Nordic Mining Asa · OSL:NOM
Nordic Mining Asa — Investor Presentation (September 2019)
35 slides from Nordic Mining Asa's investor presentation, September 2019
Slide 1: Minerals for a sustainable future
Large deposit with unique location Quality offtake partners Robust project Minerals for a sustainable future economics Strong competitive OAX: NOM position Valuable investment in lithium Investor presentation September 2019
Slide 2: Disclaimer
Disclaimer IMPORTANT NOTICE The presentation (the "Presentation") has been prepared by Nordic Mining ASA ("Nordic Mining" or the "Company") with the assistance of SpareBank 1 Markets AS (the "Financial Advisor") , solely for use at a presentation to future potential investors (the "Investors") in th
Slide 3: Risk factors
Risk factors Key risks specific to Nordic Mining or its industry Key risks specific to the securities • Development of the Group’s assets will depend upon the Group's ability to • The price of the Shares could fluctuate significantly obtain financing • Future sales, or the possibility for future sal
Slide 4: Table of contents
Table of contents 1 Introduction 1 Introduction 2 Engebø – rutile and Engebø – rutile and garnet 2 garnet 3 Keliber – lithium3 Keliber – lithium 4 Summary 4 Summary 5 Appendix 5 Appendix 4
Slide 5: Nearing construction for two strategic assets
Introduction Nearing construction for two strategic assets Engebø – rutile and garnet (100%) • Large resource base • Long term industrial partners • First European producer of garnet • Post tax NPV@6.8% USD 305m Keliber – lithium hydroxide (18.5%) • First European producer • Large resource potential
Slide 6: Board of Directors and Management team
Introduction Board of Directors and Management team Board of Directors Management team Kjell Roland, Chairman Ivar S. Fossum, CEO • Former CEO of Norfund • 13 years with Nordic Mining (since founding) • Previous experience as partner and CEO in ECON Management AS and • 20 years experience from manag
Slide 7: Table of contents
Table of contents 1 Introduction 1 Introduction 2 Engebø – rutile and Engebø – rutile and garnet 2 garnet 3 Keliber – lithium3 Keliber – lithium 4 Summary 4 Summary 5 Appendix 5 Appendix 7
Slide 8: Key milestones completed ─ progressing towards construction
Engebø Key milestones completed ─ progressing towards construction Q1 ‘15 Zoning plan approved and environmental permit granted Q4 ‘17 Prefeasibility study (PFS) completed Q4 ‘17 Strategic partnership with Barton Group on offtake and financing Q1 ‘19 Heads of Agreement with Japanese trading house on
Slide 9: On track towards value inflection points
Engebø On track towards value inflection points 2019 2020 2021 2022 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Definitive feasibility study FEED Offtake agreements Construction financing Construction period Production ramp- up 9
Slide 10: Unique resource of rutile (titanium dioxide) and garnet
Engebø Unique resource of rutile (titanium dioxide) and garnet Key features Large resource potential (Mt)1 • High grade rutile and garnet deposit located in TiO2(%) 3.95 3.85 3.87 3.82 western Norway Garnet (%) 44.6 43.2 44.4 42.5 • One of the world’s largest deposits of natural rutile with vast amo
Slide 11: High grade rutile with low level of impurities
Engebø High grade rutile with low level of impurities High rutile grade gives processing advantages Low levels of radioactive elements Indicative rutile grades (TiO2) for current producers and planned projects Engebø 3.9% West Balranald 3.9% Cerro Blanco Private 1.7% SRL 0.9% Snapper 0.9% Carmaspe/A
Slide 12: Solid market drivers for Nordic Mining’s minerals
Engebø Solid market drivers for Nordic Mining’s minerals Rutile Garnet Global market: Global market: ~0.7 million tonnes ~1.1 million tonnes Fundamental drivers Fundamental drivers • Titanium has unique properties as oxide and metal • Emerging mineral with strong growth and potential • Rutile is the
Slide 13: Rutile prices forecasted to increase with growing demand
Engebø Rutile prices forecasted to increase with growing demand Global rutile demand is outpacing supply… ….driving rutile prices up ‘000 TiO2 units U$/tonne FOB 1,000 High Long term forecast: 750 US$ 1,118 / tonne FOB (real 2018 dollars) 500 Low 250 0 Others China Australia Demand India US Sierra L
Slide 14: Favorable long term price trend for garnet
Engebø Favorable long term price trend for garnet Price trend of garnet (2016 – H1 2018) USD / tonne (CIF) 1,000 Australia Trend India PFS price assumption (USD 250/t) 800 600 400 200 0 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18 Jul-18 Note: USD/EUR = 0.9 used for price ca
Slide 15: Quality offtake partners with participation in construction financing
Engebø Quality offtake partners with participation in construction financing Rutile offtake Garnet offtake Japanese trading house The Barton Group • Heads of agreement for rutile offtake and construction • Heads of agreement for garnet offtake and financing financing • Offtake for garnet to the Amer
Slide 16: Attractive mining conditions
Engebø Attractive mining conditions Long term open pit mining with rich ore and low stripping ratio Mine life of 21 years1 Run of mine of 1.5 Mtpa Stripping ratio of 1.34 Easy transition to underground mining beyond the open pit phase Mine life of 13 years Run of mine of 1.5 Mtpa Operational flexibi
Slide 17: Logistical and freight cost advantages
Engebø Logistical and freight cost advantages Engebø mine Process plant and port Markets ~ 500 meters from mine to quay European customers two sailing days away Process plant with integrated quay Close proximity to European markets • Comminution and processing conducted • Deep sea ice-free quay allo
Slide 18: Existing quay enables modular construction
Engebø Existing quay enables modular construction Modularized process plant Process plant units • Improved schedule with use of offsite modular construction • Proven technology with high degree of automation • Yard construction allows for proper quality assurance and pre-commissioning • Process modu
Slide 19: Sustainable mining – minimizing footprint
Engebø Sustainable mining – minimizing footprint Environmental focus from detail engineering… • Energy efficient motors and variable speed drives to be used in comminution and process plant • Waste heat recovery system on dryers for heating of process plant • Compact design on process modules reduce
Slide 20: Completion of DFS ─ a major milestone
Engebø Completion of DFS ─ a major milestone DFS provides key technical outputs… • Engineering and 3D model of facilities • Engineering and 3D model of process modules • Detailed specifications of equipment packages • Detailed description of all key aspects of the Engebø project • Construction sched
Slide 21: Financing plan
Engebø Financing plan Clean funding strategy applied in development phase • Zero debt on the balance sheet to date • Approximately NOK 70m in capital requirement for pre-construction phase • DFS provides robust basis for further financing Further funding options to be explored post DFS • Several wor
Slide 22: Financial highlights from PFS study
Engebø Financial highlights from PFS study Base case financial metrics Post-tax NPV1 Post-tax IRR Life of mine Payback time Capex 305 21 29 <5 207 USDm % years years USDm With further upside potential Life of mine Sales Extension of life of mine by Increased garnet sales in initial including inferre
Slide 23: Industry leading revenue-to-cost position for rutile
Engebø Industry leading revenue-to-cost position for rutile Industry revenue-to-cash cost1 curve for TiO2 feedstock (2021) 1st quartile 2nd quartile 3rd quartile 4th quartile 4.2 3.6 Engebø R/C-ratio of 3.92 3.0 2.4 2021 Industry weighted average: 1.85 1.8 1.2 0.6 0.0 0% 25% 50% 75% 100% Cumulative
Slide 24: Table of contents
Table of contents 1 Introduction 1 Introduction 2 Engebø – rutile and Engebø – rutile and garnet 2 garnet 3 Keliber – lithium3 Keliber – lithium 4 Summary 4 Summary 5 Appendix 5 Appendix 24
Slide 25: First European producer of battery grade lithium hydroxide
Keliber First European producer of battery grade lithium hydroxide Lithium-ion giga factories planned in Europe Planned Li-ion production capacity by 20281 Lithium-ion battery production capacity, 2028 (GWh) 1 Gwh demands 0.8 kt of lithium carbonate equivalent Project progress • By 2023 Giga-factori
Slide 26: Solid project economics in updated DFS
Keliber Solid project economics in updated DFS Key financials - updated DFS (Feb. 2019) Keliber ownership as of May 2019 State of Finland2 Post-tax NPV Post-tax IRR 57.2% Private and 1 432 24 institutional investors USDm % Development of mineral resources3 Thousand metric tonnes, measured and indica
Slide 27: Table of contents
Table of contents 1 Introduction 1 Introduction 2 Engebø – rutile and Engebø – rutile and garnet 2 garnet 3 Keliber – lithium3 Keliber – lithium 4 Summary 4 Summary 5 Appendix 5 Appendix 27
Slide 28: Key investment highlights – two attractive mineral projects
Key investment highlights – two attractive mineral projects Engebø (100%) Large deposit with unique location Keliber (18.5%) Quality offtake partners ▪ OAX: NOM for rutile and garnet Robust project economics Minerals for a sustainable future Strong competitive position Valuable investment in lithium
Slide 29: Table of contents
Table of contents 1 Introduction 1 Introduction 2 Engebø – rutile and Engebø – rutile and garnet 2 garnet 3 Keliber – lithium3 Keliber – lithium 4 Summary 4 Summary 5 Appendix 5 Appendix 29
Slide 30: Short payback period and long term cash flow
Engebø Short payback period and long term cash flow Revenue split1 USDm 40% 60% (Price USD 250 pmt) (Price USD 1070 pmt) Source: Engebø PFS, extended by one year 1) Based on first ten years 30
Slide 31: PFS - Engebø
Appendix PFS - Engebø Assumptions Value Unit Output Value Unit Garnet price 250 USD/tonne Pre-tax NPV @ 8% 332 USDm Rutile price 1 070 USD/tonne Pre-tax IRR 23.8 % Garnet sales (from ~2027) 261 000 Tonnes per annum Life of mine 29 years Rutile sales (average) 32 500 Tonnes per annum Payback period L
Slide 32: Flowsheet of rutile and garnet process
Appendix Flowsheet of rutile and garnet process Source: Engebø PFS 32
Slide 33: Shareholder information
Appendix Shareholder information Shareholder overview (as of 16 September 2019) Key shareholder information # Shareholder Country # of shares % of total Current # of shares outstanding: 143 791 772 1 Nordnet Bank AB Sweden 12,343,545 8.58% Share price (as of 16 September 2019): NOK 1.53 2 VPF Nordea
Slide 34: Income statement reflecting project progress and gain in Keliber
Appendix Income statement reflecting project progress and gain in Keliber Comments Income Statement (NOKm) H1 2019 H1 2018 Operating expenses -7.4 -4.7 1 EBIT Other operating expenses -28.5 -21.1 • Operating loss reflects the cost of ongoing DFS activities EBIT 1 -35.9 -25.8 2 Financial Income Share
Slide 35: Balance sheet with no interest bearing debt
Appendix Balance sheet with no interest bearing debt Balance Sheet (NOKm) 31.06.2019 31.12.2018 Comments Evaluation and exploration assets 25.8 25.6 PP&E 0.2 0.2 1 Financial assets Investment in associate - 21.3 • Financial assets comprise investment in Keliber Oy Financial assets 1 113.1 - 2 Cash a
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