Nickel Asia Corp. · PSE:NIKL
Nickel Asia — Investor Presentation (July 2022)
40 slides from Nickel Asia's investor presentation, July 2022
Slide 1: Investor Presentation
1 INVESTOR PRESENTATION
Slide 2: Our Investment Story
NICKEL ASIA CORPORATION 2 OUR INVESTMENT STORY Well positioned to achieve twin goals of being Top 25 in the PSE and a Leading ESG investment by 2025: ▪ Sustainable mining volumes with 425M WMT of resources as of end 2021. ▪ Diversification to clean energy with target capacity of 1GW reinforced by a
Slide 3: At a Glance
NICKEL ASIA CORPORATION 3 AT A GLANCE Largest nickel mining company in the Philippines and one of the largest suppliers of lateritic nickel ore globally – with a major push into the renewable energy sector through 87%-owned Emerging Power, Inc. Twin goals are borne out of the Through EPI Stake OneNA
Slide 4: Nickel Mining
NICKEL ASIA CORPORATION 4 NICKEL MINING
Slide 5: Heading Towards a Nickel Deficit
NICKEL ASIA CORPORATION 5 Nickel Demand for Non-Stainless Applications (kt) HEADING TOWARDS A 2,500 NICKEL DEFICIT 2,000 1,500 ▪ Ni demand for stainless steel expected 1,000 to grow 5.7% per year from 2020 to 2025. On the other hand, Green Ni 500 demand (including EV Ni demand) 0 forecasted to grow
Slide 6: Nickel Use in EVs
NICKEL ASIA CORPORATION 6 NICKEL USE IN EVs § NCA and NMC preferred due to smaller size, longer distance, and safety. § Trend is to achieve longer distances by increasing cell pack capacity, which requires more Ni. § Demand for Ni in EVs may be inelastic due to the minimal effect of Ni price vs. EV
Slide 7: Achieving Stable Long-Term Nickel Ore Output
2025 ROADMAP 7 ACHIEVING STABLE LONG-TERM NICKEL ORE OUTPUT Sales Volume (In Million WMT) § Future cash dividends supported by stable nickel ore 10% business: 19.8 Dinapigue - 750K WMT from 17.9 1.0 2022 1.8 2.0 Bulanjao - 1M WMT from 2023 2.2 3.0 Manicani - 1M WMT from 2024 § Remaining mine lives o
Slide 8: Development Pipeline
NICKEL ASIA CORPORATION 8 DEVELOPMENT PIPELINE BULANJAO MANICANI KEPHA 70M WMT 47M WMT 6M WMT Resources as of 12/31/2021 @1.61% Ni @1.55% Ni @1.22% Ni 22% of 38% of 2% of Percent of MPSA Area Drilled 3,553 hectares 1,165 hectares 6,981 hectares Target Annual Production 4M+ WMT 2M+ WMT 2M+ WMT 35% Sa
Slide 9: Financial Highlights (FY 2017 to 1Q'2022)
NICKEL ASIA CORPORATION 9 FINANCIAL HIGHLIGHTS (FY 2017 to 1Q’2022) Revenue (PHP bn) EBITDA (PHP bn) Net Income (PHP bn) Sale of ore 14.4 Services and others 27.4 21.8 9.5 18.6 17.9 7.6 7.8 15.7 6.8 6.5 4.1 2.8 3.0 2.7 3.7 2.2 3.2 1.7 1.0 0.5 2017 2018 2019 2020 2021 1Q'21 1Q'22 2017 2018 2019 2020
Slide 10: LME and Ore Price Trends
NICKEL ASIA CORPORATION 10 LME AND ORE LME Ni Price, NPI Price and Ni-Pay Rebased to 100 PRICE TRENDS 300 Freight Cost increase: $10 to $29 per WMT § LME Ni and Ni-Pay Factor (Ni-Pay) started rising from mid-2019 in anticipation of 250 Tsingshan news Freight cost (NPI-to-matte) Indonesian Ni ore ban
Slide 11: Shipments and Revenues by Ore Type (FY 2019 to 2021)
NICKEL ASIA CORPORATION 11 SHIPMENTS AND REVENUES BY ORE TYPE (FY 2019 TO 2021) Shipments by Ore Type Prices by Ore Type Revenue by Ore Type (mWMT) (US$/WMT) (PHPbn) 21.6 10.8 10.4 10.0 40.4 16.7 8.4 8.2 34.0 7.1 12.7 23.5 12.1 8.3 4.3 8.2 3.5 3.4 Ore Exports Limo-HPAL Ore Exports Limo-HPAL Ore Expo
Slide 12: Revenue vs. Cash Costs Breakdown (in US$/WMT)
NICKEL ASIA CORPORATION 12 REVENUE VS. CASH COSTS BREAKDOWN (IN US$/WMT) 29.13 Cash Costs per WMT 2021 vs. 2020: ▲ $0.54 increase in Excise 22.46 $15.78 / Taxes and Royalties as a 54% result of higher ore prices $10.76 / 16.86 16.69 48% ▲ $0.25 from increase in fuel $6.53 / 39% $5.68 / 34% 13.35 pri
Slide 13: Financial Highlights (1Q'21 vs 1Q'22)
NICKEL ASIA CORPORATION 13 FINANCIAL HIGHLIGHTS (1Q’21 vs 1Q’22) In PHPm 1Q’2021 1Q’2022 % Diff 1Q'21 2.7 Sales Volume (mWMT) Revenue 3,168 3,693 17% Cost and Expenses (1,850) (1,897) 3% 1Q'22 2.4 EBITDA 1,689 2,203 30% Finance Loss – Net 6 (41) -683% 1Q'21 22.2 Sales Prices ($/WMT) Equity Income 11
Slide 14: NAC's Strong Financial Performance
NICKEL ASIA CORPORATION 14 NAC’S STRONG FINANCIAL PERFORMANCE Gross Profit (PHP bn) & Gross Profit Margin (%) EBITDA3 (PHP bn) & EBITDA Margin (%) 25,000 80% 20,000 80% 70.0% 66.0% 63.0% 61.0% 20,000 60.0% 19.2 14.9 57.0% 60% 15,000 14.4 60% 53.0% 60.0% 15,000 13.7 40.8% 43.4% 10.3 11.2 36.5% 52.6%
Slide 15: NAC's Prudent Capital Structure
NICKEL ASIA CORPORATION 15 NAC’S PRUDENT CAPITAL STRUCTURE Total Debt1 / EBITDA (x) EBITDA Interest Coverage (x)3,4 0.6 300.0 0.5 0.5 250.0 243.3 0.4 0.4 0.4 0.4 200.0 169.1 0.3 0.3 0.3 150.0 0.2 100.0 59.0 0.1 50.0 30.9 34.5 19.0 0.0 0.0 FY18 FY19 FY20 FY21 Q1'21 Q1'22 FY18 FY19 FY20 FY21 Q1'21 Q1'
Slide 16: Renewable Energy
NICKEL ASIA CORPORATION 16 RENEWABLE ENERGY
Slide 17: Philippine Shift to Renewable Energy
NICKEL ASIA CORPORATION 17 PHILIPPINE SHIFT TO RENEWABLE ENERGY § Demand growth of 6%+ p.a. until 2040, exceeding dependable capacity by 2024: § Key drivers of electricity consumption: 100,000 80,000 Capacity and Peak Demand (2018–40) Strong macroeconomic and demographic growth 60,000 MW 40,000 Gove
Slide 18: Foray into Renewable Energy
NICKEL ASIA CORPORATION 18 FORAY INTO RENEWABLE 52% OWNED BY EPI / 38% BY NAC ENERGY 1 Jobin SQM, Inc. (JSI) § Subic Bay Freeport Zone § 50-year (+25) lease for 800 hectares § 25-year Service Contracts § 230kv line can accommodate 200MW+ SOLAR § 100MW as of June 2022; 200MW by POWER 2025 ASSETS 100%
Slide 19: EPI Already Executing on Its Renewable Strategy
NICKEL ASIA CORPORATION 19 EPI ALREADY EXECUTING ON ITS RENEWABLE STRATEGY Solar (JSI) Geothermal (MGPC) Geothermal (BGI) Target Capacity by 2025, MWs 200 (100 existing) 2 – 20 2 – 50 Expected Energy Generation, MWh Per Year 309,000 16,000 – 161,000 16,000 – 403,000 70% Contracted 70% Contracted Tar
Slide 20: Partnership with Shell a Significant Milestone
NICKEL ASIA CORPORATION 20 PARTNERSHIP WITH SHELL A SIGNIFICANT MILESTONE IN ACHIEVING ITS STATED STRATEGY Overview of Joint Venture Illustrative Corporate Structure § On July 1 , 2022, EPI and Shell signed a Joint Venture (“JV”) partnership to jointly develop, own, operate, and maintain onshore ren
Slide 21: Key Milestones for EPI-Shell JV
NICKEL ASIA CORPORATION 21 KEY MILESTONES FOR EPI-SHELL JV 1 2 3 4 5 Initiation of Establishment Energization of First Achieve Target JV Discussions of JV in 2022 and Second Projects ~600MW Portfolio ~1GW and beyond ¡ 4Q 2021: Start of JV ¡ 1 July 2022: JV Shareholders’ discussions ¡ Execution of fi
Slide 22: Optimize Financing Strategy at NAC and EPI to Fund Growth
NICKEL ASIA CORPORATION 22 OPTIMIZE FINANCING STRATEGY AT NAC AND EPI TO FUND GROWTH NAC invests shareholder funding into EPI, sourced from NAC’s diversified funding channels, ranging from its cash and potentially supported by tapping into the capital markets EPI raises further funding via prudent l
Slide 23: Investment Parameters
NICKEL ASIA CORPORATION 23 INVESTMENT PARAMETERS In selecting sites, we follow these criteria: § Irradiance or wind 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 implemente
Slide 24: ESG
NICKEL ASIA CORPORATION 24 ESG
Slide 25: ESG in Our DNA
NICKEL ASIA CORPORATION 25 CARBON NEGATIVE ESG IN OUR DNA OPERATIONS BY THE NUMBERS 6M Number of trees planted from 2017-2021 900 Hectares rehabilitated from 2017-2021 Spent for mandated and voluntary CSR from $26M 2017-2021, which have elevated the living standards in our mining communities $46M Ex
Slide 26: ESG Is Key to Our Long-Term Growth Strategy
NICKEL ASIA CORPORATION 26 ESG IS KEY TO OUR LONG-TERM GROWTH STRATEGY In November 2021, the Board has approved a new vision to (1) achieve the highest standards in the responsible utilization of Philippines’s natural resources; (2) become leading ESG investments in Philippines 3 Pillars of NAC’s ES
Slide 27: Bringing ESG to Life: Mine Conversion Options
NICKEL ASIA CORPORATION 27 BRINGING ESG TO LIFE: MINE CONVERSION OPTIONS SOLAR FARM CONVERSION OPTION: convert mined-out areas into solar farms like this facility in Subic, Zambales, owned and operated by NAC subsidiary, Emerging Power, EPI SOLAR FARM, SUBIC, ZAMBALES Inc. AQUAFARM CONVERSION OPTION
Slide 28: A Proven Track Record of Excellence
A PROVEN TRACK RECORD OF EXCELLENCE ¡ First ASEAN Mineral Awards (2017) ¡ Presidential Mineral Industry ¡ Presidential Mineral Industry Environment Environment Award (2019, 2020) Award (2002, 2003, 2015, 2018, 2020) ¡ Platinum Achievement Award (2016, ¡ Platinum Achievement Award (1999, 2000, 2018)
Slide 29: Disclaimer
NICKEL ASIA CORPORATION 29 DISCLAIMER This presentation and the information contained herein as well as the materials distributed herewith ("Presentation") are the sole and exclusive property of Nickel Asia Corporation ("NAC") and shall only be used for the purpose intended herein. This Presentation
Slide 30: Appendices
NICKEL ASIA CORPORATION 30 APPENDICES
Slide 31: Nickel Ore Products
NICKEL ASIA CORPORATION 31 NICKEL ORE PRODUCTS COUNTRY / ORE TYPE CONTENT FINAL PRODUCT USED IN TECHNOLOGY Japan: Ni: 1.3-1.5% FeNi 300-Series SAPROLITE FeNi or NPI Fe: <20% China: (10% Ni) Stainless Steel NPI (RKEF) HIGH Ni: 0.8-0.9% China: Low Grade NPI 200-Series FE Fe: 48-50% NPI (BF) (1-2% Ni)
Slide 32: Shipments and Revenues by Ore Type (Q1)
NICKEL ASIA CORPORATION 32 SHIPMENTS AND REVENUES BY ORE TYPE (Q1) Sales Volume (In Average Ore Sales Prices Revenue (In PHPbn) mWMT) (In US$/WMT) 3.3 2.7 2.9 46.7 2.4 Saprolite 46.9 1.7 1.0 1.8 0.1 1.7 11.3 Limonite HPAL 19.6 0.1 1.8 1.6 30.7 0.8 Limonite HiFe 0.7 Q1'21 Q1'22 Q1'21 Q1'22 Saprolite
Slide 33: Ore Sales Volume Quarterly Distribution
NICKEL ASIA CORPORATION 33 ORE SALES VOLUME QUARTERLY DISTRIBUTION (AVE. LAST 5 YEARS) 8.0 33.7% 6.0 30.4% Million WMT 4.0 39.7% 20.1% 33.6% 15.7% 18.2% 8.5% 2.0 25.3% 26.3% 25.8% 22.6% - 1Q 2Q 3Q 4Q HPAL Exports
Slide 34: Sensitivity Analysis: 2021 Net Income
NICKEL ASIA CORPORATION 34 SENSITIVITY ANALYSIS: 2021 NET INCOME ₱7,813 ±₱68m/$1.4m ±₱250m/$5.1m ±₱1.46b/$29.4m Net Income (Attributable), 2021 Fuel Costs (Diesel ₱32.38 PHP/USD (₱49.48 ±₱1/$) Ni LME ($8.39 +/-$1/lb.) ±10%)
Slide 35: Reserves and Mine Life
NICKEL ASIA CORPORATION 35 RESERVES AND MINE LIFE Shipments by Mine (mWMT) Ore Reserves by Mine Mine Life Years from December 31, 2021 (mWMT) 9.1 Proved and Probable 8.5 8.3 (as of Dec. 31, 2021) 23 116.0 80.2 4.9 5.0 4.8 80.1 59.3 11 42.2 10 2.8 3.0 3.0 36.4 2.0 1.7 1.8 4 38.1 35.9 11.9 5.9 3.9 22.
Slide 36: Investment in HPAL Projects
NICKEL ASIA CORPORATION 36 INVESTMENT IN HPAL PROJECTS Coral Bay Taganito HPAL ▪ Most successful implementation of Location Palawan, adjacent to Rio Surigao Del Norte, HPAL technology in the world. Tuba mine adjacent to Taganito mine ▪ End products are refined in Japan by Sumitomo Metal Mining and u
Slide 37: Global Nickel Demand
NICKEL ASIA CORPORATION 37 GLOBAL (in kt) 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 NICKEL Total primary nickel demand 2,457 2,787 3,014 3,279 3,506 3,690 3,908 4,005 4,035 4,105 4,273 DEMAND Primary nickel in stainless 1,729 1,901 2,008 2,137 2,243 2,281 2,327 2,357 2,350 2,350 2,363 (
Slide 38: Global Nickel Balance
NICKEL ASIA CORPORATION 38 GLOBAL Mine Production / Capability 2020 2,610 2021 2,908 2022 3,312 2023 3,585 2024 3,763 2025 3,859 2026 3,857 2027 3,823 2028 3,827 2029 3,799 2030 3,758 NICKEL Forecast Disruption Allowance (55) (72) (75) (77) (77) (76) (77) (76) (75) Base Case Mine Output 2,610 2,908
Slide 39: Shell Group & Shell Energy
NICKEL ASIA CORPORATION 39 SHELL GROUP & SHELL ENERGY Shell Group “Shell is fully committed to the global sustainability efforts and has set goals in-line with the Paris Climate Agreement, as well as to become a net-zero emissions ¡ Shell is one of the largest energy companies globally, which operat
Slide 40: Our Sustainability Performance and Targets
NICKEL ASIA CORPORATION 40 OUR SUSTAINABILITY PERFORMANCE AND TARGETS ESG at the forefront of our priority to address material risks with our medium-long term targets and fulfill the decarbonization goals of the Government Our Sustainability Performance and Targets Our Long-term targets SDGs Metric