argex ir presentation november 20 2014 presentation
DESCRIPTION
Titanium Dioxide BusinessTRANSCRIPT
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Corporate Presenta,on
TSX:RGX
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TSX:RGX
The informa,on presented contains forward-looking statements, within the meaning of the United States Private Securi,es Li,ga,on Reform Act of 1995, and forwardlooking informa,on under similar Canadian legisla,on, concerning the business, opera,ons and nancial performance and condi,on of Argex Titanuim Inc. (Argex or the Company). Forward-looking statements and forwardlooking informa,on include, but are not limited to, statements with respect to es,mated produc,on, the es,ma,on of mineral reserves and mineral resources; the realiza,on of mineral reserve es,mates; the ,ming and amount of es,mated future produc,on; costs of produc,on; capital expenditures; success of explora,on ac,vi,es; permiQng ,me lines and permiQng, mining or processing issues; government regula,on of mining opera,ons; environmental risks; unan,cipated reclama,on expenses; ,tle disputes or claims; li,ga,on liabili,es; and limita,ons on insurance coverage. Generally, forward-looking statements and forwardlooking informa,on can be iden,ed by the use of forward-looking terminology such as plans, expects or does not expect, is expected, budget, scheduled, es,mates, forecasts, intends, an,cipates or does not an,cipate, or believes, or varia,ons of such words and phrases or state that certain ac,ons, events or results may, could, would, might or will be taken, occur or be achieved. Forward-looking statements and forwardlooking informa,on are based on the opinions and es,mates of management as of the date such statements are made, and they are subject to known and unknown risks, uncertain,es and other factors that may cause the actual results, level of ac,vity, performance or achievements of the Company to be materially dierent from those expressed or implied by such forward-looking statements or forwardlooking informa,on. Although management of the Company has aUempted to iden,fy important factors that could cause actual results to dier materially from those contained in forward-looking statements or forwardlooking informa,on, there may be other factors that cause results not to be as an,cipated, es,mated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could dier materially from those an,cipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements and forwardlooking informa,on. The Company does not undertake to update any forward-looking statements or forwardlooking informa,on that are incorporated by reference herein, except in accordance with applicable securi,es laws.
Forward Looking Statements
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TSX:RGX
Stock Price (11-20-14) $0.64
52 Week Low/High $0.55/$0.99
Avg Daily Volume (3 mo.) 189,471
Shares Outstanding 143.2M
Diluted Shares 156.2M
Insider Holdings (est) 25%
Market Cap $92M
Enterprise Value $86M
Revenues Pre-Revenue
Cash & Equivalents $9.3M
Total Assets $28.4M
Total Debt & Liabili,es
$6.6M
Total Equity $20.3M
Key Stats: RGX (TSX)
Stock Data Source: Yahoo! Finance Financial Statement Information in CAD as of September 30, 2014.
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TSX:RGX
Argex Titanium is an emerging producer of high-grade ,tanium dioxide (TiO2) used as white pigment in paint, plas,c, paper, cosme,cs and other applica,ons
Patented technology converts low-cost ilmenite into highly pure TiO2
Signicantly lower cost & environmentally friendly vs. tradi,onal methods
TiO2 in high demand globally for numerous applica,ons:
Paint (building & industrial) Coa,ngs Cosme,cs Food Pharmaceu,cals Plas,cs
Who We Are
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TiO2 TAM is ~$16 billion worldwide
Currently sells for approx. $3,400 US/MT1
5.2 million MT per year2
TiO2 demand tracks with global economic growth
Strong Industry Relationships
Patented Extrac,on Process
Major TiO2 Market
Patented ,tanium dioxide (TiO2) produc,on technology
Converts low-cost ilmenite into high-purity TiO2
Signicantly lower cost than compe,,on
Planning 50,000 tpa plant Environmentally friendly Marketable by-products Disrup,ve technology
Otake and technology sharing agreements with PPG, the worlds largest paint company
Distribu,on agreement with one of the worlds largest chemical distribu,on companies, Helm AG for up to 25,000 tonnes per year
NDAs in place with major end-users and distributors
1ICIS, April. 2014 2TI Insight 2014
Corporate Highlights
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Typical TiO2 End Uses
Paint &
Coa,ngs 62%
Plas,cs 26%
Paper 7%
Other 5%
Source: TI Insight 2014
TiO2 is the most widely used white pigment Non-toxic and environmentally friendly Numerous advantageous proper,es
Opacity Brightness Gloss Tone (white) and under-tone (color) Weather resistant and durable Abrasiveness
About TiO2
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Global TiO2 Producers
38%
17% 10%
Other 8%
8%
8% 6% 5%
China TiO2 total addressable market is ~$16
billion worldwide
Currently sells for ~$3,400 per U.S. metric ton (MT)1
5.2 million MT sold per year2
TiO2 demand tracks with global economic growth
TiO2 Industry Snapshot
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
$4,000
$4,500
$5,000
1) ICIS, April. 2014 2) TI Insight 2014 7
TiO2 Global Price History
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Average German uses 9lbs of TiO2 per year
Average North American uses 7lbs of TiO2 per year
BRIC currently uses on average 2lbs of TiO2 per year, per person
TiO2 Demand Tied To GDP
Source: Ti Insight, 2014 8
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Ilmenite Ore
Crushing & Milling
Leaching Atmospheric pressure
Filtra,on
Inert solid tails
Solvent extrac,on ( iron circuit)
Solvent extrac,on (,tanium circuit)
TiO2 precipita,on
TiO2 recovery (ltra,on) Surface treatment
Finish product TiO2 pigment
Regenerated HCl
Co-product Iron oxide
Co-product Magnesium oxide
Regenerated HCl
Acid regenera,on
Acid regenera,on
Lixiviant Mixed acids
HCl recycling system
ARGEX Extrac,on Process
ARGEX Process
Finish product TiO2 pigment
Co-product Iron oxide
Co-product Magnesium oxide
Solvent extrac,on is proven for uranium, copper, nickel, rare earths, etc.
State-of-the-art and o-the-shelf equipment
Filtering, rotary kilns, coa,ng and nishing are proven TiO2 technologies
Low temperatures and atmospheric pressures
Eec,vely extracts TiO2 from inexpensive ores containing dierent contaminants (Mg, V, Cr, etc.)
Marketable by-products, minimal inert residual
Environmentally friendly process, closed-loop
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ARGEX Process vs. Other Methods
Sulphate Chloride Argex
Raw material cost ($/ton of TiO2 feed)
Low Ilmenite
High Rutile
Low Ilmenite
TiO2 final product Low purity High purity High purity
Capital expenditure Medium High Medium
Operational costs Medium High Low
Environmental High Medium Low
Flexibility in processing raw material
Limited (Cr, V)
Limited (Mn, Mg, size) High flexibility
Process Condition High temp.
High pressure (140-180 0C)
Very High temp. High pressure (800-1,400 0C)
Low temp. Atm. pressure
(70 0C)
TiO2 Pigment production Rutile/Anatase Rutile Rutile/Anatase
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TiO2 Pigment Proper,es Dierence Between Processes
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Sulfate Chloride Argex
Brightness Less bright More bright More bright
Undertone More yellow Less yellow Neutral
Dispersibility More Less More
Abrasiveness Less More Less
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Market Ac,on
Develop collabora,ve partnerships in the following sectors: Architectural paint and coa,ngs Cosme,cs, food and pharmaceu,cals Plas,cs
Current partners Major Global manufacturers of end-
products that incorporate TiO2 Mul,na,onal distributors Academic
NDAs have been signed with several end-users and distributors, advancing discussions and nego,a,ons
Our Go-to-Market Strategy
Risk Mi,ga,on
Extensive third party engineering plan completed
Opera,ng model established by a Big 4 accoun,ng rm
Produc,on plant uses an exis,ng facility Modest size rela,ve to other solvent
extrac,on plants
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Located 40 km southwest of Montreal, Canada, near a major port on the St. Lawrence Seaway
Access to rail, road and sea facilitates shipping Access to a qualied and experienced workforce Region is home a hydrometallurgical and chemical
processing industry
Currently opera,ng pilot plant on site which allows for con,nuous improvements to processes and quality of output
Commercial produc,on planned to begin Q1 2017
Valleyeld Produc,on Site
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NYSE: PPG
Global supplier of paints, coa,ngs, op,cal products, specialty materials, glass and ber glass
Founded: 1883
Total Net Sales 2013: $15.1 Billion Ranked 182 on Fortune 500
Employees: ~42,600
Manufacturing Facili,es: 156
April 2012: Signed major purchase and technology sharing agreements with PPG Industries, the worlds largest paint company
PPG and Argex are currently collabora,ng on a ,tanium dioxide product that can meet conven,onal standards for interior and exterior paint applica,ons,
Collabora,on allows PPG to leverage its exper,se to secure a supply of a cri,cal raw material for its products while helping to mi,gate pricing or supply vola,lity
Partnership and supply agreement further validate Argexs process and the suitability of its TiO2 pigment for commercial use
Technology sharing agreement allows Argex to use PPG Finishing technologies.
Major Customer Partnership: PPG
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HELM AG
Founded: 1900 in Hamburg, Germany
Global revenues 2013: US$12.7 billion (EUR 9.666 billion)
Employees: 1,431
Branches and company par,cipa,ons: 90 rms and company par,cipa,ons in more than 30 countries
August 2014: Signed an exclusive long-term marke,ng and supply agreement with Helm U.S. Corp., a wholly-owned subsidiary of German-based HELM AG, the third largest chemical distribu,on company in the world
HELM U.S. will exclusively market and distribute to U.S. and Canada 50% (or up to 25,000 metric tons per year), of TiO2 produced at Argex's Salaberry-de-Valleyed plant
Major Distribu,on Agreement: HELM
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"We are extremely pleased to be able to secure an addiKonal supply of high quality Ktanium dioxide for our customers and add another milestone to the development of our distribuKon network in North America.
This is a very exciKng opportunity and we recognize the potenKal eect Argex's next generaKon process will have on the Ktanium dioxide industry.
- Philipp Mangold, president of HELM U.S. Corp.
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MILESTONES STATUS
Secure industrial plant loca,on Completed H1 2013
Lead-user agreements Completed H1 2013
Feasibility-stage study Completed H2 2013
TSX lis,ng Completed H2 2013
Migra,on of Pilot Plant and R&D Centre to Valleyeld, QC Completed H2 2013
PPG and Helm agreements Completed H2 2014
Engage EPC rm RFP Issued, Ongoing
Project nancing of rst industrial-sized module Ongoing
Con,nued process improvements Ongoing
Commence ordering equipment Ongoing
Environmental Approvals Ongoing
2013 2014 Milestones
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Pope & Company Euro Pacic Cantor Fitzgerald Cormark Byron Les Aaires Wall Street Journal Seeking Alpha Chris Berry
Mountain House
Thom Calendra BNN
News & Analyst Coverage
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Argex Senior Management
Roy Bonnell - President & CEO, Director, Co-Founder CFO, Vice President, Corporate Development and Corporate Secretary of Argex, 2007 to 2011. Managing Director, Atwater Financial, 2003-2010. M.Sc. Accoun,ng & Finance (London School of Economics), MBA (McGill), L.L.B. (Western), B.A. (Queens).
Glen Kayll CFO, Director Bachelor of Commerce (Carleton University), MBA (Simon Fraser University), CPA Over 20 years of corporate nance experience, including as CFO and senior nance and opera,ng roles with
Canadian and US public companies listed on both the TSX and NASDAQ exchanges, including a S&P500 component company.
Richard Poulin Execu,ve Vice President Bachelor of Applied Sciences, Mechanical Engineering from Laval University, Member of the Ordre des ingnieurs du Qubec (Quebec order of professional engineers) since 1985. Over 25 years of pan-Canadian and interna,onal experience successfully overseeing the planning, execu,on and
implementa,on of major engineering, construc,on, and industrial and manufacturing projects.
Enrico Di Cesare - COO, VP Technology Metallurgy, opera,ons, know-how transfer, and management; Severstal, Danieli, Sammi Atlas Steel, Hoogovens/
Corus/Hatch. Metallurgical Engineer from McGill University. Philippe Guillemaille - Manager, Sales & Marke,ng Regional Business Manager, Europe & Africa for Kronos, a leading TiO2 producer company, from 1998-2011. Graduate from the University of Chemistry of Lyon.
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Board of Directors
Robert Guilbault - Chairman of the Board of Directors Former President and CEO of Aluminerie AlloueUe Inc., Sept-les, Quebec. General Manager of BHP Billitons Hillside Aluminum at Richards Bay, South Africa. Has worked in the mining produc,on eld for twenty years. Normand Bergeron - Director Execu,ve Counsellor at Samson Blair/DeloiUe & Touche since October 2011. Chief Execu,ve Ocer of Infrastructure Qubec from its crea,on in March 2010. Deputy Minister, Qubec Department of Natural Resources and Wildlife, from May 2005 to July 2009. Member of Hydro-Qubecs Board of Directors (2005-2009). Mazen Haddad - Director Former President of Township Capital Inc. Received a B.A. degree in Economics from Emory University of Atlanta, Georgia. Florian Rais Director Founder of Far Investments Inc. a private equity and corporate nance rm Partner at Tangent Venture, a private equity investment rm in London, England Director of Blue Wall Shipping Limited and China Motors Ltd. Received a BA and MBA from University of
Lausanne Business School
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$16 billion mature target market Patented TiO2 produc,on technology Signicant cost advantage leveraging plen,ful
raw material supply
Posi,oned as a low-cost, high-quality producer of ,tanium dioxide
Long term supply and technical collabora,on agreement with PPG Industries, worlds leading paint company
Distribu,on agreement with Helm, worlds 3rd largest chemical distributer
Pilot plant opera,onal at loca,on of future 50,000 tpa produc,on plant
Key Takeaways
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Roy Bonnell, President & CEO
Tel: +1 514-788-8923
Glen Kayll, CFO
Tel: +1 514-843-0141
Contact Us
CORPORATE HEADQUARTERS 630 Sherbrooke Street West, Suite 410 Montreal, Quebec H3A 1E4, Canada www.argex.ca
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Pigments for Cosmetics, Food & Pharmaceuticals
RGX 171: very high purity grade designed for food, cosmetics and pharmaceuticals applications.
Pigments for Plastics RGX 220: high durable grade designed for plastics applications like PVC, plastisols, polyolefins, masterbatches and advanced plastics.
Pigments for Coatings RGX 330: high durable grade designed for coatings applications like architectural (indoor and outdoor), industrial paints (water-bone and solvent) and consumer, coil coating, powder coatings.
Argexs TiO2 Product Range
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TiO2 Processes - Material Balance
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Argex Process
2 FeTiO3 + 3Cl2 + 2H2 2 TiO2 + 2 FeCl3 + 2 H2O
Chloride Process
2 FeTiO3 + 7 Cl2 + 6 C = 2 TiCl4 + 2 FeCl3 + 6 CO TiCl4 + O2 = TiO2 + 2 Cl2
1.2t ,tanium slag + 0.4t petcoke + 0.3t chlorine 1t TiO2 + 1.2t FeCl2 + 0.1 HCl + 0.25t metal chlorides
Sulfate Process
FeTiO3 + H2SO4 = TiO2 + FeSO4 + H2O 2.5t ilmenite + 3.5t H2S04 (100%) 1t TiO2 + 4t FeSO4.7H2O + 7t spent acid (21%)
SX Iron
SX Ti 2.5t ilmenite + 1.5t Cl2 + 0.04t hydrogen 1t TiO2 + 2.5t FeCl3 + 0.4t H2O
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Mineral Sand or Hard Rock
Natural Rutile (High Cost)
Argex Process
TiO2 Argex Pigment
Sulphate Process
TiO2 Sulphate Pigment
Smelting Process
Slag (>85% TiO2)
Synthetic Rutile
Chloride Process
TiO2 Chloride Pigment
40-54% TiO2 35-50% TiO2 55-65% TiO2
85-93% TiO2
15-50% TiO2
92-9
8% T
iO2
Ilmenite Concentrate (Low Cost)
Current Methods of TiO2 Produc,on
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