(TSX:LFX) RE-IMAGINING LEAD February 2016
FORWARD LOOKING STATEMENTS LEADFX Inc. (“LEADFX”) is a reporting issuer under Canadian securities laws. Certain statements general operating risks such as metal price volatility, lead carbonate concentrate treatment charges, contained in this presentation are forward-looking information within the meaning of securities laws. All exchange rates, health and safety, environmental factors, mining risks, metallurgy, labour and statements included herein (other than statements of historical facts) which address activities, events or employment regulations, government regulations, insurance, dependence on key personnel, the nature developments that management anticipates will or may occur in the future are forward-looking of mineral exploration and development and common share price volatility. Forward-looking statements statements, including statements as to the following: statements relating to the business and future and other information contained in this Presentation concerning the lead and silver industries and our activities of, and developments related to LEADFX , and its subsidiaries after the date of this general expectations concerning the lead and silver industries are based on estimates prepared by us Presentation, including the development of water, lead and silver assets, future business acquisitions or using data from publicly available industry sources as well as from market research and industry transactions, future lead production, construction, commissioning and development of the Burgin Mine or analysis and on assumptions based on data and knowledge of these industries which we believe to be quarrying on the property of Chief Consolidated Mining Company, the timing and length of care and reasonable. However, this data is inherently imprecise, although generally indicative of relative market maintenance at the Paroo Station Mine or Burgin Mine and future sales, future targets and estimates for positions, market shares and performance characteristics. While we are not aware of any misstatements production and sales, LEADFX ’ s ability to meet its working capital needs and debt repayments in the regarding any industry data presented in this Presentation, the lead and silver industries involves risks near term, forbearance by Enirgi Group Corporation pursuant to the amended credit agreements , the and uncertainties and is subject to change based on various factors. Additional factors and considerations are discussed in LEADFX‟s 2014 annual information form dated March 10, 2015, receipt of required additional financing to restart and operate the Paroo Station Mine, the cost and timing for completion of capital projects necessary for any future operations, grades and future lead prices, management information circular September 14, 2015 and elsewhere in other documents filed from time Mineral Resources, Mineral Reserves, life of mine, recovery rates, grades and prices, business to time by LEADFX with Canadian securities regulatory authorities and available on SEDAR at strategies and measures to implement such strategies, competitive strengths, estimated goals and plans www.sedar.com. While LEADFX considers these assumptions to be reasonable based on information for LEADFX‟s future business operations, lead market outlook and other such matters. Forward looking currently available to it, they may prove to be incorrect. These factors may cause the actual results of statements are often, but not always, identified by the use of words such as „„seek‟‟, „„anticipate‟‟, LEADFX to differ materially from those discussed in the forward-looking statements, and there can be no „„contemplate‟‟, „„target‟‟, „„believe‟‟, „„plan‟‟, „„estimate‟‟, „„expect‟‟, and „„intend‟‟ and statements that an assurance that the actual results or developments anticipated by management will be realized or, even if event or result „„may‟‟, „„will‟‟, „„can‟‟, „„should‟‟, „„could‟‟ or „„might‟‟ occur or be achieved and other similar substantially realized, that they will have the expected results on LEADFX. Undue importance should not expressions. These statements are based upon certain reasonable factors, assumptions and analyses be placed on forward-looking information nor should reliance be placed upon this information as of any made by management in light of its experience and perception of historical trends, current conditions other date. Except as required by law, while it may elect to, LEADFX is under no obligation and does not and expected future developments, as well as other factors management believes are appropriate in the undertake to update this information at any particular time. circumstances. However, whether actual results and developments will conform with management‟s All statements, opinions and views contained in this Presentation are solely those of LEADFX and do not expectations is subject to a number of risks and uncertainties, including factors underlying constitute any written or public oral statement of Enirgi Group Corporation or any other third party. management‟s assumptions, such as, expected concentrate sales when in operation, the costs and other capital expenditures required to maintain operations and transportation, the timing, need and ability to raise additional financing and the risks relating to ramping up mining and milling throughput and operations, funding requirements, the restart of mining and milling operations, matters relating to regulatory compliance and approvals, shareholder dilution, regulatory proceedings and litigation and 11/7/2016 2
LEADFX Overview • 100% ownership of the Paroo Station lead carbonate mine in Western Australia • 1.4M tpa capacity lead concentrator placed on care and maintenance in early 2015 • 6.8M tonnes of Proven and Probable Mineral Reserves at 7% Pb 1 • 31.8M tonnes of Measured and Indicated Mineral Resources (inclusive of Mineral Reserves) at 4.4% Pb 1 • Restart ready with robust economics at todays lead prices and Australian dollar • Recently refinanced debt-facility • 83% ownership in Chief Consolidated Mining, a lead-silver project located in Utah anticipated to advance to pre-feasibility stage 1 From NI 43-101 Technical Report on the Paroo Station Mine, Wiluna, Western Australia dated March 10, 2015 prepared by SRK Consulting (Australasia) Pty Ltd. For LEADFX Inc. (formerly, Ivernia Inc.)with an effective date of December 31, 2014. See Notes on Mineral Resource and Mineral Reserve Estimates for further information. 11/7/2016 3 TSX:LFX
Why Invest in Lead? • In the 1980 ‟s and 90 ‟s the mantra “Lead is dead” was a common catch phrase around the resources sector and, as a consequence, little was invested in lead exploration or mine development. • Due to decades of under-investment in exploration, the mining sector is not prepared to meet the demand. There are limited new mine opportunities to replace the rapidly depleting resources. • Many lead-silver mines closed in the period from 1970-1990 due to low metal prices and, in some jurisdictions, increasing regulatory burdens. Many of these dormant mines are now owned by under-capitalized companies. $2.00 450,000 $1.80 400,000 $1.60 350,000 $1.40 300,000 $1.20 250,000 Lead Price (US$/lb) $1.00 200,000 LME Lead Stock $0.80 150,000 $0.60 100,000 $0.40 50,000 $0.20 $0.00 0 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 11/7/2016 4 TSX:LFX
Supply and Demand, Price Forecast • Lead is expected to be in a supply / demand deficit in 2016 as demand rebounds and a portion of current supply is taken off-line. • Lead price forecasts for 2016 are $2,250/t and $2,100/t, respectively, or $1.02/lb and $0.95/lb. 1 LEAD DEMAND LEAD SUPPLY Chinese growth slowing but continuing Confirmed 2015 closures: 70k tpa positive demand outlook between Century Mine (Australia) and Lisheen Mine (Ireland) Asian growth in electric motorcycle No known large lead mines approved battery replacement outside of China to replace supply Global automobile ownership continues to Lead prices will need to increase to grow encourage investment Analysts forecast for global lead demand growth to be 2.5-3.5% CAGR to 2020 2 1 Wood Mackenzie and Metal Bulletin Research, or $1.02/lb and $0.95/lb. 2 UBS Global I/O: Miner‟s Price Review - Dec, 2015 11/7/2016 5 TSX:LFX
Supply and Demand, Price Forecast in Silver • Silver demand is expected to have slight growth in coming years underpinned by robust industrial demand • Supply expected to peak in 2018 due to grade decline and mine closures similar to Lead • Silver average price outlook is around $17.25 in 2016 and $21.00 in 2020 despite the deficit forecast. Price sensitive and the strength in USD will be a drawback for demand in physical silver 1 1 Source: UBS Global I/O: Miner‟s Price Review - Dec, 2015 11/7/2016 6 TSX:LFX
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