Beacon Securities Ltd.| 66 Wellington Street West Suite 4050, Toronto, Ontario, M5K 1H1 |416.643.3830 |www.beaconsecurities.ca

Orca Gold Inc.

(ORG-V) Positive Infill Drill Results at

Block 14

November 16, 2016

Michael Curran, CFA (416) 507-3950

mcurran@beaconsecurities.ca

ORG’s main asset is located in Sudan, in northeastern

Africa. The May 2016 PEA outlined a robust 1.8MMtpa

open pit mine capable of producing, on average,

73Koz/yr over a 16-year minelife (+1MMoz in total) at an

AISC of US$805/oz, for an initial capital investment of

US$123 million.

Recent Results: Orca is currently completing a drill

programme involving infill and metallurgical testing.

Several intervals of 10-30 metres grading 2-4g/t gold

were encountered, with the best intercept of 30m

grading 6.6g/t at the Wadi Doum pit. At GSS, it is

believed that further drilling is likely to be successful in

joining up a number of the smaller separate pits (fig1).

Other positive aspects of Orca Gold include:

Additional Upside: with a 2.2MMoz resource base,

and delineation of further water sources, we

believe the project has potential to be moderately

upsized, which could increase annual production

towards 100Koz/yr, lower AISC costs, and improve

overall economics.

Established Development Team: Orca has a

number of management and Board members who

were involved with Red Back Mining, which

developed the Tasiast mine in Mauritania,

demonstrating experience advancing a mining

project in a lesser developed African country.

Well-funded: with +$12 million in cash, Orca is in a

solid position to complete the prefeasibility study

(PFS) in Q1/17 and a feasibility study (FS) by the end

of 2017.

Update

Previous Close $0.38

12-month Target Price $0.90

Potential Return 136.8%

Dividend Yield 0.0%

Low High

52 Week Price Range $0.12 $0.55

(C$MM, except per unit) FY15 FY16e FY17e FY18e

Revenue $0.0 $0.0 $0.0 $0.0

Net Income -$9.9 -$9.8 -$6.8 -$6.0

Shares O/S (wgt avg) 107 108 140 200

EPS (operating) -$0.09 -$0.08 -$0.04 -$0.03

CFPS -$0.09 -$0.08 -$0.04 -$0.03

P/E neg. neg. neg. neg.

P/CF neg. neg. neg. neg.

NAV $0.66 $0.82 $0.86

P/NAV 0.6x 0.5x 0.4x

Shares Outstanding 107.4 million

Mgt/Insiders 8%

(C$MM)

Market Cap $40.8

LT Debt (corporate) $0.0

Working Capital $12.5

Enterprise Value $28.3

Fiscal Year End December 31

2P Reserves - MMoz

M+I Resources 1.6 MMoz

Total Resources (M+I+I) 2.2 MMoz

(C$/sh) Q1/15 Q2/15 Q3/15 Q4/15

EPS (operating) -$0.02 -$0.02 -$0.02 -$0.03

CFPS -$0.02 -$0.02 -$0.02 -$0.03

Q1/16 Q2/16 Q3/16e Q4/16e

EPS (operating) -$0.01 -$0.02 -$0.02 -$0.03

CFPS -$0.01 -$0.02 -$0.02 -$0.03

Orca Gold is a Canadian public company engaged in the acquisition

and exploration of mineral properties in Africa. The main asset is the Block

14 project in Sudan. All prices in C$ unless otherwise indicated.

Stock Performance

BUY (unch.) $0.90 (unch.)

Annual Estimates

Valuation

Financials

Reserves / Resources

Quarterly Actuals/Estimates

Company at a Glance

November 16, 2016 Page | 2 Michael Curran| 416.507.3950 | mcurran@beaconsecurities.ca

Orca Gold Inc.

Investment Thesis…Re-rating Opportunity As Block 14

Advances

We consider Orca Gold Mining to be an attractive investment for the

combination of an undervalued emerging junior gold producer with

expansion potential and exploration upside for free. Orca’s Block 14

deposit could become a 73Koz/yr open pit mine with AISC ~US$800/oz.

We also see good potential to both increase production closer to the

100Koz/yr level and lower AISC (for moderately higher capital investment).

Early-Entrant Success – ORG is the first exploreco we are aware of to

become active in Sudan. In 2011 the company targeted an area of the

Arabian-Nubian Shield, which had not seen modern exploration

techniques, but had recent evidence of artisanal mining activity. Sudan is

now the 3rd largest African gold producer (after South Africa and Ghana),

yet it still does not have any formal mines. With the separation of Sudan

and the Republic of South Sudan (RSS) in 2011, we see the mining industry

as a natural focus for the Sudanese government to target for economic

development (as most of the oil production occurs in RSS).

Developing Africa-experienced Management Team – a number of the

senior management and Board of Directors of Orca Gold were involved

with Red Back Mining, which built/expanded the Tasiast gold mine in

Mauritania, before being taken over by Kinross Gold.

Fig 1 Block 14 Project: GSS Zone

Source: Company reports

November 16, 2016 Page | 3 Michael Curran| 416.507.3950 | mcurran@beaconsecurities.ca

Orca Gold Inc.

Valuation Methodology

Our favored valuation method for precious metals producers is a price-to-

net-asset-value (P/NAV) multiple based on a discounted cash flow (DCF)

model constructed using our estimates of the parameters of existing or

potential mining operations. We employ long-term assumptions of

US$1,300/oz for gold starting in 2018. Future year cash flows are then

discounted using a base rate of 5%, to which a risk premium is added,

depending on the overall political risk the company’s assets are exposed

to. Orca’s asset exposure to the Sudan is considered medium-high risk (5%

base + 2% premium). Until a prefeasibility study is completed, we also

impose a further 2% premium to our valuation (7% + 2 % premium).

Fig 2 Net Asset Value Breakdown: Orca Gold Inc.

Discount Rate Ownership Value Per Share (C$/sh)

C$MM FY17e FY18e FY19e

Block 14 (Sudan) 9.0% 70% $140 $0.60 $0.77 $0.81

Other exploration $0 $0.00 $0.00 $0.00

OPERATING ASSETS $140 $0.60 $0.77 $0.81

Working Capital $13 $0.05 $0.05 $0.05

LT Debt (corporate only) $0 $0.00 $0.00 $0.00

CORPORATE ASSETS $13 $0.05 $0.05 $0.05

NET ASSET VALUE $152 $0.66 $0.82 $0.86

Source: Beacon Securities estimates

In Fig. 2 we provide forward-looking NAV/sh estimates to show how the

company’s NAV is forecast to change over the next few years. For junior

gold producers (gold production <250Koz/yr), we employ a target range

of 0.50x-1.50x P/NAV. Using a target P/NAV multiple of 0.8x on our 2017

NAV estimate suggests a fair value of $0.50/sh for Orca Gold.

On a forward-looking P/CF multiple analysis basis, we forecast Orca could

achieve average CFPS of US$0.27/sh in its first year of production (2020).

Discounting back to the present (at 20% per annum) suggests $0.16/sh.

Applying our target multiple of 8.0x P/CF to this estimate, which is towards

the lower end of our 5.0x-15.0x target range for junior gold producers,

suggests a fair value of $1.25/sh.

On an adjusted market capitalization per total resource ounce basis

(AMC or EV/oz), we see that Orca Gold trades at a significant discount to

the peer group of non-producing golds with deposits of a similar grade.

November 16, 2016 Page | 4 Michael Curran| 416.507.3950 | mcurran@beaconsecurities.ca

Orca Gold Inc.

Fig 3 AMC/oz For Similar Grade Non-Producers

(M+I) (M+I+I)

Share Shares Market Measured Total Gold AMC/ AMC/

Sym- Price O/S Cap AMC Indicated Resource Grade M+I oz M+I+I oz Area of

Company Exch C$/sh M US$M US$M 000oz 000oz g/t US$/oz US$/oz Major Exploration

Amarillo Gold AGC-V $0.37 70 $20 $21 1,210 1,498 1.62 17 14 Brazil

Atlantic Gold AGB-V $0.92 168 $119 $111 1,158 2,198 1.54 96 50 Nova Scotia

California Gold Mining CGM-V $0.52 32 $13 $13 515 879 1.60 25 15 California

Columbus Gold CGT-T $0.59 143 $65 $61 1,885 2,965 1.49 32 21 French Guyana

Falco Resources FPC-V $0.99 114 $87 $81 4,563 5,616 1.54 18 14 Quebec

Midas Gold Corp. MAX-T $0.99 178 $136 $136 5,464 6,530 1.58 25 21 Idaho

Sarama Resources SWA-V $0.19 112 $16 $14 282 1,202 1.83 49 12 Burkina Faso

Treasury Metals TML-T $0.60 94 $43 $45 1,111 1,441 1.98 41 32 Ontario

West African Resources WAF-V $0.27 409 $85 $70 983 2,026 1.25 71 35 Burkina Faso

Mean 42 24

Median 32 21

Orca Gold ORG-V $0.38 107 $31 $22 1,599 2,240 1.78 14 10 Sudan

Source: Company reports and Thompson Reuters Eikon data

Using the valuation methods described above, and a 50/50 blend of fair

values generated by NAV and CF analysis, generates our 12-month target

price of $0.90 per ORG share.

Fig 4 Block 14 Project: Project Ownership (left) and Location Map (right)

Source: Company reports

Fig 5 Economic Parameters: Block 14 Project

Jul-16 Beacon

PEA model

Initial capital US$MM 123 150

Sustaining capital US$MM 31 35

Resource Size MMt 28 28

Throughput - daily t 5,150 6,300

Throughput - annual MMt 1.8 2.2

Minelife years 16.0 13.0

Mined Grade - Gold g/t 1.52 1.50

Gold recovery % 86% 88%

Gold Production - avg annual Koz 73 93

Gold Production - total lom MMoz 1.17 1.20

Op Costs US$/t 778 780

AISC US$/oz 805 877

IRR - after tax % 22%

Payback - after tax years 4

Source: Company report and Beacon Securities estimates

November 16, 2016 Page | 5 Michael Curran| 416.507.3950 | mcurran@beaconsecurities.ca

Orca Gold Inc.

Appendix: Summary Financials

Orca Gold Inc. Beacon Securities Limited

Symbol ORG-V Share Price $0.38

Stock Rating BUY Shares O/S (MM) 107.4

Price Target $0.90 Mkt Cap ($MM) 41Michael Curran, CFA (416) 507-3950

INCOME STATEMENT FY15 FY16e FY17e FY18e RATIO ANALYSIS FY15 FY16e FY17e FY18e

Revenues C$MM - - - - Dividends Per Share $/sh - - - -

Operating Costs C$MM - - - - Dividend Yield % - - - -

EBITDA C$MM (10.4) (10.0) (6.0) (6.0) LT Debt/(Total Capital) % - - - -

DD&A C$MM - - - - EV/EBITDA x - - - -

EBIT C$MM (10.4) (10.0) (6.0) (6.0) PRICES/EXCHANGE RATES FY15 FY16e FY17e FY18e

Interest Expense C$MM (0.5) (0.2) 0.8 - Gold Price US$/oz $1,166 $1,250 $1,300 $1,300

EBT C$MM (9.5) (8.8) (5.8) (5.0) Realized Gold Price US$/oz - - - -

Taxes/Recovery C$MM - - - - Silver Price US$/oz $15.38 $17.50 $18.00 $19.00

Net Income (reported) C$MM (9.9) (9.8) (6.8) (6.0) Realized Silver Price US$/oz - - - -

Non-Recurring Items/Other C$MM 0.4 1.0 1.0 1.0 US$:C$ 1.28 1.33 1.30 1.27

Net Income (operating) C$MM (9.5) (8.8) (5.8) (5.0) MINE/EQUITY PRODUCTION FY15 FY16e FY17e FY18e

Shares o/s (wgt avg.) MM 107.4 107.5 140.0 200.0 Gold Production 000 oz - - - -

EPS (operating) $/sh ($0.09) ($0.08) ($0.04) ($0.03) Total Cash Costs US$/oz - - - -

P/E Multiple x n.m. n.m. n.m. n.m. All-in Sustaining Costs (AISC) US$/oz - - - -

Cash Flow (operating) C$MM (9.5) (8.8) (5.8) (5.0) Total incl. Cash Costs + royalties AISC incl. sustex, exploration, corpG&A

CFPS $/sh ($0.09) ($0.08) ($0.04) ($0.03)

P/CF Multiple x n.m. n.m. n.m. n.m.

SCFP

Cash Flow from Operations

Net Income C$MM (9.9) (9.8) (6.8) (6.0)

DD&A C$MM 0.5 - - -

Deferred Taxes C$MM - - - -

Other C$MM 0.3 1.5 1.0 1.0

Changes in Working Capital C$MM (0.9) 0.6 - -

(10.0) (7.7) (5.8) (5.0)

Cash Flow From Investing

Capital Expenditure (net) C$MM (4.7) - (5.0) (50.0)

Acquis./Investments C$MM - - - -

Other C$MM - - - -

(4.7) 0.0 (5.0) (50.0)

Cash Flow From Financing

Equity Issues (net of costs) C$MM - 2.0 15.0 75.0

Net Borrowings C$MM - - - -

Dividends Paid & Other C$MM - 2.7 - - RESERVES / RESOURCES

- 4.7 15.0 75.0 Reserves MMoz -

Net Inc/Dec (incl FX) C$MM (14.7) (3.0) 4.2 20.0 AMC/oz* US$/oz -

Cash at End of Year C$MM 10.0 7.0 11.2 31.2 Total Resources MMoz 2.2

BALANCE SHEET AMC/oz** US$/oz 10

Cash & Equivalents C$MM 10.0 7.0 11.2 31.2 * AMC = Adjusted Market Capitalization = Market Cap + LT Debt - working cap

Total Current Assets C$MM 17.9 12.4 16.6 36.6 ** Total Resources include measured, indicated, and inferred

PP&E & Mining Interests C$MM 5.2 5.2 10.2 60.2 ESTIMATED NET ASSET VALUE (NAV)/SHARE - 2017

Other C$MM - - - - Status Own'ship $MM $/Sh %NAV

Total Assets C$MM 23.1 17.6 26.8 96.8 Block 14 devo. 100% $140 $0.60 92%

Current Liabilities C$MM 1.2 2.0 2.0 2.0 Other $0 $0.00 0%

Long Term Debt C$MM - - - - Total Operating $140 $0.60

Other LT Liabilities C$MM - - - - Working capital $13 $0.05 8%

Total Liabilities C$MM 1.2 2.0 2.0 2.0 LT Debt $0 $0.00 0%

S/Holder Equity C$MM 21.9 15.6 24.8 94.8 NAV $152 $0.66

Total Liab. & S/Holder Equity C$MM 23.1 17.6 26.8 96.8 Current P/NAV 0.6x

Working Capital C$MM 16.7 10.4 14.6 34.6 Source: Company reports, Beacon estimates

$0

$250

$500

$750

$1,000

0

50

100

150

200

2015 2016e 2017e 2018e 2019e 2020e 2021e

Gold Prod'n (000oz) Cash Costs (US$/oz)

Beacon Securities Ltd.| 66 Wellington Street West Suite 4050, Toronto, Ontario, M5K 1H1 |416.643.3830 |www.beaconsecurities.ca

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As at October 31, 2016 # Stocks Distribution

Buy 62 72% Buy Total 12-month return expected to be >15%

Speculat ive BUY 14 16% Speculat ive Buy Potential total 12-month return is high (>15%) but given elevated risk, investment could result in a material loss

Hold 3 3% Hold Total 12-month return expected to be between 0% and 15%

Sell 0 0% Sell Total 12-month return expected to be negative

Under Review 6 7% Tender Clients are advised to tender their shares to takeover bid or similar offer

Tender 2 2%

Total 86 100%

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