Converting Exploration Success into Tomorrow’s Mines
TSX: NGQ
Los Helados Preliminary Economic Assessment
October 2014
Cautionary Statement
All information included in this presentation, including any information as to the Company’s future financial or operating performance, and other statements that express
management’s expectations or estimates of future performance, other than statements of historical fact, constitute forward looking information or forward-looking statements and
are based on expectations, estimates and projections as of the date of this presentation. For example, forward-looking statements contained in this presentation are found under,
but are not limited to being included under, the headings “Resource”, “Resource Estimate”, and variations thereof “Value Creation Potential”, “Exploration Upside”, “Los Helados
Project Opportunities”, “2015 Work Program”, and “Next Steps” and include, without limitation, statements with respect to: the possible future valuation of NGEX assets, exploration
potential, the future prices of copper and gold, the estimation of mineral resources, the realization of mineral resource estimates, the timing of future resource estimates and timing
for the completion of other studies, permitting timelines, requirements for additional capital, government regulation of mining operations, environmental risks.
Forward-looking statements are made to provide information about management’s current expectations and plans. Forward-looking statements are generally identifiable by, but are
not limited to, the use of the words “may”, “will”, “should”, “continue”, “expect”, “anticipate”, “estimate”, “believe”, “targeting”, “intend”, “plan”, “guidance”, “outlook”,
“potential”, “strategy” or “project” Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by
management, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Reliance on such forward-looking statements involves risks,
uncertainties and other factors that may cause the actual financial results, performance or achievements of NGEx to be materially different from those expressed or implied by those
forward-looking statements, and the forward-looking statements are not guarantees of future performance. These risks, uncertainties and other factors include, but are not limited
to, exploration and development risks, metal price risk, the strength of the financial markets, the market price of NGEx shares, the ability to obtain financing, the risks inherent in
foreign operations and the risk of inadequate infrastructure, currency risks, environmental and socio-political risks, title risk to property, the dependence on key personnel, risks
inherent in mineral resource estimation and exposure to uninsurable risks. Certain data in this presentation was obtained from various external data sources, and the Company has
not verified such data with independent sources. Accordingly, no representation or warranty, express or implied, is made and no reliance should be placed, on the fairness, accuracy,
correctness, completeness or reliability of that data.
For a more comprehensive discussion of the risks faced by the Company, and which may cause its actual financial results, performance or achievements to be materially different
from those expressed or implied by forward-looking information or forward-looking statements, please refer to the Company’s latest Annual Information Form, filed with Canadian
securities regulatory authorities at www.sedar.com. The risks described in the Annual Information Form are hereby incorporated by reference into this presentation.
The Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise except as
required by applicable law.
Mineral Resource Disclosure Notes and Qualified Persons
This presentation includes written disclosure of Mineral Resources for the Los Helados and the Josemaria Deposits. These notes are an integral part of this disclosure and should be
read in conjunction with every written disclosure of the Mineral Resources in this presentation. To put the summary resource information included in this presentation into its
complete context the reader should review the entire relevant Technical Report for each project. This document may use the terms “Measured”, “Indicated”, and “Inferred “
Resources as these terms are defined under Canada’s NI 43-101. U.S. investors are advised that, while such terms are recognized and required by Canadian regulations, the U.S.
Securities and Exchange Commission does not recognize them. Readers are cautioned that Mineral Resources do not have demonstrated economic viability and are further cautioned
not to assume that all or any part of Measured or Indicated Resources will ever be converted into Mineral Reserves.
Los Helados
See News Release dated October 20, 2014 titled “NGEx Announces Positive Result of Preliminary Economic Assessment and an Updated Mineral Resource Estimate for its Los Helados
Project the “Los Heladoss News Release” The resource estimate has an effective date of September 19, 2014. This document is available under the Company’s profile on SEDAR
www.sedar.com, The NI 43-101 Technical Report summarizing the results of the PEA and Updated Resource Estimate will be filed on SEDAR (www.sedar.com) and on the Company’s
website (www.ngexresources.com) within 45 days of this news release.
Josemaria
Technical Report dated November 13, 2013 and amended March 24, 2014 and titled “Second updated mineral resource estimate for the Josemaria Property San Juan Province
Argentina” with an effective date of September 27, 2013, “the Josemaria Report”. This report is available under the Company’s profile on SEDAR www.sedar.com
Qualified Persons
2 the
The disclosure of scientific and technical information regarding the Company’s properties in this presentation was prepared by or reviewed by: Bob Carmichael, P. Eng.,
Company’s Vice President, Exploration, and Anthony George P.Eng., a mining engineer and manager of the Company’s conceptual engineering studies,
who are Qualified Persons in accordance with the requirements of NI 43-101.
Contents
Overview
Key Assets
Project Details
Management and Board of Directors
Financials
3
In Brief
Summary
•
Canadian mineral exploration company
•
Focus on copper-gold
•
Key projects in Chile and Argentina
•
Listed on TSX: NGQ
•
Secondary listing on NASDAQ OMX
Stockholm Main Board
•
Cash $~35 million (CAD)
•
Market Cap 16-Oct-14 ~ $290 million
Share price history
Los Helados
Josemaria
Resources
Los Helados
Discovery
Analyst coverage
Filo positive
results
Major shareholders
Major shareholder
Number of shares in %
Mike Hocking
Cliff Hale Sanders
David Charles
Lundin Family Trusts
19.9%
US Global Investors
2.0%
Investec
1.0%
Investors Group
1.0%
Source: Bloomberg, 16-Oct-14
Christopher Welch
4
Copper-gold in South America
The Company’s core assets are:
• Big
− Among the largest copper deposits in the
world
• Rare
− Some of the largest new discoveries in the
last decade
• Needed
− Global growth requires new copper supplythe Company’s projects ideally placed
• Growing
− NGEx’s resource base has increased
sevenfold during the last five years
5
Key Assets
Three major copper-gold deposits and counting….
Los Helados (Chile)
PEA Complete
Next stage work
commenced
Josemaria (Argentina)
Resource Update and
Metallurgical test work
Filo del Sol
(Argentina/Chile)
Maiden Resource
Expected Q4 2014
Good access and mining infrastructure
6
Strategic Partners
NGEx is the majority partner and operator
Pan Pacific Copper (PPC)
• JX Nippon Mining and Mitsui Mining and
Smelting
• Major Japanese copper smelting group
• Operators of the Caserones Mine- 20km
from Los Helados
• Largest buyer of copper concentrate in the
world
• 40% partner in Los Helados & Filo del Sol
Japan Oil Gas & Metals National
Corporation (JOGMEC)
• Japanese government agency that invests
in early stage resource exploration
projects on behalf of Japanese companies
• Transferred interest in Los Helados and
Filo to PPC in 2012
• 40% partner in Josemaria
7
Where do NGEx Resources Rank?
Among the largest in the world, one of very few controlled by juniors
World's 50 Largest Copper Resources
Copper - Contained Tonnes
140,000,000
120,000,000
OPERATING MINES SENIOR/ STATE
100,000,000
UNDEVELOPED – SENIOR / STATE
80,000,000
UNDEVELOPED – JUNIOR
60,000,000
40,000,000
20,000,000
Escondida
Andina
El Teniente
Collahuasi
Olympic Dam
Chuquicamata
Oyu Tolgoi
KGHM
Norilsk
Pebble
Radomiro Tomic
Los Bronces
Los Pelambres
Buenavista
Resolution
Kamoa
Udokan
Reko Diq
Cobre Panama
Kazakhmys
Grasberg
Tenke Fungurume
Konkola
La Granja
Toquepala
Quebrada Blanca
Antamina
Salvador
Sar Cheshmeh
Cerro Verde
El Pachon
Kamoto
Tampakan
Morenci
NGEx District
Quellaveco
Taca Taca
Frieda River
Spence
Ministro Hales
Twin Metals
Toki
La Caridad
Cerro Colorado
Kalmakyr
Cuajone
Salobo
Jianxi
Las Bambas
KSM
Sierra Gorda
Lookout Hill
0
SOURCE: SNL Metals & Mining, Company Reports
•
•
•
•
This is a list of the 50 largest copper mines and projects in the world
44 are owned by majors or state owned companies (blue and light blue bars)
Only 6 are owned by junior companies- i.e. available for acquisition (red bars)
Only 2 of those are larger than NGEx
8
Large discoveries are rare
Ours are some of the largest in the last decade
History of New Copper Discoveries
9
The world will grow- supply will not keep up
NGEx advancing its projects to fill the projected gap
Mined copper supply gap and requirement for new capacity
•
•
•
•
Large deposits are rare, difficult to find, and take a long time to develop
A supply gap is projected for 2017
Only projects that are already known can be developed in time to fill the gap
This will increase the value of projects like ours
10
Exploration Upside
Large land package + time = new discoveries
>100 years
exploration
~45 years
exploration
10 years
exploration
~35 years
exploration
11
Contents
Introduction
Key Assets
Project details
Management and board of directors
Financials
12
Los Helados
Project Outline
• Stand-alone mine and mill
• Block cave mining of high
grade core
• Standard crush-grind-float
processing
• High copper and gold
recoveries producing
clean, precious metals rich
concentrate
• Critical social and
environmental baseline
work ongoing
13
Los Helados
Highlights
• Resource
Mine plan mostly based on Indicated Resources
Geometry good for block caving
• Mining
Early production from high grade core
Scalable from 65k/d to 130 k/d
• Processing - proven standard design
SAG Mill / Ball Mill
Standard flotation
• Excellent recoveries
Copper 89%
Gold 80%
Silver 51%
Strong technical foundation for future optimization
A good start
14
Los Helados
Highlights
• Average Annual Production (130,000 t/d)
Copper 115,000 tonnes
Gold
133,000 ounces
Silver
675,000 ounces
• Clean gold-silver rich copper concentrate
29% Cu concentrate
• Forecast lowest quartile C1 costs
• Long mine life with potential to extend
• Strong leverage to copper price
• Clear opportunities to improve project economics
by realizing potential synergies with nearby
deposits.
15
Los Helados – PEA Overview
Pre-Tax NPV (8%) & IRR
After-Tax NPV (8%) & IRR
Metals Prices
Initial Capital Expenditures
LOM Sustaining Capital Expenditures
LOM C-1 Cash Costs (net of by-product
credits)
Nominal Mill Capacity
Mine Life
LOM Average Annual Metal Production
LOM Average Process Recovery
130,000 t/d Option
65,000 t/d Option
$923 million NPV
10.8% IRR
$429 million NPV
9.4% IRR
$3.25/lb Cu
$1,300/oz Au
$21.50/oz Ag
$4.3 billion
$1.3 billion
$723 million NPV
10.4% IRR
$324 million NPV
9.2% IRR
$3.25/lb Cu
$1,300/oz Au
$21.50/oz Ag
$3.1 billion
$1.3 billion
$1.10/lb Cu sold
$1.13/lb Cu sold
130,000 t/d
26 years
115,000 t Cu
133,000 oz Au
675,000 oz Ag
89.4% Cu
80.2% Au
51.0% Ag
65,000 t/d
37 years
81,000 t Cu
93,000 oz Au
474,000 oz Ag
89.4% Cu
80.2% Au
51.0% Ag
All figures reported are in 2014 US dollars and on a 100% Project and 100% equity basis valuation. A US dollar (USD) to Chilean Peso (CLP) exchange rate of 500
CLP = 1 USD was used for all cost estimates. See News Release dated October 20, 2014 titled “NGEx Announces Positive Result of Preliminary Economic
Assessment and an Updated Mineral Resource Estimate for its Los Helados Project”. This document is available under the Company’s profile on SEDAR
www.sedar.com
16
Los Helados – Economic Sensitivity
130,000 t/d, Pre-Tax, NPV Sensitivity to various input factors
3,500,000
3,000,000
2,500,000
NPV@8%(US$'000)
2,000,000
• Project is highly
leveraged to metals
prices & grades
1,500,000
1,000,000
500,000
0
-30%
-20%
-10%
0%
10%
20%
30%
• Project is less
sensitive to
changes in capital
and operating costs
-500,000
-1,000,000
-1,500,000
-2,000,000
Discount Rate
Metal Prices factor (%)
0%
5%
8%
10%
CAPEX factor (%)
OPEX factor (%)
Grade factor (%)
NPV Sensitivity to Copper Price ($US Millions)
Copper Price ($/lb)
2.75
3.00
3.25
3.50
3.75
5,056
6,702
8,348
9,994
11,640
979
1,776
2,573
3,370
4,167
-155
384
923
1,462
2,001
-626
-204
218
641
1,063
4.00
13,286
4,964
2,541
1,486
See News Release dated October 20, 2014
titled “NGEx Announces Positive Result of
Preliminary Economic Assessment and an
Updated Mineral Resource Estimate for its Los
Helados Project”. This document is available
under the Company’s profile on SEDAR
www.sedar.com.
17
Mining & Production
• Mine planning produced the following Subset of Mineral Resources within
the PEA mine design:
Indicated Resource (diluted)
Inferred Resource (diluted)
Tonnage
753 Mt
1.9 Mt
Cu (%)
0.46
0.32
Au (g/t)
0.18
0.16
Ag (g/t)
1.56
1.31
See News Release dated October 20, 2014 titled “NGEx Announces Positive Result of Preliminary Economic Assessment and an Updated Mineral Resource
Estimate for its Los Helados Project”. This document is available under the Company’s profile on SEDAR www.sedar.com.
18
Los Helados - Infrastructure
POWER
• 220 kV, 180km connection
to the SIC grid
WATER
• Make-up supply via
desalinated sea-water
• Assumed long term
contract rates of
$0.122/kWh for analysis
TRANSPORT
• 200 km pipeline to the plant
• Concentrate
transported by trucks to
the coast
• Optimization of reclaim
water from tailings and filter
plants
• Possible use of existing
port facilities near the
city of Caldera
• Approx. trucking
distance of 200 km.
19
Los Helados – Project Opportunities
• Spare milling capacity
presents economic upside
• Options for filling the
“triangles”:
Variable cutoff grade
mine planning
Regional Synergies
NGEx’s partners
NGEx’s other
properties
LOS HELADOS INDICATED MINERAL RESOURCE
Resource Grade
Contained Metal
Cu
Au
Ag
CuEq*
Cu
Au
Ag
(billion lbs)
(million oz) (million oz)
(%)
(g/t)
(g/t)
(%)
Cutoff
(CuEq*)
Million
Tonnes
0.58
0.50
0.44
0.40
531
981
1,395
1,733
0.50
0.45
0.42
0.40
0.21
0.18
0.16
0.15
1.66
1.56
1.52
1.45
0.65
0.58
0.54
0.51
5.9
9.7
12.9
15.3
3.6
5.7
7.2
8.4
28.3
49.2
68.2
80.8
0.33
2,099
0.38
0.15
1.37
0.48
17.6
10.1
92.5
See News Release dated October 20, 2014 titled “NGEx Announces Positive Result of Preliminary Economic
Assessment and an Updated Mineral Resource Estimate for its Los Helados Project”. This document is available
under the Company’s profile on SEDAR www.sedar.com
20
Regional Map
Josemaria
21
Los Helados – Future Work
• The PEA identified key opportunities that will drive additional work
plans
• Mining Trade off studies:
Explore the impact of using variable cutoff grades
Increases life of mine and prolongs cash flows
• Additional Metallurgical & Process Testwork:
Optimize recoveries
Use of seawater in the process plant – Capex & Opex
Reviewing grinding technology (High Pressure Grinding Roll) suitability
and potential for overall power and cost reduction
• Drilling & Exploration:
Delineating more or higher grade feed material for the process plant
through continued exploration
Improved geotechnical understanding of the deposit
22
Josemaria
Advanced project
• Large copper-gold deposit
• Shallow high grade core
• Oxide gold cap - potential
for low cost heap leaching
• Located 12 km from Los
Helados
• Finalizing resource
definition
Contained Metal*
12
10
8
6
4
2
0
Contained Copper
(Million Tonnes)
Contained Gold
(Million Oz's)
Measured & Indicated
Inferred
3D View
*At 0.3% CuEq cut off. See Asset detail and the Josemaria Report for resource details.
23
Josemaria Block Model
Shallow high-grade core
> 0.8% CuEq*
0.7 – 0.8%
0.6 – 0.7%
0.5 – 0.6%
0.4 – 0.5%
0.3 – 0.4%
1 kilometre
North
South
1 kilometre
Cross Section-Vertical Slice
See Technical Report dated March 24,
2014:“Second Updated Mineral Resource
Estimate for the Josemaría Property, San
Juan Province, Argentina.”
*CuEq - Copper Equivalent is calculated
using US$3.00/lb copper, US$ 1,400/oz
gold and US$23/oz silver, with no
provision for metallurgical recoveries.
The formula used is CuEq% = Cu% +
0.6806*Au (g/t)+0.011*Ag(g/t).
Filo del Sol
Exploration Upside
• The largest alteration zone in the area
• High grade copper-silver-gold zone overlying deeper
porphyry copper
• Targeting initial resource in 2014
These are schematic sections which are intended to illustrate a simplified version of our current interpretation of the
geometry and spatial distribution of mineralization types at Filo del Sol. They are intended only to help provide a
context and possible interpretation of the drill results and should not be relied upon for any other purpose. The geology
25
of Filo del Sol is complex and the interpretation is subject to change as our understanding of the deposit evolves
Filo del Sol - 2014 Drilling Highlights
Outstanding copper, silver, and gold results
26
Filo del Sol
High grade copper outcrop
• The upper part of Filo del Sol contains chalcanthite a blue copper mineral that is
soluble in water
• This material outcrops in the side of the hill as indicated by the arrow
27
Filo del Sol Footprint vs Similar Deposits
A very large system
Filo is geologically similar to Pascua-Lama and Veladero two of the largest mines in South America
Pascua-Lama
Filo del Sol
?
Veladero
28
2015 Work Program – Parallel Tracks
Project development and adding to the NGEx resource base
CONCEPTUAL STUDIES
Focus: Critical studies to de-risk
& add value
• Los Helados:
• PEA COMPLETE - Next phase studies
underway
• Resource conversion and geotech drilling
~9,000m Q1 2015
• Mining Engineering
• Metallurgical test work
• Baseline environmental studies
• Josemaria:
• Metallurgical test work
• High-level process design
• Baseline environmental studies
• Updated Technical Report Q1 2015
EXPLORATION
Filo del Sol, and…
Focus: Adding to the resource base
• Filo del Sol:
• ~6,000 m resource expansion drilling - Q1
2015
• Resource Update Q4 2015
• Target definition work on earlier stage exploration
targets
• Review of new targets in Chile and Argentina
Evaluating Regional Synergies
29
Next Steps
Follow a Proven Business Model
Lundin Group Returns on Investment
Realize Value
Value creating transaction;
spin-out, JV, sale etc
Los
Helados
Add Value
Define
Resources
Josemaria
De-Risk
Filo
del Sol
Discover
Regional
targets
Acquire
Outstanding record of value creation30
Summary
Size - Majority owner of some of the largest copper deposits in
the world
Scarcity Value - High quality deposits in good jurisdictions
are very rare
Growth - Our resource base has increased by 7X in 5 years
and we believe we will add more
Experience - One of the most successful exploration teams
in the business backed by the best value creators in the
resource sector
31
For more information please contact:
Wojtek Wodzicki, President and CEO
[email protected]
or
Sophia Shane, Investor Relations
[email protected]
Check our website
www.ngexresources.com
32
Contents
Introduction
Operations
Asset details
Management and board of directors
Financials
33
Los Helados – Current Resource
LOS HELADOS INDICATED MINERAL RESOURCE
Resource Grade
Contained Metal
Cu
Au
Ag
CuEq*
Cu
Au
Ag
(billion
lbs)
(million
oz)
(million
oz)
(%)
(g/t)
(g/t)
(%)
Cutoff
(CuEq*)
Million
Tonnes
0.58
0.50
0.44
0.40
531
981
1,395
1,733
0.50
0.45
0.42
0.40
0.21
0.18
0.16
0.15
1.66
1.56
1.52
1.45
0.65
0.58
0.54
0.51
5.9
9.7
12.9
15.3
3.6
5.7
7.2
8.4
28.3
49.2
68.2
80.8
0.33
2,099
0.38
0.15
1.37
0.48
17.6
10.1
92.5
LOS HELADOS INFERRED MINERAL RESOURCE
Resource Grade
Contained Metal
Cu
Au
Ag
CuEq*
Cu
Au
Ag
(billion
lbs)
(million
oz)
(million
oz)
(%)
(g/t)
(g/t)
(%)
Cutoff
(CuEq*)
Million
Tonnes
0.50
0.44
0.40
41
176
399
0.41
0.37
0.35
0.13
0.11
0.10
1.78
1.61
1.47
0.51
0.45
0.43
0.4
1.4
3.1
0.2
0.6
1.3
2.3
9.1
18.9
0.33
827
0.32
0.10
1.32
0.39
5.8
2.7
35.1
Mineral Resources are reported within
block cave underground mining shapes
based on diluted CuEq grades,
$13.07/tonne operating costs and
including a provision for capital
expenditure. The base case cutoff grade
of 0.33% CuEq was derived through an
economic evaluation of several block
cave shapes developed over a range of
different cutoff grades and is the cutoff
grade which results in a zero NPV.
Mineral Resources are not Mineral
Reserves and do not have demonstrated
economic viability.
See News Release dated October 20, 2014 titled “NGEx Announces Positive Result of Preliminary Economic Assessment and an Updated Mineral
Resource Estimate for its Los Helados Project”. This document is available under the Company’s profile on SEDAR www.sedar.com
* CuEq - Copper Equivalent is calculated using US$3.00/lb copper, US$ 1,300/oz gold and US$23/oz Ag, and includes a provision for selling costs and
metallurgical recoveries corresponding to three zones defined by depth below surface. The formulas used are: CuEq% = Cu% + 0.6264*Au (g/t) +
0.0047*Ag (g/t) for the Upper Zone (surface to ~ 250m); Cu% + 0.6366*Au (g/t) + 0.0077*Ag (g/t) for the Intermediate Zone (~250m to ~600m); Cu%
+ 0.6337*Au (g/t) + 0.0096*Ag (g/t) for the Deep Zone (> ~600m)
34
Los Helados Block Model
Plan view
Cutoff Class Millions
CuEq %
of Tonnes
0.58% IND
531
0.44% IND
1,395
INF
176
0.33% IND
2,099
INF
827
Cu % Au g/t Ag g/t CuEq %
0.50
0.42
0.37
0.38
0.32
0.21
0.16
0.11
0.15
0.10
1.66
1.52
1.61
1.37
1.32
0.65
0.54
0.45
0.48
0.39
North
> 0.8% CuEq*
0.7 – 0.8%
0.6 – 0.7%
0.5 – 0.6%
0.4 – 0.5%
0.3 – 0.4%
1 kilometre
South
See News Release dated October 20,
2014 titled “NGEx Announces Positive
Result of Preliminary Economic
Assessment and an Updated Mineral
Resource Estimate for its Los Helados
Project”. This document is available
under the Company’s profile on SEDAR
www.sedar.com
Large high-grade core with good lateral continuity
35
Los Helados Block Model
Large high grade core with good continuity
Cutoff Class Millions
CuEq %
of Tonnes
0.58% IND
531
0.44% IND
1,395
INF
176
0.33% IND
2,099
INF
827
Cu % Au g/t Ag g/t CuEq %
0.50
0.42
0.37
0.38
0.32
0.21
0.16
0.11
0.15
0.10
1.66
1.52
1.61
1.37
1.32
0.65
0.54
0.45
0.48
0.39
> 0.8% CuEq*
0.7 – 0.8%
0.6 – 0.7%
0.5 – 0.6%
0.4 – 0.5%
0.3 – 0.4%
1 kilometre
West
East
1 kilometre
Cross Section-Vertical Slice
See News Release dated October 20,
2014 titled “NGEx Announces Positive
Result of Preliminary Economic
Assessment and an Updated Mineral
Resource Estimate for its Los Helados
Project”. This document is available
under the Company’s profile on SEDAR
www.sedar.com
36
Metallurgical Test work – Los Helados
Test
Upper Zone
Intermediate
Zone
Deep Zone
•
Cu
Head
Grade
(%)
0.264
Cu
Recovery
(%)
Cu
Au Head
Concentrate
Grade (gpt)
Grade (%)
Au
Recovery
(%)
Au
Concentrate
Grade (gpt)
83.1
23.0
0.24
72.8
16.1
0.464
90.2
26.9
0.21
80.3
10.0
0.805
93.1
30.8
0.25
82.5
9.8
Other Notes:
•
•
•
•
Locked cycle test results shown above reflect the best results from two different flow sheets under various grind sizes
and test conditions
Various other tests including QemScan analysis, Gravity Recoverable Gold, CEET simulation, Tailings cyanidation,
solids settling, etc. were performed as part of this program
Refer to Technical Report dated October 31, 2013 and amended March 24, 2014 and titled “Updated Mineral Resource
Estimate for the Los Helados Property, Region III of Atacama, Chile” with an effective date of October 15, 2013. This
report is available under the Company’s profile on SEDAR www.sedar.com for more details on metallurgical test work.
2014 program currently underway targeting additional variability test work and exploring metallurgical response using
seawater – opportunity to reduce capital and operating costs as detailed in the PEA.
Excellent recoveries, low impurities, opportunity to improve
with optimization
37
Los Helados PEA – Cost Details
Estimated Capital Costs
Mine
Plant & Processing
Infrastructure
TOTAL DIRECT COSTS
Indirect Costs
Owner’s Costs
Contingency
TOTAL INITIAL CAPEX
LOM Sustaining Capital
Closure Cost Estimate
Estimated Operating Costs
Mining
Processing
General & Administration
Desalination
Pumping
Tailings
Other (Roads, Port, etc.)
TOTAL
130,000 t/d Option
(US$ millions)
$998
$745
$990
$2,733
$607
$141
$820
$4,301
$1,313
$215
65,000 t/d Option
(US$ millions)
$788
$373
$810
$1,971
$414
$128
$589
$3,102
$1,341
$155
130,000 t/d Option
(US$/t)
$4.49
$6.14
$0.75
$0.29
$0.80
$0.13
$0.05
$12.65
65,000 t/d Option
(US$/t)
$4.42
$6.21
$1.07
$0.24
$0.68
$0.18
$0.10
$12.90
Capital costs were derived from a variety
of sources including comparative analysis
of other operations, derivation from first
principles, equipment quotes and
factoring from other costs contained
within the PEA study. The accuracy of the
estimates contained within this study
vary due to the different methods of
derivation used to estimate the costs
however, in general the capital costs are
expected to be within a -30% to +50% at
the 85% confidence level.
The PEA estimates that the C-1 cash
costs (net of by-product credits) over the
life of mine will average $1.10 for the
130,000 t/d option and $1.13 for the
65,000 t/d option. C-1 cash are a nonGAAP measure of costs which include atmine cash operating costs, treatment
and refining charges, royalties, selling
costs, transportation costs, and byproduct credits.
See News Release dated October 20,
2014 titled “NGEx Announces Positive
Result of Preliminary Economic
Assessment and an Updated Mineral
Resource Estimate for its Los Helados
Project”. This document is available
under the Company’s profile on SEDAR
www.sedar.com.
38
Josemaria – September 2013 Sulphide Resource
Cutoff
(CuEq*)
JOSEMARIA INDICATED MINERAL RESOURCE (Sulphide)
Resource Grade
Contained Metal
Million
Cu
Au
Ag
CuEq*
Cu
Au
Ag
(billion
lbs)
(million
oz)
(million
oz)
Tonnes
(%)
(g/t)
(g/t)
(%)
0.50
0.45
0.40
0.35
355
456
571
679
0.44
0.41
0.39
0.37
0.33
0.30
0.28
0.26
1.27
1.22
1.17
1.12
0.68
0.63
0.59
0.56
3.44
4.12
4.91
5.54
3.77
4.40
5.14
5.68
14.50
17.89
21.48
24.45
0.30
789
0.35
0.24
1.08
0.53
6.09
6.09
27.40
0.25
0.20
894
986
0.33
0.31
0.23
0.22
1.04
1.01
0.50
0.47
6.50
6.74
6.61
6.97
19.89
32.02
JOSEMARIA INFERRED MINERAL RESOURCE (Sulphide)
Resource Grade
Contained Metal
Cu
Au
Ag
CuEq*
Cu
Au
Ag
(billion
lbs)
(million
oz)
(million
oz)
(%)
(g/t)
(g/t)
(%)
Cutoff
(CuEq*)
Million
Tonnes
0.50
0.45
0.40
0.35
46
87
151
229
0.37
0.35
0.32
0.30
0.25
0.24
0.21
0.19
1.16
1.07
1.02
0.96
0.55
0.52
0.48
0.45
0.38
0.67
1.07
1.51
0.37
0.67
1.02
1.40
1.72
2.99
4.95
7.07
0.30
315
0.28
0.17
0.92
0.41
1.94
1.72
9.32
0.25
0.20
430
554
0.26
0.24
0.15
0.14
0.88
0.82
0.38
0.34
2.46
2.93
2.07
2.49
12.17
14.61
2012 METALLURGY-Update pending
Copper
recovery
85%
Gold recovery
69%
Concentrate
25% Cu, 16.8 g/t Au, high Ag;
• Mineral Resources are reported within a
Whittle pit shell based on: 42 degree pit slope;
$2.20/tonne mine cost; $7.40/tonne process
cost;
• Mineral Resources are not Mineral Reserves
and do not have demonstrated economic
viability.
*CuEq - Copper Equivalent is calculated using US$3.00/lb copper , US$ 1,400/oz gold and US$23/oz silver, with no provision for metallurgical recoveries. The
formula used is CuEq% = Cu% + 0.6806*Au (g/t)+0.011*Ag(g/t). Small discrepancies may exist due to rounding errors.
Technical Report dated November 13, 2013 and amended March 24, 2014 and titled “Second updated mineral resource estimate for the Josemaria Property San
Juan Province Argentina” with an effective date of September 27, 2013 This report is available under the Company’s profile on SEDAR www.sedar.com
A growing resource with a near surface high grade core
39
Josemaria – September 2013 Oxide Resource
JOSEMARIA INDICATED MINERAL RESOURCE (Oxide)
Resource Grade
Contained Metal
Cutoff Million
Cu
Au
Ag
Au
Ag
(000 oz)
(000oz)
(CuEq*) Tonnes
(%)
(g/t)
(g/t)
0.40
0.35
0.30
0.25
10
16
23
31
0.18
0.17
0.16
0.15
0.47
0.44
0.40
0.37
1.39
1.38
1.34
1.28
150
230
300
370
450
710
990
1,280
0.20
45
0.14
0.32
1.19
460
1,720
0.15
0.10
69
97
0.13
0.12
0.27
0.23
1.10
1.01
600
720
2,440
3,150
Cutoff
(CuEq*)
•
•
JOSEMARIA INFERRED MINERAL RESOURCE (Oxide)
Resource Grade
Contained Metal
Million
Cu
Au
Ag
Au
Ag
(000
oz)
(000
oz)
Tonnes
(%)
(g/t)
(g/t)
0.40
0.35
0.30
0.25
0.4
1
2
3
0.11
0.05
0.04
0.04
0.44
0.39
0.37
0.35
1.15
1.01
0.99
0.98
6
13
24
34
15
32
64
95
0.20
3
0.05
0.33
0.97
32
94
0.15
0.10
5
11
0.05
0.09
0.28
0.19
0.87
0.79
45
67
140
280
• Mineral Resources are reported within a
Whittle pit shell based on: 42 degree pit slope;
$2.20/tonne mine cost; $7.40/tonne process
cost;
• Mineral Resources are not Mineral Reserves
and do not have demonstrated economic
viability.
*CuEq - Copper Equivalent is calculated using US$3.00/lb copper , US$ 1,400/oz gold and US$23/oz silver, with no provision for metallurgical recoveries. The
formula used is CuEq% = Cu% + 0.6806*Au (g/t)+0.011*Ag(g/t). Small discrepancies may exist due to rounding errors.
Technical Report dated November 13, 2013 and amended March 24, 2014 and titled “Second updated mineral resource estimate for the Josemaria Property
San Juan Province Argentina” with an effective date of September 27, 2013 This report is available under the Company’s profile on SEDAR www.sedar.com
An oxide gold zone
40
Josemaria Block Model
Plan view
Cutoff Class. Millons of
Grade
Tonnes
0.60
IND
209
CuEq
INF
8
0.50
INF
355
CuEq
INF
46
0.30
IND
789
CuEq
INF
315
Cu %
Au g/t
Ag g/t
CuEq*
0.51
0.45
0.44
0.37
0.35
0.28
0.37
0.28
0.33
0.25
0.24
0.17
1.37
1.19
1.27
1.16
1.08
0.92
0.78
0.65
0.68
0.56
0.53
0.41
> 0.8% CuEq*
0.7 – 0.8%
0.6 – 0.7%
0.5 – 0.6%
0.4 – 0.5%
0.3 – 0.4%
North
High-grade
Supergene
Zone
4280m Level
4520m Level
1 kilometre
See Technical Report dated March 24,
2014:“Second Updated Mineral Resource
Estimate for the Josemaría Property, San
Juan Province, Argentina.”
*CuEq - Copper Equivalent is calculated
using US$3.00/lb copper, US$ 1,400/oz
gold and US$23/oz silver, with no
provision for metallurgical recoveries.
The formula used is CuEq% = Cu% +
0.6806*Au (g/t)+0.011*Ag(g/t).
South
Shallow high-grade core with good lateral continuity
41
Contents
Introduction
Operations
Asset details
Management and board of directors
Financials
42
Management and Board
Expertise in Exploration; Project Studies; Financing; M&A Transactions
Management
Wojtek Wodzicki, CEO &
Director
Geology Ph.D; P. Geo 25 years international exploration management and
business experience. With Lundin Group since 2007. Previously with Teck.
Bob Carmichael, VP Ex
Geological Engineer, P. Eng. 24 years international experience. Strong
background in exploration project management and resource estimation.
Chester See, CFO
Chartered Accountant. C.A Strong background in financial management
and reporting.
Tony George, Project Manager
Mining Engineer, P. Eng. 30 years of international project and operational
management experience. Recently supervised successful construction of
diamond mine in Botswana.
Board
Lukas Lundin, Chairman
Successful entrepreneur focused on natural resources. Has led numerous
companies through successful M&A.
Bill Rand, Lead Director
Securities Lawyer (ret.) Senior Business Adviser to Lundin Group
Companies for more than 35 years.
Paul Conibear, Director
Engineer, P.Eng. CEO of Lundin Mining, past CEO of Tenke Mining.
David Mullen, Director
Finance professional. Expertise in merchant banking and private equity.
Former head of HSBC Capital (Canada), Fulcrum Capital.
43
Contents
Introduction
Operations
Asset details
Management and board of directors
Financials
44
Income statement and cash flow
Income statement
CAD thousands
Cash flow statement
Unaudited Unaudited Audited Audited Audited
Jan-Jun
2014
CAD thousands
Unaudited Unaudited Audited Audited Audited
Jan-Jun Jan-Dec Jan-Dec Jan-Dec
2013
2013
2012
2011
Cash flow, operating activities
changes in working capital
before
0
0
0
0
0
10 522
18 854
22 698
24 158
9 149
Salaries and benefits
467
710
1 068
941
425
Share-based compensation
693
608
1 038
1 422
1 220
Management fees
270
270
540
540
540
Professional fees
152
140
369
499
346
Travel
117
99
172
202
98
Promotion and public relations
254
218
355
376
287
Cash flow from investing activities
Exchange rate effect on cash and cash
equivalents
-
340
340
119
376
285
217
321
230
189
Revenues
Exploration and project investigation
Donation
Office and general
2 238
2 602
4 204
4 328
3 481
12 760
21 456
26 902
28 486
12 631
(18)
(133)
(235)
(115)
(189)
1 135
(187)
(148)
46
177
165
111
93
95
118
Gain on disposition of investments
-
-
(180)
-
(39)
Gain on disposition of royalty interests
-
-
-
(2 782)
-
General and Administration
Operating loss
Interest income
Foreign exchange loss (gain)
Other expenses
Unrealized loss (gain) on investments
Write-down of mineral property interests
Other (income) expenses
Net loss from continuing operations
Net loss from discontinued operations
Net loss
of which is attributable to shareholders of
the Company
of which is attributable to non-controlling
interest
(330)
594
660
946
-
-
1 196
1 196
-
-
952
1 581
1 386
(1 810)
67
13 712
23 037
28 288
26 675
12 697
13
73
84
6 875
6 376
13 725
23 110
28 372
33 550
19 073
13 725
23 110
28 372
33 550
19 073
-
-
-
-
-
Cash flow from changes in working capital
Cash flow, operating activities after changes
in working capital
Jan-Jun
2014
Jan-Jun Jan-Dec Jan-Dec Jan-Dec
2013 FY 2013 FY 2012 FY 2011
(13 112)
(20 549) (25 270) (30 554) (14 142)
(5 867)
(18 979)
(6 008)
(760)
548
4 794
(26 557) (26 030) (30 005)
(9 348)
33 423
33 332
33 378
508
28 361
(362)
(1 110)
(1 402)
4 591
(872)
(516)
171
(1 982)
867
(70)
Change in cash and cash equivalents
13 566
5 836
3 963 (24 040)
18 072
Cash and cash equivalents, beginning of year
21 260
17 297
17 297
41 337
23 265
Cash and cash equivalents, end of year
34 826
23 133
21 260
17 297
41 337
Cash flow from financing activities
Financial details can be found on the Company’s profile on SEDAR
www.sedar.com.
45
Balance sheet
Financial details can be found on the Company’s profile on SEDAR
www.sedar.com.
Balance sheet
CAD thousands
Unaudited Unaudited Audited Audited Audited
30 Jun
2014
30 Jun 31 Dec 31 Dec 31 Dec
2013 FY 2013 FY 2012 FY 2011
34 826
23 133
21 260
17 297
Investments
641
242
326
836
-
Due from joint exploration partners
248
-
-
-
-
ASSETS
Cash and cash equivalents
Receivables and other assets
Current assets
Equipment
Mineral properties
Other non-current assets
Non-current assets
TOTAL ASSETS
41 337
773
699
1 118
627
759
36 488
24 074
22 704
18 760
42 096
179
380
247
272
424
9 385
10 971
10 439
11 566
19 443
8
8
8
8
8
9 572
11 359
10 694
11 846
19 874
46 060
35 433
33 398
30 606
61 970
43 766
32 167
24 622
21 509
52 875
2 226
2 100
4 328
6 174
4 841
68
405
27
45
14
EQUITY & LIABILITIES
Total equity
Trade payables and accrued liabilities
Due to related parties
-
761
4 101
2 878
4 240
2 294
3 266
8 457
9 096
9 095
Other non-current liabilities
-
-
319
-
-
Non-current liabilities
-
-
319
-
-
46 060
35 433
33 398
30 606
61 970
43 766
32 167
24 622
21 509
52 875
-
-
-
-
-
Due to join exploration partners
Current liabilities
TOTAL EQUITY & LIABILITIES
equity attributable to shareholders of the
Company
equity attributable to non-controlling
interest
46