Arizona Sonoran Copper Co., Inc.

Arizona Sonoran Copper — Investor Presentation (November 2021)

36 slides from Arizona Sonoran Copper's investor presentation, November 2021

  1. Slide 1: Corporate Presentation – November 2021

    ASCU:TSX Corporate Presentation – November 2021 COPPER Invest in Sustainability

  2. Slide 2: Cautionary Information

    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-lookin

  3. Slide 3: Management Team with Proven Track Record

    Management Team with Proven Track Record STRONG SPONSOR SUPPORT George Ogilvie, P.Eng. Ian McMullan, P.Eng., MBA Rodney Prokop, CPA, MBA Rita Adiani, LLB Hons President, CEO & Director COO CFO SVP Strategy & Corporate Development • Investment advisor to three +30 years of management, +25 years of mi

  4. Slide 4: Experienced Board of Directors

    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 ope

  5. Slide 5: The Cactus Mine Project’s Path to Restarting Operations

    The Cactus Mine Project’s Path to Restarting Operations Sacaton Begins US$20M ASARCO Remediation ARIZONA SONORAN COPPER COMPANY Production Complete Next 1964 1974 1984 2019 2019 2020 2021 Steps Sacaton Production Suspends • Purchases • Issues PEA • Declaration • PFS and FS Studies Discovery Commence

  6. Slide 6: Why ASCU?

    Why ASCU? Brownfield, Scalable Development Private Landownership = Project in Tier 1 Jurisdiction Lower risk permitting process • 100% ownership of Arizona-based past producing • State-and-County Led Permitting Framework mine with in place infrastructure ✓ Water Permit received (access to water) • M

  7. Slide 7: Capital Structure & Current Ownership

    Capital Structure & Current Ownership Capital Structure As at November 16, 2021 Ownership Shares Outstanding (M)(1) 69.8 Management, RCF Warrants (M) 6.7 6% Directors, Employees & Options (M) 1.7 Consultants Tembo 5% 38% RSU’s (M)(2) 1.2 Fully Diluted Share Capital (M) 79.4 Other & Retail 30% Cash U

  8. Slide 8: Our ESG Framework – Setting the Pace for Net Zero Carbon Emissions

    Our ESG Framework – Setting the Pace for Net Zero Carbon Emissions ▪ ASCU is actively exploring use of renewable energy for its operations including development of an onsite solar farm ▪ Ability to further reduce carbon footprint by Arizona Public Service’s transition to renewable resources (65% by

  9. Slide 9: Journey Towards Net Zero

    Journey Towards Net Zero Production and Reporting • Establishing reporting KPIs • Reporting to international standards (e.g. SASB, TCFD) Construction PFS / FS • Investment in low carbon • Design parameters used to scope technologies and minimizing direct impacts (Scope 1 & 2) • Energy efficiencies (

  10. Slide 10: Located At The Intersection Of Arizona’s Three Copper Porphyry Belts

    Located At The Intersection Of Arizona’s Three Copper Porphyry Belts Arizona is the USA's leading copper-producing state which accounted for 74% of domestic output of copper in 2020(1) Cactus Project and Parks/ Salyer Deposit Arizona ranked No. 2 for the year 2020 in Fraser Institute’s Investment At

  11. Slide 11: Cactus Site Overview - +4,600 acres

    Cactus Site Overview - +4,600 acres ASCU:TSX ARIZONASONORAN.COM 11

  12. Slide 12: Cactus Site – Brownfield Advantage with Ready Access to Infrastructure

    Cactus Site – Brownfield Advantage with Ready Access to Infrastructure Powerline and onsite substation connected to Arizona Public Service Electric Historic data, core shack, maps etc. Power substation Vent raise and u/g development to historic orebody Rail spur (to ship concentrate to refinery) Sha

  13. Slide 13: Key Permits in Place – Process with Definitive Timelines

    Key Permits in Place – Process with Definitive Timelines ▪ Private land ownership supports State & County level permitting process with a streamlined process ▪ No federal nexus Permit Permit Office Status/Expected Completion Air Quality Permit Pinal County Renew yearly Arizona Pollution Discharge El

  14. Slide 14: Open Pit and Underground Mining

    Open Pit and Underground Mining OPEN PIT LAYBACK UG PORTAL FROM OPEN PIT Year Pre-stripping and waste removal Year In-pit UG development starts (assumes 24 pit benches mined) 1 6 Open-pit stripping from years 1-4 with some material reporting Year 6 - Twin Decline, 10,000 ft (3,048 m) to leach pads (

  15. Slide 15: Cactus Production Schedule – Heap Leach & SX/EW Processing

    Cactus Production Schedule – Heap Leach & SX/EW Processing CACTUS PRODUCTION SCHEDULE(1)(2) 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 Recovered Cu Short Tons 35,000,000 35,000 Mined

  16. Slide 16: Robust Returns from Lowest Capital Intensity vs Peer Group

    Robust Returns from Lowest Capital Intensity vs Peer Group INITIAL CONSTRUCTION COST CONSTRUCTION CAPEX BREAKDOWN (US$M) BREAKDOWN US$124M Direct & Indirect Leach Pads, SXEW Total Cost Components Ponds & Pipelines Facility Capital Cost Directs Subtotal $18.4 $45.9 $64.3 18% Indirects Subtotal $3.1 $

  17. Slide 17: Robust Project Economics

    Robust Project Economics KEY PROJECT METRICS (1)(2) Over LOM Mine Life 18 years Average Production 28 ktpa (56Mlbs) Operating Costs • Avg OPEX over LOM (US$/t milled) • US$9.06/ton • Avg C1 Cost over LOM (US$/lb) • US$1.55/lb • Avg AISC over LOM (US$/lb) • US$1.88/lb (incl. royalty) Capex • Initial

  18. Slide 18: Positive Initial Metallurgical Testwork

    Positive Initial Metallurgical (Bottle Roll / Column Leach) Testwork AVERAGE METALLURGICAL 01 Simple heap-leach/SXEW process considered for 1.3 billion pounds of leachable copper (LOM) PERFORMANCE CRITERIA Net Net Gross Copper Net Acid Resource Source Copper Acid Recovery Consumption Component Infor

  19. Slide 19: Multi-Billion Pound Starter Mineral Resource Base

    Multi-Billion Pound Starter Mineral Resource Base • Leachable resource: • 1.1Blbs Indicated • 1.2Blbs Inferred • Leachable Stockpile included at no mining cost, CACTUS & STOCKPILE – TOTAL CONTAINED COPPER: • 224Mlbs contained Cu Indicated Resource– 1,610,700k lbs Inferred Resource– 1,978,800k lbs Mi

  20. Slide 20: Cactus Leachable-Only Mineral Resource Estimate

    Cactus Leachable-Only Mineral Resource Estimate Grades Significantly Increase Underground OPEN PIT - UNDERGROUND - STOCKPILE - LEACHABLE RESOURCE Indicated Resource – 1,065,900 Klbs Inferred Resource –1,211,300 Klbs Open Pit & Stockpile Underground Indicated & Inferred Leachable Resource Indicated &

  21. Slide 21: Significant In-Pit Upside Potential

    Significant In-Pit Upside Potential Mineral Resource Expansion and Process Optimization Included in PEA Economics 51% of Leachable material from PEA*: • Low-risk resource conversion 18 yr LOM & ~US$1 billion FCF drilling underway • Existing PEA pit shell run at OPTIMIZATION EVIDENCE OF US$2.27/lb Cu

  22. Slide 22: PEA Base Case: Open Pit and Underground

    PEA Base Case: Open Pit and Underground ASCU:TSX ARIZONASONORAN.COM 22

  23. Slide 23: Historic and Current Cactus Mine Project Drilling

    Historic and Current Cactus Mine Project Drilling ASCU:TSX ARIZONASONORAN.COM 23

  24. Slide 24: PFS and DFS Drilling Program

    PFS and DFS Drilling Program • Over 30,000 m of drilling targeted: • 15,000 m at Cactus West targeting 100% conversion of Inferred Resource to the Indicated Resource category within the PEA pit shell • 4,000 m at Cactus East targeting 100% conversion of Inferred Resource to the Indicated Resource ca

  25. Slide 25: Significant Open Pit Upside Within Existing PEA Pit Shell - Cactus West

    Significant Open Pit Upside Within Existing PEA Pit Shell - Cactus West • PEA pit shell optimizations for the Cactus West resource reflect a US$2.27/lb copper price (based on the cashflows generated using a US$3.15/lb copper price) • There is potential room to expand the PEA inventory through: • imp

  26. Slide 26: Mineral Resource Growth Opportunities Beyond Cactus Mine

    Mineral Resource Growth Opportunities Beyond Cactus Mine ASCU:TSX ARIZONASONORAN.COM 26

  27. Slide 27: Organic Expansion Potential – Parks/Salyer

    Organic Expansion Potential – Parks/Salyer PARKS/SALYER HIGHLIGHTS ✓ Down trend from Cactus, Parks/Salyer exhibits the same geological characteristics ✓ Horst structure ✓ North of the chalcopyrite/ pyrite zone boundary ✓ Coincident with historic IP anomalies ✓ Drilling indicates mineralization impro

  28. Slide 28: Opportunities to Replicate Cactus Ore Body – NE Orientated Long Section

    Opportunities to Replicate Cactus Ore Body – NE Orientated Long Section 4 KM STRIKE LENGTH NE Extension Hole- id From (ft) To (ft) Length (ft) TCu (%) Mineral Zone 1,016.5 1,044.5 28.0 1.27 oxide 1,078.5 1,125.8 47.3 0.95 oxide 1,161.0 1,208.8 47.8 3.05 oxide S-68 1,275.0 1,290.1 15.1 1.96 enriched

  29. Slide 29: Benchmarking ASCU to Copper Developers

    Benchmarking ASCU to Copper Developers 1.01x 1.00x P/NPV Market Cap $139 PEA NPV8% $312 0.71x Peer Average: 0.70x P/NAV 0.59x 0.58x 0.55x (Analyst Consensus Nav) 0.44x 0.48x 0.35x P/NPV Incl. Post IPO Net Cash FDITM Market Capitalization (US$M) $139(1) $570 $218 $1,264 $348 $557 $305 $436 Asset Name

  30. Slide 30: Key Investment Highlights

    Key Investment Highlights • Our Core Values Are Supported by an ESG Framework • Copper Market Fundamentals Are Strong • Mature Capital Structure • Experienced Leadership Team and Board with a Proven Track Record • Brownfield, Scalable Development Project in Tier 1 Jurisdiction • Robust Project Econo

  31. Slide 31: Investor Relations Contact

    Alison Dwoskin, CPIR Director, Investor Relations adwoskin@arizonasonoran.com +1 (647) 233-4348 (cell) George Ogilvie, P.Eng President, CEO & Director gogilvie@arizonasonoran.com +1 (416) 723-0458 (cell) www.arizonasonoran.com | www.cactusmine.com

  32. Slide 32: Appendix

    Appendix ASCU:TSX ARIZONASONORAN.COM 32

  33. Slide 33: General Site Arrangement

    General Site Arrangement Sources/Notes: 3D rendering of Figure 16-10 of Integrated Cactus PEA ASCU:TSX ARIZONASONORAN.COM 33

  34. Slide 34: Simple Heap Leach & SXEW Flowsheet

    Simple Heap Leach & SXEW Flowsheet • Leach material mined from the Stockpile Project and new mining operations will be placed in 20 ft (6 m) lifts on lined heap leach pads • The initial oxide materials pad is 8.5 million ft2 (790 thousand m2) to hold approximately 40 Mt of leach material (2-3 years

  35. Slide 35: Integrated Cactus PEA Summary

    Integrated Cactus PEA Summary Assumption / Outcome Value / Results(1) Copper Price MARKET US$3.35/lb CAPITALIZATION Total Mineralized Material Moved 179 Mt (US$M) Annual Average Processing Rate Over LOM 10 Mtpa Stockpile Project: CuAS: 90%, CuCN: 40% Average Recovery Rates Over LOM OP / UG: CuAS: 90

  36. Slide 36: Strong Copper Market Fundamentals

    Strong Copper Market Fundamentals Consistent Rising Demand from Key Sectors Supply Constraints To Meeting Primary Demand in Medium Term 50 Total Copper Consumption Forecast by Industry, 2000-2040 35 45 Base Case Production Capability 40 30 35 25 Primary Demand Copper (Mt) 30 Copper (Mt) 25 20 20 15

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