Exploring the true potential of the Karelian Gold Line Endomines AB (publ) Erik Penser Bankaktiebolag 19th Jan 2016
Disclaimer Exploring the true potential of the Karelian Gold Line Statements in this presentation which are not purely historical facts, including without limitation statements regarding future estimates, plans, objectives, assumptions or expectations of future performance are forward-looking statements. Investors are advised that by their nature as visual aids, presentations provide information in a summary form and are prepared as a presenter s aid and support - not a standalone document. Please note that such forward-looking statements involve known and unknown risks and uncertainties that could cause actual results and future events to differ materially from those anticipated in such statements. Such risks and uncertainties include fluctuations in metal prices, unpredictable results of exploration activities, uncertainties inherent in the estimation of mineral reserves and resources, fluctuations in the costs of goods and services, problems associated with exploration and mining operations, changes in legal, social or political conditions in Finland, and lack of appropriate funding, all of which could among other things, prevent any of the forward looking statements in this presentation from coming to fruition or lead to a delay in the development of mining operations. 2
Endomines AB in a nutshell Exploring the true potential of the Karelian Gold Line Quoted on NASDAQ OMX Stockholm and OMX Helsinki Focus on gold production and exploration along the Karelian Gold Line - 40 km of gold prospective greenstone belt Pampalo Gold Mine project completed in December 2010 in line with the budget of 20 million Commercial production commenced in February 2011 Production target 800-900 kg gold/year Long term development plans implemented Well operating mine and organization Strong Social License to operate Zero Harm HSE-policy Straightforward environmental permitting Excellent safety record Long term commitment to local community development Finland Gold Industrial mineral Porkonen Kivimaa Ilmenite Pampalo Karelian Gold Line Helsinki 3
Pampalo in the Centre of the Karelian Gold Line Discovered in 1990 and explored by Finnish Geological Survey Developed by Outokumpu 1995-1999 as an open pit and decline operation down to 280m underground Historical production 115,000 tons of ore 15.3 g/ton strong indication of high grade deposits in the area Efficient production plant: The initial design capacity of 230,000 tpa in 2011 was successfully upgraded in 2013 to > max 450,000 tpa High utilization rate 93% Personnel Significant local employer 70 % locals 60 own staff and 30 contractors Strong social license and local support for operations Company applies Zero Harm-policy in all operations Excellent safety performance No environmental issues 4 Exploring the true potential of the Karelian Gold Line
Pampalo Gold Mine Mucking Ventilation raise drifting 14 Apr 2010 7 20-Jan-16
Safety Exploring the true potential of the Karelian Gold Line Number of days without accidents: Endomines 426 days Contractors 336 days 8
Exploring the true potential of the Karelian Gold Line 9 Environmental
Positive local publicity Several mines have had environmental challenges in Finland during last year / months But not Endomines or Pampalo!!! 10 29-Apr-11
Social License to Operate Exploring the true potential of the Karelian Gold Line Reasonably small operator Local operator - company founded 1996 in Hattuvaara Local presence since that Training and employing locals Supporting local community Regular open doors lots of visitors Zero Harm principle for nature and employees Excellent Safety records No environmental problems 11
Pampalo underground: Production and Exploration Status November 2014 Exploration plan 2015: Expand infill drilling between leves +535 and +570 Exploration drilling of depth extensions Exploration of Pampalo South Historical mining 1995-1999: 115,000t @ 15.3 g/t (~1 600 kg Au) High gold content in small pockets Pampalo South Exploration target area +400 S2 S-1 depth 570m 6,8m @4,64 g/t Hidden highgrade pockets potentially +600 +500 S-3 depth 755m 2,55m@4,3g/t Pampalo main lodes open at depth 1999-2014 Stopes 2015 Stopes N S 12 20-Jan-16
Silver Lake Gold Mine, Australia It has been done before!! Committed exploration led to success!!! Ventilation raise -200 Rosemary -200 Daley East Daicy Milano Daley West -400 Mine developed to -410 level -400-600 Daicy Milano Haoma West -600 Haoma Mine developed to -640 level -800 Multiple new structures -800 Significantly increased mineral resources and reserves as a result of six years of committed exploration 13
Pampalo Ore Reserves and Mineral Resources development (longitudinal projection) Year 2010 Year 2015 D T-134 T-153 +500 D +600 +700 Planned decline extension
Pampalo Deeps Exploration project- longitudinal projection (illustrative not in scale) T-960: 12m@3.8g/t Au Incl. 1m@21.8g/t Au T-932: 3m@6.5g/t Au T-972: 4m@6.0g/t Au T-934: 1m@63.2g/t Au and 9m@4.4g/t Au Incl. 1m@21.9g/t Au T-942: 6m@10.6g/t Au 6m@5.1g/t Au 6m@10.6g/t Au T-968: 4m@11.2g/t Au Incl. 1m@31.2g/t Au T-943: 10m@3.5g/t Au T-954: 7m@5.1g/t Au T-917: 17m@3.2g/t Au T-916: 7m@12.2g/t Au S3: 2.6m@4.3g/t Au +700 T-942: 6m@6.6g/t Au and 10m@6.9g/t Au T-1004: 7m@3.4g/t Au T-1006: 10m@18.2g/t Au Incl. 5m@33.7g/t Au +600 T-982: 2m@15.8g/t Au Incl. 1m@29.6g/t Au T-921: 4m@4.5g/t Au And 1.1m@9.0g/t Au T-1003: 10m@3.6g/t Au Incl. 1m@25.9g/t Au T-1007: 8m@7.2g/t Au T-1034: 2.3m@4.2 g/t Au T-1038: 4.7m@4.1g/t Au Incl. 1m@16.4g/t Au +500? T-1035: 6.5m@3.2 g/t Au T-1036: 5.2m@1.8 g/t Au T-989: 3m@6.7g/t Au Incl. 1m@14.8g/t Au S2 T-1023: 6m@13.6g/t Au Incl. 1m@50.9g/t Au T-986: 1m@18.1g/t Au T-1010: 5m@6.1g/t Au T-1016: 6m@3.8g/t Au T-1017: 3m@4.2g/t Au Decline D N-N2- CE-C S2 T-1043: 3.3m@4.1 g/t Au and 3.1m@3.6 g/t Au T-1050: 5m@4.7g/t Au T-1028: 5m@3.5g/t Au T-922: 4m@6.7g/t Au and 9m@5.6g/t Au S T-1020: 4m@3.3g/t Au T-1023: 6m@13.6g/t Au Incl. 1m@50.9 g/t Au T-1025: 10m@6.4g/t Au T-1051: 3.2m@4.1g/t Au T-1029: 4m@2.4 g/t Au T-1027: 7m@1.6g/t Au T-936: 3m@3.8g/t Au T-910: 6m@ 5.3g/t Au T-1011: 4m@11.5g/t Au T-134 T-985: 6.1m@9.6g/t Au T-988: 1m@11.5g/t T-153 Au T-862: 6m@3.5g/t Au T-930: 2m@3.9g/t Au Pampalo South: - New mneralization zone discovered T-965: 2m@54.8g/t Au incl. 1m@108g/t Au T-977: 4m@6.8g/t Au T-976: 5m@3.0g/t Au T-997: 3m@14.5g/t Au T-981: 5m@5.0g/t Au Incl. 1m@15.1g/t Au T-993: 2m@11.9g/t Au T-994: 3m@8.0g/t Au Mined out
Pampalo Ore Reserves and Mineral Resources (longitudinal projection) Planned exchaust ventilation raise D-zone resource (Endomines estimate) D T-134 Planned reserve (Endomines estimate) T-153 Decline +500 SRK resource (2016 mining 100 000t) D +600 +700 Planned exploration drift and core drilling Planned decline extension Planned core drilling Planned stopes Mined out
Southern Cross greenstone belt vs Karelian Gold Line - Archaean (2.7 Ga) old gold critical greenstone belts Ilomantsi vs. Southern Cross greenstone belt Gold exploration and production summary Units Ilomantsi (Karelian Gold Line) Central Southern Cross Belt length km 90 110 Belt width km 0.5 10 0.5 15 Claims coverage % <20 100 Gold exploration since year 1986 1888 Gold produced total oz 100 000 >10 000 000 Gold produced in 2008 oz 0 157 147 Gold mines in production 2 4 Known reserves & resources oz 350 000 >2 000 000 Data compiled by GSF / Dr P Eilu
KARELIAN GOLD RUSH 2015 IS A GLOBAL EXPLORATION CHALLENGE OPEN TO EVERYBODY: Individuals, Universities, Groups, Geoscientists, Mathematicians, Other professionals, Amateurs, etc.
http://goldrush.endomines.com/ http://louhigold.sito.fi/
Reshaping of Endomines AB Selective Mining and exploration Hedge closed and converted to a long term loan Very promising exploration results from the Pampalo Deeps Recent high grade discoveries will allow selective mining plan for 2016 Targeting only high grade areas Reduced personnel ~30+ person Reduced tonnage ~ 125 000 tpa Run the processing plant in campaigns 7-10 days /month => Cash Cost reduction well below expected actual gold prices Focus on Pampalo Deeps area exploration and development Target to increase resources and reserves Be prepared for expected gold price increase (2017-2018) Processing capacity 400-450 000 tpa Karelian Gold Rush! 41 20-Jan-16
Board of Directors, CEO Exploring the true potential of the Karelian Gold Line Staffan Simberg (b. 1949), Chairman of the Board Board member since 2011, Chairman of the Board since 2013, Chairman of the Remuneration Committee, Member of the Audit Committee and the Nomination Committee. Studies at the Helsinki Technical University and MBA, IMD, Geneva. Current positions include: Board chairman in NEZ-Invest AB and Simberg & Partners AB. Board member in Elektrobit Oyj, Elektrobit Technologies Oy, Nordic Vehicle Conversion AB and Silva Group AB. Holdings in Endomines, own and related parties: 1 500 000 shares. Principal work experience: 20 years with Nokia Corporation, Member of the Advisory Board in Landis & Gyr AG, Industral adviser in Metso Oyj and Cargotec Oyj, Board chairman in Metso Panelboard Oy and Board member in Infocare AB. Board advisor in Valmet Automotive. Meg Tivéus (b. 1943), Board member Board member since 2012, Chairman of the Audit Committee. Master of Science in Business and Economics, Stockholm School of Economics. Current positions include: Board chairman in Arkitektkopia AB, Folktandvården i Stockholm AB, Björn Axen AB, Readly AB and Close AB. Board member in Swedish Match AB, Nordea Fonder AB and Styrelseakademin AB. Holdings in Endomines, own and related parties: 10 000 shares. Principal work experience: CEO of Svenska Spel AB, Senior Vice President at Posten, Vice President Holmen AB and Åhlens AB. 45
Board of Directors, CEO Exploring the true potential of the Karelian Gold Line Rauno Pitkänen (b. 1950), Board member Board member since 2010, Chairman of the Technical Committee, Member of the Remuneration Committee. M.Sc (Geology, Mining and Metal Processing), Helsinki Technical University, Finland. Holdings in Endomines, own and related parties: 7 380 shares. Principal work experience: Senior manager positions at Sandvik Mining and Construction Finland Oy, Outokumpu Group and Tara Mines Ltd. Stefan Månsson (b. 1951), Board member Board member since 2013, Member of the Audit Committee and the Technical Committee. Master of Science in Mining and Metallurgy, Royal Institute of Technology, Stockholm. Current positions include: Board chairman in smanson konsult AB, Board member Northland Resources S.A. since 2013 Holdings in Endomines, own and related parties: 0 shares. Principal work experience: Managing Director of Galmoy Mines Ltd and Zinkgruvan Mining AB, Chairman of the Board of the Irish Mining and Exploration Group, IMEG and of the Swedish Mining Association, SGF, Chief Mine Geologist, Mine Manager and Production Manager at AB Statsgruvor, LKAB. 46
Board of Directors, CEO Exploring the true potential of the Karelian Gold Line Ann Zetterberg Littorin (b.1967), Board member Board member since 2015, Member of the Audit Committee. Degree of Master of Science in Business and Economics, University of Stockholm 1995 Current positions include: Holdings in Endomines, own and related parties: 0 shares. Principal work experience: CFO positions in Private Equity operations and corporate acquisitions Markus Ekberg (b. 1957), CEO of Endomines AB, Endomines Oy and Kalvinit Oy since 2009 Current positions include: Board member in Kodal Minerals PLC; board member and deputy chairman in FinnMin; Indirect part-owner, CEO and chairman of Tetra Minerals Oy; CEO and owner of Karelian Resource Service Oy Eurogeologist M.Sc (Geology and Mineralogy), Turku University, Finland. Qualified Person (Australian JORC and Canadian NI-43-101 stock exchange codes), Kvalificerad Person (Svemin/FinnMin) Principal work experience: 30+ years experience from international mining industry in Finland, Norway, Ireland and Australia, Holdings in Endomines, own and related parties: 180 000 shares, 800 000 options. 47
Endomines Summary Unique position for an exploration company to control mineral rights of 40 km of coherent and prospective gold belt Great potential for high grade deposits in the area Well operating mine and processing plant in the center of the belt Experienced and efficient organization Successful strategy of developing satellite mines Strong Social license to operate Zero Harm HSE-policy Straightforward environmental permitting Good safety record Long term commitment to local community development 48
ONE TEAM ONE GOAL DETERMINED TO DELIVER Responsibility Respect and appreciation Safety and Zero Harm principle Cooperation Continuous development
Proposed rights issue - SEK 0.09/EUR 0.01 per share Rights issue: Shares Structure: One (1) existing share entitles to three (3) subscription rights. One (1) subscription right entitles to one (1) new share Subscription price SEK: SEK 0.09 per share Subscription price EUR: EUR 0.01 per share Proceeds: Gross SEK 70.8 m, fully subscribed Secured level: Rights issue is secured to 11.5 percent through subscription undertakings Dilution 75 percent 50
The rights issue structure One (1) share on the record date, December 21, 2015 entitles to three (3) subscription rights One (1) subscription right entitles to subscription of one (1) new share at SEK 0.09/ EUR 0.01 SEK 0.09/ EUR 0.01 51
Indicative time schedule Extraordinary General Meeting December 17, 2015 Record date December 21, 2015 Subscription period January 11-25, 2016 Trading in subscription rights January 11-19, 2016 Board allocation meeting January 28, 2016 Proceeds distributed to Endomines Week 5, 2016 52
ONE TEAM ONE GOAL DETERMINED TO DELIVER Responsibility Respect and appreciation Safety and Zero Harm principle Cooperation Continuous development