Nickel Industries Limited · ASX:NIC
Nickel Industries — Nickel Mines — Investor Presentation (August 2018)
30 slides from Nickel Industries's investor presentation, August 2018
Slide 1: Investor Presentation August 2018
NICKEI INVESTOR PRESENTATION MINES LIMITED AUGUST 2018
Slide 2: Disclaimer
NICKEL IMITED DISCLAIMER This presentation has been prepared by Nickel Mines Limited (ABN 44 127 510 589) (‘NML’). 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 3: . 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 4: Executive Summary
EXECUTIVE SUMMARY NML holds an 80% interest in PT Hengjaya Mineralindo Nickel Mines Limited (NML) is an Australian publicly listed company (PTHM) which holds 100% trading on the ASX under of the Hengjaya Nickel the ticker NIC. Mine (HM). HM is located in Morowali Regency, Central Sulawesi, Indonesia
Slide 5: Executive Summary
EXECUTIVE SUMMARY The SDI and Wanlu investments were subject to the completion of Due Diligence on NML and the satisfaction of all Conditions Precedent (CP) within the CSA, including being “debt free”. As contemplated by the CSA, NML utilised the SDI and Wanlu subscription monies (US$50M) to fund it
Slide 6: 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 7: 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 8: 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 9: 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 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: Supported by World Class Facilities & Infrastructure
( SUPPORTED BY WORLD CLASS FACILITIES & INFRASTRUCTURE
Slide 12: Pre IPO
PRE IPO | aon WZ SEPTEMBER NML signed a landmark CSA with SDI and Wanlu to build a 2-line RKEF plant for US$200M. COMPLETED 8 | 2018 NE JANUARY NML completed a ~US$27M. capital raising to become ‘debt free’ — a condition precedent to SDI and Wanlu investing in NML. Foreign-invested limited liability
Slide 13: Tsingshan Collaboration
(i TSINGSHAN COLLABORATION LIMITED SPV HOLDCO PROPOSED POST IPO <12 MONTHS PRODUCTION LONG LIFE GROWTH POTENTIAL NML proposes to increase its No later than 12 months after The 2-line RKEF plant will HM’s currently defined Discussions ongoing holding in SPV HoldCo to first NPI production from the pro
Slide 14: NML Group Structure
(i NML GROUP STRUCTURE (Local Indonesian Partner) SHAREHOLDERS 40% > 4 100% eae NF NS 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% Nl. * Go
Slide 15: Tsingshan's Indonesian NPI production capacity sets new industry standards
Tsingshan’s Indonesian NPI production capacity has set new industry standards for operating costs and capital intensity. a Business Costs $/t PROMI YEAR PLANT NICAPACITY (Kt pa) CAPITALCOST _COST/tNiEq , WE coptatcnane sn (ussM) (uss) Hi Tax$it Murrin Murrin 1999 HPAL 40 1,700 42,500 Ravensthorpe 20
Slide 16: C1 Cost (US$/t)
C1 COST (USS/T) I Feni Okt 1* QUARTILE 100 kt 200 kt HE npibr 6M Chinese NPI 2" QUARTILE 300 kt 400 kt NICKEL MINES LIMITED 3" QUARTILE 4" QUARTILE 600 kt 700 kt 800 kt 900 kt RECOVERED NICKEL PRODUCTION (7 Indonesian NPI @ nv Source : Wood Mackenzie 16
Slide 17: Incentive Price (US$/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 @nvt BM Sulphide © Laterite NICKEL MINES LIMITED = Wood Mackenzie ha
Slide 18: 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 NML 18
Slide 19: NML — A Key Partner in SDI's Growth Plans
10 NML— A KEY PARTNER IN SDI’S GROWTH PLANS In June 2018 NML and SDI signed a MOU for an additional two RKEF Lines. As contemplated under the MOU: + NML 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 will
Slide 20: Financial Model
11 FINANCIAL MODEL NICKEL STEADY STATE OPERATIONS om 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 21: Financial Model Cost Sensitivity Analysis
FINANCIAL MODEL COST SENSITIVITY ANALYSIS 60% RKEF OWNERSHIP - Mine & RKEF Opex +10% 60% RKEF OWNERSHIP - Mine & RKEF Opex +20% 60% RKEF Ownership Nickel Price 60% RKEF Ownership Nickel Price Steady State Ussit 8,000 10,000 12,000 14,000 «16,000 -—«*18,000 Steady State Ussit 8,000 10,000 12,000 14,0
Slide 22: 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 23: Nickel Markets: Nickel 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 24: 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 25: 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 26: Peter Wei
“ Peter Wei le 73 Directoumicy Manca Pres
Slide 27: Appendices
APPENDICES
Slide 28: 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 29: Nickel Mines Limited background
NICKEL § LIMITED Nickel Mines Limited (‘NML or ‘the Company’) in an unlisted Australian public company that was incorporated in 2007. NML 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’) located
Slide 30: 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