Kerr Mines | TSX: KER I April 2017 INVESTOR PRESENTATION
FORWARD-LOOKING STATEMENTS This presentation contains forward-looking information, including statements regarding: the proposed timing, schedule, and costs for restarting production at the Copperstone Mine, rate of production, expected cash costs, expected increase in milling capacity, exploration potential at the Copperstone Mine, proposed debt restructuring and financing, share capitalization and director ownership,. These forward-looking statements entail various risks and uncertainties that could cause actual results to differ materially from those reflected in these forward-looking statements. Such statements are based on current expectations, are subject to a number of uncertainties and risks, and actual results may differ materially from those contained in such statements. These uncertainties and risks include, but are not limited to, the strength of the economy; the price of gold; operational, funding, and liquidity risks; the degree to which mineral resource and mineral reserve estimates are reflective of actual mineral resources and mineral reserves; and the degree to which factors which would make a mineral deposit commercially viable are present; assumptions with respect to the cost and availability of labour for the restart of operations are correct,; results of exploration and validity of geological models; the risks and hazards associated with underground operations, and any specific risks or assumptions set out or referenced in this presentation. Risks and uncertainties about Kerr Mines Inc. and its business are more fully discussed in its disclosure materials, including the annual information form, technical reports, financial statements and MD&As, filed with the securities regulatory authorities in Canada and available at www.sedar.com and readers are urged to read these materials. Kerr Mines Inc. assumes no obligation to update any forward-looking statements or to update the reasons why actual results could differ from such statements unless required by law. This presentation includes certain non-IFRS measures, including cash costs on a per gold ounce basis. Cash costs per gold ounce are defined as costs of production (including refining costs) divided by the total number of gold equivalent ounces produced. The Company reports total cash costs on a production basis. In the gold mining industry, these are common performance measures but do not have any standardized meaning, and are non-GAAP measures. As such, they are unlikely to be comparable to similar measures presented by other issuers. In reporting cash costs per gold ounce, the Company follows the recommendations of the Gold Institute standard. The Company believes that, in addition to conventional measures, prepared in accordance with IFRS, certain investors use this information to evaluate the Company’s performance and ability to generate cash flow. Accordingly, it is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. Technical information in this presentation has been reviewed and approved by Dale Ginn P. Geo., who is a qualified person that is independent of the Company, as defined in National Instrument 43-101. 2
KERR INVESTMENT HIGHLIGHTS • Past producer, fully permitted • Advanced-stage development Company • Existing resource with significant exploration upside • Safe, mine-friendly jurisdiction • Strengthened Board and Management team • Restructured debt into friendly hands • Supportive shareholder group • On track to complete Pre Feasibility Study in Q4 2017 Advancing strategy to unlock shareholder value 3
KERR’S TWO-PRONGED STRATEGY Strengthen economics leading to a Define and expand current resources production decision Unlocking shareholder value: Focused on maximizing Copperstone’s potential 4
UPSIDE POTENTIAL Large under- New targets Existing resource Targets in close explored land identified near proximity to open on strike package surface existing resource and down dip Multiple opportunities for value creation 5
TACTICAL IMPLEMENTATION Underground Opportunity • Open on strike down dip • Open undefined gap zones • 5-10k meter program • Improve economics of production restart Surface Exploration Opportunity • 3 key strategic targets • South zone • Lower parallel plate • Southwest target SOUTH TARGET Significant upside potential 6
UNDERGROUND OPPORTUNITY ~4,100ft ~1,500ft A D B C • Plan to develop access to A,B, C zones • New zones provide flexibility and mine optimization • Numerous working faces • Supports strengthened economics 7
SURFACE EXPLORATION - SOUTH ZONE HIGH GRADE • Previous successful drilling • Intercepts of ¼ - 1 oz over 2- 4 meters • 10k meter drill programme SOUTH • Detachment fault region TARGET Inferred Resource*: 132,000 ounces Bringing Copperstone at 12g/t grade to full potential * Source: ‘NI 43-101 Technical Feasibility Report Copperstone Project, La Paz County, Arizona’ dated 01/10/11, independently prepared by Dr. C. Anderson, T. Buchholz, C. Pratt, J. Brown, in accordance with the guidelines of Canadian National Instrument 43-101 – Standards of Disclosure for Mineral Projects 8
SURFACE EXPLORATION – LOWER PARALLEL PLATE Parallel fault system 9
SURFACE EXPLORATION – SOUTHWEST TARGET SW Target 10
2017 COPPERSTONE PROJECT PLANS Exploration and De-watering & resource Mine plan Resource and Prepare PFS mine re- definition optimization model updates habilitation programs Value creation catalysts leading to production decision 11
COPPERSTONE’S HIGHLIGHTS Past-producing 11,800ac land Upside Fully-permitted high grade package exploration with extensive gold project potential infrastructure Historically produced ~500,000 ounces of gold 12
EXISTING INFRASTRUCTURE • Underground mine development in place, access and utilities • Processing facility and 450 tpd mill • Tailings storage facility with capacity for planned re-start • Power and water distribution systems • Surface buildings including assay lab • Roads and access to surface exploration sites Accelerates production re-start timeline and reduces CAPEX 13
HISTORIC GOLD PRODUCING REGION Arizona Ranked 7 th best jurisdiction globally for mining investments 14
HISTORICAL REVIEW & RECENT PROGRESS • Acquired project in 2014 • Care & Maintenance period • Restructured balance sheet • Settled with creditors • Injected working capital • Divested non-core assets • Dewatered & rehabilitated underground workings • Prepared preliminary resource model • Drill programs being defined • Appointed new Board members • Appointed CEO & President Dedicated, Prudent, Methodical THE NEW KERR 15
MANAGEMENT & BOARD OF DIRECTORS Saudi-based businessman with global Fahad Al CPA, 25 years private business owner. Claudio Ciavarella investments in mining and real estate Tamimi, President of Forte Fixtures & Millwork. CFO CEO & Director of The Aqua Tech Group Chairman Peter Damouni, Investment banking. Led financings Martin Kostuik 25 years diversified mining experience. valued at more than $5 billion President & Director Previously Sr. VP Operations & Development Director at Luna Gold, and President, CEO & Director of Rupert Resources Limited Investment banking with Chase Ayman Arekat, Manhattan, Merrill Lynch, Deutsche Bank Director 25 years experience in resource industry. Chris Hopkins Previously US Silver, Rio Algom, BHP CFO Legal specialization in financings, mergers James McVicar Billiton, and Suncor and acquisitions, corporate governance Director Patrick Downey +30 years of international experience in the and commercial matters. Director of Technical Advisor resource industry. Previously CEO of Elgin Monarca Minerals. Mining Inc. Greg Smith President of Oakridge Financial, Director of TriWestern Energy, Falcon Oil & Gas Director Strengthened technical and financial expertise 16
CAPITAL STRUCTURE Ticker Symbol TSX: Ker I US: KER I FSE: 7AZ1 Shares Outstanding ~190.9 million Director/Insider ownership ~47% 52 week range $0.05 - $0.23 Recent price* $0.19 Market Cap $36.3 million Cash & short term investments (12/31/16) $2.1 million Debt $9.5 million 3 year term at 8% interest, interest waived in first year Friendly debt held by Fahad Al Tamimi and Claudio Ciavarella: Major Shareholders Fahad Al Tamimi 24% Claudio Ciavarella 13% Eric Sprott 9.4% * Figures denominated in Canadian dollars 17
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