Titan Mining Corp. · TSX:TI
Titan Mining — Investor Presentation (July 2017)
25 slides from Titan Mining's investor presentation, July 2017
Slide 1: The Next Mid-Tier Zinc Producer
THE NEXT MID-TIER ZINC PRODUCER LOW RISK EXECUTION SIGNIFICANT GROWTH POTENTIAL July 2017
Slide 2: Forward Looking Statement
Forward Looking Statement Certain information contained in this presentation constitutes forward-looking statements. All statements, other than statements of historical facts, are forward looking statements including statements with respect to the Company’s intentions for its Empire State Mines (“ES
Slide 3: Titan Mining Corporation: Restarting Production in H2 2017
Titan Mining Corporation Restarting Production in H2 2017 EMPIRE STATE MINES – FULLY PERMITTED, “TURN-KEY” OPERATION IMMEDIATE START-UP PEA SUMMARY (all dollar amounts in US$)1 Minimal restart capital = $10.7M Average 104M lbs of payable zinc per year (yrs 2-6) at C1 costs of $0.63/lb / AISC of
Slide 4: Empire State Mines (formerly Balmat)
Empire State Mines (formerly Balmat) Producing for over 100 years District Production: – 43 M Tons @ 9.4% zinc – >4 M Tons contained zinc Titan controls 100% of >80,000 acres of mineral rights – Last operated by Hudbay 2006-2008 – Purchased by Titan in December 2016 Nearest town is Gouverneu
Slide 5: Mine and Mill Complex
Mine and Mill Complex Mill ‒ 5,000 ton per day capacity No. 4 shaft (adjacent to mill) – 3,800 tpd capacity – All production from 3100 level – Access to 1300, 1700, 2100, 2500 and 3100 levels No. 2 shaft and hoist provides second egress Shops, warehouse, offices, changerooms, drys 5
Slide 6: Surface Infrastructure in excellent condition
Surface Infrastructure…. Click to edit Master text styles − Second level …in excellent condition 6
Slide 7: Underground equipment, shop and warehouse ready
Underground equipment, shop and warehouse ready… Click to edit Master text styles − Second level Faces in ore ready for blasting! 7
Slide 8: PEA Summary
PEA Summary STRONG OPERATING PROFILE ROBUST IRR & SHORT PAYBACK OPERATING HIGHLIGHTS (all dollar amounts in US$) FINANCIAL HIGHLIGHTS (all dollar amounts in US$) Unit Value Unit Value Mine life Pre-production capital $M 10.7 years 8 Total LOM capital $M 69.2 Tons mined Mt 4.3 NSR (net of royalties)
Slide 9: PEA Sensitivities to NPV 8% (Post-Tax)
PEA Sensitivities to NPV8% (Post-Tax) 250.0 200.0 SUMMARY OF ECONOMIC RESULTS Indicator Unit Value NPV (US$M) 150.0 After-Tax NPV @ 0% $M 175 100.0 NPV @ 8% $M 123 IRR % 99 50.0 Payback years 1.5 0.0 80% 90% 100% 110% 120% % Change from PEA Zinc Price Head Grade OPEX CAPEX Assumptions 80% 90% 100% 1
Slide 10: Cost Reduction: Move to Lower Quartile
Cost Reduction: Move to Lower Quartile Change Market Perception of Being a Swing Producer Rigorous grade control • On-shift grade control geologist • Don’t chase incremental ore • Implement technology to allow crews to follow the resource • Tighter stope design Other cost reduction initiatives:
Slide 11: Empire State Mines Exploration & Growth Strategy
Strong EBITDA Growth Potential1 Through plans to fill the 5,000 TPD mill Empire State Mines Exploration & Growth Strategy 5000 Regional Advanced Targets/New Satellite Annual EBITDA Potential 4500 Deposits PHASE 3 5,000 TPD GAP zone 4000 • • Sully discovery Phase 3: $114 M 3500 • VTEM targets Produ
Slide 12: Phase 1 – In-Mine Expansion (1,800 TPD)
Phase 1 – In-Mine Expansion (1,800 TPD) Mahler Hole # Grade Width #2366 Zn (%) 2366 9.6 3.5’ TW 1097-F 13.4 11’ New 847-F 10.8 11.5’ TW #2052-F NE Fowler Fold 2372-F 11.9 6’ Mud Pond 2052-F 13.9 4.5’ TW #1097-F’ #847-F Davis Sylvia Lake #2372-F’ OPEN – No Drilling Cal Marble Shaft 12
Slide 13: Phase 2 – Expand Throughput to 3,000 TPD
Phase 2 – Expand Throughput to 3,000 TPD This mineralization will be evaluated and compiled with the goal of adding a further 1,200 tpd HISTORIC RESERVES1 REMNANTS POTENTIAL Zinc Historic Production Area Tons Grade Mlbs 43Mt (9.4% Zn) and 75% extraction recovery 1992 Balmat 1998 Hyatt Mine 590,000
Slide 14: Phase 3 – Ultimate Goal to Fill the Mill at 5,000 TPD
Phase 3 – Ultimate Goal to Fill the Mill at 5,000 TPD Successful exploration of in-mine exploration and regional/district targets to add another 2,000 tpd Brownfield targets New Opportunities – “GAP” zone between ESM & Hyatt mines – Untested geophysical targets generated from 2008 VTEM – Sully
Slide 15: Exploration: Success Through Data Integration
Exploration: Success Through Data Integration Exploration history has been hampered by lack of comprehensive programs, changes in ownership Digitize historical data Many mines have been (re) discovered by examining historic data. Some examples include: Red Lake-Dickenson (Goldcorp) Sigma-L
Slide 16: Zinc Market Outlook – Strong Fundamentals
Zinc Market Outlook – Strong Fundamentals Global growth in zinc demand is expected to continue to accelerate with booming urban development ‒ demand is forecast to maintain a growth trend of 3-4% per year for next few years Zinc forecast to be in deficit for the Zinc Supply/Demand foreseeable fu
Slide 17: Management
Management Richard Warke founded Augustagroup in 2006 when he started Ventana Gold, Augusta Resource Corp., and Arizona Richard W. Warke Mining. The group now includes NewCastle Gold and Titan Mining. Ventana Gold was sold for C$1.6 billion and Augusta President & CEO was sold for C$666 million. Mr.
Slide 18: Directors
Directors Richard Warke founded Augustagroup in 2006 when he started Ventana Gold, Augusta Resource Corp., and Arizona Richard W. Warke Mining. The group now includes NewCastle Gold and Titan Mining. Ventana Gold was sold for C$1.6 billion and Augusta Exec. Chairman was sold for C$666 million. Mr. W
Slide 19: Investment Highlights
Investment Highlights Highly Experienced, Proven Board and Management Team 1 Fully permitted, well maintained infrastructure = LOW EXECUTION RISK 2 Simple path to IMMEDIATE production 3 Historical reserves and remnants available to fill unused processing capacity 4 Numerous regional targets already
Slide 20: Appendices
APPENDICES 20
Slide 21: Mineral Resources
Mineral Resources MEASURED INDICATED M&I INFERRED Mineralized Zone tons % Zinc tons % Zinc tons % Zinc tons % Zinc Mahler 400,500 15.89 700,900 15.27 1,101,400 15.50 516,600 15.59 New Fold 68,000 12.75 249,600 11.72 317,600 11.94 539,400 13.97 Mud Pond 336,700 10.40 273,900 10.89 610,600 10.62 392,9
Slide 22: Initial Capital Cost
Initial Capital Cost Item Cost US$M Surface Infrastructure 0.9 Underground Rehabilitation & Construction 1.0 Equipment Purchase and Refurbishment 1.1 First Stores 0.3 ERP/Computers 0.2 Engineering/EPCM 0.2 General 0.2 Contingency (10%) 1.0 Subtotal Refurbishment 4.9 Capital Development 3.8 Capitaliz
Slide 23: Zinc Prices vs Days of Reported Stocks
Zinc Prices vs Days of Reported Stocks Last time stocks approached 10 days (~10 years ago), zinc prices started to gap higher (reached +$2.00/lb) 23 Sources: LME, SHFE, Wood Mackenzie, Scotiabank GBM
Slide 24: Global Physical Zn Premiums Remain at Elevated Levels
Global Physical Zn Premiums Remain at Elevated Levels SHFE/LME Zn arb is now at $275/t – equating to a $0.12/lb price premium in China Sources: Metal Bulletin and Scotiabank GBM Base Metals Research 24
Slide 25: Low Treatment Charges = Market Tightness
Low Treatment Charges = Market Tightness Spot treatment charges have declined to $50/ton PEA assumes treatment charge of $150/ton for ESM concentrate Sources: Wood Mackenzie, Scotiabank GBM 25