An Exchange-Listed Independent Fluorspar Producer...• fluorocarbons (eg., HFCs, such as Freon tm...

16
An Exchange-Listed Independent Fluorspar Producer December 2011

Transcript of An Exchange-Listed Independent Fluorspar Producer...• fluorocarbons (eg., HFCs, such as Freon tm...

Page 1: An Exchange-Listed Independent Fluorspar Producer...• fluorocarbons (eg., HFCs, such as Freon tm gas and other refrigerants) • pharmaceuticals, such as fluoxetine (prozac) ...

An Exchange-Listed Independent Fluorspar Producer

December 2011

Page 2: An Exchange-Listed Independent Fluorspar Producer...• fluorocarbons (eg., HFCs, such as Freon tm gas and other refrigerants) • pharmaceuticals, such as fluoxetine (prozac) ...

Legal Disclaimer

The contents of this presentation have not been approved by an authorised person within the meaning of Section 21 of theFinancial Services and Markets Act 2000. This presentation is made to you solely in order to provide general informationon Fluormin plc (the “Company”) and does not constitute or contain any invitation, solicitation, recommendation or offer toany person to subscribe for, otherwise acquire, or dispose of any securities in the Company or advise persons to do so inany jurisdiction and is not soliciting any action based upon it.

The contents of this presentation have not been verified by the Company. No undertaking, representation, warranty orother assurance, express or implied, is made or given by or on behalf of the Company or any of its directors, officers,partners, employees, agents or advisers or any other person as to the accuracy or completeness of the information oropinions contained in these slides or this presentation and no responsibility or liability is accepted by any of them for anysuch information or opinions or for any errors, omissions, misstatements or for any other communication written orotherwise, nor does the Company assume any obligation to update this presentation or correct any inaccuracies whichmay become apparent.

The statements contained in these slides and the presentation include "forward looking statements" that expressexpectations as to future events or results. Forward looking statements involve a number of risks and uncertainties and theCompany cannot give assurance that such statements will prove to be correct. In particular, (1) the Company may beadversely affected by changes in economic, political, administrative, taxation or other regulatory factors, in South Africa,Kenya or Tunisia; (2) production from the Company’s operations and assets may be lower than expected or non-existent;(3) the Company may be unable to secure control over cash flow from its operations as minorities are involved in each; and(4) no assurance can be made with respect to the future price of fluorspar.

The contents of this presentation are strictly confidential and are being supplied to you solely for your private informationand may not be reproduced, re-distributed or passed to any other person or published in whole or in part for any purpose,including outside of the UK where the distribution of this presentation may violate securities laws.

Page 3: An Exchange-Listed Independent Fluorspar Producer...• fluorocarbons (eg., HFCs, such as Freon tm gas and other refrigerants) • pharmaceuticals, such as fluoxetine (prozac) ...

What is fluorspar?

– Acidspar (acid grade) - Premium Priced

• contains greater than 97% CaF2

• key feedstock for fluorochemical industry

• 68% of fluorspar production worldwide

– Metspar (metallurgical grade) - Inferior Product

• contains 85-96% CaF2

• used as a flux in the steel industry

Fluorspar = Calcium Fluoride (CaF2) = Main

Source of Fluorine (F)

Fluormin produces only acid grade fluorspar

Page 4: An Exchange-Listed Independent Fluorspar Producer...• fluorocarbons (eg., HFCs, such as Freon tm gas and other refrigerants) • pharmaceuticals, such as fluoxetine (prozac) ...

What is fluorspar used for?

HF USES

• fluoropolymers (eg., Teflontm)

• fluorocarbons (eg., HFCs, such as Freontm gas and

other refrigerants)

• pharmaceuticals, such as fluoxetine (prozac)

• aluminium fluoride (AlF3) - an ingredient in aluminium

Almost all acid grade fluorspar is used in the production of hydrofluoric acid (HF).

Page 5: An Exchange-Listed Independent Fluorspar Producer...• fluorocarbons (eg., HFCs, such as Freon tm gas and other refrigerants) • pharmaceuticals, such as fluoxetine (prozac) ...

Global fluorspar market

• China could become net importer within 5 years as its internal demand grows

• Freely-traded international market is estimated at about 850,000 tpa

• Fluorspar identified by EU and USA as a critical mineral - both consume more than they produce

Source: Roskill Information Services Inc.Source: USGS, Mining Journal Annual Review; Roskill Information Services Inc.

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

1950 1960 1970 1980 1990 2000 2010

kt

Production

Others

Russia

S. Africa

Mongolia

Mexico

China

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

1950 1960 1970 1980 1990 2000 2010 2020f 2030f

kt

Demand

Page 6: An Exchange-Listed Independent Fluorspar Producer...• fluorocarbons (eg., HFCs, such as Freon tm gas and other refrigerants) • pharmaceuticals, such as fluoxetine (prozac) ...

Secular Bull Market

• China, China, China

– Rare Earth Comparison - Exports of Fluorspar Shrinking as Domestic Economy Consumes More Production

– Stricter Environmental Regulations Closing Small Mines

• BRIC Growth

– Demand for Fluorine Consuming Products

– A/C, Refrigerators, Cars, etc.

• New Production

– Years Away / Large Lead Time / Capital Intensive

– Vietnam, Canada, Sweden, South Africa

Page 7: An Exchange-Listed Independent Fluorspar Producer...• fluorocarbons (eg., HFCs, such as Freon tm gas and other refrigerants) • pharmaceuticals, such as fluoxetine (prozac) ...

Source: FluorOne Trading

Acid Grade Price (US$)

0

100

200

300

400

500

600

7001

99

6

199

7

199

8

199

9

200

0

200

1

200

2

200

3

200

4

200

5

200

6

200

7

200

8

200

9

201

0

201

1

US

D p

er

To

nn

e

Page 8: An Exchange-Listed Independent Fluorspar Producer...• fluorocarbons (eg., HFCs, such as Freon tm gas and other refrigerants) • pharmaceuticals, such as fluoxetine (prozac) ...

Fluormin Overview

• Formerly known as Maghreb Minerals - restructured and base metal assets sold to Glencore

• Now a major producer and trader of fluorspar

FLOR : AIM Strong Balance Sheet Fluorspar producer

Production

and Trading Profile

Production Trading

Witkop (SA) 115,000*

Kimwarer (Kenya) 115,000+

FluorOne Trading 100,000^

* Witkop is ramping up to capacity of 135,000 tpa through the present fiscal year ending June 2012

+ Kenya Fluorspar Company is owned 20% by the Company

^ targeted annual tonnage

Page 9: An Exchange-Listed Independent Fluorspar Producer...• fluorocarbons (eg., HFCs, such as Freon tm gas and other refrigerants) • pharmaceuticals, such as fluoxetine (prozac) ...

2008

Firebird Acquires Initial Stake in Maghreb

Firebird Acquires Stake in Kenya Fluorspar Co.

2009 Jan-June 2011

July 2011 to Present

Today

Firebird Led Financings

Firebird Takeover Bid for Sallies

Fluormin Toe Hold interest in Sallies

Agreement to acquire Firebird’s Holdings

US$10,000,000 Financing

FluorOne Trading Business Est.

US$6,000,000 Financing

Closing of Sallies TOB / KFC and Name Change

FIREBIRD

24% Maghreb

20% of KFC

25% Sallies

FIREBIRD

32% Maghreb

20% KFC

74% Sallies

2010

MAGHREB

11% Sallies

Building Fluormin

MAGHREB

49% FluorOne

11% Sallies

FLUORMIN

49% FluorOne

20% KFC

100% Sallies

FLUORMIN

115,000+ tpa(100% Sallies)

115,000+ tpa (20% KFC)

100,000+ tpa(49% FluorOne)

A MAJOR PRODUCER AND TRADER OF FLUORSPAR

+ Target volume or plant capacity, as the case may be

Page 10: An Exchange-Listed Independent Fluorspar Producer...• fluorocarbons (eg., HFCs, such as Freon tm gas and other refrigerants) • pharmaceuticals, such as fluoxetine (prozac) ...

Sallies Limited (100%)

• Witkop mine

– Proved reserves of 14.8 Mt @ 11.8%

– 59 Mt resource @ 13.4%

– Capacity 135,000 tpa

• Production for Fiscal 2011

– Expected to be 115,000 tpa to 125,000 tpa during

phased restart as capacity is reached

Takeover Bid for 100% - Successful Vote

Page 11: An Exchange-Listed Independent Fluorspar Producer...• fluorocarbons (eg., HFCs, such as Freon tm gas and other refrigerants) • pharmaceuticals, such as fluoxetine (prozac) ...

Kenya Fluorspar (20%)

• Operating since 1997 under same licence

• High grade ore - 31% CaF2

• Capacity 115,000 tpa+

• Low cost of production

• Low trucking costs to Mombasa

Private Company - Governed by Shareholder Agreement

Low Cost Producer

Page 12: An Exchange-Listed Independent Fluorspar Producer...• fluorocarbons (eg., HFCs, such as Freon tm gas and other refrigerants) • pharmaceuticals, such as fluoxetine (prozac) ...

Tunisian Assets (100%)

• Base metal offtake contracts

• Properties sold to Glencore in 2011 (US$10m)

• Offtake rights to all future fluorspar by-product

• Potential for 20,000 to 40,000 tpa

• Zriba-Guebli former mine

• 1967–92: 30,000 - 40,000 tpa production

• Historic grades ~25%

• 2012 drilling to target 1m tonnes of resource

Exploration and Development Assets Offer Upside

A Restored democracy

Page 13: An Exchange-Listed Independent Fluorspar Producer...• fluorocarbons (eg., HFCs, such as Freon tm gas and other refrigerants) • pharmaceuticals, such as fluoxetine (prozac) ...

FluorOne Trading (49%)

• Office in NY

• 51% controlled by Jeffrey Kofsky

• recognised as a leading trader of fluorspar

• marketing director of Fluormin

• Full-Service offering to Customers

• Targeting 100,000 tpa of traded product

Internationally Recognized Expertise

Trading Chinese Exports to EU and USA

Page 14: An Exchange-Listed Independent Fluorspar Producer...• fluorocarbons (eg., HFCs, such as Freon tm gas and other refrigerants) • pharmaceuticals, such as fluoxetine (prozac) ...

Management / Board

Mark Bolton, Co-CEO & Director

• Former CFO of First Quantum and Paladin Energy;

Former executive, Mineral Securities; Former

Director E&Y Corporate Finance

Al Gourley, Co-CEO & Director

• Former Managing Partner, Fasken Martineau, SA,

& Chair of Africa Group

Jeffrey Kofsky, Marketing Director

• Principal, Fluorone Trading; Former SVP, CMC

Cometals, a division of Commercial Metals Co. (20

years as a trader of fluorspar)

Nicholas Davidoff, Chairman

• Firebird Global Fund, Senior Analyst

Muriel Dube

• Corporate Finance Executive, Investec Bank; Director,

Bidvest Group Limited (JSE) & Enviroserv

Brian Kiernan

• President, Moydow Resources / Rockfield Oil & Gas;

Former President, Moydow Mines (TSX)

Sean Murray

• Former managing director of Borax Europe Ltd., Chief

Executive of Rio Tinto Borax

James Passin

• Firebird Global Fund, Founding Partner

EXECUTIVES NON-EXECUTIVES

Gavin Clarke, Mine Manager, Witkop

• Former Mine Manager, Vergeneog

Page 15: An Exchange-Listed Independent Fluorspar Producer...• fluorocarbons (eg., HFCs, such as Freon tm gas and other refrigerants) • pharmaceuticals, such as fluoxetine (prozac) ...

Summary

• Demand to grow modestly; supply an issue without new production

• China expects to consume more and export less

• Geographically diverse portfolio with fluorspar assets in South Africa, Kenya and Tunisia

• Rounded development curve - production, development and exploration assets

• Strong balance sheet

• Ambitious management team

Important industrial mineral - fluorspar - critical list in US and EU

Page 16: An Exchange-Listed Independent Fluorspar Producer...• fluorocarbons (eg., HFCs, such as Freon tm gas and other refrigerants) • pharmaceuticals, such as fluoxetine (prozac) ...

Photographs of Witkop