Investor update

Jan 22, 2025

Slides

Good morning, ladies and gentlemen, and welcome to the Alien Metals Limited investor presentation. Throughout this recorded presentation, investors will be in listen-only mode. Questions are encouraged. They can be submitted at any time via the Q&A tab that's just situated on the right-hand corner of your screen. Please just simply type in your questions and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company can review all questions submitted today and will publish those responses where it is appropriate to do so. Before we begin, we would just like to submit the following poll, and if you could give that your kind attention, I'm sure the company would be most grateful. I would now like to hand you over to the executive management team from Alien Metals Limited. Guy, good morning, sir. Good morning, Jake, and many thanks. Ladies and gentlemen, good morning, and thank you for joining this webinar. Firstly, may I apologize for deferring this event, which was originally scheduled for December. My name, Guy Robertson, Chairman of Alien Metals, and I'm joined by my fellow director, Rob Mosig. The format of the webinar will be to have a quick run-through presentation followed by a Q&A session. Some pre-submitted questions we have summarized and grouped, and we'll then deal with questions arising during the webinar. I expect that most of our shareholders and investors are familiar with the Alien Metals projects. We will not cover old ground in detail. This presentation is now up on the alien website. In addition, on the website, you'll find a recently released research note by Zeus. Our current market capitalization of AUD 12 million, or approximately GBP 6 million, we believe significantly undervalues our assets. This presentation should give you an understanding as to why we believe that this is so and we are undervalued. Now to the presentation. I will skip the disclaimer and competent person statement as this is on the website and familiar to most of you. The investment and opportunity in Alien Metals. Alien has a diverse range of projects in iron ore, in copper, nickel, and platinum group metals, in silver, and in lithium. In the Hancock project, we own 90% of the Hancock proper, and within that project, we'll talk about West Hancock or Mallina, as you might have known it, and Vivash and Brockman, which are other tenements with iron ore, which have significant potential. The Pinderi Hills project, again, 100% owned, covers 180 sq km in really unexplored world-class geological setting. Our silver project, again, the Elizabeth Hill project, is one of the highest-grade silver mines in Australia and has a 4.5 million ounce silver potential. The lithium project we joint ventured in 2024, which, one, de-risks the project from an Alien Metals perspective, and also enables our joint venture partner to pay for the minimum costs of maintaining those tenements, which is not insubstantial. The board and executive management. My background is not geological. I have 30 years experience in finance, and my expertise really is in financing and structuring transactions. Rob will give you some background before he talks a bit about Pinderi. He has more than 30 years or 40 years experience in the mining and exploration industry and has built some significant value in a number of projects. Elizabeth Henson is our U.K.-based director. She spent many, many years with Pricewaterhouse, and I'm hoping that we get to a point where we use her expertise because Liz is an expert in international tax. We still have Alwyn Vorster as a technical advisor on the iron ore project. I might address here a number of questions that shareholders have raised in relation to the appointment of a CEO. We've been actively looking for the latter part of 2024 and early 2025 for a full-time chief executive or chief operating officer. We've interviewed many outstanding candidates, and those discussions are ongoing. Having said that, I would say that we have an extremely competent in-house geological team. We have very capable external consultants and advisors who have been working with us diligently on moving the Alien projects forward in 2024. Sorry, I'll just go back to the previous slide, if I'm able to do that. Our key value drivers in the three projects that we have, which I've outlined, are further exploration and development. We'll go in some detail in terms of what we've undertaken in 2024. All of these projects require further funding for development. Our preferred option is joint venture, because that will allow Alien and our shareholders to receive the significant value that we believe is in these projects, rather than raising capital on the market through additional placements which are shareholder dilutive. As shareholders are aware, we were close on a joint venture transaction in 2024, which we held back given a number of other opportunities that we received, and we are still in the process of reviewing. What were our achievements in 2024? The Hancock development study results came out in February 2024, indicating a net present value of $146 million, albeit that was at a price of $120 a ton. If you prorated that back to today's price, given our cost base of $85 per ton, that's a very significant number. We had the Hancock mining lease granted for a 21-year term, and we concluded a mining agreement with the native title party. We have a number of permitting assignments to go through before this project will get into production, and we undertook an ethnographic survey in 2024 of proposed mining areas. We've had a number of questions in relation to the West Hancock tenement, where we had an objection which was making granting of that license difficult. We made application for three tenements to enable us to overcome that BHP objection, and we expect that that license will be granted shortly. We've undertaken further exploration mapping on the under-explored Vivash and Brockman tenements in 2024. As you would be aware, we undertook the joint venture with Errawarra on the lithium project, which, as I indicated, saves Alien approximately AUD 400,000 a year in that they meet the minimum tenement commitments. Errawarra also invested half a million dollars in Alien Metals, augmenting our funding. Following the appointment of Rob Mosig during 2024, we've undertaken a significant amount of additional exploration within the Pinderi Hills project area with a view to identifying drill targets, and an announcement in relation to that work will come out shortly. We achieved a government grant of AUD 120,000 through the EIS Exploration Incentive Scheme for Pinderi Hills, which I guess indicates a third party's confidence in the value of this project. Moving to the Hancock iron ore project. As I said, effectively, this is three projects. It's got Hancock and West Hancock within the same project area, and both are underexplored. As you would be aware, in relation to the West Hancock project, we cannot undertake further exploration until that tenement is granted shortly, and that is a project for 2025. On Hancock proper, significant work has been done on understanding the costs of moving this project into production. Mining, crushing, transport, and shipping contracts have been determined, which provide a good basis for moving forward quickly when the permitting is complete. The iron ore price, as we know, is stable at just over $100 a ton. During the year, it has been as high as $135 a ton. As you can see from this slide, the Hancock project is all about location, location. We have around us all the significant partners, players in the iron ore space. From Hancock Prospecting, Rio Tinto, BHP and the Fortescue Metals Group. As indicated, a number of heritage clearances need to be completed on the Alien Metals ground to move it forward. Funding, and ideally joint venture party funding, is a key to when we can expect production. Just some highlights on the project economics, which came out in the development study. Currently, a JORC resource of 8.4 million tons, but at above 60% iron ore. It's open pit, it's got a low CapEx, and there is significant additional potential for tonnage, both on the Hancock tenement proper, in other ridges in Hancock West, and again, on the Vivash and Brockman tenements, which are underexplored. Finally, on Hancock West, you can see the area circled in the middle of your screen. Its geology is very similar to the Sirius deposit, which is up in the right-hand corner of the Hancock project. As indicated, we expect the tenement will be granted in at least Q1 2025, and we can expect to commence exploration on that license. At this point, I will hand over to Rob to take us through the platinum group metals project. Thank you, Guy. Thanks very much. Good morning. My name is Rob Mosig. I've been a director of Alien for some eight months. I'm a geologist, a humble geologist. Experience has been in mineralization emanating from the mantle, some 150 km below us. Mineralization such as platinum group metals and diamonds emanate from this area. In particular, I've spent a lot of time at the Munni Munni intrusion and environs. A very, very exciting location for maybe the next platinum mine or the first platinum mine for Australia. Delighted to give a bit of a brief overview of Pinderi. The first indicator that I'd like to show is from these metal price graphs. We can see that silver has been in demand with many new uses, especially in the solar panel industry, where demand has probably influenced the 20% increase that's occurred in recent times. Platinum and palladium prices are steady, but with continued demand. Indeed, the escalating power and labor costs in South Africa, whom are the dominant PGM producers, they place pressure on finding cheaper alternative PGM sources, such as in Australia. Additionally, the decline in the palladium production from the Stillwater Montana resource, combined with the sanctions affecting the Norilsk, too, the PGM production, bode for a near future increase in platinum group metals demand and prices, I believe. As this map indicates, in essence, Pinderi is a 180 sq km tenure containing a PGM resource, a remnant silver resource, and absolutely super exploration potential for copper, nickel, as well as additional silver and PGM deposits. Going a bit deeper into the geology. The main focus of the Pinderi project is the Munni Munni Intrusive Complex. This hosts both platinum group metals and the exciting Elizabeth Hill pure silver deposit on its northeastern contact. The Munni Munni intrusion is one of the largest mafic, ultramafic intrusions in Australia, with a thickness of over 6 kilometers. In particular, Alien now commands title to over 90% of this intrusion, and it's the first time that this almost entire area has been held by one company. A very important holding indeed. In terms of nearby mine sites, Pinderi sits proximate to the giant Azure lithium resource at Andover. Additionally, Pinderi is nearby to the De Grey Hemi gold deposit to the northeast. In recent times, the Pilbara region has come into blossom, and there are numerous new discoveries of world-class metals deposits. During 2024, Alien has accelerated the exploration momentum at Pinderi. Alien Metals' Exploration Manager, Bradley Toms, has been the driving force in further dissecting the economic parameters into five significant localities. The first is the Cadgerina Dyke. This is a massive feature, undoubtedly the feeder zone, which has supplied the platinum group metals and nickel mineralization within this region. The Cadgerina Dyke remains very much underexplored. Recently, last year, we conducted our first foray at this locality with a ground-borne EM survey. We await the geophysical results with interest, and later in the second quarter of this year, we plan to carry out further detailed rock chip and soil programs across this feature. Another significant feature is Judy's Reef. This is another very much unexplored feature containing platinum group metals and copper anomaly. While similar to the Ferguson platinum group reef to the north, which hosts the main resource, Judy's Reef is under shallow overburden cover to the northwest, and this locality will be subjected to geophysical and rock chip sampling in 2025. Yet another significant feature, the Munni Munni Fault. This is a very interesting north-northeasterly trending structure, which has only recently been identified as the most important and potentially fundamental link between deep-seated structure and nickel, copper, and platinum group metal mineralization in this region. The fourth significant focus are the historic high-grade PGM locations. During our review last year of the previous drilling on Munni Munni, Alien identified at least two high-grade PGM locations with grades averaging over 7-9 grams per ton, 3E PGMs. The 3E, in this particular case, being platinum, palladium, and rhodium. These grades are typical of the early Bushveld mining operations in South Africa. Our activities here will focus on how and why these purple patches occur and whether we can locate more. Finally, the fifth one, the Elizabeth Hill silver occurrence. Well, a mine that was high-graded and produced over 1 million ounces of silver in just one year of operation. Very much unfinished business here for Alien, and about which I will further elaborate in the next slide. Our Elizabeth Hill silver occurrence is very much an enigma. An unconfirmed but pretty possible remnant resource of some 47,000 tons grading 2,700 grams per ton silver appear to remain in the deposit. The mineralization appears to be intimately associated with the Munni Munni intrusion and the Elizabeth Hill fault. We need to find vectors now to find additional mineralization, more Elizabeth Hills, and also understand what's remaining and whether it's worthwhile to mine the existing shaft. We anticipate that the down-hole EM surveys that we did this year, and combined with our intention to dewater the shaft to establish further geological vectors, is the main aim here. It's a very exciting opportunity that we have here. Finally, before I hand back to Guy, just a very brief note on lithium in the same area. As I mentioned earlier, almost adjacent to our Pinderi project is the Andover Complex. This hosts the recently discovered 100 million tons of lithium oxide. Our Pinderi contains vast areas of pegmatitic intrusions, which remain totally unexplored and are identical to the Andover lithium-bearing pegmatites. Alien has shared the lithium potential of Pinderi with Errawarra Resources under a joint venture. Joint ventures are an important mechanism for juniors such as Alien, and they enable Alien to conserve funds and focus solely on the silver, platinum group metals, nickel, and copper. These latter commodities will be the focus for Alien in 2025, either via sole funding or possibly additional joint ventures. That's my presentation. I would like to hand back to Guy, and happy to talk further as need be. Over to you, Guy. Thanks, Rob. What is the outlook for 2025? I think in addressing this slide, it'll actually answer some of the questions that were pre-submitted. Before I go there, I would say quite honestly that we have received a number of unsolicited proposals over the last six months, for all of these projects, both in terms of joint venture and outright sale. On the Hancock project, while initial expectations for production lines may have been optimistic, the value of the iron ore portfolio has been enhanced with the progress that we have made over the last year. In 2025, yes, we will continue to explore the funding options that are on the table. We will continue to move forward on permitting, and we will continue to move forward on exploration. On another question in relation to the joint venture where in, I think it was circa mid or third quarter of 2024, we were fairly far down the track in terms of completing legal documentation. Why did we bring that to a close or put it on hold? That joint venture party is still there. The reason was, with the drop in iron ore price to approximately $80-$85 a ton, the way that agreement was designed, that project would have stalled soon after executing the agreements. We need to find the best funding option, which adds the maximum value for shareholders, not the first option. Pinderi Hills, I think Rob has covered that well. Again, we are, in fact, even this week, discussing with potential parties, joint ventures on Pinderi Hills. At the same time, as you know, in 2024, we undertook exploration. Some of those results are due imminently, which will be the subject of an RNS. Potentially depending on those results, potentially a resource update. Elizabeth Hill, I'd say, is more definitive. It has received, given the strong interest in silver and the movement in the silver price, the strongest interest over the last six months. We would hope to conclude a joint venture transaction within this quarter. Why is that important? Because it will provide Alien with funding to enable us to move some of the other projects forward. Why Alien? We covered the diversity of our projects early on in the webinar. Hancock Iron Ore, both in terms of its resource, 8 million ton resource has significant potential to grow to 20 million tons plus. As we indicated, all tenements, Hancock West, Vivash and Brockman are significantly underexplored. I think Rob has covered Pinderi Hills well. It is a huge land holding and significant potential and of course, significant interest from potential parties. The lithium joint venture, as we've indicated, lithium price has fallen dramatically in the last year. Some 90%. It will recover. We've de-risked it by doing the joint venture. We've saved cost. We have an experienced board and management team, notwithstanding that we don't have a CEO visibly driving progress, we have an experienced team continuing to drive progress. I would draw your attention to the Zeus report, which has just been published, by David Seers and Paul Smith, indicating a fair value of 1.1p. That's 13 times the current price. That's a function of where we are in the exploration life cycle. As you come to feasibility and development, it's more testing than when you're exploring for blue sky, when sometimes the share price doesn't have much substance. We are undervalued, and we believe that we will see a recovery in the year ahead. I might go to some of those group questions, and then answer additional questions that have been raised in the webinar. If you'd just bear with me, I will find them. Guy, Rob, perhaps just while you're getting those questions ready, if I may just jump back in there, and thank you very much indeed for your presentation this morning. Ladies and gentlemen, please do continue to submit your questions just by using the Q&A tab that's situated on the right-hand corner of your screen. Just while the team take a few moments to review those questions that were submitted already, I'd just like to remind you that a recording of this presentation, along with a copy of the slides and the published Q&A, can all be accessed via your investor dashboard. Guy, Rob, we obviously received a number of questions that were both pre-submitted ahead of today's event, as well as a number that have come in throughout your presentation this morning as well. Firstly, thank you to all of those on the call for taking the time to submit their questions. Guy, Rob, at this point, if I may now hand back to you just to read out those questions and give your responses where it's appropriate to do so. If I pick up from you at the end, that'd be great. Thank you. Thank you, Jake. I think one of the questions or a number of the questions related to the next steps on Hancock, given that expectations were that we would be in production a lot earlier than 2025. I think we've covered that off in the presentation. A number of permitting matters to get through, but funding is the critical one and partnering with the right partners who have the experience to bring this project into production. A number of questions in relation to Windfield, a company that vended the Hancock project into Alien initially and who are owners of 10%. I guess there are two parts to Windfield. One is an uplift payment that is due on the original transaction, and a buyout of their 10%. Suffice to say that we have had, during the, I guess, discussion process with potential joint venture parties, we've had discussions with Windfield. Windfield will not be an impediment to us doing the best deal for all shareholders. They, together with Alien, have an interest in extracting maximum value for the Hancock project, which they believe is significantly undervalued, and they will not stand in Alien's way in terms of being able to do a transaction. Our plan for 2025 over the three tenements, I believe that we've covered that in a slide. Value in terms of fall in the share price, I would reiterate, there's been no change in the asset base since Alien was listed. The market is the market. There is significant value in these assets. We have diverse projects which de-risk the Alien position. We need partners with experience in execution across all of the projects. We will move when we locate the right partners. The Zeus report is an indicator of where research analysts see the share price. I would reiterate that we are where we are because of where we are to some extent. Yes, there's been an unrealistic expectation on where we'd get Hancock into production, but it's also where we are in the development cycle. A number of questions in relation to leadership and CEO. I would reiterate, we have a competent team driving the business forward, notwithstanding that there's no identified CEO or COO. Yes, we have interviewed a number of excellent candidates over the last six months. We are competing in a market that is buoyant, and we've got a relatively low market cap. That said, the diversity of our projects and the potential for these corporate transactions is appealing to a number of senior people. The West Hancock tenement split, I think we've covered, and we're now in a position that on tenement ground, we'll be able to commence exploration with no impediments or objection from BHP. Some questions that have been raised during the webinar, if you'll bear with me. When is the next share placement? The board have no intention at the moment to go to the market to raise capital. As I indicated, one of the transactions that we will convert in Q1 will generate cash for Alien to allow us to move forward. You'll excuse me while I read through the questions, much of which are along the theme that we've discussed. Just an overall comment. Those questions are, when will we execute this? How long will it take to get a JV on that? While we are assessing various project opportunities, we will continue to move these projects forward. By doing that, moving them towards production, moving them to greater resources, we will continue to add value. When the joint venture transaction, the right one, arrives and we are satisfied, we will execute. There's a question here, an appropriate question in relation to an offtake agreement that we put out in an RNS about August 2022 with Anglo American. That has expired, but I would say that in addition to the offers that we have for joint venture and outright purchase, we have an option for an offtake with a significant player in that field, and that is on the table. Rob, question for you. I think the answer is no. Was Pinderi Hills drilled in 2024? The answer is no exploration work, but with results to come. Rob? That's correct, Guy. There was no drilling in Pinderi Hills, but the precursors were all set up, as I mentioned. We've got a lot of precursors ready for drilling later this year perhaps, or as when need be. Yeah. Well, to those shareholders and investors that have taken the time to spend with us this evening, we thank you very much for your attendance. We hope to do a lot better in our communication in 2025. We understand that it was an issue in 2024. There is significant activity that we're undertaking, and we look forward to communicating that in the 2025 year. Thank you very much again. Perfect. That's great, Guy. Rob, if I may just jump back in there. Thank you very much indeed for addressing all of those questions that came in from investors and also for updating investors as well this morning. Could I please ask investors not to close this session, as you will now be automatically redirected for the opportunity to provide your feedback in order that the management team can really better understand your views and expectations. This will only take a few moments to complete, but I'm sure will be greatly valued by the company. On behalf of the management team of Alien Metals Limited, we would like to thank you for attending today's presentation. That now concludes today's session. Good morning to you all.