Post on 10-Apr-2018
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Proactive Investors One 2 One Investor Forum
Gary Billingsley, C.A.,P.Eng.,P.Geo. Executive Chairman
Jim Engdahl - President & CEO
December 8, 2009
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Safe Harbour Statement
Cautionary Note On Forward-Looking Statements
Forward-looking statements include, but are not limited to, GWMGs continued advancement of its mineral exploration anddevelopment 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 involverisk 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, incurredby the user arising out of the interpretation, reliance upon or other use of the information contained in this presentation.
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Our Vision:
We seek to become the first vertically integrated rare earth elements (REE) producer in NorthAmerica and a leader in the industry outside of China
Capitalization Overview:
Shares Outstanding / Fully Diluted (1)
Share Price (2)
52 week High / Low:
Market Cap (2)
Cash on hand:
Debt:
Insider Holdings / Fully Diluted (1)
201.0 mm / 218.1 mm
$0.29
$0.46 / $0.04
$58.3 mm
$2.5 mm
$1.8 mm
1.9% / 12.0%
Company Overview
Institutional Holdings: .
GWG 52 Week Price Volume History
(1) Includes 9,575,000 options with an average strike price of $0.19 and 7,557,299 warrants with an average strike price of $0.18(2) As at December 2, 2009
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Key Personnel
Holdings% basic (% fully diluted)
Gary Billingsley - Executive Chairman 0.6% (1.3%)
Professional engineer and geoscientist with more than 30 years experience in the mineralindustry
Has been directly involved with putting Saskatchewan's largest gold mine into production and,on three separate occasions, has played a major role in the discovery of diamond-bearing
kimberlite
James B. Engdahl - President, CEO and Director 0.1% (0.6%)
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
David Kennedy - Managing Director, Metals And Alloys 0.3% (0.5%)
Has worked with rare-earth containing materials since 1976 and has had published severalpapers on the technology and economics of rare earth alloy production
Audrey McMillan - Chief Financial Officer 0.0% (0.3%)
John G. Pearson - Vice-President, Exploration 0.4% (0.6%)
Richard O. Hogan - Vice-President, Operations 0.1% (0.4%)
Baodong Zhao - Manager, Metallurgy nil
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Industry Highlights
REEs are Critical toEmergingTechnologies
Strong ProjectedGrowth in Demandfor REEs
Total demand for REEs is expected to reach ~205,000 tonnes by 2014, representing a CAGR of 10% from 2008 driven bystrong demand for metal alloy and magnet applications
REEs are critical inputs for many emerging green technologies, high-tech applications and defense systems
REEs improve fuel consumption and emission control in the auto industry
Hybrid technology is totally dependent upon Neodymium, Praseodymium, Dysprosium and Terbium for the hybrid electricmotor and generator and Lanthanum, Neodymium and Cerium for the Hybrid NiMH battery
Europium, Terbium, and Yttrium are used for energy efficient light bulbs
China currently accounts for 97% of the world's total REE production
As a result of the increasing appetite from Chinese manufacturers for REEs, China continues to further restrict exports
REEs are Critical toEmergingTechnologies
Strong ProjectedGrowth in Demandfor REEs
REEs are Critical toEmergingTechnologies
Strong ProjectedGrowth in Demandfor REEs
REEs are Critical toEmergingTechnologies
Strong ProjectedGrowth in Demandfor REEs
REEs are Criticalto EmergingTechnologies
Strong ProjectedGrowth inDemand forREEs
Supply ConstraintsImposed by China
Surge in REEInvestment Activity
Major manufacturers have been making investments or entering into joint ventures across the globe in an attempt to securereliable REE reserves
Neo Material Technologies enters into a strategic partnership with Mitsubishi Corporation for the identification, developmentand commercialization of heavy REE (HREE) opportunities outside of China
Great Western Minerals Group Ltd. and Toyota Tsusho Corporation have signed a letter of intent (LOI) to cooperate onexploration of HREE in Canada
an ncrease expor ar s
-10% since 2004 to 43,600t in 2007 -13% to 38,000t in 2008
-16% to 31,888t in 2009
Raising export tariffs to 15-25%
Supply ConstraintsImposed by China
Surge in REE
InvestmentActivity
ConstraintsImposed byChina
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Company Highlights
Our manufacturing operations provides us with unparalleled REE metallurgy expertise outside of China
The metallurgy of REE is extraordinary difficult, and separating and refining the REE requires significant expertise
Our Rareco project in South Africa, a past producing mine, 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
Metallurgy Expertise
Mine-to-Market Model
Speed to Market
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
Mine-to-Market Model
Speed to Market
Metallurgy Expertise
Mine-to-Market Model
Speed to Market
Metallurgy Expertise
Mine-to-Market Model
Speed to Market
Metallurgy Expertise
Mine-to-Market Model
Speed to Market
Metallurgy Expertise
Mine-to-Market Model
Speed to Market
Mine-to-Market Model
Speed to Market
Metallurgy Expertise
Mine-to-Market Model
Speed to Market
Metallurgy Expertise
Mine-to-Market Model
Speed to Market
Metallurgy Expertise
Mine-to-Market Model
Speed to Market
MetallurgyExpertise
Mine-to-MarketModel
Speed to Market
Diversification
Supported by LargeIndustry Players
We have signed an LOI to cooperate on exploration of HREE in Canada with Toyota Tsusho
Management Team We have a proven management team and board of directors with significant mining experience
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, Benjamin River and Rareco projects
Diversification
Supported by LargeIndustry Players
Diversification
Management Team
Supported by LargeIndustry Players
DiversificationDiversification
Supported by LargeIndustry Players
Diversification
Management Team
Supported byLarge IndustryPlayers
Diversification
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Global Rare Earth Projects
There are a limited number of Rare Earth deposits that have 2014 productionpotential
Thor Lake, Northwest Territories CanadaAvalon
Thor Lake, Northwest Territories CanadaAvalon
Hoidas Lake, Saskatchewan CanadaGreat Western Minerals
Hoidas Lake, Saskatchewan CanadaGreat Western Minerals
Mountain Pass, California USA - MolycorpMountain Pass, California USA - Molycorp
Bayan Obo ChinaBayan Obo China
Potential Production By 2014
Steenkampskraal, South AfricaGreat Western Minerals
Steenkampskraal, South AfricaGreat Western Minerals
Potential Production By 2012
Nolans - ARUNolans - ARU
Mount Weld - LYCMount Weld - LYC
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Global REE Production Schedule
2010 2011 2012 2013 2014 +2014
Rareco (GWG)
Hoidas Lake (GWG)
Deep Sands (GWG)
Benjamin River (GWG)
Douglas River (GWG)
Global REE Production Schedule(1)
Mt. Weld (LYC)(2)
Nolans Bore (ARU)
Mt. Pass (Molycorp)
Bokan-Dotson Ridge (UCU)
Thor Lake (AVL)
Strange Lake (QUC)
Bear Lodge (RES)
(1) Source: Company websites, management estimates and public filings(2) Currently undertaking a A$450 mm equity offering after Australias Foreign Investment Review Board rejected
China Non-Ferrous Mining Co.s proposed $400mm investment into Lynas Corporation on September 24
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Our Project Locations
Canada % Owned LREO HREO
Hoidas Lake, SK. 100% 96% 4%
Douglas River,SK. 100% 0% 100%
Benjamin River,NB. 100%(1) 70% 30%
South Africa % Owned LREO HREO
A Global REE Presence
USA % Owned LREO HREO
Deep Sands 25%(2) 85% 15%
(1) Entered into an option agreement with a third party to acquire a 100% working interest(2) Holds a 5% interest in REE contained in a heavy mineral sands project in Utah(3) Upon the updated feasibility study, GWG and Rareco will negotiate a supply agreement under which 100% of the rare earth ore mined and processed will be made available by Rareco, to
GWG for a 10 year period, after which a new supply agreement can be negotiated. Equity ownership is expected to be 30%-50%
Steenkampskraal 100%(3) 92% 8%
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Steenkampskraal, South Africa REE Project
Resource Estimate Tonnes REO%
Underground-in situ 117,500 16.74%
Underground-broken 47,000 5%
Surface 85,000 8.29%
Estimated Capital Expenditure (US$)
Mine, concentrate, grind & leach $12,000,000
Equipment costs $1,500,000
Separation plant $15,000,000
Total $30,000,000
Infrastructure
Located close to roads and 80 miles to port
Currently we have 3 parties interested in buying the thorium byproduct; alternatively we have a license to store thoriumin the mine incased in cement
We have made an application to re-permit the mine under new mining laws
We expect to receive an indication of approval by November of 2009
Black Empowerment Group will own 26% and we already have approval to employ its members
Development Timeline:
Production and financing decision in Q1 2010
Production in H2 2011
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Hoidas Lake, Saskatchewan Rare Earth Project
Estimated Capital Expenditure (US$)
Mine, mill-grinding, flotation $25,000,000
Camp, ancillary $35,000,000
Saskatoon leach plant $25,000,000
Separation plant $30,000,000
Total $115,000,000
Resource Estimate(1) Tonnes REO%
Measured 963,808 2.568%
Indicated 1,597,027 2.349%
Inferred 286,596 2.139%
Infrastructure
Transportation study expected to be completed by Q1 2010
Environmental impact and baseline studies completed
Subject to a 1.8% NSR capped at $1,000,000
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
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Deep Sands, Utah Rare Earth Project
Project Highlights
Mineral sands with significant REO to 0.8%Significant Y + HREE content 15%
High REO value per Kg US$14.19
Infrastructure
Tonnes REO%
Target Resource 500,000,000 0.25%
,
rail
Magnetite sands allow for cost effective mechanical consolidation to separate REE
GWG owns 25% of REEs with the right to acquire the remaining 75% from Titan Mining (private)
Phase I exploration drilling program completed with ~1,000 drill holes
Development Timeline:
Analyzing phase I exploration results and expect commencement of phase II exploration by Q2 2010
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Douglas River, SK & Benjamin River, New Brunswick
Benjamin RiverDouglas River
Located within 10 miles to road-near Cluff LakeUranium Mine, Shea Creek Uranium discovery
100% Y + HREE
GWG samples to 8.75% TREO / 1.15% Dy2O3
Unique in that it does not contain Thorium or Uranium
Development Timeline:
Exploration expected to commence by Q4 2009
Located close to roads, power to site and within 50 miles to port
Have an option agreement with a third party to acquire a 100%working interest
Likely to be phosphate mine with REE by-product, Fe by-product also likely
30% Y + HREE by proportion
Development Timeline:
Drilling underway
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Our Projects are Enriched in Higher Value REEs
Project Value REO US$/kg(1)
Douglas River 33.31
Benjamin River 20.55
Thor Lake (AVL) 19.03
Deep Sands 15.28
Hoidas Lake 13.42
Nolans Bore (ARU) 12.85
Mt. Weld (LYC) 10.66
Steenkampskraal 11.53
Baotou (Bao Steel) 10.27
Mt. Pass (Molycorp) 9.00
Bear Lodge (RES) 8.90
(1) Asian Metal as at November 30, 2009
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Our Project REO Compositions by Weight
Oxide Hoidas Deep Sands Steenkampskraal Benjamin River Douglas RiverSK, CA UT, US South Africa NB, CA SK, CA(%) (%) (%) (%) (%)
Cerium Oxide CeO2 46.62 41.73 46.67 31.81 0.05
Neodymium Oxide Nd2O3 20.57 14.28 16.67 17.62 0.07
Lanthanum Oxide La2O3 20.44 22.30 21.67 12.88 0.01
Praseodymium Oxide Pr6O11 5.97 4.34 5.00 4.40 0.00
Samarium Oxide Sm2O3 2.71 2.44 2.50 3.61 0.00
Gadolinium Oxide Gd2O3 1.24 2.06 1.67 3.99 0.00
Yttrium Oxide Y2O3 1.17 8.90 5.00 17.81 80.37
Europium Oxide Eu2O3 0.54 0.30 0.08 0.22 0.29
Dysprosium Oxide Dy2O3 0.35 1.41 0.67 3.22 11.83
Erbium Oxide Er2O3 0.24 0.76 0.08 1.68 3.64
Terbium Oxide Tb4O7 0.11 0.28 0.08 0.58 2.03
Ytterbium Oxide Yb2O3 0.05 0.72 0.07 1.18 1.57
Holmium Oxide Ho2O3 0.00 0.27 0.05 0.63 0.00
Thulium Oxide Tm2O3 0.00 0.11 0.07 0.22 0.00
100.00 100.00 100.00 100.00 100.00
TREO Contained Resources t(1) 95,000 1,250,000 29,066 Not av. Not av.
Value REO (US$/Kg)(2) 13.42 15.28 11.53 20.55 33.31
Total In-situ Value (US$ 000s) 1,274,900 19,100,000 335,131 Not av. Not av.
(1) Non NI 43-101 compliant estimate except Hoidas shown at 0% REE cutoff(2) Asian Metal as at November 30, 2009
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Rare Earths Elements Global Supply and Demand
In the coming years, worldwide demand for rare earth elements, especially Terbium, Dysprosium and Neodymium,is expected to exceed supply unless major new sources are developed
100,000
150,000
200,000
250,000
Dem
and
tpa
-R
EO
We have a high concentration of Neodymium at our Hoidas Lake, Rareco and Benjamin Riverprojects and a high concentration of Dysprosium at our Douglas River project
Source: Dudley J Kingsnorth, IMCOA
0
,
2004
2005
2006
2007
2008
2009
f
2010
f
2011
f
2012
f
2013
f
2014
f
China Supply ROW Supply Global Demand China Demand
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Upcoming Milestones
2009 2010
Q4 Q1 Q2 Q3 Q4
Rareco
Finalization ofproduction and
financing
decision
Hoidas Lake
Completion ofmetallurgy andtransportation
study
Setupdemonstration
plant
Completion ofpre-feasibility
study
Commencement
Deep Sands
of phase II
explorationprogram
BenjaminRiver
Commencementof exploration
program
Douglas RiverCommencement
of explorationprogram
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Why Do We Own Manufacturing
Our manufacturing facilities provide us with a direct relationship with the end-users of REEs as well as withunparalleled REE metallurgy expertise outside of China. We have the value added knowledge.
Value-added capability means increased margins that protect the mining side from price fluctuations
Last year, LCM generated $12 mm in revenue and $1.6 mm in EBITDA and GWTI generated $0.6 mm in revenue
GWTI has recently been awarded a US$110,000 defense contract with the central research and development organization for theUS Department of Defense to develop a set of aluminum based high strength alloys
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Our 100% Owned Manufacturing Operations
Less Common Metals Great Western TechnologiesLocation: Birkenhead, UK Troy, Michigan
Description: Vacuum induction melting, co-reduction of metalsand alloys to ingot and powder
Vacuum induction melting and hydrogen processingof metals, alloys and powders
Raw MaterialsInputs:
Elements (amongst others): iron, cobalt, nickel,yttrium, lanthanum, cerium, praseodymium,
neodymium, samarium, gadolinium, terbium,dysprosium
Utilizes rare earths and aluminum, copper, cobalt,iron, nickel and titanium
ProductionCapacity
1,100 t alloy/year (capacity)430 t alloy/year (current)
2,500 t alloy/year (capacity)250 t alloy/year (current)
Revenue at FullCa acit
$110mm - $160mm
End Products Neodymium iron boron and samarium cobalt alloysfor the permanent magnet industry
Other rare earth alloys, including magneto-optic andmagnetostrictive materials, hydrogen storagesystems 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, 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, aerospace, alternative and nuclear energy, and defense sectors
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Comparable Companies Analysis
Source: Bloomberg, Company Websites and Published Information(1) Adjusted for completion of the private placement of $ 15.5 million at $2.30 per share and $5 million at $2.65 per flow-through share completedSeptember 17
(2) Assumes completion of private placement totaling $7 million at $2.30 per share announced October 8(3) Adjusted for completion of the private placement of $ 6.7 million at $0.40 per share completed September 14 and overallotment of $0.5 millioncompleted September 29
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Conclusion
We could be the first producer of REE outside of China through our Rarecooption 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 productioncycle 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
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Appendix An Overview of Rare Earth Elements
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What are Rare Earth Elements?
21
Sc
39
Y
57
La
REEs are a unique group of metallic elements with unique properties: chemical, catalytic, electrical, magnetic, metallurgic and optical
REEs used for high strength magnets, such as Neodymium, Dysprosium and Terbium, are highest in demand
Periodic Table of REEs
58
Ce59
Pr60
Nd61
Pm62
Sm63
Eu64
Gd65
Tb66
Dy67
Ho68
Er69
Tm70
Yb71
Lu
- Heavy Rare Earths
- Light Rare Earths- Other Rare Metals
Source: Asian Metal as at August 19, 2009
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Key Applications of Rare Earth Elements
REEs are critical and enabling for many emerging Green Energy technologies, High Tech applications and Defense Systems,such as hybrid cars, plug-in hybrid electric vehicles, wind power turbines, solar panels, missile guidance systems and cellphones
EnergyEnergyEfficiencyEfficiency
Application Elements
Compact fluorescent lights
Weight reduction in cars Higher oil refinery yields
Hybrid vehicles
Er, Tb, Y,Nd, Lu, La
D La Nd SmEnvironmentalEnvironmental
MiniaturizationMiniaturizationTechnologyTechnology
Auto catalytic converter
Diesel additives
Disk drives
Digital cameras
Flat panel displays
Tb, Pr, Ce, Yb
Dy, Gd, Lu,Eu
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Growth Forecast by Application2008 Demand by Application
Applications are Driving Strong Forecasted Demand
ApplicationGrowth rate
% p.a.2013 demand
tonnes
Catalysts 6-8% 32-36,000
Glass Additive 1% 14,000
Polishing Powder 6-8% 21-25,000
Metal Alloys 15-20% 50-55,000
Source: Dudley J Kingsnorth, IMCOA
agnets 10-13% 45-50,000
Phosphors & Pigments 7-9% 14-15,000
Ceramics 7-9% 10-11,000
Other 7-9% 13-14,000
Total 8-11% 205-215,000
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The Future Supply Picture Looks Bleak
China accounts for 97% of the worlds current REE production
Currently operating at capacity
No significant non-Chinese supply sources available todaySmall and limited production in Russia (3,000 - 4,000 tpa)
Beach sand processed by Indian Rare Earths, subsidiary of Atomic EnergyAgency (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
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Recent Developments in the REE MarketsAugust 18, 2009 - China further tightens rare earth production and exports and outlines
plans to impose a total ban on the export of some rare earths materials. These includeDysprosium, Terbium and Yttrium (australianrareearths.com)
Over the past year, Chinese and Japanese have been trying to secure reliable REEreserves globally
April 20, 2009 - $24 million equityinvestment agreement between ArafuraResources Limited and the Jiangsu
-
July 21, 2009 - Mitsubishi agrees to
participate in Neo Material Technologiesquest for rare earths outside of China(Press Release)
July 21, 2009 - Great Western MineralsGroup Ltd. and Toyota TsushoCorporation sign letter of intent to
September 24, 2009 - Australia rejected a
$400 million proposal for China Non-Ferrous Metal Mining to take a majoritystake in Lynas Corporation (Reuters)
September 10, 2008 - Chevron Mining agrees to sell Mountain Pass rare earth miningoperations (Molycorp Minerals, LLC) to company owned by Resource Capital Funds,
Pegasus Partners IV, LP, The Goldman Sachs Group, Inc., Traxys North America LLCand Carint Group LLC (Press Release)
-Investment Holding Company was sealed
today (Mineweb)
(Press Release)
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Phone: (306) 659-4500www.gwmg.ca info@gwmg.ca