February 2016 Corporate Presentation
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Transcript of February 2016 Corporate Presentation
TSXV: FPC | WWW.FALCORES.COM | 1TSXV: FPC | WWW.FALCORES.COM
REDISCOVERING THE ROUYN-NORANDA MINING DISTRICT
REBIRTH OF THE HORNE MINE – A COMPANY MAKER
FEBRUARY 2016
WHERE 11 M OZS OF GOLD & 2.5 BN LBS OF COPPER WERE MINED HISTORICALLY
TSXV: FPC | WWW.FALCORES.COM | 2
DisclaimerThis presentation contains a review of the Company’s properties in Canada. Viewers are cautioned that the projects are at an early stage of exploration and that estimates and projections contained herein are based on limited and incomplete data. More work is required before the mineralization on the projects and their economic aspects can be confidentially modeled. Therefore, the work results and estimates herein may be considered to be generally indicative only of the nature and quality of the projects. No representation or prediction is intended as to the results of future work, nor can there be any promise that the estimates herein will be confirmed by future exploration or analysis, or that the projects will otherwise prove to be economic.
The TSX Venture Exchange has not reviewed and does not accept responsibility for the accuracy or adequacy of this presentation, which has been prepared by management. There can be no assurance that any of the assumptions in the resource estimates will be supported by a Pre-feasibility or Feasibility Study or that any forward looking event will come to pass. The data is incomplete and considerable additional work will be required to complete further evaluation, including but not limited to drilling, engineering and socio-economic studies and investment.
This presentation contains information with respect to adjacent or similar mineral properties in respect of which the Company has no interest or rights to explore or mine. Readers are cautioned that the Company has no interest in or right to acquire any interest in any such properties, and that mineral deposits on adjacent or similar properties are not indicative of mineral deposits on the Company’s properties. Past performance is no guarantee of future performance and all investors are urged to consult their investment professionals before making an investment decision. Investors are further cautioned that past performance is no guarantee of future performance
Forward-Looking StatementsCertain information included in this presentation constitutes forward-looking statements, including any information as to our projects, plans and future performance. All statements, other than statements of historical fact, are forward-looking statements. The words “expect”, “believe”, “anticipate”, “will”, “intend”, “estimate”, “forecast”, “budget”, “schedule” and similar expressions identify forward-looking statements. Forward-looking statements are necessarily based upon a number of factors and assumptions that, while considered reasonable by management, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Known and unknown factors could cause actual results to differ materially from those projected in the forward-looking statements.
Such factors include, but are not limited to: changes to current estimates of mineral reserves and resources; labour availability; litigation; availability of and increased costs associated with contractors and exploration equipment; the speculative nature of mineral exploration and development, including the risks of obtaining necessary licenses and permits; contests over title to properties; uncertainty with the Company’s ability to secure capital to execute its business plans; changes in national and local government legislation in Canada; risk of loss due to sabotage and civil disturbances; risks arising from holding derivative instruments; and business opportunities that may be pursued by the company. Many of these uncertainties and contingencies can affect our actual results and could cause actual results to differ materially from those expressed or implied in any forward-looking statements made by, or on behalf of, us. Readers are cautioned that forward-looking statements are not guarantees of future performance.
The company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required by applicable law.
Cautionary Note to U.S Investors Concerning Measured, Indicated and Inferred ResourcesThis presentation uses the terms “measured,” “indicated” and “inferred resources. We advise investors that while those terms are recognized and required by Canadian regulations,the United States Securities and Exchange commission does not recognize them. Under Canadian rules, estimates of inferred mineral resources may not form the basis of feasibility orother economic studies. United States investors are cautioned not to assume that all or any part of measured or indicated mineral resources will ever be converted into mineralreserves. United States investors are also cautioned not to assume that all or any part of an inferred mineral resource exists, or is economically or legally mineable.
CAUTIONARY STATEMENT
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5.4 MILLION GOLD EQ OZS INDICATED&
1.3 MILLION GOLD EQ OZS INFERRED (C$65 NSR cut-off, 43-101)*
ROUYN-NORANDA, QUEBEC
* SEE JANUARY 25, 2016 FALCO PRESS RELEASE
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FALCO – A QUALITY CANADIAN GOLD DEVELOPER
INVESTMENT THESIS
ROBUST INITIAL & STRATEGIC ASSET IN
HORNE 5
DESIRABLE & STRONG LAND POSITION IN
THE ABITIBI
EXPLORATION TARGETS TO DRIVE FURTHER
VALUE
GOOD CONSOLIDATION PROSPECTS LOW POLITICAL RISK FLEXIBLE BALANCE
SHEET
EXPERIENCED MANAGEMENT WITH TECHNICAL EXPERTISE
STRONG SHAREHOLDER
BASE
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FALCO – A QUALITY CANADIAN GOLD DEVELOPER
WHY HORNE 5? CHECKING ALL THE BOXES!
STRATEGIC ASSET: LARGE TONNAGE & SCALE, HIGHLY MECHANISED
STRONG RESOURCE GROWTH & FUTURE UPSIDE
EXISTING INFRASTRUCTURE: SHAFT & OPENINGS FOR TAILINGS
CLEAR PERMITTING PROCESS IN QUEBEC
STRONG COMMUNITY ENGAGEMENT & EXISTING MINING CULTURE
GREAT OPPORTUNITY TO DRIVE INNOVATION & EFFICIENCIES
PROVEN, STRONG & EXPERIENCED MINE BUILDERS
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Capital Structure
Shareholder Registry
Osisko Gold Royalties 16.2%
Goodman & Company 7.5%
Raymond James 6.8%
Quebec Funds 5.7%
Pate Capital 3.7%
US Global 2.5%
Commodity Discovery Fund 1.1%
AgaNola AG 0.5%
Insiders (D&O) 3.8%
Shares Outstanding (basic) 109,983,907
Stock Options 9,910,439
Warrants 3,279,514
Shares Outstanding (fully diluted} 123,173,860
Cash (Sept 30, 2015) + FT Raise C$7.1 Million
CORPORATE SUMMARY – MINDFUL OF SHAREHOLDER DILUTION
A NEW DEVELOPMENT VEHICLE IN THE ABITIBI
Share Price Performance
0
400
800
1,200
1,600
2,000
2,400
2,800
$0.20
$0.25
$0.30
$0.35
$0.40
$0.45
30-Jun-15 31-Aug-15 31-Oct-15 31-Dec-15
VOLU
ME (IN
000'S)PRIC
E (C
$)
Closes $3.3mm FT Financing at $0.32
Closes $1.85mm Financing at $0.40
NEW RESOURCE UPDATE
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LOW POLITICAL RISK – NEW MINES WILL BE BUILT IN QUEBEC
QUEBEC’S COMPETITIVE ADVANTAGE
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Larder Lake13 Moz Au
Kirkland Lake24 Moz Au
Timmins71 Moz Au
Rouyn-Noranda19 Moz Au
Malartic14 Moz Au
Bousquet21 Moz Au
Lennox Creek Fault Zone
Porcupine Destor Fault Zone
Cadillac Fault Zone
ONTARIOQUEBEC
Rouyn-Noranda
Timiskaming SedimentsCobalt Plate
Felsic Intrusive
Kap HighMafic/Ultramafic Volcanics
GeologyVal d’Or
14 Moz Au
Major gold mining camp
50 current and former gold and base metal mines in the Rouyn-Noranda camp Rouyn-Noranda camp has produced 19 Moz of gold and 2.9 Blbs of copper, but
underexplored for gold
0 25 50 75 100Kilometres
SOUTHERN ABITIBI GREENSTONE BELT
OVER 100 YEARS OF MINING HISTORY
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Initial production
End of Mining(2.5 Blbs Cu &
11 Moz Au)
Falco acquires properties(Sep 2012)
Discovery of Horne Mine
Digitization & compilation of Horne historical drill results
(Aug 2013)
NI 43-101 Horne 5 resource estimate
(Mar 2014)
1923 1927 1976 1985 2012 2013 2014
Remnant mining(102,000 oz Au)
HORNE PROJECT
40 YEARS LATER “The year 1923 will long be remembered in Canadian mining lore as the year of the rush to Rouyn”
Leslie Roberts, Noranda
2015 2016
Confirmation Drilling Program at
Horne 5
New resource update and initial preliminary economic assessment
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City of Rouyn-Noranda
Glencore Smelter
Horne Mine
Quemont Mine
Falco Surface Rights
Horne West
Horne project located in an Industrial Park
HORNE PROJECT
LOCATED NORTH OF THE CITY OF ROUYN-NORANDA
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HORNE PROJECT
2016 RESOURCE ESTIMATE
2300m
Resource estimate based on:
4,384 underground drill holes at 15 spacing (305,788m) drilled by Noranda
18 new confirmation drill holes (17,300m) drilled by Falco in 2015
2,000m vertical extent, 500m to 800m in width and a thickness varying from 7 to 120m
44% of the Indicated mineral resources are located between Level 17 and Level 33, which are accessible with the current shaft depth.
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ENV_B
ENV_C
ENV_D
Exchange Rate: CAD/USD = 1.27 , see resource notes in appendix
HORNE PROJECT
NEW 2016 RESOURCE ESTIMATE
Resource Class
Cut-off (NSR $C)
Tonnes (Mt)
AuEq (g/t)
Au (g/t)
Ag (g/t)
Cu (%)
Zn (%)
Contained AuEq (Moz)
Contained Au (Moz)
Contained Ag (Moz)
Contained Cu (Mlbs)
Contained Zn (Mlbs)
> 50 82.2 2.53 1.59 14.49 0.18 0.90 6.694 4.212 38.293 328.1 1,638.4 > 55 74.1 2.64 1.66 14.87 0.19 0.94 6.273 3.959 35.397 306.2 1,531.8 > 60 66.0 2.74 1.74 15.26 0.19 0.97 5.823 3.691 32.378 283.1 1,412.1 > 65 58.3 2.86 1.82 15.60 0.20 1.00 5.361 3.418 29.273 260.4 1,284.8 > 70 51.1 2.98 1.91 15.93 0.21 1.02 4.893 3.142 26.163 237.7 1,152.6
Indicated > 75 44.2 3.11 2.01 16.20 0.22 1.04 4.421 2.865 23.048 215.2 1,017.0 > 80 38.0 3.25 2.12 16.46 0.23 1.06 3.962 2.592 20.086 193.4 886.7 > 85 32.3 3.39 2.25 16.69 0.24 1.07 3.525 2.332 17.331 173.0 761.7 > 90 27.5 3.54 2.37 16.88 0.25 1.08 3.129 2.095 14.902 154.0 652.4 > 95 23.3 3.70 2.50 17.04 0.27 1.09 2.775 1.878 12.780 136.8 558.6
> 100 19.7 3.86 2.64 17.25 0.28 1.09 2.452 1.679 10.948 121.1 474.3 > 50 19.2 2.62 1.72 22.47 0.21 0.56 1.616 1.060 13.841 86.6 237.2 > 55 16.6 2.78 1.85 23.78 0.21 0.57 1.483 0.985 12.692 76.6 208.6 > 60 14.5 2.92 1.97 24.99 0.21 0.57 1.367 0.920 11.688 68.6 183.0 > 65 12.7 3.08 2.10 26.26 0.22 0.57 1.254 0.855 10.705 61.7 158.1 > 70 10.9 3.25 2.25 27.60 0.23 0.55 1.139 0.788 9.670 54.7 133.1
Inferred > 75 9.1 3.47 2.46 28.48 0.24 0.53 1.013 0.716 8.307 47.5 106.1 > 80 7.6 3.71 2.69 28.92 0.25 0.50 0.904 0.655 7.055 41.5 83.4 > 85 6.4 3.94 2.91 29.77 0.26 0.47 0.814 0.601 6.146 36.4 67.1 > 90 5.4 4.21 3.15 30.82 0.27 0.46 0.733 0.549 5.372 32.0 54.9 > 95 4.8 4.42 3.35 31.48 0.27 0.45 0.678 0.514 4.835 28.9 47.4
> 100 4.3 4.60 3.51 32.28 0.28 0.45 0.636 0.485 4.460 26.6 42.6
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ENV_B
ENV_C
ENV_D
HORNE PROJECT
LONGITUDINAL & CROSS SECTION OF THE DEPOSIT
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ENV_B
ENV_C
ENV_D
HORNE PROJECT
LONGITUDINAL & CROSS SECTION OF HIGH GRADE ZONES
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ENV_B
ENV_C
ENV_D
HORNE PROJECT
HIGH GRADE ZONES AT C$65 NSR
Resource Class Zone
Tonnes (Mt)
AuEq (g/t)
Au (g/t)
Ag (g/t)
Cu (%)
Zn (%)
Contained AuEq (Moz)
Contained Au (Moz)
Contained Ag (Moz)
Contained Cu (Mlbs)
Contained Zn (Mlbs)
ENV_A 36.6 2.59 1.51 15.93 0.17 1.15 3.053 1.780 18.768 141.2 931.5 ENV_B 0.1 2.23 2.13 -- 0.06 0.02 0.010 0.010 -- 0.2 0.1 ENV_C 0.1 2.75 2.65 -- 0.06 0.03 0.011 0.011 -- 0.2 0.1 ENV_D -- -- -- -- -- -- -- -- -- -- --
Indicated HG_A 6.6 3.12 2.15 15.71 0.12 1.09 0.664 0.458 3.345 18.0 159.2 HG_B 10.9 3.10 2.15 15.48 0.30 0.54 1.083 0.754 5.416 71.9 130.6 HG_C 2.2 3.79 3.17 8.95 0.24 0.28 0.263 0.220 0.621 11.3 13.1 HG_D 1.8 5.48 3.79 21.30 0.46 1.36 0.312 0.216 1.210 18.0 53.1 HG_E 0.4 3.30 2.60 11.82 0.32 0.13 0.047 0.037 0.167 3.1 1.2
ENV_A 11.8 3.10 2.08 27.89 0.23 0.59 1.179 0.789 10.593 59.3 154.6 ENV_B -- -- -- -- -- -- -- -- -- -- --ENV_C -- -- -- -- -- -- -- -- -- -- --ENV_D 0.9 2.70 2.36 4.09 0.12 0.19 0.075 0.066 0.114 2.4 3.6
Inferred HG_A -- -- -- -- -- -- -- -- -- -- --HG_B -- -- -- -- -- -- -- -- -- -- --HG_C -- -- -- -- -- -- -- -- -- -- --HG_D -- -- -- -- -- -- -- -- -- -- --HG_E -- -- -- -- -- -- -- -- -- -- --
Exchange Rate: CAD/USD = 1.27 , see resource notes in appendix
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HORNE PROJECT
HORNE 5 PRELIMINARY ECONOMIC ASSESMENT TEAM
Integrator & Mill Design Integrator for PEA Document Mill Design Economical Model Revision
Geology & Mining Engineering 43-101 Resource Report Block Model Mine Design Mine Operation Opex & Capex
Mine Infrastructures Headframe and Shaft Design UG Ore Handling Design UG Electricity
Geotechnics, Hydrogeology & TMF Geotechnical Review & Tests Hydro-geology Tailings Management Facilities
Environment & Surface Infrastructures Baseline Study and Environmental
Impact Legislation (MDDELCC & ACCE) Community & Social Impact
Luc Lessard, Eng.
Francois Vezina, Eng., MBA, Mine Development – Director, Osisko Mining Group Former Mine Manager Osisko and Agnico-Eagle; Technical Services Manager for Agnico-Eagle (LaRonde II, Pinos Altos, Kittilä)
Christian Laroche, Eng., Processing & Metallurgy – Director, Osisko Mining Group Metallurgical engineer with 15 years experience in plant design, engineering, feasibility, construction and commissioning
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HORNE PROJECT
HORNE 5 PEA STATUS & DEADLINES
• Resources model – InnovExplo• Mine planning – InnovExplo• Production and development sequence• Opex and Capex cost• Metallurgical process• Surface infrastructures
COMPLETED
• Data collection • Trade-off mine access • Mine infrastructures• Rock mechanics recommendation• Stope design – Golder• Infrastructures
IN PROGRESS
• ECONOMIC ANALYSIS (Q2)• REPORT (Q2)
EXPECTED
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HORNE PROJECT
$100M+ OF EXISTING INFRASTRUCTURE
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COMPARABLE MINE ANALYSIS
SHAFT ALTERNATIVES
LaRonde (60m)
Westwood (85m)
Existing Shaft Dimension → 6.5m x 4.4m Skip → Loading capacity of 31 000 Kg Hoisting capacity → 10 000 tpd Ore + 2000 tpd Waste Production Hoist → Double Drum 21 feets ~8000hp
Horne 5 (86.5m)
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Goldex(Agnico-Eagle)
Young-Davidson(AuRico)
LaRonde(Agnico Eagle)
Horne 5 **(Falco)
Resource Grade (g/t AuEq) 1.8 2.8 5.1 2.9
Mining Method Long hole Transverse long holeLongitudinal Retreat /
Transverse Open Stoping
Transverse long hole **
Depth (m) 800 - 1,500 750 - 1,500 2,000-3,000 600 - 2,300Stope Size 15-38 x 30 x 50 20-25 x 20 x 30 5-25 x 15 x 30 38 x 15 x 15 **Mining Rate 5,100 tpd 8,000 tpd * 7,200 tpd >10,000 tpd **Specific Gravity 2.8 2.69 3.3 3.45Mining Dilution 15% 20% 10%-20% < 4%Operating Cost/NSR $41/t * $53.50/t * $95/t Under review
Annual Production (koz) 71,000 * 200,000 * 230,000 * Under review
* Projected life-of-mine (LOM)** Horne 5 tonnes and grades per 43-101 report; balance is conceptual
Horne 5 $65 NSR Cutoff in Maiden 43-101 Resource Estimate Under Review
Source: Company website and filings
COMPARABLE MINE ANALYSIS
HIGH MARGIN POTENTIAL – HIGHLY MECHANISED
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Highly Prospective Land in a Top Jurisdiction
13 former mines on 740 km2 of Falco properties Over 80 years of data archives Great land package with several high potential green and
brown field prospects
LAND PACKAGE
DOMINANT POSITION IN ESTABLISHED CAMP
Balmoral 700 km
Lake Shore Gold 182 km
Niogold 125 km
Eastmain Resources 125 km
Eagle Hill 124 km
St. Andrews Goldfields 120 km
Integra Gold 30 km
Falco Resources 740+ km
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Background
Previously Untested
Cu-Zn-Au property, located 25km northwest of Rouyn-Noranda
One of the most significant VMS properties in the Camp
Lithogeochemically similar to Horne Complex rocks
Falco identified near-surface conductors related to stratigraphy with the chemical characteristics of Horne Complex
Over 2km of laterally extensive exhalative sequence, akin to VMS systems
Several Zn-rich anomalies
Consistent with lateral placement to VMS mineralization
Distribution Map of High Probability “Horne Type” Samples
Rimo
Horne Complex
RIVIERE MOUILLEUSE (RIMO)
SIMILAR SIGNATURE TO HORNE
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Potential to increase Mineral Resources in the Horne Complex
11 gold targets within the shadow of the old mines Identified potential Horne West extension at depth Targeting 3 zones initially
HORNE 5 PLUS PROGRAM
ADDITIONAL TARGETS IN THE HORNE COMPLEX
2015
2016
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Horne West
Au g/t
Horne 5Deposit
HorneMine
Possible Extension
HORNE 5 PLUS PROGRAM
NEAR SURFACE TARGETS – QUEMONT EXTENSIONS
Quemont level plan 200 ±300m 100m
H5-15-08
H5-15-07
2.7 g/t Au, 13.0 g/t Ag, 0.1% Cu, 1.9 % Zn / 55.5m
4.5 g/t Au, 27.1 g/t Ag, 0.3% Cu, 11.9% Zn / 13.15m (non continuous – stope)
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Horne West
HORNE 5 PLUS PROGRAM
NEAR SURFACE TARGETS – QUEMONT TARGET AREA
?
QUEMONT PRODUCTION
SHAFT
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FALCO – A QUALITY CANADIAN GOLD DEVELOPER
VALUE GAP – WHERE DOES HORNE 5 FIT?PRE-PRODUCTION ASSETS OVER 5 M OZS & CAPEX BELOW $1BN
Company Country Asset EV Resources EV / Resources CAPEX(name) (US$mm) (mmoz Au) (US$/oz) (US$mm)
Pretium Canada Brucejack $618 20.1 $31 $747TMAC Canada Hope Bay $285 5.9 $48 $175Sabina Canada Back River $81 7.2 $11 $297Kaminak Gold Canada Coffee $84 4.9 $17 $317First Mining Finance Canada Springpole $83 8.1 $10 $438Victoria Canada Eagle $30 6.4 $5 $411Canadian Average $197 $20
Asanko Gold Ghana Asanko $294 9.4 $31 $295Carpathian Gold Romania Rovina Valley $264 9.0 $29 $509Gold Road Australia Yamarna $150 6.1 $25 $286Continental Gold Colombia Buritica $105 9.0 $12 $390True Gold Burkina Faso Karma $75 4.5 $17 $132Belo Sun Brazil Volta Grande $59 6.9 $9 $298Amara Cote d'Ivoire Yaoure $33 9.4 $4 $447Midas Gold USA Stibnite $27 6.5 $4 $970Lydian Armenia Amulsar $19 5.1 $4 $370Orezone Gold Burkina Faso Bombore $16 5.1 $3 $250Exeter Chile Caspiche $13 25.3 $1 $279ROW Average $96 $12
FALCO RESOURCES CANADA HORNE 5 $27 6.6 $4
Note: Companies with market capitalizations below US$10mm or without a CAPEX figure were not included in the analysisNote 2: Projects which are not controlled by producers were included in the analysisSource: BMO Capital Markets, Company filings, Factset, SNL
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CORPORATE TIMELINE – ON THE ROAD TO FEASIBILITY
First Half of 2017
• Full Feasibility Study
•Construction Decision
2016
• Initiate dewatering program
•Access to Underground
2nd
Quarter 2016
• Initial PreliminaryEconomicAssessment
•QuemontExtension & RIMO follow-ups
November2015 -
January 2016
•Metallurgy Results
•New 43-101 Resource Estimate
Summer & Fall 2015
•5,000 meter program on RIMO
•7,800 meter program on Horne 5 plus
•Metallurgy•Hydrology•Geotechnical•Environment•Engage with
community and all stakeholders
January to October
2015
•17,150 meters Confirmatory Drilling Program
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Sean Roosen, Chairman Chairman & CEO of Osisko Royalties
Mario Caron, Lead Director Mining executive with over 35 years of experience in
the mining industry
Luc Lessard, President & CEO, Director Former COO of Canadian Malartic Partnership Former COO and Senior Vice-President of Engineering
& Construction for Osisko Mining Former VPt of Engineering & Construction for Iamgold Former Executive Director of Engineering &
Construction for Cambior
Helene Cartier, Director Former VP Environment and Sustainable
Development at Osisko Mining Corporation
Jim Davidson, Director Co-Founder of Falco Resources Former CFO of Western Minerals Group
Claude Ferron, Director Former COO of Xstrata Copper Canada
Paul Henri-Girard, Director Former VP of Canadian Operations at Agnico Eagle
Luc Lessard, President & CEO, Director
Vincent Metcalfe, CFO Former mining investment banker
Claude Bernier, Exploration Manager Over 40 years of experience on various exploration projects
Claude Léveillée, Vice-President Community Relations & Human Resources Former Corporate Director, Human Resources/Organizational
Development at Agnico Eagle Mines
SENIOR LEADERSHIP TEAM
Board of Directors Officers
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Head Office Falco Resources Ltd.1100, avenue des Canadiens-de-MontréalBureau 300Montréal, QC H3B 2S2Tél. : +1.514.905.3162Toll Free : +1.888.915.2009Courriel : [email protected]
Investor InquiriesVincent Metcalfe, CFOTel: +1.514.905.3162Email: [email protected]
CONTACT US
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APPENDIX
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17,150m surface drill program 9 holes, 9 wedge holes Metallurgical testing Updated NI 43-101
Primary objectives of confirmation drilling: Upgrade resource category from Inferred to
Indicated Confirm metallurgical parameters (improve
payability) Confirm and increase level of data with
regards to specific gravity Confirm historic silver grades of >15 g/t
N S
HORNE PROJECT – COMPLETED IN 2015
CONFIRMATORY DRILL PROGRAM – HORNE 52300m
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HORNE PROJECT– COMPLETED IN 2015
CONFIRMATORY DRILL PROGRAM – RESULTS
(0$NSR) 2015 Confirmation Drilling Results (Weighted average)
Hole_IDFrom(m)
To(m)
Length(m)
Au(g/t)
Ag(g/t)
Cu(%)
Zn(%)
Au_Eq_With Silver(g/t)
Au_Eq_Without
Silver(g/t)
Au(g/t)
Ag(g/t)
Cu(%)
Zn(%)
Au_Eq_Without
Silver(g/t)
2015 vs 2014
% H5-15-01 1,110 1,141 31.2 2.03 10.16 0.46 0.04 3.00 2.85 2.26 0.30 0.10 2.82 0.9%H5-15-01-Atw 1,105 1,142 36.7 0.88 4.51 0.27 0.06 1.45 1.38 2.18 0.35 0.12 2.85 (51.5%)H5-15-02 1,001 1,102 100.9 1.32 29.46 0.11 1.94 2.93 2.48 1.14 0.11 1.19 1.92 29.4%H5-15-02-Atw 1,002 1,089 87.0 1.43 28.61 0.13 1.47 2.82 2.39 1.25 0.12 1.41 2.16 10.6%H5-15-03B 1,248 1,365 116.7 0.50 15.51 0.06 1.00 1.34 1.11 0.79 0.06 0.67 1.23 (9.7%)H5-15-03Dtw 1,255 1,390 134.4 0.55 15.44 0.08 1.10 1.46 1.23 0.82 0.06 0.70 1.28 (3.7%)H5-15-04 1,302 1,327 25.5 0.73 10.27 0.13 0.71 1.45 1.30 0.81 0.11 1.11 1.55 (16.3%)H5-15-04-Atw 1,290 1,320 30.3 0.95 11.05 0.14 1.79 2.26 2.09 0.83 0.12 1.13 1.61 30.1%H5-15-06 1,189 1,243 54.5 1.36 16.16 0.26 0.73 2.43 2.19 1.84 0.29 0.31 2.50 (12.6%)H5-15-06-Atw 1,189 1,247 57.5 1.72 22.50 0.32 0.99 3.11 2.77 1.89 0.28 0.28 2.51 10.2%H5-15-05 1,803 1,896 92.6 1.96 16.14 0.12 0.57 2.71 2.47 2.31 16.08 0.13 0.53 2.81 (12.1%)H5-15-05-Atw 1,800 1,853 53.0 2.49 15.17 0.14 0.70 3.30 3.08 2.16 11.71 0.11 0.40 2.56 20.4%H5-15-08 1,441 1,550 108.9 2.20 14.16 0.30 0.32 3.10 2.88 1.88 0.24 0.39 2.49 16.0%H5-15-08W 1,443 1,550 107.1 2.00 13.13 0.27 0.53 2.93 2.73 1.90 0.26 0.28 2.49 9.7%H5-15-07-A 1,958 1,986 28.0 0.41 17.32 0.10 1.86 1.77 1.51 0.91 0.38 0.13 1.63 (6.8%)H5-15-07-Btw 1,956 1,986 30.0 0.52 18.21 0.12 1.39 1.70 1.42 0.96 0.35 0.13 1.65 (13.6%)H5-15-09-A 1,178 1,223 45.1 1.98 32.57 0.25 1.06 3.43 2.94 1.31 0.17 1.10 2.15 36.9%H5-15-09-Btw 1,177 1,221 43.7 1.38 24.85 0.16 1.06 2.57 2.20 1.22 0.15 1.13 2.05 7.0%
Total 1183.1 1.40 18.12 0.18 0.95 2.45 2.18 1.46 14.49 0.17 0.65 2.09 4.3%
Weighted Average of 2014 Raw Assays within a 15 m radius cylinder around DDH
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HORNE PROJECT – COMPLETED IN 2015
CONFIRMATORY DRILL PROGRAM – HORNE 5
H5 Lo
ngitu
dinal
view
Look
ing N
orth
1 800m
1 200m
600m
1 800m
1 200m
600m
H5-15-03B, 03Dtw
H5-15-01, 01Atw
H5-15-08, 8Atw
H5-15-02, 02Atw
H5-15-09A, 09Btw
ENV-A
ENV-D
H5-15-06, 06Atw
H5-15-07A,07Btw
H5-15-05, 05Atw (nc)
H5-15-04, 04Atw
1 800m
1 200m
600m
ENV-A
HG-B
HG-D
HG-C
HG-E
ENV-B
ENV-D
H5-15-03B, 03Dtw
H5-15-01, 01Atw
H5-15-08, 8Atw
H5-15-06, 06Atw
H5-15-07A,07Btw
H5-15-05, 05Atw (nc)
H5-15-04, 04Atw
HG-A
H5-15-02, 02Atw
H5-15-09A, 09Btw
33
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1110.4m
Mineralized Zones Hole H5-15-01
HORNE PROJECT
2015 DRILL PROGRAM – HORNE 5
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HORNE PROJECT
Mineral Resource Estimate – Resource NotesResource Estimate Notes:1. The effective date of the resource estimate is January 8, 2016. The Independent and Qualified Persons for the Mineral Resource Estimate as required by National Instrument 43-101 are Carl Pelletier, B.Sc., P.Geo. and Vincent Jourdain, P.Eng., Ph.D., both employees of InnovExplo Inc.2. Mineral Resources are not Mineral Reserves and have not demonstrated economic viability. 3. While the results are presented undiluted and in situ, the reported mineral resources are considered by the Qualified Persons to have reasonable prospects for economic extraction. 4. These estimates include four (4) low grade gold-bearing mineralized zones.5. The principal low-grade gold-bearing mineralized zone includes five (5) high-grade gold-bearing zones, one (1) high-grade copper-bearing zone, one (1) high-grade zinc-bearing zone and two (2) high-grade silver-bearing zones.6. Resources were compiled at NSR cut-offs of C$50, C$55, C$60, C$65, C$70, C$75, C$80, C$85, C$90, C$95 and C$100 per tonne. The official base case resource is reported at a C$65 per tonne NSR cut-off. 7. The appropriate NSR cut-off will vary depending on prevailing economic and operational parameters to be determined.8. NSR estimates are based on the following assumptions: exchange rate of $C1.27/$US, metal prices of (all $US): gold $1,165/oz, silver $15.77, copper $2.53/lb, zinc $0.89/lb (One-year trailing average as of December 14, 2015). Net recoveries of 84.0% for gold, 75.3% for silver, 71.8% for zinc and 66.5% for copper. Smelting cost (including transportation) C$7.73 per tonne.9. Gold equivalent calculations assume these same metal prices.10. Inferred resources are separate from Indicated Resources11. The quantity and grade of reported Inferred Resources in this estimate are uncertain in nature and there has not been sufficient work to define these Inferred Resources as Indicated or Measured Resources. It is uncertain if further work will result in upgrading them to an Indicated or Measured mineral resource category.
Resource Modeling Notes:12. Densities within ENV_A were estimated from Noranda drill hole iron assay data and Falco density data using a 3-pass ID2 interpolation method. Limited density data was available for zones ENV_B to D and a fixed density of 2.88 t/m3 was assumed for these zones which represent the median of the available data. 13. Compositing was done on drill hole sections falling within the mineralized zones (composite = 3.0 metres). 14. The resource was estimated using Geovia GEMS 6.7. The estimate is based on 4,411 diamond drill holes (323,087 m). For silver the estimates also uses the results of an exhaustive metallurgical test comprising 2,112 diamond drill holes assayed for silver over a total length of 75,540 meters. A minimum true thickness of 7.0 m was applied, using the grade of the adjacent material when assayed, or a value of zero when not assayed.15. Only the silver interpolation in the Inferred resources does not use the material when not assayed.16. The estimate was based on a three dimensional block model (5x5x5 metre blocks). Within ENV_A. Wireframes of high grade zones were used as hard boundaries to constrain the interpolation of gold, silver, copper, zinc and density into the block model. Interpolation parameters were derived based on geostatistical analysis conducted on 3 metre composited drill hole data. Block grades have been estimated using Inverse Distance Squared (ID2) interpolation method and the mineral resources have been classified based on proximity to sample data and the continuity of mineralization in accordance with CIM best practices. 17. Capping of high grade gold values was done on raw assay data and established on a per zone basis: HG_A: 35 g/t, HG_B: 35g/t, HG_C: 25g/t, HG_D: 35g/t, HG_E: 25g/t, ENV_A: 35g/t, ENV_B: 25g/t, ENV_C: 25g/t, ENV_D: 25g/t and for high grade silver SG_HG:100g/t, HG_D: 165 g/t, ENV_A_SG_Low: 110 g/t, ENV_B: 100 g/t, ENV_C: 100 g/t, ENV_D: 100 g/t. No upper capping was applied to copper and zinc data. 18. Tonnage estimates were rounded to the nearest hundred tonnes. Any discrepancies in the totals are due to rounding effects. Rounding practice follows the recommendations set out in Form 43-101F1. 19. CIM definitions and guidelines were followed in estimating mineral resources. 20. InnovExplo is not aware of any known environmental, permitting, legal, title-related, taxation, socio-political, marketing or other relevant issue that could materially affect the mineral resource estimate. 21. The mineral resources presented herein are categorized as Indicated and Inferred based on geological and grade continuity. A maximum distance to the closest composite of 25 meters was used for indicated Resources. The average distance to the nearest composite is 8.3 meters for the Indicated resources and 35.2 meters for the Inferred resources.22. Metal contained in ounces (troy) = metric tonnes x grade / 31.10348. Calculations used metric units (metres, tonnes and g/t). Metal contents are presented in ounces and pounds.