Cummins Range Rare Earths Project

Transcription

1 Cummins Range Rare Earths Project December 2011

2 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.

3 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 * At 30 November 2011 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% ** Trust account holding on behalf of NAV shareholder OFFICE Suite 1, 83 Havelock Street WEST PERTH 6005 Western Australia

4 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% RARE EARTHS A new market sector finding its feet Bloomberg Rare Earths Mineral Resources Index (BNREMRS:IND)

5 A note on falling rare earth prices CUMMINS RANGE RARE EARTH OXIDE BLEND PRICE On a LINEAR Scale $250 $200 $150 $100 $50 Lynas project funding secured at these prices Market reacted to this fall and recent expert views of future oversupply $0

6 A note on falling rare earth prices CUMMINS RANGE RARE EARTH OXIDE BLEND PRICE On a LOG Scale $1,000 $100 Lynas project funding secured at these prices Market reacted to this fall $10 $1 An order of magnitude shift in REO Pricing

7 Cummins Range Western Australia The Highway The Locals Northern Australia is the nearest future REO region to Japan (5,500km) and China (4,500km) The Site Camp

8 One of few rare earth deposits worldwide Of the 191 rare earth assets in the Infomine database - over 85% are still at early exploration stage or are just raw prospects 2 mines 5 projects Operating M+I Resources 9 projects (including Cummins Range) Inferred Resources 9 projects Advanced Exploration 73 projects Early Exploration 93 prospects Raw Prospect Data: Infomine 28 August 2011

9 Known geology and mineralogy GEOLOGY: Carbonatite A common host of rare earth mineralisation globally 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

10 Shallow, flat and at surface No pre-stripping needed Simple and cheap mining proposition Clear potential to convert most of Resource into mineable ore INFERRED RESOURCE: % TREO (1% cut off) = 72 kt REO % TREO (0.5% cut off) = 120 kt REO Opportunity to commence with higher grade Stage 1 pit

11 Recent drilling confirms quality Long intersections at above resource grade Including high grade zones Intercept Length (m) Grade (% TREO) From (m) Hole ID Hole Type Intercept Length (m) Grade (% TREO) From (m) KRC112 Infill KRC114 Infill KRC101 Extension Mineralisation continues to NW and SE Mineralisation continues at depth in NW

12 Rare earth metallurgy is complex, and key Mine to Market Rare Earth Ore Mining Concentration Cracking Upgrading Separation Rare Earth Products Downstream cracking, upgrading and separation metallurgical technology is mature for monazite-hosted rare earths 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

13 Time line SCOPING Preliminary Evaluation Study by Q PFS Pre-Feasibility Study by Q BFS Bankable Feasibility Study by Q PRODUCTION Production in 2017

14 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 LYNAS Mt Weld Project Farm In Resource Drilling Scoping Study Feasibility Study Peer Review Project Funding G F C Refinancing Construction PRODUCTION >>> KRE Cummins Range Drilling / Scoping PFS BFS Financing / Construction PRODU CTION >>> 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

15 Take aways KIMBERLEY RARE EARTHS LTD $14 million cash Experienced metallurgical team Development focussed RARE EARTH MARKET PRICES Finding the new balance after paradigm shift SUPPLY China supply shrinking, still no new production from outside DEMAND Strong growth expected in line with history KRE ASSETS CUMMINS RANGE Advanced Australian rare earth Resource ready to develop MALILONGUE Exciting heavy rare earths exploration project in Mozambique KRE FOCUS Rapidly advancing rare earth projects through exploration and development into production

16 Focused On Rare Earths Principal Place of Business Suite 1, 83 Havelock Street WEST PERTH 6005 Western Australia Registered Office Level 7, The Quadrant, 1 William Street PERTH 6000 Western Australia Contact Details Telephone: +61 (8) Facsimile: +61 (8)