corporate presentation february 2019 - tinka resources › assets › docs › ppt › tinka... ·...
Post on 09-Jun-2020
6 Views
Preview:
TRANSCRIPT
TSXV & BVL:TK | OTCPK: TKRFF www.tinkaresources.com
Corporate Presentation – February 2019
This presentation is not directed to, or intended for distribution to or use by, any person or entity that is a citizen or resident or located in
any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or
regulation or which would require any registration or licensing within such jurisdiction. This presentation does not constitute or form a part
of, and should not be construed as an offer, solicitation or invitation to subscribe for, underwrite or otherwise acquire, any securities of
Tinka, nor shall it or any part of it form the basis of or be relied on in connection with any contract or commitment whatsoever.
Certain information in this presentation contains forward-looking statements and forward-looking information within the meaning of
applicable securities laws (collectively "forward-looking statements"). All statements, other than statements of historical fact are forward-
looking statements. Forward-looking statements are based on the beliefs and expectations of Tinka as well as assumptions made by and
information currently available to Tinka's management. Such statements reflect the current risks, uncertainties and assumptions related
to certain factors including but not limited to, all costs varying significantly from estimates, production rates varying from estimates,
changes in metal markets, changes in equity markets, availability and costs of financing needed in the future, equipment failure,
unexpected geological conditions, imprecision in resource estimates or metal recoveries, ability to complete future drilling programs,
drilling program results varying from expectations, delays in obtaining survey results, success of future development initiatives, the
completion and implementation of a preliminary economic assessment, pre-feasibility or feasibility studies, competition, operating
performance, environmental and safety risks, delays in obtaining or failure to obtain necessary permits and approvals from local
authorities, community relations, timing and completion of any surface rights agreements, and other development and operating risks.
Should any one or more of these risks or uncertainties materialize, or should any underlying assumptions prove incorrect, actual results
may vary materially from those described herein. Although Tinka believes that assumptions inherent in the forward-looking statements
are reasonable, forward-looking statements are not guarantees of future performance and accordingly undue reliance should not be
put on such statements due to the inherent uncertainty therein. Except as may be required by applicable securities laws, Tinka disclaims
any intent or obligation to update any forward-looking statement.
The Mineral Resources disclosed in this company presentation have been estimated by Mrs. Dorota El Rassi, P.Eng., and Mr. David Ross,
P.Geo., both employees of RPA and independent of Tinka. The Zinc/Tin Mineral Resources were publicly released on November 26, 2018,
while the Silver Resources were released on Feb 26, 2015. By virtue of their education and relevant experience, Mrs. El Rassi and Mr.
David Ross are "Qualified Persons" for the purpose of National Instrument 43-101. The Mineral Resources have been classified in
accordance with CIM Definition Standards for Mineral Resources and Mineral Reserves (May, 2014). Readers are encouraged to read
the Company’s technical report in their entirety.
This presentation has been prepared, reviewed and verified by Dr. Graham Carman, Tinka’s President and CEO and a Fellow of the
Australasian Institute of Mining and Metallurgy, a qualified person as defined by NI 43-101. 2
Disclaimer
3
Company Highlights
Ayawilca
Peru
Tinka owns 100% of the Ayawilca project – one of largest
zinc resources not owned by a producer & located in a top
mining belt
Zinc deposit discovered by Tinka & grown rapidly
Mineral Resources at Nov. 26, 2018:
Zinc Zone –11.7 Mt Indicated @ 8.1% zinc equivalent (ZnEq)* &
45.0 Mt Inferred @ 6.7% zinc equivalent
Tin Zone – 14.5 Mt Inferred @ 0.70% tin equivalent (SnEq)*
Exploration drilling to begin May 2019 after wet season
PEA underway with results anticipated by mid 2019
Highly experienced team of mine finders with Peru expertise
Strong institutional investor base
Solid balance sheet with C$14M cash and no debt (Sep. 30/18)
* See resource tables for calculation of ZnEq and SnEq
4
Market Capitalization
TSXV & BVL: TK | OTCPK: TKRFF
Shares Issued: 264.6 M
Options 12.0 M
Warrants (12.4M @ $0.45 + 16.9M @$0.75) 29.3 M
Fully diluted: 306.4 M
Market cap @ C$0.35/share: C$93 M
Cash (Sep. 2018): ~C$13 M
Analyst Coverage
Ian Parkinson
Kevin MacKenzie
George Topping
Major Shareholders
Institutional:
The Sentient Group 24%
IFC (World Bank) 11%
JPMorgan UK 7%
Other institutions ~10%
Total institutional 52%
Management & insiders 2%
Retail/other 46%
5
Zinc Resource Base Case (Nov. 2018 @ $55 NSR cut-off)
Includes ~20,000 metres of 2018 drilling (~68,000 metres since 2011-2012)
1.8 billion pounds of zinc in Indicated category (24% of total)
5.6 billion pounds of zinc in Inferred category (76% of total)
Ayawilca zinc resources as follows:
Category/Area
Tonnage
(Mt)
ZnEq
(%)
Zn
(%)
Pb
(%)
In
(g/t)
Ag
(g/t)
Zn
(Mlb)
Pb
(Mlb)
In
(t)
Ag
(Moz)
Indicated
West 7.8 7.7 6.5 0.20 72 15 1,126 35 561 3.9
South 3.9 9.1 7.6 0.09 108 16 652 8 422 2.0
Total Indicated 11.7 8.1 6.9 0.16 84 15 1,778 42 983 5.8
Inferred
West 5.0 7.1 6.4 0.27 34 17 699 30 170 2.8
Central 18.6 5.6 4.6 0.23 62 12 1,884 95 1,153 7.5
East 11.3 5.9 5.0 0.18 56 14 1,238 44 633 5.0
South 10.2 9.6 7.9 0.27 103 30 1,764 61 1,047 9.9
Total Inferred 45.0 6.7 5.6 0.23 67 17 5,585 230 3,003 25.2
Notes:
• CIM definitions were followed for Mineral Resources.
• Mineral Resources are reported above a cut-off NSR value
of US$55 per tonne.
• The NSR value was based on estimated metallurgical
recoveries, assumed metal prices and smelter terms, which
include payable factors, treatment charges, penalties, and
refining charges. Metal price assumptions were: US$1.15/lb
Zn, US$300/kg In, US$15/oz Ag, and US$1.00/lb Pb. Metal
recovery assumptions were: 90% Zn, 75% In, 60% Ag, and
75% Pb. The NSR value for each block was calculated
using the following NSR factors: US$15.34 per % Zn,
US$4.70 per % Pb, US$0.18 per gram In, and US$0.22 per
gram Ag.
• The NSR value was calculated using the following formula:
NSR = [Zn(%)*US$15.34+Pb(%)*US$4.70+
In(g/t)*US$0.18+Ag(g/t)*US$0.22]
• The ZnEq value was calculated using the following formula:
ZnEq = NSR/US$15.34
• Numbers may not add due to rounding.
• “Inferred Mineral Resources” have a great amount of
uncertainty as to their existence, and as to their economic
and legal feasibility. It is reasonably expected that the
majority of Inferred Mineral Resources could be upgraded to
Indicated Mineral Resources with continued exploration.
United States investors are cautioned not to assume that all
or any part of Measured or Indicated Mineral Resources will
ever be converted into Mineral Reserves. United States
investors are also cautioned not to assume that all or any
part of an Inferred Mineral Resource exists, or is
economically or legally mineable.
6
Ayawilca Zinc Zone Cut-off Sensitivity
Zinc Zone Indicated Mineral Resources
NSR US$/t
Cut-off
Tonnage
(Mt)
ZnEq
(%)
Zn
(%)
Pb
(%)
In
(g/t)
Ag
(g/t)
40 13.6 7.4 6.3 0.16 75 15
50 12.4 7.9 6.7 0.17 80 15
55 (Base Case)
11.7 8.1 6.9 0.16 84 15
60 10.8 8.5 7.2 0.16 89 16
70 9.4 9.2 7.7 0.15 99 16
80 7.9 10.0 8.4 0.15 111 17
NSR US$/t
Cut-off
Tonnage
(Mt)
ZnEq
(%)
Zn
(%)
Pb
(%)
In
(g/t)
Ag
(g/t)
40 52.7 6.2 5.2 0.24 60 17
50 48.1 6.5 5.4 0.24 64 17
55 (Base Case)
45.0 6.7 5.6 0.23 67 17
60 41.5 7.0 5.8 0.23 70 18
70 33.9 7.6 6.4 0.22 78 18
80 26.9 8.3 6.9 0.22 86 20
Zinc Zone Inferred Mineral Resources
See resource table for notes and ZnEq calculations
Zinc Zone has high grade zones likely to be targeted for early extraction
Base case at $55/t cut-off.
At an $80/t cut-off, the Zinc Zone resource contains:
7.9 Mt Indicated at 10.0% ZnEq and 26.9 Mt Inferred at 8.3% ZnEq
7
Ayawilca Resource Growth Continues
500 m
Decade of low zinc prices resulted in a lack of exploration / discoveries
Few quality projects (zinc, copper, tin) located in lower risk jurisdictions
8
Notes:
- Data from company websites,
believed to be accurate
- ZnEq based on spot metal prices
on Nov. 22, 2018
- Global resources include
Measured & Indicated and
Inferred resources. Vazante and
Cerro Lindo data only reflects
Reserves.
Scarcity of Large Development Zinc Projects
Fireweed-Tom&Jason
NEXA-Aripuana
Zinc X-Akie
Rathdowney-Olza
Trevali-Caribou
Vendetta-Pegmont
Trevali-Santander
Foran-McIlvenna Bay NEXA-Vazante
NEXA-Cerro Lindo
NEXA-Shalipayco
Tinka-Ayawilca2018
Tinka-Ayawilca2018+Tin
-
2.0
4.0
6.0
8.0
10.0
12.0
14.0
- 10 20 30 40 50 60 70 80 90
Glo
ba
l R
eso
urc
e/R
ese
rve
(B
illo
ns
of p
ou
nd
s o
f Zin
c E
qu
iva
len
t)
Global Resource Size (Mt)
Zinc Equivalent Resource Size for Selected TSX/TSXV Companies
Producing mine
Development project
Ayawilca project - Zn
Ayawilca project - Zn+Sn
Teck considers giant zinc deposit to be > 6Mt Zn+Pb
Ayawilca is currently 3.5Mt Zn+Pb and 4.8Mt ZnEq (including tin), with the
potential to grow through continued exploration
9
Teck Scatter Plot of Zinc Projects
Ayawilca – Zn +Pb only
Ayawilca – ZnEq including tin
Strong fundamentals due to
mine shutdowns and lack of
new development
Few new discoveries in the
past decade
Zinc inventories have
declined to10-year lows
Zinc price ~ $1.20/lb (52-
week range: $1.04 - $1.64)
Average zinc mine grades
FALLING (Reuters):
4.3% Zn in 2017
6.8% Zn in 2000
10
Why Zinc?
Zinc Inventories: 2011 to 2018
Source: Scotiabank
Zinc used in construction and
automotive industries for
galvanizing (steel protection)
Emerging zinc-air battery
technology could increase
demand
2018 zinc consumption forecast
13.7 million tonnes of refined zinc
metal: Production of 13.4 million
tonnes = in deficit ~ 300,000 t
Steady demand growth
11
Zinc – Uses and Markets
Galvanizing
50%
Zinc Alloying
17%
Brass and
Bronze
17%
Zinc Semi-
Manufactures
6%
Chemicals
6%
Other
4%
Source: International Lead and Zinc Study
Group (ILZSG)
Zinc End Uses
Management – Extensive Peru and Zinc Experience with Past Successes
Dr Graham Carman President & CEO,
Director
Geologist, 25 years global exploration experience
with Rio Tinto, Savage, Pasminco, juniors.
Alvaro Fernandez-
Baca
VP Exploration, Peru Geologist, 20 years global exploration experience
with Gitennes, AQM Copper & Hochschild.
Cesar Carbajal HSEC Manager Social management specialist, 15 years experience
with Teck, MWH, Peru Ministry of Mines.
Ken Engquist Manager Project
Development
Engineer, 25 years project development experience
with Arizona Mining, Nevsun, Rio Tinto, Oxygen Cap.
Mariana Bermudez Corp. Secretary 20 years regulatory compliance services experience.
Nick Demare CFO, Director CPA, CA, extensive junior board experience.
12
Management & Board
Independent Directors
Ben McKeown Chairman of the Board. Mining engineer, MBA, with 25 years experience in mining,
oil & gas, and private equity.
Pieter Britz Sentient Group representative. Professional engineer with over 20 years’ experience
as a mining professional and as a mining investment professional.
Mary Little Founder of Mirasol Resources, geologist, MBA, 20 years in Latin America.
Mineral Rank in
World 2016
Latin
America 2016
Zinc 2nd 1st
Copper 3rd 2nd
Tin 6th 2nd
Lead 4th 1st
Silver 2nd 2nd
Gold 6th 1st
13
Peru – A Mining Country
Pro-mining country – mining accounts for over 50% of exports
Peru is a top 3 global producer of zinc, copper, and silver
Ayawilca
Project
Las Bambas
Antamina
Central Peru
zinc belt
CHILE
BOLIVIA
BRAZIL
ECUADOR
San Rafael
Source: US Geological Survey
14
Antamina: Largest current
copper/zinc mine in Peru
Cerro de Pasco:
Largest historic silver/zinc mine in Peru
Giant Ore Deposit
Central Peru – Infrastructure
Ayawilca Tinka owns 170 km2 of
mining claims (100%)
Good infrastructure -
power, roads, water
15
Ayawilca Geology & Mineralization A
ya
wilc
a P
lan
Vie
w w
ith
Ge
olo
gy
16
Ayawilca Long Section A
ya
wilc
a L
on
g S
ec
tio
n A
-A’
Repetition of thrust faults provides potential for additional mineralization
beneath current resource
17
2018 Mineral Resource Upgrade C
ross
Se
ctio
n B
-B’
Cro
ss S
ec
tio
n C
-C’
Inf. 2015; 2,258
Inf. 2016; 3,385 Inf. 2017; 6,873
Ind. 2018; 2,149
Inf. 2018; 6,738
0
10
20
30
40
50
60
2014 2015 2016 2017 2018 2019
Re
sou
rce
s (M
t)
Ayawilca Resource Growth 2015 to 2018
Bubble size indicates contained zinc-equivalent pounds (Mlbs)
INFERRED
INDICATED
West Ayawilca and South Ayawilca
zones contain thickest and highest
grade zinc mineralization
2018 – Substantial portion of South and
West Ayawilca in Indicated resource
category
18
High Grade: 10 metres @ 44% Zinc
Massive (90%) sphalerite, other sulphides (10%) Hole A18-129 - 10 metres @ 44% Zinc
Sphalerite Feeder veins in phyllite Hole A18-132 - 7 metres @ 20% Zinc
HG zinc encountered at Ayawilca in “repeated” limestone and feeder veins
19
Tin Resources Nov. 2018
Ayawilca contains a substantial tin resource – believed to be the largest tin
resource in Peru outside of Minsur’s San Rafael project
Tin is currently trading at US$8.95/lb, approximately 7.7x the value of zinc
Tin is primarily used in tin plated steel, chemicals, solder, and alloys, but with
increasing use in high tech and electric vehicles
Ayawilca Tin Zone Inferred Mineral Resources
NSR US$/t
Cut-off
Tonnage
(Mt)
SnEq
(%)
Sn
(%)
Cu
(%)
Ag
(g/t)
40 17.1 0.65 0.57 0.20 18
50 15.9 0.67 0.60 0.20 18
55 (Base Case)
14.5 0.70 0.63 0.21 18
60 12.5 0.76 0.68 0.22 17
70 10.1 0.84 0.76 0.23 18
80 8.3 0.92 0.84 0.25 19
Notes:
• CIM definitions were followed for Mineral Resources.
• Mineral Resources are reported above a cut-off grade of US$55 per tonne NSR value.
• The NSR grade was based on estimated metallurgical recoveries, assumed metal prices and smelter
terms, which include payable factors, treatment charges, penalties, and refining charges. Metal price
assumptions were: US$9.00/lb Sn, US$2.85/lb Cu, and US$15/oz Ag. Metal recovery assumptions were:
86% Sn, 75% Cu, and 60% Ag. The NSR value for each block was calculated using the following NSR
factors: US$155.21 per % Sn, US$37.59 per % Cu, and US$0.22 per gram Ag.
• The NSR value was calculated using the following formula:
US$NSR = [Sn(%)*US$155.21+Cu(%)*US$37.59+Ag(g/t)*US$0.22
• The ZnEq value was calculated using the following formula: SnEq = NSR/US$155.21
• Numbers may not add due to rounding.
• “Inferred Mineral Resources” have a great amount of uncertainty as to their existence, and as to their
economic and legal feasibility. It is reasonably expected that the majority of Inferred Mineral Resources
could be upgraded to Indicated Mineral Resources with continued exploration. United States investors
are cautioned not to assume that all or any part of Measured or Indicated Mineral Resources will ever be
converted into Mineral Reserves. United States investors are also cautioned not to assume that all or
any part of an Inferred Mineral Resource exists, or is economically or legally mineable.
20
Ayawilca PEA and Exploration in 2019 Zinc Metallurgical Testing Sphalerite has high indium credits
Positive initial results – very high recoveries and con
grade of 51% achieved
PEA-level met testing is ongoing
Preliminary Economic Assessment (PEA) Engaged Wood plc (formerly Amec Foster Wheeler)
as lead engineering firm
Ken Engquist managing PEA for Tinka
Previously project development for Arizona Mining
(Hermosa) and Nevsun (Timok)
Results of PEA expected by mid 2019
Exploration Program for 2019 Further exploration drilling planned for Q2-Q3 2019
(10,000 m budgeted) to test new targets at Ayawilca
Ongoing partnerships with three communities – employment and training
Social engagement and sustainable development programs, fostering long-
term relationships
In 2018, Tinka employed up to 100 locals for building drill platforms & roads
21
Community & Environment
22
Catalysts and Valuation
Maiden PEA by mid 2019
– initial economic assessment for a zinc mine at Ayawilca
Exploration upside
– additional drilling in 2019 to test additional zinc targets
Strategic interest
– Ayawilca is the only large zinc deposit in the hands of a junior
Low valuation – At current market cap Tinka is valued at US$0.007 / ZnEq lb
– Cf. Arizona Mining bought at US$0.05 /ZnEq lb for US$1.6B in 2018
23
Why Tinka?
Ayawilca is one of the largest discoveries in Peru in last 20 years
Massive zinc leverage – 2018 resource contains1.8 billion pounds Zn
Indicated plus 5.6 billion pounds Zn Inferred
Multi-commodity exposure – zinc, tin, indium, silver
PEA results mid 2019; Drilling Q2-Q3 2019
Well positioned to be next large zinc development project
Upside – trading at less than 1% of in-ground value
C$14M in cash (Sep. 2018) sufficient to keep project moving forward
Suite 1305 - 1090 West Georgia St
Vancouver, BC V6E 3V7
CANADA
Ph: +1 604 699-0202
Fax: +1 604 683-1585
CORPORATE OFFICE
FOR MORE INFORMATION
Dr. Graham Carman, President & CEO info@tinkaresources.com
Rob Bruggeman, Investor Relations rbruggeman@tinkaresources.com
+1 416 884-3556
24
Tinka Resources Limited
top related