Anglo Pacific Group PLC

Transcription

1 Corporate Presentation September 2014

2 Important disclaimer Certain statements in this presentation, other than statements of historical fact, are forward-looking statements based on certain assumptions and reflect the expectations of (the Company ) and views of future events. Forward-looking statements (which include the phrase forward-looking information within the meaning of Canadian securities legislation) are provided for the purposes of assisting the reader in understanding the Company s financial position and results of operations as at and for the periods ended on certain dates, and to present information about management s current expectations and plans relating to the future. Readers are cautioned that such forward-looking statements may not be appropriate for other purposes than outlined in this presentation. These statements may include, without limitation, statements regarding the operations, business, financial condition, expected financial results, cash flow, requirement for and terms of additional financing, performance, prospects, opportunities, priorities, targets, goals, objectives, strategies, growth and outlook of the Company including the outlook for the markets and economies in which the Company operates, costs and timing of acquiring new royalties, mineral reserve and resources estimates, estimates of future production, production costs and revenue, future demand for and prices of precious and base metals and other commodities, for the current fiscal year and subsequent periods. In addition, statements relating to reserves or resources are forward looking statements, as they involve implied assessment, based on certain estimates and assumptions, that the resources and reserves described can be profitably produced in the future. Forward-looking statements include statements that are predictive in nature, depend upon or refer to future events or conditions, or include words such as expects, anticipates, plans, believes, estimates, seeks, intends, targets, projects, forecasts, or negative versions thereof and other similar expressions, or future or conditional verbs such as may, will, should, would and could. Forward-looking statements are based upon certain material factors that were applied in drawing a conclusion or making a forecast or projection, including assumptions and analyses made by the Company in light of its experience and perception of historical trends, current conditions and expected future developments, as well as other factors that are believed to be appropriate in the circumstances. The material factors and assumptions upon which such forward-looking statements are based include: the general economy is stable; local governments are stable; interest rates are relatively stable; equity and debt markets continue to provide access to capital; the ongoing operations of the properties underlying the Company s portfolio of royalties by the owners or operators of such properties in a manner consistent with past practice; the accuracy of reserve and resource estimates, grades, mine life and cash cost estimates; the accuracy of public statements and disclosures made by the owners or operators of such underlying properties; no material adverse change in the market price of the commodities that underlie the Company s portfolio of royalties and investment interests; no adverse development in respect of any significant property in which the Company holds a royalty or other interest; the successful completion of new development projects; the accuracy of publicly disclosed expectations for the development of underlying properties that are not yet in production; planned expansions or other projects within the timelines anticipated and at anticipated production levels; and title to mineral properties. Forward-looking statements are not guarantees of future performance and involve risks, uncertainties and assumptions, which could cause actual results to differ materially from those anticipated, estimated or intended in the forward-looking statements. By its nature, this information is subject to inherent risks and uncertainties that may be general or specific and which give rise to the possibility that expectations, forecasts, predictions, projections or conclusions will not prove to be accurate; that assumptions may not be correct and that objectives, strategic goals and priorities will not be achieved. A variety of material factors, many of which are beyond the Company s control, affect the operations, performance and results of the Company, its businesses and investments, and could cause actual results to differ materially from those suggested any forward-looking information. For additional information with respect to such risks and uncertainties, please refer to the Risk Factors section of our most recent Annual Information Form available on and the Group s website and also to the Principal risks and uncertainties section of our most recent Annual Report, which is also available on our website. If any such risks actually occur, they could materially adversely affect the Company s business, financial condition or results of operations. The reader is cautioned to consider these and other factors, uncertainties and potential events carefully and not to put undue reliance on forward-looking statements.this presentation also contains forward-looking information contained and derived from publicly available information regarding properties and mining operations owned by third parties. The Company s management relies upon this forwardlooking information in its estimates, projections, plans, and analysis. Although the forward-looking statements contained in this presentation are based upon what the Company believes are reasonable assumptions, there can be no assurance that actual results will be consistent with these forward-looking statements. The forward-looking statements made in this presentation relate only to events or information as of the date on which the statements are made and, except as specifically required by law, the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events. This presentation contains reference to past prices of and/or yields on the Company s shares. Readers are reminded that past performance cannot be relied on as a guide to future performance. As a royalty holder, the Company often has limited, if any, access to non-public scientific and technical information in respect of the properties underlying its portfolio of royalties, or such information is subject to confidentiality provisions. As such, in preparing this presentation, the Company has relied upon the public disclosures of the owners and operators of the properties underlying its portfolio of royalties, as available at the date of this presentation. This presentation is for informational purposes only. This presentation is not a prospectus and does not constitute or form part of any offer, invitation or recommendation in respect of securities, or an offer, invitation, recommendation to sell, or a solicitation of any offer to buy, securities. 1

3 Anglo Pacific corporate overview» The only natural resource royalty company listed in London» Dual listing: LSE (Premium Listing) and TSX» Strong existing asset base from which to develop the business» Portfolio includes royalties on six operations that are producing» Diversified commodity exposure across coking coal, iron ore, gold, vanadium and uranium» Key royalty asset in Kestrel, a Tier 1 coking and thermal coal mine in Australia operated and majority-owned by Rio Tinto» New royalty acquisitions and Kestrel expected to drive royalty income growth over the coming years Corporate Information Ticker APF (LSE), APY (TSX) Share price (1) 161p Market capitalisation (2) 184m Cash (3) 14m Revolving credit facility (undrawn) 9m 2013A Dividend per share 10.2p Dividend yield (4) 6.3% Shareholders (5) Directors 9.0% Liontrust Investment Partners 6.2% Aberforth Partners 5.6% Schroder Investment Management 4.7% AXA Investment Management 4.7% T.Rowe Price 1.2% Total number of shareholders ~2,500 (1) Bloomberg (as at market close on 9 September 2014) (2) Based on ~116.4m ordinary shares outstanding (as at 9 September 2014) (3) Anglo Pacific H results announcement (as at 30 June 2014) (4) Based on 2013A dividend and market close on 9 September 2014 (5) Director holdings as disclosed to the Group as of 12 September, Substantial holdings as per Group notifications of interests of 3% or more in the share capital of the Company as of 6 June, T.Rowe Price holdings as per RDIR research report dated 4 June

4 Anglo Pacific investment highlights 12-year track record of shareholder dividends Potential for higher returns vs. precious metal royalty strategies Focus on bulk materials, base metals and energy will opportunistically consider other commodities Overhead costs decoupled from royalty income growth Strong foundation with existing royalty portfolio Experienced management opening up new investment opportunities To create a leading international diversified royalty company M I S S I O N S T A T E M E N T 3

5 Royalties: Lower risk & lower volatility» In contrast to mining companies, most royalty investments have limited direct exposure to:» Operating cost inflation» Capex escalation» Royalty investments are generally less sensitive to commodity price volatility than mining companies» Diversification targeted through exposure to projects in different commodities and jurisdictions Royalty Companies vs. Copper Miners: Margin Change (per pound of copper) (1, 2) Copper Price: $4.00 /lb Royalty Co. s change in margin: ~(17%) Copper Price: $3.32 /lb Copper miner cash margin: $2.73 /lb Miner s change in margin: ~(40%) Copper miner cash margin: $1.64 /lb Copper miner C1 cash cost: $1.27 /lb ( 1) Copper miner C1 cash cost: $1.68 /lb (1) (1) Wood Mackenzie - July 2014, based on Copper Mine Composite Cost Leagues (2) All figures presented for indicative purposes only. Royalty Co. margin assumes constant deductibles 4

6 Royalties: Cash returns & additional upside potential» Royalty companies can generate cash yields for shareholders unlike holding ETFs or physical metal» Royalty companies have a relatively low and stable overhead cost base» Potential to participate in commodity price upside» Upside optionality of the royalty model due to increased mine production and mine life / oil & gas field extensions Anglo Pacific s Historical Operating Margin Operating Expenses Cash Operating Margin Revenue Growth Via: Royalty acquisitions Production ramp-up at current portfolio Higher dividends Further royalty acquisitions 5

7 Bringing a diversified commodity royalty portfolio into the mainstream» Within the metals & mining universe, coal, iron ore and copper accounted for 50%, 19% and 9% of global production (by value) respectively vs. 9% for gold (1) 13%» Bulks and base metals projects are capital intensive and under significant cash constraints due to: 9%» Commodity price softening» Efforts to de-leverage balance sheets 9% 2013 Global Mining Production by Value (%) 50%» Capex and cost overruns» Royalties and streaming account for a small proportion of overall mining investment: 1.1% in 2012 (2) 19%» First mover advantage gives Anglo Pacific the potential to pursue attractive assets and acquire secondary royalties» In addition, Anglo Pacific is currently evaluating oil and gas royalties as well as mining infrastructure royalty opportunities Coal Iron Ore Gold Copper Other (1) Global production by value during H Global Mining Perspective, Arctic Cluster of Raw Materials Conference, IntierraRMG report (September 26, 2013) (2) Three things you need to know about alternative financing in the mining industry, PWC (2013) 6

8 Strategy for growth: Sourcing new royalties Financing for growth» Alternative forms of financing are increasingly popular vs. equity fundraisings in the current cash constrained commodity sector» Anglo Pacific aims to provide the last dollar required for companies to achieve economic production» Providing an alternative form of capital to assist with the financing of asset purchases» Providing capital to refinance onerous debt obligations Providing liquidity» Natural resource assets often have existing royalties held by the original founding shareholders who require liquidity solutions (e.g. the Maracás royalty acquisition)» Opportunity to acquire existing royalties at attractive prices Monetising hidden royalty assets» Disposal for cash of existing royalties held by large miners often preferred in order to enhance the stock market rating of the company The company is actively progressing a number of prospective royalty deals 7

9 Anglo Pacific s approach to royalty acquisitions Commodity:» Focused on bulk materials, base metals and energy» Opportunistically consider other commodities, as well as royalties on ports and rail infrastructure Asset specific considerations:» Management s operating track record» Profit margin & position on the industry cost curve» Counterparty risk» Jurisdictional risk» Compliance with the Group s corporate social responsibility policy Valuation considerations:» Detailed due diligence on mine production profile» Site visits by technical team and independent technical advisors» Production assumptions based on existing mineable reserves, resources conversion assumptions evaluated on case by case basis» Consider other factors such as geology, infrastructure, and permitting which could impact production volumes or mine life Disciplined approach to investments 8

10 Key royalty acquisition characteristics Near-term cash flow generation Strong operational management teams Maracás Mine Established natural resource jurisdictions High quality, long-life assets Portfolio diversification Accretive to EPS and CFPS operated by Production and exploration upside 2% NSR Royalty US$25 million June 2014 Brazil Recent Maracás royalty acquisition demonstrates key acquisition characteristics 9

11 Royalty portfolio expansion to drive dividend growth Current Dividend Yield Compares Favourably to Peers (2013A Dividend Yield) (1) Committed to maintaining the dividend per share, with a view to increasing it in the longer term (1) Company dividend yield calculated as 2013 dividend divided by share price as of 9 September Index yields as of 9 September Bloomberg, company filings 10

12 Asset Overview Annual Results

13 Early-stage Development Producing Geographic and commodity exposure across principal royalty assets Royalty Commodity Operator Location Royalty type and rate (1,2,3) 1 Kestrel Coking & thermal coal Rio Tinto Australia 7 15% GRR 2 El Valle-Boinás / Carlés ( EVBC ) Gold, copper and silver Orvana Minerals Spain 2.5 3% NSR 8 3 Maracás Vanadium Largo Resources Brazil 2% NSR Four Mile Uranium Quasar Resources Australia 1% NSR Amapá Iron ore Zamin Ferrous Brazil 1% GRR Tucano Salamanca Isua Iron ore Uranium Iron ore Beadell Resources Berkeley Resources London Mining Brazil Spain Greenland 1% GRR 1% NSR 1 1.4% GRR Producing royalties 9 Pilbara Iron ore BHP Billiton Australia 1.5% GRR Development royalties Early-stage royalties 10 Ring of Fire Chromite Cliffs Natural Resources Canada 1% NSR 11 Dugbe 1 (4) Gold Hummingbird Resources Liberia 2 2.5% NSR (1) Please refer to 2013 Annual Report for further detail on the Royalty type and rate for Kestrel, Tucano, EVBC, Isua, and Dugbe 1 (2) GRR Gross Revenue Royalty (3) NSR Net Smelter Return (4) Dugbe 1 to become a royalty upon the receipt of a mining license 12

14 Principal royalty assets royalty portfolio breakdown 13% 5% 5% 3% 3% 9% 8% 8% 16% 20% Commodity Exposure 59% 11% Geographic Exposure 66% Exposure by Stage of Production 75% Coal Iron Ore Gold Other Australia Brazil Greenland Producing Early-stage Spain Liberia Canada Other Development (1) As percentage of net assets as of 30 June

15 Kestrel royalty, Rio Tinto, Australia Historical Kestrel Royalty Income (GBP millions) Forecast Cost Curve Position (1) (C1 cash cost, US$/tonne) US$200 US$175 US$150 US$125 US$100 US$75 US$50 US$25 - Kestrel Quartile 1 Quartile 2 Quartile 3 Quartile 4 Cumulative production (million tonnes)» A Tier 1 coking and thermal coal mine in Australia operated and majority-owned by Rio Tinto» APG royalty lands cover a portion of Rio Tinto s licensed mining area» Recently completed a US$2bn capex programme to extend the mine life and increase production capacity (2)» Royalty terms: 7% of value up to A$100/tonne, 12.5% of the value over A$100/tonne and up to A$150/tonne, 15% thereafter (3) (1) Wood Mackenzie forecasts as of August AUD:USD FX assumptions of Based on Coal Costs Benchmarking seaborne export metallurgical cost curve (2) Kestrel US$2bn capex program completion and production commencement announced by Rio Tinto on 12 July 2013 (3) Royalty rate set by the Queensland Government. Anglo Pacific has an effective 50% ownership of this royalty 14

16 Anglo Pacific Update Annual Results

17 Kestrel information rights Agreement summary» As announced on August 18, 2014, Anglo Pacific entered into an agreement with Kestrel Coal Pty Ltd, for the provision of certain information in respect of the Kestrel coal mine (1)» Enhanced visibility of expected future production from key royalty» Historical information to be provided on a quarterly basis» Invoiced payable tonnes (including product mix)» Royalty payable» Split between the public and the private royalty payable» Forecast information» Estimated private royalty payable for the next quarter» Forecast production tonnages, split on a public and private royalty basis, for the next four quarters Forecast information provides increased visibility on expected Kestrel royalty income (1) Please refer to endnote (i) 16

18 Portfolio update: Newly producing royalties Maracás, Vanadium, Brazil (Largo Resources) (1)» Acquired for US$22 million in cash, up to US$3 million in milestone payments, and 500k warrants in June 2014 (2)» Estimated 29 year mine life (to which royalty area relates)» First production achieved on August 2, 2014» First shipment of V 2 O 5 made on September 2, 2014 Four Mile, Uranium, South Australia (Alliance Resources)» First production achieved on April 4, 2014» 685,501 lbs of uranium oxide concentrate produced up and until August 1, 2014» First sales expected post mid-september 2014 with royalty payments expected to commence shortly thereafter (3)» Largo targeting Phase 1 nameplate capacity of 9,600 tonnes of V 2 O 5 equivalent within 12 months (1) Please refer to endnote (ii) (2) US$1.5 million payable in cash when the Maracás Project reaches, over a calendar quarter, sales of an annualised production rate of 20.9 Mlbs (9,500t) V2O5 equivalent and a further US$1.5 million payable in cash when the Maracás Project reaches, over a calendar quarter, sales of an annualised production rate of 26.5 Mlbs (12,000t) V2O5 equivalent. Each warrant will entitle the holder to acquire one Anglo Pacific ordinary share at a strike price of 2.50 and will be exercisable for 5 years. The warrants will not be admitted to trading on any exchange (3) Please refer to endnote (iii) 17

19 Non-core asset disposals Equity portfolio monetisation» 7.0m of realised proceeds from the portfolio of non-core equity investments from December 31, 2013 to June 30, 2014» Number of listed equity holdings reduced by ~50%» Further non-core equity disposals expected over the coming months» Investments in listed equities valued at 14.9 million as of June 30, 2014 Panorama Coal disposal and retention of royalty» Anthracite coal project located in British Columbia, Canada» Located adjacent to the Groundhog project owned by Atrum Coal NL (ASX:ATU)» Entered into an agreement to sell the Panorama Coal project for:» US$0.5m of cash payable on completion» US$2.0m promissory note payable within 12 months» One million Atrum Coal shares» The Group retained a royalty over the project which will be the greater of 1% gross revenue royalty or US$1 /tonne royalty (1) (1) 1% of gross revenues on a mine gate basis or US$1/tonne over any coal mined and sold from the properties sold to Atrum Coal 18

20 Deal pipeline Anglo Pacific is actively pursuing new royalty opportunities Actively pursuing primary and secondary royalties» Pursuing royalty opportunities in bulk materials and base metals» Developing new royalty opportunities in oil and gas and infrastructure» Currently pursuing a number of transformational transactions Focus on acquiring royalties on high quality natural resource assets that will contribute to earnings and dividend growth 19

21 Strengthened Board of Directors» Mike Blyth appointed as the Group s independent non-executive Chairman in April 2014» Appointment of Robert Stan as independent non-executive director in February 2014» 34 years of experience in the natural resource industry» Extensive contacts in the Canadian investment community along with working knowledge of operating coal projects in North America» Appointment of Rachel Rhodes as independent non-executive director in May 2014» Over fifteen years of experience in the natural resource sector» Member of the Institute of Chartered Accountants in England and Wales and the Group s Audit Committee Chair 20

22 Conclusion Annual Results

23 Conclusion» Attractive dividend yield» Accretive acquisitions to grow net income and dividend progressively» Upside potential in Kestrel royalty income» Market opportunity as conventional funding routes for natural resource producers remain limited» Limited competition from other royalty players 22

24 Appendix Annual Results

25 Management team has established track record in natural resources sector Julian Treger Director and Chief Executive Officer Julian Treger has over 24 years of investment experience including special situations and distressed investing. He co-founded Audley Capital Advisors LLP ( Audley ) in 2005 and has led the firm s natural resource investments. Prior to Audley, he co-founded Active Value Advisors Ltd. to invest in undervalued, predominantly UK-listed companies, where he advised on more than US$900m of funds over a 12-year period. Julian Treger began his career working for Lord Rothschild as an in-house corporate financier, managing a portfolio of public and private equity investments. Julian Treger holds a BA and an MBA from Harvard University. Mark Potter Director and Chief Investment Officer Mark Potter has more than 13 years of experience in special situations investing, private equity and corporate finance advisory. He joined Audley in 2005 and has been primarily responsible for covering all natural resource investments held by the Audley European Opportunities Fund. From 2003 to 2005, Mark Potter was an Associate at Dawnay Day advising on M&A, private equity and initial public offerings for UK-listed companies. Prior to this, he was a Senior Analyst in the Investment Banking division of Schroder Salomon Smith Barney (Citigroup). Mark Potter holds a BA (Hons) and MA degree in Engineering and Management Studies, Trinity College, University of Cambridge. Julian Treger & Mark Potter Have Strong Track Record of Creating Value Generated over US$600m of profit on US$300m worth of actively structured natural resource investments over a 7-year period (1) Brokered US$3.3bn sale of Western Coal to Walter Energy, providing significant return on investment Natural resource investments predominantly focused on coal and iron ore across Canada, US and Africa (1) Audley Capital Advisors LLP, November 18, 2013 Key management supported by wider Anglo Pacific team Significant technical, legal, accounting and corporate finance experience across the team Julian Treger and Mark Potter bring a disciplined approach to royalty investments 24

26 Other members of the Board of Directors Mike Blyth Non-Executive Chairman Rachel Rhodes Non-Executive Director Robert Stan Non-Executive Director Paul Cooke Non-Executive Director Anthony Yadgaroff Non-Executive Director Mike Blyth (63) was appointed director in March 2013 and as nonexecutive chairman in April He also currently chairs the Nomination Committee. He has a BSc from St Andrews University and is a Chartered Accountant. He was, until his retirement in 2011, a partner for 30 years in Baker Tilly, specialising in providing audit and related services to AIM and full list clients. During his career he held a number of senior management positions with the firm, including a period on its National Executive Committee. Rachel Rhodes (43) was appointed director in May 2014 and currently chairs the Group s Audit Committee. She has an MA in Economics from the University of Cambridge and is a member of the Institute of Chartered Accountants in England and Wales, having qualified with Coopers and Lybrand in London in She has over fifteen years of experience in the mining industry, including with Anglo American PLC and, most recently, serving as Chief Financial Officer of London Mining PLC until November At London Mining PLC, Ms. Rhodes played a leading role in listing the Company on AIM, in raising finance of around US$500 million and in the negotiation of the mining licences and fiscal platforms for the company s projects in Sierra Leone and Greenland. Robert Stan (60) was appointed director in February He has a B.Comm from the University of Saskatchewan. He has over 34 years of experience in the mining industry. He has held several senior positions with Fording Coal Limited, Westar Mining Ltd, and TECK Corporation before becoming a founding shareholder and director of publicly quoted Grande Cache Coal Corporation ("GCC"), an Albertabased metallurgical coal mining company, in At GCC, he served as President, CEO and Director from 2001 to 2012, when the company was sold for $1bn to Winsway Coking Coal and Marubeni Corp, an Asian-backed strategic investor consortium. He has served as Chairman of the Coal Association of Canada Board of Directors and has acted as a board member of the International Energy Agency's Coal Industry Advisory Board. He currently serves on the board of several private companies, including Quantex Resources Limited and Spruce Bluff Resources Limited, and of publicly listed Whetstone Minerals Limited. Paul Cooke (66) was appointed director in December He has an MA in History from Cambridge University and is a qualified Chartered Surveyor. He is a substantial shareholder in a number of property companies specialising in property development, investment and financing. He is also involved in farming and forestry interests in the UK and abroad. He serves on the boards of several charities. Anthony Yadgaroff (65) was appointed director in March He is a Member of the Chartered Institute for Securities and Investment, and has specialised in investment research, management, and consultancy during a forty year City career. Allenbridge Group, which he founded in 1984 to provide advisory services to private and institutional investors, was acquired by Close Brothers in February He is Chairman of AllenbridgeEpic Ltd, which advises major UK pension funds with assets exceeding 25 billion. He serves on the boards of several charities and non-profit organisations. 25

27 Experienced wider Anglo Pacific team Kevin Flynn Chief Financial Officer Kevin Flynn joined the Group as Chief Financial Officer in January A Chartered Accountant, having qualified with Deloitte, he has overall responsibility for corporate reporting, cash management and taxation. Prior to joining the Group, he spent several years in finance roles in the London commercial real estate sector, with both FTSE 100 and FTSE 250 companies. Peter Mason General Counsel and Company Secretary Peter Mason joined the Group in October 2010 and was appointed Company Secretary in July He has a BA in History from the University of Warwick and is a qualified solicitor. He began his career in private practice with Freshfields Bruckhaus Deringer LLP, working in London and Tokyo with a focus on M&A. Prior to joining the Group, he worked for the Malaysian oil and gas corporation, PETRONAS, advising on its European production and gas storage businesses. Juan Alvarez Group Mining Analyst Juan Alvarez joined the Group in 2012 as Group Mining Analyst. He has a Bachelors degree in geology from Macquarie University and currently has over twenty years experience in exploration, mining geology, resource estimation and mining finance. Juan worked as a Senior Mining Geologist for AngloGold and Rio Tinto before joining global mining consultant, Golder Associates as a Senior Consultant. Juan moved into mining finance when he joined niche mining focused stockbroker, Fox Davies Capital, as a sell side equities analyst before joining the Group. Marc Bishop Lafleche Investment Associate Marc Bishop Lafleche joined the Group as an Investment Associate in April He has an MSc in Banking and International Finance from Cass Business School and a BA (Hons) in Political Science from the University of Western Ontario. Marc became a CFA charter holder in Prior to joining the Group, between 2010 and April 2014 he worked in Citigroup s Global Industrials Investment Banking team focusing on metals & mining, and in Citigroup s European Leveraged Finance team

28 Endnotes Third party information As a royalty holder, the Company often has limited, if any, access to non-public scientific and technical information in respect of the properties underlying its portfolio of royalties, or such information is subject to confidentiality provisions. As such, in preparing this preliminary announcement, the Company has relied upon the public disclosures of the owners & operators of the properties underlying its portfolio of royalties, as available at the date of this presentation. i. This announcement contains information and statements that are based on certain estimates and forecasts that have been provided to the Group by Kestrel Coal Pty Ltd ( KCPL ), the accuracy of which KCPL does not warrant and on which readers may not rely. ii. Largo is listed on the TSX Venture Exchange and reports in accordance with the NI standards. First production achieved August 2, 2014, material test work, expected ramp-up, and targeted phase 1 nameplate capacity as per August 5, 2014 Largo Resources Limited press release Largo achieves first production at Maracás Vanadium Project. First shipment made on 2 September 2014 as per Largo Resources Limited press release Largo makes first shipment of vanadium pentoxide. Estimated mine life (p. 2-1) extracted from NI Technical Report dated 4 March 2013 (effective date 4 March 2013). iii. Alliance Resources Limited is listed on the Australian Securities Exchange and reports in accordance with the JORC Code. Production commencement date, total production as of August 1, 2014, and expected date of first sales as per Alliance Resources Limited August 8, 2014 press release Four Mile Production Status. Alliance Resources Limited owns 25% of the project, with Quasar Resources Pty Ltd owning the other 75%. 27