Corporate Presentation February 2020 Disclaimer This presentation - - PowerPoint PPT Presentation

corporate presentation february 2020 disclaimer
SMART_READER_LITE
LIVE PREVIEW

Corporate Presentation February 2020 Disclaimer This presentation - - PowerPoint PPT Presentation

TSXV & BVL:TK | OTCPK: TKRFF www.tinkaresources.com Corporate Presentation February 2020 Disclaimer This presentation does not constitute or form a part of, and should not be construed as an offer, solicitation or invitation to


slide-1
SLIDE 1

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

Corporate Presentation – February 2020

slide-2
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, 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).

slide-3
SLIDE 3

3

Ayawilca Project: Highlights

Ayawilca

Peru

Ayawilca Zinc-Silver Project

  • Ayawilca has ~7 billion pounds of zinc in resources with silver & lead credits
  • PEA released July 2019 shows a robust UG mine with optimization potential
  • Good infrastructure (power, water, roads) and community relationships

AYAWILCA IS ONE OF FEW MODEST CAPEX BASE METALS PROJECTS READY TO DEVELOP

  • Buenaventura made a strategic investment in Tinka at a substantial premium

to the market price (C$16 million @ C$0.243 for a 19.3% equity stake) in January 2020 2020 Work Program

  • Well funded for next two years - C$23 million cash & no debt (January 2020)
  • Infill & exploration drilling from Q2 2020, fully permitted to drill for next 3 yrs
  • Targeting significant de-risking of higher grade resource zones in 2020
  • Additional permitting underway to extend permit footprint for exploration
  • Project development studies (hydrology, ore sorting studies, etc)
slide-4
SLIDE 4

4

Market Capitalization & Investors (at Jan. 13, 2020)

TSXV & BVL: TK | OTCPK: TKRFF

Shares Issued: 340.7 M Options (priced $0.25 to $0.50) 15.4 M Warrants (priced at $0.45 exp May ‘20) 12.4 M Fully diluted: 369.0 M Market cap @ C$0.18/share: C$68 M Cash (at Jan. 2020): ~C$23 M Enterprise Value @ C$0.18/share: ~C$45 M

Analyst Coverage

Ian Parkinson Kevin MacKenzie George Topping

Major Shareholders

Institutional: Sentient Equity Partners 22% Buenaventura 19% IFC 9% JP Morgan UK 5% CD Fund 5% Other institutions ~5% Total Institutional 65% Management & Insiders 2% Retail & Other 33%

slide-5
SLIDE 5

5

Strategic Investment by Buenaventura

  • Compañia de Minas

Buenaventura acquired a 19.3% strategic equity stake in Tinka in January 2020

  • Buenaventura (NYSE: BVN) is

the largest Peruvian mining company (market cap over US$3 billion) with multiple precious and base metals mining operations in Peru

  • Strong validation of project

and management team

Ayawilca

slide-6
SLIDE 6

Management – Extensive Peru and Zinc Experience

  • Dr. Graham Carman

President & CEO, Director Geologist, 25 years global exploration experience with Rio Tinto, Savage, Pasminco, juniors. PhD on Lihir Island Gold Alvaro Fernandez-Baca VP Exploration, Peru Geologist, 20 years global exploration experience with Gitennes, AQM Copper & Hochschild. Cesar Carbajal HSEC Manager Social management specialist, 15 years experience with Teck, MWH, Peru Ministry of Mines. Mariana Bermudez

  • Corp. Secretary

20 years regulatory compliance services experience. Nick Demare CFO, Director CPA, CA, extensive junior board experience.

6

Management & Board

Independent Directors

Ben McKeown Chairman of the Board. Mining engineer, MBA, 25 years experience in mining, oil & gas, and private equity. Pieter Britz Sentient representative. Professional engineer, MBA, 25 years experience in mineral resources industry and mining investment. Mary Little Geologist with 25 years experience in Latin America, MBA, Founder of Mirasol Resources. Raul Benavides Buenaventura nominee director. Vice President of Business Development at Buenaventura.

slide-7
SLIDE 7

Mineral Rank in World 2018 Latin America 2018 Zinc 2nd 1st Copper 2nd 2nd Tin 4th 1st Lead 3rd 1st Silver 2nd 2nd Gold 6th 1st

7

Ayawilca Project – Central Peru

  • Peru is a 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 2018

slide-8
SLIDE 8

8 Antamina: Largest current copper/zinc mine in Peru Cerro de Pasco: Largest historic silver/zinc mine in Peru

Giant Ore Deposit

Central Peru – Mines & Infrastructure

slide-9
SLIDE 9

9

Tinka – Resource Growth 2015 to 2019

  • 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 Resource Growth 2015 to 2018

Bubble size indicates contained zinc-equivalent pounds (Mlbs)

INFERRED INDICATED

  • Tinka has successfully grown the Ayawilca zinc resource several times since 2015
  • Further potential exists to grow the resource quality, tonnage and grade
slide-10
SLIDE 10

10

Ayawilca - One of the Largest Zinc Resources

1 ZnEq includes all metals. Source: Stifel-GMP, July 2019

slide-11
SLIDE 11

11

Ayawilca Geology & Resources

Ayawilca Focus Area - Plan View with Geology

  • Tinka owns 170 km2 of mining

claims (100%)

  • Three deposits on property:
  • 1. Zinc Zone 2. Tin Zone
  • 3. Colquipucro Silver Zone

Tinka Claim Boundary

Ayawilca Claim Map

slide-12
SLIDE 12

12

Focusing on Thick Zones & High Grade

  • Ayawilca is a “manto”

style carbonate replacement deposit (“CRD”). Mantos are stacked at South and West Ayawilca – greatest thickness and highest grades

  • Drilling continues to

target high-grade resources at shallow depths, with the potential for bulk underground mining

+ +

? Untested at depth

slide-13
SLIDE 13

13

2019 Drill Highlights - South Ayawilca

  • 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

slide-14
SLIDE 14

14

Ayawilca PEA

  • PEA assumed a 5,000 t/d UG operation with ramp access with on-site processing for two concentrates
  • Initial capex of US$262 million and after-tax NPV8% of US$363 million with a 27.1% IRR
  • Opportunities for optimization:

▪ Review of the PEA is underway with an independent consultant group ▪ Evaluating the mining of higher grade zinc zones, especially early in the mine plan, and conducting trade-off studies on lower cost bulk underground mining methods and different production rates

US$363 M US$566 M

(100.0)

  • 100.0

200.0 300.0 400.0 500.0 600.0 700.0 800.0

  • 40%
  • 30%
  • 20%
  • 10%

0% 10% 20% 30% 40%

(US$M) Change in Parameter

Ayawilca PEA after-Tax NPV8% Sensitivity

Zinc selling price Lead selling price Silver selling price Feed grades Initial CAPEX Operating Cost

PEA Base Case Reduced OPEX Higher zinc grade and price 20% grade increase US$453 M 20% lower OPEX

slide-15
SLIDE 15

15

Next Steps: Development and derisking

2020:

  • Exploring other targets on Tinka mining concessions (170 km2) - extensive soil sampling /

prospecting underway

  • Infill and exploration drilling from Q2 2020: 10,000 to 15,000 metres of drilling planned
  • Review of PEA assumptions
  • Permitting for an expanded exploration area

Resource Definition

PEA optimization infill drilling & targeted exploration

Prefeasibility Study & Engineering Feasibility Study & Permitting

Production 2015-2019...

2020

2021? 2022? 2023-24?

slide-16
SLIDE 16

The Life Cycle of a Mineral Discovery

16

Tinka 5-year share price chart

Tinka is here

  • Optimization
  • Infill drilling
  • Permitting
  • Land access

and

  • Exploration

drilling

slide-17
SLIDE 17

Ayawilca Gravity Anomaly – Step-Out Targets

17

Far South: Zinc soil anomaly Fault intersection / anticline similar to South Ayawilca Valley: Fault intersection and anticline similar to South

  • Ayawilca. Repeated Pucara

host to the west is untested Zone 3: Large gravity and magnetic anomalies in thickened Pucara limestone Silver Zone and Feeder Zone?: Extension of 2019 silver discovery, targeting feeders

slide-18
SLIDE 18

18

Colquipucro Silver Oxide Mineral Resources

8,003 metres drilled in 45 holes (2006-2014)

Notes: : Resources estimated by Roscoe Postle Associates Inc. (RPA)

  • f Toronto, Canada (news release of November 26, 2018). Mineral

Resources are reported within a preliminary pit shell and above a cut-off grade of 60 g/t Ag for High Grade Lenses, and 15 g/t Ag for Low Grade Halo. The cut-off grade is based on a price of US$24/oz

  • Ag. Refer to NI 43-101 report dated June 29, 2016 for details of

resource estimates and assumptions.

Class/Zone Tonnage (Mt) Ag (g/t) Ag (Moz) Indicated High Grade Lenses 2.9 112 10.4 Low Grade Halo 4.5 27 3.9 Total Indicated 7.4 60 14.3 Inferred High Grade Lenses 2.2 105 7.5 Low Grade Halo 6.2 28 5.7 Total Inferred 8.5 48 13.2

  • Ayawilca property also hosts a silver oxide resource
  • No economic studies completed to date, but could be a standalone operation at higher silver

prices or an adjunct operation to a zinc mine

slide-19
SLIDE 19
  • Ongoing long-term partnerships with three nearby communities
  • Social engagement and sustainable development programs in place
  • Employment during drill programs (road and drill pad construction) and at camp
  • IFC (World bank) providing support and guidance

19

Community Relations & Environment

slide-20
SLIDE 20

20

Tinka: Outstanding History of Exploration Success

  • Scarcity Value - Ayawilca Zinc Zone has the size & grade in a proven mining belt
  • Full Ownership - 100% ownership of a PEA stage project with after-tax NPV8% of US$363M
  • Low Valuation - Tinka EV of ~US$35 million is less than 10% of project NPV
  • High Grades - Thick & high-grade core at South and West Zones, early pay-back potential
  • Program for 2020 - Continued resource expansion drilling and testing of new targets
  • Well Financed - ~C$23 million in cash, no debt
  • Strategic Partner - Buenaventura, Peru’s largest mining company, owns 19% equity stake
  • Upside Exploration Potential - 170 km2 land position, tin and silver resources also
  • Good Access - strong community relationships & infrastructure (roads, water, power)
slide-21
SLIDE 21

APPENDIX

slide-22
SLIDE 22

22

Zinc Inventories – Declining for Seven Years

  • Zinc prices have declined 42% from 2018 highs due to the trade war between the US and China,

concerns that the zinc market will go into surplus, and now the COVID-19 virus

  • While zinc demand has been impacted by the trade war, the surplus has not eventuated
  • A rebound in China zinc demand or restocking could send zinc prices substantially higher

Start of China-US trade war Zinc inventories continue to decline despite China slowdown COVID-19

slide-23
SLIDE 23

23

Zinc Market Analysis

  • Large predicted increases in zinc mine production have

failed to materialize (e.g., Teck predicted an 800kt increase in mine supply in 2018 – actual growth was 200kt)

  • Zinc mine production in China has lagged expectations due

to declining ore grades and stricter environmental regulations & inspections

  • Lower zinc prices are causing mines with low profit margins

to close, with at least four mines closed in 2019

Zinc prices will need to increase or zinc markets will face a supply crunch in the next few years

slide-24
SLIDE 24
  • 250

500 750 1,000 1,250 1,500 1,750 2,000 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044

Annual Silver Production (koz) Annual Zinc and Lead Production (tonnes)

Annual Metal Production in Concentrates

Zn recovered to Zn concentrate (left) Pb recovered to Pb-Ag concentrate (left) Ag recovered to Pb-Ag concentrate (right)

24

Ayawilca PEA – A Top 5 Peru Zinc Mine

Mining and Resources

  • Underground mine with 5,000 tonne per day flotation plant
  • 38.2 Mt of Resources mined over 21 years
  • US$65/t NSR cut-off (base case for resource was US$55/t cut-off)

Saleable Products

  • Two concentrates
  • Zinc concentrate (50% Zn grade) at 92% recovery
  • Silver-lead concentrate (50% Pb, 88-191 oz/t Ag) at 85% recovery

Operating Cost Description Cost per Tonne Processed Mining – Room & Pillar US$38.06 Mining – Post & Pillar US$35.29 Average Mining Cost US36.66 Processing US$6.44 G&A US$5.48 Total Opex US$48.58

  • Average LOM head grades of 6.1% Zn, 18 g/t Ag, 0.2% Pb
slide-25
SLIDE 25

25

2019 Ayawilca PEA Highlights (in US dollars)

Robust Economics :

  • 5,000t/day underground zinc mine with

21 year mine life, room & pillar + post- pillar mining

  • Modest initial capex of $262M
  • Pre-tax NPV8% = $609M with 37.2% IRR
  • After-tax NPV8% = $363M with 27.1% IRR
  • Payback period of 2.3 years pre-tax and

3.5 years after-tax

  • Average annual production of 101 kt zinc

and 0.9 Moz silver

  • Total cash flows of $1,611M pre-tax and

$1,051M after-tax

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

  • $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

slide-26
SLIDE 26

26

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

  • ~68,000 metres drilled in Zinc Zone from 2012 to 2018
  • 1.8 billion pounds of zinc in Indicated category (24% of total)
  • 5.6 billion pounds of zinc in Inferred category (76% of total)
  • Highest grades at South and West Ayawilca

Category/Area Tonnage (Mt) ZnEq (%) Zn (%) Pb (%) In (g/t) Ag (g/t) Zn (Mlb) Pb (Mlb) In (t) Ag (Moz) Indicated South 3.9 9.1 7.6 0.09 108 16 652 8 422 2.0 West 7.8 7.7 6.5 0.20 72 15 1,126 35 561 3.9 Total Indicated 11.7 8.1 6.9 0.16 84 15 1,778 42 983 5.8 Inferred South 10.2 9.6 7.9 0.27 103 30 1,764 61 1,047 9.9 West 5.0 7.1 6.4 0.27 34 17 699 30 170 2.8 East 11.3 5.9 5.0 0.18 56 14 1,238 44 633 5.0 Central 18.6 5.6 4.6 0.23 62 12 1,884 95 1,153 7.5 Total Inferred 45.0 6.7 5.6 0.23 67 17 5,585 230 3,003 25.2

Notes:

  • CIM definitions were followed for Mineral Resources.
  • Mineral Resources are reported above a cut-off NSR value
  • f US$55 per tonne.
  • The 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]

  • The ZnEq value was calculated using the following formula:

ZnEq = NSR/US$15.34

  • 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

  • r 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.

slide-27
SLIDE 27

27

Ayawilca Zinc Zone Cut-off Sensitivity

Zinc Zone Indicated Mineral Resources

NSR US$/t Cut-off Tonnage (Mt) ZnEq (%) Zn (%) Pb (%) Ag (g/t) In (g/t) 40 13.6 7.4 6.3 0.16 15 75 50 12.4 7.9 6.7 0.17 15 80 55

(Base Case)

11.7 8.1 6.9 0.16 15 84 60 10.8 8.5 7.2 0.16 16 89 70 9.4 9.2 7.7 0.15 16 99 80 7.9 10.0 8.4 0.15 17 111 NSR US$/t Cut-off Tonnage (Mt) ZnEq (%) Zn (%) Pb (%) Ag (g/t) In (g/t) 40 52.7 6.2 5.2 0.24 17 60 50 48.1 6.5 5.4 0.24 17 64 55

(Base Case)

45.0 6.7 5.6 0.23 17 67 60 41.5 7.0 5.8 0.23 18 70 70 33.9 7.6 6.4 0.22 18 78 80 26.9 8.3 6.9 0.22 20 86

Zinc Zone Inferred Mineral Resources

See resource table for notes and ZnEq calculations

  • Base case resources calculated at US$55/tonne cut-off)
  • PEA was prepared using US$65/t cut-off to focus on higher grade resources
  • Geotechnical studies to be conducted to determine if bulk underground mining methods could be

used, which would allow a higher throughput operation extracting more of the resources

slide-28
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