Heavy Rare Earth (HREE) in the Northern Territory

Transcription

1 TUC Resources Ltd - ABN: RESOURCES Heavy Rare Earth (HREE) in the Northern Territory 6/21/2012 IAN BAMBOROUGH, Managing Director TUC Resources Investor Update June 2012

2 Contents The Company A Brief Introduction Value Proposition HREE Market Stromberg Deposit Potential Market Impact Large HREE Exploration Upside Margin Drivers; Mining / Processing Costs and Price Time to Market TUC/Stromberg Advantages Strategy Activities Goals 2012 A Reason to Invest

3 The Company

4 Company Position; ASX TUC 124.4M Shares at A$0.14 Darwin Market Cap. A$17.4M (20 June 2012) Funds +$2.9M (31 March 2012) Shareholders 50% 25% Top 20 Share Register 18,000km 2 10 Developing Projects across the NT 0% Tennant Creek

5 HREE Market

6 Product Light vs. Heavy Rare Earths 85% HREE/TREE (Distribution) Heavy Light Stromberg HREE Rare Earth Mix Dy2O3 Typical Light REE Mix Similar to Mt Weld - Lynas Eu2O3 Er2O3 Gd2O3 Tb4O7 Ho2O3 Lu2O3 Sm2O3 Tm2O3 Yb2O3 Gd% Nd% Pr% Y% Ce% Y2O3 La% In-situ Value ~$230/Kg In-situ Value ~$90-100/Kg In-situ Values/Kg; No recovery implied, Deposit grades must also be considered;, June 2012 Prices Metal Pages

7 TUC s Stromberg holds a #1 Position in terms of HREE Distribution % HREE/TREE Y% Dy%

8 HREE s are used in the growing Clean Efficient Energy Markets Dysprosium in High Temperature High Efficiency Fixed Magnets in Electric Motors and Power Generation Yttrium and Erbium in Low Energy Lighting; Lighting Phosphors DEMAND IS UNDERPINNED BY WORLD GOVERNMENT INITIATIVES. Eg. Carbon Tax Europium for Red Colouring in Video Screens

9 Tonnes per Annum Demand Supply Gap Forecast to Grow Dysprosium Oxide Source: IMCOA Öko-Institut; Jan 2012

10 HREE Prices Forecast to Remain Elevated Dysprosium Oxide Price $/Kg (source Metal Pages) $1,500 $1,000 $500 $ Price Jun-12 Source: - CREME IMCOA after Prstn Freiberg Inn Symp

11 Darwin-Gateway to the Worlds Largest REE Processing/Manufacturing Markets China India Japan Singapore Malaysia Stromberg HREE Region Adapted from Google Earth Image

12 Correct HREE Market Space +.. Stromberg HREE Prospect; Potential Market Impact

13 Clear Resource Potential from Exploration Drilling 2.3km Strike Length Six Robust Drilling Cross Sections 3.5m average thickness >0.1% TREO 0.45% TREO all intersections >0.2%/TREO Dysprosium Oxide 7.2%/TREO Terbium Oxide 1%/TREO Yttrium Oxide 72%/TREO Only 2ppm Thorium per 1% TREO STRC20: 0.47% from 1m STRC53: 0.72% from surface Stromberg Potential Impact Initial 1.5Mt Exploration Case ~3% of World Market for 5-6 Years Host Rock to be drilled High Confidence Mineral Inventory Current World Dysprosium Oxide Market 1377tpa

14 Correct HREE Market Space Potential for Strong Market Impact+ Large HREE Exploration Upside

15 Control of a New HREE District = HREE Prospects = LREE Prospect Quantum LREE Discovery Scaramanga HREE Prospect Stromberg HREE Discovery Skyfall

16 Large Exploration Potential - Rocks, Faults and Mineralised Systems Repeat Stromberg Scaramanga Largo (Application Tenement) N Knightfall Skyfall 5km Surface Target HREE Mineralisation Fault Target HREE Mineralisation Blind Target HREE Mineralisation

17 Total Mt Recovered Yttrium Exploration Case Exploration Potential Sets TUC in its own space Yttrium Grade is King 0.4 Yttrium Upside Target Exploration Case 0.3 TUC Resources Limited Other HREE Deposits Yttrium Grade %/TREO NB! TUC Quick Assessment of Other HREE Prospects Yttrium Potential

18 Correct HREE Market Space Potential for Strong Market Impact Large HREE Exploration Upside +. Cost Advantages Mineral Processing

19 - Mineral Processing Efficiency + Mineralogy Matters; Stromberg A Xenotime Deposit in Clay A Strong Combination Clay Xenotime Most Preferred Mineral Processing Options for HREE Eudialyte Monazite Other Mineral Processing Options for HREE Pegmatite/Aplite Other Possible Mineral Processing Options for HREE Deposits

20 Efficient Leach of Raw Material up to 85% Recovery Free Fine Xenotime in Clay means Stromberg Material Is More Amenable to Direct Acid Leach putting HREE s Straight into Solution

21 Direct Leach Scenario Allows TUC to Leapfrog a Processing Stage COST +$ +$ +$ +$ +$ Mined Material Mineral/ Xenotime Con. HREE Intermediate Product HREE Oxides HREE Metals/ Alloys Allows TUC to anticipate a lower opex and capex scenario

22 Correct HREE Market Space Potential for Strong Market Impact Large HREE Exploration Upside Cost Advantages Mineral Processing +. Cost Advantages Mining and Capex

23 Mining Cost Advantages 20m Deep At Surface Tabular Bodies Easy Access and Potential for Low Stripping Ratio Soft Weathered Clay Easier to Mine or Dig

24 Initial Target Exploration Size at Stromberg allows TUC to Anticipate A Small Modular Plant Concept to Minimise Start Up Capex 12-30tph Mill Capacity Photo Courtesy of Bateman Engineering

25 Stromberg - Potential for Lower Quartile Costs Relativie Strip/Strip Ratio (mining cost factor) 12.0 Start Up Capex vs. Relative Strip (mining cost) Other HREE Deposits 2.0 Ionic Clays Predicted Start Up Capex $Billion 10:1 Strip Ratio utilised where possible underground mining scenario

26 Stromberg - Potential for Lower Quartile Costs Relativie Strip/Strip Ratio (mining cost factor) 12.0 Start Up Capex vs. Relative Strip (mining cost) Other HREE Deposits 2.0 South China 0.0 Clays Predicted Start Up Capex $Billion 10:1 Strip Ratio utilised where possible underground mining scenario

27 Correct HREE Market Space Potential for Strong Market Impact Large HREE Exploration Upside Cost Advantages Mineral Processing Cost Advantages Mining and Capex +. Price Advantage

28 ppm Thorium TUC s Stromberg has Other Price Advantages ; Potential Con. Grade and Low Deleterious Elements First Stage Concentrate Grade and Thorium Content Preferred Concentrate Grade Threshold Other HREE Deposits 50 TUC Resources Limited Preferred Thorium Content Threshold Chinese Clays 0 0% 50% 100% Comparing physical separation deposits with direct leach deposits. Assumes Comparable Solution and Precipitation Grade for TUC Material Likely First Stage Concentrate Grade

29 Efficient Leach of Raw Material Potentially Provides Direct route to Competitive price position on intermediate /carbonate product. Testing of Conceptual Flow Sheet in Progress. Mixed Heavy Rare Earth Carbonate

30 Direct Leach Scenario Allows TUC to Anticipate receiving a Higher Pay Factor TUC aims to Enter Market at Intermediate Stage - Not mineral Concentrate Stage Mined Material Mineral/ Xenotime Con % of HREE Oxide Price HREE Intermediate Product 40-60% of HREE Oxide Price HREE Oxides HREE Metals/ Alloys +$ +$ +$ +$ +$ PRICE

31 Correct HREE Market Space Potential for Strong Market Impact Large HREE Exploration Upside Cost Advantages Mineral Processing Cost Advantages Mining and Capex Price Advantage Potential for Higher Value Mixed Rare Earth Intermediate Product + Potential for Shorter Development Time Early Mover Advantage

32 Development Time Advantages Shallow Drill Holes Potential for Quicker Resource Development 25m

33 Correct HREE Market Space Potential for Strong Market Impact Large HREE Exploration Upside Cost Advantages Mineral Processing Cost Advantages Mining and Capex Price Advantage Potential for Higher Value Mixed Rare Earth Intermediate Product Potential for Shorter Development Time Early Mover Advantage + Strategy Activities Goals 2012

34 Secure Cornerstone REE Value Chain Partner Prove/Improve Process Flow Sheet Testing In Progress Advanced Discussions in Progress Stakeholder Engagement Precipitate A Mixed Rare Earth Carbonate Validate Exploration Upside Develop Access to Large Exploration Upside in Aboriginal Freehold Land Tenements Geochemistry Programs in Progress Drilling Planned

35 Geochemistry In Progress - Full district Potential Drilling to Follow Geochemistry in Progress Assays Pending Scaramanga Skyfall North Geochemistry in Progress Assays Pending (Similar white clay bearing rock to Stromberg) Stromberg Geochemistry in Progress Assays Pending Granted Tenement Application Tenement Access In Negotiation Skyfall Airborne Radiometric Image

36 Planned First Stage Exploration Drilling July to September 2012, 1000m-2000m RC (~40-60 holes) Blind Target Drilling Stromberg Exploration and Extension Drilling Airborne EM Target Drilling Scaramanga Exploration Drilling Skyfall North Exploration Drilling

37 Certainty Certainty + Planned Stromberg Development Schedule Parallel Opportunities Stromberg Stakeholder Engagement Exploration JORC Resource Drilling Strategic Alliance Partner Engagement Scoping Study Metallurgy Test Work & Drilling Environmental EIS Stromberg Scaramanga District Targets Stromberg Scaramanga District Targets Stromberg Scaramanga District Targets Pre Feasibility Study Sales Contracts - Metallurgy Pilot Plant Feasibility Study!

38 Market Cap A$M Correct HREE Market Space Potential for Strong Market Impact Large HREE Exploration Upside Cost Advantages Mineral Processing Cost Advantages Mining and Capex Price Advantage Potential for Higher Value Mixed Rare Earth Intermediate Product Potential for Shorter Development Time Early Mover Advantage Aggressive Exploration Program Underway

39 Disclaimer The Company has prepared this presentation. Whilst the information contained in this presentation has been prepared with all reasonable care from information provided by the Company and from sources, which the Company believes are reliable, no responsibility or liability is accepted by TUC Resources for any errors or omissions or misstatements, however caused. To the maximum extent permitted by law, TUC Resources, its directors officers, employees and agents disclaim liability for any loss or damage which may be suffered by any person thought the use or reliance on anything contained in or omitted in this presentation. Certain information in this presentation refers to the intentions of TUC Resources, but these are not intended to be forecasts, forward looking statements or statements about future matters for the purposes of the Corporations Act or any other applicable law. The occurrence of events in the future are subject to risks, uncertainties and other factors that may cause TUC Resources actual results, performance or achievements to differ from those referred to in this presentation. Accordingly, TUC Resources Ltd, its directors officers, employees and agents do not give any assurance or guarantee that the occurrence of the events referred to in this presentation will actually occur as contemplated. TUC Resources Ltd Directors and associates own shares in TUC Resources. The Company recommends investors obtain their own independent financial and accounting advice before making any financial investment in reliance upon information contained in this publication. Competent Person The information in this report that relates to Exploration Results is based on information compiled by Ian Bamborough, who is a Member of The Australian Institute of Geoscientists. Ian Bamborough is a fulltime employee of TUC Resources Ltd. Ian Bamborough 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. Ian Bamborough consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

40 Ian Bamborough Managing Director Phone: +61 (0) Main Office Lvl 10, 553 Hay Street, PERTH WA ASX:TUC ABN