Nickel Industries Limited · ASX:NIC
Nickel Industries — Nickel Mines — Melbourne Mining Club Cutting Edge Series (September 2019)
28 slides from Nickel Industries's conference presentation, Sep 10, 2019
Slide 1: Presentation to Investors
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 10 September 2019 The Manager Companies ASX Limited 20 Bridge Street Sydney NSW 2000 (28 pages by email) PRESENTATION TO INVESTORS Nickel Mines Limited (‘the Compan
Slide 2: Emerging as a Globally Significant Nickel Producer
NICKEL emercine.AS.A GLOBALLY SIGNIFICANT NICKEL PRODUCER a MINES@elV| TED MELBOURNE MINING CLUB
Slide 3: Disclaimer
NICKEL DISCLAIMER MINES LIMITED 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
Slide 4: Executive Summary
EXECUTIVE SUMMARY EMERGING AS A GLOBALLY SIGNIFICANT NICKEL PRODUCER Nickel Mines Limited (NIC) is an Australian company publicly listed on the ASX. AS200M IPO completed on 20 August 2018. NIC holds an 80% interest in PT Hengjaya Mineralindo (PTHM) which holds 100% of the Hengjaya Nickel Mine (HM) -
Slide 5: Corporate Shareholder Structure
CORPORATE Shareholder Structure NICKEL ASX Code NIC Shares on Issue 1.665.4.5B Share Price AS$0.65 Range AS0.22-A$0.69 20 August 2018 - 6 September 2019 ® Directors and Management. = Shanghai Decent Shanghai Decent 18.1% Bell Potter Target Price $0.94 Blackrock 9.6% Patersons Securities BUY Target P
Slide 6: Hengjaya Mine
HENGJAYA MINE THE FOUNDATION ASSET LOCATION + Morowali Regency, Central Sulawesi, Indonesia. = Alarge tonnage, high grade, open-cut mine in MAKASSAR | close proximity to IMIP. ) LICENCE Mahalona @ = IUP licence covering 6,249 s hectares. = 20 year mining operation/ production licence with a further
Slide 7: This Is Not a Mining Story
Whilst we own a world class nickel laterite mine... THIS IS NOT A MINING STORY It’s a story about the production of the most profitable nickel units in the global market in partnership with the world’s largest stainless steel producer
Slide 8: Introduction to Tsingshan, SDI and IMIP
INTRODUCTION TO TSINGSHAN, SDI and IMIP TSNGSHa? Currently the world’s largest stainless steel producer with output of 9.29 Mt in 2018. Established a clear early mover advantage in building in-country processing capacity within Indonesia. Arecognised global leader in RKEF processing technology to pr
Slide 9: Improving outlook for stainless steel and EV battery market
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 10: Improving outlook for stainless steel and EV battery market
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 11: Supported by World Class Facilities & Infrastructure
SUPPORTED BY WORLD CLASS FACILITIES & INFRASTRUCTURE
Slide 12: Hengjaya Mine: Location Is Everything
HENGJAYA MINE NICKEL LOCATION IS EVERYTHING WINES IMITED ETE BETE CENTRAL PIT © ws HM JETTY : - PT. HM IUP = ULTRA MAFIC AREA ‘2 Sn ll
Slide 13: What Benefits Does Nickel Mines Get From Partnering With Tsingshan?
WHAT BENEFITS DOES NICKEL MINES GET FROM PARTNERING WITH TSINGSHAN? 12
Slide 14: Project plant capacity and capital cost comparison
PROJECT PLANT NICAPACITY (Ktpa) CAPITAL COST COST/t NiEq (UssM) (uss) Murrin Murtin 1999 1,700 42,500 wane musts Ravensthorpe 2007 3,000 75,000 VNC (Goro) 2010 6,000 100,000 Ambatovy 2012 5,500 91,667 Koniambo. 2013 6,300 105,000 Onca Puma 2011 3,200 61,538 Barro Alto 2011 1,900 47,500 Ramu 2012 1,4
Slide 15: NPI payabilities typically range from ~90% to a small premium to LME Nickel
NPI payabilities typically range from ~90% to a small premium to LME Nickel ▪ ▪ 14
Slide 16: Indonesian tax concessions for HNI and RNI
NICKEI MINES LI 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% Corporate Income Tax Reduction for 7 years commencing from the year of commercial production. = Plus an additional 2 Years Corporate Incom
Slide 17: The Current State of Play
THE CURRENT STATE OF PLAY 16
Slide 18: HNI and RNI start-up and production ramp
1,375 (16.5kt pa) 1,250 (15kt pa design capacity) HNI start-up RNI start-up 31 January 31 May * Awaiting August costs 17
Slide 19: Hengjaya Nickel: An Outstanding First Months of Production
HENGJAYA NICKEL AN OUTSTANDING FIRST 6 MONTHS OF PRODUCTION NPI Production tonnes NPI Grade % Nickel Metal Production tonnes IMIP NPI Pricing USS/t Ni Cash costs) USS/t Ni NPI Production 8,684.8 11,320.5 11,251.1 31,256.4 NPI Grade % 14.8 13.4 14.0 14.0 Nickel Metal Production tonnes 1,289.4 1,518.1
Slide 20: Why Invest?
WHY INVEST? 19
Slide 21: Unique Growth Optionality
UNIQUE GROWTH OPTIONALITY AClear Line of Sight on Additional Nickel Units we o < 5 — > wi Ss x — 2 0 Initial Current — Based on an assumed production capacity of 16,500t pa of nickel metal. Future Option NICKEL MINES LIMITED NIC distinguishes itself from its peer group with its unique growth optiona
Slide 22: A Clear Line of Sight on Strong EBITDA and FCF Growth
NICKEL A Clear Line of Sight on Strong EBITDA and FCF Growth wines = HNI = RNI NIC’s stong financial profile is underpinned by: The value of the HNI and RNI options? At current spot prices NIC would be buying additional nickel units on an EBITDA multiple of ~2.1x Industry low levels of capital inten
Slide 23: $0.70 Year On
$0.70 1 Year On...... 60% interest in HNI and RNI $0.65 = Both projects in production within 12 months of breaking ground = HNI and RNI production run rate well in excess of nameplate capacity $0.60 = Material income tax concessions for HNI and RNI MOU to supply limonite ore to IMIP’s HPAL plant $0.
Slide 24: Investment Highlights
INVESTMENT HIGHLIGHTS WORLD CLASS NICKEL RESOURCE JORC compliant resource with significant extension potential. o 37.5M dmt at 1.81% nickel (1.5% COG) for ~680k tonnes contained nickel.’ © 180M dmt at 1.30% nickel (1.0% COG) for ~2.3M tonnes contained nickel? Ability to supply RKEF plant for 30+ yea
Slide 25: Investment Thesis
INVESTMENT NICKEL THESIS MINES LIMITED Indonesia is now the epicentre of global nickel supply growth. = If you want nickel exposure you need to be invested in this region. NPI is the now the most prevalent source of new nickel supply. = While NPI is currently predominantly consumed by the stainless
Slide 26: Peter Wei
“ Peter Wei le 73 Directoumicy Manca Pres
Slide 27: Indonesian nickel exports and LME price
Indonesian nickel exports in value Indonesian nickel exports in volume terms terms 8000 40000 800 7000 35000 700 LME price: $/tonne 6000 30000 600 $US million 5000 25000 '000t nickel 500 400 4000 20000 300 3000 15000 200 2000 10000 100 1000 5000 0 0 0 2011 2017 2007 2008 2009 2010 2012 2013 2014 201
Slide 28: Statement of Compliance
NICKEL STATEMENT OF MINES LIMITED COMPLIANCE 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 Australasi
Nickel Mines — Melbourne Mining Club Cutting Edge Series (September 2019) on 6ix