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TRANSCRIPT
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VRIC 2020January 19th, 2020 / Workshop 5
Presented by Kai Hoffmann, CEO
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▪ 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
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J U N I O R M I N I N G M A R K E T
CAD financingCAD market cap
3
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Weighted Index Factors:1. Total $s of financings
opened
2. Percentage of broker participation
3. Total # of deals opened
4
www.Oreninc.com
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5
Collaboration with PDAC
Publication at PDAC Conference
Special Focus: Financings of companies with sub C$ 100mn market cap
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• 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
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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
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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%
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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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10
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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11
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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12
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%
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13
“HOW YOUR INVESTMENT IS KILLING THE INDUSTRY”
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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
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15
Dow Jones: +18.8%S&P500: +24.7%Microsoft: +55.1%Tesla: +68.9%Apple: +103.3%
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16
Advantages of ETFs▪ Managed by a fund manager with industry
expertise & qualifications
▪ Spreading your investment dollars wider
16
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$5.6bn)
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17
Grass roots companies struggling to raise funds
Deal makers:Become immediately ETF relevant
594 financings below C$ 1mn Average market cap: C$ 9mn
471 financings above C$ 1mnAverage market cap: C$ 67mn
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18
Dow Jones: +18.8%S&P500: +24.7%
GDX: +39.9%GDXJ: +39.3%
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19
Gold: 19.6%
GDX: +38.9%GDXJ: +38.2%
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20
Gold: 19.6%GDX: +38.9%GDXJ: +38.2%
SilverCrest: +87.7%AMEX Expl.: +188.5%Great Bear: +206.9%
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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
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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
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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 $s raised 2011 - 2019
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20202 Bought deals in week 1
2019Bought deals only in week 8
Source: Oreninc 24
Since May: 62 & 53
216240
1008384
98
4768
0
50
100
150
200
250
300
2016 2017 2018 2019
# of Brokered Deals # of Bought Deals
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Source: Oreninc
*includes Common & Flow-Through, ex Oil & Gas & Frack Sand 25
Jan to Apr: 307May to today: 770
1440 1485
1181 1205
1008
14851397
10051077
0
200
400
600
800
1000
1200
1400
1600
2011 2012 2013 2014 2015 2016 2017 2018 2019
Total # of Deals2011 - 2019
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Source: Oreninc*includes Common & Flow-Through, ex Oil & Gas & Frack Sand 26
2019
595 deals< C$ 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
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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
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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
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@oreninc
@oreninc
@oreninc
Youtube.com/oreninc
Visit our website at:oreninc.com
Kai HoffmannCEO, OrenincE: [email protected]: +1 604 687 3520 ext. 227
Subscribe to our newsletter at:oreninc.com/subscribe
29
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30Source: PDAC
Application of various federal, provincial and mineral exploration tax credits
Share price
premiums over
40%
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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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32
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
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