Diggers & Dealers Mining Forum August 2019
Investment Rationale Revenue Earning Long Life Mine Generating Cash Strongly Growing Market Enduring Geographical Simple Project – and jurisdictional Low CAPEX & OPEX Competitive Advantage 2 | ASX : MMI | August 2019
Share Price & Corporate Structure Capital Structure Share Price Performance Share Price Performance $0.35 Price ($) Volume (m) Share Price (31 July 2019) A$0.135 $0.30 Shares on Issue 1,383.4M $0.25 Market Capitalisation A$187.0M $0.20 Options Unlisted 30.1M $0.15 Cash and Receivables (30-June-2019) A$29.5M $0.10 Debt Facilities A$42.1M $0.05 Enterprise Value A$199.6M Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 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 Dec-18 Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19 Jul-19 Share Register Board of Directors Greenstone 19.8% Independent Chairman Stephen Everett Balanced Property 42.5% Managing Director & Chief Executive Officer Simon Finnis BlackRock 15.9% Non-Executive Director Mark Sawyer DADI Independent Non-Executive Director Philip Hennessy Other Institutions 10.2% 6.0% Independent Non-Executive Director Fiona Murdoch Other Shareholders 5.6% 3 | ASX : MMI | August 2019
Bauxite is the Primary Ore of Aluminium Key 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 4 | ASX : MMI | August 2019
China vs ROW Primary Aluminium Capacity 2000 – 2018 (Mtpa) Source: IAI, CM Analysis Source: CM Group 100% ROW Al Capacity(MT) World Total Al Capacity(MT) China's Al Capacity(MT) 90% Percentage of China Al Capacity in World Total 86% 84% 81% 80% 76% 74% 72% 79.4 70% 75.3 70.4 69% 67.0 62.6 63% 56.5 60% 62% 60% 59% 60% 58% 47.9 56% 44.9 41.7 56% 52% 38.7 53% 55% 35.3 30.1 50% 48% 44.2 45% 24.6 41.8 44% 47% 44% 22.4 42% 20.0 37.5 40% 41% 40% 38% 40% 37% 51.6 35.3 33.5 16.8 49.7 15.4 45.9 31.2 31% 30% 11.7 28% 28.6 26% 9.7 24% 27.2 8.8 25.8 7.4 20% 19% 16% 5.4 14% 4.2 3.5 10% 0% 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 5 | ASX : MMI | August 2019
China Demand Outlook Remains Strong Source: CM Group Source: CMGroup 6 | ASX : MMI | August 2019
China’s 2018 Bauxite Imports ▪ Guinea now largest supplier to China. But 98% of exports are from the Chinese- controlled SMB-WAP ▪ Australia's supply 0.5% Montenegro 0.1% Turkey is steadily growing, 82.6Mt up 4.1Mt (16%) in Guinea 2018 to 29.6Mt 46% 12% Jamaica 0.8% India ▪ 0.7% Vietnam Indonesia & Malaysia 0.7% Ghana 0.7% Malaysia now less relevant 2% Brazil` 9% 2% Solomon Is Indonesia ▪ Ocean freight on an upward trend 36% Australia ▪ 2019 Bauxite imports estimated at 95.0Mt Source: China Customs, CM 7 | ASX : MMI | August 2019
Alumina Producers China Source: CMGroup Main Bauxite Consuming Provinces 1. Shandong (65MT) 2. Shanxi (49MT) 3. Henan (27MT) 2 1 4. Guangxi (18MT) 3 5. Guizhou (10MT) Liaoning Province and Inner Mongolia 5 Emerging as major new players, with several projects planned or under construction 4 Source: CM Group 8 | ASX : MMI | August 2019
Bauxite Market & Price Outlook Source: CM GROUP China imports continue to increase with total 2018 imports exceeding 82M WMT ◼ Bauxite prices in an upward trend with CBIX bauxite index currently US$52.60 DMT (dry metric tonne) ◼ Strong demand for Metro’s bauxite from Chinese inland Refineries as domestic bauxite supply has been hindered by resource ◼ depletion, recent mine closures and environmental audits CBIX Bauxite Index – Last 12 Months China Bauxite Consumption 250 CBIX Bauxite Index – Last 12 Months 56.0 China Bauxite Consumption (MT) 200 54.0 52.0 150 50.0 Source: CM Group 48.0 100 46.0 44.0 50 42.0 40.0 0 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19Mar-19 Apr-19 May-19 Jun-19 2015A 2016A 2017A 2018A 2019F 2020F 2021F 2022F 2023F 2024F 2025F Domestic Source Imported Source 9 | ASX : MMI | August 2019
Bauxite Hills Project DSO - virtually no overburden, no blasting, no To ensure quality there are sophisticated processes ◼ ◼ engineering or pit design required, no processing around mine planning and quality control. Clear vegetation & Return overburden & replace Haul ore 5 – 22km to stockpile remove overburden topsoil - then re-vegetate and barge loading Overburden (~0.5m) DSO Bauxite Horizon (1.5-3m) Ironstone Mottled Zone Tranship ore down Skardon River Load bauxite on bulk carrier for transport to China 10 | ASX : MMI | August 2019
Metro’s Road to Production! Gained control of Financed and constructed July 2019 – 18.8% increase Bauxite Hills early 2015 all in 2017 – CAPEX A$37M Dec 2018 – 3.5Mt Expansion in Reserve Takeover of Gulf – doubled April 2018 – 1st Production July 2019 – 3Mt Mined Resource & Reserve – Dec 2016 11 | ASX : MMI | August 2019
2018 2H Results 2018 2H Operating Costs & Realised Prices (Price Received /Operating Cost $60.7 $57.0 $53.3 $52.3 $49.7 $48.1 $46.4 $40.0 A$/WMT) $25.0 $23.8 $22.7 Revenue $15.7 $93.2M $24.7 $23.7 $24.2 $24.3 Sept Qtr Dec Qtr 6-months BFS Estimate to Dec-18 (Year 1) Site Costs Non-Site Costs Avg. Price Received Mine 2018FY Production and Shipped Bauxite Bauxite Tonnes (WMT) 2018 Production EBITDA Mined Shipped Guidance Achieved 743 816 $13.1 2047 2,037 859 822 445 399 June Qtr Sept Qtr Dec Qtr Mined Shipped 12 | ASX : MMI | August 2019
2019 Expansion to 3.5Mt Capital Cost $6.8M Summary of Key Improvements ✓ Add Jaw Crusher to treat oversized material ✓ Increase the screening capacity at the Port ✓ Increase the current haulage fleet ✓ Supplement the marine fleet and infrastructure 2019 Production Expansion Bauxite Tonnes (WMT) 500 3,000 3,000 2,047 2018 2019 2019 Actual Expanded 13 | ASX : MMI | August 2019
2019 June Qtr Results 2019 June Qtr Operating Costs & Realised Prices $70.00 $60.21 $58.12 $57.26 $54.86 $60.00 $ 58.56 $ 46.41 $50.00 $23.05 $44.70 $ 42.90 A$/WMT $40.00 $22.94 $22.76 $23.03 Revenue $30.00 $20.00 $35.51 $23.47 $21.94 $10.00 $19.87 $48.4M $- April May June June Qtr Site Costs Non-Site Costs Average Sales Price Received * Note: Non-Site Costs refers to ocean freight and royalties 2019 YTD Production and Shipped Bauxite Mine 443 463 Bauxite Tones (WMT) EBITDA July $9.1M 427 1323 374 1299 ▪ ▪ Mined Shipped June 311 329 151 124 May April YTD 14 | ASX : MMI | August 2019
Future Growth Reserve up Depletion by mining ▪ 17.3Mt (18.8%) Conversion of existing resources ▪ to 109.5Mt (wet) ▪ Moisture assumption adjustment based on operational experience Depletion by mining ▪ Resource down Adjustment to dry bulk density 6.4Mt (4.6%) to ▪ 138.2Mt (dry) Measured category up 42.8% ▪ Definitive Feasibility Study largely complete ▪ Stage 2 Further detailed work on the floating ship-loader actioned ▪ Expansion DFS Expansion sets mine up for next 15 years & vital to take time for informed decision ▪ update Results within August ▪ Strong Stage 2 Production Expansion Extended Mine Life Stage 1 Stage 2* Steady State Production Post Stage 2 Expansion Based on Current Mine Life 6 Bauxite Tonnes Million (WMT) 5 2019 Expanded 4 Production 3 2 1 0 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 15 | ASX : MMI | August 2019 * Subject to Board Approval
Positive Community Relationships ◼ Relationship continues to grow and flourish ◼ Metro a key part of Northern Cape York Community ◼ Current Indigenous employment is 39% (target 20%) ◼ Business opportunities for indigenous groups being assessed with one already in place 16 | ASX : MMI | August 2019
Investment Rationale Revenue Earning Long Life Mine Generating Cash Strongly Growing Market Enduring Geographical & Simple Project – jurisdictional competitive Low CAPEX & OPEX advantage 17 | ASX : MMI | August 2019
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