CORPORATE PRE SE NTATION www.candelariamining.com January 2017 - - PowerPoint PPT Presentation

1 MINING 2016

CORPORATE PRE SE NTATION January 2017

TSXV : CAND www.candelariamining.com

CAUTIONARY STATE ME NT

Forw ard- Looking Statem ents: This presentation contains forward-looking information about Candelaria within the meaning of the Securities Act (British Columbia). Forward-looking statements relate to future events or future performance and reflect Candelaria’s expectations regarding the future growth, results of operations, business prospects and opportunities

• f Candelaria. These statements reflect Candelaria’s current internal projections, expectations or beliefs and are based on information currently available to Candelaria. I n some cases

forward-looking information can be identified by terminology such as “may”, “will”, “should”, “expect”, “intend”, “plan”, “anticipate”, “believe”, “estimate”, “projects”, “potential”, “scheduled”, “forecast”, “budget” or the negative of those terms or other comparable terminology. Many of these assumptions are based on factors and events that are not within the control of Candelaria and there is no assurance they will prove to be correct. Forward-looking statements are subject to a variety of known and unknown risks, uncertainties and other factors that could cause actual events or results to materially differ from those reflected in the forward-looking statements, and are developed based on assumptions about such risks, uncertainties and other factors including, without limitation: fluctuations in precious and base metal prices; inherent hazards and risks associated with mining operations; inherent uncertainties associated with mineral exploration and development activities; uncertainties inherent in the estimation of mineral reserves and/ or resources and precious metal recoveries; uncertainties related to actual capital costs, operating costs and expenditures, production schedules and economic returns from Candelaria’s projects; uncertainties related to current global financial conditions; uncertainties related to the availability of future financing necessary to undertake exploration, development, mining and processing activities on Candelaria’s properties; risks related to the integration of businesses and assets acquired by Candelaria; uncertainties related to the competitiveness of the mining industry; risks associated with Candelaria being subject to government regulation, including changes in law and regulation; risks associated with Candelaria’s need for governmental licenses and permits; risks associated with Candelaria being subject to extensive environmental laws and regulations, including a change in regulation; risks that Candelaria’s title to its property could be challenged; political and country risk; risk of water shortages and risks associated with competition for water; Candelaria’s need to attract and retain qualified personnel; increases in off-site transportation and concentrate processing costs; risks related to the need for reclamation activities on Candelaria’s properties, including the nature of reclamation required and uncertainty of costs estimates related thereto; risks associated with potential conflicts of interest; risks associated with potential labour disputes; and risks associated with potential blockades of mining operations as well as “Risks and Uncertainties” included in the Annual I nformation Form and MD&A for Candelaria available at www.sedar.com. Forward- looking information is not a guarantee of future performance and actual results and future events could differ materially from those discussed in the forward-looking information. All of the forward-looking information contained in this presentation is qualified by these cautionary statements. Although Candelaria believes that the forward-looking information contained in this presentation is based on reasonable assumptions, readers cannot be assured that actual results will be consistent with such statements. Accordingly, readers are cautioned against placing undue reliance on forward-looking information. Candelaria expressly disclaims any intention or obligation to update or revise any forward-looking information contained in this presentation, whether as a result of new information, events or otherwise, except in accordance with applicable securities laws. The information contained herein does not constitute an offer of securities for sale in the United States and securities may not be offered or sold in the United States absent registration or exemption from registration. Prelim inary Econom ic Assessm ent: The PEA, which is available on SEDAR at www.SEDAR.com, is entitled Preliminary Economic Assessment Caballo Blanco Gold Heap Leach, Veracruz, Mexico, with a re-issue date of October 31, 2016 and an effective date of May 7, 2012. The PEA is preliminary in nature and should not be considered to be a pre-feasibility study or feasibility study, as the economics and technical viability of the Project have not been demonstrated at this time. The PEA remains a preliminary analysis that is not sufficient to enable Mineral Resources to be categorized as Mineral Reserves. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. There is no certainty that all or any part of the mineral resource will be converted into Mineral Reserves. Furthermore, there is no certainty that the results of the PEA will be realized. Cautionary note to U.S. investors concerning m easured, indicated or inferred resources: We advise U.S. investors that while the terms “measured resources”, “indicated resources” and “inferred resources” are recognized and required by Canadian regulations, the U.S. Securities and Exchange Commission does not recognize these terms and these terms do not comply with SEC Guide 7 requirements. Investors are cautioned not to assume that any part or all of the material in these categories will be converted into reserves. It should not be assumed that any part of an inferred mineral resource will ever be upgraded to a higher category. Qualified Person: Stephen Maynard, Certified Professional Geologist, a consultant to Candelaria and a Qualified Person under NI 43-101, has approved the content of this presentation.

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INTRO/ BACKGROUND

INTRODUCTION BACKGROUND

March 2016 Candelaria was formed via a reverse take-

• ver of 60% of Minera Apolo S.A de C.V (“Apolo”).

Apolo holds a portfolio of 5 m ining projects including the gold & silver Pinos District and the polymetallic CRD deposit KM66. July 2016 Candelaria acquired Caballo Blanco from Timmins Gold (NYSE:TGD). Indicated Resource: 575,000 ozAu.

(28.89 million tonnes @ 0.62 g/t Au & 2.32 g/t Ag)

Inferred Resource: 419,000 oz Au. (24.02

million tonnes @ 0.54 g/t Au & 2.50 g/t Ag)

Advancing Caballo Blanco to a prefeasibility study and completing a mine plan for Pinos District. Focused on achieving an annual gold production of 100,000+ oz by 2019.* Permitting & developing two projects. Veracruz, Mex: Advanced-stage Caballo Blanco open- pit, heap leach

• gold. Zacatecas, Mex: Pinos District underground

epitherm al gold and silver. Mining and finance management team w ith a specialization in mining throughout Mexico.

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Note 1: There are no known mineral reserves on any of Candelaria’s mineral properties and as a result the economic viability of the properties has not been demonstrated. There are risks associated with our ability to achieve production including those risks described on Page 2. Note 2: Mineral resources that are not mineral reserves do not have demonstrated economic viability.

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PROJE CTLOCATIONS

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Pinos District – Zacatecas, Mexico KM6 6 – Durango, Mexico

Pinos KM66 Caballo Blanco

Caballo Blanco –Veracruz,Mexico Advanced stage open-pit, heap leach gold project with estimated annual production of ~100,000 oz Au. Excellent location within Mexican Carbonate Replacem ent Deposit (CRD) belt with 40% of Mexican silver production (Major low cost mines of Minera Frisco, Peñoles, Grupo México and Goldcorp). High-grade historic gold district; advanced-stage underground epitherm al vein system.

CABALLO BLANCO

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CABALLO BLANCO – PROJE CTOVE RVIE W

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Strong OperationalPotential*

• Located 65km NW of Veracruz, Mexico. Paved

roads with power and water on-site.

• Skilled labor force from neighboring communities.

Excellent I nfrastructure Candelaria Value-add

• Simple open pit/ heap leach operation
• Currently undergoing environmental permitting process, having already filed an

Environmental I mpact Statement.

• Low projected initial capex of $85m.
• Projected annual average LOM production of over 90,000 oz Au is foundation for
• mid-tier production profile.
• 18,000+ ha land package provides significant exploration upside in underexplored region.
• Exceptional permitting, construction and
• perational experience.
• Com m itm ent to CSR and strong com m unity

relations.

kilometers

500 Unit ed States Central Am erica Gulf of Mexico

Veracruz Puebla

Cardel

Xalapa

kilometers 40

Veracruz

Gulf of Mexico Mexico City

Caballo Blanco Property 18,000+ Has

* There are no known mineral reserves on any of Candelaria’s mineral properties and as a result the economic viability of the properties has not been demonstrated. There are risks associated with our ability to achieve production including those risks described on Page 2.

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CABALLO BLANCO – MINE RALRE SOURCE S

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Deposit Characteristics Resources delineated based on 145 diam ond drill holes in the La Paila zone. Oxidized, high-sulphidation epithermal gold mineralization

• ccurring within extensive areas of clay and silica alteration.

Caballo Blanco Mineral Resources(0.2 g/t Au Cut-off) (0.2 g/t Cut-off) Gold(Au) Silver(Ag) Tonnes (M) Grade (g/t) Contained Ounces (M) Grade (g/t) Contained Ounces (M) I ndicated 28.9 0.62 0.58 2.32 2.15 I nferred 24.0 0.54 0.42 2.50 1.930 Caballo Blanco Mineral Resources(0.3 g/t Au Cut-off) (0.3 g/t Cut-off) Gold(Au) Silver(Ag) Tonnes (M) Grade (g/t) Contained Ounces (M) Grade (g/t) Contained Ounces (M) I ndicated 25.7 0.67 0.55 2.33 1.93 I nferred 21.9 0.55 0.40 2.55 1.80

Mineralization is very fine and occurs with a vuggy and brecciated silica alteration. Straightforward and proven metallurgical processes. Extensive exploration upside potential with similar anomalies to La Paila located within 3km wide m agnetic high ring structure.

Note 1: Caballo Blanco Preliminary Economic Assessment prepared by SGS, with an Effective date of May 7, 2012. Note 2: Mineral Resources that are not mineral reserves to not have demonstrated economic viability.

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CABALLO BLANCO - SIMPLEPROCE SS

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Coveying, Stacking Leach Pad Preg Po nd Barren Pond Carbon St ripping Carbon in Colum n Recovery Plant Doré

Caballo Blanco Simplified Flow sheet Caballo Blanco Site Overview

Straightforw ard heap-leach and CI L process expected

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CABALLO BLANCO – PE A OVE RVIE W

8 Lifeof Mine (Years) 7.5 Initial CapitalCost (US$M) $84.8 Cash OperatingCost (US$/oz) $784.0 Total MaterialMined (Mt) 131.3 LOM StripRatio (Ratio) 1.66 :1 Metallurgical Recovery (Au / Ag) (%) 81% / 37% Total Gold Mined to Leach Pad (oz Au) 849,005 Total RecoveredGold (oz Au) 687,694 Total Silver Mined to Leach Pad (oz Ag) 3,605,546 Total RecoveredSilver (oz Ag) 1,334,052

PEA annual production target of over 95,000 ounces of gold w ith initial capital cost of $84.8 million

Sensitivity Analysis Gold Price (USD) $1,150 $1,300 $1,400 $1,500 $1,600 $1,700 Pre-Tax NPV (5%) ($M) 93.9 180.0 231.9 283.8 335.7 387.6 Pre-Tax IRR(%) 30.0 47.7 57.3 66.4 75.2 83.7 Post-Tax IRR(%) Payback Period (Years) 3.3 2.0 1.7 1.5 1.4 1.3 Note 1: PEA Overview has been derived from the Caballo Blanco Preliminary Economic Assessment prepared by SGS using an effective date of May 7, 2012. The PEA uses a two-stage crushing scenario. Note 2: There are no known mineral reserves on any of Candelaria’s mineral properties and as a result the economic viability of the properties has not been demonstrated. Note 3: All costs and projected economics are in static 2012 US dollars.

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CABALLO BLANCO – ROBUST PROJE CTE CONOMICS

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40% $550 $450 $350 $250 100% 90% Gold 80% Price ($/oz) 70% Capital 60% Cost ($M) 50% Gold Price ($/oz) Capital Cost ($M) $150 Cash Cash Cost ($/oz) 30% Cost ($/oz) $50 20% (20.0%) (10.0%) Base +10.0% + 20.0% (20.0% ) (10.0% ) Base +10.0% + 20.0%

% Δ (20.0% ) ( 1 0 .0 % ) Base +10.0% +20.0% % Δ ( 2 0 .0 % ) (10.0% ) Base +10.0% +20.0% Gold Price($/oz) $1,200 $1,350 $1,500 $1,650 $1,800 Gold Price($/oz) $1,200 $1,350 $1,500 $1,650 $1,800 NPV ($M) $128.2 $206.0 $283.8 $361.6 $439.4 IRR(%) 37.5% 52.6% 66.4% 79.5% 92.2% Cash Cost ($/oz) $627.2 $705.6 $784.0 $862.4 $940.8 Cash Cost ($/oz) $627.2 $705.6 $784.0 $862.4 $940.8 NPV ($M) $369.5 $323.6 $283.8 $244.0 $204.1 IRR(%) 79.1% 72.8% 66.4% 59.7% 52.8% Capital Cost ($M) $67.8 $76.3 $84.8 $93.3 $101.8 Capital Cost ($M) $67.8 $76.3 $84.8 $93.3 $101.8 NPV ($M) $307.9 $295.9 $283.8 $271.7 $259.7 IRR(%) 84.4% 74.5% 66.4% 59.7% 53.9% Pre-Tax Net Present Value Sensitivities ($M) Pre-Tax I nternal Rate of Return Sensitivities (% )

Note 1: Based on the Caballo Blanco Preliminary Economic Assessment prepared by SGS using an effective date of May 7, 2012. Note 2: There are no known mineral reserves on any of Candelaria’s mineral properties and as a result the economic viability of the properties has not been demonstrated. Note 3: All costs and projected economics are in static 2012 US dollars.

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CABALLO BLANCO – PE RMITTINGIN PROGRE SS

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Previously held permits:

Pe Permit Status Date e E xpec ected Com

• mment

ents

Exploration Perm it I n Progress Feb-1 7 Previously Held to develop drift for bulk sam pling Unidad de Manejo Am biental ( UMA) I n Progress August-1 7 Perm it to grow Cycads and

• ther at risk species in our

nursery granted ( 2 0 1 1 ) Explosives Perm it I n Progress August-1 7 Granted by SEDENA Apr- 1 1 , self-suspended W ater Concession Granted n/ a Granted Apr 2 0 1 4 MI A & ER2 ( EI S & Level 2 Risk Assessm ent) I n Progress August-1 7 Environm ental Perm it ETJ ( Land Use Change) for m ining operations I n Progress May-1 7 Land Use Change

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CABALLO BLANCO - GE OLOGY

11 Prior Activity Geological Mapping Geochemistry Geophysics Drilling Colum n Testing Comments 128 km2 of reconnaissance, and detailed mapping. 16,000 stream sediment, soil and rock samples. 322 km of IP surveying, 1,240 km of m agnetic surveying. 60,000+ m of total drilling, 52,000+ m of which is DDH. 65 Colum n tests performed from 6” –40” dia.

• High sulphidation, fully oxidized epitherm al

gold zones.

• Andesite host rock w ith very fine Au

contained in 4 different ore types:

• Vuggy silica
• Massive Silica
• Polylithic Breccia
• Monolithic Breccia
• La Paila Zone located on a large m agnetic

high ring structure that m easures approx. 3 km in diam eter.

• At least four other large induced

polarization ( I P) resistivity high anom alies, w ith sim ilar silica alteration to La Paila, have been identified on the property.

• The La Paila Zone currently rem ains open

to the south, southw est and northeast.

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CABALLO BLANCO – E XPLORATION UPSIDEPOTE NTIAL

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• La Paila Zone w as

discovered using I P Resistivity overlapping w ith argillic alteration and geochem ical anom alies.

• The sam e studies used to

discover La Paila have helped identify at least 7 new targets in close proxim ity to La Paila that dem onstrate very sim ilar exploration characteristics.

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CABALLO BLANCO - NE XTSTE PS

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Near-Term Objective – Pre-feasibility Study

• Optim ize existing PEA through trade off

studies:

• Fine crushing vs. recovery
• Agglomeration
• Condemnation drilling
• Trucking vs. conveying
• I n-fill and definition drilling w ithin the

current resources and exploration drilling at:

• Northern Zone
• La Paila
• + 7 additional zones that have been identified

via geochemical anomalies

Next Steps – Developing

Objective: Caballo Blanco in production by 2019*

• Finalize a m inim um investm ent of $ 1 2

m illion

• Securing perm itting in 2 0 1 7
• MIA (Environmental Impact Statement) (SEMARNAT).
• ETJ (Change of Land Use) (SEMARNAT).
• Concluding rem aining surface rights by

March 2 0 1 7

• All private landowners
• No Ejido

*There are no known mineral reserves on any of Candelaria’s mineral properties and as a result the economic viability of the properties has not been demonstrated. There are risks associated with our ability to achieve production including those risks described on Page 2.

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CABALLO BLANCO - NURSE RY

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Collection and Growing of local plants under UMA for: February 2013 May 2014

• 1local plant species (Cycads [ Dioon edule] ), 1,759 plants.
• Local Reforestation Plan.
• Rehabilitation Plan.
• Erosion Control Plan.
• 20 local plant species growing in Nursery.
• Donation to ITUG of 19 different species, 7,695 plants.

MINING2017

CABALLO BLANCO - FLORA TRANSPLANTATIONPLAN

15 Selection ofspecimens destinedfor rescuing Seed germ ination and collection Caring for small plants Sowing specimens into designated sites Specim en com plete extraction Relocation site preparation Specim en relocation to new site Adult specimen relocation Sow ing

PINOS DISTRICT

• Acquisition Cost – earned-in to 60% by spending USD$3.5m.
• Large Property - 22 concessions comprising 3,516 hectares in eastern

Zacatecas state, Mexico.

• Location – 67 km from San Luis Potosi. Paved road to entry of mine.
• Geology – Low-sulphidation epithermal Au and Ag mineralization
• ccurs within strongly folded and locally overturned Cretaceous

sedimentary rocks. Veins follow multiple primary structures related to compressional and extensional phases associated with the early Creataceous Laramide orogeny.

• Historic Production – 33 shafts located throughout district accessing

veins varying from less than 1m to over 10 m in width (avg. 1.2 - 1.5 m true horizontal width).

• High Ore Grades – Average historic grades of over 5 g/t Au and 60

g/t Ag.

• Waste Dumps at Surface – Approx 85k tonnes (* historic, non-

compliant) grading 1.6 g/t Au and 80 g/t Ag.

• Metallurgy – Historic test recoveries demonstrate + 90% Au recovery

via dynamic cyanide leaching.

• Low Capex – Historic estimate ~ USD$10 million
• Estimated Production – within 1 year of construction financing

*Candelaria has not verified and is not relying on historical data

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PINOS DISTRICT

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CANDE LARIA’S PROJE CT PIPE LINE

18 KM66 Guadalcazar Lucifer El Gato The Kilometre 66 property consists of 17 concessions comprising 3,508 hectares situated in eastern Durango state, Mexico. Apolo acquired the property in 1995, and optioned it to Coeur d'Alene Mines in late 1996. Between 1997 and 1998, Coeur d'Alene carried out a comprehensive exploration program including regional as well as detailed geological mapping, 397 metres of trenching, a gravity survey, 81 reverse circulation drill holes (7,515 metres), 22 diam ond drill holes (2,983 metres) and 422 surface channel samples. The early-stage Guadalcazar property consists of 10 concessions comprising 2,671.09 hectares situated in central San Luis Potosi state, Mexico. During the period 2003 to 2005, Apolo registered the property with the Mexico Mines Bureau following the discovery of gold, silver and tin mineralization in altered and extensively weathered rhyolite tuffs. The early-stage Lucifer property consists of four concessions comprising 159.29 hectares situated in the northeast part of Durango state,

• Mexico. The claims were registered by Apolo with the Mexico Mines Bureau in 1998. Historical exploration has reportedly identified lead, zinc,

silver, and lesser amounts of gold and copper mineralization of the carbonate replacement type. The early-stage El Gato property consists of two concessions comprising 696.96 hectares situated in eastern Zacatecas state, Mexico. The claims were registered with the Mexico Mines Bureau in 1997 and 2002. Mineralization is reportedly of the volcanogenic massive sulphide (VMS) type, related to felsic volcanic dom e complexes.

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CAPITALSTRUCTURE

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Capital Structure As of January 23,2017

($CAD)

Current Price $0.75 Shares Outstanding (Basic) 86.9m Market Capitalization $65.2m Warrants @ $0.75 10.3m Options 5.9m Convertible Debt $0.65m @0.18, $3.3m @0.45 Cash $2m

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BOARD, MANAGE ME NT & ADVISORS

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Non-Executive Directors

Javier Reyes – Entrepreneur who founded and ran several Mexican financial services firms. Currently manages and is Founder of Credipresto, S.A. de C.V. ENR. Javier M ont año CPA - CEO of com pany that owns chain of retail stores in Mexico and South Am erica. Director of organizations supporting econom ic developm ent across Mexico and other growth m arkets. M anuel Gom ez CFA - Portfolio m anager and MBA-level finance

• professor. Previously with Bank of Am erica, JPMorgan Chase, UBS and

Credit Suisse.

Management

Ram on Perez MBA - Interim CEO/ Director Form er VP and co-m anager of Carrelton Horizon Natural Resrouce Fund. Previously Senior Analyst in the Latin Am erican division of Salom on Sm ith Barney Asset Managem ent. Sokhie Puar - President & Director Over 25 yrs corporate finance, corporate development and capital markets experience. Director of public and private companies, as well as non-profits. Sam W ong CA. - CFO Former controller at Luna Gold, oversaw the transition to commercial production. Currently CFO of Chesapeake Gold & Lowell Copper. Arm ando Alexandri M.Eng.,MBA - COO Mining engineer, over 30 yrs experience in mining and metallurgical design. Former COO for Dia Bras and I mpact Silver. Hector Felix Gonzalez Ram irez – VP Exploration Senior Geologist with over 15 yrs experience. Previously Dia Bras Exploration senior mine geologist, MAG Silver project geologist and Minaurum Gold chief geologist.

Advisors

Donald McLeroy PhD– Over 50 yrs experience in exploration, development, production, administration and mineral transactions, mostly in Mexico. University professor of Geology and Mineral Economics. Keith Piggot - Mining engineer with over 30 yrs experience developing m ining proj ects and technologies worldwide, including Mexico where he advanced 2 gold m ines to production. Lon Shaver CFA- Over 19 yrs experience as a m ining investm ent banker with Raym ond Jam es and Merrill Lynch, CFO of a public m ining com pany, and a m ining equity analyst.

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COMPARABLE GOLD PROJE CTS

Total resource EV/ Total resource Market capitalisation Enterprise value 1,723.4 981.5 547.5 402.8 203.7 90.4 54.9 25.3 19.3 Pretium Guyana Lundin Gold Roxgold Lydian Golden Queen Candelaria West Kirkland Silverbull USDm 1,843.8 935.6 549.2 431.1 73.1 68.7 51.6 25.1 17.6 Pretium Guyana Lundin Gold Roxgold Golden Queen Lydian Candelaria West Kirkland Silverbull USDm 259.4 78.7 56.8 49.3 34.9 21.6 18.2 8.7 3.5 Roxgold Guyana Lundin Gold Candelaria Pretium Golden Queen West Kirkland Lydian Silverbull USD/Au. eq. 52.8 11.9 9.7 7.9 5.0 3.4 1.7 1.4 1.0 Pretium Guyana Lundin Gold Lydian Silverbull Golden Queen Roxgold West Kirkland Candelaria Mlbs Au eq.

Note: as of Oct 30, 2016

Candelaria Mining Corp. TSXV: CAND www.candelariamining.com Suite 1502, 1166 Alberni Street Vancouver, BC V6E 3Z3 Canada For I nquiries Please email: rperez@candelariamining.com

APPE NDIX

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CABALLO BLANCO – CONCE PTUAL PIT

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0.1 to 0.3 0.3 to 0.6 0.6 to 1.0 > 1.0

Au g/t Pit Limits

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CABALLO BLANCO – Section 2,184,200N

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CABALLO BLANCO – Section 2,184,300N

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CABALLO BLANCO – Section 2,184,400N

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CABALLO BLANCO – Section 2,184,500N

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