Nickel Industries Limited · ASX:NIC
Nickel Industries — BMO Global Metals & Mining Conference 2020
33 slides from Nickel Industries's conference presentation, Feb 19, 2020
Slide 1: Presentation to BMO Conference
ABN 44 127 510 589 Level 2, 66 Hunter Street Sydney NSW 2000 Australia T: +61 2 9300 3311 F: +61 2 9221 6333 E: info@nickelmines.com.au 19 February 2020 The Manager Companies ASX Limited 20 Bridge Street Sydney NSW 2000 (33 pages by email) PRESENTATION TO BMO CONFERENCE Nickel Mines Limited (‘the Co
Slide 2: A New Force in Global Nickel
A NEW FORCE IN GLOBAL NICKEL BMO Global Metals & Mining Conference February 2020
Slide 3: Disclaimer
Disclaimer 2 This presentation has been prepared by Nickel Mines Limited (ABN 44 127 510 589) (‘NIC’). 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 context. The infor
Slide 4: This Is Not a Mining Story
3 Whilst we own a world class nickel laterite mine THIS IS NOT A MINING STORY It’s a story about the production of the lowest capital intensive and most profitable nickel units in the global market in partnership with the world’s largest stainless steel producer.
Slide 5: Executive Summary
Executive Summary 4 NIC HNI RNI HM NIC ASX 60% 60% 80% Growth • Nickel Mines Limited (NIC) is • Hengjaya Nickel Project • Ranger Nickel Project • Hengjaya Mine • NIC has established itself an Australian company (HNI) (RNI) (HM) as a valued tenant of the publicly listed on the ASX. IMIP and trusted s
Slide 6: Corporate Snapshot
Corporate Snapshot 5 TRADING INFORMATION 18 FEBRUARY 2020 Directors and Management 11.3% ASX Code NIC Shanghai Decent Shares on Issue 1,665,468,329 Blackrock 18.1% 46.2% Share Price A$0.58 Shanghai Wanlu 12-month range A$0.37 –A$0.75 Regal 8.3% Market Capitalisation A$965.9M Other 9.0% 7.1% Share Pr
Slide 7: Hengjaya Mine
Hengjaya Mine 6 THE FOUNDATION ASSET Location Resource Mining • Morowali Regency, Central • JORC compliant resource: • Geology de-risked by Sulawesi, Indonesia. mining activity to date. • 37.5M dmt at 1.81% nickel • A large tonnage, high (1.5% COG) for ~680k • Excellent mining grade, open-cut mine i
Slide 8: Hengjaya Mine Location is Everything
Hengjaya Mine 7 Location is Everything
Slide 9: Tsingshan, Shanghai Decent & the IMIP
Tsingshan, Shanghai Decent & the IMIP 8 • Currently the world’s largest stainless steel • Shanghai Decent (SDI) is a Tsingshan group • Committed to ahead of the Indonesian producer with output of 10.65Mt in 2019. company. Government’s 2014 DSO export ban. • Manager of IMIP. • Fully permitted industr
Slide 10: Indonesia Morowali Industrial Park (IMIP)
The PT SMI facility is world-class and arguably the lowest cost FeNi operation in the world.” - Glencore Nickel Market Developments (September 2016) 9 Indonesia Morowali Industrial Park (IMIP)
Slide 11: Fully Integrated NPI & Stainless Steel Plant
Fully Integrated NPI & 10 Stainless Steel Plant Rotary Kiln RKEF Control Room Electric Furnace Molten NPI NPI Ingot Casting Stainless Steel Mix Stainless Steel Slab Hot Rolled Coil (HRC)
Slide 12: Supported by World Class Facilities & Infrastructure
Supported by World Class 11 Facilities & Infrastructure Surrounded by Ni Laterite Deposits Power Capacity (>2GW) Stockpile Areas Significant Port Facilities Executive Quarters and Helipad 5-Star Hotel
Slide 13: A Collaboration Philosophy
A Collaboration Philosophy 12 Tsingshan have a track record of successfully collaborating with numerous partners within the IMIP TECHNICAL/ SUPPORT SERVICES SDI + SDI + SDI + NIC 60% NIC 60% others others others SDI 40% SDI 40% PT SMI PT GCNS PT ITSS HNI RNI 4 RKEF Lines 8 RKEF Lines 8 RKEF Lines 1M
Slide 14: What Benefits Does Nickel Mines Get from Partnering with Tsingshan?
13 WHAT BENEFITS DOES NICKEL MINES GET FROM PARTNERING WITH TSINGSHAN?
Slide 15: Global Industry Lows in Capital Intensity
Global Industry Lows in Capital Intensity 14 Tsingshan have established a new paradigm for delivering nickel units to market Not all nickel units are created equal New benchmarks for project development have now been established Ni CAPITAL CAPEX/t CAPACITY COST NiEq PROJECT YEAR PLANT (Kt pa) (US$M)
Slide 16: Bottom Quartile Operating Costs
Bottom Quartile 15 Operating costs Cost Advantages for the IMIP ▪ The IMIP’s fully integrated production chain delivers significant cost and logistics savings. o Kiln heat recycled to assist ore drying. C1 costs currently < US$8,000/t o Hot charging of NPI directly into stainless operations yields e
Slide 17: Superior NPI Payabilities
Superior NPI Payabilities 16 Superior Payabilities Underpin a Compelling Economic Advantage for NPI Producers 110% 100% NPI payabilities typically range from ~90% to a small premium to LME nickel 90% 80% 70% Concentrate payabilities typically range from 65%to 75% of LME nickel 60% 50% NPI Payables C
Slide 18: Taxation Concessions
Taxation Concessions 17 By official decree of the Minister of Finance of the Republic of Indonesia Material tax concessions have been granted to both HNI and RNI 100% TAX EXEMPTION +2 Years WHT Free • 100% Corporate Income • Plus an additional 2 Years • Exemption from withholding Tax Reduction for 7
Slide 19: Review of Operations
NICKEL MINES LIMITED Review of Operations
Slide 20: December Quarter - Highlights
December Quarter - Highlights 19 Record quarterly production 10,968.3 tonnes of nickel metal (100% basis) +9.5% from 10,019.6 tonnes in September NIC attributable production 6,580.9 tonnes of nickel metal +27.5% from 5,161.0 tonnes in September RKEF December sales US$141.1M (100% basis) +20.4% from
Slide 21: RKEF Operations
RKEF Operations 20 An Outstanding December Quarter HENGJAYA NICKEL October November December Qtr Total Sept Qtr NPI Production tonnes 14,937.5 12,978.0 12,995.2 40,910.7 39,570.4 NPI Grade % 13.0 13.7 14.3 13.6 13.6 Nickel Metal Production tonnes 1,943.1 1,780.4 1,854.4 5,577.9 5,379.3 Cash Costs2 U
Slide 22: RKEF Monthly Production Performance
RKEF Monthly Production Performance 21 * 16.5kt pa HNI RNI HNI Cash Costs RNI Cash Costs ^ 15kt pa (design capacity) 2,250 8,500 2,000 1,943.1 1,904.2 1,913.5 1,924.8 8,300 1,872.9 8,256 1,858.9 1,854.4 1,765.2 1,780.4 1,819.5 1,693.7 8,100 1,750 1,647.5 1,666.7 Nickel Equivalent Tonnes 7,789 7,900
Slide 23: Hengjaya Mine Operations - December Quarter
Hengjaya Mine Operations -December Quarter 22 Production summary October November December Qtr Total Sept Qtr Tonnes mined Wmt 69,734 56,086 68,339 194,159 199,056 Overburden mined BCM 168,960 163,290 95,791 428,041 432,042 Strip ratio BCM/wmt 2.4 2.9 1.4 2.2 2.2 Tonnes sold wmt 70,549 59,311 67,035
Slide 24: Hengjaya Mine Expansion Initiatives
Hengjaya Mine Expansion Initiatives Numerous expansion initiatives are underway aimed at unlocking the full strategic value of HM Mine ▪ Objectives of HM mine expansion: o Ramp up production of saprolite ore to ~1.5Mt pa (currently ~600kt pa). o Prepare HM Mine to deliver 2Mt-3Mt of limonite ore for
Slide 25: Why Invest?
NICKEL Ph MINES LIVITED
Slide 26: Unique Growth Optionality
Unique Growth 25 Optionality A CLEAR LINE OF SIGHT ON ADDITIONAL NICKEL UNITS ▪ NIC distinguishes itself from its peer group with its unique growth optionality. 30,000 o No mine life limitations. o No project development risks. HNI RNI 25,000 ▪ NIC possesses contractual options to increase its owner
Slide 27: Unique Growth Optionality
Unique Growth The value of the HNI and RNI options? At current spot prices NIC would be buying additional 26 Optionality nickel units on an EBITDA multiple of ~3.6x NIC’s strong financial profile is underpinned by : A CLEAR LINE OF SIGHT ON STRONG EBITDA AND FCF GROWTH ▪ Industry low levels of capit
Slide 28: 18 Months of Achievement Now Delivering Value
27 Admission to ASX 300 18 Months of Achievement Now Delivering Value $0.80 Move to 60% RNI 18 MONTHS ON FROM NIC’S IPO: $0.70 • 60% interest in HNI and RNI. $0.60 • Both projects in production within 12 months of First NPI from RNI breaking ground. RNI tax concessions • HNI and RNI production run r
Slide 29: Investment Highlights
Investment Highlights 28 Why You Need to Own Nickel Mines Strategic Partnership Established tenant RKEF Processing Strengthening Nickel with Tsingshan within the IMIP Technology Market Fundamentals • Multi-faceted Collaboration • Indonesia/IMIP are the epicentre of • Tsingshan have pioneered RKEF •
Slide 30: www.nickelmines.com.au
29 www.nickelmines.com.au Robert Neale Chairman rneale@nickelmines.com.au Norman Seckold Deputy Chairman nseckold@nickelmines.com.au Justin Werner Managing Director jwerner@nickelmines.com.au Peter Nightingale Director and Chief Financial Officer pnightingale@nickelmines.com.au Richard Edwards Compa
Slide 31: ESG Considerations
ESG Considerations 30 Community Environment ▪ > 30,000 locals employed at the IMIP, > 350 locals employed at ▪ Hengjaya Mine - open cut, at surface truck and shovel HM Mine. operation - no tailings. ▪ NIC deeply involved in numerous community projects focused on ▪ HM recently voted Best Mine Site Re
Slide 32: Indonesia's Export Ban is Achieving its Objective
Indonesia’s Export Ban 31 is Achieving its Objective The value of Indonesian exports has grown significantly since the introduction of the export ban despite a lower average Ni price than in 2013. Indonesian nickel exports (Volume) Indonesian nickel exports (Value) Source: Badan Pusat Statistik, Mac
Slide 33: Statement of Compliance
Statement of Compliance 32 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 Institute of Mi
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