Corporate Presentation

Transcription

1 Corporate Presentation October 2018 Lithoquest.com

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 Not Your Average Explorer Lithoquest has discovered kimberlite in its first drill program 100% owned North Kimberley Diamond Project, Western Australia No underlying royalties 1,500 km 2 Stable jurisdiction with seasonal road, & tide-water access Low share count & strong shareholders Management has a significant share position Leadership has a history of success in diamond exploration and development The Company can evaluate targets for diamonds quickly and cost effectively 3

4 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 4

5 Corporate Structure Lithoquest Diamonds Inc. (LDI: TSX-V) commenced trading on Nov. 29 th, 2017 As at July, 2018 Shares I/O 46,068,547 Warrants 1,2 17,439,386 Options 3 3,360,000 Shares F/D 66,867,933 Market Cap Cash Debt: ~C$11.5m ~C$2.3m Nil Major Shareholders Rosseau Asset Management: 15.2% Eric Sprott: 10.3% Bruce Counts: 8.2% Michael Dufresne 5.0% Medalist Capital 3.6% 1 - All warrants expire November 29 th, Weighted average exercise price of warrants C$ Weighted average exercise price of options C$

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 2018 Kimberlite Discovery: Target 1804 Above: Target 1804 kimberlite drill discovery, September 2018 Kimberlite discovered in first drill program Characterized by coincident ground magnetic & gravity anomalies Lab results expected in Q4 7

8 High Priority Area: Target 702 Results suggest that a kimberlite is located in the target area Micro-diamonds recovered from small rock sample Indicator minerals with high-interest chemical compositions recovered from apparent (weathered) kimberlite rock samples Drilling, trenching and rock sampling completed in Q3/2018 with more than 500kg of rock collected Lab results expected in Q Results of 2018 work will be used to identify drill targets Above: Trench sampling at 702 during Q field program 8

9 Fast-Paced Exploration Success Lithoquest is focused on discovering a world class diamond mine at NKDP Lithoquest has discovered kimberlite and micro-diamonds in its first year of operation Q2/Q Q Q Early Success Continuing the Quest for Discovery 2018 Micro-diamonds Field Program recovered from a small rock sample Kimberlite discovered in first drill program New high-priority drill targets identified Diamond 2018 Results Results from & Follow-up 2018 Drilling Lab results from rock, stream and loam samples Potential Follow-up Field Program Additional drilling on kimberlite Airborne/Ground Geophysics Prospecting Marketing Conferences: Hong Kong, London Marketing Target identification Planning of 2019 field program D i s c o v e r y T i m e l i n e 9

10 Lithoquest in Australia Photo: Lithoquest Camp, NKDP

11 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 11

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 a large land package in northwestern Australia where it has drill-confirmed the presence of kimberlite, the primary source rocks for diamonds Three Exploration Licences (EL s) covering 1,500 km 2 granted Heritage Protection Agreement signed with the Native Party holding Title to lands covered by the Exploration Licences Competitive companies have acquired ground around the NKDP based on early success on the project 13

14 Superior Access Lower Costs Established infrastructure translates into lower exploration and developments costs Project is accessible by seasonal road and is located on tidewater 8 month exploration season Established mining services industry in Western Australia Extensive professional management and labour market with mining expertise Above: Truck mobilizing drill to North Kimberley Diamond Project camp, July

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 Proof of Concept The discovery of kimberlite and four separate occurrences of weathered kimberlite float confirms that the NKDP is prospective for diamonds Kimberlite discovered at target 1804 Micro-diamonds recovered from sample of outcrop at high priority target 702 KIMs* recovered from composite rock samples collected four occurrences separated by kilometres Chemistry of KIMs recovered indicates favourable conditions for the formation and preservation of diamonds *kimberlite indicator minerals 16

17 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: Airborne and ground geophysical surveys Rock, stream and loam sampling Systematic prospecting and geologic mapping Evaluation and interpretation of historical data Above: Lithoquest diamond exploration crew conducting a geophysical survey 17

18 Appendix B About Diamonds

19 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 19

20 The Diamond Exploration Process Target Development Target Testing Mini-Bulk Sampling Large Bulk Sampling Mining Till Sampling Geophysics Prospecting Drilling Trenching Drilling Trenching Small Scale Mining Test for significant microdiamond content Population of valuable macro-diamonds established Feasibility 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 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 22

23 Stay in Touch Contact Information Head Office: Suite West Hastings St. Vancouver, BC Canada V6E 3X2 Telephone: +1 (778) Lithoquest.com Photo: Rock art paintings near NKDP 23