Morien Resources Corp. · TSXV:MOX
Morien Resources — Corporate Update (July 2019)
35 slides from Morien Resources's corporate update, July 2019
Slide 1: Corporate Update Q3 2019
TSX-V MOX Corporate Update Q3 2019
Slide 2: Forward Looking Statements
Forward Looking Statements Some of the statements made by Morien Resources Corp. (“Morien”) in this presentation may constitute "forward-looking information" as defined under applicable securities laws. These statements reflect Morien's current expectations of future revenues and business prospects
Slide 3: MOX Approach to Business
MOX Approach to Business 1. Maintain and grow the dividend when we can sustainably support the increase with cash flow and earnings; 2. Grow its portfolio by acquiring additional long-life, cash- flowing royalties in the bulk commodity and industrial mineral sectors in North America; and 3. Continue
Slide 4: 2018 - A Year in Review
2018 - A Year in Review ROYALTY REVENUE $1,020 k DIVIDENDS PAID TO SHAREHOLDERS $537 k NCIB SHARE PURCHASES $847 k DUE-DILIGENCE ON ACQUISITION TARGETS >70 www.morienres.com | TSX-V: MOX Page | 04
Slide 5: G&A Down 40% Since 2013
G&A Down 40% Since 2013 2018 Change Donkin Royalty +614% $1,042,347 $1,072,732 G&A -15% $895,190 $861,766 $736,703 $625,420 2013 2014 2015 2016 2017 2018 www.morienres.com | TSX-V: MOX Page | 05
Slide 6: Management & Director Ownership up 134%
Management & Director Ownership up 134% 14.00% 13.5% 12.2% 12.00% 11.7% 10.00% 8.1% 8.4% 7.9% 8.00% 6.00% 5.2% 4.00% 2.00% 0.00% 2013 2014 2015 2016 2017 2018 2019 www.morienres.com | TSX-V: MOX Page | 06
Slide 7: Ownership Structure
Ownership Structure 13.5% Board & Management 45.7% 11.1% Retail The Cline Group 3.7% Institutional 26% (Holding > 1%) High Net Worth Retail www.morienres.com | TSX-V: MOX Page | 07
Slide 8: Donkin Coal Mine
DONKIN COAL MINE
Slide 9: Donkin Coal Mine
Donkin Coal Mine 484 Mt Coal resource 25+ Years Mine life 2017 Production commencement 2020 Anticipated peak production (annualized rate by Q4) 3.0 Mt Peak annual sales volume 2% to 4% Morien’s scaled top line production royalty www.morienres.com | TSX-V: MOX Page | 09
Slide 10: Donkin Coal Mine
Donkin Coal Mine ▸ Kameron has two operating Coal Sections; ▸ Coal Section #1: Two continuous miners and a flexible conveyor train ▸ Coal Section #2: Two continuous miners and a shuttle car fleet ▸ Both Coal Sections are developing the Mine’s main underground infrastructure and first production pane
Slide 11: Donkin Royalty Set to Materially Increase
Donkin Royalty Set to Materially Increase Received Annual Royalties Forecast Annual Royalties 1 Coal price ($CAD) $70/t $100/t $130/t (1) $12.0 $10.5 mln $10.0 $8.0 mln $8.0 $6.0 $5.5 mln $4.0 $2.0 $0.9 mln $0.1 mln $0.0 2017 2018 Assumes 3.0 mln saleable tonnes (1) Estimated royalties are pre tax w
Slide 12: Firing up the FCT
Firing up the FCT § FCT (1) installed at Donkin in December 2018 § Expected to significantly increase production volumes (1) 4FCT (Flexible Conveyor Train); continuous haulage system that replaces part of Donkin’s shuttle car fleet www.morienres.com | TSX-V: MOX Page | 12
Slide 13: Donkin Mine Site
Donkin Mine Site www.morienres.com | TSX-V: MOX Page | 13
Slide 14: Coal Handling and Preparation Plant (500 tph)
Coal Handling and Preparation Plant (500 tph) www.morienres.com | TSX-V: MOX Page | 14
Slide 15: Donkin's Electrical Sub-Station
Donkin’s Electrical Sub-Station www.morienres.com | TSX-V: MOX Page | 15
Slide 16: Kameron's Private Coal Haul Road
Kameron’s Private Coal Haul Road www.morienres.com | TSX-V: MOX Page | 16
Slide 17: PEV Export Coal Terminal, Sydney, Cape Breton
PEV Export Coal Terminal, Sydney, Cape Breton www.morienres.com | TSX-V: MOX Page | 17
Slide 18: Global Coal Trade Increased by 3.7% in 2018
Global Coal Trade Increased by 3.7% in 2018 Donkin Source: German Coal Importer Association (VDKi), February 2018 www.morienres.com | TSX-V: MOX Page | 18
Slide 19: Metallurgical Coal Demand
Metallurgical Coal Demand Projected to Grow by 44 Million Tons Through 2025 Expected Global Coking Coal Imports (in Millions of Metric Tons) 77 60 53 52 35 37 15 18 Europe South Korea Brazil India 2017 2025 Source: CRU and Wood Mackenzie www.morienres.com | TSX-V: MOX Page | 19
Slide 20: Rising Annual Global Steel Production
Rising Annual Global Steel Production (in Millions of Metric Tons) 1809 1730 1650 1669 1620 1627 1538 1560 2011 2012 2013 2014 2015 2016 2017 2018 www.morienres.com | TSX-V: MOX Page | 20
Slide 21: Thermal Coal - A Dominant Energy Source
Thermal Coal - A Dominant Energy Source ▸ Thermal coal’s contribution to global power grid as % of total will drop from 2010 to 2040, but actual quantity of output will remain strong Power Generation Fuel Mix; 1970 to 2040 20 Renewables Hydro Million Tonnes (oil equiv.) 15 Nuclear Coal Gas 10 Oil 5
Slide 22: Renewable Energy
Renewable Energy ▸ Renewable energy demand grew 14% per year over the last 5 years Renewables includes wind, solar, geothermal, biomass, and biofuels. www.morienres.com | TSX-V: MOX Page | 22
Slide 23: Renewable Energy Reality Check
Renewable Energy Reality Check ▸ … and now account for 4% of global energy consumption Renewables includes wind, solar, geothermal, biomass, and biofuels. www.morienres.com | TSX-V: MOX Page | 23
Slide 24: HELE Power Plant - Denmark
HELE Power Plant - Denmark" (High efficiency, low emission) 40% Reduction in CO2 emissions 95% Reduction in SO2 emissions 38% Reduction in N2O emissions HELE plants used in China, Japan 70% and Europe Ultra-Supercritical Nordjylland Power Station, Denmark www.morienres.com | TSX-V: MOX Page | 24
Slide 25: More Than Just Coal...
MORE THAN JUST COAL...
Slide 26: Black Point Aggregate Project
Black Point Aggregate Project Owner Rendering of Black Point site layout Vulcan Materials Company; largest aggregate producer in North America Status Environmental permit granted in 2017; production decision by April 2020 Terms Production royalty (terms undisclosed) Lifespan 50+ years Anticipated Ro
Slide 27: US Aggregate Market Still in Recovery Phase
US Aggregate Market Still in Recovery Phase Total US Aggregates Production; 1991-2018 Billion (includes Crushed Stone and Sand & Gravel) Metric Tons 3.5 3.0 2.5 2.0 1.5 1.0 0.5 Source: USGS National Minerals Information Center, May 2019 www.morienres.com | TSX-V: MOX Page | 27
Slide 28: US Real Estate Sale - Money Coming In
US Real Estate Sale - Money Coming In Hancock County, Georgia, USA www.morienres.com | TSX-V: MOX Page | 28
Slide 29: Capital Allocation
CAPITAL ALLOCATION www.morienres.com | TSX-V: MOX
Slide 30: Capital Allocation Priorities
Capital Allocation Priorities We are following a disciplined capital allocation process to drive higher returns on invested capital NCIB Acquisitions Dividend § Purchased 10.4 mln § Looked at over 70 § Initiated a quarterly shares at $0.36 per properties in 2018 (48 dividend of $0.0025 share (17.4%
Slide 31: NCIB - Building Wealth for our Shareholders
0.00 0.20 0.40 0.60 0.80 1.00 1.20 Mar-15 (millions) Apr-15 May-15 Jun-15 www.morienres.com Jul-15 Aug-15 NCIB Share Purchases Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 | TSX-V: MOX Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Shares Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17
Slide 32: Prospective Dividend
Prospective Dividend CAD $000,000 $0.09 - $0.12 per share $12 MOX Royalties $0.07 - $0.09 Free Cash Flow per share $10 Dividend Payout Anticipated Dividend $0.05 - $0.07 per share Payout Range $8 $0.04 - $0.05 per share $6 $4 $0.01 $2 per share $0 2018 Actual Scenario A Scenario B Scenario C Scenari
Slide 33: Price to NAV Royalty Peer Company Valuation
Price to NAV Royalty Peer Company Valuation MOX (thermal) 0.48x MOX (met) 0.28x Peer Median 1.40x 0.0x 0.2x 0.4x 0.6x 0.8x 1.0x 1.2x 1.4x 1. Source: Company filings 2. Peers: Altius, Franco-Nevada, Labrador Iron Ore Royalty, Maverix Metals, Osisko, Royal Gold, Sandstorm 3. NAV is post tax, and assum
Slide 34: MOX - Own it for These Reasons
MOX - Own it for These Reasons MOX - Kameron advancing toward high productivity pillar extraction phase MOX - significant valuation multiple expansion and re-rate potential MOX - quarterly dividend levered to Donkin production and coal price MOX - coal demand will remain robust MOX - experienced ope
Slide 35: Contact
Contact Metropolitan Place MOX 99 Wyse Road, Suite 1480 Dartmouth, N.S. Canada, B3A 4S5 Tel: 902-466-7255 John P.A. Budreski Dawson Brisco Executive Chairman President & CEO Susanne Willett Mike MacDonald CFO Vice President, P.Geo TSX-V: MOX www.MorienRes.com [email protected] www.morienres.com