mandalay resources corporation september 2014 investor presentation
DESCRIPTION
Mandalay Resources' September 2014 Investor PresentationTRANSCRIPT
SEPT2014
DELIVERINGVALUE AND GROWTH
This presentation contains "forward-looking statements" within the meaning of applicable securities laws, including statements relating to life ofmine production plans, exploration plans and the growth and strategy of Mandalay. Actual results and developments may differ materially fromthose contemplated by these statements depending on, among other things: exploration results or production results not meeting management’sexpectations; capital, production and operating cost results not meeting current plans; and changes in commodity prices and general market andeconomic conditions. The factors identified above are not intended to represent a complete list of the factors that could affect Mandalay. Adescription of additional risks that could result in actual results and developments differing from those contemplated by forward lookingstatements in this news release can be found under the heading “Risk Factors” in Mandalay’s annual information form dated March 28, 2014 andin its final prospectus dated September 2, 2014, copies of which are available under Mandalay's profile at www.sedar.com. Although Mandalayhas attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can beno assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from thoseanticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.
Quality Control and AssuranceQuality control and assurance programs are implemented in line with the standards of National Instrument 43-101.
The exploration program at Costerfield is supervised by Chris Gregory (Member, Australian Institute of Geoscientists accredited CharteredProfessional (Mining)), General Manager of Australasian Business Development for Mandalay and a Qualified Person as defined under NationalInstrument 43-101. Mr. Gregory regularly visits Costerfield, supervises the collection and interpretation of scientific and technical informationcontained in this presentation.
The exploration programs on the Cerro Bayo and La Quebrada projects are supervised by Ronald Luethe (Member: American Institute ofProfessional Geologists and an Idaho Registered Professional Geologist), General Manager of Mandalay Chile Ltda. and a Qualified Person asdefined under National Instrument 43-101. Mr. Luethe visits the Cerro Bayo and La Quebrada projects often, supervises the collection andinterpretation of scientific and technical information contained in this presentation.
Dr. Mark Sander (Member: AusIMM), President of Mandalay, has visited the Costerfield, Cerro Bayo, and La Quebrada projects several timesduring 2010, 2011, 2012 and 2013 and has supervised the preparation of this presentation. He has also visited the Challacollo project in 2013and 2014.
All currency references in US$ unless otherwise indicated
Forward-looking Statements
2
15,854 63,351
107,941126,908
253,796
520,175633,000
771,500
0
200,000
400,000
600,000
800,000
1,000,000
0
50,000
100,000
150,000
200,000
2010 2011 2012 2013 2014
Oz
Au E
q. Y
Ear-
End
Res
erve
s
Oz
Au E
q. A
nnua
l Pr
oduc
tion
2009• Costerfield, Australia• Gold & Antimony• Costerfield, Australia• Gold & Antimony
2010• Cerro Bayo, Chile• Silver & Gold• Cerro Bayo, Chile• Silver & Gold
2013• Challacollo, Chile• Silver & Gold• Challacollo, Chile• Silver & Gold
2014• Björkdal, Sweden• Gold• Björkdal, Sweden• Gold
$3.2 $11.1$20.6
$92.2
$171.8 $166.9
$1.7
$32.0
$79.9 $67.7
0
50
100
150
200
2010 2011 2012 2013 2014 (1H)
US$
MM
A Profitable and Growing Dividend-Paying Company
3
We create exceptional shareholder value through the acquisition of undervalued assets that can rapidlybecome cash generative, self fund exploration, establish and maintain high operating margins andreturn cash to shareholders within a planned period of time. Mandalay is committed to operating safelyand in an environmentally responsible manner, while developing a high level of community andemployee engagement.
(1)The Company defines EBITDA as earnings before interest, taxes and non cash charges/ (income). EBITDA should not be considered by an investor as an alternative to net incomeor cash flow as determined in accordance with IFRS.(2)Annual cash dividend paid quarterly, based on 6% of the Company’s trailing quarter’s gross revenue and the future cash requirements of the Company(3) Refer to notes on Mineral Reserves in the Appendix(4) Refer to notes on gold equivalent ounces in the Appendix (5) Not including Elgin Reserves
TIMELINE
Production &Reserves
Revenue,EBITDA & Dividends
RevenueEBITDADividends $83.0
$32.4$8.0
ReservesProduction
138,000 –148,000 E
50
100
150
200
250
300
350
400
450
500
550In
dex
(Aug
ust 4
, 200
9 =
100)
Mandalay Resources Peers (1) S&P/TSX Composite Index S&P/TSX Global Mining Index
4
Value Creation Track Record
(1) Peer group includes: Endeavour Silver, First Majestic Silver, Fortuna Silver, McEwen Mining, and Primero Mining(2) Includes dividends paid and average SIB benefit to shareholders Share prices as at Sept 3, 2014
Mandalay: 325% (total return(2))Peers: 149%TSX Composite: 42%TSX Mining: -10%
Q4 2009 - New Management Team (Mills, Sander & Swarup)
50
100
150
200
250
Inde
x (A
ugus
t 4, 2
009
= 10
0)
Gold
Gold: 33%
50100150200250300350400
Inde
x (A
ugus
t 4, 2
009
= 10
0)
Silver
Silver: 33%
(1) Exercise price: C$0.255 - C$1.13; Expiry date: Dec 7, 2014 - Mar 24, 2019(2) Exercise price: C$0.31 - C$0.465; Expiry date: Nov 30, 2014(3) Assuming C$ 1 = US$ 0.94(4) As of September 10, 2013, the directors and executive officers of the Corporation, as a group, beneficially owned, or controlled or directed, directly or indirectly, approximately 125,908,112 Common Shares, representing approximately 32% of the outstanding Common Shares
Capital Structure and Ownership – Post Elgin
5
Major Shareholders(4)
Holders % Shares (Million)
West Face Capital 23.2% 91.0
Plinian + Management 8.4% 33.9
Sentry Investments 8.4% 32.8
Sprott Asset Management 8.3% 32.3
GMT Capital 3.2% 12.5
Baker Steel Capital Managers 2.6% 10.0
Shares, options, and warrants as at Sept 10, 2014 Millions (Except Share Price Information)
Share price (Sept 10, 2014 - close) (C$) 1.08/shr
Shares Outstanding 392.1
Options(1) 18.4
Warrants(2) 15.8
Fully Diluted Shares Outstanding 426.3
Market Capitalization (C$) 423.5
Cash and Cash Equivalents (US$) 69.0
Total Debt (US$) 60.0
Total Enterprise Value(3) (US$) 414.5
Operational Locations and Tradeflows
6
Mining friendly operational jurisdictions with strong customer base
Resource and Reserves Growth
M&I Resources(1)
P&P Reserves(1)
0
20,000,000
40,000,000
60,000,000
2010 2011 2012 2013
Ag (cont. oz)
0
200,000
400,000
600,000
2010 2011 2012 2013
Au (cont. oz)
0
10,000
20,000
30,000
40,000
2010 2011 2012 2013
Sb (cont. t)
(1) Refer to notes on Mineral Resources and Mineral Reserves in the Appendix
0
200
400
600
2012 2013
Cu (MMlbs)
0
5,000,000
10,000,000
15,000,000
20,000,000
2010 2011 2012 2013
Ag (cont. oz)
0
200,000
400,000
600,000
800,000
2010 2011 2012 2013
Au (cont. oz)
0
10,000
20,000
2010 2011 2012 2013
Sb (cont. t)324,313 oz Au P&P from Elgin Acquisition
Inferred Resources(1)
0
10,000,000
20,000,000
30,000,000
40,000,000
2010 2011 2012 2013
Ag (cont. oz)
0
100,000
200,000
300,000
2010 2011 2012 2013
Au (cont. oz)
0
10,000
20,000
30,000
2010 2011 2012 2013
Sb (cont. t)
10
15
20
2012 2013
Cu (MMlbs)
7
Strong Annual Production Growth
8
109,337
1,318,655
2,911,5953,145,537
3,000,000 –3,200,000
0500,000
1,000,0001,500,0002,000,0002,500,0003,000,0003,500,000
2010 2011 2012 2013 2014E
Silver (oz)
334
12,244
17,08921,482
23,000 –27,000
05,000
10,00015,00020,00025,00030,000
2010 2011 2012 2013 2014E
Gold (oz)
7,661 6,678
18,036
28,758
37,000 –43,000
0
10,000
20,000
30,000
40,000
50,000
2010 2011 2012 2013 2014E
Gold (oz)Costerfield Production(2014E)
Cerro Bayo Production(2014E)
1,106
1,571
2,481
3,2753,000 –3,300
0500
1,0001,5002,0002,5003,0003,500
2010 2011 2012 2013 2014E
Antimony (Sb)
Björkdal Production(2014E)
0
5,000
10,000
15,000
20,000
2010 2011 2012 2013 2014E
Gold (oz)
8,000 – 10,000 oz Au attributable to MND, in Q4 2014E
15,854
63,351
107,941126,908
0
40,000
80,000
120,000
160,000
2010 2011 2012 2013 2014E
Total MND Production (AuEq oz)
Refer to notes on gold equivalent ounces in the Appendix
8,000 -10,000
138,000 - 148,000
Current Financial Performance (Q2 2014)
9
Current Operational Performance (Q2 2014)Q2, 2014 2013YE Q2, 2013 2012YE
Saleable Silver oz produced 741,382 3,145,537 921,895 2,911,595
Saleable Gold oz produced 14,079 50,240 13,046 35,125
Saleable Antimony t produced 855 3,275 738 2,481
Q2, 2014 2013YE Q2, 2013 2012YENet Cash/All-in Cost/oz Ag at Cerro Bayo, $ 5.83 / 12.08 6.84 / 12.07 6.12 / 11.54 5.67 / 10.70
Net Cash/All-in Cost/oz Au Eq. at Costerfield, $
989 / 1,278 819 / 1,062 917 / 1,178 1,112 / 1,304
EBITDA, $ million 16.4 67.7 11.0 79.9
Net Income, $ million 4.9 29.4 3.1 41.7
Cash and cash equiv., $ million 69.0 33.5 23.9 17.3
Current Mandalay Performance (Q2 2014)
Acquisition of Elgin Mining
10
Acquisition Details MND acquires 100% of
the outstanding common shares of Elgin Mining
Elgin shareholders will receive in exchange for each Elgin share:
o C$0.37 cash; oro 0.4111 of an MND
common share Subject to pro-ration to a max. of 50,000,000 shares and max. of C$27 million cash
Offer Value Total equity value of
approx. C$70 million
85% premium to Elgin’s last close on the TSX on June 3, 2014 (C$0.20)
53% premium to Elgin’s 20-d VWAP on the TSX on June 3, 2014 (C$0.24)
Mandalay Acquired 100% of Elgin Mining in September 2014
Benefits to Mandalay Shareholders: Acquired the Björkdal Gold Mine, adding a third producing
and cash flowing mine, to Mandalay’s portfolio Increases and diversifies Mandalay’s production profile by
adding Björkdal’s annual production of ~50koz Au toMandalay’s current 130-143koz/yr AuEq production rate
Accretive to Mandalay shareholders on all major metrics Opportunity to generate additional value through
Mandalay’s demonstrated capabilities to grow production,lower costs, and increase reserves to Björkdal’s operationsin the near-term
Provides Mandalay with positive EBITDA and cash flow atcurrent gold prices and current AISC levels at Björkdal
Includes large resources and excellent explorationpotential for potentially long mine life and/or significantorganic growth profile
Bjorkdal Gold Mine: Overview
11
Land package 6,862 hectares
Ownership 100%
2013 gold production 46,946 oz
2014E gold production 8,000 – 10,000 oz(Q4 2014E production attributable to Mandalay)
P&P Reserves(1) 7.6 Mt @ 1.33 g/t Au
Plant recoveries (2013) Au: 87.5%
2013A Cash costs/oz Au $1,097
1 Refer to notes on reserves in the Appendix
Björkdal Value Creation Plan
12
Introduce best practice mapping, drilling, sampling, and modelling of
high nugget-effect gold deposits
Introduce best practice mapping, drilling, sampling, and modelling of
high nugget-effect gold deposits
Goal: Allow for a revised mine plan that improves planned delivered grades from mine to mill, so more gold will be produced from the current capacities, resulting in an expected decrease in cost per ounce
Goal: Margin expansion by producing more gold at reduced cost per ounce from the same, largely fixed-cost operation. Optimized mill feed grade expected to improve recoveries
Goal: Extend mineralization along strike and down dip by increasing the rate of infill drilling on currently defined Inferred Mineral Resources
Produce a more refined resource model to support more selective
underground open pit mining
techniques
Produce a more refined resource model to support more selective
underground open pit mining
techniques
Increase grade of mill feed through selective mining and “ore sorting”
technologies
Increase grade of mill feed through selective mining and “ore sorting”
technologies
Increase funding for exploration
Increase funding for exploration
Goal: Provide factual basis for more selective mining to increase mill grades; will also reduce total exploration cost by accelerating wide-spaced and infill drilling while reducing the expensive practice of exploration by large-scale drifting across and on veins
Timeline
Dec 2014 Dec 2014 2016 2016
13
Plan View
Björkdal Exploration Potential
Source: Elgin investor presentation, annual information form, other Elgin company disclosure
A
A’
Sectional View
In plan view• Down dip along historic vein swarm• Extend vein swarm to SE• Extend vein swarm to NW (Lake Z.)• Lake Z. open to NE and SW
In sectional view• Extend down dip• Veins in tailings area may signify
leakage from far down-dip
Cerro Bayo Silver-Gold Mine
14
Land package 23,096 hectares
Ownership 100%
2013 silver production 3,145,537 oz
2013 gold production 21,482 oz
2014E silver production 3.0 – 3.2 Moz
2014E gold production 23,000 – 27,000 oz
Current throughput / Goal 1,400 tpd
P&P Reserves 2.5 Mt @ 224 g/t Ag; 2.2 g/t Au
Plant recoveries (Q1 2014) Ag: 91.0%, Au: 87.25%
2013A Cash costs/oz Ag net Au credits / Q2 2014
$6.84 / $5.83
2014 Planned Exploration
Budget $3 – 4 million
Cerro Bayo Operating Performance
15
$0
$20
$40
$60
$80
0
50,000
100,000
150,000
Q4‐10 Q2‐11 Q4‐11 Q2‐12 Q4‐12 Q2‐2013
Q4‐2013
Q2‐2014
$/ Ton
ne
Tonn
es Per Qua
rter
Mining Rate and Unit Cost
t Mined Cost/ t Mined
$0
$20
$40
$60
0
50,000
100,000
150,000
Q4‐10 Q2‐11 Q4‐11 Q2‐12 Q4‐12 Q2‐13 Q4‐13 Q2‐14
$/ Ton
ne
Tonn
es Per Qua
rter
Processing Rate and Unit Cost
t Processed Cost/ t Processed
$0
$5
$10
$15
$20
0
200,000
400,000
600,000
800,000
1,000,000
Q4‐10 Q2‐11 Q4‐11 Q2‐12 Q4‐12 Q2‐13 Q4‐13 Q2‐14
$/ oz A
g Net Byprodu
ct
Oun
ces S
ilver Per Qua
rter
Saleable Silver Produced & Unit Cost
Ag oz Cost/ oz Ag net Au
LAGUNA VERDE
Emerging Extensions and New Veins Under Laguna Verde
16
Costerfield Gold-Antimony Mine: Overview
17
2014 Planned Exploration
Budget $4 – 5 million
Land package 1,293 hectares
Ownership 100%
2013 gold production 28,758 oz
2013 antimony production 3,275 t
2014E gold production 37,000 – 43,000 oz
2014E antimony production 3,000 – 3,300 t
Current throughput 400 tpd
P&P Reserves 420,000 tonnes @ 9.2 g/t Au; 3.6% Sb
Plant recoveries (Q1 2014) Au: 90.75%, Sb: 94.18%
2013A Cash cost/oz Au Eq. / Q2 2014 $819 / $989
Costerfield Operating Performance
18
$0
$100
$200
$300
$400
05,000
10,00015,00020,00025,00030,00035,00040,00045,000
Q4‐09(Dec.only)
Q2‐10 Q4‐10 Q2‐11 Q4‐11 Q2‐12 Q4‐12 Q2‐13 Q4‐13 Q2‐14
AUD/ To
nne
Tonn
es Per Qua
rter
Mining Rate and Unit Cost
t Mined Cost/ t Mined
$0
$20
$40
$60
$80
$100
$120
05,000
10,00015,00020,00025,00030,00035,00040,000
Q4‐09(Dec.only)
Q2‐10 Q4‐10 Q2‐11 Q4‐11 Q2‐12 Q4‐12 Q2‐13 Q4‐13 Q2‐14
AUD/ To
nne
Tonn
es Per Qua
rter
Processing Rate and Unit Cost
t Processed Cost/ t Processed
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
02,0004,0006,0008,00010,00012,00014,00016,00018,000
Q4‐09(Dec.only)
Q2‐10 Q4‐10 Q2‐11 Q4‐11 Q2‐12 Q4‐12 Q2‐13 Q4‐13 Q2‐14
USD
/ Oz Au
Eq.
Oun
ces P
er Qua
rter
Au Equivalent Production and Cost
Oz Au Eq. Cost/ Au Eq. Oz
Challacollo Silver-Gold Project: Overview
19
Land package 4,000 hectares
Ownership 100%
Location 130 km SE of Iquique, Chile
Mineralization Epithermal, oxidized Ag-Au
Elevation approx. 1,500 metres ASL
Resource Indicated: 1 mt @ 242 g/t Ag;Inferred: 4 mt @193 g/t Ag
20
• 12 mo Feasibility Study: $7 – $8 million – on track Hire GM and Construction Manager to run feasibility study – done Environmental, community, cultural baselines for permitting – in progress Drill 8,000 m for infilling existing Inferred Resource and extensions – infill complete;
finishing new target testing Resource update – due EOY 2014 Metallurgical testing – crushing, grinding, agitation leach in progress Mine design, plant design – after resource model and metallurgical testing complete Capital and operating costing – after mine and plant design Financial case and conversion to reserves – Q1, 2015
• Permitting Submission of EIA Q1, 2015 Receipt of permits – Goal: EOY 2015
• Build 12 months build (est.) in 2016
• Production First production – Goal: Q1 2017
Challacollo Development Plan
21
Lolon Vein
Challacollo Resources (3) Resource(t)
Au Grade (g/t)
Ag Grade(g/t)
Au (cont. oz)
Ag(cont. oz)
Measured Resources - - - - -Indicated Resources 1,030,000 0.4 242 13,000 8,000,000 M&I Resources 1,030,000 0.4 242 13,000 8,000,000 Inferred Resources 3,900,000 0.3 193 40,000 24,300,000
Source News Release, “Mandalay Resources Corporation Provides Update on Challacollo Infill Drilling and Feasibility Study Progress”. Filed September 10, 2014(1) Source Challacollo: NI 43-101 Technical Report on the Challacollo Silver-Gold Project, Region 1, Chile. Effective date January 30, 2014.
Filed on SEDAR February 7, 2014.
22
Peer Comparison: Production, Cost, Financials1H 2014 Production 1H 2014 Financials
Ag (oz)
Au (oz)
Other Ag Eq (oz)(Au + Ag)
Revenue ($MM)
EBITDA($MM)
EBITDA Margin (%)
Mandalay Resources 1,484,951 27,274 1,713 t Sb 2,973,138 83.0 32.4 39.1
Endeavour Silver 3,568,608 33,650 - 5,404,697 107.8 37.0 34.3
First Majestic Silver 5,993,715 6,176 10,456 t Pb+Zn 6,330,704 132.2 43.2 32.7
Fortuna Silver 3,167,281 16,669 9,562 t Pb+Zn 4,076,814 89.8 31.4 35.0
McEwen Mining 1,465,000 39,000 - 3,593,008 22.8 (12.9) -
Primero Mining 3,000,000 82,339 - 7,492,771 127.9 39.3 30.7
P+P Reserves Market Comparables
Ag (oz)
Au (oz)
Other Reserve Grade Ag Eq (g/t)(Au + Ag)
Market Capitalization FD
(C$MM)
1H 2014 EPS ($)
Last 12M Dividend
Paid/Share
Mandalay Resources 17,902,000 301,000 15,000t Sb 568 406.3 0.03 $0.0334
Endeavour Silver 11,603,200 139,400 - 270 587.8 0.04 $0
First Majestic Silver 108,627,132 - - 174 1,266.8 0.13 $0
Fortuna Silver 36,300,000 235,900 - 229 684.0 0.06 $0
McEwen Mining 14,724,500 200,606 - 899 864.7 (0.29) $0
Primero Mining 64,814,000 2,243,000 - 146 1,101.8 (0.08) $0
Source: Company reports and FactSetMarket capitalization as at Sept 3, 2014Ag Eq oz converted at 55/1 Au/Ag. Metal prices: Ag price of $28.92 and Au price of $1,578
23
Peer Comparison: Production, Cost, Financials
0
100
200
300
400
500
600
700
800
900
1000
P+P Reserve Grade FullyDiluted Ag Eq (g/t)
Mandalay Resources
Endeavour Silver
First Majestic Silver
Fortuna Silver
McEwen Mining
Primero Mining
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
1H 2014 EBITDA Margin
$0
$5
$10
$15
$20
$25
$30
$35
Fully Loaded 1H 2014Cash Cost/Ag Eq oz
$0
$20
$40
$60
$80
$100
$120
$140
Market Cap per 2014EAg Eq Production (oz)
$0.000
$0.010
$0.020
$0.030
$0.040
Last 12M Dividend Paidper Share
$0
$5
$10
$15
$20
$25
$30
$35
$40
Market Cap per P+PReserves (Ag Eq oz)
Market capitalization as at Sept 3, 2014Ag Eq oz converted at 55/1 Au/AgMetal prices: Ag price of $28.92 and Au price of $1,578
Second highest grade reserves (Ag Eq oz)
Highest EBITDA margin
Lowest fully loaded cost (Ag Eq oz)
Lowest market cap per estimated annual production of Ag Eq oz
Second lowest market cap per P+P reserves oz
Highest dividend paid per share
24
Investment Proposition Execution-focused management with track record of acquisition, operational and exploration success,
growth and value generation High-quality, cash flowing asset portfolio with major exploration upside and full project pipeline Strong balance sheet, Company’s development and capital programs funded Rapid increase in production and margins through low-capex organic growth and operational
efficiencies Returning cash to shareholders and reducing dilution – share buyback program in place Company dividend policy based on 6% trailing revenues
SEPT2014
DELIVERINGVALUE AND GROWTH
For more information, please contact:
Greg DiTomasoTel: 647.260.1566Email: [email protected] Website: www.mandalayresources.comTwitter: @MandalayAuAg
For more information, please contact:
Greg DiTomasoTel: 647.260.1566Email: [email protected] Website: www.mandalayresources.comTwitter: @MandalayAuAg
26
Management and Board of DirectorsSenior ManagementSenior Management
Board of DirectorsBoard of Directors
Brad Mills, CEO and Executive DirectorFormer CEO Lonmin plc, over 30 years of experience in Copper, Gold, PGMs
Mark Sander, President28 years of experience in exploration, strategy and operating improvements
Sanjay Swarup, CFO and Executive DirectorFormer Lonmin plc, over 20 years of industry experience
Belinda Labatte, Corporate SecretaryOver 10 years of experience in capital markets and investment banking
Braam Jonker, Chairman
Peter R. Jones,Independent Director
Tony Griffin,Independent Director
Robert Doyle,Independent Director
Dominic Duffy, COOMining Engineer with extensive technical and operational management experience
Numbers may differ slightly from source documents due to rounding
27
Mandalay ReservesCerro Bayo Reserves (1) Ore (t) Ag Grade (g/t) Ag (cont. oz) Au Grade (g/t) Au (cont. oz)
Proven Reserves 516,000 283 4,705,000 2.5 41,000Probable Reserves 1,967,000 209 13,197,000 2.1 134,000P&P Reserves 2,483,000 224 17,901,000 2.2 174,000
Costerfield Reserves (2) Ore (t) Sb Grade (%) Sb (cont. t) Au Grade (g/t) Au (cont. oz)
Proven Reserves 71,000 4.4 3,000 8.3 20,000Probable Reserves 350,000 3.4 12,000 9.4 106,000P&P Reserves 420,000 3.6 15,000 9.2 126,000
TOTAL RESERVES (excluding Björkdal)31-December-2013 Ag (cont. oz) Au (cont. oz) Sb (cont. t)
Mandalay Proven Reserves 4,705,000 61,000 3,000Mandalay Probable Reserves 13,197,000 240,000 12,000Total Mandalay P&P Reserves 17,902,000 301,000 15,000
1 Source: Roscoe Postle Associates, March 2014 documented in an independent NI 43-101 report filed March 28, 20142 Source: SRK Consulting (Australia), March 2014, documented in an independent NI 43-101 report filed March 28, 20143 Source: A qualified person within the meaning of NI 43-101 has not done sufficient work to classify the historical estimate as current Mineral Resources
or Mineral Reserves; Mandalay is not treating the historical estimate as current Mineral Resources and Mineral Reserves.
Bjorkdal Open-Pit Reserves(3)
Tonnes(1,000’s)
Grade(g/t) Ounces
Proven 49.6 1.48 2,366Probable 5,454.4 1.04 182,858Total 5,504.0 1.05 185,224Bjorkdal Underground Reserves(3)
Tonnes(1000’s)
Grade(g/t)
Ounces
Proven 36.2 2.02 2,357Probable 2,054.7 2.07 136,732Total 2,090.9 2.07 139,089
28
Mandalay ResourcesCerro Bayo Resources (1) Resource (t) Ag Grade (g/t) Ag (cont. oz) Au Grade (g/t) Au (cont. oz)Measured Resources 411,000 423 5,596,000 3.6 48,000Indicated Resources 1,633,000 308 16,172,000 3.2 167,000M&I Resources 2,044,000 331 21,768,000 3.3 214,000Inferred Resources 433,000 400 5,580,000 3.3 46,000
Costerfield Resources (2) Resource (t) Sb Grade (%) Sb (cont. t) Au Grade (g/t) Au (cont. oz)Measured Resources 191,000 4.3% 8,000 8.4 51,000 Indicated Resources 605,000 3.7% 22,000 9.6 187,000 M&I Resources 796,000 4.1% 32,000 9.3 238,000 Inferred Resources 569,000 3.8% 22 ,000 7.4 135,000
TOTAL RESOURCES (Excluding Björkdal) Ag (cont. oz) Au (cont. oz) Sb (cont. t) Cu (cont. lb)
Measured Resources 5,596,000 99,000 8,000 0Indicated Resources 35,372,000 367,000 22,000 459,000,000Total M&I Resources 40,968,000 465,000 32,000 459,000,000Total Inferred Resources 30,280,000 221,000 22,000 13,000,000
1 Source: Cerro Bayo - Roscoe Postle Associates, March 2014 documented in an independent NI 43-101 report filed March 28, 20142 Source: Costerfield - SRK Consulting (Australia), March 2014, documented in an independent NI 43-101 report filed March 28, 2014
La Quebrada Resources (4) Resource (t) Cu Grade (%) Cu (cont. lb) Ag Grade (g/t) Ag (cont. oz)Measured Resources 0 0 0 0 0Indicated Resources 34,800,000 0.6% 459,000,000 10 11,200,000M&I Resources 34,800,000 0.6% 459,000,000 10 11,200,000Inferred Resources 1,000,000 0.6% 13,000,000 11 400,000
Challacollo Resources (3) Resource (t) Au Grade (g/t) Ag Grade (g/t) Au (cont. oz) Ag (cont. oz)Measured Resources - - - - -Indicated Resources 1,030,000 0.4 242 13,000 8,000,000 M&I Resources 1,030,000 0.4 242 13,000 8,000,000 Inferred Resources 3,900,000 0.3 193 40,000 24,300,000
3 Source: Challacollo – Roscoe Postle Associates, Jan, 30, 2014, in a report filed February 7, 2014.4 Source: La Quebrada – Independent Technical Report filed 16-Aug-2012. 5 Source: Björkdal - A qualified person within the meaning of NI 43-101 has not done sufficient work to classify the historical estimate as current Mineral Resources or Mineral Reserves; Mandalay is not treating the historical estimate as current Mineral Resources and Mineral Reserves.
Björkdal Resources(5) Measured Au(cont. oz)
Indicated Au(cont. oz)
Measured + Indicated Au (cont. oz)
Inferred Au(cont. oz)
Open Pit 2,746 229,611 232,357 111,907Underground 12,624 765,319 777,944 640,972Totals 15,370 994,930 1,010,301 752,879