Large Scale Bauxite Project

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• Large Scale Bauxite Project
• in Guinea

30 April 2015
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Disclaimer

• THIS PRESENTATION IS FOR INFORMATION ONLY AND
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  THEREFORE.
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Executive summary

• 4 billion tonnes of established bauxite resource
  (MI) with average Al2O3 content at 40,
  comprehensively explored
• Target rate of export - 10 MTPA of bauxite at
  46-48 Al2O3 grade, with life of mine (LOM) 200
  years
• Located in well-known bauxite province in Guinea
• High-grade, low silica, consistent ore bodies,
  negligible overburden
• simple geological setting

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Executive summary

• Short term goal to establish mining and to
  build transportation infrastructure to export up
  to 10MTPA of bauxite of 46-48 grade
• Middle term goal to implement an alumina
  refinery in a region with low energy costs to
  produce Smelter Grade Alumina (SGA) and
  Non-metallurgical Grade Alumina (NMGA), including
  low cost alumina monohydrate
• Long term goal implement red mud processing to
  extract rare earths and other hi-tech materials
  using new technologies

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Project background

• Eloft Group owns Telimele license through 100
  subsidiary - Eurasian Resource, incorporated
  under the Laws of Guinea in 2010
• Eurasian Resources has obtained exploration
  license (2,003 km2) in June 2010 in Telimele
  Prefecture, Guinea
• In accordance with Guinean Mining Code, Eurasian
  Resources has exclusive rights to obtain mining
  license
• Eurasian Resources has good track record in
  Guinea and has consistently delivered on its
  obligations before the authorities

Telimele License Area Location
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Geography and infrastructure

• Telimele bauxite project is situated in Telimele
  Prefecture, Guinea, where other major bauxite
  operations are present
• Fria, 40 km from the project
• Rusal Alumina plant 0.618 Mtpa (now suspended)
• 105 km Railroad Fria to port Conakry (max 35,000
  t vessels)
• Sangaredi, 60 km from the project
• CBG mine 12 Mtpa of bauxite production
• 136 km railway from Sangaredi to port Kamsar(up
  to 60,000 t vessels )
• Kindia, 100 km from the project
• Rusal mine 3 Mtpa of bauxite production
• 90 km railway from Kindia to Conakry (max 35,000
  t vessels)
• Boffa , 100 km from the project
• Small mooring near Boffa city (Rio Pongo river)
• Sea ports infrastructure is represented by ports
  of Conakry and Kamsar

Location of main infrastructure objects in Guinea
and mining companies
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Geology

• Telimele bauxite deposit consists of 32
  individual deposits (bowals or plateau)
• Average thickness of ore body is 6-8 meters, with
  practically no overburden, except for topsoil
• Average silica - 2, reactive silica - 1.1
• Bauxite composition gibbsite (60.89), goethite
  (19.66), hematite (9.20), kaolinite (2.32),
  illite (1.95), rutile (1.39), quartz (0.82),
  anatase (0.57), with 3.20 amorphous material
• The ore is suitable for processing using low
  temperature Bayer process

Mineral Resources Map, 2012, by SRK Consulting
Ltd.
Plateaux Tonnage (kt) Al2O3 () SiO2 ()
Measured 2,104,000 40.9 2.17
Indicated 1,877,000 39.5 3.10
Sub-Total 3,981,000 40.2 2.6
Inferred 144,000 38.7 1.98
Total 4,125,000 40.2 2.6
JORC Mineral Resource Statement, by SRK
Consultants Ltd., 2012
Source Mineral Resource Statement, 2012, SRK
Consulting Ltd
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Mining

• Proven good practice for bauxite mining in Guinea
  is to use surface (continuous) miners, such as
  Wirtgen SM2500, with no blasting
• The method is especially suitable for relatively
  thin (2-10m) sedimentary ore bodies, with high
  cutting precision and minimal dilution
• One machine sustains 700-1000 t/hr throughput
• No primary crushing of run of mine (ROM) is
  needed before dry bulk transportation
• Surface miner can be used for mine site roads
  building

Proposed mining using a surface miner
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Logistics

• Guinea has poor roads infrastructure and shallow
  coastal waters except for two small port areas
• Combined transportation scheme is envisaged from
  mine to FOB cape size
• 100 km overland haulage from mine to a river
  jetty
• 5000t payload barges to an offshore deep water
  transhipment facility loading onto cape size
  ships
• Overland transportation options include
• Trucking
• Rail transportation
• Slurry pipeline
• Conveyor belt
• Any combination of the above
• Multi modal transportation will avoid necessity
  to build a sea port and, in the same time, will
  help to keep operating costs down

Proposed transportation route for the Project
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Exports Development Strategies

• The hilly part of the terrain will be crossed by
  a dirt road, first 37km from mine site
• In order to accommodate 10MTPA bauxite, a
  railroad will be built in the part of the route
  located in more gradual terrain, down to river
  jetty, 83km
• From river jetty a barging operation will deliver
  bauxite to a transshipment facility loading cape
  size vessels
• The cheap rail transportation for the part of the
  road will keep mine-to-FOB costs to moderate
  level
• Expensive building of railroad in hilly terrain
  will be avoided, as railroad will not have many
  bridges and viaducts
• Construction times will be kept within 3 years

10MTPA railtruck
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Exports Development Strategies

• In order achieve low cost haulage of 10MTPA
  bauxite from the mine site, the large scale
  logistics system should be built
• Potential modes of transport include
• Railroad
• Slurry pipeline
• Conveyor belt system
• The transportation cost expected to be lower as
  compared to combined haulgage
• Higher CAPEX will be compensated by higher
  margins
• Rail option scoping study has been completed
• Slurry pipeline scoping is underway, as it
  requires certain metallurgical tests of the
  mineral
• To double the throughput to 20MTPA will require
  only fractional investment increase

10MTPA rail only
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Development Strategies
Development Strategies Comparison
Staged Staged 10MTPA moderate cost product 10MTPA low cost product
3MTPA 10MTPA 3MTPA 10MTPA 10MTPA moderate cost product 10MTPA low cost product
Time to develop, years 1 3 3 4
CAPEX, 000,000 103.5 356.7 434.3 644
Mine 26.2 22.9 49.1 49.1
Overland 39.5 274.5 288.0 498
River Jetty and Barges 19.5 34.1 53.7 53.7
Transhipment 18.3 25.2 43.5 43.5
OPEX at FOB, /t 24.5 14.4 14.4 10.5
Mining 6.0 5.3 5.3 5.3
SGA 1.5 0.8 0.8 0.8
Transportation to FOB 17.0 8.3 8.3 4.4
Freight to China, /t 24.0 14.0 14.0 14.0
Margin, /t 11.5 31.6 31.6 35.5
EBITDA, 000,000 34.5 316 316 355
Source scoping studies by WBHO
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Bauxite Markets

• Global demand and value of bauxite has been
  increasing last 2 years by 5.3 per annum (see
  the picture supply-demand)
• Bauxite is globally plentiful, but of various
  quality, and mines development and financing is
  becoming slower/more difficult
• Governments ban bauxite exports unless refinery
  is built in-country
• Capital costs and lack of available
  infrastructure make investment size steep
• National policies and taxes comprise hurdles

Chinas imported bauxite sources, volumes and
prices
Source 20th MetalBulletin Bauxite Alumina
Conference, 2014, Miami

• Chinese domestic bauxite supply is decreasing
  (quality, depletion, allocations)
• Strong increase in bauxite imports to China is
  forecasted from 2019
• Conclusions
• Chinese bauxite import volumes are expected to
  keep growing
• Numerous bauxite projects will be needed to meet
  future demand

Group Executive Strategy Development Alumina
Limited, as of beginning of 2014
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Bauxite Markets
Chinas Bauxite Import Gap Source CRU Market
Report, 2015
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Middle Long Term Strategy

• The alumina refinery should be built in regions
  with low power costs, such as Namibia, to reduce
  bauxite logistics costs
• Target products should include Smelter Grade
  Alumina (SGA), Non Metallurgical Alumina (NMGA),
  and high dispersed alumina hydrates
• NMGA market is growing faster than other sectors
• ELOFT has access to a new technology producing
  low cost alumina monohydrate
• Red mud, waste of bauxite processing, should be
  processed using new high technologies to extract
  high value rare earths

Bauxite Processing Economics
NMGA SGA SGARed Mud Processing
Output, kt 288,5 2,800 5,000
Initial CAPEX, USD millions 370 2,352 2,854
EBITDA, USD millions 274 560 1,072
NPV, USD millions 1,158 373 3,065
IRR, 52.91 13.8 24.11
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Work done
Works Year Contractor
Drilling works with total volume 140,000 m Auger drilling 600x600 grid 11,646m 300x300 grid 52,054m 150x150 grid 69,948m 75x75 grid 2,860m Diamond drilling 3,550m 2010-2012 Geoprospects Ltd (Guinean Company) supervised by SRK Consulting Ltd
Lab XRF survey 2011-2012 ALS Global (Ireland office)
Geotechnical studies of bauxite ore 2011-2012 Polytechnic University of Conakry (Guinea)
Metallurgical studies of bauxite 2012-2013 Austalian Labs (Amdel and CSIRO)
Mineral Resource Estimation 2012 SRK Consulting Ltd
Alumina Refinery Scoping Study 2012 SRK Consulting Ltd
Pre Feasibility Study of Alumina and Non-metallurgical Alumina product In Progress SRK Consulting Ltd
Scoping Study of Bauxite Export (10MTPA) 2015 WBHO
Reconnaissance study of Rio Pongo River 2015 WBHO and Eurasian Resources
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Project team and contacts
Eloft Group Ltd Kazakhstan, 050059, Almaty, 19
Al Farabi ave, Nurly Tau business center, 2b
block, 8th floor, office 801-802, tel.
7-72-7-311-01-30 Managing partner Kruglyak
Denis 7-705-501-11-13 kruglyak_at_er-bauxite.com
Eurasian Resources Russia, 119019, Moscow,
Bolshoi Afanasyevskiy, 8, building 3 tel.
7-495-374-51-29 Managing partner Zotov
Alexander 7-917-574-55-00 zotov_at_er-bauxite.com