horne 5 project · • low environmental impact project. project • mondial class asset • one of...

HORNE 5 PROJECTTHE NEXT MAJOR MINING PROJECT IN ABITIBICORPORATE PRESENTATIONAugust 2020

www.falcores.com | FPC: TSXV

TSX-V: FPCfalcores.com

Cautionary StatementForward-Looking StatementsCertain information in this presentation constitutes forward-looking statements, including all information regarding our plans, plans and future performance. All statements otherthan statements based on historical fact are forward-looking statements. The words "expects," "believes," "anticipates," "will," "intends," "estimates," "forecasts," "budget,""schedule," or similar expressions are terms indicating forward-looking statements. Forward-looking statements are necessarily based on a number of factors and assumptions that,while considered reasonable by management, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Known and unknown factorscould cause actual results to differ materially from those anticipated in the forward-looking statements.These factors include, but are not limited to: changes to current estimates of mineral reserves and resources; the availability of labour; litigation; the availability and higher costsassociated with contractors and exploration equipment; the speculative nature of mineral exploration and development activities, including the risks associated with obtaining therequired permits and approvals in a timely manner; disputes over title deeds; uncertainty about the Company's ability to raise required funds to implement its business plans;changes in government laws at the local and national levels in Canada; the risk of loss due to sabotage or civil unrest; risks arising from the ownership of derivative instruments; andbusiness opportunities that may be affected by the Company. Many of these uncertainties and contingencies may affect our actual results and could cause our actual results todiffer materially from those expressed or implied by forward-looking statements made by us or on our behalf. The reader is cautioned that forward-looking statements are notguarantees of future performance. Furthermore, in addition to being subject to the applicable legal framework, the development of the Horne 5 Project is subject to a contractualframework whereby the obtaining of the required license to operate from the neighbouring operator is subordinated to the entering into a comprehensive financial guaranteearrangement with such operator in order to provide adequate financial protection to this operation. Once this condition precedent will be achieved, the Company and theneighbouring operator will establish a work plan for the further development of the Horne 5 Project, including operational parameters to be complied with by the Company in orderto maintain the primacy of the neighbouring operation, the whole, in accordance with the agreed upon contractual framework. Based on the foregoing, the Company will not becarrying any major development activities prior to finalizing a satisfactory comprehensive financial guarantee framework with the neighbouring operator and thereafter agreeing on amutually satisfactory work plan for the conduct of such activities.Except as required by applicable law, the Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information,future events or otherwise.

Cautionary Note to U.S. Investors Concerning Measured, Indicated and Inferred ResourcesThe terms "measured resources", "indicated resources" and "inferred resources" are used in this presentation. We advise investors that while these terms are recognized andrequired by Canadian regulations, the United States Securities and Exchange Commission does not recognize them. Under Canadian regulations, inferred mineral resourceestimates cannot be used as a basis for feasibility studies or other economic studies. Investors in the United States are cautioned not to assume that measured or indicated mineralresources will eventually be converted, in whole or in part, to mineral reserves. Investors in the United States are also advised not to assume that some or all of the inferred mineralresources exist, or that they may be economically or legally exploited.

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Experienced Team

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EXECUTIVE MANAGEMENT

Former members of Canadian Malartic development, construction and operating teams

Luc LessardPresident,

CEO & Director

Anthony GlavacChief Financial

Officer

Ronald Bougie

VP, Eng. & Construction

Guy BelleauGeneral Manager &

Community Relations

Hélène CartierVP, Env. &

Sustainable Dev.

François Vézina

VP, Technical Services

Christian Laroche

VP, Metallurgy

André Le BelVP, Legal Affairs

& Corporate Secretary


Capital Summary

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MAJOR SHAREHOLDERSOsisko Gold Royalties 18.3%Sprott Asset Management USA 7.2%Investissement Québec 4.4%Caisse de dépôt et placement du Québec 0.7%Falco Insiders 1.7%

CAPITAL STRUCTURE (JULY 31, 2020)Shares Outstanding (basic) 226,147,296Stock Options 11,294,352Warrants 6,402,222Shares Outstanding (fully diluted) 243,843,870Share Price C$0.50Market Capitalization (basic) C$113.1MCash position ~C$2.9M


Among Prolific Neighbors

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Holder of 70,000 hectares of exploration ground around the historic Horne Mine in Abitibi

Project Development


Southern Abitibi Greenstone Belt

50 gold and base metal minescurrently or historically active in the Rouyn-Noranda miningcamp.

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Larder Lake13 Moz Au

Kirkland Lake24 Moz Au

Timmins71 Moz Au

Rouyn-Noranda19 Moz Au

Malartic14 Moz Au

Bousquet21 Moz Au

Lennox Creek Fault Zone

Porcupine Destor Fault Zone

Cadillac Fault Zone

ONTARIOQUEBEC

Rouyn-Noranda

Timiskaming SedimentsCobalt PlateFelsic IntrusiveKap HighMafic/Ultramafic Volcanics

GeologyVal-d’Or

14 Moz Au

Major mining gold camp 0 25 50 75 100Kilometres

Rouyn-Noranda camp produced 19 Moz of gold and 2.9 Blbs of copper, but still remains very underexplored for gold.


Important Milestones

7

Filing of Environmental

Impact Assessment

Project authorization &

permitting

Filing of Feasibility

Study

Confirmation Drilling

Program at Horne 5

New geological resources

update and publication of

the PEA

NI 43–101 Horne 5 resource estimate

(March 2014)

Digitization & compilation of

Horne historical drill

results(Aug. 2013)

Falco acquires the properties

(Sept. 2012)

End of mining operations

(2.5Blbs Cu & 11.5Moz Au)

Initial production

Discovery of the Horne Mine

1923 1927 1976 2012 2013 2014 2015 2016 2017 2018 2019 2020

Project authorization, permitting and

project financing


Combining All the Right Elements

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Experienced Team• Experienced mine builders and operators

with track records • Innovative management• Strong institutional support and backing

by Osisko Gold Royalties• Well positioned to advance the Horne 5

Project

Approach• Strong support at all levels (community,

provincial and federal)• Multiple community focused initiatives• Low environmental impact project

Project• Mondial class asset• One of the largest gold projects in North

America- Reserve (P+P): 6Moz AuEq- Resource (M&I+Inf): 10+Moz AuEq

• Robust business model• Annual production ±340koz AuEq for 15

years

Jurisdiction• Horne 5 is located in a historical mining

community• Clear legislation and permitting pathway• Québec province supports mining industry


Substantial Upside to Feasibility

Mining reserves : 81 Mt(2.36 g/t Au Eq)

Inferred resources :± 21.5 Mt(2.51 g/t Au Eq)

HORNE PAST PRODUCTION:53.7 Mt @ 6.1 g/t Au, 13 g/t Ag, 2.22% Cu

For 11 Moz Au & 2.5Blbs Cu

Continuity of operation of the Horne Mine (world-class deposit)

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Shaft Quemont 2

Horne 5 Deposit

Potential for increasing life of mine (LOM) at depth


Major VMS System

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Quemont 2 Horne

HORNE 5Thickness of the mineralized zone of more than 100 meters

(facilitates bulk mining)


Mineral Reserves & Resources

PROVEN & PROBABLE

MEASURED & INDICATED + INFERRED (at C$55 NSR cut-off)

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Tonnes(Mt)

Au Eq.(g/t)

Au(g/t)

Ag(g/t)

Cu(%)

Zn(%)

ContainedAu Eq. (koz)

Contained Au

(koz)

Contained Ag

(koz)

Contained Cu

(Mlbs)

Contained Zn

(Mlbs)

Proven 8.4 2.34 1.41 15.75 0.17 0.75 636 384 4,272 31.4 139.6

Probable 72.5 2.36 1.44 13.98 0.17 0.78 5,503 3,359 32,557 270.9 1,242.3

Total P&P 80.9 2.36 1.44 14.17 0.17 0.78 6,139 3,740 36,829 302.3 1,381.9

Tonnes(Mt)

Au Eq.(g/t)

Au(g/t)

Ag(g/t)

Cu(%)

Zn(%)

ContainedAu Eq. (koz)

Contained Au(koz)

Contained Ag

(koz)

Contained Cu

(Mlbs)

Contained Zn

(Mlbs)

Measured 9.3 2.59 1.58 16.20 0.19 0.83 770 470 4,824 38.0 168.5

Indicated 81.9 2.56 1.55 14.74 0.18 0.89 6,731 4,070 38,796 325.4 1,599.3

Total M&I 91.2 2.56 1.55 14.89 0.18 0.88 7,501 4,540 43,620 363.4 1,767.8

Inferred 21.5 2.51 1.44 23.04 0.20 0.71 1,736 1,000 15,925 96.3 337.2


Horne 5 - A World Class ProjectReserves

• 6 Moz Au Eq. (Proven/Probable)– Contained gold: 3.7 Moz– Recovered gold: 3.3 Moz

• ±10 Moz Au Eq. (including M&I and Inferred Resources)Estimated average annual payable gold production

• 219,000 oz Au, over 340,000 oz AuEqVMS polymetallic deposit

• Favourable to bulk mining methods Underground mining operations (+16,000 tpd)

• 81 Mtonnes @ 2.36 g/t Au Eq.• High level of automation/teleoperation• > 15 years with the potential of 10 additional years at depth

Investment of more than C$ 1 billionHorne 5 will be one of the most technologically advanced and efficient hard rock underground mines in North America.

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Mining

Ore body specifications• Vertical and massive deposit• Low-grade • Transverse long-hole stoping• Exceptional rock quality • Very low dilution level (<3%)

Depth → 650 m to 2,400 m from the surfaceOpportunity for using the latest technologies

• Remote operation, automation, robotics, AI & electric vehicles to enhance:

– Productivity– Equipment availability– Safety– Talent management– Savings on maintenance costs

2 Phases of stope development• Phase I: using the existing Quemont shaft• Phase II: requires the deepening of the Quemont shaft

Requires the dewatering of the historical mine (11M m3)

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Mining Equipment

Item TotalScoop 17 tonnes 3Scoop 17 tonnes (Spare) 1Mine Truck 60 tonnes 4Jumbo 2 Booms Automated 4Bolting Machine 4Bolting Machine Spare 1Scoop 21 tonnes 4Scoop 21 tonnes (Spare) 1Mine Truck 60 tonnes (Phase 3) 2Production Drill Automated 4Production Drill Automated (Spare) 1Cable Drill + Bolt 2Shotcrete Machine (wet) 2

UNDERGROUND MOBILE EQUIPMENT

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Opportunities for costs savings on mining operations

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Increasing the size of the electricunderground mining load-haul-dump loaders (LHD) from 21 to 25 tonnes

Mining equipment (cont’d)


ProcessingMill throughput

• ±16,000 tpdPrimary – secondary grindingCycloning/flotation circuit

• Copper concentrate @ 16% Cu (±130 tpd) • Zinc concentrate @ 52% Zn (±200 tpd)• Pyrite concentrate

Pyrite concentrate regrinding circuit (±10 microns)

Tank leachingCarbon in pulpElution and refining

• Silver-gold doré bar Cyanide destruction circuitTailing disposal:

• Underground: Paste/hydraulic backfill• Surface: Thickened tailings (Historical

Norbec Site)

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Strong Economics with Few Peers

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ECONOMICS PARAMETERS BASE CASE – FEASIBILITY STUDYPre-Tax NPV (5%) – US$ & IRR $1,012 M pre-tax NPV

18.9% IRRPost-Tax NPV (5%) – US$ & IRR $602 M post-tax NPV

15.3% IRRPayback Period (after-tax, start of production) 5.6 years

Life of Mine Gold Production Recovered 3.3 Moz gold or 5.1 Moz Au Eq.

Average Annual Metal Production (rounded)219 koz per year gold1,752 koz per year silver67 Mlbs per year zinc16 Mlbs per year copper

Mine Life (based on reserves) 15 years

Base Case Metal Prices – US$ and Assumed FX $1,300/oz Au, $19.50/oz Ag, $1.10/lb Zn, $3.00/lb Cu, CAD:US 0.78

Initial Capital – US$ $802 M

LOM Sustaining Capital – US$ $418 M

LOM Cash Costs & AISC (net of by-products) – US$ $260/oz cash costs$399/oz AISC

LOM Cash Costs & AISC (gold-equivalent) $682/oz gold-equivalent cash cost$771/oz gold-equivalent AISC

LOM Average Process Recovery 88.1% gold, 71.5% silver72.9% zinc, 75.8% copper


Project Capital Costs

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CAPITAL COSTS EXPENDITURES* (US$ M)

* From the Feasibility Study

$200

$296

$14

$77

$53

$66 $37

$59

Pre-production capital costs US$802 M

Mining

Process Plant

Electrical and Communication

Site Infrastructure

Tailings and Water Management

IndirectsOwner’s Costs

Contingency


Horne 5 is a GOLD Project

NSR SPLIT

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67%

8%

10%

15%FROM THE FEASIBILITY STUDYGold: US$1,300/ozSilver: US$19.50/ozCopper: US$3.00/lbZinc: US$1.10/lbFX: 1.28

AT July 31, 2020 SPOT PRICESGold: US$1,974/ozSilver: US$24.30/ozCopper: US$2.89/lbZinc: US$1.04/lbFX: 1.34 73%

7%8%

12%


31%

50%

12%7%

Operating Costs* (C$/tonne)

Mining

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Description LOM Total ($M) Average LOM ($M/year) Average LOM ($/tonne) OPEX (%)

Mining 1,020 68 12.60 31Processing 1,654 110 20.45 50Tailings & Water Management 411 27 5.08 12G&A 231 15 2.86 7

Total 3,316 221 41 100

Processing

General AdministrationTailings, Water Treatmentand Environment

* From the Feasibility Study


Operating Costs (US$/oz)

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CASH COST SUMMARY (US$/oz)

Feasibility Study

Including Silver Stream at FS commodity prices and

exchange rate

Including Silver Stream at July 31, 2020 spot

commodity prices and exchange rate

Mining $241 $241 $231Processing $392 $392 $375Tailings & Water Management $97 $97 $93General Administration $55 $55 $52Smelting and Refining $150 $140 $140Royalties $37 $37 $51By-Product Credit ($710) ($599) ($583)Sustaining $127 $127 $121Closure $10 $10 $10

Total AISC $399 $500 $490Pre-Production Cost $243 $243 $233All-in Costs $642 $743 $722


Leading Low Cost Producers

LOW ALL-IN SUSTAINING COST, A TOP QUARTILE ASSET*

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$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

$1,800

$2,000

5 10 15 21 26 31 36 41 46 51 56 61

Horne 5 Project AISC of US$ 490/oz*

Cumulative Global Gold Production (Moz)

AISC (US$/oz) * From July 31, 2020, spot commodity prices and exchange rate


From Drilling to Production

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6 6

89

10

14

0

2

4

6

8

10

12

14

16

Canadian Malartic Detour Lake Brucejack Horne 5 Éléonore Eagle

Num

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etwe

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illin

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mm

erci

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Company :

Start of drilling :

Commercial :production :

Osisko Mining Corporation

2005

2011

DetourGold Corporation

2007

2013

Pretium Resources

2009

2017

FalcoResources

2015

2024

Goldcorp/Virginia Gold

2005

2015

VictoriaGold

2005

2019

Gap in years between first drilling and production compliant with mining

industry’s standards


Sensitivity to Gold Price

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GOLD PRICE (US$/oz) IRR (%)1,100 11.61,200 13.51,300 15.31,400 17.11,500 18.71,600 20.31,700 21.81,800 23.2 1,900 24.62,000 26.0

Significant value captured in higher gold price environment (1,500 2,000 US$/oz)

From the Feasibility Study


Project Financing

Since the beginning of 2019, Falco has entered into the following financing arrangements:

• Silver Stream with Osisko Gold Royalties of up to C$180 M (payable in instalments)

• C$15.9 M secured loan

Falco is continuing its efforts to finance the project development under various arrangements:

• Silver Stream Agreement ±C$180 M • Exportation credit agencies ±C$200 M

(Equipment financing)• Debt financing ±C$270 M• Equity financing ±C$500 M

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Environment

26

Environmental study

Filing of environmental impact assessment

Consultations – public hearings (BAPE - 2020)

PERMITTING CORPORATE

Start of geotechnical studies supporting neighbor’s authorization of the project.

Release of positive feasibility study

Silver stream financing to provide C$180M

Project financingAdvance discussion with neighboring partner

Community consultation created

A Clear Timeline to De-Risk Horne 5


Advancing Stakeholder Discussions

Falco continues the discussions with its neighboring partner to obtain the authorizations required for the next steps in the development of the Horne 5 Project.

• Geotechnical investigation

• Financial guarantee• Operating licence

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Horne Smelter

Horne 5 Project


2020 Main Focus

• Receive all required third-party approvals to start the Project’s development program

• Obtain acceptability from Québec Government to be able to initiate BAPE process in second half of 2020

• Obtain project financing• Initiate the construction of dewatering infrastructures by the end

of 2020/beginning of 2021• Create shareholder value

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Contact usHEAD OFFICE1100, Canadiens-de-Montréal Ave, Suite 300Montreal (QC) H3B 2S2Tel. : +1.514.905.3162Toll-free : +1.888.915.2009

PROJECT OFFICE161, Murdoch AveRouyn-Noranda (QC) J9X 1E3Tel. : +1.819.917.3875

INVESTOR INQUIRIESLuc Lessard, President & CEOTel : +1.514.261.3336Email : [email protected]

Jeffrey White, Manager, Investor RelationsTel : +1.416.274.7762Email : [email protected] 29

www.falcores.comTSXV : FPC

horne 5 project · • low environmental impact project. project • mondial class asset • one of...

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