tsx-v · orion securities inc. •director of enwave corp, sandstorm gold andnulegacy gold charles...

Q3 2020

TSX-V

MOX

Corporate Update

w w w . m o r i e n r e s . c o m | T S X - V : M O X 2

Forward Looking Statements

Some of the statements made by Morien Resources Corp. (“Morien”) in this presentation may constitute "forward-looking information" as defined under applicable securities laws. These statements reflect Morien's currentexpectations of future revenues and business prospects and opportunities and are based on information currentlyavailable to Morien. Morien cautions that actual performance will be affected by a number of factors, many ofwhich are beyond its control, and that future events and results may vary substantially from what Morien currentlyforesees. Factors that could cause actual results to differ materially from those in forward-looking statementsinclude risks and uncertainties described in Morien’s annual information form filed with the Canadian Securitiesregulators on SEDAR (www.sedar.com). Morien cautions that its royalty revenue will be based on production bythird party property owners and operators who will be responsible for determining the manner and timing for theproperties forming part of Morien’s royalty portfolio. These third party owners and operators are also subject to riskfactors that could cause actual results to differ materially from those predicted herein including: volatility infinancial markets or general economic conditions; capital requirements and the need for additional financing;fluctuations in the rates of exchange for the currencies of Canada and the United States; prices for commoditiesincluding gold, coal and aggregate; unanticipated changes in production, mineral reserves and mineral resources,metallurgical recoveries and/or exploration results; changes in regulations and unpredictable political or economicdevelopments; loss of key personnel; labour disputes; and ineffective title to mineral claims or property. There areother business risks and hazards associated with mineral exploration, development and mining. Although Morienbelieves that the forward-looking information contained herein is based on reasonable assumptions, readers cannotbe assured that actual results will be consistent with such statements. Morien expressly disclaims any intention orobligation to update or revise any forward-looking information in this news release, whether as a result of newinformation, events or otherwise, except in accordance with applicable securities laws. Unless otherwise indicated,all dollar values herein are in C$.

w w w . m o r i e n r e s . c o m | T S X - V : M O X

Morien’s Three Pillars

Donkin Coal Mine Royalty

§ 2% to 4% production royalty

§ Operation on care and maintenance

§ Over C$300 mln spent on mine development

Black Point Aggregate Project Royalty

§ Per-tonne production royalty (undisclosed)

§ Permitted and awaiting development decision

§ Morien receiving advanced royalties

Capital Allocation Strategy

§ Strong cash position with low overhead costs

§ No debt

§ Active normal course issuer bid program

3


John P. A. Budreski

• Executive Director of Morien Resources

• 30+ years of extensive capital markets and executive management experience

• Former Head of Investment Banking for Scotia Capital. Formerly Vice Chairman of Cormark Securities Inc. and prior to that, President and CEO of Orion Securities Inc.

• Director of EnWaveCorp, Sandstorm Goldand NuLegacy Gold

Charles G. Pitcher

• 40+ years experience in operations, engineering, management and mining project development

• Former President of Wilson Creek Coal in Pennsylvania, and former President & CEO of Western Canadian Coal where he led the acquisition, development and startup of major coal projects in western Canada

John P. Byrne

• 30+ years of investment banking and corporate finance experience

• President of Petroleum Corporation of Canada Exploration Ltd., which helped finance EnerplusEnergy Services Ltd. for which Mr. Byrne served as its Vice Chairman

• Former senior executive with Levesque BeaubienGeoffrion (now National Bank Financial)

Mary C.Ritchie

• 30+ years experience in public, private and not-for-profit sectors and is a Fellow of CPA Alberta

• Director of Alaris Royalty, EnWave Corp, and IPL Plastics

• Former director of Canada Pension Plan Investment Board, Industrial Alliance Insurance, and a past member of the RBC Global Asset Management’s independent oversight committee

Board of Directors

Dawson C.Brisco

• President and CEO of Morien Resources

• 15+ years of business development and mining industry experience in a variety of roles in the bulk commodity and energy sectors

• Director of the Mining Association of Nova Scotia

• Holds a Honors B.Scin Geology from Saint Mary’s University in Halifax, Nova Scotia

4


Morien’s Current Focus and Strategy

Dedicate all available resources to the restart of the Donkin Mine;

Continue increasing individual shareholder value in Morien through its normal course issuer bid program;

Drive for reinstatement of the recently suspended dividend program when the future of the Donkin Mine is better understood; and

Continue evaluation of royalty acquisition opportunities when the impact of COVID-19 and the status of the Donkin Mine are better understood.

1.

2.

3.

4.

5


Overhead Costs (G&A) Down 38%

$200,000

$400,000

$600,000

$800,000

$1,000,000

$1,200,000

2013 2020

Corporate Overhead Costs (G&A)

2019

6


Common Shares Down 13% Since 2015

50,000,000

52,500,000

55,000,000

57,500,000

60,000,000

2015 2020

Total Common SharesOutstanding

2019

7


Management Ownership Up 10% Since 2013

0%

2%

4%

6%

8%

10%

12%

14%

16%

2013 2020

Management & DirectorsOwnership

2019

8


$3,300,000

$810,000 $110,000

$940,000 $400,000

($660,000)

($530,000)

($750,000) ($135,000)$3,485,000

01/0

1/20

19Do

nkin

Roy

alty

Blac

k Poi

nt …

Land

Sale

Optio

n Pr

ocee

ds

G&A

Divid

ends

NCIB

Proj

ect …

12/3

1/20

19

$0

$1,000,000

$2,000,000

$3,000,000

$4,000,000

$5,000,000

$6,000,000

Increase Decrease Total

2019 Cash Flow SummaryW

orkin

g Cap

ital

01/01

/2019

Donkin

Roy

alty

Asset S

ale

Divide

nds

NCIBPr

oject

Genera

tion

Wor

king C

apita

l

12/31

/2019

Option

Proc

eeds

Black P

oint R

oyalt

y

Overh

ead C

osts

(G&A)

9


The Donkin Mine

Kameron Collieries Donkin Mine Workforce

10


Donkin Snapshot

484 Mt Coal resource

25+ years Mine life

>$300 mln Cline Group’s investment into Donkin

3.0 Mt Permitted annual sales volume

30 km Distance to coal export terminal

2% to 4% Morien’s scaled top line production royalty

Kameron Collieries(subsidiary of The Cline Group)

Owner / Operator

11


Recent Events at the Donkin Mine

12

Localized roof fall occurrence. NS regulator issues Kameron a stop work order. Kameron permitted to resume production following day.

Second roof fall caused by the same, poor roof geology encountered in the first fall. NS regulator reissues Kameron a stop work order.

Kameron makes decision to cease operations and places Donkin on Care and Maintenance.

US regulators not able to conduct Donkin site visit due to COVID-19 related travel restrictions. Stop work order remains in effect.

Note: Further details regarding latest developments at the Donkin Mine can be found within the Company’s Q1-2020 MD&A, accessible by clicking here.

January February March

Export vessel sent to customer in Asia

Export vessel sent to customer in Mediterranean

Weekly shipments to domestic power utility



Reg

ulat

ory

Sum

mar

yC

oal S

ales

Sum

mar

y

NS regulators reliant upon US mine regulator (MSHA) to visit Donkin Mine to advise on Kameron’s roof bolting program. Stop work order remains in effect until MSHA visitation.

http://morienres.com/wp-content/uploads/2020/04/CheckCode.do-6.pdf


§ The Donkin Mine has not been sealed and no mining equipment has been removed from the site.

§ The Mine is currently idling for an indeterminate period of time.

§ The timeline for the assessment and possible resolution of the situation at Donkin is unknown and will be contingent on Kameron’s resolve to recommence operations.

§ Morien’s immediate focus and strategy is on exploring options for the restart of the Mine.

§ Morien’s primary objectives include addressing misguided safety concerns at the Mine and to emphasize Donkin’s significant contribution to the local economy.

Recent Events cont.


Global Coal Markets

Donkin Mine, Q1 2020


Coal Prices

15

(1) Source: S&P Global Platts Daily Publication of International Coal Markets

$0

$50

$100

$150

$200

2012

-08-0

120

12-11

-01

2013

-02-0

120

13-05

-01

2013

-08-0

120

13-11

-01

2014

-02-0

120

14-05

-01

2014

-08-0

120

14-11

-01

2015

-02-0

120

15-05

-01

2015

-08-0

120

15-11

-01

2016

-02-0

120

16-05

-01

2016

-08-0

120

16-11

-01

2017

-02-0

120

17-05

-01

2017

-08-0

120

17-11

-01

2018

-02-0

120

18-05

-01

2018

-08-0

120

18-11

-01

2019

-02-0

120

19-05

-01

2019

-08-0

120

19-11

-01

2020

-02-0

120

20-05

-01

$ USD / tonne

8-Year Price Chart for Donkin Quality Metallurgical and Thermal Coal (1)

High Vol B Metallurgical Coal (FOB US East Coast)

Thermal Coal (CIF ARA 6000 kcal/kg NAR)


Global Coal Market Resilience

Metallurgical Coal (1) Thermal Coal (1)

Pre COVID-19 China trade dispute and lack of strong global growth resulted in low steel output and thus depressed met coal prices.

Glut of Liquified Natural Gas from USA and Russia primary cause for a significant drop in thermal coal prices.

During COVID-19 Economic growth halts, further reducing steel and met coal demand.

Market disruption as lockdowns sap global electricity use causing prices to drop further.

Short Term Outlook

Construction and manufacturing will be among the first sectors to re-start operations, which should jumpstart steel demand toward year-end and into 2021.

China, South Korea, and Japan are steering recovery funds into struggling coal-focused state financers who are investing in coal developments in developing countries.

Long Term Outlook

By 2050, steel use is projected to increase by 1.5x to meet the needs of our growing population.

Approximately 500 GW of coal power capacity is planned or under construction around the world, at a cost of $640 bln.

Competition New technologies to replace blast furnace technology and demand formetallurgical grade coke (i.e. hydrogen replacement) are decades fromimplementation and may never be commercially viable.

Wood Mackenzie estimates 150 GW of wind/solar projects across Asia Pacific could be delayed/cancelled over the next 5 years as the downturn increases financing costs and draws focus toward more pressing economic priorities like access to cheap electricity.

16

(1) Source: Internal company research


Metallurgical Coal Market Snapshot

§ Metallurgical coal is an essential ingredient in the manufacturing of 70% of the world’s steel output

§ Prior to the COVID-19 pandemic, the consensus view was that global steel demand would grow by ~ 1% annually through 2025

§ The projected decline in global GDP of 3% to 6% (per IMF) is likely to take a significant toll on steel production and consumption in 2020

§ Current analyst consensus is that seaborne metallurgical coal demand will decline by -11% in 2020 and increase broadly in line with crude steel production thereafter

§ Supply rationalization should serve to counterbalance some of the recent demand destruction;- In mid-April, more than 50% of U.S. metallurgical coal supply was idle (25-30 mlnT)

- Some mines have restarted, but other closures are likely to prove permanent

- In Australia, expansion projects are being re-evaluated and pushed out, which should help support a healthy supply/demand rebalancing in the years ahead

17


Thermal Coal Divided in the Press

North American PressAsia Pacific Press

18


Thermal Coal Reality - Full Steam Ahead

Source: Source: Global Energy Monitor (data as of January 2020)

19


Black Point Aggregate Project

Owner

Vulcan Materials Company; largest aggregate producer in North America

Status

Environmental permit granted in 2017; production decision deadline extended to April 2022

Terms

Per-tonne production royalty (terms undisclosed)

Lifespan

50+ years

Anticipated Royalty Revenue

$250k to $750k per annum

Advanced Quarterly Royalty Payment (8)

$25k quarterly payments commenced in 2018

Milestone Payment

$400k payment pending from Vulcan

Black Point project site

Rendering of Black Point site layout

20


Black Point Update

§ In March 2020, Vulcan applied for a second two-year extension for Black Point and was granted approval by the Nova Scotia provincial government in April.

§ According to the conditions of the extensions, Vulcan must within two years of the date of the extension (April 2022), commence work on Black Point unless granted a further written extension by the Nova Scotia provincial government.

§ Vulcan maintains a strong interest in Black Point but has indicated the target market conditions for crushed stone from the Black Point location are still short of their original expectations.

§ Frank Lieth, Vulcan’s Vice President of Black Point Aggregates Inc., a wholly owned subsidiary of Vulcan, has stated that: “We are not going anywhere - we remain very much committed to the community, stakeholders, and agreements made.”

§ Morien receives an advanced royalty payment of $25k per quarter from Vulcan (1).

21

(1) All advanced payments are recorded by Morien as unearned revenue and will be credited against future production royalties from Black Point.


Aggregates Market Returning to Normal Demand

Aggregate demand remains below “normal” historic levels

0

500

1000

1500

2000

2500

3000

3500

19911992199319941995199619971998199920002001200220032004200520062007200820092010201120122013201420152016201720182019

Total US Aggregates Production; 1991-2019 (1)(includes Crushed Stone and Sand & Gravel)

BillionMetric Tons

(1) Source: U.S. Geological Survey (USGS), March 2020

22


NCIB Share Purchases(millions)

NCIB Purchase Price

NCIB - Building Wealth for our Shareholders

Monthly NCIB Purchases Since 2015(12.4 mln shares or 21% of total shares outstanding)

$0.00

$0.10

$0.20

$0.30

$0.40

$0.50

$0.60

$0.70

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

Mar-15

Apr-15

May-15

Jun-15

Jul-15

Aug-15

Sep-15

Oct-15

Nov-15

Dec-15

Jan-16

Feb-16

Mar-16

Apr-16

May-16

Jun-16

Jul-16

Aug-16

Sep-16

Oct-16

Nov-16

Dec-16

Jan-17

Feb-17

Mar-17

Apr-17

May-17

Jun-17

Jul-17

Aug-17

Sep-17

Oct-17

Nov-17

Dec-17

Jan-18

Feb-18

Mar-18

Apr-18

May-18

Jun-18

Jul-18

Aug-18

Sep-18

Oct-18

Nov-18

Dec-18

Jan-19

Feb-19

Mar-19

Apr-19

May-19

Jun-19

Jul-19

Aug-19

Sep-19

Oct-19

Nov-19

Dec-19

Jan-20

Feb-20

Mar-20

Apr-20

May-20

Shares Purchased/Cancelled Weighted Average Share Price

23


Nov 9; Morien starts trading on

TXS-V

Sold USA land holdings for $415k

2012 2013 2014 2015 2016 2017 2018 2019

Negotiated Donkin coal offtakeLOI with highly credible buyer

Morien’s Record of Deliveries

Monetized Black Point for $1.8 mln & 50 year production royalty

Waived ROFR on sale of Glencore’s 75% Donkin interest in favour of The Cline Group

Completed financing for $1.4 mln at $0.20 per share

Signed Agreement with Cline for $5.5 mln and 2%-4% production royalty

Completed financing with Cline Group for $1 mln at $0.30

Received first royalty payment from Yellow Giant gold project

Received TSX-V approval to make Normal Course Issuer Bid

Closed Cash & Royalty Transaction for Donkin, and received $2 mln on closing

Submitted Environmental Impact Statement for Black Point

Reduced shares outstanding and Cline becomes 10% shareholder

Received first royalty payment from Cline

Played out land reversion strategy in USA resulting in retention of 1,045ac

Share capital re-org to remove small & odd-lot shareholders

Adopted Share-holder Rights Plan

Cline commences production at Donkin Coal Mine

Received $400k payment from Vulcan

Black Point receives positive permitting decision

Received first min. royalty payment from Vulcan

Received $1.5 mln milestone payment from Cline

Announced inaugural dividend and initiated quarterly dividend policy

Sold remaining US land holdings

for $935k

Purchased/cancelled 20% of shares outstanding since

2015 as part of NCIB

Received $322k in royalties for

Q4-18

Renewed Shareholder Rights Plan

Renewed Normal Course Issuer Bid

24


MOX - Own it for These Reasons

MOX - Top-tier royalty on a premier metallurgical and thermal coal mine

MOX - Significant re-rating potential on restart of the Donkin Mine

MOX - Long life royalties

MOX - Continued share buy backs

MOX - Coal demand will remain robust

MOX - Strong balance sheet with no debt

25


TSX-V: MOX

tsx-v · orion securities inc. •director of enwave corp, sandstorm gold andnulegacy gold charles...

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