L OMA L ARGA PROJE CT , E CUADOR F e brua ry/ Ma rc h 2016 - PowerPoint PPT Presentation

L OMA L ARGA PROJE CT , E CUADOR F e brua ry/ Ma rc h 2016

Forward ‐ Looking Statement This presentation contains certain forward ‐ looking statements. Forward looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievement of INV Metals to be materially different from any future results, performance or achievements expressed or implied by such forward ‐ looking statements. Such factors include, among others, risks related to the actual results of exploration activities, conclusions of economic evaluations and the industry ‐ wide risks and Loma Larga Project ‐ specific risks identified in the technical report (the “Technical Report”) that summarizes the Preliminary Feasibility Study (the “PFS”), risks associated with mining and mineral exploration activities, uncertainty in the estimation of Mineral Resources and Mineral Reserves, including, without limitation, the assumptions on which such estimates are based, changes in Loma Larga Project parameters as plans continue to be refined, uncertainty surrounding metallurgical test results, future prices of metals, economic and political stability in Ecuador and Canada, the results of discussions with the Ecuador government, the risk of future unfavourable tax law or regulation changes in Ecuador, environmental risks and hazards, increased infrastructure and/or operating costs, availability of future financing, labour and employment matters, and government regulation. There is no guarantee that any drill targets or economic mineral deposits will be found on INV Metals’ properties. For a more detailed discussion of such risks and other factors, refer to INV Metals’ annual information form (the “AIF”) filed with Canadian securities regulators available on www.sedar.com. Except as required by law, INV Metals does not assume any obligation to release publicly any revisions to forward ‐ looking statements contained in this presentation to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. Qualified Persons and NI 43 ‐ 101 Disclosure The technical information in this presentation has been prepared by independent Qualified Persons employed by RPA, including Katharine Masun, P.Geo. (Mineral Resources), Jason Cox, P.Eng. (Mineral Reserves and economics), and Kathleen Altman, Ph.D., P.E. (metallurgy and processing). By virtue of education and relevant experience, the aforementioned are "Qualified Persons" for the purpose of NI 43 ‐ 101. For readers to fully understand the information in this presentation, they should read the Technical Report in its entirety, including all qualifications, assumptions and exclusions that relate to the information set out in the Technical Report which qualifies the technical information contained in the Technical Report. The Technical Report is intended to be read as a whole, and sections should not be read or relied upon out of context. The Technical Report will describe the Mineral Resource and Mineral Reserve estimation methodologies and the assumptions used, and to which those estimates are subject. The Company’s AIF includes details of certain risk factors that could materially affect the potential development of the Mineral Resources and Mineral Reserves and should be considered carefully. A discussion of these and other factors is contained in “Risk Factors” and elsewhere in the Company’s AIF, which was filed on SEDAR on March 11, 2014. Non ‐ IFRS Performance Measures “Adjusted Operating Costs”, “All ‐ in Sustaining Costs”, and “Total Operating Costs per Tonne” are non ‐ International Financial Reporting Standards (“IFRS”) Performance Measures. These performance measures are included because these statistics are key performance measures that management uses to monitor performance. Management uses these statistics to assess how the Loma Larga Project ranks against its peer projects and to assess the overall effectiveness and efficiency of the contemplated mining operations. These performance measures do not have a meaning within IFRS and, therefore, amounts presented may not be comparable to similar data presented by other mining companies. These performance measures should not be considered in isolation as a substitute for measures of performance in accordance with IFRS. 2

E CUADOR R E CE NT POSI T I VE DE VE L OPME NT S  Significant effort has been made since the creation of the Ministry of Mines in early 2015 to advance the mining sector within Ecuador  Positive changes and clarifications in the laws governing mining have occurred since the announcement of the 2015 PFS based on the medium ‐ scale mining category  Recoverability of initial capital investment prior to application of windfall tax and sovereign adjustment  Windfall tax calculation based on 10 year average trailing gold price plus one standard deviation, allowing for CPI inflation adjustments  Recoverability of VAT beginning in 2018, after export sales commence  Thresholds increased on indirect capital gains tax to apply when asset represents >20% of total assets or yearly sales >US$10.8M  Canada has tax treaty  Signing of exploitation agreement (EA) with Lundin Gold 3

L UNDIN GOL D T E R MS OF E A  Definitive form of EA for Fruta del Norte (“FDN”) announced January 2016  Lundin Gold has right to develop and produce gold for 25 years, which may be renewed  Royalty – 5%  Advanced royalty – US$65 million (3 installments, recovery over 5 years)  Income tax – 22%  Profit sharing tax – 15%, includes 3% to employees  Windfall tax – base price 10 yr moving avg + 1 std dev  70% of NSR over revenue at base price  Sovereign adjustment  Cumulative undiscounted investment incurred in development of project since inception plus;  NPV of cumulative free cash flows subsequent to signing EA 4

I NV ME T AL S UPDAT E  Company performed a preliminary economic analysis at a production rate of ~2,500 tpd, applying similar tax assumptions for Loma Larga to those for FDN  Management believes the evaluation of Loma Larga at an increased optimal production rate may produce significantly increased returns dependent on gold and metal price assumptions  Board approved the update of the 2015 PFS to complete the associated engineering and economic studies to evaluate the feasibility and economics of the Project within the large ‐ scale framework, in discussions with consultants  Prepare updated resource estimates  Updated estimations of revenue, capital and operating costs, and mine and reclamation plans  Budget estimated at $500,000  Expected completion Q2/2016 5

OUT L OOK  Continued meetings with Government of Ecuador officials  Complete updated PFS at optimal production levels based on large ‐ scale mining category  Determine appropriate development course for Loma Larga 6

2015 PF S SUMMAR Y  Lead consulting firm RPA (Roscoe Postle Associates)  In association with: • Samuel Engineering (Denver) ‐ Engineering/Construction (mill, process plant, road, power, infrastructure) • Klohn Crippen Berger (Sudbury) ‐ Environment, Social, Tailings, Waste Management, Remediation  All numbers are in USD  NI 43 ‐ 101 Technical Report summarizing the Preliminary Feasibility Study is available on SEDAR  Currently being updated with optimal production rates under large ‐ scale category 7

PF S OPE R AT I NG HI GHL I GHT S Estimated Mine Life 13.25 years Average mine production 948 tpd Average gold mill feed grade 7.67 g/t Average copper mill feed grade 0.46% Average silver mill feed grade 38.38 g/t Tonnes Processed 4.6 million Average gold recovery 90% Average copper recovery 82% Average silver recovery 94% Average annual gold production 80,000 oz Total gold production 1.024 million oz Total silver production 5.3 million oz Total copper production 38.2 million lbs 8

PF S E CONOMI C HI GHL I GHT S Metal Prices Gold $1,350/oz, silver $23/oz and copper $3/lb Adjusted Operating Costs $526/oz Au sold All ‐ in Sustaining Costs $592/oz Au sold Initial Capital Costs $218.9 million Sustaining Capital and Closure Costs $25.8 million Pre ‐ tax IRR 23.2% After ‐ tax IRR 16.0% Pre ‐ tax NPV at 5% $288.4 million After ‐ tax NPV at 5% $153.8 million Pre ‐ tax Payback 3.3 years After ‐ tax Payback 4.4 years 9

T AXAT I ON  PFS economics include: • Corporate income tax rate of 22% • 4% state royalty on metal sales • 12% state profit sharing tax • 3% employee profit sharing tax • Incorporates sovereign adjustment calculation 10

PF S E CONOMI CS PRE ‐ TAX Payback Period 3.3 years IRR 23.2% NPV at 5% discounting $288.4 million AFTER ‐ TAX Payback Period 4.4 years IRR 16.0% NPV at 5% discounting $153.8 million  Further sensitivities on metal prices, costs and discount rates are provided in the Technical Report 11

DE POSI T L OCAT I ON N Loma Larga FDN 12

L OMA L AR GA L OGI ST I CS  Port of Machala used to import all equipment for trucking to site • Port has necessary offloading infrastructure • 165 km from site, average grade 1.91%  Port of Guayaquil to be used for concentrate shipments • 325 km from site  Both ports have excellent infrastructure and container handling facilities  Highway and bridges are sufficient to meet all of the project requirements for both importing equipment and exporting concentrate 13