Maxima Silica Investor Presentation April 2018 Company Overview and - - PowerPoint PPT Presentation

Maxima Silica Investor Presentation April 2018

Company Overview and History

▪ Maxima Holdings Ltd (the “Company”), through its subsidiary Sterkfontein Crushers Pty Ltd, holds a mining right on the property Bultfontein 259JQ, portion 3 (a portion of portion 1); ▪ The mine is located near Boshoek in the Bojanala Platinum District Municipality of Rustenburg District in North West Province of South Africa. It lies approximately 25km NW of Rustenburg; ▪ The silica mine was acquired in 2011. Prior to the acquisition of the silica operation by the Company, mining operations were carried on at a very small scale, typically less than 1,000 tonnes per month. Following the acquisition, the Company expended capital on refurbishing and upgrading the processing plant and embarked on a production and marketing drive to increase production in a sustainable fashion to reach a processing capacity of 5000 tonnes a month; ▪ The operating company, Maxima Silica (Pty) Ltd (“Maxima Silica”), mines, beneficiates and sells silica sand to customers in the area; ▪ The Company is 100% owned by Incubex Minerals Ltd as from 22 November 2017, a BEE compliant company with 62% BEE; ▪ The Company is managed by CEO Bruce Stride and his management team.

Incubex Minerals Ltd

100%

Maxima Silica (Pty) Ltd

(Operational Company)

Maxima Assets (Pty) Ltd

(Dormant)

100% 100% 100% Sterkfontein Crushers (Pty) Ltd

(Holder of Mining Right)

MAXIMA HOLDINGS (PTY) LTD

Corporate Structure

Mining License

• The Mining Right NW30/5/1/2/2/471MR

was granted to Sterkfontein Crushers (Pty) Ltd for silica rock minerals: ❑ The area comprises of 146.76 hectares being portion 3 (portion of portion1)

• f the farm Bultfontein 259JQ.

❑ This mining right commenced on 10 March 2014 and will continue in force for a period of 30 years ending 9 March 2044.

• The Company is currently applying for a

prospecting right on the farm to the north

• f the mining right area.

Topographic Map of the mining area

Mineral Resource

• A comprehensive drilling program was implemented in October/November 2013.
• SAMREC/JORC compliant resource study at Maxima Holdings delineated a total resource of 297 Mt

comprising the following: ❑ High Grade Ore (SiO2>97%): 26Mt (Measured), 70Mt (Indicated) and 103Mt (Inferred); ❑ Low Grade Ore (SiO2 = 90-97%): 15.6Mt (Measured), 25Mt (Indicated) and 56Mt (Inferred); ❑ The resource was valued, according to the resource statement at R296,157,132.10. Since January 2014 182,220 tonnes silica have been mined.

• Life of mine with current expansion programme will be approximately 550 years.
• A small portion of the ore body is currently being mined. The mine is open cast with benches to a

maximum height of 5m.

The Product, Marketing and Sales

• Our business provides high quality silica sand products which typically has a

silica content of greater than 98% SiO2, which is mined, processed, and prepared from an extensive ridge of Magaliesburg Quartzites. The silica rock is blasted, crushed, milled and then screened to various sizes;

• Maxima specialises in a high value silica sand product that is below 25 mm in

size, and offer a product range of 9 different sand fractions that are specially prepared, stored, bagged or transported in bulk for our clients’ requirements.

• Maxima Silica has targeted a product range which covers:

❑ A <3.00 mm product range for slimes dumps filtration, water purification, and swimming pool filters requirements; ❑ Specialized sizes in the 0.60 – 13.00mm size range for roofing, flooring, tiling, grouting and fertilizer and mining smelter applications; and ❑ A coarser 13.00mm to 19.00mm stone product for filtration bedding, landscaping and building applications.

The Product, Marketing and Sales continue…

• The product is sold and shipped in 20/40kg block bottom bags or in 1 ton bulk bags;
• The current capacity is 6 000 tonnes a month with an average of 4 000 tonnes sold monthly;
• The average rate per tonne is R360 which is estimated to increase by 10% annually;
• The Company’s biggest competition has recently closed down and therefore the Company has

received an increase in demand for product;

• The platinum and chrome mines in the area are expected to increase their volumes from 2 000

tonnes to 6 000 tonnes per month over the next 5 years bringing the silica sales up with 4 000 tonnes per month.

The Financials Statements year ending June 2017

• The Company has consolidated audited financial statements up to June
• 2017. These statements are for the group including Maxima Holdings Ltd

and Maxima Silica (Pty) Ltd;

• In terms the financial statements for the year ending June 2017:

❑ the liquidity ratios for the group are: current ratio of 0.087 and an acid test ratio of 0.054. The Company will be able to fund its short term needs through additional financing as well as though profitable operating results; ❑ the profitability ratio for the group is: Gross margin on sales of 11.69 compared to the Gross margin on sales in terms of the management accounts as at 28 February 2018 is 21.29; ❑ The loan accounts held by the shareholders in the Company is: Incubex – R18 788 985 and the other shareholder - R20 248 173. Note: Incubex purchased the other shareholder’s shares and claims in the Company via a purchase agreement on 22 November 2017. Incubex therefore has a loan account in the Company as at 28 February 2018 in the amount of R41 728 372 and 100% of the shares. Incubex shall make payments to the shareholder for the acquired shares and claims as follows:

• R2mil to be paid on or before the 31

March 2018;

• R4mil paid on or before the 31st of

December 2019; and

• R10mil paid on or before the 31st of

December 2021;

• R10mil in Incubex Shares.

The Financials continue…

Maxima Silica Balance Sheet as at 31 March 2018 Assets Fixed Assets R10,936,730.00 Cost R18,917,822.00 Accumulated Depreciation R7,981,092.00 Exploration Costs R3,041,743.00 Current Assets R5,728,954.00 Bank and Cash R378,185.00 Stock R1,735,310.00 Trade Debtors R2,640,055.00 Sundry Debtors R975,404.00 Total Assets R19,707,427.00 Equity and Liabilities Share Capital and Reserves

• R26,206,013.00

Share Capital R100.00 Share Premium R4,393,785.00 Accumulative loss this year

• R251,488.00

Accumulative loss prior years

• R30,348,410.00

Long Term Liabilities R41,728,372.00 Maxima Holdings (Incubex Loan Account) R41,728,372.00 Current Liabilities R4,185,068.00 Trade Creditors R1,974,225.00 Inland Revenue R1,784,246.00 Payments in Advance R282,678.00 Sundry Creditors R143,919.00 Total Liabilities R19,707,427.00

• The balance sheet as an

extract from the management accounts for Maxima Silica as at 28 February 2018

• The long term liability

shown as Maxima Holdings, is the loan account which Incubex holds thought the Company in Maxima Silica.

• 2000 000.00

4000 000.00 6000 000.00 8000 000.00 10000 000.00 12000 000.00 July Aug Sep Oct Nov Dec Jan Feb Mrt Apr May June

Maxima Silica Cumulative Sales Revenue

F12 F13 F14 F15 F16 F17 F18

The Financials continue…

• The Company’s cumulative sales revenue and cumulative volumes over the last 7 years from 2012 to 2018;
• The cumulative revenue as at 28 February 2018 was R10,344,605.22 and the revenue for the month of February 2018

was R1,412,845.08;

• The cumulative volumes as at 28 February 2018 was 27,845.45 and the volumes for the month of February 2018 was

3 424 tonnes.

0.00 5000.00 10000.00 15000.00 20000.00 25000.00 30000.00 35000.00 40000.00 45000.00 50000.00 Jul Aug Sep Oct Nov Dec Jan Feb March April May Jun

Maxima Silica Cumulative Volumes

Expansion Project

▪ The expansion project will see the plant upgraded and expanded to be able to reach a new monthly capacity of 30,000 tonnes which will see profits increase. ▪ The plant is currently undergoing phase 1 of the expansion project which will immediately increase the average silica production by 6 000 tonnes per month and the capacity of 12 000 tonnes per month. ▪ Phase 2 of the expansion project will further increase the production to 24 000 tonnes per month within the first year after completion. ▪ A total investment of R17million is needed to complete the expansion project (“New Investment”). ▪ Incubex has been funding the expansion project and has up to date funded R5.4mil which brings the total investment outstanding to complete the project to R11.5mil.

Proforma Financials after New Investment

▪ The net present value of the New Investment using a discount rate of 8% and the expected profit before tax for the next 10 years is R211,014,822.91. ▪ The net present value of the New Investment using a discount rate of 10% and the expected profit before tax for the next 10 years is R184,590,037.21. ▪ The New Investment’s internal rate of return using the expected profit before tax for the next 10 years is 83.06%. ▪ A pay-back period of 24 months has been estimated for the New Investment. Value Curve

Contact Information

• CEO, Bruce Stride:

082 562 4421, bruce@maximasilica.co.za

• Sales and Marketing Manager, Yolandie Kleingeld:

071 101 4838, yolandiekleingeld@maximasilica.co.za

• Website:

www.maximasilica.co.za

• Address:

Portion 3, Farm 259-JQ, Bultfontein, Boshoek, North

• West. PO Box 3479, Brits 0250