Arizona Sonoran Copper Co., Inc.
Arizona Sonoran Copper — Investor Presentation (September 2022)
52 slides from Arizona Sonoran Copper's investor presentation, September 2022
Slide 1: Corporate Presentation – September 2022
ASCU:TSX ASCUF:OTCQX Corporate Presentation – September 2022 COPPER Invest in Sustainability
Slide 2: Cautionary Information
Cautionary Information This presentation (“Presentation”) is being furnished on a confidential basis in order to provide readers certain information with respect to the business and operations of Arizona Sonoran Copper Company Inc. (the “Company” or “ASCU”). This presentation contains forward-lookin
Slide 3: Management Team with Proven Track Record
Management Team with Proven Track Record STRONG SPONSOR SUPPORT George Ogilvie, P.Eng. Ian McMullan, P.Eng., MBA Nick Nikolakakis, BASc, MBA Rita Adiani, LLB Hons President, CEO & Director COO VP Finance and CFO SVP Strategy & Corporate Development • Private equity fund investing in +30 years of man
Slide 4: Experienced Board of Directors
Experienced Board of Directors David Laing, B.Sc. Eng Thomas Boehlert, ICD.D George Ogilvie, P.Eng. Chair of the Board of Directors Director President, CEO & Director +40 years experience in the mining industry with roles across +30 years in the agribusiness, mining & energy. Experienced finance ope
Slide 5: Capital Structure & Ownership
Capital Structure & Ownership CAPITAL STRUCTURE OWNERSHIP Rio Tinto Retail 7% 19% Market Capitalization (M) C$150M Management Shares Outstanding (M) 88.7 6% Tembo 35% Warrants (M) 6.6 Other Options (M) 2.9 6% RSU’s (M)(1) 0.3 Insitutional DSU’s (M) 0.4 27% Fully Diluted Share Capital (M) 98.9 Includ
Slide 6: ASCU – Well-financed Development Asset with Low Capital Intensity
ASCU – Well-financed Development Asset with Low Capital Intensity Brownfield Exploration and Development Private Landownership = Project in Tier 1 Jurisdiction Lower risk permitting process • 100% ownership, Arizona-based past producing mine • Streamlined State-and-County led permitting framework (1
Slide 7: The Cactus Project: A Low-Risk Growth Opportunity
The Cactus Project: A Low-Risk Growth Opportunity RECENTLY COMPLETED UPCOMING DE-RISKING • Drilling • Project Financing • Strategic Investor (Rio Tinto) Cactus drilling (FS) Subject to PFS and FS • No debt Parks/Salyer drilling (Expl.) outcomes • Permitting • Technical Studies • Construction • Infil
Slide 8: Our ESG Framework – Setting the Pace for Net Zero Carbon Emissions
Our ESG Framework – Setting the Pace for Net Zero Carbon Emissions ▪ ASCU is actively exploring use of renewable energy for its operations with the goal of becoming a “Net Zero Carbon Emissions” copper producer ▪ Ability to also reduce carbon footprint by Arizona Public Service’s transition to renew
Slide 9: Journey Towards Net Zero - Partnership with Minviro
Journey Towards Net Zero - Partnership with Minviro Production and Reporting • Establishing reporting KPIs PFS / FS Construction • Reporting to international • Design parameters used to scope impact standards (e.g. SASB, TCFD) • Investment in low carbon technologies and minimizing • GHG inventory as
Slide 10: Located At The Intersection Of Arizona’s Three Copper Porphyry Belts
Located At The Intersection Of Arizona’s Three Copper Porphyry Belts Arizona is the USA's leading copper-producing state which accounted for 71% of domestic output of copper in 2021(1) Cactus Project and Parks/ Salyer Deposit Santa Cruz Arizona ranked No. 5 for the year 2021 in Fraser Institute’s In
Slide 11: Local Support for the Cactus Mine
Local Support for the Cactus Mine Overwhelming support for the Cactus Mine in Casa Grande – economic survey shows $8.5 Billion of indirect and direct revenues to the local community. Probably Support GOP: 93.0% Support 82.6% Dem: 66.7% Support Don't Know, Refused Support PND: 84.4% Support Definitel
Slide 12: Key Permits in Place – Streamlined Process with Definitive Timelines
Key Permits in Place – Streamlined Process with Definitive Timelines Permitting complete for now; key PFS inputs will inform remaining permits Permit Permit Office Status Air Quality Permit Pinal County Complete (annual renewal) Arizona Pollution Discharge Elimination System (402) – Cactus ADEQ Comp
Slide 13: Cactus Site Overview – Infrastructure, permits and a significant resource
Cactus Site Overview – Infrastructure, permits and a significant resource ASCU:TSX | ASCUF:OTCQX ARIZONASONORAN.COM 13
Slide 14: Cactus Site – Brownfield Advantage with Ready Access to Infrastructure
Cactus Site – Brownfield Advantage with Ready Access to Infrastructure Powerline and onsite substation connected to Arizona Public Service Electric Historic data, core shack, maps etc. Power substation Vent raise and u/g development to historic orebody Rail spur (to ship concentrate to refinery) Sha
Slide 15: Part of a World Class District - Multi-Billion Pound Starter Mineral Resource
Part of a World Class District - Multi-Billion Pound Starter Mineral Resource MINERAL RESOURCES CACTUS & STOCKPILE – TOTAL CONTAINED COPPER: • Leachable Resource: Makes up the PEA and upcoming PFS mine plan Indicated Resource– 1,610,700k lbs Inferred Resource– 1,978,800k lbs • Primary Resource: Part
Slide 16: Current Drilling Programs
Current Drilling Programs Parks/Salyer Drilling at 250 ft centres (indicated category) • 105,000 ft (24,384 m) • Program to be complete by year-end Cactus Drilling at 125 ft centres (measured category) • 60,000 ft (18,288 m) - infill drilling • 12,000 ft (3,650 m) - planned expansion • Drilling to r
Slide 17: Detailed Leachable-Only Mineral Resource Estimate
Detailed Leachable-Only Mineral Resource Estimate Grades Significantly Increase Underground LEACHABLE MINERAL RESOURCE • UG high-grade contributing to economics Indicated Resource: 1,065,900 Klbs Inferred Resource: 1,211,300 Klbs • Maiden Reserves expected with PFS - Open Pit & Stockpile Underground
Slide 18: Cactus PEA Production Schedule – Opportunity beyond 40 kstpa (80 Mlbs)
Cactus PEA Production Schedule – Opportunity beyond 40 kstpa (80 Mlbs) CACTUS PRODUCTION SCHEDULE(1)(2) Heap Leach & SX/EW Processing 55,000,000 55,000 Organic Growth Opportunities: 50,000,000 In-Pit and Near-Pit Optimization 50,000 Parks/Salyer 45,000,000 NE Extension 45,000 40,000,000 40,000 Recov
Slide 19: Robust PEA Base Case Project Economics
Robust PEA Base Case Project Economics KEY PROJECT METRICS (1)(2) Over LOM Mine Life ~1B lbs of Cu over 18 years Average Production 28 ktpa (56Mlbs); Peaks at 40 ktpa (80Mlbs) Operating Costs • Avg OPEX over LOM (US$/t milled) • US$9.06/ton • Avg C1 Cost over LOM (US$/lb) • US$1.55/lb • Avg AISC ove
Slide 20: Leachable Material: Positive Ongoing Metallurgical Results
LEACHABLE MATERIAL: Positive Ongoing Metallurgical (Bottle Roll / Column Leach) AVERAGE METALLURGICAL PERFORMANCE CRITERIA Simple heap-leach/SXEW process 01 considered for 1.3 billion pounds of leachable copper (LOM) Preliminary Column Tests (PEA) Updated Column Tests 2 years of met test work contin
Slide 21: Potential to Rescope Cactus PFS to include P/S and Build Scale
Potential to Rescope Cactus PFS to include P/S and Build Scale NON-CACTUS POTENTIAL GROWTH OPPORTUNITIES 1) Parks/Salyer additions 2) Primary sulphide leaching (NutonTM/Rio Tinto) Cactus & P/S In-process Cactus & P/S FS In-process Parks/Salyer NutonTM Results Complete Cactus MRE Complete Cactus PFS
Slide 22: Opportunities to Build Scale and Potential Pipeline for Future Operations
Opportunities to Build Scale and Potential Pipeline for Future Operations Primary Resources NutonTM testwork 1 Parks/Salyer Exploration 2 provides optionality to potentially process B’ Target potential to underpin Cactus production pipeline substantial B PARKS/SALYER CACTUS WEST CACTUS EAST NE EXT B
Slide 23: Cactus East FS Level Infill Drilling Supporting Current Model
Cactus East FS Level Infill Drilling Supporting Current Model S-37 August 30 Press Release Assays Pending 250 ft (76 m) 500 ft (152.4 m) ASCU:TSX | ASCUF:OTCQX ARIZONASONORAN.COM Press Release dated August 30, 2022 23
Slide 24: Cactus East Cross Section, Looking Northwest
Press Release dated August 30, 2022 Cactus East Cross Section, Looking Northwest ECE-073 ECE-069 ECE-058 S-37 S-42 A’ A ECE-072 ECE-073 ECE-069 344.0 ft @ 1.07% CuT, 247.0 ft @ 1.73% CuT, 0.82% Cu TSol 1.63% Cu TSol Incl. 101.7 ft @ 1.95% CuT, Incl. 90.0 ft @ 2.99% CuT, 1.89% Cu TSol 2.80% Cu TSol C
Slide 25: Parks/Salyer Potential for Scalable UG Deposit for Cactus Expansion
Parks/Salyer Potential for Scalable UG Deposit for Cactus Expansion ▪ 24 hole exploration drill program completed 500 ft centres may be used to calculate an inferred copper resource ▪ New 105,000 ft (32,000 m) infill drilling program underway 250 ft centres may be used to update potential resources
Slide 26: Parks/Salyer Plan View
Press Release dated September 7, 2022 Parks/Salyer Plan View A’ S-158 ECP-077 ECP-081 ECP-087 ECP-071 ECP-083 ECP-096 ECP-075 ECP-074 ECP-089 ECP-057 ECP-045 ECP-084 ECP-088 ECP-093 ECP-080 ECP-018 ECP-019 ECP-086 ECP-094 B B’ Previously Reported ECP-065 ECP-061 ECP-042 ECP-079 ECP-092 September 7 P
Slide 27: Parks/Salyer Cross Section (Looking West)
Press Release dated August 23, 2022 Parks/Salyer Cross Section (Looking West) A A’ ECP-080 ECP-081 S-201 ECP-065 ECP-074 ARIZONA SONORAN IVANHOE ELECTRIC Conglomerate 253.7 ft @ 1.34% CuT, Fault 1.30% Cu Tsol, 0.011% Mo Leached Incl. 111.2 ft @ 1.79% CuT, 1.75% Cu Tsol, 0.013% Mo 130.0 ft @ 0.74% Cu
Slide 28: Parks/Salyer East West Cross Section (A-A’)
Parks/Salyer East A West Cross Section (A-A’) A’ ECP-092 A ECP-086 ECP-065 ECP-079 ECP-061 ECP-042 ECP-061 131.6 ft @ 1.17% CuT, Pending) (Assays Pending) (Assays 1.06% Cu Tsol, 0.004% Mo Conglomerate 474 ft @ 0.89% CuT, ECP-079 0.83% Cu Tsol, 0.026% Mo 479 ft @ 1.32% CuT, Leached/ 0.90% Cu Tsol, 0.
Slide 29: Rediscovering the World-Class Santa Cruz Copper Porphyry System
Rediscovering the World-Class Santa Cruz Copper Porphyry System Drilling the same porphyry copper system, Ivanhoe Electric ARIZONA SONORAN starting at Santa Cruz and extending northeast to Sacaton Northeast IE and ASCU land position connected at Parks/Salyer CACTUS ASCU – 2 drills active (1 pending)
Slide 30: Value Proposition: Low-Risk Copper Developer in Top Tier Jurisdiction
Value Proposition: Low-Risk Copper Developer in Top Tier Jurisdiction $0.20 $0.18 $0.17 $0.17 $0.16 ✓ Water access and permits in place $0.14 ✓ Streamlined permitting process (private land) ✓ No Federal nexus $0.12 ✓ Social license to operate EV/lb CuEq (US$/lb) $0.10 ✓ Sizable resource ✓ Opportunit
Slide 31: Copper Development Peers (P/NAV)
Copper Development Peers (P/NAV) 2025 2029 2026 2025 2026 2025 2027 n/a 0.80x 0.73x 0.70x 0.60x 0.56x 0.52x 0.50x 0.49x 0.45x Peer Average: 0.45x 0.40x P/NAV 0.40x 0.30x 0.26x 0.20x 0.14x 0.10x 0.00x FOM NGEX FIL MARI AMC ASCU TMQ FDY Source: Company Filings, Capital IQ, September 6, 2022 ASCU:TSX |
Slide 32: Key Investment Highlights
Key Investment Highlights • Our Core Values Are Supported by an ESG Framework • Long-term Copper Market Fundamentals are Strong • Mature Capital Structure • Experienced Leadership Team and Board with a Proven Track Record • Brownfield, Scalable Development Project in Tier 1 Jurisdiction • Robust Pro
Slide 33: Alison Dwoskin, CPIR Director, Investor Relations
Alison Dwoskin, CPIR Director, Investor Relations adwoskin@arizonasonoran.com +1 (647) 233-4348 (cell) George Ogilvie, P.Eng President, CEO & Director gogilvie@arizonasonoran.com +1 (416) 723-0458 (cell) www.arizonasonoran.com | www.cactusmine.com
Slide 34: Appendix
Appendix ASCU:TSX | ASCUF:OTCQX ARIZONASONORAN.COM 34
Slide 35: Robust Returns from Lowest Capital Intensity vs Peer Group
Robust Returns from Lowest Capital Intensity vs Peer Group PEA CONSTRUCTION CAPEX BREAKDOWN (US$M) Direct & Indirect Leach Pads, SXEW Total Between the PEA and the upcoming Prefeasibility study, Cost Components Ponds & Pipelines Facility Capital Cost Directs Subtotal $18.4 $45.9 $64.3 ASCU has been
Slide 36: Primary Material: Strategic Investment with Rio Tinto and Nuton
PRIMARY MATERIAL: Strategic Investment with Rio Tinto and NutonTM PARTNERSHIP The aim of the partnership is to unlock the value of primary, chalcopyrite-dominated, sulphide material via deployment of Rio Tinto’s NutonTM technologies and further add to the long-term, large-scale future profile of the
Slide 37: The Cactus Mine Project’s Path to Restarting Operations
The Cactus Mine Project’s Path to Restarting Operations Sacaton Begins US$20M ASARCO Remediation ARIZONA SONORAN COPPER COMPANY Production Complete 2019/ Next 1964 1974 1984 2019 2021 2022 Steps 2020 Sacaton Production Suspends • Purchases • Declaration • Bolsters Board • PFS and FS Studies Discover
Slide 38: Benchmarking ASCU to Copper Developers
Benchmarking ASCU to Copper Developers Market Capitalization (US$M) $112M $1.5B $1.0B $452M $393M $245M $201M $187M $96M $42M $42M Santa Cruz / Cu Creek / Asset Name Cactus Filo del Sol McIlvenna Bay Kay Los Helados Marimaca Casino Arctic Copperwood Tintic Contact Cu Economic Study Level PEA PFS Res
Slide 39: Junior Copper Producer Benchmarking (Enterprise Value and Production)
Junior Copper Producer Benchmarking (Enterprise Value and Production) $3,000 200 180 $2,500 160 $2,230 140 $2,000 Annual Production (Mlbs CuEq) 120 EV (US$M) $1,500 Company Goal: 100 Peak PEA Production: 80 $1,000 60 $566 $532 40 $500 $343 $278 20 $177 $81 $0 0 Capstone Copper Taseko Mines Copper Mo
Slide 40: Open Pit and Underground Mining
Open Pit and Underground Mining OPEN PIT LAYBACK UG PORTAL FROM OPEN PIT Year Pre-stripping and waste removal Year In-pit UG development starts (assumes 24 pit benches mined) 1 6 Open-pit stripping from years 1-4 with some material reporting Year 6 - Twin Decline, 10,000 ft (3,048 m) to leach pads (
Slide 41: Parks/Salyer – Ionic Leach Survey (2019)
Parks/Salyer – Ionic Leach Survey (2019) April 5, 2022 ECP-045 Previously Reported April 5 - Press Release ECP-057 Assays Pending ECP-018 ECP-019 ASCU Property Line ECP-065 Ionic Leach CuT (ppb) 0 to 1,000 ECP-042 1,000 to 2,000 2,000 to 3,000 3,000 to 4,000 4,000 to 6,000 > 6,000 S-201 S-200 41 ASC
Slide 42: General Site Arrangement
General Site Arrangement Sources/Notes: 3D rendering of Figure 16-10 of Integrated Cactus PEA ASCU:TSX | ASCUF:OTCQX ARIZONASONORAN.COM 42
Slide 43: Announced C$35M | US$27M Non-Brokered PP (upsized from C$30.5M)
Announced C$35M | US$27M Non-Brokered PP (upsized from C$30.5M) Cornerstone Strategic Investments by Rio Tinto and NutonTM and Tembo Capital (non-brokered) Intensify Exploration at Cactus and Parks/Salyer Increasing Drilling at Parks/Salyer, with target of a maiden mineral resource in Q4 22 Metallur
Slide 44: Strategic Investment with Rio Tinto and Nuton
Strategic Investment with Rio Tinto and NutonTM PARTNERSHIP The aim of the partnership is to unlock the value of primary, chalcopyrite-dominated, sulphide material via deployment of Rio Tinto’s NutonTM technologies and further add to the long-term, large-scale future profile of the Project. Rio Tint
Slide 45: Simple Heap Leach & SXEW Flowsheet
Simple Heap Leach & SXEW Flowsheet • Leach material mined from the Stockpile Project and new mining operations will be placed in 20 ft (6 m) lifts on lined heap leach pads • The initial oxide materials pad is 8.5 million ft2 (790 thousand m2) to hold approximately 40 Mt of leach material (2-3 years
Slide 46: Integrated Cactus PEA Summary
Integrated Cactus PEA Summary Assumption / Outcome Value / Results(1) Copper Price MARKET US$3.35/lb CAPITALIZATION Total Mineralized Material Moved 179 Mt (US$M) Annual Average Processing Rate Over LOM 10 Mtpa Stockpile Project: CuAS: 90%, CuCN: 40% Average Recovery Rates Over LOM OP / UG: CuAS: 90
Slide 47: Significant In-Pit Upside Potential
Significant In-Pit Upside Potential Mineral Resource Expansion and Process Optimization Included in PEA Economics 51% of Leachable material from PEA*: • Low-risk resource conversion 18 yr LOM & ~US$1 billion FCF drilling underway • Existing PEA pit shell run at OPTIMIZATION EVIDENCE OF US$2.27/lb Cu
Slide 48: PFS Drilling Complete - Upgrade Inferred to Indicated Resource w/in Mine Plan
PFS Drilling Complete - Upgrade Inferred to Indicated Resource w/in Mine Plan Drilling below from May 2, 2022 PR OPEN Inferred Indicated Cactus East Cactus West ASCU:TSX | ASCUF:OTCQX ARIZONASONORAN.COM 48
Slide 49: Extending Mineralization Beyond the PEA Pit Outline
Extending Mineralization Beyond the PEA Pit Outline - Planned FS Drilling - ECW-023 - 60,000 ft (18,288 m) ECW-029 15.3m of 0.695% CuTsol 34.3m of 0.774% CuTsol - infill drilling - 12,000 ft (3,650 m) - planned expansion ECW-029 ECW-023 Source/Notes: As per news release issued on November 17, 2021 w
Slide 50: Expanding Underground Leachable Mineralization
Expanding Underground Leachable Mineralization Planned 2022 drilling • Hole ECE-021, extended mineralization 61 m (200 ft) east • Follow up will be conducted to confirm the continuity of of the current mineral resource shell the high-grade zone to the north and east adjacent to the East fault. • Lea
Slide 51: Potential to Expand Existing Mineral Resource Base
Potential to Expand Existing Mineral Resource Base Sources/Notes: 3D Rendering of Table 1-2 of Integrated Cactus PEA. The Integrated Cactus PEA is preliminary in nature, it includes inferred mineral resources that are considered too speculative geologically to have economic considerations applied to
Slide 52: Strong Copper Market Fundamentals
Strong Copper Market Fundamentals Consistent Rising Demand from Key Sectors Supply Constraints To Meeting Primary Demand in Medium Term 50 Total Copper Consumption Forecast by Industry, 2000-2040 35 45 Base Case Production Capability 40 30 35 25 Primary Demand Copper (Mt) 30 Copper (Mt) 25 20 20 15
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