Nickel & the Battery Market 1 Argus Metals Week NiCoMo 2019 - PowerPoint PPT Presentation

BRAZI AZILIAN AN N NICKEL Nickel & the Battery Market 1 Argus Metals Week NiCoMo 2019

2 We’re in the Midst of Global Battery Arms Race ! BRAZI AZILIAN AN N NICKEL Argus Metals Week NiCoMo 2019

3 Nickel Market Supply Chain - 2018 BRAZI AZILIAN AN N NICKEL Fe Ni 400 kt Class 2 NPI Total Supply 2.185 M t Laterite Stainless 720 kt Total demand 2.3 M t Supply Steel 1.46 M t 1.68 Mt Intermediates 315 kt Ni Powders & Briquettes ~ 350 kt Matte Alloys, Sulphide plating etc ~ 500 kt Supply Ni Metal 725 kt Li Batteries ~ 120 kt NiSO 4 Other 15 kt Stocks depleted by 191 kt in 2018 to 219 kt Argus Metals Week NiCoMo 2019 Source : NorNickel, Roskill, Wood Mackenzie, WBMS, BRN

4 Forecast Nickel Market Supply Chain 2025 BRAZI AZILIAN AN N NICKEL Fe Ni 470 kt Class 2 Stainless NPI Steel Total demand 3.15 M t Laterite 2.07 Mt 960 kt Total Supply 3 M t Supply 2 M t Intermediates 600 kt Ni Powders Alloys, & Briquettes plating etc ~ 500 kt ~ 580 kt Other 20 kt Matte Sulphide Ni Metal Supply EV NiSO 4 Batteries 970 kt ~ 450 kt Argus Metals Week NiCoMo 2019 Source : NorNickel, Roskill, Wood Mackenzie, UBS, Mckinsey, BRN

5 Forecast Nickel Market Supply Chain 2030 BRAZI AZILIAN AN N NICKEL Probable Projects into Production Ni Metal Refinery capacity = 3.45 Mt Fe Ni 500 kt Stainless Steel Class 2 2.28 Mt NPI Total demand 4.16 M t Laterite 900 kt Total Supply 3.2 M t Supply 2.28 M t Intermediates 850 kt Alloys, Ni Powders & plating etc Briquettes ~ 660 kt ~ 500 kt Other 20 kt Sulphide Matte Ni Metal EV Supply Batteries 920 k t NiSO 4 ~ 1.2 M t Argus Metals Week NiCoMo 2019 Source : NorNickel, Roskill, Wood Mackenzie, UBS, Mckinsey, BRN

6 Project Status 2030 BRAZI AZILIAN AN N NICKEL 301 23% 234 18% 195 15% 159 12.5% 103 8% 90 7% 71 5.5% 65 5% 41 3% 30 2% Source : Wood Mackenzie, BRN Argus Metals Week NiCoMo 2019

7 Project Status 2030 Upside Case BRAZI AZILIAN AN N NICKEL Source : Wood Mackenzie, BRN Argus Metals Week NiCoMo 2019

8 Forecast Nickel Market Supply Chain 2030 BRAZI AZILIAN AN N NICKEL Possible Projects into Production Fe Ni 500 k t Stainless Steel Class 2 2.28 Mt NPI Laterite Total demand 4.16 M t 1.15 M t Supply Total Supply 3.9 M t 2.8 M t Intermediates 1.15 M t Alloys, Ni Powders & plating etc Briquettes ~ 660 kt ~ 500 kt Other 20 kt Matte Ni Metal Sulphide EV Supply Batteries NiSO 4 1.1 M t ~ 1.2 M t Argus Metals Week NiCoMo 2019 Source : NorNickel, Roskill, Wood Mackenzie, UBS, Mckinsey, BRN

9 EV & Incremental Nickel Demand Forecasts BRAZI AZILIAN AN N NICKEL Note: Evs are passenger vehicles only & includes PHEV & BEV; PHEV battery pack 12kWh, BEV in 2020 40kWh, 2025 56kWh and 2030 65kWh. NMC 622 in 2025 and 811 in 2030. Source : Consensus AABCE 2019 Strasbourg

10 Capital intensity and Incentive Nickel Price BRAZI AZILIAN AN N NICKEL Typical Capital Intensity Nickel Price req'd for 30% Project Type Capacity US $/lb annual IRR (pre tax) kt pa Ni US $/lb Small Sulphides (Aus) 5 to 8 5 to 8 > 6.30 Large low grade S (Can) 20 to 50 13 to 26 >10.00 NPI China 10-60 2.3 to 6 current NPI Indonesia 10-60 3 to 7 current FeNi 20-60 15 to 36 > 6.80 Chinese HPAL Indonesia 40-50 6 to 7 ? HPAL 20-60 35 to 70+ > 8.6 Heap Leach 10-40 8 to 16 > 5.00 PNP 25 8.4 5.02 SPOT Feb 25 th = US $ 5.94 /lb (US $ 13,100 /t) Argus Metals Week NiCoMo 2019

11 Nickel & Cobalt Price BRAZI AZILIAN AN N NICKEL SPOT Feb 25 th = US $ 5.94 Argus Metals Week NiCoMo 2019 Source : LME

12 Capital intensity and Incentive Nickel Price BRAZI AZILIAN AN N NICKEL Typical Capital Intensity Nickel Price req'd for 30% Project Type Capacity US $/lb annual IRR kt pa Ni US $/lb Small Sulphides (Aus) 5 to 8 5 to 8 > 6.30 Large low grade S (Can) 20 to 50 13 to 26 >10.00 NPI China 10-60 2.3 to 6 current NPI Indonesia 10-60 3 to 7 current FeNi 20-60 15 to 36 > 6.80 HPAL Indonesia 40-50 6 to 7 ? HPAL 20-60 35 to 70+ > 8.6 Heap Leach 10-40 8 to 16 > 5.00 PNP 25 8.4 5.02 Argus Metals Week NiCoMo 2019

13 OEM Investment > US $ 300 Billion BRAZI AZILIAN AN N NICKEL Argus Metals Week NiCoMo 2019 Source : Reuters, Avicenne Energy

14 Why Heap Leaching ? BRAZI AZILIAN AN N NICKEL • Lowest capital cost of the hydromet processes • First quartile operating costs • Increased resource utilization • Simple flexible process, shorter ramp up than HPAL • Lower energy intensity • All residues are dry – no tailings dam Argus Metals Week NiCoMo 2019

15 BRAZI AZILIAN AN N NICKEL PNP Project NPV 101 IRR 1 Sensitivity Ni Price Co Price Analysis (US$/lb) (US$/lb) (US$M) (%) Base Case 7.0 18.0 1,140 53 Low 4.5 12.0 247 21 CE LT 2 8.25 26.09 1,599 71 High 10.0 30.0 2,264 92 1 Pre-Tax 5 Average of first 10 years 2 Consensus Economics Long-Term 6 Analysts’ long-term consensus 3 Total Project incl. working capital allowance Ni price = US$ 7.89/lb 4 After accounting for refining charges and by product credits Co price = US$ 21.35/lb Argus Metals Week NiCoMo 2019 All figures on this slide are estimates and are based on Brazilian Nickel’s cash flow model projections

16 Nickel Laterite Hydromet Projects & Products BRAZI AZILIAN AN N NICKEL Piauí Nickel Project Demonstration Plant Argus Metals Week NiCoMo 2019

17 Nickel Laterite Hydromet Products BRAZI AZILIAN AN N NICKEL From the buyers’ perspectives Product Advantages Disadvantages Nickel metal Purity, but… … not all forms suitable LME price Low transport cost Dissolution has some cost Nickel sulphate Purity, yes but… … purity risk Price premium Higher transport cost Readily soluble NHP Requires purification Price discount Low transport cost Readily soluble Argus Metals Week NiCoMo 2019

18 BRN’s Piauí Nickel Project BRAZI AZILIAN AN N NICKEL CO 2 Footprint Important! On site sulphuric acid plant produces all of the power necessary and is carbon free. Simple heap leach technology is less energy intensive than many nickel production routes. ∴ excess carbon free energy is sold to the Brazilian national grid. CO 2 capture in the impurity removal circuit (uses limestone as a precipitant) possible in the future Nickel Hydroxide intermediates as final product ~50 % Ni (dry basis) Separate cobalt product could also be a Ni/Co product & somewhat bespoke PNP NHP 50% Ni Argus Metals Week NiCoMo 2019

19 Key Take-Aways BRAZI AZILIAN AN N NICKEL Nickel demand for Li-ion batteries by 2030 could be 1.2 Mt pa Supply currently is unlikely to be able to meet that demand unless More funding becomes available Significant increase in Ni prices to attract investors and enable projects with higher operating costs Battery nickel precursors such as BRN’s NHP can help supply the new demand At lower cost to the miner and the customer With a lower overall carbon footprint Please remember that mining projects often take at least 10 years to production, more from early exploration Argus Metals Week NiCoMo 2019

20 BRAZI AZILIAN AN N NICKEL BRAZILIAN AN NI NICKEL Thank y you Nickel and Cobalt Made Easy 20 Argus Metals Week NiCoMo 2019 AABC Europe 2019