diggers & dealers mining forum august 2019 - metro mining · “metro mining –bauxite...

Diggers & Dealers Mining Forum

August 2019

Investment Rationale

2 | ASX : MMI | August 2019

Strongly Growing Market

Long Life Mine

Enduring Geographical

and jurisdictional

Competitive Advantage

Generating Cash

Revenue Earning

Simple Project –

Low CAPEX & OPEX

$0.05

$0.10

$0.15

$0.20

$0.25

$0.30

$0.35

Ju

n-1

6

Ju

l-1

6

Au

g-1

6

Se

p-1

6

Oc

t-16

No

v-1

6

De

c-1

6

Ja

n-1

7

Fe

b-1

7

Ma

r-17

Ap

r-17

Ma

y-1

7

Ju

n-1

7

Ju

l-1

7

Au

g-1

7

Se

p-1

7

Oc

t-17

No

v-1

7

De

c-1

7

Ja

n-1

8

Fe

b-1

8

Ma

r-18

Ap

r-18

Ma

y-1

8

Ju

n-1

8

Ju

l-1

8

Au

g-1

8

Se

p-1

8

Oc

t-18

No

v-1

8

De

c-1

8

Ja

n-1

9

Fe

b-1

9

Ma

r-19

Ap

r-19

Ma

y-1

9

Ju

n-1

9

Ju

l-1

9

19.8%

15.9%

10.2%

5.6%6.0%

42.5%


Share Register

Greenstone

Balanced Property

BlackRock

DADI

Other Institutions

Other Shareholders

Share Price (31 July 2019) A$0.135

Shares on Issue 1,383.4M

Market Capitalisation A$187.0M

Options Unlisted 30.1M

Cash and Receivables (30-June-2019) A$29.5M

Debt Facilities A$42.1M

Enterprise Value A$199.6M

Capital Structure Share Price Performance

Price ($) Volume (m)

Board of Directors

Independent Chairman Stephen Everett

Managing Director & Chief Executive Officer Simon Finnis

Non-Executive Director Mark Sawyer

Independent Non-Executive Director Philip Hennessy

Independent Non-Executive Director Fiona Murdoch

Share Price & Corporate Structure Share Price Performance


Key Ingredient for Manufacturing Aluminium

Key Bauxite Value Drivers

Grade Alumina content ranges from 30% - 65% and silica ranges from 2% - 30%

Location Proximity to buyer, supply reliability and sovereign risk

1 tonne aluminium2 tonnes alumina ==4-6 tonnes bauxite

Bauxite is the Primary Ore of Aluminium


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

41.844.2

45.9 49.751.6

56.5

62.6 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

of

Ch

ina

Al C

ap

ac

ity in

Wo

rld

To

tal

ROW Al Capacity(MT) World Total Al Capacity(MT) China's Al Capacity(MT)

Source: IAI, CM Analysis

China vs ROW Primary Aluminium Capacity

2000 – 2018 (Mtpa) Source: CM Group


Source: CM Group

China Demand Outlook Remains Strong

Source: CM Group


▪ Guinea now largest

supplier to China. But

98% of exports are

from the Chinese-

controlled SMB-WAP

▪ Australia's supply

is steadily growing,

up 4.1Mt (16%) in

2018 to 29.6Mt

▪ Indonesia & Malaysia

now less relevant

▪ Ocean freight on an

upward trend

▪ 2019 Bauxite imports

estimated at 95.0MtSource: China Customs, CM

China’s 2018 Bauxite Imports

82.6Mt

0.8%

India

0.7% Malaysia

2% Solomon Is

Australia

Indonesia

0.1% Turkey

9%

0.5% Montenegro

2% Brazil`

36%

46%

Guinea

0.7% Vietnam

0.7% Ghana

12% Jamaica


Source: CM Group

Alumina Producers China

Main Bauxite Consuming Provinces

5. Guizhou (10MT)

4. Guangxi (18MT)

3. Henan (27MT)

2. Shanxi (49MT)

1. Shandong (65MT)

Liaoning Province and Inner Mongolia

Emerging as major new players, with several

projects planned or under construction

5

4

21

3

Source: CM Group

◼ China imports continue to increase with total 2018 imports exceeding 82M WMT

◼ Bauxite prices in an upward trend with CBIX bauxite index currently US$52.60 DMT (dry metric tonne)

◼ Strong demand for Metro’s bauxite from Chinese inland Refineries as domestic bauxite supply has been hindered by resource

depletion, recent mine closures and environmental audits


Source: CM GROUP

CBIX Bauxite Index – Last 12 Months

Bauxite Market & Price Outlook

40.0

42.0

44.0

46.0

48.0

50.0

52.0

54.0

56.0

Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19Mar-19 Apr-19 May-19 Jun-19

CBIX Bauxite Index – Last 12 Months

China Bauxite Consumption

So

urc

e: C

M G

rou

p

0

50

100

150

200

250

2015A 2016A 2017A 2018A 2019F 2020F 2021F 2022F 2023F 2024F 2025F

Ch

ina

Ba

uxite

Co

nsu

mp

tio

n (

MT)

Domestic Source Imported Source


◼ DSO - virtually no overburden, no blasting, no

engineering or pit design required, no processing

◼ To ensure quality there are sophisticated processes

around mine planning and quality control.

Bauxite Hills Project

Clear vegetation &

remove overburden

Return overburden & replace

topsoil - then re-vegetate

Overburden (~0.5m)DSO Bauxite Horizon (1.5-3m)IronstoneMottled Zone

Haul ore 5 – 22km to stockpile

and barge loading

Load bauxite on bulk carrier for

transport to China

Tranship ore down Skardon River


Metro’s Road to Production!

Gained control of

Bauxite Hills early 2015

Financed and constructed

all in 2017 – CAPEX A$37M

Takeover of Gulf – doubled

Resource & Reserve – Dec 2016

July 2019 – 3Mt Mined

Dec 2018 – 3.5Mt Expansion

April 2018 – 1st Production

July 2019 – 18.8% increase

in Reserve


$23.7 $24.7 $24.2 $24.3

$22.7 $25.0 $23.8$15.7

$53.3

$60.7$57.0

$52.3

$46.4$49.7 $48.1

$40.0

Sept Qtr Dec Qtr 6-months

to Dec-18

BFS Estimate

(Year 1)Site Costs Non-Site Costs Avg. Price Received

(Pric

e R

ec

eiv

ed

/Op

era

tin

g C

ost

A

$/W

MT)

Revenue

$93.2M

2018 2H Operating Costs & Realised Prices

Mined Shipped

June Qtr Sept Qtr Dec Qtr Mined Shipped

2018 2H Results

Mine

EBITDA

$13.1

445

2047859

743

Ba

uxite

To

nn

es

(WM

T)

399

2,037822

816

2018FY Production and Shipped Bauxite

2018 Production Guidance Achieved


✓ Add Jaw Crusher to treat oversized material

✓ Increase the current haulage fleet

✓ Increase the screening capacity at the Port

✓ Supplement the marine fleet and infrastructure

2,047

3,000 3,000

500

2018Actual

2019 2019 Expanded

Ba

ux

ite

To

nn

es

(WM

T)2019 Production Expansion

2019 Expansion to 3.5Mt

Capital Cost $6.8M

Summary of Key Improvements

124 151

329 311

427 374

443 463

1323 1299

Ba

uxite

To

ne

s (W

MT)


Revenue

$48.4M

* Note: Non-Site Costs refers to ocean freight

and royalties

Mine

EBITDA

$9.1M

2019 June Qtr Results

$35.51 $21.94 $19.87 $23.47

$23.05

$22.76 $23.03 $22.94

$60.21 $54.86

$58.12 $57.26

$-

$10.00

$20.00

$30.00

$40.00

$50.00

$60.00

$70.00

April May June June QtrA

$/W

MT

Site Costs Non-Site Costs Average Sales Price Received

$58.56

$42.90$46.41$44.70

2019 June Qtr Operating Costs & Realised Prices

April

June

YTD

May

2019 YTD Production and Shipped Bauxite

July

▪ Shipped▪ Mined


Future Growth

* Subject to Board Approval

Extended Mine Life

Strong Stage 2 Production Expansion

Steady State Production Post Stage 2 Expansion Based on Current Mine LifeStage 1 Stage 2*

Ba

ux

ite

To

nn

es

Millio

n (W

MT)

0

1

2

3

4

5

6

2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037

2019

Expanded

Production

Resource down

6.4Mt (4.6%) to

138.2Mt (dry)

Reserve up

17.3Mt (18.8%)

to 109.5Mt (wet)

Stage 2

Expansion DFS

update

▪ Depletion by mining

▪ Conversion of existing resources

▪ Moisture assumption adjustment based on operational experience

▪ Definitive Feasibility Study largely complete

▪ Further detailed work on the floating ship-loader actioned

▪ Expansion sets mine up for next 15 years & vital to take time for informed decision

▪ Results within August

▪ Depletion by mining

▪ Adjustment to dry bulk density

▪ Measured category up 42.8%


◼ Relationship continues to

grow and flourish

◼ Metro a key part of

Northern Cape York

Community

◼ Current Indigenous

employment is 39% (target

20%)

◼ Business opportunities for

indigenous groups being

assessed with one already

in place

Positive Community Relationships

Investment Rationale


Strongly Growing Market

Long Life Mine

Enduring Geographical &

jurisdictional competitive

advantage

Generating Cash

Revenue Earning

Simple Project –

Low CAPEX & OPEX

For Further Information

Contact: Simon Finnis – Chief Executive Officer & Managing Director | Chief Financial Officer – Duane Woodbury

Ph: +61 (0) 7 3009 8000 | Head Office: Lvl 2, 247 Adelaide Street, Brisbane Q 4000 | GPO Box 10955, Brisbane Q 4000


FORWARD LOOKING STATEMENT

Statements and material contained in this ASX Presentation, particularly those regarding possible or

assumed future performance, production levels or rates, commodity prices, resources or potential

growth of Metro Mining Limited, industry growth or other trend projections are, or may be, forward

looking statements. Such statements relate to future events and expectations and, as such, involve

known and unknown risks and uncertainties. Any graphs sourced from third parties are referenced

and Metro Mining has not independently verified the information. Although reasonable care has been

taken to ensure that the facts stated in this ASX Presentation are accurate and or that the opinions

expressed are fair and reasonable, no reliance can be placed for any purpose whatsoever on the

information contained in this document or on its completeness. Actual results and developments may

differ materially from those expressed or implied by these forward-looking statements depending on a

variety of factors. Nothing in this ASX Presentation should be construed as either an offer to sell or a

solicitation of an offer to buy or sell shares in any jurisdiction.

COMPETENT PERSON’S STATEMENT

The information in this report that relates to the Bauxite Hills Mine Mineral Resource is based on

information compiled by Ed Radley who is a consultant to Metro Mining and a Member of the

Australian Institute of Mining and Metallurgy (MAusIMM)). Mr Ed Radley has sufficient experience

which is relevant to the style of mineralisation and type of deposit under consideration and to the

activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of

the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’.

Mr Ed Radley has consented in writing for inclusion in this Report the matters based on the

information in the form and context it appears.


The information in this ASX Announcement to which this statement is attached that relates to the

“Metro Mining – Bauxite Hills” Reserves is based on information compiled by MEC Mining and reviewed

by Edward Bolton, a Competent Person who is a Member of the Australasian Institute of Mining and

Metallurgy. Edward Bolton is a full-time employee of MEC Mining Pty Ltd. Edward Bolton has sufficient

experience that is relevant to the style of mineralization, type of deposit under consideration and to

the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the

‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Edward

Bolton consents to the inclusion in the report of the matters based on his information in the form and

context in which it appears. Competent Person Statement:


The information in this report that relates to Exploration Results is based on information compiled by

Neil McLean who is a consultant to Metro Mining and a Fellow of the Australian Institute of Mining

and Metallurgy (F.Ausimm). Mr McLean has sufficient experience that is relevant to the style of

mineralisation and type of deposit under consideration and to the activity being undertaken to

qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting

of Exploration Results, Mineral Resources and Ore Reserves’. Mr McLean consents to the inclusion in

the report of the matters based on information in the form and context in which it appears.

Disclaimer

Bauxite Hills Mine Snapshot


Key Statistics

Pro

jec

t O

ve

rvie

w

Ownership: Metro (100%)

Commodity Bauxite

Location: Cape York, Qld

Product Type Direct Shipping Ore

Contained Mineral: Reserves 109.5Mt1 Resources 138.2Mt1

Mining Mine Type Surface mining Status Operational

Op

era

tio

na

l O

ve

rvie

w

Commenced Mining April 2018

2018 Production ~2.04M WMT

2019 Production ~3.4M WMT

Future Production2 ~6M WMT pa (from 2021)

Mine Life 19 years1

Operations Mining & transhipment

Workforce ~240 personnel

1.ASX Release 17 July 2019 2. subject to Board approval of expansion to stage 2

Loc

atio

n

diggers & dealers mining forum august 2019 - metro mining · “metro mining –bauxite...

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