Meridian Mining (TSX:MNO) — Investor Presentation to discuss the Cabaçal DFS Results

0:00 Good afternoon, and welcome to the Meridian Mining PLC Investor Presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged and could be submitted at any time by the Q and A tab situated on the right hand corner of your screen. Simply type in your questions and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company can review your questions submitted today and publish responses where it's appropriate to do so. Before we begin, I'd like to submit the following poll. I'd now like to hand you over to Gilbert Clark, CEO. Good afternoon, sir. Thank you.

0:32 Welcome everyone to this webinar today on the results of the Capizal DEFINITY feasibility study. It's very much what this is all about, He's getting prepared to build Brazil's next copper gold mine. A couple of pages. This presentation of course is downloadable from the website. There's two disclaimers I encourage you to read.

0:54 Okay. For some time, we really talked to the investor community at how significant that we think the results are and the promise that was cabozantinib to deliver. On a base case, post tax in US dollars, we generated NPV of over 2,000,000,000 USD with an IRR of over a 108%. If you look at today's spot prices, that gives us a NPV of 2,900,000,000 with a return of 134 percent in the IRR. These are great numbers, but these are industrial numbers. This is what a mine should generate. And it's at all cycle of the commodity cycle, this mine generates exceptional economics. On the asset, life of mine asset is $10.56 dollars per ounce of gold equivalent. We have both copper and gold and silver.

1:44 The initial CapEx has grown. There's been some factors in relation to more detailed engineering. Of course, that encourages more cost inflation within Brazil and, of course, the strengthening of the Brazilian real to U. S. Dollar. In the payback, it's very quick, dollars 900,000 of the year. That's what we expect. The first five years production exceptional, dollars 183,500 and twenty six ounces of gold equivalent. One of the most important figures to look at there are those at NPV to CapEx ratio of 6.5 to one. In the base case scenario, over the life of mine, we generate over US2.9 billion dollars post tax, and it's got a mine life of thirteen point nine years.

2:26 We're getting in the DFS, it's an eighteen month build. So straight after eighteen month, very short time after, we're going to positive cash flow. You can see as we get in year four, we take the throughput up to 4,500,000 tonnes. You can see the increase in the cash flow there. And as the trail the grades levels out, so does the income. On the CapEx, like I said, we this has been fully financed sorry, fully studied. It's got the inclusion of the tax credit, Brazilian tax credits. Our total operating costs have increased slightly to 22.41 US dollars per ton milled. What the world's and I've been encouraging us in communicating this to our investment community, in January this year we increased the resource and I said there was going to be reciprocal growth in the reserve, which is now up to 56,000,000 tonnes.

3:17 The strip ratio has decreased to 1.4. I will note to everyone that this is within the permitted premier license open pit that went into the application. So we see tremendous opportunity to actually in the future to increase that reserve and to potentially cut back the pit, particularly in the Northwest. The metallurgical results that we published in throughout the year, particularly with the resource statement, they've also contributed to the increase in the mineral reserve for Cabo Sal.

3:49 Resource statement, 70 went from 70 it grew from 50,000,000 to 70,000,000 tonnes. Now the reserve statement has grown from 40,000,000 to 56,000,000 tonnes. We have very much what we want to be is focused now on the execution, generate the exploration activities. As we go into production with this mine, we are already into that resource development phase.

4:13 On the schedule, you can see that upfront high grade mill feed that generates the tremendous economics of the project. Then we're fully planned in the DFS for the expansion case, which takes us up to 4,500,000 tonnes per annum. We have got two products, sorry, one single product now coming out of Cabo Sal. Previously, we were going to produce dore and the copper concentrate. We analyzed the gravity gold and that had a high contaminant of actually copper, which can produce problems later on in refining stage. So to now, what we're going to produce is just a single product, which is the copper concentrate. Gold grade will be up to two ounces per ton and the silver can be three, four, five ounces per ton. As we've said in the past, we've actually reported, we are going be producing one of the best copper concentrates that produces one of the most pure uplift of copper and almost anode grade copper. So we're very happy with what we've got with the commodity.

5:12 Very happy with what we've got with the open pit, the production profile and this is leading to the tremendous economics. We've got a very what we're looking here is a mine plan to expand. Of course, with the increased reserve statement, we've had to increase the dry stack tailings. That was gone. Of course, that's gone from handling 40,000,000 tonnes to 56,000,000 tonnes of ore. And we can see now that we've fully designed this to minimize trucking routes to optimize the site for the long term. So when we go when I say it's what is it for? Ten, fifteen year production cycle at the moment, the opportunity to cut back, we want to be able to use this site for the decades to come. We have one of the best exploration portfolios that we're co developing as we develop this significant copper gold mine.

6:06 On the flow sheet, we've decreased the grind size to a 150 micron. We are producing a very clean 29% copper grade copper concentrate. The high metal recoveries are there, 89% for gold, 92.8% for copper. We have no impurities in this copper concentrate. We are producing for the next decade the best blending or sole smelting copper concentrate going into the market. That makes it highly retractable both for the smelters around the world, but also the trading houses. We've designed the process so it's non asset generating. We're very conscious of the sensitivities of environmental mining, the impact of mining. But at the end of the day, we will ensure that our environmental impact is minimized. We benefit of course from being in a fantastic country, being Brazil. We have a bipartisan approach to mining across the political spectrum.

6:57 We are in Mato Grosso, it's a fantastic state, lot of hydroelectricity. We are adjacent to some hundred hundred and three hundred and seven thousand three hundred and seventy five megawatt hour of electricity within a 100 kilometer radius. We're recently being granted the installation license to actually construct the power line to site. We'll invest over US20 million dollars in off-site infrastructure and long lead items this year.

7:25 So where are we at today? Well, we've completed the DFS. Shortly, we'll be filing the 40 three-one 101. We'll be going straight into the detailed engineering. We are very well advanced with the project finance discussions. We have submitted the installation license. We're giving guidance that, that would be granted in Q1 of this of twenty twenty seven. The long lead items have already been ordered, the main ones, the SAG mill, the transformers. We've selected the ISO mill for the regrind. There's electrical board to be ordered, but all this is being done now. The off-site infrastructure, we've signed contracts for the road and bridges, they're being surveyed now. So that when we go into q two next year, we have already got that that access infrastructure completed and we can go straight into conduct into the construction.

8:12 We're giving an eighteen month construction period. At the end of the eighteen month, we'll be applying for the operational license so we can go straight into production. Most importantly, when we've got what we consider to be the preeminent exploration portfolio in South America for volcanic massive sulphide copper gold exploration, we're going to continue the exploration and then I can very much see that there's an expansion of exploration in the years going forward. That's very important because as soon as you dig that one bucket of ore out of an open pit, you have to be in that resource replacement mindset, but we're starting that now. As I said, with that exploration portfolio, be it Capasar as a stand alone asset that is where all other deposits come into or Santolini, which we're actually permitting for it as a second hub. We have the exploration portfolio that most junior companies would desire.

9:14 To have such a large greenfields exploration portfolio that is associated with potential near term cash flow means that in the future, all the exploration success that we hope to achieve goes straight up into our equities. And this is important for our shareholders.

9:34 Today, we've got $4.87 a quick corporate information. We've got $4.87 shares million shares outstanding, some options, a lot of those go to our Brazilian team. We're trading a little bit above $2 today, so we're over a pound in London. We listed on the two companies. We're on the main two public markets. So we listed in Toronto. We are also listed in London. We've got a MINING listing on OTCQX and also in Germany. We have a fantastic institutional and retail share base that are contributing equity and supportive equity. We have a suite of large and the specialist mining banks across Canada and is actually in The United Kingdom supporting and writing up. And I encourage you to reach out to those groups and read their analyst reports.

10:22 At the Board of Directors, are led by Bruce MacLeod, who is a known mine building Canadian executive myself Susie, retired banker Doug Ford, Senior Independent Director Neil Gregson, a well known man from the city in London and we've got two fantastic additions to the Board, Philippe Alvarez and Carlos Veneno. These are very well known mining guys out of Brazil and great contributors to the Board. In the management team, Adrian MacArthur, the President David Harkiada is our CFO James McVuix is SVP of Corporate Development Martin McFarlane, Head of Strategy and Projects and Katherine Upforth, our Company Secretary. In Brazil, Joel is our country manager, and Victor is our chief development officer. And we look at these things as Brazil is like a separate business unit. We have got fantastic specialist mine builders now within our company, And we are going to make sure that they deliver and excel to what their capacity is. And it's very important that when in Brazil, just build the cuisines. It's a fantastic place to build a mine. It's a place we can actually deploy your capital, build a mine efficiently, get it into production.

11:28 So we have dual track strategy here, near term construction, going into production and then long term cash flow. Using that cash flow, return to shareholders of their wealth, but also to fund the expansion of exploration. Project execution. We are building a build team now in Brazil. And it's very key that with all those guys we're bringing in and incentivized to execute. We're very advanced in our permitting. The Premier license was submitted in Q2 this year. It's in the process of in Cuiaba and Mato Grosso. We've got tremendous support by the by both the federal and state governments in Brazil.

12:05 Our balance sheet is very strong. We've got over US90 million dollars in the bank account. This takes away the stress. And this is again what's the support we received from both our retail institutional shareholders. I'm proof. One of the few mining executives has actually traveled all over the world and looked at many, many jurisdictions. And I can tell you now that where we are in Brazil is an absolute Tier one mining jurisdiction. It's not cowboy country. They have rules. You follow the rules, but you can execute once you follow those rules. At the end of the day, we have got one of the best, as I said, just for Cabozal, and we'll look at Jaru and other Batanga, the two parallel greenstone belts. Just for the Cabozal Belt, we've got over 50 kilometers of belt scout exploration. We've got multiple targets to follow-up on, and that's something we'll be seeing in the future as we are pursuing today.

12:58 I'll now hand it back. If there's any questions, please let me know. That's great. Thank you very much for your presentation this afternoon. Ladies and gentlemen, please do continue to submit your questions just by using the q and a tab situated on the right hand corner of your screen. We have received a number of questions today. And if I may just start off with the first question here, which reads as follows. How does the DFS sit in plans with the wider cover Cell belt?

13:23 The the DFS, it provides a a centralized hub where we can actually a centralized hub where we can any success that we get in the future exploration, none of those deposits will have to carry the CapEx to build a mine. They'll all be centrally processed. So that's that greatly affects both the size of the any future deposit and the profitability of those deposits. So the Capasao deposit underpins the future production along with them. That's great. And the next question we have here reads, do you see any change to the milestones with the Brazilian elections?

13:59 As I said, in Brazil, it's very bipartisan when it comes to mining both in both both spectrum of the left and the right. Our president in Brazil, he's very conscious of the environment. He doesn't he's not too strong on people going to the the into the Amazon jungle and clearing that. I can understand that, of course. But from this photo here, can see that we're based in pastoral land in Southern Southern Part of Mato Grosso. So we have got tremendous local support across the four associated communities, tremendous support from the regional government of Mato Grosso. And just last week, I was in the embassy in Brazil chatting about the project. That's great. I'm just turning to the next question. How are you planning on financing with such a quick payback?

14:47 With the project finance, we're very lucky to have David joining us and and also having David James, his experience, and also the experience of the board. We will look at pretty much a conventional project finance package. But there's always been the fundamental criteria, and all of my shareholders know that, is that any project finance that we structure has to be to the benefit of the equity holders.

15:16 That's that's great. And just I think the final question we have here is, the economics look great, but the last few years of production appear to show marginal economics. How can you improve this?

15:30 We've got a very significant exploration program going ahead, and we expect we've had tremendous success at at, Saint Helena. I expect that this year, like for example, this year, I think we've got over CAD 10,000,000 in exploration expenditure. Last year, I think it was circa $1,500,000 So we extend to accelerate exploration activity along the belt. As all people know, we had a purchase agreement. We had to adhere to the purchase agreements that limited the expiration. Now we're coming to the final stages of that. We can accelerate the exploration. As I said, as soon as you start mining one dirt, one kind of dirt, you have to find a replacement. So that's where you come in with this very prospective exploration portfolio. That's great. We have just had another question come through.

16:18 I believe reserves are constrained to the preliminary license and MNO plans to expand that footprint over the longer term. Do you have any sense of the quantity of mineralization outside of that license, or is more drilling required? We can see I I won't give a quantum on that. Some of the mineralization at the Northwest is actually open, and we will continue to drill that out. We'll be drilling outside of the pit, current pit boundaries. It was important that through the process of the preliminary license and the process of the installation license, we kept consecutive metrics on the pit crest. So we we know there's more resource and potentially reserves there, and we'll go through and study that in in the immediate future. That's great. And there aren't any other any other further questions, but, of course, any that do come through, we can give you them post today's meeting. So thank you for answering all of those questions that you can. Just before we redirect investors to provide with their feedback, which I know is particularly important to you, Gilbert, could I just ask you for a few closing comments?

17:25 Look, we first, we've got to give a tremendous reach out and kudos to the Brazilian team that the management of this asset has been fantastic. It's their execution of what we as shareholders and wanted them to see. Well done, everyone, in Brazil. To our shareholders, we have had we've been through everything for this period of growth. We've been through COVID. We've been through turbulence in the markets, but we've always been focused on being the next near team producer near term producer in Brazil, and that's exactly what we want to be. Most of all, as we go forward, if you have any questions about where the company is going or any results, future results, please reach out to us on info @MeridianMining.net.br. They come to me and as my shareholders and stakeholders know, I always answer these queries.

18:15 Thank you. That's great. Thank you for updating investors today. But please ask investors not to close this session as you'll now be automatically redirected to provide your feedback in order that our management team can better understand your views and expectations. This will only take a few moments to complete, and I'm sure it be greatly valued by the company. On behalf of the management team, we'd like to thank you for attending today's presentation, and good afternoon to you all.