Updated Investor Presentation Noosa Mining Conference November 2019 - - PowerPoint PPT Presentation

Noosa Mining Conference July 2019 Updated Investor Presentation

November 2019

Investment Rationale

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

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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 Oct 2019 – Completion

• f Stage 2 DFS

A$47.5M Loan Facility from NAIF

2019 Achievements

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Stage 2 DFS Expansion Operational Performance Reducing Operating Cost Production Increase Revenue/EBITDA Growth

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Production Increase

2.0 3.5 4.0 6.0 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 2018 Actual 2019 2020 2021

Stage 2 Subject to Board Approval

Million tonne

124 151 329 311 427 374 443 463 476 455 501 497 479 504 2779 2755 500 1000 1500 2000 2500 3000

K WMT

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Operational Performance

April June YTD May

2019 YTD Production and Shipped Bauxite

July

• Shipped
• Mined

September August October

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

Reducing Operating Cost

2019 Qtr Operating Costs & Realised Prices

23.47 18.62 20.4 22.94 21.82 22.23 57.26 56.22 56.51 10 20 30 40 50 60 70 June Qtr Sept Qtr YTD

A$/WMT

Site Costs Non-Site Costs Average Sales Price Received

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

Revenue/EBITDA Growth

48.4 79.5 127.9 20 40 60 80 100 120 140 Jun Qtr Sep Qtr YTD

A$M

Revenue

5 10 15 20 25 30 35 Jun Qtr Sep Qtr YTD

A$M

Site EBITDA

31.4 22.3 9.1

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Source: IAI, CM Analysis

Stage 2 DFS Expansion Outcomes

6.0M WMT pa



Significant economic benefits confirmed



LOM unit operating costs forecast to reduce by ~18% delivered to China – margins increased



Positions Bauxite Hills in lowest quartile of global cash cost curve for bauxite producers



Significant reduction in unit operating costs delivered via Floating Terminal loading larger Ocean-Going Vessels

Funding



A$51.4 M Capital Costs (incl 10% contingency)



Project Payback <18 months



Approval from NAIF received for $47.5M facility



Final decision to proceed after finalisation and completion of detailed engineering & design

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Source: IAI, CM Analysis

Stage 2 – Capital Cost Estimates

Capital Cost Estimates* Category Cost (A$M) Floating Terminal Direct Cost 38.0 EPCM Contract 2.0 Contingency (10%) 3.9 Cost of Floating Terminal 43.9 Camp Modifications & Expansion 1.0 Upgrade Port & Barge Loading Facility 4.8 Mobilisation Costs 1.0 Other Contingency (10%) 0.7 Total Estimated Cost 51.4 *Assumed exchange rate of A$/US$0.70 Floating Terminal – Capital Cost Estimates Category Cost (US$M) *Cost (A$M) Total Component Parts 12.5 17.9 Shipyard Costs 8.7 12.4 Other Services 1.9 2.7 Costs ex Shipyard 23.1 33.0 Mobilisation to Skardon River 2.6 3.7 Start-up and Commissioning 0.9 1.3 Total Direct Costs 26.6 38.0 EPCM Costs 1.4 2.0 Contingency 2.7 3.9 Total Estimated Costs (US$M) 30.7 43.9 *A$/US $0.70 Exchange Rate

Source: IAI, CM Analysis

Stage 2 Expansion – Floating Terminal

Floating Terminal by Rocktree for indicative purposes only

Bauxite Hills Mine Snapshot

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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 2037 Operations Mining & transhipment Workforce ~240 personnel

1.ASX Release 14 October 2019 2. Subject to Board Approval of Expansion to Stage 2

Location

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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
• Stage 2 Definitive Feasibility Study complete – compelling financial metrics
• Detailed design on the floating Terminal underway
• NAIF facility to fund majority of capital costs
• Depletion by mining
• Adjustment to dry bulk density
• Measured category up 42.8%

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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

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Source: CMGroup

China Demand Outlook Remains Strong

Source: CM Group

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• 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 cost

trending upwards

• 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

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Source: CM Group

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

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Source: CM GROUP

CBIX Bauxite Index – Last 12 Months

Bauxite Market & Price Outlook

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

42.0 44.0 46.0 48.0 50.0 52.0 54.0 56.0 CBIX PRICE US$/DMT

CBIX Bauxite Index – Last 15 Months

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 Relationship continues to

grow and flourish

 Metro a key part of

Northern Cape York Community

 Current Indigenous

employment is 36.1% (target 20%)

 Business opportunities for

indigenous groups being assessed with one already in place

Positive Community Relationships

Investment Rationale

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Strongly Growing Market Long Life Mine Enduring Geographical & 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 19.8% 16.2% 10.2% 5.6% 6.0% 42.2%

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Share Register

Greenstone Balanced Property BlackRock DADI Other Institutions Other Shareholders Share Price (12 November 2019) A$0.135 Shares on Issue 1,383.4M Market Capitalisation A$187.0M Options Unlisted 30.1M Cash and Receivables (30-Sept-2019) A$43.5M Debt Facilities A$37.9M Enterprise Value A$181.4M

Capital Structure Share Price Performance

Price ($) Volume (m)

Board of Directors

Independent Chairman Stephen Everett Managing Director & CEO Simon Finnis Non-Executive Director Mark Sawyer Independent Non-Executive Director Philip Hennessy Independent Non-Executive Director Lucas Dow Independent Non-Executive Director Fiona Murdoch

Share Price & Corporate Structure

Share Price Performance

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 22 | ASX : MMI | November 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. Graphs used in this ASX Presentation (including data used in the graphs) are sourced from third parties 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 Presentation 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 Presentation 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.

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