FIRST BAUXITE CORPORATION (FBX) FBX CORPORATE PRESENTATION

Transcription

1 FIRST BAUXITE CORPORATION (FBX) FBX CORPORATE PRESENTATION JANUARY 2017 TSXV: FBX

2 Disclaimer This document is intended to be strictly informational. The Company reserves the right, at its sole discretion, to modify all or any part of this document without any liability or notification to any person. In no event shall the Company, its directors, officers, employees, agents or advisors be liable for any damages of any kind arising out of or relating to the use of this document, including, but not limited to, any of loss of income or profits, incidental, special, indirect or consequential or any similar losses or damages, whether or not advised of the possibility of damages, and on any theory of liability, arising out of or in connection with the use of the information contained herein. This document does not constitute, nor should be construed as, an offer or solicitation of an offer for the purchase of any securities of the Company, nor investment advice or an offering memorandum. Readers should review all of the Company s public disclosure. No securities commission or similar authority or stock exchange in any jurisdiction has in any way passed on any of the information contained herein. Certain information contained herein has been prepared by third-party sources, and such information has not been independently audited or verified by the Company. Certain statements contained herein constitute forward-looking information under applicable securities laws ( forward-looking statements ). Forward-looking statements look into the future and provide an opinion as to the effect of certain events and trends on the business of the Company. Forward-looking statements include the Company s strategy, priorities and plans for the Bonasika project. These forward- looking statements are based on current expectations and entail various risks and uncertainties. Actual results may materially differ from expectations, if known and unknown risks or uncertainties affect our business, or if our estimates or assumptions prove inaccurate. Factors that could cause results or events to differ materially from current expectations expressed or implied by the forward-looking statements, include, but are not limited to, the reproduction of test results on an industrial scale or in the field; the effect of capital market conditions and other factors on capital availability; availability of sufficient financing to fund planned or further required work in a timely manner and on acceptable terms; continuing support of the Government of Guyana for the project; changes in project parameters as plans continue to be refined and other risks more fully described in the Company s public disclosures, available on SEDAR at Readers are cautioned not to place undue reliance on the forward-looking statements contained herein. Except as required by law, the Company assumes no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or any other reason. Page 2

3 FBX Overview Listed on TSXV in Key asset is the high quality, industrial minerals grade Bonasika bauxite deposit in Guyana. FBX has been developing Bonasika since 2008 and has spent US$50M and issued three feasibility studies (FS). FBX filed a new FS in August 2015 based on mining bauxite in Guyana and processing ceramic proppants (CP) in the USA. Major shareholders (undiluted basis): - Resource Capital Funds (RCF) 46% - Pacific Road Capital Management (PRCM) 11% RCF and PRCM are large and successful private equity funds focused on the mining and resources sector. Both are long term investors with strong experience taking junior mining companies from exploration through to commercialisation. RCF has raised US$4B since PRCM US$1B since Page 3

4 FBX Board and Management Board Larry Washow. Non-Executive Chairman. - Company Director and previously CEO of AMCOL International Corp. Alan Roughead. President, CEO and Director. - Previously CEO of Queensland Magnesia Pty Ltd. Lee Graber. Non-Executive Director. - Director of Pacific Road Capital Management Pty Ltd. Mason Hills. Non-Executive Director. - Partner of Resource Capital Funds. Management Alan Roughead. President, CEO and Director. Bill White. Chief Financial Officer and Corporate Secretary. - Previously CFO of US Silica Holdings Inc. Craig Searchfield. General Manager, Operations. - Previously General Manager, Operations of Queensland Magnesia Pty Ltd. Chuck Bell. Technical/Marketing Consultant. - Previously: Technical Director, Curimbaba; Technical Manager, Baker Hughes. Page 4

5 FBX and Guyana GUYANA Page 5

6 FBX and Guyana Bauxite Deposits Bonasika Deposits Guyana Independent Democratic Stable Government English Language English Law Bosai Linden Mine Rusal Kwakwani Mine Page 6

7 FBX Bonasika Deposits Location GEORGETOWN River Access Bulk Shipping Capability 70km From Georgetown Labour/Infrastructure Resource High Quality 30 Years Reserves Open Cut Mining Simple Beneficiation Markets Proppants Bauxite BONASIKA 5 BONASIKA 1 BONASIKA 2 BONASIKA ML BONASIKA 6 SAND HILLS GEORGETOWN AIRPORT Refractory Bauxite Chemical Bauxite BONASIKA 7 Page 7

8 Page 8 FBX Bonasika Deposits

9 FBX Bonasika Reserves Bonasika 6 Diluted Grades RAW Ore ( 000 t) Al 2 O 3 (%) SiO 2 (%) Fe 2 O 3 (%) TiO 2 (%) LOI (%) Waste ( 000 t) S/R Probable DFB 2, Probable RGB 2, Total Probable 4, , Bonasika 7 Diluted Grades RAW Ore ( 000 t) Al 2 O 3 (%) SiO 2 (%) Fe 2 O 3 (%) TiO 2 (%) LOI (%) Waste ( 000 t) S/R Probable DFB 1, Probable RGB 2, Total Probable 4, , * Refer to NI Technical Report Feasibility Study for the Bonasika Proppant Project, Guyana dated August 4, 2015 and effective June 18, * Jesse Aarsen an independent Qualified Person under NI prepared the above referenced reserves estimates. Bonasika Mining Licence valid for 20 years until 2032 and renewable for further terms of 7 years for the life of the mine. Probable Reserves provide a 30 year mine life (latest FS). Further upside in Bonasika 6 and 7 plus Bonasika 1, 2 and 5. Page 9

10 FBX Health, Safety, Environment & Community FBX operates under the Guyana Mining Act and its activities are governed by three key documents: - Mineral Agreement - Mining Licence - Environmental Permit These documents also cover HSEC legislative obligations. FBX treats its HSEC legislative obligations as minimum requirements. FBX has experienced no major safety incidents and current LTIFR (lost time injury frequency rate) is 0.0 (Dec 2016). FBX has experienced no major environmental incidents and is currently renewing its Environmental Permit. FBX works in closely with the local community and initiated a community investment programme in 2016 covering a playground, solar panels, library, water tanks and other infrastructure for the local school. Page 10

11 Page 11 FBX Community Investment (Local School)

12 FBX UHSP-11 Product Development Two leading CP producers in USA have been developing ultra high strength proppant (UHSP) products over the last 3-4 years. Specifically targeted at wells in the Lower Tertiary GOM region with closure stresses of 15-20kpsi and temperatures of ᵒF. Lab testwork using conventional dry process technology (calcination, milling, Eirich mixing/pelletising, sintering, screening) indicated Bonasika ore could produce a UHSP superior to products currently being developed (higher strength/conductivity). Upscale testwork was conducted in Germany. Independent test results by recognised US labs confirmed the earlier lab testwork. Further upscale testwork was conducted in China and the US. Independent test results confirmed the previous upscale testwork. Patent application in progress based on unique characteristics of Bonasika ore. High alumina, high titania, low silica, low alkalis. Page 12

13 FBX UHSP-11 Physical Properties First Bauxite UHSP-11 Competitor 1 UHSP Competitor 2 UHSP Mesh 20/40 25 V Sphericity& Roundness Specific Gravity Crush Fines 15K PSI Crush Fines 20K PSI < <7.0 Sphericity, roundness, specific gravity and strength of UHSP-11 compared to published competitor data. Page 13

14 FBX UHSP-11 Conductivity Conductivity (md/ft) 5,000 4,000 FBX UHSP-11 Conductivity 3,000 2,000 1, K 12K 14K 16K 18K 20K Stim-Lab 4 UHSP-11 (20/40) 3,917 3,362 2,539 2,039 1,622 1,308 Stim-Lab 2 UHSP-11 (20/40) 3,897 3,280 2,735 2,167 1,747 1,372 PropTester 1 UHSP-11 (20/40) 4,411 3,333 2,768 2,353 1,780 1,298 PropTester 2 UHSP-11 (20/40) 4,073 3,709 2,788 2,586 1,970 1,494 Independent test results on the upscale testwork were consistent. Page 14

15 FBX UHSP-11 Conductivity Conductivity (md/ft) 5,000 4,000 FBX UHSP-11 Conductivity 3,000 2,000 1, K 12K 14K 16K 18K 20K Stim-Lab 4 UHSP-11 (20/40) 3,917 3,362 2,539 2,039 1,622 1,308 Stim-Lab 2 UHSP-11 (20/40) 3,897 3,280 2,735 2,167 1,747 1,372 PropTester 1 UHSP-11 (20/40) 4,411 3,333 2,768 2,353 1,780 1,298 PropTester 2 UHSP-11 (20/40) 4,073 3,709 2,788 2,586 1,970 1,494 Independent test results on the upscale testwork were consistent. Page 15

16 FBX UHSP-11 Conductivity Conductivity (md/ft) FBX UHSP-11 vs Market UHSP Conductivity K 12K 14K 16K 18K 20K Competitor 1 UHSP (25) 3,400 2,900 2,475 2,050 1,650 Competitor 2 UHSP (V) 4,640 4,000 3,370 2,800 2,300 1,795 PropTester 2 UHSP-11 (25) 5,159 4,674 3,779 3,573 2,728 2,344 Independent testing of UHSP-11 indicates conductivity is 30-40% superior to Page 16 Competitor 1 and 10-25% superior to Competitor 2.

17 FBX UHSP-11 Conductivity Conductivity (md/ft) FBX UHSP-11 vs Market UHSP Conductivity Page K 12K 14K 16K 18K 20K Competitor 1 UHSP (25) 3,400 2,900 2,475 2,050 1,650 Competitor 2 UHSP (V) 4,640 4,000 3,370 2,800 2,300 1,795 PropTester 2 UHSP-11 (25) 5,159 4,674 3,779 3,573 2,728 2,344 Independent testing of UHSP-11 indicates conductivity is 30-40% superior to Competitor 1 and 10-25% superior to Competitor 2.

18 FBX UHSP-11 SEM Analysis 250X 500X 1,000X UHSP-11 strength. SEM analysis shows reinforcing rod like formation during sintering: Mechanical effect is similar to reinforcing bar in concrete. Aluminium titanate is formed during sintering. Attributable to Bonasika mineralogy: - High alumina - High titania - Low silica - Low alkalis Page 18

19 FBX UHSP-11 Technical Data Sheet UHSP-11 technical data sheet based on lab testwork. Page 19

20 FBX UHSP-11 Conductivity Simulation Pressure profile run on a GOM frac job with competitor monomesh UHSP proppant. FBX UHSP-11 20/40 substituting for designed proppant. Page 20

21 FBX Industrial Scale Production Trials Following the success of the laboratory and upscale testwork, FBX commissioned industrial scale production trials. Pit preparation, mining and ore beneficiation in Bonasika 7 commenced in October 2015 and was completed in March ,000mt mined. Production volumes, grade splits and chemical assays were consistent with the FS geological block model. 2,400mt was screened, crushed, dried, bagged and shipped to a CP plant in Shanxi, China to produce UHSP-11. Two production trials took place over July/August 2016 to optimise raw material and plant processing parameters. A further trial was conducted over November 2015/January 2016 under optimised conditions. Initial test results encouraging. Full results and samples available in March UHSP-11 was shipped to USA in January 2017 and available for market trials in April Page 21

22 FBX Production Trial Guyana Simple open cut mining. No drill and blast. Page 22

23 FBX Production Trial Guyana Stockpiled high grade DFB ore drying under tarpaulins. Page 23

24 FBX Production Trial Guyana Bagged high grade DFB ore awaiting transport to Georgetown Port. Page 24

25 FBX Production Trial Guyana Containers being loaded at Georgetown Port for shipment to China. Page 25

26 FBX Production Trial China Front of CP plant in Shanxi, China. Page 26

27 FBX Production Trial China Shanxi CP plant rotary kiln. Page 27

28 FBX Production Trial China Shanxi CP plant mixers/pelletisers. Page 28

29 FBX UHSP-11 Production Trials FBX green UHSP-11 pellets. Good sphericity and roundness. Page 29

30 FBX UHSP-11 Production Trials FBX green UHSP-11 pellets. Good sphericity and roundness. Page 30

31 FBX UHSP-11 Production Trials FBX sintered UHSP-11 pellets. Good sphericity and roundness. Page 31

32 FBX UHSP-11 Production Trials FBX sintered UHSP-11 pellets. Good sphericity and roundness. Page 32

33 FBX UHSP-11 Production Trials FBX sintered UHSP-11 pellets after 20kpsi crush test. Low fines level. Page 33

34 FBX Strategic Opportunities FBX filed a new FS in August 2015 based on constructing a bauxite mining and beneficiation plant in Guyana and a CP processing plant in the USA. Key target is the UHSP market. However, Bonasika ore is also capable of producing other CP products (HSP, ISP and LWP). In addition there are alternative non-metallurgical and non-cp markets that utilise lower grade ores (match market/resource). Oil prices collapsed throughout SH 2014 and 2015 resulting in significant overcapacity in the CP market. There is currently significant quantities of idled CP capacity globally with over 1,000,000mtpa idled capacity in the USA alone. FBX is assessing potential strategic opportunities to utilise this idled CP capacity. These plants are also capable of producing non CP products. Page 34

35 FBX and USA CP Plant Locations Page 35 Dry process CP plants compatible with UHSP-11 technology.

36 FBX 2017 Priorities Complete the UHSP-11 production trial in China to confirm that the laboratory and upscale testwork results can be replicated on an industrial scale basis. Reach agreement with oilfield service companies and E&P operators to conduct UHSP-11 market field trials. Continue design, engineering and financing studies for the bauxite mining and beneficiation plant in Guyana and CP processing plant in the USA. Assess potential strategic opportunities to utilise idled CP capacity in the USA. Current cash reserves will fund the business throughout 2017 and into FBX has strong and patient PE shareholders with the financial capability to invest. Page 36