Organizational Structure Running A Successful Business
Minemakers AGM Presentation - November 2013
1. 2013 Annual General Meeting
Cliff Lawrenson
Managing Director
ASX: MAK | TSX: MAK
2. Corporate Snapshot
KEY STATISTICS
BOARD OF DIRECTORS
Ordinary shares on issue
247.5m
Share price
A$0.16
RICHARD (DICK) BLOCK - Non Executive Chairman
Market capitalisation
A$40m
Dick Block is a US based mining and processing industry
executive with four decades experience in the fertiliser, base and
precious metal sectors.
Debt
Nil
Cash – 30 September 2013
A$26.6m
Enterprise value
A$13.4m
ASSETS
CLIFF LAWRENSON - Managing Director
Cliff Lawrenson joined Minemakers in May 2012. He was
previously CEO of FerrAus Ltd which he led to a recommended
takeover by Atlas Iron Ltd. From 2006 Mr Lawrenson was Group
CEO of GRD Ltd which incorporated GRD Minproc Ltd,
OceanaGold Ltd and Global Renewables.
Wonarah Project, NT
100%
JDCPhosphate Inc
6.5%
Australian Minerals & Mining (ASX:AKA)
4.6%
RICHARD O’SHANNASSY - Non Executive Director
Niuminco Ltd (ASX:NIU)
3.6%
Richard O'Shannassy is a commercial lawyer with over 30 years
experience in the mining and energy sectors.
SIGNIFICANT SHAREHOLDERS
IAN McCUBBING - Non Executive Director
Vulcan Phosphate
5.6%
Laguna Bay
4.6%
Ian McCubbing is a Chartered Accountant with more than 25 years
corporate experience, principally in the areas of corporate finance
and M&A, working predominantly with ASX listed companies.
2
3. Where are we now?
Completed Q2 2013: Strategic cornerstone investment from Vulcan Phosphate
Completed Q2 2013: NT Government grant environmental approval for IHP
Progressing Q4 2013: Optimisation IHP technology post commissioning Florida plant
Progressing: Advancing validation of JDCP’s IHP technology & superphosphoric acid (SPA)
Progressing: Feasibility study for integrated mining & processing at Wonarah
Progressing: Investigation of complementary IHP & SPA related opportunities
Strategic
Outcome
Progressing: Finance & Construction of IHP plants
Progressing: Market development for added value SPA acid derived products
Progressing: Production of SPA
3
4. Phosphorus – An Essential Element
Phosphorus (P) is essential for the existence of life and is present in every living cell. As a ‘staple
molecule for life’ it is consumed by plants and animals daily. Rock phosphate contains essential P as a
phosphate compound that is extracted as phosphorus pentoxide (P2O5) for commercial applications.
World Phosphate Demand by 2020
Forecast by Region (MT P2O5)
No Substitute
There are no other substitutes for phosphate. It is
an irreplaceable finite resource
Essential Role in Sustaining Life
Phosphate is responsible for ATP intracellular
energy transfer - “molecular unit of currency”
Phosphate make up the backbone of DNA, RNA, &
phospholipids
Phosphate groups are essential to cellular
communication
Cell membranes are made of a phosphate group,
glycerol, & two fatty acid chains
EUROPE +10.2%
N. AMERICA +13%
2010 5.2
2020 5.9 5.2
5.9
2010 4.9
2020 5.4
Phosphate Food Security
Modern agriculture is reliant on phosphate derived
fertilisers to sustain 40% of world food production
To feed a larger and more urban global population,
world food production must increase 70% by 20502
Source 1Stephen Jasinski, US Geological Survey, January 2013
Source 2 How to Feed the World in 2050, FAO, 2009
2010
2020
14.7
17.7
S. ASIA +11%
2010 9.1
2020 10.1
Finite Resource
The MENA region holds 85% of the world reserves
of rock phosphate1
Australia has a significant untapped resource of
high grade rock phosphate with low contamination
E. ASIA +20.4%
L. AMERICA +47%
2010 6.1
2020 9
OCEANIA +41.6%
2010
2020
1.2
1.7
WORLD +21.6%
2010
2020
45.7 Million Tonnes P2O5
55.6 Million Tonnes P2O5
Source: A Global Perspective on the Resources and Future Supply of Phosphorus for Agriculture,
Lars Stoumann Jensen, May 2012
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5. Why Fertiliser?
World Fertiliser Facts
NPK – Macro Nutrient Basics
Global nutrient sales to reach 255m tonnes by 2017
Nitrogen (N) - fulfils plant’s yield potential
Converted to amino acids as the building block for protein
Produced from gas, coal & renewable energy
Fertiliser industry is investing US$150bn between 2012
and 2017 to fulfil global demand
55 to 85% of all soils are deficient in NPK
Phosphorus (P) - creates plant’s yield potential
Backbone of DNA & RNA critical throughout plant lifecycle
Produced from sedimentary deposits rich in phosphate
The share of phosphate fertilisers based on phosphoric
acid rose from 75% in 2000 to 89% in 2012
Global demand for phosphoric acid will reach 46.5 million
tonnes by 2017 (39.8m tonnes for fertiliser)
Potassium (K) – controls movement of key inputs
Increases use of water, protein, nutrients & carbohydrates
Produced from ash, sedimentary salts & sea water
In 2015, the global fertiliser market is forecast to have a
value of US$172bn, an increase of 32% since 2010
Top Ten N-P-K Consumers 2011/12 (‘000 metric nutrient tonnes per year)
N
Rank
1
2
3
China
India
United States
4
5
6
7
8
9
10
Rest
World
Brazil
Pakistan
Indonesia
Canada
France
Germany
Russia
P2O5
34,084 China
17,398 India
11,884 United States
3,366
3,129
3,123
2,160
2,087
1,721
1,600
27,149
107,699
Brazil
Australia
Canada
Argentina
Bangladesh
Pakistan
Indonesia
K2O
11,500 China
8,336 United States
4,001 Brazil
3,859
873
733
700
689
621
580
9,183
41,075
India
France
Poland
Bangladesh
Thailand
Syria
Germany
5,200
4,436
4,431
3,624
546
478
468
457
433
400
8,923
29,396
Source: International Fertilizer Industry Association Statistics 2011/12
P
N
Nitrogen
61%
Phosphate
23%
178 Million
Tonnes / Yr
K
Potash
16%
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6. Wonarah Project – Northern Territory, Australia
100% owned by Minemakers
Australia’s largest JORC and NI43-101 compliant phosphate
resource
Measured + Indicated Resource 300Mt @ 18.2% P2O5
Inferred Resource 542Mt @ 18.0% P2O5 (10% cut-off)
Only 15% of known phosphate currently drilled to enable a
resource estimate
NT Major Project Status awarded
Excellent installed infrastructure
• Abundant water available on site
• Natural gas at Tennant Creek
• Barkly highway (bitumen) to Tennant Creek
• From Tennant Creek; rail north to Darwin for export or
South to access domestic fertiliser markets
• Darwin import facilities available for raw materials
Mining Agreement with Traditional Owners in place
NT EPA has approved Mining Management Plan assessment
process for IHP operations.
No further environmental approvals required
Good levels of interest from 3rd party funding providers
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7. Wonarah Project Opportunity
Significant competitive advantage via exclusive
rights to the Improved Hard Process (IHP)
technology, currently in final validation by
JDCPhosphate
MODELLED PALAEOSURFACE AT WONARAH AT THE
TIME OF PHOSPHATE DEPOSITION, SHOWING
DRILLING AND TENURE
Feasibility Study (FS) focusing on utilising IHP,
with completion expected H2 2014
Fully funded for FS through to Financial
Investment Decision (FID)
Simple open cast mining
Transport cost sensitivities mitigated by on-site
production of high-value superphosphoric acid
(SPA)
Lower initial capex requirements utilising IHP
technology
Plant commissioning expected late 2015 early
2016 once FS completed
Resources (10% Cut-off)
Resources (5% Cut-off)
Category
Mt
%P2O5
Category
Mt
%P2O5
Measured
78
20.8
Measured
82
20.2
Indicated
222
17.5
Indicated
391
13.2
Inferred
542
18
Inferred
933
13
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8. Infrastructure Advantage – Built and Available
Barkly Highway
Adelaide – Darwin Rail
East Arm Bulk Facility - Port of Darwin
Gas Pipeline
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9. The Phosphate Product & Value Chain
Current Price FOB Morocco: Rock Phosphate - US$140 - 150/tonne
Superphosphoric Acid US$1,000 - 1,500/tonne
80%
SPA
MGA
Percentage P2O5 Content
60%
DAP / MAP
50%
Crop Fertiliser
SSP / TSP
40%
Pasture Fertiliser
30%
Inputs - Rock
Phosphate &
MGA
Inputs - Rock
Phosphate &
Sulphuric Acid &
Ammonia
Intermediate
Product
Inputs - Rock
Phosphate and
Sulphuric Acid
DAP/MAP
Inputs - Rock
Phosphate,
Silica & Pet
Coke
Rock Phosphate
Direct application
Fertiliser
10%
Liquid fertilisers,
phosphorus food
products &
chemicals
Minemakers Target
Market
Primary
downstream feed
Selling Price FOB Morocco (US$)
70%
20%
1,200
Premium
intermediate
product
150
0%
SPP Single superphosphate
TSP
Triple superphosphate
DAP Diammonium Phosphate
MGA Merchant Grade Phosacid
MAP Mono Ammonium Phosphate
SPA Superphosphoric Acid
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10. Wet Acid Process (WAP) vs Improved Hard Process (IHP)
IHP produces higher value SPA off a lower capex base with improved environmental credentials
TRADITIONAL WET ACID PROCESS (WAP)
vs
IMPROVED HARD PROCESS (IHP)
Mining
Mining
Beneficiation to 30% P2O5
Beneficiation to 15-20% P2O5
Sulphuric acid introduced to produce phosphoric
acid
Blended with pet coke and silica
Filtration to remove phosphogypsum
Roasting in ported rotary kiln driving off a
phosphorus rich P4O10 gas
Dilute phosphoric acid passed through
condenser to produce Merchant Grade Acid
(MGA) contained ~54% P2O5
Hydration process – to produce more
concentrated solution – superphosphoric acid
(SPA) contained ~70% P2O5
Introduction of ammonia for granulation or
further processing purification to 68% P2O5
Used directly or blended according to application
By-product - environmentally challenging
phosphogypsum with no commercial value
By-product - low environmental impact and inert
J-Rox (spent pellets) used as cement additive or
aggregate
Landfilled phosphogypsum require management
long after end of plant life
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11. 21ST CENTURY
TECHNOLOGY
Technical & Food Grade Acid – 70%
FOOD INDUSTRY
Processing Technologies
Alkali Phosphates - cleaning & detergent
Catalysts - aluminum phosphate catalysts
Cheese & Beverages - acidulant
Fats & Oils - Emulsifier & degumming
agent for vegetable oil purification
Superphosphoric Acid – 68%
LIQUID FERTILISERS
GRANULAR FERTILISERS
•
•
•
•
•
•
$1,000 /mt P2O5
•
•
•
•
10-34-0 liquid APP fertiliser
Direct foliar feed
STPP
Waste sludge treatment
Metal finishing
Bioremediation – lead
Phosphoric Acid – 45%
•
•
•
•
$500 /mt P2O5
CATALYSTS
IMPROVED HARD PROCESS
WET ACID PROCESS FURTHER MGA PURIFICATION
ROCK
ELECTRIC ARC PROCESS
20TH CENTURY
TECHNOLOGY
DAP 18-46-0
MAP 11-52-0
TSP 0-20-0
SSP 0-8-0
DIRECT APPLICATION FERTILISERS
Application
$1,500 /mt P2O5
Phosphoric Acid Value Chain
Acid Grade Value Insteps
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13. Florida Demonstration Plant – The Road to Production
March 2012
September 2012
January 2013
March 2013
July 2013
July 2013
September 2013
October 2013
Commercial Scale Demonstration Plant
Wonarah IHP Line
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15. Investment Rationale
Phosphate – an
irreplaceable commodity of
strategic importance
Vital for ensuring long term food production security
Wonarah is a world class
asset with a clear route to
profitable production via
IHP technology
100% ownership of Wonarah
Significant cash-backing
with low cash burn;
supportive expert investor
Strategic location in a politically stable environment
Australia has the opportunity to become Asia’s food bowl
Exclusive access to IHP technology
Producing high value SPA reduces sensitivity to transport and logistical
costs
Strong cash position
Sufficient funding to complete FS in 2H 2014
Cash burn minimised
Vulcan Phosphates, expert fertiliser investor, 5.7% holding in MAK
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16. Level 2, 34 Colin Street, West Perth Western Australia 6005
Ph: +61 (0)8 9264 7000 Fax: +61 (0)8 9264 7099
THANK YOU
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