Nordic Mining Asa · OSL:NOM
Nordic Mining Asa — Investor Presentation (June 2016)
43 slides from Nordic Mining Asa's investor presentation, June 2016
Slide 1: Company presentation June 2016
OAX: NOM Company presentation June 2016 Exploration and production of high-end minerals and metals Nordic Mining ASA | N-0250 Oslo | Norway | Tel +47 22 94 77 90 | Fax +47 22 94 77 01 | Org. no 989 796 739 | post@nordicmining.com
Slide 2: Disclaimer
Disclaimer NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN UNITED STATES, CANADA, JAPAN, AUSTRALIA OR SINGAPORE This document has been used by Nordic Mining (the ”Company”) during an oral presentation. Therefore, this document is incomplete without the o
Slide 3: Developing high-value assets in the Nordic Region
Developing high-value assets in the Nordic Region Platinum, Palladium Titanium - natural rutile High Purity Quartz Lithium Seabed minerals 3
Slide 4: Minerals for a sustainable future
Ti Pt Lighter aircrafts Minerals for a Clean air Pd sustainable future Electric cars Li Renewable energy Si 4
Slide 5: Rights Issue opens 9 June 2016
Rights Issue opens 9 June 2016 Purpose to finance PFS for the Engebø rutile project as the next value- adding milestone* • Rights Issue of up to 170,000,000 Offer Shares • Subscription price NOK 0.50 per Offer Share • Proceeds from the Rights Issue; in total up to NOK 85 million will be used primari
Slide 6: Engebø titanium
Engebø titanium One of the world’s largest deposits of natural rutile Has the highest grade among current producers and projects Impurities at background levels Located next to tidal waters and European markets Permitted for 50 years of operation Garnet as valuable by-product 6
Slide 7: JORC resource of 154M tonnes @ 3.77% TiO2
JORC resource of 154M tonnes @ 3.77% TiO2 Historical estimate of 383M tonnes @ 3.96% TiO2 7
Slide 8: Well-defined deposit
Well-defined deposit Core sample drilling completed in April 2016 Total of 87 exploration and geo-tech drill holes JORC Resource* Resource class Mill tonnes TiO2% @ JORC 3% cut-off Indicated 31.7 3.77 Inferred 122.6 3.75 Total 154.3 3.77 A total of 21,400 meters drilled 1,129 surface samples >
Slide 9: Engebø is among the largest rutile deposits in the world
Engebø is among the largest rutile deposits in the world Rutile projects’ grade and target production 4,50% Engebø 4,00% 3,50% Murray Basin 3,00% Rutile (%) Cerro Blanco 2,50% 2,00% Sierra Rutile 1,50% Coburn Donald 1,00% Ranobe Planning 0,50% Kwale Moma Construction 0,00% Production -0,50% Grande C
Slide 10: The highest rutile grade and lowest impurity content
The highest rutile grade and lowest impurity content Rutile grade for current feedstock producers and planned projects Engebø 3.77% Murray Basin ‐ Iluka 2.32% Cerro Blanco 2.10% Akonolinga (Years 1‐6) 1.66% Project Sierra Rutile 1.42% Producer Akonolinga 1.15% Kwale 0.65% Snapper 0.59% Donald 0.37%
Slide 11: European pigment majors will be future customers
European pigment majors will be future customers Regional, stable supply brings customer benefits Substantial freight reduction compared to existing supply Plant-to-plant shipment Simple logistics improve working capital, storage and planning Several European customers can each take Engebø’s
Slide 12: Why is rutile an attractive mineral?
Why is rutile an attractive mineral? • Has unique opacity and reflection characteristics • Environmentally friendly, and the most effective pigment component • Biocompathible, gives no reactions from the human body • Effective reflection of UV radiation • Becomes a strong, light and 100% non-corrosi
Slide 13: The TiO2 value chain from mine to consumer
The TiO2 value chain from mine to consumer Mining Processing End use Rutile is mined from ore or Rutile is processed through Majority of TiO2 feedstock is mineral sands producing a rutile chlorination in reactors which used in production of pigment concentrate produces TiO2 pigment for paints,
Slide 14: Long sea freights underpin attractiveness of new European supply
Long sea freights underpin attractiveness of new European supply 22% 8% 5% 8% Norway 5% Canada Ukraine US 5% China 5% 3% India 19% 20% Vietnam Sierra Leone Australia South Africa Rutile producer Ilmenite producer Cylinder indicates % of world TiO2 feedstock production Zimbabwe Ilmenite & rutile prod
Slide 15: Garnet, by-product with benefits for the environment
Garnet, by-product with benefits for the environment • Preferred sand-blasting medium, replacing sand with contents of free silica • Garnet is used as the primary cutting medium in water-jet cutting machines • Annual global production of garnet is approximately 2 million tonnes • Broad price range d
Slide 16: Efficient and area-tight concept, minimum transportation costs
Efficient and area-tight concept, minimum transportation costs 16
Slide 17: Favourable topography - Easy access to underground areas
Favourable topography - Easy access to underground areas • Combined open pit and underground mining • Low waste rock ratio (0.45 : 1 (waste /ore)) • Glory hole with short haulage distance (< 600 m average) • Low Capex on establishing underground operations 17
Slide 18: Preliminary Engebø key figures
Preliminary Engebø key figures Life of mine 50 years Open pit production 10 - 15 years Underground 35 - 40 years CAPEX USD 300 million NPV after tax @ 8% WACC USD 466 million IRR after tax 20.7 % Payback time (CAPEX/EBITDA) 4.5 years Break-even price for rutile (IRR = 0) USD 370 per tonne 18
Slide 19: Preliminary capital cost and OPEX estimates
Preliminary capital cost and OPEX estimates* Capex estimate USDm OPEX estimates (open pit) USD/t rutile Royalties and land acquisition 13 Ex. by-product credit 550 Infrastructure and civil 83 Incl. by-product credit 185 Mine 17 Crushing facility 22 Wet process package 107 Peer comparison Sierra USD/
Slide 20: Positive long-term price outlook for rutile
Positive long-term price outlook for rutile Selected research reports from Q1 2016 2016 2017 Long-term (Price forecasts in USD per tonne rutile) Royal Bank of Canada (RBC) 813 900 1,100 UBS 800 875 1,300 J.P. Morgan 698 677 1,000 Credit Suisse 750 800 1,250 Investec 763 838 1,020 Maquarie 700 680 81
Slide 21: Project development – tentative timeline
Project development – tentative timeline 2015 2016 2017 2018 Resource classification Process tests/optimalisation Water & power supply Eng. & cost review Pre-feasibility Study Pilot production Basic engineering Market/offtake Def. feasibility study(DFS) Project financing Investment decision 21
Slide 22: Development activities towards PFS
Development activities towards PFS Activity Further description Resource classification • Core drilling of 6,400 meters completed in the open pit zone; drill core analysis and geotechnical assessments ongoing • Resource modeling and estimations in accordance with the JORC Code 2012; targeted complet
Slide 23: Keliber - Moving forward in high-grade lithium
Keliber - Moving forward in high-grade lithium Project highlights Key features Estimated 4.5 million tonnes Ore Reserves at an All permits in place for the Länttä deposit average grade of 1.10% Li2O in the Proven and Probable categories (JORC Code 2012)* Located close to processing industry cl
Slide 24: Prosperous lithium province provides exploration opportunities
Prosperous lithium province provides exploration opportunities Ore Reserves Category Deposit kt Li2O% JORC Proven Länttä 470 0,95 2012 Probable Länttä 540 0,93 2012 Syväjärvi 1 480 1,19 2012 Rapasaari 1 750 1,09 2012 Outovesi 250 1,20 Proven and Probable 4 490 1,10 All deposits will be mined as op
Slide 25: Deutsche Bank has published comprehensive Lithium report
Deutsche Bank has published comprehensive Lithium report* Price assumption in Keliber PFS: Appr. USD 8 per kg LC (average) (25%) Note (*): “Welcome to the Lithium-ion Age”, Deutsche Bank Market Research, 9 May 2016 25
Slide 26: Strong growth forecasted
Strong growth forecasted (25%) 26
Slide 27: Driven by the EV market
Driven by the EV market (25%) 27
Slide 28: Strong EV outlook in USA and China
Strong EV outlook in USA and China (25%) 28
Slide 29: Positive Pre-Feasibility Study financials
Positive Pre-Feasibility Study financials Preliminary Keliber key figures Production capacity, Lithium Carbonate (Li2CO3) 9,000 tpy Ore processing capacity 400,000 tpy Operative time (current open pit deposits) 11 years CAPEX EUR 164 million NPV after tax @ 8% WACC EUR 97 million IRR after tax 21% P
Slide 30: Investment highlights
Investment highlights OAX: NOM Titanium - Natural Rutile • World class rutile deposit; 50 years mine life and highest global TiO2 grade • Favourable location and logistics; competitive Capex/Opex Titanium – Natural Rutile • Internal NPV estimate (8%) of USD 466 million • Environmental permit for 50
Slide 31: Safety – Environment - Innovation
Safety – Environment - Innovation www.nordicmining.com 31
Slide 32: Appendix
Appendix 32
Slide 33: Board of Directors and Management
Board of Directors and Management Board of Directors Management Tarmo Tuominen, Chairman Ivar S. Fossum, CEO Chief Supply Chain Officer in the Finnish mineral Fossum holds a Master of Science in Mechanical group Nordkalk. Geologist with broad mining Engineering from the University of Science and exp
Slide 34: Shareholder structure and share price development
Shareholder structure and share price development Largest shareholders* Share overview and share price development* Name of shareholder No. of shares % Share overview 1 NORDNET BANK AB (NOMINEE) 30 204 681 7,8 % Stock symbol NOM 2 SKAGEN VEKST 15 469 257 4,0 % Stock exchange Oslo Axess 3 NORDEA BANK
Slide 35: Consolidated Income Statements
Consolidated Income Statements Q1-2016 Q1-2015 Acc. 2016 Acc. 2015 2015 Unaudited Unaudited Amounts in NOK million Unaudited Unaudited Audited - - Sales - - - (1.6) (1.7) Payroll and related costs (1.6) (1.7) (6.6) (1.6) (1.5) Other operating expences (1.6) (1.5) (6.1) (3.2) (3.2) Operating loss (3.
Slide 36: Consolidated Statements of Financial Position
Consolidated Statements of Financial Position 31.03.2016 31.12.2015 Amounts in NOK million Unaudited Audited ASSETS Evaluation and exploration assets 17.5 9.8 Property, plant and equipment 0.4 0.1 Investment in an associate 12.4 6.2 Total non-current assets 30.3 16.1 Cash 15.7 29.8 Other current ass
Slide 37: Nordic Quartz (100%) - Development in High Purity Quartz
Nordic Quartz (100%) - Development in High Purity Quartz Project highlights Key features JORC compliant resource estimates of 2.9 million Outcropping hydrothermal quartz deposit tonnes (indicated) and 1.3 million tonnes (inferred), Low in critical elements as Ti, Al, Fe, P, Na, K, Li, B with a
Slide 38: Kvinnherad quartz, core sample drilling completed in 2015
Kvinnherad quartz, core sample drilling completed in 2015 Quality Total impurities SiO2 % (ppm) Nordic Quartz 13 99.9987 Indicated: 2,9 million tonnes IOTA Std 19 99.9981 Inferred: 1,3 million tonnes IOTA 4 12 99.9988 IOTA 6 11 99.9989 38
Slide 39: Scoping study reveals robust Quartz project financials
Scoping study* reveals robust Quartz project financials Project highlights • Small-scale mining operation; 20,000 – 30,000 tonnes per year • 30 - 40 employees • Limited environmental impact • High purity and high value products require advanced processing facilities Key assumptions and figures Units
Slide 40: Pioneer in seabed mineral exploration in Norway
(80%) Pioneer in seabed mineral exploration in Norway Company highlights Company highlights Nordic Ocean Resources (NORA) has taken a pioneering NORA has applied for exploration licenses in the initiative for exploration of Norway’s seabed mineral Norwegian Economic Zone, and has ambition to be
Slide 41: MarMine – A forward looking project initiative
MarMine – A forward looking project initiative • The MarMine project was formally established 17 December 2015 with approximately NOK 25 million in financial support from the Norwegian Research Council • NORA participates together with 13 industrial partners with a joint financial contribution of ap
Slide 42: Preliminary financial estimates for the Engebø rutile project
Preliminary financial estimates for the Engebø rutile project* Main assumptions Key figures CAPEX: USD 300m NPV @ 8% WACC: USD 466m (after tax) Rutile recovery rate: 55% IRR 20.7% Ore production: 4 million tonnes p.a. Payback time: 4.5 years Rutile production: 87,000 tonnes p.a. EBITDA % open pit: 5
Slide 43: Positive long-term market outlook for rutile
Positive long-term market outlook for rutile* Market trends and long project lifetime are favourable for project financials 43 Note (*): Long-term rutile prices are Q1 2016 estimates from international banks following the titanium feedstock industry.