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1 Tellus Holdings Ltd Project Updates Managing Director Duncan van der Merwe June 2015
1
Tellus Holdings Ltd
Project Updates
Managing Director Duncan van der Merwe
June 2015
2
Strategy
Chandler Project, NT
Appendix
Sandy Ridge Project, WA
ClayVault Project, WA
Contents
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4
2
3
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Tellus Holdings Ltd (“Tellus”) Summary
Company Public unlisted company (2009)
Strategy Project infrastructure developer
Developing a globally proven, dual revenue, business model – first in Asia
Mine underground rock salt and kaolinclay beds and export commodities
Fill the space left from mining with equipment, archives and waste
Projects Chandler salt project (build 2017)
Sandy Ridge kaolin project (build 2016)
ClayVault Class V waste JV operation
Market cap AUD 55 million (target A$320M Q4 2016)
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Project and Office Locations
Share price and market cap
Company Summary
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Tellus’ Dual Revenue Strategy1
5
309 M t JORC Measured1 Resource
NT Chandler Project
Halite salt (500 year mine)
Vo
lum
e: 5
08
k t
pa
salt
sal
es
WA Sandy Ridge Project
Kaolin clay(1,475 year mine)
1 Refer to Sandy Ridge JORC media release ( 20 June ’14) and Chandler JORC media release (1 July 14)
41 M t JORC Inferred1 Resource
Tellus’ Commodity Strategy1
Resources Our Industrial Minerals End Market UsesOur Strategy
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eve
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e: c
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mo
dit
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Do
me
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an
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Vo
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e: 2
8 k
tp
aka
olin
sal
es
Du
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Long term (25 + year), reliable supplier of high grade industrial minerals
Chlor‐alkali, soda ash, road de‐icing, food processing, animal feedstuffs, water treatment
Ceramics (tableware and glazes), paint, continuous filament glass-fibre and other uses
Do
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an
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Experienced Management Team and Consortium1
Experienced Board team Exp. mining/ BD team Experienced waste management team
Shell, NSW Minerals CouncilVIC Haz Waste Consult. Committee
BD Coffey Environmental, IBM
Head-AMP Capital Investors, CEO Tenix Infrast. & Lend Lease Capital
Philip GarlingNon Executive Chairman
Duncan van der MerweGroup MD
Ron Sifton NED
Noel DavisMD ClayVault WA
Robert CharterGM Sales and Marketing
Dr Nikki WilliamsNED
Mining –(Gencor -Billiton), waste & infrastructure (BOS, Nobles)
CFO Newalta(Canada’s largest salt cavern waste storage operator)
Ex WA Environmental Regulator, Managed only Class V waste facility
EPMS,Project manager - WA Kaolin
Mark ShepherdTellus RockVault NED
John CookTellus RockVault Chair
Mike IngramSandy Ridge Project Leader
Ex NSW Chief Mining Engineer, Ex MD Waste Service NSW
Ex MD Coffey WA, managed Australia’s only Class V waste facility
Wiltshire Geological, Schlumberger, Terra Search
Jaime LiveseyProject Administrator /Snr Geologist
Steve ReeceChandler Project leader
Managed UK salt / backfill mine for 15 years, Compass Minerals WinsfordRocksalt Mine
Project SPV
EPC O&M
Funders Insurers
Project Consortium – Tier 1 parties
Engineering
Highly experienced Board and Management team Proven track record developing salt/kaolin projects and heavily regulated storage projects
Linc Energy, Atlas Iron, Macquarie Roaring40s
Anton RohnerGroup CFO &Secretary
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Tellus’ Strategy - Health Safety and Environment1
• No reported Lost Time Injuries in 5 years
• Successfully passed 2 years of SAI Global audits
-AS 4801: OHS, ISO 9001: Quality and ISO 14001:
Environmental
• Three site visits by the NT Government Regulators
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Community and Stakeholder Engagement
Community consultation
Supporting jobs (WA TO’s)
Supporting jobs (NT TO’s)
Pot. buyers (pit-to port visits)Radio, TV, Newspaper, Online
NT Gov. & Regulator (site visits) TO meetings & site visits
Supporting local business (20+)
Chandler over 30 months engagementSandy Ridge over 18 months engagement
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1 Project Timetable
Activity Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Yr Yr Yr
3/15 6/15 9/15 12/15 3/16 6/16 9/16 12/16 3/17 6/17 6/18 6/19 6/20
San
dy
Rid
ge
Drilling (bulk, resource, water), Pilots (3 products)
Feasibility studies (PFS & BFS)
Approvals
Build stage 1 (storage) and 2 (kaolin)
Commercial negotiations: ECI, waste & kaolin sales
Ch
and
ler
Drilling (water, geotech), Pilots (dry & wet)
Bankable feasibility studies (FEL 3)
Approvals
Build stage 1 (storage surface) & 2 (decline, UG)
Commercial negotiations - ECI, waste and salt sales
PFS (FEL 2) BFS (FEL 3)
PER prep, MLA
9 months 3mo
Kaolin sales
Storage sales
EOI’s, MOU’s
Pilot
EIS prep, MLA
9 months 36 mo (total 45 mo)
Salt sales
Storage sales
9-12 months
9-1 2 months
Binding
EOI’s, MOU’s Binding
Drill
30 September 2015 key date
On track to get regulatory approvals to commence constructionSandy Ridge: Early kaolin sales and cash flowChandler: Early storage sales and cash flow
BFS (FEL 3)
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Tellus is pulling a Project Consortium together:1
Offtake only Equipment and services Project Financing
Australia
South East Asia
Japan, Korea, China
Sales partnership
Mine equipment, village, utility, vehicle supply contracts
ECI: Early contractor involvementEPC: Engineering & construction contracts
O&M: Operations and maintenance contracts
Project equity
Project debt
Trade export schemes
Advantages:• Maximum potential
for financial return& value add
• Prompt salesdeployment -accessto establishedcontacts,warehousing anddistribution
• Transparency, brandrecognition & accessto customers
• Involvement inproduct pricing
• Collaborativedecision makingover control of thebusiness
• Negotiated levels ofrisk & investment
Advantages:• Immediate sales• Low Tellus effort• Minimal investment
in sales network• Minimal riskDisadvantages:• Lowest return• No brand develop.• Lack of customer
access / intimacy• No value add
Preferred role
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1 Opportunity for Involvement Timetable
Activity June 15 Jul 15 Aug 15 Sep 15 Oct 15
Salt Product specification sheet (salt standard and premium)
Independent lab analysis report (1 – 2 kg samples available)
Kaolin Product specification sheet (fine - ceramic, paint)
Independent lab analysis report (1kg -1 ton samples available)
Commercial Due diligence, negotiations, non binding Heads of Agreement (HoA) 30 Aug
Binding HoA, appointment as Consortium partner 30 Sep
Early contractor & offtake involvement, binding detailed offtake agt
Scope Details Interest (Yes/ No)
Salt offtake only Volume, port, quality, term, price, timetable, bankability
Kaolin offtake only ‘’
Both salt and kaolin ‘’
Sales partnership Offtake partnership
Equipment supply Mine equipment, village, utility, vehicle supply contracts
Service supply ECI: Early contractor involvement
Service supply EPC: Engineering & construction contracts
Service supply O&M: Operations and maintenance contracts
Finance supply Finance (equity, debt, export finance)
Areas of opportunity
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Chandler Project
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Strategy - Salt Products2
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▪ Dual revenue business – gives buyers
confidence Project will be around in 25 years▪ Cross selling storage solutions (domestic)▪ Future supply from solar salt limited by getting
regulatory approvals for new operations inenvironmentally sensitive areas
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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Chandler Project – Pit to Port2
Dual revenue business model, proven internationally, Tellus first to market in Asia
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Chandler - SummaryMine life – 29 years (4 + 25 years), rolling terms
Production -salt500,000 tonnes per annum salt, 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
Management Core 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)
Predevelopment - A$10 M
Capex – A$464 M
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Dual revenue gives buyers high level of confidence that the Project will be a reliable producer over life of mine
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2 Chandler - From Exploration to Product Specification Sheet
First drilling program 1,937m Ercosplan - independent German salt experts confirmed viability
Quality assessment and quality control - 370 samples JORC Resource* (309 Million tonnes = 525 year mine life)
* Refer to Chandler – JORC (1 July 14) media releases– Tellus Website, Media) for further details, JORC Table 1, Proximate and Competent Person Statement prepared by Ercosplan (Germany)
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Chandler - From Exploration to Product Specification Sheet
Pilot demonstrates successful production of high grade salt (independent analysis confirms 98.3% NaCl)
Pilot demonstrates successful production of high grade salt
(independent analysis confirms 99.8% NaCl)
Dry salt processing pilot in Germany, feed grade 94.5% NaCl
Wet salt processing pilot project in USA, feed grade 89.5% NaCl
Wet process
NaCl In94.5%
Out98.3%
NaCl In89.5%
Out99.8%
98.3%89.5%
Optical sorter
Dry process
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Chandler - Logistics from Mine to Port2
Project locationCategory Detail – Salt Exports
Containers Bulk salt into 30t retainer with lid
Roads 120t road train along 31 km new haul road to siding
Railway siding 2.9km new Chandler siding next to Darwin to Adelaide line
Railway 7 salt trains / month (23 hours average time from mine to Darwin), closed loop salt train system
Darwin storageTellus transfer station (5 ha) next to Marine Supply Base
Shipping port Rotainer tipped into vessel, 7 Panamax’s per year (70,000t vessel), 2 weeks sail time (5,500km to Tokyo)
Destinationport
Japan, 20t bucket offloads ship into hopper and then into 20t truck which then drives to customer
Near existing infrastructure, no bottlenecks, Darwin is closest port to Asia
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Appendix:
Sandy Ridge Project
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Strategy - Kaolin Products3
World estimated production capacity by main countries (2013) Roskill
Kaolin - Tellus’ competitive advantage
▪ Strong position to meet Asian demand byproviding a guaranteed volume and quality
▪ Perth port – closer to Asian buyers (US, Brazil)▪ Large scale resource – easily scalable▪ Dual revenue business – gives buyers
confidence Project will be around in 25 years▪ Cross selling storage solutions (domestic)
To Shanghai : Perth is ~4,100 km closer than US ports, ~5,900km closer than Brazilian ports~13,300 km closer than Indian ports
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Sandy Ridge (SR) – Mine to Port3
Dual revenue business model, proven internationally, Tellus first to market in Asia
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Sandy Ridge - Project SummaryCategory Detail
Location ▪ 140km WNW Kalgoorlie
Business▪ Dual revenue business:
▪ Kaolin/ waste storage sales
JORC1 ▪ 41 Mt = 1,475 year mine
Life of Mine ▪ 1 yr build +25 yrs op’s
Acts▪ Mine under Mining Act
▪ Storage under Envir. Act
Mine ▪ Open cut
Predevel ▪ $7 m
Capex* ▪ $62 m
Jobs*▪ Build (40-90), operational (18),
indirect (54)
▪ Excludes O&M contractors
3 1 Refer to Sandy Ridge JORC ( 20 June ’14) and Chandler – JORC (1 July 14) media releases* FEL1 Scoping Study Assumptions (DCF Model v2 Mgt Case)
Dual revenue gives buyers high level of confidence that the Project will be a reliable producer over life of mine
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3 Sandy Ridge - From Exploration to Product Specification Sheet
First drilling program 1,864m2nd program - 43 aircore drill hole (JORC resource), 7 geotechnical
holes, 84 bulk sampling air core holes (gather 40 tonnes)
Quality Assessment and Quality Control - 915 samples JORC Resource* (41.3 Million tonnes=1,475 year mine life)
* Refer to Sandy Ridge Kaolin Project - JORC Inferred Resource (20th June 2014 – Tellus Website, Media) for furtherdetails, JORC Table 1, Proximate and Competent Person Statement prepared by Terra Search
24Kaolin samples – 12 tonnes
40 tonnes kaolin clay refined to 12 tonnes product
3 Sandy Ridge - From Exploration to Product Specification Sheet
Ceramic clay
Simple benefaction pilot (40t ROM refined to 12 tonnes product)
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Sandy Ridge - Logistics from Mine to Port3
Project LocationCategory Detail – Kaolin Exports
Containers 1ton bulker bags into 20ft shipping containers
Roads 50 ton road train along 229 km haul road to Kalgoorlie
Railway siding Loaded onto train at existing Kalgoorlie siding
Railway 10 hours average time from Kalgoorlie to Perth, shipping container loaded onto regular freight train rolling stock
Perth storage Qube shipping container yard
Shipping port Container crane loads containers onto container vessel
1ton bulk bags can also be unpacked and loaded loose (8 at a time) into bulk vessel>2 weeks sail time to Tokyo (8,300km)
Destinationport
Japan, container crane offloads containers onto flat bed trucks which then drive to customer
Near existing infrastructure, next to major iron ore mine, no rail/port bottlenecks
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Appendix:
ClayVault Project
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ClayVault Joint Venture (WA) Australia’s only Class V intractable waste disposal facility
WA Governments Intractable Waste Disposal Facility (IWDF)
Maintenance area with firebreak
Surface has not been remediated due to ongoing subsidence test
Sandy RidgeProject
next door
Road to Kalgoorlie
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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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Contact Details
Duncan van der Merwe
Group Managing DirectorE: [email protected]
A: Suite 2, Level 10, 151 Castlereagh StreetSydney, NSW, 2000
T: +61 2 8257 3395 F: +61 2 8233 6199
www.tellusholdings.com.au
Mike Ingram
Sandy Ridge Project leader and Process EngineerSalt and kaolin sales
M: +61 (0) 400 777 157
