ASPIRE MINING LIMITED - Becoming a new Hard Coking Coal Producer .. Marching Down China's One Belt One Road
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ASPIRE MINING LIMITED
Becoming a new Hard Coking Coal Producer
…..…Marching Down China’s One Belt One Road
Investor Presentation February 2018
Disclaimer | Important Information NATURE OF THIS DOCUMENT This presentation has been prepared by Aspire Mining Limited (Aspire or the Company). The information is based on publicly available information, internally developed data and other sources. By receiving this presentation, you acknowledge and represent to the Company that you have read, understood and accepted the terms of this disclaimer. It is the responsibility of all recipients of this presentation to obtain all necessary approvals to receive this presentation and receipt of this presentation will be taken by the Company to constitute a representation and warranty that all relevant approvals have been obtained. NOT AN OFFER This presentation is for information purposes only and do not purport to be all inclusive or to contain all information about the Company or any of the assets, current or future, of the Company. This presentation does not comprise a prospectus, product disclosure statement or other offering document under Australian law (and will not be lodged with ASIC) or any other law. This presentation also does not constitute or form part of any invitation, offer for sale or subscription or any solicitation for any offer to buy or subscribe for any securities in any jurisdiction nor shall they or any part of them form the basis of or be relied upon in connection therewith or act as any inducement to enter into any contract or commitment with respect to securities. Any decision to purchase new shares must be made on the basis of each investor’s own investigations and inquiries into the Company on the basis of the information to be contained in the prospectus to be prepared and issued to eligible investors and a review of the Company’s other periodic and continuous disclosure announcements lodged with the ASX, which are available at www.asx.com.au. This presentation does not constitute an offer to sell, or a solicitation of an offer to buy, any securities in the United States. This presentation and its contents must not be distributed, transmitted or viewed by any person in the United States or any jurisdiction where the distribution, transmission or viewing of this document would be unlawful under the securities or other laws of that or any other jurisdiction. NOT INVESTMENT ADVICE This presentation is not investment or financial product advice (nor tax, accounting or legal advice) and its contents are not intended to be used for the basis of making an investment decision. Recipients of this presentation should carefully consider whether the company is an appropriate investment for them in light of their personal circumstances, including their financial and taxation position. This presentation does not take into account the individual investment objectives, financial situation and particular needs of each investor or shareholder. You may wish to seek independent financial and taxation advice before making any decision in respect of this presentation. Neither Aspire nor any of its related bodies corporate is licensed to provide financial product advice in respect of Aspire’s securities or any other financial products. FORWARD LOOKING STATEMENTS This presentation contains forward-looking information which is based on the assumptions, estimates, analysis and opinions of management made in light of its experience and its perception of trends, current conditions and expected developments, as well as other factors that management of the Company believes to be relevant and reasonable in the circumstances at the date that such statements are made, but which may prove to be incorrect. Aspire Mining Limited Investor Presentation 2
Disclaimer | Important Information Assumptions have been made by the Company regarding, among other things: the price of coking coal, the timely receipt of required governmental approvals, the accuracy of capital and operating cost estimates, the completion of a feasibility study for the Nuurstei Project on its exploration and development activities, the ability of the Company to operate in a safe, efficient and effective manner and the ability of the Company to obtain financing as and when required and on reasonable terms. Readers are cautioned that the foregoing list is not exhaustive of all factors and assumptions which may have been used by the Company. Although management believes that the assumptions made by the Company and the expectations represented by such information are reasonable, there can be no assurance that the forward-looking information will prove to be accurate. Forward-looking information involves known and unknown risks, uncertainties, and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any anticipated future results, performance or achievements expressed or implied by such forward-looking information. Such factors include, among others, the actual market price of coking coal, the actual results of current exploration, the actual results of future exploration, changes in project parameters as plans continue to be evaluated, as well as those factors disclosed in the Company's publicly filed documents. Readers should not place undue reliance on forward-looking information. The Company does not undertake to update any forward-looking information, except in accordance with applicable securities laws. DISCLAIMER No representation or warranty, express or implied, is made by the Company that the material contained in this presentation will be achieved or prove to be correct. Except for statutory liability which cannot be excluded, each of the Company, its directors, officers, employees, advisers and agents expressly disclaims any responsibility for the accuracy, fairness, sufficiency or completeness of the material contained in this presentation, or any opinions or beliefs contained in this presentation, and excludes all liability whatsoever (including in negligence) for any loss or damage which may be suffered by any person as a consequence of any information in this presentation or any error or omission there from. To the maximum extent permitted by the law, the Company disclaims any obligation to update or keep current the information contained in this presentation or to correct any inaccuracy or omission which may become apparent, or to furnish any person with any further information. Any opinions expressed in the presentation are subject to change without notice. Competent Person Statements - Ovoot Coking Coal Project The technical information contained in this presentation in relation to the JORC Code (2012) compliant Ore Reserves and JORC compliant Mineral Resources for the Ovoot Coking Coal Project is reported in the Quarterly Report for the period ended 31 December 2013. The Company is not aware of any new information or data that materially affects the information included in this presentation. All material assumptions and technical parameters underpinning the estimates in the ASX Announcement continue to apply and have not materially changed. Competent Persons Statement – Nuurstei Coking Coal Project The technical information contained in this presentation in relation to the JORC Code (2012) compliant Ore Reserves and JORC compliant Mineral Resources for the Nuurstei Coking Coal Project is reported in the Company’s ASX Announcement dated 13 April 2016. The Company is not aware of any new information or data that materially affects the information included in this presentation. All material assumptions and technical parameters underpinning the estimates in the ASX Announcement continue to apply and have not materially changed. Aspire Mining Limited Investor Presentation 3
Introduction
Perth based Aspire Mining Limited (ASX: AKM) has JORC Reserves & Resources
spent over $40m acquiring and exploring the high Deposit Probable (Mt) Marketable (Mt)
Ovoot Open Pit 247.0 182.0
grade Ovoot coking coal deposit in northern Mongolia.
Ovoot Underground 8.0 6.0
The very large Ovoot project requires a rail link to
Total 255.0 188.0
existing rail network for it to be fully commercialized.
Aspire has established Northern Railways LLC with Deposit Measured Indicated Inferred Total
Ovoot Open Pit 197.0 46.9 9.2 253.1
Noble Group and Chinese partners to fund and build Ovoot - 25.4 2.6 27.9
this railway. Underground
Nuurstei (100%) 0.0 4.7 8.2 12.9
Aspire recently acquired a 90% stake in the Nuurstei Total 197.0 77.0 20.0 294.0
Project in Mongolia, a 12.8Mt(2) premium hard coking
coal deposit with near term production potential.
Coking Coal Historical Spot Price (USD)
Aspire in December 2017 completed a $16.5
million capital raising which has enabled it to
develop the Nuurstei Coking Coal Project.
Aspire is proposing to transform itself into a near
term producer by constructing a 1Mtpa wash
plant at Nuurstei. This will facilitate the
production of washed hard coking coal (HCC) in
early 2019.
Once Nuurstei is commissioned the Company
will then review smaller start up mine plans for Source: sxcoal.com
the Ovoot Coking Coal Project.
Note 1 : Refer ASX announcement 31 July 2013 and 31 January 2014 .
Note 2 : Refer ASX announcement 13 April 2016.
Aspire Mining Limited Investor Presentation 4
Company Snapshot
12 Month Share Price
Capital Structure Performance and Volume
Ordinary Shares on Issue 2,520m
Share Price (ASX: AKM) 1.1¢
Market Cap (undiluted) $27.2m
Performance Rights 279m
Options (2.5¢ strike, Aug ‘18 expiry) 187.1m
Options (1.8¢ strike, Dec ‘19 expiry) 876.0m
Cash (31 Dec ‘17) ~$11.1m
Debt (AUD) ~$3.1m
Enterprise Value ~$19.0m
Top 40 ~77%
Others
6%
13%
Board Noble Group
David McSweeney Non-Executive Chairman #
Shareholders:
David Paull Managing Director 2,300 Aspire Directors
19.9%
Neil Lithgow Non-Executive Director
Hannah Badenach Non-Executive Director Substantial
61.1% Mongolian
Gan-Ochir Zunduisuren Non-Executive Director Shareholders
Aspire Mining Limited Investor Presentation 5
Asset Overview and Locations
Nuurstei Coking Coal Project
12.9Mt(1) HCC (4.7Mt Indicated,
8.1Mt Inferred JORC Resource).
Planned wash plant, strategic
location.
Northern
Near-term production asset via
Railway
trucking to Erdenet rail.
Northern Railways
80% of the Erdenet-Ovoot Railway.
Part of One Belt One Road.
Feasibility Study to be completed
by China Gezhouba Group, with
framework in place for China
Gezhouba to acquire 51% of
Northern Railways.
Ovoot Coking Coal Project
255Mt(2) high quality coking coal
reserve – second largest in
Mongolia.
Requires construction of Ovoot –
Erdenet railway.
Note 1 : Refer ASX announcement 13 April 2016.
Note 2 : Refer ASX announcement 31 July 2013 and 31 January 2014 .
Aspire Mining Limited Investor Presentation 6
Sequentially Putting the Assets to Work
1 | Nuurstei Coking Coal Project 2 | Erdenet – Ovoot Railway 3 | Ovoot Coking Coal Project
Ownership: 90% Ownership: 80%, potentially diluting to 34% Ownership: 100%
Part of One Belt One Road Globally significant high quality fat
Conceptual Mining Study delivers
coking coal asset, strategically
~US$13m - $14m pre-production 549km rail connection to unlock Ovoot - important blending partner with other
capex, feasibility study to commence estimated capex of US$1.25b(1) Mongolian coking coals(4)
immediately post-Offer
Feasibility Study to be completed by China Investigating pre-rail production and
Gezhouba Group logistics options prior to Erdenet –
Premium HCC can be trucked ~430km
to Erdenet where rail to China or China Development Bank EOI received in Sept Ovoot rail construction
Russia is available 2016 to fund 75% of total EPC cost
$2m 2017 drilling program with goal to Primary Feasibility Study completed January
increase resources and confirm spec 2017 concludes that railway is both technically
and financially feasible
Potential production in early 2019 Connectivity with Trans-Siberian Rail to further
boost returns
Existing JORC Reserves and Resources
Probable Measured + Inferred
Deposit Measured Indicated
Reserves Indicated Resources
Ovoot Open Pit(2) 247.0 197.0 46.9 243.9 9.2
Ovoot Underground(2) 8.0 - 25.4 25.4 2.6
Nuurstei(3) - - 4.8 4.8 8.1
Total 255.0 197.0 77.1 274.1 19.9
Note 1 : Refer ASX announcement 9 January 2017 based on 8.9bn Rmb + contingencies.
Note 2 : Refer ASX announcement 31 July 2013 and 31 January 2014.
Note 3 : Refer ASX announcement 13 April 2016.
Note 4 : Refer ASX announcement 7 January 2015 and 29 July 2013.
Aspire Mining Limited Investor Presentation 7
Nuurstei Project
Conceptual Mining Study demonstrates a
competitive delivered cost for HCC into northern Nuurstei Project Highlights
Chinese markets based on trucking of
Ownership 90%
approximately ~430km to Erdenet.
JORC Resources 4.7Mt Indicated(2)
Mining license granted October 2017. 8.1Mt Inferred(2)
Internal development timeline of circa 15 - 18 Mining License MV 020941
months.(1) 860 ha : 30 year tenure
Estimated capex of ~$US13m - $14m for production Coal Type Hard Coking Coal (“JM” Primary
in early 2019. Coking Coal)
Construction of 180tphr wash plant (1Mtpa capacity) Distance from main town at ~10km
a key development milestone. Completion of wash Moron
plant can allow upgrade of Nuurstei and enables Distance to rail siding at ~430km
exploitation of nearby satellite deposits. Erdenet (by sealed road)
$2m drilling and sampling program planned in 1Q18
with a goal to convert Inferred into Indicated Nuurstei Coking Coal vs Traded Hard Coking Coal
resources and build mine life.
St,d/ Y/m Mt/
Product Ad/% Vdaf/% G CSR
% m %
Feasibility Study to commence in 1Q18.
Nuurstei Coking Coal 9.5 28 0.7 95 29 9.0 68.0
Preliminary open pit modelling indicates that a large
proportion of resources will report to a low strip ratio Tianjin Mongolia Coking
10.0 27 0.7 80 16.0 11.0 66.0
Coal
open-pit scenario.(3) Drilling and sampling
programme needed to confirm mine plan. Tianjin Australian Primary
8.0 25 0.8 95.0 20.0 - 67.0
Coking Coal
Source: sxcoal.com and Company announcement on 13 April 2016
Note 1 : Development subject to exploration results and analysis, feasibility studies, approvals, funding and Board approvals.
Note 2 : Refer ASX announcement 13 April 2016.
Note 3 : Refer ASX announcement 19 April 2017 – Conceptual Mining Study confirms Nuurstei Potential.
Aspire Mining Limited Investor Presentation 8
Nuurstei Project
Agreement signed to Mine and Buy coal from
neighbouring license:
o Initial agreement for 100kt or raw coal.
o Coal will be trucked 420 kms to the nearest
rail head at Erdenet then railed to China.
o Coal will be transported south to China for
washing and sale into Tianjin market.
o Will test logistics chains and establish
markets for Nuurstei Coking Coal.
o Can provide bulk trials via Russian rail to
Korean and Japanese end users. Existing open pit adjacent to Nuurstei
Agreement signed to commence 2018 drilling
and sampling programme and Feasibility Study.
o 58 hole infill and extensional programme.
o Will provide additional washability samples
for wash plant optimisation.
Neil Wilson, ex Macmahons Mongolia appointed
Nuurstei Project Manager. Matt Crompton
appointed logistics manager. Sealed Road : Moron to Erdenet
Aspire Mining Limited Investor Presentation 9
Regional End Users
Nuurstei
Ovoot
10
Aspire Mining Limited Investor PresentationEnvisaged Nuurstei Key Milestones
Commence Nuurstei
Nuurstei
Nuurstei Mining
Feasibility Study
Drilling Commences
New
DOC Coal Producer
Funding/Offtake 0.5mtpta
Jan 2018 Jan 2019 Ovoot
Trial 5000t
Commitment Early
Deliveries
to Mine Development
Washplant Construction
Commences
Nuurstei Drilling
Continuous DOC Mining
Mine Construction
Mining
Aspire Mining Limited Investor Presentation 11100% Premium Coking Coal
Nuurstei coking coal is mid vol and low ash
Indicative Nuurstei Coal Specification1
Moisture Ash Volatiles Sulphur CSN CSR Max dilation Gray King G caking index Y index mm RoMax
9% 10% 25-28% 0.7 8.5 +67 +190% G9 +85 +24 1.35
Total Dilation vs Rank Volatile Matter vs. Dilation
Nuurstei
Source: Company internal filings, Mongolian Mining Corp Hong Kong Listing Prospectus (dated 28 September 2010)
1 Air dried basis where applicable
12
Aspire Mining Limited Investor PresentationOvoot and Nuurstei Quality Compared
to Majors
Aspire Mining Limited Investor Presentation 13Funding Nuurstei Mine Development
Various Sources Available In Addition to Debt and Equity markets
EPC Funding:
EOI received from ODDOF BHF. Private German bank that would provide funds supported by
Hermes Fund, German Government backed export credit agency. Term offtake required.
Offtake \Coal Pre Sale:
Selling offtake rights in exchange for investment
Marketing agent Noble Group has agreed to assist funding through coal pre sales and a
working capital facility.
Contractor Based Funding Options:
A range of equipment and infrastructure expenditures can be imbedded into operating
contracts.
Aspire Mining Limited Investor Presentation 14Northern Rail Project (Northern Railways LLC)
A One Belt One Road Initiative
Northern Rail Project Highlights
The Erdenet – Ovoot railway is the rail project of
Ownership Aspire Noble CGGC
Mongolian registered Northern Railways LLC, a
90% owned subsidiary of Aspire.
The 549km Erdenet – Ovoot railway is a part of Now 80% 20% -
Mongolian Rail Policy included in the “Northern Post CGGC electing to acquire
34% 15% 51%
Rail” Economic Corridor, an initiative to establish 51% and investing US$4.5m
an international economic corridor between China
Concession Consortium Aspire, CGGC, CRCC and FSDI
and Russia through Mongolia, supported by all
three governments. Capacity 22Mtpa to 30Mtpa
In January 2017, China Railway’s First Survey and Capex US$1.25b plus contingencies for
Ovoot to Erdenet
Design Institute completed the first stage of the
Rail Feasibility Study (RFS) that confirmed a Concession BOT 30 years CP’s including funding
US$1.25b(1) construction cost. to be completed 20 August 2018.
Construction period up to 5 years
China Development Bank provided an EOI to fund
up to 75% of rail funding in Sep 2016.
Binding MOU signed with China Gezhouba Group (“CGGC”) in October 2017 - CGGC will complete BFS by 31 March 2018
and provides path for CGGC to elect by 15 May 2018 to fund all CPs for Rail Concession to earn a 51% interest in Northern
Railways diluting Aspire’s interest to 34%.(2)
CGGC included into Consortium Feb 2018.
Note 1 : Refer to Announcement on 9 January 2017, based on 8.9bn Rmb + contingencies.
Note 2 : For a full disclosure on the CGGC MOU, refer to an Announcement titled “China Gezhouba Group Agrees to Complete Bankable Feasibility Study for Erdenet to Ovoot Railway” dated 12 October 2017.
Aspire Mining Limited Investor Presentation 15One Belt One Road (“OBOR”)
The One Belt One Road
project is arguably the single
largest investment initiative
globally.
OBOR is the “crown jewel”
of Chinese Gov’t Policy
designed to boost trade,
connectivity and take
advantage of latent industrial
capacity. Mongolia in a
prime position to participate.
Erdenet – Ovoot – Arts Suuri
– Kyzyl included in One Belt
One Road as the Northern
Rail Corridor in June 2016.
Provides an efficient path for
China/Europe trade and Map of Northern Corridor
unlocks substantial coking
coal deposits in northern
Mongolia and Russia’s
Tyuva region.
Aspire Mining Limited Investor Presentation 16Ovoot Project
Aspire’s Ovoot Coking Coal Project in Northern Mongolia
is the country’s second largest coking coal Reserve, after Ovoot Project Highlights
the Government owned Tavan Tolgoi Mine.
Ownership 100% Aspire Mining Limited
A Mining License (MV 017098) over the Ovoot Project
Run Of Mine (ROM) 255Mt(1)
was granted in August 2012.
Life Of Mine (LOM) 21 years
Aspire plans to develop the Ovoot Project during
construction of the Erdenet – Ovoot railway with first Total Saleable Product 188Mt
production to coincide with rail commissioning.
Coal Type* 100% High Quality Coking
Initial production from the Ovoot Project could commence Coal (“Fat” Coking Coal)
at 5Mpta, mining a high proportion of low ash bypass coal Average Strip Ratio 7.7 BCM waste/t coal
– with upgrades to infrastructure, the mine is capable of (excluding pre-strip)
producing up to 10Mtpa of high quality coking coal.
OPEX(2) US$83-93/t FOR China Border
While large scale development requires rail connection, (first 5 years)
there are smaller scale development options possible Initial Production Up to 5Mtpa
once the Nuurstei wash plant has been commissioned.
Capex(2) US$144m inc. contingency
Production Potential Up to 10Mtpa
*The Ovoot product is capable of upgrading existing Mongolian thermal,
oxidised and low quality coking coals to saleable coking coals and is
therefore of significant strategic relevance.(3)
Aspire will look to fund the majority of the required US$144m
pre-production capex at Ovoot from a combination of funding
sources including but not limited to coal pre-sales, offtake
Above: Ovoot coking coal
commitments, joint venture and contractor funding.
Note 1 : Refer ASX announcement 31 July 2013 and 31 January 2014.
Note 2 : Refer ASX announcement 13 August 2013.
Note 3 : Refer ASX announcement 7 January 2015 and 29 July 2013.
Aspire Mining Limited Investor Presentation 17Aspire Transformed
“Aspire is aiming to become a profitable miner through development of the Nuurstei
Coking Coal Project thereby building a market capitalisation to facilitate the
development of the world class Ovoot Project ”
Aspire’s asset base remains far superior to those of its more generously valued ASX peers with offshore projects.
Aspire is working to become a near-term coking coal play with a wealth of blending and transportation opportunities and the
only commercial scale wash plant in northern Mongolia.
The Nuurstei exploration program, designed to increase mineral resources and convert inferred resources to indicated will
provide data for a feasibility study in Q2 2018, anticipated to yield a potentially profitable mining scenario on production in
early 2019.
Aspire is one of few ASX listed companies that maintain enormous leverage to China’s One Belt One Road initiative.
Partnering with Chinese SOEs, China Gezhouba Group and China Railway Construction Corp demonstrates the company’s
long term strategic potential.
A path to production and delivery of profitability should see a re-rate of Aspire’s share price.
Aspire Mining Limited Investor Presentation 18Contact Details
Aspire Mining Limited
ABN: 46 122 417 243
ASX Code: AKM
Web: www.aspiremininglimited.com
Offices:
AUSTRALIA MONGOLIA
69 Kewdale Road Sukhbaatar District, 1st Khoroo
Welshpool, WA6106 Chinggis Ave-8
Western Australia Altai Tower, 3rd Floor, Room 302
Tel: +61 8 9287 4555 Ulaanbaatar
Tel: +976 7011 6828
Contact Person:
David Paull - Managing Director
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