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/prospective area has been drilled, indicating significant resource upside potential.

• Proximity to existing operations and IMIP enables operational synergies and logistical advantages.

• Acquisition supports traceability and ESG standards, important for Western offtakers.

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

Financial terms and conditions

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

• Payment structure includes a refundable commitment fee and deferred payments over 18-24 months post-signing, with the majority due in 2026.

• Price per ton is $2.50 for ore above 1.7% nickel, with lower grades acquired at no additional cost.

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

• Acquisition price per ton is significantly below recent market transactions in Indonesia and globally.

Synergies and expected cost savings

• Integration with existing ore roads and facilities reduces required CapEx.

• No need to build a jetty, saving $15-20 million.

• Project development capex expected to be similar to Hengjaya Mine, with low mine development costs and attractive economics.

• Delayed payment schedule and attractive acquisition multiple ($39/t contained nickel) well below recent market transactions.

• Self-sufficiency in ore supply improves operational margins and control over ore quality.