Building a Strategic Position in the Fluorspar Sector Minerals plc Company... · •Founder Dragon Mining Ltd, ... Industrial Minerals Magazine, Roskill, CRU, UN, USGS, CCM, Company

Building a Strategic Position

in the Fluorspar Sector

Company Presentation

AGM February 19th 2014 1

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Notwithstanding the aforesaid, nothing in this paragraph shall exclude liability for any representation or warranty made fraudulently. 8 January 2013

2

Senior Management

• Geologist

• Company Founder, 26 years in public mineral company management

• Founder Dragon Mining Ltd, Archaean Gold NL & Sunrise Resources plc

1. Patrick Cheetham

Executive Chairman

• Chartered Engineer

• 20+ years experience in managing and developing mining projects worldwide for Derwent Mining, Lafarge, Hargreaves (GB) Ltd, Marshalls plc & CFE

2. Richard Clemmey

Managing Director

• Accountant

• Formerly Finance Director, Mwana Africa plc, Ridge Mining & Reunion Mining

3. Donald McAlister

Non-Executive Director

• Geologist

• Former CEO, Exploration & Development, Billiton Plc & Chairman ENK plc

• Director Consolidated Mines and Investments Ltd

4. David Whitehead

Non-Executive Director

• Barrister-at-Law & Chartered Secretary

• Formerly Corporate Finance Director Kleinwort Benson

5. Colin Fitch LLM, FCIS

Company Secretary

4 5 1 2 3

3

Company Aims, Strategy and

Business Plan

The Opportunity

• Fluorspar is an essential raw material in the chemical, steel and aluminium industries and in a

growing number of high-tech green technologies and pharmaceutical applications

• Fluorspar has a growing economic and strategic importance; ranked the fourth most important

strategic mineral in the US; identified by the European Commission as one of fourteen critical

raw materials facing a supply shortage

Company’s Aim

• To become a reliable long-term and competitive

supplier of fluorspar to the world markets

• To add value to the Group’s mineral projects

through the discovery of mineral resources

Company Strategy

• To acquire and develop large fluorspar deposits:

located to established infrastructure and markets

in stable, democratic and mining friendly jurisdictions

EXPLORATION

MB Fluorspar Project

Nevada USA

FEASIBILITY & PLANNING

Lassedalen Fluorspar Project, Norway

Storuman Fluorspar Project, Sweden

DEVELOPMENT MINING

CLOSURE & REHABILITATION

4

Fluorspar Market

Global Fluorspar Demand

6.5Mt/year

Acid Grade/Acid-spar

58% - 3.8 Mt/year

Hydrogen Fluoride HF

40% - 2.6 Mt/yr

Fluorocarbons - 2.16 Mt/year

e.g. refrigerants

Fluoropolymers

e.g. lithium batteries

Fluorochemicals

e.g. Electronics, Thermoplastics, Medicine, Metallurgy, Water, Detergents and Glass Aluminium Fluoride

AlF3

18% - 1.2 Mt/year

Metallurgical Grade/Met-spar & Ceramic Grade

42% - 2.7 Mt/year

Flux in Steel Production, Cement, Enamels,

Cooking Utensils, Glass, Glass Fibre

The Fluorine Supply Chain

• Fluorspar is the commercial name for concentrates of the mineral Fluorite, CaF2

• Fluorite is the main industrial source of Fluorine, F

• Major western acid-spar consumers: DuPont, Honeywell, Solvay, Lanxess, Boliden, Fluorsid,

DDF

5 Source: Industrial Minerals Magazine, Roskill, CRU, UN, USGS, CCM, Company Data

0 1,000,000 2,000,000

ChinaEuropeMexico

South AfricaCIS

MongoliaKenya

NamibiaMorocco

ArgentinaIran

BrazilIndiaUSA

CanadaJapan

Acidspar Production and Demand by Region 2011 (t)

Est Demand

Production

0

100

200

300

400

500

600P

rice U

S$/t

Average Acid-Spar Prices 2000-2013

FOB China

CIF Rotterdam

Fluorspar Market Dynamics

0

500000

1000000

1500000

2000000

2500000

China Acidspar Export vs Internal Consumption 2005 - 2012 (t)

China InternalConsumption

China Export CaF2>97%

40% 14%

• China produces >50% of the worlds fluorspar

• The price of acid-spar has increased >3 fold

since 2000

• Chinese exports have declined substantially

since 2000

• China may become a net importer in the future

• USA, Canada and Europe – largest acid-spar

consumers outside of China

Source: Industrial Minerals Magazine, Roskill, CRU, UN, USGS, CCM, Company Data

6

Storuman Fluorspar Project

Excellent Location & Infrastructure

• Adjacent to the main E12 highway

• Storuman town and new bulk rail terminal – 25 km

• Road and rail linked to Umeå Port – 240 km

Lars Lind

Umeå

7


8m Glacial Till

Var. Shale

1m Transition unit

10m “Upper” quartzite horizon

2m Transition unit

10m “Lower” sandstone horizon

2m Cambrian Conglomerate

Proterozoic Granite Basement

Geology

• Horizontally bedded, replacement style mineralisation in “Upper” and “Lower” Zones

• Mineralisation up to 20m thick

NB: vertical scale x 4

Surface Topography

Pink Fluorspar Mineralisation in

the “Lower” Horizon Drill Core

8


Positive Scoping Study

• Completed by Scott Wilson

• Process flow sheet completed by Delta Minerals

• Robust economics

Base Case

Tonnage/grade in pit (non-

JORC) 18mt @12.3% Fluorspar

Strip ratio 2.2:1

Mining rate c. 1 million tpa

Fluorspar Price (CIF

Rotterdam) $US 357/tonne

Average Annual Production

Acid Grade Fluorspar 103,000 tpa

Mine Life 18 years

Initial Capital Cost (Capex) US$ 46 million

Pre-Tax NPV (8% coc) US$ 33 million

IRR (100% equity) 24%

Payback period < 3 years

• Mineral Resource increased post

Scoping Study

• Bulk rail terminal constructed post

Scoping Study

9


Medium Scale Global Producer

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

Pro

du

ctio

n (

t)

Storuman vs Leading Producers 2012

Production rate of 103,000tpa:

• Medium Scale Global Producer

• A Leading European Producer

• Resource base will support future expansion

10 Source: Industrial Minerals Magazine, Roskill, CRU, UN, USGS, CCM, Company Data


Drilling (2010) & JORC Mineral Resource Estimate (SRK 2011)

• 46 diamond core drill holes

• 28% increase in resource compared with Scoping Study

Classification Million Tonnes (Mt) Fluorspar (CaF2%)

Indicated 25 10.28

Inferred 2.7 9.57

Total 27.8 10.21

Drilling (2011)

• Potential step-change for

scale of mineralisation

• Waste:ore strip ratio reduced

• 2.2t:1t to 0.8t:1t

11

Mining and Processing

• Low waste : ore ratio and horizontal ore horizons with no fluorspar mineralisation in the

granite basement lends itself to cut and fill mining technique (progressive restoration)

• Processing method is common in the mining industry – not bespoke

Open pit mining – cut

and fill Crushing Grinding

Flotation – fluorspar

concentration Silica tailings

Fluorspar concentrate for shipping


12


2013 Milestones

• Critical two year Environmental Baseline Studies – completed

• Reindeer Husbandry Impact Analysis – completed

• Preliminary Feasibility Study (PFS) metallurgical testwork -

nearing completion

• Preparation of Exploitation (Mine) Permit application – partial

completion

2014 Target Milestones

• Preparation and submission of Exploitation (Mine) Permit

application – Q1/Q2

• Scoping study level evaluation for processing and mine planning

followed by the PFS completion – end 2014

• Preparation and submission of Environmental Permit

application – following Exploitation Permit approval

13


Nevada - Most Favourable Mining

Jurisdiction in the USA

• Located 14km SW of Eureka, Eureka County,

Nevada

• Trans-national road and rail links, rail 161 km

from the project location

• 780 km to port of San Francisco

• Road access to and over property

• Government land – no special status

• 84% of Eureka County population employed in

mining industry

14


2013 Milestones

• Independent Tonnage-Grade Estimate classified as an Exploration Target under JORC


Exploration Target (8% CaF2 cut-off) 85 to 105 9 to 11

Exploration Target (2% CaF2 cut-off) 395 to 615 5 to 7

• Phase 1 drilling programme

4 holes, 550 metres

Twin diamond and percussion drilling

Evaluate the most cost-effective technique

Completed September 2013

• Phase 2 drilling programme

22 percussion holes, 2670 metres

Define a JORC resource and potential mine-starter pit

Target potential higher grade zones

Test alternative site for mine-starter pit

Completed November 2013

15


2014 – Drilling Results to Date

• Phase 2 Drilling Results - Southern Area

Results received for 12 out of the 14

holes

Thick intersections of fluorspar

Open at depth and in all directions

Confirms potential for definition of a

substantial Mineral Resource

• Phase 2 Drilling Results - Central Area

Results received for 1 out of the 5 holes

Multiple thick intersections of fluorspar

Increasing grade down the hole

Hole 13TMBRC0026 ended in 14%

fluorspar @ 151m

16


2014 – Target Milestones

• Results for the balance 6 holes

• JORC Mineral Resource Estimate – Q1 2014

• Metallurgical testwork followed by Scoping Study – end 2014

17

Open Open

Lassedalen Fluorspar Project

Excellent Location & Infrastructure

• 500m from highway E134 & Railway

• 6km from famous silver mining town of Kongsberg

• 50km from Port of Drammen

• 80km SW of City of Oslo

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History and Geology

• Steeply dipping fluorspar vein system in 4 km long vein breccia zone

• Drilled by Norsk Hydro in the 1970’s – 28 diamond holes

• Proved vein over 2.7km strike length

• Open at depth and along strike

19


Milestones Achieved

• JORC Mineral Resource Estimate (SRK Consulting) – 2012

• Re-logged and sampled 3.5 km of drill core from 23 of the 28 diamond holes drilled in the

1970’s

• Scoping Study (Wardell Armstrong International) - 2012


Inferred 4 24.6

Base Case Extended Mine Case

Tonnage Mined (underground) 3.6mt @ 22.4% Fluorspar 4.5mt @22.4% Fluorspar

Mining rate 543,000 tpa 543,000 tpa

Fluorspar Price (CIF Rotterdam) $US 491/tonne $US 491/tonne

Average Annual Production

Acid Grade Fluorspar 100,000 tpa 100,000 tpa

Mine Life 6.6 years 8.25 years

Initial Capital Cost (Capex) US$ 78 million US$ 78 million

Pre-Tax NPV (10% coc) US$ 31.6 million US$ 52.2 million

IRR (100% equity) 20.20% 24.10%

20

Fluorspar Project Timetable

Fluorspar Projects - Indicative Schedule

Storuman 2014

Q1 Q2 Q3 Q4

Pre-Feasibility Study (PFS) Metallurgical Testwork Complete

Scoping Study evaluation followed by full Pre-Feasibility Study (PFS) Complete

Exploitation (Mining) Permit Submit

Environmental Permit Submit ?

Target production date - 2017

MB Project 2014

Q1 Q2 Q3 Q4

Phase 2 Drilling Results Complete

Maiden JORC Mineral Resource Estimate Complete

Metallurgical Testwork and Scoping Study Complete

Lassedalen 2014

Q1 Q2 Q3 Q4

PFS Drilling and JORC (indicated)

Project currently on hold - prioritise Storuman and MB Project

Note: All schedules are subject to change, funding and successful completion of each phase of work

21

Non-Core Projects

• Kaaresselkä - Kiekerömaa - Gold, Finland

Kaaresselkä licence renewal granted in March 2013

Re-evaluating historic exploration results

• Rosendal Tantalum Project, Finland

Evaluating production opportunities and how best to valorise the project

• Ghurayyah Tantalum–Niobium-Rare-Earth Project, Saudi Arabia

Re-issue of licence pending with Deputy Ministry for Mineral Resources in Saudi

Arabia.

Other Projects

22

Investment Case

BROKER RESEARCH - Price Targets

Cantor Fitzgerald Europe

16p per share 20 Aug 2013

VSA Capital 21p per share 13 Feb. 2013

Valuations based on Fluorspar peer group comparison

and deal metrics

• Broker research suggest shares are undervalued

• Tertiary Minerals plc is the only UK public traded

company offering an exciting exposure to looming

fluorspar market shortage

• Fluorspar market is going through a “paradigm

shift” – with China evolving from a large net

exporter to a potential net importer

• Scoping Study on the Storuman fluorspar project (Sweden) shows robust economics, highly

levered to rising fluorspar price

• Positive October 2011 drill results deliver step-change in expectations for ultimate size of

Storuman deposit. Working towards PFS and mine permits

• January 2012 JORC Resource Estimate at Lassedalen in Norway adds 1Mt fluorspar to 3Mt

Storuman resource - second European fluorspar project in pipeline

• 2012 Scoping Study on the Lassedalen fluorspar project (Norway) shows positive economics,

levered to mine life – further drilling required

• New MB Fluorspar Project, Nevada, USA – World Class Potential. Exploration Target minimum

8Mt contained fluorspar – first drilling programme completed, Maiden JORC Mineral Resource

Estimate expected Q1 2014

23

Building a Strategic Position

in the Fluorspar Sector

For further information please contact:

Tertiary Minerals plc Patrick Cheetham/ Richard Clemmey

Tel: +44 (0)845 868 4580 [email protected] [email protected]

Nominated Adviser & Joint Broker Cantor Fitzgerald Europe Stewart Dickson/ Jeremy Stephenson


Joint Broker Beaufort Securities Ltd Christopher Rourke/ Guy Wheatley


Public Relations Yellow Jersey PR Dominic Barretto/ Kelsey Traynor Tel: +44 (0)20 3664 4087 [email protected] [email protected]

THANK YOU FOR YOUR TIME AND SUPPORT

This presentation is available on our website: www.tertiaryminerals.com

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http://www.tertiaryminerals.com/

Documents

Building a Strategic Position in the Fluorspar Sector Minerals plc Company... · •Founder Dragon Mining Ltd, ... Industrial Minerals Magazine, Roskill, CRU, UN, USGS, CCM, Company