2018 Continued Exploration Drilling & De-Risking of the Ayawilca Zinc Project in Peru

Transcription

1 2018 Continued Exploration Drilling & De-Risking of the Ayawilca Zinc Project in Peru Tinka Resources Ltd. March 2018 Presentation TSXV & BVL:TK / OTCPK:TKRFF

2 Disclaimer 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 forward-looking 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, 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, timing and completion of any surface rights agreements, 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 Readers Concerning Mineral Resources and Reserves: The standards employed in estimating the mineral resources referenced in this document differ significantly from the requirements of the United States Securities and Exchange Commission (the SEC ) and the resource information reported may not be comparable to similar information reported by United States companies. The term resources does not equate to reserves and normally may not be included in documents filed with the SEC. Resources are sometimes referred to as mineralization or mineral deposits. While the terms mineral resource, measured mineral resource, indicated mineral resource and inferred mineral resource are recognized and required by Canadian regulations, they are not defined terms under standards in the United States and normally are not permitted to be used in reports and registration statements filed with the SEC. The estimation of measured, indicated and inferred mineral resources involves greater uncertainty as to their existence and economic feasibility than the estimation of proven and probable reserves. United States readers are cautioned (i) not to assume that measured or indicated resources will be converted into reserves and (ii) not to assume that estimates of inferred mineral resources exist, are economically or legally minable, or will be upgraded into measured or indicated mineral resources. It cannot be assumed that Tinka will identify any viable mineral resources on its properties or that any mineral reserves, if any, can be recovered profitably, if at all. The terms mineral reserve, proven mineral reserve and probable mineral reserve are Canadian mining terms defined in accordance with National Instrument and the CIM Definition Standards on Mineral Resources and Mineral Reserves. These definitions differ from the definitions in the SEC s Industry Guide 7 and, generally, are not permitted to be used in reports and registration statements filed with the SEC. As such, information contained in this document and the documents incorporated by reference herein concerning descriptions of mineralization and resources under Canadian standards may not be comparable to similar information made public by United States companies in SEC filings. 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 publicly released on November 8, 2017, 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. Readers are encouraged to read the Company s technical report in their entirety. 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

3 Company Highlights TINKA S AYAWILCA PROJECT IS A LARGE AND GROWING ZINC & TIN DISCOVERY IN CENTRAL PERU High-grade zinc discovery at South Ayawilca in 2017 drill intercepts included 52 10% zinc & 15 20% zinc Awarded Explorer of the Year Americas 2017 by Mining Journal Inferred Mineral Resources more than doubled (Nov. 2017): 42.7 million 7.3% ZnEq* containing 5.6 billion pounds zinc metal and 10.5 million 0.70% tin equivalent** High leverage to zinc prices zinc is 82% of ZnEq * 6.0% Zn, 0.2% Pb, 17g/t Ag, 79g/t In ** 0.63% Sn, 0.23% Cu, 12 g/t Ag 2018 CONTINUED EXPLORATION AND DE-RISKING AT AYAWILCA Follow up on discovery at Zone 3 (5 20% Zn) Metallurgical testing for Zinc & Tin Commence engineering and PEA Exploration drilling continues to test repetitions and new zones Ayawilca Technical team with past discoveries in Peru STRONG COMPANY ~C$6 million cash FUNDAMENTALS Strong and growing institutional investor base Supportive communities Peru 3

4 Zinc Inventories Approaching Critical Levels Zinc mine supply has declined due to mine closures (Century, Lisheen) and delays in new projects (e.g. Dugald River) China has been shutting down zinc and lead mines due to safety/environment issues Significant supply deficit (500,000 t) in 2017; Zinc prices are at 11 year highs LME Zinc stock (1,000 tonnes) 1,250 Zinc Price 1, Zinc Inventories Source: Westmetall.com 4

5 Zinc Supply & Demand Total 2016 zinc consumption was 13.5 M tonnes, while production was 12.8M tonnes Growth from increased use of galvanized steel in automobiles and construction in developing nations like China and India Zinc has been used in batteries for decades recent research by Stormcrow Capital estimates that the emerging market for low cost zinc-air batteries for grid energy storage could increase zinc demand by 20 million tonnes Zinc Semi- Manufactures 6% Brass and Bronze 17% Chemicals 6% Zinc Alloying 17% Wood Mackenzie: Lack of Zinc Projects Will Make Replacement of Production Challenging Zinc End Uses Other 4% Galvanizing 50% Source: International Lead and Zinc Study Group (ILZSG) Source: Nexa Resources S.A. 5

6 Market Capitalization TSXV & BVL: TK / OTCPK: TKRFF CAD$ Shares Issued: M Warrants: 14.2 M* 1.8 M at C$0.20 expire Nov M at C$0.45 expire May 2020 Options: Shares reserved: Fully diluted: 9.7 M 0.5 M M Resource Update Market C$0.65/share: C$146 M Cash current: ~ C$6.0 M Drill Results * 7.8 M warrants held by IFC and 3.5 M warrants held by Sentient Major Shareholders: Retail 44% Sentient 25% IFC 12% JPMorgan (UK) 7% Other institutions 10% Analyst Coverage: GMP Securities Ian Parkinson Industrial Alliance George Topping Canaccord Genuity Kevin MacKenzie Mgmt & Directors 2% 6

7 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 at Rio Tinto, Savage, Pasminco Geologist, P. Geo., APEGBC, 20 years global exploration work with Hochschild, AQM Copper, Entrée Gold, Gitennes Javier Escudero HSEC Manager, Peru Health, Safety, Environment, Community & Permits 18 years experience with Goldfields, Rio Tinto, Cia. Minera Antamina Nick Demare CFO, Director CPA, CA, President of Chase Management Inc. since 1991, with extensive board experience Mariana Bermudez Corporate Secretary 20 years experience providing corporate secretarial and regulatory compliance services NON-EXECUTIVE DIRECTORS Pieter Britz Sentient Group representative, professional engineer, over 20 years experience as a mining professional and a mining investment professional Mary Little Ben McKeown Founder Mirasol Resources, geologist, MBA, 20 years in Latin America Mining engineer, MBA, with 25 years experience in mining, oil & gas, and private equity 7

8 Peru A Mining Country Pro-mining country mining accounts for over 50% of exports Peru is a top 3 global producer of zinc, copper, and silver ECUADOR Antamina Ayawilca Project BRAZIL Mineral Rank in World 2016 Latin America 2016 Zinc 2nd 1st Copper 3rd 2nd Central Peru zinc belt Tin 6th 2nd Las Bambas San Rafael Lead 4th 1st Silver 2nd 2nd BOLIVIA Gold 6th 1st * Only large mineral deposits shown Source: US Geological Survey CHILE 8

9 Major Mines in Central Peru Antamina: Largest current copper/zinc mine in Peru Giant Ore Deposit Cerro de Pasco: Largest historic silver/zinc mine in Peru 9

10 Ayawilca Mining Claims Tinka owns 100% of the 150 km 2 contiguous mining claims 1% NSR royalty, can be acquired by Tinka for USD$1 million at any time Other Targets Excellent infrastructure including public roads and high voltage power lines, multiple water sources Supportive local communities (Yanacocha, Huarautambo, and Pillao) Multiple untested targets on property Colquipucro silver mineral resource Ayawilca zinc & tin mineral resource 10

11 Ayawilca Property Highlights Ayawilca is one of most significant zinc discoveries in Peru in the past 20 years One Property, Three Deposits: 1. Zinc Zone (Zn-In-Ag-Pb) Inferred Mineral Resource (Nov. 2017): % ZnEq o Grades: 6.0%Zn, 0.2%Pb, 17g/t Ag, 79g/t In o 5.6 billion pounds of Zinc (2.5M tonnes) o 3,400 tonnes of Indium o 23.3 million ounces of Silver o 209 million pounds of Lead 2. Tin Zone (Sn-Ag-Cu) Inferred Mineral Resource (Nov. 2017): % SnEq o Grades: 0.63% Sn, 0.23% Cu, 12 g/t Ag o 145 million pounds of Tin (66,000 tonnes) o 53 million pounds of Copper o 4.2 million ounces of Silver 3. Colquipucro Silver Oxide (Ag) Deposit Mineral Resource (higher grade lenses): g/t Ag (Indicated) and g/t Ag (Inferred) 11

12 Robust Resource Grade is King Ayawilca is a robust resource due to good geological and grade continuity South and West Ayawilca represent a high-grade core totalling 22.3 million tonnes Nov resource is based on US$1.15/lb zinc price and US$55/t NSR cut-off significant upside potential 13.3 Zinc Zone Inferred Mineral Resources at Ayawilca (Nov. 2017) South West Central East Total Tonnage (Mt) ZnEq (%) Zn (%) Zinc Mineral Resource NSR Cut-off Sensitivity NSR $t/t Cut-off Tonnage (Mt) ZnEq% Grade Zinc % Lead % Indium g/t Silver g/t

13 Ayawilca Zinc Zone Ayawilca Mineral Resource Estimate updated November 8, % increase in Inferred tonnage from May 2016 South Ayawilca zone discovery in 2017 Extension of West Ayawilca Cut-off reduced from US$60/t to USD$55/t Higher zinc and lead prices, lower indium and silver prices Ayawilca Zinc Zone Inferred Mineral Resources: 42.7 Mt grading 7.3% 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 South , , Total , , Notes: 1. Mineral resource estimate at October 10, Base case highlighted ~ US$55/t NSR cut off. Metal price assumptions were US$1.15/lb Zn, US$300/kg In, US$18/oz Ag, US$1.10/lb Pb. Metal recovery assumptions were 90% Zn, 75% In, 60% Ag, and 75% Pb for the ZnEq calculation. 3. The NSR value was calculated using the formula: NSR = Zn(%)*US$15.34+Pb(%)*US$6.15+In(g/t)*US$0.18+Ag(g/t)*US$0.27] 4. The ZnEq value was calculated using the formula: ZnEq = NSR/US$ See Technical Report on the Mineral Resource Estimate for the Ayawilca Property, Department of Pasco, Peru dated December 11, 2017, for details of resource estimates and assumptions (available at or at 6. Inferred Mineral Resources have a great amount of uncertainty as to their existence, and as to their economic and legal feasibility. It is reasonably expected that the majority of Inferred Mineral Resources could be upgraded to Indicated Mineral Resources with continued exploration. 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 or legally mineable. 13

14 Ongoing Drill Program Continues to Find More Zinc 14

15 Ayawilca Long Section Looking Northwest Zinc (Zn) and tin (Sn) zones occur separately Massive replacement bodies within structural zones in South and West Ayawilca with highest grades and greatest thickness Multiple, gently dipping lenses or mantos in Central and East Zones Y Y 15

16 Detailed Sections of Ayawilca Detail of longitudinal Section Y-Y at South Ayawilca West Ayawilca E-E 16

17 Ongoing Exploration Drill Program (on airborne magnetic image) West Ayawilca Valley 2018 Drill Targets Chaucha Zone 3 Central Ayawilca Drill permits granted in February allow up to four years of drilling 20,000 metres drilled since Feb with up to 4 rigs Zone 3: 5 metres grading 20% zinc (Feb 18) 15,000 metres planned for 2018 Drilling program expected to ramp up at the end of the rainy season (Mar-April) South Ayawilca Yanapizgo Rock samples to 19% Pb, 9% Zn, and 500 g/t Ag 17

18 Carbonate Replacement Deposit (CRD) Deposit analogy: Ayawilca versus Cerro de Pasco Similar styles of mineralization, scale (though Cerro more copper) Same host rocks, similar structural positions Cerro de Pasco has a diatreme proximal to mineralization Cerro de Pasco (after Rottier et al, 2016) Source intrusion?? 18

19 Positive Initial Metallurgical Test Results Two composite samples (grading 7% & 10% Zn) were selected for metallurgical testing (Oct. 2016): Coarse grained sphalerite and marmatite 98% recovery of zinc in first pass (rougher) concentrates 52% zinc 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 PEA level test work in progress results expected Q

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) Community Healthcare Education Employment 20

21 Exploration Development Work Programs & News Flow in 2018 De-risk and Advance Ayawilca Metallurgical testing of zinc (lead-silver) & tin Commence engineering studies / PEA in H Continued Exploration to Expand the Mineral Resource 15,000+ metre step-out drill hole planned for 2018 New discovery at Zone 3 in Feb metres grading 20% Zn Milestone Mineral Resource Update Exploration Drilling 20,000 m drilled 15,000 m planned (step-out) Metallurgical Testing Zinc & Lead Tin Engineering & PEA? 21

22 Summary Ayawilca Project Zinc & tin project located in central Peru, a stable mining jurisdiction One of the largest zinc discoveries in Peru in the last 20 years Updated Inferred zinc mineral resource contains 5.6 billion pounds zinc Resource step-out drill program ongoing (20,000m drilled in 2017) 2018: 15,000m drilling planned for resource expansion (up to 3 rigs) Additional metallurgical test work Engineering and PEA Multi-Commodity Exposure Few large Zn deposits coming on stream in near future, strong demand Ayawilca also hosts significant indium, tin, silver, lead Corporate Management team and board of directors with extensive experience and success in Peru Supportive long term shareholders 22

23 APPENDIX Drill Rig Drill Rig Drill Rig A17-56 drill hole first hole in 2017 drill campaign Drilling at South Ayawilca mid

24 Ayawilca Tin Zone Tin is currently trading at US$9.70/lb, approximately 6x the value of zinc Tin is primarily used in tin plated steel, chemicals, solder, and alloys Minsur operates the San Rafael tin mine in Peru and also operates a tin smelter and a tin refinery in Peru Ayawilca is believed to be one of the only other major tin resources in Peru Ayawilca Tin Zone Inferred Mineral Resources NSR US$/t Cut-off Tonnage (Mt) SnEq (%) Sn (%) Cu (%) Ag (g/t) Tin Price (Base Case) Tin Inventories Source: Westmetall.com Notes: 1. Mineral resource estimate at October 10, Base case highlighted ~ US$55/t NSR cut off. Metal price assumptions were: US$9.50/lb Sn, US$3/lb Cu, and US$18/oz Ag. Metal recovery assumptions were: 86% Sn, 75% Cu, and 60% Ag for the SnEq calculation. 3. The NSR value was calculated using the formula: US$NSR = [Sn(%)*US$ Cu(%)*US$39.95+Ag(g/t)*US$0.27]] 4. The SnEq value was calculated using the formula: SnEq = NSR/US$ See Technical Report on the Mineral Resource Estimate for the Ayawilca Property, Department of Pasco, Peru dated December 11, 2017, for details of resource estimates and assumptions (available at or at 6. Inferred Mineral Resources have a great amount of uncertainty as to their existence, and as to their economic and legal feasibility. It is reasonably expected that the majority of Inferred Mineral Resources could be upgraded to Indicated Mineral Resources with continued exploration. 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 or legally mineable. A17-56 drill hole first hole in 2017 drill campaign 24

25 South Ayawilca 2017 Drill Result Highlights Drill hole From (m) To (m) Interval (m) Zn (%) Pb (%) Ag (g/t) Indium (g/t) Date Reported A March 6/17 including March 6/17 including March 6/17 and March 6/17 and * April 3/17 including April 3/17 including April 3/17 A April 3/17 including April 3/17 and April 3/17 including April 3/17 including April 3/17 A October 2/17 including October 2/17 and October 2/17 and October 2/17 and October 2/17 including October 2/17 including October 2/17 All assays are calculated using a zinc cut off grade of 2% Zn over a 6 metre interval. True thickness of the zinc intersections are estimated to be at least 85% of the down hole thickness. 25

26 History and Important Milestones TIMELINE Jul 2014 Aug Jul 2015 Aug Dec 2016 Jan Feb 2018 Feb May 2016 Nov Resource Growth Initial defined Ag Mineral Resource at Colquipucro Initial Inferred Zn Mineral Resource 7.7% ZnEq) Updated Inferred Zn Resource 8.2% ZnEq) Updated Inferred Zn Mineral Resource 7.3% ZnEq*) Zn discovery at Ayawilca in 2012 Ag Ox Mineral Resource (14.3Moz indicated & 13.2Moz inferred) New Tin Inferred Mineral Resource 0.89% Sn) Updated Tin Inferred Mineral Resource 0.70% SnEq**) 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 Drill program commenced Feb ,000m drilled to date and is ongoing Additional met testing commenced Corporate Tinka & Darwin merger July 2014 New CEO and C$5.3M equity investment by Sentient May 2015 C$7.2M financing (Sentient C$2.0M, IFC C$4.5M) Nov C$11M brokered financing completed Listed on the Lima Stock Exchange Coverage from four brokerage firms * 6.0%Zn, 0.2%Pb, 17g/t Ag, 79g/t In ** 0.63% Sn, 0.23% Cu, 12 g/t Ag 26

27 Mineralization Styles ZINC SULPHIDES- matrix replacement of limestones Massive Sphalerite Hole A Galena vein cutting massive Pyrrhotite - Hole A Massive sphalerite (Zn sulfide) TIN MINERALIZATION predates zinc Cassiterite in massive pyrrhotite Zinc replacement of Magnetite Hole A High grade silver with galena and sphalerite in carbonate vein Hole A

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