A SCARCE ASSET IN A TRUE MINING DISTRICT

Transcription

1 A SCARCE ASSET IN A TRUE MINING DISTRICT July 2018

2 FORWARD LOOKING STATEMENT This presentation of Guyana Goldfields Inc. (the "Company") contains statements that constitute "forward-looking statements." Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements, or developments in our industry, to differ materially from the anticipated results, performance or achievements expressed or implied by such forward-looking statements. Forward looking statements are statements that are not historical facts and are generally, but not always, identified by the words "expects," "aims," "plans," "anticipates," "believes," "intends," "estimates," "projects," "potential" and similar expressions, or that events or conditions "will," "would," "may," "could" or "should" occur. Information inferred from the interpretation of drilling results and information concerning mineral resource and mineral reserve estimates may also be deemed to be forward looking statements, as such information constitutes a prediction of what might be found to be present when and if a project is actually developed. Forward-looking statements this document include statements regarding: the Company's expectations regarding drilling and exploration activities on properties in which the Company has an interest; and the Company's statements regarding estimates of reserves and resources on properties in which the Company has an interest. There can be no assurance that such statements will prove to be accurate. Actual results and future events could differ materially from those anticipated in such statements, and readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of their respective dates. Important factors that could cause actual results to differ materially from the Company's expectations include among others, risks related to fluctuations in mineral prices; uncertainties related to raising sufficient financing to fund planned work in a timely manner and on acceptable terms; changes in planned work resulting from weather, logistical, technical or other factors; the possibility that results of work will not fulfill expectations and realize the perceived potential of the Company's properties; uncertainties involved in the estimation of resources and reserves; the possibility that required permits may not be obtained on a timely manner or at all; the possibility that capital and operating costs may be higher than currently estimated and may preclude commercial development or render operations uneconomic; the possibility that the estimated recovery rates may not be achieved; risk of accidents, equipment breakdowns and labour disputes or other unanticipated difficulties or interruptions; the possibility of cost overrun or unanticipated expenses in the work program; the risk of environmental contamination or damage resulting from the Company's operations; risks associated with title to mineral properties; and other risks and uncertainties discussed appear elsewhere in the Company's documents filed from time to time with the Toronto Stock Exchange and Canadian securities regulators. These statements are based on a number of assumptions, including assumptions regarding general market conditions, the availability of financing for proposed transactions and programs on reasonable terms, the cost of exploration and development and the ability of outside service providers to deliver services in a satisfactory and timely manner. Forward-looking statements are based on the beliefs, estimates and opinions of the Company's management on the date the statements are made. Except as expressly required by applicable securities laws, the Corporation undertakes no obligation to update these forward-looking statements in the event that management's beliefs, estimates or opinions, or other factors, should change. This presentation uses the terms "Inferred Resource", "Indicated Resource", Measured Resource and "Mineral Resource". The Company advises readers that although these terms are recognized and required by Canadian securities regulations (under National Instrument "Standards of Disclosure for Mineral Projects"), the US Securities and Exchange Commission does not recognize these terms. Readers are cautioned not to assume that any part or all of the mineral deposits in these categories will ever be converted into reserves. In addition, "Inferred Resources" have a great amount of uncertainty as to their existence, and economic and legal feasibility. It cannot be assumed that any part of an Indicated or Inferred Mineral Resource will ever be upgraded to a higher category. Under Canadian rules, estimates of Inferred Mineral Resources may not form the basis of feasibility or pre-feasibility studies, or economic studies except for a Preliminary Assessment as defined and permitted under National Instrument Readers are cautioned not to assume that part or all of an Inferred Resource exists, or is economically or legally mineable. The Mineral Resources stated in this presentation are not Mineral Reserves and, in the absence of a current feasibility study, do not demonstrate economic viability. The determination of Mineral Reserves can be affected by various factors including environmental, permitting, legal, title, taxation, socio-political, and marketing issues. 2

3 INVESTMENT HIGHLIGHTS A Scarce Asset High grade Au producer with +16 years reserve life with upside Simple metallurgy and mine plan, positive grade reconciliation to date Exceptional Free Cash Flow Generation US$500M+ of expected free cash flow generated over the next 5 years at US$1,300/oz Attractive 5-Year Growth Profile Annual gold production expected to grow from 160koz (2017) to +300koz (2022) Strong Balance Sheet Cash position of US$62M vs. debt of US$50M as at June 30, 2018 District Potential +200,000 acre land package in highly prospective & underexplored greenstone belt Targeting open pit exploration targets within a 30km radius from Aurora Mill Focus on East Wallcott Drilling at Aurora, Iroma, Wynamu and Arangoy targets 3

4 SITE LAYOUT: Aurora Gold Mine Aleck Hill North Aleck Hill Mad Kiss Walcott Hill Rory s Knoll 4

5 Aurora is a High Grade Gold Mine Gold Equivalent Grade (g/t Au Eq.) Guyana Torex SEMAFO Alacer OceanaGold IAMGOLD Alamos B2Gold Detour Eldorado SSR Mining New Gold Kinross Yamana Tahoe Centerra Source: Company filings Note: Gold equivalent grade shown for total reserves and resources (precious metals only). 5

6 2018 Guidance 2018 Guidance Gold production 175, ,000 Cost of sales (production costs, royalty and depreciation) Cash cost¹, excluding royalty All-in sustaining cost¹ ( AISC ) $ /oz $ /oz $ /oz Production is weighted towards the second half of the year due to mine sequencing and increased throughput with completion of the phase 1 expansion mine plan is primarily made up of all hard rock ore from the central tonalite/diorite ore at Rory s Knoll and East Walcott deposits. Costs are based on an increased stripping rate during 2018, offset by the increased and more costefficient production offered by the process plant expansion investments. (1) This is a non-ifrs measure. Refer to non-ifrs Performance Measures section in the latest MD&A 6

7 Q Operating Highlights Q Q Annual Guidance Gold Produced (ounces poured) 38,500 28, k Gold Sold (ounces) 38,000 31,700 Average Realized Gold Price US$/ounce 1,333 1,300 Gross Revenue (US$) 50M 41M Cost of sales (production costs, royalty and depreciation) 913 $ /oz Cash cost¹, excluding royalty 611 $ /oz All-in sustaining cost¹ ( AISC ) 934 $ /oz Tonnes mined per day 36,489 39,717 Tonnes processed per day 6,720 7,100 Head grade g/t Au Recovery (%) Full second quarter 2018 operational and financial results will be released after-market on Monday, July 30, Production is weighted towards the second half of the year due to mine sequencing and increased throughput with completion of the phase 1 expansion. 7

8 Excellent Track Record and Growth Profile Gold Recovered / Costs 1,200 1, Recovered Oz Costs (US$/oz) E ¹ 2019E 2020E 2021E 2022E Underground Open Pit Operating Cash Cost AISC 0 Source: Optimized Life of Mine Plan Press Release February 20, 2018 (1) 2018 Guidance of 175k 185koz 8

9 Optimized LOM Mine Plan: Highlights Comparison Description US$1,200 gold price) 2018 LOM Plan 2017 Updated FS Ore tonnes (Mt) Average grade (Au g/t) Process recovery (%) Payable gold (Moz) Annual gold production ( koz) Mine Life (years) AISC ($/oz)¹ Post tax NPV 5% (M$) % Discount Rate $1,000/oz gold price² $1,100/oz gold price $1,300/oz gold price $1,400/oz gold price Pre tax NPV ($mlns) ,393 1,645 Post tax NPV ($mlns) ,081 1,264 Source: Optimized Life of Mine Plan Press Release February 20, 2018 (1) This is a non-ifrs measure. Refer to non-ifrs Performance Measures section (2) Royalty decreases from 8% to 5% at gold prices at and below US$1,000/oz 9

10 COMBINED PRODUCTION PROFILE Total Material Mined / Gold Produced Material Mined (Mtonnes) Gold Recovered (k oz) Ore Processed UG Ore OP Ore Waste Recovered Oz 2017 FS Oz Source: Optimized Life of Mine Plan Press Release February 20,

11 MILL EXPANSION Phase 1 Expansion: Completed Phase 2 Pre crush Expansion: Q Capital cost of $3.5M Engineering is complete & construction is 20% underway Phase 2 Ball Mill & Gravity Expansion: Q Eliminated Due to the highly encouraging results from trials supplementing mill feed with pre crushed ore, as well as the higher than expected recoveries from the Phase 1 expansion, the scope of the second phase of the mill expansion has been reduced to eliminate the ball mill Savings of $2.5M Throughput (tpd) 7,200 7,000 6,800 6,600 6,400 6,200 6,000 5,800 5,600 5,400 Current Operation Phase 1 Pre Crush Install Recovery (%) Throughput Recovery 11

12 UPCOMING CATALYSTS Phase 2 Mill Expansion Expected completion by the end of Q Underground Development Begins Q Exploration Multiple brownfield and greenfield targets 12

13 GUIANA SHIELD: Known Gold Region 13

14 CUYUNI BASIN: A TRUE MINING DISTRICT: Looking for Mine #2 Looking for Mine #2 Arangoy 1 Operating Aurora Gold Mine 1 Sulphur Rose secondary resource 1,200 square km land package Long history of artisanal mining Highly prospective greenstone belt Brownfield Targets: East Walcott, Mad Kiss and Aleck Hill Greenfield Targets: Iroma, Wynamu and Arangoy 14

15 Brownfields Exploration: Resource Growth Potential at AH and MK Open laterally and at Depth Source: JDS,

16 Brownfields Exploration: Resource Additions At East Walcott 16

17 Iroma: Near Mine Open Pit Feed Target Located 10km NE of Aurora First-ever drilling: 17 holes have been completed to date totaling 3,721 meters of drilling. Drilling will continue to test the mineralized zones laterally and at depth. A drill rig road is currently being pushed towards Areas 2 and 3 along the 8.5km gold anomalous zone that will be drill tested. Gold mineralization is associated with NNW trending shear zones along an 12km central zone of anomalous gold. Prerequisites: Deep plumbing Brittle / Ductile Contrast Source of iron Sulphidation / Gold Event 17

18 Wynamu: First Ever Drilling Program Regional NE Structure First ever drilling: 7 drill holes have been completed. A ground magnetic survey commenced which will cover 50 line-km of the more significant gold anomalous trends. Drill testing will continue towards the northeast of the drilled area to test anomalous gold in soils and trenches. Anomalous Gold in soil over 5 km Iron rich volcanic host rock Pervasive iron carbonate alteration 18

19 Greater Sulphur Rose Area & Arangoy Arangoy is located ~ 10 km NW of Sulphur Rose Sulphur Rose Resource: M&I: 277, g/t Au Inf: 289, g/t Au Soil sampling conducted within the vicinity of the greenstone and intrusive lithological contact indicated a large and coherent gold anomaly in soils measuring roughly 1km by 0.5km. A trenching and drilling program is currently being planned to test the gold anomaly. 19

20 APPENDIX 20

21 CORPORATE SNAPSHOT Symbol: TSX: GUY Top 10 Shareholders Shares % Total Shares Outstanding 173,310,801 Options 6,3097,512 Warrants 0 52 week: Hi/Lo C$5.51 / C$3.96 Market Cap (at C$ 4.90) C$850 million Cash Balance (June 30, 2018) US$62 million The Baupost Group 23.7M 13.7% Van Eck 19.1M 11.0% M&G Investment Mgmt 11.2M 6.5% Franklin Resources (Templeton) 8.4M 4.5% Debt (June 30, 2018) US$50 million Rafferty Asset Management 8.3M 4.8% Sentry Investments 6.9M 4.0% Fidelity Investments 6.1M 3.5% Patrick Sheridan Jr. (Founder) 5.6M 3.2% Oppenheimer 5.2M 3.0% Dimensional Fund 3.6M 2.1% 21

22 MINING FRIENDLY JURISDICTION & GOVERNMENT Guyana is the only English speaking country in South America British common law and secure tenure - part of the Commonwealth Democratically elected government under parliamentary system Long history of significant gold production: Gold was the largest export of the country Royalty: 5%: Gold price $1,000/oz or less 8%: Gold price $1,000/oz + Corporate income tax: 27.5% with no withholding tax on interest payments 22

23 LOGISTICS & INFRASTRUCTURE Wynamu Road Access to Aurora 23

24 CSR AND SUSTAINABLE DEVELOPMENT Focus on health and safety of our employees, the well-being of our community and the protection of the natural environment Hiring in the region, giving priority to local communities: 96% are Guyanese nationals Scholarship and job/skills training Supporting local communities Local sourcing of goods and services Business opportunities Participation in municipal development Sustainable development initiatives in community 24

25 MINERAL RESERVES Category As at December 31, 2017 Quantity (kt) Grade (g/t Au) Ounces (k Oz) Proven OP Saprolite OP Rock 4, Total Proven 4, Probable OP Saprolite 2, OP Rock 12, ,172 UG Rock 23, ,262 Total Probable 38, ,565 Total P&P 43, , The CIM definitions were followed for mineral reserves. 2. Mineral Reserves are based on a gold price of US$1,200 per ounce, an 8% royaltyandanaverage metallurgical recovery of 96.0% for saprolite and 94.0% for fresh rock material. 3. Open pit saprolite and rock reserves are reported at a cut-off grade of 0.44 g/t Au and 0.42 g/t Au for vein and upper saprolite material respectively. Open pit rock reserves are reported at a cut-off grade of 0.76 g/t Au and 0.64 g/t Au for vein and Rory s Knoll rock material respectively. 4. Underground fresh rock reserves are reported at a cut-off grade of 1.5 g/t Au. 5. Mineral reserves are contained within mineral resources. 6. All figures have been rounded to reflect the relative accuracy of the estimates. Numbers may not add due to rounding 7. The mineral reserve estimate was prepared by Tysen Hantelmann, P.Eng. and Gord Doerksen, P.Eng of JDS Mining and both are a qualified person under National Instrument

26 MINERAL RESOURCES As at December 31, 2017 Category Quantity Grade Ounces (kt) (g/t Au) (k Oz) Measured OP Saprolite OP Rock 4, Total Measured 4, Indicated OP Saprolite 1, OP Rock 20, ,747 UG Rock 30, ,780 Total Indicated 52, ,569 Total M + I 57, ,014 Inferred OP Saprolite 1, OP Rock 2, UG Rock 11, ,560 Total Inferred 16, , The CIM definitions were followed for mineral resources. 2. Mineral resources are inclusive of mineral reserves. Mineral resources are not mineral reserves and do not have demonstrated economic viability. 3. All figures have been rounded to reflect the relative accuracy of the estimates. Number may not add due to rounding. 4. Open pit mineral resources are reported at a cut-off grade of 0.30 g/t for Saprolite and 0.40 g/t for Fresh rock respectively, and underground mineral resources are reported at a cut-off grade of 1.8 g/t. Cut-off grades are based on a price of US$1,300 per ounce of gold and a gold recoveries of 97 percent for saprolite and 94.5 percent for fresh material. 5. Mineral resources have been adjusted using the 2017 EOY topography, to account for open pit mining to date, and include ore stockpile inventories as of EOY The qualified person is not aware of any mining, metallurgical, infrastructure, permitting, or other factors that could materially affect the mineral resource estimates. 7. The mineral resource estimate for Rory s Knoll was prepared under the supervision of Tim Maunula, of T. Maunula & Associates Consulting Ltd. Mr. Maunula is a qualified person under NI and is independent of the Company. The mineral resource estimate for the satellites was prepared under the supervision of Daniel Noone of Guyana Goldfields Inc. Mr. Noone is a qualified person under National Instrument

27 Optimized LOM Plan OPEX Description Unit 2018 LOM 2017 Updated FS OP Mining $/tonne mined RK UG Mining $/ore t mined Satellite UG Mining $/ore t mined Processing $/t processed G&A $/t processed Operating Cash Cost¹ (w/ royalty) Operating Cash Cost¹ (excl. royalty) $/oz $/oz AISC¹ $/oz Source: Optimized Life of Mine Plan Press Release February 20, This is a non-ifrs measure. Refer to non-ifrs Performance Measures section. 27

28 OPEN PIT TONNES MINED BY SOURCE 30 OP Material by Source Material Mined (Mtonnes) Mining Rate (ktpd) RK AH AN WH MK tpd Source: Optimized Life of Mine Plan Press Release February 20,

29 UG MATERIAL BY SOURCE 2.5 UG Material by Source Material Mined (Mtonnes) Mined Grade (gpt) RK Development RK LH RK SLC MK AH RK EW LH Grade Source: Optimized Life of Mine Plan Press Release February 20,

30 FLOWSHEET 30

31 Annual LOM Production Profile Source: Optimized Life of Mine Plan Press Release February 20, 2018 OPEN PIT MINING Units Total/ Avg Open Pit Ore ktonnes 19,022 2,579 3,078 1,553 2,317 1,976 1, ,039 1, Au Grade Mined gpt Au Mined from Open Pit kounces 1, Open Pit Waste ktonnes 169,376 22,071 22,472 24,067 19,416 8,880 8,465 8,640 8,943 8,705 8,622 8,984 9,577 9, Open Pit Material Moved ktonnes 188,397 24,650 25,550 25,620 21,733 10,855 9,562 9,460 9,627 9,745 9,717 9,942 10,399 10,439 1,098 Strip Ratio UNDERGROUND MINING Ore Mined - Rory's Knoll ktonnes 20, ,332 1,506 1,714 1,725 1,714 1,720 1,738 1,707 1,704 1,748 1,677 1,349 Au Grade Mined gpt Au Mined from Rory's Knoll UG koz 1, Ore Mined - Satellites koz 2, Au Grade Mined gpt Au Mined from Satellites UG koz Total Au Mined koz 3, PROCESSING Tonnes Milled ktonnes 43,047 2,355 2,738 2,745 2,738 2,738 2,738 2,745 2,738 2,738 2,738 2,745 2,738 2,738 2,738 2,745 2,337 Throughput Rate tpd 7,400 6,500 7,500 7,500 7,500 7,500 7,500 7,500 7,500 7,500 7,500 7,500 7,500 7,500 7,500 7,500 6,400 Mill Feed Average Grade gpt Recovery % 94.8% 92.1% 95.4% 95.6% 95.8% 96.1% 95.2% 95.0% 95.4% 95.1% 95.3% 94.6% 93.9% 94.9% 93.3% 93.3% 93.1% Total Au Recovered kounces 3,

32 Annual LOM Cost Profile Source: Optimized Life of Mine Plan Press Release February 20, 2018 FINANCIALS Units Total/ Avg Revenue $mlns 4, NSR Royalty (8%) $mlns Site Operating Costs $mlns 1, Sustaining Capital $mlns Deferred Stripping $mlns Expansion Capital $mlns Mill Expansion $mlns UG Mining $mlns Other $mlns Total Capital Costs $mlns Total Site Costs $mlns 2, AISC $mlns 3, Pre-tax Cash Flow $mlns 1, NPV (5%) (pre-tax) $mlns 1,142 Tax $mlns NPV (5%) (after tax) $mlns 898 Operating Cash Cost¹ $/oz Operating Cash Cost (incl Royalty)¹ $/oz AISC¹ $/oz

33 BOARD & SENIOR OFFICERS Alan Ferry Lead Director Patrick Sheridan Jr. Founder, Executive Chairman and Director Scott A. Caldwell President & CEO and Director Michael Richings Director Rene Marion Director Wendy Kei Director Jean-Pierre Chauvin Director Geologist that has been Involved in the investment industry for over 28 years as a mining analyst and a mining corporate finance specialist. Over 25 years of experience in the mining industry Has actively explored in Guyana since 1996 and is the founder of Guyana Goldfields and lead the discovery of the Aurora and Sulphur Rose deposits Mining engineer with 35+ years experience building and operating gold and base metal mines worldwide Former President, CEO and Director of Allied Nevada Gold Corp. from years of development and operational experience in the resource sector. Mr. Richings is currently the Chairman of the Board for Vista Gold, where he also served as CEO from 2007 to years of diversified management and senior technical experience with resource industry expertise in operations, mineral exploration, and mine development, along with a successful history of corporate development. Chartered Professional Accountant and previously served as CFO of Dominion Diamond Corporation (formerly Harry Winston). 40+ years of combined experience in mining operations and construction management. David Beatty Director Daniel Noone VP, Exploration 25+ years of financial capital markets and resource management experience. Over 25 years of experience of international mineral exploration and development Former VP of Peru for Aquiline Resources Paul J. Murphy Executive VP, Finance & CFO Over 40 years of financial experience and former Head of PricewaterhouseCoopers LLP Western s World Mining Practice 33

34 SCIENTIFIC, TECHNICAL AND SECURITIES INFORMATION Scientific and Technical Information The compilation of the Optimized LOM Plan was completed by Tysen Hantelmann, P.Eng. and Gord Doerksen, P.Eng of JDS Mining. By virtue of their education, membership to a recognized professional association and relevant work experience, Tysen Hantelmann and Gord Doerksen are independent Qualified Persons as defined by National Instrument and have reviewed, approved and verified the technical content of this news release. The mineral reserve estimates were prepared under the supervision of Tysen Hantelmann, P.Eng. and Gord Doerksen, P.Eng of JDS Mining. Mr. Hantelmann and Mr. Doerksen are a qualified person under NI and is independent of the Company. The mineral resource estimate for Rory s Knoll was prepared under the supervision of Tim Maunula, of T. Maunula & Associates Consulting. Mr. Maunula is a qualified person under NI and is independent of the Company. The mineral resource estimates for the satellite deposits was prepared under the supervision of Danial Noone of Guyana Goldfields Inc. Daniel Noone is a qualified person under National Instrument and has also reviewed the contents of this press release. Securities Laws This presentation does not constitute an offer or solicitation to buy or sell any securities discussed herein in any jurisdiction where such would be prohibited. This presentation is not an offer to sell, or a solicitation of an offer to purchase, any securities in the United States. The securities referred to in this presentation will not be registered under the U.S. Securities Act of 1933 and may not be offered or sold in the United States except pursuant to an exemption from the registration requirements of the U.S. Securities Act of 1933 and applicable state securities laws. The information contained in this presentation does not and is not intended to constitute a "valuation," "formal valuation," "appraisal," "prior valuation," or a "report, statement or opinion of an expert" for purposes of any securities legislation in Canada or otherwise. Currency Unless otherwise indicated, all dollar values herein are in United States dollars. 34

35 Jacqueline Wagenaar VP, IR & Corporate Communications Tel: (416) x