Scoping Study Highlights Overview
• 100% owned project located in one of the best mining jurisdictions in the world
• Adjustable production rates, low capital, high margin, long mine life
• Project is well understood and development pathways relatively simple
• Consultants to the Scoping Study include NovoPro Project Development and Management, internationally recognised experts in Sulphate of Potash process modelling and plant design Scale
• Stage 1 production rate of 150,000tpa of premium-priced sulphate of potash (years 1 – 5)
• Stage 2 production rate of 300,000tpa of premium-priced sulphate of potash (years 6 – 20)
• Minor portion of SOP produced through the conversion of imported MOP to SOP using the natural excess sulphate in the brine1
• Scoping Study assumes expansion to Stage 2 occurs in Year 5 and the majority of Stage 2 capital expenditure is funded from internal cash flow
• Life of Mine (LOM) is 20 years (inc. Stage 1 & Stage 2) – upside to LOM through development option selected and continued exploration Robust financial model2
• Approximate pre-tax NPV at 10% discount rate A$500m/US$386m
• Approximate pre-tax IRR 33.0%
• LOM average annual operating pre-tax cashflow3 A$118m/US$81m
• Stage 1 average annual operating pre-tax cashflow3 A$61m/US$47m
• Stage 2 average annual operating pre-tax cashflow3 A$137m/US$106m
• LOM development capital intensity4 A$1,126/US$868 t SOP
• LOM revenue to cost ratio 2.32
Capital expenditure
• Pre-production capital expenditure (Stage 1) A$175m/US$135m o which includes a contingency of A$24m/US$19m
• Stage 1 payback5 2.9 years
• Stage 2 (optional) capital expenditure A$163m/US$125m o which includes a contingency of A$23m/US$18m o modelling indicates majority funded through cashflow
• Stage 2 payback 1.7 years
JORC Resource7
•Upgraded JORC 2012 Mineral Resource Estimate comprising 14.7m tonnes of SOP, including 12.7mt in the Indicated category
•Significant upside: the modelled mine life extracts only 34% of the Indicated Resource in the Western High Grade Zone and 33% of the Inferred Resource in the Southern Zone, providing opportunities to extend LOM with inclusion of the Eastern Zone (4.6mt SOP Indicated) Next steps
• Brief Project optimisation studies, site investigations and test-work
• Significant upside and opportunities for the Project’s development to be explored
• Feasibility Study planned to commence in Q2 2017
• Building pilot harvest ponds
• Progressing Mining Licence applications and permitting and approvals
• Cash balance of A$4.3 million (31 Dec 2016) - APC well-funded for the next phase of work
APC Price at posting:
13.0¢ Sentiment: Buy Disclosure: Held
(20min delay)
