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Announcement | 21 November 2017 | Page 1
21 November 2017
ASX ANNOUNCEMENT
Chair & Managing Director’s Address
Annual General Meeting
ASX: MMI | ACN 117 763 443
Contact: Tel: +61 (0) 7 3009 8000 | Fax: +61 (0) 7 3221 4811
For Further Information: E: [email protected]
Managing Director & Chief Executive Officer: Simon Finnis,
Chief Financial Officer & Company Secretary: Scott Waddell
Electronic copies & more information available at: www.metromining.com.au
Registered Office & Head Office: Level 2, 247 Adelaide Street, Brisbane Q 4000
Postal Address: GPO Box 10955, Brisbane Q 4000
This announcement has been prepared for publication in Australia and may not be released or distributed in the USA. This announcement
does not constitute an offer to sell, or a solicitation of an offer to buy, securities in the United States or any other jurisdiction. Any securities
described in this announcement have not been, and will not be, registered under the US Securities Act of 1933 (as amended) and may not
be offered or sold in the United States except in transactions exempt from, or not subject to, registration under the US Securities Act and
applicable US state securities laws.
Announcement | 21 November 2017 | Page 1
Metro Mining Limited (ASX: MMI)
My fellow Board Members, Ladies and Gentlemen
I was interested to note that I concluded my remarks at last year’s AGM by saying:
….. “In the coming year I am sure you will be rewarded for your patience.”
Today, it gives your Board, Metro Senior Management and the entire team a great deal of
satisfaction having, I believe, delivered upon that undertaking to you.
What a year it has been. Your company completed the following milestones;
▪ Received all the required environmental approvals for the development of Bauxite hills mine.
▪ Completed all Native Title requirements
▪ Finalised a major offtake agreement with Xinfa
▪ Completed and consolidated the acquisition of Gulf Alumina, doubling our reserve base.
▪ Completed our DFS and raised the required funding for development.
▪ Commenced construction
Let’s look at the most important benchmark first!
On 22 November last year (date of the last AGM) the share price was 0.14 cents and Metro’s market
capitalisation was $73.8M.
Today the share price (last time I looked) is 0. 21 cents and your Company has grown to be valued
at over $270M.
During this period under review, the company has raised $90M through equity raisings and $40M
through new debt facilities which has provided the funding to repay the short-term debt used to
acquire Gulf Alumina, build the Bauxite Hills project and strengthen Metro’s balance sheet.
I would like to say thank you to Argonaut, who were critical to the success of the fundraisings.
Your company has developed from “junior explorer” status to that of a mine developer and is on the
cusp of becoming a producer. Certainly, we are now on track to become the second largest
Bauxite producer within the internationally acclaimed Weipa Bauxite Region.
No doubt you are aware construction at our flagship project, The Bauxite Hills Mine, has been
underway in earnest since July. Of course, detailed planning commenced long before that.
AGM Chairman Address
21 November 2017
ASX ANNOUNCEMENT
ASX Announcement | 21 November 2017 | Page 2
The construction team have done a tremendous job and the transformation since July has been
nothing short of remarkable.
Metro is on schedule to load our first shipment at the Bauxite Hills Mine in April – that’s in four months’
time!
Just to give you a high-level summary of what has been happening:
▪ Extensive marine works are complete including the installation of new barge loading facility;
▪ The new accommodation camp is well on the way to being completed and some of the
new units are already being used to house construction workers.
▪ Haul roads are taking shape and the first stage of grade control drilling is complete
Our Managing Director, Simon Finnis, will give you further details in his presentation at the end of the
meeting.
Of course, all of that is very important -- and indeed exciting.
However, the development of your company has been and continues to be just as exciting.
As I mentioned, Metro Mining’s market capitalisation today is over $270M. Over the past year we
have attracted the interest, and subsequent investment, of many significant resource focused
institutional investors – both local and international.
Full details of our shareholder base and financial position is, of course, included in the Annual Report.
It is important to note, we continue to enjoy the ongoing support of our long-term key shareholders,
Balanced Property & Greenstone. I feel it is not improper for me to single them out because of their
long association and commitment to the company and the Bauxite Hills Mine.
Likewise, it is important for me to acknowledge the ongoing support of those “not so large”
shareholders. Each, and every shareholder is important to Metro and we particularly acknowledge
those who have remained during what has been quite a long -- and let’s say -- “interesting” journey.
To all of Metro Mining’s shareholders I say, “thank you.” And long may the journey continue!
Throughout the past year Metro has been totally committed to developing the Bauxite Hills project.
It has unashamedly been our key focus and will continue with the aim of achieving our first shipment
in April 2018.
Ladies and Gentlemen, the achievements of the last 12 months are due to the efforts of the entire
Metro team. We have an excellent executive team who have been well supported by a dedicated
team of professionals. Thank you all.
I would like to acknowledge the tremendous support and positive contribution that the Ankamuthi
People, the Traditional Owners, and Old Mapoon Aboriginal Corporation, the Trustee owner of the
land, have made to the progress and achievements to date.
I would also like to acknowledge the stellar effort of my fellow Board members. In the Annual report,
I refer to the 31 board meetings held during the year. The commitment of each, and every board
member has gone well beyond that.
I think it is appropriate that I conclude today with similar comments I made at the end of last year’s
Annual General Meeting.
… “In the coming year I am sure you will be further rewarded as Metro becomes a Bauxite producer
and exporter.”
Annual General Meeting
ASX : MMI| 21 November 2016
$0.05
$0.10
$0.15
$0.20
$0.25
$0.30
DADI
Balanced
Property
Institutions
Other
Shareholders Greenstone
6%
32% 20%
16%26%
Corporate Snapshot Share Price
Board of Directors
Chairman Stephen Everett
Managing Director & CEO Simon Finnis
Non-Executive Director Philip Hennessy
Non-Executive Director George Lloyd
Non-Executive Director Lindsay Ward
Non-Executive Director Mark Sawyer
Non-Executive Director Dongping Wang
Non-Executive Director Jijun Liu
Capital Structure (Post-Equity Raising)
Share Price (20-Nov-17) $0.21
Shares on Issue 1,286M
Market Cap $270M
Options Unlisted 41.6M
Cash (30-Sept-2017 Post Equity) $41.5M
Debt Facility (drawn & undrawn) $26.7M
Enterprise Value $255.2M
2 | ASX : MMI | AGM| November 2017
Share Register (Post-Equity Raising)
BUY (Jul-17)
Target Price: $0.44
BUY (Aug-17)
Target Price: $0.42
3 | ASX : MMI | AGM| November 2017
Incorporated Gulf Assets
Staged Development
Post tax NPV10 of $601M &
IRR of 81%
Milestone Achievements
Acquired Gulf –
Consolidated Project
✓
✓ ✓
✓
✓Equity Issues & Debt
provide Project Finance
Project Scale Expanded
Project Construction
on-Time & on-Budget
Environmental Approvals
Received
Customer Base Growing
✓
Doubled Reserves
Gained Infrastructure
Equity Raisings for $90M Total
to Strengthen Balance Sheet
& provide Project Finance
Secured Flexible, Low Cost
Debt Facility of $39.4M
BLF Structurally Complete –
Commissioning this week
All other aspects on target
Operational readiness on
track
Binding Sales Agreement
for 7Mt over 4 years &
LOI for 2.5Mt over 3 years
Positive response from customers
across China & internationally
All environmental approvals
received
Approval for up to 10Mtpa
production
1
2
3
4
5
6
▪ Metro has completed several value adding milestones in 2017 to be primed for Q2 2018 production
Key BFS Statistics 1
Pro
jec
t O
ve
rvie
w
Ownership: Metro (100%)
Location: Cape York, Qld
Commodity Bauxite
Product Type Direct Shipping Ore
Mine Type Surface mining
Contained mineral: Reserves 92.2Mt1 Resources 144.8Mt1
Status EA Granted, MLs Granted
Op
era
tio
na
l O
ve
rvie
w
Construction H2 2017
First Production April 2018
Start-up Production ~2Mtpa2
Steady State Production ~6Mtpa (year 4)2
Pre Production Capex ~$35.8m3
Expansion Capex ~$36.7m
Costs (LOM Avg) Onsite $16.4/t Incl Royalty $23.0/t
Mine Life 17 years
Operations Contract mining & transhipment
Workforce ~185 personnel
1.ASX Release 15 Mar 2017 | 2. Metro confirms all material assumptions underpinning production target & corresponding financial
information continue to apply & have not materially changed 3. Note this Capex & analysis excludes the purchase of Haul Trucks
Bauxite Hills Mine SnapshotLocation
4 | ASX : MMI | AGM| November 2017
5 | ASX : MMI | AGM| November 2017
Pathway to ProductionConstruction underway and
1st production scheduled April 2018
2017 2018
May June July Aug Sept Oct Nov Dec Jan Feb Mar April
Financing
Piles & Steel Fabrication
Camp Refurbishment
Tug & Barge Mobilisation
Civil Works
▪ Barge Loading Facility
▪ Haul Roads
Barge Loading Facility
▪ Marine Installation
▪ Conveyor
▪ Electricals
Material Offloading Facility
Office & Workshop Refurbishment
Grade Control Drilling & Analysis
New Camp Installation
Commissioning
Care & Maintenance (Wet Season)
Mining Fleet Mobilisation
Mine Production
4 months to Production
6 | ASX : MMI | AGM| November 2017
Construction Team Brisbane / Mackay / Gladstone
Feasibility & engineering
Owner’s team project construction management
Queensland
Piling works
Marine installation
Marine infrastructure management
Logistics
Cairns fabrication
Conveyor system
Product sampling
Brisbane
Feasibility
Mine planning
Queensland
Civil works
Haul Roads
Townsville
Electrical engineering & design
North Queensland operations
Camp management
Cairns
Fuel and lubricants
Cairns
Marine logistics
Traditional Owner Engagement Excellent Relationships continue to flourish
Ancillary Native Title & Land Access Agreement in place for mine life
Liaison Committee with Traditional Owner established
Traditional Owner training and employment
Indigenous employment is 42% and is above target.
Business opportunities for Traditional Owner’s being developed
Community engagement meetings and skills-audit workshops held in local communities
Cultural Heritage Management Plan in place to preserve Aboriginal Heritage
8 | ASX : MMI | Investor Presentation | November 2017
Construction UpdateCivil WorksBauxite Hills Village Barge Load-Out Facility Infrastructure
New camp installation
complete Dec 2017
Existing camp used
during construction
Marine install complete and
team demobilised
BLF structurally complete
Commissioning planned for
next week
Civils at Port Area complete
Sediment catchment dams
complete
Haul roads construction well
progressed
Communications solution
confirmed & ordered
Fuel system designed &
being fabricated
Electricity by generators on
site and operating
Bauxite Hills Mine Accommodation
Existing Camp area
New Camp Perimeter
Upgraded access & Parking
New Mine Accommodation
Wet Mess
Barge Loading Facility
Barge Loading Facility
Barge Loading Facility
Regional Exploration Metro’s exploration exposure on Cape York covers
>1,800km2 of holdings (including Bauxite Hills)
Close proximity to the coast
Potential to duplicate Bauxite Hills – internal growth
Identify other opportunities on Cape York and in other
prospective locations.
Ongoing exploration work planned for 2018
Reconnaissance sampling
Drilling of priority targets
15 | ASX : MMI | AGM| November 2017
Current Bauxite Market Conditions in China
Domestic bauxite shortages have emerged in the north – particularly Henan but also Shanxi (less so), driven
by environmental compliance audits, deteriorating grades and mine closures.
High caustic prices and scarcity of supply have combined to force inland refiners to seek bauxite from
southern China and from overseas.
At least three inland refineries are either using or trialing imported bauxite.
A further three have expressed interest to trial imported bauxite.
Domestic bauxite prices in Henan Province have risen from around RMB350/t a year ago to over RMB500/t
(delivered incl. VAT). Prices in other provinces have increases, although less so.
Potential new alumina refinery projects have also emerged in southern and northern China and are currently
seeking long-term, high volume bauxite supply.
So
urc
e:
CM
Gro
up
A Glimpse into the Future?
16 | ASX : MMI | AGM| November 2017
China’s Domestic Bauxite Prices on the Rise
Prices in Henan and Shanxi increased
significantly in response to tightening supply.
Northern refiners drawing down on stockpiles
and processing lower quality bauxite
(A/S ratio 3-4.5) to continue production.
Sourcing bauxite at A/S ratio 4.0 material is
currently difficult in Henan.
Northern refiners sourcing 20-30kt per month
of bauxite from Guizhou, have pushed
traded prices in the south of China higher.
Domestic bauxite tightness forecast to
continue into 2018.
Source: CM Group
17 | ASX : MMI | AGM| November 2017
China vs ROW Primary Aluminium Capacity 2000–2017 (Mtpy)
86%84%
81%
76%74% 72%
69%
63% 62%
56%55% 52%
47% 44% 42%41% 40% 40%
25.827.2
28.6
31.233.5 35.3
37.5
41.8 44.2
45.9 49.751.6
56.562.6
67.070.4 75.3 79.4
14%3.5
16%4.2
19%5.4
24%7.4
26%8.8
28%9.7
31%11.7
37%15.4
38%16.8
44%20.0
45%22.4
48%24.6
53%30.1
56%35.3
58%38.7
59%41.7
60%44.9
60%47.9
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Pe
rce
nta
ge o
f C
hin
a A
l Cap
acit
y in
Wo
rld
To
tal
ROW Al Capacity(MT) World Total Al Capacity(MT) China's Al Capacity(MT)
Source: IAI, CM Analysis
18 | ASX : MMI | AGM| November 2017
Global Primary Al Production 2006-2016
Since 2006
Strong domestic downstream demand
driven by construction, transportation,
packaging, consumer goods and
electrical sectors
China’s proportion in world primary Al
production increased from 28% in
2006 to 54% in 2016
2016 China production: 32.4 MTPA
2016 ROW production: 27.2 MTPA
On a full-cost basis, low-cost Chinese
smelters are globally competitive
Source: CM Group
❖ China’s CAGR 2006-2016
is 12.8%, while ROW is 1%
19 | ASX : MMI | AGM| November 2017
China Imported Bauxite Demand Forecast
Source: CM Group
Bx imports at CBIX
~$US80/dmt
Additional Bx imports
at CBIX ~US$50/dmt
Chinese refiners better understanding
the ViU value proposition – lower import
prices mean higher import volumes
20 | ASX : MMI | AGM| November 2017
Australian Bauxite Production | 2007 – 2016 (Mtpa)
Source: Australian Government
21 | ASX : MMI | AGM| November 2017
Summary – A Transformational Year
1 Metro holds significant advantages and is backed by leading partners
2 Strong seaborne bauxite fundamentals in China provide positive outlook
3 Recent achievements have delivered platform for value creation
4 Compelling metrics provides significant share price upside
5 Attracting increased investor awareness and support
6 Exciting period ahead with first production on track for April 2018
7 Strategic appeal from being Australia’s leading independent bauxite producer
22
For Further Information
Contact: Simon Finnis – Chief Executive Officer & Managing Director | Company Secretary & CFO – Scott Waddell
Ph: +61 (0) 7 3009 8000 | Head Office: Lvl 2, 247 Adelaide Street, Brisbane Q 4000 | GPO Box 10955, Brisbane Q 4000