ALTECH BATTERIES LTD — Investor Presentation 2015

Jan 26, 2015

Altech Chemicals Limited (ASX:ATC)

North America Roadshow Company Presentation 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 - natural form of high purity alumina (HPA)

• Formed by mother nature like diamonds

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Sapphire
gemstone
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• Extremely hard – no. 9 on Mohs scale (third hardest mineral behind diamond)

• Scratch-resistant artificial sapphire glass made from HPA

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• O Purified alumina or aluminum oxide (Al2 3)

• Greater than 99.99% (4N) purity

• Maximum allowable impurities of 100ppm

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

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What is HPA?
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• Bayer Process, sodium contamination

• • Lots of work to upgrade SGA (99.5%)  4N 99.99% HPA

• Heat resistance, electrical insulation, abrasion & corrosion resistance, extreme hardness

SGA – Smelter Grade Alumina

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Smelter Grade High Purity High Purity High Purity Alumina Alumina Alumina Alumina SGA 99.5% HPA 99.9% (3N) HPA 99.99% (4N) HPA 99.999% (5N) $0.4 per Kg $1 -10 per Kg $10-50 per Kg $50-150 per Kg

Our Target Business

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High price
for purity
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• HPA is placed in an autoclave

• Heated to >2,000[o] C melting point under intense pressure

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Artificial
sapphire
process
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• Forms single crystal sapphire (boule)

• • Allowed to cool slowly – 22 day cycle

• Diamond cutting equipment to cut sapphire shapes

• Heat & scratch resistant

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Welcome to the world of HPA
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
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Smartphone Others Phosphor
sapphire glass is 7% 16%
a new market
Semiconductors
22%
LED
55%
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Uses of HPA
99.99% 4N
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Technavio Research

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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%

QY Research

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Demand
for HPA
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• Global HPA demand 24,550tpa in 2014

• • Expected to grow to 36,000tpa in 2017

• • Growing at a CAGR of 16%

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HPA Demand & Growth Forecast

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60.0 40%
35%
50.0 35% 48.2
33% 30%
39.9
40.0 28%
25%
32.4
23%
30.0 20%
25.3 21%
19.0 15%
20.0
14.1
10%
10.0
5%
0.0 0%
2013 2014 2015 2016 2017 2018
Volume ktpa Growth Rate %
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Demand
for HPA
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• Rapid growth rates • Estimated supply deficit

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• Estimate 30g[1] of HPA in an iPhone sapphire glass screen

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HPA
demand:
smartphones
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• 500 million smartphones sold per year

• If sapphire glass technology was implemented o It would require about 15,000tpa of HPA

• o That’s four of our proposed 4,000tpa plant

• There will be a HPA supply deficit

• Altech is in the right space!

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1 Altech Estimates

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

• Region for the world’s manufacturing

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

• Transport, customer service, technical credibility Americas

Americas 14%

Europe, Middle East, Africa 16%

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HPA
geographic
demand
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Asia Pacific 70%

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• 6 largest HPA producers

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

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HPA
Producers
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Sumitomo Chemical , 3,020 Others (15), 3,570 Huantou, 800 Sasol, 1,800 Dailian Rall, 600 Nippon Light Metal, 1,100 Baikowski, 1,200 Hebei Pengda, 3,000 Xuancheng Jing Rui, Zibo Xinfumeng, 2,500 1,200

Technavio Research

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ALTECH’S DIFFERENTIATION

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Current HPA Producers
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Alumina Alumina Current HPA
Refinery Smelter Producers
Bauxite Smelter Grade Alumina 99.8% Aluminium Metal 99.99% HPA
Or other high purity Al compounds
ALTECH HPA PLANT
One Single Process Step
Aluminous Clay 99.99% HPA
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Aluminous Clay
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• Processed and purified by mother nature

• Very low impurities due to weathering

• Iron levels are 0.7% vs 21% in bauxite

	Iron l	evels are 0.7% vs 21% in	evels are 0.7% vs 21% in	evels are 0.7% vs 21% in	bauxite
	Silica is non reactive – easily removed					Low-impurity
		Bauxite	Canadian	Altech		aluminous clay
		Darling Range	HPA Project	HPA Project		feedstock
	Al2O3 (%)	34.5	22.77	30.5
	SiO2 (%)	21.5	53.29	56.3
	Fe2O3 (%)	21.2	8.36	0.7
	TiO2 (%)	2.00	0.98	0.7
	Typical Mean	Analysis

• Silica is non reactive – easily removed

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• Majors like Sumitomo, Sasol:

o Aluminum alkoxide from Al metal (1)

• Chinese producers:

o Choline – Dissolving Al foil in choline

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Current HPA
producers
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• Chinese producers:

o Aluminium Hydroxide (2) with HCl

• All use relatively expensive feedstock

• • Altech aluminous clay 5 times cheaper than Al metal (3)

Route	HPA Process Method	Feedstock Costs USD/tper 100% Al2O3
1	Aluminium Metal	$1,052 /t
2	Aluminum Hydroxide	$570 /t
3	Altech Aluminous Clay	$220 /t

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• Altech owns 100% of deposit

• Landowner agreement in place

• • No native title

• 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

• Standard metal extraction

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Altech’s
HPA
process
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• Developed in 1980’s by alumina industry

• • Couldn’t compete with bauxite SGA costs

• • Great at producing HPA (no sodium ions)

• • No demand of HPA in 1980s

• • Conventional & off the shelf equipment

• • Simple recovery of acid and recycling

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• Laboratory test work simulates process

• • Final 99.99% (4N) HPA produced

• • Integrated Plant Study (IPS) completed

• • Process works and is robust

• • Towards larger commercial plant

• • IPS pilot plant opex around A$8.6/kg

• • HPA sells for US$20-$25/kg

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Our success
so far
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Clean HCl

ALTECH HPA PROCESS

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WESTERN AUSTRALIA

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Campaign Mining
ROM Storage Shed
Screening Filter Press
Drum Scrubber Attritioner > 0.5mm
Calcined Clay
Feed Storage
Hydrochloric Acid
Cooler
Calciner HCl Gas
Polishing
Milling
Filter
600 C thickener
MALAYSIA Screening
Stage 1 Crystalisation
Acid Leach Vessels
Neutralised Limestone & Hydrated Filter
Lime
Silica Residue Filter
Sale to
Cement Plant HCl gas
Neutralising Generator
Filter Tank
Condenser HCl HCl
Gas water Gas water
HCl
High Purity Microniser 1100 C 400 C Filter Filter
Alumina
99.99%
Cooler Calciner Roaster
Stage 3 Polishing Stage 2
Crystalisation Filter Crystalisation
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• Target: to be a top HPA producer in the world

• Launched BFS for 4,000tpa HPA

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Bankable
Feasibility
Study (BFS)
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o BFS completion: end Q3 2015

• In parallel, progress necessary approvals, funding, off- take agreements etc.

• Subject to funding:

• In position to order long lead capital items

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• Then detailed design, site works, construction

• Continuous laboratory pilot plant work

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AUSTRALIAN OPERATION

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Diesel Generator
Screening
Diesel Storage
Drum Trommel
Office
Plant Feed
OS Rejects
Product Storage
Filtration
Beneficiated Al Clay shipped to HPA
Run of Mine
Plant in Malaysia
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• Tanjung Langsat Industrial Park, Johor Bahru (Malaysia)

• Al clay feedstock shipped from WA

• • Operating costs ~40% lower than Australia

• Capital costs expected to be 50-60% lower

• Anticipates opex in the bottom quartile of the cost curve for international HPA producers

• • Letter of Intent (LOI) submitted for land

• • Appointment of JB environmental consultant to progress approvals

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HPA Preferred
Location
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ALTECH’s PREFERRED SITE LOCATION

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

• • Cement plants to purchase silica residue

• Skilled labour, telecommunications

• International container sea-port & Singapore

• Investment incentives

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MALAYSIA HPA OPERATION

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Water Treatment
Limestone
Leach
Silica
Neutralisation
Cooler
Feed Calciner
Silica
Purification Removal
Beneficiated
Final
Roaster Kaolin Feed
Product
Product Calciner
Product Cooler Jet Milling & Bagging
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Highly experienced board:

• Fundraising

• Project building

• Industrial chemical processing

• Alcoa Alumina management

• Sherwin Alumina management

• High purity chemicals

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Luke Atkins Chairman

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Experienced
board
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Iggy Tan Managing Director

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Dan Tenardi Non Exec Director

Peter Bailey Non Exec Director

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Corporate Snapshot
ASX Code	ATC
Shares on Issue	111.5m
Share Price¹	A$0.80
Market Capitalisation(Undiluted)	A$8.9m
Options on Issue	21.5m

Major Shareholders	Major Shareholders	Major Shareholders
Board & Management		36%
Top Twenty Shareholders		25%

	Cash Position	$
	Cash		A$ 1.2m
	Debt2		A$ 0
	~~ASX Share Price Performance~~

• 1Closing price on 17 November 2014 2As at 17 November 2014 3As at 17 November 2014.

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• Midpoint Evaluation of $0.25 / share

• Only 7.5% of full project value – early stage

• EV/EBITDA Multiple Valuation

• 7.5 x EV / EBITDA multiple, Price $20/kg, Opex $8/kg = $360m evaluation

DCF Valuation

• Disc @10%, Price $20kg, Opex $8/kg = $260m Evaluation

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Breakaway
Research
Evaluation
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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 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.