Self Description of Nickel Asia Corporation – Initial Public Offer (IPO) Prospectus 2010

SUMMARY

This summary highlights information contained elsewhere in this Prospectus. This summary is qualified in its entirety by more detailed information and consolidated financial statements, including notes thereto, appearing elsewhere in this Prospectus. For a discussion of certain matters that should be considered in evaluating an investment in the Offer Shares, see “Risk Factors.” Investors are advised to read this entire Prospectus carefully, including our financial statements and related notes contained herein.

We are one of the largest global suppliers of lateritic nickel ore, and the largest nickel mining company in the Philippines, where we accounted for over one-half of the country’s nickel ore exports in 2009. We operate four lateritic nickel mines at our Rio Tuba, Taganito, Cagdianao and Taganaan sites. At each of our mines, we are able to employ a low-cost open pit mining method, without the need for explosives, chemicals or complex waste handling, to extract two types of nickel ore: limonite ore, which occurs at the upper layer of the deposit and generally consists of lower nickel and higher iron content; and saprolite ore, which is generally found beneath the limonite layer and typically consists of higher nickel and lower iron content. Since we began commercial operations in 1977 through 2009, we have delivered over 51 million WMT of saprolite ore and limonite ore to our customers. As of December 31, 2009 our mines had proved and probable saprolite ore reserves of 38.5 million WMT with an average grade of 1.86% nickel, and proved and probable limonite ore reserves (including stockpiles) of 178.4 million WMT with an average grade of 1.16% nickel, in each case as estimated in accordance with the JORC Code. We had revenues of 83,180.0 million and net income of 81,066.9 million in the six months ended June 30, 2010.

We supply different grades of saprolite ore and limonite ore to multiple customers, which use the ore to produce intermediate products for the manufacture of stainless steel and for the production of nickel cathodes. Our margins on sales of nickel ore vary depending on the type and grade of nickel ore that we sell, with high-grade saprolite ore providing higher margins than low-grade saprolite ore and limonite ore. See “Business—Production Data” and “Business—Sales and Marketing”. We sell our nickel ore to the following customers:

• PAMCO. We sell all of our high-grade saprolite ore and a portion of our low-grade saprolite ore toPacific Metals Co., Ltd. (“PAMCO”) under long-term supply agreements. PAMCO is the largest ferronickel producer in Japan. We have been selling saprolite ore to PAMCO since 1977.
• Chinese customers. We sell a portion of our low-grade saprolite and both high- and low-grade limonite ore to Chinese customers, primarily DH Kingstone, a major Chinese trading company; and Baosteel Resources Co., Ltd. (“Baosteel Resources”), a leading Chinese steel producing company. Our Chinese customers use our ore for the production of NPI, which is a substitute for traditional ferronickel products used in the production of stainless steel.
• CBNC. We sell low-grade limonite ore from our Rio Tuba mine to the adjacent Coral Bay HPAL facility under a long-term supply agreement. The facility is owned by Coral Bay Nickel Corporation (“CBNC”) which is a subsidiary of Sumitomo Metal Mining Corporation (“SMM”), a Japan-based refiner of copper, gold, nickel, and zinc. We have an effective 6% equity interest in CBNC.

Prior to 2005, we focused primarily on sales of high-grade saprolite ore and stockpiled much of the limonite ore that we removed as overburden to access the saprolite ore. However, since the commencement of NPI production in China and the completion of the Coral Bay HPAL facility in 2005, we have developed a second major revenue stream through our sales of limonite ore to Chinese customers and to CBNC. In June 2009, the Coral Bay HPAL facility’s design capacity was doubled to 20,000 tonnes of contained nickel per year, further increasing our limonite ore sales to CBNC.

To further expand our sales of limonite ore and increase our exposure to downstream nickel processing, we have partnered with SMM and Mitsui & Co., Ltd. (“Mitsui”) and have commenced construction of a new HPAL facility adjacent to our Taganito mine. The new HPAL facility, with an estimated total cost of US$1.42 billion which includes capital expenditures of US$1.3 billion for the plant, working capital, and interest accrued during the construction phase, is scheduled to commence commercial operations at full capacity in August 2013. The facility is expected to produce approximately 30,000 tonnes of contained nickel in 2014, the first full year of commercial operations at full capacity and will employ the same technology as the Coral Bay HPAL facility. We have a 22.5% equity interest in the owner of the new HPAL facility, Taganito HPAL Nickel, and will supply the facility with limonite ore and limestone from our stockpiles and mining operations at our Taganito mine site. We expect to nearly double our aggregate sales of limonite ore when this new HPAL facility is operating at full capacity.

In addition, because of the increasing scarcity of mineral resources containing high-grade saprolite ore in the Asia-Pacific region, regional demand for low-grade saprolite ore has been growing over the past several years. As a result, since 2008, we have been selling increasing quantities of low-grade saprolite ore to both PAMCO and Chinese customers, which has increased the contribution of low-grade saprolite ore sales to our revenues.

We delivered 880.3 thousand WMT of saprolite ore in 2009 to PAMCO and generated revenues from these deliveries of 81,455.9 million, and we delivered 2.5 million WMT of limonite ore to CBNC and generated revenues from these deliveries of 8913.5 million, including cobalt credits of 848.2 million. Both these products are priced on a percentage of payable nickel in the ore using LME prices for agreed quotational periods. See “Business—Sales and Marketing”. We delivered 3.1 million WMT of saprolite ore and limonite ore to Chinese customers in 2009 based on negotiated prices on a per wet tonne basis, and generated revenues of 81,862 million from such sales. We also generated revenues of 8444.9 million in 2009 from sales of limestone and contractual services to CBNC. The global financial crisis that persisted into 2009 severely affected demand for metals and resulted in lower commodity prices, in turn affecting our sales of nickel ore and revenues. We experienced a substantial increase in sales volumes and revenues in the first half of 2010. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations”.

The following table sets forth a summary description of our operating mines. See “Business—Description of our mines”.

KEY STRENGTHS

We believe that our key strengths include the following:

• Largest nickel mining company in the Philippines and among the largest producers of lateritic nickel ore globally—We are the largest nickel mining company in the Philippines, accounting for over one-half of the country’s nickel ore exports in 2009. We are also among the largest producers of lateritic nickel ore globally. CRU Strategies, a management consulting company specializing in the international metals, mining and electricity industries, estimates that we ranked sixth globally in 2009 in terms of contained nickel in our shipments of nickel ore, and also estimates that our shipments to China and Japan in 2009 amounted to 18.4% and 24.5%, respectively, of their total imports of nickel ore. We sold 6.5 million WMT of saprolite ore and limonite ore in 2009, from which we generated revenues of 84,333.2 million, although demand for nickel ore and prices were depressed during that year due to the global financial crisis. Our sales and revenues in the first half of 2010 were considerably higher when compared to the same period in the prior year. We have a long history of mining lateritic nickel ore and of acquiring, developing and operating multi-mine facilities. Our first mine, Rio Tuba, commenced commercial operations in 1977. We have expanded since then and currently operate four mines. In addition, we have seven exploration properties that we believe are strong prospects for both saprolite ore and limonite ore. Our seven exploration properties are located at Bulanjao, Manicani, Kepha, Ludgoron, La Salle, Libjo and South Dinagat. Partial drilling in some of these properties has already been carried out and mineral resources have been identified.
• Substantial nickel reserves and resources with a strong portfolio of exploration properties—As of December 31, 2009, our mines had measured and indicated saprolite mineral resources of 44.6 million WMT with an average grade of 1.98% nickel, including proved and probable reserves of 38.5 million WMT with an average grade of 1.86% nickel. Measured and indicated limonite mineral resources totaled 195.3 million WMT with an average grade of 1.16% nickel, including proved and probable reserves of 178.4 million WMT with an average grade of 1.16% nickel. Our proved and probable reserves at Rio Tuba include 22.9 million WMT of stockpiled limonite ore and are sufficient to supply the Coral Bay HPAL facility for 18 years at its full production capacity. Our proved and probable reserves of limonite ore at Taganito, including 17.5 million WMT of stockpiled limonite ore, are sufficient to supply the Taganito HPAL facility for 24 years at its intended full operating capacity. Our reserve and resource figures are estimated in accordance with the JORC Code. See “Business—Ore reserves and mineral resources”.
• Increasing exposure to downstream nickel processing—We hold an effective 6% equity interest in CBNC, the owner of the Coral Bay HPAL facility, which is majority owned by SMM. We supply all of the limonite ore required for the facility from our Rio Tuba mine. Unlike HPAL plants in some other countries, which have faced operational difficulties, the Coral Bay HPAL facility was completed in mid-2005 on schedule and budget and has been able to achieve high levels of capacity utilization. See “The Nickel Mining Industry—Overview—Hydrometallurgical technologies for laterite ores—HPAL.” Due to its successful operation, the facility’s initial capacity of 10,000 tonnes per year of contained nickel was expanded to 20,000 tonnes per year in mid-2009. We intend to replicate this success by again partnering with SMM and Mitsui, and have commenced construction of a new HPAL facility adjacent to our Taganito mine. The new HPAL facility, with an estimated total cost of US$1.42 billion which includes capital expenditures of US$1.3 billion for the plant, working capital, and interest accrued during the construction phase, is scheduled to commence commercial operations at full capacity in August 2013. The facility is expected to produce approximately 30,000 tonnes of contained nickel in 2014, the first full year of commercial operations at full capacity and employ the same technology as the Coral Bay HPAL facility. The operation of the facility should not only provide an additional dedicated customer for limonite ore from our Taganito mine, but, through our 22.5% equity interest, allow us to benefit from the higher percentage of payable nickel available further downstream in the nickel value chain.
• Profitability underpinned by low cost production—The foundation of our business is our ability to operate profitably through the commodity price cycle because of our low costs. We rank favorably in terms of mining costs when compared to other nickel mining companies.[1] There are a number of factors that account for our low cost position.

1. We benefit from favorable geologic conditions at all of our four mines. Our lateritic nickel deposits are near-surface, blanket-like layered deposits with minimal overburden and generally five to 30 meters thick, enabling us to conduct simple open-pit mining using trucks and loaders without blasting, the use of chemicals or complex waste handling.
2. Historically, there was generally no market for our limonite ore, which needs to first be extracted in order to mine the more valuable saprolite ore. There was also no market for lower grades of saprolite ore. Limonite ore was then regarded as overburden and placed in stockpiles, while we undertook selective mining of high-grade saprolite ore, leading to relatively high mining costs. Since 2005, we have found customers for our limonite ore with the development of the China NPI market and the commissioning of the Coral Bay HPAL facility. Since 2008, we have also experienced increasing demand from our customers for our low-grade saprolite ore. Our ability to sell limonite ore rather than place it in stockpiles as waste, and our ability to sell lower grades of saprolite ore allows us to mine in a more efficient manner and reduces the unit cost per WMT of nickel ore that we mine, thus improving our profitability. The anticipated commencement of commercial operations of the Taganito HPAL facility in 2013 is expected to add an additional outlet for our limonite ore.
3. On average, the nickel deposits at our four operating mines are located within three to seven  kilometers from the applicable tidewater loading area, enabling easy hauling and transportation by barges and LCTs to our customers’ ships. We own ten barges and seven LCTs and lease additional barges and LCTs as needed. The short hauling distance from our mining operations to our loading facilities substantially contributes to our favorable cost position.
4. Because our lateritic nickel deposits are near surface and relatively shallow, the rehabilitation of our mining areas is a straightforward process. The process generally involves re-contouring of the mined areas, replacing the overburden and planting foliage. We undertake progressive rehabilitation of our mined areas in order to spread costs, and the nature of our deposits results in a relatively manageable level of rehabilitation costs.

• Close proximity to our strong customer base—We enjoy a geographic advantage to competing nickel ore exporters in Indonesia and New Caledonia, as the Philippines is located closer to key customers in Japan and China. As a result, it costs customers less to ship our products to their facilities than it does to ship the products of our competitors in those countries. From 2007 through 2009 the average freight advantage of shipping nickel ore to China from the Philippines instead of from Indonesia ranged from US$2/WMT to US$4/WMT, and the average freight advantage of shipping nickel ore to Japan from the Philippines instead of from Indonesia ranged from US$5/WMT to US$10/WMT.[2] 
• Strategic relationships with our shareholders—We have strategic relationships with two of our shareholders, SMM and PAMCO, who are also our major customers.

1. SMM is a 26% indirect shareholder in our company. We supply all of the limonite ore required by the Coral Bay HPAL facility from our Rio Tuba mine. The facility is 54% owned by SMM and uses SMM’s proprietary HPAL technology. Our strong relationship with SMM and the success of the Coral Bay HPAL facility has led to a new partnership with SMM to construct a new HPAL plant, to which we will supply limonite ore from our Taganito mine. SMM is one of the largest mineral resource companies in Japan with significant investments in smelters and refineries (coppergold, zinc-lead and nickel) and in a number of copper, gold and nickel mines around the world. It was the 7th largest global producer of finished nickel in 2009. Its expertise in HPAL technology has been proven with the successful operation of the Coral Bay HPAL facility.
2. PAMCO is a 1.49% shareholder in our company and also owns 36% of our subsidiary, RTN, and 33.5% of our subsidiary, TMC. PAMCO is the largest ferronickel producer in Japan and the third largest globally in terms of contained nickel production in 2009.[3] PAMCO has been purchasing our saprolite ore for over 30 years. Currently it purchases all of our high-grade and a portion of our low-grade saprolite ore under long-term supply contracts with our subsidiaries that operate our Taganito, Rio Tuba and Cagdianao mines. Under the terms of these contracts, PAMCO is obligated to purchase 1,000,000 WMT plus or minus 10% of saprolite ore on an annual basis.

• Expanding relationships in China—We began selling nickel ore to the China market in 2005, making us the first Philippine nickel mining company to respond to China’s demand for nickel ore for use in NPI production. We made our entry to the China market by selling to a number of trading companies and have subsequently rationalized our selling efforts, concentrating on developing strong relationships with key Chinese customers using our in-house marketing team. We have an expanding relationship with Baosteel Resources, who purchases our limonite ore and low-grade saprolite ore and has signaled its intent to purchase higher quantities, and more types, of nickel ore from us in the future. Baosteel Resources is the fifth largest stainless steel producer in the world in terms of slab smelting capacity and the second largest NPI producer in China in terms of NPI capacity in 2009.[4] We also sell substantial quantities of limonite ore and low-grade saprolite ore to DH Kingstone, a major Chinese trading company. During 2009 and the first six months of 2010, we sold more than 400,000 WMT and almost 1,000,000 WMT of nickel ore, respectively, to DH Kingstone. We believe that our Chinese customers particularly value us as a supplier because of our reliability and expertise, backed by considerable years of continuous operations, which enables us to meet their ore grade requirements in a timely manner.
• Experienced management and technical team—As a result of our long operating history, we have developed a management and technical team with many years of experience in every aspect of our operations. Experienced mining engineers, geologists and key mechanics are available in the Philippines given the long history of mining in the country. From time to time we have integrated individuals into our team, who possess such skills and have been exposed to other types of mining operations. As an example of this, two of our resident mine managers, Jose Anievas, Resident Mine Manager at Taganito and Ferdinand Agustin, Resident Mine Manager at Cagdianao, have had previous exposure managing more complex gold and copper operations. Their prior experience greatly contributes to our team and is shared in monthly operational meetings of key operating staff from all the mines, at which best practices and operational issues are discussed. Our long operating history has also given us the knowledge and experience to deal with local government units and the communities in which we operate. Each of our mines has an established Community Relations and Development team that coordinates our community development efforts and seeks to ensure that we maintain good relationships with our host communities and local government units.
• Exemplary environmental, health and safety record—We strive to be a leading performer among our peers with regard to environmental protection and rehabilitation and community economic development and we are committed to comprehensive safety practices to protect the health and wellbeing of our workforce. Our performance in these fields has been recognized during the National Mine Safety and Environment Conference, a yearly event where awards are given for exemplary performance. The annual awards was established under a Presidential Executive Order issued in 1997, pursuant to which all mines and exploration companies must undergo an evaluation process by a selection committee headed by the Secretary of the Department of Environment and Natural Resources (“DENR”). In 2008, our Taganito mine won the Presidential Mineral Industry Environmental Award, the highest award given for exemplary performance in environment, health and safety, while our Cagdianao mine won the Platinum award, the second highest award. In 2009, while no mining company received the highest award, both our Taganito and Cagdianao mines received the Platinum award and our Rio Tuba mine received the Titanium award, the third highest category. Also in 2009, our Taganito mine received the Safest Mine Award and our Cagdianao mine was a runner-up for such award. See “Business—Corporate Social Responsibility” and “Business—Safety and Health”.

STRATEGY

Our strategy is designed to maximize the profitability of our existing base of operations while driving growth through our involvement in downstream processing, continuing exploration of our portfolio of properties, acquiring new properties and expanding our customer base. The key elements of our strategy are to:

• Develop Taganito HPAL—Together with our partners, SMM and Mitsui, we have commenced construction of a new HPAL facility adjacent to our Taganito mine. The new HPAL facility, with an estimated total cost of US$1.42 billion which includes capital expenditures of US$1.3 billion for the plant, working capital, and interest accrued during the construction phase, is scheduled to commence commercial operations at full capacity in August 2013. The facility is expected to produce approximately 30,000 tonnes of contained nickel in 2014, the first full year of commercial operations at full capacity. The facility will use third-generation HPAL technology and will benefitfrom SMM’s expertise in HPAL operations, which is evidenced by the continued successful operation and recent expansion of the Coral Bay HPAL facility. We have a 22.5% direct stake in this venture. Our Taganito mine is expected to supply all of the facility’s required limonite over the estimated 30-year life of the facility through a combination of its proved and probable limonite reserves and stockpiles, which will provide us with substantial value over an extended period of time with respect to our low-grade limonite ore that would otherwise be stockpiled as waste, and an expected increase in limonite reserves due to further drilling and the delineation of new reserves at our Kepha, Ludgoron and La Salle exploration properties, each of which is adjacent to the Taganito mine. TMC is also expected to supply the required limestone for the plant.
• Pursue our brownfield and greenfield exploration programs to upgrade our existing resources, and develop new reserves and resources—We have an extensive exploration program involving both brownfield exploration, which consists of work at our existing operations to extend resources and to upgrade resources to reserves; and greenfield exploration, which involves exploring and delineating nickel lateritic deposits in our existing exploration properties. See “Business—Exploration and Development”. We own approximately 100 man-portable drilling rigs that are suitable for drilling lateritic deposits in an economic manner. Currently, we are deploying approximately 50% of these rigs at our mine sites for exploration, infill and production drilling. We believe that RTN’s Mt. Bulanjao property in particular has substantial potential and we intend to conduct step-out and in-fill drilling at this site to fully delineate the lateritic deposits once we have obtained the applicable permit. Partial drilling and mining has already taken place at this property, as well as at the Manicani property where social preparation is currently being done prior to further drilling.
• Acquire new properties or enter into operating agreements or joint ventures—We believe that there is significant exploration potential in the Philippines for lateritic nickel deposits and we intend to seek opportunities to increase our reserves of saprolite and limonite ore. Most prospective areas in the country are already subject to registered mineral claims, so we intend to access new exploration properties by acquiring rights from, or entering into joint ventures with, the applicable claim owners. In so doing, we will carefully evaluate such properties to ensure that the terms we enter into will be commensurate with the potential of the properties we seek to acquire.
• Strengthen our customer base in China—Our mines contain quantities of low-grade saprolite ore and limonite ore that are not suitable for shipment to PAMCO or for use at the Coral Bay HPAL facility. We have been successful in selling a variety of these nickel ore materials principally to the China market for use in the production of NPI using blast or electric arc furnaces. We have rationalized our selling efforts to China and intend to continue strengthening our customer base with the objective of improving prices and reducing the volatility in the volume of such nickel ore materials that we sell to the China market.
• Diversify to gold and copper—The Philippines is well-endowed not only with lateritic nickel but also with gold and copper. World-class deposits have been discovered and substantial quantities of these metals have been mined in the past. We believe that the exploration potential nevertheless remains significant. In order to take advantage of this potential, we recently entered into an agreement to purchase CEXCI from a subsidiary of Anglo American plc. CEXCI has four groups of mineral claims in northern Luzon that are prospective for gold and copper mineralization. Two of these four claims are located at Mankayan and the remaining two claims are located at Manmanok and Kutop. Substantial exploration work has been done at the Manmanok property, where four drilling targets for both epithermal gold and porphyry-style copper-gold mineralization have been identified. We intend to drill these targets as soon as is commercially practicable. We believe that our extensive local knowledge, the experience of a number of our managers and technical staff in these metals and the quality of these properties make this acquisition an important step in our strategy to evolve into a diversified mining group. See “Business—Exploration and Development—Gold and Copper Resources”.

Blantyre