Gary Billingsley, Executive Chairman of Great Western Minerals Group, discussed the company's integrated approach to rare earth production from its Steenkampskraal mine in South Africa. The presentation highlighted GWMG's plans to build mixed chloride and separation plants near the mine to process rare earth ore into individual rare earth oxides. It also noted progress made in 2011 to refurbish the Steenkampskraal mine site and exploration work confirming the high-grade resource.
1. RARE EARTHS, SPECIALITY
& STRATEGIC METALS
INVESTMENT SUMMIT
Integrated approach & South A
Africa opportunity
Gary Billingsley – Exec Chair
rman,
Great Western Minerals Groupp
IRONMONGERS’ HALL, CITY OF LONDON ● TUESDAY-WEDNESDAY, 13-14 MA
ARCH 2012
www.ObjectiveCapitalConferences.com
2. Integrated Approach and South A
Africa Opportunity
Gary Billingsley, Executive Chairman
y g y,
Objective Capital
Rare Earths, Specialty & Strategic Metals
Investment Summit
14 March 2012, London
15 March 2012, Edinburgh
TSX.V: GWG OTCQX: GWMGF inf
fo@gwmg.ca www.gwmg.ca
3. Safe Harbour
S f H b
Cautionary Note On Forward-Looking Statements
• "Forward looking statements include, but are not lim
Forward-looking include mited to statements regarding projected processing
to,
capacity, output and revenue, GWMG’s continued advancement of its mineral exploration, projects,
processing operations and business plans. When u using this presentation, the words “potential”, “anticipate”,
“estimate”, “
“ ” “forecast”, “
” “believe”, “
” “expect”, “
” “may” “
”,
” “project”, “
” “plan” and similar expressions are intended to
”
be among the statements to identify forward-looking statements.“
• Although GWMG believes that its expectations refleected in these forward-looking statements are reasonable,
reasonable
such statements involve risk and uncertainties and no assurance can be given that actual results will be
consistent with these forward-looking statements. R
Readers are advised to refer to GWMG’s current Annual
Information Form available at www.sedar.com f a f ll description of risk f t
I f ti F il bl t d for full d i ti f i k factors.
• GWMG shall not be liable or responsible for any cla or damage, directly or indirectly, special or
aim
consequential,
consequential incurred by the user arising out of th interpretation reliance upon or other use of the
he interpretation,
information contained in this presentation.
3
4. GWMG Highlights
GWMG is on track to become a leading fully integrated rare earth producer
and processor outside of China, with a s
sustainable competitive advantage.
A fully integrated rare earth company:
• Increasing importance of ex-China source es
• From production at Steenkampskraal to a sales (LCM and GWTI)
alloy
• Ownership of value chain = higher expect profit margins for GWMG and security
ted
of supply for customers
Flagship Steenkampskraal mine - a uniq project with significant potential:
que
• Main Zone historic estimates contained [RREO] grades of 16.74%(1), total [REO]
grade of 11.6%(1)
g
• Favorable distribution of heavy rare earth of approximately 8%(1) of total REO
hs
• Historic mineralization (and mine working remains open along strike and at depth
gs)
Great Western - a comprehensive strateg gy:
• Restart production, build a mixed rare ear chloride plant at Steenkampskraal and
production rth Steenkampskraal,
a separation plant near Steenkampskraal l
• Significantly expand alloy production capa at LCM
acity
3
(1) Based on historical non-NI 43-101
1-compliant data. See Cautionary Note on Forward-Looking Statements.
5. Global Rare Earth Dem
mand
Key elements of anticipated global demand for R
Rare Earth Oxides:
2010 D and 2015 D
Dema d Demand I
d Increase
(Tonnes) (Tonnes)
Permanent Magnets 26,000
26 000 40,000
40 000 54%
NiMH Batteries, Catalysts 22,000 36,000 64%
Phosphors 8,500 12,500 47%
Chinese Demand 70,000 120,000 71%
By 2015, the most significant surpluses of REOs will include:
2015 s
Supply exceeds demand by
y:
Lanthanum 13%
Cerium 26%
Praseodymium 45%
Samarium 144%
By 2015, the most significant shortages of REOs will include:
s
Demand exceeds supply byy:
Europium 33%
Terbium 42%
Dysprosium 48%
Erbium 50% Sources: IMCOA
5
6. Global R
Gl b l Rare Earth Sup l
E th S pply
Key locations of current REE Reserves a Production include (in tonnes):
and
Reserve
es Production
United States 13,000,000 0
Australia 1,600,
1 600 000 0
China 55,000,000 130,000
Global Total (Includes Others) 114,000,
114 000 000 134,000
134 000
The history of the Chinese export quota is as follows:
as
Quota (Tonnes) % Chang Over Prior Year
ge
2005 65,609
2006 61,821 - 6%
2007 60,074 - 3%
2008 56,939 - 5%
2009 50,145
, -12%
2010 30,258 -40%
2011 ,
30,184 -0.2%
2012 Same as 2011 ------
Sources: IMCOA
6
7. GWMG Corporate Stru
ucture
Gre t
G eat
Westtern
Mine
erals
Gro
oup
Lt .
td
Various % 100% 100% 75% 100% 100%
North (Planned) GQD
American Rareco Marketing Joint LCM GWTI
Exploration Co. Venture
74%
Hoidas Lake
Douglas River Tax Effective Steenkampskraal Birkenhead, Troy,
Red Wine SKK Location Region U.K Michigan
Benjamin River
(
(Steenkampskraal)
p )
B.E.E.
BEE
(26%)
7
8. GWMG Management Team
M t
Gary Billingsley Jim
J Engdahl David Kennedy
C.A., P.Eng., P.Geo. P.Eng., MIMMM
EXECUTIVE CHAIRMAN PRESIDENT & CEO
P CEO RARECO
CEO,
Russell Grant Vern Kiss
V Mike Der
Mik D
B.Sc. Tech. B.Comm., LL.B.
B.A., LL.B.
B
SENIOR V.P., CORPORATE
V.P., CORPORATE
V
BUSINESS DEVELOPMENT COUNSEL
DEVELOPMENT
D
Jim Davidson John Pearson
Richard Hogan
R M S PG
M.Sc., P.Geo.
B. Comm., C.A. M.S Eng.
Sc. V.P., EXPLORATION
V.P. FINANCE, V.P OPERATIONS
P.,
CHIEF FINANCIAL
OFFICER
Brent Jellicoe Dr.
D Ian Higgins Dr. Baodong Zhao
B.Sc., P. Geo. Ph. D., MIMMM
M.Eng., Ph.D. , P.Eng.
DIRECTOR,INT L
DIRECTOR INT’L DIRECTOR,
DIRECTOR METALS
D MANAGER,
EXPLORATION AND ALLOYS
A METALLURGY
8
9. GWMG’s Fully I
GWMG’ F ll Integra d Model
ated M d l
GWMG’s fully integrated model adds a sustainable competitive advantage
Exploration • Drilling Results & Mine Development Plan
Mining • Ore
Mixed Chloride Production • Concentrate and Mixed Rare Earth Chloride
Solvent Extraction Separation • Individual Rare Earth Oxides
Metal Making
g • High Purity Rare Earth Metals
g y
Alloy P
Production
• Magnet alloys, super-alloys &
other end-user metal alloys
Ind
dustry Product Manufacturing
• Industriall, Consumer & Military End Products
9
10. GWMG: M i t i i Control
GWMG Maintaining C t l
• Mining:
• GWMG owns 74% of the SKK miniing operation
• GWMG owns 100% of the SKK min output
ne
• Mi d Chloride Production:
Mixed Chl id P d ti
• GWMG owns 100% of chloride pro
oduction plant
• Solvent Extraction Separation:
• GWMG owns 75% of separation plant, 100% of oxide
production through GWMG market ting company
• Marketing company has chloride se eparated on a
tolling basis, retaining 100% GWMG control
• Metal Making:
• GWMG owns 100% of metal makin that buys
ng
GWMG produced oxides
d d id
• Alloy Production:
• GWMG owns 100% of LCM and GWTI that
manufacture alloys from GWMG ow
y wned metal
1
0
11. Mixed Chloride Solvent Alloy
Exploration
E l ti Mining Production Extraction
Separation
Production
GWMG Exploration Priorities:
Steenkampskraal:
•Complete National Instrument 43 101 techn
43-101 nical report
report.
•Confirm historical data and expand size of r
resource.
Hoidas Lake:
•Update previously completed NI 43-101.
•Continue to work on metallurgy to evaluate
gy
production potential.
Douglas River, Benjamin River, Red Wine e:
•Continue early stage exploration, focused o heavy
exploration on
rare earth elements.
•Focus on exploration activities t generate rare earth f d t k
F l ti ti iti to t th feedstock
for future supply to GWMG alloy processing operations.
11
12. Mixed Chloride Solvent Alloy
Exploration
Mining
Mi i Production Extraction
Separation
Production
Steenkampskraal Background:
•Former operating thorium mine.
•Excellent infrastructure with paved
Excellent
and gravel roads.
•In close proximity to rail and sea port
In sea-port.
•474 hectare property permitted to
current mining requirements.
•One of the highest grade RE deposits: 16.7
74% REO
(based on historical non-NI 43-101-compliant data supplied b Rareco and reviewed by
by
GWMG management).
•Exploration potential.
•Nuclear License allows thorium processing, extraction, storage
,
and handling.
12
13. Mixed Chloride Solvent Alloy
y
Exploration
Mining
Mi i Production Extraction
Separation
Production
Steenkampskraal Project Steps Complete in 2011:
ed
•June: Launched mine site refurbishment.
•June: Hired Extraction, Processing Plant maanagers.
•July: Acquired 100% of Rareco.
•July: Heads of Terms with GQD for Separa ation plant.
•July: Contracted Processing plant design t
July: team.
•August: Hired Monazite expert.
•August: Appointed Director of International Exploration
Exploration.
•August: Mine site refurbishment on schedule.
•September: S l t d ill contractor f explor ti
S t b Select drill t t for l ration.
•November: Appointed Kennedy as Rareco C CEO.
•November: Appointed Kabaah as Mine Man nager.
•December: Executed planned exploration program.
g
•December: Refurbished mine shaft and facilities.
13
14. Mixed Chloride Solvent Alloy
y
Exploration
Mining
Mi i Production Extraction
Separation
Production
Steenkampskraal Current Project Steps 2
2012:
January:
•Completed and signed Solvent Extraction S Separation plant Joint
Venture.
•Finalized first phase of drill program designe to confirm historical
ed
data and expand resource
resource.
February:
•Complete design work for Mixed Chloride P Production plant
plant.
•Launched second phase of Steenkampskra drill program to test
aal
extension of mineralized vein system.
t i f i li d i t
•Refurbishment of mine shaft continues in ad dvanced stages.
•Site preparation work continues in advanced stages.
d
•Separation p
p plant design and environmental work progressing at
g p g g
scheduled pace.
14
15. Mixed Chloride Solvent Alloy
Exploration
Mining Production Extraction
Separation
Production
Steenkampskraal decline entrance February 2011 Entrance to decline August 2011
Decline refurbishment materials arrive at site September 2011 Top 45 feet of decline concrete work complete September 2011
15
16. Mixed Chloride Solvent Alloy
Exploration
Mining Production Extraction
Separation
Production
Drilling activity at Steenkampskraal October 2011 Drill core from Steenkampskraal exploration October 2011
Rails readied for shaft refurbishment November 2011 Mine shaft being refurbished December 2011
g
16
17. Mixed Chloride Solvent Alloy
Exploration
Mining Production Extraction
Separation
Production
Site prep adjacent to mineralized rock dump January 2012 Fleet of equipment at Steenkampskraal January 2012
Final rails for shaft refurbishment January 2012 Mine shaft refurbishment nearing completion February 2012
17
18. Alloy
Exploration Mining Mixed Ch
hloride Solvent
Extraction
Production
Producction Separation
Plans for Mixed Chloride Production Plan
nt:
•To be located at Steenkampskraal mine site e.
•Design work i process th
D i k in through DRA Mi rals.
h Miner l
•Design upgraded to allow capacity of 12,000 tonnes
0
per annum of rare earth chloride solution.
•Beneficiation:
• Produces a mineral concentrate
• Crushing milling, and concentration te
Crushing, milling echnology
• To use gravity, magnetic, and flotation techniques.
n
•Removal of thorium in the processing stage e
•Leaching:
• T produce a li id chloride.
To d liquid hl id
• Using mineral concentrate, produces a liquid sulphate,
nitrate, or chloride (RECl3) of mixed ra earths.
are
18
19. Mixed Chloride Alloy
Exploration Mining Production Solvent Production
Extraction
Plans for Separation Plant: Separation
•Heads of Terms signed with Ganzhou Qiand dong Rare Earth
Group (GQD) July 25 2011
25,
•Final Agreement for separation plant signed and announced
d
January 10, 2012 with highly experienced GQ
10 QD
•New joint venture company, Great Western GQD Rare Earth
Materials Co. Ltd. (GWGQD) has been creat ted:
• 75% GWMG ownership
• 25% GQD ownership
• GWMG Board control position
p
•GWGQD to be responsible for the design, m manufacture,
construction,
construction commissioning and operation o of
separation facility.
• To be located in proximity to Steenkammpskraal mine site
site.
• Plans call for capacity expansion from 2,700 t.p.a. to
m
5,000 t.p.a. once operational.
19
20. Mixed Chloride
Exploration Mining Production Separation Alloy Production
Highlights of Less Common Metals:
• Trading g
g globally: European Union 60%, J p , China,
y p , Japan, ,
Taiwan 30%, United States 10%
• Focused on permanent magnet industry
• Significant supplier of NdFeB alloys
• Supplies 20% of world’s Samarium Coba Alloy
world s alt
• 20 years of high quality production
• Operates both co-reduction and specializ casting
O zed
techniques for producing rare earth alloys s
• Expanding existing facility and Installing n
new processes
for production of rare earth metals
p
20
21. Mixed Chloride
Exploration Mining Production Separation Alloy Production
LCM Expansion:
• 400% capacity expansion driven by full s support of major
customers from Europe and Japan seeki NdFeB alloy.
ing
• New state of the art facility leased in sam locale as existing
y me g
plant.
• First special casting furnace now installe and being
ed
commissioned.
• Second furnace order in process
• First phase of metal-making to be located at LCM
d
• Objective is to process all GWMG output of Nd,
t
Pr, Sm and Dy at LCM or GWTI
• The fully integrated model, demonstrate increase in alloy
ed
capacity and secure supply chain will fur
p y pp y rther solidify already
y y
strong customer relationships.
21
22. Mixed Chloride
Exploration Mining Production Separation Alloy Production
GWTI Highlights:
• Located in Troy, Michigan, USA
y g
• Strategic asset for revitalization of the Ra Earth industry in
are
the United States
• Has undertaken work related to U.S. stra ategic initiatives in
the rare earth sector
• Versatile production capacity including:
• Permanent magnet alloys
P t t ll
• NiMH alloy for rechargeable batteries
• “Super Alloy” production for aerospace m materials
• Hydriding capability for solid-state hydrog
y g p y y g gen-storage alloys,
g y
both rare earth and transition metal types s
22
23. Projected O t t
P j t d Outputs – Selected Elements
l t d El t
* Hypothetical model based on standard Monazite REO distribution, assumes approximately 5,000 t.p.a. available
To Off-Takes,
Off-Takes
REO Production* To LCM
REO Market
(Tonnes) (Tonnes)
(
(Tonnes) )
Lanthanum 1,084.0 77.0 1007.0
Cerium 2,334.0
2 334 0 2.0
20 2332.0
2332 0
Praseodymium 250.0 166.0 84.0
Neodymium 834.0
834 0 834.0
834 0 0.0
00
Samarium 125.0 74.0 51.0
Dysprosium
D i 34.0
34 0 34.0
34 0 0.0
00
Yttrium 250.0 0.1 249.9
TOTAL OF ALL
15 ELEMENTS 5,015.9 1,185.4 3830.5
(Tonnes)
(T )
23
24. GWMG Milestones
Mil t
GWMG focuses on major milestones:
• Early 2012: Complete refurbishment of
mine shaft and ancillary surface facilities
• Early 2012: Operate at expanded furnace e
capacity at LCM
• 1st Half 2012: Complete NI 43-101 at
Steenkampskraal
• 2nd Half 2012: Launch mining operations at
Steenkampskraal
• December 2012: Complete Mixed Chlorid
p de
Production Plant
• Early 2013: Complete Separation Plant
• 1st Half 2013: Begin production with minin mixed
ng,
chloride production and separation
separation.
24
25. GWMG Overview
O i
Shares Outstanding / Fully Diluted
413.2
413 2 mm / 508 0 mm
508.0
(as at February 22, 2012)
Share Price (as at March 09, 2012) $0.57
52 week High / Low (March 09, 2012) $0.98 / $0.39
Market Cap (as at March 09, 2012) $217.4 Million
Cash on hand (as at September 30, 2011) $5.3 Million
Insider Holdings / F ll Dil t d ( t )
I id H ldi Fully Diluted (est.) 1.9% 12.0%
1 9% / 12 0%
Institutional Holdings (est.) 36%
25