Evolve Royalties Ltd. · CSE:EVR
Evolve Royalties — Evolve Strategic Element Royalties — Investor Presentation (October 2024)
33 slides from Evolve Royalties's investor presentation, October 2024
Slide 1: Corporate Presentation – October 2024
Royalties CORPORATE PRESENTATION – OCTOBER 2024 1
Slide 2: Cautionary Statements
Cautionary Statements This confidential corporate presentation (the “Presentation”) is a confidential document and is being provided to you by Evolve Strategic Element Royalties Ltd. (the “Company”) solely for your information and may not be reproduced, in whole or in part, in any form or forwarded
Slide 3: Cautionary Statements: Technical and Third-Party Information
Cautionary Statements Technical and Third-Party Information Except where otherwise stated, the disclosure in this Presentation relating to properties and operations on the properties in respect of which the Company will acquire royalties or similar instruments or other interests is based on technica
Slide 4: Investment Highlights
INVESTMENT HIGHLIGHTS EXPERIENCED TEAM Building on a track record of success in royalty and streaming CASH FLOWING PORTFOLIO Producing Canadian copper cornerstone royalty Proven model applied to high growth thematic: energy transition, SUPERIOR BUSINESS MODEL sustainability and digital innovation Po
Slide 5: Vision
EVOLVE VISION Evolve will be an early mover in applying the proven royalty and streaming model to finance the new mines that will supply future generations with the strategic commodities needed to transition to alow carbon economy and new digital age
Slide 6: Team Has Done It Before
Team Has Done It Before Joseph de la Plante Vincent Metcalfe Vincent Cardin-Tremblay Chief Executive Officer Chief Investment Officer Chief Operating Officer FORMER CO-FOUNDER, CHIEF FORMER CO-FOUNDER, CHIEF FORMER VP GEOLOGY NOMAD INVESTMENT OFFICER AND EXECUTIVE OFFICER AND CHAIR, ROYALTY CO. DIRE
Slide 7: Building On A Track Record Of Success
Building On A Track Record Of Success MAY 2020 24 MONTHS: 2020-2022 August 2022 INITIAL LISTING BUILD OUT EXIT: ACQUIRED BY SANDSTORM GOLD • US$333 million Listing Price • 8 acquisitions • US$590 million Exit Price • 9 royalty assets acquired from • 7 dividends • 22 royalty and stream assets Orion R
Slide 8: Building On Over A Decade Of Royalty Experience
Building On Over A Decade Of Royalty Experience THE EVOLVE TEAM WERE INVOLVED IN ACQUIRING OR STRUCTURING MANY KEY ASSETS WITHIN THE SECTOR 3 key royalties/streams within Sandstorm’s near- term growth profile 4 of Sandstorm’s top 10 principal assets Many assets within Osisko’s portfolio 8
Slide 9: Commodity Focus
Commodity Focus PORTFOLIO 50% 50% Base Metals Energy Transition ANCHORED Elements BY COPPER ● Copper ● Lithium ● Nickel ● Graphite ● Tin ● High Purity Iron Ore ● Cobalt ● Uranium ● Zinc ● Manganese ● Tungsten ● Phosphate ● Palladium ● Rare earths 9
Slide 10: Copper: Meeting A New Era of Metals Demand
Copper: Meeting A New Era of Metals Demand TRADITIONAL GROWTH SUSTAINABILITY DIGITAL INNOVATION ▪ ADDING TO OR REPLACING ▪ ENERGY TRANSITION ▪ DATA CENTERS EXISTING METAL STOCK TO MEET ▪ EVS ▪ 5G CURRENT AND FUTURE ▪ WIND ENERGY ▪ ARTIFICIAL INTELLIGENCE CONSUMER DEMAND ▪ SOLAR ENERGY ▪ BLOCKCHAIN ▪
Slide 11: Portfolio Anchored by Canadian Copper
Portfolio Anchored by Canadian Copper HIGHLAND VALLEY COPPER COPPER MOUNTAIN SAL DE LOS ANGELES EXPLORATION ROYALTIES (ALABAMA AND VIRGINIA DEPOSITS) PRODUCTION PRODUCTION • OBALSKI • SCOTT LAKE PRE-CONSTRUCTION/ FINANCING CURRENT ~2025 ~2025/26 2027+ CURRENTLY IN CURRENTLY IN SMALL-SCALE LARGE-SCAL
Slide 12: Highland Valley Copper Royalty
Highland Valley Copper Royalty HIGHLIGHTS ✓ EFFECTIVE ~0.51% NPI ON HIGHLAND VALLEY COPPER MINE ✓ CANADA’S LARGEST COPPER MINE ✓ TIER 1 OPERATOR: TECK RESOURCES ✓ CURRENT MINE LIFE EXTENSION PROGRAM TO EXTEND MINE LIFE BEYOND 2045 ✓ SIGNIFICANT LEVERAGE TO COPPER PRICE ✓ US$1.7M CU) AVG. ANN. AFTER-
Slide 13: Highland Valley Copper Asset Overview
ASSET OVERVIEW Highland Valley Copper NPI ON CANADA’S LARGEST OPEN PIT COPPER MINE OPERATED BY CANADA’S LARGEST MINING COMPANY ▪ Open pit copper mine located in south-central British Columbia ▪ Owned and operated by Teck since 1962 ▪ Produces both copper and molybdenum concentrates ▪ Produced 98.8kt
Slide 14: Copper Mountain Royalty
Copper Mountain Royalty HIGHLIGHTS ✓ ROYALTY – 5% NSR ON COPPER; 2.5% NSR ON OTHER METALS ✓ CANADA’S THIRD LARGEST COPPER MINE Evolve Royalty ✓ LOCATED IN BC, CANADA AND RECENTLY ACQUIRED BY HUDBAY ✓ 2024 GUIDANCE: 30-44 KT CU + 17-26 KOZ AU + 300-455 KOZ AG ✓ ROYALTY COVERS A PORTION OF THE COPPER
Slide 15: Sal de Los Angeles Royalty
Sal de Los Angeles Royalty HIGHLIGHTS ACQUISITION TERMS (C$) TOTAL PURCHASE PRICE $15 million ✓ ROYALTY – 2% NSR ON THE SAL DE LOS ANGELES LITHIUM BRINE PROJECT CONSIDERATION PAID ON CLOSING $5 million ✓ LOCATED IN THE LITHIUM TRIANGLE IN ARGENTINA, ONE OF THE LARGEST LITHIUM PRODUCING REGIONS IN TH
Slide 16: Located in The Lithium Triangle
ASSET OVERVIEW Located in The Lithium Triangle ▪ Bolivia, Chile, and Argentina (the “lithium triangle”) have the (2) world’s largest estimated reserves, with ~60 Mt LCE ▪ Resources comprise brine deposits typically extracted using solar evaporation ▪ Sociopolitical conditions have affected access to
Slide 17: Sal De Los Angeles 2% NSR Royalty
ASSET OVERVIEW Sal De Los Angeles 2% NSR Royalty ROYALTY COVERS 2 PROJECTS & BALANCES IMMINENT PRODUCTION WITH LONG TERM UPSIDE SAL DE LOS ANGELES – SESA SAL DE LOS ANGELES – PLASA Imminent Small-scale Cash Flow Sizeable Near-Term Operation ▪ SCALE (1) - 2,500 TPA LCE ▪ SCALE (2) – EIA RELEASED FOR
Slide 18: Exploration Royalties
ASSET OVERVIEW Exploration Royalties OBALSKI SCOTT LAKE ▪ Operator: TomaGold ▪ Operator: Yorbeau ▪ Location: Chibougamau ▪ Location: Chibougamau ▪ 1.5% NSR on Cossette and Ramsay (Buyback 1% for C$1M) ▪ Advanced royalty ($35k per annum) ▪ 1.0% NSR on Obalski and Staked claims (Buyback 0.5% for ▪ C$1
Slide 19: Building Momentum
Building Momentum Recent And Upcoming Milestones And Catalysts ✓ RAISED ~C$7.3 MILLION IN SEED FINANCING – AUG. 2023 TO FEB. 2024 ✓ CLOSED FIRST ROYALTY ACQUISITION: SAL DE LOS ANGELES ROYALTY – FEB. 2024 ✓ RAISED C$21.7 MILLION AT C$0.65/SHARE – MAY 2024 ✓ $15.4 MILLION ACQUISITION OF ROYALTIES FRO
Slide 20: Corporate Structure
Corporate Structure BASIC SHARES OUTSTANDING (1) 87.3 MILLION FOUNDER WARRANTS (2) 12 MILLION EMPLOYEE INCENTIVE OPTIONS (3) 0.6 MILLION CASH ON HAND (C$) ~$4.7 MILLION FD MARKET CAPITALIZATION (C$) $65.0 MILLION UNDRAWN CONVERTIBLE ACQUISITION FACILITY WITH US$5+$5 MILLION ORION (~US$0.55 CONVERSIO
Slide 21: Investment Highlights
INVESTMENT HIGHLIGHTS EXPERIENCED TEAM Building on a track record of success in royalty and streaming CASH FLOWING PORTFOLIO Producing Canadian copper cornerstone royalty Proven model applied to high growth thematic: energy transition, SUPERIOR BUSINESS MODEL sustainability and digital innovation Po
Slide 22: Contact Details
Joseph de la Plante, CEO [email protected] +(1) 514 546-1070 Vincent Metcalfe, CIO [email protected] +(1) 514 249-9960 Vincent Cardin-Tremblay, COO [email protected] +(1) 647 544-7130 22
Slide 23: Evolve Portfolio Summary
Evolve Portfolio Summary ROYALTY DESCRIPTION STATUS COUNTRY COMMODITY HIGHLAND VALLEY COPPER NPI ▪ EFFECTIVE ~0.51% NPI PRODUCING CANADA (BC) CU, MO, AG, AU ▪ 5% NSR ON CERTAIN CLAIMS (EXCLUDING THE NEXT $10 COPPER MOUNTAIN ROYALTY PRODUCING CANADA (BC) CU, AG, AU MILLION IN PRE-TAX AGGREGATE ROYALT
Slide 24: Appendix A: Sal de Los Angeles Supplemental Information
Appendix A Sal de Los Angeles Supplemental Information 24
Slide 25: High Grade Historic Resource (2017)
ASSET OVERVIEW High Grade Historic Resource (2017) (1) LITHIUM CONCENTRATION MAP1 (1) 43-101 technical report titled “Technical Report Resource Estimate for Lithium & Potassium Sal de Los Angeles Project” prepared by Flo Solutions and dated February 24, 2017. (2) The historical estimates are subject
Slide 26: Recent Project Developments
ASSET OVERVIEW Recent Project Developments(1) Development Timeline FEBRUARY 2022 AUGUST 2022 OCTOBER 2022 NOVEMBER 2022 FEBRUARY 2023 MARCH 2023 AUGUST 2023 JULY 2024 Signing of Signing of EIA Submission for Termination Project Salta Development EIA Resubmission EIA release for major construction 50
Slide 27: Well Established Infrastructure
ASSET OVERVIEW Well Established Infrastructure 27
Slide 28: Sal De Los Angeles History
ASSET OVERVIEW Sal De Los Angeles History Development Timeline 2011 2015 2017 2018 2021 2022 2023 Rodinia Lithium X NextView SESA acquires JV w/ SESA pilot facility Honbridge Holdings Ltd. enters Lithium Inc. Aberdeen Energy Corp acquires 100% of pilot 2,500 tpa permitted for into LOI to acquire 38.
Slide 29: Sal De Los Angeles – Project Economics (2011 PEA)
ASSET OVERVIEW Sal De Los Angeles – Project Economics (2011 PEA)(1,2) (1) Source: NI 43-101 Technical Report Preliminary Economic Assessment Salar de Diablillos Project; December 22, 2011 29 (2) The Company is treating this mineral resource as a historical. This historical estimate also uses descrip
Slide 30: Appendix B: Highland Valley Copper Supplemental Information
Appendix B Highland Valley Copper Supplemental Information 30
Slide 31: HVC Return Metrics
TRANSACTION OVERVIEW HVC Return Metrics Base Case: $3.75/lb Cu Current Spot: $4.50/lb Cu Upside Case: $7.00/lb Cu RETURN METRICS Return Metrics Return Metrics 5% After-tax NPV ▪ $23.8 M 5% After-tax NPV ▪ $37.6 M 5% After-tax NPV ▪ $80.8 M After-tax IRR (%) ▪ 11.0% After-tax IRR (%) ▪ 19.1% After-ta
Slide 32: HVC 2040 - Capex Requirements
ASSET OVERVIEW Jon Price at the 2024 BMO Mining Conference – “We’ll continue to invest in HVC. It’s a pretty simple HVC 2040 - Capex Requirements (1) brownfield project. We have to do a push back of the existing mine to access new reserves. We have to Aims to extend the life of the Highland Valley C
Slide 33: HVC 2040 – Work Requirements & Schedule
ASSET OVERVIEW HVC 2040 – Work Requirements & Schedule (1) Application Summary - October 2023 No Material Changes with 2021 Revised Project Description ▪ HVC 2040 would include the following main modifications: ▪ pit and waste rock dump extensions: extension of the existing Valley and Highmont Pits
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