Atlantic Nickel ("Atlantic Nickel" or the "Company") and Appian Capital 
Advisory LLP ("Appian") are pleased to announce record operating and financial 
performance in 2021 at the Company's Santa Rita nickel sulphide mine ("Santa 
Rita" or the "Mine") located in Bahia, Brazil.
 
Santa Rita is one of the very few long-life nickel sulphide mines in operation 
globally, boasting 34 years of mine life producing between 20-35 ktpa NiEq 
contained in concentrate. Based on an NI 43-101 technical report completed in 
2021, the operation mines an 8-year open pit with an NPV8 of US$570m, then 
transitions to 27-years of underground sublevel caving operations with an NPV8 
of US$812m. Capital expenditure over the first 5 years of the underground is 
US$332m and expected to be fully funded out of operating cash flow.

Appian also owns Mineracao Vale Verde ("MVV") and its Serrote copper gold mine 
in Alagoas, Brazil ("Serrote"), which completed construction ahead of schedule 
and under budget and achieved first production in 2021. The MVV operational 
update will be covered in a separate release.
 
Atlantic Nickel 2021 performance highlights

- Best in class safety performance with an LTIFR of 0.20 over the last 12 months
- Atlantic Nickel posted US$127m of EBITDA on US$289m of revenue
- Santa Rita produced 107kdmt of nickel concentrate containing 14.5kt of 
nickel, 4.7kt of copper and 266t of cobalt and gold, platinum and palladium 
by-products
- First quartile C1 cost performance of US$3.45/lb Ni with an AISC of 
US$5.11/lb Ni
- All third-party debt has now been repaid in full, leaving the Company with a 
clean balance sheet and well positioned for growth

Safety and the environment

Santa Rita continues to operate as one of the safest operations globally with a 
Lost Time Injury Frequency Rate ("LTIFR") of 0.20 achieved over the last 12 
months [1]. The Company's Visible Felt Leadership ("VFL") program resulted in 
over ~2,900 incident prevention safety measures, helping to convey safety as a 
top priority of Atlantic Nickel's management. Over 130,000 man-hours of safety, 
health and environmental training were conducted in 2021 which have contributed 
to the strong safety culture and awareness on site at Santa Rita.
 
To date, the operation has successfully managed the challenges caused by 
COVID-19. 100% of Atlantic Nickel site employees have received both first and 
second doses of COVID-19 vaccinations, and distribution of booster shots has 
begun. Preventative measures including workforce testing, training, tracing 
systems, continuous communication systems and contingency planning continue to 
be in effect as well. As a result, active cases at site are low and the 
resiliency of the business remains high. 

From an environmental standpoint, Santa Rita maintains its position as a top 
decile nickel producer in terms of minimizing its carbon footprint. With 85% of 
Brazil's power generation from renewable or carbon neutral sources, the 
operation is projected to produce just 32.5ktpa of Scope 1 carbon emissions and 
5.4ktpa of Scope 2 carbon emissions over the open pit life of mine, resulting 
in a CO2 intensity of 1.77/t NiEq. Efforts to conserve the Atlantic Forest 
local biome have progressed over 2021 as the operation revegetated 66 hectares 
of land with 48,872 seedlings.

Operational update

Following the ramp-up of operations over 2020, Santa Rita achieved strong 
operational performance in 2021, its first full year of production:
- 6,307 kt of ore was mined from the open pit along with 17,150 kt of waste 
resulting in a strip ratio of 2.72x
- 6,133 kt of ore was fed to the mill at average feed grades of 0.31% NiS and 
0.10% Cu
- 107 kdmt of concentrate was produced at average concentrate grades of 13.6% 
Ni and 4.4% Cu with cobalt, gold, palladium and platinum by-products

The first quartile C1 cost performance of US$3.45/lb Ni, net of by-product 
credits is driven by:
- Mining costs of US$2.57/t mined
- Processing costs of US$5.18/t processed
- Site general and administrative costs of US$1.57/t processed
- Downstream charges and transportation costs of US$1.71/lb payable Ni
- By-product credits of US$1.99/lb payable Ni

All-in sustaining cost performance of US$5.11/lb Ni, net of by-product credits 
is also driven by:
- Corporate general and administrative costs of US$1.12/t processed
- Royalties of US$0.52/lb payable Ni
- Sustaining capital expenditure of US$0.88/lb payable Ni

Geotechnical update

On November 9, a crack propagated across a portion of the pit wall in the 
vicinity of phase 5. The resulting geotechnical instability was localized in 
scope and directly affected <1% of the pit's total surface area. These types of 
events occur in the normal course of mining operations and can be adequately 
managed. As a precaution, mining was suspended in the affected area and 
constant 24/7 radar monitoring established. No safety related incidents 
occurred related to the event or otherwise.  

Overall impact to mining activity was limited. By November 13th, daily material 
mined exceeded pre-event levels. For further context, an average of 1,946 kt of 
material was mined per month from January to October of 2021. In comparison, 
1,985 kt and 2,003 kt of material was mined in November and December, 
respectively.

The stability of both the affected area as well as the design of a pushback to 
remediate it has since been evaluated by third-party geotechnical experts. The 
pushback mines 4.7 Mt of waste material, 2.6 Mt of which falls outside of the 
final design pit limit. Aside from impacts to the mine schedule, which is 
normally reviewed on an annual basis, the 2.6 Mt of waste will add to the total 
material to be mined during the remaining open pit mine life. Prior to the 
event, over 140 Mt of open pit material remained to be mined, and so the 
additional material equates to a less than 2% increase. With the underground 
extension, the increase is less than 1% of total material mined. There is no 
expected impact from the event on the life of mine open pit Reserve.
Mining of the pushback commenced in December and is expected to complete in 
early H2 2022.

Financial update 

Over 2021, 11 shipments of concentrate were made to the Company’s offtake 
partners resulting in revenue of US$289m with average realized commodity prices 
of US$8.75/lb Ni and US$4.31/lb Cu. EBITDA and capital expenditure for the 
period was US$127m and US$27m, respectively.

As a result of its operational and financial performance, the Company's 
financial position is now the strongest it's ever been. The Company ended the 
year with cash on balance sheet of US$50m and has since fully repaid the loan 
from Bradesco, becoming debt free. 

Plans for 2022

In 2022, the operation is expected to maintain its current production levels, 
processing 6.4 Mtpa of ore and producing c.19 kt NiEq contained in concentrate. 
Atlantic Nickel will continue the development of the underground expansion at 
Santa Rita, with activities that include:
- Step out and infill drilling of the underground Resource 
- Additional geotechnical drilling and studies for sublevel caving
- Additional metallurgical drilling and testwork 
- Completion of various trade-off studies
- Delivery of a Prefeasibility Study in H1 2023

Additionally, the Company aims to advance its regional exploration with its 
primary focus being the drill out and declaration of a resource at Palestina, 
the most advanced open pit exploration target. Palestina sits approximately 25 
km from Santa Rita with easy access to Santa Rita's existing processing 
infrastructure. 

Paulo Castellari, CEO of Appian Capital Brazil commented:
"2021 was an outstanding year for our operations at Santa Rita. I am truly 
impressed with the efforts of our employees and local communities and their 
ability to navigate another difficult year fraught with COVID-related 
challenges. 

"Atlantic Nickel has achieved record revenue and EBITDA, first quartile C1 cost 
performance and now boasts its most resilient balance sheet ever, all while 
maintaining a best-in-class safety track record with an LTIFR of 0.20. These 
strong foundations position us to take advantage of the high growth potential 
at Santa Rita and in the region, expanding upon what is already one of the 
largest nickel sulphide operations in the world.

"We have more to improve upon and accomplish in 2022, and I have every 
confidence in our team's ability to deliver another record year."

About Appian 
Appian Capital Advisory LLP is the investment advisor to long-term value 
focused private equity funds that invest solely in mining and mining related 
companies.

Appian is a leading investment advisor in the metals and mining industry, with 
global experience across South America, North America, Australia and Africa and 
a successful track record of supporting companies to achieve their development 
targets, with a global operating portfolio overseeing nearly 5,000 employees.
Appian has a global team of 54 experienced professionals with offices in 
London, Toronto, Lima, Belo Horizonte, Montreal and Sydney.

For more information, please visit www.appiancapitaladvisory.com, or find us on 
LinkedIn or Instagram

About Atlantic Nickel 

Atlantic Nickel is the owner and operator of Santa Rita, an open-pit 
nickel-copper-cobalt sulphide operation located in Bahia, Brazil. Santa Rita is 
an operating open pit mine that is planning to transition to underground mining 
to extend its mine life to 34 years. The mine benefits from US$1bn of prior 
investment and has a plant capacity of 6.5 Mtpa. One of the largest open pit 
nickel sulphide mines in the world, Santa Rita is a high-quality asset 
operating at a first quartile cost position. It is one of a few remaining 
nickel sulphide mines globally that can offer additional supply towards the 
production of Class I nickel products and so has exposure to the high-growth 
potential of the electric vehicle industry.

[1] The industry average LTIFR was 1.53 in 2020, as reported by Global Data


Dual Source: Atlantic Nickel and Appian Capital Advisory LLP