TULSEQUAH CHIEF PROJECT • HIGH GRADE

TULSEQUAH CHIEF PROJECT
•
•
•
•
HIGH GRADE - STRONG ECONOMICS
PERMITTED FOR CONSTRUCTION
POLYMETALLIC 29% ZINC EQUIVALENT
RESOURCE GROWTH POTENTIAL
June 2015
CHIEFTAIN
1.
Tulsequah Chief Project among the highest grade VMS deposits in the world (~ 29% Zn Eq.)
2.
Core project ready for construction
•
Permitted for construction, Bankable Feasibility Study completed
3.
One of the world’s lowest cost, near-term permitted producers
Metal
Unit
1100 tpd
Annual Prod.
Cash Cost*
Co Product
Prod. Cost
Zinc
lbs
46.9 million
- US$ 0.25
US$ 0.38
Copper
lbs
10.9 million
-US$ 2.53
US$ 1.06
Gold
oz
32,100
-US$ 753.24
US$ 574.45
*Cash Cost net of by-products.
Based on Oct 15 2014 Spot prices. US$3.08/lb Cu, US$1.06/lb Zn, US$0.93/lb Pb, US$1238/oz Au, US$17.00/oz Ag, fx US:CAD 0.89
4. Transformational exploration potential
• Strong indication of new VMS district / large near mine targets / Camp size area
5.
Attractive mining jurisdiction: British Columbia (BC), Canada
• Tulsequah is considered by the BC Government one of the thirteen proposed major projects
of the Nechako Development Region, providing strong government support for development
2
CAPITAL EXPENSE SUMMARY
Capital Costs (CAD$M)
Underground Mining
Underground Infrastructure
Site Development
Processing Plant
Tailings & Waste Rock Management
On-Site Infrastructure
Off-Site Infrastructure
Project Indirects
Engineering & EPCM
Owner's Costs
Closure & Salvage
Pre-Production OPEX
Subtotal
Contingency
Total Capital Costs
Pre-Production
Production
LOM
18.5
10.5
3.9
44.6
6.6
33.9
0.0
15.2
13.5
21.4
0.0
11.7
179.6
18.4
198.0
61.0
0.0
0.0
0.0
12.7
4.3
0.0
0.0
0.0
0.0
3.8
0.0
81.7
2.4
84.1
79.5
10.5
3.9
44.6
19.3
38.1
0.0
15.2
13.5
21.4
3.8
11.7
261.3
20.7
282.1
3
LOCATION AND ACCESS
Whitehorse
• Northwest B.C., 100km south
of Atlin
• 65km northeast of Juneau, AK
• Existing airstrip and barge
landing on site
• Conventional barging from
minesite to mouth of Taku
River
• Ocean transport to smelters
Tulsequah Property
Yukon
BC
Atlin
Skagway
Tulsequah
Chief
Tulsequah
Property
N
Big Bull
~50 km
Juneau
4
PERMITTED
All Permits in Place to Begin Construction
Mines Act & MX (Mines Exploration)
 Received
Mines Act Amendment
 Received
Environmental Assessment Certificates
 Received
Special Use Permit for the Access Road
 Received
Environmental Assessment Amendment
 Received
Special Use Permit Amendment
 Received
5
NSR BY METAL AND CONCENTRATE
Price deck: October 15 2014 Spot: US$3.08/lb Cu, US$1.06/lb Zn, US$0.93/lb Pb, US$1238/oz Au, US$17.00/oz Ag, fx US:CAD 0.89
6
2014 FEASIBILITY SUMMARY RESULTS
Details of the October 2014 Feasibility Update
Payable Metal
4.4 Mt / 1133 tpd
Metal
Annual - Full
production
LOM
11 years
Zinc
46.9 million lbs
520 million lbs
NSR per tonne (2)
CAD$ 369/t
Copper
10.9 million lbs
121 million lbs
Operating Cost per tonne (2)
CAD$ 186/t
Lead
7.0 million lbs
78 million lbs
CAD$78 million
Silver
989.1 K oz
10,956 K oz
91% Au, 85% Ag, 89% Cu,
90% Zn, 65% Pb
Gold
32.1 K oz
356 K oz
Throughput
Life of Mine of core project (1)
Annual operating cash flow (full production)
Metal recoveries (see Appendix for details)
Pre-production Capital Cost (includes 11.4%
contingency)
CAD$ 198 million
NPV8% pre-tax (3)
CAD$ 221 million
IRR pre-tax (3)
Payback Period pre-tax (3)
22.5%
4.1 years
(1) Core Project: only Tulsequah Chief Deposit. Excludes any exploration upside in the Tulsequah Camp and Big Bull resource of 653Kt indicated
and 1.45Mt inferred
(2) LOM. NSR = Gross Revenue minus TCRCs minus Sea Transportation. For presentation purposes, Sea Transportation/t has been excluded
from the NSR/t (CAD$342 - CAD$-26 = CAD$369) and accounted in the Operating Cost/t (CAD$160 + CAD$26 = CAD$186)
(3) No streaming
Price deck: October 15 2014 Spot: US$3.08/lb Cu, US$1.06/lb Zn, US$0.93/lb Pb, US$1238/oz Au, US$17.00/oz Ag, fx US:CAD 0.89
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LOW COST OF PRODUCTION
Zinc C1 Cash Cost
$0.30
$0.24
$0.20
LOM Zn Cash Cost $-0.25
$0.10
$0.00
($0.10)
Y1
Y2
Y3
Y4
Y5
Y6
Y8
Y9
Y10 Y11
($0.08)
($0.14)
($0.15)
($0.02)
($0.20)
($0.30)
Y7
($0.23)
($0.40)
($0.24)
($0.34)
($0.35)
($0.31)
($0.39)
($0.50)
Zinc C1 Cost Curve
Cumulative Percentile Global Zinc
Production
** Expressed in US Dollar.
Price deck: October 15 2014 Spot: US$3.08/lb Cu, US$1.06/lb Zn,
US$0.93/lb Pb, US$1238/oz Au, US$17.00/oz Ag, fx US:CAD 0.89
*Global zinc cash cost (C1 – net of by-products) curve estimated.
For illustrative purposes only. Source: Brook Hunt, calculated,
based on cumulative percentile of global zinc production
Tulsequah Chief near bottom of global zinc cost curve
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COMMUNITY RELATIONS
DEMONSTRATED SUPPORT
 November 2014, letters of support from TRTFN Clan Leaders
(Wolf and Crow)
 June 2014, letter of support from BC Minister of Mines
 June 2014, letter of support from Atlin Community Improvement
District
 May 2014, letter of support from Atlin Board of Trade
 May 2014, letters of support from 153 community members
LAND USE PLAN
•
2011 - TRTFN and BC approved Atlin Taku Land Use Plan
•
Tulsequah defined for Mineral Development
•
Barging preferred transportation method
 Ongoing sponsorship of community
meetings and events
 Physical presence: Chieftain Atlin office
EQUATOR PRINCIPLES (EP)
•
May 2014, Norton Rose Fulbright conclude EP audit
•
Conclusion: from 606 audit questions: evidence of compliance on
97.5%; remaining 2.5% classified as “partial non-compliance, noncritical”
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TRANSFORMATIONAL EXPLORATION
IV. Shazah:
Surface sample: 20.9 g/t
Au, 2201 g/t Ag, 0.16% Cu,
11.65% Zn, 16.60% Pb,
probable rhyolite dome
Tulsequah Property
I. Tulsequah Chief Mine
Untested IP anomalies
“Hot Spots”
Tulsequah
Chief
Limited Drilling
Between Tulsequah
Chief and Big Bull
Big Bull
II. Big Bull Mine
Increased land package to
30,547 ha with a strike of
~43 km (March 2013)
Existing Road
III. Sparling / Banker
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TULSEQUAH: NEAR MINE POTENTIAL
Old Cominco
Workings
#1
#2
#3
2
TC13062
#4
TC13065
3
3
TC13064
Untested IP
anomaly
3d IP Anomaly
Targets #1-4; IP
contours explain
alteration and
sulphides at
discharge site.
350m Periodicity of
Anomalies
Proximal discharge
site trend observed
OPEN
Zinc intersection at
1
Target #2 2
TCU04121
Tulsequah
Chief
Reserves
OPEN
3
??
Copper stringers in
strong footwall
alteration and
Historic drilling at
Target #3 3
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TULSEQUAH 2013 DRILLING: POTENTIAL NEW
VMS LENSE – SW ZONE
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3d IP Targets
Newly modelled 3D-Induced Polarization (“3D-IP”) geophysical inversion anomalies identified within
the prospective Tulsequah Chief, Big Bull and Sparling-Banker areas.
3D-IP anomaly bear many remarkable similarities (in terms of strength and dimensions) with the 3DIP anomaly associated with the known Tulsequah Chief Orebody.
Drilling confirmed the anomalies directly associated with wide zones of footwall massive sulphides
(mainly ‘proximal discharge’ pyrite) alteration zones.
SW Zone
Drill holes TC13064, TC13065, TC13066 and TC13067 targeted a 3D-IP chargeability anomaly
(“Target #3”)
Intersected wide zones of IP chargeable mineralization with some chalcopyrite within typical
footwall massive sulphide stringer zones (notably one 0.45m interval in TC13064 containing 3.28%
Cu, 10 g/t Ag, 0.223 g/t Au at -100m elev; also down dip historic hole TCU04121 with 0.63m interval
of 2.27% Cu at -520m elev)
Suggestive of the discovery of a new ‘blind’ base metal lens
Un-Tested 4th Anomaly
A fourth, very promising appearing 3D-IP chargeability anomaly (“Target #4”) is located
approximately another 350 m further to the southwest of the “SW Zone”.
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3D-IP targets near the Tulsequah VMS Deposit… Looking SE…
Historic DDHs
Copper assays plotted along trace
Zinc assays plotted along trace
Fold
Axis
3D-IP Targets
to be tested
near known
Tulsequah VMS...
showing 2013
DDH traces as
thick tubes...
that cut near
solid to solid
sulphides and
strong Cu
mineralization
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BIG BULL TARGET AREAS
Very large
3D-IP Target
on trend with
known VMS
TOP
Rhyolite
Dome
3D-IP
Chargeability
Targets
Historic DDHs
Massive Sulphides Cu-Zn-Pb
Alteration with Sulphides
Massive Pyrite
Rhyolite
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SPARLING / BANKER TARGET AREAS
Potential for Another “Chief-size” VMS Deposit
Proposed drillholes
(1,200 m)
Tulsequah Chief Mine
Big Bull Mine
Gold in Soil
Sparling
Banker
Lead in Soil
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INVESTMENT SUMMARY
1
2
Bankable Feasibility study completed
3
4
5
6
7
High cash return / CAD$ 78M operating CF, CAD$ 172/tn of ore
operating margin
Permitted, ready for construction
One of world’s lowest production cost metal projects/
-US$ 0.25 cash cost of zinc
Located in British Columbia, Canada / strong govt. support
High value exploration upside / over 30k hectares;
4 Mt of resource not in mine plan; numerous targets
JV opportunity to earn above 25% return to JV partner before mine
expansion
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FEASIBILITY TEAM
David West Consulting
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RESOURCE AND RESERVE
TULSEQUAH CHIEF
RESOURCE
Measured > $100
Indicated > $100
M+I > $100
Tonnes
786,636
5,136,311
5,922,947
Au gpt
2.81
2.80
2.80
Ag gpt
105.51
102.08
102.53
Cu %
1.57
1.43
1.45
Pb %
1.50
1.28
1.31
Zn %
8.60
6.76
7.00
Zn EQ %
30.9
28.1
28.5
Inferred > $100
439,244
2.33
80.64
0.79
1.03
5.54
21.6
BIG BULL
RESOURCE
Indicated > $100
Inferred > $100
Tonnes
652,864
1,452,917
Au g/t
3.03
2.67
Ag g/t
124.98
103.86
Cu %
0.34
0.37
Pb %
1.54
1.37
Zn %
4.11
4.15
Zn EQ %
23.8
21.4
Tonnes
Au g/t
Ag g/t
Cu %
Pb %
Zn %
Zn EQ %
6,575,811
2.82
104.76
1.34
1.33
6.71
28.0
1,892,161
2.59
98.47
0.47
1.29
4.47
21.5
Au g/t
2.71
2.88
2.85
Ag g/t
101.00
104.00
104.00
Cu %
1.48
1.45
1.46
Pb %
1.36
1.28
1.29
Zn %
7.84
6.78
6.94
Zn EQ%
29.4
28.9
29.0
TOTAL PROJECT (TC+BB)
RESOURCE
Total
Measured+Indicated
Total Inferred
RESERVE
Tonnes
Proven
683,963
15.4%
Probable
3,751,657 84.6%
Total (including dilution) 4,435,619 100.0%
Reserve is diluted at 17.6%
18
MINE HIGH GRADE CONTINUITY
A Lenses
H Lenses
G Lenses
Blocks > $300 NSR
Coloured by
• Lens
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MEASURED RESOURCE
Blocks with 5 comps, 3 DDH with
Search Radius 50% of current
Indicated Ellipse
Visually cleaned wireframe shapes
created for classification
Classification Discussion
1.2MT Measured
5.5MT Indicated
0.2MT Inferred
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MINING
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Adit access through old mine workings
Ramp access to all levels
Level spacing = 30m
Production level range:
•
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Ore production by mining method:
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•
•
•
-570m to +110m
Longitudinal
stopes
54% longitudinal
43% transverse
3% cut & fill
Longhole mining
with paste backfill
Cut & Fill
stopes
CAD$ 200 NSR Cut-off for stope design
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•
•
•
•
US$ 0.90/lb Zn & Pb
US$ 2.75/lb Cu
US$ 1250/oz Au
US$ 19.00/oz Ag
0.93 FX USD:CAD
Transverse
stopes
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2014 FEASIBILITY
METALLURGICAL RESPONSE TABLE
Product
Wt %
Cu %
Pb %
Zn %
Ag g/t
Au
g/t
Cu Rec
Pb Rec
Zn Rec
Ag Rec
Au Rec
Gravity
0.2
1.3
1.1
6.5
247
576
0.2
0.2
0.2
0.5
41
Cu
6.2
21
2.8
5.1
1300
22
89
13
4.5
78
47
Pb
1.4
0.3
60
7.1
467
5.6
0.3
65
1.4
6.3
2.8
Zn
10.4
0.7
0.4
60
80
0.8
5.0
3.4
90
8.0
2.9
Py
33.0
0.2
0.3
0.6
22
0.3
3.6
8.5
2.9
6.9
3.6
Tailings
48.8
0.1
0.2
0.1
1.6
0.2
2.0
9.0
1.0
0.8
2.7
Feed
100.0
1.46
1.29
6.95
103.72
2.85
100
100
100
100
100
As %
Sb %
1.14
0.35
22
CONCENTRATE SPECIFICATIONS
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METALLURGICAL FLOW SHEET
Feed Gravity CuRo
Con
Pb Ro
ZnRo
CuCl1
PbCl1
ZnCl1
Cond
PbCl2
CuCl2
PyRo
RoTail
C1,2
C1,3
Tail
Tail
C1,2
C1,3
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CONCENTRATE PRODUCTION
DMT
Annual
LOM
Zn Concentrate
41,718
462,089
Cu Concentrate
24,760
274,256
Pb Concentrate
5,586
61,868
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SITE LAYOUT
Barge Landing
Big Bull
Stockpiles
Tailings
Minesite
Laydown
Limestone
Airstrip and Camp
26
PLANT SITE
27
BARGING & CONCENTRATE LOGISTICS
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•
Taku Inlet to Barge Landing – 55 km
Tidal Flats – km 0 to km 17
•
•
•
•
•
km 0 – Taku Inlet (Anchor Ocean Barge)
km 17 - Taku River Lodge
km 39 - Canyon Island
km 42 – Canada / US Border
km 55 - Tulsequah Barge Landing
km 55
km 42
km 39
km 17
km 0
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BARGING & LOGISTICS
• Operating assumptions:
• 4 Purpose-built Barge Fleet
• 26 years of data - average throughput of
103,600 wmt/yr
• Average mine target throughput = 81,000
wmt (LOM average of 75,000 dmt + 8%
moisture)
• Size fleet for 1 standard deviation from mean,
25% contingency on average year
• 18 hour barge cycle time. (experience from
2007/08)
• 10% downtime due to weather, equipment
and unforeseen circumstances.
• Tidal assist not considered when gauge above
35 feet, opportunity for increased loads
during tides
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BARGING & LOGISTICS
• Example of ‘average’ year:
• throughput = 98,400 wmt
• Note that most barging occurs in first two months
30
BARGING & LOGISTICS
• A 4 Barge Fleet sized for one standard deviation from the mean:
• Average for a 4 barge fleet is 103,600 wmt, with a standard deviation of 23,600
wmt.
• In last 26 years, only 3 occurrences of not meeting planned mine production of
81,000 wmt
• Probability of 12% for a 5,000 tonnes shortfall meaning 7% of revenue deferred by
one year
• Probability of shortfall 2 years in a row is near 0%
• Barging capacity can be increased by 25% for the following year, no allowance for
tidal assist
Avg
Green line shows
average minus one
standard deviation
31
CONTACT INFORMATION
Contacts:
Victor Wyprysky - President & CEO
Tel: 416-479-5411
Email: [email protected]
Toronto Office:
2 Bloor Street West | Suite 2510
Toronto, ON
Canada | M4W 3E2
Tel: 416-479-5410
Fax: 416-479-5420
www.chieftainmetals.com
Peter Chodos, Executive Vice President, Corporate Development
Tel: 416-479-5417
Email: [email protected]
Keith Boyle - Chief Operating Officer
Tel: 416-479-5414
Email: [email protected]
Pompeyo Gallardo – Chief Financial Officer
Tel: 416-479-5412
Email: [email protected]
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FORWARD LOOKING STATEMENTS
Certain of the statements made and information contained herein is “forward-looking information” within the meaning of the Ontario Securities Act or
other laws or regulations. This includes statements concerning Chieftain Metals Corp. and affiliated entities’ (collectively, “Chieftain” or “the Company”)
plans for the Tulsequah Chief project and other mineral properties, which involve known and unknown risks, uncertainties and other factors which may
cause the actual results, performance or achievements of the Company, or industry results, to be materially different from any future results,
performance or achievements expressed or implied by such forward-looking information. Forward-looking information is subject to a variety of risks
and uncertainties which could cause actual events or results to differ from those reflected in the forward-looking information, including, without
limitation, the availability of financing for activities, risks and uncertainties relating to the interpretation of drill results and the estimation of mineral
resources and reserves, the geology, grade and continuity of mineral deposits, the possibility that future exploration, development or mining results will
not be consistent with the Company’s expectations, metal price fluctuations, environmental and regulatory requirements, availability of permits,
escalating costs of remediation and mitigation, risk of title loss, the effects of accidents, equipment breakdowns, labour disputes or other unanticipated
difficulties with or interruptions in exploration or development, the potential for delays in exploration or development activities or the completion of
feasibility studies, the inherent uncertainty of production and cost estimates and the potential for unexpected costs and expenses, commodity price
fluctuations, currency fluctuations, expectations and beliefs of management and other risks and uncertainties. In addition, forward-looking information
is based on various assumptions including, without limitation, metal prices, exchange rates, costs of key supplies and services and comparisons with
similar deposits or production records. Should one or more of these or other risks and uncertainties materialize, or should underlying assumptions
prove incorrect, actual results may vary materially from those described in forward-looking statements. Accordingly, readers are advised not to place
undue reliance on forward-looking information.
Except as required under applicable securities legislation, the Company undertakes no obligation to publicly update or revise forward-looking
information, whether as a result of new information, future events or otherwise. Further, the Company is including such forward-looking information
solely for discussion purposes and hereby explicitly disclaims responsibility or liability surrounding the information herein contained; the information is
to be used for discussion purposes only and potential or current investors shall not rely on such information or its accuracy for any reason, including
evaluating current or potential future investments.
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