TSXV & BVL:TK | OTCPK: TKRFF www.tinkaresources.com
Corporate Presentation January 2019 Disclaimer This presentation - - PowerPoint PPT Presentation
Corporate Presentation January 2019 Disclaimer This presentation - - PowerPoint PPT Presentation
TSXV & BVL:TK | OTCPK: TKRFF www.tinkaresources.com Corporate Presentation January 2019 Disclaimer This presentation is not directed to, or intended for distribution to or use by, any person or entity that is a citizen or resident or
This presentation is not directed to, or intended for distribution to or use by, any person or entity that is a citizen or resident or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation or which would require any registration or licensing within such jurisdiction. This presentation does not constitute or form a part
- f, 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. Certain information in this presentation contains forward-looking statements and forward-looking 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, drilling program results varying from expectations, delays in obtaining survey results, success of future development initiatives, the completion and implementation of a preliminary economic assessment, pre-feasibility or feasibility studies, competition, operating performance, environmental and safety risks, delays in obtaining or failure to obtain necessary permits and 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. Although Tinka believes that assumptions inherent in the forward-looking statements are reasonable, 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 company presentation have been estimated by Mrs. Dorota El Rassi, P.Eng., and Mr. David Ross, P.Geo., both employees of RPA and independent of Tinka. The Zinc/Tin Mineral Resources were publicly released on November 26, 2018, while the Silver Resources were released on Feb 26, 2015. By virtue of their education and relevant experience, Mrs. El Rassi and Mr. David Ross are "Qualified Persons" for the purpose of National Instrument 43-101. The Mineral Resources have been classified in accordance with CIM Definition Standards for Mineral Resources and Mineral Reserves (May, 2014). Readers are encouraged to read the Company’s technical report in their entirety. This presentation has been prepared, reviewed and verified by Dr. Graham Carman, Tinka’s President and CEO and a Fellow of the Australasian Institute of Mining and Metallurgy, a qualified person as defined by NI 43-101.
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Disclaimer
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Company Highlights
Ayawilca
Peru
Tinka owns 100% of the Ayawilca project – one of largest zinc resources not owned by a producer & located in a top mining district
Zinc deposit discovered by Tinka & grown rapidly Mineral Resources at Nov. 26, 2018 (following 20,000 m drilling):
- Zinc Zone –11.7 Mt Indicated @ 8.1% zinc equivalent (ZnEq)* &
45.0 Mt Inferred @ 6.7% zinc equivalent
- Tin Zone
– 14.5 Mt Inferred @ 0.70% tin equivalent (SnEq)* Additional potential for resource growth and new discoveries Maiden PEA underway with results anticipated first half 2019 Highly experienced team of mine finders with Peru expertise Strong institutional investor base Solid balance sheet with C$14M cash and no debt (Sep. 30/18)
* See resource tables for calculation of ZnEq and SnEq
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Zinc Resource Base Case (Nov. 2018 @ $55 NSR cut-off)
Based on ~20,000 metres of 2018 drilling (~68,000 metres since 2011-2012) 1.8 billion pounds of zinc in Indicated category (24% of total) 5.6 billion pounds in Inferred category (76% of total) Best grades at South Ayawilca 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 West 7.8 7.7 6.5 0.20 72 15 1,126 35 561 3.9 South 3.9 9.1 7.6 0.09 108 16 652 8 422 2.0 Total Indicated 11.7 8.1 6.9 0.16 84 15 1,778 42 983 5.8 Inferred West 5.0 7.1 6.4 0.27 34 17 699 30 170 2.8 Central 18.6 5.6 4.6 0.23 62 12 1,884 95 1,153 7.5 East 11.3 5.9 5.0 0.18 56 14 1,238 44 633 5.0 South 10.2 9.6 7.9 0.27 103 30 1,764 61 1,047 9.9 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$15.34
- Numbers may not add due to rounding.
- “Inferred Mineral Resources” have a great amount of
uncertainty as to their existence, and as to their economic and legal feasibility. It is reasonably expected that the majority of Inferred Mineral Resources could be upgraded to Indicated Mineral Resources with continued exploration. United States investors are cautioned not to assume that all
- r any part of Measured or Indicated Mineral Resources will
ever be converted into Mineral Reserves. United States investors are also cautioned not to assume that all or any part of an Inferred Mineral Resource exists, or is economically or legally mineable.
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Ayawilca Zinc Zone Sensitivity (Nov. 2018)
Zinc Zone Indicated Mineral Resources
NSR US$/t Cut-off Tonnage (Mt) ZnEq (%) Zn (%) Pb (%) In (g/t) Ag (g/t) 40 13.6 7.4 6.3 0.16 75 15 50 12.4 7.9 6.7 0.17 80 15 55
(Base Case)
11.7 8.1 6.9 0.16 84 15 60 10.8 8.5 7.2 0.16 89 16 70 9.4 9.2 7.7 0.15 99 16 80 7.9 10.0 8.4 0.15 111 17 NSR US$/t Cut-off Tonnage (Mt) ZnEq (%) Zn (%) Pb (%) In (g/t) Ag (g/t) 40 52.7 6.2 5.2 0.24 60 17 50 48.1 6.5 5.4 0.24 64 17 55
(Base Case)
45.0 6.7 5.6 0.23 67 17 60 41.5 7.0 5.8 0.23 70 18 70 33.9 7.6 6.4 0.22 78 18 80 26.9 8.3 6.9 0.22 86 20
Zinc Zone Inferred Mineral Resources
See resource table for notes and ZnEq calculations
Zinc Zone has high grade zones likely to be targeted for early extraction At an $80/t cut-off, the Zinc Zone resource contains 7.9 Mt Indicated at 10.0% ZnEq and 26.9 Mt Inferred at 8.3% ZnEq
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Ayawilca Resource Growth Continues
500 m
Decade of low zinc prices resulted in a lack of exploration / discoveries Few quality projects (zinc, copper, tin) located in lower risk jurisdictions Ayawilca is well positioned to be the next large zinc development project
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Notes:
- Data from company websites,
believed to be accurate
- ZnEq based on spot metal prices
- n Nov. 22, 2018
- Global resources include
Measured & Indicated and Inferred resources. Vazante and Cerro Lindo data only reflects Reserves.
Scarcity of Large Development Zinc Projects
Fireweed-Tom&Jason NEXA-Aripuana Zinc X-Akie Rathdowney-Olza Trevali-Caribou Vendetta-Pegmont Trevali-Santander Foran-McIlvenna Bay NEXA-Vazante NEXA-Cerro Lindo NEXA-Shalipayco Tinka-Ayawilca2018 Tinka-Ayawilca2018+Tin
- 2.0
4.0 6.0 8.0 10.0 12.0 14.0
- 10
20 30 40 50 60 70 80 90
Global Resource/Reserve (Billons of pounds of Zinc Equivalent) Global Resource Size (Mt)
Zinc Equivalent Resource Size for Selected TSX/TSXV Companies
Producing mine Development project Ayawilca project - Zn Ayawilca project - Zn+Sn
Teck considers giant zinc deposit to be > 6Mt Zn+Pb Ayawilca is currently 3.5Mt Zn+Pb and 4.8Mt ZnEq (including tin), with the potential to grow through continued exploration
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Teck Scatter Plot of Zinc Projects
Ayawilca – Zn +Pb only Ayawilca – ZnEq including tin
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Market Capitalization
TSXV & BVL: TK | OTCPK: TKRFF
Shares Issued: 264.6 M Options 12.0 M Warrants (12.4M @ $0.45 + 16.9M @$0.75) 29.3 M Fully diluted: 306.4 M Market cap @ C$0.35/share: C$93 M Cash (Sep. 2018): ~C$13 M Analyst Coverage
Ian Parkinson Kevin MacKenzie George Topping
Major Shareholders
Institutional: The Sentient Group 25% IFC (World Bank) 12% JPMorgan UK 7% Other institutions ~10% Total institutional 54% Management & insiders 2% Retail/other 44%
Strong fundamentals due to mine shutdowns and lack of new development Few new discoveries in the past decade Zinc inventories have declined to10-year lows Zinc price ~ $1.16/lb (52- week range: $1.04 - $1.64) Average zinc mine grades FALLING (Reuters): 4.3% Zn in 2017 6.8% Zn in 2000
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Why Zinc?
Zinc Inventories: 2011 to 2018
Source: Scotiabank
Zinc used in construction and automotive industries for galvanizing (steel protection) Emerging zinc-air battery technology could increase demand 2018 zinc consumption forecast 13.7 million tonnes of refined zinc metal: Production of 13.4 million tonnes = in deficit ~ 300,000 t Steady demand growth
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Zinc – Uses and Markets
Galvanizing 50% Zinc Alloying 17% Brass and Bronze 17% Zinc Semi- Manufactures 6% Chemicals 6% Other 4%
Source: International Lead and Zinc Study Group (ILZSG)
Zinc End Uses
Management – Extensive Peru and Zinc Experience with Past Successes
Dr Graham Carman President & CEO, Director Geologist, 25 years global exploration experience with Rio Tinto, Savage, Pasminco, juniors Alvaro Fernandez- Baca VP Exploration, Peru Geologist, 20 years global exploration experience with Gitennes, AQM Copper & Hochschild. Ken Engquist Manager Project Development Engineer, 25 years project development experience with Arizona Mining, Nevsun, Rio Tinto, Oxygen Cap. Javier Escudero HSEC Manager, Peru Health, Safety, Environment, Community & Permits – Ex Goldfields, Rio Tinto, Antamina. Mariana Bermudez
- Corp. Secretary
20 years regulatory compliance services experience. Nick Demare CFO, Director CPA, CA, extensive junior board experience.
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Management & Board
Independent Directors
Ben McKeown Chairman of the Board. Mining engineer, MBA, with 25 years experience in mining,
- il & gas, and private equity.
Pieter Britz Sentient Group representative. Professional engineer with over 20 years’ experience as a mining professional and as a mining investment professional. Mary Little Founder of Mirasol Resources, geologist, MBA, 20 years in Latin America.
Mineral Rank in World 2016 Latin America 2016 Zinc 2nd 1st Copper 3rd 2nd Tin 6th 2nd Lead 4th 1st Silver 2nd 2nd Gold 6th 1st
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Peru – A Mining Country
Pro-mining country – mining accounts for over 50% of exports Peru is a top 3 global producer of zinc, copper, and silver
Ayawilca Project
Las Bambas
Antamina
Central Peru zinc belt
CHILE BOLIVIA BRAZIL ECUADOR
San Rafael
Source: US Geological Survey
14 Antamina: Largest current copper/zinc mine in Peru Cerro de Pasco: Largest historic silver/zinc mine in Peru
Giant Ore Deposit
Central Peru – Infrastructure
Ayawilca
Tinka owns 170 km2 of mining claims (100%) Good infrastructure - power, roads, water
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Ayawilca Geology & Mineralization
Ayawilca Plan View with Geology
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Ayawilca Long Section
Ayawilca Long Section A-A’
Repetition of thrust faults provides potential for additional mineralization beneath current resource
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2018 Mineral Resource Upgrade
Cross Section B-B’ Cross Section C-C’
- 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
West Ayawilca and South Ayawilca zones contain thickest and highest grade zinc mineralization 2018 – Substantial portion of South and West Ayawilca in Indicated resource category
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High Grade: 10 metres @ 44% Zinc
Massive (90%) sphalerite, other sulphides (10%) Hole A18-129 - 10 metres @ 44% Zinc Sphalerite Feeder veins in phyllite Hole A18-132 - 7 metres @ 20% Zinc
HG zinc encountered at Ayawilca in “repeated” limestone and feeder veins
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Tin Resources Nov. 2018
Ayawilca contains a substantial tin resource – believed to be the largest tin resource in Peru outside of Minsur’s San Rafael project Tin is currently trading at US$8.95/lb, approximately 7.7x the value of zinc Tin is primarily used in tin plated steel, chemicals, solder, and alloys, but with increasing use in high tech and electric vehicles
Ayawilca Tin Zone Inferred Mineral Resources NSR US$/t Cut-off Tonnage (Mt) SnEq (%) Sn (%) Cu (%) Ag (g/t) 40 17.1 0.65 0.57 0.20 18 50 15.9 0.67 0.60 0.20 18 55
(Base Case)
14.5 0.70 0.63 0.21 18 60 12.5 0.76 0.68 0.22 17 70 10.1 0.84 0.76 0.23 18 80 8.3 0.92 0.84 0.25 19
Notes:
- CIM definitions were followed for Mineral Resources.
- Mineral Resources are reported above a cut-off grade of US$55 per tonne NSR value.
- The NSR grade 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$9.00/lb Sn, US$2.85/lb Cu, and US$15/oz Ag. Metal recovery assumptions were: 86% Sn, 75% Cu, and 60% Ag. The NSR value for each block was calculated using the following NSR factors: US$155.21 per % Sn, US$37.59 per % Cu, and US$0.22 per gram Ag.
- The NSR value was calculated using the following formula:
US$NSR = [Sn(%)*US$155.21+Cu(%)*US$37.59+Ag(g/t)*US$0.22
- The ZnEq value was calculated using the following formula: SnEq = NSR/US$155.21
- 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.
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Ayawilca PEA and Exploration in 2019
Zinc Metallurgical Testing
Sphalerite has high indium credits Positive initial results – very high recoveries and con grade of 51% achieved PEA-level met testing is ongoing
Preliminary Economic Assessment (PEA)
Engaged Wood plc (formerly Amec Foster Wheeler) as lead engineering firm Ken Engquist managing PEA for Tinka Previously project development for Arizona Mining (Hermosa) and Nevsun (Timok) Results of PEA expected by mid 2019
Exploration Program for 2019
Further exploration drilling planned for Q2-Q3 2019 (+10,000 m) to expand resources & test new targets
Ongoing partnerships with three communities – employment and training Social engagement and sustainable development programs, fostering long- term relationships In 2018, Tinka employed up to 100 locals for building drill platforms & roads
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Community & Environment
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Catalysts and Valuation
Maiden PEA 1H 2019 – initial estimate of economics and production Exploration upside – additional drilling planned for 2019 Scarcity value – few quality development projects in the zinc pipeline Low valuation – Tinka valued at US$0.007 per ZnEq lb (2018 resource) – Arizona Mining: bought for US$0.055 per ZnEq lb in June 2018
$0.007/lb ZnEq $0.055/lb ZnEq
$- $0.010 $0.020 $0.030 $0.040 $0.050 $0.060 $0.070
Enterprise Value per ZnEq resource lb (bubble size = Enterprise Value)
- ZnEq based on spot prices
- Tinka value excludes tin resources
Potential Uplift
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Why Tinka?
Ayawilca is one of the largest discoveries in Peru in last 20 years Massive zinc leverage – 2018 resource contains1.8 billion pounds Zn Indicated plus 5.6 billion pounds Zn Inferred Multi-commodity exposure – zinc, tin, indium, silver PEA results by mid 2019; Drilling Q2-Q3 2019 Well positioned to be next large zinc development project Upside – trading at less than 1% of in-ground value C$14M in cash (Sep. 2018) sufficient to keep project moving forward
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