US$335,000,000 11.5% Senior Secured Notes Due 2018 (Issued February 2011) Nomura Fixed Income Corporate Day 15 November 2012
Disclaimer This presentation has been prepared by Atlantic Ltd ( Atlantic ) and Midwest Vanadium Pty Ltd ( MVPL ) and is for information purposes only. The information contained in this presentation is not, and does not constitute, an offer to issue or sell, or a solicitation, invitation or recommendation to subscribe for or purchase, any securities, nor is it intended to constitute legal, tax or accounting advice or opinion. The information contained in this presentation is not investment or financial product advice and is not intended to be used as a basis for making an investment decision. This presentation has been prepared without taking into account the investment objectives, financial situation or particular needs of any person. The securities of the company have not been and will not be registered under the United States Securities Act of 1933 (the Securities Act ) or under the securities laws of any other United States jurisdiction, and may not be offered or sold in the United States absent registration under the Securities Act or an exemption therefrom. This presentation contains statements that may constitute "forward looking statements". Examples of forward looking statements include, but are not limited to, (i) statements regarding Atlantic s or MVPL s future results of operations and financial performance, (ii) statements of plans, strategies, or objectives and (iii) statements of assumptions underlying those statements. Words such as "may", "will", "expect", "intend", "plan", "estimate", "anticipate", "believe", "continue", "probability", "risk" and other similar words are intended to identify forward looking statements but are not the exclusive means of identifying those statements. By their very nature, forward looking statements involve inherent risks and uncertainties, both general and specific, and many of which are outside the control of Atlantic and MVPL; which may cause Atlantic s or MVPL s actual future results to differ materially from any results, performances or achievements expressed or implied in such forward looking statements. Accordingly, no representation or warranty or guarantee, express or implied, is made as to the fairness, reasonableness, reliability, accuracy, completeness or correctness of any forward looking statement, or any other statement, contained in this presentation. To the maximum extent permitted by law, none of Atlantic or MVPL, nor any of their respective directors, officers, employees, agents or advisers, accepts any liability for any loss or damage, including without limitation any loss or damage arising from fault or negligence, arising from the use of, or reliance on, any forward looking statement, or any other statement, contained in this presentation. The forward looking statements in this presentation speak only as at the date of this presentation. Subject to any continuing obligations under applicable law or relevant ASX listing rules, and to the maximum extent permitted by law, Atlantic and MVPL disclaim any obligation to provide any updates or revisions to any forward looking statements. No action should be taken on the basis of information contained in this presentation, and no reliance may be placed for any purpose on any forward looking statement, or any other statement, made in this presentation. No parts of this presentation may be reproduced without the express written consent of Atlantic or MVPL. 2
Agenda Windimurra Mine and Plant Windimurra Operational Status Windimurra Project Guidance MVPL Note Holder Update Windimurra Growth Potential Vietnam Wrap-up 3
4 For personal use only Windimurra Vanadium Mine and Production Plant
Windimurra Project Overview Pilbara Iron Ore Province World class vanadium deposit with over 28 year mine life with dedicated plant energy supply (gas pipeline) Project undergoing ramp-up and funded through to full production capacity Product shipments ongoing to US market at attractive prices ($US32/kg) Significant project de-risking following construction completion, commissioning and commencement of ferrovanadium production Low operating cost in bottom quartile of global industry cost curve once ramped-up Highly qualified management and technical team Robust vanadium market fundamentals 5
Windimurra Project Milestones 6 Project acquisition in September 2010 with an estimated replacement cost value of A$800 million Equity funding of the project in September 2010 Debt funding of the project in February 2011 Off-take and marketing agreements in place for all of the Project s vanadium production Resource and reserve base upgraded and production output revised First product shipped in May 2012 Plant undergoing ramp-up to capacity with regular ferrovanadium shipments to customers Project funded to full ramp-up in first half CY 2013
Windimurra Vanadium Mine Long mine life of over 28 years, increased from 21 years following 19% resource and 30% reserve upgrade in 2011/12 Magnetic signature of extending mineralisation Low strip ratio 0.8 : 1 Fully developed mine RESERVES Category Tonnes(mt) V205% Proven 49.3 0.46 Probable 78.3 0.47 TOTAL 127.6 0.47 RESOURCES Category Tonnes(mt) V205% Measured 49.9 0.46 Indicated 100.3 0.47 Inferred 59.8 0.48 TOTAL 210.0 0.47 Current pit and mining leases Southern tenements Exploration drilling has confirmed continuation of vanadium bearing ore body Further exploration underway 25 km 7
Agenda Windimurra Mine and Plant Windimurra Operational Status Windimurra Project Guidance MVPL Note Holder Update Windimurra Growth Potential Vietnam Wrap-up 8
Windimurra Project Fundamental Issue The delay in the Windimurra project ramp-up is largely attributable to the poor design and construction of the Crushing, Milling and Beneficiation (CMB) circuit of the plant. This has been largely addressed by modifications to the CMB plant which were completed in August 2012. 9
Windimurra Operational Status Area Mining Crushing Milling Beneficiation Kiln Desilication/Precipitation Flash dryer Reduction kiln FeV furnace Comments Successful operation for over a year. Simple open pit homogenous ore body resulting in low mining costs. Waste to ore (strip ratio) very low. Current focus on accessing fresh ore. Successful operation. The crushing plant has proven capability beyond project requirements. Tertiary and secondary crushers underwent rebuild in early October. Modification works complete and yielding positive results. Additional routine debottlenecking works to improve feed in and out of the mill (HPGR). Modification works completed and early operations successful. Optimization of process flows and commissioning of rare earth magnet and high intensity magnet magnetic separators. Kiln operating well. Modifications to discharge drag chain conveyor to increase capacity and capability of the overall kiln. Operating in line with expectations. Operating in line with expectations. Optimisation work underway. High quality product produced with focus on achieving consistent commercial production. 10
Windimurra Operational Status Next Steps Ongoing Management Focus on Improving: Standard operating procedures Operator training Plant availability Plant run times Plant optimization (low capital cost) 11
Agenda Windimurra Mine and Plant Windimurra Operational Status Windimurra Project Guidance MVPL Note Holder Update Windimurra Growth Potential Vietnam Wrap-up 12
Expected Production and Cash Flows CYQ4 2012, CYQ1 2013 and Steady State Guidance Q4 CY2012 Forecast Q1 CY2013 Forecast Steady State (per annum) Contained V production tonnes 477-583 867-1060 6,200-6,700 Cash inflow from class B convertible bond draw down A$m 20.0 Estimated cash outflows A$m (38.1) (32.2) Interest reserve and operating accounts release A$m 9.5 Up to 9.6 1 Research and development tax credit A$m 22.0 Interest payment (Notes) A$m (18.6) Notes and assumptions 1. Subject to Note holder approval. 2. All amounts converted at A$1:US$1.03766 as at 5 November 2012. For a detailed project update please refer to the Atlantic Ltd September 2012 Quarterly Report: http://asx.com.au/asxpdf/20121101/pdf/429xcjdwlx8bnw.pdf For a subsequent Funding and Project update, please refer to the Atlantic Ltd ASX announcement released 5 November: http://asx.com.au/asxpdf/20121105/pdf/429zlvqfm5l4vx.pdf
Abnormal Income Item Research and Development (R&D) Tax Credit The claim was made under the Income Tax Assessment Act (1997) Section 355 R&D tax claim registered with the Australian Taxation Office for A$22 million The claim relates to eligible R&D activities during the commissioning of the Windimurra plant in the 2011/12 financial year The assessment of eligible R&D activities was conducted using an external consulting company to ensure documentation and compliance
Agenda Windimurra Mine and Plant Windimurra Operational Status Windimurra Project Guidance MVPL Note Holder Update Windimurra Growth Potential Vietnam Wrap-up 15
US$335,000,000 11.5% Senior Secured Notes Due 2018 Indenture Amendments MVPL engaged with Note holders seeking a number of Indenture amendments. This engagement resulted in independent technical consultants SRK Consulting undertaking a review of the Windimurra mine and plant. Conclusions of SRK s review: There are no fatal flaws in: o The latest mineral resource estimates for Windimurra; o The crushing, milling and beneficiation (CMB) circuit; and o The process plant downstream of the CMB circuit. Some throughput constraints exist in the CMB circuit, though they are being addressed It is very likely project completion will be achieved over the course of the production plan to June 2013
US$335,000,000 11.5% Senior Secured Notes Due 2018 Key Indenture Amendments Indenture amendments $US9.9 million released from restricted cash reserve accounts If Droxford does not convert their Atlantic Ltd Bonds by 15 January 2015, the Note holders have the right to be paid out at par Any excess cash flow generated by MVPL (after normal operating costs) to be used to fund an annual repurchase of Notes at 105% of par Possible release of up to a further US$10 million from restricted cash reserve accounts in January 2013 subject to agreement
Agenda Windimurra Mine and Plant Windimurra Operational Status Windimurra Project Guidance MVPL Note Holder Update Windimurra Growth Potential Vietnam Wrap-up 18
19For personal use only Unlocking Windimurra s Organic Growth Potential Significant opportunities to unlock further value Vanadium V 2 O 3 premium product development Vanadium V 2 O 5 premium product development Iron ore Fe and TiO 2 separation
Windimurra Iron Ore Titanium Separation Opportunity Proven technology Testing undertaken at Changsha test facilities in China, with positive results Windimurra iron ore has high levels of Fe and TiO 2 with low impurities (i.e. S, P) Separate Fe and TiO 2 to produce high value Fe powder and TiO 2 concentrate Leverage off existing Windimurra infrastructure (e.g. Midwest Gas Pipeline) puts project in an advantageous position Transport logistics in place Higher value, lower tonnage products suit Windimurra logistics solution Existing screened iron ore stockpile at Windimurra 20
Agenda Windimurra Mine and Plant Windimurra Operational Status Windimurra Project Guidance MVPL Note Holder Update Windimurra Growth Potential Vietnam Wrap-up 21
Vietnam Mine-Port-Rail Project Key points: Vietnam hosts large, high quality bauxite reserves in Central Highlands Tradable bauxite market forecast to grow rapidly as existing resources depleted Atlantic proposes integrated 25 mtpa bauxite minerail-port project (limited open access) Potential to add alumina refineries and aluminium smelting capacity as a second stage to the Mine- Rail-Port Project Agreement signed with Vietnam Government s Vimluki to undertake a development study Study completed showing positive economics Significant upside if joint venture agreement concluded 22
Bauxite Fundamentals Bauxite expansions not enough to satisfy demand starting in 2012 China importing 74% of its bauxite requirements (53.9 mtpa) Indonesia implemented bans on export of bauxite in 2012 Indonesia supplied 81% of China imports in December 2011 Harbor Intelligence forecast an increasing bauxite price up to US$65 per ton FOB by 2020 23
Agenda Windimurra Mine and Plant Windimurra Operational Status Windimurra Project Guidance MVPL Note Holder Update Windimurra s Growth Potential Vietnam Wrap-up 24
Wrap-up Management are committed to bringing Windimurra into full production Regular ferrovanadium shipments underway Strong ferrovanadium market fundamentals 25
26 Contact Michael Minosora Chairman and Managing Director T +61 8 61 41 7100 www.atlanticltd.com.au ASX code Ordinary shares Market cap* Index * Per 12 November 2012 ATI ordinary shares 155 million $38 million S&P/ASX All Ordinaries