LSM 2014 Presentation
Chris Reed, Managing Director
www.reedresources.com
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Disclaimer Summary information: This document has been prepared by Reed Resources Ltd (“Reed” or “the Company”) to provide summary information about the Company and its associated entities and their activities current as at the date of this document. The information contained in this document is of general background and does not purport to be complete. It should be read in conjunction with Reed’s other periodic and continuous disclosure announcements lodged with the Australian Securities Exchange, which are available at www.asx.com.au. Forward-looking information: This document includes certain statements, opinions, projections, forecasts and other forward-looking information which, while considered reasonable by Reed, are inherently subject to significant uncertainties and contingencies. Many known and unknown factors could cause actual events or results to differ materially from estimated or anticipated events or results included in this document. Recipients of this document are cautioned that forward-looking statements are not guarantees of future performance – they must make their own independent investigations, consideration and evaluation of the opportunity to invest in the Company. By accepting this document, recipients agree that if they proceed further with their investigations, consideration or evaluation of the opportunity to invest in the Company, they will make and rely solely upon their own investigations and enquiries and will not in any way rely upon this document. Any statements, opinions, projections, forecasts and other forward-looking information contained in this document do not constitute any commitments, representations or warranties by Reed and its associated entities, directors, agents and employees, including any undertaking to update any such information. Except as required by law, and only to the extent so required, directors, agents and employees of Reed shall in no way be liable to any person or body for any loss, claim, demand, damages, costs or expenses of whatsoever nature arising in any way out of, or in connection with, the information contained in this document. Financial data: All figures in this document are in Australian dollars (AUD) unless stated otherwise. Not financial product advice: This document is for information purposes only and is not financial product or investment advice, nor a recommendation to acquire securities in Reed. It has been prepared without taking into account the objectives, financial situation or needs of individuals. Before making any investment decision, prospective investors should consider the appropriateness of the information having regard to their own objectives, financial situation and needs and seek legal and taxation advice appropriate to their jurisdiction. Investment risk: An investment in securities in Reed is subject to investment and other known and unknown risks, some of which are beyond the control of Reed. The Company does not guarantee any particular rate of return or the performance of Reed. Investors should have regard to the risk factors outlined in this document. Competent Persons Statement: The information in this document that relates to “Barrambie Scoping Study Results”, “Mt Marion test work results”, “Barrambie Mineral Resource Estimates” and “Mt Marion Mineral Resource Estimates” is extracted from ASX Releases set out below. The Company confirms that it is not aware of any new information or data that materially affects the information included in the ASX Releases set out below, and in the case of estimates of mineral resources, that all material assumptions and technical parameters underpinning the estimates in those ASX Releases continue to apply and have not materially changed.
The Company confirms that all the material assumptions underpinning the production target and the forecast financial information derived from the production target in the Barrambie Scoping Study continue to apply and have not materially changed.
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Company Strategy
01 Focus on advanced mineral assets www.reedresources.com
02 Demonstrate low-cost competitive advantage
03 Co-venture with strong partners to reduce operating and financial risk 3
Mount Marion Lithium Project RDR 70%, MIN 30% (Fund and operate) www.reedresources.com
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Flythrough
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Captive Resource www.reedresources.com
Strategic Location
Mine Ready 6
Development strategy: de-risk with strong partners Target 30-40% RDR X%
RDR 70%
=
+ Mine Spodumene with Mineral Resources as operators www.reedresources.com
Low upfront capital
Value add into Lithium Battery Materials
Integrated lithium producer
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Strong Partner for upstream Mineral Resources Ltd are an ASX100 Listed Company worth +A$2 Billion (ASX: MIN)
Fund ‘sunk’ costs to Final Investment Decision (“FID”) and operate project from mine-to-port
Construct processing plant on Build-Own-Operate (“BOO”) basis, no upfront cost to Reed
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Whole of mine lifecycle services 8
Scaling Up a New feed for a Mature Technology Chlor Alkali
Conventional process produces NaOH
RIM Process
Our new process produces Li OH
Li OH
Na OH POWER H2O
Li20 H2
+
Na Cl
POWER
+
H2
H Cl
Li Cl Cl2
Cl2
Na Cl
Proof of concept ďƒž Semi-pilot in progress
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RIM Process
Ion Exchange
Membrane Electrolysis
Remove trace impurities to <25ppb for Fe, Ca, Si, Ba & Ma
Lithium Chloride Solution
Remove Fe, Al, Si
Remove Ca, Mg
Remove trace impurities to <5ppm for Na & K
Cell Efficiency +85%
Primary Impurity Removal
Secondary impurity Removal
Ion Exchange
Membrane Electrolysis
Lithium Hydroxide Monohydrate 99.99%
Lithium Hydroxide Solution
Lithium Carbonate 99.99%
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Chlor-alkali Cell
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Proof of Concept Results Battery grade specifications with leading lithium hydroxide monohydrate producer Items
FMC
RIM Results
LiOH.H2O % Min Fe ppm Na ppm K ppm Cl ppm Ca ppm Al ppm Ni ppm Si ppm
56.5 ≤5 ≤20 ≤10 ≤20 ≤15 ≤10 ≤10 ≤30
57 3 8 3 15 9 1 10 <30
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Source:http://www.fmclithium.com/Portals/FMCLithium/content/docs/DataSheet/QS-PDS-1021%20r1.pdf
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Flowsheet cost process Operating advantage Competitors
Input Price US$5,000/t x1
Lithium Brine
Lithium Carbonate Technical Grade
Lithium Carbonate Battery Grade
Cost US$5,700/t
Input Price US$350/t x 7.5 Final Product LiOH Battery Grade
Spodumene
Chlorination Purification Electrolysis
Final Product LiOH (BG)
Cost US$3,900/t
www.reedresources.com Sources: SQM (Brine Flowsheet) and Reed internal analysis including 2012 Pre-feasibility Study. All prices are FOB Basis.
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Pre-feasibility Study Results Annual Production
10,000t LiOH 8,800t Li2CO3
Life of Mine (LOM)
20 years
Life of Mine (LOM) Revenue
US$ 3.15 Billion
Pre-tax Cashflow
US$ 1.19 Billion
Pre-tax NPV (12% discount rate)
US$ 321 million
Pre-tax Internal Rate of Return Average Net Operating Cost per tonne of recovered LiOH
94% US$ 3,878
Total initial capital costs
US$ 83 million
Payback of capital costs
2 years
All analysis is in US dollars and assumes a selling price of US$ 6,900/t for battery-grade lithium hydroxide and lithium carbonate, a spodumene input cost of US$ 350/t CIF, an AUD exchange rate of US$1.05 and a MYR exchange rate of US$ 0.32. Operating Revenues and Costs are both escalated at 2% per annum. Capital Costs are valid at September 2012 with an indicative accuracy of Âą 35% and a 15% contingency. www.reedresources.com
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Capital cost advantage Capital Efficiency (US$/ Production tonne LCE per annum) 25,000 US$/MT
20,000
LiOH Plant
15,000
10,000
Li2CO3 Plant
5,000
LiOH Li2CO3
0 Brine-based expansion
Brine-based new project
Spodumene-based new project
www.reedresources.com Sources: FMC Corporate Presentation 2011, Reed Pre-feasibility Study 2012, Reed management analysis
RIM Capex 2012 PFS
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Near-term milestones
Proof Of Concept
Commence Semi Pilot Plant Testwork
Complete Semi Pilot Plant Testwork
March 2014
Operating & Capital Costs Anticipated
Attract LiOH JV Partner
Continue to prove technical feasibility, product quality
Nov 2013
Commence Engineering Cost Study
June Q2014
Dec Q2014
Subject to RIM board approval
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Financial Resources
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Rebuilding the Balance Sheet
Cash at Bank $8.7M [31 March 2014]*
Market Cap
$13M @ 2.5¢ per share
Comet Vale
$2M cash sale, majority settlement est before end June 14
Meekatharra
$3.4 M cash + cancellation of 24M RDR shares**, settlement est 30 June Mt Finnerty Iron underway
* Includes $6.2M of restricted access term deposits www.reedresources.com
** Subject to creditor and shareholder approval
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Focus www.reedresources.com
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Downstream Strategy
Demonstrate Technical Feasibility
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Demonstrate Consistent Quality
Partner Qualification
Commercialisation
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Thank you www.reedresources.com www.reedresources.com
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