CORPORATE PRESENTATION
Q3 2016
CONFIDENTIAL
EXECUTIVE SUMMARY
ALUFER IS ONE OF THE MOST ATTRACTIVE, SIGNIFICANT NEAR-TERM BAUXITE PRODUCERS IN GUINEA
 High quality resource - 146Mt @46% Total Al2O3, 40.5% Available Al2O3,
1.7% Reactive SiO2
 15km from the coast requiring minimal infrastructure and reducing
capital costs
 Low cost and quick to production:
•
•
•
Simple logistics
18 month construction period with production targeted late
2017
15 year LOM, with initial production rate of 5.5Mtpa and
expansion to 10mtpa
 Responsible, sustainable mining:
•
•
Using global best practise mining methods
Environmental programme adheres to IFC and Equator Principles
 Fully licenced and formally documented:
•
Mining Convention, ‘Project of National Interest’, DFS and ESIA
 Highly experienced management team with particular expertise in
African bulk commodity projects
 Additional 2.5 billion tonnes of bauxite resource at Labé1 including
583Mt at 50% Al2O3
1 See
appendix for details
2
BAUXITE OVERVIEW
Bauxite is the main commercial mineral from which aluminium oxide is extracted, which in turn is smelted to form
aluminium metal:
5t bauxite (ore) 2t alumina (refinery) 1t aluminium (smelter)
 Typically, a bauxite resource contains 30-60% alumina (Al2O3), and occurs as two main types: trihydrate ("low
temperature") bauxite and monohydrate ("high temperature") bauxite
 The aluminium industry is no longer as integrated as it used to be - pricing power is shifting upstream to alumina and
bauxite producers
 Aluminium demand, however, drives alumina and bauxite growth - medium to long term demand is still strong
 Demand continues to grow in key sectors including transportation, construction, power, packaging and consumer
products
3
METAL USAGE IS LINKED TO ECONOMIC DEVELOPMENT

Iron ore and copper usage maturing following rapid industrialisation in China and other emerging markets

Aluminium demand in China is still in its early stages with saturation not expected to match current levels of steel
or copper for 30 years

As an economy matures, requirements shift from building and infrastructure development to consumer goods,
vehicles, transport, infrastructure etc

The urbanisation of China is forecast to shift toward internal consumption which will benefit demand for
aluminium. Chinese policy supports this
4
CHINA FUNDAMENTALLY CHANGED THE ALUMINA INDUSTRY

China’s aluminium production up 400% in last 15 years

China began importing significant amounts of alumina
to supply rapidly expanding smelting industry

To avoid reliance on imported alumina China began to
develop its own domestic alumina refining capacity

Since 2002, China has developed over 50Mt of
alumina refining capacity1

Chinese alumina production was based on two
approaches:
•
100
80
Development of merchant refining capacity in
Shangdong based on imported Indonesian
bauxite
60
Processing of domestic ore

New refining capacity has lead to record increase in
bauxite demand and imports

Declining quality of domestic bauxite in China and
diminishing global reserves of high quality ore
•
120
40
20
Impetus for refiners and smelters to secure a
long term supply of ore
-
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
•
HISTORIC ALUMINA CAPACITY EXPANSIONS (MTPA)1
China
1 Source:
World Aluminium
5
RoW
BEL AIR - MARKET OPPORTUNITY

China is buying low quality material from India and Malaysia at high prices

Malaysia recently banned exports for 3 months but even when exporting is a short term solution

Guinean bauxite is some of the highest quality in the world

There is a significant opportunity for Bel Air to enter the market as a premium quality bauxite

Refineries are prepared to pay a premium for high quality

Material from Brazil, Guyana, Ghana and Guinea can command up to 50% more than the market price
BEL AIR BAUXITE



6
AvAl2O3: >40%
RxSiO2: <2%
AvAl2O3: RxSiO2ratio: >23
BAUXITE QUALITY CONSIDERATIONS
BEL AIR BAUXITE IS AMONG THE HIGHEST QUALITY MATERIAL IN THE MARKET
Desirable
characteristics
Customer criteria
Impact on customer if inadequate
Bel Air spec
Min
Target
Max
High total
alumina
• Increases capital operating costs for
mining, transport, processing and mud
disposal
40%
>45%
NA
46%
High extractable
alumina
• Increases the % of untreatable material
per tonne of ore that must be
processed and disposed of
36%
>40%
NA
40.5%
Low total silica
• Increases caustic usage
NA
<2%
10%
4.5%
Low reactive
silica
• Increases caustic usage
NA
<2%
3%
1.7%
NA
6%
18%
9.6%
NA
<1.0%
2.0%
<0.1%
• Reduces extractable alumina units
• Increases shipping costs
Low moisture
• Increases fuel consumption within
refinery
Low organic
carbon
• Increase operating costs by reducing
plant efficiency and lowers product
quality
Low other
deleterious
elements
• Many other ores have high levels of
calcium oxide, lithium, sulphur
Poor vs Target
Target
Excellent vs Target
7
Bel Air
assessment
DFS OVERVIEW
EXTENSIVE DFS VALIDATED LOGISTICS, CONSTRUCTION, AND MINING PLANS, AS WELL AS ECONOMIC MODEL
 Completion of the DFS has ensured:
•
Pit to Ocean Going Vessel (OGV) simulation and integration
•
Optimisation / Value engineering where applicable
•
ESIA and biodiversity planning and mitigation
•
Construction readiness
•
Construction permit applications underway
 Control of simple logistics solution
•
Short haul, causeway conveyors, transhipment barging and
onsite infrastructure
 Low operating cost following optimisation of mine plan
•
Minimised strip ratio, limited re-handling and automated
materials handling set-up
 Minimum 15 years mine life with initial production rate of 5.5
Mtpa
 Economically robust under multiple bauxite pricing cases
8
OPERATIONAL SUMMARY

Direct Shipping Ore will be mined from a total of six pits
•
Minimum of two areas will be in operation at the same time
•
Increases production flexibility as well as adequate ore blending
capability

Open strip mining will use surface miners

Material will then be transported via truck to the ROM tip

Ore will then be stockpiled and handled via conveyor over a rubble
causeway and loaded onto barges

Transhipment handled via self-propelled barges and transhipment
vessel to OGVs
9
MINING METHOD
SURFACE MINING – LOW OPEX, SIMPLE HANDLING, HIGH EFFICIENCY
Benefits vs drill and blast:

Sustainable, reduces loss and dilution and no high
grading

Single phase – no drilling, explosives, crushing

Significantly reduces strip ratio, waste handling and
haulage costs
•
Minimises footwall waste

Improves in pit ground conditions which enables
multi-purpose haul fleet selection

Lower fuel consumption

Reduces bulking factor for improved haulage
efficiencies
 Paragominas, Brazil

Less dust creation
 Rusal, Guinea
Current surface mining operations
 Iron ore, Western Australia
10
MATERIALS HANDLING
PROJECT ADVANTAGED BY PROXIMITY TO COAST AND CONTROL OF DEDICATED LOGISTICS AND FACILITIES
Materials handling
 Simple, efficient materials handling infrastructure
 Automated, low opex approach
 Premium on high reliability equipment, eg. apron feeders,
telestacker
 Inherent redundancy and catch-up ability
 De-linking of mining process (continuous) and barge loading
(batch process)
Process

ROM ore will be delivered to the bin using 40m³ side
tipping trucks

This then withdrawn from the ROM bin using two
apron feeders (2,000tph design rate) and conveyed to
the ore stockpile

Ore reclaimed from stockpile by two apron feeders
and conveyed along jetty to barge loader

Chemical dust suppression agent used to minimise
environmental impact

SCADA control included
11
ONSHORE INFRASTRUCTURE
SELF SUFFICIENT INFRASTRUCTURE WITH RAPID MOBILISATION AND MINIMAL COST

Self contained camp and operations centre will be built at
coast

Simple, modular, pre-fabricated package systems

Quality designed to sustain life span of 15 years

Water wellfields already identified and designed
•
Mine camp area – near Bel Air Hotel
•
Quarry and Export Facility infrastructure area
•
MSA and Mining Areas

Self-generating power from high-speed diesel generators

Dedicated communications and internet

Contained sites = improved safety and security
12
MARINE INFRASTRUCTURE
TRANSHIPMENT IS THE OPTIMAL METHOD FOR BULK EXPORT
Rubble mound causeway




Will provide access from the shore to water depth
suitable for a barge load-out berth
Simple geotechnical structure placed on bedrock
Core and armour material will be supplied from quarries
owned by Alufer
Scale model being constructed and tested to confirm the
design criteria. (Please see Appendix for causeway
simulation photos)
Block wall retaining structure at loading point
 Due to barge selection the berth length is significantly
reduced

Lock wall berth structure also preferred as it does not
require piling during the construction phase
13
MARINE OPERATIONS – BARGING & TRANSHIPMENT
Barge loading



Ore will be transferred onto the causeway conveyor via the stockpile reclaim
conveyor for barge loading
Loading will comprise one slewing, telescopic barge loader
•
Optimum balance between low capex, simplicity of operation and functionality
One loader will be required to achieve nameplate capacity (2,000tph continuous)
Barging





The barges will then transport bauxite to an ocean going vessel located at the
Transhipment Zone (TSZ) approximately 32km offshore
Transhipment vessels will be used to transfer the bauxite from the barges to the
OGV
Self propelled barge has ability to cover hatches during rain
Will maximise throughput by making use of seasonality and large tidal range
Low reliance on tugs
Transhipment




Will involve the loading of bauxite into barges at a barge berth at the end of a
causeway
Capesize vessels considered, capacity 170,000t with loaded draft of 18.4m,
loading rate of 1,200tph
Onboard hold capacity of 35,000t allows pre-loading and vessel scheduling
mitigation
Solution independently assessed by PRDW to confirm adequate capacity
14
SOCIAL AND ENVIRONMENTAL STUDIES
ALUFER IS COMMITTED TO PROMOTING AND DELIVERING SUSTAINABLE DEVELOPMENT
 Full Environmental and Social Impact Assessment Studies to IFC and
Equator Principle standards have been conducted by Alufer and approved
by the Government of Guinea
•


This work has included:
•
Baseline assessments (ongoing)
•
Integrated terrestrial and marine social and environmental impact
assessments
•
Social and environmental management plans
•
A stakeholder engagement plan (ongoing)
•
A detailed relocation action plan
•
A Critical Habitat review
Stakeholder engagement is a core focus
•

Environmental Certificate of Conformity received in April 2015
Throughout the project the team will work with the community to
develop local enterprise initiatives and promote local supply
Ongoing mitigation plans will be in place as Alufer strives to achieve full
IFC Performance Standard compliance and meet Equator Principles
15
STRONG STAKEHOLDER SUPPORT

Alufer has a good working relationship with the Guinean
Government
•
Bel Air was declared as ‘Project of national interest (PIN) in
December 2014
•
Alufer’s Mining Convention signed on 1 February 2016:
•
o
The first under the new Guinean Mining Code
o
The first signed by the new Mines Minister
o
Fiscal concessions received to encourage investment
and protect sustainability of operation
Ratification by Parliament of the Mining Convention was
completed on the 1st June 2016

Alufer has a syndicate of strategic investors in place for providing
equity part of construction financing
• Strong endorsement of both the project and the team

Offers for purchase of all production have been received from
leading offtakers
16
BENEFITS TO GUINEA
SIGNIFICANT INVESTMENT, EMPLOYMENT AND ONGOING REVENUE

Through the Mining Convention, a tax regime has been developed to promote investment in Guinea and to deliver a
fair revenue balance for all stakeholders

Once in production the project will generate significant revenues for the Government of Guinea

Alufer’s Social Fund will also generate contributions throughout the life of the project

Development is expected to create over 3,500 jobs (direct and indirect) in the area

Alufer has committed to implement a Capacity Development Plan
•
This includes vocational training, skills transfer, support for learning and career development
17
KEY MANAGEMENT
Adonis Pouroulis
Chairman
Bernie Pryor
Chief Executive Officer
•
Mining engineer
•
Metallurgical Engineer
•
Expertise in development of
natural resources projects
across Africa including
diamonds, precious/base
metals and coal
•
35 years of operational and
project experience
•
Extensive African experience
•
Was Head of Business
Development with Anglo
American Plc, also serving as
CEO of Anglo Ferrous Brazil Inc.
•
Founder and Chairman of LSE
listed Petra Diamonds and
AIM listed Chariot Oil & Gas
and other private companies
Kevin Mclean
Project Director
Lamine Touré
Executive Director: Guinea
Rachel Rhodes
Chief Financial Officer
•
Guinea national, with strong
relationships and network
connections in Guinea
•
Chartered Accountant with 15
years experience in the mining
sector
•
Worked for BHP Billiton,
TOTAL and Global Alumina in
Guinea
•
Previously with Anglo
American and CFO of London
Mining
•
In-country liaison for Alufer
•
Extensive background in raising
project finance and developing
mining operations through
construction into production
Tristan Clarke
Commercial Director
Catherine Garcia
Environmental & Social Director
•
Geologist with 20 year across
the industry – exploration,
development and production
•
Broad commercial experience
- over 12 years working in the
resources and power sectors
•
Over 20 years experience in
sustainable development and
community relations
•
Previously with Shangdong
Iron and Steel, African
Minerals and Fortescue Metals
•
Previously with Shangdong
Iron and Steel, African
Minerals and Anglo American
•
Previously with Ivanhoe, IFC,
Rio Tinto and Xstrata
•
•
Expertise in optimising and
delivering efficient mining
operations
•
Specific experience in
commodities marketing,
complex negotiations, supply
chain and corporate strategy
Focus on resettlement and
compensation, ESIA,
community development,
biodiversity and stakeholder
engagement
18
APPENDICES
PROJECT DEVELOPMENT IN RELATION TO THE BAUXITE PRICE
80
June 2013
Bel Air SEIA completed
75
April 2013
First Bel Air Feasibility
Study published (10mtpa)
CFR China Bauixte Price (USD/t)
70
October 2012
Updated resource statement
for Bel Air published
65
60
October 2014
BFS completed (4.8 mtpa)
September 2013
Bel Air exploitation
licence granted
December
2014
PIN granted
June 2016
Mining Convention
ratified
Feb 2016
Mining Convention
signed
November 2015
DFS commenced
August 2011
First resource
statement for
Bel Air published
55
December 2011
PFS for Bel Air
published
50
45
April 2016
DFS completed
40
Jul-11
Apr-12
Jan-13
Oct-13
Bauxite Price - CFR China
Source: http://thebauxiteindex.com/
20
Jul-14
News Event
Apr-15
Jan-16
HIGH QUALITY BEL AIR BAUXITE
BEL AIR BAUXITE SPECIFICATION
ALUMINA PHASE DISTRIBUTION AS AL2O3
Typical %
Mineral Phases
Typical %
Total Al2O3
46%
Gibbsite
42%
Available Al2O3（150°C）
40.6%
Boehmite
<0.5%
Total SiO2
4.4%
Kaolinite
1.2%
Reactive RxSiO2（150°C)
1.7%
Alumogoethite
0.5%
Loss on ignition
24%
Muscovite
<0.5%
Fe2O3
22%
Andalusite
1.7%
TiO2
2.6%
CaO
0.0%
MgO
0.0%
Free moisture
10%
Organic carbon
0.07%
Reactive Al2O3: RxSiO2 ratio
>23
21
BEL AIR BAUXITE QUALITY POSITIONING

Alufer product is currently in demand:
–
Feedback from customers in China and India indicates that if Bel Air product was available for purchase it
would sell at a premium to the current market price.
22
CAUSEWAY SIMULATION PHOTOS
23
SIGNIFICANT GROWTH POTENTIAL
 The Labé Project (100% Alufer) is situated in the Guinea
highlands, approximately 350km north-east of Conakry
 Total JORC compliant resource of 2.5Bt at 43% Al2O3
–
High grade resource - 583Mt @ 50% Al2O3, 3% SiO2
 Engineering concept ctudy completed
 Completed 11,130m auger drill programme on 600m and 300m
grids, and 252m core drill programme (only 25% of mineralised
plateaus)
 Over 13,000 samples analysed by XRF and c. 20% through
bomb digest process
 Longer term prospect due to infrastructure requirements
 Alufer will continue to evaluate other opportunities and
licences to further expand the resource base over time
24
GUINEA INVESTMENT CLIMATE
GDP: $15.1 billion (2014 est.)
Annual Growth: Estimated to be c.6% 2016-17
Population: 10.5 million
Inflation: 9.7%
Major Industries: - Agriculture: Rice, coffee, fruit, livestock, timber
- Mining: bauxite, gold, diamonds, iron ore
- Light manufacturing and agricultural processing
Major trading partners: South Korea, India, China, Spain, Netherlands, Ireland
MINING:
 Mining accounts for over 70% of the country’s exports.
 Several ‘majors’ present in country – Rio Tinto, Rusal, CBG, GAC
 Deposits of bauxite, iron ore, gold and diamonds with significant geological potential.
 Country accounts for c. 25% of global bauxite reserves
POLITICS:

Democratic presidential elections held in October 2015, with the incumbent Alpha Conde
winning the vote with a significant majority in the first round

He was inaugurated for a second five term on the 14th December 2015 - will support ongoing
stability in coming years

Is focused on creating economic wealth for the country as a whole and encourages foreign
investment within this context.
Sources: CIA Factbook; EIU, USGS
25
DISCLAIMER
This document has been issued by Alufer Mining Limited, a company registered in Guernsey (the “Company”) and has been
issued expressly to the recipient.
This document and any further materials supplied with it, or subsequently in connection with it and the accompanying live
presentation and discussion (the “Information”) are for informational purposes only and do not constitute or form part of
any offer or invitation to sell or issue, or any solicitation of any offer to purchase and/or subscribe for any securities and/or
any investment in the Company and should not be relied on in connection with any contract or investment decision relating
thereto.
The recipient of the Information should not place any reliance on the information or opinions contained in this document or
on their completeness (and in particular any forward looking statements which are inherently risky by their nature). Neither
the Company or any of its directors, employees or agents gives any express or implied warranty or representation as to the
accuracy or completeness of the information or opinions contained in the Materials and no liability whatsoever (except in
relation to fraud) is accepted by the Company, its directors, employees or agents for any loss howsoever arising, directly or
indirectly, from any use of such information or opinions or otherwise arising in connection therewith.
26