Cummins Range Rare Earths Project
DISCLAIMER
The information contained in this presentation is not financial product advice. The presentation is for information purposes and is of a general and summary nature only. It does not constitute an offer. Kimberley Rare Earths Limited (KRE) gives no warranties in relation to the statements and information in this presentation. Investors should seek appropriate advice on their own objectives, financial situation and needs.
This presentation contains certain statements which may constitute “forward-looking statements”. Such statements are only predictions and are subject to inherent risks and uncertainties which could cause actual values, performance or achievements to differ materially from those expressed, implied or projected in any forward looking statements.
KRE disclaims any intent or obligation to update publicly any forward-looking statements, whether as a result of new information, future events or results or otherwise. Investors are cautioned that forward-looking statements are not guarantees of future performance and investors are cautioned not to put undue reliance on forward-looking statements due to the inherent uncertainty therein.
This presentation does not constitute or form any part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any securities in the Company nor shall it or any part of it, or the fact of its distribution, form the basis of, or be relied on in connection with, any contract or commitment or investment decision relating to any securities in the Company. Any decision regarding any proposed subscription for securities in the Company must be made solely on the basis of information on the Company that is publicly available. This presentation does not constitute an offer of securities for sale.
COMPETENT PERSONS STATEMENT
Information in this presentation that relates to exploration or exploration results is based on information compiled by Mr Geoff Collis, who is a member of the Australasian Institute of Mining and Metallurgy and has sufficient exploration experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activities which are being undertaken to qualify as a Competent Person as defined in the 2004 Edition of the “Australian Code for Reporting of Mineral Resources and Ore Reserves”. Mr Collis consents to the inclusion of these estimates in the form and context in which they appear.
Information in this presentation that relates to Mineral Resources is based on a resource estimate at Cummins Range performed by Dr Phillip Hellman FAIG, who is a Director of Hellman and Schofield Pty Ltd and who has had sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activities which are being undertaken to qualify as a Competent Person as defined in the 2004 Edition of the “Australian Code for Reporting of Mineral Resources and Ore Reserves”. Dr Phillip Hellman consents to the inclusion of these estimates in the form and context in which they appear.
Company Snapshot
ASX:KRE
List Date
18 May 2011
List Price
$0.20
Shares on Issue
127 million
Shares Quoted
112 million
Options ($0.30)
6.75 million
Options ($0.25)
5.0 million
Current Share Price
$0.10
Current Market Cap* $12.7 million
Current Cash*
$14.3 million
TOP 10 SHAREHOLDERS
NAVIGATOR RESOURCES LIMITED
8.8%
JP MORGAN NOMINEES AUSTRALIA
7.2%
CITICORP NOMINEES PTY LIMITED
6.7%
BT PORTFOLIO SERVICES LIMITED
2.5%
GREGORACH PTY LTD
2.4%
MERRIWEE PTY LTD
2.0%
HSBC CUSTODY NOMINEES
1.9%
BANNABY INVESTMENTS PTY LTD
1.8%
IE PROPERTIES PTY LTD
1.8%
NAVIGATOR RESOURCES LIMITED**
1.7%
OFFICE
Suite 1, 83 Havelock Street
WEST PERTH 6005
Western Australia
** Trust account holding on behalf of NAV shareholder * At 30 November 2011
Market Momentum
Since KRE Listing Date (18 May 2011)
NYSE: Dow Jones Industrial Average
8%
ASX: All Ordinaries Index
11%
Bloomberg Rare Earths Mineral Resources Index
47%
KRE
50%
Bloomberg Rare Earths Mineral Resources Index
(BNREMRS:IND)
RARE EARTHS
$0 $50 $100 $150 $200 $250
On a LINEAR Scale
CUMMINS RANGE RARE EARTH OXIDE BLEND PRICE
A note on “falling rare earth prices”
Lynas project
funding
secured at
these prices
Market
reacted to
this fall…
…and recent
expert views
of future
oversupply
$1 $10 $100 $1,000
On a LOG Scale
CUMMINS RANGE RARE EARTH OXIDE BLEND PRICE
An order of
magnitude
shift in REO
Pricing
A note on “falling rare earth prices”
Lynas project
funding
secured at
these prices
Market
reacted to
this fall
Cummins Range – Western Australia
Northern Australia is the nearest future REO region
to Japan (5,500km) and China (4,500km)
The Highway
The Locals
2 mines
5 projects
9 projects
(including Cummins Range)
9 projects
73 projects
93 prospects
Of the 191 rare earth assets in
the Infomine database - over
85% are still at early
exploration stage or are just
raw prospects
Operating
Advanced Exploration
Early Exploration
Raw Prospect
Data: Infomine – 28 August 2011
M+I Resources
Inferred Resources
One of few rare earth deposits worldwide
Known geology and mineralogy
SAME AS MT WELD
Rare earths enriched in the
weathered zone of a
carbonatite pipe
Rare earths hosted mainly in
monazite, the traditional source
of rare earths historically
MINERAL: Monazite
One of only 3 minerals commercially
processed for rare earths
GEOLOGY: Carbonatite
A common host of rare earth
mineralisation globally
Shallow, flat and at surface
No pre-stripping needed
Simple and cheap mining
proposition
Clear potential to convert
most of Resource into
mineable ore
Opportunity to commence
with higher grade Stage 1
pit
INFERRED RESOURCE: 4.17 Mt @ 1.72% TREO (1% cut off) = 72 kt REO 11.15 Mt @ 1.08% TREO (0.5% cut off) = 120 kt REO
Recent drilling confirms quality
•
Mineralisation continues to NW and SE
•
Mineralisation continues at depth in NW
Intercept Length (m)
Grade (% TREO)
From
(m) Hole ID Hole Type
41 3.85 11 KRC112 Infill 61 2.04 2 KRC114 Infill 30 2.93 37 KRC101 Extension Intercept Length (m) Grade (% TREO) From (m) 6 10.84 24 4 7.23 5 2 12.33 47
Rare earth metallurgy is complex, and key
Mining
Concentration
Cracking
Upgrading
Separation
Upstream concentration metallurgy needs
defining for this ore
Flotation tests on 2007 drill samples
commenced
Larger test program on new drill samples to
take place over summer
Downstream cracking, upgrading and
separation metallurgical technology is mature
for monazite-hosted rare earths
Rare Earth
Ore
Rare Earth
Products
Time line
PFS
Pre-Feasibility Study
by Q4 2013
BFS
Bankable Feasibility
Study by Q2 2015
PRODUCTION
Production in 2017
SCOPING
Preliminary
Evaluation Study by
Q3 2012
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
LYNAS – Mt Weld
Project Farm In
Resource
Drilling Scoping Study
Feasibility
Study Peer Review Project Funding
G F C
Refinancing Construction PRODUCTION >>>
Time line comparison
MT WELD (Lynas)
•
1966 – Mt Weld discovered by airborne survey
•
1991 – Ashton feasibility study commenced
•
1999 – Lynas farm in & new feasibility studies commenced
12 years from purchase to production
CUMMINS RANGE (KRE)
Has benefits of second mover:
•
Shorter development time, and lower development cost
•
Maturing new market outside of China
6 years from purchase to production
KRE – Cummins Range
Drilling / Scoping PFS BFS Financing / Construction PRODU CTION >>>
