Building a Strategic Position in the Fluorspar Sector Company - - PowerPoint PPT Presentation
Building a Strategic Position in the Fluorspar Sector Company - - PowerPoint PPT Presentation
Building a Strategic Position in the Fluorspar Sector Company Presentation March 2016 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. 21 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. 34 years’ experience in mineral exploration. 29 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. 22 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. 42 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 of 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 basic 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
- Add value to the Group’s mineral projects through the
discovery and development of mineral resources and to become a reliable long-term and competitive supplier of high quality fluorspar to world markets.
Company’s Strategy
- 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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500000 1000000 1500000 2000000 2500000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
China Acidspar Export vs Internal Consumption 2005 - 2014 (t)
China Internal Consumption China Export
37% 12%
100 200 300 400 500 600 Price US$/t
Average Acid-spar Prices 2000-2016 US$/t
FOB China CIF Rotterdam
Fluorspar Market
- Major Producing regions: China (>50% of the world’s
production); Mexico; Mongolia/CIS; South Africa; Vietnam
- China exports have declined substantially since 2000
driven by increasing internal demand and production/export restrictions – potentially a future net importer
- Acid-spar prices have declined since late 2012 but the
long-term trend has been upwards with prices increasing >2.5 fold since 2000
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- N. America & Europe – largest acid-spar consumers outside China – potential risk of security of supply
- No large scale commercial alternative or recycling
- Fluorspar is classified as a critical raw material by the European Commission
- USA considers fluorspar as a strategic mineral – 100% net import reliance
- Key western acid-spar consumers: Chemours, Honeywell, Solvay, Lanxess, Boliden, Fluorsid, DDF,
Fluorchemie
Source: Industrial Minerals Magazine, Roskill, CRU, UN, USGS, CCM, Company Data
Strategic Project Locations and Performance
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- Three 100% owned fluorspar projects strategically
located in the USA and Europe
- Maintained momentum with the development of its
projects through the mining cycle in line with its aims and strategy
- The Company has continued to increased its fluorspar
Mineral Resource asset since 2011 – currently 13.1 million tonnes of contained fluorspar (JORC compliant)
Sweden - 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
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Post Scoping Study – Key Developments
- 46 diamond core drill holes
- 28% increase in Mineral Resource compared
with Scoping Study – JORC Classified
Positive Scoping Study – Scott Wilson
- New Bulk Rail Terminal constructed
– 25km from project site
- Waste : ore strip ratio reduced
- 2.2t:1t to 0.8t:1t
- Potential step-change for scale of
mineralisation, open laterally in all directions
Classification Million Tonnes (Mt) Fluorspar (CaF2%) Indicated 25 10.28 Inferred 2.7 9.57 Total 27.8 10.21
Tonnage/grade in pit (non-JORC) 18mt @12.3% CaF2 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 Average Annual T/O > US$ 34 million Pre-Tax NPV (8% coc) US$ 33 million IRR (100% Equity) 24% Payback Period < 3 years
Storuman Fluorspar Project
2014 & 2015 Milestones
- Preparation and submission of Exploitation (Mine) Permit
application – Completed Q2 2014
- Ongoing Preliminary Feasibility Study (PFS) metallurgical
testwork, optimisation and constructive end user discussions and plant visits
2016 Target Milestones1
- Exploitation (Mine) Permit – 25 year Permit granted on 18
February 2016
- Detailed Preliminary Feasibility Study (PFS) metallurgical
testwork completion:
- Batch and locked cycle tests to optimise balance between recovery
and grind size
- Finalise PFS process flow sheet design
- Reactivity testwork – suitability to produce Hydrogen Fluoride
- Update Scoping Study - evaluation for processing and mine
planning to optimise & execute the final elements of the PFS
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Note 1: All target schedules are subject to change, funding and successful completion of each phase of work
Storuman Fluorspar Project
Storuman Target - 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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Norway - 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
- 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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Milestones Achieved
- Positive Scoping Study (Wardell Armstrong International) – 2012.
Classification Million Tonnes (Mt) Fluorspar (CaF2%) Inferred 4 24.6
- Project development currently deferred –
Storuman more advanced
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 Average Annual T/O >US$ 46 million Pre-Tax NPV (10% coc) US$ 31.6 million US$ 52.2 million IRR (100% Equity) 20.20% 24.10%
USA - MB Fluorspar Project
Nevada - Most Favourable Mining Jurisdiction in the USA
- Located 19 km SW of Eureka, Eureka County, Nevada
- 46 Mining Claims >2,800 acres
- 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
- >80% of Eureka County population employed in mining
industry
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MB Fluorspar Project
2013 – 2015 Milestones
- Phase 1&2 drilling programmes
- 26 holes, 3220 metres
- Large Maiden JORC Compliant Mineral Resource Estimate –
completed April 2014.
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- Phase 3 drilling programme
- 9 percussion holes, 2516 metres
- Completed November 2014
- Large upgraded JORC Compliant Mineral Resource
Estimate – completed June 2015
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 Classification Million Tonnes (Mt) Fluorspar (CaF2%) Indicated (8% CaF2 cut-off) 8.9 10.3 Inferred (8% CaF2 cut-off) 29.5 10.4 Total 38.4 10.4
MB Fluorspar Project
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MB Fluorspar Project
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2015 & 2016 Milestones
- 166 line-km ground magnetic survey completed
- Phase 4 drilling programme - Highlights
- 4 holes, 1,553 metres
- Hole 15TMBRC036 – 484m:
- 89.91m grading 12.02% CaF2 from 120.40m depth
(total of 8 significant fluorspar intersections)
- Including 31.99m grading 16.74% CaF2 from 150.88m
(total of 6 higher grade intersections above 15% CaF2)
- Molybdenum 6.1m @ 0.14 MoS2 at the base of hole
- Hole 15TMBRC038 – 346m:
- 22.86m grading 11.47% CaF2 from 74.68m depth
- Copper 1.52m @ 0.11% Cu at the base of hole
- Hole 15TMBRC039 – 523m:
- 137.16m grading 11.54% CaF2 from 53.34m depth
(total of 16 significant fluorspar intersections)
- Including 32.00m grading 15.81% CaF2 from 185.93m
(total of 5 higher grade intersections above 15% CaF2)
MB Fluorspar Project
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2016 Target Milestones2
- Phase 4 Drilling completed
- 4 holes, 1553 metres
- Progress onto next phases of development:
- Metallurgical testwork
- Economic modelling
- Scoping Study
- Mine Permit planning
Note 2: All target schedules are subject to change, funding and successful completion of each phase of work
- Kaaresselkä & Kiekerömaa - Gold, Finland
- Kaaresselkä licence renewal granted in March 2013, expiry March 2016 – renewal application
submitted
- Kiekerömaa licence renewal granted in April 2014, expiry April 2017
- No material work planned, continue to seek potential partners or buyers
- Rosendal Tantalum Project, Finland
- Exploration Licence expired – renewal application submitted
- No material work planned, continue to seek potential partners or buyers
- Ghurayyah Tantalum–Niobium-Rare-Earth Project, Saudi Arabia
- Re-issue of Exploration Licence pending with Deputy Ministry for Mineral Resources in Saudi Arabia
Non-Core Projects
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Investment Case
Tertiary Minerals plc - The only UK public traded company offering an exciting exposure to
fluorspar – a critical and strategic mineral with the USA and Europe facing a potential risk of security of supply
- Three 100% owned fluorspar assets strategically located in the USA and Europe
- 13.1 million tonnes contained fluorspar (CaF2) resources (JORC classified)
- No large scale commercial alternative or recycling
- Broker Research suggests shares are undervalued3
Europe – Key market, Fluorspar Critical Raw Material Classification (EC), net importer
- Storuman Fluorspar Project (Sweden) Scoping Study shows robust economics
- 25 Mine Permit granted on 18 February 2016
- Lassedalen Fluorspar Project (Norway) JORC Resource Estimate at Lassedalen in Norway
adds 1 Mt fluorspar to 3Mt Storuman resource - second European fluorspar project in pipeline
USA – Key market, 100% net import reliance, strategic mineral
- MB Fluorspar Project, Nevada, USA – June 2015 large upgraded JORC Mineral Resource
Estimate – 86.4 Mt grading 10.7% fluorspar (CaF2)
- Phase 4 drilling recently completed
- Next steps – Economic & technical feasibility, permit planning
21 Note 3: Previous price target estimates are no indication of future prices SP Angel 10.6p per share 13 March 2015 BROKER RESEARCH - Latest Price Target
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/ Tercel Moore Tel: +44 (0)203 470 0470
Ewan.Leggat@spangel.co.uk Tercel.Moore@spangel.co.uk
Joint Broker Beaufort Securities Ltd Jon Belliss/ Elliot Hance Tel: +44 (0)207 382 8300
Jon.belliss@beaufortsecurities.com elliot.hance@beaufortsecurities.com
THANK YOU FOR YOUR TIME AND SUPPORT
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