Discovery Exploration Boom

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1 Discovery Exploration Boom Presented by John Kaiser 2017 Metals Investor Forum May 5, 2017 Vancouver, Canada

2 The Four Core Resource Sector Narratives where are we? Commodity Cycle Gold Bug Security of Supply Discovery Exploration Infrastructure rally stalled, gold rally lame, no geopolitical chaos yet, discovery expl on the rise


4 Zinc has the best fundamentals for a bull cycle

5 Security of Supply Narratives Geopolitical supply disruptions Policy Demand Drivers Process Innovation Transportation supply disruptions Policy Supply Disrupters Functionality innovation Deposit depletion Usage Innovation Fashion Trends This will be the new conceptual frontier for institutional capital! al!

6 Cobalt has demand growth & supply disruption potential

7 If you are conservative and do not want to bet on a higher metal price or a new discovery, but will bet on people getting it right, scandium is your opportunity.

8 Most people didn t get it. But then most are not as smart as these folks.

9 New South Wales: Getting it right!

10 Gold s dramatic rise since 2001 was an over- shoot in catching up from $400 in 1980 to its inflation-adjusted adjusted price of $1,204 in 2017, a wash in real price terms. Today the optionality bet is a longshot.

11 No Republican presidency has ever failed to increase the federal debt by a greater amount than any predecessor. Has the Freedom Caucus truly caged the man who would make America great again?

12 Last year s resource junior rally tracked the gold uptrend and stopped dead in mid August when gold reversed. The market has tired of the tyranny of the gold price trend.

13 Five juniors raised $100 million from Bay Street in February for what has been the most hopeless gold district in eastern Canada. What is going on?

14 A 2014 PEA indicated that 1.6 million oz of 8 g/t gold were not worth developing at $1,200 gold. That was before Osisko undertook a big rethink. 400,000 m drilling underway to prove that the sad old Windfall district is in fact a 20 million oz Timmins district in disguise. This is a sea change.

15 During March 2017 TSXV resource sector listings raised $739 million, the highest since June This was mostly not for optionality plays which trade mainly on the TSX.

16 $200,000,000 $180,000,000 $160,000,000 $140,000,000 $120,000,000 $100,000,000 $80,000,000 $60,000,000 $40,000,000 $20,000,000 $0 TSXV Resource Financing March 2017 Leagold Mining Corp Trek Mining Inc Rathdowney Resources Ltd Itafos Nighthawk Gold Corp Neo Lithium Corp Goldquest Mining Corp Ascendant Resources Inc Advantage Lithium Corp Golden Predator Mining Corp IDM Mining Ltd Lithium X Energy Corp Probe Metals Inc Torq Resources Inc K92 Mining Inc White Gold Corp Aurion Resources Ltd Los Andes Copper Ltd Prospector Resources Corp Algold Resources Ltd Red Pine Exploration Inc Triumph Gold Corp Beaufield Resources Inc First Cobalt Corp Millennial Lithium Corp East Africa Metals Inc Volcanic Gold Mines Inc Focus Ventures Ltd Juniors $1-$5 million (35) Juniors less than $1 million (51) Total Raised (112): $739 million $5 million plus (28-25%): $646 million (87%) $1-$5 million (34-30%): $71 million (10%) < $1 million (50-45%): $22 million (3%)

17 About half the TSXV resource juniors have about $2 billion in working capital. The other half owe about $1.6 billion. We are in the second year of a discovery exploration cycle that will run for 4-5 years. The cycle will start to go exponential in Q4 of The life-style zombies won t lurch back until 2019.

18 Elements of a good exploration story in the new reality Does the region have a substantial metal endowment? If not, what reason is there to believe in a hidden endowment? If so, is there a reason to believe it has not been largely found? How is your exploration strategy different from what others have already attempted? Are you applying a new exploration method or a model for whose hallmarks past exploration has not filtered? What is the potential size of the prize you are seeking? Do you know what failure of your exploration story would look like? How much money and time will you need to make or break your story? Would a discovery have replication implications? Focus not on when and why metal prices will be higher, but rather r on whether the junior can discover a deposit worth developing at the prices we have!





23 Better to have 100% of a very good project than 15%-25% in each of ten non-keeper farmed out projects because only one will deliver a big discovery if lucky.

24 What if Eskay II is found on 100% owned Corey ground?

25 The producers are no longer buying up optionality gold plays. They are outsourcing discovery exploration to juniors with talented ted technical teams who are doing something different with district scale projects by taking up to 19.9% equity stakes with rights to maintain that ownership threshold in future financings. This approach is very different from the prospect generator farmout model.

26 Discovery Exploration: an alternative to optionality gambling Exploring for deposits that are economic at the metal prices we have. 1) grassroots exploration 2) applying new exploration methods 3) rethinking existing systems 4) prospect generator farmout model

27 The Share Collective I am currently involved in a startup that is developing an online version of the Outcome Visualization Platform called the Share Collective. Beta testing has begun. Anybody interested in becoming a beta tester should contact me. A commercial release is planned for H2 of Geologists Engineers IR Representatives Students Fund Managers Retail Investors Company Executives Journalists Financial Professionals Regulators Traders Gamers Teachers Academics Government Lawyers Anybody who gets how cool this will be No public identity and credentials allowed!

28 on Twitter to get alerts when a Discovery Watch episode is posted

29 Kaiser Research Online Rheem Blvd #107, Moraga, CA, 94556, USA Skype: KaiserResearch Tel: (925) When members of a crowd with a conflict of interest and the goal of influencing the market and each other connect the dots and share the result in an untrusted, competitive environment, what is the collective result?