Dear Investors,

The reason for this letter is to address the very recent negative pressure on our share price. I want to start off by saying that I believe that this downward pressure on our share price does not reflect the fundamentals of the company. I believe that Pasinex Resources is in a stronger position now than we have been in the lifetime of the company. I think this pressure on our share price is based on fear and rumour and I will address that further on.

Firstly, let me talk about the fundamentals of the company and why I think the company is in a strong position right now.

  1. The company owns a very profitable mine in Pinargozu. The mine is currently one of the lowest cost producers of zinc in the world. The mine’s post-tax profit margin in first quarter 2018 was 63%.
  2. The Pinargozu mine is budgeted to continue to produce at levels in 2018 similar to production levels in 2017. The zinc price continues to be strong and so we anticipate strong financial results in 2018 as we did in 2017.
  3. Pasinex Resources is receiving dividends from the 2017 profit of the Pinargozu mine. The operating company of the Pinargozu mine, Horzum AS, has declared a 20 M TL dividend for each of the two partners as a result of 2017 profitability. Pasinex has already received some of these funds and will receive the rest over the balance of 2018.
  4. As a result of the dividend being received Pasinex has enough funds to pay for ongoing exploration and corporate costs.
  5. Pasinex Resources has no debt. The Pinargozu mine was self-financed.
  6. Pasinex Resources has two significant zinc exploration projects underway this year. In Turkey, we are advancing the Akkaya project (the property just north of Pinargozu) and in Nevada, USA we have commenced drilling on the Gunman project.
  7. Akkaya is a zinc property just north of Pinargozu that is expected to have the same zinc opportunity as we see at Pinargozu (potential for high-grade carbonate replacement style zinc). In the first half of this year, we have been doing detailed mapping which paves the way for a drilling campaign in the second half of 2018.
  8. Gunman is a zinc prospect acquired as an earn-in option agreement in 2017. Pasinex is currently drilling there. I expect we should have results for the market late July / early August 2018. Pasinex is optimistic that Gunman can also be prospective for high-grade carbonate replacement style zinc mineralization.

I will now comment on what I think has put some pressure on our share price. I believe the major concern relates to the debt that our Turkish partner has with the operating company in Turkey, Horzum AS. This has been declared and discussed in the Company’s MD&A. Our partner is dealing with financial pressures and has been supported by Pasinex and Horzum AS, during this time. We are working with our partner on this issue and though this will take some time, I remain optimistic that as we enter 2019 our partner will be in a stronger position and the debt they hold with the joint venture company will be of a lesser concern.

When I contrast the strengths that Pasinex Resources has now versus this issue with our partner in Turkey I believe the strengths outweigh the concerns.

I believe that investors should step back from the market reaction and look at the fundamentals of Pasinex Resources. I think when you do this you will realize that Pasinex has come a long way and is a strong company able to deliver strong future value.



Steve Williams
President and CEO
Pasinex Resources Limited