Titanium mining and processing. INVESTOR PRESENTATION September 2013

Transcription

1 Titanium mining and processing INVESTOR PRESENTATION September

2 Statements Forward Looking Statements Certain information contained in this presentation, including any information on MDL s plans or future financial or operating performance and other statements that express management s expectations or estimates of future performance, constitute forward-looking statements. Such statements are based on a number of estimates and assumptions that, while considered reasonable by management at the time, are subject to significant business, economic and competitive uncertainties. MDL cautions that such statements involve known and unknown risks, uncertainties and other factors that may cause the actual financial results, performance or achievements of MDL to be materially different from the company s estimated future results, performance or achievements expressed or implied by those forward-looking statements. These factors include the inherent risks involved in exploration and development of mineral properties, changes in economic conditions, changes in the worldwide price of zircon, ilmenite and other key inputs, changes in mine plans and other factors, such as project execution delays, many of which are beyond the control of MDL. Nothing in this presentation should be construed as either an offer to sell or a solicitation to buy or sell MDL securities. 2

3 Mineral Deposits corporate snapshot Capitalisation Listing ASX (MDL) 12 mth price range A$6.00 $1.70 Shares 83.5M Market cap Cash (31/6/2013) Investments US$230M US$19.6M 13% Teranga Gold (TGZ) US$30M 15% World Titanium Resources US$6M 10 years in Senegal 2002 Started evaluating Grande Côte 2004 Awarded Sabodala gold project Constructed Sabodala mine Mar 2009 First gold poured at Sabodala Construction of Grande Côte Shareholder Structure (June 2013) Corporate Transactions Other Institutions 9% USA 8% Retail 4% Australian Institutions 51% Dec 2010 Oct 2011 Sabodala gold assets demerged into Teranga Gold Corporation (TSX/ASX: TGZ) Commencement of TiZir JV with Eramet combining Grande Côte and ilmenite upgrading plant UK/Europe 28% 3

4 We own two highly strategic mineral sands assets 50% Tyssedal Ilmenite upgrading facility Norway 100% owned Operating since 1986 #4 high-tio2 feedstock producer globally Grande Côte Mineral sands mine Senegal 90% owned Construction 85% complete Future feedstock source for Tyssedal 4

5 Financials Mineral Deposits US$m H 13 Share of TiZir profit Expenses (net of income) (4.3) (2.5) Underlying NPAT EPS (cents) TiZir (MDL 50%) US$m H 13 Revenue EBITDA Underlying NPAT MDL 50% share Cash 19.6 Investments 34.7 Cash 47.5 Borrowings (1) year Bond issued Sept

6 Overview of Titanium Dioxide (TiO 2 ) supply chain Titanium Feedstock Major Producers Market Share ~90% used in TiO 2 pigment Major Producers TiO 2 Pigment Market Share Paper 9% Other 10% Paints 56% Rio Tinto 1 27% DuPont 19% Iluka 13% Tronox 11% Cristal 13% Huntsman 10% Plastics 25% Kenmare 6% Kronos 9% Kronos 6% Tronox 6% Ostchem 6% Sachtleben 4% 1. Includes 100% of Richards Bay Minerals Source: TZMI 6

7 Overview of Titanium Feedstock sector TiO 2 content ~95% Titanium minerals mined Rutile 12% TiO 2 content ~95% Titanium Feedstock (2011 = 6.8m TiO 2 units) Rutile 12% Sulphate-grade feedstock Slag 25% (2011 = 3.1m TiO 2 units) ~50% Ilmenite 88% ~92% 50% of ilmenite is upgraded to high TiO 2 feedstock 80+% Syn Rutile 8% Titanium Slag 36% Chloride-grade feedstock Rutile 22% (2011 = 3.7m TiO 2 units) Ilmenite 75% Ilmenite 17% ~50% Ilmenite 44% Synthetic Rutile 15% Slag 46% 7

8 Overview of high-tio 2 feedstock sector High-TiO 2 feedstock (2011 = 3.8m TiO 2 units) Key rutile producers kt Iluka 280 Cristal 110 RIO 100 Synthetic Rutile 15% Rutile 21% Slag 64% Key synthetic rutile producers kt Iluka 290 Tronox 220 Key slag producers (ktpa) Chloride Sulphate Total RIO 1, ,000 Tronox TiZir TiZir: #4 high-tio 2 feedstock producer 8

9 Tyssedal ilmenite upgrading facility 9

10 Tyssedal What does it do? Smelts ilmenite to produce a titanium-rich slag and pig iron co-product Input Smelting Outputs Customers Titanium Slag Pigment Producers Ilmenite Electric Furnace High Purity Pig Iron Foundries ~345ktpa mostly sourced from Tellnes mine (Norway) containing ~44% TiO 2 ~200ktpa containing ~80% TiO 2 ~110ktpa 10

11 Tyssedal What makes it special? Intellectual property 1 of 5 facilities globally Cheap, clean power Excellent logistics Feedstock flexibility Operational know-how a significant barrier to entry Rio owns 2 (South Africa & Canada) Tronox owns 2 (South Africa) Hydro-sourced Long term contract provides two-thirds of requirements Deep water shipping facilities on-site Close to European customer base Can produce both sulphate-grade and chloridegrade feedstocks 11

12 Tyssedal performance H 13 Titanium Slag Produced ( 000t) Sold ( 000t) High Purity Pig Iron Produced ( 000t) Sold ( 000t)

13 Grande Côte Senegal Ownership: TiZir 90%, Senegal Govt. 10% Concession: 25 years extendable 13

14 Grande Côte What makes it a quality project? Simple Ore Body Assemblage Water Scale Quality Project No overburden Minor vegetation Free flowing sands Minimal slimes Uniform grain size 10.7% zircon 74.5% ilmenite 2.5% rutile 3.2% leucoxene 90.9% VHM Shallow water table + Deep aquifer Allows dredge mining 100km x 4 km ore body 7,000 t/hr dredge 36MW power station Own railway and port facilities 85ktpa zircon + 575ktpa ilmenite Long mine life Top quartile on revenue / cost 14

15 A simple ore body No overburden Minor vegetation Free flowing sands no hard lenses Minimal (<1.0%) slimes Shallow water table Deeper aquifer for makeup water Uniform grain size and mineral assemblage 15

16 Conventional dredging and processing Dredge & Floating Concentrator Dredge sucks sand from front of pond and pumps slurry to floating concentrator Sand washed through spirals which separates heavy mineral concentrate (HMC) from lighter quartz Quartz sand (98%) pumped to back of pond HMC (2%) transferred to MSP Mineral Separation Plant Magnetic, electrostatic and gravity processes separate HMC into various minerals zircon, ilmenite, rutile & leucoxene No chemicals 16

17 Owner-operator logistics (rail & port) + + New 22km rail spur from MSP Concession for existing rail Own storage & ship loader at port = Logistics self-sufficiency 17

18 Straight forward marketing Zircon Avg annual production 85 Kt Production description / target markets Premium quality low in key impurities Suitable for full spectrum of zircon consumers Container shipments provides logistics benefits for customers Ilmenite 400 Kt 54% TiO 2 Feedstock for Tyssedal plant or market 175 Kt 59% TiO 2 Feedstock for chloride pigment production Rutile 6 Kt Premium grade and fine grain size ideal for welding sector Leucoxene 10 Kt Suitable for welding sector 18

19 85% complete in the home stretch Construction Commissioning Dredge Complete Complete Power Station Complete Complete Rail & Port N/A Oct 2013 Wet Concentrator Plant Feb 2014 Feb 2014 Mineral Separation Plant Nov 2013 Mar 2014 US$100m to complete construction (as at 30 June 2013) US$140 of available funding 19

20 Dredge 20

21 Wet concentrator 21

22 Dredge and wet concentrator 22

23 Mineral separation plant 23

24 Power station 24

25 Rail 25

26 Port 26