CORPORATE PRESENTATION

Transcription

1 CORPORATE PRESENTATION

2 Disclaimer, Forward-looking Statements and Technical QP DISCLAIMER Certain information contained herein, other than information relating to Sailfish Royalty Corp. ( Sailfish or the Corporation ), while obtained from sources which we believe are reliable, is not guaranteed as to its accuracy or completeness. The contents of this presentation is for information purposes only and does not constitute an offer to sell or a solicitation to purchase any securities referred to herein. FORWARD-LOOKING STATEMENTS This presentation contains forward-looking information and forward-looking statements within the meaning of applicable Canadian securities laws. These forward-looking statements may include statements regarding perceived merit of properties and related streams/royalties, financial projections and results, capital expenditures, exploration results, mineral resource estimates, production estimates and similar statements relating to the economic viability of projects and related streams/royalties, timelines, and strategic plans, including: our plans and expectations relating to a strategic relationship with Marlin Gold Mining Ltd. ( Marlin ), the potential future transfer of royalties and other property interests from Marlin to Sailfish, the percentage, if any, of Sailfish s cash flow that will be paid out to shareholders, anticipated average after-tax cash flows, the anticipated timing of production at the mineral properties over which Sailfish has streams and royalties, or other statements that are not statements of fact. These statements relate to analyses and other information that are based on forecasts of future results, estimates of amounts not yet determinable and assumptions of management. Forward-looking statements and forward-looking information are not guarantees of future performance and are based upon a number of estimates and assumptions of management at the date the statements are made including without limitation, assumptions about: future prices of gold and other metals, performance of contractual obligations by counterparties, financial viability of third party owners and operators, financial projections and budgets, stability in market conditions, accuracy of any mineral resources, anticipated costs and expenditures and our ability to achieve the Corporation s goals. While we consider these assumptions to be reasonable, the assumptions are inherently subject to significant business, social, economic, political, regulatory, competitive and other risks and uncertainties, contingencies and other factors that could cause actual performance, achievements, actions, events, results or conditions to be materially different from those projected in the forward-looking statements and forward-looking information. Many assumptions are based on factors and events that are not within the control of Sailfish and there is no assurance they will prove to be correct. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, identified by words or phrases such as expects, is expected, anticipates, believes, plans, projects, estimates, assumes, intends, strategy, goals, objectives, potential, possible or variations thereof or stating that certain actions, events, conditions or results may, could, would, should, might or will be taken, occur or be achieved, or the negative of any of these terms and similar expressions) are not statements of historical fact and may be forward-looking statements. Forward-looking statements are subject to a variety of known and unknown risks, uncertainties and other factors that could cause actual events or results to differ from those reflected in the forward-looking statements, including, without limitation: that Sailfish will not establish a strategic relationship with Marlin, the timing, if at all, and terms of any transfer of the royalties on the El Compas and La Cigarra royalties to Sailfish, risks relating to the Marlin credit facility, risks related to Sailfish s investment policy, Sailfish s determination of a dividend policy, the significant influence of major shareholders, Sailfish s lack of control over the mining operations in which it holds only royalty or stream interests, Sailfish s dependence on the payment and delivery of royalties by the owners/operators of properties, the potential divergence of interests between Sailfish and third party owners/operators in respect of a relevant project, Sailfish s dependency on the financial viability and operational effectiveness of third party owners and operators, Sailfish s reliance on third party reporting and potentially limited access to data, the concentration of Sailfish s royalty and streaming interests, changes or disruptions in the securities markets, the non-performance of contractual obligations by counterparties, fluctuation in the price of gold and base metals and future commodity prices, price volatility of Sailfish s securities, financial projections and results, risks from the need for additional capital and the Corporation s ability to raise additional funds, currency exchange rates, competition for royalty and streaming interests, adequacy of financial resources, conflicts of interest, the introduction of new taxes or changes in tax laws and interpretations, Sailfish may be a passive foreign investment company under applicable US income tax rules, the properties on which Sailfish holds royalty and other interests will be subject to exploration, development and mining risks (including, among others, the speculative nature of mineral exploration and development, risks relating to mining operations and development, the results of current exploration, development and mining activities, changes in project parameters, land title issues and risks, local community issues, uncertainty in estimates of mineral resources, conclusions of economic evaluations, the timing and amount of estimated future production, quality and marketability of mineral product, limited lives of mines, reclamation obligations, the costs of production, capital expenditures, mining or processing issues, government regulation of mining operations, environmental risks, risks relating to safety of personnel and property, risk relating to infrastructure, permitting and licenses, foreign operations, litigation, foreign mining tax regimes, insurance and uninsured risks, limited historical production or revenues therefrom, dependence on key personnel, and other risks of the mining industry), and those factors disclosed under the heading Risk Factors in the Corporation s documents filed from time to time with the securities regulators in the provinces of Canada. This list is not exhaustive of the factors that may affect any of our forward-looking statements. Forward-looking statements are statements about the future and are inherently uncertain, and our actual achievements or other future events or conditions may differ materially from those reflected in the forward-looking statements. Should one or more of these risks and uncertainties materialize, or should underlying assumptions prove incorrect, actual results, performance or achievements of the Corporation, or industry results, may vary materially from those described in this presentation. In addition, a number of other factors could cause the actual results, performance or achievements of the Corporation to differ materially from any future results, performance or achievements expressed or implied by the forward-looking information, and there is no assurance that the actual results, performance or achievements of the Corporation will be consistent with them. For further details, reference is made to the risk factors discussed or referred to in the Corporation s annual and interim management s discussion and analyses on file with the Canadian securities regulatory authorities and available electronically on the SEDAR website at QUALIFIED PERSONS Joe Hinzer, P.Geo., the President and Director of Watts, Griffis and McOuat Limited is independent of Sailfish and a Qualified Person under NI has reviewed and approved the written scientific and technical disclosure contained in this presentation. 2

3 Investment Highlights A new royalty company in partnership with proven operators Royalty companies have been superior investments when compared to publicly traded precious metals mining companies Sailfish is an opportunity to get in on the ground floor of the latest royalty company Sailfish intends to pay out up to 90% of the cash flow it receives in the form of dividends to its shareholders Sailfish was spun-out from Marlin Gold Mining Ltd. ( Marlin ) and is backed by a well-funded investor that has previously created a leading energy royalty company (Viper Energy Partners) Initial growth is expected from the acquisition of streams/royalties from Marlin s royalty portfolio and wholly owned mines/projects Low G&A CEO and VP Corporate Development presently compensated 100% with equity 3

4 Capital Structure Sailfish is backed by a well-funded investor with a successful track record in the resources sector Ownership (Fully Diluted) TSX-V listing Price (1) FISH C$ % High Low (52 weeks) Shares outstanding Options Market capitalization (1) (2) US$63.0 Cash (1) (2) US$0.25 Debt (3) C$3.07 C$ million 1.2 million million million None 4% 10% Website 74% Options Amount Price Expiry Share purchase options 1,200,000 TBD (4) 5-Feb As of the market close on February 23, Assumes a 1.25:1 CAD to USD exchange rate. Wexford Capital LP Management & Directors TZ Royalty Vendors (5) 3. There is an undrawn US$14 million credit line made available by Marlin to fund the remaining commitment (US$13.9 million) on the SA Gold Stream. Detailed terms are provided in the November 15, 2017 Information Circular for Marlin Gold Mining Ltd. available on the Sailfish website at 4. The exercise price of the outstanding options will be determined based on a formula that includes the VWAP of the Sailfish shares on the TSX-V for the 10 trading days immediately following the effective date of the Arrangement with Marlin. Detailed terms are provided in the November 15, 2017 Information Circular for Marlin Gold Mining Ltd. available on the Sailfish website at 5. Each vendor of the royalty on the Tocantinzinho project currently operated by Eldorado Gold Corp. (the TZ Royalty ) individually owns <10% of the issued and outstanding shares of Sailfish. 4

5 Portfolio Overview Existing portfolio includes a gold stream and royalty on advanced stage projects in the Americas San Albino Gold Stream ( SA Gold Stream ) US$15 million funding commitment (US$13.9 million remaining) entitles Sailfish to a 20-40% gold stream at US$700/oz. (1) San Albino PEA indicates a high grade, low capex operation with low AISC (2) Permit to construct and operate (up to 500tpd) received September 2017 Tocantinzinho Royalty ( TZ Royalty ) 3.5% NSR royalty (operator has the right to reduce to a 1.5% NSR) Open pit gold project located in the prolific Tapajos district of northern Brazil Expected production of 170,000 oz. gold over 10 years (3) 1. Prior to commercial production, an 8% semi-annual coupon payment on amount funded is due to Sailfish. The SA Gold Stream provides Sailfish with the right to purchase 40% of gold US$700/oz. until the first US$19.6 million in payments are received by Sailfish, and thereafter the stream reduces to 20% of US$700/oz. plus 50% of the spot gold price above US$1,200/oz. The price per ounce payable is subject to a 1% per year cost escalation beginning three years from commercial production. The remaining commitment is expected to be funded through a US$14 million credit line with Marlin. Detailed terms are provided in the November 15, 2017 Information Circular for Marlin Gold Mining Ltd. available on the Sailfish website at 2. Please refer to the definition of San Albino PEA on slide 9 of this presentation. 3. Information provided by Eldorado Gold Corp. please refer to September 2016 Analyst Day Presentation. For further information on Tocantinzinho, including the September 2016 Analyst Day Presentation, please visit 5

6 A Focus on the Americas Ability to invest globally, with a focus on the Americas Marlin & Sailfish Asset Portfolios COMMONWEALTH ARIZONA, USA (MARLIN) Silver and gold project LA TRINIDAD SINALOA, MEXICO (MARLIN) Producing heap leach gold mine GAVILANES DURANGO, MEXICO (MARLIN) Early stage silver project LA CIGARRA CHIHUAHUA, MEXICO (MARLIN) NSR on silver project EL COMPAS ZACATECAS, MEXICO (MARLIN) NSR on permitted gold and silver project SAN ALBINO NUEVA SEGOVIA, NICARAGUA (SAILFISH) Gold Stream on permitted gold project TOCANTINZINHO PARA STATE, BRAZIL (SAILFISH) NSR on advanced stage gold project Marlin mine, project or royalty Sailfish stream/royalty 6

7 Royalty Companies Are Gold Investments That Work Equal weighted royalty portfolio (FNV, WPM, RGLD, SSL) (1) Gold (GLD) Gold equities (GDX) Source: Bloomberg /31/ /31/ /31/ /31/ /31/ /31/ /31/ /31/ /31/ /31/ /31/ These four companies were selected as they were the largest precious metals royalty companies by market capitalization at the inception point of this chart. 7

8 Straightforward Business Model In exchange for an upfront payment: STREAMS ROYALTIES Sailfish receives the right to purchase a portion of the gold and/or silver produced from a mine at a fixed price Sailfish receives a portion of the revenue generated from a mine VALUE Sailfish sells the metal at spot ~90% of cash flow is expected to be distributed to shareholders 8

9 US$ millions Sailfish Conceptual Cash Flow Assuming US$1,250/oz. Au ( tpd Mill SA Gold Stream) $10.0 $9.0 $9.5 TZ Royalty (1) SA Gold Stream - 250tpd (2) SA Gold Stream - 500tpd (2) (3) $8.0 $7.0 $6.0 $6.9 $5.5 $7.2 $7.6 $6.4 $6.0 $7.1 $5.8 $5.8 $5.0 $4.0 $3.0 $2.0 $1.0 $ Potential average annual after-tax cash flow of ~US$5.2 to ~US$6.8 million through 2028 (4) SA Gold Stream Note: The conceptual cash flow above is based on estimates provided by the operator of the SA Gold Stream, Golden Reign Resources Ltd., which is guiding for commercial production in Q The chart above only shows the first 10 out of 31 years and 16 years under the 250tpd and 500tpd mill scenarios, respectively, of the SA Gold Stream. 1. Based on information provided by Eldorado Gold Corp. please refer to the September 2016 Analyst Day Presentation. For further information on Tocantinzinho, including the September 2016 Analyst Day Presentation, please visit The calculation of average annual after-tax cash flow per year of ~US$2.3 million to Sailfish assumes a US$1,250/oz. gold price, average annual production of ~170,000 oz. gold, 1.5% NSR (post exercise of Eldorado s Buy-back Right) and a 25% Brazilian withholding tax. 2. SA Gold Stream conceptual cash flow is based on information provided by Golden Reign Resources Ltd. in its technical report titled Resource Estimate and Preliminary Economic Assessment on the San Albino Deposit, San Albino Murra Concession, and El Jicaro Concession, Republic of Nicaragua effective January 14, 2015 and dated April 29, 2015 (the San Albino PEA ). The San Albino PEA is preliminary in nature, it includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the PEA will be realized. For more information on San Albino, please visit and the October 2017 corporate presentation. The average annual conceptual after-tax cash flow ranges from ~US$2.6 to ~US$4.9 million for the SA Gold Stream for 250tpd and 500tpd mill scenarios, respectively and assumes a US$1,250/oz. gold price and no income tax in the British Virgin Islands. The total mine life assuming a 250tpd mill is 31 years and 16 years for a 500tpd mill as outlined in the San Albino PEA Represents the incremental cash flow of the 500tpd scenario over the 250tpd scenario.

10 Targeted Investing Within the Mining Life Cycle Investments in development and producing assets expected to generate sustainable risk-adjusted returns EXPLORATION DEVELOPMENT MINING CONCEPT PRE-DISCOVERY DISCOVERY FEASIBILITY & ENGINEERING CONSTRUCTION STARTUP DEPLETION 10

11 ASSET PROFILE San Albino 20-40% gold stream on a high grade, permitted project LOCATION Nueva Segovia, Nicaragua STATUS In advanced development (permits received in September 2017) (2) OPERATOR Golden Reign Resources Ltd. MINE TYPE Open pit gold mine, followed by underground AVERAGE ANNUAL PRODUCTION ( TPD) 21,785-41,300 oz. AuEq (3) STREAM PERCENTAGE 40% until US$19.6 million is paid back, 20% thereafter (4) TERM 40 years SITE CONSTRUCTION ACTIVITIES PLANNED (1) Q Commence detailed engineering Q1-Q San Albino construction Q Commission plant and first gold pour Q Commercial production UPFRONT PAYMENT US$15 million (5) ONGOING PAYMENTS US$700/oz. (6) EXPECTED AVERAGE ANNUAL AFTER-TAX CASH US$1,250/OZ Au ( TPD) ~US$2.6 to ~US$4.9 million (7) 1. Based on information provided on the Golden Reign Resources Ltd. corporate presentation, 2. Permit to construct and operate (up to 500tpd) received September See Golden Reign Resources Ltd. press release dated September 12, Refer to San Albino PEA. Based on the 250tpd and 500tpd mill scenarios. 4. A minimum monthly payment of US$282,800 is required once the mine is in production. 5. Approximately US$1.1 million funded to date. Amount funded earns interest at a rate of 8% per annum. 6. Plus 50% of the spot gold price above US$1,200/oz. The price per ounce payable is subject to a 1% per year cost escalation beginning three years from commercial production. 7. Please refer to the footnote (1) on slide 9 for more details on cash flow estimations. 11

12 ASSET PROFILE Tocantinzinho 3.5% NSR on an advanced stage gold project LOCATION Tapajos District, Para State, Brazil STATUS Advanced development OPERATOR Eldorado Gold Corp. MINE TYPE Open pit / flotation CIP AVERAGE ANNUAL PRODUCTION ~170,000 oz. Au (1) ROYALTY PERCENTAGE 3.5% NSR, which the operator has the right to reduce to a 1.5% NSR TERM Life of mine HISTORY AND PRODUCTION TIMELINE (1) 2010 Eldorado acquired Tocantinzinho 2012 Approval of preliminary EIA UPFRONT PAYMENT Not applicable ONGOING PAYMENTS Not applicable EXPECTED AVERAGE ANNUAL AFTER-TAX CASH US$1,250/OZ Au ~US$2.3 million (2) 2015 Positive feasibility study 2019 Planned production 1. Based on information provided by Eldorado Gold Corp. please refer to the September 2016 Analyst Day Presentation. For further information on Tocantinzinho, including the September 2016 Analyst Day Presentation, please visit 2. Please refer to the footnote (2) on slide 9 for more details on cash flow estimations. 12

13 APPENDIX

14 P/CF Royalty Company Comparable Analysis Consensus Royalty Price-to-Cash-Flow 2019E Valuation (1) 30.0x 25.0x 20.0x 15.0x 10.0x 24.9x 16.9x 16.6x 15.9x 15.3x 15.2x 13.8x 5.0x 9.1x 0.0x FNV OR RGLD SSL WPM ALS MMX FISH (2) 1. Sources: Red Cloud Klondike Strike Inc., Thomson Reuters, Capital IQ and recent company reports. Price data as of January 9, Based on the 2019 conceptual potential cash flow at Sailfish per slide 9 of this presentation. 14

15 San Albino PEA Highlights In millions of USD, unless otherwise noted. US$1,250/oz. gold price 500 tpd 350 tpd 250 tpd Average mined diluted grade (AuEq) 8.02g/t 8.02g/t 8.02g/t After-tax NPV 5% discount $174.6 $144.4 $105.8 After-tax IRR (%) 54.3% 46.5% 37.5% Payback (years) 1.7 years 1.8 years 2.2 years Initial capital expenditures (with 20% contingency) $21.1 $17.0 $13.9 All-in sustaining costs AuEq (US$/oz) $391 $418 $464 Cash costs AuEq (US$/oz) $355 $383 $424 Average annual gold payable production AuEq (oz) 42,300 30,800 21,800 Average annual after-tax free cash flow $19.4 $13.8 $9.4 Life of mine 16 years 22 years 31 years 1. Information provided by Golden Reign Resources Ltd. in its technical report titled Resource Estimate and Preliminary Economic Assessment on the San Albino Deposit, San Albino Murra Concession, and El Jicaro Concession, Republic of Nicaragua effective January 14, 2014 and dated April 29, 2015 (the San Albino PEA ). The San Albino PEA is preliminary in nature, it includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the PEA will be realized. For more information on San Albino, please visit 15

16 Tocantinzinho Project Highlights 1. Based on information provided by Eldorado Gold Corp. please refer to the September 2016 Analyst Day Presentation. For further information on Tocantinzinho, including the September 2016 Analyst Day Presentation, please visit 16

17 Management Team Inline with the strategy of keeping G&A to a minimum, Sailfish is run by an experienced team of only three individuals Akiba Leisman CEO Akiba Leisman is also a consultant for Wexford Capital LP, where he oversees the precious metal public and private equity portfolios, including the investment in Marlin Gold Mining Ltd. Prior to consulting for Wexford, he was a Senior Analyst at Red Kite Capital Management for the Mine Finance funds where he was responsible for senior secured investments on metal mining assets. Previously, he was an Associate at Standard Bank working in the Structured Commodity Products and Mine Finance groups. Mr. Leisman has an MBA from New York University, and a B.S. in Chemical Engineering from Carnegie Mellon University. Cesar Gonzalez DIRECTOR AND VP CORPORATE DEVELOPMENT Cesar Gonzalez is also a consultant at Wexford Capital LP. At Wexford he is focused on co-managing the precious metal public and private equity portfolios, including the investment in Marlin Gold Mining Ltd. Previously he worked at Lehman Brothers as an Associate in the Private Equity Group where he focused on investments in energy master limited partnerships. Mr. Gonzalez graduated from the University of Southern California, where he earned a B.S. in Business Administration. Peter Van Zoost CHIEF FINANCIAL OFFICER Peter Van Zoost resides in Tortola, British Virgin Islands and graduated from St. Francis Xavier University, Canada as the Gold Medalist with a Bachelor of Business Administration degree. Peter has thousands of hours of public accounting and financial statement preparation experience under both US GAAP and IFRS for various complex fund structures. 17

18 THANK YOU!