Arizona Sonoran Copper Co., Inc.
Arizona Sonoran Copper — Investor Presentation (May 2023)
38 slides from Arizona Sonoran Copper's investor presentation, May 2023
Slide 1: Invest in Sustainability
ASCU:TSX ASCUF:OTCQX Invest in Sustainability Developing an Arizona Copper Mine to Supply the Energy Transition May 2023
Slide 2: Cautionary Information
2 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-look
Slide 3: Developing the Next Copper Mine on Private Land in Arizona
3 Developing the Next Copper Mine on Private Land in Arizona To reach the Net Zero emissions goal, 9.7Mt of new copper supply to be added over the next decade. Meaning US$23B investment per year will be needed over 30 years to deliver new copper projects to reach zero-carbon targets. – Wood Mackenzi
Slide 4: Capital Structure & Ownership
4 Capital Structure & Ownership CAPITAL STRUCTURE OWNERSHIP Market Capitalization C$190M 7% Rio Tinto Shares Outstanding (M) 108.6 25% Tembo Warrants (M) 2.9 Insitutional Options (M) 5.6 32% Management RSU’s (M)(1) 0.2 Retail 5% DSU’s (M) 0.5 Fully Diluted Share Capital (M) 117.9 Including: Cash as
Slide 5: Management Team with Track Record of Execution
5 Management Team with Track Record of Execution STRONG SPONSOR SUPPORT George Ogilvie, P.Eng. Ian McMullan, P.Eng., MBA Nick Nikolakakis, BASc, MBA Rita Adiani, LLB Hons • Global leading diversified PRESIDENT, CEO & DIRECTOR COO VP FINANCE AND CFO SVP STRATEGY & CORPORATE metals and mining company
Slide 6: Experienced Board of Directors
6 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 +
Slide 7: Location Advantage
Location Advantage
Slide 8: Low Geopolitical Risk and Community Support
Low Geopolitical Risk and Community Support 8 Centrally located for Accessible Infrastructure and Skilled Labour-force Arizona is the USA's Cactus Project leading copper- and Parks/ Salyer producing state which Deposits accounted for 70% of Development Stage domestic output of Heap-leach, SX/EW copp
Slide 9: A Clear Path to Development with Major Permits in Place
9 A Clear Path to Development with Major Permits in Place COMPLETED PERMITS OUTSTANDING PERMITS – STREAMLINED PROCESS Permit Permit Office Permit Permit Office Status Air Quality Dust Permit Pinal County AZ State Mine Reclamation Bond Inspector Arizona Pollution Discharge Elimination Application pos
Slide 10: Among the Most Developed Independent US Development Copper Assets
10 Among the Most Developed Independent US Development Copper Assets LOW DISCOVERY COST PER POUND SIGNIFICANT INDEPENDENT COPPER DEVELOPMENT ASSETS IN THE USA $0.03 Discovery Cost Per Pound (US$) Global Copper Inventory (Mlbs) 4902 Primary Reserves and Resources $0.02 (Contained Cu - Mt) $0.02 1979
Slide 11: ASCU PFS Base Case
ECN-128 Oxide ASCU PFS Base Case
Slide 12: Brownfield Site – Water rights and Surface Rights
12 Brownfield Site – Water rights and Surface Rights Powerline and onsite substation connected to Arizona Public Service Electric Infrastructure Valued at $100M • Offices, core shack and ancillary buildings • Rail line (to ship concentrate to • Power substation refinery) • Onsite metallurgical testi
Slide 13: PEA Base Case – Cactus Mine
PEA Base Case – Cactus Mine 13 Project Economics + Rescoped Opportunity PEA BASE CASE PROJECT METRICS(1)(2) Cactus Mine’s Oxide and Enriched Material Pending PFS layers in Parks/Salyer and Over the Life of Mine targets 50 ktpa over approximately 30 years Mine Life 1.27 B lbs of Cu over 18 years 28 k
Slide 14: PFS - Base Case Targeting 50 ktpa Operation
PFS - Base Case Targeting 50 ktpa Operation 14 Oxide and Enriched Material Cactus Mine Heap leach, SX/EW Proposed operation Deposit Porphyry copper deposits Private land, brownfields mine site Water rights (up to 3,800 ac ft./yr) and onsite wells PFS Expected Q1 2024, programs include: • 105,000 ft
Slide 15: Positive Metallurgical Programs – Concurrent PFS / FS Columns Ongoing
Positive Metallurgical Programs – Concurrent PFS / FS Columns Ongoing 15 Simple heap-leach and SXEW process for Base Case and Primary Sulphide Optionality with Nuton Met Program Gross Acid Net Acid Cactus Programs complete with favourable (updated May Leach Cycle Recoveries Consumption Consumption 2
Slide 16: First Cathodes Expected in 2026 – Copper Market Support 2025 and Beyond
First Cathodes Expected in 2026 – Copper Market Support 2025 and Beyond 16 Quick Path to Development Task 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 4Q24 2025 2026 2027 Drilling Ongoing exploration and infill Metallurgy Detailed Engineering Pre-Feasibility Permitting Feasibility Study Project Financing 18 m
Slide 17: Beyond the Base Case
Native Copper Beyond the Base Case
Slide 18: Primary Sulphide Optionality
18 Primary Sulphide Optionality Partnership with Rio Tinto’s NutonTM technologies, testing the leachability of the primary sulphides ABOUT NUTONTM • Initial computer modelling showed +72% leaching recoveries of primary sulphides • NutonTM is a proprietary suite of copper leach technologies • • Techn
Slide 19: Scalability via Exploration – Gap Zone and NE Extension
19 Scalability via Exploration – Gap Zone and NE Extension • Layering geophysics and drilling results show IONIC LEACH G/T MAP NE Ext NE Ext compelling drill targets along the 4 km porphyry copper mine trend: • Gap Zone: Gap Gap Zone • Priority target, outlined by ionic leach and Zone magnetics • Hi
Slide 20: Peer Benchmarking
Peer Benchmarking
Slide 21: Path to Value Creation
21 Path to Value Creation Pre-Feasibility Construction Operations ERO Copper In operations Arizona Sonoran Foran Mining 270% Share Price Increase +270% Copper Company Financing and permits in $2,461 M Market Cap hand, in construction PFS expected in 1Q 2024 $966 M NPV* FS expected in 2H 2024 Mostly
Slide 22: Current Copper Development Peers (P/NAV)
Current Copper Development Peers (P/NAV) 22 With Anticipated First Production Dates 2025 2028 n/a 2026 n/a 2026 2030 1.20x 1.08x 1.00x 0.80x 0.68x 0.68x Peer Average: 0.60x P/NAV 0.60x 0.51x 0.45x 0.45x 0.40x 0.33x 0.20x 0.00x FOM FIL IE MARI AMC ASCU FDY Source: Analyst Consensus, Company Filings,
Slide 23: Future Copper Producer Peers (Enterprise Value and Production)
23 Future Copper Producer Peers (Enterprise Value and Production) $5,000 200 400 $4,531 $4,500 180 $4,000 160 $3,500 140 Annual Production (Mlbs CuEq) $3,000 120 EV (US$M) $2,500 $2,409 Prefeasibility Study 100 $2,000 Peak PEA Production: 80 $1,500 60 $1,000 $852 40 $718 $573 $500 $347 20 $170 $139
Slide 24: Key Investment Highlights
Key Investment Highlights 24 A Goal to Provide the US with Locally Sourced Copper Brownfield Private Proposed Copper Building Scalability Experienced Supportive Exploration and Landownership = Heap Leach, SXEW and Growth Leadership Team; Copper Market Development State and County Operation(1)(2) Str
Slide 25: Alison Dwoskin, Investor Relations; George Ogilvie, CEO
Alison Dwoskin, CPIR George Ogilvie, P.Eng Director, Investor Relations President, CEO & Director adwoskin@arizonasonoran.com gogilvie@arizonasonoran.com +1 (647) 233-4348 (cell) +1 (416) 723-0458 (cell) www.arizonasonoran.com | www.cactusmine.com
Slide 26: Appendix
Appendix
Slide 27: Value Proposition: Benchmarking to Copper Developers
Value Proposition: Benchmarking to Copper Developers 27 Low-Risk Copper Developer in Top Tier Jurisdiction $0.30 ✓ Brownfields project, infrastructure in place $0.25 ✓ Large scale mineral resource $0.230 $0.228 base ✓ Streamlined permitting: $0.20 ✓ Water permits in hand ✓ No Federal Nexus EV/lb CuE
Slide 28: Benchmarking ASCU to Copper Developers
28 Benchmarking ASCU to Copper Developers Similar future production profile to ASCU with a P/NAV of 0.45x P/NAV: 1.07x P/NAV: 0.77x Market Capitalization (C$M) $190 $1,536 $198 $1,184 $3,006 $504 $365 $2,461 $568 Cactus / Parks Santa Cruz / Cu Creek / Copper Asset Name McIlvenna Bay Filo del Sol Kay
Slide 29: Infill to Measured: ECE-076 - Oxide, Chrysocolla and Malachite in Granite
March 20, 2023 29 Infill to Measured: ECE-076 - Oxide, Chrysocolla and Malachite in Granite Results Support mine plan 3.08% CuT | 2.93% Cu Tsol | 0.019% Mo High grade interval within a 211 ft (64 m) intersect, at a depth of 1,204 ft (367 m) 1.75% CuT | 1.65% Cu Tsol | 0.012% Mo 250 ft (76 m) 125 ft
Slide 30: The Cactus Mine Project History and Path Forward
30 The Cactus Mine Project History and Path Forward ASARCO Sacaton ARIZONA SONORAN COPPER COMPANY US$20M Remediation Complete 2019/ Next 1964 1974 1984 2019 2021 2022 2023 Steps 2020 Sacaton Production Suspends • Purchases • Declaration • Bolsters Board • Infill drilling - • PFS and FS Studies Disco
Slide 31: Our ESG Framework – Setting the Pace for Net Zero Carbon Emissions
31 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 re
Slide 32: Local Support for the Cactus Mine
32 Local Support for the Cactus Mine Overwhelming support for the Cactus Mine in Casa Grande – economic survey shows $8.5 Billion of indirect and direct revenues to the local community. Probably Support 82.6% GOP: 93.0% Support Don't Know, Refused Dem: 66.7% Support Support PND: 84.4% Support Defini
Slide 33: Journey Towards Net Zero - Partnership with Minviro
33 Journey Towards Net Zero - Partnership with Minviro PFS / FS PRODUCTION AND REPORTING Construction • Design parameters used to scope impact • Establishing reporting KPIs • Investment in low carbon technologies and minimizing • GHG inventory assessment (Scope 1, 2 • Reporting to international dire
Slide 34: Cactus PEA Production Schedule
34 Cactus PEA Production Schedule – Opportunity beyond 40 kstpa (80 Mlbs) CACTUS PRODUCTION SCHEDULE(1)(2) Heap Leach & SX/EW Processing 55,000,000 55,000 Organic Growth Opportunities: 50,000,000 In-Pit and Near-Pit Optimization 50,000 Parks/Salyer 45,000,000 NE Extension 45,000 40,000,000 40,000 Re
Slide 35: Robust Returns from Lowest Capital Intensity vs Peer Group
35 Robust Returns from Lowest Capital Intensity vs Peer Group Between the PEA and the upcoming Prefeasibility study, PEA CONSTRUCTION CAPEX BREAKDOWN (US$M) ASCU is reviewing the following: Direct & Indirect Leach Pads, SXEW Total Cost Components Ponds & Pipelines Facility Capital Cost • Mining inve
Slide 36: Mineral Resource Estimate Table
Material Type Tons (kt) CuT % TSol % Contained Cu (k lbs) Contained Cu (k Tons) INDICATED Cactus Oxide 31,400 0.559 349,700 176 Enriched 42,500 0.844 715,500 359 Total Leachable 73,900 0.723 1,065,200 534 Primary 77,900 0.35 545,500 273 Total Indicated 151,800 0.531 1,610,700 806 INFERRED Cactus Oxi
Slide 37: Notes to the Mineral Resource Estimate
37 Notes to the Mineral Resource Estimate 1. CuT means total copper and Tsol means total soluble copper as the addition of sequential acid soluble and sequential cyanide soluble copper assays. Tons are reported as short tons. 2. Cactus and Stockpile Resource estimates have an effective date of 31 st
Slide 38: Rediscovering the World-Class Santa Cruz Copper Porphyry System
38 Rediscovering the World-Class Santa Cruz Copper Porphyry System Santa Cruz porphyry copper system extends northeast over P/S and beyond the Cactus Mine Project. Ivanhoe Electric ARIZONA SONORAN ASCU – active drilling (3 rigs) - IE – active drilling (6 rigs) Ivanhoe Electric Mineral Resource Estim
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