Investor Presentation May 2011 Disclaimers Competent Persons The information in this presentation that relates to Mineral Resources for the Santa Rita Nickel Deposit is based on information compiled by Mr. Neil Inwood in 2011. The information in this report that relates to Metallurgical Results for the Santa Rita Nickel Deposit is based on information compiled by Mr Rod Smith in 2011. Both Messrs Inwood and Smith are Members of The Australasian Institute of Mining and Metallurgy. Messrs Smith and Inwood are Principal Consultants with Coffey Mining Pty Limited, the independent mining consultants engaged by Mirabela Nickel Limited. Messrs Smith and Inwood qualify as both a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’ (JORC Code) and as a Qualified Person in accordance with NI 43-101. Messrs Smith and Inwood consent to the inclusion in the presentation of the matters and defined Resources and Metallurgical information based on their information in the form and context in which it appears. The information in this rpresentationt that relates to pre-mining Ore Reserves, Mining Production and Cost Estimation for the Santa Rita Nickel Deposit is based on information compiled by Mr. Carlos Guzmán who is a Member of The Australasian Institute of Mining and Metallurgy. Mr. Guzmán is a Mining Engineer, Principal and Project Director with NCL Brasil Ltda and is a consultant to Mirabela Nickel Limited. Mr. Guzman qualifies as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’ (JORC Code) and is a Qualified Person in accordance with NI 43-101. Mr. Guzmán consents to the inclusion in the presentation of the matters based on his information in the form and context in which it appears. Forward Looking Information Certain information in this presentation, including all statements that are not historical facts, constitutes forward-looking information within the meaning of applicable Canadian securities laws. Such forward-looking information includes, but is not limited to, information which reflect management’s expectations regarding Mirabela’s future growth, results of operations (including, without limitation, future production and capital expenditures), performance (both operational and financial) and business prospects (including the timing and development of new deposits and the success of exploration activities) and opportunities. Often, this information includes words such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate” or “believes” or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved. In making and providing the forward-looking information included in this presentation, the Company has made numerous assumptions. These assumptions include among other things: (i) assumptions about the price of nickel and other base metals; (ii) that there are no material delays in the optimisation of operations at the Santa Rita Operation; (iii) assumptions about operating costs and expenditures; (iv) assumptions about future production and recovery; (v) that the supply and demand for nickel develops as expected; (vi) that there is no unanticipated fluctuation in interest rates and foreign exchange rates; and (vii) that there is no material deterioration in general economic conditions. Although management believes that the assumptions made and the expectations represented by such information are reasonable, there can be no assurance that the forward-looking information will prove to be accurate. By its nature, forwardlooking information is based on assumptions and involves known and unknown risks, uncertainties and other factors that may cause the Company’s actual results, performance or achievements, or results, to be materially different from future results, performance or achievements expressed or implied by such forward-looking information. Such risks, uncertainties and other factors include among other things the following: (i) decreases in the price of nickel and copper; (ii) the risk that the Company will continue to have negative operating cash flow;; (iii) the risk that additional financing will not be obtained as and when required; (iv) adverse fluctuations in foreign exchange rates; (v) the risk that concentrate produced will not meet certain minimum specifications; (vi) material increases in operating costs; (vii) production estimates may not be accurate; (viii) environmental risks and changes in environmental legislation; (ix) adverse fluctuations in interest rates; (x) failure to comply with restrictions and covenants in the Senior Loan Agreement; (xi) risks arising from the Company’s hedging activities; (xii) failure to comply with restrictions and covenants in the off take loan agreements; (xiii) changes in the terms of the Senior Loan in order to achieve successful syndication; and (xiv) changes in the terms of the Leasing Facility in order to achieve successful syndication. The Company’s MD&A and the annual information form contain information on risks, uncertainties and other factors relating to the forward-looking information. Although the Company has attempted to identify factors that would cause actual actions, events or results to differ materially from those disclosed in the forward-looking information, there may be other factors that cause actual results, performances, achievements or events not to be anticipated, estimated or intended. Also, many of the factors are beyond the Company’s control. Accordingly, readers should not place undue reliance on forward-looking information. All forward-looking information disclosed in this presentation is qualified by this cautionary statement. Page 2 Key investment highlights World class deposit with a 23 year reserve life and potential to expand Off-take agreements secured for 100% concentrate production until 2014 Largest nickel sulphide project commissioned in the last decade Low cost producer Simple, proven open pit mine and conventional sulphide processing plant 16 months of full commercial operation ramping up to a run rate of 7.2Mtpa by the end of 2011 Self-funding from existing operations & cash balance Favorable supply and demand trends for nickel Strong management team driving ramp-up and substantial improvements in operational efficiency Page 3 World class asset located in a pro-mining jurisdiction Mirabela Nickel is an international nickel producer • • • • • • • Largest nickel sulphide operation commissioned in over a decade after Voisey’s Bay Operation is the 100% owned Santa Rita open pit, nickel sulphide mine in Brazil Stable political environment with economic growth Well situated, with access to power, water and logistics Majority of the 800 staff plus contractors live in nearby towns of Ipiaú and Itagibá Secure off-take agreements in place with two customers for 100% production Mining license has a renewable 20-year term initially, expiring in 2028 Aratu Port 50km Brazil Brazil Ipiau Salvador Atlantic Ocean Santa Rita Ex-mine gate to Votorantim’s Fortaleza de Minas smelter, 1,375km by road Ilheus Port CIF Norilsk Harjavalta Smelter, Manty luoto, Finland Page 4 Simple, well proven business model Mining Sales transport & logistics Processing • Open pit mine • Quality mobile fleet • Simple, low cost, drill and blast, load and haul • • Caterpillar trucks, O&K shovels and Atlas Copco drill rigs • • On-site maintenance facilities • • OEM equipment support • Conventional nickel sulphide flotation plant • One product, two customers • Proven technology with simple flowsheet 50% of production collected by Votorantim at mill gate • 100% of production meets contract specification 50% exported to Norilsk from deep water port 140 km from site (an alternative port nearby) • 100% of production sold under off-take agreements • Provisional payment (90% within 14 days of month end for domestic and 14 days of shiploading for export customer) Quality components – Metso crushers, Outotec grinding and flotation, Larox filters Proven process & technology 23 year mine life 100% off-take through 2014 Page 5 Fully contracted off-take agreements through 2014 • Agreements in place to sell 100% of production until the end of 2014 to two off-take partners: – 50% to Votorantim Metais, a Brazilian mining company, at the mine gate – 50% to Norilsk, a nickel producer at CIF Rotterdam • Quality concentrate (+18% metal) meeting off-take specification • First shipment to Norilsk in January 2011, second shipment completed in April • Division of Votorantim Group, which is a diversified business engaged in primary goods manufacturing • Brazil’s 4th largest private company • Parent ratings of Baa3 / BBB • Norilsk Nickel Harjavalta is a subsidiary of Norilsk Nickel. Norilsk is a diversified mining and metal producing company with a market cap of $47.2bn • World’s largest producer of nickel and palladium with 20% of worldwide nickel production • Parent ratings of Baa2 / BBB- Page 6 Project successfully brought into production within 5 years 2005: 2007: Maiden JORC open-cut Construction resource announced commenced 2004: Deposit acquired and nickel sulphides intersected 2004 • Oct 2009: Commissioning 2007: Bankable Feasibility Study completed and development decision 2008: Maiden JORC underground resource announced 2005 2007 2006 2008 2010: First stage production ramp-up to 4.6Mtpa Nov 2009: First production produced to customer specification 2009 2010 Rapid commercialization possible due to the quality of the asset and the scarcity of high quality nickel sulphide projects in the pipeline globally Page 7 Substantial reserves and resources 23 year expected mine life JORC mineral reserves and resources1 Classification Open-cut reserves2,7 Proven Probable Total Open-cut resources5,7 Measured Indicated Inferred Total Underground resources6,7 Inferred Copper grade (%) Recovered Nickel (t)4 Tonnes (M) Nickel grade (%) 16.7 142.6 159.3 0.57% 0.52% 0.52% 0.14% 0.13% 0.13% 64,100 505,700 569,8003 16.3 156.0 25.7 198.0 0.57% 0.51% 0.53% 0.52% 0.14% 0.13% 0.14% 0.14% n/a n/a n/a n/a 87.5 0.79% 0.23% 690,000 ¹ Mineral reserves referred to are reported in accordance with the JORC Code. Mineral resources that are not mineral reserves do not have demonstrated economic viability ² Reflects strip ratio of 5.0:1 ³ Contained nickel tonnes of 829,800 4 Weighted average recovery of 68.7% 5 Based on a weighted average cut-off grade of 0.25% nickel 6 Based on a weighted average cut-off grade of 0.50% nickel 7 As of December 31, 2010 • 494 drill holes used in resource calculation totaling 131,695m of drilling • For 6 months ended December 31, 2010 Mirabela recovered 7% more metal than was expected compared to the resource model Page 8 Consistent quarterly production improvements in 2010 Mining: Q4 total material mined at 36 Mtpa annualized Processing: Achieved rate of 5.2 Mtpa annualized Ore milled (t) Plant throughput (%)¹ Recovery (%) 108% Ore mined (t) Waste mined (t) Nickel grade processed (%) (t) 10,000,000 8,000,000 6,000,000 % (t) 0.75% 1,500,000 0.65% 1,250,000 0.55% 1,000,000 68% 73% 100% 82% 80% 750,000 4,000,000 0.51% 0.52% 0.52% 0.50% 0.45% 0.35% 250,000 0 0.25% 0 1Q10 2Q10 3Q10 4Q10 Nickel: Production of 10,375 t for FY2010 3,104 4,000 3,000 1,987 2,505 1,000 3,676 1,991 2,304 2Q10 3Q10 Based on nameplate capacity of 4.6Mtpa 52% 49% 1Q10 2Q10 3Q10 60% 40% 20% 0% 4Q10 4,000 10.00 $8.12 $7.62 8.00 $6.76 $6.27 3Q10 4Q10 6.00 2,000 4.00 2,405 0 1Q10 48% US$/lb 3,000 2,359 2,000 60% Cash costs: Continued improvement during FY2010 Nickel in concentrate produced (t) Nickel in concentrate sold (t) (t) 1 500,000 2,000,000 120% 4Q10 1,000 2.00 0 0.00 1Q10 2Q10 Page 9 2010 highlights • Production on target at 10,375t of nickel • All project ramp-up milestones achieved • Break through mining and plant performance in Q4 2010 • Established sustainable mining and processing operations including maintenance, safety performance and environmental compliance • Established a clear path forward to full production by the end of 2011 Page 10 Key operating metrics from Independent Technical Report Mining Processing Ore mined (t) Waste mined (t) Nickel grade processed (%) (t) 0.60% 50,000,000 40,000,000 % 65% 6,000,000 64.2% 55% 0.40% 2,000,000 0 0.30% 2010 2011E 60% 4,000,000 0.50% 10,000,000 50% 53.0% 0 45% 2012E Nickel 2010 2011E 2012E Cash costs Nickel in concentrate produced (t) (t) US$/lb 23,800 25,000 8.00 $7.00 10,375 Unit Cash Costs $5.69 6.00 16,800 20,000 15,000 70% 64.5% 0.50% 30,000,000 Recovery (%) 8,000,000 0.51% 0.51% 20,000,000 Ore milled (t) (t) $4.99 4.00 10,000 2.00 5,000 0.00 0 2010 2011E 2012E 2010 2011E 2012E Page 11 Plant expansion to a run rate of 7.2 Mtpa by the end of 2011 • Targeted plant expansion to a run rate of 7.2 Mtpa by end 2011 • Modular plant upgrade: • – Additional pebble crusher and filter already installed – Second ball mill installation underway – Additional crushing capability engineering completed and major components ordered – Desliming plant engineering completed and major components ordered Installation of upgrade can be done concurrently to plant’s ongoing operation Page 12 Q1 2011 operational performance • • 2,825t nickel in concentrate produced • No lost time injuries for the quarter, 12 month rolling average decreased to 0.64 • Accelerated mining pre-strip of central pit on track for completion by end Q2 2011 • Non-recurring SAG mill motor failures in January 2011 reduced production for the quarter • Production expected to be significantly stronger in 2H 2011 as ramp-up activities are completed Unit cash costs at US$6.97/lb for the quarter due to reduced production • • Sales of 2,084t nickel in concentrate • • Not representative of FY2011 forecast unit costs 1,070t contained nickel Norilsk shipment and sale completed on 1 April 2011 7.2Mtpa processing plant expansion currently within budget & on track for completion by end 2011 • Successful debt re-financing in April with issue of US$395 million of 8.75% senior unsecured notes due 2018 Page 13 Debt re-financing overview Uses 8.75% for 7 years due 2018 Standard high yield covenants Ratings: B2 (stable), B- (positive) US$M Senior debt Norilsk facility 152 56 25 Votorantim facility Hedging (take out) Payment of taxes related to repayment of debt Estimated fees and expenses 20 6-19 14-16 Cash to balance sheet Total uses 122-107 $395 Hedge profile post transaction Instrument Nickel forward contracts Tonnes US$/lb % of expected nickel production hedged Copper forward contracts Tonnes US$/lb % of expected copper production hedged 2011 2012 2013 2014 2015 6,198 7.90 37% 4,899 7.89 21% 3,683 7.66 15% 819 7.55 3% - 162 3.02 3% 2,232 2.87 27% 2,904 2.74 37% 2,922 2.62 33% 732 2.57 9% Page 14 Debt maturity profile Old maturity profile (US$M) Senior loan Votorantim off-take Norilsk off-take Caterpillar facility $100 $50 $0 2011 2012 2013 2014 2015 2016 2017 2018 2017 2018 Current maturity profile (US$M) Senior unsecured notes Caterpillar facility $400 $300 $200 $100 $0 2011 2012 2013 2014 2015 2016 Page 15 Nickel industry - stainless steel is the key driver of growth • Nickel is used mainly as an alloying element in steel – Around 65% of nickel supply goes into stainless steel and 5% in alloy steels with other elements; non-ferrous alloys form another 13% of nickel use • Nickel occurs as two main deposits: – Sulphides: typically processed via low capital intensity nickel flotation – Laterites: processed via a capital intensive high pressure/temperature process • Australia, Brazil, Canada, China and Russia are the principal nickel mining areas; major refineries operate in Norway, Finland, China and Russia End uses of nickel Stainless steel: 65% Non-ferrous alloys: 13% Alloy steels: 5% TBU Electroplating: 7% Foundry casting: 3% Other: 7% Source: Brook Hunt Page 16 Nickel demand is set to rise • Nickel demand is forecast to rise at a CAGR of 5% from 2010 to 2015 • Asian demand for nickel is forecast to comprise around 63% of global demand by 2015, rising from 58% in 2010 • China is expected to account for 38% of global consumption by 2015 Forecast nickel demand¹ by region (Kt) China Asia (excl. China) Europe Americas 1,481 1,558 1,657 1,696 2010E 2011E 2012E 2013E Africa 1,804 2014E Oceania 1,916 2015E Source: Brook Hunt ¹ Analysis of demand for thousands of tonnes of contained nickel Page 17 Nickel has a robust price outlook • After 2007 peak of US$17.71/lb, nickel prices fell during the global financial crisis to below US$7.00/lb • Q1 2011 nickel price average of US$12.20/lb • Brook Hunt is forecasting a long term nickel price of US$9.80 • Brook Hunt forecasts a decline in nickel prices from 2012-2015 due to expected nickel projects coming on-line with a significant increase from 2016 onward due to supply shortages • CRU is predicting an upturn in prices as early as 2013 Historical and forecast nickel price (2010 dollars) Brook Hunt Mirabela cash cost 4.00 2000 2003 2006 2009 2012E 2015E US$4.26/lb 2017E 3.50 2016E 6.00 2015E 7.00 2014E 8.00 US$10.38/lb 2013E 10.50 US$10.74/lb 2012E 14.00 10.00 2011E 17.50 0.00 1997 US$11.00/lb 12.00 2010E US$/lb Historical CRU LME forward prices Source: Brook Hunt, CRU, Management projections Page 18 Low cost producer 2012 forecast nickel industry cost curve Brook Hunt Cash Cost (US$/lb Ni) in 2010 dollars CuNi Sulphides 15.00 Santa Rita 10.00 Laterite Pyro 5.00 0.00 (5.00) First quartile (10.00) Second quartile Third quartile Fourth quartile Cumulative production (paid Mlbs Ni) 0 596 1,192 1,788 2,384 2,980 3,576 Page 19 Clear and focused growth strategy • Current focus is ramp-up to full production of Santa Rita open pit • Independent Technical Report has confirmed “Base Case” parameters & demonstrates financial strength of current open pit operations • Mirabela is positioned to take advantage of full portfolio of growth opportunities by end of 2012 Mirabela Growth Strategy Phase 1 Medium Term Brownfields & Near Mine Opportunities Phase 2 Longer Term Growth Pipeline & Opportunities • Production expansion opportunities • Regional exploration • Drilling program to increase open pit resource • Acquisition targets • Better define the underground potential • Further assessment of near mine targets: Palestina and Peri Peri Page 20 Key investment highlights World class deposit with a 23 year reserve life and potential to expand Off-take agreements secured for 100% concentrate production until 2014 Largest nickel sulphide project commissioned in the last decade Low cost producer Simple, proven open pit mine and conventional sulphide processing plant 16 months of full commercial operation ramping up to a run rate of 7.2Mtpa by the end of 2011 Self-funding from existing operations & cash balance Favorable supply and demand trends for nickel Strong management team driving ramp-up and substantial improvements in operational efficiency Page 21