Sign Up for Updates  

Cobalt 27 acquired a cobalt stream on Vale's world-class Voisey's Bay mine in Canada,‎ beginning in 2021, including the recently announced US$1.7 billion underground expansion.  Cobalt 27’s acquisition of US$300 Million Voisey’s Bay cobalt stream will result in Cobalt 27 receiving 32.6% of cobalt production from the mine, to deliver approximately 1.9 million pounds of cobalt per year to Cobalt 27, to be settled in physical delivery for the life of the mine beginning in 2021.

Voisey's Bay Map

Vale's Voisey's Bay Mine Map

Transaction Rationale – Voisey's Bay Cobalt Stream

Strengthens Portfolio with World-class, Low-cost & Long-life Asset in a Low Political-risk Jurisdiction

Adds ~0.85kt(1) (~1.9mmlb) of Attributable Cobalt Production per year

Voisey's Bay Mine Expansion is a Brownfield Project with Extensive Infrastructure in Place

Significant Investment in State-of-the-art Nickel / Cobalt Refinery at Long Harbour Processing Plant

Increases Cobalt 27's Cash Flows Starting in 2021

Adds Strong Partner in Vale

Footnotes

  1. Expected Voisey's Bay annual cobalt deliveries to Cobalt 27 after Voisey's Bay Mine Expansion fully ramped up, based on Vale management expectations.

Cobalt Stream Transaction Details

Parties

  • Cobalt 27 Capital Corp. ("Cobalt 27")
  • A subsidiary of Vale S.A. ("Vale")

Subject Asset

  • The Voisey’s Bay Mine, including from the proposed Voisey’s Bay Mine Expansion (the "VBME", and collectively, "Voisey's Bay"), located in Newfoundland & Labrador, Canada
  • Stream area includes a 2 km area of interest around Voisey's Bay so long as any such cobalt is extracted using the same underground infrastructure as the planned Reid Brook and Eastern Deeps deposits

Advance Amount

  • US$300 million (the "Advance Amount")

Metal Purchase and Sale

  • An amount of finished cobalt equal to 32.6% of all cobalt production commencing on January 1, 2021
  • Once an aggregate of ~10.8kt (23.8mmlb) have been delivered, reduces to 16.3% of cobalt production
  • 93.3% payability factor applied to cobalt contained in concentrate recovered from the stream area

Ongoing Payment

  • 18% of the cobalt reference price
  • Increased to 22% once Cobalt 27 has recovered full value of the Advance Amount through Vale's deliveries of finished cobalt
  • Cobalt reference price equal to Cobalt Metal Bulletin free market US$ per pound in warehouse price, determined by grade, as published by Metal Bulletin, or alternative price agreed upon by Vale and Cobalt 27

Delivery

  • Vale will deliver cobalt metal stored in warehouse in the form of warehouse certificates

WPM Agreement

  • Wheaton Precious Metals Corp. ("WPM") has agreed to acquire from Vale, an amount of cobalt equal to 42.4% of all cobalt production from Voisey's Bay, for an advance amount of US$390 million
  • The terms of Cobalt 27's cobalt stream and the separate WPM agreement, other than the advance amounts and the stream percentages, are substantially the same

Voisey's Bay - History

Timeline of Key Milestones

1993
Voisey's Bay discovered by Diamond Field Resources Inc.

1996
Inco Limited acquired Diamond Fields Resources Inc. and the rights to the Voisey’s Bay deposit

2005
Voisey's Bay commences production from open pit operations

2006
Vale acquired Inco Limited and ownership of Voisey's Bay

2016
Construction commenced on the VBME

2017
In August, Vale announced it would undertake a review of the VBME

2018
In June, Vale announced further details regarding the development of the VBME

 
Location

Location

Voisey's Bay - Overview

Summary

  • Newfoundland & Labrador, Canada

Mine Type & Infrastructure

  • Open pit mine, concentrator, tailings facility, diesel power generation facility, airstrip, accommodations complex, concentrate storage, fuel storage, and port facility
  • Transition to UG mining in 2021

Products

  • Copper and nickel (containing cobalt) concentrate
  • Nickel concentrate is refined at Long Harbour Processing Plant

Mine Life

  • ~17 years(1)
  • ~14 years UG estimated starting 2021(2)

3-Year Production History(3)

  2015 2016 2017
Cobalt 0.8kt
(1.9mmlb)
0.9kt
(2.0mmlb)
1.8kt
(4.0mmlb)
Nickel 53kt
(117mmlb)
49kt
(108mmlb)
52kt
(114mmlb)
Copper 32kt
(71mmlb)
32kt
(71mmlb)
34kt
(75mmlb)

Mine & Mill Site Layout

Footnotes

  1. Calculated from 2018 to expected mine life exhaustion in 2034.
  2. Calculated from 2021 (expected first full year of production at VBME) to expected mine life exhaustion in 2034.
  3. Source: Vale 2017 20-F

Long Harbour Processing Plant

Summary

Start Date

  • Long Harbour Processing Plant ("LHPP") became operational in in 2014

Production Capacity

  • 50,000 tonnes of nickel per annum

Processing Method

  • High pressure acid leaching, solvent extraction and electrowinning processes

Products

  • High purity nickel rounds, high purity cobalt rounds and copper cathode from Voisey's Bay concentrate

Status

  • In late 2017, all Voisey’s Bay nickel concentrate began shipping to LHPP

Images (click to view larger)

Long Harbour Processing Plant

Long Harbour Processing Plant

Anaktalak Bay – Voisey's Bay Port

Anaktalak Bay – Voisey's Bay Port

Voisey's Bay Mine Expansion

Overview

  • Vale estimated total expansion capital expenditures of US$1.7bn
  • Targeted first full year of production in 2021
  • Full scale production expected by 2025
  • Expected to extend mine life to 2034
  • Cobalt 27's cobalt stream includes ore from remaining open pit operations and full VBME underground operations

Projected Refined Cobalt Production

  Cobalt
  Grade Average Annual
Refined Cobalt
Production
Ovoid Open Pit(1)
2021-2022
0.08% 0.8kt
(1.8mmlb)
VBME Ramp-Up
2021-2024
0.15% 1.8kt
(4.0mmlb)
VBME Full Scale
2025-2033
0.13% 2.6kt
(5.8mmlb)

Images (click to view larger)

Planned Site Map

Planned Site Map

Resource by Deposit

Resource by Deposit

Footnotes

  1. Production from Ovoid Open Pit in 2021 and 2022 included in stream agreement.

Voisey's Bay Exploration Upside

Voisey's Bay Exploration Drilling Results

Voisey's Bay Exploration Drilling Results

Footnotes

  • Production from Ovoid Open Pit in 2021 and 2022 included in stream agreement.

Production Contribution from Cobalt Stream

Summary Voisey's Bay Mineral Reserves and Mineral Resource Estimate (100% Basis)

  Tonnes Grade (%) Contained Metal (kt) Contained Metal (mmlb)
  mt Ni Cu Co Ni Cu Co Ni Cu Co
P&P OP 8.8 2.02 1.09 0.10 177 96 9 391 211 19
UG 23.6 2.17 0.91 0.14 514 216 33 1,132 476 72
Total 32.4 2.13 0.96 0.13 691 312 42 1,523 687 91
M&I OP 10.3 0.87 0.65 0.04 89 66 4 196 145 10
UG - - - - - - - - - -
Total 10.3 0.87 0.65 0.04 89 66 4 196 145 10
Inferred OP 6.8 0.9 0.6 0.1 58 42 3 128 93 7
UG 5.9 2.1 0.8 0.1 120 49 8 265 108 18
Total 12.7 1.4 0.7 0.1 178 91 12 393 200 26

Estimated Production Contribution from Cobalt Stream

Start Date

  • First production to Cobalt 27 starting January 1st, 2021

Ramp-Up

  • Average annual cobalt stream deliveries of approximately 0.73kt(1) (~1.6mmlb) per year

Full Scale

  • Average annual cobalt stream deliveries of approximately 0.85kt (~1.9mmlb) per year

Footnotes

Note: Resources shown exclusive of reserves. Numbers may not add to due to rounding. Refer to appendix for detailed mineral reserves and resource statement.

  • Includes stream deliveries from open pit operations in 2021 and 2022.

Voisey's Bay is a World-Class Mine

Nickel C1 Cost Curve - 2017 (Wood Mackenzie)

Nickel C1 Cost Curve - 2017 (Wood Mackenzie)

Footnotes

  • Source: Wood Mackenzie 2017 Nickel Industry Normal C1 Cash Cost.

Vale is a World-Class Partner

Company Overview

  • Vale is one of the largest mining companies in the world
  • +US$75bn market capitalization
  • 70+ year mining history
  • Investment grade credit rating
  • Highly diversified, both geographically and by commodity
  • World's largest producer of nickel
  • Four principal business segments:
    • Ferrous minerals: Iron ore and manganese operations
    • Base metals: Ni, Co, Cu, PGMs & other precious metals
    • Coal: Metallurgical and thermal coal operations
    • Logistics infrastructure: Leading operator globally of railroads, ports and distribution centres

Images (click to view larger)

Geographical Footprint

Geographical Footprint

2017 Net Revenues by Segment (US$bn)

2017 Net Revenues by Segment (US$bn)

Appendix: Voisey’s Bay Reserves & Resources

Voisey's Bay Mineral Reserves and Mineral Resource Estimate (100% Basis)

  Tonnes Grade (%) Contained Metal (kt) Contained Metal (mmlb)
Proven &
Probable
  mt Ni Cu Co Ni Cu Co Ni Cu Co
Main Ovoid 5.8 2.67 1.43 0.13 154 83 8 340 182 17
Mini Ovoid 0.2 1.37 0.93 0.07 3 2 0 7 5 0
SE Extension 2.8 0.71 0.39 0.03 20 11 1 44 24 2
Reid Brook 6.1 2.10 0.87 0.14 128 53 9 282 117 19
Eastern Deeps 17.5 2.20 0.93 0.14 386 163 25 849 359 53
Total 32.4 2.13 0.96 0.13 691 312 42 1,523 687 91
  Tonnes Grade (%) Contained Metal (kt) Contained Metal (mmlb)
Measured &
Indicated
  mt Ni Cu Co Ni Cu Co Ni Cu Co
SE Extension 3.8 0.67 0.38 0.03 25 14 1 55 31 2
Discovery Hill 6.5 0.99 0.80 0.05 64 52 3 141 114 7
Total 10.3 0.87 0.65 0.04 89 66 4 196 145 10
  Tonnes Grade (%) Contained Metal (kt) Contained Metal (mmlb)
Inferred   mt Ni Cu Co Ni Cu Co Ni Cu Co
Discovery Hill 6.8 0.9 0.6 0.1 58 42 3 128 93 7
Reid Brook 5.9 2.1 0.8 0.1 120 49 8 265 108 18
Total 12.7 1.4 0.7 0.1 178 91 12 393 200 26

Scientific and Technical Information
The scientific and technical information, as well as additional material scientific and technical information with respect to Voisey’s Bay, has been prepared by Vale in its capacity as 100% owner and operator of Voisey’s Bay and the LHPP, and disclosed by Vale and is available on Vale’s filings with the U.S. Securities and Exchange Commission at https://www.sec.gov as well as on Vale’s website at http://www.vale.com/canada/. All estimates of mineral reserves and mineral resources in respect of Voisey’s Bay are based on Vale's Canadian mines operations’ use of the NI 43-101 standard of estimating and reporting. Disclosures of a scientific or technical nature have been reviewed on behalf of Cobalt 27 by Mr. Robert Osborne P.Eng., geologist and President of OLGS, an independent consultant to Cobalt 27 and a “Qualified Person” as defined by Canadian National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”). A due diligence was conducted for scientific and technical matters and a site visit was conducted by the due diligence team.

Footnotes

Note: As reported by Vale as of December 31st 2017. Resources shown exclusive of reserves. Numbers may not add to due to rounding.