Nordic Mining Asa · OSL:NOM
Nordic Mining Asa — Investor Presentation (October 2018)
39 slides from Nordic Mining Asa's investor presentation, October 2018
Slide 1: Minerals for a sustainable future
Minerals for a sustainable future OAX: NOM Investor presentation October 2018
Slide 2: Disclaimer
Disclaimer IMPORTANT NOTICE The presentation (the "Presentation") has been prepared by Nordic Mining ASA ("Nordic Mining" or the "Company") with the assistance of Clarksons Platou Securities AS and Carnegie AS (jointly the "Financial Advisors") , solely for use at presentation to potential investors
Slide 3: Risk factors
Risk factors Key risks specific to Nordic Mining or its industry Key risks specific to the securities • Development of the Group’s assets will depend upon the Group's ability to • The price of the Shares could fluctuate significantly obtain financing • Future sales, or the possibility for future sal
Slide 4: Table of contents
Table of contents 1 Introduction 2 Engebø – rutile and garnet 3 Keliber – lithium 4 Summary 5 Appendix 4
Slide 5: Developing high-end minerals in the Nordic region
Introduction Developing high-end minerals in the Nordic region Reinfjord - Platinum and palladium Exploration stage Seabed minerals Prospect for the future Engebø - Rutile and garnet Sweden Finland DFS ongoing Norway • Incorporated in Norway • Listed on Oslo Axess (OAX: NOM) • Market capitalization
Slide 6: Transforming strategic deposits to long-term shareholder value
Introduction Transforming strategic deposits to long-term shareholder value • Titanium, lithium and quartz are key minerals for sustainable social and industrial development Minerals for a sustainable future • Ideally located to serve European markets; reducing environmental footprint • 100% owned •
Slide 7: Good progress and positive developments continued in 2018
Introduction Good progress and positive developments continued in 2018 1 Markets improving 2 Engebø evolving Improving markets for rutile and garnet 3 Keliber values Rutile Increased resource base and increasing • TZMI’s long-term price forecast significantly de-risked project increased to 1,092 USD
Slide 8: Funding requirement to complete DFS milestone
Introduction Funding requirement to complete DFS milestone DFS Capital requirement to complete DFS • The main purpose of the DFS is to qualify the NOKm project for construction financing 95 90 • The comprehensive work program related to the Engebø definitive feasibility study (DFS) is 85 progressing
Slide 9: Management team and Board of Directors
Introduction Management team and Board of Directors Management team Board of Directors Tarmo Tuominen, Chairman Ivar S. Fossum, CEO • Deputy CEO in Nordkalk and Chairman of the Geological Survey of • 12 years with Nordic Mining (since founding) Finland (GTK) • 20 years experience from management pos
Slide 10: Key corporate milestones
Introduction Key corporate milestones Progression Mid 2019 Q1 2020 Q1 2022 Engebø Engebø Engebø targeted targeted DFS targeted start start of production completion of construction 2015 – H1 2018 H2 2018 – Q1 2022 H1 2020 Keliber targeted start of production Source: Keliber (2018) 10
Slide 11: Table of contents
Table of contents 1 Introduction 2 Engebø – rutile and garnet 3 Keliber – lithium 4 Summary 5 Appendix 11
Slide 12: Unique combination of high grade rutile and garnet
Engebø Unique combination of high grade rutile and garnet Large outcropping deposit next to tidal waters High rutile grade gives processing advantages • Hard-rock deposit with high quality rutile and garnet located in Indicative rutile grades (TiO2) for current producers and planned projects2 wester
Slide 13: 1st quartile revenue-to-cash cost position for rutile
Engebø 1st quartile revenue-to-cash cost position for rutile Industry revenue-to-cash cost1 curve (2021) • TZMI uses the revenue-to-cash cost (R/C)-ratio as its primary measure of competitiveness for individual projects in the industry • ~80% of global TiO2 feedstock producers are included in TZMI’s
Slide 14: Rutile and Garnet – minerals with unique properties
Engebø Rutile and Garnet – minerals with unique properties Rutile Garnet Current world production: Current world production: ~0.8 million tonnes ~1.4 million tonnes PIGMENT TITANIUM WELDING RODS WATERJET CUTTING SAND BLASTING ABRASIVES Tests have demonstrated that Engebø can produce 95% TiO2 rutile
Slide 15: Rutile prices forecasted to increase with growing demand
Engebø Rutile prices forecasted to increase with growing demand Global rutile demand has outpaced supply… …driving rutile prices up Likely new projects Other Kenya South Africa U$/tonne FOB Nordic Mining CIS Sierra Leone Australia 2,000 ‘000 TiO2 units Underlying demand 1,000 High 800 Long-term pric
Slide 16: First European producer of garnet
Engebø First European producer of garnet Garnet market and price assumption Current world production • Emerging mineral with strong growth in the waterjet cutting markets Estimated garnet price in Engebø PFS • Currently no European production Product / Case Low price High price China 100 mesh waterj
Slide 17: Cooperation with the Barton Group for Garnet
Engebø Cooperation with the Barton Group for Garnet Heads of Agreement with the Barton Group The Barton Group in brief Agreements being firmed up based on the following main principles: A leading US garnet producer and distributor • A leading US garnet producer and distributor with a strong foothold
Slide 18: Favourable internal logistics
Engebø Favourable internal logistics All at one site; mining, processing and shipping Open pit Processing • Rich ore in the early years with low stripping ratios mining plant • Glory hole concept gives minimum haulage distance and reduces ore transportation costs • Underground crushing and silo faci
Slide 19: Logistical and freight cost advantages
Engebø Logistical and freight cost advantages Engebø mine Process plant and port Markets ~1000 km from process plant to pigment ~0.5 km from mine to port factories1 Short distance between mine and plant Process plant with integrated port Close proximity to European markets Open pit Glory hole and co
Slide 20: Zoning plan and environmental permit fully granted
Engebø Zoning plan and environmental permit fully granted • The zoning plan and discharge permit for the Engebø project are approved and final without possibility for appeals • Deep-sea disposal offers safe and sustainable tailings solution • The tailings will mainly sediment within the regulated ar
Slide 21: Flowsheet of rutile and garnet process
Engebø Flowsheet of rutile and garnet process Source: Engebø PFS 21
Slide 22: Project capex reflecting limited infrastructure requirements
Engebø Project capex reflecting limited infrastructure requirements USDm 207 34 42 36 69 27 Open pit mining Mineral processing Infrastructure, Indirects (excl. contingency)1 Contingency (~20%) Capital requirement and comminution and tailings handling storage and loadout Note that an estimated NOK 40
Slide 23: Solid business case
Engebø Solid business case Assumptions Value Unit Output Value Unit Garnet price 250 USD/tonne Pre-tax NPV @ 8% 332 USDm Rutile price 1 070 USD/tonne Pre-tax IRR 23.8% % Garnet sales (from ~2027) 261 000 Tonnes per annum Life of mine 29 years Rutile sales (average) 32 500 Tonnes per annum Payback pe
Slide 24: Attractive long term cash flow
Engebø Attractive long term cash flow <5 year payback period, IRR >20% USDm 200 150 100 50 0 -50 -100 Garnet revenue Rutile revenue Capex Maintenance capex (SIB) Opex, incl. change WC and royalty Tax -150 Post-tax cash flow Acc. post-tax cash flow <5 year payback -200 Source: Engebø PFS, extended by
Slide 25: Base case with upside opportunity and flexibility
Engebø Base case with upside opportunity and flexibility NPV (pre-tax) upside potential to the PFS base case USDm USD 51m upside potential A +54% • Garnet sales in line with production during the initial ten 512 years 47 13 USD 69m upside potential B 69 • Extension of mine life to 40 years by includ
Slide 26: Timeline
Engebø Timeline 2016 2017 2018 2019 2020 2021 2022 Timeline to production Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Resource classification #1 Resource classification #2 Prefeasibility study Definitive feasibility study Offtake agreements Construction financ
Slide 27: Table of contents
Table of contents 1 Introduction 2 Engebø – rutile and garnet 3 Keliber – lithium 4 Summary 5 Appendix 27
Slide 28: Substantial value-add from PFS to DFS
Keliber Substantial value-add from PFS to DFS Solid project economics • Aiming to be the first European company to produce high-purity lithium carbonate from its own ore • Six deposits in one of the most significant lithium bearing areas in Europe • Expected to produce ~11,000 tonnes of lithium carb
Slide 29: Lithium demand driven by increased EV penetration
Keliber Lithium demand driven by increased EV penetration Introduction to the lithium market Lithium battery supply chain • Lithium is extracted predominantly from either hard rock mining (as is the Lithium hard rock / concentrate Brine operations case for Keliber) or from brine deposits • Substanti
Slide 30: Table of contents
Table of contents 1 Introduction 2 Engebø – rutile and garnet 3 Keliber – lithium 4 Summary 5 Appendix 30
Slide 31: Transforming strategic deposits to long-term shareholder value
Summary Transforming strategic deposits to long-term shareholder value Strategic industrial minerals with solid market fundamentals Engebø progressing towards DFS: World class rutile deposit First European garnet producer Rejuvenating the mining industry in Norway: Permits secured, jobs in the makin
Slide 32: Table of contents
Table of contents 1 Introduction 2 Engebø – rutile and garnet 3 Keliber – lithium 4 Summary 5 Appendix 32
Slide 33: Extensive testwork with industrial scale equipment
Appendix Extensive testwork with industrial scale equipment PFS process testwork completed successfully Complete process plant layout established • Commercial products from rutile and garnet demonstrated by comprehensive • Flowsheet for rutile and garnet process based on substantial testing testwork
Slide 34: Shareholder information
Appendix Shareholder information Shareholder overview (as of 8 October 2018) Key shareholder information # Shareholder Country # of shares % of total Current # of shares outstanding: 113 450 468 1 Nordnet Bank AB (nominee) Sweden 10,713,691 9.4% Share price (as of 8 Oct 2018): NOK 2.94 2 Nordea Bank
Slide 35: Corporate structure
Appendix Corporate structure Nordic Mining ASA Parent company 100% 100% 100% Nordic Rutile AS Nordic Quartz AS Nordic Ocean Resources AS Consolidated subsidiaries Engebø rutile and garnet Kvinnherad high-purity quartz Seabed minerals 22% Keliber Oy Associated company Lithium in Finland 35
Slide 36: Historical financials
Appendix Historical financials Income Statement (NOKm) YTD 2018 FY 2017 Cash Flow Statement (NOKm) YTD 2018 FY 2017 Payroll and related costs -4.6 -10.9 Net cash used in operating activities -25.3 -39.0 D&A -0.1 -0.2 Acquisition of licenses -1.1 -0.3 Other operating expenses -21.1 -25.2 Investment i
Slide 37: Balance sheet with no interest bearing debt
Appendix Balance sheet with no interest bearing debt Balance Sheet (NOKm) Q2 2018 Comments Evaluation and exploration assets 1 25.0 1 Evaluation and exploration assets • NOK 17.3m in capitalised drilling costs PP&E 0.1 • NOK 6.5m in capitalised license/property costs Investment in associate 2 24.5 T
Slide 38: Large markets for Nordic Mining to capture
Appendix Large markets for Nordic Mining to capture Operates in a highly stable political environment Ideal shore-location to supply world market Rutile Excellently positioned as only European supplier of garnet High-grade rutile deposit, industry low cost operations Global market: Battery grade lit
Slide 39: Overview of mineral assets
Appendix Overview of mineral assets1 DFS in progress Financing stage Scoping stage Engebø – rutile and garnet Keliber – lithium (22% ownership) Kvinnherad – quartz • One of the world’s largest rutile and garnet • Keliber Oy is a Finnish mining company with an • Quartz deposit that can be processed t