Refining titanium for industrial use


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Objective Capital's Industrial Metals, Minerals & Investment Summit 2010
London Chamber of Commerce and Industry
3 November 2010
Speaker: Mark Bertolini, Metalysis

Published in: Economy & Finance
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Refining titanium for industrial use

  2. 2. Copyright © 2010 Metalysis Ltd Industrial Metals Investment Summit 3 November 2010
  3. 3. Copyright © 2010 Metalysis Ltd To tell you about a new technology that will have a big impact on the way metals are produced in the future Purpose of this presentation Metals & Mining Cleantech Technology Which Sector?
  4. 4. Copyright © 2010 Metalysis Ltd Breakthrough technology, for production of high value metals  Breakthrough technology in $1trillion+ metals & mining sector.  Simple, clean, oxide to metal (O2M) electrolysis technology.  Significantly lower capital and manufacturing costs.  Solid IPR, successfully defended.  Samples qualified by customers, initial production investments made.  A very valuable business built on high margin metal production and technology enablement.
  5. 5. Copyright © 2010 Metalysis Ltd Technology Reach FFC process is applicable to much of the periodic table. Tantalum represents the first production investment with Titanium and other elements to follow. Suitable Commercial production Scaled-up to multi kg quantities Produced at lab scale
  6. 6. Copyright © 2010 Metalysis Ltd Early opportunities • Tantalum – Fabulous electronic, medical, high temperature and chemical properties – Supply Chain DYSFUNCTIONAL – Market opaque and volatile – Current process environmentally ugly and very expensive – Metalysis have proven technology – First real orders soon
  7. 7. Copyright © 2010 Metalysis Ltd Early opportunities • Titanium – Very superior engineering material compared to steel, stronger, lighter, more corrosion-resistant – Titanium usage severely BOTTLENECKED by price – Old & complex methods will be supplemented by new simple methods – Metalysis holds the keys – Step change needed
  8. 8. Copyright © 2010 Metalysis Ltd video Strictly Confidential The Metalysis Solution Simple, low-cost, clean route to metal powders
  9. 9. Copyright © 2010 Metalysis Ltd Copywrite Metalysis Ltd The Kroll Process – TiCl4 Plant
  10. 10. Copyright © 2010 Metalysis Ltd The Solution Metalysis low cost and clean route to metal powders
  11. 11. Copyright © 2010 Metalysis Ltd From Australian synthetic rutile sands to green pellet, sintered pellet, and finally reduced metal (alloy) From sand to high performance metal with 3 volts
  12. 12. Copyright © 2010 Metalysis Ltd Titanium Opportunity Titanium market is $3,000m (~120,000 t pa)  Aerospace (strength-to-weight)  Industrial (corrosion resistance, non- magnetic)  Dental implants, prosthetics (bio-stability)  Automotive  Jewellery, watches, sports goods Significant margin opportunity*  99.99% oxide $2/kg  Mill product $25-70/kg  Spherical powder $150-300/kg Forecast return per 5,000t O2M plant......*  NPV ~$230m  IRR ~39%  EBITDA ~$75m pa * 2009 price levels Laser sintered titanium dental implant lower cost in titanium than steel. 175,000 hip replacements are performed annually, and those numbers are on the rise expected to increase 174% All titanium M777 matches the firepower of current generation at less than half the weight. Jewellery and commissioned art work becoming fashionable in titanium. Market awaits lower-cost powder to enable near net shape production CP grade 2 titanium means no allowance required for corrosion .
  13. 13. Copyright © 2010 Metalysis Ltd Ore extraction & processing Oxide/ synthetic rutile Sponge production Mill processing (incl melt & metallurgy) Customers Titanium - Partnerships Titanium Industry: BHP Tronox ATI Allegheny Chemical Rio Tinto Huntsman Timet Marine Exxaro Dupont VSMPO Aerospace RBM Cristal Osaka Medical Austpac Toho Automotive BHP Tronox Mitsui Jewellery RTI Sports Steel additives Turbines Powder Metallurgy Other Industries: Chemical BASF, Bayer, Dow Aluminium Norsk Hydro, Alcoa, RTZ Alcan, BHP, Dubal Plant build RTZ, Jacobs, Foster Wheeler, Bechtel, Fluor Distribution Strictly Confidential
  14. 14. Copyright © 2010 Metalysis Ltd Tantalum Opportunity Tantalum market is $800m (~2,000 t pa)  Electronics grade - high and low voltage applications  Metallurgical  Medical implants, prosthetics  Sputter targets  Chemical liners  Aerospace super-alloys Significant margin opportunity*  99.99% oxide $150/kg  Met grade metal $250/kg  Capacitor metal powder $350/kg - $800/kg Forecast return per 100t O2M plant......*  NPV ~$40m  IRR ~85%  EBITDA ~$15m pa Market is growing and prices are rising * 2009 price levels
  15. 15. Copyright © 2010 Metalysis Ltd Company 5,000 tonne titanium plant discussions Semi-continuous design/process cost review 100 tonne plant  1,000 tonne titanium plant Ti: Sputtering targets Ta: Fabricated parts. Rated FFC product “high purity” Tantalum prosthetics. Product meets requirements Looking to build on common ground and combine Metalysis IP with their scale-up knowledge Powder consolidation discussions Interest in both CP and Ti 6,4. Metalysis joined Boeing collaboration Engaged Blue Chip Customers Several Top 10 Aluminium players Several Top 7 Titanium players 2 of Top 3 A/C Engine players
  16. 16. Copyright © 2010 Metalysis Ltd Metalysis ready for production Next investments establish capacity for commercial production FY 2010/11 FY 2011/12 FY 2012/13 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Tantalum increase to 96t/yr Tantalum Roadmap 3-5% of $1B market. 1st plant ~$39m NPV Tantalum Investment $15m 250t MODULE PROVE OUT Build first production module Titanium Investment $15m Build 1st Plant ~$240m NPV Pipeline; Rollout O2M technology to other elements and special alloy development, Value creation options Production Plant Build & Commission Improving grades and yields First revenues Titanium partnering & industrialisation plans
  17. 17. Copyright © 2010 Metalysis Ltd Current Facility CP Development  Scale up design  Pilot experimental testing  Design validation O2M Reduction
  18. 18. Copyright © 2010 Metalysis Ltd Strategy Achieve value triggers by end of 2011to facilitate IPO/Trade sale in 2012/3 Status: –Proven at small scale –Production plant built and commissioning now Value triggers:  Increase tantalum production volumes  (eg mobile telephony) and medical prosthesis)  Prove viability of technology for high volume metals  (Titanium, eg aerospace & medical)  Prioritize and select next value creation opportunities  (Pipeline, eg PV Silicon & Rare Earths)  Protect long-term value (IPR generation)  Achieve commercial traction Provide confidence that Metalysis can be worth $0.5B-$1B in 2 to 3 years
  19. 19. Copyright © 2010 Metalysis Ltd Intellectual Property • 19 live, published families of patents • Combined IP from; – Cambridge University – BHP Billiton – Qinetiq – Metalysis • 2nd Generation Technology focussed on – product uniformity, productivity and cost reduction – developing significant plant and process design know how
  20. 20. Copyright © 2010 Metalysis Ltd Creating a High Value Company 2011  Selling Ti and Ta products in volume to customers  Proven production technology and economics  License to third parties  $150m – $250m valuation expectation 2013 - 2015  In-house high margin production of Ta  Ti licensing or Joint-Venture  Further Ti licensing opportunities  Product pipeline  > $500m valuation expectation
  21. 21. Copyright © 2010 Metalysis Ltd Aluminium Production History Titanium growth could be similar to that of Aluminium after introduction of electrolytic process •Aluminium 2007 38 Mt $106B •Titanium 2007 0.1 Mt $3B •Titanium 2020? 3.8Mt $76B Imagine ....... Norwegian/CanadianTitanium at 400kTpa Selling at $20,000/t Costing say $4,000/t Gives revenue of ~$8Bpa And profit circa $6.4Bpa Lets work together to make it happen
  22. 22. Copyright © 2010 Metalysis Ltd Summary • Game changing process for producing advanced materials • Green technology applicable to huge markets • Early commercial traction with Blue Chips • Starting to scale-up for commercial production • Comprehensive intellectual property position with 19 key patents; extensive trade secrets; vast IP pipeline • Opportunities relating to one third of periodic table • Opportunity to get in now
  23. 23. Copyright © 2010 Metalysis Ltd Old vs New OLD • Traditional metrics have been volume • Millions of Tonnes @ $50/T • Requires very high & inflexible investment in land, capital & people • Very competitive and volatile NEW • Add on opportunity; high value/very high margin metals. Metric $’s, EBITDA, cash & never mind the volume • Relatively low capital per revenue or EBITDA dollar • Less cash inflexibility/lock in • Less commodity orientation so less competition/less volatility If traditional mining company market has a market cap of $Xb & an innovative mining cap creates at 10% premium.. What is this worth to your shareholders?
  24. 24. Copyright © 2010 Metalysis Ltd Invest in Intellectual Property and Land
  25. 25. Copyright © 2010 Metalysis Ltd Time to make change happen? Conventional Routes FFC Process? 1950’s2010
  26. 26. Copyright © 2010 Metalysis Ltd Mark Bertolini – CEO +44 1709 872111 +44 7887 503937