TREASURY METALS INC. Advancing Toward Production in Ontario. Corporate Presentation April

Transcription

1 TREASURY METALS INC. Advancing Toward Production in Ontario Corporate Presentation April

2 FORWARD-LOOKING STATEMENTS + This presentation contains projections and forward-looking information that involve various risks and uncertainties regarding future events. Such forward-looking information can include without limitation statements based on current expectations involving a number of risks and uncertainties and are not guarantees of future performance of the Corporation. These risks and uncertainties could cause actual results and the Corporation s plans and objectives to differ materially from those expressed in the forward-looking information. Actual results and future events could differ materially from anticipated in such information. These and all subsequent written and oral forward-looking information are based on estimates and opinions of management on the dates they are made and expressly qualified in their entirety by this notice. The Corporation assumes no obligation to update forwardlooking information should circumstances or management s estimates or opinions change. This presentation contains projections and forward-looking information that involve various risks and uncertainties regarding future events. Such forward-looking information can include without limitation statements based on current expectations involving a number of risks and uncertainties and are not guarantees of future performance of the Corporation. These risks and uncertainties could cause actual results and the Corporation s plans and objectives to differ materially from those expressed in the forward-looking information. Actual results and future events could differ materially from anticipated in such information. These and all subsequent written and oral forward-looking information are based on estimates and opinions of management on the dates they are made and expressly qualified in their entirety by this notice. The Corporation assumes no obligation to update forward-looking information should circumstances or management s estimates or opinions change. Technical information in this presentation has been reviewed and approved by Mark Wheeler, P. Eng. and Paul Dunbar who are both Qualified Persons for the Goliath Gold Project under the definitions established by National Instrument

3 TREASURY METALS OVERVIEW ONTARIO GOLD DEVELOPER Development Opportunity & Operating Expertise + The flagship Goliath Gold Project is among the few projects in Canada with a short time frame to production and an attractive valuation + Management with Development Experience Excellent Infrastructure in World Class Jurisdiction High Grade Resource (1) with Strong Economics Exploration Upside + Located in world-class jurisdiction of Northwestern Ontario; deposit is adjacent to the TransCanada Highway with year-round access + Power, natural gas, CP rail, skilled workforce + Recent PEA demonstrated significantly Improved Economics with after-tax NPV of C$306M and IRR of 25% using U$1,225 gold and 5% discount rate + Avg. diluted UG grade of 4.99 g/t Au Eq (2) + Active 2017 step-out and condemnation exploration program along strike to NE of open pit + Significant expansion at depth and Inferred resource conversion opportunity in underground resource area Positioning to become one of Canada s next producing gold mines (1) Based on Measured and Indicated Resource from NI Mineral Resource Estimate completed by P&E Mining Consultants Inc. (Press release, August 28, 2015). (2) Preliminary Economic Analysis of the Goliath Gold Project prepared by CSA Global Canada Geosciences Ltd., with assistance of P&E, Treasury and consultants (Press release March 8, 2017). 3

4 TREASURY TODAY Listings TML (TSX); TSRMF (OTC); TRC (FSE) Share Price / Market Cap C$0.80 / ~$80M Outstanding Shares 103M Fully-diluted Outstanding 119 M (9M warrants/6m options) Cash (as at March 30) $1.5 million Significant Shareholders Insiders (11%); Extract (~5%); Gravitas (~3%); Concept (3%); Laramide (2.5%); Osisko (~2%). Excludes largest holders which are two European family offices. 4

5 MANAGEMENT AND BOARD Chris Stewart, President and Chief Executive Officer More than 24 years in senior management experience at mining and milling operations, including VP Operations at Kirkland Lake Gold Inc. Dennis Gibson, Chief Financial Officer Mr. Dennis Gibson, CPA, has held various senior financial positions for more than 30 years. In addition, he is CFO of Laramide Resources. Greg Ferron, VP, Corporate Development and Investor Relations Mr. Ferron brings 15 years of capital markets experience including corporate finance, business development and investor relations. Norm Bush, Vice President, Goliath Gold Mr. Bush is an engineer with more than 25 years in executive positions. Previously, he completed capital projects at Domtar s mill in Dryden. Mark Wheeler, Director, Projects Engineer with both open pit and underground mining operations experience, most recently as production engineer at Teck. Paul Dunbar, Exploration Manager Geologist with more than 30 years of experience leading mineral exploration programs to the resource development stage Marc Henderson, Chairman Founder of Laramide Resources Ltd. and Aquiline Resources Inc.; well established financier previously involved with Lydian, Minefinders; CFA. Bill Fisher, Lead Director Seasoned mining executive; former Chairman of Aurelian, Globestar and currently Executive Chairman of Goldquest Corporation; geologist Doug Bache, Independent Director Head of company s audit committee, extensive mine finance and accounting work with public mining companies; director of Marathon Gold Flora Wood, Independent Director Extensive capital market and investor relations experience including with Sherritt, Inmet Mining, Algoma and Aquiline Christophe Vereecke, Independent Director Investment advisory firm specializes in private client fund management focused in the extractive industry, mine royalties and precious metals Blaise Yerly, Independent Director Previous Chairman of Aquiline, Swiss based financier and founder /operator of Mine Equipment Leasing companies. Darryl Boyd, Director of Regulatory and Community Affairs Mr. Boyd has 20 years of mining experience; track record of achieving operating permit approvals for several Ontario-based companies. 5

6 CHRIS STEWART S EXPERIENCE IN ONTARIO GOLD SECTOR Chris Stewart, President & CEO + Chris Stewart, P.Eng., is a veteran mining executive with more than 24 years of diversified experience in the mining industry + Chris developed the Timmins Mine and refurbished and operated Bell Creek Mill as VP Operations for Lake Shore Gold + Chris led Kirkland Lake Gold s operations as VP Ops and during that period, accomplishments included: + Share price increase of >350% from $2.67 to a high of $12.39; + Market cap increased over 4.5x from $260M to a high of $1.45B; + Successfully integrated the St. Andrew Goldfields acquisition; and + Generated significant operating cash flow and 11 straight quarters of positive cash flow under his leadership Keys to a Successful Gold Operation in Ontario: + The right strategy for the operation and focus on safely + Leadership & Communication People + Culture of Accountability, Responsibility & Respect + Build and strengthen relations among Indigenous communities and organizations + Focus on the details but allowing people to do their jobs Positioning to become one of Canada s next producing gold mines 6

7 TREASURY METALS HISTORY and KEY PROJECT MILESTONES Three Resource Estimates Two Preliminary Economic Assessments: 1. Underground only based on Teck s work 2. Added Open Pit as a result of exploration results 130,000+ Metres Drilling Completed Updated PEA Study was focused on optimized mine plan and more detailed cost Starting: Feasibility Study in August Completion of all mine permits Completion of the Feasibility study Site development Production begins Present ~C$50 M spend on Goliath Gold Mine Permitting Begins including Environmental Baseline Studies Exploration Program Expansion Phase II Underground Exploration Program 30,000 m and Step-out exploration Mine permitting process ongoing Mine finance 7

8 2017 PRELIMINARY ECONOMICS ASSESSMENT (1) Production Metrics Total ore processed Average Head Gold Grade Mill Feed Production Rate Goliath 9.8 (OP 3.2 & UG 6.6) million tonnes 3.81 (g/tonne) 2,500 (tonne/day) + Significantly Improved Economics + Strong Gold Production LOM Gold Produced (Oz) 1,142,000 Gold recovery (CIL) 95.5% Average Annual Gold Production Oz/year Minimum Mine Life (years) 87,850 and 90,000 (Au. Eq) 13 (8 yrs OP and 11 yrs for UG) Peak Production (year 6) Oz/year 111, Year Annual gold production + Attractive Grade + Low Cash Cost + Conservative costs Initial Capital Expenditures Cash Costs AISC C$130 million US$525 US$611 + Low initial capital requirements Significantly Improved Economics with Strong Gold Production and Low Costs (1) Cautionary Statement: According to the cautionary statement required by NI , it should be noted that this assessment is preliminary in nature as it includes Inferred mineral resources that cannot be categorized as reserves at this time and as such there is no certainty that the preliminary assessment and economics will be realized. 8

9 PRODUCTION BY YEAR AND LOW CASH AND AISC COSTS Goliath Project Gold and Silver Production 9

10 PEA SENSITIVITY DATA AND LOW INITIAL CAPITAL Gold Price (USD/oz) $1,150 $1,200 Base Case ($1,225) $1,300 $1,350 $1,400 Pre-Tax and Post Tax NPV and IRR Sensitivity to Gold Price Pre-Tax NPV 5 C$m $356.7 $402.4 $425.2 $493.8 $539.4 $585.3 Post-Tax NPV 5 C$m $254.6 $288.9 $306.1 $357.5 $391.8 $426.2 Pre-tax IRR 26.3% 28.71% 29.9% 33.4% 35.7% 37.9% Post-tax IRR 22.1% 24.1% 25% 27.9% 29.8% 31.6% Pre-tax Payback - Yrs Post-tax Payback Yrs Note: Underground development, closure and sustaining capital commences in Year 1 averages C$10M per year. 10

11 MINING PLAN NEW PROJECT PARAMETERS FOR UPDATED PEA + Optimized mining plan; Open Pit: reduced stripping ratio and maximized NPV in conjunction with UG mill feed. Elimination of low-grade stockpile and higher cut-offs. Underground: increased tonnage and grade, UG mine by long hole stopping + Initial open pit generating immediate revenues to fund underground development. UG starts in year 2 and OP ends in Year 8 + Increased Measured and Indicated ounces in mine plan: MI representing 100% and 70% in the OP and UG + Optimization studies for tailings storage and mine closure completed to an advanced stage + Carbon-in-leach (CIL) circuit with gravity extraction with recoveries estimated at 95.5% for gold and 62.6% for silver + Open pit depth of ~130 m & UG depth of m + $3.45/t Open Pit, $77/t UG, $18.15/t Mill The preliminary economic assessment is preliminary in nature and includes inferred mineral resources that 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 the preliminary economic assessment will be realized. Mineral resources that are not mineral reserves do not have demonstrated economic viability. 11

12 GOLIATH GOLD PROJECT SITE 12

13 SUPPORTIVE COMMUNITY AND INDIGENOUS GROUPS / STATUS OF MINE PERMIT PROCESS Dryden, Ontario - A Solid Resource Base Close proximity to Winnipeg, Thunder Bay, and northern U.S. (Minneapolis) Large pool of available skilled workers Transportation hub with its own airport, and on the Trans-Canada Highway Nearby operating mines are Goldcorp s Red Lake and Musselwhite and Barrick s Hemlo Mine Permit Process Canadian Environmental Assessment Agency ("CEAA") determined the 2015 Environmental Impact Statement ("EIS") conforms Indigenous and local communities town hall and information session occurred April/May 2015 Draft Information Requests from these meetings were submitted to CEAA February 2017 Provincial and Federal Mine Permit Process to be completed during

14 EXCELLENT INFRASTRUCTURE IN PLACE AND ACCESS TO THE CITY OF DRYDEN Project Location Northwestern Ontario City of Dryden Power lines Highway Access Natural Gas Goliath Gold Project is located 4 km northwest of the village of Wabigoon, 20 km east of Dryden and 2km north of the TransCanada. Local workforce 14

15 GOLIATH PROJECT UPSIDE AND IMPROVEMENTS 1 Resource and Exploration Expansion 2 Disciplined Execution 3 Reduction of Capital Expenditures 4 Mine Plan Optimization 5 Process Optimization 15

16 CONCEPTUAL OPEN PIT AND UNDERGROUND OUTLINE Goliath Conceptual Open Pit Deposit and Wide Underground Zones ~130 m Main Zone and C Zone are the two principal zones of mineralization Main Zone and C Zone is open and depth Zones strike east-west and dip to the south-southeast ~500 m Open at depth Average widths of 10 m for Main and C Zones, with C Zone running parallel to the Main Zone and approx. 40 metres behind the Main Zone (North) Comparable deposits for geometry, potential mining operations and production profile: Black Fox, Young-Davidson and Musselwhite 16

17 GOLIATH GOLD SOURCES OF ADDITIONAL GOLD OUNCES + Within Footprint of Proposed Open Pit + Down Dip from Current Estimated Resource + Resource Conversion: Inferred Indicated Category + Along Strike Extensions from Current Resource + Additional Infill Core Sampling Programs + Exploration of the Remainder of the Goliath Property along the Alteration Corridor 17

18 GEOLOGY UPDATE PHASE I AND PHASE II 2016/2017 Drilling Program Approx. 13,500 metres drilled to date completed Phase I Infill Diamond drill database being updated with new drill holes Working with P&E to evaluate program prior to implementing Phase 2 Success in hitting grade and mineralized zones Focused on underground inferred to indicated resources conversion and expansion in central and west shoots Phase II to start mid to late May consisting of 30,000m of underground infill exploration program 18

19 STEP-OUT EXPLORATION PROGRAM AND CONDEMNATION Targets Plan Map of Goliath Gold Project Eastern Alteration Corridor within the Northeast extension Currently, a 5,000 metre condemnation and step-out exploration drilling program is ongoing. Focusing on highpriority near surface targets along strike to NE of main resource area Goliath Gold Deposit/Open pit Eastern Alternation Corridor Zoom In Phase II 30,000 metre underground infill drilling program is planned to commence by mid- May

20 GOLIATH GOLD PROJECT PROJECT TIMELINE Treasury Metals Goliath Gold Project Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Environmental Baseline Studies Continued Environmental Baseline/Monitoring Geological Drilling Continued Exploration Drilling Environmental Impact Statement and Federal Permitting EIS Provincial Permitting Engineering and Feasibility Study Mine Financing Procurement and Site Development Production Begins Reclamation 20

21 GOLIATH: NEAR-TERM MILESTONES Phase 1 Infill drilling completed Updated PEA complete Feasibility Level -Metallurgy Complete showing 95% recoveries by CIL Submissions of draft information requests provided to Federal Government Phase 2-30,000 m of Underground Infill exploration Further Indigenous and Community Engagement Acceptance of final EIS by Federal Government Commence Feasibility Study Commence Provincial Permits Step-out Exploration Program Finalize GeoTechnical Studies Complete Final Resource Estimate and Mine Design for FS Finalize Tailings and Closure Work Q1 Q2 Q3 Q Completion of Mine Permits and IBA Feasibility Study Project Finance 21

22 TREASURY METALS: THE UNDISCOVERED CANADIAN GOLD PROJECT Jr. CDN Gold Comparables Stage Mkt Cap (C$M) Annual Prod. (000 oz Au) AISC (US$/oz) Consensus P/NAV Peers Atlantic Gold Construction $ x Osisko Mining Adv. Explo $915 N/A N/A 0.99x Pure Gold Feasibility $ x Integra Gold Feasibility $ x Harte Gold Bulk Sampling $ x Peer Average $ x Treasury Metals Inc. Feasibility $ x Producers / Acquired (For Illustration Purposes Only) Richmond Mines Production $ x TMAC Production $1, x Wesdome Gold Production $ , x Lake Shore (Acquired) Production $945 (EV) x Kaminak (Acquired) Permitting $520 (EV) x Total Average $ x Footnote: P/NAV based on Analyst Consensus Estimates. TML Based on 2017 Base Case PEA. 22

23 CONTACT INFO Chris Stewart Greg Ferron President and CEO Vice President, Corp. Development Toronto Office Dryden Office or (toll-free)

24 TECHNICAL DATA APPENDIX 24

25 GOLIATH GOLD PROJECT NI RESOURCE ESTIMATE* Resource Category Block Cut-off AuEq g/t Tonnage Au (g/t) Contained Au (ounces) Ag (g/t) Contained Ag (ounces) AuEq (g/t) Contained AuEq (ounces) Open Pit Measured ,015, , , ,200 Indicated ,174, , ,869, ,400 M+I ,189, , ,125, ,600 Inferred ,351, , , ,000 Underground Measured , , , ,100 Indicated ,264, , ,044, ,000 M+I ,367, , ,120, ,100 Inferred ,120, , , ,300 Total Measured 0.35&1.90 1,117, , , ,300 Indicated 0.35& ,437, ,028, ,913, ,075,500 M+I 0.35& ,554, ,114, ,245, ,165,800 Inferred 0.35&1.90 3,470, , , ,300 Notes from Resource Estimate: 1.Mineral resources which are not mineral reserves do not have demonstrated economic viability. The estimate of mineral resources may be materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing, or other relevant issues. 2.The quantity and grade of reported Inferred resources in this estimation are uncertain in nature and there has been insufficient exploration to define these Inferred resources as an Indicated or Measured mineral resource and it is uncertain if further exploration will result in upgrading them to an Indicated or Measured mineral resource category. 3.The mineral resources in this press release were estimated using the Canadian Institute of Mining, Metallurgy and Petroleum (CIM), CIM Standards on Mineral Resources and Reserves, Definitions and Guidelines prepared by the CIM Standing Committee on Reserve Definitions and adopted by the CIM Council. 4. A gold price of US$1,397/oz and silver price of US$22.93/oz based on the April 30, 2015 three year trailing average prices and an exchange rate of US$1.06=Cdn$1.00 were utilized in the AuEq cut-off grade calculations of 0.35 g/t AuEq for Open Pit and 1.90 g/t AuEq for Underground mineral resources. 5. Open Pit mining costs were assumed at Cdn$5.00/t for mineralized material, Cdn$3.15/t for waste rock and Cdn$2.00/t for overburden, while Underground mining costs were assumed at Cdn$70.00/t, with process costs of Cdn$13.81/t, G&A of Cdn$2.72/t, and process recoveries of 95% for gold and 70% for silver. 6. The Au:Ag ratio used for AuEq was A bulk density model averaged 2.76 t/m 3 for mineralized material. 8. Totals in the table may not sum due to rounding. * Independent NI Mineral Resource Estimate completed by P&E Mining Consultants Inc. (Press release, August 28, 2015). 25

26 2017 PRELIMINARY ECONOMIC ASSESSMENT (1) Preliminary Economic Assessment Project Parameters Unit Amount Gold Resources Gold and Silver Production - Resources Mined Oz 1,142,000 and 2,075,000 Average Mill Feed Gold Grade Au (g/tonne) 3.81 Average Mill Feed Silver Grade Ag (g/tonne) Cut-off Grade - Open Pit and Underground Au g/tonne 0.55 and 2.10 Average Open Pit and UG gold grade (Au) Au (g/tonne) 1.58 and 4.87 Operating Metrics Total Tonnes Ore Produced (OP and UG) Tonnes 9.8 million Breakdown (OP and UG) Tonnes 3.18 and 6.60 million Open Pit Mill Feed Production Rate tpd/tpa 2,500 tonne/day or 875,000/yr Total Strip Ratio Waste:Mill Feed 6:1 Gold and Silver Recovery (Processing) % 95.5% and 62.6% Dilution (open pit and UG) % 25% and 10% Average Gold Production and AuEq Oz/year 87,850 and 90,000 Peak Production (Year 6) Oz/year 111,800 Mine life years 13 years Financial Metrics Realized Gold and Silver Price (Base Case) US$/Oz US$1,225 and $17 Total Initial Capital Expenditures C$M $133 Total Sustaining Capital (Including U/G) C$M $132 Cash Operating Cost U$/Oz $525 All in Sustaining Cost (AISC) U$/Oz $611 Mining Costs - Open Pit and UG $/tonne OP $3.45 and UG $77 General and Admin cost C$/tonne $2.85 Milling Costs and Open Pit Waste Mining $/tonne $18.15 and $3.30 Exchange Rate C$ C$1.32: US$1.00 (1) Independent NI Resource Estimate completed by P&E Engineering in 2015 (Press release, August 28, 2015) and stated in the Preliminary Economic Analysis of the Goliath Gold Project, effective March 8,

27 CASH FLOWS AND CAPEX (C$ MILLION) C$ Million Yearly Average Yearly Average for Years 3 to 9 LOM Total Net Metal Revenue $134.2M $166.1M $1,878M Operating Costs $58.1M $67.2M $812.7M Transportation, Royalties and Refining $0.6M $0.78M $9.3M Capital Costs $18.8M $11.0M $265.7M Pre-Tax Cash Flows $48.6M $81.1M $729.5M Corporate Tax $18.2M $24.0M $254.5M After-Tax Cash Flow $36.3M $63.5M $545.0M C$ Million Initial Capital Sustaining and Underground Capital Total Capital Processing Plant $90.7M $12.4M $103.1M Tailings $11.3M $10.0M $21.3M Open Pit Pre-Production $12.5M $0.0M $12.5M Open Pit Equipment $17.0M $1.6M $18.6M Underground $0.0M $96.3M $96.3M 27

28 COMPARISON BETWEEN 2017 PEA AND 2012 PEA Project Parameters Unit 2017 PEA 2012 PEA Gold Resources Gold and Silver Production Recovered Resources Oz 1,142,000 and 2,075, ,000 and 1,892,000 Cut-off Grade Open Pit and Underground Au g/tonne 0.55 and and 2.5 Average Mill Feed Gold Grade Au (g/tonne) Average Mill Feed Silver Grade Ag (g/tonne) Average Open Pit Gold Grade (Au) Au (g/tonne) Average Underground Gold Grade (Au) Au (g/tonne) Average Gold Grade AuEq (g/tonne) Operating Metrics Total Tonnes Mill Feed Produced Tonnes 9.8 million 9.0 million Tonnes Mill Feed Produced breakdown OP and U/G 3.18 and 6.60 million 4.51 and 4.52 million Mill Feed Production Rate tpd/tpa 2,500 tonne/day or 875,000/yr 2,500 tonne/day or 875,000/yr Dilution (Open Pit) 25% 15% Dilution (UG) 10% 15% Strip Ratio (excluding 1.3 million m 3 of pre-production overburden stripping) Waste:Mill Feed 6.0:1 9.3:1 Gold Recovery (Processing) % 95.5% 95.0% Silver Recovery (Processing) % 62.6% 70.0% Average Gold Production Oz/year 87,850 72,000 Average Silver Production Oz/year 160, ,000 UG Level Spacing m Mine life Years OP Mine Life Years UG Mine Life Years OP Ounces Produced M+I % 100% 58% UG Ounces Produced M+I % 76% 58% Total Ounces Produced M+I % 79% 58% Financial Metrics Realized Gold and Silver Price (Base Case) US$/Oz $1,225 and $17 $1375 and $26 Exchange Rate US$ C$1.32 C$1.02 Silver Equivalency Ag:Au 110:1 72:1 Total Initial Capital Expenditures C$M $133.2 $92.5 Plant and Infrastructure C$M $90.7 $76.2 Tailings C$M $11.3 $4.0 Open Pit Pre-Production C$M $12.5 $5.4 Total Sustaining Capital (Including U/G) C$M $132.5 $108.0 Tailings C$M $10.0 $2.0 Closure C$M $12.0 $2.0 UG Development C$M $85.3 $85.3 Plant and Infrastructure Sustaining C$M $12.4 $6.2 Cash Operating Cost US$/Oz $525 $698 All in Sustaining Cost (AISC) US$/Oz $611 $930 Mining Costs Open Pit and UG $/tonne Open pit $3.45 and UG $77 OP $3.15 and UG $62 Milling Costs and G & A costs $/tonne $18.15 and $2.85 $15.81 and $2.05 Open Pit Waste Mining $/tonne $

29 GOLIATH: SITE LAYOUT New Site Layout (Source: Sedgman). 29

30 NORTHWESTERN ONTARIO/WABIGOON BELT REGION 30

31 TML Share Price (C$/shr) Gold Price (C$/oz) TREASURY METALS SHARE PRICE AND C$ GOLD PRICE $0.85 $1,850 $0.80 $1,800 $0.75 $1,750 $0.70 $1,700 $0.65 $1,650 $0.60 $1,600 $0.55 $1,550 $0.50 $0.45 $0.40 TML C$ Gold Price (C$/oz) $1,500 $1,450 $1,400 31