Investor Presentation - Asian Roadshow 10 September 21 September 2012

Transcription

1 Investor Presentation - Asian Roadshow 10 September 21 September 2012 George Bauk Managing Director/CEO

2 Important Notice This presentation has been prepared by Northern Minerals Limited ( Northern Minerals or the Company ). It should not be considered as an offer or invitation to subscribe for or purchase any securities in the Company or as an inducement to make an offer or invitation with respect to those securities. No agreement to subscribe for securities in the Company will be entered into on the basis of this presentation. This presentation contains forecasts and forward looking information. Such forecasts and information are not a guarantee of future performance, involve unknown risks and uncertainties. Actual results and developments will almost certainly differ materially from those expressed or implied. Northern Minerals has not audited or investigated the accuracy or completeness of the information, statements and opinions contained in this presentation. Accordingly, to the maximum extent permitted by applicable laws, Northern Minerals makes no representation and can give no assurance, guarantee or warranty, express or implied, as to, and take no responsibility and assume no liability for, the authenticity, validity, accuracy, suitability or completeness of, or any errors in or omission, from any information, statement or opinion contained in this presentation. You should not act or refrain from acting in reliance on this presentation material. This overview of Northern Minerals does not purport to be all inclusive or to contain all information which its recipients may require in order to make an informed assessment of the Company s prospects. You should conduct your own investigation and perform your own analysis in order to satisfy yourself as to the accuracy and completeness of the information, statements and opinions contained in this presentation and making any investment decision. Information that relates to exploration results has been compiled by the Company and is based on information provided by Robin Wilson, an employee of Northern Minerals, who is a member of the Australasian Institute of Mining and Metallurgy. All information of this type is expressed in terms of the 2004 edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Robin Wilson 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 2004 edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Wilson consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. All RC drill results quoted in this presentation from Browns Range have been determined using a 0.2% TREO cut off and a maximum of 1m internal dilution. All diamond drill results quoted in this presentation from Browns Range have been determined using a 0.15% TREO cut off and a maximum of 2m internal dilution. TREO = Total Rare Earth Oxides Total of La 2 O 3, CeO 2, Pr 6 O 11, Nd 2 O 3, Sm 2 O 3, Eu 2 O 3, Gd 2 O 3, Tb 4 O 7, Dy 2 O 3, Ho 2 O 3, Er 2 O 3, Tm 2 O 3, Yb 2 O 3, Lu 2 O 3, Y 2 O 3 2

3 Agenda Company Overview Value Proposition Rare Earths Market Browns Range - Pathway to Production John Galt Gardiner-Tanami Project In Summary 3

4 Capital Structure ASX Codes NTU Ordinary Shares 213.5M* Listed Options NTUOA $0.20 expires 30 Sept M Unlisted Options and Performance Rights Various prices and expiry dates 18.0M # Trading Summary Market Capitalisation (in AUD) (as at 6 September $0.295) 52 week trading range (in AUD) Daily Traded Volume (average over 3 months) Balance Sheet Cash (30 June 2012 in AUD) No Debt $63M $0.24-$ M $9.2M Major Shareholders Conglin Yue 16.1% Lynas Corporation 7.1% CQS 5.8% Board & Management 5.8% *includes 4.7M restricted shares issued under the share plan # includes 9M performance rights, with hurdles 4

5 Board & Management George Bauk Adrian Griffin Kevin Schultz Dudley Kingsnorth Colin McCavana Managing Director / CEO Non Executive Director Non Executive Chairman Non Executive Director Non Executive Director years mining operation and corporate experience - Specialising in mine management and production - Formerly Managing Director Polaris Metals years experience in the Rare Earth Industry - Former Managing Director Haddington Resources - Former MD Indago Resources, CFO Arafura, WMC - Managing Director Midwinter Resources - Chairman Potash West - Global industry experience, multi commodity - Geologist and mining engineer - MD of IMCOA, Past editor of Roskill REE Report - Former Chairman of Amex Resources - Mine production and operations management experience - Chairman Reward Minerals - Metallurgist Robin Wilson Exploration Manager - Geologist with 20+ years exploration experience - CRA, Woodside, Tanganyika Gold, Troy Resources Robin Jones Project Manager - Engineer with 20+ years project development from scoping to operations - Impala Platinum, Aquarius Platinum, Copper Co, Mega Uranium Robert Sills Commercial Manager - Experience in marketing, negotiation and commercial - Arafura Resources, Rio Tinto, Goldcorp 5

6 Value Proposition Vision To become the global benchmark in the production of heavy rare earth elements for the benefit of all our stakeholders Strategy $90M concentrator built at Browns Range Project by end of 2014 To produce and deliver sufficient supplies of HRE for a diverse portfolio of strategic offtakers through production at Browns Range by Plan Pathway to Production Maiden JORC Code Compliant resource Ongoing exploration to build mineral inventory Complete Pre-Feasibility Study at Browns Range Project Advance discussions with potential strategic off-take partners 6

7 High Value Heavy Rare Earths Point of difference Heavies Browns Range Project Distribution of Rare Earths at Browns Range. Wolverine (March 2012) Outstanding Drill Results Wolverine: 2.18% TREO (2,072ppm Dy 2 O 3 ) from 96m (to EOH) including 5.35% TREO (5,151ppm Dy 2 O 3 ) from 112m (to EOH), 1.53% TREO (1,470ppm Dy 2 O 3 ) from 54m, 1.01% TREO (881ppm Dy 2 O 3 ) from 24m, 1.77% TREO (1,619ppm Dy 2 O 3 ) from 114m Gambit: 4.15% TREO (4,161ppm Dy 2 O 3 ), 2.07% TREO (1,943ppm Dy 2 O 3 ) from 35m, 1.19% TREO (1,130ppm Dy 2 O 3 ) from 51m Area 5: 2m@ 13.9% TREO (13,112ppm Dy 2 O 3 ) from 4m Coupled with a low capital/ operating cost Mt Weld Project Demonstrating a mineral concentrate of >30% TREO Mt Weld REO composition data above sourced from Lynas Corporation website Xenotime 7

8 Two key heavy rare earths 66 Dy Additive for NdFeB magnets to increase performance at high temperatures ie. hybrid vehicles and wind turbines Dysprosium Hybrid Vehicle Motor 39 Y Possesses high melting point and ideal for energy efficient lighting in the substitution of traditional incandescent light globes Yttrium Compact Fluorescent Lamp 8

9 HRE Global Critical Status Dysprosium Dysprosium identified as critical by the US Energy Department, triggering US action. Confirmed as significant component of China strategic stockpile, commencing July Substitutes give inferior performance and will take years to develop commercially. OEM s in Japan and USA seeking security of supply to continue production/r&d programs eg wind turbines and electric vehicles Yttrium Northern Minerals HRE projects attracting the attention of global lighting producers. Security of supply is essential for national government s to fulfill obligations to achieve greater energy efficiency. Essential component in a wide range of applications: - Phosphors for computer and LED monitors - Energy efficient lighting Short-Term (0 5 years) Criticality Matrix Source: US Department of Energy Critical Materials Strategy, December The US Government taking action: The National Strategic and Critical Minerals Production Act, HR 4402 passed by US House of Representatives July The National Strategic and Critical Minerals Production Act, HR 4402, aims to restrict the National Environmental Policy Act to a 30-month review period for new projects and establish a 30-day deadline for the public comment phase. When passed by the US Senate will underpin the Critical Minerals Policy Act of 2011, calling for the re-establishment of a competitive domestic rare earth mining, processing and refining industry to support the growth of clean technology, manufacturing and the defence sectors in the USA. Additionally US supply chain participants seeking timely feed from US friendly jurisdictions. 9

10 Global policy driving demand Kyoto Protocol CO 2 = Emission reduction 10

11 HRE supply shortfall Strong Demand, Limited Supply Strong demand but where s the supply? China to eliminate inefficient and dirty processing by eliminating 20% domestic capacity (China Min of Com August ). LREO:HREO split in China export quotas exacerbating HREE shortage. Reduced from 3,823t (1H 2012) to 1,233t (2H 2012) China to become rare earth net importer by 2014 (Reuters July ). Sustainable Prices Prices for HREO holding strong. Browns Range HRE content still without a peer. Strong demand globally China/Non-China Exclusively hi-tech applications. Few substitutes, none commercially Price premium anticipated to continue due to unique HRE supply/demand dynamics for product in tight supply Source: Metal Pages China FOB REO prices NOTE: These values have been calculated on Metal Pages China FOB fully separated oxide prices and published in-situ rare earths distribution values. The chart does not imply fully rare earths recovery and its purpose is primarily for comparison between rare earths projects. 11

12 Browns Range Project Northern Minerals 100% ownership and marketing rights (excluding Toro JV) Entered into Joint Venture with Toro Energy on 7 tenements in NT to earn up to 80% by completed FS Significant new HRE discoveries in Focus to date on the Western Australian tenements, NT Tenements granted in August 2012 in the eastern portion of Browns Range Dome 12

13 Stakeholder Engagement / Environment Stakeholders Engagement Heritage Survey completed in July approving the balance of our 2012 Browns Range program 2 Cultural Awareness Workshops completed, onsite workshop planned for October Employed 7 people from Ringer Soak/Halls Creek Meetings held with various ministers at a Federal and State level Environmental Studies and EIS Baseline flora and fauna studies Groundwater and surface water studies Baseline soil survey and waste rock geochemical characterisation Baseline air quality and meteorological characterisation 13

14 Flowsheet Development Beneficiation Process Successful testwork by Nagrom indicates excellent recovery (>80%) across head grades ranging from ~0.25% to ~1.0% High-grade mineral concentrate containing 30% TREO produced Optimisation testwork underway Hydrometallurgical Process Preliminary testwork by ANSTO and Nagrom positive Exceptional mineral concentrate feed significantly reduces the mass of material to be treated, reducing capital and operating costs Mineral concentrate substantially upgraded to a high purity mixed chemical concentrate. NOTE : The desktop capital study which assumed a 0.75Mtpa plant was conducted by Bateman following ongoing JORC resource drilling and metallurgical studies, to produce a conceptual flowsheet. At this stage the company has not yet estimated a JORC resource. Accordingly inferences to production should not be used as a basis for investment decisions about shares in the company. 14

15 Ore Mineral Concentrate 30% TREO Mixed Chemical Concentrate Separated RE Oxides Simplified Process Flowsheet Rare Browns Earth Range Upstream HRE Project and Mid Stream Simplified Supply Process Chain Flowsheet and Process MINING BENEFICIATION Pathway to HYDROMETALLURGY REFINING Production 2015 Crushing Sulphation Bake Open Pit Grinding Magnetic Separation Water Leach Purification Solvent Extraction Flotation Oxalate Precipitation Calcination HRE rich Xenotime Mineralisation >80% recovery 30% TREO in concentrate Significantly upgrades mineral concentrate Numerous facilities available by others NOTE : The conceptual simplified process flowsheet has been developed by Tenova Bateman following ongoing metallurgical test work and studies. At this stage the company has not yet estimated a JORC resource. Accordingly inferences to production should not be used as a basis for investment decisions about shares in the company. 15

16 Pathway to Production 16

17 Browns Range Landsat 17

18 Browns Range Wolverine East-west trending quartz breccia fault zone - HRE mineralisation identified over a strike length of 200m and widths of 2-25m. Best drill intercepts to date: 2.18% TREO (2,072ppm Dy 2 O 3 ) from 96m (to EOH) 1.53% TREO (1,470ppm Dy 2 O 3 ) from 54m 1.01% TREO (881ppm Dy 2 O 3 ) from 24m 1.77% TREO (1,619ppm Dy 2 O 3 ) from 114m 18

19 JORC Resource Drilling Wolverine Drilling re-commenced at Wolverine in June 2012 (RC and Diamond) results pending Diamond drilling testing for mineralisation at depth and RC drilling to test for east and west strike extensions Visual indications and field portable XRF measurements indicates mineralisation down to approximately 150m vertical and open at depth Further drilling planned at Wolverine in September/October 2012 including metallurgical drilling 19

20 Browns Range Gambit 57 RC Drill holes completed in 2011 and 3 Diamond drill holes in within area 600m x 200m of 2km long soil geochemical target Multiple mineralised zones with complex geometries pipelike plunging shoots (38m 4.15% TREO) Further RC and Diamond drilling from September 2012 to define full extent of mineralisation, leading to resource definition drilling. 20

21 Browns Range New Targets Area 5 Diamond and RC drilling completed assays pending Mystique First-pass RC Drilling completed (assays pending) 1km long soil geochemical target Banshee RC Drilling currently underway high grade HREE (up to 14% TREO in rock chips) RAB drilling of further new targets defined by soil geochemistry and rock chip sampling (up to 7.76% TREO) to commence in September

22 Pipeline of Prospects Production Reserves Resources Gambit Wolverine Area 5 North Area 5 Significant Drilling Intersections Banshee Mystique Wolverine East Wolverine West Nightcrawler Rogue Cyclops Sabretooth Wolverine North Browns Range Dome Geochemical or Geophysical Drill Targets Conceptual Targets 22

23 Regional HRE Granting of NT tenements in August 2012 in the eastern portion of the HREE prospective region of Browns Range Dome. Reconnaissance HREE exploration program planned to commence on new NT Browns Range tenements in late airborne geophysics and reconnaissance mapping and sampling Boulder Ridge HREE prospect identified in historical reports reported rock chips up to 21.7% TREO (south of Gardiner-Tanami NT tenements) 23

24 John Galt HRE Project Northern Minerals has option to acquire 100% of the project Similar mineralisation to Browns Range high value HRE in xenotime Xenotime-hosted mineralisation identified at three different zones by previous explorers Historical drilling results at only zone drilled (Main Zone): # TREO Total Rare Earth Oxide as calculated by the previous explorer using what was termed the Yttrium Ratio Method. In the original work on samples of John Galt Main Zone mineralisation it was found that after assaying for a suite of REE a consistent ratio existed between the total rare earth content and the yttrium content. By assaying the yttrium (Y) content of each sample using XRF techniques it is possible to estimate the total rare earth content, based upon that consistent ratio between Y and TREO. It should be noted that it was estimated that the accuracies range from +/- 15% for high concentrations and +/- 20% for low concentrations. 1.58% TREO 3.48% TREO 24

25 John Galt HRE Project Rock chip samples up to 42% TREO with approximately 95% Heavy REO Preliminary metallurgical tests indicate excellent recovery rates (>90%) with potential for concentrate grades >40% High grade mineralisation in talus (scree) material hard-rock source of scree is the primary target. Initial drill program finalised awaiting heritage and statutory approvals proposed to commence in October

26 Gardiner-Tanami Project Gold Process underway to seek potential investors for the Gardiner-Tanami Project Initial divestment flyer due to be distributed in September Project located within Tanami Arunta region a world-class gold province, with several plus million ounce deposits (Callie ~7m oz, Granites, Tanami) Gold geochemical soil anomalies defined in the Don-Venus prospect area Contiguous land package covering over 12,000 km 2 26

27 In Summary Strategy Browns Range Project To produce and deliver HREO concentrate in Pathway to Production Deliver JORC resource at Browns Range Ongoing exploration to build mineral inventory Complete Pre-Feasibility Study Advance HREO strategic off-take partner discussions Our Advantage HRE distribution Simple flowsheet Superior HREO concentrate grade >30% Strong demand and pricing for HREO Distribution of Rare Earths at Browns Range. Wolverine (March 2012) 27