Mandalay Resources February 2017 Investor Presentation

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Mandalay Resources February 2017 Investor Presentation

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Mandalay Resources February 2017 Investor Presentation

  1. 1. This presentation contains "forward-looking statements" within the meaning of applicable securities laws, including statements relating to life of mine production plans, exploration plans and the growth and strategy of Mandalay. Actual results and developments may differ materially from those contemplated by these statements depending on, among other things: exploration results or production results not meeting management’s expectations; capital, production and operating cost results not meeting current plans; and changes in commodity prices and general market and economic conditions. The factors identified above are not intended to represent a complete list of the factors that could affect Mandalay. A description of additional risks that could result in actual results and developments differing from those contemplated by forward looking statements in this news release can be found under the heading “Risk Factors” in Mandalay’s annual information form dated March 30, 2016 and in its final prospectus dated July 18, 2016, copies of which are available under Mandalay's profile at www.sedar.com. Although Mandalay has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward- looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. Quality Control and Assurance Quality control and assurance programs are implemented in line with the standards of National Instrument 43-101. The exploration programs at Costerfield and Björkdal are supervised by Chris Gregory (Member, Australian Institute of Geoscientists, VP of Operational Geology for Mandalay and a “Qualified Person” as defined under National Instrument 43-101. Mr. Gregory regularly visits Costerfield and Björkdal, and supervises the collection and interpretation of scientific and technical information contained in this presentation. The exploration programs at the Cerro Bayo and Challacollo projects are supervised by Scott Manske, Chief Cordilleran Geologist of Mandalay Resources, and an Oregon registered Professional Geologist. A “Qualified Person” as defined by NI 43-101, he has reviewed and approved the technical and scientific information on these projects contained in the presentation. Dr. Mark Sander (Member: AusIMM), President and CEO of Mandalay, has visited the Costerfield, Cerro Bayo, Challacollo, and Björkdal and has supervised the preparation of this presentation. All currency references in US$ unless otherwise indicated Forward-looking Statements 2
  2. 2. A Values-Based and Value-Focused Company WE ARE SUCCESSFUL WHEN: Our employees live and work safely and experience the personal satisfaction that comes with high performance and recognition The communities in which we operate value our presence Our environmental impact is minimized and causes no permanent harm We have a large, diversified set of customers who are delighted with and compete for our products Our shareholders realize a superior total return on their investment and support our corporate values Our values are visibly demonstrated by strong local management, at the point of impact with our stakeholders, and coordinated across the Company for maximum effect Profitable and Dividend-Paying: (4.3% yield)* *Trailing 12 months dividends divided by current market capitalization (Feb. 15, 2017) 3
  3. 3. Designed for Value: How We are Different  Acquire only when we see possibility of 3-5X value uplift in 3-5 years  Target cash cost of production: 50% of ‘reversion to mean’ metal price  100% ownership of all operations; no private royalties, no streams  Flat, virtual, low-cost organizational structure; local GM accountability  Direct relationships and sales contracts with customers  Dividend-paying: 6% of trailing quarterly revenue  No hedging of metal prices  Lightly levered with low-interest, gold-convertible bonds  Stingy with equity  Disciplined management processes operated with integrity  Compensation systems based on value-add 4
  4. 4. 1.7 32 79.9 67.7 64.4 68 50.9 -0.8 30.6 61.2 75.9 52.4 73.4 53.7 20.6 92.2 171.8 166.9 184.6 194.5 185.5 -50 0 50 100 150 200 250 2010 2011 2012 2013 2014 2015 2016 2009 • Costerfield, Australia • Gold & Antimony 2010 • Cerro Bayo, Chile • Silver & Gold 2014 • Challacollo, Chile • Silver & Gold 2014 • Björkdal, Sweden • Gold Results: Strong Performance Across the Price Cycle 1. The Company defines EBITDA as earnings before interest, taxes and non cash charges/ (income). EBITDA should not be considered by an investor as an alternative to net income or cash flow as determined in accordance with IFRS – EBITDA figures reflect adjusted EBITDA, please see the Company’s Management’s Discussion and Analysis. TIMELINE 2016 Quarterly Financial Measures Revenue, EBITDA(1) & Cash from Operations Revenue EBITDA Cash from Operations • No acquisition • Optimize operations • Pay down debt • Exchange warrants • Begin dividends 2011-2013 5 50.4 54.2 48.5 32.4 17.3 22.1 13.8 14 7.3 22.3 15.5 8.6 0 10 20 30 40 50 60 Q1 2016 Q2 2016 Q3 2016 Q4 2016 US$MM US$MM
  5. 5. 1. Assumes full-year 2016 prices: Au $1,258/oz, Ag $17.00/oz, Sb $6,505/t 6 Based on Matched Production and Reserve Growth 6 With Continuing Low Cash and all-in Production Costs 15,854 63,351 107,941 126,908 154,810 166,679 254,000 520,000 633,000 772,000 1,123,000 1,070,000 0 200,000 400,000 600,000 800,000 1,000,000 1,200,000 0 50,000 100,000 150,000 200,000 250,000 300,000 2010 2011 2012 2013 2014 2015 2016 2017E OzAuEq.Year-EndReserves OzAuEq.AnnualProduction 145,497 136,000 – 160,000(1) P&L Margin EBITDA Margin 1 mine restart 1 mine restart 1 mine transformation 1 mine restart 1 mine transformation 2 mines producing 1 mine transformation $600 $800 $1,000 $1,200 $1,400 $1,600 $1,800 - 10,000 20,000 30,000 40,000 50,000 60,000 2010 2011 2012 2013 2014 2015 2016 $/OzAuEq.(Cost)orAu(Price) AuEq.Oz/Qtr Production Cash Cost (Oz Au Eq) AISC (oz Au Eq) Average Au Price ($US Oz) Reducing volatility with growing number of operations
  6. 6. 0 50 100 150 200 250 300 2010 2011 2012 2013 2014 2015 US$/ozAuEq.P&PAdded Mandalay cost of acquiring and discovering reserves Cumulative Cost per oz Au Eq. Acquired or Discovered Cost Per oz Au Eq. Discovered in yr Cost Per oz Au Eq. Acquired in yr And Adding Reserves Cost-effectively 1. 2016 metal price assumptions: $1,202/oz Au, $16.87/oz Ag and $6,820/t Sb 2. Source: BMO Exploration adds at cumulative average $50/oz Au Eq. Acquisition + Exploration adds at cumulative average $78/oz Au Eq. (for developed & producing reserves) Cerro Bayo Björkdal Median for all Au sector acquisitions 2012 – 2016 = $254/oz Au Eq.(2) 7
  7. 7. 50% 100% 150% 200% 250% 300% 350% Mandalay Cumulative Returns 11.5% Annual Compounded Rate of Return Gold Silver (1) Adjusted for reinvested dividends. Assumes investment in Mandalay made as part of private placement announced on 24-Sep-09 to fund acquisition of Costerfield and accounts for warrant exchange offer of 0.47 shares per warrant. (2) Peer Index: Alacer, Argonaut, Dundee PM, Kirkland, Klondex, Perseus, Primero, Richmont. (3) Gold Seniors: Agnico Eagle, AngloGold, Barrick, Goldcorp, Gold Fields, Kinross, Newcrest, Newmont, Polyus, Randgold. (4) End date as at February 13, 2017. Creating Superior Value for Shareholders $0 $2,000,000 $4,000,000 $6,000,000 $8,000,000 $10,000,000 $12,000,000 $14,000,000 2010 2011 2012 2013 2014 2015 2016 Dividends Paid (USD)** 6% of revenues (dividend contribution) 11.5% Cumulative Total Return (% Value Change)* *Q3 2010 to Q4 2016, includes all dividends paid. Source: MetalPrices.com for metal spot prices Index: September 30, 2009 = 100. Mandalay share price: $0.80. Graph updated quarterly, prices as at the last trading day of each respective quarter. **Annual cash dividend paid quarterly, based on 6% of the Company’s trailing quarter’s gross revenue and the future cash requirements of the Company 0.0 5.0 10.0 15.0 20.0 25.0 $0 $20,000 $40,000 $60,000 $80,000 $100,000 Sep-09 Sep-10 Sep-11 Sep-12 Sep-13 Sep-14 Sep-15 Sep-16 Volume(millions) InvestmentValue Mandalay(1) Peer Index(2) Gold Senior(3) Total Return vs. Peers and Seniors A $10,000 investment on September 24, 2009 would be worth today(4): • Mandalay: $54,710 • Peer Index: $14,125 • Gold Seniors: $7,509 Record Dividends
  8. 8. Trading Volume, Ownership and Coverage Major Shareholders(1) Holders Shares (Million) Shares (Percentage) GMT Capital 65.0 Sentry Investments 43.5 Ruffer LLP 42.0 Plinian + Management + Directors 31.2 Fidelity Investment Advisors (UK) 16.3 Large Holders (Top-5) 198.0 Other Holders 253.2 TOTAL 451.2 Analyst Coverage Firm Analyst BMO Brian Quast Desjardins Mike Parkin Haywood Ben Asuncion Raymond James Chris Thompson Scotia Craig Johnston Volume 30-day Average Daily Volume 933,114 100-day Average Daily Volume 1,256,682 14.4% 9.6% 9.3% 6.9% 3.6% 55.9% 9 Average Daily Volume across all trading platforms (as of Feb 14, 2017) 1. Known ownership positions are estimates - as at January 16, 2017 - Ownerships and percentages rounded to one decimal place.
  9. 9. Strong Balance Sheet 10 1. Exercise Price: C$0.83 – C$0.91 expiry dates ranging from Mar 9, 2017 – Mar 23, 2021 2. Market Capitalization converted to US$ using exchange rate of 1 CAD = 0.76 USD (Feb. 15, 2017) 3. Cash and Cash Equivalents and Interest-Bearing Debt as at end of Q4-2016 (Dec 31, 2016) As at Feb. 15, 2017 Millions (Except Share Price Info) Share price (Feb. 15, 2017 - close) (C$) $0.80/shr Shares Outstanding 451.2 Stock Options(1) 19.2 Fully Diluted Shares Outstanding 470.4 Market Capitalization (C$) $361.0 Cash and Cash Equivalents (US$)(3) $66.9 Total Interest-Bearing Debt (US$)(3) $59.0 Total Enterprise Value (US$)(2,3) $268.1 Net Cash (US$) $7.9
  10. 10. Costerfield Gold-Antimony Mine: Turnaround Complete Land package 1,293 hectares Ownership 100% Number of Employees(1) 196 direct, 40 contractors: 236 total Current throughput (Q4-2016) 427 tpd Current plant recoveries (Q4-2016) Au: 88.63%, Sb: 95.91% 1. As at year-end 2016 11
  11. 11. 12 Costerfield: Continuous Improvement $0 $100 $200 $300 $400 0 10,000 20,000 30,000 40,000 50,000 Q4-09 (Dec. only) Q4-10 Q4-11 Q4-12 Q4-13 Q4-14 Q4-15 Q4-16 USD/Tonne TonnesPerQuarter Mining Rate and Unit Cost t Mined Cost/ t Mined $0 $50 $100 $150 0 10,000 20,000 30,000 40,000 50,000 Q4-09 (Dec. only) Q4-10 Q4-11 Q4-12 Q4-13 Q4-14 Q4-15 Q4-16 USD/Tonne TonnesPerQuarter Processing Rate and Unit Cost t Processed Cost/ t Processed Cont. Impr. Start-up $0 $1,000 $2,000 $3,000 0 5,000 10,000 15,000 20,000 Q4-09 (Dec. only) Q4-10 Q4-11 Q4-12 Q4-13 Q4-14 Q4-15 Q4-16 USD/OzAuEq. OuncesPerQuarter Au Equivalent Production and Unit Cost Oz Au Eq. Cost/ Au Eq. Oz Costerfield Operational Improvements: Record High Rate Record Low Cost  Improved mine output/mill throughput from 170 tpd to 450 tpd (capped by grid power and site grinding capacity)  Changed mining method from cut-and-fill to blast-hole stoping with cemented rock fill (greater production, lower unit costs)  Introduced contract capital development for faster and lower cost results  Increased sub-level spacing from 5 – 10 m  Replaced mechanized mining fleet  Introduced mobile crusher to decrease particle size of mill feed (better recoveries, higher throughput)  Grew mine life from zero reserves to roughly 4 years while mining continuously for 6 years  Operations continue setting records and new targets being tested 12 Start-up Transformation Cont. Impr.
  12. 12. 13 Expansion of existing lodes Entirely “new” lodes N-Lode North Brunswick Lode
  13. 13. Björkdal Gold Mine: Emerging from Intensive Care Land package 12,949 hectares Ownership 100% Number of Employees(1) 178 direct, 120 contractors: 298 total Current throughput (Q4-2016) 3,452 tpd Plant recoveries (Q4-2016) Au: 86.02% 1. As at year-end 2016 14
  14. 14. 15 Björkdal Operating Performance and Improvements $0 $5 $10 $15 $20 $25 $30 0 100,000 200,000 300,000 400,000 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 $/Tonne TonnesPerQuarter Mining Rate and Unit Cost t Mined Cost/ t Mined $0 $2 $4 $6 $8 $10 0 100,000 200,000 300,000 400,000 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 $/Tonne TonnesPerQuarter Processing Rate and Unit Cost t Processed Cost/ t Processed $0 $500 $1,000 $1,500 0 5,000 10,000 15,000 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 $/ozAu OuncesGoldPerQuarter Saleable Gold Produced and Unit Cost Au oz Cost/ oz Au Björkdal Operational Improvements: Record High Rate Record Low Cost  Introduced best practice mapping, drilling, sampling, and modelling of high nugget- effect gold deposits  Produced a more refined resource model to support more selective underground & open pit mining techniques  Establishing a local assay lab for faster grade control turnaround  Increasing grade of mill feed through more selective underground and open pit mining at an increasing rate (making up for discarding waste)  Pilot optical ore sorting  Pilot coarse and ultra-fine gold float 15
  15. 15. Transitioning to Proper Longitudinal Grade Control 16 Sampling every round results in discarding 30-40% of material
  16. 16. Ore sorting: Encouraging visual results backed up by preliminary processing results 17 “Ore” – Abundant vein fragments, presumed increased grade “Waste” – No vein fragments, presumed very low-grade Bulk Test Start Grade End Grade Times Upgraded Waste Rejection Gold Retained g/t Au g/t Au (%) (%) Underground Ore 1.93 2.97 1.54 43.0 87.0 Stockpile Ore 0.80 1.19 1.48 39.0 90.0 Result includes fines (-20mm) that are too fine to sort
  17. 17. Björkdal Processing Improvements 18 Completed:  Sampling survey on milling and gravity gold circuits to identify improvement opportunities  Laboratory flotation recovery study on effect of fineness of grind, % solids, and residence time – key for decision-making on possible future flotation circuit expansion  Pilot on-site testing of coarse and ultra fine gold flotation  Flotation circuit and ancillary equipment expansion study to determine OPEX and CAPEX for a planned flotation circuit expansion. Goal: improve flotation recovery and concentrate grade 2016 Planned Improvements:  Milling/Flotation material flow stability survey to identify areas where automation can be implemented to improve recovery  Introduction of high chrome grinding media for increased wear resistance, grinding media cost saving and improved pulp chemistry for improved flotation recovery
  18. 18. 19 Björkdal 2016 Reserves and Resources Increase Björkdal Reserves Ore (t) Au Grade (g/t) Au (cont. oz) Proven - - - Probable 10,778,000 1.69 586,000 Total 10,778,000 1.69 586,000 Björkdal Resources Ore (t) Au Grade (g/t) Au (cont. oz) Measured - - - Indicated 11,829,000 2.39 911,000 Total M&I 11,829,000 2.39 911,000 Inferred 3,564,000 1.71 196,000 Björkdal Resources Ore (t) Au Grade (g/t) Au (cont. oz) Measured - - - Indicated 7,524,000 2.47 598,000 Total M&I 7,524,000 2.47 598,000 Inferred 1,552,000 1.86 93,000 Björkdal Reserves Ore (t) Au Grade (g/t) Au (cont. oz) Proven - - - Probable 7,012,000 1.85 418,000 Total 7,012,000 1.85 418,000 As at December 31, 2015 As at September 30, 2016 Source: Björkdal – Roscoe Postle Associates, Effective September 30, 2016, documented in an independent NI 43-101 Technical Report filed Jan. 27, 2017
  19. 19. Cerro Bayo Silver-Gold Mine Land package 23,106 hectares Ownership 100% Number of Employees(1) 402 direct, 205 contractors: 607 total Current throughput (Q4-2016) 976 tpd Plant recoveries (Q4-2016) Ag: 86.74%, Au: 84.54% 1. As at year-end 2016 20 BRANCA KASIA RAMONA ETC. Emerging Vein
  20. 20. Cerro Bayo Operating Performance and Improvements Cerro Bayo Operational Improvements:  Shifted the mining method from shrinkage stoping to completely mechanized blast hole open stoping;  Ramped up throughput from 0 tpd – 1,400 tpd from three mines  Installed flotation automation system to maximize silver and gold recoveries  Extended mine life from 3 years at 1,200 tpd to 5 years at 1,400 tpd while mining continuously for 4 years  Ongoing improvements to increase pace of development mining 21 $0 $50 $100 0 50,000 100,000 150,000 Q4-10 Q2-11 Q4-11 Q2-12 Q4-12 Q2-13 Q4-13 Q2-14 Q4-14 Q2-15 Q4-15 Q2-16 Q4-16 $/Tonne TonnesPerQuarter Mining Rate and Unit Cost t Mined Cost/ t Mined $0 $50 0 50,000 100,000 150,000 Q4-10 Q2-11 Q4-11 Q2-12 Q4-12 Q2-13 Q4-13 Q2-14 Q4-14 Q2-15 Q4-15 Q2-16 Q4-16 $/Tonne TonnesPerQuarter Processing Rate and Unit Cost t Processed Cost/ t Processed $0 $5 $10 $15 $20 0 500,000 1,000,000 1,500,000 Q4-10 Q2-11 Q4-11 Q2-12 Q4-12 Q2-13 Q4-13 Q2-14 Q4-14 Q2-15 Q4-15 Q2-16 Q4-16 $/ozAgNetByproduct OzAg/Quarter Saleable Silver Produced & Unit Cost Ag oz Cost/ oz Ag net Au Record High Rate Record Low Cost
  21. 21. Challacollo Silver-Gold Project 2016 Land package 20,378 hectares Ownership 100% Location 130 km SE of Iquique, Chile Mineralization Epithermal, oxidized Ag-Au Number of Employees(1) 6 direct: 6 total Elevation Approx. 1,500 ASL 1. As at year-end 2014, filed in Company’s Annual Information Form 22  Water exploration and water rights transfer  Exploration and optimization Large self-potential anomalies north and south of Lolon vein Lolon vein
  22. 22. Invest with us: How we will deploy your capital 1. Acquire new assets counter-cyclically – only at deep discount to value • Deliver base case returns at least 2x the investment • Upside case 3-5x over 3-5 years based on specific testable hypotheses • Keep portfolio evergreen – exit assets that do not fit 2. Execute focused operational improvement projects at each site 3. Apply relentless, disciplined financial management • Exploration – project portfolio targeted on discovery of near-term reserves • Mining – projects focused on safer, more mechanised mining with higher extraction, lower dilution and reduced cost • Metallurgical – projects focused on higher recovery, higher availability, higher quality products with higher payables and reduced costs • Commercial – more diverse customers paying better terms • Low cash cost and overheads for high EBITDA margins • Low DD&A for high P&L margins – low acquisition cost, focused CAPEX & exploration • Prudent, low-cost leverage to fund growth when needed • Minimize shareholder dilution • Return cash to shareholders: dividend = 6% trailing qtr. revenues 4. Engage all stakeholders in a values-based and value-focused organization 23
  23. 23. For more information, please contact: Greg DiTomaso Director, Investor Relations Tel: 647.260.1566 Email: g.ditomaso@mandalayresources.com Company Website: www.mandalayresources.com Twitter: @MandalayAuAg
  24. 24. 25
  25. 25. Management and Board of Directors Senior Management Board of Directors Sanjay Swarup, CFO Former Lonmin plc, over 20 years of industry experience Belinda Labatte, Head of Stakeholder Engagement & Corporate Affairs Over 15 years of industry experience Braam Jonker, Independent Director Peter R. Jones, Independent Director Robert Doyle, Independent Director Dominic Duffy, COO Mining Engineer with extensive technical and operational management experience Mark Sander, President and CEO 29 years of experience in exploration, strategy and operating improvements 26 Mark Sander, Director Brad Mills, Executive Chairman Amy Freedman, Independent Director
  26. 26. Numbers may differ slightly from source documents due to rounding Mandalay Reserves Cerro Bayo Reserves(1) Ore (t) Ag Grade (g/t) Ag (cont. oz) Au Grade (g/t) Au (cont. oz) Proven Reserves 133,000 195 835,000 1.98 9,000 Probable Reserves 1,903,000 230 14,041,000 2.18 133,000 P&P Reserves 2,036,000 227 14,876,000 2.16 142,000 Costerfield Reserves (2) Ore (t) Sb Grade (%) Sb (cont. t) Au Grade (g/t) Au (cont. oz) Proven Reserves 125,000 4.4 5,500 12.0 48,000 Probable Reserves 366,000 3.7 13,400 8.2 97,000 P&P Reserves 491,000 3.9 18,900 9.2 145,000 1 Source: Cerro Bayo - Roscoe Postle Associates, Effective December 31, 2015, documented in an independent NI 43-101 Technical Report filed March 30, 2016 2 Source: Costerfield - SRK Consulting (Australia), Effective December 31, 2015, documented in an independent NI 43-101 Technical Report to filed March 30, 2016 3 Source: Björkdal – Roscoe Postle Associates, Effective September 30, 2016, documented in an independent NI 43-101 Technical Report filed Jan. 27, 2017 TOTAL RESERVES 31-December-2015 Ag (cont. oz) Au (cont. oz) Sb (cont. t) Mandalay Proven Reserves 835,000 57,000 5.5 Mandalay Probable Reserves 14,041,000 816,000 13.4 Total Mandalay P&P Reserves 14,876,000 873,000 18.9 Björkdal Reserves (3) Ore (t) Au Grade (g/t) Au (cont. oz) Proven - - - Probable 10,778,000 1.69 586,000 Total 10,778,000 1.69 586,000 27
  27. 27. Mandalay Resources Cerro Bayo Resources (1) Resource (t) Ag Grade (g/t) Ag (cont. oz) Au Grade (g/t) Au (cont. oz) Measured Resources 132,000 250 1,065,000 2.46 10,000 Indicated Resources 1,699,000 315 17,211,000 3.16 173,000 M&I Resources 1,832,000 310 18,276,000 3.11 183,000 Inferred Resources 511,000 181 2,984,000 2.32 38,000 Costerfield Resources (2) Resource (t) Sb Grade (%) Sb (cont. t) Au Grade (g/t) Au (cont. oz) Measured Resources 247,000 4.6 11,000 12.1 96,000 Indicated Resources 798,000 3.4 27,000 7.6 194,000 M&I Resources 1,045,000 3.7 38,500 8.6 290,000 Inferred Resources 491,000 2.0 9,700 4.3 68,000 TOTAL RESOURCES Ag (cont. oz) Au (cont. oz) Sb (cont. t) Measured Resources 1,065,000 106,000 11,000 Indicated Resources 47,411,000 1,278,000 27,000 Total M&I Resources 48,476,000 1,384,000 38,000 Total Inferred Resources 9,884,000 318,000 9,700 1 Source: Cerro Bayo - Roscoe Postle Associates, Effective December 31, 2015, documented in an independent NI 43-101 Technical Report filed March 30, 2016 2 Source: Costerfield - SRK Consulting (Australia), Effective December 31, 2015, documented in an independent NI 43-101 Technical Report Filed March 30, 2016 Challacollo Resources (3) Resource (t) Au Grade (g/t) Ag Grade (g/t) Au (cont. oz) Ag (cont. oz) Measured Resources - - - - - Indicated Resources 4,700,000 0.32 200 48,000 30,200,000 M&I Resources 4,700,000 0.32 200 48,000 30,200,000 Inferred Resources 1,600,000 0.31 134 16,000 6,900,000 3 Source: Challacollo – Mining Plus, Effective December 31, 2015, documented in an independent NI 43-101 Technical Report filed Mar. 31, 2015 4 Source: Björkdal – Roscoe Postle Associates, Effective September 30, 2016, documented in an independent NI 43-101 Technical Report filed Jan. 27, 2017 Björkdal Resources (4) Resource (t) Au Grade (g/t) Au (cont. oz) Measured Resources - - - Indicated Resources 11,829,000 2.39 911,000 M&I Resources 11,829,000 2.39 911,000 Inferred Resources 3,564,000 1.71 196,000 28

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