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VRIC 2020January 19th, 2020 / Workshop 5

Presented by Kai Hoffmann, CEO

▪ We track over 1,400 companies on the TSX, TSX-V, and the CSE

▪ Provide sector and broker reports

▪ Logged +33 500 deals since 2011

▪ Data-driven approach to examining financings

▪ In-house data analyst▪ Consulting on capital raises

and ancillary aspects

2

J U N I O R M I N I N G M A R K E T

CAD financingCAD market cap

3

Weighted Index Factors:1. Total $s of financings

opened

2. Percentage of broker participation

3. Total # of deals opened

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www.Oreninc.com

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Collaboration with PDAC

Publication at PDAC Conference

Special Focus: Financings of companies with sub C$ 100mn market cap

• Flow-Through will be major contributor and will keep companies with Canadian projects afloat

• Cannabis companies have peaked in 2018

• Chance to see less financings with warrants attached to show strength

Smallest financing 2019:$5,000

$0.05 – 150% Premium1 Warrant, 36 months

Source: Oreninc

7

11,1%

10,0%

15,5%

18,7%18,4%

0,0%

2,0%

4,0%

6,0%

8,0%

10,0%

12,0%

14,0%

16,0%

18,0%

20,0%

$-

$0,50

$1,00

$1,50

$2,00

$2,50

$3,00

$3,50

$4,00

$4,50

$5,00

2015 2016 2017 2018 2019

Bill

ion

s

Common Flow-Through FT in % of total

FT $572mn

8

FT; $561.319.171,07 ; 47%Common;

$625.085.210,55 ; 53%

2019

FT Common

FT; $464.380.500,00 ; 40%

Common; $685.201.870,27 ; 60%

2018

FT Common

TOP 10 $197.68mn

Canadian Exploration Financings

Share of FT40% 47%

9

FT Premiums sub 30%

FT Premiums negative – free shares!

FT with a warrant

“The offering will consist of flow-through units and non-flow-through units both priced at five cents per unit.”

CALL TO ACTION#FREESHARES

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Market Caps Share Price Dollars Raised Dilution FT Premiums Comments

1 6,121,569.00 0.105 200,000.00 3.3% -52.38% 10% Disc at announcement, pumped up, sold off

2 2,227,804.00 0.12 270,799.98 12.2% -50.00% Known Scammer

3 32,834,618.00 0.2 1,000,000.00 3.0% -40.00% Positioning for IR firm

4 18,638,902.00 0.36 1,999,999.00 10.7% -38.89% Promo Play, Eric Sprott Investment

5 8,350,682.00 0.195 780,000.00 9.3% -33.33% 17.6% premium at time of announcement

6 2,332,330.00 0.22 168,000.00 7.2% -31.82% Positioning for promoters & insiders

7 26,412,491.00 0.175 2,990,861.64 11.3% -31.43% Positioning for promoters

8 16,672,546.00 0.08 227,333.00 1.4% -31.25% Dragged out financing from 2018

9 3,159,830.00 0.31 308,000.00 9.7% -29.03% Premium upon close, Eric Sprott investment

10 5,870,498.00 0.07 100,000.00 1.7% -28.57% Known Scammer

11 26,955,184.00 0.83 405,000.00 1.5% -27.71% Promote, doomed to fail

12 6,312,694.00 0.135 140,000.00 2.2% -25.93% 0% Premium on announcement

13 2,597,227.00 0.1 300,000.00 11.6% -25.00% Known Promoter on the board

14 151,354,069.00 0.37 5,096,356.72 3.4% -24.32% No announcement of financing opening, closed after positive news

15 8,959,093.00 0.65 250,000.00 2.8% -23.08% Area play in Red Lake

16 25,766,495.00 0.285 360,739.94 1.4% -22.81% Stock had massive run up, 0% premium at announcement

17 7,626,007.00 0.205 100,000.00 1.3% -21.95% Pot AND Cobalt company

18 6,312,694.00 0.135 275,000.00 4.4% -18.52% 0% Premium on announcement

19 6,848,094.00 0.18 150,000.00 2.2% -16.67% 2019: 750k, 294k, 225k placements, company has more advisors than DT

20 3,564,000.00 0.48 100,000.00 2.8% -16.67% 20% discount on annoucement at the end of the year

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Cannabis on the CSEAs of Oct. 31, 19

Cannabis & related companies accountedfor 81% capital raised YTD

Raising just below 2bn CAD

Approx 50% was raised by US issuers

TOTAL for 2018: 3.99bn!

Mining raised $162mn or 7% of the total

Source: The CSE, Graph: https://marijuanaindex.com

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2018

1/1 Warrant

1/2 Warrant

0 Warrant

Average Premium

63% 25.6 months

Average Term

No of Financings

66% 27.7 months

36349.7%

21629.5%

15120.6%

2019

Average Premium

Average Term

No of Financings

65% 25.1 ➔months

61% 29.1 months

38449.5% ➔

18924.4%

19725.4%

731 775TOTAL Top 30 financings,only 30% with a warrant

Financings with warrants

2018: 79.2%2019: 73.9%

13

“HOW YOUR INVESTMENT IS KILLING THE INDUSTRY”

Source: Oreninc*includes Common & Flow-Through, ex Oil & Gas & Frack Sand

14

8.030

4.609

2.290

3.242

2.406

4.819 4.600

2.758 2.538

-

1.000

2.000

3.000

4.000

5.000

6.000

7.000

8.000

9.000

2011 2012 2013 2014 2015 2016 2017 2018 2019

Mill

ion

s

15

Dow Jones: +18.8%S&P500: +24.7%Microsoft: +55.1%Tesla: +68.9%Apple: +103.3%

16

Advantages of ETFs▪ Managed by a fund manager with industry

expertise & qualifications

▪ Spreading your investment dollars wider

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TICKER FUND NAME ISSUER AUMGDX VanEck Vectors Gold Miners ETF VanEck $12.81BGDXJ VanEck Vectors Junior Gold Miners ETF VanEck $4.86BRING iShares MSCI Global Gold Miners ETF Blackrock $291.83M

SGDM Sprott Gold Miners ETF Sprott, Inc. $184.95M

JDST Direxion Daily Junior Gold Miners Index Bear 3X Shares Rafferty Asset Management $137.93M

SGDJ Sprott Junior Gold Miners ETF Sprott, Inc. $59.79MGOAU U.S. Global GO Gold and Precious Metal Miners ETF US Global Investors $56.15M

GOEX Global X Gold Explorers ETF Mirae Asset Global Investments $42.47M

$18.44B

TSX.V Market Caps$18.98bn*

TSX Market Caps$362.15bn*

*as of December 31,2019; Source: TSX.com

GDXJSibanye Gold (US$29.7bn)

Kinross (US$5.6bn)

17

Grass roots companies struggling to raise funds

Deal makers:Become immediately ETF relevant

594 financings below C$ 1mn Average market cap: C$ 9mn

471 financings above C$ 1mnAverage market cap: C$ 67mn

18

Dow Jones: +18.8%S&P500: +24.7%

GDX: +39.9%GDXJ: +39.3%

19

Gold: 19.6%

GDX: +38.9%GDXJ: +38.2%

20

Gold: 19.6%GDX: +38.9%GDXJ: +38.2%

SilverCrest: +87.7%AMEX Expl.: +188.5%Great Bear: +206.9%

21Gold in USDSource: World Gold Council, Oreninc

0,00

10,00

20,00

30,00

40,00

50,00

60,00

70,00

80,00

90,00

1.200,0

1.250,0

1.300,0

1.350,0

1.400,0

1.450,0

1.500,0

1.550,0

1.600,0

Gold Oreninc Index

22Gold in USD, Total size opened in CADSource: World Gold Council, Oreninc

$-

$100.000.000

$200.000.000

$300.000.000

$400.000.000

$500.000.000

$600.000.000

$700.000.000

0,0

200,0

400,0

600,0

800,0

1.000,0

1.200,0

1.400,0

1.600,0

1.800,0

2.000,0

13-J

an-1

110

-Mar

-11

5-M

ay-1

130

-Ju

n-1

125

-Au

g-1

120

-Oct

-11

15-D

ec-1

19-

Feb

-12

5-A

pr-

1231

-May

-12

26-J

ul-

1220

-Sep

-12

15-N

ov-

1210

-Jan

-13

7-M

ar-1

32-

May

-13

27-J

un

-13

22-A

ug

-13

17-O

ct-1

312

-Dec

-13

6-F

eb-1

43-

Ap

r-14

29-M

ay-1

424

-Ju

l-14

18-S

ep-1

413

-No

v-14

8-J

an-1

55-

Mar

-15

30-A

pr-

1525

-Ju

n-1

520

-Au

g-1

515

-Oct

-15

10-D

ec-1

54

-Feb

-16

31-M

ar-1

626

-May

-16

21-J

ul-

1615

-Sep

-16

10-N

ov-

165-

Jan

-17

2-M

ar-1

727

-Ap

r-17

22-J

un

-17

17-A

ug

-17

12-O

ct-1

77-

Dec

-17

1-F

eb-1

829

-Mar

-18

24-M

ay-1

819

-Ju

l-18

13-S

ep-1

88

-No

v-18

3-Ja

n-1

928

-Feb

-19

25-A

pr-

1920

-Ju

n-1

915

-Au

g-1

910

-Oct

-19

5-D

ec-1

9

Source: Oreninc*includes Common & Flow-Through, ex Oil & Gas & Frack Sand

23

8.030

4.609

2.290

3.242

2.406

4.819 4.600

2.758 2.538

-

1.000

2.000

3.000

4.000

5.000

6.000

7.000

8.000

9.000

2011 2012 2013 2014 2015 2016 2017 2018 2019

Mill

ion

s

Total $s raised 2011 - 2019

20202 Bought deals in week 1

2019Bought deals only in week 8

Source: Oreninc 24

Since May: 62 & 53

216240

1008384

98

4768

0

50

100

150

200

250

300

2016 2017 2018 2019

# of Brokered Deals # of Bought Deals

Source: Oreninc

*includes Common & Flow-Through, ex Oil & Gas & Frack Sand 25

Jan to Apr: 307May to today: 770

1440 1485

1181 1205

1008

14851397

10051077

0

200

400

600

800

1000

1200

1400

1600

2011 2012 2013 2014 2015 2016 2017 2018 2019

Total # of Deals2011 - 2019

Source: Oreninc*includes Common & Flow-Through, ex Oil & Gas & Frack Sand 26

2019

595 deals< C$ 1mn

$5.576.529,48

$3.103.549,54

$1.938.755,19

$2.690.223,25 $2.387.126,40

$3.245.099,94 $3.292.535,62

$2.743.946,51 $2.356.530,23

$-

$1.000.000,00

$2.000.000,00

$3.000.000,00

$4.000.000,00

$5.000.000,00

$6.000.000,00

2011 2012 2013 2014 2015 2016 2017 2018 2019

Average Deal Size 2011 - 2019

27

▪ Don’t over-allocate into one single stock

▪ Don’t chase stocks

▪ Avoid financings with FT price at or below current share price

▪ Start with prospectus financings, no 4-month hold period, often without a warrant

▪ Re-Allocate some capital out of ETFs into single stocks

▪ Participate in private placements, even as a US-investor

▪ Join a Stock Club

▪ Time to educate yourself and get a head start

▪ Newsletters▪ Conferences▪ Webinars▪ Social Media

FLOW – THROUGHFinancing form will remain extremely important moving forward

ACCESS TO FINANCINGS Few remaining institutional investors will have easy access to deal flow, retail less so.

Emergence of deal clubs.

MID TIER PRODUCERSwill start to invest into junior exploration companies

@oreninc

@oreninc

@oreninc

Youtube.com/oreninc

Visit our website at:oreninc.com

Kai HoffmannCEO, OrenincE: hoffmann@oreninc.comC: +1 604 687 3520 ext. 227

Subscribe to our newsletter at:oreninc.com/subscribe

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30Source: PDAC

Application of various federal, provincial and mineral exploration tax credits

Share price

premiums over

40%

31

FLOW THROUGH PLUS PHILANTHROPY

Share price

premiums up to

70%Investor often gets discount to market

Donor buys FT shares from Company

Donor donates shares immediately to his favorite charity on the day of issuance

Charity immediately sells to pre-determined investor at a pre-determined price

No costs to investor or company

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Still owns 13mn shares in Kirkland Lake Gold

~700mn CAD

45 companies

Since September 15 invested another 58mn CAD

Total investment of

$234.694.697,6211%

of overall market

• Icon 1 & 2 made by Geotatah from Flaticon• Icon 3 made by icongeek26 from Flaticon• Social media icons by Freepik from

Flaticon

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