ASX:INR Virtual non deal US road show€¦ · materially from what is presented or implicitly...
Transcript of ASX:INR Virtual non deal US road show€¦ · materially from what is presented or implicitly...
www.ioneer.com
INVESTOR PRESENTATION
ASX:INR
Virtual non deal US road show
1
July, 2020
www.ioneer.com 2
This presentation has been prepared as a summary only and does not contain all information about ioneer Ltd’s (ioneer or the Company) assets and liabilities, financial position and performance, profits and losses, prospects, and the rights and liabilities attaching to ioneer’ssecurities. The securities issued by ioneer are considered speculative and there is no guarantee that they will make a return on the capital invested, that dividends will be paid on the shares or that there will be an increase in the value of the shares in the future.
ioneer does not purport to give financial or investment advice. No account has been taken of the objectives, financial situation or needs of any recipient of this presentation. Recipients of this presentation should carefully consider whether the securities issued by ioneer are an appropriate investment for them in light of their personal circumstances, including their financial and taxation position. Investors should make and rely upon their own enquiries before deciding to acquire or deal in the Company's securities.
Forward Looking Statements
Various statements in this presentation constitute statements relating to intentions, future acts and events which are generally classified as “forward looking statements”. These forward looking statements are not guarantees or predictions of future performance and involve known and unknown risks, uncertainties and other important factors (many of which are beyond the Company’s control) that could cause those future acts, events and circumstances to differ materially from what is presented or implicitly portrayed in this presentation.
For example, future reserves described in this presentation may be based, in part, on market prices that may vary significantly from current levels. These variations may materially affect the timing or feasibility of particular developments.
Words such as “anticipates”, “expects”, “intends”, “plans”, “believes”, “seeks”, “estimates”, “potential” and similar expressions are intended to identify forward-looking statements.
ioneer cautions security holders and prospective security holders to not place undue reliance on these forward-looking statements, which reflect the view of ioneer only as of the date of this presentation.
The forward-looking statements made in this presentation relate only to events as of the date on which the statements are made. Except as required by applicable regulations or by law, ioneerdoes not undertake any obligation to publicly update or review any forward-looking statements, whether as a result of new information or future events. Past performance cannot be relied on as a guide to future performance.
Competent Persons Statement
In respect of Mineral Resources and Ore Reserves referred to in this presentation and previously reported by the Company in accordance with JORC Code 2012, the Company confirms that it is not aware of any new information or data that materially affects the information included in the public report titled “Rhyolite Ridge Ore Reserve Increased 280% to 60 million tonnes” dated 30 April 2020 and released on ASX. Further information regarding the Mineral Resource estimate can be found in that report. All material assumptions and technical parameters underpinning the estimates in the report continue to apply and have not materially changed.
In respect of production targets referred to in this presentation, the Company confirms that it is not aware of any new information or data that materially affects the information included in the public report titled “ioneer Delivers Definitive Feasibility that Confirms Rhyolite Ridge as a World-Class Lithium and Boron Project” dated 30 April 2020. Further information regarding the production estimates can be found in that report. All material assumptions and technical parameters underpinning the estimates in the report continue to apply and have not materially changed.
No offer of securities
Nothing in this presentation should be construed as either an offer to sell or a solicitation of an offer to buy or sell ioneer securities in any jurisdiction or be treated or relied upon as a recommendation or advice by ioneer.
Reliance on third party information
The views expressed in this presentation contain information that has been derived from publicly available sources that have not been independently verified. No representation or warranty is made as to the accuracy, completeness or reliability of the information. This presentation should not be relied upon as a recommendation or forecast by ioneer.
Lithium Carbonate Equivalent
The formula used for the Lithium Carbonate Equivalent (LCE) values quoted in this presentation is: LCE = (lithium carbonate tonnes produced + lithium hydroxide tonnes produced * 0.880
Note
All $’s in this presentation are US$’s except where otherwise noted.
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WORLD CLASS LITHIUM-BORON PROJECT CONFIRMED BY COMPREHENSIVE DFS
WELL-DEFINED AND RELIABLE OPERATING COST
ALL-IN SUSTAINED CASH COST AT THE BOTTOM OF THE LITHIUM COST CURVE
LONG-LIFE RESOURCE WITH VERIFIED EXPANSION POTENTIAL
U.S. ADVANTAGE AND LOW-RISK, MINING-FRIENDLY LOCATION IN NEVADA
CLEAR PATH TO COMPLETION WITH THOROUGHLY VETTED CAPITAL ESTIMATES
SUSTAINABLE PROJECT
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ALAN DAVIES
Non-executive Director
FORMER: Chief Executive, Energy & Minerals of Rio Tinto
PATRICK ELLIOTT
Non-executive Director
FORMER: Executive Chair of Variscan Mines Limited
BERNARD ROWE
Managing Director
IONEER:Managing Director since August 2007
JOHN HOFMEISTER
Non-executive Director
FORMER: President of Shell Oil Company (U.S.A.)
JAMES D. CALAWAYNon-executive Chairman
FORMER: Non-exec chairman of Orocobre Ltd
JULIAN BABARCZY
Non-executive Director
FORMER: Head of Australian Equities, Regal Funds Management
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BERNARD ROWE
Managing Director
IAN BUCKNELL
CFO & Company Secretary
RESPONSIBILITIES: FinanceITCompany Secretarial
KEY TEAM:Chad YeftichJohn Czukiewski
KEN COON
VP Human Resources
RESPONSIBILITIES: HRGovt Relations
KEY TEAM:Tyson Falk
MATT WEAVER
Snr VP Engineering & Operations
RESPONSIBILITIES:EngineeringOperationsUS Office
KEY TEAM:Tamar AtibaRebecca SawyerPeter EhrenMichael OsborneJohn ReynoldsKiedock KimBill McCarthy
YOSHIO NAGAI
VP Commercial Sales & Marketing
RESPONSIBILITIES:Lithium & Boron SalesBranding and licensingSales logistics
KEY TEAM:Michael Le PagePaul FinkKevin YuJane Foo
www.ioneer.com
Capital Structure (As at 1 July 2020)
Share price
Shareholders
Insider Ownership 7.21%
Top 20 Ownership 52.6%
Centaurus 9.2%
Institutional holders 25.16%
SHARES OUTSTANDING 1.68B
PERFORMANCE RIGHTS AND OPTIONS OUTSTANDING
50m
CASH BALANCE (31/03/20) A$53m
SHARE PRICE ASX A$0.125
MARKET CAPITALISATION A$210m
52 WEEK SHARE PRICE RANGE (CLOSE)
A$0.07 - A$0.27
6Source: Company Data, FactSet, Ipreo and CapIQ
$-
$0.05
$0.10
$0.15
$0.20
$0.25
$0.30
1-Jul-19 1-Sep-19 1-Nov-19 1-Jan-20 1-Mar-20 1-May-20 1-Jul-20
1 July 2019 - 1 July 2020
www.ioneer.comThe DFS base case lithium carbonate equivalent (LCE) prices averaged ~US$13,000/tonne and boric acid prices averaged US$710/tonne.All annual figures are on an average year basis over 25.24 years 7
Annual Revenue
US$422MAnnual EBITDA
US$288M
Annual After-tax Cashflow
US$193M
After-tax NPV (8% real):
~US$1.27B
Unlevered After Tax IRR
~21%
Estimated Capex
US$785M
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Annual Mining:
2.53M Tonnes
Annual Lithium Hydroxide:
22,000 Tonnes
Years 4-26
Annual Boric Acid:
174,400 Tonnes
Years 1-26
Annual Lithium Carbonate Equivalent:
32,000 Tonnes
Years 1-26
Figures are in metric tonnesFigures calculated over average LOMLithium Hydroxide production replaces Lithium Carbonate after year 4Total LCE of 32,000 tpa is based on annual LOM Revenue of $422 million divided by LCE realised price of $13,200/tonne
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Initial Minelife:
26 Years
Ore Mined
63.8Mt
Large Ore Reserve1:
60.0Mt
Large Mineral Resource1:
146.5Mt
1 For Mineral Resources and Ore Reserve referred to in this presentation, see Company announcement titled “Rhyolite Ridge Ore Reserve Increased 280% to 60 million tonnes” dated 30 April 2020, for further information. Mineral Resource estimates include Ore Reserves.2 Mineral Resource of 146.5Mt less Ore Mined 63.8Mt equals the remaining Mineral Resource post the initial mine
Mine Life Extension:
82.7Mt Remaining Resource2
+Extension to
Resource
www.ioneer.com 10LCE revenue is higher than the assumed lithium price due to conversion of LiOH to LCE by approximately 10%The additional cost variance is due to state tax differentials at different lithium revenue levels
$8,961 $8,735
Total Revenue in US$/tonne LCE
LCE Revenue Boric Acid Revenue Product Cost $/t LCE (ex Co-Product)
$23,135
$18,659
$9,924 Margin
$14,173 Margin
Assumed Lithium Price of $15,000/t Assumed Lithium Price of $11,000/t Product Cost $/t LCE (ex Co-Product)
$8,861
ALL IN SUSTAINING CASH COST US$2,510
• The columns in blue represent total revenue produced from 1 tonne of LCE and ~9 tonnes of boric acid
• The column in green represents the total cost to produce 1 tonne of LCE and ~9 tonnes of boric acid
www.ioneer.comSource: Roskill for all producing lithium brine and mineral operations shown on this cost curve, except for ioneer estimate sourced from the Rhyolite Ridge DFS. Costs as shown are all-in sustaining costs. The Rhyolite Ridge all-in sustaining costs were based on the same methodology as the Roskill cost estimates.(Cost includes Conversion Cost to Li2CO3, Royalties, Freight CFR China, Assumes spot FX for RMB, AUD, ARS, CLP)
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-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
0 50 100 150 200 250 300 350 400
US$
LC
E
1,000 Metric Tonnes
2019 LCE Cost Curve (US$/metric tonne) Global Producers
ioneer Brine Mineral
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Funds in place to support planned activities to the end of 2021
Aim is to be ‘shovel ready’ and permitted by Q2 2021
DFS completion allows informed strategic funding discussions
Strong interest despite challenging times , ioneer well positioned to manage
Goldman Sachs advising ioneer on strategic and financing alternatives
Strong strategic partner central to funding solution
Debt, vendor/ECA finance and equity build on this
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Vendor Financing
Debt
Partner with Direct Investment
in Project
Additional Strategic Partners Interested
Multiple “Large” Global Strategic
Partners
Rhyolite Ridge
Funding Stack
Equity FinancingEquity
Rhyolite RidgeFunding Stack
Vendor Financing
Debt
Additional Tier 1Strategic Partners Strategic Partner with
Direct investment in ProjectInterested
Strategic Partners
PFS DFS FutureRhyolite Ridge
Funding Complete
Note: the size of the boxes and timescale are illustrative only and should not be relied upon as an indicator of the final composition of the capital stack.
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• 22ktpa BG LiOH over >26yrs
• Bottom of lithium cost curve
• US location, most advanced
• DFS complete, Class 3 estimate
• 30% engineering complete
• Full simulation pilot plant
• Boric acid offtake in place
• PFS data room since Jan 2019
• Pre-DFS partner engagement
• Site visits conducted
• Pilot plant tours conducted
• Pilot samples provided
• Pre-DFS technical discussions complete
• Finalise DFS data room
• Continue selective partnering discussions
• As markets recover, commit to timing for formal partnering process
• Detailed technical and financial meetings
• Partner selection
OpportunityProcesses
CompletedNext Steps
Strategic Partnering
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✓ Complete DFS
✓ Execution Engineering Services (EES) begin
✓ Submit project permits
• Complete financing plan
• Award long lead items
• Major contracts in negotiation
• Complete financing
• Full notice to proceed
• Site mobilization
• Release equipment fabrication
• Engineering Complete
• Begin concrete construction
• Steel and tank erection begin
Q2 2020 Q3 2020 Q2 2021 Q3 2021 Q2 2023
• Mechanical completion
• Commission plant
• Permanent power available
• First product shipment
Near-Term Timeline
Note: All dates and times are indicative and subject to change.
www.ioneer.com 16Note: Chart inputs are ioneer estimates derived from industry research.
LITHIUM• Essential to all types of EV batteries • Conversion of green energy to base load power• Strong demand growth predicted to beyond 2040• Listed as a critical material by US Government• Very limited production in US – world’s 2nd largest
vehicle fleet
BORON• Important material for clean technologies and
sustainability• Over 300 applications including advanced glass,
permanent magnets for EVs and wind turbines• Stable pricing and demand growth• Produced in only a few locations globally
Lithium demand to grow at >20% CAGR to 2028 Boron demand to grow at ~4% CAGR to 2028
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US demand:
• Seven US megafactoriesin the pipeline to 2024, three are already operational
• Benchmark Minerals estimates that by 2024, these megafactorieswill be producing 125GWh of cells requiring ~107,000 tonnes of lithium chemicals (LCE)
LG CHEM/GM LORDSTOWNOhio
10GWh
LG CHEMMichigan
15GWh
IM3New York15GWh
With the addition of the LG Chem-GM Megafactory in Ohio, the USA now has 7 battery megafactories in the pipeline across 6 different states. Farasis Energy is yet to confirm the location of its US megafactory
U.S. Megafactories 2020-2024
TESLA, GIGAFATORY 1Nevada60GWh
AESCTennessee5GWh
SKI, COMMERCEGeorgia10GWh
Farasis, TBC10GWh
Source: Benchmark Minerals Intelligence
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Stage One: Mining
Nickel 8% 0% 31%
Cobalt 0% 0% 1%
Graphite* 1% 0% 65%
Lithium 0% 1% 0%
Manganese 0% 0% 0%
Stage Two: Chemical Processing / Refining
Nickel 13% 1% 65%
Cobalt 17% 0% 82%
Graphite* 0% 0% 100%
Lithium 0% 4% 59%
Manganese 7% 0% 93%Stage Three: Cathode or Anode Production
Cathode 8% 0% 61%
Anode* 0% 0% 83%
Stage Four: Lithium ion battery cell manufacturing
Cells 6% 10% 73%
Source: Benchmark Minerals Intelligence*Flake Graphite Feedstock, All Anode Nature & Synthetic
Min
ing
Ch
emical P
rocessin
g
Global share of production (%) in 2019
Cat
ho
de
Pro
du
ctio
nC
ell Man
ufactu
ring
Ap
plic
atio
n
U.S Lithium consumption from EV’s set to increase ~8.2x over five years
www.ioneer.com 19Source: UBS Research – Global Electric Vehicle Battery Makers 17 June 2020Note: BEV is short for Battery Electric Vehicle, PHEV is short for Plug-In Hybrid Electric Vehicle
• Forecast growth for this decade is dominated by China and Europe but other regions are starting to move
• Europe is forecast to quickly catch and surpass China in total sales
• US and Europe need alternative supply of lithium and other battery materials
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20
EVs more expensive to own
and purchase
EVs less expensive to own, more expensive to purchase
Total cost of ownership parity
EVs less expensive to own and purchase
Purchase price parity
Early AdoptionEnvironmental and social reasons spur slow but steady adoption
Rational SwitchingLower fuel and maintenance costs help justify higher purchase price, accelerating adoption by commercial users in particular
Budget SwitchingLower purchase price encourages mass adoption by budget-conscious individuals
Comparison to internal combustion
vehicles
• Lithium-ion battery cost reduction is an important catalyst for mass adoption of EVs
• Lithium pricing required at levels to incentivise rapid growth of lithium supply from 2023
• Consistent lithium specifications increasingly important for battery cathodes
• Automakers moving to ensure lithium supply
Rhyolite Ridge Begins Production
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• Broad range of essential uses mitigates reliance on single sector
• USA and China housing markets important drivers of demand
• Increasing demand from agriculture, solar, specialty glass and permanent magnets
• Total global market $2.3B per annum (2018)
• 4.5Mtpa of boron products (borates)(2.1Mtpa of boric oxide - B2O3)
• Including 1.2Mtpa boric acid worth $0.7B(0.7Mtpa of boric oxide - B2O3)
• Duopoly:
o Eti (Turkey) ~50% of refined borate market
o Rio (California) ~30% of refined borate market
• Customers value consistent quality and reliable supply
• 72% of worlds known Reserves are in Turkey
8%5%
11%
12%
12%16%
17%
19%
Global Borates Demand by End Use
Other
Textile Fiber Glass
Industrial /Chemical
LCD / TFTBorosilicate Glass
Insulation
Agriculture
21
Frits / Ceramics
Notes: Borates demand includes refined chemicals (~80% of demand) such as boric acid and raw mineral products (~20% of demand). Chart inputs are ioneer estimates derived from industry research.
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• Rhyolite Ridge’s location in Nevada is another key difference that sets the project apart
• Nevada is a first rate, low risk, mining friendly jurisdiction with a long history of mining
• Well-established infrastructure and labour force
• Proximity to the Pacific coast strategically positions the Project for entrance into major U.S. and Asian end markets
• Potential customers include Tesla, whose Gigafactory is located ~200 miles away
• In 2019, U.S. total demand from lithium ion batteries was 42,000 tonnes of LCE
• By 2024 demand is estimated to be ~107,000 tonnes of LCE from the current announced production
• U.S total demand is estimated to be 344,000 tonnes of LCE to meet the current plans of U.S auto OEM’s by 2025.
Source: Benchmark Minerals Intelligence
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Low emissions
Low water usage
Small mine footprint
Energy-efficient equipment
Commitment to sustainability
Zero C02 power co-generated at site, low greenhouse gas emissions.
Project design implements best-in-class water utilization while recycling the majority of water usage.
No evaporation ponds or tailings dams.
Low Greenhouse Gas emissions: 0.19 tons CO2e per ton Li2Co3 produced.
All baseline studies (14) for EIS completed over 2 years. Funding 5-year growth study at University of Nevada (UNR) for the successful propagation of Tiehm’s buckwheat.
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Bernard Rowe
ioneer Ltd
Jane Munday / Megan MooreFTI Consulting
Grace Altman
FTI Consulting
Managing Director Investor & Media Relations (Australia)
Investor & Media Relations (USA)
T: +61 419 447 280 T: +61 488 400 248 /+ 61 434 225 643
T: +1 917 208 9352
E: [email protected] E: [email protected] / [email protected]
Be sure to check out our DFS video at www.ioneer.com
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Rhyolite Ridge
Analysis
Typical Industry
Specifications
Lithium Hydroxide wt% 56.5 56.5
Sodium ppm 28 ≤ 30
Potassium ppm 12 ≤ 200
Iron ppm <1 ≤ 7
Boron ppm <1 ≤ 3
Calcium ppm <10 ≤ 250
Sulphate ppm <30 ≤ 300
Chlorine ppm <100 ≤ 100
Magnesium ppm <5 ≤ 5
Silica ppm 14 ≤ 20
Carbon Dioxide wt% 0.10 ≤ 0.35
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Compound or Element
Units Rhyolite Ridge
Boric Acid Typical Industry Specifications
Boric Oxide (B2O3) % >56.5 >56.25
Boric Acid (H3BO3) % >99.9 >99.9
Sulphate ppm <125 <250
Chloride ppm <1 <10
Iron ppm <5 <7
Calcium ppm 13 <50
Sodium ppm 43 <200
Chlorine ppm <5 <10
Lead ppm <10 <20
Arsenic ppm <10 <100
D50 particle size microns 550
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• The Roskill forecast shows lithium pricing at the bottom of the cycle with improved pricing forecast for 2023 to meet first production from Rhyolite Ridge
• Benchmark Minerals Intelligence forecasts a similar price recovery
• Current Benchmark price for battery grade lithium hydroxide is $11,000 (FOB N.America)
Roskill: Annual price forecast for BG Lithium Hydroxide
Source: Roskill Lithium outlook to 2028
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• Rhyolite Ridge total Ore Reserve almost quadrupled to 60 million tonnes (mt)
• Approximately half of the Ore Reserve is classified as Proved
• Boron grades increased by 26% in the total Ore Reserve, significantly lifting boric acid production
• Ore Reserve provides 94% of tonnes in current 26-year mine plan
• Total Mineral Resource of 146.5 mt containing a total of 1.2 mt of lithium carbonate and 11.9 mt of boric acid
Source: For further information on Resources and Reserves see ASX release titled Rhyolite Ridge Ore Reserve Increased 280% to 60 million tonnes dated 30 April 2020. Note, totals may differ due to rounding. Mineral Resources include Ore Reserves.