investor presentation - metro mining€¦ · investor presentation. highlights 2 | asx : mmi ......
TRANSCRIPT
Investor Presentation
Highlights
2 | ASX : MMI | November 2018
1 Bauxite Hills Mine in production 10 months after construction commenced – as planned
2 Production Ramping Up – 25 Vessels and >1.6 million tonnes shipped to date
3 Upgrade strategy announced – 2019 forecast production of 3.5M Wet Metric Tonnes (WMT)
4 Long life mine delivering into a strongly growing Chinese market
5 Independent Cape York bauxite producer
6 Sales underpinned by a binding 4 year offtake agreement (~50% production) with Xinfa
7 Shipments made to a range of Chinese customers
19.8%
15.5%
10.2%
6.1%9.5%
38.9%
Corporate Snapshot Share Price Performance June 2016 – November 2018
Board of Directors
Independent Chairman Stephen Everett
Managing Director & CEO Simon Finnis
Independent Non-Executive Director Philip Hennessy
Independent Non-Executive Director Lindsay Ward
Non-Executive Director Mark Sawyer
Non-Executive Director Xiaoming (Aaron) Yuan
3 | ASX : MMI | November 2018
Share Register
Greenstone
Balanced Property
BlackRock
DADI
Other Institutions
Other Shareholders
Share Price (7 November 2018) A$0.155
Shares on Issue 1,383M
Market Cap A$214.4M
Options Unlisted 31M
Cash and Receivables (30-Sept-2018) A$38.2M
Debt Facilities A$41.2M
Enterprise Value A$217.4M
Capital Structure
$0.05
$0.10
$0.15
$0.20
$0.25
$0.30
$0.35
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April* May June July August September October
Mo
nth
ly M
inin
g (
k w
mt)
0
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4,000
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4 | ASX : MMI | November 2018
2019 Expansion & UpgradeMonthly Mining Production
*Partial Mth - Mining began 17 Apr 2018
Da
ily
Sh
ip L
oa
din
g R
ate
s
Q3 Q4
▪ Strong customer demand drives improvement and upgrade
strategy – 2019 forecast production now 3.5M (WMT).
▪ Much of existing infrastructure designed for higher operating
levels making initiatives easy to implement and low cost.
▪ Cost of A$6.8M will include
▪ Supplementing the current truck and haulage fleet.
▪ Duplicating screening capacity at the BLF.
▪ Jaw crusher to treat oversized material.
▪ Supplementing marine fleet and infrastructure.
▪ Many of these initiatives were part of the long-term Stage 2
expansion to steady state production of 6.0M WMT pa.
(subject to DFS update and Board approval)
▪ Will result in greater economies of scale, a variety of
operational benefits and lower unit costs.
5 | ASX : MMI | November 2018
Metro Mining Q3 2018 Results
Bauxite Hills Production Results
Period July August September Sept Quarter June Qtr YTD
Bauxite Mined (WMT)(‘000) 285 277 297 859 445 1,304
Bauxite Shipped(WMT)(‘000) 253 297 272 822 399 1,221
Bauxite Mined
859,000 tonnes
26 Ships for year and Counting
Cash &
Receivables
$38.2Million
Bauxite Shipped
822,000 tonnes
Revenue
$43.8 Million
6 | ASX : MMI | November 2018
Metro Mining Q3 2018 Unit CostsCosts Average
A$46 / WMT
Opportunities Identified to Reduce Costs in 2019
Higher Volumes will
have a positive impact
Month on Month
Reductions
Lower A$
Impacted Freight
Unit Operating Costs
Costs July Aug Sept Sept Qtr
Site Cost A$/WMT 24.51 24.25 22.44 23.73
Non-Site Cost
▪ Freight A$/WMT 16.60 16.99 18.42 17.34
▪ Royalties A$/WMT 6.30 5.02 4.69 5.31
TOTAL 47.42 46.26 45.54 46.38
▪ Ramp-up on schedule.
▪ Bauxite has been shipped
to 5 different Chinese
Customers.
▪ During the Quarter,
production was consistently
achieving budgeted
operating rates on a daily
basis.
▪ Transhipment activities
are performing in line
with expectations.
▪ Bauxite market penetration
increasing, sales ongoing.
▪ Production Guidance for
CY2018 is maintained.
7 | ASX : MMI | November 2018
2018 Production Guidance Update
BH1 Mining Area
Bauxite Production Guidance (WMT)
Bauxite Mined
(‘000t)
Jun ’18 Qtr Actual
Sept ’18 QtrActual
Dec ’18 QtrForecast
2018 – CYForecast
2019 – CYForecast
445 859 651 – 746 1,980 – 2,075 3,500
Bauxite Shipped
(‘000t)399 822 759 – 854 1,980 – 2,075 3,500
Stage 2
Increasing Production Profile
8 | ASX : MMI | November 2018
▪ Ramp up over 4 years reflects
development of the customer
base. Production in excess of
existing off-take will include spot
sales and/or new off-take.
▪ Expansionary capital expenditure
estimated at approximately $37M1
(NB: to be confirmed through updating the DFS).
▪ Significant unit cost improvement
at higher production rates
▪ Existing infrastructure has been built
to facilitate higher production rates
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
2018 2019 2020 2021
Stage 1
▪ Subject to Board Approval
▪ Estimated Capital costs of $37M1
1. ASX Release 15 Mar 2017
Tonnes Per
Annum
Key Statistics 1
Pro
jec
t O
ve
rvie
w
Ownership: Metro (100%)
Commodity Bauxite
Location: Cape York, Qld
Product Type Direct Shipping Ore
Contained Mineral: Reserves 92.2Mt1 Resources 144.8Mt1
Mine Type Surface mining
Status Operational
Op
era
tio
na
l O
ve
rvie
w
First Production April 2018
Start-up Production ~2Mtpa
Steady State Production2 ~6Mtpa (year 4)
Mine Life 17 years
Operations Contract mining & transhipment
Workforce ~185 personnel
1.ASX Release 15 Mar 2017 2. subject to Board approval of expansion to stage 2
Bauxite Hills Mine SnapshotLo
ca
tio
n
9 | ASX : MMI | November 2018
10 | ASX : MMI | November 2018
Simple DSO Project◼ Operational simplicity and specialist mining and transhipment contractors means an easy to manage operation
◼ Dry season only operations negate the risk of weather impact
◼ Site location, geological setting and layout provides low operating costs
Clear vegetation &
remove overburden
Strip mine bauxite
Return overburden & replace
topsoil - then revegetate
Mottled Zone
Ironstone
DSO Bauxite Horizon (~1.75m)
Overburden (~0.5m)Min
ing
Log
istic
s
AirstripCamp Site
11 | ASX : MMI | May 2018
Bauxite is the Primary Ore of AluminiumKey Ingredient for Manufacturing Aluminium
4-6 tonnes bauxite 2 tonnes alumina 1 tonne 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
12 | ASX : MMI | May 2018
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
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
13 | ASX : MMI | May 2018
Map of China’s Major Alumina & Primary Aluminium BasesSource: CM Group
China’s top 11 primary Al
production provinces
1. Shandong
2. Xinjiang
3. Inner Mongolia
4. Henan
5. Gansu
6. Qinghai
7. Yunnan
8. Ningxia
9. Guizhou
10.Shanxi
11.Guangxi
Liaoning Province
is emerging as a
major player, with
three projects planned
or under construction
China’s Main Bauxite Concentration
China’s major
alumina producing
provinces:
1. Shandong
2. Shanxi
3. Henan,
4. Guangxi
5. Guizhou
6. Inner Mongolia
Aa Capacity >1,000 KYPY
Aa Capacity <1,000 KYPY
Al Capacity >500 KYPY
Al Capacity <500 KYPY
14 | ASX : MMI | November 2018
China Demand Outlook Remains Strong
Source: CM Group
15 | ASX : MMI | August 2018
China’s 2017 Bauxite Imports
▪ Guinea now largest
supplier to China
driven by exports from
the Chinese-controlled
SMB-WAP
▪ Australia's supply
is steadily growing, up
4.2Mt (20%) in 2017 to
25.5Mt
▪ Indonesia and
Malaysia now less
relevant
▪ Ocean freight on an
upward trend
▪ H1 2018 Bauxite imports
estimated at 40.5MtSource: China Customs, CM
16 | ASX : MMI | November 2018
Favourable Price DynamicCBIX Weighted Daily Price VS Alumina Price Index
2000
2500
3000
3500
4000
44.0
48.0
52.0
56.0
60.0
64.0
68.0
72.0
Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18
Ala
din
ny
Ch
ina
Alu
min
a In
de
x (
RM
B/t
)
CB
IX D
aily
We
igh
ted
Ba
ux
ite
In
de
x (
US$
/DM
T)
AladdinyCBIX
17 | ASX : MMI | November 2018
Positive Community Relationships A “Welcome to Country Ceremony” has been held at Bauxite Hills Mine.
Major Ankamuthi family groups plus Metro’s Chair, Stephen Everett, Managing
Director, Simon Finnis and Metro employees attended.
Official Welcome Ceremony performed by Ankamuthi Elder George Williams
Current Indigenous employment is 37% (Target 20%)
Ankamuthi Elders George Williams and Richard Woosup and Metro’s Environmental heritage Support Officer Barunah “Bruno” Sagiba
Ankamuthi Elder, George Williams, is welcomed by Metro personnel
18 | ASX : MMI | November 2018
Summary – A Compelling Opportunity
1 Metro has moved from Developer to Operator
2 Production has ramped-up according to plan
3 Long-life mine supplying bauxite from a stable jurisdiction
4 Strong seaborne bauxite market to China driving positive price and demand
5 Growing exports and production rates provide ongoing value creation
6 Australia’s leading independent bauxite producer with strategic appeal
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
19 | ASX : MMI | November 2018
FORWARD LOOKING STATEMENT
Statements and material contained in this ASX Announcement, 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. Graphs used in this ASX Announcement (including data used in the graphs) are sourced from third parties and Metro Mining has not independently verified the information. Metro Mining is at an early
development stage and while it does not currently have an operating bauxite mine it is taking early and preliminary steps (such as but not limited to Prefeasibility studies etc.) that are intended to ultimately result in the
building and construction of an operating mine at its project areas. Although reasonable care has been taken to ensure that the facts stated in this ASX Announcement 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 Announcement 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 ASX Announcement 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.
COMPETENT PERSON’S STATEMENT
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.
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