Nordic Mining Asa · OSL:NOM
Nordic Mining Asa — Technical Presentation (January 2020)
35 slides from Nordic Mining Asa's technical 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 DFS Presentation position January 28, 2020
Slide 2: Disclaimer
Disclaimer This document has been used by Nordic Mining during an oral presentation. Therefore, this document is incomplete without the oral explanations, comments and supporting instruments that were submitted during the referred presentation. To the extent permitted by law, no representation or wa
Slide 3: Agenda
Agenda 1 Introduction and highlights 2 Project and operations 3 Financials 4 Way forward 5 Appendix 3
Slide 4: 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 5: 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 6: DFS documents an attractive mineral project
Introduction and highlights 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 of 19.8
Slide 7: Agenda
Agenda 1 Introduction and highlights 2 Project and Operations 3 Financials 4 Way forward 5 Appendix 7
Slide 8: Favourable location, jurisdiction and infrastructure
Project and operations 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 supp
Slide 9: Large high-grade rutile and garnet deposit
Project and operations 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 s
Slide 10: Mineral resource base with large upside potential
Project and operations 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 Measur
Slide 11: Major permits granted
Project and operations 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
Slide 12: 42 years of operations
Project and operations 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
Slide 13: Stockpiling allows for optimization of mine schedule
Project and operations 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 - H
Slide 14: Conventional process technology – extensive test work
Project and operations 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 • E
Slide 15: Minerals with unique properties and fundamental drivers
Project and operations 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 •
Slide 16: Reduced supply and increasing demand firms rutile market
Project and operations 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 t
Slide 17: Rutile price continues its upward trend
Project and operations Rutile price continues its upward trend Rutile price forecast (nominal) Price outlook US$/tonne FOB • TiO2 demand is closely linked to industrial 2 000 production, with some volatility from stocking and destocking cycles High case • Price bubble and significant supply overhang
Slide 18: Waterjet cutting drives global demand of quality garnet
Project and operations Waterjet cutting drives global demand of quality garnet Demand breakdown by region (2018) Key demand drivers Middle East 16% China • The primary markets for industrial garnet are abrasive 19% Other blasting and waterjet cutting 1% - No substitutes in waterjet cutting is expect
Slide 19: Garnet demand expected to firm garnet price outlook
Project and operations Garnet demand expected to firm garnet price outlook Global average garnet price forecast (nominal) Price outlook US$/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 H
Slide 20: Offtake partners with participation in construction financing
Project and operations 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
Slide 21: Agenda
Agenda 1 Introduction and highlights 2 Project and operations 3 Financials 4 Way forward 5 Appendix 21
Slide 22: Project economics – A strong business case
Financials 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
Slide 23: Key financials resilient to variations
Financials 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% 2
Slide 24: Strong and stable cash flow
Financials 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 anticip
Slide 25: Revenue vs cash costs per TiO2: a robust feedstock producer
Financials Revenue vs cash costs per TiO2: a robust feedstock producer 25
Slide 26: Agenda
Agenda 1 Introduction and highlights 2 Project and operations 3 Financials 4 Way forward 5 Appendix 26
Slide 27: Progressing towards construction and production
Way forward 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
Slide 28: From project to long-term industrial operation
Way forward 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 perma
Slide 29: Stepping up project financing activities
Way forward 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 pro
Slide 30: Acknowledgements
Acknowledgements HATCH COWL CORE ©) C3 ROBBINS =srik const ren 1 Jey , = asplan viak © vv ~( DEEP CHT E ‘ - y Mineral Unearthing Mineral Excellence Technologies ——$—= moar Cangang DNV:-GL IMSM aa 6) A ENGINEERING (MIU TS. ©) SINTEF Minerals INQ th NORDIC mininG 30
Slide 31: Questions?
Questions? 31
Slide 32: Agenda
Agenda 1 Introduction and highlights 2 Project and operations 3 Financials 4 Way forward 5 Appendix 32
Slide 33: Board of Directors and Management team
Appendix 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 experience from managemen
Slide 34: Key assumptions
Appendix 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 Infrastructu
Slide 35: Project financials
Appendix Project financials Unit Value Pre-tax NPV @ 8% USDm 450 Project financials Pre-tax IRR % 21.9 Net Project operating cashflow (undiscounted) USDm 2,160 Post-tax NPV @ 8% USDm 344 Post-tax IRR % 19.8 Payback period Years 4.2 Production capacity Initial production capacity ROM Mtpa 1.5 Capital
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