TSXV & BVL:TK | OTCPK: TKRFF www.tinkaresources.com Corporate Presentation – August 2019
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. Certain information in this presentation contains forward-looking statements and forward-looking 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, drilling program results varying from expectations, delays in obtaining survey results, success of future development initiatives, the completion and implementation of a preliminary economic assessment, pre-feasibility or feasibility studies, competition, operating performance, environmental and safety risks, delays in obtaining or failure to obtain necessary permits and 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. Although Tinka believes that assumptions inherent in the forward-looking statements are reasonable, 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 company presentation have been estimated by Mrs. Dorota El Rassi, P.Eng., and Mr. David Ross, P.Geo., both employees of Roscoe Postle Associates Inc. (RPA) and independent of Tinka. The Mineral Resources were publicly released on November 26, 2018. By virtue of their education and relevant experience, Mrs. El Rassi and Mr. David Ross are "Qualified Persons" for the purpose of National Instrument 43-101. The Mineral Resources have been classified in accordance with CIM Definition Standards for Mineral Resources and Mineral Reserves (May, 2014). Readers are encouraged to read the Company’s technical report in their entirety. The preliminary economic assessment (PEA) is preliminary in nature and includes inferred mineral resources that are considered too speculative geologically to have economic considerations applied to them that would enable them to be categorized as mineral reserves. Mineral resources are not mineral reserves and do not have demonstrated economic viability. This presentation has been prepared, reviewed and verified by Dr. Graham Carman, Tinka’s President and CEO and a Fellow of the Australasian Institute of 2 Mining and Metallurgy, a qualified person as defined by NI 43-101.
Focusing on advancing the Ayawilca project AYAWILCA ZINC ZONE - Preliminary Economic Assessment - July 2019 Peru o Underground mine for zinc (silver, lead) with throughput of 5,000 t/day o Modest initial Capex US$262M, Payback period of 3.5 years after-tax (2.3 years pre-tax) o After-tax NPV 8% of US$363M with IRR of 27.1% (Pre-tax NPV 8% of $609M with 37.2% Ayawilca IRR) using $1.20/lb Zn, $0.95/lb Pb, $18/lb Ag, and $65/t NSR cut-off o Average production of 200,000 t zinc con / year (PERU TOP 5) and 0.9 Moz silver / year o Strongly leveraged to zinc grade and price o Attractive project in good jurisdiction with infrastructure in place (power, water, road) Next Steps o Focus is back on exploration: opportunities for higher zinc grades at South area o Other drill targets also at depth (incl. limestone repetitions), plus other areas o Pursue opportunities identified in PEA to further enhance project value 3
Market Capitalization & Investors Major Shareholders TSXV & BVL: TK | OTCPK: TKRFF Institutional: Shares Issued: 264.6 M Sentient Equity Partners 24% IFC (World Bank) 11% Options (priced at $0.325 to $0.50) 11.4 M JPMorgan UK 7% Warrants (priced at $0.45) 12.4 M Other institutions ~10% Fully diluted: 288.9 M Total institutional 52% Management & insiders 2% Market cap @ C$0.20/share: C$53 m Retail/other 46% EV @ C$0.20/share: C$44 m Analyst Coverage Cash (Aug. 2019): ~C$9 m Ian Parkinson Kevin MacKenzie George Topping 4
Share price has retraced to 2016 levels o Market responded positively to drill results and new discoveries 2017 Resource Update in 2017, zinc prices were rising C$16M financing at $0.48 o Zinc prices declined in 2018 - TK share price suffered along with Drills 10m of 44% Zn at other zinc juniors despite strong West Ayawilca drill results 2018 Resource South Ayawilca Update o Post-PEA there has been a discovery misconception that exploration 2019 PEA C$11M is done (not the case) financing at $0.20 o Price to net asset value (P/NAV) based on PEA for TK is 0.24 - one Zinc steady of lowest valuations of any zinc developers (source: GMP Securities) 5
TK - a compelling valuation in junior Zn space 6 1 ZnEq includes all metals. Source: GMP Securities
Zinc market – the upcoming supply gap o China is the dominant miner and user of zinc, and Chinese zinc mines are struggling o Zinc grades in Chinese mines are declining (av. 3.5% Zn); only one major Chinese project in pipeline o Upcoming zinc supply gap predicted - 1.7 Mt by 2024 ( ~ 10% world supply) at base demand (Teck) o Fundamentals for zinc are actually strong – low inventories, few new zinc projects in pipeline o Ayawilca can be one of the new long-life projects to fill this upcoming supply gap kt Zn US$/t kt Zn 7
Ayawilca Project – PEA / Exploration Programs • PEA – further project details and opportunities for enhancement (slides 9-11) • Exploration program and next steps (slides 12-17) • Appendices (slides 18-23) 8
Management & Board Management – Extensive Peru and Zinc Experience Dr Graham Carman President & CEO, Director Geologist, 2 5 years global exploration experience with Rio Tinto, Savage, Pasminco, juniors. 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, with 25 years experience in mining, oil & gas, and Ben McKeown private equity. Sentient Group representative. Professional engineer with over 20 years’ experience as a mining Pieter Britz professional and as a mining investment professional. Mary Little Founder of Mirasol Resources, geologist, MBA, 20 years in Latin America. 9
Ayawilca PEA – A Top 5 Peru zinc mine Mining and Resources Operating Cost Cost per Tonne Description Processed o UG mine at throughput of 5000 t/d Mining – Room & Pillar US$38.06 o 38.2 Mt of Resources (72% Indicated, 66% Inferred) mined over 21 yrs 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 o Zinc concentrate (50% Zn grade) at 92% recovery Total Opex US$48.58 o 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 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 10
2019 PEA - Leveraged to zinc grade & price o ~ 90% of value in the PEA is zinc, ~10% of value is silver with minor lead o PEA is most sensitive to zinc grade (and zinc price) o Increasing feed grade by 20% LOM adds over US$200M to after-tax NPV in PEA o Effects of Opex, Capex, silver price, are much less significant 11
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