WIM150 Mineral Sands Project 15 th Anniversary Mineral Sands Conference

Transcription

1 WIM150 Mineral Sands Project 15 th Anniversary Mineral Sands Conference March 2015

2 Legal statements Disclaimer This presentation does not comprise a prospectus, disclosure document or other offering document under Australian Law or any other Law. It does not constitute provision of financial product advice. None of the directors of AZC, its related bodies corporate, officers, employees or advisors makes or gives any representation, warranty or guarantee in relation to this presentation (whether orally, in document form or in any form whatsoever) or in relation to any information ( Information ) contained in it to the recipient of this presentation or any of its related bodies corporate, officers, employees and advisors ( Recipient(s) ). Information sourced from third parties and reported in this presentation has not been verified or updated; it is important that Recipient(s) take care to verify and update before taking in to account in any process of evaluation. The presentation is provided expressly on the basis that the Recipient(s) will carry out its own independent inquiries into the Information and make its own independent decisions about the affairs, financial position or prospects of AZC. AZC reserves the right to update, amend or supplement the Information at any time in its absolute discretion (without incurring any obligation to do so). Forward Looking Statements The information in this presentation includes statements containing forecasts and forward looking information. Although AZC believes that the statements, estimations, projections, beliefs and opinions reflected in such forward looking statements are reasonable, such statements involve risks and uncertainties and no assurance can be given that actual results and outcomes will be consistent with these forward looking statements. Competent Persons Statement The Mineral Resource estimates for the WIM150 deposit were prepared by Mrs Christine Standing (Principal) and reviewed by Mr Ian Glacken (Director and Principal) of Optiro. Mrs Standing visited the WIM150 Project in March 2013 and observed the drilling and sampling procedures used for collection of the density data. Mrs Standing is a Member of the Australasian Institute of Mining and Metallurgy and the Australian Institute of Geoscientists, and Mr Glacken is a Fellow of the Australasian Institute of Mining and Metallurgy and a Chartered Professional Geologist. Mrs Standing has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration 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 (JORC 2012). The Ore Reserve statement was as reported to the ASX on the 26 July 2013 and compiled in accordance with the guidelines of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC 2012). The Ore Reserves statement was compiled by Andrew Law of Optiro, Fellow of the Australasian Institute of Mining and Metallurgy. Mr Law has sufficient experience in Ore Reserve estimation relevant to the style of mineralisation and type of deposit under consideration to qualify as a Competent Person as defined in the Australasian Code for Reporting of Mineral Resources and Ore Reserves (JORC 2012). 2

3 WIM150 Project - ownership and offtake The WIM150 Joint Venture comprises 80% Australian Zircon NL 20% Orient Zirconic Resources (OZR) (Australia) Pty Ltd WIM150 Offtake Agreement 50% of life-of-mine production is secured by OZR 3

4 WIM150 - History Standing on the shoulders of Giants Discovered early 1980s by CRA/Rio Tinto The Project was developed to pilot scale Titanium Minerals focus Extensive progress made to address issues of fine grain size material by using mineral flotation Rio Tinto withdrew in the late 1990s 4

5 WIM150 Joint Venture Partners Australian Zircon NL Has worked on the WIM150 Project since 2004, focussed exclusively since 2012 Orient Zirconic Resources (Australia) Pty Ltd. Current majority shareholder in Mindarie Mineral Sands mine. Owned by Guangdong Orient Zirconic Industry Science and Technology Co., Ltd (OZC), one of China s leading zircon processing companies. OZC is listed on the Shenzhen Stock Exchange with a market capitalisation approx. RMB 6.7 Billion (A$1.25 billion). OZC has the most comprehensive range of zirconium products in the world, including zirconium dioxide, zirconium oxychloride, fused zirconia, zirconia structural ceramic as well as zirconium sponge and other products. 5

6 Location Plan 6

7 WIM150 Project The Project s principal characteristics are: Quality product suite and attractive ore grade Excellent logistics, infrastructure and services. Large and shallow ore body Low Waste/Ore Ratio - of 0.5 to 1. Stable sovereign regime Off-the-shelf equipment for all mining and processing operations. Long productive life 55 years underwritten by Ore Reserves, 160 years by Mineral Resources. 7

8 Logistics and infrastructure Standard gauge railway to Port Melbourne and Port Adelaide Social amenities and engineering services Natural Gas trunk line 5,940,000 mn Horsha m 5,920,000 mn Substation WIM150 Project area Regional road-rail freight hub 620,000 me RL2007 and part EL4521 State Electricity Victoria substation SEP 275,000 volts to 66,000 volts Water Authority trunk line SA 275,000 volt SEV line NSW WIM150 Project area Vic TAS QLD Tas Existing 66,000 volt line to be upgraded AZ_WIM_31 Railway Highwa y Major road Gas pipeline 0 5 kilometre s National Park/Reserve River Lake 275kv power line Project Area Ore Reserve boundary Production facilities Water Authority Trunk Line Western highway to Port Melbourne and Port Adelaide 8

9 Site Plan 9

10 Resources and Reserves Mineral resources Classification Million tonnes Ore reserves % THM Slimes Particle Classification % within µm THM ( µm) ( 20 µm) Zircon Monazite Xenotime Rutile Leucoxene Ilmenite Measured Indicated Inferred , Category Million tonnes HM Grade (%) HM Mineral Assemblage (%) Zircon Monazite Xenotime Rutile Leucoxene Ilmenite Other HM Proved % Probable % % Independent mining expert Optiro Pty Limited has determined a Waste/Ore ratio - after removal of soil and subsoil - of 0.5 to 1. 10

11 Planned mining methodology Mining Unit Plant scrub, screen, slurry ore 11

12 Mineral processing Mineral concentration Oversize removed Mineral separation Spiral and jig concentration Heavy Mineral Concentrate feed to the Mineral Separation Plant Heavy Mineral Concentrate Raw zircon to upgrade Raw rare earth minerals to upgrade Titanium minerals to upgrade 12

13 Mineral processing Wet Concentrator Plant Desliming Pre-screening - to remove barren oversize FM1 spirals Kelsey jigs To produce heavy mineral concentrate Mineral Separation Plant Flotation to produce Zircon followed by CSIRO Pure Zircon Process to reduce U+Th Rare Earth Concentrate, with a gravity upgrade Conventional Titanium mineral circuit to produce T95 T90 T65 Sulphatable Ilmenites 13

14 Mineral product suite Zircon flour Rare Earth Mineral Concentrate Titanium Minerals Sulphatable Ilmenite T95 T90 T65 14

15 Product offtake 50% of the Project s production is secured by OZR for life-of-mine Offtake discussions for the balance of production are well-advanced 15

16 Product suite by value The WIM150 product suite will be approximately comprise: Zircon flour 56% Rare earth mineral concentrate 23% Titanium products 21% T95 T90 T65 Sulphatable ilmenites #1 and #2 WIM150 is principally a zircon development project. 16

17 For personal use only Ports of export Port Adelaide Export for drummed and containerised Rare Earth Mineral Concentrate Port of Melbourne Export for containerised: Zircon flour T95 T90 T65 AZ_Aus_01 Sulphatable Ilmenite #1 & #2 17

18 Project Financial Modelling Australian Zircon holds an 80% interest in the WIM150 Joint Venture. Project Value (Pre-Tax, assuming 50/50 debt: equity funding for AZC share) Nett Present Value (10%) Internal Rate of Return Payback period Project Costs (nominal, AUD) Base Construction Cost Contingency Working Capital $1286 million 34.2% 2.75 years Project Key Metrics (life of mine average, 100% project) Annual Total Site Operating Costs Annual Total Site Revenue Annual Gross Operating Margin Annual Inflation AUD/USD Exchange Rate State Royalty (% of market value) Discount Rate $458 million $37 million $55 million $94 million $233 million 59% 2.5% 87.5 cents 2.75% 10% The Project has an Ore Reserve mine-life of 55 years and a Mineral Resource life of more than 160 years at the planned throughput rate of 10 million tonnes annually. 18

19 AZC Marketing plan Product by description Product by value Actual or probable contracted destination Contract with Joint Venture Partner Balance of AZC product Zircon flour of exceptional purity ZrO 2 >66% TiO 2 <0.1% Fe 2 O 3 >0.01% Al 2 O 3 >0.01% U + Th <500 ppm Zircon flour 56% Contracts to be finalised with ceramic manufacturers in Rare earth mineral concentrate with enhanced levels of heavy rare earth elements Monazite + Xenotime > 88% Light REO >45% Heavy REO >10% Rare earth mineral concentrate 23% 50% of production contracted for lifeof-mine Contracts to be finalised with end-users in 2015 Titanium minerals Sulphatable Ilmenite #1 & #2 T95 T90 T65 Ilmenite to supply sulphate pigment plants. T95, T90, T65 to supply welding electrode producers. Marketing discussions underway with end-users 19

20 Project schedule Project Funding 2015 Development pre-site access 2016 Site access and approval including work authority 2017 Development on-site 2017 Name-plate production