Bob Adam, AMC Bauxite Koumbia Bauxite Project, Guinea. Guinea Bauxite resources to supply the world?

Transcription

1 Bob Adam, AMC Bauxite Koumbia Bauxite Project, Guinea Guinea Bauxite resources to supply the world?

2 Disclaimer The presentation (in this projected form and as verbally presented) (Presentation) is provided on the basis that none of Alli ance Mining Commodities Limited (the Company) nor its respective officers, shareholders, related bodies corporate, partners, affiliates, employees, representatives and advisers make any representation or warranty (express or implied) as to the accuracy, reliability, relevance or completeness of the material contained in the Presentation and nothing contained in the Presentation is, or may be relied upon as, a promise, representation or warranty, whether as to the past or the future. The Company hereby excludes all warranties that can be excluded by law. The Presentation may contain prospective financial material which is predictive in nature and may be affected by inaccurate assumptions or by known or unknown risks and uncertainties, and may differ materially from results ultimately achieved. The Presentation may contain "forward-looking statements". All statements other than those of historical facts included in the Presentation are forwardlooking statements including, without limitation, (i) estimates of future earnings, and the sensitivity of earnings to commodity prices; (ii) estimates of future commodity production and sales; (iii) estimates of future cash costs; (iv) estimates of future cash flows, and the sensitivity of cash flows to commodity prices; (v) estimates of future capital expenditures; and (vi) estimates of resources and/or reserves, and statements regarding future exploration results and the replacement of resources and/or reserves. Where the Company expresses or implies and expectation or belief as to future events or results, such expectation or belief is expressed in good faith and believed to have a reasonable basis. However, forward-looking statements are subject to risks, uncertainties and other factors, which could cause actual results to differ materially from future results expressed, projected or implied by such forwardlooking statements. Such risks include, but are not limited to, commodity price volatility, currency fluctuations, increased production costs, as well as political and operational risks and governmental regulation and judicial outcomes. The Company does not undertake any obligation to release publicly any revisions to any "forward-looking statement" to reflect events or circumstances after the date of the Presentation, or to reflect the occurrence of unanticipated events, except as may be required under applicable securities laws. All persons should consider seeking appropriate professional advice in reviewing the Presentation and all other information with respect to the Company and evaluating the business, financial performance and operations of the Company. Neither the provision of the Presentation nor any information contained in the subsequently communicated to any person in connection with the Presentation is, or Presentation or should be taken as, constituting the giving of investment advice to any person. The information in this Presentation has been compiled by the Chief Executive Officer of Alliance Mining Commodities Limited, Mr Bob Adam, who has over 30 years experience in the mining industry, and is a Member of the AusIMM. 2

3 World Bauxite supply demand increasing supply constrained by infrastructure Aluminium demand increasing additional 30mt in medium term Additional 150mt bauxite supply required Realistic sources of large scale supply Brazil high quality, high development cost Guinea high quality, low mining cost Australia Weipa, only development of scale, high temperature product China quality and distance to market restricting capability Likely new entrants Other African companies infrastructure dependant Large resources no capacity India domestic refineries closing Indonesia poor quality, ban in force Caribbean limited resources Vietnam/Laos poor infrastructure 3

4 Stable Bauxite prices opportunity for high grade producers Value in use - driving prices Premium being paid for Quality high grade, low impurities Bauxite Imports: Sources, Volumes and Prices (CFR China) Source: CMGroup, The Bauxite Index Clear correlation between price and quality Malaysia replacing Indonesia production limited resource availability Price pressure will increase as Stockpiles reduce Domestic resources are depleted New capacity comes on stream Chalco and Weiqiao (Sept 2015) 55% Al/1% Si 40% Al/10% Si 50% Al/7% Si 50% Al/1% Si 55% Al/1% Si 4

5 Republic of Guinea supplying the world with bauxite highly quality, low cost product World s premier bauxite province 40% of world s known resources 10% of world s production Resources of 40Bt (possibly 100Bt) Capacity for total world production for >100 years Established supplier for 40 years CBG (GoG 49%, Alcoa 22.5%, Rio 22.5% DADCO 6%) Sangaredi mine - 16 mtpa DSO, Exported from Kamsar Rusal - Kindia mine ~3 mtpa DSO, through Conakry Fria Refinery - mothballed High Grade, High Quality, Low Impurities High Gibbsite content Low Reactive Silica Low caustic consumption Low mining costs High VIU 5

6 Developing industry major bauxite players present Lack of infrastructure constraint on supply Permit Major players have strong land holdings Limited opportunities for high grade production Coastal leases lower grade Winning/Weiqiao/UMS JV new river port for bauxite export July 2015 Holder 2 CBG (GoG 49%, Alcoa 22.5%, Rio 22.5%, Dadco 6%) 149 GAC (Mubadala) 124 Rusal Dian Dian project 1 Rusal Fria 3 Rusal - Kindia 23 Dabola Tougue & Imidro 180 AMC - Koumbia 122 Winning/Weigiao/UMS 6

7 Operating in Guinea Government, Communities and Ebola Peaceful since Independence (1958) Mining sector contributes 25% of national income New Mining Code 2011 strong framework for investment Review of all Mining Conventions in progress Strong community support for mining rigorous Environmental and Social standards Significant International mining investment: Mubadala, Rio Tinto and Chinalco Ebola: International community response massive increase in health infrastructure delivered Currently 1-3 new cases reported each week Rapid and appropriate response controlling transmission 7

8 Challenges for development Infrastructure and internal capacity holding back exports Poor infrastructure New port and rail infrastructure required urgently World bank supported study completed in 2014 implementation? Ease of doing Business Index Guinea ranked 169 th South Africa 43 rd, DRC 184 th, Eritrea 189 th Inconsistent policy settings GST status Iron Ore through Liberia what are the rules? Convention Review focused on revising revenue terms rather than transparency and corruption Lack of Capability in Ministry of Mines Legal team too small to be able to manage large projects Variable Transparency Recent auction of BHP bauxite leases confusing and now abandoned 8

9 Alliance Mining Commodities a shovel ready project Largest independently owned bauxite project Privately owned and funded since 2006 US$ 38m invested Total JORC resource of 2.2billion tonnes High grade bauxite (low impurities) with a 40+year mine life 48%Al 2 o 3 (Ore Reserve) 48%Al 2 o 3 (Inferred Resources) Low reactive silica 1.7%, high gibbsite, >10m thick, no overburden Mining Concession granted Nov 2010 Mining Convention Ratified July 2014 following review by CTRCTM Definitive Feasibility Study completed Dec Updated DFS completed Dec 2014 ESIA approved July % controlled infrastructure solution independent of third parties rail, port and barges 9

10 Koumbia Project Infrastructure Integrated Port and Rail infrastructure Infrastructure solution completely controlled by AMC Optimised infrastructure solution a logistics project Construct 125km rail from mine to river port River port on Rio Nunez near Boké Self unloading barges - removes requirement for transshipper and improves ship turn around times Capacity to load Panamax and Cape class vessels Infrastructure configuration facilitates ease of expansion from 10mtpa to 20mpta - self funding Forecast lowest quartile operating costs 3 year construction window to first shipment 10

11 Summary Vast resources of high quality bauxite overcoming challenges to development Resources adequate to provide world bauxite supply for > 100 years: Supply deficit amid clear increase in demand Premium paid for quality Infrastructure challenges being overcome Koumbia highest grade, independently owned bauxite project: Premium product High grade, low silica, high gibbsite Resources for +25 year mine life Long history of stable supply: CBG and Rusal projects running for more than 40 years Updated regulatory environment 11

12 Further details: Bob Adam