The Kipawa HREE-Y-Zr Deposit. Annual General and Special Meeting June 28, 2012

Transcription

1 The Kipawa HREE-Y-Zr Deposit Annual General and Special Meeting June 28, 2012

2 Cautionary Statement Concerning Forward-Looking Statements This document contains forward-looking information including without limitation statements relating to mineral reserve estimates, mineral resource estimates, realization or mineral reserve and resource estimates, capital and operating costs estimates, the timing and amount of future production, costs of production, success of mining operations, the ranking of the project in terms of cash cost and production, permitting, economic return estimates, potential upsides, and the future price and supply and demand for rare earths. Readers should not place undue reliance on forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Corporation to be materially different from any future results, performance or achievements expressed or implied by the forwardlooking statements. The preliminary economic assessment study results are estimates only, are preliminary in nature and are based on a number of assumptions, any of which, if incorrect could materially change the projected outcome. Until a positive feasibility study has been completed, and even with the completion of a positive feasibility study, there are no assurances that Kipawa will be placed into production. Factors that could affect the outcome include, among others: the actual results of development activities; project delays; inability to raise the funds necessary to complete development; general business, economic, competitive, political and social uncertainties; future prices; alternative rare earth sources or substitutes; actual rare earth recovery; conclusions of economic evaluations; changes in project parameters as plans continue to be refined; accidents, labour disputes and other risks of the mining industry, political instability, terrorism, insurrection or war; delays in obtaining governmental approvals, necessary permitting or in the completion or development or construction activities. Although the corporation has attempted to identify important factors that could cause actual actions, events or results to differ materially for those described in forward-looking statements, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. Forward-looking statements contained herein are made as of the date of this presentation and the Corporation disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events or results or otherwise, except as required by applicable securities laws. NI Compliance The technical information pertaining to the Kipawa HREE Project in this presentation is based on the news release entitled Matamec PEA Study Shows Robust Economics for the Kipawa HREE Project published on January 30 th, 2012 that describes the results of the Kipawa HREE Project Preliminary Economic Assessment ( PEA ) study and was prepared in accordance with Canadian regulatory requirements by, or under the supervision of Guy Saucier, ing. of Roche Ltd. 2

3 André Gauthier President and CEO 3

4 Management and Technical Team Board of Administration 6 members President and CEO André Gauthier (2003) Vice-president, Exploration Aline Leclerc (2003) Vice-president, Project Development and Construction Bertho Caron (2012) Director of Metallurgy Paul Blatter (2012) Metallurgist Eliza Ngai (2011) Consultant Metallurgist Al Hayden (2011) SENES Consultant Grant Feasby (2011) Director of Environment Sylvain Doire (2012) Regional Relations Coordinator Claude Brisson (2012) Director of Investor Relations Caroline Wilson (2011) 4

5 Properties: from Gold to Rare Earths Year of Acquisition - Sakami Lesperance 2003* - Zeus 2003* - Tansim 2003* - Vulcain 2003* - Valmont 2003* - Montclerg Matheson JV Wachigabau * Brought by Andre Gauthier, president & CEO 5

6 Rare Elements: Properties Properties of Rare Earth Elements Reduces Weight Emissions Energy Consumption Allows Greater Efficiency Performance Miniaturization Speed Durability Thermal Stability 6

7 Other Rare Earth Projects Competition (2012) Kipawa Deposit 7

8 Financial Analysis Total At-mine Revenue Pre-production Capital Expenditures Sustaining Capital Expenditures Initial Working Capital Requirement Mine Reclamation Costs Total Operating Cost Total Before-tax Cash Flow Before-tax 8% Before-tax 5% Before-tax 10% Base Case (million CAD) 2, , , Before-tax IRR (%) 36.9 Before-tax Payback Period (years) 2.4 Er 0.02 Ho 0.01 Tm 0.00 Yb 0.00 Dy Dy 0.44 Er Tb Gd Lu 0.02 Tm Yb Y 0.07 Ho Eu Ce 0.02 Sm La 0.02 Nd 0.16 Tb 0.14 Lu Y Pr Revenue Pr 0.05 Eu 0.03 Nd Sm 0.00 Gd 0.01 Ce La Critical Elements (DOE) Production 8

9 Kipawa Deposit: Toyota Tsusho Corp., a strategic partner Mutual collaboration to accelerate the development of the Kipawa Deposit MoU signed on December 7 th, 2011 Amendment to MoU signed on Feb 28, 2012 binding the parties and payment of 1.5M CAD received from TTC Ongoing negotiations for a JVA and conclusion planned for July 11, 2012 For Toyota: secures a Heavy REE supply for the production and marketing of hybrid and electric vehicles The goal is for the Kipawa Deposit to be in production for 2015 Technical assistance will be provided (critical to fast track the project) An eventual JV between TTC and Matamec (TTC: 49%-Mat: 51%) Having paid for an independent and definitive feasibility study, TTC will arrange the financing through to production and sign an off take agreement to buy 100% of a mixed rare earths oxide concentrate 9

10 TTC REE Supply Chain Including Kipawa Deposit Process Flow TTC Client Partners Ore Mixture Oxide Metal Alloy Magnet Catalyst Product Scrap Indian Rare Earths Kipawa Deposit (Binding MOU - MAT:51%-TTC:49%) India SX Plants PJ Separation Plant Dong Pao Mine Exploration PJ (Vietnam) Magnet Manufacturer Rare Earth Compound Manufacturer Vietnam Electrolysis PJ Japanese EV Alloy Manufacturer Catalyst Corp. Magnet Manufacturer Toyota Motor Exhaust Gas Catalyst Battery Motor Manufacturer Collection/ Processing Partner Vertically Integrated from the Mine to the Car 10

11 REE: 5 Critical Elements for 4 Clean Energy Technologies La Ce Pr Nd Sm Eu Gd Tb Dy Ho Er Tm Yb Lu Y HV electric motor & generator Neodymium Praseodymium Terbium Dysprosium Source: U.S. Department of Energy, Critical Materials Strategy, Dec

12 Claude Brisson Regional Relations Coordinator 12

13 Importance of Awareness and Access to Information 30 Meetings held as of today in 2012 with 251 participants Conference in the following schools: G. Théberge, l Envol, Rivière-des-Quinze et Marcel Raymond; 4 Site visit with stakeholders; 8 Harmonization table and follow-up meetings (since Jan 2011) Opening of Matamec s Temiscaming offices 2 public meetings (1 in Temiscaming and 1 in Kipawa) 13

14 Aline Leclerc Vice-President, Exploration 14

15 Kipawa HREE Project Localization Rouyn-Noranda Val d Or Mining services are found in the Sudbury, Rouyn-Noranda and Val d Or Sudbury Témiscaming North Bay Kipawa Deposit Témiscaming - Québec (Pop. 3,000) - 50 km west of the Kipawa Deposit by logging roads - Tembec dissolving pulp and chemical by-product mill (over 950 employees) - Infrastructure: Hydo-Quebec electric grid and Ottawa Valley Railway North Bay - Ontario (pop. 55,000) - 68 km S-E connected to Témiscaming and the larger metropolitan centres in Ontario and Québec by a good highway - Infrastructure: largest airport north of Toronto, high capacity rail freight service by CN-CP-OVR-ON and northern Ontario office of Kuehne+Nagel Ottawa Montréal 15

16 Zeus Property Upside: REE-Y-Zr-Nb-Ta Surprise/Surprise north showings Area south of Kipawa deposit Falaises/Couleuvre/Coin showings Tower Hill (TH) showings Certitude and new targets TTC may negotiate in good faith to participate in the exploration and development of all other REE prospects found on the Zeus property Surprise showing best channelled interval: 5.3% TREO (66% HREO+Y/TREO) 3.6% Zr - 3.9% Nb 16

17 Zirconium Zone New Mineral Resource Update Schematic Cross- Section with TREO enriched envelopes SW TREO Enriched Zones NE Mining open pit, low strip ratio, small op 2011 discovery Deposit Open Laterally and at Depth 17

18 HREE Kipawa Project Resources Longitudinal N Dark Blue= 0-1 Light Blue= 1-2 Yellow = 2-3 Light Orange = 3-4 Dark Orange = 4-5 Etc 18

19 Bertho Caron Vice-President, Project Development and Construction 19

20 Kipawa HREE Project Mine Site - Open Pit Design Production Units Average Total In-pit resource mined Tonnes 19,004,000 Strip Ratio Waste : Ore 1.42:1 Tonnes processed (4100 t / jr.) Mt 1,5 19,004,000 Grade % TREO Mineral concentrate grade % TREO 1.11 Recovery 81% Mixed TREO concentrate In-pit net tonnes 5,072 65,937 Average ($ /kg TREO) NMR * 149 Mining Processing G&A Site Cost - Tailings Site Cost Transport Cash Cost Production mixed TREO concentrate 5072 t/y *NMR : Net Metal Return (grade x recovery x revenue) Year:

21 Kipawa Mine Project Economic and Social Benefits CAPEX Construction and commisionning costs : 350 M$ CAPEX Usually 10% to 15% directly in the region Jobs Direct contracts Consulting contracts Other goods and services OPEX Mine and Plant Operational Costs : 85 M$ à 90 M$ / year Jobs Approx. 220 people or 25 M$/y salaries Add 5 to10m$ for: Taxes Direct contracts (Road maintenance, security, other maintenance, transportation ) Other indirect goods and services SOCIAL Bring and keep young work force in the region 21

22 Kipawa Mine Project vs. Osisko Malartic Mine Daily production in tonnage Daily tonnage transported to plant Kipawa Mine Project 10, ,000 4,200 55,000 Strip ratio 1.42 : : 1 Blasting (twice a week) Tonnage 36, ,000 Osisko Malartic Mine Truck Fleet (3 or 4) 50 tonne trucks (21 ) 250 tonnes trucks Tailings Pond (m3) mine life 12,000, ,000,000 22

23 Plan Régional Témiscaming - Kipawa Temiscaming Regional Map - Kipawa 23

24 Kipawa Project Site 24

25 Hydrometallurgical Plant Location #4 25

26 Paul Blatter, Director of Metallurgy Eliza Ngai and Al Hayden 26

27 Recovery of Rare Earth Elements from Kipawa Ore 1. Ore Processing at Mine Low Impact Magnetic Concentration Method 2. Transport of Magnetic Concentrate to Temiscaming 3. Chemical Extraction of Rare Earth Elements using Weak Acid 4. Secure Disposal of Mineral Wastes 27

28 Kipawa Site: Ore Processing Ore is crushed with a crusher and ground in a rotating mill. Fine particles are sent to a weak magnetic separator Weakly magnetic concentrate to tailings A strong magnet separates the rare earth minerals from the rest of the ore. The concentrated rare earth material (35% of ore) is pumped to Temiscaming Tailings to a secure facility; All water is recycled into the process 28

29 Kipawa Site: Ore Processing Plant Blasted Ore Ore Crushing Grinding (AG/SAG) LIMS LIMS Cleaner Reject Dewatering Rare Earth Concentrate Tailings Area Hydro Plant HIMS Concentrate Dewatering Recycle Water 29

30 Temiscaming Site: Rare Earth Recovery Plant Concentrate is ground and leached in weak sulphuric (battery) acid to dissolve the rare earth bearing minerals. Material is filtered to separate liquids from solids. Solids (barren of rare earths) are neutralised with lime for secure disposal; water is recycled. The leach solution, containing the rare earth elements, is partially neutralised to remove some of the dissolved impurities. Purify solution and precipitate rare earths metals. Prepare a dry concentrate for international markets e. g. Toyota Tsusho. 30

31 Temiscaming Site: Hydrometallurgical Plant Concentrate Acid & Water Concentrate Grind Concentrate Leaching Solution Pre- Neutralisation Dewatering Impurities Removal Lime Rinsing & Dewatering Neutralisation Waste Management Recycle Water RE Precipitation Impurities Removal Filtration & Drying RE to TTC 31

32 Metallurgy Summary 1,500,000 tonnes of rare earth minerals ore per year Approximately 35% of the mass is transported to Témiscaming hydrometallurgical plant for rare earth extraction No chemical treatment or transformation at the Kipawa plant Rare earths are chemically extracted from mineral concentrate with weak acid. Solution is purified twice to remove the impurities from the solution leaving only the rare earth metals A dry solid containing the rare earth elements is produced Approximately 5,000 tonnes per year of concentrate is shipped to Toyota Individual metals are separated in Asia. 32

33 Simplified Flowsheet Kipawa HREE Deposit Crushing Purification Solution Rare Earth Precipitation Magnetic Separation Acid 99%+ REE Carbonate Water REE dissolution Solid/liquid Separation 33

34 Sylvain Doire Director of Environment 34

35 Environment Before starting up a mine - Laws and regulations (provincial and federal) - Social and environmental impact studies - Restoration plan and financial guarantees - Permit applications (MDDEP) Times have changed! 35

36 Phase 1 : 36

37 Phase 2 : 37

38 CA acquisition Steps and Content Project Presentation Project Description Company identification Project summary Mining Residue Management Residue Accumulation Area Water Management Tailings caracterization Localization Mine water Management Description of waste Applicant identification Deposit techniques evaluation management Infrastructures/ameniti Prevention of acid Exploitation of Project name es mine drainage accumulation areas Cyanide management Exploitation of tailing Work localization Drinkable water plan ponds Monitoring of Land properties Wastewater management plan Segregation of water Water treatment Final effluent Water balance Description of the environment Components of the aquatic environment Other components of the natural environment Components of the human environment Administrative aspects Overburden Ore extraction Ore and concentrate Ore or concentrate storage area Ore processing plant Underground water Air emissions Waste management Hazardous materials management Impacts and mitigation measures Restoration work Response plan during a spill 38

39 Where are we at? - First characterization of the environment in Meetings with the social environment since 2009; population, MRC, municipalities, Aboriginal Communities. - Environmental Impact Study: early April Spring work -Current and future studies 39

40 Area Under Study 40

41 Water Quality Before-During-After Monitoring Québec : Ministère du Développement Durable et des Parcs : Directive 019 Canada : Environment Canada : Metal Mining Effluent Regulation 41

42 Kipawa Deposit: A Small Environmental Footprint 42

43 Grant Feasby SENES Consultant 43

44 Kipawa Eudialyte Ores ~ parts/million Uranium (*30) ~ parts/million Thorium (*270) * average 44

45 What do these Uranium and Thorium Contents Tell Us? Classified as Naturally Occurring Radioactive Materials NORM Canadian and International rules for NORM Determine radioactivity levels (in this case low) Determine potential radiation exposures to people and environment... Some context 45

46 Uranium and Thorium are Everywhere.. (parts/million) Where? Uranium Thorium Ocean Fresh Water Rocks Soils Mineral Deposits ,000 1,000 60,000 Kipawa

47 Kipawa Project Mining/Milling Kipawa Wet Magnetics Concentrate Transport Secure Tailings Disposal > Half of radioactivity will remain at mine site Metallurgical Temiscamingue Weak acid process Solution purification Rare Earth Concentrates Secure disposal of solid residues containing remaining radioactivity 47

48 Communities Need Protection of the land water, air, food from contamination by radioactive materials Protection of people from radioactivity No need for continuous care and surveillance 48

49 Radioactivity Everything around us (including you and me) is radioactive. We live in a sea of radioactivity Radiation Dose = exposure rate x time = millisievert (msv) Dr. Rolf Max Sievert

50 Some* radioactive elements Potassium (K40) Where we find them Rocks, bananas, fertilizer Thorium (Th232) Rocks, soils, lantern mantels Carbon (C14) Coal, plants, people Uranium (U238) Thorium(Th232) Radium Radon Rocks, soils, water Rocks, soils, water Water, air * Of 60 on earth 50

51

52 52 Background Radiation in Canada

53 Average Background Doses - World a and Canada b (msv/y) Source World Avg. Canada Toronto Winnipeg Calgary Cosmic Internal Inhalation External Total a. UNSCEAR (2000) b. Grasty and LaMarre (2004)

54 radiation exposure comparisons Activity Radiation Dose msv Comments Natural Background 2 per year Canada Exploration worker 0.12 per year Uranium deposit 1 Chest x-ray x-ray dose 1 CT-Scan 2-11 x-ray dose Canadian Airline Crew 1-5 per year 1999 Avg, polar route Canadian U Mine Workers per year Max permitted dose - 50 Dose limits - public, radiation workers 1.0 per year 20 per year Exposure from radioactive substances Even though radiation doses in exploration and uranium mining are low (even trivial), the principles of ALARA are applied 54

55 Rare Earth Development and Radiation Protection For members of public limit is 1 msv 55

56 Measurement Example Doses from Uranium-bearing Rock Samples Rock % Uranium Counts/Sec µsv/h Duration (h) to reach 1 msv , , ,

57 Pathway Analyses 57

58 Important Next Steps re Radioactivity Determine exactly how much uranium, thorium and decay elements in each material Identify proven and reliable management practices Calculate radiation doses to workers and public Share information with everyone 58

59 Project Design ALARA radiation exposures to public or workers e.g. with NO PROTECTION MEASURES >> 1000 hours to receive 1 msv Mill tailings and metallurgical residue Retain and isolate low levels of radioactivity Apply best available techniques to isolate for a very long time 59

60 Caroline Wilson Director of Investor Relations 60

61 Price ($CAD per share) Volume (MM) Market Summary (TSXV:MAT) (OTCQX: Company Statistics Current Share Price 0.21$ 52 week range 0.17$ to 0.51$ Basic Shares Fully diluted shares Market Capitalization Cash and Cash equivalents Capital Structure Options Weighted average exercise price 120 M 128 M 25 M 3 M M 0.28$ MHREF) Shareholder Base Research Coverage Institutional ownership 30% Byron Capital Markets Dr. Jon Hykawy Insider ownership 2% Cormark Securities Edward Otto Pinetree Capital, Mineralfields ~20% Jacob Securities Luisa Moreno Source: Capital IQ, Bloomberg and company. Data as of April 18,

62 Market Positioning - Relative Risk Timing/ Metallurgy Timing Early Stage Advanced High Low RISK Quest (H) Strange Lake Rare Element (L) Bear Lodge Avalon (H) Nechalacho (Thor Lake) Arafura (L) Nolans Greenland Minerals (H) Kvanefjeld Pilot Plant Confirmed TTC Confirmed Matamec (H) Binding MOU Kipawa Frontier (L) - MOU Zandkopsdrift Tantalus (H) TRE Tasman (H) Norra Karr IAMGOLD (L) Niobec Great Western (L) Steekampskraal MBAC (L) Araxa Pacific Wildcat (L) Mrimra Hill High Source: Technology Metals Research LLC and company filings. RISK Early Strategic Advantage Preliminary Agreements Vertically Integrated Binding Partnerships Partnerships/Financing Low 62

63 Rare Earth Companies Relative Performance 3 Months (%) 6 Months (%) 1 Year (%) Frontier Avalon Quest RE Metals Tasman Ucore Matamec Molycorp RE Res. Lynas Orbite Great Western Geomega Geomega Frontier Avalon Matamec Quest RE Metals Orbite Lynas Molycorp Ucore Tasman Great Western RE Res. Frontier Avalon RE Metals Geomega Quest Tasman Molycorp Matamec Lynas RE Res. Ucore Orbite Great Western Date: 03/12 63

64 Rare Earth Companies Relative Performance Matamec MoU TTC PEA Binding MoU + 1.5M Date: 27/06/12 64

65 Increasing Share Price The Road to Increasing Matamec Share Price Value Adding Events - Kipawa Now 2012 Near Future Mining Analyst Evaluation (MAE) at PEA and Binding MOU with Toyota (49%) Byron: $0.50 (DCF:15% with 8 REE without Y) Cormark:$0.60 (NPV:12.5%-NAV: $184Mx.6) Jacob: $0.80 (NPV:12.5%-NAV: $184Mx.6) + Separation Plant MAE: 30% to be added to PEA Revenue (2.8B$) + By-Products: Zr, Ga and Hf MAE: Presently not included in PEA Byron: to be revised Cormark: to be revised Jacob: to be revised Add 1.2B$ to revenue (Capex:150M$+Opex:450M$) ZrO 2 : 190M $3.8/kg GaO 2 : 760K $400/kg Hf: to be determined + 100% Debt Financing MAE: Considers Equity Financing Remove 70M$ Equity Raise + Off-Take Agreement with Pricing Defined + Increase Mineral Resource: Open in All Directions Upside of Zeus & Other Properties Not Included in Share Price MAE: Presently Discounted from Japanese Price Deck MAE: To Increase Future Revenue Fair Market Price Defined West: At least 300 meters East: TBD At Depth: TBD 65

66 «THE LOW COST HREE DEPOSIT» 1010 Sherbrooke West, Suite 700 Montreal, Québec Canada H3A 2R7 Tel (514) Fax (514) Website 66