MAGNIS ENERGY TECHNOLOGIES LTD ABN 26 115 111 763
Suite 4.03, 1 Alfred Street
Sydney NSW 2000
TEL +61 2 8397 9888
FAX +61 2 8397 9801
info@magnis.com.au www.magnis.com.au
ASX Announcement 29 September 2015
Magnis Resources Limited (ASX: MNS) advises that the 2015 Annual Report is now available and is included in this announcement.
MNS have adopted the most recent Corporate Governance Principles and Recommendations (3rd edition) released by the Australian Securities Exchange Corporate Governance Council. The MNS Corporate Governance Statement is enclosed within the 2015 Annual Report and is available along with the Securities Trading Policy on the Company's website www.magnis.com.au
Yours Sincerely,
Douglas Richardson
Company Secretary
ANNUAL REPORT
ABN 26 115 111 763
F Poullas (Chairman)
J C Jooste-Jacobs
(Non-Executive Director)
S B Hunt
(Non-Executive Director)
P Tsegas
(Non-Executive Director)
F Houllis
D N Richardson
P C Tju
Suite 4.03, 1 Alfred Street Sydney NSW 2000 Australia
Tel +61 2 8397 9888 Fax +61 2 8397 9801
No 1, Pecanwood Apartments Plot No. MS/MAS/511 Masaki, Dar es Salaam, Tanzania
Tel +255 222 602 664 Fax +255 222 601 179
INTERNET ADDRESSwww.magnis.com.au
info@magnis.com.au
Link Market Services Level 1, 333 Collins Street
Melbourne VIC 3000 Australia
Tel 1300 554 474 Fax +61 3 9287 0303
Ernst & Young, 680 George Street Sydney NSW 2000 Australia
Tel +61 2 9248 5052
National Australia Bank Ltd Level 3, 255 George Street Sydney NSW 2000 Australia
Tel +61 2 9237 9958
Magnis Resources Limited shares (code MNS) are listed on the Australian Securities Exchange.
Magnis also has listed options (code MNSO) with an exercise price of 10 cents expiring 31 May 2017.
What is Magnis?
Magnis is an Australian based company focused on advancing the Nachu Graphite Project into production during the later stages of 2016. The Project is based
in south east Tanzania, circa 220km from the sea port town of Mtwara. The good proportion of super jumbo, jumbo and large flake natural graphite make the Project very unique and demands premium prices
as opposed to fine or amorphous flake graphite.
A recent Pre-Feasibility Study conducted shows
the Net Present Value of Nachu to be US$1.04B and currently there are two binding offtakes in place to supply 180,000tpa in aggregate for the next 5-10 years. A US$150m debt finance term sheet has been signed for engineering, procurement, construction and financing a 200,000tpa processing plant.
A Special Mining Licence and necessary
Contents
environmental permits have recently been issued to
Magnis to allow the Company to focus on finalising
project finance and commence the construction of processing plant and mining facilities.
The Company is well supported by an experienced board and management team with specific skills in the project development, from the exploration phase through to mining and production.
Annual General Meeting
The 2015 Annual General Meeting of the members of Magnis Resources Limited will be held at
The York Conference and Function Centre, Level 2, 99 York Street, Sydney NSW 2000 on Friday
6 November 2015 at 10:00am. A formal notice of meeting and proxy form will be mailed separately to all shareholders. Light refreshments will be served at the conclusion of the meeting.
Corporate directory 2
The company 3
Annual general meeting 3
Chairman's statement 4
Review of operations 5
Directors' report 16
Auditor's independence declaration 28
Corporate governance statement 29
Statement of profit or loss and
other comprehensive income 37
Statement of financial position 38
Statement of changes in equity 39
Statement of cash flows 40
Notes to the financial statements 41
Directors' declaration 63
Independent auditor's report 64
Additional shareholder information 66
Dear Shareholders,
The 2014/2015 Financial Year has been the most significant year in the history of our Company as we have gone from strength to strength.
The following major milestones were achieved:
Maiden JORC Resource for 156Mt @ 5.2% TGC;
Pre-Feasibility Study released. Economics show a NPV of US$1.04B using a 10% discount rate, resulting in a 84% IRR. Cash margins of over US$1,600/t;
Binding offtakes for 180,000tpa with SINOMA/ CNNMI and SINOSTEEL;
Financing Term Sheet
More recently we have achieved:
All environmental and mining approvals with the granting of our Special Mining License;
99.2% TGC concentrate produced for product below 300 microns, using a basic flotation while retaining our flake size distribution and recoveries.
It's really pleasing that we were able to hit all of our targets on schedule and it's great to see the market beginning to realise that Nachu is a World Class Project in every sense.
The future looks bright, being able to produce an amazing product, with our high purity and large flakes, for the very exciting, high growth lithium-ion battery sector.
The job is not done yet and we are working hard towards finalising project funding, western off-takes with household names and meeting our end goal
of production.
I want to take this opportunity to thank the Board members for their tireless efforts. Our Board is very hands on and without my colleagues the Company would not be in this strong position.
Our management team both locally and overseas have done a brilliant job, especially with all the metallurgical testwork, permitting work and community work overseas.
Working with the Tanzanian Government and the local community has been a real pleasure and I look forward to building on our strong relationship.
Not least of all, we also thank the ongoing support of our faithful shareholders, without which, none of the achievements of the past 12 months would be possible.
Lastly, we look forward to the next 12 months with great excitement as we watch closely the
developments within the lithium-ion battery sector and move from explorer to building the mine, plant and then production.
Frank Poullas
ChairmanThe past financial year provided key opportunities
for Magnis through the exploration and development efforts in Tanzania with the highlight being the
highly prospective graphite tenement at Nachu in the south-east of the country. The Company also has a diversified pipeline of uranium projects both in Australia and Africa.
Graphite Industry Developments
China is now a net importer of graphite on the back of growing consumption needs in their industry.
More recently, some existing mines closed or consolidated given environmental concerns and marginal economics. Further consolidation of these graphite mines are expected.
While supply out of China is slowing, demand is growing strongly through new technology from significant end users.
» Tesla continues to build their advanced battery (US$5billion) giga factory in the US
to better supply exponential growth in hybrid electric vehicle sales and battery storage units. Production from the factory is expected around late 2016. Tesla are aiming to more than double total world existing production of advanced battery power alone.
» Another major advancement announced by Tesla is the production of the Powerwall and Powerpack products to provide energy to households and business premises. Benchmark
Minerals Intelligence indicate that each Powerwall expects to contain 16kgs of spherical graphite derived from 40kgs of flake graphite concentrate. The larger 100kWh Powerpack batteries are expected to contain ten times the required amounts for graphite than the Powerwall.
» Other battery producers such as LG Chem, FoxConn and BYD and Boston Power are expected to have megafactories up and running by 2020 as production capacity of lithium-ion batteries is anticipated to more than triple.
As the Nachu Graphite Project progresses, the Board is focused on the growth of the Company to
support the expected growth in the graphite or battery powered industries.
(MAGNIS 100%), TANZANIA
The Nachu Project is located near Ruangwa,
in Southern Tanzania and approximately 200km to the Tanzanian port of Mtwara.
In the past 12 months to 30 June 2015 (or where indicated otherwise) an extensive exploration and delineation programme was undertaken and
achieved. Flowing from these major achievements, the Company achieved the following milestones:
Maiden Mineral Resource defined in November 2014
The maiden JORC resource for the Nachu Graphite Project was released in November 2014 on schedule.
The Mineral Resource Estimate was carried out by independent mining consultancy firm AMC Consultants Pty Ltd.
Key Points:
Mineral Resource Estimate of 156Mt at 5.2% graphitic carbon (Cg) at 3% Cg cut-off grade.
Mineral Resource is inclusive of a total of 104Mt Measured and Indicated Resource and represents 66% of Maiden Mineral Resource Estimate to date.
Over 8 Mt of contained graphite in the Mineral Resource.
Mineral Resource derived from only 2% of Nachu tenement land area.
The total Mineral Resource is reported in accordance with the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code, 2012).
The Nachu tenement covers approximately 199 km2 in southern Tanzania. The Mineral Resource is split into five deposits (Block B, D, F, FSL & J) with mineralisation hosted in graphitic schist within a sequence of meta-sedimentary schists with minor un-mineralised dolomitic marble and gneisses within the greater Mozambique Metamorphic Belt. All deposits have mineralisation at or near surface.
The modelled resource depths vary between deposits with over 85% of the defined total resource less than 150m from surface.
Deposit | Category | Oxidation | Mt | %Cg |
Measured | Oxide | 0.2 | 5.2 | |
Primary | 3.7 | 5.6 | ||
All Blocks >3% Cg | Indicated | Oxide Primary | 4 96 | 5.5 5.1 |
Inferred | Oxide | 2 | 5.6 | |
Primary | 51 | 5.7 | ||
Sub Total | All Categories | Oxide Primary | 6 150 | 5.4 5.2 |
All | All Categories | All | 156 | 5.2 |
Table 1 Nachu Graphite Global Mineral Resource Estimate as at 26 November 2014
B | D | F | FSL | J | |||||||
Block | COG %Cg | Tonnage Mt | Grade %Cg | Tonnage Mt | Grade %Cg | Tonnage Mt | Grade %Cg | Tonnage Mt | Grade %Cg | Tonnage Mt | Grade %wCg |
Measured | Oxide | 3.0 | 0.2 | 5.2 | ||||||||
Primary | 3.0 | 3.7 | 5.6 | |||||||||
Indicated | Oxide | 3.0 | 0.2 | 6.5 | 3 | 4.8 | 0.2 | 5.4 | 0.7 | 8.3 | ||
Primary | 3.0 | 6.6 | 6.3 | 75 | 4.7 | 4.9 | 5.1 | 9 | 8.1 | |||
Inferred | Oxide | 3.0 | 0.1 | 5 | 0.7 | 5.9 | 1 | 5.1 | 0.01 | 3.2 | 0.04 | 10.1 |
Primary | 3.0 | 0.8 | 5 | 19.5 | 5.9 | 27 | 5.0 | 0.9 | 4.2 | 3.2 | 10.2 | |
Sub Total | 7.6 | 6.1 | 20.2 | 5.9 | 106 | 4.8 | 9.8 | 5.2 | 12.9 | 8.6 |
Table 2 Nachu Graphite Project Mineral Resource Estimate by Block
(Notes for Tables 1 & 2. (a) Cut off 3% graphitic carbon; (b) Rounding may result in differences in total and average grades)
PAGE 8 MAGNIS RESOURCES LIMITED ANNUAL REPORT 2015
Project Pre-Feasibility Study completed
Completion of the Nachu Graphite Project Study was conducted by Australian engineering consultancy firm BatteryLimits Pty Ltd and South African engineering company Logiman. The project financials show an after tax Net Present Value of $US1.04b (using a discount rate of 10%) and 84% Internal Rate of Return and a capital payback period of 1.4 years.
Two major offtake agreements signed
China based Sinosteel Liaoning signed a binding off- take agreement with the Company for 100,000tpa for 10 years with an option to extend for a further 5 years. Graphite prices will be linked to market prices under the terms, and Sinosteel will process the graphite
for the electric vehicle market. Sinosteel has been involved in the graphite industry for decades and has over eight graphite production facilities producing over 220,000tpa.
In the past few months samples were sent to Sinosteel to be tested at its Graphite Processing Plant. These samples were derived from large scale metallurgical work that resulted in an average grade
over 95%TGC, with the majority of the product in Super Jumbo, Jumbo and Large categories.
China based SINOMA (a subsidiary of major state owned enterprise China National Materials Group Corporation) has signed an off-take agreement with MNS for 80,000tpa for 5 years with an option to extend. Graphite price will be linked to market prices under the terms. The agreement followed
SINOMA's evaluation of graphite samples sent from the Company and following the MOU for off-take that was signed on 11 July 2014.
Project Finance for Nachu
A term sheet with offtake partner SINOMA was signed and announced to the market at the conclusion of the March 2015 quarter. The framework for the term sheet was based on the production
of 200,000 tonnes per annum of graphite concentrate with SINOMA proposing to provide finance, engineering goods and services including
- mechanical, civil, electrical, instrumentation, piping specifications, construction drawings, construction and project management.
Discussions with SINOMA are continuing on the project finance and the Company is also in
discussions and investigating other options with various parties with reference to certain financing aspects of the Nachu Graphite Project.
Sales of the future production have been based on the two offtakes that total 180,000tpa. These offtakes with SINOMA and Sinosteel Liaoning are the largest
in the graphite sector.
Metallurgical Test work
Significant metallurgical results were achieved through the past 12 months and this has continued into the early period of this new financial year. The Company announced up to 88% of product was in the Super Jumbo (+500 microns), Jumbo (+300 microns) and Large (+180 microns) flake categories. Graphite concentrate was produced consistently above 94% TGC using basic flotation with recoveries exceeding 96%. These metallurgical test results were enhanced
recently as announced to the ASX on 20 August 2015 whereby further refinement was achieved to maximise the value of the product to be produced at Nachu.
A -300 micron graphite concentrate of greater than 99%TGC was produced without chemical purification whilst maintaining the recovery and grade of the Super Jumbo and Jumbo product streams. This assists in the ability to supply a premium product at a substantially lower cost than other producers.
PAGE 10 MAGNIS RESOURCES LIMITED ANNUAL REPORT 2015
Environmental Certificate Granted
In August 2015, the Company announced that the Nachu Graphite Project had been issued with an Environmental Certificate by the National Environment Management Council (NEMC) of Tanzania.
The issue of the Environmental Certificate was based on the Environmental Impact Study (EIS) submitted to NEMC by the Company's consultants, MTL Consulting of Tanzania and Digby Wells Environmental of South Africa.
Special Mining Licence Issued
On 8 September 2015, the Company announced that a Special Mining Licence (SML) SML 550/2015 for the Nachu Graphite Project had been granted by the Ministry of Energy and Minerals (MEM) of Tanzania.
The granting of the SML is a key approval for the Project and allows the Company to move forward with finalising funding arrangements for further development. The SML was granted to Uranex Tanzania Ltd, the 100% owned Tanzanian subsidiary of Magnis.
To receive the grant of the SML, the Company's application was initially assessed by the MEM and then recommended to the Mining Advisory Board (MAB) for its endorsement.
A SML is a superior licence to a Mining Licence (ML) as it encompasses projects with an investment over US$100 million. The Company applied for the SML in preference to a standard ML for the following reasons:
A SML allows for a larger area to be approved than a ML. A ML is restricted to an area of
10 km2. Magnis has been granted an area of approximately 30km2.
A SML grants tenure for the period of the development or for a maximum period of 25 years. A ML only allows for a 10 year period.
|
distributed by
|
