Emerging Global Nickel Producer with Lowest Cost Processing

Direct Nickel Limited March 2012 abr

Mambare 2011/12 program discovers high-grade nickel

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● 20km north of KokodaDistrict, Oro Province● ~ 100km2 target 20 km long, 5-7km widemax. elevation 1200m● Exploration licence area EL1390 ~242km2

Kododa township

EL 1390

Mambare Plateau: In 1999 AnancondaNickel Limited identified ~5Mt contained Ni in limonite alone

Mambare 2011/12 program discovers high grade nickel

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Mambare 2011 program discovers high-grade nickelArea 1:MAM-KK-0051 – 19.40m from 10.00m at 1.7% Ni 0.06% Co, including 5.80m at 2.82% Ni 0.12% Co from 13.35m, with a peak Ni value of 1m at 3.28% Ni 0.12% Co from 15.95m

Area 2:MAM-KK-0077A – 31.15m from 10.00m at 1.12% Ni 0.06% Co, including 6.9m @1.74% Ni0.05% Co from 28.10m, including 2.30m at 2.10% Ni 0.07% Co from 28.10mMAM-KK-0018 – 22.87m at 1.42% Ni 0.06% Co from 7.73m, including 9.33m at 2.04% Ni 0.05% Co from 16.02m

Area 3:MAM-KK-0026 – 35.60m at 0.99% Ni 0.09% Co from 1.3mMAM-KK-0080 – 22.69m at 1.38% Ni 0.06% Co from 11.61m, including 5.05m at 2.23% Ni 0.04% Co from 24.55m

N I C K E L

Mambare Nickel Project PNG (50% JV, DNi operator)

Mambare

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• One of the world’s great deposits, Anaconda Nickel Limited estimated 5 Mt of contained nickel metal

• 1 Mt of nickel metal has an in-ground value of ~US$20 billion

• Jan 2012 JV partner Regency Mines plcannouncement of high-grade saprolite discovery

• 735 holes drilled, current 135 hole drill program completed, maiden JORC resource Q1/12

• Transport - 120km flat and mostly sealed road to Oro Bay deep water port – a rare advantage

60m wharf, water depth 10.1m, can take 40,000dwt, 180m Handymax class ships

Limonite –iron rich layer

Saprolite –magnesium rich layer

WeatheredSource rock

Breakaway exposure of full laterite profile at the Pequizeiro deposit, Araguaia Brazil

Nickel ore zone

What are nickel laterites?

• Formed by weathering of a relatively common rock type

• Abundant• Iron and magnesium-rich layers

straddled by the nickel ore zone• Flat-lying, layered deposits amenable

to low cost mining and rehabilitation• Easy to discover and drill out• Soft ore with low grinding cost• Prolific in SE Asia

Laterites – the future supply in nickel

• These 10 countries hold 89% of world laterite nickel• The highest typical grades are in Indonesia and PNG• Australia and South East Asia offer the best potential

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Recovers much more nickel from the same deposit…

• One flowsheet for the entire laterite ore profile

• Atmospheric pressure, tank leach, 304 stainless plant construction

• Recovers 90-95% of nickel in 1 - 4 hours residence time

• Much lower technical intensity than HPAL and smelting

• Recycles reagent (+95%), environmentally friendly tailings and low emissions

• Fully scalable and profitable from 5,000tpa nickel size (under $200m capex)

• Produces Mixed Hydroxide Product MHP (40% nickel)

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An elegant and robust flowsheet

• Uses nitric instead of sulphuric acid

• Patents and comprehensive IP protection

• Acid consumption of 20-30kg per tonne of ore vs. 500-1,000 kg per tonne using sulphuric

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MHP containsNi 40 - 45 %Co 2 – 4 %

Fe2O3 Mag Oxide

High value nickel product: Mixed hydroxide product (MHP)

MHP is a marketable product, also haematite iron and mag oxide co-products. Nickel metal can also be produced

100 years of stainless steel – mankind’s favourite alloy

New Delhi bus shelter5% goes into sinksWhitegoods

Industrial

Food areasBuilding cladding

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• Nitric acid is a very effective reagent for digesting ore but its neutral products readily become benign

• Recycling the reagent removes the need to dispose of spent, single-use sulphur chemicals to landfill

• Less waste of inputs generated in high opex processes• Residual nitrates can fertilise plant growth during

rehabilitation• Direct Nickel process tailings contain low level nitrates that

go on to to rejoin the nitrogen cycle• During a lightning flash temperatures reach 30,000°C

reacting nitrogen and oxygen to make dilute nitric acid

Nitrogen compounds are a building block of life

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Direct Nickel tailings are growing peas in these trials

DNi Tailings neutralisedwith DNi mag oxide

100% mulch50% mulch50% tailings 100% tailings

Capex

$25

US$ per pound of annual capacity

$12.50 DNi

$35

Opex

$1.83/lb DNi

All DNi costs independently produced by Aker Solutions (now Jacobs Engineering). Note comparisons show DNi Process to MHP paying at ~75% of LME. Excludes mining costs.

$8.00/lb other processes

$35+ Others

The breakthrough in capital and operating costs

Direct Nickel Process test plant at CSIRO Perth WA

Direct Nickel is an emerging producer:Our strategy is to• Run Perth test plant with 150 tonne ore bulk samples• Accumulate nickel resources in the ground• Only licensing nickel laterites projects where DNi has a share• Build the JORC resource at Mambare JV (50%)• Build a major nickel producer

Dual growth ‘turbines’ to build valuation1. Accumulating nickel inventory by farm-in and outright acquisition2. Major revaluation of the Direct Nickel Process by achieving global

acceptance of the Direct Nickel Process

Resources + Process = Production

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Quality partnerships & further CSIRO equity investment

• 2005 Direct Nickel Pty Ltd founded • 2007 Teck & Oz Minerals invest• 2009 positive Aker Solutions PFS2 • 2010 CSIRO 1st equity investment • 2010 successful commercial scale

recycle trial in Charlotte NC• 2010 JV with Regency Mines (50/50) in

Mambare Nickel Project • 2012 High grade results from Mambare• 2012 Jan Construction of Perth Test

Plant• 2012 Feb CSIRO decides to invest a

further $2.3m in equity• Commitment to RTO and ASX listing

(The Commonwealth Scientific and Industrial Research Organisation is globally recognised as Australia’s pre-eminent commercial science body and is technical partner to Direct Nickel)

The DNi Management Team – experienced in innovation

Julian Malnic – Executive ChairmanProfessional geologist and experienced company builder who founded Nautilus Minerals Inc. (A$450m market cap, TSX-V & AIM listed ). Chairman of the Sydney Mining Club.

Russell Debney – CEOHas worked in resources since 1975 as a commercial & corporate lawyer in the resources space. In 1997 Russell joined Julian in building Nautilus Minerals Inc. and remains a director

Graham Brock – CTO & Project ManagerA metallurgist with over 40 yrs. experience and a track record of managing large scale nickel projects and processes. Graham is also a Fellow of the Australian Institute of Mining & Metallurgy

Richard Carlton – COORichard is an experienced professional mining engineer who has operated an array of complex mining projects. Richard also has strengths in community liaison and is a Fellow of the Australian Institute of Mining and Metallurgy

Ian Bain – Corporate Development HeadFormerly Global Head of Mining and Metals Corporate Finance for ABN AMRO Bank NV. 30 years experience with strengths in corporate & banking sectors in mining, metals, oil & gas

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Projected Nickel Production Projected Revenue & Income

Based on long term nickel price of US$8.0 / lb

Multi-billion dollar growth path

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Direct Nickel - well-developed and market ready

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Growing nickel resources• Mambare, PNG • Indonesia PT DNi• More

Proven people• Continuing track

record in major value creation

Powerful new process• Exclusive process

ownership• Test plant ready

Momentum

Direct Nickel Limited

Julian MalnicExecutive Chairman

Russell DebneyCEO

Emerging Global Nickel Producer withLowest Cost Processing

Graham BrockProject Manager