Nickel Asia Corporation

Thank you to the PLUS team and Adrian for that very engaging discussion. So next in our lineup, we're pleased to welcome Nickel Asia Corporation. Presenting on their end will be Mr. Andre B., Vice President for Finance and Corporate Planning and Deputy Chief Finance Officer. Joining him in the Q&A will be Mr. Dennis Zamora, President and Chief Executive Officer. Moderating this session will be Mr. Gab Aguila from Sun Life. So now as we begin, please turn your attention to the video as we get to know more about nickel.

In 2008, we decided to bring our sights into one umbrella. Today, we are a natural resources development company, harnessing minerals and renewable energy sources. As stewards of our country's resources, we take to heart the privilege that comes with our responsibility. And so, we remain committed to driving growth through products and services that contribute to creating a green economy. For our communities. For our earth. For all of us. We are NAC.

Good afternoon. Good afternoon to the participants of the PSE Star Day. I'm Andre D. for Nickel Asia Corporation, and I'm happy to be here with you, together with our CEO, Mr. Dennis Zamora, and our Chief Commercial Officer, Mr. Koichi Ishihara, and Miren Kueto, who is part of the Investor Relations team. We're here to present Nickel Asia Corp.' 's nine-month results. Yeah. So for the financial highlights, let me go straight here. And if I could, we could just pay attention to the left most bar chart on the upper part of the screen. It indicates our top line performance. So for the first nine months of 2025, revenues have increased 35% improvement year-on-year to 22.8 billion from 17 billion, and that's because of the favorable nickel ore prices, specifically because of the saprolyte ore exports. The bar chart in the center displays our consolidated EBITDA for the period. So that's close to 11 billion pesos. It's a 65%. improvement from last year's 6.6 billion. Again, the profitability driven by better ore prices and more efficient mine operations. So we've already surpassed our full year 2024 EBITDA with the nine months because of the circumstances surrounding the nickel ore price dynamics. Then the rightmost bar chart is our attributable net income. That's for the nine months, it's 5.2 billion. So it's doubled from last year's 2.6 billion. This puts us about 1.9 million ahead of the full year 2024 core net income performance. So the improvement in net income is due to the higher direct shipping ore prices. These are up 52% year-on-year. And another is our one-time income from the 1,800 million generated from the sale of our stake in Coral Bay HVAL plant earlier this year. And then if you refer to the table below, the first row summarizes our gross profit margins. It stood at 63%. So this is up 8 percentage points compared to the same period last year. Second row is our EBITDA margins. These stood at 48% for the first nine months. That's an improvement of 9 percentage points. So despite OPEX increasing due to more volume, we were still able to achieve high EBITDA margins. The next row indicates our net income margins. These also increased to 32% from 22%. Now moving on to the next slide for the mining highlights. The first set of bar charts on the left shows us the nickel ore sales volume sold. So green portion represents the saprolyte exports while the orange portion represents the limonite H-PAL deliveries. So mining sales volume increased 2%, totaling 13.89 million wet metric tons. Ore exports, which is around 40% of mining sales, reached 8.32 million wet metric tons. This is up 3% year-on-year. And HPAL deliveries totaled 5.57 million. That's a 2% increase from previous year. The middle bar chart is a change in ore prices. So the significant change is the average prices registered for saprolite, which is $37.52 per wet metric ton. That's a 52% increase from last year's average price of $24 per ton. And then for the limonite H-PAL, there was a decrease of 6%. And the price to $10.17 from last year's $10.78. This is due to lower nickel LME rates, which is a factor when considering for the price of HPAL delivery. And this is because of the global oversupply for nickel metal. But due to the more favorable saprolite ore export prices, we can see the rightmost bar chart, the combined ore revenue rose by 41%. So that is at 20.96 billion pesos. Table below gives us additional context on nickel prices. The first column indicates the average nickel LME price per pound. So for the first three quarters of the year, it amounted to $6.87 per tonne. It's lower compared to the $7.75 per wet metric ton last year. Nickel LME are still weak at the moment because of the global oversupply of refined nickel metal. However, the supply of raw nickel ore remains tight and limited, which explains why ore prices remain elevated. Below this, we have a summary of nickel pay factor for our ore exports. So nickel payability for ore exports for the whole nine months is very high. It's at 27.31% compared to last year's 6.68%. So even with low nickel LME, nickel ore prices remain higher. And that's because of the tightness of ore supply in Indonesia and in the Philippines combined. So in Indonesia, it's due to the mining quota permit issues, while the demand for ore processing remains strong in their country and also in China. Another thing to explain here is the nickel pay factor for the HPAL. You would notice that this year, in the nine months, it had increased to 9.9% from last year's 9.24%. So despite nickel LME falling down, we've been able to successfully negotiate better prices with our customers through the HVAL plan, the demonite ore from us. Next slide. Now for the revenue analysis, so we'll show you a waterfall, just to dimension where the gains in revenues are from last year. So a big part of that gain is the improve or export prices. So that's the main contributor. That's almost 6 billion pesos effect. Then the other parts that follow that is the more shipments contributed from Rio Tuba and Manikani, a mine that we just recently opened. and all other effects are due to slightly lower average FX lower limestone deliveries and no TSF activities for the year next slide then on the cost side there's an increase in cost but it also goes with more ore that's been produced So because of the 3% increase in ore, we also saw some increases in mining costs. There's also contribution from depreciation. And of course, the ramp up from the new mine, the Manikani operations. And also higher excise tax and royalties because of higher prices of the ore. So really, it's more variable. That's driven the increase in cost and expenses. Next slide. Now for the investment in HPAL equity losses, we completed the sale of our 15.625% equity in Coral Bay. So for this year, we were able to trim our losses in our equity investments. If you look at it year-on-year, it's a 59% improvement or reduction from the same period last year as a result of our divestment in Coral Bay. Next slide. Now for the balance sheet highlights. Our total assets had grown by 10%. We are now at a $67.6 billion asset base from last year's $61.7 billion, primarily driven by a generation of more cash and cash equivalents because of the better ore price. So now that cash stands at $18.9 billion. So that's an increase in our cash, short-term cash investments, and cash-managed funds. Trade receivables, likewise, increased by 31% from higher sales. Our liabilities, not so, just an increase of 10%. Notable movements include short-term debt increase, 10%. It's a long-term debt, that's a significant increase, 85%. 2.1 billion to 3.8 billion this year. So these are really from the proceeds from bank loans used to fund or construct our solar project in Subicawag. Our equity grew by 10% to 48.6 billion. This is an 8% increase in equity attributable to the parent now at close to 40 billion pesos. And then in terms of gearing ratios, gross debt ratio is low at 0.28x. And then net debt ratio, we are actually in a cash position, so that's at 0.04x. So, yeah, we are in a net cash position. Next slide. And we just recently announced cash dividends that we declared. It's a special cash div. It's more than the dividend policy of regular payout. So last November 11, we announced and declared a special cash dividend of $0.07 per common share, payable on December 15 for shareholders on record of November 28th. So this brings total dividends declared by our company to 18 cents per common share. That represents a payout of 80%. 80% payout of previous year's net income. Now we move on to renewable energy. So our GSI project, our pioneer project, this is the visual of our operations in Mount Santa Rita, situated within the Subic Bay Freeport Zone in Zambales. This is run by Jobim SQM. So the site has installed an operational capacity of 172 megawatts. It's one of the largest in the country coming from a single solar power generation plant. The table on the left indicates the current off-take profile of Santa Rita as of the 9 months of 2025. 89% of energy sales mix is from PSAs. The remaining 11% is exposed to the USM. Moving forward, the direction is to fully contract the JSI via PSAs. Next, as we move to the financial highlights, for the nine months, 2025, generation is up 2% year-on-year to 171,279 MWh. EBITDA for the nine-month period is at 617 million pesos. It's a decline of 16% year-on-year due to the lower tariff rates. However, because JSI sales are predominantly secured through PSAs, The decline in Western prices during this period was mitigated by the PSA contracts. Next slide. Now for the pipeline. Here, this is our project that just recently turned on, the San Isidro later project. So this is the first project with Shell Overseas Investments BV. under a joint venture company called Greenlight Renewable Holdings Inc. The latest project is divided into two phases. Each phase will contribute an additional 120 MW or an attributable 72 MW capacity to EPI's portfolio. For Phase 1, energization, testing, and commissioning already began last October, and COD is targeted for the second quarter of next year. For the Phase 2 of Leyte, another 120 MW, the notice to proceed has already been issued and the construction of the solar facility started in the first quarter of this year. We anticipate energization to commence in the second quarter of 2026 and COD to take place in the third quarter of next year. This is our San Juan Botolan Sambales project. Again, it's in partnership with Shell through Greenlight. So this will add a total capacity of 59 megawatts. So an attributable capacity of 35.4 megawatts. for nickel asia for api as seen in the photo the botolan project is in its early stages pre-development activities have already been completed and land possessory rights have been secured last october the notice to proceed was issued we are targeting energization for both phases to be by the third quarter of 2026 and the commercial operations to begin by fourth quarter of next year Moving on to the Subic Kawag project. So this is solely developed and managed by Emerging Power Inc. Here is a visual of the project in Subic Kawag. We are developing a 145 megawatt facility divided into two phases. For the first phase, which is 70 megawatts, as you can see in the picture, construction is currently underway. and we are targeting to test and commission this by end of 2026, and commercial operations to commence by the second quarter of 2027. The construction for Phase 2, or 75 MW, is expected to commence before the end of this year. Target energization is for third quarter of 2027, and commercial operations will begin by early 2028. This next slide is our project in Nazareno, Bataan. This is a 50 megawatt project that is currently under pre-development activities with land possessory rights already secured and the EPC bidding already completed. Construction is targeted to commence by second half of 2026. It should also be noted that we are actively assessing the integration of battery energy storage systems to maximize the project value and operational efficiency of the Nazareno project. This marks the first among our RE initiatives to formally incorporate BES as a component. Next slide is the project capacity buildup of generation assets. From what I mentioned, this slide from those projects that were mentioned prior to this, so we anticipate to reach gross installed capacity of 293 megawatts by 2025. 5 by and 542 megawatts by 2026 by 2027 with several projects as mentioned already in advanced stage of development we are targeting a total gross capacity of approximately 1100 megawatts Previously, our guidance projected an installed capacity of 1 GW by the end of 2030, so barring any significant delays, we now expect to achieve this milestone by end of 2027. Other Updates So for the CAPEX, we've broken down the CAPEX for the mining business, for the gold business, and also for the renewable energy business. For mining, we spent approximately 1.15 billion during this nine-month period for the year and expect to catch up and invest an additional half a billion by year-end. This year's mining CAPEX was primarily focused on reflating, replacing and upgrading mining equipment for both our existing operations and our new mine in Manikani. We also allocated capital for construction of a new causeway in Dinapige in Isabela. And looking ahead to next year, we anticipate spending approximately a lower amount at 1.2 billion, with the bulk of this being earmarked for refleeting activities. The big part for our capital expenditures is really in our renewable energy business. CAPEX was approximately 4.6 billion during the nine months, and we forecast to add an additional 6 billion for our projects that are being developed. So these investments are tied to the planned notice to proceed for our Batolan solar project. as well as the continued construction progress for both Kawag and Leyte projects. For next year, we anticipate a total CAPEX of around 8.7 billion, with 5.1 billion allocated to green light projects such as Leyte Phase 2 and Botolan, and 3.5 billion earmarked for the ongoing development projects of Kawag and also Nazareno. We also have CAPEX allocated for our gold and copper exploration company, Cordillera Exploration Company. For 2025, mining exploration costs under SECSI are projected at $127 million. And then for next year, we anticipate allocating around $221 million for gold and copper exploration. The next slide will provide further details on the status of this aspect of the business. So for gold and copper, for SEXI, our JV with Sumitomo Metal Mining, we are happy to report that we have confirmed the presence of gold-bearing veins and porphyry copper-gold mineralization. So the highlights from the recent drilling program conducted at the San Luis Prospect, which is situated in the southern section of the tenement, are as follows. There's a gold-silver intercept, so 4.6 meters grading, 15.5 grams per ton of gold, and 85 grams per ton of silver, from 69.9 to 74.5 meters in drill holes. And copper-gold intercept is 50 meters grating at 0.50 grams per ton of gold and 0.42% copper from 300 to 350 meters. So what this tells us is these results are encouraging and strengthen our confidence in Cordon's project potential and reaffirm our commitment to advance further exploration activities throughout the year end with the goal of further delineating the gold-bearing veins and defining the depth and extent of mineralization. Yeah, so that ends our formal presentation and we'll be happy to open the floor for questions. So I'll hand it over now to Mr. Gab Aguila to facilitate the Q&A.

Thank you for that. Great presentation. Looks like it was a good quarter for you guys. Maybe before we go into the details of the quarterly earnings, maybe some top-level questions first. As you all know, Nicholas having a drive in market prices coming in the first quarter and into the second quarter, and now with their third quarter results. Maybe you could walk us through the current state of the global nickel market and maybe share your outlook on the pricing trends moving forward. Quite interested to understand how the company would be adapting its strategy to stay competitive and capture the opportunities in this evolving landscape.

Yeah, sure. Thanks for that question. So, when considering all nickel metal product types, the market is currently in a state of global oversupply. So, which explains why the LME nickel price hovers around $15,000 per wet metric ton. But if you look at our ore export prices, you would see that it's already decoupled. It doesn't follow the nickel LME. so while there is an excess in class 1 nickel supply and some excess in class 2 nickel supply there is a tightness in the raw nickel ore itself and that's driven really by the Indonesia government regulating the permitting and the supply so this is where it benefits us in the Philippines and where we see this policy will continue I think they've sent a clear message that in terms of org permitting, they're very strict with environmental compliance. So in terms of awarding of permits, they've also been stricter. So in fact, the three-year quota in Indonesia has been reduced back to a one-year quota, and that was implemented last October. The way we are responding to the industry shifts is by broadening our renewable energy portfolio. So as we've taken you through the projects that we've mentioned a while ago, these are the things where we are highly focused on. And as a response also to what's happening, we are also doubling down on our upstream activities. That's why you could see that we've divested from our downstream exposure in the market in Coral Bay, but we are now ramping up in our Manikani mine, which will be the next leg of growth for us. So yeah, that is how I think we are responding. And plus, we're excited about our gold and copper prospect. We just hit the gold veins. Now, the next step is to really define the resources and reserves for this asset. So that's something to look forward to. And you know where gold and copper prices are at. It's at very healthy levels. So we're looking forward to take advantage on that. So we need to execute on that project.

Maybe I do want to ask this question that's tied to that, as you mentioned the money canning. Any idea you could give us moving forward on the amount in net metric tons that may come from the mine and how that's going to go into the mix of overall right now from where nickel stands?

Yeah, sure. So, you know, In the nine months, you could see that our exports really drove our earnings. It really moves the meter. So if we're able to export around, I guess we're on track to do 11 million for the whole year. So Manikani's contribution this year is barely half a million, maybe half a million only, 0.5%. So they're doing around 4% to 5% of total volume. But next year, we're targeting to do 3 million tons. And the nickel grade from Manikani will be the highest among nickel Asia mines. So what that will mean is if ore exports stay where they are in terms of volume, 11 million tons, and we do 3 million with Manikani, Effectively, we're pushing 30% more, close to 30% more year-on-year for volume. And then in terms of pricing, if our ASP for exports are at $38, and that's not the highest grade, and Manikani would give you a kicker of around 10%, at least 10% to 15% more in price. Yeah, then I guess I'll leave it to the imagination of the analyst of how that they could forecast the revenues for next year.

Got that. Thank you. You know, speaking in particular away from the metal prices, this year has had quite a quite a year of weather-related disruptions, and particularly heavy rainfalls. How has that affected your company so far? And what have you been doing to be able to mitigate these setbacks?

Yeah, our company has taken a proactive approach to minimize these weather-related risks and logistical risks by really carefully planning our mine production schedules, our ship-loading activities. So even with the very challenging weather, you could see that we've been able to deliver on the volumes. And we're on track to reach the target. And then we also maintain advanced stockpiles to ensure that we can continue meeting the requirements even during unforeseen disruptions.

Got that. Okay. Yeah, well, related a little bit more to that, just going to take a quick look at the questions on the side. Maybe let's talk about this first. Since we've talked about the strategy, competitive strategy, and how weather-related disruptions is being addressed, looking ahead from where you are right now, what would you say that NICL's top strategic priorities would be over the next two to three years?

Yeah, thank you. Thank you for the question. Well, Dennis could add to this as well. But for the strategy, it's really executing the nickel mining business. We will need to add resources and add our tonnage. So growth in nickel, we would like to achieve like double-digit growth in terms of volumes. And Manikani would be the next big story as we talked about. We think we can do 3 million tons from that. And this is high-grade nickel ore. So look to us to deliver on that. And then for our renewable energy business, look to us to be able to execute on the timelines that we are disclosing in Kawag, in Leyte. So these projects is really going to drive the growth. and then also look to us to press harder from for our cordillera exploration we have found the gold so look for us to drill further and try to define the resource and reserves and you know we'll be a completely different company 12 months from now uh hopefully we'll be reporting supporting tonnages that are more from where we are today, installed capacity of Tobol than where we are today, and then a gold and copper prospects of where reserves and resources are already identified. So I guess that's where I see our three legs of growth. And if Dennis has anything to add.

Yeah, well, those are all accurate and In particular, to be more specific, we're very excited about the gold and copper prospect, but usually these projects take a long time. For it to be a mine, that would be possibly 2030 or later, but maybe in the next two to three years, we will be able to firm up the reserves and resources. Hopefully, our target will be to come out with JORC and PMRC certified reserves and resources within maybe two to three years. And then on the renewable side, it is definitely an area of growth for us. And I think two things I want to note here is that we will be looking at other opportunities, not just in the field of solar energy, So we are mindful of the additional supply in solar in Philippines and the need to diversify our projects into other types of renewable and clean energy. And also, I want to address the CAPEX issue for solar and for EPI. Our intention is for EPI to be able to fund itself in the near future. So this means that EPI will have to do its own fundraising activities for its equity moving forward. And this also means that Nickel Asia can now focus its resources on our other projects for growth. And of course, to fund future dividends. That's all I have for now.

Thank you. That at least gives us a glimpse of where we see nickel to be going over the next three to five years. But maybe for now, as I'm flagging some questions here, we could take a look in where we see it in the next few years or quarters in fact. Interesting that you talked about RE and the growth of that pipeline. And the question that we have here is, could you give a glimpse of Nickel's contribution mix based on mining versus RE? If you can give a 5 or 10-year timeframe, that looks like it would be appreciated. And from the CAPEX schedule, there is some concern that is RE being beefed up in anticipation of mine resource depletion?

Sure, sure. RE will increase in terms of its share, but it will still not be a huge chunk of our revenues in EBITDA. Our estimate is at most it would be one-third of our revenues in five years. And then with respect to the CAPEX issue, I just mentioned in my previous statement that although there will be significant CAPEX for the power sector, we will project finance 70% of the funding requirement. And then the 30% equity will come from either the internal cash of EPI or from external funding. So that's our goal moving forward.

Got it. Maybe a little bit more of a technical question when it comes to the RE projects. As you do your planning and you start to execute these RE projects in the pipeline, maybe you can give an idea of what sort of IRRs are you looking at. And by – yeah, we already have the 2027 outlook on the percentage between the two. But, yes, more on the IRR question.

Yes, for – For our grid-connected projects, solar projects, our project IRR target is about 12% or above. And then for our other projects, we're aiming to achieve a higher IRR. But that is our base target, 12% project IRR.

Okay, thank you for that. There is a question on any updates for the plan to cease the operation of Coral Bay Nickel Corp.

Yeah. Well, we disclosed this before, so we are looking at the operations to close by 2028. But what we would like to highlight is From this moment on, we've already been preparing for a transition period on how to respond and transition the community from the closure of Coral Bay. So as early as this year, this whole year, we've been planning for that. So rest assured, we will be able to do it. in the way that's expected out of us. After all, we've operated the plant since the early 2000s. So we owe it to the community for a proper transition.

Understood. And maybe on a forward-looking idea, there is a question asking for an update on JV with DMCI for a possible development of HVAL.

Well, I guess for that, we continue to study What would be the... And a big part of it is the timing as well. As you know, Nickel LME is quite depressed. So there will be a right timing as well in order to kickstart the joint venture with DMCI. So there are no news as of now. But we're excited to work with them once we're able to firm up the plans and get the timing. The overall supply in nickel in the near term will remain, but our view is that in another five years, the market may change, and the market may change sooner. So we'll be prepared for that.

Okay, got that. Okay, well, maybe two more questions. I think we're at the eight-minute mark. You know, with all of this talk in mining, sustainability is especially critical in these industries. Where has the company positioned itself as a leader in these responsible practices? Any color you can give on that?

Oh, yeah, I do have some. Well, we are the first company in the Philippines with mining assets to be admitted online. as a member of the United Nations Global Compact, UNGC. So Sustainability Roadmap aligns with global standards and regular materiality assessments. So some of the programs that are part of that is the Environmental Protection and Enhancement Program, or the EPEP, which focuses on water and management, land rehabilitation, biodiversity protection. So, in 2024, we've invested like 514 million pesos, and we also have the Social Development and Management Program, or the SDMP. It's a five-year plan supporting education, health. infrastructure and livelihood initiatives we spent 221 million for this in 2024 so we view profitability and esg compliance as complementary and not really competing with our priorities so sustainability is embedded in our core operations

Got that. Well, it looks from the question, there's been a good question from the crowd that there's a great following for nickel, especially now that you're seeing improved prices with a good prospect on the Indonesian ore ban. What message would you like to leave your potential investors about why now would be the right time to invest in nickel Asia?

Well, I think the timing couldn't be more perfect. We are at a situation where it really favors the upstream miner. So the nickel ore and the ramp up in Manikani will definitely provide the nickel growth story. And then we have our renewable energy arm, which will double in capacity soon. So it's accelerating. So our diversification away from the nickel metal is present in emerging power ink. And then to add to that, because of the prospects of gold and copper, and then if we're able to define the resources and reserves soon, now is the best time to invest in nickel Asia because... We are growing the nickel business, our core business, and then we're diversifying away also into other revenue streams.

All right. Got that. Fielding no more questions. I think all the questions have been answered quite thoroughly with the guidance. Thank you so much to Nickel's management. Great results in the nine months, 2025 so far. Moving forward, we'll continue to track where Nickel goes in the future. And thanks for that. We're passing it back now to Kami for the next segment.

Thank you very much, Sir Andre, Sir Dennis, and Gab for sharing valuable insights into the company's quarterly performance. So before we move on to our final two presentations of the day, we'll take a short five-minute break. So feel free to grab a refreshment or take a quick pause and we'll resume shortly.