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QEM LIMITED Investor Presentation 2021
65644_rns_2021-08-03_e42ef2f4-b1bb-466e-836d-ac35f57748eb.pdf
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QEM INVESTOR PRESENTATION August 2021
Advancing the Julia Creek Energy Project
Disclaimer
QEM Limited ACN 167 966 770 (QEM or the Company) is the issuer of this presentation. The issue of this presentation is intended only for the person or entity to which it has been transmitted.
Limited Responsibility for Information
This presentation contains forward-looking statements. Those forward-looking statements reflect views held only as at the date of this presentation. Any such statement is subject to inherent risks and uncertainties. Actual events or results may differ materially from the events or results expressed or implied in any forward-looking statement, and such deviations are both normal and to be expected. Recipients must make their own assessment about the likelihood of a matter, about which a forward-looking statement is made, occurring. QEM makes no representation about the likelihood of a matter, about which a forward-looking statement is made, occurring. QEM and its directors, employees, agents, advisers and consultants: give no representation or warranty to a recipient of this presentation as to the accuracy or completeness of the statements contained in this presentation or in relation to any other matter; and to the full extent permitted by law, disclaim responsibility for and have no liability to a recipient of this presentation for any error or omission in or for any statement in this presentation.
Reliance on presentation
A recipient of this presentation must make their own assessment of the matters contained herein and rely on their own investigations and judgment in making an investment in QEM. This presentation does not purport to contain all of the information a recipient of this presentation requires to make an informed decision whether to invest in QEM. Specifically, this presentation does not purport to contain all the information that investors and their professional advisers would reasonably require to make an informed assessment of QEM's assets and liabilities, financial position and performance, profits, losses and prospects. Recipients of this presentation should make investment decisions based on their own investigations and not this presentation.
No Recommendation
The information in this presentation is not a recommendation to acquire shares in QEM and does not constitute financial advice. Any person who intends to acquire shares must conduct their own investigations, assessment and analysis of QEM and its operations and prospects and must base their investment decision solely on those investigations (including reviewing the Company's announcements available on www.asx.com.au) and that assessment and analysis. Prospective investors should consult their own legal, accounting and financial advisers about an investment in QEM.
Competent Persons and Qualified Estimator Statements
The information in this announcement that relates to exploration results, mineral resource and contingent resource estimates for the Company's Julia Creek Project was first reported by the Company in its IPO prospectus dated 20 August 2018 and supplementary prospectus dated 12 September 2018 (together, the "Prospectus") and the subsequent resource upgrade announcement ("Resource Upgrade") dated 14 October 2019. The Company confirms that it is not aware of any new information or data that materially affects the information included in the Prospectus and Resource Upgrade, and in the case of estimates of Mineral Resources and Contingent Resources, that all material assumptions and technical parameters underpinning the estimates in the Prospectus and Resource Upgrade continue to apply and have not materially changed
QEM Overview
QEM Limited (ASX:QEM) is developing the Julia Creek
Globally significant JORC (2012) Indicated + Inferred Resource 2,760 Mt @ 0.30% V2O5
783MMBL's of oil in the 3C category
Power and hydrogen produced to be directly applied to oil and vanadium production
Vanadium defined as Critical Mineral by Australian and US Governments
Significant demand by government and industry for domestic hydrogen production
Corporate Overview
Led by a team of highly successful and invested mining professionals, with proven track record of mine development
John Foley Chairman
Extensive experience as current Chairman of; Precious Metal Resources Limited (ASX: PMR), Citigold Corporation Limited (ASX: CTO) and Carbon Credit Corporation (C3).
Gavin Loyden Managing Director
Company Founder, identified, acquired and began developing the Julia Creek Project. Responsible for early capitalisation, initial exploration program and initial scoping study for QEM
Daniel Harris Non-Executive Director
Mining executive with 37+ years resources sector experience. Current independent Director at Australian Vanadium (ASX:AVL), former executive at Atlantic (ASX: ATI and Atlas Iron (ASX: AGO). Director of US Vanadium LLC.
David Fitch Non-Executive Director
Experienced in strategic planning, commercial negotiations and operations. Former COO & major shareholder of the Fitch Group and currently a director of BioCentral Laboratories. David is the largest shareholder of QEM.
| ASX Symbol: QEM | |||||
|---|---|---|---|---|---|
| Shares on Issue | 100 million | ||||
| Market Cap (29 July 2021) | $17.5m | ||||
| Share Price (29 July 2021) | $0.175 | ||||
| Cash (as at29July 2021) | $1.058m |
| Major Shareholders | |||||
|---|---|---|---|---|---|
| David Fitch (Non-Executive Director) | 28% | ||||
| Gavin Loyden (Managing Director) | 20% |
Julia Creek Project
Opportunity for a World-Class Vanadium & Oil Shale Mine, with associated Green Hydrogen potential
Key Facts
- Shallow oil-bearing shale, mineralised with vanadium
- Low strip ratio allowing for standard open cut mining method
- Tier-1 Mining Location
- Test work to date shows up to 200% yield achievable for oil extraction. 90% extraction rate for V2O5 through leaching
- Close to all infrastructure and services
- Associated Hydrogen production
- Critical Minerals designation.
Significant Resource
- Total JORC Inferred resource 2,760 Mt
- JORC Indicated area of 220Mt
- Average content V2O5 @ 0.30%
- Oil component- 783MM Barrels in 3C Category
Green Hydrogen Opportunity to Enhance Project
• QEM is also assessing the production and utilisation of green hydrogen at the Julia Creek project to upgrade the oil component of the dual commodity resource to produce quality transport fuels
Julia Creek Project Location
Wholly-owned Exploration Tenements Covering 249.6km2 in the Julia Creek Area, North-
Western Queensland
- Project located within the North-West Minerals Province (NWMP)
- Access to all necessary infrastructure and services, including road and rail direct to the Port of Townsville (600km's) and Mt. Isa to the west (250 km's)
- Within the Eastern Resource Development Corridor recently established by the Federal Government
Project Concept Design
Overview of process design
Other Renewable Sources
Prepared by
Pilot Plant Update
Bench scale pilot plant to enable QEM to optimise oil and vanadium recovery
- Bench scale pilot plant to enable QEM to optimise oil and vanadium recovery, conduct petrology evaluation and gain greater understanding of the Company's internal hydrogen requirements.
- In June 2021, QEM announced that a purchase order for the bench scale pilot plant was signed with specialist manufacturer AMAR Equipment
- The hazard and operability (HAZOP) study on the bench-scale oil and vanadium pilot plant was successfully completed at the Melbourne headquarters of HRL Technology Group Pty Ltd on 9 July 2021, where the pilot plant will be installed and operated
- QEM remains on target to commence operational activity at the benchscale pilot plant during 1H FY22.
Power & Hydrogen Update
- AMEO recently reported that the corridor between Townsville and the NWMP contains Eastern Australia's best co-located wind and solar resources and gave both an 'A' rating. The only region in Australia to achieve this.
- QEM recently completed a two-stage assessment into renewable power generation opportunities to underpin the processing operations on site at the Julia Creek vanadium and oil shale project
- Assessment work completed by DNV Australia ("DNV") and included the mapping and modelling of detailed solar and wind resources, as well as a preliminary solar photovoltaic (solar PV) system design
- DNV's work indicated that both solar and wind could be considered as conceptually suitable sources of power generation at the Julia Creek project (refer to ASX announcement dated 30 July 2021)
- Further solar farm and wind farm optimisation studies recommended to provide enhanced confirmation of the initial positive results and determine the most suitable option
- QEM expects to undertake optimisation studies during 2H FY21, including full on-site monitoring of wind and solar.
Source: https://www.dsdmip.qld.gov.au/\_\_data/assets/pdf\_file/0018/12195/queensland-hydrogen-strategy.pdf Queensland Hydrogen Industry Strategy 2019–2024
Project Management Siecap
Siecap Advisory recently appointed to provide management services to develop the project through pre-feasibility study phases, including environmental studies, project approvals, engineering, grants and exploration activities.
Siecap is an independent specialist project management and advisory firm that provides a full range of integrated capital project development services, with extensive expertise in mining and oil & gas project delivery
Initial project development objectives include:
-
- Pilot scale processing test work to validate an environmentally acceptable, cost-effective technology to produce synthetic oil and vanadium pentoxide from the shale deposit. The proposed technology is expected to have numerous efficiency and environmental benefits over current processing technologies.
-
- Environmental approvals. Multiple regulatory bodies are responsible for approval of mining, petroleum, and renewable energy projects. Initiation of baseline surveys and monitoring of land and water will provide critical information for the environmental approvals process.
-
- Further 4C drilling program currently being planned to expand on resource confidence and to provide greater volume of resource material for pilot plant testing.
ENERGY STORAGE
STEEL MANUFACTURING
AEROSPACE
Applications Of Vanadium
Vanadium Uses
Vanadium - The Versatile Element
Improves Steel Tensile Strength
Most widely used alloy to strengthen steel (HSLA.) Construction, automotive, aerospace, rail, shipping, tools, drilling and more.
Supports Fuel Efficiency
High strength-to-weight ratio makes vanadium a critical component in the automotive industries. Henry Ford first used in Model – T.
Durability & Weather Resistance
Vanadium alloys are naturally durable to extreme temperature and corrosion, making it irreplaceable in the aerospace industry. Suitable for hydrogen storage & pipes (reduces failure due to hydrogen embrittlement).
Chemical & Catalysts
Catalysts, 'Smart Glass', sulphuric acid production, ceramics, dyes, cathodes for lithium batteries.
Renewable Energy Storage
Vanadium Redox Flow Batteries (VRFB) are the preferred solution for large scale energy storage globally. Produces 78% less CO2 than LiB Cradle-to-gate, with recycling and renewables.
Renewable Energy Storage
Building a Renewable Future
| VANADIUMRedox | LITHIUM |
|---|---|
| 100,000+ (20-30 yrs) | 3000-10,000 (5-7 yrs) |
| $\pmb{\mathsf{X}}$ | |
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| X | |
| X(Without Inverters) | |
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| yes | no |
Vanadium Redox Flow Battery
Number of Cycles Low Self-discharge Low Environmental Footprint Highly Expandable Generates Low Levels of Heat Charges & Discharges Simultaneously Can Release Energy Instantaneously Suitable for Connection to Power Grid Small Footprint CAN BE COMPLETELY RECYCLED
Source: https://www.energyandcapital.com/articles/the-best-thing-since-lithium/1531 Mining Journal June 2018
113 VRFB Installs Worldwide
39,664 kw of power, 209,800 kwh of energy
| COUNTRY | VRFBs | kW | kWh |
|---|---|---|---|
| Australia | 7 | 945 | 4629.90 |
| Barbuda | 1 | 3000 | 12000.00 |
| Botswana | 1 | 112 | 560.00 |
| Canada | 3 | 2500 | 10000.00 |
| China | 17 | 15825 | 48005.00 |
| Czech Rep. | 3 | 47 | 209.90 |
| Denmark | 3 | 40 | 260.00 |
| Germany | 15 | 1530 | 86190.00 |
| India | 4 | 155 | 740.15 |
| Indonesia | 2 | 400 | 500.00 |
| Italy | 5 | 631 | 2610.00 |
| Japan | 5 | 2330 | 7481.00 |
| Netherlands | 1 | 10 | 80.00 |
| Portugal | 5 | 5 | 60.00 |
| Singapore | 1 | 250 | 2000.00 |
| Slovenia | 1 | 10 | 45.00 |
| South Africa | 2 | 745 | 2950.00 |
| South Korea | 5 | 1250 | 4900.00 |
| Spain | 4 | 220 | 800.00 |
| Sweden | 1 | 800 | 1800.00 |
| Switzerland | 2 | 210 | 460.00 |
| UK | 5 | 805 | 5180.00 |
| USA | 17 | 7418 | 33173.70 |
| Austria | 1 | 14 | 84.00 |
| Kenya | 1 | 140 | 84.00 |
| Slovakia | 2 | 107 | 640.00 |
| UAE | 1 | 10 | 40.00 |
13
Vanadium Market
Set for growth
- Global Production 2020 ~ 102,000 MTV per year
- Expected to grow by 28.31 thousand tons during 2020-2024. (Source: Technavio Global Vanadium Market Report 2020-2024)
- Chinese market tightened due to increased steel production. 1Bt in 2020.
- Vanadium was added to the 'US & Australian Strategic Metals List' in 2018
- Only 3 primary producers in the world today, outside of China and Russia. 2 in South Africa and 1 in Brazil
- Australia holds approximately 20% of undeveloped global reserves
V2O5 Vanadium Pentoxide Flake 98% Price USD / lb
14 Production Graph Source: Vanitec http://vanitec.org/vanadium/production-consumption
Fuel Resilience
COVID-19 demonstrates supply chain risks
- Australia is an island nation that depends heavily on imported fuel
- Our current stockpile is critically low
- 30 days of petrol for automobiles
- 20 days of diesel
- 20 days of aviation fuel (Australian Petroleum Statistics 2020)
- Australia's obligation as a member of the International Energy Agency (IEA) to hold at least 90 days of supply. Not held since 2012
- Greatly diminished refining capacity 4 remain. All on "life support"
- Dependency on fuel imports for transport has grown from around 60% in 2000 to over 93% today adding around $30B to Australia's trade deficit in 2020
- COVID-19 has further exposed Australia's lack of resilience in this area
- Government scrambling for solutions. Reserves in Texas = 3 Days supply. 8000kms away
- QEM considers this an opportunity.
Supportive Policy Environment
Corridors Julia Creek located in key corridor
Development of Northern Australia and Resource Corridors Government Priority
- Critical Minerals Facilitation Office
- Eastern Resource Corridor
- Queensland Hydrogen Industry Strategy
- Queensland Major Projects Facilitation
- Queensland Department of State Development
- $1.5 Billion Copper String 2.0 project
Strong Government support for developing Critical Minerals- vanadium
- Vanadium on the 'Critical Minerals List' for priority development and investment
- Queensland State and Federal Governments are collaborating with the Townsville City Council to support vanadium producers with potential funding and facilities for a multi-user, commercial demonstration plant to be built in Townsville.
Greater Fuel Resilience Needed
- Domestic sources of fuel are few, and local stocks are very low
- Julia Creek has the potential to contribute to local fuel supply needs, including H2 for Agri, Mining & Defence
Government Funding Bodies
Government Backing Policy Aims with Funding Support
- Northern Australian Infrastructure Facility (NAIF) $2.47B for infrastructure development in Northern Australia
- Resources Technology and Critical Minerals Processing National Manufacturing Priority Roadmap $1.5B in funding for critical minerals processing development
- The Clean Energy Innovation Fund (CEFC) $200m million in early-stage clean technology companies
- Queensland Hydrogen Industry Strategy $19m in support funding for hydrogen projects in the state, particularly in regional areas, with additional $5m announced recently to support feasibility studies.
- Resources Community Infrastructure Fund $100m established by QLD Government
- Exploring for the Future $10m expansion of the Government's program-focussed on new economy minerals such as vanadium
- Queensland's Strategic Blueprint for North West Minerals Province (NWMP) $39m over four years.
Development Strategy
Moving towards PFS in 2021
Right Project at The Right Time
Vanadium QEM aims to become a leading supplier of high-quality vanadium pentoxide
Dual Commodity Deposit
Julia Creek in North Queensland allows production of both Vanadium (a Critical Mineral) and high-quality transportation fuels including Hydrogen
Transport Fuels + Hydrogen
QEM aims to provide innovative and environmentally friendly solutions that are important to our energy future
Contact
Gavin Loyden
Managing Director [email protected] +61 7 5646 9553 www.qldem.com.au
Shane Murphy
Investor Relations [email protected] +61 420 945 291
Appendix – A
Julia Creek Resource
Julia Creek Resource Overview
| Total | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| ResourceClass | Strat.Unit | Mass(Mt) | AverageThickness(m) | InsituDensity(gm/cc) | V2O5(wt%) | Cu(ppm) | Mo(ppm) | Ni(ppm) | Zn(ppm) | Al(ppm) |
| Indicated | CQLA | 73 | 3.16 | 2.27 | 0.25 | 155 | 138 | 123 | 780 | 4752 |
| CQLB | 67 | 2.97 | 2.24 | 0.28 | 182 | 168 | 142 | 890 | 5706 | |
| OSU | 40 | 1.94 | 2.08 | 0.33 | 223 | 153 | 191 | 1087 | 55317 | |
| OSL | 38 | 1.87 | 2.11 | 0.32 | 199 | 149 | 184 | 1015 | 55009 | |
| Inferred | CQLA | 687 | 2.57 | 2.28 | 0.23 | 154 | 139 | 121 | 819 | 2854 |
| CQLB | 874 | 3.33 | 2.15 | 0.38 | 220 | 221 | 201 | 1184 | 5323 | |
| OSU | 504 | 2.01 | 2.11 | 0.30 | 232 | 147 | 188 | 1148 | 62477 | |
| OSL | 481 | 1.98 | 2.13 | 0.29 | 212 | 134 | 171 | 1058 | 60316 | |
| Total | 2,760 | 2.18 | 0.30 | 201 | 166 | 170 | 1043 | 26100 |
Table 1: Summary of JORC Mineral Resource Estimate
Note:
-
The estimate uses a minimum cutoff of 0.2% V2O5 for the oil shale units, and minimum cut-off of 0.15% V2O5 for the Coquina units.
-
The total resource tonnage reported is rounded to reflect the relative uncertainty in the estimate categories and component horizons may not sum correctly.
Table 2: Summary of SPE-PRMS Oil Resource
| Total | |||||||
|---|---|---|---|---|---|---|---|
| Strat.Unit | Mass (Mt) | Average Thickness(m) | Oil Yield(L/tonne) | MMBarrels(insitu-PIIP) | MMBarrels 3C | ||
| CQL | 1,701 | 5.93 | 44 | 446 | 401 | ||
| OSU | 544 | 2.01 | 72 | 231 | 208 | ||
| OSL | 518 | 1.97 | 63 | 193 | 174 | ||
| TOTAL | 2,760 | 53 | 870 | 783 |
Note:
- The total resource tonnage reported is rounded to reflect the relative uncertainty in the estimate and component horizons may not sum correctly.
Julia Creek Oil Yield
Cross Section the Julia Creek Oil Deposit.
Source: Measured Group The estimation methodology used is deterministic. The estimation is based on grids constructed for unit structure, thickness and oil grade parameters
Vanadium Market
Construction
Stronger, safer buildings
- Vanadium plays an essential role as an alloy of steel to provide increased tensile strength, durability and weather resistance.
- Announced in February 2018, China revised steel rebar standards to limit the use of inferior strength steels in its ever-growing construction industry.
- Due to these revised standards, global demand for vanadium is set to increase, with this development expected to add between 10,000t to 15,000t of vanadium demand, and signs of an increase in demand is already evident in the market today.
- Global crude steel production reached 1,869.9 million tonnes (Mt) for the year 2019,up by 3.4% compared to 2018. (Source: https://www.worldsteel.org/media-centre/press[releases/2020/Global-crude-steel-output-increases-by-3.4--in-2019.html](https://www.worldsteel.org/media-centre/press-releases/2020/Global-crude-steel-output-increases-by-3.4--in-2019.html)
Australian Steel Industry
- ~5.3Mt of steel are produced in Australia annually. Australian Bureau of Statistics 2017-18.
- ~100,000 people employed in the Australian steel industry
- Australia exports ~800,000 tonnes a year.
- Australian steel industry generates $29 billion in annual revenue and is an essential part of the Australian economy.
- The Government of India is aiming to scale up steel production in the country to 300 MT by 2025 from about 90 MT in 2015-16.
Aerospace & Automotive
Vanadium and the future of transport
- Aerospace Increased aircraft are required to service larger addressable air-travel market
- Both Boeing & Airbus both forecast annual global air traffic growth between 2016 and 2035 of nearly 5%. A titanium alloy containing 4% vanadium and 6% aluminium (Ti6Al4V) has been used extensively for blades, discs and casings of the compressors in many designs of the aero-engine gas turbine
- The development of new titanium alloys continues with the Vanadium component ranging from 8, 10 to 15%, which results in even higher strengths and the potential to make important contributions to weight reduction
Source:http://www.nextsourcematerials.com/vanadium/about-vanadium/ Mining Journal June 2018
- Automotive Today, 45% of vanadium goes into cars, and it is estimated that 85% will be used in manufacturing auto vehicles by 2025. This will reduce the weight of cars, thereby increasing their fuel efficiency and be able to meet fuel economy standards. (Source: Vanadium Corp)
- Engine components such as crankshafts and connecting rods are highly stressed and must withstand many cycles. Vanadium micro-alloyed forging steels are widely used for these parts, as well as other applications in the chassis, drivetrain, suspension and valve springs. (source: Vanitec.org)
