TSX:NMI OTCQX:NMKTF Q2 2016 Financial Results July 29, 2016 1
Forward Looking Statements Certain informa?on set forth in this presenta?on contains “forward-looking statements”, and “forward-looking informa?on under applicable securi?es laws. Except for statements of historical fact, certain informa?on contained herein cons?tutes forward-looking statements, which include the Company’s expecta?ons about its business and opera?ons, and are based on the Company’s current internal expecta?ons, es?mates, projec?ons, assump?ons and beliefs, which may prove to be incorrect. Some of the forward-looking statements may be iden?fied by words such as “will”, “expects”, “an?cipates”, “believes”, “projects”, “plans”, and similar expressions. These statements are not guarantees of future performance or outcomes and undue reliance should not be placed on them. Forward-looking statements are based on the opinions and es?mates of management as of the date such statements are made and they are subject to known and unknown risks, uncertain?es and other factors that may cause the actual results, level of ac?vity, performance or achievements of the Company to be materially different from those expressed or implied by such forward- looking statements or forward-looking informa?on. Although management of the Company has aTempted to iden?fy important factors that could cause actual results to differ materially from those contained in forward-looking statements or forward-looking informa?on, there may be other factors that cause results not to be as an?cipated, es?mated 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 an?cipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements and forward-looking informa?on. The Company does not undertake to update any forward-looking statements or forward- looking informa?on that are included in this presenta?on or incorporated by reference herein, except in accordance with applicable securi?es laws. All amounts are presented in United States dollars ("$") unless otherwise stated. References in this document to “C$” are to Canadian dollars and references to "A$" are to Australian dollars. Certain non-IFRS measures are included in this presenta?on, including opera?ng cash cost per ounce, all-in sustaining costs (“AISC”) per ounce, and opera?ng cash cost per tonne milled in Australian dollars. In the gold mining industry, these are common performance measures but may not be comparable to similar measures presented by other issuers. Newmarket Gold believes that these measures, in addi?on to that informa?on prepared in accordance with IFRS, provides investors with useful informa?on to evaluate the Company’s performance and ability to generate cash flow from its opera?ons. Accordingly, it is intended to provide addi?onal informa?on and should not be considered in isola?on or as a subs?tute for measures of performance prepared in accordance with IFRS. For further informa?on, refer to the “Non-IFRS Measures” sec?on of the latest quarterly MD&A. Qualified Person Mark Edwards, MAusIMM (CP), MAIG, General Manager, Explora?on, Newmarket Gold, is a "qualified person" as such term is defined in Na?onal Instrument 43-101 and has reviewed and approved the technical informa?on and data included in this presenta?on 2
Q2 2016 CEO Highlights 2016 Corporate Guidance Revision: Increased full year 2016 consolidated produc?on guidance to 225,000 – 235,000 ounces, following record quarterly produc?on from Fosterville, while lowering consolidated All-In Sustaining Costs (“AISC”) to $900 - $975 per ounce sold. Strong Cash PosiBon: with $69.9 million as at June 30, 2016, a 91% increase YTD GeneraBng Free Cash Flow: Opera?ng cash flow for Q2 2016 of $31.0 million or $0.18 per share based on basic weighted average number of shares outstanding, based on revenue of $78.0 million from 62,223 ounces sold. Free cash flow of $17.4 million based on opera?ng cash flow less capital expenditures of $13.6 million, aner inves?ng $3.6 million into growth programs in Q2 2016. Record Quarterly Mine OperaBng Income: Q2 2016 Mine Opera?ng Income of $28.1 million, up 60% from Q1 2016, the result of record quarterly consolidated gold produc?on of 61,191 ounces. Record Consolidated Quarter OperaBng Cash Cost & Low AISC: Q2 2016 Opera?ng cash costs per ounce sold of $673 and AISC per ounce sold of $937. Record Quarterly Performance at Flagship Fosterville Gold Mine : Gold produc?on of 37,245 ounces, record average mill grade of 7.50 g/t Au and record recovery of 90.8% supported by the successful commissioning of the new gravity gold circuit. Fosterville Achieves Record Low Quarter OperaBng Cost & Low AISC: Q2 2016 Opera?ng cash cost per ounce sold of $440 & AISC per ounce sold of $741. Increased Net Income: $16.8 million or $0.10 Basic EPS in Q2 2016, including the impact of $2.3 million in share based compensa?on expense ?ed to the 76% increase in the share price of the Company on the TSX Exchange in Q2 2016. 1) Opera?ng Cash Costs and All-in sustaining costs (“AISC”) refer Non-IFRS Measures on slide 23 (All figures are in United States (“US”) dollars, unless otherwise stated) 3
Q2 2016 Strong Financial Posi?on Balance Sheet (June 30 th , 2016) Cash Posi?on of $69.9 million, an increase of Cash Balance ($ million ) $69.9 $17.8 million from Q1, 2015 Working Capital (incl. cash)($ million) $56.3 Debt ($ million) $2.8 Reflec?ng Free Cash Flow of $17.4 million TSX: NMI OTCQX: NMKTF during Q2 2016 Working Capital of $56.3 million, up from $22.3 Capital Structure & Ownership (June 30 th , 2016) million at Q4 2015 Issued and Outstanding (million) 177.7 Op?ons & PSU’s (million) 13.2 Warrants 0.4 Essen?ally debt-free with only $2.8 million in Fully Diluted (million) 191.3 debt (majority is capital lease obliga?ons) Luxor Capital Group LP 19.3% Eric SproT ~15% Management/Board (basic) 7.4% (All figures are in United States (“U.S.”) dollars, unless stated otherwise) 4
Q2 Growth Opportunity – Maud Creek Maud Creek Gold Project Preliminary Economic Assessment (“PEA ”) delivered strong project economics including a Pre-tax NPV 5% of AUD$201 million (US$155 million) and IRR of 116% and a 1.25 year payback period. Base case parameters include u?liza?on of the permiTed and opera?ng Union Reef Mill and a AUD $1,550/oz gold price (US$1,200/oz) (see Newmarket Press Release dated May 18, 2016). Parameter/ Result QuanBty Pre-Tax NPV (5%) AUD$201 million (US$155 million) Pre-Tax IRR 116% Aner-Tax NPV (5%) AUD$137 million (US$105 million) Aner Tax IRR 80% Pay Back Period 1.25 years Pre-produc?on Capital Cost AUD$42 million (~US$32 million) Mine Life 9.5 years LOM Gold Grade (Diluted Au Grade) 4.2 g/t Au LOM Recovered Gold 496,000 ounces Average Annual Produc?on 52,000 ounces LOM Cash Opera?ng Cost AUD$822 per ounce (US$632 per ounce) Next Steps – Company is reviewing op?ons to move the project forward including a tender process to proceed to a full feasibility study (All figures are in United States (“U.S.”) dollars, unless stated otherwise) 5
Fosterville Mine Drilling Success NORTH SOUTH Harrier Decline 22.1 g/t Au over 3.3m Harrier 12.5 g/t Au over 2.4m First recorded visual Gold from Harrier 6.5 g/t Au over 4.2m 7.3 g/t Au 73.2 g/t Au (VG) over 7.8m over 13.9m 9.3 g/t Au over 3.3m 16.6 g/t Au Harrier Drill Drive over 3.05m 386 g/t Au (VG) over 3.4m 9.2 g/t Au 16.4 g/t Au (VG) over 16.5m Lower Phoenix 10.3 g/t Au over 3.3m over 11.8m 11.99 g/t Au over 3.4m 11.1 g/t Au over 4.9 m 6.2 g/t Au over 1.9m 14.25 g/t Au over 3.6m 12.8 g/t Au over 8.5m 8050mN 501 g/t Au over 4.5 m 112 g/t Ay over 11.9m 645 g/t Au over 3.4m Drill Targets 4.4 g/t Au over 6.1m 6,000mN 12.75 g/t Au over 4.5m Consistently intersecBng high grade gold in mulBple zones; Harrier, Lower Phoenix, Lower Phoenix South and Lower Phoenix North. Grade increasing with depth 8 Drill rigs in operaBon Mineral Resources, Reserves and MINING as at December 31, 2015 14.25 g/t Au over 3.6m (EsBmated True Width) 6
Fosterville Mine Life Expansion NORTH SOUTH Harrier Decline Harrier Phoenix BLOCK D BLOCK A Current Mining Front Harrier Drill Drive 1km step-out drilling = Visual gold elevaBon 8050mN H2/2016 drill results Lower Phoenix depth, increasing with depth BLOCK C 5,450mN 6,000mN BLOCK B Current UG Reserve 244,000 ounces at 6.95g/t Au with Measured and Indicated resources of 673,000 ounces at 8.33 g/t Au and Inferred Resources of 101,000 ounces at 9.49 g/t Au as of Dec 2015 1 With addiBonal drilling success blocks A,B, C and D are targeted to add +5 years of addiBonal reserves on top of current reserves and resources (Block B drilling underway tesBng 1000 metres down plunge from current resources/reserves) Grade increasing with depth at Harrier, converBng resources to reserves and growing resources, 8 drill rigs operaBng Mineral Resources, Reserves and MINING as at December 31, 2015 Mill Capacity +850k tpa, currently uBlizing ~700k tpa. Opportunity to open addiBonal mining fronts (three total) in Block A and Block D (1) For updated Mineral Reserves and Mineral Resources refer to press release dated March 21, 2016. For detailed gold-bearing structures comprising the Phoenix and Lower Phoenix gold systems, see appendix 7
Q2 2016 OperaBng Results 8 8
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