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 its footprint into Brazil, a Tier-1 mining jurisdiction, and strengthening presence in Latin America.

• Adds a world-class, stable nickel operation with robust cash flows, significant growth potential, and strong ESG credentials, including 100% renewable energy use and IRMA 75 certification.

• Nickel Brazil is one of the largest ferronickel producers globally, providing MMG with the third-largest nickel endowment worldwide and exposure to Class 1 (battery grade) nickel.

• Strategic advantage over Indonesian supply due to lower carbon footprint, premium product quality, and supply chain reliability.

• 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, up to US$100 million contingent on nickel price above US$7.10/lb, and up to US$50 million tied to project development at Jacaré and Morro Sem Boné.

• Upfront payment subject to normal completion adjustments.

• Funded via existing liquidity with no additional funding conditions.

• 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.

• Acquisition multiple estimated at 1–3x trailing EBITDA, with average annual EBITDA of $250 million over the past five years.

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, ensuring margin protection and competitiveness.

• Operational synergies anticipated by leveraging MMG's internal capabilities and experience from existing South American operations.

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

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