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Mandalay Resources Investor Presentation November 2018

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Mandalay Resources Investor Presentation November 2018

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Mandalay Resources Investor Presentation November 2018

  1. 1. NOV 2018 TSX:MND POSITIONING MANDALAY FORARENEWED FUTURE
  2. 2. 2 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 29, 2018 and in its short form base shelf prospectus dated February 12, 2018, 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 Mandalay’s properties 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 Mandalay’s properties, and supervises the collection and interpretation of scientific and technical information contained in this presentation. Dominic Duffy, President and CEO of Mandalay, has visited 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
  3. 3. The Mandalay Portfolio Today 3 Well-run, producing assets with exploration upside • Björkdal focused on higher-margin ounces • Costerfield self-funding to grow P&P Reserves and bring Youle vein into operation Björkdal: Breakthrough Asset • 2018E production: 45-48 koz gold • 2018E cash costs: $1,020-1,190/oz • Current mine life: 10 years Chilean Properties • Cerro Bayo (production suspended) • Currently in permitting for restart • Challacollo • Feasibility-stage project • Non-binding LOI signed with Aftermath Silver for total consideration of C$11,625,000 Costerfield: Strong Upside • 2018E production (AuEq): 34-38 koz • 2018E cash costs: $920-$1,000/oz • Current mine life: 4 years • Significant high-grade Youle discovery • Excellent high-grade exploration potential (ON CARE AND MAINTENANCE, CURRENTLY PERMITTING RESTART)
  4. 4. • Stable production from current assets, strong cost management and budget control expected to result in growing positive cash flow from operations Key Objectives for 2018 4 Position MND for Future Growth • Increase Company-wide cash flow • Restructure more streamlined Corporate department • Strengthen cost discipline across all operations • Begin development to high-grade Youle vein Grow Reserves & Mine Life • Continue drilling high-grade Youle vein as potential next production area o Aim to add Youle to Reserves in 2018 Resource and Reserve update • Build on continuing exploration success at Björkdal, with focus on high-grade areas Deliver Strong Results • Maximize value of non-core assets and mitigate financial risks: • Lupin (C$5.3 million released to the Company in Q3 2018), • La Quebrada • Explore options: • Challacollo (LOI signed), • Cerro Bayo Maximize Value of Portfolio
  5. 5. 2018 Operational Guidance 5 Björkdal Costerfield Consolidated Oz Au Eq., ‘000* 45-58 34-38 79-86 Cash cost, $/oz Au Eq** 1,020-1,190 920-1,000 1,060-1,100 All-in Cost, $/oz Au Eq** 1,320-1,390 1,400-1,480 1,450-1,510 CAPEX, $/million** 23-24 24-25 47-49 *2018E Au Eq assumes full-year 2018 metal prices: Au $1,267/oz and Sb $8,386/t **CAPEX includes exploration at Björkdal and Costerfield, consolidated cost guidance includes $5-6 million/yr expected for Corporate G&A Gold 66,000 – 71,000 oz Antimony 2,100 – 2,300 t Total Gold Equivalent 79,000 – 86,000 oz AIC Per oz Gold Equivalent $1,450 – $1,510
  6. 6. 6 Costerfield: Dependable Performance with Major Upside Land package 1,293 hectares Ownership 100% P&P Reserves(1) 622,000 t @ 6.1 g/t Au; 2.8% Sb for 122,000 oz Au and 17,200 t Sb 2017 Production 52,137 oz Au Eq. (31,512 oz Au, 3,115 t Sb) 2018E Production 34,000 – 38,000 oz Au Eq. (21,000 – 23,000 oz Au, 2,100 – 2,300 t Sb) • Opening up new possibilities with high-grade Youle discovery • Accelerating development to Youle • Increased focus and spending on exploration at Costerfield due to extremely high- grade potential (1) Source: SRK Consulting (Australia), Effective December 31, 2017, documented in an independent NI 43-101 Technical Report filed March 29, 2018
  7. 7. 7 Emerging Youle Vein  Youle vein lies approximately 800 m north of Brunswick Lode  Drill intercepts on Youle have demonstrated continuity of high-grade along strike and down dip  Infill and extension drilling to continue for remainder of 2018  Expected to add Youle to YE 2018 Reserves and Resources  Development to Youle vein initiated Q3, 2018  Company focusing on extending Youle mineralization to the south to fast-track production MND mining 2009-2018
  8. 8. 8 Youle Long Section  Currently known mineralized shoot o Approx. 600 m strike o Approx. 200 m dip  High-grade continuous core defined by multiple intercepts o Multiple intercepts over 50 g/t AuEq over 1.8 m minimum mining width Hole True Width (m) Gold (g/t) Sb (%) AuEq (g/t) over min. 1.8 m mining width BC047 1.4 152.0 18.1 142.7 BC036W1 1.65 93.9 31.1 136.4 BC032 0.66 338.8 14.4 133.1 BC021A 0.58 272.1 13.3 94.7 BC011 3.5 14.7 10.9 65.9 Youle drilling highlights
  9. 9. 9 The Next Youle: Exciting District Potential at Costerfield KN ‐ King Cobra North Indicators: Radiometric, Faulting BR ‐ Browns Robins Indicators: Faulting, Major  Historic Workings  MD ‐ Mac Donald's Reef Indicators: Radiometric, Faulting,  Historic Workings, (Youle extension) DC ‐ Damper Creek Indicators: Radiometric, Historic Workings, Alluvial gold  TB ‐ True Blue Indicators: Radiometric, Historic Workings,  Alluvial gold KN ‐ King Cobra North Indicators: Radiometric, Faulting KN ‐ King Cobra North Indicators: Radiometric, Faulting BR ‐ Browns Robins Indicators: Faulting, Major  Historic Workings  BR ‐ Browns Robins Indicators: Faulting, Major  Historic Workings  MD ‐ Mac Donald's Reef Indicators: Radiometric, Faulting,  Historic Workings, (Youle extension) MD ‐ Mac Donald's Reef Indicators: Radiometric, Faulting,  Historic Workings, (Youle extension) DC ‐ Damper Creek Indicators: Radiometric, Historic Workings, Alluvial gold  DC ‐ Damper Creek Indicators: Radiometric, Historic Workings, Alluvial gold  TB ‐ True Blue Indicators: Radiometric, Historic Workings,  Alluvial gold TB ‐ True Blue Indicators: Radiometric, Historic Workings,  Alluvial gold Focus of Mining and  Exploration since 1970s Focus of Mining and  Exploration since 1970s
  10. 10. 10 Björkdal: Self-Generating Anchor Asset Land package 12,949 hectares Ownership 100% P&P Reserves(1) 11,403,000 t @ 1.60 g/t Au for 587,000 oz 2017 Production 62,028 oz Au @ $816/oz 2018E Production 45,000 – 48,000 oz Au (1) Source: Roscoe Postle Associates, Effective December 31, 2017, documented in an independent NI 43-101 Technical Report filed March 29, 2018 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 2015 2016 2017 2018E GoldProduction(ounces) Björkdal Gold Production
  11. 11. Björkdal Growth Plans 11 3:INCREASEDPLANTCAPACITY Potential for plant throughput upgrade from 1.3 mt/yr up to 1.7 mt/yr following granting of new environmental permit 4:LOWERCOSTS Cost reduction across the entire operation 1:OPERATIONALEXPLORATIONFOCUS Focus exploration on higher-grade and wider mining areas for greater profitability 2:STRONGEROPERATIONALCASHFLOW Greater focus on underground ounces which generate larger margins than open pit mining, leading to improved cash flow to fund growth and reinvestment
  12. 12. Björkdal Exploration Strategy Paying Off New discovery of Aurora Zone provides the potential to mine high-tonnage and higher-grades at lower costs 12  Aurora Zone significantly wider and consistently higher-grade than current mill feed  250 m horizontally  150 m vertically  Mineralization open in all directions  Aurora Zone readily accessible, two levels currently being developed Hole True Width (m) Gold (g/t) DOD2018-123 11.46 4.97 DOD2018-062 8.64 7.1 MU8-037 4.29 9.21 DOD2018-169 4.9 9.04 MU8-041 2.63 (diluted to 3m) 10.97
  13. 13. 13 Cerro Bayo Silver-Gold Mine Land package 23,106 hectares Ownership 100% P&P Reserves(1) 856,000 t @ 284 g/t Ag; 2.34 g/t Au 2016 Production 13,792 oz Au, 1,731,031 oz Ag (1) Source: Current Mineral Reserves number depleted for 2017 production and Reserves sterilized by inundation at Delia NW. Depletion taken from Reserve position contained in NI 43-101 Technical Report prepared by Roscoe Postle Associates, Effective December 31, 2016 filed on SEDAR March 31, 2017  Operations remain on Care and Maintenance  Permitting ongoing for restart of operations  Mandalay considering all alternatives to maximize value of asset
  14. 14. 14 Challacollo Silver-Gold Project  August 2018: Signed non-binding LOI with Aftermath Silver for sale of Challacollo Project for total consideration of C$11,625,000  Aftermath Silver’s management team has significant industry experience and complementary skillsets that Mandalay believes are necessary to create additional value for a development project such as Challacollo Land package 20,378 hectares Ownership 100% Location 130 km SE of Iquique, Northern Chile Indicated Resource 4.7 MM t @ 200 g/t Ag for 30 MM oz Ag Elevation Approx. 1,500 ASL
  15. 15. Adjusting the Portfolio in 2018 15  Realizing value from non-core assets  Ulu, Nunavut: Option agreement signed; received both payments • Norrliden: Exploring alternatives for sale • Lupin, Nunavut – Undergoing reclamation with submission of final closure plan  C$5.3 million cash reduction in Reclamation Deposit released to MND in Q3 • Additional Reclamation Deposit reductions available • La Quebrada, Chile – Active process ongoing  Exploring options for development/restart assets  Challacollo • Executed non-binding LOI for sale of asset for total consideration of C$11,625,000 • Cerro Bayo
  16. 16. 1. Exercise Price: C$0.60 – C$1.13 expiry dates ranging from Mar 18, 2018 – Jun 30, 2025 2. Market Capitalization converted to US$ using exchange rate of 1 CAD = 0.76 USD (Nov. 7, 2018) 3. Cash and Cash Equivalents and Interest-Bearing Debt as at end of Q3-2018 (Sept 30, 2018) 16 Strong Balance Sheet as of September 30, 2018 Millions (Except Share Price Info) Share price (Nov. 7, 2018 - close) (C$) $0.075/shr Shares Outstanding 451.6 Stock Options(1) 20.7 RSUs 1.9 Fully Diluted Shares Outstanding 474.2 Market Capitalization (C$) $33.9 Cash and Cash Equivalents (US$)(3) $26.7 Total Interest-Bearing Debt (US$)(3) $61.9 Total Enterprise Value (US$)(2,3) $60.9 US$10 million undrawn on US$40 million credit facility as at end-Q3 2018US$10 million undrawn on US$40 million credit facility as at end-Q3 2018 Mandalay is fully funded to execute its capital plans and growth
  17. 17. 17 Major Shareholders(1) Holders Shares (Million) Shares (Percentage) GMT Capital 73.1 AzValor 60.8 Ruffer LLP 59.8 CI Cambridge 39.1 Sentry Investments 28.5 Large Holders (Top-5) 261.3 Other Holders 190.3 TOTAL 451.6 16.2% 13.5% 13.2% 8.7% 6.3% 42.1% Strong Sponsorship and Broader Ownership Over Time Volume 30-day Average Daily Volume 432,963 100-day Average Daily Volume 575,232 Average Daily Volume across all trading platforms (as of August 7, 2018) 1. Known ownership positions are estimates - as at Oct 24, 2018 – Ownerships and percentages rounded to one decimal place.  Management and directors collectively own or control 30.5 million shares (6.6% of the shares issued and outstanding)
  18. 18. TSX:MND 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 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
  19. 19. 19 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

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