ASPIRE MINING LIMITED Becoming a new Hard Coking Coal Producer - - PowerPoint PPT Presentation

ASPIRE MINING LIMITED

Becoming a new Hard Coking Coal Producer

…..…Marching Down China’s One Belt One Road

Investor Presentation February 2018

Aspire Mining Limited Investor Presentation

NATURE OF THIS DOCUMENT

This presentation has been prepared by Aspire Mining Limited (Aspire or the Company). The information is based on publicly available information, internally developed data and other sources. By receiving this presentation, you acknowledge and represent to the Company that you have read, understood and accepted the terms of this disclaimer. It is the responsibility of all recipients of this presentation to obtain all necessary approvals to receive this presentation and receipt of this presentation will be taken by the Company to constitute a representation and warranty that all relevant approvals have been obtained.

NOT AN OFFER

This presentation is for information purposes only and do not purport to be all inclusive or to contain all information about the Company or any of the assets, current or future, of the Company. This presentation does not comprise a prospectus, product disclosure statement or other offering document under Australian law (and will not be lodged with ASIC) or any other law. This presentation also does not constitute or form part of any invitation, offer for sale or subscription or any solicitation for any offer to buy or subscribe for any securities in any jurisdiction nor shall they or any part

• f them form the basis of or be relied upon in connection therewith or act as any inducement to enter into any contract or commitment with respect to securities.

Any decision to purchase new shares must be made on the basis of each investor’s own investigations and inquiries into the Company on the basis of the information to be contained in the prospectus to be prepared and issued to eligible investors and a review of the Company’s other periodic and continuous disclosure announcements lodged with the ASX, which are available at www.asx.com.au. This presentation does not constitute an offer to sell, or a solicitation of an offer to buy, any securities in the United States. This presentation and its contents must not be distributed, transmitted or viewed by any person in the United States or any jurisdiction where the distribution, transmission or viewing of this document would be unlawful under the securities or other laws of that or any other jurisdiction.

NOT INVESTMENT ADVICE

This presentation is not investment or financial product advice (nor tax, accounting or legal advice) and its contents are not intended to be used for the basis of making an investment decision. Recipients of this presentation should carefully consider whether the company is an appropriate investment for them in light of their personal circumstances, including their financial and taxation position. This presentation does not take into account the individual investment objectives, financial situation and particular needs of each investor or shareholder. You may wish to seek independent financial and taxation advice before making any decision in respect of this presentation. Neither Aspire nor any of its related bodies corporate is licensed to provide financial product advice in respect of Aspire’s securities or any other financial products.

FORWARD LOOKING STATEMENTS

This presentation contains forward-looking information which is based on the assumptions, estimates, analysis and opinions of management made in light of its experience and its perception of trends, current conditions and expected developments, as well as other factors that management of the Company believes to be relevant and reasonable in the circumstances at the date that such statements are made, but which may prove to be incorrect.

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Disclaimer | Important Information

Aspire Mining Limited Investor Presentation

Assumptions have been made by the Company regarding, among other things: the price of coking coal, the timely receipt of required governmental approvals, the accuracy of capital and operating cost estimates, the completion of a feasibility study for the Nuurstei Project on its exploration and development activities, the ability of the Company to operate in a safe, efficient and effective manner and the ability of the Company to obtain financing as and when required and on reasonable terms. Readers are cautioned that the foregoing list is not exhaustive of all factors and assumptions which may have been used by the Company. Although management believes that the assumptions made by the Company and the expectations represented by such information are reasonable, there can be no assurance that the forward-looking information will prove to be accurate. Forward-looking information involves known and unknown risks, uncertainties, and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any anticipated future results, performance or achievements expressed or implied by such forward-looking information. Such factors include, among others, the actual market price of coking coal, the actual results of current exploration, the actual results of future exploration, changes in project parameters as plans continue to be evaluated, as well as those factors disclosed in the Company's publicly filed documents. Readers should not place undue reliance on forward-looking information. The Company does not undertake to update any forward-looking information, except in accordance with applicable securities laws.

DISCLAIMER

No representation or warranty, express or implied, is made by the Company that the material contained in this presentation will be achieved or prove to be correct. Except for statutory liability which cannot be excluded, each of the Company, its directors, officers, employees, advisers and agents expressly disclaims any responsibility for the accuracy, fairness, sufficiency or completeness of the material contained in this presentation, or any opinions or beliefs contained in this presentation, and excludes all liability whatsoever (including in negligence) for any loss or damage which may be suffered by any person as a consequence

• f any information in this presentation or any error or omission there from. To the maximum extent permitted by the law, the Company disclaims any obligation to update or keep current the information contained in

this presentation or to correct any inaccuracy or omission which may become apparent, or to furnish any person with any further information. Any opinions expressed in the presentation are subject to change without notice.

Competent Person Statements - Ovoot Coking Coal Project

The technical information contained in this presentation in relation to the JORC Code (2012) compliant Ore Reserves and JORC compliant Mineral Resources for the Ovoot Coking Coal Project is reported in the Quarterly Report for the period ended 31 December 2013. The Company is not aware of any new information or data that materially affects the information included in this presentation. All material assumptions and technical parameters underpinning the estimates in the ASX Announcement continue to apply and have not materially changed.

Competent Persons Statement – Nuurstei Coking Coal Project

The technical information contained in this presentation in relation to the JORC Code (2012) compliant Ore Reserves and JORC compliant Mineral Resources for the Nuurstei Coking Coal Project is reported in the Company’s ASX Announcement dated 13 April 2016. The Company is not aware of any new information or data that materially affects the information included in this presentation. All material assumptions and technical parameters underpinning the estimates in the ASX Announcement continue to apply and have not materially changed.

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Disclaimer | Important Information

Aspire Mining Limited Investor Presentation

• Perth based Aspire Mining Limited (ASX: AKM) has

spent over $40m acquiring and exploring the high grade Ovoot coking coal deposit in northern Mongolia.

• The very large Ovoot project requires a rail link to

existing rail network for it to be fully commercialized. Aspire has established Northern Railways LLC with Noble Group and Chinese partners to fund and build this railway.

• Aspire recently acquired a 90% stake in the Nuurstei

Project in Mongolia, a 12.8Mt(2) premium hard coking coal deposit with near term production potential.

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Coking Coal Historical Spot Price (USD) JORC Reserves & Resources

Introduction

Note 1 : Refer ASX announcement 31 July 2013 and 31 January 2014 . Note 2 : Refer ASX announcement 13 April 2016.

Deposit Probable (Mt) Marketable (Mt) Ovoot Open Pit 247.0 182.0 Ovoot Underground 8.0 6.0 Total 255.0 188.0 Deposit Measured Indicated Inferred Total Ovoot Open Pit 197.0 46.9 9.2 253.1 Ovoot Underground Nuurstei (100%)

• 0.0

25.4 4.7 2.6 8.2 27.9 12.9 Total 197.0 77.0 20.0 294.0

• Aspire in December 2017 completed a $16.5

million capital raising which has enabled it to develop the Nuurstei Coking Coal Project.

• Aspire is proposing to transform itself into a near

term producer by constructing a 1Mtpa wash plant at Nuurstei. This will facilitate the production of washed hard coking coal (HCC) in early 2019.

• Once Nuurstei is commissioned the Company

will then review smaller start up mine plans for the Ovoot Coking Coal Project.

Source: sxcoal.com

Aspire Mining Limited Investor Presentation

Capital Structure Ordinary Shares on Issue 2,520m Share Price (ASX: AKM) 1.1¢ Market Cap (undiluted) $27.2m Performance Rights 279m Options (2.5¢ strike, Aug ‘18 expiry) 187.1m Options (1.8¢ strike, Dec ‘19 expiry) 876.0m Cash (31 Dec ‘17) ~$11.1m Debt (AUD) ~$3.1m Enterprise Value ~$19.0m Top 40 ~77% Board David McSweeney Non-Executive Chairman David Paull Managing Director Neil Lithgow Non-Executive Director Hannah Badenach Non-Executive Director Gan-Ochir Zunduisuren Non-Executive Director

12 Month Share Price Performance and Volume

Company Snapshot

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# Shareholders: 2,300

61.1% 19.9% 13% 6% Others Noble Group Aspire Directors Substantial Mongolian Shareholders

Aspire Mining Limited Investor Presentation

Asset Overview and Locations

Northern Railway

• Nuurstei Coking Coal Project
• 12.9Mt(1) HCC (4.7Mt Indicated,

8.1Mt Inferred JORC Resource).

• Planned wash plant, strategic

location.

• Near-term production asset via

trucking to Erdenet rail.

• Ovoot Coking Coal Project
• 255Mt(2) high quality coking coal

reserve – second largest in Mongolia.

• Requires construction of Ovoot –

Erdenet railway.

• Northern Railways
• 80% of the Erdenet-Ovoot Railway.
• Part of One Belt One Road.
• Feasibility Study to be completed

by China Gezhouba Group, with framework in place for China Gezhouba to acquire 51% of Northern Railways.

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Note 1 : Refer ASX announcement 13 April 2016. Note 2 : Refer ASX announcement 31 July 2013 and 31 January 2014 .

Aspire Mining Limited Investor Presentation

Sequentially Putting the Assets to Work

Existing JORC Reserves and Resources

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1 | Nuurstei Coking Coal Project Ownership: 90% Conceptual Mining Study delivers ~US$13m - $14m pre-production capex, feasibility study to commence immediately post-Offer Premium HCC can be trucked ~430km to Erdenet where rail to China or Russia is available $2m 2017 drilling program with goal to increase resources and confirm spec Potential production in early 2019 2 | Erdenet – Ovoot Railway Ownership: 80%, potentially diluting to 34% Part of One Belt One Road 549km rail connection to unlock Ovoot - estimated capex of US$1.25b(1) Feasibility Study to be completed by China Gezhouba Group China Development Bank EOI received in Sept 2016 to fund 75% of total EPC cost Primary Feasibility Study completed January 2017 concludes that railway is both technically and financially feasible Connectivity with Trans-Siberian Rail to further boost returns 3 | Ovoot Coking Coal Project Ownership: 100% Globally significant high quality fat coking coal asset, strategically important blending partner with other Mongolian coking coals(4) Investigating pre-rail production and logistics options prior to Erdenet – Ovoot rail construction Deposit Probable Reserves Measured Indicated Measured + Indicated Inferred Resources Ovoot Open Pit(2) 247.0 197.0 46.9 243.9 9.2 Ovoot Underground(2) 8.0

• 25.4

25.4 2.6 Nuurstei(3)

• 4.8

4.8 8.1 Total 255.0 197.0 77.1 274.1 19.9

Note 1 : Refer ASX announcement 9 January 2017 based on 8.9bn Rmb + contingencies. Note 2 : Refer ASX announcement 31 July 2013 and 31 January 2014. Note 3 : Refer ASX announcement 13 April 2016. Note 4 : Refer ASX announcement 7 January 2015 and 29 July 2013.

Aspire Mining Limited Investor Presentation

Nuurstei Project Highlights

Ownership 90% JORC Resources 4.7Mt Indicated(2) 8.1Mt Inferred(2) Mining License MV 020941 860 ha : 30 year tenure Coal Type Hard Coking Coal (“JM” Primary Coking Coal) Distance from main town at Moron ~10km Distance to rail siding at Erdenet (by sealed road) ~430km

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• Conceptual Mining Study demonstrates a

competitive delivered cost for HCC into northern Chinese markets based on trucking of approximately ~430km to Erdenet.

• Mining license granted October 2017.
• Internal development timeline of circa 15 - 18

months.(1)

• Estimated capex of ~$US13m - $14m for production

in early 2019.

• Construction of 180tphr wash plant (1Mtpa capacity)

a key development milestone. Completion of wash plant can allow upgrade of Nuurstei and enables exploitation of nearby satellite deposits.

• $2m drilling and sampling program planned in 1Q18

with a goal to convert Inferred into Indicated resources and build mine life.

• Feasibility Study to commence in 1Q18.
• Preliminary open pit modelling indicates that a large

proportion of resources will report to a low strip ratio

• pen-pit scenario.(3) Drilling and sampling

programme needed to confirm mine plan.

Nuurstei Project

Nuurstei Coking Coal vs Traded Hard Coking Coal

Product Ad/% Vdaf/% St,d/ % G Y/m m Mt/ % CSR Nuurstei Coking Coal 9.5 28 0.7 95 29 9.0 68.0 Tianjin Mongolia Coking Coal 10.0 27 0.7 80 16.0 11.0 66.0 Tianjin Australian Primary Coking Coal 8.0 25 0.8 95.0 20.0

• 67.0

Source: sxcoal.com and Company announcement on 13 April 2016

Note 1 : Development subject to exploration results and analysis, feasibility studies, approvals, funding and Board approvals. Note 2 : Refer ASX announcement 13 April 2016. Note 3 : Refer ASX announcement 19 April 2017 – Conceptual Mining Study confirms Nuurstei Potential.

Aspire Mining Limited Investor Presentation 9

• Agreement signed to Mine and Buy coal from

neighbouring license:

• Initial agreement for 100kt or raw coal.
• Coal will be trucked 420 kms to the nearest

rail head at Erdenet then railed to China.

• Coal will be transported south to China for

washing and sale into Tianjin market.

• Will test logistics chains and establish

markets for Nuurstei Coking Coal.

• Can provide bulk trials via Russian rail to

Korean and Japanese end users.

• Agreement signed to commence 2018 drilling

and sampling programme and Feasibility Study.

• 58 hole infill and extensional programme.
• Will provide additional washability samples

for wash plant optimisation.

• Neil Wilson, ex Macmahons Mongolia appointed

Nuurstei Project Manager. Matt Crompton appointed logistics manager.

Nuurstei Project

Sealed Road : Moron to Erdenet Existing open pit adjacent to Nuurstei

Aspire Mining Limited Investor Presentation 10 Nuurstei Ovoot

Regional End Users

Aspire Mining Limited Investor Presentation 11

Commence Nuurstei Drilling DOC Coal Trial 5000t Deliveries Nuurstei Feasibility Study Commitment to Washplant Funding/Offtake Nuurstei Mining Commences Jan 2019 Jan 2018 New Producer 0.5mtpta Ovoot Early Development Mine Construction Commences Continuous DOC Mining Nuurstei Drilling Mine Construction Mining

Envisaged Nuurstei Key Milestones

Aspire Mining Limited Investor Presentation 12

100% Premium Coking Coal

Nuurstei coking coal is mid vol and low ash

Moisture Ash Volatiles Sulphur CSN CSR Max dilation Gray King G caking index Y index mm RoMax 9% 10% 25-28% 0.7 8.5 +67 +190% G9 +85 +24 1.35

Indicative Nuurstei Coal Specification1 Total Dilation vs Rank Volatile Matter vs. Dilation

Source: Company internal filings, Mongolian Mining Corp Hong Kong Listing Prospectus (dated 28 September 2010)

1 Air dried basis where applicable

Nuurstei

Aspire Mining Limited Investor Presentation 13

Ovoot and Nuurstei Quality Compared to Majors

Aspire Mining Limited Investor Presentation 14

Funding Nuurstei Mine Development

Various Sources Available In Addition to Debt and Equity markets

• EPC Funding:
• EOI received from ODDOF BHF. Private German bank that would provide funds supported by

Hermes Fund, German Government backed export credit agency. Term offtake required.

• Offtake \Coal Pre Sale:
• Selling offtake rights in exchange for investment
• Marketing agent Noble Group has agreed to assist funding through coal pre sales and a

working capital facility.

• Contractor Based Funding Options:
• A range of equipment and infrastructure expenditures can be imbedded into operating

contracts.

Aspire Mining Limited Investor Presentation

• The Erdenet – Ovoot railway is the rail project of

Mongolian registered Northern Railways LLC, a 90% owned subsidiary of Aspire.

• The 549km Erdenet – Ovoot railway is a part of

Mongolian Rail Policy included in the “Northern Rail” Economic Corridor, an initiative to establish an international economic corridor between China and Russia through Mongolia, supported by all three governments.

• In January 2017, China Railway’s First Survey and

Design Institute completed the first stage of the Rail Feasibility Study (RFS) that confirmed a US$1.25b(1) construction cost.

• China Development Bank provided an EOI to fund

up to 75% of rail funding in Sep 2016.

Northern Rail Project (Northern Railways LLC)

A One Belt One Road Initiative

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• Binding MOU signed with China Gezhouba Group (“CGGC”) in October 2017 - CGGC will complete BFS by 31 March 2018

and provides path for CGGC to elect by 15 May 2018 to fund all CPs for Rail Concession to earn a 51% interest in Northern Railways diluting Aspire’s interest to 34%.(2) Northern Rail Project Highlights

Ownership Aspire Noble CGGC Now 80% 20%

• Post CGGC electing to acquire

51% and investing US$4.5m 34% 15% 51% Concession Consortium Aspire, CGGC, CRCC and FSDI Capacity 22Mtpa to 30Mtpa Capex US$1.25b plus contingencies for Ovoot to Erdenet Concession BOT 30 years CP’s including funding to be completed 20 August 2018. Construction period up to 5 years

Note 1 : Refer to Announcement on 9 January 2017, based on 8.9bn Rmb + contingencies. Note 2 : For a full disclosure on the CGGC MOU, refer to an Announcement titled “China Gezhouba Group Agrees to Complete Bankable Feasibility Study for Erdenet to Ovoot Railway” dated 12 October 2017.

• CGGC included into Consortium Feb 2018.

Aspire Mining Limited Investor Presentation

One Belt One Road (“OBOR”)

• The

One Belt One Road project is arguably the single largest investment initiative globally.

• OBOR is the “crown jewel”
• f

Chinese Gov’t Policy designed to boost trade, connectivity and take advantage of latent industrial capacity. Mongolia in a prime position to participate.

• Erdenet – Ovoot – Arts Suuri

– Kyzyl included in One Belt One Road as the Northern Rail Corridor in June 2016.

• Provides an efficient path for

China/Europe trade and unlocks substantial coking coal deposits in northern Mongolia and Russia’s Tyuva region.

Map of Northern Corridor 16

Aspire Mining Limited Investor Presentation

Ovoot Project Highlights

Ownership 100% Aspire Mining Limited Run Of Mine (ROM) 255Mt(1) Life Of Mine (LOM) 21 years Total Saleable Product 188Mt Coal Type* 100% High Quality Coking Coal (“Fat” Coking Coal) Average Strip Ratio 7.7 BCM waste/t coal (excluding pre-strip) OPEX(2) US$83-93/t FOR China Border (first 5 years) Initial Production Up to 5Mtpa Capex(2) US$144m inc. contingency Production Potential Up to 10Mtpa

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*The Ovoot product is capable of upgrading existing Mongolian thermal,

• xidised and low quality coking coals to saleable coking coals and is

therefore of significant strategic relevance.(3)

• Aspire’s Ovoot Coking Coal Project in Northern Mongolia

is the country’s second largest coking coal Reserve, after the Government owned Tavan Tolgoi Mine.

• A Mining License (MV 017098) over the Ovoot Project

was granted in August 2012.

• Aspire

plans to develop the Ovoot Project during construction of the Erdenet – Ovoot railway with first production to coincide with rail commissioning.

• Initial production from the Ovoot Project could commence

at 5Mpta, mining a high proportion of low ash bypass coal – with upgrades to infrastructure, the mine is capable of producing up to 10Mtpa of high quality coking coal.

• While large scale development requires rail connection,

there are smaller scale development options possible

• nce the Nuurstei wash plant has been commissioned.

Ovoot Project

Above: Ovoot coking coal

Aspire will look to fund the majority of the required US$144m pre-production capex at Ovoot from a combination of funding sources including but not limited to coal pre-sales, offtake commitments, joint venture and contractor funding.

Note 1 : Refer ASX announcement 31 July 2013 and 31 January 2014. Note 2 : Refer ASX announcement 13 August 2013. Note 3 : Refer ASX announcement 7 January 2015 and 29 July 2013.

Aspire Mining Limited Investor Presentation

• Aspire’s asset base remains far superior to those of its more generously valued ASX peers with offshore projects.
• Aspire is working to become a near-term coking coal play with a wealth of blending and transportation opportunities and the
• nly commercial scale wash plant in northern Mongolia.
• The Nuurstei exploration program, designed to increase mineral resources and convert inferred resources to indicated will

provide data for a feasibility study in Q2 2018, anticipated to yield a potentially profitable mining scenario on production in early 2019.

• Aspire is one of few ASX listed companies that maintain enormous leverage to China’s One Belt One Road initiative.

Partnering with Chinese SOEs, China Gezhouba Group and China Railway Construction Corp demonstrates the company’s long term strategic potential.

• A path to production and delivery of profitability should see a re-rate of Aspire’s share price.

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Aspire Transformed

“Aspire is aiming to become a profitable miner through development of the Nuurstei Coking Coal Project thereby building a market capitalisation to facilitate the development of the world class Ovoot Project ”

Aspire Mining Limited Investor Presentation 19

Aspire Mining Limited ABN: 46 122 417 243 ASX Code: AKM Web: www.aspiremininglimited.com Contact Person: David Paull - Managing Director

Contact Details

Offices:

AUSTRALIA 69 Kewdale Road Welshpool, WA6106 Western Australia Tel: +61 8 9287 4555 MONGOLIA Sukhbaatar District, 1st Khoroo Chinggis Ave-8 Altai Tower, 3rd Floor, Room 302 Ulaanbaatar Tel: +976 7011 6828