Sunrise Energy Metals Limited · ASX:SRL
Sunrise Energy Metals — Clean TeQ Holdings — Investor Presentation (July 2018)
28 slides from Sunrise Energy Metals's investor presentation, July 2018
Slide 1: Critical Raw Materials for the Battery Revolution
CRITICAL RAW MATERIALS FOR THE BATTERY REVOLUTION CORPORATE PRESENTATION July 2018 ASX/TSX: CLQ
Slide 2: Disclaimer: Forward Looking Statements
DISCLAIMER FORWARD LOOKING STATEMENTS Certain statements in this presentation constitute “forward-looking statements” or “forward-looking information” within the meaning of applicable securities laws. Such statements involve known and unknown risks, uncertainties and other factors, which may cause a
Slide 3: Disclaimer: Forward Looking Statements
DISCLAIMER FORWARD LOOKING STATEMENTS All such forward-looking information and statements are based on certain assumptions and analyses made by Clean TeQ’s management in light of their experience and perception of historical trends, current conditions and expected future developments, as well as oth
Slide 4: The Battery Revolution
THE BATTERY REVOLUTION ELECTRIC VEHICLE SALES DRIVING HUGE GROWTH IN RAW MATERIALS DEMAND 16 90 14 80 70 12 60 10 50 ~ 4x 8 40 ~ 3x 6 30 4 20 2 10 0 0 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 HEV sales PHEV sales EV sales Global EV Stock (RHS) Source: Wood Mackenzie 2017 Source: Wood M
Slide 5: China Is Leading the Race
CHINA IS LEADING THE RACE EMISSIONS CONTROLS LEGISLATION DRIVING THE AGENDA 3 best selling EV’s in China – Dec 20171 • New Energy Vehicle (NEV) mandate finalised 2017 to become effective in 2019 • Credit based system targeting: • 10% EV by 2019, 12% in 2020 • EV subsidies based on vehicle range: • C
Slide 6: Nickel: Nickel Sulphate Capacity Needs to Grow
NICKEL NICKEL SULPHATE CAPACITY NEEDS TO GROW Forecast Mined Supply of Class 1 Nickel Projects ▪ Electric vehicles are heavy consumers of nickel sulphate ▪ Next generation lithium ion batteries will be more nickel intensive ▪ Less than 50% of current global nickel production is suitable for battery
Slide 7: Cobalt: Supply Constrained & Geographically Concentrated
COBALT SUPPLY CONSTRAINED & GEOGRAPHICALLY CONCENTRATED ▪ Majority of global cobalt sourced from DRC COBALT – GLOBAL RANKINGS presenting major supply risk for end users ▪ Security of supply ▪ Auditability of supply chain ▪ 95% of production comes as a by-product of copper or nickel production ▪ High
Slide 8: Scandium: Enabling a New Generation of Lightweight Alloys
SCANDIUM ENABLING A NEW GENERATION OF LIGHTWEIGHT ALLOYS ▪ Sunrise is one of the world’s largest and Airbus Group’s Light-rider highest grade scandium resources ▪ Scandium is used to provide next generation lightweight aluminium alloys for key transportation markets ▪ Clean TeQ continues to promote
Slide 9: Project Overview
CLEAN SUNRISE ae PROJECT OVERVIEW 4
Slide 10: Project Overview
PROJECT OVERVIEW ADVANCED DEVELOPMENT PROJECT LOCATED IN CENTRAL NSW ▪ 100% owned by Clean TeQ ▪ Located 350km west of Sydney in an established mining region ▪ Significant infrastructure in place including sealed road to site ▪ Laterite (iron-hosted) mineral resource, rich in nickel, cobalt and scan
Slide 11: Key Advantages
KEY ADVANTAGES PRIMARY DRIVERS TO SUCCESS AT SUNRISE MINERALOGY FLOWSHEET LOCATION ▪ One of the highest grade ▪ Proprietary Clean iX technology ▪ Fully auditable, non-DRC cobalt resources outside of provides lowest cost path to supply attracting strong interest Africa battery ready products from end
Slide 12: High Cobalt Grades
HIGH COBALT GRADES LARGEST AND HIGHEST GRADE PROJECT IN AUSTRALIA Cobalt/nickel ratio Selected development projects: Grade vs Size1 & contained cobalt of Australian laterites2 1 - Source: Corporate filings and publicly released resource statements. Sunrise data based on 2 - Source: Corporate filings
Slide 13: Project Is Development Ready
PROJECT IS DEVELOPMENT READY ALL KEY APPROVALS, PERMITS AND TESTING COMPLETE STUDIES WATER POWER & GAS OFFTAKE MINING LEASES Prefeasibility study completed 3.2GLpa water Power and gas are Binding offtake signed Granted by NSW in October 2016 with allocation granted by within close proximity with Bei
Slide 14: Definitive Feasibility Study
DEFINITIVE FEASIBILITY STUDY HIGHLIGHTS OUTSTANDING ECONOMIC AND TECHNICAL OUTCOMES 1 – Net Present Value (NPV) calculated at 8% discount rate, real, 100% equity basis 2 – By-product credits include cobalt, scandium and ammonium sulphate P A G E 14
Slide 15: Strong Cash Flow Generation
STRONG CASH FLOW GENERATION OUTSTANDING ECONOMIC AND TECHNICAL OUTCOMES Clean TeQ Sunrise is forecast to deliver up to ▪ US$14 billion in revenue Cumulative and Net Free Cash Flow Projection ($USm) ▪ life of Mine EBITDA of US$8.6 billion 800 8,000 ▪ Average annual EBITDA of US$344 million 600 6,000
Slide 16: Production Profile
PRODUCTION PROFILE SIGNIFICANT PRODUCTION OF COBALT, NICKEL AND SCANDIUM Average production post ramp-up of: Nickel and Cobalt Production Volumes (Years 1 - 25) 25,000 Year 2 - 6 Nickel: 21,780 tpa Cobalt: 4,640 tpa 20,000 Year 2 – 11 15,000 Nickel: 19,620 tpa Cobalt: 4,420 tpa Tonnes Year 2 – 25 10
Slide 17: Competitive Cost Position
COMPETETIVE COST POSITION LOWEST QUARTILE C1 CASH COSTS Clean TeQ Sunrise C1 Cash Costs $10.00 ▪ High cobalt grades support first quartile average C1 operating costs $8.00 $6.00 ▪ (US$1.46/lb) Ni after by-product credits $4.00 ▪ US$4.68/lb Ni before credits $2.00 US$/lb Ni US$/lb Ni $0.00 Cost Centr
Slide 18: Capital Cost Estimate
CAPITAL COST ESTIMATE Capital cost estimate: US$1.33 billion (A$1.77 billion), excluding US$165m contingency Capital cost escalation relative to the 2016 Pre- Feasibility Study (PFS) due to: ▪ Significant upfront investment in additional refining capacity to provide for the opportunity to increase p
Slide 19: Community & Social Benefits
COMMUNITY & SOCIAL BENEFITS Strong community benefits over life of mine including: • Employment • Infrastructure upgrades • Taxes • Royalties P A G E 19
Slide 20: Schedule & Next Steps
CLEAN SUNRISE SCHEDULE & Re Lay EM NEXT STEPS UUM. aie ie
Slide 21: Accelerate Project Development
ACCELERATE PROJECT DEVELOPMENT A$155 MILLION RAISED IN MARCH 2018 TO FUND KEY WORKSTREAMS DURING 2018 • Detailed engineering and design for process plant and associated infrastructure • Long lead item procurement including: • Acid plant • Sulphur plant • Generators • Fabrication of special material
Slide 22: Secure Project Debt Financing
SECURE PROJECT DEBT FINANCING STRONG BANKING SUPPORT FOR PROJECT DEBT FACILITY ▪ Mandated Lead Arranger (MLA) group appointed November 2017 ▪ Industrial Commercial Bank of China (ICBC) ▪ National Australia Bank ▪ Societe General ▪ Natixis ▪ US$500 million in indicative commitments received, prior to
Slide 23: Finalise Offtake
FINALISE OFFTAKE CONSIDERABLE DEMAND FROM END USERS AND INTERMEDIARIES ▪ First offtake agreement with Beijing Easpring signed in 2017 ▪ Extensive due-diligence is ongoing by a range of parties considering product offtake and/or project level investment ▪ Product samples provided to various participa
Slide 24: Complete Financing
COMPLETE FINANCING FUNDING STRATGEY MAY INCLUDE STRATEGIC INVESTOR ▪ Discussions are ongoing with a range of parties regarding project level investment, including with; ▪ End users ▪ Market intermediaries ▪ Other strategic investors ▪ Strategic investment opportunities may be linked to product offta
Slide 25: Indicative Project Schedule
INDICATIVE PROJECT SCHEUDLE 2H 2018 2019 2020 2021 DEFINIT IVE DET AIL ED PRO JECT CO M M ENCE CO M M ENCE FEASI BI LIT Y ENG INEERING FINAN CI NG CO NST RUCT IO N CO M M ISSIO NING ST UDY FEED for process plant Secure project debt & RAM P UP and associated finance via MLA group infrastructure Const
Slide 26: Corporate Overview
CORPORATE OVERVIEW CAPITAL STRUCTURE SHARE PRICE PERFORMANCE ASX/TSX code CLQ Share Price (at 30 June 2018) A$0.82 Shares on Issue 742.7 M Options 11.7 M Performance Rights 6.1 M Market Capitalisation (undiluted) ~A$610 M Proforma Cash @ 30 June 20181 A$170 M MAJOR SHAREHOLDERS Robert Friedland 12.9
Slide 27: Clean TeQ Holdings Limited contact details
P: +61 3 9797 6700 E: [email protected] Clean TeQ Holdings Limited 12/21 Howleys Rd Notting Hill VIC 3000 AUSTRALIA www.cleanteq.com
Slide 28: Reserves and Resources: Competent and Qualified Persons Consents
RESERVES AND RESOURCES COMPETENT AND QUALIFIED PERSONS CONSENTS The information in this report that relates to Mineral Resources is based on information compiled by Mr Lynn Widenbar, a member of the Australasian Institute of Mining and Metallurgy. Mr Widenbar is a full-time employee of Widenbar and
Clean TeQ Holdings — Investor Presentation (July 2018) on 6ix