PEGMONT PEA HIGHLIGHTS

Transcription

1 Advanced Lead-Zinc Resource Development PEGMONT PEA HIGHLIGHTS January 2019 Pegmont Deposit Queensland, Australia

2 IMPORTANT INFORMATION Cautionary Statement on Forward Looking Information 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 Vendetta Mining Corp., nor shall it or any part of it form the basis of or be relied on in connection with any contract or commitment whatsoever. This release includes certain statements that may be deemed to be forward looking statements within the meaning of the applicable Canadian Securities laws. All statements in this release, other than statements of historical facts are forward looking statements, including the anticipated time and capital schedule to production; estimated project economics, including but not limited to, mill recoveries, payable metals produced, production rates, payback time, capital and operating and other costs, IRR and mine plan; expected upside from additional exploration; expected capital requirements; and other future events or developments. Forward-looking statements include statements that are predictive in nature, are reliant on future events or conditions, Forward looking statements are often, but not always, identified by the use of words such as "seek", "anticipate", "plan", "continue", "estimate", "expect, may", "will", "project", "predict", "potential", "targeting, intend", "could", "might", "should", "believe and similar expressions. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward looking statements. Although the Company believes the expectations expressed in such forward looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward looking statements. Factors that could cause actual results to differ materially from those in forward looking statements include, but are not limited to, changes in commodities prices; changes in expected mineral production performance; unexpected increases in capital costs; exploitation and exploration results; continued availability of capital and financing; differing results and recommendations in the Feasibility Study; and general economic, market or business conditions. In addition, forward looking statements are subject to various risks, including but not limited to operational risk; political risk; currency risk; capital cost inflation risk; that data is incomplete or inaccurate; the limitations and assumptions within drilling, engineering and socio economic studies relied upon in preparing the PEA; and market risks. The reader is referred to the Company s filings with the Canadian securities regulators for disclosure regarding these and other risk factors, accessible through Vendetta Mining s profile at There is no certainty that any forward looking statement will come to pass and investors should not place undue reliance upon forward looking statements. The Company does not undertake to provide updates to any of the forward looking statements in this release, except as required by law. This presentation presents certain financial performance measures, including all in sustaining costs (AISC), cash cost and total cash cost that are not recognized measures under IFRS. This data may not be comparable to data presented by other silver producers. The Company believes that these generally accepted industry measures are realistic indicators of operating performance and are useful in allowing comparisons between periods. Non GAAP financial performance measures should be considered together with other data prepared in accordance with IFRS. This presentation contains non GAAP financial performance measure information for a project under development incorporating information that will vary over time as the project is developed and mined. It is therefore not practicable to reconcile these forward looking non GAAP financial performance measures. TSXv : VTT 2

3 IMPORTANT INFORMATION Cautionary Statement on Forward Looking Information About Reserves and Resources This presentation uses the terms measured, indicated and inferred resources as a relative measure of the level of confidence in the resource estimate. Readers are cautioned that: (a) Mineral Resources are not economic mineral reserves; (b) the economic viability of resources that are not mineral reserves has not been demonstrated; and (c) it should not be assumed that further work on the stated resources will lead to mineral reserves that can be mined economically. In addition, inferred Mineral Resources are considered too geologically speculative to have any economic considerations applied to them. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian rules, estimates of inferred Mineral Resources may not form the basis of feasibility or pre-feasibility studies or economic studies except for certain preliminary economic assessments. Cautionary Note About Preliminary Economic Assessments Readers are cautioned that the PEA is preliminary in nature, it includes inferred Mineral Resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as Mineral Reserves, and there is no certainty that the PEA results will be realized. Mineral Resources that are not Mineral Reserves and do not have demonstrated economic viability. Additional work is needed to upgrade these Mineral Resources to Mineral Reserves. Qualified Person Peter Voulgaris, MAusIMM, MAIG, a Director of Vendetta, is a non-independent qualified person, as defined by NI Mr. Voulgaris has reviewed the technical content of this Presentation and consents to the information provided in the form and context in which it appears. Note : all amounts in this presentation are in Australian Dollars unless otherwise indicated TSXv : VTT 3

4 PEA PROJECT SUMMARY Mine Life 10 3,000 tonne per day open pit followed by underground Standard flotation process flow sheet Production: Open Pit 8.9 Mt & Underground 1.7 Mt In-pit tails storage, with 30% additional capacity Preproduction Capital of $170M and Life of Mine Sustaining Capital of $59M Long Term Consensus Metal Prices (Pb $0.94, Zn $1.09, Ag $16.50) & Exchange Rate $0.75 Pre-Tax NPV (8%) $201M and IRR 32% After Tax NPV (8%) $124 M and IRR 24% After tax payback period 3.5 years All-in sustaining Cash Cost ( AISC ) of $0.71 / lb payable lead in concentrate (after credits) Spot Prices & Exchange Rate as of January 22, 2019 (Pb $0.91, Zn $1.18, Ag $15.31) & Exchange Rate $0.71 Pre-Tax NPV (8%) $258M and IRR 37% After Tax NPV (8%) $158 M and IRR 27% After Tax payback period 3.0 years Average annual production of 124M lbs of lead, 50M lbs of zinc and 298K ounces of silver Average net smelter return (NSR) 135 /t of ore TSXv : VTT 4

5 SUMMARY OF BASE CASE RESULTS Metal Prices (US$)* Pb Zn Ag $0.94 / lb $1.09 / lb $16.50 / Oz Exchange Rate USD / AUD $0.75 Discount Rate 8% Nominal Processing Capacity LOM Average Feed Grade (diluted) LOM Average Process Recoveries Mine Life PEA Inventory Pb Zn Ag Pb Zn 3,000 tonnes per day 10 years Open Pit 8.86Mt Underground 1.74Mt 5.32% 2.15% 9 g/t 90.5% 74.2% Initial CAPEX Life of Mine CAPEX Average Annual Payable Metal Production Pre Tax Post Tax NPV8 $ m $229.0 m 1,069 M lbs Lead 317 M lbs Zinc 1.1 M oz Silver $201 M IRR 32% NPV8 Post Tax Payback from start of Processing Cash Cost (net of Zinc and Silver Credits) AISC (net of Zinc and Silver Credits) $124 M IRR 24% 3.5 years $0.65 / lb Lead $ 0.71 / lb Lead * Long term institutional consensus pricing used, as of December TSXv : VTT 5

6 SUMMARY OF SPOT PRICE* CASE RESULTS Metal Prices (US$) Pb Zn Ag $0.91 / lb $1.18 / lb $15.31 / Oz Exchange Rate USD / AUD $0.71 Discount Rate 8% Nominal Processing Capacity LOM Average Feed Grade (diluted) LOM Average Process Recoveries Mine Life PEA Inventory Pb Zn Ag Pb Zn 3,000 tonnes per day 10 years Open Pit 8.86Mt Underground 1.74Mt 5.32% 2.15% 9 g/t 90.5% 74.2% Initial CAPEX Life of Mine CAPEX Average Annual Payable Metal Production Pre Tax Post Tax NPV8 $ m $229.0 m 1,069 M lbs Lead 317 M lbs Zinc 1.1 M oz Silver $249 M IRR 37% NPV8 Post Tax Payback from start of Processing Cash Cost (net of Zinc and Silver Credits) AISC (net of Zinc and Silver Credits) $158 M IRR 27% 3.0 years $0.60 / lb Lead $ 0.66 / lb Lead * As of January 22, 2019, spot lead, zinc and silver prices are London Metal Exchange cash buyer, exchange rate is Reserve Bank of Australia official rate. TSXv : VTT 6

7 BASE CASE POST TAX NPV8 SENSITIVITIES Input Input Factor 85% 90% 95% 100% 105% 110% 115% Lead Price ($US / lb) Zinc Price ($US / lb) CAPEX (life of mine) OPEX (per tonne milled) Exchange Rate (US$:A$) TSXv : VTT 7

8 PEA PROJECT KEY FEATURES Strategically Planned with a Cradle to Grave perspective, gaining significant permitting, operating and closure advantages thought use of in-pit tails disposal Standard 3,000 tonne per day differential flotation plant separate lead and zinc concentrates Natural Gas Fired Power Station, 16 km long pipeline spur to be built from the Cannington Lateral Pipeline Using Chinova Resources Osborne Mine camp during construction and all weather airstrip throughout operations Open pit mining in BHZ commences 6 months prior to milling to provide initial in-pit tails disposal site and blended Sulphide + Transition feed Open pit mining moves to south to mine shallow Main Pit 1 for second in-pit tails site, followed by Main Pit 2 & 3 to complete life of mine in-pit tails storage sites. In-pit tails capacity estimated to exceed PEA requirements by 30%. Underground mining areas accessed from declines in the pit walls in stage Main Pit 6, standard room and pillar with no backfill and long hole stope with waste rock back fill Lead concentrate trucked to Mt Isa Lead Smelter & Zinc concentrate trucked to Malbon for loading onto trains to Sun Metals Zinc Smelter in Townsville. Maintaining optionality to use alternate smelters through the Townsville Port TSXv : VTT 8

9 PROJECT FEATURES Mine Office, Workshops & Fuel ROM Pad Plant Site & Natural Gas Power Station Pit Stage Main 1 In-Pit Tails Final Waste Dump Covers BHZ In-pit Tails Pit Stages Main 4 to 7 In-pit Waste Dump Pit Stages Main 2 & 3 In-Pit Tails View Looking North East TSXv : VTT 9

10 LOCATION Queensland, Australia, a first class mining jurisdiction Pegmont is located it the worlds leading lead-zincsilver district, extending from the world largest lead mine at Cannington Mine to one of the largest zinc mines at McArthur River Mine Mt Isa region is Australia's largest copper producing district Glencore Lead smelter in Mt Isa & Sun Metals Zinc Smelter in Townsville Townsville concentrate port provides alternative smelting options in Australia & Asia Higley skilled mining hubs in Mt Isa and Townsville Clear and transparent processes, secure titles TSXv : VTT 10

11 INFRASTRUCTURE & ACCESS Fly in Fly out operation Osborne Mine Camp to be used during construction Osborne Mine Airport to be used for the duration of the project Only 3.4 km of new access track, to shorten existing access In-pit tails disposal, with 30% extra capacity than needed for PEA Concentrate container rail loading built at Malbon, Natural gas pipeline spur off existing Cannington Lateral Pipeline, 16 km south of Pegmont Existing fibre optical cable 16 km south of Pegmont TSXv : VTT 11

12 INFRASTRUCTURE Mt Isa, Mining Centre Mt Isa, Glenore Lead Smelter Townsville, Korea Zinc Smelter Mt Isa, Typical Haulage Road Train Mt Isa, Concentrate Rail Cars Natural Gas Pipeline, 16 km South TSXv : VTT 12

13 COST SUMMARY CAPITAL OPERATING Area Initial ($M) Sustaining ($M) Total ($M) Site Infrastructure (on and off site) Mineral Processing Mining (establishment & underground) Project Indirects (EPCM & Owner Costs) Area Units Cost Open Pit Mining $/tonne mined $3.08 Underground Mining $/tonne mined $50.00 Processing $/tonne milled $26.30 Common Site G&A $/tonne milled $6.24 All-In OPEX $/tonne milled $74.30 Closure Contingencies (mine, process & infrastructure) TOTAL PROJECT TSXv : VTT 13

14 PRODUCTION MILL FEED TONNES & GRADE 1,200,000 Tonnes Milled Zinc - Zn % Lead - Pb % Silver - Ag g/t ,000, Tonnes 800, , , Diluted Feed Grade 200, TSXv : VTT 14

15 ENHANCEMENT OPORTUNITIES Opportunities for continued refinement through further optimization mine plan & metallurgical test work There remain significant Mineral Resources not included in the PEA mine plan, which, with further drilling will potentially increase the mine life or increase production rate Geostatistical review of the mineral resource estimate, investigating grade envelope definition Further infill drilling with diamond core Additional metallurgical test work to advance optimisation of recovery, including variability test work Investigate post primary crusher material sorting Investigate flash flotation of lead and optimal grinding size to improve zinc floatation Reduce reagent and collector dosages to reduce mill OPEX 2017 Drilling at Pegmont Bridge Zone Mining; waste dump placement, scheduling of open pit and underground interaction, more detailed underground mine planning TSXv : VTT 15

16 NEXT STEPS Variability Metallurgy Test Work on Main 1 starter pit - Underway Geostatistical review of the mineral resource estimate, investigating grade envelope definition Resource Development Drilling, targeting connecting Zone 3 underground panels Infill diamond drilling of Inferred Mineral Resource Post crushing ore sorting test work Condemnation drilling over Plant Site and Camp Coarse Sphalerite in Banded Iron Stone Zone 2 Sulphide Cultural Heritage survey over project area Process Water Supply conduct hydrogeological investigation Continue Baseline Surveys in preparation for EIS Prepare Application for Mining License Exploration drilling testing identified near Project targets Coarse Galena in Banded Iron Stone BHZ Transition TSXv : VTT 16

17 APPENDICES Mineral Resource Estimate Metallurgy Process Plant Mine Planning Open Pit Mine Planning - Underground Townsville, Concentrate Port TSXv : VTT 17

18 MINERAL RESOURCE ESTIMATE (JULY 31, 2018) Area Classification Material type Tonnes (kt) Pb % Zn % Ag g/t Open Pit Resource By Confidence Open Pit Constrained Underground TOTAL Indicated Inferred Transition 1, Sulphide 4, TOTAL 5, Transition 1, Sulphide 2, TOTAL 4, Indicated Sulphide Inferred Sulphide 3, Indicated TOTAL 5, Inferred TOTAL 8, Inferred 46% Resource By Method Indicated 54% 1. Prepared by independent qualified persons ( QPs ) J.M. Shannon P.Geo, D Nussipakynova P.Geo, M. Angus MAIG, P. Lebleu P.Eng, of AMC and A Riles MAIG, of Riles Integrated Resource Management Pty Ltd., and has an effective date of 31 July 2018, incorporating drill results to 15 April 2018, including 22,163 m in 107 new holes drilled in 2017 and early CIM Definition Standards (2014) were used to report the Mineral Resources. 2. Cut-off grade applied to the open pit Mineral Resources is 3% Pb+Zn and that applied to the underground is 5% Pb+Zn. 3. Based on the following metal prices: US$0.95/lb for Pb, US$1.05/lb for Zn, and US$16.5/oz for silver. 4. Exchange rate of US$0.75 : A$ Metallurgical recoveries vary by zone and material type as follows: Lead to lead concentrate: from 80.6% to 91.3% for transition and 88.0% to 92.7% for sulphide. Zinc to zinc concentrate: from 19.3% to 75.2% for transition and 61.8% to 78.5% for sulphide. 6. Using drilling results up to 15 April Mineral Resource tonnages have been rounded to reflect the accuracy of the estimate, and numbers may not add due to rounding. Underground 32% Open Pit 68% TSXv : VTT 18

19 METALLURGY 2016/2017 Open Cycle Flotation Test Work performed on diluted composites from Sulphide Zone 5 and BHZ, plus Transition BHZ 2017/2018 Open and Locked Cycle Flotation Test Work performed on diluted composites of Sulphide Zones 1, 2, 3 and Bridge, plus Sulphide Zone 1 Variability Test Work on Main Pit 1 Transition Mineralization on going How does Pegmont Compare? Favorably Cannington 1997 Feasibility Study: Lead Concentrate 85% Lead Recovery Zinc Concentrate 75% Zinc Recovery Cannington 2017 Ore Reserve: Lead Concentrate 87% Lead Recovery Zinc Concentrate 80% Zinc Recovery There remains scope to further optimize flotation results ALS Metallurgy Laboratory, Pegmont Lead Rougher Flotation Test TSXv : VTT * 19

20 METALLURGY TEST WORK RESULTS Area Test Type Bond Ball Mill Work Index kwh/t Head Grades (diluted) Lead Circuit Zinc Circuit Pb % Zn% Pb Recovery % Pb Con. Grade % Zn Recovery % Zn Con. Grade % Sulphide Mineralization Zone 1 Locked Cycle Zone 2 Locked Cycle Zone 3 Locked Cycle Bridge Zone Locked Cycle BHZ Locked Cycle Zone 5 Lens B (Not in PEA Mine Open Cycle Plan) Zone 5 Lens C (Not in PEA Mine Plan) Open Cycle Transition Mineralization* Zone 1 (Stage Main Pit 4) Locked Cycle BHZ** Open Cycle *Transition Mineralisation is defined as predominately sulphide mineralisation in variably weathered rocks. TSXv : VTT 20 **Based on one hole, potentially not representative of the Transition Mineralisation at BHZ

21 PROCESS PLANT View Looking East TSXv : VTT 21

22 MINE PLAN OPEN PIT 8.9 Mt of plant feed (84% life of mine) Mine Schedule is constrained by maximum material movement of 17 Mtpa & in-pit tails requirements Conventional Contractor Open Pit Mining with hydraulic shovels and 85 tonne class haul trucks Main4-7 BHZ Mining Commences in BHZ, followed by Main 1, 2 and 3 to complete life of mine in-pit tails Main1 Able to start processing on blended Transition and Sulphide material Life of mine strip ration 12.5 : 1 Main2-3 In-pit Tails Assumes placed density of 1.7 t/m 3, based on 60 min settling test work. In-pit capacity is 30% greater than needed for PEA mine plan. TSXv : VTT 22

23 MINE PLAN UNDERGROUND PANNELS View Looking East Accessed from Pit Stage Main 6 Contract Underground trackless Mining Inclined Room & Pillar with now backfill Inclined or Stepped Room & Pillar Schematic (Atlas Copco, Mining Methods) Total material mined 1.7 Mt over 3 years (16% life of mine) TSXv : VTT 23

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