Diggers & Dealers Mining Forum August 2019 Investment Rationale - - PowerPoint PPT Presentation

Diggers & Dealers Mining Forum August 2019

Investment Rationale

2 | ASX : MMI | August 2019

Strongly Growing Market Long Life Mine Enduring Geographical and jurisdictional Competitive Advantage Generating Cash Revenue Earning Simple Project – Low CAPEX & OPEX

$0.05 $0.10 $0.15 $0.20 $0.25 $0.30 $0.35 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19 Jul-19

19.8% 15.9% 10.2% 5.6% 6.0% 42.5%

3 | ASX : MMI | August 2019

Share Register

Greenstone Balanced Property BlackRock DADI Other Institutions Other Shareholders

Share Price (31 July 2019)

A$0.135

Shares on Issue

1,383.4M

Market Capitalisation

A$187.0M

Options Unlisted

30.1M

Cash and Receivables (30-June-2019)

A$29.5M

Debt Facilities

A$42.1M

Enterprise Value

A$199.6M

Capital Structure Share Price Performance

Price ($) Volume (m)

Board of Directors

Independent Chairman Stephen Everett Managing Director & Chief Executive Officer Simon Finnis Non-Executive Director Mark Sawyer Independent Non-Executive Director Philip Hennessy Independent Non-Executive Director Fiona Murdoch

Share Price & Corporate Structure

Share Price Performance

4 | ASX : MMI | August 2019

Key Ingredient for Manufacturing Aluminium

Key Bauxite Value Drivers

Grade Alumina content ranges from 30% - 65% and silica ranges from 2% - 30% Location Proximity to buyer, supply reliability and sovereign risk

1 tonne aluminium 2 tonnes alumina

= =

4-6 tonnes bauxite

Bauxite is the Primary Ore of Aluminium

5 | ASX : MMI | August 2019

86% 84% 81% 76% 74% 72% 69% 63% 62% 56% 55% 52% 47% 44% 42% 41% 40% 40% 25.8 27.2 28.6 31.2 33.5 35.3 37.5 41.8 44.2 45.9 49.7 51.6 56.5 62.6 67.0 70.4 75.3 79.4 14% 3.5 16% 4.2 19% 5.4 24% 7.4 26% 8.8 28% 9.7 31% 11.7 37% 15.4 38% 16.8 44% 20.0 45% 22.4 48% 24.6 53% 30.1 56% 35.3 58% 38.7 59% 41.7 60% 44.9 60% 47.9 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Percentage of China Al Capacity in World Total ROW Al Capacity(MT) World Total Al Capacity(MT) China's Al Capacity(MT)

Source: IAI, CM Analysis

China vs ROW Primary Aluminium Capacity 2000 – 2018 (Mtpa)

Source: CM Group

6 | ASX : MMI | August 2019

Source: CMGroup

China Demand Outlook Remains Strong

Source: CM Group

7 | ASX : MMI | August 2019

▪

Guinea now largest supplier to China. But 98% of exports are from the Chinese- controlled SMB-WAP

▪

Australia's supply is steadily growing, up 4.1Mt (16%) in 2018 to 29.6Mt

▪

Indonesia & Malaysia now less relevant

▪

Ocean freight on an upward trend

▪

2019 Bauxite imports estimated at 95.0Mt

Source: China Customs, CM

China’s 2018 Bauxite Imports

82.6Mt

0.8% India 0.7% Malaysia 2% Solomon Is

Australia

Indonesia 0.1% Turkey

9%

0.5% Montenegro 2% Brazil`

36%

46%

Guinea

0.7% Vietnam 0.7% Ghana 12% Jamaica

8 | ASX : MMI | August 2019

Source: CMGroup

Alumina Producers China

Main Bauxite Consuming Provinces

5. Guizhou (10MT) 4. Guangxi (18MT) 3. Henan (27MT) 2. Shanxi (49MT)

• 1. Shandong (65MT)

Liaoning Province and Inner Mongolia

Emerging as major new players, with several projects planned or under construction

5 4 2 1 3

Source: CM Group

◼

China imports continue to increase with total 2018 imports exceeding 82M WMT

◼

Bauxite prices in an upward trend with CBIX bauxite index currently US$52.60 DMT (dry metric tonne)

◼

Strong demand for Metro’s bauxite from Chinese inland Refineries as domestic bauxite supply has been hindered by resource depletion, recent mine closures and environmental audits

9 | ASX : MMI | August 2019

Source: CM GROUP

CBIX Bauxite Index – Last 12 Months

Bauxite Market & Price Outlook

40.0 42.0 44.0 46.0 48.0 50.0 52.0 54.0 56.0 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19Mar-19 Apr-19 May-19 Jun-19

CBIX Bauxite Index – Last 12 Months

China Bauxite Consumption

Source: CM Group

50 100 150 200 250

2015A 2016A 2017A 2018A 2019F 2020F 2021F 2022F 2023F 2024F 2025F

China Bauxite Consumption (MT) Domestic Source Imported Source

10 | ASX : MMI | August 2019

◼

DSO - virtually no overburden, no blasting, no engineering or pit design required, no processing

◼

To ensure quality there are sophisticated processes around mine planning and quality control.

Bauxite Hills Project

Clear vegetation & remove overburden Return overburden & replace topsoil - then re-vegetate Overburden (~0.5m) DSO Bauxite Horizon (1.5-3m) Ironstone Mottled Zone Haul ore 5 – 22km to stockpile and barge loading Load bauxite on bulk carrier for transport to China Tranship ore down Skardon River

11 | ASX : MMI | August 2019

Metro’s Road to Production!

Gained control of Bauxite Hills early 2015 Financed and constructed all in 2017 – CAPEX A$37M Takeover of Gulf – doubled Resource & Reserve – Dec 2016 July 2019 – 3Mt Mined Dec 2018 – 3.5Mt Expansion April 2018 – 1st Production July 2019 – 18.8% increase in Reserve

12 | ASX : MMI | August 2019

$23.7 $24.7 $24.2 $24.3 $22.7 $25.0 $23.8 $15.7 $53.3 $60.7 $57.0 $52.3 $46.4 $49.7 $48.1 $40.0

Sept Qtr Dec Qtr 6-months to Dec-18 BFS Estimate (Year 1)

Site Costs Non-Site Costs

• Avg. Price Received

(Price Received/Operating Cost A$/WMT)

Revenue $93.2M

2018 2H Operating Costs & Realised Prices

Mined Shipped June Qtr Sept Qtr Dec Qtr Mined Shipped

2018 2H Results

Mine EBITDA $13.1

445 2047 859 743 Bauxite Tonnes (WMT)

399 2,037 822 816

2018FY Production and Shipped Bauxite

2018 Production Guidance Achieved

13 | ASX : MMI | August 2019

✓ Add Jaw Crusher to treat oversized material ✓ Increase the current haulage fleet ✓ Increase the screening capacity at the Port ✓ Supplement the marine fleet and infrastructure

2,047 3,000 3,000 500 2018 Actual 2019 2019 Expanded

Bauxite Tonnes (WMT)

2019 Production Expansion

2019 Expansion to 3.5Mt

Capital Cost $6.8M

Summary of Key Improvements

124 151 329 311 427 374 443 463 1323 1299 Bauxite Tones (WMT) 14 | ASX : MMI | August 2019

Revenue $48.4M

* Note: Non-Site Costs refers to ocean freight and royalties

Mine EBITDA $9.1M

2019 June Qtr Results

$35.51 $21.94 $19.87 $23.47 $23.05 $22.76 $23.03 $22.94 $60.21 $54.86 $58.12 $57.26

$- $10.00 $20.00 $30.00 $40.00 $50.00 $60.00 $70.00

April May June June Qtr

A$/WMT

Site Costs Non-Site Costs Average Sales Price Received

$58.56 $42.90 $46.41 $44.70

2019 June Qtr Operating Costs & Realised Prices

April June YTD May

2019 YTD Production and Shipped Bauxite

July

▪

Shipped

▪

Mined

15 | ASX : MMI | August 2019

Future Growth

* Subject to Board Approval

Extended Mine Life

Strong Stage 2 Production Expansion

Steady State Production Post Stage 2 Expansion Based on Current Mine Life Stage 1 Stage 2*

Bauxite Tonnes Million (WMT) 1 2 3 4 5 6 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037

2019 Expanded Production

Resource down 6.4Mt (4.6%) to 138.2Mt (dry) Reserve up 17.3Mt (18.8%) to 109.5Mt (wet) Stage 2 Expansion DFS update ▪ Depletion by mining ▪ Conversion of existing resources ▪ Moisture assumption adjustment based on operational experience ▪ Definitive Feasibility Study largely complete ▪ Further detailed work on the floating ship-loader actioned ▪ Expansion sets mine up for next 15 years & vital to take time for informed decision ▪ Results within August ▪ Depletion by mining ▪ Adjustment to dry bulk density ▪ Measured category up 42.8%

16 | ASX : MMI | August 2019

◼ Relationship continues to

grow and flourish

◼ Metro a key part of

Northern Cape York Community

◼ Current Indigenous

employment is 39% (target 20%)

◼ Business opportunities for

indigenous groups being assessed with one already in place

Positive Community Relationships

Investment Rationale

17 | ASX : MMI | August 2019

Strongly Growing Market Long Life Mine Enduring Geographical & jurisdictional competitive advantage Generating Cash Revenue Earning Simple Project – Low CAPEX & OPEX

For Further Information Contact: Simon Finnis – Chief Executive Officer & Managing Director | Chief Financial Officer – Duane Woodbury Ph: +61 (0) 7 3009 8000 | Head Office: Lvl 2, 247 Adelaide Street, Brisbane Q 4000 | GPO Box 10955, Brisbane Q 4000 18 | ASX : MMI | August 2019

FORWARD LOOKING STATEMENT Statements and material contained in this ASX Presentation, particularly those regarding possible or assumed future performance, production levels or rates, commodity prices, resources or potential growth of Metro Mining Limited, industry growth or other trend projections are, or may be, forward looking statements. Such statements relate to future events and expectations and, as such, involve known and unknown risks and uncertainties. Any graphs sourced from third parties are referenced and Metro Mining has not independently verified the information. Although reasonable care has been taken to ensure that the facts stated in this ASX Presentation are accurate and or that the opinions expressed are fair and reasonable, no reliance can be placed for any purpose whatsoever on the information contained in this document or on its completeness. Actual results and developments may differ materially from those expressed or implied by these forward-looking statements depending on a variety of factors. Nothing in this ASX Presentation should be construed as either an offer to sell or a solicitation of an offer to buy or sell shares in any jurisdiction. COMPETENT PERSON’S STATEMENT The information in this report that relates to the Bauxite Hills Mine Mineral Resource is based on information compiled by Ed Radley who is a consultant to Metro Mining and a Member of the Australian Institute of Mining and Metallurgy (MAusIMM)). Mr Ed Radley has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Ed Radley has consented in writing for inclusion in this Report the matters based on the information in the form and context it appears. COMPETENT PERSON’S STATEMENT The information in this ASX Announcement to which this statement is attached that relates to the “Metro Mining – Bauxite Hills” Reserves is based on information compiled by MEC Mining and reviewed by Edward Bolton, a Competent Person who is a Member of the Australasian Institute of Mining and

• Metallurgy. Edward Bolton is a full-time employee of MEC Mining Pty Ltd. Edward Bolton has sufficient

experience that is relevant to the style of mineralization, type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Edward Bolton consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. Competent Person Statement: COMPETENT PERSON’S STATEMENT The information in this report that relates to Exploration Results is based on information compiled by Neil McLean who is a consultant to Metro Mining and a Fellow of the Australian Institute of Mining and Metallurgy (F.Ausimm). Mr McLean has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting

• f Exploration Results, Mineral Resources and Ore Reserves’. Mr McLean consents to the inclusion in

the report of the matters based on information in the form and context in which it appears.

Disclaimer

Bauxite Hills Mine Snapshot

19 | ASX : MMI | August 2019

Key Statistics

Project Overview

Ownership: Metro (100%) Commodity Bauxite Location: Cape York, Qld Product Type Direct Shipping Ore Contained Mineral: Reserves 109.5Mt1 Resources 138.2Mt1 Mining Mine Type Surface mining Status Operational

Operational Overview

Commenced Mining April 2018 2018 Production ~2.04M WMT 2019 Production ~3.4M WMT Future Production2 ~6M WMT pa (from 2021) Mine Life 19 years1 Operations Mining & transhipment Workforce ~240 personnel

1.ASX Release 17 July 2019 2. subject to Board approval of expansion to stage 2

Location