INVESTOR PRESENTATION. June, 2016

Transcription

1 INVESTOR PRESENTATION June, 2016

2 Cautionary Statement Cautionary Note Regarding Forward-Looking Information Certain information contained in this presentation constitutes forward-looking statements. All statements, other than statements of historical facts, are forward looking statements including statements with respect to the closing of the underwritten private placement and the Company s intentions for its Hermosa Project in Arizona, USA including, without limitation, future drilling and other work on the Taylor Deposit, and the statements under Outlook later in this document. Forward-looking statements are often, but not always, identified by the use of words such as may, will, seek, anticipate, believe, plan, estimate, budget, schedule, forecast, project, expect, intend, or similar expressions. The forward-looking statements are based on a number of assumptions which, while considered reasonable by Arizona Mining, are subject to risks and uncertainties. In addition to the assumptions herein, these assumptions include the assumptions described in Arizona Mining's management's discussion and analysis for the year ended December 31, 2015 ("MD&A"). Arizona Mining cautions readers that forward-looking statements involve and are subject to known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements to differ materially from those expressed in or implied by such forward-looking statements and forward-looking statements are not guarantees of future results, performance or achievement. These risks, uncertainties and factors include general business, economic, competitive, political, regulatory and social uncertainties; actual results of exploration activities and economic evaluations; fluctuations in currency exchange rates; changes in project parameters; changes in costs, including labour, infrastructure, operating and production costs; future prices of zinc, lead, silver and other minerals; variations of mineral grade or recovery rates; operating or technical difficulties in connection with exploration, development or mining activities, including the failure of plant, equipment or processes to operate as anticipated; delays in completion of exploration, development or construction activities; changes in government legislation and regulation; the ability to maintain and renew existing licenses and permits or obtain required licenses and permits in a timely manner; the ability to obtain financing on acceptable terms in a timely manner; contests over title to properties; employee relations and shortages of skilled personnel and contractors; the speculative nature of, and the risks involved in, the exploration, development and mining business; and the factors discussed in the section entitled "Risks and Uncertainties" in the MD&A. Although Arizona Mining has attempted to identify important risks, uncertainties and other factors that could cause actual performance, achievements, actions, events, results or conditions to differ materially from those expressed in or implied by the forward-looking information, there may be other risks, uncertainties and other factors that cause performance, achievements, actions, events, results or conditions to differ from those anticipated, estimated or intended. Unless otherwise indicated, forward-looking statements contained herein are as of the date hereof and Arizona Mining disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events or results or otherwise, except as required by applicable law. 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 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. All Dollars are United States Dollars. All tons are short tons unless stated otherwise. 2

3 Company Profile Owns 100% of Hermosa Project Taylor Deposit discovered in 2015 a significant zinc, lead, and silver sulfide resource Well respected, high caliber management team including Richard Warke, Jim Gowans and Don Taylor Cash balance at June 1, 2016 of ~C$28 million (1) Large, under-explored land package (1) Includes net proceeds expected on closing of underwritten private placement. 3

4 Hermosa Project Location Company holds 100% interest in: 450 acres Patented Mining Claims 16,600+ acres Unpatented Mining Claims Current resource centered on the patented mining claims State of Arizona has long mining history Close to required infrastructure (1) 4

5 Taylor Deposit Significant Zn/Pb/Ag Discovery (1) 5

6 Highlighted Drill Intersections Taylor Deposit HDS-331: 41.5 feet (12.6 meters) at 29.41% Pb/Zn, 6.37 oz Ag, 0.89% Cu HDS-332: 43.5 feet (13.3 meters)at 34.12% Pb/Zn, 5.63 oz Ag, 0.07% Cu HDS-334: 425 feet (129.5 meters) at 7.47% Pb/Zn, 1.49 oz Ag, 0.14% Cu HDS-338: 61.5 feet (18.7 meters) at 29% Zn/Pb, 9.32 oz Ag, 0.28% Cu HDS-339: 57 feet (17.4 meters) at 45% Zn/Pb, 8.82 oz Ag, 0.17% Cu 6

7 Long Section Taylor Deposit 7

8 Cross Section Taylor Deposit 8

9 Mineralization Taylor Deposit Location relationship of sulfide mineralization (CRD) to manto oxide (MRZc and MRZs) 9

10 Inferred Resource Taylor Deposit 39.4 Million 11.04% ZnEq Zn Eq% Cutoff Zn Eq% Grade Tonnes (Mt) Pb% Zn% Cu% Ag g/t Results are based on a ZnEq grade calculated with the following metal prices: $0.85/lb for lead and zinc; $2.25/lb for copper; $15/oz for silver. Mineral resources are not mineral reserves and do not have demonstrated economic viability. There is no certainty that all or any part of mineral resources will be converted to mineral reserves. 10

11 Scoping Level Metallurgical Results Taylor Deposit Initial Bench-Scale Flotation Results: Lead Recoveries: 92.9% recovery of lead 76% recovery of silver Zinc Recoveries: 85.5% recovery of zinc 15% recovery of silver Excellent Concentrate Grades Indicated: 75% for lead in concentrate 56% for zinc in concentrate No Deleterious Elements in the Concentrates 11

12 Expansion Potential Taylor Deposit 12

13 Expansion Potential Taylor Deposit 13

14 Expansion Potential Taylor Deposit 2016 Drill Program Planned 28 hole 125,000 foot drill program Test potential of Taylor Deposit 5 drill rigs, increasing to 8 Results from first two holes: HDS-338 Intervals: feet (30.9 meters) at 18% Zn/Pb, 6.13 oz Ag, 0.19% Cu, including 61.5 feet (18.7 meters)at 29% Zn/Pb, 9.32 oz Ag, 0.28% Cu HDS-339 Intervals: 108 feet (32.9 meters) at 31% Zn/Pb, 5.51 oz Ag, 0.15% Cu, including 57 feet (17.4 meters) at 45% Zn/Pb, 8.82 oz Ag, 0.17% Cu 14

15 Zinc Fundamentals-$1.55/lb by 2018 Taylor Deposit Zinc inventories at lowest since 2009 Mine production down Century, Lisheen, and other closures Spot treatment charges at lowest levels for years Price forecast to increase due to structural imbalance - $1.55/lb by 2018 See appendix for data 15

16 Deliverables Taylor Deposit Compete planned 2016 drill program Q3-16 Update inferred resource Q4-16 PEA Q2-17 Feasibility Q

17 Reasons to Own AZ Large, high grade Zn/Pb/Ag resource and growing Simple processing, high recoveries, no deleterious elements, high grade concentrates Only 20% of potential mineralized area tested by drilling Proven management team Mining friendly jurisdiction Large land package with additional exploration potential 17

18 Capital Structure Toronto Stock Exchange Trading Symbol Issued and Outstanding Issued Options and warrants Fully Diluted Share Price as of May 31, 2016 Market Capitalization AZ million 44.1 million million C$1.60 C$351 million Average Volume (20 days) 319, Week High/Low C$1.79/$0.22 Management/Insider Ownership ~44% 18

19 Management Richard W. Warke Executive Chairman James Gowans President and CEO Donald R. Taylor COO Paul J. Ireland Chief Financial Officer Gregory F. Lucero Vice President, Community and Government Affairs Purni Parikh Vice President, Corporate Secretary Johnny Pappas Director, Environmental and Permitting Founder of the Company (Chairman and CEO). He was also the founder and Chairman of Ventana Gold Corp which was sold for C$1.533 billion and Augusta Resource Corporation which was sold for C$666 million. Richard is currently the President, CEO and Director of Catalyst Copper. He has more than 25 years of experience in corporate finance and marketing in the global resource industry, and has been involved in raising over $1 billion dollars in equity for resource companies. Although his endeavours have primarily involved mineral resource operations, he has also been involved with oil and gas, forestry, technology and manufacturing operations. Mr. Gowans was formerly Co-President of Barrick Gold Corporation from July 2014 to August 2015 and Executive Vice President and Chief Operating Officer from January to July Recent prior roles include Managing Director of Debswana Diamond Company (Pty) Ltd., President and Chief Executive Officer of De Beers Canada Inc., Chief Operating Officer and Senior Vice President of International Nickel Indonesia tbk PT and Executive Vice President at Placer Dome Inc. Mr. Gowans has more than 30 years of experience in mineral exploration, mine feasibility studies, opening new mines, commissioning mine expansions and in the development of best practices in mine safety, mine operations and economic performance improvement. Mr. Gowans is a Professional Engineer and received a bachelor of applied science degree in mineral engineering from the University of British Columbia and attended the Banff School of Advanced Management. 30 years of successful mineral exploration experience on more than five continents in base and precious metals, taking projects from exploration to mine development; was previously at Doe Run Resources and BHP Minerals; has Bachelor of Science degree in Geology from Southeast Missouri State University and a MSc from University of Missouri at Rolla; Licensed Professional Geologist in several states and QP as defined by NI Extensive financial experience in mining and forestry; Chartered Accountant; also CFO of Catalyst Copper. Other recent CFO roles with Ventana Gold Corp prior to its acquisition in 2011, Diavik Diamond Mines Inc. and Western Forest Products Inc. More than 20 years of management experience in both the public and private sector, as well as an extensive background in the executive government working for local, state, and federal elected officials; holds a Bachelor of Arts degree in Political Science from the University of Arizona. More than 22 years experience in business administration including more than 17 years experience with public companies in the areas of communications, investor relations and legal administration; also Corporate Secretary for Plata Latina Minerals and Catalyst Copper, as well as Augusta Resource Corporation prior to its recent acquisition. Mr. Pappas has a distinguished career in the field of environmental management and permitting. Mr. Pappas recently held the position of Director of Environmental Affairs for Romarco Minerals Inc. where he was instrumental in directing the federal and state permitting of the Haile Gold Mine; the first gold mine permitted east of the Mississippi in the last 20 years. He was previously the Environmental Manager of the Climax Mine and was Permit Coordinator for Barrick s Cortez Gold Mines. In addition, he has held several Senior Environmental Engineer positions with Pacificorp, Plateau Mining and Santa Fe Pacific Gold. Mr. Pappas holds a B.Sc. degree in Geology and Business Administration. 19

20 Directors Richard W. Warke Executive Chairman James Gowans Director Poonam Puri Director Don Taylor Director Donald R. Siemens Director Robert P. Wares Director Founder of the Company (Chairman and CEO). He was also the founder and Chairman of Ventana Gold Corp which was sold for C$1.533 billion and Augusta Resource Corporation which was sold for over C$666 million. Richard is currently President, CEO and Director of Catalyst Copper. He has more than 25 years of experience in corporate finance and marketing in the global resource industry, and has been involved in raising over $1 billion dollars in equity for resource companies. Although his endeavours have primarily involved mineral resource operations, he has also been involved with oil and gas, forestry, technology and manufacturing operations. Mr. Gowans was formerly Co-President of Barrick Gold Corporation from July 2014 to August 2015 and Executive Vice President and Chief Operating Officer from January to July Recent prior roles include Managing Director of Debswana Diamond Company (Pty) Ltd., President and Chief Executive Officer of De Beers Canada Inc., Chief Operating Officer and Senior Vice President of International Nickel Indonesia tbk PT and Executive Vice President at Placer Dome Inc. Mr. Gowans has more than 30 years of experience in mineral exploration, mine feasibility studies, opening new mines, commissioning mine expansions and in the development of best practices in mine safety, mine operations and economic performance improvement. Mr. Gowans is a Professional Engineer and received a bachelor of applied science degree in mineral engineering from the University of British Columbia and attended the Banff School of Advanced Management. Poonam Puri, Professor of Law and formerly Associate Dean at Osgoode Hall Law School and affiliated scholar to Davies Ward Phillips & Vineberg LLP, is one of Canada s most respected scholars and commentators on issues of corporate governance, corporate law, securities law and financial regulation. Professor Puri is a member of the Board of Directors of the Greater Toronto Airports Authority and also sits on the Board of Directors of Toronto s Women s College Hospital. Professor Puri has a Bachelor of Laws (LLB) degree from the University of Toronto, a Master of Laws (LLM) degree from Harvard Law School and is a member of the Institute of Corporate Directors. 30 years of successful mineral exploration experience on more than five continents in base and precious metals, taking projects from exploration to mine development; was previously at Doe Run Resources and BHP Minerals; has Bachelor of Science degree in Geology from Southeast Missouri State University and a MSc from University of Missouri at Rolla; Licensed Professional Geologist in several states and QP as defined by NI Independent financial advisor specializing in corporate finance, cross-border transactions and mergers and acquisitions; previously, Partner-in-Charge of Thorne Ernst & Whinney's (now KPMG) Vancouver office Financial Advisory Services group; over 30 years of experience as a Chartered Accountant; currently Director and Audit Committee Chair for Hansa Resources Limited, Nikos Explorations Ltd, Spur Ventures Inc., Argentex Mining Corporation, Boss Power Corp. Grande West Transportation Inc. and Goldgroup Mining Inc. and Director and Audit Committee member for Great Western Minerals Group Inc. Donald obtained his Chartered Accountant designation in Professional geologist with more than 30 years experience in mineral exploration and research; currently President and CEO of NioGold Mining Corporation, Chief Geologist for Osisko Gold Royalties Ltd. and director of several public mining companies; former Executive VP, COO and Founding Director of Osisko; previously, Director and Audit Committee member of Augusta Resource Corporation. Mr. Wares holds a Bachelor s Degree (Honours) in Geology and an Honorary Doctorate in Sciences from McGill University. 20

21 Qualified Persons Taylor Deposit Resource and Drill Results Scott Wilson, President of Metal Mining Consultants, is an independent qualified person as defined by National Instrument has approved and verified the information in relation to the Taylor Deposit resource estimates. Mr. Wilson is a Certified Professional Geologist and member of the American Institute of Professional Geologists (CPG #10965) and a Registered Member (# ) of the Society of Mining, Metallurgy and Exploration, Inc., a professional association and designation recognized by the Canadian regulatory authorities. The results of Arizona Mining s drilling results have been reviewed, verified and compiled by Donald Taylor, MSc., PG, President and Chief Operating Officer for Arizona Mining, a qualified person as defined by National Instrument (NI ). Mr. Taylor has more than 25 years of mineral exploration and mining experience, and is a Registered Professional Geologist through the SME (registered member # ). Mr. Taylor is also a Licensed Professional Geologist in several US states. Central Deposit Prefeasibility Study, Reserves and Resources Joshua Snider, PE, an independent Qualified Person under the standards set forth by NI , was responsible for preparing the information in relation to the pre-feasibility. Mr. Snider is a Civil Engineer with M3 and has over 15 years of experience in the engineering and mining industry. Metallurgical test results included in the pre-feasibility study have been reviewed, verified, and interpreted by Christopher Easton, BSc., Chemical Engineering, a Qualified Person under the standards set forth by NI Mr. Easton is the president of Easton Process Consulting Inc. has 24 years of mineral processing and metallurgical engineering experience, and is a Qualified Professional Member in Metallurgy of MMSA. Scott Wilson, President of Metal Mining Consultants, is an independent qualified person as defined by National Instrument was responsible for preparing the information in relation to the Hermosa Central mineral reserve and mineral resource estimates, including the Hermosa North West mineral resource. Mr. Wilson is a Certified Professional Geologist and member of the American Institute of Professional Geologists (CPG #10965) and a Registered Member (# ) of the Society of Mining, Metallurgy and Exploration, Inc., a professional association and designation recognized by the Canadian regulatory authorities. Timothy George, PE, an independent Qualified Person under the standards set forth by NI , reviewed and was responsible for preparing the information for the Hermosa reserve determination and mine plan in the pre-feasibility study. Mr. George is a Mining Engineer with Metal Mining Consultants. Process design criteria and cost estimates for the EMM facility in relation to the pre-feasibility study have been reviewed by Terry McNulty, D Sc, PE., a Qualified Person under the standards set forth by NI Dr. McNulty is President of T. P. McNulty and Associates, Inc., has over 50 years of experience in mineral processing and extractive metallurgical engineering, and is a Registered Member of SME. 21

22 Appendix ZINC MARKET DATA TAYLOR DEPOSIT DRILL DATA CENTRAL DEPOSIT INFORMATION 22

23 Appendix Zinc Inventories at Lowest Since 2009 Source: Scotiabank April 12,

24 Appendix Zinc Spot Treatment Charge China CIF spot TC s expected in $125-$135/t range Chinese smelters expected to cut production as inventory tightness sets in Source: Scotiabank April 12,

25 Appendix Zinc Forecast to be in a Deficit for Next Three Years Zinc price expected to break out on projected deficit Scotiabank s Patricia Mohr forecasts $1.55 for E 2017E 2018E 2019E 2020E Gross total mine production 12,105 12,552 12,722 12,835 12,956 13,302 13,271 13,837 14,251 14,922 15,279 Less disruption allowance (398) (415) (428) (448) (458) Net mine production 12,105 12,552 12,722 12,835 12,956 13,302 12,873 13,422 13,823 14,474 14,821 Growth 3.7% 1.4% 0.9% 0.9% 2.7% -3.2% 4.3% 3.0% 4.7% 2.4% Concentrate surplus/(deficit) (395) (196) (110) Refined zinc production 12,715 12,968 12,454 12,935 13,281 13,903 13,431 13,909 14,329 14,981 15, % -4.0% 3.9% 2.7% 4.7% -3.4% 3.6% 3.0% 4.6% 2.6% Consumption 11,693 12,551 12,827 13,295 13,887 13,989 14,077 14,281 14,538 14,815 15, % 2.2% 3.6% 4.5% 0.7% 0.6% 1.4% 1.8% 1.9% 1.9% Net surplus/(deficit) 1, (373) (360) (606) (86) (646) (372) (209) Source: Scotiabank April 12,

26 Appendix Zinc Mine Closures v New Supply Source: Scotiabank April 12,

27 Appendix Taylor Deposit 2016 Drill Program Results to May 6, 2016 DH_ID From (feet) To (feet) Interval (in feet) From (meters) To (meters) Interval (meters) Ag opt Cu% Pb% Zn% HDS HDS HDS-338 Including HDS HDS HDS HDS HDS HDS HDS HDS HDS HDS HDS-339 Including HDS HDS HDS HDS HDS HDS HDS HDS HDS HDS HDS

28 Appendix Central Deposit Prefeasibility Study Highlights After-tax NPV (5%) of $830 million, after-tax IRR of 21.3%, and payback of 2.8 years (1) Average silver production of 12.2 million ounces per year for the first five years and 5.7 million ounces per year for the life of mine (LOM) Average EMM production of 110 million pounds per year for the LOM Average cash costs of $4.35 per ounce silver and $0.74 per pound of Electrolytic Manganese Metal (EMM) for the first five years and $4.45 per ounce of silver and $0.73 per pound of EMM for the LOM (1,2) Average silver cash costs, considering all other metals as by-products (1), of $(4.37) per ounce for LOM Mine life of 18 years Initial capital expenditures of $834.6 million including $189.3 million for a 55,000 tons per annum EMM plant 1. Based on metal prices of: $23.50/oz Ag, $1,250/oz Au, $1.19/lb EMM, $0.92/lb Zn, $3.25/lb Cu. 2. Cash costs are calculated on a co-product basis whereby production costs are allocated to silver and manganese based on the relative revenues of each metal. Silver cash costs are net of gold, zinc and copper by-products. 28

29 Appendix Central Deposit Ore Type Central Deposit Reserve and Resource Estimate (1)(3) Tons (000s) Ag (opt) Mn % Total Proven and Probable Mineral Reserves Contained Ag Ounces (000s) Contained Mn lbs (000s) Total Proven 31, ,737 4,051,000 Total Probable 28, ,339 3,182,000 Total Proven & Probable 59, ,076 7,233,000 Total Measured and Indicated Mineral Resource (Inclusive of Reserves) (2) Measured 76, ,120 4,898,000 Indicated 105, ,043 5,443,000 Measured & Indicated 181, ,163 10,341,000 Total Inferred Mineral Resource (2) Inferred 45, ,068 1,238, Mineral reserve and resource for the Manto Oxide and Upper Silver Zone only. See QP information in this presentation. 2. Mineral resources that are not mineral reserves do not have a demonstrated economic viability. Mineral resources are inclusive of mineral reserves. 3. Metal prices used: $27.06/oz Ag, $0.82/lb Mn, $1,468/oz Au, $0.92/lb Zn, and $3.54/lb Cu. 29

30 TSX:AZ Contact: Paul Ireland Tel: (604)