MMG (1208) M&A Announcement summary

Deal rationale and strategic fit

• Acquisition of a leading Brazilian ferronickel business aligns with MMG's diversification and growth strategy, expanding presence in Latin America and entering the nickel market.

• Provides entry into Brazil, a Tier-1 mineral-rich and mining-friendly jurisdiction, supporting long-term expansion.

• Nickel Brazil is one of the largest ferronickel producers globally, with strong ESG credentials and a low-carbon footprint.

• Adds significant nickel resources, making MMG the holder of the third-largest nickel endowment worldwide.

• Growth optionality through development projects Jacaré and Morro Sem Boné, supporting future production expansion.

Financial terms and conditions

• Total cash consideration up to US$500 million: US$350 million upfront and up to US$150 million in contingent payments.

• Up to US$100 million contingent on realised nickel price above US$7.10/lb; up to US$50 million tied to investment decisions at Jacaré and Morro Sem Boné projects.

• Funded via existing liquidity, with no funding condition attached.

• Upfront payment subject to normal completion adjustments.

• MMG to pay a US$25 million break fee if certain regulatory approvals are not obtained or conditions are not met by the long stop date.

Synergies and expected cost savings

• Nickel Brazil operates at first quartile on the global cost curve, with 2024 C1 cash costs at US$5.05/lb Ni, supporting strong cash flow even at low nickel prices.

• Operational synergies expected by leveraging internal capabilities and experience from other South American assets.

• Premium product pricing due to high quality and low carbon footprint.

• Stable, well-managed operations with a long mine life and high-quality product, enhancing cost competitiveness.

• Potential for growth through development of Jacaré and Morro Sem Boné projects.