Cordillera Gold Ltd Corp Pres Oct 26_15

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October 2015 Corporate Presentation

Transcript of Cordillera Gold Ltd Corp Pres Oct 26_15

Page 1: Cordillera Gold Ltd Corp Pres Oct 26_15

October 2015

Corporate Presentation

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DISCLAIMER

FORWARD-LOOKING STATEMENTS – CAUTION: Certain statements included in this presentation are forward-looking statements within the meaning of Canadian

securities laws. Forward-looking statements are based on estimates and assumptions made by the Company in light of its experience and perception of current conditions and expected future developments, as well as other factors deemed appropriate in the circumstances. Persons reviewing this presentation are cautioned not to place undue reliance on forward-looking statements due to inherent uncertainty therein. 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 law. The contents of this presentation have not been reviewed by a Qualified person as defined by the NI43-101.

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CORPORATE STRATEGY

Cordillera is a resource company focused on gold production in Colombia: Develop profitable, low capitalization, small-scale gold mining operations on its 100%

owned Rigo Gold Property; initially sourcing high-grade feed from Artisanal miners (toll mining) with subsequent feed coming from the Rigo Gold Property.

Secure Mining Title; permitting to gold production by Q4 2017.

Rigo Gold Property is strategically located within the Frontino mining camp

where major and mid-tier companies are actively and profitably extracting significant amounts of gold from high-grade vein systems.

Cordillera has two additional 100% wholly owned Mining Titles - gold and copper properties - in the secure southern Antioquia batholith for JV, sale or further exploration. 3

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DIRECTORS AND MANAGEMENT

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Experienced and established management team with a track record of exploration success. MANAGEMENT AND DIRECTORS: Dr. Scott Jobin-Bevans (Ph.D., PMP, P.Geo.), President & CEO, Director: +24 years experience in mineral

exploration; worldwide experience in economic geology bringing projects from early-stage to development. Founder, Chairman and CEO of Caracle Creek International Consulting (Canada); Director of Northern Shield Resources and Stroud Resources. Rob Fia (CFA, B.Comm. (Hons)), Managing Director/Chairman, Director: +14 years experience in the investment

business, including both equity research and corporate finance; involved in several multi-million dollar financings and advisory transactions in mining, oil and gas, alternative energy, technology and health care. Co-Head Corporate Finance, Kingsdale Capital Markets. Tak Winglaw (ACA, CPA, CGA), Chief Financial Officer: A dedicated and result-oriented finance professional with

progressive records of achievements and self-improvements over the past 20 years. Diverse experiences in Business Development, Financial Reporting, Auditing, Finance, Taxation, Human Resources, Professional Training and Education. Tim Peterson, Director (Independent): Former Director of Augen Gold and Trelawney Mining. Former Ontario MPP

(Mississauga South). Dr. Peter J. Rogers, Country Manager: +40 years worldwide experience in economic geology, applied mineral

exploration and environmental geochemistry. A multitude of projects in Europe, Africa, North-, Latin- and Central America; bilingual in Spanish.

LEGAL ADVISORS: Medellin, Colombia: Maria Isabelle Rendon Parra Canada: Beard Winter LLP & Garfinkle Biderman LLP, Toronto

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• Rigo Gold Property is located in Segovia, north eastern Antioquia Department; 30 minute flight or 5 hour drive from Medellin.

• Frontino Gold Mines area has been in continuous production since 1852 with more than 5 million ounces of Au (avg. grade of 9.7 g/t Au) extracted to date by hard rock and artisanal mining methods.

• Gran Colombia Gold, Segovia Operations: historic average gold grades from underground mines were 8.0 g/t Au, 12.0 g/t Au and 6.0 g/t Au, respectively.

• Many high-grade gold opportunities available for small-scale profitable extraction; potential partners with mid-tier to major exploration and mining companies in region.

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RIGO GOLD PROPERTY: HIGH-GRADE GOLD

RIGO PROPERTY

MEDELLIN

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Immediately southwest of the Segovia Operations/Frontino Gold Mining property of Gran Colombia Gold (TSX:GCM).

Covers 66.8 hectares with 100% ownership (subject to NSR).

Active high-grade gold mining (tunnels & adits) in area and on Property; Artisanal miners operating in area.

Several high-grade mesothermal gold vein systems known to cut through Property.

Fully permitted for mining, road accessible with nearby power and water.

Mining title “H6009005” can be viewed online (choose “Consulta titulo”): www.cmc.gov.co:8080/CmcFrontEnd/consulta/listaResultado.cmc

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RIGO GOLD PROPERTY: INFRASTRUCTURE & GEOLOGY

RIGO PROPERTY

GRAN COLOMBIA GOLD SEGOVIA OPERATIONS

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RIGO GOLD PROPERTY: PRODUCTIVE NEIGHBOURS

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Gran Colombia’s Segovia Operations include the Las Aves, Providencia, El Silencio, Sandra K and Las Verticales high-grade gold vein systems.

Quartz-sulphide gold veins at GCM trend: N-S to N30E E-W to N35W NW

Numerous Artisanal miners operating in the area.

GCM production plan is to utilize a combination of company miners and contract Artisanal miners to feed the plant.

Proposed Location Pampa Verde Plant

1000m

RIGO GOLD

GRAN COLOMBIA GOLD SEGOVIA OPERATIONS

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RIGO GOLD PROPERTY: EXPLORATION TO DATE

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Heliborne aeromagnetic survey plus interpretation over entire property; ground-truthing.

98 soil samples yielding anomalous Au-As-Sb and several base metals.

Soil Anomaly: 18 metre wide (+135m long), N-S to N30E anomaly; similar trend to high-grade gold veins on neighbouring GCM property.

Soil anomaly interpreted to be extension of known high-grade gold producing veins on the Rigo Property.

CORDILLERA GOLD RIGO PROPERTY

GRAN COLOMBIA GOLD SEGOVIA OPERATIONS

Providencia Las Verticales

El Silencio

Sandra K

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RIGO GOLD PROPERTY: GEOPHYSICS AND SOILS

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Vertical Magnetics

GRAN COLOMBIA GOLD PROPERTY

INTERPRETED FAULT

ALTERATION ZONE

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• Mining Title 100% owned by Cordillera Gold (subject to NSR). • Cordillera has paid all fees, canons, and regulatory fees to keep the Property in good

standing. Title is now in the process of being transferred to the name of Cordillera Gold at the Secretary of Mines, Antioquia.

Consideration for 100% Ownership: • Cordillera issues 6,000,000 Common Shares to the Santa Rosa (previously 12M shares):

• 3,000,000 shares issued at signing of the amended Option Agreement. • 3,000,000 shares issued upon Frontino Au Project achieving commercial ready

production.

• Cordillera pays a sum of US$500,000 on the later of: (i) 90 days after the first gold pour at the Frontino Au Project or (ii) Upon Cordillera achieving sufficient production at the Frontino Au Project in order to make the payment.

• Cordillera grants Santa Rosa a royalty (the “Royalty”) equal to 1% of the Net Smelter Returns (NSR). Cordillera may at any time purchase up to 1/2 of the NSR from Santa Rosa by making a cash payment of US$500,000 to Santa Rosa.

RIGO GOLD PROPERTY: SANTA ROSA AGREEMENT

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RIGO GOLD PROPERTY: PROPOSED PRODUCTION PARTNERSHIP

• Proposed Joint Venture under MOU: • 51% Cordillera Gold – assign to JV the rights to build gold production plant and process minerals; the property, local connections, country experience.

• 49% SSM Gold – financing of all capital requirements through to production including infrastructure and plant construction; operators of production plant.

• Local Community – employment (Cooperativa); training toward eventual ownership.

• Low-Capital Turnkey Project (Modular Gold Processing Unit - MGPU): •~$7M: initial 150 tpd mill (expandable); processing unit; gold room; operating capital.

• initial toll processing from local Artisanal miners; later feed from Rigo Gold Property.

• Financing Source: • JV Partner’s investment banking partners will finance the mill and infrastructure to

production through gold loan and/or production loan and/or off-take agreements.

• Other sources may include private equity and development banks; traditional/non-traditional equity raises.

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SSM GOLD: Modular Gold Production Unit (MGPU) • Contribution of SSM Gold:

• Project financing, management and operator.

• Design, manufacture, install and service MGPU.

• Worldwide engineering/commercial rights of MGPU.

• Integrated services offers turnkey project formula including technical studies, metallurgical tests, process design criteria, engineering plans, final MGPU construction and commissioning.

• Advantages of a MGPU:

• Flexibility: Designed to specific needs of deposit (50-300 tpd).

• Processing methods: Gravity, flotation, cyanidation.

• Add-ons: Crushing, grinding, concentrating, thickening, filtering, smelting, cyanide destruction; tailings disposal.

• Modular: Can be containerized and shipped anywhere in the world.

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SSM Gold: Modular Gold Production Unit (MGPU)

•Cost Estimate: ~US$7M includes plant installation and implementation.

•Timetable: 9 to12 months from plant design to operation (doré pour).

•manufacture/installation to pre-production/commissioning.

•Portability: can be dismantled and transported to another site.

•Electricity: adaptable to local conditions (i.e. generator; local power grid).

•Water: >70% of water is recirculated.

•Manpower: ~40 personnel for 150 tpd operation.

•Environmental Protection: cyanide destruction circuit; tailings disposal system.

•Life Span: several decades with minimal regular maintenance.

•Potential Gross Revenue: US$12M/year - Nicaragua example as base case: assumes 150 tpd; $1,100/oz Au; 8.0g/t Au; 90% recovery.

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SSM Gold: GPU in NICARAGUA •150 tpd gold plant in production since mid-August 2015 (12 month build time).

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5 YEAR BASE CASE PRODUCTION BUDGET SCENARIO Ramp-Up Year 1 Year 2 Year 3 Year 4 Year 5 5 Year Total

ProductionDays: 365 365 365 365 365 1,825

Tonnes Per Day (7 tonnes/hr): 120 150 150 150 150Tonnes: 43,800 54,750 54,750 54,750 54,750 262,800

Grade (g/t): 8.0 8.0 8.0 8.0 8.0Recovery: 90% 90% 90% 90% 90%

Ounces - Gold: 10,139 12,674 12,674 12,674 12,674 60,835 Revenues

Revenue per Ounce: $1,100 $1,100 $1,100 $1,100 $1,100 $1,100Revenue: $11,153,136 $13,941,420 $13,941,420 $13,941,420 $13,941,420 $66,918,818

Operating CostsPurchase Ore (45% of Au Rev): $5,018,911 $6,273,639 $6,273,639 $6,273,639 $6,273,639 $30,113,468

Plant Costs (US$60/tonne): $2,628,000 $3,285,000 $3,285,000 $3,285,000 $3,285,000 $15,768,000Government Tax (4%): $446,125 $557,657 $557,657 $557,657 $557,657 $2,676,753

Miner's Co-Op Tax (2%): $223,063 $278,828 $278,828 $278,828 $278,828 $1,338,376Transport (US$2/tonne): $87,600 $109,500 $109,500 $109,500 $109,500 $525,600

Refining (US$12/oz): $121,671 $152,088 $152,088 $152,088 $152,088 $730,023Cash Operating Costs: $8,525,370 $10,656,713 $10,656,713 $10,656,713 $10,656,713 $51,152,221

Cash Cost Gold (US$/ounce): $841 $841 $841 $841 $841 $841

Operating Profit (US$): $2,627,766 $3,284,708 $3,284,708 $3,284,708 $3,284,708 $15,766,597NPV: $5,208,781

Annual Discount Rate: 10%IRR (before loan repayment): 34%

IRR (after loan repayment): 14%

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SSM GOLD: FINANCIAL ASSUMPTIONS AND FORECASTS • MGPU operates for minimum of five (years); total capital cost of US$7M.

• MGPU will process ~54,750 tonnes per year:

• based on 7 tonnes/hour x 24h x 365 days x 90% utilization rate for maintenance.

• 9 month ramp-up period estimated to reach capacity of 150 tpd.

• MGPU design will allow for it to be scalable up to ~350 tpd.

• Gold ore and tailings have average grade of 8.0 g/t Au; average recovery rate is 90%.

• Operating cost is US$60/tonne; transport cost is US$2/tonne; refining cost is US$12/ounce.

• Assumes gold spot price of US$1,100 per troy ounce.

• Cost of purchasing gold ore supply is ~45% of gold revenues.

• Colombian Government Royalty Tax is 4% of the value of the gold sales.

• Royalties of 2% are expected to be paid on the value of gold sales paid to Miner’s Coop.

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CURRENT CAPITAL STRUCTURE

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Shares (000,000’s)

$Raised (000,000’s)

Shares Outstanding 51.9 $3.4*

Options** 5.8

Warrants*** 14.0

TOTAL - Fully Diluted: 71.7

*past financings at $0.05, $0.15 and $0.18 per share (includes recent shares for debt). **exercisable at $0.15 until May 2019; **exercisable at $0.25 per share within 10 days from listing date.

Current Financing: up to $250K at $0.05/share with a half warrant at $0.10 exercisable within 24 months from public listing date.

Cordillera is investigating a go-public event on the Canadian Securities Exchange (CSE) in the next 12 months. Concurrent with the go-public event, Cordillera will launch a suitably sized financing by way of subscription receipts. Proceeds from this financing will be used to obtain an Exploitation License on the Rigo Property by completing an Environmental Impact Assessment and for the go-public process.

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INVESTMENT SUMMARY

BUDGET ITEM COST EST. STAGE 1: Financed by Cordillera Gold Establish JV/Project Scoping (G&A; inventory definition; plant sourcing; land fees) CAD$250,000

STAGE 2: Financed by Cordillera Gold (as part of go-public event financing) Permitting (water concession/Environment Impact Assessment) CADS$1,000,000

STAGE 3: Financed by SSM Gold and/or JV Partners Infrastructure (feasibility study, laboratory, access, power, water, tailings, civil works) US$1,500,000

Gold Production Plant (150 tpd; expandable) + contingency US$5,500,000

TOTAL (Stage 3): US$7,000,000

Project Finance: near-term production on 100% owned property with Mining Title. considering gold loan/offtake and/or direct financing.

Scope Permit Design/Build Production (toll mining/150tpd) Q4-2015 Q4 2015 to Q4-2016 Q4-2016 to Q3-2017 Q4-2017

•Cash flow from toll mining production to be used to advance Rigo Gold Property. •Introduce Rigo gold ore feed into production stream and increase beyond 150 tpd.

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SUMMARY PROJECT: Rigo Gold Property is strategically located within the Frontino mining camp where

major and mid-tier companies are actively and profitably extracting significant amounts of gold (i.e. Gran Colombia Gold) utilizing company miners and contracted Artisanal miners.

STRATEGY: Develop profitable, low capitalization, small-scale (min. 150 tpd) gold mining operations with its experienced JV Partner on its 100% owned Rigo Property; initially sourcing high-grade feed from Artisanal miners (toll mining) with subsequent feed from Rigo Property.

PRODUCTION: Secure Mining Title - permitting to production by Q4 2017; potential gross revenues of ~US$12M/year.

FINANCING/JOINT VENTURE: ~$7 Million to take Rigo Gold Project into production. MOU contemplates: Joint Venture Company between Cordillera Gold (51%) and SSM Gold International (49%). JV Parners to finance (US$7M), build, install and operate gold production plant. Cordillera Gold entitled to 51% of gold bullion production; option to buy out JV Partner. Cordillera Gold will retain 100% mineral rights on Rigo Property; will develop gold resources and introduce as feed at a

later date.

Financing: up to $250,000 at $0.05/share with a half warrant at $0.10 exercisable within 24 months from public listing date. 19

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FURTHER INFORMATION

Dr. Scott Jobin-Bevans, President & CEO Mobile: +1-647-405-3632 Office: +1-416-368-1801 x 401 Email: [email protected] Rob Fia, Managing Director Office: +1-416-862-1500 Mobile: +1-416-722-4994 Email: [email protected] Richard Corbo, Managing Director (SSM Gold International) Mobile: +1-514-927-0292 Email: [email protected]

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