Nickel Asia Corp. · PSE:NIKL
Nickel Asia — Investor Presentation (September 2023)
51 slides from Nickel Asia's investor presentation, Sep 22, 2023
Slide 1: Nickel Asia Corp. Investor Presentation
NICKEL ASIA CORP. Investor Presentation 09/22/2023
Slide 2: NAC Overview
2 NAC OVERVIEW
Slide 3: Our Investment Story
OUR INVESTMENT STORY We are well-positioned to achieve our twin goals of being included in the PSE’s Top 25 companies in terms of market capitalization and becoming a Premier ESG investment by 2025: ▪ Leading, growing, profitable, and rewarding mining business underpinned by structurally supportive
Slide 4: NIKL at a Glance
4 NIKL AT A GLANCE The largest nickel ore producer in the Philippines, accounting for 39% of Philippine and 5% of global production in 2022 and a forerunner in the Philippine RE industry with 1 GW aspiration by 2028. COMPANY FACTS PERFORMANCE* OUR PARTNERS 7 P28B P79.6B Mines Revenue Market capitali
Slide 5: Leading and Stable Mining Business
LEADING AND STABLE MINING BUSINESS Largest Philippine nickel ore producer Established supplier NAC is one of the largest suppliers of lateritic nickel ore globally Stable long-term nickel ore output due to long remaining mine and the largest nickel ore producer in the Philippines. life of its operat
Slide 6: The Nickel Class Divide
THE NICKEL CLASS DIVIDE 1. CLASS 2 surplus persists. 2. CLASS 1 market is growing, but there are supply chain risks. 3. Nickel deficit is inevitable which implies Ni price upside.
Slide 7: Class 2 Surplus Persists
7 1. CLASS 2 SURPLUS PERSISTS Stainless steel surplus is due to Indonesia’s increased NPI production SS will see steady growth and surplus will persist Indonesia NPI production growth accelerates Source: CRU
Slide 8: Class 1 Nickel Market Is Growing: EV Mass Adoption
8 2. CLASS 1 NICKEL MARKET IS GROWING: EV MASS ADOPTION IS HAPPENING EV mass adoption Research indicates NEV sales to reach 33 million units in 2027 for 31% of total global vehicle sales as supportive policies spur the industry.
Slide 9: Nickel Is a Key Battery Material
9 2. CLASS 1 NICKEL MARKET IS GROWING: NICKEL IS A KEY BATTERY MATERIAL By 2027, nickel-containing EV batteries will By 2027, battery market will account for account for 71% of total EV batteries 29% of global nickel demand Global EV battery chemistry market share, 2016-2027 (% of MWh) Primary nicke
Slide 10: Nickel Demand for Batteries Will Double
10 2. CLASS 1 NICKEL MARKET IS GROWING NICKEL DEMAND FOR BATTERIES WILL DOUBLE ▪ Class 1 demand and supply projected to almost double due to EV adoption and Indo HPAL projects. ▪ Class 1 surplus can provide relief to NiSO4 tightness, caused by battery materials demand. Class 1 nickel demand by end-u
Slide 11: Class 1 Nickel Market: Supply Chain Risks
11 2. CLASS 1 NICKEL MARKET IS GROWING BUT THERE ARE SUPPLY CHAIN RISKS Nickel ore supply is limited Indonesian average mine life is limited relative Indonesian mine production boost continues due to to mine production forecasts investments in downstream processing Indonesia’s 8-year average mine li
Slide 12: Supply Chain Risks: Dynamic Regulatory Developments
12 2. CLASS 1 NICKEL MARKET IS GROWING BUT THERE ARE SUPPLY CHAIN RISKS Dynamic regulatory developments The Geological Service of the Ministry of Energy and Mineral Resources (ESDM) estimates that Indonesia's nickel reserves will be depleted in only 9 years, especially for high- grade nickel ores (s
Slide 13: Supply Chain Risks: Timeline of HPAL Project Execution
13 2. CLASS 1 NICKEL MARKET IS GROWING BUT THERE ARE SUPPLY CHAIN RISKS Timeline of HPAL Project Execution MHP supply by operation, 2017-2027, kt Ni HPAL pipeline is large, but will these projects finish on time and on budget, or operate as expected? Execution risk is an issue.
Slide 14: Nickel Deficit Is Inevitable Beyond 2027
14 3. NICKEL DEFICIT IS INEVITABLE BEYOND 2027 IMPLIED UPSIDE TO NICKEL PRICES For 2023-2027 , we assume an optimistic 1. Mass adoption of NEVs and increase in launch of all announced nickel demand will continue into the next HPAL projects, with no decade. delays. 0 2. Nickel supply visibility beyon
Slide 15: Regulatory Updates
15 REGULATORY UPDATES House Bill No. 8937 was approved on second reading last September 18. This would still go through the Bicameral Committee. Legislative features Existing “Philippine Mining Fiscal Regime Act” Comments or House Bill No . 8937 1. Royalty Rate for operations within 5.00% 4.00% NAC
Slide 16: Development Pipeline
16 DEVELOPMENT PIPELINE
Slide 17: Mining Development Pipeline
17 MINING DEVELOPMENT PIPELINE BULANJAO MANICANI 70M WMT 47M WMT Resources as of 12/31/2022 @1.61% Ni @1.55% Ni 22% of 38% of Percent of MPSA Area Drilled 3,553 hectares 1,165 hectares Target Annual Production 4M+ WMT 2M+ WMT 35% Saprolite 50% Saprolite Target Annual Product Mix 65% Limonite 50% Lim
Slide 18: Pujada Project Disclosure – Feb 2023
18 PUJADA PROJECT DISCLOSURE – 17 FEB 2023 NAC or its wholly-owned subsidiary is the exclusive mining service contractor for Hallmark Mining Corporation and Austral-Asia Link Mining Corp’s MPSA’s (Mineral Production Sharing Agreement) ▪ Conduct feasibility study to establish HPAL or equivalent miner
Slide 19: Financial Highlights
19 FINANCIAL HIGHLIGHTS
Slide 20: NIKL and EPI 1H2023 Highlights
20 NIKL AND EPI 1H2023 HIGHLIGHTS NICKEL MINING RENEWABLE ENERGY (EMERGING POWER INC.) ▪ Revenues decreased by 8% YoY to P10.9 billion due to lower nickel ▪ Jobin-SQM Inc. (JSI) now operating a total capacity of 100-MW ore prices which weighed down the positive impact from higher from 62 MW YoY; gen
Slide 21: Financial Highlights (1H'23 vs 1H'22)
21 FINANCIAL HIGHLIGHTS (1H’23 VS 1H’22) Source: Company Data Ni Pay factor is the ratio of revenue to LME price for each unit of contained nickel sold. Dividend yield is computed as dividend per share divided by average NIKL price per share
Slide 22: Shipments and Revenues by Ore Type
22 SHIPMENTS AND REVENUES BY ORE TYPE FULL-YEAR COMPARISON -16% YoY change -33% YoY change +1% YoY -13.6% YoY Limo HPAL change -18.6% YoY +17% YoY -17.4% YoY change Ore exports change
Slide 23: Revenue – Variance Analysis
23 REVENUE – VARIANCE ANALYSIS FULL-YEAR COMPARISON Sales Volume (mWMT) +8% YoY change Sales Price (mWMT) -26.3% YoY FX Rate (PHP/USD) +2.3% YoY change
Slide 24: Cost & Expenses – Variance Analysis
24 COST & EXPENSES – VARIANCE ANALYSIS FULL-YEAR COMPARISON Sales Volume (mWMT) +8% YoY change Fuel Prices (P/liter) +3% YoY change
Slide 25: Net Income – Variance Analysis
25 NET INCOME – VARIANCE ANALYSIS FIRST SEMESTER COMPARISON ▪ Reported attributable net income at P1.7 billion, down 56% YoY due to lower ore prices in 2Q-23 impacting both ore revenues and the profitability of our investments in the HPAL plants. ▪ Excluding the company’s equity interest in the two
Slide 26: Investment in HPAL Equity Earnings
26 INVESTMENT IN HPAL EQUITY EARNINGS Equity Earnings, in PHP Millions (1H-23 comparison) • The reduced Nickel and Cobalt prices had impacted Equity earnings from investments in the HPAL operations
Slide 27: Renewable Energy
27 RENEWABLE ENERGY
Slide 28: Philippine Shift to Renewable Energy
28 PHILIPPINE SHIFT TO RENEWABLE ENERGY ▪ Key drivers of electricity consumption: Macroeconomic recovery post-pandemic and strong population growth Government goal and supporting programs to accelerate and achieve 100% electrification by 2028, and energy sufficiency by 2030 ▪ RE development facilita
Slide 29: Investment into Renewable Energy
29 INVESTMENT INTO RENEWABLE ENERGY1 Jobin SQM, Inc. (JSI) • 52% EPI, 38% NAC ▪ Subic Bay Freeport Zone SOLAR ▪ 50-year (+25) lease for 800 hectares POWER ▪ 25-year Service Contracts ASSETS ▪ 230kv line can accommodate 200 MW+ ▪ 172 MW by Dec 2023; 200 MW by 2025 ▪ Of existing 100 MW, 68 MW was buil
Slide 30: Partnership with Shell a Significant Milestone
30 PARTNERSHIP WITH SHELL A SIGNIFICANT MILESTONE The Joint Venture Corporate Structure ▪ On July 1 , 2022, EPI and Shell signed a Joint Venture (JV) partnership to jointly develop, own, operate, and maintain onshore renewables projects in the Philippines ▪ Exclusive platform for utility scale grid-
Slide 31: JSI Financial Highlights (1H'2022 to 1H'2023)
31 JSI FINANCIAL HIGHLIGHTS (1H’2022 to 1H’2023) Generation (in MWh) Revenues (in PHP m) EBITDA (in PHP m) 76,375 390.63 330.82 49,554 216.29 177.77 1H’22 1H’23 1H’22 1H’23 1H’22 1H’23 1H’22 1H’23 1H’22 1H’23 1H’22 1H’23 Source: Company Data
Slide 32: EPI's Solar Projects Under or to Start Construction in 2023
32 EPI’S SOLAR PROJECTS UNDER OR TO START CONSTRUCTION IN 2023
Slide 33: EPI's Geothermal Pipeline
33 EPI’S GEOTHERMAL PIPELINE
Slide 34: EPI's Projected Capacity Buildup of Solar, Wind and Geothermal
34 EPI’S PROJECTED CAPACITY BUILDUP OF SOLAR, WIND AND GEOTHERMAL GENERATION ASSETS (Gross capacity, MW) • Load profile being developed to serve solar peak and night peak hours. • PSAs to be against portfolio (not single plant). • Does not yet include NAC-related projects.
Slide 35: Sustainability
35 SUSTAINABILITY
Slide 36: Philippines Mining Excellence in 2022
36 PHILIPPINES MINING EXCELLENCE IN 2022 ▪ First ASEAN Mineral Awards ▪ Presidential Mineral Industry ▪ Presidential Mineral Industry Environment Environmental Award (2019, 2020) Award (2002, 2003, 2015, 2018, 2020) ▪ Platinum Achievement Award (2016, ▪ Platinum Achievement Award (1999, 2000, 2018,
Slide 37: Sustainability – At the Core of NAC Key Businesses
37 SUSTAINABILITY – AT THE CORE OF NAC KEY BUSINESSES Our businesses have always been built on a practice of social responsibility – towards our people, towards our communities and towards our environment Nickel as a key part of the global energy transition Developing a significant renewable energy
Slide 38: Our Sustainability Performance and Targets
38 OUR SUSTAINABILITY PERFORMANCE AND TARGETS ESG is at the forefront of our priority to address material risks with our medium- to long-term targets Our Sustainability Performance and Targets Our Long-Term Targets SDGs Metric 2022 Achievements 2025 Targets Renewable Energy Increase Renewable ener
Slide 39: ESG Score Improved to 34.8 from 43.7
39 ESG SCORE IMPROVED TO 34.8 FROM 43.7 Nickel Asia Corp. Rating Report Material ESG Issues ESG Risk Rating Distribution Legend ▪ Industry (Diversified Metals) ▪ Subindustry (Diversified Metals Mining) Rank | Percentile (1st = Top Score) 60/223 | 27th 40/184 | 22nd
Slide 40: ESG in Our DNA
40 2017-2022 ESG IN OUR DNA 7M Trees planted We deliver responsible mining and make a lasting impact to the communities and environment that we operate in. 1,250 Hectares rehabilitated EPI SOLAR FARM $422M SUBIC, ZAMBALES Taxes and royalties paid SOLAR FARM CONVERSION OPTION: Mined-out areas can be
Slide 41: Presentation End
PRESENTATION END
Slide 42: Disclaimer
mee NAC a2 DISCLAIMER This presentation and the information contained herein as well as the materials distributed herewith ("Presentation") are the sole and exclusive property of Nickel Asia Corporation ("NAC") and shall only be used for the purpose intended herein. This Presentation is not intended
Slide 43: Appendix
APPENDIX
Slide 44: Overview of Mining Business
mee NIAC OVERVIEW OF MINING BUSINESS Nickel Mining Mining Assets = Largest nickel mining company in the Philippines ne Keston and one of the largest suppliers of lateritic nickel Beas Gomer es ore globally o Accounted for 39% of Philippine nickel mine LEGEND production and 5% of global nickel mine ‘
Slide 45: Ore Type Content
COUNTRY / ORE TYPE CONTENT FINAL PRODUCT USED IN TECHNOLOGY Japan: Ni: 1.25-1.5% FeNi 300-Series SAPROLITE FeNi or NPI Fe: <20% China: (10% Ni) Stainless Steel NPI (RKEF) LIMONITE HIGH Ni: 0.8-0.9% China: Low Grade NPI 200-Series FOR EXPORT FE Fe: 48-50% NPI (BF) (1-2% Ni) Stainless Steel LIMONITE L
Slide 46: Reserves and Mine Life
NAC 46 RESERVES AND MINE LIFE Nickel Asia has the largest nickel reserves and its mines have the longest remaining mine life in the Industry Shipments by Mine (mWMT) 8.5, 8.3 79 3.03.0 i 2020 ™2021 2022 5.04.8 | RTN Mine Life Years from December 31, 2021 Ore Reserves by Mine (mWMT) Proved and Probab
Slide 47: NiSO4 and MHP Balance 2020-2027
NiSO4 2020-2027, kt Ni 800 MHP Balance 2020-2027, kt Ni 0 1600 100 700 -2 1400 50 -4 600 1200 0 500 -6 1000 -8 -50 400 -10 800 300 -100 -12 600 200 -14 400 -150 100 -16 200 -200 0 -18 2020 2021 2022 2023 2024 2025 2026 2027 0 -250 2020 2021 2022 2023 2024 2025 2026 2027 NiSO4 Demand NiSO4 Supply NiS
Slide 48: Coral Bay and Taganito HPAL
Coral Bay Taganito HPAL ▪ Location Palawan, adjacent to Rio Surigao Del Norte, Tuba mine adjacent to Taganito mine ▪ Equity Ownership 15.625% 10% Project Cost / Year $508 Million / 2005 $1.59 Billion / 2013 Nameplate Capacity 20,000 Ni-Ton 30,000 Ni-Ton ▪ Ore Supply (2022) 3.1 million WMT 4.4 millio
Slide 49: Emerging Power Inc. Solar Plant Tour
me NAC 49 Emerging Power Inc. Solar Plant Tour = Eight of the largest Domestic Institutional Investors visited our Sta. Rita Power plant last February 3, 2022 JSI's Sta. Rita Solar Power Plant has installed capacity of 100 megawatts (MW), with another 72 MW currently in construction. Investors and f
Slide 50: 16 kW / 64 kWh Energy Storage Units
▪ Installed Capacity 16 kW /64 kWh 2 units of M32 FESS (Amber Kinetics)
Slide 51: Investment Parameters
51 INVESTMENT PARAMETERS In selecting sites, we follow these criteria: = " Irradiance, wind, or geothermal resources assessment are better than average " Possessory rights are clear and robust " Viable and cost-effective connection solution to the grid " ESG best practices can be implemented sorarsz