4 Closes unprofitable business 4 Removes need for capital spend of approximately A$35M over next two years in Florida/Georgia 4 Improved operating cash flow from USA business 4 Some plant & equipment to be relocated (two mobile concentrators) 4 Capital management focus
Slide 9: Supplementary Material
Supplementary Material
Slide 10: Florida/Georgia Mineral Sands Deposits
Florida/Georgia Mineral Sands Deposits Ludowici Amelia Darien Lulaton Varn Brunswick Buffalo Ridge Mission Cabin Bluff Boulogne Yulee Green Cove Springs 10
Slide 11: Overview of Florida/Georgia Mining Operations
Overview of Florida/Georgia Mining Operations 4 Mining operations commenced early 1970s 4 Large dredgeable ore bodies at Green Cove Springs in Florida reaching end of economic life, with shutdown forecast for mid- mid - 2003 4 Dredging mining ceased in 2002 4 New plan involved ‘step out’ dry mining
Slide 12: Resources (including Reserves) as at 31 December 2004
Resources (including Reserves) as at 31 December 2004 HM Assemblage Ore Tonnes In Situ Mt HM Grade Ilm Zircon Rutile Millions HM (%) Grade (%) Grade (%) Grade (%) Florida/Georgia 598.82 14.46 2.4 42 12 11 Virginia 77.2 6.12 7.9 66 15 - Florida/Georgia as a % Total of Iluka’s 17 8.0 Total Resources F
Slide 13: Production by Product (tonnes) 2004 Financial Year
Production by Product (tonnes) 2004 Financial Year Zircon Ilmenite Rutile Florida/Georgia 27,753 63,747 22,917 Virginia 74,127 262,439 - Total Iluka Global 428,460 1,450,431 149,279 Production Florida/Georgia as % of Total Iluka 6.5% 4.4% 15.4% Production 13
Slide 14: Capital Expenditure – A$M
Capital Expenditure – A$M 2003 2004 Florida/Georgia 43.5 19.5 Virginia 6.4 5.7 Total 49.9 25.2 14
Slide 15: For further information, please contact
For further information, please contact: Dr Robert Porter General Manager Investor Relations Tel: +61 8 9360 4751 Fax: +61 8 9360 4336 Email: [email protected] Website: www.iluka.com 15