Building value through innovation AMCHAM Business Briefing 18th February 2014
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. Competent Persons Statement: The Company confirms that it is not aware of any new information or data that materially affects the information included in the following ASX Releases during 2013 and subsequently reported herein:
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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Synopsis Majority price takers
underlying demand fundamentals
Next generation of deposits deeper
higher mining costs
Declining grades of current deposits
higher processing costs
Processing technologies www.reedresources.com
reduce costs
increase revenue
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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 4
Advanced materials Lithium
www.reedresources.com
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Mount Marion Lithium Project RDR 70%, MIN 30% (Fund and operate) www.reedresources.com
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Megatrend - rechargeable Lithium batteries Li2CO3 LI2CO3
11,000
350,000
10,000
300,000
9,000
250,000
8,000
200,000 Current Price US$7,500
7,000
150,000
6,000
100,000
5,000
50,000
0
Demand in metric tonnes of lithium carbonate equivalent (LCE)
LiOH Price US$ per tonne
LiOH
0 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
LiOH: Lithium hydroxide Li2CO3: Lithium carbonate
www.reedresources.com Demand & Price Forecast Source: signumBOX
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Global Supply and Demand
China 6%
FMC 8%
Other 7%
Australia 40% Mineral source
www.reedresources.com Sources: Roskill (2013) and Reed Management analysis
SQM 27%
Rockwood 12%
Brine source 8
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$3,900/t
www.reedresources.com Sources: SQM (Brine Flowsheet) and Reed internal analysis including 2012 Pre-feasibility Study. All prices are FOB Basis.
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New Feed | Mature Technology Chlor Alkali
Conventional process produces NaOH
RIM Process
Our new process produces Li OH
Li OH
Na OH POWER H2O
Li20 H2
+
Na Cl
POWER
+
H2
H Cl
Li Cl Cl2
Cl2
Na Cl
Proof of concept ďƒž Semi-pilot in progress
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Capital cost advantage Capital Efficiency (US$/ Production tonne LCE per annum) 25,000 US$/MT
20,000
LiOH Plant
15,000
10,000
Li2CO3 Plant
5,000
LiOH Li2CO3
0 Brine-based expansion
Brine-based new project
Spodumene-based new project
www.reedresources.com Sources: FMC Corporate Presentation 2011, Reed Pre-feasibility Study 2012, Reed management analysis
RIM Capex 2012 PFS
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Captive Resource www.reedresources.com
Strategic Location
Mine Ready 12
Development strategy: de-risk with strong partners Target 25-35% RDR X%
RDR 70%
=
+ Mine Spodumene with Mineral Resources as operators www.reedresources.com
Low upfront capital
Value add into Lithium Battery Materials
Integrated lithium producer
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Near-term milestones
Proof Of Concept
Complete Semi Pilot Plant Testwork
Commence Engineering Cost Study
Continue to prove technical feasibility, product quality
Nov 2013
April 2014
Operating & Capital Costs Anticipated
Attract LiOH JV Partner
June Q2014
Dec Q2014
Subject to RIM board approval
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Barrambie Titanium Project
100% RDR www.reedresources.com
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Increasing Demand and Price 4000
12000
3500 10000 3000 8000 2500 TiO2 Price 2000
6000
1500 TiO2 Demand
4000
1000 2000 500
TiO2 Price US$ per metric tonne
TiO2 Global Demand ()volume tonnes
TiO2 Demand vs Price
0
0 1980
1985
1990
www.reedresources.com Source: US Geological Survey, Industrial Minerals and TZMI Data
1995
2000
2005
2010
2013
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Strong long term fundamentals Developing Economies Pigment Use Growing with GDP 5
Pigment (Kg) Person
4
North America
3
Europe 2
Japan China
1
Global India
Asia
0 5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
REAL GDP/CAPITA (US$)
www.reedresources.com Source: Iluka
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99.9% Pure TiO2 from Ground Ore Competitors
Rutile or Synthetic Rutile
Chlorination & Purification
Final Product Fine Pigment
www.reedresources.com Source: Snowden Scoping Study 2013 and Reed management analysis
ROM Ore
Chlorination & Purification
Final Product Fine Pigment
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Potential lowest quarter operating costs Competitors Input Price US$1,000/t X1.2t
Rutile
Chlorination & Purification
Input Price US$150/t X 4t Final Product Fine Pigment
Cost US$1,900 2,100/t
ROM Ore
Chlorination & Purification
Final Product Fine Pigment
Cost US$1,214/t
Proof of concept ďƒž Mini-pilot in progress www.reedresources.com Source: Snowden Scoping Study 2013 and Reed management analysis
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Barrambie - the world’s 2nd highest grade TiO2 deposit
1
2
34%
22%
Lac Tio
Barrambie
3 18% Tellnes Sources: company reports
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www.reedresources.com
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Commercialisation timeline Test Work
Evaluation
2012
2013
2014
2014/2015
1.
3.
5.
Bench scale
Mini-pilot
Pilot
2.
4.
6.
Scoping Study
Pre Feasibility Study
Definitive Feasibility Study
Subject to Board Approval www.reedresources.com
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Near-term milestones Scoping Study +/- 35% accuracy
Nov 2013
Obtain technology licence
Dec 2013
Mini-pilot plant
Mar Q2014
Commence Prefeasibility
Pre Feasibility Study
Study
Results
April 2014
Oct 2014
Subject to board approval
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Financial Resources
www.reedresources.com www.reedresources.com
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Rebuilding the Balance Sheet
Cash at Bank $10M [31 Dec 13 ]*
Market Cap
$25M @ 4.7c per share
* Includes $6M of restricted access term deposits www.reedresources.com
Comet Vale $2M Sale
Meekatharra Mt Finnerty Iron & Gold Sale process commenced 25
Focus www.reedresources.com
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Realise inherent value of assets 175
Mt Marion
Barrambie
Meekatharra
Market Capitalisation A$m
150
125
100
75
GFC
50
25
0 Jul-06
Jan-07
Jul-07
Jan-08
Jul-08
Jan-09
Jul-09
Jan-10
Jul-10
Jan-11
Jul-11
Jan-12
Jul-12
Jan-13
Jul-13
Jan-14
RDR Goldindex (XGD)
www.reedresources.com Source: Datastream
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Thank you Presentation design by www.reedresources.com
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