Growing Gold Production in Nova Scotia CORPORATE PRESENTATION | - - PowerPoint PPT Presentation
Growing Gold Production in Nova Scotia CORPORATE PRESENTATION | - - PowerPoint PPT Presentation
Growing Gold Production in Nova Scotia CORPORATE PRESENTATION | AUGUST 2018 Important Cautionary Statements This presentation contains forward -looking statements . Forward-looking statements include, but are not limited to, statements
Important Cautionary Statements
2
This presentation contains “forward-looking statements”. Forward-looking statements include, but are not limited to, statements with respect to the Company’s current review of potential mineral project investments and/or acquisitions, the estimation of mineral resources, the timing and content of upcoming programs, the realization of mineral resource or reserve estimates, the timing and amount of estimated future production, costs of production, capital expenditures, success of mining operations, environmental risks, unanticipated reclamation expenses, title disputes or claims and limitations on insurance coverage. In certain cases, forward-looking statements can be identified by the use of words such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved”. Forward- looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements
- f the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking
- statements. Such factors include, among others, risks related to international operations; actual results of planned expansion activities; changes in
project parameters as plans continue to be refined; future prices of resources; exchange rates for Canadian and U.S. currencies; possible variations in grade or recovery rates, accidents, labour disputes and other risks of the mining industry; delays in obtaining governmental approvals or financing or in the completion of development or construction activities. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events
- r results not to be as anticipated, estimated or intended. In making the forward-looking statements in this presentation, the Company has made
certain key assumptions, including, but not limited to, the assumptions that merited mineral assets or projects can be acquired and financings are
- available. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ
materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The Company undertakes no obligation to update or revise any forward-looking statements or information made in this presentation, except as required under applicable securities legislation. NI 43-101 QUALIFIED PERSON - Neil Schofield, MS Applied Earth Sciences, MAusIMM, MAIG, a Qualified Person as defined by NI 43-101, has reviewed and is responsible for the technical information contained in this presentation. NOTES ON RESOURCE AND RESERVE ESTIMATES PRESENTED THROUGHOUT PRESENTATION Moose River Consolidated (MRC): Touquoy, Beaver Dam, Fifteen Mile Stream, Cochrane Hill – The Moose River Consolidated (MRC) Phase 2 Life of Mine Expansion (Touquoy, Beaver Dam, Fifteen Mile Stream, and Cochrane Hill) Mineral Reserves are current reserve estimates that are in accordance with the current Canadian Institute of Mining, Metallurgy and Petroleum Resources (CIM) Definition Standards on Mineral Resources and Mineral Reserves as required by NI 43-101 - Standards of Disclosure for Mineral Projects. A Qualified Person has done sufficient work to classify these reserve estimates to current mineral reserves prepared in accordance with NI 43-101. Cochrane Hill - The Cochrane Hill Mineral Resource estimates have been prepared in accordance with the Canadian Institute of Mining, Metallurgy and Petroleum Resources (CIM) as required by NI 43-101. Fifteen Mile Stream – The Fifteen Mile Stream Mineral Resource estimates have been prepared in accordance with the Canadian Institute of Mining, Metallurgy and Petroleum Resources (CIM) as required by NI 43-101.
Atlantic’s Key Differentiators
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Shareholder alignment: Board & Management own + 35% Track record of company builders Focus on risk management We recognize that time is money Phase 2 Life of Mine Expansion boosts annual gold production above 200,000 ounces Demonstrable upside with “string of pearls” deposit strategy along the + 45 km un-tested host structure (The Corridor Regional Program) Lowest quartile for both cash costs and all-in sustaining costs
Four Phase Approach (Execution, Expansion, Growth, Exploration)
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Phase 2 Expansion
Staged Integration of 2 Additional Satellite Deposits
into production schedule (staged capex)
Annual gold production increasing to + 200,000 oz.*
Phase 3 Growth
Resource Expansion Drill Program
Identified extensions to known mineralization
Phase 4 Exploration
Corridor Regional Program Up to 100,000 meters of drilling along the + 45km un-tested host structure
Phase 1 Execution
2018 Production Guidance
Between 82,000-90,000
- unces at low AISC between
C$675-$735 / oz. (US$506-551**)
Commercial Production Declared March 2018
*Based on forecasted results from the January 29th, 2018 pre-feasibility study **Based on current exchange rate of 0.75CAD/USD
Fifteen Mile Stream Cochrane Hill
Phase 2 Expansion Life of Mine Production Schedule
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AISC of CAD$692 / oz. Au (USD$555 / oz. Au)
- 50
100 150 200 250 300
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
73.5 96.2 93.5 171.5 230.5 254.3 244.9 202.4 80.3 13.1
Life Of Mine (years)
Moose River Consolidated LOM Production ('000 ounces)
Touquoy* Beaver Dam* Fifteen Mile Stream Cochrane Hill
Phase 4 Corridor Regional Program Phase 3 Resource Expansion Drilling Fifteen Mile Stream & Cochrane Hill
- Feasibility Study Projections for Touquoy vary from 2018 guidance
Based on forecasted results from the January 29th, 2018 pre-feasibility study
Backyard Canada
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Phase 1 LOM 2018 production guidance between 82,000-90,000 ounces of gold at All-In-Sustaining Costs between CAD$675-$735 / oz. (US$506-551/oz.*). Declared commercial production March 2018. Phase 2 Life of Mine Expansion** will boost annual gold production above 200,000 oz. gold with an average of 162,000 oz. gold / year produced over a minimum 10 year mine life** at All-in Sustaining Costs of CAD$692 /
- z. (US$555/oz.**)
Phase 3 Resource Expansion Drill Program - Mineralized extensions and definition at FMS and CH deposits Phase 4 Corridor Regional Program - systematically testing along the + 45km Corridor of prospective un-tested structure hosting all existing deposits
*Exchange rate of 0.75 USD/CAD **Based on pre-feasibility study completed in 2018 using a gold price of US$1300/oz. and a USD/CAD exchange rate of $0.80
Time is Money…..
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Consolidated Ownership of NS Deposits
Q3 2014 Q4 2014 Q4 2017 Q4 2017
Ramp Up to Full Production
Q2 2016
Execute EPC Contract
Feasibility Study work on MRC underway – target completion mid 2015
Q2 2015 Q2 2016
Debt Financing
- Macquarie / CAT Debt
Commitment C$115M
- CAT finance lease facility for
mining fleet
- MOU with Ausenco October 2015
- LSTK (Lump Sum Turn Key)
Price agreed
Q1 2016
Acquisition Feasibility Study
- Touquoy already has all
major permits in place
- Beaver Dam expected to
be straightforward given it is a satellite deposit
Commence Construction
H1 2015
Drilling Program Environmental and Permitting
Completed infill drilling program for Beaver Dam
JULY 2017
Updated Resource Estimate FMS + CH
Jan 2018
2018 Production Guidance
JAN 2018
Phase 2 LOM Expansion Study
2014
Phase 3 Expansion and Phase 4 Corridor Regional Program
Mine and Plant Commissioning
2017 2016 2018 2015
Mar 2018
Declared Commercial Production
Best in Class Margin and Cash Flow Generation
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$0 $100 $200 $300 $400 $500 $600 $700 $800 $900 $1,000 $1,100 $1,200 $1,300 $1,400 $1,500 $1,600 $1,700
Margin (CAD)
Gold Margin
CAD 1000 per oz.**
All-in Sustaining Cash Costs*
CAD 692 per oz.
(USD 555 per oz.)***
**Based on assumed Canadian gold price of $1692/oz. ***Based on exchange rate of 0.80 CAD/USD *Based on forecast results from the January 29th, 2018 pre-feasibility study – Phase 2 Life of Mine Expansion
Low AISC drivers: Low Strip Ratio Location Medium Grade Open Pit
$555 $825 $873 $936 $990 $993 $997 $1,013 $1,108 Atlantic Premier Guyana Goldfields Torex TMAC Leagold Beadell Wesdome Argonaut $502 $588 $630 $715 $768 $770 $788 $789 $864 Atlantic Guyana Goldfields Torex Premier Argonaut Wesdome Beadell TMAC Leagold
Lowest Quartile for both Cash and AISC Costs
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Atlantic leads peers in both total cash costs and all-in sustaining costs
2018E CO-PDT All-In Sustaining Costs (US$/OZ AU EQ.)
(3)
2018E CO-PDT Total Cash Costs (US$/OZ AU EQ.)
Source: BMO Capital Markets Equity Research at street consensus pricing, company filings, street research 1. Atlantic’s Phase 2 Expansion LOM cash costs of US$502/oz Au Eq. (C$627/oz Au Eq.). Assumes FX of US$0.80 per C$. 2. Premier co-product cash cost and AISC shown based on mid-range of public guidance for 2018E. 3. Atlantic’s Phase 2 Expansion LOM AISC of US$555/oz Au Eq. (C$692/oz Au Eq.)
(1)
(2)
(1)
Atlantic Gold $555
- $200
$400 $600 $800 $1,000 $1,200 $1,400 $1,600 $1,800 $2,000 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 55% 60% 65% 70% 75% 80% 85% 90% 95% 100% First Quartile: US$769/oz Second Quartile: US$879/oz Third Quartile: US$946/oz
Atlantic Ranks in the First Decile of AISC / oz.
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Total Cash Cost + Sustaining Capex(1,2) (US$/oz)
Source: Wood Mackenzie, company filings Note: Total Cash + Sustaining Capex Costs shown based on Wood Mackenzie company-level estimates. 2018E estimates shown based on the Q1 2018 dataset. 1. While used a proxy, Wood Mackenzie’s “Total Cash + Sustaining Capex” definition may not be directly comparable to the World Gold Council’s AISC definition. 2. Total Cash Cost + Sustaining Capex defined as direct mining and processing costs (including mine-level G&A and by-product credits), depreciation and amortization, royalties, levies, indirect taxes, corporate G&A, and sustaining capex. 3. Atlantic’s Phase 2 Expansion LOM AISC of US$555/oz Au Eq. (C$692/oz Au Eq.).
Declared Commercial Production – March 2018
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Built on budget and schedule Mill operating at design throughput capacity AISC between $CAD675-$735/oz. for 2018 2018 production guidance (82,000-90,000 ounces) Lowest quartile cash and all-in sustaining costs Phase 2 Expansion + 200,000 ounces of gold production
Q1 2018 Financial Highlights
On track to meet annual production and cost guidance
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*Please refer to the May 23rd, 2018 news release / Financial Statements and Q1 2018 operating / financial results tables and noted disclosures to the tables
CASH COSTS
CAD $549/OZ (USD $428/OZ @0.78 USD/CAD)
AISC
CAD $751/OZ (USD $586/OZ @0.78 USD/CAD)
18,183 ounces of
production for First Quarter
Good Grade Reconciliation
1.53 g/t Au for March and 1.44 g/t Au for Q1 Mill throughput and recoveries exceeding design criteria
Gold recovery of 95% for March and 94% for Q1
CAD $12.8 million
in revenue and
$3.3 million
net income
Q1 2018 Operating Results
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Note the disclosure of operations results and supporting discussion in this news release does not present comparative statistics for the prior year as MRC began producing gold in Q4 2017 and commenced commercial production effective March 1, 2018. Furthermore, the Company presents operating data above for the three months ended March 31, 2018 for illustrative purposes, but for accounting purposes, any financial results from March 1, 2018 forward are charged to operations in the Company’s financial statements as commercial production was declared March 1, 2018.
For the month ended March 31, 2018 For the three months ended March 31, 2018 Operating data Ore mined Tonnes 367,456 1,094,487 Strip ratio (waste to ore) 0.63 0.47 Mining rate (Total Material) Tonnes per day 19,339 17,874 Ore milled Tonnes 188,221 419,150 Head grade g/t Au 1.53 1.44 Recovery % 95 94 Mill throughput Tonnes per day 6,071 4,657 Gold ounce produced
- zs.
8,810 18,183 Gold ounces sold
- zs.
7,755 17,187
Q1 2018 Financial Results
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(1) MRC commenced commercial production effective March 1, 2018. As such, only financial operating results from this date are recognized in the Company’s Statement of Income (Loss) and Other Comprehensive Income (Loss). Financial operating results prior to that were capitalized to mine development within property, plant and equipment. (2) The Non-IFRS performance measures for the three months ended March 31, 2018 include production and operating results from January 2018 to March 2018. For accounting purposes, pre-commercial production financial operating results have been capitalized to property, plant and equipment (refer to note 9 of the interim financial statements for the three months ended March 31, 2018). Refer to Non IFRS performance measures in this news release and in the Company’s Management and Discussion Analysis for the three months ended March 31, 2018.
For the month ended March 31, 2018 For the three months ended March 31, 2018 IFRS Measures(1) Revenue CAD $12,881,462 Mine operating earnings 5,889,743 Net income and comprehensive income 3,310,557 Earnings per share - basic 0.02 Earnings per share – diluted 0.01 Total cash and cash equivalents CAD $15,282,095 Cash generated from (used by) operating activities 4,214,432 Total assets 255,204,721 Long-term debt 100,160,009 Non IFRS Performance Measures(2) Total cash cost per ounce CAD $552 CAD $549 AISC per ounce 752 751 Average realized price per ounce 1,663 1,619 Average realized cash margin per ounce 1,111 1,070 Average realize AISC margin per ounce 911 868
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Q2 2018 Production Results
Production Q2 2018 Year to Date* Tonnes Milled (t) 567,238 986,388 Gold Head Grade (g/t) 1.28 1.35 Gold Produced (oz) 22,269 40,452 Gold Recovery (%) 95.2% 94.7% Sales Q2 2018 Year to Date* Gold ounces sold 22,728 39,915 Average sale price $1,583 $1,598 Total revenue $35,967,625 $63,799,495
*Year to Date statistics represent 6 months of production and include 2 months of ramp-up as commercial production was declared effective March 1, 2018.
Milled head grade for Q2 2018 was 11% below life of mine reserve grade due to constraints in the pit where historical tailings had to be removed and prevented access to higher grade ore for more than 6
- weeks. Access to the higher grade mining blocks was achieved by the end of June
Continue to see good reconciliation between the resource model grade and milled grade Steady-state mill operations with throughput and recoveries that continue to exceed design criteria Q2 production above guidance and supporting full year production guidance of 82,000-90,000 ounces as announced on January 19, 2018
Plant Site
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Tailings Management Facility
Touquoy Pit
Coarse Ore Stockpile Facility Plant Crushing Circuit
Truck Shop
Admin Building Laboratory Mining Offices
Plant Site
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Phase 3 Expansion and Phase 4 Corridor Regional Program $14 million Drill Program
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Phase 3: Resource Expansion and Definition Program: Targeting extensions to FMS and CH deposits Infilling existing resources to M&I categories Phase 4: Corridor Regional Program: Commencing in April 2018 Systematically exploring the corridor of prospective structure targeting the Atlantic model for disseminated style mineralization amenable to open pit mining Up to 100,000 meters of drilling along + 45 km of untested host structure
Phase 3 Expansion Drill Program
Fifteen Mile Stream Gold Deposit
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Phase 3 Expansion Drill Program
Cochrane Hill Gold Deposit
20
New High-Grade Zone at Cochrane Hill
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Long Section
Reserves within Trucking Distance to a Central Processing Facility
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Central Processing Facility
MRC 760,000 oz Au P&P Reserves MRC Phase 2
(Fifteen Mile Stream and Cochrane Hill)
825,000 oz Au* P&P Reserves
*Touquoy @ 0.40 g/t cut-off grade – 119,000 oz. (Proven), 306,000 oz. (Probable) , Beaver Dam: 191,000 oz. (Proven), 144,000 oz. , Cochrane Hill @ 0.30 g/t cut-off grade – 240,000 oz. (Proven), 153,000 oz. (Probable), Fifteen Mile Stream: 115,000 oz. (Proven), 316,000 oz. (Probable)*
Next Intermediate Gold Producer
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Companies built on successful development from operations
Atlantic’s internal growth options together with strategic and timely acquisitions of new development properties will provide the platform to build the next intermediate gold producer. OR Be acquired at a premium?
Macraes (New Zealand): 183koz pa Didipio (Philippines): 122koz pa Waihi (New Zealand): 117koz pa Haile (United States): 144koz pa 2018 Consensus Guidance: 566koz Au @ US$728 AISC** El Limon (Nicaragua): 56koz pa La Libertad (Nicaragua): 129koz pa Masbate (Philippines): 176koz pa Otjikoto (Namibia): 166koz pa Fekola (Mali): 399koz pa (LoM Avg) 2018 Consensus Guidance: 926koz Au @ US$769 AISC**
OceanaGold $2.2B Mkt Cap B2Gold $3.4B Mkt Cap Atlantic Gold Corporation $417M Mkt Cap
Touquoy Beaver Dam Cochrane Fifteen Mile 2018 Guidance: 82-90kozpa Au @ US$506-551/oz* AISC
*Based on current exchange rate of 0.75 CAD/USD & Company 2018 Guidance **Based on analyst consensus production guidance and provided by BMO Capital Markets
ETF’s Versus Atlantic Team Value Add
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Consolidated ownership
- f Nova Scotia deposits
and gold camp Debt Financing for Moose River Consolidated Phase 1 Project Executed EPC fixed price contract with Ausenco Mine and Plant Commissioning Production guidance for 2018 Phase 2 expansion study Declaration of commercial production Phase 1 MRC Feasibility Study Commenced Phase 1 Construction Q1 2018 Financial Results
The result of applying discipline and risk management to the gold business
Source: FactSet, street research Note: Street profiles based on median broker consensus estimates with a 100-day estimate cut-off as of 23-Jul-18. Median capex estimate of C$80 million in 2020E and C$126 million in 2021E (Phase 2 Expansion of FMS and CH deposits)
Atlantic Gold Street Cash Flow Profile
2018E – 2022E Street operating cash flow profile (C$ mm)
$61 $84 $70 $99 $171 2018E 2019E 2020E 2021E 2022E
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Compelling value opportunity – Canadian single-asset gold company with lowest decile AISC
1. Implied P/NAV multiples for acquired companies calculated based on acquisition price and forward-curve based NAV (based on prevailing Canaccord Genuity forecasts) prior to announcement of transaction. Latest trading P/NAV multiple for AGB 2. Implied P/NAV multiples for acquired companies normalized to reflect changes in precious metal producer sector valuations since the date of acquisition. 3. Size of bubbles represents the average annual AISC margin (US$ M) assuming a gold price of $1,250/oz Au, average annual production and average AISC (based on prevailing CG estimates for three-year period following the acquisition). 4. Average annual AISC margin (US$ M) for AGB reflects average CG forecasts for the first three years following completion of the MRC Phase 2 expansion (2022E-24E) Source: Company Reports, Canaccord Genuity estimates
Atlantic Gold vs Past acquisitions of Canadian single-asset companies (P/NAV multiple vs average annual AISC)
26
Richmont Mines Lakeshore Gold Brigus Gold Northgate Minerals Claude Resources AuRico Gold Osisko Mining Atlantic Gold $500 $600 $700 $800 $900 $1,000 $1,100 0.40x 0.50x 0.60x 0.70x 0.80x 0.90x 1.00x 1.10x 1.20x 1.30x
Average annual AISC (US$/oz) Implied P/NAV multiple (based on acquisition price)
Share Structure
Project Loan Facility of $115m CAT Finance Lease Mining Fleet facility of $12.7m
27
Atlantic Pro-Forma Capitalization
Shares Outstanding 224,138,891 Warrants Outstanding ($0.60 Strike - Exp 08/18) 13.6 million Options 15 million FD S/O 252,828,944 Ticker TSXV: AGB Recent Share Price $1.86 Market Cap ($M) $417-million (undiluted) Major Shareholders
- Insiders & associates ~ 35%
- Sprott Group of Companies ~ 10%
- Other Institutional ~ 25%
*Includes $17m of restricted cash **Canadian Dollars unless otherwise indicated As of July 2018 ***The completion of the Revolving Credit Facility will be subject to completion of project finance documentation and typical conditions precedent for a financing
- f this nature. Closing is scheduled to occur before the end of July 2018.
Executes commitment letter for $150m Revolving Credit Facility to refinance project loan facility - ***Refer to News Release July 3, 2018 Liquidity: Total Cash as at July 3, 2018:$33m*
Current Balance Sheet prior to July 3, 2018 RCF announcement
Board and Management Strength
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Management Team
Steven Dean Chairman & Chief Executive Officer 30+ year mining career with proven successes in the junior and senior mining space. Former President of Teck Cominco. Co-founder and former Chairman of Amerigo Resources Ltd., former Chairman of Sierra Metals Inc., Chairman of Oceanic Iron Ore. Founding management of Normandy Mining and Pacific Mining Corporation in Australia. Maryse Belanger President, Chief Operating Officer & Director Over 30 years of experience with senior gold companies globally. Former Senior Vice President, Technical Services for Goldcorp. Director, Technical Services for Kinross Gold Corporation for Brazil and Chile. Wally Bucknell Director of Exploration & Director Geologist with over 44 years experience in the mining industry. Former Managing Director and CEO of Atlantic Gold NL, and General Manager, Exploration, of Plutonic Resources Ltd. Awarded AMEC’s ‘Prospector of the Year’ award. Chris Batalha Chief Financial Officer Chartered Accountant with experience in accounting, finance, corporate governance and M&A with a number of mining exploration and development companies. Spent 5 years with PricewaterhouseCoopers in the Audit and Assurance Group in Vancouver. Alastair Tiver VP Mine Development Mining engineer with 27 years of international mining experience involved in all phases of mine
- peration, planning, permitting and mine development. Held senior management roles in many
companies including BCMetals Corporation, Copper Mountain Mining Corporation and Yellowhead Mining Inc Neil Schofield Consulting Resource Geologist 25+ year career as a mineral resource consultant. Developed resource models and grade control systems experience with the Sunrise Dam, Hemlo, Kevitsa, Ernest Henry and Cannington
- mines. Mr. Schofield has co-authored several technical papers on sampling and mineral resource
estimation, published mainly by the Australian Institute of Mining and Metallurgy. Tony Woodfine General Manager 21 years experience in open pit mining with 3 previous successful startup operations. Former Mine Manager at Voisey’s Bay Nickel and former General Manager at Baffinland Iron Ore. Held positions as Head of Technical Services, Mine Planner, General Foreman and Grade Control. Sally Goodman Chief Geoscientist Structural geologist with over 30 years international experience in academia, consultancy and industry, including 12 years as Principal Structural geologist with SRK Consulting, and most recently five years in Corporate Technical Services and Exploration with Goldcorp Inc. Tom Ellard VP Business Integration & People Extensive experience working as a management consultant with clients in the mining sector including Mirabela Nickel and Barrick Gold as well as clients in executive education. Tom’s experience in gold mining includes time spent as the Director, Project Management – Technical Services for Goldcorp where he was focused on strategic projects and initiatives to improve health and safety, geology, metallurgy and operational excellence.
Board of Directors
Ryan Beedie Director President of Beedie Development Group, a leader in industrial and residential real estate development in
- BC. Recipient the 2004 Business in Vancouver's '40
under 40', the Ernst & Young 2009 BC Entrepreneur
- f the Year Award, the Queen Elizabeth II Diamond
Jubilee Medal in 2013 and Simon Fraser University's Corporate Impact Award in 2015. Robert Atkinson Vice Chairman & Director Over 30 years in the investment industry. Former President & CEO of Loewen Ondaatje McCutcheon & Co Ltd. Currently serves on the board of numerous junior resource companies. David Black Director Retired corporate and securities lawyer and former partner with DuMoulin Black LLP. Currently serves
- n
the board
- f
numerous junior resource companies. Donald Siemens Director CA and former Partner-in-Charge of Thorne Ernst & Whinney’s (now KPMG) Vancouver office Financial Advisory Services Group. Currently an independent financial advisor, specializing in Corporate Finance and M&A, and serves on the board of numerous junior resource companies. William Armstrong Director Geological Engineer with over 45 years experience in the mining sector. Recently retired from Teck, as General Manager, Resource Evaluations, and responsible for evaluation of potential acquisitions and divestitures, as well as involvement in feasibility studies, construction and operations.
Analyst Target price
29
As at May, 2018 Source(s): S&P Global Market Intelligence. based on Analyst consensus estimates.
Broker Report Date Discount Rate Target price / share (C$) Haywood Securities Feb-18 6.0% $1.80 GMP Securities 15-Feb-18 5.0% $2.65 Raymond James Financial 4-Apr-18 5.0% $2.50 Beacon Securities 28-Mar-18 5.0% $3.25 BMO Capital Markets 24-May-18 5.0% $2.75 Canaccord Genuity 22-Apr-18 5.0% $3.50 PI Financial 23-Jul-18 5.0% $2.60 National Bank Financial 25-Apr-18 5.0% $3.00 Desjardins Capital Markets 4-Jul-18 5.0 - 6.0% $2.75 Consensus Average $2.76
Atlantic Gold Corporation
Growing Gold Production in Nova Scotia
30
760,000 oz* P&P Reserves (T
- uquoy and
Beaver Dam) 825,000 oz* P&P Reserves (Fifteen Mile Stream and Cochrane Hill) Resource Upside from Phase 3 drill programs and Phase 4 Corridor Regional Program
Phase 2 Life of Mine Expansion Study completed Jan 2018
Mar 2018
Declared Commercial Production
Jan 2018 Phase 2 LOM Expansion Study
Incorporating Cochrane Hill & Fifteen Mile Stream
2018
Phase 4 Corridor Regional Program
H2 2018
New Resource Estimate (FMS & CH)
*Touquoy @ 0.40 g/t cut-off grade – 119,000 oz. (Proven), 306,000 oz. (Probable) , Beaver Dam: 191,000 oz. (Proven), 144,000 oz. , Cochrane Hill @ 0.30 g/t cut-off grade – 240,000 oz. (Proven), 153,000 oz. (Probable), Fifteen Mile Stream: 115,000 oz. (Proven), 316,000 oz. (Probable)*
Phase One Execution
Production Guidance 2018
Between 82,000-90,000
- unces at low AISC between
C$675-$735 / oz. (US$506-551**)
Phase Two Expansion
Annual gold production increasing to + 200,000 oz.*
Staged Integration
- f 2 Additional
satellite deposits into production schedule (staged capex)
Initial Study
Phase Three Growth
Resource Expansion Drill Program
Fifteen Mile Stream Cochrane Hill
Corridor Regional Program
Phase Four Exploration
**Exchange rate of 0.75 USD/CAD
Up to 100,000 meters of drilling along the + 45km un-tested host structure
Analyst Coverage
31
Institution Analyst Email BMO Capital Markets Andrew Mikitchook andrew.mikitchook@bmo.com Canaccord Genuity Rahul Paul rpaul@canaccordgenuity.com GMP Securities Ian Parkinson iparkinson@gmpsecurities.com Beacon Securities Michael Curran mcurran@beaconsecurities.ca PI Financial Chris Thompson cthompson@pifinancial.com National Bank Financial Don DeMarco don.demarco@nbc.ca Haywood Securities Geordie Mark gmark@haywood.com Raymond James Tara Hassan tara.hassan@raymondjames.ca Desjardins Capital Markets Raj Ray raj.ray@desjardins.com
Atlantic Gold Corporation Corporate Head Office: Suite 3083, Three Bentall Centre, 595 Burrard Street, Vancouver, BC, V7X 1L3, +1 604 689 5564 info@atlanticgoldcorporation.com Investor Relations Manager Sean Thompson Direct: +1 778 375 3125 Toll Free: 1 877 689 5599 sthompson@atlanticgoldcorporation.com
Appendices
AGB Liquidity Analysis – Jr. Producer
33
Source: National Bank Financial Inc.
Peer group includes:
- Mandalay
- TMAC
- Klondex,
- Teranga
- Guyana
- Beadell
- Ramelius
- McEwen
- Golden Star
- Alacer
- Wesdome
- Roxgold
- DPM
- Argonaut
- Alio
- Premier
AGB Liquidity Analysis – Explorer / Developer
34
Source: National Bank Financial Inc.
Delta of Avg. Daily Volume as a % of Free Float versus Peers
- Avg. Daily Volume as a % of Free Float
Peer group includes:
- Almaden
- Belo Sun
- Continental
- Dalradian
- Falco
- GSV
- Harte
- Lundin Gold
- Marathon
- Midas
- Newcastle
- Orezone
- Osisko Mining
- Sabina
- Seabridge
- Victoria
- Vista
Pre-Concentration Flowsheet for FMS and CH
35
Tailings Management Facility
36
Touquoy Open Pit
37
38
Meguma vein-hosted vs argillite –hosted gold
Gold-bearing quartz veins – Mainly parallel to bedding in argillite; some cross-cut bedding Additional dispersed gold mineralization within argillite units – e.g. Touquoy Pit
We have a package of sedimentary rocks comprising strong greywacke and weaker argillite units – and differential movement when the rocks were folded opened up space for gold-bearing fluids. The classic Meguma deposits are quartz veins with coarse-grained gold, parallel to the bedding in the sediments. In some places there is also gold dispersed within the argillites – not associated with quartz veins – which is what we are exploiting at Touquoy.
Strong greywacke Weak argillite
Cross-cutting veins (commonly barren): 1. Brittle fractures in competent units 2. Extensional fracture arrays 3. Lateral ramp 4. Tear or transfer fault
Grade controlled by lithology and structure
39
Current pit shell
Detailed knowledge of the Touquoy deposit has provided us with an understanding of how the mineralization is controlled by rock type – here concentrated within the grey argillite – and also by structure – for example this blue fault is a sharp boundary between
- re and waste, and may represent part of the plumbing system that fed gold-bearing fluids into the argillites.
Greywacke Argillite
3D Geology: Touquoy Pit
How Do We Approach The Business Differently?
40
The gold development business is really no different to other businesses – it's about risk management, capital discipline and execution There are more risk management tools in mining in the gold sector
- Grade control drilling in open pits provides higher data density for improved precision
for ore and waste definition in advance of mining and capital investment
- Open pit mining lower risk than underground
- Gold distribution in disseminated deposits is usually best modelled
with both geology AND modern statistical analysis
- EPC fixed price turn key contracts pass capex
- ver-run risk to contractor’s balance sheet
41