Slide 1: Baker Pre-Feasibility Study
BAKER PRE-FEASIBILITY STUDY For personal use only EDMUND AINSCOUGH HAYDEN BARTROP Managing Director Chief Financial Officer May 2023 ASX: LM8
Slide 2: Important Notice & Disclaimer
IMPORTANT NOTICE & DISCLAIMER This Presentation has been prepared by employees of Lunnon Metals Ltd (“Lunnon”, “LM8” or “the Company”) on its behalf and is a summary only, and contains summary information about Lunnon and its activities, which is current as at the date of this Presentation (unless o
Slide 3: Score Card Since IPO
SCORE CARD SINCE IPO GROWTH BY DISCOVERY NEWS FLOW • Baker discovered 1 • Drilled ~54km For personal use only • MRE grown by 48,800t Ni metal 2 • Reprocessed ~12km • 125% increase 3 @ A$0.22/lb 4 historical core • PFS/Initial Ore Reserve at Baker GROWTH BY ACQUISITION FUNDING Acquired nickel rights
Slide 4: Located in the Heart of Kambalda
LOCATED IN THE HEART OF KAMBALDA Kambalda – a renowned nickel district • 60 km south of Kalgoorlie, Western Australia. • 1.6Mt nickel metal mined1, unrivalled record of discovery For personal use only Kambalda Nickel Concentrator - 1.6Mtpa concentrator owned by BHP Nickel West, 25km to north of Bake
Slide 5: Unrivalled: Kambalda Nickel District
UNRIVALLED : KAMBALDA NICKEL DISTRICT Production - Peers’ Assets^: Past Nickel Production^ Pre-WMC sale vs Total Life of Mine to date Shut Ni % use only 4.3% Mine Mt % Ni Ni kt by 4.1% Silver 3.9% 342 Lake 1986 4.5 2.7 123 203 3.7% For personal 3.5% Fisher 1988 1.7 2.3 38 3.3% 467 101 676 3.1% Foste
Slide 6: Baker PFS – Strategic Objectives
BAKER PFS – STRATEGIC OBJECTIVES LESS THAN 18 MONTHS SINCE ITS DISCOVERY • Declare initial Ore Reserves • Catalyst for detailed off-take discussions For personal use only • Demonstrate key LM8 value proposition • Assess future operational & funding tactics: ✓ LM8’s tenure got ‘sold with the gold’, i
Slide 7: Kambalda 'DNA': Decades of Experience
KAMBALDA ‘DNA’ : DECADES OF EXPERIENCE (‘Do Not Assume’) For personal use only GEOLOGY METALLURGY MINE PRODUCTION & MRE METHOD RATE Extensive local Detailed Cut / Drift Quality litho-structural domain-based and over know how test work Paste Fill Quantity 20km of surface drilling, Knowledge of Qualit
Slide 8: Baker Pre-Feasibility Study Highlights
BAKER PRE-FEASIBILITY STUDY HIGHLIGHTS 1 • Robust project economics – Pre-tax NPV8 of $164M, Free cash flow of $196M, and 324% IRR2 For personal use only • Initial Probable Ore Reserve of 612kt averaging 2.86% for 17.5kt contained nickel2 • Low pre-production capex of $18.6M, maximum cash draw of $2
Slide 9: Baker Pre-Feasibility – Highlights
BAKER PRE-FEASIBILITY – HIGHLIGHTS 1, 2 Ore Reserve3 LOM Physicals Free Cash Flow2 NPV8 For personal use only 612kt Mining: 17,500 otpm Pre-tax: $196M Pre-tax: $164M2 2.86% Ni Ni in Conc: 15,970t Post tax: $121M2 17.5kt Ni contained LOM: 35 months4 Post tax: $145M Premium Conc. Concentrate Operating
Slide 10: PFS Study Team
For personal use only PFS STUDY TEAM 10
Slide 11: Baker Mineral Resource
BAKER MINERAL RESOURCE • Discovered in January 2022, no historical production: o 7.0m @ 9.22%, 8.0m @ 2.52% and 6.0m @ 3.67%1 For personal use only • December 2022 Mineral Resource based on over 20km of surface drilling 2 • Drill Spacing: Indicated ~20m x 20m Inferred ~40m x 40m • Inferred Resource
Slide 12: Baker Initial Ore Reserve
BAKER INITIAL ORE RESERVE Less Than 2 Years Since Listing: Discovered, reported Mineral Resource and now initial Ore Reserve For personal use only • 612,000t @ 2.86% Ni for 17,500t of nickel metal 1 Ore Reserve extends to <200 metres below surface • 73% conversion of Indicated Resource2 • Undergroun
Slide 13: Mine Method & Design
MINE METHOD & DESIGN CUT / DRIFT AND FILL & CEMENT PASTE FILL • Development intensive: focus is accuracy of extraction and minimising waste For personal use only o Preserve premium concentrate: High Ni%, high Fe:MgO ratio and low arsenic • Multiple access points early in the life – opportunities for
Slide 14: Surface Infrastructure and Pre-Development
SURFACE INFRASTRUCTURE AND PRE-DEVELOPMENT EXTENSIVE EXISTING INFRASTRUCTURE • Waste and RoM pads from West Idough Pit For personal use only • Access and Haul roads • Powerlines (11kv) • Dewatering corridor • Mine offices & workshop • Fuel storage facility • Ablutions etc ADVANCED PROJECT APPROVALS
Slide 15: Processing / Off-take
PROCESSING / OFF-TAKE KEY STRATEGIC SOURCE OF NICKEL SULPHIDE CONCENTRATE For personal use only • Premium quality concentrate: Parameter Unit Value Average nickel grade % Ni 14.6 Average copper grade % Cu 1.3 Average cobalt grade % Co 0.26 Average platinum grade g/t Pt 0.58 Average palladium grade g
Slide 16: Major Operating Costs
MAJOR OPERATING COSTS FIRST PRINCIPLES, BENCHMARK & RFQ* APPROACH Unit Cost Total LOM Unit Cost For personal use only Item (A$/lb Ni A$ Million (A$/t Ore Mined) contained in concentrate)1 Mining 131.2 214 3.73 Processing (including Surface Haulage)2 46.1 75 1.31 General & Administration3 7.2 12 0.20
Slide 17: PFS Financial Outcomes
PFS FINANCIAL OUTCOMES# 140,000 160,000 Measure Unit Outcome 120,000 140,000 Nickel Contained in Concentrate Ni Kt 15,970 120,000 Average Ni Sold Per Annum t Ni pa 4,100 For personal use only 100,000 Post tax Free Cash Flow (A$M) Cumulative Con Production (t) 100,000 Gross Revenue1 A$M 437 80,000 80
Slide 18: Environment, Social & Governance
For personal use only ENVIRONMENT, SOCIAL & GOVERNANCE ACKNOWLEDGEMENT OF COUNTRY At Lunnon Metals, we acknowledge the Traditional Owners of the land upon which we operate at Foster / Baker, the Ngadju people, and recognise their unique cultural heritage, beliefs and connection to these lands, water
Slide 19: Significant Upside Potential
SIGNIFICANT UPSIDE POTENTIAL Baker Growth Foster: Scale & Synergy • PFS considered • Foster host to 1.2Mt @ Indicated MRE only 3.2% Ni Indicated MRE 1 For personal use only • Indicated extends to • Further 0.7Mt @ 2.5% Ni less than 200 metres Inferred 1 below surface • Located only 3km to • Inferred
Slide 20: Foster: 1.95Mt @ 2.9% Ni
FOSTER : 1.95Mt @ 2.9% Ni (57,000t Ni)* >9km existing decline development Permitted For personal use only • Dewatering & water discharge • Existing mining lease • Key infrastructure in place Mineral Resource • Available over 500 vertical metres as workings accessed PFS studies • Explore option value
Slide 21: Silver Lake/Fisher: Long South Gap
SILVER LAKE/FISHER : LONG SOUTH GAP • Southern half of the famous For personal use only Kambalda Dome • Adjacent to >0.47Mt of past Ni production^ • 2-3km2 “gap” with no deep drilling • Directly along • ASX:MCR’s strike from exciting new East AND ASX:MCR’s Dome Target Long Operation Corridor# (292kt
Slide 22: Future Plans / Next Steps
FUTURE PLANS / NEXT STEPS TO 31 DECEMBER 2023 • Commence PFS at Foster For personal use only o Metallurgy, geotechnical and mine design for Warren, 85H, S16C/N14C, Foster South o Finalise cost to dewater/re-enter Foster decline • Initiate offtake discussions for Baker • Refine Baker PFS, engage with
Slide 23: Corporate Overview
CORPORATE OVERVIEW LUNNON METALS OVERVIEW Liam Twigger Ashley McDonald Corporate structure (ASX: LM8) Non-Executive Director close on 18 May 2023 Non-Executive Chair For personal use only Board 195.0m $1.01 ~$197m Ian Junk Deborah Lord Shares on issue Share price Market cap Non-Executive Director No
Slide 24: Investment Highlights
INVESTMENT HIGHLIGHTS Growth in forward facing commodity ✓ 4 historical Ni mines, 1 discovery For personal use only ✓ Aggressive drill campaigns, making discoveries ✓ Increasing mineral resources ✓ Expanding asset base Unparalleled Mining Address ✓ Long mining history ✓ Excellent local infrastructur
Slide 25: Important Notice – Competent Persons Statement
IMPORTANT NOTICE The information in this report that relates to nickel geology, nickel Mineral Resources, Exploration Target and Exploration Results, is based on, and fairly represents, information and supporting documentation prepared by Mr. Aaron Wehrle, who is a Member of the Australasian Institu
Slide 26: Mineral Resources and Ore Reserves Reporting
MINERAL RESOURCES AND ORE RESERVES REPORTING This presentation contains references to Lunnon’s Ore Reserves and Mineral Resources, which are shown in a detailed breakdown below. Mineral Resources* as at 31 March 2023 For personal use only * Mineral Resources are inclusive of Ore Reserves Ore Reserve
Slide 27: Important Notice and Disclaimer – Exploration Results Reporting
IMPORTANT NOTICE IMPORTANT NOTICE AND AND DISCLAIMER DISCLAIMER Exploration Results Reporting Exploration Results Reporting This presentation contains references to Lunnon's exploration results and previous announcements. The information in this presentation that relates to previous For personal use
Slide 28: Appendix: Baker PFS Study Results
APPENDIX For personal use only BAKER PFS STUDY RESULTS 28
Slide 29: Key Financial Assumptions
KEY FINANCIAL ASSUMPTIONS Assumption Spot Price or Current Assumption Unit Value Rate (as at 18 May 23) For personal use only Nickel Price1 US$/t 24,000 21,334 Copper Price1 US$/t 7,500 8,302 Cobalt Price1 US$/t 40,000 34,930 Platinum Price1 US$/oz 850 988 Palladium Price1 US$/oz 1,250 1,356 AUD:USD
Slide 30: Project Approvals
PROJECT APPROVALS Mining Lease & Mining Native Title & Aboriginal Proposal Heritage • 100% granted Mining Leases • Ngadju title determined For personal use only • PFS will inform the Mining • LM8 negotiating agreement Proposal • Mutually beneficial, includes • Minimal regulatory hurdles bullet and a
Slide 31: Metallurgy & Geotechnical
METALLURGY & GEOTECHNICAL >20KM OF DRILLING, ENVIABLE DATA DENSITY PRE-START UP For personal use only • Nearly all capital development in “strong” footwall basalt • Modelling drove mine method choice • Metallurgy testing at domain and deposit levels • Test samples select to mirror average Ni grades
Slide 32: Kambalda: An Unrivalled Discovery Record
KAMBALDA AN UNRIVALLED DISCOVERY RECORD Channel length vs nickel metal Direct correlation For personal use only • Known channel length is a function of time/exploration effort… • …which also drives metal discovered or mined • 5 of the 6 “shortest” length channels sit within LM8’s portfolio • Why? Du