Excellon Resources Inc. · TSXV:EXN
Excellon Resources — Merger or Acquisition (January 2023)
28 slides from Excellon Resources's merger presentation, Jan 9, 2023
Slide 1: La Negra Mine Acquisition Overview
Excellon Resources Inc. LA NEGRA MINE ACQUISITION January 9, 2023 OVERVIEW TSX:EXN | NYSE:EXN | FRA:E4X2 www.excellonresources.com
Slide 2: Cautionary Statements
CAUTIONARY STATEMENTS Forward Looking Statements All statements, other than statements of historical fact, contained or incorporated by reference in or made in giving this presentation and responses to questions, including any information as to the future performance of the Company or its projects,
Slide 3: Transformative Acquisition for Excellon
LA NEGRA MINE | ASSET SUMMARY Transformative Acquisition for Excellon NEAR-TERM DE-RISKING EXPLORATION MULTI-COMMODITY RESTART STRATEGY UPSIDE EXPOSURE Past producing asset1, Development plan to Potential for Provides direct exposure with potential for de-risk mine restart significant mineral to cri
Slide 4: Acquisition of La Negra Mine: Summary of Key Terms
ACQUISITION OF LA NEGRA MINE* Summary of Key Terms 100% SHARE TRANSACTION STRUCTURE CAPITAL RAISE AND DEBENTURE TRANSACTION PROVIDES FLEXIBILITY RESTRUCTURING Upfront consideration payment in Equity payments minimize cash Private placement for a minimum equity: constraints of US$10 million • US$20m
Slide 5: Transaction Structure: Supportive Equity Partners
TRANSACTION STRUCTURE | SUPPORTIVE EQUITY PARTNERS INITIAL PAYMENT Delivers the operational US$20 million equity “know-how” payment up front CONSIDERATION 100% equity, new cash going “in-the-ground” Becomes a strategic partner of Excellon. Querétaro-based PARTNERSHIP infrastructure company, focus is
Slide 6: Excellon Corporate Strategy
EXCELLON CORPORATE STRATEGY ✓ Three year plan, to become a consolidator of silver and base metals CORPORATE assets, supported by strong capital provider (Orion). STRATEGY ✓ Assets that have the potential to gain from an experienced operational management team and oversight. EXCELLON VALUE ✓ Initial
Slide 7: Excellon Management and Directors
EXCELLON MANAGEMENT AND DIRECTORS Wide breadth of experience Board of Directors Management Laurie Curtis Brendan Cahill Shawn Howarth Daniel Hall Independent (Chair) Non-Independent Director, President & CEO Chief Financial Officer Craig Lindsay Zoya Shashkova Paul Keller Jorge Ortega Non-Independen
Slide 8: La Negra, Mexico – Top Silver Producing Country Worldwide
LA NEGRA, MEXICO – Top Silver Producing Country Worldwide Within Mexico’s Superhighway – Carbonate-Related Mineral Deposits Mexican Central Skarns Belt MEXICO’S SILVER BELT LARGE SCALE Average of 10-15M tonnes of ore with the largest well in excess of 50M tonnes HIGH GRADE Important skarn developmen
Slide 9: La Negra Overview: Fully permitted 3,000 tpd mine in central Mexico
LA NEGRA OVERVIEW Fully permitted 3,000 tpd mine in central Mexico La Negra Querétaro/Hidalgo SILVER-LEAD-ZINC-COPPER ▪ 82,878 ha property, 90km NE of state capital Querétaro. MEXICO Skarn Pb-Zn-Ag-Cu deposit in the Sierra Gorda range La Negra ▪ Underground infrastructure, mining fleet, 3,000 t/d pr
Slide 10: La Negra Overview: Past producer, near-term restart potential
LA NEGRA OVERVIEW Past producer, near-term restart potential Mining: 2022 PEA ▪ Long-hole open stoping, and mechanized room and pillar ▪ Planned stope geometry – 20m H x 20m L x 6m W ▪ Stable ground conditions – no geotech issues (no ground support required) ▪ Skilled local workforce with 50+ years
Slide 11: PEA Summary: Achievable mine plan and production levels
PEA SUMMARY Achievable mine plan and production levels PEA Summary Unit Value LOM Production and AISC Summary1,2 Mine Life Years 7.4 $19.14 LOM Tonnage kt 6,223 $13.96 $13.64 $13.55 $12.47 $12.10 Silver (Ag) Grade g/t 63 $10.21 Lead (Pb) Grade % 0.46 $6.27 3,263 3,212 3,296 3,464 3,028 3,034 Zinc (Z
Slide 12: Capable of a Successful Restart
LA NEGRA IS CAPABLE OF A SUCCESFUL RESTART Achievable restart plan, critical prep work to “restart ready” LA NEGRA: THROUGHPUT AND GRADE ✓ Past producing mine HISTORICAL PEA ▪ Capable of +800 Kt / +2,500 tpd mine production OPERATIONS ESTIMATES 1.0 Tonnes Milled 961 Kt 120 ✓ Supported by recent dril
Slide 13: PEA Summary: LOM production summary
PEA SUMMARY LOM production summary Year 1 Mineralization Year 2 Expansion Potential Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 RESTART AREAS Facing North (Yr1-3) Mineralization Expansion Potential 13 TSX/NYSE: EXN Source: La Negra Technical Report. See Cautionary Statements on Technical Disclosures a
Slide 14: Near-Mine Exploration Potential
NEAR-MINE EXPLORATION POTENTIAL Unconstrained mineralization with a clear resource growth path ▪ Inferred resource is mostly unconstrained, with high potential to add near-infrastructure tonnes ▪ Mineralization is open – not structurally constrained ▪ Minimal interdomain drilling between Natalia and
Slide 15: Property Potential: La Colorada Skarn Analogue
PROPERTY POTENTIAL La Colorada Skarn Analogue La Negra - Currently defined vertical extent of 990 meters, La Colorada (Pan American Silver) - Currently defined suggesting a significant potential to expand mineralization at depth vertical extent is greater than 1,500 meters Source: Pan American Silve
Slide 16: 12 to 18-Month Development Plan
12 TO 18-MONTH DEVELOPMENT PLAN Mine restart by an experienced operator Figures in 000’s USD Estimate ▪ Excellon development plan: 12 to 18 month period; advancing La Negra beyond the PEA Detail Engineering (tailings / basin) $1,800 Infill drill program $750 ▪ US$10M budget to advance La Negra and o
Slide 17: Pro Forma – Capital Structure (Illustrative)
PRO FORMA – CAPITAL STRUCTURE (ILLUSTRATIVE) Excellon Transaction On Transaction ▪ Orion, M Grupo and early conversion of debentures Today Adjustments Close being provided equity in Excellon at the same share Shares Equity Shares Shares Assumptions: % % price of C$0.48 Excellon share price C$0.48/sh
Slide 18: Pro Forma – Peer Positioning
PRO FORMA – PEER POSITIONING Attractive valuation, re-rate potential Market Capitalization Mexican-Focused Silver Producers (US$M) Globally-Focused Silver Producers $8,007 $3,438 $3,326 $2,212 $1,544 $1,091 $994 $700 $615 $519 $475 $435 $283 $130 $113 $104 $87 $80 $38 $12 Fortuna Andean Majestic End
Slide 19: "New Excellon" Transformational transaction
“New Excellon” Transformational transaction ✓ La Negra: fully permitted, past-producing asset, 12 to 18-month development plan. ✓ Returns Excellon to producer status on accelerated timeline, operational readiness targeted by 2024. ✓ Critical mineral exposure: silver, copper, zinc and lead ✓ Historic
Slide 20: Appendix
APPENDIX @EXCELLON
Slide 21: La Negra Overview: Location and Summary
LA NEGRA OVERVIEW Location and Summary 1 Ownership ▪ 99.99% held, with a single share held by a private individual ▪ Municipality of Cadereyta, near the town of Maconi, State of Querétaro, Location central Mexico - 90km from the capital of the State México ▪ 15 mineral concessions covering ~ 83,000
Slide 22: La Negra Overview: Local Geology
LA NEGRA OVERVIEW Local Geology ▪ The deposit is hosted in La Negra facies of the El Doctor Formation, a thick package of carbonates, that was folded during the Laramide Orogeny and later subjected to crustal extension, which led to normal faulting Intrusive Contact ▪ At least three intrusive phases
Slide 23: La Negra Overview: Fully permitted 3,000 tpd mine
LA NEGRA OVERVIEW Fully permitted 3,000 tpd mine in central Mexico La Negra Querétaro/Hidalgo SILVER-LEAD-ZINC-COPPER Prior longhole stoping Stores, Office, Lab and Medical Geology and Maintenance Temporary TSF 1 Water Storage Reclaimed TSF 5 Closed TSF 3 Active Surge TSF 5a Active 0 500 Plunge +25
Slide 24: La Negra Overview: PEA LOM production summary
LA NEGRA OVERVIEW PEA LOM production summary 1 LOM Tonnage and Grade Summary Revenue by Metal1 146.32 111.71 119.14 116.90 119.93 126.34 ▪ La Negra produces four payable commodities: Ag, Zn, 110.31 99.96 Cu and Pb 843 843 843 843 843 843 843 ▪ Using the metal prices stated in the PEA, La Negra’s LOM
Slide 25: PEA LOM concentrate production and grade
LA NEGRA OVERVIEW PEA LOM concentrate production and grade 1 LOM Lead Production and Grade NSR 0.5 0.5 0.5 0.7 0.8 0.2 0.2 0.3 ▪ NSR is modelled in the PEA as US$72.2/t 9,220 8,334 5,747 6,347 ▪ LOM NSR US$449.2M 3,624 3,569 1,920 2,201 ▪ Gold has consistently been reported with lead and copper conc
Slide 26: NPV sensitivity
LA NEGRA OVERVIEW NPV sensitivity NPV5% At Various Price Sensitivities (US$m) Figures in US$m Source: La Negra Technical Report. See Cautionary Statements on Technical Disclosures at the end of this presentation. 1. PEA Pricing based on the following: - Ag: $22.50/oz (Y1-Y2), $22.13/oz (Y3), $22.00/
Slide 27: Excellon Overview: Diversified asset base
EXCELLON OVERVIEW Diversified asset base Kilgore & Oakley GOLD DEVELOPMENT IDAHO METALS: 825,000 oz Au @ 0.58 g/t Ind. 1 136,000 oz Au @ 0.45 g/t Inf. 1,2 GERMANY Silver, gold, copper, zinc GERMANY and lead COMBINED INDICATED MINERAL RESOURCES4: UNITED STATES Silver City 825,000 oz Au + HIGH GRADE 1
Slide 28: Cautionary Statements Regarding Technical Disclosures
CAUTIONARY STATEMENTS REGARDING TECHNICAL DISCLOSURES Technical information regarding the La Negra project has been provided by Minera La Negra, the holding company for the La Negra project, from the “Technical Report – Preliminary Economic Assessment Study – La Negra Mine”, having an effective date
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