sechura rock - focus ventures ltd. · vale, mosaic, mitsui, mitsubishi, iffco present in district...

TSX-V: FCV focusventuresltd.com

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Bayovar12 Phosphate Project, Peru

Organic, Reactive. Growing Strong Roots.

Sechura rock

Corporate Presentation April 2017


Forward Looking Statements

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Certain statements contained in this presentation constitute forward-looking statements within the meaning of Canadian securities legislation. All statements included herein, other than statements of historical fact, are forward-looking statements and include, without limitation, statements about the Company’s Bayovar 12 project including details from the prefeasibility study prepared on the project. Often, but not always, these forward looking statements can be identified by the use of words such as “estimate”, “estimates”, “estimated”, “potential”, “open”, “future”, “assumed”, “projected”, “used”, “detailed”, “has been”, “gain”, “upgraded”, “offset”, “limited”, “contained”, “reflecting”, “containing”, “remaining”, “to be”, “periodically”, or statements that events, “could” or “should” occur or be achieved and similar expressions, including negative variations. Forward-looking Statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any results, performance or achievements expressed or implied by forward-looking statements. Such uncertainties and factors relate to, among other things, information contained in the prefeasibility study prepared for the Bayovar 12 project; changes in general economic conditions and financial markets; the Company or any joint venture partner not having the financial ability to meet its exploration and development goals; risks associated with the results of exploration and development activities, estimation of mineral resources and the geology, grade and continuity of mineral deposits; unanticipated costs and expenses; and such other risks detailed from time to time in the Company’s quarterly and annual filings with securities regulators and available under the Company’s profile on SEDAR at www.sedar.com. Although the Company has 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 to differ from those anticipated, estimated or intended. Forward-looking statements contained herein are based on the assumptions, beliefs, expectations and opinions of management, including but not limited to: that the Company’s stated goals for the Bayovar 12 project will be achieved; that a feasibility study will be completed for the project; and that there will be no material adverse change affecting the Company or its properties; and such other assumptions as set out herein. Forward-looking statements are made as of the date hereof and the Company disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events or results or otherwise, except as required by law. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, investors should not place undue reliance on forward-looking statements. Qualified Person The scientific and technical information in this presentation was prepared under the supervision of David Cass, Focus’ President, who is a member of the Association of Professional Engineers and Geoscientists of British Columbia, and a Qualified Person in accordance with National Instrument 43-101. Mr. Cass is responsible for ensuring that the technical information contained in this presentation is an accurate summary of the original reports and data provided to or developed by Focus. The Bayovar 12 Mineral Resource estimate was prepared by Golder Associates under the supervision of Jerry DeWolfe, MSc, PGeo, and the Mineral Reserve estimate was prepared by Herb Welhener, Vice President of Independent Mining Consultants Inc. Both are Independent Qualified Persons under National Instrument 43-101.


Management, Board & Consultants

SIMON RIDGWAY CHAIRMAN & CEO

DAVID CASS DIRECTOR

RALPH RUSHTON DIRECTOR

MARIO SZOTLENDER DIRECTOR

• Founder Fortuna Silver Mines, Radius Gold, Focus Ventures • Raised over $500m in mining finance • 30+ years experience in the junior sector • Multiple discoveries through the Americas

• Over 27 yrs international exploration and mining experience • 15 years with Anglo American in Turkey, Eastern Europe, Iran.

Peru, 6 years as Exploration Manager North America • MSc Mineral Exploration & Mining • Registered Professional Geoscientist in British Columbia • QP for Focus Ventures

• Specializes in Latin American business relationships • Fluent in several languages • Extensive experience in the junior mining sector

• 18yrs experience in exploration & mining geology in Africa & the Middle East

• MSc Economic Geology & Certificate in Business Communications

• 12 years investor relations & business development experience KEVIN BALES CFO • Over 20 yrs experience in financial reporting for mining and IT

companies • Bachelor of Management with a major in accounting • CFO for several junior companies

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JEFFREY FRANZEN TECHNICAL ADVISOR • Mr. Franzen is a registered Professional Engineer with

over 40 years of experience in advanced project development and mine operations with a focus on project de-risking and feasibility-level studies.

• He is a registered Professional Engineer in British Columbia.

GORDON TAINTON PRESIDENT & DIRECTOR • Over 25 years of experience at senior management levels in

various sectors of the fertilizer industry, including inspection and testing services across all nutrients, distribution, port/terminal development, trading, shipping, off-take agreements, and project finance

• Eight years with Sumitomo Corp. of Tokyo sourcing, purchasing and delivering key intermediate bulk and bagged products to the phosphate production industry.


Our Vision

Focus’ vision is to become a leading producer of organic Reactive Phosphate Rock Fertilizer from our Bayovar12 project in northern Peru. We will supply the growing market for Direct Application Phosphate Rock (“DAPR”) contributing to high crop yields and a sustainable agricultural industry

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Bayovar rock concentrate, with no chemical additives, can be used directly as fertilizer and is especially suited for use on the acid soils of the tropical regions of the world. It is an extremely effective source of Phosphorus that has been proven to out-perform the more expensive chemical fertilizers.

The deposit is located on tidewater, within one of the fastest growing fertilizer markets in the world.


Project Location

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Bayovar 12 is in the Sechura desert of northern Peru, 40 km from the Port of Bayovar, and 180 km from the Port of Paita. Infrastructure include paved roads, grid power line and dedicated port

Vale, Mosaic, Mitsui, Mitsubishi, IFFCO present in District

TSX-V: FCV focusventuresltd.com 6

Project Highlights

Prefeasibility Study Results

- 1MT/year grading 24 + 28% P205

- Simple beneficiation of 13 horizontal phosphorite beds by washing

- $1.15 billion in free cash flow over 20 year mine life

- Initial Capex of $167 million

- Proven and Probable Reserves of 58.8 Mt of ROM ore (dry basis)

- Substantial mineral resources remain in inventory *

- 70% owned by Focus (Right of First Refusal on partners 30%)

- Excellent infrastructure, dedicated port facilities

Post-Tax IRR NPV7.5 Payback (years) 26.3% $458m 3.9

* The reader is cautioned that mineral resources that are not mineral reserves have not demonstrated economic viability


A World Class Resource

Resources* Tonnes (Mt Dry) P2O5 %

Measured 17.7 13.16

Indicated 209.5 13.04

Inferred 102.2 13.11

Reserves Tonnes (Mt Dry) P2O5 %

Proven 14.4 12.74

Probable 44.4 13.00

Total Reserves 58.8 12.94

Resources reported below are inclusive of tonnes converted to Reserves. All tonnes in this presentation are dry basis unless otherwise stated

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The reader is cautioned that mineral resources that are not mineral reserves do not have demonstrated economic viability. Only Reserves have undergone analysis to demonstrate economic viability. There is no guarantee that Resources outside of the current Reserves will become economically viable.

• No minimum thickness, grade cut-off or other mining parameters applied. Phosphorite bed specific wet and dry relative densities used for tonnage calculations. Resource tonnes reported include tonnes converted to Reserves. Resource Estimation includes all 16 phosphate beds. Reserve Estimation considers the uppermost 13 phosphate beds. The Study assumes prices of US$145/tonne and US$185/tonne on a dry basis used for 24% and 28% P205 products respectively.

• The Bayovar 12 Independent NI 43-101 Mineral Resource estimate was prepared by Golder Associates under the supervision of Jerry DeWolfe, MSc, PGeo, and the Mineral Reserve estimate was prepared by Herb Welhener, Vice President of Independent Mining Consultants Inc. Both are Independent Qualified Persons under National Instrument 43-101.


Bayovar 12 Reactive Phosphate Rock

Reactive Phosphate Rock (RPR) for use as a Direct Application Fertilizer (DAPR)

The PFS examines production of a 24% P2O5 product and a 28% P2O5 phosphate rock concentrate

Bayovar RPR is an extremely effective, gradual-release source of Phosphorus that can out-perform many manufactured fertilizers under tropical soil & climate conditions

Focus is planning to produce up to 1-million tonnes per year of RPR by mining up to 13 different beds of phosphate rock

The RPR should be certifiable as ORGANIC - no chemicals will be used in the processing

Concentrated to 24-28 % P2O5 by washing and sizing using sea water

High solubility in citric and formic acid

Should qualify as organic as no chemicals used in upgrading

Contains micro and macro nutrients

Can be used as raw material for blending bespoke NPK mixtures

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How Effective is Sechura RPR?

Dry matter yield: Sechura RPR vs TSP

Sechura RPR is highly reactive in acid- to mildly-acid soils (pH <7.0) in regions with elevated rainfall.

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Its effectiveness has been tested on many different crop types in many different countries

It has been shown to outperform Triple Super Phosphate and Single Super Phosphate in numerous studies

It releases P gradually and adds bulk to the soil naturally.

Sechura RPR can also be used to fertilize organic crops.


Chile, Pasture land Malaysia, Oil palms

Sechura RPR has been extensively researched & tested. Oil palm plantations are a major consumer of RPR

Chile, Cruciferous crops

A tried and tested natural fertilizer which should be certifiable as organic

Sechura RPR


Principal Markets for Bayovar 12 RPR

Acidic Mildly Acidic Neutral Alkaline

SOIL ACIDITY

SSP Market Brazil Argentina Uruguay Australia

U.S Retail Market

Palm Oil Industry Ecuador Malaysia Colombia Indonesia Guatemala Peru


Market Studies

Bayovar 12 hosts a world-class deposit of arguably the most reactive phosphate rock (RPR) fertilizer in the world. The project will produce a highly sought-after, organic DAPR fertilizer.

Studies conducted by governmental organizations over the past decade have shown that on plantations located in areas with acidic soils and high rainfall, Bayovar RPR competes agronomically with SSP, achieving similar or higher crop yields. Consequently RPR and SSP tend to compete directly and prices are similar, as seen in countries such as Brazil.

The project will service the rapidly-growing oil palm market in Colombia, Ecuador and South-East Asia: the agricultural markets in Brazil and Argentina, and the local Peruvian market where phosphate nutrient needs are currently met entirely by imports.

Two mines close to Focus’ Bayovar project have been producing and selling small amounts of DAPR for several years. Fosyeiki S.A.C. and Corporacion Agrosechura Peru S.A.C. produce and export ~22-24% P2O5 rock by truck and ship to Ecuador, Nicaragua, Bolivia and Colombia. FOB prices by ship to Central America have ranged from US$163/T to US$195/T. FOB prices achieved by Agrosechura by truck to Bolivia and Ecuador have ranged up to US$220/T.

Retail prices of DAPR to organic farmers in Peru have remained fairly constant at about US$320 per tonne for the past few years. In Malaysia, Bayovar rock is currently being marketed by Union Harvest for US$160-170/T. The PFS assumes a wholesale price of US$145/T for Focus’ 24% P2O5 product.

Focus is looking to displace SSP sales in South and Central America with a cheaper but more effective product. The PFS assumed a wholesale price of US$185/T for Focus’ higher grade product, which represents approximately a 25% discount to SSP prices in Latin America.

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•A massive expansion of oil palm cultivation is underway globally.

•RPR is one of the best fertilizers for oil palms.

•Oil palms thrive on acidic soils & need a lot of fertilizer.

•Phosphorus helps palm growth and root development in immature plants.

• In Southeast Asia RPR is the preferred oil palm plantation fertilizer. Application rates range from 300 kg to 1 tonne RPR per hectare per year.

•An extensive study by Indonesian and Malaysian plantations found that the application of RPR from Bayovar optimized palm nutrition and oil yields.

• Latin American Palm Oil production growth roughly 11% YoY since the 1970s.

• Colombia plans 6 fold growth by 2020, Peruvian production set to triple.

*Patrick Ng, Kah Goh and Zaharah, 2010, Direct applications of phosphate rocks on sustainability of oil palm plantations.

YoY Growth in Palm Oil Production Latin America

Oil Palm Boom


Product Specifications

Specification Typical levels P2O5 24-28%

NAC 6.5–9

2% Citric Acid Solubility

9.5-15%

2% Formic Acid Solubility

14-19%

% passing 0.5mm 95%

CaO 40%

MgO 0.50%

Cl 3%

K2O 0.15%

S 1.50%

Fe2O3 0.60%

Mo 10 ppm

Zn 200 ppm

B 50 ppm

Cu 30 ppm

Moisture 4-6%

The product will be an apatite (calcium phosphate) concentrate with trace elements.


PFS Study Consultants

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International Mining Consultants– Mine Engineering

M3 Engineering & Technology - the principal Qualified Person (“QP”) and author of the study, Process Engineering

Golder Associates (Golder) – Geological Modeling and Mineral Resource Estimation, Geotechnical, Hydrology, and Tailings Storage Facility

Jacobs – Metallurgical Testwork, Process Design

The PFS report is the product of technical contributions from a number of consultants & Focus personnel. The primary contributors by area of expertise were:


62 holes drilled over 8km by 3.6km (30% of total area of concession)

Indicated Resources defined on 800 x 800m drill spacing

Measured Resources on 400 x 400 hole spacing

All holes cut the same sequence of phosphate beds

1.6km

Focus’ Drilling & Resource Distribution

AREA OF MINERAL RESERVES / PROPOSED

OPEN PIT


Geology in Cross Section Simple layer cake geology allowed for rapid exploration progress

No faults, folds or significant structures detected

Rock is soft and free digging in nature

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PIT SHELL

S N

Cross Section

PHOSPHATE SEAMS


Tailings Storage Stage 1 Tailings Storage

Stage 2

20-Year Open Pit

La Nina Substation

Pan-American Highway Drilled Resource

Concession Boundary

Process Plant

2km

62 diamond drill holes on 400m and 800m grid-spacing

Drill tested over 3.6km x 8.0km with resources and reserves open to extension

Predictable x-y-z positioning of laterally continuous phosphate beds

Phosphate Resources and Mine Design


Mining Method

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500m

Schematic Cross Section of the Open Pit in Year 7 of operations Vertical Exaggeration = 5 : 1

Overburden

Ex-Pit Waste Dump

In-Pit Backfill

Process Plant

Ore

TSF


Mine Site Layout and Process Plant

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Drum Washer

Ore Feed Conveyor

Ore Dump Pocket

Primary Attrition Cells

Secondary Attrition Cells

Rotary Dryer

Belt Filter

Product Silos

LNG

Discharge Chute

Bucket Elevator

Truck Loading

Dryer Feed Bin

Hydrosizer

Scalping Screen

Air Handling

Electrical Building

Primary Cyclone

Bucket Elevator

Dry Cyclone Baghouse

Secondary Cyclone

Process Plant Site Layout


Open Pit Annual Production Schedule The mine will load and haul 25 MT a year of material Accelerated program of pre-production and Year 1 stripping gives flexibility in the mine scheduling and helps maintain a relatively smooth Waste to Ore ratio, which averages 7.2/1 over the Life of Mine Waste accounts for 88% of total mine production and will be placed as backfill in the mined-out phases of the pit and in ex-pit surface storage, both of which reduce haulage distances and the project footprint.


Metallurgical testing was directed at recovering +24% and +28% P2O5 concentrates suitable for use as direct application phosphate rock (DAPR) to take advantage of the rock’s high reactivity.

The Flow-Sheet is identical for both products and is shown below;

Process consists of desliming, dewatering and drying to 4% moisture using unit operations including drum washing, size classification, attrition scrubbing, hydraulic classification, filtering, and fluid bed drying. The process uses seawater throughout: the product is not rinsed with freshwater to remove salts.

Phosphate recoveries 24% P2O5 DAPR Product = 81.1% P2O5 +28% P2O5 DAPR Product = 72.3% P2O5

Mineral Beneficiation

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Ore Feed

Drum Scrubber

DAPR Products

+12,500μm Primary Slimes -53μm

Tertiary Slimes 53μm for 24% 105μm for 28%

Scalping Screen

Primary Cyclones

Attrition Scrubbers

600 μm Screen

Secondary Cyclones Hydrosizer Product

Filter Dryer

Attrition Scrubbers

Secondary Slimes -53μm


Site Access and Concentrate Shipment Access to the Bayovar 12 plant is from the Bayovar-Chiclayo Highway, located 17 km west of the Pan American Highway.

Concentrate will be trucked to the Port of Bayovar along the Bayovar-Chiclayo Highway over a distance of approximately 40 km to the port facility using contractor- owned, 35-tonne end-dumping trailers.

The project is planning to use the port facilities owned by its partner, JPQ, located in the Port of Bayovar.

The facility is a medium depth port that handles Handysize ships that have a capacity of 20,000 long tons deadweight (DWT) – 28,000 DWT and Handysize ships, with a capacity of 28,000 – 40,000 DWT. The port has been actively shipping gypsum for JPQ from open stockpiles.

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Capital Cost Overview The initial CAPEX includes mine design, permit, pre-strip, construct, plant facilities, ancillary facilities, and utilities, plus indirect costs for engineering, construction management, and Owner’s costs Sustaining CAPEX covers facilities expansions, mining equipment replacements, and expected replacements of process equipment

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* Contingency not applied to Pre-stripping, Primary Mine Equipment Financing, Tailings Storage Facility, Spare Parts and Owner’s Costs

Mine $59.4m

Plant & Infrastructure $60.8m

Tailings $10.3m

Indirects $21.6m

Contingency $15.6m*

36%

10% 13%

6%

Initial Capex ($millions)

Sustaining Capex ($millions)

Total Capex ($millions)

Mine 59.4 160.8 220.2

Plant & Infrastructure 60.8 20.0 80.8

Tailings facility 10.3 12.7 23.0

Indirect Costs 21.6 - 21.6

Contingency* 15.6 - 15.6

Total Capex 167.7 193.5 361.2

Capital Cost Summary

35% Initial Capex $167.7 million


Operating costs were developed for mining, processing and G&A costs. Operating costs include labor, equipment operation, power, fuel and consumable consumption, maintenance and repairs, and outside services.

Operating Cost Overview

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Mining $39.72

Process Plant $8.01

G&A $2.38

Transport $10.09 Total LOM Cash Operating Cost

$ / tonne Product = $60.20

66% 13%

17% 4%


Financial Analysis

Key after tax metrics include a 26.3 % IRR, NPV7.5 $458 M and 3.9 year payback

Pre-Production working capital of $40M has been included in the financial model

Payback 3.9 Years

Annual Average After-Tax Cash Flow = $68million over 20 Year Life of Mine


PFS Recommendations

Bulk sampling and pilot plant metallurgical studies to further improve the beneficiation flow sheet

Additional drilling to north and north-east of the 20-year pit shell to define additional Reserves

Assess use of a Continuous Mining System (bucket wheel excavators, conveyors and spreaders) for overburden stripping as alternative to front end loaders/truck-haul

Cost sharing opportunities with adjacent projects

Relocation of road and TSF

Opportunities to improve OPEX & CAPEX at Feasibility Stage include;

Future FS will consider mining of overburden with Bucket Wheel Excavator and Conveyor system 2

Current PFS assumes mining of phosphate beds and Interburden layers by Surface Miners 1

1 Photo Courtesy Wirtgen 2 Photo Courtesy ThyssenKrupp


Forecast Project Execution

Activity Year 1 Year 2 Year 3 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Geotechnical

Geotechnical Site Investigations

Geotechnical Analysis

Pilot Plant Testing

Pilot Plant

Tailings Testwork

Feasibility Study

Mine Planning

Process Plant

TSF & Waste Dumps

Infrastructure

Marketing

Environmental Assessment & Permitting

Develop EIA Document

Government Review

Community Relations

Authorization to Proceed

Engineering & Construction

Basic Engineering

Long Lead Procurement

Detailed Engineering

Mining Fleet Procurement

Pre-Stripping

Seawater Pipeline

Power Transmission Line

Plant Construction

Commissioning/Start-up

Ramp-up


Mine & Resources

Upside Logistics

Large world-class phosphate resource Sufficient resources for well in excess of 20 years

Free digging rock, no blasting Simple beneficiation using seawater, no

chemicals

Pre-Feasibility Study Complete Project significantly de-risked

NPV $458m, High-Margin strip mining “Green” footprint, organic product

Opportunities to further reduce Opex in BFS Value-add through Product Branding and Blending

Rock also suitable for making phosphoric acid, DAP, MAP etc

138kv & 220Kv power lines on the concession 40km by sealed road from port owned by our JV partner Experienced labour available Flat coastal desert, no nearby population Beneficiation uses sea water Local economy resource based

Peru: Stable & mining friendly Established Phosphate District, Producing mine within 15km Desert location

Jurisdiction

Bayovar 12 Project

Project Summary


Corporate Structure

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Management and insiders own 8.9% of the issued capital

Sprott holdings - 12.6% of issued - 18.3% diluted basis

1-Year Chart as of 29 March 2017 Type No. of Shares Issued 232.2m Options 4.6m Warrants 149.3m Fully diluted 386.1m

52-week range 0.05 – 0.11 Ave Daily Vol. (3m) 254k


Focus Ventures Ltd. Vancouver, Canada Contact Person: Gordon Tainton

[email protected] Telephone: +1 604.248.8380 Lima, Peru Contact Person: Pedro Garcia Telephone: +51 1 637 8171

Website : http://www.focusventuresltd.com

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TSX.V - FCV

sechura rock - focus ventures ltd. · vale, mosaic, mitsui, mitsubishi, iffco present in district...

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