Nickel Industries Limited · ASX:NIC
Nickel Industries — Nickel Mines — 6th Asian Nickel Conference 2018
34 slides from Nickel Industries's conference presentation, Sep 13, 2018
Slide 1: Presentation to Investors
ABN 44 127 510 589 Level 2, 66 Hunter Street Sydney NSW 2000 Australia T: +61 2 9300 3311 F: +61 2 9221 6333 E: info@nickelmines.com.au 13 September 2018 The Manager Companies ASX Limited 20 Bridge Street Sydney NSW 2000 (34 pages by email) PRESENTATION TO INVESTORS Attached is a PowerPoint presenta
Slide 2: Asian Nickel Conference, Jakarta, Indonesia
NICKEI ASIAN NICKEL CONFERENCE MINES LIMITED JAKARTA, INDONESIA ee SEPTEMBER 2018
Slide 3: Disclaimer
NICKEL IMITED DISCLAIMER 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 contex
Slide 4: . 17.7% 4.5% 41.8% ▪ 3.3% ▪ 10.3% ▪ 11.6% 10.8% ▪ ▪ ▪
02 . 17.7% 4.5% 41.8% ▪ 3.3% ▪ 10.3% ▪ 11.6% 10.8% ▪ ▪ ▪ 3
Slide 5: Executive Summary
EXECUTIVE SUMMARY Nickel Mines Limited (NIC) is an Australian company publicly listed on the ASX. NIC holds an 80% interest in PT Hengjaya Mineralindo (PTHM) which holds 100% of the Hengjaya Nickel Mine (HM). HM is located in Morowali Regency, Central Sulawesi, Indonesia, adjacent to Tsingshan Holdi
Slide 6: Executive Summary
EXECUTIVE N ! c KEI free”. SUMMARY i i ' | | | | | | | | The SDI and Wanlu As contemplated by NIC successfully Utilising proceeds NIC has an option to | MOU signed to ! investments were the CSA, NIC utilised completed an from the IPO, NIC increase its interest ! collaborate on an ' subject to the th
Slide 7: Investment Highlights
() INVESTMENT HIGHLIGHTS WORLD CLASS NICKEL RESOURCE JORC compliant resource of 37.5M dint at 1.81% nickel (~680kt contained Ni) with significant extension potential. Ability to supply RKEF plant for 30+ years (at 1.5M wmt pa). Adjacent to Tsingshan’s IMIP. STRATEGIC PARTNERSHIP WITH GLOBAL INDUSTRY
Slide 8: Overview of Hengjaya Mine
(/) OVERVIEW OF HENGJAYA MINE as, MOROWALI REGENCY LOCATION « Morowali Regency, Central Sulawesi, Indonesia. « Alarge tonnage, high grade, open-cut mine in close proximity to IMIP. Mahalona @ IMIP HM MINE LICENCE « IUP licence covering 6,249 ) hectares. « 20 year mining operation/ production licence
Slide 9: Introduction to Tsingshan, SDI and IMIP
06 INTRODUCTION TO TSINGSHAN, SDI and IMIP TSNGSHa? = Currently the world’s largest stainless steel producer with output of 7.48 Mt in 2017. = Established a clear early mover advantage in building in-country processing capacity within Indonesia. = Arecognised global leader in RKEF processing technol
Slide 10: Nickel demand outlook
06 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 2
Slide 11: Nickel demand outlook
06 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 2
Slide 12: Supported by World Class Facilities & Infrastructure
( SUPPORTED BY WORLD CLASS FACILITIES & INFRASTRUCTURE
Slide 13: NIC Group Structure
(i NIC GROUP STRUCTURE (Local Indonesian Partner) SHAREHOLDERS 40% > 4 100% HENGJAYA COLLABORATION & 2-LINE NICKEL MINE SUBSCRIPTION AGREEMENT RKEF PLANT = 37.5M dmt of JORC-compliant resources at = Construct a 2-line RKEF plant within the IMIP. = Already under construction. 1.81% Ni. * Govern the t
Slide 14: RKEF Plant Construction Progress
08 RKEF PLANT CONSTRUCTION PROGRESS Base of Electric Furnace = Foundation work and support structures for the rotary kilns and electric furnace are nearing completion. = Material capital equipment components for the RKEF plant, including the rotary kilns and electric furnace, are now being fabricate
Slide 15: RKEF Plant Construction Progress
RKEF PLANT CONSTRUCTION PROGRESS Kiln Column Electrical Switch Room 14
Slide 16: Tsingshan's Indonesian NPI capacity sets new standards for costs and capital intensity
Tsingshan’s Indonesian NPI production capacity has set new industry standards for operating costs and capital intensity. PROJ YEAR PLANT NICAPACITY (Kt pa) CAPITAL COST (UssM) Murrin Murrin 1999 HPAL 40 1,700 Ravensthorpe 2007 HPAL 40 3,000 VNC (Goro) 2010 HPAL 60 6,000 Ambatovy 2012 HPAL 60 5,500 K
Slide 17: C1 Cost (US$/t)
C1 COST (USS/T) I Feni Okt 1* QUARTILE 100 kt 200 kt HE npibr 6M Chinese NPI 2" QUARTILE 300 kt 400 kt NICKEL MINES LIMITED 3" QUARTILE 4" QUARTILE 600 kt 700 kt 800 kt 900 kt RECOVERED NICKEL PRODUCTION (7 Indonesian NPI Min. Source : Wood Mackenzie 16
Slide 18: Incentive Price (US$/t)
Incentive Price (US$/t) 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 Nickel incentive price for a pre-tax 15% IRR Okt 100 kt 200kt 300Kkt 400kt 500kt 600kt 700kt 800kt Annual production capacity, contained nickel @ NIC WH Sulphide © Laterite NICKEL MINES LIMITED = Wood Mackenzie h
Slide 19: The IMIP's Requirement for Additional NPI
1 THE IMIP’S REQUIREMENT NICKEL FOR ADDITIONAL NPI MINES LIMITED ~65% NPI ~30% Chromium ~5% Primary Nickel } current) 20 RKEF 1.5Mt pa NPI 2Mt pa ww 450Kt pa NPI (additional NPI requirement to move to 3Mt pa) ww Kk» 26 RKEF 1.95Mt pa NPI OTHER GROWTH AVENUES EXIST FOR NIC 18
Slide 20: NIC — A Key Partner in SDI's Growth Plans
10 NIC — A KEY PARTNER IN SDI’S GROWTH PLANS In June 2018 NIC and SDI signed a MOU for an additional two RKEF Lines. As contemplated under the MOU: * NIC shall have the right, but not the obligation, to acquire an interest of no less than 51% and up to 100% in a new special purpose company which wil
Slide 21: Financial Model Steady State Operations
11 FINANCIAL MODEL NICKEL STEADY STATE OPERATIONS “ The steady state operations financial model outputs and cost sensitivity analysis overpage have been validated by Wood Mackenzie as part of an independent review of the RKEF Feasibility Study Report and the operating performance of the 20 existing
Slide 22: Financial Model Cost Sensitivity Analysis
FINANCIAL MODEL COST SENSITIVITY ANALYSIS Indicative 1-Year Steady State EBITDA and FCF Sensitivity Analysis Indicative 1-Year Steady State EBITDA and FCF Sensitivity Analysis 60% RKEF Ownership — Mine & RKEF Opex +10% 60% RKEF Ownership — Mine & RKEF Opex +20% 60% RKEF Ownership Nickel Price 60% RK
Slide 23: kt ▪ 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 ▪ 22
kt ▪ 2016 12 2017 2018 2019 2020 2021 2022 2023 2024 2025 ▪ 22
Slide 24: Nickel Markets Supply-Demand Outlook
1 NICKEL MARKETS NICKEL SUPPLY - DEMAND OUTLOOK MINES LIMITED Market balance and LME nickel price forecasts by Wood Mackenzie 300 Long-term price: US$22,050/t (real 2018) 250 200 LME PRICE (US$/T, REAL 2018) MARKET BALANCE (KT) ‘3988 Market balance +@===LME price (RHS, real 2018) LME prices are fore
Slide 25: Nickel Markets: LME Stockpiles Are Now in Steady Decline
1 NICKEL MARKETS LME STOCKPILES ARE NOW IN STEADY DECLINE (US$/Ib) mmm Exchange inventory —— LME nickel price (LHS) Source: Wind, CLSA NICKEL MINES LIMITED Having peaked at over 500kt, LME stockpiles have fallen significantly over the last 12 months to now sit less than 240kt.
Slide 26: Board & Management
1 BOARD & MANAGEMENT ROBERT NEALE Chairman 30+ years management experience in the resources and energy sectors. Past Managing Director of New Hope Corporation as well as having held the position of Chairman, Independent and Non-Executive Director of a number of public and listed companies including
Slide 27: Board & Management
13 BOARD & MANAGEMENT SDI & WANLU DIRECTOR NOMINEES HUANG WEIFENG XU YUANYUAN Non-Executive Director Non-Executive Director Extensive career experiences across a range of industrial enterprises including as Plant Ms Xu Yuanyuan is an Executive Director of Shanghai Wanlu Investment Co., Ltd and is Ma
Slide 28: Peter Wei le Directoumicy Manca Pres
“ Peter Wei le 73 Directoumicy Manca Pres
Slide 29: Appendices
APPENDICES
Slide 30: SPV HoldCo
SPV HOLDCO PRE IPO | on S& | core C7 SEPTEMBER JANUARY APRIL COMPLETED NIC signed a landmark CSA with SDI and Wanlu to build a 2-line RKEF plant for US$200M. NIC completed a ~US$27M capital raising to become ‘debt free’ — a condition precedent to SDI and Wanlu investing in NIC. Foreign-invested limi
Slide 31: Tsingshan Collaboration Post IPO
TSINGSHAN COLLABORATION POST “ IPO SEPTEMBER 2018 NIC exercised it contractual right to move to a 60% ownership interest in the RKEF plant. SPV HOLDCO COMPLETED <12 MONTHS No later than 12 months after first NPI production from the RKEF plant NIC can elect to acquire the 40% interest in SPV HoldCo i
Slide 32: Nickel demand outlook
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 33: Nickel Mines Limited
NICKEL MINES LIMITED Nickel Mines Limited (‘NIC’ or ‘the Company’) in an unlisted Australian public company that was incorporated in 2007. NIC has a current 80% ownership interest in PT Hengjaya Mineralindo (‘PTHM’) which inturn holds a 100% interest in the world class Hengjaya Nickel Mine (‘HM’) lo
Slide 34: Statement of Nickel Compliance
STATEMENT OF NICKEL COMPLIANCE aes 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 Australasian Institu