Kun-Manie The Nickel Copper Sulphide Deposit
AMUR MINERALS CORPORATE INVESTOR PRESENTATION
November 2019
Kun-Manie The Nickel Copper Sulphide Deposit AMUR MINERALS - - PowerPoint PPT Presentation
Kun-Manie The Nickel Copper Sulphide Deposit AMUR MINERALS CORPORATE INVESTOR PRESENTATION November 2019 Disclaimer Leading the Charge Electronic Vehicles The information contained in this confidential document (Presentation) has been
AMUR MINERALS CORPORATE INVESTOR PRESENTATION
November 2019
AMUR MINERALS CORPORATE INVESTOR PRESENTATION
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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
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
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 other business and
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AMUR MINERALS CORPORATE INVESTOR PRESENTATION
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Kun-Manie
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AMUR MINERALS CORPORATE INVESTOR PRESENTATION
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Key Project Features
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A M U R M I N E R A LS C O R P O R A T E I N V E S T O R P R E S E N T A TI O N
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Russian Far East Initiatives
(Government Support Programs at Federal and Local Levels)
*Also available to Russian companies
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China
South Korea Japan Vladivostok Kun-Manie Project Amur Minerals
Feed Major Markets
Strategically located adjacent major nickel markets Direct access to China via existing rail and road infrastructure Proximity to Vladivostok port for shipment of product to China, Japan and Korea Opportunity to deliver into Europe via rail to St. Petersburg
Road Transport
1,986 km to Vladivostok
Sea Frieght Rail Carriage
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Leading the Charge Electronic Vehicles Kun-Manie Albyn Pioneer & Pokrovskiy
Petropavlovsk
Garinskoye
RCExploration Project
Petropavlo sk Am r Minera s
Ma omir
Petropavlovsk
Chulbatkan Malmyzh Khabarovsk
Location
Amur region – Well developed mining industry Project will benefit from established road and rail infrastructure with direct routes to China via the Baikal Amur and Tran Siberian rail lines
Road Refurbishments Road Requires Construction Railway Transaction - 31 July 2019 Project USD (M) Commodities Kinross Gold Purchase Chulbatkan $283 Gold Resource Tonnes (Mt) Grade (g/t) Ounces (koz) Indicated 87 1.4 3,910 Inferred 3 1 80 Transaction - 2 October 2018 Project USD (M) Commodities IGC Sale Malmyzh $200 Copper Gold Resource* Tonnes (Bt) Cu (%) Cu Tonnes (Mt) Au (Moz) C1 & C2* 1.39 0.4 5.6 9.4
* RUSSIAN CATEGORY
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Strategic Development
The PFS attractively position 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. Rail Station
Concentrate shipping Resupply facility
One lane access road
The initial road design was begun in February 2018 Capital cost included in the PFS
Mine Site
Open pit / Underground Production All site facilities for concentrate generation Site generated power
N
Tokinsky Nature Reserve
Mine Site Rail Station
15 30 60 Km
Production License Existing Road Industrial Area Railroad Ulak R. R. Station Kun-Manie Access Road Settlement
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Largest Undeveloped Desposit
Addition of 2018 drill results is projected to:
Increase in the Mineral Resource Estimate and minimised Inferred resource Expansion of the mine life based
Allow optimisation of a production schedule moving higher revenue material forward Metallurgical test work to reduce the magnesium oxide content The potential to generate a separate copper concentrate stream providing copper stream revenues
Resource Classification Ore (Mt Mt) Ni (%) %)
0.71 0.74 0.73 0.79 0.75 75 1,157 157 (1000t 000t)
Cu (%) %) Co (%) %) Pt (g/t) Pd (g/t) Eq Ni (%) Measured
11.2 0.18 0.011 0.23 0.26 0.99
Indicated
107.0 0.20 0.015 0.15 0.15 1.00
M+I
118.2 0.20 0.015 0.16 0.17 1.00
Inferred
37.0 0.22 0.017 0.17 0.18 1.08
TOTAL
155.1 0.21 21 0.015 015 0.16 16 0.17 17 1.02 02
TOTAL (Tonnes)
319 (1000t 000t) 23.5 (1000t 000t) 25 (t (t) 18 (t (t) 1,582 582 (1000t 000t)
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Mine Site
Mine Area
VOD
IKEN Transfer MKF Transfer
Industrial Site IKEN KUBUK MKF
Access Road Allotment Industrial Site Allotment
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Ore Tonnes Ni% Cu% Ni Tonnes Cu Tonnes
MKF 60.9 0.78 0.22 472 131 VOD 4.8 0.83 0.21 40 10 IKEN 51.9 0.75 0.20 386 106 KUBUK 37.6 0.69 0.19 259 72 155.1 0.75 0.21 1157 319
Deposit Breakdown
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Process Flowsheet
Gyratory Crusher Grizzly - Underflow to SAG Stock Pile Trucks From Mine Stacker Conveyor SAG Mill Stock Pile SAG Feeder Conditioning Hydro-Cyclone Group Hydro-Cyclone Group Slurry Pump Slurry Pump Disk Filter Concentration Storage Concentration Thickener Concentration Dryer Gas Collection Secondary Ball Mill Primary Rougher Flotation Secondary Rougher Flotation Cells Cleaner Scavenger Concentrate Cleaner Flotation Cleaner Cells Tails Thickener First Flotation Cleaner Cells Second Flotation Cleaner Cells Cleaner Scavenger Flotation Cells Rougher Scavenger Flotation Cells Apron Feeder SAG Mill Primary Ball Mill Tailings Pump Tailings Storage Screen
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Project Sustainability
Management of environmental and social issues by proactively anticipating areas of concern, identification of risk and any project flaws allowing for mitigation in advance of project implementation Integration of a strong culture on sustainability and safety in the management team and build an integrated local, national and international expertise
Complete a Bankable Feasibility Study using internationally recognised standards plus a Closure Plan Prepare an EIA (Environmental Impact Assessment), SIA (Social impact Assessment) and IBA (Impact Benefit Agreement) between the government, municipality and company Obtain necessary permits and licences required by the Russian Federation
Project to be develop and operated in compliance with Russian Federation legal requirements and abide by Equator Principles and IFC Performance Standards
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Robust Project Economics
Construction
Production (Minimum)
Ore Tonnes Per Annum
Discount Rate
Concensus Ni Price (2025)
Drill Results to be added
Concentrate Production NPV 10% US$ 614.5 Million IRR 29.3% Pay Back Production Year 3 Post Tax Free Cash Flow US$ 2,041 Million Initial Capital Expenditure US$ 570.4 Million Sustaining Capital Expenditure US$ 494.3 Million
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Initial Capital Costs
Total Initial Capital Expenditures - 570.4
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Capital Cost Expenditures $US (million)
Off Mine Site Capital Expenditures Studies 5.0 BAM Rail Station 22.0 Access Road - 338 km* 135.6 Total Off Site 162.6 Mine Site Mobile Equipment Capital Expenditures Mining Equipment 57.5 Concentrate Transport (Mine to BAM) 7.6 Total Mobile Equipment 65.1
Capital Cost Expenditures $US (million)
Working Capital Expenditures Total Working Capital 39.3 Mine Site Fixed Capital Expenditures Power Generation 117.8 Ancillary Facilities 9.5 Processing Plant 133.3 Tailings Storage Facility 12.7 EPCM (Road, Power, Facilities) 14.8 Site Roads 15.4 Total Mine Site Fixed 303.5
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Life of Mine Production
LOM Production Summary – Losses and Dilution Included
Cutoff Grade – 0.4% Nickel Mining Method Waste (Mt) Ore (Mt) Total (Mt) Strip Ratio Ni (%) Cu % Co % Pt % Pd % UG 5.6 32.4 38.0 NA 0.71 0.19 0.012 0.13 0.15 OP 218.1 57.0 275.1 3.82 0.73 0.19 0.013 0.16 0.17 Total 223.7 89.4 313.1 0.72 0.19 0.013 0.16 0.17 Metal 647 kt 171 kt 11.7 kt 13.9 t 15.0 t
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Based on the March 2018 JORC resource estimate (excluding all 2018 drill results) Updated resource estimate to incorporate 2018 drilling results anticipated to result in OP only production scenario as well as extend mine life
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Project Operating Costs
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Cost Centre $US Per Tonne
Open Pit Ore 1.64 Open Pit Waste 1.29 Underground Ore 7.44 Ore Transport Mine to Mill 1.65 Processing 10.15 Tailings Handling 0.16 General and Administrative* 1.98 Concentrate Transport (Mine To BAM) 1.66 Average LOM Cost / Ore Tonne 23.04
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Project Economics
Concentrate Sale Only – Nickel Only Payable
Sensitivity NPV 10% Sensitivity (%) Nickel Price Breakeven Ni Price IRR (%) PP (Yr) Nickel Price $614.5 Base Case $8.00 / lb $6.16 29.3% 3 $1,308.7 25% $10.00 / lb Not Applicable 47.4% 2 ($49.1)
$6.00 / lb Not Applicable 8.6% 12 Operating Cost $337.4 25% $8.00 / lb $6.90 21.1% 4 $891.3
$8.00 / lb $5.22 37.0% 3 Capital Cost $470.4 25% $8.00 / lb $6.65 22.7% 3 $758.6
$8.00 / lb $5.68 38.8% 3
Concentrate Sale Break Even Nickel Price is $6.16 per pound Current nickel price is $6.50 per pound (1 August 2019) Long term consensus nickel price is $8.00 per pound
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AMUR MINERALS CORPORATE INVESTOR PRESENTATION
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Prospect for Nickel
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 Cathode chemistry is becoming evermore nickel rich as manufactures look to enhance energy density and reduce utilisation of cobalt The majority of proven and developing 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, representing 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!
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Nickel Forecast
Long Term Deficit
CRU expects a tight nickel market in the short / medium term but anticipate a large long term deficit
1.79Mt Supply
CRU estimate 1.79 Mt of additional unidentified supply is needed to match anticipated demand by 2035
17.4% CAGR
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%
Exceed US$12/lb
Wood Mackenzie has the most bullish view
exceed the US$12/lb mark by 2030
Double Value
CRU anticipate a near doubling of todays nickel price by 2027 and Consensus Economics estimate to exceed US$8/lb by 2024
Nickel Price Forecasts Nickel Metal Supply Gap 2015-2035
CURRENT SUPPLY WOODMAC NICKEL PRICE ( US$/LB) PROBABLE SUPPLY CRU DEMAND CONSENSUS ECONOMICS 14 13 12 11 10 9 8 7 6 5 5.0 4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0
2030 2035 2031 2027 2023 2019 2033 2029 2025 2021 2017 2034 2030 2026 2022 2018 2032 2028 2024 2020 2016 2015 2025 2023 2024 2022 2021 2020 2019 2018 2026 2027 2028 2029
SOURCE: CRU CONSULTING; WOOD MACKENZIE; CONSENSUS ECONOMICS
Large long term deficit prediction All forecasts predict a rise in the nickel price over the coming decade
1.79Mt
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Based on a battery chemistry of 6:2:2 – nickel, cobalt, lithium. (This chemistry is moving toward 8:1:1 to mitigate the supply cost and social problems of cobalt)
Cost impact of Ni in a medium sized EV battery
Cost of Ni in EV Battery
SOURCE: HTTPS://WW W.BLOOMBERG.COM/ OPINION/ARTICLES/2019-04-12/ELECTRIC- VEHICLE- BATTERY- SHRINKS- AND- SO- DOES- THE- TOTAL-COST
EV battery cost for U.S. medium-size car as a percentage of retail price
The Incredible Shrinking EV Battery Cost
BATTERY PERCENTAGE 100 75 50 25 2015 2016 2017 2018 2025 2019 2020 2021 2022 EVERYTHING ELSE 2023 2024
Kg of Ni (total Ni in a medium sized battery) 40kg Cost at $13.00 per kg of Ni (current price) $520 Cost at $17.63 per kg of Ni (priced used in PFS) $705 Cost impact $185
Decrease due to Economies of scale of both battery and EV car production
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Capital Intensity
NORTHMET PLATREEF FERGUSON LAKE BIRCH LAKE MAKWA MAYVILLE EAGLE’ SNEST DECAR DUMONT WEST MUSGRAVE KUN- MANIE NICKEL SHAW NTAKA HILL TAMARACK COSMOS NORTH KAMBALDA TRIDENT- ENTERPRISE LAKE JOHNSTON
$0 $50,000 $100,000 $150,000 $200,000
$ US PER ANNUAL TONNE OF PRODUCED NICKEL
$250,000 $300,000 $500,000
$44,811 $36,203 $29,049 $25,897 $23,450 $17,173 $16,542 $16,493 $16,296 $6,020 $2,368 $1,325 $52,562 $71,478 $136,165 $162,100 $305,094
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C1 Cost Curve
PAID NICKEL ( KT) NICKEL CASH COST ( US$/ LB)
8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0 324 25% 648 50% 971 75% 1,295
Amur Minerals (US$3.87/lb)
SOURCE: SNL MARKET INTELLIGENCE AMUR MINERALS CORPORATE INVESTOR PRESENTATION
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Upside Potential
Updated R&R will result in a simplified OP only operation and extending mine life Metallurgical study to generate a Copper Concentrate circuit Metallurgical study to reduce the Nickel concentrate MgO content by 2%
February 2018 PFS Economic Projections – 15 Years OP & UG
NPV 10 IRR Initial Capital Sustaining Capital Cost per Payable Ni Tonne $614.5m 29.3% $570.4m $494.3m $8,536
The Project Expected Development
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What Next
Geology Mining Beneficiation Ore Processing Engineering Environmental Technical and Economic Assessment
Approval of operational design Review and approval by Federal Executive Authorities Complete in accordance with legislative regulations and resolutions
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A M U R M I N E R A LS C O R P O R A T E I N V E S T O R P R E S E N T A TI O N
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Investment Case
The largest drill proven nickel sulphide deposit immediately adjacent China Robust PFS – post tax NPV(10%) $614.5 million, post tax IRR 29.3%, total post tax free cashflow $2,041 million
In development and startup to coincide with anticipated Class 1 nickel deficit Production scheduled to start at the beginning of a sustainable and increasing EV nickel demand requirement
Ideally positioned to supply China, Korea and Japan, the largest consumers of nickel
Strong management and Board with experience in project development in Russia Government support for the project and associated infrastructure
Nickel is currently and into the foreseeable future is the major component of grid and EV batteries Nickel price set to rise in line with rising EV and grid demand No substitution for nickel in EV and grid battery technology
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