Telson Mining Corporation

We at Telson believe we have a mission to create enduring, sustainable value for all our shareholders, employees and the communities where we work.

Corporate ProfileTelson Mining Corporation is a Canadian-based junior resource company that until recently, has been focused on the development towards production during 2017 of its advanced stage Tahuehueto gold-silver project in north-western Durango State, Mexico.

On April 27, 2017 Telson Mining Corporation announced that it had signed an agreement with Nyrstar Mining Ltd to acquire 100% of the Campo Morado mine located in Guerrero State, Mexico.

Upon closing the Campo Morado acquisition agreement with Nyrstar on June 14, 2017, Telson added a very significant asset containing 17 million tons of resources in all categories to the company’s already impressive advanced stage Tahuehueto project asset.

Campo Morado, Guerrero State

Campo Morado is an underground multi-metal mine with infrastructure, installations and equipment capable of processing 2,500 tonnes of ore per day. There are over 700 exploration diamond drill holes in place which have outlined six mineralized bodies containing approximately 14.7 million tons of measured and indicated resources grading 3.76% zinc, 0.88% copper, 0.81% lead, 106 g/t Ag and 1.34 g/t Au plus, an additional 2.15 million tons of inferred mineral resources as calculated and released by Nyrstar in early 2015. The Campo Morado Mine was commissioned and commenced operations in 2009. Nyrstar purchased Farallon Resources in a friendly takeover in 2010 for the equivalent of approximately C$420 million thereby gaining control of Campo Morado. Nyrstar produced up to the end of 2014 when mining operations were suspended in January 2015 and the mine was placed on care and maintenance due to deteriorating industry conditions. During 2014, the mine processed 657,000 tons of ore with an average grade of 1.2g/t Au, 115.7 g/t Ag, 4.6% Zn, 1.2% Cu and 0.9% Pb. The concentrates produced in the same year were 48,000 tons of Zn concentrate at 47% Zn and 29,000 tons of Cu concentrate at 13%, including 6,000 oz of Au and 0.9 million oz of Ag.

On September 18, 2017, Telson announced that it had secured the funding required to initiate the restart of continuous mining operations at the Campo Morado Mine and on October 23, 2017 the Company announced the restart of full scale mining and mill processing on a pre-production basis from mine development at a starting rate of 1,400 tonnes per day. The Company expects to increase the production rate to the maximum 2,500 tpd during the 2018 year.

Tahuehueto, Northwestern Durango State

Telson Mining Corporation controls 100% of the Tahuehueto Project through a 99%-owned subsidiary, and acquired the district-scale property for its potential to host multiple deposits and discoveries. The project lies within the Sierra Madre mineral belt, which hosts most of Mexico’s producing mines and active exploration and development projects, and has geological similarities to epithermal deposits being exploited in nearby mining districts. In addition to vast geological potential, Mexico offers the advantages of social and political stability and a favorable investment climate.

This 7,492-hectare property covers at least 12 mineralized zones hosted within a structurally controlled epithermal system that has been traced for more than 6 km. Exploration programs have defined significant gold-silver and base metal reserves and resources along the explored structural zone. Mineralization of gold, silver, copper, lead, and zinc has been outlined within reserves and resources along the length of the explored structural zone which have allowed Telson to determine excellent economics of a potential mining operation at Tahuehueto.

Significant exploration upside potential exists both on the existing explored structures that contain current reserves and resources along strike and down dip of the known mineralization which is open in all directions as well as within numerous other mineralized but unexplored structures known to occur within the core 700 ha concession area. Further exploration potential exists outside of the core area where Telson controls an additional 6700 hectares of concessions. Telson’s concessions cover about 80% of the mineralized Tahuehueto District, and there is a significant amount of prospective ground within this government recognized geological Tahuehueto District.

Telson’s plan is to advance into production with the reserves outlined in the core 500 ha area, continue to expand the reserves on structures where there are defined reserves and resources, and start to look at our less explored structures within this core 500 ha area. A Greenfields type of exploration program will also be designed and implemented after production is achieved to explore the regional District potential within Telson’s concession area.

Recent Developments At Tahuehueto

On January 23, 2017, the Company released its most recent NI-43-101 compliant technical report, a Pre-Feasibility Study (“PFS”) completed by the fully independent mining engineering firm of Metal Mining Consultants Inc. based out of Colorado, USA. The study evaluated an owner-operated 790 tpd underground mine with mill feed being processed in a 550 tpd comminution circuit consisting of primary and secondary crushing, grinding in a single ball mill followed by three flotation circuits producing lead, copper and zinc concentrates which will be trucked from site for smelting and refining. The report shows robust economics on the project including a post-tax IRR of 36% and an NPV using an 8% discount of US$77 million with a 21 year mine life. Telson has internally evaluated the economics of a 12 year mine life with increased tonnage throughput of an expanded mill and mining operation and plans to increase the mining rate to 1,000 tonnes per day or more in the first year of production.

On February 16, 2017, the Company announced the completion of an agreement for the acquisition of a sulfide flotation mineral processing facility, (the Tahuehueto Mineral Processing Facility”). The equipment purchased consists of the majority of milling equipment necessary, once installed and operational, to process Tahuehueto ore at an estimated capacity as envisioned within the PFS and Telson management assesses the purchased Tahuehueto Mineral Processing Facility to be capable of processing up to 1000 tonnes of ore per day with the addition of only a small amount equipment.

On February 23, 2017, Telson reported the final sale results from its 3500 tonne industrial scale bulk sample collected from the El Creston zone at Tahuehueto, trucked 270 km to a toll mill located Guanacevi, Durango, and processed producing 259 tonnes of zinc concentrate and 201 tonnes of lead concentrate which were sold generating cash receipts of USD $1.47 million.

On December 18, 2017 Telson announced the signing of a Term Sheet for a Loan Facility and Offtake Agreement with Trafigura Mexico S.A. de C.V., a market leader in the global commodities industry, to sell 100% of the lead and zinc concentrate produced at the Tahueheuto Mine from January 1, 2018 to December 31, 2022. Trafigura will provide Telson with a credit facility of US$15 million thereby securing the bulk of the capital requirements to construct and operate an ongoing 1,000 tonne per day mining operation at Tahuehueto.

Telson Mining Corporation is managed by a team experienced in mining engineering, metallurgy and geology plus other mining professionals employed and committed to adding value to Tahuehueto and increasing shareholder returns through cost-effective programs conducted in a socially and environmentally progressive manner. Management has set a targeted goal of reaching commercial production at Tahuehueto Q3 2018. Initial production is targeted at 550 tonnes per day and management intends to double that production during the first year of mining operations.