dumont nickel cobalt project

Dumont Nickel-Cobalt Project Feasibility Study Update Focused on - PowerPoint PPT Presentation

RNC MINERALS TSX : RNX Dumont Nickel-Cobalt Project Feasibility Study Update Focused on Value Creation May 31, 2019 Disclaimer Cautionary Statements Concerning Forward-Looking Statements This presentation contains "forward-looking

  1. RNC MINERALS TSX : RNX Dumont Nickel-Cobalt Project Feasibility Study Update Focused on Value Creation May 31, 2019

  2. Disclaimer Cautionary Statements Concerning Forward-Looking Statements This presentation contains "forward-looking information" including without limitation statements relating to mineral reserve estimates, mineral resource estimates, realization of mineral reserve and resource estimates, capital and operating cost estimates, project and life of mine estimates, construction of the mine and related infrastructure, the timing and amount of future production, costs of production, success of mining operations, ability to obtain permitting by the time targeted, size and ranking of project upon achieving production, economic return estimates and potential upside and alternatives. Readers should not place undue reliance on forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of RNC to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. The feasibility study results are estimates only and are based on a number of assumptions, any of which, if incorrect, could materially change the projected outcome. Even with the completion of the feasibility study, there are no assurances that Dumont will be placed into production. Factors that could affect the outcome include, among others: the actual results of development activities; project delays; inability to raise the funds necessary to complete development; general business, economic, competitive, political and social uncertainties; future prices of metals; availability of alternative nickel sources or substitutes; actual nickel recovery; conclusions of economic evaluations; changes in project parameters as plans continue to be refined; accidents, labour disputes and other risks of the mining industry; political instability, terrorism, insurrection or war; delays in obtaining governmental approvals, necessary permitting or in the completion of development or construction activities. For a more detailed discussion of such risks and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements, refer to RNC's filings with Canadian securities regulators available on SEDAR at www.sedar.com. Although RNC has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. Forward-looking statements contained herein are made as of the date of this news release and RNC disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events or results or otherwise, except as required by applicable securities laws NI-43-101 Compliance The technical information with respect to the Dumont project in this presentation has been prepared in accordance with Canadian regulatory requirements by, or under the supervision of, Paul Staples, P.Eng., of Ausenco, Chelsey Protulipac P.Geo., of SRK Consulting (Canada) Inc., Vu Tran, P.Eng. of Wood PLC and David P. Penswick, Eng., all of whom are independent Qualified Persons as set out in National Instrument 43-101 Standards of Disclosure for Mineral Projects ("NI 43-101"). The Mineral Resource estimate set out in this presentation was classified according to the CIM Definition Standards for Mineral Resources and Mineral Reserves (November 2010) by Chelsey Protulipac P.Geo., of SRK Consulting (Canada) Inc. The Mineral Reserve estimate set out in this news release was classified according to the CIM Definition Standards for Mineral Resources and Mineral Reserves (November 2010) by David Penswick, P.Eng. Readers are advised that Mineral Resources not included in Mineral Reserves do not demonstrate economic viability. Mineral Resource estimates do not account for mineability, selectivity, mining loss and dilution. These Mineral Resource estimates include Inferred Mineral Resources that are normally considered too speculative geologically to have economic considerations applied to them that would enable them to be categorized as mineral reserves. There is no certainty that Inferred Mineral Resources will be converted to Measured and Indicated categories through further drilling, or into Mineral Reserves, once economic considerations are applied. Based on the resource estimate, a standard methodology for pit limit analysis, mining sequence and cut-off grade optimization, including application of mining dilution, process recovery, economic criteria and physical mine and plant operating constraints has been followed to design the open pit mine and to determine the mineral reserve estimate for the deposit as summarized in the Mineral Reserve table. The full feasibility study, prepared as an NI 43- 101 compliant technical report, will be filed under RNC’s profile on SEDAR at w ww.sedar.com within 45 days. 1

  3. Dumont Nickel-Cobalt Project One of World’s Largest Battery Metals Projects Dumont is one of largest battery metals projects by annual output value LOM Average Annual Production Estimated Value (US$M) 800 Annual Production value (US$M) 700 Nickel Value Cobalt Value Graphite Value Lithium Carbonate Value 600 500 400 300 200 100 0 RNC Pilbara CleanTeq Nemaska Bacanora Syrah Lithium Ecobalt Mason Minerals Lithium Resources Americas Graphite Project 28% 100% 100% 100% 70% - 100% 62.5% 100% 100% Ownership 100% 1 Source: Company Filings, Reuters | Metal Price: $7.75/lb Ni, $25.00/lb Co, $12,000/t Li 2 Co 3 , $1,000/t graphite | (1) Bacanora has 100% interest in the La Ventana concession and a 70% interest in Mexilit and Megalit 2 www.royalnickel.com

  4. Dumont Nickel-Cobalt Project 2 nd Largest Nickel Reserve Dumont remains the 2 nd largest nickel reserve in the world and one of the few large nickel projects in a low risk jurisdiction. Total Contained Nickel Mineral 6.4 Reserves (Mt) – By Deposit (Top Six Deposits and Selected Others) High Risk Jurisdiction Sulphide Laterite 2.8 2.4 1.7 1.7 1.7 0.9 0.8 0.1 0.7 Taimyr Dumont Halmahera Onca Puma Jinchuan Soroako BHP (total) Sunrise Voisey's Bay Western Penninsula (Weda Bay) (PT Inco) (Clean TeQ) Areas (total) (Norilsk) Source: Company reports and Wood Mackenzie Ltd. (May 2019)

  5. Dumont Nickel-Cobalt Project A Top 5 Nickel Sulphide Operation Dumont is expected to be among the top 5 nickel sulphide operations Largest Nickel Sulphide Operations (RNC Phase II -105ktpd vs 2018 production for other projects) (kt/year) 217 50 17 74 51 39 37 36 33 Norilsk Jinchuan Vale Dumont Voisey's Raglan Mt. Keith Sudbury (Phase I & II) Bay 1. Dumont production based on phase II expansion in year 7 . 4

  6. Dumont Nickel-Cobalt Project One of Canada’s Largest Base Metal Mines Dumont will be one of the largest base metal mines in Canada Largest Canadian Base Metal Mines Annual Production (Ni-Eq. kt) 1 70 Ni Cu (NiEq) Co (NiEq) Other (NiEq) 59 60 57 50 50 50 40 34 31 30 20 10 0 Highland Valley Voisey's Bay Dumont Raglan Mt. Milligan Red Chris 1. Based on RNC analysis. All mines based on reported 2018 production with exception of Dumont (Feasibility Study-May 2019) expected Phase I and Phase II life of mine nickel production and Mt. Milligan and Red Chris where the average of 2017 and 2018 production was used. Ni-eq., Cu-eq production calculated using recent prices as of May 28, 2019: Ni: $5.49/lb, Cu: $2.69/lb, Mo: $12.46/lb, Co: PGM (average): $1,069/oz, Au: $1,278/oz, Ag: $14.33/oz . 5

  7. Dumont Nickel-Cobalt Project Dumont Implied Value - Peer Positioning Implied Valuation for RNC’s 28% Dumont Nickel Pure Play Peer Group – Selected Companies 1.00x Interest (based on 0.90x US$920 NPV 8% ) Late Stage Development / Production 0.80x US$205M 0.70x 0.60x P/NAV US$145M 0.50x US$111M 0.40x 0.80x US$84M 0.30x 0.56x ? 0.43x 0.20x US$84 – 205M 0.33x 0.10x C$112 – 273M 0.00x C$0.22-0.55/ Western Areas Panoramic Nickel Mines Clean TeQ Dumont share Limited Resources Limited Holdings Limited Limited Ore Type Sulphide Sulphide Laterite Laterite Sulphide Reserve (kt Ni) 278 101 n/a 827 2,759 Annual Production 21 11 10 19 39 (kt Ni) Source: Company Filings, Capital IQ 6

  8. Dumont Nickel-Cobalt Project Structurally Low Cost Project in Excellent Jurisdiction 7

  9. Dumont Nickel-Cobalt Project Technically & Economically Sound Project Dumont feasibility study demonstrates robust financial returns. Highlights  Strong project economics $920M after-tax NPV 8%  15.4% after tax IRR • Large scale, Long Life 33ktpa nickel ramping up to 50ktpa nickel by Year 8 • 1.2Mt (2.6B lbs) Ni produced over LOM • 30 Year Life • Structurally low-cost operation, Phase I C1 cash costs of $2.98/lb ($6,570/t). • low 2 nd quartile of cash cost curve Life-of-mine C1 cash costs2 of $3.22/lb ($7,100/t Ni) • Life-of-mine AISC of $3.80/lb ($8,380/t) of payable nickel  Significant earnings and free cash flow Annual EBITDA $303M in Phase 1, ramping up to generation $425M in Phase 2; LOM $340M  $201M/year operating cash flow over Life-of-Mine Source: RNC news release dated May 30, 2019 8

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