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TRANSCRIPT
Etango Uranium Project Enhancing Early Mover Advantage
1 December 2014
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Technical Disclosures and Forward-Looking Disclaimers This presentation should be read in conjunction with the release by Bannerman Resources Limited dated 10 April 2012 and entitled “Bannerman Reports Positive DFS Results and Milestone Agreement with Namibian State-Owned Mining Company”. All material assumptions detailed in this presentation and underpinning the production target and forecast financial information in the DFS continue to apply and have not materially changed.
Certain disclosures in this presentation, including management's assessment of Bannerman Resources Ltd’s plans and projects, constitute forward-looking statements that are subject to numerous risks, uncertainties and other factors relating to Bannerman’s operation as a mineral development company that may cause future results to differ materially from those expressed or implied in such forward-looking statements. The following are important factors that could cause the Company's actual results to differ materially from those expressed or implied by such forward looking statements: fluctuations in uranium prices and currency exchange rates; uncertainties relating to interpretation of drill results and the geology, continuity and grade of mineral deposits; uncertainty of estimates of capital and operating costs, recovery rates, production estimates and estimated economic return; general market conditions; the uncertainty of future profitability; and the uncertainty of access to additional capital. Full descriptions of these risks can be found in the Company’s various statutory reports, including its Annual Information Form available on the SEDAR website, sedar.com. Readers are cautioned not to place undue reliance on forward-looking statements. Bannerman Resources Ltd 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.
Mineral resources that are not ore reserves do not have demonstrated economic viability.
The information in this presentation relating to the Mineral Resources of the Etango Project is based on a resource estimate compiled or reviewed by Mr Brian Wolfe in April 2012. Mr Wolfe is a Member of the Australian Institute of Geoscientists. Mr Wolfe was employed by Coffey Mining as an independent consultant to the Company at the time of the studies and public release of results. As Mr Wolfe is now no longer employed by Coffey Mining, Coffey Mining has reviewed this presentation and consent to the inclusion, form and context of the relevant information herein as derived from the original reports for which Mr Wolfe’s consent has previously been given. Mr Wolfe has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity which is being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the JORC ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’ and a Qualified Person as defined by Canadian National Instrument 43-101.
The information in this presentation relating to the Ore Reserves of the Etango Project is based on information compiled or reviewed by Mr Harry Warries, a full time employee of Coffey Mining Pty Ltd. Mr Warries is a Fellow of The Australasian Institute of Mining and Metallurgy and has sufficient experience relevant to the style of mineralisation and types of deposits under consideration and to the activity which is being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”, and is an independent consultant to Bannerman and a Qualified Person as defined by Canadian National Instrument 43-101. Mr Warries consents, and provides corporate consent for Coffey Mining Pty Ltd, to the inclusion in this presentation of the matters based on his information in the form and context in which it appears.
The information in this report that relates to Mineral Resources or Ore Reserves was prepared and first disclosed under the 2004 JORC Code. It has not been updated since to comply with the 2012 JORC Code on the basis that the information has not materially changed since it was last reported. All material assumptions and technical parameters underpinning the estimates of mineral resources continue to apply and have not materially changed.
All material assumptions detailed in this presentation and underpinning the production target and forecast financial information in the DFS (as previously announced on 10 April 2012 and reported on 30 January 2014 in compliance with Listing Rule 5.16 and 5.17) continue to apply and have not materially changed.
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The Opportunity
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Very strong outlook for uranium price and uranium investments Nuclear growth primarily Asian and Middle East driven with China at the forefront. Progressive restart of Japanese reactor fleet imminent. Emissions reductions back on the global agenda, as evidenced by agreement between the USA
and China.
Globally significant uranium project which provides exceptional leverage to increasing uranium price Etango Project (80% BMN) is the seventh largest uranium project in the world, based on ore
reserves. Early mover advantage to be enhanced through heap leach demonstration program in 2015. Bannerman shares have repeatedly exhibited strong leverage to the uranium price.
Robust Project, Premier Jurisdiction, Relevant Experience, Balance Sheet Support Etango is development-ready and underpinned by a detailed Definitive Feasibility Study. Etango is located in Namibia, Southern Africa - a premier uranium mining jurisdiction. Board and management team with relevant experience & proven track record. Support of Resource Capital Funds as a significant strategic financial investor.
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Demand – Asian & Middle East Growth Driven
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Source: WNA November 2014
437 reactors operable in 30 countries,
70 under construction, 475 planned and proposed
China on track to increase nuclear capacity from currently
19 GWe to 58 GWe by 2020
India has recently reiterated its plan to increase nuclear capacity
14 fold to 63 GWe by 2032
Saudi Arabia proposes to build 16 reactors by 2030 & UAE currently
building 3 reactors.
# reactors
0
20
40
60
80
100
120
140
160
180
200
220
240
Proposed
Planned
Under Construction
Operable Reactors
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Looming Deficit in Supply – Demand Balance
RJL Global Uranium Supply-Demand Balance
Source: Raymond James Ltd., UxC, WNA, Company reports
150160170180190200210220230240250260270280290300
2012
A
2013
A
2014
E
2015
E
2016
E
2017
E
2018
E
2019
E
2020
E
2021
E
2022
E
2023
E
2024
E
2025
E
2026
E
2027
E
2028
E
2029
E
2030
E
Mlb
s/yr
U3O
8
RJL Total Supply RJL Total Demand
Falls into deficit in 2020E
Source: Raymond James Ltd For
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200
180
160
140
120
100
80
60
40
20
0 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
U.S. Utilities Non-U.S. Utilities
MM
lbs U
3O8
Uncovered Requirements – utilities typically contract 2 – 4 years out
Uncovered 2016 – 2017
equals 70Mlbs
Source: Dundee Capital Markets
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Uranium Spot & Term Contract Sales Increasing
050
100150200250300350
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014YTD
Mkt V
ol
(Mlb
s U
3O
8)
Spot Volume LT Volume
Source: Raymond James Ltd For
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Uranium Spot Price Bottomed
SPOT AND TERM PRICE SPREAD AT A 41-MONTH LOW
Source: Raymond James Ltd
$20
$30
$40
$50
$60
$70
$80
$90
Jun-2009
Oct-2009
Feb-2010
Jun-2010
Oct-2010
Feb-2011
Jun-2011
Oct-2011
Feb-2012
Jun-2012
Oct-2012
Feb-2013
Jun-2013
Oct-2013
Feb-2014
Jun-2014
Oct-2014
US$
/lb
UxC Spot Uranium (US$/lb) UxC Long-term Price (US$/lb)
Source: Raymond James Ltd
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Bannerman Highly Leveraged to the Uranium Price
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0%
100%
200%
300%
400%
500%
600%
75 80 85 90 95 100
Relative % change in pre-tax NPV against the U3O8 price
33% % ch
ange
in p
re-ta
x NPV
US$ U3O8 / lb
Period U3O8 Spot Price Movement
Bannerman Share Price Move
Apr 05 – Jun 07 +490 % +7,900 %
Jun 10 – Feb 11 +80 % +240 %
Historical Bannerman share price movement v U3O8 spot price
500%
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Completed Etango DFS & ESIA in 2012.
Granted environmental approvals in 2012.
6 – 9 Mlbs U3O8 annual production over 16 year mine life, with
opportunity to extend.
Straightforward geology, mineralogy & metallurgy.
Large scale open pit mining, dynamic acid heap leaching & solvent
extraction.
Heap leach demonstration program a natural progression in project de-
risking, financing and development process.
Etango Project in a Nutshell F
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Globally Significant Scale (uranium only projects)
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0
100
200
300
400
53
McAr
thur
Rive
r Ca
mec
o/Ar
eva
2004 JORC / NI 43-101 Compliant Ore Reserves (Mlbs U3O8) Hu
sab
CGNP
C
Ciga
r Lak
e Ca
mec
o/Ar
eva
Inka
i Ca
mec
o/Ka
zato
mpr
om
Lang
er H
einric
h Pa
ladin
Röss
ing
Rio
Tinto
Etan
go
Bann
erm
an
Valen
cia
Fors
ys
Dorn
od
ARMZ
Inka
i Sou
th
ARMZ
361 320
217
88 119
79
34
Source: Bannerman & Company Reports, Nov 2014 (Reflects 100% project reserve).
119 104
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Namibia – A Premier Uranium Mining Jurisdiction
Windhoek Swakopmund Walvis Bay
Ranked 2nd most attractive African investment jurisdiction in Fraser Institute Mining Company Survey
Political and social support of uranium mining
5th largest uranium producing country
Almost 40 years of uranium mining
Etango Uranium Project
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Favourable Location Relative to Infrastructure F
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Etango Site Layout
N
Licence boundary
5km
16 year mine life, underpinned by 119Mlbs P&P Reserve (194ppm U3O8); significant scope to grow reserve size
Annual production of 6-9 Mlbs U3O8
Capex of US$870 million, with an additional $US380M in sustainable CAPEX over the LOM
Opex (first 5 years) US$41/lb U3O8
Operating cashflow of US$2.7 billion before capital and tax, and free cashflow of US$923 million after capital and tax, at a uranium price of US$75/lb U3O8
Significant opportunities to optimize development strategy for enhanced returns
Robust DFS – Development Ready F
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Straightforward Open Pit Mining - Ore Reserve Estimate based on over 275km Drilling
YEAR 16
1km
6km
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Conventional Sulphuric Acid Heap Leaching
50 day on – off cycle
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Next Step – Heap Leach Demonstration Program
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Demonstrate design & projected
performance reflected in the DFS
Maintain & build project knowledge
Meaningful in-country activities
Pursue optimisation where appropriate
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Heap Leach Demonstration Plant Layout
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Agglomerator
ILS & PLS
Cribs
Reagent mixing
area
Fresh water
Silent generators Workshop &
on-site laboratory
Evaporation Ponds
Crushed Material
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Construction due for completion in early 2015
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Development Strategy
1. Further reduce financing risk through conducting heap leach demonstration program.
2. Update the definitive feasibility study taking into consideration the current cost environment, greater understanding gained from the study review underway and the future results from the heap leach demonstration program.
3. Engage with interested parties with regards to entering into a development partnership .
4. Progress project financing arrangements.
Position Bannerman to fast track the Etango project in a favourable uranium market
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Etango – DFS Pre-Production Capital Cost
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DFS Pre-Production Capital Cost Estimate (April 2012) US$ million
Mining – fleet, establishment & pre-stripping 127
Process plant 354
Site infrastructure 91
External infrastructure (power, water, rail, road and port) 47
EPCM costs 72
Accuracy provision 54
First fills and spares 29 Owner’s costs (personnel, housing, training, insurance etc)
40
Other (camp facilities, mobilisation and demobilisation and temporary services)
56
Total pre-production capital expenditure 870
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DFS Cash Operating Cost Estimate (April 2012)
First 5 Years
Life-of-Mine
Mining:
- US$/tonne mined
- US$/tonne ore
1.72
7.87
1.97
8.55
Processing (US$/tonne ore):
Consumables, labour, maintenance & other 3.37 3.41
Sulphuric acid 1.78 1.79
Power 1.29 1.31
Water 0.64 0.65
7.08 7.15
General & administration ( US$/tonne ore): 1.26 1.23
Total cash operating costs (US$/tonne ore) 16.21 16.93
Total cash operating costs (US$/lb U3O8
produced)
40.85 45.71
Etango – DFS Cash Operating Cost
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Corporate Snapshot as 26 November 2014
Share price A$0.079
Shares - currently on issue ~334m
Shares - fully diluted (for options, rights, convertible notes, Savanna settlement) ~486m
Market capitalisation (undiluted) ~A$26m
Top 20 shareholders ~60 %
Cash on hand (as at 30 Sept 2014) A$4.7m
A$8m convertible note held by RCF Fund IV & A$4m convertible note held by RCF Fund VI. Key terms - interest rate 8% pa; conversion at A$0.095/share; expiry 30/9/2016
Etango Project ownership: BMN 80% | Clive Jones 20% (free carried until the project is financed)
Major Shareholders: RCF 15.8% | Global X 7.5% | Clive Jones 4.6% | Regent Pacific 3.3% | New City Investments 3.3%
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$25
$30
$35
$40
$45
$50
A$0.03
A$0.06
A$0.09
A$0.12
A$0.15
Nov-13
Dec-13
Jan-14
Feb-14
Mar-14
Apr-14
May-14
Jun-14
Jul-14
Aug-14
Sep-14
Oct-14
Uranium
Spot Price $US/lb U
3 O8
ASX
: BM
N S
hare
Pric
e ($
A)
Share Price v Uranium Spot Price
BMN Share Price (LHS)
U3O8 UxC Spot Price (RHS)
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Ronnie Beevor NE CHAIR • Finance & Accounting • Formerly Head of Investment
Banking at Rothschild Australia • Experience includes Oxiana,
EMED Mining, Wolf Minerals
Clive Jones NED • Exploration & Business
Development • Original vendor of Etango Project • Over 25 years in numerous
Australian exploration & development companies
Ian Burvill NED • Finance & Equity Markets • Senior Vice President of
Resource Capital Funds • Ex-Rothschild US & Australia • Over 28 years in mining
industry
David Tucker NED • Key Stakeholder Relations &
Corporate Affairs • Former Director of Corporate
Affairs for Homestake and Barrick Gold in Australia.
• Over 40 years in mining industry
Len Jubber MD & CEO • Operations,
Development & Executive Management
• Previously MD & CEO Perilya Limited
• Over 27 years in mining industry
Board of Directors
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Robert Dalton • Financial Controller &
Company Secretary • Over 13 years experience in
auditing, accounting & secretarial roles mostly interacting with the resources industry
Werner Ewald • GM Namibia • 22 years with Rio Tinto
incl 20 years in operational and technical roles at Rossing Uranium in Namibia
John Turney • Project Advisor • Lead completion of
Etango DFS. • 35 years operations &
development experience with Homestake & Barrick
Management Team
Len Jubber • MD & CEO • Operations, Development &
Executive Management • Previously MD & CEO Perilya
Limited • Over 27 years in mining
industry, incl 8 years at Rossing Uranium in Namibia
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www.bannermanresources.com Scale, Simplicity, Substance
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