August 14, 2018 Hope Bay Site Visit. Doris Mine and Plant

Transcription

1 August 14, 2018 Hope Bay Site Visit Doris Mine and Plant

2 Caution Regarding Forward-Looking Information Attendees are cautioned that we will be making forwardlooking comments. To fully understand the risks inherent in our comments, forecasts and estimates you are encouraged to read our Management Discussion and Analysis for the second quarter ended June 30, 2018 together with our Financial Statements for the same period. 31

3 Participants Jason Neal President & Chief Executive Officer Gil Lawson Chief Operating Officer Mike Samuels Senior Director, Metallurgy Dave King Vice President, Exploration Ann Wilkinson Vice President Investor Relations 32

4 Strategic Overview Building Momentum Operating team in place Recovery improvement from 71% in Q1 to 82% in Q2 June (85%) better than May (83%) Successful ramp up of plant to 2,000 tpd capacity Mine positioning for mining in Hinge and Crown Pillar recovery in Q3 Improved operations will drive positive AISC margin NIRB recommendation that Madrid-Boston Project be permitted to proceed sent to Crown-Indigenous Relations and Northern Affairs Canada Strategic analysis and planning for higher risk-adjusted returns and value on Madrid and Boston development A return to exploration driven growth 33

5 Senior Management Jason Neal President & CEO Gil Lawson COO Maarten Theunissen CFO Ron Gagel EVP, Corporate Affairs Julia Micks EVP, Human Resources Oliver Curran VP, Environmental Affairs David King VP, Exploration Ann Wilkinson, VP, Investor Relations Mike Samuels S Director, Metallurgy Dan Redmond Dir, Strategic Mine Planning Dan Gagnon General Manager Jerome Girard Asst. General Manager 34

6 Senior Management Dan Gagnon General Manager Jerome Girard Asst. General Manager Ron Bertrand Surface Operations Manager Kelly Schwenning Manager, Projects Chad Parent Process Plant Manager Doug Brown Health and Safety Manager Jason Nickel Mining Manager 35

7 Near-Term Priorities - Operational Operations Complete sealift in Q3 Processing Q3 recoveries targeting mid-80s% Q3 installation of additional gravity concentrators in mill to achieve 90% recovery in Q4 Mining - Ramp up production Development More efficient mining blasting, dilution control Crown pillar recovery Q4 Complete exploration program and prepare for increased exploration activity 6

8 Key Financial Metrics Q Conference Call Q1-18 Q2-18 Gold Sold (ounces) 19,540 25,760 Revenue (C$ millions) Realized Gold Price (US$/oz) 1,332 1,300 Cash Costs (US$/oz) 1, AISC (US$/oz) 1,807 1,642 Cash flow from Operating Activities (C$ millions) EBITDA (C$ millions) (3.5) 4.9 Capital Expenditures (C$ millions) Unrestricted Cash Balance (C$ millions) Restricted Cash Balance (C$ millions)

9 C$ millions Gold Sold (oz) Growing Toward Positive AISC Margin AISC US$1,624/oz 36,000 33, AISC US$1,807/oz 30,000 27, AISC US$1,870/oz 24,000 21, , , , US$1,228/oz US$1,049/oz US$928/oz 9,000 6, ,000 - Q Q Q Cash cost (Opex) Corporate G&A UG development Sustaining CAPEX Revenues Gold sold (Y2) 8

10 Debt Facility Summary Principal Amount US$160 million No gold hedging required Interest Rate 6.5% per annum plus greater of US$ 3-mth LIBOR, and 1.0%, compounded and payable quarterly Payments US$6.5 M Quarterly October 31, 2018 July 31, 2020 US$30M Bullet January 31, 2019 US$5.5M Quarterly October 31, 2020 April 30, 2022 Maturity Date July 31, 2022 Bullet payment of unpaid balance 9

11 Diesel Purchase and Storage Arrangement PROCEDURE 1. Macquarie steps into TMAC s current fuel purchase and delivery contract 2. Macquarie rents tanks from TMAC 3. TMAC will purchase the fuel from Macquarie as it draws fuel from Roberts bay tanks KEY TERMS / FEATURES Macquarie owns the fuel No security required not debt Price = Cost of contract + Premium Converts inventory working capital to cash 10

12 Environmental Bonding Product Letter of credit agreement Letters of credit CIRNA Insurance Company Demand Bond Letters of credit KIA 11

13 Madrid-Boston Project Permitting Milestone Significant permitting milestone: June 26, 2018, Nunavut Impact Review Board recommended to the Minister of Crown-Indigenous Relations and Northern Affairs Canada that the Madrid-Boston Project proceed. Final Hearing Report is very supportive of TMAC s proposal with recommend terms and conditions that offer operational flexibility with respect to how we implement our environmental programs and mitigations. Madrid-Boston Project includes 3 new mines, extensive infrastructure and belt wide production of 6,000 tonnes per day. Next step in the permitting process is for the Minister to approve NIRB s recommendation, allowing NIRB to issue TMAC a new Project Certificate for the Madrid and Boston mines. Following the Minister s approval, the Nunavut Water Board will give notice of the final hearing date for TMAC s Type A Water Licence applications. NWB Technical meetings and the Pre Hearing Conference have been completed with no outstanding technical issues. For those of us in this region, we are also in support of the mining company, TMAC. We would like to see them continue. We are in support of TMAC. We were able to ask questions. We were given clear and concise responses from the company. We would like to see the Hope Bay project go ahead in the communities in our region. They have really contributed to the Kitikmeot communities a great deal, and they are very supportive of the students completing their education, and they've also recognized the students trying to finish their education. -Taloyoak Statement from Final Hearing We are in support of the mine. We would like to see the company given the greenlight. The way I see it, it's going to help our economy and Canada as a whole. I am thankful to the Government of Nunavut and the Government of Canada and the Kitikmeot Inuit Association as well. I see it as a benefit to everyone, ensuring that they have protection plans in place and to implement the protection plan of the environment Kugaaruk Statement from Final Hearing 12

14 Near-Term Priorities Plant capacity consistently at 2,000 tpd Q3 recoveries back to mid-80s% Q3 installation of additional gravity concentrators in mill to achieve 90% recovery in Q4 Ramp up mine production and development Complete current exploration program and prepare for increased exploration activity Secure Madrid-Boston Project Certificate by Q and Water Licences by Q2-19 Advance analysis of optimized Hope Bay Belt development 13

15 Operations Doris Mine and Plant 14

16 Safety & Health We remain lost time injury free for days LTI free and 10 days Medical Aid free 1 Medical Aid in 2018 Focus is on safe operating procedures and personnel training 15

17 Key Operating Metrics Q1-18 Q2-18 Jul-18 Processing Mining Throughput (t) 83,600 (928 tpd) 88,300 (970 tpd) 31,500 (1,016 tpd) Processed Grade (g/t) Recovery (%) Gold produced (oz) 20,650 23,140 6,660 Gold poured (oz) 18,870 25,970 5,450 Ore (t) 82,600 68,900 27,300 Waste (t) 72,300 80,700 25,300 Total (t) 154, ,600 52,600 Average grade (g/t)

18 Gold produced (ounces) US$/oz Key Financial Metrics 25,000 2,200 20,000 1,900 15,000 1,600 10,000 1,300 5,000 1,000 - Q Q Q Q Q Q Gold Produced AISC (US$/oz) Cash Cost (US$/oz)

19 Plant Performance June Gravity gold recovery from ~ 50% to refinery The Plant processed 26,000 tonnes with an overall recovery of 85% Initial feed to CL2 and commissioning dual concentrator lines Challenges seen in solutions and concentrate management on CTP side resulting in seven days of down days (<400 tonnes processed) Confidence to proceed with expenditures related to additional gravity concentrators 18

20 Plant Performance July Experienced water balance issues and several mechanical failures in oxygen generator, detox mixing tank and detox filter press that affected recovery and throughput Ten down days in month (<400 tonnes processed) including three day scheduled shutdown for power plant and distribution system 31,500 tonnes processed at 75% recovery Learning to balance concentrates and solutions management running the twin lines CL2 continues to operate as well, or better than, CL1. Best day to date was ~2,200 tonnes, without topping out the lines Expect tonnages to start ramping up consistently now 19

21 1-Jun 2-Jun 3-Jun 4-Jun 5-Jun 6-Jun 7-Jun 8-Jun 9-Jun 10-Jun 11-Jun 12-Jun 13-Jun 14-Jun 15-Jun 16-Jun 17-Jun 18-Jun 19-Jun 20-Jun 21-Jun 22-Jun 23-Jun 24-Jun 25-Jun 26-Jun 27-Jun 28-Jun 29-Jun 30-Jun 1-Jul 2-Jul 3-Jul 4-Jul 5-Jul 6-Jul 7-Jul 8-Jul 9-Jul 10-Jul 11-Jul 12-Jul 13-Jul 14-Jul 15-Jul 16-Jul 17-Jul 18-Jul 19-Jul 20-Jul 21-Jul 22-Jul 23-Jul 24-Jul 25-Jul 26-Jul 27-Jul 28-Jul 29-Jul 30-Jul 31-Jul Demonstration of 2,000 tpd Plant Capacity 2,500 CL1 Feed CL2 Feed Average 2,000 tpd 2,000 1,500 1,

22 Dilution Control We did not bench a blast in June/July, so re-design is working Improved dilution in June 21

23 Expansion of Gravity Effort Falcon C2000 (2) Falcon SB1350 (2) Grind/Flotation Feed Surge bins (2) Remove cleaner Jigs Move Spinners to Crushing Circuit Replace Regrind Cyclones (2) Knelson XD20 (2) 22

24 Falcon SB400 Addition - May

25 Ultimate Gravity Concentrators - Q

26 Additional Surge Capacity - Low-g gravity concentrators to crushing 25

27 Additional high-g gravity concentrators in primary grinding 26

28 Additional high-g gravity concentrators in sulphide recovery 27

29 Expansion of pump box volumes 28

30 Addition of a high-g gravity concentrator to the regrind circuit 29

31 Equipment and Materials Status Crushing Surge Capacity Completed structural steel design for tower and surge bins East tower fabrication completion targeted for August to allow moving spinners Surge bins fabrication completion targeted for early September Foundation concrete design is finalized All east tower equipment operational by end of September Primary Grinding Falcon SB1350s and screens completed and being shipped to site Falcon C2000s and screens ordered delivery by end of August Completed structural steel design - fabrication completion targeted for mid-september Foundation concrete design is finalized Ball mill discharge pump box volume expanded by 100% All west tower equipment operational by end of September Regrind area Knelson XD20s being shipped to site Move spinners after structural steel for east tower erected, then install XD20s XD20s operational by early September Expansion of regrind mill pumpboxes 30

32 Other Equipment/Logistics Status Pumps 20 new pumps (3x2, 4X3, peristaltic hose) 6 pumps and 3 pump boxes are being re-used, but in a different area of the flowsheet Electrical and mechanical Process Flow Diagrams, mechanical equipment lists, instrumentation diagrams completed Electrical and instrumentation lists developed for final costing and purchasing No new electrical room required - new MCC and some variable speed drives repurposed and augmented G Mining Scope includes supervision of concrete, structural steel erection, mechanical and electrical installation Costs/Budget Scope increased to add a second surge bin with related tower Detailed engineering Gantt chart and budget completed - awaiting detailed costs for surge bins, west tower, and regrind structural steel Budget at $8.0 million (including camp cost allocation) 31

33 Exploration 32

34 Hope Bay Exploration Objectives Near Term Production Support Doris Connector - definition drilling supporting detailed mine planning Doris BTD Extension - definition and expansion, facilitate conversion to reserve Madrid Naartok zone - definition of shallow, high grade core, supporting advanced exploration program Medium Term Development Support Doris - in mine extend Doris mine lift Madrid - Definition and expansion supporting LoM planning Boston - Expand known resources, define potential supporting development plan Continue developing and testing regional targets Long Term To date, little work completed outside of the 3 known deposits Define the long term potential of the Belt. New discoveries and infrastructure nodes 33

35 Doris North BTD Drilling Highlights N 10TDD741 (Historical) 523 g/t Au over 5.6 m Incl. 5,777 g/t Au over 0.5 m High-Grade Doris Hinge Diabase TM g/t Au over 7.1 m Incl. 2,710 g/t Au over 0.66 m Doris North TM00132 (Historical) 21.0 g/t Au over 2.0 m TM00058 (Historical) g/t Au over 1.5m BTD East Limb Historical Drillhole Referenced in text 2018 TMAC Drillhole Existing Development Open BTD Extension TM g/t Au over 3.0 m and 96.6 g/t Au over 2.9 m 2018 Planned Development North Fault TM g/t Au over 1.4 m and 1,255 g/t Au over 1.5 m 100 m 34

36 Madrid North Drilling Highlights TM g/t Au over 25.1 m Incl g/t Au over 14.0 m Naartok East 05PMD288 (Historical) 23.2 g/t Au over 15.9 m Naartok West High- Grade Plunge PMD099 (Historical) 33.1 g/t Au over 11.0 m TM g/t Au over 40.5 m Rand Suluk N 100 m TM g/t Au over 50.0 m Incl g/t Au over 8.5 m Historical Drillhole 2018 TMAC Drillhole 35

37 Huge Database (+30 years; 4 owners) (+90 high priority targets) Geology Magnetics Gravity Targets Identified Excellent Exploration Results and Historical Data Base to Build On 36

38 Hope Bay Exploration Potential Tremendous Exploration Potential within the relatively underexplored Hope Bay and Elu belts. Very little work completed outside of the 3 known deposits. Begin to define the long term potential of the Belt. We have people working on long term strategic planning that will require data. Numerous high grade Au surface samples throughout the belt Au in till anomalies defined near current infrastructure at both Doris and Boston >10g/t Au Doris Au in till sampling Madrid Boston Detailed mapping RC/RAB drilling to further define diamond drilling targets Ground geophysics Diamond drilling 37

39 Regional Exploration Hope Bay CGG HeliFALCON TM (2016) Ground Gravity (2009) 80 km 38

40 Hope Bay Belt - Surface Grab Samples + Outcrop Doris Madrid 80km Boston Outcrop Map >10g/t Au >50g/t Au 39

41 Abundance of Targets Near-Mine and Regionally N Doris N Madrid Doris 774,000 ozs Au Indicated 400,000 ozs Au Inferred 2 nd Order Structures Hope Bay Deformation Zone Hope Bay Deformation Zone 2.5km Boston Boston 1,096,000 ozs Au Indicated 330,000 ozs Au Inferred Madrid 2,759,000 ozs Au Indicated 843,000 ozs Au Inferred >10g/t Au 2.5km 40

42 Boston Deposit N 15.9 g/t Au/18.4m 15.3 g/t Au/22.3m 22.0 g/t Au/17.55m Measured And Indicated 2017 Drillhole Inferred 28.6 g/t Au/3.8m Historical Un-Classified Category Tonnes (kt) 56.6g/t Au/8.8m Historical Grade (Au g/t) Ounces (koz) 28.5 g/t Au/7.1m 17.3 g/t Au/4.8m 46.6 g/t Au/7.8m Historical Measured & Indicated 3, , m Inferred 1,

43 Boston Regional Exploration Boston Regional Exploration Potential Intense alteration trend extends >5 Km south, along mafic volcanic/metasediment contact similar to known Boston Deposit Numerous surface showings >10 g/t Au, and shallow high-grade drill intersections 2017 gold in till sampling program identified anomalies south of Boston along alteration trend. Several untested gold in till anomalies north of Boston appear to be associated with favourable stratigraphy beneath the lake. 1,096,000 ozs Au Indicated 330,000 ozs Au Inferred Intense Alteration Trend 2.5km 42 43

44 Appendices 43

45 Share Capital Structure & Major Shareholders As at July 31, 2018 Common Shares (Issued and Outstanding) 91,959,512 Share Incentive Options 4,657,517 Lenders Warrants C$15.43 Expire Jul 31/22 & C$7.50 Exp. Jul 23/20 2,333,834 Restricted Shares 506,173 Director Share Units 31,249 Fully Diluted Shares 99,488,285 Major Shareholders Number of Shares Percentage of Shares Outstanding Resource Capital Fund VI L.P. 27,959, Newmont Mining Corporation 26,381, Blackrock, Inc 12,252, Directors and Officers 3,478, Kitikmeot Inuit Association 1,133,

46 Royalties & Taxes Who What How Calculated Kitikmeot Inuit Association NSR 1% on Hope Bay. Not Elu. Maverix NSR 1% on Hope Bay and Elu. Nunavut Tunngavik Inc. Government of Canada NPI NPI On Inuit-Owned Land (Doris and Madrid) 12% of production (limit deductions to 75% of revenue (85% at Doris)) Deductions never lost and are carried forward. On Crown Land (Boston & Elu) Sum of graduated royalty rates from 0% to 14% of value of the output of the mine 45

47 Obligations Who Kitikmeot Inuit Association Nunavut Tunngavik Inc. Crown- Indigenous Relations and Northern Affairs Government of Nunavut What Commercial Lease Payment ($1.0 million per year plus inflation) Production & Exploration Lease Payments Start 2017 $8 million payment (accrued in June 2017) (payable over 8 quarters, $1 million each quarter) Claim & Lease Payments Property Taxes (Relates to amount of infrastructure at Hope Bay) 46