Corporate Presentation September, 2018

Transcription

1 Corporate Presentation September, 2018

2 CAUTIONARY STATEMENT All information included in this presentation, including any information as to the Company s future financial or operating performance, and other statements that express management s expectations or estimates of future performance, other than statements of historical fact, constitute forward looking information or forward-looking statements and are based on expectations, estimates, and projections as of the date of this presentation. For example, forward-looking statements contained in this presentation are found under, but are not limited to being included under, the headings Josemaria PFS Underway, Anticipate re-rating as Project Advances, Nacimientos Project, next Steps, Catalysts and all Resource and PEA tables. For a full list of cautionary language related to the Project Constellation PEA please also refer to the Project Constellation Report. Forward-looking statements are made to provide information about management s current expectations and plans. Forward-looking statements are generally identifiable by, but are not limited to, the use of the words may, will, should, continue, expect, anticipate, estimate, believe, targeting, intend, plan, guidance, outlook, potential, strategy or project Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Reliance on such forward-looking statements involves risks, uncertainties and other factors that may cause the actual financial results, performance or achievements of NGEx to be materially different from those expressed or implied by those forward-looking statements, and the forward-looking statements are not guarantees of future performance. These risks, uncertainties and other factors include, but are not limited to, exploration and development risks, metal price risk, the strength of the financial markets, the market price of NGEx shares, the ability to obtain financing, the risks inherent in foreign operations and the risk of inadequate infrastructure, currency risks, environmental and socio-political risks, title risk to property, the dependence on key personnel, risks inherent in mineral resource estimation and exposure to uninsurable risks. Certain data in this presentation was obtained from various external data sources, and the Company has not verified such data with independent sources. Accordingly, no representation or warranty, express orimplied, is made and no reliance should be placed, onthe fairness, accuracy, correctness, completeness orreliability of that data. For a more comprehensive discussion of the risks faced by the Company, and which may cause its actual financial results, performance or achievements to be materially different from those expressed or implied by forward-looking information or forward-looking statements, please refer to the Company s latest Annual Information Form, filed with Canadian securities regulatory authorities at The risks described in the Annual Information Form are hereby incorporated by reference into this presentation. The Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise except as required by applicable law. Project Constellation PEA Disclosure Notes The reader is advised that the PEA study results in this presentation are only intended to provide an initial, high-level summary of the project. The PEA is preliminary in nature and includes the use of inferred mineral resources which are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves and there is no certainty that PEA results will be realized. Mineral resources are not mineral reserves and do not have demonstrated economic viability Mineral Resource Disclosure Notes This presentation includes written disclosure of Mineral Resources for the Los Helados and Josemaria Deposits. These notes are an integral part of this disclosure and should be read in conjunction with every written disclosure of the Mineral Resources in this presentation. To put the summary resource information included in this presentation into its complete context the reader should review the entire relevant Technical Report for each project. This document may use the terms Measured, Indicated, and Inferred Resources as these terms are defined under Canada s NI U.S. investors are advised that, while such terms are recognized and required by Canadian regulations, the U.S. Securities and Exchange Commission does not recognize them. Readers are cautioned that Mineral Resources do not have demonstrated economic viability and are further cautioned not to assume that all or any part of Measured or Indicated Resources will ever be converted into Mineral Reserves. Los Helados/Josemaria and Project Constellation Technical Report dated February 22, 2016 and titled Project Constellation incorporating the Los Helados Deposit, Chile and the Josemaria Deposit, Argentina NI Technical Report on Preliminary Economic Assessment with an effective date of February 12, 2016 the Project Constellation Report The Project Constellation Report is available for review under the Company s profile on SEDAR ( and on the Company s website ( The Los Helados resource estimate has an effective date of September 19, The Josemaria resource estimate has an effective date of August 7, Qualified Persons The disclosure of scientific and technical information regarding the Company s properties in this presentation was prepared by or reviewed by: Bob Carmichael, P. Eng., the Company s Vice President, Exploration, and James Beck P.Eng., the Company s Vice President, Corporate Development and Projects, who are Qualified Persons in accordance with the requirements 2 of NI

3 INTRODUCTION COPPER-GOLD FOCUSED EXPLORER-DEVELOPER Project Location Santiago (Los Helados & Josemaria) Key Financial Data As of June 30, 2018 Head Office: Vancouver, BC Ticker: TSX: NGQ NASDAQ OMX: NGQ Share price CAD $1.01/sh 52 Week High/Low CAD: $1.49/$0.91 Shares Outstanding; F/D: 228 Msh ; 234 Msh Market cap: CAD 230M Cash balance: ~CAD $6M Analyst Coverage Shareholders Paradigm Pareto Securities David Davidson Jack Garman BOARD AND MANAGEMENT 2.0% LUNDIN FAMILY 27% Echelon Wealth Partners Ryan Walker INSTITUTIONAL & RETAIL 71% Source: Bloomberg 3

4 FOCUSED ON CREATING VALUE FROM EXPLORATION Lundin Group Explorer- Incubator focused on copper-gold in Chile and Argentina. TSX:NGQ MKT CAP ~$230M Own one of the largest and best junior held copper-gold projects in the world Well positioned for the next bull market in copper Strong record of value creation Filo Mining spinout created >$200M of value for shareholders Organized for serial success. Small, focused team with decades of experience in the region. Nacimientos 4

5 RECENT HIGHLIGHTS 1 Year Completed Objectives Acquisition of 40% interest in Josemaria. Now hold 100%, PFS expected Q Added 3B lb Cu; 3 moz Au; 14moz Ag to NGQ account for initial US$3M Closed oversubscribed $12.5M financing Assembled new district scale land packages in Argentina to build on South America s best grass roots discovery record Constellation Indicated 25 B lb Cu; 17.5 Moz Au; 127 Moz Ag Constellation Inferred 7.8 B lb Cu; 4.7Moz Au; 46 Moz Ag Filo del Sol, Indicated 2.8 B lb Cu; 4 Moz Au; 110 Moz Ag CAD/sh Year Timeline & Significant Events Acquisition of the remaining 40% of Josemaría for an initial consideration of USD 3m. Total USD 21m in staged payments Low-cost desktop optimization of Project Constellation and acquisition of exploration projects in Argentina $12.5M Financing 3/31/17 4/30/17 5/31/17 6/30/17 7/31/17 8/31/17 9/30/17 10/31/17 11/30/17 12/31/17 1/31/18 2/28/18 3/31/18 5

6 STRONG DISCOVERY RECORD 3 MAJOR GRASSROOTS DISCOVERIES Los Helados PEA Stage 18 B lbs Cu; 10 Moz Au (Indicated) Josemaría PEA Stage (PFS Underway) 7.4 B lbs Cu; 7.4 M oz Au (Indicated) FOCUS Spun out 2016 Mkt Cap $165M Filo del Sol PEA Stage (PFS Underway) 3.1 B lbs Cu; 4.4 M oz Au; 147 M oz Ag (Indicated) See Constellation Report for Josemaria and Los Helados resource details. Filo Mining 08 August 2018 News Release 6

7 JOSEMARIA PFS UNDERWAY TOP PRIORITY STRONG PROJECT WITH A LOT OF OPTIONALITY AND FLEXIBILITY 100% owned Straightforward open pit operation with a low strip ratio; shallow high-grade Simple metallurgy - clean concentrate Opportunities to improve on PEA design Capex can be optimized and refined More compact site layout Chile power? Smaller closer tailings facility Nearby water source Good permitting regime; no local population Plan: Complete a PFS, Q then; start permitting, apply for water license, etc. First 5 years; 185,000 tpy Cu 345,000 opy Au; 1.2M opy Ag See Constellation Report for PEA details 7

8 ANTICIPATE RE-RATING AS PROJECT ADVANCES Recent transactions like Quellaveco and Nevsun P/NAV

9 LOS HELADOS - OPTIONALITY BIG RESOURCE-HIGH GRADE CORE- EXPLORATION UPSIDE-NEAR INFRASTRUCTURE 0.3% CuEq Grade shell 0.82% CuEq (0.7% CuEq cutoff) East 1,000m CuEq 0.84% CuEq High grade edge holes open at depth North 9

10 JUNIOR HELD COPPER PROJECTS THERE ARE NOT THAT MANY! Pebble Casino Ann Mason KSM Morrison Harper Creek Pumpkin Hollow Gunnison Northmet King King Canariaco Norte Cotabambas Mina Justa Kamoa-Kakula Tampakan Constellation Productora 10

11 Andina Division Escondida El Teniente Collahuasi Olympic Dam Chuquicamata Grasberg KGHM Polska Miedz Pebble Pampa Escondida Los Pelambres Taimyr Peninsula Radomiro Tomic Buenavista Los Bronces Baimskaya Udokanskoe Resolution Oyu Tolgoi Reko Diq Kamoa La Granja Central Region Antamina Quebrada Blanca Toqui Cluster Toquepala Los Sulfatos Konkola Morenci Cobre Panama Cerro Verde El Pachon Salvador Tampakan Project Constellation Kamoto JV Project Corridor Mina Ministro Hales Quellaveco Taca Taca Frieda River Centinela Sulfide Las Bambas Spence KSM Cerro Colorado Oroyek Aynak La Caridad Twin Metals El Abra Copper - Contained Tonnes ONE OF THREE TOP 50 RESOURCES HELD BY A JUNIOR 118,900,000 69,600,000 World's 50 Largest Copper Resources 40,000,000 35,000,000 30,000,000 25,000,000 NGEX 20,000,000 15,000,000 10,000,000 5,000,000 0 SOURCE: SNL Metals & Mining, Company Reports Andina Operating Division - Held by major or state owned company Udokanskoe Undeveloped - Held by major or state owned company Kamoa Undeveloped - Controlled by a junior company (i.e. available for acquisition) Project Project Constellation - NGEx 11

12 COMPARISON WITH OTHER CHILE DEPOSITS COMPETITIVE TONNES AND GRADES Ministro Hales El Morro Candelaria CuEq% El Soldado Cerro Colorado Mantoverde Centinela Oxide Mantos Blancos LH+JM 0.6% CuEq Cutoff Zaldivar Josemaria Spence Cerro Casale Constellation Los Centinela Sulfide NuevaUnion Los Pelambres LH+JM Radomiro Tomic Sierra Gorda Helados Carmen de Quebrada BlancaEl Abra Andacollo Gabriela Mistral Relincho Caserones Antucoya Lomas Bayas 0.3% CuEq Cutoff ,000 1,500 2,000 2,500 3,000 3,500 Source: SNL Database Measured and Indicated Resources plus Reserves. CuEq % = Cu % * Au gpt (US$2.20/lb Cu; US$1350/oz. Au) Millions of Tonnes 12

13 BUSINESS MODEL SOUTH AMERICA FOCUSED EXPLORER/DEVELOPER Find a good project Make it better Monetize Do it again 13

14 IN LUNDIN GROUP S SWEET SPOT THE BIGGEST RETURNS HAVE BEEN FROM EXPLORATION/DEVELOPMENT PLAYS 14

15 NEW PROJECTS GET SOUTH AMERICA S BEST GENERATIVE TEAM BACK TO GENERATING Strong local team Targeting projects that can be quickly moved to resource/ study stage Add value through exploration and engineering Lundin Group backing enables us to look at bigger deals 15

16 NACIMIENTOS GOLD AND COPPER PROSPECT 20KM EAST OF BARRICK S ALTURAS PROJECT; +7 MOZ (10 Moz) Carmen 16

17 NACIMIENTOS PROJECT HIGH POTENTIAL UNEXPLORED COPPER GOLD SYSTEM Large scale system with both porphyry copper-gold and epithermal gold targets Good location in a possible extension of the Veladero - El Indio gold belt. Easy access and proximity to paved roads sped up targeting work Three scout holes drilled at end of season to test geological model. Model confirmed; more drilling planned 2019 Gold target Copper-Gold target Copper-gold target 17

18 NEXT STEPS TWO TRACK APPROACH Advanced Projects Exploration Fast track a simpler open pit project at Josemaría Targeting PFS by Q Then start process for permitting; water rights etc Maintain optionality of Los Helados Continue to pursue regional synergies Acquired 2 district scale copper-gold projects in Argentina Fast tracked one to scout drilling phase in Q Encouraging results to date Evaluating other opportunities 18

19 CATALYSTS Josemaría PFS - Q Josemaría water drilling- Q1 Initiate Josemaría permits - H1? Acquire additional exploration projects - ongoing 19

20 APPENDIX 20

21 PROJECT CONSTELLATION PEA ONE POSSIBLE DEVELOPMENT SCENARIO- ROBUST PROJECT AT TODAYS PRICES Central processing plant JOSEMARIA 150,000 tonnes of copper 180,000 ounces of gold 1,200,000 ounces of sliver per year for 48 years NPV 8 $2.6 B after tax IRR 16.6% after tax Payback 3.6 years $3 Cu $1275 Au C1 Costs $1.05/lb Cu Recoveries 88% Cu 73% Au LOS HELADOS 21 For details please see the Project Constellation Report which is available under the Company s profile at

22 PROJECT CONSTELLATION PEA RESULTS Project Constellation PEA Current Activity Pre-Tax NPV (8%) & IRR After-Tax NPV (8%) & IRR Payback (undis., after-tax cash flow) Metals Prices Assumed Initial Capital Expenditures LOM Sustaining Capital LOM C-1 Costs (net of by-prod) USD 4.43 billion NPV & 20.7% IRR USD 2.61 billion NPV & 16.6% IRR 3.6 Years USD 3.00/lb Cu USD 1,275/ozAu USD 20.00/ozAg USD 3.08 billion USD 4.36 billion USD 1.05/lb Cu payable Nominal Mill Capacity 150,000 t/d Mine Life 48 years Avg. Annual Production Life of Mine First 5 Years Peak 150kt Cu 180koz Au 1.2Moz Ag 185kt Cu 345koz Au 1.3Moz Ag 215kt Cu 415koz Au 1.6Moz Ag LOM Average Process Recovery 88.3% Cu 72.7% Au 61.4% Ag I II III IV V Los Helados surface rights acquired Baseline studies Engineering optimization Engagement with partners & acquisitions Nearby exploration All figures reported are in 2015 US dollars and on a 100% Project and 100% equity basis valuation. The reader is advised that the PEA study results in this presentation are only intended to provide an initial, high-level summary of the project. The PEA is preliminary in nature and includes the use of inferred mineral resources which are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves and there is no certainty that PEA results will be realized. Mineral resources are not mineral reserves and do not have demonstrated economic viability. For details please see the Project Constellation Report which is available under the Company s profile at 22

23 PROJECT CONSTELLATION SENSITIVITIES After-Tax, NPV Sensitivity, US $Million (rounded) Sensitivity to Discount Rate & Copper Prices $2.50/lb Copper (USD billion) $3.00/lb Copper (USD billion) $3.50/lb Copper (USD billion) Pre-Tax After-Tax Pre-Tax After-Tax Pre-Tax After-Tax Discounted at 5% Discounted at 8% Discounted at 10% Table shows the sensitivity of estimated NPV s for the Project s cash flows at various copper prices and discount rates (Au and Ag held flat at $1,275/oz and $20/oz respectively). PEA base case highlighted. Note: For details please see the Project Constellation Report which is available under the Company s profile at 23

24 LOS HELADOS - RESOURCE Los Helados Indicated Mineral Resource Cutoff (CuEq 1 ) Tonnage Resource Grade Contained Metal (million tonnes) Cu (%) Au (g/t) Ag (g/t) CuEq 1 (%) Cu (billion lbs) Au (million oz) Ag (million oz) , , , Los Helados Inferred Mineral Resource Cutoff (CuEq 1 ) Tonnage Resource Grade Contained Metal (million tonnes) Cu (%) Au (g/t) Ag (g/t) CuEq 1 (%) Cu (billion lbs) Au (million oz) 0.58 There are no Inferred Mineral Resources inside the mining shape at this cutoff grade Ag (million oz) Notes to accompany Los Helados Mineral Resource table: 1. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. 2. The Mineral Resource estimate is reported using the 2014 CIM Definition Standards and was prepared by Mr. Gino Zandonai, MSc., RM CMC, who is the qualified person for the estimate. The Los Helados estimate has an effective date of September 19, Base Case cutoff grades are highlighted. 3. Mineral Resources are reported using a copper equivalent (CuEq) cutoff grade. Copper equivalent is calculated using US$3.00/lb copper, US$ 1,300/oz gold and US$23/oz Ag, and includes a provision for selling costs and metallurgical recoveries corresponding to three zones defined by depth below surface. The formulas used are: CuEq% = Cu% *Au (g/t) *Ag (g/t) for the Upper Zone (surface to ~ 250 m); Cu% *Au (g/t) *Ag (g/t) for the Intermediate Zone (~250 m to ~600 m); Cu% *Au (g/t) *Ag (g/t) for the Deep Zone (> ~600 m). 4. Mineral Resources are reported within block cave underground mining shapes based on diluted CuEq grades, $13.07/t operating costs and include a provision for capital expenditure. The base case cutoff grade of 0.33% CuEq was derived through an economic evaluation of several block cave shapes developed over a range of different cutoff grades and is the cutoff grade which results in a zero net present value. 5. Cutoff grades refer to diluted cutoff grades used to generate the corresponding block cave shapes. For each cutoff grade, the tonnes and grade represent the total Indicated or Inferred undiluted material within each of these shapes. 6. Details on the Los Helados Resource Estimate are included in the Technical Report dated February 22, 2016 and titled Project Constellation incorporating the Los Helados Deposit, Chile and the Josemaria Deposit, Argentina NI Technical Report on Preliminary Economic Assessment with an effective date of February 12, 2016 The Report is available for review under the Company s profile on SEDAR The Los Helados resource estimate has an effective date of September 19, Totals may not sum due to rounding as required by reporting guidelines. 24

25 JOSEMARIA SULPHIDE RESOURCE Josemaría Indicated Mineral Resources (sulphide) Cutoff (CuEq 1 ) Tonnage Grade Contained Metal (million tonnes) Cu (%) Au (g/t) Ag (g/t) CuEq 1 (%) Cu (billion lbs) Au (million oz) Ag (million oz) , Josemaría Inferred Mineral Resources (sulphide) Cutoff (CuEq 1 ) Tonnage Grade Contained Metal (million tonnes) Cu (%) Au (g/t) Ag (g/t) CuEq 1 (%) Cu (billion lbs) Au (million oz) Ag (million oz) Notes to accompany Josemaría Mineral Resource tables 1. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. 2. The Mineral Resource estimate for Josemaría is reported using the 2014 CIM Definition Standards. The Mineral Resource estimate was prepared by Mr. Gino Zandonai, MSc., RM CMC who is the qualified person for both estimates. The Josemaría estimate effective date is August 7, Mineral Resources are reported using a copper equivalent (CuEq) cutoff grade. CuEq was calculated using US$3.00/lb copper, US$ 1,400/oz gold and US$23/oz Ag and was based on copper, gold and silver recoveries obtained in metallurgical testwork on four composite samples representing the rhyolite, tonalite, porphyry and supergene zones. Copper recoveries for the rhyolite, tonalite and porphyry zones were calculated as a function of copper grade, ranging from a low of 81% to a high of 97%. Copper recovery in the supergene zone was fixed at 85%. Gold recoveries were fixed between 62% and 73% and silver recoveries were fixed between 53% and 75% depending on the zone. 4. Mineral Resources are reported within a conceptual Whittle pit that uses the following input parameters: Cu price: US$3.00/lb, mining cost: US$2.20/t, process cost (including G&A): US$7.40/t processed, copper selling cost: US$0.35/lb and Over-all pit slope angle of 42º. The oxide resource was treated as waste for the Whittle run, however preliminary testwork has shown good recovery of gold through cyanide leaching and there is a reasonable prospect of eventual economic extraction of gold and silver using this method. Additional testwork is planned to confirm these results however there was no contibution from the oxide resource to the PEA project economics. 5. Mineral Resources (sulphide) have a base case estimate using a 0.2% CuEq cutoff grade; Mineral Resources (oxide) are reported using a 0.2 g/t Au cutoff grade. 6. Details on the Josemaria Resource Estimate are included in the Technical Report dated February 22, 2016 and titled Project Constellation incorporating the Los Helados Deposit, Chile and the Josemaria Deposit, Argentina NI Technical Report on Preliminary Economic Assessment with an effective date of February 12, 2016 The Report is available for review under the Company s profile on SEDAR Totals may not sum due to rounding as required by reporting guidelines. 25

26 BOARD AND MANAGEMENT EXPERTISE IN EXPLORATION, ENGINEERING STUDIES, CORPORATE FINANCE, M&A Management Wojtek Wodzicki, CEO & Director Bob Carmichael, VP Exploration Joyce Ngo, CFO Jamie Beck, VP Corporate Development and Projects Lukas Lundin, Chairman Bill Rand, Lead Director Cheri Pedersen, Director David Mullen, Director Jack Lundin, Director Wojtek Wodzicki, Director Geology Ph.D, P. Geo 30 years international exploration management and business experience. With Lundin Group since Previously with Teck. Geological Engineer, P. Eng. 24 years international experience. Strong background in exploration project management and resource estimation. Chartered Accountant. CPA, CA. Strong background in financial management and reporting. Mechanical Engineer, P. Eng., MBA. International project management experience with a strong background in finance. Board Successful entrepreneur focused on natural resources. Has led numerous companies through successful M&A. Securities Lawyer (ret.) Senior Business Adviser to Lundin Group Companies for more than 35 years. Securities Lawyer (ret.) practiced for more than 30 years focused on resource industries Finance professional. Expertise in merchant banking and private equity. Former head of HSBC Capital (Canada), Fulcrum Capital. Engineer, Masters degree in Mineral Resource Engineering University of Arizona See above 26

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28 Investor Relations: Michelle Fyfe;