Investor Presentation November OSLO: NMG

Transcription

1 Investor Presentation November OSLO: NMG

2 Forward looking statement Some of the statements contained in this presentation are forward-looking statements, such as statements that describe Nickel Mountain s future plans, intentions, objectives or goals, and specifically include but are not limited to statements regarding the Rönnbäcken nickel project, resource estimates, potential mineralization, future financial or operating performance, nickel prices, estimated future production, future costs, timing of pre-feasibility study and economic analysis. Actual results and developments may differ materially from those contemplated by such forward-looking statements depending on, among others, such key factors as the possibility that actual circumstances will differ from the estimates and assumptions used in the potential of the Rönnbäcken nickel project, the environmental and social cost of proceeding with the project, uncertainty relating to the availability and costs of financing needed in the future, general business and economic conditions, inflation, changes in exchange rates, fluctuations in commodity prices, delays in the development of the project, changes in legislation governing emissions into the air and water, waste, and the impact of future legislation and regulations on expenses, capital expenditures and taxation, changes in project parameters, variation in ore grade or recovery rates, delays in obtaining government approvals and necessary permitting, impurities in products and other risks involved in the mineral exploration and development industry. The forward-looking statements included in this document represent Nickel Mountain s views as of the date of this presentation and subsequent events and developments may cause Nickel Mountain s views to change. Nickel Mountain disclaims any obligation to update forward-looking information except as required by law. Readers should not place undue reliance on any forward-looking statements. 2

3 Nickel Mountain Group in brief Overview Location Nickel Mountain Group (NMG) is a Swedish mineral exploration company focused on nickel NMG s main asset is Europe s largest undeveloped nickel sulphide deposit, the Rönnbäcken Nickel Project (RNP) RNP is currently in the pre-feasibility stage Rönnbäcken Expected annual nickel production of 26,000 tonnes for up to 20 years with a significant iron ore by-product Very favourable strip ratio of 0.79:1 NMG is listed on the Oslo Stock Exchange (OSE), with a market cap of approximately MNOK 120 after a recently completed rights issue Stockholm 90.8 million shares outstanding and 6,000 shareholders Major shareholder Strata Marine & Offshore AS holds currently 40.28% of shares, Kristianro AS controls 6.6% and Froiland Invest AS owns 1.1%. 3

4 Investment highlights Large Scale & Long Life Sizeable volume of Ni concentrate containing 26,000 tpa Ni & 730 tpa Co Production of 1.6 Mtpa magnetite iron concentrate by-product Long life of mine over 19 years with further exploration potential High Grade Concentrates Very high grade nickel concentrate (28% Ni) High grade magnetite concentrate (66% Fe) World Class Infrastructure Key infrastructure already in place represents significant capex savings Nearby power grid, hydropower plant, roads, ice-free port, airport Attractive Economics Pre-Tax NPV 8% ranges from US$1,045 M to US$2,301 M for Ni prices between US$9.00/lb and US$12.00/lb (assuming a saleable magnetite byproduct) Experienced Management Proven team of professionals, each having >20 years experience in nickel and other base metals Low Risk Low country risk favourable government policy towards mining Conventional and proven technology reduces execution risk 4

5 Our team brings significant mining experience Torbjörn Ranta, CEO Over 15 years of business experience from the natural resource sector Served as CEO for several companies, including Vostok Nafta, Vostok Oil, and Central Asia Gold Rolf Ritzén, Project Manager Over 30 years international experience in mine/mill management in base metals 14 years in mine management at Boliden including General Manager for the Aitik Open Pit Copper-Gold Mine Johan Sjöberg, Chief Geologist Over 8 years in gold and base metals exploration and project geology at Dragon Mining s Svartliden mine Managed near mine exploration, drilling campaigns, resource estimation and generation of geological models Lars Carnerud, Operations Development Consultant 7 years as Mine Mgr at Zinkgruvan Pb/Zn/Ag mine tasked with overseeing the doubling of mine output Over 30 years with Boliden incl. MD Saudi Company for Precious Metals, MD Markets, Boliden Rönnskär Works Erik Karlsson, Project Manager, Golder Associates AB 9 years as consultant involved in mine permitting and project management Ph.D. in Applied Geology and a Post-doctoral researching sulphidic mining waste and reclamation Marja Kirves, (Market Research & Communications Consultant Over 20 years with Falconbridge specialising in base metals market research, competitor analysis and business intelligence 5

6 Excellent infrastructure already in place Rönnbäcken is located in close proximity to: European highway E12 14 km National power grid 4 km Hydropower plants 12 & 25 km Airport 40 km Railway network 107 km Ice-free seaport 166 km Offers capex savings over more remote properties Source: Rönnbäcken December 2011 PEA Update by SRK 6

7 Location of the three deposits Tonnes in measured + indicated category only Mt Mt 51.5 Mt 7

8 NMG share price 5 years and 1 year (NOK/share) Jan Nov

9 History of steady development Launch study on tailings disposal SGU classification Area of National Interest for Mineral Extraction Preliminary Socio- Economic Impact Study Metallurgical Analysis: Benchmarking Against Other Nickel Ores Metallurgical scoping tests completed NI Resource Estimate for Sundsberget Update of NI Resource Estimate for Rönnbäcknäset Initial Mineralogy Study and Program of Geological- Metallurgical Domaining Testwork Test mining 4,000 t & large scale pilot tests by Boliden produce 35% Ni conc. Boliden mining lease expires Bench scale tests achieve 26% Ni conc. IGE stakes exploration license Commence community dialogue Major 16,000 m 1 st phase drill program completed NI Resource Estimate Preliminary Assessment by Scott Wilson Mini- Pilot MRG partnership Exploitation Concessions received Preliminary Economic Assessment by SRK Update of Preliminary Economic Assessment for magnetite concentrate by SRK Sundsberget Exploitation Concession received Swedish Government dismisses appeals against Exploitation Concessions Launch deposit-wide Mineralogy Study Launch key activities towards Pre- Feasibility Study & Environmental Permit Application 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 Q

10 DEPOSIT Vinberget Rönnbäcksnäset Sundsberget TOTAL Resources now 97% measured & indicated category CLASSIFICATION NI Resource Estimate January 2012 TONNES (Mt) Ni-Total % Sulphide Ni % Fe-Total % Ni-Total ktonnes Sulphide Ni ktonnes Measured Indicated Measured +Indicated Inferred Indicated Measured +Indicated Inferred Indicated Measured +Indicated Measured Indicated Measured +Indicated Inferred LOM waste:ore Strip Ratio Notice: The effective date of the Mineral Resource Statement for Rönnbäcksnäset is January 23, The effective date of the Mineral Resource Statement for Vinberget is February 25, The effective date of the Mineral Resource Statement for Sundsberget is October 28, For additional information and disclosure, please see Rönnbäcken January 2012 Mineral Resource Statement by SRK Strip ratio is very favourable at 0.79:1 waste to ore over the LOM (ref. Mineral Resource Statement January 2012) :1

11 PEA Highlights: Two high grade products Rönnbäcken Project PEA Highlights Mill Throughput (Mtpa) 30 LOM Stripping Ratio (waste:ore) 0.79:1 LOM Sulphide Ni Recovery 80% Ni Concentrate Grade 28% Life of Mine (years) 19 LOM Magnetite Recovery 90% The PEA demonstrates the potential to commercially produce a very high grade nickel concentrate using open-pit mining and conventional technology Assumes a saleable magnetite concentrate byproduct Further market studies of Ni, Cr and Zn impurities in magnetite concentrate required. Very fine particle size of <20µm needs to be studied from a handling and transport point of view. Magnetite Iron Concentrate Grade 66% Average Ni Production Years 1-5 (tpa) Average Ni Production LOM (tpa) Average Magnetite Prod n LOM (tpa) All-In C1 Cash Costs (US$/lb) 1,2 Years 1-5 All-In C1 Cash Costs (US$/lb) 1,2 LOM USD 3.50 USD 3.55 Assumes Nickel price of US$9.00/lb Ni, US$1 = SEK : Net of magnetite & cobalt by-product credits 2 : Net Direct Cash Cost (C1) represents the cash cost incurred at each processing stage, including mining, processing, site admin, transportation, smelting and refining, less net by-product credits Source: Rönnbäcken December 2011 PEA Update by SRK 11

12 Proven and conventional technology Simple, conventional layout comparable to the recently completed and nearby Aitik copper mine demonstrates low execution risk Comparable design provides recent direct cost and construction schedule benchmark Boliden s Aitik copper mine 36Mt processing plant commissioned in April 2010 Source: Rönnbäcken December 2011 PEA Update by SRK 12

13 Steady Growth in Project Value* At USD 12/lb (USD /t) Ni price At USD 9/lb (USD /t) Ni price November 2009 Scott Wilson PA April 2011 SRK PEA October 2011 Preliminary magnetite results December 2011 SRK updated PEA* *Pre-tax net present value at an 8% discount rate. ** Rönnbäcken December 2011 PEA Update by SRK Consulting based on a previous assumption of a saleable magnetite concentrate by-product, which is currently under review. A study in the 2 nd half of 2012 indicated that the product may not be attractive for carbon steel applications due to the occurrence of higher levels of nickel (~0.6%), chrome (~2.2%) and zinc (~0.04%) and the fine particle size of the concentrate. However, the same 2012 study indicated that the magnetite concentrate could potentially be suitable as dense medium in coal processing applications. It also recommended investigating conversion of the magnetite concentrate to direct reduced iron/hot briquetted iron (DRI/HBI). Further market studies are required. 13

14 Economics improve with higher nickel prices NPV 8% (USDm), pre-tax* IRR (%)* 35.2% 31.6% % % % % % Nickel price USD/lb (USD/tonne) $7 ($15 400) $8 ($17 600) $9 ($19 800) $10 ($22 000) $11 ($24 300) $12 ($26 500) $13 ($28 700) Payback years* (from production start) Net pre-tax cash flow (USDm)* 7.5 yrs 5.4 yrs 4.4 yrs 3.8 yrs 3.3 yrs 3.0 yrs 2.7 yrs $ $ $ $ $ $ $ SEK/USD = 8.00 Cobalt price = $15.00/lb Magnetite price = $110/t: 2017 $104/t: Source: Rönnbäcken December 2011 PEA Update by SRK *Assumes a saleable magnetite concentrate by-product

15 Aug-09 Oct-09 Dec-09 Feb-10 Apr-10 Jun-10 Aug-10 Oct-10 Dec-10 Feb-11 Apr-11 Jun-11 Aug-11 Oct-11 Dec-11 Feb-12 Apr-12 Jun-12 Aug-12 Oct-12 Dec-12 Feb-13 Apr-13 Jun-13 Aug-13 Oct-13 Dec-13 Feb-14 Apr-14 Jun-14 Aug-14 USD/tonne Nickel price development Nickel prices last five years (USD/tonne) Average nickel price last 5 years: USD Average nickel price last year: USD Implied RNP NPV NPV 8% : USD 2 301m NPV 8% : USD 1 045m NPV 8% : USD 620m Nickel price 12 month rolling average Source: FactSet as of 23 August

16 Operating cost breakdown Operating Costs US$/tonne US$/tonne US$/lb US$/lb US$/tonne moved milled contained Ni payable Ni payable Ni Mining $1.79 $3.10 $1.61 $1.73 $3 814 G & A Processing Rehabilitation Operating Cost at Mine Gate $4.97 $8.64 $4.48 $4.81 $10,604 Conc. Transport TC/RC s Cobalt Credits Magnetite Credits All-in C1 Cash Cost 1 $3.55 $ Net Direct Cash Cost (C1) represents the cash cost incurred at each processing stage, including mining, processing, site admin, transportation, smelting and refining, less net by-product credits (magnetite and cobalt). Source: Rönnbäcken December 2011 PEA Update by SRK (Based on assumption of a saleable magnetite concentrate by-product, which is currently under review) 16

17 Magnetite concentrate provides a significant contribution C1 cash cost (USD/lb payable nickel) Cost excl. Byproducts Cobalt Magnetite USD 5.84/lb USD 5.80/lb USD 7.31/lb USD 6.97/lb USD 2.96/lb USD 3.19/lb November 2009 Scott Wilson PA April 2011 SRK PEA October 2011 Preliminary magnetite results December 2011 SRK updated PEA C1 cash costs include mining, processing, site administration, transportation, smelting and refining, net of by-product credits. Assumes a saleable magnetite concentrate byproduct (refer to ** on slide 16) 17

18 Capital costs (USDm) Capital cost breakdown Sustaining Infrastructure ongoing Working capital 61 Infrastructure 150 Magnetite circuit The cost breakdown is based on Outotec estimates. Rönnbäcken layout comparable to the recently completed Aitik mine project, nearby Outotec worked on Boliden s Aitik 36Mt processing plant commissioned in April 2010 Process plant 962 Comparable design of Aitik provides recent direct cost and construction schedule benchmark Start-up capital 1) Total LOM capital costs 1) Includes contingency of $212 million 18

19 Main potential customers for RNP nickel concentrate Rönnbäcken project Norilsk Nickel, Kola Vale, Voisey s Bay Norilsk Nickel, Harjavalta Xstrata & Vale Sudbury Jilin Jinchuan Votorantim, Fortaleza Rönnbäcken high grade concentrate (28% Ni) represents several benefits: 1. Lower transportation cost per lb Ni 2. Lower smelting costs per lb Ni 3. High grade maximizes smelter Ni throughput 19

20 Exceptionally high-grade nickel concentrate Higher-grade than most other nickel sulphide concentrates: Most nickel concentrates are pentlandite-based and range between 5% and 15% of nickel content The significant presence of heazlewoodite Ni 3 S 2 (>70% Ni) and the lack of iron sulphides (pyrite and pyrrhotite) result in a very high grade concentrate containing between 25% to 30% Ni Source: Brook Hunt, a Wood Mackenzie Company 20

21 Local community population - current 21

22 New employment created by the Rönnbäcken project Indirect Direct Storuman Västerbotten County Sweden 22