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TELLUS HOLDINGS LTD
Chandler Project UpdateCentral Australia Regional Mining SeminarAlice Springs
Duncan van der Merwe, MD
14 March 2016
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Agenda
Tellus’ strategy
Project overview
Project timeline
Contractor Opportunities and Potential Employment
What do you need to do to work with Tellus?
Examples of Local contracts already awarded
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Tellus SummaryVision: Developing a globally proven, dual revenue business model – first in Australia
Company Public unlisted company (2009)
Strategy Project infrastructure developer
Mine underground rock salt and kaolin clay and export commoditiesFill the space left from mining with wastes from resources, oil/gas, industrial, chemical, agricultural and government sectors
Projects Darwin Business Park, Chandler, Sandy Ridge and ClayVault WA JV
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Summary - Locations
ClayVault JV – Mt Walton
Sandy Ridge Facility
Alice – Core Shed/ Office
Chandler –Field Camp
Darwin S&T Facility
Perth Office & Pilot
Brewer S&T Facility
Darwin S&T Facility
Socially responsible infrastructure close to customers and existing rail and roads
Chandler Facility
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Ex Shell, NSW Minerals CouncilVIC Haz Waste Consult. Committee
Ex Head-AMP Capital Investors, CEO Tenix Infrast. & Lend Lease Capital
Philip GarlingNon Executive Chairman
Duncan van der MerweGroup MD
Ron Sifton NED
Dr Nikki WilliamsNED
EX CFO Newalta, Canada’s biggest salt storage operator
Experienced Board and management team with key individuals retaining a proven global track record developing salt and kaolin mines, infrastructure projects, and heavily regulated storage facilities
Noel DavisMD ClayVault WA
Ex WA Environmental Regulator, Managed only Class V waste facility
Strategy - Experienced Project Team
Tellus founder, Ex Gencor (Billiton)Bank of Scotland & Nobles Group
Ex SLR, KMH Environmental and WYG
Ex BD Coffey Environmental, IBM
Robert CharterRegional BD Manager
Richard McAreeGM Sales & Marketing
Maurice SauzierRegional BD Manager
Ex. Coffey Int. Wesfarmers Ltd (CSBP), International SOS, Falck, Sonic Health
Jaime LiveseyProject Admin./ Snr Geologist
Ex EPMS, Project Manager at WA Kaolin
Mike IngramSandy Ridge Project Manager
Ex Wiltshire Geological, Schlumberger, TerraSearch
Steve ReeceTechnical Services Manager
Ex Compass Minerals -Managed UK salt & MinosusUnderground waste facility for 14 yrs
Richie PhillipsEnvironmental Approvals Mgr
Senior Environmental Scientist, Ex GHD, URS, and WS
Jonathan FisherCFO & Company Secretary
Project Finance expertise, ex Rothschild Infrastructure, Atlas Iron
Steve HoskingChandler Project Manager
Experienced BFS Study Leader, Ex Atlas Iron, BHP
Katriina TahkaHuman Resources
Co-CEO of A Human Agency & provides HR advice & strategy
Henriette RossouwOccupational Hygienist
12 years exper. Occup. Hygienist & Rad. Safety Specialist in waste, infrastr. & mining
Joe LuxfordUnderground Advisor
40 years of experience in mining ops & project development
20 years of experience in office admin. & accounting
Claudia KnightsOffice Manager
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Tellus Strategy - Proven International Model
150 projects includes <500 caverns and mines
Rock salt is globally recognized to be a suitable host rock for permanent storage.”
Source: Prognos 2012, GRS report for UNEP
Europe a leader in UG salt storage – Germany 20 mines
Tellus dual revenue business model and technology is proven international best practice
German salt mine
German salt mine
N. American salt mine UK salt mine UK salt mineN. American salt
mine
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Tellus’ Strategy – Commodity
309 M t JORC Measured1 Resource
NT Chandler Project
Halite salt (25 + year project)
Volu
me:
salt
sale
s
WA Sandy Ridge Project
Kaolin clay(25 + year project)
1 Refer to Sandy Ridge JORC media release (20 June ’14) and Chandler JORC media release (1 July 14)
41 M t JORC Inferred1 Resource
Resources Our Industrial Minerals End Market UsesOur Strategy
Dual
reve
nue:
com
mod
ity/s
tora
ge
Dom
estic
and
exp
ort s
ales
Volu
me:
kao
lin sa
les
Dual
reve
nue:
com
mod
ity /
stor
e
Chlor-alkali, soda ash, food processing, animal feed, water
treatment
Ceramics (tableware and glazes), paint, continuous filament glass-
fibre and other uses
Dom
estic
and
exp
ort s
ales
Long term (25 + year), reliable supplier of high grade industrial minerals
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Tellus’ Strategy – Waste Resources
250m thick salt bed, 18km W, 500 MYO
NT Chandler Project
Class V storage equip’t and waste
Volu
me:
stor
age
sale
s
WA Sandy Ridge Project
Class IV and V storage & isolation
30m thick clay bed, 40 km W, 60 MYO
Dual
reve
nue:
com
mod
ity
Stor
e “l
ike
with
like
” –
futu
re re
cove
ry
Volu
me:
stor
age
sale
s
Dual
reve
nue:
com
mod
ity
Stor
e “l
ike
with
like
”
Long term (25 + year), reliable supplier of Best Practice Storage and isolation services
Safety Case - Geology Our Storage Services Storage and Isolation UsersOur Strategy
Oil and gas
Mining
Heavy industry and power generation
Manufacturing
Agricultural
Government and SES
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Engineered Barriers and Operational Controls Geological barrier
• Based on strict acceptance criteria
• Combination of engineered & natural barriers
• Multi-barrier system (Russian doll concept)
• Tellus plans to store like with like materials for safety and to create opportunities for the future long term, temporary storage, treatment and recovery of valuable materials
• Waste that can not be recycled can then be permanently isolated
Safety case uses best practice examples developed around the world
Tellus’ Strategy – Safety Case
Transport Design and Construct Operations Closure &
Control PeriodPackagingDry thick clay bed / deep thick salt bed
Safety Case
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Waste Acceptance - Included & Excluded
Sectors serviced
Oil & Gas
Mining
Heavy Industry / Power Generation
Manufacturing
Agricultural
Government/SES
Excluded Wastes
1 Nuclear wastes (enriched uranium & plutonium)
2 Infectious Waste (Medical Pathogens)
3 Uncertified wastes - any materials that are not safely containerised or classified
4 Putrescible wastes (plant and animal)
Included Wastes
NEPM* 75 wastes, State Emergency Services
Tellus is bringing “world’s best practice” solutions to a difficult to manage problem
Tellus’ certifications
* National Environment Protection (Movement of Controlled Waste between States and Territories) Measure. NEPM categorises hazardous wastes into 75 different waste types.
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Chandler Project NT
Chandler – surface & underground layout for dual revenue salt mine and storage facility
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Darwin Storage and Transfer Facility
The Darwin facility will operate as a consolidation and temporary storage location and providing a logistics hub for the Chandler Facility
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Brewer Storage and Transfer Facility
The Brewer facility will operate as a consolidation and temporary storage location and providing a logistics hub for the Chandler Facility
The proposed Brewer Facility is located 20km south of Alice Springs in the Brewer Industrial Estate.
The site is zoned 'Specific Uses -Brewer Estate'.
The purpose is to facilitate the use and development of land primarily for industrial purposes that need to be isolated from other urban uses
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Chandler ProjectAs part of the Project’s EIS process, Tellus will be hosting a number of community information sessions
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Chandler - InfrastructureGreen energy – potentially the largest solar mine project in Central Australia
Chandler – hybrid – solar (PV) diesel power station
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Chandler – Storage BusinessStrict multi barrier safety case comprises man made and natural geology barriers
Conventional room and pillar mining Archive and equipment storage Stacking bags and barrels
Snow blower backfilling bags with salt Bags backfilled with salt Simple hydraulic backfill dam
North American salt mine UK salt & storage mine German salt & storage mine
German salt & storage mine German salt & storage mineGerman salt & storage mine
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Opportunities for Northern TerritoryTellus has a commitment to local employment, training and supply of equipment and services
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Contractor Opportunities & Potential Employment
Darwin Brewer Sandy Ridge Chandler Total
Current approvals status
Lodged application
Lodgement - imminent
Lodgement2016 H1
Lodgement2016 H2
Build start 2016 H2 2017 H1 2017 H1 2017 H2
Jobs - Build 90 90 40-90 350 620
Jobs- Ops (Direct) 10 25 18 180 233
Jobs – Ops (Indirect) 30 75 54 540 700
Tellus has a commitment to local employment, training and supply of equipment and services
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What do you need to do to work with Tellus?
Initial engagement is via registration with: Industry Capability Network (ICN) www.chandlersaltmine.icn.org.au or contact ICN NT 08 8922 9422ICN matches projects with potential suppliers
Tier I Primary contract – overarching contract and Tier II Secondary/ sub contracts
Category Business must demonstrate Evidence
Service Track record “deliver on spec, on time, within budget & value add”
Capacity Human resources (experience , A team vs B team, availability) /equipment /supplies
Qualifications (certificates, licences & tickets- current and appropriate)
Financial viability
Insurances -Public Liability, PI, Vehicle, Workers Comp., Damage to Property
Policies (Environ., Quality, OH&S, local content, supporting local people)
Safety management plan and systems
Price Competitive in market comparison, value for money
Terms Contractual terms are acceptable (risk management)
Companies need to demonstrate track record, capacity, price competitive and risk management
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Bankable contracts: Tier I Primary contract (overarching contract) and Tier II Secondary contract (sub contracts)
A bankable contract is a contract with a risk allocation between the Contractor and the Project Company that satisfies the Lenders.
Lenders focus on the ability (or more particularly the lack thereof) of the Contractor to claim additional costs and/or extensions of time as well as the security provided by the Contractor for its performance.
The less comfortable the Lenders are with these provisions, the greater amount of equity support the Sponsors will have to provide.
In addition, Lenders will have to be satisfied as to the technical risk of the technology proposed and the delivery track record of the contractors.
Price is also a consideration, but that is usually considered separately to the bankability of the contract because the contract price (or more accurately the capital cost of the facility) goes more directly to the bankability of the project as a whole.
What do you need to do to work with Tellus?
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Single point of responsibility (if any problems occur ProjectCo need only look to one party – The Contractor – To both fix the problem and provide compensation)
Fixed completion date
Fixed completion price
No or limited technology risk
Output guarantees
Liquidated damages for both delay and performance (15% -25% of contract value)
Security from the Contractor and/or its parent (bank guarantee 5-10% of contract value, Retention, i.e. withholding a percentage (usually 5%–10%), Advance payment guarantees)
Large caps on liability
Restrictions on the ability of Contractor to claim extensions of time and additional costs.
What do you need to do to work with Tellus?In assessing bankability, Lenders will look at a range of factors like:
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Examples of Local Community Support
Support local communities (Titjikala Tidy Town) Create local jobs for TO’s Support local sports teams
Support education programs - CDUSupported Tellus shareholders raising funds for
international charitiesSupport environmental program -30 rangers
Tellus supports training, local jobs and business, investment and regional development
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Examples of Local contracts already awarded
Category Service / equipment provided Local
Industrial real estate Shed/ office rental & utilities
Studies - environmental contractors & TO’s Field surveys
Station / Landholders Earthworks machinery, accommodation
Mining service providers Camp and equipment supply
Wholesale fuel distributors Diesel supply
Vehicle rental suppliers Vehicle rental
Freight providers Freight service
Geotechnical contractors Personnel
Camping & safety equipment suppliers Field equipment supply
Helicopter charter service providers Charter flights
Accommodation & food and beverage Hotels, taxis, catering, room hire
Tellus has a commitment to local employment, training and supply of equipment and services
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Signed $120M Equipment Supply MOUSigning ceremony with CCTEG, Tellus and witnessed by NT Government
Beijing signing ceremony
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Signed Salt Offtake AgreementSigning ceremony with PT Damarcio, Tellus and witnessed by Indonesian Government
35Darwin Port and Marine Supply Base
Contact Details
Duncan van der Merwe
Group Managing DirectorE: [email protected]
A: Suite 2, Level 10, 151 Castlereagh Street, Sydney, NSW, 2000
T: +61 2 8257 3395 F: +61 2 8233 6199
www.tellusholdings.com.au
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DisclaimerSummary 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, mineral resource estimates, and feasibility results can be found in Tellus’ publically released media announcements. Exploration target statements and mineral resources estimations are appended to comply with ASX guidelines but investors are urged to read supporting information in full available on the company’s website, and available in their data room.
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, and independent third party expertise. 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 Statements – Chandler ProjectAny references to reserve and resources estimations should be read in conjunction with Tellus’ Ore Reserves and Mineral Resources statement for its projects as loaded onto Tellus’ web site. The information in this presentation that relates to Mineral Resources - Chandler Project - is based on information compiled by ERCOSPLAN Ingenieurgesellschaft Geotechnik und Bergbau mbH (‘ERCOSPLAN’). Jana Neubert is a senior geologist and employee of ERCOSPLAN and a member in good standing of the European Federation of Geologists registered as “European Geologist” (Registration Number 1033).
Competent Person Statement – Sandy Ridge ProjectThe information in this presentation that relates to Mineral Resources - Sandy Ridge Project - is based on information compiled by Terra Search Pty Ltd. Mr Jenkins is Principal Geologist of Terra Search and a Member of the Australian Institute of Geoscientists. Mr Jenkins has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he has undertaken to qualify as a Competent Person as defined in the 2012 edition of the Australasian Code for the Reporting of Mineral Resources and Ore Reserves.
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