Developing Precious and Base Metals Projects in Mexico July 11, - - PowerPoint PPT Presentation

TSX VENTURE: MMN 1

July 11, 2019

Developing Precious and Base Metals Projects in Mexico

FORWARD LOOKING STATEMENT

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This presentation is prepared by Monarca Minerals Inc. (MMN – TSX.V). Management of Monarca are solely responsible for content and format. Management has compiled this presentation from industry information, NI 43-101 technical reports, and news releases with specific underlying Qualified Persons as set out in the news releases and reports. Industry information has been compiled from publicly-available sources and may not be complete, up to date, or reliable. This presentation contains forward-looking statements within the meaning of Canadian and U.S. securities laws. Such forward looking statements are subject to risks and uncertainties which could cause actual results to differ materially from estimated results. Such risks and uncertainties include, but are not limited to, the Company’s ability to raise capital to fund development and exploration, changes in general economic conditions or financial markets, changes in metal prices, general cost increases, litigation, legislative, environmental and other judicial, regulatory, political, competitive developments in Mexico, technological and operational difficulties

• r inability to obtain permits encountered in connection with the Company’s exploration activities, community and labour relations

matters and changes in foreign exchange rates, all of which are described in more detail in the Company’s filings with the Canadian Securities Regulators. This presentation is for information purposes only and is not a solicitation. Please contact the Company for complete information and consult a registered investment representative / advisor prior to making any investment decision. Investors are urged to consider closely the disclosure in Monarca’s annual and quarterly reports and other public filings, accessible through the Internet at www.sedar.com. Although the Company believes its properties have promising potential, its properties are in the early stages of

• exploration. None have yet been shown to contain proven or probable mineral reserves and there can be no assurance that such

reserves will be identified on any property, or that, if identified, any mineralization may be economically extracted. Technical Information and Qualified Person Statement: All historical resource estimates, preliminary economic assessment (PEA), production data, drilling or sampling figures (“Technical Information”) quoted herein are based on prior data and NI 43-101 technical reports prepared by previous operators or adjacent property holders. Monarca Minerals has not verified this technical information and this information is not necessarily indicative of the mineralization potential on Monarca’s properties discussed herein. All historical information disclosed should not be relied upon and has not been verified by a Qualified Person. All scientific and technical information contained in this presentation has been reviewed and approved by Michael R. Smith, a Professional Geologist and Qualified Person under the meaning of NI 43-101.

FRANK HOGEL – CHAIRMAN & DIRECTOR:

• Mr. Hogel currently serves as Chief Executive Officer of Peter Beck Performance Funds and sits on the advisory

board of Concept Capital Management Ltd. He has an MBA degree from the University of Nurtingen, Germany. CARLOS ESPINOSA – PRESIDENT, CEO & DIRECTOR

• Mr. Espinosa, is a mining executive with over 25 years of experience within Canadian capital markets, international

business development and commercial banking. He is CFO at Fredonia Management and former Head of Business Development, Global Mining at the TSX and TSXV. Mr. Espinosa earned an MBA from Kellogg School of Management at Northwestern University and a Bachelor of Business Administration from UNAM - “Universidad Nacional Autónoma de Mexico” and is fluent in Spanish. PAUL TÉNIÈRE – DIRECTOR: Paul Ténière, M.Sc., P.Geo. has 20 years of experience in the mining and oil & gas sectors taking projects from exploration to mine development. Mr. Ténière has held senior to executive roles with small cap to large mining companies developing precious metal, base metal, and metallurgical coal deposits, and has significant capital markets and corporate finance experience. Mr. Ténière is currently President and CEO of Eastern Zinc Corp and was Senior Manager of Mining at the Toronto Stock Exchange (TSX), Chief Geologist for Sherritt International Corp, and an Exploration Manager for Vale S.A. and Solid Energy New Zealand. JAMES McVICAR – DIRECTOR

• Mr. McVicar is a senior partner of Peterson McVicar LLP in Toronto with 20 years of experience focused in

corporate finance and mining law. He previously spent close to three years as legal counsel in the Corporate Finance Branch of the Ontario Securities Commission (OSC) and later in his career was appointed to the OSC's Securities Advisory Committee for a 2 year term.

BOARD OF DIRECTORS

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CARLOS ESPINOSA – PRESIDENT, CEO & DIRECTOR

• Mr. Espinosa, is a mining executive with over 25 years of experience within Canadian capital markets, international

business development and commercial banking. He is CFO at Fredonia Management and former Head of Business Development, Global Mining at the TSX and TSXV. Mr. Espinosa earned an MBA from Kellogg School of Management at Northwestern University and a Bachelor of Business Administration from UNAM - “Universidad Nacional Autónoma de Mexico” and is fluent in Spanish. BRUCE REILLY – CFO

• Mr. Reilly is a graduate of the University of Toronto with a Bachelor of Commerce degree and is a Chartered

Accountant (1985). For the past twenty plus years, Bruce Reilly has successfully developed and managed a chartered professional accounting firm. Mr. Reilly also sits on the Board of Platinex Inc. (CSE "PTX") and iSign Media Solutions Inc. (TSX-V “ISD”). MICHAEL R. SMITH – EXECUTIVE VP – EXPLORATION & QUALIFIED PERSON

• Mr. Smith is a Professional Geologist and has 38 years of experience

in mining, working for Barrick Gold, Continental Gold, Oremex Silver and continues to provide Qualified Person services. He is an SME Registered Member (ID 4167376RM) and graduated from Arizona State University in 1979 (BS) and the Mackay School of Mines in 1981 (MS) in Geology. Mike has Permanent Residency status in Mexico and is fluent in Spanish. CARLOS PACHECO – COUNTRY MANAGER

• Mr. Pacheco is a geologist with more than 25 years of experience in exploration, development and operations,

with major Mexican mining and Canadian junior companies. He also has significant experience managing community relations and business development activities in the mining sector. He graduated from Instituto Tecnológico No. 7 de Cd. Madero, México in 1985 (BS).

MANAGEMENT

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STOCK INFORMATION

• TSX-V SYMBOL - MNN
• Basic Shares Issued . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49.6 Million
• Stock Options Outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1 Million

2.1Million @ $0.14

• Warrants Outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.5 Million

13.2 Million - Exercisable @ $0.18 expiry May 2020 0.7 Million - Exercisable @ $0.13 expiry May 2020 3.4 Million - Exercisable @ $0.18 expiry July 2020 0.2 Million - Exercisable @ $0.13 expiry July 2020

• Fully Diluted Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69.2 Million
• Basic Market Cap @ $0.055 . . . . . . . . . . . . . . . . . . . . . . . . . . . $2.73 Million
• Cash in the bank at February 28, 2019 . . . . . . . . . . . . . . . . . . $17 Thousand
• Major Shareholders:
• Eric Sprott
• Concept Capital Management

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 San Jose (flagship project): New geophysical discovery. This 5,580-hectare property

in Chihuahua has excellent indications of multi-element mineralization associated with skarn, jasperoid, gossan and altered intrusive rocks, located just 50 km from the Bismark mine owned by Grupo Peñoles

 Tejamen: Inferred resource of 19.8 million tonnes @ 45 g/t Ag resulting in 28.7 million

contained ounces of silver (15ppm cutoff) – completed in accordance with NI 43-101 and CIM (2014) standards

 San Lucas: Provides significant exploration potential for Ag, Au and base metals, with

drillhole results up to 527ppm Ag

 El Sol: Provides significant exploration potential for Ag, Au and base metals, with

surface mine dump assays up to 358ppm Ag, 1.95ppm Au, 19.6% Zn and 22.6% Pb All projects are in the mining and capital-friendly jurisdictions of Durango and Chihuahua, Mexico

PROJECT OVERVIEW

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Monarca Mineral is focused on the exploration and development of precious & base metals projects along the highly productive mineralized belt in northern Mexico

WHAT’S NEW?

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Q4 2017

Signed Letter of Intent to acquire San Jose project in Chihuahua, Mexico

Q4 2018

San Jose Project: Completed IP \ Resistivity \ Magnetic Surveys on approximately 6 Km2

• n the skarn system,

with a very positive results Geological mapping completed over the primary area of old mines +/- 820 hectares 167 surface samples taken

Q2 2019

Executed contract of mining exploration and promise of assignment of rights for San Jose project.

Q3 2019

Planning a 5,000 to 10,000 metre drilling program on San Jose project

SAN JOSE PROJECT

FLAGSHIP PROPERTY

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Tyrone Bisbee Bismark

SAN JOSE PROJECT CHIHUAHUA STATE

N

SAN JOSE PROJECT: HISTORIC/ACTIVE MINES

San Jose

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Bismark Mine: Inferred Resource of 12.8 Mt at 52 g/t Ag, 11% Zn, 0.6% Pb & 0.4% Cu

(source: Ore Geology Field Trip NW Mexico 11-21 January 2009)

DEPOSIT TYPE AND LOCATION

 Deposit Type: Skarn and possible CRD/Porphyry with significant precious and base metal grades  Mineralization: In skarns, intrusives, veins, jasperoids, and altered limestones with Au (to 9.5ppm), Ag (to 257ppm), Cu (to 7.1%), Pb (to 9.8%), and Zn (to 2.0%)  Geophysics: Very strong IP response over 2.8km strike associated with very strong magnetics in area

• f late diorite dikes with IP anomaly open to south

 Location: San Jose property is comprised of 5,850 hectares, in the vicinity of the border with USA, approximately 125 kilometers west of El Paso, Texas (Juarez, Chihuahua, Mexico)  Accessibility: Road access and local infrastructure is good; 15 km to the east is the agricultural settlement of Guadalupe Victoria  Terrain: Rolling hill country dominantly, not steep mountainous area  Community: Good relations exist with the local Ejido and community who own the surface rights  Historical Mining: 14+ short shafts and pits with small production history dating from 1975; Au reported to be 1-5ppm, Ag 50-1000ppm and 5-8% Pb  Nearby Mining: San Jose is located 53 km northwest of the underground Bismark Mine operated by Grupo Peñoles. The Bismark Mine is a producer of Ag, Pb, Zn and Cu. Ore mining and processing started in 1992 and continues at 2,500 tpd.

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GEOLOGY AND MINERALIZATION



Potential for large skarn deposits with possible mantos & CRD, and porphyry mineralization



Dimensions of IP anomaly indicate possible large tonnages



High surface assay values may represent leakage of more voluminous mineralization associated with the very strong IP anomalies at depth



Strong magnetic anomaly in southwest side of survey area may represent mineralized intrusive body



Mineralized intrusive rocks emplaced into Paleozoic/Mesozoic limestones (Concha Unit, Cuchillo Unit & Aurora Group)



Intrusive rocks manifest as early granodiorite, intermediate monzonite, and late diorite dikes associated with IP and magnetic anomalies and mineralization



Intrusive rocks occur with various types and degrees of alteration including propyllitic, silicification, endoskarn, disseminated pyrite, and specularite/magnetite



Exoskarn mineralization is grossularite ± diopside, locally with hydrous retrograde silica + clay and

• verprinting quartz veins and silicification



Au mineralization, principally in late quartz veins, overprint the skarn and is associated with late silicification in the exoskarn and mineralized intrusive rocks



Mineralization is similar to that found at Bismark Mine about 53 km to southeast

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BISMARK MINE = SAN JOSE TARGET MODEL

 Note Minimal Surface Expression, like San Jose Property  Discovered in 1979 by Geophysical Survey: Magnetic & IP  Mineralization Reportedly Nearly Mined Out: Looking for Nearby Deposit to Feed 2,500tpd Mill

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Note: The Bismark Mine is regarded as a comparative exploration model for the San Jose Property, and mineralization at the Bismark Mine is not necessarily indicative of mineralization that may be hosted

• n the San Jose Property.

MINING CONCESSION MAP

Primary exploration & geophysics area 1 km

N

Concession Limit

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WORK COMPLETED AT SAN JOSE

 Geological mapping completed over the primary area of old mines +/- 820 hectares  167 surface samples taken  QAQC standards included in samples assayed at ISO Certified Laboratory, ALS Chemex, with good results in blanks and mineralized standards  Geophysics including magnetic and IP were completed over +/- 700 hectares, with large and positive results, indicating likely sulfide mineralization  Two houses rented in nearby Guadalupe de Victoria to accommodate Monarca and contractor personnel  Have developed a strong relationship with the local community

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GEOPHYSICAL IP RESPONSE & SECTION LINES

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INTERPRETED SUB-SURFACE GEOPHYSICS & GEOLOGY MAP

IP Anomaly 2.8+ km Long

IP Anomaly Extends SE off Geophysical Survey Grid

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MAGNETIC ANOMALY

Possible Buried Intrusive Porphyry Possible Buried Intrusive and/or Mineralization In Skarn

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SAN JOSE 2019 EXPLORATION PROGRAM

 San Jose is drill-ready. There are numerous and expansive IP geophysical targets to drill.  Geophysical IP penetration was to 450 m, so drilling is planned to 500 m depth  RC Phase 1 drilling (with a booster compressor) is proposed in 2019 as a first pass along

section lines, A, B, C, D and E, with an additional line of holes between sections B and C

 Nine to eighteen holes at 500 m each, totalling 4,500 m to 9,000 m, are proposed. One

hole at each section line (6) would be done in the first phase to calibrate remaining drilling.

 Core drilling would follow pending positive results from RC drilling program

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TEJAMEN PROJECT

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Key silver valuation component:

 Monarca owns 100% mineral rights and surface access in progress  1,685ha in 23 mining concessions  Inferred Resource of 19.8 million tonnes @ 45 g/t Ag (15ppm cutoff) resulting in 28.7 million contained ounces of Ag; completed by Gustavson Associates in accordance with CIM 2014 and NI 43-101 standards  215 RC holes (36,139m) and 10 core holes drilled between 2003 and 2008  Los Mantos remains open to the south, east and at depth in high grade veins  Significant exploration upside in feeder veins beneath both Los Mantos and Cerro Prieto deposits, grades of to 6m of 1,400ppm Ag, with about 5% Pb + Zn

21

View looking easterly: showing gentle relief in the deposit area

Los Mantos Area

TEJAMEN PROJECT DURANGO STATE

TEJAMEN GENERAL LOCATION

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TEJAMEN MINING CONCESSIONS

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TEJAMEN DRILLHOLE MAP

215 RC holes (36,139m) and 10 core holes were drilled between 2003 and 2007. Los Mantos zone (south) and Cerro Prieto zone (north) indicated.

Los Mantos

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TEJAMEN INFERRED RESOURCES

Deposit Cutoff pp ppm Ag TONNES Ag pp ppm Ag Contained Oz. Mantos 20 9,192,000 56 16,540,000 15 11,093,000 49.4 17,610,000 10 12,879,000 44.3 18,330,000 Cerro Prieto 20 6,790,000 45.7 9,970,000 15 7,760,000 42.2 10,520,000 10 8,590,000 39.3 10,860,000 Total 20 16,663,000 50.2 26,923,000 Both Deposits 15 19,838,000 45 28,706,000 10 22,847,000 40.7 29,928,000 Inferred Resources: from Gustavson Associates (Feb. 2, 2016) * No credit for potentially significant Pb values

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TEJAMEN PRELIMINARY METALLURGICAL TESTING

LAB TEST TYPE (CYANIDE)

• NO. OF SAMPLES

CRUSH SIZE

• AVE. Ag RECOVERY

Mc Clelland Inc. Bottle Roll 6 80% - 200 mesh 54.80% Mc Clelland Inc. Column Leach 2 RC chips (nominal 3/8”) 67.50% Wardrop Engineering Column Leach 3 N/A (assumed chips) 68% Mexican Geological Service Bottle Roll 4 100% -10 mesh 67%

The testing was done with a primary focus on cyanide leaching with milling of higher grade mineralization and heap leaching of lower grade mineralization. Additional metallurgical testing needs to be done, on lower grade mineralization using cyanide and regarding flotation to evaluate the possibility of recovery of Pb (along with Ag).

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SAN LUCAS PROJECT

 Two parallel vein structures have been identified in the 3km long mineralized Main Shear zone.  12 historical RC holes have been drilled, ranging from about 124m to 212m and averaging 158 m in depth.  Drilling results include up to 2m at 147ppm Ag, with 1.66% Zn and 0.41% Pb (MMSL-008; 48m-50m depth).  And up to 0.585ppm Au and 11.9ppm Ag (MMSL-19; 36-38m depth).  Exploration upside in the El Doctor vein area (Noche Buena) in outcrop channel sampling (up to 1.4m at 110ppm Au and 168ppm Ag).  Luismin obtained some very high grade underground sampling results, with up to 256ppm Au and 391ppm Ag, over 0.55m.  Potential exists for the principal veins below previous drilling depths, where the base of the volcanic host rocks encounter schist, phyllite and limestone. The sub-volcanic rocks remain untested on the Main Shear areas, where there is significant potential for large manto deposits.  A historical NI 43-101 technical report (Richards, 2005) states that a “centre of mineralization exists in the northern portion of the Main Shear” and that this is an “expression of manto style mineralization at depth”, in underlying carbonate rocks.

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SAN LUCAS PROJECT DURANGO STATE

SAN LUCAS SITE CONDITIONS

 100% ownership of San Lucas project mining concessions.  Approximately 4 km from Argonaut, El Castillo Complex (El Castillo mine and San Agustin Mine)  79.6 ha in 8 mining concessions. Efforts have been started to consolidate a larger San Lucas land package  Close to infrastructure and favourable topography  Good and long-standing relationship with the community  Surface land title owned by the San Lucas Community (not Ejido)  Pro-mining government at local and state level  Active support from governmental authorities to help with community relationship

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SAN LUCAS GENERAL LOCATION

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SAN LUCAS DRILLHOLE MAP

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 Drilling results include up to 2m at 147ppm Ag, with 1.66% Zn and 0.41% Pb (MMSL-008; 48m-50m depth).  Twelve RC holes have been drilled at San Lucas  Mostly to depths of about 150m  Manto potential below 200m in untested vein areas  Luismin obtained some very high grade underground sampling results, with up to 256ppm Au and 391ppm Ag,

• ver 0.55m.

EL DOCTOR ZONE SAMPLING HIGHLIGHTS

 Outcrop sampling (89 channels) identified two parallel Au/Ag zones with over 270 meters of strike length, known as the El Doctor zone.  The highest grade channel sample was 1.4 meters at 110.04ppm Au, 168ppm Ag and 1.05% Pb (SLS 09).  Of the 89 channel samples, 75% show grades over 0.50ppm Au.  The average Au grade of 89 samples, exclusive of the high grade 110ppm Au sample, is 3.22ppm.  The Ag grades range from trace to 264ppm, averaging 51.9ppm.  Re-logging of previously-drilled nearby holes has been started to assist in planning a drill program to test the new zones.  Drilling has not tested the intersection

• f

the veins with underlying schist/limestones.  Previous drilling encountered anomalous Au and Ag grades at shallow depths in the zone.

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EL SOL PROJECT

 Surface sampling at El Sol (old mine dumps) of up to 358ppm Ag, 1.94ppm Au, u, 19.6% Zn and 22.6% Pb. b.  One hole has been drilled on the concession (Southern Silver Exploration [SSV], 13CLM-072) and returned 0.3m (102.5 – 102.8m depth) at 87ppm Ag, 1.88% Pb, b, 1.01% Zn and 0.11% Cu. u.  SSVs Blind/El Sol Zone extends to the southeast corner of the El Sol concession, on n line with a chargeability ano nomaly along the east side of El Sol, which remains un- drilled.  SSV (1km southeast of El Sol) reports a resource at Las Minitas of 11,102,000 tonnes (indicated) at 105ppm Ag, 0.16% Cu, 1.2% Pb, 3.7% Zn and 0.10ppm Au and 12,844,000 tonnes (inferred) 111 ppm Ag, 0.27% Cu, 0.9% Pb, 2.8% Zn and 0.07ppm Au.  A strong aeromagnetic ano nomaly is located at the northwestern portion of the El Sol concession, possibly indicating the presence of a buried mineralizing intrusive.

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EL SOL PROJECT DURANGO STATE

EL SOL SITE CONDITIONS

 The El Sol concession is located about 75km northeast of Durango, Mexico, via paved highway.  100% owne nership of the El Sol concession.  63ha in the El Sol concession.  Southern Silver (SSV-V) previously had an option (through Freeport McMoran) to the El Sol concession, but relinquished it on July 20, 2015.  Close to infrastructure and easy topography.  Surface land held by two Ejidos with no historical problems.  Pro-mining government at state level.

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EL SOL GENERAL LOCATION

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EL SOL CONCESSION

13CLM-072: 0.3m (102.5 – 102.8m depth) at 87ppm Ag, 1.88% Pb, 1.01% Zn and 0.11% Cu 63ha

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SSV released on their website this image from an aerial magnetic survey over their holdings. Note that at El Sol there is a magnetic anomaly, like at Cerro Las Minitas.

El Sol Property

EL SOL AREA MAGNETIC SURVEY

Cerro las Minitas

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WHY MONARCA MINERALS?

 Recent Option Agreement to acquire San Jose Project in Chihuahua, Mexico  The flagship San Jose property has the potential to host significant polymetallic mineralization associated with skarn, gossan and altered intrusive rocks based on previous field mapping and geophysics  The San Jose Property is comprised of three mining concessions (5,580 hectares in size) located in Chihuahua, Mexico near the USA border, approximately 125 km west of El Paso, Texas (Juarez, Chihuahua, Mexico). The Property is also located 52 km northwest of the underground Bismark Mine

• perated by Grupo Peñoles

 Strong Board and a fully bilingual technical team with significant experience working in Mexico  Activities underway to secure new properties for development, emphasizing short term production potential  Improving Precious Metal prices  Low Market Capitalization

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Carlos Espinosa, MBA President, CEO and Director cespinosa@slgmexico.com

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