East West 647,350E 647,850E ENV_D ENV_A HG_D HG_A HG_C HG_B HG_E CAPITAL STRUCTURE as at Jan. 1, 2016 Market Cap 42M Basic Shares Outstanding 109.9M Stock Options 9.9M Warrants 3.3M Fully Diluted Shares Outstanding 123.1M Cash C$5.5M Debt Nil www.falcores.com TSX.V: FPC Rediscovering the Rouyn-Noranda Mining Camp Rebirth of the Horne Mine Falco Resources Ltd. is one of the largest claim holders in the Province of Québec with a 100% interest in 74,000 hectares of land in the historic Rouyn-Noranda Mining Camp. Falco controls 70% of the entire camp including the world-class Horne mine and 13 other former gold and base metal mines. The Horne Mine was the highest gold grade volcanogenic massive sulfide (VMS) deposit of its size in the world. In its 50 year history from 1927 to 1976, it produced 11.6 million ounces of gold and 2.5 billion pounds of copper. On May 9, 2016, Falco announced a positive Preliminary Economic Assessment (PEA) on the Horne 5 gold project. The PEA indicates that the Horne 5 Project represents a robust, high margin, twelve year underground mining project with attractive economics in the current gold price environment. RESOURCES (see Jan. 25, 2016 press release) 5.4 MILLION GOLD EQUIVALENT OUNCES 43-101 INDICATED resource - C$65/t NSR cut-off including 3,418,232 oz Au hosted in 58.3 million tonnes averaging 2.86 g/t AuEq (1.82 g/t Au; 15.60 g/t Ag; 0.20% Cu; 1.00% Zn). PEA HIGHLIGHTS (see May 9, 2016 press release) NPV of $1,131 million at a 5% discount rate and an IRR of 20.0% before taxes and mining duties NPV of $667 million at a 5% discount rate and an IRR of 16.0% aſter taxes and mining duties Mine life of 12 years with peak-year production of 274,000 ounces and average LOM annual production of 236,000 ounces of gold Net payable gold recovery of 86.8% 3,051,000 gold ounces production at an average diluted grade of 2.60 g/t Au LOM 2,903,000 ounces of payable gold LOM 807 million pounds of payable zinc LOM 194 million pounds of payable copper LOM 23.8 million ounces of payable silver LOM All-in sustaining costs of US$427/oz net of by-product credits (including royalties) over LOM, generating an operating margin of over US$823/oz or 66% All-in cost (CAPEX plus OPEX) is estimated at US$660/oz Initial capital costs of $905.2 million Payback period of 3.8 years pre-tax and 4.1 years post-tax Commissioning in late 2020 / Full production early 2021 1.3 MILLION GOLD EQUIVALENT OUNCES 43-101 INFERRED resource - C$65/t NSR cut-off including 854,534 oz Au hosted in 12.7 million tonnes averaging 3.08 g/t AuEq (2.10 g/t Au; 26.26 g/t Ag; 0.22% Cu; 0.57% Zn). OVER 80 YEARS OF DATA EXISTING INFRASTRUCTURE Located adjacent to the town of Rouyn-Noranda, roads, railways and power in place. Extensive local mining expertise STABILITY & LOW POLITAL RISK Prolific stable mining jurisdiction in Quebec’s Abitibi region May. 2016
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EastWest
647,350E 647,850E
ENV_D
ENV_A
HG_D
HG_A
HG_C
HG_B
HG_E
CAPITAL STRUCTURE as at Jan. 1, 2016
Market Cap 42M
Basic Shares Outstanding 109.9M
Stock Options 9.9M
Warrants 3.3M
Fully Diluted Shares Outstanding 123.1M
Cash C$5.5M
Debt Nil
www.falcores.com
TSX.V: FPC
Rediscovering the Rouyn-Noranda Mining Camp
Rebirth of the Horne Mine
Falco Resources Ltd. is one of the largest claim holders in the Province of Québec with a 100% interest in 74,000 hectares of land in the historic Rouyn-Noranda Mining Camp. Falco controls 70% of the entire camp including the world-class Horne mine and 13 other former gold and base metal mines.
The Horne Mine was the highest gold grade volcanogenic massive sulfide (VMS) deposit of its size in the world. In its 50 year history from 1927 to 1976, it produced 11.6 million ounces of gold and 2.5 billion pounds of copper.
On May 9, 2016, Falco announced a positive Preliminary Economic Assessment (PEA) on the Horne 5 gold project. The PEA indicates that the Horne 5 Project represents a robust, high margin, twelve year underground mining project with attractive economics in the current gold price environment.
RESOURCES (see Jan. 25, 2016 press release)
5.4 MILLION GOLD EQUIVALENT OUNCES43-101 INDICATED resource - C$65/t NSR cut-offincluding 3,418,232 oz Au hosted in 58.3 million tonnes averaging 2.86 g/t AuEq (1.82 g/t Au; 15.60 g/t Ag; 0.20% Cu; 1.00% Zn).
PEA HIGHLIGHTS (see May 9, 2016 press release)
NPV of $1,131 million at a 5% discount rate and an IRRof 20.0% before taxes and mining dutiesNPV of $667 million at a 5% discount rate and an IRR of 16.0% after taxes and mining dutiesMine life of 12 years with peak-year production of274,000 ounces and average LOM annual production of 236,000 ounces of goldNet payable gold recovery of 86.8%3,051,000 gold ounces production at an average diluted grade of 2.60 g/t Au LOM2,903,000 ounces of payable gold LOM807 million pounds of payable zinc LOM194 million pounds of payable copper LOM23.8 million ounces of payable silver LOMAll-in sustaining costs of US$427/oz net of by-product credits (including royalties) over LOM, generating an operating margin of over US$823/oz or 66%All-in cost (CAPEX plus OPEX) is estimated at US$660/ozInitial capital costs of $905.2 millionPayback period of 3.8 years pre-tax and 4.1 years post-taxCommissioning in late 2020 / Full production early 2021
1.3 MILLION GOLD EQUIVALENT OUNCES43-101 INFERRED resource - C$65/t NSR cut-offincluding 854,534 oz Au hosted in 12.7 million tonnes averaging 3.08 g/t AuEq (2.10 g/t Au; 26.26 g/t Ag; 0.22% Cu; 0.57% Zn).
OVER 80 YEARSOF DATA
EXISTING INFRASTRUCTURE
Located adjacent to the town ofRouyn-Noranda, roads, railways
and power in place. Extensive local mining expertise
STABILITY &LOW POLITAL RISK
Prolific stable mining jurisdiction in Quebec’s Abitibi region
May
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CADILLAC FAULT
DESTOR-PORCUPINE FAULT
HORNE HORNE COMPLEXCOMPLEX
U P P E R B E AV E RU P P E R B E AV E R
L A R O N D EL A R O N D EW E S T W O O DW E S T W O O D
H O L L O W AY M I N EH O L L O W AY M I N E
Rouyn-NorandaÉvain
Larder LakeVirginiatown
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F A L C O R E S O U R C E S P R O P E R T I E SF A L C O R E S O U R C E S P R O P E R T I E S
A C T I V E G O L D P R O D U C E R SA C T I V E G O L D P R O D U C E R S
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00 55 K mK m
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Claude LéveilléeVice-President CommunityRelations & Human Resources
Claude BernierExploration Manager - Horne 5
Sylvain DoireEnvironmental Manager
COMMUNITY RELATIONS
Falco is committed to sustainable development and the goal of zero harm to people, the environment and our communities.
This commitment means that we strive to act consistently in all of our activities in relation to health & safety, the environment, community relations and social development.
Wherever we operate, we will ensure we do so in a socially responsible manner and meet or exceed all applicable requirements.
QUALIFIED PERSONSCarl Pelletier (P.Geo. Géo., B.Sc.) and Vincent Jourdain (P. Eng., Ph.D.) are the qualified persons as defined by National Instrument 43-101 - Standards of Disclosure for Mineral Projects for the mineral resource estimate Data in this document as it relates to the technical information related to the 2014 Horne 5 Project Resource Estimate and they have reviewed and verified the technical information contained herein. Messrs. Pelletier and Jourdain are consulting geologists with InnovExplo Inc. and fulfill the requirements to be "qualified person" for the purposes of NI 43-101.
Claude Bernier, Exploration Manager, (P.Geo. Eng.) is the qualified person for this release as defined by National Instrument 43-101 - Standards of Disclosure for Mineral Projects and has reviewed and verified the technical information contained herein. Mr. Bernier is an employee of Falco and is non-independent.
The scientific and technical information regarding the dilution evaluation and engineering set out in this news release has been approved by Francois Vezina, Director – Mining Development of Osisko Mining Group. Mr. Vezina is a Eng. with the Ordre des ingénieurs du Québec and P.Eng. with the Professional Engineers of Ontario, and is a "qualified person" as defined by NI 43-101. The scientific and technical information regarding the Cut-off evaluation set out in this news release has been approved by Francois Girard, Director – InnovExplo Inc. Mr. Girard is a Eng. with the Ordre des ingénieurs du Québec, and is a "qualified person" as defined by NI 43-101.
ISOCONTOUR VIEW OF OREBODY VALUE (C$)
Positive Initial PEA completed and announced on May 9, 2016
Large-scale and low-cost mining project
Existing infrastructure: Shaft and openings for tailing disposal
Regional exploration targets to drive further value
Proven, strong and experienced mine builders
1100, avenue des Canadiens-de-Montréal, Suite 300Montréal, Québec H3B 2S2
