Arizona Sonoran Copper Co., Inc.
Arizona Sonoran Copper — 6ix Webinar May 2022
52 slides from Arizona Sonoran Copper's conference presentation, May 2022
Slide 1: 6ix Webinar – May 2022
ASCU:TSX ASCUF:OTCQX 6ix Webinar – May 2022 COPPER Invest in Sustainability
Slide 2: Cautionary Information
Cautionary Information This presentation (“Presentation”) is being furnished on a confidential basis in order to provide readers certain information with respect to the business and operations of Arizona Sonoran Copper Company Inc. (the “Company” or “ASCU”). This presentation contains forward-lookin
Slide 3: The Cactus Project: A Low-Risk Growth Opportunity
The Cactus Project: A Low-Risk Growth Opportunity RECENTLY COMPLETED UPCOMING DE-RISKING 2022 • Drilling • ESG / Net Zero Path • Strategic Investor (Rio Tinto) Cactus drilling (FS) • Permitting • No debt Parks/Salyer drilling (Expl.) material permits expected • Technical Studies: prior to constructi
Slide 4: Pro Forma Capital Structure & Ownership
Pro Forma Capital Structure & Ownership OWNERSHIP NEW PRO FORMA CAPITAL STRUCTURE Rio Tinto Retail 7% 19% Market Capitalization (M) C$191M (C$2.15/share) Management Shares Outstanding (M) 88.7 6% Tembo 35% Warrants (M) 6.6 Other Options (M) 2.9 6% RSU’s (M)(1) 0.3 Insitutional 21% DSU’s (M) 0.4 Macq
Slide 5: Announced C$35M | US$27M Non-Brokered PP
Announced C$35M | US$27M Non-Brokered PP (upsized from C$30.5M) Cornerstone Strategic Investments by Rio Tinto and NutonTM and Tembo Capital (non-brokered) Intensify Exploration at Cactus and Parks/Salyer Increasing Drilling at Parks/Salyer, with target of a maiden mineral resource in Q4 22 Metallur
Slide 6: Strategic Investment with Rio Tinto and Nuton
Strategic Investment with Rio Tinto and NutonTM PARTNERSHIP The aim of the partnership is to unlock the value of primary, chalcopyrite-dominated, sulphide material via deployment of Rio Tinto’s NutonTM technologies and further add to the long-term, large-scale future profile of the Project. Rio Tint
Slide 7: Located At The Intersection Of Arizona’s Three Copper Porphyry Belts
Located At The Intersection Of Arizona’s Three Copper Porphyry Belts Arizona is the USA's leading copper-producing state which accounted for 74% of domestic output of copper in 2020(1) Cactus Project and Parks/ Salyer Deposit Arizona ranked No. 2 for the year 2020 in Fraser Institute’s Investment At
Slide 8: Cactus Site Overview – Exploration and Feasibility Drilling Programs
Cactus Site Overview – Exploration and Feasibility Drilling Programs GREENFIELD EXPLORATION PROGRAM +70,000 ft (21,330 m) FEASIBILITY DRILLING 60,000 ft (18,288 m) - infill drilling 12,000 ft (3,650 m) - planned expansion ASCU:TSX | ASCUF:OTCQX ARIZONASONORAN.COM 8
Slide 9: Parks/Salyer Program – Planned Drilling +70,000 ft
Parks/Salyer Program – Planned Drilling +70,000 ft (21,330 m) ASCU EXPLORATION PROPERTY c.500 ft drill spacings 2 rigs currently drilling on new land ASCU:TSX | ASCUF:OTCQX ARIZONASONORAN.COM 9
Slide 10: Parks/Salyer Exploration Potential
Parks/Salyer Exploration Potential ▪ Potential for a scalable UG deposit for further expansion of Cactus ▪ Recent high grade continuous drill intercepts to date represent a small area of the total potential UG target area ▪ Target area represents an area the size of Cactus – approx. 1.2 km x 1.2 km
Slide 11: Organic Expansion Potential – Parks/Salyer – Drilling Results
Organic Expansion Potential – Parks/Salyer – Drilling Results B’ S-200 702.0 ft, 32.2 ft @ 0.78% Cu (Ox) 904.9 ft, 42.0 ft @ 1.25% Cu (Enr) 1034.1 ft, 220.0 ft @ 0.80% Cu (Enr) 1254.0 ft, 536.0 ft @ 0.71% Cu (Pri) S-201 934.0 ft, 27.6 ft @ 1.13% Cu (Enr) 1245.1 ft, 107.9ft @ 0.60% Cu (Enr) 1405.8 ft
Slide 12: Parks/Salyer Leachable Mineralization - Cross Section
Parks/Salyer Leachable Mineralization - Cross Section 199.4 ft @ 0.86% CuT, 0.81% Cu Tsol, 0.033% Mo 28.0 ft @ 1.74% CuT, 28.7 ft @ 3.40% CuT, 1.30% Cu Tsol, 0.002% Mo 3.39% Cu Tsol, 0.081% Mo 302.0 ft @ 1.23% CuT, 41.0 ft @ 1.13% CuT, 1.21% Cu Tsol, 0.021% Mo 1.10% Cu Tsol, 0.023% Mo 439.7 ft @ 0.9
Slide 13: Drilling to Increase Scale at Cactus
Drilling to Increase Scale at Cactus 4 km Strike Length Parks/Salyer BCE Cactus West Cactus East NE Extension Lease Potential Tons Tsol Tsol_lb 1.6 billion pounds Indicated 47.8 ft @ 3.05% CuT 1.05% - Leachable 40M – 90M 1.30% 1.0-2.3 B 1.9 billion pounds Inferred 64.3 ft @ 1.37% CuT ECP-045 ECP-018
Slide 14: PFS Drilling Complete: Infill drilling to Indicated Category
PFS Drilling Complete: Infill drilling to Indicated Category for Reserves Included in PEA Economics 51% of Leachable material from PEA*: • Low-risk resource conversion 18 yr LOM & ~US$1 billion FCF drilling underway • Existing PEA pit shell run at OPTIMIZATION EVIDENCE OF US$2.27/lb Cu (based on cas
Slide 15: Cactus West Oblique View May 2, 2022
Cactus West Oblique View May 2, 2022 Infill drilling of Inferred Resources with PEA pit shell OPEN Inferred Indicated Cactus East Cactus West ASCU:TSX | ASCUF:OTCQX ARIZONASONORAN.COM 15
Slide 16: Cactus West Plan View May 2, 2022
Cactus West Plan View May 2, 2022 A OPEN C’ Cactus East B B’ C Cactus West A’ ASCU:TSX | ASCUF:OTCQX ARIZONASONORAN.COM 16
Slide 17: Cactus West Cross Section (A-A’)
Cactus West Cross Section (A-A’) May 2, 2022 A A’ Cactus West Pit Conglomerate 167.0 ft @ 0.34% CuT, 0.26% Cu TSol Incl. 60.0 ft @ 0.53% CuT, 0.41% Cu TSol 128.3 ft @ 0.28% CuT, 0.25% Cu TSol 465.7 ft @ 0.27% CuT, 0.24% Cu TSol incl. 104.0 ft @ 0.43% CuT, 0.40% Cu TSol Oxide and 52.0 ft @ 0.58% CuT,
Slide 18: Cactus West Cross Section (B-B’)
Cactus West Cross Section (B-B’) May 2, 2022 B B’ Conglomerate Cactus West Pit Conglomerate 230.0 ft @ 0.35% CuT, 0.32% Cu TSol, ECW-037 63.0 ft @ 0.40% CuT, Oxide 0.31% Cu TSol 5.2 ft @ 1.62% CuT, ECW-054 1.60% Cu TSol 205.0 ft @ 0.36% CuT 118.5 ft @ 0.55% CuT, ECW-038 Primary ECW-031 0.48% Cu TSol
Slide 19: Cactus East Cross Section (C–C')
Cactus East Cross Section (C–C') May 2, 2022 ECE-051 S-55 C C’ Cactus West Pit Conglomerate Leached 200.9 ft @ 1.28% CuT, 0.91% Oxide Cu TSol Enriched Basement Fault 90.0 ft @ 1.56% CuT, 1.42% Cu TSol, Primary incl. 40.0 ft @ 2.53% CuT, 2.38% Cu TSol ASCU:TSX | ASCUF:OTCQX ARIZONASONORAN.COM 19
Slide 20: Cactus East ECE-053 Intercept
ECE-053 – 200.9 ft of 1.28% TCu, 0.91% TSol (Enriched – underground) CACTUS EAST 2.36% TCu, 2.06% TSol over 9.6 ft (1,820.4 – 1,830 ft depth) ASCU:TSX | ASCUF:OTCQX ARIZONASONORAN.COM 20
Slide 21: Cactus East ECE-051 Intercept
ECE-051 – 90 ft of 1.56% TCu, 1.45% TSol (Enriched – underground); incl. 40 ft of 2.53% TCu, 2.38% TSol CACTUS EAST 2.67% TCu, 2.40% TSol over 10 ft (1,707 ft – 1,717 ft depth) ASCU:TSX | ASCUF:OTCQX ARIZONASONORAN.COM 21
Slide 22: Cactus West ECW-034 Intercept
ECW-034 – 93.7 ft intercept of 0.42%TCu, 0.31% Tsol (Enriched – OP) 7.66% TCu, 7.06% TSol over 3.0 ft (1,160-1,163 ft depth) CACTUS WEST ASCU:TSX | ASCUF:OTCQX ARIZONASONORAN.COM 22
Slide 23: Junior Copper Producer Benchmarking (Enterprise Value and Production)
Junior Copper Producer Benchmarking (Enterprise Value and Production) $2,500 200 180 $2,102 $2,000 160 140 Annual Production (Mlbs CuEq) $1,500 120 EV (US$M) Company Goal: 100 $1,000 Peak PEA Production: 80 $859 $826 $696 60 $500 40 $402 $313 20 $92 $0 0 Capstone Mining Copper Mountain Taseko Mines
Slide 24: Why ASCU?
Why ASCU? Brownfield, Scalable Development Private Landownership = Project in Tier 1 Jurisdiction Lower risk permitting process • 100% ownership of Arizona-based past producing • State-and-County Led Permitting Framework mine with in place infrastructure ✓ Water Permit received (access to water) • M
Slide 25: Alison Dwoskin, Investor Relations
Alison Dwoskin, CPIR Director, Investor Relations adwoskin@arizonasonoran.com +1 (647) 233-4348 (cell) George Ogilvie, P.Eng President, CEO & Director gogilvie@arizonasonoran.com +1 (416) 723-0458 (cell) www.arizonasonoran.com | www.cactusmine.com
Slide 26: Appendix
Appendix ASCU:TSX | ASCUF:OTCQX ARIZONASONORAN.COM 26
Slide 27: Multi-Billion Pound Starter Mineral Resource Base
Multi-Billion Pound Starter Mineral Resource Base • Leachable resource: • 1.1Blbs Indicated • 1.2Blbs Inferred • Leachable Stockpile included at no mining cost, CACTUS & STOCKPILE – TOTAL CONTAINED COPPER: • 224Mlbs contained Cu Indicated Resource– 1,610,700k lbs Inferred Resource– 1,978,800k lbs Mi
Slide 28: Cactus Leachable-Only Mineral Resource Estimate
Cactus Leachable-Only Mineral Resource Estimate Grades Significantly Increase Underground OPEN PIT - UNDERGROUND - STOCKPILE - LEACHABLE RESOURCE Indicated Resource – 1,065,900 Klbs Inferred Resource –1,211,300 Klbs Open Pit & Stockpile Underground Indicated & Inferred Leachable Resource Indicated &
Slide 29: PEA: Robust Returns from Lowest Capital Intensity vs Peer Group
PEA: Robust Returns from Lowest Capital Intensity vs Peer Group SX/EW Heap Leaching Operation: CONSTRUCTION CAPEX BREAKDOWN (US$M) Annual Average Production over LOM- 28 ktpa (56Mlbs) Direct & Indirect Leach Pads, SXEW Total Cost Components Ponds & Pipelines Facility Capital Cost Sequencing: Directs
Slide 30: Robust Project Economics
Robust Project Economics KEY PROJECT METRICS (1)(2) Over LOM Mine Life ~1B lbs of Cu over 18 years Average Production 28 ktpa (56Mlbs); Peaks at 40 ktpa (80Mlbs) Operating Costs • Avg OPEX over LOM (US$/t milled) • US$9.06/ton • Avg C1 Cost over LOM (US$/lb) • US$1.55/lb • Avg AISC over LOM (US$/lb)
Slide 31: Positive Ongoing Metallurgical Testwork
Positive Ongoing Metallurgical (Bottle Roll / Column Leach) Testwork AVERAGE METALLURGICAL PERFORMANCE CRITERIA Simple heap-leach/SXEW process 01 considered for 1.3 billion pounds of leachable copper (LOM) Preliminary Column Tests (PEA) Updated Column Tests 2 years of met testwork continues Gross Ne
Slide 32: Key Permits in Place – Streamlined Process with Definitive Timelines
Key Permits in Place – Streamlined Process with Definitive Timelines Permit Permit Office Status/Expected Completion Air Quality Permit Pinal County Complete (annual renewal) Arizona Pollution Discharge Elimination System (402) – Cactus ADEQ Complete Arizona Pollution Discharge Elimination System (4
Slide 33: Local Support for the Cactus Mine
Local Support for the Cactus Mine Overwhelming support for the Cactus Mine in Casa Grande – economic survey shows $8.5 Billion of indirect and direct revenues to the local community. Probably Support GOP: 93.0% Support 82.6% Dem: 66.7% Support Don't Know, Refused Support PND: 84.4% Support Definitel
Slide 34: Potential to Expand Existing Mineral Resource Base
Potential to Expand Existing Mineral Resource Base Sources/Notes: 3D Rendering of Table 1-2 of Integrated Cactus PEA. The Integrated Cactus PEA is preliminary in nature, it includes inferred mineral resources that are considered too speculative geologically to have economic considerations applied to
Slide 35: Historic and Current Cactus Mine Project Drilling
Historic and Current Cactus Mine Project Drilling ASCU:TSX | ASCUF:OTCQX ARIZONASONORAN.COM 35
Slide 36: PFS and DFS Drilling Program
PFS and DFS Drilling Program Sources/Notes: 3D representation of drilling plan represented in Table 1-9 and 1-10 of the Integrated Cactus PEA. The Integrated Cactus PEA is preliminary in nature, it includes inferred mineral resources that are considered too speculative geologically to have economic
Slide 37: The Cactus Mine Project’s Path to Restarting Operations
The Cactus Mine Project’s Path to Restarting Operations Sacaton Begins US$20M ASARCO Remediation ARIZONA SONORAN COPPER COMPANY Production Complete Next 1964 1974 1984 2019 2019 2020 2021 Steps Sacaton Production Suspends • Purchases • Issues PEA • Declaration • PFS and FS Studies Discovery Commence
Slide 38: First to Production - Copper Development Peers (P/NAV)
First to Production - Copper Development Peers (P/NAV) 2025 2029 2026 2025 2026 2024 2027 0.90x 0.79x 0.80x 0.70x 0.68x 0.67x 0.64x Peer Average: 0.62x 0.60x 0.58x 0.50x 0.48x P/NAV 0.40x 0.34x 0.30x 0.20x 0.10x 0.00x FOM NGEX FIL MARI AMC ASCU TMQ Source: Company Filings, Capital IQ ASCU:TSX | ASCU
Slide 39: Cactus Production Schedule
Cactus Production Schedule – Opportunity beyond 40 ktpa (80 Mlbs) Production CACTUS PRODUCTION SCHEDULE(1)(2) Heap Leach & SX/EW Processing 55,000,000 55,000 Organic Growth Opportunities: 50,000,000 In-Pit and Near-Pit Optimization 50,000 Parks/Salyer 45,000,000 NE Extension 45,000 40,000,000 40,000
Slide 40: Cactus Site – Brownfield Advantage with Ready Access to Infrastructure
Cactus Site – Brownfield Advantage with Ready Access to Infrastructure Powerline and onsite substation connected to Arizona Public Service Electric Historic data, core shack, maps etc. Power substation Vent raise and u/g development to historic orebody Rail spur (to ship concentrate to refinery) Sha
Slide 41: Open Pit and Underground Mining
Open Pit and Underground Mining OPEN PIT LAYBACK UG PORTAL FROM OPEN PIT Year Pre-stripping and waste removal Year In-pit UG development starts (assumes 24 pit benches mined) 1 6 Open-pit stripping from years 1-4 with some material reporting Year 6 - Twin Decline, 10,000 ft (3,048 m) to leach pads (
Slide 42: Our ESG Framework – Setting the Pace for Net Zero Carbon Emissions
Our ESG Framework – Setting the Pace for Net Zero Carbon Emissions ▪ ASCU is actively exploring use of renewable energy for its operations with the goal of becoming a “Net Zero Carbon Emissions” copper producer ▪ Ability to also reduce carbon footprint by Arizona Public Service’s transition to renew
Slide 43: Journey Towards Net Zero - Partnership with Minviro
Journey Towards Net Zero - Partnership with Minviro Production and Reporting • Establishing reporting KPIs PFS / FS Construction • Reporting to international • Design parameters used to scope impact standards (e.g. SASB, TCFD) • Investment in low carbon technologies and minimizing • GHG inventory as
Slide 44: Key Investment Highlights
Key Investment Highlights • Our Core Values Are Supported by an ESG Framework • Copper Market Fundamentals Are Strong • Mature Capital Structure • Experienced Leadership Team and Board with a Proven Track Record • Brownfield, Scalable Development Project in Tier 1 Jurisdiction • Robust Project Econo
Slide 45: Significant In-Pit Upside Potential
Significant In-Pit Upside Potential Mineral Resource Expansion and Process Optimization Included in PEA Economics 51% of Leachable material from PEA*: • Low-risk resource conversion 18 yr LOM & ~US$1 billion FCF drilling underway • Existing PEA pit shell run at OPTIMIZATION EVIDENCE OF US$2.27/lb Cu
Slide 46: Extending Mineralization Beyond the PEA Pit Outline
Extending Mineralization Beyond the PEA Pit Outline - Planned 2022 Drilling - ECW-023 10,912m (35,800 ft) 15.3m of 0.695% CuTsol ECW-029 34.3m of 0.774% CuTsol - Initial drilling (~3,000 m) demonstrates continuous leachable mineralization including extensions outwards from the modelled pit shell - I
Slide 47: Expanding Underground Leachable Mineralization
Expanding Underground Leachable Mineralization Planned 2022 drilling (13,411 m | 44,000 ft) • Hole ECE-021, extended mineralization 61 m (200 ft) east • Follow up will be conducted to confirm the continuity of of the current mineral resource shell the high-grade zone to the north and east adjacent t
Slide 48: Benchmarking ASCU to Copper Developers
Benchmarking ASCU to Copper Developers Market Capitalization $150 M $2.2 B $557 M $698 M $200 M $350 M $367 M $406 M $110 M McIlvenna Asset Name Cactus Filo del Sol Kay Arctic Marimaca Casino Los Helados Copperwood Bay Economic Study Level PEA PFS FS Historic FS PEA PEA Resource FS Development Type
Slide 49: Simple Heap Leach & SXEW Flowsheet
Simple Heap Leach & SXEW Flowsheet • Leach material mined from the Stockpile Project and new mining operations will be placed in 20 ft (6 m) lifts on lined heap leach pads • The initial oxide materials pad is 8.5 million ft2 (790 thousand m2) to hold approximately 40 Mt of leach material (2-3 years
Slide 50: Integrated Cactus PEA Summary
Integrated Cactus PEA Summary Assumption / Outcome Value / Results(1) Copper Price MARKET US$3.35/lb CAPITALIZATION Total Mineralized Material Moved 179 Mt (US$M) Annual Average Processing Rate Over LOM 10 Mtpa Stockpile Project: CuAS: 90%, CuCN: 40% Average Recovery Rates Over LOM OP / UG: CuAS: 90
Slide 51: General Site Arrangement
General Site Arrangement Sources/Notes: 3D rendering of Figure 16-10 of Integrated Cactus PEA ASCU:TSX | ASCUF:OTCQX ARIZONASONORAN.COM 51
Slide 52: Strong Copper Market Fundamentals
Strong Copper Market Fundamentals Consistent Rising Demand from Key Sectors Supply Constraints To Meeting Primary Demand in Medium Term 50 Total Copper Consumption Forecast by Industry, 2000-2040 35 45 Base Case Production Capability 40 30 35 25 Primary Demand Copper (Mt) 30 Copper (Mt) 25 20 20 15
Arizona Sonoran Copper Company — 6ix Webinar May 2022 on 6ix