Nickel Industries Limited · ASX:NIC
Nickel Industries — Nickel Mines — Non-Deal Roadshow (October 2018)
40 slides from Nickel Industries's roadshow presentation, Oct 9, 2018
Slide 1: LME Week Investor Presentation ASX cover letter
ABN 44 127 510 589 Level 2, 66 Hunter Street Sydney NSW 2000 Australia For personal use only T: +61 2 9300 3311 F: +61 2 9221 6333 E: info@nickelmines.com.au 9 October 2018 The Manager Companies ASX Limited 20 Bridge Street Sydney NSW 2000 (40 pages by email) LME WEEK INVESTOR PRESENTATION Nickel Mi
Slide 2: Investor Presentation, LME Week, London, October 2018
NICKEI INVESTOR PRESENTATION MINES LIMITED LMEWEEK,LONDON = ee OCTOBER 2018
Slide 3: Disclaimer
NICKEL IMITED DISCLAIMER This presentation has been prepared by Nickel Mines Limited (ABN 44 127 510 589) (‘NIC’). The information contained in this presentation is for information purposes only and has been prepared for use in conjunction with a verbal presentation and should be read in that contex
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02 For personal use only 54.0% 13.7% 11.6% 9.9% 10.8% . $0.40 $0.35 $0.30 ▪ $0.25 ▪ $0.20 $0.15 ▪ $0.10 ▪ $0.05 ▪ $0.00 ▪ 20/08/2018 29/08/2018 7/09/2018 16/09/2018 25/09/2018 4/10/2018 3
Slide 5: Executive Summary
EXECUTIVE SUMMARY AUSTRALIA’S NEWEST LISTED NICKEL COMPANY Nickel Mines Limited (NIC) is an Australian company publicly listed on the ASX. NIC holds an 80% interest in PT Hengjaya Mineralindo (PTHM) which holds 100% of the Hengjaya Nickel Mine (HM). HM is located in Morowali Regency, Central Sulawes
Slide 6: Executive Summary
EXECUTIVE SUMMARY AUSTRALIA’S NEWEST LISTED NICKEL COMPANY The SDI and Wanlu investments were subject to the completion of Due Diligence on NIC and the satisfaction of all Conditions Precedent (CP) within the CSA, including being “debt free”. As contemplated by the CSA, NIC utilised the SDI and Wanl
Slide 7: Investment Highlights
INVESTMENT HIGHLIGHTS WORLD CLASS NICKEL RESOURCE JORC compliant resource of 37.5M dint at 1.81% nickel (~680kt contained Ni) with significant extension potential. Ability to supply RKEF plant for 30+ years (at 1.5M wmt pa). Adjacent to Tsingshan’s IMIP. STRATEGIC PARTNERSHIP WITH GLOBAL INDUSTRY LE
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06 For personal use only Underpinned by an improving outlook for stainless steel and an exponentially increasing battery market for Electric Vehicles, nickel demand is expected to grow by 2- 3% pa over the medium to longer term. With supply not forecast to keep pace with demand, the nickel market re
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06 For personal use only Underpinned by an improving outlook for stainless steel and an exponentially increasing battery market for Electric Vehicles, nickel demand is expected to grow by 2- 3% pa over the medium to longer term. With supply not forecast to keep pace with demand, the nickel market re
Slide 13: Supported by World Class Facilities & Infrastructure
(i SUPPORTED BY WORLD CLASS FACILITIES & INFRASTRUCTURE
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Slide 15: RKEF Plant Construction Progress
07 RKEF PLANT CONSTRUCTION PROGRESS Kiln Column Electrical Switch Room 14
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Slide 17: C1 Cost vs Recovered Nickel Production
C1 COST (USS/T) I Feni Okt 1* QUARTILE 100 kt 200 kt HE npibr 6M Chinese NPI 2" QUARTILE 300 kt 400 kt NICKEL MINES LIMITED 3" QUARTILE 4" QUARTILE 600 kt 700 kt 800 kt 900 kt RECOVERED NICKEL PRODUCTION (7 Indonesian NPI Min. Source : Wood Mackenzie 16
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Slide 19: Global monthly nickel supply and demand
09 For personal use only Global monthly nickel supply and 200 demand to June 2018 60 Usage and production: 3MMS '000t ni 50 180 40 160 30 Balance: '000t Ni 20 140 10 120 0 -10 100 -20 80 -30 2010 2011 2012 2013 2014 2015 2016 2017 2018 Balance Production Consumption (use) 18
Slide 20: World primary nickel production and NPI share
09 For personal use only World primary nickel production by NPI share in total world nickel production quarter, kt Ni 35% 450 30% 400 350 25% 300 20% 250 200 15% 150 10% 100 5% 50 0 0% Q106 Q406 Q307 Q208 Q109 Q409 Q310 Q211 Q112 Q412 Q313 Q214 Q115 Q415 Q316 Q217 Q118 Q106 Q406 Q307 Q208 Q109 Q409
Slide 21: Tsingshan nickel production and stainless steel output
For personal use only '000t Ni 09 0 50 100 150 200 250 300 350 2004 2005 2006 China 2007 2008 2009 2010 Indonesia 2011 2012 2013 2014 2015 2016 2017 Tsingshan nickel production 2018F 2019F 2020F % of world nickel production 0% 2% 6% 4% 8% 10% 12% 14% 16% % of world prodcution million tonnes 2 4 6 8
Slide 22: Indonesian nickel production and NPI production
09 For personal use only Indonesian nickel production by Nickel pig iron production application 185kt contained Ni 900 45% 2% 800 40% 2% 6% 700 35% % of wrold production 8% 600 30% 3% '000t Ni 500 25% 400 20% 300 15% 200 10% 100 5% 79% 0 0% 2011 2016 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Slide 23: Indonesian nickel exports
09 For personal use only Indonesian nickel exports in value Indonesian nickel exports in volume terms terms 8000 40000 800 7000 35000 700 LME price: $/tonne 6000 30000 600 $US million 5000 25000 '000t nickel 500 400 4000 20000 300 3000 15000 200 2000 10000 100 1000 5000 0 0 0 2011 2017 2007 2008 200
Slide 24: Mine versus RKEF Economics
NICKEL LIMITED (() MINE VERSUS RKEF ECONOMICS Relative Economics of Shipping versus Processing 1.5Mt pa of Nickel Ore Margin: ~US$13,700/t 250 Mine EBITDA (IMIP Pricing) = Mine EBITDA (Market Pricing) ——RKEF EBITDA EBITDA: US$226.3M 200 150 Margin: ~US$7,700/t EBITDA: US$126.5M ge 3 7 1.5Mt pa Ni or
Slide 25: The IMIP's Requirement for Additional NPI
1 THE IMIP’S REQUIREMENT NICKEL FOR ADDITIONAL NPI a TSSa ES ~65% NPI ~30% Chromium ~5% Primary Nickel } current 20 RKEF 1.5Mt pa NPI 2Mt pa 450Kt pa NPI (additional NPI requirement to move to 3Mt pa) ww } Puanneo 2 26 RKEF 1.95Mt pa NPI 3Mt pa OTHER GROWTH AVENUES EXIST FOR NIC 24
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Slide 27: Financial Model: Steady State Operations
11 FINANCIAL MODEL NICKEL STEADY STATE OPERATIONS “ The steady state operations financial model outputs and cost sensitivity analysis overpage have been validated by Wood Mackenzie as part of an independent review of the RKEF Feasibility Study Report and the operating performance of the 20 existing
Slide 28: Financial Model: Cost Sensitivity Analysis
FINANCIAL MODEL COST SENSITIVITY ANALYSIS Indicative 1-Year Steady State EBITDA and FCF Sensitivity Analysis Indicative 1-Year Steady State EBITDA and FCF Sensitivity Analysis 60% RKEF Ownership — Mine & RKEF Opex +10% 60% RKEF Ownership — Mine & RKEF Opex +20% 60% RKEF Ownership Nickel Price 60% RK
Slide 29: Board & Management
1 BOARD & MANAGEMENT ROBERT NEALE Chairman 30+ years management experience in the resources and energy sectors. Past Managing Director of New Hope Corporation as well as having held the position of Chairman, Independent and Non-Executive Director of a number of public and listed companies including
Slide 30: Board & Management: SDI & Wanlu Director Nominees
BOARD & MANAGEMENT SDI & WANLU DIRECTOR NOMINEES HUANG WEIFENG XU YUANYUAN Non-Executive Director Non-Executive Director Extensive career experiences across a range of industrial enterprises including as Plant Manager of Wenzhou Tractor Plant of Wenzhou Machinery Industrial Corporation and Executive
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Peter Wei le 73 Directoumicy Manca Freon,
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For personal use only ▪ 120.00 110.00 ▪ 100.00 90.00 ▪ 80.00 70.00 ▪ 60.00 Jun 18 Jun 18 Jul 18 Jul 18 Aug 18 Aug 18 Aug 18 Sep 18 Sep 18 34
Slide 36: Nickel Markets Supply-Demand Outlook
NICKEL MARKETS NICKEL SUPPLY - DEMAND OUTLOOK Market balance and LME nickel price forecasts by Wood Mackenzie 300 Long-term price: US$22,050/t (real 2018) 250 200 LME PRICE (US$/T, REAL 2018) MARKET BALANCE (KT) ‘3988 Market balance +@===LME price (RHS, real 2018) LME prices are forecast to rise to
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Slide 38: For personal use only
For personal use only Underpinned by an improving outlook for stainless steel and an exponentially increasing battery market for Electric Vehicles, nickel demand is expected to grow by 2- 3% pa over the medium to longer term. With supply not forecast to keep pace with demand, the nickel market retur
Slide 39: About Nickel Mines Limited
NICKEL MINES LIMITED Nickel Mines Limited (‘NIC’ or ‘the Company’) in an unlisted Australian public company that was incorporated in 2007. NIC has a current 80% ownership interest in PT Hengjaya Mineralindo (‘PTHM’) which inturn holds a 100% interest in the world class Hengjaya Nickel Mine (‘HM’) lo
Slide 40: Statement of Compliance
STATEMENT OF COMPLIANCE The information in this report that relates to Exploration Results and Mineral Resources is based on information compiled by the staff and contractors of Nickel Mines Limited and its subsidiaries and approved by Mr Brett Gunter, a Member of the Australasian Institute of Minin