CORPORATE PRESENTATION. Kerr Mines TSX: KER I OTC: KERMF I FRA: 7AZ1. October 2017

Transcription

1 CORPORATE PRESENTATION Kerr Mines TSX: KER I OTC: KERMF I FRA: 7AZ1 October 2017

2 FORWARD-LOOKING STATEMENTS This presentation contains forward-looking information, including statements regarding: the proposed timing, schedule, and costs for restarting production at the Copperstone Mine, rate of production, expected cash costs, expected increase in milling capacity, exploration potential at the Copperstone Mine, proposed debt restructuring and financing, share capitalization and director ownership,. These forward-looking statements entail various risks and uncertainties that could cause actual results to differ materially from those reflected in these forward-looking statements. Such statements are based on current expectations, are subject to a number of uncertainties and risks, and actual results may differ materially from those contained in such statements. These uncertainties and risks include, but are not limited to, the strength of the economy; the price of gold; operational, funding, and liquidity risks; the degree to which mineral resource and mineral reserve estimates are reflective of actual mineral resources and mineral reserves; and the degree to which factors which would make a mineral deposit commercially viable are present; assumptions with respect to the cost and availability of labour for the restart of operations are correct,; results of exploration and validity of geological models; the risks and hazards associated with underground operations, and any specific risks or assumptions set out or referenced in this presentation. Risks and uncertainties about Kerr Mines Inc. and its business are more fully discussed in its disclosure materials, including the annual information form, technical reports, financial statements and MD&As, filed with the securities regulatory authorities in Canada and available at and readers are urged to read these materials. Kerr Mines Inc. assumes no obligation to update any forward-looking statements or to update the reasons why actual results could differ from such statements unless required by law. This presentation includes certain non-ifrs measures, including cash costs on a per gold ounce basis. Cash costs per gold ounce are defined as costs of production (including refining costs) divided by the total number of gold equivalent ounces produced. The Company reports total cash costs on a production basis. In the gold mining industry, these are common performance measures but do not have any standardized meaning, and are non-gaap measures. As such, they are unlikely to be comparable to similar measures presented by other issuers. In reporting cash costs per gold ounce, the Company follows the recommendations of the Gold Institute standard. The Company believes that, in addition to conventional measures, prepared in accordance with IFRS, certain investors use this information to evaluate the Company s performance and ability to generate cash flow. Accordingly, it is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. Technical information in this presentation has been reviewed and approved by Michael R. Smith P. Geo., who is a qualified person that is independent of the Company, as defined in National Instrument

3 INVESTMENT HIGHLIGHTS Low Risk Past producer existing high grade gold resource Safe, mining-friendly jurisdiction Arizona, USA Production and environmental permits in hand Significant capital infrastructure in place and ready to be utilized 37 employees and contractors currently working at site Near term Upside Resource expansion - Phase I & Phase II drilling Pre Feasibility Study on track & production decision in Q Tremendous exploration potential - 11,800 acres land position including 5 significant targets (South, SW and 3 NE targets) Expertise and Experience Newly formed management group including advisors Enhanced board of directors Supportive Shareholder Base Insiders hold 35% of the company C$8 million raise at C$0.18 per share in July

4 CAPITAL STRUCTURE Ticker Symbol Shares Outstanding Options Warrants Fully Diluted Director/Insider ownership ~35% TSX: KER I OTC: KERMF I FRA: 7AZ million 7.8 million 22.2 million million 52 week range $ $0.41 Recent price* $0.28 Market Cap Cash & short term investments (YE 30 June 2017) Debt** $65.9 million $5.1 million $9.5 million Major Shareholders Fahad Al Tamimi 23.5% Claudio Ciavarella 11.5% Eric Sprott 8.0% * Figures denominated in Canadian dollars **Debt terms: 3 year term at 8% interest, interest waived in first year Friendly debt held by Fahad Al Tamimi and Claudio Ciavarella 4

5 MANAGEMENT Claudio Ciavarella CEO & Director CPA, 25 years private business owner. CEO of Kerr Mines since April, 2017 BOARD OF DIRECTORS Fahad Al Tamimi Chairman Saudi-based businessman with global investments in mining and real estate Martin Kostuik President & Director Chris Hopkins CFO Brad Atkinson Director, Exploration TECHNICAL ADVISORS Michael R. Smith Professional Geologist 25 years mining experience. President of Kerr Mines since April, CEO of Rupert Resources. Operations & Engineering at Barrick s Goldstrike Mine 25 years experience in resource industry. Previously held positions with US Silver, Rio Algom, BHP Billiton, and Suncor 20 years exploration and geology. Formerly with Phelps Dodge, Newmont and CAT Finance 38 years exploration and geology. Previously brought the Arizona Vulture Gold Mine back into production. Magna Cum Laude Arizona State and MS Geology Mackay School of Mines Peter Damouni Director Ayman Arekat Director James McVicar Director Patrick Downey Technical Advisor Investment banking. Led financings valued at more than $5 billion Investment banking with Chase Manhattan, Merrill Lynch, Deutsche Bank Legal specialization in financings, mergers and acquisitions, corporate governance and commercial matters. Director of Monarca Minerals +30 years of international experience in the resource industry. Previously CEO of Elgin Mining Inc 5

6 COMPANY STRATEGY Expand current resources Immediate resource expansion Phase I underground and surface drilling 30,000 feet Phase II underground and surface drilling 45-60,000 feet Production Decision PFS on track for Q Over US$50 million spend on existing infrastructure and underground development increase NPV and IRR Regional Exploration Property Size: 11,800 acres South & SW target follow up drilling NE geophysical target new drill target generation Extend mine life Increase production profile Increase resource ounces Strategic Growth Vision 6

7 EXISTING INFRASTRUCTURE Underground mine development in place, access and utilities 450 tons per day processing plant Tailings storage facility with capacity for existing resource Power and water distribution systems Surface buildings including assay lab Roads and access to surface exploration sites Accelerating Timeframe, Reducing CAPEX 7

8 HISTORIC RESOURCE ESTIMATES* Category Tonnes Grade (g/t Gold) Contained Ounces Measured 934, ,000 Indicated 8, ,000 M&I 942, ,000 Inferred 335, ,000 * Source: NI Technical Feasibility Report Copperstone Project, La Paz County, Arizona dated 01/10/11, independently prepared by Dr. C. Anderson, T. Buchholz, C. Pratt, J. Brown, in accordance with the guidelines of Canadian National Instrument Standards of Disclosure for Mineral Projects 8

9 TIMELINE SIGNIFICANT NEAR-TERM CATALYSTS Permitting Complete Phase I Drilling Q3 Q4 Q1 Q2 Q3 Q4 Phase II Program PFS including Mine Plan Optimization Production Decision Progress towards Production 9

10 SCALE POTENTIAL REGIONAL SIGNIFICANCE NEVADA Detachment Fault Castle Mountain Mineral Park Moss Mine Gold Road Known detachment faultrelated Mineralization ARIZONA Copperstone Mine Mesquite Source: USGS Keith R Long Preliminary descriptive deposit model for detachment fault related model Source: Michael R. Pawlowski P. Geo, January 2005 Schematic cross-section of the Moon Mountain Detachment Fault and the Copperstone Listric Fault (depth unknown), Solid heavy lines are observed faults; broken lines and projected faults 10

11 PHASE I DRILLING PROGRAM Objectives Observations & Achievements Copperstone Zone Establish continuity and enhance resource confidence Expansion of resources along strike with in-fill and down-dip targets Footwall Target Define and validate the Footwall Target as a new gold zone add to resources Establishing zones of mineralization up to 1,500 feet along strike & 600 feet along dip Build on previous successful results Copperstone Zone Enhanced continuity and confirmed reliability of previous drill results Expanded resource and achieved down dip & up dip extension Footwall Zone Successfully established new Footwall Zone To date established 500 feet along strike and 800 feet along dip Demonstrated identical geology to previous successful Copperstone Zone drill holes 11

12 THE COPPERSTONE MINE Historically produced over 500,000 oz in the open pit Enhanced continuity and confirmed reliability of previous drill results Expanded resource and achieved down dip & up dip extension A Zone B Zone Plan to develop access to A,B, C zones C Zone Open down dip along strike D Zone Supports strengthened economics 12

13 NEW MINERALIZED ZONE FOOTWALL ZONE Cross Section View Historic Drilling Phase I Drilling Footwall Zone Selected Intervals Drill Hole # Total Interval 1 (ft) Assay Value (g/tonne Au) A00-10* CS-185* CSD-67* CSR-143* DCU-8* F4-1* H5-147* KER-15-02* KER-15-03* KER-17S KER-17S KER-17S KER-17S Historical 1 not true width 13

14 REGIONAL EXPLORATION SOUTH TARGETS FOOTWALL ZONE EXISTING RESOURCE AND ACCESS South and South West targets have previous successful drilling Intercepts of 8 g/t to 32 g/t over 6-12 feet Detachment fault region SOUTH TARGET SOUTH WEST TARGET 14

15 REGIONAL EXPLORATION UPSIDE South West Target geophysical signature identical to Copperstone and Blue Pearls, supported by previous drilling indicating identical geology, inclination, width and grade to Copperstone North East Blue Pearl Geophysical targets significant strength and similar size to the geophysical anomaly under the Copperstone Orebody. The blue indicates a uniformly magnetic rock with a very slow change in magnetic field. No previous drilling Adding two exploration licenses totalling 541 hectares (1,331 acres) 15

16 PEER GROUP Company Stage Share Price 52 week range Mkt Cap (millions) Production estimates (AuEq koz) Klondex Mines UG Production $ Argonaut Gold Production $ Harte Gold UG Production $ est +50 Marlin Gold Mining Production $ est 45 Mandalay Resources Production $ Pershing Gold OP Development $ est Northern Vertex OP Development $ est 42 Pure Gold UG Development $ est Kerr Mines* UG Development $ est Figures denominated in Canadian dollars as at October 1, 2017 Klondex Mines September 2017 Argonaut Gold Website September 2017 Harte Gold Corporate Presentation September 2017 Marlin Gold Corporate Presentation run rates est October 2017 Mandalay Resources Corporate Presentation September 2017 Pershing Gold Corporate Presentation September 2017 Northern Vertex Corporate Presentation September 2017 Pure Gold Corporate Presentation September 2017 Kerr Mines historical estimate at Copperstone Mine * Source: NI Technical Feasibility Report Copperstone Project, La Paz County, Arizona dated 01/10/11, independently prepared by Dr. C. Anderson, T. Buchholz, C. Pratt, J. Brown, in accordance with the guidelines of Canadian National Instrument Standards of Disclosure for Mineral Projects 16

17 KEY SUMMARY POINTS April 2017 Claudio Ciavarella and Martin Kostuik appointed new CEO and President May 2017 Technical team in place to execute operational plans June 2017 Company closes oversubscribed non-brokered private placement for C$8,000,000 August 2017 Initiation of Phase I exploration program October 2017 Released initial results of Phase I exploration program November 2017 Phase II exploration and engineering program and progress towards production decision Delivering on Strategy 17

18 CONTACT INFORMATION CLAUDIO CIAVARELLA Chief Executive Officer E: T: +1 (416) INVESTOR RELATIONS E: W: