THE ELEMENTS OF VALUE CREATION. Developing the Next Great Canadian Base Metal Mine. April 3, 2014

Transcription

1 THE ELEMENTS OF VALUE CREATION Developing the Next Great Canadian Base Metal Mine April 3, 2014

2 Disclaimer Cautionary Statements Concerning Forward-Looking Statements This presentation contains "forward-looking information" including without limitation statements relating to mineral reserve estimates, mineral resource estimates, realization of mineral reserve and resource estimates, capital and operating cost estimates, project and life of mine estimates, construction of the mine and related infrastructure, the timing and amount of future production, costs of production, success of mining operations, ability to obtain permitting by the time targeted, size and ranking of project upon achieving production, economic return estimates and potential upside and alternatives. Readers should not place undue reliance on forward-looking statements. 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. The feasibility study results are estimates only and are based on a number of assumptions, any of which, if incorrect, could materially change the projected outcome. Even with the completion of the feasibility study, there are no assurances that Dumont will be placed into production. Factors that could affect the outcome include, among others: the actual results of development activities; project delays; inability to raise the funds necessary to complete development; general business, economic, competitive, political and social uncertainties; future prices of metals; availability of alternative nickel sources or substitutes; actual nickel recovery; conclusions of economic evaluations; changes in project parameters as plans continue to be refined; accidents, labour disputes and other risks of the mining industry; political instability, terrorism, insurrection or war; delays in obtaining governmental approvals, necessary permitting or in the completion of development or construction activities. The MOU with Tsingshan is non-binding and there is therefore no assurance that the strategic alliance with Tsingshan will result in any transaction or venture with Tsingshan. 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 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 NI Compliance The technical information pertaining to the Dumont project feasibility study in this presentation is based on RNC s technical report dated July 25, 2013 that describes the results of the Dumont project feasibility study and was prepared in accordance with Canadian regulatory requirements by, or under the supervision of, Paul Staples, P. Eng. of Ausenco Limited, Sébastien Bernier, P.Geo. of SRK Consulting (Canada) Inc. and David A. Warren, Eng. of Snowden Mining Industry Consultants, all of whom are independent Qualified Persons as set out in National Instrument Standards of Disclosure for Mineral Projects ("NI "). The Mineral Resource estimate set out in this presentation was classified according to the CIM Definition Standards for Mineral Resources and Mineral Reserves (November 2010) by Sébastien Bernier, P. Geo (OGQ#1034, APGO#1847), Principal Consultant Resource Geology at SRK. The Mineral Reserve estimate set out in this presentation was classified according to the CIM Definition Standards for Mineral Resources and Mineral Reserves (November 2010) by David A. Warren (OIQ ), Principal Consultant Mining at Snowden. All other technical information in this presentation has been prepared by or under the supervision of Alger St-Jean, P. Geo., Vice President, Exploration of RNC and Johnna Muinonen P. Eng., Vice President, Operations of RNC, each a Qualified Person as defined in NI The full Dumont feasibility study, prepared as an NI compliant technical report, is available under RNC s profile on SEDAR at All currency references in U.S. dollars, unless otherwise stated. TSX: RNX 1

3 Developing the Next Great Canadian Base Metal Mine Nickel Market Moving Towards Large Deficits Indonesia ore export ban to result in multiyear market shortages as early as mid-2105 Nickel project cupboard already largely empty Nickel prices could return to ranges of $30,000 to $50,000 per tonne as prices will once again have to rise to force demand in line with available supply RNC s Dumont Nickel Project: A Billion Dollar Opportunity $1.1 billion after-tax NPV 8% World s 3 rd largest nickel reserve, one of Canada s largest base metal operations Structurally low cost project low 2 nd quartile cash costs Excellent mining jurisdiction Abitibi region of Quebec Experienced nickel industry team to deliver the project 2

4 Indonesia Nickel Ore Export Ban Nickel Stocks Could Run Out as Early as Mid-2015 The Indonesia ban removes 25-30% of global nickel supply - equivalent to ALL OF THE OPEC GULF STATES CEASING OIL PRODUCTION (29% of supply). RNC believes the ban unlikely to be overturned. Approximately 3/4 of Chinese NPI production was sourced from Indonesian ore and the export ban will also severely impact nickel producers in Ukraine, Australia, and Japan China has a limited ability to replace Indonesian ore and there is no certainty that significant NPI/FeNi capacity will be built in Indonesia in the near future RNC believes that the Philippines could only supply 5-10 Mt of high grade ore (only 10-20% of Indonesian current exports). Please note that the Philippines has also considered export restrictions as well. The nickel project cupboard was emptied during prior peak and few new projects have been developed to replace them resulting in long-term structural supply shortfall 2013 marked a milestone as the last of the tidal wave of new projects launched in peak in prior nickel cycle began commissioning. A number of these projects continue to struggle Nickel prices could return to ranges of $30-50,000+ per tonne as prices will once again have to rise to force demand in line with available supply The combination of the Indonesia ban and structural supply shortfall will lead to multi-year nickel shortages as early as mid-2015 despite record LME inventories of 290kt and ore stockpiles in China. Demand will need to shrink by 8% by 2016 and cannot exceed 2% annual growth by 2020 in an optimistic supply scenario and most likely no more than 1% growth in a more conservative scenario 3

5 Nickel From Worst to First Nickel has been the best performing base metal in % 10% 5% 0% -5% -10% LME Base Metals Prices 2014 YTD Change (as of March 27) -15% Nickel Tin Aluminum Zinc Lead Copper Source: Metalprices.com 4

6 Indonesia Has Filled Supply Gap Globally by Allowing Export of High-Grade Ore In just 5 years, Indonesia s share of global nickel supply has nearly tripled with most of the increase shipped as unprocessed ore to China Indonesia now equivalent to 2 Saudi Arabias 30% 25% 20% 15% 10% Indonesian Mine Supply as a % of Global Nickel Supply As of Jan. 12, 2014, Indonesian nickel ore exports are ZERO 5% F Source: Wood Mackenzie Ltd. 5

7 Indonesia Ore Export Ban Likely to Stay Strictly Enforced Many commentators cite upcoming elections, various economic, and other issues which will cause Indonesia to water down the ban none of which hold up well under closer observation Political? When the Indonesian parliamentary committee (Commission Seven) responsible for the law was presented with potential exemptions for companies building smelters, all nine factions in the committee voted UNANIMOUSLY against any exemptions Based on RNC research to date, there appears to be little political support from ANY party for exemptions Economic? The central government derives little direct economic benefit from the $1-1.5 billion of annual nickel ore exports particularly compared to the billions of dollars of potential investment which would be required to transform even a fraction of the ore exports into finished product The central government owns 51% of PT Antam, the 2 nd largest nickel producer in Indonesia, which would directly benefit from higher nickel prices Strategic? Any changes to the export ban will reduce the incentive for investment and undercut the rationale for the ban in the first place 6

8 Significant Barriers To Building NPI/FeNi Production in Indonesia Some commentators are also suggesting that substantial capacity could be added quickly in Indonesia. There are a number of key challenges that they may be failing to fully take into account. The nickel ore is located in areas with virtually no infrastructure, few people, and none of the power required to produce NPI/FeNi Unlike NPI plants in China, projects will have to incorporate the construction of a power plant and all of the related support infrastructure. PT Antam the state nickel producer has a project with an estimated capital cost of $1.6 billion for 40ktpa of nickel output $1+ billion investments will be challenging given Indonesia s investment climate (Indonesia ranks 114 th on Transparency International Corruption Perceptions Index between Egypt and Albania) and proposed regulations which would limit foreign ownership to 49% Operating costs could be lower than Chinese NPI production due to reduced ore and coal shipping costs which can be potentially more than offset by differences in labour costs and productivity and the need to source many inputs from outside Chinese companies have a very mixed track record when investing and building mining projects outside China 7

9 China & Indonesia An Important relationship China NOT Self-Sufficient in Nickel China to struggle to replace Indonesian ore as nickel is one of the metals in which China is least self-sufficient Chinese Self-Sufficiency Mine Supply as a % of Demand (2012) 54% 57% 67% 85% 15% 18% 29% <5% Platinum Palladium Nickel Copper Iron Ore (62% Fe-eq) Lead Aluminium (Bauxite) Tin Zinc Source: USGS, Wood Mackenzie Ltd., Macquarie Research, RNC Analysis 8

10 Few Alternatives for High Grade Laterite Ore Outside Indonesia There are few alternatives for high grade laterite ore outside Indonesia. RNC estimates that the Philippines could supply a maximum of 5-10 Mt of high grade ore (10-20% of current Indonesian exports) and New Caledonia only exports ore to partners in Japan and Korea. Source: Glencore: The Realities of the Nickel Market, November

11 New Nickel Supply Fundamental Issue: An Empty Project Cupboard Even without the strict implementation of the ban, the fundamental issue facing the nickel industry by is an empty project cupboard At the beginning of the last decade prior to the significant run-up in nickel prices, the project cupboard was very full with many projects known for decades Today s picture is very, very different, setting the stage for an exciting nickel cycle Laterite (ferronickel) Laterite (HPAL) Sulphide Project Cupboard 2001 (20+kt) TOTAL: 500+ kt Barro Alto Koniambo Onca Puma Tagaung Taung Ambatovy Goro Ramu Ravensthorpe Weda Bay Talvivaara* Kabanga Voisey s Bay Project Cupboard 2014 (20+kt) TOTAL: 200+kt Tsingshan (Indonesia) Weda Bay Dumont Enterprise Kabanga Nova-Bollinger *bioheapleaching process Laterite (ferronickel) Laterite (leach) Sulphide 10

12 RNC Forecast Nickel Supply Tidal Wave Projects New supply growth from the tidal wave of new projects financed during prior nickel cycle is still <40% of capacity and RNC expects that it will only reach 60%+ by 2020 Global Nickel Demand Growth Vs. Potential Supply ,000+ Projected Nickel Demand Growth Nickel Supply In Construction Nickel Supply Tidal Wave High Nickel Price Scenario Ramping Up or In Construction (Kt) Project Annual Capacity VNC (Goro) Ambatovy Koniambo Onca Puma Talvivaara Barro Alto Ravensthorpe Ramu Taganito Santa Rita Eagle Niquelandia Kevitsa RNC Forecast Total Source: Wood Mackenzie Ltd., RNC Analysis 11

13 RNC Forecast Nickel Supply New Large Projects Many of the new large scale projects will struggle to be financed and be put into production by 2020 Nickel Supply Growth: New Projects (Kt) Project Annual Capacity Weda Bay 35 Kabanga 20 Enterprise 40 Nova-Bollinger 28 Dumont (1 st Phase) 33 1 Tsingshan (Phase I&II) 60 RNC Forecast Total Source: Company reports, RNC Analysis 1. Average production over phase 1 of mine life 12

14 RNC Forecast New Nickel Supply The source of future nickel supply growth is NOT clear HPAL? Large capex overruns (projects $5+ billion), numerous delays and start-up issues Operating costs also much higher than anticipated FeNi? Best projects already being developed No new large scale high-grade (2%+) discoveries for over 30 years Sulphides? Largely empty project pipeline only Enterprise, Nova-Bollinger, Dumont Future growth likely to come from large scale, lower grade deposits NPI? Largely dependent on availability of higher grade Indonesian ore No NEW technology China now using 30+ year old RKEF technology + hot charging Combination of lower grade ore and higher input costs will drive costs higher 13

15 RNC Forecast - Supply / Demand Balance Nickel prices will once again have to rise to force demand in line with available supply as in ($30,000-$50,000+/t), particularly 2016 when demand must DECLINE by 8%+ to balance the market 2,800 2,600 2,400 2,200 2,000 1,800 1,600 1,400 1,200 1, ,542 Source: Wood Mackenzie Ltd,, RNC Analysis Nickel Supply / Demand Forecast (Kt) ,621 Underlying Demand New NPI / Price Driven 418 Demand Destruction Demand (constrained by available supply) NPI Existing Supply 14

16 12% 10% 8% 6% 4% 2% 0% Nickel Supply Little Project Development for 35+ Years Nickel prices increased 10X (from <$5,000 to $50,000+/t) during to force demand in line with supply. How high will prices have to rise to generate an even higher amount of required demand destruction during ? 6.5% Global Nickel Supply Growth Traditional vs. Alternative (% CAGR) Japan FeNi Stainless Demand Destruction 3.3% FSU Collapse 1.4% 2.8% NPI 3-4% 1-2% F Source: Wood Mackenzie, Macquarie, RNC Analysis 5.4% 10.7% Demand Forecast 4-5% Traditional Supply Stainless demand destruction helped bring nickel demand in line with available supply during the period After unprecedented supply growth in , supply to struggle during Given forecast supply growth of just 1-2% annually during , demand destruction of 3-4% or almost 75-80% of demand must be achieved to balance the market during

17 Developing the Next Great Canadian Base Metal Mine Nickel Market Moving Towards Large Deficits Later this Decade Continued strong demand growth led by China Nickel market supply not ready for the next upturn NPI (nickel pig iron) not the answer this time Indonesia ore export ban to result in market shortages as early as mid-2105 RNC s Dumont Nickel Project: A Billion Dollar Opportunity $1.1 billion after-tax NPV 8% World s 3 rd largest nickel reserve, one of Canada s largest base metal operations Structurally low cost project low 2 nd quartile cash costs Excellent mining jurisdiction Abitibi region of Quebec Experienced nickel industry team to deliver the project 16

18 Developing the Next Great Canadian Base Metal Mine Broad Mining Experience Proven management depth and mining industry experience Former senior members of Inco and Falconbridge management Strategic Asset World s 3 rd largest nickel reserve, a top 5 nickel sulphide operation Over $27 billion in nickel production over 33 year project life Structurally low cost project- low 2 nd quartile cash costs ($9,502/t) Excellent Jurisdiction Outstanding mining jurisdiction Abitibi region of Quebec Well-defined permitting process, low cost power ($C0.045/kWh) Major support infrastructure in place (road, rail, gas, power, townsite) Significant Value Creation Potential TSX: RNX $1.1 billion project after-tax NPV 8%, 15.2% $19,842/t LT Ni price Comparable to world s leading base metal projects Note: Price and exchange rate assumptions contained in Key Assumptions table found on slide 38 of this presentation 17

19 Dumont Project Feasibility Study Results $1.1 billion NPV 8% at $19,842/t ($9.00/lb) nickel 33 year project life $1.2 billion initial capital investment (52.5ktpd operation) Double capacity by fifth year for $0.9 billion $9,502/t ($4.31/lb) cash cost low 2 nd quartile Initial nickel production of 33kt annually expanded by year 5 to 51kt annually for remainder of 20 year mine life Recovery: 53% initial phase, 48% in expansion phase and 43% over project life (includes lower grade stockpile) Ferronickel Button Produced Directly from Dumont Concentrate in Preliminary Testwork Project team led by Ausenco Significant Upside Potential Iron ore (magnetite) by-product, downstream processing options & open pit optimization 18

20 Highly Experienced Management Team & Board D I R E C T O R S M A N A G E M E N T Scott M. Hand - Former Chairman & CEO of Inco Limited Peter C. Jones - Former President & COO of Inco Limited Peter Goudie - Former Executive Vice President, Marketing at Vale Inco and Inco Limited Frank Marzoli - Chairman, President and CEO of Marbaw International Nickel Corporation Gilles Masson - Former Partner at PricewaterhouseCoopers LLP (25 years) Tyler Mitchelson - Group Head, Integration at Anglo American; Former CEO of RNC and former VP at Vale Inco Darryl Sittler - Director of Wallbridge Mining Company Limited Mark Selby - Former SVP, Business Development at RNC, previously held senior positions at Quadra and Inco Interim CEO - Over 20 years experience in finance at various companies Fraser Sinclair - Former CFO Romarco Minerals Inc. and North American Palladium Ltd. Chief Financial Officer - Over 30 years financial experience Alger St-Jean - 15 years in the mining industry, primarily focused on nickel Vice President, Exploration - Former Senior Geologist with Xstrata Nickel (formerly Falconbridge) Johnna Muinonen - Strong technical and operating mineral processing background; 9 years at Vale Inco / Inco limited Vice President, Operations - Recently in project management group in Vale Inco, project leader for Vale ultramafic project Rachel Yang - Track record of success accumulated over 15 years of experience building large scale projects Project Director - Formerly Project Director for SNC-Lavalin TSX: RNX 19

21 1 Billion Tonne Reserve + Upside Potential Reserve Estimate (Snowden June 17, 2013) Resources Grade Contained Metals (Mt) (%) (Bln lbs) (Mt) Proven Probable Total 1, ,149 Source: Technical Report on the Dumont Ni Project, Launay and Trecesson Townships, Quebec, Canada, July 25, 2013, available at and on Resource Estimate (SRK April 30, 2013) inclusive of Mineral Reserves Resources Grade Contained Metals (Mt) (%) (Bln lbs) (Mt) Measured Indicated 1, Measured + Indicated 1, Inferred Source: Technical Report on the Dumont Ni Project, Launay and Trecesson Townships, Quebec, Canada, July 25, 2013, available at and on Mineral resources that are not mineral reserves do not have demonstrated economic viability. TSX: RNX 20

22 Structurally Low Cost Project in Excellent Jurisdiction Dumont is located in close proximity to low cost power, road, rail and a skilled work force; within an excellent mining jurisdiction Location Advantages All major support infrastructure in place (road, rail, power, water) Competitive electricity costs Significant communities nearby; long history of resource development (eliminates need for onsite camp) 21

23 Structurally Low Cost, Large Scale Project Thickeners Proven, Conventional Technology RNC will utilize proven, conventional ore processing technology that makes full use of infrastructure and jurisdictional advantages. These key factors help position Dumont as a low-risk, low-cost and high-value project. Process Water Flotation Cells Simple flowsheet (SAG + 2 ball mills) x 2 Low strip ratio 1.2:1 Single high grade 29% nickel concentrate Non-acid generating waste rock and tailings Reagent Mixing Ball Mills (grinding) Hydrocyclones (desliming) SAG Mill (grinding) Feed Conveyor 22

24 Improved Project Design to Reduce Risk, Improve Operational Reliability and Achieve Project Objectives A key focus during the feasibility study was reducing risk and achieving improvements in operational reliability to minimize project startup issues Project Element Relocated waste and low-grade storage stockpiles, redesigned pit Relocated the mill to a larger rock outcrop Replaced single large rope shovel at project start-up with two smaller hydraulic shovels Reduced mining footprint in first 5 years of operations Impact Minimizes potential operating impact from noise and dust emissions Reduces geotechnical risk, particularly at critical early capital stages of the project Increases operating flexibility, eliminates single point of failure during early stages Reduces ramp-up and mining risk Increased size of regrind mill Maintained mining rate at ~2X milling capacity to decouple mine & mill operation Developed more detailed construction and execution plan incorporating seasonality and site specific factors Increases operating flexibility, reduces key process risk Provides significant operational flexibility, optimizes the value of material processed Improves quality of capital estimates, reduces risk of capital cost overruns TSX: RNX 23

25 Risk Reduction Redesigned Site Layout Relocated waste and low-grade storage stockpiles and redesigned pit to minimize potential impact from noise and dust emissions (away from previous location near highway) Relocated the mill to a larger outcrop to reduce geotechnical risk Tailings Mill Tailings Low Grade Stockpile Open Pit Waste Rock Dump Overburden Stockpiles 24

26 Feasibility Study Economic Summary Units PFS Revised PFS Feasibility Study Dec. 16, May 14, Jun. 17, Ore Mined Mt 1,070 1,066 1,179 Strip Ratio Waste : Ore Nickel Recovery % nickel Project Life Years Annual Production (contained) Nickel (life of mine) Mlbs (kt) 96 (44) 108 (49) 104 (47) Nickel (life of project) Mlbs (kt) 82 (37) 91 (41) 90 (41) Cobalt (life of project) Mlbs (kt) 6 (3) 4 (2) 4 (2) PGEs (life of project) Koz Total C1 Cash Costs $/lb Ni ($/t Ni) $4.68 ($10,582) $4.32 ($9,524) $4.79 ($10,560) By-product Credits $/lb Ni ($/t Ni) $0.55 ($1,213) $0.25 ($551) $0.48 ($1,058) Net C1 Cash Costs $/lb Ni ($/t Ni) $4.13 ($9,105) $4.07 ($8,973) $4.31 ($9,502) Average EBITDA 4 $M $410 $470 $427 Average Free Cash Flow 4 $M $228 $262 $238 Initial Capital $M $1,112 $1,112 $1,191 Total Capital $M $2,578 $2,680 $2,843 Pre-Tax NPV 8% $M $1,918 $2,437 $2,003 Pre-Tax IRR 20.2% 23.5% 18.7% Post-Tax NPV 8% $M $1,083 $1,420 $1,137 Post-Tax IRR 16.6% 19.5% 15.2% 1. Includes transportation of concentrate 2. Based on $19,842/t ($9/lb) Ni, $26,455/t($12/lb) Co, $1,500/oz Pt, $750/oz Pd ; revised PFS is base case + trolley assist. 3. Based on price and exchange rate assumptions contained in Key Assumptions table found on slide 38 of this presentation 4. Average over 20 year-mine life. Over 33-year project life average annual EBITDA is $381 million per year and average annual cash flow is $228 million per year. Source: RNC news release dated June 17,

27 Upside Potential: Alternative Downstream Processing Options and Iron Ore (Magnetite) By-product Engaged in discussions with companies, including Tsingshan, to process Dumont concentrate to produce nickel oxide and/or ferronickel Potential benefits: Lower costs simpler processing Higher recoveries high-grade ferronickel or nickel oxide more payable nickel Greater flexibility opens door for many potential partners and customers Metallurgical testwork shows that a high grade iron ore (magnetite) concentrate can be produced and marketed 1 Highlights: Testwork indicated an average of 2.6% of total feed recovered as a 63.5% magnetite conc. Potential to add value through addition of meaningful by-product credit and improvement to net cash costs Mineral Resource Statement, Dumont Nickel Project SRK Consulting, April 30, Resource Category Quantity Magnetite Contained Magnetite (000 t) (%) (000 t) (Mlbs) Indicated 1,114, , ,905 Inferred 832, ,430 73,702 Ferronickel Button Produced Directly from Dumont Concentrate in Preliminary Testwork 1.Based on CRU Strategies forecast incorporating value-in-use calculations (April 12, 2012, Real 2011$): additional estimated operating costs of $0.18 per tonne milled. Estimated transport costs of $C 47/tonne FOB price of $94 per tonne. Capital to build 100 ktpd circuit ~$98 M, Including $22 M contingency 2.See RNC technical report dated July 25, 2013, available on Mineral resources that are not mineral reserves do not have demonstrated economic viability. Note: Alternative downstream processing options were not included in the feasibility study in order to simplify the project and reduce implementation risk. 26

28 Tsingshan Strategic Alliance Leads to World s 1 st Integrated Stainless Steel Plant Utilizing Sulphide Concentrate Tsingshan currently constructing the world s first integrated nickel pig iron ( NPI ) plant to directly utilize nickel sulphide concentrate as part of the stainless steel production process The plant, located in China, is expected to begin operation in 2014 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 payability 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 recently implemented nickel ore export ban 27

29 Project Development Pre-feasibility Revised Pre-feasibility Partner Process Project Financing Feasibility Permitting Construction Commissioning & Ramp Up Continuing to Advance Project Only Financing & Permits Remain Project Milestones Completed Nov 2011 Pre-feasibility study results: $1.1 billion after-tax NPV 8% Dec 2011 Project notice to begin environmental permitting process Site work to support feasibility study on schedule Nov 2011 PFS community consultation process completed Jan 2012 Rothschild appointed Project Finance Advisor Feb 2012 Application to secure industrial power rates April 2012 Magnetite concentrate study May 2012 Revised prefeasibility study results Aug 2012 Project Director appointed Oct 2012 Downstream Options announcement Nov 2012 Environmental Impact Study June 2013 Feasibility Study Near Term Catalysts to Unlock Value 2014 Target for project financing 2014 Project permits TSX: RNX 28

30 Financing Options RNC intends to pursue project financing options that minimize shareholder dilution as it did during the feasibility study stages In addition to the target of approximately $ million in project debt, there are a number of other sources of potential financing which will likely be less dilutive than raising equity Sale of direct minority interest in project Subordinated debt structures Monetization of precious metal streams (PGMs) Offtake financing Conversations have occurred with multiple parties during the past year and are ongoing Several additional interested parties elected to wait until the feasibility study was completed before entering into further discussions 29

31 Developing the Next Great Canadian Base Metal Mine 3 rd Largest Nickel Reserve A Top 5 Nickel Sulphide Operation Total Contained Nickel Mineral Reserves (Mt) By Deposit (Top Five Deposits) Dumont Expected to be Among Largest Nickel Sulphide Operations (RNC 105ktpd (LOM) vs 2012 production for other projects) (kt/year) High Risk Jurisdiction Sulphide Laterite Taimyr Penninsula (Norilsk) Jinchuan Dumont (Royal Nickel) Murrin Murrin (Glencore) Soroako (PT Inco) Norilsk Jinchuan Vale Sudbury Voisey's Bay RNC Dumont Life-of-Mine Source: Company reports and Wood Mackenzie Ltd. (December 2011) 30

32 C1 Cash Cost ($/lb) Developing the Next Great Canadian Base Metal Mine One of the lowest cash cost nickel projects - Dumont is expected to be a low cash cost producer over the entire project life with low 2 nd quartile cash costs Dumont C1 Cash Costs vs 2012 C1 Cash Costs of Global Nickel Operations Dumont First Phase: $8,840/t ($4.01/lb) Dumont Life of Project: $9,502 ($4.31/lb) Cumulative Percentile (Mlbs) Source: RNC technical report dated July 25, 2013, Wood Mackenzie Ltd. 31

33 $ 000s Developing the Next Great Canadian Base Metal Mine Dumont initial capital intensity is much lower than comparable large scale nickel projects as Dumont has a number of structural advantages which contribute to low capital and operating costs. Capital Cost Intensity (US$000 Capex / Ni Production tpa) Selected Nickel Projects Sulphide Laterite Sulphide Open Pit Laterite Ferronickel Laterite HPAL Source: RNC technical report dated July 25, 2013, publicly available disclosure, Wood Mackenzie Ltd. (figures shown to two significant digits) 32

34 Developing the Next Great Canadian Base Metal Mine One of Canada s Largest Base Metal Mines Dumont will be one of the largest base metal mines in Canada, behind only Voisey s Bay and, until expansion, Highland Valley Largest Canadian Base Metal Mines Annual Production (Ni-Eq. kt) 1 Top 5, Selected Others Largest Canadian Base Metal Mines Annual Production (Cu-Eq. kt) 1 Top 5, Selected Others Based on RNC analysts. All mines based on reported 2012 production with exception of Dumont (technical report-july 25, 2013) expected Phase I and Phase II life of mine production, Gibraltar Expansion (Taseko website) life of mine production and Mt. Milligan ( company website) life of mine production. Ni-eq., Cu-eq production calculated using the average long-term prices per tonne as of May 31, 2013 based on the 4 of 5 analysts who cover RNC and regularly publish commodity forecasts : Au: $1,250/oz, Cu: $6,283, Mo: $29,542, Ni: $19,842, Zn:$2,

35 $8.27 $10.06 $11.13 $6.88 $8.61 $8.06 $6.95 Dumont A Leading Base Metal Project Nickel Industry Following Copper Industry to Larger Scale, Lower Grade Dumont recoverable ore value is consistent with leading copper projects and other large scale base metal operations in Canada Selected Projects - NSR / Revenue per tonne NSR ($/t ore) Site Operating Costs ($/t ore) $24 RNC Life of Mine (20 yrs) $19 RNC Life of Project (33 yrs) Mid-Tier Core Projects $24 $23 $14 Large Single Asset Companies $21 $19 $11 Large Scale Canadian Base Metal Operations $20 $17 $13 Recovered nickel of kg/t at Dumont is consistent with: 0.5% Cu-eq grade (at 85% recovery and $6,300/t long-term Cu price) 0.11% Mo-eq grade (at 80% recovery and $29,500/t long-term Mo price) Values above sourced from latest publicly available technical reports filed on each project and reflects the base case pricing used in each report. Producing properties sourced from financial statements for recent periods selected when pricing consistent with long-term average pricing. Sources are detailed on slide 39 of this presentation. 34

36 Developing the Next Great Canadian Base Metal Mine Broad Mining Experience Proven management depth and mining industry experience Former senior members of Inco and Falconbridge management Strategic Asset World s 3 rd largest nickel reserve, a top 5 nickel sulphide operation Over $27 billion in nickel production over 33 year project life Structurally low cost project- low 2 nd quartile cash costs ($4.31/lb) Excellent Jurisdiction Outstanding mining jurisdiction Abitibi region of Quebec Well-defined permitting process, low cost power ($C0.045/kWh) Major support infrastructure in place (road, rail, gas, power, townsite) Significant Value Creation Potential TSX: RNX $1.1 billion project after-tax NPV 8%, 15.2% $9.00/lb LT Ni price Comparable to world s leading base metal projects Note: Price and exchange rate assumptions contained in Key Assumptions table found on slide 38 of this presentation 35

37 Appendix 1 Sources 36

38 1 Billion Tonne Reserve Mineral Reserve Statement, Dumont Nickel Project, Snowden, June 17, 2013 Grades Contained Metal Category Quantity (000 t) Ni % Ni Co (ppm) Pd (gpt) Pt (gpt) Ni Mlbs Co Mlbs Pd 000 oz Pt 000 oz Proven 179, , Probable 999, , Total 1,178, , Mineral Resource Statement (inclusive of mineral reserves), Dumont Nickel Project, SRK Consulting (Canada) Inc., April 30, 2013 Resource Category Quantity Grade Contained Nickel Contained Cobalt (000 t) Ni (%) Co (ppm) (000 t) (Mlbs) (000 t) (Mlbs) Measured 372, ,050 2, Indicated 1,293, ,380 7, Measured + Indicated 1,665, ,430 9, Inferred 499, ,300 2, Resource Category Quantity Grade Contained Palladium Contained Platinum (000 t) Pd (gpt) Pt (gpt) (000s ounces) (000s ounces) Measured 372, Indicated 1,293, Measured + Indicated 1,665, , Inferred 499, Resource Category Quantity Magnetite Contained Magnetite (000 t) (%) (000 t) (Mlbs) Measured Indicated 1,114, , ,905 Measured + Indicated 1,114, , ,905 Inferred 832, ,430 73,702 Source: RNC technical report dated July 25, 2013, available on Mineral resources that are not mineral reserves do not have demonstrated economic viability. TSX: RNX 37

39 Key Assumptions Parameter Long Term Nickel Price ($ per pound) $9.50 $10.00 $10.50 $9.00 Nickel Price ($ per tonne) $20,944 $22,046 $23,148 19,842 US$/CDN$ exchange rate $0.95 $0.95 $0.90 $0.90 Platinum Price ($ per ounce) $1,800 $1,800 $1,800 $1,800 Palladium Price ($ per ounce) $700 $700 $700 $700 Cobalt Price ($ per pound) $14 $14 $14 $14 Cobalt Price ($ per tonne) $30,865 $30,865 $30,865 $30,865 Electricity (CDN$ per kilowatt hour) $ $ $ Oil ($ per barrel) $90 $90 $90 $90 Note: Price assumptions for nickel, cobalt, platinum and palladium based on average forecasts for group of five institutions currently covering RNC where published forecasts are available (4 of 5 analysts for long-term nickel price as of April 25, 2013). Oil price assumption based on Thomson Reuters analyst consensus estimates. 38

40 Summary of Source Information Project Source Price Assumptions Au; Ag; Pd; Pt: $/oz, Others $/lb Additional Comments RNC Dumont Technical report dated, July 25, 2013 Long term Ni $9; Co $14; Pt $1,800; Pd $700 All figures based on feasibility study highlights reported in news release. Inmet, Cobre Panama Basic engineering report, May 2012 Cu $2.75; Au $1,250; Mo $15.00; Ag $20 All figures quoted directly from basic engineering report except NSR/revenue per tonne, calculated by dividing total project NSR by total ore milled. Quadra FNX, Sierra Gorda Technical report, June 8, 2011 Cu $2.50; Mo $12.00 Au $1,000 All figures except NSR directly from technical report. NSR calculated using Table by multiplying total payable metals X (base metal price assumptions less treatment charges for each metal outlined in Section 23.4) divided by total ore milled. Site operating costs calculated as operating costs less transport and port costs. Antares, Haquira (First Quantum) Technical report, September 2, 2010 Cu $2.25; Au $907 Mo $13.00 Capex directly from technical report. As a PEA level report, in-pit resources (M,I &I) used instead of reserves. No after-tax NPV was calculated. NSR calculated from Table 1-7 from revenue less tax royalty divided by tonnes milled. Site operating costs calculated by dividing total project site operating costs by total material mined less waste moved. HudBay Minerals Constancia Technical report, Oct. 15, 2012 Long term Cu $2.75; Mo $14.00; Au $1,150; Ag $23.00 All figures quoted directly from technical report. Terrane, Mt. Milligan (Thompson Creek) Technical report, October 23, 2009 Cu $2.00; Au $800; All figures quoted directly from technical report. Augusta, Rosemont Copper Feasibility study update August 15, 2012 Cu $2.50; Mo $15.00 Assumes Cu price of $3.50/lb in year 1, $3.25/lb in year 2, $3.00/lb in year 3, $2.75/lb in year 4, and $2.50/lb in year 5 and thereafter, and a Mo price of $15.00/lb throughout the mine life. Capstone, Santo Domingo Technical Report, Sep. 28, 2011 Cu $2.50; Magnetite $1.00/dmtu Fe; Au $1,000 All figures directly from technical report. Site operating costs calculated as operating costs less port facility costs. Teck Highland Valley Full Year 2009 Financials March 23, 2010 Cu $2.34; Mo $11 Revenue per tonne calculated from revenue divided by tonnes milled for the Highland Valley operation. Thompson Creek Endako 10Q- 2 nd quarter 2010 Date Aug. 5, 2010 Mo $15.66 Revenue per tonne calculated from revenue divided by tonnes milled for the Endako operation. Taseko Mines, Gibraltar Full Year 2011 Financials March 12, 2012 Cu $2.31; Mo $11.32 Revenue per tonne calculated from revenue divided by tonnes milled for the Gibraltar operation. 39

41 Appendix 2 Additional Information 40

42 Feasibility Study Capital and Operating Cost Summary ($ millions) Capital Cost Summary Initial Capital Expansion Capital LOM Capital 1 Mine Process Plant ,220 Tailings Infrastructure Indirect Costs Contingency Total 1, ,843 1 Life-of-mine capital includes $761 million of sustaining capital Operating Cost Summary Operating Costs $ per tonne $ per tonne 2 Mining 3, Processing 4, G & A Total Site Cost 7, TC / RC 2,800 By-products (1,058) Total 9,502 2 $/tonne ore milled Structurally Low Cost Simplified flowsheet (SAG + 2 ball mills) x 2 Low strip ratio 1.2:1 Low electricity costs C$ 4.5 cents/kwh Single concentrate Non-acid generating waste rock and tailings Major support infrastructure in place Source: RNC technical report dated July 25,

43 Dumont Feasibility Study Highlights After-Tax NPV 8% (US$ millions) $1,137 After Tax IRR 15.2% Initial Capital (US$ millions) $1,191 Project Life (years) ktpd 105 ktpd Stockpile Average Ni Production (kt/year) Net (C1) Cash Costs (US$/t) $8,840 $9,833 $9,171 $9,502 Concentrator Nickel Recovery 53% 48% 34% 43% Strip Ratio NSR (US$/t) $30.90 $22.63 $13.67 $19.40 Site Operating Costs (US$/t) $11.39 $10.31 $5.34 $ is a transition year with expit operations being completed by end of Q Totals include pre-stripping of 55 Mt, including 21 million tonnes of ore and 34 million tonnes of waste before mill production commences. Source: RNC technical report dated July 25,

44 Post-tax NPV 8% Reconciliation NPV improvements generated from higher mill throughput, PGE credits, and additional resource was more than offset by royalty sales (which provided very nondilutive financing) and increases in capital, higher mining costs, and lower recoveries Increase/(Decrease) NPV Reconciliation to Revised PFS ($ millions) vs. Revised PFS Revised PFS NPV 8% - Base Case with Trolley Assist $1,420 Higher mill throughput 143 PGE by-product credits 88 Additional reserves 34 Higher capital costs (59) Higher mining costs (186) Lower mill recoveries (205) Project related impact (185) Royalty financings (104) Other 6 Feasibility Study NPV 8% $1,137 Source: RNC technical report dated July 25,

45 $15 Million Royalty Financing from Red Kite, A Leading Global Mining Investor RNC s Dumont project received a significant endorsement when RK Mine Finance ( Red Kite ) agreed to purchase a 1% net smelter return royalty for $15 million Red Kite Royalty Financing Key Takeaways Royalty deal signed on May 9, 2013, closed on May 10, 2013 RNC received $15 million in exchange for a 1% NSR royalty in Dumont Red Kite performed their own review on Dumont in advance of signing As mining finance company, there is potential to work further with Red Kite as we advance Dumont Who is Red Kite? Provider of project finance and metal off-take agreements to mining projects Over $3.5 billion under management and $1.7 billion dedicated to mine finance Closed 9 publicly disclosed mine financing deals in last 12 months including: Nevada Copper: $200M loan + off-take Dart Mining: $A10M royalty + equity Western Lithium: $20M royalty Golden Predator: $35M loan + off-take Augusta Resource: $ 83M loans + copper concentrate off-take 44

46 Ressources Quebec $12 million NSR Financing Ressources Québec s investment in Dumont demonstrates their confidence in the project and is an example of Quebec s commitment to the responsible development of its resources Ressources Quebec s NSR Financing Takeaways NSR deal signed on August 1, 2012 RNC received Cdn$12 million in exchange for a 0.8% NSR royalty and a 2% interest in Dumont RNC has the right to repurchase the entire NSR royalty and property interest for $40 million after the fifth anniversary Ressources Quebec completed a review of all aspects of RNC and the Dumont project to its own satisfaction About Ressources Quebec Investment subsidiary of Investissement Quebec Specialized in mining and hydrocarbon industries Consolidates and spurs government investment in projects carried out by mining companies 45

47 Notes 46

48 Corporate Overview Share Structure: Basic Shares Outstanding 1 : 94.4 million Options (average exercise price: C$0.67) 4.5 million Deferred/Restricted Share Units 2.1 million Contingent Shares 7.0 million Fully Diluted Shares Outstanding: million Directors and Officers Share Ownership: ~9% Largest Shareholder RAB Special Situations (Master) Fund Limited: ~17% Balance Sheet Highlights 2 : Cash and Cash Equivalents: C$11.9 million Current Tax Receivable: C$ 3.3 million Working Capital: C$13.5 million Market Capitalization: C$49 million 1. Shares outstanding, fully diluted shares outstanding and shareholdings as at March 18, Balance sheet highlights as at December 31, 2013; market capitalization at March 19, 2014 TSX: RNX 47