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

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Nickel & the Battery Market

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Argus Metals Week NiCoMo 2019

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Argus Metals Week NiCoMo 2019

We’re in the Midst of Global Battery Arms Race !

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Nickel Market Supply Chain - 2018

Source : NorNickel, Roskill, Wood Mackenzie, WBMS, BRN

Stainless Steel 1.68 Mt Matte

Intermediates 315 kt

Laterite Supply 1.46 M t Sulphide Supply 725 kt

Alloys, plating etc ~ 500 kt

Li Batteries ~ 120 kt Other 15 kt

Ni Metal

Ni Powders & Briquettes ~ 350 kt

Total Supply 2.185 M t Total demand 2.3 M t

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Argus Metals Week NiCoMo 2019 Fe Ni 400 kt NPI 720 kt Class 2

NiSO4

Stocks depleted by 191 kt in 2018 to 219 kt

BRAZI AZILIAN AN N NICKEL Stainless Steel 2.07 Mt

Forecast Nickel Market Supply Chain 2025

Matte Fe Ni 470 kt NPI 960 kt Laterite Supply 2 M t Sulphide Supply 970 kt

Alloys, plating etc ~ 580 kt EV Batteries ~ 450 kt

Other 20 kt

Ni Metal Class 2 Total Supply 3 M t Total demand 3.15 M t

Ni Powders & Briquettes ~ 500 kt

4 Source : NorNickel, Roskill, Wood Mackenzie, UBS, Mckinsey, BRN

Argus Metals Week NiCoMo 2019 NiSO4

Intermediates

600 kt

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Forecast Nickel Market Supply Chain 2030

Matte

Intermediates

850 kt

Fe Ni 500 kt NPI 900 kt Laterite Supply 2.28 M t Sulphide Supply 920 k t Alloys, plating etc ~ 660 kt EV Batteries ~ 1.2 M t

Other 20 kt

Ni Metal Class 2 Total Supply 3.2 M t Total demand 4.16 M t

Ni Powders & Briquettes ~ 500 kt

5 Source : NorNickel, Roskill, Wood Mackenzie, UBS, Mckinsey, BRN

Argus Metals Week NiCoMo 2019 NiSO4

Probable Projects into Production

Ni Metal Refinery capacity = 3.45 Mt

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Project Status 2030

Source : Wood Mackenzie, BRN

Argus Metals Week NiCoMo 2019

301 23% 234 18% 195 15% 159 12.5% 103 8% 90 7% 71 5.5% 65 5% 41 3% 30 2%

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Project Status 2030 Upside Case

Source : Wood Mackenzie, BRN

Argus Metals Week NiCoMo 2019

BRAZI AZILIAN AN N NICKEL Stainless Steel 2.28 Mt

Forecast Nickel Market Supply Chain 2030

Matte

Intermediates

1.15 M t

Fe Ni 500 k t NPI 1.15 M t Laterite Supply 2.8 M t Sulphide Supply 1.1 M t Alloys, plating etc ~ 660 kt EV Batteries ~ 1.2 M t

Other 20 kt

Ni Metal Class 2 Total Supply 3.9 M t Total demand 4.16 M t

Ni Powders & Briquettes ~ 500 kt

8 Source : NorNickel, Roskill, Wood Mackenzie, UBS, Mckinsey, BRN

Argus Metals Week NiCoMo 2019 NiSO4

Possible Projects into Production

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EV & Incremental Nickel Demand Forecasts

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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

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Argus Metals Week NiCoMo 2019

Project Type Typical Capacity kt pa Capital Intensity US $/lb annual Ni Nickel Price req'd for 30% IRR (pre tax) 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 25th = US $ 5.94 /lb (US $ 13,100 /t)

Capital intensity and Incentive Nickel Price

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Nickel & Cobalt Price

Source : LME

Argus Metals Week NiCoMo 2019

SPOT Feb 25th = US $ 5.94

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BRAZI AZILIAN AN N NICKEL Argus Metals Week NiCoMo 2019

Project Type Typical Capacity kt pa Capital Intensity US $/lb annual Ni Nickel Price req'd for 30% IRR 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

Capital intensity and Incentive Nickel Price

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OEM Investment > US $ 300 Billion

Argus Metals Week NiCoMo 2019

Source : Reuters, Avicenne Energy 13

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Why Heap Leaching ?

• 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

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PNP Project

All figures on this slide are estimates and are based on Brazilian Nickel’s cash flow model projections

1 Pre-Tax 2 Consensus Economics Long-Term 3 Total Project incl. working capital allowance 4 After accounting for refining charges and by product credits 5 Average of first 10 years 6 Analysts’ long-term consensus

Ni price = US$ 7.89/lb Co price = US$ 21.35/lb

Argus Metals Week NiCoMo 2019

Sensitivity Analysis Ni Price (US$/lb) Co Price (US$/lb) NPV101 (US$M) IRR1 (%) Base Case 7.0 18.0 1,140 53 Low 4.5 12.0 247 21 CE LT2 8.25 26.09 1,599 71 High 10.0 30.0 2,264 92

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Nickel Laterite Hydromet Projects & Products

Piauí Nickel Project Demonstration Plant

Argus Metals Week NiCoMo 2019

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Nickel Laterite Hydromet Products

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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

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BRN’s Piauí Nickel Project

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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. CO2 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

CO2 Footprint Important!

PNP NHP 50% Ni Argus Metals Week NiCoMo 2019

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Key Take-Aways

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

• perating 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

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Please remember that mining projects often take at least 10 years to production, more from early exploration Argus Metals Week NiCoMo 2019

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Thank y you

AABC Europe 2019

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Nickel and Cobalt

Made Easy

Argus Metals Week NiCoMo 2019