Direct Nickel Limited March 2012 abr Emerging Global Nickel - PowerPoint PPT Presentation

Direct Nickel Limited March 2012 abr Emerging Global Nickel Producer with Lowest Cost Processing

Mambare 2011/12 program discovers high-grade nickel Mambare Plateau: ● 20km north of Kokoda In 1999 Ananconda District, Oro Province Nickel Limited ● ~ 100km 2 target identified ~5Mt 20 km long, 5-7km wide contained Ni in max. elevation 1200m limonite alone ● Exploration licence area EL1390 ~242km 2 EL 1390  Kododa township  2

Mambare 2011/12 program discovers high grade nickel 3

Mambare 2011 program discovers high-grade nickel Area 1: MAM-KK-0051 – 19.40m from 10.00m at 1.7% Ni 0.06% Co, including 5.80m at 2.82% Ni 0.12% Co from 13.35m, with a peak Ni value of 1m at 3.28% Ni 0.12% Co from 15.95m Area 2: MAM-KK-0077A – 31.15m from 10.00m at 1.12% Ni 0.06% Co, including 6.9m @1.74% Ni 0.05% Co from 28.10m, including 2.30m at 2.10% Ni 0.07% Co from 28.10m MAM-KK-0018 – 22.87m at 1.42% Ni 0.06% Co from 7.73m, including 9.33m at 2.04% Ni 0.05% Co from 16.02m Area 3: MAM-KK-0026 – 35.60m at 0.99% Ni 0.09% Co from 1.3m MAM-KK-0080 – 22.69m at 1.38% Ni 0.06% Co from 11.61m, including 5.05m at 2.23% Ni 0.04% Co from 24.55m

Mambare Nickel Project PNG (50% JV, DNi operator) • One of the world’s great deposits, Anaconda Nickel Limited estimated 5 Mt of contained nickel metal N I C K E L • 1 Mt of nickel metal has an in-ground value of ~US$20 billion • Jan 2012 JV partner Regency Mines plc Mambare announcement of high-grade saprolite discovery • 735 holes drilled, current 135 hole drill program completed, maiden JORC resource Q1/12 • Transport - 120km flat and mostly sealed road to Oro Bay deep water port – a rare advantage 60m wharf, water depth 10.1m, can take 40,000dwt, 180m Handymax class ships 5

What are nickel laterites? • Formed by weathering of a relatively Limonite – common rock type iron rich layer • Abundant • Iron and magnesium-rich layers Nickel straddled by the nickel ore zone Saprolite – ore zone • Flat-lying, layered deposits amenable magnesium to low cost mining and rehabilitation rich layer • Easy to discover and drill out • Soft ore with low grinding cost Weathered • Prolific in SE Asia Source rock Breakaway exposure of full laterite profile at the Pequizeiro deposit, Araguaia Brazil

Laterites – the future supply in nickel • These 10 countries hold 89% of world laterite nickel • The highest typical grades are in Indonesia and PNG • Australia and South East Asia offer the best potential 7

Recovers much more nickel from the same deposit… • One flowsheet for the entire laterite ore profile • Atmospheric pressure, tank leach, 304 stainless plant construction • Recovers 90-95% of nickel in 1 - 4 hours Direct Nickel Process residence time • Much lower technical intensity than HPAL and smelting • Recycles reagent (+95%), environmentally friendly tailings and low emissions • Fully scalable and profitable from 5,000tpa nickel size (under $200m capex) • Produces Mixed Hydroxide Product MHP (40% nickel)

An elegant and robust flowsheet • Uses nitric instead of sulphuric acid • Patents and comprehensive IP protection • Acid consumption of 20-30kg per tonne of ore vs. 500-1,000 kg per tonne using sulphuric 9

High value nickel product: Mixed hydroxide product (MHP) MHP contains Fe 2 O 3 Mag Oxide Ni 40 - 45 % Co 2 – 4 % MHP is a marketable product, also haematite iron and mag oxide co-products. Nickel metal can also be produced 10

100 years of stainless steel – mankind’s favourite alloy Industrial Food areas Building cladding Whitegoods 5% goes into sinks New Delhi bus shelter

Nitrogen compounds are a building block of life • Nitric acid is a very effective reagent for digesting ore but its neutral products readily become benign • Recycling the reagent removes the need to dispose of spent, single-use sulphur chemicals to landfill • Less waste of inputs generated in high opex processes • Residual nitrates can fertilise plant growth during rehabilitation • Direct Nickel process tailings contain low level nitrates that go on to to rejoin the nitrogen cycle • During a lightning flash temperatures reach 30,000°C reacting nitrogen and oxygen to make dilute nitric acid 12

Direct Nickel tailings are growing peas in these trials DNi Tailings neutralised with DNi mag oxide 50% mulch 100% mulch 100% tailings 50% tailings 13

The breakthrough in capital and operating costs All DNi costs independently produced by Aker Solutions Opex Capex (now Jacobs Engineering). Note comparisons show DNi Process to MHP paying at ~75% of LME. Excludes mining costs. $35+ Others US$ per pound of annual capacity $8.00/lb other processes $35 $25 $12.50 DNi $1.83/lb DNi

Direct Nickel Process test plant at CSIRO Perth WA

Resources + Process = Production Direct Nickel is an emerging producer: Our strategy is to • Run Perth test plant with 150 tonne ore bulk samples • Accumulate nickel resources in the ground • Only licensing nickel laterites projects where DNi has a share • Build the JORC resource at Mambare JV (50%) • Build a major nickel producer Dual growth ‘turbines’ to build valuation 1. Accumulating nickel inventory by farm-in and outright acquisition 2. Major revaluation of the Direct Nickel Process by achieving global acceptance of the Direct Nickel Process 16

Quality partnerships & further CSIRO equity investment • 2005 Direct Nickel Pty Ltd founded • 2007 Teck & Oz Minerals invest • 2009 positive Aker Solutions PFS2 2010 CSIRO 1 st equity investment • • 2010 successful commercial scale recycle trial in Charlotte NC • 2010 JV with Regency Mines (50/50) in Mambare Nickel Project • 2012 High grade results from Mambare • 2012 Jan Construction of Perth Test Plant • 2012 Feb CSIRO decides to invest a further $2.3m in equity • Commitment to RTO and ASX listing (The Commonwealth Scientific and Industrial Research Organisation is globally recognised as Australia’s pre-eminent commercial science body and is technical partner to Direct Nickel)

The DNi Management Team – experienced in innovation Julian Malnic – Executive Chairman Professional geologist and experienced company builder who founded Nautilus Minerals Inc. (A$450m market cap, TSX-V & AIM listed ). Chairman of the Sydney Mining Club. Russell Debney – CEO Has worked in resources since 1975 as a commercial & corporate lawyer in the resources space. In 1997 Russell joined Julian in building Nautilus Minerals Inc. and remains a director Graham Brock – CTO & Project Manager A metallurgist with over 40 yrs. experience and a track record of managing large scale nickel projects and processes. Graham is also a Fellow of the Australian Institute of Mining & Metallurgy Richard Carlton – COO Richard is an experienced professional mining engineer who has operated an array of complex mining projects. Richard also has strengths in community liaison and is a Fellow of the Australian Institute of Mining and Metallurgy Ian Bain – Corporate Development Head Formerly Global Head of Mining and Metals Corporate Finance for ABN AMRO Bank NV. 30 years experience with strengths in corporate & banking sectors in mining, metals, oil & gas 18

Multi-billion dollar growth path Based on long term nickel price of US$8.0 / lb Projected Nickel Production Projected Revenue & Income 19

Direct Nickel - well-developed and market ready Growing nickel resources • Mambare, PNG • Indonesia PT DNi • More Momentum Powerful new Proven people process • Continuing track • Exclusive process record in major ownership value creation • Test plant ready 2

Direct Nickel Limited Emerging Graham Brock Julian Malnic Project Executive Global Nickel Manager Chairman Producer with Lowest Cost Russell Debney Processing CEO