Corporate Presentation November 2019 Disclaimer This presentation - - PowerPoint PPT Presentation

corporate presentation november 2019 disclaimer
SMART_READER_LITE
LIVE PREVIEW

Corporate Presentation November 2019 Disclaimer This presentation - - PowerPoint PPT Presentation

TSXV & BVL:TK | OTCPK: TKRFF www.tinkaresources.com Corporate Presentation November 2019 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 – November 2019

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

Focusing on the Ayawilca Zinc-Silver Project

Ayawilca

Peru

  • Ayawilca Zinc Zone: over 7 billion pounds of zinc in underground resources
  • July 2019 Preliminary Economic Assessment (PEA) showed a robust project:
  • After-tax NPV8% of US$363M with IRR of 27% (Pre-tax NPV8% of $609M with

37% IRR) using $1.20/lb Zn, $0.95/lb Pb, $18/lb Ag, and $65/t NSR cut-off

  • Initial capex US$262M, payback period 3.5 years after-tax (2.3 years pre-tax)
  • Average production of 200,000 tonnes zinc con/year (PERU TOP 5) and 0.9

million ounces silver/year with a 21 year mine life

  • Good infrastructure (power, water, roads)
  • Colquipucro Silver Zone: ~18 million ounces silver in open pitable resources
  • Significant exploration upside on the 100%-owned 170 km2 property

Work Program:

  • Drilling for high grade (both zinc and silver) & exploration on other targets
  • PEA optimization work to further increase economic potential
  • Company funded for current work: ~C$8 million cash (June 30, 2019)
slide-4
SLIDE 4

4

Market Capitalization & Investors

TSXV & BVL: TK | OTCPK: TKRFF

Shares Issued: 264.6 M Options (priced at $0.325 to $0.50) 11.4 M Warrants (priced at $0.45) 12.4 M Fully diluted: 288.9 M Market cap @ C$0.16/share: C$42 M Cash (Jun. 30, 2019): ~C$8 M Enterprise Value @ C$0.16/share: C$34 M

Analyst Coverage Ian Parkinson Kevin MacKenzie George Topping Major Shareholders

Institutional: Sentient Equity Partners 24% IFC (World Bank) 11% JPMorgan UK 7% Other institutions ~10% Total institutional 52% Management & insiders 2% Retail/other 46%

slide-5
SLIDE 5

Management – Extensive Peru and Zinc Experience

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. 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.

5

Management & Board

Independent Directors

Ben McKeown Chairman of the Board. Mining engineer, MBA, with 25 years experience in mining, oil & 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.

slide-6
SLIDE 6

6

Zinc Inventories – Declining for Seven Years

  • Zinc prices have declined 30% from 2018 highs due to the trade war between the US and China,

and concerns that zinc market will go into surplus – sentiment is bearish, but improving

  • While zinc demand has been impacted by the trade war, inventories continue to decline
  • A rebound in China zinc demand could send zinc prices substantially higher

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

slide-7
SLIDE 7

7

Zinc Market – Upcoming Supply Gap

  • Forecasters have been predicting big increases in zinc mine production that have failed to

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

  • China zinc mine production has lagged expectations due to declining ore grades and stricter

environmental regulations & inspections

  • Teck expects zinc mine production to peak in 2021, with a supply gap of at least 700 kt by 2023
slide-8
SLIDE 8

8

Exploration During 2015-2018

  • 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 year-on-year
  • Further potential exists to grow the resource quality, tonnage and grade
  • Tinka will aim to upgrade resources again following 2019 drilling
slide-9
SLIDE 9

9

Ayawilca Resource – One of the Largest in a Junior

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

slide-10
SLIDE 10

10

Tinka – Compelling Valuation in Junior Zinc space

1 ZnEq includes all metals. Source: GMP Securities, July 2019 TK valuations based on $C0.25 share price

slide-11
SLIDE 11

11

2019 Ayawilca PEA Highlights (in US dollars)

Robust Economics :

  • 5,000t/day underground zinc mine with

21 year mine life

  • 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

  • Nov. 4/19 spot: $1.17/lb Zn, $0.99/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-12
SLIDE 12

12

2019 PEA – Leveraged to Zinc

  • ~90% of value in the Ayawilca PEA is from zinc and ~10% of value is silver with minor lead
  • Increasing PEA mill feed grades by 20% (i.e., average zinc grade of 7.3%) increases after-tax NPV8% by
  • ver US$200M – Average grade of South and West Ayawilca resources is 7.2% zinc
  • PEA optimization opportunities:
  • Target higher grade zones
  • Evaluate lower cost bulk mining methods

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

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-13
SLIDE 13

13

Evaluating PEA Optimization Opportunities

  • Increase Zinc Grade: South and West Ayawilca zones have the highest zinc grades and recent drilling

at South Ayawilca indicates additional upside to high grade resources

  • Lower Mining Cost: PEA assumed Room & Pillar mining for the entire resource, but lower cost bulk

mining methods (e.g., open stoping) may be better suited for thicker South and West Ayawilca zones

  • Combination of higher grades and lower opex could move Ayawilca further down the cost curve

Ayawilca 2019 PEA AISC $0.72/lb Zn Sources: Teck, company information

slide-14
SLIDE 14

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

14

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-15
SLIDE 15

15 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-16
SLIDE 16

16

Ayawilca Geology & Mineralization

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-17
SLIDE 17

Ayawilca Carbonate Replacement Deposit

17

  • 3 km NE-trending

magnetic anomaly

  • Large system with

multiple mineralizing events

  • Magnetic

anomalies at South & Zone 3 remain to be adequately tested

  • Drilling recently
  • n A-A’ at South

Ayawilca

slide-18
SLIDE 18

18

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-19
SLIDE 19

19

Focusing on Thickest, Highest Grade Zones

  • Ayawilca mineralization

is “manto” style CRD, but 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

Best grades and thickness

+ +

slide-20
SLIDE 20

20

2019 Drilling Highlights at South Ayawilca

  • Grades in 2019 drill holes are

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-21
SLIDE 21

21

Next Steps: Exploration & Optimization

2019-2020:

  • Drilling is targeting additional high grade zinc zones at South (Sep-Nov 2019)
  • Exploring other targets on Tinka mining properties (170 km2)
  • Possible resource update by early 2020

2020-2021:

  • PEA optimization
  • PFS - Applications now filed for infill drill permits, expected late 2019

Resource Definition

PEA

  • ptimization

& targeted drilling

Prefeasibility Study & Engineering Feasibility Study & Permitting

Production 2015-2019...

2019-2020

2020-21? 2021-22? 2023?

slide-22
SLIDE 22

22

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-23
SLIDE 23
  • Ongoing 10 year 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

23

Community Relations & Environment

slide-24
SLIDE 24

24

Summary

  • Scarcity Value - Ayawilca Zinc Zone has the size & grade the market requires for development
  • Proven Mining Belt - strong community relationships & infrastructure (roads, water, power)
  • Full Ownership - 100% ownership of a PEA stage project with after-tax NPV8% of US$363M
  • Low Valuation - Tinka EV of ~US$27 million is less than 10% of the after-tax NPV8% in PEA
  • High Grades Drilled - 2019 drilling intersected higher than expected zinc grades, plus

discovered a new high grade silver zone at South Ayawilca

  • Program for 2020 - Additional regional exploration, PEA optimization leading to a PFS
  • Well Financed - C$8 million in cash (Jun. 30, 2019), no debt
  • Upside Exploration potential - Also tin and silver resources not considered in PEA
slide-25
SLIDE 25

APPENDIX

slide-26
SLIDE 26

26

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-27
SLIDE 27
  • 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)

27

Ayawilca PEA – A Top 5 Peru zinc mine

Mining and Resources

  • UG mine at throughput of 5,000 t/d
  • 38.2 Mt of Resources (72% Indicated, 66% Inferred) mined over 21 yrs
  • 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-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