Slide 1: Molo Graphite Project, Madagascar
Molo Graphite Project MADAGASCAR The only project with graphite. OTCQB : NSRC
Slide 2: Forward looking statements
Forward looking statements Safe Harbour: This presenta3on contains statements that may cons3tute “forward looking statements” within the meaning of applicable Canadian and United States securi3es legisla3on. Readers are cau3oned not to place undue reliance on such forward looking statements. Any sta
Slide 3: It's Essential. It's Complicated. It's a Huge Opportunity.
IT’S ESSENTIAL. IT’S COMPLICATED. IT’S A HUGE OPPORTUNITY. 3
Slide 4: Flake graphite market = ~600,000 tpa
Flake graphite market = ~600,000 tpa REFRACTORIES BATTERIES GRAPHITE FOILS #1 #2 #3 65% 16% 10% Majority of demand sAll Aed Experiencing largest growth Experiencing fastest growth The image cannot be displayed. Your computer to tradiAonal steel market may not have enough Forecasted to be #1 by 2025
Slide 5: Graphite prices strong
Graphite prices strong +50 mesh (extra large flake) +80 mesh (large flake) +100 mesh (medium flake) -100 mesh (small flake) $1,900/tonne (+ 3%) $1,075/tonne (+ 28%) $950/tonne (+ 36%) $800/tonne (+ 36%) USPG, 99.995%, 10 micron $3,400/tonne (+ 21%) 5 Prices based on FOB China (94-95% C); Percentage
Slide 6: Paradigm shift in mainstream automotive
Paradigm shift in mainstream automotive Volvo to go all-electric star3ng 2019 Ford to invest $11 billion, 40 EVs by 2022 GM to go all-electric by 2026 VW to invest $40 billion, 15 EVs by 2022 6 Source: Volvo, GM; Wall Street Journal 2017
Slide 7: Unprecedented growth forecasted
Unprecedented growth forecasted The global automo3ve industry consumed 31 GWHs of bakeries in 2015. BY 2026, it is expected to consume almost 571 GWHs. 571 GWH 18x growth forecasted for automoAve ba[eries 31 GWH Source: Bloomberg New Energy Finance 2017 7
Slide 8: Tesla just one of many megafactories being built
Tesla just one of many megafactories being built A Global Battery Arms Race | Planned Lithium ion megafactory capacity by 2021 120000 A Global Battery Arms Race | Where is the capacity located? USA 14% 100000 80000 Europe 19% Poland, Sweden, Germany China 56% 100GWh MWh 60000 Total: 372GWh Source: B
Slide 9: 7x growth in graphite demand expected over the next decade
Graphite the largest raw material in Li-ion batteries ~100K tpa of bakery-grade graphite is consumed annually for anodes today. 7x growth in graphite demand expected over the next decade. Source: Benchmark mineral Intelligence 9
Slide 10: Market reality check
MARKET REALITY CHECK The future demand for flake graphite for electric vehicles is very bright, but… • ~65% of graphite consump3on 3ed to tradi3onal steel market • Bakery anodes s3ll a small market for natural graphite • Projects can not rely solely on a bakery or graphene sales plan • Projects must
Slide 11: Molo Graphite Project, Fotadrevo, Madagascar
Molo Graphite Project Fotadrevo, Madagascar Africa • Ideally located in the southern, arid region of Madagascar • $Billion+ mining projects established in- country, codifying mining laws • Democra3c government views mining as key growth engine and one of the pillars of Madagascar's Ac3on Plan $+8 Bi
Slide 12: Ideally located
Ideally located South Korea EU Japan China India MOLO IS LOCATED WITHIN THE HUB OF TOP PURCHASING AND PROCESSING MARKETS FOR FLAKE GRAPHITE. Molo Deposit Madagascar 12
Slide 13: A brand new approach
A BRAND NEW APPROACH • 18 month value-engineering process undertaken • Iden3fied FULL MODULAR CONSTRUCTION with a 17,000 tpa ini3al produc3on as most cost-effec3ve solu3on • Proven methodology • Designed and built to EU standards 13
Slide 14: Lowest CAPEX of any competing project
Lowest CAPEX of any competing project CAPEX ($USD) $300,000,000 Actual representaAon of the Molo mine $250,000,000 $200,000,000 PHASE 1: 17,000 tpa 18.4 $150,000,000 $100,000,000 $ million (USD) $50,000,000 actual estimated $- MOLO Focus Mason Nouveau Northern Kibaran Magnis Syrah Monde 14 Source: S
Slide 15: Lowest quartile operating costs
Lowest quartile operating costs Phase 1 OPEX: Ex-plant: $433/T FOB Mada Port $567/T CIF Ro[erdam: $688/T • Lowest quar3le OPEX on all-in, CIF basis • Compe33ve with Chinese pricing Port d'Ehola at Fort Dauphin 15 Source: 2017 Molo FS
Slide 16: Updated Feasibility Study (2017) - Phase 1
Updated Feasibility Study (2017) - Phase 1 2017 Post-tax NPV: 8% discount US$25.5M IRR: 22% Payback: 4.8 years Annual Produc3on Graphite: 17,000 t/year 3% of market Life of mine: 30 years CAPEX (excluding Working Capital): $18.4M Drama3c reduc3on vs. 2015 FS OPEX (Ex-plant): $433/T OPEX (CIF): $688/
Slide 17: Phased development plan
Phased development plan 2020 Dominant Graphite Producer Phase 2 2018 + 34,000 tpa 51,000 tpa Phase 1 17,000 tpa • $18.4M CAPEX • +$37.6M CAPEX* (es3mated internally based on 2x actual Phase 1 cost) • De-risks project • Full-scale produc6on • Validate product to buyers • Expansion will ramp up based
Slide 18: Graphite pricing
Graphite pricing The larger the flake size, and higher the purity, the higher the price. 18
Slide 19: A very high-quality graphite concentrate
A very high-quality graphite concentrate • Excellent flake size distribuAon • 97%-98% carbon purity achieved with simple flota3on. large/jumbo flake DistribuAon Mesh Size % Distribution Grade % Carbon (t) 32.5% medium +48 (jumbo flake) 23.6 96.9 21.1% small/fine flake +65 (coarse flake) 14.6 97.1 +80 (la
Slide 20: SuperFlake is verified for all top demand markets
SuperFlake® is verified for all top demand markets • Up to 98% carbon (C) purity achieved with simple flota3on • Excellent thermal expansion (>500x) for graphite foil applica3ons • Easily upgraded to 99.97% C (bakery grade) • Verified by end users for ALL top demand markets for graphite 20
Slide 21: A huge resource
A huge resource 100.37 million tonnes (MT) measured & indicated Combined Measured & Indicated resource @ 6.3% C, above a 2% C cut-off 40.91 MT inferred Inferred resource @ 5.8% C, above a 2% C cut-off RESOURCES; above a 2% C cut-off RESERVES; above a 4.5% C cut-off • 23.62 Mt) Measured @ 6.32%, • 14.17
Slide 22: Easy extraction and expandability
Easy extraction and expandability • Immediately at surface, minimal overburden • Negligible waste-to-ore ra3o (0.81:1) • Over 300 line kms (186 miles) of con3nuous graphite iden3fied, all at surface 20-40 km 12-15 km 5-10 km 40-60 Japan km 40-60 km MOLO DEPOSIT ADDITIONAL • 300m x 1500m GRAPHITE TREN
Slide 23: Low environmental impact
Low environmental impact • Studies were undertaken /completed in accordance and partnership with: • Equator Principles • World Bank & IFC requirements • South African and Malagasy environmental consultancy firms, • GCS Water and Environment Ltd. • AGETIPA (set up by World Bank) ! 23
Slide 24: Extensive community involvement & acceptance
Extensive community involvement & acceptance Engaged community outreach programs consis3ng of: • Training on how to improve agricultural yields • Distribu3on and training of agricultural equipment selected by communi3es • Training on how to effec3vely use organic fer3lizers • Establishment of 2 vacci
Slide 25: Phase 1 financing plan
Phase 1 financing plan Financing required for 2019 Financing schedule to meet 2019 producAon: 1. March, 2019 $5M 2. June, 2019 $7M 3. August, 2019 $8M 4. November, 2019 $5M 2018 2019 2020 Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun Jul PHASE
Slide 26: Our second strategic resource - Vanadium
Our second strategic resource - Vanadium • Located 12kms from the Molo Graphite Project Mainty Zone • One of the world’s largest vanadium deposits and highest in grade Fotadrevo Fotadrevo Manga Zone Sedimentary-hosted is the key. Ideal to produce high-purity electrolyte for vanadium redox bakeries (
Slide 27: VRBs are the leading technology for energy storage
VRBs are the leading technology for energy storage • Every 1MWh of VRB capacity requires ~300 tonnes flake graphite. • VRBs are now approaching 5 cents /kWh/cycle in storage costs Copyright © of 27
Slide 28: Strong management and operations team
Strong management and operations team Craig Scherba Brent NykoliaAon President and Chief Execu3ve Officer P.Geo. Senior Vice President, Corporate Development BCom • Discovered both the graphite and vanadium deposits as former • Over 16 years of management experience, having held senior head of explora
Slide 29: Graphite Vanadium: Two Strategic Energy Materials. One Source.
Graphite Vanadium Two Strategic Energy Materials. One Source. 29