Rare earths: not so rare but sought after

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GLOBAL RESOURCES INVESTMENT CONFERENCE STATIONERS’ HALL, CITY OF LONDON TUESDAY-WEDNESDAY, 27-28 SEP 2011 www.ObjectiveCapitalConferences.com Rare earths: not so rare but sought after Gary Billingsley – Great Western Minerals Group

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Objective Capital's Global Resources Investment Conference 2011Stationers' Hall, City of London27-28 September 2011Day 1- Session 3: Strategic metals – the resources everybody wants Speaker: Gary Billingsley, Great Western Minerals Group

Transcript of Rare earths: not so rare but sought after

Page 1: Rare earths: not so rare but sought after

GLOBAL RESOURCESINVESTMENT CONFERENCE

STATIONERS’ HALL, CITY OF LONDON ● TUESDAY-WEDNESDAY, 27-28 SEP 2011

www.ObjectiveCapitalConferences.com

Rare earths: not so rare but sought after Gary Billingsley – Great Western Minerals Group

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Other sponsors & participating organisations:

GLOBAL RESOURCESINVESTMENT CONFERENCE 2011

Lead sponsor:

Media partners:

@Objectivelive

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TSX.V: GWG OTCQX: GWMGF [email protected] www.gwmg.ca

September 27-29, 2011

Objective CapitalGlobal Resources Investment ConferenceLondon and Edinburgh, UK

Rare Earths: Not So Rare, But Sought After…

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Safe HarbourCautionary 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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World Mine Production and Reserves(tonnes REO)

Country Mine Production2010

Reserves

United States - 13,000,000

Australia - 1,600,000

Brazil 550 48,000

China 130,000 (97%) 55,000,000 (48%)

CIS N/A 19,000,000

India 2,700 3,100,000

Malaysia 350 30,000

Other N/A 22,000,000

World Total 134,000 114,000,000

Source: USGS Mineral Commodity Summaries, January 2011

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Approximately 200 of 302 Global REE Exploration Projects Shown Below:

Source: TMR, GWMG

Global RE Exploration 2011

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1. Adjusted to reflect 12 month allocation2. Includes ferro-alloys of rare earths (RE > 10%)Sources: Chinese Ministry of Commerce, IMCOA

Chinese Export Quota History (tonnes REO)

1st Half 2nd Half Total AGR (%) ROW Demand

Surplus/Shortfall

2005 - - 65609 - 48000 17609

2006 - - 61821 -6% 53000 8821

2007 27811 32263 60074 -3% 55000 5074

2008 30991 16458 569391

-5% 54000 2939

2009 21728 28417 50145 -12% 25000 25145

2010 22282 7976 30258 -40% 55000 -24742

2011 14446 157382 30184 -0.2% 45000 -14816

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Source: IMCOA

Forecast Demands for 2015 (tonnes REO)

REE Application

REO 2010 Demand 2015f  Demand

Permanent Magnets

Nd, Pr, Dy, Tb, Sm

 26,000 40,000

NiMH Batteries,

metallurgicalLa, Ce, Pr, Nd  22,000 36,000

Catalysts Ce, La, Pr, Nd 24,500 25,500

PhosphorsEu, Y, Tb, La, Dy, Ce, Pr, Gd

8,500 12,500

Polishing Powders

Ce, La, Nd, mixed

19,000 25,000

Glass Additives

Ce, La, Nd, Er, Gd, Yb

11,000 10,000

Ceramics, other

Mixed 14,000 21,000

Total   125,000 170,000

Chinese Demand

70,000(56%) 120,000 (70%)

ROW Demand 55,000 50,000 8

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Global 2015 Supply/Demand Imbalance Supply Demand

Oxide t REO t REO Imbalance

La2O3 49,930 44,030 5,900CeO2 80,560 63,750 16,810Pr6O11 10,830 7,480 3,350Nd2O3 33,570 33,490 80Sm2O3 2,910 1,190 1,720Eu2O3 510 680 -170Gd2O3 2,820 2,550 270Tb4O7 360 510 -150Dy2O3 1,380 2,040 -660Er2O3 900 1,350 -450Y2O3 13,515 12,750 765

Ho-Tm-Yb-Lu 1,500 170 1,330

Totals 198,785 169,990 28,795

Source: IMCOA

Shortage, Surplus, Large surplus

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2015 Regional Imbalances

       

China ROW GlobalOxide Imbalance Imbalance Imbalance

       

La2O3 -886 6,790 5,904CeO2 3,986 12,821 16,807Pr6O11 2,444 904 3,348Nd2O3 389 -311 78Sm2O3 1,124 599 1,723Eu2O3 -178 6 -172Gd2O3 643 -377 266Tb4O7 -29 -125 -154Dy2O3 -137 -525 -662Y2O3 4,140 -3,376 764

Total 11,496 16,406 27,902*

Source: IMCOAShortage, Surplus, Large surplus*not including Er, and Ho-Lu

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1. Processing: • Producing Rare Earth metals and alloys at

Less Common Metals (LCM) in the U.K.

• Producing alloys at Great Western Technologies Inc. (GWTI) in Michigan

• Separating RE in South Africa

2. Mining: • Steenkampskraal Mine in South Africa in

production 2013

3. Exploration:

• GWMG actively exploring and developing properties in North America and South Africa

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GWMG Strategy: Mines to Markets

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RarecoLCM GWTIExploration

Hoidas LakeDouglas RiverRed Wine, Canada

Birkenhead, U.K Troy, MichiganUSA

Former-producing Steenkampskraal Mine, SA

GWMG Corporate Structure

SKK(Steenkampskraal)

100% 100%

100%Various %

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74%

Great Western GQD

Rare Earth Materials Co. Ltd.*

75%

JV Separation Plant, SA*details being finalized

Canada

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EXPLORATION

MINING

PROCESSING

SEPARATION

METAL MAKING

BY-PRODUCT SALES

REO SALES

LCM/GWTI ALLOY PROD’N

• A rare earth mine alone is not of much use to a magnet maker

• Enterprise profitability increases with each stage of processing

RE METAL SALES

ALLOY SALES

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GWMG Integrated Production Model

MAGNET MAKERS

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PROCESSING: World Class Today at Less Common Metals

• Located in Birkenhead, England

• LCM, a world class producer trading globally:• European Union 60%• Japan, China including Taiwan 30%• United States 10%

• Focused on Permanent Magnet industry

• Supplies 20% of the world’s Samarium Cobalt Alloy

• Significant supplier of NdFeB alloys

• Supplies US and EU Aerospace Industry with special alloys

• 20 years of high quality, profitable production

• LCM products end up in Swiss watches, EU Aerospace and Guidance Systems, electric hand tools, and Automobiles

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• 100% capacity expansion driven by forecast demand from major customers in Europe and Japan seeking NdFeB alloy (note agreements with Aichi Steel Corp. & VAC)

• New state of the art facility now being developed to increase capacity to 2,000 tonnes per annum RE alloy production

• First special casting furnace ordered and scheduled to have saleable product by second half 2011-2nd furnace in 2012

• First phase of metal-making to be located at LCM

• Processing capacity matches REE distribution of planned output from Steenkampskraal for La, Nd, Pr. Sm, Dy

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Global Expansion for LCM

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• LCM and GWT will consume RE oxides, metals and fluorides for metal and alloy production

• LCM currently operates a co-reduction process for converting samarium oxide to samarium cobalt metal alloy and we will rebuild facilities to produce samarium metal.

• LCM is developing a fused salt electrolysis process for oxides from South Africa to produce lanthanum, neodymium and praseodymium metal

• LCM is developing a process to produce dysprosium, terbium and yttrium metal using calciothermic reduction of rare earth fluorides

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Producing Metals and Alloys

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Samarium Cobalt by Co-Reduction

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• Located in Troy, Michigan, USA

• Strategic asset for revitalization of the Rare Earth industry in the United States

• Working with DARPA on aerospace “Super Alloy” R+D

• Versatile production capacity including:

• Permanent magnet alloys

• NiMH alloy for rechargeable batteries

• “Super Alloy” production for aerospace materials

• Hydriding capability for solid-state hydrogen-storage alloys, both rare earth and transition metal types

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World Class at Great Western Technologies

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• Former operating mine located 70 kilometers north of Vanrhynsdorp in the Western Cape Province of South Africa

• Excellent infrastructure, access to the site by paved and gravel roads

• Close proximity to rail and sea-port

• Pro-development governments with strong interest in Rare Earth industry

• 474 hectare property

• Mining permit received June 2010; National Nuclear Regulator (“NNR”) approvals received May 2011

MINING: Steenkampskraal SA History

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1919

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Mining: Steenkampskraal Attributes

• One of the highest grade RE deposits known at 16.74% REO

• Significant supply of mined feedstock already at surface

• Favourable Metallurgy: The technology for REE extraction from Monazite is well established allowing for more rapid approval of process and plant design

• Minimum 10-year mine life

• Nuclear License allows storage of radioactive material including thorium

• Low capital cost

• Planned exploration program has a high probability of increasing the known resources on and near the property

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Steenkampskraal Strategy Execution• Feasibility/EPCM work well underway

• Discussions in progress for accessing additional monazite from 3rd parties that can be processed at Steenkampskraal

• Agreement reached with Ganzhou Qiandong Rare Earth Group Ltd. (“GQD”), an experienced separator and metal maker, to construct and operate a separation plant in South Africa under a joint venture

• Discussions in progress for offtake of material not required by LCM/GWTI

• Mill/Separation plant construction targeted to commence Q1 2012 with completion by Q4 2012

• GWMG goal is first commercial Steenkampskraal REO production of in Q1 2013

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MINING: Steenkampskraal SA

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2013: Projected Processing Outputs (metric tons REO)

REO REO Production*

REO to LCM/GWTI

Converted toREE Metal Alloy Produced

Lanthanum 1,084 75 64 30

Cerium 2,334 0 0

Praseodymium 250 250 207 690

Neodymium 834 834 714 1,964

Samarium 125 80 69 230

Europium 4 0 0

Gadolinium 83 0 0

Terbium 4 0 0

Dysprosium 34 34 29 417

Holmium 2 0 0

Erbium 4 0 0

Thulium 3 0 0

Ytterbium 3 0 0

Lutetium 0 0 0

Yttrium 250 8 6 8

TOTAL (Tonnes) 5,014 1,281 1,089 3,339

*Based on Rareco Historical ResourceEstimate – not 43-101 compliant

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GWMG Exploration Projects:

• Hoidas Lake, Saskatchewan, Canada• 2009 NI 43-101 shows 2.5 million tonnes Measured & Indicated

• Enriched in Nd

• Significant progress on metallurgy; mini pilot plant test in progress

• Being evaluated for 2015 production

• Douglas River, Saskatchewan, Canada• 100% HREE + Y in xenotime

Joint Venture Projects:

• Red Wine REE Project with Search Minerals, Labrador, Canada• 35%+ HREE + Y

Heavy Rare Earth/Permanent Magnet Focus

EXPLORATION: GWMG Projects3

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GWMG Corporate Strategies/GoalsProcessing:• Undertake 100% expansion of Less Common Metals in two

phases

• Continue to establish GWTI as an important part of the RE supply chain in the USA

• Begin construction of leaching plant and separation plant in South Africa Q1 2012

Mining:• Complete mine refurbishment and commence

mining/stockpiling Q1 2012

• Achieve commercial production in Q1 2013

• Conclude arrangements for 3rd party material and evaluate expansion of Steenkampskraal production

Exploration:• Continue to advance Hoidas Lake project in Canada

• Continue exploration of HREE-enriched projects

• Increase resource at Steenkampskraal

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GWMG Corporate Strategies/GoalsCorporate:• To be among the very first fully integrated suppliers of RE

oxides, metals and alloys outside of China• To continuously identify expansion opportunities • To create certainty of supply for existing and potential

customers

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GWMG Overview

Shares Outstanding / Fully Diluted (as at September 22, 2011) 383.4 mm / 471.5 mm

Share Price (as at September 22, 2011) $0.72

52 week High / Low $1.23 / $0.32

Market Cap (as at September 22, 2011) $276 million

Cash on hand (as at September 22, 2011) $1.2 Million

Insider Holdings / Fully Diluted (est.) 1.9% / 12.0%

Institutional Holdings (est.) 39%

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