Osisko Metals Incorporated · TSX:OM
Osisko Metals — Investor Presentation (July 2021)
32 slides from Osisko Metals's investor presentation, July 2021
Slide 1: Pine Point: Canada's Leading Zinc-Lead Project
Pine Point: Canada’s Leading Zinc-Lead Project July 2021 TSXV: OM TSXV: OTCQX: OM OMZNF FRANKFURT: 0B51
Slide 2: Forward-Looking Statements & Cautionary Notes Regarding Technical Information
Forward-Looking Statements & Cautionary Notes Regarding TechnicalInformation This presentation (the "Presentation") contains ""forward-looking information" within the meaning of applicable Canadian securities legislation based on expectations, estimates and projections as at the date of this Present
Slide 3: Key Take-Aways
Key Take-Aways • Decades-long divestment from resource sector has led to global base metal reserve depletion. • Shift toward a green, sustainable economy coupled with post-COVID infrastructure stimulus will dramatically increase global base metal demand. • Zinc is particularly exposed to medium-term
Slide 4: Metal commodity valuations at 100-year lows
Metal commodity valuations at 100-year lows Metals Market vs S&P 500 Relative CAPE (Cyclically-Adjusted P/E ratios) Average Base Metal sector remains out of favor and primed to deliver sizeable gains as it returns to the long-term average 4
Slide 5: Metal commodity valuations at 100-year lows
Metal commodity valuations at 100-year lows 100-year historical lows Historical low reached in late 2015 and repeated in March 2020 5
Slide 6: ….and demand is forecasted to rapidly grow
….and demand is forecasted to rapidly grow 6
Slide 7: Construction and infrastructure stimulus will further drive the demand for zinc
Construction and infrastructure stimulus will further drive the demand for zinc Constructio n And Source: Wood Mackenzie 7
Slide 8: Galvanization = Sustainability
Galvanization = Sustainability 8
Slide 9: Looking to the future: Zinc-Air and Zinc-Hybrid Flow Batteries for energy storage
Looking to the future: Zinc-Air and Zinc- Hybrid Flow Batteries for energy storage Renewable Energy Sources Face Storage and Distribution Issues Lithium Batteries too Costly for Grid Storage Lithium Supply Will Be Absorbed by Transportation Zinc Battery Grid Storage is Low Cost and Efficient Potenti
Slide 10: Looking to the future: Zinc-Air and Zinc-Hybrid Flow Batteries for energy storage
Looking to the future: Zinc-Air and Zinc- Hybrid Flow Batteries for energy storage Low Cost And Safe Durable With No Power Fade Over Extensive Lifetime Well Established Technology 10
Slide 11: Supply Side: Gap in global supply to reappear in medium term
Supply Side: Gap in global supply to reappear in medium term PDAC Presentation March 2020 11
Slide 12: North American zinc supply deficit is coming
North American zinc supply deficit is coming 1400 35% Drop in NA Zinc 1200 Production Zn in Concentrate (kT) 1000 800 600 400 200 0 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Red Dog Pend Oreille Middle Tennessee Greens Creek Empire State (Balmat) East Tennessee Doe Run Bracemac McLeod Caribo
Slide 13: The Pine Point mining camp
The Pine Point mining camp Cominco 1964-1988 64 Mt @ 10% Zn+Pb OPEN PIT Osisko Metals Projects Head Office 13
Slide 14: Support infrastructure already in place
Support infrastructure already in place • CN Rail Head, Highway and Flights • Paved Highway from Hay River to Site. from Edmonton to Hay River • Low-Cost Hydro-Electric Power Available • Property within 60 km of Hay River 14 On Site From Taltson Dam.
Slide 15: Access to international concentrate markets via rail from Hay River
Access to international concentrate markets via rail from Hay River Rail Distances: • Edmonton to Hay River 970km • Edmonton to Prince Rupert 1,300km • Edmonton to Vancouver 1,245km 15
Slide 16: Global cost curve for zinc producers
Global cost curve for zinc producers Approx. 10% of the cost curve is unprofitable in this price environment US$1.25/lb Zinc Pine Point Source: SNL Pine Point PEA : Expected C1 cost of US$0.67/lb Potential to be within the second cost quartile on a cash cost/lb basis Well positioned on the cost curv
Slide 17: Annual production of zinc: potential to be top-ten global producer
Annual production of zinc: potential to be top-ten global producer 250,000 500 200,000 400 Contained Tonnes Contained Mlbs 150,000 300 100,000 200 50,000 100 0 0 1 2 3 4 5 6 7 8 9 10 Year Zinc (Metric) Lead (Metric) Zinc (Imperial) Lead (Imperial) Sourced from 39 open pits and 8 high grade deposits
Slide 18: Pine Point could produce one of the cleanest concentrates globally
Pine Point could produce one of the cleanest concentrates globally 18.00% 6,000 P: Above Penalty Level P: Above Penalty Level Minor Element Penalties (ppm) 16.00% 5,000 P Major Element Penalties 14.00% P Mn SiO2 P Hg 12.00% Fe 4,000 P P 10.00% Cd Pb 3,000 As 8.00% P Cu 6.00% 2,000 P P 4.00% P 1,000
Slide 19: Positive PEA outlines potential for significant zinc and lead production at Pine Point
Positive PEA outlines potential for significant zinc and lead production at Pine Point • NPV of C$500M and IRR of 29.6% (After-Tax) • Potential To Be Top-10 Global Zinc Mine On Production Basis • Potential to produce Premium High Grade Zinc Concentrate • Infrastructure In Place: • Hydroelectric Powe
Slide 20: Project boundary location
Project boundary location Large Near Surface 65 km-long Mineralized Resource Base Trend R190 20
Slide 21: MRE confirms potential for further resource expansion
MRE confirms potential for further resource expansion • MRE within a total of 47 deposits of which 11 remain open along strike. Key focus of 2021-2022 drilling campaigns. • Drilling in the East Mill Zone successfully pushed pit boundaries, demonstrating an opportunity to connect neighboring pit and
Slide 22: MRE expansion in East Mill Zone
MRE expansion in East Mill Zone 2020 MRE Modelled Pit Outline 2019 MRE Modelled Pit Outline Mineralization Outline of > 2% Zn eq Drill Hole Locations 2019 New Drill Holes in the 2020 MRE Historical Drill Holes Infrastructure Existing Mine Haulage Roads 22
Slide 23: Deposit styles at Pine Point (MVT type)
Deposit styles at Pine Point (MVT type) W-85 A-70 Subtle Surface Watt Mountain Shale Depressions Collapse Collapse Tabular Sulfur Point Fm (Dolomitized) Prismatic Prismatic Pine Point Fm. Pine Point Fm Poorly Investigated Carbonates X-15 30m “B Spongy” Unit (Base of Pine Point) N-204 0m 200m 41% Zn+
Slide 24: Project boundary location
Project boundary location Large Near Surface 65 km-long Mineralized Resource Base Trend R190 24
Slide 25: R190 drilling update: DDH 01: 27.5m at 31.2% Zinc + 11.6% Pb
R190 drilling update: DDH 01: 27.5m at 31.2% Zinc + 11.6% Pb 25
Slide 26: R190 drilling update: 56.5% Zn+Pb
R190 drilling update: 27.5m at 31.2% Zinc + 11.6% Pb High-grade center in R190-01: Potential for expansion to the 148.5-155.5: 7 m @ 56.5% Zn+Pb North and East 56.5% Zn+Pb! 26 26
Slide 27: Pine Point Agreements Provide Community Support
Pine Point Agreements Provide Community Support • In 2019, Osisko Metals announced two separate Collaboration Agreements with indigenous communities located near the Pine Point Project: • Deninu K’ue First Nation • Northwest Territory Metis Nation • In 2017, Exploration Agreement signed with K’atl’o
Slide 28: Wrap-up
Wrap-up • Base metal markets are at relative 100-year lows. • Shift toward a green, sustainable economy coupled with post- COVID infrastructure stimulus will dramatically increase global base metal demand. • Zinc production deficit looming as mines close and only handful of zinc development projects
Slide 29: Contacts
Contacts 1100, av. des Canadiens-de-Montréal Investors and General Inquiries: Suite 300 info@osiskometals.com Montreal, Qc, H3B 2S2 Tel: 514-940-0670 Fax: 514-861-1333 29
Slide 30: Appendix – Share Structure and BOD
Appendix – Share Structure and BOD Significant Shareholders As at June 1, 2021 Osisko Group. . . . . . . . . . . . . . . . . . . . 20.3% Closing price . . . . . . . . . . . . . . . $0.48 Renvest & CDPQ . . . . . . . . . . . . . . . . . 8.4% 52 week low/high . . . . . . .$0.35-$0.52 Management & Insi
Slide 31: Appendix - PEA Financial Overview
Appendix - PEA Financial Overview Internal Rate of Return ("IRR") After Taxes 29.6% After-tax Net Present Value ("NPV") (Discount Rate 8%) $500M After-Tax Payback Period (Years) 2.8 Pre-Production CAPEX (including $71.2M Contingency) $555M Average Annual LOM Production Zinc 327Mlb Average Annual LOM
Slide 32: Appendix - PEA Mill Design Overview
Appendix - PEA Mill Design Overview Crushing Circuit 11,250tpd Lowering fine fraction 70% of Ore could further reduce mass “Coarse Fraction” recovery and mill size 30% of Ore XRT Sorting Overall 41% “Fine Fraction” Waste Rejection 58% Waste Rejection Reduction in mill size Grinding Final Recovery po