TSX.V : SIR April 2017 Preliminary Economic Assessment Corporate Presentation
Forward Looking Statement THIS MANAGEMENT PRESENTATION (THE "PRESENTATION") WAS PREPARED AS A SUMMARY OVERVIEW ONLY OF THE CURRENT AFFAIRS OF SERENGETI RESOURCES INC. (”SERENGETI" OR THE "COMPANY") AND WAS NOT PREPARED FOR THE PURPOSE OF ASSISTING PROSPECTIVE INVESTORS IN MAKING A DECISION TO INVEST IN SERENGETI. SERENGETI DOES NOT MAKE ANY REPRESENTATION AS TO THE COMPLETENESS, TRUTH OR ACCURACY OF THE INFORMATION CONTAINED IN THIS PRESENTATION. THE RECIPIENT IS CAUTIONED, THEREFORE, THAT IT IS INAPPROPRIATE TO USE THIS PRESENTATION, OR ANY PORTION THEREOF, TO ASSIST IN MAKING A DECISION TO INVEST IN SERENGETI. CONFIDENTIALITY This Presentation is confidential and the contents are not to be reproduced or distributed to the public or the press. Securities legislation in all provinces and territories prohibits such unauthorized distribution of information. Each recipient of the information contained in this Presentation will treat such information in a confidential manner and will not, directly or indirectly, disclose or permit its affiliates or representatives to disclose such information to any other person or reproduce this Presentation in whole or in part, without the prior written consent of Serengeti. PRELIMINARY ECONOMIC ASSESSMENT (“PEA”) The information in this presentation related to the Kwanika Copper/Gold Project was derived from the PEA. Statements in this PEA presentation pertaining to projected revenues and cash flows, quantity and grade of mineralized materials, estimated mineral prices are forward-looking statements. The Company cautions that this PEA is preliminary in nature, and is based on technical and economic assumptions which will be evaluated in further studies. The PEA is based on the current (as at January 2017) Kwanika estimated resource model, which consists of material in both the indicated and inferred classifications. Inferred mineral resources are considered too speculative geologically to have technical and economic considerations applied to them. The current basis of project information is not sufficient to convert the mineral resources to mineral reserves, and mineral resources that are not mineral reserves do not have demonstrated economic viability. Accordingly, there can be no certainty that the results estimated in the PEA will be realized. FORWARD-LOOKING INFORMATION This presentation contains “forward - looking statements” within the meaning of applicable Canadian securities regulations. All statements other than statements of historical fact herein, including, without limitation, statements regarding exploration plans and other future plans and objectives, are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and future events and actual results could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from our expectations as well as a comprehensive list of risk factors are disclosed in the Company’s documents filed from time to time via SEDAR (www.sedar.com)with the Canadian regulatory agencies to whose policies we are bound. Forward-looking statements are based on the estimates and opinions of management on the date the statements are made, and we do not undertake any obligation to update forward-looking statements should conditions or our estimates change, other than as required by law and readers are further advised not to place undue reliance on forward-looking statements. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The Company does not undertake to update any forward-looking statements that are contained herein, except in accordance with applicable securities laws. Quality Assurance/Quality Control The technical information in this presentation has been prepared in accordance with Canadian regulatory requirements as set out in National Instrument 43-101, and reviewed by the Company's qualified person, David W. Moore, P. Geo., President and CEO of Serengeti Resources Inc. www.serengetiresources.com | TSX.V: SIR 2
PEA Summary Economics C$324.4 M 21.1% 3.7 Years NPV 7% Pre-tax IRR Pre-Tax Pre-tax Payback Pre-tax Base Case Pricing Spot Pricing Base Case Pricing +10% NPV 7% C$282.0 million C$519.1 million C$ 324.4 million IRR 21.1% 19.6% 27.8% Payback 3.7 years 3.9 years 3.0 years After-tax Base Case Pricing Spot Pricing Base Case Pricing +10% NPV 7% C$ 191.2 million C$162.7 million C$321.4 million IRR 16.6% 15.3% 22.1% Payback 4.0 years 4.2 years 3.3 years The Preliminary Economic Assessment base case was calculated using US$2.90 /lb. Cu, US$1270/oz Au, US$ 19 /oz Ag. Spot pricing calculated using US$2.71 /lb. Cu, US$1258/oz Au, US$ 18.41 /oz Ag. Base case +10% calculated using US$3.19 /lb. Cu, US$1397/oz Au, US$ 20.90 /oz Ag. Exchange rate US$/CDN$ 0.77 for the Base Case, 0.75 for Spot Pricing and 0.77 for Base Case +10%. DISCLAIMER:* Results from PEA announced April 2017. Refer to Disclaimer on Slide 2. www.serengetiresources.com | TSX.V: SIR 3
PEA Summary Production Category Units First 8 Years LOM Tonnes Milled Kt 43,201 78,855 Cu % 0.466 0.381 Average Grade Au g/t 0.539 0.357 Ag g/t 1.39 1.40 Cu K lbs 403,462 600,635 Metal Production Au K oz 561,200 676,635 Ag K oz 1,449 2,659 Throughput tpd 15,000 Mine Life Yrs 15 Net Cost of Production US$ $0.70 $1.20 (C1)* per lb Cu * Net Direct Cash Cost (C1) is an industry standard measure that represents the cash cost incurred at each processing stage, from mining through to recoverable metal delivered to market, less net by-product credits. Direct Cash Costs cover: Mining, ore freight and milling costs; Mine-site administration and general expenses; Concentrate freight, smelting and smelter general and administrative costs; Marketing costs (freight and selling). Gold, Silver credits contribute 64.3% to revenue in the first eight years or 53.0% LOM at the Kwanika project. DISCLAIMER:* Results from PEA announced April 2017. Refer to Disclaimer on Slide 2. www.serengetiresources.com | TSX.V: SIR 4
PEA Economics – Base Case Parameter Unit Base Case Capital Cost CDN$ M $476 Sustaining Capital LOM CDN$ M $36.6 Avg. Op Cost/tonne CDN$ $21.15 Pre-Tax Net Revenue CDN$ M $710.10 Pre-Tax NPV 7% CDN$ M $324.4 Pre-Tax IRR & Payback 21.1% & 3.7 yrs Post-Tax Net Revenue CDN$ M $475.1 Post-Tax IRR & Payback 16.6% & 4.0 yrs Metal Price Cu US$/lb $2.90 Au US$/oz $1.270 Ag US$/oz $19.00 Exchange Rate US$/CDN 0.77 DISCLAIMER:* Results from PEA announced April 2017. Refer to Disclaimer on Slide 2. www.serengetiresources.com | TSX.V: SIR 5
Copper Price Break-out 5 YEAR COPPER SPOT USD/lb Source: stockchart.com www.serengetiresources.com | TSX.V: SIR 6
PEA Production Summary 16000 0.7 14000 0.6 12000 0.5 10000 Cu% and Au g/tonne 0.4 Ktonnes 8000 0.3 6000 0.2 4000 0.1 2000 0 0 -1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Year Au g/t Total Undergound Mill Feed Total Open Pit Mill Feed OP WASTE Mined Combined Cu % Au DISCLAIMER:* Results from PEA announced April 2017. Refer to Disclaimer on Slide 2. www.serengetiresources.com | TSX.V: SIR 7
Kwanika Mineral Resource Quantity Cut -off GRADE CONTAINED METAL (x1000 Cu Eq Category Tonnes) (%) Cu Au Ag Cu Au Ag (%) (g/t) (g/t) (000's lb) (000's oz) (000's oz) Central Zone Pit Constrained Indicated 101,500 0.13 0.31 0.32 0.96 697,200 1,040 3,120 Inferred 31,900 0.13 0.17 0.14 0.59 118,500 140 610 Underground Indicated 29,700 0.27 0.34 0.36 1.05 222,300 350 1,010 Inferred 7,900 0.27 0.23 0.17 0.68 39,800 40 170 South Zone Inferred 33,300 0.13 0.26 0.08 1.64 191,400 80 1,760 * Pit constrained mineral resources are reported in relation to a conceptual Whittle pit shell and underground resources are reported within the area for potential underground development. Mineral resources are not mineral reserves and do not have demonstrated economic viability. All figures are rounded to reflect the relative accuracy of the estimate. All composites have been capped where appropriate. ** Pit constrained mineral resources are reported at a copper equivalent cut-off of 0.13% and underground resources are reported at 0.27%. The cut-offs are based on prices of US$3.00 per pound of copper, US$1,300 per ounce of gold, US$20 per ounce of silver, US$9.00 per lb of molybdenum and assumed recoveries of 89% for copper, 70% for gold, 75% for silver, and 60% for molybdenum. DISCLAIMER:* Results from PEA announced April 2017. Refer to Disclaimer on Slide 2. www.serengetiresources.com | TSX.V: SIR 8
Kwanika Site Layout Advantages Small foot print ◆ Surplus process water held ◆ in separate storage & treatment facility TSF buttressed with all ◆ open pit waste rock to increase safety factor 500 m DISCLAIMER:* Results from PEA announced April 2017. Refer to Disclaimer on Slide 2. www.serengetiresources.com | TSX.V: SIR 9
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