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Kun-Manie Nickel Sulphide Deposit Corporate Investor Presentation - - PowerPoint PPT Presentation

Kun-Manie Nickel Sulphide Deposit Corporate Investor Presentation March 2019 Disclaimer The information contained in this confidential document ( Presentation ) has been prepared by Amur Minerals Corporation (the " Company "). It


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Kun-Manie Nickel Sulphide Deposit

Corporate Investor Presentation

March 2019

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The information contained in this confidential document (“Presentation”) has been prepared by Amur Minerals Corporation (the "Company"). It has not been fully verified and is subject to material updating, revision and further amendment. This Presentation does not constitute or form part of, and should not be construed as, an offer for sale or subscription

  • f, or solicitation of any offer to purchase or subscribe for, any shares in the Company nor should it form the basis of, or be relied on in connection with any contract or commitment
  • whatsoever. This Presentation has not been approved by any of the Company’s professional advisers, nor by any authorised person pursuant to Section 21 of the Financial Services

and Markets Act 2000 and therefore it is being delivered for information purposes only to a very limited number of persons and companies who are persons who have professional experience in matters relating to investments and who fall within the category of person set out in Article 19 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order") or are high net worth companies within the meaning set out in Article 49 of the Order or are otherwise permitted to receive it. Any other person who receives this Presentation should not rely or act upon it. By accepting this Presentation, the recipient represents and warrants that they are a person who falls within the above description of persons entitled to receive the Presentation. This Presentation is not to be disclosed to any other person or used for any other purpose. While the information contained herein has been prepared in good faith none of the Company nor any of its shareholders, directors, officers, agents, employees or professional advisers give, have given or have authority to give, any representations or warranties (express or implied) as to, or in relation to, the accuracy, reliability or completeness of the information in this Presentation, or any revision thereof, or of any other written or oral information made or to be made available to any interested party or its advisers (all such information being referred to as "Information") and liability therefore is expressly disclaimed. Accordingly, neither the Company nor any of its shareholders, directors, officers, agents, employees or advisers take any responsibility for, or will accept any liability whether direct or indirect, express or implied, contractual, tortious, statutory or otherwise, in respect of the accuracy or completeness of the Information or for any of the opinions contained herein or for any errors, omissions or misstatements or for any loss, howsoever arising, from the use of this Presentation. Neither the issue of this Presentation nor any part of its contents is to be taken as any form of commitment on the part of the Company to proceed with any transaction and the right is reserved to terminate any discussions or negotiations with any prospective investors. In no circumstances will the Company be responsible for any costs, losses or expenses incurred in connection with any appraisal or investigation of the Company. In furnishing this Presentation, the Company does not undertake or agree to any obligation to provide the recipient with access to any additional information or to update this Presentation or to correct any inaccuracies in, or omissions from, this Presentation which may become apparent. Certain forward looking statements may be contained in the presentation which include, without limitation, expectations regarding metal prices, estimates of production, operating expenditure, capital expenditure and projections regarding the completion of capital projects and pre feasibility studies as well as the financial position of the company. Although Amur believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to be accurate. Accordingly, results could differ from those projected as a result of, among other factors, changes in economic and market conditions, changes in the regulatory environment and

  • ther business and operational risks.

Neither this Presentation nor any copy of it may be (a) taken or transmitted into Australia, Canada, Japan, the Republic of Ireland, South Africa or the United States of America, their territories or possessions; (b) distributed to any U.S. person (as defined in Regulation S under the United States Securities Act of 1933 (as amended)) or (c) distributed to any individual outside Australia, Canada, Japan, the Republic of Ireland or South Africa who is a resident thereof in any such case for the purpose of offer for sale or solicitation or invitation to buy or subscribe any securities or in the context where its distribution may be construed as such offer, solicitation or invitation, in any such case except in compliance with any applicable exemption. The distribution of this document in or to persons subject to other jurisdictions may be restricted by law and persons into whose possession this document comes should inform themselves about, and observe, any such restrictions. Any failure to comply with these restrictions may constitute a violation of the laws of the relevant jurisdiction.

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Disclaimer

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Ove verview

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Company Overview

The Right Project…

  • Amur is developing the Kun-Manie project, the largest undeveloped and drill proven nickel copper sulphide deposit in

Asia with a JORC Mineral Resource Estimate containing 155.1 million ore tonnes comprising a nickel equivalent grade of 1.02%, equating to a total of 1.58 million equivalent tonnes of nickel

  • PFS released in February 2019 reinforcing the Project’s technical and economic viability, highlighting a three year

construction period and a 15 year production period with upside potential to extend the LOM

  • Two production scenario’s
  • TS Option – Total post tax free cashflow of $2,041 million
  • FFS Option - Total post tax free cashflow of $2,980 million

…The Right Location…

  • Located in the Far East of Russia, close to China’s north east border, with ready access to the key nickel and copper

markets of China, Japan and Korea via Sea (Vladivostok) and Land (Rail)

  • Highly skilled management team with experience operating in Russia and the Far East

…The Right Time

  • Nickel demand set to dramatically grow as nickel is a non-substitutable and essential commodity for the Electric Vehicle

(EV) battery market accounting for up to 80% of the raw materials in NCA batteries

  • On track to be one of the world’s top-10 nickel producers arriving in a period of chronic nickel supply deficits

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Board

Robert Schafer Non-Executive Chairman

  • Mr. Schafer has nearly

42 years

  • f

experience in the mineral industry. Founder and Managing Director of Eagle Mines Management, a globally active private natural resources corporation. Robin Young Chief Executive Officer Mr. Young is a geological engineer who has worked extensively in the CIS since 1991. He has 41 years

  • f

experience including large scale projects in remote areas as well as significant work with junior mining companies. Brian Savage Non-Executive Director

  • Mr. Savage has more

than 37 years

  • f

experience in all aspects

  • f the mining industry.

Currently Chairman of Sage Management LLC, a privately held company he founded to advise and invest in natural resource projects and companies. Paul Gazzard Non-Executive Director

  • Mr. Gazzard, who has

acted as an external adviser to Amur for four years, has over 12 years

  • f experience working

across large institutions in the City of London in his role as a Fund Manager. Ljupco Naumovski Non-Executive Director Mr. Naumovski has more than three decades of experience working in Russia, most recently as Vice President and General Director of the Moscow

  • ffice for Kinross Gold

Corporation, the largest Canadian investor in Russia.

Strong and experienced Board with a track record in Russia

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Exchange Ticker Share Price* AIM AMC 2.9p Market Cap* 52 Week Range Shares in Issue £ 20.45M 2.5p – 5.8p 705,333,094

Key Shareholders*

Share price graph

(September 2018 to March 2019)

* As of 06 March 2019

Corporate Overview

7.81% 16.35% 5.16% 11.68% 26.43% 3.62% 4.09% 3.88% 3.67% 0.73% 16.59% BARCLAYSHARE NOMINEES LIMITED HARGREAVES LANSDOWN (NOMINEES) HSBC CLIENT HOLDINGS NOMINEE (UK) HSDL NOMINEES LIMITED INTERACTIVE INVESTOR SERVICES JIM NOMINEES LIMITED LAWSHARE NOMINEES LIMITED VIDACOS NOMINEES LIMITED WEALTH NOMINEES LIMITED DIRECTORS / EXECUTIVES OTHER SHAREHOLDERS

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KUN-MA MANIE

The r righ ght t project t in the r righ ght l t location…

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A Globally Significant Nickel Sulphide Project

Nickel Sulphide projects with >20Kt p.a. likely to come into production over the next five years

  • Kun-Manie Project is one of the highest grade, undeveloped nickel sulphide deposits globally, capable of supplying

significant quantities on a yearly basis

  • Only new nickel sulphide asset of any significance in Asia
  • Limited number of global projects scheduled to come into production to meet forecast nickel demand, making

Kun-Manie an essential asset to develop

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  • Kun-Manie Project is close to

major nickel markets

  • Direct access to China through

existing rail infrastructure

  • Proximity to Vladivostok port

allows shipment of product to China, Japan and Korea, large users of nickel products

  • Opportunity to deliver into

Europe via rail to St Petersburg

Strategically Placed to Feed Major Markets

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Located In An Established Mining Area

  • Amur region is home to London listed Petropavlovsk’s gold operations, with four mines close to the Project
  • The Kun-Manie Project will benefit from established road and rail infrastructure with direct routes to China

and internally through Russia via the Baikal-Amur and Tran Siberian rail lines

  • Amur region is well known to commodity traders and has established logistics routes
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Attractive PFS

  • JORC Mineral Resource Estimate containing 155.1 million
  • re tonnes comprising a nickel equivalent grade of 1.02%,

equating to a total of 1.58 million equivalent tonnes of nickel

  • A three year construction period and a 15 year production

period with upside potential to extend the life of mine

  • Production will derive from four open pits and one

underground mining operation

  • Two production scenario’s
  • TS Option - Toll Smelt option which provides the swiftest

path to revenue generation, where the concentrate is sold to a purchaser

  • FFS Option - where the Company constructs and operates

an electric furnace / flash smelter converting the concentrate to a low grade matte which allows for the capture of additional revenues from the by-product metals of copper, cobalt, platinum and palladium

  • Low cost operations:
  • C1 costs within the second lower quartile for all nickel

producers

  • TS Option estimated $3.87 per pound of payable

nickel

  • FFS Option estimated $2.34 per pound including

additional by-product revenues

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 TS Option $3.10 $3.14 $3.28 $3.88 $3.64 $4.17 $4.37 $4.06 $4.40 $5.10 $4.33 $4.38 $3.97 $3.56 $2.83 FFS Option $1.75 $1.74 $1.95 $2.76 $2.22 $2.73 $2.96 $2.64 $3.01 $3.46 $2.72 $2.80 $2.48 $2.10 $1.62 1 2 3 4 5 6 C1 Nickel Cash Cost (US$/lb) Year

Annual C1 Nickel Cash Cost

Nickel Cash Cost (US$/lb) Paid Nickel (kt)

1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 0.0 25% 50% 75% 324 648 971 1,295

TS OPTION (US$3.87/lb) FFS OPTION (US$2.34/lb)

2018 Nickel Cash Cost Curve

Source: SNL Market Intelligence

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  • NPV post-tax at 10% discount rate of $614.5 million using a long-term nickel price of

$8.00 per pound

  • Post tax IRR of 29.3%
  • Total post tax free cashflow of $2,041 million
  • Pre-production capital expenditure of $570.4 million with a payback period of three

years

TS Option

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  • NPV post-tax at 10% discount rate of $987.4 million using a long-term nickel price of

$8.00 per pound

  • Post tax IRR of 34.7%
  • Total post tax free cashflow of $2,980 million
  • Pre-production capital expenditure of $695.0 million with a payback period of three

years

FFS Option

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Kun-Manie Process Flowsheet

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Strategic Development

The robust PFS puts Amur and the project in an attractive position for the Company to continue its strategic plan and identify partnerships that will add to, and complement, the Company’s existing experience and influence in order to bring Kun-Manie into development.

  • Construction of a one lane access

road capable of lasting 30 years

  • The initial road design was

begun in February 2019

  • Capital cost included in the PFS
  • Engagement of Strategic Partner
  • Process underway
  • Supported by delivery of PFS
  • Enhance existing expertise to

help drive shareholder value

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Asia’s Largest Undeveloped Nickel Copper Sulphide Deposit

Resource Classification Ore Ni Cu Co Pt Pd Eq Ni Ni Cu Co Pt Pd Eq Ni Mt % % % g/t g/t (%) (1000’s t) (1000’s t) (1000’s t) (t) (t) (1000’s t) Measured 11 0.7 0.2 0.01 0.2 0.3 0.99 80 20 1.3 3 3 111 Indicated 107 0.7 0.2 0.02 0.2 0.2 1.00 787 217 16.2 16 17 1,075 M+I 118 0.7 0.2 0.02 0.2 0.2 1.00 867 237 17.5 19 20 1,186 Inferred 37 0.8 0.2 0.02 0.2 0.2 1.08 290 81 6.0 6 7 398 TOTAL 155 0.8 0.2 0.02 0.2 0.2 1.02 1,157 319 23.5 25 18 1,582

  • Following the successful drill programme in 2018 there are substantial upside opportunities including:
  • Increase in the Mineral Resource Estimate
  • Expansion of the mine life based on Mining Ore Reserve increases
  • Optimisation of a production schedule to move higher revenue material forward allowing for enhanced early cash

flow during the first 10 years of production when reduced Metals Royalty and Net Profits Tax are available

  • Metallurgical test work to reduce the magnesium oxide content for which penalty fees are applied during smelting
  • The potential to generate a separate copper concentrate stream providing copper stream revenues
  • Negotiate improved off take agreement terms
  • Define Russian government low cost loan considerations for the access road

Kun-Manie Resource Estimate

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2018 Drill Programme

  • A two-stage programme
  • Completed 32,526.5 m of drilling within 169 drill holes located throughout the

mining licence area, bringing the total drilled metres to 117,343.7 m within 656 diamond core drill holes

  • Newly discovered mineralisation located adjacent to IIHG, ISK and western area
  • f KUB has been drill identified based on spacing of 100 m by 100 m
  • As much as 30 million tonnes of existing Inferred resource may have been

converted to Indicated and the potential to increase the mineral resource inventory by up to an additional 25 million tonnes should materially impact the estimated mineral resource of the project

  • Anticipate that the two of the PFS pits located at IKEN and KUB may merge into
  • ne large pit, covering a strike length of more than four kilometres
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Moving Towards Development

Detailed Engineering

DRILLING RESULTS MI&I PRE-FEASIBILITY STUDY DEFINITIVE FEASIBILITY STUDY 2021 – DEVELOPMENT 2023 – START-UP PRODUCTION

AMUR MINERALS

KUN-MANIE PROJECT

2007 Ni-341,000tn, Cu-95,500tn 2008 2014 2009 2010 2011 2012 Ni-650,600tn, Cu-178,400tn 2013 2015 2016 2017 Ni-769,000tn, Cu-206,000tn, Co-15,000tn

LICENCED UNTIL 2035

Finalised Q1 2019 Outotec & RPM extended Concentrate or matte being assessed 2018 Ni-1,157,000tn, Cu-319,000tn, Co-23,500tn Pt-25tn, Pd-18tn Infrastructure & Environmental Work Metallurgical Work CONSTRUCTION START

2023 2022

ONGOING

TEO Submitted TEO Approved

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Project De-Risking to Drive Further Value

Pre-Feasibility Study released in February 2019 Confirms attractive economics and viability of Kun-Manie Ongoing conversations with industry players Amur to target EV battery manufacturers and nickel supply chain participants Discussions underway with international lenders Significant appetite to provide project finance debt for construction of Kun-Manie Project Production scheduled to come online during rising demand for nickel sulphide product

Project

  • ptimisation

Offtake Financing Production

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NICKEL KEL M MARKET KET

…a …at t the righ ght t t time

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The Prospect for Nickel – An Electric Vehicle (EV) Demand Driven Market

  • Environmental benefits are fuelling a dramatic rise in mass EV adoption globally
  • Lithium, cobalt and graphite prices have spiked on their role in EV, but the role of nickel in EV battery Cathodes

has so far not yet responded

  • All current and in development EV batteries will have significant quantities of nickel, making up to between 20-

52% of the battery raw material

  • Battery makers require high purity nickel to create the sulphates used in the manufacturing of EV battery

cathodes

  • Nickel sulphide deposits are the best source of battery grade class 1 nickel, however, they only account for
  • c. 40% of global production (c. 800K of world production in 2017)
  • To meet the projected demand production, sulphide production would have to at least double over the

next seven years, an unprecedented feat and counter to current trends – a new Kun-Manie every year!

  • Cathode chemistry is becoming evermore nickel rich as manufactures look to enhance energy density and

combat utilisation of cobalt

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Nickel Forecast – The Only Way Is Up

Sources: Nornickel Group, Reuters, Wood Mackenzie, UBS

  • CRU expects a tight nickel market in the short / medium

term but anticipate a large long term deficit

  • CRU estimate 1.79 Mt of additional unallocated supply is

needed to match anticipated demand by 2035

  • Nickel demand from batteries is the primary demand

driver and anticipated to grow from 3% of total demand in 2018 to 33.7% by 2035, representing a CAGR of 17.4%

  • Wood Mackenzie has the most bullish view of nickel

metal prices projecting them to exceed the US$12/lb mark by 2030

  • CRU anticipate a near doubling of todays nickel price by

2027 and Consensus Economics estimate to exceed US$8/lb by 2024

5 6 7 8 9 10 11 12 13 14 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Nickel Price (US$/lb) Woodmac - nickel CRU - nickel Consensus Economics - nickel All forecasts predict a rise in the nickel price

  • ver the coming decade

Nickel Price Forecasts

Medium Term Nickel Market Balance, 2015-2023

A tight nickel market in the short / medium term Large long term deficit predicted

Nickel Metal Supply Gap 2015-2035

1.79 Mt

Source: CRU Consulting; Wood Mackenzie; Consensus Economics

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INV NVESTMENT C CASE

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The Case for Kun-Manie

 In development and moving towards BFS  Production scheduled to start at the beginning of a sustained nickel supply requirement  Strong management and Board with experience in project development in Russia  Government support for the project and associated infrastructure  Nickel to be the major component

  • f grid and EV

batteries for many years  Nickel price set to rise in line with rising EV demand  No substitution for nickel in EV battery technology  Ideally positioned to supply China, Korea and Japan, the biggest consumers of nickel

LOCATION

 The largest proven nickel sulphide deposit in Asia  PFS released in February 2019

  • TS Option - post

tax NPV(10%) $614.5 million, post tax IRR 29.3%, total post tax free cashflow $2,041 million

  • FFS Option – post

tax NPV(10%) $987.4 million, posy tax IRR 34.7%, total post tax free cashflow $2,980 million

SUPPORT TIMING SIZE COMMODITY

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Contact Us

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Amur Minerals Corporation

Robin Young, CEO Paul McKay, CFO info@amurminerals.com

SP Angel (Nomad & Broker)

Lindsay Mair Soltan Tagiev +44 (0) 20 3470 0470

Blytheweigh (PR & IR)

Tim Blythe Megan Ray +44 (0) 20 7138 3203 @amur_minerals

  • www. amurminerals.com