Nickel Industries Limited

Good day and welcome to the Nickel Industries Limited 2025 four-year results. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, please press star one again. For operator assistance throughout the call, please press star zero. And finally, I would like to advise all participants this call is being recorded. Thank you. I'd now like to welcome Justin Werner, Managing Director, to be in the conference. Justin, over to you.

Thank you very much. If I could ask the moderator to please turn to page three. Welcome everyone to the Nickel Industries annual results presentation. I'd like to start off firstly with safety. 17.8 million safe man hours worked at significant increase on the man hours worked in 2024 and over 26.1 million man hours have been worked since our last reported LTI back in 2021. So you can see our LTIFR and TRIFR significantly below the world steel average. In terms of ESG, we continue to be a leader in Indonesia. You can see a number of awards there including awards from prestigious companies such as CNBC and improving scores as judged by S&P and other third party groups and the best community award at the global CSR and ESG summit in Vietnam. So the company continues to perform very well on the safety and ESG metrics. If we could just go to slide four, please. Despite a challenging year, which saw the LME price down another 10% versus the 2024 average, we were still able to deliver a robust EBITDA, pleasingly with a number of records set, including record nickel and cobalt tonnes of HNC, record NPI tonnes of 1,055,000, and record mine production of 19.2 wet metric tonnes million with sales of 9.9 million wet metric tonnes. By the numbers, revenue of 1.65 billion, adjusted EBITDA of US$282.8 million. I should note that on the 2024 numbers, at the end of last year, Q4, there was some challenges due to... using up the full RKAV for last year. That resulted in 21.5 million US of standby costs to mine contractors. And it reduced our Q4 EBITDA to 37.5 million versus the 87 million that was delivered in the third quarter. So about a US 50 million delta. Had that not occurred, if you add the US 50 million onto the 282 million that delivered, that we delivered, that gives you about $332 million, which is in line with our 2024 result of about US$326 million. In 2025, we paid a dividend of one and a half cents per share, and currently net debt sits at $861.8 million. In terms of our processing operations, US$207.7 million of adjusted EBITDA, $13,000 or 13.3 thousand tonnes of nickel produced and ENC HPAL construction schedule is progressing very well and scheduled for commissioning in the first half of this year. Another busy year on the corporate front, we had a very successful bond refinancing We raised $800 million, five-year bullet, senior unsecured notes. We were able to reduce the coupon from 11.25% to 9%. We also disremoved the amortization. We did go out initially to raise US $500 million. We had about US $6 billion of orders. So it was very well supported and pleasingly The mix of investors was about a third North America, a third Europe and a third Asia where typically we've seen a majority of investors come out of Asia. We had approval just last week of increased RKAV sales quarter which is a very positive result given the significant cuts that have been occurring in country and I'll talk about that a little bit later on. We announced the sale of a 10% interest in the ENC project to a strategic partner, Sphere, who is the super alloy supplier to SpaceX. And again, we see that as a very strong endorsement of the quality of the ENC project. We also announced the signing of an MOU for supply of up to 14 million wet metric tonnes of ore from our Sandpiler project where development is progressing very well. On the mining front, we delivered 91.6 million US in EBITDA from mine operations, and I mentioned the record nickel ore sales of 9.9 million, and we've been able to successfully increase that from 9 million last year to 14.3 million this year, so almost 60% increase. If we could just go to the next slide, please. What this slide shows is the robustness of our business through the cycle and we believe that we've come out of cyclical lows which we experienced in 2025. If you look at the EBITDA number across the top there, you can see in 2022 it was US$339 million, US$403 million in 2023, US$326 million in 2024 and US$283 million in 2025. That's despite the nickel price going from almost $30,000 in early 2024 to lows of $14,000 in 2025. We've been able to maintain a strong dividend over that period of time and really how we've been able to maintain this strong EBITDA profile when a lot of other businesses have actually gone out of, have left the market. is the growth through the cycle. So you can see in 2022, our processed nickel tons were 70,000. Last year in 2025, it was 134,000. That is set to grow this year with the commissioning of ENC, which will bring another 72 to 80,000 tons of new nickel units at a very high margin. And our mine ore sales, which have increased from 3.5 million in 2022 to $9.9 million in 2025 and we now have approval to go to $14.3 million in 2026. If you could just go to the next slide please. In terms of revenue, you can see they're down slightly to about $1.65 billion. Gross profit also down and operating profit. have been there was a decrease in the MPI price versus 2024 of 2.8% and the LME nickel price was also down 9.8% versus 2024. I mentioned at the start of the call the RKAB licence did significantly impact the profit and EBITDA for this year and did also have an impact on grade and production volumes. Pleasingly, though, in the things that we can control, HNC production increased by 6.3%. HM sales increased 10%, as I mentioned, with potential for another 60% this year. And RKEF cash costs decreased 1.8%. So that, in summary, delivered about US$283 million in adjusted EBITDA for 2025. If we could just go to the next slide. In terms of the balance sheet, it's a very robust balance sheet. Despite margin compression across 2025, as of 31st December, cash US$357 million, debt of US$1.2 billion, so net debt of US$866 million. That debt comprises US$800 million of unsecured notes maturing September 2030. and US $423 million of syndicated bank loan facilities with ranging maturities, with an additional undrawn US $50 million. There was an impairment charge of US $8.1 million, and that was in relation to writing down of some of the limonite in inventory, and that's unfortunately inventory that was sterilised for the construction of the E&C tailings facility. If we go to the next slide please, here you have the reconciliations by waterfall. I won't talk through the numbers but you can see that there and if there's any questions in relation to the waterfall, happy to answer those at the end of the call. If we could just go to the next slide please. In terms of our RKEF operations, I mentioned at the start of the call record MPI production of 1,055,658 tonnes. Sorry moderator, next slide please. Cash costs were 1.8% and that was driven by lower nickel ore price given that it is linked to the LME price and lower power costs. The contracted price of $11,187 a tonne was lower than 2024. And so that resulted in a decline in adjusted EBITDA. And we saw about a $261 a tonne reduction in adjusted EBITDA per tonne. So it was down about 22% on the previous year. The good news is, and I'll touch on that later in this call, is that we are seeing it, We've seen a significant increase in the NPI price, and it's already more than two times what our average EBITDA per tonne price was for 2025. If we could just go to the next slide, please. Our HPAL operations performing very strongly. Again, another record, 8,500. of attributable nickel tonnes to NIC and 802 of attributable cobalt tonnes. HNC continues to operate well above nameplate capacity at around 40% above nameplate capacity. Cash costs increased slightly, mostly attributed to higher sulphur raw costs. MHP contract prices increased by 8%. to around US$14,990 a tonne. And the margins, EBITDA per tonne margins were higher in 2025 versus 2024 of around 6,677. We've seen a very strong increase as well in EBITDA per tonne margins, particularly in January where we're over US$10,000 a tonne. ENC update. Progressing very well. The integrated nickel refinery for both the cathode and the nickel and cobalt sulphate plants is complete and you can see that in the photos in the top there. The H-PAL smelter itself is also nearing completion. We're starting to buy some of the consumables and outlaying working capital. Mechanical tests have commenced on key pieces of equipment such as the CCD circuit, thickeners, precipitation tanks, slurry storage tanks, reagent tanks and things like that. And there's been a reallocation of additional resources to ensuring the timely completion of the EMC plant. If we could just go to the next slide, please. We were delighted to announce the acquisition of 10% interest in the ENC project at a US $2.4 billion valuation on 100%, which is above the US $2.3 billion that Nickel Industries invested at. That investment was made by Sphere, COSDAC-listed premium alloy supplier. They're one of only five accredited SpaceX suppliers. and they're the only one that has a 10-year supply contract. So they supply all of the superalloy products, which are particularly nickel-intense, to the SpaceX rocket program. We see this as a huge endorsement of the quality of the E&C project, and what it will also do is it opens up the potential for E&C product to go into other sectors or other players within that industry aerospace and aeronautical industry which is a growing industry. If we could just go to the next slide please. There is a short video here which moderator are you able to click on that link? If it doesn't work we can just bypass this page. If you're not able to open it, look, I would encourage everyone to visit this link and to open it. It will give you, it's a very short video and it shows the size and the scale and the tremendous progress that has been made at the ANC project. If we could go to the next slide, please. Mining operations, I mentioned another record year of production, 19.2 million wet metric tonnes and sales of 9.9 million wet metric tonnes. Despite the limonite nickel grade decreasing, the limonite contract price increased 31%. That's related to increased demand for limonite ore for Indonesian HPAL projects that are non-integrated that we've been selling to. Again, this bodes extremely well for ENC, which will be fully integrated. So we will have a significant limonite cost advantage to... HPAL producers that aren't integrated with their mine. And I mentioned at the start of the call, unfortunately, there was about 21.3 million in standby charges in the December quarter related to the RKAB extension. But pleasingly, we were able to, we've been able to recently increase that to US, to 14.3 million wet metric tonnes for 2026. Unfortunately, that delay in the RKAV did see our adjusted EBITDA versus 2024 down slightly. Could you just go to the next slide, please? The Stamfala project is progressing very well. Of the required 24 kilometres of haul road that's required to link up the project with the IMIP, We are about 90% through completion of that first eight kilometres. We've also been progressing the permitting. We've submitted feasibility studies for both the ANN and the ETL projects and we're expecting approval of the feasibility study in the coming weeks. And for the ANN project, we've incorporated a slurry plant for an expansion of the ENC project, which is related to the MOU that was signed for the supply of 14 million tonnes of limonite a year for Sao Paulo. So that will allow us to monetise the very significant limonite resources that we have at Sao Paulo. We've been very aggressively drilling the project through the course of 2025, over 100,000 metres. And we're very confident of a resource of over a billion wet metric tonnes, which taking today's margin of around $12 a tonne, you can see the value of the Sampala project. And we have about US$20 million, $30 million of capex left to bring that project into production. So it's a world-class all-body, and we're making good progress there in the development of that project. We could just move to the next slide please. There's three big catalysts that we've been telling people that we're aiming to deliver for 2026. The first of those is the increase in the Hangia Mine RKAB. Whilst it was short of the $19 million that we were seeking, I think the loss of 4 to 5 million tonnes which equates to sort of 50 to 60 million US in EBITDA has been more than outweighed in the significant increase that we've seen in the NPI and LME nickel price and I'll talk about what that has done to our January results and what it means for us looking forward. To date, we are the only company that has achieved an increase, with larger companies being cut by almost two-thirds from their 2025 quota. So we think, again, strong endorsement of Hengjia Mine's environmental and ESG track record. The additional $5.3 million will obviously should increase the EBITDA for the Hang Jaya mine for 2026. The second catalyst is the commissioning of ENC, and as you've just seen, that's progressing extremely well. And we've reported HPAL margins of over $10,000 a tonne in January at 72,000 tonnes of nameplate capacity, but remembering that HNC is running at about 40% above nameplate, It's not unreasonable to think that there will be some outperformance at E&C as well. So we look forward to the commissioning and ramp up of E&C over the course of this year and then first full year of production in 2027. And then finally, the Sampala mine, as I've just touched on, progressing well in terms of development and that'll add a significant additional EBITDA as well. particularly given that we already have an MOU for 14 million tonnes of limonite on an annual basis. If we could just go to the next page please. So the closing share price of 101 as of last week and a market capitalisation of around US $3.1 billion. We think we are very undervalued if you look forward for what we can deliver in 2026 and in 2027. The broker consensus forecast gives us an EV EBITDA multiple of about 7.1 times, but that's on about a 500 million EBITDA estimate for 2026. I would note that from our NPI, well in January we delivered US $50 million in EBITDA and that consisted of NPI margins. jumping over around 150% from about $1,114 a tonne for the December quarter of last year to $2,800 a tonne. In January, we haven't yet captured that full NPI increase. So if you take our annualised NPI production of over 130,000 tonnes of nickel in NPI and apply a $3,000 a tonne margin, You can see that there's potential for close to 400 million US in EBITDA just to be delivered this year, assuming pricing stays the same from our NPI business. We then have the HPAL margins at above $10,000 a tonne, taking a conservative number of 20,000 to 30,000 tonnes for ENC for this year. There is another 200 to 300 million US in EBITDA, so we're already well past that 500 million broker consensus number. And then taking the 14.3 million RKAV and applying a $12 return margin, that's another 170 million US for calendar year 2026. So that puts us up around US 700 to 800 million. significantly reduces that EBITDA multiple back to sort of, you know, four times. So again, we think that the significant growth that we're looking forward to in 2026 is not yet priced into the stock. And as I said, looking forward into 2027, we'll have the first full year of ENC, as well as hopefully the commissioning of the Sandpiler mine, which will... deliver again more incremental EBITDA. The final point, we're extremely well leveraged to any change in the nickel price given our significant volume and I've just touched on the volumes for 2026 and additional volume growth coming in 2027. All of this growth is fully funded, requires minimal sustaining capex. We're the beneficiary of significant tax holidays, and any improvement in the nickel price offers significant EBITDA upside, and I think that's been strongly evidenced in our January results alone. And so looking forward to 2026, assuming no change from where we sit now, and that price increase has been driven by the significant RKAB quota cuts We're looking forward to a very strong 2026. With that, hand over to questions.

If you would like to ask a question, please press star followed by 1 on your telephone and wait for your name to be announced. That is star 1 if you wish to ask a question. And your first question comes from the line of Austin Yoon from Macquarie. Your line is open.

Morning, Justin and team. Just a couple of questions. The first one is on the mining operations. I understand there was a mining landslide incident happened after the RKAB update. I'm just wondering if that had any implications of the Hanjirama to, you know, continue mine with that mining quota, or has there been any changes since that event, the landslide event? Thank you.

Yeah, Austin, I think you're referring to a QMB tailings breach. That's not our operations and has nothing to do with our mining operations.

Yeah, I understood. That's a third-party one, but I just wonder if... Okay, sounds like no impact. The second one is, I believe, your RKEF and EMC is... fully covered by this new RKB quota. Just to understand for the HNC HPAW process, what's the source of all, and given the recent, you know, cut to Weta Bay, has that got any impact on the HNC operation?

Yeah, so this quota will allow us to provide 100% of the all requirements for ENC for 2026. It will also mean that we will be able to supply the same amount of saprolyte that was supplied last year to our RKEFs in IMIP, so that puts them at about 60% self-sufficiency, so there's no change there. We currently don't supply to HNC. They are supplied by another third party, so we will only supply moving forward this year. once we start commissioning 100% of our limonite, we'll be going to ENC and no other parties.

Yeah, thank you. And just lastly on the capital allocation, it's good to see that the cash flow pressure is taking off speed by the sell-down of the ENC. Given we're entering a period of a high nickel price, just keen to understand your capital allocation priority for the next 12 months and how you think about between debt reduction versus shareholder return. Thank you.

Yes, so we have about US$46 million remaining for 2% in ENC, which is due in the end of March of this year. In terms of any other CAPEX payments, there's just a US$20 to $30 million for the development of the Sao Paulo project. So look, that's it for this year. We'll have around US $100 million of interest payments. So I think, you know, looking forward, we should generate some strong free cash flow. How we will be looking, taking a look midway through the year and looking at, you know, is it appropriate to look at, to revisit the dividend, to look at the share buyback and obviously any debt payments. So we'll be making that decision as a board later in the year. We have been working throughout last year and we'll be continuing to do the same this year to really optimise that debt stack, bring down the interest rate, try to remove as much amortisation as we can and push out the maturities. And so we continue to work on optimising that debt stack moving forward. Thank you.

Your next question comes from Richard Knights from Baron Joey. Your line is open.

Hi, Justin. Thanks for the call. Just on the 14.5 million tonne quota, I presume you'll be looking to try and increase that mid-year. I mean, how do you think about the phasing of production over the next sort of six months? Should we be just sort of flatlining it at a or flatlining sales at a sort of 14.5 divided by 12 monthly number?

Yeah, we are able to make another application midway through the year to increase the RKAB, so we will be doing that. In terms of the sales numbers, once ramped up, and I think you can sort of look at around sort of September of this year, We will need about a million wet metric tonnes of limonite on a monthly basis. So we will be looking at sort of maintaining where we are at the moment. And so we shouldn't see a significant change on a monthly basis. And we've sort of now reduced our limonite supply to third parties. And so we're more focused on saprolite at the moment.

Yep, yep, okay. And I think you mentioned in the call that San Paolo, you're now looking at a 2027 start. Is that right? And if that's the case, when do you think you'll have to make the incremental payment to the landowner there?

Yeah, so we're very focused on permitting there. And unfortunately, as with a lot of things in Indonesia, there is permitting that approvals that are required that are outside of our control. But we obviously are doing everything similar to what we did with the RKAB to ensure that we can progress those on a timely manner with a good outcome. the resource development and closing of that project, we are looking to get an update out to shareholders this week.

Right, okay. So we'll wait for that. Is Chris on the line at all? I just had a couple of bit picky questions about some of the expenses, in particular There was a financing expense line of $22 million in there that didn't include the bond issue costs. Just wondering what that was.

It's not the bond issue costs. It's the early take-out of the October 28 bonds. Right. And obviously, taking it that early, there wasn't made whole to pay on that.

Got it. Got it. And then just in other expenses, there was a $15 million other expense, 15.6. That was... Quite a big number, just wondering. Yeah. The kind of things that were in there.

Yeah, there was some increased selling expenses out of our RKF operations and also a rise of the loan, of some of the loans to, which is in those eight. We would carry some loans for the same pilot transaction, but that's the majority of the differences.

Yeah. Okay. Brilliant. Thanks, guys.

Thanks, Richard.

Your next question comes from David Coates from Bell Potter Securities. Your line is open.

Great. Thanks, Justin. Thanks, Chris. Most of our questions have been answered, actually, but a couple of smaller ones. Justin, would you mind just running through the swing factors on the Hengjia mine expansion? Are you touching them at the start of the call? Would you just outline those again for us, please? Mm-hmm. In terms of the impact on profitability?

Yeah, there was obviously the significant one was the $21.5 million in standby costs in the December quarter. Other than that, margins remained fairly stable throughout 2025. We did see some price increases in limini at all. But look, the big factor in angio mine performance was really that those standby costs pretty much for the whole of the December quarter. We were only able to mine for the last 19 days of December.

And what was the sort of, I guess, sort of the lost production that came out of that, that you might estimate out of that?

Yeah, look, given that prior to that we actually had two record months before we stopped of over 1.5 million, potentially that's sort of 4.5 million tonnes, so probably 45 million US, that's at a $10 margin, probably more than that at 12, which is what we're seeing. So that's sort of 50 to 60 US in lost EBITDA, so I think that's sort of Putting that back into the adjusted EBITDA numbers, it would have seen us on a pretty even keel to the 2024 adjusted EBITDA number.

Cool, thanks. And Chris, again, a little bit of a detailed one. DNA charges for heading to 2026. What sort of an increase would we be looking to see, roughly?

If you can illustrate... Off the top of my head, I'd be guessing, so I'm not going to do so. I'll come back to you.

Fair enough.

Okay, cool.

Thanks. Thanks, guys. Cheers. Thanks, Dad.

As a reminder, if you wish to ask a question, please press star followed by one on your telephone and wait for your name to be announced. That is star one if you wish to ask a question. And your next question comes to the line of Donovan Tan from BlackRock. Your line is open.

Hey, good morning. Thanks for the presentation. I think we've just got a couple of clarification points, right? So the first one is that I know that you are producing above nameplate capacity for the RKEF plants, but how much does ENC and the RKEF plants require separately on a full year of nameplate capacity?

Yeah, thanks, Jonathan. ENC will require about, at full nameplate, about 12 to 14 million tonnes of limonite. And our HPAL operations roughly require about 1 to 1.2 million tonnes of saprolyte ore on an annual basis, and we have 12 lines. Four of those, I would note, are at a smaller capacity. So our saprolyte requirements are about sort of 10 to 11 million a year. So that's where we sold close to 6 million in saprolyte last year. So that's where we're sort of sitting at about that 60% self-sufficiency.

Okay, thank you. Then I guess the follow-up question to that will be, what's the cost difference between being self-sufficient and having to purchase the required odds? And I guess, do you see any difficulty in purchasing the required odds? Because it looks like it's like $20 to $25 in total versus your $14.5 quota.

Yes, there is a big cost advantage in being self-sufficient. The reason for that is that given the shortages, there is a premium over and above the market price. That premium has ranged anywhere from $10 up to almost $30. So given that ore is about 35% of your cost base for your operations, there is an impact to the profitability of the RKEFs. But I think that's been more than outweighed. If you look at the NPI price increase, as I mentioned, it's up over 100, or there's a significant increase in the NPI price. And that led to, if you look at January, you know, 150% increase in our EBITDA per tonne margins. So there is an impact, but the, you know, The increase in the MPI price is far outweighing any increase in the ore costs. In terms of supply, Indonesia consumed about 270 million tonnes of ore last year. The current RKAB quota is about 250 million. That's what the government's looking to set. So there may be some shortages. That will be filled by ore from the Philippines. But we don't see any risk to our operations of being able to secure all supply. We think the risk will be smaller non-integrated players that won't be able to purchase all and don't have the power advantage. They already have a much higher cost.

Got it. Thank you for the clarification. I think I just have one last question. So in terms of your Sampala mine, what's the expected quota for 2027? I mean, given that it got kind of tightened?

For Sampala, our initial target will be about 6 million, ramping up to... We obviously would need about $14 million to meet the requirement for our MOU. The reason we're confident in being able to achieve that is Sampala actually has three different IUPs. So each IUP makes an individual application. So we think we'll probably have a better chance of, let's say we want to get to 18 million tonnes, We think we'll have a better chance of doing an aggregate of 6 million tonnes per company per IUP rather than trying to get a headline 18 million tonnes out of just one IUP.

Okay, got it. Thank you so much.

Your next question comes from the line of Dim Aryasingh from UBS. Your line is open.

Thanks, guys. Thanks for the call today. Just a couple of ones. First on the EMC ramp-up, so you talked to commissioning over this quarter. Just in terms of, like, first sales, though, can you walk us through that? Have you got the license to commercially produce, I think, to the IUI? Yeah, what does that look like over the course of the year?

Yes, so the IUI, we can't actually apply for that until there's sort of mechanical completion and a closing off of the investment capex by the government. And then in terms of first sales, we're probably targeting somewhere around July. Given that first sales out of the HPAL plant, you're talking about a... a two- to three-week resonance time from feeding first ore to achieving first product, and about a 40-day resonance time from feeding MHP into the cathode and sulphate refineries to produce product from those refineries.

Okay, cool. Yep, that's clear. And then just on the broader RKAB news, Is there any, and so, you know, somewhat positive that you got, you know, more than previous years, but not what you requested. Is there any signs between in, you know, so you getting allocated 14 versus Wither Bay, I think getting 12 and requesting 42. Yeah. Can you walk through the rationale or is it pretty opaque, I guess?

Look, that is something that we have raised with the government. We think that providing more transparency would certainly be well received by miners in Indonesia. I mean, Weta Bay, we're told that their number was calculated based off, they only have eight RKEF lines. So it was the 8 RKEF lines which require about 8 million tonnes a year plus they were given 30% over that. Our number was based on what we did last year in saprolite plus the 8 million tonnes of limonite that's required for ENC this year given that it's not a full year of production and so it's not the 12 to 14 that's required next year. So look, they've told us that there is some science behind it, but they haven't provided any sort of transparency in terms of how it was actually calculated, or they haven't provided transparency certainly to the broader market either. Slightly frustrating, but look, I think it's not also just that. It is, you know, what is your rehabilitation track record and your environmental track record? Are you up to date on payment of royalties and taxes and have you been a good payer of royalties and taxes rather than being someone who's been slow or lax? So I think there's other things that go into it. So as I said, unfortunately it's not transparent at this point but something that I think a lot of miners in Indonesia are pushing the government for moving forward.

Awesome.

Okay, cool. Thank you.

Cheers.

Thank you.

Your next question comes from the line of Mitch Ryan from Jefferies. Your line is open.

Well, thanks, Justin and team, for taking that question. Just following on from Jim's question there, given the material cuts to some of the feed sources by WIP, what happens to your capacity within that if you're unable to source appropriate feed, or how do we think about just the broader facility there? Does everyone get scaled back? accordingly or do some lines get turned off if they're unable to source 100% of the required feedstock over the course of this calendar year?

Yeah, look, we actually had a board meeting at the end of last week with Ching Sen and they are confident that there'll be no scaling back, that they'll be able to source the required ore from other third-party ore suppliers. And coming back to the numbers, I mean there was only 270 million produced of all sales made last year and there was over 350 million of RKAB quota issued. So a lot of companies were issued quota and didn't even use it. The 250 that they've introduced this year, assuming everyone reaches it because obviously it's very valuable. We think there's only a small requirement of awe and that $20 million will most likely be to other non-integrated players that, as I said earlier, I think they'll struggle to source that awe in the market.

Okay, thank you. And then just with the EMC ramp-up, can you give us... You've obviously got performance guarantees within that agreement. Can you just remind us of some of the key milestones for those and how that would work if for any reason that ramp-up was slightly delayed?

Yeah, that's something in terms of those guarantees that we'll be working through in the coming months as we move forward with the commissioning and ramp-up.

Okay.

Thank you. That's it for me.

Thank you.

Your next question comes from the line of Tin Win from Win Dragon Family Trust. Your line is open.

Thanks, Tim. It's been covered. It's good. Thank you. Thank you.

As a reminder, if you wish to ask a question, please press star followed by one on your telephone and wait for your name to be announced. That is star one if you wish to ask a question. And your next question comes from Jake Mintang from Barclays Bank. The line is open.

Hi, good morning and thanks for the call. I just want to get some clarity on the ENC's 10% acquisition by Sphere. There have been some changes to the final terms from what was originally announced. Can you just walk us through why that was the case, especially the credit enhancement that nickel industry has provided, as well as, you know, nickel industry's stake, which was, I think, originally intended to be 55% at the final end, but is now at 46%.

Chris, do you want to take that one?

Yeah, that's fine, Justin. Thanks for the question, Jingming. The first one, I think, what you might be referring to I don't think there has been any change, sorry, I don't think there has been any change in what we've announced. Sphere's always taking 10% of ENC for $2.4 billion. $30 billion of that is in an equity payment, which they have made in full as of today, and the remaining $210 in debt. The important thing around the $210 in debt, when we're in conversations with Sphere towards the end of 2025, Sphere was a 200 mil market listed market cap listed company in Korea with a market cap of around US $200 million very difficult for anyone at that level to acquire to make a 240 mil acquisition we saw the strategic advantage in bringing or strategic benefit of bringing SpaceX into our supply chain into our customer chain sorry and being a supplier effectively to SpaceX with Sphere being the intermediary so we The three lenders who provided that loan are very well known to Nickel Industries. Two of the three are existing lenders to Nickel Industries and so they were very comfortable taking effectively Nickel Industries risk and so we provided guarantees to Sphere for that $210 million as set out throughout the report. You can see that it positions us very well if for whatever reason Sphere ever defaulted, based on the cash flows that we're seeing out of H&C and what we expect at E&C. We cannot see that that could be the case, but we would simply step into Sphere's shoes for that 10%. Effectively acquire that and then take over the loan. So effectively acquire that remaining 10% for a significantly lower amount than what we were previously looking to pay for our remaining 11% for E&C. The reason why we've gone – so that left is still sitting at 44% rather than going up to 55%. The reason why we've announced another 2% increase is predominantly because we wanted to be the largest shareholder in EMC, and so we – and Shanghai Decent was very happy with that. So we increased, bought 2% and they obviously sold us down 2%. Well, they will sell us down. We've got a remaining $46 million payment to make by 31 March and that will be our final payment for E&C. What it also does, not making those final payments, as you can see in our announcement, is it releases another $207 million of commitments that we were going to make, two payments, one on 1 July this year and one on 1 October. So it's really a way to also strengthen our balance sheets going forward. And as we continue to watch the margins, hopefully the margins stay steady. I'm not going to try to predict margins, so just releasing in the near term that commitment of over $200 million through conversations with various interested stakeholders was considered to be very prudent balance sheet management.

Appreciate that, Chris. Thanks. If I can follow up, can you talk a bit about when Sphere's off-deck arrangement will start and if you are in discussion with any other third-party customers for off-deck arrangements as well out of ENC?

Sphere is a 10% equity holder in ENC now, has rights to 10% of the products that comes out. So as soon as production starts coming out, as products are sent from ENC Sphere will receive its share of the products. In terms of other customer or other potential off-takers, Justin, do you want to talk to that?

Yeah, so we are in discussions with a number of other off-takers. Obviously, the Sphere announcement has been positively received. So we will continue to have those discussions as we near first production of first product.

Thank you, Justin. That's all from me.

There are no further questions at this time, so I'd like to hand back for closing comments.

Thanks again, everyone. As I finished on, given the... the significant strengthening in the MPI and LME nickel price and the delivery of 50 million US in EBITDA from operations in January alone. We think that we're extremely well placed in 2026 for a very strong year and obviously with E&C commissioning at the current $10,000 a tonne margin in the HPL business, We set up for a very good year and we look forward to delivering EBITDA that should be significantly stronger than last year, which was obviously a tough year given it's probably the lowest nickel price we've had in the last couple of years. But despite that, we were still able to deliver robust EBITDA. So thank you everyone for your time today.

That does conclude our conference for today. Thank you for participating in Man at War Disconnect.