Geoff Eupene - Crossland Uranium - Charlie Creek Project

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Geoff Eupene delivered the presentation at the 2014 Mining the Territory Conference.

With record year on year investment in mining developments and exploration in the Northern Territory, the 8th Annual Mining the Territory Conference is perfectly placed to hear latest information on this booming region.

For more information about the event, please visit: http://bit.ly/MiningtheNT2014

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Geoff Eupene - Crossland Uranium - Charlie Creek Project

  1. 1. 1 CHARLEY CREEK ALLUVIAL REE PROJECT Mining the Territory, August 2014 A large, simple, low capital cost, rare earths project: The path to Development
  2. 2. Mining the Territory, August 2014 2 This presentation should not be considered as investment advice. Any party to whom this information is made available must make their own investment decisions. Any forward-looking statements included in this document involve subjective judgment, and are subject to uncertainties, risks and contingencies, which may be beyond the control or knowledge of Crossland. Future events may vary materially from the forward-looking statements and the assumptions on which the forward-looking statements are based. Attendees at this presentation are cautioned not to place undue reliance on such forward-looking statements. Crossland makes no representation or warranty as to the accuracy, reliability or completeness of information in this document and does not take responsibility for updating any information or correcting any error or omission which may become apparent after this document has been issued. JORC Statement. The information in this presentation that relates to Exploration Targets, Exploration Results, or Mineral Resources is based on information compiled by Geoffrey S Eupene FAusIMM CP, a Competent Person who is a Fellow of the Australasian Institute of Mining and Metallurgy. He is a director of the Company and a full time employee of Eupene Exploration Enterprises Pty Ltd, which is engaged by the Company. He has sufficient experience which is relevant to the styles 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’ (the JORC Code). Geoffrey S Eupene has consented to the inclusion in the report of the matters based on his information in the form and context in which it appears. ASX Listing Rules Statement re Production Targets. This presentation is based upon a production target and forecast financial information derived therefrom that was initially reported in CUX ASX Release of 15th April 2013: “Charley Creek Rare Earth Project Scoping Study Results”. The assumptions underpinning the production targets therein continue to apply and have not materially changed. Some of the production target is based upon an exploration target. The potential quantity and grade of a exploration target is conceptual in nature, there has been insufficient exploration to determine a mineral resource and there is no certainty that further exploration work will result in the determination of mineral resources or that the production target itself will be realised.
  3. 3. 3 Working towards production in 2016  Located in Central Australia  1hr from Alice Springs  Total project area is 7,000km2  Drilling has tested just 1% of exploration potential: sufficient resource for long term production  Low risk simple mineral sands process  High proportion of Heavy and Critical Rare Earths  Good infrastructure  Favourable regulatory regime  Project on care and maintenance since early 2014, sourcing new finance arrangements; expecting project rejuvenation shortly. Mining the Territory, August 2014
  4. 4. 4 20+ Year Mine Life on Existing Resource RESOURCE Mass (Mt) Weighted Average TREO (ppm) Contained TREO (t) Contained Xenotime (t) Contained Monazite (t) Contained Zircon (t) Cattle Creek Indicated Resource 250 280 69,900 17,600 97,200 124,650 Western Dam Indicated Resource 137 323 44,150 9,675 63,700 70,930 TOTAL INDICATED RESOURCES 387 295 114,050 27,275 160,900 195,580 Cattle Creek Inferred Resource 353 291 102,750 26,450 141,075 183,750 Western Dam Inferred Resource 65 282 18,350 4,240 26,160 36,230 TOTAL INFERRED RESOURCE 418 289 121,100 30,690 167,235 219,980 Mining the Territory, August 2014
  5. 5. 5 Mining the Territory August 2014 Multiple REE-bearing Alluvial Fans - Decades of Supply?
  6. 6. 6  The Cattle Creek/ Western Dam alluvial fan (350km2) shown is roughly outlined at left  The REE bearing minerals are separate mineral grains of monazite & xenotime contained in alluvial sands derived from the breakdown of basement rocks  The alluvium can be readily mined and upgraded using conventional mineral sands technology.  Average thickness of resource is 15m, commencing from surface (no overburden) with some of the alluvial fans having thicknesses up to 80m  Vast alluvial flats are inexpensive & easy to rehabilitate Mining the Territory, August 2014
  7. 7. 7  Specialized in testwork and flowsheet development for mineral sands project  Scoping study Lead, experts in mineral sand project engineering  Environmental baseline studies Mining the Territory, August 2014
  8. 8. Scoping Study is based around the concept of:  dry mining 12Mt/ year of alluvium averaging 500ppm TREO* for 5 years, followed by a throughput increase to 20Mt/year for 15 years at the demonstrated average deposit grade of 300ppm.  ROM is upgraded through primary wet plant at mine site by removing ~91% of ROM;  Upgraded Heavy Mineral Concentrate (HMC) is pumped to Secondary Wet Plant for further upgrading,  HMC is fed to dry plant at the same site; Ilmenite and Zircon plus other heavy minerals separated and stockpiled for sale;  Resulting product is REE concentrate of Monazite and Xenotime containing ~40% TREO, including around ~18% Heavy REO, mostly in Xenotime.  The REE concentrate would be further processed, through an on- site refinery to produce a saleable high grade mixed REE Carbonate product. The Scoping Study made no provision for revenue from by products (e.g. zircon) produced. Mining the Territory, August 2014 8 *This is an Exploration Target. This target is conceptual in nature, and there has been insufficient exploration to estimate a Mineral Resource of this grade, and it is uncertain if further exploration will result in the estimation of a Mineral Resource of this grade.
  9. 9. 9 PROJECT FINANCIALS Net Present Value (NPV10)* A$302M Internal Rate of Return 39.4% CAPITAL EXPENDITURE Total Capex (including contingency) A$156M Payback period 2.5 years REVENUE Annual revenue (75% off-take terms) A$154M pa “Basket Price” of REO product (Mar 2013) US$57.38/kg Operating Unit Cash Cost A$7.12/t ROM PRODUCTION Concentrate annual production (40% REO) 10kt/yr REO Production (as mixed carbonate) 3,645t/yr Overall metallurgical recovery 60.8% Mining the Territory, August 2014 *An Exploration Target of 60 to 100Mt at grades of 500 to 1,000ppm TREO, that would contain 30,000t to 100,000t TREO is the priority of the upcoming Resource drill out program. This target is conceptual in nature, and there has been insufficient exploration to estimate a Mineral Resource, and it is uncertain if further exploration will result in the estimation of a Mineral Resource.
  10. 10. 10 Capital Item AUD $ Mining Field Units $9,560,189 Wet Concentrator Plant $55,257,469 Dry Concentrator Plant $12,728,878 REO Refinery $15,799,437 Infrastructure $26,938,914 TOTAL DIRECTS $120,284,887 Indirects $5,672,830 EPCM $17,565,280 Contingency $12,734,166 TOTAL CAPEX $156,257,164  Charley Creek is one of the lowest capital cost undeveloped REE projects globally .  On an annualised basis, its capital cost is equivalent to US$43/kg REO pa.  Capital cost is inclusive of RECO3 refinery and all infrastructure.  Includes contingency allowance ($12.7M) Mining the Territory, August 2014
  11. 11. 11  Charley Creek is a high tonnage ‘mineral sands’ style operation.  Total C1 cash costs is $7.12/t ROM or $21.16/kg REO production. Operating costs need to be reduced to get the project into the lowest cost quartile.  Several areas to reduce costs have been identified:  Costs of mining must be reduced- small improvements make big differences.  Higher grade starter pits areas to be sought in next phase of exploration.  Several process improvements expected to increase overall metallurgical recovery and lower costs.  Potential refinery reagents savings through process improvements.  Additionally, revenue may be enhanced by considering sale of by- products. SCOPING STUDY OPERATING COST ESTIMATE PRESENT OPTIMISATION PHASE 8.68 5.03 0.92 5.87 0.67 21.16 15.00 Mining the Territory, August 2014 TARGETING 30% SAVING
  12. 12. 12  March 2013 China FOB spot price was assumed for Scoping Study  Charley Creek basket price was US$57.38/kg REO.  TREO composition contains 18.3% HREOs.  US Department of Energy has assessed Nd, Eu, Tb, Dy & Y to be in critical shortage  These five elements are commonly referred to as Critical Rare Earth Elements (CREE): Three are HREE, ND is LREE while Eu is MREE.  Charley Creek contains 30% CREEs by weight and they represent approximately 80% of our basket price: a STRATEGIC project. Mining the Territory, August 2014 Source: Metal Pages, CUX Critical Critical Critical Critical Critical Pricing Date
  13. 13. 13  Unusual alluvial deposits that have a broad spectrum of heavy and critical rare earths from a mix of monazite and xenotime  Charley Creek has one of the highest HREE &CREE distributions  Not dependent on LREE (La, Ce) metal prices. CUX Source: TMR, Metal Pages Mining the Territory, August 2014
  14. 14. 14  Low risk mining and processing  Simple gravity spiral plant.  Most tailings returned by direct pumping to pit void.  Wet & Dry Plant flowsheets confirmed via pilot test work.  Final heavy mineral concentrate from Dry Plant contains 40% TREO.  Refinery low capital due to high REO grade.  Feed rate only 1.2 tonne / hr  Excellent extraction using sulphuric acid roast and water leach (>95% REE extraction)  High purity mixed rare earth carbonate produced (97-99% purity RE Carbonate)  Targeting radionuclide free mixed carbonate product Mining the Territory, August 2014
  15. 15.  Low cost mining – simple excavation − Does not require drilling, blasting and crushing as in hard rock deposits  Fully liberated monazite and xenotime mineral grains in alluvial sand  Gravity spirals demonstrated good heavy mineral (HM) recoveries to concentrates with 8-12% TREO  Electrostatic and magnetic separation can easily separate rare earth minerals from ilmenite, rutile, zircon and other heavy minerals  Final mineral concentrate contains >40% TREO 15 XenotimeMining the Territory, August 2014 Monazite Final Mineral Concentrate (40% TREO)
  16. 16. 16  Mine site located ~100km from Alice Springs.  Fly-in/Fly-out operation with 150 personnel camp and mess facility.  Targeting at least 30% local aboriginal workforce plus contractors  Amadeus Basin Gas Pipeline to provide gas to BOO power station.  Three borefields targets have been identified and to be tested in next phase.  Some facilities may be located in Alice Springs, or within DIDO distance.  All reagents to be transported to site (no acid plant: quantities required are too small). Mining the Territory, August 2014 ALICE SPRINGS 25km
  17. 17. 17  Secure funding for DFS (commenced, with securing of investment of HK Rare Earths Sdn Bhd) in late 2013; further negotiations in progress  Undertake pilot beneficiation program, examine other by-products  Continue optimisation to achieve lower operating costs  Review development options: eg Step by Step via HMC production, vs directly to RECO3 production  Evaluate mineral and grade zoning to select start –up locations  Complete environmental impact study (EIS) Mining the Territory, August 2014  Undertake detailed engineering  Secure refinery offtake agreement and financing options  Permitting and Construction
  18. 18. 18 Well, it ticks these boxes: Cattle Creek Resource size  >230k t of contained TREO (still very much open: from a small part of one of several very large alluvial fans) Mineralogy  Monazite and xenotime- predictable treatment HREE & CREE Composition  18% Heavy REE and 30% Critical REE by weight 80% of basket price is CREE. Low capital cost  $156 M to produce 3,600tpa TREO contained in high purity RE Carbonate; Development may be stepped Low risk mining and processing  Proven low risk heavy mineral sand process technology produces high grade Heavy mineral Concentrate; other valuable by products likely. Scalable production capacity  Base case on 50% of current resource in part of one alluvial fan; long term concept is to replicate production centres with different investor mixes on different zones Location  Northern Territory, Australia Infrastructure  Road, Rail, Power and People Regulatory regime  60 year history of mining radioactive materials Early start-up  Pilot plant 2014/15 and production 2016/17 Mining the Territory, August 2014
  19. 19. CUX DIRECTORS Name Position Bob Richardson Non-Executive Chairman Geoff Eupene Executive Director Malcolm Smartt Finance Director Peter Walker Non-Executive Director Sia Hok Kiang Non-Executive Director CORPORATE SUMMARY ASX code: CUX Shares on issue: ~ 249 million Options on issue: ~55 million Total Shares (fully diluted): ~304 million Market Capitalization $2.5 million Mining the Territory, August 2014
  20. 20. 20 Mining the Territory, August 2014
  21. 21. 21 Mining the Territory, August 2014  Low risk mining and processing  Simple gravity spiral plant.  Tailings pumped to pit void.  Wet Plant flowsheet confirmed via full-scale spiral pilot test work.  Wet Plant concentrate 8-12% TREO.  Dry plant fully tested at pilot scale.  Dry Plant concentrate 40% TREO.  Large volume of final dry plant concentrate now available for downstream testwork.
  22. 22. 22 Mining the Territory, August 2014  Significantly lower capital due to high grade REO concentrate feed (~40% TREO)  Feed rate only 1.2 tonne / hr  Excellent extraction using sulphuric acid roast and water leach (>95% REE extraction)  High purity mixed rare earth carbonate produced (97-99% purity RE Carbonate)  Uranium by-product currently proposed to be sold to local uranium producer  Removal of cerium and possibly La to be examined to further value added mixed carbonate product  Expecting to produce radionuclide free mixed carbonate

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