ROYAL NICKEL CORPORATION Developing the Next Great Canadian Base Metal Mine November 2014 TSX: RNX
Disclaimer Cautionary Statements Concerning Forward-Looking Statements This presentation contains "forward-looking information" including without limitation statements relating to the outlook for the nickel market, concentrate anticipated to be produced at the Dumont project and the nickel price. 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. There are no assurances that Dumont, or any of RNC s other property interests, will be placed into production. Factors that could affect the outcome include, among others: the actual results of development activities at Dumont and exploration activities at Aer-Kidd and West Raglan; project delays; inability to raise the funds necessary to achieve the milestones or complete development of Dumont and inability to raise the funds necessary to advance exploration activities; 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. 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. NI 43-101 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 43-101 Standards of Disclosure for Mineral Projects ("NI 43-101"). 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 121481), 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 43-101. Reference is made to the full Dumont feasibility study and West Raglan report, each prepared as an NI 43-101 compliant technical report, which are available under RNC s profile on SEDAR at www.sedar.com. Information concerning third parties in this presentation is taken from sources that RNC believes to be reliable, but RNC has not verified the information and does not assume responsibility for such third party information. All currency references in U.S. dollars, unless otherwise stated. 2
3
4
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 pre-ban exports). Please note that the Philippines has also considered export restrictions. 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 2006-2007 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 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 5
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 35% 30% 25% 20% 15% Indonesian Mine Supply as a % of Global Nickel Supply As of Jan. 12, 2014, Indonesian nickel ore exports are ZERO 10% 5% 2005 2006 2007 2008 2009 2010 2011 2012 2013 Source: Wood Mackenzie Ltd. 6
Indonesia Ban to Remain in Place, Significant Barriers To Building NPI/FeNi Production Indonesia ban to remain in place as expected, elections had little impact. Some commentators are also suggesting that substantial capacity could be added quickly in Indonesia ignoring a number of key challenges which should be fully taken 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 $1+ billion investments will be challenging given Indonesia s investment climate (Indonesia ranks 114 th on Transparency International Corruption Perceptions Index between Egypt and Albania) and proposed regulations which would limit foreign ownership to 49% Operating costs could be lower than Chinese NPI production due to reduced ore and coal shipping costs which can be potentially more than offset by differences in labour costs and productivity and the need to source many inputs from outside Chinese companies have a very mixed track record when investing and building mining projects outside China 7
Few Alternatives for High Grade Laterite Ore Outside Indonesia There are few alternatives for high grade laterite ore outside Indonesia. RNC estimates that the Philippines could supply a maximum of 5-10 Mt of high grade ore (10-20% of current Indonesian exports) and New Caledonia only exports ore to partners in Japan and Korea. Source: Glencore: The Realities of the Nickel Market, November 2013 8
China & Indonesia An Important relationship China NOT Self-Sufficient in Nickel China to struggle to replace Indonesian ore as nickel is one of the metals in which China is least self-sufficient Chinese Self-Sufficiency Mine Supply as a % of Demand (2012) 54% 57% 67% 85% 15% 18% 29% <5% Platinum Palladium Nickel Copper Iron Ore (62% Fe-eq) Lead Aluminium (Bauxite) Tin Zinc Source: USGS, Wood Mackenzie Ltd., Macquarie Research, RNC Analysis 9
Nickel Portside Indonesian Ore Stocks are Declining and Ore Prices are Up US$/wmt FOB 8.4 8.3 7.8 7.4 7.2 7.2 6.4 17.0 17.5 17.4 17.6 18.1 18.9 18.3 17.6 16.9 16.6 16.2 15.1 14.7 14.4 14.3 14.0 13.5 13.2 13.1 12.9 12.4 11.9 11.3 10.9 10.7 10.5 10.3 10.1 10.0 9.8 9.4 9.0 8.7 8.7 8.6 8.5 8.2 7.9 7.9 7.8 7.8 7.6 6.3 6.5 6.0 5.4 5.5 5.6 5.6 5.5 5.3 5.8 6.1 6.1 6.5 9.9 10.7 11.4 11.8 12.3 12.5 12.5 12.9 13.2 13.6 14.1 14.7 14.9 15.0 15.2 15.1 15.8 16.2 16.2 15.9 16.1 16.1 The price of nickel ore in China has more than doubled in 2014 150 140 130 120 110 100 90 Nickel Ore Prices (2014 YTD 17-Nov) Laterite 1.8% Ni Ore (12-18% Fe) Until Jan 12: Indonesia Post Jan 12: Philippines 25 20 Portside Indonesia nickel ore stocks in China have declined as expected Chinese Nickel Ore Stocks Total (Mt) 80 70 60 15 Philippines ore 50 40 30 20 Laterite 1.5% Ni Ore (Philippines 25-30% Fe) 10 5 Indonesia ore 10 0 0 Source: Ferroalloynet.com Limited 10
Nickel Ore (Millions of tonnes) Philippines Providing Little Additional Ore to Market Philippines ore imports into China have increased, but are providing only a fraction of the 50+ million tonnes imported from Indonesia. Portion of increase in exports believed to be previously stockpiled material. Chinese Nickel Ore Imports from Philippines (2012-2014) 6 5 4 2014 30 25 20 Philippines Nickel Ore Exports to China YTD September (Mt) 21.3 27.1 3 2 1 2012 2013 15 10 5 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Source: GTIS 0 YTD Sept 2013 YTD Sept 2014 11
NPI Production Beginning to Decline and Declines Expected to Continue 600 Chinese Nickel Pig Iron Production (Annualized Monthly Production, Kt) 500 400 300 71 kt decline; ~3% of global supply 226 kt decline; ~12% of global supply 297 kt decline; ~15% of global supply 200 100 0 Source: Antaike, RNC analysis 12
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 2015 2016 is an empty project cupboard. Nickel supply has to come from Indonesia but expect will take until the 2020s to meet demand. In the early 2000s, the project cupboard was very full, 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: ~200kt Weda Bay Dumont Enterprise Kabanga Nova-Bollinger *bioheapleaching process Laterite (leach) Sulphide 13
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 14
RNC Forecast Supply / Demand Balance Nickel prices will once again have to rise to force demand in line with available supply as in 2006-2007 ($30,000-$50,000+/t), particularly 2016 when demand must DECLINE to balance the market 2,800 2,600 2,400 2,200 2,000 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0 1,499 209 236 294 USE 304 337 2,577 2010 2013 2014 2015 2016 2017 2018 2019 2020 Source: Wood Mackenzie Ltd, RNC Analysis Nickel Supply / Demand Forecast (Kt) 422 Demand (underlying) Structural Deficit Demand (constrained) NPI Existing Supply 15
Nickel Supply Little Project Development for 35+ Years Nickel prices increased 10X (from <$5,000 to $50,000+/t) during 2000-2010 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 2014-2020? 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% 6.5% Global Nickel Supply Growth Traditional vs. Alternative 1965 2020 (% CAGR) Japan FeNi FSU Collapse Stainless Demand Destruction 5.4% 3.3% 2.8% NPI 3-4% 1.4% 1-2% 1965-75 1975-90 1990-00 2000-10 2010-13 2014-20F Source: Wood Mackenzie, Macquarie, RNC Analysis 10.7% Demand Forecast 4-5% Stainless demand destruction helped bring nickel demand in line with available supply during the 2000-2010 period After unprecedented supply growth in 2010-2013, supply to struggle during 2014-20 Given forecast supply growth of just 1-2% annually during 2014-2020, demand destruction of 3-4% or almost 75-80% of demand must be achieved to balance the market during 2014-2020 16
17
RNC s Dumont Nickel Project: A Billion Dollar Opportunity 4.31/lb Note: Price and exchange rate assumptions contained in Key Assumptions table found on slide 53 of this presentation 18
RNC s Dumont Nickel Project: A Billion Dollar Opportunity Source: Company reports and Wood Mackenzie Ltd. (December 2011); RNC 105ktpd (LOM) vs 2012 production for other projects 19
RNC s Dumont Nickel Project: Risk Reduction Redesigned Site Layout 1 Billion Tonne Reserve + Upside Potential Reserve Estimate (Snowden June 17, 2013) Resources Grade Contained Metals (Mt) (%) (Bln lbs) (Mt) Proven 179.6 0.32 1.274 0.578 Probable 999.0 0.26 5.667 2.571 Total 1,178.6 0.27 6.942 3.149 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. Resource Estimate (SRK April 30, 2013) inclusive of Mineral Reserves Resources Grade Contained Metals (Mt) (%) (Bln lbs) (Mt) Measured 372.1 0.28 2.310 1.050 Indicated 1,293.5 0.26 7.441 3.380 Measured + Indicated 1,665.6 0.27 9.750 4.430 Inferred 499.8 0.26 2.862 1.300 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. 20 20
Dumont Feasibility Study Highlights After-Tax NPV 8% (US$ millions) $1,137 After Tax IRR 15.2% Initial Capital 1 (US$ millions) $1,191 Project Life (years) 33 52.5 ktpd 105 ktpd 2016-2020 2021-2036 2 Stockpile 2036-2049 Average Ni Production (kt/year) 33 51 31 41 Net (C1) Cash Costs (US$/lb) $4.01 $4.54 $3.97 $4.31 Concentrator Nickel Recovery 53% 48% 34% 43% Strip Ratio 0.66 1.22-1.13 NSR (US$/t) $30.90 $22.63 $13.67 $19.40 Site Operating Costs (US$/t) $11.39 $10.31 $5.34 $8.27 1. Excludes first fills of $14 million initial capital 2. 2036 is a transition year. Reference is made to the full Technical Report on the Dumont Ni Project, Launay and Trecesson Townships, Quebec, Canada, July 25, 2013, available at www.royalnickel.com and on www.sedar.com. Mineral resources that are not mineral reserves do not have demonstrated economic viability. 21 21
Feasibility Study Capital and Operating Cost Summary ($ millions) Capital Cost Summary Initial Capital Expansion Capital LOM Capital 1 Mine 304 194 879 Process Plant 523 472 1,220 Tailings 32 55 242 Infrastructure 83 24 107 Indirect Costs 3 149 73 222 Contingency 100 73 173 Total 1,191 891 2,843 Operating Cost Summary Operating Costs $ per tonne $ per tonne 2 Mining 3,285 3.50 Processing 4,034 4.30 G & A 441 0.47 Total Site Cost 7,760 8.27 TC / RC 2,800 By-products (1,058) Total 9,502 1 Life-of-mine capital includes $761 million of sustaining capital 2 $/tonne ore milled. Mining cost $/tonne material mined $1.49 3 Indirect costs include $80 million in EPCM costs: Engineering (Detailed design and IFC drawings) $33 million Procurement (Contracts and purchase orders etc) $16 million Construction Management $31 million Note that EPCM fees primarily for non-mine portion of capital expenditure 22 22
Structurally Low Cost Project in Excellent Jurisdiction 23
Structurally Low Cost Project in Excellent Jurisdiction 24
Structurally Low Cost, Large Scale Project 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. 25
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 26
Well-positioned on Cost Curve 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. 27
Lower Capital Intensity Source: RNC technical report dated July 25, 2013, publicly available disclosure, Wood Mackenzie Ltd. (figures shown to two significant digits) 28
Developing the Next Great Canadian Base Metal Mine Based on RNC analysis. 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. Ni-eq., Cueq 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:$2,315. 29
30
Continuing to Advance Project, Only Financing and Permits Remain 31
Highly Experienced Management Team and Board 32
Quebec Has Permitted Many Mines APPROVAL EXPECTED: 2014 33
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 $500-600 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 34
A Leading Base Metal Project Shovel Ready for Coming Development Cycle 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 54 of this presentation. 35
36
Creating the Nickel-focused Leader in the Canadian Base Metal Market The acquisition of a majority interest in True North builds on our earlier acquisition of an interest in Sudbury Platinum Corporation leveraging combined management strengths will accelerate future growth and support development of the Dumont Nickel Project RNC will continue to look for acquisitions that create value for shareholders with a focus on nickel, base metals, and stainless steel materials 19% Interest in Sudbury Platinum Corp 56% Interest in True North Nickel Inc. (100% interest in West Raglan Project) SPC has a 100% interest in the Aer-Kidd property Historic Producing Property in Prolific High Grade Ni-Cu-PGE Sudbury Camp Positioned on Worthington offset between new Totten mine and Victoria development project Well-positioned on Cape Smith Belt hosting high grade Ni-Cu-PGE mineralization Historic drilling has yielded multiple high grade Ni- PGE intersections Exploration in summer 2015 depends on market conditions www.royalnickel.com 37
West Raglan Project Location Rich Nickel, PGE District Cape Smith Belt host to prolific high grade polymetallic nickel deposits and includes two operating mines: Raglan and Nunavik Nickel Raglan ore grades among the highest of significant global nickel deposits (14.5Mt @ 3.21% Ni M&I 1 ) West Raglan located 40 km from Glencore s Raglan Mine Property Glencore is world s fifth largest nickel producer Raglan is a first quartile cash cost operation 2 Map of northern Quebec highlighting the position of the True North Nickel, West Raglan property. (Nickel Occurrences Gouvernement du Québec) Image provided by TNN The proximity to Glencore s Raglan Mine and Jilin Jien Nickel s Nunavik Mine does not mean the West Raglan project will obtain similar results. West Raglan is an exploration project without a current resource estimate and there is no certainty that any such estimate will ever be established. 1. http://www.mineraglan.ca/fr/operations/documents/raglan_fs_eng_feb%202013_web.pdf 2. According to Q1 2014 Wood Mackenzie report www.royalnickel.com 38
West Raglan Raglan Correlation 39
West Raglan Analogue to Katinniq Zone Raglan Mine hosts 190 individual lenses in 12 distinct zones; four zones are currently in production feeding a central mill facility 40
West Raglan Multiple Targets Outcropping Sulphide Mineralization 9 mineralized zones identified across the property Raglan Trend South Trend Total Magnetic Field Outcropping sulphide mineralization across more than 35km of strike, very limited testing Magnetic signatures, lithogeochemistry, and geology same at Frontier and Raglan Outcropping sulphide mineralization across more than 35km of strike, very limited testing Magnetic signatures, lithogeochemistry, and geology same at Frontier and Raglan Strong potential at two new untested zones at surface at Beverly and Red Southern part of property has magnetic and till anomalies suggestive of Nunavik Mine (South Trend) style mineralization (large tonnage, high Cu and PGM) Reference is made to the full Technical Report on the West Raglan Ni Project, Quebec, Canada, filed on July 29, 2014, available at www.royalnickel.com and on www.sedar.com. www.royalnickel.com 41
West Raglan Multiple High Grade Lens Targets Frontier Zone High-grade Lenses Five key mineralized lens clusters 2,500 metre strike extent has five stacked mineralized target horizons High-grade (2-3% Ni, 3+ g/t PGE) sulphide lenses outcropping High priority targets modelled from BHEM and 3D magnetic inversion suggest vast potential remains above 250 metres depth See slides 42 and 43 for drill hole details Reference is made to the full Technical Report on the West Raglan Ni Project, Quebec, Canada, filed on July 29, 2014, available at www.royalnickel.com and on www.sedar.com. www.royalnickel.com 42
West Raglan: Significant Intersections www.royalnickel.com 43
West Raglan Frontier Zone Drill Results Reference is made to the full Technical Report on the West Raglan Ni Project, Quebec, Canada, filed on July 29, 2014, available at www.royalnickel.com and on www.sedar.com. www.royalnickel.com 44
West Raglan Frontier Zone Drill Results (Cont d) Reference is made to the full Technical Report on the West Raglan Ni Project, Quebec, Canada, filed on July 29, 2014, available at www.royalnickel.com and on www.sedar.com. www.royalnickel.com 45
West Raglan- 2014 Work Plan Near Term July 2014 Complete 43-101 report August 2014 Site visit October 2014 Airborne EM survey Oct 14 -Mar 2015 Target definition Summer 2015 Drilling (12,000 metres) Drill targeting will leverage existing data Geophysics : Review of disregarded/untested geophysical targets which do not fit "Raglan model and untested targets Remodel data considering Mequllion geometry Possible airborne EM/Gravity survey (August/Sept 2014) Geology Review geological logs, photos and structure for rock types consistency, re-consider geological model Geological interpretations with 3D mag inversion Consider existing lenses, what size spacing required to obtain resource, which direction for expansion Identify holes that did not go deep enough to test anomalies www.royalnickel.com 46
West Raglan-2015 Season Summer 2015 Define resource and test new targets Drilling to extend existing bodies (~2000m) Drilling to test existing and new geophysical targets (~7000m) 3000m of follow-up drilling Gossanous Outcrop- West Raglan www.royalnickel.com 47
West Raglan Property Infrastructure Chukotat Camp Ariel view of camp. www.royalnickel.com 48
West Raglan Property Infrastructure Chukotat Air Strip www.royalnickel.com 49
West Raglan Property Infrastructure Salluit Fuel www.royalnickel.com 50
Appendix 1 Sources and Additional Information 51
Price Assumptions Parameter 2015 2016 2017 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) $0.0445 0.0445 $0.0445 $0.0445 Oil ($ 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. 52
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 23.23 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. 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. Capstone, Santo Domingo Technical Report, May 22, 2014 Cu $2.85; Fe (65%) $0.85/dmtu; Au $1,275/oz All figures directly from technical report. Site operating costs calculated as operating costs less port facility costs. 53
Feasibility Study Capital and Operating Cost Summary ($ millions) Capital Cost Summary 1,2 Initial Capital Expansion Capital LOM Capital 3 Mine 304 194 879 Process Plant 523 472 1,220 Tailings 32 55 242 Infrastructure 83 24 107 Indirect Costs 4 149 73 222 Contingency 5 100 73 173 Total 1,191 891 2,843 1. Accuracy of capital cost estimates are +/- 15% 2. Infrastructure costs for sustaining capital are included in process plant costs 3. Life-of-mine capital includes $761 million of sustaining capital 4. Excludes first fills of $14 million initial capital and $7 million expansion capital and the associated $20 million release in sustaining capital at the end of the project life 5. Initial capital contingency of $100 million plus growth component of $29 million for an initial contingency of $129 million representing 12% of costs at risk in the initial capital figure Operating Cost Summary Operating Costs $ per tonne $ per tonne 2 Mining 3,285 3.50 Processing 4,034 4.30 G & A 441 0.47 Total Site Cost 7,760 8.27 TC / RC 2,800 By-products (1,058) Total 9,502 2 $/tonne ore milled. Mining cost $/tonne material mined $1.49 54 54
Feasibility Study Summary Units PFS Revised PFS Feasibility Study Dec. 16, 2011 2 May 14, 2012 2 Jun. 17, 2013 3 Ore Mined Mt 1,070 1,066 1,179 Strip Ratio Waste : Ore 1.18 1.19 1.13 Nickel Recovery % nickel 41 45 43 Project Life Years 31 31 33 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 18-19 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 31 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. 55 55
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 179,600 0.32 114 0.029 0.013 1,274 45 166 77 Probable 999,000 0.26 106 0.017 0.008 5,667 233 550 250 Total 1,178,600 0.27 107 0.019 0.009 6,942 278 716 328 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 372,100 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) (000s ounces) (000s 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 Magnetite Contained Magnetite (000 t) (%) (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 Reference is made to the full RNC technical report dated July 25, 2013, available on www.sedar.com. Mineral resources that are not mineral reserves do not have demonstrated economic viability. 56
Appendix 2 SPC Transaction 57
SPC - Transaction Overview RNC acquired 6 MM units of Sudbury Platinum Corporation ( SPC ) for C$0.25 per unit, each unit comprising a share and full warrant. Each warrant is exercisable at C$0.45 per share for 18 months SPC is private subsidiary of Transition Metals Corp. (57% interest). RNC s investment represents a 19% interest of the issued and outstanding shares RNC has 1 seat on the SPC Board (1 of 5 members) and right to maintain pro rata share SPC s key asset is an option to earn up to a 70% interest in the Aer-Kidd property located on the Worthington Offset Dyke in the Sudbury Basin SPC announced on August 11, 2014 that it plans to exercise its Right of First Refusal to purchase CaNickel Mining Company Limited's ( CaNickel ) 100% interest in the Aer-Kidd Project for a cash payment of $1,250,000. By doing so, the Option and Joint Venture Agreement currently in place between SPC and CaNickel dated October 1, 2012 will be terminated. The investment is consistent with RNC s strategy to target high quality Ni-Cu-PGM and other base metal opportunities and RNC s market outlook for nickel with a structural shortfall in supply through the end of the decade The investment allows RNC to gain exposure to one of the world s highest potential nickel exploration opportunities with an exploration team that has a proven track record of success in the Sudbury basin Aer-Kidd is also one of few properties in the Sudbury basin that does not have a captive offtake with either Vale or Glencore 58
Sudbury Igneous Complex AER-Kidd Property 59
Aer-Kidd Significant Untested Potential Worthington Offset Longitudinal Section, Looking Northwest Totten Vale 2.6 km 4.3 km Aer-Kidd Howland Robinson Rosen McIntyre Vale Victoria KGHM (QuadraFNX) Untested Potential At Depth Mined Out Massive & Disseminated Sulphide DDH Pierce Point Mineralized Non-mineralized Totten (deep): 10.1 Mt 1.5% Ni, 1.97% Cu, 4.8g/t PGM 1 1. Resource reported by Inco Limited in news release dated January 18, 2001 Victoria (deep): 14.5 Mt 2.5% Ni, 2.5% Cu, 7.6 g/t PGM 2 2. Resource reported by KGHM in news release dated January 16, 2012 Source: Sudbury Platinum Corp. 60
High Priority Drill Targets Already Identified Significant Geophysics Potential Remaining Drill Targets & Historic Drilling Long Section Howland Pit AE-13: 0.20m @ 4.43%Ni, 6.95% Cu, 23.0g/t PGE s U9E-23: 30m @ 0.33% Ni, 1.3%Cu Robinson Mine U-806: 6.8m @ 1.6%Ni, 0.80% Cu AE-1B: 2.34m @ 1.63%Ni, 0.70%Cu U9E-2: 28.65m @1.46%Ni, 0.60% Cu W03-03AW1: 8.90m @ 1.46%Ni, 0.56%Cu Rosen Mine U-610: 7.3m @ 1.0%Ni, 1.74% Cu W03-05: 1.0m @ 2.73%Ni, 0.35%Cu AE-07: 2.0m @ 1.2%Ni, 0.83%Cu AE-07A: 8.1m @ 0.30%Ni, 1.2%Cu Source: Sudbury Platinum Corp 61
SPC Management Team - Significant Sudbury Experience and Track Record of Discoveries Scott McLean Chairman & CEO - B.Sc. P.Geo. 23 years with Falconbridge/Xstrata (Responsible for the Sudbury Exploration Investment) 10 years exploration in Sudbury Basin, responsible for 100k m drilling/yr & 20-25 employees 2004 PDAC Prospector of Year (Nickel Rim South) Past president of APGO (Association of Professional Geoscientists of Ontario) # Year Deposit Resources (t) Status 1 1994 Onaping Depth 17,000,000 Study (deep) 2 1995 Norman West 7,500,000 Idle (deep) 3 1997 Creighton West 10,000,000 Idle (deep) Grant Mourre President & COO- M.Sc., P.Geo. 14 years minerals exploration within NA focused primarily on Ni-Cu-PGE s. 7 years with Falconbridge/Xstrata & Inco in Sudbury Basin 10 years deep drilling in the Sudbury Basin Masters thesis funded by Inco (Vale) & NSERC on Copper Cliff offset dyke 4 1997 Fraser Morgan 8,000,000 Development 5 2001 Nickel Rim South 17,400,000 Production 6 2001 Beeper 3,904 Idle 7 2001 Roland Lake 500,000 Idle Kevin Stevens Chief Geophysicist - M.Sc. P.Geo. 27 years mineral exploration and research geophysics 12 years as Falconbridge Principal Geophysicist in the Sudbury Basin 2004 PDAC Prospector of Year (Nickel Rim South) Geophysics (EM modeling) expert Developed key geophysics techniques for sulphide detection at depth (3D EM and Radio-Imaging) 8 2002 Rapid River 70,000 Idle 9 2003 Bowell Open Pit 363,000 Idle 10 2004 Capre Lake South 580,000 Idle 11 2006 Onaping-Craig Corner 250,000 Depleted 12 2007 Onaping 2 Zone 80,000 Depleted 2004 Prospector of the Year Nickel Rim South Mine Source: Sudbury Platinum Corp. Total Ni Discovered 61.7 million 62
Notes 63
Corporate Overview Share Structure: Basic Shares Outstanding 1 : 109.6 million Options (average exercise price: C$0.70) 10.0 million Deferred/Restricted Share Units 2.1 million Warrants (exercise price: C$0.98) 5.7 million Compensation Warrants (ave. price C$0.60) 0.6 million Contingent Shares 7.0 million Fully Diluted Shares Outstanding: 135.0 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$6.1 million Current Tax Receivable: C$0.5 million Working Capital: C$4.2 million Market Capitalization: C$39 million 1. Shares outstanding, fully diluted shares outstanding and shareholdings as at November 6, 2014 2. Balance sheet highlights as at September 30, 2014; market capitalization at November 6, 2014 www.royalnickel.com 64