79North - First Mover Advantage in Suriname Gold Exploration

0:05 Hi, my name is Bianca Pena. I'm the COO of 6, and welcome to the 79 North Live Investor Summit. I'd like to start today by introducing our presenter, John North. To kick things off, John will be telling the company's story and then we'll be accepting questions. You can submit your questions in the Q&A panel on the right-hand side of your screen. Without further ado, take it away, John. Okay, thanks, Bianca. Yeah, so my name is John North. I'm the president, CEO, and also the chief geologist of the company. I founded the company in 2016 after spending 5 years prior to that working in the Arctic and we found the Pista Bay gold deposit in Nunavut and before that I spent 10 years living and working in French West Africa, which is Why in a way we ended up in Suriname So when our last company was taken over in 2016, I was called by a friend of mine Who said why don't you come over to surname have a look at things and just see what's going on over there and because of the connection between West Africa and South America Which were connected at one time about 200 million years ago. I completely understood the geology I knew I knew some of the names of the big mines there, like Las Cristinas and Venezuela and things like that.

1:31 And I rented a helicopter and flew around, flew over the Roosevelt mine of I am gold and over the Marion mine of Newmont. And looking out the window of the helicopter, I could see like literally, you know, hundreds and even thousands of guys in the jungle mining gold from the creeks, putting, you know, putting, digging up the creek beds with excavators and pumping the material up into sluice boxes and recovering gold. And It occurred to me that there were a lot more people working in the jungle, in a lot more different areas of the jungle than just the Roosevelt area and the Marion area. And doing a little bit of research and using a little intuition, That's how the Roosevelt and Marion mines were discovered. They were discovered by people like me finding where the source for the gold-bearing creek gravels and things were, drilling holes into those source areas, and you know, in quotations, you know, discovering these gold deposits.

2:36 So I wish I could say it was a stroke of geologic genius that Roosevelt and Marion were discovered by people like me, but it wasn't. They were just people following informal miners around and drilling holes under the existing gold mines. So this is a short presentation. It's 14 slides. It'll go very quickly. Hope not to put anybody to sleep. And I'll start by saying so. Our goal is to become the dominant junior goal explorer in Suriname. We started in 2016. We've got 2 projects right now. Really going to focus on 1 project and we'll grow the company by exploring those projects and making other acquisitions.

3:24 There's the usual forward-looking statement disclaimer. So the opportunity, I think I just mentioned, is that Suriname, which is in the Guyana Shield, has basically the same geology as West Africa. And West Africa has things like the large Gold deposits in Ghana and Mali and Ivory Coast and Guinea and Burkina Faso. This is basically the same geology. We understand the rocks. We have an experienced team of mineral explorers and people with capital markets expertise. We have a good track record of discoveries in South America and elsewhere.

4:13 We have a portfolio of high quality targets that we will try to acquire in future. We're well financed. We just completed a financing. We raised $4.5 million and started trading, I guess, about a month ago. And we're strategically located in the same geology as major gold mines in Suriname. So a little bit about Suriname. It's a gold producing country. It's a relatively small country set amongst gold producing countries like Venezuela, French Guiana, Guyana and Brazil. The gold mining industry in Suriname right now is about, I would say about 100 years or so behind where the West African gold industry and that means that there are still things to discover and that discovering things will be relatively easy because they won't be at great depth and they won't be as well hidden as if they were as if there had been 100 years of exploration here. Countries of parliamentary democracy, they had a recently had an election, the new president just took office, he seems to be a great guy, wants to have strong ties with the world.

5:34 So people are very optimistic about that. It's a very safe country to work in. There's no terrorism, there's no Al Qaeda, there's none of those things that French West Africa has as major problems. And it's not an undeveloped country. It's at the early stages of development, but it's perfectly safe to drink the water there. You won't get malaria in the capital. It's quite a nice country to work in, actually. Large-scale mining has only been going on since 2002. And the business case histories of the Rosebell and Marion mines of Iamgold and Newmont indicate that people, big companies, people that run big companies are perfectly willing to work there. A little bit about the background geology on the left hand of part of this slide that just shows a sort of a shaded area that shows the shared geological terrain of West Africa and South America.

6:30 The right hand side of that slide is all the yellow dots are major gold deposits in West Africa on the right and South America on the left. So starting with starting with just going to move my myself out of the way here. There we go. Yeah, so, French West Africa, we've got the big gold mines here in Ghana, including Ashanti, Obawasi, Demang, Tarquah, that kind of thing. The big gold deposits in Mali are up here, including Satiola, Utila, Lulu, Alamotala, Fe3, Fe4, Morilla, Siguri, etc. Etc. And Those are the big deposits in West Africa.

7:17 And on this side, Las Cristinas, Brisis over here in Venezuela. Oh, incidentally, these deposits in Ghana, that's about 50Moz there, 1 deposit. About another 40 or 50Moz in a single deposit in Mali. About 50Moz in a single deposit here in Venezuela, Las Cristinas, Brises, and here in Suriname between the Roosevelt and Marion mines, there's at least 30 million ounces of gold in just those 2 deposits. So very, very large deposits in very, very small areas. And that's the attractiveness of this is that when you get into one of these really, really super endowed terrains like Las Cristinas, like Roosevelt, Marion, like Sadiola or or Obawasi, you can get 40, 50 million ounce gold deposits in very small areas.

8:12 And that's what the Berymian or the Guyana shield is all about. So this is just another map of the of South America. This this red outline here is the outline of the guy in a shield. Here's the last Christina's mine here. 50 million ounce or Aurora here in in Guyana. And there's other big deposits there. And of course, here's the Marion Roosevelt area where our project is located in. Sram undo all those guys. So that's, that's the terrain we're working in The management and board are all experienced people. I've been doing this for more than 30 years. I've been a geologist for 35 years.

8:57 I've been doing public company things for about 15 or 20 years, I can't remember. Elaine Ellingham, a director, she's a well-known personality in the mining industry. Darryl Hodges as well. Both Elaine and Darryl are also professional geologists and Phil McDonald, the last director on the list, is an accountant and will be the head of the audit committee. Next slide shows CERN-M and this green area is the Greenstone Belt and these little red squiggles all over our areas of artisanal mining. So here's the IAM Gold area here, the Newmont Marion mine area here, and our Nassau project right there.

9:52 So basically anything in that part of Suriname is good real estate. And the next slide is a geology slide. I like this slide really because it shows the location of Marion right here, Nassau right here. This is our Nassau project, which is a 200 square kilometer project, and the Roosevelt mines here. And what it shows is all the geology from Roosevelt to Nassau is all connected by this curved line here, which is a fault, which separates a dominantly volcanic sequence from a dominantly sedimentary sequence. And that's where all the gold is in this part of the world.

10:41 Less is known about Marion because it's just a relatively new discovery. It's only been in production for 3 years. I think there's a lot of missing geology here, but we'll just have to wait until Newmont decides to publish more information about it. But that's the trick here is any real estate that you can get in Suriname, anywhere inside there, puts you in one of these super endowed terrains that because between Roosevelt and Marianne as I said there's there's 30-40 million mineable ounces there same as at Satiola or same as at Oguasi in the Guyana. The next slide shows on the left that geology map again, and on the right-hand side, this is a radar map from Space Shuttle Radar showing a plateau of high relief kind of in the middle of the property.

11:40 And on the edges of that plateau in red are large gold placer. This one here is called Bamboo. This one's called Whitlaga. And this one here is Bull. Now, if you just look at this plateau, it seems to be surrounded by these large placer gold deposits. So the gold has to be coming from that plateau and being shed from that plateau into these placers. And that's why this part of the Nassau project is one of our key targets and we call that the the marinara target. I'll explain a little bit more about that after I undo all these guys. Anyway, yeah, so this is what it looks like on the ground. There's excavators like this all over the place.

12:28 Here's 3 or 4 guys here holding a hose, and that's what's going on all over the property. There's hundreds of guys on the property that are mining gold and they're not really legal. But we don't care about them, we kind of like having them there because they're very diligent explorers. Most of them are Brazilian people and they find out where the gold bearing drainages are and start mining them. So they're good to have around. Almost done here. A little bit about the Newmont Marion mine and the Roseville mine just just some statistics here they're both open pit mines Marion is currently mostly in Saprolite because it's new it's only been in production for 3 years produces produces more than 500,000 ounces a year at an all-in sustaining cost of about $690 an ounce It's got about 5 million ounces in reserves.

13:23 The grades about a gram per ton Roosevelt which has been in production for a lot longer since about I think 2004 is a lot of that production is now from hard rock because most of the saprolytes have been mined. They produce about 270,000 ounces a year at an all-in sustaining cost of about $11.65. So a lot more higher cost but they're all there you know the good days behind them a mining saprolite however they did put a new deposit into production called Saramaca which will add a couple million ounces to their production probably about 200,000 ounces a year because it'll start off by mining saprolite and be very profitable.

14:09 Here's our cap chart here, 85 to 86 million shares issued and outstanding, 140 fully diluted. We're cashed up, not looking to raise money for at least a year. But that could change depending on how new acquisitions and exploration and market performance goes. There's a little budget on the right-hand side for the NASA project. And that's basically it in a nutshell. If anybody has any questions, I'll take any questions. Hey, John, can you hear me? Yep. Awesome. Let's jump into some questions. So first one, what effect has COVID had on the company so far?

15:00 COVID has had the effect of, the main thing is I can't go there and I am the supervising geologist, so I like to be there, but we'll just have to work around that. We'll just have to hire a local geologist and I'll just have to supervise them as best I can from Canada. It'll be a very qualified person that will be able to do what we need to do. And when we find out when and how I can go to Suriname and when it's appropriate, I will do so as soon as possible. Very good. And to an obvious one, but an important one, when do you start drilling? Yeah, Well, we first of all have to do some basic geology work on multiple targets on the property.

15:55 And exploration is a very rational process. So we start off doing certain things and it takes certain amounts of time to do that. And we sort of narrow down target areas on the property and shrink things down until we're ready to drill and then we'll drill. So it could take 6 months before we're starting to drill. So, but we'll do auger drilling before that, But not diamond drilling. Diamond drilling will take probably 6 months. I see some other questions here. I see Paul Rankin here. Hi, Paul. No, we don't want to be a producing company. That's not what we do. However, our main duty is to our shareholders. So from time to time, exploration companies like ours will make a discovery and it will be apparent that the best thing for shareholders would be to become a producing company.

16:45 Junior companies can do that and make the transition, but I wouldn't be involved in that. It would have to be all new management. And like I said, we do that if that's the best thing to do for shareholders. No, the next question, are we taking a royalty on the miners on our land? No, we are not. Not everybody does that. And we pretty much every project in Suriname is a property that's owned by a local company or business that through political connections and whatever have acquired these mineral concessions. So it's up to them to collect that royalty if they want to collect a royalty on the land.

17:31 We don't really want to be involved in plaster gold mining in any way. And again, royalty taking is not part of our business. Another question, What are the near-term plans for exploration of Nassau? So the near-term plans are to develop targets that we can, that will be, you know, very small parts of a very large property. The property is 200 square kilometers. It's 50,000 acres. So we have to define smaller areas to explore that would be about the size of a gold deposit and then explore them. We'd start off by cutting grids and doing all kinds of geochemical sampling and geophysical work like LIDAR surveys and things like that.

18:25 And we would just move these targets up the food chain until we're ready to do some diamond drilling on them. And that could take 6 months. Are we talking MNA? Not sure what that means. MNA with like, we're a little early for us to do an MNA right now. And we are always looking for new projects. Our first priority is because we know so much about Suriname and we have such a large database, is to go through the things that we want to acquire in Suriname and acquire what we can there. And we're working very hard on that. And then because Suriname is not that big of a country and the geology goes really from Venezuela all the way to Brazil.

19:20 Yeah, we'd look at other jurisdictions as well, for sure. Awesome, I have a few more questions for you. Victor Zhao asks, what's the meaning for the company's name? Okay, well, 79 is the atomic number of gold on the periodic table, and North is my last name. And I figure if you're gonna name a company, you should have your last name in it. Fair enough. Hugo Del Rue says, how other mining companies work on your land? Not really. There really hasn't been any sustained work by anybody. Our local partners acquired the project in 2012. Prior to 2012, there really wasn't any sustained work. Newmont apparently drilled a couple of scout holes in there somewhere. We don't know where the holes were.

20:15 We don't know anything about the results. And back in the 1800s, some guys found cinnabar on the project, which is a mercury sulfide. And there was a little bit of a play for cinnabar, which is kind of interesting because that could also be an indication of kind of epithermal-type gold mineralization. So no, no, there's never been any sustained work. There is an airborne mag survey, but that's about it. The only geochemical, geological work that's ever been done was done by us. And that does not include any drilling. Do we need to be politically connected to work there efficiently? No, you don't. You don't have to be politically connected.

21:02 Of all the times I've spent all over the world in so many developing countries, where the first meeting you ever have in the country is to meet the minister of mines, so the minister of mines can see that you're a real person and shake your hand. And I've never been asked to do that here in Suriname. No, no, the Minister of Mines never said, Hey, you know, I need you to come in. So no, you don't need to be politically connected. However, I think the local people that do own concessions, It doesn't hurt if you're politically connected. And it's a small country with a small number of exploration concessions. So I think most of the people that do own mineral concessions like our local partners, they do have political connections, but I don't think it's absolutely necessary. Percent management ownership as of today, I own 10%.

21:57 Let me expand that to not just management, but I have an inner circle of colleagues that I work with on all of these things that we rely on for seed capital and for usually the first real financing. So management and my inner circle of colleagues that we all work together on these things is probably something like 50%. We own, we currently own 70% of Nassau and can earn another 10% by completing a scoping study within 2 years. At that point, our local partner would be a participating joint venture partner, or they could opt to convert their 20% interest into a net smelter royalty or a net profits royalty.

23:00 So I think the net smelter is 3% on that. And the terms to acquire an asset, oh, I'll just say this in general, because I don't have the facts right in front of me. But Since 2014, when the option agreement was signed, there's been about, I think, $300,000 or $400,000 paid to the local partner. And that's it. And we'd have to pay another $100,000 to earn the extra 10% and provide a scoping study. So let's say 500,000 dollars have been paid to them. Yes, do we intend to finalize our website?

23:48 Yes. Well, as far as exploration data, it's pretty close to being finished. What's missing from it are things like financial statements and annual reports. We haven't had an annual report because we've only been public for about a month. So we don't have one. And we just went through the transition from a private company to a public company. So the first quarterly financial statements haven't been approved yet. So we don't have those on the website. I don't think I know what else is missing from the website other than the, just the financial stuff. The website 79north.ca, right? So. I have a few more questions for you here.

24:34 This one comes from Victor. Is there an N43-101 report on the project? Yes, there is. OK, can you check to see if that's on the it's on the site, the 43-101 for NASA? We'll just get back to you on that one. If it's not, we'll put it up. Perfect. Hugo Del Rue asks, Do you have institutions as shareholders? Yeah, we have a couple of small institutional shareholders. There's 1 in the UK, very small firm. But it's not a big part of the total. I have a couple questions here from Paul Rankin.

25:23 First one is, what's your view on the legacy and or current mercury contamination in the country? You were kind of breaking up there, Bianca. Could you repeat that? Yeah. He says, what's your view on the legacy or current mercury contamination in the country? I don't know much about it. There is mercury contamination because most people are using it in the small scale miners, not the real mining companies. Small scale miners use it. So We would expect that that's there. And I don't know exactly how much, but what I've seen, so what companies like Newmont and IAMGOLD have done before they start mining, they do environmental audits. So they do sample downstream areas for mercury.

26:24 And there's also some hydrocarbon contaminated soil because everybody runs off diesel plants and diesel engines and they spill diesel all over the place. So anybody that's working there, moving forward towards scoping studies and things like that usually does an environmental audit just to determine what the level of mercury and hydrocarbon contamination is. Another question here. What is the time to permitting? There's no permitting required right now. We have all the permits we need to do any exploration. Excellent. A simple 1, but an important one. What's the symbol?

27:10 Right now, the symbol is TWLV, because we were taken over by a company called 12 Exploration. So 12 Exploration is the parent company. We operate through 79 North, which is a wholly owned subsidiary of TWLV. And on August 14th, we have our first shareholders meeting of TWLV, and we'll change the name back to 79 North. So and we will change the trading symbol. So after October, sorry August 14th will be called 79 North Inc And we will have a new trading symbol. Okay, so the 43-101, we will put that on the website.

27:57 And the updated one is on the CDAR site, under 12 exploration. And it's in its it's the last update is June 20th, June 12th, 2020. So you can find it on CDAR under 12 exploration. Good stuff. This next one comes from Ken. He says, what was the price of the most recent financing? What was the size of that raise? The price was 15 cents a unit, and we raised $4.5 million. A unit consisted of a share and a full warrant. And the warrant price is 25 cents in a three-year term. Good stuff. Well, this comes to the end of the submitted questions. I have a final question for you, John. What are you most excited about over the next 12 to 16 months?

28:48 First of all, getting people back on the ground there, which is going to happen very, very soon. So people will be cutting line, taking auger samples, collecting samples. We will be doing a LIDAR survey in September. We've signed the contract for that. And so what we're gonna do is we're gonna rapidly, there's a lot to work with here. There's a lot of good geology and geochemistry and geophysics to work with here. And we're just in the right neighborhood. So we'll develop target areas very quickly, start working on them, and start to publish the results of our work. And as soon as is appropriate and efficient, Lee, we will be diamond drilling at Nassau.

29:37 And we are also working very hard on making other acquisitions in Suriname, either by 1 way or another, we'll make other acquisitions. Awesome. Okay, well, that brings us to the end of the Q&A period. If you have a question for John that you didn't get answered or you just thought of 1 right now and you'd like to submit it, you can contact him directly. Contact information is on the slide right now. I'll pass it along to you, John. Okay, well, I just, just in summary, I just think we are the right group of people working in the right place at the right time for the right thing. You