Arizona Sonoran Copper Co., Inc.

Arizona Sonoran Copper — Investor Presentation (January 2022)

40 slides from Arizona Sonoran Copper's investor presentation, January 2022

  1. Slide 1: Corporate Presentation – January 2022

    ASCU:TSX Corporate Presentation – January 2022 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 Nick Nikolakakis, BASc, MBA Rita Adiani, LLB Hons President, CEO & Director COO VP Finance and CFO SVP Strategy & Corporate Development • Investment advisor to three +30 years of manageme

  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: Capital Structure & Current Ownership

    Capital Structure & Current Ownership CAPITAL STRUCTURE as at November 29, 2021 OWNERSHIP Shares Outstanding (M) 70.8 Other Institutional 3% 17% Warrants (M) 6.7 HNWI/Retail 28% Options (M) 1.7 RSU’s (M)(1) 0.2 DSU’s (M) 0.1 Mgmt and Insiders Tembo 8% 38% Fully Diluted Share Capital (M) 79.6 RCF 6%

  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: The Cactus Project: Demonstrating Low Risk Growth Opportunity

    The Cactus Project: Demonstrating Low Risk Growth Opportunity POST-IPO COMPLETE UPCOMING • Drilling (assays pending) 2022 • Technical Studies: • Permitting Cactus drilling PFS in summer 2022 material permits expected Parks/Salyer drilling FS by end of year/early 2023 prior to construction decision •

  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 - Partnership with Minviro

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

  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 - 4,689 acres

    Cactus Site Overview - 4,689 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 – Streamlined Process with Definitive Timelines

    Key Permits in Place – Streamlined Process with Definitive Timelines Permit Permit Office Status/Expected Completion Air Quality Permit Pinal County Complete (annual renewal) Arizona Pollution Discharge Elimination System (402) – Cactus ADEQ Complete Arizona Pollution Discharge Elimination System (4

  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 – Opportunity beyond 40 ktpa

    Cactus Production Schedule – Opportunity beyond 40 ktpa (80 Mlbs) Production CACTUS PRODUCTION SCHEDULE(1)(2) Heap Leach & SX/EW Processing 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

  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 ~1B lbs of Cu over 18 years Average Production 28 ktpa (56Mlbs); Peaks at 40 ktpa (80Mlbs) 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)

  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: Extending Mineralization Beyond the PEA Pit Outline

    Extending Mineralization Beyond the PEA Pit Outline - Planned 2022 Drilling - ECW-023 10,912m (35,800 ft) 15.3m of 0.695% CuTsol ECW-029 34.3m of 0.774% CuTsol - Initial drilling (~3,000 m) demonstrates continuous leachable mineralization including extensions outwards from the modelled pit shell - I

  23. Slide 23: Expanding Underground Leachable Mineralization

    Expanding Underground Leachable Mineralization Planned 2022 drilling (13,411 m | 44,000 ft) • Hole ECE-021, extended mineralization 61 m (200 ft) east • Follow up will be conducted to confirm the continuity of of the current mineral resource shell the high-grade zone to the north and east adjacent t

  24. Slide 24: Potential to Expand Existing Mineral Resource Base

    Potential to Expand Existing Mineral Resource Base Sources/Notes: 3D Rendering of Table 1-2 of Integrated Cactus PEA. The Integrated Cactus PEA is preliminary in nature, it includes inferred mineral resources that are considered too speculative geologically to have economic considerations applied to

  25. Slide 25: Historic and Current Cactus Mine Project Drilling

    Historic and Current Cactus Mine Project Drilling ASCU:TSX ARIZONASONORAN.COM 25

  26. Slide 26: 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

  27. Slide 27: Mineral Resource Growth Opportunities Beyond Cactus Mine

    Mineral Resource Growth Opportunities Beyond Cactus Mine ASCU:TSX ARIZONASONORAN.COM 27

  28. Slide 28: 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

  29. Slide 29: Opportunities to Replicate Cactus Ore Body – NE 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

  30. Slide 30: Benchmarking ASCU to Copper Developers

    Benchmarking ASCU to Copper Developers Market Capitalization $150 $468 $258 $1,485 $319 $549 $296 Asset Name Cactus McIlvenna Bay Los Helados Filo del Sol Marimaca Kay Arctic Economic Study Level PEA PFS Resource PFS PEA Historic FS Development Type (Greenfields or Brownfields) Brownfields Brownfiel

  31. Slide 31: Post IPO Summary: Peer Group Benchmarking P/NAV

    ASCU | Post IPO Summary: Peer Group Benchmarking ASCU Compared to its Peer Group on a P/NAV Basis – First to Production (estimated) Production Start Year 2029 2025 2026 2026 2025 2024 2027 2026 (Estimated) 1.40x 1.19x 1.20x 1.00x 0.88x 0.80x 0.72x Peer Average: 0.71x P/NAV 0.68x 0.60x 0.57x 0.52x 0.

  32. Slide 32: Global Junior Copper Producer Peers – Enterprise Value & Production

    ASCU | Post IPO Summary: Peer Group Benchmarking Global Junior Copper Producer Peers – Enterprise Value & Production $2,000 200 $1,833 $1,800 180 $1,600 160 $1,400 140 Annual Production (Mlbs CuEq) $1,200 120 EV (US$M) $1,000 Company Goal: 100 $829 $817 $800 Peak PEA Production: 80 $707 $600 60 $400

  33. Slide 33: 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

  34. Slide 34: Alison Dwoskin, CPIR Director, Investor Relations

    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

  35. Slide 35: Appendix

    Appendix ASCU:TSX ARIZONASONORAN.COM 35

  36. Slide 36: 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

  37. Slide 37: General Site Arrangement

    General Site Arrangement Sources/Notes: 3D rendering of Figure 16-10 of Integrated Cactus PEA ASCU:TSX ARIZONASONORAN.COM 37

  38. Slide 38: 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

  39. Slide 39: 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

  40. Slide 40: 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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