Western Copper And Gold Corporation · TSX:WRN
Western Copper And Gold — Investor Presentation (January 2017)
44 slides from Western Copper And Gold's investor presentation, January 2017
Slide 1: Developing Canada's Premier Copper-Gold Mine
DEVELOPING CANADA’S PREMIER COPPER-GOLD MINE JANUARY 2017 TSX : WRN I NYSE MKT : 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: Globally Significant
GLOBALLY SIGNIFICANT Significant Copper-Gold Deposit Stable, Mining Friendly Jurisdiction Top Ranked Economics Clear, Proven Path to Increase Shareholder Value Undervalued relative to peers TSX : WRN I NYSE MKT : WRN Developing Canada’s Premier Copper-Gold Mine 3
Slide 4: Clean and Tightly-Held Ownership Structure
CLEAN AND TIGHTLY-HELD OWNERSHIP STRUCTURE CASH POSITION Cash & Short Term Investments C$ 7.9 million Sept 30, 2016 Working Capital C$ 7.6 million Short/Long Term Debt $Nil SHARE STRUCTURE Share Price C$ 1.75 Jan 16, 2017 Market Cap C$ 161 M Common Shares 95,090,602 Options 5,846,668 Warrants - Full
Slide 5: 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 22 Year Mine Life: 965 Mt @ 0.50% CuEq 4.5 billion lbs Copper INFERRED RESOURCE 9.0 million oz Gold 1,710 Mt @ 0.37% CuEq 5.4 billion lbs Copper Cross section of GE
Slide 6: Project Economics
PROJECT ECONOMICS Project Economics at Spot Prices (after-tax)* NPV IRR PAYBACK @8% (C$) (years) $1.8 B 20.6% 2.9 Note: US$1180 Au, US$2.60 Cu, Mo US$6.90, Ag US$16.50, FX: US$:C$ 1:0.75 TSX : WRN I NYSE MKT : WRN Developing Canada’s Premier Copper-Gold Mine 6
Slide 7: Production
PRODUCTION Y1 to 22 YRS Y4 Grade % CuEq 0.70 0.50 500 Copper production (M lb/y) 245 171 Gold Production (k oz/y) 399 266 450 Copper (million lbs), Gold (thousand ozs) Silver Production (k oz/y) 1,777 1,425 400 Moly Production (M lb/y) 15.3 15.5 Strip Ratio 0.49 0.59 350 Net Smelter Return ($/t mill
Slide 8: Comparable Capex
. Unit Capex (US$/t CuEq/y) $0 $5,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 $10,000 Sentinel Los Helados Baimskaya New Prosperity El Pilar TSX : WRN I NYSE MKT : WRN Haquira Asmara Pumpkin Hollow COMPARABLE CAPEX Josemaria Pebble Carrapateena Canariaco Norte Candente Tia Maria Kamoa Ann Ma
Slide 9: Leverage to the Gold and Copper Price
LEVERAGE TO THE GOLD AND COPPER PRICE
Slide 10: Copper Demand
COPPER DEMAND US Economic Improved Chinese Worldwide Strength and Infrastructure Plans + Economic and Trade Data + Movement Towards Green Technologies = Bullish Demand for Copper TSX : WRN I NYSE MKT : WRN Developing Canada’s Premier Copper-Gold Mine 10
Slide 11: Looming Copper Supply Crunch
LOOMING COPPER SUPPLY CRUNCH ~ 5 million tonne deficit by IRR 2027 equivalent to annual production of 65 Casino mines (100% equity) 18.6 Source: Rio Tinto TSX : WRN I NYSE MKT : WRN Developing Canada’s Premier Copper-Gold Mine 11
Slide 12: A Significant Copper Deposit
A SIGNIFICANT COPPER DEPOSIT ■ Proven & Probable Reserves ■ Measured & Indicated Resources ■ Inferred Resources Notes: Peer group data as per latest company documents and public files. Copper equivalent calculations based on US$2.00/lb copper; US$875/oz gold; US$11.25/lb molybdenum; and US$11.25/oz
Slide 13: Copper Investment Value
COPPER INVESTMENT VALUE 4.0 3.5 EV/lb Copper Equivalent (¢/lb) 3.0 2.5 2.0 Casino : Undervalued? 1.5 1.0 0.5 0.0 Northern Western Panoro (PML) Exeter NGEx Nevada Polymet Dynasty (WRN) (XRC) (NGQ) Copper (NCU) (POM) (NDM) Notes: Peer group data as per 2016 Q3 company documents and public files. Metal
Slide 14: Casino Is in Top Position
CASINO IS IN TOP POSITION TSX : WRN I NYSE MKT : WRN Developing Canada’s Premier Copper-Gold Mine 14
Slide 15: Where Will New Gold Supply Come From?
WHERE WILL NEW GOLD SUPPLY COME FROM? EXPLORATION FAIL Amount of gold found by miners has plunged 85% over the past decade TSX : WRN I NYSE MKT : WRN Developing Canada’s Premier Copper-Gold Mine 15
Slide 16: A Significant Gold Deposit
A SIGNIFICANT GOLD DEPOSIT ■ Proven & Probable Reserves ■ Measured & Indicated Resources ■ Inferred Resources Notes: Peer group data as per latest company documents and public files. Gold equivalent calculations based on US$2.00/lb copper; US$875/oz gold; US$11.25/lb molybdenum; and US$11.25/oz silv
Slide 17: Gold Investment Value
GOLD INVESTMENT VALUE 70.0 60.0 EV/oz Gold Equivalent ($/oz) 50.0 40.0 Casino : Undervalued? 30.0 20.0 10.0 0.0 Western Seabridge Chesapeake Inter. TH Midas Sabina Victoria NovaGold (WRN) Gold (CKG) (ITH) Gold (SBB) Gold (NG) (SEA) (MAX) (VIT) Notes: Peer group data as per 2016 Q3 company documents
Slide 18: Majors Have Discovered the Yukon
MAJORS HAVE DISCOVERED THE YUKON Invested in the Yukon • Goldcorp • Kinross • Agnico Eagle • Capstone Mining • Teck • Silver Wheaton Note: Ownership and Claims taken from Public Disclosures TSX : WRN I NYSE MKT : WRN Developing Canada’s Premier Copper-Gold Mine 18
Slide 19: A Clear Path to Create Value
& western COPPER AND GOLD A CLEAR PATH TO CREATE VALUE
Slide 20: 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 21: 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 22: Local Support
LOCAL SUPPORT Strong Community Outreach • 10 Years Operating in the Yukon • Ongoing Engagement with Local Communities • Co-operation Agreements Signed with First Nations • Significant Yukon Government Collaboration and Support • Federal Government Support as Part of $200M Infrastructure Request TS
Slide 23: Globally Significant Resource
GLOBALLY SIGNIFICANT RESOURCE Right Deposit: Significant Copper-Gold Resource Right Location: Majors Moving In Right Time: Copper Deficit Coming, Limited Large Gold Deposits Right Team: Consistent Track Record of Creating Value TSX : WRN I NYSE MKT : WRN Developing Canada’s Premier Copper-Gold Mine
Slide 24: Appendix
& western COPPER AND GOLD APPENDIX
Slide 25: Board of Directors
BOARD OF DIRECTORS • 40 years experience as a senior corporate officer of publicly listed companies. Dale Corman, Extensive expertise in mineral exploration & development, financing, property B.Sc, P.Eng. evaluation and acquisition. Formerly Chairman & CEO of Western Silver Corporation. Executive Ch
Slide 26: Analyst Coverage
ANALYST COVERAGE RODMAN & RENSHAW HEILO F. IHLE, CFA TEL: (212) 356 - 0510 CORMARK SECURITIES (NEW ANALYST, CURRENTLY UNDER REVIEW) TSX : WRN I NYSE MKT : WRN Appendix 26
Slide 27: Plenty of Room to Run
PLENTY OF ROOM TO RUN TSX : WRN I NYSE MKT : WRN Appendix 27
Slide 28: Select Precedent Base Metal Developer Transactions
SELECT PRECEDENT BASE METAL DEVELOPER TRANSACTIONS 1.25x 1.00x Price / Net Asset Value 0.75x Average P/NAV: 0.62x 0.50x 0.25x 0.00x Norsemont PanAust > Frieda Western Copper & Capstone > Far West Lundin > Eagle Mine HudBay > Augusta First Quantum > Nevsun > Reservoir Thompson Creek > Mercator > Cres
Slide 29: Project Economics
PROJECT ECONOMICS ECONOMICS Long Term Spot Copper (US$/lb) 3.00 2.60 Gold (US$/oz) 1,400 1,180 Molybdenum (US$/lb) 14.00 6.90 Silver (US$/oz) 25.00 16.50 Foreign Exchange (US$:C$) 0.95 0.75 NPV @ 8% (C$ M) 2,820 2,790 Pre-Tax IRR (100% equity) (%) 24.0 24.2 NPV @ 8% (C$ M) 1,830 1,870 After Tax IRR
Slide 30: 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 ($2.60) 52% 50% (0.75 FX) % of Rev
Slide 31: Operating Costs per Tonne
REVENUE DISTRIBUTION ($/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 $4.04 Note: based on 2013 Feasibility Study, see “Notes” slide in Appendix. TSX : WRN I NYSE MKT : WRN
Slide 32: Best in Class Operating Costs
BEST IN CLASS OPERATING COSTS LOW COST PRODUCER US$/lb Cash Costs (Copper) 2.95 By-product Revenue (3.76) Cash Cost (net of by-products) (0.81) NSR Royalty 0.17 Yukon Royalty & Taxes 0.37 Reclamation Cost 0.03 Sustaining Capital Expenditure 0.10 All-in Cost (0.13) Note: based on 2013 Feasibility Stu
Slide 33: 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 Base Spot Cash Cost
Slide 34: Casino as a Gold Company
CASINO AS A GOLD COMPANY Inferred GOLD RESERVE AND RESOURCE Reserve Resource 9.0 M Total Gold (oz) 8.9 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 Base Spot Cash Cost Net of By-Produc
Slide 35: 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 36: Proposed Road Access
PROPOSED ROAD ACCESS TSX : WRN I NYSE MKT : WRN Appendix 36
Slide 37: East-West Section 6958400 N
EAST – WEST SECTION 6958400 N TSX : WRN I NYSE MKT : WRN Appendix 37
Slide 38: 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 39: 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 40: 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 41: Casino - Mineral Reserve & Resource Estimates
CASINO - MINERAL RESERVE & RESOURCE ESTIMATES Reserve Resource at 0.25% CuEq Cut-off TSX : WRN I NYSE MKT : WRN Appendix 41
Slide 42: 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 43: Intentionally Blank Page
INTENTIONALLY BLANK PAGE TSX : WRN I NYSE MKT : WRN Appendix 43
Slide 44: www.westerncopperandgold.com
WWW.WESTERNCOPPERANDGOLD.COM INFO@WESTERNCOPPERANDGOLD.COM 604 684 9497
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