How a Junior can Finance a $1Bn CAPEX

Recording date: 4th June 2021

Nickel made it through $8/lb ($17,600) and hasn’t gone much further – spent most the past month +- $0.20/lb shook off Huayou Cobalt JV in Indonesia for 120kt nickel and 15ktpa cobalt.

Copper made it back through $10,000 / tonne for the first time since 2011 and hit a new high of $10,700 in early May – although coming off the boil a bit and has now drifted back below $10,000 ($4.50/tonne)

- analysts gushing, china import premium fallen to the lowest level since 2012 – will check on scrap

- supply difficulties in Chile may be helpful medium-term but some of the warning signals going off that not going much higher from here – will confirm over the next few weeks

Nickel market looking in good shape!

- Remember stainless price best indicator – prices higher than the short-term peak at the start of the year

- NPI prices still at a big discount but supply tight as Indonesian NPI being used to make more stainless in Indonesia

- Sulphate premiums moving higher – not quite as high as crazy spike at the start of the year but still over $1/lb – and seeing stock sulphate imports – clear sign local supply not keeping up with demand. Starting to see a steady decrease in LME briquette imports

- Ore inventories finally starting to move but well-below (y-o-y numbers helped by some Philippines mines shut down last year for COVID and other reasons)

Canada Nickel PEA – let’s get into it

- Robust result - $1.2 billion NPV, 16% IRR

- Nearly 2 billion pounds of nickel (860kt) over 25 year mine life + 21 Mt iron + 1.5 Mt chrome

-Just getting started

- based on resource locked last October. Expect FS resource to be 50-100% larger than what was used in PEA

- recoveries on Ni, Cr, Fe

- FN deals on fleet

- Assumes stainless plant economics

- Does NOT mean we’re abandoning EVs – despite what some other mining CEOs are saying about us INCORRECTLY

FACT 1 –will be producing the highest grade nickel concentrate which would be the best product for the battery sector. No concentrate-EV path available now – will work to get into place by FS

FACT 2 – stainless as a nickel product has the highest premiums in US and Europe

FACT 3 – generally in business, get WAY better terms if you can demonstrate a better path to market

- downstream paths to market discussion

- World to look very different in 3-5 years

- More options for concentrate in China

- Single plant concentrate-precursor for big projects to serve local markets

- Stainless in US and Europe – real, sustained premiums

- exploration results next week

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