Goal: To Build the Best Gold Company MAY 2017 NEW YORK INVESTOR PRESENTATION

Transcription

1 Goal: To Build the Best Gold Company MAY 2017 NEW YORK INVESTOR PRESENTATION

2 Disclaimer Non-Commercial Individual Reference Use Only The entire contents of this presentation are protected by copyright and may be used and copied for non-commercial, individual reference only. Any other use of the contents of this presentation is prohibited unless the user first obtains the Company s written permission. No Offer to Purchase Securities The information in this presentation is intended for use only by persons resident in jurisdictions where such use is lawful. Nothing on this presentation constitutes, and under no circumstances is to be construed as, an offer or solicitation to purchase securities of, or advertisement for, securities of the Company. The securities of the Company have not been registered under the United States Securities Act of 1933, as amended or any state securities laws. No Warranties The information in this presentation is provided as is and without warranty of any kind. Although it is believed to be accurate as of this date, the Company disclaims all liability for any failure to update it. This presentation could include inaccuracies, typographical errors, or out-of-date information, and changes to it may be made at any time without prior notice. You are therefore advised to use this presentation at your own risk. Forward Looking Statements Certain statements contained in this presentation (including information incorporated by reference) are "forward looking statements". Our forward-looking statements include, without limitation: The sensitivity of earnings, cash flows and financing to gold and other metal prices; Statements as to the projected exploration and development of certain properties, including estimates of development and other capital costs and financing plans for these projects; Estimates of future production costs and other expenses; Estimates of future capital expenditures and other cash needs, and expectations as to the funding thereof; Estimates of future costs and other liabilities for environmental matters; Estimates of reserves, and statements regarding future exploration results and reserve replacement; Statements regarding future transactions relating to portfolio management or rationalization efforts; and Estimates regarding timing of future capital expenditures and exploration, development, production or closure activities. This list is not exhaustive of the factors that may affect our business, our value as a company, and our forward looking statements. Where we express an expectation or belief as to future events or results, such expectation or belief is expressed in good faith and believed to have a reasonable basis. However, our forwardlooking statements are subject to risks, uncertainties, and other factors, which could cause actual results to differ materially from future results expressed, projected or implied by those forward-looking statements. Such risks include, but are not limited to: the price of gold; currency fluctuations; geological and metallurgical assumptions; the results of exploration; operating performance of equipment, processes and facilities; labor relations; timing of receipt of necessary governmental permits or approvals; domestic and foreign laws or regulations, particularly relating to the environment and mining; domestic and international economic and political conditions; the ability of the Company to obtain or maintain necessary financing; and other risks and hazards associated with mining exploration, development and operations. Given these uncertainties, readers are cautioned not to place undue reliance on our forward-looking statements. All subsequent written and oral forward-looking statements attributable to the Company or to persons acting on its behalf are expressly qualified in their entirety by these cautionary statements. Use of Information Any information communicated to the Company through this presentation becomes the Company s exclusive property. the Company shall be entitled to use any such information for any purpose without restriction or compensation to any person. Such information provided by the user shall be deemed to be non-confidential. Technical Information Unless otherwise indicated, the technical information presented herein has been reviewed by the Company s Chairman, Glenn J. Mullan, P.Geo, a qualified person in accordance with National instrument Standards for Disclosure for Mineral Projects. 2

3 Investment Highlights $105 MM Market Capitalization $43.6 MM Securities/Cash* NO DEBT 23 Royalties 3% NSR Odyssey North (CDN Malartic) Generating Cash Flow 11.3 MM Shares Buying Back Shares *As of May 12,

4 To Build The Best Gold Company Corporate Philosophy Structure: Small Number of Shares Not Just About Size Value: Meaningful Cash Flow per Share Gold: Keep on Balance Sheet. Continue to grow Buybacks: Share Count not Exploration: Exposure to exciting discovery Growth: Through Cash Flow/Creative Alternatives 4

5 Share Performance Present CAGR 167% $12 $10 $8 $6 $4 $2 $

6 To Become The Best Gold Company RZZ vs. Royalty Co. Jan 1, 2014 Current 2016 YTD Abitibi Royalties 2540% Abitibi Royalties 161% Royal Gold 26% Franco-Nevada 123% Royal Gold 67% Franco-Nevada 20% Royal Gold 117% Silver Wheaton 51% Osisko Gold Royalties 14% Silver Wheaton 32% Sandstorm 46% Silver Wheaton 9% Gold Spot 31% Franco-Nevada 27% Gold Spot 9% Sandstorm 8% Altius 25% Abitibi Royalties 6% Osisko Gold Royalties (1%) Gold Spot 5% Sandstorm (6%) Altius (11%) Osisko Gold Royalties(4%) Altius (14%) *As of May 12, All performances shown in Canadian Dollars. 6

7 To Become The Best Gold Company RZZ vs. Small Gold Producers Jan 1, 2014 Current 2016 YTD Abitibi Royalties 2540% McEwen Mining 171% Wesdome Gold 64% Richmont 821% Abitibi Royalties 161% Timmins Gold 49% Wesdome Gold 490% Timmins Gold 129% Kirkland Lake 36% Kirkland Lake 273% Klondex 121% Richmont 13% Klondex 184% Richmont 96% Abitibi Royalties 6% McEwen Mining 92% Argonaut 78% McEwen Mining 2% Timmins Gold(45%) Wesdome Gold 65% Argonaut 0% Argonaut(60%) Kirkland Lake 45% Klondex(27%) *As of May 12, All performances shown in Canadian Dollars. 7

8 #1 Building Wealth for Our Owners Small Share Count: 11,286,143 About Per Share Value Authorized Buyback: 516,612* Repurchased: 129,600/Avg. Cost $5.62** GOAL: REDUCE SHARE COUNT TO 10 MILLION OVER 3 YEARS *Authorized buyback remaining between Oct. 6, 2016 Oct. 5, 2017 **As of March 31, 2017, and repurchased under the Oct. 6, 2015 Oct. 5, 2016 and Oct. 6, 2016 Oct NCIB 8

9 #2 Reoccurring & Growing Cash Flow 2017 Estimated CF: $ million Cash Flow 2017 Estimated CF/Share: $ Estimated CF: $ million (Excludes Odyssey and Near Pit Targets) 2019 Estimated CF: $ million (Excludes Odyssey and Near Pit Targets) *Cash flow estimate for 2017 is based on dividend payouts by Agnico Eagle and Yamana Gold, premiums being generated from the sale of covered calls on shares owned by the Company, puts to repurchase Agnico Eagle share and other investment income. There is no guarantee that the Company will sell the required number of covered calls or puts to meet this estimate. Cash flow estimates for 2018 and 2019 are based on Canadian gold price of $1625/oz. and royalty production schedule (see press release dated March 10, 2017 forfurtherdetails), in addition to premiumsgenerated from covered calls and puts. 9

10 #3 Strong Balance Sheet Cash $8.2 M Yamana Shares $13.2 M* $43.6 Million Agnico Eagle Shares $22.3 M* *As of May 12,

11 #3 Strong Balance Sheet 11

12 #4 Unique Ownership Structure Board / Management (CEO uses all of after-tax salary for share purchases) Richardson GMP Clients 4% 5% Other Shareholders 25% Golden Valley 49% Quebec Labour Funds 5% Rob McEwen (Doubled Investment June 2, 2016 to Cdn$4.3 million) 12% 12

13 #5 Exposure to Significant Discoveries Canadian Malartic Mine Exploration The Value Driver! 1. Odyssey Project Inferred 1,039, gpt 2. New Internal Zones Significant Drill Intercepts 3. East Malartic Mine (Norrie Zone) New Area of Focus 13

14 Odyssey New Discovery Canadian Malartic Mine US$11M Exploration Budget at Malartic = 99,700 m Drilling (2017) 14

15 Near Pit Targets Potential Sources of Near-term Cash Flow ( ) 15

16 Canadian Malartic Mine (Long-Section) Bulk Tonnage Underground Mining Next Evolution *Norrie Zone: Osisko Mining drill hole; remaining are historic holes 16

17 Odyssey North Significant Discovery at Canada s Largest Gold Mine The inferred mineral resource does not include drill results from internal zones that extend from the Odyssey North Zone. Drilling carried out to date suggests that these internal zones could increase mineral resources and enhance the economics of the project by adding higher grade ounces that would require minimal additional infrastructure to access. Agnico Eagle Q Results News Release (Feb. 15, 2017) Yamana indicated that Odyssey could operate between 8,000-10,000 tonnes per day (tpd). The operators have provided a range for Odyssey North s gold grade at between 1.5 to 3.0 grams per tonne (gpt), with an average grade being shown as 2 gpt (Agnico Eagle Exploration News Release July 27, 2016 and Yamana s Q Results Conference Call Presentation July 29, 2016). Abitibi Royalties News Release (Oct. 31, 2016) There are no assurances that all or any of the recent expansion or internal zone at Odyssey North has occurred on Malartic CHL where Abitibi Royalties holds a 3% NSR. 17

18 Gold Royalty Ranking (Net Asset Value CDN$) Abitibi Royalties Positioned For Organic Growth Abitibi Royalties 3% NSR Adjoins Osisko Royalties 5% NSR at Canadian Malartic Source: BMO Capital Markets Equity Research. NPV shown using a 5% discount rate and BMO commodity pricing for gold of US$1,292/oz for 2016, US$1,350/oz for 2017, US$1,250/oz for 2018 and US$1,200/oz for 2019 and LT CDN/US Exchange rate used. 18

19 Royalty Company Valuations Potential for Re-rating as Odyssey North Advances Source: Scotiabank May 9,

20 PAYING CLAIM FEES IN EXCHANGE FOR ROYALTIES #6 Innovation = Organic Growth 20

21 Red Lake and Madsen Properties Madsen Mine and Red Lake Mine - 1% NSR 21

22 2 KM West New Gold Rainy River Mine - 2% NSR / 15% Sale Proceeds 22

23 Surrounding Eldorado Efemcukuru Mine - 3% NSR Drilling Planned 23

24 3 KM East Metanor Bachelor Mine - 2% NSR/15% Sale Proceeds 24

25 12 KM North Alamos Gold Young-Davidson - 2% NSR Selective Rock Samples gpt gold 8.00 gpt gold gpt gold gpt gold gpt gold 25

26 5 KM Southeast Agnico Eagle/Yamana Canadian Malartic - 2% NSR / 15% Sale Proceeds 26

27 5 KM Southwest Hudbay 777 Mine - 3% NSR / 15% Sale Proceeds 27