Nickel Industries (NIC) M&A Announcement summary

Deal rationale and strategic fit

• Acquisition secures a large, advanced nickel resource, ensuring self-sufficiency for downstream operations for 40-50 years.

• Only 20% of the mapped laterite or 4,700-6,654ha area has been drilled, indicating significant resource upside potential.

• Proximity to existing operations and IMIP allows leveraging existing infrastructure and reduces logistics costs.

• Sampala Project will increase total contained nickel resources to 5.9 million tonnes, making the company one of the largest global holders.

• Enhances control over ore quality, traceability, and ESG standards, supporting Western customer requirements.

Financial terms and conditions

• Total acquisition cost is approximately $56.3 million for 2.3 million tons of contained nickel metal, with 60% control and economic rights.

• Payment structure includes a refundable commitment fee, deferred payments over 18-24 months, and contingent pricing based on resource grade.

• $2.50 per dry metric ton at 1.7% nickel; no payment for lower grades, with additional payments for land acquisition and area extension.

• Acquisition price per ton is significantly below recent market transactions in Indonesia and globally, with an attractive multiple of $39/t contained nickel.

• GF IUP acquired for $7 million, with milestone and potential $4 million additional payment if area extension is approved.

Synergies and expected cost savings

• Integration with existing operations enables full self-sufficiency in ore supply, improving RKEF performance.

• CapEx savings from leveraging existing haul roads and no need for a jetty, reducing upfront investment.

• Low strip ratio and low mine development costs allow immediate ore access and attractive economics.

• Delayed payment schedule further enhances project economics.