Financing Stages (Mining) Capital Requirements & Financing Sources Throughout Mine Lifecycle Debt Financing Stock Exchange Venture Exchange Strategic Toehold Stock Exchange Possible Acquisition by Senior Miners Internal Mine Cash Flows FINANCING EXPENDITURES $30m $60m $300m $200m $150m $50m $50m Exploration Drilling Bankable Feasibility Study Open Pit Construction Underground Construction TECHNICAL PHASE TIMELINE 2008 - 2011 2012 2013 2014 2015 2016 2017 The mining industry provides a helpful illustration on how financing requirements and sources evolve throughout a company’s lifecycle. When an exploration company starts out, it requires initial risk capital to finance its exploration drilling activities and general administrative expenses. The capital required at this stage is considered extremely risky and only a small fraction of exploration companies goes on to establish deposits with the potential to turn into operational mines. One avenue to raising early stage capital is for these companies to list on the a venture exchange. It should be noted that early stage investments into exploration companies are speculative and geared towards investors with high risk tolerance looking for exponential returns. As such, share prices of these companies can be highly volatile and swing significantly with news on recent drilling results. Once a company has successfully advanced its permitting and exploration activities, it may be able to raise capital on regular exchanges and increasingly attract private placements from strategic and institutional investors. At this stage, mining companies will require additional capital to complete their permitting and feasibility work before they can bring their projects into construction. It is not uncommon for senior mining companies to make strategic toehold investments into junior mining companies in anticipation of purchasing them if they successfully establish the feasibility of their projects. Companies at this stage usually have larger market values and more clearly defined resource deposits and project timelines, which make them more suitable for institutional and non-speculative retail investors. Nonetheless, the share prices of these companies can still be fairly volatile based on changes in underlying commodity prices and company-specific news such as completing its Preliminary Economic Assessment or Prefeasibility Study. When a company gets close to completing a bankable Feasibility Study for a project, it can start raising substantial debt and equity financing to being construction of the mine. A bankable feasibility study requires significant engineering work and clearly establishes the measured and inferred resources and proven and probable reserves of a deposit that can be economically extracted. Based on this information, lenders are typically willing to provide debt financing to projects. In addition, senior mining companies are often looking to replenish their production profiles as existing deposits are depleted, and have historically demonstrated a strong appetite for acquiring mining companies at this stage of the development process. Construction of mining projects is sometimes sequenced to go after the low hanging fruit first to establish internal mine cashflows that can help finance ongoing construction of the mine. Depending on the particular geology, construction might begin with an open pit construction to extract resources closer to the surface and later move to more costly underground construction to access resources further below ground. d Project de-risking allows for greater leverage at each phase