Arizona Sonoran Copper Co., Inc.
Arizona Sonoran Copper — Investor Presentation (March 2022)
43 slides from Arizona Sonoran Copper's investor presentation, March 2022
Slide 1: Corporate Presentation – March 2022
ASCU:TSX Corporate Presentation – March 2022 COPPER Invest in Sustainability
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
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
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
Slide 5: Capital Structure & Current Ownership
Capital Structure & Current Ownership CAPITAL STRUCTURE OWNERSHIP Market Capitalization (M) $156 Other Institutional 3% 15% Shares Outstanding (M) 71.1 HNWI/Retail 28% Warrants (M) 6.6 Options (M) 2.9 Mgmt and Insiders Tembo RSU’s (M)(1) 0.3 8% 38% DSU’s (M) 0.4 Macquarie 3% RCF 5% Fully Diluted Sha
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
Slide 7: The Cactus Project: Rapidly Demonstrating a Low-Risk Growth Opportunity
The Cactus Project: Rapidly Demonstrating a Low-Risk Growth Opportunity POST-IPO (November 2021) COMPLETE UPCOMING • Drilling (assays pending) Cactus PFS drilling 2022 • OTCQX Listing in the US • ESG / Net Zero Path Parks/Salyer drilling; NEW EXPLORATION • Drilling • Permitting TARGET OUTLINED at Pa
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 with the goal of becoming a “Net Zero Carbon Emissions” copper producer ▪ Ability to also reduce carbon footprint by Arizona Public Service’s transition to renew
Slide 9: Journey Towards Net Zero - Partnership with Minviro
Journey Towards Net Zero - Partnership with Minviro Production and Reporting • Establishing reporting KPIs PFS / FS Construction • Reporting to international • Design parameters used to scope impact standards (e.g. SASB, TCFD) • Investment in low carbon technologies and minimizing • GHG inventory as
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
Slide 11: Local Support for the Cactus Mine
Local Support for the Cactus Mine Overwhelming support for the Cactus Mine in Casa Grande – economic survey shows $8.5 Billion of indirect and direct revenues to the local community. Probably Support GOP: 93.0% Support 82.6% Dem: 66.7% Support Don't Know, Refused Support PND: 84.4% Support Definitel
Slide 12: Cactus Site Overview - 4,846 acres
Cactus Site Overview - 4,846 acres ASCU:TSX ARIZONASONORAN.COM 12
Slide 13: Cactus Site – Brownfield Advantage with Ready Access to Infrastructure
Cactus Site – Brownfield Advantage with Ready Access to Infrastructure Powerline and onsite substation connected to Arizona Public Service Electric Historic data, core shack, maps etc. Power substation Vent raise and u/g development to historic orebody Rail spur (to ship concentrate to refinery) Sha
Slide 14: Key Permits in Place – Streamlined Process with Definitive Timelines
Key Permits in Place – Streamlined Process with Definitive Timelines Permit Permit Office Status/Expected Completion Air Quality Permit Pinal County Complete (annual renewal) Arizona Pollution Discharge Elimination System (402) – Cactus ADEQ Complete Arizona Pollution Discharge Elimination System (4
Slide 15: Open Pit and Underground Mining
Open Pit and Underground Mining OPEN PIT LAYBACK UG PORTAL FROM OPEN PIT Year Pre-stripping and waste removal Year In-pit UG development starts (assumes 24 pit benches mined) 1 6 Open-pit stripping from years 1-4 with some material reporting Year 6 - Twin Decline, 10,000 ft (3,048 m) to leach pads (
Slide 16: Cactus Production Schedule
Cactus Production Schedule – Opportunity beyond 40 ktpa (80 Mlbs) Production CACTUS PRODUCTION SCHEDULE(1)(2) Heap Leach & SX/EW Processing 55,000,000 55,000 Organic Growth Opportunities: 50,000,000 In-Pit and Near-Pit Optimization 50,000 Parks/Salyer 45,000,000 NE Extension 45,000 40,000,000 40,000
Slide 17: Robust Returns from Lowest Capital Intensity vs Peer Group
Robust Returns from Lowest Capital Intensity vs Peer Group INITIAL CONSTRUCTION COST CONSTRUCTION CAPEX BREAKDOWN (US$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 $
Slide 18: 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)
Slide 19: Positive Ongoing Metallurgical Testwork
Positive Ongoing Metallurgical (Bottle Roll / Column Leach) Testwork AVERAGE METALLURGICAL PERFORMANCE CRITERIA Simple heap-leach/SXEW process 01 considered for 1.3 billion pounds of leachable copper (LOM) Preliminary Column Tests (PEA) Updated Column Tests 2 years of met testwork continues Gross Ne
Slide 20: 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
Slide 21: 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 &
Slide 22: 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
Slide 23: 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
Slide 24: 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
Slide 25: 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
Slide 26: Historic and Current Cactus Mine Project Drilling
Historic and Current Cactus Mine Project Drilling ASCU:TSX ARIZONASONORAN.COM 26
Slide 27: PFS and DFS Drilling Program
PFS and DFS Drilling Program Sources/Notes: 3D representation of drilling plan represented in Table 1-9 and 1-10 of the 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
Slide 28: Mineral Resource Growth Opportunities Beyond Cactus Mine
Mineral Resource Growth Opportunities Beyond Cactus Mine ASCU:TSX ARIZONASONORAN.COM 28
Slide 29: Parks/Salyer Exploration Potential
Parks/Salyer Exploration Potential ▪ Potential for a scalable UG deposit for further expansion of Cactus ▪ Recent high grade continuous drill intercepts to date represent a small area of the total potential UG target area ▪ Target area represents an area the size of Cactus – approx. 1.2 km x 1.2 km
Slide 30: Organic Expansion Potential – Parks/Salyer
Organic Expansion Potential – Parks/Salyer New Intercepts: B' PARKS/SALYER HIGHLIGHTS ECP-045 1126.0 ft, 108.0 ft @ 0.89% Cu, 0.020% Mo (Ox) incl. 1164.0 ft, 70.0 ft @ 1.16% Cu, 0.019% Mo 1320.0 ft, 595.0 ft @ 1.29% Cu, 0.018% Mo (Enr) incl. 1320.0 ft, 107.0 ft @ 1.81% Cu, 0.018% Mo and 1645.0 ft, 1
Slide 31: ECP-045 ECP-042 Cross Section
A A’ (looking W) ECP-045 ECP-019 ECP-042 S-200 New P/S Drilling Conglomerate MINERALIZATION IS OPEN TO THE NORTH 86.0 ft @ 2.26% CuT Leached 2.11% Cu Tsol, 0.020% Mo Oxide 70.0 ft @ 1.16% CuT 1.07% Cu Tsol, 0.019% Mo 101.0 ft @ 0.67% CuT Enriched 0.26% Cu Tsol, 0.022% Mo 595.0 ft @ 1.29% CuT 1.18% C
Slide 32: Consolidating Strike Length: Long-section
Consolidating 4 km Strike Length Creating Opportunities for Scalable Leachable Production Base Parks/Salyer Cactus West Cactus East NE Extension BCE Lease Starts 47.8 ft @ 3.05% CuT 138 ft east of ECP -045 ECP-045 64.3 ft @ 1.37% CuT ECP-018 S-201 S-68 S-64 595.0 ft @ 1.29% CuT B 1.18% Cu Tsol, 0.01
Slide 33: First to Production - Copper Development Peers (P/NAV)
First to Production - Copper Development Peers (P/NAV) 2025 2029 2026 2025 2026 2024 2027 0.90x 0.79x 0.80x 0.70x 0.68x 0.67x 0.64x Peer Average: 0.62x 0.60x 0.58x 0.50x 0.48x P/NAV 0.40x 0.34x 0.30x 0.20x 0.10x 0.00x FOM NGEX FIL MARI AMC ASCU TMQ Source: Company Filings, Capital IQ ASCU:TSX ARIZON
Slide 34: Junior Copper Producer Benchmarking (Enterprise Value and Production)
Junior Copper Producer Benchmarking (Enterprise Value and Production) $2,500 200 180 $2,102 $2,000 160 140 Annual Production (Mlbs CuEq) $1,500 120 EV (US$M) Company Goal: 100 $1,000 Peak PEA Production: 80 $859 $826 $696 60 $500 40 $402 $313 20 $92 $0 0 Capstone Mining Copper Mountain Taseko Mines
Slide 35: 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
Slide 36: Investor Relations and CEO contacts
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
Slide 37: Appendix
Appendix ASCU:TSX ARIZONASONORAN.COM 37
Slide 38: 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
Slide 39: General Site Arrangement
General Site Arrangement Sources/Notes: 3D rendering of Figure 16-10 of Integrated Cactus PEA ASCU:TSX ARIZONASONORAN.COM 39
Slide 40: 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
Slide 41: 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
Slide 42: 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
Slide 43: 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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