Corporate Presentation

Transcription

1 Corporate Presentation May 2018

2 Forward Looking Statements This presentation may contain forward-looking statements. These forward-looking statements are made as of the date of the PowerPoint presentation and Lithoquest Diamonds Inc. ( Lithoquest ) does not intend, and does not assume any obligation, to update these forward-looking statements. Forward-looking statements include, but are not limited to, statements with respect to the timing and amount of estimated future exploration, success of exploration activities, expenditures and requirements for additional capital. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such factors include, among others, risks related to actual results of current exploration activities; changes in project parameters as plans continue to be refined; the ability to enter into joint ventures or to acquire or dispose of property interests; future prices of mineral resources; accidents, labour disputes and other risks of the mining industry; ability to obtain financing; and delays in obtaining governmental approvals or financing. 2

3 Snapshot of the Company Lithoquest has assembled a large land-package in Western Australia that is prospective for diamonds Lithoquest has a 100% interest in the property with no underlying royalties Leadership has a history of success in diamond exploration and development Lithoquest has found micro-diamonds in a small sample of outcropping rock Lithoquest is fully funded for its upcoming drill program Rock collected at target NKDP-1605 showing textures consistent with kimberlite 3

4 Corporate Structure Lithoquest Diamonds Inc. (LDI: TSX-V) commenced trading on Nov. 29 th, 2017 Shares I/O 46,041,880 Warrants 1,2 17,466,053 Options 3 3,200,000 Shares F/D 66,707,933 Market Cap Cash Debt: ~C$24m ~C$4.3m Nil Major Shareholders Rosseau Asset Management: 15.2% Eric Sprott: 8.6% Bruce Counts: 8.2% Michael Dufresne 5.0% Medalist Capital 3.6% 1 - All warrants expire November 29 th, Weighted average exercise price of warrants C$ Weighted average exercise price of options C$

5 What Success Looks Like Finding a diamond mine can result in staggering wealth creation Dia Met Minerals had 29% stake in the project that would become the Ekati Diamond Mine Dia Met shares went from C$0.65 to C$65.00 in 18 months based on the discovery of diamonds Dia Met s interest in the Ekati Diamond Mine sold in 2001 for approximately C$800m The Ekati Diamond Mine cost C$900m to build and had a payback period of 18 months Note: This graph shows share price performance similar to Lithoquest s objectives as it advances its North Kimberley Diamond project. It is provided for illustrative purposes only. Actual results may vary 5

6 Qualified Leadership Seasoned leadership with the experience of success in diamonds Role CEO & Director CFO Director Director Director Bruce Counts B.A.Sc., P.Geo. Dwight Walker B.Math, CPA, CGA Gerald Prosalendis B.A. Angela Austman B.A., LLB Lon Shaver B.Comm, CFA Background 25 years international diamond exploration experience 13 years as a director and senior officer of public junior mining companies Participated in the discovery of several kimberlite fields including that which hosts the Ekati Diamond Mine 30 years experience in finance and administration Current CFO of Aston Bay Holdings Ltd. (BAY: TSX-V) Former CFO of ECU Silver Mining Ltd. 20 years as a senior officer of listed junior mining companies Current President & COO of Quaterra Resources Ltd. (QTA: TSX-V) Former VP Corporate Development of Western Silver (sold for $1.6B in 2006) Former VP Corporate Development of Dia Met Minerals (sold for $687M in 2001) 16 years experience advising publicly traded mineral exploration companies on matters of corporate governance, finance and securities law Current Partner at Lawson Lundell LLP 25 years corporate and capital markets experience with a focus on junior mining Former investment banker with Raymond James and Merrill Lynch Held CFO roles with private technology and public diamond exploration companies 6

7 Prospective Region The Kimberley Region hosts two of Australia s three economic diamond discoveries Host to 70% of kimberlites discovered in Australia Home to Argyle Diamond Mine Produces 90% of world s pink diamonds Produced more than 750M carats since operations began in 1983 Location of the past producing Ellendale Diamond Mine During operation produced ~50% of world s fancy yellow diamonds In 2012, yellow diamonds accounted for 15% of production but 80% of revenue 7

8 A Successful Start to 2018 Three micro-diamonds recovered from 10kg sample of rock outcrop at Target 702 in April Micro-diamond result is remarkable since the laboratory process used was not geared toward the recovery of diamond Confirms that diamond bearing rocks are present at Target 702 Target 702 is interpreted to have an area of more than 4ha Target 702 is scheduled for drill testing first with 1,000m of core planned Diamond bearing outcrop at Target NKDP

9 Rising Diamond Prices Rough diamond prices have been increasing in the last 12 months Rough Diamond Price Change (as of 12 May 2018) +1.65% in last 3 months +5.74% in last 6 months +1.57% in the last 12 months +3.41% YTD in 2018 Rough diamond price proxy is the Zimnisky Global Rough Diamond Price Index. More information can be found at 9

10 The Value Proposition There is potential to add significant value to the company in the near term The company is in the early stages of exploration and has already found diamond-bearing rocks on the property The company can evaluate targets for diamonds quickly and cost effectively The company is fully-funded, with a low share count and strong shareholders Management has a significant share position in the company Regular news flow from drilling and exploration results expected in

11 Lithoquest in Australia

12 Australia A Stable Jurisdiction Australia has clear rules and regulations surrounding the acquisition and maintenance of land tenure for mineral exploration and development Secure land tenure Established mining code History of timely mine permitting and development Clear guidelines for working with Aboriginal stake holders Modern health, safety and environmental standards 12

13 Strategic Land Position Lithoquest has acquired land tenure covering a large area in northwestern Australia where there is compelling evidence for new discoveries of diamond bearing rocks Two Exploration Licences (EL s) covering 1,000 km 2 granted and a third EL covering 478 km 2 under application Land positions of this size are rarely available in this region Historically, the presence of competitor EL s prevented the acquisition of large contiguous blocks of prospective land Most of the EL s that were active in the region in 2008 have expired due to the prolonged resource sector downturn Heritage Protection Agreement signed with the Native Party holding Title to lands covered by the Exploration Licences 13

14 Superior Access Lower Costs Established infrastructure translates into lower exploration and developments costs Project is road & tidewater accessible 8 month exploration season Established mining services industry in Western Australia Extensive professional management and labour market with mining expertise Photo: Gravel Road in North Kimberley Region of Western Australia 14

15 Local Evidence of Diamonds Historical exploration demonstrates that the project area is prospective for economic diamond deposits Gem quality macro-diamonds found in historical stream samples throughout the project area, including a 1.73 carat diamond valued at US $740 per carat Diamondiferous Seppelt and Ashmore kimberlites proximal to the project area Seppelt 2 kimberlite has a reported grade of 2.25 carats/tonne 15

16 Kimberlite: Host to Diamonds Volcanic eruptions of kimberlite magma bring diamonds to surface Kimberlite magma originates deep in the earth s mantle Kimberlite volcanoes occur in clusters Kimberlites contain a suite of minerals called Kimberlite Indicator Minerals or KIM s The chemical composition of KIM s indicates the potential for the presence of diamond in a kimberlite Illustration of kimberlite eruption Kimberlite Kimberlite Indicator Minerals 16

17 Discoveries: Compelling Results Rocks recovered on the project have yielded micro-diamonds as well as KIMs with chemistry similar to indicator minerals recovered from Ekati and Diavik Four separate occurrences of apparent (weathered) kimberlite have been discovered on the project Micro-diamonds recovered from sample of outcrop at highest priority target KIMs recovered from composite rock samples collected at each occurrence Chemistry of KIMs recovered indicates favourable conditions for the formation and preservation of diamonds Sizeable topographic features associated with each occurrence Chemistry of pyrope garnets recovered from rock samples collected at Target NKDP

18 Exploration & Development Cycle Lithoquest has the advantage of avoiding the long, dilutive Target Development phase of exploration and moving directly to the Target Testing phase, where significant value can be added Target Development Target Testing Mini-Bulk Sampling Large Bulk Sampling Mining Till Sampling Geophysics Prospecting Drilling Trenching Drilling Trenching Small Scale Mining Targets identified for testing Discovery of kimberlite with significant micro-diamond content Population of valuable macrodiamonds established Feasibility 18

19 Ongoing Discovery Potential Kimberlites occur in clusters. Lithoquest is in the early stages of exploring the property and the potential for additional discoveries is high Lithoquest will continue to identify and evaluate kimberlite targets through: Geophysical and geochemical orientation surveys over the recently identified occurrences to establish target fingerprint Evaluation of high-resolution satellite imagery as well as aeromagnetic and radiometric data acquired over the project Systematic and detailed prospecting of the property to identify additional occurrences of potential kimberlite 19

20 The Plan for 2018 Evaluate the discovered kimberlites for diamonds and identify additional kimberlite targets Exploration Timeline May/18 Sep/ Field Program 2018 Results & Follow-up Target Evaluation & Testing ($2M Budget) Core Drilling Commencing early Q3 Starting at 0702 Prospecting Ground Geophysics Diamond Results from 2018 Drilling Potential Follow-up Field Program Additional Drilling on Discovered Kimberlites Drill Testing of Newly Developed Targets Continued Target Development 20

21 The Future: Diamond Supply Outlook Lithoquest is developing the North Kimberley Diamond Project at time when producers are actively seeking to replace rapidly depleting resources Source: 21

22 Summary Lithoquest has the right elements to create significant value for its shareholders The team with the right experience A project located in a preferred jurisdiction Diamonds discovered in outcrop Management aligned with shareholders Fully funded drill program Regular news flow 22

23 Contact Information Contact Information Office Suite West Hastings St. Vancouver, BC Canada V6E 3X2 Telephone: +1 (778) Photo: Rough Diamonds from the Argyle Diamond Mine 23

24 Appendix A Selected Targets

25 Kimberlite Targets 25

26 Kimberlite Target NKDP Target characterized by 500m x 250m ovoid topographic feature oriented parallel to the dominant structural direction Rock (float) samples with kimberlitic textures recovered at the target Composite rock samples collected at the target yielded KIM s with diamond inclusion chemistry 26

27 Kimberlite Target NKDP Target NKDP-0701 Rock (float) Samples 27

28 Kimberlite Target NKDP

29 Kimberlite Target NKDP Target NKDP-0702 characterized by 100m x 300m topographic colour anomaly located along a structure oriented parallel to regional trend Rocks with kimberlitic textures observed in outcrop, sub-crop and float over 3ha area Composite rock samples collected at the target yielded micro-diamonds and KIM s with diamond inclusion chemistry 29

30 Kimberlite Target NKDP Target NKDP-0702 Rock (float) Sample 30

31 Kimberlite Target NKDP

32 Kimberlite Target NKDP 1603 Target NKDP-1603 characterized by a roughly circular topographic feature 200m in diameter and located adjacent a large regional structure 32

33 Kimberlite Target NKDP 1604 Target NKDP-1604 characterized by 500m x 300m topographic anomaly situated along dominant regional structure One composite rock sample collected at the target in 2017 returned KIM s with diamond inclusion chemistry 33

34 Kimberlite Target NKDP 1605 Target NKDP-1605 characterized by 80m x 150m topographic colour anomaly located adjacent to regional structure Rocks (float and sub-crop) with kimberlitic textures observed over entire area of colour anomaly Composite rock samples collected at the target yielded KIM s with diamond inclusion chemistry 34