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Industrial Minerals
Tellus Group
Storage
Industrial and Edible Salt Storage / IsolationRenewable EnergySalt Mine Tourism
Chandler Project (NT)
Complementary
Sandy Ridge Project (WA)
Kaolin
Industrial Minerals
Tellus Holdings Limited
www.tellusholdings.com
Storage / Isolation
Storage
Chandler Salt Mine Update – Adding Value to Salt
Group MD Duncan van der MerweMining the Territory Conference21 August 2014
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Important Notice and Disclaimer
Summary information
This presentation (Presentation) has been prepared by Tellus Holdings Ltd (ABN 97 138 119 829) (‘Tellus’) and is for information purposes only. This Presentation contains summary information
about Tellus and its subsidiaries and their activities current as at the date of this Presentation. The information in this Presentation is of general background and does not purport to be complete.
It should be read in conjunction with other periodic announcements on www.tellusholdings.com.au. The key information on detailed exploration target statements, mineral resource estimates, and
feasibility results can be found in Tellus’ publically released media announcements. Exploration target statements and mineral resources estimations are appended to comply with ASX guidelines
but investors are urged to read supporting information in full available on the company’s website, and available in their data room.
Future performance
This Presentation contains certain “forward-looking statements”. Forward looking words such as, “expect”, “should”, “could ”, “may”, “plan”, “will”, “forecast”, “estimate”, “target” and other similar
expressions are intended to identify forward-looking statements within the meaning of securities laws of applicable jurisdictions. Indications of, and guidance on, future earnings and financial
position and performance are also forward-looking statements. Forward-looking statements, opinions and estimates provided in this Presentation are based on assumptions and contingencies
which are subject to change without notice, as are statements about market and industry trends, which are based on interpretations of current market conditions, and independent third party
expertise. Such forward-looking statements, opinions, and estimates are not guarantees of future performance.
Not an offer
This presentation does not constitute an offer, invitation, or recommendation to subscribe for or purchase any security and neither this presentation nor anything contained in it shall form the
basis of any contract or commitment.
Competent Person Statement – Chandler Project
The information in this presentation that relates to Mineral Resources - Chandler Project - is based on information compiled by ERCOSPLAN Ingenieurgesellschaft Geotechnik und Bergbau mbH
(‘ERCOSPLAN’). Jana Neubert is a senior geologist and employee of ERCOSPLAN and a member in good standing of the European Federation of Geologists registered as “European Geologist”
(Registration Number 1033). Ms Neubert has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which she has
undertaken to qualify as a Competent Person as defined in the 2012 Edition of the Australasian Code for the Reporting of Mineral Resources and Ore Reserves.
Dr Henry AM Rauche is a senior geologist and Managing Director & C.E.O. of ERCOSPLAN and a member in good standing of the European Federation of Geologists registered as "European
Geologist" (Registration Number 729). Dr Rauche has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he has
undertaken to qualify as a Competent Person as defined in the 2012 edition of the Australasian Code for the Reporting of Mineral Resources and Ore Reserves.
Competent Person Statement – Sandy Ridge Project
The information in this presentation that relates to Mineral Resources - Sandy Ridge Project - is based on information compiled by Terra Search Pty Ltd. Mr Jenkins is Principal Geologist of Terra
Search and a Member of the Australian Institute of Geoscientists. Mr Jenkins has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and
to the activity which he has undertaken to qualify as a Competent Person as defined in the 2012 edition of the Australasian Code for the Reporting of Mineral Resources and Ore Reserves.
The information in this presentation that relates to exploration targets is based on information reviewed by Dr. Simon D. Beams, a full time employee of Terra Search Pty Ltd, geological
consultants employed by Tellus. Dr. Beams has BSc Honours and PhD degrees in geology. He is a Member of the Australasian Institute of Mining and Metallurgy (Member #107121) and a
Member of the Australian Institute of Geoscientists (Member #2689). Dr Beams has sufficient relevant experience in respect of the style of mineralisation, the type of deposit under consideration,
and the activity being undertaken to qualify as a Competent Person within the definition of the 2004 edition of the AusIMM’s “Australasian Code for Reporting of Exploration Results, Mineral
Resources, and Ore Reserves”.
Exploration Target
Any statement contained in this document as to exploration results or exploration targets has been made consistent with the requirements of the Australasian code for reporting of exploration
results, mineral resources, and ore reserves (‘JORC Code’). All statements as to exploration targets of Tellus salt and kaolin, and statements as to potential quality and grade are conceptual in
nature. There has been insufficient exploration undertaken to date to estimate a resource and identification of a resource will be totally dependent on the outcome of further exploration.
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Contents
Summary
Team
Strategy
Chandler Project (NT, Australia)
Opportunities for the NT
Sandy Ridge Project (WA, Australia)
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Summary
309 M t JORC Measured1 Resource
Chandler Salt Mine Project (100%, 4+25 year LOM)
Ave 508k tpa salt & minerals sales
Storage sales 2
41 M t JORC Inferred1 Resource
Sandy Ridge Kaolin Project (100%, 1+25 year LOM)
Ave 28k tpa kaolin clay sales
Storage sales 2
Tellus strategy Project developer – mineral / backfill business
Dual revenue business
Mine salt and kaolin (creates voids) and backfill with waste (fills voids) – proven global model
Portfolio World class assets - regulated, long life business
Chandler status JORC, MLA pending, EIS/ DFS (S2- FEL3) commencing
Sandy Ridge status JORC, MLA pending, PER / PFS commencing
ClayVault status WA Gov. IWDF proj. mg’t contract (5 year term 50/50JV)
AdvantagesFirst to market in Asia, high barriers to entry, strong industry dynamics
1 Refer to Sandy Ridge JORC ( 20 June ’14) and Chandler – JORC (1 July 14) media releases2 Photo of German salt/backfill mine, photo of West Australian clay backfill project
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Experienced Board Experienced commodity team Experienced waste team
40 years experience in mine projects engineer BHP, Rio, Xstrata, Anglo Coal
Ex Bus. Dev. Coffey Environmental, IBM, Unilever, Aust Defence Forces.
Ex Global Head of Infrastructure AMP Capital, CEO TenixInfrastructure, CEO Lend Lease Capital
Philip GarlingGroup Non Executive Chairman
Ron SiftonGroup Non Executive
Duncan van der MerweGroup Managing Director
Brett BoyntonGroup Finance Director
Joe LuxfordChandler Underground Advisor
Mining (Ex Gencor/Billiton, Blue Energy), waste & infrastructure, Ex Bank of Scotland, Noble Group
Ex UBS, FBR Capital, Credit Suisse, investment banking, M&A, Director Signature Gold
Ex CFO Newalta, Canada’s largest salt cavern waste storage operator – 30 years direct experience
Project Manager EPMS, Ex Technical Director WA Kaolin Holdings, HBH Consultants, GMA Garnet
Ex GM Dampier Salt, Ex CEO of Albany Port, Wesfarmers, Rio Tinto, Hamersley Iron
Mark ShepherdTellus RockVault NED
John CookTellus RockVault Chairman
Mike IngramSandy Ridge PM / Technical Advisor
Bob EmeryTellus Salt Chairman
Ex NSW Chief Mining Engineer (Minerals –NSW), Ex MD Waste Services NSW, Founder WMAA
Ex MD Coffey WA, Manager Mt Walton IWDF -Australia’s only Class V waste facility
Highly experienced board and management team with key individuals having a direct and proven track record in developing salt and kaolin mines, and heavily regulated waste projects
Ex Wiltshire Geological Services, Schlumberger Information, Terra Search
Jaime LiveseySenior Geologist
Steve ReeceChandler PM / Technical Advisor
Reg. Manager Golders. Ex Mine Manager (15 yrs) at Winsford UK’s largest under ground salt/ backfill mine
Team - Organisational Structure2
MD MichelsWarren Munday, 35 years in media, com. engagement & communications in VIC & NT
Jane MundayCommunication Advisor
Fmr CEO Aust. Coal Assoc & NSW Minerals Council, Trustee AusCoal Super, Snr Mngr Shell Oil and Gas
Dr Nikki WillamsGroup Non Executive
Company Secretary, CFO for a number of ASX listed & pre-IPO companies
Anne AdaleyCompany Secretary/ CFO
Robert CharterMarketing
Corporate/ Advisory
Ex WA Environmental Regulator, Managed only Class V waste facility
Noel DaviesTellus RockVault NED
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1 Compilation and evaluation of bedded salt deposits - SMRI -KBB: Table 3,4 & 5, 20064 GRS report for UNEP – Options for environmentally sound management of surplus mercury, 2011
Clay
Strategy - In Line With International Best Practice3
Proven and profitable global business model
Region Underground Salt Caverns & Mines 1
North America >100 projects (incl. 400 solution mined salt caverns)
Europe 49 Projects (Germany leader - 30 salt/backfill mines)
Asia 13 projects (China 6)
Russia 9 projects
Africa 1 project in Morocco
South America 1 project in Brazil
Total > 150 projects
Region Near Surface Clay Storage Facilities 4
North America Canada
Europe France, Spain, Switzerland
Asia Australia (NSW closed 1M ton facility, WA open IWDF)
Regions with salt caverns/ mines and clay storage projects
Underground salt caverns and mines
Near surface clay storage facilities
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Strategy – Pit to Port3
Vast asset, easy to mine, scalable, technically / commercially sound business, dual revenue
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Strategy - Salt Products3
Salt - Tellus’ competitive advantage
▪ Strong position to meet Asian demand by providing a guaranteed volume and quality
▪ Darwin – closest port to Asian buyers▪ Large scale resource – easily scalable▪ Reliable supplier - not influenced by climate▪ Associated minerals – e.g. fertilisers▪ Cross selling storage solutions (domestic)
Cyclone map
World: Forecast demand for salt by region, 2012 and 2018 (Mt) 1 World: Forecast demand for salt by end-use, 2012 and 2018 (Mt) 1
Tellus opportunity
Drilling salts used in the oil and gas
industry, salt fluxes used in the smelting and mining industry
To Shanghai : Darwin is ~4,100 km closer than Indian ports, ~5,900km closer than Mexican ports~13,300 km closer than Chilean ports
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Strategy – Oil & Gas Industry Service Provider3
On shore liability Off shore liability
Every up-, mid-, and downstream operation produces waste 15 salt cavern facilities servicing the Gulf’s O&G industry
Tightening regulation and limited cost effective solutions Government & industry want best practice facilities
2 http://www.eia.gov/todayinenergy/detail.cfm?id=3190, GRS UNEP Mercury report1 http://naturalgas.org/naturalgas/storage/
Map- Based on Australian Gov. Dept of Resources, Energy and Tourism 2008 report
Chandler has the potential to connect Central Australia to the booming on and offshore O&G industry
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Waste Acceptance Criteria Chandler
Liquid waste in barrels, lined & bunded
Dry waste multiple lined and bagged
Nuclear waste (Defence, Energy)
Uranium mining waste
Infectious (Medical) Waste
Uncertified waste
Tellus is bringing “worlds best practice” solutions and recognized high development standards
Industry Waste Sources
Oil & Gas
Mining
Heavy Industry / Power Generation
Manufacturing
Agricultural
Government/SES
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X1
X
Strategy – Tellus Service Offering
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Best Practice Systems
Certified Management System
Strict acceptance criteria
Packaging and transport criteria
Safety case – man made engineering
Safety case – natural engineering (geology)
Insurance, bonds, Permanent Isolation Certificates
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1 Tellus plans to accept NORM’s (naturally occurring radioactive material as found in oil and gas, mining, and heavy industry processed waste etc)
Tellus’ certifications and values
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Strategy - Rediscovering the Chandler Salt
Source: McGraw HillImage: Victoria Museum, Source: Colorado Plateau GeosystemsSource: Colorado Plateau Geosystems
Cambrian -580myo lifeless land teeming ocean Salt trap for oil and gasGillen 700myo-Chandler 500myo-Late Cambrian
Tellus drilling - 98% pure halite at 795mFlat thick salt bed ~ 18km wide (CH003 ~ 300m)145km seismic, 6.6km core
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Potentially Australia’s largest commercially viable salt bed
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Project location
Drilled 1,937m
Field work Grade Analysis Expert analysis
370 samples Dual business
FEL 2
Engineering DFS/ EIS Commercial
Site investigations Customer visits
Chandler - Progress4
Study categories: 17 DFS /15 EIS Study contributors: 22 companiesCountry of study contributors: 5
Site visits to other salt mines:Trade trips
Project technically feasible, commercially viable, no fatal flaws
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Chandler - Resource Estimate4
1 Refer to Tellus Media Release ‘2014 Chandler – JORC Estimation’ 1 July for further details, JORC Table 1, Proximate and Competent Person Statement 2. JORC statement prepared by Ercosplan (Germany)
Flat Salt Bed ~ 18km wide (hole CH003 ~ 300m thick salt bed), sedimentary rock suitable for low cost decline
309 Mt Measured Resource = 525 year mine life.Mineral resource covers 8% of EL 29018
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Chandler - Design4
*Not to scale – underground workings not directly under surface plant
Salt dry processing plantStorage processing plant
Wet processing ponds (evaporation, crystallization, bittern ponds)
2 MW solar plant
Vertical ventilation shafts
Portal and decline
Traffic management – blue line salt traffic, orange line – waste traffic
Ventilation management –intake (2nd egress) and exhaust air
Isolation management –store like with like
Room dimensions – 240m L, 15m W 4.5m H,11 rooms pa
Water management –decline stops above salt bed, with sump
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Chandler - Summary
Mine life – 29 years (4 + 25 years), rolling terms
Production -salt0.5 M tpa salt and associated minerals, Scale up on demand
Mining method Underground, room and pillar design, Continuous miner
Room dimensions240mL x 15mW x 4.5mH, 15m support pillar
Processing – Dry (crush, bag, ship), some wet, backfill
ManagementCore business - owner operator, Non core - contractor
Jobs Build (280-350), operational (180), indirect (>540-720)
Historic spend: General area 41.5km (>$18.5M)Project area: 6.6km, 15 lines seismic (145km) – (A$6.5M)
Capex – A$464 M
Opex – Labour, transport, utilities, services
Taxes – Corporate tax, GST, levies, royalties
Could potentially be Australia’s longest life mine Could potentially be one of central Australia’s largest employers
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Chandler – Power requirements
2 MW solar plant
Could potentially be Central Australia’s largest solar power station
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General - archives
Licensed - disposal
Licensed - storage
K+S-German salt Mine
Compass Minerals – Deep Storage
4 Chandler - Underground design
Salt mining
K+S-German salt Mine
K+S-German salt Mine
Tellus is planning to develop the safest mine in Australia
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Opportunities for the Alice Springs region and NT
Category Pre mine Mine build Mine operations
Jobs Limited Mine & plant build Mine & plant operations
Training Limited work experience
Apprenticeships, traineeships, work experience
Apprenticeships, traineeships, work experience
Investment Studies, approvals, team & internal & customer processes
Capex (civils, plant &equip), team & internal & customer processes
Investment (sustaining capex & opex) team & internal & customer processes
Business opportunities
Contractor labour, drilling, studies, equip. & supplies
Mine contractor services,equipment & supplies
Mine contractor services Equipment & suppliesSalt related spin off businesses
Sponsorships & trust
Sponsorships Sponsorships SponsorshipCommunity benefits trust
Environmental Work exp. (rangers) Work exp. (rangers) Offset program (ranger programs)
Infrastructure Industrial shed/ office
Improved roads, bridges, power, comm’s
Improved roads, bridges, power, comm’s, training & visitor centre
RoyaltiesTaxes & rates
Exploration Agreement CLC
Exploration Agreement CLCFederal, NT , Local taxes/ rates
Royalties - MineralFederal, NT , Local taxes and rates
Tellus has a commitment to local employment, training and supply of equipment and services
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Opportunities – Local contracts awarded during DFS 1Category Service / equipment provided Local
Industrial real estate Shed/ office rental & utilities
Studies - environmental contractors & TO’s Field surveys
Station / Landholder Earthworks machinery, accommodation
Mining service providers Camp and equipment supply
Wholesale fuel distributor Diesel supply
Vehicle rental supplier Vehicle rental
Freight provider Freight service
Geotechnical contractors Personnel
Camping & safety equipment supplier Field equipment supply
Helicopter charter service Charter flights
Accommodation & food and beverage Hotels, taxis, catering, room hire
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How to engage with TellusInitial engagement is via registration with: Industry Capability Network (ICN) www.chandlersaltmine.icn.org.au or contact ICNNT 08 8922 9422ICNmatches projects with potential suppliersTier I Primary contract –overarching contractTier II Secondary/ sub contracts
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Chandler - Community and Stakeholder Engagement
Community consultation
Supporting jobs (WA TO’s)
Supporting jobs (NT TO’s)
Pot. buyers (pit-to port visits)Community sponsorship
NT Gov. & Regulator (site visits) TO meetings & site visits
Supporting local business (20+)
Over 30 months - 118 face to face meetings
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Chandler – Next steps
Category Detail
Approvals - next steps Next round of community engagement Lodge Mineral Lease Application Complete Environmental Impact Study (EIS) and lodge (Federal and NT)Complete all regulatory approvals, licences and agreements
Project - next steps Complete stage 2 drilling and seismicComplete dry/wet salt processing pilot, geotechnical tests and analysisComplete definitive feasibility study (FEL3)Complete off take, supply, and finance agreementsExpand team and appoint Tellus consortium partners
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Dry / wet salt processing pilotDrilling (mine planning) Planning for build / S1 operationsRegulatory approvals & offtake
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Drilled 1,864 m
Field work Grade analysis Expert analysis
915 samples (1,700kg) Dual business
FEL 1
Engineering DFS/EIS Commercial
Site investigations Trade trips
Sandy Ridge - Project Update6
Country of study contributors:
Site visits to other kaolin mines:
Project technically feasible, commercially viable, no fatal flaws
Sandy Ridge – Next steps6
15 ton kaolin pilot and analysis40 tonne bulk sample collection Stage 1 buildRegulatory approvals & offtake
Detail
Next round of community engagement Lodge Mineral Lease Application Complete PER and lodge (Federal and WA)Complete all regulatory approvals, licences and agreements
Complete stage 2 drilling Complete pilot, geotechnical tests and analysisComplete definitive feasibility study (FEL3)Complete off take, supply, and finance agreementsExpand team and appoint Tellus consortium partners
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Any questions?
Duncan van der Merwe
Group Managing DirectorE: [email protected]: +61 2 9241 7678
www.tellusholdings.com