Kingsrose Mining Secures Backing from BHP for Nickel-Copper Exploration in Finland and Norway

• Kingsrose Mining has formed an innovative exploration alliance with BHP to explore nickel and copper in Finland and Norway
• BHP will sole fund up to $30M (USD) over 4 years on regional exploration with Kingsrose as an operator, then can earn up to 75% in selected projects
• Kingsrose retains majority ownership if BHP earns less than 75% and can advance projects BHP doesn't select
• Kingsrose has high-grade PGE and nickel projects in Finland (Penikat) and Norway (Råna) it is also advancing
• Kingsrose is positioned as an exploration business with a portfolio of quality critical mineral projects and a multi-faceted team

Kingsrose Mining's Exploration Alliance with BHP

ASX-listed explorer Kingsrose Mining (ASX:KRM) has captured investor attention by announcing an innovative exploration alliance with global mining giant BHP. The deal provides significant funding for Kingsrose to explore nickel and copper in highly prospective regions of Finland and Norway, while giving BHP exposure to potential major discoveries.

Unique Partnership Structure

The Kingsrose-BHP exploration alliance adopts a unique three-phase structure designed to align the interests of both parties:

1. Project Generation Phase (up to 4 years): BHP will solely fund $7.5M AUD per year (up to $30M total) for Kingsrose to undertake regional exploration in designated alliance areas. BHP gains exclusive rights to explore but no equity unless it designates targets to advance.
2. Earn-in Phase: It can earn a 75% stake by sole funding an additional $36M USD. There is a 51% step at $6M USD spend, but if BHP doesn't reach 75%, its interest reverts to 49%.
3. JV Phase: Kingsrose retains operatorship and majority ownership in any JV unless BHP earns 75%. Standard JV dilution provisions apply.

As Kingsrose MD Fabian Baker explains,

"What we have is every single year, a commitment to spend a significant amount of money on the project. BHP has the benefit of exclusive rights to explore that area. And if they find a tier-one, world-class asset, they can take that all the way to earning 75%...anything short of that, Kingsrose will retain a majority ownership position in the project and be able to continue moving it forward to create value."

This structure provides Kingsrose with substantial funding for systematic regional exploration while avoiding dilution unless major projects are defined. The deal strongly endorses Kingsrose's concepts and operational capabilities.

Interview with Fabian Baker, MD of Kingsrose Mining Ltd.

Aligned with BHP's Exploration Strategy

The exploration alliance evolved from Kingsrose's participation in BHP's innovative "Xplor" accelerator program launched last year. BHP recognized a gap in the junior exploration sector in delivering new large-scale discoveries of strategic battery metals like nickel and copper.

The Xplor program sought to combine the advantages of agile, technically driven juniors with the funding and expertise of a major. Kingsrose was one of just seven juniors globally selected from hundreds of applicants.

Baker sees the new alliance as "a new precedent for what a junior-major partnership can look like to ensure that it works for both parties." The deal structure overcomes many drawbacks of typical junior-major joint ventures, which can leave projects stalled or juniors diluted.

Building a Sustainable Exploration Business

Kingsrose's exploration strategy in Scandinavia originated from a rare opportunity for a junior - a $30M AUD cash injection from selling a gold mine. This allowed Kingsrose to systematically assess opportunities globally and hone in on the outstanding potential for large critical mineral deposits in Scandinavia.

As Baker states, "We had the opportunity to turn that around and say, 'Where should we be looking? What should we be looking for?' and go about that more systematically. The origins of Kingsrose's new discovery strategy were a really nice fit with what BHP was looking for."

This approach has allowed Kingsrose to assemble a portfolio of quality assets, led by the Penikat PGE project in Finland and the Råna nickel project in Norway. Both provide near-term discovery potential while the BHP alliance explores new large-scale nickel and copper opportunities along strike.

At Penikat, a 25km outcropping zone of high-grade PGE mineralization has been defined, with similarities to other major deposits in the region. However, systematic exploration has been limited with mineralization open. Kingsrose sees multi-million-ounce potential and is finalizing drilling permits after completing environmental surveys.

The Råna nickel project in Norway encompasses a formerly producing high-grade mine with limited historic exploration. Kingsrose is earning up to an 80% interest and has hit massive sulfides in initial drilling stepping out from the mine, including 9.3 metres at 1.0 % nickel, 0.3 % copper, and 0.10 % cobalt. A 1.6km zone of outcropping sulfides and untested EM conductors highlights the opportunity.

Kingsrose Mining offers an attractive and unique exposure to the high-growth critical minerals sector through a portfolio of highly prospective assets in Scandinavia. BHP's exploration funding and endorsement significantly de-risk the investment case while maintaining considerable discovery upside. Led by a proven team taking a long-term approach, Kingsrose is well-placed to deliver strong shareholder returns as it builds a leading battery metals exploration business in Europe.

Kingsrose is building an integrated exploration business focused on critical minerals in Scandinavia. With a strong treasury, multi-asset portfolio and backing of a major like BHP, it offers investors leveraged exposure to near-term discovery and long-term potential for major new nickel and copper districts.

Investment Thesis for Kingsrose Mining

• BHP exploration alliance provides up to $30M USD of sole funding for nickel-copper exploration in Finland and Norway with no dilution
• Unique deal structure allows Kingsrose to retain a majority in projects BHP doesn't earn a 75% stake in, overcoming issues with typical JV models
• Exposure to district-scale nickel-copper exploration potential in two key critical mineral belts of Finland and Norway
• Two near-term discovery opportunities in 100%-owned Penikat PGE (Finland) and Råna nickel-copper (Norway earning up to 80%) projects
• Strategic, high-grade critical mineral assets well placed to benefit from growing demand and limited supply in Europe
• Proven management team with strong financial backing and support of the world's largest miner, BHP
• Attractive entry point after recent de-risking events with strong news flow expected from alliance and core projects

Actionable Advice

• Investors should consider taking a position in KRM ahead of initial results from regional exploration under the BHP alliance and upcoming drilling at the Råna and Penikat projects in the coming months
• The BHP deal and permitting progress at Penikat has significantly de-risked the story with considerable further upside potential, making the current valuation highly attractive
• Allocate a slightly higher risk weighting than a typical junior due to the earlier stage of the BHP alliance areas, mitigated by 100% carried cost and advanced projects in the portfolio
• Maintain a long-term perspective with Kingsrose as key catalysts like major drill results or a large-scale discovery under the alliance could drive rapid re-rating

Macro Thematic Analysis

The global transition to electric vehicles and renewable energy drives unprecedented demand for battery metals like nickel, copper and PGEs. Europe is at the forefront of this transition, targeting 30 million EVs on the road by 2030 and net zero emissions by 2050. However, Europe currently produces just 5% of the raw materials needed in Li-ion batteries and highly relies on imports from high-risk jurisdictions.

Developing a secure, local supply of critical minerals is a key priority for European governments and automakers. Hard rock deposits in stable Nordic countries like Finland and Norway are highly strategic, with mineral endowment, existing infrastructure and mining expertise. Projects with scale, grade and proximity to industrial hubs will attract significant premiums.

As Kingsrose MD Fabian Baker highlights,

"If you look at the exploration target that we've calculated [for Penikat], it's got multi-million-ounce potential...PGEs are, in the EU's view, one of the most critical minerals from the point of view of supply because most of the world's supply comes from Russia and South Africa, which are both experiencing significant issues and declining grades and lower productivity."

Juniors which can consolidate key mineral belts and apply modern exploration techniques offer outstanding potential for discovery. Majors like BHP recognise this opportunity, as evidenced by the innovative funding and partnership deal with Kingsrose. Kingsrose provides investors with highly leveraged exposure to the battery metals super-cycle through its assets in the emerging Nordic critical minerals province.