Thank you. Thanks everyone for joining the Nickel Industries March quarterly results call.

If I could ask the moderator just to move to slide 2, please. Kick off with safety and sustainability.

Company-wide 12-month lost time injury frequency rate [cough] across NIC controlled entities was zero with no lost time injuries recorded during the quarter against 4.8 million safe man-hours worked. For the 12 months to 31 March, it's 17.7 million man-hours worked without any LTIs.

Company-wide TRIFR at the end of March was 0.45. We were saddened to report that there was unfortunately a fatality involving a contractor engaged by PT Fajar Metal Industry who is building the ENC HPAL.

It occurred on the construction of the transmission lines between the ENC plant and the slurry plant and dry stack tailings facility, which has been built on the company's Hengjaya Mine. Full support has been offered to the victim's family following a comprehensive investigation by the relevant authorities.

All activities have recommenced within the Hengjaya Mine operations, except for work on the transmission lines, and we expect work to recommence there shortly. [cough] In other sustainability work, Hengjaya Mine is one of only a handful of mines that has been awarded a biodiversity area.

As at the end of the quarter, we were 50% complete in terms of construction of various facilities inside that biodiversity area, which will allow endemic flora and fauna to be studied, act as an area of education, but probably most importantly, to be able to preserve those species. Then finally, we're pleased that we've been able to increase our university scholarship program.

We're entering our third year of that particular program, and we're expecting to be supporting 30 students by year-end. If we could just move to slide 3, please.

[cough] Pleased to report US$135.6 million in adjusted EBITDA from operations. That's our strongest quarter since December '23 where we reported $135.4 million, which was an unadjusted number.

As I've said, strongest quarter in a while. RKEF production remained steady, and pleasingly, we saw a very strong increase in margins, and that's reflected in the EBITDA rising from $35 million last quarter to $85.8 million for the March quarter.

Our HNC HPAL continues to perform well above nameplate capacity, over 40%, and we saw increased EBITDA there, particularly in EBITDA per ton. Mining ore sales back at levels that we were pre the RKAB issuance, and we were pleased to announce that we were able to secure 14.3, which is a nearly 60% increase on the 9 million tons that we held last year, and that's against the backdrop of many of our peers receiving significant cuts.

The mining EBITDA was close to 30 $30 million US. If we could just move to slide 4, please.

Looking at our RKEF operations, the real story here is the significant increase in the NPI price. Sell price was up 19%, the average sales price went from $11,100 in the December quarter to $13,201 in the March quarter.

Pleasingly, costs were only up about 4% over the same period, so that allowed us to expand our margins by 155% from $1,114 in December to $2,800 and 42 over the March quarter. If we could just move to slide 5.

HPAL operations at HNC. Again, we saw an increase in the sell price there, up 15% from $17,110 to $19,690 in the March quarter.

EBITDA was up, EBITDA per ton was up as well. We are seeing some cost pressures from increase in sulfur price, and the average sulfur price for the quarter was around $570 dollars dollars a ton.

In terms of sulfur supply and security, we still maintain healthy stockpiles, and at this point, there appears to be no issues with securing supply of sulfur. If we could just move to slide 6, please.

The commissioning of ENC is progressing very well. We've been pre-commissioning a number of the major assets, power, water, acid plant, counter-current decantation, thickeners, precipitation tanks, autoclave.

That's in preparation for commencing fully integrated commissioning in May, next month. Then we're targeting to achieve 100% of nameplate expected by around the end of October in 2026.

Slight delay there, but still progressing very well. Again, coming to addressing the challenges with sulfur, we have stockpiles which will last us up till the end of September, and they were acquired at an average price of $450 a ton, which is well below the market price at this point which is $900 to $1,000 a ton.

We were also pleased to announce during the quarter that Sphere completed the payment for acquisition of 10% at a $2.4 billion valuation. Sphere is one of only three accredited suppliers to SpaceX, and they're the only one with a long-term contract.

We also are about to start the process for registration with the LME for our nickel cathode. Assuming we're successful in that registration, that will see our nickel cathode hopefully commanding a premium to the LME nickel price once registered.

If we could just move to slide 7, please. Again, touching on RKAB, very pleased to announce that almost 60% increase to 14.3 million, when a number of our peers have had significant cuts.

The mine has had another strong quarter, over 3 million tons of ore was sold. Subsequent to the quarter, just recently on the 15th of April, the Indonesian government announced changes to the benchmark price or the HPM.

In terms of saprolite pricing, the HPM pricing will bring the pricing more in line with what the current market price is, and in fact, it will still remain below the market price. We don't see any real change to the saprolite pricing.

However, it will increase limonite pricing. At this point in time, and we supply to third-party HPALs, none of the HPALs in Indonesia have adopted this new pricing regime, and so we'll obviously continue to monitor that and see how it plays out.

If we could just go to the next slide, please. In terms of new projects and development of our Sampala project, we're making very good progress.

You can see that in the photograph there on the top left of the haul road. We've completed 8 kilometers of a required 24 kilometers, which you can see on the bottom there, the haul road into the IMIP.

That's progressing very well. The remaining 16 kilometers, we'd love to start building that today.

We do need to wait for the necessary permits and approvals which are in process. In terms of the ability to mine, we're also well progressed in terms of approval of feasibility studies, particularly at the ETL project.

On our Siduarsi project in Papua, we're also well advanced in gaining approval for a feasibility study. That feasibility study envisages a 2 million wet metric ton per annum DSO operation of limonite.

Obviously, given the recent changes in the pricing of nickel ore, we remain very focused on looking to develop these projects in the near term given the very attractive economics of ore sales at the moment. If we could just move to slide 9, I'll just hand over to Chris for the next two slides on cash flow and the recently announced debt refinancing.

Thanks, Justin. Morning, everybody.

As Justin mentioned, we had an extremely strong EBITDA from operations this quarter of just over $135 million. The cash flow effect of that across the RKEF business, the mining business, the HPAL business did not appear as strong with cash outflow across those three operations of approximately $10 million.

This was predominantly due to the first item being trade payables reduction of $72 million. We had quite a lot of December inventory purchases that we paid in January, and we also had some quite hefty December contractor standby costs at the mine.

When the mine was on standby, as everyone's aware, due to the RKAB issues in December, we paid that during Q1 as well. Our trade receivables increased by $38 million and that's very simply due to the increase in the NPI prices, as Justin mentioned, throughout the quarter.

The HNC EBITDA of $16 million that's removed as this is equity accounted and there's no cash inflows from HNC yet as HNC continues to focus on debt reduction, which is nearly down to zero. At Creation, our trading arm, we also brought forward the payment cycle to HNC, all shareholders brought that forward, and we received some late payments for March sales in April.

We've received some of that cash back in April. Other key cash flow items included the ENC payments, our final payment for 2% of ENC, which was $46 million US, the bank loan principal repayments, which was $25 million during the quarter, bank and bond interest of $44 million, and then we had some CapEx as well of $15 million.

That was the HNI line repairs at the HNI RKEF operations, some line repairs and some contractor setup costs at the mine at Hengjaya Mine post the standby. Can I move to the next page, please, operator, to page 10?

Okay. As we announced yesterday, we successfully refinanced our existing bank loans.

We had $398 million of bank loans outstanding. On the 28th of April, we announced US$450 million new unsecured facility.

We've removed all security from our bank loans now. That 450 comprises a 350 mil term loan and a 100 mil revolver.

We've increased our revolver from $50 million to $100 million. The financing was led by BNI, very obviously BNI have been with us since day one in our bank loans, and it also included six other banks, which was a mix of Asian and European banks.

We continue to thank all of these banks for the ongoing support that they give to Nickel Industries. We are at SOFR, which is currently around 3.6%, plus 3.5% for the first 6 months.

That's exactly the same as where we are with our existing bank loans. Then it's a leverage-linked margin.

As we reduce our margin, as our operations increase, as ENC ramps up, hopefully Hengjaya we increase that beyond the 14.3 million stage, and we bring Sampala on, we expect our leverage naturally fall, and as a result, our interest margin will fall as well. We have managed to give ourselves a 6-month amortization holiday on these new bank loans, and you can see the effect of that on the right-hand side with the charts.

It's for that reason why we're paying 3.5% for the first 6 months. Our current leverage would have us below 2.5 times, we'd be in a much lower margin.

However, we decided to pay that additional interest for the 6 months in order to give ourselves the cash flow benefit of the principal reduction as ENC ramps up. The loans have a final maturity of 30 June 2030, and we will continue with quarterly principal repayments.

You can see on the right-hand side and the bottom chart the new bank loan amortization. I think we believe that's good discipline to continue to reduce the debt in the bank loans.

Post-refinancing, we will have net debt of just under a billion dollars, US$994 million, US$800 million of the senior notes, the 144A notes, expiring in 2030, September 2030, and US$256 million of cash. We have changed the covenants.

The covenant improvement in our previous bank loans was 2.5x, net debt to EBITDA of 2.5 times. We have now increased that to a maximum of 3.5 times, which again reflects the banks' views and their credit committees' views of our strengthening business as we bring on ENC and we ramp up the mining operations.

Importantly, we have included a covenant carve-out for the Sphere loan guarantee. The credit enhancement that we gave to the Sphere lenders back at the end of January, there's a guarantee under there and under certain conditions, if Sphere was to default, Nickel Industries would be required to take on that loan.

That contingent liability obviously has covenant effects, and so for the purposes of these new bank loans, we have carved out the Sphere loan contingent guarantee for our covenant purposes. This refinancing is really I think given the company significant additional flexibility through the cash flow benefit over the next 2 to 3 years via the reduction in principal amortization and given us the ability to react or not be constrained by a 2.5 times net debt to EBITDA covenant in a very cyclical industry as we're currently seeing the nickel industry to be.

Again, we think that's a very strong result for the company, and we are thankful particularly to BNI, but to all banks, for their support. Justin?

Thanks, Chris. Look, in summary, another very productive, profitable quarter.

Just touching on Chris's comments, obviously optimizing the balance sheet holds us in very good stead given that there is some market volatility at the moment. Outside of that, our focus remains on just completion of ENC, particularly around the commissioning, and then just ensuring that we meet that ramp-up at the end of October of this year.

Given the significant increase in the value of ore resources in Indonesia, we remain extremely focused on delivery of the Sampala and the Siduarsi projects in the near term. Whilst we are experiencing some cost pressures, it should be noted that we've also seen a significant increase in the LME nickel price.

That's up from $14,892 average price for the December quarter to $17,338 for the March quarter, and current spot price is well over $19,000 a ton. Whilst we are seeing some increasing cost pressures, we are also seeing the LME nickel price rising in step with those rising cost pressures.

Given the integrated nature of our operations, that stands us in much better stead than a lot of our peers. With that, I'll hand over to questions.

Oh, I'm working for you guys now. [laughter]

Don't tell anyone.

Yeah. [laughter] Hey, [laughter] thanks for the call, guys.

Just on the cash generation, perhaps could you just dig a little bit deeper into the cash generation at the RKEFs in particular? It just seems a little odd to me that it was so low given the 86 million of EBITDA, and I think it was 3.5 million of operating cash flow at the RKEFs.

Chris, do you want to take that?

I can take that. Look, the big one in it is the reduction there in payables.

We had a significant decrease in the trade payables. We did, Richard, we took a decision in December when the mine was on standby and there was uncertainty around the RKAB, we really did build up a lot of December inventory purchases, quite a large stockpile build, and the payments for that came in Q1.

That was a very large part of it. I think that's turned out to be a very prudent decision, given where we're seeing ore prices continuing to increase.

I think buying back then was the right thing to do. We're very happy that we made that decision with Tsingshan to do so.

Okay. Would you expect that to sort of unwind or are you going to keep inventories at an elevated level or?

Oh, look, you can see that it's a very uncertain period at the moment. Ordinarily, I would say, yes, we expect it to unwind, but I think we really need to carefully monitor the market situation in response to the ore pricing formula changes.

It won't have a huge effect in the RKEF business, the saprolite, yes, I would expect it to unwind, but we just have to watch how things evolve over the next couple of months.

Yep, okay. Thanks.

Just on the sulfur issue, can you remind me just what your cost sensitivity is in the HPALs, i.e., how many tons of sulfur per ton of nickel production?

Chris, do you want to take that one or do you want me to take it?

No, that's fine. Look, I don't think we've actually given the specific tonnage and I don't think we are in a position to give that, Richard, given we're a 10% minority shareholder, when ENC is obviously not up and running yet.

We have given some information around that for every $100 increase in the sulfur price increases our operating costs by about $1,000. [cough] That's the expectation when ENC is up and running.

A $1,000 per ton of sulfur

10:1.

Yeah.

Yep, okay. Given the current situation, how are you thinking about inventory levels and when you'll need to restock?

Obviously, it's a day-by-day thing, but I suspect you don't want to run that 3 to 4 months of inventory down to zero.

Look, again, it's [laughter] not only the ore situation, which is fluid, clearly the Iran war is a fluid situation. As Justin mentioned, I think the inventory is out to August or September as it currently stands.

The sulfur was purchased at $450 a ton. Clearly, when you've got a current spot price of well over $1,000 a ton, we're well positioned.

As you said, we're not going to run it down to zero, of course, and if we have to go into the market and secure more sulfur at a later date, we'll take that decision at the time.

Thanks. Perhaps you can't answer this one, but just in terms of the broader industry, non-integrated producers must be really feeling the pinch right now of these limonite price hikes and obviously higher sulfur prices.

Is there any evidence or any comment you could make around the broader industry and what their reaction has been to A, these price hikes and the limonite price hikes, and B, the sulfur squeeze?

Justin, I'll hand that one over to you.

Thanks, Chris. Look, I think the reaction to the increase in limonite pricing has been that the broader industry hasn't adopted it, and looks like it's unwilling to adopt it.

We'll see how that plays out. We had an announcement recently of a non-integrated HPAL producer, Huafei.

They're taking this opportunity where we've got sort of high volatility, high prices in terms of ore and sulfur, to do some maintenance on their HPAL. We will see some tons coming out of the market.

There's reports of other producers, again non-integrated, potentially sort of either reducing production or taking the opportunity to do maintenance as well like Huafei. I think once again what it's highlighting is the advantage of being a fully integrated producer from mining across RKEF and HPAL projects, as well as having our own captive power.

Look, margins at this point still remain very healthy across HPAL and RKEF, and I think it really comes back to your question of we have significant stockpiles across all of our operations, which I think was the right decision to go into the market and buy before a lot of this volatility was introduced. We'll obviously continue to monitor the market in terms of the appropriate time to come in and refresh our stockpiles of ore and sulfur and other key consumables for our operations.

Okay. Great.

Thanks, Justin. Thanks, Chris.

I'll pass it on.

Thanks, Rich.

Morning, Justin, team. Just a couple questions from me.

The first one is just extension to the sulfur exposure you have. Understand you're a minority stakeholder.

I'm just keen to understand if you can provide some color. Knowing that the price going to be doubled, is there any kind of a hedging or any special price protection or cost protection mechanism in place or we should just think, once you've switched to spot market, the cost going to go up?

That's the first one. I'll circle back with the second.

Thank you.

Look, thanks, Austin. At this point, no hedging of sulfur.

I would add that and we've been very active as well in looking at alternative supply sources for sulfur, and there are a number of alternatives to the Middle East. Look, at this point, given that we have at ENC stockpiles out till almost the end of the year, we are, as you've said, continuing to monitor the situation.

Look, just depending on how things play out, we'll react accordingly.

Thanks. Second one on the new HPM regime.

You mentioned that this hasn't been implemented. Just keen to understand if you have a view on how quickly or how slowly this can be rolled out.

Also, given that Nickel Industry has a bit of exposure, how should we think about the exposure from the royalty cost perspective? Thank you.

Look,

the HPM has been implemented by the government. It's just it hasn't been adopted on the limonite pricing by current HPAL producers within Indonesia.

Based on the initial work that we've done, the net-net for our business across obviously an increasing saprolite price means better margins for our Hengjaya Mine, which we own 80% in, could potentially put pressure on margins at our RKEF business, which we also own 80% in. Look, net-net, there's not a big change.

We're just simply transferring margins from RKEF operations to mine operations, although we will lose the benefit of the tax holiday that we currently enjoy within the RKEF operations. Then on the HPAL side, as I said, at this point, the new pricing regime has not been adopted by any HPAL producers, and assuming that remains in place, they do have the buying power at the moment given that limonite is in abundance, and there's a number of producers with very limited RKABs that need to be able to sell ore.

I think that may stay in place, but again, that's obviously a very dynamic environment at the moment, not just in terms of nickel pricing, but in terms of global volatility and what's happening in the Middle East.

Thank you. Thanks for the color.

I'll pass it off.

Thanks, Austin.

Great. Thanks, Justin.

Thanks, Chris. Some really good color from both of you there on the result.

Just and apologies if I missed this, but just on the talk about sulfur and what about on the diesel front? Indonesia is reportedly close to self-sufficient, and the government does have a hand in setting pricing.

Can you just give us a bit of background on prices and availability and the outlook for diesel in Indonesia, please? Yeah.

Thanks, Dave. As you've correctly pointed out, Indonesia is self-sufficient in terms of supply of diesel, there's no supply disruptions anticipated in the pipeline.

Given that it is heavily subsidized by the government across the whole archipelago, we've seen very modest increases in diesel. I should note that in terms of our operations, our refining operations, our RKEF, our HPAL, use very little diesel.

The only real major usage is in our mining operations, and we have contract miners who obviously are responsible for sourcing fuel for their equipment. Over 30% of our fleet in terms of trucks is electric.

We haven't seen any real interruptions or any significant cost pressures from the increase in diesel prices, which has obviously impacted other operations globally.

Excellent. Good news.

Just finally on the ENC HPAL commissioning. You've given us a date of October as sort of hitting full nameplate.

Can you just give us, I guess, some background on what delays have been and how that ramp-up is looking from here? Look,

the unfortunate delay has been the fatality of contractor to FMI. That sort of set us back a couple of weeks.

Challenge being is that sort of pre that, we had somewhere sort of in the vicinity of about 3,000 contract workers on Hengjaya Mine working on the slurry pipeline, on the dry stack tailings facility, and on that transmission line. With the temporary stoppage of work and then the restart, it obviously was challenging to recruit and bring back that large number of workers, and so that's sort of what's led to the delay in commissioning.

I think, obviously testament to Tsingshan, they've still been able to start the pre-commissioning of a lot of the key pieces of equipment, and that's progressing very well. It's really now the key milestone for us is the slurry pipeline, which obviously is going to feed ore into the plant, completion of that, and that's now back on track.

Whilst we've lost a small amount of time, Tsingshan remains extremely confident of the ramp-up profile and hitting that nameplate capacity by the fourth quarter of this year. Which is, if you look at it, it's a very quick ramp-up, but they've done it before.

Yeah. The HNC is a great template,

so.

All right, thanks, Justin. Thanks, Chris.

Cheers.

Thanks, Dave.

Morning, guys. Thanks for taking my question.

Just with regards to the HPALs electing to not pay the HPM or not adopting it, are they challenging it on legal grounds or are they just literally ignoring the government regulation?

No challenge on legal grounds, simply just ignoring the government regulation. Pushing the burden back onto the mining operations in that the mine whilst they can sell at a lower than HPM price, they will still have to pay a royalty on the HPM price, and they will still have to pay tax on that deemed HPM price as well.

On mining operations, rather than being passed on to the refineries at this point, it's simply being passed back to the miners. Look, that's just on limonite.

There's saprolite, the HPM actually brings the price in line or actually it's still a little bit less, but in line with what the current market price for saprolite is. Obviously, the government receiving royalty on a $26 saprolite price when the current market price is around 40, they're losing out on the royalty on that $40.

That I think was sort of what drove the decision to revise that HPM pricing. Although I think they've probably overcooked the limonite pricing, and as I said, we'll see how that plays out over time.

Okay. The government's still getting its take on the limonite pricing.

It's just from the miners. Okay.

Correct.

Yeah. At this point in time, that change is being borne by the miners themselves.

Look, I do think the HPALs probably have some pricing power here in that mines have limited RKAB and very limited customers that they can actually sell limonite to. Okay.

Perfect. No, I appreciate the color and answering my question.

That's it for me.

Thanks, Mitch.

Hi, morning. Just one question here.

Look at your mining unit operating costs for the quarter, that's significantly higher than what it was a year ago. Were there any other reasons besides the contractor standby costs?

No, look, predominantly driven by the contractor standby costs. We have had increases in mining costs driven by obviously inflation, also increases in the diesel price.

Mostly, we've seen standby costs last quarter. We saw a small amount of standby costs this quarter related to the temporary stoppage with the incident that occurred.

Overall, costs at the mine remain pretty stable, and we don't see that changing.

Appreciate that. Thank you.

Hey, morning. Thank you for the presentation.

I think I have a couple of questions, I'll start with the first one. I think you guys mentioned on the sulfur side about the Middle East supply.

I was kind of just reading about China banning the export from May to December. Do you guys think that that will have a impact on your margins?

China's banned the export of sulfuric acid. We have our own sulfuric acid plant, we make our own sulfuric acid, we obviously buy sulfur.

The Chinese ban purely relates to the end product sulfuric acid, which we don't buy or consume. Oh,

got it. Understand.

All right, then the second thing is more of a clarification point. In your covenant carve-out for the Sphere loan guarantee, what's the carve-out like?

Because I'm assuming that this is if you guys take over the loan, then that wouldn't be included in the leverage calculation, if that's correct?

Yeah. Thanks for the question, Donavan.

The covenant we're really focused on is the net debt to EBITDA. We've got a 3.5 times net debt to EBITDA cap max, up from 2.5 times.

As it stands now, as it's a contingent obligation, it is not included in the net debt to EBITDA calculation. If Sphere defaults and it ends up that they cannot cure and Nickel Industries ends up taking over that loan, it gets put to us, then it will be included in the calculation, and we'll address that as and when we get to that situation.

One of the things we did when entering into the agreements regarding the Sphere loans and providing that credit enhancement, we started having those discussions in late 2025, and for that same reason, we started looking to refinance our bank loans in 2025 to accommodate this. We've worked with our existing bank loans over the last 5 months to give us as much flexibility regarding that Sphere loan guarantee.

Got it. Thank you.

Just one final question on my end regarding the registration of your products on the LME side. Is this basically a almost-confirmed kind of thing or?

Sorry, what was that?

Donovan's asking, is it a formality? Once we produce the cathode out of the ENC project and start to seek to qualify it with the LME, is it a formality?

Is that correct, Donavan?

Yep, that's correct.

Look, there's certainly a process. It's not a formality in terms of it's being guaranteed registration, but we're extremely confident given that we've passed a significantly extensive and exhaustive testing process from Sphere and SpaceX in terms of the quality of cathode.

It's not a formality, but we're very very confident of being able to meet the LME requirements for registration.

All right. Got it.

Thank you. That's all for me.

Thanks, Donavan.

Hi. Thanks, Justin and Chris, for the presentation.

I had a couple of questions. Firstly on the payables.

Are these payable reductions mostly to Tsingshan or are these third-party? What is generally the split there?

Sorry, Aman, it just cut out there halfway through. Regarding the payables, can you re-ask the question, please?

Sure. These payable reductions, are these to Tsingshan or are these to third parties?

What is the split there?

It's predominantly for the ore, and so there's payables not to Tsingshan per se. It's HNI, RNI, and ONI, which are purchasing ore from Hengjaya Mine, and also the majority of it is going in from the industrial parks, it's from the industrial park as opposed to Tsingshan.

I see. Is it fair to say these are mostly third parties?

Yes. Yes.

All right, okay. You said this is mostly RKEF.

Why is there substantial cash outflow from the HPAL operations?

The HPAL operations is slightly different. There's a few things that you need to look at there.

We have brought forward payments to HNC, and when I say we, all shareholders There's three shareholders of HNC, being Huayou Cobalt, C ENOC Group, and Sing- Creation, which is Nickel Industries. All of them, the payment cycle was reduced under agreement by all shareholders and the board and shareholders.

We ended up bringing forward payments. Tsingshan brought forward payments, we've had cash outflow from Nickel Industries or from Sing- Creation.

Then our Sing Creation trading division, we had March shipments of our sales where we didn't actually receive the cash until 1st of April. You'll see quite a bit of that cash come in in the next quarter.

HNC, the HPAL HNC is a 10% minority interest.

Whilst

we show the EBITDA to show an overall adjusted EBITDA number, we're currently not getting cash flows directly from being a 10% shareholder in HNC. HNC is focusing on prioritizing the reduction of debt, which we're very happy about in this environment, to be honest.

Hopefully throughout the course of this year, we'll actually see that get down to zero and commence actually getting cash dividends from HNC.

All right. You're expecting cash dividends from HNC maybe starting next year,

and

in the meantime, your trading division would still generate cash.

Exactly.

All right. Understood.

My second question was on the Weda Bay RKAB cut. For ANI, how are we sourcing feedstock there and do you expect any margin impact if there's an increase in ore prices?

Yes, Aman. Weda Bay is sourcing from third-party suppliers.

The change in the saprolite HPM actually has not had any impact on the actual market price. The HPM actually remains still below the saprolite market price.

We've been paying that market price at ANI for a number of months now, we don't expect any change in ore pricing. The only thing that will impact ore pricing is obviously changes in the LME nickel price.

All right. Also very quickly, I think your NPI grade has dropped this quarter.

Any reason for that and where do we see that trending going forward?

Look, that's just reflective of lower-grade saprolite ore going into the operations. I don't think we'll see that continuing to significantly decline.

Where we've moved in the past couple of years is we've moved from sort of an average grade of around 1.8 down to around an average grade of 1.4, 1.5. There is significant resources of 1.4 to 1.5 that remain in Indonesia.

We think we'll probably trend around these levels for a long time. Again what it highlights is just the advantage of our Hengjaya Mine and our ANN project given that they host significant high-grade saprolite resources.

Our intention is with developing the Sampala project is that we become fully self-sufficient, which means that we'll be able to supply higher-grade, if required, to our ANI operations.

Understood. Thank you.

Thanks, Aman.

Hi. Thanks for the call.

Few questions from my side. Firstly, in terms of the mining quota, what is the ideal mining quota you would require for next year assuming the ENC is operating at 100% and you have the RKEF requirements as well?

What's the ideal quota you would want?

The ideal quota would be around 12 to 14 million tons of limonite, and then if we were to maintain our current supply profile of saprolite, which is about 6 million tons, we'd be somewhere around that sort of 19 million tons, which is the number that we were targeting for this year. We weren't given that given that we obviously not going to have a full year of ENC this year.

If nothing else changes, the current RKAB that we have of 14.3 means that we're fully self-sufficient for ENC, which is key. We will be making and we're entitled to make an application for an increase in the middle of this year, which we'll be doing.

I think we'll probably be more likely to have success in increasing the RKAB at the end of the year when we resubmit for next year once we can demonstrate that ENC is ramped up and operating nameplate capacity and we can demonstrate the ore requirements there.

Sure. Then the other question is, there's been a lot of chatter about potentially export taxes on minerals.

Anything that you've heard on the nickel side? Could NPI face an export tax sometime in the future?

There has been talk. If it was applied to nickel pig iron, the majority of our nickel pig iron is consumed in-country in Tsingshan stainless steel operations.

That wouldn't be applied to ONI, HNI, RNI. If it was to apply to ANI where we do export some of that, we'd simply look, given Tsingshan's our largest shareholder, to just divert that NPI in-country.

I think we're well shielded from any potential export tax on NPI. The talk has been around potentially that tax being applied to MHP.

Again, given the integrated nature of our operations at ENC, we actually go through to nickel cathode and nickel sulfate, higher-value product, which at this point in time, the government has said they don't want to tax because they want to encourage further downstream value-adding, which is what we're doing by taking MHP through to nickel cathode and nickel sulfate.

Sure. Understood.

Then final question is on the loan covenants. A couple of points on that.

Firstly, is the loan covenant of net debt to EBITDA of 3.5 calculated based on full consolidation of ENC or is it based on a proportional 46% consolidation of ENC?

Thanks for the question, Bharat. No, it's not consolidating ENC, for the covenant purposes, clearly we are not consolidating ENC, we have no intention to consolidate ENC, it's not going to be included on a 100% basis.

There was a lot of discussion about how we would deal with it, and we've settled on rather than consolidating the full 100%, we will be proportionally taking on the 46% for the earnings there at ENC. We've got quite a bit of flexibility there, which is great.

Again, it's something which we managed to negotiate with the banks over the last 5 months, and we're very supportive for them of that. Now, having said that, Bharat, we've increased it from 2.5 times to 3.5 times, I want to make it very clear to everyone on the call, equity and debt investors, we do want to bring down our leverage to something significantly below where we're sitting just under 2.5 times at 31 December.

I'd like to see it half that level, around 1 to 1 and 1/4 times net debt to EBITDA, and I think the margin grid which we have, you can see that incentivizes us to do that.

Right. In the annual report, there was a section where you had said that for 2026, you would not be in compliance with the earlier covenants.

Just trying to understand, was that related to net debt to EBITDA or some of the other covenants in the earlier loans?

That was in the earlier loans. It didn't say we wouldn't be in compliance, there was a potential that we wouldn't at 30 June, and it was very much to do with the Sphere.

If we included the Sphere guarantee at the full $210 million loan, there was a potential, depending on how margins went through Q1 and Q2, i.e., how EBITDA was in Q1 and Q2, that we could have been in breach of our covenants at 30 June. It's a very key reason why we looked to refinance those two bank loans into a single bank loan and accommodate the Sphere guarantee so that we didn't have any issues come the middle of the year.

Right. Now based on the new covenant definition, what's the net debt to EBITDA as of let's say December or March?

As of December,

we haven't released March, obviously I'm not going to say that.

As at December, it's still 2.

it's still 2.3x.

Okay. Understood.

Thank you.

Thanks, Bharat.

Hi. Thanks for the opportunity.

Just a few questions. I think you mentioned about stockpiling for ENC till the end of the year.

I just wanted to understand what kind of working capital we expect for the ENC? Also you mentioned sulfuric acid, you've got a stockpile to September.

Is that just for the HNC or you've got a stockpile for ENC as well?

I'll take both, if you like, Justin. When we talk about our stockpiles, we're talking purely in relation to ENC.

The numbers we said earlier. HNC, again, and I know this is difficult, but as a 10% minority investor, we're limited in what we can release, and we wait for HNC to release their numbers, and then we can effectively report on those.

I can't give advanced discussions on their stockpiles. ENC, which is obviously the key one for investors, is out until the end of Q3.

The other question, working capital, yeah, there will be some working capital build obviously at ENC. That will be borne by all shareholders, and our share of that's 46%.

It clearly depends. You've got sulfur to continue.

We've bought a lot of the sulfur already, obviously,

but

there will be sulfur for Q4 that will be required. I can't tell you the size of that because I don't know the price.

Then obviously we're waiting as we've said earlier, the limonite ore price is currently very fluid on what will get paid from ENC or any of the HPALs in the market. There will be over the course of this next call it 6 months, there'll be a working capital build of the Nickel Industries' share of somewhere between $50 to probably $75 million.

$50 to $75 million. Okay.

I'm sorry, I can't be more accurate, but given what's going on with the sulfur price and the limonite ore price, it's very difficult.

Understood. Final question from me, you mentioned the cathode registration.

Can I just check how much of the ENC will be nickel cathode? Is it just for the 10% Sphere offtake or we will be producing more than the 10%?

We have the capacity to produce 40,000 tons of cathode a year.

Okay. You mentioned there will be a premium off of the LME price.

Is there an indication of how much premium of the LME price we can expect for our nickel cathode?

At this point in time, the LME-registered premium is around $200 to $300 a ton above the LME price.

All right. Thanks very much.

Thanks, Cindy.

Look, thank you everyone. I gave some closing remarks earlier, we'll end the call here.

Thank you again for attending and your questions. I think look, we look forward to focusing on delivering another strong second quarter for this year and delivery of ENC.

Thank you, everyone.