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Mr. Mike Welch - Northern Lights

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Mining : Major Developments,<br />

Exploration and Existing Opportunities<br />

for Regional Involvement<br />

<strong>Mike</strong> <strong>Welch</strong><br />

Xstrata Nickel Raglan Mine<br />

February 2, 2012


Disclaimer<br />

The views expressed in this presentation contain information obtained<br />

from publicly available sources that have not been independently<br />

verified. Xstrata Nickel makes no representations, or express or implied<br />

warranty as to the accuracy, completeness or reliability of the<br />

information, nor can accept any liability for it. All forward looking<br />

information has been prepared on the basis of a number of assumptions<br />

that may prove to be incorrect. This presentation and its contents<br />

should not be relied upon as a recommendation or forecast by Xstrata<br />

Nickel or advice of any sort. Nothing in this presentation should be<br />

construed as either an offer to sell or a solicitation of an offer to buy or<br />

sell shares in Xstrata plc or its subsidiary or associate companies in any<br />

other jurisdiction in which they are registered and/or operate.<br />

2


Xstrata plc<br />

Xstrata Nickel<br />

Raglan Mine<br />

3


Xstrata Nickel<br />

Raglan<br />

4


Raglan Mine<br />

5


Nickel in Society<br />

Around 40 years ago<br />

with carbon steel<br />

Over 50 years ago with nickel<br />

containing stainless steel<br />

Source: Nickel, Vol. 15-4, June 2000, Nickel Institute 7


Nickel in Society<br />

8<br />

Images : Nickel Institute


Raglan Exploration<br />

Reserves and Resources<br />

N<br />

Katinniq<br />

Qakimajurq<br />

Kikialik<br />

Mine 2<br />

Mine 3<br />

Katinniq Mill<br />

and Concentrator<br />

Donaldson Project<br />

And Airport<br />

Cross Lake<br />

70 kilometres<br />

ACTIVE MINES<br />

MINES IN DEVELOPMENT<br />

KNOWN RESOURCES<br />

Prod 1997-2011<br />

= 12.8Mt @ 2.8 Ni<br />

Disc 1997-2011<br />

= 27.4Mt @ 3.0 Ni<br />

Disc 2006-2011<br />

= 13.6Mt @ 3.2 Ni<br />

Drilling 2006-2011<br />

= 412 km<br />

9


Raglan Exploration<br />

History and Discovery Toolbox<br />

•! Geological Mapping and<br />

Prospecting<br />

•! Regional geology 1898 Dr. Albert<br />

Peter Low (GSC)<br />

•! Prospecting 1931 Cyril Knight Co.<br />

•! Discovery of Katinniq July 10, 1956<br />

Harold Kenty<br />

•! Start of mining 1997 Xstrata<br />

•! Airborne Survey, Magnetic<br />

and Electromagnetic<br />

•! ATEM and VTEM (46,000 km of<br />

survey)<br />

10


Raglan Exploration<br />

History and Discovery Toolbox (continued)<br />

•! Ground Survey, Magnetic<br />

and Electromagnetic<br />

•!<br />

Crone ltd, SQUID (1,000 km)<br />

•! Bore Hole Electromagnetic<br />

survey 2006-2011<br />

•!<br />

Crone ltd, Pulse EM (1,000 holes)<br />

•! Diamond Drilling<br />

2006-2011<br />

•!<br />

Bradley Nuvumiut Partnership<br />

(412 km)<br />

11


Raglan Exploration<br />

Mine 2 – Integrated Geosciences Discovery<br />

2010-2011<br />

Success for the 40kt Project<br />

Production 2014<br />

12


Major Investment<br />

In August 2011, Xstrata plc approved the<br />

investment of $530 million USD to begin<br />

developing new projects at the Raglan<br />

Mine.<br />

Toward the<br />

40kt<br />

project<br />

13


Success in Exploration and<br />

World-class Projects<br />

Qakimajurq<br />

•! Mine Life: 2023<br />

•! 350 kt per annum<br />

•! 2.5 million tonnes<br />

@ 4.5% Ni<br />

Mine 2 (Lower)<br />

•!Mine Life: 2018<br />

•!300 kt per annum<br />

•!1.5 million tonnes<br />

@ 3.5% Ni<br />

14


New Opportunities<br />

Current Production<br />

•!1.3 million tonnes<br />

•!26 kt of nickel-inconcentrate<br />

New Production in 2016<br />

•!1.3 million tonnes<br />

•!40 kt of nickel-inconcentrate<br />

15


Regional Involvement in<br />

Nunavik<br />

According to the Raglan<br />

Agreement (1995)<br />

•! Makivik Corporation<br />

•! Landholding<br />

•! Salluit<br />

•! Kangiqsujuaq<br />

$ 100M since 2004<br />

Profit Sharing ($)<br />

2004 0.3M<br />

2005 9.4M<br />

2006 16.7M<br />

2007 32.6M<br />

2008 6.8M<br />

2009 7.7M<br />

2010 15.2M<br />

16


Raglan Mine’s Challenges<br />

Workforce<br />

•! Inuit employee training<br />

•! Skills development<br />

Opportunities with Plan Nord<br />

Plan Nord’s desire to address the<br />

shortage of manpower through training<br />

is an obvious opportunity for the<br />

Raglan Mine<br />

17


Raglan Mine’s Challenges<br />

(continued)<br />

Energy Costs & Greenhouse<br />

Gas Emissions<br />

•!Power: 20 MW<br />

•!Diesel: 50 000 000 l/year<br />

•!Energy Costs: $0.32/KWh<br />

Opportunities with Plan Nord<br />

Access to a reliable and renewable<br />

energy at a competitive price,<br />

enabling to stay robust through the<br />

mining cycle and on a long-term basis<br />

18


Nakurmik<br />

Thank you<br />

Merci<br />

19

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