International Mining Congress, Nicaragua – August – 2016
Cautionary Statement This presentation contains certain “forward-looking statements”. Forward-looking statements express, as at the date of this presentation, the Company’s plans, estimates, forecasts, projections, expectations or beliefs as to future events or results. Forward-looking statements in this presentation include, but are not limited to, statements with respect to the Preliminary Economic Assessment for the San Albino Gold Deposit (the “PEA”), the results of the PEA, interpretation of the results of the PEA, the merits of the Company’s mineral properties, mineral resource estimates, and the Company’s plans, exploration programs and studies for its mineral properties, including the timing of such plans, programs and studies. In certain cases, forward-looking statements can be identified by the use of words such as “plans”, “proposed”, “has proven”, “expects” or “does not expect”, “is expected”, “potential”, “upside”, “appears”, “budget”, “schedule”, “estimates”, “forecasts”, “aim”, “intends”, “anticipates”, “at least”, “does not anticipate”, or “believes”, or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “should”, “might” or “will be taken”, “occur” or “be achieved”. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such risks and other factors include, among others, risks related to uncertainties inherent in the preparation of preliminary economic assessments and the estimation of mineral resources; commodity prices; changes in general economic conditions; market sentiment; currency exchange rates; the Company's ability to continue as a going concern; the Company's ability to raise funds through equity financings; risks inherent in mineral exploration; risks related to operations in foreign countries; future prices of metals; failure of equipment or processes to operate as anticipated; accidents, labour disputes and other risks of the mining industry; delays in obtaining governmental approvals; government regulation of mining operations; environmental risks; title disputes or claims; limitations on insurance coverage and the timing and possible outcome of litigation. Although the Company has attempted to identify important factors that could affect the Company and may cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, the reader is cautioned not to place undue reliance on these forward-looking statements. All statements are made as of the date of this presentation and the Company is under no obligation to update or alter any forward-looking statements. The data contained herein is provided for informational purposes only. Unless otherwise specified, all financial figures in this presentation are in Canadian dollars. Forward-looking statements are based on assumptions that the Company believes to be reasonable, including expectations regarding mineral exploration and development costs; expected trends in mineral prices and currency exchange rates; the accuracy of the Company's current mineral resource estimates; that the Company's activities will be in accordance with the Company's public statements and stated goals; that there will be no material adverse change affecting the Company or its properties; that all required approvals will be obtained and that there will be no significant disruptions affecting the Company or its properties. Certain technical data in this presentation was taken from the NI 43-101 technical report dated April 29, 2015 and titled “Resource Estimate and Preliminary Economic Assessment on the San Albino Deposit, San Albino-Murra Concession, and El Jicaro Concession, Republic of Nicaragua” prepared by P&E Mining Consultants Inc. (“P&E”) and is subject to all of the assumptions, qualifications and procedures described therein. John M. Kowalchuk P.Geo., a geologist and Project Manager of the Company, is a Qualified Person for Golden Reign Resources Ltd. as defined by National Instrument 43-101 (“NI 43-101”) and has prepared or supervised the preparation of technical information included in this presentation. Eugene Puritch, P.Eng. of P&E who is an Independent Qualified Person (as defined under NI 43-101) has approved the technical information pertaining to open-pit resource tonnages and grades at various gold price sensitivities contained in this presentation. The PEA is a conceptual study of the potential viability of mineral resources. The potential mill feed tonnages utilized in the PEA contain both Indicated and Inferred resources. The reader is cautioned that Inferred Resources are considered too speculative geologically to have economic considerations applied to them that would enable them to be categorized as Mineral Reserves, and there is no certainty that value from such Resources will be realized either in whole or in part. As the Company does not intend to complete a Pre-Feasibility or Feasibility Study prior to potentially commencing small scale production at the San Albino Gold Deposit there is an increased risk that the economic and technical aspects of the PEA may not be realized The TSX Venture Exchange (“TSX-V”) has not reviewed and does not accept responsibility for the adequacy or accuracy of this presentation. We seek safe harbour.
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Nicaragua
The San Albino Project falls in the lowest cost quartile and is situated within a great jurisdiction.
Bonanza
El Limon
La Libertad
•
Pro-mining government underpinned by modern mining laws
•
25 year exploration and exploitation concessions
•
Tax regime : 30% net profits tax, 3% NSR
•
Skilled labour available
•
Modern infrastructure (site roads – easy access)
•
Repatriation of capital and profits
•
Limited modern gold exploration
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Gold is the leading export commodity
•
3 Operating Gold Mines: B2 Gold: El Limon, 2014 production 48k oz Au B2 Gold: La Libertad, 2014 production 150k oz Au Mineros, S.A.: Bonanza, 2013 production 67k oz Au
Operating mines
Under-explored by modern standards… TSX-V: GRR
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San Albino Gold Deposit
Advancing development of Nicaragua’s next gold mine
Compelling Economics High grade
Low Capex
Fully scalable deposit
Clear Development Path US$15M gold streaming arrangement in place
Significant Upside Potential Open at depth and along strike
Represents only 2 % of our landholdings Our first high-margin gold project, with a robust estimated average grade of 8.02 g/t gold equivalent (PEA) TSX-V: GRR
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Internal Rate of Return
37.4%
(after taxes & royalties)
Key PEA numbers
Average Mined Diluted Grade (AuEq)
$105.4M
Net Present Value
8.02 g/t
(at 5% discount)
Initial Capital Expenditure
$13.9M
2.2 years Payback period
All-In Sustaining Cost
(AuEq)
$464/oz
*Preliminary Economic Assessment (“PEA”) report dated April 29, 2015, available on SEDAR and the Company’s website. Utilizing a base-case production scenario of a 250 tonne per day process plant and a US$1,250 gold price.
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Initial Capex R e q u i r em en t s
Contingency $2.3 M
Site and General Direct Costs $1.2 M Utilities and Services Direct Costs $1.4 M
Owner’s Costs $0.3 M EPCM $1.2 M
High Margin, Low Cost
US$ 13.9 M
Low initial capital investment requirements at an estimated US$13.9 Million
Once in production, the San Albino Project will be one of the lowest cost gold mines
*All-In Sustaining Cost (AISC) gold equivalent (AuEq) of just US$464 per ounce– placing it the lowest quartile in terms of costs in the industry $1,400
Open Pit $0.9 M
$1,200
$1,000
Indirects $2.3 M
Tailings Management Facility Direct Costs $0.5 M
Process Plant Direct Costs $3.7 M
$800
Gross Margin $786/oz
$600
Initial Capex requirements are very modest and highly financeable for this near-term producer
TSX-V: GRR
$400
AISC* AuEq
$464/oz
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C o m p ar a t i v es 60 50
Golden Reign San Albino (500tpd) Roxgold Golden Reign Yaramoko San Albino (250tpd)
Low capex and high IRR sweet spot
Dalradian Curraghinalt
Continental Buritica
Pretivm Brucejack
Condor La India
IRR (%)
40
High IRR/Low Capex
30 20 10 0 0
100
200
300
400
500
600
700
800
CAPEX (US$,M) 60
54.3 48.4
50 36.2
IRR %
40 30
28.5
37.4
31.5
22
20 10 0
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Significant PEA Results PEA HIGHLIGHTS
@ 250 TPD
@ 500 TPD
Financial Highlights (@ US$1,250/oz gold price): After-tax and royalties Internal Rate of Return (IRR) After-tax Net Present Value (NPV) @ 5% discount @ 8% discount @ 10% discount Payback period
37.4%
54.2%
$ 105.4 M $ 63.0 M $ 46.2 M 2.2 years
$ 173.9 M $ 126.4 M $ 103.2 M 1.7 years
$ 13.9 M 8.02 g/t AuEq
$21.1 M 8.02 g/t AuEq
7.11 g/t AuEq 8.27 g/t AuEq
7.11 g/t AuEq 8.27 g/t AuEq
$ 464/oz $ 428/oz 675,345 oz 21,785 oz
$395/oz $359/oz 675,345 oz 41,300 oz
Mine Plan Highlights: Initial capital expenditures, including $2.3 Million contingency (20%) Average mined diluted grade Potentially mineable diluted tonnes: Indicated – 598,000 tonnes Inferred – 2,174,000 tonnes Production Highlights: All-in sustaining cost AuEq Cash costs AuEq LOM gold production AuEq Average annual gold payable production AuEq
Our San Albino Gold Deposit is one of the highest grade undeveloped open-pit/underground gold projects in the world with a diluted life of mine grade of more than 8 g/t AuEq. In addition to grade, there is potential for size – by expanding the existing deposit and by advancing exploration at numerous highly prospective targets located in close proximity.
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Community and Benefits Exploration and Drilling • 47,450m of diamond drilling in 307 holes • 3,239m of RC drilling in 191 holes • Over 10,000m of trenching and pitting • NI 43-101 compliant open-pittable & underground resources delineated • Near-term production potential • PEA study completed April 2015 • Permitting process initiated • Gold stream funding in place to build mine at 250 tpd expanding to 500 tpd
Local Benefits • Created direct employment for up to 162 full time employees • Created direct employment for up to 179 occasional employees • Spin-off financial benefits for local communities and the village of El Jicaro
Community Programs • Planting of thousands of trees for reforestation already commenced • Drilling of water wells to provide fresh water to local communities • Sponsorship of local police station, ambulance and women's shelter and local sports teams
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San Albino Gold Deposit
Phase I – Open Pit Mine Plan
The PEA presents a base case 250 tpd operation, commencing with minable open-pit resources and transitioning to underground in year 10. The project offers optionality to ramp-up production and introduce higher grade from underground operations much earlier in the mine life. GRR intends to at least double the production rate as soon as cash flow permits, and is applying for 500 tpd in its permitting process.
PEA Phase I – targeting near-surface open-pittable resources The current PEA production plan contemplates mining: 4 small open-pits – however, planned in-fill drilling may result in mining of 1 -2 open-pits a 250tpd plant to process open-pittable resources over roughly 11 years (or an estimated 6 years @ 500tpd) optimized pit design: • LOM strip ratio of 5.2:1 • wall slope of 45◦ • oxide cut-off grade of 1.46 g/t AuEq • fresh rock cut-off grade of 1.40 g/t AuEq • Average diluted mined grade of 7.05 g/t AuEq
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10
San Albino
- Continuity
Within mineralized zones veins are continuous, robust and high grade Arras vein in surface trenches: 270m strike-length of high grade veins
San Albino vein mined underground: at least 160m strike-length of high grade vein
TSX-V: GRR
Au values > 5g/t
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CLEAR DEVELOPMENT PAT H Exploration 2014 2012
2010
1st NI 43-101 resource estimate
Exploration commences
Updated NI 43-101 resource estimate
Pre-development June 2015 Permitting process initiated
April 2015 PEA delivered
Development July 2014 H2 2017
US$ 15 M gold streaming arrangement signed
H2 2017
First gold pour
Commission plant
H2 2016 Commence construction
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Regional Potential San Albino: a camp play in an underexplored area San Albino Gold Deposit • NI 43-101 compliant open-pittable & underground resources delineated • Near-term production potential • PEA study completed April 2015 • Permitting process initiated • Gold stream funding in place on just 3.5 km2 Area of Interest (2% of landholdings)
Las Conchitas • Initial drilling has confirmed down-dip continuity of highly mineralized zones identified by trenching
Marlin Area of Interest 3.5 km2
San Albino-Murra Concession
• Potential for development of open-pittable and underground resources similar to San Albino Gold Deposit
El Golfo Mine • Historical mining operations dating to early 1900’s • Reconnaissance sampling program has outlined 4 main zones of high-grade mineralization
El Jicaro Concession
• Trenching program in progress
Remainder of Concessions
Total landholdings: 138 km2
• Numerous high-grade targets awaiting further exploration TSX-V: GRR
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Regional Potential
Then… mid-2009
San Albino Gold Deposit
Now…
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Significant Upside Potential San Albino Gold Deposit Two areas are slated for infill drilling with the objective of: outlining additional open-pittable resources combining two or more of the current open-pit mine areas, simplifying operations and allowing GRR to mine from fewer, larger open pits. The historical El Golfo Mine and Las Conchitas are located to the south. Both offer excellent potential.
El Golfo Historic mining operation very similar in size and mineralization to the San Albino Deposit. Initial reconnaissance shows; a continuous 5.5 metre underground channel sample grading 12.33 g/t gold and 25.6 g/t silver channel sampling of the country rock (schists) returned values of 1.0 metre of 62.2 g/t Au and 0.2 g/t Ag grab samples from a 7.5 metre wide zone in tunnel returned between 1.20 to 10.77 g/t gold
Las Conchitas Limited drilling intercepted high-grade mineralization, including: 21.3m of 7.20 g/t Au and 14.2 g/t Ag - including 5.0m of 28.45 g/t Au and 53.7 g/t Ag 3.0m of 62.96 g/t Au and 61.7 g/t Ag 2.5m of 15.69 g/t Au and 15.5 g/t Ag Trenching results include: 12.8m of 16.05 g/t Au and 9.9 g/t Ag, including 3.0m of 40.97 g/t Au and 23.7 g/t Ag 6.0m of 15.46 g/t Au and 12.8 g/t Ag 5.3m of 48.28 g/t Au and 21.0 g/t Ag 11.0m of 8.59 g/t Au and 19.6 g/t Ag 4.0m of 20.54 g/t Au and 33.7 g/t Ag
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GRR – A Compelling Investment • Near-term production potential from high grade, low CAPEX, open-pittable deposit • PEA study completed April 2015 showing compelling economics with low AISC • Gold stream funding in place on just 3.5 km2 Area of Interest (2% of landholdings) • Clear development path showing high margins and high IRR • Over 40% of open-pittable resources are Indicated -153,600 AuEq ounces averaging 7.28 g/t. Roughly 60% of open-pittable resources are Inferred - 195,900 AuEq ounces averaging 6.93 g/t • Out-of-Pit resources are primarily Inferred Resources: 610,200 AuEq ounces averaging 8.68 g/t • Initial production is scalable • Permitting process initiated – 2 of 4 required permits in hand. Environmental Impact Study currently underway • Significant regional upside potential within a large camp (138 sqkm) • Robust project pipeline of internally-generated mineralized areas TSX-V: GRR
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SHARES OUTSTANDING*
161,931,096
FULLY DILUTED SHARES*
169,073,171
SHARE PRICE*
$0.28
ONE YEAR RANGE*
$0.07 - $0.34
MARKET CAPITALIZATION*
$45.3MM
CASH
> $1.5MM
*as at May 6,July 31, 2016
Directors Kim Evans Bill Meyer Len Dennis John Conlon Rael Lipson Akiba Leisman Braam Jonker
Management: Kevin Bullock, CEO Kim Evans, President Michele Pillon, CFO Zoran Pudar, VP Exploration John Kowalchuk, Project Manager Oscar Molina, Country Manager
Suite 501 – 595 Howe Street Vancouver, British Columbia Canada V6C 2T5 Telephone: 604.685.4655 | Facsimile: 604.685.4675 | Toll-free: 1.888.685.4655 Email:
[email protected] | Website: www.goldenreignresources.com
