Developing Chile’s next lithium mine Fully funded to final investment decision
February, 2018 Important notice and disclaimer
This investor presentation has been prepared by Lithium Power International Limited (LPI or Company) and contains summary Investment risk information about LPI and its activities as of 9 October 2017. An investment in LPI shares is subject to investment and other known and unknown risks, some of which are beyond the control of the Company. LPI does not guarantee any particular rate of return or the performance of the LPI shares. Representations No person is authorised to give any information or to make any representation in connection with Lithium Power International Limited Disclaimer (LPI or Company)) which is not contained in this presentation. This presentation may contain some references to forecasts, estimates, assumptions and other forward-looking statements. Although the company believes that its expectations, estimates and forecast outcomes are based on reasonable assumptions, it can give no Any information or representation not so contained may not be relied on as having been authorised by the Company. assurance that they will be achieved. They may be affected by a variety of variables and changes in underlying assumptions that are Not a disclosure document subject to risk factors associated with the nature of the business, which could cause actual results to differ materially from those expressed herein. All references to dollars ($) and cents in this presentation are to Australian currency, unless otherwise stated. This presentation does not contain the information that would be contained in a prospectus or other disclosure document prepared Investors should make and rely upon their own enquires and assessments before deciding to acquire or deal in the Company’s under the Corporations Act and does not purport to contain all the information that may be necessary or desirable to enable a potential securities. investor to properly evaluate and consider an investment in the Company. Competent Person’s Statement Presentation is not advice The information contained in this presentation relating to Mineral Resources has been compiled by Mr Murray Brooker. Mr Brooker is a The provision of this presentation is not and should not be taken as a recommendation in relation to an investment in the Company or Geologist and Hydrogeologist and is a Member of the Australian Institute of Geoscientists and has sufficient relevant experience to qualify as a competent person as defined in the 2012 edition of the Australasian Code for Reporting of Exploration Results, Mineral that an investment in the Company is a suitable investment for the recipient of this presentation. This presentation does not purport to Resources and Ore Reserves. He is also a “Qualified Person” as defined by Canadian Securities Administrators’ National Instrument constitute any advice whatsoever, but to the extent it does, it constitutes only general advice (within the meaning of section 766B(4) of 43-101. Murray Brooker consents to the inclusion in this announcement of this information in the form and context in which it appears. the Corporations Act) and does not take into account your individual investment objectives, financial situation or particular needs. It The Company confirms that it is not aware of any new information or data that materially affects the information included in the original does not contain personal advice. The Company recommends prospective investors seek independent financial and taxation advice market announcement. The Company confirms that the form and context in which the Competent Person’s findings are presented before making a decision as to whether or not to apply for shares. have not been materially modified from the original market announcement. Prospective investor to conduct own investigation and analysis Reference to Resource Estimate Prospective investors should carry out their own independent investigations and analysis of the Company and the information referred The reader is referred to the announcement by LPI on the 12 July 2017, which provided details of the updated Maricunga project to in this presentation and other matters that may be relevant to it in considering whether to acquire the shares. Each prospective resource in accordance with Appendix 5A (JORC Code). LPI confirms that the supporting information provided in the announcement investor considering an investment in the shares must make, and will be taken to have made, its own independent investigation and by LPI on the 12 July 2017 continues to apply and has not materially changed. The announcement of 12 July 2017 also outlines an exploration target for the Maricunga project. It must be stressed that an exploration target is not a mineral resource or reserve. The analysis of the information provided in this presentation. Independent expert advice (including from a prospective investor’s potential quantity and grade of the exploration target is conceptual in nature, and there has been insufficient exploration to define a accountant, lawyer or other professional adviser) should be sought before making a decision to invest in the Company. Mineral Resource in the volume where the Exploration Target is outlined. It is uncertain if further exploration drilling will result in the No responsibility for contents of presentation determination of a Mineral Resource in this volume. The exploration target is where, based on the available geological evidence, there is the possibility of defining a mineral resource. The timing of any drilling with the objective of defining resources in the exploration To the maximum extent permitted by law, no representation, warranty or undertaking, express or implied, is made and, to the target area has not been decided at this stage. In keeping with Clause 18 of the JORC Code and CIM requirements the exploration maximum extent permitted by law, no responsibility or liability is accepted by the Company and its advisers or any of their officers, target defined at Maricunga is based on a range of values, which represent the potential geological conditions. Values have been employees, agents or advisers or any other person as to the adequacy, accuracy, completeness or reasonableness of the information selected to present an upper and a lower exploration target size. It is likely that the lithium and potassium contained in the exploration contained in this presentation. To the maximum extent permitted by law, no responsibility for any errors or omissions whether arising target lies somewhere between the Upper and Lower Cases. The resource refers to lithium carbonate equivalent (LCE), using a out of negligence or otherwise is accepted. conversion factor of 5.32 x lithium metal, and potassium chloride (KCl) using a conversion factor of 1.91 x potassium. A technical report to support the mineral resource estimate entitled “Lithium & Potassium Resource Estimate Maricunga Joint Venture, III Region, Past performance Chile, and dated 25 August 2017 may be accessed via this link. Past performance information, including past share price performance, should not be relied upon as an indication of future Cautionary note regarding reserves and resources performance. You should be aware that as an Australian company with securities listed on the ASX, the Company is required to report reserves and Projections and forecasts may not be accurate resources in Australia in accordance with the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves ("JORC Code"). You should note that while the Company's reserve and resource estimates may comply with the JORC The provision of this presentation may contain forward looking statements, which are based on subjective estimates and assumptions Code, they may not comply with the relevant guidelines in other countries and, in particular, do not comply with Industry Guide 7, and about circumstances and events that have not yet taken place. Such estimates and assumptions involve significant elements of which governs disclosures of mineral reserves in registration statements filed with the U.S. Securities and Exchange Commission. The subjective judgement and analysis, which may or may not be correct. Accordingly, no representations are made by the Company, its JORC Code differs in several significant respects from Industry Guide 7. In particular, Industry Guide 7 does not recognise related parties, consultants or advisers as to the accuracy of such information and there can be no assurance that any projected result classifications other than proven and probable reserves and, as a result, the SEC generally does not permit mining companies to would be achieved. disclose their mineral resources in SEC filings. Information contained in this presentation describing the Company's mineral deposits may not be comparable to similar information made public by U.S. companies subject to the reporting and disclosure requirements of United States securities laws. You should not assume that quantities reported as “resources” will be converted to reserves under the JORC Code or any other reporting regime or that the Company will be able to legally and economically extract them.
Lithium Power International Limited ASX: LPI 2 Lithium Power: board and technical team Lithium Power - Board and Technical Team
Lithium Power International Limited ASX: LPI 3 Management and technical committee
Lithium Power International Limited ASX: LPI 4 Chile’s next low-cost lithium producer
MARICUNGA RESOURCE Capital Structure 2.15mt LCE1 ASX Code LPI 5.7mt KCl2 Shares on Issue 260.7 M Share price1 A$0.465 HGH GRADE Market Capitalisation A$121 M 1,160mg/l Li Cash2 @ bank - LPI Circa AU$24.4 M 8,500mg/l K - Chilean JV Circa US$9.7 M Listed Options exercise price – 55 cps3 34.6 M (A$19M) DFS (WorleyParsons) Unlisted Options exercise price – 25 cps4 (average) 35.3 M (A$8.8M)
Targeted Release – Q3 2018 1 Closing share price as at close February 20th, 2018 2 Following final earn-in payment of US$7.53M to Chilean JV made by the end of Feb18 3 LPIOA expiry July 6th, 2019 1 Lithium Carbonate Equivalent 4 Majority of Unlisted options expiry June23rd, 2021 (majority held by founders) 2 Potassium Chloride
Research Coverage Substantial Shareholders (As at February 15th, 2018) Canaccord Genuity Reg Spencer FOUNDERS & DIRECTORS 20.5% CHILEAN JOINT VENTURE PARNTER 5.5% Hallgarten & Company Christopher Ecclestone YARANDI INVESTMENTS PTY LTD 2.3% G HARVEY NOMINEES PTY LTD 2.2% TSI Adam Kelly J P MORGAN NOMINEES AUSTRALIA LIMITED 2.2% MORGAN STANLEY AUSTRALIA SECURITIES (NOMINEE) 2.0% HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED 2.0%
Lithium Power International Limited ASX: LPI 5 100 MT lithium needed by 2040
Sources: ACEA; AFDC; Bernstein; BP; EPA; IEA; OICA and Economist.com
Lithium Power International Limited ASX: LPI 6
Benchmarking: Opportunity for significant market cap growth
Source: BMO - Company filings, FactSet
Lithium Power International Limited ASX: LPI 7
A year of transformation: 2017 in review
Salar de Maricunga Vista
Source: BMO Market Capitals
Lithium Power International Limited ASX: LPI 8 Fully funded to final investment decision
Lithium Power International Limited ASX: LPI 9 Investment agreement completed
17.7%
Lithium Power International Limited ASX: LPI 10 Lithium Power: a compelling investment opportunity
Located within the “Lithium Triangle” in northern Chile, home to the largest and highest quality lithium brine deposits. LPI’s Maricunga project is the highest quality pre-production lithium brine project in South America in terms of lithium grade, size and aquifer characteristics. Most advanced project in Chile outside of the mine expansions by SQM and Albemarle. The properties are 100% owned by the JV and not subject to leasehold related negotiations impacting other Chilean operators. 2017 JORC and Ni43-101 Resource Estimate • 2.15 Mt LCE & 5.7 Mt KCl • One of the worlds highest grade lithium brine resources at 1,160 mg/l lithium and; 8,500 mg/l potassium • 80% Measured & Indicated: 1.7 Mt LCE and 4.5 Mt KCl • 20% Inferred: 0.45 Mt LCE and 1.2 Mt KCl • Exploration target upper case scenario 2.5 Mt LCE Preliminary Economic Assessment (“PEA”) by WorleyParsons completed in Dec 2017 indicates Maricunga to be a low-cost lithium producer with short payback and a long mine life. Definitive feasibility study targeted by end of 3Q18. Test work has produced the first battery grade Li2CO3 sample, meeting commercial high quality specifications Optimization of lithium extraction and potassium production to develop the lowest cost process with highest possible recoveries. Port and logistics assessment fully completed. All permitting and government approvals targeted 2Q19
Lithium Power International Limited ASX: LPI 11 Maricunga: a globally significant lithium resource
MARICUNGA RESOURCE 2.15 Mt LCE1 5.7 Mt KCl2
HGH GRADE 1,160mg/l Li 8,500mg/l K
Source: Albemarle investor presentation modified by LPI
Lithium Power International Limited ASX: LPI 12 The world’s second-highest lithium grades
Extensive Sonic and RC drilling results averaged 1,160 mg/l Li and 8,500 mg/l K 360m Deeper drilling a “game changer” for expanding resource Deep hole S19 intersected a 336m interval at 975mg/l Li and 7,273mg/l K and remains open at depth
Hole Depth (m) Interval (m) Li (mg/I) K (mg/l) M10 200 40 1239 8611 M1 77 66 1,447 9,903 M2 198 190 931 6,605 S5 200 186 1,005 6,934 S3 200 186 1,040 7,708 S13 200 186 999 7,294 S6 200 186 1,368 9,498 M1A 200 192 822 6,104 S2 200 192 954 6,580 S18 173 168 1,382 11,041 S19 360 336 975 7,273 S20 40 N/A N/A N/A
Lithium Power International Limited ASX: LPI 13 Geological model: high-quality aquifers
Upper Halite (salt) +/- Clay Intervals Western and Lower Alluvium Extending from surface and up to 55m in thickness; Well-sorted gravel and sandy gravel in the north hosts the highest brine grades and west of the project grading to sand further into Clay Core the salar; high drainable porosity Up to ~170m deep and dominant unit in the 2012 resource estimate. Drilling below discovered “game Upper and Lower Volcaniclastic changing” sand and gravel units High drainable porosity and volumetrically extensive; separated by a sand unit with the lower volcaniclastic extending to at least 360m depth. Host to Exploration Target immediately below Mineral Resource
Western Alluvium Volcaniclastic
Lithium Power International Limited ASX: LPI 14 High drainable porosity and permeability
Halite, gravel, sand and volcaniclastic sediments Geological Model Drainable Porosity have excellent drainable porosity and permeability Upper Halite 6.5% characteristics Clay Core 2.2% Deep Halite 5.3% Deep well (P4) flowed at an average rate of 25 l/s and average grade of 945mg/l Li and 6,924mg/l K Alluvial NW 14.8% from the gravel and volcaniclastic sediments over Lower Alluvial 6.3% a 30 day test period Lower Sand 6.0% The upper halite in well P2 flowed at 45 l/s, with Upper Volcaniclastic 10.3% average grade of 1,140mg/l Li and 8,322mg/l K Lower Volcaniclastic 10.3% over a 7 day test period Average dranable porosity values from laboratory test work Pumping confirms the high flow rate P4 well P4 outflow characteristics of the sediments, which have a high permeability and allows pumping at a high flow rate: very positive for long term brine extraction from the salar Flow rates are comparable to those of major lithium brine producers
Lithium Power International Limited ASX: LPI 15 2017 JORC and NI43-101 mineral resource estimate and exploration target
MARICUNGA RESOURCE ESTIMATE Measured Indicated Inferred M&I Total Resource Area km2 18.88 6.76 14.381 25.64 25.64 Aquifer volume km3 3.06 1.35 0.72 4.41 5.13 Brine volume km3 0.15 0.14 0.06 0.30 0.36 Mean drainable porosity % (Specific yield) 5.02 10.65 8.99 6.75 7.06 Element Li K Li K Li K Li K Li K Mean grade g/m3 of aquifer 56 409 114 801 114 869 74 529 79 577 Mean concentration mg/l 1,174 8,646 1,071 7,491 1,289 9,859 1,143 8,292 1,163 8,512 Resource tonnes 170,000 1,250,000 155,000 1,100,000 80,000 630,000 325,000 2,235,000 405,000 2,980,000 Lithium Carbonate Equivalent tonnes 900,000 820,000 430,000 1,720,000 2,150,000 Potassium Chloride tonnes 2,400,000 2,100,000 1,200,000 4,500,000 5,700,000
Lithium is converted to lithium carbonate (Li2CO3) with a conversion factor of 5.32. Values may not add due to rounding. No cut-off grade is applied in the resource. Potassium is converted to potassium chloride (KCl) with a conversion factor of 1.91; 1 Inferred underlies the Measured in the Litio properties
MARICUNGA EXPLORATION TARGET ESTIMATE Subarea Area km2 Thickness Mean drainable Brine volume Li Concentration Contained Li LCE tonnes K Concentration Contained K KCl m porosity % million m3 mg/l tonnes mg/l tonnes tonnes UPPER RANGE SCENARIO Western 4.23 100 10% 42.3 1,000 40,000 200,000 6,500 270,000 500,000 Central 21.41 200 10% 428.0 1,000 430,000 2,300,000 7,500 3,200,000 6,100,000 Continues from directly below the resource 470,000 2,500,000 3,470,000 6,600,000 LOWER RANGE SCENARIO Western 4.23 100 6% 25.4 600 15,000 80,000 5,000 130,000 240,000 Central 21.41 200 6% 257.0 700 180,000 950,000 5,500 1,400,000 2,700,000 Continues from directly below the resource 195,000 1,030,000 1,530,000 2,940,000
Lithium is converted to lithium carbonate (Li2CO3) with a conversion factor of 5.32. Values may not add due to rounding. Potassium is converted to potassium chloride (KCl) with a conversion factor of 1.91
Lithium Power International Limited ASX: LPI 16 PEA highlights: outstanding economics
Production ● 20,000 t/a LCE & 74,000 t/a KCl over 20 years. NPV (8%) ● US$1.049B before tax. Ungeared IRR ● 23.4% Payback ● <3 years based on 2-year ramp up. Project Operating Cost ● US$2,938/t reducing to US$2,635/t with KCl by- product credits. ESTIMATED LOW OPERATING COST Project Development Cost ● US$366M (LPI’s 50% share US$183M; excludes PLACES KCl (US$23M), indirect costs (US$55M) and (US$83M) contingency. MARICUNGA Project utilizes conventional evaporation pond and process technology to AMONG THE MOST minimise operational risks. EFFICIENT LITHIUM PRODUCERS PEA completed by WorleyParsons to international standards with a +/- 25% GLOBALLY study accuracy: Technical Report 14-Dec-2017. Definitive Feasibility Study ● Target 3Q18 will provide improved certainty on regarding production quota, reserves, metallurgical design, equipment and operational risks
Lithium Power International Limited ASX: LPI 17 CAPEX and OPEX
Projected Budget Li2CO3 KCL Total Capital Cost Operating Cost $USM US$/tonne US$/tonne $USM Direct Costs Direct Costs Brine Extraction Wells 25.6 Chemical Reagents 925 17 19.8 Evaporation Ponds 134.1 Salt Harvest & Transport 93 1 1.9 Lithium Carbonate Plant 107.3 Energy 860 17 18.4 General Services 29.9 Manpower 353 19 8.5 Infrastructure 69.1 Catering & Camp Services 84 4 2.0 Total Direct Costs (without KCL) 366.0 Maintenance 288 9 6.4 KCL Plant 23.4 Transport 207 76 9.8 Total Indirect Costs (14.2%) 55.2 Total Direct Costs 2,809 143 66.8 Contingencies (18.6%) 82.7 Indirect Costs Total Projected Budget 527.3 General & Administration 129 2 2.7 Total Indirect Costs 129 2 2.7 Capital and operating cost are estimated with a +/- 25% study accuracy. Total Operating Cost 2,938 145 69.5 Operating cost does not include cost reduction due to KCL production. On a 100% basis for the project, LPI’s share is US$183M + additional costs
Lithium Power International Limited ASX: LPI 18 Timeline for growth catalysts: 2018 to 2020
Lithium Power International Limited ASX: LPI 19 Unrivalled project quality
Tier-1 companies undertaking project studies for low risk development Feasibility in progress: heading to definitive feasibility study High quality brine resource Use of traditional and well proven production process Working with Tier 1 equipment suppliers/pilot plant: • Engineering: WorleyParsons • Production: Veolia, GEA, Andritz, FLSmidth, SGS
Lithium Power International Limited ASX: LPI 20 Major milestone: first lithium carbonate production
Highly experienced process company GEA has produced the first sample of lithium carbonate from the Maricunga brine The sample has a purity of 99.4% lithium carbonate, consistent with battery grade Lithium Carbonate production such as by Albemarle and SQM in Chile The Maricunga project is one of less than half a dozen pre-production brine projects with lithium carbonate samples produced, with the highest lithium brine grade of these projects Production of lithium carbonate samples leaves LPI well positioned for discussions with potential off-take partners and financiers
Lithium Power International Limited ASX: LPI 21 Excellent infrastructure: overview
Infrastructure required for lithium production at Maricunga consists of: Evaporation ponds Process Plant Installation of wellfield and pipelines to the evaporation ponds Electricity supply and transmission lines Water supply and water treatment Roads of sufficient quality to transport construction equipment, chemical consumables for production and lithium carbonate product Port selection for importation and exportation
Road to the Salar Powerlines Electrical Towers – Copiapó
Lithium Power International Limited ASX: LPI 22 Processing plants and evaporation pond site design
Ponds to be built off the salar to the north to: • Allow easier construction in areas of gravel • To minimise the visual impact of the ponds.
Lithium Power International Limited ASX: LPI 23 Port and logistic assessment completed
Lithium Power International Limited ASX: LPI 24 Permitting update: natural course of business
Environmental impact assessment (EIA): • Environmental baseline completed, EIA ready for submission 1Q18 • Social aspects of the project advancing, with indigenous groups and local municipalities Nuclear Commission permit (CCHEN): • Application submitted, permit required to export lithium Special Lithium Operation Contract (CEOL): • Permits related to the exploitation of new coded mining concessions (new framework to be outlined 2Q18)
Lithium Power International Limited ASX: LPI 25 Wrap-up
High-grade lithium project in a stable mining jurisdiction : Chile
We expect feasibility study will confirm near term production at very low cost
Solid team involved in building mega mining projects
Shareholder alignment: Management owns 20+% Fully funded to final investment decision
Potential to generate additional value from… • Mineral Resources conversion to reserves • Continued de-risking of the project • Securing strategic offtake partners
Lithium Power International Limited ASX: LPI 26
Appendix New Chile center-right President elect
The mining sector plays an enormous and important role Reuters - Billionaire conservative Sebastian Pinera in Chile’s economy, accounting for about 10% of GDP will begin a second term as Chile’s president in March with a strong mandate local markets soared and about 50% of Chilean exports. on hopes of more investor-friendly policies. Following the election of centre-right president Sebastián Piñera, plans to invest US$20bn over eight years into public-private infrastructure projects. Together with a modest recovery in commodity prices, low inflation and Tesla could agree to build a processing plant in Chile low interest rates, these factors could provide a positive to produce the high-quality lithium it needs for its outlook for growth in 2018. batteries, according to the report, citing the executive VP of Chile's Corfo development agency. Chile is the world’s #1 lithium producer, with 36% of current world market share. Chile currently holds the largest known economically extractable reserves of lithium in the world in the Salar de Atacama. Bloomberg: Global miner Rio Tinto is said to be once again chasing a $5bn stake in Chile’s Chemical and Mining Society (SQM), the world's largest lithium producer.
Lithium Power International Limited ASX: LPI 28
Market-friendly Chile is an investment leader in South America
Lithium Resources (M tonnes), January 2017
Argentina Bolivia Chile China US Aus Can Other 9.0 9.0 7.5 7.0 6.9 2 2 3.6
Market-friendly Chile is an Investment Leader in South America
Lithium Foreign direct Ease of doing Corruption Production investment business index perceptions Index 2016, tonnes LCE Net inflows, 2015, 2016 2016 as % of GDP <1=best 190=worst> <1=best 176=worst> Argentina 30,050 2.0 116 95 Bolivia 25 (sales only) 1.5 149 113 Chile 76,000 8.5 57 24 Australia 74,250 2.9 15 13
Sources: US Geological Survey; Roskill Information Services; Comibol; World Bank; Transparency International; economist.com
Lithium Power International Limited ASX: LPI 29 Process optimisation
Process flow sheet defined First battery grade lithium carbonate sample produced by GEA in February 2018 Tier-1 process companies GEA and Veolia are working to optimise the production process for lithium carbonate Experienced process equipment suppliers Andritz and FLSmidth optimising potash production These companies are global equipment suppliers to the chemical and water industries, with extensive experience with lithium and potash production The process uses evaporation and standard processing technology, to reduce project risk
Lithium Power International Limited ASX: LPI 30 Process overview
Brine is processed by conventional evaporation pond methodology, concentrating brine before extraction of lithium carbonate in a dedicated production plant Salt removal plant at front of lithium carbonate plant removes Ca as saleable by product and gypsum as a waste product Potassium chloride (KCl) fertilizer production will be a secondary product through a KCL plant, commencing three years after lithium carbonate production
Lithium Power International Limited ASX: LPI 31 Lithium carbonate and potassium chloride flowsheet
Brine from well Evaporation Ponds stockpileHalite Stockpile
EvaporationEvaporation Ponds Ponds Silvinite Stockpile Maricunga brine has a
EvaporationEvaporation Ponds Ponds Carnallite Stockpile moderate Mg/Li ratio of 6.5
Oversize (comparable to the Atacama Ca Removal Removal Crusher Crusher CrusherCrusher Cl/Mg/Ca Salts salar) with a low SO4/Li ratio Process H2SO4 Processing Mill pHpH Regulation Regulation water 1 & 2 of 0.8 and a relatively high Na2SO4 to final deposition CaSO4 Tail Scavenger Tail Ca/Li ratio of ~12 with Ca FiltrationFiltration Tail Rougher Flotation Screening NaCl Flotation Organic Solution concentrate Oversize removal necessary for Boron Salts to final Concentrate Undersize Solvent Cleaner Flotation HCl Stripping Deposition, brine to Concentrate Screening lithium production Extraction Evaporation ponds concentrate Undersize
NaOH Leaching Clarified Boron salts are removed by Process Clarifier Brine Recovery Mother liquor Primary Mg and water solvent extraction Ca reduction Solids Thickened Filtration Filtration Thickener Filtration to final deposition (MgCO3) Liquid Mother liquor is recirculated
Brine Storage Filtration Secondary Mg & Drying with lime slurry and soda ash Ca(OH)2 Ca Reduction Na2CO3 for secondary removal of Mg to final deposition Final product stockpile- Salts to final
Filtration CaCO3 – Mg(OH)2 – MgCO3 (Potassium Chloride KCI) disposition and Ca
Carbonation Brine recovery to process and ponds Soda ash is added to create Thickener lithium carbonate
Filtration Water for various uses in process Filtration, washing,
Washing Water Centrifuge Washing water centrifuging, drying and micronizing of lithium Drying Vapour to the atmosphere carbonate produces final Milling & Packaging sale product
Final Product Lithium Carbonate (Li2CO2) warehouse
Lithium Power International Limited ASX: LPI 32
Final product Lithium Carbonate(Li 2 CO 3 ) warehouse Preliminary general plant layout
Lithium Power International Limited ASX: LPI 33 Available power supply
Accessible 23KV existing power line passes by the Maricunga project area.
Lithium Power International Limited ASX: LPI 34 Hydrogeological model: the basis of reserves
The hydrogeological model is the next step towards defining reserves from the resource32.3% The JV is planning to produce 20 kt/a of lithium carbonate, which will require extraction of an average of 218 l/s of brine from the salar Brine will be extracted from both the upper and lower aquifers The aim is to optimise the location of wells for brine extraction The hydrogeological model is based on the geological model, the water balance for the salar and integration of all the field and laboratory data into a conceptual model The geological model is used to build the 3 Dimensional hydrogeological model, which is used to simulate pumping over the life of the mine Modelling defines how much brine can be extracted from the resource and converted to reserves Modelling also simulates potential long term dilution of brine grades as pumping progresses and fresher water may migrate into the salar from the margins
Lithium Power International Limited ASX: LPI 35
Hydrogeological model: assessing environmental impacts
Modelling also determines the environmental impact of pumping and the model results are the most critical input to the project EIA Modelling is being done by international consultants DHI Group (using Feflow software), working with project hydrogeologists FloSolutions Oversight of the modelling is provided by Dr Carlos Espinosa, an external consultant with strong links to the government water resources department Modelling will assess potential effects on environmentally sensitive areas such as wetlands (Santa Rosa Lagoon ~20 km south) outside the JV properties Possible effects of pumping on third party properties and water rights will also be assessed
Lithium Power International Limited ASX: LPI 36
Working to ensure a sustainable future
Connecting Local hiring practices with our Spending on supplies and services in country Community Building strong community relationships
Focused on behavior-based culture for risk management at employee and Developing a supervisor levels Strong Safety Implementing a comprehensive safety management system, including: Culture • Full training for all employees • Consistent communication with all employees • Engagement and accountability
Ongoing Focused on sustainable mine development Environmental Ongoing reclamation and recycling program Protection
Lithium Power International Limited ASX: LPI 37 Lithium market outlook
Projected strong growth in lithium demand Use in automobile applications projected to grow 530% by 2030 Roskill Lithium Industry Consultants suggests 1TWh installed capacity and 1mt LCE demand possible within 10 years China issues new mandates for electric vehicle sales Germany and India announce aggressive targets for electric vehicle sales Car makers lay out strategies to meet these targets Development projects needed to meet future demand growth are limited New supply coming on stream slowly due to permitting and construction constraints Source: Roskill 2017 Montreal Lithium conference presentation
Lithium Power International Limited ASX: LPI 38 Incremental commodity demand in a 100% EV World
Lithium Power International Limited ASX: LPI 39 Material differences in EVs will have a big impact on demand
STEEL NICKEL Batteries are heavy, so Used in both NCA and aluminium must be NMC cathodes, the >$20 substituted for steel billion nickel market where possible would more than double
PGMs Used to reduce emissions in LITHIUM/COBALT gas powered vehicles, PGMs In a 100% EV world, these metals are could be the biggest casualty essential. Better supply chains will be of mainstream EV adoption necessary, as well.
Source: UBS Evidence Lab
Lithium Power International Limited ASX: LPI 40 Global lithium demand: 2015–2025
Lithium Demand by Application – 2015 Lithium Demand by Application – 2025, LCE Basis
Source: Deutsche Bank, 2016
Lithium Power International Limited ASX: LPI 41 Mega-trends driving lithium growth
Lithium Power International Limited ASX: LPI 42 Kalgoorlie Boorara Gold
ASX: MRP CUTTING EDGE 6th March 2018
1 1 Disclaimer
The information contained in this presentation has been prepared by MacPhersons Resources Ltd (MRP). This presentation is not an offer, invitation, solicitation or other recommendation with respect to the subscription for, purchase or sale of any securities in MRP. This presentation has been made available for information purposes only and does not constitute a prospectus, short form prospectus, profile statement or offer information statement. This presentation is not subject to the disclosure requirements affecting disclosure documents under Chapter 6D of the Corporations Act.
While the information contained in this presentation has been prepared in good faith, neither MRP nor any of its directors, officers, employees, agents or advisors give any representation or warranty, express or implied, as to the fairness, accuracy, completeness or correctness of the information, opinions and conclusions contained in this presentation. Accordingly, to the maximum extent permitted by law, none of MRP, its directors, officers, employees, agents, advisers, nor any other person accepts any liability whether direct or indirect, express or limited, contractual, tortuous, statutory or otherwise, in respect of the accuracy or completeness of the information or for any of the opinions contained in this presentation or for any errors, omissions or misstatements or for any loss, howsoever arising, from the use of this presentation.
Forward looking Statements
This presentation may contain statements that may be deemed ‘forward looking statements’. Forward risks, uncertainties and other factors, many of which are outside the control of MRP, can cause actual results to differ materially from such statements. Such risks and uncertainties include, but are not limited to, commodity price volatility, increased production costs and variances in ore grade recovery rates from those assumed in mining plans, as well as political and operational risks and governmental regulation and judicial outcomes. MRP makes no undertaking to update or revise such statements, but has made every endeavour to ensure that they are fair and reasonable at the time of making the presentation.
Investors are cautioned that any forward looking statements are not guarantees of future performance and that actual results or developments may differ materially from those projected in any forward looking statements made.
Exploration targets are conceptual in nature and drilling may not convert these to resources.
2 Why invest in MRP……
STRONG Gold Resource up 118% to Extensions to MRE at depth, along strike and at Western RESOURCE BASE 507,000 ounces Contact Mining Leases, Tailings APPROVALS Dam and Water Licence IN PLACE approved ADVANCED DFS underway Metallurgy, Geotechnical, STUDY Draft Plant Design in March
INFRASTRUCTURE 10km from Kalgoorlie, WA Major mining centre with relevant skills and services
OPTIONS Development Options Toll Treatment, JV, Purchase options
Expansion of resource Strong geological model and UPSIDE 3 underway soon identified areas of extensions Boorara Video
4 Corporate Summary
Capital Structure Strong Board & Management Ashok Parekh ASX Code MRP Accounting & Mining Company Management Non Exec Chairman Ordinary Shares 351,026,501 (6 December 2017) Jeff Williams Mining Engineering, Mine Planning, Development & Options 5M @ 15c (3yrs); 0.4M @ 36c (3yrs) Managing Director Operation
Market Cap A$40M (at 11.5c, 5 Mar-18) Peter Rozenauers Mining Engineering, Processing & Operational Non Exec Director Management A$1.8m; plus A$0.75m rebates and 38.4m shares in Cash Stephen Hewitt-Dutton PGO (subject to conditional takeover @ 5.75c=$2.2M) Accounting, Mergers & Acquisitions, Compliance Company Secretary Debt Nil Andrew Pumphrey Geologist, Mine Surveyor, Operational Management EV A$44M General Manager
5 Prime Location – Mills, Services
6 Ore zone extending north
Northern Stockwork Deposit (NSW) extends north and 3 areas need infill drilling
7 Stockwork Veinlets Mineralised
Trial pit mined in October 2016 provided vital information on gold grade, recovery, interpretation
Diamond drilling/RC at 115˚ in Southern zone -Jan to Aug 2017: • 163m grading 1.94g/t gold (cut to 24g/t) • 158m grading 1.6g/t gold • 57m grading 3g/t gold • 33m grading 2.75g/t gold • 20m grading 2.83g/t gold RC infill drilling since 2 October: • 136m grading 1.78g/t gold • 4m grading 91.4g/t gold • 67m grading 1.99g/t gold • 59m grading 1.74g/t gold • 6m grading 21.28g/t gold 8
RC infill confirms previous diamond drilling
Results from recent RC drilling campaign confirm those of previous diamond drilling
Crown Jewel open to north to NSW and south to SSW
9 Southern Stockwork Longitudinal Projection
Potential at depth for resource expansion
10 Future Development of Boorara
March 2018 - Upgraded Independent Gold Resource-up 118% to 507,000 ounces - Mining Leases; aboriginal heritage clearance; water rights of 1.5M kilolitres pa; Power 1.5 MW; environ approval; Tailings Dam (permit to 5Mt with expansion); established roads; offices; sterilisation drilling COMPLETE DFS underway - Metallurgy, Geotechnical, Preliminary Plant Design, Open Pit Design (start late-March 2018)
Development options - 10 km from KALGOORLIE- Toll treatment, Joint Venture, Purchase options for MacPhersons ore, Owner Operator Mid 2018-Expansion of resource - Infill on 3 deposits; deep drilling to 750 metres; zone open to the north 11
Jeff Williams Managing Director MacPhersons Resources
12 Competent Person’s Statement
The information in this report that relates to exploration results is based on information compiled by Andrew Pumphrey who is a Member of Australian Institute of Geoscientists and is a Member of the Australasian Institute of Mining and Metallurgy. Andrew Pumphrey is a full time employee of MacPhersons Resources Ltd and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking 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”. Mr Pumphrey has given his consent to the inclusion in this report of the matters based on the information in the form and context in which it appears. Full details of results of the Boorara Gold Project drill holes can be found in the below announcements:
ASX Announcement Date Drill Hole Reference
14 February 2017 BODH 024, BODH 25 1 March 2017 BORC 171, BORC 172, BORC 173 28 March 2017 BORCD 174, BORCD 175, BODH 27, BODH 28 27 April 2017 BODH 029, BODH 030, BODH 031, BODH 032 30 May 2017 BODH 033, BODH 034, BODH 035, BORC 176 3 July 2017 BODH 036, BODH 037, BODH 038, BODH 039, BODH 040, BORCD 177, BORCD 178, BORCD 179, BORCD 180, BORCD 181B, BORCD 182 19 July 2017 BORCD 183, BORC 184, BORCD 185, BODH 041, BODH 042, BODH 043 4 August 2017 BODH 044, BODH 045, BODH 046 29 August 2017 BODH 047, BODH 048, BODH 049 4 September 2017 BODH 050, BODH 051, BODH 052 24 October 2017 BORC 186, BORC 187, BORC 188, BORC 189, BORC 190, BORC 191, BORC 192, BORC 193, BORC 300, BORC 301, BORC 302, BORC 303, BORC 304 13 Competent Person’s Statement
ASX Announcement Date Drill Hole Reference BORC194, BORC 195, BORC 196, BORC 197, BORC 198, BORC 199, BORC 200, BORC 201, BORC 202, BORC 305, BORC 306, BORC 307, BORC 308, 9 November 2017 BORC 309, BORC 310, BORC 311, BORC 312, BORC 313, BORC 314 BORC 203, BORC 204, BORC 205, BORC 206, BORC 207, BORC 208, BORC 209, BORC 210, BORC 211, BORC 212, BORC 213, BORC 214, BORC 215, 30 November 2017 BORC 216, BORC 217, BORC 218, BORC 219, BORC 220, BORC 221, BORC 315, BORC 316, BORC 317, BORC 318, BORC 319, BORC 320, BORC 321, BORC 322, BORC 323, BORC 324, BORC 325, BORC 326, BORC 327, BORC 328, BORC 329 8 December 2017 BODH 053 BORC 222, BORC 223, BORC 224, BORC 225, BORC 226, BORC 227, BORC 228, BORC 229, BORC 230, BORC 231, BORC 232, BORC 233, BORC 234, BORC 235, BORC 236, BORC 237, BORC 238, BORC 239, BORC 240, BORC 241, BORC 242, BORC 243, BORC 244, BORC 245, BORC 246, BORC 247, BORC 248, BORC 249, BORC 250, BORC 251, BORC 252, BORC 253, BORC 254, BORC 255, BORC 256, BORC 257, BORC 258, BORC 259, BORC 260, 19 January 2018 BORC 261, BORC 262, BORC 263, BORC 264, BORC 330, BORC 331, BORC 332, BORC 333, BORC 334, BORC 335, BORC 336, BORC 337, BORC 338, BORC 339, BORC 340, BORC 341, BORC 342, BORC 343, BORC 344, BORC 345, BORC 346, BORC 347, BORC 348, BORC 349, BORC 350, BORC 351, BORC 352, BORC 353, BORC 354, BORC 355, BORC 356, BORC 357, BORC 358, BORC 359, BORC 360, BORC 361, BORC 362, BORC 363, BORC 364, BORC 365, BORC 366, BORC 367, BORC 368, BORC 369, BORC 370, BORC 371, BODH 053, BODH 042, BORC 079, BORC 080, BORC 132 BORC 265, BORC 266, BORC 267, BORC 268, BORC 269, BORC 270, BORC 271, BORC 272, BORC 273, BORC 274, BORC 275, BORC 276, BORC 277, 22 February 2018 BORC 278, BORC 279, BORC 372, BORC 373, BORC 374, BORC 375, BORC 376, BORC 377, BORC 378, BORC 379, BORC 380, BORC 381, BORC 382, BORC 383, BORC 384, BORC 385, BODH 026
14 CENTURY ZINC MINE www.newcenturyresources.com Melbourne Mining Club Presentation March 2018
Restarting Century operations in 2018 as a globally significant zinc producer: • Production ramp up to 500kt of zinc concentrate per annum • After tax free cash flow of A$1.8 Billion at a long term zinc price of US$1.25/lb • Initial 6.3 year mine life (Reserves only) from the Century Tailings Deposit • In-situ Resources (9.3Mt at 10.8% Zn + Pb) provide potential for mine life expansion ASX: NCZ Cautionary Statements
New Century Resources believes that the production target, forecast financial information derived from that target and other forward looking statements included in this presentation are based on reasonable grounds. However, neither the Company nor any other person, including Sedgman Pty Ltd makes or gives any representation, assurance or guarantee that the production target or expected outcomes reflected in this announcement in relation to the production target will ultimately be achieved.
Investors should note that the Company believes the commodity prices, AUD:USD exchange rate and other variables that have been assumed to estimate the potential revenues, cash flows and other financial information are based on reasonable grounds as at the date of this presentation. However, actual commodity prices, exchange rates and other variables may differ materially over the contemplated mine life and, accordingly, the potential revenue, cash flow figures and other financial information provided in discussions set out in this announcement should be considered as an estimate only that may differ materially from actual results. Accordingly, the Company cautions investors from relying on the forecast information in this announcement and investors should not make any investment decisions based solely on the results.
A number of key steps need to be completed in order to bring the Century Zinc Mine into production. Many of those steps are referred to in this presentation and accompanying Restart Feasibility Study announcement. Investors should note that if there are any delays associated with completing those steps, or completion of the steps does not yield the expected results, the revenue and cash flow figures may differ materially from actual results.
To achieve the range of outcomes indicated in this presentation, funding in the order of A$63 million will likely be required. While the Company has significant cash reserves and a conditional financing facility through Sprott Resource Lending, investors should note there is no certainty that the Company will be able to raise any additional funding if needed. It is also possible that such funding may only be available on terms that may be dilutive to or otherwise affect the value of the Company’s existing shares.
Certain statements contained in this presentation constitute forward looking statements. Forward looking information often relate to statements concerning New Century Resources’ future outlook and anticipated events or results and, in some cases can be identified by terminology such as “may”, “will”, “could”, “should”, “expect”, “plan”, “anticipate”, “believe”, “intend”, “estimate”, “projects”, “predict”, “potential”, “continue” or other similar expressions concerning matters that are not historical facts. Statements of historical fact are not considered forward looking information.
Forward looking statements are based on a number of material factors and assumptions, including, but not limited in any manner to, those disclosed in results; the ability to explore; communications with local stakeholders and community and government relations; status of negotiations of joint ventures; weather conditions; Ore Reserves; Mineral Resources; the development approach and schedule; the receipt of required approvals, titles, licenses and permits; sufficient working capital to develop and operate the mines and implement development plans; access to adequate services and supplies; foreign currency exchange rates; access to capital markets; availability of qualified work force; ability to negotiate, finalise and execute relevant agreements; lack of social opposition to mines or facilities; lack of legal challenges with respect to the property; the timing and amount of future production and ability to meet production, operating and capital cost expenditure targets; timing and ability to produce studies and analysis; execution of the credit facility; ability to draw under the credit facility and satisfy conditions precedent including execution of security and construction documents; economic conditions; availability of sufficient funding; the ultimate ability to mine, process and sell the mineral products produced; the timing, exploration, development, operational, financial, budgetary, economic, legal, social and political factors that may influence future events or operating conditions. Forward looking statement are only predictions based on New Century Resources’ current expectations and projections of future events. Actual results may vary from such forward looking information for a variety of reasons.
Forecast financial information provided in this presentation is based on the Restart Feasibility Study. The Company is of the view it has reasonable grounds for providing the forward looking statements included in this presentation. However, the Company cautions that there is no certainty that the forecast financial information derived from the production targets will be realised. The Company confirms that all material assumptions underpinning the production target and forecast financial information contained in the Company’s ASX Announcements on 28 November 2017 and 15 January 2018 continue to apply and have not materially changed.
Other than required by law, New Century Resources assumes no obligation to update any forward looking information to reflect, among other things, new information or future events.
ASX: NCZ | Page 2 New Century Resources: Capital Structure
CAPITAL STRUCTURE SHARE PRICE PERFORMANCE
ASX Code NCZ $1.60 Volume Shares 467M 14,000,000 $1.40 Options (av. price $0.42/share*) 115M 12,000,000 $1.20 Market Cap (at $1.30/share) A$607M 10,000,000 $1.00 Cash (at 25 Jan 2018) A$52.8M # MMG Support Payments A$ 17.3M 8,000,000 Gulf Communities Trust# A$ 7.9M $0.80 A$78.0M 6,000,000 $0.60 Conditional Debt Facility^ A$58.0M 4,000,000 $0.40 Share Ownership: Institutions 24% $0.20 2,000,000 Board, Mgmt & Rel. Parties 39% $0.00 0 Credit Suisse 7/18/17 8/18/17 9/18/17 10/18/17 11/18/17 12/18/17 1/18/18 2/18/18 Analyst Coverage Patersons Total Volume Traded Closing Price TSI
* Option price range from $0.25/share to $1.99/share, representing a total consideration of A$49.3M if fully exercised # MMG Support Payments utilised for ongoing C&M and rehabilitation activities, Gulf Communities Trust supports ongoing native title obligations (see ASX Announcement 20 June 2017) ^ Proposed debt facility with Sprott remains subject to completion of legal documentation & final due diligence (see ASX announcement 11 October 2017). Completion due in March 2018 ASX: NCZ | Page 3 New Century Resources: Restart Team In Place
Board Management
John Carr Chief Business Development Officer - Metallurgist, ex. Clean TeQ & Rio Tinto Patrick Walta Managing Director Barry Harris COO/Site Senior Executive - Mining Engineer, ex. MMG & Downer
Stuart Brown Group Financial Controller - Accountant, ex. Glencore & Nyrstar
Evan Cranston Bill Wise Offtake Marketing Consultant - ex. Pasminco & Zinifex
Executive Chairman
Simon Beach Head of Human Resources - ex. Newcrest Mining
Tolga Kumova Adam Clark Head of Process Plant & Pipeline - ex. Glencore Zinc Ops Mgr & Lihir Processing Mgr Corporate Director Chris Portelli Superintendent of Process Plant & Pipeline - ex. Newcrest Mining
Peter Watson Rod Smith Metallurgy Manager - 30 years’ metallurgy and flotation experience Non Executive Director Peter Goodman Feasibility/Project Manager - Greenfield & brownfield project delivery spanning 40+ years
Tom Eadie Terry Moylan Feasibility/Project Manager - Mining Engineer, EPC & ops experience spanning 40+ years Non Executive Director Michael Pitt Utilities Manager - Chemical Engineer, ex Clean TeQ & BHP
Bryn Hardcastle Tim Edwards Mining Technical Services Manager - Mining Engineer, ex. MMG & BHP Non Executive Director Greg O’Shea Port Manager - ex. Glencore (Townsville Port)
ASX: NCZ | Page 4 Century: 100% Owned & Fully Permitted with Financing Flexibility
Ore Reserve & Production Capacity: • Reserves: 2.3Mt zinc & 29.7Moz silver (77.3Mt at 3.1% ZnEq) • Production: 264,000tpa zinc & 3Moz pa silver (in 507ktpa of concentrate) Mine Life: • 6.3 years (Reserves only) • In-situ Resource extension potential (9.3Mt at 10.8% Zn + Pb) Robust Mine Economics: • Utilising existing site infrastructure for large scale operations • Start-up capital: A$50M • Ramp-up capital: A$63M, to be funded via cashflow Lowest Quartile Cash Cost Operations: • C1 & C3 Cash Costs = US$0.38/lb & US$0.50/lb
Value Metric (after At Zinc US$1.25/lb At Zinc US$1.50/lb tax) (US$2,750/t) (US$3,300/t)
NPV8 A$1.3 Billion A$1.7 Billion IRR 270% 350%
Free Cashflow A$1.8 Billion A$2.3 Billion
ASX: NCZ | Page 5 Century Restart: Utilising World Class Existing Infrastructure
Flotation Plant Operationally Ready Support Facilities
Karumba Port Facility MV Wunma Transhipper
ASX: NCZ | Page 6 Century Restart: The Value in Leveraging Sunk Capital Large scale existing infrastructure (sunk capital) and low cost tailings operations help to make Century the highest profitability index ranked $1B+ NPV resources project globally
Profitability1 Post-Tax IRR (%) Initial Capital (A$M) 6,000 Post-Tax NPV (A$M) 12 3,000 200 5,000 4,000 8 2,000 3,000 100 4 1,000 2,000 1,000 0 0 0 0
First Project Location Company Commodity Profitability1 Study Level/Year Production3 Century2 Australia New Century Resources [ASX:NCZ] Zinc 12.7x BFS (2017) 2018
Taylor USA Arizona [TSX:AZ] Zinc 3.8x PEA (2017) 2020+ Kamoa-Kakula DRC Ivanhoe [TSX:IVN] Copper 3.4x PEA (2016) 2020+ Juanicipio Mexico Fresnillo [LON:FRES] Silver 3.2x PEA (2017) 2020+ Timok Serbia Nevsun [TSX:NSU] Copper 2.4x PEA (2017) 2020+ Citronen Greenland Ironbark [ASX:IBG] Zinc 2.0x PFS (2017) 2020+ Nickel Shaw Canada Nickel Creek Platinum [TSX:WG] Nickel 2.0x PEA (2015) 2020+ Los Azules Argentina McEwen Mining [NYSE:MUX] Copper 0.9x PEA (2017) 2020+ Casino Canada Western Copper [TSX:WRN] Copper 0.7x FS (2017) 2020+
Sources: Compiled from company filings and presentations. Based on publicly available technical reports as at March 2018 1. Profitability calculated as post-tax NPV divided by initial capital. 2. Century includes total capital of A$113M as conservative calculation for profitability, other projects taken as reported initial capital not total capital. 3. Based on publicly available information where available or New Century estimation 4. Forex; USD/AUD 0.75 and CAD/AUD 1.03 ASX: NCZ | Page 7 Century Restart: One of the Top 10 Zinc Operations in the World
600
500
400 *
300
200 Zinc Zinc Production (ktpa)
100
4.6% 3.9% 2.3% 2.1% 2.1% 1.6% 1.5% 1.4% 1.4% 1.2% 0 Red Dog Rampura-Agucha Mount Isa Pb/Zn San Cristobal Century McArthur River Antamina Dugald River Cerro Lindo Tara (Teck) (Hindustan Zinc) (Glencore) (Sumitomo) (New Century (Glencore) (Teck) (MMG) (Milpo) (Boliden) Resources)
Source: SNL Metals & Mining: 2016 data excluding Century/New Century Resources & Dugald River/MMG Limited *Percentages reflect proportion of global zinc production (2016 figures)
ASX: NCZ | Page 8 Century Restart: A Lowest Cost Quartile Primary Zinc Operation
Production (%) 0 25 50 75 100 120.00
100.00 San Cristobal (Sumitomo Corporation)
McArthur River 80.00 George (Glencore) Rampura Century Red Dog Rosebury Fischer
(US¢/lb) Agucha (Teck) (MMG) (Glencore) Zinc * 60.00 (New (Hindustan Zinc) Century Resources)
40.00
Total Cash Costs Cash Total 20.00
0.00 0 1012 2025 3037 4049 Payable Zinc (000 tonnes) Mine (¢/lb) Mill (¢/lb) TCRC+Shipment (¢/lb) Royalty (¢/lb)
Source: SNL Metals & Mining: 2016 data excluding NCZ * Total Cash Costs represents the total mine site costs, transport & offsite costs, smelting & refining costs, royalties and taxes, net of by-product credits, on a payable metal basis
ASX: NCZ | Page 9 CENTURY MINE RESTART UNDERWAY First production scheduled Q3 2018
10 Restart Milestones: Gas Supply for Grid Power Establishment
• Long term Gas Supply Agreement with major domestic gas supplier Santos • 9PJ of gas over 4 years • Contract value ~A$100M • Major milestone in establishing full scale grid power for operations
ASX: NCZ | Page 11 Restart Milestones: Concentrate Offtake Agreements
Typical Zinc New Century Historical Century Concentrate Tailings Big Zinc • Long term offtake agreements secured with: Specification Operations Operations • Established trading houses Mercuria Energy & Transamine Zn 53 % 57 %
• Nyrstar, the world’s second largest zinc smelter (previously Ag up to 246 ppm up to 250 ppm purchased up to 800,000tpa of Century concentrate) SiO2 7.1 % 5.0 % • ~60% of the first 3.5 years of production under offtake C 4.8 % 4.0 % Fe 1.67 % 1.40 %
• Highly attractive terms underpin strong demand: F <0.1 % <0.03 % • Low treatment charges Cl <0.05 % <0.05 % • Negligible impurity deductions Cd <0.1 % <0.1 % Hg 13 ppm 50 ppm • Finalisation of further offtakes under development (targeting As <0.01 % <0.01 % 90% of total production) Cu 0.52 % 0.28 %
Mn 0.11 % 0.35 %
Pb 1.87 % 1.90 %
S 28 % 29 %
Sizing (µm) <40µm (pelletised) <40µm (pelletised)
ASX: NCZ | Page 12 Restart Milestones: Refurbishment & Commissioning Contractors
• Sedgman: • A$40M EPC contract for refurbishment & commissioning of the Century Process Plant & Karumba Port • Expands on Early Works contract, underway since December 2017 • Ausenco: • Preferred bidder for A$1.7M Concentrate Slurry Pipeline refurbishment & commissioning works • Direct experience with the Century slurry pipeline (2006 audit) & over 30 years’ in the pipeline industry (design, construction, ops & maintenance)
4MW generators delivered & installed for commissioning
Refurbishment & Commissioning Timeline
Re-energization works at the mine electrical substation ASX: NCZ | Page 13 Restart Milestones: Hydraulic Mining Contractor
Large Scale Tailings Operation Commodity Rate (Mtpa) • Combined preferred contractor award: Reprocessing Operations
• National Pump & Energy - Australia’s leading 1 Amerigo Resources MVC Cu, Mo 67 pump and energy provider 2 DRD Gold Ergo Gold 25 • Paragon Tailings - International specialist 3 Randgold Resources Morila Gold 15 hydraulic mining company 4 New Century Resources Century Zinc, Silver 15
• Detailed design & procurement for Century 5 Gold Fields South Deep Gold 2.0 mining operations underway 6 Pan African Resources BTRP Gold 1.2
NPE track mounted, remote controlled water cannons to be Paragon hydraulic mining operations at Randgold’s Morila Mine, Mali (15Mtpa) used at Century ASX: NCZ | Page 14 Operations: Tailings Operations Facilitate Site Rehabilitation
Century Mine Overview Hydraulic Mining Plan
Note: Restart Feasibility Study cashflows include an A$80M provision for finalising capping of the three waste dumps ASX: NCZ | Page 15 Century Tailings Deposit: Proved Ore Reserve
Century Tailings Tonnes (Mt) Zinc Eq (%) Zinc (%) Silver (g/t) Zn Metal (t) Ag Metal (Oz) Deposit
Proved Ore Reserve 77.3 3.1 3.0 12.4 2,287,000 29,735,000
• 98% conversion of Measured Resource • 14th largest zinc Reserve globally# • Average depth 13m • Lead not recovered (no conc. penalty) Century Tailings Deposit
Mine Plan: Hydraulic Mining Process
ASX: NCZ | Page 16 # Source: SNL Metals & Mining
Century Tailings Deposit: Homogenous Ore Body
16.4% Tailings Zinc • Very strong vertical and lateral grade continuity across the entire deposit Distribution 2.4% • Minimal oxidation (2.4%) - water soluble zinc recovered in process Sulphide Zn Water Soluble Zn • Rigorous geological and metallurgical development: Non Sulphide Zn • more than 3,600 discrete 1m composite multi element assays from 291 drill holes; • multiple rounds of testwork from three independent laboratories; and • a successful 10,000t bulk trial of tailings through the existing plant. 81.2%
ASX: NCZ | Page 17 Flowsheet: Simple Flowsheet Utilising Existing Infrastructure
ASX: NCZ | Page 18 Metallurgy: Consistent Recoveries Across the Deposit
Zinc Concentrate Metallurgical Testwork Total Zinc Recovery Zinc Grade (%) Silver Recovery Silver Grade (g/t)
Met Domain 1 63% 51% 58% 208
Met Domain 2 62% 52% 55% 195
Met Domain 3 61% 50% 49% 188
Met Domain 4 64% 50% 61% 172
Met Domain 5 61% 50% 55% 198
Met Domain 6 63% 50% 56% 202
Met Domain 7 61% 50% 55% 166
Met Domain 8 64% 53% 63% 259
Combined Domains Testing 63% 51% 61% 213
ASX: NCZ | Page 19 Metallurgy: 10,000t Bulk Tailings Trial
10,000t Bulk Trial Circuit Tailings Flotation
Successful 2014 bulk trial demonstrated tailings flotation performance & materials handling • Results of the trial “exceeded design expectations in terms of flotation performance” • Trial achieved 68.8% recovery into the zinc rougher concentrate • Downstream activities focused on direct metal production as opposed to scavenging and cleaning of the rougher concentrate for sale • Significant process optimisation success has occurred post bulk trial (e.g, grinding, reagent selection), improving flotation rates, recoveries and concentrate grade
ASX: NCZ | Page 20 Century Restart Study: Capital Costs
A$ 300 15 Area (M)
START-UP CAPITAL 250 12.5 Process Plant and Process Infrastructure 24.6
* Karumba Port 2.1 200 10 Engineering, Procurement and Construction 8.8 After tax cash flow assumes zinc price of Owners Cost, First Fills & Infrastructure 11.7 US$1.25/lb (US$2,750/t) 150 7.5 Contingency 2.8
SUBTOTAL 50.0 100 5 RAMP-UP CAPITAL (POST START UP OF PRODUCTION) Annualised Annualised Production (Mtpa) Process Plant, inc additional float cells & regrind 37.7 After Cash TaxPosition (A$M)
Engineering, Procurement and Construction 5.5 50 2.5
Owners Cost, First Fills & Infrastructure 7.1
Soluble Zinc Recovery Plant 8.9 0 0
Contingency 3.7 Jul-18 Jul-19 Apr-18 Oct-18 Apr-19 Oct-19 Jan-18 Jun-18 Jan-19 Jun-19 Mar-18 Mar-19 Feb-18 Feb-19 Dec-17 Aug-18 Sep-18 Nov-18 Dec-18 Aug-19 Sep-19 Nov-19 May-18 May-19 SUBTOTAL 62.9 Annualised Production TOTAL 112.9 Cumulative After Tax Cash Flow Cumulative After Tax Cash Flow incl Bank Guarantee Replacement * After tax cash position starting point assumes completion of proposed debt facility with Sprott Resource Lending (see ASX announcement 11 October 2017)
ASX: NCZ | Page 21 Century Restart Study: Operating Costs
US$/lb Zn Area A$/Feed Ore (payable) Corporate 4% Royalties G&A, Enviro and 13% Hydraulic Mining 2.75 0.06 Depreciation 8%
Maintenance Processing Plant 10.31 0.22 4%
Sale Costs, inc transport, treatment 4.63 0.10 charges & silver credit Power Offsite: Transport & 23% Treatment Costs C1 Cash Costs 17.69 0.38 C3 Cash Costs 14%
Depreciation 1.48 0.03
C2 Cash Costs 19.17 0.41
Labour Onsite: Operating 12% Consumables & Royalties and Corporate Costs 3.97 0.09 Equip 22%
C3 Cash Costs 23.14 0.50
ASX: NCZ | Page 22 Century Restart Study: Earnings Profiles Average Life of Mine EBITDA = A$449Mpa at long term zinc price of US$1.25/lb & USD:AUD $0.75
600 1900
500
1400 400
300 900
200 A$M EBITDA, Annual
400 Cum. After Tax Cash Flow, A$M Flow, Cash Tax After Cum.
100
-100 2018 2019 2020 2021 2022 2023 2024 0 Annual EBITDA Cum. After Tax Cash Flow
ASX: NCZ | Page 23 Century Restart Study: Sensitivity & Scenario Analysis
Long Term Long Term Zinc Price NPV (post-tax) IRR Free Cashflow Scenario AUD/USD 8
Optimistic Case US$1.50/lb (US$3,306/t) $0.75 A$1.7 Billion 350% A$2.3 Billion
Base Case US$1.25/lb (US$2,755/t) $0.75 A$1.3 Billion 270% A$1.8 Billion
Bearish Case US$1.00/lb (US$2,204/t) $0.75 A$881 Million 189% A$1,194 Million
Base Case NPV8 (A$M) 1,050 1,150 1,250 1,350 1,450 1,550 NPV8 Zinc Price
Exchange Rate
Recoveries
Discount Rate
Power Cost
Operating Consumables
Labour Cost
Capex
Silver Price
-10% +10%
ASX: NCZ | Page 24 MINE LIFE EXPANSION In-situ Resource Feasibility Study to be completed in 2018
25 In-situ Mineral Resources: 9.3Mt at 10.8% Zn + Pb
ASX: NCZ | Page 26 Century Restart: Summary
• Project is fully permitted and fully funded (subject to completion of debt financing package)
• Production in less than 5 months, ramping up to be a top 10 zinc producer in the world
• Design capacity of 264,000tpa of zinc in 507,000tpa of concentrate (52% zinc)
• Highly attractive economics: NPV8 A$1.3B & IRR 270% at long term zinc price of US$1.25/lb
• Globally competitive lowest cost quartile primary zinc production (C1: US$0.38/lb, C3: US$0.50/lb)
• In-situ Mineral Resources of 9.3Mt at 10.8% Zn + Pb to be assessed for incorporation into operations
ASX: NCZ | Page 27 Contact Patrick Walta Managing Director [email protected]
New Century Resources Limited Head Office: Level 9, 350 Collins Street, Melbourne VIC 3000 Perth Office: Suite 23, 513 Hay Street, Subiaco WA 6008 www.newcenturyresources.com