TSXV:PML - PML Presentation... · TSXV:PML 10 $1,052.6M NPV 20.4 % IRR 3.2 Year Payback $683.9 M...

1

TSXV:PML

DEVELOPING PERU’S COPPER POTENTIAL

Corporate Presentation May 2016

TSXV:PML 2

FORWARD LOOKING STATEMENTS

Information and statements contained in this presentation that are not historical facts are “forward-looking information” within the meaning of applicable Canadian securities legislation and involve risks and uncertainties. Examples of forward-looking information and statements contained in this news release include information and statements with respect to: • acceleration of payments by Silver Wheaton to match third party financing by Panoro targeted for exploration at the Cotabambas Project • payment by Silver Wheaton of US$140 million in installments • negotiation of a definitive PMPA • Panoro weathering the current depressed equity and commodity markets, minimizing dilution to existing shareholders and making targeted investments into exploration at the

Cotabambas Project • mineral resource estimates and assumptions • the PEA, including, but not limited to, base case parameters and assumptions, forecasts of net present value, internal rate of return and payback; • copper concentrate grade from the Cotabambas Project; Various assumptions or factors are typically applied in drawing conclusions or making the forecasts or projections set out in forward-looking information. In some instances, material assumptions and factors are presented or discussed in this news release in connection with the statements or disclosure containing the forward-looking information and statements. You are cautioned that the following list of material factors and assumptions is not exhaustive. The factors and assumptions include, but are not limited to, assumptions concerning: metal prices and by-product credits; cut-off grades; short and long term power prices; processing recovery rates; mine plans and production scheduling; process and infrastructure design and implementation; accuracy of the estimation of operating and capital costs; applicable tax and royalty rates; open-pit design; accuracy of mineral reserve and resource estimates and reserve and resource modeling; reliability of sampling and assay data; representativeness of mineralization; accuracy of metallurgical test work; and amenability of upgrading and blending mineralization. Forward-looking statements are subject to a variety of known and unknown risks, uncertainties and other factors which could cause actual events or results to differ materially from those expressed or implied by the forward-looking statements, including, without limitation: • risks relating to metal price fluctuations; • risks relating to estimates of mineral resources, production, capital and operating costs, decommissioning or reclamation expenses, proving to be inaccurate; • the inherent operational risks associated with mining and mineral exploration, development, mine construction and operating activities, many of which are beyond Panoro’s control; • risks relating to Panoro’s ability to enforce Panoro’s legal rights under permits or licenses or risk that Panoro’s will become subject to litigation or arbitration that has an adverse outcome; • risks relating to Panoro’s projects being in Peru, including political, economic and regulatory instability; • risks relating to the uncertainty of applications to obtain, extend or renew licenses and permits; • risks relating to potential challenges to Panoro’s right to explore and/or develop its projects; • risks relating to mineral resource estimates being based on interpretations and assumptions which may result in less mineral production under actual circumstances; • risks relating to Panoro’s operations being subject to environmental and remediation requirements, which may increase the cost of doing business and restrict Panoro’s operations; • risks relating to being adversely affected by environmental, safety and regulatory risks, including increased regulatory burdens or delays and changes of law; • risks relating to inadequate insurance or inability to obtain insurance; • risks relating to the fact that Panoro’s properties are not yet in commercial production; • risks relating to fluctuations in foreign currency exchange rates, interest rates and tax rates; and • risks relating to Panoro’s ability to raise funding to continue its exploration, development and mining activities.

This list is not exhaustive of the factors that may affect the forward-looking information and statements contained in this news release. Should one or more of these risks and uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in the forward-looking information. The forward-looking information contained in this news release is based on beliefs, expectations and opinions as of the date of this news release. For the reasons set forth above, readers are cautioned not to place undue reliance on forward-looking information. Panoro does not undertake to update any forward-looking information and statements included herein, except in accordance with applicable securities laws.

TSXV:PML 3

INVESTMENT HIGHLIGHTS

ECONOMICS BEFORE TAX NPV = $US 1.5 B AFTER TAX NPV = $US 909 M

UNIQUE PORTFOLIO

READY FOR COMING COPPER SHORTFALL

FOCUSED IN PERU

PEAs COMPLETED ON TWO PROJECTS

COTABAMBAS Cu/Au/Ag

$1.5B CAPEX

ANTILLA Cu/Mo

$600M CAPEX

ANNUAL PRODUCTION Cu - 102 kt Au - 95 koz Ag - 1,018 koz Mo - 1.8 Mlbs

CASHFLOW BEFORE TAX NPV = $387 M/YR AFTER TAX NPV = $375M/YR

ECONOMICS BEFORE TAX NPV = $US 1.5 B AFTER TAX NPV = $US 909 M

TSXV:PML 4

SILVER WHEATON FINANCING SUMMARY

• Endorsement of Cotabambas Project

• Working Capital for Forseeable Future

• Matching of Exploration Investments for 2 years

• 8.4% of Initial Capital for 8% of Project Revenue

• Accretive, $1.30 NAV/share increases to $1.70 NAV/share

HIGHLIGHTS

Upfront Payment

Silver Wheaton will make an upfront cash payment of US$140 million

plus a Production Payment for an amount of silver equal to 100% of

silver production and an amount of gold equal to 25% of gold production

Production Payment

Silver Wheaton will make an ongoing payment equal to the lesser of: (i)

US$450 in the case of delivered gold ounces and US$5.90 in the case of

delivered silver ounces; and (ii) the applicable prevailing market price.

Early Deposit

US$14 million will be paid by Silver Wheaton as an early deposit. US$2

million will be paid in the first year following closing with US$1.5 million

paid annually thereafter.

Exploration Matching Provision

Silver Wheaton to match equity proceeds of up to a total of US$3.5

million raised in the first two years following signing of PMPA to fund

exploration at the Cotabambas Project.

Silver Wheaton Option

Silver Wheaton will have the option to terminate the PMPA either 90

days following delivery of a Feasibility Study or at any time upon giving

Panoro three months’ notice. Silver Wheaton can elect to receive a

portion of the early deposit either as cash or shares upon termination,

with Panoro having rights to defer cash payments over an up to two year

period.

BuyBack Option

Following a change of control, subject to certain conditions, Panoro has a

one-time option to repurchase 50% of the precious metals stream with a

payout based on the greater of: (i) a minimum fixed return (ii) a return

based on appreciation of precious metals prices over the term of the

PMPA; and (iii) a return based on appreciation of the Panoro share price

over the term of the PMPA.

TRANSACTION OVERVIEW

TSXV:PML 5

CAPITAL STRUCTURE & SHARE PERFORMANCE

Tickers

TSX-V:PML Lima:PML

Frankfurt:PZM

Share Price 52 Week Low-High

Shares Issued Fully Diluted Issued

220.6 million 237.8 million

$0.18 $0.09 - $0.19

Market Capitalization $40 million

Working Capital $4.4 million (24 months)

TSXV:PML 6

MANAGEMENT & DIRECTORS – PERU EXPERIENCE

MANAGEMENT DIRECTORS

Luquman Shaheen, P.Eng., MBA - President, CEO, Director Over 26 years experience in mining sector, 20 years experience in Peru and Latin America Yves Barsimantov - Vice President Operations & Peru General Manager 20 years management experience with Peruvian banking, fishing and mining sectors Luis Vela - Vice President Exploration Over 25 years exploration experience in Peru and Chile mining sectors

William Boden, C.A. – Interim CFO - Chairman Former Chairman of First Coal Corporation Anthony Laub - Director Partner at Laub & Quijandria Consultores y Abogados Richard Mundie, C.A. - Director Director of Taseko, former advisor to President Teck, M&A in Peru, representative in China Christian Pilon - Executive Director Peru - Director Over 30 years of experience in applied geophysics and mining sector, resident in Peru Christiaan Staargaard, P.Geo. - Director President and CEO of Lithic Resources Ltd. Lorne Torjhelm - Director President RNJ Ventures

TSXV:PML 7

P E R U A M I N I N G C O U N T R Y

INVESTMENT WEIGHTED ON COPPER

SIGNIFICANT PORTFOLIO OF MINING PROJECTS

Source: Peru Ministry of Energy & Mines

0.5

2.4

3.8

4.2

5.0

6.4

8.8

10.1

22.7

Japon

Brasil

Australia

Mexico

United…

Peru

Canada

EE.UU.

China

INVESTMENT FROM WORLDWIDE SOURCES (US$ BILLIONS)

Copper 73.8%

Iron 8.3%

Gold 7.6%

Polymetallic

Phosphate Zinc Silver Tin Potassium

TSXV:PML 8

P E R U

Corocohuayco, Xstrata

Trapiche, Buenaventura

Haquira, First Quantum

Los Chancas, Grupo Mexico

Quechua, Pan Pacific Copper

Zafranal, Teck / AQM

Soc Minera Cerro Verde

Antapacay, Glencore

Antamina, Teck

Toromocho, Chinalco

Constancia, Hudbay Minerals

Las Bambas, MMG

Cerro Verde, Soc. Minera Cerro Verde

Toquepala, Grupo Mexico

Tia Maria, Grupo Mexico

Quellaveco, Anglo American

2013 – 2014 9,000 MW power capacity growth

2018 - 2024 3,000 MW power

supply excess

Power Costs (¢/kWhr) Peru – 6.1

Chile – 12.1 Canada – 5.3

Australia – 8.9

Growing Power Supply

A C O P P E R C O U N T R Y W I T H P O W E R

Double Cu Production 2013 2016

2015 / 1.6 million tonnes

No. 3 Worldwide

Towards World’s Top Cu Producer

• 421,000 tonnes/year concentrate

• 102,000 tonnes/year refined Cu

• 5.6% of Peru’s 2015 Production

Cotabambas, Panoro Minerals

Antilla, Panoro Minerals

TSXV:PML 9

PANORO PROJECTS’ DISTRICT POTENTIAL DEVELOPMENT OF PROLIFIC COPPER REGION TO NATIONAL GOAL OF NO. 1 IN COPPER MINING

MMG, LAS BAMBAS

2016 BEGINS OPERATIONS $7.0 B DEVELOPMENT

GLENCORE, ANTAPACAY

$1.5 B DEVELOPMENT COMPLETED

GRUPO MEXICO, LOS CHANCAS

FEASIBILITY STAGE

FIRST QUANTUM MINERALS, HAQUIRA

ACQUIRED OCT. 2010 - 5 /¢lb Cueq

HUDBAY MINERALS, CONSTANCIA

ACQUIRED MAR 2011 - 10 /¢lb Cueq $1.7 B Development Completed , Operating

TSXV:PML 10

$1,052.6M NPV 20.4 % IRR

3.2 Year Payback

$683.9 M NPV 16.7 % IRR

3.6 Year Payback

C1 $1.22/lb Cu C2 $1.94/lb Cu

155 M lbs Cu 95 k oz Au

1,018 k oz Ag

2.6 B lbs Cu 1.6 M oz Au 17 M oz Ag

COTABAMBAS PROJECT

S E P T E M B E R 2 0 1 5 P E A

AFTER TAX

LIFE OF MINE PAYABLE METALS

CASH COSTS, NETS OF BY PRODUCTS CREDITS

ANNUAL PAYABLE METALS

Note: @ Cu = $US3.00/lb, Au = $US1,250/oz, Ag = $US18.50/oz

• Priority mining of high grade zones

• Stockpile low grade zones for processing at end of mine

life

• Waste marginal grade zones

• Life of mine mill feed reduced from 533.8 Mt to 483.0 Mt

• Waste to mill feed ratio increase from 1.0 to 1.25

• Reduce tailings storage required

• Replace crusher, conveyor, tunnel, stacker for wasterock

with surface haul trucks

Increased Early Cash Flows, and Improved Economics

Luis Vela, Vice President of Exploration for Panoro and a "qualified person" under National Instrument 43-101, has reviewed and approved the scientific and technical information

BEFORE TAX

TSXV:PML 11 Luis Vela, Vice President of Exploration for Panoro and a "qualified person" under National Instrument 43-101, has reviewed and approved the scientific and technical information

Prefeasibility Studies Clustered Porphyries and Skarns Oxide Leach & SX/EW Circuit

Improve Recoveries

Maria Jose Buenavista Cochapata

Enhance Project

Expand Project

Advance Project

4

2

3

Optimize Mine Plan

1

PREFEASIBILITY STUDIES TO INCLUDE ENHANCED AND EXPANDED PROJECT

OPTIMIZATIONS ARE EXPECTED WITH NO ADDITIONAL CHANGE TO EXISTING RESOURCE

CURRENTLY FOCUSED ON MARIA JOSE LOCATED 1.5KM NE OF CCALLA

COMPLETE TARGETED PROJECT ENHANCEMENTS AND EXPANSION BEFORE COMMENCING PREFEASIBILITY STUDIES

P E A R E C O M M E N D A T I O N S

COTABAMBAS PROJECT

2016 Targeted Project Growth

Project Enhancements, Drill Maria Jose Target

Prefeasibility/Feasibility Studies to come later

2 3 4

Completed 2015

Others Guaccle Carayoc

Gold


UPDATED PEA, OPTIMIZED MINE PLAN

COTABAMBAS PROJECT

• Improved mine plan results in higher grades in early mine life

• Improved production, grades, cashflows in years 1 - 7

Copper Silver

Exploration Upside

Exploration Upside

Exploration Upside

0.61% Cueq *

* Cueq calculated at base case commodity prices with no adjustment for recoveries

TSXV:PML 13

COTABAMBAS PROJECT P E A O V E R V I E W


483 Mt mineralization, waste:mill feed ratio 1.25

80,000 tonne per day open pit mine throughput

Mining with standard track & shovel methods

C1 = $US 1.22 lbs C2 = $US 1.94 lbs

Mining $3.59/t Processing $4.38/t G/A Costs $0.41/t

Standard crushing milling, floatation process

Concentrate hauled to port via truck

Power supply via new 60 km power line from Abancay

Initial capital cost $1.53 B

Lower Quartile Cash Cost

27% Cu, 11 g/t Au, 134 g/t Ag

Clean Concentrate

TSXV:PML 14

COTABAMBAS PROJECT D E P O S I T R E S O U R C E


Company Year Drill Holes

Metres

Antofagasta 1995 to 2002 24 8,538

CDLM 2002 to 2007 10 3,252

Panoro 2007 to 2012 29 17,785

Panoro 2012 to 2013 81 40,467

Panoro 2013 to 2014 11 4,946

Total 155 74,988

Resource Category

Zone Million tonnes

Cutoff Grade % Cueq

Cu %

Au g/t

Ag g/t

Indicated Hypogene 84.2 0.20 0.37 0.21 2.73

Supergene 8.9 0.20 0.73 0.31 3.07

Oxide Cu-Au 23.8 0.20 0.49 0.24 2.63

Oxide Au 0.2 0.20 - 0.66 3.74

Total 117.1 0.20 0.42 0.23 2.74

Inferred Hypogene 521 0.20 0.29 0.18 2.41

Supergene 7.4 0.20 0.73 0.18 1.93

Oxide Cu-Au 75.8 0.20 0.41 0.15 1.82

Oxide Au 1.2 0.20 - 0.61 3.27

Total 605.3 0.20 0.31 0.17 2.33

Source: April 2015 NI 43-101 Technical Report prepared by Amec Foster Wheeler & Tetra Tech

TSXV:PML 15

COTABAMBAS PROJECT E X P A N S I O N P O T E N T I A L

ALONG STRIKE

SOUTH PIT

NORTH PIT


TSXV:PML 16

COTABAMBAS PROJECT P R O J E C T S C A L E E X P A N S I O N P O T E N T I A L

PANORO CLAIMS

6

7

4

8 5

9

3 2

1

1. Ccalla and Azulccaca Deposits

Defined and expanding

2. Maria Jose Target

Newly defined Systematic and channel sampling completed

3. Guaccle – Buenavista Target

Mapping completed Limited historical drilling

9. Cullusayhua Target

8. Chuyllullo Target

7. Chaupec Target

6. Añarqui Target

5. Jean Louis Target

4. Ccarayoc Target

10 km

16

km


P E A S U M M A R Y

ANTILLA PROJECT

PEA FINANCIAL METRICS

Pretax NPV $US 491 M

IRR 22.2%

LOM Cashflow $US 1.26 B pretax $US 725 after tax

C1 $1.83/lb C2 $ 2.35/lb

After Tax NPV $US 225 M

IRR 15.1%

Initial Capital $US 603 M

LOM Sust Capex $US 324 M

12.4k dtpa Mo con @ 35.5% Cu

Payback Period 3.3 year pretax

4.1 year after tax


P E A S U M M A R Y

ANTILLA PROJECT

0.8:1Strip Ratio 297 Mt wasterock

LOM Payable Metal 1.94 Blbs Cu 44 Mlb Mo

150k dtpa Cu con @ 25.5% Cu

Payable Metal 81 Mlbs/year Cu

1.8 Mlbs/year Mo

350 Mt Mill Feed 40,000 tpd

24 year LOM

0.31% Cu @ 85% 0.009 % Mo @ 67%

12.4k dtpa Mo con @ 35.5% Cu

PEA DESIGN PARAMETERS

48% wasterock to build Tails Dam

TSXV:PML 19

Zone Cut-Off

Grade

Million Cu Mo

% Cueq Tonnes (%) (%)

Hypogene

Sulphide

0.175 103.9 0.24 0.01

Supergene

Sulphide

0.175 168.9 0.41 0.01

Leach

Capping

0.175 13.4 0.25 0.01

Overburden 0.175 5.6 0.25 0.01

Total 291.8 0.34 0.01

Cut-Off Grade Million Cu Mo


0.20 188.5 0.40 0.009

0.30 138.4 0.46 0.009

0.40 84.1 0.54 0.010

0.50 51.6 0.62 0.010

0.60 27.8 0.69 0.011

0.70 12.9 0.78 0.012

Antilla East Block Indicated Resource


RESOURCE ESTIMATE SUMMARY

ANTILLA PROJECT

• 55% increase of Indicate Resource • 291Mt of 350Mt mill feed is Indicated

Category • First 65 years mining at mill feed grade

@0.52% Cu, 0.01% Mo

Zone Cut-Off

Grade

Million Cu Mo


Hypogene

Sulphide

0.175 50.7 0.24 0.007

Supergene

Sulphide

0.175 25.9 0.34 0.008

Leach

Capping

0.175 13.4 0.21 0.008

Overburden 0.175 0.5 0.22 0.009

Total 90.5 0.26 0.007

Antilla East Block Inferred Resource

TSXV:PML

Southern Peru Copper Projects INFRASTRUCTURE DEVELOPMENT & ALTERNATE CORRIDORS

Current Corridor Road to Matarani Port

Pros • Existing Roads • Existing Port Cons • Congestion along road • Safety • Environmental Impacts • Port Congestion, Control

Alternate Corridor ‘A’ Road/Rail to Matarani Port

Pros • Reduce Road Congestion • Improve Safety • Reduce Impacts • Existing port Cons • Requires Road to Railway • Congestion on New Road • Port Congestion, Control • Railway Control

Alternate Corridor ‘B’ Road to Marcona Port

Pros • Second Port Alternative ,

Competition • Existing National Highways • No Railway Control Cons • Road Upgrade to New Port

Required

Alternate Corridor

‘B’

Current Corridor

Alternate Corridor

‘A’

Arequipa

TSXV:PML 21

R E G I O N A L

Antilla Cotabambas

2018

2016

Bankable Feasibility

Study, Permit, Finance

Preliminary Economic

Assessment

Cochasayhuas

Kusiorcco

Promesa

El Rosal Chap. - Chapi

Mineral IRL JV

Utupara Mineral IRL JV

Pistoro Norte

Sancapampa

Pataypampa

Humamantata

Morosayhuas

Anyo

Alicia 2% NSR

Checca

Development

Feasibility

Advanced Exploration

Early Exploration

Level 2 Prospects

Level 1 Prospects

INFRASTRUCTURE DEVELOPMENT

Production 2020

Antilla

TSXV:PML 22

PANORO MINERALS – POTENTIAL DIVERSIFIED COPPER PRODUCER

TSXV:PML 23

P A N O R O S T R A T E G Y

2007 2009 2012 2013 2013

Cu Au Ag Mo

400% GROWTH

Cotabambas

at Acquisition

Antilla Resource

Added

Cotabambas 2012

Resource Growth

Cotabambas 2013

Resource Growth

Antilla 2013

Resource Growth

75%

84%

77%

75%

76%

25%

14%

18%

19%

17%

4%

4%

4%

31 Mlb

1%

2%

3%

2%

1.6 MoZ

1.5 Blb

3.1 Blb

1.6 Moz

5.3 Blb

3.0 Moz

31 Mlb

37 Moz

1.1 Blb ind 5.7 Blb inf

0.9 Moz ind 3.3 Moz inf

3 Mlb ind 56 mlb inf

10 Moz ind 45 Moz inf

2.7 Blb ind 5.1 Blb inf

0.9 Moz ind 3.3 Moz inf

41 Mlb ind 54 mlb inf

10 Moz ind 45 Moz inf

EXPLORATION DEFINES NEXT PROJECT

COTABAMBAS PEA COMPLETE

ANTILLA PEA UNDERWAY

1. BANKABLE FEASIBILITY

2. PERMIT

3. DEVELOPMENT FINANCING

2007 – 2014 2014 – 2016 2016 – 2018

PROMESA ANYO HUMAMANTATA KUSIORCCO

• 4,060 ha • 5 km by 2 km porphyry • 772 geochem samples • 40 km IP • 45 km Mag • 37 km SP

• 5,000 ha • Porphyry & Skarn • Hydrothermal Breccia • 235 geochem samples

• 3.962 ha • 4km by 1.7 km mineralized • Two Porphyry zones • Two Skarn zones • IP & Mag correlated

• 5,000 ha • 1480 ha porphyry • 772 geochem samples • 4 drillholes • 75 km IP • 76 km Mag

2018 – 2020

DEVELOP, PARTNER, OR DIVEST

TSXV:PML 24

Supply Pressures Refined Cu

• Greater Production

Disruptions in Chile & Indonesia

• Declining Mine Grades • Increasing Closures • Curtailing Production • Declining Supply of Scrap • Peak SX/EW Capacity

Reached in 2017 • Chilean Mine Output

Decline Begins 2014

Shift to Cu Concentrates

• Prone to Disruptions Technical Issues Slow Ramp-ups Declining Grades Strikes & Protests Natural Disasters Cutbacks

• China Mine Output Set to Decline

• Declining Availability of Clean Concentrates

Concentrate Demand Growth

• China Growing from Larger Base

• Economic Rebound ex-China • China Refocused on

Infrastructure Spending • China Shifting Model away

from Cathode towards Concentrate imports

• 2015 Chinese Concentrate Imports Exceed Cathodes (First Time)

Forecasted Shortages

• Macquarie 1.0 Mt, 2018-2020

• Canaccord 1.1 Mt, 2018-2019

• RBC 0.9 Mt, 2017-2019

• Cu Shortfall Increasingly

from Shortage of Concentrate supply

STRUCTURAL CHANGES TO COPPER MARKET

TSXV:PML 25

2010

$ 1

3.8

M P

.P.

$ 1

5.0

M S

FP

$ 5

.8 M

SFP

$ 0

.7 M

P.P

.

$ 7

.8 M

P.P

.

$ 20 M P.P. $

6.6

M P

.P.

$ 2

0 M

P.P

. $ 20 M P.P.

2008 2009 2011 2013 2012 2007 2008-09 2010 2011 2012 2013 2014 2015

GROWING FINANCING SUPPORT

2016

US

$1

4 M

Ea

rly

Dep

osi

t

US

$1

26

M

Ad

van

ce P

aym

ent

TSXV:PML 26

C O N C L U S I O N

COTABAMBAS PROJECT

Large scale copper project, greater potential, strategic location

ANTILLA PROJECT

Moderate scale project, infrastructure ease

FINANCED

Silver Wheaton multi year agreement

COPPER

Principal commodity with supply constraints coming and demand strong

PERU

Key copper producing nation with national goal to double copper production

GROWTH

2007 to 2013 a 400% increase of in-situ metal Cotabambas and Antilla Preliminary Economic Assessment completed

27

TSXV:PML

Frankfurt:PZM

BVL:PML

For further information, contact:

Luquman Shaheen, President and CEO

Phone: 604.684.4246

Email: [email protected]

www.panoro.com

TSXV:PML - PML Presentation... · TSXV:PML 10 $1,052.6M NPV 20.4 % IRR 3.2 Year Payback $683.9 M...

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