AGUA ECOLÓGICA QUILLAGÜA A Major, Strategic Water Discovery in Northern Chile December 2019 1
SAFE HARBOUR Gold Dragon Resources (GDR), Compañía Minera Gold Dragon Resources Chile SpA (CMGDRC), SpA., and Potash Dragon SpA (PDSPA) CAUTIONARY STATEMENTS ON FORWARD LOOKING INFORMATION Certain statements contained in this presentation (“Presentation”) constitute forward‐looking information within the meaning of securities laws. All statements included in this Presentation (other than statements of historical facts) which address activities, events or developments that management anticipates will or may occur in the future are forward‐looking statements, including, without limitation, any statements regarding estimated valuations of assets and the estimated flow rate of any aquifers. Forward‐looking statements are often, but not always, identified by the use of words such as ‘‘seek’’, ‘‘anticipate’’, ‘‘contemplate’’, ‘‘target’’, ‘‘believe’’, ‘‘plan’’, ‘‘estimate’’, ‘‘expect’’, and ‘‘intend’’ and statements that an event or result ‘‘may’’, ‘‘will’’, ‘‘can’’, ‘‘should’’, ‘‘could’’ or ‘‘might’’ occur or be achieved and other similar expressions. These statements are based upon certain reasonable factors, assumptions and analyses made by management in light of its experience and perception of historical trends, current conditions and expected future developments, as well as other factors management believes are appropriate in the circumstances. However, whether actual results and developments will conform with management’s expectations is subject to a number of risks and uncertainties, including factors underlying management’s assumptions, such as, risks relating to the requirement for significant additional funds for development that may not be available; changes in national and local government legislation, including permitting and licensing regimes and taxation policies and the enforcement thereof; regulatory, political or economic developments in Chile or elsewhere; litigation; title, permit or license disputes related to interests on any of the properties in which the Company holds an interest; excessive cost escalation as well as application, development, permitting, infrastructure, operating or technical difficulties on any of the Company’s properties; risks and hazards associated with the business of development and mining on any of the Company’s properties; terrorism, civil unrest or an outbreak of contagious disease; mining industry operational hazards and environment concerns; uncertainty of estimates of mineral resources and mineral reserves; an impairment or write‐down of the Company’s mineral properties or assets forcing the Company to discontinue exploration and lose its interest in, or be forced to sell some of its properties. While the Company considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect. These factors may cause the actual results of the Company to differ materially from those discussed in the forward‐looking statements, and there can be no assurance that the actual results or developments anticipated by management will be realized or, even if substantially realized, that they will have the expected results on the Company. Undue importance should not be placed on forward‐looking information nor should reliance be placed upon this information as of any other date. This Presentation does not purport to contain all information that a prospective investor may require and is subject to updates, revision and amendment. In furnishing this Presentation, the Company does not undertake or agree to any obligation to provide attendees with access to any additional information or to update this Presentation or to correct any inaccuracies in, or omissions from, this Presentation which may become apparent. The information and opinions contained in this Presentation are provided as at the date of this Presentation and are subject to change without notice. No representation or warranty, express or implied, is given by or on behalf of Gold Dragon Resources (GDR), Potash Dragon SpA (PD SPA) , and Compañía Minera Gold Dragon Resources Chile SpA (CMGDRC), their shareholders, directors, officers or employees nor any other person as to the accuracy or completeness of the information or opinions contained in the Presentation. This Presentation is not, and under no circumstances is to be construed as, a prospectus, an advertisement or a public offering of securities, in the United States, Canada, or any other jurisdiction. No securities commission or similar authority of the United States, Canada, or any other jurisdiction has reviewed or in any way passed upon this document, and any representation to the contrary is an offence. The securities of the Company have not been and will not be registered under the United States Securities Act of 1933, as amended (“Securities Act”) or state securities laws and may not be offered or sold in the United States or to or for the account or benefit of U.S. persons (as such terms are defined in Regulation S under the Securities Act) except pursuant to certain exemptions. This presentation should not be redistributed by recipients to persons with addresses in the United States. Any such distribution could result in violations of US law. The distribution of this Presentation in certain jurisdictions may be restricted by law and therefore persons into whose possession this presentation comes should inform themselves about and observe any such restrictions. Any such distribution could result in a violation of the law of such jurisdiction. Furthermore, this Presentation is not intended for distribution to, or use by any person or entity in any jurisdiction or country where such distribution or use would be contrary to local law or regulation. This Presentation and its contents are confidential and are being supplied for informational purposes and may not be reproduced, further distributed to any other person or published, in whole or in part, for any purpose. By receiving a copy of this Presentation, you agree to be bound by the foregoing provisions. 2
AGUA ECOLÓGICA QUILLAGÜA Introduction Water is life. Everywhere, and especially in the deserts of Northern Chile where stakeholders compete fiercely for the limited available water • The Quillagüa Artesian Aquifer (QAA), a vast, previously unknown, sustainable artesian reservoir deep under the Atacama desert and was accidentally discovered while exploring for lithium and potash rich brines • GDR has control over this sustainable reservoir and its successful development can be transformative for the region, which suffers severe water shortages and growing demands and pressures from communities, and the nearby mining community, not to mention water needed by nature and natural ecosystems. • GDR will incorporate a BC company Agua Ecológica Quillagüa British Columbia, (“AEQ”); AEQ is raising $10 million in equity to complete a feasibility study, permit two additional production wells and install a distribution system requiring US$17 million in debt to reach full commercialization of a 300 L/s raw process water supply system • To eliminate the risk of impacting any other water resources, the project pumps will be set at 100 meters below surface within 500 meter deep concrete sealed steel casings, which will safely extract the water only from the deep reservoir between 500 and 750 meters below surface 3
AGUA ECOLÓGICA QUILLAGÜA Current Situation Compared to prior Geological times this area of Chile is going through a very dry period. Precipitation is predominantly in the form of mist, locally called the Camanchaca, the rainfall is limited to precipitation in the higher elevations to the east. And the only consistent water flow is from the Rio Loa that has its source high in the Andes. Quillagua has historically been a flood plain type oasis town watering crops via irrigation channels fed by the Rio Loa. Recently this is no longer possible due to:‐ • Initially the nitrate mines and more recently the gigantic copper mines have have reduced the water volume upstream to process the ore and support the population. • All economic drivers in the area are constrained by the lack of water. • The natural arsenic pollution and other toxic element concentration in the river water is aggravated by the reduced fresh water volume flow removed upstream. That combined with industrial pollution has made the water unfit for agriculture • The nitrate miners to the N have purchased most of the water rights and land held by the farmers Now the Rio Loa is a small, contaminated stream at Quillagua in an attempt to re‐water the Salar barely making it to the sea and Quillagua is a village that has lost its main source of wealth . de Llamara surface aquifer at the Crystal Springs. 4
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