Tellus Holdings Ltd – Chandler Salt Mine Project

17th March 2014Regional Mining Seminar - Alice SpringsChamber of Commerce NT & Central Australian RIC MOU Minerals Council of Australia & Australian Government

Salt / Minerals

Tellus Group

Storage

Industrial & Edible Salt Minerals -Fertiliser Storage / DisposalRenewable Energy Salt Mine Tourism

Spin Off Salt Business

Chandler Project (NT)

Complementary

Sandy Ridge Project (WA)

Kaolin

Minerals

2

Contents

Tellus Holdings Ltd

Chandler Salt Mine Project

Opportunities for Alice Springs and NT

Procurement process

How to engage with Tellus

Appendix

1

2

3

4

5

A

3

Tellus’ Company Structure

▪ NT 7 EL’s 879 km2 Granted 100% Chandler project

▪ WA 1 EL 59 km2 Granted 100% Sandy Ridge project

1

100% owned

50% ownedChandler Salt Mine

Project

Sandy Ridge Kaolin Mine

Project

Mining operations

Salt / kaolin marketing

Storage operations

International business

Mt Walton Project

Office

Chandler Salt Mine Project

Sandy Ridge Kaolin Mine Project

ClayVault WA Government Storage Project

Tokyo Office

Sydney

Perth

Darwin

Adelaide

▪ Australian public unlisted company

▪ Incorporated 2009

Corporate structure Project location

Tenements

4

Tellus’ Strategy1

+ Refer to Important Notice and Disclaimer and Media Release 26 March

2013 for Competent Person Statement and Exploration Target Definition

• Strategy – integratedbusiness model• Development of underground rock

salt and clay deposits• Two revenue streams• Minerals business – export

focused (creates the voids)• Storage/backfill business (uses

the voids) - blue chip customers

Chandler salt mine• JORC Exploration Target:

4.5-5 Billion tons halite+• Definitive feasibility study

Stage 1• 1M tpa salt & mineral

(fertiliser) sales• Storage/backfill sales• 25 year mine life

Sandy Ridge kaolin mine• JORC Exploration Target:

179 - 512 Million tons kaolin• Scoping study

Stage 1• Study to confirm kaolin

quality, sales & mine plan• Storage/backfill sales• 25 year mine life

Source: Prognos 2012 GermanySource: GHH – German salt mine

5

2Tellus’ Strategy – In line with international best practice

Region Underground salt caverns and mined rooms in salt beds

North America

>100 projects (400 brined caverns)

Europe 49 Projects (Germany 30 salt/backfill mines)

Asia 13 projects (China 6)

Russia 9 projects

Africa 1 project in Morocco

South America

1 project in Brazil

Total > 150 projects incl. < 500 caverns/ mines

Table source: SMRI 2003-5: Table 3,4 & 5

Figure source: Fig 1 US WIPP, 2 Germany K+S, 3 UK Compass Minerals, 4 Germany K+S Entsorgung

Safe, proven, long term business model

1Underground salt mine layout 2Salt and fertiliser mining 3Voids used for archive storage 4Voids used for waste storage

Rock salt is globally recognized to be a suitable host rock for permanent

storage. Source: Prognos 2012 Germany – UNEP Report

6

Tellus’ Corporate Team - Experienced management team1

Experienced corporate team Experienced commodity team Experienced waste management team

Mine development engineer BHP, Rio, Xstrata, Anglo Coal

Ex BD Coffey Environmental, IBM

Head-AMP Capital Investors, CEO Tenix Infrast. & Lend Lease Capital

Philip GarlingGroup Chairman

Ron SiftonTellus RockVault NED

Duncan van der MerweGroup MD

Brett BoyntonGroup FD

Noel DavisMD ClayVault WA

Robert CharterBusiness Development

Joe LuxfordTellus Mining

Mining (Gencor CSM Energy), waste & infrastructure (BOS, Nobles)

Ex UBS, FBR Capital & Credit Suisse, Signature Gold

Ex FD Newalta, Canada’s largest salt cavern waste storage operator

Ex WA Environmental Regulator, Managed only Class V waste facility

Ex BD Director Penrice Soda, roles ICI Australia, Merck, Ajax Chemicals

Ex GM Dampier Salt, Ex CEO of Albany Port (WA)

Mark ShepherdTellus RockVault NED

John CookTellus RockVault Chair

Michael CarterTellus Salt Sales

Bob EmeryTellus Salt Chair

Ex NSW Chief Mining Engineer, Ex MD Waste Service NSW

Ex MD Coffey WA, managed Australia’s only Class V waste facility

Akira HaradaTellus International NED

CEO MCN Corp Ex GM Okaru & Co, Japanese trading houses

Tellus consists of an experienced board and management team with key individuals having a proven track record developing

large complex mines and heavily regulated storage projects

Terra Search exploration managers

Jaime LiveseySenior Geologist

Chandler Project Overview

8

Chandler – Proposed Mine to Port

MineSalt &

mineral sales

Rail Port

Storage &

disposal sales

2

9

Chandler – Timetable2

GO-NO GO steps for key investment decision points

Critical milestones

10

Chandler - Mine Plan

Approvals – Stage 1 in placeStage 2 commenced (Draft EIS guidelines released)

Production -salt1M tpa salt and associated mineralsScale up depending on market

Mining method Underground, room and pillar designCut and blast mining

Room dimensions140mL x 10mW x 6mH 10m support pillar

Processing – Dry (crush, bag, ship), some wet

ManagementCore - owner operator Non core - alliance & contractor

Jobs Build (270), operational (70), indirect (240)

Historic spend A$7m (145 km seismic, 6.6 km core)

Budget – A$219m

2

PFS results: Project technically feasible, economically viable - no fatal flaws

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Chandler - Project Technical Team2

Tellus have pulled together a team of international and domestic experts

12

Chandler – Feasibility Studies2

Pre-feasibility study (FEL1/2)Scoping study (FEL1)

Definitive feasibility study (S2-FEL3)Definitive feasibility study (S1-FEL2/3)

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Chandler – Feasibility Studies2

Analysis confirms the raw product is a high gradeProcessing options are being examined to meet customer requirements and specifications

14

Ground and surface water studies Soil studies

Fauna studies Flora studies (local TO’s)

Chandler – Environmental Impact Studies2

21

Tellus using local service providers Tellus buying local supplies

Chandler - 266 recorded stakeholder contacts Tellus employing local aboriginal contractors

5Chandler – SHEC

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Chandler - DFS Stage 1 drilling

When drilling hit the top of the salt bed a rainbow came out

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Chandler - DFS Stage 1 drilling

Natural salt creep (safety case) Drilling bits

Comparing results to other historic wells Drilling 24/7

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Chandler - Looking out over proposed mine area

Drilling camp Proposed mine plant areaProposed portal

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Chandler - DFS Stage 1 camp – supplies and equipment

12 man camp with support vehicles, equipment and supplies

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Chandler- Site Visit

HON WILLEM WESTRA VAN HOLTHE Mines and Energy (DME)

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Safety briefing Health management in camp

Equipment for remote driving Personal protective equipment

Chandler – Health and safety

.

15

Chandler - Local communities near Tellus project infrastructure

Aboriginal community – Titjikala, 230 people, 15km away Alice Springs, 24,000 people, 120 km away

Darwin, 127,000 people Alice Springs, Tellus mine plan office and core shed

2

16

Opportunities for the Alice Springs region and NT

Category Pre mine Mine build Mine operations

Jobs Limited Mine & plant build Mine & plant operations

Training Limited work experience

Apprenticeships, traineeships, work experience

Apprenticeships, traineeships, work experience

Tellus Investment Studies (field work),supporting Alice as service hub

Capex (civils, plant &equip), supporting Alice as service hub

Sustaining capex & opex,supporting Alice as service hub

Business opportunities

Contractor labour, drilling, studies, equip. & supplies

Mine contractor services,equipment & supplies

Mine contractor services Equipment & suppliesSalt related spin off businesses

Sponsorships & trust

Sponsorships Sponsorships SponsorshipCommunity benefits trust

Environmental Work exp. (rangers) Work exp. (rangers) Offset program (ranger programs)

Infrastructure Industrial shed/ office

Improved roads, bridges, power, comm’s

Improved roads, bridges, power, comm’s, training & visitor centre

RoyaltiesTaxes & rates

CLC royalty CLC royalty Royalties – Government & CLCFederal, NT , Local taxes and rates

Tellus has a commitment to local employment, training and supply of equipment and services

3

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Opportunities – Local contracts awarded under DFS 1

Category Service / equipment provided Local

Industrial real estate Shed/ office rental & utilities

Studies - environmental contractors & TO’s Field surveys

Station / Landholder Earthworks machinery, accommodation

Mining service provider Camp supply

Wholesale fuel distributor Diesel supply

Vehicle rental supplier Vehicle rental

Freight provider Freight service

Geotechnical contractor Personnel

Camping & safety equipment supplier Field equipment supply

Vehicle service and parts provider Equipment supply

Signwriting service provider Signage

Helicopter charter service Charter flights

Accommodation & food and beverage Hotels, taxis, catering, room hire

Tellus has a commitment to local employment, training and supply of equipment and services

3

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Opportunities - Stakeholder Site Visits

Stakeholder group that attended site visits Local National Internat.

Alice Springs business representative groups

Mine contractor services & equipment suppliers

Station owners

Traditional owners and Central Land Council

Australian, Northern Territory and Local Government

Regulators

Media (ABC television and local newspaper)

International salt expert

Engineering, construction, operations & logistics contractors

Investors

Offtake customers

Tellus took the opportunity while drilling to host project stakeholders for Chandler site visits Site visits help develop project awareness and good relationships with stakeholders

3

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Tellus’ Procurement Life Cycle Process4

Equipment procurement lifecycle will differ to a services cycle

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How to engage with TellusInitial engagement is via registration with:

Industry Capability Network (ICN) www.chandlersaltmine.icn.org.au or contact ICN NT 08 8922 9422

ICN matches projects with potential suppliers

Tier I Primary contract –overarching contract

Tier II Secondary/ sub contracts

Category Evidence

Service

Business must demonstrate

Track record “deliver on spec, on time, within budget & value add

Capacity Human resources (experience , A team vs B team, availability) /equipment /supplies

Qualifications (certificates, licences & tickets- current and appropriate)

Financial viability

Insurances -Public Liability, PI, Vehicle, Workers Comp., Damage to Property

Policies (Environ., Quality, OH&S, local content, supporting local people)

Safety management plan and systems

Price Competitive in market comparison, value for money

Terms Contractual terms are acceptable (risk management)

Demonstrate track record, capacity, price competitive and risk management

28Chamber of Commerce, Local Business Employment and Government Reps at Site Visit

Chandler – Any Questions?5

Tellus is a Member

Appendix

30

All sampling, drilling, testing and analysis are conducted using rigorousQA/QC procedures to ensure reliability and validity of results

Chandler – Quality Assurance /Quality Control ProceduresA

31

Chandler - Salt & fertiliser products

Synesthetic

soda ash

Food / food

processing

FertilisersPotential for Potash,

Magnesium, Iodine,

Bromide, Lithium

minerals – confirmed in

new drilling

Chlor-alkali

Industrial fluxes

Water treatment

Animal feedstuffs

Specialty salts

A

32

Chandler –Storage/disposal business & commercial updateA

Archives DisposalStorageBulk commodity/ SES EquipmentK+S-German salt Mine pic 1-3Compass Minerals – Deep Storage

Recovery (Al flux salts)

Rooms created from mining used for safe storage and disposal (mining, oil and gas waste, no nuclear waste)

General Licensed

Type

UnloadingTesting & document control

Transport underground

Unloading in rooms (storage)

Disposal – containers backfilled

Disposal – rooms closed

Process flow

Using international “best practice”, tried and tested techniques

1 2 3 4 5 6

1

2

Source: Pic 1-6: K+S-German salt Mine

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Chandler – 6 skin safety case A Tellus ISO compliant

$140m insurance

Five engineered barriers and one natural salt barrier – 200-350m thick

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Chandler- Complementary Storage Business

Source & materials accepted Not accepted

Oil& Gas sector Nuclear waste

Mining sector Uranium mining waste

Manufacturing sector Infectious wastes

State Emergency Services Wastes that can react with clay

Agricultural sector Waste not properly containerised or sampled

A

Safety case –combination of man made and natural barriers