Duncan van der Merwe, Tellus Holdings - Tellus Chandler Salt Mine Project Briefing
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Transcript of Duncan van der Merwe, Tellus Holdings - Tellus Chandler Salt Mine Project Briefing
Tellus Chandler Salt Mine Project Briefing 11th September 2013 - 7th annual Mining the Territory I Darwin Convention Centre Duncan van der Merwe - Group Managing Director
Salt / Minerals
Tellus Group
Storage
Industrial & Edible Salt Minerals -Fertiliser Storage / Disposal Renewable Energy Salt Mine Tourism
Spin Off Salt Business
Chandler Project (NT)
Complementary
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Important Notice and Disclaimer
Summary information
This presentation (Presentation) has been prepared by Tellus Holdings Ltd (ABN 97 138 119 829) (Tellus) and is for information purposes only. This Presentation
contains summary information about Tellus and its subsidiaries and their activities current as at the date of this Presentation. The information in this Presentation is
of general background and does not purport to be complete. It should be read in conjunction with other periodic announcements on www.tellusholdings.com.au.
The key information on detailed Exploration Target statements and feasibility results can be found in Tellus ’s media releases. Exploration Targets statements are
appended to comply with ASX guidelines but investors are urged to read supporting information in full on the website.
Future performance This Presentation contains certain “forward-looking statements”. Forward looking words such as, “expect”, “should”, “could ”, “may”, “plan”,
“will”, “forecast”, “estimate”, “target” and other similar expressions are intended to identify forward-looking statements within the meaning of securities laws of
applicable jurisdictions. Indications of, and guidance on, future earnings and financial position and performance are also forward-looking statements. Forward-
looking statements, opinions and estimates provided in this Presentation are based on assumptions and contingencies which are subject to change without notice,
as are statements about market and industry trends, which are based on interpretations of current market conditions. Such forward-looking statements, opinions
and estimates are not guarantees of future performance.
Not an offer
This presentation does not constitute an offer, invitation or recommendation to subscribe for or purchase any security and neither this presentation nor anything
contained in it shall form the basis of any contract or commitment.
Competent Person Statement
The information in this presentation that relates to exploration results is based on information reviewed by Dr.Simon D. Beams, a full time employee of Terra
Search Pty Ltd, geological consultants employed by Tellus Holdings Limited. Dr. Beams has BSc Honours and PhD degrees in geology; he is a Member of the
Australasian Institute of Mining and Metallurgy (Member #107121) and a Member of the Australian Institute of Geoscientists (Member # 2689). Dr Beams has
sufficient relevant experience in respect of the style of mineralisation, the type of deposit under consideration and the activity being undertaken to qualify as a
Competent Person within the definition of the 2004 Edition of the AusIMM’s “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore
Reserves”.
Exploration Target
Note All statements as to exploration targets of Tellus salt and statements as to potential quality and grade are conceptual in nature. There has been insufficient
exploration undertaken to date to define a salt resource and identification of a resource will be totally dependent on the outcome of further exploration. Any
statement contained in this document as to exploration results or exploration targets has been made consistent with the requirements of the Australasian code for
reporting of exploration results, mineral resources and ore reserves (“JORC Code”).
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Contents
About Tellus Holdings Limited
Project Locations
Tellus Salt and Associated Mineral Products
Situation, challenge and solution
Chandler Project Overview
Appendix
1
2
3
4
5
A
4
About Tellus Holdings Limited 1
• Public unlisted company
• Founded July 2009 • Exploration company
with portfolio of rock salt and kaolin clay deposits
• 70M shares
• Strong Board and management team
• Proven track record of developing and operating mines and storage projects
• Chandler salt mine • JORC Exploration Target • 4.5-5 Billion tons halite+
• Sandy Ridge Kaolin
• JORC Exploration Target • 57 Million tons kaolin
• Commercial opportunities from Australia to Asia
• Commercial opportunities from Asia to Australia
• Chandler Project • Developing an
underground rock salt mine - Northern Territory
• Sandy Ridge Project • Developing a kaolin clay
mine - Western Australia
• Use voids left from mining for storage
• First mover in Asia to implement integrated salt mining and storage business
• Proven, profitable and long term business model
+ Refer to Important Notice and Disclaimer and Media Release 26 March
2013 for Competent Person Statement and Exploration Target Definition
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Project Locations - Tellus 2
State Leases Area Status Own. Project
NT 7 EL’s 879km2 Granted 100% Chandler salt mine
WA 1 ELA 59km2 Granted 100% Sandy Ridge kaolin mine
Office
Chandler Salt Mine Project
Sandy Ridge Kaolin Mine Project
ClayVault WA Government Storage Project
Asia – Japan Office
Sydney
Perth
Darwin
Project location and summary
Tokyo
Darwin – gateway to Asia
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Salt/Mineral Cavern and Mine Locations - International 2
Region Projects (Underground Salt Caverns and Mines in Salt Beds
North America >100 projects (incl. 400 salt caverns)
Europe 49 Projects (Germany leader - 30 salt mines used for backfill)
Asia 13 projects (China 6)
Russia 9 projects
Africa 1 project in Morocco
South America 1 project in Brazil
Total > 150 projects incl. < 500 caverns/ mines
Source: SMRI 2003-5: Table 3,4 & 5
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End Market Application
Synesthetic soda ash Glass, chemicals, detergents
Food / food processing Taste enhancer, heath, preservation, flavoured salts
Associated minerals (fertlisers)
Mg rich salts (MgCl), Epsom salts (MgSO4), potash, fertilizers, dust suppressant, bath salts
Chlor-alkali PVC, soap and detergents, pulp and paper
Other industrial (fluxes) Aluminium fluxes, oil & gas drilling, pharmaceuticals, textiles
Water treatment Water softening, swimming pool water chlorinators
Animal feedstuffs Salt licks, some with dietary supplements
Specialty salts (Alice Springs)(1)
Flavoured gourmet salts, salt curios, building material
Tellus salt and associated mineral products 3
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Salt - situation ▪ World salt production 38% solar, 31% rock, 31%
brine with >95% Australia production via solar ponds
▪ Asia consumes 40% (137M tpa) of global supply, growing at 5% pa
▪ Australia produced 16Mt of salt in 2010 - largest producers - Rio Tinto Dampier Salt & Mitsui (14.4M tpa, 90% national total)
Situation, challenge and solution
Salt - Tellus’ competitive advantage ▪ Tellus is in a strong position to meet Asian demand
by providing a guaranteed volume and quality of salt ▪ Large scale resource – easily scalable ▪ Reliable supplier - not influenced by climate ▪ Associated minerals – e.g. fertilisers (high value) ▪ Cross selling storage solutions to salt buyers with
storage problems
Salt - challenge ▪ Difficulty getting environmental approvals
for new projects (3 recent failed applications for solar ponds 2.5M, 3-4M & ~1M tpa)
▪ Australian & Asian salt produced mostly by coastal solar ponds – heavy rain disrupts supply for months at a time
▪ No rock salt mining exists in Australia -yet
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1
2 3
Source: Salt: Global Industry Markets and Industry Outlook, 2011
Cyclone map – 25 years
9
Experienced management team in place 5
Experienced corporate team Experienced commodity team Experienced waste management team
Mine development engineer BHP, Rio, Xstrata, Anglo Coal
Ex BD Coffey Environmental, IBM
Chairman Realm Resources, ex Macquarie, JP Morgan
Richard Rossiter Group Interim Chairman
Ron Sifton Tellus RockVault NED
Duncan van der Merwe Group MD
Brett Boynton Group FD
Noel Davis MD ClayVault WA
Robert Charter Business Development
Joe Luxford Tellus Mining
Mining (Gencor CSM Energy), waste & infrastructure (BOS)
Ex UBS, FBR Capital & Credit Suisse, Signature Gold
Ex FD Newalta, Canada’s largest salt cavern waste storage operator
Ex WA Environmental Regulator, Managed only Class V waste facility
Ex BD Director Penrice Soda, roles ICI Australia, Merck, Ajax Chemicals
Ex GM Dampier Salt, Ex CEO of Albany Port (WA)
Mark Shepherd Tellus RockVault NED
John Cook Tellus RockVault Chair
Michael Carter Tellus Salt Sales
Bob Emery Tellus Salt Chair
Ex NSW Chief Mining Engineer, Ex MD Waste Service NSW
Ex MD Coffey WA, managed Australia’s only Class V waste facility
Akira Harada Tellus International NED
CEO MCN Corp Ex GM Okaru & Co, Japanese trading houses
Tellus consists of an exceptional board and management team with key individuals having a proven track record developing large complex mines and heavily
regulated storage projects
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Chandler – Rediscovering the Chandler Salt Bed
Source: McGraw Hill
Source: xx
Image: Victoria Museum, Source: Colorado Plateau Geosystems Source: Colorado Plateau Geosystems
Cambrian -580myo lifeless land teeming ocean Salt trap for oil and gas Gillen 700myo-Chandler 500myo-Late Cambrian
Source: Ambrose and Young (2007)
Mt Charlotte 1 Well – 95% halite Mt Charlotte 1 and Magee 1 (6.6km) 145km seismic, 6.6km core
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Potentially Australia’s largest UG salt deposit
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Chandler - Mine Site
Production -salt 1M tpa salt and associated minerals (3 year ramp up) Scale up depending on market
Mining method Underground, room and pillar design, cut and blast mining
Room dimensions 140mL x 10mW x 6mH 10m support pillar
Processing - Dry and wet
Management Core - owner operator Non core - alliance & contractor Wholesaler
Jobs Build (270), operational (70), indirect (240)
Budget – A$219m
5
PFS results: Project technically feasible, economically viable - no fatal flaws
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Chandler - Salt Mining
Blasting after shift end Auger drilling
Muck pile load and dump
Roof scaling
Roof bolting
Cleaning
Drilling
Loading with explosives
0
2
3
4
5
6
7
1
5
Simple, proven room and pillar, cut and blast mining techniques
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Chandler - salt cavern storage seen as world’s best practice 5
Archives Disposal Storage Bulk commodity/ SES Equipment K+S-German salt Mine K+S-German salt Mine Compass Minerals – Deep Storage
Recovery (Al flux salts)
Vaults created from mining used for safe storage and disposal
General Licensed
Type
Unloading Testing & document control
Transport underground
Unloading in rooms (storage)
Disposal – containers backfilled
Disposal – rooms closed
Process flow
Using international “best practice”, tried & tested techniques
1 2 3 4 5 6
1
2
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Country Australia United States of America
Comment Tellus Chandler Project has potential to service the oil and gas and mining sector
400 underground salt storage caverns in 27 US states and Canada servicing the local oil and gas industry
Location
Storage caverns
Source: http://www.worldoil.com/September-2008-Cementing-across-salt-formations.html
15 salt storage caverns , Gulf of Mexico
Darwin
Darwin marine supply base – service hub for NW offshore oil and gas industry
Cross selling services Drilling salts (mine to oil & gas operations) Drilling muds/waste (oil & gas operations to mine site (disposal)
Sandy Ridge
Chandler
ClayVault
5 Chandler - potential to service oil, gas & mining industry
Darwin
Gulf of Mexico
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Chandler – 6 skin safety case 5 Tellus ISO compliant
Five engineered barriers and one natural salt barrier – 200-350m thick
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Chandler – Darwin port – marine supply base 5
Tellus 3ha transfer station
Port
Railway that runs past mine
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Chandler – Darwin port – marine supply base
Bulk & container handling infrastructure for salt exports
Darwin – marine supply base (artist impression)
Darwin – main marine supply base for offshore oil fields
$35billion Inpex project being built in Darwin
5
Marine supply base
Large volume of upstream, midstream and downstream oil and gas waste – Chandler well suited to take it
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What are the opportunities for Central Australia?
Pre mine Mine build Mine operations
Jobs – exploration
Training - apprenticeships, traineeships, work experience
Training - apprenticeships, traineeships, work experience
drilling Jobs – mine & plant build Jobs – mine & plant operations
ecological Jobs – Alice & Darwin plant build Jobs – Alice processing plant operations
studies Business opportunities – mine contractor services
Business opportunities – salt related & mine services
Sponsorships Community benefits trust
Sponsorship
Environmental offset program – improving the land (ranger programs)
Infrastructure – power, improved roads, training centre, visitor centre
Tellus has a commitment to local employment and training
5
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How have neighboring communities benefited from salt mines? German case study - Sondershausen
http://www.erlebnisbergwerk.com/
Underground (UG) tourism attractions
Underground mine tours (3 hours)
UG sports events: mine marathons,
mountain bike races, ten pin bowling
UG cultural events: music events,
private functions (weddings, corporate)
Catering for 200 people (beer hall)
Benefits • ~ 20,000 UG visitors per year • ~ $4m in local economy per year • Transport, hotels, food, souvenirs • Community pride • Renewable energy • Viable mine – salt/backfill – large local
employer, intergenerational
5
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Chandler - timetable approvals & agreements
Ch
and
ler
Completed Pre-feasibility study (FEL2)
National search for best salt deposit
Secured and expanded NT EL leases
Expanded team
Mine Management Plan – EO approved
Exploration Deed signed
Definitive feasibility study (FEL3)
Completed desktop study (FEL1)
Positive early stage commercial negotiations
JORC Expl. target
Stu
die
s C
om
me
r R
egu
lat.
MMP– Operations application & EIS
Extensive community & government engagement
Approvals mid 14
Financial close
Final engineering (FEL4) & build
2010 2011 2012 2013 2014 2015 2009 2016
1st salt sales
Final commercial negotiations
JORC Resource
What has been achieved to date << >> Future milestones
5
1st storage sales
DFS Stage 1
DFS Stage 2
21
Tellus Holdings & Tellus Salt Contacts
Tellus Holdings Level 5 / 71, Macquarie Street, Sydney NSW 2000
Tel: +61 (0)2 9241 7678 Fax: + 61 (0)2 9241 7691
Corporate
Duncan van der Merwe or Robert Charter [email protected]
Community, Alice Springs
Jane Munday, Michels Warren Munday [email protected]
0427 880 083
Duncan Robert
Appendix
23
Chandler Project overview A
Name Chandler Salt Mine Project
Location ▪ Northern Territory (120km south of Alice Springs)
Asset ▪ 100% owned by Tellus – 7 granted exploration licences covering
879km2 over Chandler and Gillen salt beds in the Amadeus Basin
Product ▪ Edible and industrial salts, Agricultural minerals (fertiliser)
Project stage
▪ Definitive Feasibility Study (FEL3)
▪ Pre-feasibility study led by URS concluded that the Chandler Project is technically feasible and economically viable – no fatal flaws
Next step ▪ Step out drilling, 2D, 3D seismic, JORC resource and reserve, mine
planning, approvals, ongoing community engagement
Historic exploration ▪ General area – 29km of drilling holes from 14 oil and gas wells
(A$17.5m) project area – 15 seismic lines (145km) 2 wells (6.6km) cost A$6.5m
JORC exploration target ▪ 4.5-5 Bt halite (refer to Media Release 26 March 2013 for
Competent Person Statement
Mine life ▪ 25 years – site can be expanded for generations
Geology ▪ Flat, 450m – 700m deep, 200m – 375m thick salt bed
Quality ▪ Export quality, post processing 97%+ sodium chloride, traces of
magnesium and polyhalite (potash)
Mining method ▪ Underground (500m deep) room & pillar design, cut & blast
Processing
▪ Dry processing – crush, screening, mix and bag
▪ Wet processing – evaporation, crystallisation and bittern ponds, harvest, mix and bag
Production ▪ 1 Mtpa industrial, edible salts (86%) and minerals (14%) scale up
depending on demand
Complementary businesses
▪ Storage and disposal in voids left from mining
▪ Mine technology park – renewable energy
▪ Salt mine tourism
Infrastructure ▪ 25km from Adelaide/Darwin railway, export via Darwin
First salt sales ▪ 2015
Processing
Mining
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Chandler - Complementary Storage Business
Source & materials accepted Not accepted
Oil& Gas sector Nuclear waste
Mining sector Uranium mining waste
Manufacturing sector Infectious wastes
State Emergency Services Wastes that can react with salt
Agricultural sector Waste not properly containerised or
sampled
A