Company presentation 10th Fennoscandian Exploration and Mining. Levi, 5 November 2015

Transcription

1 Company presentation 10th Fennoscandian Exploration and Mining Levi, 5 November 2015 Exploration and production of high-end minerals and metals Nordic Mining ASA N-0250 Oslo Norway Tel Fax Org. no post@nordicmining.com

2 Disclaimer This document has been used by Nordic Mining during an oral presentation. Therefore, this document is incomplete without the oral explanations, comments and supporting instruments that were submitted during the referred presentation. To the extent permitted by law, no representation or warranty is given, express or implied, as to the accuracy of the information contained in this document. Some of the statements made in this document contain forward-looking statements. To the extent permitted by law, no representation or warranty is given, and nothing in this document or any other information made available during the oral presentation should be relied upon as a promise or representation as to the future condition of Nordic Mining s business. 2

3 Minerals for a sustainable future Platinum, Palladium Titanium - natural rutile High Purity Quartz Seabed minerals exploration Lithium Developing high-value assets in the Nordic Region 3

4 Pt Lighter aircrafts Ti Clean air Pd Renewable energy Si Electric cars Li 4

5 5

6 Board of Directors and Management Board of Directors Management Tarmo Tuominen, Chairman Chief Supply Chain Officer in Nordkalk, Finland. Geologist with broad mining experience Ivar S. Fossum, CEO 20 years experience from management positions in Hydro (oil/gas and fertilizers) and FMC Technologies mmmmm Kjell Roland, Deputy chairman CEO of Norfund, Norway Mari Thjømøe, Board member Extensive executive and board experience from oil and gas, finance and investment management (e.g. Statoil, Hydro and KLP) Hilde Myrberg, Board member Extensive executive and board experience from oil and gas, power and consumer industries (e.g. Hydro and Orkla) Lars K. Grøndahl, CFO More than 20 years experience from industrial management positions in i.a. Aker, Scancem Group and HeidelbergCement Mona Schanche, Exploration Manager Resource geologist from the University of Science and Technology in Trondheim. Previous experience as project geologist in Titania (Kronos Group) Thomas B. Addison, MD Nordic Rutile AS Mining engineer from the University of Science and Technology in Trondheim. Broad experience from Franzefoss Minerals, Sibelco, and SNSK. Tore Viana-Rønningen, Board member VP in Dag Dvergsten AS, Norway. Previous experience from Barclays Natural Resource Investments mmm Differentiated mining and industrial experience combined with extensive network 6

7 Nordic Mining Group NORDIC MINING ASA NORDIC RUTILE AS 100% NORDIC QUARTZ AS 100% KELIBER OY 25% NORDIC OCEAN RESOURCES AS 80% 7

8 Engebø One of the world s largest rutile deposits 8

9 Engebø One of the world s largest rutile JORC resource deposits of 154M 3.77% TiO 2 Historical estimate of 383M 3.96% TiO 2 9

10 17 April 2015 Approved industrial area plan and discharge permit by the Norwegian government 10

11 Well-defined deposit Total of 50 exploration drill holes JORC Resource* Resource class JORC Mill tonnes TiO 2 3% cut-off Indicated Inferred Total drill holes (15,000 meters) 1,129 surface samples > TiO2 analysis Block model - ordinary kriging Planned drilling program of approx. 6,000 meters Open pit mining for years, years underground mining Open pit strip ratio of 0.45:1 (waste/ore) Considerable JORC compliant resource estimate with upside potential from additional drilling Note (*): Refer to Scoping Study by Wheeler and Dowdell for resource statements 11

12 Rutile (%) Engebø is among the largest rutile deposits in the world Rutile projects grade and target production 4,50% 4,00% 3,50% 3,00% 2,50% Engebø Cerro Blanco Murray Basin 2,00% 1,50% 1,00% 0,50% 0,00% -0,50% -1,00% Sierra Rutile Coburn Donald Ranobe Kwale Planning Moma Construction Grande Cote Production Production (Ktpa) Size of bubble indicates resource size Source: Company websites 12

13 The highest rutile grade and lowest impurity content Rutile grade for current feedstock producers and planned projects Engebø 3.77% Murray Basin - Iluka 2.32% Cerro Blanco 2.10% Akonolinga (Years 1-6) Sierra Rutile 1.42% 1.66% Project Producer Akonolinga 1.15% Kwale Snapper 0.65% 0.59% Donald 0.37% Gingko 0.35% Cyclone Perth Basin - Iluka 0.29% 0.27% ppm 100 Uranium in Ti feedstocks ppm 1000 Thorium in Ti feedstocks Fairbreeze Jacinth - Ambrosia 0.22% 0.20% 10 Max Max Namakwa Mindarie Zircon Stradbroke 0.20% 0.16% 0.13% Ilmenite Sulphate slag Chloride slag Synthetic rutile Rutile 0.84 Engebø rutile Min Ilmenite Sulphate slag Chloride Synthetic slag rutile Rutile 0.21 Engebø rutile Min High grade ore with low impurities brings processing benefits and premium pricing Source: Company websites, Production of titanium dioxide (2007) by Fahli and Martin-Matarranza 13

14 Why is rutile an attractive mineral? Has unique opacity and reflection characteristics Is an environmentally friendly pigment component Gives no reactions from the human body Effective reflection of UV radiation Can be prosessed to a strong, light and non-corrosive metal 14

15 Garnet, by-product with benefits for the environment Preferred sand-blasting medium, replacing sand with contents of free silica Garnet is used as the primary cutting medium in water-jet cutting machines Annual global production of garnet is approximately 2 million tonnes Broad prices range depending of qualities Water-jet quality is typically sold for USD 445 per tonne delivered in Norway MOU signed with a reputable international industrial minerals producer 15

16 The TiO 2 value chain from mine to consumer Mining Processing End use Rutile is mined from ore or mineral sands producing a rutile concentrate Rutile is processed through chlorination in reactors which produces TiO 2 pigment Optional metallurgical process to produce titanium and related alloys Majority of TiO 2 feedstock is used in production of pigment for paints, plastics and paper Approximately 5% is used for titanium Ilmenite/slag ~80% Paint, plastics and paper ~90% Hard rock Rutile ~15% Aircraft & Medical ~5% Mineral sands Processing Leucoxene ~5% Welding ~6% Natural rutile implies improved production and less waste vs ilmenite and other feedstock: Lowest consumption of ore Lowest consumption of chloride Less waste Lower production costs TiO 2 ; small part of total cost for end-use manufacturers with few viable substitutes 16

17 25 % Long 20 % sea freights underpin 25 attractiveness % of new European supply 22% 25 % 15 % 20 % 25 % 20 % 10 % 15 % 8% 20 % 15 % 10 % 5 % 0 % 5 % 0 % 25 % 20 % 5% 15 % US 10 % 5 % 0 % Canada 25 % 20 % 15 % 10 % 5 % 0 % 3% Sierra Leone 25 % 15 % 5% 20 % 10 % Norway 15 % Ukraine 5 % 10 % 0 % 5 % 0 % 20% 25 % 20 % 15 % 10 % 5% 5 % India 0 % 8% China 5% 25 % 20 % Vietnam 15 % 19% 25 % 10 % 10 % 20 % 5 % 5 % 15 % 10 % 0 % South Africa 0 % Australia Rutile producer 5 % Ilmenite producer Ilmenite & rutile producer 0 % Cylinder indicates % of world TiO Zimbabwe 2 feedstock production European feedstock consumption is 30% of world total; production at approx. 13% Source: TZMI 17

18 European pigment majors will be future customers Regional, stable supply brings customer benefits Substantial freight reduction compared to existing supply Plant-to-plant shipment Simple logistics improve working capital, storage and planning Several European customers can each take Engebø s annual production Large pigment plants for high grade feedstock Company Plant location Country Huntsman Tioxide World s largest rutile producers Greatham UK *) assumed production from Engebø Cristal Global Stallinborough UK Kronos Gent / Leverkusen Belgium / Germany Tronox Rotterdam Netherlands Significant supply deficit in Europe makes regional rutile production attractive 18

19 Efficient and area-tight concept, low transportation costs 19

20 Preliminary key figures Engebø key figures Life of mine Open pit production Underground CAPEX NPV after 8% WACC 50 years years years USD 300 million USD 466 million IRR after tax 20.7 % Payback time (CAPEX/EBITDA) Break-even price for rutile (IRR = 0) 4.5 years USD 370 per tonne Long project lifetime - short payback time Note (*): Assumptions and estimates are based on preliminary internal assessments. 20

21 Preliminary capital cost and OPEX estimates* Capex estimate USDm OPEX estimates (open pit) USD/t rutile Royalties and land acquisition 13 Infrastructure and civil 83 Mine 17 Crushing facility 22 Wet process package 107 Dry process package 55 Laboratory and misc. 4 Total 300 Ex. by-product credit 550 Incl. by-product credit 185 Peer comparison Sierra Rutile ** Incl. by-product credit USD/t rutile Incl. by-product credit 2015est The preliminary capital cost estimate includes approx. 20% contingency Capex review will be part of the continued project planning process Total construction time of 24 months Deep sea key already in place, ready to use Based on comparable operations in Norway and internationally By-product credits mainly from garnet which is produced without additional costs Simple ore and product logistics reduce investments, OPEX and overrun risk Note (*): Assumptions and estimates are based on preliminary internal assessments. Note (**): Company reports 21

22 Positive market outlook - robust project financials* USD/tonne q11 1q12 1q13 1q14 1q15E Rutile price NM Base case LT Price estimate NM Forecast Rutile price scenarios Low Base case RBC LT-est. Key figures USD 800 USD 1,000 USD 1,250 8% (USD million) IRR 16.2% 20.7% 25.2% Market trends and long project lifetime are favourable for project financials Note (*): Assumptions and estimates are based on preliminary internal assessments. 22

23 Project development tentative timeline Permits Resource classification Process tests & optimalisation Water & power supply Eng. & cost review Pre-feasibility Study Pilot production Basic engineering Market/offtake Def. feasibility study(dfs) Project financing Investment decision Estimated pre-investment expenditures of USD million 23

24 Successful Rights Issue of NOK 35 million in October 8.30 AM CET / 27-Oct-2015 / Nordic Mining ASA (OAX:NOM) Substantial oversubscription of the Rights Issue Strong interest in Nordic Mining s Rights Issue secures progress of value increasing activities related to the Engebø rutile project. The proceeds will be used for important development activities Continuous focus on evaluation of sources for further financing, incl. partnership models 24

25 Project development value increasing activities Resource classification Core drilling approx. 6,000 meters in the open pit zone New resource estimate according to JORC Process tests and optimization Further process tests and optimisation of flowsheet Target: Increased rutile recovery, cost-effective process solutions Reduce or avoid flotation? Engineering and cost analysis Updated estimates Impact studies and applications for supply of process water and hydropower 25

26 Nordic Mining Group NORDIC MINING ASA NORDIC RUTILE AS 100% NORDIC QUARTZ AS 100% KELIBER OY 25% NORDIC OCEAN RESOURCES AS 80% 26

27 Nordic Quartz (100%) - Development in High Purity Quartz Project highlights Key features Estimate of 3.45 million tonnes of quartz, under exploration* Mine life up to 60 years (30 years in base case) NPV of USD 60 8% WACC after tax Estimated production of 5,000 tonnes of HPQ pa Ultra-high quality demonstrated for advanced applications/markets Outcropping hydrothermal quartz deposit Low in critical elements as Ti, Al, Fe, P, Na, K, Li, B Ideally situated, close to infrastructure and port Small-scale mining operation; 20 30,000 tonnes ore per year Bringing a new long term supplier to the HPQ industry Note (*): Refer to the 2012 Scoping Study by Dorfner Anzaplan for resource statements 27

28 Core drilling in October will give qualified resource estimate 6 holes drilled of a total of 600 meters BH1 BH2 BH3 a, b, c BH4 Quality Total impurities (ppm) SiO 2 % Nordic Quartz IOTA Std IOTA IOTA Process tests documents ultra-high quality 28

29 Nordic Mining Group NORDIC MINING ASA NORDIC RUTILE AS 100% NORDIC QUARTZ AS 100% KELIBER OY 25% NORDIC OCEAN RESOURCES AS 80% 29

30 (25%) Moving forward in high-grade lithium Project highlights Key features Estimated 6.2 million tonnes mineral resource at an average grade of 1.26 Li 2 O (JORC Code 2004/2012)* Region with promising exploration potential Cost efficient and environmentally friendly processing method Mining permit in place for the Länttä deposit Ideally located; excellent infrastructure and port facilities Demonstrated +99.9% Li-product suitable for advanced battery applications, i.a. for EV/HEV Pre-Feasibility Study and EIA reporting scheduled fall 2015 Expected high growth rate i.a. for HEV batteries; CAGR 15% for the period ** Keliber targets to be the first producer in Europe of battery grade lithium carbonate Note (*): Competent Persons responsible for the estimations are Markku Meriläinen and Pekka Lovén, Outotec (Finland) Ltd. Note (**): Technavio Research ( 30

31 Keliber Oy Steadily increasing resource base Category Deposit Tonnage (1,000 tonnes) LiO 2 % Measured Länttä Indicated Länttä Syväjärvi 1, Rapasaari 1, Outovesi Successful drilling in Rapasaari winter season 2014/2015 Re-analysis confirmed higher lithium grade from Syväjärvi Keliber s resource base has increased with 86% from October 2014 till April 2015 (Measured & Indicated) Leviäkangas Emmes Indicated total 5, Measured and Indicated 6, Inferred Syväjärvi Leviäkangas Inferred total Estimation of ore reserves to be reviewed in PFS, scheduled in

32 Investment highlights Significant value potential SOP project USD 550 million* vs. market cap. below USD 30 million Titanium natural rutile Titanium - Natural Rutile World class rutile deposit; 50 years mine life and highest global TiO 2 grade High Purity Quartz Close to market location, competitive Capex/Opex and favourable logistics Approved zoning plan and waste disposal permit (Environmental permit) Lithium High Purity Quartz Significant value opportunities in green-tech mineral Platinum, Palladium Lithium Pioneer in European lithium carbonate production Seabed minerals exploration Note (*): Estimates are based on preliminary internal assessments. 32

33 KIITOS HUOMIOSTANNE! Safety Environment - Innovation 33