CORPORATE PRESENTATION Q4 2016
EXECUTIVE SUMMARY ALUFER IS ONE OF THE MOST ATTRACTIVE, SIGNIFICANT NEAR-TERM BAUXITE PRODUCERS IN GUINEA High quality resource - 146Mt @46% Total Al 2 O 3 , 40.5% Available Al 2 O 3 , 1.7% Reactive SiO 2 15km from the coast requiring minimal infrastructure and reducing capital costs Low cost and quick to production: • Simple logistics • 18 month construction period with production targeted H2 2018 • 15 year LOM, with initial production rate of 5.5Mtpa and expansion to 10mtpa Responsible, sustainable mining: • Using global best practise mining methods • Environmental programme adheres to IFC and Equator Principles Fully licenced and formally documented: • Mining Convention, ‘Project of National Interest’, DFS and ESIA Highly experienced management team with particular expertise in African bulk commodity projects Additional 2.5 billion tonnes of bauxite resource at Labé 1 including 583Mt at 50% Al 2 O 3 1 See appendix for details 2
BAUXITE OVERVIEW Bauxite is the main commercial mineral from which aluminium oxide is extracted, which in turn is smelted to form aluminium metal: 5t bauxite (ore) 2t alumina (refinery) 1t aluminium (smelter) Typically, a bauxite resource contains 30-60% alumina (Al 2 O 3 ), and occurs as two main types: trihydrate ("low temperature") bauxite and monohydrate ("high temperature") bauxite The aluminium industry is no longer as integrated as it used to be - pricing power is shifting upstream to alumina and bauxite producers Aluminium demand, however, drives alumina and bauxite growth - medium to long term demand is still strong Demand continues to grow in key sectors including transportation, construction, power, packaging and consumer products 3
METAL USAGE IS LINKED TO ECONOMIC DEVELOPMENT Iron ore and copper usage maturing following rapid industrialisation in China and other emerging markets Aluminium demand in China is still in its early stages with saturation not expected to match current levels of steel or copper for 30 years As an economy matures, requirements shift from building and infrastructure development to consumer goods, vehicles, transport, infrastructure etc The urbanisation of China is forecast to shift toward internal consumption which will benefit demand for aluminium. Chinese policy supports this 4
CHINA FUNDAMENTALLY CHANGED THE ALUMINA INDUSTRY China’s aluminium production up 400% in last 15 years HISTORIC ALUMINA CAPACITY EXPANSIONS (MTPA) 1 China began importing significant amounts of alumina to supply rapidly expanding smelting industry 120 To avoid reliance on imported alumina China began to develop its own domestic alumina refining capacity 100 Since 2002, China has developed over 50Mt of alumina refining capacity 1 Chinese alumina production was based on two 80 approaches: • Development of merchant refining capacity in 60 Shangdong based on imported Indonesian bauxite • Processing of domestic ore 40 New refining capacity has lead to record increase in bauxite demand and imports 20 Declining quality of domestic bauxite in China and diminishing global reserves of high quality ore • Impetus for refiners and smelters to secure a - long term supply of ore 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 China RoW 1 Source: World Aluminium 5
BEL AIR - MARKET OPPORTUNITY China is buying low quality material from India and Malaysia at high prices Malaysia recently banned exports for 3 months but even when exporting is a short term solution Guinean bauxite is some of the highest quality in the world There is a significant opportunity for Bel Air to enter the market as a premium quality bauxite Refineries are prepared to pay a premium for high quality Material from Brazil, Guyana, Ghana and Guinea can command up to 50% more than the market price BEL AIR BAUXITE AvAl 2 O 3 : >40% RxSiO 2 : <2% AvAl 2 O 3 : RxSiO 2 ratio: >23 6
BAUXITE QUALITY CONSIDERATIONS BEL AIR BAUXITE IS AMONG THE HIGHEST QUALITY MATERIAL IN THE MARKET Customer criteria Desirable Bel Air Impact on customer if inadequate Bel Air spec characteristics assessment Min Target Max • Increases capital operating costs for High total mining, transport, processing and mud 40% >45% NA 46% alumina disposal • Increases the % of untreatable material High extractable per tonne of ore that must be 36% >40% NA 40.5% alumina processed and disposed of • Increases caustic usage Low total silica NA <2% 10% 4.5% • Increases caustic usage Low reactive NA <2% 3% 1.7% silica • Reduces extractable alumina units • Increases shipping costs Low moisture NA 6% 18% 9.6% • Increases fuel consumption within refinery • Increase operating costs by reducing Low organic plant efficiency and lowers product NA <1.0% 2.0% <0.1% carbon quality Low other • Many other ores have high levels of deleterious calcium oxide, lithium, sulphur elements Poor vs Target Target Excellent vs Target 7
DFS OVERVIEW EXTENSIVE DFS VALIDATED LOGISTICS, CONSTRUCTION, AND MINING PLANS, AS WELL AS ECONOMIC MODEL Completion of the DFS has ensured: • Pit to Ocean Going Vessel (OGV) simulation and integration • Optimisation / Value engineering where applicable • ESIA and biodiversity planning and mitigation • Construction readiness • Construction permit applications underway Control of simple logistics solution • Short haul, causeway conveyors, transhipment barging and onsite infrastructure Low operating cost following optimisation of mine plan • Minimised strip ratio, limited re-handling and automated materials handling set-up Minimum 15 years mine life with initial production rate of 5.5 Mtpa Economically robust under multiple bauxite pricing cases 8
OPERATIONAL SUMMARY Direct Shipping Ore will be mined from a total of six pits • Minimum of two areas will be in operation at the same time • Increases production flexibility as well as adequate ore blending capability Open strip mining will use surface miners Material will then be transported via truck to the ROM tip Ore will then be stockpiled and handled via conveyor over a rubble causeway and loaded onto barges Transhipment handled via self-propelled barges and transhipment vessel to OGVs 9
MINING METHOD SURFACE MINING – LOW OPEX, SIMPLE HANDLING, HIGH EFFICIENCY Benefits vs drill and blast: Sustainable, reduces loss and dilution and no high grading Single phase – no drilling, explosives, crushing Significantly reduces strip ratio, waste handling and haulage costs • Minimises footwall waste Improves in pit ground conditions which enables multi-purpose haul fleet selection Lower fuel consumption Current surface mining operations Reduces bulking factor for improved haulage Paragominas, Brazil efficiencies Less dust creation Rusal, Guinea Iron ore, Western Australia 10
MATERIALS HANDLING PROJECT ADVANTAGED BY PROXIMITY TO COAST AND CONTROL OF DEDICATED LOGISTICS AND FACILITIES Materials handling Simple, efficient materials handling infrastructure Automated, low opex approach Premium on high reliability equipment, eg. apron feeders, telestacker Inherent redundancy and catch-up ability De-linking of mining process (continuous) and barge loading (batch process) Process ROM ore will be delivered to the bin using 40m³ side tipping trucks This then withdrawn from the ROM bin using two apron feeders (2,000tph design rate) and conveyed to the ore stockpile Ore reclaimed from stockpile by two apron feeders and conveyed along jetty to barge loader Chemical dust suppression agent used to minimise environmental impact SCADA control included 11
ONSHORE INFRASTRUCTURE SELF SUFFICIENT INFRASTRUCTURE WITH RAPID MOBILISATION AND MINIMAL COST Self contained camp and operations centre will be built at coast Simple, modular, pre-fabricated package systems Quality designed to sustain life span of 15 years Water wellfields already identified and designed • Mine camp area – near Bel Air Hotel • Quarry and Export Facility infrastructure area • MSA and Mining Areas Self-generating power from high-speed diesel generators Dedicated communications and internet Contained sites = improved safety and security 12
MARINE INFRASTRUCTURE TRANSHIPMENT IS THE OPTIMAL METHOD FOR BULK EXPORT Rubble mound causeway Will provide access from the shore to water depth suitable for a barge load-out berth Simple geotechnical structure placed on bedrock Core and armour material will be supplied from quarries owned by Alufer Scale model being constructed and tested to confirm the design criteria. (Please see Appendix for causeway simulation photos) Block wall retaining structure at loading point Due to barge selection the berth length is significantly reduced Lock wall berth structure also preferred as it does not require piling during the construction phase 13
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