Spanish Mountain Gold Ltd. · TSXV:SPA

Spanish Mountain Gold — Investor Presentation (March 2022)

34 slides from Spanish Mountain Gold's investor presentation, March 2022

  1. Slide 1: TSX-V: SPA | OTC: SPAZF – De-risk + Optimize, March 2022

    COYCIICF (-) r) ( \ -risk + Optimize March 2022 a TSX-V = | OTC:

  2. Slide 2: Forward-looking statements

    Certain of the statements and information on this presentation constitute “forward-looking statements” or “forward-looking information”. Forward-looking statements or information are subject to a variety of known and unknown risks, uncertainties and other factors that could cause actual events or re

  3. Slide 3: Current Priorities

    Current Priorities De-risk : Fast-track EA/ Mine Permitting Optimize: Targeted Studies + Resource Expansion 2021 Pre-feasibility Study* Robust Production  Mine Life: 14 Years + Economics  Avg. Annual Prod’n: >183Koz (1st 6yrs) >150Koz (LOM) Large Gold Resource  AISC per oz: $801  NPV 5% : $1.2B

  4. Slide 4: Project Reserve/Resource

     Excellent access & infrastructure in a top-tier mining jurisdiction (British Columbia, Canada) Project  Advancing multi-million oz. gold Reserve through critical milestones towards permits and production  Robust economics shown in Pre-Feasibility Study (2021) Reserve/ Resource  Large & growing

  5. Slide 5: Project Attributes and Management Approach

    Renewable Power Efficiency Communities Empowerment  Connectivity to  Low power &  Long-term thinking and commitments on Project hydroelectric power / reagent ESG issues commensurate with a long mine lower greenhouse gas requirements & life Attributes emissions efficient milling  Abundance of loc

  6. Slide 6: 1. De-risk 2. Optimize

     Deliver project milestones within compressed timeline  Fast-track Environmental Assessment/ Permitting activities 1. De-risk  Completed Pre-Feasibility Study in Q2 2021  Near-term Deliverables: EA & permitting; feasibility study +  Enhance project economics & resource  Ongoing targeted trade-

  7. Slide 7: Multi-million oz Reserves

    Reserve • Higher grade/ near-surface portion of the large and growing Resource Mill Feed Profile  Total feed: 96m tonnes  Avg. Au grade: 0.76 g/t (0.88 g/t first 6-yrs) PFS pit (max. depth < 250m)  Total contained gold: 2.34 Moz Multi-million oz Reserves Future Opportunities Proposed Mine Profile

  8. Slide 8: NPV and Internal Rate of Return

    Pre-tax NPV Pre-tax IRR $2,000 48% 43% Internal Rate of Return NPV (C$ Million) $1,500 $ 1B 38% 33% $1,000 28% $1.2B 23% $500 18% 13% $- 8% 1,400 1,600 1,800 2,000 2,200 Gold Price (US$) “Base Case” “Spot Case” “Forward Case” Gold Price Scenario Pre-tax NPV@5% C$mm $848 $1,209 $1,570 IRR % 25 31 36

  9. Slide 9: Access & Infrastructure, Low Milling Cost

    Access & Infrastructure  < 100k highway access to Williams Lake (major mining supply centre & labour pool)  Abundance of grid power and BC Hydro substation connectivity  Supplies & labour available from many surrounding communities (low overhead costs)  Year-round access/ accommodating climate/

  10. Slide 10: Million Ounces: resource expansion track record

    To continue track record of resource expansion Reserve M&I Resource* 5.0 4.5 Million Ounces 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 2008 2009 2011 2012 2014 2017 2019 2021 Year of Resource Estimate * at economic cut-off grade  10

  11. Slide 11: Resource expansion drilling strategy and findings

    Strategy/ Approach  Tested 4 broad areas in resource with limited historic drilling  Potential to expand resource along strike & at depth Key Findings  Long intercepts (up to 69m) reported in all 4 tested areas at above economic cut-off grade  13.72m grading 1.04 g/t, including 3.05m grading 2.1

  12. Slide 12: Ambitious Targets for Environmental Assessment

    2022 Q1 Q2 Q3 Q4 Ambitious  Submission of Initial Project Description  Targets for  Submission of Detailed Project Description   Signing of Life-of-Mine Relationship Environmental Agreement with all three First Nations  Assessment  Launching Community Open Houses/ Consultations  Value-added

  13. Slide 13: Jurisdiction/Location, Large Reserve/Resource, Accelerated Timeline

     Jurisdiction/ Location • Mining friendly/ excellent access & infrastructure  Large Reserve/Resource • 2.3 Moz P&P Reserves / 4.6 Moz M&I Resource & growing + Inferred  Accelerated Timeline • Building on detailed work performed over a decade (environmental baseline; metallurgical; archaeological

  14. Slide 14: Valuation and production cost metrics

    Marketcap/Net Asset Value*(5% disc.) Production cost*: AISC per oz (LOM avg) <0.15 US$801 Marketcap per Reserve* oz Marketcap per Resource oz <US$35 <US$15 Post-tax Free cashflow from Operations* Production per year* (First 6-yr avg) >$120M/Yr or >180K oz (first 6-yrs) >$1.7 B LOM >150 K oz (LOM) *

  15. Slide 15: Location, De-risking Activities, Reserve/Resource

    Location De-risking Activities Reserve/Resource TSX-V: SPA | OTC : SPAZF 15

  16. Slide 16: Low Cost, Attracting Major Acquisitions

     Cheap grid power – 6.5¢/kWh  Among lowest corporate tax rates in Canada Low Cost  Refundable Mineral Exploration Tax Credit (made permanent in 2019)  Barkerville Gold Mines by Osisko G&R for C$ 338 M  70% of Red Chris Mine by Newcrest Mining for US$806 M  46% of New Afton by Ontario Teachers’

  17. Slide 17: Top-tier Pro-mining Jurisdiction and Infrastructure

    Top-tier Pro-mining Jurisdiction  Low political risks/ strong resource sector  Attracted major in-bound investments in recent years  Solid track record of new mine permitting Excellent Mining Infrastructure & Access  Close to producing mines – Gibraltar, QR Mine & Mount Polley  Paved highway ac

  18. Slide 18: Extensive Project Work Completed

     Over $85m in total project expenditures  900+ drill holes over 180,000 metres  PFS completed in Q2 2021 delineating a 2.3 Moz reserve Extensive Project Work Completed in Multiple Areas  Ongoing project optimization and resource expansion  Significant work performed over a decade & ongoing EA a

  19. Slide 19: Mining Near-surface / Higher-grade Resources as Standalone Operations

    Mining Near-surface / Higher-grade Resources as Standalone Operations (Main Zone Reserve) Optimal Mix of  “Right-size” mill throughput to lower initial capex while maintaining robust production Capex, Production &  Enhance financing options and shorten payback of initial capex Opex  Continue to o

  20. Slide 20: Simple Flowsheet & High Au Recovery

    Simple Flowsheet & High Au Recovery  Confirmatory testwork completed at multiple laboratories  Efficient conventional milling – coarse grind, moderate power cost of 13.8 kwh/t and low cyanide consumption of 0.1 kg/t  Overall gold recovery at 90% 90 % overall Au Recovery + Ag credit Crush & Grind

  21. Slide 21: Community Engagement, Environmental Data, Permitting

     Ongoing engagements with all three Indigenous Nations began 2010  Long-standing practice of sourcing employees from Indigenous Nations and Community Engagement local communities  Near-term Deliverables: Life-of-Mine Relationship Agreement with all three Nations  Archaeological clearance obtaine

  22. Slide 22: Major Project Milestones

    Y-1 Y-2 Y-3 Y-4 Y-5 project optimization/ feasibility study Major Project environmental assessment* & permitting Milestones project finance engineering & construction * Key driver of timeline Location Reserve/ Resource 22 TSX-V: SPA | OTC : SPAZF

  23. Slide 23: Sediment-Hosted Gold Deposits

    Sediment-Hosted Gold Deposits  One of the first recognized sediment-hosted bulk tonnage gold systems in British Columbia  Gold is finely disseminated within black argillites and siltstones, as well as well local high-grade, gold-bearing quartz veins within siltstones, greywackes and tuff  Sedimen

  24. Slide 24: Proven and Probable Reserve

    Tonnage (Mt) Au Grade (g/t) Gold (Moz) Ag Grade (g/t) Silver (Moz) Proven 40.8 0.79 1.03 0.67 0.88 Probable 55.1 0.74 1..31 0.74 1.30 Total P&P Reserve 95.9 0.76 2.34 0.71 2.18 * Delineated in 2021 PFS. See cautionary statements Location De-risking Activities TSX-V: SPA | OTC : SPAZF 24

  25. Slide 25: Large and Growing, Development Flexibility

     Ensure long-life operations to ride out price cycles Large and Growing  Continue resource expansion with ongoing drilling program  Completed various scoping studies supporting potential viability at different throughput: Development Flexibility  40,000 tpd  20,000 tpd  10,000 tpd  < 50% of M

  26. Slide 26: PFS Mineral Reserves and M&I Resource

    PFS delineates Proven & Probable Mineral Reserves totaling 96 million tonnes @ 0.76 g/t = 2,339,000 ounces Au (<50% of M&I resource) Tonnes Gold grade Gold Silver grade Silver Resource Category (Million) (g/t) (Million oz) (g/t) (Million oz) Measured 69 0.59 1.3 0.67 1.5 Indicated 226 0.47 3.4 0.73

  27. Slide 27: Phoenix Zone

    Phoenix Zone  Strike length over 3.5km in length & less than 2km from the Main Zone  Preliminary metallurgical testing suggests material is amenable to same processing flowsheet as Main Zone Location De-risking Activities TSX-V: SPA | OTC : SPAZF 27

  28. Slide 28: Cash & Capital Structure

    Cash & Capital Structure 18% 52% Net cash $6m 30% Share issued & outstanding 328m Warrants 68m Options 9m Retail Market capitalization $80m Institutional (Eric Sprott 16%; Others 14%) Management/ Directors/ Insiders TSX-V: SPA | OTC : SPAZF 28

  29. Slide 29: Management and Board of Directors

    Industry & Business Management Expertise Experience Larry Yau, CEO M&A, finance >30 yrs Sharon Ng, CFO finance, accounting >20 yrs Judy Stoeterau, VP-Geology exploration, geology >30 yrs engineering, project management, Ray Mah, Project Director >30 yrs mine construction Doug Ramsey, Director, Susta

  30. Slide 30: Spanish Mountain Gold Ltd.

    Spanish Mountain Gold Ltd. 1120-1095 West Pender St. Vancouver, B.C., V6E 2M6 Canada www.spanishmountaingold.com Larry Yau, CEO Email: info@spanishmountaingold.com Tel:+1 (604) 398-4377 Subscribe for email update: https://spanishmountaingold.com/contact/subscribe-for-updates/ TSX-V: SPA | OTC : SPAZ

  31. Slide 31: TSX-V: SPA | OTC: SPAZF

    TSX-V: SPA | OTC : SPAZF 31 ss

  32. Slide 32: Pre-tax and Post-tax Economics by Gold Price

    Gold Price (USD) Pre-tax Economics $1,200 $1,400 $1,600 $1,800 $2,000 $2,200 $2,400 NPV(5%) $M $125 $487 $848 $1,209 $1,570 $1,932 $2,293 IRR % 9% 18% 25% 31% 36% 42% 47% Payback Yrs 5.4 4.0 3.2 2.7 2.4 2.1 1.9 Cumulative Free Cashflow from $M $1,040 $1,583 $2,127 $2,670 $3,214 $3,758 $4,301 Operati

  33. Slide 33: Unit Cost of Production and Operational Metrics

    Unit Cost of Production Unit CAD USD Mining $/t mined $2.22 $1.69 Mining $/t milled $10.80 $8.21 Processing $/t milled $6.58 $5.00 G&A $/t milled $1.36 $1.04 TSF $/t milled $0.17 $0.13 Water treatment $/t milled $0.47 $0.36 Total $/t milled $19.38 $14.73 Select Operational and Cost Metrics Yrs 1-6 L

  34. Slide 34: Capital Cost Breakdown

    C$M US$M Overall Site $26 $19 Open Pit Mining $73 $56 Ore Handling $34 $26 Process $125 $95 Tailings and Water Management $40 $30 Environmental Monitoring $2 $2 On-site Infrastructures $42 $32 Off-site Infrastructures $64 $49 Water treatment Plant $10 $7 TOTAL DIRECT COSTS $416 $316 Project Indirect

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