Presentation Africa Downunder - August 2012

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  • 1. BUILDING A TIER 1 MINERAL SANDS COMPANY Africa Downunder Conference August 2012 BRUCE GRIFFIN – CEO
  • 2. Building a Tier 1 Mineral Sands Company 2 DISCLAIMERThis presentation has been prepared by World Titanium Resources Ltd (WTR). Certain information inthis document has been derived from third parties, and though WTR has no reason to believe that it isnot accurate, reliable or complete, it has not been independently audited or verified by WTR. Anyforward-looking statements included in this document involve subjective judgement and analysis andare subject to uncertainties, risks and contingencies, many of which are outside the control of, and maybe unknown to, WTR. In particular, such statements are only as of the date of this document, assumethe success of WTR’s strategies, and are subject to significant political, regulatory, business,competitive and economic uncertainties and risks. Actual future events may vary materially from theforward-looking statements and the assumptions on which the forward-looking statements are based.Recipients of this document ("Recipients") are cautioned to not place undue reliance on such forward-looking statements.WTR makes no representation or warranty as to the accuracy, reliability or completeness of informationin this document and does not take responsibility for updating any information or correcting any erroror omission which may become apparent after this document has been issued. To the extent permittedby law, WTR and its officers, employees, related entities and agents ("Agents") disclaim all liability,direct, indirect or consequential (and whether or not arising out of the negligence, default or lack ofcare of WTR and/or any of its Agents) for any loss or damage suffered by a Recipient or other personsarising out of, or in connection with, any use or reliance on this presentation or information.All amounts in A$ unless stated otherwise.Ian Ransome, B.Sc. (Hons) Geology, Pr.Sci.Nat., a Director of the Company, who is a registeredgeological scientist with the South African Council for Natural Scientific Professions (SACNASP), and hassufficient experience which is relevant to the styles of mineralisation and types of deposits underconsideration, and is thus a Qualified Person in terms of the JORC Code, has reviewed and consented tothe inclusion of the scientific and technical information contained in this presentation.
  • 3. Building a Tier 1 Mineral Sands Company 3World Titanium ResourcesASX-listed mineral sands developer (WTR)Toliara Sands Project in MadagascarDefinitive Engineering Study completed Large, scalable mineral sands asset Simple & low-risk development concept Low capital, high margin, robust NPVGrowth OptionsFirst production – target 2014
  • 4. Building a Tier 1 Mineral Sands Company 4 Large, high grade depositAPG - Austpac; ARO – Astro; ATR - Astron; BSE - Base; DRX - Diatreme; GUN - Gunson; IMA - Image Resources; KMR – Kenmare Resources; MDL – Mineral Deposits; MZI - Matilda Zircon; PFP – Pathfinder; SFX - SheffieldSource: Company websites, TZMI
  • 5. Building a Tier 1 Mineral Sands Company 5Scalable Mineral Resource 959 million tonnes @ 6.1% THMLarge Ore Reserve in ‘starter pit’• 161 million tonnes at 8.2% THM• 21 year LOM Ore Reserve 161 million tonnes @ 8.2% THMJust 17% of current Mineral Resource• 959 million tonnes at 6.1% THM• >100 years at initial production rate
  • 6. Building a Tier 1 Mineral Sands Company 6Secured with Mining LicencesMining licences granted April 2012 Ranobe Licences Mineral Resource 959 Mt @ 6.1% THM• 313 million tonnes at 7.6% THM• 40 year licences, renewable Mining Licence (1) Mineral Resource 176 Mt @ 8.1% THM Ore Reserve 161 Mt @ 8.2% THMExploration licence renewed April 2012• Covers rest of the Mineral Resource• 959 million tonnes at 6.1% THM Mining Licence (2) Mineral Resource• 3 year licence 137 Mt @ 6.9• Convertible into a mining licence
  • 7. Building a Tier 1 Mineral Sands Company 7Maiden Ore Reserve WCP Location 3Optimised mine plan developed• Front End Loader dry mine• 1 concentrator, moved twice• 21 year initial mine life WCP Location 2• Measured and Indicated Resource 1000m• Within granted mining licenceMaiden Ore Reserve• 161 million tonnes at 8.2% THM WCP Location 1 Mining year
  • 8. Building a Tier 1 Mineral Sands Company 8Simple Deposit ~ Simple DevelopmentInherent advantages Unconsolidated sand Low slimes content (<5%) No strip Consistent assemblage Close to existing infrastructureSimple mining, processing and logistics Single dry mine with 2 Front End Loaders Pump slurry to Primary Concentrator Mineral Separation Plant at mine site Sulphate and chloride ilmenite Zircon/rutile concentrate ~55km haul road to storage and jetty Direct load vessels in reef sheltered water
  • 9. Building a Tier 1 Mineral Sands Company 9Proven, low-risk flowsheetSimple Processing• Gravity and magnetic separation• Confirmed by pilot scale trials 5,000t of ore processed, proved easy separation• Off the shelf equipment• Delivering three products Mining and Production Schedule 350 9 300 8 7 Production ktpa Ore Mine mtpa 250 6 200 Sulphate Ilmenite 5 4 Chloride Ilmenite 150 3 Zircon Rich Concentrate 100 2 Ore mined 50 1 0 0 2018 2030 2014 2016 2020 2022 2024 2026 2028 2032 2034
  • 10. Building a Tier 1 Mineral Sands Company 10 Demand for products Sulphate Ilmenite Chloride Ilmenite Underlying Demand Existing Supply Likely New Projects Zircon ConcentrateSource: TZMI
  • 11. Building a Tier 1 Mineral Sands Company 11 Prices and revenue assumptions Product Prices 3,000 300 Zircon Rich ConcentrateZircon Concentrate US$/t 2,500 250 Ilmenite (80% sulphate, 20% chloride) Ilmenite US$/t 2,000 200 1,500 150 1,000 100 500 50 0 0 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 Revenue Profile Calendar Year 180 Zircon Rich Concentrate 160 Ilmenite (80% sulphate, 20% chloride) 140 120 US$m pa 100 80 60 40 20 0 Calendar Year
  • 12. Building a Tier 1 Mineral Sands Company 12 Competitive cost structure Annual Average Operating Cost Area Per Tonne Product Total US$m $US/t Mining 16.2 36 Concentrator 8.9 20 Mineral Separation Plant 10.4 23 Product transport and Handling 8.9 20 Admin and Marketing 5.0 11 Royalties 2.3 5 Total 51.7 116 Revenue-to-cash cost ratio: 2015Data in 2015 RC curve is based on TZMI’s long term zircon and titanium feedstock priceforecasts and production forecasts of existing and newly approved operations.Source: TZMI
  • 13. Building a Tier 1 Mineral Sands Company 13Relatively low development capitalPre-production capital expenditureArea CapitalMine + Primary Concentrator 19Mineral Separation Plant 26Road + Port 71Other Infrastructure 13Indirect + Other 7Process Plant and Infrastructure 136EPCM (17%) 23Contingency (20%) 32Total 192 Low 188~ Jetty piling cost High 200
  • 14. Cash Flow US$ M -120 40 80 -80 -40 0 120 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 Project Cash Flows 2028 2029 2030 2031 2032 2033 2034 Cash Flow US$ M 2035 -250 0 1000 250 500 7502013201420152016201720182019 Building a Tier 1 Mineral Sands Company20202021202220232024202520262027 Generating strong cash flows20282029 Cumulative Project Cash Flows203020312032 14203320342035
  • 15. Building a Tier 1 Mineral Sands Company 15Generating robust shareholder value ‘Starter Pit’ Mine life 21 years Average annual production rate Ilmenite 407,000 tpa Zircon/rutile concentrate 47,000 tps Ore mined 161 million tonnes Average grade 8.2% Ore mined per annum 8 million tonnes US$192 million development capital Capital Investment US$24 million working capital Forecast project financial (August 2012) IRR (after tax) 27% NPV (after tax, 10% real) US$257 million Payback 3 years Average annual after tax cash flow US$47 million Life of Mine Free Cash Flow (post-tax real) US$1033 million
  • 16. Building a Tier 1 Mineral Sands Company 16Generating robust shareholder value NPV10 (US$ M) All Product Prices -10% +10% Ilmenite Price -10% +10% Non-Mag Price -10% +10% Opex +10% -10% Capex +20% -10% Diesel +10% -10% 177 217 257 297 317
  • 17. Building a Tier 1 Mineral Sands Company 17 Growth options Expansion • Latent expansion capacity in dedicated port and road • Duplicate Mining, Concentrator and MSP facilities Value add • Process non-magnetic concentrate into zircon and rutile products Life extension • Starter pit utilises just 17% of the 959 Mt, 6.1% THM resource • Starter pit utilises just 3% of the Projects’ potential mineralisation11TotalToliara Sands Project exploration target of 4.7 billion tonnes. Ranobe ~1,400Mt @ 6-7% THM, including 959Mt @ 6.1% Mineral Resource, Ankililoaka ~365 @ 5-6% THM, Basibasy~445Mt @ 4.5-5.5% THM and Morombe 2500Mt @ 1-3% THMThese Exploration Targets are at an early stage of evaluation, and the potential quantity and grade remain conceptual in nature. At his stage there has been insufficient exploration to defineMineral Resources and it is uncertain if further exploration will result in the determination of Mineral Resources greater than that already defined.
  • 18. Building a Tier 1 Mineral Sands Company 18 First production ~ 2014 Sep 12 Q3 12 Q4 12 1H 13 2H 13 2014 Geotechnical and marine studies for jetty Pre Development Engineering EPCM Documentation Pre-paid off take and strategic partner funding Equity raise for balance EPCM Tender Drilling at Ranobe and Morombe Pitting and bulk samples at Ranobe Surface rights Environmental Approval (ESIA and EMP) LGIM FEED and Fabrication ConstructionEPCM – Engineering, Procurement Construction Management; ESIA - Environmental and Social Impact Assessment;EMP - Environmental Management Plan; LGIM – Large Investment In Mining; FEED - Front-End Engineering and Design
  • 19. Building a Tier 1 Mineral Sands Company 19World Titanium ResourcesASX-listed mineral sands developer (WTR)Toliara Sands Project in MadagascarSecured with 40 year Mining LicencesSignificantly de-risking the ProjectDefinitive Engineering Study demonstrates:Large, scalable mineral sands assetSimple & low-risk development conceptLow capital, high margin, robust NPVGrowth OptionsFirst production – target 2014