EHR HR R Resou ources es Ltd (AS ASX:EHX) Un Unleas ashin - - PowerPoint PPT Presentation

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EHR HR R Resou ources es Ltd (AS ASX:EHX) Un Unleas ashin - - PowerPoint PPT Presentation

EHR HR R Resou ources es Ltd (AS ASX:EHX) Un Unleas ashin ing V Valu lue f from om the W Wor orld lds Best Diamond P Projec ects Peter Ravenscroft Managing Director March 2020 1 Forward L d Looking ng S Statemen ents


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Un Unleas ashin ing V Valu lue f from

  • m the W

Wor

  • rld

ld’s Best Diamond P Projec ects

Peter Ravenscroft

Managing Director March 2020

EHR HR R Resou

  • urces

es Ltd

(AS ASX:EHX)

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Forward L d Looking ng S Statemen ents

Certain information contained herein regarding EHR Resources Ltd, including management’s assessment

  • f future plans and operations, may constitute forward-looking statements under applicable securities

law and necessarily involve risks, including but not limited to risks associated with mining exploration,

  • perating costs, production costs, volatility of share prices, currency fluctuations, imprecision of

resource and reserve estimates, environmental risks and ability to access sufficient capital from internal and external sources. As a consequence, actual results may differ materially from those anticipated in any forward looking

  • statements. Plans, intentions or expectations disclosed in any forward-looking statements or information

should not be read as guarantees of future results or events, and will not necessarily be accurate indications of whether or when or by which such results or events will be achieved. Except as required by law, EHR Resources Ltd expressly disclaim any intention and undertake no

  • bligation to update any forward looking statements or information as conditions change.
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An ideal al t time f for investment i in a severel ely stressed s sector

Share price trends show diamond company valuations at 3 year low Diamond exploration companies unable to function:

  • market cap 70-90% down from 3-year high
  • capital raising at impractical level of dilution
  • unable to fund projects and no news flow
  • no relief from downward spiral
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Other 47 Petra 4 Dominion 9 Rio Tinto 19 De Beers 33 ALROSA 31

Global Revenue 2019 US$ billions ($160B total) Rough Diamonds

Exploration, Production, Sales

12 Polished Diamonds

Cutting and Polishing, Sales

19 Diamond Jewelry

Design and manufacturing

51 Retail Sales

Jewelry and Watches

78

Other 9 Angola 9 South Africa 8 DRC 17 Australia 13 Botswana 25 Canada 24 Russia 39

2019 World Production – Total 142 Million Carats by country and by company Significant Forecast Supply Shortfall

  • 2019 global production of 142 million carats for total revenue of ~US$12

billion

  • Forecast supply shortfall in 2030 varying between 20% and 35% of world

demand

  • Need for additional 35-75 million carats per year from future mine

projects

  • Current project pipeline forecast to add only 10-20 million carats by

2030

An industry needing significant investment over next ten years

3x increase in exploration spend required now to meet industry demand

Optimistic demand Base supply Base demand Optimistic supply

Source: The Global Diamond Industry 2019, Bain & Company

Di Diamon

  • nd s

sector f

  • r fundamentals
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Value ue c creation o n opportun unity in u unloved i d indus dustry

Exploiting a unique upside opportunity in an underfunded high-value sector

  • New source of investment capital to diamond sector
  • Asset ownership of leading diamond projects via earn-in deals
  • Building of diverse portfolio providing risk-balanced pure-play

diamond investment vehicle

  • Formation of powerful new player in diamond industry

Breakthrough strategy

  • Diamond project evaluation more complex than other minerals
  • Historical funding models impatient and inappropriate
  • Premature curtailment commonly results in under-estimation of

project value

Unresolved

  • pportunities

awaiting harvest

  • A high growth commodity sector with forecast significant supply

shortfall in next ten years

Strong fundamentals

  • Many decades of large-company diamond project experience
  • Industry leading expertise on advanced valuation methods
  • Backed by board with exceptional track record in value creation

World-class management team

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Emerging ng E EHX S Strateg egy

  • Identify incomplete evaluation programs on promising discoveries in Canada, Botswana, Australia
  • Carefully targeted funding will prove real value in many cases
  • Project entry after discovery, at least microdiamond identification
  • Initial investment at relatively low cost (<$5-10M per project)

Incubation funding focused on missed opportunities

  • A portfolio of hand-picked 5-10 projects across different localities, development stages and

varying risk profiles

  • Dynamic portfolio management optimizes value and limits stagnation of pipeline
  • Project selection, portfolio management and investment governance based on extensive large

company experience

Managed risk through balanced portfolio

  • Project selection and rigorous evaluation by industry-leading experts
  • Comprehensive global project database for project benchmarking
  • Clear understanding of risks/opportunities
  • Leveraging uncertainty by superior knowledge and expertise

Leverage global industry knowledge and technical expertise A bold new strategy to transform the diamond sector

  • Asset-level earn-in to control position
  • Focus on in-ground expenditure and low overhead
  • Maximized investor returns by early asset sale or staged funding to PFS and beyond
  • Ultimate evolution into pure-play diamond mining mid-cap

Patient capital invested in asset

  • wnership
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Project style

  • target deposits with high value

diamonds

  • larger sized stones, colored

stones, higher qualities

Location

  • traditional diamond elephant

country (Canada, Botswana, Australia)

  • no high-risk jurisdictions

Scale

  • mid-tier deposits that are not in

focus for majors

  • potential district scale for future

value generation

Bala lanced P Port rtfolio lio

Bulk sampling of more advanced projects

  • earn-in incubation funding of

stalled projects

  • JV partnerships with select owners
  • control ownership of asset

Earlier stage generative exploration

  • green/brown fields projects in

areas of unresolved opportunities

  • project generator model with

leading diamond explorers

Potential early cashflow

  • small low capex/opex development
  • pportunities
  • continual monitoring of distressed

current operations

  • equity positions or partnerships

Core strategic focus, with higher/lower risk supporting investments

Managing risk through a diverse portfolio of hand-picked projects

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Nanuk nuk D Diamonds nds

First project investment in Canada

  • Abloviak Fjord, Torngat Peninsula, Quebec
  • 1,650 km NNE of Montreal
  • Access by helicopter from Kangiqsualujjuaq

(formerly George River, 100km)

Remote Location

  • 625 Mining Claims over 274 km2 in Category III

lands of New Quebec Territory

  • Mining projects may be developed subject to

environmental and social impact assessment and review

100% Ownership

  • Acquisition of 100% of Nanuk Diamonds Inc

approved by shareholders 9 March 2020

Recent Acquisition

  • Several occurrences of diamond-bearing kimberlitic

dykes

  • Originally found in early 2000’s but left unexplored

for last 15 years

Known Diamond Occurrence

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Nanuk nuk D Diamonds nds

An unresolved diamondiferous district

  • Establish potential for greater scale
  • High-definition airborne mag program

and further surface sampling 2020

  • Future drilling/sampling pending
  • ngoing results

Planned Work Program

  • 2018 remote sensing showed expanded

dyke potential and larger blows, possible kimberlites

  • Several circular features; targets

identified

  • Results from 44 surface samples

collected in 2019 expected Q2 2020

Nanuk Diamonds Work 2018-19

2018/2019 Nanuk Diamonds Inc work identified a number of new dykes and other targets of interest

  • Sporadic exploration until 1999
  • Significant work by Twin Mining 1999-

2004 including mapping, sampling, bulk sampling.

  • Large microdiamond programs showing

relatively coarse size distribution

  • Bulk sampling (340 tonnes) in 2000

produced 13 carats, largest stone 0.7 carats, but relatively flat size distribution

  • Apparent low grade, but no diamond

price established

Exploration History pre 2018

known dykes in green new dykes in purple 2019 surface samples as red dots

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2020 Ou Outlook

  • ok

Steady implementation of strategy and early results anticipated

  • Already evaluating opportunities in Canada,

Botswana and Australia

  • Expect announcements of incremental transactions
  • ver coming months

Additional investments under evaluation

  • Summer work program planned at Nanuk
  • Other investments will include immediate drilling and

bulk sampling

Early drilling and sampling results expected

An exciting new entrant into the diamond space

  • Initial investments will provide impetus to short-term

growth in EHR

  • Additional funding required for ongoing investments

in 2020

Capital raising being considered

  • Existing 18% JV holding in primary gold epithermal

target

  • Likely to continue to hold pending drilling permits

La Victoria Project, Peru

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Corpora rate

Exc xchange ASX:EHX X Shares es I Issued ued:

Options:

146. 146.7 m million

13. 13.5 million u unliste ted, e escrowe wed

Ma Market C Capit pitalis lisatio ion ( n (@ $ $0.10 share pric ice) e): A$14. $14.7 millio lion Fina nanc ncia ial: l: $2. $2.1 millio lion c n cash, h, z zer ero debt Board rd of Di

  • f Directors:

Step ephen en D Denn nnis is (Cha hair irman) n) Mi Micha hael O el O’Keeffe Jeremy my King ng David id B Bradle dley Pet eter er R Ravens nscroft Ma Major H Holde lders: M O O’Kee eeffe e 16.39% 39% M M Dor Dorion 6. 6.82% 82% HSBC N Nominee ees 3. 3.89% 89% S D Denn nnis is 3. 3.05% 05%