Ayawilca Zinc Project Peru: Targeting Resource Growth in 2017

Transcription

1 Ayawilca Zinc Project Peru: Targeting Resource Growth in 2017 Corporate Presentation Tinka Resources Ltd. February 2017 OTC: TKRFF

2 Company Highlights The Ayawilca Zinc project is 100% owned by Tinka, at an exploration-development stage and growing: Inferred Resources contain ~3 Billion pounds Zinc Equivalent, open for expansion: 18.8 Million 8.2% Zinc Equivalent; and 5.4 Million 0.89% Tin Equivalent Metallurgy indicates marketable zinc con in early tests Tinka is fully-funded for its next growth phase: 10,000 metre step-out drill program to commence February 2017 New drill permit (good for 3 years minimum) covers threetimes area of previous drill permit with many new targets PEA to follow drill program Compelling valuation in a rising resources market: Zinc price rose 60% in 2016 and tin price rose 45% ~C$73 million market capitalization (TSXV:TK) ~C$12 million cash at end of December 2016 Inferred Resource: 2.45 billion pounds Zn * See slide 9 for complete mineral resource estimate details Peru Ayawilca Technical Team with past successes in Peru: ex Rio Tinto, Savage-Pasminco, Hochschild 2

3 Capitalization and Zinc Peer Comparison Symbols: & OTC: TKRFF Shares Issued: M Warrants: 27.2 M* 12.6 M at $0.30 expire Nov M at $0.45 expire May 2020 Options: Shares reserved: Fully diluted: Market $0.36/share: 14.4 M 0.5 M M C$73 M Cash 31 December 2016: ~C$12 M Major shareholders: Sentient Group 22.4% International Finance Corp. 14.0% JP Morgan Asset Mgmt (UK) 7.3% Other institutions ~8.0% * 15.7 M warrants held by IFC and 6.9 M warrants held by Sentient 3

4 Zinc Price Performance 08/02/ /02/ /03/ /03/ /04/ /04/ /05/ /05/ /05/ /06/ /06/ /07/ /07/ /08/ /08/ /09/ /09/ /10/ /10/ /10/ /11/ /11/ /12/ /12/ /01/ /01/ /02/2017 Zinc prices are up 64% YoY and fundamentals support higher prices Price performance driven by supply constraints and anticipated deficits LME zinc inventories are near 5 year lows Month Metal Price Performance Zinc +64% Nickel +28% Copper +27% Tin +22% Silver +19% Gold +4% -10 4

5 Management & Directors MANAGEMENT Graham Carman Alvaro Fernandez- Baca President & CEO, Director VP Exploration, Peru Geologist, PhD Lihir PNG, 25 years experience in mineral exploration, 15 yrs Peru experience, Ex Rio Tinto, Savage, Pasminco Geologist, P. Geo., APEGBC, Ex Hochschild, AQM Copper, Entrée Gold, Gitennes Javier Escudero HSEC Manager, Peru Health, Safety, Environment, Community & Permits. Ex Goldfields Nick Demare CFO, Director CPA, CA, officer/director, Past President of Chase Management Inc. Mariana Bermudez Corporate Secretary 19 years experience providing corporate secretarial, corporate governance and securities regulatory compliance services NON-EXECUTIVE DIRECTORS David Henstridge Founding director, geologist, 40 years worldwide experience Yanina Barilá Mary Little Sentient Group representative, MBA in finance from Buenos Aires Founder Mirasol Resources, Geologist, MBA, 15 years in Latin America 5

6 Peru A Mining Country Pro-mining country mining accounts for over 50% of exports Former World Bank economist elected as President in July 2016 Ayawilca Project Antamina Mineral Rank in World 2015 Latin America 2015 Zinc 2nd 1st Copper 3rd 2nd Tin 3rd 1st Lead 4th 1st Silver 3rd 2nd Gold 5th 1st Las Bambas San Rafael * Only large mineral deposits shown 6

7 Peru Central Peru Mines Antamina: Largest current Copper/Zinc mine in Peru Cerro de Pasco: Largest historic Silver/Zinc mine in Peru Giant Ore Deposit 50 km 7

8 Ayawilca Mining Claims 150 km 2 mining claims (TK 100%) contiguous, no gaps Untested Targets Infrastructure including public roads, power and water sources nearby Supportive local communities Close to port and rail BHP exploring neighbouring property Silver resource Ayawilca zinc & tin resources 8

9 Ayawilca Zinc Zone Mineral resource updated May 2016 Resource size and grade are comparable to Trevali Mining s producing Santander mine in central Peru (Mineral Resources: 6.26Mt Indicated grading 3.62% Zn, 1.30% Pb and 43 g/t Ag plus 13.85Mt Inferred grading 4.62% Zn, 0.40% Pb and 21 g/t Ag) 2017 drill program targeting resource expansion step out drilling and testing of large targets identified by soil sampling and geophysics Ayawilca Zinc Zone Inferred Mineral Resources: 18.8 Mt grading 8.2% ZnEq Area Tonnage (Mt) ZnEq (%) Zn (%) Pb (%) In (g/t) Ag (g/t) Zn (Mlb) Pb (Mlb) In (000 kg) Ag (Moz) West Central , East Total , , Notes: 1. Mineral resource estimate at May 25, Base case highlighted ~ US$60/t NSR cut off (5% ZnEq) 3. See NI report dated June 26, 2016, for details of resource estimates and assumptions 4. Inferred Mineral Resources have a great amount of uncertainty as to their existence, and as to their economic and legal feasibility. It cannot be assumed that all or any part of an Inferred Mineral Resource will ever be upgraded to a higher category. United States investors are cautioned not to assume that all or any part of Measured or Indicated Mineral Resources will ever be converted into Mineral Reserves. United States investors are also cautioned not to assume that all or any part of an Inferred Mineral Resource exists, or is economically mineable. 9

10 Ayawilca Property Highlights Ayawilca is one of most significant zinc discoveries in Peru in the past 20 years Rich mineral endowment, resource remains open with extensions untested One Property, Three Deposits: 1. Zinc Zone (Zn-In-Ag-Pb) Inferred Mineral Resource (May 2016): % ZnEq o 2.45 billion pounds of Zinc (1.1M tonnes) o 1,385,000 kilograms of Indium o 8.8 million ounces of Silver o 82 million pounds of Lead 2. Tin Zone (Sn-Ag-Cu) Inferred Mineral Resource (May 2016): % SnEq o 90 million pounds of Tin (41,000 tonnes) o 37 million pounds of Copper o 3.1 million ounces of Silver 3. Colquipucro Silver Oxide (Ag) Deposit Mineral Resource (higher grade lenses): g/t Ag (Indicated) and g/t Ag (Inferred) 10

11 2017 Drill Program Focus on High-Grade Drilling to initially focus on extensions of the West Ayawilca chimney o o o o Thickest portion of the deposit up to 213 metres Highest grades of Zn, to date Near surface, potential for adit access for exploration and extraction Mineralized extensions open, down dip and along strike Drill Hole West Ayawilca Drill Intercept From (m) To (m) Interval (m) Zinc (%) Lead (%) Silver (g/t) Indium (g/t) A including including and mRL West Ayawilca 4200mRL 4000mRL Central Ayawilca Sandstone 4000mRL 3800mRL open East Ayawilca 3800mRL Limestone 3600mRL Zinc Zone Tin Zone 500m Phyllite 3600mRL 11

12 Milestones and Outlook TIMELINE Jul 2014 Aug Jul 2015 Aug Dec 2016 Jan Dec 2017 Jan 2018 Dec 2018 Jan 2019 Dec 2019 Feb May 2016 Resource Growth Initial defined Ag resource at Colquipucro Zn discovery at Ayawilca in 2012 Initial Inferred Zn Resource 7.7% ZnEq) Ag Ox Resource (14.3Moz indicated & 13.2Moz inferred) Updated Inferred Zn Resource 8.2% ZnEq); and New Tin Inferred Resource 0.89% Sn) Resource update expected Q TBD TBD Work Activity 11,000m drilled for Zn and 6,000m drilled for Ag 6,000m drilled for Zn and 2,000m for Ag 9,000m drilled for Zn & Sn Airborne magnetics & initial Zn metallurgical tests 10,000m drill program Feb Aug 2017 Met tests PEA* PFS * PFS / FS * Tinka & Darwin merger July 2014 May 2015 Nov Corporate New CEO and C$5.3M equity investment by Sentient C$7.2M financing (Sentient C$2.0M, IFC C$4.5M) C$11M brokered financing completed Fully funded for 2017 programs * Subject to exploration results 12

13 Large Zinc Resource with Exciting Potential Previous Ayawilca drill permits expired in January 2016 Previous drill permit boundaries constrained resource extensions, especially to the south and east No drilling took place in : Mineral resource estimate updates, completion of four-year access agreements with three communities, property-wide geophysics New drill permit area triple the previous size 2017: 10,000 metre drill program to commence February 2017 Ayawilca Zinc Zone looking south Zinc mineralization remains open in various directions: extensions of resource to be drilled along with several new targets Extensions Open 13

14 Airborne Magnetic Anomaly Map (RTP) Chaucha Drill Permit Area Size Extended 3X Prospective area only ~30% drilled Drill testing to recommence early 2017 Valley Priority Untested Targets Priority Step Out Drilling Zone 3 Ayawilca South 14

15 Gravity Anomaly Map Chaucha Drill Permit Area Size Extended 3X Prospective area only ~30% drilled Drill testing to recommence early 2017 Valley Priority Untested Targets Priority Step Out Drilling Zone 3 Ayawilca South 15

16 Ayawilca District Schematic Cross Section Porphyry intrusion found at Los Pinos, 3 kilometres from edge of Zinc Zone Opens up large area for drill testing, including untested anomalies at Zone 3 & Chaucha 16

17 Positive Initial Metallurgical Test Results Two West Ayawilca composite samples (grading 7% & 10% Zn) were selected for metallurgical tests (Oct 2016): >98% recovery of Zn in first pass (rougher) concentrates 52% Zn concentrate grade produced in second pass (cleaner) concentrates Low manganese levels Indium reported to the zinc concentrate (150 & 600 ppm In), believed to be payable levels Mineralogy of concentrates suggests further improvements will occur with flowsheet optimization 17

18 Proposed Exploration Program Milestone Zinc Zone Resource Upgrade Tin Zone Resource Silver Zone Review Geophysics Metallurgical tests Drilling* Extend drill permits PEA/PFS* *subject to results/financing Drilling to commence February

19 Silver Mineral Resource - Colquipucro Class/Zone Tonnage (Mt) Ag (g/t) Ag (Moz) Indicated High Grade Lenses Low Grade Halo Total Indicated Inferred High Grade Lenses Low Grade Halo Total Inferred ,003 metres drilled in 45 holes ( ) Notes: : Resources estimated by Roscoe Postle Associates Inc. (RPA) of Toronto, Canada (news release of May 25, 2016). Mineral Resources are reported within a preliminary pit shell and above a cut-off grade of 60 g/t Ag for High Grade Lenses, and 15 g/t Ag for Low Grade Halo. The cut-off grade is based on a price of US$24/oz Ag. Refer to NI report dated June 29, 2016 for details of resource estimates and assumptions. 19

20 Community & Environment Ongoing partnerships with three communities - employment and training Social engagement and sustainable development programs throughout the project area, fostering long-term relationships Working under IFC s guidance to implement best practices in Health, Safety, Environment and Community (HSEC) Training programs Animal health Road and drill platforms 20

21 Summary One of the largest zinc discoveries in Peru in the last 20 years Zinc / tin resources expected to continue to grow in 2017 with drilling Silver oxide deposit with higher grade portion grading over 100g/t Project located in Peru, a stable and mining friendly political jurisdiction Company promotes sustainable development opportunities Zinc price forecast to increase further with continued Asian demand & tight supply Experienced Management Team and Board Supportive long term shareholders (Sentient, IFC, JP Morgan UK) Low valuation relative to zinc and silver peers 21

22 APPENDIX 22

23 Zinc Market Supply Zinc mine supply has declined - Century Mine, Lisheen Mine, other Glencore mines shut down ~ 6% of world Zn production removed China shut 26 zinc-lead mines in August 2016 due to safety and environmental concerns Smelters are facing a shortage of zinc concentrates - spot treatment charges (TCs) have fallen from over $200/t to $40/t Zinc Market in Deficit 23

24 Ayawilca Inferred Mineral Resources (May 25, 2016) Zinc Mineral Resource: 18.8 Mt grading 8.2% ZnEq ZnEq% Cutoff Tonnage (Mt) ZnEq% Grade Zinc % Lead % Indium g/t Silver g/t Tin Mineral Resource: 5.4 Mt grading 0.89% SnEq SnEq% Cut-off Tonnage (Mt) SnEq% Grade Tin % Copper % Silver g/t Notes: Base cases (highlighted) are reported at cut-off grade of 5% ZnEq and 0.45%SnEq, respectively (~US$60 per tonne NSR value). Metal price assumptions were US$1.00/lb Zn, US$9/lb Sn, US$3/lb Cu, US$500/kg In, US$20/oz Ag, US$1.00/lb Pb. Metal recovery assumptions were 90% Zn, 75% In, 50% Ag, and 75% Pb for the ZnEq calculation, and 85% Sn, 75% Cu, and 50% Ag for the SnEq calculation. Refer to NI report dated June 29, 2016, for details of resource estimates and assumptions. 24

25 Mineralization I - Zinc Replacement of Limestone Sphalerite in fractures and matrix replacement Massive sphalerite (Zn sulfide) A14-24 Massive Py-Sph in limestone; 350 m depth 25

26 Mineralization II - Tin-Copper Mineralization Massive pyrrhotite with disseminated ~1% tin, 0.3% Cu Central Zone Tin Intercept Drill Hole From (m) To (m) Interval (m) Tin (%) Copper (%) Silver (g/t) A including including A including

27 Important Information This presentation is not directed to, or intended for distribution to or use by, any person or entity that is a citizen or resident or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation or which would require any registration or licensing within such jurisdiction. This presentation does not constitute or form a part of, and should not be construed as an offer, solicitation or invitation to subscribe for, underwrite or otherwise acquire, any securities of Tinka, nor shall it or any part of it form the basis of or be relied on in connection with any contract or commitment whatsoever. Certain information in this presentation contains forward-looking statements and forward-looking information within the meaning of applicable securities laws (collectively "forward-looking statements"). All statements, other than statements of historical fact are forwardlooking statements. Forward-looking statements are based on the beliefs and expectations of Tinka as well as assumptions made by and information currently available to Tinka's management. Such statements reflect the current risks, uncertainties and assumptions related to certain factors including but not limited to, all costs varying significantly from estimates, production rates varying from estimates, changes in metal markets, changes in equity markets, the proposed use of net proceeds from private placements, availability and costs of financing needed in the future, equipment failure, unexpected geological conditions, imprecision in resource estimates or metal recoveries, ability to complete future drilling programs, drilling program results varying from expectations, delays in obtaining survey results, success of future development initiatives, the completion and implementation of a preliminary economic assessment, pre-feasibility or feasibility studies, competition, operating performance, environmental and safety risks, delays in obtaining or failure to obtain necessary permits and approvals from local authorities, community relations, and other development and operating risks. Should any one or more of these risks or uncertainties materialize, or should any underlying assumptions prove incorrect, actual results may vary materially from those described herein. Although Tinka believes that assumptions inherent in the forward-looking statements are reasonable, forward-looking statements are not guarantees of future performance and accordingly undue reliance should not be put on such statements due to the inherent uncertainty therein. Except as may be required by applicable securities laws, Tinka disclaims any intent or obligation to update any forward-looking statement. Cautionary Note to United States Investors: This Presentation uses the terms Measured, Indicated and Inferred Resources. United States investors are advised that while such terms are recognized and required by Canadian regulations, the United States Securities and Exchange Commission does not recognize them. Inferred Mineral Resources have a great amount of uncertainty as to their existence, and as to their economic and legal feasibility. It cannot be assumed that all or any part of an Inferred Mineral Resource will ever be upgraded to a higher category. United States investors are cautioned not to assume that all or any part of Measured or Indicated Mineral Resources will ever be converted into Mineral Reserves. United States investors are also cautioned not to assume that all or any part of an Inferred Mineral Resource exists, or is economically mineable. The Mineral Resources disclosed in this company presentation were estimated by Mr. David Ross, P.Geo., an employee of Roscoe Postle Associates Inc. (RPA) and is independent of Tinka. The Zinc /Tin Mineral Resources were publically released on May 25, 2016, while the Silver Resources were released on Feb 26, By virtue of his education and relevant experience, Mr. Ross is a "Qualified Person" for the purpose of National Instrument The Mineral Resources have been classified in accordance with CIM Definition Standards for Mineral Resources and Mineral Reserves. This presentation has been prepared, reviewed and verified by Dr. Graham Carman, Tinka s President and CEO and a Fellow of the Australasian Institute of Mining and Metallurgy, a qualified person as defined by NI

28 Tinka Resources Limited Suite West Georgia St Vancouver, BC V6E 3V7 CANADA CORPORATE OFFICE Ph: Fax: FOR MORE INFORMATION Dr. Graham Carman, President & CEO Rob Bruggeman, Investor Relations 28