Corporate Presentation - January 2020 - TSXV & BVL:TK | OTCPK: TKRFF www.tinkaresources.com - Tinka Resources Ltd.
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TSXV & BVL:TK | OTCPK: TKRFF www.tinkaresources.com Corporate Presentation – January 2020
Disclaimer
This presentation does not constitute or form a part of, and should not be construed as an offer, solicitation or invitation to subscribe for, underwrite or otherwise acquire,
any securities of Tinka, nor shall it or any part of it form the basis of or be relied on in connection with any contract or commitment whatsoever.
Readers are cautioned that the PEA is preliminary in nature, it includes inferred mineral resources that are considered too speculative geologically to have the economic
considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the PEA results will be realized. Mineral
resources that are not mineral reserves do not have demonstrated economic viability. Additional work is needed to upgrade these mineral resources to mineral reserves.
Certain information in this presentation contains forward-looking statements and information within the meaning of applicable securities laws (collectively "forward-
looking statements"). All statements, other than statements of historical fact are forward-looking statements. Forward-looking statements are based on the beliefs and
expectations of Tinka as well as assumptions made by and information currently available to Tinka's management. Such statements reflect the current risks, uncertainties
and assumptions related to certain factors including but not limited to, all costs varying significantly from estimates, production rates varying from estimates, changes in
metal markets, changes in equity markets, availability and costs of financing needed in the future, equipment failure, unexpected geological conditions, imprecision in
resource estimates or metal recoveries, ability to complete future drilling programs, delays in or failure to obtain the necessary permits, drilling program results varying
from expectations, timing of geological reports, the Company’s ability to realize the results of the PEA, approvals from local authorities, community relations, timing and
completion of any surface rights agreements, and other development and operating risks. Should any one or more of these risks or uncertainties materialize, or should
any underlying assumptions prove incorrect, actual results may vary materially from those described herein. Forward-looking statements are not guarantees of future
performance and accordingly undue reliance should not be put on such statements due to the inherent uncertainty therein. Except as may be required by applicable
securities laws, Tinka disclaims any intent or obligation to update any forward-looking statement.
The Mineral Resources disclosed in this presentation have been estimated by Mrs. Dorota El Rassi, P.Eng., an employees of Roscoe Postle Associates Inc. (RPA). Mrs. El
Rassi is a Qualified Person as defined under the meaning of Canadian National Instrument 43-101 (“NI 43-101”) and independent of Tinka. Mr. William Colquhoun,
Principal Metallurgical Consultant with Amec Foster Wheeler (Perú) S.A., a Wood company, a Qualified Person as defined in NI 43-101 and independent of Tinka, is
responsible for the PEA results contained in this presentation. Ms Stella Searston, RM SME, a Principal Geologist Associate with Amec Foster Wheeler E&C Services, a
Wood company, a Qualified Person as defined in NI 43-101 and independent of Tinka, is also responsible for the PEA results contained in this presentation. Mr. Edwin
Peralta, P.E., a Senior Engineer with Wood Mining and Metals USA, a Qualified Person under NI 43-101 and independent of Tinka, is also responsible for the results of the
PEA. Mr Adam Johnston, CP (Metallurgy) of Transmin Metallurgical Consultants, a Qualified Person as defined in NI 43-101 and independent of Tinka, is responsible for
the metallurgical and recovery inputs contained in this presentation. Dr. Graham Carman, CEO and a Director of Tinka, and a Qualified Person as defined in NI 43-101, is
responsible for other technical information in this presentation (information not directly related to the Mineral Resource Estimate or the PEA).
2
Strategic Investment by Buenaventura o Compañia de Minas Buenaventura acquired a 19.3% strategic equity stake in Tinka Resources (January 2020) o “We will develop the concept that Ayawilca will be a satellite Ayawilca mine for Buenaventura”, said CEO Victor Gobitz, Gestion, Jan. 17, 2020 o Buenaventura (NYSE: BVN) is a +US$4B precious & base metals mining company with numerous operations in Peru o Sentient Equity Partners also invested C$2.5 million in Jan. 2020 3
Ayawilca Project: Highlights
Ayawilca Zinc-Silver Project
o Buenaventura becomes a strategic investor in Tinka at a substantial premium
to market price (C$16 million @ C$0.243)
Peru
o +7 billion pounds of zinc in resources, plus silver & lead credits
o Silver Zone discovery during 2019 highlights high-grade Ag potential
Ayawilca
o PEA in July 2019 shows a robust project with strong potential cash flow
o Good infrastructure (power, water, roads) and community relationships
o C$23 million cash (January 2020)
2020 Work Program
o Large land position - extensive soil sampling / prospecting underway
o More step-out and infill drilling planned from early 2020
o Permitting underway to drill-test targets on wider land package
o Reviewing PEA assumptions
4
Market Capitalization & Investors (at Jan. 13, 2020)
TSXV & BVL: TK | OTCPK: TKRFF Major Shareholders
Institutional:
Shares Issued: 340.7 M
Sentient Equity Partners 22%
Options (priced $0.325 to $0.50) 11.1 M
Buenaventura 19%
Warrants (priced at $0.45 exp May ‘20) 12.4 M
IFC 9%
Fully diluted: 364.8 M
JP Morgan UK 5%
Market cap @ C$0.20/share: C$68 M CD Fund 5%
Cash (at Jan. 2020): ~C$23 M Other institutions ~5%
Enterprise Value @ C$0.20/share: ~C$45 M Total Institutional 65%
Management & Insiders 2%
Retail 33%
Analyst Coverage
Ian Parkinson
Kevin MacKenzie
George Topping
5
Management & Board
Management – Extensive Peru and Zinc Experience
Dr Graham Carman President & CEO, Director Geologist, 25 years global exploration experience with Rio
Tinto, Savage, Pasminco, juniors. PhD on Lihir Island Gold
Alvaro Fernandez-Baca VP Exploration, Peru Geologist, 20 years global exploration experience with
Gitennes, AQM Copper & Hochschild.
Cesar Carbajal HSEC Manager Social management specialist, 15 years experience with Teck,
MWH, Peru Ministry of Mines.
Mariana Bermudez Corp. Secretary 20 years regulatory compliance services experience.
Nick Demare CFO, Director CPA, CA, extensive junior board experience.
Independent Directors
Chairman of the Board. Mining engineer, MBA, 25 years experience in mining, oil & gas, and private
Ben McKeown
equity.
Sentient Group representative. Professional engineer, MBA, 25 years experience in mineral resources
Pieter Britz
industry and mining investment.
Mary Little Geologist with 25 years experience in Latin America, MBA, Founder of Mirasol Resources.
6
Ayawilca Project – Central Peru
o Peru is a top 2 global producer of zinc, copper and silver
o Pro-mining country – mining accounts for over 50% of exports
ECUADOR
Rank in Latin
Mineral World America
2018 2018
Ayawilca
Project Zinc 2nd 1st
BRAZIL
Antamina
Copper 2nd 2nd
Central Peru Tin 4th 1st
zinc belt
Lead 3rd 1st
San Rafael
Las Bambas Silver 2nd 2nd
BOLIVIA
Gold 6th 1st
Source: USGS 2018
CHILE
7
Central Peru – Mines & Infrastructure
Antamina:
Largest current copper/zinc
mine in Peru
Cerro de Pasco:
Largest historic silver/zinc mine
in Peru
Giant Ore Deposit
8
Tinka – Resource Growth 2015 to 2019
o Tinka has successfully grown the Ayawilca zinc resource year-on-year
o Further potential exists to grow the resource quality, tonnage and grade
Ayawilca Resource Growth 2015 to 2018
60
INFERRED
50
40
Resources (Mt)
Inf. 2018; 6,738
Inf. 2017; 6,873
30
Inf. 2016; 3,385
20 Inf. 2015; 2,258
Ind. 2018; 2,149
INDICATED
10
Bubble size indicates contained zinc-equivalent pounds (Mlbs)
0
2014 2015 2016 2017 2018 2019
9
Ayawilca - One of the Largest Zinc Resources 1 ZnEq includes all metals. Source: Stifel-GMP, July 2019 10
Ayawilca Geology & Resources
o Tinka owns 170 km2 of mining
claims (100%)
o Three deposits on property:
Ayawilca Focus Area - Plan View with Geology
1. Zinc Zone 2. Tin Zone
3. Colquipucro Silver Zone
Tinka Claim
Boundary
Ayawilca Claim Map
11Focusing on Thick Zones & High Grade
o Ayawilca is a “manto”
style carbonate
replacement deposit
(“CRD”). Mantos are
stacked at South and
West Ayawilca –
greatest thickness and
highest grades
o Drilling continues to
target high-grade
resources at shallow +
+
depths, with the
potential for bulk
underground mining
122019 Drill Highlights - South Ayawilca
o Grades in 2019 drill holes are
well above the average grade of
Zinc Zone resource
• Hole A19-165: 9.0 m @ 11.9%
zinc and 25.9 m @11.8% zinc
and 28.7 m @ 14.0% zinc and
14.9 m @ 12.3% zinc
• Hole A19-163: 5.7m grading
32.6% zinc at edge of resource
o Discovery of Lower Silver Zone
• Hole A19-163: 13.9 m @ 128
g/t silver
• Hole A19-167: 7.3 m @366 g/t
silver with 4.9% zinc and 7.9 m
@ 150 g/t silver with 6.1%
zinc
13Ayawilca PEA – A Robust Zinc Project
o PEA assumed a 5,000 t/d UG operation with ramp access with on-site processing for two concentrates
o After-tax NPV8% of US$363 million
o Opportunities for optimization include:
Mining of higher grade zinc zones, especially early in the mine plan
Lower cost mining methods, increased mining rates, and other opportunities
Ayawilca PEA after-Tax NPV8% Sensitivity
800.0
700.0 Higher zinc grade and price
US$566 M 600.0 Reduced OPEX
20% grade increase
500.0
US$453 M 20% lower OPEX
400.0
(US$M)
US$363 M PEA Base Case
300.0
200.0
100.0
-
-40% -30% -20% -10% 0% 10% 20% 30% 40%
(100.0)
Change in Parameter
Zinc selling price Lead selling price Silver selling price Feed grades Initial CAPEX Operating Cost
14Zinc Resource Base Case (Nov. 2018 @ $55 NSR cut-off)
o ~68,000 metres drilled in Zinc Zone from 2012 to 2018
o 1.8 billion pounds of zinc in Indicated category (24% of total)
o 5.6 billion pounds of zinc in Inferred category (76% of total)
o Highest grades at South and West Ayawilca Notes:
• CIM definitions were followed for Mineral Resources.
Tonnage ZnEq Zn Pb In Ag Zn Pb In Ag • Mineral Resources are reported above a cut-off NSR value
Category/Area (Mt) (%) (%) (%) (g/t) (g/t) (Mlb) (Mlb) (t) (Moz) of US$55 per tonne.
• The NSR value was based on estimated metallurgical
recoveries, assumed metal prices and smelter terms, which
Indicated include payable factors, treatment charges, penalties, and
refining charges. Metal price assumptions were: US$1.15/lb
South 3.9 9.1 7.6 0.09 108 16 652 8 422 2.0 Zn, US$300/kg In, US$15/oz Ag, and US$1.00/lb Pb. Metal
recovery assumptions were: 90% Zn, 75% In, 60% Ag, and
75% Pb. The NSR value for each block was calculated
West 7.8 7.7 6.5 0.20 72 15 1,126 35 561 3.9 using the following NSR factors: US$15.34 per % Zn,
US$4.70 per % Pb, US$0.18 per gram In, and US$0.22 per
Total Indicated 11.7 8.1 6.9 0.16 84 15 1,778 42 983 5.8 gram Ag.
• The NSR value was calculated using the following formula:
NSR = [Zn(%)*US$15.34+Pb(%)*US$4.70+
Inferred In(g/t)*US$0.18+Ag(g/t)*US$0.22]
• The ZnEq value was calculated using the following formula:
South 10.2 9.6 7.9 0.27 103 30 1,764 61 1,047 9.9 ZnEq = NSR/US$15.34
• Numbers may not add due to rounding.
• “Inferred Mineral Resources” have a great amount of
West 5.0 7.1 6.4 0.27 34 17 699 30 170 2.8 uncertainty as to their existence, and as to their economic
and legal feasibility. It is reasonably expected that the
East 11.3 5.9 5.0 0.18 56 14 1,238 44 633 5.0 majority of Inferred Mineral Resources could be upgraded to
Indicated Mineral Resources with continued exploration.
United States investors are cautioned not to assume that all
Central 18.6 5.6 4.6 0.23 62 12 1,884 95 1,153 7.5 or any part of Measured or Indicated Mineral Resources will
ever be converted into Mineral Reserves. United States
investors are also cautioned not to assume that all or any
Total Inferred 45.0 6.7 5.6 0.23 67 17 5,585 230 3,003 25.2 part of an Inferred Mineral Resource exists, or is
15
economically or legally mineable.Ayawilca Step-Out Drill Targets
Valley:
Fault intersection and
anticline similar to South
Ayawilca. Repeated
Pucara host to the west
is untested
Zone 3:
Large gravity and
magnetic anomalies in
thickened Pucara
limestone
Far South:
Silver Zone:
Fault intersection and
Extension of 2019
anticline similar to
silver discovery
South Ayawilca
16Ayawilca Gravity Anomaly – Step-Out Targets
Valley:
Fault intersection and Zone 3:
anticline similar to South Large gravity and
Ayawilca. Repeated Pucara magnetic anomalies in
host to the west is untested thickened Pucara
limestone
Far South:
Fault intersection and
Silver Zone: anticline similar to
Extension of 2019 silver South Ayawilca
discovery
17Colquipucro Silver Oxide Mineral Resources
o Ayawilca property also hosts a silver oxide resource
o No economic studies completed to date, but could be a standalone operation at higher silver
prices or an adjunct operation to a zinc mine
Tonnage Ag Ag
Class/Zone
(Mt) (g/t) (Moz)
Indicated
High Grade Lenses 2.9 112 10.4
Low Grade Halo 4.5 27 3.9
Total Indicated 7.4 60 14.3
Inferred
High Grade Lenses 2.2 105 7.5
Low Grade Halo 6.2 28 5.7
Total Inferred 8.5 48 13.2
8,003 metres drilled in 45 holes (2006-2014)
Notes: : Resources estimated by Roscoe Postle Associates Inc. (RPA)
of Toronto, Canada (news release of November 26, 2018). Mineral
Resources are reported within a preliminary pit shell and above a
cut-off grade of 60 g/t Ag for High Grade Lenses, and 15 g/t Ag for
Low Grade Halo. The cut-off grade is based on a price of US$24/oz
Ag. Refer to NI 43-101 report dated June 29, 2016 for details of
resource estimates and assumptions. 18Next Steps: Exploration & Optimization
2020:
2
• Exploring other targets on Tinka mining concessions (170 km ) - extensive soil sampling /
prospecting underway
• Step-out and infill drilling from early 2020: 10,000 to 15,000 metres of drilling planned
• Review of PEA assumptions
• Permitting for an expanded exploration area
2023-24?
PEA optimization 2022?
& targeted 2021?
exploration
drilling
2015-2019...
Feasibility Study &
Resource Prefeasibility Production
Definition Permitting
Study &
Engineering
2020
19Community Relations & Environment
o Ongoing long-term partnerships with three nearby communities
o Social engagement and sustainable development programs in place
o Employment during drill programs (road and drill pad construction) and at camp
o IFC (World bank) providing support and guidance
20Tinka: Outstanding History of Exploration Success
o Scarcity Value - Ayawilca Zinc Zone has the size & grade in a proven mining belt
o Full Ownership - 100% ownership of a PEA stage project with after-tax NPV8% of US$363M
o Low Valuation - Tinka EV of ~US$35 million is less than 10% of project NPV
o High Grades - Thick & high-grade core at South and West Zones, early pay-back potential
o Program for 2020 – Continued resource expansion drilling and testing of new targets
o Well Financed - ~C$23 million in cash, no debt
o Strategic Partner - Buenaventura, Peru’s largest mining company, owns 19% equity stake
o Upside Exploration Potential - 170 km2 land position, tin and silver resources also
o Good Access - strong community relationships & infrastructure (roads, water, power)
21APPENDIX
Zinc Inventories – Declining for Seven Years
o Zinc prices have declined 33% from 2018 highs due to the trade war between the US and China,
and concerns that the zinc market will go into surplus
o While zinc demand has been impacted by the trade war, the surplus has not eventuated
o A rebound in China zinc demand or restocking could send zinc prices substantially higher
Start of Zinc inventories
China-US continue to
trade war decline despite
China slowdown
23Zinc Market Analysis
o Large predicted increases in zinc mine production have
failed to materialize (e.g., Teck predicted an 800kt increase
in mine supply in 2018 – actual growth was 200kt)
o Zinc mine production in China has lagged expectations due
to declining ore grades and stricter environmental
regulations & inspections
o Lower zinc prices are causing mines with low profit margins
to close, with at least four mines closed in 2019
Zinc prices will need to increase or
zinc markets will face a supply crunch
24Ayawilca PEA – A Top 5 Peru Zinc Mine
Mining and Resources Operating Cost Cost per Tonne
Description Processed
o Underground mine with 5,000 tonne per day flotation plant
Mining – Room & Pillar US$38.06
o 38.2 Mt of Resources mined over 21 years
Mining – Post & Pillar US$35.29
o US$65/t NSR cut-off (base case for resource was US$55/t cut-off)
Average Mining Cost US36.66
Saleable Products Processing US$6.44
o Two concentrates G&A US$5.48
• Zinc concentrate (50% Zn grade) at 92% recovery Total Opex US$48.58
• Silver-lead concentrate (50% Pb, 88-191 oz/t Ag) at 85% recovery
Annual Metal Production in Concentrates
160,000 2,000
Annual Zinc and Lead Production (tonnes)
o Average LOM head grades of 6.1% Zn, 18 g/t Ag, 0.2% Pb Zn recovered to Zn concentrate (left)
Annual Silver Production (koz)
140,000 1,750
Pb recovered to Pb-Ag concentrate (left)
120,000 1,500
Ag recovered to Pb-Ag concentrate (right)
100,000 1,250
80,000 1,000
60,000 750
40,000 500
20,000 250
0 -
2023
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2044
252019 Ayawilca PEA Highlights (in US dollars)
Robust Economics : $200 $2,000
o 5,000t/day underground zinc mine with
21 year mine life, room & pillar + post- $150 $1,500
pillar mining
Cumulative Cash Flows (US$ millions)
Annual Cash Flows (US$ millions)
$100 $1,000
o Modest initial capex of $262M
$50 $500
o Pre-tax NPV8% = $609M with 37.2% IRR
$0 $0
o After-tax NPV8% = $363M with 27.1% IRR
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
2042
2043
2044
o Payback period of 2.3 years pre-tax and -$50 -$500
3.5 years after-tax -$100
After-tax cash flow
-$1,000
Pre-tax cash flow
o Average annual production of 101 kt zinc
-$150 Cumulative after-tax cash flow -$1,500
and 0.9 Moz silver Cumulative pre-tax cash flow
o Total cash flows of $1,611M pre-tax and -$200 -$2,000
$1,051M after-tax
PEA metal prices: $1.20/lb Zn, $0.95/lb Pb, and $18/oz Ag
Jan. 167, 2020 spot: $1.10/lb Zn, $0.90/lb Pb, and $18/oz Ag
26Ayawilca Zinc Zone Cut-off Sensitivity
o Base case resources calculated at US$55/tonne cut-off)
o PEA was prepared using US$65/t cut-off to focus on higher grade resources
o Geotechnical studies to be conducted to determine if bulk underground mining methods could be
used, which would allow a higher throughput operation extracting more of the resources
Zinc Zone Indicated Mineral Resources Zinc Zone Inferred Mineral Resources
NSR US$/t Tonnage ZnEq Zn Pb Ag In NSR US$/t Tonnage ZnEq Zn Pb Ag In
Cut-off (Mt) (%) (%) (%) (g/t) (g/t) Cut-off (Mt) (%) (%) (%) (g/t) (g/t)
40 13.6 7.4 6.3 0.16 15 75 40 52.7 6.2 5.2 0.24 17 60
50 12.4 7.9 6.7 0.17 15 80 50 48.1 6.5 5.4 0.24 17 64
55 11.7 8.1 6.9 0.16 15 84 55 45.0 6.7 5.6 0.23 17 67
(Base Case) (Base Case)
60 10.8 8.5 7.2 0.16 16 89 60 41.5 7.0 5.8 0.23 18 70
70 9.4 9.2 7.7 0.15 16 99 70 33.9 7.6 6.4 0.22 18 78
80 7.9 10.0 8.4 0.15 17 111 80 26.9 8.3 6.9 0.22 20 86
See resource table for notes and ZnEq calculations 27Tinka Resources Limited
CORPORATE OFFICE
Suite 1305 - 1090 West Georgia St
Vancouver, BC V6E 3V7
CANADA
Ph: +1 604 699-0202
Fax: +1 604 683-1585
FOR MORE INFORMATION
Dr. Graham Carman, President & CEO
info@tinkaresources.com
Rob Bruggeman, Investor Relations
rbruggeman@tinkaresources.com
+1 416 884-3556
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