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CORPORATE PRESENTATION
Kerr Mines TSX: KER I OTC: KERMF
July 2018
AN EMERGING AMERICAN GOLD PRODUCER
FORWARD-LOOKING STATEMENTS
This presentation contains forward-looking information, including statements regarding: the proposed timing, schedule, and costs for restarting production at the
Copperstone Mine, rate of production, expected cash costs, expected increase in milling capacity, exploration potential at the Copperstone Mine, proposed debt
restructuring and financing, share capitalization and director ownership,. These forward-looking statements entail various risks and uncertainties that could cause
actual results to differ materially from those reflected in these forward-looking statements. Such statements are based on current expectations, are subject to a
number of uncertainties and risks, and actual results may differ materially from those contained in such statements. These uncertainties and risks include, but are
not limited to, the strength of the economy; the price of gold; operational, funding, and liquidity risks; the degree to which mineral resource and mineral reserve
estimates are reflective of actual mineral resources and mineral reserves; and the degree to which factors which would make a mineral deposit commercially viable
are present; assumptions with respect to the cost and availability of labour for the restart of operations are correct,; results of exploration and validity of geological
models; the risks and hazards associated with underground operations, and any specific risks or assumptions set out or referenced in this presentation. Risks and
uncertainties about Kerr Mines Inc. and its business are more fully discussed in its disclosure materials, including the annual information form, technical reports,
financial statements and MD&As, filed with the securities regulatory authorities in Canada and available at www.sedar.com and readers are urged to read these
materials. Kerr Mines Inc. assumes no obligation to update any forward-looking statements or to update the reasons why actual results could differ from such
statements unless required by law.
This presentation includes certain non-IFRS measures, including cash costs on a per gold ounce basis. Cash costs per gold ounce are defined as costs of
production (including refining costs) divided by the total number of gold equivalent ounces produced. The Company reports total cash costs on a production basis.
In the gold mining industry, these are common performance measures but do not have any standardized meaning, and are non-GAAP measures. As such, they are
unlikely to be comparable to similar measures presented by other issuers. In reporting cash costs per gold ounce, the Company follows the recommendations of the
Gold Institute standard. The Company believes that, in addition to conventional measures, prepared in accordance with IFRS, certain investors use this information
to evaluate the Company’s performance and ability to generate cash flow. Accordingly, it is intended to provide additional information and should not be considered
in isolation or as a substitute for measures of performance prepared in accordance with IFRS.
Technical information in this presentation has been reviewed and approved by Michael R. Smith P. Geo., who is a qualified person that is independent of the
Company, as defined in National Instrument 43-101.
2
INVESTMENT OPPORTUNITY
3Transitioning to production & cash flow
HIGH GRADE RESOUCEMII 420K oz @ +7.0 g/t
Multi Million Ounce potential
PROLIFIC REGIONSafe, mining friendly Arizona, USA
Top 10 mining jurisdiction
Supportive Community and Gov’t
PRODUCTION & CASH FLOW2019 Production Target
38,000 ounce per year
Low cost profile generates
US $22M EBITDA
RESOURCE EXPANSION PLAN2018 15,000 m drill program targeting
200K ounce expansion to resource and
mine life
POSITIVE GOLD PRICE Geo political tensions
Global Debt Growth
INFASTRUCTURE & PERMITSUS $50M invested in infrastructure
Low CAPEX needed to start up
Ticker Symbol TSX: KER I OTC: KERMF
Shares Outstanding 255.7 million
Options 9.8 million
Warrants 22.2 million
Fully Diluted 287.7 million
52 week range $0.09 - $0.41
Recent price $0.22
Market Cap $56.2 million
Cash (March 2018) $3.3 million
* Figures denominated in Canadian dollars 4
CAPITAL STRUCTURE
Shares & Balance Sheet* Shareholder Breakdown
Middle East
Europe
North
America
Directors
Family Offices &
Institutional
Specialist Mining
Retail
JUNIOR MINING DEVELOPMENT CYCLE
5At an inflection point of value creation in the cycle
Sh
are
pri
ce
(C
$)
New executive
management team
CAPEX
Financing
Pre-Feasibility
released
6
KEY LEADERSHIPClaudio Ciavarella – Chief Executive Officer & Director Fahad Al Tamimi - Chairman
A businessman with global investment activities
Former President and CEO of SaudConsult, the largest engineering
firm in Saudi Arabia
Investments in mining
Peter Damouni - Director
Over 17 years of experience in investment banking and capital
markets, with expertise in mining and oil and gas
Led equity and debt financings valued over $5 billion
Ayman Arekat - Director
Over 35 years of banking, finance and investment experience
Previously with Chase Manhattan Bank, Merrill Lynch, Deutsche
Bank, Investcorp and Abraaj Capital
James McVicar - Director
Over 20 years of specialized experience in corporate finance and
corporate/commercial matters for natural resources companies
Director of Monarca Minerals
CPA, 25 years as private business owner. CEO of Kerr Mines since
April 2017
Owns and operates international businesses in construction and
manufacturing
Investments in mining
Martin Kostuik – President and Director
25 years underground and open pit mining experience. President of
Kerr Mines since April 2017
CEO of Rupert Resources, Operations & Engineering at Barrick’s
Goldstrike mine
Michael R. Smith – Exploration and Development
38 years exploration and geology, Chief Mine Geologist, Barrick’s
Goldstrike mine. Led the Arizona Vulture Gold Mine back into
production. Executed 20 exploration projects adding $9 billion in gold
resource value alone
BS Geology Arizona State and MS Geology Mackay School of Mines
Invested team with significant industry experience
David Thomas– VP Projects/Mine GM
30 years of mine building and operations experience including 5
underground gold projects with Newmont, Bema Gold (Kinross),
Teck and others
EPCM Manager for Newmont (worldwide) and Nordgold (Russia
and Africa), EVP of Comstock Mining in Nevada
Strategic Growth Vision
Resource Expansion
• 2018 drill program for conversion of MII to P&P reserves
• Add mine life in 2018 by expanding Copperstone & Footwall Zones at depth and strike
Blue Sky Exploration
• Multi-million ounce targets with existing gold mineralization
• South & SW target satellite deposits
• Three blue pearl exploration targets
Increase production profile Increase resource ounces
7
• On track for 2019 gold production
• CAPEX finance partner selected
• PFS complete, detailed engineering progressing
Production
VALUE CREATION STRATEGY
Extend mine life
8
ROBUST ECONOMICS
PFS Highlights* (US$) Project Attributes
Base Case Gold Price $1,250 Gold price environment long term trending upwards
Gold Production per annum 38,000 oz Scalable operation with potential for expansions
Recoveries to Doré 95% Excellent gold recoveries
Average Gold grade M&I 7.6 g/t High grade, recoverable copper not included in PFS
Initial Capital Costs $22.7M Small CAPEX, financed via non dilutive instruments
Gold Cash Cost $684 Low cash cost, high profit margin
All-in Sustaining Costs $875 Low AISC
After-Tax IRR ($1,250 Au) 40% High IRR
Annual EBITDA $22M Strong cash flow and highly profitable
*Kerr Mines National Instrument 43-101 Technical Report: Preliminary Feasibility Study for the Copperstone Project, La Paz County, Arizona, USA
Catalysts2019
Q1 Q4Q2 Q3
2018
Q4Q2 Q3
Secured financing
Exploration program
Detailed engineering
Permit modifications
BLM Mine plan of
operations
Resource Upgrade / Mine
Engineering
Long lead equipment
Leach Plant Construction
Commissioning and start-
up
Mine development / Infill
drilling
Begin mining
First Gold pourFirst gold
FIRST GOLD ESTIMATED IN Q4 2019
Permits modifications are
well along in the process –
First permit modifications
to be finished by
beginning of Q4’18
First gold pour
estimated to be Q4’19
To be expedited if detailed
engineering is completed
before the end of Q4’18
VALUE CREATION TIMELINE
Today
The majority of the
activities are
standardised and
executed throughout
the world
Advanced nature of
current study allows
quick progression to
detailed engineering
From funding to first
gold pour very fast due
to straight-forward
nature of project
Comments
9
Source: Michael R. Pawlowski P. Geo, January 2005
Schematic cross-section of the Moon Mountain Detachment Fault and
the Copperstone Listric Fault (depth unknown), Solid heavy lines are
observed faults; broken lines and projected faults
Copperstone Mine
Moss Mine
Gold Road
Mineral Park
Mesquite
Castle
Mountain
ARIZONA
NEVADA Detachment Fault
Known detachment fault-
related Mineralization
Source: USGS Keith R Long Preliminary descriptive deposit
model for detachment fault related model 10
DETACHMENT FAULT SYSTEM - SCALE POTENTIAL
INCREASING RESERVES & RESOURCESENGINEERING, DRILLING & COST REDUCTIONS
Conversion goal 60,000 oz of M&I to P&P 2018 accretion and infill drilling program Other factors increasing P&P reserves
Targeted Resource Expansion Objectives
Mine life expectancy 4.5 years
Proven and Probable reserves (oz of gold) 175,092
+ Conversion of current M&I to P&P through mine engineering 60,000
+ 2018 accretion and infill drilling program and
subsequent mine engineering expected to add P&P140,000
= Proven and Probable reserves (oz of gold) in 12-18 months 375,092
Mine life expectancy 10 years
1
Mine engineering is the basis for defining Measured
and Indicated Resources as Proven and Probable
Reserves, respectively.
The mineral resources that are economically feasible
are converted into P&P after applying revenue per
tonne and deducing all related costs to extraction.
Currently ~100k ounces (276.1k ounces – 175.1k
ounces) of M&I not deemed as economically feasible
to extract – these are available for conversion to
P&P through mine engineering and cost reductions.
Detailed engineering will add ounces by maximizing
mined ore recovery through varying the design of the
minimum mining widths allowing the production to
follow the natural contours of the ore shapes.
2 3
A key objective is to convert the Inferred mineral
resources to M&I and to improve continuity and grade
of the M&I mineral resource base – 6,500 meters of
drilling dedicated for this purpose:
– Large parts of the Inferred resource base not
recognised as M&I because the current drilling
density is too low. Drilling will increase density
resulting in 33,000 ounces Inferred potentially being
converted into M&I.
Another objective is to test potential new Inferred zones
– up to 8,400m- and thereby adding ~180,000 ounces
Au to the Inferred resource base.
The dynamics of mine engineering and additional drill
density as the program progresses will allow these
newly classified resources to be converted from
Inferred to M&I to P&P – targeted to add ~140,000
ounces Au.
Consideration of the modifying factors
The economically
mineable part of
M&I
Increasing level of
geological
knowledge and
confidence
Inferred
145.7 koz
Indicated
148 koz
Measured
128 koz
Probable
93.7 koz
Proven
81.4 koz
2
1 & 32 &
Conversion dynamics
Optimizing operating cost adds Au ounces to P&P
– The revenue from copper (not accounted for in
PFS) could be the equivalent of a 5% reduction in
mine operating costs and effectively add 10,000
ounces Au to P&P.
– PFS operating cost is conservative and upside
remains to reduce planned cost. 10% reduction in
cost adds 22,000 ounces Au to P&P.
Conservative gold recovery of 95% assumed in the
PFS where Cyanide leaching produced 97% during testing.
Higher recovery would increase revenue per tonne thereby
converting additional ounces of M&I into P&P.
Conservative gold price of USD1,250/oz assumed in
the PFS reserve.
1
2
11
12
THE COPPERSTONE MINE – Long View
Historically produced over 500,000 oz in the open pit2018 Resource Model - Proven & Probable, Measured & Indicated, Inferred
Strike Length for Measured & Indicated & Inferred 1,550m – Copperstone and Footwall Zones
Proposed workings
Existing open pit
Existing workings
Measured & Indicated
Proven & ProbableInferred
Inferred
305 L
152 L
-152 LD ZoneC ZoneB ZoneA Zone
Inferred*
145,700 oz @ 6.81 g/t
M&I Resource*
276,100 oz @ 7.63 g/t
P&P Resource*
175,093 oz @ 6.79 g/t
Conversion of MII to P&P
Resource Statement*
*Kerr Mines National Instrument 43-101 Technical Report: Preliminary Feasibility Study for the Copperstone Project, La Paz County, Arizona, USA
13
150m = 500k ounces
305 L
152 L
-152 L
THE COPPERSTONE MINE – Cross Section View
2018 Measured & Indicated & Inferred Resources Copperstone and Footwall Zones
Proposed workings
Existing open pit
Existing workings
Measured & Indicated
Proven & Probable
Inferred
Footwall Zone Copperstone Zone
Supports strengthened economics
Historical Adit
108m = 400k ounces
14
MULTI-MILLION OUNCE RESOURCE POTENTIAL
SOUTH WEST
TARGET
• Footwall Zone South
Extension and South West
target have previous
successful drilling
• Intercepts of 8 g/t to 32 g/t
over 2 – 4 metres
• Detachment fault region
COPPERSTONE ZONE
P&P, M&I &
INFERRED RESOURCE
AND ACCESS TO
UNDERGROUND
FOOTWALL ZONE
INFERRED
RESOURCE
FOOTWALL ZONE SOUTH
EXTENSION
INFERRED RESOURCE
15
• Highly prospective 11,800 acre land package
• South West Target – geophysical signature
identical to Copperstone and Blue Pearls ,
supported by previous drilling indicating
identical geology, inclination, width and grade
to Copperstone
• North East “Blue Pearl” Geophysical targets –
significant strength and similar size to the
geophysical anomaly under the Copperstone
Orebody. The blue indicates a uniformly
magnetic rock with a very slow change in
magnetic field. No previous drilling
REGIONAL EXPLORATION – SCALE POTENTIAL
16
• April 2017 – Claudio Ciavarella and Martin Kostuik appointed new CEO and President
• May 2017 – Technical team in place to execute operational plans
• June 2017 – Company closes oversubscribed non-brokered private placement for C$8,000,000
• August 2017 – Initiation of Phase I exploration program
• October 2017 – Released initial results of Phase I exploration program
• December 2017 – Company closes oversubscribed non-brokered private placement for C$6,000,000
• December 2017 – Phase I drilling program completed
• January 2018 – Phase II exploration and engineering program and progress towards production decision
• April 2018 – PFS highlights released
• May 2018 – Strengthens Executive Team with Appointment of VP Projects and Mine General Manager
• July 2018 – Capex Financing Program Announced
KEY SUMMARY POINTS – ONE YEAR PERFORMANCE
Delivering on Strategy
17
DISCOUNTED TO PEERS
• EBITDA US$22M (C$30M) of EBITDA
• At a conservative 6 - 8x EBITDA target ~ market cap $180M - 240M
MULTIPLE DRIVERS OF VALUE IN THE NEXT 12 MONTHS
• CAPEX financing complete
• Resource expansion program
• Straightforward Project Execution
• Commence gold mining
• Cashflow positive
STRATEGIC PREMIUM
• Significant M&A opportunities to consolidate single asset gold producers
WHY INVEST IN KERR MINES NOW
CONTACT INFORMATION
CLAUDIO CIAVARELLA
Chief Executive Officer
T: +1 (416) 855-9305
INVESTOR RELATIONS
W: www.kerrmines.com
TECHNICAL APPENDIX
19
LAND STATUS – 11,800 ACRE LAND PACKAGE
Copperstone Mine
Southwest Target
Blue Pearls
South Extension
20
Age Name Description
Early
Miocene
Basalt Contains gold mineralization.
Cut by mineralized amethyst-quartz-specularite veins and strongly altered. The
mineralization and brecciation observed in the unit is related to the Copperstone
Detachment Fault.
Early
Miocene
Monolithic Breccia
(MSB)Contains gold mineralization.
Monolithic fragments derived from Jurassic QLP. Locally mineralized above the
Copperstone Detachment Fault. Hematization and quartz-specularite mineralization.
Jurassic Quartz Latite
Porphyry (QLP)Contains gold mineralization.
Volcanic flows with well-developed metamorphic foliation. The principle ore host in
the pit where it extends into both the hanging wall and footwall of the Copperstone
Detachment Fault.
Triassic Marble Contains gold mineralization.
Marble occurs at the top of the Triassic meta-sediments in C and D areas. Hosts
intervals of massive specular hematite ± manganese oxide and Cu minerals. The
mineralization and brecciation observed in the unit is related to the Copperstone
Detachment Fault.
Triassic Quartzite Contains gold mineralization.
The mineralization and brecciation observed in the unit is related to the Copperstone
Detachment Fault. Observed in C and D areas.
Triassic Phyllite Contains gold mineralization.
The mineralization and brecciation observed in the unit is related to the Copperstone
Detachment Fault. Observed in C and D areas.
MINE GEOLOGY – LITHOLOGY & ALTERATION
