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Financing Mining Projects in South America. Simion S. Candrea Mining Investment Banking. MineSouthAmerica: Focus on Colombia Seminar. 17 June 2010.

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Presentation Transcript

Financing Mining Projects

in South America

Simion S. Candrea

Mining Investment Banking

MineSouthAmerica: Focus on Colombia Seminar

17 June 2010


This presentation was prepared exclusively for the benefit and internal use of the Jennings Capital client whom it is directly addressed and delivered (including such client’s subsidiaries, the “Company”) in order to assist the Company in evaluating, on a preliminary basis, the feasibility of a possible transaction or transactions and does not carry any right of publication or disclosure, in whole or in part, to any other party. This presentation is for discussion purposes only and is incomplete without reference to, and should be viewed solely in conjunction with, the oral briefing provided by Jennings Capital. Neither this presentation nor part of its contents may be disclosed or used by any other purpose without the prior written consent of Jennings Capital.

The information in this presentation is based upon any management forecasts supplied to us and reflects prevailing conditions and our views on this date, all of which are accordingly subject to change. Jennings Capital’s opinions and estimates constitute Jennings Capital’s judgment and should be regarded as indicative, preliminary and for illustrative purposes only. In preparing this presentation, we have relied upon and assumed, without independent verification, the accuracy and completeness of all information available from public sources or which was provided to us by or on behalf of the Company or which was otherwise reviewed by us. In addition, our analyses are not and do not purport to be appraisals of the asset, stock, or business of the Company or any other entity. Jennings Capital makes no representations as to the actual value which may be received in connection with neither a transaction nor the legal, tax or accounting effects of consummating a transaction. Unless expressly contemplated hereby, the information in this presentation does not take into account the effects of a possible transaction or transactions involving an actual or potential change of control, which may have significant valuation and other effects.

Jennings Capital’s policies prohibit employees from offering, directly or indirectly, a favorable research rating or specific price target, or offering to change a rating or price target, to a subject company as consideration or inducement for the receipt of business or compensation. Jennings Capital also prohibits its research analysts from being compensated for involvement in investment banking transactions except to the extent that such participation is intended to benefit investors.

Jennings Capital Inc. and its affiliates do not provide tax advice. Accordingly, any discussion of tax matters included herein (including any attachments) is not intended or written to be used, and cannot be used, in connection with the promotion, marketing or recommendation by anyone not affiliated with Jennings Capital of any of the matters addressed herein or for the purpose of avoiding tax related penalties.

This presentation does not constitute a commitment by Jennings Capital to underwrite, subscribe for or place any securities or to extend, arrange or provide any other services.


Financing mining projects in colombia south america
Financing Mining Projects in Colombia/ South America and internal use of the Jennings Capital client whom it is directly addressed and delivered (including such client’s subsidiaries, the “Company”) in order to assist the Company in evaluating, on a preliminary basis, the feasibility of a possible transaction or transactions and does not carry any right of publication or disclosure, in whole or in part, to any other party. This presentation is for discussion purposes only and is incomplete without reference to, and should be viewed solely in conjunction with, the oral briefing provided by Jennings Capital. Neither this presentation nor part of its contents may be disclosed or used by any other purpose without the prior written consent of Jennings Capital.

Presentation Highlights

Investing in Colombian: Rationale

  • Investing Rationale:

    • Why Colombia

  • Financings Projects/ Companies in Colombia

    • Mechanisms

    • Recent capital markets trends

    • Future

  • Jennings Capital Inc./ Case Study: Greystar Resources

  • Jurisdiction and mining legislation

  • One of the most underexplored mineral regions

  • Stable democracy for over 60 years

Accessing International Capital Markets

  • Listing on the TSX/ TSX V: IPO, RTO

  • Straight Equity Financings

  • Project Financings: Debt, Equity, Exotic

  • Capital providers: individual & institutional investors, strategic partners, supranationals

Jennings Capital Inc.

  • Independence

  • Full service investment dealer

  • Expertise in mining

  • Partnership model

3


Why Invest in Colombia? and internal use of the Jennings Capital client whom it is directly addressed and delivered (including such client’s subsidiaries, the “Company”) in order to assist the Company in evaluating, on a preliminary basis, the feasibility of a possible transaction or transactions and does not carry any right of publication or disclosure, in whole or in part, to any other party. This presentation is for discussion purposes only and is incomplete without reference to, and should be viewed solely in conjunction with, the oral briefing provided by Jennings Capital. Neither this presentation nor part of its contents may be disclosed or used by any other purpose without the prior written consent of Jennings Capital.

Source: “Invest in Colombia”; Thomson Reuters

4


Doing Business in Colombia and internal use of the Jennings Capital client whom it is directly addressed and delivered (including such client’s subsidiaries, the “Company”) in order to assist the Company in evaluating, on a preliminary basis, the feasibility of a possible transaction or transactions and does not carry any right of publication or disclosure, in whole or in part, to any other party. This presentation is for discussion purposes only and is incomplete without reference to, and should be viewed solely in conjunction with, the oral briefing provided by Jennings Capital. Neither this presentation nor part of its contents may be disclosed or used by any other purpose without the prior written consent of Jennings Capital.

  • Colombia - the most business friendly country in Latin America 2010 (The World Bank - “Doing Business Report”)

  • Colombia - named as a Top 10 reformer for the last 4 years

  • From 2007 to 2010, Colombia improved 42 positions, reaching 37th in the ranking of 181 countries

Source: World Bank “Doing Business 2010 Report”

5


Investor Protection in Colombia and internal use of the Jennings Capital client whom it is directly addressed and delivered (including such client’s subsidiaries, the “Company”) in order to assist the Company in evaluating, on a preliminary basis, the feasibility of a possible transaction or transactions and does not carry any right of publication or disclosure, in whole or in part, to any other party. This presentation is for discussion purposes only and is incomplete without reference to, and should be viewed solely in conjunction with, the oral briefing provided by Jennings Capital. Neither this presentation nor part of its contents may be disclosed or used by any other purpose without the prior written consent of Jennings Capital.

Colombia Ranks No.1 in Latin America that Best Protect Investors*

*Ranking made up by 183 countries

Source: World Bank “Doing Business 2010 Report”

6


Colombia is a Focus for TSX/ TSX-V Mining Companies and internal use of the Jennings Capital client whom it is directly addressed and delivered (including such client’s subsidiaries, the “Company”) in order to assist the Company in evaluating, on a preliminary basis, the feasibility of a possible transaction or transactions and does not carry any right of publication or disclosure, in whole or in part, to any other party. This presentation is for discussion purposes only and is incomplete without reference to, and should be viewed solely in conjunction with, the oral briefing provided by Jennings Capital. Neither this presentation nor part of its contents may be disclosed or used by any other purpose without the prior written consent of Jennings Capital.

TSX: 5 cos, 11 props

TSXV: 6 cos, 24 props

TSX: 7 Co’s, 21 Different Properties

TSXV: 9 Co’s, 17 Different Properties

TSX: 10 cos, 22 props

TSXV: 10 cos, 26 props

TSX: 7 cos, 23 props

TSXV: 17 cos, 42 props

TSX: 21 cos, 80 props

TSXV: 27 cos, 76 props

TSX: 30 Co’s, 114 props

TSX V: 53 Co’s, 143 props

TSX: 9 cos, 9 props

TSXV: 6 cos, 21 props

TSXV: 3 cos, 4 props

TSXV: 2 cos, 19 props

TSX: 22 cos, 56 props

TSXV: 35 cos, 84 props

TSX: 23 cos, 81 props

TSXV: 34 cos, 143 props

Source: the TMX Group

7


Colombia: Large Undeveloped Gold and Coal Mines and internal use of the Jennings Capital client whom it is directly addressed and delivered (including such client’s subsidiaries, the “Company”) in order to assist the Company in evaluating, on a preliminary basis, the feasibility of a possible transaction or transactions and does not carry any right of publication or disclosure, in whole or in part, to any other party. This presentation is for discussion purposes only and is incomplete without reference to, and should be viewed solely in conjunction with, the oral briefing provided by Jennings Capital. Neither this presentation nor part of its contents may be disclosed or used by any other purpose without the prior written consent of Jennings Capital.

Current Coal Reserves 17 Billion Tons; Annual Production of Only 73.5 Million Tons

CERREJON

  • World’s largest open pit coal mining operation

  • 2008: 736.3 Mt 2P; 1,379.9 Mt M&I

  • Operator: Anglo American

PAVO REAL PROJECT

  • Exploration stage

  • Up to 50 g gold in surface samples

  • Owner: Miranda Gold

MARMATO

LA BODEGA

  • 7.5 M Au oz M&I; 2.2 M Au oz Inferred

  • Owner: Medoro Resources

  • Hosts high-grade Au in the La Mascota Zone

  • Owner: Ventana Gold Corp.

ANGOSTURA

Colombia Based

TSX Listed Co’s:

  • Alder Resources ltd.

  • AngloAmerican PLC

  • AngloGold Ashanti

  • Antioquia Gold

  • Colombian Mines

  • Galway Resources

  • Medoro Resources

  • Miranda Gold Corp.

  • Ventana Gold Corp.

  • OroAndes Resource

  • Largest undeveloped gold project in the world

  • 11.5 M Au oz M&I; 3.5 M Au oz Inferred

  • Owner: Greystar Resources

LA COLOSA

  • 2009: 12.32 M Au oz M&I

  • Owner: AngloGold Ashanti

P E R U

GRAMALOTE

  • 2009: 1.04 M Au oz Indicated & Inferred

  • Owners: B2Gold (JV with AngloGold Ashanti)

Source: Invest in Colombia; Company Reports

8


Colombia: Untapped O&G Potential and internal use of the Jennings Capital client whom it is directly addressed and delivered (including such client’s subsidiaries, the “Company”) in order to assist the Company in evaluating, on a preliminary basis, the feasibility of a possible transaction or transactions and does not carry any right of publication or disclosure, in whole or in part, to any other party. This presentation is for discussion purposes only and is incomplete without reference to, and should be viewed solely in conjunction with, the oral briefing provided by Jennings Capital. Neither this presentation nor part of its contents may be disclosed or used by any other purpose without the prior written consent of Jennings Capital.

  • Colombia – next exporter of crude since 1980s; production peaking @ ~860 MBbl/d (Dec 1998) and dropping to ~540 MBbl/d in just 24 months, a 37% reduction

    • Colombia was at risk of becoming a net importer of oil

  • Colombia - currently produces ~776 MBbl/d of crude while consuming ~234 MBbl/d

    • Current production ~ 19.5% higher than the same period last year

    • Downward trend has clearly been reverted

  • 2008 - Colombia stated its goal - doubling production by 2015 ~ equating to roughly 1.3 MMBbl/d

    • Which would require multitude of exploration wells, followed by extensive development scenarios post success

  • Round Colombia 2010 - contains 225 blocks for auction

    • Resulting in a dramatic increase in demand for drilling rigs during the next few years

    • All exploration and production contracts contain a minimum one well commitment (exploration or stratigraphic - onshore only) in the first 36 months

  • The Round Colombia 2008 had 158 blocks up for auction, with the ANH receiving bids on 80 blocks - most of these blocks contain the aforementioned minimum work commitments

Source: Jennings Capital Inc. Research; EIA

9


Colombian elections june 20 th 2010 second round
Colombian Elections: June 20 and internal use of the Jennings Capital client whom it is directly addressed and delivered (including such client’s subsidiaries, the “Company”) in order to assist the Company in evaluating, on a preliminary basis, the feasibility of a possible transaction or transactions and does not carry any right of publication or disclosure, in whole or in part, to any other party. This presentation is for discussion purposes only and is incomplete without reference to, and should be viewed solely in conjunction with, the oral briefing provided by Jennings Capital. Neither this presentation nor part of its contents may be disclosed or used by any other purpose without the prior written consent of Jennings Capital.th, 2010 (Second Round)

Juan Manuel Santos

Antanas Mockus

  • Juan Manuel Santos Calderón

  • Born: March 25th, 1952

  • Leader: Social Party of National Unity

    (Partido Social de Unidad Nacional or “Partido de «la U»)

  • Liberal conservative - Colombia's largest political party

  • Aurelijus Rutenis Antanas Mockus Šivickas

  • Born: August 10th, 1951

  • Leader: Colombian Green Party

    (Partido Verde Colombiano)

  • Green party - "political middle“

  • Professor & researcher: between 1975 and 1993

  • Former Defense Minister

  • Economics - University of Kansas; Economic Development and Public Administration: London School of Economics, Business & Journalism: Harvard

  • Former Mayor of Bogota

  • Math degree: University of Burgundy in Dijon, France MA in philosophy: National University of Colombia

Both Candidates Support President Uribe Policies

First Round - May 30th, 2010: Santos 46.57% vs. Mockus 21.5%


TSX Value Added: Time, Flexibility and Visibility and internal use of the Jennings Capital client whom it is directly addressed and delivered (including such client’s subsidiaries, the “Company”) in order to assist the Company in evaluating, on a preliminary basis, the feasibility of a possible transaction or transactions and does not carry any right of publication or disclosure, in whole or in part, to any other party. This presentation is for discussion purposes only and is incomplete without reference to, and should be viewed solely in conjunction with, the oral briefing provided by Jennings Capital. Neither this presentation nor part of its contents may be disclosed or used by any other purpose without the prior written consent of Jennings Capital.

Leading Natural Resources with Best in the World Mining Expertise

  • Access to capital enables production growth (organic and through acquisitions):

    • TSX has a proven track record of financing, listing and trading mining companies with 57% of the world’s public mining companies on TSX

    • Canadian Equity Markets raised 7 times AIM, 2.5 times ASX and 2.5 times LSE for mining companies in 2009

  • Liquidity event and re-valuation for the main, private shareholders/ owners

  • Access to larger, more international institutional investors and greater analyst coverage:

    • Over 30 seasoned independent analysts

  • Better liquidity, higher market capitalization and higher trading multiples, implying higher valuations

  • Globally visible specialized indices

    • S&P/TSX Global Gold Index; S&P/TSX Global Mining Index

  • Strengthening of Management and Board of Directors:

    • Share ownership and options give the Company the currency to attract talent

    • Exchange mandate to mentor management of newly public companies

    • Pool of talent for outside directors

  • Ability to finance international projects:

    • TSX/ TSXV mining companies have 10,000 projects around the world – 50% are outside of Canada

    • Colombia based only - on the TSX/ Main Board - 7 Companies with 21 properties, while the junior TSXV maintains listing for 9Companies holding 17 Colombian based properties

  • Corporate Governance:

    • Canada offers a balanced corporate governance approach and sophisticated capital markets compared with other resource exchanges

11


Tsx value proposition for mining oil and gas
TSX Value Proposition for Mining & Oil and Gas and internal use of the Jennings Capital client whom it is directly addressed and delivered (including such client’s subsidiaries, the “Company”) in order to assist the Company in evaluating, on a preliminary basis, the feasibility of a possible transaction or transactions and does not carry any right of publication or disclosure, in whole or in part, to any other party. This presentation is for discussion purposes only and is incomplete without reference to, and should be viewed solely in conjunction with, the oral briefing provided by Jennings Capital. Neither this presentation nor part of its contents may be disclosed or used by any other purpose without the prior written consent of Jennings Capital.

What's Listed on TSX and TSX Venture Exchange as at May 31, 2010


Initial Public Offering (IPO) and internal use of the Jennings Capital client whom it is directly addressed and delivered (including such client’s subsidiaries, the “Company”) in order to assist the Company in evaluating, on a preliminary basis, the feasibility of a possible transaction or transactions and does not carry any right of publication or disclosure, in whole or in part, to any other party. This presentation is for discussion purposes only and is incomplete without reference to, and should be viewed solely in conjunction with, the oral briefing provided by Jennings Capital. Neither this presentation nor part of its contents may be disclosed or used by any other purpose without the prior written consent of Jennings Capital.

Effective Methods to Go Public on TSX: IPO vs. RTO

Explorer vs. Developer vs. Producer: Venture Exchange vs. Main Board

Reverse Takeover/Reverse Merger (RTO)

  • Early Stage Companies:

  • Most effective: cost and speed

  • Expertise in home capital markets

  • Existing shareholder base

Used mainly by small cap, early stage non-producing companies

Capital Pool Company (CPC)

(Used mainly by small cap, early stage non-producing companies)

Qualifying Transaction / Acquisition

Special Purpose Acquisition Corp (SPAC)

(Used mainly by small cap, early stage non-producing companies)

Dual Listing:

TSX, BVL


Becoming Public: IPO Route and internal use of the Jennings Capital client whom it is directly addressed and delivered (including such client’s subsidiaries, the “Company”) in order to assist the Company in evaluating, on a preliminary basis, the feasibility of a possible transaction or transactions and does not carry any right of publication or disclosure, in whole or in part, to any other party. This presentation is for discussion purposes only and is incomplete without reference to, and should be viewed solely in conjunction with, the oral briefing provided by Jennings Capital. Neither this presentation nor part of its contents may be disclosed or used by any other purpose without the prior written consent of Jennings Capital.

IPO Process, Documents Required and Approximate Timing

Week 2 to

Week 8 to

Week 1

Week 2

Week 6

Week 7

Week 12

Week 13-16

Week 17

Week 19

Week 20

Week 18

Process

Private

Due

Preliminary

Final due

Circulate final

Shares listed;

company

diligence

due diligence

diligence

prospectus;

commence

retains TSX

work

session prior

session

close

trading

member to

to filing

transaction

manage the

preliminary

process

prospectus

Documentation

Engagement

Engineering

Prospectus

File preliminary

Security

Receipt of

File amended

Commission*;

letter, term

and technical

drafting;

prospectus

prospectus;

final

sheet signed

reports

financials

and greensheet

Submission of

prospectus;

TSX comments;

prepared

prepared

sponsorship

Signing of

Agency

letter

and finalized

and finalized

Agency

Agreement

Agreement

drafted

Marketing

Presentation

Market

Commence

Finalize the

preparation

planning

marketing with

book

Principal Documents Required:

  • Preliminary Prospectus

  • Audited, and Unaudited Interim, Financial Statements

  • Agency Offering/Underwriting Agreement and Sponsorship Agreement

Types of Listing:

  • Conditional listing - Permits listing of shares on TSX pending completion of the IPO, then the company becomes fully listed after the IPO is completed

  • Standard form listing - For a previously listed company

  • Wrap-around listing - For a previously listed company

preliminary

prospectus

and greensheet

Commence

building the list

of potential

purchasers

("the book")

* Assumes two rounds of comments


Becoming Public via RTO: Deal Structure and internal use of the Jennings Capital client whom it is directly addressed and delivered (including such client’s subsidiaries, the “Company”) in order to assist the Company in evaluating, on a preliminary basis, the feasibility of a possible transaction or transactions and does not carry any right of publication or disclosure, in whole or in part, to any other party. This presentation is for discussion purposes only and is incomplete without reference to, and should be viewed solely in conjunction with, the oral briefing provided by Jennings Capital. Neither this presentation nor part of its contents may be disclosed or used by any other purpose without the prior written consent of Jennings Capital.

Reverse Merger/ Qualifying Transaction Mechanics

TSX Listing Criteria

Financial:

  • Adequate Funds to Commercialize

  • C$4 Million Net Tangible Assets

  • 18 Month Projection of Sources

    Distribution:

  • Public Float of C$4 million

  • 300 Public Shareholders

    Technical:

  • 3 Years of Proven and Probable Reserves

1.

RTO

“Canadian Domiciled” Shareholders

CPC/ Shell Co.

Colombian Private Co.

2.

3.

TSX Listed Colombian Public Co.

$$

New Investors


Financing mines in latin america markets and sources
Financing Mines in Latin America: Markets and Sources and internal use of the Jennings Capital client whom it is directly addressed and delivered (including such client’s subsidiaries, the “Company”) in order to assist the Company in evaluating, on a preliminary basis, the feasibility of a possible transaction or transactions and does not carry any right of publication or disclosure, in whole or in part, to any other party. This presentation is for discussion purposes only and is incomplete without reference to, and should be viewed solely in conjunction with, the oral briefing provided by Jennings Capital. Neither this presentation nor part of its contents may be disclosed or used by any other purpose without the prior written consent of Jennings Capital.

Current Market Conditions

Capital Sources & Developments (cont’d)

  • Worldwide equities – regaining ground after the May 2010 sell-ff:

    • European debt concerns, emerging markets raw materials demand fatigue, weak recovery in the US

  • The outlook is one of deflation, corporate balance sheet strength and liquidity, intense volatility and ongoing sovereign credit concerns

  • The era of frugality is clearly intact (D. Rosenberg)

  • The Fed will likely be on hold for an extended period of time

  • Sustained appetite for precious metals producers

  • In contrast with Spring/ Summer 2009, bank debt providers actively pursuing lending mandates

  • New capital providers/ sources available for South America

    • VPP (Volumetric Production Payments or metal stream deals); i.e. Sandstorm Resources Ltd.

      • Luna Gold – Aurizona Project/ Brazil – US$ 17.8m

      • SilverCrest Mines – Santa Elena, Mexico – US$ 12m

    • Forward gold sale agreements: Macquarie Bank

      • Carpathian Gold – RDM Gold Project/Brazil – US$ 30m

    • Supranationals – International Finance Corp. (IFC)

      • Greystar Resources Ltd. – C$12m private placement

  • New developments:

    • Traditionally, project debt financing would close after equity tranche already raised/ finalized

    • Currently, more equity investors require debt financing details/ finalization before committing capital

  • Board representation sought by equity investors

Capital Sources

  • Private/ owner’s capital – very early stages, pre-resource, private companies

  • Equity and debt capital markets for publicly listed enterprises:

    • TSX/ TSX V; dual-listings (i.e. BVC)

    • Bank debt/ non-bank debt – yield, covenants, hedging

    • Strategic partners/ JVs

    • Non-traditional/ exotic sources of financings


Financing mines in latin america tsx statistics
Financing Mines in Latin America: TSX Statistics and internal use of the Jennings Capital client whom it is directly addressed and delivered (including such client’s subsidiaries, the “Company”) in order to assist the Company in evaluating, on a preliminary basis, the feasibility of a possible transaction or transactions and does not carry any right of publication or disclosure, in whole or in part, to any other party. This presentation is for discussion purposes only and is incomplete without reference to, and should be viewed solely in conjunction with, the oral briefing provided by Jennings Capital. Neither this presentation nor part of its contents may be disclosed or used by any other purpose without the prior written consent of Jennings Capital.

Equity Markets: Snapshot

Current Financing Environment

  • New Listings Count: 214 (TSXV: 134 TSX: 80)

  • 114 Canadian Companies + 36 CPCs + 33 ETFs + 8 Structured Products

    • All listed on the TSX Venture Exchange (120) and TSX (71) in the first five months of the year

  • 7 US Companies + 1 US Structured Note

    • All listed on the TSX Venture Exchange (6) and TSX (2) in the first five months of the year

  • 15 International Companies

    • All listed on the TSX Venture Exchange (8) and TSX (7)

  • Financings up 269% on TSXV

    • $3.17 billion raised vs. $859 million at this time last year

    • 951 financings vs. 606

  • $3.3 million – average financing size on TSX Venture Exchange

  • 15 company IPOs on TSX

  • 42 ETF / Structured Product IPOs

    • $4.07 billion in IPO financing vs. $952 million at this time last year

  • $50.8 million – average financing size on TSX

Source: TMX Group – The MiG Report May 2010


Equity capital markets financing environment
Equity Capital Markets: Financing Environment and internal use of the Jennings Capital client whom it is directly addressed and delivered (including such client’s subsidiaries, the “Company”) in order to assist the Company in evaluating, on a preliminary basis, the feasibility of a possible transaction or transactions and does not carry any right of publication or disclosure, in whole or in part, to any other party. This presentation is for discussion purposes only and is incomplete without reference to, and should be viewed solely in conjunction with, the oral briefing provided by Jennings Capital. Neither this presentation nor part of its contents may be disclosed or used by any other purpose without the prior written consent of Jennings Capital.

What's Financed on TSX and TSX Venture Exchange by Sector (May 31, 2010 YTD)


Equity capital markets financing environment1
Equity Capital Markets: Financing Environment and internal use of the Jennings Capital client whom it is directly addressed and delivered (including such client’s subsidiaries, the “Company”) in order to assist the Company in evaluating, on a preliminary basis, the feasibility of a possible transaction or transactions and does not carry any right of publication or disclosure, in whole or in part, to any other party. This presentation is for discussion purposes only and is incomplete without reference to, and should be viewed solely in conjunction with, the oral briefing provided by Jennings Capital. Neither this presentation nor part of its contents may be disclosed or used by any other purpose without the prior written consent of Jennings Capital.

What's Financed on TSX and TSX Venture Exchange by HQ Location (May 31, 2010 YTD)

Source: TMX Group


Nov 2009: and internal use of the Jennings Capital client whom it is directly addressed and delivered (including such client’s subsidiaries, the “Company”) in order to assist the Company in evaluating, on a preliminary basis, the feasibility of a possible transaction or transactions and does not carry any right of publication or disclosure, in whole or in part, to any other party. This presentation is for discussion purposes only and is incomplete without reference to, and should be viewed solely in conjunction with, the oral briefing provided by Jennings Capital. Neither this presentation nor part of its contents may be disclosed or used by any other purpose without the prior written consent of Jennings Capital. $103 Million – Marketed Private Placement

Sep 2009: $12 Million – Marketed Private Placement

Oct 2009: $40 Million – Bought Deal

Sept 2009: $63 Million – Mkt. Short Form Prospectus

May 2010: $50 Million - Bought Deal

Pending: $50 Million – Marketed Private Placement

TSX Mining and Oil & Gas Equity Capital Markets

Recent Colombian Mining/ O&G Financings Overall 2009 TSX/ TSX-V Financings

  • A record $22.2 billion was raised on TSX and TSX-V by the listed mining companies in 2009

  • Mining Sector tops total equity capital raised in 2009 –

    • C$3.0 Billion of equity capital raised in 2009 for South American Mining Projects through 125 financings

  • Top performing index on TSX was S&P/TSX Diversified Metals & Mining Index

Source: TMX Group/ Company Press Releases


Jennings Capital Inc.: Key Principles and internal use of the Jennings Capital client whom it is directly addressed and delivered (including such client’s subsidiaries, the “Company”) in order to assist the Company in evaluating, on a preliminary basis, the feasibility of a possible transaction or transactions and does not carry any right of publication or disclosure, in whole or in part, to any other party. This presentation is for discussion purposes only and is incomplete without reference to, and should be viewed solely in conjunction with, the oral briefing provided by Jennings Capital. Neither this presentation nor part of its contents may be disclosed or used by any other purpose without the prior written consent of Jennings Capital.

Independence

Full Service

Experience

Strategic advice and sourcing of capital unconstrained by ownership – no credit related or principal trading conflicts

Partnership Model

Founded, owned and operated by senior investment banking professionals

Full Service

Partnership

Independence

Focused on corporate finance, mergers and acquisitions, institutional sales and trading and equity research focused on mining, oil & gas and diversified industries

Experience

Independent Financial Advice and Capital Markets Resources/ Expertise Delivered by Seasoned Senior Professionals

Services delivered by senior investment banking professionals who are leaders in the field and have extensively worked in their industries before banking


April 2008 and internal use of the Jennings Capital client whom it is directly addressed and delivered (including such client’s subsidiaries, the “Company”) in order to assist the Company in evaluating, on a preliminary basis, the feasibility of a possible transaction or transactions and does not carry any right of publication or disclosure, in whole or in part, to any other party. This presentation is for discussion purposes only and is incomplete without reference to, and should be viewed solely in conjunction with, the oral briefing provided by Jennings Capital. Neither this presentation nor part of its contents may be disclosed or used by any other purpose without the prior written consent of Jennings Capital.

April 2009

May 2010

$80,000,000

$104,250,000

$40,519,500

Lead Underwriter

Agent

Agent

September 2009

March 2008

June 2007

January 2009

$80,500,000

December 2009

September 2009

Lead Underwriter

$20,000,000

$40,000,000

$385,000,000

Underwriter

Lead Agent

Agent

$50,000,000

$10,400,000

Lead Underwriter

Agent

Jennings Capital Inc.: Recent Mining Financings

Mining Transactions

Proven Success

  • In the last three years, Jennings Capital Inc. has advised in over 40 separate transactions and, in aggregate, managed the placement and after-market trading of approximately $6.0 billion in equity capital for over 70 of Canada’s most successful growth businesses

  • We have led or co-managed offerings ranging in size of up to $392 million

  • We have most recently financed gold and base metals projects from different jurisdictions such South America (Colombia, Peru), Canada, US, West Africa and Australia

September 2009

$63,250,000

Lead Agent


Jennings Capital Inc.: Mining Investment Banking and internal use of the Jennings Capital client whom it is directly addressed and delivered (including such client’s subsidiaries, the “Company”) in order to assist the Company in evaluating, on a preliminary basis, the feasibility of a possible transaction or transactions and does not carry any right of publication or disclosure, in whole or in part, to any other party. This presentation is for discussion purposes only and is incomplete without reference to, and should be viewed solely in conjunction with, the oral briefing provided by Jennings Capital. Neither this presentation nor part of its contents may be disclosed or used by any other purpose without the prior written consent of Jennings Capital.

Daryl J. Hodges – President & CEO

David Donato

  • Co-founder of the Jennings’ Toronto operation and directly oversees the investment banking group

  • Over the last 11 years, carried out mining equity research and investment banking at Jennings Capital and at HSBC Securities including financings of $600K to $1.2 billion

  • Structured, arranged and led past financings totaling in excess of $2.5 billion

  • As a geologist, worked in the mining industry in Canada, Sweden, Finland, Russia and South-East Asia for over 18 years

  • More than 14 years experience in the financial services industry, including 9 years of investment banking experience

  • Former Head of Investment Banking at Loewen, Ondaatje, McCutcheon and 6 years experience in public accounting with Arthur Andersen and BDO Dunwoody

  • B.A. (Honours Chartered Accountancy Program) from the University of Waterloo, CA from the Institute of Chartered Accountants of Ontario and CFA charterholder

Simion Candrea

Ricky Chan

  • Joined Jennings in early 2005, as an Investment Banking Associate in our Toronto office

  • Primarily focused on the mining and special situations sectors

  • Prior to joining Jennings, five years with RBC Dominion Securities Inc. and the Dutch Bank ABN AMRO, covering the Healthcare/Pharmaceutical sector in the European Emerging Markets

  • Joined Jennings in January 2008 as an Investment Banking Associate at our Toronto office

  • Primarily focused on the potash/ fertilizer and special situations sectors

  • Prior to joining Jennings, six years in the financial services industry which includes Loewen, Ondaatje, McCutcheon and Deloitte Financial Institution Group


Jennings Capital Inc.: Key People in Mining Research and internal use of the Jennings Capital client whom it is directly addressed and delivered (including such client’s subsidiaries, the “Company”) in order to assist the Company in evaluating, on a preliminary basis, the feasibility of a possible transaction or transactions and does not carry any right of publication or disclosure, in whole or in part, to any other party. This presentation is for discussion purposes only and is incomplete without reference to, and should be viewed solely in conjunction with, the oral briefing provided by Jennings Capital. Neither this presentation nor part of its contents may be disclosed or used by any other purpose without the prior written consent of Jennings Capital.

Peter Campbell

Mark Turner

  • Professional Mining Engineer with 25 years experience in the mining business with in-depth mining background

  • Formerly an exploration manager with Falconbridge Limited (now Xstrata) where he worked on various worldwide exploration projects involving exploration for Ni, Cu, and Cu-Zn deposits

  • Peter is a member of the PEO, CIM, PDAC, SEG and MRAG

  • Peter covers base metals, iron ore, and Canadian gold producers

  • Joined Jennings in February 2008 as an Associate covering the Mining sector

  • Prior to joining Jennings, Mark worked for Loewen, Ondaatje, McCutcheon Ltd. as a mining Research Associate

  • Worked for a large Canadian home developer, valuing land acquisitions and developing infrastructure projects

  • Holds a B.A.Sc. in Geological Engineering from the University of Waterloo and a MBA from the Richard Ivey School of Business at the University of Western Ontario

Stuart McDougall

  • Studied geology at the University of Toronto

  • Joined Jennings in June 2006 with more than 10 years of mining industry experience, including 4 years as a reporter for the Northern Mines

  • A mining research associate with GMP Securities covering mining companies outside the conventional gold and base metals sectors

  • Stuart focuses on gold producers and developers, mainly in Africa and Latin America


Jennings Capital Inc.: Oil & Gas Investment Banking and internal use of the Jennings Capital client whom it is directly addressed and delivered (including such client’s subsidiaries, the “Company”) in order to assist the Company in evaluating, on a preliminary basis, the feasibility of a possible transaction or transactions and does not carry any right of publication or disclosure, in whole or in part, to any other party. This presentation is for discussion purposes only and is incomplete without reference to, and should be viewed solely in conjunction with, the oral briefing provided by Jennings Capital. Neither this presentation nor part of its contents may be disclosed or used by any other purpose without the prior written consent of Jennings Capital.

Robert Jennings – Chairman

David McGorman

  • 40 years investment and resource based experience in research, investment banking, corporate finance, joint ventures, mergers & acquisitions

  • Founded two successful investment banking firms - Carson Jennings & Associates and Jennings Capital Inc. and has headed the western Canadian investment banking divisions of two national firms - McLeod Young Weir and Midland Walwyn Capital Inc.

  • He has served and serves on numerous boards, including Western Financial Group and Investment Dealers Association (now IIROC)

  • Over 15 years of investment banking and corporate finance experience within the Canadian energy sector

  • Prior to joining Jennings, was head of Haywood Securities Inc.’s Calgary corporate finance department

  • Has advised clients on mergers and acquisitions with an aggregate transaction value of over $2 billion

  • Graduated with an Honours B.Sc. in Theoretical Physics from the University of Guelph and an M.B.A. from the Michael DeGroote School of Business

Liam Balfour

Michael Shumlich

  • Has over nine years of experience in the oil and gas investment business encompassing both equity research and corporate finance

  • Recently has been focused on Jennings’ oil and gas merger and acquisition assignments, having advised on over $750 million of transactions since January 2003

  • CFA charterholder

  • Over six years of investment banking experience in the oil and gas sector working on both domestic and international assignments

  • Two years of corporate development experience with Agrium Inc., an international fertilizer company

  • Holds a Bachelor of Commerce degree with Distinction, a Master of Science degree and is a CFA charterholder


May 2010 and internal use of the Jennings Capital client whom it is directly addressed and delivered (including such client’s subsidiaries, the “Company”) in order to assist the Company in evaluating, on a preliminary basis, the feasibility of a possible transaction or transactions and does not carry any right of publication or disclosure, in whole or in part, to any other party. This presentation is for discussion purposes only and is incomplete without reference to, and should be viewed solely in conjunction with, the oral briefing provided by Jennings Capital. Neither this presentation nor part of its contents may be disclosed or used by any other purpose without the prior written consent of Jennings Capital.

$3,400,000

Co-Lead

Jennings Capital Inc.: Recent Oil & Gas Financings

Oil & Gas Transactions

August 2009

Pending

Proven Success

  • We have financed oil and gas projects from different jurisdictions throughout the world including South America (Colombia, Guyana, Ecuador, Peru, Argentina and Brazil), Canada, China, Africa and the FSU

  • In addition, Jennings has carried out many advisory assignments for oil and gas located both domestically and internationally

$40,000,000

$80,500,000

Agent

Agent

Pending

December 2009

$50,000,000

$65,000,000

Agent

Advisor

May 2010

March 2010

February 2010

$23,500,000

USD$25,000,000

$63,400,000

Managing Dealer

Co-Lead

Co-Lead


Jennings Capital Inc.: Key People in O&G Research and internal use of the Jennings Capital client whom it is directly addressed and delivered (including such client’s subsidiaries, the “Company”) in order to assist the Company in evaluating, on a preliminary basis, the feasibility of a possible transaction or transactions and does not carry any right of publication or disclosure, in whole or in part, to any other party. This presentation is for discussion purposes only and is incomplete without reference to, and should be viewed solely in conjunction with, the oral briefing provided by Jennings Capital. Neither this presentation nor part of its contents may be disclosed or used by any other purpose without the prior written consent of Jennings Capital.

Gregory Chornoboy

Jennings: Colombian Research Coverage

  • Joined Jennings in 2005 and covers energy companies with international operations

  • Prior positions with Amoco Canada Petroleum, Saudi Aramco, and Ultramar Oil & Gas, as well as undertaking consulting assignments with various domestic Canadian energy companies

  • Entered the investment banking sector in 1993, as Vice President, Corporate Finance with FirstEnergy Capital.

  • Former director and Secretary of the Alberta Performing Arts Stabilization Fund

  • Alange Energy Corp.

  • Canacol Energy Ltd.

  • Gran Tierra Energy Inc.

  • Pacific Rubiales Energy

  • Petrominerales Ltd.

  • Suroco Energy Inc.

David Ricciardi

  • Prior to joining Jennings, David spent six years at Ross Smith Energy Group Limited, the last two years as Vice President of Finance

  • At Ross Smith David covered numerous exploration and production companies operating in Canada and the United States

  • Prior thereto, David spent over a year at Peters & Co. Limited as an analyst in the corporate finance department


Case study greystar resources ltd gsl tsx
Case Study: and internal use of the Jennings Capital client whom it is directly addressed and delivered (including such client’s subsidiaries, the “Company”) in order to assist the Company in evaluating, on a preliminary basis, the feasibility of a possible transaction or transactions and does not carry any right of publication or disclosure, in whole or in part, to any other party. This presentation is for discussion purposes only and is incomplete without reference to, and should be viewed solely in conjunction with, the oral briefing provided by Jennings Capital. Neither this presentation nor part of its contents may be disclosed or used by any other purpose without the prior written consent of Jennings Capital.Greystar Resources Ltd. (GSL: TSX)

Company Overview

Market Statistics

  • Greystar Resources is a TSX and AIM-listed exploration and development company focused on developing its Angostura gold-silver project

  • Greystar's main asset is the 100%-owned Angostura gold-silver project located in northeastern Colombia

    • 450 km north of the capital city of Bogota

    • 55 km north east of the city of Bucaramanga

  • Greystar is headquartered in Vancouver, Canada with an operations office in Bucaramanga, Colombia

  • Feasibility study completed, DFS under way

  • Over 300,000 metres drilled

  • Current Gold Resource: 11.5 million oz Measured & Indicated, 3.5 million oz Inferred

  • Current Silver Resource: 61.0 million oz Measured & Indicated, 18.8 million oz Inferred

Angostura Project

*As at June 16, 2010

**As at May 12, 2010

***As at March 31, 2010

Source: Greystar Resources Ltd., Bloomberg Financial Markets


Case Study: Greystar Resources Ltd (GSL: TSX) and internal use of the Jennings Capital client whom it is directly addressed and delivered (including such client’s subsidiaries, the “Company”) in order to assist the Company in evaluating, on a preliminary basis, the feasibility of a possible transaction or transactions and does not carry any right of publication or disclosure, in whole or in part, to any other party. This presentation is for discussion purposes only and is incomplete without reference to, and should be viewed solely in conjunction with, the oral briefing provided by Jennings Capital. Neither this presentation nor part of its contents may be disclosed or used by any other purpose without the prior written consent of Jennings Capital.

Early, Consistent & Solid Support Capital Markets Support

FINANCINGS:

  • Nov 2004: Jennings Capital leads C$21.7 MM equity financing

  • Sept 2009: Jennings Capital leads C$63.2 MM equity financing

    RESEARCH & TRADING:

  • One of the first dealers to provide research early on

  • Consistent trading & after market support

In late April, the Ministry of the Environment, Housing and Territorial Development (MAVDT) requested Greystar file a new Environmental Impact Assessment (EIA) in regard to the development of an open pit gold and silver mine at the Angostura Project in Colombia

April 23rd close: C$6.50

April 27th close: C$3.60 ~ C$245 MM in shld. value wiped

Source: Bloomberg Financial Markets


Partners in growth
Partners in Growth and internal use of the Jennings Capital client whom it is directly addressed and delivered (including such client’s subsidiaries, the “Company”) in order to assist the Company in evaluating, on a preliminary basis, the feasibility of a possible transaction or transactions and does not carry any right of publication or disclosure, in whole or in part, to any other party. This presentation is for discussion purposes only and is incomplete without reference to, and should be viewed solely in conjunction with, the oral briefing provided by Jennings Capital. Neither this presentation nor part of its contents may be disclosed or used by any other purpose without the prior written consent of Jennings Capital.

Daryl Hodges (416) 304 2174

Simion Candrea (416) 304 2186

Ricky Chan (416) 304 3891

Mark Styles (416) 304 3892

Michelle Hung (416) 304 3893


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