Rare Earths WE TOUCH THEM EVERYDAY. Roskill International Rare Earths Conference Presentation. 16 November 2011

Transcription

1 Rare Earths WE TOUCH THEM EVERYDAY Roskill International Rare Earths Conference Presentation 16 November 2011

2 Disclaimer This Presentation has been prepared by Lynas Corporation Limited (ABN ) (Lynas or the Company). This Presentation contains summary information about Lynas and its subsidiaries (Lynas Group) and their activities current as at the date of this Presentation. The information in this Presentation is of general background and does not purport to be complete or to comprise all the information that a shareholder or potential investor in Lynas may require in order to determine whether to deal in Lynas shares. It should be read in conjunction with Lynas Group s other periodic and continuous disclosure announcements lodged with the Australian Securities Exchange (ASX), which are available at This document is not a prospectus or a product disclosure statement under the Corporations Act (Cth) 2001 (Corporations Act) and has not been lodged with the Australian Securities and Investments Commission (ASIC). Not investment or financial product advice This Presentation is for information purposes only and is not financial product or investment advice or a recommendation to acquire Lynas shares and has been prepared without taking into account the objectives, financial situation or needs of individuals. Before making an investment decision, prospective investors should consider the appropriateness of the information having regard to their own objectives, financial situation and needs and seek financial, legal and taxation advice appropriate to their jurisdiction. Lynas is not licensed to provide financial product advice in respect of Lynas shares. Cooling off rights do not apply to the acquisition of Lynas shares. Financial data All dollar values are in Australian dollars (A$) unless stated otherwise and financial data is presented within the financial year end of 30 June 2010 unless stated otherwise. Any pro forma historical financial information included in this Presentation does not purport to be in compliance with Article 11 of Regulation S-X of the rules and regulations of the US Securities and Exchange Commission. Past performance Past performance information given in this Presentation is given for illustrative purposes only and should not be relied upon as (and is not) an indication of future performance. Future performance This Presentation contains certain forward-looking statements. The words expect, should, could, may, will, predict, plan, scenario, forecasts, anticipates and other similar expressions are intended to identify forward-looking statements. Indications of, and guidance on, future earnings and financial position and performance are also forward-looking statements. Forward-looking statements, opinions and estimates provided in this Presentation are based on assumptions and contingencies which are subject to change without notice, as are statements about market and industry trends, which are based on interpretations of current market conditions. Such forward-looking statements including projections, guidance on future earnings and estimates are provided as a general guide only and should not be relied upon as an indication or guarantee of future performance. There can be no assurance that actual outcomes will not differ materially from these forward-looking statements. Investment Risk and other risks An investment in Lynas shares is subject to investment and other known and unknown risks, some of which are beyond the control of Lynas Group, including risk factors associated with the industry in which Lynas Group operates, such as: nature of mineral exploration and production; mineral and ore reserves; construction risks; progressing risks; project developments; market price and demand risk; credit and market risks; regulatory, political and environmental risks; tax and other risks generally relating to equity investment. Not an offer This Presentation does not constitute an offer to sell, or the solicitation of an offer to buy, any securities in the United States. The securities to be offered and sold in the equity raising mentioned herein have not been, and will not be, registered under the U.S. Securities Act of 1933 or the securities laws of any state or other jurisdiction of the United States, and may not be offered or sold in the United States unless the securities are registered under the Securities Act or pursuant to an exemption from, or in a transaction not subject to, registration. 2

3 Lynas will offer a source of supply of Rare Earths outside of China LYNAS VITALS AT A GLANCE VISION: Be the leader in Rare Earths for a sustainable future. EXCHANGES: ASX (code LYC), OTCQX (code LYSDY) Mount Weld INDICES: ASX 100, MSCI Australia SHARES: 1,714m on issue MARKET CAP: A$2.1bn as at 15 November 2011 Concentration Plant CASH: A$370.3m (incl. restricted cash) as at 30 Sept 2011 DEBT: US$225.0m as at 30 September 2011 Lynas Advanced Materials Plant 3

4 Current status of the project MAJOR MILESTONES TO DATE FUTURE MILESTONES Concentration Plant started in May 2011 (REO stockpiled on site at Mount Weld) LAMP construction: 85% complete Ready-for-Start-Up program: 87% complete Malaysia headcount: 210 (from 30 at the end of 2010) Phase 2 funding secured in April 2011 and Phase 2 construction permits received in Sept 2011 Customer contracts signed in each market segment and for each type of product Lynas has lodged the documentation required by the AELB in respect of the preoperational licence LAMP construction completion early 2012 Plant ramp-up Phase 2 started 4

5 Lynas is a safe and sustainable source of Rare Earths supply STRONG SAFETY CULTURE Lynas has achieved more than 5,700,000 hours Lost Time Injury (LTI) free on the LAMP construction project Gas Treatment Lynas Mount Weld remains LTI free during both construction and operation IAEA confirmed compliance of the LAMP design with international standards 5

6 Mount Weld Rare Earths initial mining campaign complete, loss-time-injury-free, on budget MOUNT WELD STOCKPILES WITH RARE EARTH OXIDE PERCENTAGES DD DUNCAN DEPOSIT (DD) CLD DEPOSIT 8% Offices 13% 26% 15% 13% 773,000t on stockpiles 17% DD 21% 20% Conc. Plant 1.5km 6

7 The mine is within the Central Lanthanide Deposit (CLD), a Resource of 9.9 million tonnes at 10.7% for 1.1 million tonnes of contained REO CENTRAL LANTHANIDE DEPOSIT AND DUNCAN DEPOSIT RESOURCES Comparison of REE distribution REO CLD (Secondary Monazite) Duncan (Churchite) Lanthanum Oxide 25.57% 23.93% Cerium Oxide 46.90% 39.42% Praseodymium Oxide 4.92% 4.85% Neodymium Oxide 16.87% 18.08% Samarium Oxide 2.29% 2.87% Europium Oxide 0.49% 0.77% Gadolinium Oxide 1.33% 2.15% Terbium Oxide 0.13% 0.29% Dysprosium Oxide 0.31% 1.36% Holmium Oxide 0.04% 0.21% Erbium Oxide 0.13% 0.46% Thulium Oxide 0.01% 0.04% Ytterbium Oxide 0.05% 0.20% Lutetium Oxide 0.02% 0.03% Yttrium Oxide 0.95% 5.36% Total % % CLD & Duncan Mineral Resource (2.5% REO cut-off) Category Tonnes Mt Grade % REO Tonnes (kt) REO CLD ,057 Duncan Total ,416 Current reserves are TLNO Following further drilling, reserves are expected to be updated late 2011 / early 2012 Proven floatable process for the CLD Metallurgical test work underway for Duncan 7

8 The Concentration Plant commenced feed of ore in May 2011 OVERHEAD VIEW OF THE CONCENTRATION PLANT 8

9 Commissioning is progressing well; grade in line with, and recovery exceeding, planned ramp up schedule MOUNT WELD CONCENTRATION PLANT Plant throughput rates continue to ramp up Flotation cells with initial feed Concentration Plant Performance Final concentrate grade September 2011 September ramp- up plan 37.6% 37.0% Recovery 67.0% 58.0% Concentrate cake discharging from filter press Ramp-up to nameplate throughput to be synchronised with the ramp-up of the Lynas Advanced Materials Plant in Malaysia. Over 1,000 tonnes of REO stockpiled on site 9

10 Containers of Rare Earths concentrate will be trucked to Fremantle for shipping to Malaysia Mount Weld to Fremantle = 1,000km Phase 1 tonnage = 1,500 containers/year 10

11 Gebeng, Malaysia, has exceptional infrastructure required for a Rare Earths separation facility PROCESSING HUB WITH EXCEPTIONAL INFRASTRUCTURE INDUSTRIAL INFRASTRUCTURE Energy, chemicals, water, industrial land KNOWLEDGE INFRASTRUCTURE Engineering, trade skills and services Gebeng Industrial Estate, East Coast Malaysia GOVERNMENT INFRASTRUCTURE Including FDI incentives (12 years tax exemption for pioneer status) 11

12 Schematic - Lynas Advanced Materials Plant core process, which uses mature industry technology 12

13 The Lynas Advanced Materials Plant (LAMP) is 0.8km wide (N-S) and 1.4 km long (E-W) OCTOBER 2011 OVERVIEW OF LEACHING, UP AND DOWNSTREAM SEPARATION AND PRODUCT FINISHING WORKSHOPS 13

14 LAMP construction is more than 85% complete Cracking (Rotary Kiln) Gas Treatment Primary Leaching Secondary Leaching 14

15 LAMP construction is more than 85% complete Upstream Extraction Downstream Extraction Post Treatment Tunnel Furnaces 15

16 The products are set for Phase 1; Lynas has product flexibility in Phase 2 PHASE 1 11,000t REO PRODUCTS Ce carbonate 2,600 La carbonate 1,350 Ce / La carbonate 4,000 Nd / Pr oxide 2,700 SEG + Heavy Rare Earths 480 ANTICIPATED VOLUMES (tpa) PHASE 2 ADDITIONAL 11,000t REO PRODUCTS. Phase 2 will provide additional flexibility, with capacity to produce up to the following approximate volumes: Ce carbonate, oxide 5,200 La carbonate, oxide 2,700 Nd oxide and Pr oxide 2,700 Separated SEG + Heavy Rare Earths

17 The Strategic Alliance with Sojitz shall provide a stable and long term source of supply for the Japanese market LYNAS, SOJITZ AND JOGMEC HAVE EXECUTED DEFINITIVE AGREEMENTS Sojitz Lynas Strategic Alliance Financing Agreement Funding for Phase 2 expansion to 22,000t US$225M loan from JOGMEC and Sojitz 6 year loan at LIBOR plus 2.75%, principal repayments begin in year 4 US$25M subscription for new fully paid ordinary shares in Lynas at a price of A$2.12 per share Funds drawn in May 2011 Availability Agreement Minimum 8,500t (+/-500t) per annum Allocated to Japanese Customers 10 year allocation Distribution & Agency Agreement Joint marketing by Sojitz and Lynas Customer commitment will determine Phase 2 products suite Professional organisation, speed, understanding of requirements, transparent communications 17

18 Letter of Intent signed with Siemens to establish a JV company for the sustainable production of neodymium-based Rare Earths magnets LYNAS AND SIEMENS INTEND TO FORM A JOINT VENTURE FOR MAGNET PRODUCTION LYNAS SIEMENS Long term supply contract for Nd/Pr metal Magnet technology and manufacturing capabilities JV COMPANY Supply of Nd-based rare earth magnets to Siemens (and third parties) The partnership between Lynas and Siemens will secure a long-term and sustainable end-to-end supply chain from mine to magnet to end application 18

19 Seven formal supply contracts and two Letters of Intent signed; Sojitz Agreement to provide stable supply to Japanese customers Rhodia Customer Agreement - Supply Contract Long term contract Multiple applications 2nd Customer Agreement - Supply Contract Long term contract Magnets 9th Sojitz Agreement Agent/Distribution Minimum of 8,500t (+/-500t) of product distributed into Japan market 10th Customer Agreement Letter of Intent Long term contract Magnets BASF Customer Agreement - Supply Contract Long term contract 4th Customer Agreement FCC Letter of Intent Long term contract NiMH batteries 6th Customer Agreement - Supply Contract Long term contract Multiple applications 5th Customer Agreement Supply Contract Long term contract Polishing 8th Customer Agreement Supply Contract Long term contract Autocatalysts 7th Customer Agreement Supply Contract Multi - year contract Autocatalysts 7 Supply Contracts, 1 Letter Of Intent, 1 Distribution Agreement, 1 LOI for JV 19

20 Lynas online in early 2012, delivering Rare Earths globally Our vision is to be the leader in Rare Earths for a sustainable future. We are close to realising this vision. Lynas will be online in early 2012, delivering Rare Earths globally. The LAMP is scheduled to come online with a Phase 1 production capacity of 11,000tpa REO. Work for Phase 2 is underway for an additional 11,000tpa REO. 20

21 NOTE The information in this report that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Brendan Shand, who is a member of The Australasian Institute of Mining and Metallurgy. Brendan Shand is an employee of Lynas Corporation Limited. Brendan Shand 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. Brendan Shand consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. 21