GROWING THE MARKET OUTSIDE CHINA Argus US Specialty Metals - PowerPoint PPT Presentation

LYNAS: GROWING THE MARKET OUTSIDE CHINA Argus US Specialty Metals conference 7 June, 2019 1

Disclaimer This Presentation has been prepared by Lynas Corporation Limited (ABN 27 009 066 648) (Lynas or financial position and performance are also forward-looking statements. Forward-looking statements, the Company) This Presentation contains summary information about Lynas and its subsidiaries opinions and estimates provided in this Presentation are based on assumptions and contingencies (Lynas Group) and their activities current as at the date of this Presentation. The information in this which are subject to change without notice, as are statements about market and industry trends, Presentation is of general background and does not purport to be complete or to comprise all the which are based on interpretations of current market conditions. Such forward-looking statements information that a shareholder or potential investor in Lynas may require in order to determine including projections, guidance on future earnings and estimates are provided as a general guide whether to deal in Lynas shares. It should be read in conjunction with Lynas Group’s other periodic only and should not be relied upon as an indication or guarantee of future performance. There can and continuous disclosure announcements lodged with the Australian Securities Exchange (ASX), be no assurance that actual outcomes will not differ materially from these forward-looking which are available at www.asx.com.au. This document is not a prospectus or a product disclosure statements. statement under the Corporations Act (Cth) 2001 (Corporations Act) and has not been lodged with Investment Risk and other risks ASIC. An investment in Lynas shares is subject to investment and other known and unknown risks, some of Not investment or financial product advice which are beyond the control of Lynas Group, including risk factors associated with the industry in This Presentation is for information purposes only and is not financial product or investment advice which Lynas Group operates, such as: nature of mineral exploration and production; mineral and ore or a recommendation to acquire Lynas shares and has been prepared without taking into account reserves; operations risks; project development risks; market price and demand risk; credit and the objectives, financial situation or needs of individuals. Before making an investment decision, market risks; regulatory, political and environmental risks; tax and other risks generally relating to prospective investors should consider the appropriateness of the information having regard to their equity investment. own objectives, financial situation and needs and seek financial, legal and taxation advice Not an offer appropriate to their jurisdiction. Lynas is not licensed to provide financial product advice in respect of Lynas shares. Cooling off rights do not apply to the acquisition of Lynas shares. This Presentation does not constitute an offer to sell, or the solicitation of an offer to buy, any securities in the United States. Any securities described in this Presentation have not been, and will Financial data not be, registered under the U.S. Securities Act of 1933 (the “Securities Act”). All dollar values are in Australian dollars (A$) unless stated otherwise and financial data is presented Disclaimer within the financial year end of 30 June 2018 unless stated otherwise. Any pro forma historical financial information included in this Presentation does not purport to be in compliance with Article 11 Lynas and its affiliates, officers, employees, agents and advisers have not authorised, permitted or of Regulation S-X of the rules and regulations of the US Securities and Exchange Commission. caused the issue, dispatch or provision of this Presentation to any third party. Lynas, its related bodies corporate and their respective affiliates, officers, employees, agents and advisers to the Future performance maximum extent permitted by law, expressly disclaim all liabilities in respect of any expenses, Past performance information given in this Presentation is given for illustrative purposes only and losses, damages or costs incurred by you as a result of the information in this Presentation being should not be relied upon as (and is not) an indication of future performance. This Presentation inaccurate or due to information being omitted from this Presentation, whether by way of negligence contains certain “forward - looking statements”. The words “expect”, “should”, “could”, “may”, “will, or otherwise, and make no representation or warranty, express or implied, as to the fairness, “predict”, “plan”, “scenario”, “forecasts”, “anticipates” “estimates” and other similar expressions are currency, accuracy, reliability or completeness of information. The information in this Presentation intended to identify forward-looking statements. Indications of, and guidance on, future earnings and remains subject to change without notice. 2

Our long journey to deliver value LYNAS ENTERPRISE VALUE • 2011: The investment world discovers Rare Earths 4000 3500 • 2012: Lynas construction slower than forecast 3000 2500 • AUD millions 2013-2016: High debt, low cash • US $425m debt 2000 Debt • A $4.1m operating cash flow 1500 Market Cap • 2017: Lynas comes of age 1000 • Producing at nameplate • Convertible bond converts 500 • 2018: Lynas NEXT growth project • US $165m debt 0 • A $118.5m operating cash flow 3

Our product offering today Product Capacity REO Market tonnes/annum NdPr+Nd+Pr Oxide & Metal 7,200 NdPr 5,400 Magnets Nd 1,500 Magnets, Catalysts Pr 300 Catalysts, Pigments, Magnets SEG Oxide 1200 HRE Separation Ce-La Carbonate, Oxide, Metal, Compounds 16,000 Ce Carbonate, Oxide Catalysis, Glass La Oxide FCC, Ferrite, NiMH LaCe Carbonate, Oxide, Metal Polishing, NiMH, Alloy RE compounds Customized applications 4

Our track record underpins our confidence in the future Sales Revenue (A$'m) Production Volume REOt 220 12,000 10,000 170 8,000 6,000 120 4,000 70 2,000 0 20 H1 15 H2 15 H1 16 H2 16 H1 17 H2 17 H1 18 H2 18 H1 19 H1 15 H2 15 H1 16 H2 16 H1 17 H2 17 H1 18 H2 18 H1 19 NdPr (RTS) Others (RTS) Cash Flow (A$'m) EBITDA (A$m) 100 NPAT (A$m) (excl. AELB and Interest) 100 80 60 80 40 60 60 20 40 40 0 20 -20 20 0 -40 0 -20 -60 -40 -80 -20 -100 -60 -40 -120 -80 H1 15 H2 15 H1 16 H2 16 H1 17 H2 17 H1 18 H2 18 H1 19 H1 15 H2 15 H1 16 H2 16 H1 17 H2 17 H1 18 H2 18 H1 19 H1 15H2 15H1 16H2 16H1 17H2 17H1 18H2 18H1 19 Net investing CF Net operating CF 5

Malaysia regulatory update Operating License renewal • Full Operating Stage License (FOSL) due for renewal on 2 September 2019 • On 30 May 2019, the Malaysian • License renewal application progressing to a Prime Minister acknowledged the “normal” timetable importance of the continued • AELB Audit for renewal of the FOSL completed operation of Lynas in Malaysia April 2019 - “Very Satisfactory” rating • Lynas 2025 allows us to meet the Residue Management new conditions proposed by the • Malaysian government’s 2018 Executive Review Malaysian Prime Minister Committee found Lynas residues are managed “in a proper manner” • Ongoing discussions with the Malaysian government to finalize WLP management requirements 6

Lynas 2025: Growing with the market • Efficient capacity expansion leveraging Lynas’ unique assets A larger business to meet • 10,500 tpa NdPr products forecast demand growth • Diversified Industrial footprint Upstream processing close to the resource • with processing facilities in Downstream processing close to our customers; Malaysia and US • optimal locations Relocation of C&L to WA to satisfy Malaysian requirements Supplier of choice to non • Selected separated Heavy Rare Earth products Chinese customers with a fit for • Value added Cerium market product portfolio • A step change in production • Enhanced earnings Improved portfolio pricing • Continued flow sheet and cost efficiencies • Self-funded with support of JARE • Return on investment of planned growth initiatives is expected to $500m Capital plan materially exceed WACC • Enhancing long term shareholder value 7

Our track record underpins our confidence in the future Malaysia A dynamic operation in Gebeng with increased investment in downstream processing Vietnam-Thailand Vietnam-Thailand Metal tollers. Metal Tollers United States Western Australia Exciting market opportunity with An expanded WA operation a skilled US based partner. 8

Developing our sources of unique competitive advantage Inhouse Mt Weld Market position Will to win Proven Operations • A true Tier 1 • World’s second Intellectual • • Corporate culture Established Resource largest Rare Earths Property operating assets founded on our • producer Continuing • • Strong capital and capable and Technical, • Only Rare Earths exploration and operating cost resilient people Engineering and miner and processor development to • Focused on culture Processing IP outside China maintain a 25+ year building long term positions Lynas as • Established long- Reserve at new shareholder value the Rare Earths term, trusted rates Centre of relationships built Excellence outside with our key China customers 9

Our unique Tier 1 Rare Earth deposit 10

Mt Weld is favoured by grade, NdPr content, total REO and life of mine 11 11