Golden Opportunity in Japan

0:08 Well, hello, everyone, and welcome to B Metals Live Investment Summit today, hosted by 6. I'm pleased to introduce our speakers for today. We have John Wilton, President and CEO, Derek Iwanaka, Vice President, Investment Relations and Corporate Development at B-Metals, and Tom Garrigan, Independent Director and B2Gold Senior VP, Exploration.

0:29 Our presenters will walk us through a company presentation and then we will be accepting questions live. So as a reminder, you can submit your questions at any time on the Q&A panel at the right-hand side of the screen and we will get to them after the presentation. And as always, the summit is being recorded and will be available to watch afterwards on SIX.com. So without further ado, I'll hand it over to you, John, to kick things off. Great. Thanks again, Dasha. Welcome, everyone, to this webinar that has the focus this time on our exciting new gold projects in Japan. Just to give a little bit of background for anyone new on one of our investor presentations such as this, B Metals was formed about 3.5 years ago. The founding directors were Clive Johnson, Tom Garrigan, Roger Richet and myself.

1:19 Our initial focus was base metals that we've subsequently expanded now to include precious metals as well in the portfolio. We'll talk to you about that during the presentation. Mark Connolly joined us about 18 months ago. Mark's based in Perth, Australia and was former MD of Papillon Resources that brought the world-class Fricola project which B2 has developed into a world-class gold mine in Mali. Dennis Sandsbury is an important member of our wider team. Dennis is a mining engineer by background and has really been responsible for designing and building both BIMA Gold and B2 Gold mines across the world.

2:07 My history briefly, before BIMETALS, I ran exploration and new business in Africa for Antofagasta PLC, a large Chilean producer. And during that time, one of our external go-to consultants on economic geology was the world-renowned Richard Salito, based in London. And when we started B Metals, Dr. Salito kindly agreed to join us as a technical advisor and has provided some some excellent insights into our existing projects and reviews of new projects that we have going on on an ongoing basis. I see Tom has joined us on the call. Many of you will know Tom's feet in the exploration and mining business.

2:55 And those numbers of metrics across the bottom of that slide, which Derek put together for us, really are a testament to really some exceptional value creation of the BIMA Gold and B2 Gold team through many decades of endeavour in the exploration and mining business.

3:14 This slide summarises that quite nicely and shows the value creation, both through discovery and project development, and importantly, the return of that value to investors and companies. We're at the early stage in B Metals, but we certainly see it as being the third company coming out of that same stable of huge depth of experience and founding investors in B Metals. And important to say now that the investor team is fully engaged on Bumetal. We have regular update calls and very excellent guidance to areas. Just to give you an indication as to our growth strategy and where our projects are located at this point in time.

4:04 We founded the company with our Pengeni project in northwestern Zambia, where we're exploring under a shallow covered terrain, looking for extension of the very prolific Zambian copper belt that's been the host to many world-class copper mines developed and put into production in that region. We brought in the South Mountain project about 2 years ago now as a way of bringing in a project more advanced,

4:36 a past producer, a high-grade underground project, and we see that as potentially a project that we can advance in a relatively short timeline to a production environment in the stable jurisdiction of Idaho in the USA. And it's most relevant to this presentation today, the real great opportunity of the Kazan Gold project and what that brings to us exploring for high-grade gold projects and discoveries in Japan. Probably important to say now that our growth strategy is really driven by geology, prospectivity and opportunity that has given us a global spread, but it's something the team have been used to handling projects in various destinations in the world, multiple time zones, but it's something we are very comfortable to do by having locally based driven teams on and around the projects in the various regions that feedback to the management of the company and obviously getting boots on the ground ourselves when possible on those projects.

5:51 So I think at this point, we'll get to the main focus of today's presentation, which is our golden opportunity in Japan. And Derek will give us a brief introduction to that and some of the history and culture related to gold in Japan. And then John will take us through something a bit about the background of the style of mineralization

6:13 that we're exploring for in the country. Thanks, John. You know, the reason we really put this presentation together is because we did have a number of questions when speaking to when speaking to investors about Japan. People weren't really making the connection between gold exploration and Japan. And so we thought that today's webinar, we could kind of focus more on the educational side of exploration in Japan and how this could really benefit the investors of B metals. Little bit of background since not many people seem that they're familiar with the history and the background. I mean, Japanese have been exploring for gold, have discovered gold long before anybody in North America.

7:02 So they're mostly just recovering it from waterways, rivers, streams, and the gold that they did recover was actually used for money, for gold coins, also for really decorating things. And if you've been to Japan, you've probably seen Kinkaku-ji in Kyoto or the Todai-ji Temple in Nara, which are beautiful demonstrations of what you can use for gold. But I mean, really, I guess they got more, I guess, larger scale mining around the 13th century is when they started to get into some larger actual real mines, not just recovering from stream beds. And the Sato mine in Nagato is probably the, well, it is currently the second largest gold mine.

7:52 We produce about 2.8 million ounces, so close to 3 million ounces of gold and another 822 million ounces of silver. That was over a quite a long period of time, over 3 centuries of time. But interesting that they were able to mine as far back as the 13th century. And during World War II, pretty much all gold mining ceased. And really they focused on either producing copper or iron for the war efforts. And really, very few mines restarted again. So most of them were permanently shut down after the war. It wasn't really until the late 1970s when gold prices were starting to climb that Japan decided that they should look around in their own backyard and see if there are some gold deposits that are of significance.

8:42 And lo and behold, Sumitomo discovered the Hishikate gold mine in 1981. I think John will talk you a little bit through the Hishikate mine itself and its huge potential as well and the implications for us. Thanks, Derek. Yeah, you can see we're down on the Southwestern Island in Japan from that inset map there. As Derek mentioned, in the 1980s, Hishikari was discovered on the back of a significant amount of drilling and initially on some very narrow, high-grade gold intersections of vein material. But over time, the Hishikari gold mine has developed into an 8 million ounce deposit and importantly, especially for us, basically the world's highest substantial gold mine grain producer.

9:45 That mineralization is hosted in the young, generally volcanic rocks that are developed throughout Japan. It's situated on, as we would call, the ring of fire around the Pacific. And it's an underground operation with a relatively small footprint in terms because of the very high-grade nature of the ore produced, very easy to control the waste products and very small footprint. And the impression of the mining operation, it looks more like a factory than some people would think about the normal mining operation. But that's similar geology And structural situation is developed throughout Japan, which makes the whole country perspective for similar styles of gold mineralization.

10:40 And now I'll pass over to Tom to sort of talk you through a little bit about what we would see in a simple way the geological model that's driving us and others exploring for these deposits in Japan itself. So the projects that we're looking at right now are classified as low-sulfidation epithermal gold deposits. And in this diagram on the left, it would represent things you see in the right-hand side, sort of sitting above felsic intrusions

11:13 and are formed near surface through a variety of methods, either fluid mixing or boiling created by fracturing or earthquakes and or overpressuring in a fluid state belowhead. And some of the examples of these deposits, you often hear people talk about low-sulfur addition deposits and everybody says, well, they tend to be small. And yes, they can be small, but they also can be very, very large. And some of the ones that are shown here, you've got Lahir,

11:42 Hawaii in New Zealand, Masbati, which is one of our mines in one of B2's mines in the Philippines. The Kupal project, which I was heavily involved in for right from the beginning through to when BEMA was taken over by Kinross, which had 6 million ounces of 20 grams gold and 200 grams silver at the time of the start of production. And then the Julieta, which is a smaller project, but was still very high grade, again, in the neighborhood of 20 grams gold. And these sort of projects are typical of what we think, you know, you throw in Ishikari, what we think is going on in our projects in Japan. We think they're very, very similar and they do have a wide range of potential from, you know, sub-million to multi-million ounce deposits.

12:36 So, when we picked these up, we felt that these were excellent targets and excellent project potential. Whoops. Sorry, are you advancing that, Derek, or is that me? There, and here's examples of what these things look like. Now Lahir Mine, which is still an active hot spring system and then Rotorua in New Zealand, which is actually hot springs that surface, but there's a gold mine being formed underneath it or gold deposits being formed underneath it on an active basis, too hot to mine, mind you. And then some of the other ones in Kagoshima and other hot springs in Japan are sitting above active systems that are forming gold deposits or gold silver deposits.

13:28 Just before, I'm sure John's going to talk more about this, but an interesting side story here on Cato. Drilling Cato has been a bit of a difficult thing. It's highly clay alternate surface and you have to get through some of the centre, so the whole deposit is actually

13:46 preserved. But an interesting sidebar to that is when we were working at Kupel, the north side of Kupel, which hosted somewhere around 2 million ounces, we lost 5 or 6 holes early on just because of the high clay nature of the rocks and some of the center that was at surface, very much like what we're seeing at Cato. So this is not unheard of to have these kinds of deposits having difficult drilling conditions. And for that, I'll pass on to you, John. Thanks, Tom. Thanks for those insights. Very interesting, and especially the analogy with difficult drilling at Kupo. So basically we acquired in April this year the company Kazan Resources that had previously been privately held And that came with a portfolio of actually 5 properties that had been expertly selected in Japan at that time when it was opening its doors to foreign investment in the mining and exploration business really for the first time in Japan.

14:51 The one we're focusing on this talk today is really the Kato project. That's if you want to call it the most advanced flagship project for us in Japan at this point, but the other 4 projects do possess very compelling geological setting and historical results and work that was conducted by the Japanese in the last, you know, in the 1990s specifically. So just a little bit about, you know, who the competitors in Japan are, and I think this is really adds to a lot to the excitement of exploring there. Very few places in the world where you get a gold terrain that can be in high-grade deposits that Tom's just been referring to, and we've got in that table in our news release yesterday.

15:46 Normally, they would be either purely secured by 1 or 2 of the major companies and or there would be a plethora of junior companies exploring around those majors in those areas. But at this point in time in Japan, there's only 3 recognized Western companies exploring there. That's Japan Gold with its alliance with Barrick and Irvine Resources having Newmont as a significant shareholder and now ourselves as B Metals with the support of the senior Gold producer B2 Gold. The way we structured the transaction and the project afterwards I think is also very important in that we've managed to preserve the continuity of certain individuals in Tom's exploration team who have been involved with Cato and the other projects since inception.

16:40 That allows for continuity on the technical side and what we're finding as we've even gone through historical reports in the last couple of months. Some very interesting new data coming out of translating Japanese reports and putting together our sort of target generation exercises. Also important to mention here that with Kazan came the acquisition of the in-country team which is 4 individuals all resident in Japan and we're fully operational there from a company point of view. We're currently using some contract geologists with support from that team. We're sampling at the moment on the Todoroki project up on the Kaidu and we've also identified the 4 priority drill targets for follow-up drilling at Cato itself.

17:41 So if we zoom into a bit more detail on the situation at Cato, This project was really selected because of its geological and structural geological setting. There's been a good amount of what we would call ground preparation in that area. A number of showings of other commodities that are often pathfinders, such as other elements, such as sulfur itself. And as Tom mentioned, there is a lot of alteration around this Pacific gold system, which relates to the development of clay, such as kaolinite and other minerals that are well developed in that area. And importantly, of course, in the 1990s, which was the last sort of phase of significant exploration on these properties,

18:32 the Japanese agency, MMAJ, now referred to as Jogmech, did intersect some really nice high-grade gold intersections of between 8 and 5 grams per ton over significant widths in the core area of the Cato prospect. As Tom mentioned, in subsequent more recent years, Kazan has been endeavouring to intersect those zones, but did run into some difficulties with the alteration minerals around the high-grade quartz Agilura veins and basically came to the conclusion that the drilling equipment that was in place at the time was probably underpowered.

19:18 That's something we've now addressed with a recognized drilling contractor. We're sending a larger machine

19:25 to Japan as we speak and have redesigned the holes and also bringing in a mud cleaning system, which we think will help stabilize those holes in those clay-rich zones and allow us to get through and penetrate the high grade core to this mineralization. On the left is a simplified geological map of the Cato prospect area. And importantly, as mentioned previously, the identification of the rock type cinta in ag crop is important in that it shows that these centers form at the very top of these active mineralising systems.

20:11 It demonstrates that the full column that can be mineralised with gold is preserved at this prospect. Often when you're exploring for these types of systems, you will find that upper portions have been stripped off by erosion, weathering and river erosion, for example, in these areas such as Japan where you've got high uplift levels in the current environment. So that's very encouraging, the fact that we have the historical high-grade intersections that also appear to be surrounded with alteration minerals that contain relatively lower tenor Gold grades. What we've got here is an example of the drill rig itself at Cato in the last couple of years and some examples of mineralised core from these systems at Cato, and what these Sintra units look like in drill core.

21:14 As Tom mentioned, This is similar to some of the systems the guys were exploring around Julieta and Kupol in Far Eastern Russia. Tom, I don't know if you want to add anything to the drill core pictures there or add anything to that?

21:36 Not really, John. I would just reiterate, it's not uncommon in these kind of deposits near the top to have significant drilling problems. At Kupo, it took us a while to get underneath and properly drill off the north zone. So I think that's typical of that. And the other thing about this is when you step back a little bit at Cato, It's part of a really big regional fault system and typically the largest deposits are found associated with those big regional faults. I just want to add that to it, John. Yeah, thanks Tom.

22:18 So we're getting through our slides now for giving you a snapshot of the Cato prospect itself. This is a cross-section. So it's like a slice through the geology, looking down into the ground, looking approximately to the north. All these holes are not drilled in plain, they're projected from both the north and south to give you an idea of the sort of grades and variation in grades that we're seeing. All I would like to bring your attention to is that red highlighted area in the core as being the primary target here for the high-grade mineralisation.

22:55 You can see that if you look at the text box on the bottom right. You'll see an 18m intersection there at just over 5g a tonne gold. You'll see that the system is open-ended to depth, which is typical for these systems, within a certain range of the centers, the development of the centers in the relatively near surface environment. And it does appear that there is a fault potentially offsetting some of the mineralization in that central area. So as Tom mentioned, the envelope around these high-grade deposits, not unusually to be a lot of clay alteration developed in those areas, which ultimately may be a good indication that the potential here is fairly significant.

23:49 In terms of our plans for Cato going forward, Kazan itself will be investing about $2 million in the next 12-month period over all the projects and We're expecting to put at least $1.1 or $1.2 million of that exploration budget basically into core drilling at the Cato project to scope out the potential of that high-grade zone. It also appears that to the south, closer to where the outcropping center targets are, there is a lot of good untested mineralization potential there. Okay, Derek, do you want to take us through a snapshot of where we are from a corporate situation and then we'll sum up with a value proposition slide at the end.

24:42 Most of the numbers you can read on your own. Shares issued right now, 177 million shares, market cap around $60 million. What I would like to point out is we are pretty cashed up at the moment, probably sitting at just under $10 million in the bank right now. So we have sufficient cash for us to deliver on all the drilling, whether it be in Japan, in Zambia, and then completing the PEA for South Mountain in Idaho. We are well cashed up. Probably what's interesting from a shareholder standpoint is that everybody on this call are shareholders and pretty significant shareholders, and we all do put our own money into this. So we all have skin in the game. And certainly, Cleve Johnson is one of them that has continued to put money into the market and in the private placements. So he supports, he puts his money where his mouth is really. But also of importance to us is that since completing the Cronk transaction, we have noticed that institutions are starting to take more interest in us.

25:47 And so we are starting to see the institutional ownership grow. I think we started around 2% earlier this year. Now we're up to 14% and that's probably gonna continue to get larger as we attract more of those funds. The other, sorry, one other point I would make is that that retail slice of the pie there 43%. I would say a good chunk of that is going to be friends and family still. And so we do have some really strong supporters behind the stock. And then of course, we have B2 Gold owning 19%. So we have some really firm supporters behind the stock. Thanks, Derek. You too. So just to sort of sum up now, really, on the, you know, investment highlights and value proposition of B Metals, you know, we can truly say that the company is guided and led by some of the top mine finders, builders and operators that have consistently delivered value to investors through both BIMA Gold and B2 Gold. And now that's coming over into B Metals itself.

26:52 Access to capital has been good. Importantly, at times when markets are less buoyant than they possibly have been in the last 12 months or so. And those investments and that capital raising has been done at sensible valuations. So, you know, important thing to us is obviously to manage the dilution of, you know, those founding investors and supporters. Extensive deal flow comes in from our own network. Obviously, that goes over into the B2 network as well and associated consultants and experts. And as Derek mentioned, we're now well-financed to deliver on the near-term catalysts of the company.

27:41 One of the most important kind of our flagship asset now really is our exciting gold projects and exploration in Japan, as we've just sort of discussed. Advancing the South Mountain project through its current PEA study that will guide us into the next phases of work for that project. And continuing with our exploration in Zambia, where we have the potential to discover world-class copper deposits that coincidentally we have brought in Jogmech as a funding partner, a big technical value tick for that project. And we're having a very good working relationship with Jogbeck on advancing that exploration. And we're currently getting towards the end of another phase of Aircore that will be finished in the next week with follow-up core drilling to come before the year end.

28:35 So I'd like to thank everyone for listening to this update and sort of the focus on the Japan assets and I'll hand back to Dasha to guide us through the Q&A. Thank you so much. We're going to jump right into the Q&A now. So if you do have a question, feel free to submit them now. We have a few questions here and a few that were submitted beforehand. Our first question is, was B2Gold a majority owner of the Kazan resources before you bought them out? No, they weren't a majority owner. Their position in the private company was about 30% with also some outstanding loans that funded exploration into the company. Okay, thank you. Nick is asking, will B Metals potentially monetize or the GV South Mountain Idaho in the short term?

29:30 Perhaps B Metals would benefit from spending 100% of drilling money on gold projects such as Kazan and future projects? Good question, Nick. At this point in time, as you may be aware from our presentations prior to this, we're kind of splitting our resources to the various projects. We see them all as having good potential. We did bring in, as I just mentioned, Logmec into our Zambian exploration efforts because that is an earlier stage exploration property and they're good long-term partners for a project like that so we are looking to manage our investment situation. But at this point in time, you know, we will see which of our projects get traction in the next 6 to 9 months.

30:19 And then we can obviously look at allocation of updated budgets on that basis. Thank you. Joe is wondering how smoothly do you expect the regulatory process to be in terms of permitting in Japan? Another good question. We obviously permitted to do the exploration activities at Kato, importantly, and we're working on some of our other licenses at this point to get them in a drill ready situation for reconnaissance drilling. That process is well mapped out. It is a little bit slow, but we're well advanced with that. And the team in Japan has got a lot of experience with making that happen on a reasonable timeframe.

31:06 To transition, we have to first get through discovery success, build a resource at Kato, for example, and then transition into a potential mining situation. As we mentioned in the beginning, the potential advantage there is that these deposits are generally amenable to high-grade underground mining situation with a relatively limited footprint from an environmental point of view. So, you know, we don't see any huge obstacles. We think the Japanese authorities will be generally supportive, especially in these more remote areas that we're exploring. Great. Thomas's question is about the COVID in Japan. And he's saying countries using evermestin to fight COVID are opening up much faster to mining than other countries that refuse to use it. What are you going to do to encourage that the Japanese government officially start using evermestin to help crush the COVID pandemic?

32:12 OK, that general question is a little bit out of my sphere of experience, of course. But I think the COVID point in Japan is a different one. At this point it's very difficult to get external agents into Japan. We think that situation in general might well improve after the completion of the Olympics. But the important thing is with our resident-based team there, we are active at this point in time and we hope to get our drill starting in probably October this year. Great, thank you. Don is asking if Tom can talk on the South Mountain project. South Mountain, I can talk a little bit about it.

33:01 I think John's a better expert on it. He's spent more time on the project than I have. But I will say that it's one of those kind of deposits that's very, very difficult to prove it to its full potential. The reason for that is its vertical extent can be up to a kilometer, even more. And from surface, it's very difficult to drill off these pipe-shaped bodies. So geologically, I would say that South Mountain has a potential to be a lot bigger, but it's gonna be one of those things that you'll never be able to drill off, but you'll find out at the end of the mine life. That would be my only comment on it in terms of sort of the general overview of it. Geologically, it's not on, it's not, or it's typical of what you see a lot of in these high-grade Zinc-Silver deposits in Mexico.

33:56 They go on for a couple of hundred years, continuing to mine. They're the sort of deposits where they've had 2-3 years of mine life for 50-years. John, I don't know if you want to add any more to that. Yeah, well I think you summed it up very well there, Tom. I think the important thing that since we got involved with South Mountain, getting that input from Richard Salito there as well that identified it more as a CRD deposit than originally a SCARN it has been called in geological terms. I think that's given us more upside on the overall resource potential of South Mountain than probably even we first realised when we got involved there. But as Tom says, those sort of deposits are going to work a little bit like a high-grade Greenstone Gold deposit in a way, in that you're never going to have a huge amount of reserves, resources in front of you, but you will always be able to replace those resources as you advance your mining, you get new drill stations and you sort of go down on a sequential basis.

35:01 Geologically, the inputs we've had from Dick Salito is he thinks it looks most similar to Naica in northern Mexico. As Tom mentioned, there's a whole suite of these deposits in that terrain. Naica mined for more than 50-years, produced high-grade, high-grade concentrates, but probably never had more than 1, 1.5 million tonnes of resources ahead of it. But they can still be very valuable deposits and produce a good cash flow for companies such as ourselves. So we're going to use our PEA study to guide us through what the next steps should be on South Mountain to take that forward in the appropriate way.

35:48 Got it, thank you. Our next question is how do these projects rank with your larger portfolio of projects? Right, That might be 1 for, how do they rank? So I think if we rank the projects we have in B Metals, you know, I would say that our transition into gold and our addition to gold to our portfolio has been very important for us. That's something we flagged up that we would do about a year ago for investors. And we've delivered on that. And we see that Japan and that style of mineralization as being the ideal fit. We obviously looked at a huge number of projects when we were looking to get an entry into Gold and it was these Japanese assets that really ticked the box for us. Sort of plays a little bit into our experience, specifically in the exploration phase and space.

36:46 But also, if they become successful, the type of deposits that would be very good for B-Metals to advance with the expertise of our wider team in the mining and development part of the business. Thank you. Yeah, so Paul is asking, he says that the Japan story always sounds so promising, yet Barrick seems to be tiptoeing in the country. What are the dynamics behind a pace of a slow pace for Japan focused gold companies? Yeah I think again that's that's a good question, you know companies have been exploring there for some time. I think that's also something that probably plays to the strengths of our wider team and it's really all about keeping to that sort of delivering on your promises, keeping the accountability and being honest and open with the authorities and with the communities in the areas.

37:47 And The sort of thing that Tom and I would have learned at the start of our careers when you first get boots on the ground, that sort of respect and honesty with the local population in those areas is really what makes and breaks you from a social license point of view in a lot of these jurisdictions. But the thing is, in Japan, that the compelling prospectivity and potential of the gold opportunities there outweighs what might be a somewhat slower advance of the projects. If I could add something to that, John, 2 points. 1, more along what you're saying, it's early stage exploration, so early stage exploration from an outsider looking in tends to seem to go slow until you've identified your drill targets and moved on from there. Secondly, you've got to remember Barrick has only been there, I believe, 2 years, not very long. And a good chunk of that has been during the COVID pandemic.

38:52 So that's, you know, as much as you can get people going on surface, it does slow things up a fair bit. Great, thank you. We have a question from Paul. It's in German, so I translated it and hopefully translated it correctly. But the question is, the company has existed for 6 years and what are the next milestones? Well, I would say as a sort of an operational entity, B-Metal has really only been in place about 3.5-years now since we secured the TSX-V listing with the exploration in Zambia. So next milestones would ideally be a discovery of a Gold resource in Japan, advancing our South Mountain property and the potential for Copper exploration success in Zambia.

39:46 We're obviously, as all companies are, we always got our ears and eyes open for new opportunities that may come our way, which might well be a more advanced gold opportunity. But We have to be very selective, that has to be value accretive, and the transaction has to be pegged at the right value, no matter what the current sentiment is on the gold market at that time. Great, thank you so much. That is all the time we have for today. I want to thank Tom, John, Derek, so much for walking us through the presentation and the Q&A. And also thank you to everyone who submitted questions. If you do think of a question after this webinar is over, we will be sending out a short survey and you'll have the opportunity to leave your contact details and the B-Metals team will be happy to follow up with you directly.

40:37 As always, this will be published on six.com to rewatch afterwards. And you can also find more information on their website, bmetalscorp.com. But I'll pass it back to you, John, if you have any final words. Thanks, Sasha, thanks to you and thanks for hosting us again. Enjoyed the event. Very much thanks to Tom and Derek for their contributions. Great to have someone like Tom on with the depth of experience in the real world in exploring and bringing these sort of projects to account.