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Sage march 2014 investor presentation

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  • 1. Path to Production Path to Production Timmins, Ontario TSX-V : SGX Aug-Sept 2012 March 2014
  • 2. Path to Production Forward Looking Statements Statements made in this presentation, other than those concerning historical information, should be considered forward-looking statements which are subject to various risks and uncertainties. Such forward-looking statements are made based on management’s belief as well as assumptions made by, and information currently available to, management. The Company’s actual results may differ materially from the results anticipated in such forward-looking statements as a result of a variety of factors. Additional information concerning factors that could cause actual results to materially differ from those in such forward-looking statements is contained in the Company’s filings with the securities and regulatory authorities. Note: All currencies are in Canadian dollars unless otherwise noted 1
  • 3. Path to Production CORPORATE VISION Sage Gold plans are to develop production from their existing resources on the Clavos and Lynx projects to generate cash flow. CORPORATE STRUCTURE • • • • • • • Shares O/S: 123.9 million Shares F/D: 139.1 million Current price: $0.02 52 week high/low: $0.045/$0.01 Market Cap: C$ 2.5 million Average Strike Price of Warrants/Options: $0.14 Proceeds from Warrants/Options: $2.1 million Exchange Symbol: TSX.V – SGX OTC – SGGDF (USA) 2
  • 4. Path to Production SAGE GOLD ADVANTAGE Near term production 1. Clavos Au and Lynx Cu- Ag - Au project    Potential to generate strong cash flow for the company Sage has access to custom mills for both the Clavos and Lynx projects Permits in place to re-open Clavos for dewatering and underground rehabilitation 2. Both Clavos and Lynx have 43-101 resources 3. Preliminary Economic Assessment on Clavos Project  4. Blue Sky Potential – Clavos and Lynx Projects   5. 71% Internal Rate of Return (pre-tax) and $23.2MM Net Present Value 47% Internal Rate of Return (after-tax) and $12.6MM Net Present Value Open at depth and on multiple directions along strike Management will focus on continuing to increase resources Excellent Infrastructure - Clavos  Established infrastructure with $46 million spent on underground development Note: The PEA does not indicate the economic viability of the mineral resource and is preliminary in nature, includes inferred resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves and that there is no certainty that the PEA will be realized. Mineral resources that are not mined reserves do not have demonstrated economic viability. A PEA is deemed to be reliable +/- 50% level. 3
  • 5. Path to Production TIMMINS GOLD CAMPS CLAVOS PROJECT Timmins, Ontario 4
  • 6. Path to Production CLAVOS PROJECT- HIGHLIGHTS  Located in the prolific Timmins Mining camp and close geographically (20kms) to Goldcorp’s (TSX-G) high grade Hoyle Pond mine which has produced more than 2.4 M ozs since 1985 and is still in operation  Existing infrastructure in place including underground ramp access to the 300m level, underground levels developed every 25m, power to site, surface ventilation system, water management system  Low initial Capex required for potential production,$14.1million (represents 100% of Capex requirement)  Permits in place to re-open Clavos mine  Clavos is also located 10kms from the Brigus Gold mill in Stock Township.  Natural Gas pipeline on the Clavos Property – Potential Fuel and Power savings 5
  • 7. Path to Production NEAR TERM PRODUCTION PLANS CLAVOS PROJECT Timmins, Ontario Q2-3 2014  Financing Q4 2014 – Q1 2015  Dewater and Rehab mine  Initial Tonnage Extraction and Production Q4- 2015 - Commercial Production 6
  • 8. Path to Production GOLD PRICE Gold Production US$ / Oz (Au) Oz/Au $1400/Oz $1500/Oz Base Case $1600/Oz 145,448 145,448 145,448 Revenue Cdn$ million 203.6 218.2 232.7 Initial Capital Expenditures (100%) Cdn$ million 14.1 14.1 14.1 Sustaining Capital Cdn$ million 21.1 21.1 21.1 Total Capital Cdn$ million 35.1 35.1 35 .1 Operating Expense Cdn$ t/Ore 142.5 142.5 142.5 Net Smelter Return Cdn$ t/Ore 6.1 6.5 7.0 Cash flow (undiscounted) Cdn$ million 19.9 34.0 48.1 Pre Tax Net Present Value (NPV) 8% Internal Rate Of Return (IRR) Cdn$ million % 13.5 48% 23.2 71% 33.0 94% Cdn$ million % 5.6 27% 12.6 47% 19.5 67% Year Year 7 2.25 7 2.00 Clavos PEA Economic Model 7 1.75 After Tax Net Present Value (NPV) 8% Internal Rate Of Return (IRR) Life of Mine Payback Period Note - assumes an exchange rate of 1:1 of Cdn to US Dollar; -tax rates are based on a blended rate between Sage and SAS -excludes any financing costs -contingency on capital expenditures of 30% -CAPEX figures represents 100% of financing The PEA does not indicate the economic viability of the mineral resource and is preliminary in nature, includes inferred resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves and that there is no certainty that the PEA will be realized. Mineral resources that are not mined reserves do not have demonstrated economic viability. 7
  • 9. Path to Production WHAT MAKES CLAVOS UNIQUE ENVIRONMENTAL PERMITTING  a ll permits in place to dewater and commence Tonnage extraction – 700 tpd EXISTING SURFACE INFRASTRUCTURE         10 km truck haul road to Hwy 101 10 km from 27.6 kV overhead power line mine access roadways mobile shop, generator, compressor & cold storage building office trailer dry facility settling & polishing pond s replacement value $5.0m 8
  • 10. Path to Production CLAVOS EXISTING UNDERGROUND Footwall Hanging Wall Sediment Contact Hanging Wall Footwall Contact Sediment 2.5 km      2,923m of primary access 710m of secondary access 3,208m of lateral level development +200,000 m of surface & underground diamond drilling 10 levels with detail geological mapping & channel sampling  Replacement value $40.0m 9
  • 11. Path to Production CLAVOS NI43-101 MINERAL RESOURCE Oct ‘12 Category Tonnes Total Indicated Grade 1,258,400 4.81 g/t Total Ounces 194,600 __________________________________________________________________________ Total Inferred 795,600 4.70 g/t 120,000 __________________________________________________________________________ Note: The 2012 resources are estimated at a cut-off grade of 2.75 g/t Au, high gold assays are cut to 60 g/t Au and an average long-term gold price of US$1600 per ounce was used. Convert Resources To Reserves:  discrepancy in underground survey prevents assigning reserve categories  re-survey to verify actual location for underground workings  stope definition drilling to provide data base for upgrading resource categories NOTE: subject to PFS 10
  • 12. Path to Production CLAVOS PEA REPORT 2013      Forecasted production rate 600 tpd Life of Mine 7 years Forecasted Full production 3rd year, 4th Qtr. Internal dilution in resource block estimate External dilution: - cut & fill methods 10% at 0 gms/t - long hole methods 40% at 0 gms/t  Tonnage recovery: - cut & fill methods 95% - long hole methods 90% Note: The PEA does not indicate the economic viability of the mineral resource and is preliminary in nature, includes inferred resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves and that there is no certainty that the PEA will be realized. Mineral resources that are not mined reserves do not have demonstrated economic viability. 11
  • 13. Path to Production ONAMAN PROPERTY - LYNX PROJECT - ONTARIO Lynx Cu Ag Au 9,096 acres Mill 12
  • 14. Path to Production ONAMAN LYNX PROJECT Beardmore, Ontario Lynx NI43-101 Open Pit Resource 485,000 tonnes 2.1 % Cu, 45.3 g Ag/T, 0.70 g Au/T at 1% Cu cut off Lynx NI43-101 Resource 1.936 million tonnes, 1.44% Cu 39.6 g Ag/T, 0.58 g Au/T Yellow = .5% Cu x 3 metres – Cut Off Red = 1% Cu x 3 metres 13
  • 15. Path to Production LYNX PROJECT – Cu Ag Au  Located within the Onaman Property – Northern Ontario  VMS system – high grade Cu-Ag-Au 43-101 Resource  Numerous VMS targets on the Onaman Property – potential to host large VMS deposit  Open at depth and along strike – Existing compliant resource - only drilled to 250-300 metres  Open Pit component – potential to increase size to the north  Existing mill in Beardmore – 75 km to Lynx 14
  • 16. Path to Production . Patrick J. Mars Chairman and Director C. Nigel Lees President, CEO and Director Peter Bojtos Director Gary Robertson Director Joe Baylis Director Sandy Chim Director Peter Freeman Director BOARD OF DIRECTORS Mr. Mars is an independent consultant specializing in mine financing and analysis with over 30 years of experience in the investment industry. Mr. Mars has acted as Chairman, CEO, or Director for several publictraded mining companies and is currently Director of Aura Minerals, Carpathian Gold, Selwyn Resources and Yamana Gold. Mr. Lees is a founder and past director of TVX Gold Inc., a significant gold producer in North and South America, which merged into Kinross Gold, listed on the TSX and the New York Stock Exchange. Mr. Lees has over 30 years experience in the Canadian investment industry and is currently a Director of several publicly traded mining companies including Yamana Gold. Mr. Bojtos is a professional engineer with extensive experience in mineral development and production. Since 1996 following a successful career as CEO of several companies, Mr. Bojtos serves on mining company boards as an independent Director. Mr. Robertson is a Certified Financial Planner. He has worked in the financial industry for the past twenty years, and presently serves on the board of several private companies as well as on the board of six Canadian junior gold mining companies. Mr.Baylis brings over 23 years of domestic and international mining industry experience to the Company. Mr.Baylis graduated with an LLB from the University of Western Ontario and is a member of the Law Society of Upper Canada. Mr. Chim is an international business executive. He is the President and CEO of Century Iron Mines Corporation (TSXFER), a director of Augyva Mining Resources Inc. (TSX.V-AUV) and non executive director of Prosperity Minerals Holdings Limited. Mr.Chim resides in Kowloon, SAR, Hong Kong, PRC. Mr. Freeman has extensive experience in public markets, finance and compliance, this includes six years as Director of Markets and Compliance at the OFEX Market (now ISDX). Mr. Freeman is Compliance Officer of Loeb Aron & Company a London corporate finance firm, a Lay member of the Upper Tribunal (Tax & Chancery) and of the Probate Committee of the ICAEW. Mr. Freeman is also a director of TSX-V quoted Cabo Drilling Inc., of AIM quoted Capital Lease Aviation PLC and of Jenolan Ltd. 15
  • 17. Path to Production MANAGEMENT and CONSULTANTS Management C. Nigel Lees President, CEO and Director William D. Love VP and Business Development Ron Reed Chief Financial Officer Michael Skutezky Secretary and Legal Counsel Mr. Lees is a founder and past director of TVX Gold Inc., a significant gold producer in North and South America, which merged into Kinross Gold, listed on the TSX and the New York Stock Exchange. Mr. Lees has over 30 years experience in the Canadian investment industry and is currently a Director of several publicly traded mining companies including Yamana Gold. Mr. Love is a geologist who has been involved in mineral exploration in Canada and was part of the world class Hemlo discovery team. He was also an institutional equity salesperson in London, England, for a Canadian brokerage firm. Mr. Love has spent the last fifteen years as a venture capitalist and a corporate finance specialist in a variety of resource and technology companies. Mr. Reed is a CGA with an MBA ( Finance) from the NY Institute of Technology. He has more than 20 years of senior experience in implementing financial business strategies and has been involved in more than 15 acquisition and divesture transactions. Since 2009 he has been providing CFO services in the mining sector. Mr. Skutezky was Assistant General Counsel of Royal Bank for 25 years focused on International Project financing based in Montreal and Toronto, in addition to working in Eastern Europe with Canadian Law Firms. He has recently formed his own professional corporation for the practice of law and is the principal of Rhodes Capital Corporation. Consultants Peter Hubacheck P.Geo, QP Bob Ritchie Mining Engineer Mr. Peter Hubacheck is a consulting geologist and President of W. A. Hubacheck Consultants Ltd. He has over 35 years of experience as a project geologist, exploration manager and Qualified Person for the purposes of NI 43-101, with experience in the exploration for gold, silver, base metals, uranium and diamonds in Canada and the USA. He holds a Mining Technologist (1974) diploma from the Haileybury School of Mines and Technology, Haileybury, Ontario and a B.A.Sc. (Geol. Eng. 1977) degree from the South Dakota School of Mines and Technology, Rapid City, South Dakota. Mr. Ritchie is a Professional Engineer with over 40 years of experience in mine management and development, feasibility studies and mine construction. He has worked with several mining companies including Goldcorp, Noranda Mines and St. Andrew Goldfields. He was responsible for the construction of the Stock (now Brigus Gold) Mill. Mr. Ritchie is a graduate of the Michigan Technological University with a Bachelor of Science in Geology Engineering. He is also a Qualified Person (QP) as defined by NI43-101. 16
  • 18. Path to Production WHY INVEST IN SAGE GOLD  Near Term Potential Production Q4 -2015  Clavos Positive Preliminary Economic Assessment – low Capex/ Fast Payback  Lynx – Compliant Resource / Large Deposit Potential/ Open Pit tonnage  Clavos/ Lynx - potential to increase tonnage through further in-fill and exploration drilling  Production Financing – Joint Ventures being pursued  Low market capitalization SMALL AND PROFITABLE IS BEAUTIFUL 17
  • 19. Path to Production CONTACT INFORMATION Sage Gold Inc. 365 Bay Street, Suite 500 Toronto, ON M5H 2V1 Tel.: 416 204-3170 Fax: 416 260-2243 info@sagegoldinc.com Karen Levy 18