Western Copper And Gold Corporation · TSX:WRN
Western Copper And Gold — Investor Presentation (September 2017)
44 slides from Western Copper And Gold's investor presentation, September 2017
Slide 1: Developing Canada's Premier Copper-Gold Mine
DEVELOPING CANADA’S PREMIER COPPER-GOLD MINE SEPTEMBER 2017 TSX : WRN I NYSE AMERICAN : WRN
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS The information provided in this presentation is not intended to be a comprehensive review of all matters and developments concerning Western Copper and Gold Corporation and its subsidiaries (collectively, the “Company”). This document should be read in conjunction with al
Slide 3: Clean and Tightly-Held Ownership Structure
CLEAN AND TIGHTLY-HELD OWNERSHIP STRUCTURE CASH POSITION Cash & Short Term Investments C$ 5.5 million Jun 30, 2017 Working Capital C$ 5.2 million Short/Long Term Debt $Nil SHARE STRUCTURE Share Price C$ 1.48 Aug 31, 2017 Market Cap C$ 143 M Common Shares 96,587,269 Options 4,350,001 Warrants - Fully
Slide 4: WRN Is a Straightforward Investment Proposal
WRN IS A STRAIGHTFORWARD INVESTMENT PROPOSAL ✓ The World Needs More Copper • Casino is a Significant Copper-Gold Deposit ✓ Most Global Copper Projects are Uneconomic • The Casino Project is economic – even at $2/lb Copper ✓ Large Gold Deposits are Scarce • Casino is a Sizeable Copper-Gold Deposit ✓
Slide 5: Significant Copper-Gold Resource
SIGNIFICANT COPPER – GOLD RESOURCE ALASKA YUKON CASINO PROJECT Whitehorse GOLD COPPER Skagway 8.9 M 4.5 B oz Reserves lbs Reserves 9.0 M 5.4 B oz Inferred Resources lbs Inferred Resources B.C Vancouver Note: see Appendix for detailed Casino mineral resource & reserve. Based on 2013 Feasibility Study
Slide 6: Looming Copper Supply Crunch
LOOMING COPPER SUPPLY CRUNCH ~ 5 million tonne deficit by 2027 equivalent to annual production of 65 Casino mines IRR (100% equity) 18.6 Source: Rio Tinto TSX : WRN I NYSE AMERICAN : WRN Developing Canada’s Premier Copper-Gold Mine 6
Slide 7: Significant Copper Deposits Controlled by Juniors
SIGNIFICANT COPPER DEPOSITS CONTROLLED BY JUNIORS Pebble Casino KSM Ann Mason Morisson Harper Creek Pumpkin Northmet Hollow King King Tampakan Canariaco Norte Cotabambas Mina Justa Project Constellation Productora Source: public records. Copyright © Free Vector Maps.com TSX : WRN I NYSE AMERICAN : W
Slide 8: Copper Investment Value – Significant Upside Potential
COPPER INVESTMENT VALUE – SIGNIFICANT UPSIDE POTENTIAL 4.0 3.5 EV/lb Copper Equivalent (¢/lb) 3.0 2.5 2.0 1.5 1.0 0.5 0.0 Northern Panoro Western NGEx Trilogy Polymet Excelsior Nevada Dynasty (PML) (WRN) (NGQ) (TMQ) (POM) (MIN) Copper (NDM) (NCU) Notes: Peer group data as per latest company public d
Slide 9: Gold Exploration Fail
GOLD EXPLORATION FAIL Amount of gold found by miners has plunged 85% over the past decade. IRR (100% equity) 18.6 TSX : WRN I NYSE AMERICAN : WRN Developing Canada’s Premier Copper-Gold Mine 9
Slide 10: A Significant Gold Deposit
A SIGNIFICANT GOLD DEPOSIT 50 70 45 60 40 50 Gold Equivalent (M ozs) 35 Gold (M ozs) 30 40 25 20 30 15 20 10 10 5 0 0 Coffee Casino (WRN) Metates Back River Donlin Gold Livengood Caspiche Metates Coffee Casino (WRN) Back River Livengood Caspiche Donlin Gold (CKG) (XRC) (G) (CKG) (XRC) (G) (SBB) (ITH
Slide 11: Gold Investment Value – Significant Upside Potential
GOLD INVESTMENT VALUE – SIGNIFICANT UPSIDE POTENTIAL 70.0 60.0 EV/oz Gold Equivalent ($/oz) 50.0 40.0 30.0 20.0 10.0 0.0 Western Chesapeake Seabridge Inter. TH Midas Victoria NovaGold Sabina (WRN) (CKG) Gold (ITH) Gold Gold (NG) (SBB) (SEA) (MAX) (VIT) Notes: Peer group data as per latest company pu
Slide 12: Economic Throughout the Commodity Cycle
ECONOMIC THROUGHOUT THE COMMODITY CYCLE 40% $6.0 Gold Price Gold Price $1600/oz $1600/oz 35% $5.0 $1400/oz $1400/oz $1200/oz $1200/oz $1000/oz $1000/oz NPV, Billions (after-tax) 30% $4.0 IRR (after-tax) 25% $3.0 20% $2.0 15% $1.0 10% $- 2.0 3.0 4.0 5.0 6.0 2 3 4 5 6 Copper Price ($US/lb) Copper Pric
Slide 13: WRN Shares Give Leverage to Copper and Gold
WRN SHARES GIVE LEVERAGE TO COPPER AND GOLD Copper spikes to $2.76/lb Copper increases $0.50 to $2.60/lb Copper rising Gold spikes to $1370/oz Gold increases Yukon ExplorCo $200 to $1280/oz Investments by: • Agnico-Eagle • Barrick • Newmont • Kinross Goldcorp buys Kaminak • Coeur TSX : WRN I NYSE AM
Slide 14: A Proven History of Value Creation
A PROVEN HISTORY OF VALUE CREATION
Slide 15: Key Management Team with Successful Track Record
KEY MANAGEMENT TEAM WITH SUCCESSFUL TRACK RECORD Dale Corman, B.Sc., P.Eng Paul West-Sells, PhD Cameron Brown, P.Eng Julien Francois, CPA, CA Executive Chairman President & CEO VP Engineering VP Finance & CFO Extensive experience in Metallurgical Engineer with Formerly Project Manager for Has been C
Slide 16: Following a Proven Path to Create Value
FOLLOWING A PROVEN PATH TO CREATE VALUE May 2006 ✓ • Spin-out from Western Silver Transaction with Glamis (now Goldcorp) Nov 2006 ✓ • Acquired Casino Project from Lumina Resources 2008-2012 ✓ • Two Pre-Feasibility Studies Completed and Drilling to 100,000 m Jan 2013 ✓ • Bankable Feasibility Study Co
Slide 17: Social License
SOCIAL LICENSE ✓ Community • Ongoing Engagement with Local Communities • 10+ Years Operating in the Yukon ✓ First Nations • Significant and Continuing Consultation with First Nations • Co-operation Agreements Signed with Key First Nations ✓ Government • $130 million funding from Territorial and Fede
Slide 18: Significant Resource & Reserve
SIGNIFICANT RESOURCE & RESERVE RESERVE (P&P) Leached cap: 157 Mt @ 0.29 g/t Au 8.9 million oz Gold Initial 4 years: 172 Mt @ 0.70% CuEq 4.5 billion lbs Copper 22 Year Mine Life: 965 Mt @ 0.50% CuEq 93-185 0.95% CuEq over 689m INFERRED RESOURCE Incl. 3.6% CuEq over 100m 9.0 million oz Gold 1,710 Mt @
Slide 19: Production
PRODUCTION Y1 to Y4 22 YRS Grade % CuEq 0.70 0.50 Copper production (M lb/y) 245 171 500 Gold Production (k oz/y) 399 266 450 Silver Production (k oz/y) 1,777 1,425 Copper (million lbs), Gold (thousand ozs) Moly Production (M lb/y) 15.3 15.5 400 Strip Ratio 0.49 0.59 350 Net Smelter Return ($/t mill
Slide 20: Comparable Capex
Unit Capex (US$/t CuEq/y) $0 $5,000 $10,000 $20,000 $25,000 $30,000 $35,000 $40,000 $15,000 Kamoa-Kakula ($1B) Metalkol ($0.8B) Los Helados ($1.2B) Sentinel ($2B) Carrapateena ($0.6B) El Pilar ($0.3B) Agua Rica ($2.2B) Mirador ($1.2B) Ann Mason ($1.2B) COMPARABLE CAPEX Josemaria ($2B) TSX : WRN I NY
Slide 21: Casino as a Copper Company
CASINO AS A COPPER COMPANY Inferred COPPER RESERVE AND RESOURCE Reserve Resource Total Copper (lbs) 4.5 B 5.4B Total Copper Equivalent (lbs) 11.4 B 13.9 B COPPER PRODUCTION Y 1-4 LOM Copper Production (M lbs/year) 245 171 Copper Equiv. Production (M lbs/year) 516 382 COPPER COSTS Spot Cash Cost Net
Slide 22: Casino as a Gold Company
CASINO AS A GOLD COMPANY Inferred GOLD RESERVE AND RESOURCE Reserve Resource Total Gold (oz) 8.9 M 9.0 M Total Gold Equivalent (oz) 26.2 M 31.7 M GOLD PRODUCTION Y 1-4 LOM Gold Production (k oz/year) 399 264 Gold Equiv. Production (k oz/year) 1,179 872 GOLD COSTS Spot Cash Cost Net of By-Product ($/
Slide 23: Majors Have Discovered the Yukon
MAJORS HAVE DISCOVERED THE YUKON Note: Ownership and Claims taken from Public Disclosures TSX : WRN I NYSE AMERICAN : WRN Developing Canada’s Premier Copper-Gold Mine 23
Slide 24: Why Invest in Western Copper and Gold?
WHY INVEST IN WESTERN COPPER AND GOLD? ✓ Fundamentals of Copper and Gold Markets are Strongest in 5 years ✓ Assets that have Size, Economics and Location are scarce ✓ The company has a significant upside compared to peers ✓ Western has a proven history of creating shareholder value TSX : WRN I NYSE
Slide 25: Appendix
& western COPPER AND GOLD APPENDIX
Slide 26: Recent Commentary
RECENT COMMENTARY “Copper remains critical for miners and investors alike. It is a large (US$130bn) market that has better supply and demand fundamentals than bulks. New consumers will emerge from developing markets; rich countries will shift to electric vehicles; mines are getting older, deeper and
Slide 27: Board of Directors
BOARD OF DIRECTORS • 40 years experience as a senior corporate officer of publicly listed companies. Dale Corman, Extensive expertise in mineral exploration & development, financing, property B.Sc, P.Eng. evaluation and acquisition. Formerly Chairman & CEO of Western Silver Corporation. Executive Ch
Slide 28: Analyst Coverage
ANALYST COVERAGE RODMAN & RENSHAW HEIKO F. IHLE, CFA TEL: (212) 356 - 0510 CORMARK SECURITIES (NEW ANALYST, CURRENTLY UNDER REVIEW) TSX : WRN I NYSE AMERICAN : WRN Appendix 28
Slide 29: YESAB Panel Review Process
YESAB PANEL REVIEW PROCESS YESAB REVIEW TIMELINE February 18, 2016 ✓ • Project Requires Panel Review March 18, 2016 ✓ • Request Approved from Environment Minister June 20, 2016 ✓ • YESAB Compiles List of Additional Information to be Submitted ~ End of 2017 • Company Completes and Submits Additional
Slide 30: Select Precedent Base Metal Developer Transactions
SELECT PRECEDENT BASE METAL DEVELOPER TRANSACTIONS 1.25x 1.00x Price / Net Asset Value 0.75x Average P/NAV: 0.62x 0.50x 0.25x 0.00x Norsemont PanAust > Frieda HudBay > Augusta Mercator > Creston Western Copper & Lundin > Eagle Mine First Quantum > Nevsun > Reservoir Thompson Creek > Stillwater > Cup
Slide 31: Project Economics
PROJECT ECONOMICS ECONOMICS Base Case Spot Copper (US$/lb) 3.00 3.00 Gold (US$/oz) 1,400 1,300 Molybdenum (US$/lb) 14.00 7.25 Silver (US$/oz) 25.00 17.50 Foreign Exchange (US$:C$) 0.95 0.80 NPV @ 8% (C$ M) 2,820 3,300 Pre-Tax IRR (100% equity) (%) 24.0 26.5 NPV @ 8% (C$ M) 1,830 2,170 After Tax IRR
Slide 32: Revenue Distribution
REVENUE DISTRIBUTION Y1 to Y4 LOM BASE % of Revenue – Copper ($3) 48% 46% (0.95 FX) % of Revenue – Gold + Silver 40% 37% % of Revenue – Gold ($1,400) 37% 34% % of Revenue – Silver ($25) 3% 3% % of Revenue – Moly ($14) 12% 17% Y1 to Y4 LOM SPOT % of Revenue – Copper ($3.00) 53% 52% (0.80 FX) % of Rev
Slide 33: Operating Costs
REVENUE DISTRIBUTION ($/tonne) MILLING Milling $5.13 OPERATION Mining $3.05 General & Administrative $0.34 Total $8.52 ($/tonne) HEAP LEACH Heap Leach Operation $1.31 OPERATION ADR/SART $2.73 Total $4.04 Note: based on 2013 Feasibility Study, see “Notes” in Appendix. TSX : WRN I NYSE AMERICAN : WRN
Slide 34: Royalty Sale Confirms Value
ROYALTY SALE CONFIRMS VALUE VALUATION METRICS Royalty Sale Confirms Project Value Price – 5% NPI1 ~$28 M Price – 5% NPI to 2.75% NSR $32 M Total Price – NSR $60 M Net Present Value of Royalty2 $230 M 1 – Estimated by Western Copper and Gold. For further information refer to Strategic Metals Ltd. new
Slide 35: Projected Capital Costs
FEASIBILITY STUDY – JANUARY 2013 MINE COSTS $ Millions PROJECTED Mining Equipment & Mine Development 454 CAPITAL COSTS Concentrator (incl. related facilities) 904 Heap Leach Operation 139 Camp 70 Subtotal Mine Direct Costs 1,566 Indirect Costs 295 Subtotal Mine Direct & Indirect Costs 1,861 INFRASTR
Slide 36: Proposed Road Access
PROPOSED ROAD ACCESS TSX : WRN I NYSE AMERICAN : WRN Appendix 36
Slide 37: Proposed Road Access
PROPOSED ROAD ACCESS TSX : WRN I NYSE AMERICAN : WRN Appendix 37
Slide 38: East – West Section 6958400 N
EAST – WEST SECTION 6958400 N Note: based on 2013 Feasibility Study. See “Notes” in Appendix. TSX : WRN I NYSE AMERICAN : WRN Appendix 38
Slide 39: Good Grade
GOOD GRADE Mineral Reserve Grades In Line with Peers: Casino Life of Mine (965 Mt) CASINO Casino Y1-Y4 (172 Mt) Copper Mountain - CUM (2012) Highland Valley - TCK (2012) Gibraltar - TKO (790 Mt) Mt. Milligan - TC (482 Mt) PEERS Red Chris - III (301 Mt) Cobre Panama - FM (3058 Mt) 0.00 0.10 0.20 0.30
Slide 40: Processing
PROCESSING MILLING • Throughput: average LOM 124,000 tonnes per day • Grinding Circuit: 40 ft SAG Mill (29 MW) + 2 x 28 ft Ball Mills (22 MW each) • Medium – soft ore: BWi – 14.1 kWh/t, 200 µm primary grind FLOTATION • Conventional copper/moly circuit • Recoveries: Copper 86%, Gold 67%, Moly 71%, Si
Slide 41: Excellent Concentrate Quality
EXCELLENT CONCENTRATE QUALITY Copper Concentrate Molybdenum Concentrate Element Avg Value Unit Element Avg Value Unit Copper 28 % Molybdenum 57.4 % Gold 25 g/t Copper 0.39 % Silver 120 g/t Rhenium 133.5 g/t Molybdenum 0.05 % Iron 0.8 % Iron 26 % Sulphur 37.9 % Sulphur 36 % Arsenic 1659 g/t Arsenic 2
Slide 42: Casino - Mineral Reserve & Resource Estimates
CASINO - MINERAL RESERVE & RESOURCE ESTIMATES RESERVE RESOURCE AT 0.25% CuEq CUT-OFF Note: based on 2013 Feasibility Study. See “Notes” in Appendix. TSX : WRN I NYSE AMERICAN : WRN Appendix 42
Slide 43: Notes
NOTES 2013 FEASIBILITY STUDY • Technical report entitled "Casino Project, Form 43-101 Technical Report Feasibility Study, Yukon, Canada – Revision 1" dated January 25, 2013, a copy of which is available on Western Copper and Gold's website at www.westerncopperandgold.com and under its profile at www
Slide 44: Contact
WWW.WESTERNCOPPERANDGOLD.COM INFO@WESTERNCOPPERANDGOLD.COM 604 684 9497
Western Copper and Gold — Investor Presentation (September 2017) on 6ix