Spanish Mountain Gold Ltd. · TSXV:SPA
Spanish Mountain Gold — Investor Presentation (March 2018)
25 slides from Spanish Mountain Gold's investor presentation, March 2018
Slide 1: Spanish Mountain Gold
Spanish Mountain Gold Multi‐Million Ounce Gold Resource in British Columbia Two‐Zone Approach March 2018 TSX‐V : SPA
Slide 2: Cautionary Statement
Cautionary Statement 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 caus
Slide 3: Highlights
Highlights • 3.88 million ounces Measured & Indicated (“M&I”) + 4.11 million ounces Inferred Gold Resources* • Low political risk and close proximity to: Infrastructure Labour Suppliers Existing mines • Low cost operations • Advanced Stage Project: >$75m total expenditures to date 814 dr
Slide 4: Project Location
Project Location • Close to producing mines – Mount Polley, QR Mine & Gibraltar • Paved highway access Spanish Mountain Gold • Hydroelectric power available • Support Centre in Williams Lake – labour, CAT Dealership, maintenance & supplies TSX‐V:SPA 4
Slide 5: The BC Advantage
The BC Advantage • Politically stable jurisdiction • Cheap electrical power ‐ < 6¢/kWh • Among lowest corporate tax rates in Canada • Successful mine permitting in recent years: New Afton ‐ November 2007 Mount Milligan ‐ September 2009 Copper Mountain ‐ April 2010 Red Chris ‐ May 2012 Quin
Slide 6: Resource Table
Resource Table Spanish Mountain Gold Resource* (at a 0.15 g/t gold economic cut‐off) Tonnes Gold grade Gold Category (Million) (g/t) (Million oz) Measured 46 0.53 0.77 Indicated 260 0.37 3.10 M&I Total 306 0.39 3.88 Inferred 450 0.28 4.11 First‐Zone’s PEA processed only M&I resource: ~35 million t
Slide 7: Track Record of Resource Growth
Track Record of Resource Growth* 9.0 8.0 M&I Inferred 7.0 6.0 4.11 Gold (Million Oz) 5.0 3.65 3.50 4.0 4.04 3.88 3.0 3.5 0.29 3.18 2.0 0.10 2.58 2.17 1.0 1.75 0.0 2008 2009 2011 2012 2014 2017 Year of Resource Estimate Release * At economic cut‐off grade TSX‐V:SPA 7
Slide 8: New Two-Zone Approach
New Two‐Zone Approach Development of pit delineated high grade core (First Zone) as a standalone operation Reduce throughput from 40,000 tonnes per day (“tpd”) to 20,000 tpd Clear Advantage ● First Zone requires significantly lower initial capex & generates much better economics with a longer mi
Slide 9: First Zone Production vs. Total Resource
First Zone Production vs. Total Resource Inferred Resource Measured & Indicated Resource 1.44 Moz 4.11 Moz First Zone Production 62% of M&I 2.44 Moz 30% of Total Resource TSX‐V:SPA 9
Slide 10: Resource Model
Resource Model Cross Section of Proposed Pit • 90% of pit delineated resource is M&I • Inferred treated as waste in PEA. TSX‐V:SPA 10
Slide 11: Overall 90% Gold Recovery
Simple Metallurgy/ Conventional Milling Primary Grind Overall 90% Gold Recovery Flotation Regrind CIL Doré TSX‐V:SPA 11
Slide 12: Economics: First Zone
Economics: First Zone 2017 Preliminary Economic Assessment Highlights * Processing Rate 20,000 tonnes per day Mine Life 24 years Total Gold Production 2.2 million oz 157,000 oz/ yr (years 1 ‐ 5) Average Annual Gold Production 142,000 oz/ yr (years 1 – 10) 92,000 oz/ yr (life of mine) Strip Ratio 1.4
Slide 13: Below Average AISC per Ounce
Below Average AISC per Ounce US$ / oz $1,000 $900 $800 $700 LOM $600 Medium Producers Small Producers First 10 yrs Large Producers $500 $400 First Zone $300 First 5 yrs $200 $100 $0 > 1,000 Koz/ yr > 200 Koz/ yr < 200 Koz/ yr Source: CIBC World Markets; 2016 reported all‐in‐sustainable cost (average
Slide 14: Robust Economics Even at Weak Gold Prices
Robust Economics Even at Weak Gold Prices $900 28% Pre‐tax IRR Post‐tax NPV Pre‐tax NPV Post‐tax IRR $800 26% $700 24% PEA Base Case Internal Rate of Return NPV (C$ Million) $600 22% $500 20% $400 18% $300 16% $200 14% $100 12% $‐ 10% 1,100 1,150 1,200 1,250 1,300 1,350 1,400 (5‐yr low) Gold Price (
Slide 15: Opportunity: Second Zone
Opportunity: Second Zone ● PEA Mine Plan only incorporates Measured & Indicated Resource in cash flow model ● Much higher grade than average resource First Zone • 0.8 g/t over 5 years • 0.7 g/t over 10 years ● Sustainable standalone operations for >24 years ● Multi‐million ounces defined within curr
Slide 16: Two Zone Approach: Changing Scope
Two Zone Approach: Changing Scope 100% Resource 100% Resource/ Project Second Zone 2012 PEA First Zone Opportunities* Processing Rate 40,000 t/d 20,000 t/d Mill expansion PHOENIX ZONE Already in place: Infrastructure Initial Capex C$763 M C$ 507 M Equipment labour LOM Au Production 2.8 M oz 2.
Slide 17: Adding Significant Value: Now & Future
Adding Significant Value: Now & Future 100% 100% Resource/ Project Resource Now Future Second Zone 2012 PEA First Zone Opportunities* PHOENIX ZONE Assumed US$ 1,462 US$ 1,250 ($212 lower) Gold Price Post‐tax C$ 295 m C$ 482 m (up 63%) Additional NPV/ NPV @ 5% Option Value Post‐tax 12% 19% (up 7%) Im
Slide 18: Further Exploration Potential
Further Exploration Potential Phoenix Zone Core Drilling Highlights: (Similar grades to Main Zone) • 92.46 m grading 0.58 g/t Au including 7.50m grading 4.12 g/t Au • 55.40 m grading 0.82 g/t Au • 60 m grading 0.48 g/t Au • 9.10 m grading 0.67 g/t Au • Phoenix Zone has a strike length just over 2.5k
Slide 19: Community Engagement
Community Engagement • Excellent relationship with Community of Likely • Protocol Agreements signed with three First Nations bands for participation during Environmental Assessment (“EA”) and permitting review; providing a framework towards Impact Benefits Agreements • Positive relationship for ongo
Slide 20: Share Structure
Share Structure CAPITAL STRUCTURE Net Cash $3+ million Shares Issued and Outstanding 232 million Warrants 26 million Options 4 million Market Capitalization $30 million 20%* Retail 55% 25% Institutional Management* * A Director and CEO are two largest individual shareholders TSX‐V:SPA 20
Slide 21: Latest Project Activities
Latest Project Activities 2018 (expected) Strategic 2017 Objectives Study/Program Q1 Q2 Q3 Q4 Reduce Capex by $250m Updated PEA Improve Project Economics Permitting for field work + placer Allow Resumption of program significant Field Work Address Community Concerns Archeological impact asse
Slide 22: Why the Project Works...
Why the Project Works... Low Risk Jurisdiction Safe / Pro‐mining Jurisdiction Agreements with 3 First Nations Bands Among Lowest Tax Jurisdiction Excellent Infrastructure Low Cost Operations Two‐Zone Approach: Lower Initial Capex High Grade Core 24+ Yrs Mine Life Proximity to: Grid Power Lar
Slide 23: Why the Project is Feasible: a case study
Why the Project is Feasible: a case study Fort Knox @ time of Spanish Mountain Gold Metrics Construction Project (1995/96) (2017) comparable Alaska (42km from B.C. (70km from Williams accessibility Location comparable Fairbanks) Lake) initial grade Mill Throughput 36,000 tpd 20,000 tpd cost inflatio
Slide 24: Management and Directors
Management and Directors Larry Yau Canadian Chartered Professional Accountant and has more than 20 years of financial and business experience, gained primarily in the mining and resources sectors with companies including Placer CEO Dome and Farallon resources. Professional geologist with over 30
Slide 25: Contact Information
Contact Information Spanish Mountain Gold Ltd. 1120‐1095 West Pender St. Vancouver, B.C., V6E 2M6 Canada www.spanishmountaingold.com For more information please contact: Larry Yau, CEO Tel: +1 (604) 601‐3651 Email: info@spanishmountaingold.com or Corporate Communications Tel:+1 (604) 398‐4377 TSX‐V:
Spanish Mountain Gold — Investor Presentation (March 2018) on 6ix