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RNC MINERALS
TSX : RNX
Focused on Value Creation June 11, 2019
2
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.
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
RNC – Focused on Value Creation
3
Prolific Kalgoorlie/Kambalda region of Western Australia, over 85 million ounces of historic production
Multi-mine and 1.3 Mtpa mill operation anchored by Beta Hunt mine with high grade Father’s Day Vein discovery - high grade coarse gold potential across all shear zones
Massive gold exploration potential Beta Hunt – gold intersections over 4 km strike, remains open in all directions + 370 koz reserve/ 1.9 M oz resource / 386 km2 land package
5km ramp infrastructure in place adjacent to gold structures (and just 150 metres above high grade coarse gold potential)
40,000 metre drill program underway, end Q2 resource update
Beta Hunt Mine & Higginsville Operations Gold Producer (100%)
2nd largest nickel reserve in the world, 5th largest nickel sulphide discovery ever
9th largest cobalt reserve (2nd largest undeveloped cobalt reserve)
Shovel ready, all permitting complete – feasibility update Q2/19
Excellent jurisdiction – Abitibi, Quebec
RNC - Waterton (RNC 28%) JV to advance Dumont, grow nickel business
Dumont Nickel-Cobalt Project (28%)
www.royalnickel.com 4
Corporate Overview
Share Structure1: Basic Shares Outstanding1: 553.2 million
Options (ave. exercise price: C$0.36) 31.1 million Warrants (exercise price: C$0.48) 2.3 million Deferred/Restricted Share Units 4.1 million Contingent Shares 7.0 million
Fully Diluted Shares Outstanding: 597.7 million
Westgold Resources Limited ownership: ~10.3%
1. Shares outstanding, fully diluted shares outstanding, shareholdings and market capitalization as at June 11, 2019. 2. Cash and cash equivalents as at March 31, 2019, plus value of gold specimens held for sale at contained gold value (without premium which RNC expects to realize); $12 million bought deal financing
close d on April 18, 2019.
Balance Sheet Highlights: Market Capitalization1: C$277 million Cash and Cash Equivalents2:
C$2.1 million C$35 million debt facility in place
Share Price:
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Beta Hunt Mine: Located in a Well-Endowed Gold Region
600km east of Perth, Western Australia
Kalgoorlie goldfield – 85 Moz since 1890
Kambalda goldfield – 20 Moz since 1897
Only operating underground mine in the Kambalda Dome and Lunnon Basalts
7 km of prime gold exploration ground
Kalgoorlie Goldfield 85 Million Oz since 1890
Kambalda Goldfield 20 Million Oz since 1897
5
Beta Hunt
6
Beta Hunt Mine: 40,000 Metre Drill Program Underway
Plan View of Beta Hunt Sub-lease showing focus of recent drill campaign and location of A Zone and Western Flanks long sections
4 shears – open at depth and along strike. Historic gold intersections for 4+ km
Only two with gold resources, open in all directions
Other two largely untested
New sedimentary layer creates bonanza grade gold across all 4 shears across entire strike length
Mineralized shears continue to deliver broad zones of mineralization, and significant gold mineralization outside the current resource
7
Beta Hunt Mine: 40,000 Metre Drill Program Underway
At Western Flanks the intersection between the mineralized shears and the property-wide Lunnon sediment layer further confirms potential for high grade coarse gold discoveries
Higher grade gold intersected in multiple places over much greater widths than the current resource model
Western Flanks Long Section looking East showing current drilling pierce points and selected intersections of the Western Flanks shear from current drill results. Note: The Western Flanks Shear is, in part, made up of multiple lodes over a width of approximately 50m. All intersections are reported as estimated true widths.
8
Beta Hunt Mine: 40,000 Metre Drill Program Underway
A Zone drilling targeting sediment layer and shear near Father’s Day Vein intersected:
119 g/t over 6.4 metres (true width), including 1,406 g/t over 0.50 metres (true width) in hole AZ15-013 located just 7 metres below Father’s Day Vein
A Zone Long Section looking East showing current drilling pierce points and selected intersections of the A Zone shear from the most recent drill results – post January 22, 2019.
9
Site Management Interpretation of Sediment Structures Led to This High Grade Coarse Gold Discovery
The massive potential of these high grades structures has been unlocked by the team at site over the past year leading to the “Father’s Day Vein” discovery, subsequent successful drill testing on 2nd shear, and successful testing on three levels
Specimen Gold Intersected with Pyritic Sediments on A Zone (14Level) (740 ounces)
Geology/ Operations rethinking the deposition model of high grade coarse Gold*
Sept 2017
June/Jul 2018
July/Aug 2018
Sept/Oct 2018
First proof of interpretation high grade coarse gold is related to pyritic/ porphyry/ dilation zone
Further confirmation of interpretation
Site Reaction
High Grade Gold & Location
Awe-inspiring discovery
Jan/Feb 2019
June 2019
Production mining in same location (A Zone-14Level) Significant coarse gold (1,500 ounces)
A Zone 15 Level Jumbo & Air Leg Development intercepted Pyritic Sediments (177 ounces)
Air Leg Cut taken off Jumbo drive to expose the Footwall contact Father’s Day Vein Discovery (27-30,000 ozs)
First drilling of sediments in Western Flanks intersect high grade coarse gold (7,621 g/t over 0.28m, incl. 2,210 g/t over 0.85m)
Significant coarse gold with pyritic sediments on A Zone 16 Level (987 ounces)
“Fluid Wall Rock Interaction in an Archean Hydrothermal Gold Deposit: A Thermodynamic Model for the Hunt Mine, Kambalda-Fiona Neall, G. Neil Phillips” Economic Geology-1987
Successful replication of model to 2nd larger shear (Western Flanks)
3rd consecutive intersection of coarse gold – further confirmation of interpretation
Beta Hunt: Upper/Lower Lunnon Basalt Pyritic Sediment Layer Interaction with Gold Shears
A preliminary model to understand these high grade gold structures at the Beta Hunt Mine has been developed and will be further refined as additional exploration and development continues
10
Preliminary Simplified Structural model, showing Pyritic Sediments interface with A Zone & Western Flanks
11
Father’s Day Vein – 15 Level – Intersection
Extensional Vein
11
Beta Hunt Mine: Existing Ramp Infrastructure Provides Foundation for Future Growth Potential
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
12
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Father’s Day Vein Area Development
A Zone Long Section Looking East showing locations of coarse gold occurrences
Geological model developed with respect to sediment layer / gold shear interaction that create conditions for high-grade coarse gold accumulation has now successfully encountered high-grade gold each time tested (3 times - 14, 15, 16 levels - 1,000+ ounces each time)
Hole WFN-029 intersected 1,017 g/t over 2.00 metres (true width) including 7,621 g/t over 0.27 metres (true width)
The 7,621 g/t drill intersection in WFN-029 - highest grade drill intersection by any reporting company since 2017 - only Kirkland Lake's Fosterville Mine and Pretium Resources Brucejack Mine have yielded higher grade intersections over the past 4 years; (Source: S&P Global Market Intelligence. This information is provided for comparative purposes and is not indicative of the mineralization on RNC's properties.)
Hole AZ15-013 returned 1,406 g/t over 0.50 metres (true width) located just 7 metres below the Father's Day Vein discovery
High Grade Historical Highlights (100+g/t) and New Bonanza Grade Intersections
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Historic Drilling – Selected High Grade Intersections (100+g/t) and Recent High Grade Intersections
Exceptional Exploration Results First Bonanza Grade Gold at Western Flanks Sediment Layer
15
Higginsville Gold Operation
HGO acquisition is a significant step forward for RNC and its Beta Hunt mine in creating value for shareholders
RNC paid Westgold A$25 million in cash and A$21 million in RNC shares (satisfied by the issuance of 49.8 million RNC shares), for total consideration of A$50 million (including the A$4 million deposit previously satisfied by the issuance of 7.1 million RNC shares)
RNC financed the cash component of the purchase price with minimal dilution through a $35 million debt facility which also provides for working capital needs
Provides milling solution to unlock significant potential of Beta Hunt Mine
Significantly lower processing costs compared to prior toll milling arrangements
>$C15 per tonne or 35% cost savings on processing costs over toll milling - over $US100 per ounce
Transforms RNC’s Western Australia gold operations into a multi-mine operation with a large land position in the Kalgoorlie gold region
Beta Hunt ore was successfully toll milled at Higginsville in June 2018 with a 94% recovery
16
HGO Mine & Mill Operations
Mining at HGO occurs primarily at the Mt Henry open pit and is transitioning to Baloo open pit
Revenue generation from existing 3rd party tolling contract
Significant exploration potential, with 386 km2 of tenure with gold mineralization potential
Located along strike and close to mining centres of Norseman and St Ives, covering over 50 km of the highly prospective Norseman-Wiluna Greenstone belt
Source: Westgold
A multi-mine operation anchored by 1.3 Mtpa mill with large resource base and 386 km2 land package in prolific gold region
www.royalnickel.com
Overview of Higginsville Processing Facility
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Modern low-cost 1.3 Mtpa gold processing plant, including a gravity gold recovery circuit with Knelson concentrator followed by an Acacia high intensity leach reactor
Plant was built in 2007
Substantial infrastructure including tailings storage facility
HGO Mill
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HGO Mine & Mill Operations
The HGO assets includes several operating and previously operating underground and open pit gold mines on the property with historical JORC Mineral Resources of 1.9Mozs and Ore Reserves of 0.37Mozs
Project
Tonnes
('000s)Grade
Ounces Au
('000s)
Tonnes
('000s)Grade
Ounces Au
('000s)
Tonnes
('000s)Grade
Ounces Au
('000s)
Tonnes
('000s)Grade
Ounces Au
('000s)
Trident 620 3.75 75 571 5.24 96 714 4.51 104 1904 4.48 275
Chalice 266 4.04 35 501 3.55 57 186 4.15 25 953 3.8 116
Corona - Fairplay 2 - 0 944 2.26 69 282 2.95 27 1,228 2.42 96
Vine - - - 190 2.13 13 468 2.04 31 658 2.07 44
Lake Cowan 71 1.63 4 1,191 1.53 58 528 1.34 23 1,790 1.47 85
Two Boys - - - 375 2.04 25 203 2.88 19 578 2.33 43
Mount Henry 1,301 1.88 79 8,147 1.73 453 898 1.83 53 10,347 1.76 584
Paleochannels - - - 1,474 2.15 102 208 2.13 14 1,682 2.15 116
Greater Eundynie - - - - - - 683 1.86 41 683 1.86 41
Polar Bear - - - 1,160 1.9 71 5260 1.67 282 6,240 1.71 353
Musket 107 2.26 8 376 2.33 28 601 1.6 31 1,084 1.92 67
Other - - - 485 1.54 24 603 1.72 33 1,087 1.64 57
Stockpiles 751 0.86 21 258 1 8 - - - 1,009 0.89 29
Total 3,118 2.20 220 15,672 1.99 1,004 10,634 1.99 681 29,424 2.01 1,906
Measured Indicated Inferred Total
Higginsville Gold Operations
Mineral Resource Statement - Rounded for Reporting
30/06/2018
Project
Tonnes
('000s)Grade
Ounces Au
('000s)
Tonnes
('000s)Grade
Ounces Au
('000s)
Tonnes
('000s)Grade
Ounces Au
('000s)
Trident - - - - - - - - -
Chalice - - - - - - - - -
Corona - Fairplay - - - 286 2.91 27 286 2.91 27
Vine - - - - - - - - -
Lake Cowan - - - 132 1.97 8 132 1.97 8
Two Boys - - - 57 2.12 4 57 2.12 4
Mount Henry - - - 3,236 1.79 186 3,236 1.79 186
Paleochannels - - - 924 2.06 61 924 2.06 61
Greater Eundynie - - - - - - - - -
Polar Bear - - - 707 1.87 43 707 1.87 43
Musket - - - 244 2.42 19 244 2.42 19
Other - - - 193 1.66 10 193 1.66 10
Stockpiles 29 3.63 3 136 1.27 6 164 1.68 9
Total 29 3.63 3 5,916 1.91 363 5,945 1.92 367
Proven Probable Total
Higginsville Gold Operations
Ore Reserve Statement - Rounded for Reporting
30/06/2018
HGO Historical Mineral Resources and Ore Reserves
Table 1: HGO Mineral Resources Table 2: HGO Ore Reserves
1. Subsequent to the compilation of the Mineral Resources and Ore Reserve Statement, HGO continued to mine. For the period 1st July 2018 to 31st March 2019, a total of 791kt at 1.54g/t Au (39kozs) was mined from the Mt Henry deposit.
2. The information presented in Tables 1 and 2 is extracted from the report entitled ‘2018 Annual Update of Mineral Resources & Ore Reserves’ dated 2 October 2018 available to view on Westgold Resources Limited’s website (www.westgold.com.au) and the ASX (www.asx.com.au). The information in this report that relates to Exploration Results, Mineral Resources and Ore Reserves is based on information compiled by Mr. Jake Russell B.Sc. (Hons) MAIG and Mr. Anthony Buckingham B.Eng (Mining Engineering) MAusIMM. Both have sufficient experience which is relevant to the styles of mineralisation and types of deposit under consideration and to the activities which they are undertaking to qualify as a Competent Person as defined in the 2012 Editions of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC 2012)”. RNC confirms that the form and context in which the Competent Person’s findings are presented have not been materially modified from the original market announcement.
3. A qualified person has not done sufficient work on behalf of RNC to classify the historical estimates noted in Tables 1 and 2 as current mineral resources or mineral reserves and RNC is not treating the historical estimates as current mineral resources or mineral reserves.
4. RNC plans to undertake further evaluation of the Higginsville deposits. Future updates or revisions will be reported as required under and in accordance with the JORC Code 2012 and NI 43-101.
Dumont Nickel-Cobalt Project Structurally Low Cost Project in Excellent Jurisdiction
19
20
Dumont Nickel-Cobalt Project Technically & Economically Sound Project
Highlights
Strong project economics $920M after-tax NPV8%
15.4% after tax IRR
Large scale, Long Life
• 33ktpa nickel ramping up to 50ktpa nickel by Year 8 • 1.2Mt (2.6B lbs) Ni produced over LOM • 30 Year Life
Structurally low-cost operation, low 2nd quartile of cash cost curve
• Phase I C1 cash costs of $2.98/lb ($6,570/t). • Life-of-mine C1 cash costs2 of $3.22/lb ($7,100/t Ni) • Life-of-mine AISC of $3.80/lb ($8,380/t) of payable
nickel
Significant earnings and free cash flow generation
Annual EBITDA $303M in Phase 1, ramping up to $425M in Phase 2; LOM $340M
$201M/year operating cash flow over Life-of-Mine
Dumont feasibility study demonstrates robust financial returns.
Source: RNC news release dated May 30, 2019
www.royalnickel.com
Dumont Nickel-Cobalt Project One of World’s Largest Battery Metals Projects
21
Dumont is one of largest battery metals projects by annual output value
Source: Company Filings, Reuters | Metal Price: $7.75/lb Ni, $25.00/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)
0
100
200
300
400
500
600
700
800
RNC PilbaraMinerals
CleanTeq NemaskaLithium
Bacanora SyrahResources
LithiumAmericas
Ecobalt MasonGraphite
An
nu
al P
rodu
ction
va
lue (
US
$M
)
Nickel Value Cobalt Value Graphite Value Lithium Carbonate Value
28% 100% 100% 100% 70% - 100% 62.5% 100% 100% 100%1
Project Ownership
Dumont Nickel-Cobalt Project 2nd Largest Nickel Reserve
Total Contained Nickel Mineral Reserves (Mt) – By Deposit
(Top Six Deposits and Selected Others)
6.4
2.8 2.4
1.7 1.7 1.7
0.9 0.8 0.7 0.1
TaimyrPenninsula
(Norilsk)
Dumont Halmahera(Weda Bay)
Onca Puma Jinchuan Soroako(PT Inco)
BHP (total) Sunrise(Clean TeQ)
Voisey's Bay WesternAreas (total)
High Risk Jurisdiction
Sulphide
Laterite
Dumont remains the 2nd largest nickel reserve in the world and one of the few large nickel projects in a low risk jurisdiction.
Source: Company reports and Wood Mackenzie Ltd. (May 2019)
23
Dumont Nickel-Cobalt Project A Top 5 Nickel Sulphide Operation
Largest Nickel Sulphide Operations (RNC Phase II -105ktpd vs
2018 production for other projects) (kt/year)
217
74 51
33 39 37 36
17
Norilsk Jinchuan ValeSudbury
Dumont(Phase I & II)
Voisey'sBay
Raglan Mt. Keith
Dumont is expected to be among the top 5 nickel sulphide operations
50
1. Dumont production based on phase II expansion in year 7 .
24
Dumont Nickel-Cobalt Project One of Canada’s Largest Base Metal Mines
0
10
20
30
40
50
60
70
Highland Valley Voisey's Bay Dumont Raglan Mt. Milligan Red Chris
Largest Canadian Base Metal Mines Annual Production (Ni-Eq. kt)1
Ni Cu (NiEq) Co (NiEq) Other (NiEq)
Dumont will be one of the largest base metal mines in Canada
1. Based on RNC analysis. All mines based on reported 2018 production with exception of Dumont (Feasibility Study-May 2019) expected Phase I and Phase II life of mine nickel production and Mt. Milligan and Red Chris where the average of 2017 and 2018 production was used. Ni-eq., Cu-eq production calculated using recent prices as of May 28, 2019: Ni: $5.49/lb, Cu: $2.69/lb, Mo: $12.46/lb, Co: PGM (average): $1,069/oz, Au: $1,278/oz, Ag: $14.33/oz .
50
59 57
50
34 31
25
Dumont Nickel-Cobalt Project Dumont Implied Value - Peer Positioning
0.80x
0.56x 0.43x
0.33x
?
0.00x
0.10x
0.20x
0.30x
0.40x
0.50x
0.60x
0.70x
0.80x
0.90x
1.00x
Western AreasLimited
PanoramicResources
Limited
Nickel MinesLimited
Clean TeQHoldingsLimited
Dumont
P/N
AV
Ore Type Sulphide Sulphide Laterite Laterite Sulphide
Reserve (kt Ni) 278 101 n/a 827 2,759
Annual Production (kt Ni)
21 11 10 19 39
Implied Valuation for RNC’s 28% Dumont Interest (based on
US$920 NPV8%)
Source: Company Filings, Capital IQ
US$205M
US$145M
US$111M
US$84M
US$84 – 205M C$112 – 273M
C$0.22-0.55/ share
Nickel Pure Play Peer Group – Selected Companies Late Stage Development / Production
26
Dumont Nickel-Cobalt Project Structurally Low Cost
Dumont is a structurally low cost project
• Conventional flowsheet (SAG, ball mill, flotation, magnetic separation)
• Low strip ratio 1:1
• Low electricity costs averages US$ 3.5 (C$4.7) cents / kWh
• 29% Ni high grade concentrate
• Non-acid generating waste rock and tailings with carbon sequestration capacity
• Major support infrastructure in place
• Local workforce – no camp
Dumont – RNC’s Nickel Roasting Approach A Significant Breakthrough
Ferro-nickel puck produced from
Dumont concentrate In 2018 CRU completed a value-in-use study for nickel
concentrates, roasted and converted to FeNi
For the 29% Ni concentrate from Dumont, CRU estimated a payability of 94%
Payability of 91.5% was assumed for the 2019 FS
With roasting, no payment will be realized for the cobalt and PGMs contained in concentrate
At certain metal prices, concentrate content or partner requirements, recovered cobalt and PGMs could become payable metals
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
27
Source: RNC news release dated May 30, 2019
28
Dumont Nickel-Cobalt Project Additional Upside Potential Identified
• Autonomous Fleet Operation
– NPV8%: +$75 - +$115M – Autonomous Haulage System (AHS) for mining haul truck fleet
• Alternate Development Scenario – 75ktpd Start-up
– NPV8%: +$155 - +$210M – Utilizes a modified grinding circuit to achieve initial production of 75 ktpd,
with a modest expansion in Year 6 to 100 ktpd
• Iron Ore (Magnetite) Concentrate
– NPV8%: +$60 - +$100M – Recovery and upgrade of magnetite from magnetite tailings stream
Source: RNC news release dated May 30, 2019
29
Nickel Demand A Leader Among Metals
5.2% 5.0%
3.8%
2.4% 2.1%
5.4%
2.2%
4.2%
1.8%
Aluminum Nickel Lead Copper Zinc Stainless CarbonSteel
Cobalt Molybdenum
Base Metals & Other Metals Demand CAGR% (2007 - 2017)
Source: Macquarie
Nickel demand a leader among metals over the last decade (5%) driven by continued strong growth in stainless steel (5.4%) with little contribution to date from electric vehicles
30
Electric Vehicles to Drive Significant Additional Demand
Recent Glencore presentation highlights massive growth expected in nickel demand expected from electric vehicles
31
Nickel Supply - Little Momentum in Existing Supply & “Project Cupboard” Largely Empty
Where is new project supply going to come from?
By 2025, trend demand of 5% growth from 2017 requires 1.1 Mtpa of new supply and a further 400ktpa for EV demand, but “project cupboard” outside of Indonesia is empty — few projects in pipeline and 35+ years of inertia to overcome
Laterites – HPAL?
Laterites – FeNi?
NPI?
Sulphides?
Trend: 1.1 Mt EVs: 0.4 Mt
1.5 Mtpa
New Supply Required
This is equivalent to total 2010 nickel supply !
By 2030, just 5 years later, the market requires > total 2010 supply a 2nd time (+1.5 Mt)
to meet further EV growth of 0.9 Mtpa + trend demand growth Source: CRU, RNC Analysis, Glencore presentation dated May 14, 2019
32
Nickel Supply – Significant Political Risk Is there an ONEC in our future ??
Nickel supply facing increasing political risk as Indonesia now dominates nickel supply growth. Just 3 countries are expected to control as much of the nickel supply as OPEC did of global oil supply at its peak in 1973
Oil 1973 Nickel 2020
Nickel Supply Concentration (2020) vs Oil Supply Concentration at OPEC peak (1973)
Other OPEC
Persian Gulf 37%
54%
Indonesia 28%
Philippines
New Caledonia
52%
Source: U.S. EIA, Red Door Research, RNC analysis
These 3 countries:
Face revenue shortfalls
Have intervened directly into mining sector
RNC – Focused on Value Creation
Quebec, Canada Western Australia
33
Prolific Kalgoorlie/Kambalda region of Western Australia, over 85 million ounces of historic production
Producing gold mine with high grade Father’s Day Vein discovery - high grade coarse gold potential across all shear zones
Massive gold exploration potential – gold intersections over 4 km strike, remains open in all directions
5km ramp infrastructure in place adjacent to gold structures (and just 150 metres above high grade coarse gold potential)
40,000 metre drill program underway, end Q2 resource update
Acquisition of Higginsville mill and gold tenements complete
Beta Hunt Mine (100%) Gold Producer
2nd largest nickel reserve in the world, 5th largest nickel sulphide discovery ever
9th largest cobalt reserve (2nd largest undeveloped cobalt reserve)
Shovel ready, all permitting complete – feasibility update Q2/19
RNC - Waterton (RNC 28%) JV to advance Dumont, grow nickel business
Dumont Nickel-Cobalt Project (28%)
34
Appendices
35
Highly Experienced Management Team
36
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 over 40 years
Very limited drilling greater than 100 m below contact where sediment/gold is located
Pyritic interflow sediment horizon over 4 km of strike length
Majority of specimen stone discovered on south side of Alpha Island Fault
Specimen stone found in two areas now – nickel/sediment horizon and pyritic sediment
Historic open pit gold mine
Open at Depth
4 Km
Pyritic sediment
Pyritic sediment
Pyritic sediment
HOF-Nickel Sulfide/Sediment
Father Days Vein Pyritic Sediment Only
7
Beta Hunt Mine: New Gold Mine in Kambalda Gold District
Beta Hunt is the only gold mine operating in the Lunnon Basalt
Deep shear structures provided path way for gold bearing fluids
Basalt extends for >1 km at depth
Sediment structure just 150 metres below ultramafic contact
Potential for repeating sediment structures at depth
Gold bearing fluids
Gold bearing fluids
Beta Hunt Mine Invincible Mine
Red Hill Mine
Victory, Revenge
Gold bearing fluids
38
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 successfully tested in August 2016 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
Hand of Faith “HOF” specimens recovered in early 2016 are more than 3km away, along strike and on a different shear than Fathers Day Vein discovery
Plan view of gold targets and drill intersections
Father’s
Day Vein
39
Beta Hunt Mine – Q1 2019 Overview
Beta Hunt Gold Operation1 Q1 2018 Q1 2019 %
Change
Gold tonnes mined (000s) 169 34 -80%
Gold mined grade (g/t Au)3,4 2.54 3.36 +32%
Gold mined – coarse gold / specimens
(ounces) 381 69 -82%
Gold mined (ounces) 13,399 3,647 -73%
Total gold mined (ounces)2,3,4 13,780 3,716 -73%
Gold tonnes milled (000s) 110 50 -55%
Gold mill grade (g/t Au) 2.36 3.20 +36%
Gold Recovery (%) 90% 94% +4%
Gold milled (ounces) 8,372 5,168 -38%
Gold sales (ounces)1 7,978 6,375 -20%
Cash operating costs (US$ per ounce sold) $1,502 $1,076 -28%
AISC (US$ per ounce sold) $1,594 $1,174 -26%
Mined gold ounces in the first quarter were 3,716, down 73% over the same period in 2018
AISC improved to US$1,174 per ounce sold in the first quarter, 26% lower than the first quarter of 2018
Cash operating costs were US$1,076 per ounce sold in the first quarter, 28% lower than the first quarter of 2018
Gold sales were 6,375 ounces in Q1
Adjusted EBITDA1 was $(1.9) million ($(0.00) per share) in the first quarter, an improvement of 13% over the same period in 2018
1. Note: numbers may not add due to rounding 2. The difference in gold sales ounces and gold mined ounces is due to timing differences in receipt of
gold sales depending on completion date of tolling campaigns. 3. Final grades are determined once mined material has been processed. 4. As of March 31, 2019, 48.9 kt of gold mineralization remained on the ROM pad for tolling. 5. Reference is made to the non-IFRS section in RNC’s MD&A for the period ended March 31, 2019.
40
Appendix: Beta Hunt Resource
Beta Hunt Nickel Mineral Resources as at February 1, 20161,2,7,8
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
Beta Hunt Gold Mineral Resources as at December 31, 2017
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.Gold Mineral Resources are reported using a 1.8 g/t Au cut-off grade 4.Mineral Resources described here are based on information compiled by John Vinar, Geology Manager for Salt Lake Mining Pty.Ltd. John Vinar is an employee of Salt Lake and is a member of the
Australasian Institute of Mining and Metallurgy (MAusIMM, 109799). 5.Mineral Resource Estimate as of December 31, 2017 6.Comprises two model areas - Western Flanks South (March 2017 estimate, depleted for mining to March 2017); Beta (2016 PEA resource estimate depleted for mining to August, 2016) 7.Nickel Mineral Resources are reported using a 1% Ni cut-off grade 8.Mineral Resources described here has been prepared by Elizabeth Haren, MAusIMM CPGeo, of Haren Consulting Pty Ltd.
Source: RNC news release dated April 26, 2018 with respect to gold and Beta Hunt Mine PEA dated March 4, 2016 with respect to nickel , both available at www.rncminerals.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.
Resource Indicated Inferred
Kt g/t Koz Kt g/t Koz
A Zone 1.2.3.4.5 672 3.4 75 997 3.1 97
Western Flanks 1.2.3.4.5 1,513 3.0 145 812 3.3 85
Western Flanks East (A Zone Sth) 1.2.3.4.5 136 3.7 16 84 3.3 9
Beta 1.2.3.4.6 32 3.3 3 147 3.4 16
Total 2,353 3.2 239 2,040 3.2 208
41
Orford Mining Corporation (~27% RNC interest) Discovery of New Gold Belt in Northern Quebec
RNC’s holds a ~27% equity interest in Orford Mining Corporation (TSX-V: ORM)
Continued exposure to highly prospective former RNC exploration assets through ownership interest in Orford
Summer 2018 drill program - thicknesses of up to 24.6 metres of gold-bearing mineralization within a structural complex zone
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
Exploration projects in Northern Quebec
42
Dumont Nickel-Cobalt Project Resources and Reserve
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
Resource Category Quantity Grade Contained Palladium Contained Platinum
(000 t) Pd (gpt) Pt (gpt) (000’s ounces) (000’s ounces)
Measured 372,100 0.024 0.011 288 126 Indicated 1,293,500 0.017 0.008 720 335 Measured + Indicated 1,665,600 0.020 0.009 1,008 461 Inferred 499,800 0.014 0.006 220 92
Resource Category Quantity Grade Contained Magnetite
(000 t) Magnetite (%) (000 t) (Mlbs)
Measured - - - - Indicated 1,114,300 4.27 47,580 104,905 Measured + Indicated 1,114,300 4.27 47,580 104,905 Inferred 832,000 4.02 33,430 73,702
1. Reported at a cut-off grade of 0.15 percent nickel inside conceptual pit shells optimized using nickel price of US$7.50 per pound, average metallurgical and process recovery of 43 percent, processing and G&A costs of US$4.33 per tonne milled, exchange rate of C$1.00 equal US$0.77, overall pit slope of 42 degrees to 50 degrees depending on the sector, and a production rate of 105,000 tonnes per day. The qualified person considers that the conceptual pit shells would not be materially different to that if current (2019) conceptual pit optimization assumptions were considered. The technical parameters would be unchanged and with the metal price in Canadian dollars constant due to the decrease in US$ nickel price assumption compensated by corresponding decrease in US$:CAD$ exchange rate, the qualified person considers the reporting cut-off grade of 0.15 percent nickel to be reasonable. Values of cobalt, palladium, platinum and magnetite are not considered in the cut-off grade calculation as they are by-products of recovered nickel. All figures are rounded to reflect the relative accuracy of the estimates. Mineral resources are not mineral reserves and do not have demonstrated economic viability. The Measured and Indicated Mineral Resources are inclusive of those Mineral Resources modified to produce Mineral Reserves.
Mineral Resource Statement, Dumont Nickel Project, Quebec, SRK Consulting (Canada) Inc., May 30, 20191
Grades Contained Metal
Ni Co Pd Pt Ni Co Pd Pt
Category 000 t (% Ni) (ppm) (gpt) (gpt) Mlbs Mlbs 000
oz
000
oz
Proven 163,140 0.33 114 0.031 0.013 1,174 41 162 67
Probable 864,908 0.26 106 0.017 0.008 4,908 202 466 220
Total 1,028,048 0.27 107 0.019 0.009 6,082 243 627 287
Mineral Reserve Statement, Dumont Nickel Project, Quebec, Penswick, May 30, 20191
1. Reported at a cut-off grade of 0.15% nickel inside an engineered pit design based on a Lerchs-Grossmann (LG) optimized pit shell using a nickel price of US$4.05 per pound, average metallurgical recovery of 43%, marginal processing and G&A costs of US$4.10 per tonne milled, long-term exchange rate of C$1.00 equal US$0.75, overall pit rock slopes of 40° to 50° depending on the sector, and a production rate of 105 kt/d. Mineral Reserves include mining losses of 0.33% and dilution of 0.43% that will be incurred at the contact between mineralization and waste. The Proven Reserves are based on Measured Resources included within run-of-mine (ROM) mill feed. Probable Reserves are based on Measured Resources included within stockpile mill feed plus Indicated Resources included in both ROM and stockpile mill feed. All figures are rounded to reflect the relative accuracy of the estimates.
43
Dumont Nickel-Cobalt Project Capital and Operating Cost Summary, Key Assumptions
($ millions) Initial
Capital Expansion
Capital LOM
Capital1,3
Mine $223 $0 $674
Process Plant $346 $335 $729
Tailings $36 $23 $185
Infrastructure $206 $118 $324
Indirect Costs $123 $71 $182
Contingency $83 $53 $137
Total $1,018 $601 $2,230
Operating Costs $ per
pound
$ per tonne ore
milled
Mining $1.22 $2.86
Processing $1.67 $3.90
G & A $0.17 $0.41
Total Site Cost $3.07 $7.17
TC / RC $0.16
Total $3.22
Capital Cost Summary2 Operating Cost Summary2
1. Life-of-mine capital includes $611 million of sustaining capital 2. Numbers may not add due to rounding 3. Additional $26M associated with closure is not included
Source: RNC news release dated May 30, 2019
Parameter Pricing
Nickel Price ($ per pound) $7.75
US$/CDN$ exchange rate $0.75
Platinum Price ($ per ounce) $1,000
Palladium Price ($ per ounce) $1,000
Cobalt Price ($ per lb) $25
Oil ($ per barrel) $60
Key Assumptions
44
Notes
