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Investor Presentation March 2019 The information contained in this - - PowerPoint PPT Presentation

Investor Presentation March 2019 The information contained in this presentation is in summary form and does not necessarily contain all information which may be material to the making of a decision in relation to the Company. Any investor should


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Investor Presentation

March 2019

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The information contained in this presentation is in summary form and does not necessarily contain all information which may be material to the making of a decision in relation to the Company. Any investor should make their

  • wn independent assessment and determination as to the Company’s prospects prior to making any investment decision, and should not rely on the information in this presentation for that purpose.

The information in this presentation is confidential, is being furnished to you solely for your information and may not be reproduced, in whole or in part, or distributed to any other person except to your legal, tax and financial advisors who agree to maintain the information in this presentation in confidence. This presentation does not involve or imply a recommendation or a statement of opinion in respect of whether to buy, sell or hold securities in the Company. The securities issued by the Company are considered speculative and there is no guarantee that they will make a return on the capital invested, that dividends will be paid on the shares or that there will be an increase in the value of the shares in the future. This presentation contains certain statements which may constitute “forward looking statements”. The forward looking statements in this presentation apply only as at the date of this presentation. Any forward looking statements in this presentation involve subjective judgment and analysis and are subject to significant uncertainties, risks and contingencies and other factors. Such risks may be outside the control of, and are unknown to, Black Dragon Gold and its officers, employees, agents or associates. Any forward looking statement included in this presentation are provided as a general guide only. Such statements are only predictions and are subject to inherent risks and uncertainties which could cause actual values, results, performance or achievements to differ materially from those expressed, implied or projected in any forward looking statements. No representation or warranty, express or implied, is made by the Company that the matters stated in this presentation will be achieved or prove to be correct. Recipients of this presentation must make their own investigations and inquiries regarding all assumptions, risks, uncertainties and contingencies which may affect the future operations of the Company or the Company's securities. The Company does not purport to give financial or investment advice. No account has been taken of the objectives, financial situation or needs of any recipient of this document. Recipients of this document should carefully consider whether the securities issued by the Company are an appropriate investment for them in light of their personal circumstances, including their financial and taxation position. Cooling off rights do not apply to the acquisition of new shares. Recipients may wish to seek independent financial and taxation advice before making any decision in respect of this presentation. This presentation is presented for informational purposes only. It is not intended to be, and is not, a prospectus, product disclosure statement, offering memorandum or private placement memorandum for the purpose of Chapter 6D of the Corporations Act 2001. Except for statutory liability which cannot be excluded, the Company, its officers, employees and advisers expressly disclaim any responsibility for and make no warranties or representations as to the accuracy or completeness of the material contained in this presentation and exclude all liability whatsoever (including in negligence) for any loss or damage which may be suffered by any person as a consequence of any information in this presentation or any error or omission there from. The Company accepts no responsibility to update any person regarding any inaccuracy, omission or change in information in this presentation or any other information made available to a person nor any obligation to furnish the person with any further information. The presentation is not a prospectus and should not be considered as an offer or invitation to acquire shares in Black Dragon Gold or any other financial product in any jurisdiction and neither this presentation nor anything in it shall form any part of any contract for the acquisition of Black Dragon Gold shares. The distribution of this presentation in jurisdictions outside Australia and New Zealand may be restricted by law and you should observe any such

  • restrictions. In particular, this presentation is not an offer to sell, or a solicitation of an offer to buy, securities in the United States. Any shares described in this presentation have not been, and will not be, registered under the US

Securities Act of 1933 and may not be offered or sold in the United States except in transactions exempt from, or not subject to, the registration of the US Securities Act and applicable US state securities laws. Note, all figures are expressed in United States dollars unless otherwise stated. The Technical Information disclosed in this Presentation has been reviewed and approved by Douglas Turnbull, P.Geo., a Qualified Person as defined under National Instrument 43-101 and a Competent Person for the purposes

  • f JORC 2012. Mr Turnbull is a Professional Geologist and a member of the Engineers and Geoscientists of British Columbia. Mr Turnbull is a consultant to Black Dragon, and has sufficient experience relevant to the style of

mineralisation and type of deposit under consideration and to the activity he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the “Australian Code of Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr Turnbull consents to the inclusion in this report of the matters based on that information in the form and context in which it appears. You should be aware that as the Company has securities listed on the ASX, it is required to report reserves and resources in accordance with JORC 2012. You should note that while the Company's reserve and resource estimates comply with the JORC 2012, they may not comply with the relevant guidelines in other countries and, in particular, do not comply with (i) National Instrument 43-101 (Standards of Disclosure for Mineral Projects) of the Canadian Securities Administrators and (ii) Industry Guide 7, which governs disclosures of mineral reserves in registration statements filed with the US Securities and Exchange Commission. Information contained in this presentation describing the Company's mineral deposits may not be comparable to similar information made public by companies subject to the reporting and disclosure requirements of Canadian or US securities laws. In particular, Industry Guide 7 does not recognise classifications other than proven and probable reserves and, as a result, the SEC generally does not permit mining companies to disclose their mineral resources in SEC filings. You should not assume that quantities reported as “resources” will be converted to reserves under the JORC Code or any other reporting regime or that the Company will be able to legally and economically extract them.

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At less than $5/oz, Black Dragon is significantly undervalued relative to average EV/oz metrics of its peer companies.

New Board and Management New Board and senior management team appointed in 2017 to reinvigorate the company and drive the project to production. New drilling The Company undertook the first new drilling at the project since 2013. Recapitalisation New high grade intervals The new executive team recapitalised the Company through raising new equity of approximately A$15 million since June 2017, including the A$6m ASX IPO in 2018. High grade gold intervals from 2018 drilling demonstrates great potential to expand new mineralised lenses at Salave. 2018 MRE Reduction in overheads The executive team reduced corporate overheads to ensure the majority of capital is applied to driving Salave closer to development. 48% increase in mineral resource to 1.6Moz gold (M, I & I). 2019 PEA Legacy Royalty The executive team improved project economics through a cost effective buy-out of a legacy royalty that existed over the deposit. The Preliminary Economic Assessment leveraged previous technical work resulting in an Pre- Tax NPV of $296m over a 14 year mine life, with an IRR of 28% and 3.8 year payback.

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0.05 0.1 0.15 0.2 0.25 0.3 0.35 0.4 200 400 600 800 1,000 1,200 1,400 Jun 2017 Sep 2017 Dec 2017 Mar 2018 Jun 2018 Sep 2018 Dec 2018 Mar 2019

Share Price (AUD) Volume Traded (‘000s)

Volume Share Price

Capital Structure

Shares on Issue 110.9M Warrants (Wtd Av. Ex. Price: CDN$0.32) 83.3M Options (Wtd Av. Ex. Price: CDN$0.31, Av Exp Date: 08 May 2022) 6.7M Market Cap. (@ A$0.089/share) A$8.3M Cash at 31 December 2018 A$3.7M Enterprise Value A$4.6M

New Management & Re-Capitalisation Commencement of Drilling ASX Listing & Capital Raise

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PAULCRONIN CEO & Managing Director Resources focused fund manager and investment banker with considerable experience in debt and equity financing resource projects, and mergers and acquisitions. Co-founder and a Director of Adriatic Metalsplc,andDirectorofGlobalAtomicCorp. JO BATTERSHILL Non-Executive Chairman Over 20 years’ experience in mining, business development and finance. Until recently, was the Global Mining Strategist (Executive Director) with the UBS investment bank in London. Currently a Director of SilverMinesLtd. ALBERTO LAVANDEIRA Non-Executive Director Former Chief Executive Officer, President and COO of Rio Narcea Gold Mines (1995-2007), which built theElValleAumineinAsturiasaswellastheAguablancaCu-Nimine. Mr.LavandeiraisalsoCEO&MD

  • f TSX listed Atalaya Mining, owner of the Riotinto copper project near Seville, Spain and is a Mining

Engineerwith39yearsofoperatingexperience. JOSE MANUEL DOMINGUEZ General Manager –EMC FormerlytheGeneralManagerofImerysinbothSpainandItalyfollowingalongcareerwithRioTintoin various managerial and technical roles in Spain. Mr. Dominguez is a Mining Engineer of the School of Mines in Oviedo with over 30 years of experience in open pit and underground operations, mine designandpermitting,andholdsanM.B.A DOUGLAS TURNBULL Exploration & Technical Advisor Mr.Turnbullisaconsultinggeologistwithover20years’experienceindiamondandpreciousandbase metal exploration. He is a Qualified Professional Geoscientist recognized by the APEGBC. He has been thePresidentofLakeheadGeologicalServicesInc.since1990. EMMA CHETWYND STAPYLTON Investor Relations Ms.ChetwyndStapyltonhasworkedinthePublicRelationsandMarketingfieldsforover25years,with experience in both the consumer and trade sectors. She has joined Black Dragon to manage external andinvestorcommunicationsaswellasDigitalMarketingandSocialMediafortheCompany. SEAN DUFFY CFO & Company Secretary Mr.Duffyhasmorethan20yearsoffinanceexperienceintheminingindustry,previouslyasCFOforthe TSXV-listed Asian Mineral Resources. Previously, Mr. Duffy was CFO and Company Secretary for AIM- listed Anglo Asian Mining Plc and has held senior finance roles at BHP Billiton’s global operations, includingFinanceDirectorofBHPBillitonIndonesia. RICHARD MONTI Non-Executive Director Over30years’experienceintechnical,commercial,marketingandfinancialfieldsintheexplorationand mining industries. 41 years of “board” experience across 13 ASX and TSX listed companies. Currently a DirectorofPacificoMineralsLtdandChairmanofZincofIrelandNL.

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SALAVE

Spanish mining output grew by over 20% in 2017, and is forecast to continue rapid growth as recent investments in mining and exploration convert to

  • utput.

Aguablanca(op+ug, prod)

Nickel, Copper

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Aznalcollar(ug, dev)

Copper

Las Cruces (op, prod)

Copper

Salamanca (op, dev)

Uranium

Barruecopardo(op, prod)

Tungsten

Muga(ug, eval)

Potash

Cabanasses(ug, prod)

Potash

Touro (op, eval)

Copper

El Valle (ug, prod)

Gold, Copper

La Parrilla (op, prod) Tungsten Riotinto(op, prod)

Copper

Carmenes(exploration)

Copper, Cobalt

Toral (exploration)

Lead, Zinc, Silver

Plaza Norte (exploration) Zinc Los Santos (op, prod)

Tungsten

San Finx(ug, prod)

Tin, Tungsten

AguasTenidas(ug, prod)

  • Copper. zinc

Mina Ana (ug, prod)

Fluorspar

Aguilas(exploration)

Copper, Lead, Zinc, Silver

Excacena(exploration)

Copper, Lead, Zinc, Silver

Left: Penouta(op, prod) Tin, Tantalum, Niobium Right: Alberta II (exploration) Tin, Tantalum, Lithium

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Location North-West Spain, in the Asturias region. Mining Province with Strong Mining Traditions A region with coal, fluorspar, lead, zinc and gold mining traditions. The El Valle gold mine commenced as an

  • pen pit mine in 1996, and is now an underground operation using CIL.

Politically and Economically Stable Member of the EU, rated Baa1 with a positive outlook. Security of Title Strong rule of law. Low Cost Jurisdiction Willing, educated local labour force and excellent heavy engineering, tunnelling and mining resources and skills available. Existing Infrastructure Sealed roads, close to transport (two ports, airport) and power supply. Mineralisation Hosted in altered granodiorite and metasedimentary rocks along the granodiorite contact in a NE trending, 350m wide shear zone. Associated with pyrite, arsenopyrite, stibnite and minor base metals. Highest grades are associated with albite-sericite alteration. Deposit Combination of a reduced intrusion related, shear zone hosted and orogenic gold deposit. Globally there are examples of gold deposits with similar mineralogy to Salave, that have spatial association with felsic intrusions, and have been defined as orogenic gold deposits.

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Salave Gold Project | One of Europe’s largest undeveloped gold deposits | 48% increase in contained resources in updated MRE Low Enterprise Value | Less than A$10 million EV, significantly below the peer group average EV/oz Significant Exploration Upside | Potential outside of the Salave deposit, high grade intersected along strike of Salave General Manager appointed | Local Asturian resident GM appointed in October 2017 | Experienced in-country management team Technically Robust | Extensive evaluation work completed historically demonstrates robustness of Salave Secure Tenure | 30 year mining concession in a first world jurisdiction

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1g/t Cut-off Grade 2g/t Cut-off Grade 3g/t Cut-off Grade Category Tonnes Au Tonnes Au Tonnes Au Mt g/t koz Mt g/t koz Mt g/t koz Measured 1.51 4.27 207 1.03 5.59 185 0.72 6.94 161 Indicated 13.31 3.05 1,307 7.18 4.43 1,023 3.84 6.16 761 Measured & Indicated 14.82 3.18 1514 8.21 4.58 1,208 4.56 6.28 922 Inferred 10.94 1.96 690 3.12 3.47 348 1.30 4.97 208 Total 25.76 2.66 2,204 11.33 4.27 1,556 5.86 5.99 1,130

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Production Profile Assumptions Project Economics Capital Requirements Gold Production Profile Pre-Tax NPV (5%) Profile

Input Unit Value Total Mineralised Material Tonnes Mined (LOM) Mt 9.19 Average Annual Throughput (LOM) ktpa 656.3 Head Grade Au g/t 3.87 Gold Recovery to Concentrate % 97% Mine Life years 14 Gold Grade of Concentrate Au g/t 59.71 Total Concentrate Produced kt 560.5 Total Ounces in Concentrate koz 1,108.4 Average Annual Production (LOM) koz 79.2 Input Unit Value Initial Capital Cost, includes 15% Contingency US$M 95.3 LOM Remaining Capital Costs US$M 19.3 Input Unit Value Pre-Tax NPV (5%) US$M 296.2 After-Tax NPV (5%) US$M 230.0 Pre-Tax IRR % 28% After-Tax IRR % 25% After-Tax Payback Period years 3.8 Input Unit Value Gold Price – Base Case US$/oz 1,250 50 100 150 200 250 300 350 400 1,200 1,250 1,300 1,350 US$M Gold Price ($/oz) 200 400 600 800 1,000 1,200 20 40 60 80 100 120 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Cumulative Au Production (koz) Yearly Au Production (koz) Yearly Au Production (koz) Cumulative Au Production (koz)

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Approximately 67,100m of historic drilling completed at Salave between 1971 – 2018 349 core holes (65,917m) 29 RC/percussion holes (1,226m) Limited drilling outside of the resource area Open at depth, with deepest hole to date drilled to 660m TD (outside resource area)

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Hole From (m) To (m) Interval (m) Au(ppm) BD18-01 125.00 129.35 4.35 41.90 BD18-01 146.60 167.25 20.65 5.10 BD18-01 146.60 157.90 11.30 7.42 BD18-01 305.30 317.70 12.40 25.83 BD18-01 312.55 317.70 5.15 52.99 BD18-02 218.40 249.20 30.80 7.07 BD18-03 283.65 296.25 12.60 18.09 BD18-03 339.00 343.20 4.20 52.03 BD18-04 183.05 220.50 37.45 6.60 BD18-04 209.00 219.00 10.00 13.43 BD18-04 243.00 255.00 12.00 6.83 BD18-05 174.60 191.00 16.40 5.86 BD18-05 199.90 212.00 12.10 8.02 BD18-05 234.10 250.80 16.70 17.60 BD18-05 234.10 240.80 6.70 30.27 BD18-06 219.80 223.90 4.10 24.50 BD18-06 232.50 235.50 3.00 24.15 BD18-07 144.50 149.00 4.50 12.70 BD18-07 159.50 188.00 28.50 23.98 BD18-07 171.75 180.85 9.10 65.14 BD18-07 176.00 179.35 3.35 148.03 BD18-07 201.90 215.30 13.40 8.99

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Opened the Deposit in all Directions and at Depth

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Significant opportunity on NW-SE strike of the existing resource envelope. Grade correlates well to alteration indicating strong potential for NW & SE extensions. Mineralisation has potentially been identified along the NE-SW strike which will be tested in upcoming drill programme. Mineralisation continues to be open at depth which still remains untested. Airborne survey will investigate the Salave IP area for further mineralised extensions and targets.

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2019 drill programme will test the mineralisation potential along NW-SE and NE-SW corridors and at depth but also to update Inferred Resources to Indicated Resources. Maps show the residual gravity anomalies.

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Fixing a broken business Since taking on the business in July 2017, management has been busy putting Black Dragon back on track. Management has recapitalised the business, paid off all the debt and restarted work on one of Europe’s largest undeveloped gold projects First drilling program since 2013 The company successfully permitted and completed the first drilling program at Salave since 2013, demonstrating an ability to work with local and regional authorities An Updated Mineral Resource Estimate The MRE yielded a small increase in average grade and a 28% increase from the 944,000 combined M&I

  • unces defined in the Company’s previous resource estimate at the same cut-off grade of 2.0 g/t Au

Salave Permit Extensions 30 year extension on the Ampliacion a Figueras Mining Permit, and a 3 year extension to the Salave Investigation Permit A Positive PEA Following the updated MRE, a PEA was released, which underlined the economic viability of the current Salave resource to be mined over an initial 14 year mine life

Recent Anticipated News Flow

Commencement of permitting process Management is very cognisant that, given historical issues, investors want to see progress on the project permitting MRE & PEA follow-up Now the MRE and PEA have been completed, the company will submit a mine plan proposal to the authorities and commence the ESIA Permitting challenges recognised The permitting history of Salave is not lost on management, and lessons have been learnt. Early engagement with local and regional authorities has already commenced An important point to remember It is important to point out that the Salave u/g mine was partially permitted in November 2014, providing precedent for investors Permitting could lead to significant re-rating Permitting of the Salave mine project would provide a price catalyst for investors, furthermore, it would initiate proceedings on the Pre-Feasibility Study

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… But the next 12 months will define BDG

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2017 Q1-18 Q2-18 Q3-18 Q4-18 Q1-19 Q2-19 Q3-19 Q4-19

Restructure Balance Sheet and Review Geologic and Technical Data Receive First Surface Drilling Approval in Asturias since 2013 Complete 2,250m of Exploration Drilling ASX Listing and A$6.0m Capital Raising Updated Mineral Resource Estimate NI 43-101 Preliminary Economic Assessment Submission of Application for ESIA Additional Geophysics over Salave IP Area Issuance of the ESIA Terms of Reference Soil Geochemistry Testing on Potential Drill Targets Pre-Feasibility Study

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Current activity is focused on resource expansion and project optimisation Updated PEA highlights positive economics, concluded that project can produce over 1.1Moz Au, over an initial 14 year mine life Drilling programme completed in 2018 to explore down dip potential and infill drilling along strike Recently appointed in-country team comprising experienced Spanish mining executives will drive project forward, including drill programme and engaging with local stakeholders Co-operation agreement with Panterra gold to identify possible site for Albion CIL plant in addition to flotation facility Negotiations currently underway for sale of Salave concentrate An updated and remodeled NI 43- 101 and JORC technical reports expanded MRE in Q4 2018 Exploration upside across 34 km2 tenement package, with less than 5% of tenement properly explored

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ü Community shareholders to be engaged prior to and throughout the ESIA process ü The Communications and PR Agency engaged to help build local relationships. ü Strategy in place to keep relevant stakeholders informed as project develops Black Dragon Gold will: ü Generate employment in the area ü Educate society regarding the environmental impact of technological advances ü Combine culture, tourism and employment for the local region ü Propose works that are an environment-friendly industry model

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ü Clear growth strategy, and reinvigorated board to drive value ü Existing resource base ~ 1.6Moz gold and expected to grow ü Salave is one of Europe’s largest undeveloped gold deposits ü Extensive evaluation studies completed, demonstrating potential for a robust underground mine development ü Drill program to target resource upgrade ü In-country team in place to drive project forward ü Positive PEA economics ü Significant exploration upside ü Undervalued against peers

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Rank Holder No of Shares % 1 Oceanic 6,877,167 6.20% 2 Panterra Gold Technologies 3,666,666 3.31% 3 Zenix Nominees 3,370,329 3.04% 4 Wymond 2,518,333 2.27% 5 Redland Plains 2,424,421 2.19% 6 Deutsche Balaton 2,000,000 1.80% 7 Dixson Trust 1,883,333 1.70% 8 Metaform Investment Mining 1,818,333 1.64% 9 JP Morgan Nominees Australia 1,810,970 1.63% 10 BPM Capital 1,700,000 1.53% Rank Shareholder Breakdown Summary No of Shares 1 CDI's (Total ASX holdings) 71,221,827 2 CDS (Canada) Shares 28,302,632 3 Panterra Gold Technologies - Shares 3,666,666 4 Exchanges for Control Canada - Shares 3,201,487 5 Buprestid Pty Ltd (Hanlon Family Super Fund) - Shares 1,666,666 6 Sorbie Bornholm Capital LLC - Shares 1,613,765 Others - various Canadian holders - Shares 1,188,182

NB: The top 10 shareholders is based on current disclosure. Some 27M holders are OBO so we cannot see the beneficial ownership. To Top 10 Shareholders Sh Shareholder b breakdown Su Summary

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High Grade Shallow Grade Continuous Lenses Open

1g/t – 5.5g/t Au 5.5g/t – 10g/t Au >10g/t Au

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PAUL CRONIN CEO and Managing Director +44 20 7993 4077 paul.cronin@blackdragongold.com EMMA CHETWYND STAPYLTON Investor Relations +44 203950 9138 emmacs@blackdragongold.com