Announcement PDF 7 May 2024 Andromeda Metals Limited ASX: ADN ASX Announcement 10/431 King William Street Adelaide, SA 5000 Tel:+61 8 7089 9800 ir@andromet.com.au ABN 75 061 503 375 Presentation at RIU Sydney Resources Roundup Andromeda Metals Limited (ASX: ADN) (Andromeda, the Company) advises that Bob Katsiouleris, Chief Executive Officer and Managing Director, will be presenting at the RIU Sydney Resources Round-up conference to be at the Hyatt Regency in Sydney, later today. A copy of the presentation follows this announcement, which investors will be able to view live via a livestreaming service, as follows: Date: Tuesday, 7 May 2024 Time: 9am AEST / 8:30am ACST To register: https://form.jotform.com/241181409854862 This announcement has been approved for release by the Board of Directors of Andromeda Metals Limited. For more information about the Company and its projects, please visit our website, www.andromet.com.au or contact: Manager, Investor Relations & Corporate Affairs Patrick Sinclair T: 08 7089 9819 M: 0403 708 431 E: Patrick.Sinclair@andromet.com.au Andromeda The Great White Mineral Company RIU Sydney Resources Round-up Conference 7 May 2024 ASX:ADN andromet.com.au Level 10, 431 King William Street, Adelaide, South Australia 5000 +61 8 7089 9800 Authorised for release by the CEO and Managing Director of Andromeda Metals Ltd Disclaimer and Qualifications No investment or financial product advice The information contained in this presentation does not constitute investment advice or financial product advice (nor taxation or legal advice) and is not intended to be used as the basis for making an investment decision or as a recommendation to acquire securities in Andromeda. The information contained in this presentation should not be relied upon as a recommendation or forecast by Andromeda (including as to the performance of Andromeda or its share price). Readers should obtain their own professional advice and carry out their own independent investigations and assessment of the information in this presentation (including any assumptions) before acting. An investment in Andromeda is subject to investment and other known and unknown risks, some of which are beyond the control of Andromeda including loss of income and principal invested. This presentation has been prepared without taking into account any particular person’s objectives, financial situation or needs; does not purport to identify the nature of specific market or other risks associated with any investment in the Company and does not constitute any legal, taxation, investment or accounting advice. An investment in Andromeda's securities is subject to investment and other known and unknown risks, some of which are beyond the control of Andromeda including loss of income and principal invested. Any investment decision should be based only on a person's own due diligence, inquiry, assessment and professional advice. Forward-looking statements This presentation contains or may contain certain forward-looking statements and comments about future events, that are based on Andromeda's beliefs, assumptions and expectations and on information currently available to management as at the date of this presentation. Often, but not always, forward-looking statements can generally be identified by the use of forward-looking words such as "may", "will", "expect", "plan", "believes", "estimate", "anticipate", "outlook", and "guidance", or similar expressions, and may include, without limitation, statements regarding plans, strategies and objectives of management, anticipated production and production potential, financial forecasts, product quality estimates of future Mineral Resources and Ore Reserves. Such statements are only expectations or beliefs and are subject to inherent risks and uncertainties which could cause actual values, results or performance achievements to differ materially from those expressed or implied in this presentation. Where Andromeda expresses or implies an expectation or belief as to future events or results, such expectation or belief is expressed in good faith and on a reasonable basis. No representation or warranty, express or implied, is made by Andromeda that the matters stated in this presentation will in fact be achieved or prove to be correct. Except as required by law, Andromeda undertakes no obligation to provide any additional or updated information or update any forward-looking statements whether on a result of new information, future events, results or otherwise. Readers are cautioned against placing undue reliance on forward-looking statements. These forwardlooking statements are not guarantees of future performance and involve known and unknown risks, uncertainties, assumptions and other important factors, many of which are beyond the control of Andromeda, the directors, and management of Andromeda. These factors include, but are not limited to difficulties in forecasting expected production quantities, the potential that any of Andromeda’s projects may experience technical, geological, metallurgical and mechanical problems, changes in market prices and other risks not anticipated by Andromeda, changes in exchange rate assumptions, changes in product pricing assumptions, major changes in mine plans and/or resources, changes in equipment life or capability, emergence of previously underestimated technical challenges, increased costs, and demand for production inputs. No warranty While care has been taken in preparing the information in this presentation, no representation or warranty, express or implied, is made as to the currency, accuracy, reliability, completeness or fairness of the information, opinions and conclusions contained in this presentation. The information in this presentation has been obtained from or based on sources believed by Andromeda to be reliable. This includes references to test results and reports completed by external parties. Information in this presentation which is attributed to, or derived from, a third-party source has not been independently checked or verified by Andromeda. No representation or warranty is made as to the accuracy, completeness or reliability of such information. To the maximum extent permitted by law, neither Andromeda nor its related corporations, Directors, officers, employees, advisers or agents, nor any other person, accepts any liability, including, without limitation, any liability arising from the use of this presentation or its contents or otherwise arising in connection with them, nor guarantees or makes any representations or warranties, express or implied, as to or takes responsibility for, the currency, accuracy, reliability, completeness or fairness of this presentation nor the information, opinions and conclusions contained in this presentation. Currency Unless otherwise stated, all cashflows in this presentation are in Australian dollars, are undiscounted and are in real terms (not subject to inflation/escalation factors). Assumptions and Notes for Financial Information on 2023 DFS and Stage 1A+ this presentation: Further details on the 2023 DFS and the assumptions and notes for the 2023 DFS can be found in the Company’s ASX Announcement ‘2023 Definitive Feasibility Study Results’ released on 24 August 2023. This should be read together with ASX Announcement dated 6 May 2024 “Andromeda expansion plans for The Great White Project” and “Clarification of expansion plans for The Great White Project”. There are no material changes to the Modifying Factors and assumptions underpinning the financial information for these matters, when read together. Third party data from consultants and government agencies Andromeda has relied on information provided by specialist consultants and government agencies in preparing this presentation. Andromeda has reviewed all information to the best of its ability but does not take responsibility for its accuracy or completeness, or reliability of such information. Competent Person's Statements The data in this presentation that relates to Mineral Resource estimates for The Great White Deposit and the Chairlift Deposit is based on information evaluated by Mr Eric Whittaker who is a Member of the Australasian Institute of Mining and Metallurgy (MAusIMM). Mr Whittaker is the Chief Geologist of Andromeda Metals Limited and has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the “JORC Code”). Mr Whittaker has over 30 years of experience in the mining industry. Mr Whittaker consents to the information in the form and context in which it appears. Mr Whittaker is entitled to participate in Andromeda’s employee incentive plan. The data in this presentation that relates to Mineral Reserve estimates for The Great White Deposit is based on information evaluated by Mr John Millbank who is a Member of the Australasian Institute of Mining and Metallurgy (MAusIMM). Mr Millbank is the Director of Proactive Mining Solutions Pty Ltd, an independent mining consultancy, and has sufficient experience relevant to the style of mineralisation and type of deposit under consideration, and to the activity which he is undertaking, to qualify as a Competent Person as defined in the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the “JORC Code”). Mr Millbank consents to the information contained in this presentation being used in the form and context in which it appears. Mr Millbank, or any of the entities he directly controls, has no financial interests in Andromeda Metals Ltd or any of its subsidiaries. Photographs, images, diagrams, charts and maps Photographs, images, diagrams, charts and maps used in this presentation are illustrative only and may not be drawn to scale. Unless otherwise stated, all data contained in the charts, graphs and tables is based on information available at the date of this presentation. Andromeda recognises the Traditional Custodians on whose land we are gathered here today, the Gadigal people of the Eora Nation, and on the lands on which Andromeda operates, being the Kaurna people of the Adelaide Plains and the Wirangu people of South Australia’s Eyre Peninsula. We pay our respects to their Elders past and present, and extend that respect to other Aboriginal and Torres Strait Islander people who are present today. Who is Andromeda? Australia’s next leading industrial minerals products company Flagship Project Kaolin Market Opportunity Strategy • The Great White Project (TGWP): high-grade kaolin asset delivering premium pricing • Development ready: All approvals received to commence development1 • Generational asset: 28-year life-of-mine (LOM) • Strong economics: $764m post-tax NPV8; 43% IRR; $193M Capex2 • Large Addressable Market: +US$4Bn market (with CAGR of 4%)3 • Challenged Supply: growing structural supply deficit for high-quality kaolin • Attractive long-term trend: 30 years of low volatility, above CPI price growth4 Andromeda high-grade kaolin Delivered into premium ceramics • Products, not commodities: “mine to market” response to “market to mine” demand • Targeting premium ceramics: validated by offtake partners at premium pricing • Finalising offtakes: for balance of Stage 1A+ production • Product & volume upside: targeting additional kaolin applications & LOM expansion 1. Mining Lease 6532 and Miscellaneous Purpose Lease 164 granted for a period of 35 years on 17 December 2021, by the South Australian Minister for Energy and Mining. Program for Environment Protection and Rehabilitation (PEPR) was approved on 01 March 2023, by South Australia’s Department for Energy and Mining. 2. ASX announcement 6 May 2024 “Andromeda expansion plans for The Great White Project” 3. Fortune Business Insights, "Kaolin Global Market Analysis, Insights and Forecast, 2024 2032" (2024) 4. Demonstrated by the US historical Kaolin and Ball Clay PPI published by the US Federal Reserve of St Louis. 4 The Great White Project Staged Delivery of a High-Value Project Characteristics 3-Stage Development with Robust Economics (NPV 8, real post-tax)1  High-grade 15.1Mt reserve supporting 28-year mine life Stage 2 ≅ 120,000 wmt pa  Brightness: ISO B 84.0  Simple mining with low strip ratio  Fully permitted to commence operations  Definitive feasibility study complete  Low capex hurdle  Staged development into market demand Cumulative LOM NPV/IRR >>>  Al/Fe ratio: 36.5/0.5 $764m 43% p.a. Capex $53m NPV(8) $242m IRR 57% p.a. Stage 1B ≅ 110,000 wmt pa $564m 40% p.a. Capex $57m NPV(8) $387m IRR 67% p.a. Stage 1A+ ≅ 100,000 wmt pa $206m 26% p.a. Capex $83m NPV(8) $206m IRR 26% p.a. Stage returns represent standalone investment decisions Cumulative capex $ 83m $140m $193m Cumulative capacity 100,000 wmt pa 210,000 wmt pa 330,000 wmt pa Est. 1st production from Stage 1A+ FID 10 months 24 months 42 months 1. Refer ADN ASX dated 6 May 2024 Andromeda expansion plans for The Great White Project 5 Stage 1A+ supported by binding offtakes Agreements for Andromeda’s premium ceramic kaolins • Contracted volumes plus Heads of Agreement (HOA), including Traxys which is at an advanced stage for conversion to a binding contract • Andromeda products pricing at a premium within the high-quality price range 2022 CIF Price Ranges for Kaolin (USD/t)5 Evergreen contract volumes>> 100,000 $900 90,000 $800 HOA $700 $600 70,000 $500 60,000 $400 50,000 $300 Contracted Wet metric tonnes per annum 80,000 40,000 30,000 20,000 $200 $100 $0 Spain Low Quality 10,000 0 1. 2. 3. 4. 5. 6. China Medium Quality High Quality Kaolin pricing observations: Year 1 Year 2 Plantan Yamada (contracted) Foshan Gaoming (contracted) IberoClays (contracted) Heads of Agreement Year 3 Refer ADN ASX dated 8 June 2023 titled Binding Offtake Agreement signed for Japanese market. Refer ADN ASX dated 18 October 2023 titled Binding Offtake Agreement signed for Chinese market. Refer ADN ASX dated 19 January 2024 titled Binding Sales and Distribution Agreement Signed with IberoClays. Refer ADN ASX dated 6 May 2024 Andromeda expansion plans for The Great White Project Derived from import data statistics in reports provided to Andromeda by Galesk Consultancy (for Spain) and TZMI (for China). KaMin LLC https://www.kaminllc.com/newsandpress.html • 2023 saw an additional ~10% increase by major global kaolin producers6 • Dispersed pricing for high-quality kaolin shows extent that value in use impacts prices • Narrow range for low quality kaolin prices denotes a more commoditised market 6 What is the Kaolin Investment Proposition? Attractive market characteristics De-Commoditised Market What is Kaolin? • White industrial clay utilised as a filler, additive and pigment in a broad variety of industries including ceramics, paper, paint, fibreglass and rubber. • Large global market: +30Mtpa, +US$4bn3. Positive Supply-Demand Dynamics • Not a commodity market – product market with large quality and price differentials • Once a product has an established customer base, demand and price growth is consistent – as demonstrated by US historical Kaolin and Ball Clay PPI (world’s largest exporter of high- quality kaolins) US Kaolin & Ball Clay Producer Price Index vs Median CPI1 Index value 1999 = 100 • Demand growth > global GDP • Highest growth segment in Andromeda’s targeted ceramics segment (+6% CAGR)4 • Long-term supply constraints driven by depletion of high-quality sources in all major production regions • War in Ukraine supply disruption expected to endure for 5-10 years, historically a leading source of highquality product to Italy and Spain Index value 2022 = 100 Global GDP vs kaolin demand – index value3 130 220 125 200 180 120 160 115 140 110 120 105 100 100 Kaolin & Ball Producer Price Index Median US CPI GDP, constant prices (market exhchange rates) (IMF, 2023) Global demand: kaolin for ceramics (Grandview 2023) 1. Federal Reserve of St Louis, 2. IMF and Grandview 3. Fortune Business Insights, "Kaolin Global Market Analysis, Insights and Forecast, 2024 2032" (2024) 4. TZMI HQ Kaolin Market Study 2024 Global demand: kaolin all sectors Grandview 2023) 7 What makes a premium ceramics kaolin? Delivering high “value in use” to customers • Value in use is the pricing basis for industrial minerals. It quantifies the profit realized through converting a raw material into a finished product. • Andromeda has established high value in use and premium price point with Spain’s Institute of Ceramic Technology and offtakers Characteristics of high value-in-use ceramic kaolin products Contributes to product structural and aesthetic properties  prices for final products Reduces defects during the manufacturing process  lower wastage & costs High Alumina High High Mechanical Quality Strength Kaolin Lower iron results in less discolouration  lower wastage & costs  prices for final products Low Iron Bright White Colour (whiteness) and opacity  lower wastage & costs  prices for final products Alberto Piquer González, CEO IberoClays “We are excited by the opportunity to launch Andromeda’s high-quality kaolin products for sale into the Mediterranean region. The emergence of The Great White Project as a new source of supply comes at a crucial time in global kaolin markets. Ongoing geopolitical supply disruptions, in addition to the depletion of traditional high-quality sources of supply, is seeing elevated pricing for high-quality kaolin that can be used in ceramics.” 8 Andromeda Product Suite Premium products for established markets + product development upside Current Products • Great White CRMTM line of premium ceramic kaolin products • Sold under offtakes which underpin our revenue line and NPV • Validated1 to offer exceptional value in use in porcelain tableware; large format porcelain ceramic tiles and glazes; and super and ultrawhite premium porcelain tiles and slabs. 2 x Products under Development • 2 products in development which offer higher potential value in use than Great White CRMTM, for zero net incremental capex Great White CRMTM as zircon replacement • Micronised zircon use in formulations for high end tiles and slabs • Test work by IberoClays and ITC supports a 10-20% reduction in zircon through replacement with Great White CRMTM Low Iron/Alumina ratio (Fe2O3/Al2O3) vs global kaolin samples1 • Current price of zircon at €2,300/t supporting high potential value in use and premium pricing • 100-200ktpa addressable market High dry mechanical strength is highly valued in large format porcelain tiles High whiteness retained which is valued in high quality porcelainware and ceramic tiles Great White HRMTM for concrete decarbonisation • Independent Study results: 1 kg of Great White HRM per cubic metre in standard concrete mix reduces cement and water use by ~8% • Estimated 7% reduction in carbon footprint • Strategic Alliance Agreement for commercialisation with Hallett Group • Conditional offtakes: subject to validation, with IberoClays (2k tpa)2 and IMCD (10k tpa)3 1. As determined by testing conducted on Great White CRM by IberoClays and the Institute of Ceramic Technology (ITC), located at the University of Castellón in Spain. 2. Refer ADN ASX dated 19 January 2024 titled Binding Sales and Distribution Agreement Signed with IberoClays. 3. Refer ADN ASX dated 21 November 2022 titled Andromeda Signs Offtake Agreement for Great White Concrete Additives. 9 Developing an Industrial Minerals Company What are the key value drivers? What is required? Common Value Drivers Industrial Minerals Value Drivers Does Andromeda have what it takes? Technology Urbanisation High Quality Deposit High Brightness, High Alumina, Low Iron, High Mechanical Strength Experienced Board & Management In-house project team and board have successfully delivered projects Permitting Fully permitted to commence operations Economically Robust Feasibility A$764m post-tax NPV8; 43% IRR Favourable Capex Hurdle A$193m capex achievable for a junior and expended in 3 stages Clear Development Strategy 3 stage development in line with expected offtake volume growth Market to Mine Understanding Kaolin markets have multiple segments and product qualities. Andromeda has a clear understanding of where to play to extract maximum value. Mine to Market Response Ceramics product suite and mine plan developed in response to market. Product Validation Ceramics products validated by industry experts and customers. Offtake Strategy Firm volume and price offtakes (balance for 100% of Stage 1A+ in progress). Upside Product Development Technical validation of new products for zero incremental capex. 10 Our team Experienced Board & executive team to execute Andromeda’s strategy Board of Directors CEO Transition • Bob Katsiouleris stepping down for personal reasons on July 31. • Luke Anderson to start as CEO & Managing Director on August 1. Highly experienced industrial minerals & logistics executive: Mick Wilkes Independent NonExecutive Chair Bob Katsiouleris CEO & Managing Director Austen Perrin Non-Executive Director Sue-Ann Higgins Non-Executive Director Executive Management  CEO of One Rail Australia  CFO of OZ Minerals  CEO of Unimin Corporation, one of the largest industrial minerals company in North America No change in strategy. We remain committed to developing The Great White Project as a producer of premium kaolin for the ceramics industry Joe Ranford Chief Operating Officer Sarah Clarke General Counsel & Company Secretary Pascal Alexander-Bossy Chief Financial Officer 11 Andromeda The Great White Mineral Company For more information about the Company, please visit our website, www.andromet.com.au or contact: Patrick Sinclair Manager, Investor Relations & Corporate Affairs T: 08 7089 9819 M: 0403 708 431 E: Patrick.Sinclair@andromet.com.au