Investor estor Presenta esentation tion April 2018 ASX: AUZ australianmines.com.au March 2018
Disclaimer This document is a visual aid accompanying a presentation by the Managing Director during Australian Mines’ international roadshow in April and May 2018. It is not intended to be read as a stand-alone document. It contains selected information, in abbreviated or summary form, and does not purport to be complete. This document should not be read without first reading Australian Mines Limited’s 2017 Annual Report and December 2017 Quarterly Activities and Cash Flow Reports, the Company's announcement dated 31 March 2017 titled Technical Report and 6 March 2018 announcement , which have previously been lodged with the Australian Securities Exchange and are available at www.australianmines.com.au. Australian Mines Limited has prepared this announcement based on information available to it at the time. No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness or correctness of the information, opinions and conclusions contained in this announcement. To the maximum extent permitted by law, none of Australian Mines Limited, its directors, employees or agents, advisors, nor any other person accepts any liability, including, without limitation, any liability arising from the fault or negligence on the part of any of them or any other person, for any loss arising from the use of this announcement or its contents or otherwise arising in connection with it. This announcement is not an offer, invitation, solicitation or other recommendation with respect to the subscription for, purchase or sale of any security, and neither this announcement nor anything in it shall form the basis of any contract or commitment whatsoever. This announcement may contain forward looking statements that are subject to risk factors associated with exploration, mining and production businesses. It is believed that the expectations represented in these statements are reasonable but they may be affected by a variety of variables and changes in underlying assumptions which could cause actual results or trends to differ materially, including but not limited to price fluctuations, actual demand, currency fluctuations, drilling and productions results, resource estimations, loss of market, industry competition, environmental risks, physical risks, legislative, fiscal and regulatory changes, economic and financial market conditions in various countries and regions, political risks, project delay or advancement, approvals and cost estimates . The Sconi Project is at Feasibility Study phase and though reasonable care has been taken to ensure that the facts are accurate and/or that the opinions expressed are fair and reasonable, no reliance can be placed for any purpose whatsoever on the information contained in this document or on its completeness. Actual results and developments of projects and the market development may differ materially from those expressed or implied by these forward looking statements depending on a variety of factors. A key conclusion of the Feasibility Study, which is to be based on forward looking statements, is that the Sconi Project is considered to have positive economic potential. This presentation does not contain any new data, results or information, with all references clearly stated in Appendix 1 of this presentation. Any exploration and/or resource data, or statements referenced within this presentation have previously been lodged by Australian Mines Limited with the Australian Securities Exchange (ASX) via the company’s announcements dated 10 October 2016, 14 October 2016, 27 October 2016, 15 Novembe r 2016, 24 January 2017, 21 February 2017, 15 March 2017, 23 March 2017, 31 March 2017, 15 May 2017, 26 June 2017, 11 August 2017, 6 September 2017, 28 September 2017, 29 September 2017, 3 October 2017, 31 October 2017, 6 November 2017, 31 January 2018, 19 February 2018 and 6 March 2018. April 2018 www.australianmines.com.au 2
Australian Mines – at a glance • Rapidly growing resource and battery chemical company • Successfully operated an underground nickel mine in Western Australia • Expanded operations into battery metals in 2016 • The only exploration company in Australia for Cobalt with a 100% off-take agreement secured o Binding agreement with leading global industrial conglomerate, Korean-based SK Innovation 1 • Investing to build a state-of-the-art battery metals processing plant in Queensland, Australia Share Price Performance (A$) 100% owner of multiple battery metals projects 2 ASX Ticker: AUZ / OTCQB Ticker: AMSLF Sconi is the most Market Capitalisation (as at 12 April 2018): A$243 million 0.16 advanced battery metal project of its type in 0.14 Australia 0.12 0.10 0.08 0.06 0.04 0.02 0.00 April 2018 www.australianmines.com.au 3
Development timeline Sconi: Q2 2019 Construction of processing plant Q1 2019 Sconi: advances Construction of processing plant Sconi: Scandium off-take commences Project financing finalised Q4 2018 secured Mineral Resource Flemington: updated Regional Pre-Feasibility Sconi: exploration Study commences Feasibility Study results announced Flemington: Q2 - Q3 2018 delivered Cobalt-Nickel Cobalt-nickel Mineral Resource off-take agreement Flemington: updated Flemington: signed Resource drilling Resource results released expansion drilling Thackaringa: Thackaringa: Initial Mineral Thackaringa: Thackaringa: Resource definition Follow-up drill Resource Estimate Maiden drill drill program program announced program underway commenced April 2018 www.australianmines.com.au 4
Investment Highlights • Demand for electric vehicles (EVs) expected to increase demand for critical battery metals • Favourable market fundamentals Ethical concerns mean that manufacturers are seeking suppliers with an auditable supply chain in order to meet the increasing scrutiny of consumers (ex-DRC in particular) • 100% interest in three battery metals projects 3 : Sconi (Cobalt-Nickel-Scandium), Advanced project pipeline with Flemington (Cobalt-Nickel-Scandium), Thackaringa (Cobalt) development-ready flagship project • The Sconi Project is the most advanced battery metal project of its type in Australia • Demonstration plant is presently producing battery metal samples using a conventional, industry standard processing flow chart and construction design (significantly de-risks the Processing plant with proven project from both a technical and financing perspective) technology and design • Value-add from producing cobalt sulphate and nickel sulphate required by battery manufacturers as opposed to raw materials or concentrates • Executed a binding 100% off-take agreement for Sconi with Korean-based SK Innovation, Off-take agreement already secured part of one of the world’s largest industrial conglomerates • with a global battery manufacturer The only exploration company in Australia for Cobalt with a 100% off-take agreement secured • Sconi and Flemington benefit from the potential upside from scandium, for potential use in high strength aluminum alloys Potential upside from scandium • Established an R&D Division researching the application of MIG fighter-jet superalloy for the electric vehicle sector • Experienced leadership team with expertise across minerals processing, corporate fundraising and the development of large scale nickel-cobalt laterite projects Experienced management team • Key appointments dedicated to managing feasibility studies and to support the company as it manages its transition to project developer April 2018 www.australianmines.com.au 5
Favourable market fundamentals • Electric vehicles to account for 30% of all new car sales across Europe by 2025 4 • Each year, there will be 1 million more UK-registered electric vehicles cruising the English countryside, for example • Globally, electric vehicles will account for 14% of all new car sales by 2025 4 • That’s 14 million new electric vehicles joining the world’s roads each and every year Forecasted electric vehicle Sales by Region (as % of total new car sales) 4 35% 30% 25% 20% 15% 10% 5% 0% 2015 2016 2017 2018E 2019E 2020E 2021E 2022E 2023E 2024E 2025E Europe US China Japan RoW Source: UBS April 2018 www.australianmines.com.au 6
Cobalt and nickel to drive the electric vehicle industry • Electric vehicles are powered by lithium-ion batteries • Composition of lithium-ion batteries may vary slightly between vehicle manufacturers • Typical electric vehicle batteries comprise nickel and cobalt plus manganese / aluminum • Approx. 140 kilograms of nickel, cobalt and manganese / aluminum in total is present within a typical electric vehicle battery pack Electric vehicle batteries being manufactured at SK Innovation’s facility • Current NMC batteries used for electrical grid storage systems (e.g. Tesla Powerwall) Despite what its name may suggest, lithium-ion batteries usually comprise only a modest, but nonetheless important, amount of lithium (usually less typically have a 1-1-1 composition; being than 10% to the total metal in a battery) approximately 33% cobalt/nickel/manganese 5 Nickel and cobalt tend to account for the majority of the metal used in most lithium-ion batteries regardless of whether the battery is being manufactured • Australian Mines’ off-take for cobalt and for the electric vehicle or energy storage sectors. nickel from Sconi with global battery manufacturer, SK Innovation, indicates that battery composition is not expected to change much for at least the next decade April 2018 www.australianmines.com.au 7
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