Ann: ENC Project Update, page-6

The market has yet to fully price in the ENC value to NIC.
In the article titled "Nickel Industries making money in weak market" in mining.com in February, (Quote):
the CEO Justin Werner said NIC was competitive due to lucrative tax incentives from the Indonesian government and the support of Shanghai Decent.“Our Chinese partner offers us a unique set of guarantees that you don’t get anywhere else. We have a nameplate guarantee. We have a capex guarantee, so we’re immune from capex blowouts, which are pretty common [elsewhere],” he said.
“There’s really been a significant cost reset,” he said. “You have HPALs producing nickel at A$5,000-A$7,000 per tonne, so even at a A$15,000/t price, there’s still very good margins for the HPAL producers.”
“For us, this is an exciting year, because we have ENC commissioning, which allows us to produce nickel cathode, nickel and cobalt sulphate and mixed hydroxide precipitate, and for all of those currently, the margins are very strong,” he said.
NIC’s 10% interest in the HNC HPAL project generated $14.7 million in EBITDA for the quarter, setting a positive precedent for ENC, which is expected to come online in the second half of the year.

In addition to the ENC, there is the value of the Sampala project.

Next development secured

In September 2024, NIC acquired three mining licenses that made up the Sampala project for $63.2 million, most of which is payable next year.

Sampala, located 36.9km from NIC’s RKEF and HPAL operations at IMIP, has an exploration target of 350-700Mt at 0.9-1.1% nickel, in addition to its 187Mt resource.

“A billion tonnes at 1% is close to 10Mt of contained nickel metal, which is two times the global nickel market consumption, so it’s huge,” Werner said. “Applying our margins for 2024, which was about $12 a tonne, if you apply that to a billion tonnes, you can start to see the value of the Sampala project.”

NIC has submitted a mine plan and feasibility study for government approval, with an environmental study to follow. Capital costs are estimated at $50 million, and development of a haul road has begun.

“I’m pushing the team for first production by the end of this year, but realistically, it might be early 2026,” Werner said.

Slowly but surely Mr Market is re-rating the true value of NIC shares.