Lundin Gold Inc. · TSX:LUG
Lundin Gold — Corporate Update (May 2017)
27 slides from Lundin Gold's corporate update, May 30, 2017
Slide 1: Fruta del Norte Financing and Project Update
Building the future through responsible mining Fruta del Norte Financing and Project Update Webcast Presentation 30 May 2017 1
Slide 2: Disclaimers
Disclaimers This presentation includes forward‐looking information or forward‐looking statements under Canadian and U.S. securities laws that involve risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by such forward‐looking st
Slide 3: Continuing to Derisk FDN Orion/Blackstone Financing
Continuing to Derisk FDN Orion/Blackstone Financing 3
Slide 4: High Quality Finance Partners
High Quality Finance Partners Orion Resource Partners Blackstone • $3.3 billion under • $368 billion under management management • One of the largest mining- • Tactical Opportunities is a focused investment business $20 billion opportunistic specializing in providing investing platform focused on fi
Slide 5: Gold Prepay Facility
Gold Prepay Facility • Non‐revolving term facility of $150 million • First half to be drawn on or before July 31, 2017 • Second half to be drawn on or before June 30, 2018 • Proceeds of loan to pay Project Costs • Principal and interest paid over 19 quarters equivalent to 11,500 Au oz. based on spot
Slide 6: Stream Facility
Stream Facility • Terms similar to Pre‐pay facility • Non‐revolving term facility of $150 million in two draws of $75 million • First draw to occur on or before July 31, 2017 • Second draw to occur on or before June 30, 2018 • Proceeds of loan to pay Project Costs • Principal and interest paid month
Slide 7: Offtake Agreement
Offtake Agreement • Up to 2.5 million ozs refined gold • Settled using the closing LBMA or Comex gold price around the delivery dates • Settled by physical gold delivery, if available, or financial settlement • Company retains right to negotiate smelter and refining contracts 7
Slide 8: Equity Investment Participation
Equity Investment Participation • Orion and Blackstone committed to 20% participation in future equity raises, subject to certain minimum and maximum thresholds • Aggregate total of $100 to $150 million • Term of subscription equal to market terms 8
Slide 9: Project Update
Project Update LUNDINGOLD
Slide 10: Start of Portal Construction
Start of Portal Construction Contractor mobilized to site in April Work on portals began May 1st Site facilities under construction 10
Slide 11: Mine Facilities
Mine Facilities Batch Plant Truck Shop Wash Bay Dry and WC Fuel Bay Warehouse Warehouse Admin Building Others: Generators, Industrial Water, Water Treatment 11
Slide 12: Mining – Major Changes from Feasibility Study
Mining – Major Changes from Feasibility Study Lower Cut‐off Grade Slight increase in Probable Reserve Better development advance rates Elimination of production gap in first 3.5 years and increased production in Year 3 to 3,600 tonnes per day (tpd) Re‐location of critical components of dev
Slide 13: Probable Reserves
Probable Reserves Feasibility Study (FS) Update Tonnes Au Grade Ounces Tonnes Au Grade Ounces (kt) (g/t) (Koz) (kt) (g/t) (Koz) Transverse Stope (TS) 8,404 8.97 2,424 11,685 8.82 3,314 Overhand Drift & Fill (D&F) 5,533 11.15 1,983 3,905 10.36 1,301 Underhand D&F ‐ ‐ ‐ 711 10.77 246 Development Ore (
Slide 14: Mine Design Modifications
Mine Design Modifications Unchanged • Twin Decline FS • Dewatering galleries • Dewatering wells • Backfill ‐ Paste & Cemented Rock Fill Changes • Eliminated north vent raise (RAR) • Location of internal ramp • New escapeway • Addition of new mining method – underhand cut & fill Update • Added a new
Slide 15: Better Development Rates
Better Development Rates Total Development Meters Domain Units FS Update • Location of internal ramp moved to Poor m 1,100 639 area of more competent rock Fair m 3,754 2,154 • Removal of north ventilation development and raise Good m 1,608 5,309 • Addition of secondary egress Total m 6,462 8,102 • I
Slide 16: Mine Production
Mine Production Feasibility Study (May 2016) Project Update (May 2017) Underground Production tpd Underground Production tpd 4000 14 4,000 12.0 3500 12 3,500 10.0 3000 3,000 10 8.0 2500 2,500 8 Au g/t Au g/t tpd tpd 2000 2,000 6.0 6 1500 1,500 4.0 4 1000 1,000 2 2.0 500 500 0 0 ‐ 0.0 2017 2018 2019
Slide 17: Site Plan Improvements
Site Plan Improvements Tailings Hollin Quarry Quarry Road FS Camp Quarry Waste Plant & Waste Dump Paste Plant • Significantly less earthworks and roads Mountain Quarry • Relocation of Process Plant River Road • Elimination of Construction Camp with expansion of existing Las Peñas • Elimination of Ho
Slide 18: Process Plant Optimization
Process Plant Optimization Overlain on FS Layout Feasibility Study New Location About 40% less footprint area 18
Slide 19: Design Optimizations
Design Optimizations Discipline Unit of Measure FS Update Civil and Earthworks m3 7,240,000 4,000,000 Concrete m3 23,800 18,300 Steel Mt 1,500 1,660 Piping m 58,000 77,500 240,000 Electrical Cable m (MV and HV only) 315,000 • Steel added for overhead cranes and compacted layouts • Piping increase ma
Slide 20: Schedule Overview
Schedule Overview Commercial production defined as three consecutive months at 70% of 3,500 tpd • Critical path remains mine development • First ore to plant in Q4 2019 versus Q1 2020 • Commercial production projected over six months earlier 20
Slide 21: Capital Expenditures
Capital Expenditures (excl. working capital & financing costs) (IN MILLIONS USD) FS Changes Update TOTAL CAPEX PER FS 668.7 RE‐SCHEDULED FROM SUSTAINING 58.0 SCOPE CHANGES (2.5) 55.5 DESIGN AND ESTIMATE CHANGES 6.1 TOTAL CAPEX PER Project Update 61.6 730.3 PRE‐PRODUCTION REVENUE (131.4) (131.4) PRE‐
Slide 22: Major CAPEX Changes
Major CAPEX Changes Scope and Re-scheduled from Sustaining Changes from FS Amount ($) Category Major Changes Millions Mine Equipment: re‐scheduled from sustaining; additional equipment; buy 33.0 instead of lease Paste Plant: re‐scheduled from sustaining and increased size of plant 25.0 Changes in Sc
Slide 23: Major CAPEX Changes
Major CAPEX Changes Design and Estimates $ Category Major Changes (Millions) New estimates due to more defined engineering, updated quotations and (54.2) reduced site infrastructure requirements Update of Estimate Reduction of Earthwork Quantities (25.8) Changes in Process Plant layout (14.0) Change
Slide 24: Operating Cost Comparison – Reduced AISC
Operating Cost Comparison – Reduced AISC Surface costs, 4.21$/t, 4% OPEX OPEX* Project Update Update (US$/t) (US$/oz Au payable) G&A, Mining 54.98 208.48 20.21$/t, 18% Process 32.44 123.00 Mining, G&A 20.21 76.65 54.98$/t, 49% Surface Cost 4.21 15.96 Process, Total 111.84 424.08 32.44$/t, Note: Figu
Slide 25: Gold Production
Gold Production 450 GOLD PRODUCTION (Au koz) 5,000 400 4,500 4,000 350 3,500 300 3,000 250 2,500 200 2,000 150 1,500 100 1,000 50 500 ‐ ‐ 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 FS Production ‐ ‐ ‐ 149 308 390 411 382 389 368 354 355 345 346 339
Slide 26: Project Economics
Project Economics Feasibility Study: Project Update: Valuation Indicators Valuation Indicators Pre Tax UNITS LOM Pre Tax UNITS LOM NPV 4% US$M 1,452 NPV 4% US$M 1,497 NPV 5% US$M 1,283 NPV 5% US$M 1,323 NPV 8% US$M 879 NPV 8% US$M 908 NPV 10% US$M 675 NPV 10% US$M 700 Payback period from start of pr
Slide 27: Thank you Questions
Thank you Questions TSX and Nasdaq Stockholm: LUG 27