ALTECH BATTERIES LTD — Investor Presentation 2015

Sep 30, 2015

Altech Chemicals Limited (ASX:ATC)

Company Presentation Melbourne Resource Round Up Iggy Tan Managing Director

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To be a world leading producer of high purity alumina (HPA)

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Our Vision
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• Sapphire & Ruby

• Natural form of high purity alumina (HPA)

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Sapphire
Gemstone
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• Formed by mother nature like diamonds

• Colour from impurities

• Nearly as hard as diamond

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• O

• Purified alumina (Al2 3)

• Greater than 99.99% (4N) purity

• Max impurities of 100ppm

• Smelter Grade Alumina (SGA) ~ 99.5% (5,000 ppm impurities mainly sodium)

• Bayer Process uses sodium hydroxide (NaOH)

• • Sodium impurity is problem for electronics industry

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What is HPA?
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SGA – Smelter Grade Alumina

Sapphire Glass Production

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Smelter Grade High Purity Alumina Alumina SGA 99.5% HPA 99.9% (3N) $400 per t $6,000 per t

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High Purity High Purity Alumina Alumina HPA 99.99% (4N) HPA 99.999% (5N) $23,000 per t $50,000 per t

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High Price
for Purity
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Our Target Business

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Welcome to the World of HPA

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Sodium Lamps
Hybrid Cars
Display Screens
Abrasives
Ultrafiltration
Ceramic
Electronic Substrates
Tools
Special
Semiconductors
Ceramics
HP Refractory
Polishing Cosmetics
Medical
Abrasives
Separation
Headlights
Membranes
LED Lighting
Optical Lenses
Industrial
Military Aerospace
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High Purity
Alumina
Applications
Phosphor
Semi Other
LEDs Based
conductors Applications
Applications Uses of HPA
99.99% 4N
Smartphone Others Phosphor
sapphire glass is 7% 16%
a new market
Semiconductors
22%
LED
55%
Source: Technavio Research “2014-2018 Global High-purity Alumina Market”
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Light Emitting Diodes (LEDs)

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Technavio Research

• Global HPA demand 19,040tpa in 2014

• • Expected to increase to 48,230tpa by 2018

• Growing at a CAGR of 28%

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Demand
for HPA
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HPA Demand & Growth Forecast

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60.0
50.0 48.2
39.9
40.0
32.4
30.0
25.3
19.0
20.0
14.1
10.0
0.0
2013 2014 2015 2016 2017 2018
Volume ktpa
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Demand
for HPA
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Source: Technavio Research “2014-2018 Global High-purity Alumina Market”

Global shipments of LED lamps forecast to increase from 864 m in 2015 to 4.1 billion by 2024 - Navigant Research

Source: 'LED Lighting: Global Outlook'

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• High end Vertu TI with sapphire crystal screen • Rest will follow

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Sapphire Crystal
Screen
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sapphire glass

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a pple watch & iphone 7

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• Estimate 30g[1] of HPA in phone screen

• 500 million smartphones sold per year

• If all sapphire glass technology o Extra 15,000tpa of HPA

• o 4 x our proposed 4,000tpa plant

• There will be a HPA supply deficit

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HPA
Demand from
Smartphones
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1 Altech Estimates

Sapphire Glass Scratch Test

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More Sapphire Display Factories

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• 70% of HPA demand - Asia Pacific region (APEC)

• Region for the world’s manufacturing

• Altech’s HPA plant (Malaysia) well-positioned to service APEC region

• Transport, customer service, technical credibility

Americas 14%

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HPA
Geographic
Demand
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Europe, Middle East, Africa 16%

Asia Pacific 70%

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• Six largest HPA producers

• • 3 Chinese, 1 Japanese, 1 Sth African, 1 French

Others (15), 3,570

Huantou, 800 Dailian Rall, 600

Nippon Light Metal, 1,100 Baikowski, 1,200 Xuancheng Jing Rui, 1,200

Sumitomo Chemical , 3,020 Sasol, 1,800

Hebei Pengda, 3,000

Zibo Xinfumeng, 2,500

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Current HPA
Producers
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Technavio Research

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Altech’s Differentiation

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Current HPA Producers
Alumina Alumina Aluminium
Refinery Smelter Dissolution
Bauxite Smelter Grade Alumina 99.8% Aluminium Metal 99.99% HPA
US$2,000 per tonne
ALTECH HPA PLANT
One Single Process Step
Aluminous Clay 99.99% HPA
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Aluminous Clay
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• Processed by mother nature

• Very low Iron (Fe) due to weathering

• Silica is non reactive – easily removed

	ca	s non rea	cve – e	sy rem	ove
		Bauxite	Canadian	Altech	Low - impurity
		Darling **Range ***	HPA Project	HPA Project	Aluminous C lay
	Al2O3 (%)	34.5	22.77	30.5	F eedstock
	SiO2 (%)	21.5	53.29	56.3
	Fe2O3 (%)	21.2	8.36	0.7
	TiO2 (%)	2.00	0.98	0.7
	K2O (%)	0.24	3.41	0.1
	NaO (%)	0.005	1.42	0.1
	pical Mean Analysis

Typical Mean Analysis

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• Altech owns 100% of deposit in W Aust

• Low environmental impact

• • Previously mined for kaolin – trial pit

• • Low stripping ratio

• 65Mt JORC Resource

• • 130kms from Fremantle Port

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Meckering
Aluminous Clay
Deposit
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• Use a standard HCl leach process

• Developed in 1980’s by alumina industry

• • Couldn’t compete with Bayer SGA costs

• • But great at producing HPA (no sodium ions)

• • However little demand of HPA in 1980s

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Altech’s
HPA
Process
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• Demand of HPA is here today

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New HPA Demand + Established Process + Great Deposit + Experienced People  Shareholder Value

Experienced People High Purity Deposit

New Demand (Electronics)

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Altech
Business
Strategy
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“the last piece of the puzzle is in place”

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• Started work in early 2011

• Many studies and testwork programs

• • No issues about producing 99.99% HPA

• • Supporting lab pilot plant test work

• • Off the shelf plant and equipment

• • Bankable Feasibility Study completed

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Development
Program
To Date
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Altech HPA Process

WESTERN AUSTRALIA

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Mining Screening Drying
Kaolin
HCl AlCl3
Activation Digestion Si Removal Crystallisation Purification
X3
Al2O3
HCl
Micronising Acid Wash Calcination Roasting
MALAYSIA
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Meckering Plant

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Beneficiated Kaolin Shipping

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• Tanjung Langsat Industrial Park, Johor Bahru (Malaysia)

• Kaolin feedstock shipped from WA

• • Operating costs ~40% lower than Australia

• Capital costs expected to be 50-60% lower

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HPA Site
Location
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Malaysian HPA Operation

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HPA LOCATION
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• Hydrochloric acid, lime, power & natural gas

• International container sea-port & Singapore

• Investment incentives

Malaysia HPA Plant

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• Capital cost estimate US$76.9 m

• Payback period 3.8 years

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• Pre-tax NPV10 of US$326 m

• Highly attractive IRR of 30.3%

• • Operating cost of US$8,200/t

• Margin of US$14,800/t

• Operating profit of US$59.4m pa

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Highly
Attractive
BFS
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• Breakaway values ATC 31c p share

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“It is not often that you see the NPV (US$ 326m) of a project, 4 times the multiple of the capital cost estimate (US$77m)” Iggy Tan MD

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Highly
Attractive
BFS
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• Breakway - competitors US$14-17,000 /t

• • Bottom quartile for operating costs

1. We own our feedstock

2. Large scale economy 4,000 tpa – one train

3. Main reactant HCl re-used

4. Minimal impurity removal costs

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Bottom
Quartile
for Op Costs
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5. Plant in low cost country (Malaysia)

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• Commenced discussions with Asian banks

• Targeting around $55 m project debt

• Structured project finance options

• • Europe based bonds

• Product off take phase

• MIDA tax incentives

• Detailed engineering & permitting

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Project
Finance
Phase
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Our Potential Customers

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• Mitsubishi as Sales partner in Japan

• Japan 21% of HPA market

• All sales to Japan

• Mitsubishi largest general trading company

• • Operates in 90 countries

• First of the off take process

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Mitsubishi
as Partner
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“HPA will be part of the next “new age materials boom” like rare earths, lithium and graphene” Iggy Tan

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Right Place Right Time Right Feedstock Right Technology

Thank you

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Forward-looking Statements

This announcement contains forward-looking statements which are identified by words such as ‘anticipates’, ‘forecasts’, ‘may’, ‘will’, ‘could’, ‘believes’, ‘estimates’, ‘targets’, ‘expects’, ‘plan’ or ‘intends’ and other similar words that involve risks and uncertainties. Indications of, and guidelines or outlook on, future earnings, distributions or financial position or performance and targets, estimates and assumptions in respect of production, prices, operating costs, results, capital expenditures, reserves and resources are also forward looking statements. These statements are based on an assessment of present economic and operating conditions, and on a number of assumptions and estimates regarding future events and actions that, while considered reasonable as at the date of this announcement and are expected to take place, are inherently subject to significant technical, business, economic, competitive, political and social uncertainties and contingencies. Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties, assumptions and other important factors, many of which are beyond the control of our Company, the Directors and management. We cannot and do not give any assurance that the results, performance or achievements expressed or implied by the forward-looking statements contained in this announcement will actually occur and readers are cautioned not to place undue reliance on these forward-looking statements. These forward looking statements are subject to various risk factors that could cause actual events or results to differ materially from the events or results estimated, expressed or anticipated in these statements.

Competent Person Statement

Technical information in this report is based on information compiled by Mr Michael O’Mara, B.Sc. Geology, Altech Chief Geologist and a member of the Australasian Institute of Geoscientists. Mr O’Mara has sufficient exploration experience which is relevant to the styles of mineralisation and types of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’ (“JORC 2004”). Mr O’Mara consents to the inclusion in this release of the matters based on his information in the form and context in which it appears.