Nordic Mining Asa · OSL:NOM
Nordic Mining Asa — Investor Presentation (November 2017)
42 slides from Nordic Mining Asa's investor presentation, November 2017
Slide 1: Investor presentation November 2017
Investor presentation November 2017
Slide 2: Disclaimer
Disclaimer IMPORTANT NOTICE The presentation (the "Presentation") has been prepared by Nordic Mining ASA ("Nordic Mining" or the "Company") with the assistance of Carnegie AS and Swedbank (jointly the "Financial Advisors"), solely for use at presentation to potential investors (the "Investors") in c
Slide 3: Risk factors
Risk factors Key risks specific to Nordic Mining or its industry Key risks specific to the securities • The development of the Group's properties will depend upon the Group's • The price of the Shares could fluctuate significantly ability to obtain financing • Future sales, or the possibility for fu
Slide 4: Table of contents
Table of contents 1 Introduction 2 Engebø – rutile and garnet 3 Keliber – lithium 4 Financials 5 Summary 4
Slide 5: Experienced management team and Board of Directors
Introduction Experienced management team and Board of Directors Management team Board of Directors Ivar S. Fossum Tarmo Tuominen Kjell Roland Chief Executive Officer Chairman (since 2011) Deputy Chairman • 11 years with Nordic Mining (since founding) • Deputy CEO in Nordkalk • CEO of Norfund • 20 ye
Slide 6: Developing high-value assets in the Nordic Region
Introduction Developing high-value assets in the Nordic Region Reinfjord Exploration rights for platinum and palladium Engebø Sweden Rutile and garnet Finland Norway Keliber Oy (22%) Kvinnherad Lithium High-purity quartz Nordic Mining ASA Head office Focusing on rutile, garnet and lithium Note: Enge
Slide 7: Nordic Mining – equity story at a glance
Introduction Nordic Mining – equity story at a glance 5 1 Significant financial upside High-end minerals for with post-tax NPV of the industrial applications with Engebø project alone at strong commercial outlook USD 305m 4 2 Transforming projects to Engebø rutile and garnet – industry with potentia
Slide 8: Key corporate milestones
Introduction Key corporate milestones Transforming projects to industry Company timeline May 2006 September 2007 2008-2015 March 2016 October 2017 H1 2019 Nordic Mining ASA established First day of listing on Oslo Axess Environmental Keliber PFS completed Engebø PFS completed Engebø targeted start I
Slide 9: Shareholder information
Introduction Shareholder information Shareholder overview (as of 20 November 2017) Key shareholder information # Shareholder Country # of shares % of total Current # of shares outstanding: 94 825 468 1 Nordnet Bank AB (nominee) Sweden 9,469,869 10.0% Fully diluted # of shares: 97 455 468 2 Nordea Ba
Slide 10: Table of contents
Table of contents 1 Introduction 2 Engebø – rutile and garnet 3 Keliber – lithium 4 Financials 5 Summary 10
Slide 11: Highlights from prefeasibility study
Engebø project Highlights from prefeasibility study • Large outcropping deposit of natural rutile and garnet 1 World class rutile and garnet deposit • High grades, low impurities • Geotechnically stable, enables efficient mining • Minerals with unique properties and growing demand 2 Solid market fun
Slide 12: Unique combination of high grade rutile and garnet
Engebø project Unique combination of high grade rutile and garnet Large outcropping deposit next to tidal waters Upside potential in inferred resources • Hard-rock deposit with high quality rutile and garnet located in western Mineral resource1 Tonnage (Mt) Total TiO2 Garnet Norway, a politically an
Slide 13: Rutile and Garnet – minerals with unique properties
Engebø project Rutile and Garnet – minerals with unique properties Garnet Rutile Current world production: Current world production: ~1.4 million tonnes ~0.8 million tonnes WATERJET CUTTING SAND BLASTING ABRASIVES PIGMENT TITANIUM WELDING RODS Tests have demonstrated that Engebø can produce coarse a
Slide 14: First European producer of garnet
Engebø project First European producer of garnet Garnet market and price assumption Current world production • Emerging mineral with strong growth in the waterjet cutting markets Estimated garnet price in Engebø PFS • Currently no European production Product / Case Low price High price China 80 mesh
Slide 15: Cooperation with The Barton Group for Garnet
Engebø project Cooperation with The Barton Group for Garnet The Barton Group Heads of Agreement • Barton, a family owned company founded in 1878, is a leading US • Nordic Mining has entered into a Heads of Agreement with Barton garnet producer and distributor with a strong foothold, particularly in
Slide 16: Rutile demand expected to grow with increasing prices
Engebø project Rutile demand expected to grow with increasing prices Global rutile demand is forecasted to outpace supply… …driving rutile prices up in the forecast period Thousand TiO2 units USD per tonne South Africa Sierra Leone Kenya CIS Australia Other Rutile price High est. Base est. Low est.
Slide 17: Situated close to potential rutile off-takers in Europe
Engebø project Situated close to potential rutile off-takers in Europe • The largest pigment manufacturers in Europe have chloride technology that benefits from high grade feedstock • Several can consume Engebø’s annual volume • Plant-to-plant shipment • Logistical and freight cost advantages • Enge
Slide 18: Favourable internal logistics
Engebø project Favourable internal logistics All at one site; mining, processing and shipping Open pit Processing • Rich ore in the early years with low stripping ratios mining plant • Glory hole concept gives minimum haulage distance and reduces ore transportation costs • Underground crushing and s
Slide 19: Extensive testwork with industrial scale equipment
Engebø project Extensive testwork with industrial scale equipment PFS process testwork completed successfully Complete process plant layout established • Comprehensive testwork documented commercial products from rutile and • Flowsheet for rutile and garnet process based on substantial testing garne
Slide 20: Low initial capex reflecting limited infrastructure needs
Engebø project Low initial capex reflecting limited infrastructure needs USDm 207.2 34.2 41.9 35.7 68.6 26.8 Open pit mining Mineral processing Infrastructure, Indirects (excl. contingency)1 Contingency (~20%) Capital requirement and comminution and tailings handling storage and loadout for open pit
Slide 21: The PFS portrays a robust business case
Engebø project The PFS portrays a robust business case Assumptions Value Unit Output Value Unit Garnet price 250 USD/tonne Pre-tax NPV @ 8% 332 USDm Rutile price 1 070 USD/tonne Pre-tax IRR 23.8% % Garnet sales (from ~2027) 261 000 Tonnes per annum Life of mine 29 years Rutile sales (average) 32 500
Slide 22: Attractive long term cash flow
Engebø project Attractive long term cash flow Post-tax cash margin of 55% USDm 200 150 100 50 0 -50 -100 Garnet Revenue Rutile Revenue Capex Maintenance capex (SIB) -150 Opex, incl change WC and royalty Tax Cash Post-tax cash flow Acc. Post-tax cash flow break even -200 Source: Engebø PFS 22
Slide 23: Base case with upside opportunity and flexibility
Engebø project Base case with upside opportunity and flexibility NPV upside potential to the PFS base case USDm +40% A USD 13m upside potential • Increased production of garnet in the seventh year to 465 meet expected garnet sales of 300 000 tonnes per year 51 69 USD 69m upside potential B 332 13 •
Slide 24: 1st quartile revenue-to-cash cost position for rutile
Engebø project 1st quartile revenue-to-cash cost position for rutile Industry revenue-to-cash cost1 curve (2021) • ~80% of global TiO2 feedstock producers are included in TZMI’s industry analysis • TZMI uses the revenue-to-cash costs (R/C)-ratio as its primary measure of competitiveness for individu
Slide 25: The PFS supports further progress towards production
Engebø project The PFS supports further progress towards production 2016 2017 2018 2019 2020 2021 Timeline to production Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Permitting Permitting completed in 2015 Resource classification Prefeasibility Study Definitive Feasibility
Slide 26: Table of contents
Table of contents 1 Introduction 2 Engebø – rutile and garnet 3 Keliber – lithium 4 Financials 5 Summary 26
Slide 27: Keliber (22%) is a Finnish mining company focusing on lithium
Keliber Keliber (22%) is a Finnish mining company focusing on lithium Introduction to Keliber Keliber overview2 • Aiming to be the first European company to produce high-purity lithium carbonate from its own ore • Six deposits in one of the most significant lithium bearing areas in Europe • Will pro
Slide 28: Lithium demand driven by increased EV penetration
Keliber Lithium demand driven by increased EV penetration Introduction to the lithium market Lithium battery supply chain • Lithium is extracted predominantly from either hard rock mining (as is the Lithium hard rock / concentrate Brine operations case for Keliber) or from brine deposits • Substanti
Slide 29: Table of contents
Table of contents 1 Introduction 2 Engebø – rutile and garnet 3 Keliber – lithium 4 Financials 5 Summary 29
Slide 30: Balance sheet with no interest bearing debt
Financials Balance sheet with no interest bearing debt Balance sheet (NOKm) Q3 2017 Comments Evaluation and exploration assets 1 21.4 1 Evaluation and exploration assets Property, plant & equipment 0.2 • NOK 14.9m in capitalised drilling costs Investment in associate 29.8 • NOK 6.5m in capitalised l
Slide 31: Estimated pre-construction capital requirement
Financials Estimated pre-construction capital requirement Pre-construction activities and general corporate expenditures USDm 4.4 3.7 20.0 3.3 2.1 4.7 3.0 6.2 External DFS costs FEED1 Internal Engebø costs Strenghtening Other SG&A including Contingency Cash balance Capital requirement organisation t
Slide 32: Table of contents
Table of contents 1 Introduction 2 Engebø – rutile and garnet 3 Keliber – lithium 4 Financials 5 Summary 32
Slide 33: Equity story summary
Summary Equity story summary High-end minerals for industrial application with strong commercial outlook I • Growing demand for rutile and garnet and significant supply deficit for both minerals in Europe • Cost-efficient shipping to European and overseas markets with off-take partner on garnet in p
Slide 34: Thank you for your attention!
THANK YOU FOR YOUR ATTENTION! Safety – Environment - Innovation www.nordicmining.com
Slide 35: Appendix
APPENDIX Ch) sae
Slide 36: Management team and Board of Directors
Appendix Management team and Board of Directors Management team Board of Directors Ivar S. Fossum, CEO Tarmo Tuominen, Chairman Fossum has 20 years experience from management positions in Deputy CEO and Chief Supply Chain Officer in the Finnish Norsk Hydro (oil/gas and fertilizers) and FMC Technolog
Slide 37: Corporate structure suitable for partnership and transaction opportunities
Appendix Corporate structure suitable for partnership and transaction opportunities Nordic Mining ASA Parent company 100% 100% 100% Consolidated Nordic Rutile AS Nordic Quartz AS Nordic Ocean Resources AS subsidiaries Engebø rutile and garnet Kvinnherad high-purity quartz Seabed minerals 22% Keliber
Slide 38: Historical financials
Appendix Historical financials Income Statement (NOKm) 2016 YTD 2017 Cash Flow Statement (NOKm) 2016 YTD 2017 Payroll and related costs -7.8 -8.1 Net cash from operating activities -30.0 -30.7 Share-based payment -1.4 0.0 Investment in exploration and evaluation assets 0.0 -0.3 D&A 0.0 -0.1 Investme
Slide 39: Overview of mineral assets
Appendix Overview of mineral assets1 Preparatory DFS stage Advanced DFS stage Advanced scoping stage Engebø – rutile and garnet Keliber – lithium (22% ownership) Kvinnherad – quartz • One of the world’s largest rutile and garnet • Keliber Oy is a Finnish mining company with an • Quartz deposit that
Slide 40: Engebø - zoning plan and environmental permits fully granted
Appendix Engebø - zoning plan and environmental permits fully granted • The zoning plan and discharge permit for the Engebø project are approved and final, without possibility for appeals • Deep-sea disposal offers safe and sustainable tailings solution • The tailings will mainly sediment within the
Slide 41: Engebø - flowsheet of rutile and garnet process
Appendix Engebø - flowsheet of rutile and garnet process Source: Engebø PFS 41
Slide 42: Keliber shareholder overview
Appendix Keliber shareholder overview # Shareholder in Keliber Oy # of shares % of total 1 Nordic Mining ASA 239,044 22.1% 2 Tesi Industrial Management Oy 190,662 17.6% 3 Ab Mine Invest Oy 97,527 9.0% 4 Keskinäinen Eläkevakuutusyhtiö Ilmarinen 70,929 6.6% 5 Thominvest Oy 68,683 6.4% 6 Jorma Takanen
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