Spanish Mountain Gold Ltd. · TSXV:SPA

Spanish Mountain Gold — Investor Presentation (March 2020)

27 slides from Spanish Mountain Gold's investor presentation, March 2020

  1. Slide 1: Spanish Mountain GOLD

    Spanish Mountain GOLD March 2020 TSX-V : SPA | OTC : SPAZF

  2. Slide 2: Cautionary Statements

    Cautionary Statements Certain of the statements and information on this presentation constitute “forward-looking statements” or “forward-looking information”. Forward- looking statements or information are subject to a variety of known and unknown risks, uncertainties and other factors that could ca

  3. Slide 3: Highlights

    Highlights  Located in mining friendly jurisdiction + excellent access & infrastructure  Advance stage project  $80m+ expenditures Project  900+ drill holes over 180,000 metres  Latest PEA (Dec 2019)  Focused on high-grade/ near-surface M&I resource (Phase 1)  Modest capex + Low OpCost = Very

  4. Slide 4: Current Development Approach

    Current Development Approach Mining Higher-grade, Near-surface Measured & Indicated (M&I) Ounces as Standalone Operations (Phase 1)  Reduced target mill throughput to lower initial capex requirements significantly Lower Capex  Enhance financing options and shorten payback of initial Dec, 2019 PEA

  5. Slide 5: Prioritize Development of Phase 1

    Prioritize Development of Phase 1 Strategic Mine Plan  M&I ounces only  Higher grade/ near-surface Mill Feed Profile Dec, 2019 PEA  Total feed: 39m tonnes PEA pit outline  Avg. Au grade: 1.0 g/t  Total gold: 1.258 Moz Project Scope (Phase 1)  Throughput: 10ktpd  Capex: C$364m/ US$273m  Mine

  6. Slide 6: Low Cost Operations—$549 AISC/oz

    Low Cost Operations—$549 AISC/oz Access & Infrastructure  ~100k highway access to William Lake (major mining supply centre & labour pool)  Abundance of grid power and BC Hydro substation connectivity  Supplies & labour available from many Dec, 2019 PEA surrounding communities Low Milling Cost & S

  7. Slide 7: Project Economics—Phase 1

    Project Economics—Phase 1 Positive Economics Even at Low Gold Price Environment Gold Price Dec, 2019 PEA Pre-tax: Unit $1100 $1200 $1275* $1500 $1600 $1700 $1800 NPV@5% C$mm $232 $336 $414 $648 $752 $856 $960 IRR % 16 20 23 31 34 37 40 Payback of Initial Years 4.3 3.8 3.5 2.8 2.6 2.4 2.2 Capex * PEA

  8. Slide 8: Large & Growing Gold Resource

    Large & Growing Gold Resource M&I Gold Ounces* 4.5 4.0 Million Ounces 3.5 3.0 2.5 2.0 1.5 1.0 0.5 - 2008 2009 2011 2012 2014 2017 2019 Year of Resource Estimate * At economic cut-off grade TSX-V: SPA | OTC : SPAZF 8

  9. Slide 9: Project Timeline

    Project Timeline Y-1 Y-2 Y-3 Y-4 Y-5 PFS/ feasibility study Timeline re-start permitting to Production project finance construction TSX-V: SPA | OTC : SPAZF 9

  10. Slide 10: Summary: One of the Most Compelling Development Projects in Mining

    Summary One of the Most Compelling Development Projects in Mining 1. Jurisdiction Mining friendly/ Excellent access & infrastructure 2. Resource Large & growing/ Scalable development 3. Financial Metrics Modest initial capex + Low OpCost + Excellent economics TSX-V: SPA | OTC : SPAZF 10

  11. Slide 11: More about the Project…

    More about the Project… Location De-risking Activities Resource TSX-V: SPA | OTC : SPAZF 11

  12. Slide 12: British Columbia: Favourable Mining Jurisdiction

    British Columbia : Favourable Mining Jurisdiction  Cheap grid power – 6.5¢/kWh  Among lowest corporate tax rates in Canada Low Cost  Refundable Mineral Exploration Tax Credit (made permanent in 2019) Attracting Major  Barkerville Gold Mines by Osisko G&R for C$ 338 M Investment from  70% of Red

  13. Slide 13: Project Location

    Project Location Pro-mining Jurisdiction  Low political risks/ strong resource sector  Attracted major in-bound investments in recent years  Solid track record of new mine permitting Excellent Mining Infrastructure  Close to producing mines – Gibraltar, QR Mine & Mount Polley  Paved highway acc

  14. Slide 14: Advance Stage Project

    Advance Stage Project  Over $80m in total project expenditures  900+ drill holes over 180,000 metres  Multiple scoping studies completed to Extensive Project maximize project economics/ Highly scalable Work Completed in project Multiple Areas  Environmental baseline study completed and permittin

  15. Slide 15: High Confidence in Metallurgical Recovery

    High Confidence in Metallurgical Recovery  Detailed confirmatory testwork completed  Simple metallurgy and flowsheet  Efficient conventional milling – coarse grind, low power cost and reagent consumption  Overall gold recovery at 91% Crush & Grind Flotation Regrind CIL Location De-risking Activi

  16. Slide 16: Environmental & Permitting

    Environmental & Permitting  Protocol Agreements signed with all three First Nations bands providing a framework towards Impact Benefits Community Agreements Engagement  Long-standing practice of sourcing employees from First Nations and local communities  Archaeological clearance obtained for the

  17. Slide 17: Resource Estimate—Phase 1 vs. Total

    Resource Estimate*—Phase 1 vs. Total Phase 1 processes only a portion (~25%) of M&I resource: 39 million tonnes @ 1.00 g/t = 1,258,000 ounces Tonnes Gold grade Gold Resource Category (Million) (g/t) (Million oz) Measured 30 0.60 0.6 Indicated 244 0.46 3.6 M&I Total 273 0.47 4.1 Inferred 53 0.37 0.6

  18. Slide 18: Mineral Resource

    Mineral Resource Large and Growing  Ensure long-life operations to ride out price cycles  Completed various scoping studies supporting potential viability at different throughput: Development  40,000 tpd Flexibility  20,000 tpd  10,000 tpd Additional  Only 25% of M&I ounces are captured by Pha

  19. Slide 19: Phoenix Zone

    Phoenix Zone  Strike length over 3.5km in length & less than 2km from the Main Zone  Preliminary metallurgical testing suggests material is amenable to same processing flowsheet as Main Zone Location De-risking Activities Resource TSX-V: SPA | OTC : SPAZF 19

  20. Slide 20: Capital Structure

    Capital Structure CASH & CAPITAL STRUCTURE 20%* Net Cash $1 million 55% 25% Shares Issued and 238 million Outstanding Warrants 22 million Retail Institutional Options 9 million Management Market Capitalization $30 million TSX-V: SPA | OTC : SPAZF 20

  21. Slide 21: Experienced Management & High Calibre Board

    Experienced Management & High Calibre Board Industry & Business Management Experience Larry Yau >30 yrs CEO Sharon Ng >20 yrs CFO Judy Stoeterau >30 yrs VP Geology Board of Directors Morris Beattie >45 yrs Chairman  Full biography at: Sara Heston >15 yrs www.spanishmountaingold.com W. Terry Maclean

  22. Slide 22: Contact Information

    Contact Information Spanish Mountain Gold Ltd. 1120-1095 West Pender St. Vancouver, B.C., V6E 2M6 Canada www.spanishmountaingold.com Larry Yau, CEO Tel: +1 (604) 601-3651 Email: info@spanishmountaingold.com or Corporate Communications Tel:+1 (604) 398-4377 TSX-V: SPA | OTC : SPAZF 22

  23. Slide 23: Phase 1 Operations: well below average AISC per oz

    Appendix 1 Phase 1 Operations : well below average AISC per oz $1,200 $1,000 $965 $894 $909 AISC per oz (US$) $800 LOM Avg: $600 $549/oz Medium Producer Large Producer Small Producer (> 1,000 oz/ yr) (< 200 oz/ yr) (> 200 oz/ yr) $400 Phase I First 5 yr Avg: vs. $519/oz $200 $0 Source: CIBC World Ma

  24. Slide 24: World's Top Ten gold development projects with lowest AISC

    Appendix 2 World’s Top Ten: gold development projects* with lowest AISC $700 $1,000m AISC per oz (US$) Initial Capex (US$m) 970m $900m $600 616 609 611 802m 576 579 $800m Initial Capex (US$m) 549 AISC per oz (US$) $500 689m $700m 492 $600m $400 373 374 399 475m vs. $500m $300 $400m $300m 272m 279m 2

  25. Slide 25: Phase 1 Operations: NPV & IRR

    Appendix 3 Phase 1 Operations : NPV & IRR Pre-tax NPV Pre-tax IRR $1,000 50% $900 45% $800 Internal Rate of Return 40% $700 NPV (C$ Million) $600 35% Viable at low $500 gold price 30% $400 25% $300 20% $200 $100 15% $- 10% 1,100 1,200 1,275 1,500 1,600 1,700 1,800 Gold Price (US$) Location De-riskin

  26. Slide 26: Mine Plan—Phase 1

    Appendix 4 Mine Plan—Phase 1 Only Measured & Indicated Resource is Processed Unit Amount Dec, 2019 PEA M&I Mill Feed Mt 39 Gold Grade g/t 1.00 Silver Grade g/t 0.74 M&I Gold Ounces Koz 1,258 M&I Silver Ounces Koz 927 TSX-V: SPA | OTC : SPAZF 26

  27. Slide 27: OpCost Profile—Phase 1

    Appendix 5 OpCost Profile—Phase 1 Input Costs Mining C$/t mined $2.48 Mining $10.73 Processing $6.14 Tailings C$/t milled $0.16 G&A $2.06 Dec, 2019 PEA Total $19.10 Operations Unit Year 1 – 5 Avg. LOM Avg. Gold Grade g/t 1.13 1.00 Recovery % 91 91 Annual Gold Production Koz 116 104 Cash Cost / oz US

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