LETTER FROM THE CHAIRMAN
Dear fellow shareholders,
The Yangibana project (Project) has made significant progress over the last year towards development as a high-grade neodymium and praseodymium mine.
The November 2017 Definitive Feasibility Study (DFS) detailed the Project, which will produce a Mixed Rare Earth Carbonate (MREC) rich in Neodymium (Nd) and Praseodymium (Pr), critical materials used in the manufacture of permanent magnets to drive electric motors used in Electric Vehicles (EV), wind turbines, and other high-tech applications. The DFS produced a maiden Ore Reserve of 5.15 million tonnes for the Bald Hill and Fraser's deposits, which underpinned the first 5 years of mine life. The DFS also included an additional production target (APT) produced from the Yangibana West, Yangibana, Auer and Auer North deposits.
The Project is comprised of significant deposits across the tenement holdings - Bald Hill, Fraser's, Yangibana West, Yangibana, Auer and Auer North - all 100% owned by Hastings (note that these areas mentioned herein represent approximately 50sqkm out of a total of 650sqkm of exploration tenure). In addition, Hastings holds a controlling 70% stake in other tenements held in a Joint Venture arrangement in the greater Yangibana area, although these were not considered in the DFS study. These Joint Venture tenements may be readily developed as upside to increase the mine life of the Project in the future.
Subsequent to the DFS probable ore reserves were increased to approximately 7.7 million tonnes at 1.13%TREO including 0.43%Nd2O3+Pr6O11, and further drilling subsequent to year end will move this towards the target of 10 million tonnes, a ten year mine life, by early 2019.
Significant effort was made during the year to establish and further develop relationships with potential customers, leading to the execution of four Memorandum of Understanding (MOU) offtake agreements, including thyssenkrupp Raw Materials GmbH. The total of four MOUs signed represent approximately 73% of planned MREC annual production of 15,000 tonnes from the Project. The Company is now in the process of documenting and negotiating detailed commercial agreements.
The development of a mine requires the support of many stakeholders and Hastings was delighted to sign a Native Title Agreement for its entire Project portfolio of 650 sq km with the Thiin-Mah Warriyangka, Tharrkari and Jiwarli People (TMWTJ) during the year. The agreement provides commercial benefits to the TMWTJ people and also enables the Company to work with the community in providing education, training and employment opportunities including assisting in the establishment of complementary sustainable local businesses.
A further major milestone was achieved with the filing of the Environmental Review Document (ERD) with the Environmental Protection Agency (EPA) of Western Australia. The document confirms that the Project can meet the scope of work outlined in the EPA approved environmental scoping document and Hastings commitment to managing the Project in a socially acceptable and environmentally responsible manner. The ERD is a substantial comprehensive document and it is expected that an EPA recommendation will be forthcoming in early 2019. The EPA has now approved the release of the Environmental Review Document for the four week public review period (1 - 28 October, 2018).
Our substantial progress and development of the Project has not been possible without the ongoing support of our shareholders and new shareholders. During the year the Company raised $33.5 million (including closure of the share purchase plan in July 2017: $4.4m at 8.6 cents per share, a placement of $16.2m August 2017 at 20 cents per share, and a rights issue of $12.2m in February 2018 at 31 cents per share), and a further $14 million through a placement at 21 cents per share subsequent to financial year end.
A balance of equity and debt financing will be required to fund the Project development and to this end Hastings has signed an exclusive mandate with German KfW IPEX-bank to provide project finance loan advisory services in relation to securing approval from Euler Hermes Aktiengesellschaft ("Euler Hermes") as mandated by the German Federal Government as administrators of the Untied Loan Guarantee scheme ("UFK Cover"). Upon approval from Euler Hermes and the authorised credit committees of KfW IPEX-Bank, KfW IPEX-Bank has indicated that it will provide senior debt facilities of up to A$250m for the project. It is anticipated that further equity issues will complement the debt financing currently underway which is targeted to close in 2Q next year.
We are making steady progress towards our mid 2020 production timeline with the construction of the accommodation village well underway and the imminent placement of an order for an Acid Bake Rotary Kiln, a critical piece of long lead time equipment, with FLSmidth.
We anticipate strong demand in the years ahead for permanent magnets and electric motors. Government policies for efficient and clean energy combined with pollution control are the catalyst for the anticipated ramp up in demand. Investments in wind energy continues to grow substantially world wide and numerous automotive manufacturers are announcing new EV or hybrid EV models coming on stream in the next year or two. We are living in an era of the e-mobility revolution and witnessing this transition where EV will become main stream mode of transport.
On behalf of the board, I thank all of our stakeholders for their continued support as we remain committed in our objective of bringing this Project with its exceptionally high Nd-Pr content of rare earth into production.
To view the Annual Report, please visit:
About Hastings Technology Metals Ltd
Hastings Technology Metals Ltd (ASX:HAS) is a leading Australian rare earths company, with two rare earths projects hosting JORC-compliant resources in Western Australia.
- The Yangibana Project hosts Probable Reserves totaling 5.15 million tonnes at 1.12% TREO including 0.45% Nd2O3+Pr6O11 within JORC Resources totalling 21.0 million tonnes at 1.17% TREO (comprising Measured Resources of 3.9 million tonnes at 1.19% TREO, Indicated Resources of 8.6 million tonnes at 1.25% TREO and Inferred Resources of 8.4 million tonnes at 1.09% TREO), including 0.40% Nd2O3+Pr6O11.
- The Brockman deposit contains JORC Indicated and Inferred Resources totalling 41.4 million tonnes (comprising 32.3mt Indicated Resources and 9.1mt Inferred Resources) at 0.21% TREO, including 0.18% HREO, plus 0.36% Nb2O5 and 0.90% ZrO2.
- Rare earths are critical to a wide variety of current and new technologies, including smart phones, electric vehicles, wind turbines and energy efficient light bulbs.
- The Company aims to capitalise on the strong demand for rare earths permanent magnets created by expanding new technologies.
Chief Operating Officer
General Manager Exploration