Excellon Resources Inc. · TSXV:EXN
Excellon Resources — Investor Presentation (July 2015)
37 slides from Excellon Resources's investor presentation, July 2015
Slide 1: Mexico's highest grade silver producer
Mexico’s highest grade Silver producer TSX:EXN | OTC:EXLLF Investor Presentation – July 2015
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: Making every ounce more profitable
Compelling PEA with 118% IRR at $17/oz Ag A simple strategy $9.00 all-in sustaining costs with significant US$58 million net free cash flow upside potential Mine life to 2020 Edge of a virtually untouched CRD system Making every ounce more profitable 2 TSX:EXN; OTC:EXLLF WWW.EXCELLONRESOURCES.COM
Slide 4: La Platosa Mine
• 100% owned underground silver-lead- zinc mine • Over 500,000 tonnes mined since production commenced in 2005 • Remaining resources at over 1.2 kg/t AgEq – one LA PLATOSA MINE of the richest silver TORREON MIGUEL AUZA MILL resources in the world DURANGO FRESNILLO • Safe jurisdiction with MEXICO CIT
Slide 5: La Platosa 2014 Mineral Resource Estimate
La Platosa 2014 Mineral Resource Estimate Tonnes Ag Pb Zn AgEq Ag Pb Zn AgEq Category (t) (g/t) (%) (%) (g/t) (M oz) (M lb) (M lb) (M oz) Measured 28,000 781 7.85 11.52 1,305 711,000 4,896,000 7,188,000 1,187,000 Indicated 400,000 758 8.31 9.77 1,248 9,747,000 73,214,000 86,098,000 16,046,000 M&I 42
Slide 6: Resources by manto and current production
Ag Pb Zn Ag Eq Tonnes Area/Manto (kt) (g/t) (%) (%) (g/t) 6A/6B 34 664 7.95 10.77 1,171 • Mantos – sub-horizontal Guadalupe S. 22 866 7.47 13.05 1,420 massive sulphide bodies Rodilla 82 674 6.96 10.55 1,148 NE-1 159 555 7.90 7.21 967 • Production currently 623 83 1,231 10.25 9.43 1,766 limited to <2
Slide 7: Capital and labour intensive, unpredictable mining process
Reactive pumping when inflows occur, focus on intensive grouting to keep water out of the mine Capital and labour intensive, unpredictable mining process 6 TSX:EXN; OTC:EXLLF WWW.EXCELLONRESOURCES.COM
Slide 8: Steep and localized cone of depression around mine workings
Steep and localized cone of depression around mine workings 7 TSX:EXN; OTC:EXLLF WWW.EXCELLONRESOURCES.COM
Slide 9: Enhanced pumping to dewater ahead of development
90m MANTO 6A GUADALUPE 2009 – Jan 2015 130m 160m GUADALUPE PIERNA Dec 2015 – SOUTH RODILLA Dec 2016 623 220m • Enhance existing pumping in fault-targeted underground wells NE1 • Maintain higher level of pumping through surface wells • Achieve dry conditions in advance of mine development General mod
Slide 10: Proactive pumping to increase cone of depression
Proactive pumping to increase cone of depression and eliminate the possibility of water entering the mine High-efficiency pumps, pumping directly from water-bearing faults 9 TSX:EXN; OTC:EXLLF WWW.EXCELLONRESOURCES.COM
Slide 11: Benefits of dewatering: development, equipment, grouting, electricity
Increased development per heading from 5-12/m Development to 50+ m/month Increased equipment operating cycles from Equipment 125 hrs to 250 hrs Elimination of probe hole drilling and grouting Grouting costs under permanent dewatering system Moving from maintenance intensive operating Maintenance con
Slide 12: Dewatering project timeline 2015-2016
2015 2016 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Hydro/ engineering study Re-engineering existing pumps, installing high efficiency pumps PEA by RPA Drilling contract to be awarded Confirmatory test wells in preparation for surface wells Drilling 4 surface dewatering wells Drilling underground drain wells Drawdown in
Slide 13: Capital cost: US$9.9M
Description Cost • No significant capacity constraints Pumps $3.7M on increasing production beyond current rates Drilling $4.5M • Spare mill, ramp, personnel and Technical studies $0.2M equipment capacity of 50% or Power infrastructure $0.7M more • Pumps to be supplied by Contingency $0.8M Technosub
Slide 14: After Tax Economics
After Tax Economics ($17/oz silver, $0.90/lb lead, $1.00/lb zinc) Ag (oz) $13.60 $15.30 $17.00 $18.70 $20.40 Pb (lb) $0.72 $0.81 $0.90 $0.99 $1.08 Zn (lb) $0.80 $0.90 $1.00 $1.10 $1.20 NPV7.5% (‘000s) $(662) $19,405 $39,472 $59,539 $79,607 IRR 6% 56% 118% 221% 466% Payback 3.0 years 2.3 years 1.9 ye
Slide 15: Significant impact on production & future cash flows
LOM (2015 – 2020) Peak Production (2016 – 2019) Net Cash Flow $54.4 million $58.4 million Average Annual 1.6 million ounces silver 1.9 million ounces silver Metal Production 10.4 million pounds lead 12.2 million pounds lead Recovered 11.7 million pounds zinc 14.3 million pounds zinc $7.58 total cash
Slide 16: Life of mine cost breakdown
LOM (2015-2020) Peak Production (2016-2019) Ag oz payable (‘000s) 8,492 6,932 Tonnes Produced 504,504 383,541 $M $/t $/oz $M $/t $/oz Mining 101.6 201.4 11.97 72.3 188.5 10.43 Processing 31.1 61.6 3.66 23.4 61.0 3.37 Operating Cash Cost 132.7 263.0 15.63 95.7 249.5 13.80 By-product credits (68.9) (1
Slide 17: Historical production and financial results
Q1 2015 2014 2013 2012 Tonnes Milled 13,828 64,206 69,862 48,199 Ag (g/t) 533 603 718 846 Grades Lead (%) 5.37 6.57 6.14 6.75 Zinc (%) 8.83 8.90 8.00 11.81 Ag (oz) 217,079 1,162,929 1,409,852 1,081,165 Lead (Ib) 1,252,796 7,515,720 7,342,108 5,731,160 Metal Production Zinc (Ib) 2,239,313 10,075,172
Slide 18: Revenue by Metal
Leveraged to Strong Zinc Fundamentals 1 Year Zinc Spot Stable Revenue Contributions from Base Metals $60.0 Silver Lead Revenue by Metal ($ M) $50.0 Zinc $40.0 $40.8 1 Year LME Zinc $30.0 $29.5 $25.5 $21.0 Warehouse Stocks Level $20.0 $10.0 $6.1 $4.8 $6.5 $7.1 $14m+ $- $7.4 $7.8 $7.0 $8.8 p.a. 2011 2
Slide 19: Top silver producing country in the world
Major CRDs CRDs 1 Cerro San Pedro: 151 Mt (New Gold) 10 13 2 San Martin-Sabinas: 120 Mt (Peñoles) 16 3 Terrazas: 87 Mt (Andromeda) 11 4 Santa Eulalia: 50 Mt (Grupo Mex.) 3 4 5 Penasquito: 45 Mt+ (Goldcorp) 6 Naica: 35 Mt (Peñoles) 6 7 Santa Barbara: 30 Mt+ (Grupo Mex.) 7 18 8 Charcas: 25 Mt (Peñoles
Slide 20: Mantos found on periphery of untouched CRD system
The high-grade mantos of Platosa are found on the periphery of a virtually untouched Carbonate Replacement Deposit (CRD) system 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 Discov
Slide 21: Significant room for new mineralization
MINERAL RESOURCES 700 m 800 m CURRENT RESOURCE AREA COVERS ONLY 56 HA OF A 41,000 HA LAND PACKAGE Significant room for new mineralization Prospective and undrilled ground at the edge of known resources 20 TSX:EXN; OTC:EXLLF WWW.EXCELLONRESOURCES.COM
Slide 22: Rincon del Caido discovery
Rincon del Caido discovery Periphery of the CRD 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
Slide 23: Rincon-Mantos Corridor Target Area
LA PLATOSA MANTOS Rincon-Mantos Corridor Target Area 7.25 metres @ 13.07 g/t Au, 55.46 metres @ 21.1 g/t Ag, 0.74% Pb 0.07 g/t Au, 132 g/t Ag, 3.13% Pb, 1.74 % Zn 22 TSX:EXN; OTC:EXLLF WWW.EXCELLONRESOURCES.COM
Slide 24: Miguel Auza mill and company assets
• Acquired brand new, scalable, 650 tpd mill ($15M value) in June 2009 from Silver Eagle Mines (currently with 45% spare capacity) • 15,000 ha of mineral rights on primary silver belt • $22M of loss carry-forwards, still creating value • Platosa Ag recovery has increased from 70% pre- acquisition (t
Slide 25: 100% Mexican, fully engaged, sustainable
100% Mexican Fully Engaged Sustainable Investments 352 employees and Local communities of Health, education & contractors Bermejillo & Mapimi social infrastructure We partner with local, state and federal governments to bring substantial advancements to our communities 24 TSX:EXN; OTC:EXLLF WWW.EXCE
Slide 26: Board of Directors
André Fortier Director of Ferrinov Inc. Former SVP of Noranda, CEO of Kerr Addison Chairman Mines, and Campbell Resources. Former Chairman of Conseil de Patronat du Québec. Thor Eaton Canadian businessman and philanthropist. Founder of Thor & Nicole Eaton Foundation. Alan McFarland Former director o
Slide 27: Management team
Brendan Cahill Former VP Corp. Dev. of Pelangio Exploration and M&A/securities lawyer President and CEO (Davies Ward Phillips & Vineberg LLP). Member of the Young Presidents’ Organization, the Law Society of Upper Canada and a board Member of the Mining Association of Canada. Rupy Dhadwar Chartered
Slide 28: Share structure and trading summary
SHARE STRUCTURE TRADING SUMMARY* TSXN:EXN OTC:EXLLF Issued & Outstanding: 54.9M 90-Day Av. Daily Vol: 40,737 7,737 Options: 3.4M 52-Week Range: $1.47-0.49 $1.35-0.39 RSUs: 0.6M Market Cap: CAD$28M DSUs: 0.5M Fully Diluted: 59.5M Average Option Price: $2.85 MANAGEMENT & KEY SHAREHOLDERS Sprott Asset
Slide 29: Compelling PEA with 118% IRR at $17/oz Ag
Compelling PEA with 118% IRR at $17/oz Ag $9.00 all-in sustaining costs $58M net free cash flow Small capital investment of $9.9M, with a quick payback Short time frame for implementation Current market cap of only US$24M Re-establishing the highest-grade silver mine with industry leading costs 28 T
Slide 30: Appendix
Appendix TSX:EXN; OTC:EXLLF WWW.EXCELLONRESOURCES.COM
Slide 31: Life of mine and peak production summary
LOM Peak Production (2015-2020) (annual avg.) (2016-2019) (annual avg.) Tonnes Ore (‘000s) 505 84 384 96 Ore/day tpd 256 256 274 274 Ag (g/t) 638 638 681 681 Head Grades Lead (%) 6.8 6.8 7.0 7.0 Zinc (%) 8.1 8.1 8.6 8.6 Ag (oz) 9,316 1,553 7,608 1,902 Lead (Ib) 62,424 10,404 48,644 12,161 Metal Prod
Slide 32: General model/not to scale
General model/not to scale 31 TSX:EXN; OTC:EXLLF WWW.EXCELLONRESOURCES.COM
Slide 33: Lowest cash G&A since 2005
9.0 8.0 7.0 6.0 Cash G&A ($ M) 5.0 4.0 3.0 2.0 1.0 - 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015* * Projected for the remainder of 2015 Lowest cash G&A since 2005, before production commenced 32 TSX:EXN; OTC:EXLLF WWW.EXCELLONRESOURCES.COM
Slide 34: All-In Sustaining Cost Calculation
All-In Sustaining Cost Calculation Q1 2015 2014 Total Cash Costs per payable silver oz $14.24 $13.76 General and Administrative Costs (cash) $3.01 $3.17 Share-based Payments (non-cash) $0.63 $0.61 Reclamation Costs (non-cash) $0.19 $0.17 Exploration Sustaining Capital $0.70 $0.85 Capital Expenditure
Slide 35: M&I Resource Grade versus production grade peers
900 800 Great Panther, Topia Excellon, La Platosa 700 M&I Resource Grade (Ag g/t) 600 MAG/Fresnillo, Juanicipio* 500 Fresnillo, El Saucito Fresnillo, Fresnillo 400 Primero, San Dimas 300 Pan American, La Colorada 200 Endeavour, Guanacevi 100 0 0 100 200 300 400 500 600 700 800 900 Production Grade 2
Slide 36: Reinforces Ag's significant upside leverage
Coin and bar purchases at all-time highs; strong jewelry Continued consumption; increased photovoltaic (solar) demand Physical Demand ETF holdings remained stable Scrap processing at lowest level in over a decade Gross profit margins contracted 22% in 2014 Growing Supply Deficit Mine supply expected
Slide 37: Our vision is to be a premier silver producer
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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