SCIDEV LTD — Investor Presentation 2020

May 11, 2020

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Investor Presentation

Goldman Sachs Conference May 2020

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Next-generation technology for solids-liquid separation in mining, construction, water and wastewater

SciDev brings together world-class technology, chemistry, management and manufacturing capabilities to solve pressing operational and environmental issues for the Mining, Construction, Water treatment and Oil & Gas markets.

SCIDEV Investor Presentation – May 2020

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SciDev snapshot

	Corporate overview
	ASX code	SDV
	Market cap (at $0.80 per share)	$113m
	Shares on issue	141m
	Cash at bank	$3.9m1
	Working capital facility	$8.8m2
	Major shareholders2	% held
	Nuoer Group	7%
	Board and Management	9%
	Institutional	16%
	Retail	68%

Leading Chinese chemical company. SciDev has exclusive marketing rights in Oceania and support globally for key target end users and industries

SciDev engages with its customers to deliver bespoke solutions to their solid-liquid separation requirements.

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Offerings

Professional Engineering Bespoke Services Chemistry

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Industries Mining Oil & Gas Construction Water treatment

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3Q FY20 3Q FY20 Cash 3Q FY20 Inventory
Metrics Revenue receipts Net cash from at end 3Q FY20
A$7.3m A$5.75m Operations A$3m
A$0.72m
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1) 31 March 2020 2) Drawn $1.2m at 31 March 2020

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Financial highlights

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Financial highlights

• First cashflow positive quarter in March 2020 delivering A$0.7m

• Record quarterly sales to customers of A$7.3m

• A$4.8m of sales for the month of March

• First quarter of contribution from ProSol Australia and Iluka contracts

• Cash at bank of A$3.9m

SciDev has a robust balance sheet, growing revenues, an ongoing focus business development & cost control.

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3Q FY20 3Q FY20 Net cash from Cash at bank
Revenue Operations at end 3Q FY20
A$7.3m A$0.72m A$3.9m
+329% +613%
$7.3 $5.7
$A Sales (m) $A Cash
Receipts (m)
$4.4
$2.2
+240%
+33% $1.5
$1.7
$1.1 $0.8 $0.8
$0.8 $0.6 $0.7
$0.5 $0.5
1Q 2Q 3Q 4Q 1Q 2Q 3Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q
FY19 FY19 FY19 FY19 FY20 FY20 FY20 FY19 FY19 FY19 FY19 FY20 FY20 FY20
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SciDev’s business

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Professional services

SciDev develops bespoke chemistry to meet the requirements of our customers. We do not sell off-the shelf-product.

SciDev engages with its customers to deliver bespoke solutions to their solid-liquid separation requirements.

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Business Professional services Trial Product & Commercial
development targeting development & tender purchase order services review contract
3 3-6 6-12 12-18
months months months months
SciDev’s team of highly skilled SciDev identifies the root SciDev’s solutions and Our clients review the Execution and optimisation of
engineers engage with our causes of our client's chemistry are trialled onsite operating parameters of the our solutions & chemistries
customer to understand their problems. with the support of our highly trial and determine the future for steady state operations.
requirements & specific SciDev develops bespoke trained staff utilisation of our offering SciDev provide ongoing
chemical challenges chemistry to meet the support to our clients to
requirements of our continually improve the
customers efficiency of the process
technology
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SciDev’s team of highly skilled engineers engage with our customer to understand their requirements & specific chemical challenges

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SciDev: technology

• SciDev’s bespoke solutions and professional services deliver sustainable coagulant and flocculant dosage optimisation, reducing the associated costs and the elimination of poor performance

• SciDev generates revenue from professional services, its operating systems, equipment, and chemical sales

• Our technology can be utilised in a range of industries including mining, water treatment, construction and the oil & gas sectors

SciDev provides world-class coordinated technology and chemical solutions for solids-liquid separation.

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Mining Oil & Gas Water Construction
Professional
Our workforce of highly
Services
skilled engineers and chemists Process Studies
engage with our customers to Equipment Auditing
build bespoke solutions to Operating Training
their solid-liquid processing
Piloting Programs Flow Loop Testing Piloting Programs
requirements
OptiFlox® online
Engineering
We combine inhouse analyser
engineering knowhow with our Flocculant Plant Injection Flocculant Plant
IP equipment and process Equipment Equipment Equipment
control solutions to support
TrueMud® Mixer
the applications of our
chemistries
CrossFlow Filtration
Flocculants Friction Reduction Flocculants
Chemistry
Enhanced Oil
Coagulants Coagulants
Our range of proprietary Recovery
MaxiFlox ®, xPAM, DrySLIK® Antiscalents Completion Fluids Antiscalents
and WetSLIK polymers deliver
Defoamers Drilling Fluids Defoamers
highly effective solutions to a
range of industries Rheology Modifiers
Dust Suppressants
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SCIDEV Investor Presentation - May 2020 8

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Business overview

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SDV’s strategic opportunity

• The global opportunity for SciDev’s products is significant

• The chemical industry has experienced a period of consolidation which has created large industry competitors that are focussed on centralised manufacturing with reduced service levels

• Our world-class technical staff and our bespoke solutions will allow SciDev to increase its penetration into this market

SciDev technologies can be applied as a solution to a range of solid-liquid problems across multiple industries on a global basis.

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Global markets Industry drivers
Oil & Gas market in USA $2bn Clean water requirements
Global Mineral processing $2bn Metal demand
Global Municipal water treatment $5bn Environmental regulations
Global Industrial water treatment $1bn Sustainability
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Competitor insights

Large industry competitors have consolidated and are now focused on centralised manufacturing with reduced service levels.

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SCIDEV Investor Presentation - May 2020 10

Business development activities

SciDev has delivered several significant new business opportunities across a range of industries.

Strategic acquisition of US$1.4m product order PRC Based JV with Nouer Highland Fluid Technology for from Phoenix Process Group providing platform US$6m, providing access to Equipment Company for for worldwide growth onshore USA oil and gas use in tailings dewatering, including state owned market slurry & sludge separation Chinese enterprises Jan 20 Feb 20 Apr 20 Jan 20 Mar 20

Strategic alliance with A$4.6m capital raising to Nuoer Group of China – the world’s 2[nd] largest provide working capital for growing inventory producer of waterrequirements based polymer products

US$0.5m product order from Phoenix Process Equipment Company for use in tailings dewatering, slurry & sludge separation Nov 20

Sep 19

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Feb 19
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Aug 19

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Mar 20
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Oct 19
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Awarded a 3 year contract Dec 19 Acquired ProSol Australia Pty with Iluka Resources of Ltd for AUD$1.9m, Record half yearly revenue MaxiFlox® chemistry to the strengthening SDV’s position 382% increase on HY19 Jacinth–Ambrosia mine. in the Hunter Valley Coal AUD$6.1m, Net loss reduced AUD$8-12m contract over fields by 69% on HY19 AUD-0.2m term

Trial Order for Maxiflox® chemistry from Las Bambas copper mine in Peru. First order in large South American copper industry

AUD $1m trial product order from Syncrude, one Mining of Canada’s largest oil sands companies. Product Oil & Gas trial expected to last 2 weeks Construction Strategic Financial

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Highland acquisition

• Initial US$5m acquisition

• c.US$7.8m of revenue delivered in CY19

SciDev’s strategic acquisition of Highland Fluid Technologies provides access to the sizeable USA onshore Oil & Gas market.

Immediate access

The US onshore oil and gas market represents a potential US$2bn market in production & speciality chemicals

Margin uplift

• Acquisition funded via the issue of 11.35m shares to the vendors at a price of $0.60/sh

• 50% of shares have nil escrow, 25% with 6-month escrow and 25% 12-month escrow

• US$1m additional cash payment if US$20m of revenue achieved in CY2020 at a specified margin

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Margins are expected to improve through SciDev’s ability to introduce a low cost chemical supply chain via their own facilities and strategic relationship with Nuoer Group who are a substantial SciDev shareholder

Accelerated growth

Surety of quality supply from Nuoer and SciDev facilities will allow Highland to target larger value customers accelerating growth

Skilled staff

Highland staff will remain with SciDev providing valuable knowledge especially in the water recycling component of the oil and gas sector

USA base

The Highland facilities in Houston will provide a base for SciDev in the USA to target opportunities in other sectors throughout the Americas

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Highland opportunity

• Strategic acquisition of Highland Fluid Technology provides access to the fluid recycling and water reuse markets in the US$2.5bn onshore USA oil & gas industry

• SciDev’s chemistries and services have been tested by Highland and its customers since mid year and have passed commercial trials – significantly de-risking the project

• Acquisition will provide a USA base for further North American business development opportunities

• Highland Fluid Technology management have a global network providing a segue into other large oil & gas markets

SciDev’s strategic acquisition of Highland Fluid Technologies provides access to the sizeable USA onshore Oil & Gas market.

USA onshore oil & gas market

Industry drivers

• 4 barrels of wastewater are generated by every 1 barrel of oil produced

Clean water requirements

Environmental regulations

Water scarcity and increasing regulations on wastewater quality driving a need to produce less waste and reuse more water

Sustainability

The amount of water used in the US shale industry has risen 770% since 2011

Specialty & production chemical market in US oil and Gas industry is estimated at US$2bn

Customer target market

SciDev, via Highland will target, drillers, producers and service companies to provide chemistry, equipment and professional services to help in the re-use and recycling of water and reduce waste. Key customer targets include; Halliburton, Innospec & US Well Services

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Syncrude opportunity

• The trial order received from Syncrude (ref ASX 3 March 2020) is a significant new business development opportunity

• Purchase order is for A$1m, representing approximately 2 weeks of chemistry requirements

• First step into an attractive & sizeable market

SciDev’s trial order from Syncrude represents a significant new business development opportunity.

Oil sands market

Regulatory drivers

1.3 trillion litres of tailing volumes in Canada

Alberta Energy Regulator tightening regulation on the amount of fluids allowed to pass into tailings dams

Volumes up +70% in past 10 years

Estimated cost of rehabilitation C$260bn

Directive 85 sets out increased regulation for managing tailings in oil sand projects

Fluid tailings must be ready to reclaim within 10 years of closing an oil sands mine

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Syncrude

One of the largest operators in the Canadian oil sands industry

2.8 billion barrels of cumulative oil production

Over 85% of water used in bitumen extraction process is recycled from tailings settling basins

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Nuoer Strategic partnership

Strategic partnership with Nuoer group delivers supply chain security & leverage.

SciDev strengthened the relationship with Nuoer Group by entering a new joint venture (the new JV) to accelerate global growth initiatives (signed April 2020)

• Nuoer Group is the world’s second largest producer of watersoluble polymers with a manufacturing capacity exceeding 300kT per annum

• Nuoer has a world class facility in Donying, China which operates under ISO 9001 and ISO 14001 quality and environmental systems

• Our Nuoer relationship provides the ability to offer a competitive chemistry supply chain to complement our professional services solutions

The new JV strengthens the relationship between the two parties and expands upon the original binding Heads of Agreement (Feb 2019)

The new JV provides a platform to accelerate global growth initiatives with specific focus on targeting Chinese State Owned Enterprises (SOE’s) operating around the globe. These entities would normally be off-limits to western companies

Under the terms of the new JV, the parties will bring core products and skill sets at agreed costs and attractive terms;

• Nuoer: the supply of chemistry backed by their existing production facilities and logistics network

• SciDev: Expert technical advice, marketing & sales, specialist staff and technology & relationship base

Stand-alone joint venture, which will not impact SDV’s own business development opportunities

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Outlook
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The outlook

SciDev has a strong growth pipeline and is well positioned to deliver sustainable growth in solid-liquid separation.

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Drive our revenue line through the execution of a well-structured business development pipeline in the mineral processing, oil & gas, construction and wastewater sectors

Build upon the Company’s momentum in the Australian coal industry, transitioning across application, mineral types and key industry players with our OptiFlox® technology

Further develop the opportunities presented by Highland in the US oil & gas sector

Extend our technology into the precious metal and base metal sectors throughout Australia and Asia, while looking for other opportunities in currently unrealised sections of the mineral processing value chain

Renew our effort in the Australian water and wastewater sector with strategic partnerships and licensing opportunities with global operators and key end users Continue to strengthen and leverage our relationship with Nuoer through joint marketing and R&D efforts in key market areas

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Appendix
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SciDev: people

SciDev’s products are backed up with expert support from our technical personnel, with a combined experience of several decades in the field. We can determine the best chemistry for a particular application and assist customers in optimising dosing and performance on site.

SCIDEV Board

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Trevor Jones

Chairman

Lewis Utting

CEO & MD

Simone Watt

Non-executive Director

Jon Gourlay

Non-executive Director

Heath Roberts Company Secretary

Executive Management Team

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Dale Barron

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COO
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John Fehon CFO

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Kevin Smith Jamiel Muhor Jeffrey Zhiang President HFT Business Marketing & Strategy Development Director

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Ben Gill Technical Director

SCIDEV Investor Presentation - May 2020 19

Solids-liquids separation

• Many chemical processes require the separation of solids out of their liquid state

• Solid liquid separation can occur via many methods such as;

• Filtration

• Precipitation

• Centrifuging

• Chemical additives such as flocculants and coagulants

• SciDev technology focusses on the addition of flocculants and coagulants into liquids to drive the solid separation

SciDev focuses on solids-liquid separation which is an important component of chemical engineering & manufacturing.

Coagulation

Flocculation

	What Where Why	Brings together small often coagulated particles, 1/5th the size of a human hair using polymers which bridge between particles and bind them together Promotes the aggregation of particles 1/50th the size of a human hair by enhancing the attractive forces between them
		Flocculation is critical in wastewater, sewage, mineral processing, oil & gas, papermaking, water treatment, and several other industries Coagulation is used in mineral processing, oil & gas, papermaking, water treatment, and several industries
		Flocculation allows for better environmental outcomes through increased water recovery and is also used in mineral processing, papermaking and oil & gas for production Coagulation is critical for the control of fine particles or pollutants. In wastewater and drinking water, coagulation allows the fine solids to be removed to make the water fit for consumption or discharge

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Disclaimer

Important Information

This presentation has been prepared by SciDev Ltd (SciDev) based on information available to it as at the date of this presentation. The information is provided in summary form and does not contain all information necessary to make an investment decision. Hence, no representation is made as to the accuracy, completeness or reliability of the information.

In addition, neither SciDev nor any of its subsidiaries, directors, employees, shareholders nor any other person shall have liability whatsoever to any person for any loss, including without limitation from any fault or negligence arising from this presentation or any information supplied in connection with it. This presentation may contain forward-looking statements and projections. These reflect SciDev’s current expectations, based on what it believes to be reasonable assumptions.

SciDev gives no warranty or representation as to its future financial performance or any future matter. Except as required by law or ASX listing rules, SciDev is not obliged to update this presentation after its release, even if matters change materially.

This presentation does not constitute financial advice. Further, this presentation is not and should not be construed as an offer to sell or a solicitation of an offer to buy SciDev securities and may not be relied upon in connection with any purchase of SciDev securities.

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Contact

CEO & MD Lewis Utting

Company Secretary Heath Roberts

Investor Relations Craig Sainsbury craig.sainsbury@marketeye.com.au 0428 550 499

www.scidev.com.au