Miners, Operators, Builders unlocking value in resource assets

Transcription

1 Miners, Operators, Builders unlocking value in resource assets January 2015

2 F&M at a Glance What we do Forbes & Manhattan ( F&M ) invests in resources companies with high growth potential. F&M adds capital, talent and strategy to permanently strengthen companies and increase their value Objective F&M s objective is to achieve superior performance for shareholders through active management of projects, ranging from advanced exploration, to development and producing assets - across an array of resource commodities Unique and Proven Model F&M s unique and proven model provides portfolio resource companies with the technical and financial depth of a major global mining concern Companies have access to a world class, global network of political leaders, industry experts, technical and developmental teams and financial experts First Class Team F&M s first class team of specialists have a proven history in taking projects from exploration stage to commercial operations F&M also has an unparalleled ability to raise capital for projects Risk Mitigation Through Active Management Developing resource assets are inherently risky, however, F&M s active management approach aims to mitigate risk through hands-on involvement, technical experts, skilled operators, and a well-connected international advisory board with deep running experience in emerging markets 2

3 F&M Highlights Over the last 10 years, we have Discovered more than 20M oz of gold to compliant standards worth more than $34 billion in situ value today Produced almost 1 million oz of gold from mines that were built or re-started by our teams. Another million ounces have been produced from gold mines bought from F&M companies Discovered + 3 billion tonnes of iron metal to compliant standards Produced 3.3 million tonnes of saleable iron ore concentrate before being acquired and another 12 million tonnes since Discovered over 1.5 billion tonnes of Potash Mineralization that is compliant Discovered over 1.0 billion barrels of oil (oil shale) NI compliant Discovered under or JORC compliant standards resources in silver, zinc, nickel, phosphate, vanadium, tungsten, lithium, and other commodities 3

4 Global Mining Footprint Coastal Gold Pitchblack Canadian Royalties EarthRenew Northern Sun Mining Rodinia Coastal Gold Mason Graphite Emerita Toronto Black Iron Los Angeles Savary Gold Alder Resources Brazil Potash Belo Sun Allana DT Plantations Aguia Coastal Gold Arena Minerals Irati Aguia Belo Horizonte Rodinia Kombat Copper Legacy Platinum Forbes Offices Projects / Operations 4

5 F&M A Unique Offering Integrated Team Built on Technical and Operational Expertise and Accomplished Financial Markets Professionals Executive Committee Stan Bharti Matt Simpson Scott Moore Fred Leigh Deb Battiston Pat Gleeson David Argyle F&M Management Technical Team Legal Team Over 50 engineers Over 50 geologists Expertise in all mining, energy and agriculture products Head of Department Pat Gleeson (public) Peter McCague (private) 11 (globally trained) full-time securities lawyers and support staff Stan Bharti Chairman Head of Department Simon Marcotte Matt Simpson CEO & President Kam Gill Executive Assistant Capital Markets & Corporate Finance 20 people with expertise in M&A Investment banking Corporate Finance & Corporate Development Investor relations CFO Deborah Battiston Over 20 in house financial and accounting professionals and support staff with expertise in Scott Moore COO Deb Battiston CFO Fred Leigh CIO Pat Gleeson Chief Council Finance, Accounting & Administration Public reporting, controls. compliance and disclosure International asset and treasury management International and local tax 5

6 F&M Select Key Deals Consolidated Thompson Sold for USD 4.9 billion Market Cap when F&M got involved was $1m. Sale price of US$4.9bn. Assets acquired for 22c in the dollar and sold for $17.25 Desert Sun Mining Sold for USD 750 million Acquired a controlling position in Desert Sun in Developed Jacobina mine to near production and sold 4 years later for $750m Avion Gold Sold for USD 400 million Originally acquired distressed assets in 2008 for $0.20 in the dollar. Sold to Endeavour Mining in 2012 for $400m (~89c) Sulliden Gold Corp. Rio Alto & Sulliden Merger $464MM value on closing F&M acquired Sulliden in March 2009 and resolved long-standing disputes regarding title. Current resource of 3.4moz Au (Ag co prod) Black Iron Mkt Cap CAD 28 million Iron ore exploration and development company - project in Ukraine. Recently signed development agreement with MetInvest Belo Sun Mkt Cap CAD 59 million Exploration company with portfolio of assets in Brazil. Current mineral resource of 7.6 moz Brazil Potash Mkt Cap CAD 238 million World-class 400 km long Amazon potash basin with similar scale, geology and age as the Saskatchewan basin in Canada Mason Graphite Mkt Cap CAD 65 million Graphite exploration and development company with asset in Quebec, Canada. Highest graphite grade deposit known in the world. Irati Energy Mkt Cap CAD 95 million Oil shale company with projects located in Southern Brazil. 671 mmbbls of best estimate NI resource Ongoing Ongoing Ongoing Ongoing Ongoing 6

7 F&M Outstanding Investment Returns In the past 11 years, F&M has developed 28 portfolio companies F&M has generated consistently high returns, achieved by investments and exits across Latin America, Africa, Australasia and North America Core Portfolio 1 F&M Invested Capital F&M including Co-investors Number of Transactions Capital Invested ($ millions) 146 1,515 Unrealized Proceeds ($ millions) Realized Proceeds ($ millions) 238 1,968 Total Value ($ millions) 288 2,327 Gross IRR 77.1% 167.4% Multiple of Cost (overall) 2.0x 1.5x Weighted Average Holding Period, Years Data is as of December 31, 2013 An Outstanding Track Record in Value Creation 7

8 An Unrivalled Technical Platform and Skills Base Ability to Execute Falconbridge Vale Goldcorp Aur Resources Newmont Mining Rio Tinto IOC Vale Xstrata WMC Resources David Gower Parviz Farsangi Mike Hoffman Don Dudek Peter MacLean Matt Simpson Jose Fanton Helio Diniz Bill Stone Professional geologist and the former Global Head of Nickel Exploration for Falconbridge. Numerous discoveries were made under Mr. Gower s leadership with a particular focus on Brazil Mining Engineer and former Executive Vice-President and Chief Operating Officer of Vale Inco, the wholly owned nickel operations of Vale with a global workforce of 8,000 and revenue exceeding $11 Billion annually 28 years of experience as mining engineer in senior executive positions at Crocodile Gold, Goldcorp Inc., Desert Sun Mining Corp., and Yamana Gold Inc. 30 years experience in mineral exploration, currently President and CEO Savary Gold and Alder Resources, recently Senior VP Technical Services Endeavour Mining, Senior VP Exploration Avion Gold Corp, Exploration Manager for Aur Resources where he was responsible for several economic gold and base metal discoveries in Canada and Latin America Senior geologist with >20 years experience in mining and exploration with gold, base metal and potash experience working for several companies including Aur Resources, and Newmont Mining Formerly served as Rio Tinto s Iron Ore Mine General Manager in Canada accountable for 650 people. He had progressive roles in business evaluation, operations planning, continuous improvement. He has extensive experience in mine design and construction from work at Hatch. 30 years experience in mineral exploration with Xstrata, Falconbridge, Vale, and Phelps Dodge including discoveries of significant copper-gold deposits in Para and Mato Grosso States 30 years of experience and previously Head of Xstrata Brasil where he was a primary discoverer of the world class Araguaia Nickel Deposit and also assembled one of the most impressive property portfolios in the prolific Carajas Mineral District Chief Geologist and Exploration Executive with 30 years of national and international exploration and operations experience in gold, nickel-copper, platinum metals, zinc-lead and copper with junior and mid-tier companies, including LAC Minerals Ltd. (Ontario-Quebec), WMC Resources Ltd. (Australia) and North American Palladium Ltd. (Ontario-Quebec, Europe) Extensive Global Expertise In-house 8

9 International Advisory Board Larry King, U.S.A. American icon; Former Host of CNN s Larry King Live General Lewis MacKenzie, Canadian Army (Ret.) Canadian Forces for 35 years; led the UN peacekeeping mission in Sarajevo Hon. Pierre Pettigrew, PC, Canada Served as Canadian Federal Minister of Foreign Affairs and International Trade Jim Rogers Author, financial commentator and successful international investor Michael Spektor President of the Company VS Energy International Ukraine since 2006 Bernard Wilson Corporate Finance and Investment Banking advisor with substantial experience in restructurings 9

10 Investment Criteria 1. World Class Size Potential World class size and/or grade is a key product differentiator in an over-crowded sector Established resource base with potential for significant growth & value uplift through exploration Examples Gold, target 3 moz or greater, with preference for higher grade and polymetallic systems Iron ore, target 500 MT 1 billion tons+ depending on logistics and infrastructure Will consider lower tonnages on exceptional direct ship ore Potash, target 500 MT minimum size potash basins, e.g. Brazil and Ethiopia Geological / Exploration Risk is Minimized Case Study: Belo Sun The company acquired control in 2009 with resource of 2.1 moz gold, but identified greater exploration potential. Today the deposit has a resource of 7.6 moz Focusing on expanding and completing a feasibility study on it s 100% owned Volta Grande Project in Para State, Brazil Increased property position from 195 sq. km to 1,305 sq km in June 2011 Production targeted for

11 Investment Criteria 2. Manageable Geopolitical Risk F&M recognizes that the best opportunities for value and growth are often in the emerging markets Develop and supplement strong local relationships with our influential international advisory board Balance risk-reward trade-off when entering new or risky jurisdictions Work in concert with the local governments as a long term partner Liaising with our partners MIGA and the World Bank who have successfully provided Political Risk Insurance for over $17 bn of emerging markets investments Case Study: Allana Potash F&M purchased two potash projects in Ethiopia and Argentina Allana began with a historical resource estimate 105 million tonnes inferred Drilling results from a resource estimate released in June 2011 increased total measured, indicated and inferred resources to billion tonnes Working towards production in late

12 Investment Criteria 3. Compelling Valuation & Structure Target 5-10x upside from initial investment through to public market exit over 3-5 years Projects often acquired at steep discounts due to technical geopolitical or other risks F&M has the ability to overcome these issues and exploit the asset through its operational edge Deals structured to optimize capital flows and reduce risk, through joint venture and earn-in structures Partnerships are created that align interests, maximize cash that is put into the ground and minimize upfront cash payments to vendors Exit strategies are conceived on deal entry Case Study: Consolidated Thompson Iron Mines Identified, developed and operated 8 Mm tpy iron ore mine Secured strategic off take financing from WISCO North American industry player purchased company for $4.7B in cash Optimal Structuring and Valuation Discipline Has Generated High Returns for F&M 12

13 Investment Criteria 4. Ability to Transform Assets F&M provides management, capital and direction to move resource assets up the value chain Resource delineation and expansion Feasibility study Permitting/environmental Financing Construction Operation and expansion At each stage the project becomes less risky and more valuable Success is not contingent on rising commodity prices Well Proven Mining Engineering Process to Unlocking Value Case Study: Avion Gold F&M bought the shuttered Tabakoto mine and restarted it after identifying mining inefficiencies and re-engineering it Massively expanded resource base through acquisitions and successful exploration in Burkina Faso Operated & executed successfully through the coup delivering record months Sold to Endeavour Gold in August 2012, significant premium to the pre-announcement stock price 13

14 Investment Criteria 5. Profitable Exits Exit typically achieved through a dual listing on other exchanges Extensive experience taking companies post IPO as a core part of F&M s merchant banking business model Reverse takeover RTO, IPO and strategic merger Canadian (TSX) markets usually best suited to recognize value in mining and natural resource Potential dual listing on other markets Target gradual public exit over 1-3 years Built relationships with top fund managers, investment bankers and analysts in North America, Europe and Asia as well as our global mining industry peers Built a following in the investment community to achieve better valuation and liquidity Proven Exit Strategy with Repeated Execution Case Study: Rio Alto buys Sulliden s Shahuindo Project Acquired Sulliden in March 2009 and resolved long-standing disputes regarding title. Technical and executive team successfully expanded the resource, delivered robust feasibility study and developed project to advanced stages of permitting Built outstanding reputation with investors over 5 years April 2010 Market Cap: $90M April 2014 Market Cap: $415M 14

15 Group at a Glance BASE AND PRECIOUS METALS GROUP BULK / SPECIALTY METALS GROUP Forbes & Manhattan AGRICULTURE GROUP ENERGY GROUP FINANCIAL & OTHER GROUP 15

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