LYNAS CORPORATION ANNUAL GENERAL MEETING 2018 27 November 2018 1
Disclaimer This Presentation has been prepared by Lynas Corporation Limited (ABN 27 009 066 648) (Lynas or financial position and performance are also forward-looking statements. Forward-looking statements, the Company) This Presentation contains summary information about Lynas and its subsidiaries opinions and estimates provided in this Presentation are based on assumptions and contingencies (Lynas Group) and their activities current as at the date of this Presentation. The information in this which are subject to change without notice, as are statements about market and industry trends, Presentation is of general background and does not purport to be complete or to comprise all the which are based on interpretations of current market conditions. Such forward-looking statements information that a shareholder or potential investor in Lynas may require in order to determine including projections, guidance on future earnings and estimates are provided as a general guide whether to deal in Lynas shares. It should be read in conjunction with Lynas Group’s other periodic only and should not be relied upon as an indication or guarantee of future performance. There can and continuous disclosure announcements lodged with the Australian Securities Exchange (ASX), be no assurance that actual outcomes will not differ materially from these forward-looking which are available at www.asx.com.au. This document is not a prospectus or a product disclosure statements. statement under the Corporations Act (Cth) 2001 (Corporations Act) and has not been lodged with Investment Risk and other risks ASIC. An investment in Lynas shares is subject to investment and other known and unknown risks, some Not investment or financial product advice of which are beyond the control of Lynas Group, including risk factors associated with the industry in This Presentation is for information purposes only and is not financial product or investment advice which Lynas Group operates, such as: nature of mineral exploration and production; mineral and ore or a recommendation to acquire Lynas shares and has been prepared without taking into account reserves; operations risks; project development risks; market price and demand risk; credit and the objectives, financial situation or needs of individuals. Before making an investment decision, market risks; regulatory, political and environmental risks; tax and other risks generally relating to prospective investors should consider the appropriateness of the information having regard to their equity investment. own objectives, financial situation and needs and seek financial, legal and taxation advice Not an offer appropriate to their jurisdiction. Lynas is not licensed to provide financial product advice in respect of Lynas shares. Cooling off rights do not apply to the acquisition of Lynas shares. This Presentation does not constitute an offer to sell, or the solicitation of an offer to buy, any securities in the United States. Any securities described in this Presentation have not been, and will Financial data not be, registered under the U.S. Securities Act of 1933 (the “Securities Act”). All dollar values are in Australian dollars (A$) unless stated otherwise and financial data is presented Disclaimer within the financial year end of 30 June 2018 unless stated otherwise. Any pro forma historical financial information included in this Presentation does not purport to be in compliance with Article Lynas and its affiliates, officers, employees, agents and advisers have not authorised, permitted or 11 of Regulation S-X of the rules and regulations of the US Securities and Exchange Commission. caused the issue, dispatch or provision of this Presentation to any third party. Lynas, its related bodies corporate and their respective affiliates, officers, employees, agents and advisers to the Future performance maximum extent permitted by law, expressly disclaim all liabilities in respect of any expenses, Past performance information given in this Presentation is given for illustrative purposes only and losses, damages or costs incurred by you as a result of the information in this Presentation being should not be relied upon as (and is not) an indication of future performance. This Presentation inaccurate or due to information being omitted from this Presentation, whether by way of negligence contains certain “forward - looking statements”. The words “expect”, “should”, “could”, “may”, “will, or otherwise, and make no representation or warranty, express or implied, as to the fairness, “predict”, “plan”, “scenario”, “forecasts”, “anticipates” “estimates” and other similar expressions are currency, accuracy, reliability or completeness of information. The information in this Presentation intended to identify forward-looking statements. Indications of, and guidance on, future earnings and remains subject to change without notice. 2
Lynas is a proven and profitable producer of specialty Rare Earth Materials Key Metrics ASX Ticker LYC ISIN AU000000LYC6 Shares Outstanding as at 26 665,681,660 November 2018 Cash Balance (30 September A$65.8M 2018) Debt as at 26 November 2018 US$150m JARE US$15.24m Conv Bond • The only miner and processor of Rare Earth materials outside China and the second largest producer of Neodymium- Praseodymium (NdPr) in the world • Comprehensive approach to safety and sustainability, complying with all licence conditions in both locations • Quality, long term relationships with key customers around the world 3
Delivering value • 2011: The investment world discovers LYNAS ENTERPRISE VALUE Rare Earth 4000 3500 • 2012: Lynas faces regulatory hurdles in Malaysia 3000 • 2013-2016: High debt, low cash AUD millions 2500 • US $425m debt 2000 Debt • A $4.1m operating cash flow Market Cap 1500 • 2017: Lynas comes of age 1000 • 500 2018: Lynas NEXT growth project Improved debt and cash position 0 • US $165m debt 2010 2011 2012 2013 2014 2015 2016 2017 2018 • FY FY FY FY FY FY FY FY FY A $118.5m operating cash flow 4
Record Results in FY18 Production Volume REO t NPAT (A$m) Record Profit 20,000 17,753 60 16,003 18,000 50 16,000 NPAT $53.1m 12,631 14,000 40 12,000 EBIT $81.0m 8,799 30 10,000 8,000 EBITDA $121.9m 20 6,000 10 4,000 5,444 5,223 2,000 3,896 2,258 0 0 FY17 FY18 FY15 FY16 FY17 FY18 -10 NdPr (RTS) Others (RTS) EBITDA (A$m) Cash Flow (A$m) Sales Revenue (A$m) 140 (excl. AELB, Interest & Debt payments) 450 121.9 140 400 120 120 350 100 100 300 80 80 250 60 60 200 40 150 40 29.4 20 100 20 0 50 FY15 FY16 FY17 FY18 0 -20 0 FY17 FY18 -40 FY15 FY16 FY17 FY18 -60 5
Our Sustainability Plan Supply Chain Financial Full mine-to- Sustainable magnet balance sheet traceability Profitable operations R&D Environment Successful Minimise air and Lynas 360⁰ water emissions innovative Sustainability products and Manage/develop applications solid residues CSR Resources Diversity Life Cycle Labour Conditions Assessment of Develop people resource Health & Safety consumption Social/Community Reduce, Reuse, Recycle 6
Lynas NEXT: Key achievements ✓ Productivity 600 tonnes per month ahead of schedule in September 2018 ✓ Improved recoveries, Cracking & Leaching efficiencies, Product Improvements Quality ✓ Upgraded Mt Weld Resources and Reserves Statement Resource and Reserves confirmed 25+ year mine life at Lynas NEXT rates ✓ Increased sales revenues and improved margins due to Financial production improvements ✓ Progressed new application development; Commenced Market growth partnerships with key companies and universities 7
Lynas NEXT: How we did it Not just on time and on budget • Executing while still producing • Delivered by an in-house Project Team with intimate understanding of the process • New design off-gas ducting Clearly understanding what is needed and that will last what is not • Enhanced in-house capability Improved waste gas scrubbing to meet new emission limits Value for Money • Reusing, reconfiguring and upgrading Addressing key losses at existing assets where ever possible higher rates • Improving sustainability and compliance • Improving reliability and performance of existing equipment • Addressing recovery loss areas Additional production of Blending to ensure separated La and Ce homogeneity of final products 8
Serving high-growth markets with Sustainable Rare Earths • Reliable supplier of high quality products • Growing in high-value segments • Ensuring sustainability with Life Cycle Assessments from mine to magnet “Lynas is perceived by end users as THE sustainable supplier they need to secure the supply chain now and for the foreseeable future.” 9 Pol Le Roux, Vice President Sales & Marketing
A Virtual Tour of our operations 10
Mt Weld An assured supply of rare earth concentrate Mine Planning Exploration Mining Crushing, Screening, Blending Rougher Flotation Cleaner Flotation Grinding Thickening Filtration Transport Bagging 11
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