Nicolet(US:NIC)2025-07-30 02:02Financial Data and Key Metrics Changes - The company reported an adjusted EBITDA of USD 86 million for the June quarter, bringing the first half unaudited adjusted EBITDA to USD 183.6 million, which is a material outperformance compared to the previous year [4][17] - The twelve-month rolling Total Recordable Injury Frequency Rate (TRIFR) was 1.29, with a Lost Time Injury Frequency Rate (LTIFR) of 0.05 for June, indicating strong safety performance [2][3] Business Line Data and Key Metrics Changes - RKF nickel metal production was 30,463 tonnes, slightly lower than the previous quarter, impacted by kiln realignment and maintenance [4][7] - HPAL production from HNC was 2,075 tonnes of nickel, continuing to operate above nameplate capacity [4] - The Hangjai mine achieved record ore sales of over 3 million wet metric tonnes, with an EBITDA of USD 41.4 million, a 33% increase from the previous quarter [6][12] Market Data and Key Metrics Changes - MHP pricing remained stable at USD 11,449, slightly higher than the previous quarter, with payabilities for MHP close to 90% [9][10] - The EBITDA margin for HNC remained strong at USD 6,219 per tonne, with an increase in EBITDA per tonne margins from USD 4,297 to USD 4,819 [10] Company Strategy and Development Direction - The company is focusing on the completion of the E and C project, with the integrated nickel refinery for cathode expected to commence commissioning after aligning working capital requirements [11][17] - The feasibility study to increase the Anglia mine RKB from 9 million tonnes to 19 million tonnes has been approved, with optimism for receiving environmental impact study approval in August [13] - The Sampala project is progressing well, with a feasibility study lodged for an initial operation of 6 million wet metric tonnes per annum [14][15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about achieving RKAB approval in August and expects to ramp up production from the Hangjai mine significantly in the second half of the year [40] - The company is actively managing working capital and exploring various financing sources to support operations, given the tight cash flow situation [33][34] Other Important Information - The company is targeting completion of the first 8 kilometers of the haul road for the Sampala project by early Q4, with first ore delivery expected in the second half of next year [44][45] - Current margins from the Sampala project are projected to be significant, with an exploration target of over 1 billion wet metric tonnes of ore [16] Q&A Session Summary Question: Cash flow neutrality despite good EBITDA - Management explained that the neutral cash flow was primarily due to a significant working capital build, particularly in RKF operations, which is expected to unwind [20][21] Question: MHP realizations increase - Management noted market tightness contributing to improved MHP payabilities, offsetting a decrease in LME prices [22][23] Question: Delaying commissioning of E and C - Management confirmed that delaying commissioning was a strategic decision to save on working capital, particularly for limonite inventory build [29][30] Question: Debt service requirements - Management outlined that USD 33 million in interest amortization was paid in July, with an additional USD 100 million due in Q4 across bank loans and bonds [32][33] Question: Production ramp-up from Hangjai mine - Management remains optimistic about receiving the RCAB permit in August and plans to ramp up production significantly for the remainder of the year [40]