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RENASCOR RESOURCES LIMITED — AGM Information 2017
Nov 19, 2017
65723_rns_2017-11-19_c345bad2-7982-4b32-bf72-fa2f374dbd9b.pdf
AGM Information
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Renascor Resources Limited ASX code: RNU
Annual General Meeting Presentation
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Adelaide 20 November 2017
Important notices
Forward Looking Statements
This Presentation may include statements that could be deemed “forward-looking” statements. Although Renascor Resources Limited (the “Company”) believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those expected in the forward-looking statements or may not take place at all.
No Offer to Sell or Invitation to Buy
This Presentation is not, and should not be considered to, constitute any offer to sell, or solicitation of an offer to buy, any securities in the Company, and no part of this Presentation forms the basis of any contract or commitment whatsoever with any person. The Company does not accept any liability to any person in relation to the distribution or possession of this Presentation from or in any jurisdiction.
Disclaimer
The Company has exercised care in preparing and presenting this Presentation, including in obtaining information relating to project held by other entities, which the Company obtained from company reports and other publicly available sources. T o the maximum extent permitted by law, the Company and its representatives make no representation, warranty or undertaking, express or implied, as to the adequacy, accuracy, completeness or reasonableness of this Presentation and the information contained herein; accept no responsibility or liability as to the adequacy, accuracy, completeness or reasonableness of this Presentation; and accept no responsibility for any errors or omissions from this Presentation.
Competent Persons Statement
The results reported herein, insofar as they relate to exploration activities and exploration results, are based on information provided to and reviewed by Mr G.W. McConachy (Fellow of the Australasian Institute of Mining and Metallurgy) who is a director of the Company. Mr McConachy has sufficient experience relevant to the style of mineralisation and type of deposits being considered to qualify as a Competent Person as defined by the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code, 2012 Edition). Mr McConachy consents to the inclusion in the report of the matters based on the reviewed information in the form and context in which it appears.
The results reported herein, insofar as they relate to metallurgical test work results, are based on information provided to and reviewed by Mr Simon Hall, a Competent Person who is a Member of the Australasian Institute of Mining and Metallurgy and a consultant to the Company. Mr Hall has sufficient experience relevant to the mineralogy and type of deposit under consideration and the typical beneficiation thereof. Mr Hall consents to the inclusion in the report of the matters based on the reviewed information in the form and context in which it appears.
Bibliography
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Renascor ASX announcement dated 27 October 2017, “Development Options for Siviour Graphite Project”
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Renascor ASX announcement dated 5 September 2017, “Siviour Graphite Project Update”
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Renascor ASX announcement dated 23 May 2017, “Siviour Graphite Scoping Study Demonstrates Robust Economics”
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Renascor ASX announcement dated 17 March 2017, “Siviour Now Among Ten Largest Graphite Deposits in the World”
Renascor confirms that it is not aware of any new information or data that materially affects the information included in the original market announcements and that all material assumptions and technical parameters underpinning the estimates in the relevant market announcement continue to apply and have not materially changed. Renascor 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.
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Renascor Resources
What sets us apart?
- Siviour is unique as a Tier 1 graphite development in Australia
Robust economics
Lowest quartile OPEX: AU$450 / US$333 per tonne NPV10 (after-tax): AU$551m / US$407m
Staged development option: start-up capex of AU$15.9m / US$12.4m**
High-quality graphite product
Favourable flake size distribution and high purities for - lithium ion battery and other high growth markets (advanced test work underway)
Large-scale: long-life, low-cost
Among largest reported graphite deposits in the world, within shallow, flat-lying mineralised body
Australia: low sovereign risk Siviour offers globally competitive graphite supply within stable political environment
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Based on Siviour Scoping Study. See RNU ASX announcement dated 23 May 2017
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** Based on Siviour Staged Development Study. See RNU ASX announcement dated 27 Oct 2017
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Renascor Resources
Why graphite in Australia?
China dominates current supply, but market is restricted and unstable
Increased domestic demand
Graphite is becoming strategically important mineral due in large part to rising demand in lithium ion batteries
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Supply limitations
Issues of product consistency and lack of medium and large flake
Environmental and export restrictions
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New safety and environmental regulations and export restrictions have further reduced supply
Renascor Resources
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Why graphite in Australia?
New potential supply has been dominated by large developments in East Africa, where sovereign risk issues must be overcome
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Renascor Resources
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Why graphite in Australia?
Renascor offers secure supply from Australia
Low sovereign risk jurisdiction
Secure, established regulatory framework increasingly important in graphite supply chain
Established infrastructure
Lower capital and operating costs and increased certainty of project delivery
Supportive government
Established, mine-friendly jurisdiction that has encouraged new mine developments
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Renascor Resources
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Siviour – South Australia
Located centrally in an historical graphite corridor
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Renascor Resources
Siviour – South Australia
Optimal location for development and production
Favourable jurisdiction South Australia Supportive government
Port, Road, Power, Water Established ports Highway - 10km Power - on main grid Water for Stage-1 development
Established workforce
Whyalla (23,000), Port Lincoln (15,000), Port Augusta (13,000) Arno Bay, Cleve, Cowell, Tumby Bay
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Renascor Resources
Globally competitive project economics
Scoping study results …
| Annual graphite concentrate production(tonnesper annum) |
123,000 | 123,000 |
|---|---|---|
| Process plant throughput (tonnes per annum) |
1,650,000 | |
| LOM average feed grade (TGC) | 8.1% | |
| NPV10(after tax) | AU$551m | US$408m |
| IRR (after tax) | 59% | |
| Cash cost of production (per tonne of concentrate) |
AU$450 | US$333 |
| Capital cost (pre-production) | AU$144m | US$107m |
| Sustaining capital | AU$28m | US$21m |
| Basket sales price | AU$1,420 | US$1,051 |
| Payback (after-tax) from first production |
1.7 years |
High NPV
Low cost of production
Fast payback
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Globally competitive project economics
. . . compare favourably to other graphite developments globally*
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- Renascor data based on Siviour Scoping Study. See RNU ASX announcement dated 23 May 2017 Source: Company reports on economic studies of flake graphite projects as of October 2017
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Project economics -- OPEX
Siviour’s flat laying orientation underpins a low cost of production …
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Project economics -- OPEX Siviour’s flat laying orientation underpins a low cost of production* …
| Area | AU$/year | AU$/ tonne of concentrate |
US$/year | US$/ tonne of concentrate |
|---|---|---|---|---|
| Mining and technical services | 14.4m | 117 | 10.7m | 87 |
| Processing and power | 27.9m | 224 | 20.6m | 166 |
| General and administration | 2.4m | 19 | 1.8m | 14 |
| Product logistics FOB | 11.1m | 90 | 8.2m | 67 |
| Total | AU$55.8 | AU$450 | US$41.2m | US$333 |
- Data based on Siviour Scoping Study. See RNU ASX announcement dated 23 May 2017
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Project economics -- OPEX
. . . that is among the lowest of global graphite developments*
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- Renascor data based on Siviour Scoping Study. See RNU ASX announcement dated 23 May 2017 Note: Cash cost of production (FOB) per tonne of product Source: Company reports on economic studies of flake graphite projects as of October 2017
Renascor Resources
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Low start-up CAPEX option
Staged-development* offers low initial CAPEX pathway to production
Leverages off of Competitive smallinfrastructure scale operation advantages of coastal Initial mining in Australian location high-grade zone at startup production rate of Stage-1: 100,000tpa plant ~11,000 tonnes of using existing potable water graphite concentrates supply per year Start-up CAPEX: Start-up OPEX: US$12.4m/AU$15.9m US$459/AU$589 per tonne
Development of customer base Establishment of customer base optimal for Siviour basket of products in stage-one… …to support capital requirement to fund larger stage-2 operation
- Data based on Siviour Staged Development Study. See Renascor ASX announcement dated 27 October 2017
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Low start-up CAPEX option
Staged-development offers low CAPEX pathway to production
| Parameter | Two-stage option | Two-stage option | Two-stage option | Two-stage option | Siviour Scoping Study |
Siviour Scoping Study |
|---|---|---|---|---|---|---|
| Stage-one (years 1 to 3) |
Stage-two (year 4 to 23) |
|||||
| Currency | AU$ | US$ | AU$ | US$ | AU$ | US$ |
| Annualproduction | 10,800t | 123,000t | 123,000t | |||
| Plant throughput | 100,000tpa | 1,650,000tpa | 1,650,000tpa | |||
| Average feedgrade | 11.1% TGC | 8.1% TGC | 8.1% TGC | |||
| Cash cost of production(per tonne of concentrate) |
$589 | $459 | $452 | $353 | $450 | $333 |
| Basket price per tonne of concentrate | $1,222 | $953 | $1,347 | $1,051 | $1,420 | $1,051 |
| Life of mine | 23 years | 20 years | ||||
| Development capital | $15.9m | $12.4m | $138m | $108m | $144m | $107m |
| Payback period of development capital (from first production) (years) |
3.1 | 1.8 | 1.7 | |||
| NPV10 (after tax) (life of mine) | AU$370m or US$288m | $551m | $408m | |||
| IRR (after tax) (life of mine) | 46% | 59% |
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1 Stage-one and stage-two adopt an exchange rate of AU$1.00 = US$0.78. The Siviour Scoping Study adopted a rate of AU$1.00 = US$0.74.
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2 NPV10 for stage-two reflects lower net present value based on additional three years of discounting due to deferred start-up. Stage-two NPV10 would be approximately equal to Siviour Scoping Study NPV10 if there were no deferral.
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The Siviour graphite deposit
Siviour has rapidly transitioned from discovery to development
Acquisition: Renascor has an option to acquire 100% of company holding Siviour at definitive feasibility stage by issuing 22% of shares in listed vehicle Current upgraded JORC Resource (March 2017) : 80.6mT @ 7.9% TGC for 6.4mT of contained graphite
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Renascor Resources
The Siviour graphite deposit
The Siviour Mineral Resource is already large and remains open alongstrike at shallow depths
| Category | Mineralisation (Mt) |
TGC | Contained graphite (Mt) |
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| Indicated* | 51.8 | 8.1% | 4.2 | |||||||||||||||
| Inferred* | 21.8 | 7.6% | 2.2 | |||||||||||||||
| Total* | 80.6 | 7.9% | 6.4 | |||||||||||||||
| Renascor | Resources | 17 |
Siviour – large scale graphite deposit
Siviour is the largest graphite deposit in Australia …
Source: Company reports on economic studies of flake graphite projects as of October 2017
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Renascor Resources
Siviour – large scale graphite deposit
… and among the largest reported graphite deposits in the world …
Source: Company reports as of October 2017
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Renascor Resources
Siviour – large scale graphite deposit
… and offers ample scope to expand
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Renascor Resources
Siviour – metallurgy
Initial metallurgical testing has established Siviour as unique in Australia …
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| Flake category |
Particle size | Particle size | Distribution |
|---|---|---|---|
| Microns | Mesh | ||
| Jumbo | >300 | +48 | 8% |
| Large | 180 to 300 |
-48 to +80 | 25% |
| Medium | 150 to 180 |
-80 to +100 |
15% |
| Small | 75 to 150 | -100 to +200 |
39% |
| Fine | <75 | -200 | 13% |
Source: Company reports as of October 2017
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Siviour – metallurgy
… offering potential to produce concentrates competitive with largest graphite resources in the world …
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Source: Company reports as of October 2017
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Siviour – metallurgy
… with conventional (non-chemical, non-thermal) flowsheet
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Siviour – downstream processing potential
Siviour is well-positioned to produce premium-priced, valued-added graphite products
Ultra high purity
Purity levels in excess of 99% TGC have been achieved through one additional re-grind and flotation circuit
Located proximate to modern industrial zones
Siviour’s South Australian location offers easy access to established industrial centres for advanced processing
Downstream testing underway
Valued-added test work to include spherical graphite testwork for lithium-ion battery anode suitability and development of expandable graphite products
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Renascor market information
| ASX code | RNU |
|---|---|
| Shares currently on issue | 606m |
| Conditional shares* | 59m |
| Options ($0.05, expiring Dec 2019) | 15m |
| Conditional options*($0.03, expiring Oct 2019) | 115m |
| Cash(30 Sep 17) | ~$2.8m |
| Additional placement proceeds | ~$1.0m |
| Share price(17 Nov 17) | $0.030 |
| 12 month range | $0.015-$0.040 |
| Market cap(17 Nov 17) | $18m |
| Top 20(17 Nov 17) | 38% |
| Board shareholding(9 Nov 17) | 21% |
Board of Directors Richard (Dick) Keevers (Chairman) David Christensen (MD) Stephen Bizzell Geoff McConachy Chris Anderson
*Renascor is seeking shareholder approval at today for the issuance of 58,824,140 shares and 114,761,100 options pursuant to a capital raising announced on 20 September 2017. If the shareholder approval is granted, Renascor expects to receive additional placement proceeds of approximately $1m
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Forward plan and news flow
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Renascor Resources
Conclusions
Siviour is a Tier-1 graphite project Globally competitive project economics Large-scale, low cost Low CAPEX start-up option High quality graphite concentrates Secure supply from Australia
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For further information: David Christensen Mobile: +61 429 643 770 [email protected] www.renascor.com.au
ASX: RNU
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Renascor Resources
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