Slide 1: Ambatovy Site Tour November 22-24
Ambatovy Site Tour l November 22-24 SHERRITT INTERNATIONAL CORPORATION 1
Slide 2: Cautionary Statement on Forward-Looking Information
Cautionary Statement on Forward-Looking Information This document contains certain forward-looking statements. Forward-looking statements can generally be identified by the use of statements that include such words as “believe”, “expect”, “anticipate”, “intend”, “plan”, “forecast”, “likely”, “may”,
Slide 3: Introduction
INTRODUCTION Aerial View, Ambatovy Mine Site, Madagascar SHERRITT INTERNATIONAL CORPORATION 3
Slide 4: Management Lineup
MANAGEMENT LINEUP STEVE WOOD KIRBY KRYSKI LOUIS ROLAND- MARK MITCHELL TIM DOBSON EVP and GOSSELIN Vice President Vice President President, Ambatovy Chief Operating Officer, Vice President Plant Services Operations Sherritt Int’l Sustainability SHERRITT INTERNATIONAL CORPORATION 4
Slide 5: Political Update: 2015 Events
POLITICAL UPDATE: 2015 EVENTS Impeachment vote against President • Impeachment vote against President in May (124/151 parliamentarians) • Failed subsequent high court process, President remains in power Mining Code revision • New draft of proposed mining code issued by Government in October • Ambato
Slide 6: Ambatovy History
AMBATOVY HISTORY 2015 Achieved Financial Completion Commercial production declared 2014 2012 First nickel production Commissioning commenced 2011 2007 Sherritt acquired Dynatec for US$1.7bb SNC Lavalin agreed to join with 5%, KORES 27.5%, Sumitomo 2006 27.5% and Dynatec 40% Dynatec acquired remainin
Slide 7: Mining & Processing
Mining & Processing Ambatovy Mine Site, Madagascar SHERRITT INTERNATIONAL CORPORATION 7
Slide 8: Ambatovy Operational Highlights
AMBATOVY OPERATIONAL HIGHLIGHTS Mine Commenced operations in July 2010. Mining certificate completed in Q1 2013.(1) Currently mining ~8.8 million tonnes per annum and processing ~1.5 million tonnes per quarter as of Q3 2015 OPP Full capacity achieved in Q1 2013; Operated continuously at 90% of namep
Slide 9: 2015 Highlights
2015 HIGHLIGHTS Transition from Development to Steady State Operations Milestones • Financial completion: September 21, 2015 • LME nickel registration: September 29, 2015 • Record quarterly production: Q3 2015 (13,023t Nickel; 979t Cobalt) • Record low quarterly NDCC: Q3 2015 (US$4.24/lb or $9,348/t
Slide 10: Refinery Process Flowsheet
PROCESS FLOWSHEET PAL • Emphasizes conservative design and redundancy. • High Pressure Acid Leaching (HPAL) in titanium lined autoclaves - 5 trains. HPAL • Solid-liquid separation by Counter- Current Decantation (CCD) – 6 stages. • Mixed Sulphide precipitation - 2 trains. REFINERY • Nickel / cobalt
Slide 11: Supporting Infrastructure
SUPPORTING INFRASTRUCTURE SLURRY PIPELINE • 220km long; 600mm diameter; buried. UTILITIES (ON SITE) • 120MW coal-fired power station • 2 x 2,750 tpd sulfuric acid plants • Air separation, hydrogen and hydrogen sulfide gas plants • Limestone mill and lime kiln PORT & RAIL (8KM FROM SITE) • Dedicated
Slide 12: Production: HPAL Ramp Up
PRODUCTION: HPAL Ramp Up Ore Throughput 2012-YTD Need source file SHERRITT INTERNATIONAL CORPORATION 12
Slide 13: Cost: NDCC and Nickel Production
COST: NDCC AND NICKEL PRODUCTION NDCC & Ni Production 14,000 9.00 8.00 12,000 $7.84 7.00 $7.19 $7.26 10,000 $6.98 6.00 8,000 $5.74 $5.48 5.00 6,000 4.00 $4.24 3.00 4,000 2.00 2,000 1.00 - - 2014 2014 2014 2014 2015 2015 2015 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Actual Ni Production Actual NDCC NDCC expected to be a
Slide 14: Cost of Sales Breakdown
COST OF SALES BREAKDOWN Ambatovy Joint Venture • 27% of cost of sales is in maintenance of operating equipment 18% Sulphur • Other costs comprise 25% employee costs (14%) ; Limestone contractor and consultant 5% Coal costs (11%) 7% Other Commodities Maintenance 27% 18% Other SHERRITT INTERNATIONAL C
Slide 15: Ambatovy Briquettes Qualify for LME Registration
Ambatovy Briquettes Qualify for LME Registration: One of 12 Producers Worldwide Russia Canada Norway Finland including Moa JV production UK France Japan China Brazil Madagascar Zimbabwe Australia South Africa SHERRITT INTERNATIONAL CORPORATION 15
Slide 16: Health & Safety
HEALTH & SAFETY Mine Site Dispatch Worker, Madagascar SHERRITT INTERNATIONAL CORPORATION 16
Slide 17: Health & Safety Improvement Focus
HEALTH & SAFETY Improvement Focus Leadership • Third party safety culture review completed at mine & plant • New Mine H&S Manager (ex Rio Tinto): - Reviewing and setting best practice safety standards - Safety leadership during management transition - Focus on Contractor Management • Industrial Hygi
Slide 18: Fatalities and Our Response
3 FATALITIES AND OUR RESPONSE What happened? 1. Contract maintenance worker: H2S vapour cloud release from Area 3500 PAL Mixed Sulphide Precipitation flash condenser seal tank 2. Mine bulldozer operator: Geotechnical failure of a stockpile caused the dozer to slide down the slope, and a subsequent m
Slide 19: Sustainability
SUSTAINABILITY Mine Site Industrial Nursery, Moramanga, Madagascar SHERRITT INTERNATIONAL CORPORATION 19
Slide 20: Sustainability: Environment
SUSTAINABILITY: Environment Biodiversity • Offset conventions signed with NGO management of 2 of 3 offset areas; 3rd to be merged. • Flora ‘Species of Concern’ update 90% complete by Missouri Botanical Garden • Endemic fish salvage during dam construction at mine highly successful Environmental Cert
Slide 21: Sustainability: Community
SUSTAINABILITY: Community Social Investment Fund (US$25 million) • Zeren ammonia hazard: successfully completed in Q4 2014; regional industrial risk committee successfully and sustainably established. • Toamasina power: equipment received; scheduled completion 15th Dec • Toamasina Market: completed
Slide 22: Sustainability: External Relations
SUSTAINABILITY: External Relations Government relations • Engagement with high-ranking government officials and representatives of international community. • VAT: in negotiation with Government; strong support from IMF • Royalties: draft proposal presented to government; final submission in preparat
Slide 23: Industrial Relations: 2015 Events
INDUSTRIAL RELATIONS: 2015 EVENTS Strike: mine (16 days; 16 – 31 March 2015) • Grievances: unreasonable and included demand to terminate mine management personnel • Politically motivated: initiated by union associated with opposition party • Return to work agreement included commitment to collective
Slide 24: Marketing
MARKETING Port, Toamasina, Madagascar SHERRITT INTERNATIONAL CORPORATION 24
Slide 25: Marketing
MARKETING Finished Nickel • Ambatovy sells all of its nickel production to KORES, Sumitomo and Sherritt at market prices under nickel offtake agreements covering full nickel capacity for 15 years. • The Partners, in a coordinated manner, market directly to end users. • Realized prices improving as p
Slide 26: Marketing: Sales by Region
MARKETING Nickel Sales by Region Africa North 2% • Customer sales of both finished nickel America and finished cobalt are geographically 9% diverse with good penetration into key Europe 33% markets. East Asia 55% Finished Cobalt • Ambatovy markets all of its cobalt and utilizes established distribut
Slide 27: Ambatovy Overview: Maps
AMBATOVY OVERVIEW Ore Truck, Ambatovy Mine Site, Madagascar Maps SHERRITT INTERNATIONAL CORPORATION 27
Slide 28: Overview of the Ambatovy Joint Venture
OVERVIEW OF THE AMBATOVY JOINT VENTURE SHERRITT INTERNATIONAL CORPORATION 28
Slide 29: Toamasina Area Sites
TOMAMASINA AREA SITES SHERRITT INTERNATIONAL CORPORATION 29
Slide 30: Plant Site
PLANT SITE SHERRITT INTERNATIONAL CORPORATION 30
Slide 31: Mine Operations
MINE OPERATIONS SHERRITT INTERNATIONAL CORPORATION 31
Slide 32: Appendix: Nickel Briquettes
APPENDIX Nickel Briquettes SHERRITT INTERNATIONAL CORPORATION 32
Slide 33: Plant Refinery
PLANT REFINERY SHERRITT INTERNATIONAL CORPORATION 33
Slide 34: Questions?
QUESTIONS? Aerial View, Ambatovy Plant Site, Madagascar SHERRITT INTERNATIONAL CORPORATION 34