1 2 1 M i n i n g I n v e s t m e n t C o n f e r e n c e C a p e To w n – F e b r u a r y 2 0 1 8 N a t u r a l l y B e t t e r G r a p h i t e BLACK ROCK MINING (ASX: BKT) BLACKROCKMINING.COM.AU
Important information The release, publication or distribution of this presentation in certain The information in this report that relates to Exploration Results and Mineral jurisdictions may be restricted by law and therefore persons in such Resource Statements is based on information compiled by John de Vries, jurisdictions into which this presentation is released, published or distributed who is a member of the AusIMM. He is an employee of Black Rock. John de should inform themselves about and observe such restrictions. Vries has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is DISCLAIMER undertaking to qualify as a Competent Person as defined in the 2004 and 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, This presentation is for informational purposes only and does not constitute Mineral Resources and Ore Reserves’. an offer to sell, or solicitation to purchase, any securities. Such Offer can be made only through proper subscription documentation and only to investors The information that relates to Mineral Resources is based on and fairly meeting strict suitability requirements. Any failure to comply with these represents information compiled by Mr Lauritz Barnes, (Consultant with restrictions may constitute a violation of applicable securities laws. In Trepanier Pty Ltd) and Mr Aidan Patel (Consultant with Patel Consulting Pty providing this presentation Black Rock Mining Limited ACN 094 551 336 Ltd). Mr Barnes and Mr Patel are members of the Australian Institute of (“Black Rock”) has not considered the financial position or needs of the Mining and Metallurgy and have sufficient experience of relevance to the recipient. Persons needing advice should consult their stockbroker, bank styles of mineralisation and types of deposits under consideration, and to manager, solicitor, attorney, accountant or other independent financial and the activities undertaken to qualify as Competent Persons as defined in the legal advisors. 2012 Edition of the Joint Ore Reserves Committee (JORC) Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr FORWARD LOOKING STATEMENTS Barnes, Mr Patel and Mr de Vries consent to the inclusion in this report of the matters based on their information in the form and context in which they Various statements in this presentation constitute statements relating to appear. intentions, future acts and events. Such statements are generally classified as “forward looking statements” and involve known and unknown risks, The Ore Reserves have been compiled by Oreology Consulting Pty Ltd, under uncertainties and other important factors that could cause those future acts, the direction of Mr John de Vries, who is a Member and Chartered events and circumstances to differ materially from what is presented or Professional of the Australasian Institute of Mining and Metallurgy. Mr de implicitly portrayed herein. Words such as “anticipates”, “expects”, “intends”, Vries is a full-time employee of Black Rock Mining and holds performance “plans”, “believes”, “seeks”, “estimates” and similar expressions are intended rights in the company as part of his total remuneration package. Mr de Vries to identify forward-looking statements. Black Rock caution shareholders and has sufficient experience in Ore Reserve estimation relevant to the style of prospective shareholders not to place undue reliance on these forward- mineralisation and type of deposit under consideration to qualify as a looking statements, which reflect the view of Black Rock only as of the date Competent Person as defined in the 2012 Edition of the “Australasian Code of this presentation. The forward-looking statements made in this for Reporting of Mineral Resources and Ore Reserves”. presentation relate only to events as of the date on which the statements are made. COMPETENT PERSONS 2
Corporate Structure ASX Ticker BKT 4.5 $0.18 Share Price $0.069 Millions 4 $0.16 Shares on Issue 1 443.7m 3.5 $0.14 3 $0.12 Options 67.2m 2.5 $0.10 Performance Rights 3.4m 2 $0.08 Market Capitalisation $30.6m 1.5 $0.06 1 $0.04 Cash on hand as at 31 December 2017* $4.12m 0.5 $0.02 Top 20 Shareholders 46.67% 0 $0.00 Major shareholders Copulos Group 24.63% *$540k received in placement post 31-Dec PFS: Aug 2017 “crawl walk run” 3 stage self funded bootstrap Quality Board & DFS contractor – CPC Reserves: 69.6mt Resources: 212 mt $90m USD capex advisors – here to engineering – track @8.5% for 5.9 mt • @7.8% for 16.5 mt $378/t USD steady stage opex build a mine record in sector of graphite • graphite $1,241 FOB basket Cashed for DFS • Steady state EBITDA $220m USD • 240 ktpa prodn ~ 98.5%-99.5% • Modest market capitalisation for a well funded advanced world class project 3
Peak capital intensity & Opex are first order issues CASH COST TO PORT $USD PER TONNE CON PEAK CAPITAL INTENSITY $USD PER ANNUAL TONNE 700 $1,800 $1,600 600 $1,400 Capex $ USD)/annual 500 Opex $ USD)/annual tonne $1,200 400 $1,000 $800 300 tonne $600 200 $400 100 $200 - $0 SYR SVN BAT WKT BKT KNL GPX VRC MNS TON BKT BAT SYR SVN WKT VRC GPX MNS KNL TON Staged bootstrap model, and access to large Competitive mines have sub high grade deposits are fundamental to or ~$400/t opex delivering low peak capital intensity with meaningful scale 4 4
Size and grade do matter RESOURCE - CONTAINED GRAPHITE VS GRADE RESERVE - CONTAINED GRAPHITE VS GRADE 18% 12% 16% SYR SYR 10% 14% Resource grade % 8% 12% BKT Reserve grade % 10% 6% BKT 8% 4% 6% Low grade 4% 2% 2% 0% 0% 0 20 40 60 80 100 120 140 - 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 18.0 20.0 Resource contained graphite – (mt) Reserve contained graphite – (mt) Reserve should have >$100/t contained value for Resource is relatively easy to add a credible investment tonnage to… BKT has large high grade deposit capable of However grade and strip ratio define supporting a high grade, long life mine with opex and capex meaningful scale 5 5
Opex sustainability ABSOLUTE STRIP RATIO (SR*GRADE*REC) VS OPEX $/T (FOB) 700 Absolute strip ratio and 600 head grade determine opex Opex $ USD)/annual tonne 500 Marginal projects BKT sustainability 400 SYR 300 Selling price is a function of 200 concentrate grade and flake size. BKT has the highest con grade of 100 the peer group, and sizing is - supported by two independent - 10.0 20.0 30.0 40.0 50.0 60.0 70.0 80.0 labs Absolute strip PRODUCT GRADE VS WEIGHTED AVERAGE FLAKE SIZE 450 The best guide to opex is absolute 400 strip - Strip ratio * grade *recovery Weighted average flake size UM 350 BKT 300 250 200 BKT is well positioned within the 150 peer group and has a credible 100 opex estimate Bubble size is annual production 50 - 94.0% 94.5% 95.0% 95.5% 96.0% 96.5% 97.0% 97.5% 98.0% 98.5% 99.0% 99.5% Concentrate Grade (%) 6 6
Normalising the peer group for concentrate grade and basket size levels the field PRICE & GRADE - NORMALISED BASKET $USD/T VS P50 CLAIMED BASKET $USD/T VS P50 SIZE Con price normalised for con grade and flake size $USD/t 3,000 3,000 2,500 2,500 2,000 BKT Claimed con price $USD/t 2,000 1,500 SYR 1,500 1,000 1,000 BKT 500 500 SYR Bubble size is annual production Bubble size is annual production - - 0 100 200 300 400 500 0 50 100 150 200 250 300 350 400 450 Weighted average flake size UM Weighted average flake size UM Market prices are available from a number of sources – Benchmark Mineral Intelligence, Bainfo and Industrial Minerals Research. Applying market prices for flake size and concentrate purity significantly tightens distribution of income assumptions 7 7
High margin NORMALISED MARGIN VS PEAK CAPITAL INTENSITY 2,000 1,800 1,600 Capital intensity $USD/ annual tonne 1,400 1,200 1,000 BKT 800 600 400 200 - - 200 400 600 800 1,000 1,200 Normalised margin USD $/t FOB After normalising for concentrate grade and flake size, BKT has the highest margin of any mine with meaningful scale 8 8
Black Rock – Mahenge Graphite Project Lowest peak capital 1800m met infill drilling complete intensity of the peer group Highest normalised margin of 500 t bulk sample complete any mine with meaningful scale Large scalable long life Pilot plant 140t Mar mine CY18 – Delivering Pilot plant 500t Very low absolute strip Aug/Sep DFS ratio – credible opex Highest grade DFS complete H2 CY 18 concentrate Low risk staged Commence FEED H2 CY18 development model Late Production Large flake size CY 19 distribution 9 9
Table of Contents 1. Black Rock Mining 2. Corporate Overview 3. 2017 – From explorer to developer 4. 2018 – Construction ready 5. The Mahenge Graphite Mine 6. Graphite Market 7. Summary 10
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