AMG Mining Mibra Mine Update. By Itamar Resende October 2011

Transcription

1 AMG Mining Mibra Mine Update By Itamar Resende October 2011

2 Cautionary Note THIS DOCUMENT IS STRICTLY CONFIDENTIAL AND IS BEING PROVIDED TO YOU SOLELY FOR YOUR INFORMATION BY AMG ADVANCED METALLURGICAL GROUP N.V. (THE COMPANY ) AND MAY NOT BE REPRODUCED IN ANY FORM OR FURTHER DISTRIBUTED TO ANY OTHER PERSON OR PUBLISHED, IN WHOLE OR IN PART, FOR ANY PURPOSE. FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF APPLICABLE SECURITIES LAWS. This presentation does not constitute or form part of, and should not be construed as, an offer to sell or issue or the solicitation of an offer to buy or acquire securities of the Company or any of its subsidiaries nor should it or any part of it, nor the fact of its distribution, form the basis of, or be relied on in connection with, any contract or commitment whatsoever. This presentation has been prepared by, and is the sole responsibility of, the Company. This document, any presentation made in conjunction herewith and any accompanying materials are for information only and are not a prospectus, offering circular or admission document. This presentation does not form a part of, and should not be construed as, an offer, invitation or solicitation to subscribe for or purchase, or dispose of any of the securities of the companies mentioned in this presentation. These materials do not constitute an offer of securities for sale in the United States or an invitation or an offer to the public or form of application to subscribe for securities. Neither this presentation nor anything contained herein shall form the basis of, or be relied on in connection with, any offer or commitment whatsoever. The information contained in this presentation has not been independently verified. No representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy or completeness of the information or the opinions contained herein. The Company and its advisors are under no obligation to update or keep current the information contained in this presentation. To the extent allowed by law, none of the Company or its affiliates, advisors or representatives accept any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection with the presentation. Certain statements in this presentation constitute forward-looking statements, including statements regarding the Company's financial position, business strategy, plans and objectives of management for future operations. These statements, which contain the words "believe, expect, anticipate, intends, estimate, forecast, project, will, may, should and similar expressions, reflect the beliefs and expectations of the management board of directors of the Company and are subject to risks and uncertainties that may cause actual results to differ materially. These risks and uncertainties include, among other factors, the achievement of the anticipated levels of profitability, growth, cost and synergy of the Company s recent acquisitions, the timely development and acceptance of new products, the impact of competitive pricing, the ability to obtain necessary regulatory approvals, and the impact of general business and global economic conditions. These and other factors could adversely affect the outcome and financial effects of the plans and events described herein. Neither the Company, nor any of its respective agents, employees or advisors intend or have any duty or obligation to supplement, amend, update or revise any of the forward-looking statements contained in this presentation. The information and opinions contained in this document are provided as at the date of this presentation and are subject to change without notice. This document has not been approved by any competent regulatory or supervisory authority. 2

3 3 Critical Raw Materials AMG s activities 1 H Hydrogen Li Lithium Na Sodium K Potassium Rb Rubidium Cs Caesium Fr Francium Ra Radium Be Beryllium Ca Calcium Sr Strontium Ba Barium Y Yitrium Sc Scandium Ti Titanium Zr Zirconium Hf Hafnium Rf Rutherfordlium V Vanadium Nb Niobium Ta Tantalum Db Dubnium Cr Chromium Mo Molybdenum W Tungsten Sg Seaborgium Mn Manganese Tc Technetium Re Rhenium Bh Bohrium Fe Iron Ru Ruthenium Os Osmium Hs Hassium Co Cobalt Rh Rhodium Ir Iridium Mt Meitnerium Ni Nickel Pd Palladium Pt Platinum Ds Darmstadtium Cu Copper Ag Silver Au Gold Rg Roentgenium Zn Zinc Cd Cadmium Hg Mercury Uum Ununbium B Boron Al Aluminum Ga Gallium In Indium Tl Thallium Uut Ununtrium C Carbon Si Silicon Ge Germanium Sn Tin Pb Lead Uuq Ununquadium N Nitrogen P Phosphorus As Arsenic Sb Antimony Bi Bismuth Uup Ununpentium O Oxygen S Sulfur Se Selenium Te Tellurium Po Polonium Uuh Ununhexium F Fluorine Cl Chlorine Br Bromine I Iodine At Astatine He Helium Ne Neon Ar Argon Kr Krypton Xe Xenon Rn Radon La Lanthanum Ac Actinium Th Thorium Ce Cerium Pr Praseodymium Pa Protactinium Nd Neodymium U Uranium Pm Promethium Np Neptunium Sm Samarium Pu Plutonium Eu Europium Am Americium Gd Gadolinium Cm Curium Tb Terbium Bk Berkelium Dy Dysprosium Cf Californium Ho Holmium Es Einsteinium Er Erbium Fm Fermium Tm Thallium Md Mendelevium Yb Ytterbium No Nobelium Lu Lutetium Lr Lawrencium Mg Magnesium 24.3

4 Summary CIF overview Orebodies, estimated reserves and new potential Current production and future expansion Greater recovery of Tantalum from tailings Current and future business model New product development Final remarks 4

5 CIF Overview Founded in 1912 in Rio de Janeiro, Brazil Bought by Metallurg Group in 1979 (now AMG) Split into 2 entities: CIF Mineração S.A. - Mine located in Nazareno LSM Brasil S.A. Metallurgical & Chemical plant located in São João del Rei 4.2MW hydropower plant (meets 100% of demand) 135 employees at Mibra mine and 220 in São João del Rei AMG Advanced Metallurgical Group N.V. (Netherlands) AMG Brazilian Holdings BV (Netherlands) 5 CIF Mineração S.A. Ta Concentrate Feldspar Tin LSM Brasil S.A. Ta and Nb Oxides Aluminum master alloys Aluminium grain refiners Boron based fluoride salts

6 Tantalum (Ta) and Niobium (Nb) Activities CIF extracts Ta and Nb containing ores from the Mibra mine and either converts them into high-purity Ta and Nb oxides via chemical processes or sells them as concentrate Mibra mine, Nazareno Acid leaching & solvent extraction at chemical plant 6 Production plant, São João del Rei

7 Mibra Mine The mine has several orebodies with Orebody A being the main source of pegmatite (6.32 million tons) Further exploration work on Orebody A, B & C as recommended by SRK Activities at the mine include surface mining and gravimetric, electrostatic, and electromagnetic concentration 7 Mine drilling, excavating, & loading Metal Orebody A Grade (g/t) Metal Content (million lbs) Ta 2 O Nb 2 O Sn The Mibra mine has an estimated additional 11.1 million lbs of Ta 2 O 5 in other orebodies

8 Orebody A Mineralogy Albite (25 30%) Microcline (15 20%) Quartz (20-30%) Spodumene (10 15%) Zinnwaldite (8 10%) Certification SRK certification through the National Instrument (NI) technical report as issued on 30 th July 2008 Indicated mineral resources for CIF Volta Grande deposit A pegmatite of 6.32 million tons at 375 ppm Ta 2 O 5, 92 ppm Nb 2 O 5, and 283 ppm Sn Resource Utilization 450 mt Ta Concentrate (~30% Ta content) 240,000 mt Feldspar Mix CKS ,000 mt/yr of Processed Pegmatite 36,000 mt Lithium Concentrate 40,000 mt Feldspar By-Product CKS ,000 mt Albite 8 164,000 mt Lower grade ceramic market

9 Other Orebodies The Mibra mine has several other hard and soft pegmatite orebodies Orebodies B and C-south 11.6 million tons of hard orebodies New drilling and surveys lead to existing resources much higher than previously expected Completion of this work is expected by Q million lbs Ta 2 O 5 contained in ore Orebody A Orebody B Kaolinized or Soft Pegmatite 7.6 million tons of soft orebodies Mineralogy: Quartz (50 60%) Kaolinite (35 40%) Kaolin resources estimated at million tons White Mica (1 5 %) and Iron Oxides (0 2%) 2.5 million lbs Ta 2 O 5 contained in ore Orebody C 9

10 New Exploration Work 2011 Orebodies A, B and C 5,933.3 meters Orebodies A, B and C 11,283.5 m

11 Resource Status and Mine Life Resource Status Orebody Volume (million mt) Grade (g Ta 2 O 5 /mt) Ta 2 O 5 Content (million lbs) Indicated Orebody A Estimated * New Drilling Underway Estimated New Drilling Underway Other Hard Orebodies Soft Orebodies Total Hard Orebodies Resources Reserves (million mt) Orebody A 6.32 Others (Balance of A, B, & C-south) * Total Resources Annual Pegmatite Consumption Mine Life 1.06 million mt 17 years Subject to further exploration work, which will be concluded by Q We expect to confirm reserves for 17 years at increased production capacity (excluding soft orebodies) 11

12 Mibra Production Klbs 000's MT Hard Pegmatite e 2012e Soft Pegmatite 2013e 2014e Ta₂O₅ Growth based on: Upgrading & expanding old plant (plant 2) Greater recovery of Ta₂O₅ from tailing fines Mine infrastructure development Debottlenecking existing plant (plant 1) 12 Further development of soft orebodies Note: 2013 & 2014 production expansion subject to market conditions and AMG board approval

13 Gravimetric Plants Expansion & Debottlenecking Plant 1 Processing 600,000mt pa hard pegmatite Expanding to 700,000mt pa by end of 2011 Modifying to handle soft pegmatite by 2013 Plant 2 Processing 180,000mt pa of pegmatite Expanding to 360,000mt pa by December 2011 Will process hard and soft pegmatite 13

14 Ta₂O₅ Mass Balance In Gravimetric Process 79% 21% 100% Line 1 Line 2 5% 42% Coarse Grades 22% 64% Fines Ultrafine Rejects 26% 18% 44% +53µm 32% 4% 36% -53µm + 16% 4% Total Concentration 20% = 56% 14

15 Ta₂O₅ Contained In Tailing Fines Mesh # Weight gm % Retained Ta₂O₅ Grade Ta₂O₅ Content % Distribution < , Spirals & shaking table are less efficient at recovering Ta₂O₅ from fines 15

16 Recovery Of Ta₂O₅ From Tailing Fines Tantalite Plant s Tailings (Thickener) Clean Water Tailings (Flotation) Rougher Cleaner Tailings 16 Final Concentrate Tantalum Concentrate Centrifugal concentrator Flotation Column

17 Further Development Of The Process Flow Orebody A (Pegmatite) Microlite & Cassiterite Tin Smelting (toll process) Final Products Tin Markets Tin Ta slag Extraction, Crushing & Grinding Gravimetric Concentration Magnetic Separation Ta Ores Blending Ta Concentrate Capacitors Option Pond Tailings Processing Chemical Processing Ta205 Nb205 Capacitors Superalloys Soft Orebodies (Pegmatite) Kaolin Ceramics Magnetic Separation Mixed Feldspar Ceramics Mine Chemical Plant Outsourced Feldspar Raw Material Flotation Lithium Concentrate Albite Lithium Carbonate Ceramics Batteries 17 Development phase Li Concentrate Ceramic Grade Ceramics

18 Ceramic Minerals Production Mibra is the largest feldspar raw material supplier to the Brazilian porcelain (chinaware) industry Quality control of feldspar in laboratory E Ceramic minerals production ( 000 mt/yr)

19 Potential Projects Kaolin (Soft Orebodies) Kaolin reserves estimated at 3 Million Tonnes Pilot plant installed & operating during H Development work with established Kaolin producer Potential production Phase 1: Production: Kaolin 36,000 mt pa Mibra Mine soft orebody Tantalite 30 klb Ta₂O₅ pa Potential production Phase 2: Production: Kaolin 60,000 mt pa Tantalite 50 klb Ta₂O₅ pa 19 Note: Subject to market conditions and AMG board approval

20 Potential Projects Lithium Concentrate Pilot plant installed and operating since Q Targeting production of Ceramic and Chemical grade Li concentrates R&D project to produce Lithium carbonate from flotation by-product Working with US & European engineering companies Lithium concentrate Process design expected by the end of 2011 Engineering design expected by the end of 2012 Targeting brine route production costs Potential capacity: Flotation cells Lithium Concentrate Albite Lithium Carbonate 36,000mt pa 120,000mt pa 2,400mt pa 20 Note: Subject to market conditions and AMG board approval Conditioning reagents

21 Mibra Mine Strategic Plan - Increased pegmatite processing - New Products Development: Spodumente, Albite, Kaolin - Increased Ta205 production to 400klbs - Infrastructure upgrade - Increased Ta₂O₅ production to 500klb pa - Spodumene, Albite & Kaolin production - Lithium Carbonate Production LSM Brasil Hydro power plant 2013/ Lbs/Ta2O ton/feldspar - SRK Certification - New Process Plant 2010/ Lbs/Ta2O ton/feldspar 2008/ Note: 2013 / 2015 expansion projects subject to market conditions and AMG board approval

22 Final Remarks Mibra Mine s business model will position it as reliable long term source of Tantalum for the industry, Multi product concept will ensure Mibra s competitiveness, financial and environmental sustainability, New ceramic products under development will consolidate and strengthen the business model, CIF targeting the following production levels for Ta₂O₅: klbs pa klbs pa klbs pa based on additional soft pegmatite production 22