February 2018 KURUÇAY ZINC PROJECT

Transcription

1 February 2018 KURUÇAY ZINC PROJECT

2 Disclaimer: The economic analysis contained in this presentation is based, in part, on inferred resources, and is preliminary in nature for the Kuruçay Zinc Project («Project») licenses. Inferred resources are considered too geologically speculative to have mining and economic considerations applied to them and to be categorized as mineral reserves. There is no certainty that the reserves development, production and economic forecasts on which this preliminary assessment is based, will be realised. This presentation contains forward-looking information which may include, but is not limited to, statements with respect to the future financial and operating performance of the Project, the future price of Zinc, the estimation of mineral resources and ore reserves, the realisation of mineral resource and ore reserve estimates, costs of production, capital and exploration expenditures, costs and timing of the development of new deposits, costs and timing of the development of new mines, costs and timing of future exploration, requirements for additional capital, governmental regulation of mining operations and exploration operations, timing and receipt of approvals, licences, and conversions under applicable mineral legislation and environmental risks. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Project to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Forward-looking statements contained herein are made as of the date of this report and the Company disclaims any obligation to update any forward-looking statements or information, whether as a result of new information, future events or results or otherwise. No representation or warranty, express or implied, is given by Artes or any of its advisers, directors, officers, employees or agents, as to the accuracy, fairness or completeness of the information or opinions contained in this report and no liability is accepted for any such information or opinions or for any loss howsoever arising, directly or indirectly, from any use of this document or its contents or information expressed in the report. Use of this report by any party is at that party s sole risk.

3 Kuruçay Zinc Project - Summary Large Zinc resource in eastern Turkey Resource estimate million tonnes ore at 3.65% Zn 4,460 meters geological drilling Mineralisation accessible from the surface 14,500tpa Zinc in-concentrate production capacity plan Ore types amenable to proven floatation process technology Built power and road infrastructure Low initial capital expenditure and production cost Quick pay-back and high returns Upward Zinc price trend Deposit expansion potential within license areas

4 Project Location Kuruçay - İliç - Erzincan 270km totrabzon container port Direct access with State roads Power line direct to plant site

5 Project Geology and Licenses

6 Local Geology and Study Area

7 Mineralisation & Geological Work

8 Outcrop Plane Measurements

9 High Grade Orebody Locations

10 Pit Plans

11 Resource/Reserve Estimate Summary Cut-off (%) Tonnage Grade (%) Zone-1 2.0% 1,992, % Zone-2 1.5% 1,265, % Zone-3 2.0% 774, % Zone-4 1.0% 985, % Zone-5 2.0% 132, % Zone-6 2.5% 632, % Zone-7 1.5% 653, % Total (tonnes) 6,436,497 Average Zn Grade 3.65% Total 6.44 million tonne ore at 3.65% Zn 7 mining areas at 1-2km distance from processing plant 4,460 meters drilled All mineralisations sampled and measured

12 Mining Schedule Years (dmt) TOTAL TOTAL ORE PRODUCTION , , , , , , , , , , , , , ,497 6,436,497 Zone-1 300, , , , ,854 1,992,854 Zone-2 307, , ,786 1,265,932 Zone-3 41, , , ,625 Zone-4 266, , , ,311 Zones , , , ,497 1,417,775 Years (dmt) TOTAL TOTAL WASTE 737,368 1,228,947 1,228,947 1,228,947 2,392,052 3,122,357 3,091,342 2,746,097 2,064,383 1,467,511 1,493,736 1,514,128 1,514, ,347 24,243,289 Zone-1 737,368 1,228,947 1,228,947 1,228, ,016 4,898,225 Zone-2 1,918,037 3,122,357 2,864,986 7,905,379 Zone-3 226,356 2,746,097 1,281,938 4,254,390 Zone-4 782,445 1,467, ,954 2,891,910 Zones ,782 1,514,128 1,514, ,347 4,293,384 Years (%) AVERAGE FEED Zn GRADE 4.56% 4.56% 4.56% 4.56% 3.61% 3.02% 3.05% 3.36% 3.88% 4.35% 3.37% 2.62% 2.62% 2.62% 3.65% Zone % 4.56% 4.56% 4.56% 4.56% Zone % 3.02% 3.02% Zone % 3.36% 3.36% Zone % 4.35% 4.35% Zones % 2.62% 2.62% 2.62%

13 Processing Plant Enrichment tests done at Hacettepe Ore amenable to floatation 500,000tpa processing capacity 80% recovery 50% Zn in concentrate 1km from pit area 3km from process waste storage 1.28ha plant area

14 Environment, Community & Permitting Environmental Baseline Report done and Environmental Impact Assessment (EIA) approval obtained for a small-scale ore production on the Project site License area is barren with no protected fauna or flora Forestry permits for exploration sites obtained Closest villages almost deserted with total registered population of 200 people Çöpler Gold Mine only 25km South has been active for 12 years EIA and Forestry permits to be obtained for the floatation plant operation.

15 Project Layout Project facilities and infrastructure within 2-3 km distances from each other

16 Zinc Market Primary Uses Mostly used in galvanising steel Total Zinc consumption in 2017 was 14 million tonnes Little potential in Alloys sector for substitution

17 Zinc Market - Balance Zinc market registered the third consecutive year of supply deficit

18 Zinc Market - Consumption Zinc consumption has been increasing since 2000

19 Zinc Market - Price Zinc price has been increasing since the beginning of 2016

20 Headline Financial Figures Total Development Cost ($ million) 14.0 Operating Cost ($ million/year) 11 Production Cost ($/tonne milled) 22 Revenue ($/tonne milled) 59 Revenue ($ million/year) 30 Zn concentrate production (tonne/year) 29,024 Zn production (tonne/year) 14,512 Project NPV7 ($ million) 7% 103 Payback (years) 1.0 IRR (%) 115% Life-of-mine (years) 14

21 Project Development Cost Process - Equipment & Machinery Process - Building and Installation Process - EPCM Start-Up Costs 1.4 Owner's Costs 1.7 Finance Costs - Tax - Fees 1.0 Contingency 2.5 TOTAL 14.0

22 Operating Costs Mine Processing G&A TOTAL Annual $ million annual $ per tonne % 44% 45% 11% 100% of which: Total Labour Power Contract Product Transport Process Consumables Others TOTAL Annual $ million annual $ per tonne % 18% 5% 48% % % % %

23 Upside Potential Zinc Resource Expansion Alteration, high chargeability and studied resource zones indicate 152ha of potential mineralisation area to be investigated

24 Upside Potential Western License Mineralisation occurs in the coal member formation (yellow zone) which covers a large portion of the western license

25 Upside Potential Eastern License Tectonic structure continues into eastern license hosting similar faults with mineralisation potential

26