Ag Zn 107.87 65.38 Corporate Presentation June 2020 Disclaimer - - PowerPoint PPT Presentation

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Ag Zn 107.87 65.38 Corporate Presentation June 2020 Disclaimer - - PowerPoint PPT Presentation

TSXV & BVL:TK | OTCPK: TKRFF www.tinkaresources.com 47 SILVER 30 ZINC Ag Zn 107.87 65.38 Corporate Presentation June 2020 Disclaimer This presentation does not constitute or form a part of, and should not be construed as an offer,


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SLIDE 1

Corporate Presentation – June 2020

TSXV & BVL:TK | OTCPK: TKRFF www.tinkaresources.com

30 ZINC

Zn

65.38 47 SILVER

Ag

107.87

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SLIDE 2

2

Disclaimer

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. Readers are cautioned that the PEA is preliminary in nature, it includes inferred mineral 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 there is no certainty that the PEA results will be realized. Mineral resources that are not mineral reserves do not have demonstrated economic viability. Additional work is needed to upgrade these mineral resources to mineral reserves. Certain information in this presentation contains forward-looking statements and 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, challenges resulting from COVID-19, 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, delays in or failure to obtain the necessary permits, drilling program results varying from expectations, timing of geological reports, the Company’s ability to realize the results of the PEA, 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. 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 presentation have been estimated by Mrs. Dorota El Rassi, P.Eng., an employees of Roscoe Postle Associates Inc. (RPA). Mrs. El Rassi is a Qualified Person as defined under the meaning of Canadian National Instrument 43-101 (“NI 43-101”) and independent of Tinka. Mr. William Colquhoun, Principal Metallurgical Consultant with Amec Foster Wheeler (Perú) S.A., a Wood company, a Qualified Person as defined in NI 43-101 and independent of Tinka, is responsible for the PEA results contained in this presentation. Ms Stella Searston, RM SME, a Principal Geologist Associate with Amec Foster Wheeler E&C Services, a Wood company, a Qualified Person as defined in NI 43-101 and independent of Tinka, is also responsible for the PEA results contained in this presentation. Mr. Edwin Peralta, P.E., a Senior Engineer with Wood Mining and Metals USA, a Qualified Person under NI 43-101 and independent of Tinka, is also responsible for the results of the

  • PEA. Mr Adam Johnston, CP (Metallurgy) of Transmin Metallurgical Consultants, a Qualified Person as defined in NI 43-101 and independent of Tinka, is responsible for

the metallurgical and recovery inputs contained in this presentation. Dr. Graham Carman, CEO and a Director of Tinka, and a Qualified Person as defined in NI 43-101, is responsible for other technical information in this presentation (information not directly related to the Mineral Resource Estimate or the PEA).

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SLIDE 3
  • Size and grade: One of the largest

undeveloped zinc-silver resources in a junior

  • Pro-mining jurisdiction: Located in central

Peru - a mining belt with good infrastructure

  • Strong fundamentals: PEA in 2019 showed

strong economics with a modest CAPEX, and

  • pportunities to optimize further
  • Great exploration potential:
  • Strong balance sheet: ~C$22.5m cash

(Mar/2020) following strategic investment by Buenaventura in Jan. 2020, no debt

  • Low enterprise value considering size of

resources and drilling investment (>70,000 m

  • f drilling since 2015)

3

Tinka’s Competitive Advantage

  • Inf. 2015; 2,258
  • Inf. 2016; 3,385
  • Inf. 2017; 6,873
  • Ind. 2018; 2,149
  • Inf. 2018; 6,738

10 20 30 40 50 60 2014 2015 2016 2017 2018 2019

Resources (Mt)

Ayawilca Zinc Zone Resource Growth 2015 to 2018

Bubble size indicates contained zinc-equivalent pounds (Mlbs)

INFERRED INDICATED

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SLIDE 4

4

Leverage to Zinc and Silver

  • Zinc dominant (90% by value) with

associated silver (stream financing potential) and minor lead

  • Mineralization is 100% sulphide (no
  • xides) with excellent recovery to

concentrate (92%)

  • Sandstone-hosted silver oxide

deposit at surface on the Ayawilca property

  • Potential for low cost open pit

mining and leaching

Ayawilca Zinc Zone Colqui Silver Zone

30 ZINC

Zn

65.38 47 SILVER

Ag

107.87

Indicated: 1.8 billion pounds zinc Inferred: 5.6 billion pounds zinc Indicated: 5.8 million ounces silver Inferred: 25.2 million ounces silver Indicated: 14.3 million ounces silver Inferred: 13.2 million ounces silver

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SLIDE 5

Ayawilca is a Large Deposit and Still Open…

4 km

1x 1x

COLQUI SILVER ZONE WEST AYAWILCA ZINC ZONE SOUTH AYAWILCA ZINC ZONE

SOUTH NORTH FAR SOUTH AREA metres

  • Ayawilca is a district-scale Zn-Ag-Pb (Sn-Cu) limestone replacement deposit with at least 4 km strike
  • Zinc Zone resources only drilled to 400 m depth, significant potential down-dip and down-plunge
  • Far South area: New target identified in 2020, extensive Zn-Pb soil anomaly
  • Longitudinal section along the Colquipucro Fault – mineralized trend has 4km strike (see below)

500 m

Ayawilca Zinc Zone (PEA 2019) Colqui Silver Zone Untested Down plunge

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SLIDE 6

6

Ayawilca Zinc Zone Resources

(Base Case Nov. 2018 @ $55 NSR cut-off)

  • Highest grades at South and West zones, which

are also the thickest parts of the deposit and account for 47% of the total resources

Category/Area Tonnage (Mt) Zn (%) Pb (%) Ag (g/t) Contained Metal Zn (Mlb) Pb (Mlb) Ag (Moz) Indicated South 3.9 7.6 0.09 16 652 8 2.0 West 7.8 6.5 0.20 15 1,126 35 3.9 Total Indicated 11.7 6.9 0.16 15 1,778 42 5.8 Inferred South 10.2 7.9 0.27 30 1,764 61 9.9 West 5.0 6.4 0.27 17 699 30 2.8 East 11.3 5.0 0.18 14 1,238 44 5.0 Central 18.6 4.6 0.23 12 1,884 95 7.5 Total Inferred 45.0 5.6 0.23 17 5,585 230 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 (~3.6% ZnEq).
  • 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]

  • 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.

7.82% 6.46% 5.00% 4.60%

Zinc Grade by Zone

South West East Central

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SLIDE 7

ANALYST COVERAGE Ian Parkinson Kevin MacKenzie George Topping

7

Strong Balance Sheet & Investors

MAJOR SHAREHOLDERS Institutional: Sentient Equity Partners 22% Buenaventura 19% IFC 9% JPMorgan UK 5% CD Fund 5% Other institutions ~5% Total institutional 65% Management & insiders 2% Retail & other 33% CAPITALIZATION Millions Shares issued 341 Options (priced at $0.25 to $0.50) 15 Fully diluted shares 356 Market capitalization (at C$0.19/share) C$65 Cash (at Mar. 31, 2020) C$22 Debt nil Enterprise value C$43

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SLIDE 8

Management – Extensive Peru and Zinc Experience

  • Dr. Graham Carman

President & CEO, Director

Geologist, Highly experienced in Peru (Rio Tinto, Savage, Pasminco); PhD in geology (80Moz Lihir Au). Alvaro Fernandez-Baca

VP Exploration & GM

Well respected Peru geologist, 20 years in global exploration (Gitennes, AQM Copper, Hochschild). Luis Romero

HSEC Manager

Social management specialist, 20 years experience (Hudbay, Minsur, Rio Tinto, Peru LNG). Mariana Bermudez

Corporate Secretary

20 years regulatory compliance services experience in Canada. Nick Demare

CFO, Director

CPA, CA, extensive junior board experience.

8

Experienced Management & Board

Independent Directors

Ben McKeown

Chairman of the Board

Mining engineer, MBA, Independent director, 25 years in mining, oil & gas, private equity. Pieter Britz

Director

Professional engineer, MBA, Sentient representative; 25 years in resources and private equity investment. Mary Little

Director

Geologist and Independent director, highly experienced in Latin America, MBA; Founder of Mirasol, director at Sandstorm Gold. Raul Benavides

Director

Mining Engineer; VP Business Development for Buenaventura and son of founder.

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SLIDE 9

9

Why Zinc?

  • Zinc demand will continue to grow because zinc

is an essential metal: ▪ Galvanizing steel increases its life and durability in construction and transport ▪ Zinc is also essential for manufacturing, human health, crop growth, and has battery potential

  • More zinc supply is required in the next few

years to avoid major deficits: ▪ Zinc inventories are very low with stockpiles having been drawn down since 2013 ▪ Low zinc prices, declining mine grades, a lack of exploration, and stricter environmental regulations will lead to higher prices and a need for new zinc mines in the near future

Zinc price LME inventory

westmetall.com

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SLIDE 10

10

Zinc Market Poised for Supply Deficits

  • At current zinc prices, ~25% of production is not sustainable and several high cost zinc mines

have recently ceased operations

  • China mine supply is high cost, has declining grades, and has stricter environmental regulations
  • Citi estimates 800,000 tonnes of mine supply is at risk in 2H 2020, or 6% of the annual (13 Mtpa)

zinc market

AISC, USD / lb Zn

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SLIDE 11

11

COVID-19 Accelerating Zinc Supply Deficits

  • In April 2020, 7 of the world’s top 15 zinc

mines were closed due to COVID-19

  • Mine production growth in 2020 now

forecast to decline with cuts over 400 kt (Teck)

  • New zinc projects and mine expansions are

being delayed due to low zinc prices and COVID-19

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SLIDE 12

12

Zinc Outperforming Copper

  • The price of zinc has been in an uptrend for the

past 15 years and has outperformed copper

  • Zinc mines are typically smaller and higher grade

than copper mines, resulting in lower initial capex

  • Zinc demand is expected to continue to grow due

to galvanization of steel (~60% of demand)

  • Zinc inventories remain at critically low levels
  • Zinc also has promising potential for large, safe

energy storage in batteries, the need for which will grow as power generation shifts from fossil fuels to renewable sources

$- $0.20 $0.40 $0.60 $0.80 $1.00 $1.20 $1.40 $1.60 $1.80 $2.00 May-05 Jan-06 Sep-06 May-07 Jan-08 Sep-08 May-09 Jan-10 Sep-10 May-11 Jan-12 Sep-12 May-13 Jan-14 Sep-14 May-15 Jan-16 Sep-16 May-17 Jan-18 Sep-18 May-19 Jan-20

USD per Pound

Zinc 15-year Price Chart

$- $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 $3.50 $4.00 $4.50 $5.00 May-05 Jan-06 Sep-06 May-07 Jan-08 Sep-08 May-09 Jan-10 Sep-10 May-11 Jan-12 Sep-12 May-13 Jan-14 Sep-14 May-15 Jan-16 Sep-16 May-17 Jan-18 Sep-18 May-19 Jan-20

USD per Pound

Copper 15-year Price Chart

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SLIDE 13

Mineral Rank in World 2019 Latin America 2019 Zinc 2nd 1st Copper 2nd 2nd Tin 4th 1st Lead 3rd 1st Silver 2nd 2nd Gold 7th 1st

13

Peru – A Top Mining Jurisdiction

  • Top 2 global producer of zinc, copper and silver
  • Pro-mining country – mining accounts for over

50% of exports

Ayawilca Project

Las Bambas

Antamina

Central Peru zinc belt

CHILE BOLIVIA BRAZIL ECUADOR

San Rafael

Source: USGS 2019

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SLIDE 14

14

Central Peru – Mines & Infrastructure

  • Ayawilca is located in the

base metal mining district of central Peru, a major strategic advantage

  • Public road access, with two

major roads to ports

  • Twin 220 kV power lines to

Antamina, the largest mine in Peru, cross the property

  • Skilled workforce nearby due

to multiple mines in the area

  • Buenaventura has two mines
  • perating near the project
  • NEXA operates a zinc smelter

near Lima, ~200km away

Giant ore deposit Buenaventura mine

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SLIDE 15

1940´s 2005 2009 2011 2012 2013 2015 2017 2018 2019 2020 Pre-Tinka

  • Co. Minera

Colquipucro (“Olla de plata”) Tinka Project Staking Silver Zone Colquipucro Exploration Zinc Discovery Ayawilca Zinc Zone First Zinc Resource Ayawilca First Zinc Resource Estimation New Discovery South Ayawilca Discovery & Resource update Resource Update Ayawilca 7.3 Billion lbs Zn Tinka – PEA Capex US$262M NPV8% US$363M IRR 27.1% ~75,000 metres drilled for zinc & silver

Ayawilca Project – History

BVN investment 19.3% equity stake

15

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SLIDE 16

6.0% 5.2% 6.1% 4.1% 6.8% 5.5% 12.0% 4.5% 8.0% 5.2% 10.3% 5.6% 0% 2% 4% 6% 8% 10% 12% 14% 1,000 2,000 3,000 4,000 5,000 6,000

Yauli - Volcan San Gregorio - Brocal Ayawilca - Tinka Hilarion - Nexa Chungar - Volcan Shalipayco - Nexa Florida Canyon - Nexa El Porvenir - Nexa Romina - Volcan Atacocha - Nexa San Vicente - Simsa Santander - Trevali

Zinc + Lead Grade Contained Zinc (kt)

Peru Zinc Projects - Sorted by Contained Zinc

Producing Mine Exploration PEA Stage

16

Peru – Zinc Project Pipeline

  • Ayawilca is one of the most attractive zinc development projects in Peru, and compares well

against producing mines in size and grade

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SLIDE 17

17

Ayawilca PEA highlights (2019)

  • Underground mine with 5,000 tpd flotation

plant producing zinc and lead concentrates

  • 38.2 Mt of Resources mined over 21 years
  • Average annual production of 101 kt zinc and

0.9 Moz silver

  • Modest initial capex of US$262 million and

robust economics with massive leverage to zinc

  • $2,000
  • $1,500
  • $1,000
  • $500

$0 $500 $1,000 $1,500 $2,000

  • $200
  • $150
  • $100
  • $50

$0 $50 $100 $150 $200 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 Cumulative Cash Flows (US$ millions) Annual Cash Flows (US$ millions)

After-tax cash flow Pre-tax cash flow Cumulative after-tax cash flow Cumulative pre-tax cash flow

PEA metal prices: $1.20/lb Zn, $0.95/lb Pb, and $18/oz Ag

PEA Economics Pre-tax Post-tax NPV (8%) US$609M US$363M IRR 37.2% 27.1% Payback period 2.3 yrs 3.5 yrs LOM cash flow US$1,611M US$1,051M

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SLIDE 18

18

2020 Work Program and Next Steps

Resource Definition

Resource drilling and optimization (2nd half 2020)

Prefeasibility Study & Engineering Feasibility Study & Permitting

Production

  • Continue trade-off studies to optimize PEA assumptions (e.g. review of different underground

mining methods, mining throughput rates, cut-off grades, etc.)

  • Drilling is expected to commence in August 2020 with at least 7,000 metres planned to infill high

grade zinc – silver areas and to test new targets along the Colquipucro Fault

  • Prior to commencement of drilling, health protocols will be approved by government authorities

to ensure the safety of our employees, families and communities

  • New permitting to expand the exploration area in order to drill test new targets in 2021

Zinc & Silver exploration

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SLIDE 19

19

Ayawilca: Outstanding Exploration Upside

Drill targets 2020-2021

FAR SOUTH

  • More drilling planned along Colquipucro Fault -

mineralization is known to extend for at least 4km

  • Drill permitted area to be expanded in 2020/21 to

allow testing of additional targets (e.g. Far South)

Not yet drilled Not yet drilled

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SLIDE 20

metros meters

A’ A

20

Ayawilca – 2020 Drill targets

  • Drill targets down-dip of resources at

South, West, and Colqui

  • All three areas planned to be drilled in 2020

Colqui silver resource (oxide)

1x 1x 1x 1x

Sulphide target at depth Planned drill hole

Central Ayawilca South Ayawilca Zinc Zone (Sulphide)

2020 Planned Drill Hole

meters

B’ B

Planned drill hole

Geology legend Zinc block model values

Silver block model values Target at depth

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SLIDE 21
  • Tinka is strongly committed to the health & safety of its employees, families, and communities
  • The Company has developed strong health protocols to minimise COVID-19 infections
  • Long-term partnerships developed with the communities near Ayawilca
  • Social engagement and sustainable development programs in place, and ongoing
  • Significant employment during drill programs (road and drill pad construction) and at camp
  • IFC providing support and guidance to Tinka, as a shareholder of the Company

21

Community Relations & Environment

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SLIDE 22

22

Tinka: Summary

  • Scarcity Value - Ayawilca Zinc Zone has size & grade in a proven mining belt
  • Strong Management Team - experienced and successful track record in Peru
  • Full Ownership - 100% ownership of a PEA stage project with after-tax NPV8% of US$363M
  • Low Valuation - Tinka EV of ~US$32 million is less than 10% of Ayawilca project NPV
  • High Zinc Grades - Massive leverage to zinc prices, plus significant exposure to silver
  • Potential for expansion & discovery - Continued resource drilling for zinc and silver in 2020
  • Well Financed - ~C$22 million in cash, no debt
  • Strategic Partner - Buenaventura, Peru’s largest mining company, owns 19% equity stake
  • Good Access - Strong community relationships & infrastructure (roads, water, power)
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SLIDE 23

APPENDIX

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SLIDE 24

24

Ayawilca Project: Regional overview

170 km2 mining claims (100% TK) in the middle

  • f the central Peru base metal belt
  • Only 3 km of prospective geology has been drill

tested to date, resulting in three separate mineral resource estimates:

  • 1. Ayawilca Zinc Zone – carbonate replacement

deposit with epithermal Zn-Ag-Pb vein

  • verprinting

Indicated: 11.9 Mt @ 6.9% Zn, 15g/t Ag, 0.2% Pb Inferred: 45.0 Mt @ 5.6% Zn, 17g/t Ag, 0.2% Pb

  • 2. Colquipucro Silver Zone – sandstone hosted

silver oxide deposit

Indicated: 7.4 Mt @ 60g/t Ag Inferred: 8.5 Mt @ 48g/t Ag

3. Ayawilca Tin Zone – 14.5 Mt @ 0.70% Sn

  • Multiple untested targets lie along strike

Ayawilca Claim Map

Property Boundary

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SLIDE 25

25

Ayawilca – District-Scale Potential

Rock samples to 19% Pb, 9% Zn, and 500 g/t Ag (not yet drill permitted)

  • Airborne magnetics flown on property in 2016

show a 2.5 km RTP mag anomaly broadly coincident with current resources

  • Colquipucro Fault appears to be an important

control for mineralization

  • Multiple untested targets based on magnetics

and soil sampling

East Zone 3 West

Airborne Magnetics - RTP

Valley Yanapizgo Central 500 m. South Colquipucro Far South

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SLIDE 26

26

Ayawilca – Comparisons with Cerro de Pasco

  • Cerro de Pasco: 175 Mt @ 7% Zn, 2% Pb, 30oz/t Ag mined in central Peru (Baumgartner et al, 2008)
  • Comparisons with Ayawilca include: similar limestone, sulphide mineralogy, anticline, big faults
  • Both deposits are carbonate replacement deposits (CRDs)

+ +

UNTESTED at depth

(after Rottier et al, 2016)

Cerro de Pasco (same scale)

Phyllite Limestone

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SLIDE 27

27

Drill Highlights - South area

  • Grades in 2019 drill holes were

well above the average grade of Zinc Zone resource ▪ Hole A19-165: 9.0 m @ 11.9% zinc and 25.9 m @11.8% zinc and 28.7 m @ 14.0% zinc and 14.9 m @ 12.3% zinc ▪ Hole A19-163: 5.7m grading 32.6% zinc at edge of resource

  • Discovery of Lower Silver Zone

▪ Hole A19-163: 13.9 m @ 128 g/t silver ▪ Hole A19-167: 7.3 m @366 g/t silver with 4.9% zinc and 7.9 m @ 150 g/t silver with 6.1% zinc

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SLIDE 28

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

28

Tinka Resources Limited