32
JDL Gold and Luna Gold Merger On the Path to Creating a Leading Mid-Tier Gold Producer TSX-V: TREK
JDL Gold and Luna Gold MergerOn the Path to Creating a Leading Mid-Tier Gold Producer
TSX-V: TREK
1
This presentation does not constitute an offering of securities and the information contained herein is subject to the information contained inthe Company's continuous disclosure documents at www.sedar.com.
Forward-looking StatementsThis presentation includes certain statements that constitute "forward-looking statements", and "forward-looking information" within themeaning of applicable securities laws ("forward-looking statements" and "forward-looking information" are collectively referred to as"forward-looking statements", unless otherwise stated). These statements appear in a number of places in this presentation and includestatements regarding our intent, or the beliefs or current expectations of our officers and directors. Such forward-looking statements involveknown and unknown risks and uncertainties that may cause our actual results, performance or achievements to be materially different fromany future results, performance or achievements expressed or implied by such forward-looking statements. When used in this presentationwords such as "will", "will be", "to create", "creating", "intends", "expects", "expected to", "anticipated", "objective", "targeting", "targeted","advance", "build", "building", "increasing", and similar expressions are intended to identify these forward-looking statements. Forward-looking statements made herein include statements regarding the proposed Transaction, the proposed Concurrent Financing, and otherstatements derived from the pre-feasibility on the Aurizona Project, including, without limitation: estimated construction costs, operating cost,cash costs, all-in sustaining cost ("AISC") per ounce, initial and sustaining capex and other costs, estimated net present value ("NPV"), initialrate of return ("IRR"), anticipated construction period, expected life of mine ("LOM"), estimated reserves and resources, expected sensitivity togold prices, expected production and other economic and operational parameters inherent to a pre-feasibility study for a mineral project;statements with respect to targeted milestones going forward, including, without limitation, the expected timing for a definitive feasibilitystudy, commencement of construction, gold pour and restart of operations and the timing of commencement of exploration activities at PiabaWest, Tatajuba and Piaba North. In addition, this presentation may include forward-looking statements relating to the Companies' ability tocomplete the proposed Transaction; the Companies' ability to secure the necessary shareholder, legal and regulatory approvals required tocomplete the Transaction; JDL's ability to complete the Concurrent Financing; Trek's financial position following the Transaction; theanticipated results of the feasibility study for the Aurizona Project; the anticipated Board of Directors decision to approve construction of theAurizona Project; the ability to raise the capital required to fund construction and development of the Aurizona Project; the estimated costsassociated with construction of the Aurizona Project; the ability to restart production at the Aurizona Project; the timing of the anticipatedrestart of production; the ability to achieve the gold production rates and costs outlined in the Aurizona pre-feasibility study; the ability toincrease throughput and production levels at the Koricancha Mill; the ability to advance exploration efforts at Aurizona, Warintza, Ricardo andElk Gold; the results of exploration efforts at Aurizona, Warintza, Ricardo and Elk Gold; and the companies' ability to achieve the synergiesexpected as a result of the Transaction. This presentation also contains statements regarding future outlook, guidance and anticipated eventsor results and may include statements regarding the companies' future financial position, future exploration and development of mineralproperties, business strategy, budgets, litigation, projected costs, financial results, taxes, plans and objectives, and the timing of targetedcomponents of the strategic plan outlined in this presentation. We have based these forward-looking statements largely on our currentexpectations and projections about future events and financial trends affecting the financial condition of our business. These forward-lookingstatements were derived utilizing numerous assumptions regarding expected project parameters, results of operations, performance andbusiness prospects and opportunities that could cause actual results to differ materially from those in the forward-looking statements. Whilethe companies consider these assumptions to be reasonable, based on information currently available, they may prove to be incorrect.Accordingly, you are cautioned not to put undue reliance on these forward-looking statements. Forward-looking statements should not beread as a guarantee of future performance or results. Forward-looking statements are based on information available at the time thosestatements are made and/or management's and/or its qualified persons' good faith belief as of that time with respect to future events, and aresubject to known and unknown risks and uncertainties, including, without limitation: the risks and uncertainties inherent to an economic studysuch as the pre-feasibility study, fluctuation in commodity prices, variations in costs of supplies and labour, the availability of financing onacceptable terms, the risks of operating in foreign countries such as Brazil, Ecuador, Chile and Peru, the risks inherent to the restart of miningoperations, the effect of any non-compliance with debt covenants and other financing arrangements, uncertainties with respect to servicingdebt and those risks and uncertainties outlined in the companies' corporate disclosure and other documents filed on www.sedar.com, thatcould cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements.
To the extent any forward-looking statements constitute future-oriented financial information or financial outlooks, as those terms aredefined under applicable Canadian securities laws, such statements are being provided to describe the current anticipated potential of theCompany and readers are cautioned that these statements may not be appropriate for any other purpose, including investment decisions.Forward-looking statements speak only as of the date those statements are made. Except as required by applicable law, we assume noobligation to update or to publicly announce the results of any change to any forward-looking statement contained herein to reflect actualresults, future events or developments, changes in assumptions or changes in other factors affecting the forward- looking statements. If weupdate any one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect tothose or other forward-looking statements. You should not place undue importance on forward-looking statements and should not rely uponthese statements as of any other date. All forward-looking statements contained in this presentation are expressly qualified in their entiretyby this cautionary statement.
Technical InformationDavid Laing, BSc, MIMMM, Luna Gold's COO, and Scott Heffernan, MSc, P.Geo. Luna Gold's EVP Exploration are the Qualified Persons under NI43-101 for Luna Gold and have reviewed, approved and verified the technical content of this presentation as it relates to Luna Gold's AurizonaProject. See the Company's latest technical report relating to the Aurizona Gold Project for additional information with respect to the keyassumptions, parameters and risks relating to the mineral resource and reserves estimates and other technical and scientific informationpresented herein. Mineral resources that are not mineral reserves do not have demonstrated economic viability. The mineral resource andmineral reserve estimates contained herein may be subject to legal, political, environmental or other risks that could materially affect thepotential development of such mineral resources.
J. David Lowell, JDL's Chairman, is the Qualified Person under NI 43-101 for JDL and has reviewed, approved and verified the technical content of this news release as it relates to the Warintza, Ricardo and Elk Gold projects.
Cautionary Note to U.S. Investors Concerning Estimates of Mineral Resources. These estimates have been prepared in accordance with therequirements of Canadian securities laws, which differ from the requirements of U.S. securities laws. The terms "mineral resource","measured mineral resource", "indicated mineral resource" and "inferred mineral resource" are defined in NI 43-101 and recognized byCanadian securities laws but are not defined terms under the U.S. Securities and Exchange Commission ("SEC") Guide 7 ("SEC Guide 7") orrecognized under U.S. securities laws. U.S. investors are cautioned not to assume that any part or all of mineral deposits in these categorieswill ever be upgraded to mineral reserves. "Inferred mineral resources" have a great amount of uncertainty as to their existence, and greatuncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an "inferred mineral resource" will ever byupgraded to a higher category. Under Canadian securities laws, estimates of "inferred mineral resources" may not form the basis of feasibilityor pre-feasibility studies. U.S. investors are cautioned not to assume that all or any part of an inferred mineral resource exists or iseconomically or legally mineable. Accordingly, these mineral resource estimates and related information may not be comparable to similarinformation made public by U.S. companies subject to the reporting and disclosure requirements under the U.S. federal securities laws andthe rules and regulations thereunder, including SEC Guide 7.
Non-GAAP MeasuresThis presentation refers to expected AISC and other financial measures which are non-GAAP measures. These measurements have nostandardized meaning under IFRS and may not be comparable to similar measures presented by other companies. These measurements areintended to provide additional information and should not be considered in isolation or as a substitute for measures of performance preparedin accordance with IFRS.
All amounts are in US$ unless otherwise stated. Exchange rate assumed 0.76 USD:CAD. All references to shareprices are as of close of market on January 31, 2017.
Cautionary Statements
2
Experienced team• Decades of exploration, project finance, construction and operations experience
Multi-asset growth company• Aurizona feasibility nearing completion with gold pour targeted by year-end 2018• Gold production ramping up from the Koricancha Mill• Portfolio of exploration-stage gold and copper projects
Strong financial position with ~C$66 million in cash and no cash debt• Strengthened balance sheet improves Aurizona project finance flexibility
Strategic shareholder base and enhanced share liquidity• Broad and supportive shareholder base
Near-mine and district-scale exploration focus at Aurizona• Multiple drill-ready targets identified along strike from existing reserves
Diversified asset base creates platform for growth• Vision to create a leading mid-tier gold producer by 2020
1. Based on the assumption of ~149 M common shares outstanding and JDL's trading price of C$1.99 on January 31, 2017. 2. Following closing of the Transaction, including marketable securities and C$27 million (~$20 million) financing. 3. Average annual gold production from Aurizona for first five years based on the "Pre-feasibility Study on Aurizona Mine Project, Maranhão, Brazil, NI 43-101 Technical Report" with an effective date of Sept 12, 2016, plus Koricancha gold production.
~C$66 MCASH (~US$50 M) 2
~C$300 MMARKET CAP 1
+150,000 ozGOLD/YEAR 3
On the Path to Creating a Mid-Tier Producer
3
MANAGEMENT TEAM
Christian Milau, CEO and Executive DirectorLuna Gold, True Gold, Endeavour Mining, New Gold
Greg Smith, President and Executive DirectorJDL Gold, Esperanza Resources, Minefinders, Goldcorp, KPMG
David Laing, COOLuna Gold, True Gold, Quintana Resources, Endeavour Mining
Peter Hardie, CFOLuna Gold, True Gold, Nevsun
Scott Heffernan, EVP ExplorationLuna Gold, True Gold, Wealth Minerals, Equity Exploration
Sebastian D’Amici, SVP FinanceLuna Gold, True Gold, CHC Helicopters, Clarus Securities, PwC
Rhylin Bailie, VP Investor RelationsLuna Gold, Sandspring Resources, Eagle Hill, NovaGold, Placer Dome
Cesar Torresini, VP OperationsMGM for Amapari Gold Mine, Brazil Country Manager for Newmont
BOARD OF DIRECTORS
Rob Pease, ChairmanSabina Gold & Silver, Terrane Metals, Richfield Ventures, Placer Dome
Christian Milau, CEO and DirectorLuna Gold, True Gold, Endeavour Mining, New Gold
Greg Smith, President and DirectorJDL Gold, Esperanza Resources, Minefinders, Goldcorp, KPMG
Dan Wilton, DirectorPacific Road Capital, National Bank Financial, General Electric
Felipe Alves, DirectorFrontera Minerals Group, Rand Merchant Bank
Marcel de Groot, DirectorPathway Capital
David Lowell, DirectorDiscovered more than 15 large-scale mines, American Mining Hall of Fame
Jim O’Rourke, DirectorCopper Mountain Mining, Canadian Mining Hall of Fame
Experienced Leadership Team
4
All Share Consideration
Cash Debt Extinguished
Concurrent Financing
Supportive Shareholder Base
1.105 JDL Share per Luna Gold Share C$2.20 per Luna Gold Share23% Premium
to Spot(16% to 20-day VWAP)
Pacific Road Debt Repaid + Sandstorm Debt Facility Converted to Equity No Cash Debt Outstanding
C$27 million (~$20 million) Private Placement at C$2.00 per unit(unit: 1 share + 1 listed warrant at C$3.00 1)
Pacific Road Backstopped
Financing
All Management, Directors and Strategic Shareholders(Pacific Road, Sandstorm, Zebra & Lorito (Lundin), KCR/KCO, Ross Beaty, David Lowell)
Lock-ups:68% Luna Gold
30% JDL
1. Financing warrants will have the same terms as JDL Gold currently listed warrants which trade on the TSX Venture Exchange under the ticker symbol JDL.WT and expire on October 6, 2021. 2. Includes securities issued as part of C$27 M (~$20 M) Concurrent Financing. Concurrent Financing cash net against existing non-convertible debt. 3. Includes an adjustment for estimated transaction costs of $2 million. Includes marketable securities where applicable. 4. Cash FD includes warrants as part of units in Sandstorm Debt Facility settlement. 5. Based on the assumption of ~149 M common shares outstanding and JDL's trading price of C$1.99 on January 31, 2017
Transaction Overview
Pro-Forma Capital Structure 2,3,4
~C$300 M Market Cap 5
~C$66 M in Cash
Shares - Basic M 148.9
Warrants (W. Avg. Ex. C$2.38) M 87.0
Options/RSUs M 6.0
Shares - FD M 241.9
Market Cap. C$ M 300.0
Cash - Basic C$ M 66.0
Cash - FD C$ M 282.0
Cash Debt C$ M -
Conv. Debt C$ M 43.0
5
Growth Platform with Pipeline of Projects
Elk Gold Project, CanadaExploration
Commodity: GoldStatus: Past producing mine, 2010 PEA, 2016 resource estimateResources: M&I 212 koz @ 6.32 g/t, Inf 210 koz @ 5.94 g/t 1
Warintza Cu-Mo Project, EcuadorAdvanced Exploration
Commodity: Cu-Mo porphyryLocation: Proximate to Mirador Cu-Au project and contiguous with San Carlos Panantza Cu-Mo projectResources: Inf 1.8 Blbs Cu @ 0.42% and 132 Mlbs Mo @ 0.031% (0.61% CuEq) 1
Koricancha Mill, PeruIncreasing Gold Production
Commodity: GoldStatus: Operating processing facility with 350 tpd capacity; currently ramping upBusiness Model: Purchase mineralized feed at a market discount from small-scale and artisanal miners to produce Au and Ag for its own account
Aurizona Gold Mine, BrazilFS Underway, Production in 2018
Commodity: GoldStatus: Past producing mine, FS underway, gold pour targeted for end of 2018Reserves/Resources: P&P 969 koz @ 1.62 g/t, M&I 1.6 Moz @ 1.67 g/t 2Avg. Production: 150 koz for first 5 years, 136 koz LoM 3Avg. AISC: $708/oz 3
Size: 16,000 haTarget: Porphyry mineralizationLocation: 30 km south of Chuquicamata, one of the world's largest known Cu deposits
1. See JDL Resource Estimates and Cautionary Notes.2. See Aurizona Reserve & Resource Estimate and Cautionary Notes.3. Based on the "Pre-feasibility Study on Aurizona Mine Project, Maranhão,
Brazil, NI 43-101 Technical Report" prepared by Lycopodium Minerals Canada Ltd. with an effective date of September 12, 2016, a copy of which is available on Luna Gold's website and on SEDAR at www.sedar.com.
Ricardo Claim Block, ChileGrassroots Exploration
62. Trek balance sheet numbers include marketable securities and C$27 M (~$20 M) Concurrent Financing.
~C$95 M CASH 2Fully Diluted In-the-Money
(~$72 M)
Pre Transaction (Luna + JDL)
~C$66 M CASH 2Basic
(~$50 M)
Pre Transaction Balance Sheet (Luna + JDL)Post Transaction (Trek Mining)
1. Number includes marketable securities.
Strengthened Balance Sheet
CashC$12 M
Cash DebtC$61 M
SSL Convertible
C$43 M
SSL Convertible
C$43 M
CashC$66 M
CashC$56 M
7
Supportive Shareholders
Pre Transaction Ownership (Luna + JDL) 1
Management Invested
Pre Transaction Balance Sheet (Luna + JDL)Post Transaction Ownership (Trek Mining) 1
Institutional & HNWI
32%Management 14%
Float54%
Pacific Road49%
Sandstorm17%
Management8%
Float26%
Pacific Road16% 2
Sandstorm19%
Institutional & HNWI14%
Management9%
Float42%
Market Awareness
Increased Float
1. Based on basic issued and outstanding and excluding unvested RSUs to current management 2. Excludes backstop participation in the Concurrent Financing. Assumes Sandstorm Debt Facility settled as 100% equity.
Supportive Shareholder Base
8
TroyGuyana GoldfieldsTMAC
AtlanticRoxgoldVictoria
Belo SunAsanko Continental
Dalradian
Sabina GoldLydian Int'l Almaden
Lundin Gold
Torex Golden QueenOrezone
EldoradoMidas
0
500
1,000
1,500
2,000
2,500
3,000
3,500
5 10 15 20 25 30 35 40 45 50
Capi
tal i
nten
sity
($Ca
pex
/ oz
Ann
ual P
rodu
ctio
n)
After Tax IRR (%)
LOW
ER C
APIT
AL IN
TEN
SITY
HIGHER IRR
Low capital intensity
$146 million initial capex 1
AISC in lowest 1/3 of industry 2
43% margin at $1,250 Au/oz 1
1. As per the "Pre-feasibility Study on Aurizona Mine Project, Maranhão, Brazil, NI 43-101 Technical Report" with an effective date of Sept 12, 2016. 2. 2016 Wood Mackenzie AISC data provided by BMO Capital Markets.
Capital Intensity vs IRR Sweet Spot
9
253
116
205
150
200
160
100
378370
0
2
4
6
8
10
12
14
16
0
50
100
150
200
250
300
350
400
Gra
de (g
/t)
Annu
al P
rodu
ctio
n (k
oz)
3+ Years 2 Years 1 Year Producers
Annual ProductionGrade
Est. Time to Production
Scarcity of Single-asset Near-term Producers
10
Production targeted for year-end 2018• Past producing mine in northern Brazil with the
majority of infrastructure still in place• PFS in 2016 outlined low-cost, high-margin gold mine 1
• Feasibility underway with completion expected around the end of Q1-2017
• Capex estimated at $146 million for 8,000 tpd operation 1
• AISC of $708/oz puts Aurizona in lower third of industry average 1
• Gold production estimated at 150,000 oz/year for first five years 1
Exploration potential• Over 100,000 metres of drilling to date• Significant potential to extend initial 6.5-year mine life
with near-mine exploration success• JV with AngloGold Ashanti to explore 2,000 km2
greenfields property
Aurizona processing plant, January 2017
Piaba pit, January 2017
1.Based on the "Pre-feasibility Study on Aurizona Mine Project, Maranhão, Brazil, NI 43-101 Technical Report" prepared by Lycopodium Minerals Canada Ltd. with an effective date of September 12, 2016, a copy of which is available on Luna Gold's website and on SEDAR at www.sedar.com.
Near-term Production, Exploration Upside
11
Past-producing Mine with Existing Infrastructure
• Open-pit mine, produced from 2010-2015
• Most major mine elements in place
• Permitting in place, being updated for 8,000 tpd processing plant
• Improved water management plan
• Combined contract and owner mining
• Excellent infrastructure:- Plant – replacing front end
• Primary crusher/related facilities• Surge bin with temporary stockpile• SAG mill, ball mill, pebble crusher
- Mining fleet – to be replaced- Grid power to site – upgrade substation- Road accessible- Experienced local workforce- Offices and camp- Water- Communications
Aurizona Mine, January 2017
Piaba Pit
Vené Tailings Storage Facility
Plant Site
North Waste Storage Facility
ROM Pad
12
Near-mine exploration• Luna Gold planning 2017 exploration program
to test near-mine drill ready targets on strike with existing reserves
450 km2 brownfields exploration• Limited surface work and drilling has identified
a number of drill targets, including Touro which has a footprint >6 km2
Open to depth• High-grade "root" to the mineralized system
tested up to 500m below surface; current PFS mine plan contemplates mining to only 220 m
AngloGold Ashanti district-scale exploration• In August 2016 AngloGold commenced
exploring ~2,000 km2 of greenfields permits to earn 70% interest
~2,500 km2 Land Package
Exceptional Exploration Upside
13
• Piaba and Boa Esperança deposits remain open along strike and to depth- Piaba West with potential to
extend the deposit over 400 m- Tatajuba structure with ~4 km
strike – application underway to convert to mining permit
• Touro target ~15 km to SW has similar scale footprint to Piaba
• > 10 drill ready targets in immediate vicinity of Piaba
• > 50 km cumulative strike with anomalous to high-grade soil and rock geochemistry
• AngloGold geophysics data will greatly help to focus exploration
> 10 DRILL READY TARGETS
> 50 km CUMULATIVE STRIKE
13
Brownfields Exploration Potential
14
In production and ramping up• Custom built 350 tpd gold ore processing facility• Mineralized feed is purchased at a market discount
from legally operating small-scale and artisanal miners throughout Peru: the material is processed to produce gold and silver that is sold at spot prices
• Average throughput grade to date of more than 20 g/t gold
• Recommenced gold production in Q4-2016 and is working to increase throughput toward its 350 tpdcapacity
Strategic Location• Excellent location and infrastructure, located less
than 10 minutes from Pan American Hwy• Strong government and community support
Koricancha ball mills and leach tanks, January 2017
Koricancha Mill
15
Warintza Project• Copper-Molybdenum deposit in southeast Ecuador• 22,676 hectares, ~6,500 metres of drilling to date• 40km north of Mirador Cu-Au development project and near contiguous to San Carlos Panantza
exploration-stage deposit• 2013 resource estimate: Inf 1.808 Blbs Cu @ 0.42% and 132.3 Mlbs Mo @ 0.031% (0.61% CuEq) 1
Ricardo Claim Block• "Right address" for copper and molybdenum mineralization in Chile• 16,000 hectares strategically located along West Fissure fault• West Fissure fault hosts numerous large porphyry copper deposits, including Escondida and
Chuquicamata
1. See JDL Resource Estimates and Cautionary Notes.
Elk Gold Project• Past-producing high-grade gold mine in British Columbia, Canada• Produced 51,500 ounces of gold from 1992-1995• 6,597-tonne bulk sample in 2014 produced 3,531 ounces @ 16.65 g/t gold• More than 125,000 metres of drilling to date• 2016 resource estimate: M&I 211.9 koz @ 6.32 g/t gold and Inf 209.6 koz @ 5.94 g/t gold 1
Project Pipeline
16
Strong leadership team
Strong cash position and simplified balance sheet
Near-term production from the past-producing Aurizona gold mine in Brazil
Increasing production from the Koricancha gold milling operation in Peru
Exceptional exploration upside: Aurizona, Warintza, Ricardo
Diversified portfolio
Information CircularLate February
Shareholder MeetingsMid-March
Complete TransactionBy end of March
CREATING A LEADING MID-TIER GOLD PRODUCER16
Starting the Journey
17
Christian MilauCEO & Director
Tel: 604-558-0560Email: [email protected]
Greg SmithCEO & Director
Tel: 604-628-1164Email: [email protected]
Rhylin BailieVP Investor Relations
Tel: 604-260-0516Email: [email protected]
Contact Details
Appendix
19
Form of Transaction • Plan of Arrangement whereby JDL acquires all of the outstanding securities of Luna Gold
Consideration • Share Exchange Ratio of 1.105 JDL shares for each Luna Gold share held• Implied premium of 16% on 20-day VWAP and 23% as of Jan 31, 2017• Each Luna Gold warrant, option and restricted share unit to be converted at the Exchange Ratio
No Shop • Non-solicitation of other acquisition proposals. Exclusion for responding to a bona fide unsolicited acquisition proposal that is or could reasonably lead to a Superior Proposal
Termination Fee • C$6.5M (~4% of transaction value – basic equity + SSL convertible debenture)
Voting Support Agreements • All Officers, Directors and certain other shareholders
Board Recommendation • Unanimous
Conditions Precedent • Standard
Luna Debt • Pacific Road's debt repaid in cash following closing• Sandstorm Debt Facility converted into equity
Concurrent Equity Financing • C$27M (~US$20M) (effectively offsetting Pacific Road's debt repayment) of subscription receipts ("SR") @ C$2.00 per SR (each SR ultimately converts into 1 JDL share and 1 JDL warrant)
• Concurrent Financing fully backstopped by Pacific Road• Size may be increased, depending on demand
Approvals • Luna Gold shareholder approval of the Transaction: 66 2/3% of votes cast by securityholders, 66 2/3% of votes cast by shareholders, 66 2/3% of votes cast by restricted share unit holders, and a majority of votes cast by shareholders
• Luna Gold shareholder approval of the debt exchange and debt settlement: majority of the minority of votes cast• JDL shareholder approval: majority vote• Customary regulatory and court approvals
Indicative Timeline • Joint Information Circular sent to shareholders in February 2017• Special Shareholder meetings to take place in March 2017, with Completion expected by end of March 2017
Transaction Overview
20
Consolidated Summary
LGC JDL New Equity 2
Trek TrekC$
PF Outstanding (Basic) M 67.9 67.5 13.5 148.9
PF Outstanding (FDIM) M 96.2 71.5 13.5 181.2
PF Outstanding (FD) M 108.6 106.2 27.0 241.9
Ownership (Basic) % 45.6 45.3 9.1 100.0
Ownership (FDIM) % 52.4 40.0 7.6 100.0
Ownership (FD) % 45.0 43.9 11.2 100.0
Cash (Basic) 3 M $9.1 $42.2 $50.0 C$66.0
Cash (FDIM) 3 M $27.8 $46.2 $72.0 C$95.0
Cash (FD) 3,4 M $53.9 $131.0 $30.8 $214.0 C$282.0
Convertible Debt M $32.7 $- $32.7 C$43.0
Pro-forma Capital Structure (US$) 1
1. Numbers may not add due to rounding.2. New shareholders from C$27 M (~$20 M) Concurrent Financing securities. Concurrent Financing cash net against existing non-convertible debt. 3. Includes an adjustment for estimated transaction costs of $2 million. Includes marketable securities where applicable.4. Luna Gold cash FD includes warrants as part of units in Sandstorm Debt Facility settlement.
Pro-forma Ownership (Basic)
JDL45.3%
New Equity9.1%
Luna45.6%
Trek Mining Capital Structure
21
2016 PFS Highlights 1
Gold price (Base case) $1,250/oz
M&I Resource 2 1.6 Moz/ 29.9 Mt @ 1.67 g/t
P&P Reserve 969 koz/ 18.6 Mt @ 1.62 g/t
Mine Life 6.5 years
Annual Production Avg. 150,000 oz (Years 1-5)
Strip Ratio / Recovery 6.2:1 / 91%
Construction Period 18 months
Initial Capex $146M (includes new mine fleet)
Sustaining Capex $47M
Cash Cost (after tax) $606/oz
AISC (after tax) $708/oz
NPV5% (after tax) $201M ($256M at $1350/oz gold)
IRR (after tax) 34% (40% excluding C&M costs, including mine fleet lease)
Payback (after tax) 2.6 years
1. Based on the "Pre-feasibility Study on Aurizona Mine Project, Maranhão, Brazil, NI 43-101 Technical Report" prepared by Lycopodium Minerals Canada Ltd. with an effective date of September 12, 2016, a copy of which is available on Luna Gold's website andon SEDAR at www.sedar.com. 2. Mineral resources are inclusive of mineral reserves.
Cost Summary (LOM) 1
Mining$301
Processing$232
G&A $60
Refining & Transport $13
Royalties$49
Sustaining Capex $50
Reclamation & Closure $3
All-in Sustaining Cost: $708/oz
*Mining - $2/t mined
Aurizona AISC $708/oz
2016 Wood Mackenzie AISC curve provided by BMO Capital Markets.
Aurizona in the lower third of the industry AISC average
43%MARGIN AT
$1,250/OZ AU
47%MARGIN AT
$1,350/OZ AU
Low-cost High-margin Gold Mine
221. Data sourced from company websites, presentations and technical reports. * PFS IRR of 34% increases to 40% when care and maintenance costs are excluded and a mining fleet lease is included.
*
0.000.200.400.600.801.001.201.401.601.80
Rese
rve
Grad
e (g
/t g
old)
Open-pit Developers: Reserve Grade
-
50,000
100,000
150,000
200,000
250,000
Oun
ces o
f Gol
d
Average Annual Production
$0
$100
$200
$300
$400
$500
Initi
al C
apex
($M
)
Capex ($M)
0%
5%
10%
15%
20%
25%
30%
35%
40%
After-tax IRR @ $1250 Gold
Leading the Developers: Operating & Financial Metrics 1
23
• South American deposits analogous to the prolific gold belts of West Africa
• Underexplored greenstone belts hosting orogenic gold systems
• Aurizona is situated in a highly prospective emerging district
• Brazil has long mining history and strong mining culture (iron ore)
W. Africa / S. America: World-class Deposits
24
• Good paved road access to site from São Luis, capital of Maranhão state (370 km) or Belém, capital of Para state (440 km)
• International flights to Belém
• Airstrip in nearby Godofredo Viana (18 km)
• Dedicated power to site
• Majority of employees from local communities
Aurizona: Good Site Access, Mining-friendly Brazil
25
• Mine will deliver all ore types to the mill: saprolite (14%), hard saprolite + transition (29%), fresh rock (57%)
• Increase processing capacity to 8,000 tpd for all rock types
• Dedicated 69 kV powerline to site, upgrading substation to handle 15 MW
• Installation of primary crusher
• Significantly increased grinding power from 1.4MW to 9.1MW – SAG and ball mills to be installed
• Use large run-of-mine pad to improve early grade feed
• Improved gold recovery system – increased capacity with three additional leach tanks
• Better carbon recovery and treatment process –intensive leach reactor, pressure elution vessel, carbon regeneration kiln, improved electrical system and automation
• 91% recovery
Aurizona: New Front End of the Processing Plant
26
Material Cutoff Au g/t Tonnes Au g/t Au Oz
Below Reserve Pit and within US$1400 Resource Pit
Measured1 2.0 477,000 5.02 77,000
Indicated1 2.0 1,516,000 5.01 244,900
Inferred1 2.0 14,000 3.58 1,600Below US$1400 Resource Pit Inferred2 2.0 3,721,000 3.47 415,300
1 – Included in US$1400 open pit Mineral Resources.2 – Included in Inferred Mineral Resources outside US$1400 open pit. Underground resources were evaluated using a 2 g/t Au shell and edited to account for reasonable mineable geometries. Tonnages rounded to the nearest 1,000 and ounces rounded to nearest 100. Differences may be present due to rounding.
2 g/t shell outside US$1400 Resource Pit
2 g/t shell outside Reserve Pit and within US$1400 Resource Pit
SW NEViewing Az 340
~175m
~1,500m~140m
~160m
OPENOPEN
OPEN
OPENOPEN
Aurizona: Underground Potential
27
• AngloGold Ashanti to spend $14M over 4 years to earn 70% interest on greenfields properties (~2,000 km2) 1,2,3
commenced August 2016, on track to exceed $2M commitment in year one
• AngloGold planning greenfields drill program, and undertaking airborne geophysical surveys over the entire land package Trek will get all data
• Should AngloGold earn and decide to sell its interest in the JV, Trek can purchase AngloGold's interest in any NI 43-101 compliant resources for $10/oz
- If AngloGold's exploration is successful, Trek could hold 30% of a major deposit or 100% of an interesting discovery
1. Aurizona Mine area including Piaba West and Tatajuba, and brownfields project areas such as Touro, are excluded from the AngloGold JV (~450 km2).2. Greenfields properties also subject to a 2% NSR royalty to Sandstorm, subject to Trek's right to reduce the NSR to 1% for US$10M prior to commercial production. Mine permit and brownfields properties are subject to a gold price dependent sliding scale 3-5% NSR royalty to Sandstorm.3. Once AngloGold earns in, Trek would fund future activities on a pro-rata basis. 27
Aurizona: AngloGold Joint Venture
28
• Lycopodium Canada engaged to lead Feasibility Study completion around end of Q1-2017
- Condemnation and geotechnical drilling- Enhancing geo-metallurgical model- Resource model update to include recent drilling and
geologic modelling- Mine design and production schedule update- Review and update of existing plant repair and
refurbishment program- Capital and operating cost inputs update
• Feasibility Study drilling and geology- Two RC drills completed 8,610 m program results
pending• 2,420 m Boa Esperança Infill• 2,920 m Piaba Infill• 3,270 m Condemnation
- Detailed logging and database update complete- Geologic modelling nearing completion- Additional ICP analyses underway
• 1,370 samples from Boa Esperança • 3,502 samples from Piaba
Aurizona: Feasibility Study & Drilling Underway
29
The Mineral Reserve estimate has an effective date of June 21, 2016 and is based onthe Mineral Resource estimate effective on April 30, 2016. The Mineral Reservecalculation was completed under the supervision of Gordon Zurowski, P.Eng of AGPMining Consultants Inc., who is a Qualified Person as defined under NI 43-101.Mineral Reserves are stated within the final design pit based on a $1,104 per ouncegold price pit shell with a $1,200 per ounce gold price for revenue. The cutoff gradewas 0.38 g/t Au for all pit areas. The mining cost averaged $2.32 per tonne mined,processing averages $11.30 per tonne milled and G&A was $2.84 per tonne milled.The process recovery averaged 90.5%. The exchange rate assumption applied wasR$3.50 equal to $1.00. The PFS scope only considers the Piaba and Boa Esperançaopen pit mineralized zones. The Mineral Resource and Mineral Reserve estimatescontained herein may be subject to legal, political, environmental or other risks thatcould materially affect the potential development of such Mineral Resources. Seethe Company's press release dated September 12, 2016 and the Company's latesttechnical report relating to the Aurizona Gold Project for additional information withrespect to the key assumptions, parameters and risks relating to the mineralresource and reserves estimates and other technical and scientific informationpresented herein. The Mineral Resource estimate has an effective date of April 30,2016 and was prepared by Mr. Brett R. Marsh, C.P.G. of Phoenix Geoscience, LLC,who is a qualified person under NI 43-101. Mineral Resources are inclusive ofMineral Reserves. Mineral Resources that are not included within the MineralReserves do not have demonstrated economic viability. Mineral Resources arestated at the following cutoff grades for open pit: Piaba: Laterite and Saprolite at0.30 g/t Au; Hard Saprolite/Transition/Fresh Rock at 0.40 g/t Au. Piaba: Outside openpit at 2.0 g/t Au. Boa Esperança cutoff grade: 0.44 g/t Au. Piaba topography iscurrent as of February 28, 2015. Tonnes are rounded to the nearest 1,000; ouncesare rounded to the nearest 100. Small tonnage and grade differences may be founddue to rounding.
Proven Probable Total
Ore TypeTonnes
(kt)Grade (g/t)
Gold(oz)
Tonnes(kt)
Grade (g/t)
Gold (oz)
Tonnes (kt)
Grade (g/t)
Gold (oz)
Laterite/Saprolite 721 1.59 37,000 1,852 1.04 62,000 2,573 1.19 99,000
Hard Saprolite/Transition 2,320 1.60 119,000 3,049 1.22 119,000 5,369 1.38 238,000
Fresh Rock 3,328 1.98 212,000 7,372 1.77 420,000 10,700 1.84 632,000
Total 6,369 1.80 368,000 12,273 1.52 601,000 18,642 1.62 969,000
Area Type ClassTonnes
(kt)Gold Grade
(g/t)Gold(oz)
PiabaPit Constrained
Measured 8,910 1.77 508,000
Indicated 20,264 1.64 1,071,700
M&I 29,174 1.68 1,579,700
Inferred 2,584 0.72 60,000
Outside Pit Inferred 3,721 3.47 415,300
Boa Esperança Pit Constrained Indicated 682 0.90 19,700
Inferred 66 0.75 1,600
TotalPit Constrained
Measured 8,910 1.77 508,000
Indicated 20,946 1.41 1,091,400
M&I 29,856 1.67 1,599,400
Inferred 2,650 0.72 61,600
Outside Pit Inferred 3,721 3.47 415,300
Aurizona: Reserve & Resource Estimates
30
Warintza March 2013 Resource Estimate 1
Resource Tonnes CuEq% Cu% Copper (tonnes)
Copper (M lbs)
Mo% Mo (tonnes)
Mo (M lbs)
CuEq (M lbs)
Inferred 194,994,000 0.61 0.42 820,000 1,807 0.031 60,000 132 2,072
Elk Gold 2016 Resource Estimate 2
Resource Tonnes Grade Oz
M&I 1,042,600 6.32 211,900
Inferred 1,096,900 5.94 209,600
1. The Mineral Resource estimate has an effective date of December 21, 2012 as reported in the "Technical Report, Warintza Project, Ecuador" completed by Peter Ronning, P.Eng. andSteven Ristorcelli, C.P.G. with an effective date of December 21, 2012 and a completion date of March 27, 2013. The Mineral Resource calculation was completed under the supervisionof Peter Ronning, P.Eng. and Steven Ristorcelli , C.P.G., who are Qualified Persons as defined under NI 43-101. The reported resource is at a cut-off of 0.3 CuEq. Copper equivalentcalculations were made for reporting purposes. The copper equivalent grade for copper plus molybdenum was calculated as CuEq(%) = Cu(%) = (6*Mo(ppm)/10000). Copper-equivalentcalculations reflect gross metal content and have not been adjusted for metallurgical recoveries or relative processing and smelting costs. The copper equivalent grades were used onlyfor establishing cut-off grades for reporting.
2. The Mineral Resource estimate has an effective date of August 22, 2016 as reported in the "Technical Report on Resources of the Elk Gold Project" completed by Robert Wilson, P.Geo.,Gary Giroux, P.Eng. and Antonio Loschiavo, P.Eng. with an effective date of August 22, 2016. The Mineral Resource calculation was completed under the supervision of Gary Giroux,P.Eng., who is a Qualified Person as defined under NI 43-101. The potential open pit resources were evaluated using the Maptek Vulcan v9.1.1 Lerchs-Grossman algorithm software. Theconstrained resource was calculated using a gold price of US$1232/oz. Any blocks within the constrained shell were reported using a 1.0 g/t cut-off and any blocks below the LG shellsurface were reported using a 5.0 g/t cut-off. The grade reported is the average grade of the resource both in and below the pit.
JDL: Resource Estimates
