s Investor Presentation (WA Alumina Refineries) RECLAIM METALS FROM BAUXITE RESIDUE PREPARED BY: MICHAEL SHENTON JUNE 2015 Email: mshenton@primaresources.com.au Mob No : +61 407 919 077 www.primaresources.com.au Michael Shenton Minerals & Energy 1
Overview Presenter: Michael Shenton CEO Table of Contents 1. Executive Summary 2. Business Description 3. Financial Analysis 4. Implementation Strategy 5. Technology 6. Environmental Benefits 7. Local Community Benefits 8. WA State Benefits 9. Feasibility Study Minerals & Energy 2
1. Executive Summary Alumina Refinery Bauxite Residue Waste 1. Prima Resources and JV Partners will develop technology to process Bauxite Residue from all WA Alumina Refineries 2. 225.0 MT of Bauxite Residue stored over last 25 Yrs 25 Yr Program to recover metals in Bauxite Residue $6.0 Billion/Yr Estd annual profit from recycling metals 3. 20.0 MT of Bauxite Residue mud produced annually $13.0 Billion/Yr Estd annual profit from recycling metals 4. Each 1.0 MT/Yr Smelter Module Capital Cost $1.0 Billion Profit $600 Million/Yr- Payback period on Capital is 2.2 Yrs 5. Feasibility Study reqd - to be completed by Prima Resources Minerals & Energy 3
2. Business Description Reclamation of Metals from Bauxite Residue 1. 225 MT of Bauxite Residue stored in ponds over last 25 Yrs $158 Billion - Estimated metal value stored last 25 Yrs $6.0 Billion/Yr - Estd Annual Profit from reclaiming metals 3. 20 MT of Bauxite Residue produced annually $15.0 Billion Estimated metal value produced annually $13.0 Billion Estd annual profit from reclaiming metals 4. Plasma smelting technology now available to process Bauxite Residue for multiple metals simultaneously 5. Environmental technology now available to ensure Zero greenhouse gas emissions & Zero solid waste residue from smelter 6. Total reclamation & elimination of Bauxite Residue storage ponds Minerals & Energy 4
Typical Alumina Refinery WA Bauxite Residue Reclamation Project 2. Business Description Bauxite Residue Stored Last 25 Yrs one refinery 75 Million Tonnes of Bauxite Residue has been stored in Ponds (Bauxite Residue Drying Area = 3.0 MT/Yr x 25 Yrs) Current Value of Metal stored Bauxite Residue Area : $56.5 Billion If a Metals Recovery Program was Implemented over 25 Yrs Annual Metal Recovery Profit = $2.0 Billion / Yr Metals Available from 75.0 MT Stored Bauxite Asset Value of Metal Available to Prima (Profit after Operating Costs and before Tax) Total Metal Production over 25 Yrs (MT) EBIT $ / Tonne Value of Asset $ Million Per 25 Yrs EBIT $ Million Per 25 Yrs Iron 27.4 250 10,960 6,850 Aluminium 5.3 1,650 9,540 8,745 Titanium 1.8 19,000 36,000 34,200 Total Value of Metal Asset 56,500 49,795 Minerals & Energy 5
2. Business Description Total WA Alumina Refineries Bauxite Residue Stored Last 25 Yrs 225 MT (9.0 MT/Yr) Annual Profit $6.0 Billion / Yr (25 Yr Program to recover metals) Location Annual Red Mud Stored MT/Yr No Of Years Total Red Mud stored MT/Yr BHPB Worsley Alumina Refinery 3 25 75 Alcoa Wagerup Alumina Refinery 3 25 75 Alcoa Pinjarra Alumina Refinery 3 25 75 Total WA Alumina Refineries 225 Metals Available from 225.0 MT Stored Bauxite Asset Value of Metal Available (Profit after Operating Costs and before Tax) Total Metal Production over 25 Yrs MT Profit $ / Tonne Value of Asset $ Million Per 25 Yrs Profit $ Million Per 25 Yrs Iron 82.1 250 32,840 20,525 Aluminium 16.0 1,650 28,800 26,400 Titanium 5.4 19,000 97,200 102,600 Total Value of Smelted Metal Asset 158,840 149,525 Minerals & Energy 6
2. Business Description Total WA Alumina Refineries Annual Bauxite Residue Production 20.0 MT/Yr Annual Profit $13.0 Billion/Yr Location Current Annual Red Mud Production MT/Yr No Of Years Total Red Mud Production MT/Yr BHPB Worsley Alumina Refinery 8 1 8 Alcoa Wagerup Alumina Refinery 5 1 5 Alcoa Pinjarra Alumina Refinery 7 1 7 Total WA Alumina Refineries 20 Annual Production 20.0 MT/Yr Asset Value of Metal Available (Profit after Operating Costs and before Tax) Total Metal Production MT/Yr Profit $ / Tonne Value of Asset $ Million Per Yr Profit $ Million Per Yr Iron 7.3 250 2,920 1,825 Aluminium 1.4 1,650 2,556 2,343 Titanium 0.48 19,000 9,600 9,120 Total Value of Smelted Metal Asset 15,076 13,288 Minerals & Energy 7
2. Business Description Advantages of Bauxite Residue Projects 1. Bauxite Residue has previously been mined - (No mining cost) (No environmental impact from mining) 2. Bauxite Residue has previously been crushed and screened - (Minor crushing and screening costs/reclamation costs) 3. Known Quantity - Annual Production & Total Amount Stored - (Value of asset is clearly defined) 4. Consistency material has consistent size / chemical analysis - (Certainty in designing process/plant/equipment/products) 5. Availability certainty of supply to market/clients - (225.0 MT - Total WA Stored Bauxite Residue in BRDA s) - (20.0 MT/Yr - Total WA Annual Production Bauxite Residue) 6. Known Technology - Technology currently used in other industries - Plasma smelter and metals condensation - Minerals sands, metals recycling, nickel, lead, tin, zinc industries Minerals & Energy 8
2. Business Description Current WA Alumina Refinery Operation Poor recovery - only 22% of Ore extracted as Alumina High wastage - 78% of Ore wasted/stored as Bauxite Residue in Ponds Large environmental footprint 24.0 Sq Kms of Residue Ponds Environmental Impact - 300 Million Tonnes Hazardous Waste stored Current Total WA Alumina Refinery Profit - $1.6 Billion / Yr ($100 / Tonne ) Minerals & Energy 9
2. Business Description Minerals & Energy 10
3. Financial Analysis High Level Cost Model - 1.0 MT/Yr Module - Bauxite Residue Plasma Smelter Metal Prices Operating Costs / Tonne Aluminium USD $/Tonne 1,800 Bauxite Reclamation USD $/Tonne 15 Iron USD $/Tonne 400 Smelter Operating Cost USD $/Tonne 300 Titanium USD $/Tonne 20,000 Freight Cost $/Tonne/Km 0.05 Landholder Cost % of Profit 0.00% Materials Royalty Payment % of Value 2.5% Feedstock KT/Yr 1,000 Aluminium KT/Yr 100 Iron KT/Yr 365 Titanium KT/Yr 24 Total Operating Costs Bauxite Reclamation $ Million 16.5 Annual Revenue Smelter Operating Cost $ Million 146.7 Bauxite $ Million - Freight Cost $ Million 4.0 Aluminium $ Million 180.0 Corporate Cost $ Million 4.8 Iron $ Million 146.0 Landholder Cost $ Million - Titanium $ Million 480.0 Royalty Payment $ Million 40.3 TOTAL REVENUE $ Million 806.0 TOTAL OPERATING COST $ Million 212.3 EBITDA $ Million 593.7 Minerals & Energy 11
4. Implementation Strategy Bauxite Residue Smelter Projects: 1. Pilot Plant - 120,000 T/Yr - $400 Million Capital Cost 2. Bauxite Residue Smelters Implement in 1.0 MT/Yr Modules Capital Cost $1.0 Billion for each 1.0 MT/Yr Module Annual Profit $0.6 Billion for each 1.0 MT/Yr Module 3. Proposed Development in Stages (1) Iron Oxide Extraction - $55 Million Profit / Yr (2) 1.0 MT/Yr Metals Plant $0.6 Billion Profit / Yr (3) Increase Metals Plant in Stages ( Modules of 1.0 MT/Yr) 4. Jobs (1) Iron Oxide Extraction - 30 people (2) 1.0 MT/Yr Metals Plant Construction : 600 people for 2 x years Operations : 200 People for 25 Years (each 1.0 MT/Yr Module) Minerals & Energy 12
4. Implementation Strategy Options for Bauxite Residue Project Processing 1. Convert Hazardous Waste to Non-Hazardous Material Material Drying/Classification/NaOH Conversion System (Genesis technology conversion to non-hazardous material) Export bauxite residue material as feedstock to other countries 2. Extract Iron Oxide and Export as Iron Concentrate (Ore) Dynamic Magnetic Separation / Drying (large number of companies supply this technology) 3. Metals Extraction from Bauxite Residue - 1.0 MT/Yr Modules Low Pressure Plasma Smelter (3 x Metals Smelted Simultaneously) (Prima smelter technology study required and pyrotechnical lab work) Metals Distillation & Condensation Purification of Metals by Metal Distillation Minerals & Energy 13
5. Technology Example of Plasma Smelters in other Industries (2 or 3 x metals extracted simultaneously from ores/residues) Chromite Smelting Ilmenite Smelting Cobalt Smelting Nickel Smelting Lead Smelting Tin Smelting Magnesium Smelting Electronic/Batteries/Phones Scrap Recycling / Smelting Metals Scrap Recycling / Smelting Waste/Tailings Ponds reclamation of Metals Minerals & Energy 14
5. Technology Typical Plasma Smelter Flow Diagram Minerals & Energy
5. Technology Low Pressure Smelter Pressure 10-7 Bar Aluminium Gas at 1200 0 C Iron Gas at 1400 0 C Titanium Gas at 1800 0 C Low Pressure Smelter Energy Savings Current Process 0.211 GJ/KG Al LPS Process 0.083 GJ/KG Al Energy Saving 40% (Does not include Syngas Produced ) Total Energy Saving approx 75% Minerals & Energy
5. Technology EXAMPLE : Flowsheet: CYMCO 30 MW DC Furnace ilmenite smelting. - 85,000 tpa titanium dioxide slag - 60,000 tpa Pig Iron Minerals & Energy
5. Technology Typical Plasma Smelter Minerals & Energy
6. Environmental Benefits 1. Recycle stored bauxite residue eliminate hazardous residue ponds 2. Recycle annual production of bauxite residue - eliminate future residue ponds 3. Zero gas emissions (use of latest fertiliser technology & concreting technology to capture greenhouse gases) 4. Zero solid waste (all converted to concrete & graded road building materials) 5. Zero caustic bauxite residue waste (the innovative metals facility would not use caustic or Bayer Process ) 6. Zero waste water discharge (waste water treated and captured in concrete) 7. Use of latest environmental clean recycling technology to reduce emissions including: gas/dust/water /granular materials 8. Integrated and collaborative approach to plan to manage all environment concerns of stakeholders and community members 9. Full return of current waste ponds to productive land. Minerals & Energy 19
7. Local Community Benefits Provide Long Term Employment in South West of WA Provide stable family life without FIFO Substantial Contribution to local Economy Business Opportunities for Local Businesses to provide Services Training Opportunities for Local Residents in Industry Environmentally Aware and Responsible Industry Seek Engagement with all - local communities and stakeholders A New Minesite is NOT required utilise/reclaim existing Bauxite Residue Ponds Minerals & Energy 20
8. State Benefits $0.5 Billion / Yr Royalty Payments to WA Government $19.0 Billion / Yr Profits generated within WA $0.9 Billion / Yr - Provided in Wages for full time employees Provide Permanent Employment for up to 6,000 people over 25 Years Provide up to 2,000 Construction Jobs/yr for 10 Years Provide additional revenue and taxes to the WA Gov Budget Business benefits to WA from exporting Bauxite Residue Technology globally WA recognised as the state of Innovation and World Leaders in Technology Minerals & Energy 21
5. Feasibility Study Feasibility Study managed by Prima to include: Project Team / Specialists to develop the Project / Technology Pyrotechnical Lab Work Design Operational Pilot Plant 120,000 T/yr Location Manjimup / Kemerton Design Office Located Bunbury / South West Investigate/Design Power Supplies/Utilities/Infrastructure Investigate/Design Environmental Systems/Fertiliser/Concrete/Gas/Water Investigate Location of Smelters Alumina Refineries or Central Location / Kemerton Minerals & Energy 22
WA Alumina Refineries Bauxite Residue Reclamation Projects RECLAIM METALS FROM BAUXITE RESIDUE PREPARED BY: MICHAEL SHENTON Michael Shenton Minerals & Energy 23