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July 20th, 2016Alain LambertChairman and CEOTel: (520) 369 [email protected]
Corporate Presentation
Forward Looking Statements and DisclaimerThis presentation contains forward‐looking statements that are not based on historical facts, butrather on current expectations and projections about future events and they are subject to risksand uncertainties. All of the facts and figures in this presentation may not be NI 43-101 compliant.These risks and uncertainties could cause actual results to differ materially from the future resultsexpressed or implied by the forward‐looking statements. Such risks may include, without limitation:risks and uncertainties relating to foreign currency fluctuations; risks inherent in mining includingenvironmental hazards, unusual or unexpected geological formations, ground control problems andflooding; risks associated with the estimation of mineral resources and reserves and the geology,grade and continuity of mineral deposits; the possibility that that future exploration, developmentor mining results will not be consistent with the Company’s expectations; the potential for andeffects of labor disputes or other unanticipated difficulties with or shortages of labor orinterruptions in production; actual mineralized rock mined varying from estimates of grade,tonnage, dilution and metallurgical and other characteristics; the inherent uncertainty ofproduction and cost estimates and the potential for unexpected costs and expenses; andcommodity price fluctuations. Investors should note that the Las Cristinas, Potosi and La Chincheproperties have no established mineral resources or mineral reserves as defined by NI 43-101.Although Cyprium Mining may make production decisions based on historical productionrecords, sampling or drilling results, a feasibility study has not been completed on any of theseprojects and there is no certainty that the proposed operations will be economically ortechnically viable. Qualified Person: Dr. Craig Gibson, Certified Professional Geologist, has reviewedthe appropriate portions of this presentation and approved the contents thereof.
Acquire, operate and develop past producing mines
Two key selection criteria:
– Can be quickly and inexpensively brought back into production to generate cash flow for exploration and development
–Must have significant exploration potential; possibility of making new discoveries
Start with traditional, proven small-scale production techniques to accelerate time to cash flow
Fund the systematic development & exploration of the mine through cash flow
Utilize modern equipment to expand the operation
What We Do
Main Aspects of Our Business – What We Need to be Successful – All in Place:
Mining: exploration and exploitation of poly-metallic deposits: silver, lead, zinc and copper
Milling: processing of mineralized material into Pb and Zn concentrate with Ag content
Shipping & Selling: deliver and sell our concentrate to Trafigura at the Port of Manzanillo, Mexico
“We produce Pb and Zn concentrates with strong Ag content, not ounces of Ag and Ag equivalents.”
What We Do: Three Keys Areas of Expertise
Assembled three key assets: Controlling joint venture interest in:
– Historic Potosi silver mine
– Potosi processing facility
– La Chinche exploration property
Aldama 100 t/d flotation plant
Las Cristinas copper/silver mine
People: solid local team and contacts
Strong relationship with Trafigura Mexico ensures future growth – multitudes of projects
Strong Asset Base, People, Relationships
Controlling joint venture interest:
53% initial interest, minority partners subject to dilution
20 years exclusive right of exploitation and exploration
Full operational and financial control
Offtake agreement with Trafigura Mexico
US $2.5 million financial commitment1
1 To be completed by December 31, 2016. US $960,000 invested to date.
Potosi JV: Company Maker Asset
Owned by the Valenzuela family for three generations, acquired when thought to be depleted, new mineralization discovered
Located 22 kilometers from Chihuahua (pop. 853K)
Shut down in the 90s: – Labor dispute– High cost structure– Sulfide bodies not completely mined
Irregular/informal production since
Some of the mineralized material was processed at the Aldama flotation plant
The Historic Potosi Silver Mine
Company maker asset
Six shafts and twenty-two levels
Infrastructure still available including buildings, headframes and hoists
Historical technical information preserved and available
Key past employees hired
Only 42 km from Aldama flotation plant
Located in Santa Eulalia, a world class polymetallic (Ag, Zn & Pb) mining district
The Historic Potosi Silver Mine
World class polymetallic mining district located in State of Chihuahua, Mexico
Discovered in the 1500’s, and recorded production has occurred over more than 300 years
Ranks as one of Mexico's primary silver and base metal producing districts with nearly 450 million ounces of silver and substantial amounts of lead and zinc mined
Nature of deposit: carbonate replacement deposit, Santa Eulalia is historically largest of its type in Mexico
Subject of Dr. Peter Megaw’s Ph. D. thesis (1991) (1)
(1) MAG Silver’s Chief Exploration Officer
The Santa Eulalia Mining District
Only three players:
Cyprium Mining Corp (orange and green):
– Potosi mine (West Camp)
– La Chinche property (West Camp)
Groupo Mexico (white) :
– Buena Tierra mine (West Camp)
– San Antonio mine (East Camp)
MAG Silver Corp (pink) :
– Controls all of the ground (no mine) to the immediate south of the district and between the West Camp and East Camp (Central Camp). Adjacent to the south of La Chinche property.
The Santa Eulalia Mining District
Potosi JV: Key Projects
Four Key Projects
Project Name Mine LevelsTimeline to Extraction
Initial Daily Extraction
Target Extraction
Note
Tunel body, Shaft No. 3
2,3 and 4 Started 80 120Rehabilitation completed.
Know mineralized body
Santo Domingo, Shaft No. 5
9, 10 and 1112 to 15 months
from start of project
400 500
Decision to be made in Q3 2016, possible alternative is to
rent neighbor’s shaft. Significant exploration in
2014. Plans started for 43-101 resource estimate.
Shaft #1 6, 9 and 106 months from start
of project120 150
High grade Ag, unexplored. Decision to be made in Q3
2016
Oxide Zinc, shaftNo. 5
14 and 16Dependent on shaft No. 5 rehabilitation
N/A N/A Sampling program underway
Total 600 770
Potosi JV: Key Projects
Map of Key Areas of Focus: Tunel & Santo Domingo mineralized bodies
Map of the Potosi Mine area showing principal workings and areas projected for exploration
and mining. The mine infrastructure to be used
includes the main adit and 0 level tunnel and Potosi Shafts
No. 1, 3 and 5. Exploration and mining will be focused initially around stopes on level 4 (Tunel body) and on levels 9-11 (Santo Domingo-Main Silicate body).
Potosi JV: Key Projects
Highlights from Key Areas of Focus
Tunel body:
Immediately accessible on levels 2 to 4 - shallow level
Recently mined sulfide mineralization - known metallurgy
Rock with good grades in sight - quick production
Santo Domingo body
Rock with good grades in sight levels 6 to 11- known mineralized rock
Recently mined, large tonnage left - possible near term resource
Relatively ‘easy’ future access through shaft # 1 - when rehabilitated
Oxide zinc bodies at depth - very high grade
Potosi JV: Tunel Body & Shaft No. 3 Project
Recent Achievements
Rehabilitated Shaft No. 3 to gain access to levels 1 to 4 of the mine: extraction capacity of 120 tons per day
Replaced almost 1.5 kilometres of railway tracks at level 0 and at level 4
Rehabilitated existing equipment, including hoist, air loaders and electric locomotive
Air compressor installed inside the mine
Air and water tubing installed
Potosi JV: Tunel body & Shaft No. 3 Project
Hired Dr. Peter Megaw as Exploration Advisor
Released assay results from level 3.5 and level 4 exploration
Mining area at level 4 of the mine ready for blasting
Recruited senior personnel in Mexico for main functions
Signed offtake agreement with Trafigura Mexico
Mining contractor hired
Recent Achievements
Potosi JV: Tunel Body & Shaft No. 3 Project
Tunel Body Around the Potosi Shaft No. 3
Composite level plan and vertical projection for the Tunel body, Potosi shaft No. 3 area, showing stopes and rail service installed to haul broken rock to the shaft.
Composite level plan on the left, vertical projection on the right.
Rail line
Level 4 stope
Level 3 stope
Potosi # 3 Shaft
projected
Rail linePotosi # 3
Shaft
Level 4
stope
Potosi JV: Upcoming Projects
Silicate Ore Body – Level 9 and 10 and High Grade Oxide Zinc at level 14 & 16
Levels 9, 10 and 11:
– Over 600 samples taken in 2014 by third-party: large mineralized body
– Next phase: additional sampling, topography and drilling
Levels 14 and 16 – oxide zinc:
– Ongoing sampling program
– 9 samples taken in high grade oxide zinc zone averaged 37% Zn, results for 35 additional samples pending
Potosi JV: Exploration Project
La Chinche Exploration Property
Chinche shaft
Mag Silver exploration model
Potosi JV: Exploration Project
La Chinche Exploration Property
Mineralization model based on the district and other deposits indicates potential for mineralization
Provides target with no modern exploration Structural trends along mineralized fissures defined by old
workings end at Condesa fissure, with minor workings to the south
Schematic section of mineralization modelModified from Mag Silver Technical Report, Wendt, 2002
Potosi mine
Exploration potential
Seven kilometers from the Potosi mine
Recent partial rehabilitation for 400 tons/day capacity
Evaluation work started to move some of the rehabilitated equipment to the mine site
Rehabilitate Potosi shaft No. 5 and build plant at mine site?
Rent Grupo Mexico’s Buena Tierra shaft and process at their plant?
Potosi JV: Potosi Processing Plant
Current capacity of 100 t/d
Exclusive right to use until Sept 2019
– No need to build/variable cost
Use Aldama to process mineralized material from the Potosi mine
42 kilometers from the mine
Invested $200,000 in 2015
Will invest additional $200,000 by end of 2016:
– Technology to improve efficiencies and processes
– Equipment to double the capacity to 200 tons per day
Access to Flotation Plant – Aldama
Las Cristinas copper/silver mine
Shut down in the 70s
Two shafts, two levels, headframe and hoist
Significant exploration, including drilling in 2013/14
Property is 7 kilometers long by 1 to 2 kilometers wide, 684 hectares
Only 2 hours by road from Chihuahua
Exposure to Copper – Las Cristinas
Exposure to Copper – Las Cristinas
Las Cristinas copper/silver mine
Next steps to be completed by end of 2016:
– Dewater the old mine
– Take 35 to 50 samples inside the mine
– Focus exploration on high grade areas
Make small scale production decision in 2016