Newmarket gold corporate presentation jan 20 final
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Transcript of Newmarket gold corporate presentation jan 20 final
2TSX:NMI
Forward-looking StatementsCertain information set forth in this presentation contains “forward-looking statements”, and “forward-lookinginformation under applicable securities laws. Except for statements of historical fact, certain information containedherein constitutes forward-looking statements, which include the Company’s expectations about its business andoperations, and are based on the Company’s current internal expectations, estimates, projections, assumptions andbeliefs, which may prove to be incorrect. Some of the forward-looking statements may be identified by words such as“will”, “expects”, “anticipates”, “believes”, “projects”, “plans”, and similar expressions. These statements are notguarantees of future performance or outcomes and undue reliance should not be placed on them. Forward-lookingstatements are based on the opinions and estimates of management as of the date such statements are made and theyare subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level ofactivity, performance or achievements of the Company to be materially different from those expressed or implied bysuch forward-looking statements or forward-looking information. Although management of the Company hasattempted to identify important factors that could cause actual results to differ materially from those contained inforward-looking statements or forward-looking information, there may be other factors that cause results not to be asanticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actualresults and future events could differ materially from those anticipated in such statements. Accordingly, readers shouldnot place undue reliance on forward-looking statements and forward-looking information. The Company does notundertake to update any forward-looking statements or forward-looking information that are included in thispresentation or incorporated by reference herein, except in accordance with applicable securities laws.
3TSX:NMI
SUSTAINABLE PRODUCER WITH A STRATEGY FOR LONG-TERM GROWTH
RECORD 222,671 oz
FLAGSHIP FOSTERVILLE GOLD MINE
CASH $36.5M (US)
3 AustralianCONSOLIDATED GOLD PRODUCTION
2015 RECORD YEAR
RECORD PRODUCTION 123,095RECORD GRADE 6.11 g/t AuRECORD RECOVERY 88.5%RECORD DRILL INTERCEPT 645g/t Au over 3.5m
CONSOLIDATED COSTSDOWNOPERATING CASH COSTS $US 704/ozALL-IN SUSTAINING COSTS $US 987/oz
Gold Mines
ROBUST AUD$ GOLD PRICE
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NEWMARKET GOLD ADVANTAGE
SUPERIOR INVESTMENT OPPORTUNITY
PEOPLE
Track record of superior value creation
Board and management aligned with shareholders ($12M invested 10% equity ownership)
Experienced management team
Demonstrated operations excellence
OPERATIONS
Three gold mines in Australia, over 220,000 ounces annual production
Strong cash position (US$36.5M1), record low operating cash costs and AISC, prudent capital allocation
Delivering on guidance, focus on free cash flow and growth
Robust AUD$ denominated gold price
DISCOVERIES
Three new mine site gold discoveries close to current infrastructure
Significant resource expansion opportunities at all mines
New Eagle visible gold discovery at Fosterville traced over 600m x 290m and open
Trend to higher consolidated grades and recoveries
GROWTH
Strong potential for organic growth and resource expansion
Deep capital markets relationships, patiently targeting accretive production opportunities
1. As at December 31 2015
5TSX:NMI
Low G&A on a per oz basis: currently US$27/oz vs peers at US$56/oz
Strong share ownership: C$12
million currently invested (10% issued and
outstanding)
Aligned PSU Vesting Plan based on share price performance:
1/3 vest when the price of Newmarket is C$2.25 or greater
1/3 vest when the price is C$3.00 or greater
1/3 vest when the price is C$3.75 or greater
PSUs expire worthless after 3 years (mid-2018), If share price thresholds not met
EXPERIENCED VALUE CREATION TEAM
Raymond Threlkeld Chairman
Douglas Forster President, CEO & Director
Blayne Johnson Executive VP, Director
Lukas Lundin Director
Randall Oliphant Director
Darren Hall Chief Operating Officer
Doug Hurst VP Corporate Development
Robert Dufour Chief Financial Officer
Robert Getz Director
Kevin Conboy Director
Edward Farrauto Director
AdvisorsIan Telfer Capital Markets
Michael Vitton Capital Markets
Mike Vint Technical Advisor
The founders have created over $30 billion in market cap value
ALIGNED WITH SHAREHOLDERS
6TSX:NMI
PRODUCING IN A TOP MINING JURISDICTIONCOSMO/UNION REEF
Location Northern TerritoryOwnership 100%Metals GoldMining UndergroundCapacity 2.0Mtpa Yrs in Production 2.5 Prod. Guidance 60k – 65k ouncesDiscovery Western Lodes Discovery
MAUD CREEK GOLD PROJECT
Location Northern TerritoryOwnership 100%Metals GoldMining Open Pit + UndergroundStage PEAM&I Resources 871,000 ozs @ 3.5 g/t1
1. See slide 26 for details on Mineral Resource and Reserve details 2. see Non-IFRS Disclosure p.33
FOSTERVILLE GOLD MINE
Location Bendigo, VictoriaOwnership 100% (2% Royalty)Metals GoldMining UndergroundCapacity 850Ktpa Yrs in Production +10 Prod. Guidance 110k – 120k ouncesDiscovery Eagle Fault Zone
STAWELL GOLD MINE
Location Stawell, VictoriaOwnership 100% (1% Royalty)Metals GoldMining UndergroundCapacity 1.0Mtpa Yrs in Production +30Prod. Guidance ~35k ouncesDiscovery Aurora B Gold Zone
2016E CONSOLIDATED GUIDANCE
Production: 205,000 - 220,000 ouncesOperating Cash Cost2: US$650 - US$725 per ounceAll-in sustaining costs2: US$950 - US$1,025 per ounce
AUSTRALIA
BIG HILL GOLD PROJECT
Location VictoriaOwnership 100%Metals GoldMining Open PitStage PermittingM&I Resources 160,000 ozs @ 1.68 g/t1
Producing Mine
Development Project
Mine site Discovery
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STRONG FINANCIAL POSITION
Cash Balance ($M)1 US$36.5
Working Capital (incl. Cash)($M)1 US$23
Convertible Debt ($M)2 US$23.5
TSX:NMI OTCQX: NMKTF
1. As at December 31, 2015 2. $23.5M of 8% convertible unsecured debentures due April 30, 2018 and convertible at ~C$1.02/share for up to 33.9 million shares of Newmarket 3. Excludes 11,438,820 warrants which have a strike price of $9.16. 4. 4.2 Million warrants at $1.63 expiring on Feb 27, 2016 and 992,000 broker warrants at $1.25 expiring on January 10, 2017
Balance Sheet
Issued and Outstanding (M) 135.9
Options (M) 11.4
Performance Share Units (M) 3.7
Warrants3,4 5.2
Fully Diluted (Excluding Debenture) (M) 156.3
Luxor Capital Group LP 39%
Management/Board (basic) 10%
Capital Structure & Ownership
Average Daily Volume90 day 420,000
CASH$36.5 Million
Convertible Debt$23.5 Million
$67.5$74.2
$94.9
$126.3$121.1
2013A 2014A 2015E 2016E 2017E
Source: 2013-2014 Actuals, 2015E-2017E – Factset Consensus
Consensus Estimated Operating Cash Flow (US$ Millions)
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Newmarket - Key Investment Metrics
1. As at December 31, 2015, (all figures are in United States (“U.S.”) dollars, unless stated otherwise) 2. Financial information as at September 30, 2015 (Full year Financial States available March 4, 2016) 3. All market data is as at Jan 15, 2016, production and cash flow based on 2016 consensus estimates. Source: public market information and company disclosure as at Jan 15, 2016
Record Full Year 2015A Production 222,671 oz1
Record operating cash costs $704/oz1
Record All-In Sustaining costs $987/oz1
Cash $36.5 Million1
Financial details below ending Sept 30, 2015
Revenue $199.6 Million2
Operating cash flow (up 34.8% year over year) $65.9 Million2
Net income $17.5 Million2
Earnings per share $0.142
Ev/oz production (2016E) $663/oz3
Ev/oz production (2016E) peer group $1,897/oz3
Price / 2016E CFPS (ratio) 1.7x3
Price / 2016E CFPS (ratio) peer group 4.2x3
U.S. Dollars unless stated otherwise
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Opportunity Comparison
Production (2016E Guidance)1 205,000-220,000/oz 70,000 - 180,000/oz
P/CF (2016E)2 1.7x 4.1x
EV/2016E Production2 $663/oz $1,676/oz
EV/Consensus 2016E EBITDA2 1.5x 3.4x
All in Sustaining Costs (“AISC”)3 US$987/oz US$1,040/oz
Cash Costs US$704/oz US$705/oz
G&A Costs4 US$27/oz US$56/oz
Foreign Exchange 0.69 0.69
Reserve Life Index4 4.3 years 5.3 years
Newmarket Gold Canada, Abitibi
1. 2016 production guidance is the low to high range for peers and high end for Newmarket 2. All market data is as at Jan 15 2016; production and cash flow based on street estimates 3. AISC and cash costs are most recently reported for 2015 YTD, See Non-IFRS Disclosures, All-In Sustaining Costs per Ounce (“AISC”) includes Corporate G&A, on page 33 of this presentation 4. Based on G&A, production and reserves as at or for the year ended December 31, 2014
Newmarket GoldCurrent Market Capitalization
Peer Group AvgCurrent Market Capitalization
C$241 million
C$428 million
Newmarket Value Gap
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Source: FactSet, Bloomberg, company disclosure, available equity research.
Averages exclude Newmarket.
Peer Group Comparison
All comparison metrics present an opportunity for significant valuation re-rating with Newmarket Gold
EV / 2016E Prod. (US$/oz)
Price / Consensus 2016E CFPS (ratio) EV / Consensus 2016E EBITDA (ratio)
$663
$1,183 $1,401
$1,525 $1,576 $1,840
$1,955 $2,202 $2,204
$2,484 $2,601
Average:
$1,897
1.7x
2.5x 2.6x
3.1x 3.2x 3.7x
4.6x 5.1x
5.9x
6.8x 7.3x
Average:
4.2x
1.5x 1.6x 1.7x
3.2x 3.6x
4.1x 4.3x 4.6x 4.7x
5.8x
10.1x
Average:
4.4x
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Proven Ability to Decrease Costs Operating cash costs have decreased 40%
since 2012 to 2015
All-in sustaining costs have decreased 41%since 2012 to 2015
Ore grade and gold recoveries increasing
2015A operating cash costs of US$704/oz and AISC of US$987/oz, significantly below guidance
Management expects continued optimization efforts to lead to further declines in operating costs and AISC
All-in sustaining cash costs per oz1Operating cash costs per oz1
$1,236
$987 AISC$950 –$1,025
$905
$704OCC
$650 –$725
2014 2015 2016 Cost Guidance
Note: See Non-IFRS Disclosures, All-In Sustaining Costs per Ounce (“AISC”) includes Corporate General and Administrative Expenses on page 33 of this presentation.
Prudent cost reductions continued and focused on rationalizing staff, consumables including cyanide, fuel & lubricants and power
2014 – 2015 (12 month) reductions
2015 Cost Reduction Programs
Fosterville AUD $30/oz
Cosmo AUD $50/oz
Stawell AUD $80/oz
US$
12TSX:NMI
48,876
65,903
First 9M, 2014 First 9M, 2015
Operating Cash Flow
Strong Operating Cash Flows
Newmarket generated operating cash flow of $65.9M in the first 9M of 2015 a 34.8% increase vs the first 9M of 2014
Australian dollar Benefits
AUD:USD averaged $0.90 in 2014 and is approximately $0.69 (as at Jan 20,
2016)
Average realized gold price in the first 9M of 2015 was US$1,164 versus US$1,292 during the same period last year (Spot AUD denominated Gold Price Currently AUD$1,600)(as at Jan 20, 2016)
Strong operating cash flow despite an average realized gold price drop of 14.8% from 2014 to 2015
Strong Operating Cash Flow Generation
US$ Millions
Note: See Non-IFRS Disclosures, All-In Sustaining Costs per Ounce (“AISC”) includes Corporate General and Administrative Expenses on page 33 of this presentation.
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29,045 29,135 29,648 31,519
Q4/14 Q1/15 Q2/15 Q3/15 Q4/15
Record 2015 production, grade and recoveries
Grades have been increasing at depth at Lower Phoenix
New high grade Eagle Fault discovery
161g/t gold over 4.9m & 645g/t gold over 3.5m
Lower Phoenix and Eagle Gold Zones have strong potential to increase production profile
Newmarket’s Flagship Mine with Substantial Upside Potential
Operation Profile 2014A 2015A2016Guidance
Gold Production (kozs) 105.3 123.1 110-120
Gold grade (g/t) 4.56 6.11 n/a
Recovery (%) 86.4 88.5 n/a
Operating Cash Costs (US$/oz)
$737 n/a $500-$575
AISC (US$/oz) $1,186 n/a1 n/a1
Production Profile
Fosterville Gold Mine (110,000 – 120,000 oz)
Go
ld P
rod
uct
ion
oz
32,793
1. 2016 Consolidated Company AISC guidance is US$950 – US$1,025/oz and operating cash cost guidance is US$650 – US$725/oz (see Non-IFRS Disclosure p.33)
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LegendDrill InterceptsColoured by Gram-Metre
Mined Stopes Reserves Mineralization >30 5 - 15
Mined Development Mine Design Target Trend 15 – 20 1 - 5
12.8 g/t Gold over 8.5m
24.8 g/t Gold over 2.5m
16.4 g/t Gold (Visible Gold) over 16.5m
73.2 g/t Gold (Visible Gold) over 7.8m
385 g/t Gold (Visible Gold) over 3.4m
Fosterville Mine (Eagle Gold Zone) (DRILLING ONGOING)
View looking North
West East
5.3 g/t Gold over 5.9m
Schematic Cross Section
286 g/t Gold (Visible Gold) over 2.8m
11.1 g/t Gold over 4.9m
42.9 g/t Gold over 3.7m
161 g/t Gold over 4.9m
100m extension –total strike now 600m, open down plunge
645 g/t Gold over 3.5m
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20,112 20,612
17,073
12,672 12,898
Q4/14 Q1/15 Q2/15 Q3/15 Q4/15
Optimization ongoing (grade, recovery, costs)
Strong mineral potential at depth (Sliver and Eastern Deep zones)
New discovery - Western Lode gold zone (potential to open a new mining front)
Newmarket’s Newest Producing Mine
Operation Profile 2014A 2015A2016 Guidance
Gold Production (kozs)
77.7 63.3 60-65
Gold grade (g/t) 3.14 2.99 n/a
Recovery (%) 88.9 90.7 n/a
Operating Cash Costs (US$/oz)
$1,000 n/a $720-$795
AISC (US$/oz) $1,2631 n/a1 n/a1
Cosmo Gold Mine (60,000 – 65,000 oz)
Cosmo Gold Mine
Gold
Pro
duction o
z
Production Profile
1. 2016 Consolidated Company AISC guidance is US$950 – US$1,025/oz and operating cash cost guidance is US$650 – US$725/oz (see Non-IFRS Disclosure p.33)
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Cosmo Mine (Expansion Opportunity)
Cosmo’s drill intercepts and New Western Lodes Highlight intercepts include:
Western Lodes 7.42 g/t gold over 4.3m, 6.59 g/t gold over 6.4m (potential for identifying grades and widths amenable for underground mining and in close proximity to existing infrastructure)
Cosmos Inner Dolerite 5.33 g/t gold over 7.54m
Cosmos central internal metasediments 6.79 g/t gold over 6.15m
18 drill holes completed on Western Lodes as of Dec 31/15
Located only 160m away from current development/infrastructure
Potential to open new mining front on the Western limb
Drill results at Cosmo have identified resource expansion potential
Maud Creek Gold Deposit (Northern Territory)
(M&I mineral resource 871,000 ounces grading 3.50g/t gold located
110km from the union reef mill)1
Phase I Preliminary Economic Assessment - Q1/160 100
metres1. See additional disclosure notes on slide 26
Western
Lode
Target
SliverTarget
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Cosmo Mine (Expansion Opportunity at depth)
5.85g/t gold over 5.7 m
10.25 g/t gold over 2.8 mInc. 6.4 g/t gold over 3.1 m
14.79 g/t gold over 11.4 m, 14.07 g/t gold over 6.4 m
The Cosmo Deeps drilling has identified mineralization approximately 200 m down plunge from the base of current resources
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9,639 9,9299,277
8,352 8,762
Q4/14 Q1/15 Q2/15 Q3/15 Q4/15
Near surface, open pit projects: Big Hill, Brummigans
New discovery at Aurora B target
6 drill holes completed on Aurora B as of Dec 31/15
Aurora B gold zone currently traced 140m along strike and 140m down dip (open for expansion)
Highlight intercept: 17.80 metres @ 7.06 g/t gold
A Mature Operation with Potential to Extend Mine Life
Operation Profile 2014A 2015A2016 Guidance
Gold Production (kozs) 39.1 36.3 ~35,000
Gold grade (g/t) 1.67 1.56 n/a
Recovery (%) 78.8 80.8 n/a
Operating Cash Costs (US$/oz)
$1,151 n/a $900-$975
AISC (US$/oz) $1,1931 n/a1 n/a1
Stawell Gold Mine (Approximately 35,000 oz)
Gold
Pro
duction o
z
Production Profile
1. 2016 Consolidated Company AISC guidance is US$950 – US$1,025/oz and operating cash cost guidance is US$650 – US$725/oz (see Non-IFRS Disclosure p.33)
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Stawell Mine Exploration (Expansion Opportunity)
Longitudinal Projection of Stawell Gold Mine Showing East Flank Targets
BrummigansBig Hill Surface Opportunity
WEST FLANK
Past Production of 2.3 Million ounces Gold
Past old
8.03 g/t gold over 8.8 m
EAST FLANK
7.06 g/t gold over 17.80 m
Discovery Zones, no production, close to current infrastructure
(approximately 150m from Aurora B)
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PEOPLEFounders have created over $30 billion of shareholder value Shareholder alignment C$12M invested, 10% equity ownership, performance share units vest based on share price performance
Demonstrated operational excellence
OPERATIONSThree operating mines in Australia with over 220,000 ounces of annual gold production, strong cash position, (US$36.5M) with 2015 consolidated record low operating cash costs $704 and AISC $987
Trend to higher consolidated grades and recoveries
GROWTHNewmarket’s vision is to become the next quality intermediate gold producer with annual production of 400-500kozs
Focusing on internal organic growth and a prudent accretive acquisition strategy
Newmarket Gold Advantage
DISCOVERIESThree new mine site gold discoveries close to current infrastructure with significant resource expansion opportunity – extensive drilling underway
New Eagle visible gold discovery at Fosterville traced over 600m x 290m open down plunge
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Proven Track Record of Success
“Newmarket Gold Inc.’s mission is to deliver exceptional shareholder value through a disciplined approach to acquiring quality, gold production assets and outstanding development
opportunities in politically stable jurisdictions worldwide”
Public Sold
Principals have founded, managed and sold mining companies with a combined market value of approximately $30 billion
Douglas ForsterPresident & CEO, Director
T: 604-559-8040E: [email protected]
www.newmarketgoldinc.com
Contact Us
Ryan KingVice President, Corporate Communications
T: 778-998-3700E: [email protected]
Laura LeporeDirector, Investor Relations
T: 416-728-3707E: [email protected]
TSX:NMI
24TSX:NMI
Analyst Coverage1 and Liquidity Since July
Firm GMP Securities Anonymous R. James TD Securities RBC Capital CIBC Canaccord Cormark Scotia
Shares Traded
9.8 Million 7.0 Million 4.4 Million 5.1 Million 2.6 Million 2.6 Million 1.8 Million 1.1 Million 1.5 Million
Total shares traded 48.1 Million90 Day Avg Volume 420,000 (as of Jan 15 2016)
BrokerDate2015
Target Price
TargetRating
FY15EProductionOz (000’s)
FY15ECash Costs
FY15EAISC
CAPEX NAV
Beacon Securities Nov 10 $2.75 Buy _ $704 $1,139 $29.5 $336
Cormark Securities Nov 23 $1.85 Buy 220 $710 $1,017 _ $316
GMP Oct 27 $2.60 Buy 234 $680 _ $55 $351
Laurentian Bank Dec 11 $2.00 Buy 222 $697 $948
Raymond James Nov 27 $2.20 Buy 222 $709 $1,012 $58 $360
RBC Capital Nov 9 $2.00 Buy 229 $696 $991 $58 $391
Rodman & Renshaw Dec 8 $3.00 Buy 217 $725 $995 $47 _
PI Financials Jan 13/16 $2.65 Buy 225.8 $699 $944 $60.1 $360
Average $2.38 Buy
1. Factset consensus Dec 21, 2015
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0.20
0.40
0.60
0.80
1.00
1.20
$1,000
$1,200
$1,400
$1,600
$1,800
$2,000
Dec 2010 Dec 2011 Dec 2012 Dec 2013 Dec 2014 Dec 2015
AU
D / U
SDG
old
Pri
ce (
$/o
z)
Gold (US$/oz) (LHS) Gold (A$/oz) (LHS) AUD / USD (RHS)
Appendix: Australian Gold Producers - Increasing
disconnect from AUD to USD gold price leaves Australian producers in stronger position comparatively…
Source: RBC Capital Markets September 30, 2015
26TSX:NMI
$400
$800
$1,200
$1,600
$2,000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Go
ld S
po
t (i
n A
UD
$)
Historical Gold Price (in AUD$)
Appendix: Gold has remained strong in AUD terms
Source: FactSet, Bloomberg, company disclosure, available equity research
Current Spot Gold:AUD$1,590/oz(Jan 4, 2016)
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Appendix: Mineral Reserves and Resources
Inferred Resources Tonnes (Mt) Grade Au (g/t) Au (kozs)
Fosterville 5.8 3.72 699
Cosmo 1.0 2.72 84
Stawell 0.8 3.07 77
Burnside 6.9 1.47 323
Maud Creek 4.2 2.55 344
Union Reefs 4.3 2.23 305
Pine Creek 2.5 2.34 191
Inferred Resources 31.3 2.48 2,024
M&I Resources (incl.) Tonnes (Mt) Grade Au (g/t) Au (kozs)
Fosterville 16.6 4.18 2,151
Cosmo 5.0 3.35 539
Stawell 4.2 1.80 243
Burnside 7.5 1.38 335
Maud Creek 7.7 3.50 871
Union Reefs 3.0 2.43 236
Pine Creek 8.4 1.41 379
M&I Resources (incl.) 52.5 2.82 4,754Source: Crocodile Gold March 31, 2015 press release announcing 2014 year-end mineral reserves and mineral resources
2P Reserves Tonnes (Mt) Grade Au (g/t) Au (kozs)
Fosterville (Under Ground) 1.02 5.55 182
Fosterville (CIL Residues) 0.4 8.89 126
Cosmo 4.2 3.57 148
Stawell 0.8 1.50 181
Burnside 0.2 1.93 10
Maud Creek 1.1 5.40 184
Union Reefs 0.3 4.40 42
Pine Creek 1.3 1.55 62
2P Reserves 9.2 3.15 935
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Appendix: Fosterville Mine New Discoveries Eagle Fault, highlight intercepts include;
386 g/t Au (1) over 9.15 m (ETW 3.35 m) in hole UDH1238 (Including 5,283 g/t Au(1) over 0.6 m), 268 g/t Au (1) over 7.85 m (ETW 2.77 m) in hole UDH1255 (Including 5,276 g/t Au(1) over 0.35 m)and 73.15 g/t Au (1) over 8.7 m (ETW 7.78 m) in hole UDH1240A. Visible Gold has also been observed in the upper parts of Eagle zone in underground exposures.
Lower Phoenix Footwall, intercepted 77.87 g/t Au(1) over 6.3 m (ETW 4.33 m)in hole UDH1219A
East Dipping Fault, intercepted 246 g/t Au (1) over 0.90 m (ETW 0.81 m) in hole UDH1298 and 34.47 g/t Au over 5.1 m (ETW 4.09 m) in hole UDH1294
Kestrel structure returned 5.37 g/t Au over 9.75 m (ETW 5.12 m) in hole UDH1274 and 6.16 g/t Au over 11.05 m (ETW 5.12 m) in hole UDH1122
(1) Visible gold present in drill intercept, ETW - Estimated True Width, for further information on drill results see Newmarket Gold’s press releases dated July 27, 2015 and September 14, 2015 located at www.newmarketgoldinc.com
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Appendix: Cosmo Mine Western Lodes
A number of drill holes have now penetrated the Western Lodes Target.
Drill results for the Cosmo Western Lodes which are outside of the current mine plan include 7.42 g/t gold over 4.3 m (estimated true width 2.85 m) and 6.59 g/t gold over 6.4 m (estimate true width 1.65 m).
Work continues to fully define the potential of the Western Lodes
Target is located only 160 m from current development and has the potential to increase resources at Cosmo and expand the current mine plan to alternative mining areas.
Note: For further information on drill results see Newmarket Gold’s press release dated July 22, 2015 located at www.newmarketgoldinc.com
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Appendix: Cosmo Mine Sliver Lode & Deeps
Development of the Sliver Lode at the Cosmo Mine with additional high grade results including: 14.79 g/t Au over 11.4 m (ETW 11.4 m) in hole CE67518 and 14.07g/t Au over 6.0 m (ETW 5.83 m) in hole CE67522.
Down plunge drilling in the footwall area of the Cosmo deposit, the Cosmo Deeps drill program has identified mineralization approximately 200 m down-plunge from the current base of Mineral Resources at Cosmo. The Cosmo Deeps drilling program was successful and include intercepts such as 5.85 g/t Au over 5.70 m (ETW 4.2 m) in hole CE84099 and 3.09 g/t Au over 6.4 m (ETW 5.0 m) in hole CE840100.
The very encouraging Cosmo Deeps and Sliver drill results have identified an opportunity to drill the down plunge potential of these targets from surface. This program is expected to commence in late 2015 and will cover 2,000 m of drilling to allow for future infrastructure planning for the mine. This drilling is planned to intersect the mineralization around 100 m down plunge from recent Sliver Lode drilling results as well as around 80 m above the intercept in drill hole CE840100. This program has the potential to add significant mineralization extension to the Cosmo deposit.
Note: For further information on drill results see Newmarket Gold’s press release dated September 21, 2015 located at www.newmarketgoldinc.com
Cosmo Deeps
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Appendix: Stawell Aurora B East Flank
New discovery of Aurora B East Flank mineralization is a significant event in the long history of the Stawell mine.
West Flank at Stawell has produced 2.3 million oz gold whereas the East Flank, where the Aurora B discovery has been made has no recorded production.
Drilling on the Aurora B discovery returned high-grade intercepts containing visible gold including: 7.06 g/t gold over 17.80 m (estimate true width 8.3 m).
Additional drilling on this new discovery is on-going.
Note: For further information on drill results see Newmarket Gold’s press release dated July 22, 2015 located at www.newmarketgoldinc.com
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Fosterville Mine Gravity Circuit Addition
The company has now committed to installing a 10 tonnes per hour gravity circuit (Knelson Concentrator) within the secondary (‘Regrind’) grinding circuit (Figure 5) at a cost of US$0.4 million with the installation expected to commence in early 2016 and be operational by the end of Q2 2016.
34TSX:NMI
Appendix: Non-IFRS and Additional InformationNon-IFRS MeasuresNewmarket Gold believes that investors use certain indicators to assess gold mining companies. The indicators are intended to provide additional information and should not beconsidered in isolation or as a substitute for measures of performance in accordance with the International Financial Reporting Standards.“OperationalCash Costs perOunce” is a non-IFRS performance measure which could provide an indication of the mining and processing efficiency at the operations.The Company calculates operating cash costs per ounce by deducting silver sales revenue as a by-product from operating expenses per the consolidated statement ofoperations, then dividing by the gold ounces sold during the applicable period. Operating expenses include mine site operating costs such as mining, processing andadministration as well as royalties, however excludes depletion and depreciation, share-based payments and rehabilitation costs. There are variations in the method ofcomputation of “operational cash costs per ounce” as determined by the Company compared with other mining companies. For more detail on the operational cash costs perounce determination for Crocodile Gold, please visit www.sedar.com or www.newmarketgoldinc.com and review the latest Annual Financial Statements issued on March 19,2014.
“All-In Sustaining Costs per Ounce of Gold (“AISC”) Effective December 31, 2013, the Company has adopted an all-in sustaining cost (“AISC”) performance measure that reflectsall of the expenditures that are required to produce an ounce of gold from current operations. While there is no standardized meaning of the measure across the industry, theCompany’s definition conforms to the AISC definition as set out by the World Gold Council in its guidance dated June 27, 2013. The World Gold Council is a non-regulatory, non-profit organization established in 1987 whose members include global senior mining companies. The Company believes that this measure will be useful to external users inassessing operating performance and the ability to generate free cash flow from current operations. The Company defines AISC as the sum of operating cash costs (per above),sustaining capital (capital required to maintain current operations at existing levels), capital lease repayments, corporate general and administrative expenses, mine explorationwithin the known resources and rehabilitation accretion and amortization related to current operations. AISC excludes capital expenditures for significant improvements atexisting operations deemed to be expansionary in nature, exploration and evaluation related to growth projects, rehabilitation accretion and amortization not related to currentoperations, financing costs, debt repayments, share-based compensation not related to operations, and taxes.
Additional InformationNotes for Page 26: For information regarding mineral resource and reserve estimates, including parameters used to generate the estimates and depletion, please see thetechnical reports titled: NI43-101 TECHNICAL REPORT FOSTERVILLE GOLD MINE, VICTORIA, AUSTRALIA PREPARED FOR CROCODILE GOLD CORP dated March 31, 2015 and;NI43-101 TECHNICAL REPORT – BIG HILL ENHANCED DEVELOPMENT PROJECT AT STAWELL GOLD MINE MINERAL RESOURCES & RESERVES PREPARED FOR CROCODILE GOLDCORP dated June 6, 2014. For the Northern Territory Mineral Reserve Estimates please refer to the technical reports titled: REPORT ON THE MINERAL RESOURCES & MINERALRESERVES OF THE COSMO DEEPS GOLD PROJECT dated March 31, 2015; NI 43-101 TECHNICAL REPORT STAWELL GOLD MINE, VICTORIA, AUSTRALIA PREPARED FOR CROCODILEGOLD CORP dated March 31, 2015; REPORT ON THE MINERAL RESOURCES & MINERAL RESERVES OF THE UNION REEFS GOLD PROJECT dated December 31, 2012; REPORT ONTHE MINERAL RESOURCES & MINERAL RESERVES OF THE PINE CREEK GOLD PROJECT dated December 31, 2012; REPORT ON THE MINERAL RESOURCES & MINERAL RESERVES OFTHE MAUD CREEK GOLD PROJECT dated December 31, 2012 and; REPORT ON THE MINERAL RESOURCES & MINERAL RESERVES OF THE BURNSIDE GOLD AND BASE METALPROJECT dated December 12, 2013.Mineral resources that are not mineral reserves do not have demonstrated economic viability.
Qualified PersonMark Edwards, MAusIMM (CP), MAIG, General Manager, Exploration, Newmarket Gold, is a "qualified person" as such term is defined in National Instrument 43-101 and hasreviewed and approved the technical information and data included in this presentation.