RNC MINERALS
TSX : RNX
Focused on Value Creation March 15, 2018
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Cautionary Statements Concerning Forward-Looking Statements This presentation provides certain financial measures that do not have a standardized meaning prescribed by IFRS. Readers are cautioned to review the stated footnotes regarding use of non-IFRS measures.
This presentation contains "forward-looking information" including without limitation statements relating to the guidance for production; costs of sales, C1 cash costs, all-in sustaining costs and capital expenditures, and relating to the potential of the Beta Hunt Mine and the Reed Mine.
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 statements. Factors that could affect the outcome include, among others: 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 obtaining governmental approvals, projected cash costs, failure to obtain regulatory or shareholder approvals. For a more detailed discussion of such risks and other factors that could cause actual results to differ materially 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 Regarding the Beta Hunt Mine The decision by SLM to produce at the Beta Hunt Mine was not based on a feasibility study of mineral reserves, demonstrating economic and technical viability, and, as a result, there may be an increased uncertainty of achieving any particular level of recovery of minerals or the cost of such recovery, including increased risks associated with developing a commercially mineable deposit. Historically, such projects have a much higher risk of economic and technical failure. There is no guarantee that that anticipated production costs will be achieved. Failure to achieve the anticipated production costs would have a material adverse impact on SLM’s cash flow and future profitability. It is further cautioned that the PEA is preliminary in nature and includes inferred resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves. No mining feasibility study has been completed on Beta Hunt. Mineral resources are not mineral reserves and do not have demonstrated economic viability. There is no certainty that the PEA will be realized.
Cautionary Note to U.S. Readers Regarding Estimates of Resources This presentation uses the terms "measured" and "indicated" mineral resources and "inferred" mineral resources. The Company advises U.S. investors that while these terms are recognized and required by Canadian securities administrators, they are not recognized by the SEC. The estimation of "measured" and "indicated" mineral resources involves greater uncertainty as to their existence and economic feasibility than the estimation of proven and probable reserves. The estimation of "inferred" resources involves far greater uncertainty as to their existence and economic viability than the estimation of other categories of resources. It cannot be assumed that all or any part of a "measured", "inferred" or "indicated" mineral resource will ever be upgraded to a higher category. Under Canadian rules, estimates of "inferred mineral resources" may not form the basis of feasibility studies, pre-feasibility studies or other economic studies, except in prescribed cases, such as in a preliminary economic assessment under certain circumstances. The SEC normally only permits issuers to report mineralization that does not constitute "reserves" as in-place tonnage and grade without reference to unit measures. Under U.S. standards, mineralization may not be classified as a "reserve" unless the determination has been made that the mineralization could be economically and legally produced or extracted at the time the reserve determination is made. U.S. investors are cautioned not to assume that any part or all of a "measured", "indicated" or "inferred" mineral resource exists or is economically or legally mineable. Information concerning descriptions of mineralization and resources contained herein may not be comparable to information made public by U.S. companies subject to the reporting and disclosure requirements of the SEC.
Disclaimer
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Highly Experienced Management Team and Board Leading Industry Nickel Team
Dumont Nickel-Cobalt Project
World’s Largest Undeveloped Nickel and Cobalt Reserves
2nd largest nickel reserve in the world, 5th largest nickel sulphide discovery ever
8th largest cobalt reserve in the world, largest undeveloped reserve
Fully permitted, shovel ready with feasibility study complete
RNC - Waterton 50/50 JV to advance Dumont and grow nickel business with $US 35 MM cash
Cobalt 27 royalty acquisition underscores that Dumont “ranks among the top battery metals projects in the world and one of only a few nickel-cobalt projects that will be built this cycle”1
Positioned to deliver nickel and cobalt to global markets before the end of 2020
Ferro-nickel puck produced from Dumont concentrate
1 Cobalt 27 news release February 22, 2018
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Dumont Ni-Co Project 8th Largest Cobalt Reserve in the World
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Dumont Ni-Co is the 8th largest reserve is the only of the 8 largest reserves not in production and not owned by a major mining company
* Development projects
658
565
341
161 151 147 126 123 114 104
0
100
200
300
400
500
600
700
800
Mutanda Kamoto TenkeFungurume
Punta Gorda Jinchuan MurrinMurrin
Ambatovy Dumont* LasCamariocas
Mufulira Clean TeQSunrise*
Ranked Global Contained Cobalt Reserves (P & P) (by operation, kt)
Source: S&P Global Market Intelligence
(Glencore) (Katanga) (China Moly) (Cubaniquel) (Glencore)
(Sumitomo/ Kores)
(RNC / Waterton) (Cubaniquel) (Clean TeQ)
(Glencore)
1,144 Africa Other Countries
Dumont Ni-Co Project 2nd Largest Nickel Reserve in the World
6
6.4
3.1 2.8
2.2 2.1 2.0 1.9 1.8
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0 Contained Nickel Reserves (P & P) by Operation (Mt)
Taimyr Penninsula
(Norilsk)
Jinchuan Dumont* (RNC)
Weda Bay (Eramet)
Soroako (Vale)
Pomaala* (PT Aneka)
Murrin Murrin
(Glencore)
New Caledonia
(Vale)
Source: Company Reports, except Weda Bay, Jinchaun, Pomaala and Vale New Caledonia: Wood Mackenzie February 2015 Global Nickel Mine Summary Report
Dumont Ni-Co project only large scale nickel reserve not controlled by a major or nickel industry leader
* Development projects
Dumont One of Largest Nickel Sulphide Discoveries Ever and Largest Since 1960
RNC’s Dumont Project
Source: Vale presentation at the Metal Bulletin 3rd International Nickel Conference , London, April 29, 2015
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Dumont Ni-Co Project One of World’s Largest Battery Metals Projects
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Dumont will be one of largest battery metals projects by annual output value and is undervalued relative to its peers
$0
$100
$200
$300
$400
$500
$600
$700
$800
RNC PilbaraMinerals
Cleanteq NemaskaLithium
Bacanora SyrahResources
LithiumAmericas
Ecobalt MasonGraphite
Annual P
roduction V
alu
e (
US
$M
)
Nickel Value Cobalt Value
Graphite Value Lithium Carbonate Value
Source: Company Filings, Bloomberg | Metal Price: $6.00/lb Ni, $36.00/lb Co, $12,000/t Li2Co3, $1,000/t graphite | (1) Bacanora has 100% interest in the La Ventana concession and a 70% interest in Mexilit and Megalit
LOM Average Annual Production Estimated Value (US$M)
www.royalnickel.com
Dumont Ni-Co Project Significantly Undervalued
RNC (and implicitly Dumont) trading at a substantial discount to ASX pure play Nickel-Cobalt development plays
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$5,124
$4,340
$1,576
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
Valuation of Nickel-Cobalt Plays EV $US / tonne Cobalt Resource1
Source: Yahoo Finance, nickel resource converted to equivalent at 1:4 Ni:Co
Valuation of Nickel-Cobalt Plays EV $US / tonne Nickel-Cobalt Resource1
1. As at February 21, 2018. RNC reflects 50% ownership of Dumont
$582
$345
$54
$0
$100
$200
$300
$400
$500
$600
$700
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Structurally Low Cost, Large Scale Project
Source: Technical Report on the Dumont Ni Project, Launay and Trecesson Townships, Quebec, Canada, July 25, 2013, available at www.royalnickel.com and on www.sedar.com.
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RNC’s Dumont Nickel-Cobalt Project: 1 Billion Tonne Reserve + Upside Potential
Resource Estimate (SRK April 30, 2013) inclusive of Mineral Reserves
Reference is made to the full Technical Report on the Dumont Ni Project, Launay and Trecesson Townships, Quebec, Canada, July 25, 2013, available at www.royalnickel.com and on www.sedar.com. Mineral resources that are not mineral reserves do not have demonstrated economic viability.
Reserve Estimate (Snowden June 17, 2013)
Resource Category Quantity Grade
Contained Nickel
Contained Cobalt
(000 t) Ni (%) Co (ppm) (000 t) (Mlbs) (000 t) (Mlbs)
Measured 372,100 0.28 112 1,050 2,310 40 92 Indicated 1,293,500 0.26 106 3,380 7,441 140 302 Measured + Indicated 1,665,600 0.27 107 4,430 9,750 180 394 Inferred 499,800 0.26 101 1,300 2,862 50 112
Grades Contained Metal
Ni Co Ni Co
Category 000 t (% Ni) (ppm) Mlbs Mlbs
Proven 179,600 0.32 114 1,274 45
Probable 999,000 0.26 106 5,667 233
Total 1,178,600 0.27 107 6,942 278
Dumont Nickel-Cobalt Project Structurally Low Cost Project in Excellent Jurisdiction
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Dumont Ni-Co Project Highest-Grade Nickel and Cobalt Sulphide Concentrate
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0 5 10 15 20 25 30
Other (19 operations)
Long
Nova-Bollinger
KGHM
Vale - Manitoba
Vale - Sudbury
Flying Fox
Raglan
Mount Keith
Voisey's Bay
Dumont*
Table 1: 2016 Concentrate Grade (% Ni) for Global Nickel Sulphide Operations Compared to
Dumont Nickel-Cobalt Project1 * Denotes Development Stage Project
0 0.2 0.4 0.6 0.8 1
Other (10 operations)
Jinchuan
Nkomati
Kevitsa
Vale - Manitoba
Mount Keith
Savannah Nickel
Vale - Sudbury
Voisey's Bay
Dumont*
Table 2: 2016 Concentrate Grade (% Co) for Global Nickel Sulphide Operations Compared to
Dumont Nickel-Cobalt Project1 * Denotes Development Stage Project
Source: Wood Mackenzie and, with respect to Dumont, Technical Report on the Dumont Ni Project, dated July 25, 2013, available at www.rncminerals.com and under Royal Nickel Corporation’s profile on www.sedar.com
The Dumont Nickel-Cobalt Project is expected to produce the highest-grade nickel and cobalt sulphide concentrate in the world, providing maximum flexibility for potential partners and offtake parties, including the battery and stainless steel markets
Dumont – RNC’s Nickel Roasting Approach A Significant Breakthrough
Ferro-nickel puck produced from
Dumont concentrate
Significant potential benefits to producers of suitable nickel sulphide concentrate feed such as RNC’s Dumont Project:
Lower costs due to simpler processing compared to traditional smelting and refining
Higher payabilities than traditional smelting and refining
Greater flexibility for more potential partners and customers
Roasted nickel concentrate is effectively a very high grade laterite ore feed – creates new source of demand for nickel sulphide concentrate, notably at a time when many NPI and ferronickel producers face feed shortages as a result of Indonesia’s nickel ore export ban
RNC’s strategic alliance with Tsingshan led to the development of the first integrated nickel pig iron (“NPI”) plant to directly utilize nickel sulphide concentrate as part of the stainless steel production process through concentrate roasting
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Unique Partnership with Waterton
Well-Funded Joint Venture Arrangement to Create and Unlock Value within the Global Nickel Industry
RNC Minerals and Waterton 50/50 joint venture limited partnership (“JV Entity”) to advance Dumont and acquire high quality nickel assets globally
Strong Partnership
Focused on Nickel
Advancement of Dumont
Well-Funded Funded with US$35M in capital commitments to develop Dumont and acquire additional nickel assets, and backed by Waterton’s two largest funds with a total of US$1.725B in committed capital
The joint venture’s objective is to establish a pure play nickel company with multiple projects operating in stable jurisdictions
Waterton’s acquisition of 50% of Dumont for US$22.5 million (C$30 million) in cash valuing Dumont at C$60 million. Provides funding to continue to advance Dumont.
www.royalnickel.com
Dumont A Robust, Long-Life Nickel-Cobalt Sulphide Project
A compelling project
Once in production, a top five nickel sulphide operation globally and largest cobalt mine in North America
Large scale, long life nickel and cobalt production – 33 year reserve life
Initial production of 33 ktpa of nickel and 1.0 ktpa of cobalt
Expanded in year five to 51 ktpa of nickel and 2.0 ktpa of cobalt
1.7 billion tonnes of measured and indicated resource and 500 million tonnes of inferred resource (figures inclusive of mineral reserves)
Excellent location in the Abitibi region of Quebec - all major infrastructure in place
Project is well-supported by community; permitting and IBA complete
Feasibility study completed by Ausenco – excellent large sulphide mill track record
Significant upside potential from roasting and alternate downstream processing compared to traditional smelting and refining
Attractive economics at long-term prices
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RNC – Focused on Value Creation
Reed Mine (30%)
Copper Producer
2017 Production Guidance: Copper: 4.0-5.0 kt; Gold: 0.8-1.1 koz (30% basis)
Low cost production, Q3 2017 AISC US$1.57/lb
Manitoba, Canada
Massive exploration potential - known gold showings over 4 km strike, open in three directions, limited exploration at depth
Ramping up gold production; reached annualized rate of 70koz by year-end 2017
2018 nickel production: doubling to ~4 million lbs
Infrastructure in place to support much larger gold operation
Western Australia
Beta Hunt Mine Gold, Nickel Producer
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High grade gold exploration projects in Northern Quebec and U.S. Carolina Gold Belt
Successful 2017 drill program: multiple high-grade gold drill intersections up to 13.7 g/t, five new surface discoveries up to 457 g/t Au confirm 40-km high-grade “Qiqavik break” gold system
Exploration to begin in Carolina Gold Belt properties
Trading on TSX-V: ORM
Quebec and Carolinas
Orford Mining (~45%) Exploration Spin-Out
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Beta Hunt Mine: Kalgoorlie Located in a Well-Endowed Gold & Nickel Region
600km east of Perth, Western Australia
Kalgoorlie goldfield – 85 MM oz since 1890
Kambalda nickel – 1,400kt Ni over 50 years
Long established major mining centre
Large local mining workforce & service industry
Beta Hunt
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Beta Hunt Mine: Existing Ramp Infrastructure Provides Foundation for Future Growth Potential Beta Hunt is an exceptional mine with significant gold resource potential near existing
underground infrastructure
Significant infrastructure in place 5+ km under ground ramp system
Over $100 million invested in mid-2000s to extend ramp system into East Alpha and Beta West area
Significant potential for resource expansions at relatively low cost and in close proximity to mine infrastructure provide foundation for future growth
Source: Beta Hunt Mine PEA dated March 4, 2016 available at www.royalnickel.com and www.sedar.com
It should be noted that the identified Exploration Targets are conceptual in nature and there has been insufficient exploration to define them as Mineral Resources, and, while reasonable potential may exist, it is uncertain whether further exploration will result in the determination of a Mineral Resource under NI 43-101. The identified potential of the Exploration Targets are is not being reported as part of any Mineral Resource or Mineral Reserve.
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Beta Hunt Mine: Historic Nickel Drilling Revealed 4+ Kilometres Strike Length of Gold Structures
Gold structures uncovered by ~675km of drilling that targeted nickel troughs on ultramafic/basalt contact
Very limited drilling greater than 100 m below contact where gold is located
Historic open pit gold mine
Open at Depth
4 Km
Beta Hunt Mine: Massive Exploration Potential A Zone Drilling Success Confirms Structure
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Recent drilling results in A Zone confirm ability to use previously mined nickel areas as “outcrop” to target potential gold zones below Well-understood structures allow
productive exploration drilling
Allows use of historic nickel deposits to target gold and vice-versa
Multiple nickel deposits south of Alpha Island Fault have limited gold drilling and support potential of Fletcher Trend
Specimen Stones from A Zone
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Beta Hunt Mine: Massive Exploration Potential A Zone Extension – Rapid Discovery to Production
A Zone Extension less than 50 metres from existing development for Western Flanks Allows “2 for 1” - Get access to 2nd deposit from same set of development
Section view looking northwest showing the A Zone Extension drill results and proximity to existing underground
infrastructure as well as the Western Flanks resource. Section window is +/- 125m.
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Beta Hunt Mine: Potential For Extensions Along Strike & Depth, Parallel Structures
Source: Beta Hunt Mine PEA dated March 4, 2016 and news release dated October 19, 2017, available at www.royalnickel.com and www.sedar.com
Recent Western Flanks Results Show Wide Zones at Higher Grades
WF18-036: 6.3 g/t Au over 33.0 m, including 39.34 g/t Au over 3.0 m
WF18-035: 4.1 g/t Au over 21.5 m, including 5.72 g/t Au over 12.4 m
WF18-064: 3.7 g/t Au over 30.2 m, including 6.95 g/t Au over 6.8 m
WF18-041: 3.2 g/t Au over 33.0 m, including 7.84 g/t Au over 8.2 m
WF18-056: 3.0 g/t Au over 25.3 m, including 6.45 g/t over 3.7 m
WF18-033: 3.0 g/t Au over 27.5 m, including 7.44 g/t over 6.8 m
Gold mineralization at Western Flanks has been extended over a vertical extent of 60 metres and laterally over 200 metres with multiple drill hole intersections containing greater than 20 metres of mineralization
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Beta Hunt Mine: Potential For Extensions Along Strike & Depth, Parallel Structures
Source: Beta Hunt Mine PEA dated March 4, 2016 available at www.royalnickel.com and www.sedar.com
Beta Hunt Mine Exploration Potential
Historic nickel drilling has a significant number of high grade gold drill intersections outside current resource
Excellent potential for resource growth along strike, down dip/plunge and parallel/repeat gold lodes
Fletcher trend identified as a conceptual repeat of A Zone and Western Flanks and is defined by a 150 m fault offset from surface drilling and potential for additional trends
Plan view of gold targets and drill intersections
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Beta Hunt Mine: Third Major Gold Structure Fletcher Shear Zone Discovered Summer 2016
Source: RNC news release dated July 6, 2016 available at www.royalnickel.com and www.sedar.com
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Beta Hunt Substantial Operating Improvements
Gold Material Mined (tonnes per day)
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2.50
3.00
Improvements continued in production and grades through Q4 2017
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Gold Mining Cash Cost (US$ per ounce)
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RNC Gold Strategy – Phase 1 Execution Now through 2018
Phase 1
4 Major mining fronts
A Zone 800 - 1,000 tpd
WF South 1,000 - 1,000 tpd
WF Central 1,000 - 1,200 tpd
A Zone Ext 200 - 400 tpd
Total 3,000+ tpd
Increased haulage fleet
8 Cat 55 t trucks
6 Cat loaders
Beta Gold and Nickel Operation6 Q3 2017
Q2 2017
Q1 2017
Gold mining cash cost per ounce (US$/oz mined) 3 $804 $1,211 $1,669 Gold AISC, net of by-product credits (US$/oz sold)4,5,6 $1,569 $1,786 $1,685 Gold C1 cash operating cost, net of by-product credits (US$/oz sold)4,5 $1,439 $1,687 $1,647 Nickel C1 cash operating cost (US$ per lb. sold)5 $3.40 $3.31 $2.97 Nickel C1 cash operating cost (US$ per tonne sold)5 $7,499 $7,293 $6,541 Nickel all-in sustaining cost (AISC) (US$ per lb. sold)5 $3.45 $4.15 $3.00 Nickel all-in sustaining cost (AISC) (US$ per tonne sold)5 $7,596 $9,150 $6,618
Beta Hunt Gold and Nickel Operation1 Q3 2017 Q4 2017 Q3 to Q4 %
Change Dec
2017 Gold tonnes mined (000s) 146 160 +10% 60
Gold mined grade (g/t)3,4 2.24 2.47 +10% 2.60
Gold mined (ounces)2,3,4 10,489 12,722 +21% 5,027
Gold tonnes milled (000s) 182 158 -13% 48
Gold mill grade (g/t) 2.23 2.39 +7% 2.73
Gold Recovery (%) 90 92 +2% 91
Gold milled (ounces) 13,047 12,128 -7% 4,220
Gold sales (ounces)1 8,659 12,896 +49% 3,819
Nickel tonnes mined (000s) 8.3 8.6 +4% 3.0
Nickel tonnes milled (000s) 10.2 7.0 -31% 2.1
Nickel mill grade, nickel (%) 2.84 2.64 -7% 1.77
Nickel in concentrate tonnes (000s) 0.25 0.16 -36% 0.03
Beta Hunt Gold and Nickel Operation1 FY 2016 FY 2017 2016 to
2017 % Change Gold tonnes mined (000s) 371 531 +43%
Gold mined grade (g/t)3,4 2.3 2.17 -6%
Gold mined (ounces)2,3,4 27,882 37,027 +33%
Gold tonnes milled (000s) 354 507 +43%
Gold mill grade (g/t) 2.29 2.16 -6%
Gold milled (ounces) 21,500 35,307 +64%
Gold sales (ounces)1 20,958 33,578 +60%
Nickel tonnes mined (000s) 73.3 33.8 -54%
Nickel tonnes milled (000s) 73.9 33.7 -54%
Nickel mill grade, nickel (%) 2.72 2.73 +0.4%
Nickel in concentrate tonnes (000s) 1.80 0.80 -55%
RNC Beta Hunt Strategy - 3 Phased Approach
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Mine Development and Resource Expansion
Western Flanks South
Western Flanks Central
A Zone Extension
A Zone 14 & 15 Level
AWF Decline
Double current resources
Production target 3,000 tpd – 2018
Resource Expansion
Western Flanks Deeps
A Zone Deeps
A Zone North
Beta Gold
East Alpha Gold
Mine Development
Western Flanks North
A Zone Deep
Twin Ramps
Production Potential
4,000 – 5,000 tpd
Exploration
Deeper Gold Structures
New Structures
Mine Development
Beta Gold
East Alpha Gold
WF Deeps
A Zone Deeps
Fletcher
Shaft Infrastructure
Production Potential
6,000 – 7,000+ tpd
Phase 1 Present -> 2018 1 Phase 2 2018-2020 3 2 Phase 3 2020 - 2025
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Orford Mining Corporation (~45% RNC interest) Discovery of New Gold Belt in Northern Quebec
RNC’s holds a ~45% equity interest in Orford Mining Corporation (TSX Venture: ORM)
Continued exposure to highly prospective former RNC exploration assets through ownership interest in Orford
Summer 2017 program successfully drill tested three 2016 discoveries, makes five additional surface discoveries
Confirms 40 km “Qiqavik Break” as gold structure similar to Larder Lake-Cadillac break in the Abitibi, the Boulder-Lefroy Fault System in Kalgoorlie, Australia and the Ashanti Fault System in West Africa.
Osisko Mining Inc. and Premier Gold Mines are shareholders
Multiple exploration properties in highly prospective Carolina Gold Belt
West Raglan – Advanced high grade Ni-Cu-PGM
Exploration projects in Northern Quebec and U.S. Carolina Gold Belt
Qiqavik – Gold Exploration Potential Multiple high grade gold and gold-copper discoveries
2017 program drill-confirmed three high-grade discoveries and made five new high-grade visible gold discoveries prospecting discoveries at surface that remain untested by drilling
40km “Qiqavik Break” gold potential confirmed in just nine weeks of exploration
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Source: RNC news release dated September 19, 2016 available at www.rncminerals.com and www.sedar.com
Map of Qiqavik Property Showing Significant Gold and Copper Exploration Results from 2017 Program
RNC – Focused on Value Creation
Reed Mine (30%)
Copper Producer
2017 Production Guidance: Copper: 4.0-5.0 kt; Gold: 0.8-1.1 koz (30% basis)
Low cost production, Q3 2017 AISC US$1.57/lb
Dumont Nickel-Cobalt Project (50%)
2nd largest nickel reserve in the world, 5th largest nickel sulphide discovery ever
8th largest cobalt reserve and largest undeveloped cobalt reserve
Dumont Ni-Co Project: structurally low cost, large scale, shovel ready
RNC - Waterton 50/50 JV to advance Dumont and grow nickel business
Quebec, Canada Manitoba, Canada
Massive exploration potential - known gold showings over 4 km strike, open in three directions, limited exploration at depth
Ramping up gold production; reached annualized rate of 70koz by year-end 2017
2018 nickel production: ~4 million pounds
Infrastructure in place to support much larger gold operation
Western Australia
Beta Hunt Mine Gold, Nickel Producer
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High grade gold exploration projects in Northern Quebec and U.S. Carolina Gold Belt
Successful 2017 drill program: multiple high-grade gold drill intersections up to 13.7 g/t, five new surface discoveries up to 457 g/t Au confirm 40-km high-grade “Qiqavik break” gold system
Exploration to begin in Carolina Gold Belt properties
Trading on TSX-V: ORM
Quebec and Carolinas
Orford Mining (~45%) Exploration Spin-Out
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Appendix: Reed Mine – Q3 2017 Overview
Reed Mine Q3 2017 Operating Review (100% basis)
Q3 2017 tonnes milled of 18 kt and copper grade of 4.06%
Q3 2017 production of 2.7 MM lbs copper (1.21 kt) and 300 oz of gold (RNC’s 30% share)
Q3 2017 AISC US$1.57/lb copper
2017 production guidance (30% basis): 4-5 kt copper and 0.8-1.1 koz of gold
Reed Mine Q3 2017 Operating Review (30% basis)1
1.Cash operating cost per pound, and all-in sustaining cost per pound, are not recognized measures under IFRS. Such non-IFRS financial measures do not have any standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other issuers. Management uses these measures internally. The use of these measures enables management to better assess performance trends. Management understands that a number of investors, and others who follow RNC’s performance, assess performance in this way. Management believes that these measures better reflect RNC’s performance and are better indications of its expected performance in future periods. This data is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.
Q3 2017 Q3 2016 YTD Q3
2017
YTD Q3
2016
Ore (tonnes hoisted) 117,536 112,929 358,184 338,842
Ore (tonnes milled) 107,705 119,795 339,833 325,794
Copper (%) 4.06 3.59 3.72 4.28
Zinc (%) 0.62 0.59 0.57 0.62
Gold (g/t) 0.48 0.42 0.46 0.52
Silver (g/t) 8.23 6.61 6.68 7.10
Q3 2017 Q2 2017 Q1 2017
Copper contained in concentrate (kilo tonnes) 1.21 1.41 0.85
Gold contained in concentrate (ounces) 300 293 283
Copper cash operating cost per pound sold 1 $1.55 $1.58 $2.06
Copper all-in sustaining cost per pound sold 1 $1.57 $1.66 $2.10
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Appendix: Financing Commitments (as at March 15, 2018)
Senior secured loan: US$9 million secured debt facility, repayments of US$0.4 million begin on March 31, 2018 with a final bullet payment of
US$3 million on June 30, 2019; gold coupon of 115 ounces per month Senior secured nickel loan:
US$3.65 million repaid by delivery of 372 nickel tonnes over a five month period beginning in March 2018 Senior secured copper loan:
Remaining principal and interest paid by delivery of 300,000 Cu pounds per month until July 2018 (total of 1.2 million pounds) Unsecured Debt: US$2.2 million remaining balance, 12% annualized interest
Gold Facility: US$5.5 million in-process gold facility for higher grade material, US$4.0 million for lower grade material, and a US$1.5 million in-
process nickel facility Interest rate of LIBOR + 4.5% per annum Auramet purchases, at market rates, all gold and nickel from Beta Hunt during the loan term
Copper Facility: US$5.0 million facility Interest rate of LIBOR + 4.5% per annum Auramet purchases RNC’s share of accountable metal content of Reed output
Working Capital Facilities:
Metal Prepayments and Debt Facility:
Convertible Debt Facilities: Waterton: US$10 million senior secured convertible term debt facility closed June 7, 2017 (10% annualized interest paid quarterly;
bullet repayment at end of 4-year term) Convertible into shares of RNC at US$0.1912/share (to maximum of 75% of principal) or units of the RNC/Waterton nickel JV
(RNC has the right to prepay any unit conversion in excess of US$4.5 million of principal to maintain a 40% interest in JV)
US$6 million unsecured convertible term debt facility closed December 14, 2017; US$3 million repayable in 15 equal monthly installments beginning January 2018 in either nickel tonnes or cash (at Pala’s election); remainder (US$3 million plus interest) due in March 2019 payable in nickel tonnes or cash or convertible into shares of RNC at C$0.2537/share; 14% interest payable at end of term
Pala:
34
Appendix: Beta Hunt Resource
Beta Hunt Nickel Mineral Resources as at February 1, 20161,2,3,5
Nickel Classification Inventory
(kt) Grade (Ni %)
Contained Metal Nickel Tonnes
(NiTs)
>=1% Ni
Measured 96 4.6 4,460 Indicated 283 4.0 11,380
Total 379 4.2 15,840 Inferred 216 3.4 7,400
Gold Classification Inventory
(kt) Grade
(Au g/t)
Contained Metal
(Ounces)
>=1.8 g/t Au
Measured 0 0.0 0
Indicated 815 3.5 92,000
Total 815 3.5 92,000
Inferred 2,910 3.4 321,000
Beta Hunt Gold Mineral Resources as at February 1, 20161,2,4,5
1.Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. There is no certainty that all or any part of the Mineral Resources estimated will be converted into Mineral Reserves.
2.The Mineral Resource estimates include Inferred Mineral Resources that are normally considered too speculative geologically to have economic considerations applied to them that would enable them to be categorized as Mineral Reserves. There is also no certainty that Inferred Mineral Resources will be converted to Measured and Indicated categories through further drilling, or into Mineral Reserves once economic considerations are applied. Mineral resource tonnage and contained metal have been rounded to reflect the accuracy of the estimate, and numbers may not add due to rounding
3.Nickel Mineral Resources are reported using a 1% Ni cut-off grade 4.Gold Mineral Resources are reported using a 1.8 g/t Au cut-off grade 5.Mineral Resources described here has been prepared by Elizabeth Haren, MAusIMM CPGeo, of Haren Consulting Pty Ltd.
Source: Beta Hunt Mine PEA dated March 4, 2016 available at www.royalnickel.com and www.sedar.com
Cautionary Statement The decision by SLM to produce at the Beta Hunt mine was not based on a feasibility study of mineral reserves, demonstrating economic and technical viability, and, as a result, there may be an increased uncertainty of achieving any particular level of recovery of minerals or the cost of such recovery, including increased risks associated with developing a commercially mineable deposit. Historically, such projects have a much higher risk of economic and technical failure. There is no guarantee that that anticipated production costs will be achieved. Failure to achieve the anticipated production costs would have a material adverse impact on SLM’s cash flow and future profitability. It is further cautioned that the PEA is preliminary in nature and includes inferred resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves . No mining feasibility study has been completed on Beta Hunt. Mineral resources are not mineral reserves and do not have demonstrated economic viability. There is no certainty that the PEA will be realized.
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Compliance Statement (JORC 2012 and NI 43-101)
Qualified Person The technical information in this presentation relating to historic exploration results at the Beta Hunt Mine is based on information compiled by Steve Devlin, who is a member of the Australian Institute of Mining and Metallurgy. Mr. Devlin is a full time employee of Salt Lake Mining Pty Ltd and has sufficient experience, which is relevant to the style of mineralization and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 edition of the "Australasian Code for Reporting of Exploration Results. Face sampling in the HOF drive was conducted by SLM personnel. Samples are shipped to ALS Minerals Geochemistry of Kalgoorlie for preparation and assaying by 25 gram fire assay analytical method. First sample of each sample submission incorporates a barren rock sample as a flush to clean the lab crusher and pulveriser and as a check for contamination. Analytical accuracy and precision are monitored by the analysis of insertion of blank material and a certified standard. The disclosure of scientific and technical information contained in this presentation has also been approved by Alger St-Jean, Vice President Exploration of RNC, who is a “Qualified Person” under National Instrument 43-101.
Quality Assurance - Quality Control (“QA/QC”) at Beta Hunt
The majority of the Nickel Mineral Resources reported has been defined by drillholes completed in 2008 and 2014 while the gold Mineral Resources have been generated from drillholes completed over the life of the Beta Hunt mine. Sampling and assaying methodologies have been tailored to either nickel or gold depending on the drill target.
All diamond core samples have been analyzed by external laboratories with various levels of company based and laboratory internal QA/QC programs implemented. Some quality issues have been identified over time however the Qualified Person does not consider the overall effect of minor errors to be material to the reported Mineral Resources. This is supported in the case of the nickel estimates by reconciliation of nickel production by SLM during 2014.
Drillhole programs completed by SLM follow industry standard procedures for drilling, collection of samples and submission to external laboratories. Where specific gravity data is absent, regression curves have been used to populate the database. Data collection, retention and backup by SLM follow industry standards. No independent verification of significant intersections has been performed. Overall thorough QA/QC protocols are followed at Beta Hunt and the Qualified Person is satisfied that the data is reliable.
The Mineral Resource estimates set out in this presentation have been prepared using accepted industry practice and classified in accordance with the JORC Code, 2012 Edition. Elizabeth Haren, MAusIMM CPGeo, of Haren Consulting Pty Ltd accepts responsibility as Qualified Person for the Mineral Resource estimates. The “JORC Code” means the Australasian Code for Reporting of Mineral Resources and Ore Reserves prepared by the Joint Ore Reserves Committee of the Australasian Institute of Mining and Metallurgy, Australian Institute of Geoscientists and Mineral Council of Australia. There are no material differences between the definitions of Mineral Resources under the applicable definitions adopted by the Canadian Institute of Mining, Metallurgy and Petroleum (the "CIM Definition Standards") and the corresponding equivalent definitions in the JORC Code for Mineral Resources.
Readers are advised that Mineral Resources not included in Mineral Reserves do not demonstrate economic viability. Mineral Resource estimates do not account for mineability, selectivity, mining loss and dilution. These Mineral Resource estimates include Inferred Mineral Resources that are normally considered too speculative geologically to have economic considerations applied to them that would enable them to be categorized as mineral reserves. There is no certainty that Inferred Mineral Resources will be converted to Measured and Indicated categories through further drilling, or into Mineral Reserves, once economic considerations are applied.
Based on the resource estimate, a standard methodology for stope design, mining sequence and cut-off grade optimization, including application of mining dilution, process recovery, economic criteria and physical mine and plant operating constraints has been followed to design the mine and to complete a Preliminary Economic Assessment (“PEA”) report for the Beta-Hunt Mine by David Penswick, P.Eng.
The full Beta Hunt Mine PEA dated March 4, 2016 is available at www.royalnickel.com and www.sedar.com.
NI 43-101 Compliance
www.royalnickel.com 36
Corporate Overview
Share Structure1:
Basic Shares Outstanding1: 357.7 million Convertible (price: US$0.1912 (C$0.2573))2 63.2 million Options (ave. exercise price: C$0.37) 26.1 million Warrants (exercise price: C$0.40) 3 23.9 million Deferred/Restricted Share Units 5.5 million Contingent Shares 7.0 million
Fully Diluted Shares Outstanding: 482.4 million
Directors and Officers Share Ownership: ~3%
Balance Sheet Highlights: Cash and Cash Equivalents4: C$21.6 million Market Capitalization1: C$92.7 million
1. Shares outstanding, fully diluted shares outstanding, shareholdings and market capitalization as at March 13, 2018 2. Assumes maximum conversion of 75% of US$10M principal into RNC common shares; US/C $ exchange rate as at June 7, 2017 and conversion of US$4 million principal and interest into RNC
common shares ; US/C $ exchange rate at September 18, 2017 3. 16.5 million warrants @ C$0.49, 5.9 million warrants @ C$0.24 and 1.5 million compensation warrants @ C$0.41 4. Cash and cash equivalents as at September 30, 2017
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