Lundin Gold Inc. · TSX:LUG
Lundin Gold — Investor Presentation (February 2016)
26 slides from Lundin Gold's investor presentation, February 2016
Slide 1: Investor Update
Creating A Leading High Grade Gold Company Investor Update February 2016
Slide 2: Disclaimers
Disclaimers Forward-Looking Statements Certain information contained in this presentation, including any information relating to the Fruta del Norte Project, and any other statements regarding Lundin Gold’s future expectations, beliefs, goals or prospects constitute forward-looking information withi
Slide 3: Lundin Gold
Lundin Gold ► Vancouver and Quito-based ► Listed on TSX and Nasdaq Stockholm under the trading symbol “LUG” ► Acquired the Fruta del Norte (FDN) project in December 2014 ► Focusing on developing FDN in a manner that is safe for all employees, respects the environment and is beneficial to local commu
Slide 4: Fruta del Norte
Fruta del Norte ► FDN is among the largest and highest grade undeveloped gold projects in the world 7.26 million oz (23.5 million t at 9.59 g/t Au) Indicated and 2.55 million oz (14.5 million t at 5.46 g/t Au) Inferred Substantial potential to expand existing resource ► FDN can move quickly thro
Slide 5: Ecuador: Creating an Attractive Mining Investment Climate
Ecuador: Creating an Attractive Mining Investment Climate ► Ecuador currently has an undeveloped large scale mining sector ► Policy is shifting towards increasing foreign investment in various aspects of the Ecuadorian economy ► Government/President Correa are encouraging investment in the mining se
Slide 6: Recent Significant Developments in Mining
Recent Significant Developments in Mining Announcement of Start of Construction of Mirador Copper Project (December 21, 2015) Completion of Fruta del Norte Exploitation Agreement (January 14, 2016) 6
Slide 7: What is an Exploitation Agreement?
What is an Exploitation Agreement? ► Exploitation Agreement defines fiscal terms (royalty, tax, calculation methodology), establishes mining rights, title to concession and a legal framework to finance the project ► Long Term: Lundin Gold has right to develop and produce gold from Fruta del Norte fo
Slide 8: Summary of Fiscal Terms
Summary of Fiscal Terms Previous Project Terms Current Royalty 5 – 8% based on Au price 5% Advanced Royalty $65 million $65 million 1st Installment - $40 M 1st Installment - $25 M 2nd Installment - $25 M 2nd Installment - $20 M 3rd Installment - $20 M Advanced Royalty Recovery Over 10 yr period Over
Slide 9: FDN Location
FDN Location ► Located in southeast Ecuador, bordering Peru ► Nearest city is Loja (~80 km away) 4th largest city in Ecuador University town Population of ~180,000 ► Vehicle access from Loja is via a 150 km long paved highway to the town of Los Encuentros 40 km gravel road connects Los Encue
Slide 10: Mineral Concessions & Surface Rights
Mineral Concessions & Surface Rights ► Land package consists of 33 mining concessions, 100% owned by Lundin Gold’s wholly owned subsidiary Aurelian Ecuador SA FDN Project area of approximately 4,660 ha and other concession area of approximately 70,500 ha Concessions are subject to a 1% NSR royal
Slide 11: FDN Mineralization
FDN Mineralization ► The orebody is 1,670m along strike x 700m down dip x 150m- 300m wide Near surface access and amenable to bulk underground mining Crustiforme- Colloforme ► Mineralization is characterized by quartz sulphide & carbonate 1.7 m @ 763 g/t Au stockwork veining and Cockade brecciatio
Slide 12: NI 43-101 Mineral Resource
NI 43-101 Mineral Resource ► Current Technical Report confirms high grades and scale; Indicated category accounts for ~74% ► FDN Technical Report resource estimate (October 2014): Category Tonnage Gold Grade Silver Grade Gold Contained Silver Contained (mmt) (g/t) (g/t) (mmoz) (mmoz) Indicated 23.5
Slide 13: Feasibility Study Work Program
Feasibility Study Work Program ► Field work substantially completed 12,000 m drilling and pitting program to support mine and civils engineering Environmental baseline work ► Strong Feasibility Study engineering team in-house and utilizing AMEC FW, Santiago – lead consultant and metallurgy, pr
Slide 14: Mining Engineering
Mining Engineering ► Mine design envisages production of 3,500 tonnes per day ► 2015 field work program provided mine geotechnical and hydro-geological data for mine access options assessment and life-of-mine design ► Mine design and production plan under development using transverse long hole stopi
Slide 15: Process
Process ► Plant flow-sheet defined – refinement of equipment sizes based on metallurgical test work near completion 15
Slide 16: Metallurgical Results
Metallurgical Results Composite Sample Results * ► Gold recovery of 91.7 to 94.2% Au Head Open Cycle Locked Cycle Au ► Approximately 30% of gold to be Grade Au Recovery Au Recovery Concentrate produced as dore (%) (%) (%) Grade (g/t) Comp 1 12.1 95.1 94.2 136.7 ► Clean, precious metal rich concentra
Slide 17: Environmental
Environmental ► Baseline studies completed ► Mine EIA approved and license received in Q1 2015 ► Amendment of EIA to include plant and associated infrastructure submitted to the MoE to support overall project development timeline ► Socio-economic evaluation for the transmission line options complete
Slide 18: Feasibility Study – Infrastructure
Feasibility Study – Infrastructure ► Power supply options assessment complete ► Site-wide water management plan well advanced ► Site access road fully permitted – detailed design underway ► Logistics study underway – mine construction, operations and product export phases Puerto Bolivar Puerto Guaya
Slide 19: Current Project Schedule
Current Project Schedule 2016 2017 2018 2019 Task Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Feasibility Study Environmental Permitting Finalization of EA Agreement (01/14/16) Submittal of Phase Change Application (06/16) Review of Phase Change Application Approval of Application (08/16) Financ
Slide 20: Community Relations
Community Relations ► Lundin Gold’s vision for community investment is to create shared value for host communities in coordination with local and national governments ► The Company is focused on jointly-identified priorities that align with established community development plans ► The Company seeks
Slide 21: Significant Exploration Upside
Significant Exploration FDN Upside ► 2015 Exploration work focused mainly on key target areas outside of La Zarza concession Castillos (up to 20 km south of FDN) Alejandro ► Geophysics (IP), detailed prospecting and mapping carried out on best anomalies and currently have 5 targets drill ready Rio B
Slide 22: Emperador Target
Emperador Target Emperador ► First of several planned targets to be drilled Target ► Favorable Geological & Structural Model ► Sinter recently found in outcrop A B ► Coincident IP Chargeability Anomaly, subtle Resistivity ► Favorable Geochemistry (Au, As) Emperador Schematic Geological Section Targe
Slide 23: Strong Management Team
Strong Management Team Board of Directors Management Lukas Lundin, Chairman Chester See, CFO Ron Hochstein, President and CEO Tony George, VP Project Development Jim Cambon Nicholas Teasdale, VP Exploration Carmel Daniele Nathan Monash, VP Business Sustainability Ian Gibbs Sheila Colman, VP Legal an
Slide 24: Analyst Coverage
Analyst Coverage ► Currently covered by eight analysts Rating Modeling LoM Avg. Au Target Price Production Mine Life Cash Cost AISC NAV Broker Date (CAD) Rating CAPEX ($M) (koz) (years) ($/oz) ($/oz) ($M) BMO 19-Aug-15 $5.00 Buy $800 321 10 $543 n/a $1,000 GMP 26-Mar-15 $6.75 Buy $745 360 13 $431 $5
Slide 25: Why Lundin Gold?
Why Lundin Gold? ► FDN is among the largest and highest grade undeveloped gold projects in the world, with a resource that can support a large scale gold producer ► Completion of Exploitation Agreement negotiations – de-risks project from a fiscal viewpoint ► FDN is a robust project benefiting from
Slide 26: www.lundingold.com TSX and Nasdaq Stockholm: LUG
Head Office Corporate Office Lundin Gold Inc. Aurelian Ecuador SA Suite 2000, 885 West Georgia Street Av. Amazonas N37-29 y UNP Vancouver, B.C., Canada V6C 3E8 Edificio Eurocenter, Piso 5 +1 (604) 689-7842 Quito, Ecuador +593 (2) 299-6400 www.lundingold.com TSX and Nasdaq Stockholm: LUG Lundin Gold