14 October 2020

GEOLOGY AND IMPLICATIONS FOR

INVESTORS

PORPHYRY WAVE RIDERS

Copper Porphyries – Why Care?

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“Porphyry deposits, suppliers of ~75% of the world’s copper and of significant proportions of Mo, Au, Re, are formed in subduction-related magmatic arcs.”

M. Chiaradia & L. Carrichi, Scientific Reports, Nature.Com(Published 15 March 2017)

Source: Assessment of undiscovered copper resources of the World, 2015. USGS.

“Estimated global mine production of copper decreased to 20m tons in 2019” USGS

Codelco – 1.7m Tonnes Cu

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BHP – 1.7m Tonnes Cu

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BHP – 1.7m Tonnes Cu

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“We have a strong and resilient portfolio for today and for the foreseeable future. Big, low cost assets, in commodities with steep cost curves and resilient near term demand.”

Mike Henry CEO, February 2020 Speech.

Source: BHP Copper Division Presentation 2015

BHP – “Future Facing Commodities”

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“Looking to the future though, I intend for BHP to deliver great value and returns to shareholders for decades to come. And this will require us to create and secure more options in future facing commodities. Options where we can deploy capital and capability to continue to grow value.

These options will come from both within our existing footprint, as well as through securing more resources through exploration and early stage entry, all supported by our disciplined capital allocation framework.

This effort will also help us address one of our other portfolio challenges. We have a good pipeline of high returning growth options on the 5-10 year horizon. Beyond that however the cupboard starts to look a bit bare. We will secure more longer-term options and they will be aligned to future markets and demand.

We will build upon our strong foundations and we will make the changes required to create a safe, lean, high performing and future-facing BHP.”

Mike Henry CEO, February 2020 Speech.

“We are already a major producer of copper and nickel and are seeking further options in these commodities, which see strengthening demand as the world moves to de-carbonise. Potash also sees upside in a de-carbonising world.”

Mike Henry, CEO (Page 2)

Freeport McMoran – 1.5m Tonnes Cu

7Source: Freeport McMoran 2019 Annual report

Copper Porphyries – Why Care?

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• Enormous value creators / Company-makers.

• Operate through the cycle / Strategic low-cost producers.

• Geological links / drivers of other types of deposit.

A Former Porphyry Wave-Rider Champion

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1910: William Thompson founded Magma Copper Company

1912: Magma’s u/g mine in Superior, Arizona started production.

1916: No. 2 Shaft encountered the Magma Vein:10m thick, averaging 10.5% Cu, 5.4 oz/ton Ag, & 1.3 oz/ton Au.

Thompson founded Newmont Mining Corp. in 1916.

Over the 85 year life of Magma Copper’s operations in Superior (1912-1996), approximately 28m tons of ore averaging 4.9% copper were mined, recovering 1.3m tons of copper, 36.5k tons of zinc, approx. 686k ounces of gold and 34.3m ounces of silver.

The deeper porphyry was only discovered in 1995.

Resolution Porphyry Cross-Section

10S27A: 245m at 1.2% Cu. S27E: 460m at 0.6% Cu. S27H: 43m at 1.9% Cu.

Resolution Copper (55% Rio / 45% BHP) - Porphyry

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Resolution Copper (55% Rio / 45% BHP) - Porphyry

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Shaft 10 took 6 years to complete and was completed in 2014.

‘Sinking of Shaft 9 continues on schedule and on budget, reaching a depth of 1,906m out of 2,086m total by the end of June 2020.’ Rio Tinto’s Half Year Report, 29 July 2020

Approx. US$2bln spent to date since 2004.

Resolution: ~ US$6bln Capex - Why So Much Capex?

13Source: Resolution Copper Mining, General Plan of Operation, Revision January 2016

Newcrest’s Exploration Strategy – Enabled by Block Caving

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Source: Newcrest’s General Manager of Exploration Fraser MacCorquodale 2018 Presentation

Resolution

15Source: Resolution Copper Mining, General Plan of Operation, Revision January 2016

• Total Capex: US$6bln.

• 40 years mine life.

• Ore production rate 120,000 tonnes per day.

• Copper production approx. 450,000 tonnes per annum.

• 25% of US copper supply.

Porphyry Wave Rider Champions

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The Guggenheims controlled El Teniente, Chuquicamata and Bingham Canyon.

‘By the end of World War 1 they controlled 75% of the world’s copper, silver and lead and were one of the world’s richest families, worth $275m.’

Geology of Porphyries - Basics

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• Hydrothermal alteration zones

1: Hydrothermal Alteration

18Source: Modified from Guilbert and Lowell, 1970.

Idealised Structure of a Porphyry Copper Deposit

• Hydrothermal fluids ‘ex-solve’ from magma.

• Base metal solubility is high in hot, saline fluids.

• Cooling reduces the solubility of base metals.

• Copper precipitates out of the fluids at 300-400 degrees C and depths of 1-2 km.

K-FeldsparBiotite

ChloriteCalciteEpidote Adularia

Kodiak Copper

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16 January 2020: Discovery Hole: 102m at 0.53% Cu and 0.19g/t Au (from 405m)

Solgold

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“The geology team interpret that the combined presence of visual epidote veining, molybdenum mineralisation and potassic K-feldspar-biotite-magnetite alteration indicate that PDH-20-001 hole is drilling across the upper periphery of the core of this porphyry copper-gold system.”

K-FeldsparBiotite

ChloriteCalciteEpidote Adularia

Source: Solgold 1 October 2020 RNS

Escondida

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The Prize!

Escondida (Hidden One)

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1979: Getty Oil Company and Utah Intl. start a copper exploration project.

The project was based on David Lowell’s assumption that the belt of mid-Tertiary-age Chilean porphyry copper deposits would project in a straight line from El Salvador to Chuquicamata across an area partly covered by post-mineral gravels and extrusive rocks.

‘The decision to drill test the Escondida-Zaldivar area was taken in early 1981 on the basis of the exploration results obtained, in particular the zonal geochemical and alteration patterns, presence of peripheral veins, high molybdenum geochemistry and partially hematitic leached capping.’ Ortiz et al.

Source: Ortiz & Lowell et. al.

Hole 6 was the discovery hole and intersected 52m at 1.51% cu below 241m of leached capping.

Total Resource at 30 June 2019:19,940Mt at 0.49% Cu, 98Mt Cu.(Inc. Reserves)Source: Rio Tinto Annual Report

Ecuador – The Same Thinking

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PORPHYRY WAVE RIDERS

14 October 2020

8:20am to 8:35am Dr Greg Corbett – Understanding Porphyries 8:35am to 8:50am Stavely Minerals – Chris Cairns8:50am to 9:05am Solgold – Jason Ward9:05am to 9:20am Alkane Resources – Ian Chalmers9:20am to 9:35am Professor Jamie Wilkinson – Green Rock Vectoring9:35am to 9:45am Cailey Barker – Investing in Exploration9:45am to 10:00am Q&A