Trends and Innovations in Mining Finance January 2019...Trends and Innovations in Mining Finance...

21
January 2019 Trends and Innovations in Mining Finance David Shaver – CIBC Capital Markets

Transcript of Trends and Innovations in Mining Finance January 2019...Trends and Innovations in Mining Finance...

Page 1: Trends and Innovations in Mining Finance January 2019...Trends and Innovations in Mining Finance January 2019 David Shaver – CIBC Capital Markets . Agenda I. Market Backdrop II.

January 2019 Trends and Innovations in Mining Finance

David Shaver – CIBC Capital Markets

Page 2: Trends and Innovations in Mining Finance January 2019...Trends and Innovations in Mining Finance January 2019 David Shaver – CIBC Capital Markets . Agenda I. Market Backdrop II.

Agenda

I. Market Backdrop

II. Traditional Mining Financings

III. Alternative Mining Financings

IV. Key Takeaways

This presentation is confidential and has been prepared by CIBC Capital Markets. In preparing this presentation, CIBC Capital Markets has relied without any independent verification on information provided by you

(the “Company”) or that is publicly available. The information and any analyses in this presentation are preliminary are is not intended to constitute a "valuation," "formal valuation," "appraisal," "prior valuation," or a

"report, statement or opinion of an expert" for purposes of any securities legislation in Canada or otherwise. We are not legal, tax or accounting experts and we express no opinion concerning any legal, tax or

accounting matters or the sufficiency of this presentation for your purposes.

This printed presentation is incomplete without reference to the oral presentation, discussion and any related written materials that supplement it.

These materials are confidential and are intended solely for your benefit and for your internal use only and may not be reproduced, disseminated, quoted from or referred to in whole or in part at any time, in any

manner or for any purpose, without obtaining the prior written consent of CIBC Capital Markets in each specific instance.

CIBC Capital Markets employees are prohibited from offering to change or otherwise influence any research report, rating or price target to any company as inducement for the receipt of any business or

compensation.

CIBC World Markets Inc. is a legal entity name. CIBC Capital Markets is a trademark brand name under which different legal entities provide different services under this umbrella brand. Products and/or services

offered through CIBC Capital Markets include products and/or services offered by the Canadian Imperial Bank of Commerce, the parent bank of CIBC World Markets Inc. and various other subsidiaries of the Canadian

Imperial Bank of Commerce. Services offered by the Canadian Imperial Bank of Commerce include corporate lending services, foreign exchange, money market instruments, structured notes, interest rate products and

commodities, equity options and OTC derivatives. Canadian exchange-traded equity options are executed through CIBC World Markets Inc. Equity and fixed income securities are executed through

CIBC World Markets Inc. and other directly or indirectly held subsidiaries of CIBC.

CIBC World Markets Inc. is a member of the Canadian Investor Protection Fund and the Investment Industry Regulatory Organization of Canada. CIBC World Markets Corp. is a member of the Financial Industry

Regulatory Authority. CIBC World Markets plc is regulated by the Prudential Regulation Authority and Financial Conduct Authority.

CIBC World Markets Securities Ireland Limited is regulated by the Central Bank of Ireland. CIBC Australia Ltd is regulated by the Australia Securities and Investment Commission. CIBC World Markets (Japan) Inc. is a

member of the Japanese Securities Dealer Association. Canadian Imperial Bank of Commerce, Hong Kong Branch, is a registered institution under the Securities and Futures Ordinance, Cap 571. Canadian Imperial Bank

of Commerce, Singapore Branch, is an offshore bank licensed and regulated by the Monetary Authority of Singapore.

All values are expressed in Canadian dollars, unless otherwise noted.

Page 3: Trends and Innovations in Mining Finance January 2019...Trends and Innovations in Mining Finance January 2019 David Shaver – CIBC Capital Markets . Agenda I. Market Backdrop II.

(29%)

(24%)

(18%)

(13%)

(12%)

(12%)

(12%)

(11%)

(6%)

(5%)

(4%)

(3%)

(2%)

(2%)

1%

12%

14%

58.1%

1314%

Energy

Base Metals Equities

Consumer Discr.

Financials

Utilities

S&P / TSX

Health Care

Materials

S&P 500

Industrials

Gold Equities

Real Estate

Telecom

Gold Price

Consumer Staples

Technology

FANG

Cannabis

Bitcoin

Sector Performance

Increased volatility in the broader equity

market

2018 Last 3 Months1

Risk capital flowing into cannabis and

cryptocurrencies

Potential for further geopolitical uncertainty,

market sell offs, trade wars

Interest rate hike cycle slowing

Weakening U.S dollar benefiting gold

1

3

5

2

4

Relative Index Performance Key Themes

1 Market data as January 25, 2019. 2 Gold equities based on TSX Index and base metals equities based on TSX Index.

Source: Bloomberg Financial Markets and Thomson One Analytics.

2

2

2

2

1

(51%)

(12%)

-3%

(2%)

2%

2%

2%

3%

3%

4%

4%

5%

5%

7%

10%

10%

11%

14%

26%

Bitcoin

Energy

FANG

S&P 500

Financials

Industrials

Real Estate

S&P / TSX

Consumer Discr.

Utilities

Health Care

Telecom

Gold Price

Base Metals Equities

Technology

Materials

Consumer Staples

Gold Equities

Cannabis

Page 4: Trends and Innovations in Mining Finance January 2019...Trends and Innovations in Mining Finance January 2019 David Shaver – CIBC Capital Markets . Agenda I. Market Backdrop II.

(52%)

(23%)

(19%)

(18%)

(15%)

(13%)

(9%)

(6%)

(3%)

(1%)

14%

26%

Cobalt

Zinc

Lead

Crude Oil

Copper

Nickel

Silver

Thermal Coal

Gold

Iron Ore

Met Coal

Uranium

Commodity Overview 2

• Uranium and Met Coal been the top performers over the last twelve months while more prominent metals (eg. gold, silver, copper)

have underperformed

• The outlook remains strong for uranium, cobalt, nickel and silver which should drive capital markets activity in these metals

• Gold building strong momentum with recent rise through US$1,300/oz

Commodity Forecast – Spot to Long Term Outlook1 Commodity Performance – Last Twelve Months

1 Market and consensus data as at January 25, 2019. 2 Iron ore price based on 62% iron ore fines price.

Source: Bloomberg Financial Markets and Thomson One Analytics.

2

(35%)

(32%)

(17%)

(11%)

(1%)

(0%)

12%

15%

20%

39%

49%

66%

Thermal Coal

Met Coal

Iron Ore

Zinc

Gold

Lead

Copper

Crude Oil

Silver

Nickel

Cobalt

Uranium

2

Page 5: Trends and Innovations in Mining Finance January 2019...Trends and Innovations in Mining Finance January 2019 David Shaver – CIBC Capital Markets . Agenda I. Market Backdrop II.

Corporate Balance Sheets in Good Shape 3

Average Senior Gold Net Debt/EBITDA1,2

Average Senior Base Metals Net Debt/EBITDA1,2

Key Themes

Strong cash flow generation from senior gold and senior

base metal producers 1

Debt repaid and leverage ratios reduced 2

Anticipated interest rate hikes slowing 3

1 Based on analyst consensus estimates of EBITDA and Net Debt. 2 Market Data as at January 25, 2019.

Senior Gold: Agnico, Barrick, Goldcorp, Kinross, Newcrest and Newmont

Senior Base Metals: Anglo American, BHP, Glencore, Rio Tinto, and Vale.

Source: Bloomberg Financial Markets and Thomson One Analytics.

Rising Interest Rate Environment (%)

1.8x1.0x

2014 Current

1.7x

0.7x

2014 Current

1.00%

1.50%

2.00%

2.50%

3.00%

3.50%

Jan-14 Apr-15 Jul-16 Oct-17 Jan-19

US 10 Year Treasury

Page 6: Trends and Innovations in Mining Finance January 2019...Trends and Innovations in Mining Finance January 2019 David Shaver – CIBC Capital Markets . Agenda I. Market Backdrop II.

Note: Market data as at January 25, 2019.

Senior Gold: Agnico, Barrick, Goldcorp, Kinross, Newcrest and Newmont.

Senior Base Metals: Anglo American, BHP, Glencore, Rio Tinto, and Vale.

Source: Bloomberg Financial Markets and Thomson One Analytics.

Mining Equity Valuations – Stocks Are Cheap 4

Senior Base Metals Senior Gold Senior Base Metals Senior Gold

Price/Net Asset Value Price/Next 12 Months Cash Flow

0.50x

1.00x

1.50x

Jan-17 Jan-18 Jan-19

0.83x

1.24x

4.0x

5.0x

6.0x

7.0x

8.0x

9.0x

10.0x

11.0x

Jan-17 Jan-18 Jan-19

5.6x

7.2x

Page 7: Trends and Innovations in Mining Finance January 2019...Trends and Innovations in Mining Finance January 2019 David Shaver – CIBC Capital Markets . Agenda I. Market Backdrop II.

60

70

80

90

100

110

120

24-Aug 3-Sep 13-Sep 23-Sep

Rela

tive P

erf

. (B

ase

=100)

(20%)

(0%)

30

40

50

60

70

80

90

100

110

120

15-Jul 30-Jul 14-Aug 29-Aug 13-Sep 28-Sep

Rela

tive P

erf

. (B

ase

=100)

(56%)

(15%)

Mining Investor Themes – Event Driven Risk 5

1 Price performance shown as 10 days before announcement to 6 months after announcement.

Source: Bloomberg Financial Markets and Thomson One Analytics.

• Announcement of revised mine plan and downward guidance revision at

Detour Lake

Announcement

• Announcement of revised life of mine plan at Rainy River; downward

guidance revision

• Announcement of reversal of ruling to reinstate Escobal mining license

Announcement

Announcement

Detour (April 26, 2018) New Gold (July 25, 2018)

Tahoe (September 4, 2018)

30

40

50

60

70

80

90

100

110

120

Apr-18 Jun-18 Aug-18

Rela

tive P

erf

. (B

ase

=100)

(29%)

(18%)

• Announcement of material reduction in guidance and indication of

potential revisions to R&R

Guyana (October 29, 2018)

30

40

50

60

70

80

90

100

110

120

19-Oct 1-Nov 14-Nov 27-Nov

Rela

tive P

erf

. (B

ase

=100)

(50%)

6%

Announcement

Page 8: Trends and Innovations in Mining Finance January 2019...Trends and Innovations in Mining Finance January 2019 David Shaver – CIBC Capital Markets . Agenda I. Market Backdrop II.

6 Mining Sector Flows

Canadian Precious Metals Mutual Funds

Bullion and Gold Equity ETF Flows (US$ billion)

Key Themes

1 Source: Investment Company Institute 2017 Fact Book and February 2018 Monthly Report; net fund flows include reinvested dividends.

U.S. Domestic Equity Cumulative Net Fund Flows1 (US$ billion)

AUM1 (C$ billion) Total Return

$6.8

$2.0

$3.3$2.9

$2.1

PeakSince 2005

2015(Avg.)

2016(Avg.)

2017(Avg.)

Current

11.8%

(8.4%)

3 Year 2018

($25.5)

($13.5)

$44.6

($12.0)

($38.6)

2014 2015 2016 2017 2018

Funds flows from actively managed funds to passive funds

(ETF, Index, and Quant Funds) continue to grow

Passive capital does not buy new equity issues

1

2

Increasing electronic and algorithmic trading strategies

heightens volatility 3

Page 9: Trends and Innovations in Mining Finance January 2019...Trends and Innovations in Mining Finance January 2019 David Shaver – CIBC Capital Markets . Agenda I. Market Backdrop II.

Overview of Mining Finance Alternatives 7

Common

Shares

Preferred

Shares

Joint

Ventures Royalties

Commodity

Forwards /

Streams

Convertible

Debentures Bonds

Bank

Debt

Project

Debt

Equity Debt

Page 10: Trends and Innovations in Mining Finance January 2019...Trends and Innovations in Mining Finance January 2019 David Shaver – CIBC Capital Markets . Agenda I. Market Backdrop II.

Issuer Pricing DateIssue Size (C$

millions)Discount (%)

Nov-18 $25 na

Sep-18 $26 11

Sep-18 $97 9.5

Sep-18 $90 na

Aug-18 $73 na

Jul-18 $97 12

Jun-18 $300 11.8

May-18 $280 15.3

$0

$2

$4

$6

$8

$10

$12

$14

$16

$18

$20

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Thousa

nds Coal & Uranium

Base Metals

Precious Metals

Canadian Mining Equity Issuance 8

TSX Mining Equity Issuance (C$ billions)

Select Mining Equity Issuances (C$ millions)

1 Consists of two tranches: $5 million common share tranche (5.6% discount) and a $20 million FT tranche (38.9% premium). 2 Consists of three tranches: $9 million charitable FT tranche (32.2% premium), $6 million traditional FT tranche (12.6% premium) and a $9 million common share tranche (2.3% discount). 3 Consists of two tranches: $40 million tranche (66.7 premium) and $28 million tranche (34.5% premium). Includes concurrent $5 mm private placement of common shares. Distribution metrics pertain to public

common offers.

Includes $66 million concurrent non-brokered private placement of common shares to RCF, Newmont and BlackRock. Distribution metrics pertain to public common share offering only.

Note: Based on pricing date.

As of January 25, 2019.

Key Themes

Mining equity issuance at lowest levels since 2002

Base metals a significant portion of recent issuance

Offering sizes have been small and new issue discounts

remain large

1

3

2

2

1

3

Page 11: Trends and Innovations in Mining Finance January 2019...Trends and Innovations in Mining Finance January 2019 David Shaver – CIBC Capital Markets . Agenda I. Market Backdrop II.

C$179mm

9

Select Recent Canadian IPOs (Over C$50 million, Excluding SPACs) Key Themes

Mining Initial Public Offerings Update

1 IPO sector composition based upon dollar value of IPOs.

Note: As at January 25, 2019.

“Window driven market” with 2017 seeing first significant

IPO’s in 5 years 1

Recent IPO’s primarily in base metals – zinc and copper 2

A number of IPOs in the pipeline for 2019 and success will

depend on market conditions 3

Canadian Mining IPO Market Update C$ millions (TSX)1

$277$204

$615

$317

$583

$1,883

$107-

$1,075

$60

$306

- -$155

-

$1,392

$21

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Mining IPOs

C$127mm

C$52mm

USD$570mm

C$23mm

C$52.5mm

C$200mm

C$33mm

C$21mm

Withdrawn

Page 12: Trends and Innovations in Mining Finance January 2019...Trends and Innovations in Mining Finance January 2019 David Shaver – CIBC Capital Markets . Agenda I. Market Backdrop II.

31%

20%

16%

6%

6%

5%

5%4%4%4%

Dimensional

PIMCO

TIAA

Franklin Templeton

BlackRock

T. Rowe Price

JP Morgan

Capital R&M

Fidelity

Vanguard

19%

13%

12%

12%

11%

9%

9%

7%

5%3%

MD Financial

Manulife

BMO

CIBC

Scotia

Fidelity

CI Financial

TD

IGM Financial

RBC

Evolving Equity Investor Landscape 10

• Money management is becoming increasingly concentrated

1 Source: Bloomberg Intelligence. 2 Source: ETF.com and Investment News as at December 31, 2016.

Canadian Top 10 Mutual Fund Providers - AUM1,2 U.S. Top 10 Mutual Fund Providers - AUM1,2

Total Canadian Mutual Fund Provider AUM: US$1.1 trillion Total U.S Mutual Fund Provider AUM: US$8.7 trillion

Page 13: Trends and Innovations in Mining Finance January 2019...Trends and Innovations in Mining Finance January 2019 David Shaver – CIBC Capital Markets . Agenda I. Market Backdrop II.

11 Mining Convertible Debenture Update

Market data as of January 25, 2019.

Source: Bloomberg and CIBC Internal Database.

Select Mining Issuers (2014 – 2018 YTD)

Mining Convertible Debentures Issuance 2010-2018 YTD (US$ millions)

1,340

754

Bonds that are convertible into equity at a premium to the

current share price 1

Provides downside protection to investor and lowers the

borrowing costs for issuers 2

Recent issuance has accelerated in the junior mining sector

to fund project development and to refinance debt 3

Key Themes

670154

643

608

2975 65

335

490

670

112

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

2010 2011 2012 2013 2014 2015 2016 2017 2018

Base Metals

Precious Metals

Page 14: Trends and Innovations in Mining Finance January 2019...Trends and Innovations in Mining Finance January 2019 David Shaver – CIBC Capital Markets . Agenda I. Market Backdrop II.

Mining High Yield Bond Market Update 12

Market data as of January 25, 2019.

Source: S&P LCD Database.

Select Base Metals and Gold Mining Issuance Since 2010 (US$ millions)

2017-2018 Selected Mining High Yield Deals

Key Themes

Has provided significant capital to the mining sector 1

A low interest rate environment provided attractive funding

opportunities to producing miners 2

Issuance has slowed in 2018 with volatile interest rates and

no refinancings in the gold sector 3

$3,540

$2,050

$3,400

$250

$2,345

$3,840

$2,250

$5,775

$3,075

$1,000

$2,800

$800

$465

$2,450

$-

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

$9,000

2010 2011 2012 2013 2014 2015 2016 2017 2018

Total Precious Metals

Total Base Metal

Issuer

Amount Issued

(US$ millions) Type

First Quantum Minerals $1,850 Base

Baffinland Iron Mines $575 Base

Fortescue Metals Group $500 Base

Largo Resources $150 Base

Kinross $500 Precious

IAMGOLD Corp $400 Precious

New Gold $300 Precious

Total $4,275

Page 15: Trends and Innovations in Mining Finance January 2019...Trends and Innovations in Mining Finance January 2019 David Shaver – CIBC Capital Markets . Agenda I. Market Backdrop II.

Mining Bank Debt Update 13

Source: Bloomberg and CIBC Internal Database.

Mining Issuances in the Canadian Bank Market 2010-2018 (C$ millions)

Key Themes

Most intermediate to large cap miners have revolving

credit facilities with a syndicate of banks 1

Many of these facilities are undrawn at this time 2

Banks have remained supportive of the mining sector

with many new or renewed credit facilities put in

place since 2014

3

Precious Metals Diversifieds Base Metals Iron Ore

Battery Metals Streamers Uranium

$3,686

$13,200

$18,189 $19,633 $18,990

$24,960

$19,457

$24,589 $24,796

$-

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

2010 2011 2012 2013 2014 2015 2016 2017 2018

Page 16: Trends and Innovations in Mining Finance January 2019...Trends and Innovations in Mining Finance January 2019 David Shaver – CIBC Capital Markets . Agenda I. Market Backdrop II.

57%

48%

33%

65%

90%

49%

65%

41%

100%

23%

19%

14%

9%

18%

28%

24% 38% 58% 35% 10% 32%7%

59% 77%

Eagle Fruta del Norte Woodlawn Buritica MRC Amulsar Brucejack Hope Bay Red Chris Scully Mine

Other

Royalty

Project Debt

$398 $1,050 $183 $384 $96 $325 $540 $294 $106 $276

Mining Project Debt Update

14

Source: Company disclosures.

Recent Select Transaction Financing Blends (US$ millions)

Financing Size

Project Name

Key Themes

Project debt remains a significant part of development

funding 1

Financing packages have also included equity, warrants and

streams 2

In general, financing packages are concluded post completion

of a feasibility study 3

Lenders view Development Bank and Export Credit Agency

favorably when financing in high risk jurisdictions 4

Page 17: Trends and Innovations in Mining Finance January 2019...Trends and Innovations in Mining Finance January 2019 David Shaver – CIBC Capital Markets . Agenda I. Market Backdrop II.

16

Alternative Financings vs. Jr. Gold Equity1,2

Mining Alternative Financings – Junior Gold Funding

Key Themes

Junior gold companies have

historically relied on public equity

markets to raise capital

1

1 Market data as of January 25, 2019.

2 Junior gold consists of gold mining companies listed on the TSX with a market cap less than C$300 mm

15

Juniors now relying less on public

equity and more on alternative

sources of capital

2

Streams provided by royalty

companies – significant in 2014 and

2015

3

Strategic private placements by larger

cap miners – in 2017 and 2018 4

Strategic Private Placements Equity Streams

7% 7%17%

39%

65%58%

36%

83%

44%

20%

34%

57%

17%

15%

$1,246

$1,124

$853

$1,498

$1,288

2014 2015 2016 2017 2018

Page 18: Trends and Innovations in Mining Finance January 2019...Trends and Innovations in Mining Finance January 2019 David Shaver – CIBC Capital Markets . Agenda I. Market Backdrop II.

Avg. Deal Size

Mining Alternative Financings – Streams and Royalties 16

Royalty and Stream Transactions1 (US$ billion; Since 2012)

Osisko /

Orion

1 Average deal size based on transactions over US$250 million only. 2017 average excludes Orion / Osisko transaction.

Market data as at January 25, 2019.

Source: SNL Financial and CIBC internal database.

Aggregate Deal Value

# of Transactions

17 24 12 17 9 11 9

Key Themes

Streaming and royalty companies have become significant

players in the mining space and key providers of capital 1

Strong level of activity in 2012-2016 as senior precious and

base metals miners reduced debt 2

Recent activity has focused on supporting acquisitions and

project development 3

Scarcity and increased competition has resulted in strong

competition for high quality streams 4

$2.2

$2.7

$1.2

$4.4

$2.1

$1.4

$2.0

$0.9$1.0

$0.6 $0.7 $0.7

$0.8

-

$1

$2

$3

$4

$5

2012 2013 2014 2015 2016 2017 2018 YTD

Str

eam

ing T

ransa

cti

on V

alu

e

(US$ b

illi

ons)

Page 19: Trends and Innovations in Mining Finance January 2019...Trends and Innovations in Mining Finance January 2019 David Shaver – CIBC Capital Markets . Agenda I. Market Backdrop II.

• Arcus Development

• Auryn Resources

• Contact Gold

• Colorado Resources

• Gold Standard Ventures

• Independence Gold

• Mawson Resources

• Probe Metals

• Sirios Resources

• Alio Gold

• Triumph Gold

• Continental

• Goldstrike

• Pilot Gold

• TMAC

• Almadex

• SolGold

• Lundin Gold

1 Market data as at January 25, 2019. 2 Junior gold consists of gold mining companies listed on the TSX with a market cap less than C$300 mm.

Source: Bloomberg Financial Markets.

Capital Raised by Jr. Gold Companies1,2 (2017 – 2018) Strategic Private Placements vs. Jr. Gold Equity1,2

17

Strategic Investments / Holdings More Common

• Belo Sun

• Candelaria

• Cartier Resources

• GoldQuest

• Orla

• Otis Gold

• White Gold

• NuLegacy Gold

• Coral Gold

• ATAC Resources

• Reunion Gold

• Skeena

• Royal Road

• Midas Gold

• Gold Standard Ventures

• NuLegacy Gold

• Calibre Mining

• RTG Mining

• Lundin Gold

• Victoria Gold

• White Gold

• Nighthawk Gold

• Aurion Resources

• Pure Gold

• TomaGold

• Novo Resources

• Cardinal Resources

• Asanko

Indicates new or additional investment made in 2016 – 2018

Mining Alternative Financings – Strategic Private Placements

• The larger cap gold companies have become significant providers of capital to the junior golds

StrategicPP76%

CommonShares

20%

FT Shares4%Chart Label Transaction Type Value

(C$ mm)

Strategic

PPStrategic Private Placements $839

Common

SharesOther Common Shares $218

FT Shares Other Flow-Through Shares $42

Total Total $1,100

11% 16% 17%

47%76%89%

84%

83%

53% 24%

2014 2015 2016 2017 2018

Strategic Private Placements Other Equity

Page 20: Trends and Innovations in Mining Finance January 2019...Trends and Innovations in Mining Finance January 2019 David Shaver – CIBC Capital Markets . Agenda I. Market Backdrop II.

18

Select Mining Private Equity Investors

Mining Alternative Financings - Private Equity

Market data as of January 25, 2019.

$70

$452 $378

$85

$700

$275

$540

December’17 May’17 January’17 May’15 December’17 March’18 May’18 Key Themes

Private equity investors have been deploying

significant capital in the mining sector 1

Strong technical expertise and ability to

understand technical risks 2

Ability to provide a combination of

structures: equity/equity linked, debt,

streams/royalties

3

US$ millions

Page 21: Trends and Innovations in Mining Finance January 2019...Trends and Innovations in Mining Finance January 2019 David Shaver – CIBC Capital Markets . Agenda I. Market Backdrop II.

Key Takeaways 19

Access to capital for mining remains window driven and capital providers are highly selective

High risk capital, which has traditionally supported junior mining, has moved on to several other alternatives

which have provided strong returns R

Structural changes in the public equity markets are negatively impacting a miner’s ability to raise equity capital R

However, sophisticated alternative providers of capital are emerging and providing highly structured financing

packages R

Large miners continue to have access to relatively inexpensive debt R

R

Understand all your sources of funding and how they fit with your objectives, and be ready to

finance when the window opens