THE LOST SHEEP FLUOSPAR MINE

THE LOST SHEEP FLUOSPAR MINEHigh-Grade Mine Domestically

Supplying the US Market

Investor Presentation October 2020

Cautionary Statements

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Important Information

This presentation contains forward looking statements that are based on management’s expectations and assumptions. They include statements preceded by thewords ‘believe’, ‘estimate’, ‘expect’, ‘intend’, ‘will’, and similar expressions, and estimates of future production, costs and dates of construction completion, costs ofcapital projects and commencement of operations. Actual results may differ materially from expectations. Among the important factors that could cause actual resultsto differ materially are the following:

Natural resource exploration and, ultimately, the development of deposits are activities subject to significant risks. The probability of success for any given explorationprogram cannot be predicted with any degree of certainty. It is impossible to know whether the current exploration programs of the Corporation will ultimately resultin a profitable, commercial mining operation.

The ultimate economic value of a discovery and the decision to bring the project into production are based on a number of factors including the attributes of thedeposit (such as its size and the quantity and quality of the ore), market conditions, mining costs, availability of financing, confirmation of land title, environmentalconsiderations and mining permits. At any point in time throughout this exploration and evaluation process, results and external conditions can adversely affect itsprogress and outcome.

Investment in an exploration venture is highly speculative. Although there are examples showing that the returns on such investment can be proportionate to theinvestment risk, there is no guarantee that any current or future activities of the Corporation will ultimately lead to similar returns for its shareholders.

Production may vary from estimates for particular properties and/ or the Company as a whole because of changes in reserves, variation in ore mined from estimatedgrade and metallurgical characteristics, unexpected ground conditions, mining dilution, labour actions, and government restrictions. Cash costs may vary due tochanges from reserve and production estimates, unexpected estimates based on total costs and reserve estimates, change based on actual amounts of unamortizedcapital and changes in reserves. Capital cost estimates are based on operating experience, expected production, estimates by and contract terms with third-partysupplies, expected legal requirements, feasibility reports by Company personnel and others and other factors.

Factors involved in estimated time for completion of projects include the Company’s experience completing capital projects, estimates by and contract terms withcontractors, engineers, suppliers and others involved in design and construction of projects, and estimated time for the government to process applications, issuepermits and take other actions. Changes in any factor may cause costs and time for completion to vary significantly from estimate. There is a greater likelihood ofvariation for properties and facilities not yet in production due to lack of actual experience.

Work performed on the properties described in this presentation has been insufficient to classify resource estimates as current resources. Historical and estimatedresource tonnages and grades have not been verified by a Qualified Person under NI 43-101 requirements. The Company, therefore, is not treating historical andestimated resource numbers as verified estimates and investors are cautioned not to rely upon these estimations.

USA Disclaimer: This document does not constitute an offer to sell or a solicitation of an offer to sell any of the securities in the United States. The securities have notbeen and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or any state securities laws and may not beoffered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption fromsuch registration is available.

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Fluorspar: A Critical MineralIn Summary

• USA classified fluorspar as both a strategic and critical metal

o Ares’ newly acquired claims will be fast tracked through themining permitting process

• USA reliant on imports with no domestic mine production

o Aluminum and steel producers, refrigeration manufactures, and cement producers, import all fluorspar from Mexico andVietnam

o Aluminum producers require 60 lbs of high-grade fluorsparper ton of aluminum

o Steel mills require 10-20 lbs of fluorspar per ton of steel

o Lost Sheep can produce fluorspar at a lower cost than any imported fluorspar

• China has turned from a net exporter to a net importer due tosurging demand

• Global Fluorspar market size was over US$2 billion in 2016 and will exhibit growth by a CAGR of over 4% up to 2024

o Global Revenues to exceed US$4 billion by 2024

Source: Global Market Insights3



Fluorspar: A Critical Mineral

500

400

300

200

100

02015 2016

USA Import Sources (2015-2018)

2017 2018 2019

Tota

l Flu

ors

par

(in

kto

ns)

USA Reliant on Imports

USA Relies Almost Exclusively on Fluorspar Imports

Imports - Acid Grade Imports - Metallurgical Grade Consumption

Mexico 66%

Vietnam 13%

SouthAfrica8%

China 6%

Other 7%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Percent of USA Imports

Source: U.S. Geological Survey4



Acidspar+97% Purity

Metpsar 60%-96% Purity

65% of total production 35% of total production

1. Aluminum Production: Used to produce aluminum fluoride, which acts as a flux to lower the bath temperature of aluminum

2. Hydrofluoric Acid: Primary source of all fluorochemicals with a wide range of applications including:

– Fluorocarbons, e.g. refrigerants gases, propellants, etc.

– Electrical and electronic appliances– Metallurgical industry– Lithium batteries– Pharmaceuticals, polymers and agrochemicals– Petrochemical catalysts

• Most commonly used as a flux in steel manufacturing, iron foundries and ferroalloy processing

• Used as a flux in cement production to speed up the calcination process

Fluorspar: A Critical MineralFluorspar Production Types

Source: Industrial Minerals

Evaluating Future Potential Current Production

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Consolidating the Spor Mountain DistrictHighest Naturally Occurring Fluorspar Grades in North America

• Technical studies confirming grades at Lost Sheep average ~87%

o Higher than grades from Mexico and Vietnam

o Typical grades at other global operations range from 5% - 30%

o Potential for direct ship metspar at Lost Sheep, with no further processing

• Consolidated 586 ha land package covering the entireSpor Mountain District

o Uniformly high grades observed throughout the entire mountain range

• No fluorspar deposits of comparable size and grade have been identified in North America

• Near-term production potential on fully permitted land atthe Lost Sheep Mine

o Additional satellite mines can be permitted in ~6 weeks

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High-Grade Mineralization

• Fluorspar mineralization occurs as rising intrusive bodies forming breccias hosted in limestone.

• Mineralized breccia pipes are typically steeply plunging and elliptical.

• Clusters of mineralized pipes in short distances suggest the possibility that the pipes may be interconnected

• Unlike currently imported Fluorspar, the Lost Sheep product contains no sulphides or arsenic

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District Scale Potential

Lost Sheep andPurple Pit Mines

Dell Mine

Fluorine Queen Mine

Hidden Treasure and Jezzebelle Mines

Floride Mine

Hilltop MineBlowout Mine

• Fluorspar mines/pipes exposed in south slopes of the Spor Mountain (normal fault planes).

• Pipes formed prior to faulting, therefore, they are offset and lower portions exposed in fault planes.

• Top part of the pipes can be found applying simple geometry in the hanging wall blocks.

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Project Location and InfrastructureBuilt for Operations

✓ 72km northwest of Delta, Utah

✓ Excellent access & infrastructure

✓ Paved highway to site and extensive network of access roads on site

✓ Railway for delivery attached to the Deltaprocessing facility

✓ Local population available for labour

Utah

LostSheep Property

~98 km by road from site toDelta

DeltaProcessing Facility

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Existing Fluorspar OperationCustomer Base Already Established

Established Customer Base

• Ares committed ordersexceeding US$10M

o In discussions with major offtake partners

o Existing metspar customers have also requested acidspar

o Currently supplying small shipments of metspar to steel producers

o Potentially uncontested and unlimited market due to global supply shortfall.

Existing Operation with Historic Production

• Production dates back to the 1940’s, when the Spor Family firstdiscovered fluorspar on the property

• Lost Sheep Mine produced from 3 pipes from 1948-2007

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o Developed as an open pit and transitioned into underground mining

o Production at Lost Sheep totaled 169,744 tons of ore, withgrades averaging 80%, assaying up to 90%


• 2020 drilling confirms high-grade Fluorspar at the LGP.

• Breccia pipes can beinterconnected as demonstrated in our phase 2 drill program.

2020 Drill Program

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Near-Term Production PotentialMetspar Operation

• Production sourced from past producing areas which are currently permitted for mining

o Includes the development of an underground operation at the Little Giant Pit, and a newly discovered pipe north of the Purple Pit

o Existing stockpiles may also be sourced for processing

• ~US$3-5M re-start capital requirement, with 3 months of lead time required

• Producing direct ship metspar (high-grade material not requiring upgrading), and upgraded metspar product

o Metspar is currently priced at US$325/t

o Capable of producing +3,000 tonnes of metspar per month

Simple Operating and Processing Plan

Underground Mine

Truck to Delta Facility

Stockpile

Product Bagged for Shipping

Direct Ship Metspar

Crusher Circuit

Fine Ore Storage and Pre-

Concentration

Flotation

Primary CrusherUpgrade Metspar

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Near-Term Expansion PotentialAcidspar Operation

• Potential to expand operation to produce acidspar within months of re-starting metspar operation

o Minimal expansion capital required,estimated at ~US$6M

o Expansion includes the installation of a flotation circuit at the processing facility

o Expansion allows Ares to increase production and purity of material from metspar (<97%) to acidspar (+97%)

• Expands production to +5,000 tonnes of acidsparper month

o Acidspar is currently priced at US$500/t

o Expansion increases revenue and margin

o Potential to optimize operations to produce both metspar and acidspar at optimized economic rates

• Further expansion potential to +10,000 tonnes per month thereafter

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Milestones and Upcoming CatalystsFast-Tracking Production and Expansion

• Drill program designed to show long-term operation (2-30 years)

Expansion

Total timeline = 1-2 years. Goal of 100,000 tpy of acidspar production

Exploration Studies Production

• Commencement of acidspar production at 3,000 tpm

• Increasing acidsparproduction to 5,000tpm

• Evaluating additional acquisition opportunities

• SGS metallurgy completion and plant selection

• Preliminary mine plan completion

• Permitting of new mining sites on property

• Economic studies on metspar and acidspar potential

• NI 43-101 maiden resource

• Adit construction

• Crusher, ore sorter, bagger and conveyor belt installation

• Commencement of metspar production at 1,000 tpm increasing at a rate of 500 tpm

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Unit 1001 – 409 Granville Street Vancouver, BC

V6C 1T2

[email protected]

+1 (604) 345-1576

TSXV:ARS


mailto:[email protected]

THE LOST SHEEP FLUOSPAR MINE

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