ALTECH BATTERIES LTD — Investor Presentation 2017

Feb 20, 2017

Altech Chemicals Limited ATC

The CEO Sessions ASX Exchange Auditorium Company Presentation 21 February 2017

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To be a world leading producer of high purity alumina (HPA) – 4,000 tpa

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• Sapphire as hard as diamond

• Forms in nature – temp and pressure

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About
Sapphire
and HPA
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• Synthetic sapphire wafers

• Used in LEDs, semiconductors, watches

• • Needs pure alumina (99.99%)

• 99.99% (4N) HPA sells for US$23,000 tonne

• • 70% demand - Asia Pacific region

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• O

• Purified alumina (Al2 3)

• 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 Price
for Purity
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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

Our Target Business

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Sapphire Production

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HPA Furnace

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Sapphire crystal boule

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Sapphire Wafer Production

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Sapphire wafer

Sapphire glass screen

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Lithium-ion Battery Separator

Anode Sheet Separator Cathode Sheet

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HPA used in lithium-ion batteries

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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 2016-2024”

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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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Source: 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 99.5% Aluminium Metal 99.99% (4N) HPA
US$3,000 per tonne
ALTECH HPA PLANT
One Single Process Step
Kaolin 99.99% (4N) HPA
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Kaolin (Aluminous Clay)

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• Very low Iron (Fe) due to weathering

• 12.7Mt JORC Mineral Resources (250 yrs)

• Measured Resources 1.5Mt @30% Al2O3

• Indicated Resources 3.3Mt @ 30% Al2O3

• Inferred Resources 7.9Mt @ 29.1% Al2O3

• Deposit in Western Australia

	Bauxite Darling **Range ***	Canadian HPA Project	Altech HPA Project
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
K2O (%)	0.24	3.41	0.1
NaO (%)	0.005	1.42	0.1

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-
Low impurity
Kaolin
Deposit
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* Typical Mean Analysis

• ** JORC Ore Reserves (Refer ASX Announcement 11 October 2016). The Company is not aware of any new information or data that materially affects the information included in this announcement and confirms that all material assumptions and technical parameters underpinning the estimates continue to apply and have not materially changed.

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• Work started in 2011

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Going
Commercial
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• Established HCl technology from 1980s

• • Extensive laboratory testwork

• • Pilot laboratory testing

• Completed successful BFS

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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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Altech’s HPA Plant - Malaysia

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HCl Plant
Acid Leach
Utility Sub Station
Maintenance
Gatehouse
Administration
Carpark
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Altech’s HPA Plant - Malaysia

Proposed HPA plant office

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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

Refer ASX Announcement titled “Altech Improves Financial of its HPA Project with BFS Update” dated 16 March 2016.

Altech confirms that all material assumptions underpinning the production target ad financial information derived from the production target continue to apply and have not materially changed.

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• Competitors US$14-17,000 /t (Breakaway Research)

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 Market Research “High Purity Alumina Market – Global Industry Analysis and Forecast 2016-2024”

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• Off take sales with Mitsubishi

• First ten years of HPA operations

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Mitsubishi
signs full
off take
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• Secures sales for 100% of 4,000tpa HPA production

• Exclusive global distributor

• Experienced with HPA

• Strategic priority – Lithium batteries

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• Debt funding with KfW IPEX-Bank

• 60% of plant – German suppliers

• Target of US$70m

• Export Credit cover of US$60m

• • Target sole lender – KfW IPEX-Bank

• German M+W Group EPC contractor

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We are at the
funding
stage
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• Independent DD consultants appointed

• Technical, legal and market consultants

• Thorough DD including site visits

• KfW DD meeting with Mitsubishi (Tokyo)

• Confirmatory pilot plant test work in South Africa, Australia and Germany

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Debt Due
Diligence
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• Preliminary DD report – No fatal flaws

• Now at advanced stage

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Confirmatory DD Pilot Plant Tests

Australia

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Acid leach test work Simulus Laboratories

Crystalliser test work Simulus Laboratories

South Africa

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Roaster test work - Drytech

Roaster internal temperature at 700˚C

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Confirmatory DD Pilot Plant Tests

Germany

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Jet mill test work – Netzsch

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Jet mill test work – Netzsch

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• Annual HPA demand forecast of 86,831tpa by 2024 (est. 2016: 25,315tpa)

• Altech’s strategy of focusing on 4N HPA endorsed

• HPA use in lithium-ion batteries offers incremental demand

• Altech targeting 50% sales in Japan

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

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Market DD
Study by
Persistence
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Source: Persistence Market Research “High Purity Alumina Market – Global Industry Analysis and Forecast 2016-2024”

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• Detailed design at advanced stage

• 55 M+W engineers on the project

• • Germany, Singapore and Malaysia

• • Process plant, equipment & piping (Germany)

• • Civil, buildings, electrical, instruments (Singapore)

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Detailed
Design is
progressing
well
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• Overall about 90% specified

• • Overall 65% in binding quotes

25

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• Debt funding term sheet end Q2 2017

• • Project equity Q3 2017

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Timeframe
to market
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• Site works commencing Q3 2017

• • 18 months construction

• First product due early 2019

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Altech Chemicals Limited
Market Capitalisation - end of month ($m)
$45.0 $42.6
$35.9
$35.0 $31.8 $31.9
$27.9 $28.8 $29.3 $29.3
$25.0 $16.1 $21.3
$14.8 $14.3 $15.8 $15.0 $16.8 $14.2 $17.2
$15.0 $12.1
$7.2 [$7.3 ]
$5.0
Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17
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Altech growth
performance
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• 600% growth market cap growth

• • Ave trade value $2k /day to $205 k /day

• • 640 shareholders to 1,660 shareholders

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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 Persons Statements – Meckering Kaolin Deposit

The information in this announcement that relates to Mineral Resources and Ore Reserves is extracted from the report entitled “Maiden Ore Reserve at Altech’s Meckering Kaolin Deposit” released on 11 October 2016; the report is available to view of the Company’s website www.altechchemicals.com. The Company confirms that it is not aware of any new information or data that materially affects the information included in the original market announcement and, in the case of estimates of Mineral Resources and Ore Reserves, that all material assumptions and technical parameters underpinning the estimates in the relevant market announcement continue to apply and have not materially changed. The Company confirms that the form and context in which the Competent Person’s findings are presented have not been materially modified from the original market announcement.