ALTECH BATTERIES LTD — Investor Presentation 2016

Nov 10, 2016

Altech Chemicals Limited (ASX:ATC)

Annual General Meeting Iggy Tan Managing Director

==> picture [96 x 86] intentionally omitted <==

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

==> picture [177 x 226] intentionally omitted <==

==> picture [180 x 81] intentionally omitted <==

----- Start of picture text -----

Our Vision
----- End of picture text -----

==> picture [369 x 208] intentionally omitted <==

==> picture [96 x 86] intentionally omitted <==

• Sapphire & Ruby

• Natural form of high purity alumina (HPA)

==> picture [170 x 118] intentionally omitted <==

----- Start of picture text -----

Sapphire
Gemstone
----- End of picture text -----

• Formed by mother nature like diamonds

• Colour from impurities

• Nearly as hard as diamond (Moh 9)

==> picture [96 x 86] intentionally omitted <==

• O

• Purified alumina (Al2 3)

• Greater than 99.99% (4N) purity

• Smelter Grade Alumina (SGA) ~ 99.5% (5,000 ppm impurities mainly sodium) • Bayer Process uses sodium hydroxide (NaOH)

==> picture [205 x 81] intentionally omitted <==

----- Start of picture text -----

What is HPA?
----- End of picture text -----

• Sodium impurity is problem for electronics industry

==> picture [96 x 86] intentionally omitted <==

==> picture [101 x 101] intentionally omitted <==

==> picture [101 x 101] intentionally omitted <==

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

==> picture [75 x 81] intentionally omitted <==

==> picture [101 x 101] intentionally omitted <==

==> picture [101 x 101] intentionally omitted <==

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

==> picture [182 x 118] intentionally omitted <==

----- Start of picture text -----

High Price
for Purity
----- End of picture text -----

Our Target Business

==> picture [96 x 86] intentionally omitted <==

Sapphire Production

==> picture [366 x 219] intentionally omitted <==

HPA Furnance

==> picture [242 x 322] intentionally omitted <==

Sapphire crystal boule

==> picture [96 x 86] intentionally omitted <==

Sapphire Wafer Production

==> picture [354 x 316] intentionally omitted <==

==> picture [236 x 314] intentionally omitted <==

==> picture [64 x 11] intentionally omitted <==

----- Start of picture text -----

Sapphire wafer
----- End of picture text -----

==> picture [90 x 11] intentionally omitted <==

----- Start of picture text -----

Sapphire glass screen
----- End of picture text -----

==> picture [96 x 86] intentionally omitted <==

LEDs lights of the future

==> picture [238 x 295] intentionally omitted <==

Conventional LEDs

==> picture [335 x 295] intentionally omitted <==

New LED products

==> picture [96 x 86] intentionally omitted <==

==> picture [450 x 206] intentionally omitted <==

----- Start of picture text -----

High Purity
Alumina
Applications
Phosphor
Semi Other
LEDs Based
conductors Applications
Applications
----- End of picture text -----

==> picture [430 x 175] intentionally omitted <==

----- Start of picture text -----

Smartphone and Others Phosphor
12%
Lithium batteries 10%
are new markets
Semiconductors
21%
LED
57%
----- End of picture text -----

==> picture [196 x 118] intentionally omitted <==

----- Start of picture text -----

Uses of HPA
99.99% 4N
----- End of picture text -----

Source: Persistence Research “High Purity Alumina Market – Global Industry Analysis and Forecast 2016-2014

==> picture [96 x 86] intentionally omitted <==

• Global HPA demand 25,315tpa in 2016[1]

• Expected to increase to 86,831tpa by 2024[1]

• Growing at a CAGR of 17%

• Driven by LED growth & Lithium batteries

• • Entering a fast growing market

==> picture [153 x 118] intentionally omitted <==

----- Start of picture text -----

Demand
for HPA
----- End of picture text -----

Source: Persistence Research “High Purity Alumina Market – Global Industry Analysis and Forecast 2016-2014

==> picture [96 x 86] intentionally omitted <==

Global High Purity Alumina Forecast 2015 -2014

==> picture [435 x 201] intentionally omitted <==

----- Start of picture text -----

Source: Persistence Research “High Purity Alumina Market – Global 86,831
Industry Analysis and Forecast 2016-2014
75,637
65,036
55,350
46,748
39,786
34,328
29,669
25,315
21,309
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
HPA Comsumtion tpa
----- End of picture text -----

==> picture [153 x 118] intentionally omitted <==

----- Start of picture text -----

Demand
for HPA
----- End of picture text -----

Global LED lamps forecast - 864 million in 2015 to 4.1 billion by 2024 Source: 'LED Lighting: Global Outlook'

==> picture [96 x 86] intentionally omitted <==

Lithium Battery Separator

==> picture [337 x 270] intentionally omitted <==

----- Start of picture text -----

Anode Sheet
Separator
Cathode Sheet
----- End of picture text -----

==> picture [185 x 135] intentionally omitted <==

==> picture [183 x 136] intentionally omitted <==

==> picture [96 x 86] intentionally omitted <==

HPA Separator Forecast

==> picture [579 x 330] intentionally omitted <==

----- Start of picture text -----

GLOBAL SEPARATOR HIGH PURITY ALUMINA DEMAND
99.99% HPA Used in Lithium Battery Separators
15,102
Source: Altech Chemicals & Deutsche Bank Markets Research
Industry Lithium 101 - 9 May 2016
13,848
11,589
Number of ATC HPA Plants
required 9,431
7,554
5,810
Key Assumptions:
HPA Coating 5g /m2 or 40 g/kWh 3,985
Penetration rate of 6% pa from 2015
2,713
1,629
283 919
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
HPA Comsumtion in Li-Ion Battery Industry, tpa
----- End of picture text -----

==> picture [96 x 86] intentionally omitted <==

• 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%

==> picture [203 x 157] intentionally omitted <==

----- Start of picture text -----

HPA
Geographic
Demand
----- End of picture text -----

Europe, Middle East, Africa 16%

Asia Pacific 70%

==> picture [96 x 86] intentionally omitted <==

• 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

==> picture [196 x 118] intentionally omitted <==

----- Start of picture text -----

Current HPA
Producers
----- End of picture text -----

Technavio Research

==> picture [96 x 86] intentionally omitted <==

Altech’s Differentiation

==> picture [634 x 306] intentionally omitted <==

----- Start of picture text -----

Current HPA Producers
Alumina Alumina Aluminium
Refinery Smelter Dissolution
Bauxite Smelter Grade Alumina 99.8% Aluminium Metal 99.99% HPA
US$3,000 per tonne
ALTECH HPA PLANT
One Single Process Step
Aluminous Clay 99.99% HPA
----- End of picture text -----

==> picture [84 x 14] intentionally omitted <==

----- Start of picture text -----

Aluminous Clay
----- End of picture text -----

==> picture [96 x 86] intentionally omitted <==

• 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

==> picture [96 x 86] intentionally omitted <==

• Altech owns 100% of deposit in W Aust

• • Low environmental impact

• 12 Mt JORC Resource

• > 250 year mine life

• • 130kms from Fremantle Port

• • Mining lease granted

==> picture [222 x 119] intentionally omitted <==

----- Start of picture text -----

Meckering
Kaolin Deposit
----- End of picture text -----

==> picture [362 x 208] intentionally omitted <==

==> picture [96 x 86] intentionally omitted <==

• 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)

==> picture [159 x 157] intentionally omitted <==

----- Start of picture text -----

Altech’s
HPA
Process
----- End of picture text -----

• However little demand of HPA in 1980s

• Demand of HPA is here today

==> picture [96 x 86] intentionally omitted <==

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

Experienced People High Purity Deposit

New Demand (Electronics)

==> picture [161 x 156] intentionally omitted <==

----- Start of picture text -----

Altech
Business
Strategy
----- End of picture text -----

“the last piece of the puzzle is in place”

==> picture [96 x 86] intentionally omitted <==

• 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

==> picture [201 x 157] intentionally omitted <==

----- Start of picture text -----

Development
Program
To Date
----- End of picture text -----

==> picture [369 x 208] intentionally omitted <==

==> picture [96 x 86] intentionally omitted <==

• Lower quartile costs

• • Kaolin feedstock shipped from WA

• • Chemical industrial park

• • Sea container ports

==> picture [163 x 157] intentionally omitted <==

----- Start of picture text -----

HPA Site
Location
Johor
----- End of picture text -----

• Site secured

• • Malaysian government incentives

==> picture [96 x 86] intentionally omitted <==

Altech’s HPA Plant - Malaysia

==> picture [706 x 398] intentionally omitted <==

----- Start of picture text -----

Crystallisation Plant
Residue Plant
Acid Leach
Calcination
Final Product
Kaolin
Calcination
Kaolin Plant
Sea container
unloading
Security
----- End of picture text -----

==> picture [96 x 86] intentionally omitted <==

• Capital cost estimate US$78.7m

• Payback period 3.7 years

• Pre-tax NPV9 of US$357.5m

• Highly attractive IRR of 33.3%

• Operating cost of US$9,070/t

• Sale price of US$23,000/t

• Margin of US$13,930/t

==> picture [175 x 157] intentionally omitted <==

----- Start of picture text -----

Highly
Attractive
BFS
----- End of picture text -----

• EBITDA US$55.7m pa

Last updated March 2016

24

==> picture [96 x 86] intentionally omitted <==

• Breakaway - competitors US$14-17,000 /t

1. We own our feedstock

==> picture [205 x 157] intentionally omitted <==

----- Start of picture text -----

Bottom
Quartile
for Op Costs
----- End of picture text -----

2. Main reactant HCl re-used

3. Plant in low cost country (Malaysia)

==> picture [273 x 242] intentionally omitted <==

----- Start of picture text -----

Altech
----- End of picture text -----

Source: Persistence Research “High Purity Alumina Market – Global Industry Analysis and Forecast 2016-2014

==> picture [96 x 86] intentionally omitted <==

• Off take sales with Mitsubishi

• • First ten years of HPA operations

• • Secures sales for 100% of 4,000tpa HPA production

• • Exclusive global distributor

• • Experienced with HPA

• • Strategic priority – Lithium batteries

==> picture [183 x 157] intentionally omitted <==

----- Start of picture text -----

Mitsubishi
signs full
off take
----- End of picture text -----

Contract Year Forecast Production Contracted Sales		Contract Year Forecast Production Contracted Sales
Year 1 2,700t 2,700t		Year 6 4,000t 4,000t
Year 2 3,000t 3,000t		Year 7 4,000t 4,000t
Year 3 3,400t 3,400t		Year 8 4,000t 4,000t
Year 4 3,800t 3,800t		Year 9 4,000t 4,000t
Year 5 4,000t 4,000t		Year 10 4,000t 4,000t

==> picture [96 x 86] intentionally omitted <==

• Debt funding with KfW IPEX Bank

• • 60% of plant – German suppliers

• Target of US$70m

• Export Credit cover of $60m

• Target sole lender – KFW IPEX Bank

• • M+W Group as general contractor

==> picture [278 x 196] intentionally omitted <==

==> picture [216 x 157] intentionally omitted <==

----- Start of picture text -----

We are at the
funding
stage
----- End of picture text -----

Altech Chemicals Limited (ASX:ATC)

Project Update

==> picture [369 x 208] intentionally omitted <==

==> picture [96 x 86] intentionally omitted <==

• Mining lease granted

• Option to purchase from landowner

• • Grade control drilling completed

==> picture [204 x 119] intentionally omitted <==

----- Start of picture text -----

Meckering
Development
----- End of picture text -----

• Mineral resource of 12 Mt established

• > 250 years mine life

• Maiden ore reserve of 1.2 Mt

• 30 year mine plan completed

==> picture [96 x 86] intentionally omitted <==

• Mining proposal about to be submitted

• EPC contractor awarded

• Mining contractor awarded

• • Mining contract being drafted

• Shipping & transport contractor awarded

==> picture [204 x 119] intentionally omitted <==

----- Start of picture text -----

Meckering
Development
----- End of picture text -----

==> picture [369 x 208] intentionally omitted <==

==> picture [96 x 86] intentionally omitted <==

• Site secured with deposit

• Opened Malaysian subsidiary office

• • Awarded transport & shipping contractor

• • WKL appointed to commence permitting

• • Site soil drilling & survey completed

• • Utilities application commenced

==> picture [218 x 118] intentionally omitted <==

----- Start of picture text -----

Johor
Development
----- End of picture text -----

• Supply contracts underway

• Final site layout completed

==> picture [365 x 208] intentionally omitted <==

==> picture [96 x 86] intentionally omitted <==

• Detailed design in full force

• About 50 engineers in Germany and Singapore

• • Major equipment packages out for final pricing

• • Kilns and HCL – preliminary eng

• • Major pipe routing completed

• • 3D model of plant finished

==> picture [210 x 157] intentionally omitted <==

----- Start of picture text -----

Detailed
Design M+W
Group
----- End of picture text -----

• Site layout completed

• Architecture design completed

==> picture [96 x 86] intentionally omitted <==

Altech’s HPA Plant - Malaysia

Proposed HPA plant office

==> picture [96 x 86] intentionally omitted <==

• HPA used in lithium battery separators

• Fire retardant separators – Samsung

• Strong growth in large format batteries

• • Altech targeting 50% sales in Japan

• • Japan price of 4N HPA – US$30,000 /t

• • ATC BFS long term price used – US$23,000/t

• NPV would be US$ 597 million, IRR 47%

• • Prefer to use conservative price

==> picture [142 x 157] intentionally omitted <==

----- Start of picture text -----

HPA
Market
Update
----- End of picture text -----

==> picture [365 x 208] intentionally omitted <==

==> picture [96 x 86] intentionally omitted <==

• Debt target increased to US$70m

• Export credit finance increased to US$60m

• • Long tenure, low interest rate

• • Single bank financing (KFW IPEX)

• Indicative term sheet

• Positive pre-assessment ECA

==> picture [222 x 119] intentionally omitted <==

----- Start of picture text -----

Debt Funding
Increased
----- End of picture text -----

==> picture [365 x 208] intentionally omitted <==

==> picture [96 x 86] intentionally omitted <==

• Independent DD consultants appointed

• • Technical, legal and market consultants

• • Thorough DD including site visits

• • Review of lab pilot plant operation

• • Preliminary DD report – No fatal flaws

• • KFW DD meeting with Mitsubishi (Tokyo)

• • Preparation of DD documentation

==> picture [170 x 157] intentionally omitted <==

----- Start of picture text -----

Due
Diligence
Update
----- End of picture text -----

==> picture [365 x 208] intentionally omitted <==

==> picture [96 x 86] intentionally omitted <==

• Debt funding term sheet Q1 2017 • Project equity Q2 2017

==> picture [213 x 118] intentionally omitted <==

----- Start of picture text -----

Timeframe to
market
----- End of picture text -----

• Site works commencing Q2 2017

• • 18 months construction

• First product due early 2019

==> picture [96 x 86] intentionally omitted <==

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

Competent Persons Statement – Meckering Kaolin Deposit

The Competent Person for the Ore Reserve statement is Mr Carel Moormann who is employed by Orelogy Consulting Pty Ltd as a Principal Consultant. Orelogy Consulting Pty Ltd is an independent mine planning consultancy based in Perth, Western Australia. Orelogy was requested by Altech Chemicals Ltd to prepare a reserve estimate for the Meckering kaolin deposit to provide feedstock for High Purity Alumina production. Mr Moormann is a Fellow of the Australasian Institute of Mining and Metallurgy and a Competent Person as defined by the 2012 JORC Code. Mr Moorman has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 JORC Code. Mr Carel Moorman consents to the inclusion in this release of the matters based on his information in the form and context in white it appears.

Competent Persons Statement – Meckering Kaolin Deposit

The information in this release that relates to Exploration Results and Mineral Resources are based on information compiled by Sue Border, a Competent Person who is a Fellow of The Australasian Institute of Mining and Metallurgy and Fellow of the Australian Institute of Geoscientists. Sue Border has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the exploration activity being undertaken 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’. Mrs Border consents to the inclusion in the report of the matters based on this information in the form and context in which it appears.