TSXV & BVL:TK OTCPK: TKRFF 2018: Growing & De-risking the Ayawilca Zinc Project in Peru

Transcription

1 TSXV & BVL:TK OTCPK: TKRFF : Growing & De-risking the Ayawilca Zinc Project in Peru Corporate Presentation June 2018

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 should not be assumed that further work on the stated resources will lead to mineral reserves that can be mined economically. 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 TINKA S AYAWILCA PROJECT IS A LARGE AND GROWING ZINC DISCOVERY IN PERU 2018 CONTINUED EXPLORATION AND DE-RISKING AT AYAWILCA Company Highlights Large high-grade zinc discovery, still growing Inferred Mineral Resources doubled in 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 Zn is 82% of ZnEq 15,000m of drilling planned in 2018 to expand zinc zones and test new targets Three drill rigs now operating Metallurgical test work results for Zn by end Q2 PEA by end Q * 6.0% Zn, 0.2% Pb, 17g/t Ag, 79g/t In ** 0.63% Sn, 0.23% Cu, 12 g/t Ag STRONG COMPANY FUNDAMENTALS Technical team with past discoveries in Peru C$18 million cash fully funded to expand resources and advance to PFS phase Strong institutional investor base Great mining jurisdiction with supportive local communities Ayawilca Peru 3

4 Zinc Inventories Approaching Critical Levels Zinc mine supply has declined due to mine closures (Century, Lisheen) and delays in new projects China shutting down zinc and lead mines due to safety/environment issues Significant supply deficit (500,000 t) in 2017 LME Zinc stock (1,000 tonnes) 1,250 1,000 Zinc Price 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 in galvanized steel used in automobiles and construction by 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 new 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 CAD$ Analyst Coverage: GMP Securities Ian Parkinson Industrial Alliance George Topping Canaccord Genuity Kevin MacKenzie TSXV & BVL: TK OTCPK: TKRFF Shares Issued: Warrants: Options: Shares reserved: Fully diluted: 260 M 31 M 16 M 0.5 M 307 M Major Shareholders: Sentient 25% Retail 42% IFC 12% JPMorgan (UK) 7% Other institutions 13% Market C$0.50/share: Cash current: C$130 M C$18 M 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 Ben McKeown Pieter Britz Chairman of the Board: Mining engineer, MBA, with 25 years experience in mining, oil & gas, and private equity Sentient Group representative, professional engineer, over 20 years experience as a mining professional and a mining investment professional Mary Little Founder Mirasol Resources, geologist, MBA, 20 years in Latin America 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 large mining claim block: 150 km 2 contiguous land package Other Targets Good infrastructure including public roads, and high voltage power lines, and water sources 7 hour drive to coast on well formed public roads Supportive local communities (Yanacocha, Huarautambo, and Pillao) Colquipucro silver mineral resource Ayawilca zinc & tin mineral resource 10

11 Ayawilca Zinc Zone Ayawilca Mineral Resource Estimate updated November 8, % increase in Inferred tonnage from May 2016 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$0.18+Ag(g/t)*US$ 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 are that part of a Mineral Resource for which quantity and grade or quality are estimated on the basis of limited geological evidence and sampling. Geological evidence is sufficient to imply but not verify geological and grade or quality continuity. An Inferred Mineral Resource has a lower level of confidence than that applying to an Indicated Mineral Resource and must not be converted to a Mineral Reserve. 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 cautioned not to assume that further work on the stated resources will lead to mineral reserves that can be mined economically. 11

12 Drill Program Three Drills Active Current drill targets 12

13 Recent Drilling Extending West Ayawilca 13

14 West Ayawilca New Drill Results in 2018 Drill intersections in holes A and A have extended the West Ayawilca zinc zone by at least 150 metres Mineralization remains open Drill hole From (m) To (m) Interval (m) Zn (%) Pb (%) Ag (g/t) Indium (g/t) Date Reported A April 25, 18 including and April 25, 18 including including including A * May 24, 18 and * May 24, 18 and May 24, 18 including including including including including True thickness of the zinc intersections are estimated to be at least 85% of the down hole thickness, except in veins marked with * which have an unknown true thickness 14

15 Ayawilca Long Section Massive replacement bodies, on scale of hundreds of metres Multiple, gently dipping lenses ( mantos ) which can be up to 200 m thick 15

16 Detailed Sections of Ayawilca South Ayawilca West Ayawilca 16

17 Carbonate Replacement Deposit (CRD) Deposit analogy: Ayawilca versus Cerro de Pasco Similar styles of mineralization (though Cerro has more copper) Same host rocks, similar structural positions Ayawilca is covered by a sandstone unit which acted as a seal to Zn Cerro de Pasco (after Rottier et al, 2016) Source intrusion?? 17

18 Positive Initial Metallurgical Test Results PEA level test work in progress results expected by end of Q Two composite samples (grading 7% & 10% Zn) were selected for metallurgical testing (Oct. 2016): Coarse grained marmatite and sphalerite 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 18

19 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) 19

20 Exploration Development 2018 Work Program Fully Funded Continued Exploration to Expand the Mineral Resource 15,000+ metre step-out drill program ongoing New discoveries at Zone 3 in Feb % Zn) and 100 m step-out 9.2% Zn & 12.8% Zn) De-risk and Advance to a PEA Metallurgical testing of zinc (lead-silver) by end of Q2 Engineering studies/pea by end of Q4 Milestone Mineral Resource Update Exploration Drilling 20,000 m drilled 15,000 m planned (step-out) Metallurgical Testing Preliminary Economic Assessment 20

21 Summary Ayawilca Project Zinc project located in central Peru, a stable mining jurisdiction One of the largest discoveries in Peru in the last 20 years Inferred zinc mineral resource contains 5.6 billion pounds zinc 2018: 15,000m drilling planned for resource expansion (3 rigs) Metallurgical test work 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 21

22 APPENDIX 22

23 Ayawilca Magnetic Anomalies West Ayawilca Valley 2018 Drill Targets Chaucha Zone 3 Central Ayawilca Drill permits granted in February allow up to four years of drilling Over 20,000 metres drilled since Feb ,000 metres planned for current program in 2018 Three drill rigs active May 18 Zone 3: 5.0m grading 20% zinc (Feb. 2018) West Ayawilca step-out: 19.3m grading 9.2% zinc and 14.4m grading 12.8% zinc (Apr. 2018) South Ayawilca Yanapizgo Rock samples to 19% Pb, 9% Zn, and 500 g/t Ag 23

24 Ayawilca Tin Zone Tin is currently trading at US$9.65/lb, approximately 6.5x the value of zinc Tin is primarily used in tin plated steel, chemicals, solder, and alloys Minsur operates the San Rafael tin mine in Peru and also operates a tin smelter and a tin refinery in Peru Ayawilca is believed to be one of the only other major tin resources in Peru Ayawilca Tin Zone Inferred Mineral Resources NSR US$/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 Apr 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 three brokerage firms Raised C$16M through equity financings * 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