Carnegie
Nordic Mining Seminar
Stockholm, 31 August 2010
Exploration and production of high-end minerals and metals
Nordic Mining ASA | N-0250 Oslo | Norway | Tel +47 22 94 77 90 | Fax +47 22 94 77 01 | Org. no 989 796 739 | [email protected]
1
Disclaimer
This document has been used by Nordic Mining during an oral
presentation. Therfore, this document is incomplete without the oral
explanations, comments and supporting instruments that were submitted
during the referred presentation. To the extent permitted by law, no
representation or warranty is given, express or implied, as to the
accuracy of the information contained in this document.
Some of the statements made in this document contain forward-looking
statements. To the extent permitted by law, no representation or
warranty is given, and nothing in this document or any other information
made available during the oral presentation should be relied upon as a
promise or representation as to the future condition of Nordic Mining’s
business.
2
Outline
1.
Company overview
2.
g
– Titanium rutile p
project
j
Engebø
3.
Keliber - Lithium project
4.
Gudvangen Stein - Anorthosite production
5.
Summary
3
Company overview
Strategic position in high-end minerals
Engebøfjellet (100%)
Titanium
Rutile/Garnet
Resource estimate
383 mill. tons
Mineable ore estimate
250 mill. tons
Lifetime
50 years
W, Mo
Th
Si,Au
¾ Will be Europe’s largest producer
of natural rutile (TiO2)
Gudvangen Stein
(100%)
Anorthosite
Resource estimate
>500 mill. tons
Mineable ore estimate
>400 mill. tons
Current production
200 000 tpa
Mo
Coal
Iron ore
Keliber Oy (68%)
Lithium
Resource estimate
>3 mill. tons
Mineable ore estimate
>1.8 mill. tons
Lifetime
>10 years
¾ Will be Europe’s first producer of
lithium carbonate
¾ Mine in operation – upside potential
in new products and applications
Aggregates,
sand and gravel
Ni, PGM
Industrial
metals &
minerals
Low-end
Low
end
Industrial
metals &
minerals
High-end
High
end
Precious
metals
Diamonds
4
Company overview
Solid team and shareholder structure
Management team
Ivar S. Fossum, CEO; 20 years experience
from management positions in Hydro,
Hydro Yara and
FMC Technologies
Lars K. Grøndahl, CFO; More than 20 years
experience from industrial management
positions,
iti
i.a.
i
Aker
Ak G
Group, S
Scancem Group
G
and
d
Heidelberg Cement
Ottar Nakken, VP Commercial; Former Vice
President Hydro Agri North America and COO of
Jebsen Management
Paul I. Norkyn, VP Mining Operations;
Former R&D Manager in Titania (Kronos
Group), 30 years experience from the Titania,
Sydvaranger, Bleikvassli and Grong mining
operations
Mona Schanche, Exploration Manager;
Resource g
geologist
g
from University
y in
Trondheim, former project geologist in Titania
(Kronos Group)
Largest shareholders
As per 30 August 2010
Number of
shares
h
Rank
Name of shareholder
1
DAG DVERGSTEN AS
2
SKAGEN VEKST
7 915 000
6,3 %
3
HOLBERG NORGE
7 500 000
6,0 %
4
FINNISH INDUSTRY INVESTMENT LTD.
6 000 000
4,8 %
5
JP MORGAN C HASE BANK NORDEA
5 010 454
4,0 %
6
DYBVAD C ONSULTING AS
3 530 788
2,8 %
7
MP PENSJON
3 270 000
2,6 %
8
NORDNET BANK AB
3 036 617
2,4 %
9
Ø
LARS K.
GRØNDAHL
2 514 851
2,0
, %
10
SOLON AS
2 242 333
1,8 %
11
SNATI AS
2 201 628
1,8 %
12
KLEM TERJE JOHANNESSEN
1 873 230
1,5 %
13
DNO INVEST AS
1 806 442
1,4 %
14
DYBVAD AUDSTEIN
1 802 184
14%
1,4
15
VPF NORDEA SMB
1 582 000
1,3 %
8 469 145
%
6,7 %
Top 15 shareholders
58 754 672
46,8 %
Others
66 715 419
53,2 %
Total
125 470 091
Share price
NOK 1.10
Market cap
MNOK 138/MUSD 22
Enterpr. value
MNOK 147/MUSD 23
Shares issued
Options
Fully diluted
100,0 %
125,470,091
3,500,000
128,970,091
Net debt
MNOK 9
(interest bearing)
5
Outline
1.
Company overview
2.
g ø - Titanium rutile p
project
j
Engebø
3.
Keliber - Lithium project
4.
Gudvangen Stein - Anorthosite production
5.
Summary
6
Engebø rutile project
Engebø, a unique titanium rutile project
KEY ADVANTAGES:
• Will be Europe’s largest producer of natural
rutile
l ((Titanium d
dioxide
d TiO2)
• 50 years mine life
• NPV > USD 350 million
• Confirmed attractive deposit:
International interest from industrial and
financial companies incl. funding/ownership
proposal
¾ High grade product (can deliver up to 97%
titanium dioxide)
¾ Natural rutile is the preferred titanium
feedstock over the different ilmenite
sources
¾ Low on radioactive elements (high
radioactive content is a problem with many
of the other rutile deposits)
¾ Located next to deep sea port
¾ Short distance to large European
market
Norway has 100 yrs titanium experience (ilmenite); invented TiO2-pigment
7
Engebø rutile project
A well defined deposit
Drilled
Planned
Exploration and analysis
• 15,000
,
meters/50
/
holes
• 1,129
surface samples
• >50,000
sample analysis
• Block model – ordinary kriging
Resource class
JORC
I di t d
Indicated
Inferred
Million tons
TiO2% @
3% cut-off
31 7
31.7
3 77
3.77
122.6
3.75
Open pit:
10 - 15 years
Total mineable ore :
45 million tons
Underground:
35 years
Total mineable ore :
200 million tons
P d
Products:
R il and
Rutile
d garnet
50 years mine life
Proven resource, class upgrade by drilling
8
Engebø rutile project
Significant work completed, near term milestones
• Over 40 MNOK invested in pre-studies, analysis and
verification
• Most comprehensive Environmental Impact Assessment (EIA)
in Norwegian mining industry: 34 different special reports,
12 research institutions
• First round of public hearing completed
• Local politicians in favour of project
• Due for final permits: - Industrial area permit (Municipality)
- Waste disposal permit (State)
Official
permits
Resource
model and
classification
Pilot plant
production
2010
Pre-feasibility
study
Bankable
feasibility
study
2011
Permits
Process design
completed
Off-take
agreements
C
Construction
t
ti
and
commissioning
2012 / 2014
Bankable Start of
feasibility construction
study
Start-up
Municipality permits expected in October will mark a new area
9
Engebø rutile project
Existing infrastructure, well known technology
Proven process steps
• Crushing and grinding
• Milling
• Magnetic separation
• Gravity separation
• Flotation
• Dewatering and drying
• High inten
intensity
it d
dry separation
ep
tion
Production
- Ore:
3 – 6 mill. ton/y
- Rutile:
70 – 100,000 ton/y
- Garnet:
ca. 100,000 ton/y
Employees
150 - 170
10
Engebø rutile project
Environmentally friendly products, expanding markets
Rutile (Titanium dioxide/TiO2)
Garnet
• Superior properties
• Broad range of application areas
• Advanced abrasive mineral
• Health legislation on silica drives demand
Main markets:
Main markets:
Health care
Sandblasting
Consumer/Pigments
Aircraft
Waterjet cutting
Industry/Aerospace
Various filtration and abrasives
Green tech
Price range: 300 – 500 USD/ton
Increasing price premium for natural rutile *
*
Engebø
g
g
garnet has tested favourably
y with
existing top quality waterjet products
Source: IBMA, Roskill, USGS
11
Engebø rutile project
European titanium majors are future customers
Large pigment plants for high grade feedstock:
• Huntsman Tioxide
Greatham
UK
• Kronos Inc.
Ghent
Leverkusen
Belgium
Germany
• Tronox
Rotterdam
Netherlands
• Cristal Global
Stallingborough UK
9 Substantial commercial interest confirmed by
pigment,
i
t metal
t l and
d welding
ldi
rod
d producers
d
9 Several European customers can each take
Engebø’s annual production
9 Simple logistics improves working capital,
capital
storage and planning
9 80% freight reduction, single shipments
9 10 vs.
vs 50 USD/ton freight (current freight is
10% of feedstock price)
Supply/demand pattern in Europe secures off-take of rutile
12
Engebø rutile project
Good p
profitability
y – with significant
g
upside
p
p
potential
Key figures
Revenue
$160
CAPEX:
MUSD 210
Annual revenue:
MUSD 100 – 200
$120
EBITDA-margin:
>50%
$100
NPV @ 10% WACC:
>MUSD 350
Payback
ay ac time:
e
<5
5 years
yea s
Mine life:
50 years
$140
$
$80
$44
$46
$37
$42
$32
$35
$39
$33
$70
$72
$74
$77
$ 9
$79
$81
$84
$68
$60
Large return on equity with typical 60+% loan
financing
$40
$15
$20
$33
$0
2014 E 2015 E 2016 E 2017 E 2018 E 2019 E 2020 E 2021 E 2022 E
TiO2 revenues (mill.)
Significant upside in price of rutile
Garnet revenues (mill.)
Aggregates revenue
Large upside in increased recovery
1000
550
900
500
700
NPV MUSD
NPV, MUSD
800
600
500
400
300
200
450
350
300
Base case
Target
400
Realistic
Base case
250
100
0
200
5%
7%
Annual rutile price increase
Based on 55% recovery
9%
55 %
60 %
% Recovery
65 %
Based on 5% annual rutile price increase
Further upside potential
Further growth in markets for garnet (currently assuming selling only 20% of output)
Off-take of waste rock and tailing material, e.g. for construction fundament and filling
13
Outline
1.
Company overview
2.
g
- Titanium rutile p
project
j
Engebø
3.
Keliber - Lithium project
4.
Gudvangen Stein - Anorthosite production
5.
Summary
14
Keliber lithium project
Keliber with high grade lithium
Finland
Kaustinen
• First producer of lithium carbonate in Europe
KEY ADVANTAGES:
• >10 years mine life; potential extension/
expansion based on additional deposits
¾ High +99.9% purity Li-product
• Positive NPV with JORC compliant resources
• Significant
Si ifi
t upside
id potential
t ti l
• In discussions with industrial partners for
high-end battery chemical production
¾ Excellent quality to be used for battery
production – the fastest growing lithium
segment
¾ Processing plant with significant potential for
further refining directly to battery chemicals
¾ Strong lithium/battery/electric vehicle (EV)
focus in Finland and other EU markets
15
Keliber lithium project
Significant impact on NPV with increase of mineable ore volum
First phase production from proven
deposit at Länttä
Expansion possibilities in regional
lithium resources
ƒ
Mining concession and permits for processing
and environment in place
• Several identified prosperous deposits
within 20 km range from processing site
ƒ
Approx. 50 drill holes of a total of 5,500 meters
ƒ
Exploration work by Keliber and GTK (Geological
Survey of Finland)
• Promising exploration results from 2010 field
season
ƒ
Current resource estimate (JORC compliant –
mill. tons):
)
Measured
Indicated
Inferred
Total
• Good probability for significant (3 – 5x)
increase of minable ore volume
• Priority
P i it on open pit
it resources
1.70
0.61
0.63
2 94
2.94
Länttä deposit
Process plant
16
Advanced and awarded processing method
Keliber lithium project
Ore mining, crushing, milling and flotation
Spodumene concentration and conversion
Chemical plant; Li-carbonate production
Capacity:
4,000
4
000 tpy battery grade lithium
carbonate
By-products: Tantalum concentrate,
quartz/feldspar concentrates,
crushed rock aggregates
Production:
18 – 20 months from
construction start-up
• Processing method developed in cooperation
with Outotec; process guarantees
• Keliber awarded Finnish innovation prize for
processing method and environmentally
friendly profile
• New test batch in process
Award winning processing method based on proven technology potential for refining directly into higher margin battery chemicals
17
Keliber lithium project
Large growth market driven by automotive demand
Consumption of Lithium
Price of Lithium carbonate
14
12
1 000 000
10
USD / kg
Tonnes per year
T
1 200 000
800 000
600 000
400 000
8
6
4
200 000
2
0
0
2006
Minimum demand
2010
2016
Maximum demand
2020
Jan.
04
Expected supply
Batteries, 37%
Glass, 14%
Ceramics, 16%
Aluminium, 18%
Jan.
08
Jan.
09
6
Toyota
estimate
5
4
3
2
1
0
Lithium is core material in new batteries
Li-battery market forecasted to grow 15% p.y.
____________________
Sources: MiR, NREL, IndMin, Roskill
Jan.
07
Global electric vehicle market (mill.)
Numbe
er of HEVs, mill.
Glass-ceramics,
6%
Jan.
06
Market price standard lithium carbonate
Battery grade lithium carbonate premium
premium, company estimate
Lithium carbonate consumption
Pharmaceuticals,
1%
Continuous
Other, 1%
casting, 6%
Jan.
05
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
(Small percentage of 60 million world market for new cars)
18
Lithium brings unique properties to batteries
THINK changes to Li-ion batteries
Keliber lithium project
TESLA Roadster combines power and speed
Power: 300 HP - Range: 360 km
Performance: 0–60 mph in less than 4 sec.
Battery technology properties
Lead
Acid
Ni.Metal
Ni
Metal
Hydride
Li Ion
Ultracap
25
40
60-80
5
Power/kg [W/kg
10s]]
400
1300
3000
>3000
Charge accept
[W/kg 10s]
200
1200
2000
>3000
Cost/energy
[$/kWh]
100
500
700
20 000
Energy/kg
[Wh/kg]
Sources: THINK, NREL, TESLA
• Lithium is used both in cathodes and
electrolytes
• Lithium batteries have:
- High energy to weight ratio
- High charging rate and low self
discharge rate
• Provides car industry with a ”green”
solution
19
Keliber lithium project
Upside potential in refined battery chemicals
• Keliber’s lithium carbonate is battery grade
• >99.9 lithium content
• No impurities from natrium and chloride which
is common in products of brine origin
Value
• Keliber’s processing method is unique
• High purity lithium in fluid in separate
process stage before drying and
crystallisation to lithium carbonate
USD 50 – 200 per kg
USD 9 – 12 per kg
• Potential to refine lithium fluid into advanced
battery chemicals
Processing
Significant impact on NPV with higher product margin
20
Keliber lithium project
Profitable base case – significant upside potential
Key figures
Revenue
40 000
CAPEX:
35 000
MEUR 40 – 50
Annual revenue:
MEUR 30 – 35
EBITDA-margin:
50%
EUR 1000
E
30 000
25 000
20 000
15 000
Payback time:
3 years
Ownership
68%
10 000
5 000
0
2 013
Upside potential
Increased lithium recovery
¾
Increased price for lithium carbonate
¾
Increased price for by-products
¾
Expansion/extension based on new
deposits
¾
Vertical integration in battery chemicals
2 015
2 016
2 017
2 018
2 019
NPV at realistic 2x resource volume
140
120
100
M
MEUR
¾
2 014
80
60
40
20
0
9
11
13
Price per kg Li2CO3
21
Outline
1.
Company overview
2.
Engebø - Titanium rutile project
3.
Keliber - Lithium project
4.
Gudvangen Stein - Anorthosite production
5.
Summary
22
Gudvangen Stein anorthosite
Enhanced value opportunity in vast anorthosite resource
Gudvangen
Stein
•
•
•
Anorthosite
29 % Al2O3
48 % SiO3
14 % CaO
Gudvangen is one of Europe’s largest anorthosite massifs estimated to more than 500 mill. tons
Current production of approximately 200,000 ton/y
Reserves for 1000+ years at current production level
Current main applications:
pp
Asphalt aggregates (unique white properties)
Mineral wool insulation
23
Gudvangen Stein anorthosite
Significant opportunities in product development
•
•
•
•
Glass related industries
Ceramics
Filler (paint)
Abrasives
•
Aluminium feedstock
Anorthosite improves glass related productions:
New products
by simple
processing
-
Same plant used
for several
products
Net glass yield per batch increases due to lower
dust and fusion losses; leads to increased capacity at no
capital cost
-
Net energy requirement decreases as anorthosite
does not contain water of crystallisation and batch has an
overall lower melting point
Sales
12
New small scale plant for high value
products
MUSD
10
8
6
¾ CAPEX processing plant 5 – 7 MUSD
4
¾ Product price range 100 – 400 USD/ton
2
¾ Up to approx. 50 000 ton/y
0
2007 2008 2009 2010 2011 2012 2013 2014 2015
Current products
New products
¾ Long
g term energy
gy advantage
g
¾ 2 year paydown on plant
Common p
processing
gg
gives range
g of new p
products – 2 y
years payback
p y
Ongoing trial and testing campaigns with industrial partners/customers
24
Outline
1.
Company overview
2.
Engebø - Titanium rutile project
3.
Keliber - Lithium project
4.
Gudvangen Stein - Anorthosite production
5.
Summary
25
Summary
Summary
9
Large resources of high-end forward looking strategic minerals:
Titanium, lithium and anorthosite
9
Stable price development compared to commodity metals and minerals
9
European deficit and demand for strategic minerals
9
P t ti l triggers
Potential
t i
going
i
forward
f
d
9
9
Political approval for Engebø development
9
Off-take agreement for Engebø rutile
9
Upgrade of lithium mineral resources
9
Cooperation agreement for Keliber lithium battery material development
9
Off-take agreement for Keliber lithium
9
Successful industrial testing of new anorthosite concentrates
9
Industrial market agreements Gudvangen Stein
Large value potential compared to current company value
26
Thank you for your attention!
Nordic Mining is listed on Oslo Axess
Ticker: NOM
www.nordicmining.com
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