Nickel Industries Limited · ASX:NIC
Nickel Industries — Investor Presentation (February 2022)
49 slides from Nickel Industries's investor presentation, Feb 9, 2022
Slide 1: Building a Nickel Empire – Equity Raising Presentation
NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES BUILDING A NICKEL EMPIRE For personal use only Equity Raising Presentation February 2022 A defined growth path to become a top 10 global nickel producer 0
Slide 2: Important Notices and Disclaimer
Nickel Mines – Core Investment Thesis Important Notices and Disclaimer NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES This presentation is dated 9 February 2022 and has been prepared by, and is the sole responsibility of, Nickel Mines Limited ACN 127 510 589 ("Nickel Mines"
Slide 3: Important Notices and Disclaimer (cont'd)
Important Notices and Disclaimer (cont’d) NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Underwriters disclaimers The Placement will be fully underwritten by the Joint Lead Managers (“Underwriters”). For personal use only The Underwriters, together with each of their respec
Slide 4: Important Notices and Disclaimer (cont'd)
Nickel Mines – Core Investment Thesis Important Notices and Disclaimer (cont’d) NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Financial data All dollar values are in US dollars (US$) unless stated otherwise. All Nickel Mines references starting with “FY” refer to the finan
Slide 5: Nickel Mines – Core Investment Thesis
Nickel Mines – Core Investment Thesis NickelLeading Industry MinesCapital – coreIntensity investment thesis NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Defined growth path to becoming an established top 10 Proven commissioning and production expansion track record For pe
Slide 6: Nickel Mines – a world-class industrial processing business
Nickel Mines – a world-class industrial processing business NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Producing some of the most profitable nickel units in the global market For personal use only in partnership with Tsingshan – the world’s largest, lowest cost stainles
Slide 7: Transaction overview
NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES For personal use only Transaction overview 6
Slide 8: Transaction overview
Transaction overview NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES In December 2021, Nickel Mines executed a binding definitive agreement (“Agreement”) with Shanghai Decent to acquire a 70% interest in the Oracle Nickel Project (“ONI”) (the “Transaction”) Nickel Mines
Slide 9: ONI consideration and acquisition timetable
ONI consideration and acquisition timetable NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Nickel Mines has agreed a payment schedule which will Milestone Amount (US$m) Comment % of ONI see it acquire a 70% interest in ONI For personal use only Total consideration, incl
Slide 10: Sources and uses of funds
Sources and uses of funds NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Following completion of the Equity Raise, Nickel Mines will be fully funded for all Transaction payments, up to and including 30 September 2022 For personal use only The majority of the proceeds of t
Slide 11: The next wave of growth
NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES For personal use only The next wave of growth 10
Slide 12: ANI and ONI overview
ANI capacity New overview coming online over the next 12 months NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES For personal use only Capital cost guarantee Not to exceed US$700m (1) Angel No cost overrun risk Nickel First production (“ANI”) 4 next generation RKEF lines
Slide 13: ANI and ONI will be transformative to NIC's production and financial profile
ANI and ONI will be transformative to NIC’s production and financial profile NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Consolidated production (100% basis) ? FY 2021 RKEF EBITDA of US$225M, 140,000 delivered at a margin of US$5,607/t of Ni Ni Eq production (tpa)(3) F
Slide 14: Transaction to establish Nickel Mines as a top 10 global nickel producer
ANI overview Transaction to establish Nickel Mines as a top 10 global nickel producer NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES ONI acquisition to add significant scale, while diversifying Nickel Mines’ production footprint 2021 Processed Nickel Production (kt) For per
Slide 15: Bottom quartile, industrial style cost base
Bottom quartile, industrial style cost base NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Wood Mackenzie NPI/FeNi cost curve (2020) NIC is a low cost, bottom quartile producer of NPI For personal use only 1st Quartile 2nd Quartile 3rd Quartile 4th Quartile 30,000 Underpi
Slide 16: Material tax concessions – by Decree of the Indonesian Government
ANI overview Material tax concessions – by Decree of the Indonesian Government NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES For personal use only Existing production Future production HNI RNI ANI ONI 100% corporate income tax reduction (from the year of 7 years 7 years 10
Slide 17: High cash conversion supporting sustainable, robust profitability
High cash conversion supporting sustainable, robust profitability NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Underpinned by cost profile, material tax concessions and minimal levels of sustaining capex For personal use only High cash flow conversion throughout 2021 US$m
Slide 18: Sustainability and future-facing nickel opportunities
NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES For personal use only nickel opportunities Sustainability and future-facing 17
Slide 19: Sustainability – investing in our social licence to operate (Community)
Sustainability – investing in our social licence to operate NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Community For personal use only >1,850 local employees at current operations with an additional ~2,000 expected to be employed at ANI and ONI, benefiting local communi
Slide 20: Sustainability – investing in our social licence to operate (Environment)
Sustainability – investing in our social licence to operate NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Environment For personal use only Maiden Sustainability Report expected 2Q’22 to serve as baseline future reporting and decarbonisation projects Significant progress o
Slide 21: Solar Power – our first Future Energy collaboration
Solar Power – our first “Future Energy” collaboration NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Commitment to a more sustainable future for Indonesia’s nickel industry For personal use only MoU signed in January 2022 with PT Sumber Energi Surya Nusantara (“SESNA”) to
Slide 22: Battery grade nickel – nickel matte and HPAL potential
Battery grade nickel – nickel matte and HPAL potential NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Potential to become a producer of battery grade nickel for sale into the electric vehicle (‘EV’) market. Battery grade nickel will be critical input into technologies for e
Slide 23: New Resource potential
New Resource potential NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Siduarsi Nickel-Cobalt Project For personal use only Located in West Papua province, Indonesia 6th generation Contract of Work (‘CoW’) IWIP Siduarsi Tablasufa Staged “earn-in” structure to acquire 1
Slide 24: Nickel Mines – why now?
Nickel Mines – why now? NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Consolidated production (100% basis) ? Defined growth path to becoming an established top 10 global 140,000 Ni Eq production (tpa)(3) For personal use only nickel producer 120,000 ? Consistent performanc
Slide 25: Equity raising details
NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES For personal use only Equity raising details 24
Slide 26: Equity raising details
Equity raising details NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Nickel Mines is undertaking a US$225 million capital raise (“Equity Raise”), comprising: For personal use only – a ~US$106m fully underwritten institutional placement (the “Institutional Placement”), th
Slide 27: Timetable
Timetable NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Event Date For personal use only 7:00pm (AEDT) Record date for SPP Tuesday, 8 February 2022 Trading halt lodged Wednesday, 9 February 2022 Announcement of Equity Raise Wednesday, 9 February 2022 Trading halt lifted –
Slide 28: Appendix A – Current operations
NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES For personal use only Appendix A Current operations 27
Slide 29: Operational consistency – a hallmark of our business
Operational consistency – a hallmark of our business NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Consistent, industrial style production and cost base with production set to triple over the next 12 months For personal use only RKEF production March Qtr June Qtr September
Slide 30: Strong, consistent EBITDA per tonne of Ni sold despite cost increases
Strong, consistent EBITDA per tonne of Ni sold despite cost increases NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Nickel Mines has maintained strong margins in all operating cost environments. Consistent production and stable margins highlight the “industrial nature” of
Slide 31: Strong operational performance at Hengjaya Mine
Strong operational performance at Hengjaya Mine NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Production summary March Qtr June Qtr September Qtr December Qtr For personal use only Saprolite mined wmt 456,487 574,791 579,156 847,260 Overburden mined BCM 262,270 549,213 793
Slide 32: Dec'21 Quarter financial results
Dec’21 Quarter financial results (all figures in US$) NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Presented on a 100% basis unless otherwise stated For personal use only Gross production Nickel metal tonnes 10,087 -0.3% (from 10,113 tonnes in Sept Qtr) NIC attributable p
Slide 33: Appendix B – Risk factors
NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES For personal use only Risk factors Appendix B 32
Slide 34: Risk factors
Risk factors NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES This section discusses some of the risks associated with an investment in Nickel Mines. Nickel Mines’ business is subject to a number of risk factors both specific to its business and of a general nature which may
Slide 35: Risk factors (cont'd)
Risk factors (cont’d) NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Risk Description For personal use only The continued operations of HNI and RNI and future operations and development of ANI and ONI are heavily reliant on the relationship between the Company and Tsingshan
Slide 36: Risk factors (cont'd)
Risk factors (cont’d) NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Risk Description For personal use only CAs The CAs are material contracts which set out the terms of the Company’s key partnership with Shanghai Decent and its associates in respect of the RKEF lines of HN
Slide 37: Risk factors (cont'd)
Risk factors (cont’d) NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Risk Description For personal use only The HNI, RNI, ANI and ONI Projects are all located in Indonesia. Indonesia is considered an emerging market. Indonesia faces various socio-political issues and has, f
Slide 38: Risk factors (cont'd)
Risk factors (cont’d) NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Risk Description For personal use only Mining for ore and processing NPI can be potentially environmentally hazardous and may give rise to potentially substantial costs for environmental rehabilitation, da
Slide 39: Risk factors (cont'd)
Risk factors (cont’d) NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Risk Description For personal use only The Company’s resources will decline as mining continues and the Hengjaya Mine depends on the Company’s ability to replenish resources for long-term viability. This,
Slide 40: Risk factors (cont'd)
Risk factors (cont’d) NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Risk Description For personal use only Risk that the Company’s management The Company’s business and future success heavily depends upon the continued services of management and other key personnel. If one
Slide 41: Risk factors (cont'd)
Risk factors (cont’d) NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Risk Description For personal use only The Company insures its operations in accordance with industry practice and to the extent that it is within its reasonable power and control, the Company seeks to hav
Slide 42: Risk factors (cont'd)
Risk factors (cont’d) NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Risk Description For personal use only Nickel Mines has entered into a placement agreement with the joint lead managers (“Joint Lead Managers”) dated 9 February 2022 (“Placement Agreement”) pursuant to whi
Slide 43: Risk factors (cont'd)
Risk factors (cont’d) NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Risk Description For personal use only (prosecution) any of the following occurs: − a director or senior manager of Nickel Mines is charged with an indictable offence; − any regulatory body commences any
Slide 44: Risk factors (cont'd)
Risk factors (cont’d) NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Risk Description For personal use only − (change in laws) a new law is introduced, or there is a public announcement of a proposal to introduce a new law, into the Parliament of Australia or any State of A
Slide 45: Risk factors (cont'd)
Risk factors (cont’d) NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES General Risks Description For personal use only The Company and the enterprises in which it invests are subject to risks related to litigation and administrative proceedings in the event of an unfavourable
Slide 46: Appendix C – International Offer Restrictions
NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES For personal use only Appendix C International Offer Restrictions 45
Slide 47: International Offer Restrictions
International Offer Restrictions NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES This document does not constitute an offer of new ordinary shares (“New Shares”) of the Company in any jurisdiction in which it would be unlawful. In particular, this document may not be distrib
Slide 48: International Offer Restrictions
International Offer Restrictions NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES China This document has not been approved by, nor registered with, any competent regulatory authority of the People's Republic of C hina (excluding, for purposes of this paragraph, Hong Kong Spe
Slide 49: International Offer Restrictions
International Offer Restrictions NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Singapore For personal use only This document and any other materials relating to the New Shares have not been, and will not be, lodged or registered as a pr ospectus in Singapore with the Monet
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