Nickel Asia Corp. · PSE:NIKL
Nickel Asia — Investor Presentation (August 2018)
31 slides from Nickel Asia's investor presentation, August 2018
Slide 1: Analysts Presentation August 2018
Nickel Asia Corporation Presentation on NAC PSE: NIKL Click RIC:toNIKL.PS edit Master subtitle style BBG: NIKL.PM Analysts Presentation August 2018 Rio Tuba wins Best Practices in Sustainable Mineral Rehabilitated Mined-Out Area, Rio Tuba Development, First ASEAN Mineral Awards, Nov 2017
Slide 2: NAC at a glance
NAC at a glance ► Listed in the PSE on November 22, 2010 ► Largest nickel mining company in the Philippines and long operating history of mining nickel laterite since 1977 ► 4 nickel operating mines and one recently acquired 5th mine for further exploration and development ► 4 nickel exploration pro
Slide 3: Growth-Diversification Strategy / NAC Corporate Structure
Growth-Diversification Strategy NAC Corporate Structure 3
Slide 4: Leading laterite ore producer with a strong reserve base
Leading laterite ore producer with a strong reserve base Total Mineral Resources and Ore Reserves 1,2 December 31, 2017 3 December 31, 2016 3 Ore Type kWMT %Ni %Fe kWMT %Ni %Fe %Inc Mineral Resources (Measured and Indicated) Saprolite 159,292 1.46 12.15 161,027 1.47 11.95 -1% Limonite Limonite 264,8
Slide 5: Overview of our Mines
Overview of our Mines Rio Tuba Mine Cagdianao Mine NAC (60%) Ownership NAC (100%) Ownership PAMCO (36%) Sojitz Corp (4%) Operations Commenced 1999 Operations Commenced 1975 Remaining mine life1 Approx. 17 years MPSA Renewal Year 2022 Remaining mine life1 Approx. 6 years 2016 Volume/Revenue 2.1 mWMT
Slide 6: Overview of our Exploration Projects
Overview of our Exploration Projects Our exploration programs are geared towards strategically expanding resources and confirming significant potential reserves to support growth in the long run Nickel exploration 1 2 3 4 Dinapigue Bulanjao Manicani Kepha Location Isabela Palawan Eastern Samar Surig
Slide 7: Our Investment in Downstream Processing Plants: Coral Bay
Our Investment in Downstream Processing Plants: Coral Bay Coral Bay Nickel Corporation (CBNC) Facility High Pressure Acid Leach (HPAL) processing plant Location In a Special Economic Zone adjacent to the Rio Tuba mine Ownership NAC (10%) Sumitomo (54%) Mitsui (18%) Sojitz (18%) Ore Supply Low-grade
Slide 8: Our Investment in Downstream Processing Plants: Taganito HPAL
Our Investment in Downstream Processing Plants: Taganito HPAL Taganito HPAL Nickel Corp. (THPAL) Facility HPAL processing plant Location In a Special Economic Zone adjacent to the Taganito mine NAC (10%) Ownership Sumitomo (75%) Mitsui (15%) Low-grade limonite ore from our Taganito mine; 4.59 M in O
Slide 9: Product portfolio breakdown
Product portfolio breakdown Saprolite Limonite Type of Ore: Hi Grade Mid Grade Mid Grade High Fe Low Grade ~1.8% Ni 1.3-1.6% Ni ≥1.2% Ni; 37-40% Fe 0.6-0.9% Ni; 48-50% Fe 1.0-1.2% Ni; ≥30% Fe Rio Tuba Rio Tuba Rio Tuba Taganito Taganito Rio Tuba Supplied By: Cagdianao Taganito Cagdianao Cagdianao Ta
Slide 10: Shipment seasonality by quarter
Shipment seasonality by quarter Average Shipment Volume (exclusive of HPAL deliveries) for the Last 7 Years Millions WMT 4.0 3.9 3.3 3.0 2.0 1.7 1.1 1.0 - 1Q 2Q 3Q 4Q % Volume 11% 33% 39% 17% 10
Slide 11: NAC sales tonnages
NAC sales tonnages (Thousand WMT) ► From 1977 to 2004, -5% 19,672 annual sales volume 20,000 19,254 averaged 880 thousand 17,873 17,703 WMT ► In 2005, CBNC 15,000 commenced commercial 13,998 28% operations 12,613 11,912 8,716 11,730 12,133 ► From 2005 to 2007, sales 10,388 volume grew at an 10,000 8
Slide 12: Low cost nickel producer
Low cost nickel producer ► Favorable geologic conditions at all of our four mines, with near-surface open-pit deposits ► Mining does not require explosives or complex waste handling ► Ability to sell limonite ore and lower grades of saprolite ore to the China NPI market and to Taganito and Coral Bay
Slide 13: Financial highlights
Financial highlights We are one of the most profitable nickel miners in the world. Revenue (Php MM) EBITDA1 (Php MM) Net Income2 (Php MM) Sale of ore 24,746 8,552 Services and others 15,842 15,432 15,739 14,123 12,695 11,607 11,110 -6% 6,862 7,005 6,507 3,538 8,336 7,821 7,376 5,706 5,080 4,986 2,77
Slide 14: NAC 1H-2018 Financial Results
NAC 1H-2018 Financial Results Nickel Ore Sales Volume (Million WMT) 1H Income Statement 8.89 8.92 Million PHP 2018 2017 Var. 4.00 4.24 Revenues 7,376 7,821 -6% Costs and Expenses (5,620) (4,983) -13% 4.89 4.68 Equity in THPAL 281 70 305% 2018 A 2017 A Ore Exports HPAL Deliveries Equity in CBNC 245 (
Slide 15: Historical Dividend Payout and Payable (since 2010 IPO)
Historical Dividend Payout and Payable (since 2010 IPO) Payment / Dividend Year Type %of PY Earnings Issue Date Rate 1 Regular Cash May 9, 2011 ₱ 0.06/sh. 30.3% 2011 Special Cash December 8, 2011 ₱ 0.03/sh. 13.0% Regular Cash May 11, 2012 ₱ 0.14/sh. 30.5% 2012 Stock September 24, 2012 50% N/A Regula
Slide 16: Update on Nickel Ore Price and Supply
Nickel Asia Corporation Update on Nickel Ore Price and Supply
Slide 17: Ni Ore Price
Ni Ore Price MG nickel ore price US$/WMT LME Ni Price MG nickel ore price remained at 35 33 7.50 7.00 around $20/WMT despite the decline 31 6.50 in LME Ni price. This was mainly due to 29 6.00 27 5.50 1) decline in Indonesian shipments in 25 23 5.00 June due to Ramadan and 2) stocking 4.50 21 19 4.0
Slide 18: Update on Philippine Ni ore exports to China
Update on Philippine Ni ore exports to China X 1,000wmt H1 2018 (Actual) H1 2017 Difference HG MG LG Total HG MG LG Total HG MG LG Total NAC 0 3,518 773 4,290 0 3,427 498 3,925 0 90 275 365 SURIGAO 0 2,332 3,677 6,009 0 3,808 4,596 8,404 0 -1,476 -919 -2,395 Dinagat 0 111 55 166 0 437 427 865 0 -327
Slide 19: Update on Indonesian Ni ore exports
Update on Indonesian Ni ore exports Indonesian mines exported 5.0 million wmt to China in 2017. Indonesian government approved 32 million wmt of export quota as of today. Out of the 32 million wmt export quota, 8.8 million wmt have been exported to China as of 1H 2018. Low export volumes are due to
Slide 20: Update on Philippine Mining Regulations, and Locations of Philippine Nickel Mines
Nickel Asia Corporation Update on: Philippine Mining Regulations, and Locations of Philippine Nickel Mines
Slide 21: Update on Philippine Mining Regulations
Update on Philippine Mining Regulations Moratorium on new Mining Permits (EO 79 - 2012) still in place, with lifting subject to new mining tax legislation. Excise tax on mineral products increased from 2% to 4% of gross revenues, effective Jan. 2018. The moratorium remains in place. Mine audits cond
Slide 22: Locations of Nickel Mines
Locations of Nickel Mines Dinagat Area Zambales Area 1. Wellex Mining Corp. 1. Benguet Nickel Mines Inc. 2. Sinosteel Phil. H. Y. Mining Corp. 2. LNL Archipelago Minerals Corp. 3. Oriental Vision Mining Phil. Corp. 3. Eramen Minerals Inc. 4. Oriental Synergy Mining Corp. 4. Zambales Diversified Meta
Slide 23: Emerging Power, Inc. (EPI)
Nickel Asia Corporation Emerging Power, Inc. (EPI)
Slide 24: Update on Emerging Power, Inc. (EPI)
Update on Emerging Power, Inc. (EPI) • Diversification effort to renewable energy with main focus on geothermal source. • NAC percentage equity to increase from 70.9% to 91.0% by partial conversion of loans to equity. • Total investment amount upon conversion: o Equity: P4.58B o Loan: P450M 24
Slide 25: EPI Corporate Structure
EPI Corporate Structure Emerging Power, Inc. 100% 100% 100% Jobin-SQM, Inc. Mindoro Geothermal Biliran Power Corporation Holdings, Inc. 60% • 25+25-year geothermal service Biliran • Two 25+25-year service contract with ERC-approved contracts: solar 100MW and wind 50MW PSA for 40MW at tariff of Geoth
Slide 26: END
Nickel Asia Corporation END
Slide 27: APPENDIX
Nickel Asia Corporation APPENDIX
Slide 28: Nickel Ore Sales Volume and Revenue
Nickel Ore Sales Volume and Revenue Nickel Sales Volume (Thousand WMT) Nickel Sales Revenue (Million PHP) 21,000 16,000 19,672 19,254 14,381 14,434 HMC HMC 17,703 14,000 16% HMC 13,234 HMC 17,500 16% HMC 16% 16% 14% 12,000 HMC CMC 11% CMC 11% 17% CMC 11% CMC CMC 14,000 17% 15% 10,000 % CMC 16% TMC 1
Slide 29: Shipments and Revenues per Product Type
Shipments and Revenues per Product Type Nickel Shipment Volume (million WMT) 10.0 2015 2016 2017 Millions 8.5 8.1 7.8 7.6 8.0 6.2 6.6 6.0 4.8 4.3 4.0 2.0 0.8 0.8 0.5 0.7 - Sapro (HG) Sapro (MG) Limo (MG/HiFe) Limo (HPAL) Nickel Revenue (billion PHP) 2015 2016 2017 12.0 Billions 10.4 10.0 8.0 6.9 7.4
Slide 30: FY 2017 Philippine Ni Ore Exports to China
FY 2017 Philippine Ni Ore Exports to China 2017 JAN - DEC 2016 JAN - DEC Difference High Mid Low Total High Mid Low Total High Mid Low Total NAC 165 7,566 605 8,336 91 5,961 4,122 10,174 74 1,605 (3,517) (1,838) SURIGAO - 9,839 12,925 22,764 55 10,235 11,693 21,983 (55) (396) 1,232 781 Dinagat - 1,2
Slide 31: NAC FY2017 Financial Results
NAC FY2017 Financial Results Nickel Ore Sales Volume (Million WMT) FY Income Statements 19.25 Million PHP 2017 2016 +/- 17.70 Revenues 15,739 14,123 11% Costs and Expenses (10,332) (10,050) -3% Equity in THPAL 96 (310) 131% 2017 2016 Equity in CBNC 102 (103) 199% Finance/Other Income (Charges) - net