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Gary Billingsley, C.A.,P.Eng.,P.Geo. – Executive Chairman Jim Engdahl - President & CEO December 8, 2009
Safe Harbour Statement
Cautionary Note On Forward-Looking Statements
Forward-looking statements include, but are not limited to, GWMG’s continued advancement of its mineral exploration and development programs. When using this presentation, the words “potential”, “anticipate”, “estimate”, “forecast”, “believe”, “expect”, “may”, “project”, “plan” and similar expressions are intended to be among the statements to identify forward-looking statements. Although GWMG believes that its expectations reflected in these forward-looking statements are reasonable, such statements involve risk and uncertainties and no assurance can be given that actual results will be consistent with these forward-looking statements. Disclaimer GWMG shall not be liable or responsible for any claim or damage, directly or indirectly, special or consequential, incurred by the user arising out of the interpretation, reliance upon or other use of the information contained in this presentation.
5 mm $1.04 $58.299 warrants with an average strike price of $0.19 and 7.18 (2) As at December 2.0% 5.1 mm $0.8 mm 1.9% / 12.557.6% 52 week High / Low: (2) Cash on hand: GWG 52 Week Price Volume History (1) Includes 9.46 / $0.Company Overview Our Vision: “We seek to become the first vertically integrated rare earth elements (“REE”) producer in North America and a leader in the industry outside of China” Capitalization Overview: Shares Outstanding / Fully Diluted (1) Share Price Market Cap Debt: Insider Holdings / Fully Diluted Institutional Holdings: (1) (2) 201.3 mm $2. 2009 .000 options with an average strike price of $0.29 $0.575.0 mm / 218.
Engdahl .1% (0.1% (0. has played a major role in the discovery of diamond-bearing kimberlite 0. Pearson .6% (1. Hogan .President. on three separate occasions.3%) James B.6%) David Kennedy . Metallurgy 0.6%) 0.Vice-President. CEO and Director Has more than 30 years of experience in corporate finance at the executive level Was intimately involved in financing two producing gold mines in Saskatchewan 0.Vice-President.4%) nil .3% (0. Operations Baodong Zhao .Key Personnel Holdings % basic (% fully diluted) Gary Billingsley .5%) Audrey McMillan . Metals And Alloys Has worked with rare-earth containing materials since 1976 and has had published several papers on the technology and economics of rare earth alloy production 0. Exploration Richard O.Managing Director.3%) 0.Chief Financial Officer John G.Manager.Executive Chairman Professional engineer and geoscientist with more than 30 years experience in the mineral industry Has been directly involved with putting Saskatchewan's largest gold mine into production and.0% (0.4% (0.
China continues to further restrict exports and increase export tariffs -10% since 2004 to 43. development and commercialization of “heavy” REE (“HREE”) opportunities outside of China Great Western Minerals Group Ltd. Terbium.600t in 2007 -13% to 38.888t in 2009 Raising export tariffs to 15-25% Major manufacturers have been making investments or entering into joint ventures across the globe in an attempt to secure reliable REE reserves Neo Material Technologies enters into a strategic partnership with Mitsubishi Corporation for the identification.000 tonnes by 2014. high-tech applications and defense systems REEs improve fuel consumption and emission control in the auto industry Hybrid technology is totally dependent upon Neodymium. Neodymium and Cerium for the Hybrid NiMH battery Europium. Praseodymium. and Yttrium are used for energy efficient light bulbs Strong Projected Strong Projected Growth Demand Growth in in Growth in Demand Demand for REEs for for REEs Strong Projected ▪ Total demand for REEs is expected to reach ~205. Dysprosium and Terbium for the hybrid electric motor and generator and Lanthanum.Industry Highlights REEsare Critical to REEs are Critical to REEs are Critical REEs are Critical to Emerging Emerging to Emerging Emerging Technologies Technologies Technologies Technologies ▪ ▪ ▪ ▪ REEs are critical inputs for many emerging green technologies.000t in 2008 -16% to 31. representing a CAGR of 10% from 2008 driven by strong demand for metal alloy and magnet applications REEs Supply Supply Constraints Supply Constraints Constraints Imposed byby Imposed by China Imposed China ▪ ▪ ▫ ▫ ▫ ▫ ▪ China China currently accounts for 97% of the world's total REE production As a result of the increasing appetite from Chinese manufacturers for REEs. and Toyota Tsusho Corporation have signed a letter of intent (“LOI”) to cooperate on exploration of HREE in Canada Surge in REE Investment Investment Activity Surge in REE Activity ▪ ▫ .
in which we have rights to 100% of the REE mined is scheduled to be in production by H2 2011 Management believes Rareco will be the first commercial grade REE producer outside of China Our manufacturing operations provides us with unparalleled REE metallurgy expertise outside of China The metallurgy of REE is extraordinary difficult. Benjamin River and Rareco projects Speed Market Speed to Market Speed toto to Market Speed to Market Speedto Market Speed toto Market Speed Market Speed Market Speed to Market Metallurgy Metallurgy Expertise Metallurgy Expertise Metallurgy Expertise Metallurgy Expertise Metallurgy Expertise Metallurgy Expertise Metallurgy Expertise Expertise ▪ ▫ ▪ Diversification Diversification Diversification Diversification Diversification Diversification Diversification ▫ Supported by Large Supported by Large Supported byby Large Supported Large Large Players Industry Industry Industry Players Industry Players Industry Players Supported by Players ▪ We have signed an LOI to cooperate on exploration of HREE in Canada with Toyota Tsusho Management Team Team Management Team Management ▪ We have a proven management team and board of directors with significant mining experience . a past producing mine. and separating and refining the REE requires significant expertise We are diversified both from a geographic standpoint with projects located in Canada. US and South Africa as well as the composition of our REE projects Our REE composition varies across projects with a heavy concentration of Dysprosium at our Douglas River and Benjamin River projects and Neodymium at our Hoidas Lake.Company Highlights Mine-to-Market Model Mine-to-Market Model Mine-to-Market Model Mine-to-Market Model Mine-to-Market Model Mine-to-Market Model Mine-to-Market Model Mine-to-Market Model Mine-to-Market Model ▪ ▫ ▫ ▫ ▫ ▪ ▪ We implement a unique "mine-to-market" business model Exploration and development of REE Owner of resource properties Owner of production facilities Supplier of rare earth metals and alloys Our Rareco project in South Africa.
LYC Potential Production By 2012 Potential Production By 2014 . South Africa Great Western Minerals Nolan’s . Saskatchewan Canada Great Western Minerals Mountain Pass.Molycorp Bayan Obo China Steenkampskraal. California USA .Global Rare Earth Projects There are a limited number of Rare Earth deposits that have 2014 production potential Thor Lake. Northwest Territories Canada Avalon Hoidas Lake.ARU Mount Weld .
management estimates and public filings (2) Currently undertaking a A$450 mm equity offering after Australia’s Foreign Investment Review Board rejected China Non-Ferrous Mining Co.Global REE Production Schedule Global REE Production Schedule(1) 2010 Rareco (GWG) Hoidas Lake (GWG) Deep Sands (GWG) Benjamin River (GWG) Douglas River (GWG) Mt. Pass (Molycorp) Bokan-Dotson Ridge (UCU) Thor Lake (AVL) Strange Lake (QUC) Bear Lodge (RES) (1) Source: Company websites. Weld (LYC)(2) Nolans Bore (ARU) Mt.’s proposed $400mm investment into Lynas Corporation on September 24 2011 2012 2013 2014 +2014 .
NB. to GWG for a 10 year period. SK. Douglas River. Equity ownership is expected to be 30%-50% . GWG and Rareco will negotiate a supply agreement under which 100% of the rare earth ore mined and processed will be made available by Rareco. after which a new supply agreement can be negotiated.Our Project Locations Canada Hoidas Lake. % Owned LREO HREO A Global REE Presence 100% 100% 100%(1) 96% 0% 70% 4% 100% 30% South Africa Steenkampskraal % Owned LREO HREO 100%(3) 92% 8% USA Deep Sands % Owned LREO HREO 25%(2) 85% 15% (1) Entered into an option agreement with a third party to acquire a 100% working interest (2) Holds a 5% interest in REE contained in a heavy mineral sands project in Utah (3) Upon the updated feasibility study.SK. Benjamin River.
29% Estimated Capital Expenditure (US$) Mine.000 $15.Steenkampskraal.000.500 47.000. grind & leach Equipment costs Separation plant Total Infrastructure Located close to roads and 80 miles to port Currently we have 3 parties interested in buying the thorium byproduct.000 $30.000 $1.000 REO% 16.500.000 .000. concentrate. South Africa REE Project Resource Estimate Underground-in situ Underground-broken Surface Tonnes 117.74% 5% 8.000 85. alternatively we have a license to store thorium in the mine incased in cement We have made an application to re-permit the mine under new mining laws We expect to receive an indication of approval by November of 2009 Black Empowerment Group will own 26% and we already have approval to employ its members Development Timeline: Production and financing decision in Q1 2010 Production in H2 2011 $12.
000.000. mill-grinding.808 1.000 $30.000 $35.568% 2.596 REO% 2.000 $25. flotation Camp.000.Hoidas Lake.027 286.000.000 $115. ancillary Saskatoon leach plant Separation plant Total Infrastructure Transportation study expected to be completed by Q1 2010 Environmental impact and baseline studies completed Subject to a 1.597.000 Estimated Capital Expenditure Mine.349% 2.8% NSR capped at $1.000.000.000 Development Timeline: Metallurgy and transportation study completed by Q1 2010 Setup demonstration plant in Q2 2010 Pre-feasibility Q4 2010 Bankable feasibility study and production and financing decision by Q2 2011 Production in H1 2014 (1) NI 43-101 compliant estimate .139% (US$) $25. Saskatchewan Rare Earth Project Resource Estimate(1) Measured Indicated Inferred Tonnes 963.
000 drill holes Development Timeline: Analyzing phase I exploration results and expect commencement of phase II exploration by Q2 2010 .000 REO% 0.19 Located close to roads.Deep Sands.8% 15% US$14. power to site and within 50 miles to rail Magnetite sands allow for cost effective mechanical consolidation to separate REE GWG owns 25% of REEs with the right to acquire the remaining 75% from Titan Mining (private) Phase I exploration drilling program completed with ~1.25% Target Resource Project Highlights Mineral sands with significant REO Significant Y + HREE content High REO value per Kg Infrastructure to 0. Utah Rare Earth Project Tonnes 500.000.
power to site and within 50 miles to port Have an option agreement with a third party to acquire a 100% working interest Likely to be phosphate mine with REE by-product. Shea Creek Uranium discovery 100% Y + HREE GWG samples to 8.Douglas River.75% TREO / 1.15% Dy2O3 Located close to roads. Fe byproduct also likely Unique in that it does not contain Thorium or Uranium 30% Y + HREE by proportion Development Timeline: Development Timeline: Exploration expected to commence by Q4 2009 Drilling underway . SK & Benjamin River. New Brunswick Douglas River Benjamin River Located within 10 miles to road-near Cluff Lake Uranium Mine.
Weld (LYC) Steenkampskraal Baotou (Bao Steel) Mt.28 13.85 10.31 20.53 10.66 11.42 12.03 15.Our Projects are Enriched in Higher Value REE’s Project Douglas River Benjamin River Thor Lake (AVL) Deep Sands Hoidas Lake Nolans Bore (ARU) Mt.00 8. 2009 Value REO US$/kg(1) 33.90 .27 9.55 19. Pass (Molycorp) Bear Lodge (RES) (1) Asian Metal as at November 30.
00 31. US (%) Steenkampskraal South Africa (%) Benjamin River NB.000 13.08 0.01 0.63 0.61 3.06 8. CA (%) Douglas River SK.31 Not av.11 100.81 17.000 29.71 1.29 11.73 14.62 12.000 15. Not av.50 1.37 0.40 3.00 0.41 0.24 1.35 0.00 2.24 0.67 5.274.07 0.88 4.00 0.100.34 2.00 TREO Contained Resources t(1) Value REO (US$/Kg)(2) 95.28 22. 33.57 20.28 19.00 46. CA (%) Deep Sands UT. Total In-situ Value (US$ 000s) (1) Non NI 43-101 compliant estimate except Hoidas shown at 0% REE cutoff (2) Asian Metal as at November 30.28 0.00 0.11 0.05 0.58 1.44 2.57 0. 2009 .44 5.97 2.131 Not av.22 3.00 0.05 0.07 100.99 17.81 0.42 1.08 0.55 Not av.62 20.066 11.Our Project REO Compositions by Weight Oxide Cerium Oxide CeO2 Neodymium Oxide Nd2O3 Lanthanum Oxide La2O3 Praseodymium Oxide Pr6O11 Samarium Oxide Sm2O3 Gadolinium Oxide Gd2O3 Yttrium Oxide Y2O3 Europium Oxide Eu2O3 Dysprosium Oxide Dy2O3 Erbium Oxide Er2O3 Terbium Oxide Tb4O7 Ytterbium Oxide Yb2O3 Holmium Oxide Ho2O3 Thulium Oxide Tm2O3 Hoidas SK.83 3.00 0.900 1.00 80.08 0.54 0.00 100.22 100.07 0.00 100.90 0.05 0.03 1.30 4.17 0.64 2.68 0.53 335.30 1.67 16.250.76 0.72 0. 20.00 0.67 21.18 0.00 41.22 1. CA (%) 46.67 5.67 0.27 0.
000 0 04 05 06 07 08 f f f f 09 10 f 20 20 20 20 20 20 20 20 20 20 20 14 12 11 13 f China Supply ROW Supply Global Demand China Demand We have a high concentration of Neodymium at our Hoidas Lake.000 150. IMCOA .R E O 200.000 D e m a n d tp a .000 50. Dysprosium and Neodymium.000 100.Rare Earths Elements Global Supply and Demand In the coming years. Rareco and Benjamin River projects and a high concentration of Dysprosium at our Douglas River project Source: Dudley J Kingsnorth. worldwide demand for rare earth elements. is expected to exceed supply unless major new sources are developed 250. especially Terbium.
Upcoming Milestones 2009 Q4 Rareco Q1 Finalization of production and financing decision Completion of metallurgy and transportation study Setup demonstration plant Commencement of phase II exploration program Commencement of exploration program Commencement of exploration program Completion of pre-feasibility study 2010 Q2 Q3 Q4 Hoidas Lake Deep Sands Benjamin River Douglas River .
6 mm in revenue GWTI has recently been awarded a US$110.000 defense contract with the central research and development organization for the US Department of Defense to develop a set of aluminum based high strength alloys .Why Do We Own Manufacturing Our manufacturing facilities provide us with a direct relationship with the end-users of REEs as well as with unparalleled REE metallurgy expertise outside of China. Value-added capability means increased margins that protect the mining side from price fluctuations Last year. LCM generated $12 mm in revenue and $1. We have the value added knowledge.6 mm in EBITDA and GWTI generated $0.
samarium. alloys and powders Utilizes rare earths and aluminum. lanthanum. dysprosium 1. nickel and titanium Birkenhead. yttrium. UK Vacuum induction melting. cobalt.500 t alloy/year (capacity) 250 t alloy/year (current) $110mm . copper. cerium. praseodymium. ingots and rods Special low oxygen powders Single crystal isotopes Rare earth special elements Brazing alloys Raney Ni alloys Scrap metal recovery End Consumers Automotive. nickel.Our 100% Owned Manufacturing Operations Less Common Metals Location: Description: Great Western Technologies Troy.100 t alloy/year (capacity) 430 t alloy/year (current) Raw Materials Inputs: Production Capacity Revenue at Full Capacity End Products 2. including magneto-optic and magnetostrictive materials. and defense sectors . terbium. cobalt. iron. aerospace.$160mm Neodymium iron boron and samarium cobalt alloys for the permanent magnet industry Other rare earth alloys. hydrogen storage systems and master alloys High purity rare earth metals Sputtering targets Ultra high purity indium High purity custom made alloys Sputtering targets Precious metals Special high purity alloys foils. co-reduction of metals and alloys to ingot and powder Elements (amongst others): iron. gadolinium. alternative and nuclear energy. neodymium. Michigan Vacuum induction melting and hydrogen processing of metals.
Company Websites and Published Information (1) Adjusted for completion of the private placement of $ 15.40 per share completed September 14 and overallotment of $0.Comparable Companies Analysis Source: Bloomberg.7 million at $0.5 million completed September 29 .5 million at $2.30 per share announced October 8 (3) Adjusted for completion of the private placement of $ 6.30 per share and $5 million at $2.65 per flow-through share completed September 17 (2) Assumes completion of private placement totaling $7 million at $2.
Conclusion We could be the first producer of REE outside of China through our Rareco option in South Africa. with Hoidas Lake to follow not far behind We are the only fully integrated mine-to-market REE operator outside of China We have unique blend of experience through all phases of the REE production cycle from exploration to manufacturing super alloys and other materials We have end users that are already our clients We were the first REE company in North America focusing strictly on REEs and a “Mine To Market” business model .
Appendix An Overview of Rare Earth Elements .
catalytic. are highest in demand Periodic Table of REEs 21 Sc 39 Y 57 La 58 59 60 61 62 63 64 65 66 67 68 69 70 71 Ce Pr Nd Pm Sm Eu Gd Tb Dy Ho Er Tm Yb Lu .What are Rare Earth Elements? REEs are a unique group of metallic elements with unique properties: chemical. Dysprosium and Terbium. 2009 . such as Neodymium.Light Rare Earths . metallurgic and optical REEs used for high strength magnets.Heavy Rare Earths . magnetic.Other Rare Metals Source: Asian Metal as at August 19. electrical.
Yb Dy. Sm. Eu Environmental Hybrid vehicles Auto catalytic converter Diesel additives Miniaturization Technology Disk drives Digital cameras Flat panel displays . Ce.Key Applications of Rare Earth Elements REEs are critical and enabling for many emerging Green Energy technologies. plug-in hybrid electric vehicles. such as hybrid cars. Y. La Dy. Tb. Lu. Nd. solar panels. Tb. missile guidance systems and cell phones Application Compact fluorescent lights Weight reduction in cars Higher oil refinery yields Elements Energy Efficiency Er. Nd. Lu. High Tech applications and Defense Systems. La. Gd. Pr. wind power turbines.
000 Application Catalysts Glass Additive Polishing Powder Metal Alloys Magnets Phosphors & Pigments Ceramics Other Total Source: Dudley J Kingsnorth.000 21-25.000 205-215.000 14. IMCOA .000 10-11.a.000 14-15.Applications are Driving Strong Forecasted Demand 2008 Demand by Application Growth Forecast by Application Growth rate 2013 demand % p. tonnes 6-8% 1% 6-8% 15-20% 10-13% 7-9% 7-9% 7-9% 8-11% 32-36.000 13-14.000 45-50.000 50-55.
000 .000 tpa) Beach sand processed by Indian Rare Earths.The Future Supply Picture Looks Bleak China accounts for 97% of the world’s current REE production Currently operating at capacity No significant non-Chinese supply sources available today Small and limited production in Russia (3. subsidiary of Atomic Energy Agency (7% thorium banned elsewhere) Most REE deposits have thorium content and hence are unextractable unless a buyer of thorium is found Development projects currently under study Mainly at an early stage with long lead times to realisation New Projects face economic and environmental hurdles .4.
The Chinese are Changing the Game China wants to create major wind. Guangdong. Fujian Fragile resource due to over exploitation Fragile environment due to mining methods Source: Metal-Pages . solar and hybrid car industries Chinese Government Policy Strategic value of REO well understood Mining quota of 74. Hunan. 2006) Export quotas declining annually -10% since 2004 to 43.680t (2% vs.888t in 2009 Raising export tariffs to 15-25% Key interest in maintaining long-term domestic supply for the Chinese manufacturing industry Force high tech companies that need these REEs to relocate production to China Chinese Production Limits Largest REO mine Baotou (50% of world supply) operating at capacity REO is a by-product of iron mining Future ore selection forecast to result in lower REO grades Sichuan Environmental issues Underground mining Jiangxi.600t in 2007 -13% to 38.000t in 2008 -16% to 31.
Australia rejected a $400 million proposal for China NonFerrous Metal Mining to take a majority stake in Lynas Corporation (Reuters) April 20.Great Western Minerals Group Ltd. Traxys North America LLC and Carint Group LLC (Press Release) . LLC) to company owned by Resource Capital Funds.China further tightens rare earth production and exports and outlines plans to impose a total ban on the export of some rare earths materials. 2009 .Chevron Mining agrees to sell Mountain Pass rare earth mining operations (Molycorp Minerals. Pegasus Partners IV. Terbium and Yttrium (australianrareearths.$24 million equity investment agreement between Arafura Resources Limited and the Jiangsu Eastern China Non-Ferrous Metals Investment Holding Company was sealed today (Mineweb) July 21. Chinese and Japanese have been trying to secure reliable REE reserves globally September 24. Inc. These include Dysprosium. 2009 .Recent Developments in the REE Markets August 18. 2008 .com) Over the past year.. and Toyota Tsusho Corporation sign letter of intent to cooperate on exploration HREE projects (Press Release) September 10. LP. 2009 . 2009 . The Goldman Sachs Group.Mitsubishi agrees to participate in Neo Material Technologies’ quest for rare earths outside of China (Press Release) July 21. 2009 .
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