Jean Raymond Boulle Corporations, Titanium Resources Group (Trg) Presentation

Company Overview Presentation by

TRG ● Produces three commodities ● rutile ● ilmenite and ● bauxite ● At its two mines in Sierra Leone

Location Sierra Leone Africa

Sierra Leone Sierra Rutile Mine Nitti Port Sierra Leone Freetown SML Bauxite Sherbro Island

Sierra Rutile ● Projected mine life of 19 years with mineable reserves of 3,825,000 tonnes rutile ● Current production capacity of 100,000 tpa rutile ● Production capacity expected to more than double to 240,000tpa rutile by 2008 ● Production fully sold until 2008 ● Self contained mine site with refurbished infrastructure ● Excellent potential to expand reserve base through low risk near mine exploration ● Current production capacity of 18,000 tpa ilmenite

SML Bauxite ● 10 year mine life with mineable reserves of 12.4 million tonnes grading 53.1% alumina ● Current production of approximately 1.2mtpa premium grade metallurgical bauxite ● Long term off take agreements in place with Alcoa and Glencore ● Shares infrastructure with Sierra Rutile ● Operated under contract by PW Mining

Overview ● Listed on AIM in August 2005 raising £41m ($74m) ● Placing in October 2005 raising £10m ($17.5m) ● Experienced management team ● Market cap of $247m (£127m) at 20 March 2007 ● Mines in full production ● Significant exploration upside for bauxite and rutile ● Stable political and economic environment ● 2,000 employees

Summary financials, yr ended 31.12.06 ● Sales of $51.3m (05 $337,000) ● Gross profit of $21.5m (05 $239,000) ● Attributable loss before tax of $1.47m (05 $17.5m) ● Profit after tax of $34m ● $9.7m net cash generated from operations ● $39m in investment activities ● Cash and cash equivalents of $52m

Investment case ● Demand for titanium minerals and bauxite increasing ● TRG produces premium product ● natural rutile grades 95.5% ● bauxite used as a sweetener ● All production fully sold ● Rutile production will more than double by 2008 giving TRG 30% market share ● Significant low risk near mine exploration upside exists

The rutile market

TiO2 ● Rutile and ilmenite are titanium- bearing minerals ● Used in production of ● titanium dioxide pigments ● titanium metal and ● welding rods ● Titanium mineral industry revenues of approx. $2bn per annum ● 2006 TiO2 pigment consumption approx. 4.8m tonnes – 2015 forecast demand of 7.3m tonnes ● 2006 TiO2 pigment revenue approx. $10.5bn ● Consumption of TiO2 pigment has grown on average by 3% per annum over the past thirty years* * TZMI estimate

TRG’s share of natural rutile market (2006) ● Numbers are estimated and based on the company’s own figures Others 5.1% Bemax 6.1% TRG 13.6% Volnogorsk 12.3% Exxaro (inc TiWest) 13.8% Iluka (inc CRL) 31.9% RBIT 16.5%

TRG’s share of natural rutile market (2008 expected) ● Numbers are estimated and based on the company’s own figures Others 7.7% BeMax 7.3% TRG 29.8% Volnogorsk 8.1% Exxaro (inc TiWest) 9.9% RBIT 11.1% Iluka (inc CRL) 26.1%

TRG’s customers by market sector ● Expressed as a percentage of TiO2 units Welding rods 4% Ti metal 9% TiO2 pigments 87%

Natural rutile vs other mineral sands $ per tonne 500 450 400 350 300 Cl2 Ilmenite Cl2 Slag 250 SR 200 Rutile 150 100 50 0 2004 2005 2006

Strategy

Strategy ● Expand production at existing mines ● rutile: dredges D2 & D3 ● bauxite: 300,000 tpa expansion ● Increase reserve and resource base through exploration on existing licences ● Wallace Drilling on contract ● in house banka drills ● Acquire additional mineral properties ● criteria ● Turners’ Peninsular

Expansion programmes - rutile ● Dredge D2 ● Commission in Q4 2007 ● 3,000 tonnes of structural elements imported ● Will add 100,000 tpa to production capacity ● Dredge D3 ● Dredge purchased ● Being readied for shipment to SL ● Will add 40,000 tpa to production capacity ● Land plant upgrade ● Engineering phase underway ● Completed by Q4 2007

Exploration ● Targeting prospective areas within existing tenures ● Additional bauxite deposits at Sierra Minerals identified ● Sierra Rutile mine plan being amended as additional rutile found ● Turners’ Peninsular acquired in 2006 ● 40km from current operations ● Mineral potential identified by Geological Survey of Sierra Leone ● Predominantly ilmenite and zircon ● Exploration underway

Performance in 2006

Operating performance ● Sales of $51.3m ● 73,802 tonnes of rutile produced ● 13,819 tonnes of ilmenite produced ● 1,072,159 tonnes of bauxite produced ● First shipments from Nitti port ● rutile, May 2006 ● bauxite, February 2006 ● New HFO power station purchased

2006 TiO2 production volumes tonnes 25000 20000 Ilmenite 15000 Standard rutile Industrial 10000 rutile 5000 0 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr

2006 Bauxite production volumes tonnes 350,000 300,000 250,000 200,000 Bauxite 150,000 100,000 50,000 0 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr

Health and safety ● Key determinant of operating performance ● Long Term Injury Frequency Rate of 0.36 in 2006 ● HIV/AIDS awareness campaign developed in partnership with NGOs ● Developing voluntary testing, counselling and treatment programme for HIV/AIDS

Environment and communities ● Facilitating the Darwin Experimental Project to develop practical methods for successful reclamation and conservation programmes ● Surface rent payments to local communities and agricultural development fund ● Local pop. has grown from 5,000 people to 105,000 people ● Not for profit Sierra Rutile Foundation established ● bio fuel conversion plant ● Sierra Minerals planting and rehabilitation programmes underway

Financial Results Year 2005 – 2006

Profit & loss statement 2006 2005 ($ ‘000) ($ ’000) Sales 51,304 337 Cost of sales (29,764) (98) Gross profit 21,540 239 Other income 2,812 1,721 Operating expense (58) (2,598) Administrative and marketing expenses (16,011) (14,828) Other expenses (5,866) (1,606) Operating profit / (loss) 2,417 (17,072) Exceptional item (2,200) - Finance costs (1,694) (489) Loss before taxation (1,477) (17,561) Income tax 35,923 3,984 Profit / (loss) for the period 34,446 (13,577)

Balance sheet ($ ‘000) 2006 2005 ($ ‘000) 2006 2005 Non-current assets Share capital 198,160 194,951 Property, plant and 92,665 61,279 equipment Revenue reserve (deficit) 20,869 (13,577) Intangible assets 13,115 12,985 Equity holders’ interest 219,029 181,374 Non-current 753 1,367 Liabilities receivables Deferred tax assets 86,373 50,304 Borrowings 36,856 28,390 Provision for liabilities 192,906 125,935 2,150 2,150 and charges Current assets 39,006 30,540 Inventories 15,054 7,155 Current liabilities Trade and other Trade and other 14,275 8,777 16,464 9,625 receivables payables Cash and cash 52,393 79,682 Current tax liabilities 85 10 equivalents 81,722 95,614 Borrowings 44 - Total equity and Total assets 274,628 221,549 274,628 221,549 liabilities

Conclusion ● One of the world’s largest natural rutile deposits ● High quality rutile production sold under long term off take contracts to world class chemical companies ● Established premium-grade metallurgical bauxite reserve base and long term off take agreements ● Well-established infrastructure and support from the Government ● Experienced and highly successful management team ● Cost mitigation projects expected to make the Sierra Rutile mine one of the lowest cost producers of natural rutile ● On track to double rutile production rates and extend bauxite reserves within current financial year ● Possibility of significant expansion of production and proved reserves on existing licence areas ● Several different growth initiatives currently under evaluation

Jean Raymond Boulle Corporations, Titanium Resources Group (Trg) Presentation

by Boulle Vortal on Oct 19, 2009

Accessibility

Categories

Tags

Upload Details

Usage Rights

1 Embed 9

Statistics

Jean Raymond Boulle Corporations, Titanium Resources Group (Trg) Presentation — Presentation Transcript