Excellon Resources Inc. · TSXV:EXN
Excellon Resources — Investor Presentation (December 2014)
28 slides from Excellon Resources's investor presentation, Dec 10, 2014
Slide 1: Mexico's highest grade silver producer
Mexico’s highest grade Silver producer TSX:EXN | OTC:EXLLF Investor Presentation – December 2014
Slide 2: Disclaimer
Disclaimer This document contains “forward‐looking statements” within the meaning of applicable Canadian securities legislation and applicable U.S. securities laws. Except for statements of historical fact relating to the Company, such forward‐looking statements include, without limitation, statemen
Slide 3: Investment highlights
HIGH GRADE M+I Grade of 777 g/t Ag (20M AgEq oz @ 1,277 g/t AgEq) LOW COST $11.66/Ag oz payable total cash cost (9-mos 2014) CASH FLOW $18.33/Ag oz payable all-in sustaining cost (9-mos 2014) SOLID MINE LIFE Quality resource remaining with open potential Increasing production through optimization GR
Slide 4: Highest grade resource and production
900 Great Panther 800 Excellon Topia La Platosa M&I Resource Grade (Ag g/t) 700 600 MAG/Fresnillo Juanicipio* 500 Fresnillo El Saucito Fresnillo 400 Fresnillo Primero Pan American 300 San Dimas La Colorada 200 Endeavour Guanacevi 100 0 0 100 200 300 400 500 600 700 800 900 Production Grade 2013 (Ag
Slide 5: Historical silver production and grade
88% 85% 89% 93% 93% SILVER SILVER SILVER SILVER SILVER RECOVERY RECOVERY RECOVERY RECOVERY RECOVERY 2 1,114 1,023 846 814 796 1.5 718 Ag (million oz) 1 0.5 0 2008 2009 2010 2011 2012 * 2013 Ag (g/t) * Production was disrupted by an illegal blockade of the mine site 4 www.excellonresources.com
Slide 6: 2013 total cash cost per Ag oz payable
$25.00 2013 Total Cash Cost / Ag oz Payable $20.00 $20.23 $15.00 $16.05 $15.87 $15.67 $12.80 $10.00 $10.67 $7.48 $5.00 $0.00 U.S. Silver Alexco Scorpio Great Excellon Aurcana SilverCrest Panther * Information is based on public disclosure documents 5 www.excellonresources.com
Slide 7: Undervalued relative to peers
$184 9-Mos 2014 Mine Operating Earnings $118 $12 $12 9-Mos 2014 Adjusted Net Income (Loss) Market Capitalization $43 $8 $39 $38 Mine Operating Earnings, Net Income and $34 $27 $5 $25 $4 Market Capitalization ($ M) $4 $3 $- AUM USA AXR SPM GPR AUN EXN SVL $(1) $(4) $(2) $(3) $(3) $(4) $(3) UNDERVALUE
Slide 8: Focused on cash flow generation
9-Mos 2014 2013 2012 Tonnes Milled 52,535 69,862 48,199 Ag (g/t) 591 718 846 Grades Lead (%) 6.70 6.14 6.75 Zinc (%) 9.03 8.00 11.81 Ag (oz) 956,586 1,409,852 1,081,165 Metal Production Lead (Ib) 6,378,867 7,342,108 5,731,160 Zinc (Ib) 8,418,840 9,876,955 10,450,813 Ag (%) 92.2 92.6 93.4 Recoveries
Slide 9: All-in sustaining cost calculation
9-Mos All-In Sustaining Cost Calculation 2013 2014 Total Cash Costs per payable silver oz $11.66 $10.01 General and Administrative Costs (cash) $2.85 $3.08 Share-based Payments (non-cash) $0.67 $1.26 Reclamation Costs (non-cash) $0.16 $0.14 Exploration Sustaining Capital $0.79 $1.91 Capital Expendit
Slide 10: Revenue by metal
Leveraged to Soaring Zinc Price 1 Year Zinc Spot Stable Revenue Contributions from Base Metals $60.0 Silver $50.0 Lead Zinc Revenue by Metal ($ M) $40.0 $40.8 $30.0 1 Year LME Zinc $29.5 $25.5 Warehouse Stocks Level $20.0 $10.0 $6.1 $4.8 $6.5 ~$13 $7.4 $7.8 $7.0 m/y $- 2011 2012 2013 25% 30% 35% 9 w
Slide 11: Excellent infrastructure, access and security
National Highway 49D To Bermejillo (4 km) & (Mexico City to US Border) Torreon International Airport (55 km) Hydro Corridor Crusher Mine Office/Warehouse/ Safety & First Aid Mine Entrance Machine Shop Dry EXCELLENT INFRASTRUCTURE, ACCESS AND SECURITY 10 www.excellonresources.com
Slide 12: La Platosa 2013 Mineral Resource Estimate
• 453,309 tonnes mined at 974 g/t Ag, 7.9% Pb and 9.5% Zn – 2005 to 2013 • Remaining resource at over 1 kg/t AgEq La Platosa 2013 Mineral Resource Estimate Tonnes Ag Pb Zn AgEq Ag Pb Zn AgEq Category (‘000s) (g/t) (%) (%) (g/t) (M oz) (M lb) (M lb) (M oz) Measured 42 825 8.62 11.31 1,358 1.1 7.9 10.
Slide 13: Significant high grade production remaining
PRODUCTION GUIDANCE 2014 Ag Pb Zn Ag Eq Tonnes 1.1 – 1.3 million ounces Ag Area/Manto (kt) (g/t) (%) (%) (g/t) 7.5 – 8.5 million lbs Pb 6A/6B 68 753 8.51 10.79 1,271 9.0 – 10 million lbs Zn Guadalupe 18 857 9.24 12.60 1,438 2.1 – 2.3 million ounces AgEq Guadalupe S. 26 939 8.06 14.08 1,514 623 83 1,
Slide 14: Top silver producing country in the world
Major CRDs CRDs 1 Cerro San Pedro: 151 Mt (New Gold) 11 14 2 San Martin-Sabinas: 120 Mt (Peñoles) 17 3 Terrazas: 87 Mt (Andromeda) 12 4 Santa Eulalia: 50 Mt (Peñoles) 3 4 5 Penasquito: 45 Mt+ (Goldcorp) 6 La Negra: 40 Mt (Aurcana) 7 7 Naica: 35 Mt (Peñoles) 8 18 8 Santa Barbara: 30 Mt+ (Peñoles) 9 C
Slide 15: High-grade mantos found on periphery of a CRD system
The high-grade mantos of Platosa are found on the periphery of a major Carbonate Replacement Deposit System (CRD) La Platosa Mine Uplifted Block Dikes & Faults Veins Anomalous Alteration Ag, Pb, Zn, F Boundaries Skarn Distal Mantos up to Contact 8 km from Source Rincon del Caido Discovery Drilling P
Slide 16: Rincon del Caido discovery
RINCON DEL CAIDO DISCOVERY PERIPHERY OF THE SOURCE? 1.6 m @28 g/t Au 0.25 m @ 471 g/t Ag, 2.6% Pb, 0.5 g/t Au INTERVAL WIDTH AG LEAD ZINC AU DDH NO. (M) (G/T) (%) (%) (G/T) LP1019 55 132 3.1 1.7 0.08 0.2 m @ 363 g/t Ag, 8.18% Zn, LP1023A 43 146 2.76 1.85 0.22 0.7 g/t Au LP1024 16 107 2.87 2.18 0.11
Slide 17: Significant room to grow resources
MINERAL RESOURCES 700 m 800 m CURRENT RESOURCE AREA COVERS ONLY 56 HA OF A 41,000 HA LAND PACKAGE SIGNIFICANT ROOM TO GROW RESOURCES 16 www.excellonresources.com
Slide 18: Capitalizing on opportunities in volatile markets
• Acquired brand new, scalable, 650 tpd mill ($15M value) with 45% spare capacity in June 2009 • 41,000 ha of mineral rights on primary silver belt • $22M of loss carry-forwards, still creating value • Ag recovered from Platosa has increased from 70% pre-acquisition to +90% today 2006-08 2007 2008 2
Slide 19: Community involvement
Ongoing Involvement • 100% Mexican workforce of 352 employees and contractors • Engaging with local communities of Bermejillo and Mapimi • Partnering with local, state and federal governments • Sustainable community investments in health, education and social infrastructure Active Memberships 18 www
Slide 20: Production, exploration, growth
PRODUCTION Produce 2.1 to 2.3M AgEq oz Generate positive cash flow Enhance low-cost profile EXPLORATION Discover new high-grade mantos near existing operations, follow up on Source style discovery GROWTH Analyze and pursue acquisition opportunities 19 www.excellonresources.com
Slide 21: Share structure, trading summary, key shareholders
SHARE STRUCTURE TRADING SUMMARY* Issued & Outstanding: 55.0M TSXN:EXN OTC:EXLLF Options: 3.1M 90-Day Av. Daily Vol: 41,440 34,039 RSUs: 0.3M 52-Week Range: $0.56-$1.71 $0.49-$1.55 DSUs: 0.2M Market Cap: $36M Fully Diluted: 58.6M Average Option Price: $2.70 MANAGEMENT & KEY SHAREHOLDERS Sprott Asset
Slide 22: Premier producing silver asset
PREMIER • High grade, low cost, cash flow PRODUCING SILVER ASSET • Solid mine life remaining • Focussed on generating cash flow at low silver prices POSITIONED FOR GROWTH • Ability to capitalize on undervalued assets through IN A VOLATILE MARKET intelligent acquisitions FIRST MOVER ADVANTAGE • Signi
Slide 23: Board of directors
Peter Crossgrove Orders of Canada and Ontario. Vice-Chair, Detour Gold; Director of Lake Executive Chairman Shore Gold. Former CEO of Placer Dome; Director of Barrick Gold; Founder of Masonite International. Former Treasurer of Care International. Thor Eaton Canadian businessman and philanthropist.
Slide 24: Management team
Brendan Cahill Former VP Corp. Dev. of Pelangio Exploration and M&A/securities lawyer (Davies Ward Phillips & Vineberg LLP). Member of the Young President and CEO Presidents’ Organization, the Law Society of Upper Canada and a board Member of the Mining Association of Canada. Rupy Dhadwar Appointed
Slide 25: Appendix
Appendix www.excellonresources.com
Slide 26: 2013 silver equivalent ounces produced
2.0 60 100 2013 Silver Equivalent Ounces Produced 2013 Silver Equivalent Ounces Produced ~ 2.8 ~ 2.6 50 Shares Outstanding/ 40 2.8 2.8 2.1 30 20 10 0 Scorpio Great Panther SilverCrest Aurcana US Silver and Excellon Mining Mines Gold Resources * Information is based on public disclosure documents 25
Slide 27: Silver supply and demand
Exchange Inventory 1% ETF Inventory 0% - Record levels of physical demand - 13% increase in physical demand to 1,081M oz. in 2013 vs. 954M oz in 2012 Jewelry - Largest physical deficit since 2008 9% - Total supply of 978M oz. in 2013 vs. 1,005M oz in 2012 Coins & Bars 11% - ETF holdings held on to r
Slide 28: Our vision and investor relations contact
Our vision is to be a premier silver producer by capitalizing on generational opportunities and striving to always do better for our shareholders, employees and neighbouring communities Nisha Hasan Director, Investor Relations 416-364-1130 | info@excellonresources.com
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