SMY: TSX-V - SEARCH Minerals

SMY: TSX-V
The following presentation may include certain “forward-looking statements” within the meaning of the United States Private Litigation
Reform Act of 1995 and applicable Canadian Securities Laws. All statements other than statements of historical fact, included in the
presentation, including without limitation, statements regarding potential mineralization and reserves, exploration results, and future plans
and objectives of Search Minerals, are forward-looking statements. Words such as “expect”, “anticipate”, “estimate”, “may”, “will”, “should”,
“intend”, “believe” and other similar expressions are forward-looking statements. Forward-looking statements are not guarantees of future
results and conditions but rather reflect our current views with respect to future events and are subject to risks, uncertainties, assumption
and other factors, and actual results and future events could differ materially from those anticipated in such statements. There can be no
assurance that such forward-looking statements will prove to be accurate. We base our forward-looking statements on information
currently available to us and we do not assume any obligation to update them, except as required by law.
An additional Cautionary Note to Investors: In the event that we use certain terms in this presentation such as “resource”, “measured
resource”, “indicated resource” and “inferred resource,” US investors are cautioned that, while such terms are recognized and required by
Canadian Securities Laws, the United States Securities and Exchange Commission does not recognize them. Under U.S. standards,
mineralization may not be classified as a “reserve” unless the determination has been made that the mineralization could be economically
and legally produced or extracted at the time the reserve determination has been made. U.S. investors should not assume that all or any
part of measured or indicated resources will ever be converted into reserves. In addition, “inferred resources” have a greater amount of
uncertainly as to their existence and as to whether they can be mined legally or economically. Accordingly, information concerning
descriptions of mineralization in the presentation may not be comparable to information made public by companies that are subject to the
SEC’s Industry Guide 7.
All of the scientific and technical information contained herein has been reviewed and/or prepared by either Dr. Randy Miller, P.Geo. or Dr.
David Dreisinger, both being a “Qualified Person” within the meaning of National Instrument 43-101-Standards of Disclosure for Minerals
Projects. For further details of the Company’s procedures and policies for data verification, the reader is referred to the Company’s news
releases and other material information available on the Company’s website at www.searchminerals.ca or on SEDAR at www.sedar.com
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| Corporate Presentation | SMY: TSX-V | searchminerals.ca | March 2016
SMY: TSX-V
•
World Class – 100% owned Port Hope Simpson Critical Rare Earth Element District
Labrador, Canada
(All dollars are $CDN)
•
Robust Preliminary Economic Assessment report
• Low Initial Capital Cost $ 152M (including $ 33M contingency)
• Scalable Processing Facility – initial production 1,000 tonnes per day
• After-Tax Payback Period – 4.4 years
•
Breakthrough Hydrometallurgical Process for Foxtrot Project (US Patent Pending)
• $ 1.9M pilot plant project: initiated Nov 2015: expected completion Sept 2016
• $ 1.25M funded by Research and Development Corporation of Newfoundland and
Labrador (“RDC”) and Atlantic Canada Opportunity Agency (“ACOA”)
• The proprietary process is a direct leach on crushed material, thereby, eliminating
grinding, flotation, gravity and magnetic separation, and as a result produces waste
which is a dry stackable inert residue, thereby eliminating the need for wet tailing ponds
•
Resource contains key Critical Rare Earth Elements:
• Economic grades for Dysprosium, Neodymium, Praseodymium, Terbium, and Yttrium
•
Mining Friendly Jurisdiction, Good Working Relationships With Governments,
Aboriginal Representatives, and Local Communities
•
Experienced Management and Technical teams and working Board of Directors
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| Corporate Presentation | SMY: TSX-V | searchminerals.ca | March 2016
SMY: TSX-V
Design and Build Larger-Scale Demonstration Plant
• Further test Foxtrot Project mineralization – commenced November 2015: target completion
September 2016
• Produce mixed REO product for testing by end-users and REE refineries
• Scale-up new metallurgical process toward commercialization.
Engage Engineering Firm to Initiate Environmental Study (Proposals – April 2016)
• Provide a roadmap to navigate environmental permitting process
• Carry out baseline study
Continue to pursue Strategic and Off-Take Partners (Ongoing)
• Strategic Partner / Joint Venture Partner – finance the Bankable Feasibility Study which
supports Construction Decision to build
• Off-Take Partner – purchase agreement for the individual Rare Earth Oxides or Rare Earth
Elements produced
Continue Relationship Building With Our Key Supporters (Ongoing)
• Shareholders
• Atlantic Canada Opportunities Agency (“ACOA”)
• Research and Development Corporation (“RDC”)
• NunatuKavut Community Council (“NCC”)
• Local Communities
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| Corporate Presentation | SMY: TSX-V | searchminerals.ca | March 2016
SMY: TSX-V
2016
2017
2018
2019
Continued Partner Development – Joint Venture, Off-take, Equity investment
Updated Preliminary
Economic Assessment
Report - Feb 2016
Completed
Metallurgy Pilot Plant testing Start Nov 2015, complete
September 2016
Permitting - Environmental
Impact Statement
Low cost to Bankable
Feasibility and Construction
Decision and Build of
Processing Plant
Feasibility Study
Engineering
Total Life-of-Mine production of 44,129 tonnes of TREO, or
3,300 tonnes per year at peak production;
Life-of-Mine production includes 7.095 million kg of
neodymium oxide (Nd2O3), and 0.836 million kg of
dysprosium oxide (Dy2O3).
5
Construction Build Processing
facility
| Corporate Presentation | SMY: TSX-V | searchminerals.ca | March 2016
Production Mixed Rare
Earth Oxides
produced
SMY: TSX-V
All parties work
together to maximize
production and sales
cycle
Search Minerals
Strategic / Joint Venture Partner
Off-take Partner
•
Search Minerals – continues to develop District and manage processing facility and
open pit operations
•
Strategic Partner / Joint Venture Partner – finance the Bankable Feasibility Study
which supports Construction Decision to build Processing Facility.
•
Off-Take Partner – purchase agreement for the individual Rare Earth Oxides or Rare
Earth Elements produced
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| Corporate Presentation | SMY: TSX-V | searchminerals.ca | March 2016
SMY: TSX-V
Rare Earth Elements: Critical for the 21st Century
Green Energy
• Hybrid and Electric Vehicles
• Wind Energy
• Energy Efficient Lighting
The Toyota Prius is estimated to
contain:
1 kg Neodymium Metal
15 kg Lanthanum Metal
0.1 kg Dysprosium Metal
Sales are greater than 1 million units per annum
Military and Defence
• Communications
• Aeronautical engineering and Jet Engines
• Guidance, Lasers, Sonar, Optics, and Electronic Counter Measures
Modern Technologies
• Cell Phones and Digital Cameras
• LCD and Plasma Televisions
• MRI machines, X-Ray, and PET Medical imaging
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| Corporate Presentation | SMY: TSX-V | searchminerals.ca | March 2016
SMY: TSX-V
•
Criticality assessment was framed in two dimensions: importance to clean energy and supply risk
•
5 REEs have been identified as the most critical, including Dy, Nd, Tb, Eu and Y
•
These five REEs are used in magnets for wind turbines and electric vehicles or phosphors in energyefficient lighting
Source: US Department of Energy – Dec 2011
Short-Term (Present–2015)
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Medium-Term (2015–2025)
| Corporate Presentation | SMY: TSX-V | searchminerals.ca | March 2016
SMY: TSX-V
FOXTROT ECONOMICS
SMY: TSX-V
Operating Metrics ($CDN)
Plant Capacity
1,000 tpd production rate
Method / Schedule / LOM
14 years - Initial 8-year open pit followed by 6 years of underground mining
– to be funded by operating cash flow
LOM Production
LOM production of 44,129 tonnes of TREO, or 3,300 tpa at peak production
Feed Grade-weighted REE Recovery
Rate
76.8%
Main Products
LOM production includes 7.095M kg of Neodymium oxide and 0.836M kg
Dysprosium oxide
Proprietary Process
Direct leach on crushed material, thereby, eliminating grinding, flotation,
gravity and magnetic separation
Financials ($CDN)
NPV10% and IRR
Pre-tax: $93 million; 22.27%
Capex
$152 million, includes $33 million contingency, $ 57 million underground
(Year 8), $23 million sustaining and closure capital
Total Net Revenue
$ 1.713 Billion
Processing Facility average unit
operating cost
$238 per tonne
Pay Back
Pre-tax: 3.5 years
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| Corporate Presentation | SMY: TSX-V | searchminerals.ca | March 2016
After-tax: $ 48 million; 16.7%
After-tax: 4.4 years
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FOXTROT RESOURCE and
DISTRICT POTENTIAL
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| Corporate Presentation | SMY: TSX-V | searchminerals.ca | March 2016
SMY: TSX-V
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| Corporate Presentation | SMY: TSX-V | searchminerals.ca | March 2016
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FOXTROT MINERAL RESOURCE (December 31, 2015 – Open Pit – $NSR cut-off $ 165,
Underground $NSR - $260)
Cut-off
$ NSR
CLASSIFICATION
TONNAGE
(TONNES)
Dy
(ppm)
Dy2O3
(ppm)
Nd
(ppm)
Nd2O3
(ppm)
Pr
(ppm)
Pr6O11
(ppm)
LREE
%
LREO
%
HREE
%
HREO
%
TREE
%
TRE0
%
OPEN PIT
INDICATED
$ 165 4,129,000 177
203
1,393 1,625
372
449
.69
.83
.17
.20
.86
1.03
INFERRED
$ 165
179
206
1,378 1,607
368
445
.68
.82
.17
.20
.85
1.02
INDICATED
$ 260 3,263,000 209
240
1,602 1,868
429
518
.78
.94
.19
.23
.97
1.17
INFERRED
$ 260 1,730,000 201
231
1,602 1,868
430
520
.80
.96
.19
.23
.99
1.19
TOTAL
INDICATED
7,392,000 191
219
1,485 1,732
397
480
.73
.88
.18
.21
.91
1.09
1,958,000 199
228
1,576 1,838
423
511
.79
.94
.18
.22
.97
1.17
228,000
UNDERGROUN
D
TOTAL
INFERRED
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| Corporate Presentation | SMY: TSX-V | searchminerals.ca | March 2016
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| Corporate Presentation | SMY: TSX-V | searchminerals.ca | March 2016
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• 2015 Channel Program Completed
• Similar (vs FOXTROT) Surface Strike Length & Greater Width (up to 30m)
• Greater than 15% Higher Assays (vs FOXTROT) in Mineralized Zones
• Second Major Discovery in the Fox Harbour Belt
• Additional Source For Processing Facility
• 12 Km From FOXTROT
• 2 Km From St. Lewis (Deep-Water Port)
• 2 Km From Labrador Road Network
• Needs Preliminary Drill Program
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| Corporate Presentation | SMY: TSX-V | searchminerals.ca | March 2016
SMY: TSX-V
Assays
Quantity
(M tonnes)
Dy
(ppm)
Nd
(ppm)
Pr
(ppm)
Indicated
7,392
191
1,485
397
Inferred
1,938
198
1,576
423
Channel 14-01
5.96 metres
286
2,156
567
Channel 15-07
9.29 metres
270
1,911
504
Channel 15-06
10.17 metres
260
2,049
525
Channel 15-11
11.40 metres
253
1,732
461
Channel 14-01
17.50 metres
241
1,893
507
FOXTROT
DEEPWATER FOX
SURFACE EXPRESSION
WIDTH
LENGTH
Foxtrot
Mostly 5m-14m
Approximately 400m
Deepwater Fox
Mostly 7m-30m
Approximately 400m
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| Corporate Presentation | SMY: TSX-V | searchminerals.ca | March 2016
SMY: TSX-V
BREAKTHROUGH
METALLURGY
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Acid Bake Discharge from Kiln
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| Corporate Presentation | SMY: TSX-V | searchminerals.ca | March 2016
SMY: TSX-V
• Foxtrot Rare Earth mineralization is coarse crushed (6 mesh, 3.45 mm)
• Rare earth minerals are treated with relatively small amounts of sulphuric
acid at 200 C (low temperature) to render the rare earth elements water
soluble.
• After water leaching, the rare earth solution is purified by neutralizing the
small amount of remaining acid
• The rare earth elements are then precipitated into a concentrate using
sodium carbonate
• The rare earth carbonate is then re-dissolved in hydrochloric acid and after a
second pH adjustment to reject remaining impurities, the rare earth
elements are precipitated again
• The rare earth precipitate is calcined to produce a high grade mixed rare
earth oxide product
• This product is refined (by toll process) to produce high purity individual rare
earth elements.
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| Corporate Presentation | SMY: TSX-V | searchminerals.ca | March 2016
SMY: TSX-V
OLD
NEW
BENEFIT
Rock
Treatment
Crush and Grind to .105mm
Crush to 3.45mm
Save grinding cost and process
Upgrading
Process
Use flotation, gravity and
magnetic separation
None
Save beneficiation cost and
process. Flotation, gravity and
magnetic separation not required
Primary
Chemical
Treatment
Acid Bake, Water Leach,
Purification, Oxalate
Precipitation
Acid Bake, Water Leach,
Purification, Carbonate
Precipitation
Carbonate precipitation is much
cheaper than oxalate
RE Precipitate
55.58% TREO
32.08% TREO
Lower grade but then must purify
Secondary
Chemical
Treatment
None
Acid Releach, Purification,
Precipitation and Calcination
Very small circuit due to high grade
of concentrate
Final Product
55.58% TREO
98.99% TREO – (High Grade
RE Oxide)
Meets Rare Earth Refinery needs greater than 92% TREO and
contains less than 10g/t of Thorium
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| Corporate Presentation | SMY: TSX-V | searchminerals.ca | March 2016
SMY: TSX-V
Rare Earth Oxide
La2O3
CeO2
Pr6O11
Nd2O3
Sm2O3
Eu2O3
Gd2O3
Tb4O7
Dy2O3
Ho2O3
Y2O3
Er2O3
Tm2O3
Yb2O3
Lu2O3
Sc2O3
TOTAL Rare Earth
Oxide %
22
Rare Earth Oxide %
14.1
38.6
4.68
18.0
3.10
0.17
2.46
0.40
2.30
0.47
12.4
1.22
0.18
0.8
0.1
0.006
•
•
•
•
•
Very high purity product
98.9% REO+Y
S=<0.01%, F=<0.01%
Th = 2 g/t. U = 97 g/t
Key impurities: 93 g/t Si, 0.15%
Ca, 44 g/t P, 465 g/t Mn, 34 g/t
Cr, 23 g/t Sr, 56 g/t V
• Rare Earth Refinery can separate
this product into individual REEs
• CRITICAL RARE EARTHS
– Highly valued (Pr, Nd, Eu, Tb, Dy, Y) –
account for 37.95% of the Mixed
REO oxide results
98.9%
| Corporate Presentation | SMY: TSX-V | searchminerals.ca | March 2016
SMY: TSX-V
•
New Process Developed
– Simpler (no grinding, no flotation, no magnetic or gravity separation, whole ore extraction)
– Maintain high overall recovery to final mixed REO
– Lower reagent use (Acid, MgCO3, Oxalic Acid)
– High quality Mixed REO Produced
– Dry inert – stackable residue – potentially placed back into open pits after development
– No wet tailings in a conventional sense
•
Next Steps
– Initiated Pilot Plant $ 1.9M program with $1.25M R&D funding from Federal (ACOA) and
Provincial governments (RDC)
– Commencement date was November 2015 with an expected completion date of
September 2016.
– Goals:
•
•
•
•
•
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Refine the process steps and chemistry
Demonstrate on a larger scale
Test new equipment
Produce product for the refinery evaluation
Generate engineering design data for feasibility study
| Corporate Presentation | SMY: TSX-V | searchminerals.ca | March 2016
SMY: TSX-V
• Search believes that the new process represents a breakthrough in
simplicity, cost and efficiency.
• Search has sought protection for the process by applying for a patent
through the US Patent office. Search will seek protection for the process
in additional countries through the Patent Cooperation Treaty (PCT).
• Patent protection ensures Search has a right to use the process and
prevents others from using it, except under license from Search
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| Corporate Presentation | SMY: TSX-V | searchminerals.ca | March 2016
SMY: TSX-V
THE COMPANY
SMY: TSX-V
Search Minerals Inc.
Head office – North Vancouver
Ticker
TSX-V: SMY
Shares Outstanding O/S
132,491,188
Warrants
46,645,334
Options
10,120,000
Fully Diluted Shares O/S
189,256,522
Market Cap
$7.949 million
As at March 1, 2016
Rare Earth Element Projects
Labrador
Canada
Flagship
Foxtrot Project
100% owned
Red Wine
100% owned
Rare Earth Exploration Portfolio
100% owned
Over 23 Foxtrot-like REE prospects
9 pegmatite-vein prospects
At least 3 Red Wine HREE prospects
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| Corporate Presentation | SMY: TSX-V | searchminerals.ca | March 2016
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MANAGEMENT
DIRECTORS
Greg Andrews, President & CEO
Jim Clucas, Executive Chairman, Director
B. Commerce, Finance from University of Calgary . He has extensive
experience with strategic planning, budgeting, implementation, and
administration
Former CFO of Inco Canada, and founder of International Nickel
Ventures Inc.; Has been instrumental in the development of several
mineral deposits; Currently serves as director of INV Metals, North
American Nickel,
Dr. Randy Miller, Vice President, Exploration
Ph.D. in Geology from the University of Toronto; extensive experience
studying REEs, including 5 years work on the Strange Lake Property
with IOC and 12 years as REE specialist with Newfoundland and
Labrador Geological Survey.
Dr. David Dreisinger, Director and Vice President,
Metallurgy
Professor and Industrial Research Chair in Hydrometallurgy at the
University of British Columbia. He has been a professor at UBC since
1988.. He has published over 250 papers and has been involved as a
process consultant in industrial research programs with metallurgical
companies. He is also a director of Polymet Mining Corp. and holds
officer Position wth Trimetals Mining Inc.
Matthew Anderson, Chief Financial Officer
B. Commerce from McGill University; obtained his CA designation in
2008; current CFO of i-Minerals Inc.
Barry Girling, Corporate Secretary
Dr. Jim Patterson, Director
Ph.D. in Geology and an independent economic and exploration
geological consultant; 40 years experience in initiating, developing,
conducting and supervising all phases of mineral exploration; has
been instrumental in the development of a number of mining
companies, including FNX Mining
Roberto Giannetti da Fonseca, Director
Former Brazilian Federal Secretary of Foreign Trade; CEO of Kaduna
Consulting Group, advisor to 50+ Brazilian and multinational
companies; Executive Director of International Affairs and Foreign
Trade (FIESP), a São Paulo business industrial association. Founder
and ex-Chairman of Cotia Trading S.A, which became the largest
foreign trade company in Brazil.
Raymond Saunders, Director
Over 30 years of experience in Eastern Canada; has acquired,
managed and consolidated several transportation companies to
service all regions of the province; current President and major
shareholder of several private companies.
B. Commerce, Finance from UBC. He has been providing various
Dr. David Dreisinger,
consulting services to a number of public companies for over 20 years,
primarily in corporate, finance and management capacity.
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| Corporate Presentation | SMY: TSX-V | searchminerals.ca | March 2016
Director – see Management
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SMY: TSX-V