jean-raymond boulle, titanium resources group

8/14/2019 Jean-Raymond Boulle, Titanium Resources Group

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Company Overview

Presentation by


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TRG

Produces three commodities rutile

ilmenite and bauxite

At its two mines in Sierra Leone


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Location

Sierra Leone

Africa


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Sierra Leone

Nitti Port

Sierra Rutile Mine

Freetown

Sierra Leone

SML Bauxite

Sherbro Island


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Sierra Rutile

Projected mine life of 19 years withmineable reserves of 3,825,000tonnes rutile

Current production capacity of100,000 tpa rutile

Production capacity expected tomore than double to 240,000tparutile by 2008

Production fully sold until 2008 Self contained mine site with

refurbished infrastructure

Excellent potential to expand reservebase through low risk near mineexploration

Current production capacity of18,000 tpa ilmenite


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SML Bauxite

10 year mine life with mineablereserves of 12.4 million tonnes

grading 53.1% alumina Current production of

approximately 1.2mtpa premiumgrade metallurgical bauxite

Long term off take agreementsin place with Alcoa and Glencore

Shares infrastructure withSierra Rutile

Operated under contractby PW Mining


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Overview

Listed on AIM in August 2005raising 41m ($74m)

Placing in October 2005 raising

10m ($17.5m) Experienced management team Market cap of $247m (127m) at 20

March 2007 Mines in full production Significant exploration upside for

bauxite and rutile

Stable political and economicenvironment 2,000 employees


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Summary financials, yr ended 31.12.06

Sales of $51.3m (05 $337,000) Gross profit of $21.5m (05

$239,000) Attributable loss before tax of

$1.47m (05 $17.5m) Profit after tax of $34m $9.7m net cash generated from

operations $39m in investment activities Cash and cash equivalents of

$52m


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Investment case

Demand for titanium mineralsand bauxite increasing

TRG produces premiumproduct

natural rutile grades 95.5% bauxite used as a sweetener

All production fully sold Rutile production will more

than double by 2008 giving TRG30% market share

Significant low risk near mineexploration upside exists


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The rutile market


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TiO 2

Rutile and ilmenite are titanium-bearing minerals

Used in production of titanium dioxide pigments titanium metal and welding rods

Titanium mineral industryrevenues of approx. $2bn perannum

2006 TiO 2 pigment consumptionapprox. 4.8m tonnes 2015forecast demand of 7.3m tonnes

2006 TiO 2 pigment revenueapprox. $10.5bn

Consumption of TiO 2 pigmenthas grown on average by 3% perannum over the past thirtyyears*

* TZMI estimate


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TRGs share of natural rutile market (2006)

Numbers are estimated and based on the companys own figures

Exxaro (inc TiWest) 13.8%

Volnogorsk 12.3%

Bemax 6.1% TRG 13.6%

Iluka (inc CRL) 31.9%

RBIT 16.5%

Others 5.1%


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TRGs share of natural rutile market (2008 expected)

Numbers are estimated and based on the companys own figures

Exxaro (inc TiWest) 9.9%

Volnogorsk 8.1%

BeMax 7.3%

TRG 29.8%

Iluka (inc CRL) 26.1%

RBIT 11.1%

Others 7.7%


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TRGs customers by market sector

Expressed as a percentage of TiO 2 units

TiO 2 pigments 87%

Ti metal 9%

Welding rods 4%


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Natural rutile vs other mineral sands

0

50

100

150

200

250

300

350

400

450

500

2004 2005 2006

Cl2 Ilmenite

Cl2 Slag

SR

Rutile

$ per tonne


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Strategy


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Strategy

Expand production at existingmines

rutile: dredges D2 & D3

bauxite: 300,000 tpa expansion Increase reserve and resource

base through exploration onexisting licences

Wallace Drilling on contract in house banka drills

Acquire additional mineralproperties

criteria Turners Peninsular


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Expansion programmes - rutile

Dredge D2 Commission in Q4 2007 3,000 tonnes of structural elements imported Will add 100,000 tpa to production capacity

Dredge D3 Dredge purchased Being readied for shipment to SL Will add 40,000 tpa to production capacity

Land plant upgrade Engineering phase underway Completed by Q4 2007


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Exploration

Targeting prospective areaswithin existing tenures

Additional bauxite deposits at Sierra Mineralsidentified

Sierra Rutile mine plan being amended as additionalrutile found

Turners Peninsular acquiredin 2006

40km from current operations Mineral potential identified by Geological Survey of

Sierra Leone Predominantly ilmenite and zircon Exploration underway


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Performance in 2006


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Operating performance

Sales of $51.3m 73,802 tonnes of rutile produced 13,819 tonnes of ilmenite produced 1,072,159 tonnes of bauxite

produced

First shipments from Nitti port rutile, May 2006 bauxite, February 2006

New HFO power station purchased


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2006 TiO 2 production volumes

0

5000

10000

15000

20000

25000

1st Qtr 2nd Qtr 3rd Qtr 4th Qtr

Ilmenite

Standardrutile

Industrialrutile

tonnes


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2006 Bauxite production volumes

tonnes

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

1st Qtr 2nd Qtr 3rd Qtr 4th Qtr

Bauxite


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HSEC


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Health and safety

Key determinant of operatingperformance

Long Term Injury Frequency Rateof 0.36 in 2006

HIV/AIDS awareness campaigndeveloped in partnership withNGOs

Developing voluntary testing,counselling and treatmentprogramme for HIV/AIDS


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Environment and communities

Facilitating the DarwinExperimental Project to developpractical methods for successfulreclamation and conservationprogrammes

Surface rent payments to localcommunities and agriculturaldevelopment fund

Local pop. has grown from 5,000people to 105,000 people

Not for profit Sierra Rutile

Foundation established bio fuel conversion plant

Sierra Minerals planting andrehabilitation programmes

underway


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Financial ResultsYear 2005 2006

P fi & l


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Profit & loss statement

2006($ 000)

2005($ 000)

Sales 51,304 337

Cost of sales (29,764) (98)Gross profit 21,540 239

Other income 2,812 1,721

Operating expense (58) (2,598)

Administrative and marketing expenses (16,011) (14,828)

Other expenses (5,866) (1,606)

Operating profit / (loss) 2,417 (17,072)

Exceptional item (2,200) -Finance costs (1,694) (489)

Loss before taxation (1,477) (17,561)

Income tax 35,923 3,984

Profit / (loss) for the period 34,446 (13,577)

B l h t


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Balance sheet($ 000) 2006 2005

Non-current assets

Property, plant andequipment 92,665 61,279

Intangible assets 13,115 12,985

Non-currentreceivables 753 1,367

Deferred tax assets 86,373 50,304

192,906 125,935

Current assets

Inventories 15,054 7,155

Trade and otherreceivables 14,275 8,777

Cash and cashequivalents 52,393 79,682

81,722 95,614

Total assets 274,628 221,549

($ 000) 2006 2005

Share capital 198,160 194,951

Revenue reserve (deficit) 20,869 (13,577)

Equity holders interest 219,029 181,374

Liabilities

Borrowings 36,856 28,390

Provision for liabilitiesand charges 2,150 2,150

39,006 30,540

Current liabilities

Trade and otherpayables 16,464 9,625

Current tax liabilities 85 10

Borrowings 44 -

Total equity andliabilities 274,628 221,549

Concl sion


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Conclusion

One of the worlds largest natural rutile deposits High quality rutile production sold under long term off take contracts

to world class chemical companies Established premium-grade metallurgical bauxite reserve base and

long term off take agreements Well-established infrastructure and support from the Government Experienced and highly successful management team Cost mitigation projects expected to make the Sierra Rutile mine one

of the lowest cost producers of natural rutile On track to double rutile production rates and extend bauxite reserves

within current financial year Possibility of significant expansion of production and proved reserves

on existing licence areas Several different growth initiatives currently under evaluation

jean-raymond boulle, titanium resources group

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