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Titanium mining and processing
INVESTOR PRESENTATION February 2014 AJM PRESENTATION
MARCH 2014
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Statements
Forward Looking Statements • Certain informa>on contained in this presenta>on, including any informa>on on MDL’s plans or future financial or opera>ng performance and other statements
that express management’s expecta>ons or es>mates of future performance, cons>tute forward-‐looking statements. Such statements are based on a number of es>mates and assump>ons that, while considered reasonable by management at the >me, are subject to significant business, economic and compe>>ve uncertain>es. MDL cau>ons that such statements involve known and unknown risks, uncertain>es and other factors that may cause the actual financial results, performance or achievements of MDL to be materially different from the company’s es>mated future results, performance or achievements expressed or implied by those forward-‐looking statements. These factors include the inherent risks involved in explora>on and development of mineral proper>es, changes in economic condi>ons, changes in the worldwide price of zircon, ilmenite and other key inputs, changes in mine plans and other factors, such as project execu>on delays, many of which are beyond the control of MDL.
• Nothing in this presenta>on should be construed as either an offer to sell or a solicita>on to buy or sell MDL securi>es.
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Mineral Deposits – corporate snapshot
CapitalisaDon 10 years in Senegal
Lis>ng ASX (MDL)
12 mth price range A$4.21 – $1.70
Shares 103.5M
Market cap US$216M
Cash (31/01/2014) US$52M
Investments 19% World Titanium Resources US$5M
2002 Started evalua>ng Grande Côte
2004 Awarded Sabodala gold project
2007 -‐ 2009 Constructed Sabodala mine
Mar 2009 First gold poured at Sabodala
2011 -‐ 2013 Construc>on of Grande Côte
Shareholder Structure (Dec 2013)
Dec 2010 Sabodala gold assets “demerged” into Teranga Gold Corpora>on (TSX/ASX: TGZ)
Oct 2011 Commencement of TiZir – JV with Eramet – combining Grande Côte and ilmenite upgrading plant
Corporate TransacDons
Australian Institutions
53%
UK/Europe 27%
USA 8%
Other Institutions
8%
Retail 4%
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Via 50% of TiZir, we own two highly strategic mineral sands assets
Smelts ilmenite to produce a high-‐TiO2 Dtanium slag and high purity pig iron
Tyssedal (Norway) Ilmenite upgrading plant
• Opera>onal since 1986 • 1 of only 5 such assets globally (only one in Europe) • Access to compe>>vely-‐priced hydro power and close to customer base
• 2013 EBITDA = US$52m
A major new mineral sands mine
Grande Côte (Senegal)
• Construc>on complete, produc>on to commence March 2014
• 20+ year mine life – poten>al for significantly longer
• Expected to produce ≈7% of global zircon & ≈5% of >tanium feedstock
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Tyssedal ilmenite upgrading facility
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Tyssedal – What does it do?
Smelts ilmenite to produce a Dtanium-‐rich slag and pig iron co-‐product
Ilmenite Electric Furnace
Titanium Slag
Pigment Producers
High Purity Pig Iron Foundries
~345ktpa mostly sourced from Tellnes mine (Norway) containing ~44% TiO2
~200ktpa containing ~80% TiO2
~110ktpa
Input SmelDng Outputs Customers
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Tyssedal opDonality creates market flexibility
Ilmenite source
Sulphate Process
70% Tellnes (44% TiO2) 30% Grande Côte (54% TiO2)
235kt Sulphate Slag (80% TiO2)
Chloride Process
100% Grande Côte (54% TiO2)
185kt Chloride slag (87% TiO2) 45kt Chloride fines (87% TiO2)
Slag type
Pigment producDon feedstock source
OpDon OpDon
Smelt Smelt
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IndicaDve earnings potenDal of the two operaDons
Grande Côte (2015+) Tyssedal (2016+)
Volumes 85kt zircon, 575kt ilmenite, 16kt ru>le/leucox
Pricing Zircon = US$1,300/t, sulphate ilmenite = US$195/t, chloride ilmenite = US$265/t
AssumpDons:
Volumes 185kt chloride slag, 45kt chloride fines, 100kt pig iron
Pricing Chloride slag = US$950/t, chloride fines = US$700/t, pig iron = US$500/t
AssumpDons:
Assumed 20% capacity upgrade as part of 2015 shutdown and producing chloride slag
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Senegal
Grande Côte
Concession:
25 years extendable
Ownership:
TiZir 90%, Senegal Govt. 10%
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Grande Côte Geology
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• No overburden • Minor vegeta>on
• Free flowing sands – no hard lenses
• Minimal (<1.0%) slimes
• Shallow water table
• Deeper aquifer for makeup water • Uniform grain size and mineral assemblage
A simple ore body
Zircon & Dtanium minerals are of approximately equal monetary value
in the ore
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Grande Côte – What makes it special?
Large Scale
Grande Côte 20+ year mine life
Excellent logistics
Simple ore body
Top quartile on Revenue / Cost
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Grande Côte … a 2+ year build cosDng $650m
• Conven>onal wet mining opera>on … large throughput with a highly sophis>cated control system
• Purpose-‐built, flexible mineral separa>on plant
• Own 36MW power sta>on
• Own railway system
• Own port facili>es
• Quality/experienced opera>onal team
What have we built …
• A very well engineered project built specifically for the ore body
• Scale/simplicity = high revenue/cost ra>o (nearly 2x at current prices)
• Power self-‐sufficiency
• Logis>cs self sufficiency
• 20+ year mine life
… with the result being
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2014Q 4 Q 1Q 4Q 3Q 2Q 1Q 4Q 3Q 2Q 1 Q 2
2011 2013Q 3
2012
DREDGE
Engineering & Procurement
Engineering & Procurement
Offsite Construction
WET CONCENTRATOR
PLANT
Construction
Site Re-
Assem
blyConstruction
Comm
ission
Ore
Comm
issionCom
mission
Comm
ission
Construction
PRODUCTION RAMP-UP
RAIL & PORT
POWER STATION
MINERAL SEPARATION
PLANT
Comm
ission
Engineering & Procurement
Construction & RefurbishmentEngineering & Procurement
ProducDon to commence late-‐2013
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