kivalliq energy corporate presentation - january 17, 2014
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Click to edit Master title style Advancing Northern Canada’s Highest Grade
Uranium Deposit January 2014
2 KIV:TSX-V | Kivalliqenergy.com
Must Be Round to Roll
Highly-Seasoned
Team
World-Class Asset
Angilak
Great Jurisdiction
Nunavut
The Right Corporate Structure
Kivalliq is Very Well-Positioned to Advance Angilak
Strong Shareholder Base − Lumina Capital: 17%
Great Access to Capital − $39.5mm raised since
Fukushima
Solid Balance Sheet − C$2mm working cap.
Solid Track Record
Regional Experience
Aggressive but Disciplined Growth
Recent Board Additions Support Growth Strategy
‘District Scale Potential’
Large, High-Grade Inferred Resource:
− 43.3mm lbs @ 0.69% U3O8
Near-surface zones
Positive Initial Met Tests
Mining friendly, Pro-U Several Mines &
Development Projects Community Engagement
a Priority of KIV Areva’s Kiggavik Lays
Groundwork for Angilak
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0.0
1.0
2.0
3.0
4.0
5.0
$0.00
$0.20
$0.40
$0.60
$0.80
$1.00
2010 2011 2012 2013 2014
KIV Volume (RHS)
KIV (LHS)
TSX-V Repriced to KIV (LHS)
The Right Corporate Structure
KIV Price / Volume (2010 – Present)
Angilak 43.3mm lbs U3O8
Baker Basin
Price (C$/Share) Volume (mm)
Capital Structure (As at January 16, 2014)
Ownership Uranium Portfolio Recent Financings
Q2 2013: C$4.5mm15mm Units @ $0.30(1 Share + 1 Warrant @ C$0.50)
Q2 2012: C$11.6mmFT: 16.8mm @ $0.50NFT: 7.1mm @ $0.45
Q2 2012: C$9.5mmFT: 6.9mm @ $0.52NFT: 13.1mm @ $0.45
Close Associates26%
Lumina Capital17%
Resource /Mining Funds
15%
Insiders5%
Retail / Other37%
Genesis
Shares Outstanding (mm) 191.0
Warrants (weighted avg strike price $0.50) (mm) 17.4
Options (weighted avg strike price $0.47)
(mm) 12.7
Fully Diluted Shares (mm) 221.1
Working Capital (C$mm) 2.0
Market Capitalization ($0.22) (C$mm) 38.21
Average Trading Volume (3 months Jan. 17) (‘000s) 171,327
Kiv Current Price (Jan. 17) (C$/share) $0.23
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Highly Seasoned Team
Uranium Exploration Leadership
Expertise added to the Board of Directors related to uranium fuel markets and uranium industry M&A Bolstered management team with finance and legal capacity Operational team continuously executes large logistical programs and successful exploration campaigns – on budget
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0
20
40
60
80
0
25
50
75
100
2010 2011 2012 2013 2014
U3O8 Inferred Resource (mm lbs, LHS)
KIV Market Cap (C$mm, LHS)
U3O8 Monthly Spot Price (US$/lb, RHS)
$9mm
$17mm$20mm
$5mm
2010 2011 2012 2013
Highly Seasoned Team – High Impact Exploration (C$mm) / (mm lbs ) (US$/lb)
KIV
Mar
ket C
ap v
s. U
3O8
Spot
&
Infe
rred
Res
ourc
e Ex
plor
atio
n B
udge
t
Inferred Resource: 14.15 mm lbs U3O8 @ 0.79%
Inferred Resource: 27.13 mm lbs U3O8 @ 0.69%
Inferred Resource: 43.3 mm lbs U3O8 @ 0.69%
KIV Mkt. Cap ~C$90mm
Fukushima
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Great Jurisdiction – Canada
Mining friendly, pro-uranium jurisdiction
Multiple projects being advanced or operated by global mining companies
Areva’s Kiggavik and Cameco’s Turqavik/Aberdeen projects in close proximity to KIV assets (NU)
Mining Friendly Jurisdiction
Community Engagement
Landmark agreement with Nunavut Tunngavik to explore for uranium on Inuit land
Community engagement is a priority with ongoing community updates, site visits and employment opportunities
Winners of environmental stewardship awards for two of the past three years
Nunavut and Saskatchewan Mining and Mineral Exploration
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Angilak Property
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U3O8(2)
mm lbs43.3 28.8 28.7 41.2 70.5 11.2 31.2 21.4 53.2 45.3 8.5 76.5 53.7 34.5 45.1 61.6 212.6
MineType OP/UG UG UG UG ISR ISR ISR UG OP UG ISR OP ISR OP OP OP OP
Location Can Can USA Slov Aus USA USA Colom Aus Mali USA Aus USA Spain Namib Peru Namib
Stage(3) Pre-PEA PEA PEA PFS FEAS PEA FEAS PEA PEA PEA Comm Cons Cons PFS PEA PEA FEAS
0.69%
0.57%
0.41%0.34% 0.33%
0.20%
0.12% 0.11% 0.09% 0.07% 0.05% 0.05% 0.05% 0.04% 0.04% 0.03% 0.02%
Angi
lak
(Kiv
alliq
)
Mat
oush
(Stra
teco
)
Roc
a H
onda
(En.
Fue
ls)
Kuris
kova
(Eur
o. U
r.)
Four
Mile
(Allia
nce)
Dew
ey B
urd.
(Pow
erte
ch)
Chu
rchr
ock
(Ur.
Res
.)
Berli
n(U
3O8)
Wes
tmor
elan
d(L
aram
ide)
Fale
a(D
enis
on)
Lost
Cre
ek(U
r-En
ergy
)
Wilu
na(1
)(T
oro)
Lanc
e(P
enin
sula
)
Sala
man
ca(B
erke
ley)
Om
ahol
a(D
eep
Yel.)
Kihi
tian
Gro
up(M
acus
ani)
Etan
go(B
anne
rman
)
World Class Asset – Comparable Projects
Angilak is The Highest Grade Compliant Resource Not Controlled by a Major
Comparable Independent Uranium Projects Ranked by Grade (%U3O8)
Underground
Open Pit
ISR
Source: Company technical reports, filings, press releases and investor presentations. Notes: (1) Wiluna PF Lake Maitland transaction (2) Compliant 43-101 or JORC total resource (3) Indicates completed study or current phase of development. “PEA” = Preliminary Economic Assessment; “PFS” = Pre Feasibility; “FEAS” = Feasibility; “Comm” = Commissioning; “Cons” = Construction
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Geopolitical Risk (Political, Social & Infrastructure)
Comparable Project Evaluation Framework Illustrative Comparable Project Evaluation Matrix
Res
ourc
e Q
ualit
y (D
epth
, Gra
de &
Res
ourc
e Si
ze)
Hig
her
Low
er
Higher Lower
U3O8 Grade: <0.25%
U3O8 Grade: 0.25-0.5%
U3O8 Grade: >0.5%
Ball Size Represents Total Resource Size
Angilak
Matoush
Roca Honda
Kuriskova
Four Mile
Dewey Burdock
Churchrock
Berlin
Westmoreland
Falea
Kihitian
Lost Creek
Wiluna
Lance
Salamanca
Omahola
Etango
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-96 -113 -122-80
-40
0
40
150
175
200
225
250
275
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
SupplyDemand
Conceptual Angilak Timeline – ‘Impeccable Timing’
Surplus Deficit
Glo
bal U
Su
pply
/ D
eman
d(1)
U
Sup
ply
Bal
ance
(1)
Angilak(3) Conceptual
Dev. Timeline
Deficit
Kiggavik(2)
Proposed Dev. Timeline
(mm
lbs
U3O
8)
(mm
lbs
U3O
8)
Supply Deficit
Permitting / Licensing Construction Production
Construction Production PEA / Pre-Feas / Feas / Permitting
Notes: (1) Uranium supply / demand forecast as per Raymond James equity research. (2) As per Areva’s publicly stated development timeline for Kiggavik. (3) Not NI-43-101 compliant, conceptual and for illustrative purposes only. Conceptual outline based on permitting timelines as per Nunavut Impact Review Board process, and subject to obtaining required approvals, permits, and financing and receiving positive PEA, PFS, FS, etc.
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Genesis Property, Saskatchewan – A Growing Project Portfolio Saskatchewan: A Prolific
Uranium District Established infrastructure
Politically supported
Produces15% of the world’s annual supply of uranium
Genesis Property
362,789 acres
25 kilometres northeast of the Eagle Point uranium mine and Rabbit Lake mill
36 mineral claims strategically staked along 90 kilometres of prospective geological and structural settings
Covers 28 documented historic uranium showings and several boulder trains
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$0.78
$0.0
$0.5
$1.0
$1.5
$2.0$6.23
$38
$0
$30
$60
$90
$120
0.69%
0.0%
0.2%
0.4%
0.6%
0.8%
43.3
0
50
100
150
200
250
Comparable Analysis – Junior Explorers and Developers Equity Value (C$mm) Total Resource (mm lbs U3O8)
Total Resource Grade (% U3O8) EV / Total Resource (C$/lb U3O8)
Source: Company technical reports, filings, press releases and investor presentations. As at January 8, 2014
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EV / Resource (C$/lb U3O8)
$0.78/lb
Equ
ityV
alue
Ent
erpr
ise
Val
ue
Infe
rred
Res
ourc
e
U3O
8S
pot
C$38mm C$34mm43mm lbs
US$35/lb
Equ
ityV
alue
Ent
erpr
ise
Val
ue
Infe
rred
Res
ourc
e
U3O
8S
pot
C$95mmC$87mm
14mm lbs
US$60/lb
Fukushima Impact Kivalliq Pre-Fukushima
March 2, 2011
Since Fukushima, KIV’s inferred resource is up 206% but its EV/lb valuation is down 87%
Kivalliq Today January 8, 2014
EV / Resource (C$/lb U3O8)
$6.12/lb
-87%
-60% -61% -42% +206%
Source: Company filings. As at January 8, 2014
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38
15
10
5
2
2
0
0 5 10 15 20 25 30 35 40
Asia
Central &E. Europe
South Asia& Mid. East
NorthAmericaSouth
AmericaWesternEurope
Africa
121
118
98
68
25
4
2
0 20 40 60 80 100 120 140
NorthAmericaWesternEurope
Asia
Central &E. Europe
South Asia& Mid. East
SouthAmerica
Africa
On average, a 1 MW reactor requires in excess of 400k lbs U3O8/year
Uranium Market Outlook – Demand-Side Worldwide Nuclear Landscape Top 10 Nuclear Generating Countries
436 Operating Reactors Worldwide 72 Reactors Under Construction Worldwide
(2012, Bln kWh) 436 operational reactors in 30 countries
72 reactors under construction in 14 countries
372,326 MW total net installed capacity
12% of world’s electricity production from nuclear
13 countries with ¼ or more of electricity from nuclear
0
200
400
600
800
Source: International Atomic Energy Agency, Nuclear Energy Institute
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Canadamm lbs %
Total 23.5 15.5%
Kazakhstanmm lbs %
Total 56.5 37.2%
Worldwide U3O8 Production and Operating Reactors
Source: Raymond James, International Atomic Energy Agency Notes: (1) % represents portion of 2013E primary supply of 152mm lbs. In addition to numbers displayed above, 6.7mm lbs (4.4%) are produced in other countries
Australiamm lbs %
Total 16.6 10.9%
FSU (ex. Kazakhstan)mm lbs %
Russia 8.1 5.3%Other NIS 9.0 5.9%
Total 17.1 11.3%
USAmm lbs %
Total 4.6 3.0%
2
7
58
16
8
2
4
19
19
6
21
9 6
4 4
2
1
1 5
10
2 15
1
100
2
33
1 3
23
50
2
2013E Primary U3O8 Production(1)
Nuclear Reactors in Operation
Africamm lbs %
Niger 11.6 7.6%Namibia 10.9 7.2%Other 4.4 2.9%
Total 26.9 17.7%
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Overview of Uranium Producing Regions Comments / Considerations Geopolitical
Stability U3O8 Prod.
(mm lbs / %)(1) % of Known Resources(2)
Operating Reactors(3)
Australia
• Significant producer with largest known resources • Long history of uranium mining but highly political issue • History of anti-uranium policies: “no new mine policy” • Queensland & WA recently lifted production moratoriums • Production moratoriums still in place in NSW & Victoria • Aboriginal issues a consideration
Good 16.6mm 10.9% 31% 0
U.S.
• Production from 1 conventional mill and several ISL operations • Consumes 50mm lbs / year, produces 5mm lbs / year - HEU
provided ~45% of supply • National security / energy independence concerns may bode
well for related policy • Moratoriums in Virginia, Navajo Reservations, Grand Canyon
Good 4.6mm 3.0% 4% 100
Africa • Production concentrated in Niger and Namibia • Strong political support in Namibia • Recent extremist activity in Niger places uncertainty on supply • Typically large, low-grade deposits
Fair/Poor 26.9mm 17.7% 18% 2
FSU
• Largest producing region with significant known resources • Highly concentrated, largely controlled by Russian State and
subject to supply management • Kazakhstan responsible for substantially all worldwide growth in
primary supply over last 5 years
Fair/Poor 73.6mm 48.5% 25% 68
Canada
• Significant producer with long history of uranium mining • Home to world’s largest mine and highest grade deposits • Consistent and transparent permitting regimes • Moratoriums in Quebec, BC and Nova Scotia • First Nations issues a consideration
Good 23.5mm 15.5% 9% 19
Notes: (1) 2013E U3O8 production as per Raymond James, WNA. (2) 2011 reasonably assured resources plus inferred resources from OECD as per NEA & IAEA. (3) As per IAEA
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0
50
100
150
200
250
300
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
New MinesExisting MinesSecondary SupplyDemand
Uranium Market Outlook – Supply-Side Themes (m
m lb
s U
3O8)
Glo
bal U
rani
um
Supp
ly /
Dem
and 2020: 16mm lbs Deficit
2025E: 52mm lbs Deficit
Rec
ent S
uppl
y-Si
de T
hem
es Supply-side impact of post-Fukushima uranium price weakness has really begun to rear its head
− Until recently, planned development projects have been main victims - Trekkopje, Imouraren, ODX, etc. − However, late November saw significant reduction of production guidance form existing mines – Kazatomprom,
ARMZ/Uranium One, Energy Fuels, etc. − Continued supply management and growth curtailment will be a prevailing theme in current price environment
Anemic mining equity capital markets also contributing to supply-side uncertainty − Delayed projects being pushed back further − Juniors' ability to progress exploration and development projects severely impaired
Forecasted supply deficit starting in 2017 and growing rapidly − Deficit widens to 16mm lbs by 2020 and 52mm lbs by 2025 − Further mine closures and recent events could see forecasted supply deficits being brought forward to 2015 or 2014
− Incident at Rio Tinto’s Ranger Mine could lead to prolonged or indefinite closure − Potential for Kayelekera and Rössing to fall victim to current price environment
Japanese inventory reduction and timing on reactor restarts remains the main near-term issue Source: Raymond James, Kivalliq
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Disclaimer
This presentation does not constitute an offer to sell or solicitation of an offer to buy any securities of Kivalliq Energy Corporation. The information in this presentation related to the mineral resource estimate has been approved by Robert Sim, P.Geo, of SIM Geological Inc. who is an independent Qualified Person as defined under National Instrument 43‐101. Jeff Ward, P.Geo, President of Kivalliq and a Qualified Person for the Company has reviewed and approved the information contained in this presentation and related news releases. FORWARD LOOKING STATEMENTS This presentation contains "forward-looking statements". These forward-looking statements are made as of the date of this presentation and Kivalliq Energy Corporation does not intend, and does not assume any obligation, to update these forward-looking statements. Forward-looking statements include, but are not limited to, statements with respect to the timing and amount of estimated future exploration, success of exploration activities, expenditures, permitting, and requirements for additional capital and access to data. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such factors include, among others, risks related to actual results of current exploration activities; changes in project parameters as plans continue to be refined; the ability to enter into joint ventures or to acquire or dispose of property interests; future prices of mineral resources; accidents, labour disputes and other risks of the mining industry; ability to obtain financing; and delays in obtaining governmental approvals or financing.
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Contact
Kivalliq Energy Corporation #1020 - 800 W Pender Street, Vancouver, BC V6C 2V6
www.kivalliqenergy.com
Reesa Meltzer, Senior Administrator ++604-646-8361 or [email protected]