Tepal Gold/Copper Project

Transcription

1 Tepal Gold/Copper Project Developing Mexico s Next Porphyry Belt CORPORATE PRESENTATION April 2017

2 Forward-Looking Statements Cautionary Statement on Forward-Looking Information & Statements This presentation may contain statements which constitute 'forward-looking statements, including statements regarding the plans, intentions, beliefs and current expectations of the Company, its directors, or its officers with respect to the future business activities and operating performance of the Company. The words "may", "would", "could", "will", "intend", "plan", "anticipate", "believe", "estimate", "expect" and similar expressions, as they relate to the Company, or its management, are intended to identify such forward-looking statements. In addition to the forward-looking information and statements noted above, this presentation includes those that relate to: the expected results of exploration activities; the estimation of mineral resources; the ability to identify new mineral resources and convert mineral resources into mineral reserves; ability to raise additional capital and complete future financings; capital expenditures and costs, including forecasted costs; the ability of the Company to comply with environmental, safety and other regulatory requirements; future prices of precious metals; the economic viability of the Tepal Gold/Copper Project; the ability of the Company to obtain all necessary approvals and permits in connection with the development of the Tepal Gold/Copper Project. Investors are cautioned that any such forward-looking statements are not guarantees of future business activities or performance and involve risks and uncertainties, and that the Company's future business activities may differ materially from those in the forward-looking statements as a result of various factors. Such risks, uncertainties and factors are described in the periodic filings with the Canadian securities regulatory authorities, including the Company's Annual Information Form and quarterly and annual Management's Discussion & Analysis, which may be viewed on SEDAR at Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected. Although the Company has attempted to identify important risks, uncertainties and factors which could cause actual results to differ materially, there may be others that cause results not be as anticipated, estimated or intended. The Company does not intend, and does not assume any obligation, to update these forward-looking statements except as required by applicable Canadian securities requirements. Dunham Craig, P.Geo., Chairman of the Board of Directors of the Company and a Qualified Person under National Instrument , has reviewed and approved the scientific and technical information in this presentation. 2

3 Investment Highlights WORLD-CLASS TEAM LARGE OPEN-PIT Au/Cu RESOURCE ROBUST PROJECT ECONOMICS EXTENSIVE TECHNICAL WORK COMPLETED INFRASTRUCTURE DISTRICT-SCALE EXPLORATION UPSIDE Extensive capital markets experience, expert Mexico-focused geological and operational knowledge, proven track record of value creation across the full mining spectrum Current NI resource (1) of g/t Au and % Cu in 187 Mt (M&I), and g/t Au and % Cu in 36 Mt (Inferred) 4.0 Moz. gold equivalent (2) Positive Preliminary Economic Assessment (PEA) results announced in January 2017 (1) : After-Tax: NPV 5% of US$169 million and 24% IRR with a 2.3-year payback period Production averages 79,000 oz. of gold and 32 Mlbs. of copper over a 10-year mine life Exceptionally clean Cu/Au/Ag concentrate with no smelter penalty elements such as arsenic Low strip ratio (0.6 : 1) ~C$27 million in total project expenditures to-date, including: resource drilling and definition; detailed metallurgical test work; completion of a Preliminary Feasibility Study (PFS) in 2013; and approval of environmental permit (MIA-P) based on PFS design Project is road accessible and proximal to a major highway, with convenient access to sources of both water and power, as well as nearby port facilities with excess capacity Known mineralization remains open for expansion; widespread occurrence of porphyry deposits in district-scale clusters; recently hired top geological talent to leverage first-mover advantage in underexplored porphyry belt (1) The mineral resource estimate reported herein and PEA results for the Tepal Gold/Copper Project are set out in the NI technical report Preliminary Economic Assessment on the Tepal Project, Michoacán, Mexico with an effective date of January 19, 2017 (2) Using a gold price of US$1,250/oz., copper price of US$2.50/lb. and silver price of US$18.00/oz. 3

4 Board of Directors & Key Management Dunham Craig Chairman Kiran Patankar President, CEO & Director Evelyn Abbott CFO & Corporate Secretary 27 years of mining industry experience, with oversight of two operating mines from discovery to development to production Current Director of SilverCrest Metals Former CEO of Geologix Explorations, previously with Cominco, Wheaton River, Glencairn Gold 12 years of mining industry experience as a public company CEO and director, investment banker, operations manager, and geological engineer Former CEO of Timberline Resources, Managing Director, Mining at Mackie Research Capital and Vice President, Mining at Macquarie Capital Former Director of Finance for Tibbett & Britten North America (a multinational public logistics company), B.C. Research Inc. and Vizon Scitec Inc. Gillian Kearvell Vice President, Exploration 30 years of experience as an exploration geologist, working exclusively in Mexico since 1994 Former Vice President of Exploration at Newstrike Capital, previously led exploration teams for Teck Resources, and credited with multiple world-class gold discoveries in Mexico George Brack Lead Independent Director Randy Smallwood Director Graham Thody Director Current Chairman of Capstone Mining, Director of Silver Wheaton and Timmins Gold 30 years of experience in investment banking, corporate development, M&A Former Managing Director and Industry Head, Mining at Scotia Capital and President of Macquarie North America Ltd. Current President, CEO & Director of Silver Wheaton 24 years of experience in mine development and operations Formerly with Wheaton River, Goldcorp, Homestake Mining, and Teck Resources 28 years of industry experience Current Director of SilverCrest Metals, UEX Corporation and Goldsource Mines 4

5 Capital Structure Share Capital Share Price as of March 31, 2017 Shares Outstanding Market Cap $0.08) Options ($ $0.14) Warrants ($ $0.11) Fully Diluted Cash & Receivables Debt (convertible) $ million $15.1 million 14.7 million 10.0 million million $0.4 million $0.3 million 30-Day Avg. Volume 132,000 5

6 Asset Overview Large-scale Au-Cu porphyry deposit 100% ownership (1) of 5 contiguous concessions totaling 1,406 hectares Current M&I resources of 1.8 Moz. Au and 813 Mlbs. Cu ( 3.5 Moz. AuEq.) (2) C$27M spent to-date by Geologix, including: drilling, resource definition, detailed metallurgical test work, completion of positive PFS (2013), environmental permitting, Cu flotation pilot plant, concentrate marketing 2017 PEA represents optimized development scenario with robust economics at US$1,250/oz. Au price and US$2.50/lb. Cu price Excellent infrastructure: road accessible with power, water, and port facilities Surface rights currently held by private landowners; no ejido issues CONCENTRATE YARD AND LOADOUT FACILITY CONCENTRATE LOADOUT FACILITY (1) Subject to a 2.5% NSR with Minera Tepal S.A. de C.V. (2) Using US$1,250/oz. Au price, US$2.50/lb. Cu price and US$18.00/oz. Ag price 6

7 2017 PEA Summary (JDS Energy & Mining Inc.) Pre-Production Capital Cost of US$214M Financial Highlights (Base Case Post-Tax) (1) NPV 5% of US$169M Sustaining Capital Cost of US$87M Payback Period of 2.3 Years Versus Total Life of Mine of 10 Years Internal Rate of Return of 24% Production Highlights Average Oxide Milling Rate of 5,500 tonnes per day Average Sulphide Milling Rate of 22,000 tonnes per day Life of Mine Payable Production: 766,000 oz. Au and 308 Mlbs. Cu All-in Cash Cost plus Sustaining Cost (2), net of by-product credits: $396/oz. Au Years 1-5 Average Payable Production: 108,000 oz. Au and 37 Mlbs. Cu Relative dearth of quality advanced-stage gold/copper development projects due to low metals prices and lack of investment during the recent five-year down cycle (1) Using US$1,250/oz. Au price, US$2.50/lb. Cu price and US$18.00/oz. Ag price (2) Cash cost includes all mining, milling & refining, transport, mine-level G&A, and royalty costs 7

8 PEA Production Profile LOM Production & Cash Costs 300 $1, $1,000 Annual Production (koz.) $800 $600 $400 $200 Cost/oz. (US$) (1) (2) Au AuEq. AISC/oz. $0 Production Year units LOM Resource Mined Mt Waste Mined Mt Strip Ratio w : o Payable Gold koz Payable Copper Mlbs Payable Silver koz ,458 Gold Equivalent (1) koz ,418 All-In Sustaining Cash Cost (2) US$/oz. $1 $291 $322 $394 $261 $705 $757 $828 $581 $1,094 $396 (1) Using US$1,250/oz. Au price, US$2.50/lb. Cu price and US$18.00/oz. Ag price (2) Cash cost includes all mining, milling & refining, transport, mine-level G&A, and royalty costs; net of byproduct credits 8

9 PEA Details Operating Assumptions Mine Life 9.8 years Total Material Mined Mt Strip Ratio 0.6 : 1 Average Plant Throughput (Sulphide + Oxide) 9.6 Mtpa Average Au Sulphide Head Grade 0.33 g/t Average Cu Sulphide Head Grade 0.21% Average Au Oxide Head Grade 0.45 g/t LOM Average Au Sulphide Recovery (combined Flotation & CIL) 77% LOM Average Cu Sulphide Recovery 87% LOM Average Au Oxide Recovery 81% LOM Revenue Split Cu, 43% Au, 54% Ag, 2% Polymetallic Au-Cu deposits tend to have lower cash costs per Au ounce due to byproduct credits, but more importantly produce counter-cyclical revenue streams Cash Flow (US$M) $300 $200 $100 $0 -$100 -$200 LOM After-Tax Cash Flow $300 After-Tax Cash Flow Cumulative After-Tax Cash Flow 9

10 A Study in Value The 2017 Tepal PEA represents an optimized development scenario with robust economics at current spot metals prices, and significant upside should prices continue to improve % Change in Base Case Prices -10% 0% 10% Gold Price (US$/oz) $1,125 $1,250 $1,375 Copper Price (US$/lb) $2.25 $2.50 $2.75 Silver Price (US$/oz) $16.20 $18.00 $19.80 All-In Sustaining Costs (net of byproducts): Gold (US$/oz) $497 $396 $296 Copper (US$/lb) $0.69 $0.38 $0.07 Pre-Tax: NPV 5% (US$ millions) $165.6 $299.4 $433.3 IRR (%) 25% 36% 46% Payback Period (years) After-Tax: NPV 5% (US$ millions) $77.5 $169.4 $257.2 IRR (%) 15% 24% 31% Payback Period (years)

11 Mineral Processing Two independent processing circuits: Oxide Milling (~13% of total material) Milling Recovery: 81% Au, 60% Ag recovery Grind -> CIL -> Doré -> Refiners Sulphide Milling (~87% of total material) Milling Recovery: 77% Au, 65% Ag, 87% Cu Concentrate -> Smelters, Doré -> Refiners Average Concentrate Grade: 26% Cu, 28 g/t Au, 99 g/t Ag Concentrate is very clean and in demand No smelter penalties Ideal for blending Standard industry processes that are simple and familiar 11

12 Excellent Local Infrastructure Town of Tepalcatepec Town population of 16,000 Educated workforce Large percentage of people work away from home 14 kilometres from site Power 50 megawatts available today 14 kilometres from site Land Topography is naturally suited to construction Surface rights are privately owned Ranch land (no churches or buildings) No archaeological sites or protected areas 12

13 Tepal s Resource Potential The optimized PEA mine plan utilizes roughly half of the 2012 resource base Potential to significantly extend mine life should metals prices improve Total Tepal Project Resource Estimate (1) - March 2012 Au Grade Cu Grade Ag Grade Contained Au Contained Cu Tonnes Resource Classification (g/t) (%) (g/t) (oz) (lbs) Measured 34,100, , ,000,000 Indicated 153,700, ,276, ,000,000 Measured & Indicated 187,800, ,804, ,000,000 Inferred 35,700, , ,000,000 Oxide and Sulphide Resources (1) - March 2012 Au Grade Cu Grade Ag Grade Contained Au Contained Cu Tonnes Resource Classification (g/t) (%) (g/t) (oz) (lbs) Oxide Measured & Indicated 21,100, ,000 96,000,000 Oxide Inferred 700, ,000 2,000,000 Sulphide Measured & Indicated 166,700, ,571, ,000,000 Sulphide Inferred 35,000, , ,000,000 (1) The resource stated in the table conforms to CIM guidelines for reasonable potential for economic extraction and is not to be confused as reserves. Resource numbers above are rounded to nearest 100,000 tonnes, 1,000 oz Au and 1,000,000 lbs Cu Source: March 2012 Micon Resource Report as filed on Sedar March 29, 2012; US$5/t equivalent value NSR cut-off Mineral Resource (Mine Diluted) Included in PEA Mine Plan (1)(2) Au Grade Cu Grade Ag Grade Contained Au Contained Cu Tonnes Resource Classification (g/t) (%) (g/t) (oz) (lbs) Measured 26,800, , ,000,000 Indicated 61,700, , ,000,000 Measured & Indicated 88,500, , ,000,000 Inferred 2,000, ,000 8,000,000 (1) The resource stated in the table conforms to CIM guidelines for reasonable potential for economic extraction and is not to be confused as reserves. Resource numbers above are rounded to nearest 100,000 tonnes, 1,000 oz Au and 1,000,000 lbs Cu (2) NSR cut-off for sulphide material is $8.19/tonne milled and for oxide material is $10.13/tonne milled Source: JDS Mining & Engineering 13

14 2017 PEA vs PFS Updated economic base case metal prices Revised Whittle pit optimization at lower metal prices Revised process flow sheet consisting primarily of: Reduction of the sulphide flotation throughput from an average 37,000 t/d to 22,000 t/d Change from batch grinding oxide material in the SAG and ball mills to an independent oxide crushing and grinding circuit Increase of oxide CIL retention time from 8 hours to 24 hours Mining operating costs based on contractor mining rates Revised mining schedule based on changes to the process plant Updated capital and operating cost estimates (CAPEX and OPEX) based on revised designs and more recent equipment budgetary pricing Parameter Unit 2013 PFS 2017 PEA Cu Price US$/lb Au Price US$/oz ,250 Ag Price US$/oz PRODUCTION Mine Life Years Total LOM Ore M tonnes Total LOM Waste M tonnes Total LOM Mined M tonnes Strip Ratio w:o Average Plant Throughput M tpa Cu Head Grade - Sulphide % 0.20% 0.21% Au Head Grade - Sulphide g/t Ag Head Grade - Sulphide g/t Au Head Grade - Oxide g/t Ag Head Grade - Oxide g/t Payable Cu LOM LOM M lbs Payable Au LOM LOM k oz 1, Payable Ag LOM LOM k oz 2,952 2,458 OPEX Mining $/tonne milled Processing - Sulphide Flotation $/tonne milled 6.09 Processing - Sulphide Cyanidation $/tonne milled Processing - Oxide Cyanidation $/tonne milled 6.82 Processing - Oxide CIL $/tonne milled 6.34 G&A $/tonne milled Tailings $/tonne milled 0.03 Leasing Costs $/tonne milled 0.54 Total OPEX $/tonne milled OTHER Cash Cost (Net of By-Product Credits) $/Payable Au oz Cash Cost (Net of By-Product Credits incl. of Sustaining Capital) $/Payable Au oz CAPEX Pre-Production Capital $ M Sustaining & Closure Capital $ M Total Capital + Contingency $ M ECONOMIC RESULTS Pre-Tax NPV 5% $ M Pre-Tax IRR % 35.9% 35.9% Pre-Tax Payback Period Years After-Tax NPV 5% $ M After-Tax IRR % 27.7% 23.6% After-Tax Payback Period Years

15 Potential to Extend Mine Life Optimized PEA pit shells reflect low strip-ratio (0.6 : 1) vs. PFS pit shells (1.8 : 1) NORTH PIT 2017 PEA Pit Shell ($1,250/oz Au, $2.25/lb Cu, $20.00/lb Ag) 2013 PFS Pit Shell ($1,400/oz Au, $3.15/lb Cu, $26.00/lb Ag) TIZATE PIT SOUTH PIT 15

16 PEA Site Plan Site topography perfectly suited to mining development Compact footprint minimizes haulage distances TAILINGS MANAGEMENT FACILITY NORTH PIT MILL SITE TIZATE PIT SOUTH PIT 16

17 Near-Term Exploration Potential Mineralization remains open along strike and at depth Near-term focus on identifying additional resources adjacent to existing pits and potential highergrade feeder zones South Pit North Pit Long section location Inset North Pit Tizate South Pit NSR Value ($/t) 8 to to to to to to to 25 > 50 Additional drill requirements are currently being evaluated 17

18 Medium-Term Exploration Potential LOTS OF ROOM FOR MORE Test the potential of an observed structural control to mineralization through: Regional prospecting and mapping Structural and alteration studies Geochemistry Semi detailed follow up mapping A successful conclusion will lead to a drill proposal NORTH PIT SOUTH PIT TIZATE Is there a higher grade Fault control? 150m depth with surface gold geochemistry 18

19 Long-Term Exploration Potential AN ORGANIC GROWTH STRATEGY District-Scale Potential: A regional story to be told and a strong community to develop through exploration and acquisition Michoacán State survey location Regional RTP Magnetic Plan Map red circles = pit outlines 19

20 Next Steps Utilize Team Expertise to Advance Project and Keep the Plan Simple Secure financing that appropriately values Tepal s potential Advance Tepal toward BFS and production decision Secure surface rights and restart permitting Reacquire prospective ground adjacent to core Tepal concessions Focused exploration: data compilation, structural and alteration studies, target prioritization, scout drilling to determine district potential Maintain fiscal discipline with respect to overhead/g&a 20

21 Advanced Gold/Copper Development Project Mexico Focus Organic Growth Strategy Proven Board & Management Team Robust Project Fundamentals Strong Local Partnerships GEOLOGIX EXPLORATIONS INC. Suite Granville Street Vancouver, BC Canada V6C 3P1 (604)

22 Appendix A: PEA Cost Summaries Capital Costs Pre-Production Sustaining / Closure Total (US$M) (US$M) (US$M) Mining Site Development/Earthworks Sulphide Processing Plant Oxide Processing Plant Tailings & Waste Rock Management Surface Infrastructure Project Indirects EPCM Owner Costs Closure (Net of Salvage) Subtotal Capital Costs Contingency 11% Total CAPEX Operating Costs US$/t LOM processed (US$M) Mining* Processing - Sulphide Processing - Oxide G&A Total OPEX *Mining operating cost is $2.16/t mined (excludes waste tonnes not associated with the 1.4Mt of pre-production mining) 22