Nickel Industries Limited · ASX:NIC
Nickel Industries — Nickel Mines — BofAML Global Metals, Mining & Steel Conference 2019
32 slides from Nickel Industries's conference presentation, May 13, 2019
Slide 1: ASX cover letter for BofAML conference presentation
ABN 44 127 510 589 Level 2,, 66 Hunter Stre eet Sydney NSW 2000 Ausstralia T: +61 2 9300 3311 F: +61 2 9221 6333 E: info@ @nickelmines.co om.au 13 May 2019 The Manag ger Compan nies ASX Limite ed 20 Bridge S Street Sydney NSSW 2000 (32 pag ges by ema ail) BofAM ML CONFE ERENCE I attach a PowerPoin n
Slide 2: Joining the Ranks of Global Nickel Producers
NICKEL JoiNING THE RANKS OF GLOBAL NICKEL PRODUCERS 2-MINES blo Ee BofAML GLOBAL METALS, MINING & STEEL CONFERENCE BARCELONA — MAY 2019
Slide 3: Disclaimer
NICKEL DISCLAIMER MINES LIMITED This presentation has been prepared by Nickel Mines Limited (ABN 44 127 510 589) (‘NIC’). The information contained in this presentation is for information purposes only and has been prepared for use in conjunction with a verbal presentation and should be read in that
Slide 4: Executive Summary
EXECUTIVE SUMMARY JOINING THE RANKS OF GLOBAL NICKEL PRODUCERS NIC holds an 80% interest in PT Hengjaya Mineralindo 2 Line RKEF Plant. ~150Ktpa nickel pig iron Nickel Mines Limited (NIC) is an Australian company publicly listed (PTHM) which holds 100% i J on the ASX. of the Hengjaya Nickel (QU) = =
Slide 5: 54.0% 13.7% 11.6% 9.9% 10.8%
54.0% 13.7% 11.6% 9.9% 10.8% 4
Slide 6: Hengjaya Mine
HENGJAYA MINE THE FOUNDATION ASSET LOCATION + Morowali Regency, Central Sulawesi, Indonesia. = Alarge tonnage, high grade, open-cut mine in MAKASSAR | close proximity to IMIP. ) LICENCE Mahalona @ = IUP licence covering 6,249 s hectares. = 20 year mining operation/ production licence with a further
Slide 7: While we own a world class nickel laterite mine...
While we own a world class nickel laterite mine... THIS IS NOT A MINING STORY It’s a story about the production of the most profitable nickel units in the global market in partnership with the world’s largest stainless steel producer
Slide 8: Introduction to Tsingshan, SDI and IMIP
INTRODUCTION TO TSINGSHAN, SDI and IMIP TSNGSHa? Currently the world’s largest stainless steel producer with output of 9.29 Mt in 2018. Established a clear early mover advantage in building in-country processing capacity within Indonesia. Arecognised global leader in RKEF processing technology to pr
Slide 9: Improving outlook for stainless steel and battery market
Underpinned by an improving outlook for stainless steel and an exponentially increasing battery market for Electric Vehicles, nickel demand is expected to grow by 2- 3% pa over the medium to longer term. With supply not forecast to keep pace with demand, the nickel market returned to deficit in 2016
Slide 10: Improving outlook for stainless steel and battery market
Underpinned by an improving outlook for stainless steel and an exponentially increasing battery market for Electric Vehicles, nickel demand is expected to grow by 2- 3% pa over the medium to longer term. With supply not forecast to keep pace with demand, the nickel market returned to deficit in 2016
Slide 11: Supported by World Class Facilities & Infrastructure
SUPPORTED BY WORLD CLASS FACILITIES & INFRASTRUCTURE
Slide 12: Hengjaya Mine Nickel: Location Is Everything
HENGJAYA MINE NICKEL LOCATION IS EVERYTHING WINES IMITED ETE BETE CENTRAL PIT © ws HM JETTY : - PT. HM IUP = ULTRA MAFIC AREA ‘2 Sn
Slide 13: What Does Nickel Mines Benefit From By Partnering With Tsingshan?
WHAT DOES NICKEL MINES BENEFIT FROM BY PARTNERING WITH TSINGSHAN?
Slide 14: Bottom Quartile Operating Costs
QUARTILE Q QUARTILE (QUARTILE PROJECT PLANT NICAPACITY (Kt pa) CAPITAL COST COST/tNiEq (UssM) (uss) Murrin Murrin 1999 HPAL 1,700 42,500 Ravensthorpe 2007 HPAL 3,000 75,000 VNC (Goro) 2010 HPAL 6,000 100,000 Ambatovy 2012 HPAL 5,500 91,667 1 Cost (USS/T) Koniambo. 2013 FeNi 6,300 105,000 Onca Puma 2
Slide 15: Superior NPI Payabilities
SUPERIOR NPI PAYABILITIES 110% 100% 90% 80% 70% 60% 50% NICKEL MINES LIMITED Superior Payabilities Underpin a Compelling Economic Advantage for NPI Producers NPI payabilities typically range from > 90% to a small premium to LME veg cil Concentrate payabilities typically range from 65% to 75% of LME
Slide 16: Indonesian Tax Concessions
NICKEI MINES LI By official decree of the Minister of Finance of the Republic of Indonesia material tax concessions have been granted to both HNI and RNI. = 100% Corporate Income Tax Reduction for 7 years commencing from the year of commercial production. = Plus an additional 2 Years Corporate Incom
Slide 17: The Current State of Play
THE CURRENT STATE OF PLAY
Slide 18: Hengjaya Nickel Commissioning Underway
HENGJAYA NICKEL NICKE COMMISSIONING UNDERWAY HINES LIMITED Commissioning of both RKEF lines continues to ramp up to a steady state production and operating cost profile. January” February March* Quarter Total NPI Production 67.5 1,802.6 6,502.2 8,372.3 NPI Grade % 11.6 12.7 | 13.4 13.0 Nickel Metal
Slide 19: Ranger Nickel Project Update
RANGER NICKEL PROJECT UPDATE NICKEL MINES LIMITED RNI is scheduled to commence commissioning in May. Decision announced to increase interest from 17% to 60%. Acquisition will be completed via a US$160M financing package, comprising: o US$100M senior secured debt. oto be provided by Sprott Private Re
Slide 20: Ranger Nickel ownership: Current vs Proposed
CURRENT PROPOSED SHANGHAI DECENT SHANGHAI DECENT 83% 40% a 2 100% 100% >» 4 ~ @ RANGER NICKEI PRIVATE 1% RANGER NICKEL PRIVATE 1% ~yy 100% Py 100% 3 = Construction nearing completion; Construction nearing completion; : = First RKEF line scheduled for commissioning in 2H First RKEF line scheduled for
Slide 21: Hengjaya Mine Expansion Initiatives
HENGJAYA MINE EXPANSION INITIATIVES AY sae 1080 © PrHMTOPO UNDAR GaN) 72 MAULAD PROPOSED APL-BB "AY provmcia. no NICKEL MINES LIMITED Expansion initiatives underway to allow for production of 1.5M wmt pa of saprolite ore for RKEF operations. = Central Pit to be bought into operation to complement op
Slide 22: MOU to supply limonite to HPAL plant
MOU announced to supply limonite to HPAL plant recently announced to be constructed within the IMIP. © Consortium includes two Tsingshan group companies. © Project to produce 50kt Ni/ 4kt Co per annum. Opportunity to optimise the value of HM Mine Resource. © 180M dmtat 1.30% Ni (2.3Mt contained Ni)
Slide 23: Why Invest?
WHY INVEST? 22
Slide 24: Investment Highlights
INVESTMENT HIGHLIGHTS WORLD CLASS NICKEL RESOURCE JORC compliant resource with significant extension potential. o 37.5M dmt at 1.81% nickel (1.5% COG) for ~680k tonnes contained nickel.’ © 180M dmt at 1.30% nickel (1.0% COG) for ~2.3M tonnes contained nickel? Ability to supply RKEF plant for 30+ yea
Slide 25: Investment Thesis
INVESTMENT NICKEL THESIS MINES LIMITED Indonesia is now the epicentre of global nickel supply growth. = If you want nickel exposure you need to be invested in this region. NPI is the now the most prevalent source of new nickel supply. = While NPI is currently predominantly consumed by the stainless
Slide 26: Unique Growth Optionality
UNIQUE GROWTH NICKEL OPTIONALITY A Clear Line of Sight on Additional Nickel Units 35,000 =HNI =RNI 30,000 0 260 NIC distinguishes itself from its peer group with its unique growth 25,000 optionality. NIC possesses contractual options to 20,000 increase its ownership interests in both the HNI and RNI
Slide 27: Compelling Nickel Economics
COMPELLING NICKEL ECONOMICS A Clear Line of Sight on Strong EBITDA and FCF Growth 35,000 =HNI =RNI 30,000 = Industry leading payabilities for contained Nickel in NPI. 25,000 Bottom quartile cost profile underpinned by: 20,000 Ability to utilise low-cost, high grade nickel laterite ore. o Access to a
Slide 28: Months On
8 Months On = 60% interest in HNI 17% interest in RNI (moving to 60%) HNI commissioning after 12 months Strong first 2 months commissioning performance RNI to commence commissioning in early May Material tax concessions for HNI and RNI MOU to supply limonite ore to IMIP’s HPAL plant 80% interest in
Slide 29: Peter Weile
“ Peter Wei le 73 Directoumicy Manca Pres
Slide 30: Indonesian nickel exports and LME price
Indonesian nickel exports in value Indonesian nickel exports in volume terms terms 8000 40000 800 7000 35000 700 LME price: $/tonne 6000 30000 600 $US million 5000 25000 '000t nickel 500 400 4000 20000 300 3000 15000 200 2000 10000 100 1000 5000 0 0 0 2011 2017 2007 2008 2009 2010 2012 2013 2014 201
Slide 31: Nickel Mine Versus RKEF Economics
NICKEL MINE VERSUS RKEF an ECONOMICS Relative Economics of Shipping versus Processing 1.5Mt pa of Nickel Ore 250 Margin: ~US$13,700/t Mine EBITDA (IMIP Pricing) = Mine EBITDA (Market Pricing) ——RKEF EBITDA EBITDA: US$226.3M 200 150 Margin: ~US$7,700/t EBITDA: US$126.5M ge 3 7 1.5Mt pa Ni ore to an R
Slide 32: Statement of Compliance
NICKEL STATEMENT OF MINES LIMITED COMPLIANCE The information in this report that relates to Exploration Results and Mineral Resources is based on information compiled by the staff and contractors of Nickel Mines Limited and its subsidiaries and approved by Mr Brett Gunter, a Member of the Australasi
Nickel Mines — BofAML Global Metals, Mining & Steel Conference 2019 on 6ix