Opportunity Knocks. Investor Presentation August 2015

Transcription

1 Opportunity Knocks Investor Presentation August 2015

2 Forward Looking Statements This presentation contains certain statements that may be deemed forward-looking statements. Forward looking statements are statements that are not historical facts and are generally, but not always, identified by the words expects, plans, anticipates, believes, intends, estimates, projects, potential and similar expressions, or that events or conditions will, would, may, could or should occur and include, without limitation, statements regarding the Company s plans with respect to statements about the Company s ability to fund and execute the proven ore processing business model, and the potential economics and returns of that business model, outlined in this presentation. Although Standard Tolling 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 may differ materially from those in forward looking statements. Forward looking statements are based on the beliefs, estimates and opinions of the Company s management on the date the statements are made. Except as required by law, the Company undertakes no obligation to update these forward-looking statements in the event that management s beliefs, estimates, opinions, or other factors, should change.

3 Standard Tolling Corp. PLANT NEARING FINAL COMPLETION: TON is nearing completion of the 100 TPD high-grade ore processing plant located in Northern Peru. No major hurdles exist and commissioning is expected to commence in the next 4-6 weeks. ORE PURCHASE PROGRAM ACCELERATING: TON started purchasing oxide ores at the end of May. Recently, TON averaged over 50 TPD of deliveries over a one week period with another large contract starting in September. EXCELLENT GEOGRAPHICAL LOCATION: TON has the only permitted processing plant of its size in the region, within a prolific gold mining jurisdiction. The location provides the local miners a compelling savings opportunity due to high cost of transport. WELL FUNDED ORE PURCHASE PROGRAM: TON completed an Ore Note Offering, a dedicated debt facility that will allow TON to transact quickly with miners, a major advantage over poorly funded competitors. INDUSTRY RECOGNIZED OPERATORS: TON achieved tremendous savings by completing all the construction and engineering in-house, only made possible due to the experience of the team.

4 A Proven Team OPERATIONS: LEGAL: CEO and Founder: Leonard Clough, former Investment Advisor at RBC Dominion Securities and Director, Dynasty Metals & Mining. Chief Operational Advisor: Carlos Mirabal, former CEO of Orvana Minerals and former VP and Head of Operations at Comsur. VP Peru Operations: Edgar Barrios Jimenez, former VP Operations of Orvana Minerals. He also oversaw the expansions of Don Mario, from 650 TPD to 3000 TPD capacity. Plant Manager: Jhonny Espinoza, former plant manager at Don Mario. Head Legal Advisor: Luis Rodriguez Mariategui-Canny, Partner at Hernandez & Co. In-house lawyer handles all regional permitting details and contracts. FINANCIAL: Financial Advisor: David Franklin, former CEO of Sprott Private Wealth. CFO: Dan O Brien, formerly with Davidson & Company LLP. In-Country Controller, formerly with Hudbay Minerals. INVESTOR RELATIONS: Scott Koyich, Brisco Capital. CORPORATE ADMINISTRATION: Golden Oak Corporate Services, Doris Meyer. STRATEGIC ADVISORY: Alex Davidson, former Executive VP at Barrick Gold.

5 In House Expertise

6 Transformation Since January 2015 Purchase

7 Ore Processing vs. Conventional Mining Exploration Mining Refining Trading ORE PROCESSING companies have a much simpler business model than traditional mining companies. ORE PROCESSING companies enjoy the following advantages: Ore is purchased, not mined, and only after careful selection and testing. Ore supply comes from several sources, so no dependence on one mine. Commodity price fluctuations have a minimal impact on earnings because margins are set at time of purchase and processing occurs shortly thereafter. The path to cash flow is much shorter and payback is quicker because there are less permitting and development challenges. Processing is also less capital intensive.

8 The Major Challenge of Mining The greatest challenge of mining today is cost of production, not processing. Source: Scotiabank GBM and Thomson Reuters GFMS

9 Toll Processing in Peru Peru is among the most mature and advanced markets for foreign investment into the sector. Why? TOP GOLD MINING DESTINATION. STRONG GOVERNMENT POLICY: The small scale mining sector underwent major reform in 2012 and formalization efforts continue. INCREASED DEMAND FOR PROCESSING CAPACITY: New regulations have forced several non-compliant plants to close creating new demand for new and efficient plants. UNDERCAPITALIZED PLAYERS GETTING FORCED OUT: The competition for ore has increased and so has the need for efficiency and recoveries, all dictated by level of investment. SUCCESS STORIES EXIST: The sector has been led by other Canadian companies who have performed exceptionally well.

10 Formalization Applications Under the Formalization Mandate announced in March 2012, many unpermitted miners registered with the authorities. In exchange, they were granted a special permit to continue mining and were provided a timeline in which to establish formal status. These miners are legally allowed to sell their ore to processing plants. Above is a summary of all the issued permits granted by region. TON is focused on servicing the less crowded centro and norte regions only.

11 A Very Ideal Location TRUJILLO HUAMACHUCO PATAZ LIMA TON performed surveying of small mining activity north of Lima in order to identify the ideal location for a processing plant (greatest small mining density marked in RED).

12 Operational Status CRUSHING CIRCUIT: Required for sample preparation used to purchase mineral. Fully operational, including truck scale for past 45 days. Daily throughput increasing, with purchases recently hitting 50 TPD. Bottlenecks should cease when onsite laboratory operations commence. CARBON-IN-LEACH CIRCUIT: Used for processing the crushed oxide ores held in inventory. Nearing completion now, with water tests ongoing. Delayed equipment deliveries being received in the next two weeks. Tailings dams under construction with a month end completion date. Permitting delays, involving two minor permits, should be rectified in the next month. Plan in place to fully load circuit within six weeks, inventory for loading at 30%. DESORPTION CIRCUIT: Used to strip carbon, pour dore, and carbon regeneration. Now fully constructed and undergoing installation for first use in 90 days. ORE PURCHASE OPERATIONS: Division of company solely focused on ore procurement. Recently reorganized, with new purchase programs and a new division leader. Software and hardware installations underway to assist in administration. Visibility of mineral deliveries greatly improved and market knowledge increasing. Dedicated debt facility in place to buy all necessary ore at 100 TPD.

13 Additional CAPEX Four additional CAPEX projects were added in the past two months which increased the initial capex estimates. They were: TANK CAPACITY: An additional tank was added in order to provide greater residence time to improve recoveries and it was most cost effective to not delay the installation. COMMUNICATIONS INFRASTRUCTURE: Broadband proved to be unreliable and the installation of the new tower has provided much better information flow to and from the plant. OPERATIONAL SOFTWARE: The Peru compliance reporting obligations requires specialized software that has been sourced and installed. LAND PURCHASE: A strategic land parcel was acquired when it became for available for purchase.

14 Chronology of Events Dec. 30, 2014 Dec. 30, 2014 Jan. 14, 2015 Mar. 25, 2015 Mar. 31, 2015 Apr. 14, 2015 Jul. 2, 2015 USD $1.85m acquisition of plant. $2.64m equity financing closes. Edgar Barrios Jiminez and team join company. USD $1m first tranche closing of the Ore Note Financing. $1.82m equity financing closes, plant construction 80% complete. USD $462k second tranche closing of Ore Note Financing. Final closing of the Ore Note Financing totaling USD $2.25m. FUTURE MILESTONES Now - End Q3 Early Q4 Early Q4 Late Q4 Commission plant at min. capacity of 30 TPD. Commence sulphide mineral purchase program. Inaugural gold pour. Construct and install floatation circuit. Achieve 100 TPD throughput.

15 Simple Debt Summary Plant Debt Two Components USD $1.325m debt was assumed when the plant was purchased. TON has an agreement in principle to extend the maturity on USD $1m (of the USD $1.325m) to June 30, Verbal agreement is getting formalized. Ore Debt USD $2.25m Ore Note Offering has a 3 year maturity and is considered restricted cash on balance sheet. USD $1.75m is restricted for ore purchases. Ore Note holders have a first lien, fully registered, on all the ore purchased. Ore Debt holders also receive a 2% net revenue royalty on production. Summary Plant Debt (12% due Dec. 31, 2015)...USD $1,325,000 Ore Debt (10% due July 7, 2018) USD $2,250,000

16 Capital Structure Share Price (Aug. 6, 2015).... $0.10 Market Capitalization.... $5.5m Insider, Management & Friends Ownership.20% Shares Issued 54,450,486 Warrants Outstanding....43,865,122 Options Outstanding...3,682,216 Shares Fully Diluted..101,997,824 Estimated FD Cash (incl. Current Cash Balance).CAD $10.90m

17 Summary A low cost operating structure, managed almost entirely from Peru. A proven team with significant operating history together. A higher level of PREDICTABILITY has been reached on several fronts: Construction nearing final completion with no anticipated major hurdles ahead. Outstanding CAPEX items are minor. Timeline to production is short. Ore feed visibility has dramatically improved. Ore deliveries are ramping beyond recent record of 50 tons of daily purchases, despite current bottlenecks that should be alleviated with the lab becoming operational within 30 days. Flotation circuit installation will allow the Company to enter the much larger sulphide market, and allow the Company to better service existing clientele. This will allow inventories to grow and achieve maximum production faster. Excellent location, little competition, makes it the plant of choice to local miners providing significant transport savings.

18 Board of Directors Len Clough, President, CEO & Chairman Mr. Len Clough worked at RBC Dominion Securities in Vancouver from 1998 to From 2010 to 2013, he served as Managing Director of Kingfisher Advisors SA ( Kingfisher ), a money management firm. Mr. Clough has also been a Director of Dynasty Metals and Mining ( Dynasty ) since May 2011; Dynasty is a TSX listed mining company with operations in Ecuador. Mr. Clough is founder of the Company. Dr. Luis Rodríguez-Mariátegui Canny, Director Dr. Rodríguez-Mariátegui has 27 years of experience and is an expert in mining law in Peru. He is a partner of Hernandez & Cia law firm, which specializes in mining, environmental and corporate law. He is the Past-President of the Mining-Legal Committee of the National Society of Mining, Oil and Energy ( SNMPE ) and a former member of the Advisory Council of the Mining area of the Registry Zone IX Lima, Peru headquarters. He is also a member of the Environmental Affairs Committee of SNMPE and a director and Past-President of Instituto de Estudios Energético Mineros ( IDEM ) (Institute of Mining Energetic Studies). Carlos H. Fernandez Mazzi, Director Mr. Mazzi s career is highlighted by his leadership in the development of the US $1.0 billion San Cristobal project in Bolivia as CEO of Minera San Cristobal S.A. He was also the CEO of the W.J. Clinton Foundation's Clinton Giustra Sustainable Growth Initiative with a focus on impact investing and sustainable development in Latin America.

19 Advisory Board Alex Davidson, Advisor Mr. Davidson was Barrick Gold s Executive Vice President, Exploration and Corporate Development with responsibility for international exploration programs and corporate development activities. Mr. Davidson joined Barrick in October 1993 as Vice President, Exploration with responsibility for the company's expanding exploration program. He initiated Barrick s expansion out of North America and into Latin America and beyond. Prior to joining Barrick, Mr. Davidson was Vice President, Exploration for Metall Mining Corporation. Mr. Davidson has over 25 years of experience in designing, implementing and managing gold and base metal exploration and acquisition programs throughout the world. In April 2005, Mr. Davidson was presented the 2005 A.O. Dufresne Award by the Canadian Institute of Mining, Metallurgy and Petroleum to recognize exceptional achievement and distinguished contributions to mining exploration in Canada. In 2003, Mr. Davidson was named the Prospector of the Year by the Prospectors and Developers Association of Canada in recognition for his team's discovery of the Lagunas Norte Project in the Alto Chicama District, Peru. He received his B.Sc. and his M.Sc. in Economic Geology from McGill University. Carlos Mirabal, Chief Operational Advisor Mr. Mirabal has more than 35 years of experience in the mining industry. From 2006 to 2010, he served as President & CEO of Orvana Minerals Corp. Prior to that, Mr. Mirabal spent 33 years with Compania Minera del Sur S.A. ("Comsur ), where he served as Vice President of Operations. In this position, he was a key member of the management team responsible for the construction and operation of Orvana s Don Mario Mine in Bolivia.

20 Contact Information Registered Office Unit Marine Drive White Rock, BC, Canada V4B 1E6 Tel: (604) ext. 5 for Dan O Brien, CFO Fax: (604) Investor Inquiries: Scott Koyich, Brisco Capital Partners [email protected] +1 (403) Other Inquiries: [email protected] Website: