Tinka Resources Limited · TSXV:TK
Tinka Resources — Investor Presentation (February 2020)
28 slides from Tinka Resources's investor presentation, February 2020
Slide 1: Corporate Presentation – February 2020
TSXV & BVL:TK | OTCPK: TKRFF www.tinkaresources.com Corporate Presentation – February 2020
Slide 2: Disclaimer
Disclaimer This presentation does not constitute or form a part of, and should not be construed as an offer, solicitation or invitation to subscribe for, underwrite or otherwise acquire, any securities of Tinka, nor shall it or any part of it form the basis of or be relied on in connection with any
Slide 3: Ayawilca Project: Highlights
Ayawilca Project: Highlights Ayawilca Zinc-Silver Project o Ayawilca has ~7 billion pounds of zinc in resources with silver & lead credits o PEA released July 2019 shows a robust UG mine with optimization potential Peru o Good infrastructure (power, water, roads) and community relationships Ayawilca
Slide 4: Market Capitalization & Investors
Market Capitalization & Investors (at Jan. 13, 2020) TSXV & BVL: TK | OTCPK: TKRFF Major Shareholders Institutional: Shares Issued: 340.7 M Sentient Equity Partners 22% Options (priced $0.25 to $0.50) 15.4 M Buenaventura 19% Warrants (priced at $0.45 exp May ‘20) 12.4 M IFC 9% Fully diluted: 369.0 M
Slide 5: Strategic Investment by Buenaventura
Strategic Investment by Buenaventura o Compañia de Minas Buenaventura acquired a 19.3% strategic equity stake in Tinka in January 2020 o Buenaventura (NYSE: BVN) is the largest Peruvian mining Ayawilca company (market cap over US$3 billion) with multiple precious and base metals mining operations in
Slide 6: Management & Board
Management & Board Management – Extensive Peru and Zinc Experience Dr. Graham Carman President & CEO, Director Geologist, 25 years global exploration experience with Rio Tinto, Savage, Pasminco, juniors. PhD on Lihir Island Gold Alvaro Fernandez-Baca VP Exploration, Peru Geologist, 20 years global e
Slide 7: Ayawilca Project – Central Peru
Ayawilca Project – Central Peru o Peru is a top 2 global producer of zinc, copper and silver o Pro-mining country – mining accounts for over 50% of exports ECUADOR Rank in Latin Mineral World America 2018 2018 Ayawilca Project Zinc 2nd 1st BRAZIL Antamina Copper 2nd 2nd Central Peru Tin 4th 1st zinc
Slide 8: Central Peru – Mines & Infrastructure
Central Peru – Mines & Infrastructure Antamina: Largest current copper/zinc mine in Peru Cerro de Pasco: Largest historic silver/zinc mine in Peru Giant Ore Deposit 8
Slide 9: Tinka – Resource Growth 2015 to 2019
Tinka – Resource Growth 2015 to 2019 o Tinka has successfully grown the Ayawilca zinc resource several times since 2015 o Further potential exists to grow the resource quality, tonnage and grade Ayawilca Resource Growth 2015 to 2018 60 INFERRED 50 40 Resources (Mt) Inf. 2018; 6,738 Inf. 2017; 6,873
Slide 10: Ayawilca - One of the Largest Zinc Resources
Ayawilca - One of the Largest Zinc Resources 1 ZnEq includes all metals. Source: Stifel-GMP, July 2019 10
Slide 11: Ayawilca Geology & Resources
Ayawilca Geology & Resources o Tinka owns 170 km2 of mining claims (100%) o Three deposits on property: Ayawilca Focus Area - Plan View with Geology 1. Zinc Zone 2. Tin Zone 3. Colquipucro Silver Zone Tinka Claim Boundary Ayawilca Claim Map 11
Slide 12: Focusing on Thick Zones & High Grade
Focusing on Thick Zones & High Grade o Ayawilca is a “manto” style carbonate replacement deposit (“CRD”). Mantos are stacked at South and West Ayawilca – greatest thickness and highest grades ? o Drilling continues to Untested target high-grade at depth resources at shallow + + depths, with the pote
Slide 13: 2019 Drill Highlights - South Ayawilca
2019 Drill Highlights - South Ayawilca o Grades in 2019 drill holes were well above the average grade of Zinc Zone resource • Hole A19-165: 9.0 m @ 11.9% zinc and 25.9 m @11.8% zinc and 28.7 m @ 14.0% zinc and 14.9 m @ 12.3% zinc • Hole A19-163: 5.7m grading 32.6% zinc at edge of resource o Discover
Slide 14: Ayawilca PEA
Ayawilca PEA o PEA assumed a 5,000 t/d UG operation with ramp access with on-site processing for two concentrates o Initial capex of US$262 million and after-tax NPV8% of US$363 million with a 27.1% IRR o Opportunities for optimization: ▪ Review of the PEA is underway with an independent consultant
Slide 15: Next Steps: Development and derisking
Next Steps: Development and derisking 2020: 2 • Exploring other targets on Tinka mining concessions (170 km ) - extensive soil sampling / prospecting underway • Infill and exploration drilling from Q2 2020: 10,000 to 15,000 metres of drilling planned • Review of PEA assumptions • Permitting for an e
Slide 16: The Life Cycle of a Mineral Discovery
The Life Cycle of a Mineral Discovery Tinka is here • Optimization • Infill drilling • Permitting • Land access and • Exploration drilling Tinka 5-year share price chart 16
Slide 17: Ayawilca Gravity Anomaly – Step-Out Targets
Ayawilca Gravity Anomaly – Step-Out Targets Valley: Fault intersection and Zone 3: anticline similar to South Large gravity and Ayawilca. Repeated Pucara magnetic anomalies in host to the west is untested thickened Pucara limestone Far South: Zinc soil anomaly Silver Zone and Feeder Fault intersecti
Slide 18: Colquipucro Silver Oxide Mineral Resources
Colquipucro Silver Oxide Mineral Resources o Ayawilca property also hosts a silver oxide resource o No economic studies completed to date, but could be a standalone operation at higher silver prices or an adjunct operation to a zinc mine Tonnage Ag Ag Class/Zone (Mt) (g/t) (Moz) Indicated High Grade
Slide 19: Community Relations & Environment
Community Relations & Environment o Ongoing long-term partnerships with three nearby communities o Social engagement and sustainable development programs in place o Employment during drill programs (road and drill pad construction) and at camp o IFC (World bank) providing support and guidance 19
Slide 20: Tinka: Outstanding History of Exploration Success
Tinka: Outstanding History of Exploration Success o Scarcity Value - Ayawilca Zinc Zone has the size & grade in a proven mining belt o Full Ownership - 100% ownership of a PEA stage project with after-tax NPV8% of US$363M o Low Valuation - Tinka EV of ~US$35 million is less than 10% of project NPV o
Slide 21: APPENDIX
APPENDIX
Slide 22: Zinc Inventories – Declining for Seven Years
Zinc Inventories – Declining for Seven Years o Zinc prices have declined 42% from 2018 highs due to the trade war between the US and China, concerns that the zinc market will go into surplus, and now the COVID-19 virus o While zinc demand has been impacted by the trade war, the surplus has not event
Slide 23: Zinc Market Analysis
Zinc Market Analysis o Large predicted increases in zinc mine production have failed to materialize (e.g., Teck predicted an 800kt increase in mine supply in 2018 – actual growth was 200kt) o Zinc mine production in China has lagged expectations due to declining ore grades and stricter environmental
Slide 24: Ayawilca PEA – A Top Peru Zinc Mine
Ayawilca PEA – A Top 5 Peru Zinc Mine Mining and Resources Operating Cost Cost per Tonne Description Processed o Underground mine with 5,000 tonne per day flotation plant Mining – Room & Pillar US$38.06 o 38.2 Mt of Resources mined over 21 years Mining – Post & Pillar US$35.29 o US$65/t NSR cut-off
Slide 25: 2019 Ayawilca PEA Highlights
2019 Ayawilca PEA Highlights (in US dollars) Robust Economics : $200 $2,000 o 5,000t/day underground zinc mine with 21 year mine life, room & pillar + post- $150 $1,500 pillar mining Cumulative Cash Flows (US$ millions) Annual Cash Flows (US$ millions) $100 $1,000 o Modest initial capex of $262M $50
Slide 26: Zinc Resource Base Case
Zinc Resource Base Case (Nov. 2018 @ $55 NSR cut-off) o ~68,000 metres drilled in Zinc Zone from 2012 to 2018 o 1.8 billion pounds of zinc in Indicated category (24% of total) o 5.6 billion pounds of zinc in Inferred category (76% of total) o Highest grades at South and West Ayawilca Notes: • CIM de
Slide 27: Ayawilca Zinc Zone Cut-off Sensitivity
Ayawilca Zinc Zone Cut-off Sensitivity o Base case resources calculated at US$55/tonne cut-off) o PEA was prepared using US$65/t cut-off to focus on higher grade resources o Geotechnical studies to be conducted to determine if bulk underground mining methods could be used, which would allow a higher
Slide 28: Tinka Resources Limited
Tinka Resources Limited CORPORATE OFFICE Suite 1305 - 1090 West Georgia St Vancouver, BC V6E 3V7 CANADA Ph: +1 604 699-0202 Fax: +1 604 683-1585 FOR MORE INFORMATION Dr. Graham Carman, President & CEO info@tinkaresources.com Rob Bruggeman, Investor Relations rbruggeman@tinkaresources.com +1 416 884-
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