Exploring Diamond Opportunities in Canada. North Arrow Minerals Corporate Update with a focus on the Qilalugaq Diamond Project

Transcription

1 TSXV: TSXV:NAR Exploring Diamond Opportunities in Canada North Arrow Minerals Corporate Update with a focus on the Qilalugaq Diamond Project

2 CAUTIONARY STATEMENT Forward Looking Information This presentation contains projections and forward looking information that involve various risks and uncertainties, including, without limitation, statements regarding the potential extent of mineralization, resources, reserves, exploration results and plans and objectives of North Arrow Minerals Inc. These risks and uncertainties include, but are not restricted to, the amount of geological data available, the uncertain reliability of drilling results and geophysical and geological data and the interpretation thereof and the need for adequate financing for future exploration and development efforts. There can be no assurance that such statements will prove to be accurate. Actual results and future events could differ materially from those anticipated in such statements. These and all subsequent written and oral forward-looking statements are based on the estimates and opinions of management on the dates they are made and are expressly qualified in their entirety by this notice. The Company assumes no obligation to update forward looking statements should circumstances or management's estimates or opinions change. Qualified Person under NI Disclosure of a scientific or technical nature related to North Arrow s projects in this presentation has been reviewed and approved by Ken Armstrong, P.Geo. President and CEO of North Arrow and a Qualified Person under NI

3 THE OPPORTUNITY EXPERIENCED TEAM Successful exploration and development (Aber; Diavik; Lucara; Stornoway; SouthernEra) LEVERAGED EVALUATION - Canadian diamond projects developed over years of exploration by past companies at costs in excess of $40 million dollars SOLID FINANCIAL BACKING - >$18M raised over last three years while maintaining an attractive share structure - ~54.2M shares o/s; ~59.5M shares f/d NEW DISCOVERIES Discovered Canada s newest diamond district at Pikoo Project, SK; Prediscovery projects at Mel, Luxx, Loki and LDG PROJECT PORTFOLIO Seven core project areas PURE DIAMOND PLAY Solely focused on diamond projects located in Canada at a time where diamond fundamentals are robust and predicted to remain so for the foreseeable future 3

4 CORPORATE OVERVIEW as of October 1, 2016 unless otherwise noted Capitalization Listing: Issued: Options: TSX Venture - NAR 54.2 M 4.3 M Warrants: 1.0 M $0.25 & $0.65 Corporate Highlights Fully diluted: 59.5 M Estimated Working Capital: ~$1.1 M (as of Oct 1, 2016) Main Shareholders Management/Directors ~16.5 % Zebra Holdings & Investments ~18.3% controlled by a trust settled by the late Adolf H. Lundin 4

5 CORPORATE OVERVIEW - PEOPLE D. Grenville Thomas (Chairman) Founder of Aber Resources (now Dominion Diamond Corporation), discoverer of the Diavik Diamond Mine and 2009 Canadian Mining Hall of Fame inductee. Ken Armstrong P.Geo.(ON) (President, CEO, Director and Qualified Person under NI ) Diamond exploration and evaluation experience with Diavik Diamond Mines Inc., Aber Resources, De Beers, Navigator Exploration, and Stornoway Diamond Corporation. Management Highlights Christopher Jennings (Director) Founder of SouthernEra Diamonds Inc., consultant to Aber Resources; former positions with International Corona Corp., BP Minerals (Canada) and Falconbridge Ltd. William Lamb (Director) President and CEO of Lucara Diamond Corp., 20+ years project development experience with Lucara, De Beers, Kvaerner and Rand Mines. Blair Murdoch (Director) More than thirty years experience in senior management of private and public companies. Eira M. Thomas (Advisor) Extensive diamond exploration and development experience in Canada and Africa. Former officer and director of Aber; founder of Lucara Diamond Corp and Stornoway Diamond Corporation. Currently director of Suncor and Lucara. 5

6 CORPORATE OVERVIEW PROJECTS Hope Bay Gold (NU) 100% NAR ~10,000 ha on strike from TMAC s Doris Mine Loki (NT) Near Diavik & Ekati mines 100% NAR 2016 till sampling Lac de Gras (NT) Near Diavik & Ekati mines 45/55 JV with Dominion $1.28 M budget for 2016 EKATI DIAVIK GAHCHO KUE VICTOR RENARD Qilalugaq (NU) Big kimberlite on tide water High value fancy Canary diamonds 2017 delineation drilling JV with Stornoway (80% NAR) Mel (NU) KIM targets 100% NAR 2016 till sampling Luxx (NU) Drill ready targets w/ KIM support 100% NAR Pikoo (SK) Diamondiferous kimberlite field JV with Stornoway (~85% NAR) 2016 till sampling Timiskaming (ON) Unsourced KIM trains JV with Stornoway EXISTING DIAMOND MINE 6

7 Jurisdiction- Settled land claim. QILALUGAQ PROJECT, NU View looking south-southwest from Q1-4 kimberlite towards Naujaat Near tide water improved logistics; sealift available estimate freight costs 50% of NWT mines; proximity to workforce. Large tonnage 48.8 million tonnes inferred resource (May 13, 2013)*; all in one deposit means low strip ratio. Good inferred resource grade 53 cpht (Total Recovery; +1 DTC (~+1mm)). Blue sky Inferred resource only to 205m open to depth; 15 additional kimberlite bodies.? Diamond valuation Uncertain. May 2015 valuation challenged by small parcel size and lack of high value stones. Possible Upside rare, fancy Canary colour diamonds. * CAUTION Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability 7

8 QILALUGAQ PROJECT - BACKGROUND : BHP Billiton discovered 8 kimberlites - Extensive till sampling, geophysics, and drilling; 68 DDH, 18 LDRC, diamond testing ~229t from Q1-4 (largest kimberlite discovered). Q1-4 kimberlite : Stornoway acquired 100% interest; more till sampling, geophysics & prospecting; discovered 8 kimberlite dykes; tested ~24.5t from Q : North Arrow partners with Stornoway. 2014: North Arrow collected ~1500 tonne sample of the Q1-4 kimberlite to recover parcel of diamonds for valuation. Naujaat 2015: North Arrow announces valuation results of 383 carat parcel of diamonds. 8

9 QILALUGAQ PROJECT - RESOURCE Q1-4 Inferred Resource Estimate May 2013 resource estimate 1 Inferred Resource = 48.8 Mt, 26.1 Mcts, total diamond content cpht. TFFE 3 = 14.1 to 16.6 Mt, 7.9 to 9.3 Mcts, total diamond content cpht. 1 Mineral resources are not mineral reserves and do not have demonstrated economic viability 2 Defined as 100% recovery of +1 to +23 DTC diamonds 3 Target for further exploration - The potential quantity and grade of the TFFE referred to above is conceptual in nature and it is uncertain whether further exploration will result in the target being delineated as a mineral resource 12.5 ha surface area kimberlite 2014 Bulk Sample Location 9

10 Q1-4 DIAMOND REVIEW Primary Conclusion from the 2015 Valuation: Q /15 Sample ~384 carats from ~1,350 dry tonnes. Valuation results and modelled values should be treated with considerable caution when it comes to assessing the Qilalugaq Project. 1 The parcel was small & complicated by presence of two distinct diamond populations. 1 North Arrow news Release June 9, 2015 reporting results of WWW International Consultants Ltd. valuation. Yellow diamonds having a range of hues and tones were significant. Yellow diamonds make up ~9.0% (stone count) and ~21.5% (carat weight) of parcel. The 3 largest diamonds recovered were yellow: 4.42, 4.16, and 3.53 carats. Q1-4 run of mine from 2014 sample; +9DTC and above. possible low model price of $43 per carat possible high model price of $92 per carat 10

11 Q1-4 DIAMOND REVIEW MAIN QUESTIONS Can yellow rough be polished into desirable diamonds in the gem trade? Do the yellow diamonds represent a distinct population from the white diamonds? If so, does it matter? +11 DTC Q1-4 diamonds from 2014 sample. +9 DTC Q1-4 diamonds from 2014 sample. 11

12 Q1-4 DIAMOND POLISHING AND COLOUR GRADING 0.14 ct fancy vivid orangey yellow (GIA) 0.08 ct fancy intense yellow (GIA) 0.04 ct fancy deep orangey yellow (CGL) Summary 13 diamonds polished with an average yield of 30%. 7 polished from single diamond crystals. 6 derived from a single 4.4 ct diamond. round brilliant cuts maximize brilliance; no impact on colour ct fancy vivid orangey yellow (GIA) 0.05 fancy intense orangey yellow (CGL) 0.04 fancy deep orange yellow (CGL) 0.05 ct fancy intense orangey yellow (CGL) colour graded at Canadian Gem Labs (CGL) and Gemological Institute of America (GIA). Very small diamonds (to 0.02 cts) retain fancy orangey yellow colour unusual for small coloured diamonds. Largest diamond recovered from Q1-4 is a fancy coloured diamond. 12

13 Q1-4 ROUGH TO POLISHED DIAMONDS +11 DTC rough dark yellow inverted cube GIA Certified 0.12 ct fancy vivid 1 orangey yellow brilliant 26% yield +11 DTC rough dark yellow inverted cube GIA Certified 0.14 ct fancy vivid 1 orangey yellow, brilliant 30% yield 1 Fancy Vivid = greatest level of colour saturation = highest value 13

14 Q1-4 ROUGH TO POLISHED DIAMONDS +9 DTC rough yellow cubic diamond GIA & CGL Certified 0.08 carat fancy intense yellow brilliant 36% yield +9 DTC rough dark yellow inverted cube CGL Certified 0.04 carat fancy deep orange yellow 1 brilliant 34% yield 1 Orange yellow = equal orange & yellow = potential for very rare orange diamonds 14

15 POLISHING RESULTS - IMPACT ON VALUE Conclusions from yellow diamond polishing exercise Q1-4 canary diamonds can be polished, are fully saturated fancy colours and would be desirable in the gem trade A Premium Price for Q1-4 fancy colour diamonds is clearly warranted in smaller size classes. The June 2015 possible high diamond price model is reasonable 19

16 TWO SEPARATE DIAMOND POPULATIONS Q1-4 Sample Press Release, May 5, 2015 Yellow diamonds, representing a range of hues and tones, comprise approximately 9.0% by stone count and 21.5% by carat weight of the +1 DTC diamonds recovered to date. Q1-4 Grade/Size Curve Comparative Curves Total Parcel Observations Proportion of yellows increases with increasing diamond size. The yellow diamonds empirically have a coarser population. Dark Yellow only Infrared spectral analyses (FTIR) confirm yellow and non-yellow diamond populations are distinct. 20

17 TWO SEPARATE DIAMOND POPULATIONS Yellow population can be modelled to define 2 distinct scenarios Scenario 1 extrapolate to coarser diamond sizes. Q1-4 Grade/Size Curve Comparative Curves Total Parcel Frequency of yellow diamonds at coarser sizes exceeds the current total parcel model. Scenario 2 extrapolate to diminishing frequency of larger stones. Proportion of yellow/non-yellow diamonds remains the same at coarser sizes. Dark Yellow only 21

18 TWO SEPARATE DIAMOND POPULATIONS June 2015 Price Models Applied to Possible SFD Scenarios: Scenario 1: Applying the June 2015 price models to this outcome results in average price range from just under $100/ct to >$200/ ct. $200/ct is positive for the project. Q1-4 Grade/Size Curve Comparative Curves Total Parcel Scenario 2: Applying June 2015 price models to Scenario 2 results in average price range from <$50/ct to <$100/ct.- not good. Primary Conclusion Dark Yellow only True value of the Q1-4 diamonds is still uncertain but $200/ct would be positive for the project. Cannot confirm or discount either scenario without conducting more sampling. 22

19 FUTURE WORK Project Requires Increased Confidence in: 1. Volume / tonnage 2. Internal Geology 3. Spatial diamond data 4. Recoverable Grade 5. SFD s of diamond Population 6. Diamond Value Critical for PEA Drilling m drilling Bulk Sampling Bulk Sample 1: +700 carats confirm yellow SFD model Bulk Sample 2: carats confirm value +/ % 23

20 NEXT LOGICAL STEPS 2017 DRILLING Drilling Spring / Summer ,500-6,000m of delineation drilling. Increase confidence in tonnage and diamond distribution of the Target for Further Exploration (TFFE). Proving up the TFFE is considered critical for the project. Delineation drilling is the lowest cost critical piece to evaluating Q1-4. Drill arrived at site in October Bulk Sample Location 12.5 ha surface area kimberlite 24

21 NEXT LOGICAL STEPS 2017/18 SAMPLE Bulk Sampling in 2017/18 to learn value of Yellow Diamonds > 1,000 carats required to confirm most likely yellow diamond SFD; Need more carats (2X the 2014 sample size); New, near surface hypabyssal kimberlite confirmed in 2016; Characteristics of kimberlite unit A61a highest grade model unit (77 cpht); Represents new location of potentially higher grade kimberlite for sampling Sample could be collected in Near surface sub-crop of hypabyssal kimberlite

22 PIKOO PROJECT, SK North Arrow (~85%)/Stornoway (~15%) Joint Venture. Good local infrastructure; within 10 km of SK Hwy 911 more than 200 km from nearest kimberlite field (FALC). 10 discrete kimberlites discovered to date. Five tested and proven diamondiferous. PK150 most significant diamond discovery; 1,232 diamonds > mm from 531 kg drill program discovered PK346 and PK347 kimberlites till sample results pending mm stones recovered from initial kg PK 150 sample 27

23 PIKOO PROJECT KIMBERLITE INDICATOR TRAINS Till sampling works; Five discrete trains. Positive samples range from 1 to 100 s of KIM grains. Excellent chemistry - kimberlite indicator minerals are probeconfirmed as derived from diamond stable mantle. PK150, PK346, PK314, PK312 and PK311 all proven to be diamondiferous More discoveries to be made. PK150 (plus PK151 and other dykes) PK314, PK346, PK347 & North Pikoo Dykes PK312 PK311 Probe Confirmed Results pyrope garnets ilmenite eclogitic garnets chromite Bigger circles = more KIM grains = kimberlite 28

24 PIKOO PROJECT 2016 TILL SAMPLING Infill till sampling program focused on 4 areas. All indicator trains require increased sample density: North Pikoo, South Pikoo, PK312 and Bear Lake. PK150 PK347 PK346 PK314 PK312 PK311 Highest priority area remains North Pikoo - high interest KIMs in till no found in known kimberlites Can more diamondiferous kimberlites be found? Bear Lake Probe Confirmed Results pyrope garnets ilmenite eclogitic garnets chromite Bigger circles = more KIM grains = kimberlite 29

25 MEL PROJECT - NU 100% interest in 7,500 hectare property on Melville Peninsula; 140 km south of Hall Beach; 210 km northeast Naujaat. Three to five unique unsourced KIM trains welldefined from over 750 NAR & historic till samples. 2013, 2014, 2015 and 2016 till sampling & prospecting programs have systematically advanced the project. Mel Project Applying for drill permits or

26 MEL PROJECT, NORTHERN TRAIN Northern indicator train is a 15km long multi-sample ribbon- like train up to 2.5km wide. Diverging into multiple narrower trains suggestive of multiple sources. High counts (>100 KIMs) in 2015 samples close to source! Excellent mineral chemistry samples (yellow symbols) will cut off trains. 32

27 LAC DE GRAS PROPERTIES Lac de Gras Property 125,000 ha south of Diavik. 45% North Arrow, 55% Dominion Diamonds. Overburden RC drilling program was funded by Dominion in 2013/14 to earn their 55% $1.28 million exploration budget. Data compilation work (complete in October), airborne geophysical survey (complete pending results) and ground follow up work. Loki Property 100% NAR interest ~7,000 ha Focus on untested target areas related to Monument kimberlite cluster Covers diamondiferous EG05 kimberlite Applications for drill permits underway 33

28 THE WAY FORWARD Project Location Commodity Interest Comment Pikoo Saskatchewan Diamonds ~85% 2016 till sample results; 2017 drilling; Qilalugaq Nunavut Diamonds ~82% 2017 delineation drilling; bulk sample leading to PEA Lac de Gras NWT Diamonds 45% Airborne geophysical survey; target generation Mel Nunavut Diamonds 100% 2016 till sample results; Drill target generation Luxx Nunavut Diamonds 100% Drill permit in hand; Loki NWT Diamonds 100% 2016 till & Esker samples Timiskaming Ontario Diamonds 80% Database evaluation Hope Bay Nunavut Gold 100% JV potential Pikoo 2016 till sampling results; target generation for 2017 drilling. Mel & Loki 2016 till sample results; permitting for drilling. Qilalugaq Drill at site; Phase 1 Prove tonnage; Phase 2 & 3 Prove up SFD, & value. Review funding options to complete this work. 34

29 TSXV: NAR Ken Armstrong President & CEO Nick Thomas Community and Investor Relations Manager Suite West Pender Street Vancouver, BC Canada V6C 1H2 Tel: Fax: northarrowminerals