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Financing Alternatives Growth Solutions Market Exposure
Pilbara PlaybookWhat we learned from our trip to the Pilbara
April 5, 2018
2
Pilbara PlaybookExecutive Summary
Conclusion: It remains early days in the Pilbara gold rush (only 6 months in), but our recent site visits suggest there continues to be the potential for one or more world class discoveries in the Pilbara. In our view, the preferred way to play this exciting theme are:• Novo Resources Corp. (TSXV:NVO, C$4.34, C$634M) – the most advanced by a meaningful
margin and best funded company in the area is taking the right steps to advance towards discovery
• De Grey Mining Ltd. (ASX:DEG , A$0.16, A$52M) – the second most advanced project, with its traditional hard rock assets underpinning its value providing investors a low cost option on conglomerate success
• NxGold Ltd. (TSXV:NXN, C$0.18, C$10) – a late entrant into this gold rush, but quickly advancing its Mt. Roe project which appears to be one of the richest areas from a prospector perspective providing positive read through to its conglomerate potential
Upcoming Catalysts:With the weather cooling in the Pilbara, field work is likely to pick up on all conglomerate gold projects, particularly those that are at an early stage. For our preferred companies, the next important catalysts are: • Novo – First results from the larger 5 tonne bulk samples are expected in April – likely to be
positive for Novo and the other players in the space.• De Grey – Receipt of heritage clearance and the start of large scale mechanical trenching.• NxGold – Completion of the ongoing mapping, heritage clearance and the start of trenching.
Priced as of market close on April 4, 2018, EDT and AEST(unless otherwise noted).
All values in CAD unless otherwise noted.
For Disclaimer and Applicable Disclosures, see the end of this report
3
Table of Contents
Main Content
Conglomerate Gold in the Pilbara 4
The Pilbara Players - Comparable Table 7
Pilbara Overview - Map of Landholders 8
The Playbook - What we are looking for 8
Our Preferred Players 10
Novo Resources Corp. (TSXV:NVO) 11
De Grey Mining Ltd. (ASX:DEG) 18
NxGold Ltd. (TSXV:NXN) 22
Disclosures 42
Appendix 43
Other Companies
New Frontier Exploration (Private) 24
Calidus Resources Ltd. (ASX:CAI) 25
Kairos Minerals Ltd. (ASX:KAI) 27
Marindi Metals Ltd. (ASX:MZN) 28
Artemis Resources Ltd. (ASX:ARV) 29
Pacton Gold Inc. (TSXV:PAC) 31
Int. Prospect Ventures Ltd. (TSXV:IZZ) 32
Coziron Resources Ltd. (ASX:CZR) 33
Millennium Minerals Ltd. (ASX:MOY) 34
Arrow Minerals Ltd. (ASX:AMD) 35
Impact Minerals Ltd. (ASX:IPT) 36
Kalamazoo Resources Ltd. (ASX:KZR) 37
DGO Gold Ltd. (ASX:DGO) 38
Macarthur Minerals Ltd. (TSXV:MMS) 39
Haoma Mining NL (Delisted) 40
Priced as of market close on April 4, 2018, EDT and AEST(unless otherwise noted).
All values in CAD unless otherwise noted.
For Disclaimer and Applicable Disclosures, see the end of this report
4
Conglomerate Gold in the PilbaraWhat we know today – Part 1
Over an almost two week period we visited 5 conglomerate gold projects and a conglomerate gold conference. These are the key findings from our trip:
• Very Early Days – On a scale of 1 to 10 (1 being an interesting property, 10 being a mineable resource), Novo the most advanced project in the area is likely a 3 (most others are essentially between 0 and 1). It has only been 6 months since the “discovery”, and Novo is aggressively exploring which makes it very early days, particularly when you take into account the rarity of this deposit style.
Source: Novo Resources Investor Presentation
Figure 1: Map of the Pilbara Craton with known gold-bearing conglomerate
• Big Scale Potential – Currently, nugget discoveries with associated conglomerates span an area of +300km by +150km (Figure 1), suggesting a massive gold system once existed but is now partially eroded. We believe there are sufficient large enough pieces of the gold hosted conglomerate remaining to deliver one or more world class discoveries; however, a lot more work is needed to prove us right.
Priced as of market close on April 4, 2018, EDT and AEST(unless otherwise noted).
All values in CAD unless otherwise noted.
For Disclaimer and Applicable Disclosures, see the end of this report
5
Conglomerate Gold in the PilbaraWhat we know today – Part 2
• Novo is Back on Track – A key challenge for this style of deposit is the ability to demonstrate a resource over a meaningful area. We believe Novo is back on the path of delivering a resource over a small area, which they hope to translate to the large scale. Novo is also blazing a trail for others in the area and its success is expected to drive others share price.
• Each Deposit is Likely to be Unique – With these deposits being spread over hundreds of kilometers, the expectation is that each is likely to be similar but have unique characteristics. As well, Novo believes that these deposits are near-shore marine alluvial deposits (Figure 2), it is expected that the deposits characteristics are likely to change as you move closer to or further away from the historic shore.
Source: Novo Resources Investor Presentation
Figure 2: Diagram of a near-shore marine alluvial gold deposit
Priced as of market close on April 4, 2018, EDT and AEST(unless otherwise noted).
All values in CAD unless otherwise noted.
For Disclaimer and Applicable Disclosures, see the end of this report
6
Conglomerate Gold in the PilbaraWhat we know today – Part 3
• Similar to the Wits but not Really – The conclusion of the Pilbara conference we attended was that while this is a conglomerate gold deposit, of a similar age to Witwatersrand (Figure 3) with similar potential scale. The markers and style of mineralization appear to differ materially. While it is early days in the Pilbara, the history of the Wits may not provide Pilbara explorers the guidance they were hoping for.
• Experts are Playing Catch-up – The conference we attended had presentations by a number of geologic and mining experts (conglomerate gold, sedimentology, government, processing, etc.) and they are learning about these projects for the first time while trying to catch-up on this unique style of mineralization in a new place.
Source: Modified after Rogers (1996) and Saha et al. (2016)
Figure 3: Proposed position of the cratons from the Archean Ur supercontinent
Witwatersrand
Pilbara district, WA
Priced as of market close on April 4, 2018, EDT and AEST(unless otherwise noted).
All values in CAD unless otherwise noted.
For Disclaimer and Applicable Disclosures, see the end of this report
7
The Pilbara PlayersComparable Table
There are a number of gold-focused companies active in the Pilbara, listed in both Australia and Canada. We have tried to assemble a comprehensive list and would note that not all have conglomerate gold projects or are actively exploring them.
Price Mrkt Cap EV Cash Debt Property
$/sh C$M C$M C$M C$M sq. km
NVO.V Novo Resources Corp $4.34 0.0% -0.2% -6.9% 17.6% 478.7% CAD 146.0 $634 $562 $72.00 $0.00 12,000 $0.05
ARV.AX Artemis Resources Ltd $0.17 0.0% -5.7% -19.5% -37.7% 725.0% AUD 628.0 $102 $86 $15.28 $0.00 2,000 $0.04
MOY.AX Millennium Minerals Ltd $0.24 2.1% 6.7% 9.1% 41.2% 100.0% AUD 791.7 $186 $168 $17.90 $0.00 262 $0.64
KAI.AX Kairos Minerals Ltd $0.04 -2.6% 0.0% -5.1% -15.9% -16.1% AUD 836.8 $30 $21 $9.66 $0.00 1,158 $0.02
DEG.AX De Grey Mining Ltd $0.16 -3.0% -3.0% 28.0% 0.0% 700.0% AUD 331.0 $52 $46 $6.15 $0.00 1,800 $0.03
CAI.AX Calidus Resources Ltd $0.04 0.0% -2.3% 0.0% 10.5% -86.0% AUD 704.1 $29 $20 $9.30 $0.00 363 $0.05
MZN.AX Marindi Metals Ltd $0.01 5.0% 5.0% 16.7% -12.5% 6.2% AUD 1,780.5 $18 $14 $4.00 $0.00 220 $0.07
AMD.AX Arrow Minerals Ltd $0.03 0.0% 3.0% 0.0% -15.0% -51.4% AUD 226.0 $8 $2 $5.50 $0.00 615 $0.00
IPT.AX Impact Minerals Ltd $0.01 -7.1% -7.1% -13.3% -27.8% -55.2% AUD 1,321.7 $17 $12 $5.29 $0.00 1,300 $0.01
KZR.AX Kalamazoo Resources Ltd $0.08 0.0% -12.8% -5.1% -31.8% NA AUD 62.7 $5 $2 $2.14 $0.00 44 $0.06
DGO.AX DGO Gold Ltd $0.87 3.6% 2.4% 47.5% -17.9% 419.8% AUD 10.6 $9 $8 $0.67 $0.00 5,002 $0.00
IZZ.V International Prospect Ventures Ltd$0.20 0.0% 11.1% 14.3% 0.0% 300.0% CAD 25.1 $5 $4 $0.80 $0.00 464 $0.01
NXN.V NxGold Ltd $0.18 0.0% 2.9% -25.0% -48.6% -26.5% CAD 57.9 $10 $7 $3.88 $0.00 10 $0.66
PAC.V Pacton Gold Inc $0.26 0.0% -1.9% 0.0% -12.1% 292.3% CAD 58.9 $15 $15 $0.12 $0.00 492 $0.03
MMS.V Macarthur Minerals Ltd $0.05 0.0% -10.0% -18.2% -30.8% 12.5% AUD 242.3 $11 $9 $1.84 $0.00 1,527 $0.01
CZR.AX Coziron Resources Ltd $0.03 4.2% 13.6% 38.9% 47.1% 212.5% AUD 1,785.6 $44 $44 $0.05 $0.00 317 $0.14
(Private) New Frontier Exploration NA NA NA NA NA NA NA NA NA NA NA NA NA NA
(Private) Haoma Mining NL NA NA NA NA NA NA NA NA NA NA NA NA NA NA
Source: Thomson Eikon, Company Reports
Figure 4: Comparable Companies in the Pilbara District
EV/sq.kmBasic
Shares
Rpt.
Curr.Ticker Company Name 1 Day Δ 7 Day Δ 30D Δ YTD Δ 2yr Δ
Priced as of market close on April 4, 2018, EDT and AEST(unless otherwise noted).
All values in CAD unless otherwise noted.
For Disclaimer and Applicable Disclosures, see the end of this report
8
Pilbara OverviewPilbara Gold Players – Landholders
Figure 5: Map of Landholders in the Pilbara Region
Source: S&P GlobalPriced as of market close on April 4, 2018, EDT and AEST(unless otherwise noted).
All values in CAD unless otherwise noted.
For Disclaimer and Applicable Disclosures, see the end of this report
9
The PlaybookWhat we are looking for
Based on our site visits and the recent conference, these are the key themes that we are looking for when evaluating companies with conglomerate gold in the Pilbara.
1. Big Cheque Book or Another Asset to Underpin Valuation – At this early stage, conglomerate exploration is both expensive and the methodology is still being developed. The only player with the deep pockets to develop the methodology is Novo. For everyone else, they are at least one step behind and learning from Novo, we would like to see another asset in the portfolio that supports the company’s valuation.
2. Gold and Conglomerates Already Identified on the Property – There are a lot of companies that claim to be Pilbara conglomerate gold plays; however, much of the ground has been staked based on historic wide-scale mapping. In our view, the project has to have sufficient work completed that both conglomerates and gold have been identified on the property.
3. A Credible Plan to Move Ahead – As traditional sampling methods can provide inconsistent data, the company needs to have a plan to advance the project. First step is mapping and soil sampling, along with metal detecting, which should identify conglomerates and gold, and likely followed by systematic trenching to determine the gold-bearing conglomerate horizons and understand the stratigraphy. This is likely to be followed by bulk-sampling and drilling for structure as Novo is doing. We note that this is not the only way to advance a project, but appears to be working based on the activity to date.
Priced as of market close on April 4, 2018, EDT and AEST(unless otherwise noted).
All values in CAD unless otherwise noted.
For Disclaimer and Applicable Disclosures, see the end of this report
10
Our Preferred PlayersBased on What We Know Today
Based on our site visits and the recent conference, these are the three key names that we like based on the work to date and the next steps planned by each company:
1. The Technical & Financial Leader – Novo Resources (TSXV:NVO, C$634 Market Cap, C$4.34/share) is currently leading the space with the largest land package of 12,000 sq. km across the Pilbara. As the first company to identify the conglomerate gold potential, Novo has been leading the Pilbara gold rush as the most technically advanced team backed by a strong shareholder base with a cash balance of C$72M to fund its exploration plans.
2. One Step Behind with Hardrock Assets to Underpin – De Grey Mining (ASX:DEG, A$52 Market Cap, A$0.16/share) is right behind Novo in the race to explore conglomerate gold in the Pilbara. De Grey has a sizeable land package with a hard rock asset that has already demonstrated economic potential in a Scoping Study released in 2017. Based on the study, we see the asset worth ~A$50-75M, which underpins De Grey’s current valuation providing investors a low-cost option on the conglomerates.
3. An Impressive Newcomer – NxGold (TSXV:NXN, C$10 Market Cap, C$0.18/share) is led by a management team that has already discovered a world class asset through NexGen Energy and has a credible plan to do so again by aggressively exploring the Pilbara Region. Field teams have already discovered conglomerate-hosted gold at surface demonstrating the significant prospectivity at the Mt. Roe project.
Priced as of market close on April 4, 2018, EDT and AEST(unless otherwise noted).
All values in CAD unless otherwise noted.
For Disclaimer and Applicable Disclosures, see the end of this report
11
Valuation• We believe Beatons Creek is worth between C$1.00-1.30/sh – see slide 17• Karratha is reasonably worth between C$3.25-16.25/sh – see slide 16• This gives us a value between C$4.70-17.90/sh (incl C$0.45/sh in cash) – suggesting upside to the
current share price C$4.34Conclusion• Novo is the Pilbara conglomerate gold leader, and while it has the most value associated with
conglomerate gold in its share price, because of its liquidity, market cap and balance sheet is likely the “lowest-risk” way to play this theme
Novo Resources Corp. (TSXV:NVO)The Technical & Financial Leader
Our View• Novo continues to be the leader in this space• From our site visit to Comet Well and Purdy’s Reward,
we came away with two key findings:1. Back on track to demonstrate the scale potential
of these deposits2. Our view that Comet Well and Purdy’s Reward has
+10M oz potential remains intact• From our site visit to Beatons Creek, we also came
away with two key findings:1. Grade appears to be understated – work
underway to prove otherwise – a 25% increase in grade increases estimated value by ~50%
2. Confirmed our estimated value for this asset of between ~C$150-200M
TSXV.NVO - Stock Chart
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Ticker NVO.V
Share Price (C$/sh) $4.34
Common Shares O/S (M) 146
Equity Value (C$M) $633.64
Add: Debt (C$M) $0.00
Less: Cash (C$M) $72.00
Enterprise Value (C$M) $ 561.64Source: Thomson Eikon, Company Reports
Capital Structure
Priced as of market close on April 4, 2018, EDT and AEST(unless otherwise noted).
All values in CAD unless otherwise noted.
For Disclaimer and Applicable Disclosures, see the end of this report
12
Novo Resources Corp. (TSXV:NVO)The Technical & Financial Leader
First Mover Advantage• Novo was the first to identify the conglomerate
gold potential and have staked and acquired as much land as they could , which is now covers 12,000 sq. km across the Pilbara (Figure 6)
• This advantage has resulted in Novo being the best funded (currently C$72M in cash) and most technically advanced player in the region positioning them to be the leader in the space –as goes Novo, so goes the space
First Mover Disadvantage• With this being a new discovery, with a
technically challenging deposit style, Novo is blazing a trail for the other players, with most patiently waiting for Novo to determine best practices with its much stronger balance sheet
• We would note, that to date Novo has been relatively open with other companies, but this may not continue over the long-term
#REF!
Source: Novo Resources Investor Presentation
Figure 6: Novo Resources Tenements Map
Source: Novo Resources Investor Presentation
Figure 7: Map of the Pilbara Craton with known gold-bearing conglomerate
Priced as of market close on April 4, 2018, EDT and AEST(unless otherwise noted).
All values in CAD unless otherwise noted.
For Disclaimer and Applicable Disclosures, see the end of this report
13
Novo Resources Corp. (TSXV:NVO)Karratha Gold Project – Progress to Date
• Gold-bearing conglomerate at Karratha occurs at the base of the Fortescue Group below basalt flows and interbedded with sandstone horizons
• Based on the work to date, this is believed to be a Marine Lag environment (Figure 2) with gold being deposited during specific periods
• At Purdy’s Reward (50/50 JV with Artemis):• Gold was identified only in the basal conglomerate only (~1m in width) with an average grade
of 14.7 g/t Au based on all the bulk samples released (~300kg bulk samples)• Outside of a halo around the nuggets, no fine gold component was identified
• Two key learnings surfaced from this work1. Sampling methodology needed to change – larger scale trenches (see Figure 9 & 11)2. Sample size needed to increase from ~300kg to ~5 tonnes (see Figure 8 & 10)
• Comet Well (80% Interest):• Gold has been identified in two conglomerate sequences – one that appears to be older and
higher energy with a higher conglomerate sequence to the gold-bearing conglomerate at Purdy’s
• 60 of the larger samples are planned for Comet Well over the next few months• First 5-tonne sample results expected in April• It is unknown if there is a fine gold component in this newly discovered gold bearing
conglomerate
Priced as of market close on April 4, 2018, EDT and AEST(unless otherwise noted).
All values in CAD unless otherwise noted.
For Disclaimer and Applicable Disclosures, see the end of this report
14
Novo Resources Corp. (TSXV:NVO)Karratha Gold Project – Different Approach at Comet Well
Source: Photo from RCKS Site Visit
Figure 9: Purdy's Reward Trench
Source: Photo from RCKS Site Visit
Figure 11: Comet Well Trench
Source: Company Reports
Source: Company Reports
Figure 8: Basal conglomerate section and footwall dolerite at Purdy’s Reward
Figure 10: Illustration showing samples taken from the basal boulery conglomerate
Priced as of market close on April 4, 2018, EDT and AEST(unless otherwise noted).
All values in CAD unless otherwise noted.
For Disclaimer and Applicable Disclosures, see the end of this report
15
Novo Resources Corp. (TSXV:NVO)How Big Could Karratha be?
There are a large number of unknowns with respect to this deposit making it difficult to determine the scale, here we talk about some of the known items and present sensitivity to the unknowns.Assumptions:• Specific Gravity: 2.8 t/m3• Strike Length: ~8km (1.5km Purdy’s Reward, 6.5km Comet Well)• Width before it dips under the Mt. Roe Basalt: ~800 m• Continuity: ~75% - it is unlikely that the deposit is continuously mineralized over the entire volume, so
an estimate needs to be made
Key Variables:• Grade – results from smaller
samples vary from 0.03 g/t to 87.8 g/t with an average of 14.7 g/t
• Thickness – thickness of mineralized zone has varied from 0.5m to 5m but wider is possible
Conclusion:• 10-25M oz discovery
appears possible• Based on data to date likely
mid-grade (10-15 g/t) and narrower (1-5m)
Figure 12: Size Sensitivity (Moz Au)
1.0 2.5 5.0 7.5 10.0 12.5 15.0 17.5 20.0 22.5 25.0 27.5 30.0
0.5 0.24 0.59 1.19 1.78 2.37 2.96 3.56 4.15 4.74 5.33 5.93 6.52 7.11
1.0 0.47 1.19 2.37 3.56 4.74 5.93 7.11 8.30 9.48 10.67 11.85 13.04 14.22
1.5 0.71 1.78 3.56 5.33 7.11 8.89 10.67 12.44 14.22 16.00 17.78 19.56 21.33
2.0 0.95 2.37 4.74 7.11 9.48 11.85 14.22 16.59 18.96 21.33 23.70 26.07 28.44
2.5 1.19 2.96 5.93 8.89 11.85 14.82 17.78 20.74 23.70 26.67 29.63 32.59 35.56
3.0 1.42 3.56 7.11 10.67 14.22 17.78 21.33 24.89 28.44 32.00 35.56 39.11 42.67
3.5 1.66 4.15 8.30 12.44 16.59 20.74 24.89 29.04 33.19 37.33 41.48 45.63 49.78
4.0 1.90 4.74 9.48 14.22 18.96 23.70 28.44 33.19 37.93 42.67 47.41 52.15 56.89
4.5 2.13 5.33 10.67 16.00 21.33 26.67 32.00 37.33 42.67 48.00 53.33 58.67 64.00
5.0 2.37 5.93 11.85 17.78 23.70 29.63 35.56 41.48 47.41 53.33 59.26 65.19 71.11
5.5 2.61 6.52 13.04 19.56 26.07 32.59 39.11 45.63 52.15 58.67 65.19 71.70 78.22
6.0 2.84 7.11 14.22 21.33 28.44 35.56 42.67 49.78 56.89 64.00 71.11 78.22 85.33
6.5 3.08 7.70 15.41 23.11 30.82 38.52 46.22 53.93 61.63 69.33 77.04 84.74 92.45
7.0 3.32 8.30 16.59 24.89 33.19 41.48 49.78 58.08 66.37 74.67 82.96 91.26 99.56
7.5 3.56 8.89 17.78 26.67 35.56 44.45 53.33 62.22 71.11 80.00 88.89 97.78 106.67
8.0 3.79 9.48 18.96 28.44 37.93 47.41 56.89 66.37 75.85 85.33 94.82 104.30 113.78
8.5 4.03 10.07 20.15 30.22 40.30 50.37 60.45 70.52 80.59 90.67 100.74 110.82 120.89
9.0 4.27 10.67 21.33 32.00 42.67 53.33 64.00 74.67 85.33 96.00 106.67 117.34 128.00
9.5 4.50 11.26 22.52 33.78 45.04 56.30 67.56 78.82 90.08 101.34 112.59 123.85 135.11
10.0 4.74 11.85 23.70 35.56 47.41 59.26 71.11 82.96 94.82 106.67 118.52 130.37 142.22Source: RCKS Estimates
Grade (g/t Au)
Figure xx: Size Sensitivity (Moz Au)
Thickness (m)
Priced as of market close on April 4, 2018, EDT and AEST(unless otherwise noted).
All values in CAD unless otherwise noted.
For Disclaimer and Applicable Disclosures, see the end of this report
16
Novo Resources Corp. (TSXV:NVO)What’s Karratha worth?
• In our view, ounces in the ground at Karratha should trade at premium to peers ($42/oz):• A flat lying, near surface deposit, near a sealed road and in one of the best jurisdictions in the
world suggests a premium is warranted• Recall that Novo has 80% of Comet Well and 50% of Purdy’s Reward resulting in ~74% of the
deposit size being attributable to the company
• Using C$50-100/oz, as a benchmark, accounting for premium nature of ounces found at Karratha and the risk of this early stage• Based on 10M oz (attributable) – potentially value is C$500M-1.0B or C$3.25-6.50/share• Based on 25M oz (attributable) – potentially value is C$1.25-2.5B or C$8.10-16.25/share
• Working backwards the market cap of C$634M is pricing in 7.2-8.2M oz at C$50/oz or 3.6-4.1M oz at C$100/oz after removing Beatons Creek and current cash
Figure 13: Value Sensitivity (C$M)
1.0 2.5 5.0 7.5 10.0 15.0 20.0 25.0 30.0 35.0 40.0 45.0 50.0
25 25 63 125 188 250 375 500 625 750 875 1000 1125 1250
50 50 125 250 375 500 750 1000 1250 1500 1750 2000 2250 2500
75 75 188 375 563 750 1125 1500 1875 2250 2625 3000 3375 3750
100 100 250 500 750 1000 1500 2000 2500 3000 3500 4000 4500 5000
125 125 313 625 938 1250 1875 2500 3125 3750 4375 5000 5625 6250
150 150 375 750 1125 1500 2250 3000 3750 4500 5250 6000 6750 7500
175 175 438 875 1313 1750 2625 3500 4375 5250 6125 7000 7875 8750
200 200 500 1000 1500 2000 3000 4000 5000 6000 7000 8000 9000 10000Source: RCKS Estimates
Figure xx: Value Sensitivity (C$ millions)
Attributable Size (M oz)EV/oz (C$)
Priced as of market close on April 4, 2018, EDT and AEST(unless otherwise noted).
All values in CAD unless otherwise noted.
For Disclaimer and Applicable Disclosures, see the end of this report
17
Novo Resources Corp. (TSXV:NVO)Beatons Creek
A quality asset with near-term development potential• Project was sidelined as momentum built in Karratha
and limited human resources were focused there; however, it continues to provide a supporting value for Novo.
• Our preliminary value for Beatons Creek is a post-tax NAV of ~C$150-200 million based on its near surface resource, this translates to ~C$1.00-1.30/share
• Grade upside exists as it appears the bulk sample results may have understated the deposit grade, which already suggested the resource model understates grade by ~45-50%• Novo is completing a series 2 tonne bulk
samples at Beatons Creek to better define grade• For every 25% increase in grade, our estimated
value increases by 50%.
RCKS Estimate*Resource (k oz) 496 Head grade (g/t) 2.6 Throughput (tpd) 2,000 Average annual prod. (k oz) 56.6 Mine life (years) 8.75 Capital Costs (A$M) $123.77Mining costs (A$/tonne) $2.50Processing costs (A$/tonne) $25.00Total cash costs (US$/oz) $371*Estimates assume $1,300/oz Au and 0.80 AUD/USD
Source: Company Reports, RCKS Estimates
Figure 14: Model Assumptions
Source: Photo from RCKS Site Visit
Figure 16: Mineralization in a trench at Beatons Creek
Cut-off Grade Tonnes Grade Ounces Au
Au g/t (x1000) Au g/t (x1000)
Measured 0.5 515 3.1 51
Indicated 0.5 2,822 2.7 241
Measured + Indicated 0.5 3,337 2.7 292
Inferred 0.5 2,668 2.4 203Source: Company Reports
Classification
Figure 15: Beatons Creek Resource (2015)
18
De Grey Mining Ltd (ASX:DEG)One Step Behind with Hardrock Assets to Underpin
Our View• De Grey has done the most work outside of Novo
on its conglomerate targets and pending a heritage survey (expected in Q2/18) plans to start systematic stripping and sampling – recent soil sampling results have been encouraging
• Has a hard rock asset that underpins the current value and a conglomerate based resource would be additive to economics – existing project is not dependent on it and consequently does not need the sampling rigor that is being applied at Novo
Valuation• We believe the hardrock portion is worth between
A$0.15-0.23/sh – see slide 21• Based on the current share price of A$0.16,
investors are getting a low-cost option on the conglomerates
Conclusion• We believe that at its current value De Grey may be at an attractive entry point particularly as
news flow heats up from both its own projects and Novo’s.
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Ticker DEG.AX
Share Price (A$/sh) $0.17
Common Shares O/S (M) 331
Equity Value (A$M) $54.61
Add: Debt (A$M) 0
Less: Cash (A$M) $6.15
Enterprise Value (A$M) $ 48.46Source: Thomson Eikon, Company Reports
Capital Structure
Priced as of market close on April 4, 2018, EDT and AEST(unless otherwise noted).
All values in CAD unless otherwise noted.
For Disclaimer and Applicable Disclosures, see the end of this report
19
De Grey Mining Ltd (ASX:DEG)The Pilbara Gold Project – Hardrock plus Conglomerates
98,000ha land package in the Pilbara with +1.2Moz resource & upside• Potential near-term mine development with positive scoping study and pending PFS
• Further resource expansion potential with ongoing drilling• Three conglomerate gold targets: Loudens, Jarret and Steel Well (Figure 17)• Kirkland Lake Gold invested $5M in September 2017 to become 10% shareholder• Additional Zn-Ag and Li assets in Western Australia
Source: Company Reports
Figure 17: Map of Land Package in the Pilbara District
Priced as of market close on April 4, 2018, EDT and AEST(unless otherwise noted).
All values in CAD unless otherwise noted.
For Disclaimer and Applicable Disclosures, see the end of this report
20
De Grey Mining Ltd (ASX:DEG)The Pilbara Gold Project – Conglomerate Gold Targets
Conglomerate gold targets within trucking distance of proposed plant (Figure 18)• Louden Patch: 91 gold nuggets
discovered at target with a fine grained gold halo similar to Novo’sPurdy’s Reward ~130km away
• Jarret and Steel Well: 3 gold nuggets discovered
• Visible gold panned from streams draining all 3 targets, further confirms the conglomerate gold style of mineralization at all target
• Importantly, a discovery is additive to the near-term production story
Next steps:• Once the heritage survey is
complete, systematic trenching and sampling to follow
• Potential to be followed by diamond drilling for structure
Source: Company Reports
Figure 18: Map of Conglomerate Gold Targets
Priced as of market close on April 4, 2018, EDT and AEST(unless otherwise noted).
All values in CAD unless otherwise noted.
For Disclaimer and Applicable Disclosures, see the end of this report
21
De Grey Mining Ltd (ASX:DEG)The Pilbara Gold Project – Hardrock Asset Underpins Value
Hardrock targets underpin current value• The company’s focus has been primarily on
advancing its structural hosted gold deposits which have a recently updated resource (Figure 21) and scoping study
• We believe these traditional assets are worth between A$50-75M, which accounts for the remaining property payment, giving a per share value of A$0.15-0.23/sh (current share price A$0.16)
• We note that our estimated value excludes a likely mine-life extension or exploration upside
• Next step is a pre-feasibility study, expected later this year on the hardrock assets
RCKS Estimate*
Resource (k oz) 323
Head grade (g/t) 2.1
Dilution (%) 5%
Throughput (tpd) 2,750
Average annual prod. (k oz) 56.6
Mine life (years) 5.00
Capital Costs (A$M) $108.60
Mining costs (A$/tonne) $3.50
Processing costs (A$/tonne) $21.00
Total cash costs (US$/oz) $737*Estimates assume $1,300/oz Au and 0.80 AUD/USD
Source: Company Reports, RCKS Estimates
Figure 20: Model Assumptions
Tonnes Grade Ounces Au
(Mt) Au g/t (x1000)
Measured 4.39 1.7 241.7
Indicated 5.44 1.7 295.1
Measured + Indicated 9.83 1.7 536.8
Inferred 9.01 1.6 465.5Source: Company Reports
Figure 21: De Grey's Pilbara Gold Resource
Classification
Source: Photo from RCKS Site Visit
Figure 22: De Grey's Pilbara Gold Project
Priced as of market close on April 4, 2018, EDT and AEST(unless otherwise noted).
All values in CAD unless otherwise noted.
For Disclaimer and Applicable Disclosures, see the end of this report
22
NxGold Ltd. (TSXV:NXN)Mt. Roe Project
Our View:• Strong management - founded by team behind NexGen Energy (TSXV:NXE)• Conglomerate-hosted gold discovered at surface and has a credible plan to advance the assets• Mt. Roe located close to Novo’s Karratha Gold Project (Figure 23) – appears to have well-above average
prospectivity• Other exploration stage assets, the ~60,000ha Chicobi Project in the Abitibi Greenstone Belt of Quebec and
the 4,174ha Kuulu Project in Nunavut provide underpinning value
Valuation:• In our opinion the current C$10M market cap could be justified by any of its existing projects and probably
materially understate its Pilbara assets, where similar stage peers trade at 2-4x its current value
Conclusion:• While a late entrant, its our preferred early stage company in the space because of its top-notch
management team, good plan and the projects prospectivity
TSXV.NXN - Stock Chart
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Ticker NXN.V
Share Price (C$/sh) $0.18
Common Shares O/S (M) 58
Equity Value (C$M) $10.42
Add: Debt (C$M) $0.00
Less: Cash (C$M) $3.88
Enterprise Value (C$M) $ 6.55Source: Thomson Eikon, Company Reports
Capital Structure
Priced as of market close on April 4, 2018, EDT and AEST(unless otherwise noted).
All values in CAD unless otherwise noted.
For Disclaimer and Applicable Disclosures, see the end of this report
23
NxGold Ltd. (TSXV:NXN)Mt. Roe Project – Gold Endowment Appears Impressive
Our Site Visit Suggests this Could be One of the More Prospective Projects• A smaller land package at 1,232ha but an estimated 5km
of continuous strike length of gold-bearing conglomerate• Conglomerate-hosted gold discovered at surface with
nuggets revealing similar characteristics to Comet Well & Purdy’s Reward
• Our discussion with prospectors who have worked the area and our visit to site, suggests this could be one of the more prospective projects
• The company has recently completed an extensive mapping program (results pending) and is working towards large scale trenching once a heritage survey is completed (H2 2018)
Source: Photo from RCKS Site Visit
Figure 24: Conglomerate at Mt. Roe
Source: Company Reports
Figure 23: Mt. Roe Land Package
Priced as of market close on April 4, 2018, EDT and AEST(unless otherwise noted).
All values in CAD unless otherwise noted.
For Disclaimer and Applicable Disclosures, see the end of this report
24
New Frontier Exploration (Private – formerly LMTD)Multiple Conglomerate Gold Projects
Key Projects (Figure 26):1. Hardy Prospect (earn-in/JV), Karratha
• 6km along strike from Purdy’s 2. Comet East (acquired), Marble Bar
• Adjacent to Comet mine3. Charteris Creek (acquired), East Pilbara
• Large strike of outcropping conglomerate4. Strattons (acquired), Bamboo Creek
• Along strike from Bamboo Creek5. Warren’s Quest (earn-in), Nullagine
• Adjacent to Beatons Creek6. Areas under application, West and East Pilbara
Our View:• Have assembled an impressive ~5,700 sq. km
land package• Preliminary work completed with both
conglomerates and gold identified on multiple projects
• Exploration led by George Merhi, experienced conglomerate-gold exploration in the Pilbara region with Novo and the Creasy Group
• Mapping, metal detecting and sampling currently underway with trenching/drilling
Conclusion:• One of the better early stage conglomerate gold
companies and one we’ll be watching when it becomes public later this year
Source: Photo from RCKS Site Visit
Figure 27: Conglomerate at Mt. Hardy Prospect
Source: Company Reports
Figure 26: Labelled Map of LMTD Tenements
Priced as of market close on April 4, 2018, EDT and AEST(unless otherwise noted).
All values in CAD unless otherwise noted.
For Disclaimer and Applicable Disclosures, see the end of this report
25
Calidus Resources Ltd. (ASX:CAI)Warrawoona Gold Project
Our View:• Good structural gold deposit, with medium term production
potential and meaningful exploration upside• Management has done a good job consolidating the region,
allowing for resource growth on recently acquired properties• Actively drilling to expand resources and completing
engineering work, progressing towards a prefeasibility study• Have mapped 27km of Mt. Roe basalts and conglomerates on
its property but not a focus – waiting on others to advance the science
Valuation:• In our view the Warrawoona gold project is worth A$150-200
million, or ~A$0.11-0.15/shareConclusion:• An attractively valued, traditional project, with exploration
upside
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Source: Company Reports
Figure 28: Novo's tenements with Calidus70% Earn-in agreement
Ticker CAI.AX
Share Price (A$/sh) $0.04
Common Shares O/S (M) 704
Equity Value (A$M) $29.57
Add: Debt (A$M) 0
Less: Cash (A$M) $9.30
Enterprise Value (A$M) $ 20.27Source: Thomson Eikon, Company Reports
Capital Structure
Priced as of market close on April 4, 2018, EDT and AEST(unless otherwise noted).
All values in CAD unless otherwise noted.
For Disclaimer and Applicable Disclosures, see the end of this report
26
Calidus Resources Ltd. (ASX:CAI)Warrawoona Gold Project
Near-surface gold deposit with significant upside• 36,300ha under control which have historically hosted
+200 mines• Land package has not experienced any mining in the
modern era and limited exploration• Recently identified 45 high priority exploration targets in
Pilbara, to be followed up with mapping, rock chip & soil sampling
• 9.9Mt at 2.06g/t Au for 654,000oz (0.5g/t cut-off)• Mineralization outcrops along the entire strike length of
2.6km, within the unexplored 12.5km strike of the Klondyke shear zone
• We see resource expansion potential to >1Moz as exploration continues along strike, which may prove to support a standalone operation or toll milling at Millenium’s Nullagine project 65km away
Source: Company Reports
Source: Company Reports
Figure 29: Cross-section of Klondyke deposit
Source: Company Reports
Figure 30: Standing in the middle of the deposit looking A) West and B) East
A B
RCKS Estimate*
Resource (k oz) 712
Head grade (g/t) 2.1
Dilution (%) 5%
Throughput (tpd) 5,000
Average annual prod. (k oz) 106.8
Mine life (years) 6.00
Capital Costs (A$M) $175.38
Mining costs (A$/tonne) $3.50
Processing costs (A$/tonne) $21.00
Total cash costs (US$/oz) $652
*Estimates assume $1,300/oz Au and 0.80 AUD/USD
Source: Company Reports, RCKS Estimates
Figure 31: Model Assumptions
Priced as of market close on April 4, 2018, EDT and AEST(unless otherwise noted).
All values in CAD unless otherwise noted.
For Disclaimer and Applicable Disclosures, see the end of this report
27
ASX.KAI - Stock Chart
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Kairos Minerals Ltd (ASX:KAI)Croydon Project
Our View – We consider this 115,800ha project with 22km of strike to be modestly advanced but perspective based on initial results. However, there is no road access, increasing exploration costs and the next round of work is pending a native title agreement. We would note that Eric Sprottis a significant investor.
Valuation – current market cap puts it in line with other conglomerate peers and other assets do not appear to provide much supporting value
Conclusion – one too watch but would wait for the next round of work to start
Ticker KAI.AX
Share Price (A$/sh) $0.04
Common Shares O/S (M) 837
Equity Value (A$M) $31.80
Add: Debt (A$M) 0
Less: Cash (A$M) $9.66
Enterprise Value (A$M) $ 22.14Source: Thomson Eikon, Company Reports
Capital Structure
Source: Company Reports
Figure 32: Prospective regional geology and tenure, Pilbara Region
Priced as of market close on April 4, 2018, EDT and AEST(unless otherwise noted).
All values in CAD unless otherwise noted.
For Disclaimer and Applicable Disclosures, see the end of this report
28
Marindi Metals Ltd (ASX:MZN)Bellary Dome Project
TSXV.NVO - Stock Chart
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Our View – the property covers ~25km of Mt Roe basalts in the southern portion of the basin. Initial work has demonstrated significant potential, including a slightly different style of mineralization and finer gold component than we have seen in other parts of the basin. Management has taken its initial steps and plans to follow-up.
Valuation – current market cap puts it at a slight discount to other conglomerate peers; but does not account for its attractive zinc, lithium assets or A$4 million in cash
Conclusion – an interesting entry point, particularly based on the company’s initial results
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Ticker MZN.AX
Share Price (A$/sh) $0.01
Common Shares O/S (M) 1,780
Equity Value (A$M) $17.80
Add: Debt (A$M) 0
Less: Cash (A$M) $4.00
Enterprise Value (A$M) $ 13.80Source: Thomson Eikon, Company Reports
Capital Structure
Source: Company Reports
Figure 33: Map of Landolders in the Pilbara District
Priced as of market close on April 4, 2018, EDT and AEST(unless otherwise noted).
All values in CAD unless otherwise noted.
For Disclaimer and Applicable Disclosures, see the end of this report
29
Artemis Resources Ltd. (ASX:ARV)The Pilbara Gold Project
Our View• Artemis is Novo’s 50/50 JV partner at Purdy’s
Reward and is benefiting from the work Novo is doing there
• Radio Hill mill appears to need significant work to be serviceable for conglomerates and its main value is the permitted tailings facilities but there is limited available capacity
• The company’s plans for its 100% owned assets appears to be focused on alluvial gold, not conglomerates
• Company plans to drill a +3km hole in the deeper portions of the basin, targeting both base metals and conglomerates at depth – we do not see this as a potential game changer
Valuation• Company’s portion of Purdy’s Reward based on our estimates is worth between A$0.075-0.30/sh• Cash balance of A$15.3M is worth ~A$0.023/shConclusion• With the company not in control of its own destiny at Purdy’s Reward (its most valuable asset) and
a questionable exploration strategy, we prefer other Pilbara players over Artemis
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Ticker ARV.AX
Share Price (A$/sh) $0.17
Common Shares O/S (M) 628
Equity Value (A$M) $103.62
Add: Debt (A$M) 0
Less: Cash (A$M) $15.28
Enterprise Value (A$M) $ 88.34Source: Thomson Eikon, Company Reports
Capital Structure
Priced as of market close on April 4, 2018, EDT and AEST(unless otherwise noted).
All values in CAD unless otherwise noted.
For Disclaimer and Applicable Disclosures, see the end of this report
30
Artemis Resources Ltd. (ASX:ARV)West Pilbara Projects
Purdy’s, processing plant and more• Interest in ~2,000 sq. km of land in the Pilbara
region, which includes both Purdy’s Reward and Mt. OscarWits
• Mt. OscarWits (16km from Purdy’s)• Approved 118 sq. km exploration license
with heritage surveys• 75m thick stacked conglomerates with an
E-W strike outcropping at surface• Next steps include extensive exploration
over 14km of new gold-bearing sequences identified by field teams
• Other assets:• Carlow Castle Au-Cu-Co Project – 418kt
resource @ 3 g/t Au and 0.6% Cu• Silica Hills – Quartz vein hosted gold• Weerianna – 1Mt @ 2.2 g/t Au• Munni Munni – Australia’s largest PGE
resource, economic study to be completed
Source: Company Reports
Figure 34: Western Australia Assets
Priced as of market close on April 4, 2018, EDT and AEST(unless otherwise noted).
All values in CAD unless otherwise noted.
For Disclaimer and Applicable Disclosures, see the end of this report
31
TSXV.PAC - Stock Chart
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Pacton Gold Inc (TSXV:PAC)Pilbara Gold Project
Portfolio of assets in mining-friendly jurisdictions• Gold-bearing conglomerates of the Fortescue
Group mapped extensively around Pacton’s 492 sq. km of tenements in the Pilbara
• Focused on exploring the northern extension of De Grey’s Mallina Basin gold occurrences, which includes 5-80m thick gold nugget conglomerate beds
• Recently signed LOI to earn up to an 80% interest in Arrow Minerals Pilbara properties (Slide 35) totalling 609 sq. km (4 tenements) of prospective ground
• Other assets:• Tully West gold project in Timmins, ON• Birch Gold project 120km NE of Red Lake,
ON
Ticker PAC.V
Share Price (C$/sh) $0.26
Common Shares O/S (M) 61
Equity Value (C$M) $15.49
Add: Debt (C$M) $0.00
Less: Cash (C$M) $0.12
Enterprise Value (C$M) $ 15.37Source: Thomson Eikon, Company Reports
Capital Structure
Source: Company Reports
Figure 35: Location of Pacton Gold Tenements
Priced as of market close on April 4, 2018, EDT and AEST(unless otherwise noted).
All values in CAD unless otherwise noted.
For Disclaimer and Applicable Disclosures, see the end of this report
32
TSXV.IZZ - Stock Chart
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International Prospect Ventures Ltd (TSXV:IZZ)Wits End Gold Project
8 properties in the gold-bearing Pilbara region• >927 sq. km of property in the Fortescue
Basin southeast of Karratha• Currently reviewing and collecting data in
order to continue planning a field program for Q2 2018 and targets for drilling in Q3 2018
• Other assets:• Porcupine Miracle Gold Prospect
(100%-owned)• 4 claims located in Langmuir Township,
ON, 30 km south of Timmins• Planned exploration program includes
ground magnetic and IP geophysical surveys
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Ticker IZZ.V
Share Price (C$/sh) $0.20
Common Shares O/S (M) 25
Equity Value (C$M) $5.02
Add: Debt (C$M) $0.00
Less: Cash (C$M) $0.80
Enterprise Value (C$M) $ 4.22Source: Thomson Eikon, Company Reports
Capital Structure
Source: Company Reports
Figure 36: Location of Int. Prospect Venture Tenements
Priced as of market close on April 4, 2018, EDT and AEST(unless otherwise noted).
All values in CAD unless otherwise noted.
For Disclaimer and Applicable Disclosures, see the end of this report
33
Coziron Resources Ltd. (ASX:CZR)Croydon Top-Camp Project
New Gold Play Added to Pilbara Asset Portfolio• Agreement to acquire the 317km2 tenement
in West Pilbara, ~80km SE of Karratha.• Planning for 2018 field season underway to
follow up on; the source of anomalous gold in basal parts of the Fortescue Group as well as sampling results and a historical RC hole from the De Grey Super Basin which suggest a 1.5km long by 500m wide zone.
• Other assets - Pilbara:• Yarraloola Iron Ore Project (85%)• Buddadoo Iron Ore Project (70%)• Shepherds Well Iron Ore Project (70%) • Yarrie Iron Ore Project (70%)
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Ticker CZR.AX
Share Price (A$/sh) $0.02
Common Shares O/S (M) 1,786
Equity Value (A$M) $42.85
Add: Debt (A$M) $0.00
Less: Cash (A$M) $0.05
Enterprise Value (A$M) $ 42.80Source: Thomson Eikon, Company Reports
Capital Structure
Source: Company Reports
Figure 37: Location of Coziron's projects in the Pilbara
Priced as of market close on April 4, 2018, EDT and AEST(unless otherwise noted).
All values in CAD unless otherwise noted.
For Disclaimer and Applicable Disclosures, see the end of this report
34
Millennium Minerals Ltd (ASX:MOY)Nullagine Project
Only ASX-listed gold producer in the Pilbara• Ownership of a 2Mtpa processing facility
represents a significant regional strategic advantage • Possibility of processing ore from Novo’s
Beatons Creek project and/or Calidus’ Warrawoona project
• Currently producing ~80koz Au per year with a mineral resource inventory of 1.3Moz Au remaining; however, our understanding is that there are limited open-pittable oxide resources remaining and the current plant configuration cannot handle sulfide resources
• Recently initiated field exploration programs to evaluate conglomerate-hosted gold targets
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Ticker MOY.AX
Share Price (A$/sh) $0.24
Common Shares O/S (M) 792
Equity Value (A$M) $190.02
Add: Debt (A$M) 0
Less: Cash (A$M) $17.90
Enterprise Value (A$M) $ 172.12Source: Thomson Eikon, Company Reports
Capital Structure
Source: Company Reports
Figure 38: Map of Landolders in the Pilbara District
Priced as of market close on April 4, 2018, EDT and AEST(unless otherwise noted).
All values in CAD unless otherwise noted.
For Disclaimer and Applicable Disclosures, see the end of this report
35
Arrow Minerals Ltd (ASX:AMD) – Formerly Segue ResourcesPilbara Gold Project
600𝐤𝐦𝟐 of prospective property for conglomerate gold
• Previous discovery of several gold nuggets from conglomerate units of the Mallina Basin
• Discovery of detrital uranium, common for paleoplacer gold in the Witwatersrand Basin
• Identification of 2 basement gold targets off the Mallina Shear zone
• Other assets include lithium, gold and nickel projects in Australia with each covering significant land positions
Recently signed LOI with Pacton Gold, whereby the company can earn up to an 80% interest in Arrow (Pilbara) Pty Ltd., an Arrow
Minerals subsidiary holding its four tenements in the Pilbara district (Figure 39)
ASX.AMD - Stock Chart
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Ticker AMD.AX
Share Price (A$/sh) $0.03
Common Shares O/S (M) 226
Equity Value (A$M) $7.68
Add: Debt (A$M) 0
Less: Cash (A$M) $5.50
Enterprise Value (A$M) $ 2.18Source: Thomson Eikon, Company Reports
Capital Structure
Source: Company Reports
Figure 39: Map of Mineral Claims in Western Australia's Pilbara District
Priced as of market close on April 4, 2018, EDT and AEST(unless otherwise noted).
All values in CAD unless otherwise noted.
For Disclaimer and Applicable Disclosures, see the end of this report
36
Impact Minerals Ltd (ASX:IPT)Pilbara Gold Project
100km strike of prospective near surface Fortescue Group conglomerates• Focused on exploring the conglomerates
of the Hardy Formation and conglomerates at the base of the Mt Roe Basalt but limited work completed to-date
• Four main gold-bearing conglomerate occurrences on the company’s tenements
• Other asset: Commonwealth project• Au-Ag-base metals in New South
Wales• High grade Au-Ag veins at Silica Hill
over 500x500m area to a considerable depth
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Ticker IPT.AX
Share Price (A$/sh) $0.01
Common Shares O/S (M) 1,322
Equity Value (A$M) $18.50
Add: Debt (A$M) 0
Less: Cash (A$M) $5.29
Enterprise Value (A$M) $ 13.22Source: Thomson Eikon, Company Reports
Capital Structure
Source: Company Reports
Figure 40: Location of Impact Minerals Tenements
Priced as of market close on April 4, 2018, EDT and AEST(unless otherwise noted).
All values in CAD unless otherwise noted.
For Disclaimer and Applicable Disclosures, see the end of this report
37
Kalamazoo Resources Ltd. (ASX:KZR)Pilbara Project
Nuggety gold discovered with metal detector• Secured option to acquire between 80-
100% of three prospective gold projects in the Pilbara covering 252 sq. km
• Also the option to acquire 100% of its DOM’s Hill project where it has discovered a new zone of nugget occurrence (Figure 41)
• Other assets:• Cork Tree: Cu exploration underway,
project surrounded by Sandfire/Talisman JV
• Snake Well: Updated JORC (2012) mineral resource of 63koz Au
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Share Price (A$/sh) $0.08
Common Shares O/S (M) 63
Equity Value (A$M) $4.70
Add: Debt (A$M) 0
Less: Cash (A$M) $2.14
Enterprise Value (A$M) $ 2.56Source: Thomson Eikon, Company Reports
Capital Structure
Source: Company Reports
Figure 41: Location of Kalamazoo Pilbara Projects
Priced as of market close on April 4, 2018, EDT and AEST(unless otherwise noted).
All values in CAD unless otherwise noted.
For Disclaimer and Applicable Disclosures, see the end of this report
38
DGO Gold Ltd. (ASX:DGO)Pilbara Project
Actively exploring for gold in the Pilbara• 5,002 sq.km of property in the
Fortescue Group of the Pilbara• Exploration currently focused on its
Mallina tenements, 75km SE of Karratha
• 4km of strike length of the basal contact of the Mt Roe basalt with conglomerate outcrop
• 12 gram nugget detected at Scottie Well in the first couple days of field exploration (Figure 42)
ASX.DGO - Stock Chart
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Share Price (A$/sh) $0.84
Common Shares O/S (M) 11
Equity Value (A$M) $8.87
Add: Debt (A$M) 0
Less: Cash (A$M) $0.67
Enterprise Value (A$M) $ 8.20Source: Thomson Eikon, Company Reports
Capital Structure
Source: Company Reports
Figure 42: Location of DGO Gold Tenements
Priced as of market close on April 4, 2018, EDT and AEST(unless otherwise noted).
All values in CAD unless otherwise noted.
For Disclaimer and Applicable Disclosures, see the end of this report
39
Macarthur Minerals Ltd. (TSXV:MMS)Pilbara Project
Copper and Gold in the Pilbara• 3 exploration licenses located ~185km SE of
Port Hedland and ~50km SW of Marble Bar (Figure 43)
• Historic surface rock samples of up to 447 g/t Au and 3.2% Cu
• Option over adjoining tenement with 700oz Au previously extracted by prospectors
• Next steps include field mapping and sampling to be followed up with generating drill targets around historic mine workings
• Other Western Australia assets:• 1300 sq. km hard rock lithium project• 62 sq. km iron ore projects (PFS
stage)
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Ticker MMS.V
Share Price (C$/sh) $0.05
Common Shares O/S (M) 242
Equity Value (C$M) $10.90
Add: Debt (C$M) $0.00
Less: Cash (C$M) $1.84
Enterprise Value (C$M) $ 9.06Source: Thomson Eikon, Company Reports
Capital Structure
Source: Company Reports
Figure 43: Location of Macarthur Minerals Tenements
Priced as of market close on April 4, 2018, EDT and AEST(unless otherwise noted).
All values in CAD unless otherwise noted.
For Disclaimer and Applicable Disclosures, see the end of this report
40
Haoma Mining NL (Delisted) Comet Mine
Recovering Gold & Platinum in Pilbara• In 2017, recovered gold nuggets from
conglomerates through bulk sampling at Just-in-Time and Tassie Queen, near the Comet Mine, reporting gold grades of 6.57 g/t
• 18.6 tonne bulk test samples were collected from Nuggety Gully (Bamboo Creek) “scree and alluvial material”, a 4.27 tonne sub-sample returned 164.77 g/t gold and 188.59 g/t platinum. Processing of bulk trial samples is set to start in the coming weeks
• Recently delisted from the ASX, regarding exploration reporting issues
• Other assets:• Elazac Quarry• Mt Webber Dalton Deposit
Source: Company Reports
Figure 44: Haoma Mining Tenements in the Pilbara District
Priced as of market close on April 4, 2018, EDT and AEST(unless otherwise noted).
All values in CAD unless otherwise noted.
For Disclaimer and Applicable Disclosures, see the end of this report
Contact Us
If you have any follow-up questions please contact:
Derek Macpherson, VP Mining [email protected]
Alex Pitcher, Associate, Mining [email protected]
Victoria Ellis Hayes, Associate, Mining [email protected]
42
DisclosuresDisclaimerRed Cloud Klondike Strike Inc. is registered as an Exempt Market Dealer in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec, New Brunswick, Nova Scotia,Prince Edward Island, Newfoundland & Labrador, and the Yukon. Part of Red Cloud Klondike Strike Inc.'s business is to connect mining companies with suitable investors thatqualify under available regulatory exemptions (the "Red Cloud KS Business"). Red Cloud Klondike Strike Inc., its affiliates and associates, and their respective officers,directors, representatives, researchers and members of their families (collectively, "Red Cloud KS") may hold positions in the companies mentioned in this presentation andmay buy or sell, their securities or securities of the same class on the market or otherwise. Additionally, Red Cloud KS may have provided in the past, and may provide in thefuture, certain advisory or corporate finance services and receive financial and other incentives from issuers as consideration for the provision of such services.Red Cloud KS has prepared this presentation for general information purposes only, and is NOT as part of the Red Cloud KS Business. This presentation should not beconsidered a solicitation to purchase or sell securities or a recommendation to buy or sell securities. The information provided by Red Cloud KS for the purposes of thispresentation has been derived from sources believed to be accurate, but cannot be guaranteed. Opinions or analysis contained in this presentation may be subject to changeand Red Cloud KS does not undertake to advise the reader of such changes. This presentation does NOT take into account the particular investment objectives, financialsituations, or needs of individual recipients and other issues (e.g. prohibitions to investments due to law, jurisdiction issues, etc.) which may exist for certain persons.Recipients should rely on their own investigations and obtain their own professional advice before investment. Red Cloud KS will not treat recipients of this presentation ascustomers or clients by virtue of having viewed this presentation.
Company Specific Disclosure Details
1) A member of Red Cloud KS team has visited/viewed material operations of the issuer.2) In the last 12 months, Red Cloud KS has been retained under a service or advisory agreement by the subject issuer.3) In the last 12 months, Red Cloud KS has received compensation for investment banking services.4) Red Cloud KS or a member of the Red Cloud KS team or household, has a long position in the shares and/or the options of the subject issuer.5) Red Cloud KS or a member of the Red Cloud KS team or household, has a short position in the shares and/or the options of the subject issuer.6) Red Cloud KS or a member of the Red Cloud KS team own more than 1% of any class of common equity of the subject issuer.7) A member of Red Cloud KS team or a member’s household serves as a Director or Officer or Advisory Board Member of the subject issuer.
Novo Resources Corp NVO.V 1,2,3,4
Artemis Resources Ltd ARV.AX 1
Millennium Minerals Ltd MOY.AX None
Kairos Minerals Ltd KAI.AX None
De Grey Mining Ltd DEG.AX 1
Calidus Resources Ltd CAI.AX 1
Marindi Metals Ltd MZN.AX None
Arrow Minerals Ltd AMD.AX None
Impact Minerals Ltd IPT.AX None
Rugby Mining Ltd RUG.V None
Kalamazoo Resources Ltd KZR.AX None
DGO Gold Ltd DGO.AX None
International Prospect Ventures Ltd IZZ.V None
NxGold Ltd NXN.V 1,2
Pacton Gold Inc PAC.V None
Macarthur Minerals Ltd MMS.V None
Coziron Resources Ltd CZR.AX None
New Frontier Exploration (formerly LMTD) Private 1,2
Haoma Mining NL Private None
Appendix
44
AppendixMetal Price & Currency Assumptions
2018E 2019E 2020E 2021E 2022E
Gold Price (US$/oz) $1,300 $1,300 $1,300 $1,300 $1,300
Consensus Gold Price (US$/oz) $1,290 $1,317 $1,349 $1,417 $1,274Source: Red Cloud KS Estimates, Bloomberg
2018E 2019E 2020E 2021E 2022E
AUD/USD Exchange Rate 0.80 0.80 0.80 0.80 0.800.80 0.80 0.80 0.80 0.80
Source: Red Cloud KS Estimates
CAD/USD Exchange Rate
Figure 45: Gold Price Forecast
Figure 46: Exchange Rate Forecasts
Priced as of market close on April 4, 2018, EDT and AEST(unless otherwise noted).
All values in CAD unless otherwise noted.
For Disclaimer and Applicable Disclosures, see the end of this report