HomeMy WebLinkAbout20131093 Ver 1_Withdrawal Letter_20141218l�
16 December 2014 x
Mr. Danny Smith (
NCDENR - Division of Water Resources - Water Quality Programs
1650 Mail Service Center�
Raleigh, NC 27699- 1650'b
Dear Mr. Smith,
ASX Release: Year End Accounting (Non -Cash) Adjustment (12 Dec 2014)
Future of Iluka Operations in Virginia
Iluka issued the attached announcement to the Australian Stock Exchange on 12 December 2014;
As you would appreciate, recent plans have included evaluation of two Iluka mineral sands
deposits able to utilize the Stony Creek mineral separation plant, namely Aurelian Springs (North
Carolina) and Hickory (Virginia). Although both projects are, on Iluka's assessment, potentially
cash flow positive, in the context of current capital expenditure priorities, Iluka has reviewed its
options for the US operations. A decision has been taken to maximize cash flow from the Virginia
ore bodies and minimize commitment of further development capital to this part of the business at
this time. This option entails mining out the Brink and Concord deposits in the most effective
manner, which is expected to lead to the completion of mining and processing activities in the US
at the end of 2015.
We are naturally, disappointed that we are unable, at this time, to confirm the extension of our US
operations beyond the end of 2015 to our employees, customers and other stakeholders.
Iluka appreciates your ongoing support in the development of its future projects and will provide
further detail on developments throughout 2015.
Kind Regards
Shane Tilka
General Manager — US Operations
Iluka Resources Inc - 12472 St. John Church Rd. • Stony Creek, VA 23882
T (434) 348 -4300 - F (434) 246 -3039 • www.iluka.com
Exchange Australian Securities
12 December 204
YEAR END ACCOUNTING (NON-CASo)ADJUSTMENT
Iluka Resources Limited (Iluka) announces an expected year end accounting non-cash impairment
of approximately A$86 million aftertax associated with its United States operations.
Uuka has mining and processing operations in Virginia at two mine sites - Brink and Concord (the
|auerid|md in February 2014) - and mineral separation plant nearby ot Stony Creek. Uwka'a US
operations produce chloride ilmenite as well as a premium zircon, both sold predominantly into the
domestic market. |n the first half uf2O14. these contributed EB|TofAn(31)million.
The company's Corporate Plans over the past eight years have contemplated cessation of US
operations opmsa a period ranging from 2012 to 2027. with the most common assumption being
around 2015. The wide range reflects changing assumptions regarding: project development and
operating costs; ilmenite and zircon production, sales volumes and prices; and other factors which
drive ore body optimisations and project economics.
Recent plans have included evaluation nf two Uuka mineral sands deposits able m utilise the Stony
Creek mineral separation plant, namely Aurelian Springs (North Carolina) and Hickory (Virginia).
Although both projects om. on Uuka'sosaosament. potentially cash flow positive, in the context of
current oapbo| expenditure priorities, ||uka has reviewed its options for the U8 operations. A
decision has been taken to maximise cash flow from the Virginia ore bodies and minimise
commitment of further development capital to this part of the business at this time. This option
entails mining out the Brink and Concord deposits in the most effective manner, which is expected
to lead to the completion of mining and processing activities in the US at the end of 2015.
||uka will continue to hold mineral leases over the land upon which the Aurelian Springs and
Hickory resources are based.
As a result the company has determined that m non-cash impairment in carrying vo|uau in the US is
naquimd, m|otad to the estimated net discounted cash flows from the mina plan outlined above
being lower than the carrying value vf the US operating assets.
David Robh, Uuko's Managing Director stated: ^Uuho's approach to project evaluation and
development is based on keeping various imm,nu| options available for oommitmont. yet ensuring
development occurs only if and when an appropriate ,isk/oetum balance can be achieved to create
and deliver value for shareholders.
VVa are, naturally, disappointed that *m are unable, mt this time, m confirm the extension vf our UG
operations beyond their original planned life to our employees, customers and other stakeholders.
Iluka continues to progress other internal production options within its portfolio, as well as evaluate
suitable external growth vpportunitioo.^
Investment market and media inquiries:
or Robert Porter
General Manager, Investor Relations
Mobile: +61 (0) 407 391 829
Email. robert.porterCo),iluka.com
/mm` Resources Limited `xamu*nooersn1u` Level ua1'meu Georges Terrace Perth wmsono
GPO Box u1mm Perth wmse45`r^a1 893e0 4700 'F~61 8 9360 4777 'wwwnum`.,om
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