lawrence roulston, resource opportunities - presented at
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Lawrence Roulston Editor
Resource Opportunities & CIS, Metallica Development Fund
LAWRENCE ROULSTON
30 Years in the Mining Industry Geologist Senior executive Mining analyst Expert witness in legal matters Expert guest on TV & radio Speaker at investment and mining events world-wide
Resource Opportunities Newsletter Independent, subscriber-supported newsletter Impressive 13-year track-record Due diligence includes site visits
Metallica Development Fund Portfolio of carefully selected emerging companies Professionally managed
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$2.4
$1.1 $1.4 $2.4
$4.1
$6.1
$7.9
$11.1
$5.5 $5.0
$9.8 $10.1
$4.7
$0
$2
$4
$6
$8
$10
C$Bi
llion
s Toronto Venture Exchange Total Financings
Source: The Toronto Stock Exchange; ResOpp Publishing for 2012.
ATNA RESOURCES (ATN.TO)
6
$0.80
$0.90
$1.00
$1.10
$1.20
$1.30
J J A S O N D
BEAR CREEK MINING (BCM.V)
7
$2.00
$2.20
$2.40
$2.60
$2.80
$3.00
$3.20
$3.40
$3.60
$3.80
J J A S O N D
BELO SUN MINING (BSX.TO)
8
$1.00
$1.10
$1.20
$1.30
$1.40
$1.50
$1.60
$1.70
J J A S O N D
GALWAY RESOURCES (GWY.V)
9
$1.00
$1.10
$1.20
$1.30
$1.40
$1.50
$1.60
$1.70
J J A S O N D
HULDRA SILVER (HDA.V)
10
$0.95
$1.05
$1.15
$1.25
$1.35
$1.45
$1.55
$1.65
J J A S O N D
INTER-CITIC MINERALS (ICI.TO)
11
$0.80
$1.00
$1.20
$1.40
$1.60
$1.80
$2.00
J J A S O N D
NEWSTRIKE CAPITAL (NES.V)
12
$1.20
$1.40
$1.60
$1.80
$2.00
$2.20
$2.40
$2.60
J J A S O N D
SILVER WHEATON (SLW.TO)
13
$25
$28
$30
$33
$35
$38
$40
J J A S O N D
VIRGINIA MINES (VGQ.TO)
14
$8.50
$9.00
$9.50
$10.00
$10.50
$11.00
J J A S O N D
SANTACRUZ SILVER MINING (SCZ.V)
15
$0.75
$0.95
$1.15
$1.35
$1.55
$1.75
$1.95
$2.15
$2.35
J J A S O N D
• Some companies are hoping to make a discovery: High risk / high reward
• Other companies are advancing established deposits: Better balance of risk and potential reward
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JUNIOR RESOURCE COMPANIES ARE NOT A SINGLE ASSET CLASS
GOLD PRICE IS TRENDING HIGHER
Gold has risen six-fold since 2001.
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Gold 10 Years
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
$1,800
$2,000
02 03 04 05 06 07 08 09 10 11 12
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THE CURRENT SILVER PRICE IS 6-TIMES THE 2001 PRICE
Silver 10 Years
$0
$10
$20
$30
$40
$50
02 03 04 05 06 07 08 09 10 11 12
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COPPER IS 6-TIMES HIGHER THAN THE LOW OF 2001
Copper 10 Years
$0.00
$1.00
$2.00
$3.00
$4.00
02 03 04 05 06 07 08 09 10 11 12
Even with an uncertain economic outlook, metal demand is rising:
• Europe - 0.3% decline • America + 1.7% growth • China(the biggest metal consumer) + 7.0% growth • India & other emerging economies + Continued growth • Global Outlook = Rising demand for metals
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METAL PRODUCTION CONTINUES TO GROW
GOLD PRODUCTION HAS LAGGED THE GOLD PRICE
0102030405060708090
100
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
01 02 03 04 05 06 07 08 09 10 11
Gol
d P
rodu
ctio
n (M
oz)
Gold Production vs. Price
Production (millions of ounces) Gold Price Source: Metal Economics Group, ResOpp Publishing
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THE AVERAGE GOLD GRADE HAS FALLEN SHARPLY
Source: CIBC World Markets & ResOpp Publishing
0
2
4
6
8
10
12
1950 1960 1970 1980 1990 2000 2010
g/t
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NEW GOLD DISCOVERIES ARE DECLINING
0
1
2
3
4
5
6
0
25
50
75
100
125
150
1992 1994 1996 1998 2000 2002 2004 2006 2008 2010
Expl
orat
ion
Spen
ding
(US$
B)
New
Fin
ds (M
oz)
Discoveries (Moz) Exploration Spending (US$B)
Source: Barrick for Exploration Spending 2012 AGM PPT & ResOpp Publishing
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WHY NOW IS THE RIGHT TIME:
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• The European situation appears to be contained.
• US growth, albeit slow, remains positive.
• New US stimulus – QE3.
• China stimulus is boosting growth.
• Selling has led to irrationally low prices.
• Valuations for high quality companies are now very low relative to fundamentals.
• Gold producers valuations returning to NAV, but juniors still at a big discount.
• Base metal companies still out of favor.
• Regardless of investor sentiment, producers are buying juniors to get reserves.
• Takeovers are happening at huge premiums: 2 recent deals at 100% above market.
Keys To Success for Resource Opportunities
• 30 years experience
• Site visits
• Meetings with management
• Extensive and ongoing due diligence
• Consistent evaluation framework
www.resourceopportunities.com
METALLICA HAS A HIGHLY EXPERIENCED MANAGEMENT TEAM
Lawrence Roulston, Chief Investment Strategist • Over 30 years of experience in the mining industry • Trained as a geologist. • Analyst with major mining companies. • Senior executive / management of junior and mid-sized resource companies.
Fund Manager – Castor Asset Management
Harold Kent, Principal of Castor Asset Management and Director of Metallica • Over 20 Years experience as a senior executive at asset management firms and
investment dealers. • Cofounder of Donville Kent Asset Management.
– Winner “Best New Fund” Canada 2009 (+88%)
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METALLICA INDEPENDENT DIRECTORS
Michael Legg, M.Sc. (Mining), P.Eng • Mineral Resources Investment Consultant – Switzerland • > 45 years’ international mineral resources experience
– exploration, mine geology & production in Africa, Ireland and Canada – resource project banking and management consulting (Canada) – mine finance and management consultant – executive management of two Canadian junior exploration companies – Present: mineral resources investment consultant, Canada and Switzerland
Martin Laidlaw • 20+ years in Offshore Fund Administration. • Director and Head of Fund Services at CIBC Bank & Trust Co. (Cayman) Ltd. Anthony Baker • Formerly Intl. Corporate Finance for UBS, NatWest, and IndoSuez Group in London. • Currently involved in capital market activities for local & overseas companies,
governments, and statutory authorities
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HIGHLY REGARDED SERVICE PROVIDERS LOOK OUT FOR INVESTOR INTERESTS
Fund Administrator Harmonic Fund Services is an independent financial services firm that specializes in the global alternative investments industry. They provide comprehensive fund services from offices in Grand Cayman, Toronto, and Geneva. Prime Broker / Custodian Bank of Montreal (BMO Capital Markets) is one of Canada’s ‘Big 6’ Schedule A banks included in the World Economic Form’s ratings is the most stable banking system for the second consecutive year. BMO also is the top rated securities research firm in Canada. Auditor As one of the global ‘Big Four’ audit firms, KPMG operates as an international network of member firms offering audit, tax and advisory services. We work closely with our clients, helping them to mitigate risks and grasp opportunities. Legal Counsel (Cayman Islands) Walkers is internationally recognised as having one of the leading offshore investment fund practices, advising many of the world's most prominent asset managers, fund promoters and institutional investors. Legal Counsel (Canada) London-based World Finance magazine named Stikeman Elliott as the 2008 Best Corporate & Commercial Team in Canada and Chambers Global identifies it as one of Canada's two top-tier Corporate/M&A practices
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METALLICA IS WELL-STRUCTURED AND WELL-SUPPORTED
Security of Investor’s Capital
The investor’s capital remains within a secure loop including the Fund Administrator (Harmonic) and the Prime Broker / Custodian (Bank of Montreal). The Investment Manager does not have access to the invested capital at any time.
Fund Administrator
Prime Broker / Custodian
Prime Broker / Custodian
Fund Administrator
Investor
SUBSCRIPTION
REDEMPTION
Trading instructions are executed by the Prime Broker.
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CONTACT INFORMATION
Metallica Development Fund 4th Floor, Cayman Corp. Centre, 27 Hospital Road, Grand Cayman KY1-1102 (416) 479-0009 [email protected] www.metallicadevelopmentfund.com Castor Asset Management Limited 15 Toronto Street, Suite # 205, Toronto, Canada M5C 2E3 (416) 479-0009 [email protected] www.castorassetmanagement.com Academy & Finance 16 Rue Maunoir CH-1211, Geneve 6, Switzerland +41 22 849 01 02 [email protected] www.academyfinance.ch
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