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Delivering a New Source of Gemstones to the World

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... Chile, Brazil, Hong Kong and Australia. ... Ensures all Greenlandic communities and the economy as a whole will benefit from the Aappaluttoq mine. – PowerPoint PPT presentation

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Title: Delivering a New Source of Gemstones to the World


1
Delivering a New Source of Gemstones to the World

www.truenorthgems.com
TSX-V TGX
Investor Presentation
January 2015
2
Cautionary Statement
  • The information contained in this document is
    proprietary information of True North Gems Inc.
    (the Company). It is the property of the Company
    and shall not be used, disclosed to others or
    reproduced without the express written consent of
    the Company. If consent is given for
    reproduction in whole or in part, this notice
    shall appear in any such reproduction.
  • This document contains forward-looking
    information or forward-looking statements within
    the meaning of certain securities laws, including
    provisions of the Securities Act (Ontario) and
    the provisions for safe harbour under the United
    States Private Securities Litigation Reform Act
    of 1995 concerning anticipated developments and
    events which the Company has a reasonable basis
    to believe may occur in the future. These
    forward-looking statements are based on
    projections, expectations and estimates as of the
    date of this document. Forward-looking
    statements are provided for the purpose of
    providing information about management
    expectations and plans relating to the future.
    All of the forward-looking statements made in
    this document are qualified by these cautionary
    statements and those made in other filings with
    the securities regulators of Canada.
  • Forward-looking statements include, but are not
    limited to, statements with respect to the future
    price of rubies and other gemstones, the
    estimation of mineral resources and reserves, the
    realization of mineral resource estimates, the
    timing and amount of estimated future production,
    costs of production, capital expenditures, costs
    and timing of the development of new deposits,
    timing of completion of pre-feasibility studies,
    success of exploration and development
    activities, permitting time lines, currency
    fluctuations, requirements for additional
    capital, government regulation of exploration
    operations, environmental risks, title disputes
    or claims, completion of acquisitions and their
    potential impact on the Company and its
    operations, limitations on insurance coverage and
    the timing and possible outcome of pending
    litigation. In certain cases, forward-looking
    statements can be identified by the use of words
    such as plans, expects or does not expect, is
    expected, budget, scheduled, estimates,
    forecasts, intends, anticipates or does not
    anticipate, or believes, or variations of such
    words and phrases or statements that certain
    actions, events or results may, could, would,
    might or will be taken, occur or be achieved.
  • Forward-looking statements involve known and
    unknown risks, uncertainties and other factors
    which may cause the actual results, performance
    or achievements of the Company to be materially
    different from any future results, performance or
    achievements expressed or implied by the
    forward-looking statements. Such factors include,
    among others risks related to the exploration
    and development of mineral properties actual
    results of current exploration activities
    current global economic conditions conclusions
    of future economic evaluations changes in
    project parameters as plans continue to be
    refined environmental risks future prices of
    rubies and other gemstones currency
    fluctuations possible variations in ore
    reserves, resources, grade or recovery rates
    failure of plant, equipment or processes to
    operate as anticipated accidents, labour
    disputes and other risks of the mining industry
    risks related to joint venture operations delays
    in obtaining governmental approvals or financing
    or in the completion of development or
    construction activities and those factors
    discussed in the section entitled Risk Factors in
    the annual information form as required by the
    regularity authorities.
  • Although the Company has attempted to identify
    important factors (which it believes are
    reasonable) that could cause actual actions,
    events or results to differ materially from those
    described in forward-looking statements, there
    may be other factors that cause actions, events
    or results not to be as anticipated, estimated or
    intended. There can be no assurance that
    forward-looking statements will prove to be
    accurate, as actual results and future events
    could differ materially from those anticipated in
    such statements. Accordingly, readers should not
    place undue reliance on forward-looking
    statements. Such statements are based on
    managements best judgment based on facts and
    assumptions that management considers reasonable,
    which may prove to be incorrect, including but
    not limited to assumptions about general
    business and economic conditions interest rates
    and foreign exchange rates market competition
    the availability of financing changes to tax
    rates and benefits the Companys costs of
    exploration, the ability of the Company to
    attract and retain skilled employees and ongoing
    relations with Company employees and business
    partners. The Company makes no representation
    that reasonable business people in possession of
    the same information would reach the same
    conclusions. Other than as specifically required
    by law, the Company undertakes no obligation to
    update any forward-looking statement to reflect
    events or circumstances after the date on which
    such statement is made, or to reflect the
    occurrence of unanticipated events, whether as a
    result of new information, future events or
    results or otherwise.

3
Greenlandic Ruby Producer
  • True North Gems Inc. with shares trading on the
    TSX Venture Exchange under the symbol TGX
  • Dedicated to the exploration and development of
    coloured gemstone deposits
  • Committed to the realization of shareholder value
    through development of the beneficially sourced
    commercial ruby mining operation, in partnership
    with the people of Greenland
  • Key business attributes
  • Core asset the Aappaluttoq Ruby-Pink Sapphire
    Deposit in Greenland
  • Commencement notice for construction issued
    September 23, 2014
  • Exploitation Permit granted March 2014
  • Ruby and pink sapphire exploration inventories
    offer near term revenue and short term market
    penetration
  • Confirmed 9 year mine life with expansion
    potential
  • Potential to penetrate 10 of the world ruby
    market of US 2 Billion annually
  • Excellent management and board advisors with
    successful and broad experience in all facets of
    the coloured gemstone business

4
Corporate Snapshot
Capital Structure
Issued and Outstanding 297,232,049
Warrants 9,313,990
- avg. strike price 0.10
Options 19,350,000
- avg. strike price 0.13
Fully Diluted 325,896,039
Share Price (Jan 30) 0.155
52-week High/Low 0.17/0.06
Market Cap (Jan 30th) 46.5 million
Owned by Board/Mgmt 8 million (2.7)
Other Insider(s) 36.9 million (12.4)
Historical Trading Price Volumes
Reserves Resources Ownership Tonnes Corundum ct/t Attributable ct
Indicated
Aappaluttoq 100 189,150 1,567 296,330,000
Inferred
Aappaluttoq 100 77,160 1,417 109,350,000
The Mineral Resource include Ruby and Pink Sapphires which are the chrome saturated versions of corundum The Mineral Resource include Ruby and Pink Sapphires which are the chrome saturated versions of corundum The Mineral Resource include Ruby and Pink Sapphires which are the chrome saturated versions of corundum The Mineral Resource include Ruby and Pink Sapphires which are the chrome saturated versions of corundum The Mineral Resource include Ruby and Pink Sapphires which are the chrome saturated versions of corundum
5
Management Team
  • Nicholas Houghton, President CEO - Accredited
    Gemologist with 30 years of international
    experience in the jewellery manufacturing and
    gemstone exploration industry. Member of Ethics
    Committee for the International Coloured Gemstone
    Association.
  • Bent Olsvig Jensen, Managing Director Greenland -
    15 years experience practicing management and
    negotiations with both public and private
    institutions in Greenland. Vast experience in
    cooperation with the Greenlandic authorities at
    all levels, and essential knowledge and insight
    on operations management in Greenland.
  • Jens B. Frederiksen, VP, Operations Greenland
    over 23 years experience in the police force and
    has more than 18 years experience in practicing
    management in puplic institutions and political
    organisation. He has been member of the
    Parliament of Greenland for the last 9 years. He
    has in that period been Vice Premier and Minister
    for Housing, Infrastructure and Transport in four
    years. Frederiksen has vast experience in
    security, logistic and personell management. He
    has essential knowlegde and insight in societal
    matters in Greenland and cooperation in
    international affairs.
  • Ronald Hall, VP Engineering - 35 years of
    diverse industry experience in management,
    operation, evaluation, and design of global
    mining projects. Former Partner and VP of Mining
    at Wardrop Engineering Inc. involved in
    large-scale expansion and growth within the
    companys Canadian operations, and successful
    opening of international branches in China,
    Chile, Brazil, Hong Kong and Australia.
  • Jacqueline Tucker, CFO - Qualified Chartered
    Accountant with 30 years of public practice
    experience as an auditor and advisor to public
    companies. Member of the Alberta, Ontario, and
    British Columbia Institute of Chartered
    Accountants.
  • Andrew Fagan, Project Manager - Diamond and
    gemstone geological consultant with B.Sc. (Hons)
    and Master of Science degrees in gemstone
    geology. Fellow of the Geological Society of
    London and Chartered Geologist (C.Geol.).

6
Board of Directors
  • Robert Boyd, Director, Chairman - Mining
    executive with more than 35 years experience in
    exploration, executive-level management,
    corporate finance, and corporate governance.
  • Nicholas Houghton, Director, President CEO -
    Accredited Gemologist with 30 years of
    international experience in the jewellery
    manufacturing and gemstone exploration industry.
    Member of Ethics Committee for the International
    Coloured Gemstone Association.
  • Andrew Lee Smith, Director - Professional
    Geologist with 25 years of experience
    successfully exploring, developing and operating
    North American base and precious metals mining
    and gem projects.
  • John Ryder, Director - 30 years of experience in
    worldwide mineral exploration.
  • William Anderson, Director - Geologist and
    retired mining executive with over 40 years
    experience in exploration and operations.
  • David Parsons, Director - Vice-President,
    Insurance at Goldcorp Inc. responsible for
    corporate risk, including mining operations loss
    control, business continuity planning and
    insurance.
  • Peter Friedmann, Director - Broad spectrum of
    knowledge in both the private and public business
    sectors, and is currently a principal of a
    venture capital company investing in technology
    driven companies.

7
Advisory Board
  • Raymond N. Simpson - 20 years of experience in
    the diamond industry. Currently an Executive
    Vice-President of Dominion Diamond Corp.,
    formerly known as Harry Winston Diamond
    Corporation. Extensive experience in a variety of
    roles ranging from mine resource evaluation to
    supply/demand forecasting and consumer marketing.
  • Warren Boyd - Highly experienced and respected
    geologist and gemologist with 25 years of
    experience. Currently serves as Ambassador to
    Canada for the International Coloured Gemstone
    Association (ICA), and rough diamond value to
    various companies and Canadian Government
    departments including the RCMP and Canada Border
    Services.
  • Rock Lee - Founder and Chairman of China Stone
    Ltd., a company renowned for high precision
    cutting and polishing of precious stones with
    factories in Thailand and China.
  • Graham Nicholls - 25 years of management
    experience in the resource sector. Specialist in
    strategic planning, gemstone marketing, supply
    chain management, aboriginal and community
    relations, and external affairs.
  • Wilson Yuen - 30 years experience in the
    coloured gemstone industry, and Founder and
    Managing Director of Able Lapidary and Jewelry
    Ltd. Expertise includes developing joint ventures
    to promote coloured gemstones and target markets
    in Europe, United States, Japan, and most
    recently in China. Serves as President of the
    International Coloured Gemstone Association (ICA)
    and is a member of Hong Kong Accreditation
    Service (HKAS) on gemstone testing.

8
Aappaluttoq Ruby Project
  • Location Aappaluttoq, Greenland (200m
    elevation), 150 km south of the capital of Nuuk,
    20 km southeast of the community of
    Qeqertarsuatsiaat.
  • Mineralization Chrome Rich Corundum (Ruby and
    Pink Sapphire rough form a high percentage of the
    corundum resource)
  • Corundum Deposit Type Hard Rock
  • Exceptionally high grade, simple mining methods
  • Predictability of grade and geological expansion
  • Only 43-101 compliant deposit in the world
  • Extraction Methods Crushing, Optical Sorting
    and DMS
  • Corundum is hard host minerals are soft
  • Upgrading methods include hand cob, optical
    sorting, attrition milling and caustic wash
  • Finished Product Consistency in quality,
    colour, calibration and long term supply
  • Sales of rough and polished goods
  • A long term source of clean ruby that the market
    needs

Aappaluttoq Ruby Project
9
Aappaluttoq Mine
Current 9-Year Pit (Pink area in opposite image)
Exploration upside delineated from existing
drilling
10
Pit Design
Photo source LNS Rana Gruber Norway
11
Corundum Grade Primary Pit
Non-compliant Geological Structures in Red
12
Environmental Impacts
Present
After nine (9) years of operation
After closure of the mine
13
True North Gemstones
Rough and Polished
14
Ruby Exploration History
  • Company announces first Resource Estimate
  • Draft EIA is submitted for inclusion in the
    Exploitation Licence application
  • Initial SIA meetings are held
  • New Managing Director is appointed
  • Draft Aappaluttoq Exploitation Licence is
    formally filed with Bureau of Minerals and
    Petroleum (BMP) - June 13, 2011
  • Company enters into Public Hearing Process from
    Jun. 7 - Sept. 12 following acceptance of
    Exploitation Permit application
  • Company signs an Option related agreements with
    LNSG
  • White Book is submitted illustrating solutions
    to concerns raised in Public Hearing Process
  • Negotiations for Impact Benefit Agreement (IBA)
    and Royalty begin
  • On-site ground engineering is completed, all
    infrastructures are surveyed marked out ready
    for initiation of construction upon granting of
    mining licence
  • Primary objective of field season was to collect
    data to produce an independent preliminary
    economic assessment report (PEA) for Aappaluttoq
  • A total of 574kg of ruby pink sapphire
    concentrate was recovered
  • Initiation of environmental baseline study
  • Field operation is downsized due to financial
    markets
  • Program focuses on environmental baseline work
  • 2008 bulk sample is shipped from site to
    processing facility in Canada - ready for
    flowsheet development other engineering work
  • 2007-2008 core re-logged
  • High-grade mini-bulk samples are collected from 5
    ruby pink sapphire occurrences
  • Aappaluttoq (Big Red) is discovered. The
    multi-crystalline specimen is extracted and
    carved into Kitaa Ruby


2004
2005
2006
2007
2008
2010
2013
2014
2015
2009
2011
2012
  • 30-Year Exploitation Licence granted by
    Government of Greenland effective March 10, 2014
  • Company continues with IBA negotiations
  • Mine environmental monitoring, subsequent closure
    plan and advanced process engineering design are
    being finalised
  • True North begins first field season in Greenland
  • 3 tonne mini-bulk sample is extracted from
    Siggartartulik
  • A further 5 ruby occurrences are located in the
    district Ruby Island, Upper Annertusoq, Lower
    Annertusoq, Qaqqatsiaq and Qaqat Aqulerit
  • Two 30 tonne samples are collected from Kigutilik
    Aappaluttoq - the best occurrences known to
    date
  • Regional scale mapping prospecting identifies
    an additional 11 corundum occurrences, bringing
    total to 29 ruby pink sapphire showings
  • Independent rough cut stone valuation reports
    are completed on 1/8th concentrate split sample
    from 2006 Aappaluttoq bulk sample
  • Core-drilling targets mineralization below 2007
    drill defined area
  • 120 tonne bulk sample is removed from Aappaluttoq
    to better define grade continuity mineralization
  • Management technical team changes
  • Ground engineering processing flowsheet
    development advances significantly
  • First ground magnetic geophysical exploration
    grids are completed
  • Greenlandic Feasibility Study, Social Impact
    Assessment (SIA) Environmental Impact
    Assessment (EIA) are completed
  • Engineering processing plant design continues
  • Final changes to draft exploitation licence are
    submitted to the BMP
  • Ruby Track software is developed
  • Translations of key documents are completed
  • Danish Greenlandic websites launch as part of
    ongoing Corporate Social Responsibility

15
Operations Strategy
  • To become one of the Worlds leading coloured
    gemstone production and exploration companies.
  • Our sustainable operations will produce
    beneficially sourced and fully certified coloured
    gemstones for the Worlds most prestigious
    jewellers.
  • The ability to expand upon production will be
    initiated demand grows.

16
Strategic Growth Plan
  1. Achieve Full Production at Aappaluttoq -
    Aappaluttoq will be cornerstone of operations -
    Contains an indicated resource of 296 million
    carats of corundum within current pit and an
    initial mine life of 9 years
  2. Expansion of Near Mine Resources - The deposit
    hosts a further 109 million carats as an inferred
    resource - Additional ruby bearing rock is known
    to occur down-dip, below the current mine-pit
    design - Near pit exploration will be initiated
    during construction of mine
  3. Greenland Regional Exploration - Over the last 10
    years the Company has completed extensive
    regional exploration within the Fiskenaesset
    District (SW Greenland) - Company has identified
    a further 68 localities where corundum
    mineralization exists at surface within the 100
    owned exploration licences
  4. Worldwide Exploration - Company continues to
    evaluate the gemstone projects within its current
    worldwide exploration portfolio - The majority of
    these lie within Canada and have the potential to
    discover new gemstone districts similar to those
    owned by the Company on SW Greenland
  5. Acquisition - Currently numerous small
    gem-producing mines around the world. Majority of
    these mines are run by small private companies
    that would benefit from the Companys exploration
    and development expertise - Acquiring these
    producing mines would bring new assets into the
    Companys portfolio, create value for
    shareholders, and expand the Companys exposure
    to the Market.

17
Joint Venture Agreement
  • In August 2013, True North announced the signing
    of an Option and related agreements with LNS
    Greenland A/S (LNSG) allowing them to earn 20
    of Class A shares of True North Gems Greenland
    A/S (TNGG) through a 23 million US financing
    package for infrastructure and investment in the
    project.
  • In September 2014 LNSG increased their possible
    earn in to 27 of the issued and outstanding
    Class A shares of TNGG by increasing their
    financing to US31 million US for infrastructure
    financing and investment.
  • The five individual agreements lay out the
    strategic partnership structure for the future
    construction and operation of the Aappaluttoq
    Ruby Project

18
Exploitation Licence Application Process
  • Submission of draft EIA/SIA Technical
    Documents
  • Company Information Meetings
  • Formal Public Hearings
  • Submission of White Book, final EIA/SIA
    Technical Documents
  • Royalty Negotiation
  • Approval by Government Granting of
    Exploitation Licence
  • IBA Negotiation Completed
  • Supplemental Construction Permits Granted

19
Exploitation and Closure Plan, and IBA
  • Exploitation and Closure Plan
  • establishes the framework for the construction of
    mine facilities, production and site reclamation.
  • covers workers' health and safety, environmental
    protection, and project infrastructure, while
    also outlining other requirements.
  • IBA (Impact Benefit Agreement)
  • Ensures all Greenlandic communities and the
    economy as a whole will benefit from the
    Aappaluttoq mine.
  • It is a commitment by the Company to bring direct
    employment and training

20
Signing of Aappaluttoq Licence
Nick Houghton, President CEO
Bent Olsvig Jensen, Managing Director Greenland
21
Ruby Industry
Ruby diamond ring, by Chaumet featuring a ruby
weighing 32.08 carats Price realized 6,600,000
Ruby diamond Van Cleef Arpels ring Price
realized 4,226,500
Ruby diamond Camelia flower brooch by JAR Price
realized 4,270,000
Ruby and Diamond Ring, featuring the Graff ruby
weighing 8.62 carats Price Realized 8,600,000
22
Record Breaking Ruby Prices
  • April 12, 2005 Christies New York sale, an
    8.01 carat oval-cut Burmese ruby sold for
    2,200,000, setting a world auction record price
    for a ruby at 274,656 per carat
  • February 15, 2006 Lawrence Graf paid a record
    425,000 per carat for an 8.62ct Burmese ruby at
    Christies St. Moritz auction
  • 2007 2010 due to depressed market conditions
    and ensuing lack of material in 2008, there were
    no major ruby sales, however by 2010 prices began
    to climb to record levels
  • December 13, 2011 Christies New York auction,
    in which an 8.24ct ruby and diamond Van Cleef
    Arpels ring belonging to Liz Taylor sold for
    4,226,500, fetching a record price of 512,925
    per carat
  • May 14, 2012 Christies International in
    Geneva, a new record auction was set with the
    sale of a ruby and diamond ring from the
    collection of Brazilian-born philanthropist Lily
    Safra for 6,600,000. Also sold in the auction
    was a ruby and diamond Camelia flower brooch by
    JAR for 4,270,000
  • 2012 Ruby prices continue to climb with a 6.04
    Burmese ruby by Etcetera Limited selling for
    551,000 per carat, or 3.3 million
  • In November 2014, the Graff ruby returned to the
    Christies Geneva jewellery auction, this time
    selling for 997,700 USD per carat, or 8.6
    million. The sale of the Graff ruby has set a
    record not just for a ruby, but for a ruby price
    per carat.

23
Financial Projections
  • Aappaluttoq Project Production Schedule and
    Economics

Base Case
Base Case as per NI 43-101 compliant
Pre-Feasibility Study issued June 6, 2011
Economic Upside from Base Case
Economic forecast is a fully independently
assumption based upon research conducted by the
analyst and interjected into the pre feasibility
study numbers, this was not complied by the
Company.
24
Industry Highlights
  • Global ruby market size is approximately US2.1
    billion
  • Global pink sapphire market is approximately
    US58.8 million
  • Global jewellery sales are poised to grow at 4.6
    year-on-year to touch US230 billion in 2015
  • India and China together will emerge as a market
    equivalent to US market by 2015
  • With the collective action, the industry has the
    potential to grow to US280 billion by 2015 at a
    CAGR of 6.7
  • Source MVI Marketing

25
Sales and Marketing
  • All manufacturers look for consistency in both
    quality and availability for their product. We
    will be mining from a host deposit and can
    guarantee all clientele, both for rough and
    polished, these two highly important factors.
  • Who needs the rubies?
  • High-end watches, micro pave jewellery, large
    chain stores, and online sellers all need
    guaranteed supply.
  • True North Gems will be the only ruby and pink
    sapphire producer that can consistently guarantee
    this.

Jewellery - Roberto Demeglio
26
Looking Forward
27
Keys to Unlock Potential
  • 2015 Commencement of production
  • Sale of inventory already on-hand
  • Marketing and cash-flow from initiation with
    pre-ordered polished stones
  • Working jointly with the Greenland Government to
    bring worldwide awareness to the new source of
    certified rubies and pink sapphires

28
Potential Future Growth
  • Recognized Occurrences - Aappaluttoq Mine Site
    - Siggartartulik Kigutilik Expansion Targets
  • Expansion of production through familiarity of
    the deposit will be a natural lead to increase of
    profitability
  • Secondary geological expansion deposits have
    already been recognized by the Company and
    exploration has been initiated
  • Development of future targets will follow as
    market acceptance confirms the need to supply
    more material and will be financed through the
    future positive cash-flow

29
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