Telson Mining Corporation

Transcription

1 TSX.V: TSN OTCBB: SOHFF FSE: SQ82 Telson Mining Corporation A New Multi-Mine Producer in Mexico

2 Forward Looking Statements Cautionary Note Regarding Production Decisions and Forward-Looking Statements Statements contained in this corporate presentation that are not historical facts are forward-looking information or forward-looking statements (collectively, Forward-Looking Information ) within the meaning of applicable Canadian securities laws. Forward Looking Information includes, but is not limited to, disclosure regarding possible events, conditions or financial performance that is based on assumptions about future economic conditions and courses of action; the timing and costs of future activities on the Company s properties, such as production rates and increases; success of exploration, development and bulk sample processing activities; timing for the restart of continuous mining operations at the Campo Morado Mine, and timing for processing at its own mineral processing facility on the Tahuehueto project site. In certain cases, Forward-Looking Information can be identified by the use of words and phrases such as plans, expects, scheduled, estimates, forecasts, intends, anticipates or variations of such words and phrases. In preparing the Forward-Looking Information in this news release, the Company has applied several material assumptions, including, but not limited to, that the current exploration, development, environmental and other objectives concerning the Campo Morado Mine and the Tahuehueto Project can be achieved, the continuity of the price of gold and other metals, economic and political conditions and operations. Forward-Looking Information involves known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the Forward-Looking Information. Such risks and uncertainties includes fluctuations in metal prices, unpredictable results of exploration activities, uncertainties inherent in the estimation of mineral reserves and resources, fluctuations in the costs of goods and services, problems associated with exploration, mining and milling operations, changes in legal, social or political conditions in the jurisdictions in which Telson operates, lack of appropriate funding and other risk factors discussed in the Company s filings with Canadian regulatory agencies. There can be no assurance that Forward-Looking Information 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 Information. Except as required by law, the Company does not assume any obligation to release publicly any revisions to Forward-Looking Information contained in this corporate presentation to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. Telson relies on litigation protection for Forward-Looking Information. It should be noted that Telson has commenced pre-production mining at both projects without the benefit of pre-feasibility or feasibility studies that outline mineral reserves. Furthermore, it is likely that Telson will declare commercial production at Campo Morado prior to completing a feasibility study of mineral reserves demonstrating economic and technical viability. Accordingly readers should be cautioned that Telson s production decision will likely be made without a comprehensive feasibility study of established reserves such that there is greater risk and uncertainty as to future economic results from the Campo Morado mine and a higher technical risk of failure than would be the case if a feasibility study was completed and relied upon to make a production decision. Telson is currently completing a preliminary economic assessment ( PEA ) mining study on the Campo Morado mine that will provide a conceptual life of mine plan and a preliminary economic analysis based on the previously identified mineral resources (see News Release dated November 8, 2017). This will soon be replaced by a pre-feasibility study ( PFS ) that will allow the application of modifying factors to the mineral resources to allow a portion of them to be converted to mineral reserves; and will support the pre-production activities to bring the Campo Morado mine into commercial production. Telson expects that the PEA will be completed and published in March 2018 and that the PFS should follow within 6 months thereafter. Ralph Shearing, P. Geol., President of Telson Mining Corporation is the Qualified Person for the Company as defined in national Instrument , and is responsible for ensuring that the technical information contained in this presentation is an accurate summary of the original reports and data provided to or developed by Telson Mining Corporation. March 3, 2018 PRIVATE PRESENTATION FOR ACCREDITED AND SOPHISTICATED INVESTORS ONLY 2

3 A New Brand, a New Vision A New Multi-Mine Producer in Mexico

4 Telson: A New Multi-Mine Producer in Mexico An experienced exploration company Now a mining company, with a new mission and vision: Turn around undervalued properties and unlock their potential Deliver low-cost production for high shareholder return Continue to grow with acquisitions Two major projects, both in pre-production, coming into commercial production in 2018 and 2019 A significant buying opportunity now -while the mines are in pre-production March 3, 2018 PRIVATE PRESENTATION FOR ACCREDITED AND SOPHISTICATED INVESTORS ONLY 4

5 Campo Morado and Tahuehueto Tahuehueto Campo Morado Campo Morado Mine Guerrero State Gold, silver and base metal VMS mineral deposit commercial production expected in Q Tahuehueto Mine Durango State Gold, silver and base metal epithermal mineral deposit commercial production expected early 2019 March 3, 2018 PRIVATE PRESENTATION FOR ACCREDITED AND SOPHISTICATED INVESTORS ONLY 5

6 Growing to a Mid-Tier Producer Improved returns expected The first TSN turning point was October 2017, when preproduction mining began at Campo Morado Campo Morado in 2018 Commercial production of 2,500 tpd by Q3 Aggressive exploration, drilling identified targets Tahuehueto in 2018 Complete mine construction Startup production of 1,000 tpd by year-end Aggressive exploration, drilling identified targets March 3, 2018 PRIVATE PRESENTATION FOR ACCREDITED AND SOPHISTICATED INVESTORS ONLY 6

7 Mexican Managed and Operated Fewer conflicts, better community relations, lower costs All-Mexican mine management Cost efficient (no expat salaries) Capable and experienced in building and operating mines Telson restarted operations at Camp Morado with full support from local communities, stakeholders and government Hands-on managers in tune with local labour force and communities Major progress since Mexican management took over two years ago March 3, 2018 PRIVATE PRESENTATION FOR ACCREDITED AND SOPHISTICATED INVESTORS ONLY 7

8 Two Major Projects: Campo Morado and Tahuehueto Coming Online in 2018 and 2019

9 Campo Morado, a Zinc/Gold Mine Coming into Production in 2018

10 Campo Morado Advanced project purchased for a fire sale price (US$20 million) Proven asset with significant resource, solid revenue potential Extremely low capital costs to bring the mine to production: US$5 million (from Telson) All equipment, infrastructure and exploration in place (US$150 million in development investment from previous owners) Strong support from local communities March 3, 2018 PRIVATE PRESENTATION FOR ACCREDITED AND SOPHISTICATED INVESTORS ONLY 10

11 Campo Morado at a Glance High confidence levels: over 3,000 core drill holes; over 570,000 metres drilled Gold, silver and base metal VMS mineral deposit Resources (Measured and Indicated) Gold: 10.5Mn 2.04g/t Silver: 211 g/t Zinc: 4.82 g/t Copper: 0.88 g/t Lead: 1.11 g/t Notes: These resource estimates have been prepared by Eric Titley, P.Geo., a Professional Geologist registered in British Columbia as a member of the Association of Professional Engineers and Geoscientists BC. Mr. Titley is an independent qualified person, as defined in NI , who is responsible for the preparation of the technical information contained in the chart above in accordance with NI and the CIM Definition Standards. Inferred mineral resources are considered to be too speculative to allow the application of technical and economic parameters to support mine planning and evaluation of the economic viability of the project. Under Canadian rules, estimates of Inferred mineral resources may not form the basis of feasibility or pre-feasibility studies, or economic studies except for Preliminary Economic Assessments as defined under It cannot be assumed that all or any part of the Inferred resources will ever be upgraded to a higher category. The mineral resources were depleted to December 2014, the last phase of mining, by removing all material from the tabulation as found in the excavation solids models provided by Telson Mining Corporation Zinc equivalent calculations used metal prices of US$ 1.20/lb zinc, US$ 2.80/lb copper, US$ 17/oz silver, US$ 1150/oz gold and US$ 0.90/lb lead, and metallurgical recoveries of 70% zinc, 68% copper, 38% silver, 25% gold and 60% lead. A 5.5% ZnEq cut-off is considered to be appropriate for underground mining operations in Mexico. All mineral resource estimates, cut-offs and metallurgical recoveries are subject to change as a consequence of more detailed economic analyses that would be required in pre-feasibility and feasibility studies. The 5.5% ZnEq cut-off in bold is considered the base case mineral resource estimate. Other estimates are presented in the context of cut-off grade sensitivity analysis. Some figures may not sum exactly due to rounding. March 3, 2018 PRIVATE PRESENTATION FOR ACCREDITED AND SOPHISTICATED INVESTORS ONLY 11

12 Campo Morado Operational Improvements Infrastructure and equipment capable of processing 2,500 tpd Carbon removal flotation circuit added Mining method changed from room & pillar to sub-level caving Restarted operations October 2017 at 1,400 tpd Currently operating at 1900 tpd Ramping up to 2,500 tpd in 2018 Higher recovery techniques under investigation, including Glencore s Albion process and leaching of tailings March 3, 2018 PRIVATE PRESENTATION FOR ACCREDITED AND SOPHISTICATED INVESTORS ONLY 12

13 Campo Morado: Preproduction Details Producing zinc and other metals in preproduction phase Zinc prices are at a ten-year high Significant future potential to increase precious metal recoveries Gold prices are steadily increasing 106k tonnes of development ore processed in November-December 2017 Tonnes Au (g/t) Ag (g/t) Pb % Zn % Zn Concentrate 5, Pb Concentrate 2, Generated approximately US$5.23 million at final sale Preproduction began in Q4 2017, first sales in Q US$5.23 million generated in 2.5 months of 2017 Commercial production expected in Q March 3, 2018 PRIVATE PRESENTATION FOR ACCREDITED AND SOPHISTICATED INVESTORS ONLY 13

14 Investigating Precious Metals Recovery from Tailings Telson is conducting multi-leach metallurgical test to recover precious metals from existing tailings March 3, 2018 PRIVATE PRESENTATION FOR ACCREDITED AND SOPHISTICATED INVESTORS ONLY 14

15 Geochemical Anomalies Geophysical Anomalies Drilled Area Significant Exploration Potential Points to a Long Mine Life

16 Campo Morado: Commercial Production Will Transform Telson Increased zinc production Production efficiencies Per-ounce costs drop Campo Morado Camping and Dining Facilities Campo Morado Zinc Flotation Cells Gold will gradually enter the production stream Telson s valuation is expected to increase Campo Morado Concentrates being Loaded for Delivery Campo Morado Milling Facility 2,200 tpd March 3, 2018 PRIVATE PRESENTATION FOR ACCREDITED AND SOPHISTICATED INVESTORS ONLY 16

17 Tahuehueto, a Gold and Base Metal Mine Coming into Production in 2019

18 Tahuehueto Gold/silver/copper/lead/zinc: primary revenue is gold Building a 1,000+ tonne per day mine Proven asset with significant ore, solid revenue potential Major exploration potential (San Dimas-like district scale) Development mining underway and showing real promise Equipment, management and development investment in place Startup production expected by end of 2018 Commercial production expected in early 2019 March 3, 2018 PRIVATE PRESENTATION FOR ACCREDITED AND SOPHISTICATED INVESTORS ONLY 18

19 Tahuehueto at a Glance Gold, silver and base metal epithermal mineral deposit Reserves: Gold: 3.2Mn 3.4 g/t Silver: 41.8 g/t Ag plus base metals Resources (Measured and Indicated) Gold: 6.1Mn 2.4 g/t Silver: 42.8 g/t plus base metals Detailed mine plans are in place 95% of milling/production equipment is already purchased Fully funded to finish construction Currently toll milling at 132 tpd 14.3k tonnes mined and processed in 2017 Mineral resources are inclusive of mineral reserves. Mineral resources that are not mineral reserves do not have demonstrated economic viability. Mineral resource estimates do not account for mineability, selectivity, mining loss and dilution. These mineral resource estimates include inferred mineral resources that are normally considered too speculative geologically to have economic considerations applied to them that would enable them to be categorized as mineral reserves. There is also no certainty that these inferred mineral resources will be converted to either Measured or Indicated categories through further drilling, or into mineral reserves, once economic considerations are applied. March 3, 2018 PRIVATE PRESENTATION FOR ACCREDITED AND SOPHISTICATED INVESTORS ONLY 19

20 Tahuehueto Preproduction Details Destined to be a multimillion ounce gold deposit 10+ veins that are drilling targets 6 months into early preproduction 143,000 tonnes at an average of 132 tonnes per day Generated US$5.34 million in 2017 (~30% operating profit) 12 year estimated mine life (at 1,000 tpd, with current reserves) March 3, 2018 PRIVATE PRESENTATION FOR ACCREDITED AND SOPHISTICATED INVESTORS ONLY 20

21 Tahuehueto Mineralized District ~90 Sq Km

22 Current Reserves/Resources Based on El Crestón Structure 2018 Exploration Plan Develop and drill between El Crestón and Santiago Infill drilling between Cinco de Mayo and El Crestón Step out drilling along strike (north and south) Explore structure with underground drilling Surface drill identified mineralized vein structures March 3, 2018 PRIVATE PRESENTATION FOR ACCREDITED AND SOPHISTICATED INVESTORS ONLY 22

23 Tahuehueto Expected Financial Figures Item Units 550 tpd Average annual EBITDA US$16.6 Mn 8% Annual Discount Rate (Pre tax) Mine Life Average cost per ton (incl. mining, processing, G&A, freight, marketing and royalties) US$137.8 Mn 21 years US$67.35 Average cost per AuEq ounce US$ Contained Gold Produced LOM koz 340 Contained Silver Produced LOM koz 3,720 Contained Lead Produced LOM klb 73,100 Contained Copper Produced LOM klb 20,800 Contained Zinc Produced LOM klb 128,700 Metal Prices Used (US$): Au $1,180/oz, Ag $16.70/oz, Cu $2.65/lb, Pb $0.87/lb, Zn $0.92/lb Notes: Figures taken from the January 2017 PFS Metal Mining Consultants Inc. March 3, 2018 PRIVATE PRESENTATION FOR ACCREDITED AND SOPHISTICATED INVESTORS ONLY 23

24 Experienced Leadership With Proven Track Records

25 Trusted, Experienced Leadership Technical and mine leadership is Mexican Respected by Mexican government, Mexican communities, suppliers and workers In Mexico, Telson is seen as a Mexican company Capital market leadership is North American Connected to financial markets and the international mining industry Managing administration and public company aspects of Telson under stringent Canadian laws March 3, 2018 PRIVATE PRESENTATION FOR ACCREDITED AND SOPHISTICATED INVESTORS ONLY 25

26 Experienced International Management Jose Antonio Berlanga P.Eng. CEO and Director Ralph Shearing P.Geol. President and Director Enrique Margalef BA Economics VP Corp Development & Director Rory Godinho Director Capital Markets Omar Garcia Abrego CPA, CA Chief Financial Officer 42+ years in mining design, planning, engineering, construction and operation. Over 35 years experience in mineral exploration & development and 32 years senior management experience with publicly listed companies Former investment banker, 10+ years experience in M & A, financial evaluations, analyses, and cash flow management Rory Godinho is the Co-Chair of Miller Thomson s Capital Markets & Securities Group. He has extensive contacts in the Canadian capital markets and has assisted several public and private companies with raising equity. International experience in the mining industry and TSX public practice. March 3, 2018 PRIVATE PRESENTATION FOR ACCREDITED AND SOPHISTICATED INVESTORS ONLY 26

27 Independent Directors Arturo Bonillas P.Eng. CEO Independent Director Former President and Co-Founder of Timmins Gold Corp., 34+ years experience in Mexican mining industry. Remigio Martinez Muller B.S. Geo. CEO Independent Director With Grupo Mexico since Experienced mining geologist, geophysicist, and Director of Exploration. Yao Sun CFA, CMA, CPA Independent Director Chartered Financial Institute (CFA), the Certified Management Accountants (CMA) of Canada and the Certified Practicing Accountants (CPA) of Australia March 3, 2018 PRIVATE PRESENTATION FOR ACCREDITED AND SOPHISTICATED INVESTORS ONLY 27

28 Telson in 2018: Aggressive, Achievable Targets Campo Morado: Commercial production at 2,500 tpd by Q Tahuehueto: Complete mine construction Startup production of 1,000+ tpd by year end 2018 Both projects: Aggressive exploration, drilling identified targets Deliver Pre-Feasibility Studies March 3, 2018 PRIVATE PRESENTATION FOR ACCREDITED AND SOPHISTICATED INVESTORS ONLY 28

29 The Telson Mission: Unlocking Intrinsic Value Acquisition of processing plant for Tahuehueto Cash receipts of US$1.4Mn from bulk sample in Tahuehueto US$5Mn credit line from Trafigura for Campo Morado Campo Morado restarts operations Analyst Coverage intitiated giving CAD$1.8 and CAD$2.1 fair value target per share US$15Mn credit line from Trafigura for Tahuehueto Fully funded to finalize construction at Tahuehueto Campo Morado delivers first concentrates Campo Morado Acquisition from Nyrstar Mining Securing MXN$150Mn line of credit Processing of first Tahuehueto bulk sample Completion of Tahuehueto PFS First sale of Tahuehueto concentrates Tahuehueto starting preproduction operations CAD$1.5Mn PP for PFS and permits CAD$2Mn PP to restructure Telson New Mexican Management

30 Telson: The Investment Window is Now Development costs have already been invested Infrastructure and equipment is in place Telson is entering Stage 3 Experienced Mexican management and mining personnel are in place Once commercial production begins, valuations are likely to rise rapidly Not one, but two mines are going into production Standard Exploration to Production Market Cycle March 3, 2018 PRIVATE PRESENTATION FOR ACCREDITED AND SOPHISTICATED INVESTORS ONLY 30

31 Corporate Details Canadian Head Office West Georgia Street Vancouver, BC, V6E 3V7 T. (604) TECHNICAL AND ADMINISTRATION: Ralph Shearing T. (604) CAPITAL MARKETS: Rory Godinho T. (604) Mexico Office Calle Insurgentes Sur No Sexto piso, Col., Guadalupe Inn. C.P CD de Mexico T. (52) TECHNICAL AND MINING OPERATIONS: Jose Antonio Berlanga T CAPITAL MARKETS AND BUSINESS DEVELOPMENT: Enrique Margalef T Shares Outstanding: 124,855,848 Share Price (3/2/2018): CAD$ 0.80 Market Capitalization: CAD$ 93.1 million Options: 9,809,769 Warrants : 5,215,637 Cash Available: ~ CAD$ 8.27 million TSX.V Listing: TSN OTCBB Listing: SOHFF Frankfurt Listing: SQ82 telsonmining.com

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