RNC Update Conference Call True North Nickel Transaction Nickel Market Update
June 2, 2014
RNC Update Conference Call True North Nickel Transaction Nickel - - PowerPoint PPT Presentation
RNC Update Conference Call True North Nickel Transaction Nickel Market Update June 2, 2014 Disclaimer Cautionary Statement Concerning Forward-Looking Statements This presentation contains "forward-looking information" including
RNC Update Conference Call True North Nickel Transaction Nickel Market Update
June 2, 2014
www.royalnickel.com
Disclaimer
Cautionary Statement Concerning Forward-Looking Statements This presentation contains "forward-looking information" including without limitation statements relating to the completion of the transaction contemplated by the LOI, the potential of the West Raglan Project and the outlook for the nickel market. 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
closing; future prices and the supply of metals; the results of drilling; inability to raise the money necessary to incur the expenditures required to retain and advance the properties; environmental liabilities (known and unknown); general business, economic, competitive, political and social uncertainties; accidents, labour disputes and other risks of the mining industry; political instability, terrorism, insurrection or war; or delays in
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 presentation 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. Cautionary Statement Concerning LOI The LOI does not constitute a binding agreement or commitment of any nature between the parties respecting a transaction. The transaction is subject to the parties respective due diligence investigations and the entry into a Definitive Agreement on customary terms. The transaction will be subject to TSX approval. There is no assurance that the transaction will be completed as planned or at all. Information Concerning West Raglan Property: Information concerning the West Raglan property in this presentation is taken from sources, some of which are historical, that RNC believes to be reliable, but RNC has not verified the information and does not assume responsibility for such third party information. The proximity to Glencore’s Raglan Mine and Jilin Jien Nickel’s Nunavik Mine does not mean the West Raglan project will obtain similar results. West Raglan is an exploration project without any current resource estimates and there is no certainty that any such estimates will ever be established. NI 43-101 Compliance The disclosure of the technical information contained in this presentation has been approved by Alger St-Jean, P. Geo., Vice President Exploration of RNC, and a Qualified Person under NI 43-101.
1 TSX: RNX
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Summary
another step forward to become the nickel-focused leader in the Canadian base metals market
(and PGE) market about to enter a multi-year period of structural shortfall in supply
building companies and shareholder value creation, into the organization
12th . Remain on schedule for permits by year-end.
partners in each country as market reality of Indonesia ban becoming clearly understood
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TNN Transaction Overview
from a shareholder group led by Donald McInnes, Co-Chairman and CEO, and Mark O’Dea, Co-Chairman of True North Nickel
shares of True North Nickel
issuance of approximately 5.6 million RNC shares. Additionally, RNC expect to issue
$1.48, respectively
respectively
appointed as a Special Advisor to the Board of Directors
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West Raglan Rich Nickel, PGE District
prolific, high-grade, polymetallic nickel deposits and includes two operating mines
the highest of significant global nickel deposits
km from Glencore’s Raglan Mine property
largest nickel producer
cash cost operation1
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The proximity to Glencore’s Raglan Mine and Jilin Jien Nickel’s Nunavik Mine does not mean the West Raglan project will obtain similar results. West Raglan is an exploration project without any current resource estimates and there is no certainty that any such estimates will ever be established.
1 According to Q1-2014 WoodMac report
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West Raglan – Multiple Targets Outcropping Sulphide Mineralization
7 mineralized zones identified across the property
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Trend) style mineralization (large tonnage, high Cu and PGM)
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West Raglan Multiple High Grade Lens Targets
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Frontier Zone
High-grade Lenses
clusters
has five stacked mineralized target horizons
g/t PGE) sulphide lenses
modelled from BHEM and 3D magnetic inversion suggest vast potential remains above 250 metres depth
See slides 17 and 18 for drill hole details
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Donald McInnes, Mark O’Dea Joining RNC Team
Both Mark O’Dea and Donald McInnes have proven track records as company builders and creators of significant shareholder value creation
founding Kutcho Copper Corp. (formerly Western Keltic Mines Inc.) and Plutonic Power Corp., a renewable power development company with a broad portfolio of clean energy projects.
Association of British Columbia, and a Director of Pilot Gold and True Gold Mining. Mr. McInnes is also a past President and Director of the AMEBC, and past Director of the PDAC and a past Governor of the Business Council of British Columbia.
the discovery and advancement of gold, copper, uranium and nickel projects around the world. He was co-founder and CEO, of both Fronteer Gold Inc. and Aurora Energy Resources Inc., which were sold to Newmont Mining Corp. and Paladin Energy Ltd. respectively in 2011.
Gold Mining, and Director of Laurentian Goldfields.
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Creating the Nickel-focused Leader in the Canadian Base Metal Market
The proposed acquisition of True North builds on our earlier acquisition of an interest in Sudbury Platinum Corporation – leveraging combined management strengths will accelerate future growth and support development of the Dumont Nickel Project
nickel, base metals, and stainless steel materials
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25% Interest in Sudbury Platinum Corp 56% Interest in True North Nickel
Ni-Cu-PGE Sudbury Camp
Totten mine and Victoria development project
hosting high grade Ni-Cu-PGE mineralization
grade Ni-PGE intersections
market conditions
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Dumont Nickel Project Ready to Take Advantage of Improving Nickel Markets
Dumont project advancing on multiple fronts
scheduled for June 12th . Remain on schedule for permits by year-end.
multiple potential partners in each country as market reality of Indonesia ban becoming clearly understood
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Nickel – “From Worst to First”
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Nickel has been the best performing base metal in 2014
Source: Metalprices.com
0% 5% 10% 15% 20% 25% 30% 35% 40% 45% Nickel Tin Aluminum Zinc Lead Copper
LME Base Metals Prices 2014 YTD Change
(as of May 28)
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Nickel – Ore Prices Have Moved Sharply Higher
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Source: Ferroalloynet.com Limited
10 20 30 40 50 60 70 80 90 100 110 120 130 140 US$/wmt FOB
Nickel Ore Prices (2014 YTD 28-May)
Laterite 1.8% Ni Ore (12-18% Fe) Until Jan 12: Indonesia Post Jan 12: Philippines Laterite 1.5% Ni Ore (Philippines 25-30% Fe)
The price of nickel ore in China has increased by more than 5X since 2013 lows and more than double since our last update less than 2 months ago
RNC Jan. 21 market update RNC Apr. 14 market update
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Nickel Ore Stockpiles Continue to Decline
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Source: Ferroalloynet.com Limited
Portside nickel ore stockpiles in China from Indonesia have been declining since February 21st at more than 400kt per week. Increased stockpiles of Philippines
Source: Ferroalloynet.com Limited
17.0 17.5 17.4 17.6 18.1 18.9 18.3 17.6 16.9 16.6 16.2 15.1 14.7 14.4 14.3 14.0 13.5 13.2 13.1 12.9 8.4 8.3 7.8 7.4 7.2 7.2 6.4 6.3 6.5 6.0 5.4 5.5 5.6 5.6 5.5 5.3 5.8 6.1 6.1 6.5 5 10 15 20 25 27-Dec-13 3-Jan-14 10-Jan-14 17-Jan-14 24-Jan-14 14-Feb-14 21-Feb-14 28-Feb-14 7-Mar-14 14-Mar-14 21-Mar-14 28-Mar-14 4-Apr-14 11-Apr-14 18-Apr-14 25-Apr-14 4-May-14 9-May-14 16-May-14 23-May-14
Chinese Nickel Ore Stockpiles at Major Ports
Total (Mt)
Philippines Indonesia
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Philippines Providing Little Additional Ore to Market
6.1 3.1 0.9 0.3
1 2 3 4 5 6 7 Jan Feb Mar Apr
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Source: GTIS
Imports of nickel ore from Indonesia into China are drying up while Philippines providing little additional ore to China
Philippines Nickel Ore Exports to China YTD April (Mt) 2014 Indonesia Nickel Ore Exports to China (Mt) 4.6 4.7
1 2 3 4 5 6 7 YTD Apr 2013 YTD Apr 2014
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Nickel Market Summary
LME prices higher than current levels for many operations to break even
closures in China
will once again have to rise to force demand in line with available supply
year nickel shortages as early as mid-2015 despite record LME inventories of 260kt and
2020 in an optimistic supply scenario and most likely no more than 1% growth in a more conservative scenario
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APPENDIX
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West Raglan Property History
geological model
Mine property 40km east, along strike
refined by 2013 analysis supports True North’s interpretations and proves continuity of lenses
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True North West Raglan Frontier Zone Drill Results
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Source: True North Nickel
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True North West Raglan Frontier Zone Drill Results (Cont’d)
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Source: True North Nickel
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Corporate Overview
19 TSX: RNX
Share Structure:
94.4 million
8.9 million
2.1 million
7.0 million
112.4 million
~9%
RAB Special Situations (Master) Fund Limited: ~17% Balance Sheet Highlights2:
C$9.7 million
C$2.1 million
C$10.2 million
C$66 million
1. Shares outstanding, fully diluted shares outstanding and shareholdings as at May 8, 2014 2. Balance sheet highlights as at March 31, 2014; market capitalization at May 8, 2014