leagold mining is building a mid-tier gold producer … · 2020. 7. 9. · leagold is building an...
TRANSCRIPT
Corporate Presentation
August 2018
TSX: LMC | www.leagold.com
LEAGOLD MINING IS BUILDING A MID-TIER GOLD PRODUCER FOCUSED ON LATIN AMERICA
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Disclaimer
This presentation contains “forward looking information” or “forward looking statements” within the meaning of applicable securities legislation. Forward-looking information and forward looking statements include, but are not limited to, statements with respect to [the Company’s 2018 forecasted production and AISC, expected benefits of improved leach pad management, expected timing of receipt of regulatory approvals and permits, expected benefits of the power line at RDM; expected gains in efficiencies at the Fazenda mine on account of delivery of new equipment; expected timing of mine design and engineering at Bermejal Underground, completion of the CIL plant study and new technical reports, plans or future financial or operating performance, the estimation of mineral reserves and resources, the realization of mineral reserve estimates, realization of the benefits of certain capital projects, the timing and amount of estimated future production, costs of future production, and future capital expenditures]. Generally, these forward looking information and forward looking statements can be identified by the use of forward looking terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, “will continue” or “believes”, or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved”. Statements concerning mineral resource estimates may also be deemed to constitute forward looking information to the extent that they involve estimates of the mineralization that will be encountered. The material factors or assumptions used to develop forward looking information or statements are disclosed throughout this document.
Forward looking information and forward looking statements, while based on management’s best estimates and assumptions, are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Leagold to be materially different from those expressed or implied by such forward-looking information or forward looking statements, including but not limited to: risks related to international operations; risks related to successful integration of Brio, risks related to general economic conditions and credit availability, actual results of current exploration activities, unanticipated reclamation expenses; changes in project parameters as plans continue to be refined; fluctuations in prices of metals including gold; fluctuations in foreign currency exchange rates, increases in market prices of mining consumables, possible variations in mineral reserves, grade or recovery rates; failure of plant,
equipment or processes to operate as anticipated; accidents, labour disputes, title disputes, claims and limitations on insurance coverage and other risks of the mining industry; delays in obtaining governmental approvals or financing or in the completion of development or construction activities, changes in national and local government regulation of mining operations, tax rules and regulations, and political and economic developments in countries in which the Company operates, actual resolutions of legal and tax matters, as well as those factors discussed in the section entitled “Description of the Business – Risk Factors” in Leagold’s most recent AIF available on SEDAR at www.sedar.com.
Although Leagold has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information and forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information or statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information or statements. The Company has and continues to disclose in its Management’s Discussion and Analysis and other publicly filed documents, changes to material factors or assumptions underlying the forward-looking information and forward-looking statements and to the validity of the information, in the period the changes occur. The forward-looking statements and forward-looking information are made as of the date hereof and Leagold disclaims any obligation to update any such factors or to publicly announce the result of any revisions to any of the forward-looking statements or forward-looking information contained herein to reflect future results. Accordingly, readers should not place undue reliance on forward-looking statements and information.
Other InformationCash costs and AISC are non-GAAP financial performance measures with no standard meaning under IFRS and are therefore unlikely to be comparable to similar measures presented by other issuers.
Qualified PersonDoug Reddy, P.Geo, Leagold’s Senior Vice President – Technical Services, a Qualified Person under NI 43-101 has reviewed and approved the technical contents of this presentation on behalf of Leagold.
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Leagold is building an intermediate Latin American gold producer through a ‘buy and build’ strategy
In April 2017 Leagold acquired Los Filos, a +200,000 oz/yr gold mine in Mexico, from Goldcorp
In May 2018 Leagold acquired Brio Gold. The new Leagold is expected to produce 325,000-350,000 oz gold in 2018 at AISC of $940-$975/oz
Leagold now owns four operating mines and two development projects in two attractive mining jurisdictions, with a strong platform for growth
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Leagold Overview
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Leagold – Operations Overview
Los Filos Los Filos
Pilar Pilar
Fazenda
RDM RDM
Bermejal UG Expansion
Santa Luz
• Following the acquisition of Brio Gold, Leagold owns four operating mines in two attractive mining jurisdictions, plus two development projects to fuel the next stage of growth
• Expansion at Los Filos and restart of Santa Luz have the potential to take production to +700,000 oz gold per year
Creating an intermediate Latin American gold producer
+400,000 oz
+700,000 oz
Fazenda
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Head office Vancouver, BC, Canada
Ticker TSX: LMC/OTCQX: LMCNF
Share price (August 21, 2018) C$2.15
Issued shares 284M
Market cap (August 21, 2018) approx. US$470 M
Options 12 M
Warrants 51 M
Fully diluted 347 M
Leagold – Company Profile
Key Data
Key Shareholders
Shares (M) Ownership
Yamana Gold 58.1 20.4%
Orion Resource Partners 45.8 16.1%
Goldcorp 34.6 12.2%
Ruffer 10.4 3.7%
Neil Woodyer, CEO and Director 8.0 2.8%
Frank Giustra, Chair 6.1 2.2%
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Brio Gold Transaction
• Transaction closed on May 24, 2018
• Acquisition created a strong platform for expansion in Brazil and Mexico to further accelerate growth
• Completion of a US$100 million debt financing and US$45 million equity financing supported the repayment of Brio’s debt and strengthened balance sheet to fund growth projects
• Following a review of Brio Gold’s operating plans, Leagold’s updated 2018 guidance for the combined company totals 325,000-350,000 oz gold at AISC of $940-$975/oz
• Leagold’s Q2 results included contributions from the Brio assets for the 38-day period from May 24 to June 30, 2018
All-share acquisition of Brio Gold, a Canadian public company with assets in Brazil
Operating Mines
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Open pit and underground mines – Guerrero State, Mexico
Crusher
ROM Leach Pad #1
CrushLeach Pad #2
SurUndergroundMineNorte
UndergroundMine
ADRPlant
Los Filos Mine
2017 H1 2018
Gold production (K oz) 191 95
Ore mined (M tonnes) 8.3 4.4
Ore processed (M tonnes) 8.4 3.5
Avg grade processed (g/t) 0.9 1.0
Recoveries (%) 74% 87%
Cash costs ($/oz) $835 $845
AISC ($/oz) $964 $1,006
• 2018 guidance 210,000-225,000 oz gold at AISC of $975-$1,000/oz
• 20,000 tpd ore from two open pits (Los Filos and Bermejal); 1,600 tpd from Los Filos underground
• Open pit mines are owner-operated, load and haul; LOM strip ratio 5.6:1
• Underground mines are overhand and underhand cut and fill; Los Filos Norte mine is owner-operated, and Los Filos Sur mine is contractor-operated
• Drill program under way at Los Filos underground to replace current year’s production and with potential to add two years to underground mine life
• 10-year mine life based on Dec 31, 2017 Reserves
Los Filos operating metrics
Source: Los Filos Technical Report
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Open pit mine – Minas Gerais, Brazil
ROM Leach Pad #1
CrushLeach Pad #2
SurUndergroundMineNorte
UndergroundMine
ADRPlant
Riacho dos Machados (RDM) Mine
• Conventional open pit mine with a 7,000 tpd CIL plant; in operation since 2014
• Q2 production (May 24-June 30, 2018) of 7,889 oz at AISC of $818/oz
• Leagold 2018 guidance (May 24-Dec 31, 2018) of 45,000-50,000 oz gold at AISC of $800-$850/oz
• Q3 2018 priorities are to commence construction of a tailings dam raise ($5.3M capex) and complete installation of the new power line (remaining $2.5M capex)
• With completion of power line and resulting debottleneck of the plant, throughput is expected to increase to 9,000 tpd at lower costs
• Mine life of ~8 years based on Dec 31, 2017 Reserves
RDM operating highlights
Source: RDM Technical Information
May 24-June 30, 2018
Gold production (K oz) 7.9
Ore mined (M tonnes) 0.23
Ore processed (M tonnes) 0.18
Avg grade processed (g/t) 1.37
Recoveries (%) 82%
Cash costs ($/oz) $770
AISC ($/oz) $818
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Underground and open pit mine – Bahia, Brazil
Crusher
ROM Leach Pad #1
CrushLeach Pad #2
SurUndergroundMineNorte
UndergroundMine
ADRPlant
Fazenda Brasileiro Mine
• Established mine in operation since 1984, with a history of consistent production and reserve replacement
• Q2 production (May 24-June 30, 2018) of 7,460 oz at AISC of $891/oz
• Leagold 2018 guidance (May 24-Dec 31, 2018) of 40,000-43,000 oz gold at AISC of $875-$925/oz
• Efficiencies are expected to improve with new underground mining equipment purchased in H1 2018 being delivered in H2 2018
• Mine life of 6.5 years based on Dec 31, 2017 Reserves
Fazenda Brasileiro operating highlights
Source: Fazenda Brasileiro Technical Information
May 24-June 30, 2018
Gold production (K oz) 7.5
Ore mined (M tonnes) 0.1
Ore processed (M tonnes) 0.14
Avg grade processed (g/t) 1.93
Recoveries (%) 92%
Cash costs ($/oz) $818
AISC ($/oz) $891
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Underground mine – Goiás, Brazil
Crusher
ROM Leach Pad #1
CrushLeach Pad #2
SurUndergroundMineNorte
UndergroundMine
ADRPlant
Pilar Mine
• Underground mine with conventional milling, gravity, and CIP circuit; in operation since 2014
• Q2 production (May 24-June 30, 2018) of 5,627 oz at AISC of $1,060/oz
• Q2 production was impacted by an area of lower than anticipated grades. The mining sequence has since been adjusted to prioritize areas with higher grades
• Leagold 2018 guidance (May 24-Dec 31, 2018) of 30,000-32,000 oz gold at AISC of $1,000-1,050/oz
• Mine life of 8+ years based on Dec 31, 2017 Reserves
Pilar operating highlights
Source: Pilar Technical Information
May 24-June 30, 2018
Gold production (K oz) 5.6
Ore mined (M tonnes) 0.2
Ore processed (M tonnes) 0.2
Avg grade processed (g/t) 1.32
Recoveries (%) 94%
Cash costs ($/oz) $1,004
AISC ($/oz) $1,060
Growth Projects
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Los Filos Expansion
• 2017 exploration program doubled Bermejal Underground resources to 2.1 Moz of M&I Resources (5.96 g/t) and 0.5 Moz of Inferred Resources (4.65 g/t)1
• Development of the exploration portal and ramp construction at Bermejal Underground continues on schedule, in the context of developing a long-term and site-wide mine production and processing plan
• Over 960 metres of the planned 1,300 metres of advance complete in the main ramp. Surface facilities and the first raise bore for ventilation are complete, and mine design and engineering is expected to be complete in H2 2018
• Additional opportunities within existing mineralized zones identified during the development of the site-wide production plan are currently being assessed for upside potential
• Concurrent with the Bermejal Underground project, metallurgical test work, process design, and associated studies are under way to evaluate overall processing alternatives at Los Filos, including the potential for a CIL plant
1 Effective date December 31, 2017; see news release dated March 8, 2018 on www.Leagold.com or on Leagold’s profile at www.sedar.com. Resource estimate comprises Measured Mineral Resources of 0.429 Mt at 7.50 g/t containing 0.103 million oz; Indicated Mineral Resources of 10.384 Mt at 5.90 g/t containing 1.969 million oz; and Inferred Mineral Resources of 3.693 Mt at 4.65 g/t containing 0.545 million oz. Mineral resources are inclusive of mineral reserves.
JUNE 2018
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Santa Luz Project
• Built in 2013, Santa Luz was shut down in 2014 due to metallurgical problems and poor recoveries
• Brio delivered a new feasibility study in 2017 which demonstrated the viability of resin-in-leach (RIL) processing with 84% recoveries
• Brio commenced the construction of a new ore processing facility that incorporated the crushers, crushed-ore storage, and semi-autogenous (SAG) mill of the original plant
• At the time of acquisition in May 2018, the principal activity at site was limited to the completion of construction of a nearby re-settlement village, expected to be completed by October 2018
• Leagold’s first priority in Brazil is optimizing the three newly acquired mines. As a result, construction at Santa Luz is not expected to re-start until late 2018 or early 2019
• Currently evaluating the opportunity to re-start with a smaller optimized pit, reducing stripping and improving economics, with subsequent potential for the integration of an underground mine
Previously operating open pit mine in re-development stage; acquired from Brio Gold in May 2018
2017
Annual gold production (K oz) ~100
Mine life (years) 10
LOM gold production (K oz) 1,056
Total ore processed (M tonnes) 28.2
Avg grades (g/t) 1.39
Recoveries (%) 84%
LOM cash costs ($/oz) $695
LOM AISC ($/oz) $808
Initial capex ($M) $82
After-tax NPV5% ($M) $210
Santa Luz 2017 Feasibility Study1 highlights
1 Source: Technical Report on the Santa Luz Project, Bahia State, Brazil, prepared by Roscoe Postle Associates Inc., January 19, 2018
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Leagold – Re-rating Potential
1 Peer EV sourced from Bloomberg and TSX as April 9, 20182 2018 production forecasts (mid-point of range) based on company reports, where available. Torex Gold based on 2017 production
Leagold (Current)
Brio (Current)
Dundee
Guyana Goldfields
Regis Resources
Saracen
Argonaut
Beadell
Alio Gold
Torex Gold
B2Gold
Endeavour Mining
Centamin
$M
$500M
$1,000M
$1,500M
$2,000M
$2,500M
$3,000M
$3,500M
0koz 100koz 200koz 300koz 400koz 500koz 600koz 700koz 800koz 900koz 1,000koz
Ente
rpri
se V
alu
e (U
S$M
)
2018E Gold Production (koz)
Pro Forma Leagold(with Brio)
Enterprise Value to 2018E Production1,2
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Leagold Board of Directors
Frank Giustra, Chairman• President and CEO of Fiore Financial Corporation,
Chairman of Endeavour Financial from 2001 – 2007, former CEO of Yorkton Securities; philanthropist
• Established track record of building natural resource companies
Peter Marrone, Director• Founder, Chairman and CEO of Yamana Gold• 30 years of mining, business, and capital markets experience• Prior to Yamana, was the head of investment banking at a
major Canadian investment bank• Also practiced law with a strong focus on corporate law,
securities law and international transactions
General Wesley K. Clark , Director• Retired 4-star U.S. Army General, held several
Commands including Supreme Allied Commander Europe of NATO and Commander, U.S. Southern Command responsible for Latin America and the Caribbean
• Currently heads a strategic advisory and consulting firm
Leagold has a Board of Directors with an extensive and wide range of experience
Gordon Campbell, Director• Former Canadian High Commissioner to the United
Kingdom from 2011 to 2016, 34th Premier of British Columbia from 2001 to 2011 and leader of the Official Opposition in British Columbia from 1994 to 2001
• From 1986 to 1993, he was Mayor of Vancouver, British Columbia
Richard Orazietti, Director• Senior Vice President, Treasurer at Goldcorp; CPA• Extensive experience in finance and accounting, risk
and assurance, strategic planning and corporate development
Neil Woodyer, Non-independent Director, CEO• Founder of Leagold in August 2016• Founder and former CEO of Endeavour Mining until June 2016• Previously Managing Director of Endeavour Financial, a merchant
bank focused on the natural resource sector founded in 1988
The Rt Hon. the Lord Garel-Jones PC, Director• Retired Chairman of UBS Latin America• In 1979 elected Conservative MP for Watford, England. In
1983 joined Whip's Office and was succesively Lord commissioner of the Treasury, Vice-Chamberlain, Controller of the Household and Treasurer of Her Majesty's Household
• In 1990 appointed Minister of State at the Foreign and Commonwealth Office with responsibility for Europe and Latin America. He was made a life peer in 1997
Miguel Rodriguez, Director• Former director of Endeavour Mining from 2013 to 2016• Former Governor to the IMF, the World Bank, and the
Inter-American Development Bank, and President of the Central Bank of Venezuela, and Economic Minister of Venezuela from 1989 to 1992
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Doug Reddy – SVP Technical Services • P.Eng with 30 years of industry experience in exploration,
mine geology, resource development and consulting• Previously with Endeavour Mining for 10 years in technical
services, business development and investor relations
Doug Bowlby – SVP Corporate Development• Previously EVP Corporate Development with Endeavour
Mining, responsible for the analysis and implementation of corporate transactions and other growth projects
• CFA with wide range of experience in corporate finance and M&A
Kelly Boychuk – VP Technical Services • P.Eng with over 25 years of experience in engineering design,
construction supervision, execution and operations support• Previous experience with engineering consultancy, civil and
industrial construction, and mining owner/developer
Harpreet Dhaliwal – VP Finance, CFO• CPA (CA) with over 9 years of experience in the resource
sector, including CFO of several natural resource companies • Experience with international operating resource
companies including Endeavour Mining and Uranium One
Richard Thomas – SVP Operations• Mining Engineer and former VP of operations and EVP of
Technical Services at Endeavour Mining• Over 25 years of mining manager experience, including work
with Avocet Mining, AngloGold and Endeavour
Jeff Leung – VP Corporate Development• CFA and former VP Corporate Development with
Endeavour Mining• Extensive experience with economic analysis and
valuations of gold mining assets and transactions
Bernadette D’Silva – VP Corporate Services, Corporate Secretary• Extensive corporate finance experience spanning over 20 years• During past 12 years, advised Canadian public companies
(including Endeavour Mining) with disclosure obligations, regulatory compliance requirements, and corporate governance
Cornelius Lourens – SVP Operations, Brazil• Metallurgical Engineer with 28 years of experience• Previously GM for the Nzema Mine with Endeavour Mini• Extensive experience in Africa in metallurgical and mining
operational roles
Meghan Brown – VP Investor Relations• MBA with 25 years of experience in Investor Relations in the
resource sector focused on precious metals mining, primarily in Mexico and Latin America
• Former Chair of the Canadian Investor Relations Institute
Peter Burger – SVP Operations, Mexico• Previously GM for the Tabakoto Mine (Endeavour Mining)• University of Johannesburg, degree in Mining Engineering• Over 25 years of experience with Anglogold Ashanti,
Eastplats, Aquarius Platinum, and African Barrick
Ashley Baker – Director Legal Affairs • LLB; previously practiced in the Securities group at Blake,
Cassels & Graydon LLP • Extensive experience representing publicly listed mining
companies with their M&A, corporate finance, and governance needs
Neil Woodyer – CEO• Founder and CEO of Endeavour Mining, until June 2016• Previously Managing Director of Endeavour Financial, a
merchant bank focused on the natural resource sector founded in 1988
Leagold Management Team
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Conclusion
Leagold is building a mid-tier gold producer with a focus on opportunities in Latin America
Los Filos provided an excellent cornerstone asset for Leagold’s Latin American ‘buy and build’ strategy
Acquisition of Brio Gold adds a portfolio of producing assets with a strong growth profile
Acquisition provides diversification from a single asset, single country, to four operating mines and two development projects in Mexico and Brazil
Valuable mine development opportunities at Bermejal Underground and the Santa Luz mine provide significant growth upside
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Appendix
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2018 Guidance
Mine Q1 2018 Actual Q2 2018 Actual H1 2018 Actual H2 2018 Forecast 2018 Full-year Revised
Guidance
Los Filos 51,003 43,541 94,544 115,000-130,000 210,000-225,000
RDM - 7,889 7,889 38,000-42,000 45,000-50,000
Fazenda - 7,460 7,460 33,000-36,000 40,000-43,000
Pilar - 5,627 5,627 25,000-27,000 30,000-32,000
Total 51,003 64,517 115,520 210,000-235,000 325,000-350,000
Mine Q1 2018 Actual Q2 2018 Actual H1 2018 Actual H2 2018 Forecast 2018 Full-year Revised
AISC Guidance
Los Filos 1,039 967 1,006 950-1,000 975-1,000
RDM - 818 818 800-850 800-850
Fazenda - 891 891 875-925 875-925
Pilar - 1,060 1,060 1,000-1,050 1,000-1,050
Total 1,039 950 989 920-970 940-975
Gold production for Q1 and Q2 20181 and Full Year 2018 Guidance (ounces)
AISC2 for Q1 and Q2 2018 and Full Year 2018 Guidance ($/oz)
1 For Q2 2018, the results for RDM, Fazenda and Pilar are included in Leagold’s results for the 38-day post-acquisition period from May 24, 2018 to June 30, 2018 (inclusive).2 AISC is a non-IFRS financial performance measure with no standard meaning under IFRS. Refer to the section Non-IFRS Measures In Leagold’s Q2 2018 MD&A, available on www.leagold.com or www.sedar.com
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Defining Leagold’s Strategy
Acquire operating gold mines and projects nearing construction
• Target medium-sized dislocated mines or seniors’ non-core assets
• Buy assets with upside from optimization and de-risking of:
Current operations
Development projects
Exploration
Optimize assets in portfolio to provide strong growth profile
• Target assets with existing or near-term cash flow
• Improve quality of portfolio as we progress
Implement clear decision making with conservative financial management
• Cost control, cash flow generation, and conservative balance sheet
• Flat organizational structure with clear authority levels
• Tightly controlled corporate G&A
• Mines to run as individual profit centres
Buy and Build in Latin America
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Leagold has made rapid progress
JUL 2016 AUG 2016 JAN 2017 MAR 2017APR 2017
SEPT 2017 DEC 2017 JAN 2018 FEB 2018
JUL 2016Acquired a Canadian shell company and launched the Latin American ‘buy and build’ gold growth strategy
APRIL 2017Completed the acquisition of Los Filos with US$76 million in cash on the balance sheet; commenced 56,000 metre Bermejal Underground drill program
DEC 2017Completed Bermejal Underground drill program and announced 2.1 Mozof M&I Resources and 0.5 Moz of Inferred Resources
AUG 2016Completed C$35 million equity financing to fund target identification and due diligence
JAN 2017Signed agreement to acquire Los Filos from Goldcorp for US$350 million (US$71 million in Leagold shares and US$279 million cash)
MAR 2017Raised US$183 million in equity and US$150 in debt
SEPT 2017Commenced Bermejal Underground portal and ramp development
Corporate team turned its focus to pursuing the next acquisition
MAY 2018
Leagold Corporate History
JAN 2018Announced intention to commence shareholder supported take-over bid for Brio Gold, adding three producing mines and a development project in Brazil
FEB 2018Reached agreement to complete Brio Gold acquisition under friendly terms
MAY 2018Completed the acquisition of Brio Gold; raised an additional US$45 million in equity and US$150 in debt
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Q1 20171 Q2 20172,3 Q3 2017 Q4 2017 Full Year Q1 2018 Q2 2018
Ore mined Mt 1.4 2.0 2.2 2.7 8.3 2.1 2.3
Waste mined Mt 3.9 4.7 5.5 5.2 19.3 5.7 6.1
Total material mined Mt 5.3 6.7 7.7 7.9 27.6 7.8 8.4
Strip ratio w:o 2.7 2.4 2.6 2.0 2.4 2.8 2.7
Ore processed Mt 1.6 2.0 2.1 2.7 8.4 1.6 1.9
Avg grade processed g/t 1.00 0.81 0.9 0.9 0.9 1.0 1.0
Gold production koz 44 463 48 53 191 51 44
Gold sales Koz 43 54 47 51 195 51 43
AISC $/oz $968 $989 $993 $910 $964 $1,039 $967
Los Filos – Operating Highlights
1 Sourced from Goldcorp Q1/17 MD&A 2 For the period April 8/17 to June 30/173 Includes gold production from April 1/17 to June 30/17
Post-Leagold Acquisition
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Los Filos – Infrastructure and Process Facilities
Infrastructure
• Access
⁻ ~4 hour drive from Mexico City by paved roads
⁻ 30 minute flight to onsite paved airstrip
• Workforce and nearby communities
⁻ ~1,600 workers (union and non union employees plus contractors)
⁻ Closest communities are Mezcala, Mazapa, Carrizalillo, Zumpango, Chilpancingo, and Iguala
• Power: Supplied by InterGen and Comision Federal de Electricidad (CFE); 20MVA substation
• Process and potable water: Sourced from a large well on the Rio Balsas located 1.5 km west of Mezcala
• Site facilities: include maintenance shops, admin buildings, core facility, assay lab, explosive and fuel storage, electrical substation, camp (294 persons)
Heap Leach Processing Facilities
• Crushed and run-of-mine ore placed on heap leach pads
⁻ Open pit ore ROM recovery is 53%
⁻ Open pit ore crush recovery is 64%
⁻ Underground ore recovery is 80% - all underground ore is crushed
• Post acquisition improvements include:
⁻ Increased lift heights
⁻ Better control of flow rates
⁻ Optimization of CN and pH levels
⁻ Modification of leaching cycle
⁻ Reducing losses on carbon fines
• Capital improvements under way:
⁻ Agglomerator completed and fully operational in Q1 2018 ($1.3 million)
⁻ Conveyor extension completed up to the agglomerator in Q1 2018; will be fully completed and operational in Q2 2018 ($5.0 million)
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Los Filos – Regional and Local Geology
Highly prospective Guerrero Gold belt of skarn deposits within carbonates
Regional Geology
• Guerrero Gold belt is a north to northwest trending series of intrusives
• Large land package includes
⁻ Robust exploration potential with ~150k hectares
• Neighbouring operations
⁻ Regional producers and projects include Torex, Alio Gold, Telson, Agnico Eagle and Peñoles
Geology and Exploration at Los Filos
• Los Filos and Bermejal mineralization predominantly oxide mineralization is amenable to heap leaching
• Extensive exploration opportunities
⁻ At contacts and within intrusive bodies with several kilometres of strike
⁻ Intrusives are easily identified geological and geophysical targets for drilling
• Exploration targets along the same granitic/carbonate contact hosting known gold mineralization
⁻ Los Filos Underground: 5.4 Mt at 6 g/t to 13.2 Mt at 6.8 g/t (1.0 to 2.9 Moz) – drilling in progress
⁻ Bermejal East and West: 5.8 Mt at 6 g/t to 13.1 Mt at 7 g/t (1.1 to 2.9 Moz)
⁻ Guadalupe: 2.6Mt at 4 g/t to 7.7 Mt at 5.3 g/t (0.3 to 1.1 Moz)
⁻ San Pablo: 6.5 Mt at 1 g/t to 10.3 Mt at 1.5 g/t (0.2 to 0.5 Moz)
25
Los Filos – Safety, Environment, Community and Social Responsibility
Strong safety and environmental practices aligned with international standards
• The Los Filos mine has strong safety and environmental practices in place that are aligned with international standards
⁻ The workforce is comprised of union and non-union personnel and contractors, of which over 65% is from local communities, and less than 0.5% are expatriates
• Strong relationships with local communities
⁻ Mazapa (1.1 km, 315 people), Carrizalillo (1.5 km, 1,087 people), Mezcala (8.8 km, 3,382 people)
⁻ Total value of local procurement: US$8.7M (~5% of spend)
⁻ Land access agreements contribute US$14M per year to the 3 local communities
⁻ Additional US$1M per year in social collaboration agreements
• Security is actively managed
⁻ Perimeter security and access control, personnel security, gold security, explosives security, crisis management
• Leagold plans to continue proactive and co-planning approach with community engagement and involvement with the three local communities surrounding the mine
26
Leagold Mineral Resources
See notes on slide 28
Measured and Indicated Mineral Resource Estimates at December 31, 2017
Inferred Mineral Resource Estimates at December 31, 2017
27
Leagold Mineral Reserves
See notes on slide 29
Proven and Probable Mineral Reserve Estimates at December 31, 2017
28
Notes to Leagold Mineral Resources
Notes to Mineral Resource Estimates:
1. Mineral Resources are inclusive of Mineral Reserves.
2. No dilution or recovery is applied to Mineral Resources reported for Los Filos. Mineral Reserves for Fazenda Brasileiro, RDM, Pilar and Santa Luz include dilution and mining recovery factors.
3. Gold price of US$1,400/oz used for Los Filos; $1500/oz for RDM, Fazenda Braileiro, Pilar, Santa Luz.
4. Tonnage and grade measurements are in metric units. Contained gold ounces are reported as troy ounces.
5. Summation errors may be present due to rounding.
6. Los Filos mine: The Qualified Persons for Mineral Resources are Dr. Gilles Arseneau (Associate Consultant with SRK Consulting (Canada) Inc., and independent of the Company) for Los Filos Open Pit, Bermejal Open Pit and Bermejal Underground, and Doug Reddy (Leagold, SVP Technical Services) for Los Filos Underground Mine.
7. Riacho dos Machados mine: The Qualified Persons for Mineral Resources are Emerson Ricardo Re, MSc, AusIMM CP Geo, Registered Member of Chilean Mining Commission (Leagold, Corporate Director of Mineral Resources) and Jorge Augusto Basilio Fernandes, AusIMMCP Geo, (Leagold, Mineral Resources Coordinator).
8. Fazenda Brasileiro mine: The Qualified Persons for Mineral Resources are Emerson Ricardo Re, MSc, AusIMM CP Geo, Registered Member of Chilean Mining Commission (Leagold, Corporate Director of Mineral Resources) and Carlos Henrique Barbosa Pires, AusIMM CP Geo, (Leagold, Mineral Resources Coordinator).
9. Pilar mine: The Qualified Persons for Mineral Resources are Emerson Ricardo Re, MSc, AusIMM CP Geo, Registered Member of Chilean Mining Commission (Leagold, Corporate Director of Mineral Resources) and Jorge Augusto Basilio Fernandes, AusIMM CP Geo, (Leagold, Mineral Resources Coordinator).
10. Santa Luz project: The Qualified Person for Mineral Resources for the Santa Luz project is Mark B. Mathisen, CPG-11648 SME Registered Member, Senior Geologist, Roscoe Postle Associates.
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Notes to Leagold Mineral Reserves
Notes to Mineral Reserve Estimates:
1. Mineral Reserves are based on Measured and Indicated Mineral Resources.
2. Gold price of US$1,200/oz used for Los Filos, Fazenda Brasileiro, and Pilar underground mines; $1,250/oz for Santa Luz and RDM,and$1,300/oz for Três Buracos open pit at Pilar.
3. Tonnage and grade measurements are in metric units. Contained gold ounces are reported as troy ounces.
4. Summation errors may be present due to rounding.
5. Los Filos mine: The Qualified Person for Mineral Reserves is Rodolfo Balderrama Neder (Administración Los Filos, S.A.P.I. de C.V., a wholly-owned subsidiary of the Company, Mine Operations Manager).
6. Riacho dos Machados mine: The June 2017 Mineral Reserve was depleted to December 31, 2017 production pit topography. The Qualified Person for Mineral Reserves for the Riacho dos Machados mine is Stuart E. Collins, P.E., SME Registered Member (formerly Director of Mine Engineering and Strategic Development, Brio Gold Inc.).
7. Fazenda Brasileiro mine: The EOY 2016 Mineral Reserve was depleted to EOY 2017 based on production records. The Qualified Person for Mineral Reserves for the Fazenda Brasileiro mine is Stuart E. Collins, P.E., SME Registered Member (formerly Director of Mine Engineering and Strategic Development, Brio Gold Inc.).
8. Pilar mine: The EOY 2016 Mineral Reserve was depleted by EOY 2017 based on production stope topography; and includes a January 29, 2018 reserve update to the Tres Buracos open pit project. The Qualified Person for Mineral Reserves for the Pilar mine is Stuart E. Collins, P.E., SME Registered Member (formerly Director of Mine Engineering and Strategic Development, Brio Gold Inc.).
9: Santa Luz project: The Qualified Person for Mineral Reserves for the Santa Luz project is Stuart E. Collins, P.E., SME Registered Member (formerly Director of Mine Engineering and Strategic Development, Brio Gold Inc.)