Andean Precious Metals Corp · TSX:APM
Andean Precious Metals — Merger or Acquisition (November 2023)
30 slides from Andean Precious Metals's merger presentation, Nov 27, 2023
Slide 1: Acquisition of Golden Queen Mining, LLC
BUILDING A MULTI-ASSET MID-TIER AMERICAS-FOCUSED PRECIOUS METALS PRODUCER TSX-V: APM OTCQX: ANPMF Acquisition of Golden Queen Mining, LLC November 27, 2023 2023 1
Slide 2: Legal Disclaimers
Legal Disclaimers This presentation is informational purposes only and is solely to isolation or as a substitute for measures of performance prepared Risk Factors assist interested parties in determining whether to seek additional in accordance with IFRS. Non-GAAP/non-IFRS measures The Company’s act
Slide 3: Forward-Looking Statements
Forward-Looking Statements Certain statements and information contained in this number of material factors and assumptions, including, but not information included in this presentation has been prepared by, presentation constitute forward-looking information or forward- limited to: the Company’s abi
Slide 4: Forward-Looking Statements (continued)
Forward-Looking Statements (continued) Some of the risks and other factors which could cause actual exploration; risks related to the uncertain global economic Mining Consultants Inc., Tucson AZ. results to differ materially from those expressed in the forward- environment; and other factors contain
Slide 5: Historical Mineral Resource and Mineral Reserve Estimates
Historical Mineral Resource and Mineral Reserve Estimates Scientific and technical information relating to the Golden Reserves dated May 10, 2014). The key assumptions, Andean has engaged Kappes, Cassiday & Associates, Queen Mining project contained in this document has parameters and methods used t
Slide 6: Alberto Morales
Alberto Morales Executive Chairman & CEO 2023 6
Slide 7: Game Changing Acquisition: Golden Queen
Game Changing Acquisition: Golden Queen U S A Soledad Mountain, owned by Golden Queen, is a turnkey producing asset with a strong management located in mining-friendly Kern County, CA $5M upfront cash consideration (plus net working capital adjustments) and no immediate equity dilution gives Andean
Slide 8: Compelling Transaction Rationale
Compelling Transaction Rationale Turnkey Asset in • Established open pit gold mine and heap leach operation with a seasoned management team. • Kern County is a tier one mining jurisdiction with a proven track record of supporting mining operations. Mining Friendly Region • Golden Queen grandfathered
Slide 9: Transaction Summary
Transaction Summary Transaction Deal Structure Funding Closing Conditions • Through its wholly owned • Total consideration as follows: • First $5M plus net working capital • Membership Interest Purchase subsidiary, Soledad adjustments paid from Andean’s Agreement ̶ $5M paid plus net working capital
Slide 10: Expanding Andean’s Footprint in the Americas
Expanding Andean’s Footprint in the Americas Soledad Mountain San Bartolomé (Production – California, US) (Production – Potosi, Bolivia) Mine type Open pit Mine type Open pit & material purchases Processing Heap leach Processing Oxide plant 2023E production(1) 4.8 - 5.2 Moz AgEq Average annual produ
Slide 11: Juan Carlos Sandoval
Juan Carlos Sandoval CFO 2023 11
Slide 12: Soledad Mountain: Open Pit Heap Leach Au & Ag Mine
Soledad Mountain: Open Pit Heap Leach Au & Ag Mine Soledad Mountain Ownership 100% owned Tenement package ~1,100 hectares Geology Multi-episodic, epithermal, low sulphidation deposit Conventional open pit 12,000 tpd heap leach (blasting and Mining and processing methods hauling) Power Connected to t
Slide 13: Soledad Mountain Site Overview
Soledad Mountain Site Overview Primary Crusher Agglomeration Plant Coarse Ore Stockpile Conveyer Belt Laboratory and Leach Pad Secondary Crushing and Screening 2023 13
Slide 14: Adding to Our Mineral Reserve and Resource Base
Adding to Our Mineral Reserve and Resource Base 2P Reserves M&I (including 2P) Inferred Moz AgEq(1) Moz AgEq(1) Moz AgEq(1) 86.9 61.9 4.6 Golden Queen Golden Queen Golden Queen 2023 *See “Historical Mineral Resource and Mineral Reserve Estimates” (slide 5). 1. Production gold and silver equivalent c
Slide 15: Andean’s Silver Equivalent Production is Expected to Increase
Andean’s Silver Equivalent Production is Expected to Increase Andean Historical Annual Production Golden Queen Historical Annual Production (koz AgEq1) (koz AgEq1) Silver (koz Ag) Gold (koz AgEq) Gold (koz AgEq) Silver (koz) 5,896 5,791 5,531 423 433 4,946 285 5,001 4,837 4,622 213 486 658 4,239 502
Slide 16: Targeting Potential Near to Mid-Term Cost Savings
Targeting Potential Near to Mid-Term Cost Savings Blasting Costs Outside Consulting Services • Successfully negotiate a lower $/ton • Streamline third-party professional fees including full-service blasting Truck Leases Procurement Contracts • Site management has signed new truck • Renegotiate certa
Slide 17: Exploration Upside Potential
LEGEND Exploration Upside Potential Current Topography Project Boundry Reserves Pit Resources Pit Sheeted Vein Zone N Soledad/Starlight SE Extension Target Zone 1 Alphason Target Zone • New resource estimate defined from drilling in PHASE 1 Sheeted Vein Target Landon Clay Target 2022 LEACH PAD Soled
Slide 18: Attractive Acquisition Multiples
Attractive Acquisition Multiples Attractive Multiples EV / 2023E Production EV / 2P Reserves ($/oz) ($/oz) • Golden Queen acquisition multiple is 55% less than the current median 2023E production multiple of junior gold producers* • Golden Queen acquisition multiple is 71% $2,457 less than the curre
Slide 19: Significant Re-Rate Opportunity
Significant Re-Rate Opportunity Enterprise Value vs. Production (Moz AgEq) 1,400 EV/Production Multiple ORL $/oz (Bubble Size) 1,200 $100/oz $50/oz 1,000 $25/oz KNT Enterprise Value ($M) MAG 800 WDO SIL 600 VGCX EDR KRR 400 GATO MUX SVM 200 FTCO CERT MND * GORO - ELVT (200) - 2 4 6 8 10 12 14 16 202
Slide 20: Fully Funded Acquisition
Fully Funded Acquisition Andean Pro Forma Pre-closing Andean as at Sept 30, 2023 as at Nov 24, 2023 Liquid Assets* Liquid Assets* • $5 million initial consideration plus net working capital paid by Cash Andean from cash on hand $88.1M ~$81.1M • $5M payable in either cash or Andean common shares Ande
Slide 21: Acquisition Adds $133.4M in Net Assets
Acquisition Adds $133.4M in Net Assets Golden Queen: Purchase Price Allocation ($M) (based on Golden Queen audited year end balance sheet as at Dec 31, 2022) Assets Accounts receivable 1.9 Prepaid expenses and deposits 1.0 Inventory 79.0 Supplies 4.8 Property, plant & equipment 115.6 Restricted cash
Slide 22: Alberto Morales
Alberto Morales Executive Chairman & CEO 2023 22
Slide 23: Exciting Value Creation Opportunity
Exciting Value Creation Opportunity Highly Compelling Established Tier One Attractive Acquisition Rationale Production Profile Jurisdiction & Deal Structure with Potential with Upside Multi-Asset Producer Preserves Cash Re-Rate Opportunities 2023 23
Slide 24: Advancing Our Vision
Advancing Our Vision EXTEND OPERATING LIFE Building a Mid-Tier • Exploration Precious Metals • Convert resources Producer Focused • Supply contracts on the Americas PRODUCTION Soledad Mountain (USA) PRODUCTION San Bartolomé (Bolivia) 2023 24
Slide 25: Q&A
Q&A 2023 25
Slide 26: Appendix
APPENDIX 2023 26
Slide 27: Golden Queen: Historical Mineral Resource Estimate
Golden Queen: Historical Mineral Resource Estimate* Mineral Resource Statement Effective Date: January 31, 2022 In-Situ Grade Contained Metal Mineral Resources Gold Silver Gold Silver Classification Tonnes Tons g/t oz/ton g/t oz/ton oz oz Measured 3,815,000 4,205,000 1.17 0.034 14.06 0.41 143,000 1,
Slide 28: Golden Queen: Historical Mineral Reserve Estimate
Golden Queen: Historical Mineral Reserve Estimate* Mineral Reserve Statement Effective Date: April 28, 2022 Mineralization Contained (In-Situ) Grade Contained Metal ` Metric Imperial NSR Gold Silver Gold Silver (ktonnes) (ktons) ($/ton) (gpt) (opt) (gpt) (opt) (oz) (oz) Proven 3,007 3,315 46.8 1.19
Slide 29: Qualified Persons Statement (Golden Queen)
Qualified Persons Statement (Golden Queen) The following people served as the Qualified Persons for Golden Queen as defined in National Instrument 43- 101 – Standards of Disclosure for Mineral Projects, and in compliance with Form 43-101F1: Carl E. Defilippi Michael M. Gustin Joseph C. McNaughton Ge
Slide 30: Building a Multi-Asset Mid-Tier Americas-Focused Precious Metals Producer
BUILDING A MULTI-ASSET MID-TIER AMERICAS-FOCUSED PRECIOUS METALS PRODUCER TSX-V: APM OTCQX: ANPMF For more information, please contact 2023 Trish Moran at tmoran@andeanpm.com 30
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