BRAZILIAN NICKEL

Nickel & the Battery Market

1Argus Metals Week NiCoMo 2019

BRAZILIAN NICKEL2

Argus Metals Week NiCoMo 2019

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

BRAZILIAN NICKELNickel Market Supply Chain - 2018

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

Stainless Steel

1.68 Mt

Matte

Intermediates315 kt

Laterite Supply

1.46 M t

Sulphide Supply725 kt

Alloys, plating etc

~ 500 kt

Li Batteries ~ 120 kt

Other 15 kt

Ni Metal

Ni Powders & Briquettes

~ 350 kt

Tota

l Sup

ply

2.18

5 M

t

Tota

l de

man

d 2.

3 M

t

3

Argus Metals Week NiCoMo 2019

Fe Ni400 kt

NPI720 kt

Class 2

NiSO4

Stocks depleted by 191 kt in 2018 to 219 kt

BRAZILIAN NICKEL

Stainless Steel

2.07 Mt

Forecast Nickel Market Supply Chain 2025

Matte

Fe Ni470 kt

NPI960 ktLaterite

Supply2 M t

Sulphide Supply970 kt

Alloys, plating etc

~ 580 kt

EV Batteries ~ 450 kt

Other 20 kt

Ni Metal

Class 2

Tota

l Sup

ply

3

M t

Tota

l de

man

d 3.

15 M

t

Ni Powders & Briquettes

~ 500 kt

4

Source : NorNickel, Roskill, Wood Mackenzie, UBS, Mckinsey, BRN Argus Metals Week NiCoMo 2019

NiSO4

Intermediates600 kt

BRAZILIAN NICKEL

Stainless Steel

2.28 Mt

Forecast Nickel Market Supply Chain 2030

Matte

Intermediates850 kt

Fe Ni500 kt

NPI900 ktLaterite

Supply2.28 M t

Sulphide Supply920 k t

Alloys, plating etc

~ 660 kt

EV Batteries ~ 1.2 M t

Other 20 kt

Ni Metal

Class 2

Tota

l Sup

ply

3.2

M t

Tota

l de

man

d 4.

16 M

t

Ni Powders & Briquettes

~ 500 kt

5

Source : NorNickel, Roskill, Wood Mackenzie, UBS, Mckinsey, BRNArgus Metals Week NiCoMo 2019

NiSO4

Probable Projects into Production

Ni Metal Refinery capacity = 3.45 Mt

BRAZILIAN NICKEL

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Project Status 2030

Source : Wood Mackenzie, BRN

Argus Metals Week NiCoMo 2019

301 23%

23418%

19515%

15912.5%

1038%

907%

715.5%

655%

413%

302%

BRAZILIAN NICKEL

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Project Status 2030 Upside Case

Source : Wood Mackenzie, BRN

Argus Metals Week NiCoMo 2019

BRAZILIAN NICKEL

Stainless Steel

2.28 Mt

Forecast Nickel Market Supply Chain 2030

Matte

Intermediates1.15 M t

Fe Ni500 k t

NPI1.15 M t

Laterite Supply2.8 M t

Sulphide Supply1.1 M t

Alloys, plating etc

~ 660 kt

EV Batteries ~ 1.2 M t

Other 20 kt

Ni Metal

Class 2

Tota

l Sup

ply

3.9

M t

Tota

l de

man

d 4.

16 M

t

Ni Powders & Briquettes

~ 500 kt

8

Source : NorNickel, Roskill, Wood Mackenzie, UBS, Mckinsey, BRNArgus Metals Week NiCoMo 2019

NiSO4

Possible Projects into Production

BRAZILIAN NICKELEV & Incremental Nickel Demand Forecasts9

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

BRAZILIAN NICKEL

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Argus Metals Week NiCoMo 2019

Project TypeTypical

Capacitykt pa

Capital IntensityUS $/lb annual

Ni

Nickel Price req'd for 30% IRR (pre tax)

US $/lbSmall Sulphides (Aus) 5 to 8 5 to 8 > 6.30Large low grade S (Can) 20 to 50 13 to 26 >10.00NPI China 10-60 2.3 to 6 currentNPI Indonesia 10-60 3 to 7 currentFeNi 20-60 15 to 36 > 6.80Chinese HPAL Indonesia 40-50 6 to 7 ?HPAL 20-60 35 to 70+ > 8.6Heap 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

BRAZILIAN NICKELNickel & Cobalt Price

Source : LME Argus Metals Week NiCoMo 2019

SPOT Feb 25th = US $ 5.94

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BRAZILIAN NICKEL

Argus Metals Week NiCoMo 2019

Project TypeTypical

Capacitykt pa

Capital IntensityUS $/lb annual

Ni

Nickel Price req'd for 30% IRR

US $/lbSmall Sulphides (Aus) 5 to 8 5 to 8 > 6.30Large low grade S (Can) 20 to 50 13 to 26 >10.00NPI China 10-60 2.3 to 6 currentNPI Indonesia 10-60 3 to 7 currentFeNi 20-60 15 to 36 > 6.80HPAL Indonesia 40-50 6 to 7 ?HPAL 20-60 35 to 70+ > 8.6Heap Leach 10-40 8 to 16 > 5.00

PNP 25 8.4 5.02

Capital intensity and Incentive Nickel Price12

BRAZILIAN NICKELOEM Investment > US $ 300 Billion

Argus Metals Week NiCoMo 2019Source : Reuters, Avicenne Energy

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BRAZILIAN NICKELWhy 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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BRAZILIAN NICKEL

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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-Tax2 Consensus Economics Long-Term3 Total Project incl. working capital allowance4 After accounting for refining charges and by product credits

5 Average of first 10 years6 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

BRAZILIAN NICKEL

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Nickel Laterite Hydromet Projects & Products

Piauí Nickel Project Demonstration Plant

Argus Metals Week NiCoMo 2019

BRAZILIAN NICKELNickel Laterite Hydromet Products17

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

BRAZILIAN NICKELBRN’s Piauí Nickel Project18

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

BRAZILIAN NICKELKey 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 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

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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

BRAZILIAN NICKEL

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Thank you

AABC Europe 2019

BRAZILIAN NICKEL

Nickel and CobaltMade Easy

Argus Metals Week NiCoMo 2019