TSX:MND OTCQB:MNDJF JAN 2019 POSITIONING MANDALAY FOR A RENEWED FUTURE

Transcription

1 TSX:MND OTCQB:MNDJF JAN 2019 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 Producing assets with organic growth profile and exploration upside Costerfield: Over 100% production increase planned by 2021 High-grade Youle lode added to Reserves Production from Youle expected 2H production (AuEq): 35,849 oz 2019E production (AuEq): 41,000-51,000 oz 2019E cash costs: $790-$920/oz Excellent high-grade exploration potential Björkdal: Ramping-up Production 2018 production: 45,719 oz gold 2019E production: 50,000-56,000 oz gold 2019E cash costs: $800-$950/oz Current mine life: 10+ years Chilean Properties Cerro Bayo (production suspended) Currently in permitting for restart Challacollo Feasibility-stage project Non-binding LOI signed with Aftermath Silver (ON CARE AND MAINTENANCE, CURRENTLY PERMITTING RESTART) Costerfield grew P&P Reserves and is bringing Youle vein into operation Björkdal focused on higher-margin ounces 3

4 2019: Transition, Growth, and Rejuvenation Guidance shows expected year-over-year production and cost improvements 2019E Guidance Gold 73,000 86,000 oz Antimony 2,600-3,100 t Total Gold Equivalent 91, ,000 oz Cash Cost Per oz Gold Equivalent $850-$980 AIC Per oz Gold Equivalent $1,130-$1, Performance (w/ 2018 guidance for costs) Gold 67,329 oz Antimony 2,173 t Total Gold Equivalent 81,568 oz Cash Cost Per oz Gold Equivalent $1,060-$1,100 AIC Per oz Gold Equivalent $1,450-$1,510 Björkdal Costerfield Consolidated Oz Au Eq., 000* 50,000-56,000 41,000-51,000 91, ,000 Cash cost, $/oz Au Eq All-in Cost, $/oz Au Eq 1,030-1,180 1,050-1,180 1,130-1,280 CAPEX, $/million** *2019E Au Eq assumes metal prices: Au $1,200/oz and Sb $8,200/t 4 **CAPEX includes exploration at Björkdal and Costerfield; consolidated cost guidance includes expected Corporate G&A

5 Significant Organic Production Growth Mandalay Production Guidance (in gold equivalent ounces, range midpoints graphed) Costerfield 81,568 Bjorkdal 91, , , , , , E 2019E 2020E 2021E Major production increase expected from bringing Youle vein on-line (expected H2-2019) Björkdal to ramp-up underground production; production increases expected due to mining wider, higher-grade Aurora zone and highergrade skarn 2019E 2020E 2021E Björkdal Gold produced (oz) 50,000-56,000 53,000-59,000 55,000-65,000 Costerfield Gold produced (oz) 23,000-30,000 40,000-49,000 60,000-75,000 Antimony produced (t) 2,600-3,100 2,200-2,800 2,400-3,300 Consolidated Gold eq* produced (oz) 91, , , , , ,000 *Assumes metal prices of: Au $1,200/oz, Sb $8,200/t. 5

6 Objectives for 2019 Grow Production Costerfield Bring high-grade Youle lode into production (expected in latter half of 2019) Ramp-up production stoping from Brunswick lode Björkdal Increase volume of high-grade UG feed Increasing development rate in Aurora for near-term stoping Exploration Costerfield Expand known Youle Mineral Reserve Continue regional exploration program on known targets to find additional Youle-like deposits Björkdal Continue to expand Aurora discovery Continue investigation into high-grade skarn bodies throughout the property 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 2018), La Quebrada Explore options: Challacollo (LOI signed), Cerro Bayo 6

7 Costerfield: Major Production Increases Planned Land package 1,293 hectares Ownership 100% P&P Reserves (1) 537, g/t Au; 2.9% Sb for 154,000 oz Au and 15,500 t Sb 2018 Production 35,849 oz Au Eq. (21,610 oz Au, 2,173 t Sb) 2019E Production 41,000-51,000 oz Au Eq. (23,000 30,000 oz Au, 2,600 3,100 t Sb) Keys to 2019: Accelerating development to Youle top priority for operation (expected 2 nd half of 2019) Increase production rate from Brunswick lode Increased interest in Victorian gold mining due to recent exploration discoveries Exploration to incorporate several highly prospective exploration targets Costerfield Gold Eq. Production (oz) 35,849 Costerfield Production Expected to More than Double by 2021E 41,000-51,000 55,000-68,000 76, , E 2020E 2021E (1) Source: SRK Consulting (Australia), Effective December 1, 2018, documented in an independent NI Technical Report to be filed within 45 days of January 8,

8 The Youle Lode: Driving Future Success Youle vein lies approximately 800 m north of Brunswick Lode Drill intercepts on Youle have demonstrated continuity of high-grade along strike and down dip Infill and extension drilling added Youle to 2018 year-end Reserves Development to Youle vein initiated Q3, 2018 Mineral Reserves at Costerfield (as of Dec. 1, 2018) Category Tonnes (kt) Au Grade (g/t) Sb Grade (%) Cont. Au (koz) Cont. Sb (kt) Proven Probable Proven + Probable Mineral Reserves at Youle (Costerfield) (as of Dec. 1, 2018) Category Tonnes (kt) Au Grade (g/t) Sb Grade (%) Cont. Au (koz) Cont. Sb (kt) Proven MND mining Probable Proven + Probable (1) Source: SRK Consulting (Australia), Effective December 1, 2018, documented in an independent NI Technical Report to be filed within 45 days of January 8,

9 Youle Long Section Currently known mineralized shoot Approx. 600 m strike Approx. 200 m dip High-grade continuous core defined by multiple intercepts Multiple intercepts over 50 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 BC BC036W BC BC021A

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: Ramping-up with Focus on Profitability 2019 Focus at Björkdal: Increase the percentage of production from underground Focus on higher production from wider, higher-grade Aurora zone to increase profitability Gain better understanding of high-grade skarn mineralization, which was previously not explored or exploited Björkdal Gold Production (ounces) 44,039 Björkdal Gold Production Expected to Rise 2019E-2021E (midpoints of guidance graphed) 48,143 62,018 45,719 50,000-56,000 55,000-65,000 53,000-59, E 2020E 2021E Land package P&P Reserves (1) 12,949 hectares 11,403, g/t Au for 587,000oz (1) Source: Roscoe Postle Associates, Effective December 31, 2017, documented in an independent NI Technical Report filed March 29,

12 Björkdal Exploration Strategy Paying Off New discovery of Aurora zone provides the potential to mine high-tonnage and higher-grades at lower costs Aurora zone significantly wider and consistently higher-grade than current mill feed 250 m horizontally 150 m vertically Mineralization open in all directions Aurora zone readily accessible, two levels currently being developed Large step-out drilling occurring below and above currently known mineralization to expand zone Preliminary processing results show no challenges for gold recoveries Hole True Width (m) Gold (g/t) DOD DOD MU DOD MU (diluted to 3m)

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 Mandalay Portfolio 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 Q 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 Cerro Bayo 15

16 Strong Balance Sheet as of September 30, 2018 Mandalay is fully funded to execute its capital plans and growth Share price (Jan 15, close) (C$) Millions (Except Share Price Info) $0.11/shr Shares Outstanding Stock Options (1) 20.7 RSUs 1.9 Fully Diluted Shares Outstanding Market Capitalization (C$) $49.7 Cash and Cash Equivalents (US$) (3) $26.7 Total Interest-Bearing Debt (US$) (3) $61.9 Total Enterprise Value (US$) (2,3) $72.6 US$10 million undrawn on US$40 million credit facility as at end-q 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 = 0.75 USD (Jan. 15, 2019) 3. Cash and Cash Equivalents and Interest-Bearing Debt as at end of Q (Sept 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 AzValor % Ruffer LLP % 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 Oct 24, 2018 Ownerships and percentages rounded to one decimal place. 17

18 TSX:MND OTCQB:MNDJF 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