Nordic Mining Asa · OSL:NOM
Nordic Mining Asa — Q3 2017 Earnings Presentation
46 slides from Nordic Mining Asa's earnings presentation, Nov 9, 2017
Slide 1: Q3 2017 Presentation
OAX: NOM Q3 2017 Presentation Oslo, 9 November 2017 Exploration and production of high-end minerals and metals Nordic Mining ASA | N-0250 Oslo | Norway | Tel +47 22 94 77 90 | Fax +47 22 94 77 01 | Org. no 989 796 739 | post@nordicmining.com 1
Slide 2: Disclaimer
Disclaimer This document has been used by Nordic Mining during an oral presentation. Therefore, this document is incomplete without the oral explanations, comments and supporting instruments that were submitted during the referred presentation. To the extent permitted by law, no representation or wa
Slide 3: Introduction
1. Introduction 2. Financial status 3. Update on projects - Engebø, rutile and garnet - Keliber, lithium 4. Q&A
Slide 4: Developing high-value assets in the Nordic Region
Developing high-value assets in the Nordic Region Platinum, Palladium Engebø Rutile and Garnet (100%) High Purity Quartz Keliber Seabed minerals Lithium (22%) 4
Slide 5: Financial status
1. Introduction 2. Financial status 3. Update on projects - Engebø, rutile and garnet - Keliber, lithium 4. Q&A
Slide 6: Consolidated Income Statements
Consolidated Income Statements Q3-2017 Q3-2016 Acc. 2017 Acc. 2016 2016 Unaudited Unaudited Amounts in NOK million Unaudited Unaudited Audited - - Sales - - - (1.8) (1.7) Payroll and related costs (8.1) (5.7) (7.8) - - Share-based payment - (1.4) (1.4) - - Depreciation and amortisation (0.1) - - - -
Slide 7: Consolidated Statements of Financial Position
Consolidated Statements of Financial Position 30.09.2017 31.12.2016 Amounts in NOK million Unaudited Audited ASSETS Evaluation and exploration assets 21.4 21.2 Property, plant and equipment 0.2 0.3 Investment in an associate 29.8 15.0 Total non-current assets 51.5 36.6 Cash 30.1 66.1 Trade and other
Slide 8: Shareholder structure and share price development
Shareholder structure and share price development Largest shareholders* Share overview and share price development** Name of shareholder No. of shares % Share overview 1 NORDNET BANK AB (NOMINEE) 9 594 914 10,1 % Number of issued shares 94 825 468 2 NORDEA BANK FINLAND (NOMINEE) 4 768 454 5,0 % Ow n
Slide 9: Ownership in Nordic Mining ASA
Ownership in Nordic Mining ASA Nominee accounts mainly private shareholders Geographical distribution 3% • Shareholder analysis and identification performed by 7% Orient Capital in Q2 2017 13% • Nominee accounts analysed and combined with ordinary shareholdings • Ownership structure as expected; no
Slide 10: Update on projects
1. Introduction 2. Financial status 3. Update on projects - Engebø, rutile and garnet - Keliber, lithium 4. Q&A
Slide 11: Engebø Rutile and Garnet Project Prefeasibility Study
Engebø Rutile and Garnet Project Prefeasibility Study ✓ Published on October 30, 2017 ✓ Full report available on company website www.nordicmining.com 11
Slide 12: Summary of the Engebø Prefeasibility Study (PFS)
Summary of the Engebø Prefeasibility Study (PFS) • Large outcropping deposit of natural rutile and garnet 1 World class rutile and garnet deposit • High grades, low impurities • Geotechnically stable, enables efficient mining • Minerals with unique properties and growing demand Solid market fundamen
Slide 13: World class rutile and garnet deposit
1 World class rutile and garnet deposit 2 Solid market fundamentals, favourable location 3 Scalable operation with limited environmental footprint 4 Project pre-tax NPV8% of USD 332 mill; IRR 24% 5 PFS supports further progress towards production 13
Slide 14: Large eclogite deposit located at tidal waters
Large eclogite deposit located at tidal waters ✓ Outcropping deposit with unknown extension to depth ✓ Geotechnically stable orebody allows for effective mining ✓ Low impurities, negligible content of heavy metals and radioactive elements ✓ Easy transition from open pit to underground mining 14
Slide 15: High grade rutile and garnet mineralisation
High grade rutile and garnet mineralisation Mineral resource and reserves classification* Among the highest rutile grades ✓ Increased cut-off implies stronger financial ✓ Rutile grade for current producers and performance in early mining years planned projects ✓ Large potential in inferred resources
Slide 16: World class rutile and garnet deposit
1 World class rutile and garnet deposit 2 Solid market fundamentals, favourable location 3 Scalable operation with limited environmental footprint 4 Project pre-tax NPV8% of USD 332 mill; IRR 24% 5 PFS supports further progress towards production 16
Slide 17: Rutile and Garnet - unique mineral properties, increasing demand
Rutile and Garnet - unique mineral properties, increasing demand Garnet Rutile Current world production: ~ 1.4 million tonnes Current world production: ~ 0.8 million tonnes WATERJET CUTTING SAND BLASTING ABRASIVES PIGMENT WELDING RODS TITANIUM Tests have demonstrated that Engebø can produce coarse a
Slide 18: Garnet - young mineral with strong growth
Garnet - young mineral with strong growth Apparent consumption of garnet (excl. China)* Current world production* 1 600 1 400 China 1 200 Australia 1 000 1 000 tonnes 800 ~ 1.4 mill. tonnes 600 Other 400 India 200 0 * Source: TAK Industrial Mineral Consultancy 18
Slide 19: Garnet market and price forecast
Garnet market and price forecast Average garnet export prices (FOB)* $350 ✓ Emerging mineral with strong growth in the waterjet cutting markets $300 ✓ Currently no European production $250 ✓ Engebø is one of few hard rock deposits of almandine garnet $200 ✓ Engebø will produce commercial end-product
Slide 20: Rutile market and price forecast
Rutile market and price forecast Global rutile supply/demand balance* Rutile price forecast* 1 000 000 $3 000 900 000 $2 500 800 000 700 000 $2 000 600 000 USD per tonne TiO2 units 500 000 $1 500 400 000 $1 000 300 000 200 000 $500 100 000 0 $0 South Africa Sierra Leone Rutile price High est. Base e
Slide 21: Export sales from Engebø
Export sales from Engebø Rutile off-take Garnet off-take ✓ The largest pigment manufacturers in Europe ✓ Nordic Mining has signed a MoU with a have chloride technology that benefits from high leading, international producer of industrial grade feedstock minerals ✓ Several can consume Engebø’s annual
Slide 22: World class rutile and garnet deposit
1 World class rutile and garnet deposit 2 Solid market fundamentals, favourable location 3 Scalable operation with limited environmental footprint 4 Project pre-tax NPV8% of USD 332 mill; IRR 24% 5 PFS supports further progress towards production 22
Slide 23: Favourable internal logistics
Favourable internal logistics ✓ 16 years open pit mining ✓ Rich ore in the early years ✓ Low stripping ratio ✓ Glory hole concept with underground crushing facility ✓ Underground silos enables storage and operational flexibility ✓ Minimum haulage distance ✓ Limited visual impact ✓ Open pit gives eas
Slide 24: Open pit mining (2021-2036)
Open pit mining (2021-2036) Units Run of mine 1.5 Mtpa Mine life 16 Years Average production garnet 261 ktpa Average production rutile 33 ktpa Strip ratio 1.34 Waste/ore 24
Slide 25: Underground mining (2037-2049)
Underground mining (2037-2049) Units Run of mine 1.5 Mtpa Mine life 13 Years Average production garnet 262 ktpa Average production rutile 35 ktpa 25
Slide 26: PFS process testwork; industrial scale equipment
PFS process testwork; industrial scale equipment ✓ Comprehensive testwork has documented commercial products from rutile and garnet according to market specifications ✓ Testwork has demonstrated rutile recovery of approximately 60% 26
Slide 27: Flowsheet of rutile and garnet process
Flowsheet of rutile and garnet process 27
Slide 28: Zoning plan and environmental permits fully granted
Zoning plan and environmental permits fully granted ✓ Deep-sea disposal offers safe and sustainable tailings solution ✓ The tailings will mainly sediment within the regulated area ✓ The currents in the tailings area are moderate and there is limited risk for erosion currents ✓ Continuous monitoring
Slide 29: Compact process plant, including ship-loading facilities
Compact process plant, including ship-loading facilities 29
Slide 30: World class rutile and garnet deposit
1 World class rutile and garnet deposit 2 Solid market fundamentals, favourable location 3 Scalable operation with limited environmental footprint 4 Project pre-tax NPV8% of USD 332 mill; IRR 24% 5 PFS supports further progress towards production 30
Slide 31: Key project assumptions
Key project assumptions Mining production Assumptions Value 6,0 Ore production Waste production 5,0 Garnet price USD 250/tonne 4,0 Million tonnes 3,0 Rutile price USD 1 070/tonne 2,0 1,0 1.5 mill. tonnes/yr Garnet sales (from ~2027) 261 000 tpa 0,0 Rutile sales (average) 32 500 tpa Garnet sales and
Slide 32: Attractive project economics
Attractive project economics Metric Value Pre-tax NPV @ 8% USD 332 mill. Pre-tax IRR 23.8% Life of mine 29 years 200 Pay-back period < 5 years Post-tax NPV @ 6.8% USD 305 mill. 150 Post-tax IRR 20.8% 100 50 USD million 0 -50 -100 Garnet Revenue Rutile Revenue Capex Maintenance capex (SIB) -150 Opex,
Slide 33: Large upside potential
Large upside potential +40% 500 A. Increased production of garnet 450 51 to 300 000 tonnes/year 400 69 13 Pre-tax NPV @ 8% (USD million) 350 B. Extension of mine life to 40 300 years by including Inferred 250 Resources 465 200 150 332 C. Additional garnet sales in early years 100 50 0 NPV base A. In
Slide 34: Competitive rutile revenue-to-cash cost position
Competitive rutile revenue-to-cash cost position ✓ The revenue-to-cash cost ratio is based on the first ten years of operations ✓ Engebø benefits from producing two high value products with low mining and processing costs Source: TZMI 34
Slide 35: World class rutile and garnet deposit
1 World class rutile and garnet deposit 2 Solid market fundamentals, favourable location 3 Scalable operation with limited environmental footprint 4 Project pre-tax NPV8% of USD 332 mill; IRR 24% 5 PFS supports further progress towards production 35
Slide 36: The way forward
The way forward 2017 2018 2019 2020 2021 2H 1H 2H 1H 2H 1H 2H 1H 2H Definitive Feasibility Study Off-take agreements Construction financing FEED* Construction period Production ramp-up * FEED: Front End Engineering & Design 36
Slide 37: Definitive Feasibility Study (DFS) targets project bankability
Definitive Feasibility Study (DFS) targets project bankability ✓ Mining trade-off studies, mine design and schedule ✓ Processing testwork, ore variability and flowsheet optimisation ✓ Modularisation and logistical studies ✓ Procurement strategy and procurement operating plan ✓ Multi-disciplinary des
Slide 38: Promising results from the Prefeasibility study
Promising results from the Prefeasibility study ✓ Robust dual-mineral operation with high-quality garnet and rutile ✓ Low investments ✓ Attractive project economics 38
Slide 39: Update on projects
1. Introduction 2. Financial status 3. Update on projects - Engebø, rutile and garnet - Keliber, lithium 4. Q&A
Slide 40: KELIBER - Lithium Mining for Rapidly Growing Markets
KELIBER - Lithium Mining for Rapidly Growing Markets High-Purity Lithium Carbonate for Sustainable Energy mh
Slide 41: Lithium-ion battery megafactories under way
Lithium-ion battery megafactories under way
Slide 42: Active resource exploration during recent years
Active resource exploration during recent years
Slide 43: Keliber is progressing towards production
Keliber is progressing towards production
Slide 44: Industrial and institutional owners on top in Keliber
Industrial and institutional owners on top in Keliber
Slide 45: Q&A
1. Introduction 2. Financial status 3. Update on projects - Engebø, rutile and garnet - Keliber, lithium 4. Q&A
Slide 46: Safety – Environment - Innovation
Safety – Environment - Innovation www.nordicmining.com 4 6