F&M corporate presentation March 2014


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F&M corporate presentation March 2014

  1. 1. Miners, Operators, Builders …unlocking value in resource assets March 2014
  2. 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   Risk Mitigation Through Active Management F&M also have an unparalleled ability to raise capital for projects 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. 3. F&M Highlights Over the last 10 years, we have… Discovered more than 20M oz of gold to 43-101 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 43-101 compliant standards (and + 10 billion tonnes of iron ore)  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  Discovered under 43-101 or JORC compliant standards resources in silver, zinc, nickel, phosphate, vanadium, tungsten, lithium, and other commodities      3
  4. 4. Global Mining Footprint Canadian Royalties Coastal Gold Silver Bear Pitchblack Ram Coal Alderon Northern Sun Mining Black Iron Coastal Gold Mason Graphite Emerita Rodinia Savary Gold Allana Alder Resources Brazil Potash Belo Sun Aguia Sulliden Coastal Gold Crocodile Gold Aguia Arena Minerals Allana Forbes Coal Irati Kombat Copper Crocodile Gold Legacy Platinum Rodinia Forbes Offices Projects / Operations 4
  5. 5. F&M – A Unique Offering  Integrated Team Built on Technical and Operational Expertise and Accomplished Financial Markets Professionals F&M Stan Bharti Advisory Board Founder and Executive Chairman Technical Team  Over 50 engineers  Over 50 geologists  Expertise in all mining, energy and agriculture products Legal Team  11 (globally trained) full-time securities lawyers and support staff Financial Team  Over 30 people with expertise in – M&A – Investment banking – Corporate Finance & Corporate Development – Investor relations Admin / Accounting  Over 20 in house accounting and administration staff 5
  6. 6. F&M – Select Key Deals Consolidated Thompson Desert Sun Mining Avion Gold Black Iron Sold for USD 4.9 billion Sold for USD 750 million Sold for USD 400 million Mkt Cap – CAD 28 million 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 Acquired a controlling position in Desert Sun in 2002. Developed Jacobina mine to near production and sold 4 years later for $750m Originally acquired distressed assets in 2008 for $0.20 in the dollar. Sold to Endeavour Mining in 2012 for $400m (~89c) Iron ore exploration and development company - project in Ukraine. Recently signed development agreement with MetInvest 2011 2006 2012 Ongoing Sulliden Gold Alderon Iron Belo Sun Forbes Coal Mkt Cap – CAD 285 million Mkt Cap CAD – 200 million Mkt Cap – CAD 155 million Mkt Cap – CAD 8 million F&M acquired Sulliden in March 2009 and resolved long-standing disputes regarding title. Current resource of 3.4moz Au (Ag co prod) World class iron ore project in heart of Canada’s premier iron ore district. Major off take agreement secured within 2 years of acquiring the asset Exploration company with portfolio of assets in Brazil. Current mineral resource of almost 7.1moz F&M acquired control of two coal mines in South Africa . Locked in 3year off-take agreements with Glencore and Vitol before final acquisition payments were due Ongoing Ongoing Ongoing Ongoing 6
  7. 7. F&M – Outstanding Investment Returns  In the past 11 years, F&M has developed 28 portfolio companies  F&M has generated consistently high returns, achieved by investments and exits across Latin America, Africa, Australasia and North America Core Portfolio1 Number of Transactions F&M Invested Capital F&M including Co-investors 28 28 139 1,498 55 388 Realized Proceeds ($ millions) 235 1,910 Total Value ($ millions) 289 2,297 78.5% 181.3% 2.1x 1.5x 1.3 0.4 Capital Invested ($ millions) Unrealized Proceeds ($ millions) Gross IRR Multiple of Cost (overall) Weighted Average Holding Period, Years 1 Data is as of June 30, 2013 An Outstanding Track Record in Value Creation 7
  8. 8. Superior Capital Raising Capabilities No. of Transactions Capital Raisings for F&M Companies Largest Deal Jan 2011 – Jun 2011 $548m 19 $115m Jul 2011 – Dec 2011 $367m 12 $150m Jan 2012 – Jun 2012 $576m 26 $194m Jul 2012 – Dec 2012 $296m 8 $125m Jan 2013 – Jun 2013 $105m 11 $35m Jul 2013 – Dec 2013 $53m 7 $40m $1,945m 83 - Total 8
  9. 9. An Unrivalled Technical Platform and Skills Base – Ability to Execute Malcolm Campbell Over 20 years of coal experience rising to General Manager at Anglo American, South Africa's largest exporter of coal. An operational and turnaround expert, Malcolm successfully ran Anglo's 4 largest coal projects as General Mine Manager David Gower 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 Parviz Farsangi 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 Mike Hoffman With F&M Since 2004. 28 years of experience as mining engineer in senior executive positions at Crocodile Gold, Goldcorp Inc., Desert Sun Mining Corp., and Yamana Gold Inc. Don Dudek With F&M since 2007. 25 years experience in mineral exploration, recently Exploration Manager for Aur Resources where he was responsible for several economic gold and base metal discoveries in Canada and Latin America Rio Tinto IOC Tayfun Eldem Worked for Iron Ore Company of Canada for 20 years and held senior roles including Vice President, expansion projects and engineering and VP, Operations. Recently managed and executed a $2 billion expansion program for Rio Tinto Newmont Mining Peter MacLean 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 Rio Tinto IOC Matt Simpson Formerly served as Rio Tinto Iron Ore Mine General Manager in Canada for 8 years. He had progressive roles in business evaluation, operations planning, continuous improvement. He has extensive experience in mine design & project management Vale Jose Fanton 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 Xstrata Helio Deniz 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 Anglo American Falconbridge Vale Goldcorp Aur Resources Extensive Global Expertise In-house 9
  10. 10. International Advisory Board Peter Boot, South America 25 years in finance; experience in Brazil, Curacao, Venezuela, Paraguay & Bolivia Marquess of Reading Lord Reading has previously served as Member of the House of Lords for 19 years 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 10
  11. 11. 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 Case Study: Sulliden Gold • Gold, target 3 moz or greater, with preference for higher grade and polymetallic systems • Will consider lower tonnages on exceptional ‘direct ship’ ore • Potash, target 500 MT minimum size potash basins, e.g. Brazil and Ethiopia F&M acquired control with resource of 1.5 moz gold, but identified greater exploration potential • Today the deposit has a resource of 3.4 moz gold, with by-product silver identified also • Currently advancing to production, while still growing the resource through drilling Iron ore, target 500 MT – 1 billion tons+ depending on logistics and infrastructure • • Geological / Exploration Risk is Minimized 11
  12. 12. 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 Case Study: Allana Potash  Work in concert with the local governments as a long term partner • F&M purchased two potash projects in Ethiopia and Argentina  Liaising with our partners MIGA and the World Bank who have successfully provided Political Risk Insurance for over $17 bn of emerging markets investments • 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 1.269 billion tonnes • Working towards production in late 2014 12
  13. 13. 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 13
  14. 14. Investment Criteria 4. Ability to Transform Assets  F&M provides management, capital and direction to move resource assets up the value chain • • Feasibility study • Permitting/environmental • Financing • Construction •  Resource delineation and expansion 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 14
  15. 15. 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 • Case Study: A Year that Yamana Gold bought Desert Sun • Acquired formerly producing gold mine in Brazil for $5 mm in a public shell company (RTO) in 2002 • Technical and executive team successfully expanded the resource sevenfold and restarted production to 100k oz • Built outstanding reputation with investors over 3 years • Bought by Yamana Gold for $750 mm 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 15
  17. 17. www.forbesmanhattan.com