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Day 1 - Session 1: Strategic metals and the clean-tech revolutionOutlook for Rare EarthsObjective Capital Global Mining Investment Conference 2010Stationers' Hall, City of London28-29 September 2010Speaker:Gary Billingsley - Great Western Minerals
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GLOBAL MININGINVESTMENT CONFERENCE 2010
STATIONERS’ HALL ● CITY OF LONDON ● TUESDAY-WEDNESDAY, 28-29 SEP 2010
www.ObjectiveCapitalConferences.com
Investment Conferences
Outlook for Rare EarthsGary Billingsley – Exec Chairman, Great Western Minerals
DAY 1 – SESSION 1: STRATEGIC METALS AND THE CLEAN-TECH REVOLUTION ?
Other sponsors & participating organisations:
GLOBAL MININGINVESTMENT CONFERENCE 2010
Lead sponsors:
Media partners:
OUTLOOK FOR RARE EARTHSObjective Capital Global Mining Investment Conference
September 28, 29 2010 London, UK
TSX.V: GWG / OTCQX: GWMGF [email protected]
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Safe Harbour
• Cautionary Note On Forward-Looking Statements
• "Forward-looking statements include, but are not limited to, statements regarding projected processing capacity, output and revenue, GWMG’s continued advancement of its mineral exploration, projects, processing operations and business plans. When using this presentation, the words “potential”, “anticipate”, “estimate”, “forecast”, “believe”, “expect”, “may”, “project”, “plan” and similar expressions are intended to be among the statements to identify forward-looking statements."
•Although GWMG believes that its expectations reflected in these forward-looking statements are reasonable, such statements involve risk and uncertainties and no assurance can be given that actual results will be consistent with these forward-looking statements. Readers are advised to refer to GWMG’s current Annual Information Form available at www.sedar.com for a full description of risk factors.
• GWMG shall not be liable or responsible for any claim or damage, directly or indirectly, special or consequential, incurred by the user arising out of the interpretation, reliance upon or other use of the information contained in this presentation.
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Fully Integrated Production Model
EXPLORATION
MINING
PROCESSING
SEPARATION
METAL MAKING
BY-PRODUCT SALES
REO SALES
LCM/GWTI ALLOY PROD’N
Enterprise profitability increases with each stage of processing
RE METAL SALES
ALLOY SALES
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What Are Rare Earth Elements? Unique optical and magnetic properties
LREE HREE
Where Are Rare Earth Elements Used?Vital to our standard of living
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World Mine Production and Reserves(tonnes REO)Country Mine Production
2009Reserves
United States - 13,000,000
Australia - 5,400,000
Brazil 650 48,000
China 120,000 (97%) 36,000,000 (36%)
CIS N/A 19,000,000
India 2,700 3,100,000
Malaysia 380 30,000
Other N/A 22,000,000
World Total 124,000 99,000,000
Source: USGS Mineral Commodity Summaries, January 2010
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Global REE Demand Rising Rapidly
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Rising Demand For REE’s and Applications
Increased REE Demand Comes From China REE
Application REO
2010 Demand
2014f Demand
Permanent Magnets
Nd, Pr, Dy,
Tb, Sm 32,000 50,000
NiMH Batteries,
metallurgical La, Ce, Pr, Nd 28,000 41,000
Catalysts Ce, La, Pr,
Nd30,000 37,000
Phosphors Eu, Y, Tb, La, Dy, Ce, Pr, Gd
8,000 12,000
Polishing Powders
Ce, La, Nd,
mixed20,000 26,000
Glass Additives
Ce, La, Nd, Er, Gd, Yb
11,000 10,000
Ceramics, other
Mixed 5,000 6,000
Total 134,000 182,000
Chinese Demand
72,000 (54%)
117,500 (65%)
ROW Demand 62,000 64,500
Source: Lynas Corp. using data from industry participants, Roskill & IMCOA8
China: Export Quota ReductionsChinese Rare Earth Export Quotas 2004 to 2009 (tonnes REO)
Source: 2005-2009, IMCOA; 2010, Metal Pages
Year RE Export Quota
% Change Demand Outside China
Surplus (Shortfall)
2005 65,609t 0% 48,000t 17,609t
2006 61,821t -6% 53,000t 8,821t
2007 59,643t -4% 55,000t 4,643t
2008 56,939t -4.5% 54,000t 2,939t
2009 50,145t -12% 25,000t 25,145t
2010 30,258t -40% 62,000t (31,742t)
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REO Prices Over The Last 12 Months
CeO2 US$/t Dy2O3 US$/kg La2O3 US$/t
Nd2O3 US$/t Sm2O3 US$/t Eu2O3 US$/kg
Source: Asian Metal
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If Not China Then Where?Sample of Known RE Deposits
Source: Mariano
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Global Rare Earth Projects Under Development
Thor Lake TSX:AVLKvanefjeld ASX:GGG
Nolan’s Bore ASX:ARU
Dubbo ASX:ALKMount Weld ASX:LYC
Dong Pao-Sojitsu/Toyota Vietnam
Steenkampskraal TSXV:GWG
Mountain Pass, CA Molycorp
Hoidas Lake TSXV:GWGBayan Obo China
Potential Production by 2012/2013 Potential Production by 2014/2015
A limited number of Rare Earth deposits with 2014/2015 production potential
Mianning
Ionic Clays
Kutessay-TSXV:SRU
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Global Rare Earth Projects Under DevelopmentHonourable Mention: Production 2015+ ?
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Bokan TSXV:UCU
Bear Lodge TSXV:RES
Strange Lake TSXV:QRM
Sarfartoq TSXV:HUD
Wigu Hill Montero (private)
Zandkopsdrift Frontier (private)
Kangankunde ASX:LYC
Nora Karr TSXV:TSM
Where Will Rare Earths Come From?Supply Sources (t REO)
Source: 2005-2009, IMCOA; 2010, Metal Pages and Lynas Corp.
Location 2010 2014
Baotou 55,000 60,000
Sichuan 10,000 15,000
Ionic Clays 45,000 40,000
Mountain Pass 3,000 19,000
Mount Weld - 22,000
Recycling 5,000 6,000
Russia 4,000 4,000
India 3,000 4,000
Vietnam - 5,000
Steenkampskraal - 2,700
TOTAL 125,000 177,700
DEMAND 134,000 182,000
IMBALANCE (9,000) (4,300)
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Projected Shortages 2014
Source: IMCOA; Lynas Corp.
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2014 Supply/Demand Imbalance
Demand Supply
Oxide t REO t REO Imbalance
La2O3 51,050 47,801 -3,249
CeO2 65,750 71,435 5,685
Pr6O11 8,900 8,707 -193
Nd2O3 35,900 28,965 -6,935
Sm2O3 1,390 3,554 2,164
Eu2O3 840 711 -129
Gd2O3 2,300 2,666 366
Tb4O7 590 355 -235
Dy2O3 2,040 1,599 -441
Er2O3 940 889 -52
Y2O3 12,100 10,129 -1,971
Ho-Tm-Yb-Lu 200 889 689
182,000 177,700 -4,300
Attributes: Current RE ProjectsProject Resource/
Reserve (Mt REO)
Annual Prod’n (t REO)
Capex( US$million)
CeO2 (t) Nd2O3 (t) Dy2O3 (t)
Bayan Obo 56 60,000 N/A 30,000 10,000 600
Mtn Pass 1 19,000 $550 9,700 313 (metal) nil
Mt. Weld 1.2 20,000 $650 9,300 3,700 25
Nolans 1.0 20,000 $420 9,600 4,300 70
Thor Lake 0.3 10,000 $900 3,400 1,700 320
Dubbo 0.7 2,600 $150 960 370 50
Kvanefjeld 2.6 44,000 $2,300 18,000 5,600 480
Dong Pao 0.8 7,000 $50 2,500 800 5
Hoidas Lake 0.1 5,000 $150 2,300 1,000 18
Steenkampskraal
0.03 2,700 $45 1,200 450 18
Source: IMCOA, Company filings, websites and industry journals
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Optimistic Supply/Demand Imbalance 2014Total REO t CeO2 t Nd2O3 t Dy2O3 t
Projected (Shortage) Surplus
(4,300) 5,685 (6,935) (441)
Additional Projects 40,300 16,260 7,370 458
Adjusted (Shortage) Surplus
36,000 21,946 435 17
FOR NdFeB MATERIALS IT WILL BE CLOSE!
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OBSERVATIONS• There is definitely a need to develop RE sources outside China for
PM materials. It’s prudent for both China and ROW.
• In the long term there are likely enough RE resources to supply the global RE market.
• Sources of PM materials are likely to remain tight in the near term given that it takes 7 to 10 years, on average, to bring mining projects on stream, (in mining-friendly jurisdictions!).
• The world likely does not need any more large “LREE” projects. The focus should be on projects that can supply significant “HREE” per tonne mined. Balance is important.
• It is not enough just to bring RE sources on stream. We must also develop separating and metal making capability.
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TSX.V: GWG / OTCQX: GWMGF [email protected]
THANK YOU
Other sponsors & participating organisations:
GLOBAL MININGINVESTMENT CONFERENCE 2010
Lead sponsors:
Media partners: