zincox resources plc corporate overview february 2013 using todays technology to make yesterdays...
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ZincOx Resources plc
Corporate OverviewFebruary 2013
Using today’s technologyUsing today’s technology to make yesterday’s wasteto make yesterday’s waste into tomorrow’s resourceinto tomorrow’s resource
“ubi est squales est ære”
Disclaimer
This document is for informational purposes only and must not be used or relied upon for the purposes of making
any investment decision or engaging in any investment activity. No reliance may be placed for any purpose
whatsoever on the information contained in this Presentation, nor on assumptions made as to its completeness. No
representation or warranty, express or implied, is given by ZincOx Resources plc or any of its advisers, directors,
officers, employees or agents, as to the accuracy, fairness or completeness of the information or opinions contained
in this Presentation and no liability is accepted for any such information or opinions (which should not be relied
upon) or for any loss howsoever arising, directly or indirectly, from any use of this document or its contents or
information expressed in the Presentation. The information contained in this Presentation is subject to amendment,
revision and updating in any way without any notice or liability to any party.
Certain statements in this document relate to the future, including forward looking statements including but not
limited to those with respect to the financial position and strategy of the Company, the price of zinc, the estimation of
mineral resources and reserves, the realisation of mineral reserve estimates, the timing and amount of estimated
future production, costs of production, capital expenditures, costs and timing of development of new deposits,
success of exploration activities, permitting time lines, currency fluctuations, requirements for additional capital,
government regulation of mining operations, environmental risks, unanticipated reclamation expenses, title disputes
or claims and limitations on insurance coverage and the timing and possible outcome of pending litigation. These
forward looking statements involve known and unknown risks, uncertainties, assumptions and other important
factors that could cause the actual results, performance or achievements to be materially different from future
results, performance or achievements expressed or implied by such statements. Such risks, uncertainties,
assumptions and other important factors include, among other things, general economic conditions, exchange rates,
interest rates, the regulatory environment, structural changes in the industries in which the Company operates,
competitive pressures, selling price and market demand. The forward looking statements in this document reflect
views held only as of the date of this document and the Company expressly disclaims any intention or obligation to
update or revise any forward looking statements, whether as a result of new information, future events or otherwise,
except in accordance with applicable securities laws.
Business Overview
Zinc rich steel industry waste (EAFD)
Free
ZincOx
Recycling
Plant
Zinc bearing product Sold to
Zinc Smelters (90% Revenue)
Iron bearing product Sold to
Steel Mills(10% Revenue)
First Plant in S. KoreaProduction ramping up
Game Changing Technology
Global Roll-outs planned
Corporate Overview
History
95% of zinc comes from sulphide ore deposits
ZincOx set up (1998) to develop non-sulphide zinc mines
Each one different – bespoke solution
Exceptional technical team, >128 years of zinc experience
Technology driven but not technology provider
Track record in development of game changing technology
Modify existing technology, not “black box”
Objective: To become the largest and most sustainable zinc recycler
Status
HQ in Surrey (7 - strategy, finance, etc)
Technical support in Belgium (12 - technical and development)
Regional offices: USA (5), Thailand (2), Korea (5578)
AiM quoted
113 million shares (fully diluted)
FEED - Electric Arc Furnace Dust (EAFD)
Steel produced by: 1. Reduction of iron ore in Blast Furnaces (e.g.Posco) 2. Recycling scrap in Electric Arc Furnaces (EAF)
Electric Arc Furnaces generate waste Dust (EAFD)
Scrap contains steel that is increasingly galvanised (zinc coated) During iron melting zinc is driven off into the EAFD as an oxide
Dust contains: zinc: 18-24% (average mine: 5-6% zinc) iron: 26-30%
cadmium, lead: <2% (harmful elements = Hazardous Waste)
Korea, strictly controlled landfill (disposal fee)
TECHNOLOGY – Rotary Hearth Furnace (RHF)
Based on established (“iron making”) technology
modified to optimise for zinc recovery and energy efficiency
Unlike existing processes
- It produces no waste
- Has more product revenue
Double Breakthrough
Environmentally superior
Economically superior (no subsidy required)
RHF – Feed & Products
BriquettesEAFD (83%)coal (14%)binder (3%)
RHF
27 meters
1,300oC
NO WASTE
gas
solid
ZincSmelter
ElectricArc
Furnace
heat
ZHBIIron Product50% iron 50% slag
HZOZinc Concentrate58% zinc+ lead + salts
EAFD
KRP
Korean Recycling Plant
Korean Scrap recycling
No. 2 scrap importer
No. 1 concentration of scrap recycling
Steady growth
101
South Korean Recycling Project
100 km
Scrap Recycling Plants
( EAFD generation)
Until ZincOx, EAFD has been landfilled
ZincOx Supply Agreement10 year contracts with all steel recyclers 400,000 tpa EAFD @ 23.1% zinc EAFD only paid for at high zinc price Transport paid by mills at low zinc prices
Strong Support Korea Iron and Steel Association Zinc Industry Government
Foreign Investment Zone StatusYears 1-5, tax free (Years 6-7, 11% tax)Tax free import of capital goods
Site LeaseGovernment purchase site, US$ 20 million50 year renewable lease, 5 years rent free
KRP92,000 tpa zinc in conc
100,000 tpa Fe in ZHBI
Korea Zinc
smelter
600,
000t
zinc
in c
onc
importe
d per
annum
KRP 1 and 2
KRP - Development Plan
TOTAL
Capacity
EAFD tonnes per annum 400,000
Zinc grade Concentration 23%
Zinc concentrate tonnes per annum 162,000
Zinc contained tonnes per annum 92,000
Iron Product (ZHBI) tonnes per annum 190,000
Capital cost US$ million 210
Financing
Equity US$ million
Offtake US$ million
Bank US$ million
Start Up
EBITDA Zinc = US$2250/t US$ million pa
TOTAL Phase 1 Phase 2
Capacity
EAFD tonnes per annum 400,000 200,000 200,000
Zinc grade Concentration 23% 26% 22%
Zinc concentrate tonnes per annum 162,000 83,000 79,000
Zinc contained tonnes per annum 92,000 49,000 43,000
Iron Product (ZHBI) tonnes per annum 190,000 79,000 111,000
Capital cost US$ million 210 110 100
Financing
Equity US$ million
Offtake US$ million
Bank US$ million
Start Up
EBITDA Zinc = US$2250/t US$ million pa
TOTAL Phase 1 Phase 2
Capacity
EAFD tonnes per annum 400,000 200,000 200,000
Zinc grade Concentration 23% 26% 22%
Zinc concentrate tonnes per annum 162,000 83,000 79,000
Zinc contained tonnes per annum 92,000 49,000 43,000
Iron Product (ZHBI) tonnes per annum 190,000 79,000 111,000
Capital cost US$ million 210 110 100
Financing
Equity US$ million 60
Offtake US$ million 50
Bank US$ million 0
110
Start Up Q1 2012
EBITDA Zinc = US$2250/t US$ million pa 31
TOTAL Phase 1 Phase 2
Capacity
EAFD tonnes per annum 400,000 200,000 200,000
Zinc grade Concentration 23% 26% 22%
Zinc concentrate tonnes per annum 162,000 83,000 79,000
Zinc contained tonnes per annum 92,000 49,000 43,000
Iron Product (ZHBI) tonnes per annum 190,000 79,000 111,000
Capital cost US$ million 210 110 100
Financing
Equity US$ million 60
Offtake US$ million 50
Bank US$ million 0
110
Start Up Q1 2012 H2 2013
EBITDA Zinc = US$2250/t US$ million pa 53 31 22
TOTAL Phase 1 Phase 2
Capacity
EAFD tonnes per annum 400,000 200,000 200,000
Zinc grade Concentration 23% 26% 22%
Zinc concentrate tonnes per annum 162,000 83,000 79,000
Zinc contained tonnes per annum 92,000 49,000 43,000
Iron Product (ZHBI) tonnes per annum 190,000 79,000 111,000
Capital cost US$ million 210 110 100
Financing
Equity US$ million 60 60 na
Offtake US$ million 40 50 na
Bank US$ million 110 0 na
210 110 na
tentative
Start Up Q1 2012 H2 2013
EBITDA Zinc = US$2250/t US$ million pa 53 31 22
KRP1 Plant Layout
View 1
View 2
KRP Construction12 months constructionCompleted on schedule and budget >500,000 man hoursNo lost time accidents
Korean Recycling Plant January 2012
EAFD silos
Mega-siloBriquetting
tower
Coalpulverising
Office
Gas handling
Hotbriquetting
tower
RHF
Workshop
ZHBIstorage
First Zinc Concentrate (27 April 2012)
Iron Product
(ZHBI)
Zinc OxideConcentrate
(HZO)
KRP Production Status -1
Process Confirmation
Zinc recovery rate 89-94% (target: 97%)
Zinc concentrate grade 63%-66% (target 58%)
Iron metallisation 70-85% (Target 80%-85%)
Sales
All zinc concentrate sold to Korea Zinc
Iron product (ZHBI) undergoing consumer trials
Outstanding
Long term remedial action for heat exchanger
Production Ramp Up, 6/12 – 1/13
Confidential
Consensus long term zinc price
ZincOx long term zinc price
zinc price
12/2/13
KRP1 Cash Flow Estimate (in full production)
Total Revenue
Zinc Revenue
Operating Cost
EBITDA
ZHBI (iron) Revenue
KRP 2 Status
Basic engineering study completed.
Savings:
Mega silo, infrastructure, HBI tower, offices, storeroom,
control room, lab
Additional cost:
New: RHF, briquetters, mixers, foundation work
Cost US$100-110 million
Detailed engineering commenced
Standard Chartered Bank mandated
Production H1 2014
Global Roll-Out
Global Opportunity
1/3 of steel produced by recycling scrap
EAFD contains zinc, 18-24% (average mine: 5-6% zinc, underground)
>6,000,000 tonnes of EAFD produced annually from about 1,000 sites
=1.3 MMt Zn pa (zinc production 12 MMt pa)
Contains Cd, Pb Hazardous
Landfill or
Recycling. Current technology: less profitable
generates waste (no iron product)
needs subsidy (>US$80/t?)
Developed countries, landfill expensive mostly recycled
Developing countries, landfill cheap landfilled
50% of EAFD landfill (2008)
ZincOx’s “game changing” technology works without subsidy.
Transforms waste into a resource
Target Regions
200/1200
200/400
400/400
Target Regions
Ktpa RHF potential/EAFD prodn.
Advanced
Other
New 51% JV
200/400
200/300200/
1500
200/200
200/350
Russian Joint Venture
51% ZincOx
49% Magnezit (Ural Recycling LLC)
Major magnesite mine, at Satka (since 1901)
Largest refractory producer in FSU
1.5 million tonnes per annum
75% to steel industry, of which 25% to Electric Arc Furnaces
Magnezit recognised superiority of ZincOx technology
approached ZincOx to form JV
visited KRP in May, CEO plus senior management team
Work Programme
2012/13 Project Definition
2013/14 Bankable Feasibility
2015 Construction
2016 Production
Growth Potential
200k
ARP - Turkey
ARP - Turkey
200k
Growth Potential
200k
200k
200k
SEARP - Thailand
ARP - Turkey
Short term (2013) objectives
• KRP1
Full capacity
Iron product sales
KRP2
Financing
Development commences
• Plant 2
Environmental permitting
EAFD contracts
• Plant 3
Environmental permitting
Summary
• Focused on Korean Recycling Plant
• 400,000 tpa EAFD 10 year supply agreed (23.1% zinc)
• Phase 1
• to produce 76,000tpa zinc oxide concentrate
Ramping up from May 2012
• Full year EBITDA US$31 million pa (zinc = US$2,250/t)
• Phase 1+2
• to produce 152,000 tonnes of zinc oxide concentrate Q2 2014
• EBITDA US$53 million per annum (zinc = US$2,250/t)
• Excellent Additional Growth Potential
• Plans to “roll out” concept in other countries
Using today’s technology to make yesterday’s waste into tomorrow’s Using today’s technology to make yesterday’s waste into tomorrow’s
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