Lynas Corp. Hong Kong Rare Earth's Conference Presentation

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Lynas Corp. Hong Kong Rare Earth's Conference Presentation

  1. 1. Corporate Office Telephone: +61 2 8259 7100 Level 7 Facsimile: +61 2 8259 7199 56 Pitt Street Website: www.lynascorp.com Sydney NSW 2000 ACN: 009 066 648 AUSTRALIA Page 1 of 1 10 November 2010 Hong Kong Rare Earths Conference Presentation 10 November 2010 Enclosed is an amended copy of the presentation that will be given to the Hong Kong Rare Earths Conference today. A typographical error in the heading on pages 12, 13 and 14 has been corrected. The copy of the presentation that was lodged with the ASX earlier today should be disregarded. Andrew Arnold Company Secretary Forpersonaluseonly
  2. 2. The Lynas Story THE 6TH INTERNATIONAL RARE EARTH CONFERENCE Hong Kong 9-11 November 2010 Forpersonaluseonly
  3. 3. Disclaimer • The release, publication or distribution of this presentation in certain jurisdictions may be restricted by law and therefore persons in such jurisdictions into which this presentation is released, published or distributed should inform themselves about and observe such restrictions. • This presentation does not constitute or form part of an offer to sell or the solicitation of an offer to subscribe for or buy any securities nor the solicitation of any vote or• This presentation does not constitute, or form part of, an offer to sell or the solicitation of an offer to subscribe for or buy any securities, nor the solicitation of any vote or approval in any jurisdiction, nor shall there be any sale, issue or transfer of the securities referred to in this presentation in any jurisdiction in contravention of applicable law. This presentation is not an offer of securities for sale in the United States, nor does this presentation constitute a prospectus or other offering document in the United States or any other jurisdiction in which it is being used. Securities may not be offered or sold in the United States absent registration under the U.S. Securities Act of 1933, as amended, or an exemption from registration therefrom. • Lynas Corporation Ltd is making this presentation available solely to persons that are either (A) “qualified institutional buyers” as defined in Rule 144A under the Unitedy p g p y p ( ) q y States Securities Act of 1933 (the “Securities Act”) or (B) not US persons (as defined in Regulation S under the Securities Act) (“U.S. Person”) that are outside the United States. Any securities referred to herein have not been registered under the Securities Act, and may not be offered or sold in the United States or to, or for the account or benefit of, U.S. Persons unless the shares are registered under the Securities Act or an exemption from the registration requirements of the Securities Act is available. Any offer or sale of securities will be made pursuant to definitive documentation, including an offering memorandum, which describes the terms of the offering and the selling and transfer restrictions applicable to the offering. • In providing this presentation, Lynas has not considered the financial position or needs of the recipient. Persons needing advice should consult their stockbroker, bank manager, solicitor, attorney, accountant or other independent financial and legal advisors. This presentation includes some forward-looking statements. These forward- looking statements are not historical facts but rather are based on Lynas’ current expectations, estimates and projections about the industry in which Lynas operates, and beliefs and assumptions regarding Lynas’ future performance. Words such as “scenario”, “anticipates”, “expects”, “intends”, “plans”, “believes”, “seeks”, “estimates”, “forecasts” and similar expressions are intended to identify forward-looking statements. • These statements are not guarantees of future performance and are subject to known and unknown risks uncertainties and other factors some of which are beyond the• These statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and other factors, some of which are beyond the control of Lynas, are difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements. Lynas cautions shareholders and prospective shareholders not to place undue reliance on these forward-looking statements, which reflect the view of Lynas only as of the date of this presentation. The forward-looking statements made in this presentation relate only to events as of the date on which the statements are made. Lynas will not undertake any obligation to release publicly any revisions or updates to these forward-looking statements to reflect events, circumstances or unanticipated events occurring after the date of this presentation except as required by law or by any appropriate regulatory authority. 2 Forpersonaluseonly
  4. 4. Prices are returning to historic levelsg HISTORIC SUPPLY, DEMAND AND PRICING US$61.96/kg 8 Nov 2010 Tonnes REO US$/Kg US Inflation adjusted Actual Price US Inflation adjusted 3 Forpersonaluseonly
  5. 5. Limited price drop in 2009 to Chinese cash cost of productionof production PRICE DRIVERS 2009 Tonnes REO US$/Kg • Demand sharply dropped due to the GFC • Limited price drop to Chinese cash cost of productionp 4 Forpersonaluseonly
  6. 6. The shortage of Rare Earths has the world currently thirsting for these vital elementscurrently thirsting for these vital elements PRICE DRIVERS 2010 Tonnes REO US$/Kg • Consolidation of production and marketing channels • Chinese policies restricted supply • Demand recovering strongly • Prices starting to grow inside China 5 Forpersonaluseonly
  7. 7. Future outlook – structural change in industry has commencedcommenced FUTURE PRICE DRIVERS Other impacts on cash costs: • Wage increases Supply vs Demand Wage increases • Energy and Chemical cost increase • China CPI • Environmental operating costs including energy and chemicals $4 to $6 per kgenergy and chemicals $4 to $6 per kg • Consolidation & Environmental depreciation $5 to $10 per kg 6 Forpersonaluseonly
  8. 8. Lynas will offer the first new source of supply of Rare Earths outside of China Q3 2011Rare Earths outside of China - Q3 2011 LYNAS VITALS AT A GLANCE VISION: To be a global leader in Rare Earths for a sustainable futuresustainable future EXCHANGE: ASX Top 200 Company; code LYC SHARES: 1,657m on issue Mount Weld OPTIONS: 78m strike range 11c - $1.60 MARKET CAP: A$2.8bn as at 22 Oct 2010 Concentration Plant Concentration Plant Concentration Plant CASH: A$347m as at 30 Sep 2010 DEBT: Nil Lynas Advanced Materials Plant 7 Forpersonaluseonly
  9. 9. Lynas is on track for production in Q3 2011y p KEY MILESTONES TO ENSURE A RELIABLE SOURCE OF RARE EARTHS • Lynas raised A$450 million in the equity markets to fund the completion of its project • All approvals in Australia and Malaysia in place to complete construction of processing plants • Mechanical Engineering Design complete • All major equipment procured• All major equipment procured • Construction work is well underway in both Australia and Malaysia • Mount Weld Concentration Plant due to be commissioned in February 2011 • Lynas Advanced Materials Plant (LAMP) due to be commissioned in July – September 2011 8 Forpersonaluseonly
  10. 10. The current mining operation is within the Central Zone Pit As at September 2010, 15% more resources in Mount Weld; New Total Resource of 1.4 million Central Zone Pit CENTRAL LANTHANIDE DEPOSIT AND DUNCAN DEPOSIT RESOURCES tonnes of REO Central Lanthanide Deposit & Duncan Deposit at Mount Weld Tenements Category Tonnes Grade % Tonnes CLD & Duncan Mineral Resource (2.5% REO cut-off) Category Tonnes Mt Grade % REO Tonnes (kt) REO CLD 9.88 10.7 1,057 Duncan 7.62 4.8 366 Total 17.49 8.1 1,416 Current mine plan (within Central Zone Pit) – 4.47 Mt @ 13.6% REO for 608kt REO Low Thorium content, 44ppm ThO2/1% REO -9- Forpersonaluseonly
  11. 11. Mount Weld Rare Earths initial mining campaign complete loss time injury freecomplete, loss-time-injury-free MOUNT WELD STOCKPILES WITH RARE EARTH OXIDE PERCENTAGES DUNCAN DEPOSIT Offi(DD) Offices 8% 773,000t on stockpiles 8% 13% 17% 26% 15% 13% DD CLD DEPOSIT 20% 21% Conc. Plant 1.5km DD 10 Forpersonaluseonly
  12. 12. Schematic - Concentration Plant process at Mount Weld which has been fully pilot plant testedWeld, which has been fully pilot plant tested 11 Forpersonaluseonly
  13. 13. Commissioning of the Concentration Plant is on schedule for February 2011schedule for February 2011 CONSTRUCTION AT THE CONCENTRATION PLANT Flotation section under construction 12 Forpersonaluseonly
  14. 14. Commissioning of the Concentration Plant is on schedule for February 2011schedule for February 2011 CONSTRUCTION AT THE CONCENTRATION PLANT Flotation building Concentration thickener and packing area 13 Forpersonaluseonly
  15. 15. Commissioning of the Concentration Plant is on schedule for February 2011schedule for February 2011 CONSTRUCTION AT THE CONCENTRATION PLANT Ball mill being installed 14 Forpersonaluseonly
  16. 16. Containers of Rare Earths concentrate will be trucked to Fremantle for shipping to Malaysiatrucked to Fremantle for shipping to Malaysia • Mount Weld to Fremantle = 1000km • Transportation approx. 9% of total costs 15 Forpersonaluseonly
  17. 17. Lynas will expand the Malaysian processing hub, with the ability to take multiple sources of material PROCESSING HUB WITH EXCEPTIONAL INFRASTRUCTURE Gebeng Industrial INDUSTRIAL INFRASTRUCTURE KNOWLEDGE INFRASTRUCTURE Estate, East Coast Malaysia GOVERNMENT INFRASTRUCTURE Including FDI incentives (12 years tax exemption for pioneer status)(12 years tax exemption for pioneer status) 16 Forpersonaluseonly
  18. 18. Schematic - Lynas Advanced Materials Plant core process which uses mature industry technologyprocess, which uses mature industry technology 17 Forpersonaluseonly
  19. 19. Lynas Advanced Materials Plant Phase 1 : 11,000t REO Phase 2 : 22,000t REO -18- Forpersonaluseonly
  20. 20. First feed to kiln at the Lynas Advanced Materials Plant is scheduled for Q3 2011Plant is scheduled for Q3 2011 FEATURES OF CONSTRUCTION AT THE LAMP Working on the foundations at the LAMPPrefabricated Bluescope steel buildings 19 Forpersonaluseonly
  21. 21. First feed to kiln at the Lynas Advanced Materials Plant is scheduled for Q3 2011Plant is scheduled for Q3 2011 FEATURES OF CONSTRUCTION AT THE LAMP Lynas-constructed stormwater detention pond Concrete Batch Plants 20 Forpersonaluseonly
  22. 22. First feed to kiln at the Lynas Advanced Materials Plant is scheduled for Q3 2011Plant is scheduled for Q3 2011 CONSTRUCTION AT THE LAMP Foundation works and steel reinforcement in place ready for further concrete pours 21 Forpersonaluseonly
  23. 23. First feed to kiln at the Lynas Advanced Materials Plant is scheduled for Q3 2011Plant is scheduled for Q3 2011 CONSTRUCTION AT THE LAMP Rotary kilns foundations Rotary kilns bodies 22 Forpersonaluseonly
  24. 24. Time and expertise are vital for the effective execution of a Rare Earths projectexecution of a Rare Earths project MAN HOURS TO COMPLETE OUR LYNAS ADVANCED MATERIALS PLANT 1 000 000 4,000,000 600,000 700,000 800,000 900,000 1,000,000 200,000 300,000 400,000 500,000 300,000 40,000 280,000 0 100,000 Engineering Procurement PM Construction 23 Forpersonaluseonly
  25. 25. We are industrialising our operations to meet our customers’ expectationscustomers expectations FOUR PILLARS UNDERPINNING LYNAS’ OPERATIONS Marketing and Sales • Serving long-term customer requirements and commitments, and thus providing input for plant extensions and new facilities. Industrial • Key value drivers are responsible care, customer satisfaction, asset optimisation and growth management. Research and Technologies • Working with customers to analyse and develop technologies to enable a cost-effective product offering. Business ExcellenceBusiness Excellence • Providing and optimising services to support cost-effective operations at the processing plants. 24 Forpersonaluseonly
  26. 26. Eight customer agreements have been signed Rhodia Customer Agreement - Supply Contract • >US$200M¹ L t 10 t t Ph I 8th Customer Agreement – Supply Contract • Long term contract• Long term 10 year contract, Phase I • Cerium, Europium, Terbium & Lanthanum • Long term contract • Product from Phase I & II 2nd Customer Agreement - Supply Contract • ~US$200M¹ • Long term 5 year 7th Customer Agreement – Supply Contract • Multi - year contract • Product from Phase ILong term 5 year contract, Phase 1 • Neodymium & Praseodymium 3rd Customer Agreement S l C t t 6th Customer Agreement - Supply Contract • Long term multiple year contract • Product from Phase I - Supply Contract • ~US$20M¹ • Long term multiple year contract • Product from Phase I & Phase II 5th Customer Agreement – Letter of Intent • ~US$80M¹ • Long term multiple year contract4th Customer Agreement – Letter of Intent g p y • Product from Phase I & Phase II Long term multiple year contract • Product from Phase I & Phase II• ~US$80M¹ • Long term multiple year contract • Product from Phase I & Phase II SIX SUPPLY CONTRACTS AND TWO LETTERS OF INTENT SIGNED 25 S SU CO C S O S O S G 1 Values reflect market prices at signing of contract Forpersonaluseonly
  27. 27. Lynas – online in 2011, delivering Rare Earths globallyRare Earths globally Our vision is to be a global leader in Rare Earths for a sustainable future. We are close to realising this vision. Lynas will be online in 2011, delivering Rare Earths globally. This is the first new production outside of China. Production will be 11,000 REO by this time next year; we will double this production in 2012. 26 Forpersonaluseonly
  28. 28. NOTE The information in this report that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Brendan S f fShand, who is a member of The Australasian Institute of Mining and Metallurgy. Brendan Shand is an employee of Lynas Corporation Limited. Brendan Shand 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 qualifydeposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Brendan Shand consents to the inclusion in the report of the matters based on his i f ti i th f d t t i hi h itinformation in the form and context in which it appears. 27 Forpersonaluseonly

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