02 September 2015 Disclaimer The content of information contained in - - PowerPoint PPT Presentation
02 September 2015 Disclaimer The content of information contained in - - PowerPoint PPT Presentation
Building a Strategic Position in the Fluorspar Sector Company Presentation 02 September 2015 Disclaimer The content of information contained in these slides and the accompanying verbal presentation (together, the Presentation) has not been
Disclaimer
The content of information contained in these slides and the accompanying verbal presentation (together, the “Presentation”) has not been approved by an authorised person within the meaning of the Financial Services and Markets Act 2000 (“FSMA”). Reliance upon this Presentation for the purpose of engaging in any investment activity may expose an individual to a significant risk of losing all of the property or other assets invested. If any person is in any doubt as to the contents of this Presentation, they should seek independent advice from a person who is authorised for the purposes of FSMA and who specialises in advising in investments of this kind.
This Presentation is being supplied to you solely for your information. This Presentation has been prepared by, and is the sole responsibility of, Tertiary Minerals plc (the “Company”). The directors of the Company have taken all reasonable care to ensure that the facts stated herein are true to the best of their knowledge, information and belief. This Presentation does not constitute, or form part of, an admission document, listing particulars or a prospectus relating to the Company, nor does it constitute, or form part of, any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any shares in the Company nor shall it or any part of it, or the fact of its distribution, form the basis of, or be relied upon in connection with, or act as any inducement to enter into any contract therefor. The information in this Presentation is provided as at the date of this presentation and as such is preliminary in nature, has not been fully verified by the Company and is subject to material amendment, updating and
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Board of Directors
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- 3. Donald McAlister, Non-Executive Director
Accountant. Previously Finance Director at Mwana Africa plc, Ridge Mining plc and Reunion Mining. 20+ years’ experience in all financial aspects of the resource industry, including metal hedging, tax planning, economic modelling/evaluation, project finance and IPO’s. Founding director of the Company.
- 1. Patrick Cheetham, Executive Chairman
Geologist. 33 years’ experience in mineral exploration. 28 years’ experience in public company management. Founder of the Company, Dragon Mining Ltd, Archaean Gold NL and Sunrise Resources plc.
- 2. Richard Clemmey, Managing Director
Chartered Engineer. 21+ years’ experience in developing and managing mining/quarrying projects worldwide for Derwent Mining, Lafarge, Hargreaves (GB) Ltd, Marshalls plc and CFE. Board director since May 2012.
- 4. David Whitehead, Non-Executive Director
Mining Geologist. 41+ years’ experience in all aspects of mineral exploration, mine development and operations management. 20 years’ at senior executive level at BHP Billiton. Board director since 2002.
- 5. Colin Fitch LLM, FCIS, Company Secretary
Barrister-at-Law. Previously Corporate Finance Director of Kleinwort Benson, Partner and Head of Corporate Finance at Rowe & Pitman (SG Warburg Securities) and Assistant Company Secretary at the London Stock Exchange. Held a number
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non-executive directorships including Merrydown plc, African Lakes plc and Manders plc.
Company’s Aims, Strategy and Business Plan
Company’s Opportunity in Fluorspar (CaF2)
- Fluorspar is an essential raw material in the chemical, steel and aluminium industries and in a
growing number of high-tech green technologies and pharmaceutical applications.
- Fluorspar has a growing economic and strategic importance; defined as a strategic mineral in
the US with 100% net import reliance; identified by the European Commission as a critical raw material facing a supply shortage.
Company’s Aims
- Become a reliable long-term and competitive supplier of high quality fluorspar to world markets.
- Add value to the Group’s mineral projects through the discovery and development of mineral
resources.
Company Strategy
- To acquire and develop large fluorspar deposits located close to established infrastructure and
key markets in stable, democratic and mining friendly jurisdictions.
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Project Locations and Performance
5 2015 to date : 67% increase in the Company’s contained fluorspar asset base >13 Mt (JORC compliant)
Fluorspar Market
Global Fluorspar Demand 6.5 Mt/year Acid Grade/Acid-spar 58% - 3.8 Mt/year Hydrogen Fluoride HF 40% - 2.6 Mt/yr Fluorocarbons - 2.16 Mt/year e.g. New generation of environmentally friendly refrigerants - HFO’s Fluoropolymers e.g. Electrolyte (lithium phosphorus hexafluoride LiPF6) & polyvinylidene fluoride PVDF used in lithium batteries. Teflon and Gore-Tex Fluorochemicals e.g. Electronics, Thermoplastics, Medicine, Metallurgy, Water, Detergents and Glass Aluminium Fluoride AlF3 18% - 1.2 Mt/year Metallurgical Grade/Met-spar & Ceramic Grade 42% - 2.7 Mt/year Flux in Steel Production, Cement, Enamels, Cooking Utensils, Glass, Glass Fibre
Fluorspar - What is it used for?
- Fluorspar is the commercial name for concentrates of the mineral Fluorite, CaF2.
- Fluorite is the main industrial source of Fluorine, F.
- Major western acid-spar consumers: DuPont, Honeywell, Solvay, Lanxess, Boliden, Fluorsid,
DDF.
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Source: Industrial Minerals Magazine, Roskill, CRU, UN, USGS, CCM, Company Data
Fluorspar Market Dynamics
- China produces >50% of the world’s fluorspar.
- Chinese exports have declined substantially since 2000 – internal demand.
- China may become a net importer in the future.
- Acid-spar prices have declined since late 2012 but the long-term trend has been upwards with
prices increasing >3 fold since 2000.
- USA, Canada and Europe – largest acid-spar consumers outside China.
- Fluorspar is classified as a critical raw material by the European Commission.
- USA considers fluorspar as a strategic mineral – 100% net import reliance.
Source: Industrial Minerals Magazine, Roskill, CRU, UN, USGS, CCM, Company Data
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Storuman Fluorspar Project
Excellent Location & Infrastructure
- Adjacent to the main E12 highway.
- Storuman town and new bulk rail terminal – 25 km.
- Road and rail linked to Umeå Port – 240 km.
Lars Lind Umeå
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Storuman Fluorspar Project
Positive Scoping Study
- Completed by Scott Wilson.
- Process flow sheet - Delta Minerals.
- Robust economics.
- Bulk rail terminal constructed post
Scoping Study.
Drilling (2010) & JORC Mineral Resource Estimate (SRK 2011)
- 46 diamond core drill holes.
- 28% increase in resource compared
with Scoping Study.
- Waste : ore strip ratio reduced.
- 2.2t:1t to 0.8t:1t.
- Potential step-change for scale of
mineralisation, open laterally in all directions.
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Classification Million Tonnes (Mt) Fluorspar (CaF2%) Indicated 25 10.28 Inferred 2.7 9.57 Total 27.8 10.21
Base Case Tonnage/grade in pit (non-JORC) 18mt @12.3% Fluorspar Strip ratio 2.2:1 Mining rate
- c. 1 million tpa
Fluorspar Price (CIF Rotterdam) $US 357/tonne Average Annual Production Acid Grade Fluorspar 103,000 tpa Mine Life 18 years Initial Capital Cost (Capex) US$ 46 million Pre-Tax NPV (8% coc) US$ 33 million IRR (100% equity) 24% Payback period < 3 years
Storuman Fluorspar Project
Medium Scale Global Producer
200,000 400,000 600,000 800,000 1,000,000 1,200,000 Production (t)
Storuman vs Leading Producers 2012
Production rate of 103,000 tpa:
- Medium Scale Global Producer
- A Leading European Producer
- Resource base will support future expansion
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Source: Roskill, Company Data
Mining and Processing
- Low waste : ore ratio and horizontal ore horizons with no fluorspar mineralisation in the
granite basement lends itself to cut and fill mining technique (progressive restoration).
- Processing method is common in the mining industry – not bespoke.
Open pit mining – cut and fill Crushing Grinding Flotation – fluorspar concentration Silica tailings Fluorspar concentrate for shipping
Storuman Fluorspar Project
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Storuman Fluorspar Project
2014 Highlights
- Preparation and submission of Exploitation (Mine) Permit
application – Completed Q2.
- Final stage of Preliminary Feasibility Study (PFS)
metallurgical testwork – optimisation ongoing.
2015 Target Milestones
- Exploitation (Mine) Permit – decision expected Q4
- Final stage of Preliminary Feasibility Study (PFS)
metallurgical testwork and end user engagement – expected completion Q4.
- Scoping study level evaluation for processing and mine
planning to focus on further elements of the PFS – expected completion Q4.
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Lassedalen Fluorspar Project
Excellent Location & Infrastructure
- 500 m from highway E134 & Railway.
- 6 km from famous silver mining town of Kongsberg.
- 50 km from Port of Drammen.
- 80 km SW of City of Oslo.
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Lassedalen Fluorspar Project
History and Geology
- Steeply dipping fluorspar vein system in 4 km long vein breccia zone.
- Drilled by Norsk Hydro in the 1970’s – 28 diamond holes.
- Proved vein over 2.7 km strike length.
- Open at depth and along strike.
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Lassedalen Fluorspar Project
Milestones Achieved
- JORC Mineral Resource Estimate (SRK Consulting) – 2012.
- Re-logged and sampled 3.5 km of drill core from 23 of the 28 diamond holes drilled in the
1970’s.
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- Scoping Study (Wardell Armstrong
International) – 2012.
Classification Million Tonnes (Mt) Fluorspar (CaF2%) Inferred 4 24.6
Base Case Extended Mine Case Tonnage Mined (underground) 3.6mt @ 22.4% Fluorspar 4.5mt @22.4% Fluorspar Mining rate 543,000 tpa 543,000 tpa Fluorspar Price (CIF Rotterdam) $US 491/tonne $US 491/tonne Average Annual Production Acid Grade Fluorspar 100,000 tpa 100,000 tpa Mine Life 6.6 years 8.25 years Initial Capital Cost (Capex) US$ 78 million US$ 78 million Pre-Tax NPV (10% coc) US$ 31.6 million US$ 52.2 million IRR (100% equity) 20.20% 24.10%
MB Fluorspar Project
Nevada - Most Favourable Mining Jurisdiction in the USA
- Located 14 km SW of Eureka, Eureka County,
Nevada.
- Trans-national road and rail links, rail 161 km
from the project location.
- 780 km to port of San Francisco.
- Road access to and over property.
- Government land - no special status.
- 84% of Eureka County population employed in
mining industry.
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MB Fluorspar Project
2013 Highlights
- Phase 1&2 drilling programmes
- 26 holes, 3220 metres.
2014 Highlights
- Large Maiden JORC Compliant Mineral Resource Estimate –
completed April 2014.
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- Scoping Study level metallurgical testwork – programme
started.
- Phase 3 drilling programme
- 9 percussion holes, 2516 metres.
- Completed November 2014.
- Key Objectives for Phase 3 drilling:
- Target potential higher grade mineralisation closer to the interpreted
source of mineralisation.
- Test lateral extent and depth of fluorspar mineralisation west of the
existing Mineral Resource.
Classification Million Tonnes (Mt) Fluorspar (CaF2%) Indicated (8% CaF2 cut-off) 8.9 10.3 Inferred (8% CaF2 cut-off) 29.5 10.4
MB Fluorspar Project
2015 – Highlights to Date
- Large upgraded JORC Compliant Mineral
Resource Estimate – completed June 2015.
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Classification Million Tonnes (Mt) Fluorspar (CaF2%) Indicated (9% CaF2 cut-off) 6.1 10.8 Inferred (9% CaF2 cut-off) 80.3 10.7 Total 86.4 10.7
- More than doubled the 2014 Maiden JORC
Mineral Resource.
- Newly defined Western Area potentially closer to
the core of the mineralised system – higher grade fluorspar mineralisation may be expected.
- The Mineral Deposit remains open at depth and
in all lateral directions.
MB Fluorspar Project
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MB Fluorspar Project
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2015 Target Milestones
- JORC Mineral Resource Upgrade - Completed
- Geophysical programme and Phase 4 drilling - targeting higher
grades of fluorspar mineralisation and increasing tonnage
Fluorspar Project Timetable
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Fluorspar Projects - Indicative Schedule
Storuman 2014 2015 Q1 Q2 Q3 Q4 Pre-Feasibility Study (PFS) Metallurgical Testwork & End User Engagement
Complete
Scoping Study Level Evaluation for Processing and Mine Planning
Complete
Exploitation (Mining) Permit
Submit Decision?
Remaining Elements of the PFS
Start
MB Project 2014 2015 Q1 Q2 Q3 Q4 Phase 3 Drilling Results
Complete
Upgrade JORC Mineral Resource Estimate
Complete
Scoping Study Metallurgical Testwork
Complete
Phase 4 Drilling Programme/Geophysical Survey/Scoping Study Lassedalen 2014 2015 Q1 Q1 Q2 Q3 Q4 PFS Drilling and JORC (indicated) Project currently on hold - prioritise Storuman and MB Project
Note: All schedules are subject to change, funding and successful completion of each phase of work
Non-Core Projects
- Kaaresselkä - Kiekerömaa - Gold, Finland
- Kaaresselkä licence renewal granted in March 2013.
- Kiekerömaa licence renewal granted in April 2014.
- Re-evaluating historic exploration results.
- Looking to valorise the project through joint venture or sale.
- Rosendal Tantalum Project, Finland
- Evaluating production opportunities.
- Looking to valorise the project through joint venture or sale.
- Ghurayyah Tantalum–Niobium-Rare-Earth Project, Saudi Arabia
- Re-issue of licence pending with Deputy Ministry for Mineral Resources in Saudi
Arabia.
Other Projects
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Investment Case
Tertiary Minerals plc - The only UK public traded company offering an exciting exposure to looming fluorspar market shortage.
- Fluorspar market is going through a “paradigm shift” – with China evolving from a large net
exporter to a potential net importer.
- Broker Research suggests shares are undervalued1.
Europe – Key Market – Net Importer
- Storuman fluorspar project (Sweden) Scoping Study shows robust economics.
- Mine Permit application submitted in 2014, decision expected within next few months.
- JORC Resource Estimate at Lassedalen in Norway adds 1Mt fluorspar to 3Mt Storuman
resource - second European fluorspar project in pipeline.
- Scoping Study on the Lassedalen fluorspar project (Norway) shows positive economics,
levered to mine life – further drilling required. USA – Key Market, 100% Net Import Reliance
- MB Fluorspar Project, Nevada, USA – June 2015 large upgraded JORC Mineral Resource
Estimate – 86.4 Mt grading 10.7% fluorspar (CaF2).
- Planning next stage – Geophysics and Drilling targeting higher grades and tonnage.
Note 1: Previous price target estimates are no indication of future prices 23
Cantor Fitzgerald Europe 18p per share 16 April 2014 Beaufort Securities 24.8p per share 16 April 2014 SPANGEL 10.6p per share 13 March 2015 BROKER RESEARCH - Price Targets
Building a Strategic Position in the Fluorspar Sector
Tertiary Minerals plc Richard Clemmey/ Patrick Cheetham Tel: +44 (0)845 868 4580
pat.cheetham@tertiaryminerals.com richard.clemmey@tertiaryminerals.com
Nominated Adviser & Joint Broker S P Angel Corporate Finance LLP Ewan Leggat/ Katy Birkin Tel: +44 (0)203 470 0470
Ewan.Leggat@spangel.co.uk Katy.Birkin@spangel.co.uk
Joint Broker Beaufort Securities Ltd Saif Janjua Tel: +44 (0)207 382 8300
Saif.Janjua@beaufortsecurities.com
Public Relations Yellow Jersey PR Dominic Barretto/ Kelsey Traynor Tel: +44 (0)7768 537 739
dominic@yellowjerseypr.com kelsey@yellowjerseypr.com
THANK YOU FOR YOUR TIME AND SUPPORT
The full Company presentation is available on our website: www.tertiaryminerals.com
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