LCL RESOURCES LIMITED — AGM Information 2014

Jun 5, 2014

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Towards a mid-tier copper producer

Annual General Meeting Operations

29 May 2014

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Disclaimer

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Key assets
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• Portfolio of mineral assets in top two copper producing countries - Peru and Chile

• Los Calatos, Peru – long life, low cost copper-molybdenum project

  • Porphyry hosted: 1.42Bt at 0.47% Cu & 0.022% Mo (0.15% & 0.35% CuEq cut-off)

  • Open pit and underground (block cave) mining operation

  • Conventional sulphide flotation

• Mollacas, Chile – low cost SX-EW copper project with potential for early cash flow

  • Oxide and supergene: 15.5Mt at 0.51% CuT (0.2% Cu cut-off)

  • Open pit operation

• Heap leach, solvent extraction/electrowinning

• Vallecillo, Chile – advanced polymetallic exploration project

• Breccia hosted: 8.9Mt at 0.80g/t Au, 9.94g/t Ag, 1.01% Zn & 0.32% Pb (0.2g/t Au cutoff)

• Additional resources to be delineated

• Potential open pit operation with gravity and conventional sulphide flotation

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Located in prolific Cu – Mo mining district
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Close proximity to substantial open pit mining operations

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Unit	Cuajone	Toquepala	Cerro Verde
Started production	1976	1960	1976
Reserves: ¹ Cu grade	0.50%	0.37%	0.38%
Mo grade	0.018%	0.017%	0.013%
Cut-off grade (CuEq)	0.14%	0.16%	0.17%
Strip ratio	4.37	7.67	0.76
2012 Cu production (kt)	159	152	270
Open Pit Depth (m)	±800	±825
Net Unit Cost (C1) $/lb ²	1.08	1.72	1.31

¹ As at December 2012; ² BMO Equity Research 2012

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Los Calatos in brief
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100% owned, large • Measured, Indicated and Inferred Mineral Resource of 1.42Bt at 0.47% Cu & undeveloped Cu-Mo 0.022% Mo (6.7Mt Cu metal) project

Located in prolific Cu- • Nearest neighbours include the Toquepala, Cuajone and Cerro Verde mining Mo mining district of Southern Peru operations and the Quellaveco project

• Project of National Right to acquire surface rights/freehold directly from the Peruvian Interest government for development (12,700ha)

Comprehensive exploration program

  - **Total of 125,000m of drilling completed (135 drill holes)**

• Mining Scoping Study by NCL confirms Los Calatos as potential long life, low

• Scoping Study cost, copper mine

• Optimisation of Optimisation work by RPM confirms opportunity to increase production rate •

• production schedule C1 Cash Operating Costs US$1.12/lb Cu (net of by-product credits)

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Regional infrastructure
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 Road and Access

• Close to Pan American highway (50km) and the Port of Ilo (100km SW)

 Power Supply

• Power likely to be sourced from the regional city of Moquegua 32km SSE of the project

• Power costs low

 Services Corridor

• Services corridor to be established to the coast – pumping of sea water to site and of concentrate to a port loading facility

 Water

• Sea water to be accessed for metallurgical processing

• Small reverse osmosis plant

Proposed Services Corridor

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Moquegua
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 Freehold – Site Infrastructure

• Land to be purchased from government

Source: Google Earth

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Simplified geology and Cu and Mo isograde lines (1900m RL)
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Key Facts

• Supergene mineralisation in upper 250m

• Near surface high-grade Cu & Mo domains in northwest

• Mineralisation largely located in porphyry & adjacent wall rock

• Mineralisation extends to depths in excess of 1,500m

• Younger diatreme complex partly mineralised (margins)

• Porphyry developed in favourable structural setting relating to the Incapuquio Fault System

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Geological sections – distribution of Cu mineralisation
Diatreme Complex
Porphyry
Porphyry & wall-rock
Pre-cursor Pluton
Toquepala Volcanics
0 500m
0.075% Cu
Section 10300E 0.25% Cu Section 10900E
Anhydrite Surface
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Mineral Resource Statement – February ‘13
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Mineral Resources to vertical depth of 700 metres below surface (above 2300 masl)

Category	Tonnes (millions)	Cu %	Mo %
Measured	222	0.37	0.031
Indicated	191	0.38	0.020
Total Measured & Indicated	413	0.37	0.026
Inferred	80	0.42	0.009

Note: Reported at a cut-off grade of 0.15% CuEq

Mineral Resources sub-700 metres below surface (below 2300 masl)

Category	Tonnes (millions)	Cu %	Mo %
Measured	206	0.49	0.032
Indicated	437	0.52	0.020
Total Measured & Indicated	643	0.51	0.024
Inferred	283	0.52	0.018

Note: Reported at a cut-off grade of 0.35% CuEq

Total contained copper

• 7.8 million tonnes CuEq metal

Note: CuEq based on Cu = $2.75/lb and Mo = $15.00/lb

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Optimised L3_Model – RPM (August 2013)
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Mining infrastructure

 Open pit • Strip ratio of 3.36:1 • Pit slopes 41º to 47º  Underground block cave • 3 Levels • 10 bulk mining stopes • Twin decline system for ore conveyor system and personnel & materials • Four raise-bored ventilation shafts • Primary crusher located underground

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Optimised L3_Model - Annual tonnage & CuEq grade
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30,000 1.0
0.9
25,000
0.8
0.7
20,000
0.6
15,000 0.5
0.4
10,000
0.3
0.2
5,000
0.1
0 0.0
OP_P OP-SP_P UG_P CuEq
Tonnes (000’s) CuEq Grade (%)
Year -4 Year -3 Year -2 Year -1 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20 Year 21 Year 22 Year 23 Year 24 Year 25 Year 26 Year 27 Year 28 Year 29 Year 30 Year 31 Year 32 Year 33 Year 34
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Underground development

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Construction of plant & infrastructure

Pre-strip Establish high grade stockpile ex open pit Open pit ore to mill

High grade stockpile to mill

Underground ore to mill

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Optimised L3_Model - Tonnes mined and grade
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Optimised L3_ Model - Total Tonnes Mined (RPM – August 2013)	Optimised L3_ Model - Total Tonnes Mined (RPM – August 2013)	Optimised L3_ Model - Total Tonnes Mined (RPM – August 2013)	Optimised L3_ Model - Total Tonnes Mined (RPM – August 2013)
Mining Operation	Tonnes (million)	Cu %	Mo %
Open Pit	362	0.37	0.023
Underground – Block Cave	449	0.56	0.035
Total	811	0.47	0.029

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• 3.85 million tonnes Cu & 0.24 million tonnes Mo

Total metal mined

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Key operating parameters – Life of Mine
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Combined Open Pit & Underground Operational Parameters

Parameter	Life of Mine
	Optimised L3_Model
Total tonnes mined (million)	811
Average annual tonnes mined (million)	23.9
Average annual copper in concentrate (kt)	98.4
Average annual molybdenum in concentrate (kt)	4.8
Strip Ratio (Open Pit)	3.36:1
Mining costs (US$/t tonnes milled)	7.72
Processing costs (US$/t tonnes milled)	4.58
G & A costs (US$/t tonnes milled)	0.51
By-product credit (US$/lb payable copper)	0.73
Cash Operating Costs net of credits (US$/lb Cu)	1.12
Pre-production capital (US$ million)	1,320

• Low C1 Cash Operating Costs US$1.12/lb Cu places project in lowest quartile of producers

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Current work
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• Preparatory work for pre-feasibility study includes:

• Design of infill drilling program

  • Supergene zone

  • Geotechnical

  • Sterilisation

• Geotechnical work in support of planned open pit and underground block cave operations

• Phase 2 metallurgical test work

  • Use of seawater as a processing medium

• Location of site infrastructure (e.g. tailings dam)

• Positioning of access corridor to the coast

• Oceanographic studies – loading facility

• Commencement of pre-feasibility study dependent on funding

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Chilean Projects
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Chilean projects located to east of La Serena

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Early Stage Advanced Scoping Study Pre-Feasibility Feasibility Production
Mollacas
Cu
Vallecillo
Vallecillo (La Colorada)
Au - Zn - Ag - Pb
Isidro
Loica Loica Cu - Mo
La Piedra
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Mollacas in brief
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100% owned, small • undeveloped Copper Measured and Indicated Mineral Resource of 15.5Mt @ 0.51%CuT Leach project

Located in close • Close to the town of Rapel with road infrastructure and access to power and proximity to water infrastructure

Comprehensive exploration program

  - **Total of 16,280m of drilling completed (119 drill holes)**

• Comprehensive • Phase 3 test work results support higher copper recoveries and lower acid

• metallurgical test work consumption

• completed

• Scoping Study completed by SRK (2008) updated to include latest

• Scoping Study metallurgical test work results, and revised Opex and Capex estimates

Robust financials

• Life of Mine of >7 years producing up to 8,000t copper cathode per annum

• After tax NPV @ 8% of US$75 million (Cu price = US$3.10/lb)

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Mollacas Copper Leach Project
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• Located 55km ESE of Ovalle

• Project area comprises 33km[2][of tenements ]

• Includes 20 Exploitation Concessions

• 179ha of surface rights held

• Water rights held to ±175 litres/sec from two

• canals

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Legal - Access

• First Extension to Initial Servidumbre/Easement declared invalid

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Mollacas target – supergene cap of primary porphyry
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Secondary Sulphide Zone – highest copper grades (50 – 100m below surface) Secondary Sulphide Zone – highest copper grades (50 - 100m below surface)

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W COPPER LEACH PROJECT E
Oxide Zone
Secondary Sulphide Zone
CuT %
Transitional Sulphide Zone
Primary Sulphide Zone
0 100m
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Copper leach project – Mineral Resource Estimate
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Mineral Resource Estimate – Oxide & Secondary Sulphide Zone (July 2012)

Category	Tonnes (Mt)	Grade	Grade	Grade
		CuT (%)	Cu_Sol (%)	Au (g/t)
Measured	11.2	0.55	0.44	0.124
Indicated	4.3	0.41	0.29	0.138
Total	15.5	0.51	0.40	0.128

Contained Metal	Contained Metal	Contained Metal
CuT (t)	Cu_Sol (t)	Au (oz)
61,424	49,140	44,523
17,687	12,510	19,140
79,111	61,650	63,663

Note: Reported at a 0.20% CuT cut-off grade

Note: Rounding-off of figures may result in minor computational discrepancies

Data support : July 2012 Resource

• 95 diamond drill holes (12,784m) and 24 reverse circulation drill holes (3,496m)

Mineral Resource Low grade primary porphyry

• Fully converted to Measured and Indicated categories

• Transitional and primary resource of 18.8Mt at 0.28% CuT and 0.187g/t Au

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Mollacas progressing towards development
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 Completed

• Updated Scoping study

• Resource definition drilling

• Geotechnical design work for open pit & leach pads

• Phase 3 column leach test work

• Preliminary layout of mining infrastructure

• Environmental baseline study

• Provisional LoM Financial Model

 Planned

• Feasibility Study (end-2014)

• Environmental Impact Study (end2014)

Preliminary layout – SX/EW operation

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OP
WD
WD
AG
HL
CD
SX
OP Open Pit HL Heap Leach SX SX/EW Plant
AG Crushing/Agglom CD Containment dam WD Waste Dump
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Phase 3 metallurgical test work yields positive results
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Metallurgical testing

• 16 columns representing 5 geometallurgical units

• Acid consumption in agglomeration stage reduced from 30kg/t to 10kg/t ore leached

• 85% soluble copper

• Ore crush size of P80 12mm to 16mm

• Stacked ore depth of 6 metres

• Opportunity to reduce acid consumption in agglomeration stage further

Checking the flow rates at the top of the 6 metre columns, SGS laboratory, Santiago, Chile.

• Two Stage Leach

• 90 day Primary Leach at 5L/hm² at 6 g/L H2SO4

• 210 day Secondary Leach at 2.5 L/hm² at 3 g/L H2SO

• Solution management via a series/parallel SX configuration

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Life of mine financial model yields robust results	Life of mine financial model yields robust results	Life of mine financial model yields robust results	Life of mine financial model yields robust results	Life of mine financial model yields robust results
	Physicals	Unit	Parameter
	Mining rate	tpd	6,108
	Crushing rate	ktpa	2,500
	Tonnes leached	kt	14,500
	Average Cu_Sol	%	0.42%
	Payable Cu	t	51,765
	LoM	Years	7
	Financials	Unit	Parameter
	Total Capital Expenditure	US$000’s	52,306
	C1 Cash Operating Costs	US$/lb Cu	1.23
	Project Economics	Unit	Parameter
	NPV (after tax) @ 8%	US$000’s	74,921
	IRR	%	37.2%
	Payback	Years	2.44
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Status
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 Corporate

• Cash-on-hand as at 31 March 2014 of A$5.5m

• In Situ mining inventory of 3.9 million tonnes (8.5 billion lbs) contained copper to be mined over 34 years

 Los Calatos

• Highly deliverable with designated status of ‘Project of National Interest’

• Optimisation Study (August 2013) identifies project as potential long life, low cost, copper producer

• Funding requirements necessitate the introduction of a funding partner

• Ability to transact impacted by low market capitalisation of Company – undervalues the project

 Mollacas

• Robust financial returns

• First Easement Extension declared invalid which impacts on access

• Awaiting results of appeal lodged with the Supreme Court of Chile

• Securing social licence imperative

• Feasibility Study and EIS to be completed once access is resolved

 Way Forward

• Restructuring has provided for funding to early FY2015

• Growth opportunities beyond existing asset base being assessed

• Funding options for the medium term currently under consideration

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