Prepared by Arlington Group Asset Management Limited

See important disclosures at end of this report

21 June 2018

Company Name

Global | Mining | TSX:NCU

More to come from NCU? NCU’s project update for Pumpkin Hollow on 19 June 2018 highlighted the company’s ongoing drilling success which, we believe, could have a significant positive impact on economics for the Pumpkin Hollow open pit (OP). The company reported that it has encountered multiple new zones of mineralisation, particularly in the northern pitwall and western part of the OP which, we believe, could result in a substantial reclassification of waste material to reserves.

With US$200m of sunk capex, fully permitted and strong management team, we believe that NCU will be the next cab off the rank in terms of copper producers, and we believe that there is significant exploration upside to expand the scope of the second stage OP project development.

First copper production in 2019 The company is still on schedule for first copper production in 2019. It has already completed shaft sinking to the 1900’ level and is in advanced development. Following its debt restructure at the start of 2018 and the backstopped equity issuance by key investor, Pala, we believe the company is set to be the next major copper producer.

Stage 2 open pit looks exciting The company has commissioned an OP optimization study and hopes to release results within the next few months. Recent results from extensional drilling to the north and west of the current pit shell suggest potential for reclassification of waste to reserves which, in our view could substantially expand the mine life.

Adding 5 years to our model We estimate that the potential for further drilling success could add enough additional material for another 5 years’ of production and we also note that the reclassification could lower the stripping ratio for the OP. Changes to our model result in a 10% increase in our risked valuation for the stock to C$1.36 from C$1.24 previously.

Strong operational leverage to copper We model NCU via a sum of the parts valuation using a 10% discount rate. We apply a 20% risk discount to the UG and 40% to the OP, and we use a fully diluted number of shares to reflect the coming equity raising. While our risked NAV at US$3.05/lb copper is C$1.36/sh, at $4/lb Cu it is C$2.33 and would be C$5.30/sh on an un-risked, in production basis.

Potential for pit extension

Source: Nevada Copper

Nevada Copper

Contact details

Matt Fernley (analyst) +44 (0)20-7389 5010 mfernley@agam.co.uk

Charlie Cannon-Brookes +44 (0)20-7389 5017 cbrookes@agam.co.uk

Simon Catt +44 (0)20-7389 5018 scatt@agam.co.uk

Richard Lockwood +44 (0)20-7389 5013 rlockwood@agam.co.uk

Source: Arlington Group, Bloomberg

Share data

Shares - m (basic/fully diluted) 445.2m / 605.5m

52-w eek high/low C$0.41 / C$0.84

Free float 27%

3M av erage daily v olume 153,700

Market capitalisation (US$m) 220

Net debt (cash) (US$m) 48

Enterprise v alue (US$m) 268

Div idend y ield 0.0%

Fair Value (C$)** 1.36

NCU valuation C$m C$/sh

PH Underground 227 0.37

PH Open Pit 555 0.92

Net cash (debt) -62 -0.10

Unpaid capital 103 0.17

NAV** 823 1.36

*Including unpaid capital

**Fully diluted, post raise

0.3

0.4

0.5

0.6

0.7

0.8

0.9

Ma

r-1

7

Ma

y-17

Jul-

17

Sep

-17

No

v-17

Jan

-18

Ma

r-1

8

Ma

y-18

Nevada Copper 21 June 2018

Arlington Group | 2

Nevada Copper financial summary Year-end 31 Dec

Valuation US$$m C$m C$/sh* Forecast assumptions 2016 2017 2018E 2019E 2020E

PH Under-ground 176 227 0.37 Copper 3.05 3.05 3.05

PH Open Pit 430 555 0.92 Gold 1300 1300 1300

Net cash (debt) -48 -62 -0.10 Silver 16.00 16.00 16.00

Unpaid capital 80 103 0.17

NAV 638 823 1.36 Production summary 2016 2017 2018E 2019E 2020E

*No. of shares reflects forecast Copper in concentrate (Mlbs) 22.1 54.4

Copper in concentrate (Ktonnes) 10.0 24.7

Asset valuation summary Gold (Koz) 2.5 9.1

Silv er (Koz) 49.7 163.5

PROFIT & LOSS (US$m) 2016 2017 2018E 2019E 2020E

Revenues - - - 68 172

Cost of sales - - - 50 110

EBITDA -4 -0 -8 28 60

D&A - - - 33 32

EBIT -4 -0 -8 -5 28

Net interest income/(ex pense) -3 0 0 1 -6

Other financials income/(ex pense) -22 -11 -11 -0 -0

Adjusted PTP* -29 -11 -19 -4 22

Tax ation - - - - -

Post-tax income -29 -11 -19 -4 22

Net income (adjusted) -29 -11 -19 -4 22

Per share data (US$)

EPS (adjusted, basic*) -0.34 -0.11 -0.07 -0.01 0.04

EPS (adjusted, diluted*) -0.33 -0.10 -0.03 -0.01 0.04

Shares outstanding (period end, basic) 88 111 445 605 605

Shares outstanding (fully diluted) 88 111 605 606 606

BALANCE SHEET (US$m) 2016 2017 2018E 2019E 2020E

Assets

Cash & equiv alents 5 1 104 43 61

Inv 'ts in Assocs/JVs - -0 -0 -33 -65

Total assets 245 245 452 460 497

Liabilities

Interest bearing debt 165 165 80 80 80

Total liabilities 168 168 83 90 100

Reserves summary Shareholders equity 76 78 369 370 396

Underground Mton Cu Cu equiv Minority interests - - - - -

Reserves Net debt 161 164 -23 38 20

Proved 8.9 1.59% 1.70%

Probable 23.7 1.17% 1.20% CASH FLOW (US$m) 2016 2017 2018E 2019E 2020E

Total 32.6 1.29% 1.38%

Open pit Mton Cu Cu equiv Total cash from operations -2 -8 -16 16 36

North Inv ts in Assocs/JVs - - - - -

Proved 122.4 0.48% 0.51% Net (acquisitions)/disposals - - - - -

Probable 178.2 0.42% 0.45% Cash from investing activities -6 -3 -103 -77 -19

Total 300.6 0.45% 0.47% Cash from financing activities 10 8 222 - -

South Net cash flow 3 -3 103 -61 17

Proved 143.1 0.33% 0.35%

Probable 95.5 0.31% 0.33% PROFITABILITY & VALUATION 2016 2017 2018E 2019E 2020E

Total 238.6 0.32% 0.34%

Total - OC EBIT margin, % NM NM NM -7% 16%

Proved 265.5 0.40% 0.42% ROIC (EBIT), % NM NM NM NM NM

Probable 273.8 0.38% 0.41% EV/EBITDA, x NM NM NM 10.8 5.0

Total 539.3 0.39% 0.41% PE (adj.), x NM NM NM NM 15.0

* ex cluding non-recurring items

Pumpkin Hollow Cu production forecasts

Source: Company data, Arlington Group estimates

PH Under-ground24%PH Open

Pit59%

Net cash (debt)-8%

Unpaid capital11%

0

50

100

150

200

2017

E

2018

E

2019

E

2020

E

2021

E

2022

E

2023

E

2024

E

2025

E

UG OP

Pay able copper Mlb pa

Nevada Copper 21 June 2018

Arlington Group | 3

Exploration upside from current drill program So far 20 drill holes have been completed from the extensional drill campaign

and management notes that “newly discovered mineralisation sits within the

existing open pit shell design and may convert areas that have been classified

as waste into ore”.

Figure 1: Plan view showing drill hole locations and expansion of mineralisation

Source: Company data

Key holes of importance:

NC18-04: Located in the Northern Extension Zone which intersected 38.2m true thickness averaging 1.11% copper indicating that the mineralised zone extends to the north. Additional offset holes are planned.

NC18-03,05: Located in the core area of the North Pit Core Zone. Successfully intersected mineralisation in several areas currently classified as waste.

NC18-07: Northern Extension Zone - intersected two new shallow mineralised zones with potential to continue to expand mineralisation to the north.

NC15-20: A hole in the western edge of the North Pit Core zone previously collared in 2015 but never drilled. Targeting areas of waste within the pit shell, it discovered new areas of shallower mineralisation suggesting open mineralisation to the west and to the south.

We believe that there is significant potential from this campaign, which is taking place in many areas which were not previously owned by the company and have only been acquired following the most recent drilling campaign. We believe that there is significant potential exploration upside from the company’s new landholding position.

Nevada Copper 21 June 2018

Arlington Group | 4

Figure 2: Plan view showing drill hole locations and expansion of mineralisation

Source: Company data

Exploration results could be value accretive The company plans another 1500m of drilling over the remainder of the year, taking total 2018 drilling to c.10,000m, with holes targeting waste within the existing pits as well as extensional drilling. Additional drilling may follow, depending on the success of the current program. We believe, based on the currently released assays, that there is significant further potential to expand both resources and reserves which could either support a longer mine life, improve the grade profile in early years of the mine, or achieve a quicker ramp up to higher production on the open pit.

Our base case is for copper in concentrate production of c.65Kton pa for 10 years, ramping up to 96Kton pa for the remainder of life of mine. A reserve increase would open the possibility of management targeting capacity expansion earlier in the mine’s life, which would certainly be value accretive

Nevada Copper 21 June 2018

Arlington Group | 5

Adding 5 years to our mine life While we are not yet ready to move the mine expansion earlier, we believe that the current drill campaign has shown enough potential to extend the mine life beyond that which we had already modelled. As a result, we have added an additional 5 years to our forecast mine life, taking total mine life to 35 years. We believe that even 35 years is likely to be conservative but await further drill data before we extend mine life further.

We also believe, based on the thick, high grades encountered in the intercepts that our previous forecast for a bleed off in head grades may have been too conservative. We have slightly tweaked our head grades for the second half of the OP project, taking average head grade in the second stage of the OP project to 0.45% from 0.40% previously.

M&A comps suggest valuation upside Reflecting the long-term fundamentals of the copper market, there has been a

fair amount of buying and selling of assets in recent months. The most recent

deal is the acquisition of BHP Billiton’s Cerro Colorado mine by EMR Capital for

c.US$270-320m depending on copper prices, announced in June.

Our analysis of recent acquisitions in the copper market shows that most

development and production assets are acquired at a multiple of 0.9x NAV.

Figure 3: Recent M&A in the copper sector

Source: Arlington Group estimates. NB For Cerro Colorado transaction EMR attributes additional value to mine life extension and improvements not accounted for in current NAV estimates

Given our unrisked valuation for NCU is US$969m or C$2.06/sh, we note very

significant potential valuation upside for the stock if a bid were to be made.

We believe that key reasons that the stock hasn’t been a target for acquisition

in the past are:

Prior to Trump regime, US perceived as a difficult location for mining

companies to do business.

OP project too expensive (in terms of capital cost) and too low returns.

However, we believe that these concerns are being addressed by the current

management team. While politically, the US is now a much more attractive

jurisdiction for mining, it is in terms of the optimisation of the asset where we

believe there has been a step change.

The old version of the OP project was for an 84Kton pa of copper in concentrate

project mining a head grade of 0.38% over 20 years with a stripping ratio of 3.7

and an upfront capex of US$962m. The optimised project is a totally different

kettle of fish. It supports a 10-year project at 65Kton pa with a head grade of

0.6% and a stripping ratio of 3.0 (on our estimates) followed by a ramp-up to

96Kton pa for an additional 25 Years, all for an up-front capex estimate of

US$536m.

Buyer Target Offer date Development stage

Price

US$m

Implied EV

US$m Consideration

P/NAV

x

EMR Capital Cerro Colorado (BHP Billiton) Jun-18 Production 230 NA Cash 3.3

Russian Copper Co. EMX Royalty Jun-18 Exploration 68 NA Shares 0.6

Mitsubishi Quellaveco (Anglo American) Jun-18 Development 600 NA Shares 0.8

Lundin Mining Nevsun May-18 Development 1324 1174 Cash & shares 0.8

OZ Minerals Avanco Resources Mar-18 Production 328 303 Cash & shares 1.0

Copper Mountain Altona Mining Jan-18 Development 67 43 Shares 0.9

Nevada Copper 21 June 2018

Arlington Group | 6

We calculate that the new optimised OP project is worth nearly 2.5x more in

NPV terms than the old project and, with new exploration upside raising the

potential for capacity or mine life increases, we believe that stock is well-placed

against other assets in the market currently.

Valuation up by 10%; further upside possible As a result of the increased mine life in our model and slightly raised head grades, our risked NAV increases to C$1.36/sh from C$1.24/sh previously, but we flag considerable upside from these levels based on the ongoing drill plan, and also if the stock were to become an M&A target.

We value NCU via a sum of the parts valuation using a 10% discount rate. We apply a 20% risk discount to the UG and 40% to the OP, and we use a fully diluted number of shares to reflect the coming equity raising.

Figure 4: Nevada Copper sum of the parts valuation

Source: Arlington Group estimates. *Fully diluted.

Please refer to our initiation report (dated 21 May 2018) for a detailed discussion of our valuation approach and sensitivities.

Sum of the Parts

Project Status

Discount

rate

NPV /

US$m

Risk

discount

NAV /

US$m

NAV /

C$m

NAV* /

C$/sh

Pumpkin Hollow UG Development 10% 220 20% 176 227 0.37

Pumpkin Hollow OP Evaluation 10% 717 40% 430 555 0.92

Total Mining Assets 606 782 1.29

Cash 47 61 0.10

Senior Debt -95 -123 -0.20

Net Cash/(Debt) -48 -62 -0.10

Unpaid capital 80 103 0.17

Sum of the Parts valuation 638 823 1.36

Nevada Copper 21 June 2018

Arlington Group | 7

Copyright and risk warnings Prices as of close on 20 June 2018

Nevada Copper Corp (“Nevada Copper” or the “Company”) is a corporate client of Arlington Group Asset Management Limited (“Arlington”). Arlington will receive compensation for providing fundraising, and other services to the Company including the publication and dissemination of marketing material from time to time.

This note reflects the objective views of Arlington. However, the Company covered in this note pays Arlington a fee, commission or other remuneration in order that this research may be made available. This note meets the requirements of an acceptable minor non-monetary benefit under COBS 2.3A.19 R (5)(b).

This note is a marketing communication and NOT independent research. As such, it has not been prepared in accordance with legal requirements designed to promote the independence of investment research and this note is NOT subject to the prohibition on dealing ahead of the dissemination of investment research.

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Under no circumstances is this note to be construed to be an offer to buy or sell or deal in any security and/or derivative instruments. It is not an initiation or an inducement to engage in investment activity under section 21 of the Financial Services and Markets Act 2000.

Note prepared in good faith and in reliance on publicly available information

Comments made in this note have been arrived at in good faith and are based, at least in part, on current public information that Arlington considers reliable, but which it does not represent to be accurate or complete, and it should not be relied on as such. The information, opinions, forecasts and estimates contained in this document are current as of the date of this document and are subject to change without prior notification. No representation or warranty either actual or implied is made as to the accuracy, precision, completeness or correctness of the statements, opinions and judgements contained in this document.

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The approved persons who produced this note may be directors, employees and/or associates of Arlington. Arlington and/or its employees and/or directors and associates may or may not hold shares, warrants, options, other derivative instruments or other financial interests in Nevada Copper and reserve the right to acquire, hold or dispose of such positions in the future and without prior notification to Nevada Copper, or any other person.

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This document is intended to be for background information purposes only and should be treated as such. This note is furnished on the basis and understanding that Arlington is under no responsibility or liability whatsoever in respect thereof, to Nevada Copper, or any other person.

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The value of any potential investment made in relation to companies mentioned in this document may rise or fall and sums realised may be less than those originally invested. Any reference to past performance should not be construed as being a guide to future performance.

Investment in small companies, and especially mineral exploration companies, carries a high degree of risk and investment in the companies or minerals mentioned in this document may be affected by related currency variations. Changes in the pricing of related currencies and or commodities mentioned in this document may have an adverse effect on the value, price or income of the investment.

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Nevada Copper 21 June 2018

Arlington Group | 8

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