in the Fluorspar Sector Company Presentation May 2017 Disclaimer - - PowerPoint PPT Presentation
in the Fluorspar Sector Company Presentation May 2017 Disclaimer - - PowerPoint PPT Presentation
Building a Strategic Position in the Fluorspar Sector Company Presentation May 2017 Disclaimer The content of information contained in these slides and the accompanying verbal presentation (together, the Presentation) has not been approved
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
- change. The Company undertake no obligation to provide the recipient with access to any additional information or to update this Presentation or any additional information or to correct any inaccuracies in any such
information which may become apparent. This document sets out certain features of the Company and does not purport to provide a complete description of the Company or the shares in the Company. No reliance may be placed for any purpose whatsoever on the information contained in this Presentation or on its completeness, accuracy or fairness thereof, nor is any responsibility accepted for any errors, misstatements in, or omission from, this Presentation or any direct or consequential loss however arising from any use of, or reliance on, this Presentation or otherwise in connection with it. By accepting this Presentation you confirm, represent and warrant that you have consented to receive information in respect of securities of the Company and other price-affected securities (as defined in the Criminal Justice Act 1993 (“CJA”)) which makes you an “insider” for the purposes of Part V of the CJA, and you agree not to deal in any securities of the Company until such time as the inside information (as defined in the CJA)
- f which you have been made aware has been made public for the purposes of the CJA.
This Presentation may not be reproduced or redistributed, in whole or in part, to any other person, or published, in whole or in part, for any purpose without the prior consent of the Company. The contents of this Presentation are confidential and are subject to updating, completion, revision, further verification and amendment without notice. The Presentation is being distributed on request only to, and is directed at, authorised persons or exempt persons within the meaning of FSMA or any order made thereunder or to those persons falling within the following articles of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended) (the “Financial Promotion Order”): Investment Professionals (as defined in Article 19(5)), members and creditors of certain bodies corporate (as defined in Article 43 (2)) High Net Worth Companies (as defined in Article 49(2)). Persons who do not fall within any of these definitions should not rely on this Presentation nor take any action upon it but should return it immediately to the Company. This Presentation is exempt from the general restriction in section 21 of FSMA relating to the communication of invitations or inducements to engage in investment activity on the grounds that it is made only to certain categories of persons. Neither this Presentation nor any copy of it should be distributed, directly or indirectly, by any means (including electronic transmission) to any persons with addresses in the United States of America (or any of its territories or possessions) (together, the “US”), Canada, Japan, Australia, the Republic of South Africa or the Republic of Ireland, or to any corporation, partnership or other entity created or organised under the laws thereof, or in any other country outside the United Kingdom where such distribution may lead to a breach of any legal or regulatory requirement. The recipients should inform themselves about and observe any such requirements or relationship. The Company’s ordinary shares have not been, and are not expected to be, registered under the United States Securities Act 1933, as amended, (the “US Securities Act”) or under the securities laws of any other jurisdiction, and are not being offered or sold, directly or indirectly, within or into the US, Canada, Japan, Australia, the Republic of South Africa or the Republic of Ireland or to, or for the account or benefit of, any US persons or any national, citizen or resident of the US, Canada, Japan, Australia, the Republic of South Africa or the Republic of Ireland, unless such offer or sale would qualify for an exemption from registration under the US Securities Act and/or any other applicable securities laws. Past Performance This Presentation contains statements regarding the past performance of the Company’s ordinary shares. Past performance cannot be relied upon as a guide to future performance. Forward-looking Statements This Presentation or documents referred to in it contain forward-looking statements. These statements relate to the future prospects developments and business strategies of the Company and its subsidiaries (the “Group”). Forward-looking statements are identified by the use of such terms as “believe”, “could”, “envisage”, “estimate”, “potential”, “intend”, “may”, “plan”, “will” or the negative of those, variations or comparable expressions, including references to assumptions. The forward-looking statements contained in this Presentation are based on current expectations and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by those statements. If one or more of these risks or uncertainties materialises, or if underlying assumptions prove incorrect, the Group’s actual results may vary materially from those expected, estimated or projected. Given these risks and uncertainties, potential investors should not place any reliance on forward-looking statements. These forward-looking statements speak only as at the date of this Presentation. No undertaking, representation, warranty or other assurance, expressed or implied, is made or given by or on behalf of the Company or any of its directors, officers, partners, employees or advisers or any other person as to the accuracy or the completeness of the information or opinions contained herein and to the extent permitted by law no responsibility or liability is accepted by any of them for any such information or opinions. Notwithstanding the aforesaid, nothing in this paragraph shall exclude liability for any representation or warranty made fraudulently. January 2017
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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. 22 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. 35 years’ experience in mineral exploration. 30 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. 23 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. 43 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 Aims
- To become a reliable long-term and competitive supplier of
high quality fluorspar to world markets
- Revenue generating in the near term
- To add value to the Group’s mineral projects
- The discovery, acquisition and development of mineral
resources
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Fluorspar and Applications
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- Fluorspar is the commercial name for the mineral fluorite, composed of calcium and fluorine
(CaF2)
- Fluorspar is the predominant commercial source for the chemical element fluorine
- Fluorine is a non-metallic element and the lightest of the halogens and is therefore largely
irreplaceable
- Two principal commercial grades:
- Metallurgical grade/Met-spar (60-96% CaF2)
- Acid grade/Acid-spar (+97% CaF2)
Source: Industrial Minerals Magazine, Roskill, CRU, UN, USGS, CCM, Company Data
Fluorspar Market
- The global supply and demand for fluorspar
had seen steady growth over the decade 1998 to 2008 – reflected in the long-term upward trend in price
- In 2009 the global financial crisis
contributed to a contraction in acid-spar supply and demand followed by a short- term recovery in 2011
- Acid-spar demand has softened in the last
5 years resulting in oversupply and a downward trend in the price
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Source: Industrial Minerals Magazine, Roskill, CRU, UN, USGS, CCM, Company Data
- Major Producing regions: China (>50% world’s production); Mexico; Mongolia/CIS; South Africa;
Vietnam
- Major consuming regions (highest to lowest): China; North America; Europe; Mexico; Russia
- Key western acid-spar consumers: Chemours, Honeywell, Solvay, Lanxess, Fluorsid, DDF,
Fluorchemie
Opportunity in Fluorspar
- Industry view (producers, end users, analysts): demand and price will increase in the medium to long-term
- No large scale commercial alternative or recycling
- Refrigeration – new generation of zero ozone depleting potential (ODP) and very low global warming
potential (GWP) refrigerants, hydrofluoroolefins (HFO’s) - Driven by environmental legislation, most recently the Kigali Amendment:170 nations agreed to phase down low ODP, high GWP Hydrofluorocarbons (HFCs)
- Energy reduction in the steel and aluminium industry
- Emerging uses - fluoropolymers in lithium batteries for example
- Permanent mine closures – removing capacity from the market
- China fluorspar exports have continued to decline since 2000 driven by increasing internal demand and
production/export restrictions – potentially a future net importer
- Western Europe and North America (USA imports 100% of its fluorspar) are the largest acid-spar
consuming regions outside China, importing more than 900,000 tonnes per year
- North America and Europe face the potential risk of security of supply
- Fluorspar is classified as a Critical Raw Material by the European Commission – high risk of supply
shortage and consequent impact on the economy
- USA considers fluorspar as a strategic mineral
- Based on macroeconomic drivers the Company continues to be strategically placed to capitalise on this
position in the future by developing its 100% owned large fluorspar assets, containing fluorspar resources of 13.1 million tonnes, located in the USA and Europe
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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 increase 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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Positive Scoping Study – Scott Wilson
- Low Capex: US$ 46 million
- Average annual Turnover: >US$ 34 million
- Pre-Tax NPV (8% coc): US$ 33 million
- IRR (100% Equity): 24%
- Payback: <3 years
Post Scoping Study – Key Developments
- 46 diamond core drill holes
- 28% increase in Mineral Resource compared
with Scoping Study – JORC Classified
- New Bulk Rail Terminal constructed – 25km
from project site
- Waste:ore strip ratio reduced from 2.2t:1t to
0.8t:1t
- Potential step-change for scale of mineralisation,
- pen laterally in all directions
JORC Mineral Resource Estimate
Classification Million Tonnes (Mt) Fluorspar (CaF2%) Indicated 25 10.28 Inferred 2.7 9.57 Total 27.7 10.21
Storuman Fluorspar Project
2016 Highlights
- 25-year Exploitation (Mine) Permit approved by the Swedish Mining
Inspectorate (Bergsstaten) - Feb 2016
- Appeals lodged against Permit decision: Sami Reindeer Husbandry
Community and Urbergsgruppen received by the Swedish Government
- New case law for Sweden in 2016: Norra Karr rare earth deposit owned by
Leading Edge Minerals (formerly Tasman Metals) had its Mine Permit revoked by the Supreme Administrative Court
- The Norra Karr Mine Permit was revoked on the basis that the Environmental
Impact Assessment (EIA) did not sufficiently assess the impact of mining on the wider area beyond the Mineral Deposit
- The Government returned the Tertiary Mine Permit case to the Swedish Mining
Inspectorate in Dec 2016 for re-assessment in light of the Norra Karr case
- The EIA prepared by Tertiary is based on extensive and detailed baseline
environmental studies which do cover the wider area
- The Company is confident that the quality and extent of the EIA coupled with the
expected continued support from key stakeholders in the project will provide support for a positive outcome for Tertiary in the re-assessment process
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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)
- 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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Highlights
- Positive Scoping Study (Wardell Armstrong International) – 2012
- Tertiary and Global aluminium company, Hydro, have entered into a Heads of Terms: Tertiary
will acquire the land and historic mine workings for 1 Norwegian Krone following successful due diligence and purchase agreement completion
JORC Mineral Resource Estimate
Classification Million Tonnes (Mt) Fluorspar (CaF2%) Inferred 4 24.6
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 Acid Grade Fluorspar production/year 100,000 tpa 100,000 tpa Mine Life 6.6 years 8.25 years Initial Capital Cost (Capex) US$ 78 million US$ 78 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
- 146 Mining Claims >2,800 acres on BLM land
- 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 Highlights & 2017 Targets1
- 166 line-km ground magnetic survey completed
- Phase 4 drilling programme completed
- 4 percussion holes, 1,553 metres
- Significant lateral and depth extension of fluorspar
mineralisation proven in the Western Area
- Deposit and field appraisal by world renowned geologist –
Dr Richard Sillitoe
- Reasonable possibility that fluorspar grades could
increase to the north-west region of the deposit
- Modelling, optimisation and associated economic
evaluation - key opportunities and challenges:
- Potential higher grade fluorspar to the north west –
significant effect on project economics
- Potential for production of commercial grade mica as a
secondary product – valuable upside
- Project sensitive to transport distance/cost to market
- Mineralogy of the deposit is highly variable
- Following successful completion of modelling – Scoping
Study targeted for completion by summer 2017
Note 1: All target schedules are subject to change, funding and successful completion of each phase of work
Kaaresselkä & Kiekerömaa - Gold, Finland
- Sale of two legacy gold assets in Finland to TSX-V listed Aurion Resources Ltd
- Aurion is a Canadian listed (TSX-V: AU) exploration company primarily focusing on the development of its
Finnish gold projects, several of which are under a joint venture with B2Gold, a main listed (TSX:BTO, NYSE MKT:BTG) gold producer and developer
- Deal Highlights:
- £100,000 initial consideration paid by Aurion: £15,000 in cash and £85,000 in Aurion shares
Tertiary retains royalty interest in the projects:
- Pre-Production Royalty on definition of a NI 43-101 (or equivalent) Code compliant Minerals Resource Estimate on
either project:
- US$1.00/ounce gold – Inferred Mineral Resource
- US$2.00/ounce gold – Indicated Mineral Resource
- US$3.00/ounce gold – Measured Mineral Resource
- Net Smelter Returns Royalty (NSR) of 2% on all future gold production from either property
- Aurion can purchase 50% of the NSR from Tertiary for USD$1,000,000 at any time prior to commencement of
commercial production on either project
Rosendal Tantalum Project, Finland
- Exploration Licence expired – renewal application submitted
- No material work planned, continue to seek potential partners or buyers
Future Revenue from 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
strategic and critical mineral in the USA and Europe
- Three 100% owned fluorspar assets strategically located in the USA and Europe: 13.1 million tonnes
contained fluorspar (CaF2) resources (JORC classified
- Europe – Key market, Fluorspar Critical Raw Material Classification (EC), net importer
- USA – Key market, 100% net import reliance, strategic mineral
- No large scale commercial alternative or recycling
- Broker Research suggests shares are undervalued2:
20 Note 2: Previous price target estimates are no indication of future prices
SP Angel 10.6p per share 13 March 2015 Beaufort 9p per share 13 April 2016 BROKER RESEARCH - Latest Price Target
Looking Forward……..
- Storuman Project: Resolution on 25-year Mine Permit
- MB Project: Modelling, optimisation and associated
economic evaluation followed by Scoping Study
- Potential Revenue:
- Retained Royalty Interest in Finnish Gold Projects
- Evaluating a number of projects for acquisition with
near term revenue and profit potential
Building a Strategic Position in the Fluorspar Sector
Tertiary Minerals plc Richard Clemmey/ Patrick Cheetham Tel: +44 (0)1625 838 679
richard.clemmey@tertiaryminerals.com pat.cheetham@tertiaryminerals.com
Nominated Adviser & Joint Broker S P Angel Corporate Finance LLP Ewan Leggat/ Lindsay Mair/Laura Harrison Tel: +44 (0)203 470 0470
ewan.leggat@spangel.co.uk lindsay.mair@spangel.co.uk
Joint Broker Beaufort Securities Ltd Elliot Hance Tel: +44 (0)207 382 8300
elliot.hance@beaufortsecurities.com
THANK YOU FOR YOUR TIME AND SUPPORT
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