Philippine Nickel Industry: Opportunities and Challenges

Philippine Nickel Conference

03-04 November 2015

Manila, The Philippines

The following presentation and its contents are based on reputable published

sources, market indicators and information provided by key officers and staff of

TVIRD, based on their collective professional experience.

All opinions expressed in this presentation on the current state and future of

the nickel ore market and the Philippine economy and its legislative

environment are based on management’s experience and viewpoints and are

not necessarily reflective of the Philippine Nickel Industry as a whole.

Foreword

Philippines: History & Geography

Geography

• 7,107 islands / 3 major island groups

• Area: ~ 300,000 km2

• Coastline: ~36,000 km

• Located in the Pacific Ring of Fire

Timeline

• Pre-1945 Foreign Occupation

• 1946 US Recognizes

Philippine

Independence

• 1972 Authoritarian

Government

• 1986 Declaration of

Democracy

Philippines: Bilateral Trade Relations

Source: PH Statistics Authority

2014 Philippine Trade Performance

• Imports: US$63.9 Billion (2.4%)

• Exports: US$61.8 Billion (9.0%)

• BOT: (US$2.11) Billion (63%)

Reference: 2014 Trade Statistics

• Import: US$668 Million (15.0%)

• Export: US$545 Million (20.6%)

China Remains the Philippines’ Largest Trading Partner

*Others: rest of the world

Philippines: Bilateral Trade Relations

Source: PH Statistics Authority

19.1% Trade Share as of July 2015

• Imports: US$1.24 Billion (55.9%)

• Exports: US$867.9 Million

• Trade Value: US$2.1 Billion

• BOT: (-US$373.9) Million

China Remains the Philippines’ Largest Trading Partner

*Others: rest of the world

Philippines: Outlook 2015

GDP

• 6% growth in 2015

Key Industries

• Manufacturing and Construction Supported by Trade, Real Estate, Renting and

Business Activities, Transport, Storage and

Communication

Mining and Quarrying

• Gross Value Added: US$1.7 Billion

• Nickel Mining accounts for 31%

Sources: PH Statistics Authority, NCSB,

BusinessWorld

Philippines Resources

Total Mineral Resources: US$1.3 trillion

• 9 million hectares with mineral potential

• 2.7% is covered by mining permits

• 0.32% is in development/operating stage

• A hard-working and skilled workforce

• Over 1,600 known ports and a total

coastline of 36,289 kilometers

• Close proximity to Australia, China, India,

Taiwan, and Japan

Source: PH Mines and Geosciences Bureau

2014 Q1 2015

Gross Production

Value US$4.5 Billion US$527 Million

Total Exports US$4.01 Billion US$792 Million

Employment 235,000 255,000

Metallic Mines 43 44

Processing Plants 5 4

Approved MPSAs 339 --

Approved FTAAs 6 --

Approved

Exploration Permits 36 --

Permit Applications 1,864 --

Source: MGB, 2015 Data U.S. Geological

Survey

A Global Leader in Nickel Production

Nickel Production in 2014

• DSO: US$1.35 Billion

• Processed: US$0.45 Billion

• Total Value: US$1.8 Billion

Top Importers

• Australia

• China

Potential Increase in Demand

• India

World Nickel Production by Country (2014e)

Australia 9%

Brazil 5%

Canada 10% China

4%

Colombia 3%

Cuba 3%

Indonesia 10%

Madagascar 1%

New Caledonia

7%

Philippines 18%

Russia 11%

South Africa 2% Others

17%

Philippine Nickel Industry

Primary Nickel Producing Regions (and nickel inventory as of April 2011)

Zambales, Luzon

429 Mt

Palawan

(Part of Luzon)

Surigao, Mindanao 382 Mt

Visayas

1.2 Mt

• Nearly 1 billion tonnes of nickel resources

• 27 nickel mines and two processing plants

• ~9 million ha of high potential areas largely

unexplored and without mineral permits

Top Nickel DSO Producing Companies in 2014

(Volume in dry metric tonnes)

1. Taganito Mining – 5.7 Mt

2. Global Ferronickel – 3.9 Mt

3. Carrascal Nickel – 3.2 Mt

4. CTP – 2.5 Mt

5. Hinatuan Mining – 2.3 Mt

Source: INSG, PH Chamber of Mines

Nickel Production (DSO) Summary

Notable new nickel projects: (Commissioning from 2016 onwards)

• PHILNICO Project – $1 B, Annual production of 40,000 t of processed Ni

• INTEX Mindoro Project – $2.4 B, Annual production of 53,000 t of processed Ni

• AMCOR Pujada Project – $1.5 B, 200 Mt of 1.3% Ni reserves

• Agata Mining Venture Inc.’s Agata Project – 2015 production target of 1.5 million WMT

50% Average Annual Growth Rate from 2008-2012

2008 2009 2010 2011 2012 2013 2014

No. of operating

nickel mines

10 9 13 18 21 24 24

Nickel DSO (in Million Dry Metric

Tonnes)

5.4 8.2 13.8 20.7 25.1 25.2 30.1 • Libjo Nickel Project – 2015 production target of 714,000 DMT

Agata Nickel Laterite DSO Operations

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The Agata Nickel Laterite Project is located in the CARAGA

mining region of Mindanao and commenced operations in

October 2014.

Excellent location and logistics and mining areas are located

within 3.5 kilometres of a private port in Tubay, Agusan del Norte.

PMRC-compliant Resource and Reserve as of August 2015:

• Mineral Resource1 : 43 M tonnes at 0.96% Ni and 19.9% Fe

• Limonite Reserve2 : 9.6 M tonnes at 0.90% Ni and 48.2% Fe

• Saprolite Reserve2: 6.0 M tonnes at 1.49% Ni and 17.01% Fe

Over 1 million wmt of ore has been shipped to date by a

workforce of over 640 people.

TVIRD is the operator and 60% owner.

Agata DSO

Operations

1- Total Measured and Indicated Resource (wmt)

2- Proven and Probable Reserve (wmt)

Agata Nickel Processing Project

Owned by Agata Processing Inc.

(API), a JV company in which

TVIRD can earn a 60% interest

upon completion of a Definitive

Feasibility Study and is operator.

A processing plant would focus on

the lower limonite and saprolite

zones of Agata orebody to

produce mixed hydroxide product

(MHP) with ~40% nickel content.

A potential plant site would be

located within 3 km of the port.

Port/Causeway Limestone

Ni Laterite

Ore body

1 Km

MRL NICKEL PHILIPPINES INC.

Proposed

Nickel

Processing

Plant

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Agata Nickel Processing Project

Processing plant is envisioned as a two-stage process:

1) Atmospheric Tank Leach (ATL)

2) Low Pressure Acid Leach (LPAL)

Bench-scale testwork was conducted to validate the

process in early 2013 by Beijing General Research

Institute of Mining & Metallurgy (BGRIMM)

BGRIMM established a pilot plant in mid-2013 and first

nickel hydroxide production was produced in early 2014.

Processing Plant has been designed for 7,000t of Mixed

Hydroxide Product (~40% nickel content) per year.

Definitive Feasibility Study is complete.

3D Models of Nickel Processing Plant

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Agata Direct Reduction Nickel Technology

14

Direct Reduction (aka Tunnel Kiln) Technology is also being

studied for the production of Sponge Nickel to process high-

iron nickel ore (>50% Iron) at Agata.

The option is being studied due to current low DSO prices for

high-iron nickel ore.

Direct reduction technology is capable of producing sponge

nickel grading 6 - 10% nickel.

Main advantages to this technology include:

• Low capital investment and operating costs

• Simple proven technology with lower risk of downtime

• Short construction period of 12 months

• Low energy consumption & surplus energy

• Low level of environmental impact

• Small plants can be located near the mine

Conceptual Tunnel Kiln Plant

Philippines: Opportunities

There remains over 9 million hectares of highly prospective areas for nickel in largely

unexplored areas of the Philippines.

The mining industry continues to work with the Philippine Government on transparency,

governance and policy reforms to improve regulation, revenue sharing and accountability

– this overall cooperation paves the way for renewed interest in the development of

business opportunities.

While Executive Order 79 placed a moratorium on all new mining contracts until the

establishment of a new revenue sharing agreement, it has been partially lifted to allow the

expansion of existing mining tenements. This allows companies to tap into nearby

prospects within close proximity to its concession areas.

With over $20 billion worth of permitted projects in various stages of

development, there are many exciting investment opportunities in the

Philippine Mineral Industry

1) Industry experienced historically-low prices, which are bottoming out as

producers rationalize and cut output. Economic stimulus policies and

technological innovations around the world expected to usher an

upswing in commodity prices.

2) Executive Order 79 placed a moratorium on the granting of all new

mining contracts until a new revenue sharing agreement has been

finalized – uncertainty over tax regime.

3) Bills filed in Congress and Senate pushing for a total ban on DSO

exports and a requirement for ore processing before export –

uncertainty for the future of DSO operations.

Philippine Nickel Industry Challenges

16

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Historically-Low Metals Prices

Philippines Ni 1.8% Fe 12-18%

Philippines Ni 1.6% Fe 20-25% Philippines Ni 1.5% Fe 15-20%

Philippines Ni 0.9%-1.1% Fe: 50% Philippines Ni 0.6%-0.8% Fe: 50%

Philippine NI FOB Price Chart Jan- September 2015

5-Year Nickel Price – October 14, 2015 (US$4.72/lb)

• Commodity price megatrends behave in +10-year cycles

• Best time to invest in mining is not during the peaks but the troughs – “Buy Low, Sell High”

THE TIME TO INVEST IN MINING IS NOW

TO REAP MAXIMUM REWARDS IN THE FUTURE

Proposed Mining Tax Bills in Congress

House Bill No. 5367 by Congressman Romero S. Quimbo/Senate Bill No. 2362 by

Senator Ralph G. Recto

• The government share shall be 10 percent of the gross revenue or 55% of adjusted net mining

revenue - plus a share in windfall profits

House Bill No. 3586 by Congressmen Silvestre H. Bello and Lino S. Cayetano

• Proposed corporate income tax of 30%; Special mine tax equivalent to 5% of the contractor

taxable income – plus royalties on mineral reservations

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Proposed Ban on exports of DSO

A Bill Seeking to Ban the Export of Unprocessed Ore

• Bill filed at Congress level in July 2014 by Congressman Erlpe Amante and a counterpart Bill was filed in August 2014 by Philippine Senator Bam Aquino

• Similar to the export ban of unprocessed ore implemented in Indonesia

• Aims to increase mining’s contribution to local economy

• Will require processing of ore prior to export in order to:

– Pave the way for establishment of more plants, smelters

– Create more local jobs

Chamber of Mines of the Philippines opinion

Due to other pending ‘priority bills,’ Congress will need at least a year to complete the proper process – for which it is unlikely that the Bill will be passed into law within the 16th Congress (until 2016).

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Summary

With nearly 1 billion wet metric tonnes of potential nickel

resources, the Philippines has the inventory to cover growing

world demand for nickel.

While new projects are coming on stream, more investment is

required to increase nickel production capacity in order for the

country to address the potential supply gap in China.

While the legislative and taxation framework for the Philippine

mining industry remain uncertain, ongoing dialogue between

governments and industry representatives may result in a

reasonable way forward to encourage foreign investment and

economic growth.

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- Thank You -

For more info: www.tvird.com.ph

Appendix: TVI Resource Development (Phils.) Inc.

TVI Resource Development Philippines Inc. (TVIRD) is a private Philippine resource

company engaged in the exploration, development and production of nickel laterite ore

and precious and base metals projects located in the Philippines. The company is

headquartered in Makati, Metro Manila.

Appendix: TVI Resource Development (Phils.) Inc.

Established in 1994, TVIRD is a Philippine

resource company currently engaged in

the production, development and

exploration of nickel laterite, precious and

base metals projects in the Philippines. It

is headquartered in Makati, Metro Manila.

Owned 68.32% by Prime Resource

Holdings (a private Philippine investment

corporation) and 30.66% by TVI Pacific

Inc. (a Canadian publicly traded resource

company).

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Board and Key Management include:

• Clifford M. James – Chairman

• Manuel Paolo A. Villar – Vice Chairman

• Eugene T. Mateo – President – Board Member

• Michael G. Regino – Board Member

• Maryknoll B. Zamora – Board Member and

Director of Finance

• Jake G. Foronda – VP Operations

History of Success

• TVIRD previously mined gold, silver, copper and zinc from the

Canatuan mine in Zamboanga del Norte, Mindanao.

• Mining operations focused initially on an overlying oxidized

gossan zone containing gold and silver and subsequently on an

underlying primary sulphide zone containing copper and zinc.

• From 2004 to mid-2008, the mine produced over 105,000

ounces of gold and 1.8 million ounces of silver doré.

• From 2009 to 2014, TVIRD produced 199,778 dry metric

tonnes (dmt) of copper concentrate and 30,548 dmt of zinc

concentrate.

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TVIRD - “Best in Class”

25

From 2010 to 2013*, TVIRD received multiple prestigious awards at the

annual Presidential Mineral Industry Environmental Awards ceremony.

2010 Awards:

• Platinum Achievement Award, Surface Mining Category

• Safest Mines Award, Concentrator Category

• Mining Forest Award, Metallic Category

• Health and Safety Award

2011 Awards:

• Titanium Award for Excellence in Environmental Management

• Safest Mining Operation

• Safest Surface Mining Operation

• Safest Mineral Processing, Concentrator Category

2012 Awards:

• Presidential Mineral Industry Environment Award – Platinum Award

• Safest Surface Mining Operation

• Safest Mineral Processing, Concentrator Category

• Best Mining Forest, Metallic Category – 3rd runner up

2013 Awards:

• Titanium Award – Surface Mining Category

• Safest Mineral Processing, Concentrator Category

• Safest Exploration (for Agata Nickel Project) – Category A

• Best Mining Forest, Metallic Category – 2nd runner up

* Canatuan operations concluded in late 2013

Appendix: TVIRD Today

Key Activities:

1) Agata nickel laterite direct shipping ore operations –

over 1 million wet metric tonnes of ore have been shipped

since October 2014.

2) Agata Limestone Project - Evaluating for potential DSO

operations or processing.

3) Balabag Gold-Silver Project – permitting and development

towards production in 2016.

4) Achieve listing on Philippine Stock Exchange in 2015

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• Located in Tubay, Agusan del Norte (Caraga Mining Region)

• Owned 60% by TVIRD and 40% by MRL Nickel Philippines

• Reserves of 15.6 million wmt (0.9-1.5% Ni /14-49% Fe)*

• Resources of 42.7 million wmt (0.96% Ni/19.9% Fe)*

• Mining areas are within 3.5 kilometres from private port

• Commercial operations began in October 2014 and over 1

million wmt of ore have been shipped to date

• Workforce of ~640 people

Appendix Agata Nickel Laterite DSO Operations

* All reserves/resources are PMRC complaint and updated as of August 2015

The Agata Nickel Laterite DSO Project is the third project that

TVIRD successfully brought on-stream in the past 10 years.

Appendix: Agata Limestone Project

TVIRD is operator and 60% owner.

Limestone deposits are located south of nickel laterite

DSO operations and share the same exceptional

location and infrastructure.

Only one deposit – the Payong Payong limestone

deposit – has been drilled to date and is located in

close proximity to causeway facilities.

As of August 2015, the project has PMRC-compliant

resources of 35.6 million tonnes grading 55.1% calcium

oxide and 97.31% calcium carbonate (aka high-purity

limestone).

High-purity limestone is in high demand as a paper

coating and whitener for the paper making industry; as

filler in the production of plastics, paints and adhesives;

and as calcined and hydrated lime for a variety of

industrial purposes.

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Appendix: Balabag Gold-Silver Project

100% owned by TVIRD.

Located in 4,779-hectare Mineral Processing

Sharing Agreement (MPSA) area in the

municipality of Bayog and approx. 75 km east-

northeast of TVIRD’s former flagship project,

Canatuan.

Low-sulphidation epithermal gold and silver vein

deposit with total of 296 holes drilled for 34,156 m

since 2005. Deposit remains open laterally and at

depth.

Current PMRC-compliant mineral resource of 2.5

million tonnes averaging 1.8 g/t gold and 47.8

g/t silver for 213,000 ounces of AuEq.

Project is in the final stages of permitting and

construction is planned soon after DMPF

approval with first doré pour planned in 2016.

Manila

CANATUAN

ZAMBOANGA PENINSULA

BALABAG

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Appendix: Balabag Exploration Potential

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Additional exploration potential exists with

numerous targets outside the main deposit:

1. Stream geochemical signatures suggest a

porphyry copper style of mineralization,

northwest of Balabag Hill

2. Copper skarn reportedly occurs in Upper

Dipili-San Pedro River area

3. Base metal mineralization was recognized

in the headwaters of Dipili River

4. Widespread and intense argillic alterations

coincident with anomalous gold in soils

TVIRD’s goal is to obtain a 1-year exploration

extension on the Balabag MPSA and commence

an exploration program upon approval.

1 Copper mineralization

4 Gold targets

2 Copper skarn

3 Base metals

Balabag Hill

Appendix: Great Canatuan Area Exploration Potential

1

40 km / 25 mi

2

3

3 3

2

TVIRD has a package of tenement applications

covering 352 square kilometres surrounding the

Canatuan mine where similar Canatuan-like

deposits may exist

Since 2010, exploration work and MPSA processing

and approval were on hold due to the ongoing

moratorium on new permit applications imposed by

the Secretary of the Department of the Environment

and Natural Resources.

In November 2014, TVIRD the MICC approved the

expansion of its Canatuan MPSA to include nearby

exploration prospects.

TVIRD is now awaiting the Implementation Rules

and Regulations for the expansion of its MPSA prior

to recommencing exploration work in nearby areas.

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Appendix: Other Exploration Projects

Sindangan Cotabato

Fault System

TVIRD owns 100% of additional tenements containing

highly promising copper/gold prospects, including:

• Tamarok Prospect: Indications of large-scale porphyry

copper/gold system.

• Tapisa Prospect: Potential large-scale porphyry

copper/gold system.

• Bonbon Prospect: Potential large-scale epithermal

gold system (10 kilometres/6.2 miles long).

More than 20 additional prospects identified.

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• TVIRD is currently pursuing an Initial Public Offering

and listing on the Philippine Stock Exchange (PSE) by

the end of 2015

• A Preliminary Prospectus in connection with the IPO

was filed by TVIRD with the PSE and Philippine

Securities and Exchange Commission on October 7,

2015.

• Subject to securing all pre-requisite regulatory

approvals, the final offer price for the IPO is expected to

be set on November 26.

• The shares are targeted to be listed on the Main Board

of the PSE in mid December 2015

Philippine Stock Exchange Listing

33

Investing in a diversified, future-oriented company…

Choose a Philippine resource company with a proven track record and the

ability to deliver projects on time, according to specification and within budget.

Choose a partner with a diverse portfolio of projects in the pipeline and shares

your vision for the future…one that focuses on long-term development and

not short-term gains.

Choose award-winning operators adhering only to the highest standards for social

responsibility and environmental stewardship.

We are a “Partner of Choice” in the Philippines and model operator in the eyes of

the Philippine government and regulators.

TVIRD Summary