Nickel Asia Corp. · PSE:NIKL
Nickel Asia — Investor Presentation (November 2023)
53 slides from Nickel Asia's investor presentation, November 2023
Slide 1: Investor Presentation
N I C K E L A S I A C O R P. INVESTOR PRESENTATION
Slide 2: Disclaimer
DISCLAIMER This presentation and the information contained herein as well as the materials distributed herewith ("Presentation") are the sole and exclusive property of Nickel Asia Corporation ("NAC") and shall only be used for the purpose intended herein. This Presentation is not intended to provide
Slide 3: NAC Overview
NAC OVERVIEW ey. RoR 7. r/ [ips ¥ 7 A ee
Slide 4: Our Investment Story
OUR INVESTMENT STORY We are well-positioned to achieve our twin goals of being included in the PSE Index’s Top 25 companies in terms of market capitalization and becoming a Premier ESG investment by 2025: Leading, growing, profitable, and rewarding mining business underpinned by structurally support
Slide 5: NIKL at a Glance
NIKL AT A GLANCE The largest nickel ore producer in the Philippines, accounting for 39% of Philippine and 5% of global production in 2022 and a forerunner in the Philippine RE industry with 1GW aspiration by 2028. COMPANY FACTS PERFORMANCE* OUR PARTNERS 7 P28B P79.6B Mines Revenue Market Capitalizat
Slide 6: Leading and Stable Mining Business
LEADING AND STABLE MINING BUSINESS Largest Philippine Nickel Ore Producer Established Nickel Ore Supplier Philippines nickel mine production Nickel Asia ore output (mWMT) by major operator (kt Ni) 400 17.7 19.4 18.8 17.9 18.2 2.2 2.0 15.9 144 2.5 1.7 1.8 300 66 61 2.6 2.8 3.0 132 120 102 97 1.9 3.0
Slide 7: The Nickel Class Divide
THE NICKEL CLASS DIVIDE 1 CLASS 2 surplus persists. 2 CLASS 1 market is growing, but there are supply chain risks. 3 Nickel deficit is inevitable which implies Ni price upside.
Slide 8: 1. Class 2 Surplus Persists
1. CLASS 2 SURPLUS PERSISTS Stainless steel surplus is due to Indonesia’s increased NPI production. SS will see steady growth and surplus will persist Indonesia NPI production growth accelerates Stainless Steel (SS) 2020-27, kt Ni SS Production breakdown 2020-27, kt Ni 3,000 200 3,000 2,500 150 2,50
Slide 9: 2. Class 1 Nickel Market Is Growing: EV Mass Adoption
2. CLASS 1 NICKEL MARKET IS GROWING: EV MASS ADOPTION IS HAPPENING Global NEV sales penetration in ‘000’s units EV mass adoption and EV share as % of total vehicles Research indicates NEV 120,000 35.0% sales to reach 33 million 100,000 30.0% units in 2027 for 31% of 25.0% total global vehicle 80,000
Slide 10: Class 1 Nickel Market: Nickel Demand for Batteries Will Double
2. CLASS 1 NICKEL MARKET IS GROWING: NICKEL DEMAND FOR BATTERIES WILL DOUBLE By 2027, nickel-containing EV batteries will By 2027, battery market will account for 29% of account for 71% of total EV batteries. global nickel demand. Global EV battery chemistry market share, 2016-2027 (% of MWh) Primar
Slide 11: Class 1 Nickel Market: Demand and Supply Almost Double
2. CLASS 1 NICKEL MARKET IS GROWING: NICKEL DEMAND FOR BATTERIES WILL DOUBLE Class 1 demand and supply projected to almost double due to EV adoption and Indo HPAL projects. Class 1 surplus can provide relief to NiSO4 tightness, caused by battery materials demand. Class 1 nickel demand by end-use, 20
Slide 12: Class 1 Nickel Market: Supply Chain Risks
2. CLASS 1 NICKEL MARKET IS GROWING: BUT THERE ARE SUPPLY CHAIN RISKS Nickel ore supply is limited Indonesian average mine life is limited Indonesian mine production boost continues due to relative to mine production forecasts investments in downstream processing Mine Production Unit 2023 2024 2025
Slide 13: Nickel Sees a Dynamic Regulatory Environment
2. CLASS 1 NICKEL MARKET IS GROWING: BUT THERE ARE SUPPLY CHAIN RISKS Nickel sees a dynamic regulatory environment Source: BBC News, Reuters
Slide 14: Timeline of HPAL Project Execution
2. CLASS 1 NICKEL MARKET IS GROWING: BUT THERE ARE SUPPLY CHAIN RISKS Timeline of HPAL Project Execution MHP supply by operation, 2017-2027, kt Ni HPAL pipeline is large, but will these projects finish 800 Ramu on time and on budget, or MHP supply is expected to grow, as MHP is cheaper and Gordess N
Slide 15: Nickel Deficit Is Inevitable Beyond 2027
3. NICKEL DEFICIT IS INEVITABLE BEYOND 2027 IMPLIED UPSIDE TO NICKEL PRICES Nickel Demand Supply forecast 2020 – 2032, in kt Ni For 2023-2027, we assume 1. Mass adoption of NEVs and an optimistic launch of all 7,000 announced HPAL 400 increase in nickel demand will projects, with no delays. 6,000 20
Slide 16: Regulatory Updates
REGULATORY UPDATES House Bill No. 8937 was approved on second reading last Sept. 18. “Philippine Mining Fiscal Regime Act” Legislative features Existing Comments or House Bill No. NAC mines benefit. 1. Royalty Rate for operations within NAC’s three mine sites, TMC, HMC, and mineral reservations of t
Slide 17: Development Pipeline
DEVELOPMENT “<= PIPELINE
Slide 18: Mining Development Pipeline
MINING DEVELOPMENT PIPELINE BULANJAO MANICANI Resources as of 12/31/2022 70M WMT @1.61% Ni 47M WMT @1.55% Ni Percent of MPSA Area Drilled 22% of 3,553 hectares 38% of 1,165 hectares Target Annual Production 4M+ WMT 2M+ WMT 35% Saprolite 50% Saprolite Target Annual Product Mix 65% Limonite 50% Limoni
Slide 19: Pujada Project Disclosure – Feb 2023
PUJADA PROJECT DISCLOSURE – 17 FEB 2023 NAC or its wholly-owned subsidiary is the exclusive mining service contractor for Hallmark Mining Corporation and Austral-Asia Link Mining Corp.’s Mineral Production Sharing Agreement (MPSA) ▪ Conduct feasibility study to establish HPAL or equivalent mineral p
Slide 20: Financial Highlights
FINANCIAL HIGHLIGHTS
Slide 21: NIKL and EPI 9M-23 Highlights
NIKL AND EPI 9M-23 HIGHLIGHTS NICKEL MINING RENEWABLE ENERGY (EMERGING POWER INC.) ▪ Revenues from sale of ore decreased by 15% YoY to P16.8 ▪ Jobin-SQM Inc. (JSI) now operating a total capacity of 100-MW billion due to lower nickel ore prices which weighed down the from 62 MW YoY; generation for th
Slide 22: Financial Highlights (9M-23 vs 9M-22)
FINANCIAL HIGHLIGHTS (9M-23 VS 9M-22) Revenue (PHP bn) EBITDA (PHP bn) Net Income (PHP bn) Sale of ore Services and thers 14.4 14.3 7.8 7.9 12.3 6.9 27.4 28 9.5 21.8 21.5 8.5 17.9 19.3 4.1 6.5 3.6 2.7 2019 2020 2021 2022 9M-23 9M-22 2019 2020 2021 2022 9M-23 9M-22 2019 2020 2021 2022 9M-23 9M-22 201
Slide 23: Special Cash Dividend Declaration
SPECIAL CASH DIVIDEND DECLARATION Total Dividend in % of 2022 Per Share Billion Php Net Income Cash Dividend Paid in April Regular Dividend ₱0.17 ₱2.379 30.0% 2023 Proposed Special Cash Dividend for ₱0.07 ₱1.000 12.6% November 9, 2023 Total Cash Dividend for 2023 ₱0.24 ₱3.379 42.6% Declaration Date:
Slide 24: Shipments and Revenues by Ore Type
SHIPMENTS AND REVENUES BY ORE TYPE Nine-Month Period Comparison Sales Volume Average Ore Sale Prices Revenue (in PHPbn) (in millions WMT) (in US$/WMT) 19.9 -15% YoY 16.8 change -26% YoY 29.2 5.7 Flat YoY change 5.72 Limo HPAL Ore Exports 5.76 5.0 -13% YoY 38.9 change 14.2 +10% YoY -17% YoY 15.7 11.9
Slide 25: Revenue – Variance Analysis
REVENUE – VARIANCE ANALYSIS Nine-Month Period Comparison Sales Volume (in millions WMT) 9M-23 +5% YoY change 13.01 9M-22 12.43 Sales Price (in millions WMT) 9M-23 -22% YoY change 23.24 9M-22 29.86 FX Rate (PHP/USD) 9M-23 +2.6% YoY change 55.64 9M-22 54.24
Slide 26: Cost & Expenses – Variance Analysis
COST & EXPENSES – VARIANCE ANALYSIS Nine-Month Period Comparison Sales Volume (in millions WMT) 9M-23 +5% YoY change 13.01 9M-22 12.43 Fuel Prices (P/Liter) 1Q'23 +3% YoY change 52.5 1Q'22 50.9
Slide 27: Net Income – Variance Analysis
NET INCOME – VARIANCE ANALYSIS Nine-Month Period Comparison Net Income (in Peso billions) ▪ Reported attributable net income at P3.6 billion, down 47% YoY due to lower ore prices in this year’s 2Q to 3Q, impacting our ore revenues. ▪ HPAL operations registered loss of P380 million -47% YoY change in
Slide 28: Investment in HPAL Equity Earnings
INVESTMENT IN HPAL EQUITY EARNINGS Equity Earnings, in PHP Millions ▪ The reduced Nickel and Cobalt prices had 1,200 (9M-23 VS 9M-22 comparison) impacted Equity earnings from investments in 1,000 the HPAL operations. 1,024 800 600 400 767 200 257 61 - (200) (442) (400) -381 (600) 9M-22 9M-23 THPAL C
Slide 29: Renewable Energy
RENEWABLE ENERGY
Slide 30: Philippine Shift to Renewable Energy
PHILIPPINE SHIFT TO RENEWABLE ENERGY ▪ Key drivers of electricity consumption: Capacity and peak demand in PH (GW) Macroeconomic recovery post- 100 New Wind New Solar pandemic and strong population PH GOV’T New Biomass New Hydro growth TARGETS FOR RE New Geothermal New Gas New Coal Committed Capacit
Slide 31: Investment into Renewable Energy
INVESTMENT INTO RENEWABLE ENERGY (1) Jobin SQM, Inc. (JSI) ▪ 52% EPI, 38% NAC ▪ Subic Bay Freeport Zone ▪ 50-year (+25) lease for 800 hectares SOLAR ▪ 25-year Service Contracts ▪ 230kv line can accommodate 200 MW+ POWER ▪ 172MWbyDec2023;200MWby2025 ▪ Of existing 100 MW, 68 MW was built below budget
Slide 32: Partnership with Shell a Significant Milestone
PARTNERSHIP WITH SHELL A SIGNIFICANT MILESTONE The Joint Venture Corporate Structure ▪ On July 1, 2022, EPI and Shell signed a Joint Venture (JV) partnership to jointly develop, own, operate, and maintain onshore renewables projects in the Philippines ▪ Exclusive platform for utility scale grid-conn
Slide 33: EPI's Solar Projects Under or to Start Construction in 2023
EPI’S SOLAR PROJECTS UNDER OR TO START CONSTRUCTION IN 2023 JSI Subic Cawag Leyte Project Operating Capacity 100 MW Capacity Under Construction 72 MW 145 MW 240 MW or For Construction The incremental Attribute capacity under construction to 72 MW 145 MW 144 MW EPI (in MW) Ongoing, Target Completed i
Slide 34: EPI's Geothermal Pipeline
EPI’S GEOTHERMAL PIPELINE BILIRAN (BGI) MINDORO (MGCP) Initially 50 MW (out P50 of 200 Capacity 20 MW (P90 of 20 MW) MW+) Attributable MW to EPI 22MW 20 MW 100% Complete with turbines Ongoing Proof of Concept Pilot installed, awaiting ERC permits Target Completion: Project and target to 2Q 2024 ener
Slide 35: EPI's Projected Capacity Buildup
EPI’S PROJECTED CAPACITY BUILDUP OF SOLAR, WIND, AND GEOTHERMAL GENERATION ASSETS (Gross Capacity, MW) ▪ Load profile being developed to 2,500 serve solar peak and night peak hours. 2,000 ▪ PSAs to be against portfolio 289 261 218 (not single plant). 84 321 288 1,500 894 355 ▪ Does not yet include
Slide 36: JSI Financial Highlights (9M'2022 to 9M'2023)
JSI FINANCIAL HIGHLIGHTS (9M’2022 to 9M’2023) Generation (in MWh) Revenues (in PHP millions) EBITDA (in PHP millions) 106,032 528.89 442.40 77,981 393.67 331.09 9M-22 9M-23 9M-22 9M-23 9M-22 9M-23 9M-22 9M-23 9M-22 9M-23 9M-22 9M-23 9M’22 9M’23 YoY% Change Generation (in MWh) 77,981 106,032 36% Pres
Slide 37: Sustainability
SUSTAINABILITY
Slide 38: Awards and Recognition
FINANCEASIA ASIA’S BEST COMPANIES ASIAMONEY PHILIPPINE STOCK EXCHANGE NAC received a Gold citation and was NAC has been recognized as the Nickel Asia Corporation (PSE:NIKL) one of only four companies in the Basic MOST OUTSTANDING Company in joins Philippine Stock Exchange Materials Company sector re
Slide 39: ESG Score Improved to 34.8 from 43.7
ESG SCORE IMPROVED TO 34.8 FROM 43.7 Nickel Asia Corp. Rating Report Material ESG Issues Score and Risk Category ESG Risk Exposure ESG Risk Management ESG Risk Rating Contribution to Issue Name Score | Category Score | Category Score | Category ESG Risk Rating 34.8 High Risk Community Relations 8.1
Slide 40: Our Sustainability Performance
OUR SUSTAINABILITY PERFORMANCE ESG is at the forefront of our priority to address material risks with our medium- to long-term targets. NAC ESG Roadmap and UN SDGs Contribution Digital ESG Reporting and Automated Data Workflows NAC is transitioning to digital tools to optimize data collection, verif
Slide 41: Sustainability Stakeholders' Engagement Program
SUSTAINABILITY STAKEHOLDERS’ ENGAGEMENT PROGRAM NAC’S FIRST EVER SUSTAINABILTY RUN FOR MANGROVE RESTORATION NAC held its first-ever Sustainability Fun Run on July 23 to support mangrove restoration in Hagonoy, Bulacan. The run took place simultaneously at three locations across the country (Manila,
Slide 42: Presentation End
PRESENTATION END
Slide 43: Executive Team
EXECUTIVE TEAM MARTIN ANTONIO ZAMORA MARIA ANGELA VILLAMOR President & CEO SVP for Finance & CFO ▪ Philippine Country Manager ▪ Senior Director, SGV & Co. and Director, UPC ▪ Senior Manager, KPMG UAE Renewables ▪ Management Development ▪ CLSA Program, Asian Institute of ▪ Robert Fleming & Co. Manage
Slide 44: IR Team
IR TEAM MARTIN ANTONIO ZAMORA RONALD IBASCO President & CEO President & CEO, EPI ▪ Philippine Country Manager ▪ Independent Board Director, and Director, UPC Vingroup Renewables ▪ Managing Director, Barclays ▪ CLSA Capital SEA ▪ Robert Fleming & Co. ▪ HK propriety trading lead, ▪ MBA, London Busines
Slide 45: Appendix
APPENDIX
Slide 46: Mining Assets
MINING ASSETS EP – 004 (Manmanok) EXPA – 0014 (Kutop) EXPA – 116 (Cervantes) AFTA – 008 - CAR EXPA – 116 (Mankayan) Dinapigue EP-001-2016-III (Newminco) LEGEND Manila Operating Mines Exploration Projects - Nickel Exploration Projects - Gold Development Projects - Nickel Major Cities Puerto Princessa
Slide 47: Nickel Ore Products
NICKEL ORE PRODUCTS COUNTRY/ FINAL ORE TYPE CONTENT USED IN TECHNOLOGY PRODUCT Japan: Fe Ni Ni: 1.25-1.5% FeNi or NPI 300-Series Saprolite Fe: <20% China: (10% Ni) Stainless Steel NPI (RKEF) Limonite for Ni: 0.8-0.9% China: Low Grade NPI 200-Series High Fe NPI (BF) Export Fe: 48-50% (1-2% Ni) Stainl
Slide 48: Reserves and Mine Life
RESERVES AND MINE LIFE Nickel Asia has the largest nickel reserves and its mines have the longest remaining mine life in the Industry Shipments by Mine (mWMT) Ore Reserves by Mine (mWMT) Mine Life Proved and Probable (as of Dec. 31, 2022) Years from December 31, 2021 8.5 8.3 23 120.3 7.9 Average Min
Slide 49: Battery Materials Supply for NiSO4 and MHP Is Tight
BATTERY MATERIALS SUPPLY FOR NICKEL SULPHITE (NiS04) AND MHP IS TIGHT NiSO4 tightness will improve but will remain MHP supply foreseen to be tight despite tight up until 2026 major HPAL project pipeline NiSO4 2020-2027, kt Ni MHP Balance 2020-2027, kt Ni 1,600 100 800 - 1,400 50 700 (2) 1,200 600 (4
Slide 50: Investment in HPAL Projects
INVESTMENT IN HPAL PROJECTS Coral Bay Taganito HPAL ▪ Most successful implementation of HPAL technology in the world. Palawan, adjacent Surigao Del Norte, ▪ End products are refined in Location to Rio Tuba mine adjacent to Taganito mine Japan by Sumitomo Metal Mining Equity Ownership 15.625% 10% and
Slide 51: Emerging Power Inc. Solar Plant Tour
EMERGING POWER INC. SOLAR PLANT TOUR Eight of the largest Domestic Institutional Investors visited our Sta. Rita Power plant last Feb. 3, 2023. JSl's Sta. Rita Solar Power Plant has an installed capacity of 100 megawatts (MW), with another 72 MW in construction. Investors and fund managers from diff
Slide 52: Emerging Power Inc. Solar Plant Tour: Flywheel Energy Storage
EMERGING POWER INC. SOLAR PLANT TOUR Technical Inspection of the Flywheel Energy Storage System (FESS) by the ERC Installed Capacity EPI is piloting two flywheel energy storage units 16 kW /64 kWh to store and generate power after sunset. This is 2 units of M32 FESS the first time a flywheel battery
Slide 53: Investment Parameters
INVESTMENT PARAMETERS In selecting sites, we follow these criteria: ▪ lrradiance, wind, or geothermal resources assessment are better than average ▪ Possessory rights are clear and robust ▪ Viable and cost-effective connection solution to the grid ▪ ESG best practices can be implemented Availability