Nordic Mining Asa · OSL:NOM
Nordic Mining Asa — Investor Presentation (January 2020)
40 slides from Nordic Mining Asa's investor presentation, Jan 28, 2020
Slide 1: DFS reinforces Engebø as a world class rutile and garnet project
Large deposit with unique location Sustainable solutions Robust project economics DFS reinforces Engebø as a world class rutile and garnet project Quality offtake OAX: NOM partners Strong competitive Investor Presentation position January 28, 2020
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 Clarkson Platou Securities AS and SpareBank 1 Markets AS (the "Financial Advisors") , solely for use at a presentation to future potentia
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 • The price of the Shares could fluctuate significantly ability to obtain financing • Future sales, or the possibility for future sal
Slide 4: Table of contents
Table of contents 1 Introduction 1 Introduction and highlights 2 2 andEngebø Engebø – rutile garnet 3 3 Keliber – lithium Keliber – lithium 4 Summary 4 Summary 5 Appendix 5 Appendix 4
Slide 5: Minerals for a sustainable future
Introduction and highlights Minerals for a sustainable future Rutile • Energy efficient air transportation • Environmentally friendly pigment • Air cleaning surface materials • Health applications Engebø Rutile and Garnet (100%) Garnet • Health and environmentally friendly Ti cutting and blasting ma
Slide 6: Board of Directors and Management team
Introduction and highlights 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 experi
Slide 7: Overarching ESG goals
Introduction and highlights Overarching ESG goals Nordic Mining will develop the Company’s Projects in accordance with IFC Performance Standards and the Equator Principles, and on the basis of the United Nation’s sustainable development goals • Energy efficient mining and processing operations Clima
Slide 8: Engebø DFS documents an attractive mineral project
Introduction and highlights Engebø DFS documents an attractive mineral project De-risked for • DFS represents a major de-risking milestone financing and • Solid basis for financing execution Attractive • NPV@8%(real) of USD 450m and IRR of 21.9% pre-tax financials • NPV@8%(real) of USD 344m and IRR
Slide 9: Transaction overview
Introduction and highlights Transaction overview Offering details Use of proceeds The net proceeds of the Private Placement will be used Type of transaction: Private placement primarily to finance the Engebø project until the construction financing has been secured. This includes 168,791,772 shares
Slide 10: Table of contents
Table of contents 1 Introduction 1 Introduction and highlights 2 2 andEngebø Engebø – rutile garnet 3 3 Keliber – lithium Keliber – lithium 4 Summary 4 Summary 5 Appendix 5 Appendix 10
Slide 11: Favourable location, jurisdiction and infrastructure
Engebø Favourable location, jurisdiction and infrastructure • Location by the North Sea provides advantageous logistics • Norway, a politically stable region • Road access and two local airports • Deep sea, ice free quay on site • Renewable hydro power in close proximity • Local supply of fresh wate
Slide 12: Large high-grade rutile and garnet deposit
Engebø Large high-grade rutile and garnet deposit • 2.5 km hard rock eclogite ore body outcropping at surface • Extensive drilling and sampling campaigns comprising 21,000m of core drilling • Geotechnical assessments document competent rock with high stability that offers efficient solutions • Low l
Slide 13: Mineral resource base with large upside potential
Engebø Mineral resource base with large upside potential • Unique combination of high-grade rutile and garnet Mineral resources (2% TiO2 cut-off) • Among the highest rutile grades globally Tonnes TiO2 grade Garnet (mt) (%) grade (%) • Abundance of high quality Almandine garnet Measured (M) 29.2 3.60
Slide 14: Major permits granted
Engebø Major permits granted Granted Detailed zoning plan ✓ Extraction permits for the total deposit ✓ Landowner agreements for open pit, infrastructure and process plant areas ✓ Detailed zoning plan for Life of Mine operations ✓ Environmental permit In progress Open pit • Operating license • Zoning
Slide 15: 42 years of operations
Engebø 42 years of operations Open pit – 15 years Overview of open pit and underground • Low stripping ratio of 0.55 (waste tonne/ore tonne) • Staged approach with two “pushbacks” • Stockpiling of medium and lower grade ore for maximum resource utilization • Contractor mining planned for first 5 yea
Slide 16: Stockpiling allows for optimization of mine schedule
Engebø Stockpiling allows for optimization of mine schedule Mtpa Stockpile - Low Grade to Plant Stockpile - Medium Grade to Plant 3.0 Stockpile - High Grade to Plant Underground - Ore to Plant 2.5 Open Pit - Low Grade to Stockpile Open Pit - Medium Grade to Stockpile 2.0 Open Pit - High Grade Mining
Slide 17: Conventional process technology – extensive test work
Engebø Conventional process technology – extensive test work Key design factors Flowsheet • Integrated flowsheet for rutile and garnet • Favorable internal logistics with short distance from ore pass to quay • Underground infrastructure for primary crushing and siloed ore storage • Extensive instrum
Slide 18: Minerals with unique properties and fundamental drivers
Engebø Minerals with unique properties and fundamental drivers Rutile Garnet Pigment Titanium Welding rods Waterjet cutting Sand blasting Abrasives Market drivers Market drivers • Titanium has unique properties as oxide and metal • Emerging mineral with strong growth and potential • Rutile is the hi
Slide 19: Reduced supply and increasing demand firms rutile market
Engebø Reduced supply and increasing demand firms rutile market Global rutile supply development1 Supply ‘000 TiO2 units Legend 800 Others • Significant reduction in existing India rutile production from Australia -9.9% China and Africa US • Ceasing production in Ukraine, 400 Kenya the only country
Slide 20: Rutile price continues its upward trend
Engebø Rutile price continues its upward trend Rutile price forecast (nominal) Price outlook US$/tonne FOB • TiO2 demand is closely linked to industrial 2,000 production, with some volatility from stocking and destocking cycles High case • Price bubble and significant supply overhang in 2012, due to
Slide 21: Waterjet cutting drives global demand of quality garnet
Engebø Waterjet cutting drives global demand of quality garnet Demand breakdown by region (2018) Key demand drivers Middle East 16% China • The primary markets for industrial garnet are abrasive 19% Other blasting and waterjet cutting 1% - No substitutes in waterjet cutting is expected to strengthen
Slide 22: Garnet demand expected to firm garnet price outlook
Engebø Garnet demand expected to firm garnet price outlook Global average garnet price forecast (nominal) Price outlook US$/tonne FOB • Broad price range depending on qualities 400 • Test work has shown that garnet from Engebø is of high quality and well suited for waterjet cutting High case • Avera
Slide 23: Offtake partners with participation in construction financing
Engebø Offtake partners with participation in construction financing Rutile offtake Garnet offtake Japanese trading house The Barton Group • Heads of agreement for rutile offtake and • Heads of agreement for garnet offtake and financing construction financing • Offtake for garnet to the Americas • O
Slide 24: Project economics – A strong business case
Engebø Project economics – A strong business case Pre-Tax Post-Tax Net Present Value @ 8% USD 450m USD 344m Internal rate of return 21.9% 19.8% Garnet Rutile Yearly average sales1 278 ktpa 34 ktpa Revenue3 Opex EBITDA Average per tonne sold1,2 USD 339 USD 73 USD 266 Average per year1,2 USD 106m USD
Slide 25: Key financials resilient to variations
Engebø Key financials resilient to variations Internal Rate of Return (post-tax) 19.8% Opex 19% 19% 20% 21% +/- 20% +/- 10% • The Internal Rate of Return (IRR) is Rutile revenue 18% 19% 21% 22% most sensitive to positive changes in capex and changes in garnet revenue Garnet revenue 17% 18% 21% 23% •
Slide 26: Strong and stable cash flow
Engebø Strong and stable cash flow USDm 150 100 50 0 -50 Garnet revenue -100 Rutile revenue -150 Expansionary Initial capex capex Delayed capex -200 • Year zero marks the first year of commercial Opex production after two years of construction -250 Tax • The accumulated break even FCF is anticipated
Slide 27: Revenue vs cash costs per TiO2: a robust feedstock producer
Engebø Revenue vs cash costs per TiO2: a robust feedstock producer 27
Slide 28: Progressing towards construction and production
Engebø Progressing towards construction and production FEED • Detailed engineering • EPCM bid process • Final negotiations of main contract packages • Procurement preparations, long lead items • Building permits at site • Environmental monitoring Strategic focus • Contracted EPCM services • Off-site
Slide 29: From project to long-term industrial operation
Engebø From project to long-term industrial operation Owner’s team Environmental and social management • Reducing risk; early recruitment of key personnel for • Environmental monitoring program procurement, construction and commissioning • Stakeholder engagement plan and grievance • Build permanent
Slide 30: Stepping up project financing activities
Engebø Stepping up project financing activities Status of activities Sources of financing and guarantees • Debt advisor appointed • Bank debt • Initial meetings with banks and guarantors • ECA (Export Credit Agencies) • Banks’ due diligence activities ongoing • Offtake finance • Traditional project
Slide 31: Table of contents
Table of contents 1 Introduction 1 Introduction and highlights 2 2 andEngebø Engebø – rutile garnet 3 3 Keliber – lithium Keliber – lithium 4 Summary 4 Summary 5 Appendix 5 Appendix 31
Slide 32: 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 631 equivalent 207 148 112 5 China Europe North Am
Slide 33: Solid project economics in updated DFS
Keliber Solid project economics in updated DFS Key financials - updated DFS (Feb. 2019) Keliber ownership as of January 2020 State of Finland2 24.3% Post-tax NPV Post-tax IRR 57.2% 432 24 Private and 1 institutional investors USDm % 18.5% Development of mineral resources3 Thousand metric tonnes, mea
Slide 34: Table of contents
Table of contents 1 Introduction 1 Introduction 2 2 andEngebø Engebø – rutile garnet – DFS 3 3 Keliber – lithium Keliber – lithium 4 Summary 4 Summary 5 Appendix 5 Appendix 34
Slide 35: Key investment highlights - An attractive mineral project
Summary Key investment highlights - An attractive mineral project Large deposit with unique location Sustainable ▪ OAX: NOM solutions Robust project economics Minerals for a sustainable future Quality offtake partners Strong competitive position 35
Slide 36: Table of contents
Table of contents 1 Introduction 1 Introduction 2 2 andEngebø Engebø – rutile garnet – DFS 3 3 Keliber – lithium Keliber – lithium 4 Summary 4 Summary 5 Appendix 5 Appendix 36
Slide 37: Shareholder information
Appendix Shareholder information Shareholder overview (as of 27 January 2020) Key shareholder information # Shareholder Country # of shares % of total Current # of shares outstanding: 168 791 772 1 Nordnet Bank AB Sweden 15,535,751 9.20% Share price (as of 27 January 2020): NOK 3.54 VERDIPAPIRFONDET
Slide 38: Balance sheet with no interest bearing debt
Appendix Balance sheet with no interest bearing debt Balance Sheet (NOKm) 31.12.2019 31.12.2018 Comments Unaudited Audited Evaluation and exploration assets 26.1 25.6 1 Financial assets Financial assets 1 90.8 - • Financial assets comprise investment in Keliber Oy Investment in associate - 21.3 2 Ca
Slide 39: DFS Engebø - Key assumptions
Appendix DFS Engebø - Key assumptions Assumptions first 15 years Unit Value Rutile price USD/t 1,142 Garnet price USD/t 246 Yearly average rutile sales ktpa 34 Yearly average garnet sales ktpa 278 Capex USDm 311 Open pit mining and comminution USDm 59 Mineral processing and tailings handling USDm 78
Slide 40: Project financials DFS
Appendix Project financials Unit Value Pre-tax NPV @ 8% USDm 450 Project DFS financials Engebø – Pre-tax IRR Net Project operating cashflow (undiscounted) % USDm 21.9 2,160 Key figures Post-tax NPV @ 8% USDm 344 Post-tax IRR % 19.8 Payback period Years 4.2 Production capacity Initial production capa