Ready to Ride the Copper Wave - 2018 AGM June 12, 2018 - NGEx Resources
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Ready to Ride the Copper Wave
2018 AGM
June 12, 2018
OUTLINE • Market Overview • Projects • Plan and Outlook
LONG TERM DEMAND PICTURE IS STRONG
GOING GREEN REQUIRES A LOT OF COPPER
China to invest $356 billion
in clean energy
Source: The Virtual Capitalist
SUPPLY- MORE LIMITED THAN MANY BELIEVE
PRODUCTION AND GRADES AT EXISTING MINES DECLINING
Produc5on declining
Grades declining
SUPPLY- MORE LIMITED THAN MANY BELIEVE
PROJECT PIPELINE IS THE LOWEST IN DECADES
NEW PROJECTS ARE NEEDED
JUNIOR MARKET UNDERVALUED
DESPITE THE ROBUST OUTLOOK JUNIOR STOCKS HAVE LAGGED COPPER AND MAJOR COMPANY
STOCKS
Major Miners Index
Copper Price
NGEX
TSX Venture
(Junior Company Index)
A CATCH-UP IS OVERDUE!
BUSINESS MODEL
RETURNING TO OUR ROOTS
• Lundin Group Explorer/Project Incubator
• Focused on the high reward part of the mining value chain
• Creating value from discovery and definition of new deposits
• Discover – Define – Create Value - REPEAT
High Risk /High Reward Perceived Lower risk Full Value
Produc5on from
deple5ng asset
Josemaria/Los Helados
Rela5ve Share Price
Discovery
Commercial
Produc5on
Nacimientos
Early Stage Explora5on Ini5al drilling Deposit Engineering Construc5on Produc5on
defini5on Studies
NGEX ADVANCED PROJECTS
WELL POSITIONED TO FILL THE GAP
Central processing plant
• 150,000 tonnes of copper
• 180,000 ounces of gold
• 1,200,000 ounces of silver
per year
JOSEMARIA
for 48 years
NPV8 IRR Payback
$2.6 B 16.6% 3.6
aZer tax aZer tax years
Recoveries
$3 Cu C1 Costs
88% Cu
$1275 Au $1.05/lb Cu
73% Au
8
LOS HELADOS For details please see the Project Constella5on Report which is available
under the Company’s profile at www.sedar.com
PROJECT CONSTELLATION SENSITIVITIES
STRONG LEVERAGE TO POSITIVE CHANGES SINCE STUDY COMPLETED IN 2016
After-Tax, NPV Sensitivity, US $Million (rounded)
Sensi0vity to Discount $2.50/lb Copper $3.00/lb Copper $3.50/lb Copper
Rate & Copper Prices (USD billion) (USD billion) (USD billion)
Pre-Tax AZer-Tax Pre-Tax AZer-Tax Pre-Tax AZer-Tax
Discounted at 5% 4.95 3.08 7.77 4.99 10.59 6.87
Discounted at 8% 2.57 1.36 4.43 2.61 6.28 3.84
Discounted at 10% 1.60 0.66 3.07 1.65 4.54 2.62
Table shows the sensitivity of estimated NPV’s for the Project’s cash flows at various copper prices and discount rates (Au and Ag held flat at
$1,275/oz and $20/oz respectively). PEA base case highlighted.
Note: For details please see the Project Constella5on Report which is available under the Company’s profile at www.sedar.com
…since completion of the PEA in 2016
• NGEX interest in Josemaria increased from 60% to 100%
– Josemaria provides all of the initial cash flow from the project
• Argentina corporate tax rate reduced from 35% to 25%
• Copper price has increased from $2.00 to $3.25 9
WORKING ON DE-RISKING PATH TO PRODUCTION
FOCUS ON LOW COST OPTIONS TO CREATE VALUE
Los Helados surface rights acquisi5on
Baseline environmental studies
Focus Engineering op0miza0ons
Engagement with partners and possible
acquirersCopper - Contained Tonnes
5,000,000
0
10,000,000
20,000,000
30,000,000
40,000,000
15,000,000
25,000,000
35,000,000
Andina Division
Escondida
El Teniente
Collahuasi
SCARCITY = VALUE
Olympic Dam
Chuquicamata
118,900,000
Grasberg
KGHM Polska Miedz
Pebble
SOURCE: SNL Metals & Mining, Company Reports
Pampa Escondida
69,600,000
Los Pelambres
Taimyr Peninsula
Radomiro Tomic
Buenavista
Los Bronces
Baimskaya
Udokanskoe
Kamoa
Andina
Project
Resolution
Project
Oyu Tolgoi
Udokanskoe
Reko Diq
OperaDivision
Kamoa
La Granja
Constellation
Central Region
Antamina
Quebrada Blanca
Cons tellation - NGEx
Toqui Cluster
Toquepala
Los Sulfatos
Konkola
Morenci
Cobre Panama
Cerro Verde
ting - Held by ma jor or s tate owned company
El Pachon
Undeveloped - Held by major or state owned company
Salvador
Tampakan
World's 50 Largest Copper Resources
Project Constellation
Kamoto JV
NGEX
Project Corridor
Mina Ministro Hales
Quellaveco
Undeveloped - Controlled by a junior company (i .e. available for a cquisition)
Taca Taca
Frieda River
Centinela Sulfide
Las Bambas
Spence
ONE OF THREE TOP 50 RESOURCES HELD BY A JUNIOR
KSM
Cerro Colorado
Oroyek
Aynak
La Caridad
Twin Metals
El Abra
11NEXT STEPS
TWO TRACK APPROACH
Advanced Projects Explora5on
• Fast track a simpler open pit project at • Acquired 2 district scale copper-gold
Josemaria projects in Argentina
• Targeting PFS by Q1 2019 • Fast tracked one to scout drilling phase in
• Then start process for permitting; water Q1 2018
rights etc • Encouraging results to date
• Maintain optionality of Los Helados • Evaluating other opportunities
• Continue to pursue regional synergies
12ADVANCED PROJECTS - JOSEMARIA
STRONG PROJECT WITH A LOT OF OPTIONALITY AND FLEXIBILITY
• 100% owned
• Straightforward open pit operation with
a low strip ratio; shallow high-grade
• Simple metallurgy - clean concentrate
• Good permitting regime; no local
population
• Opportunities to improve on original
Constellation design
– Capex can be optimized and
refined
– More compact site layout
– Chile power?
– Smaller closer tailings facility
– Nearby water source
• Plan: Complete a PFS, Q1 2019
• …then; start permitting, apply for
water license, etc.
13NACIMIENTOS COPPER GOLD PROJECT
FAST TRACKED TO DRILL STAGE- RESULTS PENDING
COVER SILICA
GOLD TARGET
COPPER TARGET
14NACIMIENTOS SUMMARY
HIGH POTENTIAL UNEXPLORED COPPER GOLD SYSTEM
• Large scale system with both
porphyry copper-gold and
epithermal gold targets
• Good location in a possible Gold target
extension of the Veladero - El
Indio gold belt. Copper-Gold target
• Easy access and proximity to Copper-gold target
paved roads sped up targeting
work
• Three scout holes drilled at
end of season to test geological
model.
• Model confirmed. Assays
pending - expected end of Q2
• More drilling planned for Q4
15CATALYSTS
• Additional exploration drilling
new projects -Q4
• Josemaría water drilling- Q4
• Josemaría PFS - Q1 2019
• Initiate Josemaría permits - Q1?
• Acquire additional exploration
projects - ongoing
16PATIENCE WILL BE REWARDED THE BIGGEST RETURNS HAVE BEEN FROM EXPLORATION/DEVELOPMENT PLAYS
THE NEXT NGEX
DISCOVER-DEFINE-CREATE VALUE - REPEAT
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