SEPT 2018 TSX:MND POSITIONING MANDALAY FOR A RENEWED FUTURE

Transcription

1 SEPT 2018 TSX:MND POSITIONING MANDALAY FOR A RENEWED FUTURE

2 Forward-looking Statements This presentation contains "forward-looking statements" within the meaning of applicable securities laws, including statements relating to life of mine production plans, exploration plans and the growth and strategy of Mandalay. Actual results and developments may differ materially from those contemplated by these statements depending on, among other things: exploration results or production results not meeting management s expectations; capital, production and operating cost results not meeting current plans; and changes in commodity prices and general market and economic conditions. The factors identified above are not intended to represent a complete list of the factors that could affect Mandalay. A description of additional risks that could result in actual results and developments differing from those contemplated by forward looking statements in this news release can be found under the heading Risk Factors in Mandalay s annual information form dated March 29, 2018 and in its short form base shelf prospectus dated February 12, 2018, copies of which are available under Mandalay s profile at Although Mandalay has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. Quality Control and Assurance Quality control and assurance programs are implemented in line with the standards of National Instrument The exploration programs at Mandalay s properties are supervised by Chris Gregory (Member, Australian Institute of Geoscientists, VP of Operational Geology for Mandalay and a Qualified Person as defined under National Instrument Mr. Gregory regularly visits Mandalay s properties, and supervises the collection and interpretation of scientific and technical information contained in this presentation. Dominic Duffy, President and CEO of Mandalay, has visited Costerfield, Cerro Bayo, Challacollo, and Björkdal and has supervised the preparation of this presentation. All currency references in US$ unless otherwise indicated. 2

3 The Mandalay Portfolio Today Well-run, producing assets with exploration upside Björkdal: Breakthrough Asset 2018E production: koz gold 2018E cash costs: $820-$920/oz Current mine life: 10 years Costerfield: Strong Upside 2018E production (AuEq): koz 2018E cash costs: $720-$820/oz Current mine life: 4 years Significant high-grade Youle discovery Excellent high-grade exploration potential Chilean Properties Cerro Bayo (production suspended) Currently in permitting for restart Challacollo Feasibility-stage project Non-binding LOI signed with Aftermath Silver for total consideration of C$11,625,000 (ON CARE AND MAINTENANCE, CURRENTLY PERMITTING RESTART) Björkdal focused on higher-margin ounces Costerfield self-funding to grow P&P Reserves and bring Youle vein into operation 3

4 Key Objectives for 2018 Deliver Strong Results Stable production from current assets, strong cost management and budget control expected to result in growing positive cash flow from operations Produce koz AuEq from Björkdal and Costerfield operations at consolidated cash costs between $835-$910/oz AuEq., and AIC between $1,155-$1,280/oz AuEq. Position MND for Future Growth Increase Company-wide cash flow Restructure more streamlined Corporate department Strengthen cost discipline across all operations Begin development to high-grade Youle vein Grow Reserves & Mine Life Continue drilling high-grade Youle vein as potential next production area o Aim to add Youle to Reserves by end-2018 Build on continuing exploration success at Björkdal, with focus on high-grade areas Maximize Value of Portfolio Maximize value of non-core assets and mitigate financial risks: Lupin (C$5.3 million released to the Company in Q3), La Quebrada Explore options: Challacollo (LOI signed), Cerro Bayo 4

5 2018 Operational Guidance Gold Antimony Total Gold Equivalent AIC Per oz Gold Equivalent 83,000 93,000 oz 2,800 3,200 t 101, ,000 oz $1,155 $1,280 Björkdal Costerfield Consolidated Oz Au Eq., 000* Cash cost, $/oz Au Eq** All-in Cost, $/oz Au Eq** 1,060-1,210 1,150-1,250 1,155-1,280 CAPEX, $/million** *2018E Au Eq assumes full-year 2018 metal prices: Au $1,306/oz and Sb $8,361/t 5 **CAPEX includes exploration at Björkdal and Costerfield, consolidated cost guidance includes $ million/yr expected for Corporate G&A

6 Costerfield: Dependable Performance with Major Upside Land package 1,293 hectares Ownership 100% P&P Reserves (1) 622, g/t Au; 2.8% Sb for 122,000 oz Au and 17,200 t Sb 2017 Production 31,512 oz Au, 3,115 t Sb (52,137 oz Au $701 oz Au Eq.) 2018E Production Opening up new possibilities with high-grade Youle discovery Accelerating development to Youle 27,000 30,000 oz Au, 2,800 3,200 t Sb Increased focus and spending on exploration at Costerfield due to extremely highgrade potential (1) Source: SRK Consulting (Australia), Effective December 31, 2017, documented in an independent NI Technical Report filed March 29,

7 Brunswick: Expanding Production at Costerfield Brunswick vein At Brunswick Shaft; Now completing infrastructure Ventilation shaft location Dewatering of vein complete August 2018 Ore development commenced August 2018 First production stopes expected in Q

8 Emerging Youle Vein Youle vein lies approximately 800 m north of Brunswick Lode o Drill intercepts on Youle have demonstrated continuity of high-grade along strike and down dip Infill and extension drilling to continue for remainder of 2018 Expected to add Youle to YE 2018 Reserves and Resources Development to Youle vein initiated Q3, 2018 MND mining

9 Long Section of Youle Vein Intercepts Currently known mineralized shoot o Approx. 600 m strike o Approx. 200 m dip High-grade continuous core defined by multiple intercepts o Multiple intercepts over 30 g/t AuEq over 1.8 m minimum mining width Youle drilling highlights Hole True Width (m) Gold (g/t) 9 BC Sb (%) AuEq (g/t) over min. 1.8 m mining width BC021A BC BC BC023W

10 The Next Youle: Exciting District Potential at Costerfield DC Damper Creek Indicators: Radiometric, Historic Workings, Alluvial gold TB True Blue Indicators: Radiometric, Historic Workings, Alluvial gold KN King Cobra North Indicators: Radiometric, Faulting MD Mac Donald's Reef Indicators: Radiometric, Faulting, Historic Workings, (Youle extension) Focus of Mining and Exploration since 1970s 10 BR Browns Robins Indicators: Faulting, Major Historic Workings

11 Björkdal: Self-Generating Anchor Asset Land package 12,949 hectares Ownership 100% P&P Reserves (1) 11,403, g/t Au for 587,000 oz 2017 Production 62,028 oz $816/oz 2018E Production 56,000 63,000 oz Au 70,000 Björkdal Gold Production Gold Production (ounces) 60,000 50,000 40,000 30,000 20,000 10, E (1) Source: Roscoe Postle Associates, Effective December 31, 2017, documented in an independent NI Technical Report filed March 29,

12 Björkdal Growth Plans 1: OPERATIONAL EXPLORATION FOCUS Focus exploration on higher-grade and wider mining areas for greater profitability 2: STRONGER OPERATIONAL CASH FLOW Greater focus on underground ounces which generate larger margins than open pit mining, leading to improved cash flow to fund growth and reinvestment 3: INCREASED PLANT CAPACITY Potential for plant throughput upgrade from 1.3 mt/yr up to 1.7 mt/yr following granting of new environmental permit 4: LOWER COSTS Cost reduction across the entire operation 12

13 Cerro Bayo Silver-Gold Mine Land package 23,106 hectares Ownership 100% P&P Reserves (1) 856, g/t Ag; 2.34 g/t Au 2016 Production 13,792 oz Au, 1,731,031 oz Ag Operations remain on Care and Maintenance Permitting ongoing for restart of operations Mandalay considering all alternatives to maximize value of asset (1) Source: Current Mineral Reserves number depleted for 2017 production and Reserves sterilized by inundation at Delia NW. Depletion taken from Reserve position contained in NI Technical Report prepared by Roscoe Postle Associates, Effective December 31, 2016 filed on SEDAR March 31,

14 Challacollo Silver-Gold Project Land package August 2018: Signed non-binding LOI with Aftermath Silver for sale of Challacollo Project for total consideration of C$11,625,000 Aftermath Silver s management team has significant industry experience and complementary skillsets that Mandalay believes are necessary to create additional value for a development project such as Challacollo 20,378 hectares Ownership 100% Location Indicated Resource Elevation 130 km SE of Iquique, Northern Chile 4.7 MM 200 g/t Ag for 30 MM oz Ag Approx. 1,500 ASL 14

15 Adjusting the Portfolio in 2018 Realizing value from non-core assets Ulu, Nunavut: Option agreement signed; received both payments Norrliden: Exploring alternatives for sale Lupin, Nunavut Undergoing reclamation with submission of final closure plan C$5.3 million cash reduction in Reclamation Deposit released to MND in Q3 Additional Reclamation Deposit reductions available La Quebrada, Chile Active process ongoing Exploring options for development/restart assets Challacollo Executed non-binding LOI for sale of asset for total consideration of C$11,625,000 Cerro Bayo 15

16 Strong Balance Sheet as of June 30, 2018 Mandalay is fully funded to execute its capital plans and growth Share price (Sept 20, close) (C$) Millions (Except Share Price Info) $0.15/shr Shares Outstanding Stock Options (1) 20.7 RSUs 1.9 Fully Diluted Shares Outstanding Market Capitalization (C$) $67.7 Cash and Cash Equivalents (US$) (3) $15.5 Total Interest-Bearing Debt (US$) (3) $45.3 Total Enterprise Value (US$) (2,3) $82.3 US$25 million undrawn on US$40 million credit facility as of September 2018 Subsequent to the end of Q and not included above, Mandalay had an additional US$4.1 million in cash released from the Nunavut Water Board as a result of a reduction in its Reclamation Deposit at its Lupin mine 1. Exercise Price: C$0.60 C$1.13 expiry dates ranging from Mar 18, 2018 Jun 30, Market Capitalization converted to US$ using exchange rate of 1 CAD = 0.77 USD (Sept 21, 2018) 3. Cash and Cash Equivalents and Interest-Bearing Debt as at end of Q (June 30, 2018) 16

17 Strong Sponsorship and Broader Ownership Over Time Volume 30-day Average Daily Volume 432, day Average Daily Volume 575,232 Major Shareholders (1) Holders Shares (Million) Shares (Percentage) GMT Capital 73.1 Ruffer LLP % AzValor % CI Cambridge 39.1 Sentry Investments 28.5 Large Holders (Top-5) % Other Holders TOTAL % 8.7% 6.3% Management and directors collectively own or control 30.5 million shares (6.6% of the shares issued and outstanding) Average Daily Volume across all trading platforms (as of August 7, 2018) 1. Known ownership positions are estimates - as at Sept 20, 2018 Ownerships and percentages rounded to one decimal place. 17

18 TSX:MND For more information, please contact: Greg DiTomaso Director, Investor Relations Tel: Company Website:

19 A Values-Based and Value-Focused Company WE ARE SUCCESSFUL WHEN: Our employees live and work safely and experience the personal satisfaction that comes with high performance and recognition The communities in which we operate value our presence Our environmental impact is minimized and causes no permanent harm We have a large, diversified set of customers who are delighted with and compete for our products Our shareholders realize a superior total return on their investment and support our corporate values Our values are visibly demonstrated by strong local management, at the point of impact with our stakeholders, and coordinated across the Company for maximum effect 19