Sprott Inc. · TSX:SII
Sprott — Sprott Resource Holdings — Investor Presentation (January 2019)
30 slides from Sprott's investor presentation, January 2019
Slide 1: Sprott Resource Holdings Inc. Investor Presentation
Sprott Resource Holdings Inc. Investor Presentation January 2019 All figures in US dollars, unless otherwise stated Investor Presentation | 1
Slide 2: About SRHI
About SRHI Based in Toronto, SRHI is part of the Sprott Group of Companies. We invest in producing natural resource companies to generate strong cash flows for our shareholders. Investor Presentation | 2
Slide 3: Part of the Sprott Group of Companies
Part of the Sprott Group of Companies Sprott is a specialized natural resource manager with $10B in AUM Exchange Listed Public Equities Private Equity Private Lending • 4 Physical Bullion • Managing public • Diversified portfolio of • Specializes in bespoke Trusts resource equities since natural res
Slide 4: Board of Directors and Management Team
Board of Directors and Management Team Terrence A. Lyons Steve Yuzpe Chairman, Independent Director President, Chief Executive Officer, Director Lead Director of Canaccord Genuity Group Inc. Rick Rule Lenard Boggio Vice Chairman, Chief Investment Officer, Director Independent Director Retired Charte
Slide 5: SRHI Ownership and Market Capitalization
SRHI Ownership and Market Capitalization Shareholders Breakdown Major Shareholders 15% SRHI Shareholders Sprott Inc. 7% Major Directors & Management 6% Shareholders Other Friendlies 3% 15% Other 69% Total 100% Market Capitalization Sprott Inc. 7% Share Price (as of Jan-20-2019) C$1.15 Basic Shares O
Slide 6: Portfolio Summary
Portfolio Summary SRHI NAV Breakdown (1) Other 10% Oil & Gas 9% Cash 15% Mining 66% (1) As of Sept 30, 2018. Investor Presentation | 6
Slide 7: SRHI Trades at Deep Discount to Producing Assets
SRHI Trades at Deep Discount to Producing Assets MTV is expected to generate strong cash flow by 2020(1) which implies SRHI trades at a heavily discounted free cash flow multiple Illustrative SRHI Enterprise Value(2) $50 $40 $39 $30 Based on recently released technical report results, SRHI is tradin
Slide 8: Core Asset: MTV Copper Mine
Core Asset: MTV Copper Mine Aerial View of Don Gabriel Open Pit Crusher – Four-stage crushing 7,000tpd capacity Cathode Produced on Site – Capacity of 18,500tpa Processing Plant – Room for further expansion Investor Presentation | 8
Slide 9: Core Investment - Minera Tres Valles
Core Investment - Minera Tres Valles Provides SRHI with a cash flowing business with exposure to copper and a growth platform in Chile • In October 2017, SRHI acquired a 70% stake in S.C. Minera Tres Valles, for US$40 million • Located near Salamanca, Chile, 200km north of Santiago • Previously deve
Slide 10: MTV Technical Report Highlights
MTV Technical Report Highlights Robust Economics at $2.75/lb Copper Price Highlights Base Case PEA Case(2) $129M Pre-tax Net Present Value (NPV) (8%) $87M $129M NPV (8%) After-tax(2) After-tax Net Present Value (NPV) (8%) $87M $129M Pre-tax Internal Rate of Return (IRR) 93% 131% 131% After-tax Inter
Slide 11: MTV Cash Flow Summary
MTV Cash Flow Summary Strong Cash Flow Generation at $2.75/lb Copper Base Case Cash Flow Profile(1,3,4,5,6) PEA Case Cash Flow Profile(1,2,3,4,5,6) $60 $200 $60 $200 $50 $50 $150 $150 $40 $40 $30 $30 (US$ 000s) (US$ 000s) $100 $100 (US$ 000s) (US$ 000s) $20 $20 $50 $50 $10 $10 $0 $0 $0 $0 -$10 -$10
Slide 12: MTV Sensitivity Analysis
MTV Sensitivity Analysis Significant Leverage to Copper Prices Base Case Pre-tax NPV; US$ millions(1) PEA Case Pre-tax NPV; US$ millions(1,2) $200 $300 $250 $150 $200 $87 $129 $100 $150 $100 $50 $50 $0 $0 -$50 -$50 -30% -20% -10% 0% 10% 20% 30% -30% -20% -10% 0% 10% 20% 30% Cash Cost Capex Cu Price
Slide 13: MTV Property Map
MTV Property Map Investor Presentation | 13
Slide 14: Industry Leading Production Growth
Industry Leading Production Growth Industry Leading Production Growth from 2017 to 2020E(1) (1) Source: analyst consensus estimates as of January 14, 2019. Dataset shows 2017 year end results to 2020E compared to MTV’s mine plan as outlined in the Technical Report press release dated November 2, 201
Slide 15: Copper Grade Benchmarked vs. Peers
Copper Grade Benchmarked vs. Peers MTV is one of the highest grade copper assets when compared against both junior/mid-tier producing and development assets 2.20% 1.04% 0.62% 0.54% 0.35% 0.32% 0.28% 0.28% 0.24% 0.24% MSCA Mining Minera Tres Marimaca Pumpkin Florence Red Chris Gunnison Gibraltar Nort
Slide 16: Significant Exploration Upside
Significant Exploration Upside MTV offers significant exploration potential both around the existing orebodies and within the broader property area Overview of Mineral Property • Less than 10% of 45,838 hectare property surface was thoroughly explored by Vale o Exploration concentrated in the Papomo
Slide 17: MTV Investment Recap
MTV Investment Recap Operating mining complex with significant infrastructure in place Production expected to triple over next 2 years Cash flow expected to reach US$34MM in 2020* Exposure to copper that exhibit attractive long-term market fundamentals Located in Chile, ranked 8th out of 9
Slide 18: Why SRHI
Why SRHI Exposure to attractive commodities High torque to improving copper prices Currently trading at a deep discount to 2020 cash flows Strategic investors include: • Sprott Inc. • Rick Rule • Vechiolla Group • SRHI insiders Investor Presentation | 18
Slide 19: Appendix
Appendix Investor Presentation | 19
Slide 20: Corsa Coal Corp.
Corsa Coal Corp. Operationally successful with significant upside potential • Growth-oriented premium quality metallurgical Adjusted EBITDA Growth ($M)(1) (“met”) coal producer with a strong balance sheet $60 • Vision: To build a low-cost producer of scale of $40 premium quality coal at a time of ma
Slide 21: InPlay Oil Corp.
InPlay Oil Corp. Exhibiting industry leading production and cash flow growth • Publicly traded energy exploration and Adjusted Funds Flow Growth ($M)(2) development company based in Calgary, Alberta $80 • Positioned in two of the most exciting light oil $60 plays in the Western Canada Sedimentary Ba
Slide 22: Why We Like Copper
Why We Like Copper Copper Supply & Demand Outlook (refined basis) • Structural supply deficit expected 26 o Short-term factors have driven price up 24 4.5Mt of new production capability needed from greenfield projects o Development projects require higher prices 22 Mt Cu o Declining ore grades at cu
Slide 23: Why We Like Chile
Why We Like Chile • Chile is home to the largest concentration of Top Global Copper Producers3 world-class copper porphyry's Chile • #1 global copper producer – 28%(1) of global 20% Peru production 28% 3% China 4% 4% US • #1 global copper reserves – 29%(1) of global 4% 12% copper reserves 5% 5% Aust
Slide 24: MTV Mineral Reserve Estimate
MTV Mineral Reserve Estimate Tonnes Grade Contained Cu Contained Cu Category (kt) (CuT %) (kt) (000 lbs) Don Gabriel Manto Proven 898 0.80% 7.1 15,653 Probable 4,270 0.82% 34.9 76,941 Total Proven & Probable 5,168 0.81% 42.1 92,815 Papomono Masivo Proven 2,559 1.51% 38.7 85,319 Probable 508 1.48% 7.
Slide 25: MTV Mineral Resource Estimate
MTV Mineral Resource Estimate Tonnes Grade Contained Cu Contained Cu Classification (kt) (CuT %) (kt) (000 lbs) Measured & Indicated Resources (inclusive of mineral reserves) Measured 5,530 1.42 7,830 172,674 Indicated 12,774 0.87 11,113 244,581 Total Measured & Indicated 18,304 1.03 18,853 417,255
Slide 26: Contact Details
Contact Details Royal Bank Plaza, South Tower 200 Bay Street, Suite 2600 Toronto, Ontario M5J 2J1 www.sprott.com Steve Yuzpe President and Chief Executive Officer Business: 416.977.7333 [email protected] Glen Williams Managing Director, Investor Relations Business: 416.943.4394 [email protected]
Slide 27: Disclaimer
Disclaimer Qualified Persons The scientific and technical content contained in this presentation has been reviewed, verified and approved by Dr Antonio Luraschi, RM CMC, Manager of Metallurgic Development and Senior Financial Analyst, Wood, Mr Sergio Navarrete, RM CMC, Mining Engineer, Wood, Mr Alfo
Slide 28: Disclaimer (cont'd)
Disclaimer (cont’d) Cautionary Statement Regarding Forward-Looking Information Certain statements in this presentation or the accompanying oral remarks, including in response to questions, contain forward- looking information (collectively referred to herein as the “Forward-Looking Statements”) with
Slide 29: Disclaimer (cont'd)
Disclaimer (cont’d) Although SRHI believes that the Forward-Looking Statements are reasonable, they are not guarantees of future results, performance or achievements. A number of factors or assumptions have been used to develop the Forward-Looking Statements, including: there being no significant di
Slide 30: Disclaimer (cont'd)
Disclaimer (cont’d) Non-IFRS Financial Measures This presentation uses the term "Working Capital" which is not recognized under IFRS and may not be comparable to a similar measure presented by other companies. The Company uses this measure to help evaluate its performance and liquidity as well as to
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