ALTECH BATTERIES LTD — Investor Presentation 2016

Oct 17, 2016

Altech Chemicals Limited (ASX:ATC)

Company Presentation “Meeting a Sapphire Future” Iggy Tan Managing Director

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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 (Moh 9)

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• 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)

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What is HPA?
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• Sodium impurity is problem for electronics industry

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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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Sapphire Production

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HPA Furnance

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Sapphire crystal boule

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Sapphire Wafer Production

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Sapphire wafer
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Sapphire glass screen
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LEDs lights of the future

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Conventional LEDs

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New LED products

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High Purity
Alumina
Applications
Phosphor
Semi Other
LEDs Based
conductors Applications
Applications
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Smartphone and Others Phosphor
12%
Lithium batteries 10%
are new markets
Semiconductors
21%
LED
57%
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Uses of HPA
99.99% 4N
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Source: Persistence Research “High Purity Alumina Market – Global Industry Analysis and Forecast 2016-2014

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• 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

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

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Global High Purity Alumina Forecast 2015 -2014

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

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Lithium Battery Separator

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Anode Sheet
Separator
Cathode Sheet
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Sapphire Glass Scratch Test

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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$3,000 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

• 12 Mt JORC Resource

• > 250 year mine life

• • 130kms from Fremantle Port

• • Mining lease granted

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Meckering
Kaolin 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)

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Altech’s
HPA
Process
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• However little demand of HPA in 1980s

• Demand of HPA is here today

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Altech’s HPA Plant - Malaysia

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Crystallisation Plant
Residue Plant
Acid Leach
Calcination
Final Product
Kaolin
Calcination
Kaolin Plant
Sea container
unloading
Security
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• 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

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Highly
Attractive
BFS
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• EBITDA US$55.7m pa

Last updated March 2016

21

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

1. We own our feedstock

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Bottom
Quartile
for Op Costs
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2. Main reactant HCl re-used

3. Plant in low cost country (Malaysia)

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

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• Off take sales with Mitsubishi

• • First ten years of HPA operations

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

• • Exclusive global distributor with well established global customer base

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

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Mitsubishi
signs full
off take
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• 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

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We are at the
funding
stage
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• HPA bank due diligence nearing completion

• No fatal flaws identified

• Positive pre-assessment German interministerial committee

• Detailed design progressing as planned

• • Permitting for Malaysian HPA plant commenced

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Project
Update
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• Mining proposal at Meckering

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• Raise $10m in oversubscribed placement

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Altech
Chemicals
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• Market cap ▲470% in last 12 months

• Shareholders ▲600  1,500

• Liquidity daily trade ▲$3k  $200k /day

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• Debt funding term sheet agreed Q1 2017

• Capital cost estimate avail half way through detailed design phase

• Project equity Q2 2017

• • Site works commencing Q2 2017

• 18 months construction

• • First product due early 2019

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Timeframe to
market
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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

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.